Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes
191 Cal. App. 4th 435
Cal. Ct. App.2010Background
- Town entered a development agreement with Balias to develop Phase I airport improvements and a hotel/condominium project with a purchase option on a 26-acre parcel adjacent to the airport.
- Developer later acquired Balias’s rights to build the hotel/condominium project and spent substantial funds on airport improvements.
- FAA objected to the hotel/condominium project; the Town sought FAA guidance and funding, and FAA warned of potential funding loss if non-aeronautical uses proceeded.
- Town altered its priorities toward expanded air service; it refused to move forward on the hotel/condominium project absent FAA resolution, despite a contractual obligation to proceed.
- Developer sued for anticipatory breach; the jury awarded $30 million in damages and the trial court awarded $2,361,130 in attorney fees; issues on exhaustion of remedies and contract defenses followed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of contract action vs mandamus | Developer could pursue contract damages; no available administrative remedy. | Recovery was limited to mandamus for quasi-judicial land-use decisions; circuit argues exhaustion. | Contract damages allowed; administrative mandamus not exclusive remedy. |
| Effect of three contract defense clauses | Defenses do not immunize Town from breach. | Clauses individually excuse performance under governmental constraints and FAA compliance. | None of the three clauses immunize Town from breach. |
| Repudiation by Town | Town officials repudiated the contract by insisting on FAA objections before performance. | Town acted in good faith, seeking to interpret and comply with the contract. | Evidence supported repudiation; anticipatory breach established. |
| Damages for anticipatory breach | Lost profits supported by appraisal and investor testimony; damages properly measured. | Damages too speculative; projections unreliable. | Damages of $30 million sustained; not too speculative. |
| Attorney fees | Prevailing-party entitlement justifies fee award. | Fee award should reverse if judgment reversed. | Attorney fees award affirmed along with judgment. |
Key Cases Cited
- Avco Community Developers, Inc. v. South Coast Regional Comm., 17 Cal.3d 785 (Cal. 1976) (vested rights and development agreements context)
- Tahoe Vista Concerned Citizens v. County of Placer, 81 Cal.App.4th 577 (Cal. App. 2000) (exhaustion not required when remedies unavailable)
- SMART (Santa Margarita Area Residents Together v. San Luis Obispo County Bd. of Supervisors), 84 Cal.App.4th 922 (Cal. App. 2000) (development agreements; vested rights framework)
- Legacy Group v. City of Wasco, 106 Cal.App.4th 1305 (Cal. App. 2003) (subdivision map act limitations; breach claims analyzed)
- Subriar v. City of Bakersfield, 59 Cal.App.3d 175 (Cal. App. 1976) (administrative remedies exhaustion in permit challenges)
- Mola Development Corp. v. City of Seal Beach, 57 Cal.App.4th 405 (Cal. App. 1997) (judicial review of quasi-judicial determinations)
- Parlour Enterprises, Inc. v. Kirin Group, Inc., 152 Cal.App.4th 281 (Cal. App. 2007) (damages projections; evidentiary sufficiency for lost profits)
- Regan Roofing Co. v. Superior Court, 24 Cal.App.4th 425 (Cal. App. 1994) (elements of breach of contract claim)