Briggs v. State

As we have concluded that the judgment was based on an error of law, we shall not set forth in detail the trial court’s findings and conclusions.^[1] We trace the factual and procedural history in the light of the evidence relevant to our discussion: Since 1963, Briggs owned the subject property, 35.6 acres of raw, undeveloped land on the coast in Monterey County (County). In October 1972, Briggs obtained building permits from the County for development of three small residential homes on the property. Prior to November 8, 1972, Briggs commenced construction on the property, including commencement of excavations for footings, and placements of concrete foundations. On March 19, 1973, she obtained two new permits for different and much larger houses upon cancellation of the earlier permits. On April 4, 1973, Briggs applied to the County for approval of a “Minor Subdivision” development on the subject property and stated in her application that the property would be used for three single family residences. The County approved Briggs’ application on November 7, 1973.

On April 16, 1973, Briggs filed an application for a development permit with the Central Coast Regional Commission (hereafter Regional Commission) of the State Commission, seeking a development permit for the construction of three single family residences and accessory structures as approved by the County in March 1973; she also filed for an exemption for construction of the three residences.

On June 18, 1973, after a public hearing, the Regional Commission passed a resolution denying Briggs’ application for a permit.^[2]

On August 8, 1973, the State Commission denied Briggs’ application for a permit, for the following reasons, as stated in its staff recommendation: “1. Open Space Use. The parcel is one of two privately-owned coastal areas between Point Lobos and the mouth of the Carmel River. The California Department of Parks and Recreation considers the property desirable as an addition to the Carmel River State Beach property. Although the State Parks Department does not have a definite commitment to purchase the property, there is clearly a need for preserving the Commission’s planning options as to coastal parks in this area. Because of the manner in which the 3 homes would be spaced along the ocean bluff, construction of the homes would foreclose the possibility of acquiring either all the ocean front property or acquiring only portions and allowing the rest to be developed.

“Even if the Commission’s planning process were to determine the acquisition is not desirable, it is too early in the planning process to decide that development should proceed in the manner proposed by applicant. It might be preferable to require clustered development on the portion of the property adjoining an existing subdivision, with the re

“2. Inducement to Development. Although the proposed project consists only of the construction of 3 large homes, the applicant’s claim of exemption states that the total development will have 2 more stages, 1 of which is a subdivision application in operation and the second of which is a planned unit development currently in the si [sic] stage. Once the 3 homes are built, the property will be foreclosed from any significant open space or recreational use along the ocean front, which will in turn on [¿7c] that the property will be committed to further development. The road servicing the three homes runs along almost the entire ocean frontage of the property and together with utility extensions would encourage further development” (italics partially added). Briggs filed no mandate action to challenge the decisions of the State Commission.^[3]

On September 7, 1973, Joseph Bodovitz, executive director of the State Commission, notified Briggs that her appeal on an application for an exemption had been denied because she had not obtained building permits for the projects for which she claimed vested rights prior to the effective date of the act, and the expenditures made were not in reliance on the plans for which building permits had been issued prior to November 8, 1972.

On September 28, 1973, William Penn Mott, Jr., executed and sent a letter to Briggs stating, in part, “in reply to an inquiry from the Coastal Zone Conservation Commission this department [Parks and Recreation] informed the Commission that it does have an interest in acquiring your property in the Carmel area and will take further steps to do so when funds are available for such purpose.” (Italics added.) On October 31, 1973, Lt. Governor Ed Reinecke executed and sent a letter to Briggs stating, in part, that he had been in contact with Mott and that the State of California was very much interested in purchasing the subject property.

On May 9, 1974, after the above meeting, Mott executed and delivered a letter drafted by Briggs’ attorney to Briggs, stating that the Department “intends to acquire, by negotiation or condemnation, fee title to your property above referenced if the pending ballot measure authorizing the issuance of Bonds is passed by the electorate this June, 1974. In the event said bond issuance is approved, the State Park and Recreation will then adopt a resolution authorizing said acquisition, and we will commence appraisal procedures and we will negotiate with you to acquire said property.... As we have previously stated, we have been interested in acquiring this property for many years, but have been unable to do so for the sole reason that funds to acquire the same have been unavailable. If the Bond issue passes, this property will be included for prompt acquisition inasmuch as sufficient funds will then be available when the bonds are marketed” (italics added).

On June 4, 1974, the California electorate passed the bond issue. Thereafter on July 12, 1974, the Department passed a resolution directing, pursuant to the State Beach, Park, Recreational and Historical Facilities Bond Act of 1974, a study of a project involving an addition to the Carmel River State Beach, recommended this project, subject to the procedures of the bond act, and such implementation as necessary by the Director of the Department.

Briggs filed the instant inverse condemnation action on August 2, 1975.

On October 28, 1975, the prescriptive easement investigation as to the Briggs property was concluded. The state could not commence the appraisal phase of the acquisition until after the prescriptive easement investigation was concluded. In December 1975, a contract was signed for an independent appraisal of the subject property. The appraisal was originally scheduled for completion by May 1976, but the appraiser’s trial schedule required an extension; the appraisal was delivered on June 16, 1976.

On August 30, 1976, the Public Works Board authorized the Department of General Services to negotiate for the property and approve an augmentation to the amount previously budgeted because the appraiser’s value was higher than that previously budgeted. On September 27, 1976, the Public Works Board passed a resolution authorizing the acquisition of the subject property. On December 31, 1976, the state filed a direct condemnation action against the property.^[5]

The court found that: After May 1973, the state’s denial of Briggs’ applications and acquisition activitities: 1) caused the property to be unmarketable in the open market in relation to its fair market value, or otherwise, and to have no viable economic use or return in relation to its value, or otherwise; 2) blocked and prevented any higher use or return on the subject property or the proceeds from a fair market sale. The court also found that as a direct and proximate result of the state’s assurances, representations and promises to acquire the subject property from and after May 1974, Briggs ceased further attempts to develop any economic use of her property and incurred substantial economic and financial losses and damages to her property, as well as delay in payment of just compensation, and that the State Commission’s denial

The trial court concluded that on March 27, 1975, the state had accomplished a de facto taking of the Briggs property and that, therefore, she was entitled to receive the fair market value of the property as of that date, damages incurred between the denial of the permit on August 8, 1973, and the taking, on March 27, 1975, and interest from the date of taking. The valuation phase commenced on August 29, 1977, and the jury rendered a verdict of $3.9 million as the fair market value of the property on March 27, 1975. Briggs’ other claims for damages were bifurcated and tried by the court. On March 30, 1978, judgment was entered in favor of Briggs in the sum of $6,429,437, offset by the Department’s previously deposited sum of $1.75 million, or a total of $4,679,437; this amount included the fair market value of the property ($3.9 million), damages of $469,300 for the 19-month period (Aug. 1973-Mar. 1975) and over $1 million in prejudgment interest. Briggs also recovered litigation expenses of $957,002, including attorney fees in the amount of $751,500. This appeal and Briggs’ cross-appeal ensued.

As indicated above, the trial court found and concluded that as a result of the State Commission’s denial of Briggs’ application for a permit as a result of the Department’s interest in, and intent to acquire, the property, the Department was liable to Briggs in inverse condemnation. The court’s findings and conclusions are contrary to State of California v. Superior Court (Veta) 12 Cal.3d 237 [ 115 Cal.Rptr. 497 , 524 P.2d 1281 ], and its progeny. In Veta, our Supreme Court considered a claim of inverse condemnation based on the denial of a permit application by the State Commission under the 1972 act^[6] and the allegation that the permit was denied in order that the affected property would “‘remain undeveloped and devoted to, and held for, public use as open space land’” (p. 252). The court, at page 253, rejected the claim that such a denial amounted to a constitutional “damaging” of property, on the ground that the coastal act was only an interim measure

Recently, in Agins v. City of Tiburón, 24 Cal. 3d 266 , at pages 272-273, [ 157 Cal.Rptr. 372 , 598, P.2d 25], our Supreme Court discussed the reasons underlying its ruling in Veta, supra, and rejected a constitutional argument similar to that made by Briggs here. In doing so, our Supreme Court said, at page 272: “Plaintiffs contend that the limitations on the use of their land imposed by the ordinance constitute an unconstitutional ‘taking of [plaintiffs’] property without payment of just compensation’ for which an action in inverse condemnation will lie. Inherent in the contention is the argument that a local entity’s exercise of its police power which, in a given case, may exceed constitutional limits is equivalent to the lawful taking of property by eminent domain thereby necessitating the payment of compensation. We are unable to accept this argument believing the preferable view to be that, while such governmental action is invalid because of its excess, remedy by way of damages in eminent domain is not thereby made available. This conclusion is supported by a leading authority (1 Nichols, Eminent Domain (3d rev. ed. 1976) Nature and Origin of Power, § 1.42 (1), pp. 1-116 through 1-121). . ..”

The court (at p. 273) also reiterated that the proper and sole remedy is administrative mandamus. As indicated above, Briggs failed to pur

“If a governmental entity and its responsible officials were held subject to a claim for inverse condemnation merely because a parcel of land was designated for potential public use on one of these several authorized plans, the process of community planning would either grind to a halt, or deteriorate to publication of vacuous generalizations regarding the future use of land. We indulge in no hyperbole to suggest that if every landowner whose property might be affected at some vague and distant future time by any of these legislatively permissible plans was entitled to bring an action in declaratory relief to obtain a judicial declaration as to the validity and potential effect of the plan upon his land, the courts of this state would be inundated with futile litigation. It is clear, under all the circumstances, that plaintiff has not stated a cause of action against the county defendants for either declaratory relief or inverse condemnation.”

The trial court’s finding that the State Commission’s designation of the Briggs property for acquisition merely confirmed the state’s preexisting intent^[8] to acquire the property contravenes the above quoted portion of Selby. Nor can the Department’s indication of its interest in the Briggs property be equated with the “intent to condemn” that under unusual circumstances could constitute a de facto taking under Klopping, supra.

Government Code section 15853 provides, so far as pertinent that “(b) Where moneys are appropriated. . . such moneys shall be expended in accordance with the provisions of this part, notwithstanding any other provisions of law.” This provision clearly contemplates Public Works Board determination of the desirability of purchase, even after an appropriation is made. Thus, Government Code section 15860 explicitly states, so far as pertinent, that “Any appropriation for the acquisition of real property pursuant to this part may be expended for the payment of all costs and expenses, including ... the fees and expenses of appraisers .. . necessarily incurred in the examination, and the determination of the suitability of any real property to be acquired or under consideration for acquisition...” (italics added). Thus, as a matter of law, at all times here pertinent, no action by the Department alone could give rise to inverse condemnation liability.

Further, the trial court here made no findings concerning unreasonable precondemnation activity. Such findings are necessary before liability can be imposed on the basis of Klopping, supra, 8 Cal.3d 39