Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. CIVVS703503 Steve Malone, Judge.
Law Office of Matthew R. Seifen and Matthew R. Seifen for Plaintiff and Appellant.
Rutan & Tucker, Todd O. Litfin and Terence J. Gallagher for Defendant and Respondent.
OPINION
McKINSTER, Acting P. J.
Plaintiff and appellant Leigh Investments, LLC appeals after the trial court granted judgment on the pleadings in favor of defendant and respondent City of Adelanto (the City). Plaintiff filed an action against the City for inverse condemnation, asserting that the City’s decision denying plaintiff’s request to approve its location and development plan effected a taking of the property; plaintiff was completely unable to use the property for any purpose as long as the existing building remained in place. The City argued that plaintiff filed its action untimely, as Government Code section 65009 provides a 90-day statute of limitations on actions seeking review of planning decisions. Plaintiff opposed, contending that it was not seeking review of the planning decision, as such, but rather its cause of action sounded in inverse condemnation. The trial court determined that the triggering event and the primary right sued upon was the denial of plaintiff’s proposed location and development plan. Thus, it agreed that plaintiff’s action was untimely, and granted judgment on the pleadings. We affirm the trial court judgment.
All further statutory references are to the Government Code unless otherwise indicated.
FACTS AND PROCEDURAL HISTORY
Some time in 2005, plaintiff was investigating the purchase of a commercial property within the City. During the search, plaintiff became interested in the subject property. In September 2005, defendant First American Title Insurance Corporation (First American) provided a preliminary title report on the property, indicating only that there was an existing right of way “‘for ditches and canals as reserved by the United States of America.’” In approximately April 2006, plaintiff entered into an agreement to purchase the subject property. There was a structure existing on the property; in the past, the structure had been used variously as a single family residence, a church, and a real estate office. In June 2006, consistent with the preliminary title report, First American reported only the ditch and canal right of way against the title. Plaintiff decided to go ahead with the purchase.
After plaintiff bought the property, it spent approximately $30,000 in repairs; plaintiff intended to renovate the property and use it for commercial purposes. In September 2006, plaintiff obtained a permit for roofing, and repaired the roof of the structure. Because the property had sat vacant for over six months, the City’s planning regulations required plaintiff to submit for approval a location and development plan, before making any use of the property. Accordingly, in December 2006, plaintiff submitted its first location and development plan to the City for the first plan check. According to plaintiff, in January 2007, the City “provid[ed] an initial impression of approval” of plaintiff’s proposed plan, and requested additional fees and complete plans. Plaintiff duly submitted its complete plans and applications in late January 2007. The City allegedly “continued to provide the impression” that plaintiff’s location and development plan would be approved, in that the City requested more fees and asked that the plan be submitted to the San Bernardino County Fire Department.
In its pleadings, plaintiff appears to use the term, “the Property, ” to refer either to the real estate parcel, or to the existing building or structure on the land. This equivocal usage sometimes results in ambiguity or confusion as to which, specifically, is meant.
Then, on April 25, 2007, the City’s community development department first notified plaintiff that it would be recommending denial of the plan. The City gave its reason that “the structure on the Property ‘is non-conforming [because of] its proximity to the property line.’” The City’s decision was based upon a recorded easement for widening of the street. The City’s regulations required a certain setback from the road, but the existing building extended 22 feet beyond the setback limitation, measuring from the easement for road widening.
The street widening easement was not included in either the preliminary title report or the title insurance policy provided by First American. On May 1, 2007, the City followed through with its noticed recommendation and denied plaintiff’s location and development plan, based on the street widening right-of-way easement. The City’s community development department sent plaintiff a letter on May 3, 2007, notifying plaintiff that the planning commission had denied plaintiff’s proposed location and development plan. On May 30, 2007, the City advised plaintiff that it did not intend to vacate its right-of-way easement.
As a result of the City’s decisions, plaintiff took the view that it was deprived of all use of the property. In June 2007, plaintiff filed a claim with First American on the title insurance. First American denied the claim in September 2007. Also in September 2007, plaintiff filed a claim for damages with the City. The City did not respond to plaintiff’s claim for damages. Plaintiff did not, however, file any appeal with the city council of the planning commission’s decision. Plaintiff alleged that City officials advised it that any appeal would be pointless.
On November 14, 2007, plaintiff filed its complaint in the instant action for inverse condemnation (against the City), breach of contract (against First American), breach of the implied covenant of good faith and fair dealing (against First American), negligence (against First American), and declaratory relief (against First American). Plaintiff filed a first amended complaint alleging essentially the same causes of action.
The City demurred to the first amended complaint, asserting that plaintiff had not exhausted its administrative remedies, and also that the City’s actions did not constitute a taking of plaintiff’s property.
Plaintiff opposed the demurrer, on the ground that it had properly alleged the futility of exhausting administrative remedies, and because it properly stated a cause of action for inverse condemnation; the City’s maintenance of (refusal to waive) its road-widening easement right of way effectively deprived plaintiff of all use of the property (building). The deprivation of all reasonable use of property constitutes a taking for purposes of inverse condemnation. (See, e.g., Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1015, [112 S.Ct. 2886, 120 L.Ed.2d 798].)
The court apparently sustained the demurrer with leave to file a second amended complaint; the second amended complaint was filed June 20, 2008. The City had argued on demurrer to the first amended complaint that plaintiff’s theory of taking was vague, in part because plaintiff had “not alleged... why there is no economically valuable use of the property if the existing setback line would be enforced. Indeed, Plaintiff does not allege what the setback is.” The second amended complaint did allege that Plaintiff’s location and development plan was rejected because of the right-of-way easement and because the building projected 22 feet beyond the setback requirements. Plaintiff added an allegation that, in addition to denying the location and development plan, the City had also at the same time rejected plaintiff’s request for a variance. Thus, plaintiff was unable to do anything with its property because “the structure on the Property sits approximately two (2) feet from the edge of the Right of Way Easement and that the minimum setback in commercial zones is twenty-five (25) feet....”
In July 2008, the City answered the second amended complaint via general denial, and asserted several affirmative defenses. After extensive case management and settlement conferences, and trial preparation, plaintiff filed a third amended complaint in April 2009. The third amended complaint added allegations with respect to First American and the title insurance claims. The City responded with a motion for judgment on the pleadings.
The City’s motion for judgment on the pleadings argued that plaintiff’s action was time-barred by section 65009, which provides a 90-day statute of limitations for review of land use planning permit decisions. Plaintiff argued that a one-year statute of limitations applied for an action for injury to property. (§ 911.2, subd. (a).) In addition, because plaintiff was required first to submit a claim for tort damages to the City, its inverse condemnation cause of action against the City did not accrue until after the City allowed the claim response period to expire.
The trial court was persuaded by the City’s statute of limitations argument and granted the motion for judgment on the pleadings. Plaintiff appeals from the subsequent judgment.
ANALYSIS
I. Standard of Review
“‘The standard of review for a motion for judgment on the pleadings is the same as that for a general demurrer: We treat the pleadings as admitting all of the material facts properly pleaded, but not any contentions, deductions or conclusions of fact or law contained therein. We may also consider matters subject to judicial notice. We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any theory. [Citation.]’ [Citation.]” (Buesa v. City of Los Angeles (2009) 177 Cal.App.4th 1537, 1543.)
As to the matter of which statute of limitations applies, that involves issues of law which we also review independently. (See In re Lowe (2005) 130 Cal.App.4th 1405, 1421-1422.)
II. The Trial Court Properly Granted Judgment on the Pleadings
Section 65009, subdivision (c)(1) provides in part that, “[e]xcept as provided in subdivision (d), no action or proceeding shall be maintained in any of the following cases by any person unless the action or proceeding is commenced and service is made on the legislative body within 90 days after the legislative body’s decision: [¶]... [¶] (E) [t]o attack, review, set aside, void, or annul any decision on the matters listed in Sections 65901 and 65903, or to determine the reasonableness, legality, or validity of any condition attached to a variance, conditional use permit, or any other permit.”
The judgment on the pleadings was granted on the view that the event plaintiff alleged resulted in the claimed “taking” was the City’s decision to deny plaintiff’s proposed location and development plan. That planning decision fell within section 65009 and was thus subject to the 90-day statute of limitations for review of planning permit decisions.
Plaintiff disputes the applicability of section 65009. Plaintiff argues that it did not challenge the planning decision, i.e., the denial of the location and development plan approval. Rather, plaintiff sought compensation for the taking of its property. Plaintiff attempts to assert that the decision to deny approval of the location and development plan was not the only matter affecting plaintiff’s property. That is, plaintiff’s cause of action also purportedly relies on “representations that there are no measures available to accommodate the Property’s non-conformity with [the City’s] land use regulations, the refusal to provide a variance for the Property and the representation that [plaintiff] cannot do anything with the Property.” These “representations” are alleged as significant “events that occurred well after” the decision to disapprove the location and development plan. It is these matters in combination, plaintiff contends, that have deprived it of “substantially all reasonable economic value and/or the use of the Property[, ] as [plaintiff] cannot use the Property in its existing condition and the only manner in which [plaintiff] might be able to use the Property would not be economically viable [because] it would require a tear down of the existing structure on the Property and the construction of an entirely new building....”
Plaintiff urges that its claim is strictly one for inverse condemnation, and is governed by a different statute of limitations, such as the two-year statute of limitations for claims against public entities, under Government Code section 945.6, or the five-year statute for the recovery/loss of real property (Code Civ. Proc., §§ 318, 319), or the three-year statute for damage to private property (Code Civ. Proc., § 338, subd. (j)).
Section 911.2, subdivision (a) requires any claim against a public entity (other than for death, personal injury, injury to personal property or to growing crops) to be presented to the public entity within one year after the cause of action accrues. Plaintiff here did make such a claim for damages on September 18, 2007, within one year after the City denied approval of its location and development plan. A public entity has 45 days to act on any claim for damages; if no action is taken, the claim is deemed denied. Under section 945.6, if written notice of rejection of the claim is provided, the claimant has six months in which to file suit. Otherwise, if no written notice is sent, an action must be commenced “within two years from the accrual of the cause of action.” (§ 945.6, subd. (a)(2).)
The five-year statute of limitations for actions arising out of title to real property (Code Civ. Proc., §§ 318, 319), though applicable to inverse condemnation actions based on a physical taking, does not apply to a regulatory taking claim based on enactment of a zoning ordinance. (Travis v. County of Santa Cruz (2004) 33 Cal.4th 757, 775.)
“‘To determine the statute of limitations which applies to a cause of action it is necessary to identify the nature of the cause of action, i.e., the “gravamen” of the cause of action. [Citations.] “[T]he nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations under our code.” [Citation.]’ [Citations.]” (Marin Healthcare District. v. Sutter Health (2002) 103 Cal.App.4th 861, 874-875.)
Plaintiff has alleged its cause of action against the City in the form of inverse condemnation, a “taking” of its property without payment of fair compensation. But what comprises the “taking”? There are two possibilities: First, the “taking” consists of the conjunction of the roadway expansion right-of-way easement with the setback requirement of 25 feet. The existing building on the property is set back only two feet from the edge of the roadway widening easement, thus encroaching 23 feet into the setback area. Second, the “taking” was alleged loss of all reasonable use of the property occasioned upon the City’s planning decision denying approval of plaintiff’s proposed location and development plan, as well as the purported representations of City officials that plaintiff will be unable to get a variance or secure any other accommodation to use the existing building for any purpose.
As to the first theory, that the easement and the setback requirements combined to effectively deprive the property owner of all reasonable use of the property, those circumstances long preceded plaintiff’s ownership of the property. The road widening right-of-way easement was recorded in 1968, knowingly conveyed by the property owners at the time, via a grant deed. In the second and third amended complaints, plaintiff acknowledged that the previously existing setback requirement for commercial property in the City was 25 feet. Plaintiff acquired the property on June 19, 2006. Presumably, the 25-foot setback requirement preexisted the purchase by many years, but inasmuch as the existing building admittedly was located within two feet of the widened roadway edge reserved by the easement, the existing building would have encroached on virtually any setback area prescribed by city regulations. Given these undisputed facts and circumstances, the “taking, ” occasioned by the inability to comply with both the easement and the setback requirements, occurred, and the cause of action “accrued” years before plaintiff acquired the property.
Generally, a cause of action accrues “‘“when, under the substantive law, the wrongful act is done, ” or the wrongful result occurs, and the consequent “liability arises.” [Citation.] In other words, [accrual] sets the date as the time when the cause of action is complete with all of its elements.’ [Citation.]” (Arcadia Development Co. v. City of Morgan Hill (2008) 169 Cal.App.4th 253, 262.) Here, the roadway widening right of way and the setback ordinance are the elements that plaintiff alleges constitute the “taking” of the property, in the sense of preventing all reasonable and economically feasible use of the property. Thus, the cause of action for inverse condemnation accrued when these regulations affecting the use of the property became operative, i.e., upon recordation of the easement and adoption of the setback regulation. Plaintiff may have been factually unaware of some of the circumstances affecting the property, but that unawareness was attributable to the errors in the title insurance preliminary report and policy. The facts and circumstances were known or knowable upon reasonable investigation, and did not prevent accrual of the cause of action.
The setback regulation was presumably readily ascertainable in the City’s published ordinances or regulations. Likewise, the roadway widening right-of-way easement was duly recorded in the public title records of the county and ascertainable with a reasonable and diligent search. These circumstances forestall any contention that the cause of action for inverse condemnation, based on the theory of property damage (i.e., the three-year statute of limitations pursuant to Code Civ. Proc., § 338), accrued not on the date of the “taking, ” but, rather, “‘when the damage is sufficiently appreciable to a reasonable [person].’ [Citations.]” (Lyles v. State (2007) 153 Cal.App.4th 281, 286.) The statute of limitations begins to run from the time that noticeable damage occurs, and reasonable notice is equated to knowledge. (Oakes v. McCarthy (1968) 267 Cal.App.2d 231, 254-256.) Here, reasonable notice of the conditions constituting the “taking” was available to plaintiff.
However, plaintiff’s pleadings belie any contention that the “taking” consists of the setback ordinance and right-of-way easement in themselves. Rather, plaintiff’s pleadings rely on the City’s denial of planning approval as the effective trigger to the alleged “taking.” Although plaintiff attempts to couple the City’s planning decision with other alleged representations, those representations are ancillary to the original planning department decision to deny approval of plaintiff’s proposed location and development plan. That is, plaintiff points to some things that assertedly happened after the denial of the location and development plan as contributing to or part and parcel of the taking, rather than the plan denial alone. These subsequent matters, however, relate directly to the planning commission’s decision with respect to the location and development plan. For example, plaintiff asserts that the City “advised... that Plaintiff would not be allowed to do anything with the Property” (third amended complaint, ¶ 24), “informed Plaintiff that [the City] did not intend to vacate the Right of Way Easement and confirmed that no variance would be provided for the Property” (third amended complaint, ¶ 26), and made “representations that there are no measures available to accommodate the Property’s non-conformity with [the City’s] land use regulations, [the City] refus[ed] to provide a variance for the Property and [made] representations that Plaintiff cannot do anything with the Property” (third amended complaint, ¶ 33). These alleged statements and representations amount to no more than the City’s reiteration of the planning commission decision to disapprove plaintiff’s location and development plan, and a reassertion of the reasons for the denial. The building on the property sits too close to the right-of-way easement to comply with the setback ordinance. That the City would not provide an “accommodation” or variance simply repeated the initial planning commission’s denial of plaintiff’s request for a variance. The City’s refusal to vacate its easement merely reaffirmed the basis for the initial denial of the location and development plan. Plaintiff’s contention that all of the later “representations” partially constituted or caused the taking is unavailing, as they essentially amounted to statements that the City viewed its planning decision as correct, or refused to alter that planning decision to plaintiff’s benefit. We thus conclude that the gist or gravamen of plaintiff’s cause of action against the City is essentially a challenge to its planning or permit decision, denying approval of plaintiff’s proposed location and development plan.
Indeed, as the third amended complaint alleges, plaintiff cannot use its property unless it obtains an approved location and development plan. This allegation signals that the “ regulatory taking” theory is premised on the planning decision denying approval of the location and development plan.
Paragraph 12 of the third amended complaint states: “Plaintiff is informed and believes that [because] the structure on the Property had sat vacant for more than six (6) months, Plaintiff was required to submit and obtain the approval of a location and development plan prior to any use of the Property and that absent the submission and approval of a location and development plan, Plaintiff could not (and cannot) do anything with the Property.”
A regulatory taking differs from a physical taking or occupation of the property. Here, one of the circumstances affecting the property is the roadway widening right-of-way easement. The City has taken actual title to the easement and owns that right of way over the property. “Because plaintiff relies in part on authority applicable to a taking of property which occurs when a public agency causes a physical invasion of private property, it is important to note that a ‘regulatory’ taking differs. ‘Where the government authorizes a physical occupation of property (or actually takes title), the Takings Clause generally requires compensation. [Citation.] But where the government merely regulates the use of property, compensation is required only if considerations such as the purpose of the regulation or the extent to which it deprives the owner of the economic use of the property suggest that the regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole.’ [Citation.]” (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 9-10 (Hensler).) The easement represents a physical invasion of, or at least an effect, on the title of the property. It is not a “taking” at this point, because either compensation was paid at the time the easement was granted, or the grant was voluntarily made by the previous owner. Plaintiff’s cause of action against the City is wholly predicated on regulatory taking, and not physical invasion or taking title to a portion of the property.
In Hensler, supra, the property owner had filed an action in inverse condemnation. (Hensler, supra, 8 Cal.4th at pp. 7-8.) The municipality in Hensler had adopted an ordinance prohibiting construction on major ridge lines within the city. The ordinance was enacted pursuant to authority granted by the Subdivision Map Act. The property owner sought approval of a construction plan for some 588 units on the property. The plan was approved, but the approval rejected all proposed use of the major ridge lines within the tract. The property owner filed an action for an alleged taking of some 40 percent of the parcel, which could not be developed. The property owner, like plaintiff here, urged that the 90-day statute of limitations for challenges under the Subdivision Map Act or to planning decisions did not apply, because his cause of action was stated as inverse condemnation, not as a challenge to the ordinance (enacted pursuant to the Subdivision Map Act) or to the actions taken on his application for a development permit (§ 65009), the same section at issue here. The California Supreme Court held that, although the property owner had couched his cause of action as one for inverse condemnation, the gravamen of the matter was in fact a challenge to the ordinance, which was subject to the Subdivision Map Act 90-day statute of limitations. (Hensler, supra, 8 Cal.4th at pp. 24-26.) In addition, the property owner was required to exhaust administrative remedies, in order to give the municipality a chance to revise its ordinance or its application so as to avoid a taking. (Id. at pp. 10, 19.) “The gravamen of [the property owner’s] cause of action is therefore a claim that the Glendale ordinance is invalid on its face or as applied because, through the authority of that ordinance and/or regulations enacted under it, the city has taken his property without compensation. [The property owner] cannot transform the action into one which does not challenge the validity of the ordinance, regulations, and administrative actions by acquiescing in the taking, assuming the validity of those actions, and seeking only damages. The election is not his, but the city’s. Under a cause of action such as that stated by the complaint in this case, regardless of the title attached to the cause of action or the remedy sought, the [property owner] must prove that the ordinance and regulations as applied have worked a ‘taking’ of the [owner’s] property and that the [owner] has not been compensated.” (Id. at p. 26.)
Similarly, plaintiff’s cause of action against the City here is a claim that the City’s planning decision, denying its application for a location and development plan, is invalid because it works a taking of its property without compensation. There is no getting around that key allegation. As the City points out, plaintiff’s attempts to expand its claim beyond the denial of its location and development plan are unavailing. Plaintiff asserts that certain representations (that there were no measures to accommodate the non-conformity, that no variance would be provided, and that plaintiff could not “do anything” with its property) can support a claim for inverse condemnation damages arising after the denial of its location and development plan. However, section 65009 is very broad, and covers any “controversy over or arising out of” a land use permit denial. (Hensler, supra, 8 Cal.4th at p. 23.) All the alleged representations related to plaintiff’s ability to redevelop the property as a result of the City’s administrative planning decisions, pursuant to the location and development plan ordinance. Accommodating the non-conformity related to the planning decision denying the location and development plan. Providing a variance related to the planning decision denying the location and development plan. The “representation” that plaintiff would not be able to “do anything” with its property was the direct consequence of the planning decision denying the location and development plan.
The alleged oral statements of individual staff members cannot create liability on the part of the City for damages in inverse condemnation. Oral statements by individuals are not official governmental actions that can effect a regulatory taking. The Takings Clause prohibits the government from taking private property for public use without just compensation. (Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761, 773.) “‘No government, whether state or local, is bound to any extent by an officer’s acts in excess of his [or her] authority.’ [Citation.]” (Burchett v. City of Newport Beach (1995) 33 Cal.App.4th 1472, 1479-1480.) Also, the City has immunity for the acts of its employees: “[a] public entity is not liable for an injury caused by misrepresentation by an employee of the public entity, whether or not such misrepresentation be negligent or intentional.” (§ 818.8; Los Angeles Equestrian Center, Inc. v. City of Los Angeles (1993) 17 Cal.App.4th 432, 449-450.)
When facts and issues related to a land use planning decision overlap with other possible theories of liability, the shorter limitations period will control. (See, e.g., Anthony v. Snyder (2004) 116 Cal.App.4th 643, 655-656 [When a breach of contract claim overlaps with or concerns acts by the city council that could have been challenged under the Subdivision Map Act, then the shorter statute of limitations set forth in section 66499.37 will apply. Accordingly, developers’ attack on the failure to approve their maps, even though pled as a breach of contract, should have been brought within the 90-day period of limitation.].) Plaintiff may not avoid the applicability of section 65009, simply by recasting the cause of action as one for inverse condemnation. (See Anthony, at p. 656; cf. also Blanks v. Shaw (2009) 171 Cal.App.4th 336, 365 [A plaintiff may not avoid necessity of bringing Talent Agencies Act claim before the Labor Commission, by the expedient of recasting the claim as one for unfair competition, and filing suit in court.].)
Thus, the gravamen of plaintiff’s action here was a challenge to the planning decision, and therefore the 90-day statute of section 65009 applied. The public policy underlying section 65009 and the 90-day statute of limitations is to provide certainty to the validity of local public agency planning decisions, and to review any disputes expeditiously. (Ching v. San Francisco Bd. of Permit Appeals (1998) 60 Cal.App.4th 888, 894-896.) Plaintiff argues that this public policy will not be served by enforcing the shorter statute of limitations here, because plaintiff acted reasonably and did not “s[i]t on its hands” after its location and development plan application was denied. If its “inverse condemnation” claim remains unadjudicated (because of the judgment against plaintiff on the pleadings), then the property will sit vacant, which “does not serve anyone’s interests.” The contention is not well taken. The essence of the matter is a planning permit decision, of which plaintiff did not timely seek review.
The 90-day statute of limitations of section 65009 applied. The suit was not timely. This was fatal to the third amended complaint, as to the City. The trial court properly granted judgment on the pleadings in favor of the City.
DISPOSITION
For the reasons stated, the judgment is affirmed. The City is to recover its costs on appeal.
We concur: RICHLI, J., MILLER, J.