Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC498030, Mac R. Fisher, Judge.
Geraci & Lopez, Alan L. Geraci and Stephen F. Lopez for Plaintiffs and Appellants.
Liebold McClendon & Mann, Barbara Zeid Leibold, City Attorney, and David H. Mann for Defendant and Respondent.
OPINION
Codrington, J.
I
INTRODUCTION
Plaintiffs and appellants Delco Hagan and Hagan Investments, Inc. (Hagan) developed eight residences, Chaney Estates, located in Lake Elsinore. The City of Lake Elsinore (City), defendant and respondent, refused to change planning approval from a sewer line extension to a septic system for the properties. Hagan’s second amended complaint (SAC) asserts three causes of action: for federal civil rights violations (42 U.S.C. § 1983) (section 1983); for administrative mandamus (Code Civ. Proc., § 1094.5) and declaratory relief; and for inverse condemnation.
Hagan does not address the second cause of action and we deem any issue regarding it to be waived.
The trial court sustained the City’s third demurrer without leave to amend. Hagan appeals from this order. We agree with the trial court that Hagan failed to exhaust his judicial remedy for administrative mandamus. We affirm the judgment.
II
THE PARTIES’ MOTIONS TO AUGMENT AND FOR JUDICIAL NOTICE
We grant the City’s motion for judicial notice of portions of the Lake Elsinore Code. (Evid. Code, §§ 452, 459.)
We deny Hagan’s motion to augment the record or, in the alternative, motion for judicial notice, as discussed below. The subject documents are transcripts of the planning commission and city council hearings, a planning appeal form, and the planning permits, none of which were part of the trial court record.
We acknowledge that the City does not object to this court receiving and considering the documents proffered by Hagan. Both parties rely in their briefs on information contained in the documents and the parties do not disagree materially about the facts. But, ordinarily we would not consider these materials: “As a general rule, documents not before the trial court cannot be included as a part of the record on appeal.” (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1; Regents of University of California v. Sheily (2004) 122 Cal.App.4th 824, 827, fn. 1.) Additionally, the documents are not subject to judicial notice under Evidence Code sections 451, 452, 453, and 459. Although we deny Hagan’s motion, we did review the documents for the purpose of deciding the motion. Treating them as an offer of proof, we conclude they would not have changed the result in this appeal.
III
FACTUAL AND PROCEDURAL BACKGROUND
We recite the salient facts as set forth in the clerk and reporter’s transcripts and the documents included in the City’s motion.
In April 2005, the City’s planning commission approved the development of Chaney Estates, subject to 58 conditions of approval, including condition No. 11, a sewer line extension. The cost of a sewer line was triple the cost of Hagan’s budget. The City’s “Building Department representatives” told Hagan that a septic plan could replace the sewer extension, “subject to passage of percolation requirements.” Hagan then hired a soil engineer to do testing and submitted revised building permits to the City in July 2006. The building department issued permits for a septic system.
In January 2007, the city manager and the planning director, Rolphe Preisendanz, informed Hagan the building permits for the septic system were a mistake because the sewer extension had never been removed as a condition of planning approval.
On March 6, 2007, the planning commission conducted a public hearing on the sewer system as a condition of approval. Preisendanz explained the septic permits had been issued by mistake. The planning commission voted “3-2 to accept the as-built permitted septic system and to amend the final condition of the original requirement for a sewer extension.”
Hagan continued work on Chaney Estates but the city council, acting through the city attorney, gave notice it would hear an appeal of the planning commission’s decision.
At the hearing on March 27, 2007, the city council received objections to a septic system from the director of the Lake Elsinore Municipal Sewer District. The city council reversed the planning commission decision. To mitigate the damages caused by further delay, Hagan spent $245,000 to remove the septic system and construct the sewer extension.
On September 27, 2007, Hagan presented a governmental claim for damages, which the city rejected on October 23. Hagan filed the initial complaint on April 24, 2008.
The City demurred three times. The City’s ground for the demurrer to the SAC was that Hagan had failed to exercise his judicial remedy for administrative mandamus within the 90-day statute of limitations “to determine the reasonableness, legality, or validity of any condition attached to a variance, conditional use permit, or any other permit.” (Gov. Code, § 65009, subd. (c)(1)(E).) At the hearing, the court sustained the demurrer without leave to amend, ruling that Hagan had failed timely to pursue administrative mandamus under Code of Civil Procedure section 1094.5.
IV
STANDARD OF REVIEW
“On appeal from an order dismissing an action after the sustaining of a demurrer, we independently review the pleading to determine whether the facts alleged state a cause of action under any possible legal theory. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) We give the complaint a reasonable interpretation, ‘treat[ing] the demurrer as admitting all material facts properly pleaded, ’ but do not ‘assume the truth of contentions, deductions or conclusions of law.’ (Aubry, at p. 967; accord, Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) We liberally construe the pleading with a view to substantial justice between the parties. (Code Civ. Proc., § 452; Kotlar v. Hartford Fire Ins. Co. (2000) 83 Cal.App.4th 1116, 1120.)” (Broberg v. The Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912, 919.)
V
DISCUSSION
Hagan admits he did not pursue his judicial remedy under Code of Civil Procedure section 1094.5 but maintains he has viable claims independent of administrative mandamus. All of his arguments include a variation on the theme that the city council could not initiate or pursue an appeal of the planning commission decision to waive the sewer condition.
On this point, we agree with the City that section 17.80.020 of the Lake Elsinore Code expressly allows a member of the city council to appeal a decision of the planning commission. This is not a situation in which the city council “had no authority to hear an appeal in the first place.” (Clark v. Hermosa Beach (1996) 48 Cal.App.4th 1152, 1175, citing Cohan v. City of Thousand Oaks (1994) 30 Cal.App.4th 547, 556-559.) In Cohan, unlike the present case, the municipal code for Thousand Oaks did not allow the city council to appeal. (Cohan, at pp. 556-559.) But the Cohan court recognized an appeal by the city council could be authorized by ordinance. (Id. at p. 559.) Here, Lake Elsinore Code section 17.80.020 permits the city council to appeal. Therefore, we summarily reject Hagan’s arguments that the city council lacked the power or authority to appeal the planning commission’s decision.
A. Section 1983
Hagan’s first cause of action is for violation of federal civil rights. In Clark v. Hermosa Beach, supra, 48 Cal.App.4th at pp. 1177-1187, the appellate court held that no substantive or procedural due process right is accorded to the approval or denial of a development permit. (Las Lomas Land Co., LLC v. City of Los Angeles (2009) 177 Cal.App.4th 837, 852-857.) Las Lomas elaborates: “Typical land use disputes involving alleged procedural irregularities, violations of state law, and unfairness ordinarily do not implicate substantive due process.” (Id. at p. 856, citing Stubblefield Construction Co. v. City of San Bernardino (1995) 32 Cal.App.4th 687, 709-710 & fn. 15 [4th Dist., Div. 2].) As Stubblefield states, the refusal to issue building permits does not ordinarily implicate substantive due process. Even where administrative procedures have been violated, such violations do not ordinarily rise to the level of a constitutional deprivation. (Stubblefield, at pp. 709-710, citing PFZ Properties, Inc. v. Rodriguez (1st Cir. 1991) 928 F.2d 28, 31-32.)
Regarding procedural due process, there is no federally protected property interest in development permits like those issued in the instant case. (Clark v. Hermosa Beach, supra, 48 Cal.App.4th at p. 1183.) If the decisionmaker, like the City, has the right to grant or deny a benefit, it is not a protected property interest subject to a legitimate claim of entitlement. (Las Lomas Land Co., LLC v. City of Los Angeles, supra, 177 Cal.App.4th at p. 857, citing Town of Castle Rock v. Gonzales (2005) 545 U.S. 748, 756.)
Regarding substantive due process, Hagan asserts in his reply brief the City ignores “the arbitrary abuse of power of substantive due process.” But, as the City observes in its respondent’s brief, Hagan “never contended, outside of the hearing procedures themselves, that the City Council’s decision was arbitrary and capricious.” Because Hagan cannot successfully challenge the validity of the appeals process provided in the Lake Elsinore Code, he cannot argue the City violated substantive due process for this reason.
More specifically, Hagan identifies additional purported due process violations, none of which were alleged in the second amended complaint or raised in the demurrer proceedings below. Hagan contends it was a violation of the Brown Act, Government Code section 54954.2, for the city council to proceed with the appeal after he had attempted to withdraw it. Other than that bald assertion, Hagan offers no authority as to why the city council could not proceed to hear the scheduled appeal which Hagan had initiated. Hagan’s arguments about the timeliness of the appeal and the grounds for the appeal are unsupported because the city council’s notice of appeal is not part of the record. Hagan’s other arguments-about standing, conflict of interest, and a “meaningful hearing”- are resolved by our conclusion that the city council could appeal. Finally, Hagan’s protest that the city council did not make findings or adopt a formal resolution was not addressed in the SAC or in the record.
Even if the City’s employees made a mistake in issuing the building permits for the septic system, the subsequent conduct by the planning commission and the city council was not “outrageous or egregious” and did not constitute “‘a true abuse of power.’” (Las Lomas Land Co., LLC v. City of Los Angeles, supra, 177 Cal.App.4th at p. 856, citing Galland v. City of Clovis (2001) 24 Cal.4th 1003, 1032-1033.) We see no basis for finding the City acted irrationally in reinstating the sewer condition based on legitimate considerations of public health and welfare.
B. Exhaustion of Administrative Mandamus
Another barrier to Hagan’s section 1983 claim, and also to his third cause of action for inverse condemnation, is his failure to pursue a remedy for administrative mandamus, also described as collateral estoppel, judicial exhaustion, and issue preclusion: “It is settled that the doctrine of collateral estoppel or issue preclusion is applicable to final decisions of administrative agencies acting in a judicial or quasi-judicial capacity. [Citations.] As we explained in McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, judicial exhaustion ‘may arise when a party initiates and takes to decision an administrative process-whether or not the party was required, as a matter of administrative exhaustion, to even begin the administrative process in the first place. Once a decision has been issued, provided that decision is of a sufficiently judicial character to support collateral estoppel, respect for the administrative decisionmaking process requires that the prospective plaintiff continue that process to completion, including exhausting any available judicial avenues for reversal of adverse findings. [Citation.] Failure to do so will result in any quasi-judicial administrative findings achieving binding, preclusive effect and may bar further relief on the same claims. [Citation.]’ (McDonald, supra, at p. 113.)” (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 867; Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 69-72; Hensler v. City of Glendale (1994) 8 Cal.4th 1, 7, 19; Mola Development Corp. v. City of Seal Beach (1997) 57 Cal.App.4th 405, 410- 412; Briggs v. City of Rolling Hills Estates (1995) 40 Cal.App.4th 637, 645-646.) Both types of claims-section 1983 and inverse condemnation-first require there be a judicial determination reviewing an administrative action.
Hagan acknowledges this well-established rule but argues there is an exception when fairness requirements are not met: “The fairness requirements of Utah Construction are: (1) that the administrative agency act in a judicial capacity, (2) that the agency resolve disputed issues of fact properly before it, and (3) that the parties have an adequate opportunity to litigate.” (Miller v. County of Santa Cruz (9th. Cir. 1994) 39 F.3d 1030, 1033, citing United States v. Utah Construction & Mining Co. (1966) 384 U.S. 394, 422.) Hagan contends it was not fair to force him to seek judicial review of the city council’s decision when the City appealed and ruled on its own appeal. We disagree.
Similar objections that a city council cannot hear its own appeal and the city attorney cannot act objectively for the city council were rejected in BreakZone Billiards v. City of Torrance (2000) 81 Cal.App.4th 1205, 1240-1242. Judicial review by a petition for administrative mandamus (Code Civ. Proc., § 1094.5) is exactly the procedure called for in circumstances like these. Hagan offers no persuasive argument or authority that supports a different conclusion.
C. Futility Exception
Hagan also urges the exhaustion requirement should have been excused because it would have been futile to pursue administrative mandamus and to do so would have caused irreparable harm.
In his SAC, as part of his second cause of action for administrative mandamus and declaratory relief, Hagan alleged he could “either proceed with the Project by heeding to the wrongful order or immediately appeal the ruling by administrative mandamus and waste the project into bankruptcy. The economy was beginning its plummet in the summer of 2007, so [he] made the only real choice he had available, to do whatever he had to do to get the homes to market.
“27. Immediately proceeding with an administrative mandamus would have been futile, i.e., once the damage of abandoning the septic systems and installing the sewer extension was done, asking the court for judicial review and reversal of the illegal ruling became futile.
“28. Pursuit of the administrative remedy would have resulted in irreparable harm and bankruptcy.”
On appeal, Hagan proposes he could have amended his complaint to add more allegations that delaying the project “was economically impractical, in that it would have caused irreparable harm through loss of financing for the entire development, forcing its abandonment and consequent inability of the court in mandamus to afford meaningful relief.”
The cases cited by Hagan involve exhaustion of administrative remedies (People ex rel. DuFauchard (2009) 169 Cal.App.4th 1502, 1512; McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 275), not exhaustion of the remedy of administrative mandamus, a different creature. (Briggs v. City of Rolling Hills Estates, supra, 40 Cal.App.4th at pp. 645-646.)
Instead, the controlling cases on the issue of futility and the failure to exhaust administrative mandamus are McLain Western #1 v. County of San Diego (1983) 146 Cal.App.3d 772 and Rezai v. City of Tustin (1994) 26 Cal.App.4th 443. McLain observed: “There are instances where the decision to proceed with a project has been made, commitments have been made, and costs have been incurred, all of which are in practice irrevocable, but permits will be obtained in phases as the project progresses. Where new law imposes a fee condition on one of the subsequent permits under circumstances where even the time necessary to challenge the legality of the fee by petition for mandamus is economically impractical, there is in reality no opportunity for an election to not obtain the subsequent permit, and the payment of the fee is not truly voluntary. Under such limited circumstances the developer should not be required to adhere to the general rule and should be permitted to pay the fee under protest and sue for refund.” (McLain, at p. 777.)
But Rezai recognized the exception to the rule requiring resort to administrative mandamus should not be applied “where the landowner does not seek the refund of a fee, but seeks damages arising from conditions restricting the development or requiring additional amenities. In the former circumstance, the amount in controversy is fixed and does not vary based upon any decision by the administrative body or construction of the project. But in the latter, the claimed damages are uncertain and become irrevocable when the project is built. Liability for such damages, if the project is built without a decision by way of administrative mandamus and the city has erred, would have the same chilling effect on planning decisions eschewed by the courts in Agins v. City of Tiburon [(1979)] 24 Cal.3d 266 and Air Quality Products. Inc. v. State of California [1979] 96 Cal.App.3d 340.” (Rezai v. City of Tustin, supra, 26 Cal.App.4th at p. 451.)
The present circumstances, in which Hagan seeks damages, do not warrant an exception to the requirement for exhaustion of the judicial remedy of administrative mandamus.
D. Negligence
Hagan’s final contention is that his SAC can be construed as supporting a negligence claim. A negligence claim against the City is barred by governmental tort immunity. (Gov. Code, § 818.8.) Hagan wrongly asserts that governmental immunity does not apply and, without any authority, that administrative mandamus is irrelevant.
Hagan invokes the discussion in Jamgotchian v. Slender (2009) 170 Cal.App.4th 1384, 1396-1397: “‘Because of the special needs of government and public service, the [Government] Claims Act expressly allows public employees to engage in certain acts and omissions free of suit, even when they might otherwise be liable for causing injury or violating individual rights. Among the statutory protections afforded is the immunity for discretionary acts, which leaves public officials free of unseemly judicial interference against them personally when they debate and render those basic policy and personnel decisions entrusted to their independent judgment. [Citations.]’ (Caldwell v. Montoya (1995) 10 Cal.4th 972, 988....) [¶]... [¶]
“Ministerial acts ‘that merely implement a basic policy already formulated’ are not entitled to immunity. (Caldwell, supra, 10 Cal.4th at p. 981.) Immunity only applies ‘to deliberate and considered policy decisions’ involving a conscious balancing of risks and advantages. (Ibid.)”
Jamgotchian actually supports the City. The present case involved a discretionary policy decision about allowing approval for a septic system to replace a sewer system. Governmental immunity applied to Hagan’s claims involving the City’s discretionary approvals. (Morris v. County of Marin (1977) 18 Cal.3d 901, 911-917, citing O’Hagan v. Board of Zoning Adjustment (1974) 38 Cal.App.3d 722, 726, 731.) Administrative mandamus, not a claim for damages, was the proper remedy to challenge the decision of the city council to require a sewer extension. (See O’Hagan, at pp. 730-731.) We acknowledge that O’Hagan directly involved Code of Civil Procedure section 1095, not Code of Civil Procedure section 1094.5, as incorrectly cited by the City. But the principles involving the interplay between administrative mandamus and immunity are the same for both code sections.
V
DISPOSITION
We affirm the judgment. The City, the prevailing party, may recover its costs on appeal.
We concur: King, Acting P.J., Miller, J.