Filed 12/4/20 11 Lagunita, LLC v. Cal. Coastal Commission CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

11 LAGUNITA, LLC et al.,

 Plaintiffs and Appellants,

v.

CALIFORNIA COASTAL 

COMMISSION,

 Defendant and Appellant.

 G058436

 (Super. Ct. No. 30-2018-01013545)

 O P I N I O N

Appeal from orders of the Superior Court of Orange County, Randall J. 

Sherman, Judge. Affirmed in part and reversed in part.

O’Melveny & Myers, Dimitri Portnoi, Heather Welles, Marissa Roy; 

Nossaman, John J. Flynn III, Stephanie N. Clark and Steven H. Kaufmann for Plaintiffs 

and Appellants.

Xavier Becerra, Attorney General, Daniel A. Olivas, Assistant Attorney 

General, Jamee Jordan Patterson, Deputy Attorney General for Defendant and Appellant.

Rutan & Tucker and Philip D. Kohn as Amicus Curiae on behalf of 

Plaintiffs and Appellants.

* * *
2

The California Coastal Act of 1976 established the California Coastal 

Commission. (See Pub. Resources Code, § 30000 et seq.; the Coastal Act.)

1

 “The 

Coastal Act ‘was enacted by the Legislature as a comprehensive scheme to govern land 

use planning for the entire coastal zone of California.’” (Pacific Palisades Bowl Mobile 

Estates LLC v. City of Los Angeles (2012) 55 Cal.4th 783, 793-794 (Pacific Palisades).)

A seawall is a retaining wall that runs parallel to the shoreline. A seawall 

protects land and structures behind the seawall from erosion and flooding. However, 

seawalls are disfavored by the Coastal Commission, in part, because the soil behind the 

seawall can no longer replenish the sand on the beach through natural erosion, eventually 

causing the beach to disappear.

Generally, the Coastal Act requires a Coastal Development Permit (CDP) 

for any development in the coastal zone. This case involves a CDP issued by the Coastal 

Commission in 2015 for the reinforcement of an existing seawall, which had been 

installed years earlier at the base of a 1950’s era Laguna Beach home (as pictured below).

1

Further undesignated statutory references are to the Public Resources Code.
3

Significantly, a condition of the CDP provided it would expire and the 

seawall would have to be removed if the home were “redeveloped in a manner that 

constitutes new development.” The homeowners reinforced the seawall, but they also 

remodeled the home without consulting the Commission (as pictured below).

The Coastal Commission found that the homeowners had violated the CDP 

by redeveloping the residence in a manner that constitutes new development. The 

Commission issued a cease and desist order requiring the removal of the seawall and 

further imposed a $1 million administrative penalty for the violation. The homeowners 

challenged those orders in court by filing a petition for writ of mandate.

The trial court denied the petition for writ of mandate as to the cease and 

desist order (affirming the Coastal Commission’s ruling); the court granted the petition as 

to the penalty (reversing the Commission’s ruling). The homeowners filed an appeal as 

to the cease and desist order. The Commission filed a cross-appeal as to the penalty. The 

City of Laguna Beach (the City) filed an amicus brief in support of the homeowners.

We affirm the trial court’s ruling as to the cease and desist order and we 

reverse the court’s ruling as to the administrative penalty.
4

I

FACTS AND PROCEDURAL HISTORY

In 2005, the Coastal Commission first approved an emergency CDP for a 

seawall located at 11 Lagunita Drive in Laguna Beach. The home was built in 1952 and 

is located on an ocean blufftop. The surrounding property extends from a private road all 

the way to the sand on Victoria Beach. The homeowner built the seawall larger than 

permitted and failed to obtain a follow up CDP as required. The unpermitted seawall 

remained for over 10 years.

In May 2014, the City approved a CDP for a new homeowner that had 

purchased the property. The City’s locally issued CDP provided after-the-fact 

authorization for the seawall, approval for the reinforcement of the seawall, and approval 

of the remodel of the residence. Two commissioners filed an appeal from the locally 

issued CDP with the Coastal Commission. The Commission maintained that the local 

CDP violated the City’s Local Coastal Program.

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Throughout the remainder of 2014, the homeowner’s architect and agent 

Jim Conrad communicated with the Coastal Commission. It was the position of the 

Commission staff that “the seawall could only remain and be repaired if it were to protect 

the existing structure.” Conrad agreed to scale back the proposed remodel project, stating 

“we would like to eliminate the home remodel portion of the CDP application at 11 

Lagunita. It is very clear after our meeting last week that staff will not support the 

proposed remodel of the home. The owners would like to just do some cosmetic 

remodeling, not subject to a CDP, and move on with their lives.”

2

A local government may issue a CDP under a Local Coastal Program certified by the 

Coastal Commission. A decision by a local government may be appealed to the 

Commission when there is a “substantial issue” as to the conformity of the locally issued 

CDP with the Coastal Act and the Local Coastal Program. (§ 30625, subd. (b)(1).)

The appeal can be filed by “an applicant, any aggrieved person, or any two members of 

the commission.” (§ 30625, subd. (a).)
5

The Coastal Commission’s 2015 CDP 

In October 2015, the Coastal Commission approved a CDP for the 

reinforcement of the seawall (issued in December 2015). According to the Commission’s 

staff report: “The applicant has revised the proposed project to eliminate the additions to 

and remodel of the residence that the City approved, and now requests authorization and 

reinforcement of the unpermitted seawall . . . .”

The 2015 CDP generally allowed for structural reinforcements and visual 

improvements to the seawall. The CDP included Special Condition Two: “Duration of 

Armoring Approval as Related to the Existing Bluff Top Residence. [¶] A. 

Authorization Expiration. This [CDP] authorizes the seawall to remain until the time 

when the currently existing residence requiring protection is: A) redeveloped in a 

manner that constitutes new development; B) is no longer present or becomes 

uninhabitable; or C) no longer requires a shoreline protective device, whichever occurs 

first. Prior to the anticipated expiration of the permit and/or in conjunction with 

redevelopment of the property, the Permittee shall apply for a permit amendment to 

remove the seawall or to modify the terms of its authorization.”

The 2015 CDP also included Special Condition Six: “Future 

Development of the Site. Future development, which is not otherwise exempt from 

[CDP] requirements, or redevelopment of the existing structure on the bluff top portion of 

the applicant’s property, shall not rely on the permitted seawall to establish geologic 

stability or protection from hazards. Any future new development on the site shall be 

sited and designed to be safe without reliance on shoreline protective devices.”

The 2015 CDP also included Special Condition 11: “Deed Restriction. 

PRIOR TO ISSUANCE OF THE . . . PERMIT, the applicants shall submit to the 

Executive Director for review and approval documentation demonstrating that the 

landowners have executed and recorded against the parcel(s) governed by this permit a 
6

deed restriction, . . . imposing the Special Conditions of this permit as covenants, 

conditions and restrictions on the use and enjoyment of the Property.”

The 2015 CDP further included Standard Condition Three: 

“Interpretation. Any questions of intent or interpretation of any condition will be 

resolved by the Executive Director or the Commission.”

The 2015 CDP also included Standard Condition Five: “Terms and 

Conditions Run with the Land. These terms and conditions shall be perpetual, and it is 

the intention of the Commission and the permittee to bind all future owners and 

possessors of the subject property to the terms and conditions.”

The Remodel of the Residence

In November 2015, Jeffrey and Tracy Katz (11 Lagunita LLC, collectively 

the Katzes) purchased 11 Lagunita Drive. The Katzes live next door and purportedly 

bought the property for investment purposes. The Katzes employed Conrad as their agent 

and architect, the same person employed by the prior homeowner. Conrad contacted the 

City for approvals, but Conrad did not contact the Commission.

In July 2016, the City issued building permits for the reinforcement of the

seawall and an interior retaining foundation wall (there is no dispute that this was within 

the scope of the work approved by the Coastal Commission in the 2015 CDP).

In July and August 2016, the City also issued building permits for 

additional interior and exterior remodel work to the residence (this work is the subject of 

this appeal). The City’s Building Division did not classify the project as a “major 

remodel.” The City determined that the remodel was exempt from CDP requirements.

In January 2017, after the remodel of 11 Lagunita Drive was well under 

way, a neighbor sent a letter to the City requesting that it issue a stop work order. The 

neighbor alleged the project was inconsistent “with the policies and regulations of the 

General Plan, Municipal Code and Coastal Act.” In an internal e-mail, a City building 
7

official stated “the project is a 100 percent remodel and addition which is why we 

required them to install fire sprinklers. Every area inside and outside of the house has 

been rebuilt.” Later, in response to the neighbor’s letter, the City stated less than 50

percent of the exterior wall framing or floors and roof systems had been demolished, 

therefore the remodel was not a “major remodel” as defined by Laguna Beach Municipal 

Code section 25.08.024.3

The Coastal Commission eventually became aware of the on-going 

remodel. The now months-long construction project involved the demolition of all the 

exterior walls down to their studs, the removal and replacement of the roofing materials, 

and the reinforcement of the entire framing system for the home. Eventually, virtually all 

components of the home would be demolished, removed, and replaced (interior walls, 

floors, windows, doors, counters, cabinets, plumbing, electric, etc.). The remodel 

reportedly increased the value of the home from $14 million to $25 million.

The Coastal Commission’s Enforcement Actions

In April 2017, the Coastal Commission sent an enforcement violation letter 

alleging the Katzes’ remodel of the 11 Lagunita Drive home violated Special Conditions 

Two and Six of the 2015 CDP. The Commission asked that the remodel cease.

The enforcement letter stated, in relevant part:

“We have determined that new development has taken place on the 

property in violation of Special Conditions of the CDP. Special Condition #2 states that 

the seawall is only authorized so long as the residence is not ‘redeveloped in a manner 

that constitutes new development.’ As we describe in detail below, the residence has 

been redeveloped in a manner that constitutes new development. Because seawalls can 

displace beaches and contribute to erosion of beaches and thus negatively impact public 

3

This section of the Municipal Code is not part of the certified Local Coastal Program.
8

access and coastal resources, Special Condition #2, was included to ensure that the 

seawall is used only to protect the existing structure during its lifespan, and not any new 

development. Under Special Condition #2, if new development occurs, then the property 

owner must apply to remove the seawall or apply to modify the permit, which is 

discussed in more detail below.

“The term ‘new development’ is defined in multiple locations in the City of 

Laguna Beach’s certified Local Coastal Program (‘LCP’). New development is defined 

in the LCP to include ‘improvements that increase the size or degree of nonconformity’ 

of a structure. Reconstruction of the house that has occurred on the site meets the 

Commission-certified Laguna Beach Local Coastal Plan (LCP) Land Use Element 7.3.10 

criteria of ‘new development’ of the existing structure and therefore has triggered the 

expiration of the seawall’s authorization per the CDP. To parse that out, first, the 

structure is legally nonconforming with multiple different oceanfront bluff top setbacks. 

In addition, the improvements have replaced and fortified every part of the house, and 

therefore increased its lifespan. Thus, the improvements have increased the ‘degree of 

nonconformity’ per Action 7.3.10. The Commission has made clear on many occasions 

that improvements that increase the lifespan of a house increase the degree of 

nonconformity, and create additional negative impacts to coastal resources.

“Because the redevelopment constitutes ‘new development’ . . . , Special 

Condition #2 requires you to apply for a permit to remove the seawall or a permit 

amendment to keep the seawall. However, Land Use Element Actions 7.3.4 and 7.3.9 

require that new development not rely on new or existing seawalls. In addition, Special 

Condition #6 of the CDP does not allow redevelopment of the existing structure to rely 

on the seawall. Thus, you must apply for a permit to remove the seawall. . . . [¶] . . . [¶]

“Finally, because the seawall is no longer authorized . . . , it is illegally 

limiting public access at Victoria Beach. Erosion caused by the seawall could negatively 

affect the beach, limiting public access, and causing other negative impacts to coastal 
9

resources. Under Coastal Act Section 30821, the Commission is authorized to impose 

civil penalties on anyone who violates the Coastal Act’s public access provisions.”

Throughout the next several months, there was an exchange of letters 

between representatives of the Katzes and the Coastal Commission; however, the Katzes 

continued with the remodel of the residence.

In April 2018, the Coastal Commission began official enforcement 

proceedings by mailing the Katzes a “Notice of Intent to Commence Cease and Desist 

Order and Administrative Civil Penalties Proceedings.” In response, the Katzes 

submitted a statement of defense. The Katzes’ position was generally “that demolition of 

the exterior elevations amounted to 9.8% of the total, while demolition of the floor and 

roof totaled 3.5% -- far below the 50% threshold set forth in the City’s LCP and 

completed pursuant to the City’s determination that the work constitutes an exempt 

‘minor remodel’ prior to the Staff’s initial April 17, 2017 enforcement letter.”

In July 2018, the Coastal Commission posted a staff report for an upcoming 

enforcement hearing. The Commission’s report was over 1,400 pages including exhibits

(the entire administrative record is over 8,227 pages). The staff recommended the 

Commission approve a cease and desist order and impose a $500,000 administrative 

penalty. The following month, the Commission conducted a public hearing. At the 

conclusion of the hearing, all the Commission members voted unanimously to issue a 

cease and desist order and to impose a $1 million administrative penalty.

Court Proceedings

In August 2018, the Katzes filed a petition for writ of mandate and 

application for a stay of the cease and desist order and penalty.

In September 2018, the trial court issued a partial stay order: “The Court 

concludes it is appropriate to maintain the status quo and stay the removal of the wall and 

the payment of the fine until this Court resolves the merits of this lawsuit. However, it is 
10

not appropriate to stay the order prohibiting new development that may violate 

Commission requirements, as well as the beach access requirement.”

In October 2019, after conducting a hearing, the trial court denied the 

Katzes’ petition for writ of mandate as to the cease and desist order (affirming the 

Coastal Commission’s ruling). The court found that the Commission acted within its 

jurisdiction, conducted a fair hearing, and its findings were supported by the evidence. 

The court granted the Katzes’ petition for writ of mandate as to the administrative penalty 

(reversing the Commission’s ruling). The court reversed the administrative penalty based 

on the Katzes’ good faith defense.

The Katzes filed an appeal and the Coastal Commission filed a crossappeal. The City filed an amicus curiae brief in support of the Katzes.

II

DISCUSSION

Courts review Coastal Commission rulings for an abuse of discretion. (See 

Code Civ. Proc., § 1094.5, subd. (b).) “‘An abuse of discretion is established if the 

[Commission] has not proceeded in a manner required by law, the order . . . is not 

supported by the findings, or the findings are not supported by the evidence.’” (See 

Fukuda v. City of Angels (1999) 20 Cal.4th 805, 810.) As to questions involving pure 

questions of law, courts exercise independent review. (Schafer v. City of Los Angeles 

(2015) 237 Cal.App.4th 1250, 1261.)

“‘In reviewing the agency’s decision, the trial court examines the whole 

record and considers all relevant evidence . . . .’ [Citation.] Substantial evidence means 

evidence ‘“‘“of ponderable legal significance.”’”’” (Schafer v. City of Los Angeles, 

supra, 237 Cal.App.4th at p. 1260.) An appellate court similarly reviews the Coastal 

Commission’s action, not the trial court’s decision. (Ross v. California Coastal Com.

(2011) 199 Cal.App.4th 900, 921-922 (Ross).)
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Under the abuse of discretion standard, a court does not “‘substitute[] its 

own findings and inferences for that of the Commission. Rather, it is for the [agency] to 

weigh the preponderance of conflicting evidence, as [the court] may reverse its decision 

only if, based on the evidence before it, a reasonable person could not have reached the 

conclusion reached by it.’” (McAllister v. California Coastal Com. (2008) 169 

Cal.App.4th 912, 921.) Courts presume the Commission’s findings are supported by 

substantial evidence; it is the appellant’s burden to demonstrate to the contrary. (Ibid.)

In this discussion we will: A) address the Katzes’ appeal from the trial 

court’s approval of the cease and desist order; and B) address the Coastal Commission’s

cross-appeal from the trial court’s denial of the administrative penalty.

A. The Katzes’ Appeal From the Cease and Desist Order

The Coastal Act authorizes judicial review of a Coastal Commission cease 

and desist order by way a petition for writ of mandate. (See § 30801.) Judicial review of 

a Commission’s order is limited to whether the agency “has proceeded without, or in 

excess of, jurisdiction; whether there was a fair trial [or hearing]; and whether there was 

any prejudicial abuse of discretion.” (Code Civ. Proc., § 1094.5, subd. (b).)

Here, the Katzes argue the Coastal Commission acted in excess of its 

jurisdiction in issuing the cease and desist order. The Katzes further argue the 

Commission abused its discretion because the order was not supported by the evidence. 

The Katzes do not challenge the fairness of the public hearing.

Accordingly, in this part of the discussion we will: 1) consider general

principles of law regarding the Coastal Act; 2) analyze whether the Coastal Commission 
12

acted in excess of its jurisdiction in issuing the cease and desist order; and 3) analyze 

whether the cease and desist order is supported by substantial evidence.

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1. General principles of law concerning the Coastal Act.

When enacting the Coastal Act: “‘The Legislature found that “the 

California coastal zone is a distinct and valuable natural resource of vital and enduring 

interest to all the people”; that “the permanent protection of the state’s natural and scenic 

resources is a paramount concern”; that “it is necessary to protect the ecological balance 

of the coastal zone” and that “existing developed uses, and future developments that are 

carefully planned and developed consistent with the policies of this division, are essential 

to the economic and social well-being of the people of this state . . . .”’” (Pacific 

Palisades, supra, 55 Cal.4th at pp. 793-794.)

“The Coastal Act is to be ‘liberally construed to accomplish its purposes 

and objectives.’ [Citation.] Under it, with exceptions not applicable here, any person 

wishing to perform or undertake any development in the coastal zone must obtain a 

[CDP] ‘in addition to obtaining any other permit required by law from any local 

government or from any state, regional, or local agency . . . .’” (Pacific Palisades, supra, 

55 Cal.4th at pp. 793-794.)

The word “development” as used in the Coastal Act is expansive. 

(§ 30106.) “‘Development’ means, on land, in or under water, the placement or erection 

of any solid material or structure; discharge or disposal of any dredged material or of any 

4

The Katzes argue this court should apply the independent judgment test because their 

“interest in the 11 Lagunita property qualifies as a fundamental vested right.” We 

disagree. For purposes of review of an agency’s action, there is no fundamental vested 

right to own property free from regulation. (See, e.g., Barrie v. California Coastal Com.

(1987) 196 Cal.App.3d 8, 12-15 [homeowners did not possess a fundamental vested right 

to build a protective seawall].) In any event, we would come to the same conclusions and 

disposition were we to exercise our independent judgment.
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gaseous, liquid, solid, or thermal waste; grading, removing, dredging, mining, or 

extraction of any materials; change in the density or intensity of use of land, including, 

but not limited to, subdivision . . . ; change in the intensity of use of water, or of access 

thereto; construction, reconstruction, demolition, or alteration of the size of any structure

. . . . [¶] As used in this section, ‘structure’ includes, but is not limited to, any building, 

road, pipe, flume, conduit, siphon, aqueduct, telephone line, and electrical power 

transmission and distribution line.” (§ 30106.)

Local agencies that lie in any part of the coastal zone must develop a Local 

Coastal Program that implements the requirements of the Coastal Act. The Local Coastal 

Program includes a land use plan and zoning ordinances, all of which must be consistent 

with the Coastal Act. (§§ 30001.5, 30500-30526; Pacific Palisades, supra, 55 Cal.4th at 

p. 794.) Any development in the coastal zone must comply with the local agency’s Local 

Coastal Program and the Coastal Act. (§ 30600, subd. (a).)

At the state level, the Coastal Commission ensures local governments 

comply with the Coastal Act in a variety of ways. For instance, the Commission must 

certify that a Local Coastal Program complies with the Coastal Act before it can take 

effect. (§ 30500, subd. (a).) If a local agency attempts to amend its Local Coastal 

Program, the Commission must approve the modification. (§ 30514, subd. (a).) The 

Commission also has jurisdiction to review the actions of a local agency to the extent it 

allows development in its coastal zone. For example, if a local agency issues a CDP 

under its Local Coastal Program, the Commission may, if the permitting decision is 

appealed, independently review the permit application to determine if it complies with 

the Local Coastal Program and is consistent with the Coastal Act. (§ 30600.5, subd. (d).)

The City is largely included within the coastal zone. The City’s Local 

Coastal Program defines a “Major Remodel” as follows: “Alteration of or an addition to 

an existing building or structure that increases the square footage of the existing building 

or structure by 50% or more; or demolition, removal, replacement, and/or reconstruction 
14

of 50% or more of the existing structure; greater specificity shall be provided in the 

Laguna Beach Municipal Code.”

The City’s Local Coastal Program also includes the following: “Allow 

oceanfront and oceanfront bluff homes, . . . or other principal structures, that are legally 

nonconforming as to the oceanfront and/or oceanfront bluff edge setback, to be 

maintained and repaired; however, improvements that increase the size or degree of 

nonconformity, including but not limited to development that is classified as a major 

remodel pursuant to the definition in the Land Use Element Glossary, shall constitute 

new development and cause the pre-existing nonconforming oceanfront or oceanfront 

bluff structure to be brought into conformity with the LCP.” (Italics added.)

2. Whether the Coastal Commission had the statutory jurisdiction to issue 

a cease and desist order.

The Coastal Act provides: “If the commission, after public hearing, 

determines that any person or governmental agency has undertaken, or is threatening to 

undertake, any activity that (1) requires a permit from the commission without securing a 

permit or (2) is inconsistent with any permit previously issued by the commission, the 

commission may issue an order directing that person or governmental agency to cease 

and desist.” (§ 30810, subd. (a), italics added.)

The Coastal Act further provides: “The cease and desist order may be 

subject to such terms and conditions as the commission may determine are necessary to 

ensure compliance with this division, including immediate removal of any development 

or material or the setting of a schedule within which steps shall be taken to obtain a

permit pursuant to this division.” (§ 30810, subd. (b).)

Here, in October 2015, the Coastal Commission issued a CDP allowing for 

the reinforcement of the seawall located at 11 Lagunita Drive, subject to various 

conditions. Special Condition Two required that the seawall had to be removed if the 
15

residence was “redeveloped in a manner that constitutes new development . . . .” Special 

Condition Two further provided: “Prior to the anticipated expiration of the permit and/or 

in conjunction with redevelopment of the property, the Permittee shall apply for a permit 

amendment to remove the seawall or to modify the terms of its authorization.” Special 

Condition Six required: “Any future new development on the site shall be sited and 

designed to be safe without reliance on shoreline protective devices.”

After conducting a hearing, the Coastal Commission determined the Katzes 

had violated the 2015 CDP and issued the cease and desist order. The Commission found 

the remodel of the residence was “inconsistent” with the CDP it had previously issued for 

the reinforcement of the seawall. (See § 30810, subd. (a).) Thus, we find that the 

Commission acted within the scope of its jurisdiction by issuing the cease and desist 

order, which requires the Katzes to remove the seawall. (See § 30810, subd. (b).)

The Katzes generally argue that the Coastal Commission did not file an 

appeal or file a writ of mandate within 90 days to challenge the City’s decision that their 

remodel was not a “major remodel.” Based on this, the Katzes argue the Commission 

was estopped from issuing the cease and desist order. We disagree.

“‘Generally speaking, four elements must be present in order to apply the 

doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; 

(2) [the party to be estopped] must intend that his conduct shall be . . . acted upon, or

must so act that the party asserting the estoppel had a right to believe it was so intended; 

(3) the other party must be ignorant of the true state of facts; and (4) [the other party] 

must rely upon the conduct to his injury.’” (Feduniak v. California Coastal Com. (2007) 

148 Cal.App.4th 1346, 1359.) Further, “it is settled that where even one of the requisite 

elements for estoppel is missing, it does not apply.” (Id at p. 1360.)

Here, the Katzes acknowledge the Coastal Commission did not receive 

“notice of the City’s determination until at least January 2017—after the Katzes had 

already completed a significant portion of the construction on the project.”
16

Therefore, the first element of equitable estoppel is not present because the 

party to be estopped (the Coastal Commission) was not apprised of the facts (the City’s 

approval of the remodel). The Katzes are correct that the Commission did not file an 

appeal from the ruling of the City, nor did the Commission file a petition for a writ of 

mandate. However, the Katzes could not have reasonably interpreted the Commission’s 

silence as its approval of the redevelopment of the residence under the terms of the 2015

CDP. Indeed, Special Condition Two required the Katzes to apply to the Commission for 

an amendment or a modification of the CDP “in conjunction with redevelopment” of the 

residence. Thus, equitable estoppel does not apply.

The related doctrine of collateral estoppel “prohibits the relitigation of 

issues argued and decided in a previous case, even if the second suit raises different 

causes of action.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824.) 

Collateral estoppel applies: “(1) after final adjudication (2) of an identical issue (3) 

actually litigated and necessarily decided in the first suit and (4) asserted against one who 

was a party in the first suit or one in privity with that party.” (Id. at pp. 824-825.)

Here, the City determined that the remodel of the residence at 11 Lagunita 

Drive did not constitute a “major remodel” and thus was exempt from requiring a CDP. 

But the issue later decided by the Coastal Commission (and the subject of this appeal) 

was not identical. The relevant issue before the Commission was whether the residence 

had been “redeveloped in a manner that constitutes new development” and consequently 

whether there was a violation of the 2015 CDP the Commission had previously issued. 

Therefore, because the issues in the two proceedings were not identical, the doctrine of 

collateral estoppel does not apply.

The Katzes also argue the Commission is bound by the decision of the City 

that their remodel was not a “major remodel” under res judicata principles. We disagree.

Under the doctrine of res judicata a party is precluded from litigating an 

identical claim in a subsequent proceeding. (Takahashi v. Board of Education (1988) 
17

202 Cal.App.3d 1464, 1473-1474.) “Claim preclusion ‘prevents relitigation of the same 

cause of action in a second suit between the same parties . . . .’ [Citation.] Claim 

preclusion arises if a second suit involves (1) the same cause of action (2) between the 

same parties [or those in privity with them] (3) after a final judgment on the merits in the 

first suit. [Citations.] If claim preclusion is established, it operates to bar relitigation of 

the claim altogether.” (DKN Holdings LLC v. Faerber, supra, 61 Cal.4th at p. 824.)

Here, the Coastal Commission was not a party to the proceedings that took 

place between the City and the Katzes regarding the City’s approval of the remodel. 

Indeed, the Katzes’ agent and architect Conrad specifically avoided involving the 

Commission. Thus, the doctrine of res judicata does not apply.

The Katzes also argue: “The Commission may not use the enforcement of 

the [2015] CDP to expand its limited jurisdiction.” (Capitalization & boldfacing 

omitted.) Quoting a portion of the Coastal Act, the Katzes state: “The Coastal Act 

expressly provides that development review authority ‘shall no longer be exercised by the 

Commission’ once the Commission has certified a local government’s [Local Coastal 

Program].”

The City makes essentially the same argument: “The Coastal Commission 

improperly usurped the City’s reserved authority and powers by constructively amending 

the City’s certified local program unilaterally and without adherence to required 

formalities.” (Capitalization & boldfacing omitted.) The City further argues: “The 

Coastal Commission’s noncompliant attempt to unilaterally amend the City’s certified 

local program, by revising the ‘major remodel’ definition, threatens to disrupt the City’s 

processing of remodel projects.” (Capitalization & boldfacing omitted.)

However, the jurisdictional issue before this Court does not concern the 

jurisdictional relationship between the City and the Coastal Commission. Nor are we 

concerned with the City’s processing of other remodel projects. Nor are we evaluating 
18

whether the City acted properly—or improperly—in exercising its local “development 

review authority” under the Coastal Act. (See § 30519, subd. (a).)

As the superior court stated, “this case is not about approving new 

development. It’s about whether the [Katzes] violated any conditions of their sea wall 

permit from the Coastal Commission. And that’s an issue for the Commission, not for 

the City of Laguna Beach.” As in the superior court, the narrow jurisdictional issue 

before this court is whether the Commission acted within the scope of its jurisdiction in 

issuing the cease and desist order based on the Katzes’ alleged violation of the 2015 

CDP, which had been previously issued by the Commission. (See Fukuda v. City of 

Angels, supra, 20 Cal.4th at p. 810.)

Again, because the Coastal Act specifically gives the Coastal Commission 

the jurisdiction to issue cease and desist orders to enforce the provisions of “any permit 

previously issued by the commission” we find the Commission acted well within the 

scope of its jurisdiction. (See § 30810, subd. (a).) We now turn to whether the 

Commission abused its discretion by finding the Katzes had violated the 2015 CDP; that 

is, whether the cease and desist order was supported by substantial evidence.

3. Whether there is substantial evidence in the administrative record 

supporting the cease and desist order.

“The agency’s findings and actions are presumed to be supported by 

substantial evidence. [Citations.] A person challenging an administrative determination 

bears the burden of showing the agency’s findings are not supported by substantial 

evidence.” (Ross, supra, 199 Cal.App.4th at p. 921.) “‘Although this task involves some 

weighing to fairly estimate the worth of the evidence, that limited weighing does not 

constitute independent review where the court substitutes its own findings and inferences 

for that of the Commission. Rather, it is for the Commission to weigh the preponderance 

of conflicting evidence, as [the court] may reverse its decision only if, based on the 
19

evidence before it, a reasonable person could not have reached the conclusion reached by 

it.’” (Id. at pp. 921-922.)

Prior to the public hearing regarding the alleged violation, the Coastal 

Commission staff prepared a 70-page report outlining its recommendations and findings. 

The report also included approximately 1,380 pages of exhibits (maps, photographs, emails, letters, memorandum, etc.). The report further included a summary of its findings 

of facts, including: “6. Unpermitted development and redevelopment, including 

demolition, reconstruction, and alteration of a structure . . . has all occurred on the 

property, without a CDP and inconsistent with the Permit.”

On August 9, 2018, the Coastal Commission held a public hearing. Pat 

Veesart, a Commission enforcement supervisor and an experienced contractor, testified: 

“My observation generally is that this is a major project that involves the re-engineering 

and rebuilding of an existing older home. In my opinion the project undertaken at 11 

Lagunita Drive far exceeds any common sense understanding of ordinary repair and 

maintenance, and I don’t know anybody in the construction industry who would 

characterize it as such.” Veesart narrated a number of slides and photographs during an 

extensive presentation showing the scope of the remodel (examples below).
20

Veesart noted: “Interior walls are removed, plumbing, wiring, railings, 

stairs, et cetera, were also all removed.” Veesart said that in one photograph “you can 

see a carpenter in the process of adding or sistering new joists to old joists. It appears 

that these new joists are taller and stiffer, thereby significantly increasing the loadbearing strength of the deck roof.” Veesart observed “they have started sheeting the deck 

roofs with new plywood. Plywood sheeting forms a diaphragm that spreads the load and 

gives greater strength and resistance to lateral movement. Also note that more interior 

framing and some framing has been added to exterior walls as well.” Veesart noted: 

“This present-day framing system results in a house that is much stronger than a typical 

house that was built in the 1950s.”

Veesart said that one of the photographs “shows a new structural steel or 

red iron beam being lifted into place by a crane. The addition of steel beams to this 

residential project is an indication that the structure of the original house is being

significantly modified.” Veesart said “workers have reconstructed a portion of the roof 

and are stripping off roofing material in preparation for a new roof.” Veesart stated, “I’m 

going to pan quickly through some interior views of the house so you can get an idea of 

the scope of the project. In this photograph we see new interior wall framing, ceiling 
21

framing, new wiring, new plumbing, et cetera.” Veesart showed comparisons of the 

interior of the residence before and after the remodel (examples below).

The commissioners also heard the testimony of several members of the 

public, all of whom testified in support of the staff’s recommendations. One member of 

the public stated: “If the California Coastal Commission does not act in accordance with 

the law and the letter of the permit, other homeowners and developers on the coast will 

see this example and act in the same manner, potentially rendering permit requirements 

useless in the future.”
22

Ultimately, the commissioners voted unanimously to issue an amended 

cease and desist order, which required the Katzes to remove the seawall within 60 days

(although the Executive Director could extend the deadline if needed).

Here, we find the testimony during the hearing, as well as photographs of 

the remodel, constitute substantial evidence the Katzes violated the special conditions of 

the 2015 CDP. In other words, the evidence supports a finding that the residence was 

“redeveloped in a manner that constitutes new development” by any reasonable definition 

or understanding of those terms. Indeed, the Coastal Act’s definition of the word 

“development” includes the “construction, reconstruction” or “demolition” of any 

structure. (§ 30106.) Based on this evidence, we cannot say that “‘a reasonable person 

could not have reached the conclusion reached by’” the Coastal Commission. (Ross, 

supra, 199 Cal.App.4th at p. 922.) Thus, under the substantial evidence test (or under an 

independent standard of review), we affirm the cease and desist order.

The Katzes do not argue that the home was not redeveloped in a manner 

that constitutes new development. Rather, the Katzes repeatedly seek to reframe the issue 

by arguing their home was not redeveloped in a manner that constitutes a major remodel. 

For instance, the Katzes argue “the Commission lacked sufficient evidence to conclude 

that the Katzes’ project was a ‘major remodel,’ rather than exempt ‘repair and 

maintenance.’” (Italics added.) They also argue: “On the merits, the Commission 

enforcement proceedings can be reduced to one question: Was the Katzes’ project a 

‘major remodel’ or exempt ‘repair and maintenance’?” (Italics added.)

The Katzes have misidentified the issue. Whether the redevelopment of the

11 Lagunita Drive residence can be considered either a “major remodel” or exempt 

“repair and maintenance” is irrelevant. Special Condition Two of the 2015 CDP does not 

use the term major remodel; rather, it states that the residence cannot be “redeveloped in 

a manner that constitutes new development.” (Italics added.) Special Condition Six of 

the CDP also does not use the term “major remodel”; rather, it states that: “Any future 
23

new development on the site shall be sited and designed to be safe without reliance on 

shoreline protective devices.” (Italics added.)

The Coastal Commission explained the difference between a major remodel 

and new development as follows: “Although there is [an] overlap between the phrases 

‘new development’ and ‘major remodel,’ resulting from the fact that a major remodel, by 

definition, constitutes new development, new development and major remodels are 

separate classifications of development activities under the City’s Local Coastal Program 

(‘LCP’). See for instance, Section 7.3.10 of the LCP, which states, in part, ‘. . . 

improvements that increase the size or degree of nonconformity, including but not limited 

to development that is classified as a major remodel pursuant to the definition in the 

Land Use Element Glossary, shall constitute new development. . . .’”

On appeal, this court will not engage in an irrelevant analysis of whether 

the Katzes’ remodel of their home can be characterized as a major remodel or not. To 

reiterate, the statutorily limited scope of our review is: 1) whether the Coastal 

Commission acted within its jurisdiction in issuing the cease and desist order; and 2) 

whether the Commission abused its discretion (whether the order was supported by 

substantial evidence). (See Code Civ. Proc., § 1094.5, subd. (b).)

In sum, we find the Coastal Commission acted well within the scope of its 

jurisdiction and substantial evidence supports the Commission’s finding that the Katzes 

violated the 2015 CDP by redeveloping the 11 Lagunita residence in a manner that 

constitutes new development.

5

Thus, we affirm the cease and desist order in all respects.

5

Because we are upholding the cease and desist on these grounds, we need not address 

the Katzes additional claim that: “The Commission also erroneously concluded that the 

11 Lagunita project could not qualify as exempt repair and maintenance because it was 

‘located within 50 feet of a coastal bluff edge and within a sand area.’”
24

B. The Commission’s Cross-Appeal From the Administrative Penalty

The Coastal Commission argues the trial court erred when it granted the 

Katzes’ petition for a writ of mandate as to the administrative penalty. We agree.

As with the cease and desist order, an administrative penalty is analyzed 

under an abuse of discretion standard of review. “Judicial interference with an agency’s 

assessment of a penalty ‘will only be sanctioned when there is an arbitrary, capricious or 

patently abusive exercise of discretion by the administrative agency.’” (Kazensky v. City 

of Merced (1998) 65 Cal.App.4th 44, 54.) A reviewing court cannot substitute its own 

judgment regarding a penalty for that of the agency; a reviewing court cannot lower a 

penalty because it believes the agency’s decision was “‘too harsh.’” (Id. at p. 75.)

“With respect to the question of penalty, the superior court’s powers of 

review are quite limited, and are exercised only with great deference to the administrative 

agency’s findings. [Citation.] Neither the trial court nor the appellate court is entitled to 

substitute its discretion for that of the administrative agency concerning the degree of 

punishment imposed. [Citation.] The trial court may vacate but not modify the agency’s 

determination of penalty if it finds a manifest abuse of discretion. [Citation.] The 

appellate court conducts a de novo review of the penalty assessed, giving no deference to 

the trial court’s determination. Again, the appellate court reviews the agency’s selection 

of penalty and, if reasonable minds can differ with regard to the propriety of the 

disciplinary action, it finds no abuse of discretion.” (Deegan v. City of Mountain View

(1999) 72 Cal.App.4th 37, 45-46.)

In this part of the discussion, we will: 1) consider the statutory framework 

for administrative penalties under the Coastal Act; 2) review the relevant proceedings in 

this case; and 3) analyze whether the Coastal Commission abused its discretion when it 

ordered the Katzes to pay a $1 million administrative penalty.
25

1. The statutory framework for an administrative penalty.

One of the “basic goals” of the Coastal Act is to: “Maximize public access 

to and along the coast and maximize public recreational opportunities in the coastal zone 

consistent with sound resources conservation principles and constitutionally protected 

rights of private property owners.” (§ 30001.5, subd. (c), italics added.) Public access is 

not limited to access to the coastal beaches, but also includes access to the Pacific Ocean 

itself. “Development shall not interfere with the public’s right of access to the sea . . . , 

including, but not limited to, the use of dry sand and rocky coastal beaches to the first 

line of terrestrial vegetation.” (§ 30211, italics added.)

“In addition to any other penalties imposed pursuant to this division, a 

person, including a landowner, who is in violation of the public access provisions of this 

division is subject to an administrative civil penalty that may be imposed by the 

commission in an amount not to exceed 75 percent of the amount of the maximum 

penalty authorized pursuant to subdivision (b) of Section 30820 for each violation [‘not 

less than one thousand dollars ($1,000), nor more than ($15,000), per day’]. The 

administrative civil penalty may be assessed for each day the violation persists, but for no 

more than five years.” (§ 30821, subd. (a), italics added.) “In determining the amount of 

civil liability, the commission shall take into account the factors set forth in subdivision 

(c) of Section 30820.” (§ 30821, subd. (c).)

“In determining the amount of civil liability, the following factors shall be 

considered: [¶] (1) The nature, circumstance, extent, and gravity of the violation. [¶] 

(2) Whether the violation is susceptible to restoration or other remedial measures. [¶] 

(3) The sensitivity of the resource affected by the violation. [¶] (4) The cost to the state 

of bringing the action. [¶] (5) With respect to the violator, any voluntary restoration or 

remedial measures undertaken, any prior history of violations, the degree of culpability, 

economic profits, if any, resulting from, or expected to result as a consequence of, the 

violation, and such other matters as justice may require.” (§ 30820, subd. (c).)
26

2. The relevant proceedings in this case.

On April 17, 2017, the Coastal Commission issued a notice of violation 

concerning the 2015 CDP (this was the beginning date for the Commission’s calculation 

of the fine). In addition to its allegations about the CDP violation, the Commission also 

noted: “Under Coastal Act Section 30821, the Commission is authorized to impose civil 

penalties on anyone who violates the Coastal Act’s public access provisions.”

The Coastal Commission stated the following: “At the property, it is clear 

that extending the life of the nonconforming house will cause increased impacts to 

coastal resources. Unpermitted reconstruction of the property would increase the degree 

of nonconformity by significantly extending the time that the pre-Coastal Act structure is 

authorized to remain in place; permitted reconstruction would likely result in removal of 

the seawall. The longer the seawall exists, the more damaging coastal resource impacts 

resulting from the seawall will be. Seawalls on an eroding beach will eventually destroy 

the beach by not allowing the beach to move inland naturally.”

In the report prepared prior to the hearing, the Coastal Commission found

that during the spring “little dry sand existed in front of the seawall relative to the rest of 

Victoria Beach. The pictures . . . show how there were only a few feet of dry sand left in 

front of the seawall. Wet sand stretched almost to the seawall itself, which showed that 

any one on the beach at that time would have an extremely narrow area of beach to 

traverse. Therefore, during certain seasons and particularly during high tides and swells, 

public access appears to be especially affected by the lack of dry sand available to 

traverse to the other side of the beach or to even use the public easement and State 

tidelands in front of the seawall for recreation.”

The Coastal Commission staff made findings as to each of the five relevant 

factors to determine the amount of civil liability, ultimately recommending “the 

imposition of a substantial civil liability.” (See § 30821, subd. (b).) We will now quote 

extensively from those findings.
27

“The nature, circumstance, extent, and gravity of the violation.” (See § 

30820, subd. (c)(1).) The Coastal Commission found: “The nature and circumstance of 

the violation at hand includes (1) the performance of the development that the Katzes 

knew or should have known would require Coastal Act authorization, without that

authorization, achieved by intentionally avoiding Commission review; (2) the retention of 

a seawall that the Commission had made clear was having an adverse impact on public 

access, in spite of the fact that the Katzes undertook development that clearly triggered 

the Permit conditions requiring removal of the seawall, and in violation of the Permit 

conditions that were specifically required in order to prevent such public access impacts; 

and (3) the use of the seawall to protect new, unpermitted development. . . . [The Katzes] 

also declined to take advantage of the opportunity to halt the ongoing violation when they 

were informed of the issues, and rather than avoid incurring additional harm to coastal 

resources, costs and risks, instead continued with the unpermitted work. In sum, the 

Commission finds that the application of this factor warrants a high penalty.”

“Whether the violation is susceptible to restoration or other remedial 

measures.” (§ 30820, subd. (c)(2).) The Coastal Commission found “the loss of public 

access during the time when the wall caused the loss of sand is not easily susceptible to 

remedial measures. The Katzes have been in violation of the underlying CDP for more 

than two years, and substantial amounts of sand have been trapped in the bluff behind the 

seawall and/or scoured off the beach as a result of the wall. The seawall has therefore 

caused public access impacts, especially during particular seasons and swell events. . . . 

In addition, it will likely still be a significant period of time before the Katzes remove the 

seawall and, if necessary, modify the house and/or provide for an alternate method of 

protection that does not impact the beach. On the other hand, the violation itself, rather 

than the past impacts of that violation, can be remedied by the removal of the seawall, 

and sand can be placed on the beach such that, going forward, there would be no ongoing 
28

public access impacts. In sum, the Commission finds that the application of this factor 

warrants a moderate penalty.”

“The sensitivity of the resource affected by the violation.” (§ 30820, subd. 

(c)(3).) The Coastal Commission found: “Laguna Beach does not have as many wide, 

sandy beaches as other parts of Orange County, and therefore, the sand is especially 

important. In addition, many parts of the coast in Laguna Beach have large seawalls that 

negatively impact public access . . . . However, other than 11 Lagunita, . . . this section 

of Victoria Beach is not characterized by vertical seawalls. Therefore, this beach is 

relatively free of large seawalls, and thus, it is more sensitive to the impacts of this 

seawall, and is a sensitive resource. On the other hand, there are times of year when the 

sandy beach likely remained fairly broad, showing that the resource was not so sensitive 

as to be continually substantially diminished by this violation. Therefore, in light of that, 

Commission finds that the application of this factor warrants a moderate penalty.”

“The cost to the state of bringing the action.” (§ 30820, subd. (c)(4).) The 

Coastal Commission found “the costs to the state have been significant. The State has 

had to expend its limited resources in order to restore public access to the sandy beach 

that should have already existed, had the CDP been complied with. Instead of complying 

in any way, the Katzes refused to stop construction, sued the Commission, and then 

undertook time-consuming and costly discovery. The Commission has worked on this 

enforcement case for more than a year and a half, all because the Katzes decided not to 

apply for a CDP before undertaking the unpermitted development. Had the Katzes 

applied for a CDP as they were clearly required to, it would have saved the Commission 

significant time, money, and staff resources. Thus, the Commission finds that the 

application of this factor warrants a moderate to high penalty.”

“With respect to the violator, any voluntary restoration or remedial 

measures undertaken, any prior history of violations, the degree of culpability, economic 

profits, if any, resulting from, or expected to result as a consequence of, the violation, and 
29

such other matters as justice may require.” (§ 30820, subd. (c)(5).) The Coastal 

Commission found “no information to indicate that the Katzes have a history of 

violations. On the other hand, the Katzes have been particularly uncooperative. As to the 

issue of ‘economic profits, if any, resulting from, or expected to result as a consequence 

of, the violation,’ although they have stated their desire to sell the property for a 

significant increase over the purchase price, if the orders are complied with . . . , it 

appears that they would not reap the same economic benefits from the violations. 

Therefore, it appears that this factor would support a moderate penalty.

“Aggregating these factors, the Commission finds that a moderate to high 

penalty could be justified here. Imposing 50 percent of the maximum penalty for 365 

days would result in a penalty of just over $2 million ($11,250 x .5 x 365). Thus, a $2 

million penalty would be justified. Imposing 25 percent of the maximum penalty would 

obviously result in a penalty of approximately $1 million.

“Applying those general factors here, and if the actual date of the 

demolition to today’s date were used to calculate the number of days of violation, the 

Commission could actually justify imposing a penalty up to a maximum of $8.3 million 

in this case, given the severity of the violation, the Katzes’ refusal to stop construction 

work or consider any other alternatives to the seawall, the substantial amount of 

Commission staff work attempting to resolve this violation, the significant Coastal Act 

resources impacted by the violation—Victoria Beach and public access to it now and in 

the future—and the significant public and legal policies at issue here, including the need 

to secure compliance with Commission CDPs and CDP conditions regarding seawalls, 

and the importance of public access in this area and of avoiding building seawalls in 

general, especially in light of sea level rise. And if one calculated the penalty to run until 

the violation were resolved, it would clearly be even higher.

“However, . . . Commission staff wants to focus on the injunctive solution 

that will help to restore public access at Victoria Beach; namely, removing the seawall 
30

and modifying the house and/or applying for alternate methods of protecting the house 

that do not impact the beach. In addition, litigation has already occurred and the Katzes 

have threatened more litigation, and so there is a likely chance that the Commission will 

be able to seek further 30820 penalties in litigation. Therefore, Commission staff 

recommends using prosecutorial discretion to impose a lower penalty than allowable by 

the factors discussed above. Therefore, staff recommends . . . an administrative penalty 

amount in the range between $400,000 and $900,000, with a recommended amount of 

$500,000, recognizing that further section 30820 penalties may be sought in litigation.”

At the public hearing in August 2018, the commissioners addressed the 

administrative penalty in conjunction with the cease and desist order. At the conclusion 

of the staff’s presentation, the commissioners were given the opportunity to ask questions 

of the staff members and others present at the hearing.

One of the commissioners asked: “Were [the Katzes] still engaging in the 

renovations and the rebuilding of this structure when the Coastal Commission 

enforcement staff contacted them?” An enforcement analyst responded, “Yes, our -- our 

letter was sent in April of 2017, and the work continued for a year after that. We . . . 

asked them to stop in that letter and that’s -- that letter is an exhibit to the staff report.”

The chief of enforcement stated: “Yeah, I was just going to add that we 

were really trying to stop the violation before it was completed. We have a pretty good 

track record -- of when we find something . . . that’s in process, if we can stop it, it saves 

both the potential violator money and it -- it makes it easier to restore the coastal resource 

more quickly. [¶] So we thought that we could do something to stop it . . . and we tried 

to do that. That’s what the first letters and the first calls were doing . . . and when that 

was unsuccessful, the other thing that we try to do is we usually try to settle, and you saw 

a slide where you saw all the times that we tried to approach them, and we tried even as 

recently as in the last few weeks to try to work this out. And we were not able to do so.”

The Coastal Commission’s counsel stated: “We got responses, we just didn’t ever get a 
31

response to our request that they stop, or a response to our request that we be able to visit 

the site. So yes, they did send letters back, but they never stopped work and they never 

said, yes, you can come visit the site.”

Coastal Commissioner Steve Padilla asked questions of the Katzes’ 

architect and agent Conrad. The commissioner asked Conrad about a letter written by 

staff that memorialized a phone conversation. The letter from staff to Conrad stated: 

“According to your timeline of events, the [Katzes] wanted to remodel the house without 

getting a CDP or dealing with the Coastal Commission at all. Knowing that development 

on the site could trigger the requirement for a CDP from the Commission per [the 2015 

CDP], which you obtained as a representative of the previous owner, you purportedly 

sought input from the City of Laguna Beach regarding what would constitute 

development that would require a CDP. However, you did not contact Coastal 

Commission staff for their input at this time.”

After Commissioner Padilla quoted from the letter, the following dialogue 

occurred:

“COMMISSIONER PADILLA: So my question is is [sic] that a fairly 

accurate representation of that phone conversation on April 19th?

“MR. CONRAD: I would say yes, it’s fairly accurate. It was a couple of 

years ago --

“COMMISSIONER PADILLA: Okay.

“MR. CONRAD: -- but we -- we understood --

“COMMISSIONER PADILLA: I just . . . need you to let me know 

whether it’s a fairly accurate representation --

“MR. CONRAD: It’s not -- it’s not completely accurate.

“COMMISSIONER PADILLA: Okay. What about it is not accurate?

“MR. CONRAD: The part that is not completely accurate is that, if I had it 

in front of me I could maybe -- maybe go through it a little bit more specifically, but we 
32

understood that what our restrictions are with the seawall. And the application that we 

made, we believed did not violate any of those restrictions, and so --

“COMMISSIONER PADILLA: I understand that was your belief, but did 

you convey to the staff that it was the desire of the Katzes given the point in time on the 

timeline to not have to deal with the Coastal Commission if at all possible?

“MR. CONRAD: No. It was the desire of the Katzes to do a remodel that 

would not violate the conditions of their approval. That’s the part that’s not accurate.

“COMMISSIONER PADILLA: Was it their desire to avoid the necessity 

for a [CDP]?

“MR. CONRAD: Well, one of the things that we understood would be a 

violation -- or one of the things that we understood require us to come back to the Coastal 

Commission is if we needed a new CDP, we would have to get the seawall reapproved, 

and we understood that probably wouldn’t happen. So we weren’t necessarily trying to 

avoid the Coastal Commission, we were trying to comply with the conditions as we 

understood them.

“COMMISSIONER PADILLA: Okay. And it also indicates that you 

sought clarification from the local jurisdiction, but the permit was issued from the 

Commission in 2015. Why didn’t you consult the Commission?

“MR. CONRAD: We didn’t feel that it was necessary. We thought it was 

very clear that we were following the conditions. We went over it. The City is the 

permitting agency for minor remodels, and the restriction was that we could not do any 

major remodels, and we didn’t propose a major remodel, so it just -- it never -- the 

thought never entered my mind that I should come to the Coastal Commission for a

minor remodel, because were allowed to do that with -- we were not -- it would not 

violate the condition of our approval for the seawall.”

At the conclusion of the hearing, another commissioner moved to “find that 

11 Lagunita LLC and Jeff and Tracy Katz are in violation of the public access provisions 
33

of the Coastal Act and that the Commission impose upon them an administrative civil 

penalty in the amount of $1 million pursuant to the findings of the hearing and of the staff 

reports and analysis in all of the documents . . . and that this fine shall be required to be 

paid within 60 days.” Katzes’ counsel chose “not to argue with what the fine would be” 

and the commissioners voted unanimously in favor of the motion.

3. The application and analysis of the law as applied to the facts.

The Coastal Commission thoroughly evaluated and made extensive 

findings regarding the five factors before adopting those findings. (See § 30820, subd. 

(c).) There is no indication the Commission acted in an arbitrary or capricious manner. 

Quite the opposite. The Commission appears to have acted in a quite rational and 

professional manner. Notably, the $1 million penalty was smaller than the potential 

penalty that could have been imposed ($8.3 million). Thus, we find no abuse of 

discretion and we affirm the $1 million penalty under section 30821.

6

The Katzes argue: “The Commission lacked authority to impose an 

administrative penalty based on the Katzes’ alleged development violations.” 

(Capitalization & boldfacing omitted.) We disagree.

In addition to administrative penalties imposed by the Coastal Commission 

for public access violations under section 30821 (as in this case), a superior court can also 

impose civil penalties for any development “that is inconsistent with any [CDP] 

previously issued by the commission . . . in an amount that shall not exceed thirty 

6

This court questions the nexus between the Katzes’ violation of the 2015 CDP and the 

second factor: “Whether the violation is susceptible to restoration or other remedial 

measures.” (§ 30820, subd. (c)(2).) By violating the CDP’s special conditions, the 

Katzes have effectively hastened the removal of the seawall, and thereby presumably 

lessened its detrimental effects to the beach. However, we also find the weighing of the 

other four factors justify the imposition of the penalty imposed by the Commission.
34

thousand dollars ($30,000) and shall not be less than five hundred dollars ($500).” 

(§ 30820, subd. (a)(1).)

Here, the Katzes appear to be arguing that only one penalty can be imposed 

for their alleged violation of the CDP and that it can only be imposed by the superior 

court under section 30820. But the Katzes cite no legal authority in support of that 

notion. (See Vo v. City of Garden Grove (2004) 115 Cal.App.4th 425, 447-448 [“A brief 

must contain reasoned argument and legal authority to support its contentions, or the 

court may treat the argument as waived”].) Indeed, the Commission staff recommended

the Coastal Commission exercise “prosecutorial discretion” and not impose a more 

severe penalty under section 30821 because “further section 30820 penalties may be 

sought in litigation.” Thus, we reject the Katzes’ argument regarding the purported lack 

of authority of the Commission to issue the administrative penalty under section 30821.

The Katzes also argue: “Public access is not at issue in this case. The 

Katzes’ project pertained solely to the residence at 11 Lagunita and did not involve 

enlargement of the residence’s footprint. Because the project maintained the residence’s 

floor area, height, and bulk, public access to the adjacent Victoria Beach remained 

exactly as it had existed before the project.” We disagree.

Similar to the word “development” the phrase “public access” under the 

Coastal Act is broadly construed. (Surfrider Foundation v. California Coastal Com.

(1994) 26 Cal.App.4th 151, 157-158 [“we conclude the public access . . . policies of the 

Coastal Act should be broadly construed to encompass all impediments to access, 

whether direct or indirect, physical or nonphysical”].) Public access is not limited to the 

right to access a particular beach, it also includes the public’s right to access the sea itself, 

as well as the dry sand on the beach: “Development shall not interfere with the public’s 

right of access to the sea . . . , including, but not limited to, the use of dry sand and rocky 

coastal beaches to the first line of terrestrial vegetation.” (§ 30211, italics added.)
35

Here, the Coastal Commission made findings concerning the general 

negative effects of seawalls. The Commission additionally found that the continued 

presence of the seawall at 11 Lagunita Drive also had specific adverse impacts on 

Victoria Beach, including decreasing the amount of dry sand. After the Commission 

notified the Katzes they had violated the CDP, and thus needed to remove the seawall 

according to the special conditions of the CDP, the seawall remained for over a year. 

Thus, the record supports the Commission’s finding that the continued presence of the 

seawall violated the public access provisions of the Coastal Act. Further, as the 

Commission noted, the Katzes’ remodel added decades to the useful life of the home, 

meaning that the seawall would be present for many more years into the future.

The Katzes also argue they “had a good faith belief in the lawfulness of 

their actions.” (Capitalization & boldfacing omitted.) But there is evidence in the record 

to support the Coastal Commission’s implied findings to the contrary.

“It has been held that a violator’s good faith belief in the legality of his 

actions presented a defense to the imposition of civil penalties if such belief is found to 

have been reasonably entertained.” (Whaler’s Village Club v. California Coastal Com.

(1985) 173 Cal.App.3d 240, 263.) Generally, under an abuse of discretion standard of 

review, if there are “no findings, the reviewing court will infer all findings necessary to 

support the judgment and then examine the record to see if the findings are based on 

substantial evidence.” (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545.)

Here, the Commission staff noted that “a ‘reasonable person’ would have 

recognized that if [he or she] wanted to embark on a major construction project without 

triggering a condition imposed by a regulator[y] body, it would make sense to contact 

that regulatory body before doing so to be sure that the work would not trigger that 

condition. A reasonable person would have done so in any case, but even more so where 

that regulatory body had include[d] a condition (Standard Condition 3 of the Permit) 

reserving to itself the authority to interpret its conditions. A reasonable person would 
36

certainly not have thought it prudent to avoid any contact with that body and could not 

claim innocent ignorance of the rules after having done so.”

We agree. It appears to this court, based in part on Conrad’s testimony, the 

Commission reasonably could conclude the Katzes deliberately sought to avoid the 

Coastal Commission’s review of their proposed remodel of the home because they knew, 

or reasonably should have known, that the Commission staff would have found that the 

proposed redevelopment constituted new development in violation of the 2015 CDP. 

Further, the Commission reasonably could conclude the Katzes sought approval for the 

remodel from the City rather than the Commission in order to maintain the existing 

seawall, in further violation of the 2015 CDP.

7

 Consequently, the Commission did not 

abuse its discretion in implicitly finding the Katzes were not acting with a reasonable

good faith belief in the legality of their actions. (See Finney v. Gomez, supra, 111 

Cal.App.4th at p. 545 [“the reviewing court will infer all findings necessary to support 

the judgment”].)

In sum, we find no abuse of discretion as to Coastal Commission’s penalty 

order. The Katzes have shown no basis for this court to absolve them of the properly 

imposed $1 million administrative penalty.

7

 At oral argument, the Katzes argued there was no “process” or “procedure” for them to 

contact the Coastal Commission (rather than the City) in conjunction with the remodel. 

They are mistaken. Special Condition Two of the 2015 CDP specifically provided: 

“Prior to the anticipated expiration of the permit and/or in conjunction with 

redevelopment of the property, the Permittee shall apply for a permit amendment to 

remove the seawall or to modify the terms of its authorization.” (Italics added.) Further, 

Commissioner Padilla asked Conrad why he did not consult with the Coastal Commission 

prior to the remodel. Conrad did not say that he was unable to do so; rather, Conrad said: 

“We didn’t feel that it was necessary.” In the absence of any evidence to the contrary, we 

presume the Katzes could have consulted with the Commission prior to the remodel 

through normal means (e-mail, letter, phone, etc.).
37

III

DISPOSITION

The trial court’s order denying the petition for writ of mandate as to the 

cease and desist order is affirmed. The trial court’s order granting the petition for writ of 

mandate as to the administrative penalty is reversed. Each party shall bear their own 

costs on appeal.

MOORE, ACTING P. J.

WE CONCUR:

ARONSON, J.

FYBEL, J.