Russian Hill Imp. Ass'n v. Board of Permit Appeals of City and County of San Francisco

• Decision Date: 24 February 1967
• Docket Number: S.F. 21914
• Citation: 423 P.2d 824,66 Cal.2d 34,56 Cal.Rptr. 672
• Court: California Supreme Court
• Parties: , 423 P.2d 824 RUSSIAN HILL IMPROVEMENT ASSOCIATION et al., Plaintiffs and Respondents, v. BOARD OF PERMIT APPEALS OF the CITY AND COUNTY OF SAN FRANCISCO et al., Defendants and Appellants. In Bank

Page 672

56 Cal.Rptr. 672

66 Cal.2d 34, 423 P.2d 824

RUSSIAN HILL IMPROVEMENT ASSOCIATION et al., Plaintiffs and Respondents, v. BOARD OF PERMIT APPEALS OF the CITY AND COUNTY OF SAN FRANCISCO et al., Defendants and Appellants.

S.F. 21914.

Supreme Court of California,

In Bank.

Feb. 24, 1967.

Rehearing Denied March 22, 1967.

Thomas M. O'Connor, City Atty., Robert A. Kenealey, Deputy City Atty., Pillsbury, Madison & Sutro, John B. Bates, Noble K. Gregory and Thomas E. Feeney, San Francisco, for defendants and appellants.

Heller, Ehrman, White & McAuliffe, Caspar W. Weinberger and M. Laurence Popofsky, San Francisco, for plaintiffs and respondents.

TOBRINER, Justice.

The present controversy involves an attempt by the Board of Permit Appeals to authorize the construction of a building which would rise to over twice the maximum height permitted by the governing ordinances of the City and County of San Francisco.

The trial court granted a writ of mandate directing the board to revoke a permit purporting to authorize such construction. Defendants appeal, contending that the permit in question was 'lawfully granted' within the meaning of section 150 of the City Planning Code of San Francisco ¹ in time to immunize the proposed project from the operation of a newly enacted height limitation. ² Since the permit application was still pending before the Board of Permit Appeals when the new height limitation became effective, we hold that the permit was not 'lawfully granted' in time to confer immunity under section 150, and that the trial court properly ordered the permit revoked.

I

Beginning in 1961, a number of public and private agencies investigated possible height limitations for the northern portion of San Francisco. After holding public hearings in late 1963 and early 1964, the City Planning Commission and the Public Buildings, Lands and City Planning Committee of the Board of Supervisors approved enactment of an ordinance to establish a maximum legal height of 105 feet for buildings constructed in the area involved in this litigation.

On January 22, 1964, HAP Development Company, HAP Development Partnership, and Haas & Haynie Corporation (hereinafter collectively referred to as 'the developers') filed with the Central Permit Bureau (hereinafter referred to as 'the permit bureau') an application for a site permit, seeking permission to construct a 235-foot-high apartment building at the corner of Polk and Greenwich Streets in San Francisco. On February 10, while the permit bureau was still considering the developers' application, the Board of Supervisors enacted the ordinance recommended by the City Planning Commission and by the Public Buildings, Lands and City Planning Committee. By its terms, the height ordinance was to take effect on March 23, 1964. Since the structure which the developers proposed would rise far above the maximum height permitted at that location by the newly-enacted ordinance, the Director of City Planning recommended that the developers' application be denied. Notwithstanding that recommendation, the City Planning Commission voted on March 12 to approve the application.

On March 19, just four days before the effective date of the new height limitation and several weeks after its endorsement by the mayor, ³ the permit bureau entered an order which approved the developers' application and transmitted to them a document described on its face as a 'permit issued subject to appeal within 10 days to Board of Permit Appeals.' The document admonished the developers to incur no expense until the right of appeal had lapsed.

Plaintiff Russian Hill Improvement Association (hereinafter referred to as 'the association') filed a timely but unsuccessful appeal to the Board of Permit Appeals protesting the permit bureau's order; on May 4, the board denied the association's application for a rehearing. ⁴ On the association's petition, the superior court ordered the developers' site permit revoked.

Defendants contest the order of revocation on the theory that the Board of Permit Appeals acted properly in testing the permit application under the law which was in effect when the permit bureau approved that application on March 19. Plaintiffs concede that no law then operative rendered the bureau's action unlawful. ⁵ By the time the matter had reached the Board of Permit Appeals, however, the governing law clearly prohibited the structure described in the developers' application. Since the permit bureau had made no record of the reasons underlying its March 19 order, ⁶ and since that order had been suspended by operation of law, ⁷ the entire controversy necessarily came before the Board of Permit Appeals De novo. Accordingly, the question facing the board was whether the permit should be granted, not whether the suspended order of the permit bureau had been lawful.

Since De novo review by the Board of Permit Appeals is an integral part of the entire permit procedure, ⁸ the board, as an agency entrusted with broadly discretionary power, would ordinarily be bound to apply the zoning ordinances in force at the time of the Final administrative decision, rather than the ordinances in effect at the time of preliminary proceedings before the permit bureau. ⁹

Defendants contend only that section 150, by immunizing outstanding permits from subsequent changes in the zoning ordinances, created an exception to this uniformly recognized principle of administrative law. As defendants interpret the section, it clothes a permit with statutory immunity the moment such a permit is Issued by a lawful order of the permit bureau, notwithstanding any change in the governing law pending De novo review of the permit application by the Board of Permit Appeals. ¹⁰ We have concluded, however, that section 150 requires no such departure from traditional principles of administrative law since that section contemplates only the protection of those permits which have attained finality in the administrative process. ¹¹

II

Prior to the enactment of section 150, even a permit which had achieved administrative finality could be revoked on the basis of a subsequent change in the zoning laws. ¹² The permittee could win immunity from such 'ex post facto' revocation only by constructing a substantial portion of the structure authorized by his permit in good faith reliance upon the prior law. ¹³ A permittee who delayed construction in the face of an impending amendment to the zoning laws might find that he had not progressed far enough in time to qualify for immunity; ¹⁴ one who proceeded with unseemly haste ran the risk that his conduct might bear the stigma of bad faith. ¹⁵ No facile formula informed the permittee how to strike the delicate balance which would afford the desired immunity.

To eliminate the uncertainty and waste inherent in these rules, a number of municipalities enacted ordinances which predicated immunity from permit revocation upon some clearly defined action of a municipal agency. ¹⁶ Under section 150, that action was the 'lawful granting' of a permit.

Nothing in the history of section 150 lends the slightest support to the suggestion that it was designed to protect the mere Hope that a pending permit application would ultimately receive final approval. We have long held that one who is not yet armed with a presently effective municipal license to proceed with construction must assume the risk that, 'before final action (has) been taken on (his) application' (Brougher v. Board of Public Works, supra, 205 Cal. 426, 435, 271 P. 487, 491), the law might be changed so as to require that his application be denied. (See, e.g., Anderson v. City Council (1964) 229 Cal.App.2d 79, 88--90, 40 Cal.Rptr. 41; O'Rourke v. Teeters (1944) 63 Cal.App.2d 349, 352, 146 P.2d 983) Defendants have suggested no reason, historical or otherwise, to suppose that section 150 contemplated a departure from this established rule.

As counsel for the developers acknowledged in oral argument before this court, the central purpose of section 150 is to set a definite date as of which a permittee's rights may be ascertained with certainty. Thus once a permit has been 'lawfully granted' within the meaning of section 150, that section automatically empowers the permittee to complete the approved structure subject only to a requirement of diligent performance. ¹⁷ To con stitute the 'lawful granting' of a permit, an action must therefore confer a fixed right, not subject to divestment pursuant to future legislation. Yet the action of the permit bureau in issuing a permit Cannot in itself confer such a right. Even after a permit has been lawfully issued by the bureau, the Board of Permit Appeals necessarily retains discretionary power to order that the permit be denied because of a pending change in the law. ¹⁸ At most, therefore, the lawful Issuance of a permit by the bureau can confer a Conditional immunity, hardly the kind of shield contemplated by a statute designed to fix the rights of a permittee upon a certain date.

If we were to construe the statute to afford this sort of partial protection for permit applicants in addition to the total protection which it undeniably provides to permits which have become final, we would achieve nothing germane to the purposes of section 150. Such a construction would simply arm the Board of Permit Appeals with discretionary authority to ignore laws which become effective during the pendency of a permit application. The addition of this option to the already broad arsenal of discretionary weapons available to the board would only compound the uncertainty of all interested parties, a result which would subvert rather than subserve the legislative purpose.

III

Without seriously disputing this analysis, defendants advance two independent arguments in support of their interpretation of the section. They suggest first that, unless we adopt their view, we shall encourage repeated petitions for...