Old Town Development Corp. v. Urban Renewal Agency of City of Monterey

• Decision Date: 09 March 1967
• Citation: 57 Cal.Rptr. 426,249 Cal.App.2d 313
• Court: California Court of Appeals Court of Appeals
• Parties: OLD TOWN DEVELOPMENT CORP., a California Corporation, Plaintiff and Appellant, v. The URBAN RENEWAL AGENCY OF the CITY OF MONTEREY, an Agency created under the Community Redevelopment Law, Arnold Manor, Warren G. Gipe, Marian Gratiot, Dan Snell and David L. Walton, constituting the members of said Agency, Defendants and Respondents. OLD TOWN DEVELOPMENT CORP., a California Corporation, Plaintiff and Appellant, v. The URBAN RENEWAL AGENCY OF the CITY OF MONTEREY, Arnold Manor, Warren G. Gipe, Marian Gratiot, Dan Snell and David L. Walton, individually and collectively as constituting the members of said Agency, Arthur Chang, as Executive Director of said Agency, D. Jackson Faustman, Defendants and Respondents. Civ. 22557, 23269.

Page 426

57 Cal.Rptr. 426

249 Cal.App.2d 313

OLD TOWN DEVELOPMENT CORP., a California Corporation, Plaintiff and Appellant, v. The URBAN RENEWAL AGENCY OF the CITY OF MONTEREY, an Agency created under the Community Redevelopment Law, Arnold Manor, Warren G. Gipe, Marian Gratiot, Dan Snell and David L. Walton, constituting the members of said Agency, Defendants and Respondents.

OLD TOWN DEVELOPMENT CORP., a California Corporation, Plaintiff and Appellant, v. The URBAN RENEWAL AGENCY OF the CITY OF MONTEREY, Arnold Manor, Warren G. Gipe, Marian Gratiot, Dan Snell and David L. Walton, individually and collectively as constituting the members of said Agency, Arthur Chang, as Executive Director of said Agency, D. Jackson Faustman, Defendants and Respondents.

Civ. 22557, 23269.

Court of Appeal, First District, Division 1, California.

March 9, 1967.

Noland, Hamerly, Etienne & Fulton, Salinas, for appellant.

Richard J. Dormody, Monterey, Eugene B. Jacobs, Los Angeles, Donald H. Smith, Monterey, for respondents.

SIMS, Associate Justice.

Old Town Development Corp., a corporation, has appealed from adverse rulings in each of two actions it instituted against The Urban Renewal Agency of the City of Monterey and others. Each action involves the legality of the identical redevelopment procedures and activities in which the agency engaged, and the appeals were ordered consolidated for hearing on motion of the agency.

In the first action (No. 57735) Old Town sought a peremptory writ of mandate commanding the agency and its five members (1) to rescind a resolution concerning qualification of developer proposals which disqualified all proposed developers except one of Old Town's competitors, (2) to rescind a resolution providing for a public hearing concerning proposed land disposition within the Custom House Redevelopment Project area, and (3) to comply with the provisions of the Brown Act (Gov.Code, §§ 54950--54960). The prayer also sought $100,000 damages and costs. Old Town served its petition for writ of mandate and its notice of motion for peremptory writ of mandate upon the agency and four of its members. The agency filed an answer, demurrer and the affidavit of the other member, its chairman. The matter came on for argument and a minute order was entered which recites: 'the Court denies the Petition upon the grounds that Petitioner has not exhausted all administrative remedies.' The demurrer was thereafter dropped from the calendar. The first appeal (1 Civ. 22557) is from the order denying the petition. (See Steen v. Board of Civil Service Commrs. (1945) 26 Cal.2d 716, 727--728, 160 P.2d 816; and Wenzler v. Municipal Court (1965) 235 Cal.App.2d 128, 129--130, 45 Cal.Rptr. 54; but cf. Brice v. Dept. of Alcoholic Bev. Control (1957) 153 Cal.App.2d 315, 318, 314 P.2d 807.)

Some months later, Old Town filed its complaint for damages (No. 59255) against the agency, its five members, its director and a consultant whose activities are alleged to have violated laws and regulations designed to avoid or reveal conflicts of interest. In this action Old Town, as assignee of Fluor-Old Town, a joint venture which submitted a redevelopment proposal to the agency, seeks to recover $103,736.41 special damages for the costs of preparing the proposal and $200,000 general damages. The defendants, without otherwise pleading, gave notice of a motion for judgment on the pleadings (see Dias v. California Emp. Stab. Com. (1952) 113 Cal.App.2d 374, 375 and 382, 248 P.2d 427) which was predicated not only upon the complaint for damages, but also upon the records of the aforementioned mandamus proceeding and of an even earlier proceeding in which Old Town had sought a writ of mandate. ¹ The matter came on for hearing on defendants' motion and plaintiff's points and authorities and a minute order was entered indicating that the motion was granted. Old Town appealed from the minute order. This appeal must be dismissed as an appeal from a nonappealable order. (Budrow v. Wheatcraft (1953) 115 Cal.App.2d 517, 522, 252 P.2d 637; and see Stevens v. Key Resistor Corp. (1960) 186 Cal.App.2d 325, 326, 8 Cal.Rptr. 908; 3 Witkin, Cal. Procedure, Appeal, § 20, p. 2163, and id., §§ 119--120, pp. 2294--2296.) Thereafter, a formal judgment was entered and a subsequent notice of appeal gave rise to the proceedings now before this court (1 Civ. 23269).

The Facts

A synthesis of the facts alleged, and those which are properly before this court through augmentation of the record to include the proceedings in action No. 57705 (fn. 1) and the 'Developer's Packet,' which is referred to in the petition and complaint, reveals the following:

The Urban Renewal Agency of the City of Monterey is an agency organized and existing under the Community Redevelopment Law of the State of California (Health & Saf.Code, Div. 24, Part I, §§ 33000--33714, as recodified by Stats., 1963, ch. 1812, p. 3677) as an agent and agency of the City of Monterey, and the city council of that city is the legislative body referred to in the governing law. The five individuals who are named both as respondents in the mandamus proceeding and as defendants in the complaint for damages are the members, or governing body of the agency. The complaint also names as defendants the executive director of the agency and D. Jackson Faustman.

At all of the times referred to Faustman was employed by the City of Monterey to make a traffic study of the city, and in particular of the Custom House Redevelopment Project and its effect on the city.

On June 12, 1962, the city council of the City of Monterey recorded a previously adopted urban redevelopment plan which embraced the area referred to as the Custom House Redevelopment Project area. (See §§ 33360--33376, ² formerly, pre-1963, §§ 33730--33749.)

Prior to May 20, 1964, the agency distributed to prospective developers, for a fee of $50, a so-called 'Developer's Packet' containing all of the conditions and qualifications pertaining to proposals by prospective developers of the Custom House Project for the purchase and redevelopment of the property embraced in that project pursuant to the adopted redevelopment plan. The 'Invitation for Proposals' which directed attention to the availability of the 'Developer's Packet' and was also made a part thereof, further indicated that the agency would also consider proposals regarding an alternative plan which was then under study by the city, by its planning commission, and by the agency, but which admittedly could not be carried out until the adopted redevelopment plan was amended to conform to it.

On January 17, 1964, Custom House Associates, a joint venture, furnished the agency with a prequalification statement in which it listed D. Jackson Faustman as one of its principal associates and consultants, and as the parking consultant it anticipated it would utilize if selected as the successful bidder.

On April 30, 1964, Custom House Associates, which has not been made a party in any of the actions initiated by Old Town, submitted its proposal to the agency. This proposal did not contain a proposal for redevelopment in accordance with the adopted redevelopment plan, but only set forth a proposal for redevelopment in accordance with the alternate plan, with some modifications which admittedly were not material. The proposal also included a statement, similar to that dated January 17, 1964, listing Faustman's connection with the developer.

Prior to the deadline, which had been extended to May 20, 1964, two additional proposals were filed with the agency including that of Fluor-Old Town, a joint venture composed of Fluor Properties, Inc., and Old Town Development Corp. Fluor-Old Town was the only developer that submitted a proposal on the adopted redevelopment plan. It, as did both of its competitors, submitted a proposal on the alternate plan and it also submitted an expanded plan of its own as a guide to project improvement. It is alleged that Fluor-Old Town's proposals for both the adopted and alternate plan qualified under all the terms and conditions of the Developer's Packet; that its proposal under the adopted plan was the only qualified proposal; and that it objected to the submission of proposals for redevelopment based on the alternate plan as being contrary to law.

Following the receipt of the proposals the agency appointed a panel of experts to review the qualifications of prospective developers and study and render advice concerning the three proposals of developers to purchase and build upon the land offered in the project area. Faustman was listed as a panel member and served as such. ³ The review panel of experts rendered its advice at a public hearing of the agency on June 8, 1964. The agency merely received the report of the experts but did not discuss it on that date.

On June 10th, at a joint public study session of the City Council of Monterey and the agency, the chairman of the agency stated, in effect, that further discussion relative to the merits of the three developers was made unnecessary by prior telephone contact by the chairman with other members which resulted in a decision to accept the proposal of Custom House Associates as the only qualified proposal. It is alleged that between June 8 and 10, 1964, the agency and its members held a meeting, or meetings, relating to the matters awaiting decision in violation of the Brown Act.

On June 12, 1964, the agency refused to make a finding, consider or take action on the alleged conflict of interest pertaining to Faustman as disclosed from the official records of the agency then under consideration. On that day, allegedly without any public discussion of qualifications, the agency adopted its resolution No. 227 in which it determined that the proposal of Custom House Associates was the only qualified proposal. The resolution authorized the secretary to notify Fluor-Old Town and the other developer that their respective...