Source: https://law.justia.com/cases/california/supreme-court/3d/24/862.html
Timestamp: 2019-04-26 04:19:48
Document Index: 79884537

Matched Legal Cases: ['§ 5000', '§ 65560', '§ 65700', '§ 5558', '§ 5559', '§ 5561', '§ 5562', '§ 5563', '§ 5564', '§ 452', '§ 30200', '§ 5565']

Furey v. City of Sacramento :: :: Supreme Court of California Decisions :: California Case Law :: California Law :: US Law :: Justia
Justia › US Law › Case Law › California Case Law › Cal. 3d › Volume 24 › Furey v. City of Sacramento
In these two cases, which have been consolidated for purposes of appeal, we face the question, among others, whether a city, [24 Cal. 3d 866] having participated with other public entities in the creation of a special sewer assessment district in a county area intended for transition to urban development, and later having annexed the area, may thereafter amend its general plan and enact an open space ordinance in a manner precluding certain of the owners of property subject to assessment from realizing all or substantially all benefits from the underlying public improvement for an indefinite period of time. We conclude that in the circumstances here alleged it may not, and that in the absence of appropriate reassessment or other relief being afforded, the amendment and ordinance may not be applied to such owners and their properties.
Plaintiffs appeal from judgments of dismissal entered following the sustaining of demurrers, without leave to amend, to their complaints seeking damages for inverse condemnation, declaratory and injunctive relief, and mandate. In the following statement of the facts we accept all properly pleaded allegations of the complaints as true for purposes of this appeal. (See, e.g., Serrano v. Priest (1971) 5 Cal. 3d 584, 591 [96 Cal. Rptr. 601, 487 P.2d 1241].)
The so-called Natomas area of Sacramento County (County) is an area of approximately 15 square miles, devoted primarily to agricultural uses, which is located to the north of the metropolitan area of the City of Sacramento (City). Since 1960, Lawrence E. Furey and his predecessor Joseph A. Maun, trustees, (Furey) have held title to approximately 1,157 acres of land in the portion of this area presently lying to the north of Interstate 880. Ernest E. Webber, Nellys F. Webber, and Robert E. Waller (Webber) have owned approximately 363 acres in the same portion of the Natomas area for a similar length of time. Beginning in 1961, and in light of government determinations on various levels contemplating the imminent and continuing transition of the entire Natomas area to urban development and uses, County, upon a finding of public interest and convenience, undertook the establishment of a special sewer assessment district therein under the provisions of the Improvement Act of 1911 (Sts. & Hy. Code, § 5000 et seq.), which district was to undertake all measures necessary to install various trunk sewer lines and a sewer treatment facility in the area. Said improvements were designed to provide adequate sewer disposal facilities for the anticipated residential and commercial use of over 4,000 acres of planned residential development, including homes, shopping centers and schools. City, within whose then boundaries some of the contemplated improvements [24 Cal. 3d 867] and benefits were to be installed, gave its formal consent, and on October 7, 1961, the Natomas area was annexed to City. In January 1962, by action of the board of supervisors of County, defendant Natomas Sanitation District of Sacramento County (District) fn. 1 was formed as a "county sanitation district" pursuant to the provisions of section 4700 et seq. of the Health and Safety Code and since that time has exercised the powers granted to such a district by the provisions of section 4738 et seq. of the same code; on the same date said district assumed ownership, control, management and supervision of the sewer facilities to be built. fn. 2
In 1970 the Legislature enacted comprehensive legislation directed to the preservation of open-space lands within the state. (Gov. Code, § 65560 et seq.) As amended Government Code section 65563 required [24 Cal. 3d 868] that every city and county (apparently including charter cities such as Sacramento -- see Gov. Code, §§ 65700, 65302, subd. (e)) by December 31, 1973, adopt a local open-space plan "for the comprehensive and long-range preservation and conservation of open-space land within its jurisdiction," and that an interim plan be adopted by August 31, 1972. Thereupon defendants City, County, and District met on numerous occasions for the purpose of complying with these requirements. These meetings were carried on with full knowledge of (1) the various existing plans affecting the Natomas area and contemplating its transition to urban use, and (2) the construction and assessment which had previously been carried on by District. Nevertheless it was determined that the Natomas area be included in the open-space plan. In 1972 City imposed a moratorium on building and development in the area, and on or about July 7, 1973, it adopted an "Open Space Element" to its general plan indicating that that portion of the Natomas area lying to the north of Interstate 880 was to be reserved for agricultural and open-space uses. This element provided: "Lands that are recommended for retention in the Open Space Plan as an agricultural preserve are located in the Natomas area north of Interstate 880. Of the total 6,934 acres within the City in this area, the 3,582 acres north of Del Paso Road are recommended for a permanent agricultural designation while the approximately 3,172 acres of agricultural land south of Del Paso Road are recommended for an agriculture-urban reserve designation. Lands designated for permanent agriculture are not anticipated, at the present rate of urban growth locally, to be required for urban land uses within the time span of the City's General Plan; while lands designated for agriculture-urban reserve could be needed in part or wholly for contiguous urban growth outward from the City core within the next twenty year period."
All of the lands here in question are within the agricultural reserve thus created. Approximately four-fifths of the Furey property lies within the "permanent agriculture" area; the remainder of the Furey property and all of the Webber property lies within the "agricultural-urban reserve" area. [24 Cal. 3d 869]
The lands here in question continue to be zoned agricultural and are used for agricultural purposes as they have at all times in the past. fn. 4 It is [24 Cal. 3d 870] alleged that defendants intend that such property shall forever be restricted to such uses, and that so long as the use of the property is so restricted the sewer improvements and facilities in question will be of no benefit to plaintiffs. The sewer improvements and facilities, including the various trunk sewer lines and the sewage treatment plant, are currently operational and in use to transport and treat sewer effluent produced by other citizens of defendants City and County. fn. 5 None of the sewage thus transported and treated is produced on the subject property. It is alleged that such transportation and treatment of sewage is for the benefit of the general public of defendants City and County.
The Furey complaint sets forth five causes of action. The first seeks damages for inverse condemnation based upon the difference between the value of the Furey property if used for residential or commercial purposes and its value if restricted to agricultural uses; alternatively it is alleged that defendants are estopped from denying plaintiff the right to use the subject property for residential or commercial purposes. The second, third, and fourth seek recovery of amounts paid or to be paid as principal and interest on the bonds issued to finance the subject improvements; again, theories of inverse condemnation and estoppel are relied upon, but it is also urged that unlawful assessment out of proportion to benefits accruing to assessed property has occurred. The fifth cause of action seeks a declaration that the open-space plan and zoning ordinance are void and unlawful and an injunction against actions preventing residential and commercial development. [24 Cal. 3d 871]
[2] Plaintiffs urge that they are entitled to damages for inverse condemnation owing to diminution in the value of their lands resulting from limitations upon its use imposed by City's amendment of its general plan and zoning ordinance. As we pointed out in the recent case of Agins v. City of Tiburon (1979) ante, page 266 [157 Cal. Rptr. 372, 598 P.2d 25], however, such relief is not available for these purposes. Rather the aggrieved landowner is limited to showing, through an action for declaratory relief or mandate, that the legislation or regulation in [24 Cal. 3d 872] question, viewed either on its face or as applied, is an invalid exercise of the police power in violation of the Fifth Amendment to the United States Constitution and article I, section 19, of the California Constitution. This, we held, may be shown only by demonstrating that the effect of the regulation "is to deprive the landowner of substantially all reasonable use of his property." (Id., at p. 277.) Plaintiffs have not alleged any such effect in the instant case. Rather they have alleged that their lands, which have for many years been used for agricultural purposes, must continue to be so used in the future as a result of City's actions. It cannot be said that agricultural use of lands long devoted to that purpose is other than a reasonable use. Accordingly plaintiffs have failed to allege facts entitling them to relief by way of declaratory relief or mandate on this basis.
It is clear from the foregoing that plaintiffs have not stated facts which, if shown to be true, would entitle them to relief by way of inverse condemnation or mandate on account of diminution in the value of their lands fn. 6 which is alleged to have been brought about by City's amendment of its general plan and zoning ordinance. This is not to say, however, that they are entitled to no relief whatsoever in the circumstances here presented, for the instant case involves an aspect which goes beyond the matter of mere diminution in the value of land due to reasonable regulation. If the facts herein are demonstrated at trial to be as alleged in the complaints, we are faced with a situation in which local government bodies, pursuing with commendable zeal the philosophy and purposes of one decade, have set into motion the machinery of public improvement in such a manner as to involve a relatively small number of property owners in the total financing thereof, only to reverse their field in the following decade and, pursuing with equal zeal the perhaps more enlightened philosophy and purposes of that later time, remove from some of those owners the ability to effectively utilize the improvement so created. Although as we have pointed out the need for government flexibility to meet the needs and requirements of each emerging generation precludes fulfilling, in all but the most extreme cases, the expectations of value brought about by earlier official moods and actions, [24 Cal. 3d 873] we think that entirely different considerations must govern when those moods and actions have operated to bring about substantial financial commitment on the part of taxpayers included in a special assessment district who are precluded by later governmental action from realizing substantially all special benefits generated by the district.
After providing for collection, payment, and enforcement (§ 5558) and the protection of outstanding bonds (§ 5559), the chapter goes on to consider the matter of refund. Section 5560 provides in relevant part: "Whenever prior to the confirmation of the reassessment any principal payments have been made on any assessment, or on any bond issue to [24 Cal. 3d 874] represent any such assessment, the owner of record of the property against which such assessment was levied ... shall be entitled to receive a refund of an amount of the difference between the original assessment and the reassessment in the proportion that such payments made by him bears to the original assessment, with respect to the lot or parcel of land for which such payments were made. The balance of any such appropriation, as determined by the reassessment, shall be credited pro rata to the bonds in payment thereof, applying such payment first to the interest due and then upon the principal. Thereafter the treasurer shall pay to the holder of each bond the payment so credited from the bond and assessment redemption fund. The treasurer is hereby authorized and directed to make all payments of refunds as authorized by this chapter." In subsequent sections provision is made for notice of refund (§ 5561), the filing of claims for refund (§ 5562), the limitation of actions to contest the validity of the reassessment (§ 5563), and meeting any reassessment costs (§ 5564). Finally, in section 5565, it is stated that "[t]he making of any reassessment pursuant to this chapter in any proceedings shall not constitute a bar or limit the right to make further reassessments as the legislative body may determine."
Defendants quite properly point out, however, that sections 5550, 5551, and 5551.5 speak in permissive terms, the latter two sections indicating that the legislative body "may, in its discretion" order reassessment to relieve owners. It also appears that City and County, by failing to act upon the Furey request that such a reassessment be undertaken, have essentially exercised their discretion in the matter by refusing relief. It has been held that a writ of mandate to compel reassessment will not lie in such circumstances. (Gordon v. City of Los Angeles (1944) 63 Cal. App. 2d 812, 816 [147 P.2d 961].)
[3] We made it clear in the Agins case, however, that a land-use regulation may not be applied to one otherwise subject to it if to do so would result in a taking of property without just compensation. [4] And as the United States Supreme Court said in Norwood v. Baker (1898) 172 U.S. 269 at page 279 [43 L. Ed. 443 at p. 447, 19 S. Ct. 187], "the exaction from the owner of private property of the cost of a public improvement in substantial excess of the special benefits accruing to him is, to the extent of such excess, a taking under the guise of taxation of private property for public use without compensation." (See also Spring Street Co. v. City of Los Angeles (1915) 170 Cal. 24, 30 [148 P. 217]; Harrison v. Board of Supervisors (1975) 44 Cal. App. 3d 852 [118 Cal. Rptr. 828].) Although it is true that in most cases the determination of [24 Cal. 3d 875] special benefit is made at the time of the confirmation and spreading of the assessment (see, e.g., Dawson v. Town of Los Altos Hills (1976) 16 Cal. 3d 676, 688-689 [129 Cal. Rptr. 97, 547 P.2d 1377]), we believe that in circumstances such as those here alleged, wherein both the undertaking of the public improvement and the action foreclosing any realistic access to the special benefits generated by it have resulted from government initiative, fn. 8 a present reexamination of the relationship between assessment and benefit is constitutionally required.
The cases of Reichelderfer v. Quinn (1932) 287 U.S. 315 [77 L. Ed. 331, 53 S. Ct. 177, 83 A.L.R. 1429] and Ritzman v. City of Los Angeles (1940) 38 Cal. App. 2d 470 [101 Cal. Rptr. 541], which are heavily relied upon by defendants, do not in our view support the contrary position urged by them. In those cases landowners who had been included in special assessment districts created for the purchase and maintenance of public parklands adjoining their land sought to enjoin the construction of improvements thereon which were alleged to be inconsistent with recreational uses. It was held that the special benefits accruing by virtue of the assessment did not include the right to insist against the government that the lands be forever used as a park rather than for some other purpose consistent with the public interest. (Reichelderfer, supra, at p. 321 [77 L.Ed. at p. 335]; Ritzman, supra, at p. 476.)
We quite agree with this conclusion. We are not here concerned, however, with a case in which one subject to a special assessment seeks to prevent a governmental entity from utilizing the subject improvements for some public purpose other than that contemplated at the time of the original assessment. The improvements here in question are currently operational for the very purpose for which they were designed and built, i.e., the transportation and treatment of sewage effluent. Many other properties within (if not without) the assessment district are presently enjoying their benefits. (See fn. 5, ante, and accompanying text.) And yet plaintiffs, who taken together were allocated substantially more than one-third of the total assessment (or an aggregate principal amount of well over $1.2 million), are to be wholly deprived of those benefits by the [24 Cal. 3d 876] operation of the land-use regulations here in question -- and this is to occur without their ever having entered into the actual enjoyment of any of these benefits.
A similar situation arose in the case of Smoke Rise, Inc. v. Washington Suburban San. Com'n. (D.Md. 1975) 400 F. Supp. 1369. There certain real estate developers sought to challenge the constitutional and statutory validity of various sewer hookup moratoria. It was held that the moratoria, which resulted from an order of the state department of health, were constitutional in all respects but that the developers, who were subject to a front foot benefit assessment for the construction of sewer lines and facilities, were deprived of due process by a requirement that any application for exemption from the assessment be made [24 Cal. 3d 877] contemporaneously with the notice of assessment. "In the view of this Court," it was held, "it is inconsistent with basic notions of fair play and due process to say that a person whose property was assessed ... in 1968 cannot apply for and receive in 1972 an exemption from the front foot benefit charge as a result of the Secretary's 1970 moratoria orders, which orders could not reasonably have been anticipated in 1968." (400 F.Supp. at p. 1394.)
[6] It remains to consider the remedy which is appropriate in the circumstances. As we have indicated above, plaintiffs have failed to allege facts which would entitle them to damages by way of inverse condemnation -- either by virtue of diminution in the value of their lands as a result of City's open-space regulations or for limitation of their asserted right of access to the improvements in question. (See fn. 6, ante, and accompanying text.) We have also explained that they are not entitled to relief from the offending regulation by way of declaratory relief or mandate due to limitations imposed thereby on the uses to which they may put their lands. We have concluded, however, that if the facts are shown to be as alleged they should be entitled to the latter form of relief on other grounds -- i.e., the effect of those same regulations upon plaintiffs' ability to realize the special benefits generated by the assessment district in which they have been included and to which they have substantially contributed. We hold, therefore, that if the allegations made in the complaints before us are demonstrated at trial, relief would lie by way of [24 Cal. 3d 878] declaratory relief or mandate precluding the application of the subject land-use regulations to plaintiffs. We also believe, however, that prior to the issuance of any judgment the trial court should afford defendants a reasonable opportunity to make use of the reassessment procedures to which we have adverted above (see text accompanying and following fn. 7, ante) or to take other appropriate action directed toward ameliorating in equitable fashion the gross inequities which here appear. fn. 9 Any such action should be taken into account by the trial court in its final determination.
FN 1. In the Webber action the district is referred to as the Natomas Sewer Assessment District rather than the Natomas Sanitation District of Sacramento County. It was indicated at oral argument that these two districts are one and the same.
FN 2. In October 1974, defendant Sacramento Regional County Sanitation District assumed partial ownership, management and control of the subject sewer facilities and also agreed to assume all prior and subsequent liabilities of District. For convenience, hereafter both districts will be referred to collectively.
FN 3. It is alleged in the Furey complaint that the Fureys have paid over $502,000 in principal and $324,000 in interest (or a total of approximately $826,000) on their bonded obligation. The Webber complaint does not allege the amount paid by them to the date of filing. In their answer to the petition for hearing before this court the Webbers state that a total of over $350,000 has presently been paid.
FN 4. Defendants permitted Webber to develop a certain portion of the affected property as a mobile home park in 1970. This portion of the property, which presently utilizes the subject sewage facilities, is apparently not involved in this litigation.
FN 5. The Sacramento Area Regional Planning Commission's 1974 Water and Waste Management Plan and Program, of which we take judicial notice (Evid. Code, § 452, subd. (b)), states at page 34 that in 1974 the Natomas Treatment Facility was processing 900,000 gallons of waste water per day.
FN 6. Nor do we believe that there is any merit to plaintiffs' strenuous arguments by which they, drawing an analogy to certain land access cases (e.g., Jones v. People ex rel. Dept. of Transportation (1978) 22 Cal. 3d 144, 151 [148 Cal. Rptr. 640, 583 P.2d 165]), urge that they are entitled to damages for inverse condemnation of their asserted right of access to the improvements in question. Even if we assume, for purposes of argument, that such an analogy is sound, the fact remains that plaintiffs have access to the subject improvements. Their true complaint is that they have not been permitted to utilize their lands in a manner which would allow them to make the maximum use of that access.
FN 7. Hereafter, unless otherwise noted, all section references are to the Streets and Highways Code.
FN 8. To be distinguished in this respect are cases in which the construction of public improvements is undertaken on the initiative of the property owner himself. (See, e.g., Wat. Code, §§ 30200 et seq., 34150 et seq.) In such a situation, barring strong evidence of governmental inducement or promotion, the property owner stands in the position of a volunteer who, in the event of intervening regulation barring use of the improvement in the public interest, cannot be heard to complain of the loss of his investment. (See and cf. Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal. 3d 785, 789-790 [132 Cal. Rptr. 386, 553 P.2d 546].)
FN 9. Any such reassessment, of course, would be without prejudice to further reassessment in light of future changes in planning policy having the effect of permitting plaintiffs and others similarly situated to derive practical benefit from the subject improvements. (See § 5565.)