ZACK'S INC. v. CITY of SAUSALITO

• Decision Date: 11 August 2008
• Docket Number: No. A118244,A118723.,A118244
• Citation: 165 Cal.App.4th 1163,81 Cal.Rptr.3d 797
• Court: California Court of Appeals Court of Appeals
• Parties: ZACK'S, INC., Plaintiff and Appellant, v. CITY OF SAUSALITO et al., Defendants and Respondents.

165 Cal.App.4th 1163

81 Cal.Rptr.3d 797

ZACK'S, INC., Plaintiff and Appellant,

v.CITY OF SAUSALITO et al., Defendants and Respondents.

Nos. A118244, A118723.

Court of Appeal, First District, Division 2, California.

Aug. 11, 2008.

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Seiler Epstein Ziegler & Applegate LLP, Douglas Allen Applegate, San Francisco, for Appellant Zack's, Inc.

Lepper & Harrington, Gary M. Lepper, Paul V. Samoni, Walnut Creek, Jennifer Rebecca Beierle, for Respondent City of Sausalito.

Edmund G. Brown Jr., Attorney General, J. Matthew Rodriguez, Sr. Asst. A.G., Alice Busching Reynolds, Deputy A.G, for Respondents The State of California, State Lands Commission and Paul D. Thayer.

Keegin Harrison Schoppert Smith, & Karner LLP, Paul C. Smith, San Rafael, for Respondent Edgewater Yacht Sales.

KLINE, P.J.

The questions this case poses are (1) whether a city can lawfully lease a portion of a dedicated public street to a private party for a commercial purpose, thereby impairing private and public easements therein, where the street is situated on tidelands granted the city by the Legislature and held by it pursuant to the common law public trust relating to tidelands and submerged lands and, if so, (2) whether the power granted the city by the Legislature permits it to vacate or close the leased portion of the street without complying with general statutes applicable to the vacating or closing of public streets.

Appellant, Zack's, Inc. (Zack's), commenced this action against the City of Sausalito (City), the State of California, the California State Lands Commission, Paul D. Thayer, Executive Officer of the State Lands Commission (hereafter collectively the state or state respondents), and Edgewater Yacht Sales (Edgewater), claiming that the storage of boats and equipment by Edgewater on a leased portion of a street upon which Zack's property abuts constitutes a nuisance per se. Zack's complaint also included causes of action to quiet its title to easements of ingress and egress to the street and for an adjudication that a statute transferring title to the tidelands at issue to City pursuant to the public trust does not authorize City to lease a portion of the street for a use that interferes with private and public easements in the street. The cause of action for nuisance is only against City and Edgewater; the two remaining causes of action are against all respondents.

City and state respondents separately moved for summary judgment and Edgewater joined in City's motion. The motions were both granted on the ground that Zack's claims are all barred by applicable statutes of limitation. Judgment in favor of City and state respondents was entered on that basis, as was a subsequent separate judgment in favor of Edgewater.

We shall reverse the judgments.

FACTS AND PROCEEDINGS BELOW

Zack's owns property improved with a large “warehouse style building” at the corner of Locust Street and Humboldt Avenue in the City. The north side of the property abuts on Locust Street, which travels easterly and westerly, and the west side abuts on Humboldt Avenue, which runs northerly and southerly. Approximately halfway between Locust Street and Turney Street, the next parallel street to the south, Humboldt Avenue terminates at the edge of Richardson Bay, a body of water within San Francisco Bay. The south and east sides of Zack's property are bounded and apparently partially submerged by Richardson Bay. In 1979, City leased to Edgewater month to month, a portion of Humboldt Avenue contiguous to Zack's property and to the waters of Richardson Bay that abut the end of the street, for use “only for the storage of boats in the water premises and storage of boats on trailers in the land premises.” ¹

As we later explain, Zack's property and the streets it abuts are on reclaimed tidelands originally held by the state in trust for the public purposes of navigation, commerce, and fishery. In 1957, the Legislature enacted an uncodified statute transferring to City, upon express conditions, the state's right, title, and interest in the submerged land and tideland over and upon which the leased premises are located, and also transferring to City the state's responsibilities as trustee of said lands. (Stats.1957, ch. 791, § 2, pp. 2002-2004 (hereafter the 1957 statute).)

Because Zack's had access to its warehouse from Locust Avenue, Edgewater's leasehold did not significantly interfere with its use of its property until 1999. That year, Zack's commenced efforts to develop the property by converting the warehouse into a restaurant. This effort has allegedly been frustrated by the fact that use of the leasehold for the storage of boats eliminated parking, blocked easy access to Zack's building, and obstructed visibility of the building from City's main thoroughfare, a block away. For these reasons, Zack's claims it was unable to interest prospective operators of its proposed restaurant.

On March 7, 2005, after City had rejected development proposals that would have eliminated Edgewater's boat storage facility, Zack's commenced this action by filing a complaint for nuisance and inverse condemnation. Five months later, Zack's moved for summary adjudication, claiming undisputed material facts entitled it to judgment as a matter of law on its nuisance claim. The ground of the motion was that City had no lawful basis upon which to grant a leasehold in a public street, and obstruction of the street by the leasehold therefore constituted a nuisance per se. City opposed the motion by simultaneously filing a cross-motion for summary judgment or, in the alternative, summary adjudication. Resting on the proposition that “[n]othing which is done or maintained under the express authority of a statute can be deemed a nuisance” (Civ.Code § 3482), City asserted that the 1957 statute provided it “express[ ] authorit[y]” to lease a portion of that tidewater street for commercial use as a boat storage facility. The trial court agreed. Finding that the 1957 statute “necessarily” conferred the requisite authority to lease Humboldt Avenue to a private party for purposes of boat storage, the court concluded that “the reasonable use of the street for this purpose cannot be a nuisance as a matter of law,” and City had a complete defense to the cause of action for nuisance. Accordingly, the court denied Zack's motion for summary adjudication and granted that of City.

Thereafter, on April 11, 2006, the court granted Zack's leave to amend its complaint not only by adding causes of action for quiet title and declaratory relief and to add state respondents as defendants to those causes of action, ² but also by amending its nuisance claim. With respect to the nuisance claim, Zack's proposed to add a paragraph stating that “[w]hether by reason of the proper interpretation of [the 1957 statute] or by virtue of the invalidity of [that statute], the use of Humboldt Avenue for private purposes is not a use specifically authorized by the California Legislature.” City objected to this additional language on the ground that it asserts a claim the court had previously rejected. Agreeing with City that this legal question had been resolved, the court barred Zack's from adding the new language to its nuisance claim. The proposed new language was, however, surplusage, because the remaining portion of the “amended” cause of action for nuisance, which the court allowed, is identical to that of the original cause of action summarily adjudicated in favor of City; both state: “The private commercial use of a public street is a nuisance per se under California Civil Code section 3479” and “ ‘a municipality has no power to authorize the use of streets for a private purpose.’ ”

The court allowed the “amendment” reiterating this “new” nuisance cause of action and those for quiet title and declaratory relief on the ground that “[t]hese new causes of action, for the first time, challenge the manner in which the City of Sausalito exercised its statutory authority to lease to defendant Edgewater Yacht Sales, the right to use the street for boat storage.” The court's ruling and explanation are puzzling.

The only “manner” in which Zack's has ever claimed Edgewater's leasehold constitutes a nuisance per se is that it “unlawfully obstructs the free passage or use, in the customary manner, of any ... street,” and the only lawful basis for the challenged use of Humboldt Avenue that City has ever offered in response to the claim was (and remains) the 1957 statute. Nor do Zack's quiet title and declaratory relief claims relate in any way to the “manner” in which City exercised its leasing authority; the gravamen of both is simply that City lacks statutory authority to lease Humboldt Avenue to a private party. The court's allowance of the amendment therefore cannot be reconciled with its earlier denial of Zack's motion for summary adjudication on the ground that the 1957 statute “necessarily” conferred on City the requisite authority to lease Humboldt Avenue to a private party for purposes of boat storage, and therefore “the reasonable use of the street for this purpose cannot be a nuisance as a matter of law,” and City had a “complete defense” to the cause of action for nuisance.

In November 2006, City and state respondents moved for summary judgment on the ground that the Edgewater leasehold is authorized by the 1957 statute and any rights Zack's may have in Humboldt Avenue are subservient to those of City and have been extinguished by adverse use. Zack's was not entitled to relief under any of its causes of action, the state maintained, because use of Humboldt Avenue for a boat storage facility was authorized under the 1957 statute. On March 1, 2007, the court issued an order granting City's and state respondents' motions for summary judgment on the ground that all of Zack's claims against City “are barred by the statutes of limitation” (citing Code Civ....