Del Oro Hills v. City of Oceanside, D017139

• Decision Date: 23 January 1995
• Docket Number: No. D017139,D017139
• Citation: 37 Cal.Rptr.2d 677,31 Cal.App.4th 1060
• Court: California Court of Appeals Court of Appeals
• Parties: DEL ORO HILLS, Plaintiff and Appellant, v. CITY OF OCEANSIDE, Defendant and Respondent.

Page 677

37 Cal.Rptr.2d 677

31 Cal.App.4th 1060

DEL ORO HILLS, Plaintiff and Appellant, v. CITY OF OCEANSIDE, Defendant and Respondent.

No. D017139.

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

Jan. 23, 1995.

Review Denied April 20, 1995.

Worley, Schwartz, Garfield & Rice and Donald R. Worley, San Diego, for plaintiff and appellant.

Myers, Widder & Gibson, Ventura, Freilich, Stone, Leitner & Carlisle, Katherine E. Stone, Los Angeles, J. Roger Myers, Ventura

and Brown, Diven & Hentschke, Brown, Harper, Burns & Hentschke, San Diego, Daniel S. Hentschke, City Atty., for defendant and respondent.

Christi Hogan, City Atty. (Malibu) as amicus curiae.

HUFFMAN, Acting Presiding Judge.

The initial questions posed by this appeal as to the validity of a residential growth control initiative, Chapter 32A of the City of Oceanside Municipal Code, commonly known as Proposition A (Prop. A), adopted by the voters of the respondent City of Oceanside (the City), were answered by this court in our opinion filed July 19, 1994 in Building Industry Assn. (also referred to as BIA) v. City of Oceanside (1994) 27 Cal.App.4th 744, 33 Cal.Rptr.2d 137 (hereafter Building Industry II or the BIA opinion). In the BIA matter, with which this case was consolidated, the City obtained judgment in its favor in a three-phase court trial on BIA's complaint as to the validity of Prop. A. We reversed that judgment because under the standards set by Lesher Communications, Inc. v. City of Walnut Creek (1990) 52 Cal.3d 531, 277 Cal.Rptr. 1, 802 P.2d 317 (Lesher ), Prop. A is facially and as applied in conflict with the City's general plan and with state planning and zoning law. (Gov.Code, § 65000 et seq.) ¹ We thus found that initiative measure invalid from its adoption date.

This appeal by Del Oro Hills, a partnership (Del Oro), of summary adjudication and judgment entered against it in its companion and consolidated action against the City, raises additional questions as to the viability of its claims for damages in light of the constitutional prohibition against governmental regulatory takings without just compensation. Del Oro also claimed breach of an implied-in-fact agreement with the City not to interfere with the timing of its development, violation of its vested rights to proceed with development, and denial of equal protection of the law due to the City's exemption from Prop. A of an allegedly similarly situated developer.

Although we found in our BIA opinion that Prop. A could not stand because it was in conflict with the City's general plan and statutory provisions, we do not find that conclusion mandates a finding here that Prop. A also violates constitutional rights so as to constitute a per se taking of private property. Instead, we conclude that Del Oro has failed to show Prop. A promotes no legitimate state purpose and would thus be facially invalid under takings standards. In addition, Del Oro has failed to show any valid "as-applied" challenge to Prop. A because it did not exhaust administrative remedies to obtain a final determination on a specific development plan. The other issues raised by Del Oro (equal protection violations and impairment of implied contract or vested rights) are also unmeritorious. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Because Del Oro's action was consolidated with the BIA action for trial of the issues on the validity of Prop. A, an understanding of the BIA proceedings is necessary for an analysis of Del Oro's contentions on this appeal. We therefore quote from our BIA opinion, which in turn quotes from a prior opinion of this court (Building Industry Assn. v. Superior Court (1989) 211 Cal.App.3d 277, 259 Cal.Rptr. 325 [hereafter Building Industry I or the prior opinion] ), which arose out of our review of an order denying cross-summary judgment/adjudication motions in the BIA matter:

1. History of Prop. A

"Our [Building Industry I ] opinion contains the following summary of the adoption and content of Prop. A, alternatively referred to as Chapter 32A:

" 'Ch. 32A, adopted by the Oceanside electorate in April 1987, declares one of its purposes is "to augment the policies of the City as recorded in the General Plan and City ordinances relating to the regulation of residential development," and "[i]n order to accomplish this purpose, the City must be able to control the rate, distribution, quality and economic level of proposed development on a year to year basis."

Ch. 32A adopts a "Residential Development Control System" (RDCS) which, with what may be significant exceptions, adopts a maximum number of dwelling units to be constructed each year, called annual allotments. The allotments are 1,000 for 1987 and 800 for each year thereafter until December 31, 1999, with power granted to the City Council to modify the annual allotment by an amount no greater than 10 percent more or less for any given year and a requirement the annual allotment for a next succeeding year be adjusted higher or lower in order to redress any excess or deficit in the preceding year. Excepted from the RDCS are the following: "(a) Projects of not more than four residential dwellings, limited to only one such project per developer per calendar year.

" ' "(b) Fourplexes or less numbered multiple dwellings on a single existing lot.

" ' "(c) Single family residential units on a single existing lot.

" ' "(d) Rehabilitation or remodeling of an existing dwelling, or conversion of apartments to condominiums, so long as no additional dwelling units are created.

" ' "(e) Units within the legally designated redevelopment project area.

" ' "(f) Those specific Units which are formally dedicated for occupancy by low income persons or senior citizens pursuant to the provisions of applicable federal, state, or local laws or programs provided these types of units are spread equitably throughout the city and not concentrated in one neighborhood. For the purposes of this section, a project is funded or subsidized pursuant to applicable federal, state or local laws or programs if it receives a loan, grant or continuing financial subsidy for the purpose of developing low-income or senior citizen housing units. This section does not exempt low income or senior citizen projects built with density bonuses or other development considerations under any program.

" ' "(g) Single family dwelling unit projects with lots an average of which are 10,000 square feet or better, which can achieve a minimum of 70% or better, of the maximum awardable points using the Residential Development Evaluation System are exempt."

" 'Ch. 32A, in addition, provides for application, evaluation and award of development allotments which must be granted before a building permit may be issued.' (Building Industry [I], supra, 211 Cal.App.3d at pp. 285-286 .)

"Under Prop. A, projects are reviewed by a 'Residential Development Evaluation Board' (the Board) made up of members of the City's planning commission, who evaluate proposed projects for their impact upon public facilities and services (the 'A' criteria) and site and architectural quality (the 'B' criteria). A project which does not receive a score of 51 percent on the 'A' criteria and 70 percent on the 'B' criteria is eliminated from consideration for an annual allocation. The Board's recommendations are forwarded to the City Council, which makes the annual allocations." (Building Industry II, supra, 27 Cal.App.4th at pp. 749-750, 33 Cal.Rptr.2d 137, fn. omitted.)

2. BIA and Del Oro File their Actions

"Shortly after Prop. A was adopted, BIA and 10 developers [including Del Oro] sued the City under several theories contending Prop. A was invalid on its face, seeking declaratory and injunctive relief.[ ²] After the trial court denied cross-motions for summary judgment and summary adjudication, its order was upheld by this court in our prior opinion. We concluded that invalidity of a growth control ordinance 'can be established only by determining facts bearing on whether the enactment truly conflicts with state law and its purposes.' (Building Industry [I ], supra, 211 Cal.App.3d at p. 290 .) We stated that whether the regional housing needs as established by SANDAG will be met by the City was a question of material fact that awaited proof. 3. Consolidated Trial Proceedings

(Id. at p. 293 [259 Cal.Rptr. 325].) We explained that some factual determinations by the trial court would of necessity have to be projections of the reasonable probability of accommodating regional housing requirements in future housing periods. (Id. at p. 294 [259 Cal.Rptr. 325].) We were unable to establish the validity of any of BIA's various asserted conflicts between Prop. A and state law 'without reference to established facts.' (Ibid.) We further found that there was present no clear invalidity of Prop. A due to inconsistency with the City's general plan, on the basis that 'factual determinations need to be made before the question of inconsistency can be resolved.' (Id. at p. 297 [259 Cal.Rptr. 325].)" (Building Industry II, supra, 27 Cal.App.4th at pp. 752-753, 33 Cal.Rptr.2d 137, original fns. omitted.)

In accordance with the prior opinion, the trial court scheduled trial of the BIA lawsuit, and consolidated Del Oro issues, in three phases. Phase I addressed the issues raised by Evidence Code section 669.5, subdivision (a), as to whether the City had successfully rebutted the statutory presumption that Prop. A was "presumed to have an impact on the supply of residential units available in an area which includes territory outside the jurisdiction of the city, ..." (Evid.Code, § 669.5, subd. (a).) ³ In phase II of the trial, under Evidence Code section 669.5, subdivision (b), the City had the burden of proof to show that Prop. A was "necessary for the protection of the public health, safety, or welfare of the population of the [C]ity, ..." (Ibid.) The court set forth as the appropriate "balancing test" for phase...