Ventura29 LLC v. City of San Buenaventura

• Decision Date: 04 January 2023
• Docket Number: 2d Civ. B313060
• Parties: VENTURA29 LLC, Plaintiff and Appellant, v. CITY OF SAN BUENAVENTURA, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

VENTURA29 LLC, Plaintiff and Appellant, v. CITY OF SAN BUENAVENTURA, Defendant and Respondent.

2d Civ. No. B313060

California Court of Appeals, Second District, Sixth Division

January 4, 2023

Certified for Publication 1/26/23

Superior Court County of Ventura Super. Ct. No 56-2020-00539754-CU-EI-VTA, Mark S. Borrell, Judge

Price Postel &Parma and Timothy E. Metzinger, Todd A. Amspoker, Cameron Goodman, for Plaintiff and Appellant.

Olivarez Madruga Law and Thomas M. Madruga, Lloyd Pilchen, for Defendant and Respondent.

YEGAN J.

Ventura29, LLC, appeals from the judgment of dismissal entered after the trial court had sustained, without leave to amend, a demurrer to its second amended complaint (complaint). The demurrer was filed by respondent City of San Buenaventura (City).

In 2015 appellant purchased property (the Property) on East Thompson Boulevard in City. The complaint alleged that appellant "is in the process of developing a multi-unit townhome project" on the Property.

The complaint consists of four causes of action. The first cause of action is for inverse condemnation. Appellant claims City's modification of an approved grading plan for the Property "resulted in an unconstitutional taking for which [it] is entitled to just compensation." We conclude appellant forfeited its objections to the modification because it failed to exhaust its administrative remedies.

Appellant contends the complaint states causes of action for private nuisance, trespass, and negligence based on City's dumping of uncertified fill on the Property in 1977. We conclude these causes of action are barred by the statute of limitations. Accordingly, we affirm the judgment of dismissal.

The Complaint

The complaint alleged: "In 2006 the prior owner of the Property, V2V Ventures, Inc. ('V2V') received Tentative Tract Map approval from the City to construct 29 townhouses on the Property." "V2V . . . retained a geotechnical engineering firm, Earth Systems Pacific ('Earth Systems'), to conduct soils test on the Property . . . ." Appellant took title to the Property in 2015. It "is currently in the process of developing a 29-unit townhouse project . . . pursuant to the same City-approved Tentative Tract Map that V2V obtained in 2006."

In 2018 Earth Systems prepared a Geotechnical Engineering Report for appellant. The report is attached as Exhibit A to the complaint. The report noted that extensive uncertified fill was encountered in test trenches excavated on the Property.

City acknowledges that it approved a grading plan submitted by appellant. The complaint alleged, "[T]he Grading Plan states: 'recommendations and conclusions of [Earth Systems' 2018 report], shall be thoroughly complied with.... [T]he mentioned report . . . [is] hereby . . . made a part of this grading plan.'"

As a condition of approving appellant's project, City required it "to construct a pedestrian-only walking path across [an adjoining] City-owned property [("the City Parcel" or "City's Parcel")] in order to connect [appellant's] property with a nearby City park." City acquired its parcel in 1967.

The complaint continued: "After commencing excavation for the project, . . . [appellant] soon discovered . . . that significant amounts of uncertified fill were buried to considerable depths under the entirety of the City [Parcel] where the walking path was to be constructed, as well as under a portion of [appellant's] property." "The buried materials consisted almost exclusively of concrete curb and gutter, concrete street sections, footings, asphalt and rebar, all of which are consistent with waste from public works projects."

Earth Systems proposed "an engineering solution . . . to use geofabric to stabilize the areas with uncertified fill located outside of the Project building pads as well as on the City Parcel where [appellant] was required to install a walking path." The City inspector, Burt Yanez, orally informed appellant that Brad Starr, the City Engineer, had rejected appellant's proposal. Yanez said "that [appellant] must excavate the Property and the entire City Parcel to native bottoms, otherwise the City would revoke all Project grading approvals."^[1] "This requirement far exceeded the extent of grading contemplated or required in the [approved] Grading Plan."

"At no time during or subsequent to this conversation did any City representative inform [appellant] that such a determination to deny [its] grading proposal might have been appealable to the City's Public Works Director pursuant to Municipal Code Section 12.210.030.^[2] [Appellant] had no idea . . . that such a remedy was potentially available. In any event, it would have been infeasible to stop the Project in order to pursue an appeal due to extensive overhead costs, carrying cost and a balloon payment on a construction loan."

Appellant removed "approximately 80 million pounds of uncertified material, the great majority of which [was on] the City Parcel. . . . [It] initially negotiated orally with City representatives for reimbursement or credits, and later submitted a request in writing through [its] counsel. All requests for reimbursement were denied."

Appellant hired a construction forensics firm, Xpera Group (Xpera), to research the uncertified fill. Xpera "concluded that the uncertified fill at issue is waste from City public works projects that was dumped on the City Parcel and the Property by the City in or around 1977 when the topography of the City Parcel changed from a steep drop off to a gradual slope."

"[Appellant's] causes of action . . . did not accrue until [its] discovery of the illegally placed uncertified fill in April 2019." "[Appellant] has incurred, and will continue to incur, in excess of $1,000,000 in additional Project costs related to the excavation of the uncertified fill and other debris, remediation, lost time, overhead, and interest payments to lenders and investors caused by the delay in the Project timeline."

The complaint consists of four causes of action: (1) inverse condemnation, (2) private nuisance, (3) trespass, and (4) negligence. The first cause of action alleged that City's dumping of uncertified fill on the Property and the City Parcel, along with City's requirement that appellant remove the fill, "result[ed] in a taking and damaging of the value of the Property in an amount in excess of $1,000,000." The second through fourth causes of action are based on City's dumping of uncertified fill on the Property and the City Parcel.

The complaint's prayer for relief requests "compensatory special damages" and "general damages."

Demurrer: General Principles and Standard of Review

"A demurrer tests the legal sufficiency of factual allegations in a complaint. [Citation.] A trial court's ruling sustaining a demurrer is erroneous if the facts alleged by the plaintiff state a cause of action under any possible legal theory. [Citations.]" (Lee Newman, M.D., Inc. v. Wells Fargo Bank (2001) 87 Cal.App.4th 73, 78.)

"[W]e apply the de novo standard of review in an appeal following the sustaining of a demurrer . . . ." (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.) "[W]e assume the truth of all facts properly pleaded in the complaint and its exhibits or attachments, as well as those facts that may fairly be implied or inferred from the express allegations. [Citation.] 'We do not, however, assume the truth of contentions, deductions, or conclusions of fact or law.' [Citation.]" (Cobb v. O'Connell (2005) 134 Cal.App.4th 91, 95.)

"The plaintiff has the burden of showing that the facts pleaded are sufficient to establish every element of the cause of action and overcoming all of the legal grounds on which the trial court sustained the demurrer, and if the defendant negates any essential element, we will affirm the order sustaining the demurrer as to the cause of action. [Citation.]" (Martin v. Bridgeport Community Assoc., Inc. (2009) 173 Cal.App.4th 1024, 1031.)

When, as here, "a demurrer has been sustained without leave to amend, unless failure to grant leave to amend was an abuse of discretion, the appellate court must affirm the judgment if it is correct on any theory. [Citations.] If there is a reasonable possibility that the defect in a complaint can be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend. [Citation.] The burden is on the plaintiff . . . to demonstrate the manner in which the complaint might be amended." (Hendy v. Losse (1991) 54 Cal.3d 723, 742.)

Trial Court's Ruling on Cause of Action for Inverse Condemnation

"'To state a cause of action for inverse condemnation, the property owner must show there was an invasion or appropriation (a "taking" or "damaging") [by a public entity] of some valuable property right which the property owner possesses . . . and the invasion or appropriation directly and specially affected the property owner to his injury.'" (City of Los Angeles v Superior Court (2011) 194 Cal.App.4th 210, 221.)

Appellant argues that the complaint states a cause of action for inverse condemnation based on the City Engineer's modification of the grading permit to require the removal of the uncertified fill on the Property and the City Parcel. Appellant asserts: "[Th]e City imposed an illegal development condition . . . ." "This substantial verbal modification completely changed the scope of [appellant's] project as approved by the City, and unquestionably resulted in an unconstitutional taking for which [it] is entitled to just compensation."

The trial court concluded that appellant's cause of action for inverse condemnation was barred because it had not exhausted its administrative and judicial remedies "[Appellant] had a means...