Opinion
E052423 Super.Ct.No. RIC442443
01-13-2012
RIDGE PROPERTIES, LLC, Cross-complainant and Appellant, v. COUNTY OF RIVERSIDE FLOOD CONTROL AND WATER CONSERVATION DISTRICT, Cross-defendant and Respondent.
Timken Johnson Hwang, Heidi A. Timken, Elizabeth K. Hwang and Abram P. Peterson for Cross-complainant and Appellant. Arias & Lockwood and Christopher D. Lockwood for Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from the Superior Court of Riverside County. Bernard Schwartz, Judge. Affirmed.
Timken Johnson Hwang, Heidi A. Timken, Elizabeth K. Hwang and Abram P. Peterson for Cross-complainant and Appellant.
Arias & Lockwood and Christopher D. Lockwood for Cross-defendant and Respondent.
Ridge Properties, LLC (Ridge) appeals a judgment entered after the trial court sustained, without leave to amend, the demurrer of the County of Riverside Flood Control and Water Conservation District (the flood control district). Ridge contends that its cross-complaint stated a cause of action for inverse condemnation which was not time-barred, as the flood control district argues. We conclude that the cross-complaint does not state a cause of action for inverse condemnation.
The flood control district contends that the inverse condemnation claim is barred by Government Code section 66499.37, which provides: "Any action or proceeding to attack, review, set aside, void, or annul the decision of an advisory agency, appeal board, or legislative body concerning a subdivision, or of any of the proceedings, acts, or determinations taken, done, or made prior to the decision, or to determine the reasonableness, legality, or validity of any condition attached thereto, including, but not limited to, the approval of a tentative map or final map, shall not be maintained by any person unless the action or proceeding is commenced and service of summons effected within 90 days after the date of the decision. Thereafter all persons are barred from any action or proceeding or any defense of invalidity or unreasonableness of the decision or of the proceedings, acts, or determinations. The proceeding shall take precedence over all matters of the calendar of the court except criminal, probate, eminent domain, forcible entry, and unlawful detainer proceedings."
Because we conclude that the cross-complaint does not state a claim for inverse condemnation as a matter of law, we need not address the timeliness and waiver issues the flood control district raises.
PROCEDURAL HISTORY
Ridge was sued by Paulus Engineering, Inc., apparently for breach of contract in connection with a storm drainage system Ridge was required to build in connection with its development of an industrial and business park in western Riverside County. Ridge filed a cross-complaint and first, second and third amended cross-complaints against the county and other entities. (These pleadings are not contained in the record on appeal.)
On June 18, 2010, Ridge filed a fourth amended cross-complaint which included eight causes of action against Paulus Engineering, Inc., a surety company, the County of Riverside and the County of Riverside Redevelopment Agency (hereafter sometimes referred to as the county and the redevelopment agency). In its ninth cause of action, Ridge sued the flood control district for inverse condemnation, alleging that the flood control district had taken its property for a regional flood control facility without just compensation.
The flood control district informs us that it is a public entity separate from the County of Riverside.
The flood control district filed a demurrer to the ninth cause of action. It contended that the cross-complaint did not state a cause of action for inverse condemnation because construction of the flood control facility was a condition the county had imposed for approval of Ridge's development project and Ridge had failed to object to the condition before constructing the flood control facility. It contended that Ridge's remedy was to file a petition for writ of mandate seeking to invalidate the condition before it constructed the facility, and that Government Code section 66499.37 provides that a petition challenging conditions of approval must be filed and served within 90 days after the date of the decision imposing the condition.
The trial court sustained the demurrer without leave to amend, holding that the fourth amended cross-complaint did not allege an unlawful taking and that Ridge would not be able to state an unlawful taking as a matter of law. Judgment was entered in favor of the flood control district on November 18, 2010. Ridge filed a timely notice of appeal.
Ridge alleged inverse condemnation in its third amended cross-complaint, but did not name the flood control district as a cross-defendant. The demurrer as to the other cross-defendants (i.e., the county and the redevelopment agency) was sustained without leave to amend, but Ridge later obtained leave to file the fourth amended cross-complaint naming the flood control district. The fourth amended cross-complaint also names the county and the redevelopment agency as cross-defendants in the ninth cause of action. Because leave to amend as to those defendants was not granted, however, the current appeal involves only the inverse condemnation action with respect to the flood control district.
FACTS
In reviewing a judgment entered following an order sustaining a demurrer, we accept all properly pleaded facts in the operative complaint as true. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) Because we are addressing only Ridge's claim for inverse condemnation, we will recite only the facts alleged in the fourth amended cross-complaint (hereafter referred to as the cross-complaint) which pertain to that cause of action.
In 1997, Ridge acquired 80 acres of land in an unincorporated area of Riverside County, located east of Interstate 15 and Temescal Canyon Road and south of Weirick Road, in an area known as the "El Cerrito/Temescal Canyon Sub Area of the 1-1986 Redevelopment Project Area." In 1999, Ridge decided to subdivide the parcel into industrial and business lots for an industrial park. In June 2000, during the third phase of development of the property, the county issued conditions of approval for the project. One of the conditions was that Ridge must construct a drainage or flood control facility meeting certain criteria, to protect downstream properties. The drainage facility would accommodate drainage for 1,100 acres of land, including 24 acres owned by Ridge. Thus, the drainage facility would be located mostly off Ridge's property and would primarily benefit other property owners.
Ridge did not immediately accede to the condition imposed. While Ridge was "exploring its options," the county informed Ridge that the area needed a regional drainage facility—i.e., a significantly larger facility than the one required as a condition of approval of Ridge's development project—to benefit the surrounding areas and to fulfill the county's development plans for the area. The county threatened Ridge that if it refused to participate in the construction of the regional drainage system, the county would require construction of a de-silting catch basin which would require dedication of some of Ridge's prime industrial parcels.
Although construction of a regional drainage facility was not a condition of approval of Ridge's development project, Ridge agreed to undertake design and construction of the drainage facility, with the agreement of the county that the county would find a way to reimburse Ridge for a portion of the cost so that Ridge would ultimately pay only its fair share of the construction costs. Ridge felt that it had no other choice.
Ridge and the county entered into reimbursement agreements which provided that Ridge would receive $625,000 in community development block grant funds to defray the cost of construction of the facility, which was budgeted at $1,200,000. An adjoining property owner agreed to contribute $250,000 as its fair share of the cost of the drainage facility. Those funds were also to be used to reimburse Ridge.
The reimbursement agreements with the county specified that the drainage facility that would be limited to approximately 3,080 linear feet and would include underground reinforced concrete pipeline, drainage culverts, two storm laterals and a rip-rap lined open drainage channel. The facility was to be designed to control surface water flows from the Wild Rose Business Park and various developments west of Interstate 15 and channel them into the Temescal Wash. It reiterated that the estimated cost of the drainage facility was $1,200,000, and that Ridge was to pay only its fair share of the cost. Ridge's fair share was to be approximately $325,000, i.e., the difference between the estimated total cost and the amounts to be contributed by the county and the neighboring property owner, totaling $875,000.
Shortly after the reimbursement agreements were executed, the county required that the plans for the storm drainage facility be revised to increase its capacity substantially. At a meeting between Ridge and the county on or about August 26, 2004, the county agreed that if the cost of constructing the expanded drainage facility exceeded the original estimate of $1,200,000, the county would provide additional funding so that Ridge would still contribute only its fair share. Because the additional capacity of the drainage facility would benefit only the county and other property owners, Ridge understood that its fair share would remain $325,000.
Ridge began construction in January 2005. During construction, the county and the flood control district continued to change the scope of the project, increasing its cost. The county "indicated" to Ridge that if Ridge did not comply with the revised plans for the project, the county would not release the building permits for Ridge's buildings located in the Wild Rose Business Park. Ridge paid the increased cost, with the understanding that its ultimate fair share of the increased costs would be proportionate to the benefit Ridge would receive and that the county would reimburse Ridge for amounts it spent beyond its fair share.
By the time the drainage facility was completed, Ridge estimated that the construction costs were at least $3,271,274 and that Ridge would be responsible for paying approximately $2,396,274, or approximately six times the amount it originally agreed to as its fair share of the project. The county issued the final approvals but declined to provide reimbursement for the additional costs Ridge incurred in building the expanded drainage facility.
The flood control district was involved in the planning and design of the drainage facility and participated in the decision to expand the scope of the project after Ridge had committed to it. After the facility was completed, the flood control district took ownership and operated the facility.
LEGAL ANALYSIS
1.
THE DEMURRER WAS PROPERLY SUSTAINED WITHOUT LEAVE TO AMEND
A.
The Cross-complaint Does Not State a Cause of Action for Inverse Condemnation
In reviewing a judgment entered after a demurrer was sustained without leave to amend, an appellate court first reviews the complaint to determine, de novo, whether it alleges facts sufficient to state a cause of action under any legal theory. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 5.) We give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Ibid.)Applying these standards, we conclude that Ridge's cross-complaint fails to state a cause of action for inverse condemnation.
"Inverse condemnation, like eminent domain, „rest[s] on the constitutional requirement that the government must provide just compensation to a property owner when it takes his or her private property for a public use.' [Citation.] Under the California Constitution, „[p]rivate property may be taken or damaged for a public use and only when just compensation . . . has first been paid to, or into court for, the owner.' (Cal. Const., art. I, § 19.)" (City of Los Angeles v. Superior Court (2011) 194 Cal.App.4th 210, 220.) An inverse condemnation action "may be pursued when the state or other public entity improperly has taken private property for public use without following the requisite condemnation procedures—as when the state, in constructing a public project, occupies land that it has not taken by eminent domain, or when the state takes other action that effectively circumvents the constitutional requirement that just compensation be paid before private property is taken for public use." (Customer Co. v. City of Sacramento (1995) 10 Cal.4th 368, 377.) A public use is a use which concerns a whole community as distinguished from a particular individual or number of individuals or which produces a general public benefit. (City of Los Angeles v. Superior Court, supra, at p. 221.)
Although a claim under the Government Claims Act is generally required as prerequisite to filing a lawsuit for any monetary claim against a public entity, inverse condemnation is specifically exempted from that requirement. (Gov. Code, §§ 905, 905.1.)
Here, Ridge has alleged that the flood control district took its property without just compensation when Ridge was required not only to develop the regional drainage facility but also to dedicate to the county the land it stands upon. It has alleged that the county and the flood control district reneged on an agreement that Ridge would be required to pay only its fair share of the cost of building the facility, and that Ridge was left holding the bag, so to speak, for over $2 million. However, Ridge concedes that it agreed to the initial requirement that it build the less extensive flood control facility and that it later acceded, albeit grudgingly, to the county's demands that it build the regional flood control facility, with the agreement that it would be compensated for the cost of doing so. And, the complaint alleges that dedication of the property used for the storm drain facility was part of the county's demand, to which Ridge agreed, in return for compensation. Consequently, the county's ultimate refusal to reimburse Ridge for the costs it incurred is merely a breach of contract; the fact that the flood control district "took" Ridge's property when it took ownership of the storm drain facility does not alter that fact or give rise to a claim for inverse condemnation.
Ridge likens its case to Uniwill v. City of Los Angeles (2004) 124 Cal.App.4th 537 (Uniwill). In that case, the City of Los Angeles imposed certain conditions for approval of the tentative tract map for Uniwill's proposed development. Uniwill accepted the conditions and began construction. After construction was "well underway," the city and Southern California Edison informed Uniwill that the city would not certify that Uniwill had complied with the conditions of the tentative tract map unless Uniwill conveyed to Edison an easement for fiber optic communications cables and completed certain trenching work. The value of the easement was approximately $35,000 to $40,000 and the trenching work would cost approximately $220,000. The city also demanded an easement fee of $79,570. Uniwill complied "under protest" and, after completing the project, sued for inverse condemnation. (Id. at pp. 539-540.) The Court of Appeal held that Uniwill had stated a cause of action for inverse condemnation and reversed the judgment. (Id. at pp. 542-544.)
The principal issue in Uniwill is whether the claim for inverse condemnation was barred by Government Code section 66499.37. The court concluded that because the easement was not a condition of approval of the tentative tract map, section 66499.37 did not apply. (Uniwill, supra, 124 Cal.App.4th at pp. 541-544.) The court also held, however, that the demand for the easement constituted inverse condemnation. (Id. at p. 544.)
In Uniwill, supra, 124 Cal.App.4th 537, the city essentially extorted the easement and trenching without offering to pay for either and extorted a fee of almost $80,000. Here, in contrast, although the county and the flood control district allegedly pressured Ridge to design and build a much larger flood control facility than was required by the initial conditions of approval and to dedicate a larger portion of its property than it would otherwise have been required to do, the county also agreed to reimburse Ridge to the extent that Ridge's expenditures exceeded its fair share of the cost in proportion to the benefit it would derive from the drainage facility, and Ridge agreed to accept that reimbursement. And, as noted above, the dedication of the property upon or under which the storm drain facility stood was part of the agreement. The gravamen of the complaint is therefore not that the county or the flood control district "took" Ridge's property without fair compensation, as in Uniwill. Rather, the gravamen of the complaint is that the county offered compensation, which Ridge accepted, but then refused to pay once the facility was completed.
At oral argument, counsel for Ridge took exception to our use of the word "pressured" and the phrase "albeit grudgingly" to describe its acquiescence to the county and the flood control district's demands and contended that Ridge acted solely out of economic duress. Counsel argued that the complaint could be amended to allege economic duress. We do not doubt that Ridge agreed to build the regional drainage facility only because it was financially necessary for it to complete the project and sell the developed parcels. However, the fact remains that, so far as Ridge has alleged, it did agree to accept the compensation the county offered. And, as we discuss below, although Ridge contends that it could amend the complaint to state a cause of action for economic duress, it has neither set forth the elements of such a claim nor has it stated the facts which constitute those elements. Moreover, it has not demonstrated that it submitted a claim under the Government Claims Act (Gov. Code, § 900 et seq.) in support of such a cause of action. Consequently, it has not met its burden of demonstrating how the complaint could be amended to state a cause of action. (See below.)
Ridge contends that it nevertheless has a valid claim for inverse condemnation against the flood control district because the flood control district ultimately took possession of the flood control facility without offering any compensation to Ridge. It contends that even though it may have had a contract with the county and the redevelopment agency, the flood control district is a separate entity, and it obtained the property and improvements Ridge provided without compensation. Ridge has not, however, provided any argument or authority which persuades us that a claim for inverse condemnation arises when one public entity contracts for infrastructure but fails to pay as agreed, and another public entity ultimately takes control of the infrastructure. It is true that the second public entity has obtained property without compensation, but it was not the action of that entity which caused any damage that the developer suffered; rather, the developer's damages resulted from the contracting agency's breach of contract. Under those circumstances, the developer's recourse is against the contracting public entity, not against the public entity which ultimately took possession of the property.
Accordingly, the trial court did not err in sustaining the demurrer on the ground that Ridge failed to state a cause of action for inverse condemnation.
Ridge filed a motion for judicial notice of the original conditions of approval of its development project. We deny the motion.
B.
Leave to Amend Was Properly Denied
We review a trial court's order sustaining a demurrer without leave to amend for abuse of discretion. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.)
Ridge contends that it should have been allowed the opportunity to amend the cross-complaint to allege "more specifically" the taking of its private property, the resulting damages and the compensation that was due. It contends that it could have alleged other legal theories of liability with respect to the flood control district, such as economic distress, contribution, equitable indemnity and declaratory relief. It points out that the trial court acknowledged that some of the facts Ridge alleged "would support the other causes of action that [Ridge had] alleged," but nevertheless denied leave to amend.
As we read the trial court's comment quoted above, the court was not referring to other causes of action Ridge potentially could have pleaded with respect to the flood control district but rather to the causes of action Ridge had already pleaded against the other entities. Ridge does not cite to any portion of the record in which it specifically laid out the elements of any alternative cause of action and the facts which constitute those elements. Consequently, we cannot say that the trial court abused its discretion in denying leave to amend. (See Dey v. Continental Central Credit (2008) 170 Cal.App.4th 721, 731.) This court can, of course, grant leave to amend upon a proper showing. (Ibid.)However, although in its opening brief Ridge stated generally that the facts it has pleaded are sufficient to constitute causes of action for economic distress, proportionate contribution and declaratory relief, it has not discussed the elements of its proposed causes of action or explained which facts constitute those elements. In addition, Ridge has failed to show that it complied with the Government Claims Act (Gov. Code, § 900, et seq.). That act provides that "'no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with . . . Section 910 . . . until a written claim therefore has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board . . . .' Section 910, in turn, requires that the claim state the 'date, place, and other circumstances of the occurrence or transaction which gave rise to the claim asserted' and provide '[a] general description of the . . . injury, damage or loss incurred so far as it may be known at the time of presentation of the claim.'" (Stockett v. Association of Cal. Water Agencies Joint Powers Ins. Authority (2004) 34 Cal.4th 441, 445, fns. omitted (Stockett);Gov. Code, § 945.4.) The facts underlying each cause of action in the complaint must be "fairly reflected" in the government claim. (Stockett, at p. 447.) Accordingly, in order to demonstrate that it could amend its complaint, Ridge must demonstrate that the facts underlying any of the causes of action it refers to were presented in a timely government claim. Ridge has not done so. Consequently, Ridge has not met its burden to show specifically how it could amend the complaint to state a new cause of action. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.)
DISPOSITION
The judgment is affirmed. The County of Riverside Flood Control and Water Conservation District is awarded costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKinster
J.
We concur:
Ramirez
P.J.
King
J.