Mola Development Corp. v. City of Seal Beach
| Decision Date | 27 August 1997 |
| Docket Number | No. G014576,G014576 |
| Citation | 67 Cal.Rptr.2d 103,57 Cal.App.4th 405 |
| Parties | , 97 Cal. Daily Op. Serv. 7046, 97 Daily Journal D.A.R. 11,277 MOLA DEVELOPMENT CORPORATION, Plaintiff and Appellant, v. CITY OF SEAL BEACH et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
Is the mere filing of a lawsuit for administrative mandamus the same as pursuing it to decision? Mola Development Corporation argues it is, but we disagree. Mola filed an action for administrative mandamus to overturn the City of Seal Beach's quasi-judicial decision to disapprove a vesting tentative map, but voluntarily dismissed it on the eve of trial. That dismissal precludes, we will hold, a suit for damages for a regulatory taking.
There is an obvious and fundamental distinction between initiating mandamus and obtaining a judgment. The Supreme Court tells us "[a] final administrative decision includes exhaustion of any available review mechanism." (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 12, 32 Cal.Rptr.2d 244, 876 P.2d 1043, italics added.) By dropping mandamus, Mola allowed the administrative decision to achieve finality and issue preclusive effect. It cannot now seek damages for a regulatory taking.
We are not impressed with Mola's claim to be exempt from the mandamus requirement because its option to develop the property expired during the pendency of the mandamus action. Hensler itself holds that private parties cannot unilaterally shorten the time for reasonable administrative and judicial review by terminating their property interests in the subject development.
Our decision does not place developers like Mola in a "Catch 22" from which they never can extricate themselves. Mola, not Seal Beach, determined the length of its option. Nothing in the record suggests the city tried to run out the clock until the option expired. Mola did nothing to expedite the trial of the mandamus action while its option was still extant; to the contrary, the evidence shows Mola itself continued the trial to accommodate its new trial counsel until after the option ran. Mola's expired option does not justify depriving Seal Beach of the opportunity afforded by mandamus to rescind or modify invalid development restrictions before being subjected to a claim for damages for a regulatory taking.
Mola acquired an option from Hellman Properties to purchase and subdivide a portion of the Hellman Ranch, 149 acres of undeveloped real property in Seal Beach. Mola proposed to build more than 300 residential units.
The project was controversial from the start. It traversed the Inglewood-Newport earthquake fault and encompassed significant wetlands areas. There was much local opposition. Despite this, the project was initially approved in 1989 by the city council, which adopted a vesting tentative map and approved a development agreement. 1
A citizens group sued Mola and the city. In May 1990, the superior court (Judge Bauer) invalidated the approvals, finding they were void at the outset because the city's general plan contained an obsolete housing element. The city council accepted the court's judgment and immediately adopted a new housing element. It rescinded the ordinances and resolution at issue.
A reconstituted council reconsidered the Mola project under the new general plan. On June 25, 1990, the council conducted public hearings and adopted Resolution 3937 by a 3-2 vote. It disapproved Mola's application for a vesting tentative map, a related specific plan amendment, and a development agreement. The council determined Mola's proposals were not in compliance with the new general plan.
The council purported to base its decision in part on the "geologic instability of the site," information gained from the Loma Prieta earthquake, which struck the San Francisco Bay area the previous October, and evidence presented by geologists and seismic consultants. It found certain portions of the site to pose such high potential for liquefaction that residences should not be constructed there without further study. The city invited Mola to work with its staff to provide for "appropriate development, including residential uses."
Mola attacked the city's decision on two fronts. On July 20, 1990, Mola appealed from the trial court's judgment invalidating its development approvals. Mola argued Judge Bauer abused his discretion in declaring the development approvals for the project to be void ab initio, thereby requiring Mola to "throw out" its nearly $11 million in expenditures and "four years of planning, processing, and public hearings, and ... or [ ] start from scratch...." Mola contended Judge Bauer should not have invalidated the prior approvals, but simply suspended them during the time the city's housing element was technically out of compliance with state law. 2
In September 1990, contending the city had "finally and conclusively acted to prohibit development," Mola petitioned for a writ of administrative mandate pursuant to Code of Civil Procedure section 1094.5. Mola also sued the city and the three councilmembers who voted against the project for damages for civil rights violations and for inverse condemnation.
In July 1991, about ten months after the petition for writ of mandate was filed, the trial court ordered a December trial date for the writ proceedings, with the remaining causes of action to be tried later. In November Mola moved to continue the December trial for an additional 150 days because of the "normal, time-consuming pace of complex civil litigation" and because it had been forced to retain new counsel. The trial court agreed to a continuance over objection, until February 1992.
In October 1991, a different panel of this court decided Mola's appeal from Judge Bauer's order invalidating the city's original development approvals. We agreed with Judge Bauer that the development approvals were void and that the city was required "to start the process anew" upon the city's approval of a new housing element. (Wetlands Restoration Society v. City of Seal Beach, supra, at G009822.)
Mola's option to acquire a portion of the Hellman Ranch expired in November 1991. According to Mola, "[o]n December 6, 1991, the true owner of the subject property terminated all of Mola's interests in the property" and refused to grant any further extensions. Mola says it thereby lost any rights to purchase or develop the property, causing it to lose the "beneficial interest" necessary to assert a claim for administrative mandamus. Mola had not previously sought to expedite the mandamus trial while it still had a viable option to purchase the property.
Despite its claim to loss of standing, on December 10, 1991, Mola petitioned for review of this court's October 31 opinion. Mola filed a reply brief in the Supreme Court on January 9, 1992. The court denied review on March 2, 1992.
On February 14, four days before the continued trial date, Mola dismissed its mandamus claim without prejudice. The record does not reveal why.
After Mola dismissed the mandamus action, defendants filed supplemental answers, pleading as a defense Mola's failure to test the city council's decision on the project by mandamus. The trial court granted defendants' motions to exclude Mola's remaining causes of action. Mola timely appealed.
The law in this area is well summarized as follows: (McDaniel v. Board of Education (1996) 44 Cal.App.4th 1618, 1621, 52 Cal.Rptr.2d 448.)
Mola concedes the city acted in a "quasi-judicial capacity" in disapproving the tentative tract map. There is no question that administrative mandamus under Code of Civil Procedure section 1094.5 was the proper remedy for Mola to challenge this decision. That, presumably, is why Mola initially pursued it. (See California Coastal Commission v. Superior Court (hereafter Ham) (1989) 210 Cal.App.3d 1488, 1496, 258 Cal.Rptr. 567.)
The Supreme Court's decision in Hensler v. City of Glendale, supra, 8 Cal.4th 1, 32 Cal.Rptr.2d 244, 876 P.2d 1043 explains in great detail why property owners must first succeed in setting aside a city's decision through a judicial determination on mandamus before pursuing damages for a regulatory taking. Hensler stresses the importance of allowing the city to change its mind (Id. at p. 7, 32 Cal.Rptr.2d 244, 876 P.2d 1043.)
By dismissing its mandamus action and electing to proceed exclusively for damages, Mola denied the city the opportunity to respond to an adverse judicial ruling by remedying the wrong or mitigating the damages claimed. Mola "seeks to do what the high court says a landowner has no right to do--to force the city to exercise the power of eminent domain." (Id. at p. 12, 32 Cal.Rptr.2d 244, 876 P.2d 1043.)
The decision in Healing v. California Coastal Commission (1994) 22 Cal.App.4th 1158, 27 Cal.Rptr.2d 758 does not support a different result. Healing held that ...
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