Pan Pacific Properties, Inc., v. County of Santa Cruz

• Decision Date: 25 May 1978
• Citation: 146 Cal.Rptr. 428,81 Cal.App.3d 244
• Court: California Court of Appeals Court of Appeals
• Parties: PAN PACIFIC PROPERTIES, INC., Plaintiffs and Appellants, v. COUNTY OF SANTA CRUZ et al., Defendants and Respondents. Civ. 41428.

Page 428

146 Cal.Rptr. 428

81 Cal.App.3d 244

PAN PACIFIC PROPERTIES, INC., Plaintiffs and Appellants, v. COUNTY OF SANTA CRUZ et al., Defendants and Respondents.

Civ. 41428.

Court of Appeal, First District, Division 4, California.

May 25, 1978.

Little, Evans, Zoller, White, Dok, Daiker & Matteoni by Norman E. Matteoni, San Jose, Wyckoff, Parker, Boyle & Pope by Alan P. Delfino, Watsonville, for plaintiffs and appellants.

Clair A. Carlson, County Counsel, James M. Ritchey, Asst. County Counsel, County of Santa Cruz, Santa Cruz, for defendants and respondents.

PAIK, ^* Associate Justice.

Plaintiffs-appellants Pan Pacific Properties, Inc., First National Mortgage Co. of San Jose and Edgar R. Dethlefsen (hereafter appellants) appeal from a judgment of dismissal in Santa Cruz County Superior Court following the trial court's order sustaining the demurrer of defendants-respondents County of Santa Cruz, Board of Supervisors of the County of Santa Cruz and other named individuals (hereafter collectively referred to as "the County"). The order sustained the County's demurrer to appellants' complaint for inverse condemnation and declaratory relief "with prejudice."

Appellants own parcels of land adjacent to Riverside Drive on either side of its intersection with Judd Road near Highway 1 in the County of Santa Cruz. "Subject A," which lies northeast of this intersection, is approximately 1.8 acres in size and owned by appellant Pan Pacific, with appellant First National holding a first deed of trust on the property. "Subject B," which lies southeast of the intersection, consists of approximately .8 acre and is owned by appellant Dethlefsen.

Prior to 1969, the parcels were zoned "A-10," or agricultural. On September 16, 1969, the County Board of Supervisors (hereafter Board) passed resolution No. 1461, rezoning the properties "C-3-D" or "Highway Commercial." In 1972, the Board adopted the Pajaro Valley General Plan for the area. On March 27, 1973, the Board amended the plan to include a Parks and Recreation Open Space (PROS) element, under which the properties were recommended for agricultural land use. On March 30, 1976, after a public hearing, the Board voted to adopt ordinance No. 2268, rezoning the properties "A-1-PD" or agricultural use with a 1-acre minimum building site. The Board made the finding that the new zoning was "consistent with all elements of the Santa Cruz County General Plan." The ordinance became effective on April 30, 1976.

On September 24, 1976, appellants commenced this action in superior court for inverse condemnation and declaratory relief. The complaint alleged that the rezoning of appellants' properties was arbitrary and discriminatory. It further alleged that the rezoning prohibits "any and all beneficial and reasonable use" of appellants' land and therefore constitutes a taking of such land without compensation. In a separate cause of action, appellants contended that the rezoning of their property is unconstitutional and void, contrary to the general plan and void for failure to prepare an Environmental Impact Report prior to the enactment of the ordinance. The complaint prayed for a declaration that appellants' properties had been taken for public use with damage in the sums of $95,000 and $75,000 respectively, or in the alternative for a declaration that the zoning was illegal, unconstitutional and void as applied to appellants' parcels.

The County demurred to the complaint, inter alia, on grounds that the action was barred by various applicable statutes of limitations and that the court lacked subject matter jurisdiction over each cause of action. At the hearing, and in his brief, the County counsel represented that the County has always permitted a single-family dwelling to be constructed on land zoned for agricultural use regardless of whether adjacent land was used for farming purposes.

The court sustained the demurrer "with prejudice," relying in part on the foregoing representation. This appeal ensues.

The essence of appellants' action below was to seek a declaration that the ordinance was arbitrary and discriminatory and therefore invalid as applied to their land; or that if valid, such zoning amounted to a taking of property without just compensation in that it deprived them of all reasonable and beneficial uses of their properties.

Although appellants filed a claim for damages with the County prior to instituting this suit (Gov.Code, § 905 et seq.), appellants sought no variance from the ordinance, nor did they apply to the County for any building or use permits. "A party aggrieved by the application of a statute or ordinance must invoke and exhaust the administrative remedies provided thereby before he may resort to the courts for relief." (Metcalf v. County of Los Angeles (1944) 24 Cal.2d 267, 269, 148 P.2d 645, 646; see Igna v. City of Baldwin Park (1970) 9 Cal.App.3d 909, 88 Cal.Rptr. 581; Mountain View Chamber of Commerce v. City of Mountain View (1978) 77 Cal.App.3d 82, 143 Cal.Rptr. 441; Frisco Land & Mining Co. v. State of California (1977) 74 Cal.App.3d 736, 141 Cal.Rptr. 820.)

In Metcalf, property owners operated a quarry, which had been rezoned for residential and agricultural use. Alleging that their land had no appreciable value except for rock development and rock crushing, they brought an action to enjoin enforcement of the rezoning ordinance as an unconstitutional deprivation of property. (Id., 24 Cal.2d at pp. 268-269, 148 P.2d 645.) The court held that where an ordinance is alleged to be unconstitutional as applied to a particular property, a party cannot maintain an action to attack such ordinance before applying to zoning authorities for a variance or exception under the act. (24 Cal.2d at p. 270, 148 P.2d 645.)

Section 13.04.440 of the Santa Cruz County Code provides that an aggrieved party may apply for a zoning variance with respect to that party's land. Here, appellants failed to take advantage of this review process. Such failure or refusal to exhaust their administrative remedies forecloses any action attacking the validity of the ordinance. (Metcalf, supra; Dunham v. City of Westminster (1962) 202 Cal.App.2d 245, 248-249, 20 Cal.Rptr. 772; California Zoning Practice (Cont.Ed.Bar 1969) § 12.19, p. 519.)

The complaint further alleges that the zoning has deprived appellants of any reasonable beneficial use of the property, thus constituting a "taking" without just compensation in violation of the United States and California Constitutions. (See Eldridge v. City of Palo Alto (1976) 57 Cal.App.3d 613, 624, 129 Cal.Rptr. 575.) By failure to apply for a variance, appellants have in effect deprived the County of an opportunity to correct the alleged constitutional infirmity. As it was noted in Metcalf, since a legislative body cannot foresee all variable conditions under which a given zoning ordinance may not be appropriate due to "constitutional objections or other special considerations" (24 Cal.2d at [81 Cal.App.3d 250] p. 271, 148 P.2d at p. 647, emphasis added), almost every zoning ordinance contains provisions whereby an owner may apply to an administrative body for permission to put his land to a nonconforming use.

Appellants argue that they need not have exhausted their administrative remedies, because the administrative agency's decision is certain to be adverse. (Ogo Associates v. City of Torrance (1974) 37 Cal.App.3d 830, 834, 112 Cal.Rptr. 761; Sneed v. County of Riverside (1963) 218 Cal.App.2d 205, 32 Cal.Rptr. 318; Eldridge, supra, 57 Cal.App.3d at pp. 632-633, 129 Cal.Rptr. 575.) In Sneed, Ogo and Eldridge, it was demonstrated that "the aggrieved party can positively state what the administrative agency's decision in his particular case would be." ¹ (Ogo, supra, 37 Cal.App.3d at p. 834, 112 Cal.Rptr. at p. 763.)

The facts of this case are substantially similar to those in Frisco Land & Mining Co. v. State of California, supra, 74 Cal.App.3d 736, 141 Cal.Rptr. 820. There, a regional commission created under the Coastal Conservation Act of 1972 attempted to place certain conditions upon the issuance of a building permit to a subdivider. The subdivider withdrew his application for a blanket permit and instead instituted an action seeking damages in inverse condemnation and challenging the constitutionality of the act. The Court of Appeal rejected the subdivider's contention that pursuance of his administrative remedies would have been futile: "In fact, however, the coastal commission consistently recognized the right of lot owners, including the subdivider itself, to build homes on the lots in the subdivision, provided that they complied with conditions reasonably related to preserving attributes of the property which the electorate had deemed of importance. There was no reason why the subdivider could not have tested the validity of those conditions through the administrative and judicial proceedings provided by law. We cannot assume that any invalid conditions would have been approved after such review." (74 Cal.App.3d at p. 757, 141 Cal.Rptr. at p. 833.)

Here, the ordinance under which appellants' property was rezoned (Santa Cruz County Code, § 13.04.205.28) listed under "permitted uses": "3. One-family dwelling of the owner or lessee of the land or any employee or an employee of the owner or lessee of the land upon which the use or permitted use is carried on." At the hearing on the demurrer, and in his brief, County counsel stated that the above statute had always been construed by the County to permit single-family residences and this was the very interpretation given to it by the planning commission's staff report which was submitted to the Board prior to the rezoning. Thus, had appellants applied for a variance or sought a use permit, it was not certain that the County's decision would have been adverse to them. From all indications, that decision would have been favorable to appellants, i. e., allowed appellants a...