Shamrock Development Co. v. City of Concord
| Decision Date | 25 September 1981 |
| Docket Number | 79-4617,Nos. 79-4607,s. 79-4607 |
| Citation | 656 F.2d 1380 |
| Parties | SHAMROCK DEVELOPMENT COMPANY, a California corporation, formerly known as El Dorado Electronics, Plaintiff-Appellee, v. CITY OF CONCORD, a municipal corporation and Redevelopment Agency of the City of Concord, Defendants-Appellants, and Black Corporation, White Corporation, et al., Defendants. SHAMROCK DEVELOPMENT COMPANY, a California corporation, formerly known as El Dorado Electronics, Plaintiff-Appellant, v. CITY OF CONCORD, a municipal corporation, Redevelopment Agency of the City of Concord, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Kenneth C. Scheidig, Asst. City Atty., Concord, Cal., for City of concord.
James M. Berg, Dooley, Anderson, Berg & Pardini, San Francisco, Cal., for Shamrock Development Co.
Appeal from the United States District Court for the Northern District of California.
Before GOODWIN and BOOCHEVER, Circuit Judges, and PALMIERI, * District Judge.
Both parties appeal a judgment awarding damages to Shamrock in an action asserting that the City of Concord improperly had conditioned approval of Shamrock's subdivision upon the dedication by Shamrock of land for city street expansion.
The City contends on appeal that: (1) the district court erred by failing to abstain from hearing this case; (2) Shamrock's request for monetary damages failed to state a cause of action; (3) a contract between Shamrock and the City purporting to settle the dedication question estops Shamrock from obtaining relief in inverse condemnation; (4) error of law infected the jury instructions; and (5) the jury verdict of $43,000 for Parcel D should be set aside because of prejudicial remarks made in the presence of the jury by counsel for Shamrock.
Shamrock contends on appeal that the district court erred by: (1) ordering a remittitur in the amount of damages; (2) denying Shamrock's request for attorney's fees; and (3) failing to award prejudgment interest accruing from the date of taking.
In August 1975 Shamrock Development Company arranged to purchase a 5.7 acre parcel of unimproved land on Willow Pass Road in Concord, California. In order to finance this transaction, Shamrock sold corner lots of this tract to Denny's Restaurants and Collins Foods International, Inc. (Sizzler Steak Houses). The contract with Sizzler Steak Houses provided that Sizzler could cancel the agreement if Shamrock failed to obtain a use permit for a restaurant, and made Shamrock responsible for complying with all conditions of the use permit.
Shamrock obtained the use permit on November 17, 1976. The City conditioned its approval upon the dedication by Shamrock of enough land along Willow Pass Road to widen the road from four to six lanes, and to add a bus stop and right-turn lane. The City had planned to widen Willow Pass Road from four to six lanes since the 1960's, but a 1968 bond issue and an application for federal funds had failed to secure the necessary financing.
Shamrock also needed City approval of a parcel map in order to subdivide its property for sale to the restaurant chains. On January 27, 1977, the City's Minor Subdivision Committee approved Shamrock's parcel map designating as dedicated to the City 19,491 square feet along Willow Pass Road, conditioning its approval upon the dedication and construction by Shamrock of two westbound traffic lanes, a bus stop and a right-turn lane. Shamrock did not challenge the decision during the statutory appeal period, Concord Municipal Code § 4453(C)(4), but on March 21, 1977, upon the suggestion of the Concord City Manager, Shamrock contacted the City Council's Engineering Requirements Committee requesting relief from the "excessive property dedication" conditions.
On April 12, 1977, the City and Shamrock executed a contract drafted by the City Attorney dividing the 19,491 square foot strip along Willow Pass Road into two parcels: Parcel D (7,742.4 square feet for the right-turn lane) and Parcel E (11,748.6 square feet for two westbound lanes). The contract recites that Shamrock dedicates Parcels D and E to the City. The contract provides that the City will compensate Shamrock for the fair market value of Parcel D, but says nothing about compensation for Parcel E. On April 13, 1977, Shamrock recorded the parcel map. The City Council had exercised its option not to accept the areas designated on the map as dedicated to the public. See Cal. Gov't Code § 66477.1. On April 14, 1977, Shamrock recorded its deed to Sizzler.
Shamrock constructed the street improvements required by the contract and opened the new lanes to the public on September 10, 1977. The City and Shamrock subsequently could not agree on the fair market value of Parcel D. Shamrock valued the parcel at $43,000; the City appraised the parcel at $18,970. On February 16, 1978, Shamrock instituted the present action. Shamrock contended that the City's excessive dedication requirements constituted a taking, and that the City was estopped from asserting the dedication of Parcel E under the April 12, 1977 contract because Shamrock had executed the agreement in reliance upon the City's misstatements of its authority to require the dedication of both Parcels D and E.
The jury returned special verdicts adding up to $197,430, representing $43,000 compensation for Parcel D and the balance as an award for that portion of Parcel E excessively exacted by the City, along with "post-condemnation delay" damages. The magistrate who presided at the trial gave Shamrock the choice of a remittitur reducing the award to $105,590 or a new trial on both liability and damages. The district court upheld the remitted verdict under a contract, rather than an inverse condemnation theory, finding an implied agreement by the City to compensate Shamrock for Parcel E. The district court rejected the magistrate's recommended $35,035 award for attorney's fees. Both sides appeal.
A federal court can decide cases only when it has subject matter jurisdiction. Where, as here, the parties fail to discuss jurisdiction, the court must raise the issue sua sponte. Mansfield, Coldwater & Lake Michigan Ry. v. Swan, 111 U.S. 379, 4 S.Ct. 510, 28 L.Ed. 462 (1884). We hold that Shamrock's "taking" claim presented a cognizable federal question permitting the district court to entertain both the federal and pendant state causes of action in this case.
The City contends that Shamrock had no basis for a claim of inverse condemnation either under California law or as a taking forbidden by the Fourteenth Amendment. The City cites Agins v. City of Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980), wherein the Supreme Court affirmed the California Supreme Court's holding that a municipal zoning ordinance did not effect a taking of plaintiff's property. The Agins Court expressly reserved judgment, however, on the California court's conclusion that a landowner could not recover monetary damages as compensation for excessive police power regulation of land. On March 24, 1981, the Supreme Court again left the question "barely open" in San Diego Gas & Electric Co. v. City of San Diego, et al., --- U.S. ----, 101 S.Ct. 1287, 67 L.Ed.2d 551 (1981), dismissing the case on the grounds that the decision of the California Court of Appeals did not constitute a final judgment. Nonetheless, the majority observed that "the federal constitutional aspects of that issue are not to be cast aside lightly." --- U.S. at ----, 101 S.Ct. at 1294. Four Justices dissented, contending that the decision was a final judgment and arguing on the merits that a police power regulation can effect a Fifth Amendment "taking," thereby entitling the landowner to just compensation.
This court has indicated "that a governmental agency acting pursuant to the State's police power must pay just compensation for any taking it effects." Richmond Elks Hall Assn. v. Richmond Redevelopment, 561 F.2d 1327, 1332 (9th Cir. 1977) (dicta). Shamrock's contention that the City's allegedly excessive dedication requirements effected a compensable taking therefore presents a federal question within the subject matter jurisdiction of the district court. For reasons stated later in this opinion, however, the contract of April 12, 1977, makes it unnecessary for us to determine whether this landowner's remedy for allegedly excessive use of police power is limited to declaratory relief or mandamus. 1
The City contends that the district court should have abstained from hearing this case. A federal court ordinarily must decide cases properly before it; therefore, "(a)bstention from the exercise of federal jurisdiction is the exception, not the rule." Colorado River Water Cons. Dist. v. United States, 424 U.S. 800, 813, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976). A federal court may postpone the exercise of federal jurisdiction when "a federal constitutional issue ... might be mooted or presented in a different posture by a state court determination of pertinent state law." Allegheny County v. Mashuda Co., 360 U.S. 185, 189, 79 S.Ct. 1060, 1063, 3 L.Ed.2d 1163 (1959); Railroad Comm'n v. Pullman Co., 312 U.S. 496, 501, 61 S.Ct. 643, 645, 85 L.Ed. 971 (1941). This court will reverse a trial court ruling on abstention, however, only if the ruling constitutes an abuse of discretion. Sederquist v. City of Tiburon, 590 F.2d 278, 281 n.5 (9th Cir. 1978).
In Canton v. Spokane School District # 81, 498 F.2d 840, 845 (9th Cir. 1974), this court interpreted Pullman as requiring abstention if three tests were met:
"(1) The complaint 'touches a sensitive area of social policy upon which the federal courts ought not to enter unless no alternative to its adjudication is open.'
(2) 'Such constitutional adjudication plainly can be avoided if a definitive ruling on the state issue would terminate the controversy.'
(3)...
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