Petition for Writ of Certiorari — Court House Plaza Co. v. City of Palo Alto

Supreme Court brief1985

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85-287 ELL

AUG 20 1985

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

COURT HOUSE PLAZA COMPANY,

Petitioner,

CITY OF PALO ALTO, ET AL.,

Respondents

On Petition From The Court of Appeal

Of The State of California, Sixth Appellate District

PETITION FOR WRIT OF CERTIORARI

HAROLD C. HOHBACH

FLEHR, HOHBACH, TEST, ALBRITTON & HERBERT

Suite 3400

Four Embarcadero Center

San Francisco, California 94111

Telephone: 415/781-1989

ROBERT E. CARTWRIGHT

CARTWRIGHT. SUCHERMAN, SLOBODIN &

FOWLER, INC.

101 California Street, 26th Floor

San Francisco, California 94111

Telephone: 415/433-0446

Attorneys for Plaintiff and Petitioner

August 18, 1985

QUESTIONS PRESENTED

1. Should this Court now resolve the division among the

state courts and federal courts as to whether the fifth

amendment to the United States Constitution requires a

monetary remedy for inverse condemnation through

excessive land-use regulation?

2. Whether the holding of the California Supreme Court, in

Agins v. City of Tiburon, 24 Cal.3d 266 (1979), affd.,

on other grounds, 447 U.S. 255 (1980), which denied

the remedy of damages for inverse condemnation, is still

viable in light of subsequent rulings by this Court.

a Whether the definition of “vested right” used by the

California courts in this case satisfies the substantive due

process requirements of the fifth and fourteenth amend-

ments to the United States Constitution.

PARTIES: INDIVIDUAL RESPONDENTS

The individual parties not named as Defendants and

Respondents in the caption of this Petition for Writ of

Certiorari are STANLEY R. NORTON, BYRON D. SHER,

FRED S. EYERLY, ROY L. CLAY, KIRKE W. COMSTOCK.

SCOTT T. CAREY, JOHN J. BERWALD, ANNE BR.

WITHERSPOON, JOHN V. BEARS, Councilmen PETER R.

CARPENTER, MARY GORDON, WILLIAM E. GREEN, JAY

W. MITCHELL, EMILY M. RENZEL, ANNE STEINBERG,

Planning Commissioners, STAN J. NOWICKI, Chief Building

Inspector, JAMES O. GLANVILLE, Zoning Administrator,

NAPTHALI H. KNOX, Director of Planning and Community

Environment, ROBERT K. BOOTH, JR., City Attorney and

LOUIS B. GREEN, Assistant City Attorney.

TABLE OF CONTENTS

Page

Ties Ce Ree i oe Se ine WA eid as iv

FRETS, Cs GI oS ecb seca wae esasceases l

CONSTITUTIONAL AND STATUTORY

FS VIE CEN WE TOE ov ccna icntasevcacns ae

SUM EOEITE Ge COU GI. & ew aes be bews ocd an w owen’ 2

REASONS FOR GRANTING WRIT OF

eg | rr eer ee ye ara ey ee ee 6

1. THE CALIFORNIA COURT OF APPEAL,

RELYING UPON AGINS V. CITY OF

TIBURON, 24 CAL.3D 266 (1979)

AFFD. 447 U.S. 255 (1980) HAS KULED

THAT DAMAGES ARE NOT AVAILABLE

AS A REMEDY IN AN INVERSE CONDEM-

NATION SUIT UNDER THE FIFTH AND

FOURTEENTH AMENDMENTS TO THE

UNITED STATES CONSTITUTION, IN

DIRECT CONFLICT WITH THE DIS-

SENTING OPINION IN SAN DIEGO

GAS & ELECTRIC CO. V. CITY OF

SAN DIEGO, 450 U.S. 621 (1981), DECI-

SIONS OF OTHER STATE COURTS OF

THE LAST RESORT, AND THE DECI-

SIONS OF THE NINTH AND FIFTH

CIRCUITS OF THE UNITED STATES

COMME Gir APO FA kod pe es scans 6

II. THE CALIFORNIA COURT OF APPEAL

HAS DECIDED THAT PETITIONER HELD

NO VESTED RIGHT IN PHASE TWO OF

ITS PROJECT IN CONFLICT WITH CONTROL-

LING DECISIONS OF THIS COURT ON THE

DEFINITION OF VESTED, PROPERTY

RIGHTS UNDER THE FIFTH AND FOUR-

TEENTH AMENDMENTS ................... 10

ill

TABLE OF CONTENTS (Continued)

Il]. THIS CASE IS RIPE FOR ADJUDICATION

IN THIS COURT. NO VARIANCE WAS

NEEDED OR OBTAINABLE UNDER THE

ORIGINAL ZONING OF PETITIONER’S

PROJECT, AND NO INVERSE CONDEM-

NATION PROCEEDING FOR DAMAGES

WAS OR IS AVAILABLE AND ADEQUATE

RPURPUEEE GCPAREE PURINEAR LAW ww ees 15

Cee CALE cha hawk sca cuvncessecesva 16

TABLE OF AUTHORITIES CITED

Federal Cases

American Savings & Loan Assoc. v. County of Marin,

Ee bo Le | rarer 8,12

Court House Plaza Company v. City of Palo Alto,

et.al. No. 81-404, 454 U.S. 1074, cert. denied,

ee kt ak weer eek ea be KM 4,13

Hernandez v. City of LaFayette, 643 F.2d 1188

(Sth Cir. 1981, cert. denied, 455 U.S. 907

(1982), affd. after remand, 699 F.2d 734(1983)...... »

In re Air Crash In Bali, Indonesia on April 22, 1974,

ee ee Ce Cs PUI Ch vane kecvavesedsans 8

Kaiser-Aetna v. United States, 444 U.S. 164(1979)........ 12

Martino v. Santa Clara Valley Water District, 703

me Eo tC RR ee ee ee 8

Penn Central Transportation Co. v. City of New York,

ee IES Wako cea HRM eh wR OK ae08 11,12,14

San Diego Gas & Electric Co. v. City of San Diego,

ee ES neg nn ca Cec an uh ak oan s 7,8,9,10

Williamson County Regional Planning Commission v.

Hamilton Bank of Johnson City,__.. U.S. cs

Pe es SE 9. 6 Ck KAA Mees ba KSnen KA 7,14,15

California Cases

Agins v. City of Tiburon, 24 Cal.3d 266 (1979),

— Mg 8 ee re 5,6,7,8,10

Aptos Seascape Corp, v. County of Santa Cruz,

138 Cal.App.3d 484 (1982), appeal dismissed

, U.S. S Ste Bi), Ser 10

Court House Plaza Company v. City of Palo Alto,

117 Cal.App.3d 871, 173 Cal.Rptr. 161 (1981)

cert. denied, 454 U.S. 1074 (1981)............... 4,13

TABLE OF AUTHORITIES CITED (Continued)

OTHER CASES Pages

Burrows v. City of Keene, 432 A.2d 15 (N.H. 1981). ....... 9

Eck v. City of Bismarck, 283 N.W. 2d 193 (N.D. 1979) ..... 9

Ripley v. City of Lincoin, 330 N.W. 2d 505 (N.D. 1983)... .10

Sheerr v. Township of Evesham, 184 N.J. Super. 11,

es I a ny LNB Speers aE ae i)

Zinn v. Wisconsin, 112 Wis.3d 417, 334 N.W. 2d. 61 (1983). .10

CONSTITUTION

United States Constitution

yy 8 ee eee re 1,7,8,10,13.14

Pees CII 6. oc Sas eka Neuen eee e ee 1,10

ee We On chine dee eee Cee 10

STATUTES

Federal

ie Oe i SE BON oak oh oe eine eee eee 8

City of Palo Alto

Title 18 Zoning (Various Sections)............... 4,15

Ordinance No. 2224 (The “P-C Ordinance”). . . 2,11,13,16

JURISDICTIONAL GROUNDS

The original complaint for damages in this action was filed

on September 22, 1977 in the Superior Court of the State of

California. A first amended complaint (Appendix Al) was

filed on February 22, 1982. Defendants’ demurrer and/or

motion to strike petitioner’s first amended complaint was

granted on June 17, 1982 (Appendix A3).

Petitioner’s notice of appeal to the California Court of

Appeal was timely filed on August 16, 1982. The opinion of the

California Court of Appeal, Sixth District (Appendix B1) was

issued on May 3, 1985. Petitioner timely filed a Petition for

Rehearing. The denial of the Petition for Rehearing (Appendix

B2) by the California Court of Appeal, Sixth District, was filed

on May 22, 1985.

A Petition for Review was filed with the California

Supreme Court on June 12, 1985. The denial of the Petition for

Review by the California Supreme Court was filed on July 31,

1985 (Appendix C1).

This Court has jurisdiction of this Petition under 28 U.S.C.

Section 1257(3).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

1. United States Constitution, Amendment V (Appendix E1).

2. United States Constitution, Amendment XIV, Sections |

and 5 (Appendix E2).

STATEMENT OF THE CASE

A. History of the City’s Regulatory Action.

Petitioner Court House Plaza Company (“CHP”) is a

limited partnership and the successor to an earlier partnership

that owned and undertook to develop the property at issue.

On December 28, 1964, the City of Palo Alto adopted a

planned development zoning ordinance, Ordinance No. 2224

(the “?-C Ordinance’) (Appendix E3) which allowed the

construction of professional and commercial office space on

CHP’s Palo Alto property. The P-C Ordinance approved by

incorporation CHP’s complete plans for cor<*suction of a ten-

story office building on the site. CHP’s plans included detailed

drawings illustrating the location, elevation, and floor plan of a

proposed ten-story office building, an associated multi-story

parking garage, and other site accoutrements such as landscaping.

The P-C Ordinance included a proposed development

schedule. Under the development schedule, CHP was required

to start construction of Phase One, consisting of the first four

stories of the office building and certain levels of a parking

garage, within two years of the City’s approval of the P-C

Ordinance. By October, 1976, CHP was to commence construc-

tion of the remaining six stories of the office building (Phase

Two) as well as additional parking garage levels.

The development schedule was devised in order that CHP

and the City could coordinate the completion of CHP’s ten-

story office building with the growth in demand for commercial

office space that the City expected. Originally, economic

feasibility was to dictate when ultimate completion would

occur.

CHP began and timely completed the first four floors of its

ten-story office building by August of 1967. In constructing

that Phase One, CHP actually began physical construction of

Phase Two.

The foundation and structural steel for the first four floors

had to be constructed at great additional expense to carry the

weight of the planned six additional floors for Phase Two. In

addition, two extra elevator shafts and an interior smoke-proof

tower were provided in the first four stories, even though they

were only required for the additional six stories of Phase Two.

Other systems such as the water, sewer, and electrical were all

designed to accommodate both the first four stories of Phase

One and the remaining six stories of Phase Two. In addition, the

heating and ventilating system and the elevator machinery for

the first four floors were placed in basement mechanical rooms

at great added cost instead of on the roof. This was done so that

the six stories could be added without interrupting services to

the earlier-built four stories. CHP spent about $500,000 in 1967

on those improvements to accommodate Phase Two.

Upon leasing the first four stories, CHP ordered and had

fabricated at a cost of approximately $450,000 two additional

elevators and the structural steel needed to complete the six

stories of Phase Two. In March of 1970, during fabrication of

the elevators and steel, use and building perinits for the addi-

tional six stories of Phase Two were issued. Erection of the

structural steel and installation of the elevators for the addi-

tional six stories, however, did not take place because of inabili-

ty to obtain construction financing at that time after issuance

of the permits.

In 1973 a 50-foot height limitation was enacted for all

buildings in Palo Alto except those in planned community (P-C)

districts. Hence, in theory, CHP’s property was exempt.

Well before expiration of the development schedule on

October 31, 1976, CHP renewed its efforts to complete Phase

Two. However, due to inaction and dilatory tactics by the City,

CHP was unable to obtain use and building permits for the six

additional stories; even though like building and use permits had

earlier been granted.

Because of this inaction and numerous delays and obstruc-

tive acts by the City and its officials, CHP was forced to apply

for a one-year extension of the development schedule in August

of 1976, three months before the schedule would expire. At all

relevant times section 18.68.080D (Appendix E4) of Palo Alto’s

Municipal Code provided that the Planning Commission could

recommend extension of P-C development schedule for “‘good

cause shown by the property owner in writing’’. CHP believed it

had such good cause. In practice, the City had routinely granted

all such requests for extension of P-C development schedules. In

fac’, based upon a letter written on May 23, 1968 by the City

Attorney (Appendix F2), CHP reasonably expected that it

could also obtain such an extension upon a showing of good

cause. However, the Planning Commission refused to recom-

mend an extension after being advised by Assistant City

Attorney that changed circumstances such as the controversial

50-foot height ordinance couid be considered in determining

whether there was good cause.

On appeal the City Council denied CHP any extension.

CHP felt it possessed good cause for an extension of the develop-

ment schedule based not only upon economic circumstances

that surrounded completion of Phase Two, but also upon the

dilatory and obstructive acts of City officials.

In order to redress the failure of the City to reissue use and

building permits for Phase Two and the failure to extend the

development schedule, CHP filed a mandamus action (CHP J) in

a California trial court that eventually resulted in an appellate

decision in Court House Plaza Company v. City of Palo Alto,

117, Cal.App.3d 871, 173 Cal.Rptr. 161 (1981), cert. denied,

454 U.S. 1074 (1981). That case held that the City’s denial of

an extension of the development schedule and its failure to

issue use and building permits for the add‘tional six stories was

neither unreasonable, arbitrary nor discriminatory. Thus the

Court of Appeal upheld the City’s decision.

Shortly after filing the mandamus action (CHP /) in

February of 1977, CHP filed an independent action (CHP J/) in

the same trial court to preserve its rights to damages. Respond-

ents were given an open-ended extension of time to answer the

CHP II complaint, pending the outcome of the CHP]

mandamus appeal.

After CHP J became final, Respondents finally responded

to the CHP J] complaint by demurring to it. The demurrer was

granted with leave to amend.

CHP then filed its first amended complaint (Appendix A1)

alleging inverse condemnation, violation of civil rights, and

conspiracy and seeking damages. All federal causes of actions

were reserved for hearing in a parallel United States federal

district court action between these parties, U.S. District Court

(N. Cal.) No. 81-404, 454 U.S. 1074 cert. denied, November 30,

1981 (“CHP IIT’).

Respondents’ second demurrer (Appendix A2) to the

amended complaint was sustained wi‘hout leave to amend. In

its decision (Appendix A3) the trial -ourt held that CHP was

not entitled to compensable damages under the theory of

inverse condemnation alleged in its second cause of action and

the CHP I] suit was barred by res judicata.

This was the determination from which CHP appealed. The

California Court of Appeal for the Sixth District in its opinion

(Appendix B1) afiirmed the decision of the trial court and

concluded under Agins v. City of Tiburon, 24 Cal.3d 266,

272-277 (1979). affd. on other grounds, 447 U.S. 255 (1980).

that:

1. When excessive zoning regulation has deprived a landowner

of substantially all reasonable use of his property, the land-

owner’s remedy is not damages for inverse condemnation,

but either an action in mandate or for declaratory relief.

Appendix B1, p. B-4.

The prior mandamus action (CHP J) determined implicitly

that the City had taken no vested property right from CHP

to construct Phase Two of the office building on its

property. CHP I is res judicata, even though CHP had

originally sought a different form of relief there. Appendix

Bl, p. B-8.

A Petition for Review was filed with the California

Supreme Court on June 12, 1985. The denial of the Petition for

Review by the California Supreme Court was filed on July 31,

1985. (Appendix C1).

REASONS FOR GRANTING THE

WRIT OF CERTIORARI

I. THE CALIFORNIA COURT OF APPEAL, RELYING

UPON AGINS V. CITY OF TIBURON, 24 CAL.3D 266

(1979), AFFD. 447 U.S. 255 (1980) HAS RULED THAT

DAMAGES ARE NOT AVAILABLE AS A REMEDY IN

AN INVERSE CONDEMNATION SUIT UNDER THE

FIFTH AND FOURTEENTH AMENDMENTS TO THE

UNITED STATES CONSTITUTION, IN DIRECT CON-

FLICT WITH THE DISSENTING OPINION IN SAN

DIEGO GAS & ELECTRIC CO. V. CITY OF SAN DIEGO,

450 U.S. 621 (1980), DECISIONS OF OTHER STATE

COURTS OF THE LAST RESORT, AND THE DECISIONS

OF THE NINTH AND FIFTH CIRCUITS OF THE

UNITED STATES COURT OF APPEALS.

1. Agins Incorrectly Eliminated All Actions for Inverse

Condemnation Challenging Local Land-Use Decisions in

California.

In Agins v. City of Tiburon, 24 Cal.3d 266, 598 P.2d 25,

157 Cal.Rptr. 372 (1979), affd. on other grounds, 447 U.S. 255

(1980) (“‘Agins”’), the California court eliminated all actions for 7

inverse condemnation challenging local land-use decisions. :

Instead, the Agins court found a «as for mandamus and/or

declaratory relief to be constitutionally sufficient remedies for

the aggrieved landowner. The complaint was dismissed for

failure to state facts sufficient to constitute a cause of action.

While that narrow holding of dismissal was affirmed by

this Court, this Court did not reach the question of remedy

under the fifth amendment. “Because no taking has occurred,

we need not consider whether a state may limit the remedies

available to a person whose land has been taken without just

compensation.’ 447 U.S. at 260.

Since Agins this Court has hesitated to address that question

in a series of cases held not ripe for adjudication on their

constitutional merits. San Diego Gas & Electric Co. v. City

of San Diego, 450 U.S. 621 (1981) (‘San Diego G. & E.”’) (lack

of final judgment below); Williamson County Regional Planning

Commission v. Hamilton Bank of Johnson City, U.S. —__.,

105 §.Ct. 3108 (1985) (“Hamilton Bank’) (failure to exhaust

available state remedies).

2. The Prohibition on Inverse Condemnation Damages is

Contrary to Federal Law.

Admittedly, this Court has not squarely decided whether a

state court must entertain claims for monetary compensation,

as opposed to declaratory and injunctive relief, in cases under

the fifth amendment. However, this case presents that question

squarely to this Court because Petitioner has received a final

judgment and has unquestionably exhausted every administrative

and judicial remedy now available in California.

In San Diego G. & E., supra, the four-justice plurality

chose to leave the issue of monetary compensation undecided

strictly for jurisdictional reasons (lack of final judgment below)

under the peculiar procedural circumstances of that case. The

four dissenters, who would have reached the merits of the case,

concluded that the fifth amendment requires monetary reme-

dies for de facto takings by police power regulation. Justice

Brennan, who authored the dissenting opinion in San Diego G.

& E., specifically so stated. Indeed, he went on to outline a

measure of interim monetary damages to be applied in connec-

tion with invalidation of the offending regulation.

Justice Rehnquist, concurring with the plurality opinion,

wrote separately and emphasized that he “‘would have little

difficulty in agreeing with much of what is aid in the dissenting

opinion... ,’” but that he disagreed with its conclusion that the

court had jurisdiction to hear the case. 450 U.S. at 633-635.

In effect, therefore, a majority of five justices in San Diego

G. & E. agreed that government must pay just compensation for

the period commencing on the date that its regulation first

effected the “taking” and ending on the date the government

chooses to rescind or otherwise amend the regulation. Id., at

653 (Brennan, J., dissenting).

The federal courts sitting in California have read San Diego

G. & E. as disapproving of Agins. The Ninth Circuit Court of

Appeals, for example, reversed a summary judgment decision

against a landowner suing a city and water district in California

for damages under 42 U.S.C. section 1983 because the court

felt that “...the present vitality of this aspect of Agins [the

invalidation remedy] has been substantially undercut by Justice

Brennan’s dissenting opinion in San Diego Gas and Electric Co.

v. City of San Diego...’’ Martino v. Santa Clara Valley Water

District, 703 F.2d at 1141 (1983); see also, American Savings &

Loan Assoc. v. County of Marin, 653 F.2d 364, 372 (9th Cir.

1981): Jn re Air Crash In Bali, Indonesia on April 22, 1974, 684

F.2d 1301, 1311 n. 7 (9th Cir. 1981); Hernandez v. City of

LaFayette, 643 F.2d 1188, 1198-1200 (Sth Cir. 1981), cert.

denied, 455 U.S. 907 (1982), affd. after remand, 699 F.2d 734

('983).

Yet uncertainty remains hanging over lower federal courts

as to this Court’s anticipated, but yet undelivered, opinion on

remedies under the ‘taking’ clause of the fifth amendment. That

uncertainty has become ominous by virtue of the Court’s indica-

tion that, but for lack of finality, the issue would hove been

addressed in Hamilton Bank, supra.

3. The Prohibition on Inverse Condemnation is contrary to

the decisions of the Courts of last resort of other states.

Other jurisdictions have rejected the California Supreme

Court’s ruling in Agins. The New Hampshire Supreme Court’s

decision in Burrows v. City of Keene, 432 A.2d 15 (N.H. 1981),

for example, flatly rejected the rule of Agins. When the defen-

dant City of Keene attempted to assert the defense that the

developer could not recover damages for inverse condemnation

but must be satisfied only with the remedies of mandamus

and/or declaratory relief, the court stated that “we reject this

approach out of hand.” /Jd., at 20. The New Hampshire court

continued:

We agree with Justice Brennan that it is always open to the

governmental entity involved to rescind or repeal the offend-

ing regulation and thus avoid payment of damages for

inverse condemnation from that point on [citation].

Until that is done, however, the owner’s property has been

taken during the interim and he is entitled to compensa-

tion for that taking. [citation]. Limiting the landowner to

actions which only invalidate the offending regulation will

encourage municipal planners and other public officials to

attempt to throw the burdens of accompanying “‘progress”’

upon individual land owners rather than on the public at

large. The allowance of damages for inverse condemnation

during the period of the taking, however, should encourage

such officials to stay well on the constitutional side on the

line, San Diego Gas and Electric Co. v. City of San Diego,

supra, at 1308 n. 26 (Brennan, J. dissenting), and should

also discourage harassment of property owners by repeated

amendments of zoning regulations and the enactment of

new ones.

Id. at 20. See, also, Eck v. City of Bismarck, 283 N.W.2d 193,

200-201 (N.D. 1979) (refusing to disallow all actions for inverse-

condemnation damages). Sheerr v. Township of Evesham, 184

N.J. Super, 11, 445 A.2d 46, 53-54, 74-75 (1982) (awarding

damages and apparently rejecting the California Agins decision).

Clearly, the present stance of the California state courts,

on this constitutional issue is diametrically opposed to that of

the dissent in San Diego G. & E., many lower federal courts,

and the courts of last resort of other states. See Zinn v. Wisconsin,

112 Wis.3d 417, 334 N.W. 2d 61, 73 (1983) (approving dissent

in San Diego G. & E.); Ripley v. City of Lincoln, 330 N.W.3d

505 (N.D. 1983) (same).

Under the supremacy clause of the United States Constitu-

tion Article VI, clause 2, precedent of this Court should control

the California Supreme Court’s interpretation of the fifth

amendment. However, until this Court takes a definitive stand

on this issue, the courts of California will continue to stray

from the requiremenis of constitutional law, and plaintiffs in

California land-use cases will continue to be deprived of their

constitutional rights and remedies. See, e.g. Aptos Seascape

Corp. v. County of Santa Cruz, 138 Cal.App.3d 484, 493-494

(1982), appeal dismissed 104 U.S. 53 (1983).

Il. THE CALIFORNIA COURT OF APPEAL HAS DECIDED

THAT PETITIONER HELD NO VESTED RIGHT IN

PHASE TWO OF ITS PROJECT IN CONFLICT WITH

CONTROLLING DECISIONS OF THIS COURT ON THE

DEFINITION OF VESTED PROPERTY RIGHTS UNDER

THE FIFTH AND FOURTEENTH AMENDMENTS.

1. Petitioner held Vested Rights in Phase Two.

The Court of Appeal agreed with the decision of the trial

court in holding that Petitioner’s rights in Phase Two of its

project had not vested.

The Court of Appeal misinterpreted and misapplied

eR am |

The most significant precedent is Penn Central Transporta-

tion Co. v. City of New York, 438 U.S. 104 (1978). That deci-

sion recognized the chaotic state of the law on the ‘taking’

question. To help provide the courts with guidance as to what

constitutes a taking and when a vested right should be recog-

nized, this Court aritculated a test called the “‘reasonable invest-

ment-backed expectation test” consisting of three components:

1. The owner’s reasonable reliance upon a previous

regulatory condition or official course of conduct;

2. The owner’s investment in an existing use which the

regulation curtails; and

3. An unusually unbalanced distribution of benefits

(upon others among the public) and of burdens (upon

this and/or other owners) accomplished by the regula-

tions. See 438 U.S. at 124-5.

In this case CHP possessed a reasonable investment-backed

expectation in being allowed to complete Phase Two. CHP had

expended almost one million dollars in reliance upon the City’s

earlier promises that Phase Two could be completed according

to the P-C development schedule. The loss of this money,

however, pales in comparison to such damages as lost profits on

the rental income CHP would have received had the City not

stopped CHP’s project. Nowhere in the record below did the

California Courts identify, weigh, or balance any benefit the

city could expect to receive for precluding CHP from complet-

ing Phase Two. The record is only replete with the burden that

CHP has been forced to bear.

Unlike the plaintiff in Penn Central, CHP had received an

initial approval for development within the ‘air space’ above the

four-story building in Phase I. Indeed, the City of Palo Alto, by

virtue of the P-C Ordinance, was responsible for severing the ‘air

space’ within Phase Two. Hence it is not CHP who has created

an artificial division of the property into segments. The reasoning

of Penn Central leads to finding a ‘taking’ here. American

Savings & Loan Assoc. v. County of Marin, 653 F.2d 364 (9th

Cir. 1981).

Critical to this Court’s decision was the fact that, while the

City of New York could stop Penn Central from building a 50-

plus story office building, the City of New York would still

have allowed construction of a 20-story addition to the current

building on the site. Jd., at 136-137. Moreover, the City would

also have allowed Penn Central to build its proposed 50-story

plus building on at least eight parcels in the vicinity of Penn

Central’s property. Here CHP has received no compensatory

development rights at all for the air rights for the six additional

stories.

The City of Palo Alto has, in contrast, entirely precluded

CHP from building any additional stories. It also has not offered

any form of compensation that could work as a set-off to the

damage CHP suffered due to Palo Alto’s reprehensible actions.

This Court has extended Penn Central to physical invasions

by government.

In Kaiser Aetna v. United States, 444 U.S. 164 (1979), a

Hawaii residential marina was privately developed by dredging

and filling a pond. The federal government then declared the

pond to be a navigable waterway and asserted public right of

access. Applying the three-part Penn Central test, this Court

found a taking. One of the key findings was the fact that the

developer had asked the Corps of Engineers whether the dredg-

ing of an existing shallow channel wouid turn its private proper-

ty into a navigable waterway. 444 U.S., at 168. The Corps said

it would not. Thus, when the government attempted to assert

its jurisdiction over the waterway at a later date, it had to pay

compensation.

The parallel with the present case is clear. Just as the

developer in Kaiser Aetna relied on the word of the Corps of

Engineers, CHP relied on the past conduct and express assur-

ances of the City of Palo Alto that it would be able to proceed

with Phase Two. Indeed, CHP relied upon the City’s own P-C

Ordinance. CHP relied on City assurances when it completed

Phase One to accommodate Phase Two and also when preparing

plans for Phase Two’s additional six stories, purchasing the

structural steel, and the two elevators for the same. CHP’s rights

were further vested when a building permit issued for Phase

Two. The City could not renege after it knew CHP had spent

nearly $1,000,000 in reliance on the City’s assurances to

complete Phase Two.

The definition of ‘‘vested rights” for the purposes of a

“taking” analysis under the fifth amendment to the United

States Constitution is an important federal question to which

the conclusions of the California Courts have given a misguided

answer. Unless this Court corrects the aberrant position of the

California courts on this issue, plaintiffs in California land-use

cases will continue to be deprived of their constitutional right

to substantive due process.

2. The Doctrine of Res Judicata Should Not Be Applied to

Parrallel Actions which seek different remedies where one

of the actions was a suit for mandamus which was decided

on an incorrect analysis of ‘vested rights”.

The California Court of Appeal stated: “‘the prior appellate

opinion shows that a central issue was whether the developer

had acquired a vested right to building and use permits. (Court

House Plaza Co. v. City of Palo Alto, supra, 117 Cal.App.3d

871, 884-887.) Appendix B1, p. B-6.

So the erroneous conclusion of the California trial court in

CHP | in regard to the “‘vested rights” question has been used to

block any substantive review of the question of damages for

inverse condemnation in this case.

CHP’s right to damages for inverse condemnation was not

and could not have been determined in CHP / since while that

mandamus action was pending, such a cause of action did not

exist in California. As the California Court of Appeal itself

noted in referring to CHP /: “.. . [d] amages were never prayed

for in the petition nor did the trial court reach the issue of the

availability of damages for inverse condemnation.” Appendix A,

slip opinion, pp. 10-11. Inconsistently with that perception, the

California Court of Appeal proceeded to affirm the dismissal of

CHP’s complaint on the ground of res judicata.

This Court’s reassertion of federal ‘takings’ law made

possible the reactivation of CHP JJ. Every precedent in this

Court cited in the Petition was handed down after the trial

court’s judgment in CHP J (except only Penn Central, decided a

few months earlier).

Only by presuming that Petitioner’s fifth amendment

claim had been earlier adjudicated in CHP /, under the amor-

phous rubric of ‘“‘vested rights,’ could the Court of Appeal

have reached its decision with confidence. But, as stated above,

the ‘vested right’ determination in CHP / did not derive from

any constitutionally-sufficient ‘taking’ analysis. Hence any

Suggestion that CHP J gave Petitioner its day in court on the

fifth amendment issue presented here cannot endure the test of

history, truth, and legal analysis.

Any determination of Petitioner’s “vested rights” in CHP /

could not possibly constituted a ‘taking’ analysis complying

with this Court’s criteria. This Court’s opinion in Hamilton

Bank reiterated the two main factors in the analysis, as defined

in Penn Central, 438 U.S., at 124, and subsequent decisions:

““’.. this Court consistently has indicated that among the

factors of particular significance in the inquiry are the economic

impact of the challenged action and the extent to which it

interferes with reasonable investment-backed expectations.”

Hamilton Bank, __., U.S. at _, 105 S.Ct., at 3119. Nothing of

the sort occurred in CHP J, because there the trial court ruled

on the question of ‘vested rights’ mainly to fix the standard of

review for mandamus. Nothing in the record before the Court

POLS ae OT th NT lt IR eS Ot ease

of Appeal in this case warrants any other conclusion. Evidence

of a constitutionally-sufficient ‘taking’ analysis can nowhere be

found.

A definitive statement by this Court as to the due process

rights of landowners to damages for the loss of property defined

“vested rights’ in inverse condemnation suits is necessary in

order to avoid the inequitable application of the doctrine of res

judicata in this case.

Unless the judgment of the California Court of Appeal is

reversed, Petitioner will never have an opportunity to present its

claim for damages to any court disposed to recognize and to

rule fairly on such a claim.

Il]. THIS CASE IS RIPE FOR ADJUDICATION IN THIS

COURT. NO VARIANCE WAS NEEDED OR OBTAIN-

ABLE UNDER THE ORIGINAL ZONING OF PETITION-

ER’S PROJECT, AND NO INVERSE CONDEMNATION

PROCEEDING FOR DAMAGES WAS OR iS AVAIL-

ABLE AND ADEQUATE UNDER CALIFORNIA LAW.

In this Court’s recent opinion this Court stated that before

a claim may be made the property owner must first have

“... unsuccessfully attempted to obtain just compensation

through procedures provided by the State for obtaining such

compensation ...”” Hamilton Bank, U.S., at , 105

S.Ct., at 3121.

This Court went on to state that a ‘taking’ claim will be

considered premature until the owner has exhausted any local

variance procedures and has shown that any inverse condemna-

tion procedure is unavailable or inadequate.

The present case complies with the dictates of the Hamilton

Bank opinion. No variance procedure was available to Petitioner

after the City Coucil’s action. (Appendix E4 Section 18.90.090).

The City Council denied finally any extension of the develop-

ment schedule. No further relief was available from the City of

Palo Alto or the State of California. Because the P-C Ordinance

had originally approved all physical parameters of both Phase

One and Phase Two, Petitioner had no need to seek a variance

for any aspect of the project, including the building's height.

Petitioner needed only more time to complete Phase Two as

approved and would not have needed that but for the delaying

tactics of the City of Palo Alto.

No adequate inverse condemnation procedure is available

in California since the California courts do not recognize

damages as an appropriate remedy in this type of case, as

discussed in the preceding sections of this Petition. Moreover,

Petitioner had exhausted its equitable remedy in CHP J, in strict

Obedience with the existing, though constitutionally-infirm,

procedures of the California courts. No greater effort to exhaust

remedies can, or should be, demanded by a humane judiciary.

CONCLUSION

For the foregoing reasons, the Petition for a Writ of

Certiorari should be granted.

Respectfully submitted,

FLEHR, HOHBACH, TEST,

ALBRITTON & HERBERT

By /s/ Harold C. Hohbach

Harold C. Hohbach

Counsel for Appellant

August 18, 1985

CERTIFICATE OF SERVICE

STATE OF CALIFORNIA )

> &.

CITY AND COUNTY OF )

FRANCISCO )

Harold C. Hohbach, being first duly sworn upon his oath,

deposes and says that he is a member of the Bar of this Court

and one of the counsel of record for Petitioner in this cause; that

on this 18th day of August, 1985, he mailed three copies of

Petitioner’s Petition for Writ of Certiorari in this cause by

depositing same in the United States mail, first-class postage

prepaid to:

Diane M. Lee Fred Caploe

City Attorney Williams & Caploe

250 Hamilton Avenue 1060 Grant St., Suite 201

Palo Alto, CA 94301 P.O. Box 698

Benicia, CA 94510

and that he also mailed forty copies of Petitioner’s Petition for

a Writ of Certiorari to the Clerk of this Court, first-class postage

prepaid, all in compliance with Supreme Court Rule 28.

/s/ Harold C. Hohbach

HAROLD C. HOHBACH

SUBSCRIBED AND SWORN to before me this 18th day of

August, 1985.

Witness my hand and official seal.

/s/ Nancy A. Davidson

NANCY A. DAVIDSON

NOTARY PUBLIC

My commission expires October 30, 1987

APPENDICES

TABLE OF CONTENTS

Page

APPENDIX A

(1) First Amended Complaint For Inverse

Condemnation, Deprivation of Constitu-

tional Rights, and Declaratory Relief .............. ;

(2) Demurrer’s to First Amended Complaint ..... cv are

(3) Memorandum of Decision and Order After

Hearing On Motion to Strike and Demurrer

to the First Amended Complaint................. A-20

APPENDIX B

(1) Opinion of the California Court of Appeal,

Sixth Appellate District. . 2. 5045 3a ee eee

(2) Denial of Petition For Rehearing to

California Court of Appeal... sc. vs seke eee B-10

APPENDIX C

(1) Denial of Petition for Rehearing to

California Supreme Court... . 245 2s os ee

APPENDIX D

(1) Notice of Appeal to the Supreme Court

of the United States ... ... 4444555 ee

APPENDIX E

(1) United States Constitution, Amendment V..........

(2) United States Constitution, Amendment XIV

Sections } amd § . oc.cia:s'cisltale 6 ee

(3) Ordinance No. 22264 . .. 6s. ste eee

(4) Zoning Code Sections of the City of Palo Alto.......

APPENDIX F

(1) Inter-office Communication of City of Palo Alto

of Februaay 3, 1979... <chdevas eee eee

(2) Letter of City of Palo Alto of May 23, 1968,

by Donald G. Meaney, Assistant City Attorney.......

(1)

(2)

(3)

APPENDIX A

First Amended Complaint for Inverse Condemnation, De-

privation of Constitutional Rights, and Declaratory Relief

Demurrers to First Amended Complaint

Memorandum of Decision and Order after Hearing on

Motion to Strike and Demurrer to the First Amended

Complaint

A-|l

ROBERT E. CARTWRIGHT

CARTWRIGHT, SUCHERMAN, SLOBODIN,

& FOWLER, INC.

101 California Street, 26th Floor

San Francisco, California 94111

Telephone: 415/433-0446

JEFFREY P. WIDMAN

ANDREW L. FABER

BERLINER, COHEN & BIAGINI

99 Almaden Blvd., Suite 400

San Jose,CA 95113

Telephone: (408) 286-5800

Attorneys for Plaintiff |

IN THE -UPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF SANTA CLARA

COURT HOUSE PLAZA COMPANY, a

limited partnership,

Plaintiff,

Vv.

THE CITY OF PALO ALTO, a munic-

ipal corporation, STANLEY R.

NORTON, BYRON D. SHER, FRED

S. EYERLY, ROY L. CLAY, KIRKE

W. COMSTOCK, SCOTT T. CAREY,

JOHN J. BERWALD, ANNE R.

WITHERSPOON, JOHN V. BEARS,

Councilmen, PETER R. CARPENTER,

MARY R. GORDON, WILLIAM E.

GREEN, JAY W. MITCHELL, EMILY

M. RENZEL, ANNE STEINBERG,

Planning Commissioners, STAN J.

NOWICKI, Chief Building Inspector,

JAMES O. GLANVILLE, Zoning Ad-

ministrator, NAPTHALI H. KNOX,

Director of Planning and Community

Environment, ROBERT K. BOOTH,

JR., City Attorney and LOUIS B.

GREEN, Assistant City Attorney,

Defendants.

)

Civil No. P33070

FIRST AMENDED

COMPLAINT FOR

INVERSE CON-

DEMNATION,

DEPRIVATION OF

. CONSTITUTIONAL

RIGHTS, AND

DECLARATORY

RELIEF

A-2

Plaintiff alleges:

FIRST CAUSE OF ACTION

{Inverse Condemnation — United States Constitution }

(Parties to this Action)

Plaintiff, COURT HOUSE PLAZA COMPANY, is a limited

partnership formed and existing under the California

Limited Partnership Act (Corporations Code § 15500

et seq.) Plaintiff does business under the name of COURT

HOUSE PLAZA COMPANY and has complied with the

provisions of California law (Business and Professions Code

§ 17910 et seq.) for the filing and publication of a certifi-

cate stating such fictitious business name. Plaintiff is the

successor-in-interest to California Lands Building Company,

a California genera! partnership, the former owner of the

property in question here until about October of 1971.

Plaintiff's principal place of business, and the property in

question are located within, and the acts of Defendants

described in this Complaint, all occurred within, the

County of Santa Clara, California.

Plaintiff is the fee owner of real property located at

260 Sheridan Avenue, City of Palo Alto, County of Santa

Clara, State of California.

Defendant, THE CITY OF PALO ALTO (‘the CITY’),

is now, and at all times pertinent to this action was, a

municipal corporation organized and existing under the

laws of the State of California as a charter city and located

in the County of Santa Clara, State of California.

Defendants STANLEY R. NORTON, BRYON D. SHER,

FRED S. EYERLY, ROY L. CLAY, KIRKE W.

COMSTOCK, SCOTT T. CAREY, JOHN T. BERWALD,

ANNE R. WITHERSPOON and JOHN V. BEAHRS were,

on and before December 6, 1976, members of the City

Council of the CITY.

Defendants PETER F. CARPENTER, MARY GORDON,

WILLIAM E. GREEN, JAY W. MITCHELL, EMILY M.

—_— ee

A-3

RENZEL nad ANNE STEINBERG were, on and before

December 6, 1976, members of the Planning Commission

of the CITY.

Defendants STANLEY J. NOWICKI, JAMES OO.

GLANVILLE, NAPHTALI H. KNOX, ROBERT K.

BOOTH, JR., and LOUIS B. GREEN were, on or before

December 6, 1976, respectively, the Chief Building Inspec-

tor, the Zoning Administrator, the Director of Planning

and Community Environment, the City Attorney, and the

Assistant City Attorney of the CITY.

At all times pertinent to this action, Defendants, individu-

ally and collectively, acted in concert to cause Plaintiff's

injury as described in this Complaint; and the individual

Defendants served as the agents and/or employees of

Defendant CITY and of each other and at all times acted

within the scope of such agency and employment.

[History of the Project: Acquisition of Vested Rights]

The CITY adopted Ordinance No. 2224 on December 28,

1964 (the “P-C Ordinance”’’). The P-C Ordinance placed

Plaintiff's property in a “‘P-C”’ zone; that is, a zone for pro-

fessional and commercial office use. The P-C Ordinance

also approved (by incorporation) Plaintiff's development

plans for ten-story office building; and these plans con-

sisted of detailed drawings showing the location, elevation,

and floor plan of the building, the related parking garage,

and other details of the site development (the “Project”’).

The P-C Ordinance contained certain conditions:

(a) “Building location, dimensions, heights and other

improvements shall be substantially as indicated on

the approved Development Plan.”

(b) Off-street parking space shall be provided, the num-

ber of spaces to be at the ratio of one for each 144

10.

A-4

square feet of floor area in the ground floors and one

parking space for each 288 square feet of floor space

in the upper floors.

development schedule providing that, in Phase 1,

“start of construction of the four-story office build-

ing’ and the “‘parking garage’’ shall be “within two

years of Council approval’’ and, in Phase 2, “start of

construction of the fifth to and including the tenth

story”’ and “‘additional levels of the parking garage”

shall be “by October 31, 1976.”

The development schedule contained in the P-C Ordinance

rested upon an understanding between Plaintiff and City

officials that the phasing of the Project would enable

Plaintiff to complete the Project when the demand for

office space in the CITY made completion economically

feasible.

Soon after adoption of the P-C Ordinance Plaintiff pre-

pared architectural plans for the entire ten-story building.

On June 14, 1966, the CITY issued a building permit for

Phase 1. On January 17, 1966, the CITY issued a use per-

mit for Phase 1. In reliance upon these permits and with

the guidance of its architectural plans for the ten-story

building, Plaintiff commenced construction of Phase 1,

within the two-year period required under the develop-

ment schedule of the P-C Ordinance, and completed con-

struction in about August of 1967.

The first four stories of the building completed in Phase

1 incorporated structural elements designed to support

the remaining six stories in Phase 2. Among these struc-

tural elements, costing over $450,000, were the following:

(a) A foundation capable in sustaining all ten floors;

(b) Structural steel of sufficient strength to support the

remaining six floors;

pe ee eee ee

Bg.

12.

13.

A-5

ment instead of upon the roof, in order to permit

construction of the remaining six floors without in-

terrupting service to the first four floors;

(d) Two additional elevator shafts to accommodate

elevators for the remaining six floors;

(e) An interior smokeproof tower for fire safety pur-

poses, not necessary in a four-story building:

(f) Extra electrical, water and sewage capacity permit-

ting hook-up of facilities on the remaining six floors.

In so completing Phase 1 and thereby commencing actual

construction of Phase 2, Plaintiff acquired a vested right to

complete Phase 2 under regulations in effect on the date

that the P-C Ordinance was adopted. Plaintiff reasonably

expected that it might complete Phase 2 under such regu-

lations based upon the conduct of Defendants in issuing

building and use permits for commencement of the Project;

and Plaintiff's investment in the Project in 1966 and suc-

ceeding years resulted from that reasonable expectation.

[The Parking Problem]

Because the parking garage contemplated by the P-C Ordi-

nance would have interfered with the CITY’s plan for re-

alignment of Page Mill Road, the CITY did not require

Plaintiff to begin construction of the garage within the two

years provided in the development schedule. On December

13, 1965 the CITY adopted Resolution No. 3860 requiring

Plaintiff to provide 107 off-street parking spaces instead of

the garage. The CITY thereby acknowledged its responsi-

bility for impeding Plaintiff's construction of the parking

garage and indicated officially its willingness to cooperate

with Plaintiff in resolving the parking problem.

Thereafter CITY engaged in a course of conduct which ef-

fectively aggravated the parking problem, prevented its

resolution, and thwarted Plaintiff in its efforts to satisfy

A-6

the condition of the P-C Ordinance regarding parking

spaces. The CITY’s course of conduct included, arnong

others, the following acts:

(a)

(b)

(c)

(d)

(e)

The CITY failed to resolve with the County of Santa

Clara the design of the Page Mill Road realignment.

On December 11, 1967, the CITY adopted Resolu-

tion No. 4055 extending time for the commencement

of construction of the parking garage by one year. On

May 6, 1968 the CITY adopted Resolution No. 4113,

rescinding Resolution Nos. 3860 and 4055, substi-

tuting 107 attendant parking spaces on the surface in

place of a parking garage, and allowing until October

31, 1976, for Plaintiff to commence construction of

the parking garage.

By agreement with the County of Santa Clara, the

CITY consented to the County’s acquiring, under a

final order of condemnation entered on August 21,

1970, a portion of the land Plaintiff intended to use

for construction of the parking garage, making its

construction impossible.

In connection with the foregoing condemnation, the

CITY sold the County, and the County conveyed to

Plaintiff as partial compensation, a small piece of land

supposedly usable for the parking garage, but known

to the CITY not to be usable under CITY’s own re-

quirements for design and construction.

On March 31, 1975, the CITY resolved to acquire six

parcels of land (the “Power parcels’’) for eventual de-

velopment by the CITY for low-and moderate-income

housing. At the tirne of this Resolution the CITY knew

that Plaintiff had once invested funds in acquiring an

option to purchase, and later in purchasing, the Power

parcels as a means of resolving the parking problem.

Although no longer the owner after 1973, Plaintiff

remained interested in using the Power parcels for

parking for the Project.

14,

15.

16.

A-7

By these and other acts the CITY defeated Plaintiff's reason-

able expectation that the C:TY would with Plaintiff co-

operate to satisfy the parking requirements for the Project

before October 31, 1976.

[City’s Dilatory and Arbitrary Administrative Acts]

In the Fall of 1968 Plaintiff completed construction draw-

ings for Phase 2..The demand for office space then justi-

fied completion of Phase 2. In October o; 1969 Plaintiff

arranged financing for construction, directed its general

contractor to commence the placement of construction

subcontractors for the remainder of Phase 2, and partic-

ularly for structural steel and elevators for the six-story

addition.

Plaintiff applied for a building permit on December 1,

1969. Instead of issuing a building permit promptly accord-

ing to the regulations fixed by the P-C Ordinance, Defen-

dants arbitrarily insisted that the smokeproof tower shown

in the construction plans did not comply with the CITY’s

Building Code as amended after the P-C Ordinance. This

dispute between Plaintiff and Defendants was not resolved

until after the Assistant City Attorney ruled that Plaintiff

had acquired vested rights in a ten-story office building, to

be completed with an interior smokeshaft and without a

fire sprinkler system, under the P-C Ordinance. The CITY

finally issued the building permit on February 16, 1970.

Plaintiff applied for a use permit on February 13, 1970.

Again Defendants arbitrarily objected to this application

on the ground that the ten-story building, when completed,

would be fourteen feet higher than the building shown in

the drawings incorporated into the P-C Ordinance, even

though Defendants knew that the P-C Ordinance required

building heights to be only substantially as indicated on

the approved Development Plan.” The fourteen-foot

height difference derived from the need for more space

17.

18.

19.

A-8

between the floors to accommodate heating and venti-

lation equipment. The first four floors built in Phase 1

had already included the extra spacing. Because the CITY’s

Zoning Administrator objected to the difference in height,

Plaintiff was required to request the CITY’s Planning Com-

mission to overrule the Zoning Administrator. On March

30, 1970 the City Council approved the Planning Commis-

sion’s favorable ruling and issued the use permit, thereby

ruling officially that the fourteen-foot height difference

substantially complied with the P-C Ordinance.

While the CITY so delayed in issuing building and use per-

mits to Plaintiff for the completion of Phase 2, the CITY

also approved, on September 22, 1969, the nearby Palo

Alto Square Project consisting of two ten-story office tow-

ers competing directly with Plaintiff's Project. The Palo

Alto Square Project created a surplus of professional and

commercial office space in the vicinity and so rendered the

completion of Phase 2 by Plaintiff not viable economically

for several years under then-prevailing business and finan-

cial conditions.

Notwithstanding its own financial difficulties and the satu-

rated market for office space, Plaintiff again applied for a

use permit to complete Phase 2, following the expiration

of the use permit issued on February 13, 1970. Plaintiff's

new application was filed on February 27, 1973 and re-

quested a use permit identical to the one issued in 1970.

Despite the fact that the City Council had already declared

officially that the fourteen-foot height difference complied

substantially with the P-C Ordinance, the CITY’s Zoning

Administrator indicated his intent to deny the new appli-

cation because of that difference. In the face of this arbi-

trary objection, Plaintiff withdrew this application on

March 30, 1973.

In September of 1973 the CITY adopted an interim Ordi-

20.

21.

A-9

nance No. 2745 limiting the height of new structures to

fifty feet. The CITY incorporated this fifty-foot height

limit into its new comprehensive plan in 1976.

In late 1975 the market for professional and commercial

office space finally improved. The competitive Palo Alto

Square Project was then almost completely leased. The re-

newed demand for office space and the availability of con-

struction financing combined to render the completion of

Phase 2 of the Project economically feasible once again.

In September of 1975 Plaintiff renewed discussions with

Defendants regarding the completion of Phase 2. In re-

sponse, Defendants resumed a course of conduct intended

to delay Plaintiff, prevent completion of Phase 2, deprive

Plaintiff of its vested rights, and to frustrate Plaintiff's

reasonable investment-backed expectation that it could

complete the Project under the P-C Ordinance and the

regulations in effect when the P-C Ordinance was adopted.

Among the acts comprising such course of conduct were

the following:

(2) After Plaintiff applied on June 30, 1976 for a change

in the P-C zone to resolve the parking problem, the

CITY’s Zoning Administrator unreasonably objected

to such application on the ground that it included

land not owned by Plaintiff and for which Plaintiff re-

quested contingent P-C zoning. Consequently, Plain-

tiff acquired the described land on September !1,

1976. Notwithstanding Plaintiffs expenditures of

time, money, and personal efforts the zone-change

application was never finally processed by the CITY

before October 31, 1976, the end of the development

schedule under the P-C Ordinance.

(b) In the face of objections to its zone-change applica-

tion, Plaintiff applied for a three-year extension of

the development schedule on the suggestion of the

Zoning Administrator. The Planning Commission de-

(c)

(d)

(e)

A-10

nied this extension on August 25, 1976, despite the

fact that Section 18.68 of the CITY’s Municipal Code

provides that an extension of a development schedule

may be recommended by the Planning Commission

“for good cause shown by the property owner in

writing.” Plaintiff appealed the denial to the City

Council, and the Council placed the appeal on its

agenda. On the advice by the Mayor of the CITY and

other council-members that the appeal would prove

too controversial, Plaintiff withdrew the appeal on

September 11, 1976.

On August 27, 1976 Plaintiff applied for another use

permit for the same ten-story building for which the

use permit had issued in 1970. On August 31, 1976

Plaintiff also applied for a building permit, submitting

the same plans submitted to the CITY in 1969. The

City’s Zoning Administrator and Building Inspector

refused to act on either of these applications, not-

withstanding the fact that Plaintiff then possessed a

right to obtain the use and building permits described

in the applications pursuant to the P-C Ordinance.

After Plaintiff requested on October 1, 1976 a one-

year extension of the development schedule, Defen-

dants again sought to impose upon Plaintiff's request

regulaticns adopted after the P-C Ordinance, in par-

ticular the California Environmental Quality Act of

1973. On October 27, 1976 the Planning Commission

denied the request for one-year extension and, at the

same time, continued the still-pending zone-change

application. Plaintiff appealed the denial of the ex-

tension of the City Council. On December 6, 1976

the City Council denied the appeal, thereby finally

ruling that the development schedule ending on

October 31, 1976 would not be extended.

The CITY never issued another building or use permit

for completion of Phase 2. The City, in failing to is-

“pee ee

A-1]

sue such permits, relied upon grounds not authorized

by the P-C Ordinance but imposed by regulations

adopted subsequently thereto.

22. Plaintiff demonstrated, as required by Section 18.68 of

p xR

CITY’s Municipal Code, “‘good cause”’ for the one-year ex-

tension. Such good cause consisted in the history of the

Project described above. As early as May 23, 1968, when

the City Attorney wrote to Plaintiff concerning the avail-

ability of extensions to a development schedule, Plaintiff

formed the reasonable expectation that, because the CITY

had in fact customarily granted such extensions to other

applicants, Plaintiff would also be granted an extension

upon its request for good cause shown.

During the course of the history of the Project described

above, Plaintiff invested these funds in the Phase 2 of the

Project:

(a) $450,000 for the structural elements incorporated in

Phase | as part of the construction of Phase 2.

(b) More than $65,000 for the preparation of architectural

plans for the remaining six stories of the building.

steel and elevators for the remaining six stories, ex-

pended in good faith reliance on the timely proces-

sing of Plaintiff's application for a building permit

finally issued after delays on February 16, 1970.

(d) More than $20,000 for the preparation of revised plans

and specifications to comply with the 1973 Uniform

Building Code adopted in Palo Alto, in good-faith ef-

fort to compromise with the CITY, and an additional

$5,000 or more in legal fees in connection with hear-

ings before the Planning Commission and City Council.

(e) In excess of $10,000 for parking studies and revised

parking plans submitted to the Planning Commission.

(f) $20,000 for the purchase of the six Power parcels to

solve the parking needs for the ten-story building.

—

24.

ae,

A-12

(g) $87,000 for acquisition of the Pierson parcel to over-

come the CITY’s objection to Plaintiff's zone-change

application in September of 1976.

(h) In excess of $160,000 in total for parcels located at

228 Sheridan Avenue, 230 Sheridan Avenue, 320

Sheridan Avenue, and 2660 Park Boulevard, all near

the Project, as possible sites for parking.

The above items constitute special damages suffered by

Plaintiff as a result of Defendant’s preventing completion

of Phase 2. Plaintiff has also suffered additional special

damages, the full nature and extent of which Plaintiff does

not know, but will allege and prove at the appropriate time.

In addition, Plaintiff has suffered general damages in

amounts not now known, including, but not limited to,

the following:

(a) Loss of time by, and inconvenience to, its partners

and the partners of its predecessor general partnership.

(b) Loss of profits from the existing four-story building.

building which Plaintiff has a right to complete.

(d) Loss of increased appreciation in the four-story build-

ing and the remaining six stories together with the

parking garage as a complete, integrated project.

Plaintiff has also suffered additional general damages, the

full nature and extent of which Plaintiff does not know,

but will allege and prove at the appropriate time.

By their conduct Defendants have appropriated, and taken

without payment of just compensation, Plaintiff's prop-

erty as described in paragraphs 23 and 24 preceding as well

as the air-space abov2 the existing four-story building, in

violation of the Fifth and Fourteenth Amendments to the

Constitution of the United States.

A-13

SECOND CAUSE OF ACTION

[Inverse Condemnation—California Constitution Art. 1, § 19]

26. Plaintiff refers to, incorporates herein by reference in their

27.

28.

29.

30.

entirety, and realleges the allegations contained in para-

graphs 1 through 24, inclusive, of this Complaint.

By their conduct Defendants have confiscated, appropri-

ated, and taken without payment of just compensation

Plaintiff's property as described in paragraphs 23 and 24

above as well as the air-space above the existing four-story

building; and such taking and/or damaging of property vi-

olates Article 1, § 19 of the Constitution of the State of

California.

Plaintiff is entitled to recover its reasonable costs, disburse-

ments, and expenses, including attorney’s and expert fees,

pursuant to Section 1036 of the California Code of Civil

Procedure.

THIRD CAUSE OF ACTION

[Denial of Equal Protection and Due Process of Law Under

the Fourteenth Amendment, U.S. Consiitution]

Plaintiff refers to, incorporates herein by reference in their

entirety, and realleges the allegations of paragraphs 1 through

24, inclusive, of this Complaint.

In denying Plaintiff an extension of the development sched-

ule contained in the P-C Ordinance, while routinely grant-

ing extensions to other applicants upon a showing of good

cause under Section 18.68 of the City’s Municipal Code,

Defendants have unlawfully discriminated against Plaintiff,

thereby denying to Plaintiff equal protection under the

laws and depriving Plaintiff of its rights to due process of

law in violation of the Fourteenth Amendment to the Con-

stitution of the United States.

A-14

31. In seeking to apply to the Project regulations adopted after

the P-C Ordinance and after Plaintiff had acquired a vested

right to complete Phase 2 under the P-C Ordinance and

regulations in effect at the time of its adoption, Defendants

have deprived Plaintiff of its rigis to substantive due pro-

cess of law in violation of the Fourteenth and Fifth

Amendments to the Constitution of the United States.

FOURTH CAUSE OF ACTION

[Denial of Equal Protection and Due Process of Law under

Art. 1, § 7 of the California Constitution]

32. Plaintiff refers to, incorporates herein by reference in their

entirety, and realleges the allegations of paragraphs 1 through

24, inclusive, of this Complaint.

33. In denying Plaintiff an extension of the development sched-

ule contained in the P-C Ordinance, while routinely grant-

ing extensions to other property owners upon a showing of

good cause under Section 18.68 of the CITY’s Municipal

Code, Defendants have unlawfully discriminated against

Plaintiff, thereby denying Plaintiff equal protection under

the laws and depriving Plaintiff of its right to due process

of law in violation of Article 1, Section 7 of the Constitu-

tion of the State of California.

Nivedita Midabilitis, ¢

34. In seeking to apply requirements created by regulations

adopted after the P-C Ordinance and after Plaintiff had ac-

quired a vested right to complete Phase 2 under the P-C

Ordinance and regulations in effect at the time of its adop-

tion, Defendants have deprived Plaintiff of its right to sub-

stantive due process of law in violation of the Constitution

of the State of California.

FIFTH CAUSE OF ACTION

{ Deprivation of Constitutional Rights—Federal Civil Rights Act]

35. Plaintiff refers to, incorporates herein by reference in their

A-15

entirety, and realleges the allegations of paragraphs 1

through 25 and paragraphs 29 through 31, inclusive, of

this Complaint.

36. Through their conduct as described above, Defendants

have, under color of state law and municipal ordinances

and regulations, deprived Plaintiff of its rights, privileges,

and immunities secured by the Constitution of the United

States and, in particular, the Fifth and Fourteenth Amend-

ments thereto, in violation of Sections 1981 and following

of Title 42 of the United States Code.

37. For such violation Plaintiff is entitled to recover special

and general damages as described in paragraphs 23 and 24

of the First Cause of Action.

38. Asan alternative to such special and general damages, Plain-

tiff is entitled to equitable relief to restore the deprivation

of its rights, privileges, and immunities by Defendants. Such

equitable relief consists in a mandatory injunction from this

Court directing Defendants to permit Plaintiff to complete

Phase 2 of the Project under the P-C Ordinance and regula-

tions in the effect at the time of its adoption, without fur-

ther discretionary approvals by the CITY. In addition to

such relief, Plaintiff is entitled to interim damages actva!!y

suffered during the period in which Defendants prevented

Plaintiff from completing Phase 2; and Plaintiff asks leave

to allege the amount of such damages and to pr-*e the same

when the amount becomes known.

SIXTH CAUSE OF ACTION

[Declaratory Relief]

39. Plaintiff refers to, incorporates herein by reference in their

entirety, and realleges the allegations of paragraphs | through

38, inclusive, of this Complaint.

40. An actual controversy has arisen now exists between the

Plaintiff, on the one hand, and Defendants, on the other

41.

A-16

hand, concerning their respective rights and duties in con-

nection with the Project. Plaintiff contends that it has the

right either

(a) to complete Phase 2 under the P-C Ordinance and the

regulations in effect at the time of its adoption with-

out further discretionary approvals by the CITY and,

in addition, to receive full compensation for actual

damages suffered during the period in which the CITY

prevented completion of Phase 2 or, in the alternative,

(b) to receive full compensation for all special and general

damages heretofore suffered by Plaintiff as a result of

Defendant’s conduct described above.

Plaintiff is informed and believes, and alleges on the basis

of such information and belief, that Defendants do not ac-

cept Plaintiff's contention but take a contrary position.

Plaintiff desires an immediate declaration of its rights in

the Project. Such declaration is necessary and appropriate

in order to resolve the controversy between Plaintiff and

Defendants and to eliminate the injury previously suffered,

and still being suffered, by Plaintiff so long as Defendants

prevent Plaintiff from completing Phase 2 of the Project.

WHEREFORE Plaintiff prays for judgment against Defendants,

and each of them, as follows:

For the special damages described in paragraph 23 above

according to proof.

For the general damages described in paragraph 24 above

according to proof.

A declaration of the respective rights, duties and obliga-

tions of the parties.

Plaintiff's reasonable attorneys’ fees in this action.

Costs arising from the prosecution of this action.

A-17

6. Interest as provided by law and determined by this Court

on all items of special and general damages requested in

paragraphs | and 2 of this prayer.

7. For such other, further and additional relief as this Court

may deem appropriate.

In the alternative, Plaintiff prays for judgment against Defen-

dants, and each of them, as follows:

Equitable relief in the nature of a mandatory injunc-

tion allowing Plaintiff to complete Phase 2 of the Pro-

ject under the P-C Ordinance and the regulations in

effect at the time of its adoption without further dis-

cretionary approvals by CITY.

Interim damages in the amount to be proven at trial

for losses, costs, and expenses incurred by Plaintiff

during the period in which Defendants prevented the

completion of Phase 2 of the Project.

Costs arising from the prosecution of this action.

Plaintiff's reasonable attorneys’ fees in this action.

Interest as provided by law and determined by this

Court on all of the losses, costs and expenses de-

scribed in paragraph B of this alternative prayer.

For such other, further and additional relief as the

Court may deem appropriate.

Dated: February 26, 1982.

BERLINER, COHEN & BIAGINI

By /s/

JEFFREY P. WIDMAN

Attorneys for Plaintiff

A-18

ROPERS, MAJESKI, KOHN, BENTLEY,

WAGNER & KANE

84 West Santa Clara Street

San Jose,CA 95113

(408) 287-6262

Attorneys for Defendants

THE CITY OF PALO ALTO and

EACH INDIVIDUALLY NAMED DEFENDANT

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF SANTA CLARA

COURT HOUSE PLAZA COMPANY, a ) Civil No. P33070

limited partnership,

DEMURRERS TO

FIRST AMENDED

COMPLAINT

Plaintiff,

VS.

THE CITY OF PALO ALTO, a munic-

pal corporation, et al.,

Date: April 26, 1982

Time: 9:30 a.m.

Dept.: One

Est. Length of Hearing

30 mins.

Defendants.

)

A-19

DEMURRERS

Comes now defendants THE CITY OF PALO ALTO and each

individually named defendant and demur generally and specially

to the first amended complaint as follows:

The first amended complaint, and each purported cause of action

therein, fails to state facts sufficient to constitute any valid

cause of action against any defendant.

The first amended complaint, and each purported cause of action

therein, is uncertain in that it cannot be determined which

cause of action, if any, is directed against any of the individually

named defendants.

WHEREFORE, defendants pray that foregoing demurrers be

sustained, that plaintiff recover nothing by its first amended

complaint, that defendants be awarded judgment in their favor

including costs of suit herein incurred, and for such other relief

as the Court deems just and proper.

Dated: April 9, 1982. ROPERS, MAJESKI, KOHN, BENTLEY,

WAGNER & KANE

Attomeys for Said Defendants

A-20

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF SANTA CLARA

COURT HOUSE PLAZA COMPANY, ) No. P 33070

)

Plaintiff, ) MEMORANDUM OF

) DECISION AND

vs. ) ORDER AFTER

) HEARING ON MO-

) TION TO STRIKE

) AND DEMURRER TO

) THE FIRST AMENDED

) COMPLAINT

THE CITY OF PALO ALTO,

Defendant.

The plaintiff has notified the Court of a reservation of the claims

arising under the United States Constitution and the Federal

Civil Rights Act. This Court will therefore defer any adjudica-

tion with regard to the plaintiffs first, third, fourth and fifth

causes of action pending outcome of Case No. C-81-4357-SZ

currently filed in the United States District Court for the

Northern District of California. Of necessity, the sixth cause of

action requesting declaratory relief must await that litigation’s

outcome.

A-21

There remains only the plaintiff's second cause of action which

is subject to the defendant’s motions. The second cause of ac-

tion basically seeks damages for inverse condemnation. The

plaintiffs allege that they were prevented from constructing

six additional floors to an existing four-story building be-

cause Of a change in the zoning regulations by the City of

Palo Alto.

The original plan for the building was a two-phase con-

struction schedule and it is contended that the actions of the

defendant City substantially deprived the plaintiff of full use

of their property and that therefore the City should respond

in damages under a theory of inverse condemnation.

Defendants have requested the Court to take judicial notice

of the decisional law in Court House Plaza vs. The City of Palo

Alice 117 CA3d 871 (1981) in which the Court held that plain-

tiff was not entitled to compensable damages under a theory of

inverse condemnation. Such damages would include any that

flow from interference with the use of air space.

Accordingly, the demurrer to the second cause of action is sus-

tained on t}e grounds that that cause of action is barred by res

judicata. Since there is no basis for an amendment, the demur-

rer is sustained without leave to amend.

DATED: June , 1982.

DAVID W. LEAHY

Judge of the Superior Court

APPENDIX B

(1) Opinion of the California Court of Appeal, Sixth Appellate

District

(2) Denial of Petition for Rehearing to California Court of

Appeal

B-]

IN THE COURT OF APPEAL OF THE STATE CF

CALIFORNIA

SIXTH APPELLATE DISTRICT

COURT HOUSE PLAZA CO., )A019076

)

Plaintiff and ) (Santa Clara County

Appellant, ) Super.Ct.No.

) P 33070)

-VS.— )

)

CITY OF PALO ALTO, et al., )

)

Defendants and )

Respondents. )

Plaintiff Court House Plaza Co. (developer) appeals from a

judgment of dismissa! following the sustaining without leave to

amend of a demurrer on grounds of res judicata interposed by

the defendant City of Palo Alto (City). The developer concedes

that this action arises from “the same historical set of facts” as

did its prior mandamus action against the City, wherein the

judgment denying it relief was affirmed on appeal in Court

House Plaza Co. v. City of Palo Alto (1981) 117 Cal.App.3d

871. The critical question in this appeal is: does that judgment

bar the developer from seeking damages in inverse condemna-

tion based on the same actions by the City? The trial court so

decided, after taking judicial notice of the mandamus petition

in that action, the detailed findings of fact and conclusions of

law, and the appellate opinion. We agree with the court's

decision.

THE DEMURRER

As explained in Carrol v. Puritan Leasing Co. (1978) 77

Cal.App.3d 481, 486: “It is now settled that a court may take

B-2

judicial notice of the official acts or records of any court in this

state and any state of the United States. (Evid. Code, § 452.)

Pursuant to this authority, a trial court may take notice of the

prior judgment in deciding whether to sustain a demurrer based

upon res judicata. (Flores v. Arroyo (1961) 56 Cal.2d 492,

496....) In analyzing a demurrer based upon res judicata the

court will take judicial notice of a prior judgment, whether or

not pleaded, provided only that (1) the court has been correctly

apprised of the judgment, and, (2) the plaintiff is given ad-

equate notice and opportunity to be heard as to the effect of

the judgment. (Flores v. Arroyo, supra, at p. 496; Evid. Code,

§ 452, subd. (d), § 453.)”

On demurrer, the court is not required to assume the truth of

allegations which contradict what is judicially noticed. (Saltares

v. Kristovich (1970) 6 Cal.App.3d 504, 510, and cases there

cited.) Numerous allegations in the amended complaint contra-

dict the findings made in the prior action, but they need not be

detailed to resolve this appeal.

FACTUAL SETTING

The “‘same historical set of facts” is essentially: (1) in December

1964 the City passed an ordinance providing for the construc-

tion by the developer of a ten-story building in two phases, with

phase one consisting of a four-story building to be commenced

before December 1966, and phase two consisting of the remain-

ing six stories to be commenced before October 31, 1976; (2)

the developer completed construction of phase one under

permits tor phase one by August 1967, “‘overbuilding”’ the first

four stories at a cost of about $450,000 (e.g., by using stronger

steel for a foundation) in anticipation of adding six more

stories; (3) the developer also expended more than $450,0U0

for fabricating steel and elevators for the remaining six stories! ;

'The developer alleges this expenditure was made in reliance on the issuance of

building and use permits for phase two (which subsequently expired). The trial court

in the first action found that these obligations were undertaken in advance of issu-

ance of the permits and before the developer had financing, which was why the

permits expired.

B-3

(4) the City precluded construction of phase two in a number

of ways, but most significantly by denying the developer’s

August and October 1976 applications for an extension of the

development schedule and August 1976 requests for building

permit and a use permit.

INVERSE CONDEMNATION

The first action, styled a petition for ordinary and administra-

tive mandamus, was filed on May 23, 1977. This second action

was filed September 22, 1977, although the parties apparently

delayed litigation pending the outcome of the mandamus

action. After a demurrer was sustained to the original complaint

in this second action with leave to amend, an amended com-

plaint was filed February 26, 1982, which purported to state six

causes of action. Our concern is only with the second cause of

action in inverse condemnation because in response to the

City’s demurrer and motion to strike the amended complaint,

the developer filed a “notice of reservation of federal claims”’

on May 3, 1982, which conditionally withdrew all federal

causes Of action for resolution in a pending federal action filed

December 3, 1981. (We judicially notice (Evid. Code, § 459)

that on June 4, 1982, the federal district court dismissed the

federal claims based on the res judicata effect of the earlier

action, which dismissal was upheld by the Ninth Circuit Court

of Appeal on May 2, 1983.)

The cause of action with which the plaintiff hopes to proceed in

this action seeks damages for inverse condemnation under the

California Constitution. Inverse condemnation theory requires

compensation of an owner whose private property has been

“taken or damaged for public use.” (Cal. Const., art. 1, § 19;

Bauer v. County of Ventura (1955) 45 Cal.2d 276, 282-283;

Tilem v. City of Los Angeles (1983) 142 Cal.App.3d 694,

701-702.) As explained in Tilem, supra, at page 702: “The

concept of ‘taking’ has with time changed from the notion of a

physical seizure to that of a diminution of the owner’s rights

B-4

and attributes of ownership .... [4] Accordingly, the rule has

developed that a cause of action for inverse condemnatic » arises

from a governmental invasion or appropriation of a valuable

property right which directly and specifically affects the land-

owner to his injury. [Citations.]’’ There the property owner

was compensated in part for loss of the ability to develop a

vacant parcel caused by the City’s unreasonable precondemna-

tion activity. (/d., at p. 704.) The property right involved there

and here for which compensation in inverse condemnation is

sought is clearly a right to develop property by building on it

and presui..ably to profit from the development.

Case law had addressed the propriety of inverse condemnation

claims based on conduct similar to the City’s before the de-

veloper filed these actions. Selby Realty Co. v. City of San

Buenaventura (1973) 10 Cal.3d 110, 128, determined that the

denial of a building permit did not give rise to a cause of action

in inverse condemnation, but that it should be challenged in

administrative mandate. When the mandate action and this

action were filed, HFH, Ltd. v. Superior Court (1975) 15

Cal.3d 508, 513-514 had determined that a zoning action which

merely reduced the market value of a landowner’s property did

not give rise to a cause of action in inverse condemnation,

although it could be challenged in mandamus. HFH, Ltd., supra,

left for another day the question whether inverse condemnation

recovery was available when the landowner was deprived of

substantially all use of his property. (/d., at p. 518, fn. 16.) The

answer was provided, of course, by Agins v. City of Tiburon

(1979) 24 Cal.3d 266, 272-277, which determined that, under

both the federal and state Constitutions, a property owner’s

remedy when excessive zoning regulation had deprived him of

substantially all reasonable use of his property was not damages

for inverse condemnation, but either an action in mandate or

for declaratory relief.

B-5

RES JUDICATA

The developer contends that the instant action does not involve

the same “primary right” at issue in the mandate action. Ii is

aware that res judicata analysis is concerned with determination

of primary rights. In Slater v. Blackwood (1975) 15 Cal.3d 791,

an injured nonowner guest in a car had challenged the guest

statute which limited recover’ against a driver in her first action

and lost on appeal. Subsequently in another case, the guest

statute was held unconstitutional. U/d., at p. 794.) She then

brought a second action, but the court held that the change in

the law was no basis for reviving her adjudicated negligence

cause of action, because the same primary right had been

determined in the first lawsuit and was res judicata, although

different legal theories were presented therein. (/d.,, at

pp. 795-796; accord Jn re Marriage of Fellers (1981) 125

Cal.App.3d 254, 257.)

The developer’s argument can prevail only if the property right

to be compensated by inverse condemnation damages was not

involved in the prior mandate proceeding. While the developer is

aware that our concern is whether different primary rights are

involved in this action compared to the mandamus action, it

apparently prefers not to characterize the rights or the differ-

ence. On appeal, the developer characterizes the prior action as

having involved ‘“‘the failure of a city to issue use and building

permits or grant an extension of a develop sent schedule”’ or a

limited “question of vested rights’ or only whether the City

abused “its discretion in denying an extension of the develor-

ment schedule.”’ The developer attempts to contrast those issues

with the primary right at issue in this case, which was described

in the opening brief as ‘‘a vested right for whose taking compen-

sation must be awarded,” more particularly, the lost investment

involved in overbuilding phase one and anticipating phase two

and the lost profits which completion of phase two represented.

Challenged by the City’s brief to identify the primary right at

issue here more specifically, the developer’s reply brief char-

B-6

acterizes it as the City’s depriving the developer of all property

rights in its air space above four stories and the use of the steel

and elevators constructed for phase two.

We review the pleadings and findings in the prior action to

establish what issues were determined. (Page v. Garver (1907)

5 Cal.App. 383, 386.) As the City points out a taking was

alleged in order to justify mandate in the prior petition. The

relief sought in the mandate proceeding was to compel the City

to alternatively grant building and use permits or at least an

extension of three years in the development schedule. Either

result would vindicate the developer’s right to develop property

by building on it and presumably to profit from the

development.

The prior appellate opinion shows that a central issue was

whether the developer had acquired a vested right to building

and use permits. (Court House Plaza Co. v. City of Palo Alto,

supra, 117 Cal.App.3d 871, 884-887.) The trial court’s conclu-

sions of law repeatedly rejected the notion that the developer

acquired any vested rights (conclusions nos. 3, 10, 12, 13). The

developer misstates the record in asserting that the only import-

ance of that contention in the prior action was to determine the

scope of administrative review in the trial court. That was one,

but not the only, application of its vested rights argument.

In fact, the vested rights doctrine urged in the first action arises

in part from the same constitutional provision which is the

source of inverse condemnation damages. As explained in Urban

Renewal Agency v. California Coastal Zone Conservation Com.

(1975) 15 Cal.3d 577, 583-584: “* ‘[O]ne who in good faith

reliance upon a building permit performs substantial work and

incurs substantial liability in connection therewith acquires a

vested right to complete construction notwithstanding an

intervening change in the law that would otherwise preclude

construction. [Citations.] The rule is grounded upon the

constitutional principle that property may not be taken without

due process of law.’ ” Thus, the same primary right was at issue

B-7

in the mandate action which the developer seeks to reassert here,

namely a property right to develop property by building on it

and presumably to profit from it.

The developer argues that its right to damages was not and

could not have been determined in the first action. Its major

point is that while the mandate action was pending, such a

cause of action did not exist in California law, so that it could

not have been in issue. The minor point is that damages are

unavailable in a mandate action.?

We note that the opinion in Court House Plaza Co., supra, 117

Cal.App.3d at pages 887-888 states: “‘Appellant’s final argu-

ment sounds in inverse condemnation. While both the federal

and state Constitutions provide that private property may not

de taken or damaged for public use without payment of just

compensation to its owner (Cal. Const., art I, § 19; U.S. Const..

5th Amend.), a ‘mere diminution’ in property value due to a

zoning action is not compensable. (Agins v. City of Tiburon

(1979) 24 Cal.3d 266, 273-274...affd. (1980) 447 USS.

255....’ The developer argues that this statement is dictum

and bad law. The City recognizes that this statement may be

dictum, because damages were never in issue in the mandate

action. “Whatever may be said in an opinion that is not neces-

sary to a determination of the question involved is to be re-

garded as mere dictum.” (Ball v. Rodgers (1960) 187

Cal.App.2d 442, 450.) Damages were never prayed for in the

petition nor did the trial court reach the issue of the availability

of damages for inverse condemnation.

We are unable to determine on the record before us why the

prior appellate decision addressed the question of damages for

inverse condemnation. No judicial notice has been requested of

the briefs on the prior appeal. But res judicata does not only

2We need not determine whether inverse condemnation damages might be an alterna-

tive or additional remedy in a mandate action where a taking was found (see Code

Civ. Proc., § 1095; HFH, Ltd., supra, 15 Cal.3d 503, 518-520), since no taking

was found in the first action, thus eliminating the premise for a damage award.

B-8

preclude relitigation of issues already resolved in prior actions;

it also bars splitting a single cause of action into two seriatim

lawsuits. (Mattson v. City of Costa Mesa (1980) 106 Cal.App.3d

441, 446, and cases there cited.) “A party cannot by negligence

or design withhold issues and litigate them in consecutive

actions.”’ (Safeco Ins. Co. v. Tholen (1981) 117 Cal.App.3d

685, 697.)

Because a cause of action had questionable validity does not

mean that it should not have been raised in a prior action,

however. As already explained, Slater, supra, 15 Cal.3d 791,

796, holds that a change in the law is no basis for avoiding the

doctrine of res judicata. Thus, even if Agins is no longer the law

(a proposition which has been rejected by Aptos Seascape Corp.

v. County of Santa Cruz (1982) 138 Cal.App.3d 484, 493-494,

cert. den. ____ ~ U.S.____, 78 L.Ed.2d 73, after consideration of

some of the same authorities cited by developer here), such a

change in the law would not revive a primary right previously

adjudicated.

Seeking a different form of relief, of course, does not equate

with enforcing a different right. In Wulfjfen v. Dolton (1944)

24 Cal.2d 891, 895-896, a plaintiff was not allowed to seek

damages based on fraudulent representations when she had been

awarded rescission based on the same conduct in an earlier

action.

CONCLUSION

The prior action determined implicitly that the City had taken

no vested property right from the developer to develop by

building on its property. The action is res judicata although the

developer originally sought a different form of relief based on

this right.

The judgment is affirmed.

/s/

Agliano, J.

WE CONCUR:

/s/

Panelli, P.J.

/s/

Brauer, J.

Court House Plaza Co. v. City of Palo Alto

A019076

B-10

COPY

Court of Appeal of the State of California

IN AND FOS THE

Sixth Appellate District seal

WAY 22 1995

Out ot Agger

sone | Omen, at

Plaintiff and Appellant,

“a

CITY OF PALO ALTO, et al.,

Defendants and Respondents.

BY THE COURT

The Petition for Rehearing is denied.

PANELLI, P.J.

APPENDIX C

(1) Denial of Petition for Rehearing to California Supreme

Court

CEIVE

—~

—

3 AUG -9 Ail 3.40

—

ALDRITTON & HERDER SE

FLEUR, HOWRAH, FEET

”

ROBERT E. CARTWRIGHT

CARTWRIGHT, SUCHERMAN, SLOBODIN & FOWLER,

101 CALIFORNIA ST.

26TH FLOOR

SAN FRANCISCO, CA 94111

CLERK'S OFFICE. SUPREME COURT

4280 STATE BUILDING

Saw Francisco, Cauiroania 04102

JUL-3 41985

I have this day filed Order

REVIEW DENIED

In ve: No. —~A0I% 75

_—QOURT HOUSE PLAZA COMPANY

os.

THE CITY OF PALO ALTO

Respectfully,

APPENDIX D

(1) Notice of Appeal to the Supreme Court of the United

States

D-1

ROBERT E. CARTWRIGHT, ESQ.

CARTWRIGHT, SUCHERMAN, SLOBODIN

& FOWLER, INC.

101 California Street, 26th Fioor

San Francisco, California 94111

Telephone: 415/433-0446

Attorneys for Petitioner and Appellant

COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

COURT HOUSE PLAZA COMPANY, +) No. A019076

)

Petitionerand ) NOTICE OF APPEAL OF

Appellant, ) THE SUPREME COURT

) OF THE UNITED STATES

, )

)

THE CITY OF PALO ALTO,ETAL., )

)

Respondents. )

NOTICE IS HEREBY GIVEN that COURT HOUSE PLAZA COMPANY,

Petitioner and Appellant above, hereby appeal to the Supreme Court of

the United States from the final judgment of the State of California,

entered in this action on July 31, 1981, denying a petition for review after

decision by the Court of Appeal, Sixth Appellate District.

This appeal is taken pursuant to 28 U.S.C. & 1257(3).

Dated: August 16, 1985

CARTWRIGHT, SUCHERMAN, SLOBODIN

& FOWLER, INC.

By /s/

Robert E. Cartwright

Attorneys for Petitioner

and Appellant

APPENDIX E

(1) United States Constitution, Amendment V

(2) United States Constitution, Amendment XIV, Sections

1 and §

(3) Ordinance No. 2224

(4) Zoning Code Sections of the City of Palo Alto

E-]

UNITED STATES CONSTITUTION

AMENDMENT V

United States Constitution, Amendment V:

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indictment

of a Grand Jury, except in cases arising in the land or naval

forces, or in the Militia, when in actual service in time of

War or public danger; nor shall any person be subject for

the same offense to be twice put in jeopardy of life or limb:

nor shall be compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty, or property,

without due process of law; nor shall private property be

taken for public use, without just compensation.

E-2

UNITED STATES CONSTITUTION

AMENDMENT XIV, SECTIONS 1 and 5

United States Constitution, Amendment XIV, Sections | and 5:

Section 1. All persons born or naturalized in the United

States, and subject to the jurisidiction thereof, are citizens

of the United States and of the State wherein they reside.

No State shall make or enforce any law which shall abridge

the privileges or immunities of citizens of the Unites States;

nor shall any State deprive any person of life, liberty or

property, without due process of law; nor deny to any per-

son within its jurisdiction the equal protection of the laws.

Section 5. The Congress shall have power to enforce, by

appropriate legislation, the provisions of this article.

A+ ale al

E-3

ORDINANCE NO. 2224

ORDINANCE OF THE CITY OF PALO ALTO AMENDING

SECTION 3.02 OF ORDINANCE NO. 1324, THE ZONING

ORDINANCE, CHANGING THE ZONING OF CERTAIN

PROPERTY KNOWN AS 2655, 2705 AND 2723 BIRCH

STREET AND 251, 271, 276, 278, 280 AND 296 SHERIDAN

AVENUE FROM R-3:P TO P-C TO ALLOW PROFESSIONAL

AND COMMERCIAL OFFICES, AGENCIES AND USES

The Council of the City of Palo Alto does ORDAIN as

follows:

SECTION 1. Ordinance No. 1324, the Zoning Ordinance, is

hereby amended by amending Section 3.02, the “Zoning Map’’,

by changing the zoning of certain property known as 2655,

2705 and 2723 Birch Street and 251, 271, 276, 278, 280 and

296 Sheridan Avenue from R-3:P to P-C to allow Professional

and Commercial Offices, Agencies and Uses.

SECTION 2. A map describing said affected property and the

zone change contemplated hereby and a Development Plan

under Section 16.07 of the Zoning Ordinance are affixed here-

to, marked EXHIBIT A and by reference made a part hereof.

SECTION 3. The Development Plans, Drawing No. 1 entitled

“Area Map” dated 9-22-64; Drawing No. 2 entitled “Office

Building Floor Plans A’’ dated 9-22-64; Drawing No. 4 entitled

“Elevation” dated 9-24-64; Drawing No. 5R entitled “Parking

Garage Floor Plan’ dated 11-12-64; Drawing No. 6R entitled

“Construction Phasing” dated 11-12-64 are approved with the

exception of the portion of the subject property identified as

“Lot Area B” known as 2601 Birch Street in accordance with

the following conditions:

(1) Development Schedule

(a) Phase 1. Start of construction of the 4-story office

building on “Lot Area A,” and the parking garage on

(b)

“Lot Area C’’ within two (2) years of Council

approval.

Phase 2. Start of construction of the 5th to and in-

cluding the 10th story on “Lot Area A”’ and addition-

al levels on the parking garage on “‘Lot Area C” by

October 31, 1976.

(2) Permitted Uses

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Accountants

Advertising Agencies

Architects

Artists

Associations and/or Clubs

Attorneys

Banks

Bookkeeping and Tax Service

Collection Agency

. Commercial Parking Lots and Garages

. Consultants — management and investments

. Contractor’s offices (exclude yards)

. Credit Service Agency

. Dentists

. Electronics’ Representatives

Engineers — civil and consulting

Engineers ~- construction office, designing and

development, structural office

. Insurance — general, life, broker

. Manufacturers’ Representatives

Physicians and Surgeons

. Psychologists

22.

. Real Estate — appraisers, brokers, consultants

. Research — general offices, marketing, consultants

Publishers — (general office)

Restaurant

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26. Savings and Loan Companies

27. Secretarial Services — light printing

28. Social Clubs

29. Tabulating — statistical

30. Title companies

(3) Structures

Building location, dimensions, heights and other improve-

ments shall be substantially as indicated on the approved

Development Plan.

(4) Site

Lot coverage, open area, landscaping and access driveways

shall be substantially as indicated on the approved De-

velopment Plan.

(5) Off-Street Parking

There shall be one (1) off-street parking space for each one

hundred forty-four (144) square feet of net usable floor

area of the ground floors and one (1) parking space for

each two hundred eighty-eight (288) square feet of net

usable floor area on upper floors. Minimum dimension of

parking spaces, aisle and access space shall be as provided

in Section 4.51 of the Zoning Ordinance, except that the

minimum width of each parking space shall be nine (9)

feet.

SECTION 4. This ordinance shall become effective upon the

expiration of thirty days from its passage.

INTRODUCED: December 14, 1964

PASSED: December 28, 1964

AYES: Arnold, Beahrs, Byxbee, Comstock, Cooley,

Dias, Porter, Rodgers, Rohrs, Rus, Woodward,

Zweng.

NOES: Debs, Flint.

E-6

ABSENT: Cresap.

ATTEST: APPROVED:

/s/Shirley Kilgore /s/ B. Woodward

City Clerk, Acting Mayor

APPROVED AS TO FORM:

/s/ Robert E. Michalski

City Attorney

APPROVED AS TO CONTENT:

/s/ Louis J. Fourcroy

Planning Department

E-7

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ZONING CODE SECTIONS OF

THE CITY OF PALO ALTO

Chapter 18.68

P<C PLANNED COMMUNITY DISTRICT REGULATIONS

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18.68.010 Purpose. The P-C district is designed to accom-

modate various types of development such as neighborhood

and district shopping centers, professional and administrative

areas, multiple housing developments, single-family residential

developments, commercial service centers and industrial parks

or any other use or combination of uses which can be made

appropriately a part of a planned development.

2K KKK

18.68.030 Uses permitted. All and any uses are permitted

in a P-C district provided such use or uses are shown on the

development plan for the particular P-C district as approved by

the city council. *****

18.68.040 Uses requiring use permits. A use permit shall

be required for any and all uses in a PC district *****. Upon

payment of the fee required by Section 18.90.040 for use

permits, a use permit shall be issued without a public hearing if

the proposed structure or structures comply with the develop-

ment plan and conditions thereof. The zoning administrator

may impose additional conditions and requirements on the

use permit as he deems necessary to secure the purposes of this

title and the approved development plan. If the applicant is

aggrieved by the action of the zoning administrator through his

denial of the use permit or conditions imposed thereon, he may

appeal such denial or conditions under the procedures set forth

in Chapter 18.92. *****

18.68.050 Height and space requirements. Maximum height

and bulk and minimum setback, yard, parking and loading

requirements shall be established for each P-C district by the

development plan approved by the city council. *****

18.68.060 Establishment of P< districts. P-C districts may

be established or removed from the zone map upon the applica-

tion of a property owner or owners or upon the initiative of the

city council or planning commission in accordance with the

procedures set forth in Chapter 18.98. *****

18.68.070 Development plan. An application for a P-C

district shall include and be accompanied by a development

plan which, if approved by the city council, shall become a part

of the zoning map of the city of Palo Alto as provided for by

Section 18.08.040.

(a) Changes in the development pian shall be considered the

same as changes in the zoning map and shall be made in accor-

dance with the procedures set forth in Chapter 18.98 of this

title, except that such change may be accomplished by city

council resolution rather than the passage of an ordinance or,

when applicable, by the final decision of the director of plan-

ning, pursuant to Chapter 18.99 of this title, for administrative

approval of minor changes in projects.

(b) The development plan shall include:

(1) A map showing any street systems and lot design pro-

posed within the district. *****

(4) A plot plan for each building site or sites in the pro-

posed P-C district or any portion thereof, as required by the

zoning administrator. ***** The required plot shall show the

approximate location of all proposed buildings, indicating maxi-

mum and minimum distances between buildings and between

buildings and property or building site lines, and shall indicate

the general location and type of landscaping. *****

(a) Off-street parking and loading plan.*****

(6) Elevations and/or perspective drawings of all proposed

structures *****, Such drawings need not be the result of final

architectural decisions and need not be in detail. The purpose

of such drawings is to indicate, within stated limits, the height

of proposed buildings and the general appearance of the pro-

posed structures to the end that the entire development will

have architectural unity.*****

18.63.080 Development schedule. A. An application for a

P-C district shall be accompanied by a development schedule

indicating to the best of the applicant’s knowledge the approxi-

mate date on which construction of the project can be expected

to begin, the anticipated rate of development and completion

date. The development schedule, if approved by the city

council, shall become a part of the development plan and shall

be adhered to by the owner of the property in the PC district

and his successors in interest.

B. From time to time the zoning administrator shall com-

pare the actual development accomplished in the various P-C

districts with the approved development schedules and shall

report his findings to the planning commission.

C. If in the opinion of the planning commission the owner

or owners of property in PC districts are failing or have failed

to meet the approved development schedule, the commission

may initiate proceedings under Chapter 18.98 to remove the

P-C district from the zoning map or te amend the development

plan.

D. For good cause shown by the property owner in writing,

prior to the expiration of the original time schedule for the

development, the planning commission, without a public hear-

ing, may recommend a change or extension of the time limits

imposed by the development schedule. Upon receipt of the

recommendation of the planning commission, the city council

may change or extend the time limits imposed by the develop-

ment schedule. *****

Chapter 18.90

VARIANCES AND USE PERMITS

3 2 2

18.90.050 Public hearing—Time of hearing. Upon the filing

of such application, the zoning administrator shall set the

matter for public hearing and such hearing shall be within thirty

days of the filing of such application. *****

18.90.060 Public hearing—Notice. (a) A notice of such hear-

ing shall be mailed to the applicant, and to each occupant and

person to whom is assessed the property within two hundred

fifty feet of the exterior limits of the property involved. *****

18.90.070 Public hearing—Decision. At the time and place

set for such hearing the zoning administrator shall hear evidence

for and against such application, shall make findings and shall

take such action as in his opinion is indicated by such evidence.

Each hearing shall be open to the public. He may continue from

time to time any hearing held by him. A decision shall be ren-

dered by the zoning administrator within ten days after conclu-

sion of the hearing, ***** (Ord. 1521 (part), 1954: Ord. 1324

3K KK OK OK

ene

E-12

18.90.090 Grounds for granting variance. A. Granting Vari-

ance. The zoning administrator may grant a variance from the

area, height, yard and space requirements of this title if, from

the application or the facts presented at the public hearing, he

finds:

(1) There are exceptional or extraordinary circumstances

or conditions applicable to the property involved that do not

apply generally to property in the same district; and

(2) The granting of the application is necessary for the

preservation and enjoyment of a substantial property right of

the applicant and to prevent unreasonable property loss or un-

necessary hardship and will not be detrimental nor injurious to

the property or improvements of other owners of property; and

(3) The granting of the application will not be detrimental

to the public welfare or convenience.

In granting such variance the zoning administrate” may im-

pose such reasonable conditions or restrictions as he i«*##$..p-

propriate or necessary to protect the public health, safety or

welfare.

B. Variance from Setback Ordinance. The zoning admin-

istrator may grant a variance from the requirements of the set-

back ordinance, if facts presented in the application or at the

public hearing support both paragraphs (2) and (3) of subsection

A of this section. (Ord. 1914 (part), 1960: Ord. 1521 (part),

1954: Ord. 1324 § 23.09, 1951).

E-13

18.90.120 Revocation—Extension. *****

A use permit or a variance which has not been used within

one year after the date of granting thereof becomes null and

void and of no effect unless specifically issued for a longer time

period. The zoning administrator may, without a hearing,

extend such time for an adewaonal year only upon application

filed with him before the expiration of the first year. *****

Chapter 18.92

APPEALS

aOR ROK oe

18.92.010 Appeal. An appeal may be taken to the planning

commission by any person, firm or corporation aggrieved or

affected by any determination of the zoning administrator.

18.92.020 Filing—Procedure. An appeal shall be in writing

and filed in duplicate with the city clerk within ten days after

the mailing of notice of the decision of the zoning administra-

tor. * KKK

18.92.0230 Hearing date—Notice. Upon receipt of the

appeal, the city clerk shall set the appeal for hearing at a meet-

ing of the planning commission to be held for such purpose not

more than four months thereafter. Notice of such hearing shall

be given in the same manner as provided in Chapter 18.90 for

notice of hearing by the zoning administrator. *****

18.92.040 Stay of proceedings. Filing of an appeal shall

stay all proceedings in furtherance of the action appealed from

until the determination of the appeal as provided herein. *****

18.92.050 Hearing on appeal. Upon the date set therefor

the planning commission shall hold a public hearing of the

appeal unless, for cause, the commission shall on that date con-

tinue the matter. Upon the hearing of such appeal the commis-

sion shall hear evidence, make findings and recommend to the

city council that the decision appealed from be affirmed,

changed or modified, or in lieu thereof, make such other or

additional recommendations as it shall deem proper in the

premises, subject to the same limitations as are placed on the

zoning administrator by this title. *****

18.92.060 Recommendation to city council. The findings of

the planning commission shall be submitted in the form of a

recommendation to the council and placed on the agenda of the

next regular council meeting by the city clerk. *****

18.92.070 Action by city council. Upon the receipt of the

recommendation of the planning commission the city council

may, if it so desires, hold a public hearing of the matter in the

same manner as provided for public hearings by the zoning

administrator, or may consider the appeal without a hearing. In

conformity with the provisions of this title, the council may by

motion reverse or affirm wholly or partly, or may modify any

decision, determination or requirement of the commission and

may make such decision or determination or may impose such

conditions as the facts warrant, and its decision or determina-

tion shall be final. *****

Chapter 18.98

AMENDMENTS, ALTERATIONS, CHANGES IN DISTRICTS

oe a ee

18.98.010 Conditions requiring zone changes. This title may

be amended by changing the boundaries of districts or by

changing any other provision thereof whenever the public

interest, health, safety, morals, peace, comfort, convenience or

general welfare may so require. *****

18.98.020 Manner of initiating. Changes in the district

boundaries may be initiated as follows:

(a) By motion of the city council on its own initiative;

(b) By motion of the planning commission on its own

initiative; or

18.98.030 Application by property owner. An application

for a change of district may be made by a record owner of the

parcel of property for which a change is sought or by a pur-

chaser thereof under a contract in writing duly executed and

acknowledged by both the buyer and the seller, by a lessee in

possession thereof, with the written consent of the owner of

record of the legal title to make such application, or by the

agent of any of the foregoing, duly authorized in writing. The

application must be in writing on a form supplied by the divi-

sion of planning. *****

18.98.060 Notice of public hearing. The planning com-

mission shall give notice of the time and place of such hearing

and the purpose thereof *****

E-16

18.38.9070 Public hearing. *****

The recommendation of the commission to the council shall

be in writing and shall set forth fully the findings and determi-

nations of the commission on the matter involved. A decision

shall be rendered within a reasonable time and a recommenda-

tion shall be filed with the council within seven days after the

decision is rendered by the planning commission. *****

18.98.080 Powers of the city council upon recommenda-

tion. Upon receipt of the recommendation of the planning com-

mission as provided herein, the city council shall consider the

same and may change or refuse to change the classification of

any property as requested or recommended and its decision

thereon shall be final and conclusive. If the city council so de-

sires it may hold a public hearing on the matter in the same

manner as provided in Section 18.98.070 hereof where applica-

ble. If the classification of any property is to be changed an

ordinance shall accordingly be passed and thereupon the zoning

administrator shall change the official zoning map in conformi-

ty therewith. *****

18.98.090 Initiative of the city council or the planning com-

mission. The city council may, be a minute order, request the

planning commission to consider any property; or the planning

commission may, of its own initiative, consider such a change.

In either case the planning commission shall proceed as though

an application for change had been filed with the planning de-

partment as provided in Section 18.98.030 hereof. *****

E-17

Chapter 18.99

ADMINISTRATIVE APPROVAL OF

MINOR CHANGES IN PROJECTS

aK OK

18.99.0106 Purpose of chapter. The purpose of this chapter

is to provide a uniform and orderly procedure for expeditious

administrative approval of minor changes to existing projects

and plans. (Ord. 2927 § 1 (part), 1976.)

18.99.020 Definition of minor change. “Minor change”

means an alteration or modification of an existing plan, de-

velopment or project which is inferior in bulk, degree, or im-

portance to the overall dimension and design of the plan,

development, or project, with no change proposed for the use

of the land in question, no change proposed in the character of

the structure or structures involved, and no exception or vari-

ance required. (Ord. 2927 § 1 (part), 1976.)

18.99.030 Applicability of chapter. (a) Type of applica-

tions. This chapter shall apply to applications for a minor

change to the following:

(1) An approved development plan for a planned communi-

ty district pursuant to Chapter 18.68 of this title; *****

APPENDIX F

(1) Inter-office Communication of the City of Palo Alto of

February 3, 1979

(2) Letter of City of Palo Alto of May 23, 1968, by Donald G.

Meaney, Assistant City Attorney

F-]

CITY OF PALO ALTO

INTER-OFFICE COMMUNICATION

To: City Manager Date: February 3, 1970

From: Sr. Assistant City Attorney Department:

SUBJECT: California Lands Building

260 Sheridan Avenue

Please find attached a copy of a letter which is being sent to

Mr. Dunn concerning the smokeshaft problem regarding the

above reference property. Mr. Dunn, his architect, Mr. Hoover,

and his attorney, Mr. Cliff, have agreed to those conditions.

As you know, this rulling comes from this office on the basis

that Ordinance 2224 contemplated the 10 story building with

an interior smokeshaft and the development plan attached to

the ordinance specifically shows a 10 story building with no

exterior smokeshaft. This understanding was confirmed by

Mr. Keithley’s letter of June 4, 1965. Therefore, it would

appear that certain rights vested. Those rights are with respect

to a building with an interior smokeshaft, which building is

unsprinklered. It should be noted here that henceforth all P-C

ordinances, most particularly those which contemplate de-

velopment in phases, will include language similar to or identical

with the following:

‘**All construction under this ordinance shall be in accordance

with applicable building and fire codes in effect at the time

that the building permit for each phase of building is issued.”

We are confident that this language would eliminate any future

problems of a similar nature.

PETER G. STONE

PGS.rb

cc: Chief Building Official

Assistant Building Official

Assistant Fire Chief

Fire Marshal

I ciciiiiiatidiaeabitenietiitiin nae

F-2

Office of the City Attorney May 23, 1968

Mr. W. G. Dunn

California Lands Investment Company

430 Cambridge Avenue

Palo Alto, California

Re: City of Palo Alto Resolution No. 4113

(P-C Development for Property Known as

260 Sheridan Avenue - Palo Alito).

Dear Mr. Dunn:

In answer to the question from your lender, the offset of viola-

tion of the Development Schedule in the P-C plan, as amended

by Resolution No. 4113, simply means that the Development

Plan would become defunct and that before any construction is

undertaken, application must be made for an amendment ex-

tending the Development Schedule.

Thus, in the sense that compliance with the Development Plan

is necessary to avoid its lapse, construction of the permanent

structure must start on or before October 21, 1976. However,

this does not mean that the City of Palo Alto has any right,

either under its own municipal code or under State law, to re-

quire specific performance on the developer in the form of con-

struction of the building, or to sue for damages.

The lapse of the Development Plan can be prevented by apply-

ing for an extension of the Development Schedule if necessary.

While this letter should not and cannot be construed as a com-

mitment on the part of the City of Palo Alto to grant such

further extensions, inasmuch as this authority is vested in the

City Council, these extensions have, in fact, customarily been

granted. The reason for this is simply that the City is not any

more interested than the owners in having a development

remain half completed.

The date in the Resolution coincides with the date for com-

mencement of construction of the rest of the stories of the

office building itself. Thus, the only real and practical effect of

failure to start building the parking structure according to the

Development Schedule in Resolution No. 4113 is to cause the

entire second phase portion of the Development Plan to lapse,

F-3

so that if any more construction is undertaken, it would be

after a new Development Schedule of both buildings satisfac-

tory to the City.

Very truly yours,

JAMES A. HILDEBRAND

City Attorney

BY DONALD G. MEANEY

Assistant City Attorney

BSM:km

cc: Planning Officer

City of Palo Alto

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.