Speights v. City of Oceanside, D054122 (Cal. App. 6/18/2009)

• Decision Date: 18 June 2009
• Docket Number: D054122.
• Parties: MATTHEW SPEIGHTS, Plaintiff and Appellant, v. CITY OF OCEANSIDE et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

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MATTHEW SPEIGHTS, Plaintiff and Appellant, v. CITY OF OCEANSIDE et al., Defendants and Respondents.

D054122.

Court of Appeals of California, Fourth Appellate District, Division One.

June 18, 2009.

Not to be Published in Official Reports

Appeal from a judgment of the Superior Court of San Diego County, Super. Ct. No. GIN057318-1, Robert P. Dahlquist, Judge. Affirmed.

O'ROURKE, J.

Matthew Speights appeals from a summary judgment in favor of the City of Oceanside and the Oceanside City Council (collectively City) on his first amended complaint for inverse condemnation. In granting summary judgment, the trial court ruled that Speight's claim was based on a regulatory taking theory and thus he was required to challenge the assertedly offending regulatory conduct by writ of mandamus before or simultaneously with his claim for monetary compensation.

On appeal, Speights advances several arguments presumably intended as a foundation for one overarching theme: that he had a state and federal constitutional "vested" property right to use his property, which right cannot be "regulated away." Speights contends that as to this vested right, he was subjected to both physical and regulatory takings, as well as unreasonable precondemnation conduct and due process violations by City. Speights contends the authority on which the trial court relied in granting summary judgment — Hensler v. City of Glendale (1994) 8 Cal.4th 1 (Hensler) — is an inapposite statute of limitations case and does not compel summary judgment in City's favor. We affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The undisputed material facts are taken from the parties' separate statements filed in connection with City's summary judgment motion and other facts in the light most favorable to Speights as the losing party. (Code Civ. Proc., § 437c, subd. (c); McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 96-97.)¹

In May 2001, Speights received planning commission approval of a development plan on 1.5 acres of property in the City of Oceanside that he had purchased in 2000 for $195,000. Speights's property is adjacent to property owned by the Oceanside Unified School District (the District). The 2001 development plan contained several conditions involving drainage; one required that "[g]rading and drainage facilities shall be designed to adequately accommodate the local storm water runoff and shall be in accordance with the City's Engineers Manual and as directed by the City Engineer." Others required storm drain systems to be designed and installed to the city engineer's satisfaction, and required the final drainage design to be based on a hydrologic/hydraulic study to be approved by the city engineer during final engineering. Another stated: "Storm drain facilities shall be designed and located such that the inside travel lanes on North River Road, downstream of the subject property, be passable during conditions of a 100-year frequency storm." The conditions placed responsibility on Speights to dedicate all storm drain easements where required and obtain any off-site easements for storm drainage facilities.

On April 10, 2002, City approved Speights's precise drainage and grading plans, which required Speights to over excavate the site four to six feet below grade. Speights had advised the District that he would be excavating along their common property line and would leave its property in its original condition. He commenced grading and observed no evidence of drainage from the District property. During that month, Speights posted bonds in the amount of $294,289 and committed to a $2.7 million construction loan, committing to another $736,788 by the end of the month. On April 30, 2002, Speights's construction crew impacted and damaged a subsurface storm water drainage line located on the District's property. After the end of the pipe was uncovered, some of the water began to flow onto the District's and Speights's properties.

Speights promptly notified City of the pipe's discovery, proposed to repair its uncovered end, rebury it and return the property to its former condition. City rejected that proposal and required him to address the problem at his expense before it would issue a certificate of occupancy. In late 2002, Speights hired engineers to prepare a drainage report and plans to resolve the issue. He also hired a surveying firm to prepare an easement in City's favor for the pipeline route through his property. At about this time, Speights was making inquiries with City staff about changing his development plan from apartments to condominiums.

In February 2003, when Speights's project was about 70 percent complete, his engineering company advised him that City wanted him to increase the size of a drain pipe under North River Road. Speights's engineers submitted their plans, but City did not approve them. Speights's additional efforts to obtain City's plan checker's approval were unavailing.

In June 2003, facing foreclosure on his construction loan, Speights installed a drainage line running across a portion of the District's property and his own property, which connected the District's system to his own. He did so without City approval due to its delay in responding to his submittals concerning the drainage issue. At some point during 2003, Speights asked City to allow him to post a bond for the drainage improvements so he could begin renting the units and receiving income to avoid foreclosure. City refused his request.

In February 2004, City issued Speights a temporary certificate of occupancy requiring him in part to redesign, secure and install the storm drain system to the city engineer's satisfaction, base the storm drain's final design on a hydrologic/hydraulic study approved by the city engineer, assume responsibility for obtaining any off-site easements for storm drainage facilities, and make and complete the storm drain improvements between July and August 2004 during the adjacent elementary school's summer break. Despite issuance of the temporary certificate of occupancy, Speights could not rent or refinance the project because City refused to issue approvals to hook up gas meters. Speights agreed to the conditions under pressure due to his financial condition.

In March 2004, City representatives began considering purchasing Speights's property, noting Speights's financial trouble and internally characterizing the matter as a "golden opportunity" to realize an affordable rental project. Speights authorized City to contact his first mortgage lender to discuss the possible acquisition. At some point, City's director of housing, Margery Pierce, called Speights and told him that if he did not take City's offer, it would buy his note and finish foreclosing on him, and he would not get his storm drain approvals. In April 2004, City offered to purchase the property for $4.4 million. Speights rejected the offer. He later refinanced his construction loan with different lenders and used the property (and other properties he owned) as collateral for those loans.

After City's purchase offer, Speights submitted a request for a change in his development plan and a new application to convert his project to condominiums. The planning director rejected the request. In June 2005, he unsuccessfully attempted to appeal the planning director's decision and eventually provided City with a legal opinion from his attorney explaining why he was entitled to change his development plan. In November 2005, City's planning commission adopted a resolution approving a zoning amendment, tentative map, conditional use permit and revision to the property's development plan for condominium conversion. The resolution noted the inadequacy of existing downstream storm drains and acknowledged Speights's proposal to construct new storm drain facilities between the project site and an existing concrete storm drain channel running along the west side of North River Road, approximately 730 feet east of the site.² It also included numerous conditions relating to storm water drainage, including requiring engineering plans be approved by the City's deputy public works director, and requiring storm drain facilities to be "designed and located such that the inside travel lanes on streets with Collector or above design criteria shall be passable during conditions of a 100-year frequency storm."

In January 2006, the City Council adopted a resolution approving a conditional use permit and incorporating all of the planning commission's findings and conditions from its November 2005 resolution. The resolution provides, "NOTICE IS HEREBY GIVEN that the time within which judicial review must be sought on this decision is governed [by] Code of Civil Procedure Section 1094.6."

Speights eventually implemented the drainage solutions outlined in the 2005 development plan, which improvements were constructed entirely on the District's property. However, at some point in 2006, his lender demanded that he assign control of the property to the lender's attorney in lieu of foreclosure. Because the improvements were on the District's property, Speights never dedicated easements on his property to City, though Speights had previously paid professionals to prepare drainage plans and easement documents. The District conveyed an easement to City for the storm water drainage facilities constructed on its property.

In August 2006, Speights filed a complaint against City, the Oceanside City Council, and others, alleging a single cause of action for inverse condemnation. In part, he alleged his property was diminished in value, thereby effecting a taking and/or damaging for public use without payment of just compensation, by City's "unreasonable, oppressive and unlawful" actions, which "coerced [him] into agreeing to convey easements for stormwater drainage lines to City and to pay the costs of designing and installing said lines at exorbitant costs. ....