NICHOLAS HONCHARIW, as Trustee, etc., Plaintiff and Appellant, v. COUNTY OF STANISLAUS et al., Defendants and Appellants.
No. F069145
Fifth Dist.
June 3, 2015
[CERTIFIED FOR PARTIAL PUBLICATION*]
COUNSEL
Shute, Mihaly & Weinberger, Matthew D. Zinn, Laura D. Beaton; John P. Doering, County Counsel, and Thomas E. Boze, Deputy County Counsel, for Defendants and Appellants.
OPINION
FRANSON, J.-Plaintiff contends the trial court erred when it applied the 90-day statute of limitations contained in
As to the cross-appeal involving the denial of sanctions against plaintiff, we conclude the trial court correctly determined plaintiff‘s complaint was not frivolous.
We therefore affirm the judgment of dismissal.
FACTS AND PROCEEDINGS
Plaintiff Nicholas Honchariw proposed to divide a 33.7-acre parcel of land in the Knights Ferry area of Stanislaus County into eight residential parcels and one undeveloped parcel. In connection with this proposal, Honchariw submitted a vesting tentative map application to the planning commission of the County of Stanislaus.
In February 2009, the planning commission considered Honchariw‘s application and his request for an exception to the county‘s rule requiring that all subdivision lots be connected to a public water system whenever such a system is available. The planning commission voted to deny Honchariw‘s application and the request for an exception.
Honchariw filed an administrative appeal. In March 2009, the Board of Supervisors of the County of Stanislaus (Board) voted to disapprove the subdivision project application and to deny the request for an exception to the rule requiring connections to an available public water system. The Board did not make any of the findings specified in subdivision (j) of
In June 2009, Honchariw filed a petition for administrative mandamus, challenging the Board‘s disapproval of his application.
In November 2011, we reversed the superior court‘s judgment and ordered the court to issue a writ of mandate directing the Board to vacate its denial of Honchariw‘s subdivision project application, reconsider the application, and make certain determinations and findings in the event that it again denied the application. (Honchariw v. County of Stanislaus (2011) 200 Cal.App.4th 1066, 1081-1082 [132 Cal.Rptr.3d 874].)
In January 2012, the superior court issued the writ of mandate and directed the Board to file a return to the writ within 90 days.2 The Board‘s initial return was filed in April 2012 and stated that the hearing on its reconsideration of Honchariw‘s vesting tentative map application would be held in May 2012.
On May 22, 2012, the Board approved the project.
In December 2012-almost seven months after the approval-Honchariw filed a complaint against the County of Stanislaus and the Board (collectively defendants) that alleged they were liable for inverse condemnation and for violating his right to substantive due process. Honchariw alleged the Board‘s May 2012 approval of his application ended the temporary taking of his property without just compensation. He sought damages of $2.5 million for the alleged taking.
In October 2013, after successive successful demurrers, Honchariw filed a second amended complaint (SAC), which again asserted causes of action for inverse condemnation and deprivation of substantive due process rights. The SAC is the operative pleading for purposes of this appeal.
Defendants again demurred based on the 90-day statute of limitations contained in
In December 2013, the superior court sustained the demurrer without leave to amend, concluding that the causes of action were untimely.
The day after their demurrer was sustained, defendants filed a motion for sanctions under
On January 3, 2014, the superior court held a hearing and denied the motion for sanctions. During the hearing, the court stated, “I thought there was [sic] pretty good arguments made on both sides, so I didn‘t feel it fell under [
In March 2014, the superior court filed a judgment of dismissal.
Honchariw timely appealed. The county filed a cross-appeal limited to the superior court‘s denial of its motion for sanctions.
DISCUSSION
I. Standard of Review*
II. Statute of Limitations
A. Statutory Text
The
B. Supreme Court Cases
1. Overview
In 1994, the construction and application of
*See footnote, ante, page 1.
The city demurred to the plaintiff‘s inverse condemnation action, contending the 90-day statute of limitations in
The issue presented in Hensler was which statute of limitations applied to an inverse condemnation complaint alleging the application of an ordinance adopted pursuant to the
“We conclude that an action in inverse condemnation, whether or not joined with an action in administrative mandamus [citation] challenging the ordinance or its application to the plaintiff‘s property, is governed by
section 66499.37 . . . unless it alleges the existence of a final judgment establishing that there has been a compensable taking of the plaintiff‘s land.“The legislative intent is clear.
Section 66499.37 was enacted to ensure that any challenge to local legislative or administrative acts or decisions taken pursuant to ordinances enacted under the authority of theSubdivision Map Act will be brought promptly. A complaint in inverse condemnation, even one which does not expressly attack the validity of the ordinance or its application, and seeks only compensation for an alleged taking, must be deemed a challenge to the local action. This follows because the constitutional validity of the governmental action if uncompensated must be determined in the course of ruling on the claim that compensation is owed. Moreover, the validity of the action must be determined to afford the local entity the opportunity to rescind its action rather than pay compensation for a taking. A landowner may not, by seeking only compensation, force a governmental agency to condemn the property.” (Hensler, supra, 8 Cal.4th at p. 7, italics added, fn. omitted.)
Based on this analysis, the court concluded that the 90-day limitations period in
Kavanau then took the second step and filed a new lawsuit to recover the money he lost while the rent control provisions were in effect. He alleged the rent control regulations were both an unconstitutional taking and a violation of his due process rights. (Kavanau, supra, 16 Cal.4th at p. 767.) The trial court sustained a demurrer without leave to amend, and the Court of Appeal affirmed the dismissal of Kavanau‘s inverse condemnation claim.3 (Kavanau, supra, at p. 766.) The Supreme Court granted review to consider “whether a taking occurred and what, if any, right to just compensation Kavanau might have.” (Id. at p. 768.)
To provide background for its analysis of these constitutional issues, the Supreme Court discussed Kavanau‘s use of the two-step procedure described in Hensler: “In Hensler . . . , we held that, if a property owner brings a timely action to set aside or void a regulation, he may but need not join a claim for damages. Instead, he may bring a damages claim separately after successfully challenging the regulation. [Citation.] Thus, in Hensler we identified an exception to the general rule against splitting claims. [Citations.] In accordance with Hensler, Kavanau brought his present claim for damages, alleging two causes of action.” (Kavanau, supra, 16 Cal.4th at p. 779.)
The Supreme Court then addressed whether a taking occurred and determined “[t]he remedy of future rent adjustments available to Kavanau under the due process clause precludes a finding of a taking in this case.” (Kavanau, supra, 16 Cal.4th at p. 786.) Because the takings clause was satisfied, Kavanau‘s inverse condemnation cause of action failed to state a claim for relief and the decision sustaining the demurrer was affirmed. (Ibid.)
The proper interpretation of the description of Hensler set forth in Kavanau stands at the center of the dispute presented in this appeal.
Honchariw contends Hensler and Kavanau should be read to mean that the first step in the two-step procedure is satisfied by any successful mandamus proceeding challenging the validity of a regulation or local land use decision. In contrast, defendants contend the rule that a writ of mandate and damages claim may, but need not, be joined in the same lawsuit applies only if the mandamus proceeding asserts that the challenged administrative action is invalid as an unconstitutional taking.
Honchariw supports his reading of the cases by citing the following discussion of
Honchariw also quotes a subsequent provision from this practice guide discussing Hensler and Kavanau: ”Kavanau . . . clarifies that Hensler did not demand that the inverse takings claim be filed within the short statute of limitations for challenging a land use decision. The required first step of a mandate suit can proceed to conclusion and a later suit for compensation is proper.” (2 Matteoni & Veit, Condemnation Practice in Cal., supra, § 17.3, p. 17-4 (rev. 10/13).)
In Honchariw‘s view, these excerpts support his position that the mandamus action is not required to include an unconstitutional taking claim and any challenge that invalidates the local land use decision satisfies “[t]he required first step of a mandate suit . . . .” (2 Matteoni & Veit, Condemnation Practice in Cal., supra, § 17.3, p. 17-4.) Honchariw argues this view makes sense because the claim that a compensable taking occurred was not yet ripe when he filed his mandamus action. (See Toigo v. Town of Ross (1998) 70 Cal.App.4th 309, 325 [82 Cal.Rptr.2d 649] [regulatory taking claim is not ripe for adjudication until the governmental entity charged with implementing the regulations has reached a final decision on application of regulations to affected property].)
Defendants contend the statements in Kavanau and the practice guide that are the foundation for Honchariw‘s argument are general in nature and must
3. Scope of the Hensler Exception
In Hensler, the Supreme Court stated that the exception to the statute of limitations applies only if the plaintiff in the inverse condemnation action “alleges the existence of a final judgment establishing that there has been a compensable taking of the plaintiff‘s land.” (Hensler, supra, 8 Cal.4th at p. 7.) Subsequently, the Supreme Court described its holding as follows: “In Hensler . . . , we held that, if a property owner brings a timely action to set aside or void a regulation, he may but need not join a claim for damages. Instead, he may bring a damages claim separately after successfully challenging the regulation.” (Kavanau, supra, 16 Cal.4th at p. 779.) The question before us is how to interpret these statements about what must be achieved in the initial mandamus action.
In Honchariw‘s view, the requirement for a final judgment establishing a compensable taking is no longer good law and all Kavanau requires is a final judgment establishing the invalidity of the challenged regulation or land use decision on any ground. The practice guide quoted by Honchariw uses language that supports his position. (See 2 Matteoni & Veit, Condemnation Practice in Cal., supra, §§ 16.4, 17.3, pp. 16-8 & 17-4 (rev. 10/13).) However, the excerpts did not explicitly frame and answer the question whether the initial mandamus action must include the constitutional claims as a basis for invalidating the regulation or administrative decision.
In contrast, another practice guide has addressed what issues must be resolved in the initial mandamus action before a second action for compensation or damages is permitted:
”Mandamus must be filed as a condition to an inverse condemnation action. A property owner who claims that a condition to a development permit constitutes a taking generally must first exhaust the administrative remedies, file a mandamus action, and receive a judicial determination that the regulation is a taking before filing or pursuing an action for compensation. If the statute of limitations expires on and bars the mandamus action, the owner is barred from seeking compensation.” (9 Miller & Starr, Cal. Real Estate (3d ed. 2007) § 25:54, p. 25-249 (rel. 10/2007), italics added.)
Thus, the practice guides are not in explicit agreement about what Hensler and Kavanau require of the first step in the two-step procedure.
One approach to Kavanau‘s one-paragraph summary of Hensler is to consider whether that paragraph contained general observations unnecessary
Another approach is to consider whether the language used in Kavanau expresses an intention by the Supreme Court to modify Hensler. In Kavanau, the court did not expressly acknowledge Hensler‘s reference to a “final judgment establishing . . . a compensable taking.” (Hensler, supra, 8 Cal.4th at p. 7.) As a result, the court did not explicitly approve or disapprove that language. Accordingly, we next consider whether the language used in Kavanau implies a modification of Hensler.
The court in Kavanau referred to Hensler as identifying “an exception to the general rule against splitting claims.” (Kavanau, supra, 16 Cal.4th at p. 779.) This statement implies that the two-step procedure is invoked when a plaintiff‘s cause of action alleging an unconstitutional taking is split between the mandamus action and a subsequent action seeking damages. In other words, if the mandamus action does not allege an unconstitutional taking, that cause of action has not been “split” into (1) a claim challenging the validity of administrative action and (2) a subsequent claim for damages. (See generally 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 45, pp. 108-109 [rule against splitting a cause of action].) Therefore, we infer from the statement in Kavanau about “an exception to the general rule against splitting claims” that the court continued to intend that the initial mandamus petition include the unconstitutional taking cause of action even though it was not required to seek compensation for the alleged taking. (Kavanau, supra, at p. 779.)
In addition, the circumstances and issues presented in Kavanau gave the Supreme Court little reason to consider and alter the formulation of the first step of the two-step procedure. First, the application of the two-step procedure was not contested in Kavanau and, therefore, the issues raised did not involve the timeliness of the second action. Second, the challenged rent control regulations had not been adopted under the
The reason the mandamus proceeding must include the constitutional taking issue is that the court‘s determination that a regulatory taking has occurred triggers a range of options for the public entity-it could approve the project as proposed, conditionally approve the project, or exercise the power of eminent domain. (Hensler, supra, 8 Cal.4th at p. 11.) Which of these options is adopted by the public entity affects the scope of the taking and, thus, the just compensation due to landowner. For example, if the public entity approves the project as proposed, the landowner‘s recovery would be limited to compensation for a temporary taking. At the other end of the range of options, if the public entity were to exercise eminent domain, the landowner then would be entitled to compensation for a permanent taking. The existence of this range of options means that the use of the two-step procedure is a convenient and efficient way to administer the decisions an agency must make to choose among those options.
Based on the foregoing, we read the Supreme Court‘s description of the Hensler decision as follows: “In Hensler . . . , we held that, if a property owner brings a timely [mandamus] action to set aside or void a regulation [on constitutional grounds], he may but need not join a claim for damages. Instead, he may bring a damages claim separately after successfully challenging the regulation [on constitutional grounds]. [Citation.] Thus, in Hensler we identified an exception to the general rule against splitting claims. [Citations.] In accordance with Hensler, Kavanau brought his present claim for damages, alleging two causes of action.” (Kavanau, supra, 16 Cal.4th at p. 779.)
As a result, the two-step procedure approved in Hensler allows a plaintiff to postpone bringing a claim for damages caused by an unconstitutional taking until a mandamus proceeding has been completed, provided that the mandamus judgment or order establishes an unconstitutional taking or due process violation.
As to Honchariw‘s argument that he could not have obtained a “judgment establishing that there had been a compensable taking” (Hensler, supra, 8 Cal.4th at p. 7, italics added) because that claim was not ripe, we conclude that Hensler requires, at a minimum, the mandamus action to challenge the validity of the regulation or administrative decision on the ground it effected an unconstitutional taking. Such a challenge to the validity would be ripe when the mandamus petition is filed and, therefore,
C. Sufficiency of the Pleadings
1. Application of Section 66499.37
Before addressing whether the exception (i.e., the two-step procedure) set forth in Hensler and discussed in Kavanau applies to Honchariw‘s claims, we first consider whether those claims fall within the statutory text of
First, we conclude the Board‘s denial of Honchariw‘s vesting tentative map application in March 2009 was a “decision of an advisory agency, appeal board, or legislative body concerning a subdivision” as that phrase is used in
Second, Honchariw‘s complaint for damages is an “action or proceeding to attack [or] review . . . the decision” of the Board concerning the subdivision proposed by Honchariw. (
Therefore, Honchariw‘s inverse condemnation action falls within the statutory text of
2. Application of the Hensler Exception
Based on our interpretation of Hensler and Kavanau, the exception identified by the Supreme Court in Hensler applies only if the plaintiff in the inverse condemnation action “alleges the existence of a final judgment establishing that there has been a compensable taking of the plaintiff‘s land.” (Hensler, supra, 8 Cal.4th at p. 7.)
Here, Honchariw alleged that his petition for writ of mandate sought to set aside the disapproval of the subdivision application “because the Board did not comply with the ‘anti-NIMBY’ protections of
Therefore, Honchariw failed to make the necessary allegation to come within the exception identified in Hensler because he did not allege “the existence of a final judgment establishing that there has been a compensable taking of the plaintiff‘s land.” (Hensler, supra, 8 Cal.4th at p. 7.) Furthermore, Honchariw has not asserted that such an allegation can be made. Consequently, we conclude that Honchariw‘s inverse condemnation action is untimely under
Alternatively, even if the exception applied and the statute of limitations did not begin to run until the Board‘s May 22, 2012, approval of the project, Honchariw‘s inverse condemnation complaint was untimely because it was filed in December 2012, well after the 90 days allowed by
III. Sanctions*
DISPOSITION
The judgment of dismissal and the order denying the motion for sanctions are affirmed. The parties shall bear their own costs on appeal.
Gomes, Acting P. J., and Poochigian, J., concurred.
A petition for a rehearing was denied June 24, 2015, and the opinion was modified to read as printed above. The petition of appellant Nicholas Honchariw for review by the Supreme Court was denied August 19, 2015, S227812.
*See footnote, ante, page 1.