Surfer's Point, LLC v. City of Encinitas

• Decision Date: 20 September 2022
• Docket Number: D079271
• Parties: SURFER'S POINT, LLC, Plaintiff and Appellant, v. CITY OF ENCINITAS et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

SURFER'S POINT, LLC, Plaintiff and Appellant,
v.
CITY OF ENCINITAS et al., Defendants and Respondents.

D079271

California Court of Appeals, Fourth District, First Division

September 20, 2022

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of San Diego County, No. 37-2020- 00039124-CU-WM-NC Timothy M. Casserly, Blaine K. Bowman, Judges. Affirmed as modified.

Smaha Law Group and Kristen Marquis Fritz for Plaintiff and Appellant.

Devaney Pate Morris & Cameron, Jeffery A. Morris and Wendy L. House for Defendants and Respondents.

AARON, J.

Years after the original development permits for its project issued by the City of Encinitas (City) had expired by operation of law, Surfer's Point, LLC (SP), the developer in this case, attempted to resume its development project by applying for modifications to the original permits. The City's

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Planning Commission (PC) denied SP's application for modifications of its original development permits. After the Encinitas City Council (CC) denied SP's appeal of the PC's decision, SP filed a petition for writ of mandate and complaint for declaratory relief in the superior court. The court denied the writ petition to the extent that SP sought an order requiring the City to approve its application, but granted in part SP's request for declaratory relief.

On appeal, SP contends that the trial court erred by denying its request for writ relief, arguing that: (1) substantial evidence does not support the findings that the CC made in support of its denial of SP's appeal of the PC's decision denying its application; (2) equitable estoppel and/or promissory estoppel applied to bar the CC from denying its appeal and instead required that the CC approve SP's application; and (3) SP's modification application was "deemed approved" pursuant to Government Code section 65956, subdivision (b)^[1] (§ 65956(b)) based on the PC's failure to timely approve or disapprove SP's application. We conclude that there is substantial, and undisputed, evidence to support the CC's finding that SP's original development permits had expired by operation of law years before SP attempted to resume the project, and were thus null and void. As a result, SP did not have valid development permits that could be modified. We also conclude that the trial court erred by granting in part SP's request for declaratory relief. We therefore modify the judgment to delete the award of declaratory relief. Accordingly, we affirm the judgment as so modified.

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FACTUAL AND PROCEDURAL BACKGROUND

SP purchased a vacant 1.81-acre property located in the City's coastal zone at the northeast corner of the intersection of Highway 101 and La Costa Avenue (Property) in or about 1999. In 2005, SP filed an application with the City for permits to develop the Property and adjacent property to be leased from the North County Transit District (NCTD), with a 26-unit timeshare/hotel building (Project).^[2] The PC approved a major use permit (MUP), design review permit (DRP), coastal development permit (CDP), and environmental impact report (EIR) for the Project in or about 2005. The PC's approvals were not appealed to the CC. After the City issued its notice of final action on the Project's CDP, the California Coastal Commission (CCC) appealed the City's approval of the CDP for the Project. The CCC later approved the CDP for the Project, but with special conditions addressing its concerns on November 16, 2007. On January 10, 2008, the CCC issued a draft notice of intent to issue the CDP. However, SP's efforts to develop the Project thereafter became dormant and no construction began.

SP resumed its efforts to develop the Project and met with City staff toward that goal in or about 2013. In a September 6, 2013 letter to SP, SP's land use counsel noted, based on information provided by SP, that City staff had apparently advised SP that staff believed the original MUP, DRP, and CDP remained valid, even though the CDP had expired in 2009. SP's counsel further noted that because of the expiration of the CDP, CCC staff had indicated that the Project would have to be reapproved by the City with notice to the public and the CCC before the Project could move forward.

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Because SP apparently planned to proceed to reactivate the Project without further assistance of its counsel, SP's counsel advised SP regarding its two alternatives for proceeding with the Project: (1) seek a substantial conformance finding by City staff; or (2) if City staff found that the revised Project was not in substantial conformance with the original permits, SP would "need to file (i) an application for a coastal development permit issued by the City, and (ii) a major use permit and a design review permit, should the revised conditions of approval necessitate changes to the latter two permits. These will require a [PC] public hearing and, if appealed, a [CC] public hearing."

SP subsequently asked the City's planning department to confirm whether SP's proposed changes to the Project were in substantial conformance with the original permits. In a March 26, 2015 letter to SP, the director of the City's planning department stated his tentative finding that SP's changes to the Project could not be found to be in substantial conformance with the Project, as originally approved, and therefore, the PC would have to approve an application to modify SP's original permits for the Project. SP modified the design of the Project and submitted those changes to the CCC for its approval. In a June 19, 2015 letter to the City's planning department, a CCC analyst stated that the CCC's original approval of the Project had expired on November 16, 2009, which was two years after the date of its issuance, and that SP was therefore required to apply for a new CDP for the Project. The CCC analyst then set forth the special conditions required by the CCC for the original CDP, SP's response to those conditions, and issues that remained to be addressed.

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In July 2017, SP and the NCTD entered into an amended and restated lease agreement, which authorized the City to proceed with the entitlement process for SP's leased property that was part of the Project.

SP filed an application with the City for modification of its original permits for development of the Project on August 29, 2017. In its application, SP stated: "This application is requesting a modification to the conditionally approved project Case No. 00-201 MUP/DR/CDP for a 26 unit timeshare/hotel development on vacant land. The project modification[s] are as a result of the CCC appeal of 2007 and recent project phasing due to NCTD double tracking project. Signage is added to this application." In particular, whereas the original Project was to be completed in a single phase, SP's proposed modifications provided that development of the Project would now be completed in two phases due to NCTD's double tracking project. After reviewing SP's application, City staff sent a letter to SP on December 21, 2017, informing it that its application was incomplete because of certain issues that might require redesign of the Project. After reviewing SP's revisions to the Project, City staff sent a letter to SP on August 20, 2018, informing it that its application was still incomplete. After receiving this letter, SP made further revisions to the Project.

SP submitted revised plans for the Project in April 2019, which City staff apparently deemed complete and submitted to the PC for its consideration. On May 30, the City gave notice of a PC public hearing to be held on June 6 pertaining to its consideration of SP's application. ^[3] In its agenda report, City staff recommended that the PC approve the application.

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The report described SP's application as requesting a major use permit modification (MUPMOD), a design review permit modification (DRPMOD), a coastal development permit (CDP), and a parcel map waiver (PMW) to consolidate three parcels into a single lot for construction of "a 25-unit timeshare hotel in two phases (Phase I with 14 units &Phase II with 11 units) and associated site improvements." At the June 6 hearing, the PC and members of the public discussed various issues related to the Project. At the conclusion of the hearing, the PC "CONTINUED OFF CALENDAR" (per the minutes of the June 6 PC meeting) its hearing on SP's application, apparently to allow SP and City staff to address issues that remained unresolved.

The City gave notice on June 4, 2020 of a PC public hearing to be held on June 18 on SP's application, based on SP's revisions to the Project. In its 995-page agenda report, City staff again recommended that the PC approve the application. In that report, City staff stated that SP's application asked that the PC consider "modifications to a [MUP] and [DRP] as well as the renewal of a [CDP]." SP's application also sought a PMW to consolidate three parcels into a single lot.

At the June 18, 2020 public hearing, the PC denied SP's application based on the following findings set forth in its minutes:

"A.) Expiration of Design Review Permit

"Based on Encinitas Municipal Code [(EMC)] Section 23.08.160 the [PC] finds that [DRP] 002888-2017 is expired as more than two years has [e]lapsed since the effective date of an approval of an application.

"B.) Findings Based Upon [EMC] Section 23.08.080

"The project is inconsistent with the North 101 Corridor Specific Plan Design Recommendations as it relates to the following:

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"[descriptions of items (a) through (k)].

"The above environmental determination and findings are supported by the minutes, maps, and exhibits, and entire record of the hearing, including testimony, public comments, and commission discussion all of which are herein incorporated by reference."

Based on those findings, the PC denied all four permits (i.e., case No. 17-205 MUPMOD/DRMOD/PMW/CDP). On July 6, 2020, SP timely appealed to...