Opposition Brief — Court House Plaza Co. v. City of Palo Alto

Supreme Court, U.S.

FILED

(4) | OCT R 1086

No. 85-287 | SEPH F. SPANIOL, JR.

K

In the Supreme Court-———

OF THE

United States

OCTOBER TERM, 1985

CourT HOusE PLAZA COMPANY, 2 limited partnership,

Petitioner,

VS.

THE City OF PALO ALTO,

a municipal corporation, et al.,

Respondents.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

TO THE COURT OF APPEAL

FOR THE STATE OF CALIFORNIA

DIANE LEE

City Attorney

City of Palo Alto

250 Hamilton Avenue

Palo Alto, CA 94301

(415) 329-2171

FRED CAPLOE*

A Professional Corporation

WILLIAMS, CAPLOE & ROBBINS

1060 Grant Street, #201

P.O. Box 698

Benicia, CA 94510

(415) 228-3840

(707) 746-1011

Attorneys for Respondents

*Counsel of Record

BOWNE OF SAN FRANCISCO, INC. > 190 NINTH ST. « S.F.. CA 94103 + (415) 864-2300

QUESTION PRESENTED

Whether California law of res judicata precludes the present

action for inverse condemnation damages under the California

Constitution by reason of a final judgment on the merits against

petitioner and in favor of respondents in a prior state court action

which adjudicated the same facts, same cause of action and same

constitutional provision and held that there was no inverse

condemnation?

No question of federal law is presented.

ii

TABLE OF CONTENTS

oo gf PETE er vee

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A.

B.

IR ns Sa cea be cae

Nature and Procedural History of the Present

Action and Two Prior Related Actions ..........

1. Petitioner's First State Court Action (“CHP

I’): This Court Has Previously Denied Review

of a State Court Final Judgment on the Merits,

Against Petitioner and In Favor of Respor.

dents, Following a 5-Week Trial Which Liti-

gated the Same State Constitutional Claim and

Predicate Facts Asserting Injury to Property as

Ate REE TH iv 5 5 kia hahah eaeKees

2. Petitioner's Federal Action (“CHP III’’): This

Court Again Denied Certiorari After the Ninth

Circuit Court of Appeals Affirmed Dismissal

on Grounds of Res Judicata of Petitioner’s

Damage Action Alleging Identical Constitu-

tional Taking Claims and Predicate Facts as

GE vvcsndacessaesee eee

3. Petitioner’s Second State Court Action (“CHP

IT’): The Trial Court Below Dismissed as Res

Judicata the Present State Constitutional Tak-

ing Claim and Action, Which is a Mirro:

Image of CHP III, and the Court of Appeal

Bees FE «nx oct nuncéasepdabeee ee

may GE AMIR osc in 5 boc sndnewaweree ees

i

If.

The United States Supreme Court Has No Jurisdic-

tion to Decide Questions of State Law When Review-

ing Decisions of State Courts ..........ccccceeese

There Is No Question of Federa] Law Presented in

BR CORR no ccc ves kc 0cs03 0) auekee ek eee

Page

1]

i}

TABLE OF CONTENTS

Page

A. The California Court of Appeal Held Petitioner’s

Claim to Be Barred by the California Law of Res

Ree ioc Ck ca ue so cee aeons so 13

B. The Single Substantive Claim In This Suit Was

ek cece ch anecaeueseareas 14

Conclusion 15

nn an ee ee eee EERE EEO SOE OEE ER EE 8 OS HO OS

iv

TABLE OF AUTHORITIES CITED

Cases

Page

Agins v. City of Tiburon, 447 U.S. 255 (1979) ........ a2 2

Boccardo v. Safeway Stores, Inc. (1982) 134 Cal. App. 3d

SNe eee erry Terr yer TTT ee 12

Court House Plaza Co. v. City of Palo Alto, 117 Cal. App.

3d 871 (1981), cert. den., 454 U.S. 1074 (1981) .... passim

Court House Plaza Co. v. City of Palo Alto, 709 F.2d 1515,

cort. dom, 464 US. 93S (USGS) «2... ccc ccc ccccess passim

Ellis v. Dixon, 349 U.S. 458 (1954) .............0 008 14

Murdock v. City of Memphis, 20 Wall. (87 U.S.) 590

SEE eS chino endesepeeaseesneewkenne ceuaegaasees 11

Penn Central Transp. Co. v. New York City, 438 U.S. 104

CUTE sa vis «kad oak ARRAKKAHAND AN ORO NR KGS OOK eS eX 3

Slater v. Blackwood (1975) 15 Cal. 3d 791 ............ 12

Wulfjen v. Dolton (1944) 24 Cal. 2d 891.............. 12

Statutes and Rules

Federal Rules of Evidence, Rule 201.................. 2

Supreme Court Rules:

yp fh Are rerrrr ery eter ere Tree 2

DS EE ch acbncsccacdanacsddshanseseceneenss 2

Be SE OEE wd 5404 ge ecankhcseeewacuuees 3, 14

——

No. 85-287

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1985

Court House PLAZA COMPANY, a limited partnership,

Petitioner,

VS.

THE CITy OF PALO ALTO,

a municipal corporation, et al.,

Respondents.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

TO THE COURT OF APPEAL

FOR THE STATE OF CALIFORNIA

STATEMENT OF THE CASE

A. INTRODUCTION

Petitioner is seeking review in this Court for the third time in

this lengthy, eight year, vexatious litigation against the same

respondents. On the two previous occasions, this Court denied

review. A brief recapitulation of the history of this litigation will

demonstrate the frivolity of this third petition, and the absence of

any issue that would permit this Court to take jurisdiction of this

case.

Briefly, the facts pertinent to this proceeding are as follows.

' Petitioner’s Statement of the Case (Petition (“Pet.”) pp. 2-5) fails

to give a complete picture of the case because, on its face, it is limited to

the facts alleged in the complaint in the present action (“CHP iI’’). The

2

In 1964, respondent City of Palo Alto, at petitioner’s request,

zoned petitioner’s property for construction of an office building

and garage in two phases. The zoning ordinance required that

construction of Phase | (4-story office building and garage) be

started by 1966, and that Phase 2 (6 more floors on the same

office building) be started by 1976. Nothing in the ordinance

stated that completion of Phase | vested any right to complete

Phase 2. App. A, p. A-15, CL 3. The CHP / trial court found that

the Phase | 4-story building was

“a self-contained, functional structure even without the addi-

tional six floors, and has been occupied and used up to and

including the present.” (Emphasis added)

App. A, FF 13.

The trial court also found that petitioner “did not acquire

vested rights to construct Phase 2 by virtue of overbuilding Phase

I tc accommodate it or in any other respect”. App. A. FF 61, CL

12.2 As to Phase 2, the court found that petitioner fully obligated

itself to pay for Phase 2 costs before obtaining financing or a

incompleteness is inconsistent with Rule 21.1(g) requiring the Petition

to contain “facts material to the consideration of the question

presented”.

At this point, in compliance with Rule 34.1(g) requirements that

respondents’ statement of the case contain “all that is material to the

consideration of the questions presented with appropriate references to

... the record ...”, and pursuant to Rule 201 of the Federal Rules of

Evidence, respondents respectfully request this Court to take judicial

notice of the Appendices to this brief which contain copies of records of

proceedings before the various courts that have considered and litigated

this action and related state court actions referred to throughout this

brief.

Appendix A to this brief sets forth detailed Findings of Fact (“FF”)

and Conclusions of Law (“CL”) by the trial court in the first state court

action between the same parties on the same cause of action. That

action is called “CHP J” in this brief. The Findings and conclusions

followed a 5-week trial in which res, ondents prevailed over petitioner.

2 The Court of Appeal below also confirmed that the CHP / trial court

“repeatedly rejected the notion that the developer acquired any vested

rights” (Pet., App. B, p. B6), and that “no taking was found in the first

3

building permit therefor; and that this mistake, not any act of

respondents, resulted in petitioner’s financial problems. App. A,

FF 20-23. There was no evidence of an anti-high rise philosophy

on the part of respondents nor any intent to delay or obstruct

petitioner. App. A., FF 23, 24, 32-37, 59-63, CL 15. As to

respondents’ refusal to extend the 1976 deadline for start of Phase

2, the trial court concluded that petitioner

“... had not at any time acquired vested rights to a building

permit to construct Phase 2; therefore, the (City’s) denial of

the one-year extension did not constitute a deprivation of

vested rights.”

App. A, CL 13.

Thus, CHP I clearly settled that petitioner had no reasonable,

investment-backed expectation in Phase 2; that the City had not

interfered with petitioner’s property rights; and that petitioner has

an economically viabie use of the property. Agins v. City of

Tiburon, 447 U.S. 255 (1979); Penn Central Transp. Co. v. New

York City, 438 U.S. 104, 138 (1978).

In CHP I, petitioner first sought mandamus against respondent

City of Palo Alto in California Superior Court, contending, inter

alia, that its property had been taken in inverse condemnation

under both the California and federal constitutions. The Superior

Court denied relief; the California Court of Appeal affirmed; and

the California Supreme Court denied review. Petitioner then

soughi federal review of the judgment of the Court of Appeal, but

this Court denied certiorari. Court House Plaza Co. v. City of

Palo Alto, 117 Cal. App. 3d 871 (1981), treating appeal as pet.

for certiorari, cert. den., 454 U.S. 1074 (1981).

Petitioner then brought a damage action in federal District

Court, again contending that its property had been taken in

inverse condemnation. The District Court found that the inverse

condemnation claim had already been adjudicated adversely to

petitioner in CHP J, and held the claim barred by res judicata

under 28 U.S.C. section 1738 (and hence by res judicata under

action, thus eliminating the premise for a damage award” (/d., p. B7, fn.

2, and p. B8 (Conclusion) ).

4

California law). The Court of Appeal for the Ninth Circuit

affirmed in a one-sentence unpublished memorandum opinion.

Petitioner sought review of the Ninth Circuit’s decision, but this

Court denied certiorari. Court House Plaza Co. v. City of Palo-

Alto, 464 U.S. 935 (1983). Petitioner refers to this suit as CHP

III, and respondents adopt this nomenclature.

Three months after filing its damage action in federal District

Court in CHP Ili petitioner filed an amended complaint for

damages in Califo: .ia Superior Court, contending once again that

its property had been taken in inverse condemnation. Petitioner

refers to this suit as CHP IJ, and respondents adopt this nomen-

clature. The compiaint in CHP I/ was identical to the cw.~ »laint

in CHP III. As the federal District Court in CHP III had uone,

the California Superior Court in CHP // found that the claim was

barred by res judicata under California law because of the

decision in CHP J. The California Court of Appeal below af-

firmed. Petitioner seeks review in this Court of the Court of

Appeal Decision.

stitioner, now petitioning this Court for the third time, con-

tends that this case presents a substantive federal issue concerning

the availability of damages in an inverse condemnation suit. As is

apparent from the preceding summary and as will be explained in

greater detail below, that issue is not present in this case. The only

issue is one of California law—whether the California Court of

Appeal correctly applied the California law of res judicata. This

Court does not have jurisdiction to decide questions of state law

when reviewing decisions of a state court.

B. Nature and Procedural History of the Present Action and

Two Prior Related Actions

To fully appreciate that the present petition is limited to the res

judicata issue, it is necessary to describe the present action and

two prior related actions between the same parties on the same

cause of action (i.e., CHP J, Il and III).

5

1. Petitioner's First State Court Action (“CHP I”): This

Court Has Previously Denied Review of a State Court

Final Judgment on the Merits, Against Petitioner and

In Favor of Respondents, Following a 5-Week Trial

Which Litigated the Same State Constitutional Claim

and Predicate Facts Asserting Injury to Property as Are

Alleged Herein.

Petitioner originally brought an action in California state court

in 1977 challenging respondents’ legislative zoning decision deny-

ing permission to build six additional stories on a fully function-

ing, occupied four-story building. Petitioner alleged a breach of

both state and federal constitutional rights, including an unconsti-

tutional taking of property, and sought mandamus based on those

claims.’ Following full discovery and a 5-week trial, the trial court

found that none of petitioner’s constitutional rights had been

violated.* The California Court of Appeal affirmed, concluding

that there had been no taking of petitioner’s property. Court

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

871, 887-888 (1981). The California Supreme Court denied

petitioner’s petition for hearing. CHP J, 117 Cal. App. 3d at 888.°

> The state constitutional taking or inverse condemnation claim was

raised in paragraph 92 of the 61-page petition for writ of mandate in

CHP I. (That petition is found at pages 113-174 of the Clerk’s

Transcript before the Court of Appeal below; and paragraph 92 is found

at CT 170.) Paragraph 92 reads in pertinent part: “... Respondents

have denied Petitioner the lawful use of its real property, have taken the

same without compensation . . . and in contravention of . . . the Constitu-

tion of the State of California and the United States of America... ”.

The same taking claim is raised in the present action. Pet., App. A,

p. Al3, “Second Cause of Action”, paragraph 27.

* Appendix A to this brief contains separately numbered “Findings of

Fact and Conclusions of Law” of the state trial court in CHP /. They

were also presented to and considered by both the trial court and the

Court of Appeai below through judicial notice.

* CHP I resulted in a final judgment on the merits. Petitioner has

never contended otherwise.

6

Petitioner then filed a Jurisdictional Statement in this Court

seeking review of that judgment. Referring directly to its factual

and constitutional taking claim that had been litigated adversely

to it in all state courts in CHP I, petitioner contended:

“The present case clearly presents the issue of whether

California under the recent ruling in Agins v. City of

Tiburon, 24 Cal. 3d 266 (1979) that a property owner’s

exclusive remedy is invalidation of the zoning regulation

where the zoning regulation deprives the property owner of

substantially all beneficial use of the real property right and

is not entitled to an award of damages in an inverse condem-

nation proceeding... can deny [petitioner] any monetary

compensation... ”.

CHP I, No. 81-404, Jurisdictional Statement, pp. 11 and 13.° This

passage frames the precise issue which Petitioner again seeks to

revive in the present petition. Pet., Issues I and II, pp. 6-15.

However, this Court dismissed the appeal and, treating it as a

petition for certiorari, denied the petition. CHP I, 454 U.S. 1074

(1981).

2. Petitiv-zer’s Federal Action (“CHP III’): This Court

Again Denied Certiorari After The Ninth Circuit Court

of Appeals Affirmed Dismissal on Grounds of Res

Judicata of Petitioner’s Damage Action Alleging Iden-

tical Constitutional Taking Claims and Predicate

Facts as CHP I.

Three days after this Court denied certiorai: in CHP I, Peti-

tioner filed on December 3, 1981, an action in United States

District Court seeking damages for violation of the identical

® Petitioner also contended therein:

“The present case presents a factual situation which gives the

Supreme Court jurisdiction to decide the monetary issue where the

Property Owner has been foreclosed from any use of the rights to

six additional stories of a ten-story office building by chailenged

zoning regulations and also has been foreclosed from monetary

compensation.” (Emphasis added) CHP I, No. 81-404, Jurisdic-

tional Statement pp. 25-26.

DEI ite. MC Ge

7

federal and state consitutional taking provisions, based on the

same underlying facts, as it alleged in CHP I (“CHP III’’).’

On June 4, 1982, the District Court dismissed CHP III holding:

“Because plaintiff's action is precluded by the res judicata

effect of a prior judgment in state court [i.e., CHP /],

plaintiff's action must be dismissed . . .

“The federal claims here are based on the same alleged

wrongful acts which formed the basis of plaintiff's state court

mandamus action...

“(T]he alleged violations of the federal constitution have

been adjudicated in state court. The state court of appeal

upheld the trial court’s findings that the denial of the time

extension [to build the six story addition] did not deprive

plaintiff of equal protection or due process of law, Court

House Plaza v. City of Palo Alto, 117 Cal. App. 3d at 883,

and the city’s adverse zoning action did not constitute a

‘taking’ requiring compensation. \d. at 888.” (emphasis

added)

App. B.

A three-judge panel of the Court of Appeals for the Ninth

Circuit unanimously affirmed the District Court’s dismissal, on

res judicata grounds, in a one sentence unpublished memorandum

order on May 2, 1983. App. C. The Court of Appeals judgment is

reported at 709 F. 2d i515.°

Acting for the second time, this Court again denied a petition

for writ of certiorari. 464 U.S. 935 (1983).

’ As a practical and sequential matter, this federal action followed

next on the heels of CHP J. However, petitioner has referred to the

federal action as CHP III in its petition (p. 5). Therefore, to avoid

confusion, that designation will be used herein.

® The Court of Appeal below in the present action took judicial notice

of the dismissal of CHP III because of the res judicata effect of CHP I.

Pet., App. B, p. B3.

8

3. Petitioner’s Second State Court Action (“CHP II’):

The Trial Court Below Dismissed As Res Judicata The

Present State Constitutional Taking Claim and Action,

Which Is A Mirror Image of CHP III, and the Court of

Appeal Below Affirmed.

On February 26, 1982, three months after this Court denied

certiorari in CHP I, petitioner filed the present CHP IJ complaint

seeking damages against the same defendants named in CHP /

and J/I. CHP II is a verbatim copy of the CHP III complaint.

Petitioner later reserved its federal claims, so that the court below

had only a state claim before it.’ Pet., App. A, p. A20. (CHP had

not reserved any claims in CHP I.) However, as conceded by

petitioner in its reservation, CHP III

“states claims for relief that are in substance identical to the

causes of action in the First Amended Complaint before this

Court.”(CT 280)

(The takings clauses of the United States and California Consti-

tutions are virtually identical.)

The Ceurt of Appeal below, commenting on the allegations of

the CHP II amended complaint, emphasized that “[n]umerous

allegations in the... complaint contradict the findings made in

| CHP I)’, that the trial court below had judicially noticed the

CHP I mandamus petition, detailed findings and appellate opin-

ion; and that, therefore, “[o]n demurrer, the court is not required

to assume the truth of allegations which contradict what is

judicially noticed”. Pet., App. B, pp. B1-B2. The Court of Appeal

also noted petitioner’s concession that the facts in CHP J and

CHP II were the same. /d., p. B1.

* Respondents filed a demurrer and motion to strike the first amended

complaint in CHP II. Pet., App. A, pp. Al8-19. Attached to their

Memorandum of Points and Authorities in Support thereof were Exhib-

its A-K. See App. D to this brief, consisting only of the title page and

page |b listing those exhibits. Exhibits C-K are essentially the same

exhibits that respondents presented to the federal District Court for

judicial notice in connection with its motion to dismiss in CHP III.

'° Those CHP I findings are set forth in Appendix A to this brief.

wheal Da MT Div el cdeee ts A OME Bi Ans The Sno ane

ae ae ee

The trial court below took judicial notice of the holding of the

Court of Appeal in CHP / “in which the court [of appeal] held

that piaintiff was not entitled to compensable damages under a

theory of inverse condemnation. Such damages would include any

that flow from interference with use of air space.” Pet. App. A, p.

A21. It concluded that petitioner’s claim was barred by CHP I:

“{T ]he demurrer to the second cause of action [state inverse

condemnation ] is sustained on the grounds that that cause of

action is barred by res judicata. Since there is no basis for an

amendment, the demurrer is sustained without leave to

amend.”

Ibid."'

The Court of Appeal below addressed and decided only the res

judicata issue. As the Court noted at the outset: “The critical

question in this appeal is: does that judgment [CHP /] bar the

developer from seeking damages in imverse condemnation based

on the same actions by the City? The irial court so decided...

We agree with the [trial] court’s decision.” Pet., App. B, p. B1.

Thus, the Petition is erroneous in stating that the Court of Appeal

“concluded under Agins v. City of Tiburon, 24 Cal. 3d 266, 272-

277 (1979), affd. on other grounds, 447 U.S. 255 (1980)” that

the appropriate remedy for a taking by excessive zoning regula-

tions is not money damages but equitable relief. Pet., p. 5.

As is evident from the face of the opinion, the Court of

Appeal’s discussion of inverse condemnation was merely a histori-

cal preface to its holding on the single res judicata issue before it.

Pet., App. B, pp. B3-B4. More specifically, the Court of Appeal,

in that portion of the opinion, was simply explaining, for res

judicata purposes, the nature of the cause of action or, in

California res judicata terms, the primary right at issue in CHP |

'' The petition misstates the trial court’s decision in that it indicates

that the court held that petitioner “was not entitled to ... damages

under . . . inverse condemnation . .. and that CHP II was barred by res

judicata.” (Emphasis added.) Pet., p. 5. In fact, the trial court held that

petitioner was not entitled to inverse condemnation damages because

CHP II was barred by res judicata. Pet., App. A, p. A21.

10

and //, preliminary to its single holding that it was identical in

both actions and that, therefore, preclusion applied. The Court of

Appeal noted that the property mght involved in CHP J was

“clearly a right to develop property by building on it and presuma-

bly to profit...”. Pet, App. B, p. B4. It then went on to explain

briefly the state of the law when CHP / and II were filed. Jbid.

Thereafter, the body of the opinion, entitled “Res Judicata”’,

points out that “[t]he developer’s argument [that CHP II does

not involve the same primary right as CHP /] can prevail only if

the property right to be compensated by inverse condemnation

damages was not involved in [CHP I]”. Id., p. BS. The Court of

Appeal carefully examined what was actually litigated in CHP /;

and, comparing it to CHP II, noted petitioner’s reluctance to do

so. The court then emphasized that petitioner had alleged a

taking in CHP I, that the CHP / “apeilate opinion shows that a

central issue was whether the developer had acquired a vested

right” and that the CHP / trial court “repeatedly rejected the

notion that the developer had acquired any vested rights... ”’. Jd.,

p. B6. The Court of Appeal concluded: “Thus, the same primary

right was at issue in [CHP /j which the developer seeks to

reassert here...” . Jd,. pp. B6-B7.

Thus, the entire petition evaporates in the face of the foregoing

review of what was actually decided by the Court of Appeal

below.

In sum, petitioner litigated and lost all of its federal and state

constitutional claims (and their factual predicates) in CHP I. It

has tried to relitigate those same federal constitutional claims and

facts in federal court, and all federal courts found that they had

already been adjudicated and are therefore barred by res judicata.

CHP III. It has tried to relitigate the same state constitutional

claims and facts in state ccurt, and the state trial court and Court

of Appeal below have found that they had already been adjudi-

cated and are therefore barred by res judicata. CHP II.

Now, for the third time, petitioner importunes this Court to

review its taking and vested rights claims on the previously

rejected ground that this Court should address issues on inverse

condemnation law not presented to the California courts earlier.

Petition, Issues I and II. But every court that has so far consid-

ee a ae

us sn ate ese ince es en ie sed s livosices tanh

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1]

ered the matter has concluded that the record clearly demon- >

Strates that petitioner’s taking claim and pertinent facts were

actually presented to the state court in CHP IJ and adjudicated

adversely to petitioner by that court. Thus, the only question this

petition fairly presents is whether the Court of Appeal correctly

applied California law of res judicata.

SUMMARY OF ARGUMENT

1. It is fundamental law that this Court does not have

jurisdiction to decide questions of state law when reviewing

decisions of state courts. Murdock v. City of Memphis, 20 Wall.

(87 U.S.) 590 (1875). 28 U.S.C. section 1257 limits this Court’s

authority to review only those state court decisions which raise

issues of federal law.

II. There is no question of federal law presented in this case.

In holding petitioner’s claim to be barred by res judicatc, the

Court of Appeal below relied entirely on California law. Petitioner

does not dispute this fact. Moreover, petitioner does not and could

not dispute that the only substantive claim it pursued in this case

was an issue of California law.

ARGUMENT

I. The United States Supreme Court Has No Jurisdiction to

Decide Questions of State Law When Reviewing Decisions

of State Courts.

It is fundamental law that this Court does not have jurisdiction

to decide questions of state law when reviewing decisions of state

courts. Murdock v. City of Memphis, 20 Wall. (87 U.S.) 590

(1875). The statute authorizing Supreme Court appellate review

of state court decisions only authorizes this Court to decide issues

of federal law. 28 U.S.C. section 1257.

II. There Is No Question of Federal Law Presented in This

Case.

There is an immediately evident and fatal flaw in the petition

which belies its asserted presence of a federal question that might

justify review of this matter by this Court (aside from this Court’s

12

previous denial of review in CHP III which involved essentially

the same issue as this petition). At no point does petitioner deny

(nor, indeed, could it fairly do so) that the cause of action (or, in

California res judicata terms, the primary right) involved in CHP

II is identical to that involved in CHP J. The Court of Appeal

below keenly and appropriately pinpointec this flaw: “While the

developer is aware that our concern is whether different primary

rights are involved in this action compared to [CHP I], it

apparently prefers not to characterize the rights or the differ-

ence.” Pet., App. B, p. BS.

A related fatal flaw is petitioner’s failure to dispute (again it

could not fairly do so) that the Court of Appeal below correctly

stated and followed California law as to res judicata.

These flaws are fatal because they impliedly concede that

petitioner’s asserted reason for granting the writ (i.e., to address

the issue of the remedy for a taking) is a mirage.

Moreover, the record in this case is not appropriate to raise the

issue of the correct remedy for a taking precisely because CHP /

comclusively determined that no taking had occurred as noted by

the Court of Appeal below. Pet. App. B, p. B7, fn. 2, and p. B8

(Conclusion). As this Court has held: “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.” Agins v. City of Tiburon, 447 U.S. 255, 263

12 Under settled California law, cited and relied on by the Court of

Appea! (Pet., App. B, pp. B5-B8)

“(a] valid final judgment on the merits in favor of a defendant

serves as a complete bar to further litigation on the same cause of

action.”

Slater v. Blackwood (1975) i5 Cal. 3d 791, 795. For res judicata

purposes, California courts hold that

“the violation of a single primary right constitutes a single cause of

action... ”.

Boccardo v. Safeway Stores, Inc., (1982) 134 Cal. App. 3d 1037, 1043;

Wulfjen v. Dolton (1944) 24 Cal. 2d 891, 895. According to Slater, a

“ ‘cause of action’ is based upon the harm suffered, as opposed to

the particular theory asserted ...”.

Slater, supra, 15 Cal. 3d 794, 795.

13

(1979). Thus, it is irrevelant whether, as petitioner contends, a

damage remedy did not exist for a taking when CHP J was

pending. Pet., pp. 13-14.

Finally, it is spurious and trifling for petitioner to assert the

damage remedy as an issue herein in the face of this Court’s prior

denial of review of the identical issue in the CHP / petition for

certiorari in this Court. 454 U.S. 1074 (1981). (See Statement of

the Case, supra, Part B.1, p. 6)

A. The California Court of Appeai Held Petitioner’s Claim to

Be Barred by the California Law of Res Judicata.

The California Court of Appeal, whose decision petitioner is

challenging, held that petitioner’s substantive claim was barred by

res judicata. In so holding, the Court of Appeal relied entirely on

California law. Pet., App. B, pp. B1-B8. Petitioner does not deny

this fact.

No argument has been made that the application of settled

principles of California res judicata law deprived petitioner of due

process of law under the United States Constitution. In a vague

and confusing statement, the petition appears to suggest that this

Court should accept review to determine whether there is, as an

abstract proposition, a due process right to damages for an inverse

condemnation deprivation of vested rights to avoid an assertedly

unjust application of res judicata in this case. This statement

hopelessly and erroneously intermixes the due process and taking

clause concepts. Whatever the statement is intended to mean,

there are three reasons for rejecting its suggestion. First, peti-

tioner raised a federal due process issue in CHP J (See paragraph

92 of the CHP I petition for writ of mandate at p. 170 of the

Clerk’s Transcript before the Court of Appeal below. Paragraph

92 also raised the taking issue under both federal and state

constitutions. See fn. 3, supra.) As noted by the federal District

Court in CHP III (App. B, p. A-19), the trial court and Court of

Appeal in CHP | rejected the argument that the same acts of

respondents which petitioner contends were a deprivation of

vested rights for taking purposes resulted in a violation of due

process. Court House Plaza v. City of Palo Alto, supra, 117 Cal.

App. 3d 871, 883. Second, petitioner waived any possible right to

+

raise the suggestion in this case by failing to do so in its petition

for writ of certiorari in CHP III. Third, the question of whether

the application of California law of res judicata violated any of

petitioner’s federal rights “was not raised below, and hence is not

open here”. Ellis v. Dixon, 349 U.S. 458, 460 (1954).

B. The Single Substantive Claim in This Suit Was Based on

State Law.

As described in the Statement of the Case, petitioner sought to

litigate its federal claim for damages arising out of the asserted

inverse condemnation in federal District Court in CHP III. In the

present suit, brought in California Superior Court, petitioner

“reserved” its federal claims so that they could be litigated in the

federal District Court.'? The only substantive claim ever

presented to the California court in this suit was a claim for

inverse condemnation under California law. Thus, even if the res

judicata question could be put aside and this Court could legiti-

mately be asked to address the issue of substantive law sought to

be litigated in this case, that issue is only an issue of California

law. |

'3 As described in the Statement of the Case, the District Court in

CHP III found that these federal claims were barred by the California

law of res judicata, as applied by the federal courts under 28 U.S.C.

section 1738. If any such indication were needed, this federal decision

indicates that the California courts in this case have fairly applied their

own law of res judicata.

<<

15

CONCLUSION

For over 8 years now, respondents have been put through

extraordinary and unreasonable hoops by vexatious litigation and

attempted relitigation of petitioner’s legally insufficient claims.

This Court has twice refused review. All state courts and all

federal courts considering this case have uniformly rejected peti-

tioner’s claims. Petitioner now seeks to have this Court review the

California Court of Appeal’s decision resting entirely on Califor-

nia law. For the reasons and on the authorities set forth above,

respondents respectfully request that this Court deny the petition.

DATED: Sept. 17, 1985

DIANE M: LEE

City Attorney

Fred Caploe*

A Professional Corporation

By FRED CAPLOE

*Counsel of Record

Attorneys for Respondents

(Appendices follow)

JCHN KAZU8OWSKI

COUNTY CLERK

COURT HOUSE PLAZA COMPANY,

a limited partnership,

Petitioner,

Vs. No. P 32449

THE CITY OF PALO ALTO, a FINDINGS OF FACT AND

municipal corporation, et al., CONCLUSIONS OF LAW

Respondents.

A petition for writ of mandamus has been filed herein by

Petitioner. Respondents filed a timely return and the matter

came on regularly before this Court for trial on Feburary 21,

1978, and succeeding dates. The record of the administrative

proceedings was received into evidence, examined and con-

sidered by the Court and additional evidence, both oral and

documentary, was admitted, examined and considered by the

Court. Trial briefs and post-trial briefs have been filed by both

parties and examined and considered by the Court. Both parties

have orally argued the matter to the Court on March 30, 1978.

Following its examination and consideration of all of the

foregoing matters, the Court rendered and filed its Memo of

Decision on May 11, 1978.

Petitioner thereafter filed its request for findings of fact and

conclusions of law, and the Court filed its order directing

Respondents to prepare proposed findings of fact and conclu-

A-2

sions of law and a proposed judgment.

The Court hereby makes the following findings of fact and

conclusions of law.

FINDINGS OF FACT

1. Petitioner, Courthouse Plaza Company, a limited partner-

ship, was and is the owner of the four-story office building lo-

cated at 260 Sheridan Avenue, Palo Alto, California. The four-

story building is in a block bounded by Sheridan Avenue on the

east, Birch Street on the south, Grant Avenue on the west and

Park Boulevard on the north.

2. Respondent, City of Palo Alto (“City”) is a municipal

corporation and a charter city.

3. The City Council of City (“Council”) passed Ordinance

No. 2224 on December 28, 1964, rezoning the subject property

to a “Planned Community” (“‘PC’’) zoning district.

4. Ordinance No. 2224 became effective on January 28,

1965.

5. Ordinance No. 2224 contains a Development Plan and

Development Schedule providing for two phases of construc-

tion. Phase 1 provided for start of construction of a four-story

office building and a parking garage within two years of Council

approval. Phase 2 provided for a start ot construction of six

additional floors of the four-story office building and additional

levels on the parking garage by October 31, 1976.

6. In August, 1965, City was informed that a part of the

subject property planned by Petitioner for the permanent park-

ing structure approved by Ordinance No. 2224 might be re-

quired by the (.«inty of Santa Clara (‘“‘County”’) for a County

road project (Page Mill-Birch Street realignment). From 1961

on, the County wanted to undertake this project to improve

traffic safety on the County Expressway System, of which the

ee

A-3

Birch Street off-ramp (adjacent to the parking structure site)

was a part. The County initiated, designed and constructed

improvements for that project, including the Birch Street off-

ramp, and condemned the land for the same. The County re-

tained control of the project and there is no evidence that the

City had any control over the project.County did not actually

determine its condemnation *~e from the parking structure site

until 1969. Accordingly, in an attempt to alleviate the problem

caused by this uncertainty so as to allow Petitioner to proceed

on a temporary basis, the Council passed Resolution No. 3860

on December 13, 1965, amending the Development Plan and

Development Schedule of the PC zone established by Ordinance

No. 2224. Resolution No. 3860 approved construction of Phase

1 with 107 temporary offstreet parking spaces in lieu of the re-

quired permanent parking structure and gave Petitioner an

extension of time until December 13, 1968, to start construc-

tion of the parking structure.

7, City Zoning Ordinance §18.68.070(a) allows PC zoning

districts to be amended by resolution rather than ordinance.

8. In October, 1965, the County asked the City to make no

allowance for improvement of approximately 11,500 square

feet of the subject property at the intersection of Grant Avenue

and Birch Street (the “Grant-Birch” parcel). The County made

this request, since it intended to condemn that part of the sub-

ject property for expansion of the North Santa Clara County

Courthouse and did not wish’ to pay for improvements thereto.

Petitioner withdrew this parcel from its Original project pro-

posal prior to passage of Ordinance No. 2224, at the urging of a

private merchants’ group, thus facilitating the Courthouse ex-

pansion. There is no evidence that the City was responsible for

the acqusition of the Grant-Birch parcel.

9. In 1966, the County commenced condemnation proceed-

ings for acquisition of the Grant-Birch parcel. In the Spring of

A-4

1967, following a jury trial, the County acquired this parcel and

Petitioner received just compensation for the taking.

10. On January 17, 1966, City issued a use permit for the

Phase 1 four-story building, promptly following passage of

Resolu..sn No. 3860.

11. On June 14, 1966, City issued a building permit for

construction of a four-story office building as approved by

Ordinance No. 2224 and Resoultion No. 3860 (Exhibit 10).

12. Prior to June 14, 1966, Petitioner’s architect, Albert A.

Hoover, raised the question with Petitioner about the additional

expense to be incurred in designing and building the four-story

office building to accommodate a six-story addition when the

possibility existed that only the first four stories would ever be

constructed and, therefore, such additional expenses could not

be recovered. Petitioner was willing to assume the risk of incur-

ring such expense.

13. The four-story building authorized by the June 14,

1966, building permit (Exhibit 10) was completed in August,

i977. It was substantially leased by the Spring of 1968. It isa

self-contained, functional structure even without the additional

six floors, and has been occupied and used up to and including

the present.

14. On December 11, 1967, Council plasseaq Resolution No.

4055, amending the Development Plan and Development

Schedule of the PC zone established by Ordinance No. 2224

and giving Petitioner an extension of time until December 13,

1969, to start construction of the parking structure.

15. Before February 15, 1968, and within six months after

completion of the four-story building, Petitioner instructed its

architect to proceed forthwith in preparing a complete set of

working drawings for the six-story addition for Phase 2. The

drawings were completed by the Fall of 1968.

A-5

16. As to the design of both Phase 1 and 2, the practice of

Petitioner’s architect was to apply changes in local and state

laws, such as the Uniform Building Code, occurring after com-

mencement of work on each of such phases.

17. Before the Phase 2 drawings were completed, the

Council passed Resolution No. 4113 on May 6, 1968 (Exhibit

14) to further assist in the solution of the parking problem and

to allow Petitioner to obtain permanent financing for Phase 2.

This resolution amended the Development Plan and Develop-

ment Schedule of the PC zone established by Ordinance No.

2224. It rescinded Resolutions Nos. 3860 and 4055. It also con-

tinued the prior authorization of 107 surface parking spaces in

lieu of the permanent parking structure and permitted use and

occupancy of the four-story building with such surface parking.

It provided further that “‘construction of the permanent parking

structure shall start on or before October 31,1976’"—the same

date provided in Ordinance No. 2224 for start of construction

of the six-story addition. Finally, Resolution No. 4112 provided

that the six-story addition “‘shall remain unused and unoccupied

until the parking structure is completed.” Except as herein

indicated, Resolution No. 4113 left all other sections of Ordi-

nance No. 2224 as originally written. Resolution No. 4113 has

never been amended.

18. By Fall, 1968, Petitioner had obligated itself to its

architect to pay for the complete Phase 2 working drawings.

19. In August, 1969, after finally determining the engineer-

ing design requirements, County commenced condemnation

proceedings to acquire approximately 4,000 square feet of the

permanent parking structure site between Page Mill Road and

Sheridan Avenue for the County’s Page Mill/Birch Street re-

alignment (“parking site acquisition’’). Prior to this date, Peti-

tioner was free to apply to City for a building permit to build

the parking structure approved by Ordinance No. 2224 and

Resolution No. 4113, but decided not to do so for reasons of its

own.

20. In the Fall of 1969, Petitioner ordered the structural

steel and elevators for Phase 2 and submitted the Phase 2 plans

for bid. On September 30, 1969, Petitioner’s then managing

general partner (W. G. Dunn) instructed its general contractor

to “immediately commence placement of all subcontracts for

the construction of the six-story building addition” (Exhibit

R40), including at least structural steel, steel decking, exterior

facade and elevators.

21. By its letter of September 30, 1969 (Exhibit R40), and

by the acts of its general contractor pursuant thereto in placing

contracts for structural steel (Exhibit R66) and elevators (Ex-

hibit R44), Petitioner fully obligated itslef to pay for Phase 2

development costs prior to obtain financing to construct Phase

2 and prior to being issued a building permit for Phase 2 on

February 16, 1970 (almost five months later).

22. Petitioner admits that it committed a mistake by not

obtaining financing before committing the partnership to the

obligation involved in paying for the steel and elevators for

Phase 2, and that this mistake got the partnership into financial

difficulties. This mistake was in no way attributable to Re-

spondent or any of its officials or employees.

23. Petitioner’s inability to obtain Phase 2 financing was not

due to any act or acts of Respondents. Despite continuing

efforts throughout 1968 and 1969, Petitioner was unable to ob-

tain anything other than a verbal agreement from a lender in

late 1969 which ultimately failed to materialize because the

lender found itself overcommitted during that same period of

time. Similarly, in the Fall of 1976, Petitioner was unsuccessful

in its one effort to obtain Phase 2 financing because the lender's

agent stated that time was too short to permit any substantive

negotiations prior to the Phase 2 deadline of October 31, 1976,

for start of construction.

—————————————— 2

A-7

24. On November 7, 1969, Petitioner executed a real estate

purchase contract with Power Construction, Inc. (‘‘Power’’)

a aR MR

under which Petitioner acquired the right to purchase several

parcels of land in the block south of and adjacent to the subject

property. Petitioner considered the Power parcels as a possible

alternative to provide the necessary offstreet parking for the six-

story addition. Petitioner never requested a zone change to use

the Power percels for such parking despite its awareness of the

pending County condemnation for the parking site acquisition,

and despite its further awareness of City requirements in this

regard by virtue of its zone change application for an amend-

ment to the PC Development Schedule ultimately passed by

{ the Council in Resolution No. 4113 (Exhibit 117). Mr. Power

| testified that the City never interfered with his contractual rela-

tions with Petitioner. Because of Petitioner’s inability to obtain

Phase 2 financing, the Power parcels were permitted to revert to

Power late in 1971, and a quit-claim was executed by Petitioner

in 1973.

25. Late in 1969, a controversy between Petitioner and City

arose over the installation of a smokeproof tower. Earlier in

: 1965, City had resolved a similar dispute in Petitioner’s favor

| within three weeks of the date it was raised by permitting con-

| struction of Phase 1 with an interior smokeproof tower. The

: 1969 controversy lasted about two months and was resolved in

| Petitioner’s favor on February 2, 1970, by issuance of a build-

ing permit for Phase 2 using a mechanically-ventilated interior

smoketower (Exhibits 17 & 19). An inter-office communication

from the city attorney’s office to the city manager (Exhibit 18)

does not show that the City recognized that Petitioner has a

vested right to construct Phase 2 but instead only a vested right

to a method of construction, namely an interior smokeshaft in

the existing four-story building. The refernece to vested rights

in Exhibit 18 does not apply to construction of Phase 2.

A-8

26. On March 30, 1970, City issued Petitioner a use permit

following an appeal from the City zoning administrator’s refusal

to issue the use permit on the ground that the proposed six-

story addition would create a building approximately 14 feet

(or 11 percent) highe: than the building approved by the PC

zoning in Ordinance No. 2224 and that the proposed addition

was a Variation not within reasonable limits of the zoning ad-

ministrator’s administrative discretion to approve. The use

permit was granted within approximately six weeks after Peti-

tioner applied for it.

27. On March 11, 1970, during a hearing on its appeal from

the use permit denial, Petitioner told the City Planning Com-

mission (‘“‘Commission’’) that it would not be building a parking

structure, that it had options on sufficient land to provide the

required Phase 2 parking, and that it realized it would have to

provide parking before it could use and occupy the six-story

addition (Exhibit 20, p. 83).

28. On March 30, 1970, at the hearing at which the Council

approved the Phase 2 use permit, City advised Petitioner that

the PC Development Plan required construction of the parking

structure before October, 1976 (Exhibit 21, p. 238).

29. On April 3, 1970, the City staff advised Petitioner in

writing that it should file plans in the near future for “consider-

ation of a change of the approved Development Plan which now

requires an off-street parking structure” (Exhibit 128).

30. On April 13, 1970, the Council amplified the minutes of

its March 30, 1970, meeting to reflect that, as to Phase 2, the

“parking requirements are expected to be consistent with the

previously approved plan” approved by Ordinance 2224 (Ex-

hibit 22).

31. City granted Petitioner’s request of May 22, 1970, to

extend the Phase 2 building permit to July 1, 1970 (Exhibit

R4).

a aes mde sO Bie aia.

Sh tm Nita Latha ho

Ar Ase aller petar ke 4

A-9

32. The Phase 2 building permit (Exhibit 19) expired on

July 1, 1970, because of Petitioner’s inability to obtain

financing.

33. City granted Petitioner’s request to extend the Phase 2

use permit to March 30, 1972.

34. The Phase 2 use permit expired on March 30, 1972, be-

cause of Petitioner’s inability to obtain financing.

35. No construction work was ever undertaken on either the

Phase 2 six-story additon or the permanent parking structure.

36. In August, 1970, the County of Santa Clara completed

condemnation proceedings to .acquire approximately 4,000

square feet of the permanent parking structure site between

Page Mill Road and Sheridan Avenue for the County’s Page

Mill/Birch Street realignment. The County acquisition was

based on a Stipulation for Judgment executed between Peti-

tioner and County (Exhibit R5). County commenced this con-

demnation proceeding in August, 1969, approximately one

month before Petitioner ordered the steel and elevators for

Phase 2 (Exhibit R40). Petitioner received just compensation

for this taking, including certain excess lands deeded to it by

the County contiguous to the parking structure site.

37. On October 6, 1972, at Petitioner’s request, City staff

members met with Petitioner for the purpose of discussion con-

struction requirements and processing of Phass 2. There was no

intent to delay, hinder or thwart Petitioner in any way on the

part of the City staff members present at the October 6, 1972,

meeting, or on the part of any other City official, at that time

or at any other time.

38. Approximately one year after the Phase 2 use permit

expired (February 27, 1973), Petitioner applied for a new use

permit for the Phase 2 six-story addition, but withdrew the

application on March 20, 1973, without it being acted upon by

the City. Petitioner intended to resubmit its application a few

A-10

months thereafter, but did not do so because it lost its chief

tenant which decided to move to a new facility to achieve its

own corporate identity. There was no evidence that the tenant

vacated because of Petitioner’s inability to provide more space

for it in the contemplated six-story addition.

39. On September 24, 1973, the City passed Ordinance No.

2475 (Exhibit R8) placing a 50-foot height limit on buildings in

certain zoning districts but not Planned Community zones, such

as applies to the subject property.

40. The City passed various ordinances adopting current

editions of various construction codes which were applicable to

Phase 2. Among these were Ordinance No. 2436, passed on May

27, 1968, adopting the 1967 editions of the Uniform Building,

Electrical, Mechanical and Plumbing Codes (Exhibit R3), Ordi-

nance No. 2605, passed on June 7, 1971, adopting the 1970

editions of the Uniform Building and Mechanical Codes (Ex-

hibit R6), and Ordinance No. 2809, passed on August 26, 1974,

adopting the 1973 editions of the Uniform Building, Mechanical

and Housing Codes.

41. For a period of approximately three years, from the date

of its withdrawai of ts Phase 2 use permit application on

March 20, 1973, Petitioner did nothing about further construc-

tion on Phase 2 until June 30, 1976, when it applied for a zone

change with respect to the parking problem and also for new

uses not previously permitted (Exhibit 225). Despite being told

by ‘the City’s zoning administrator on March 31,1975, that the

City might agree to a reduction of parking spaces, Petitioner

waited for more than a year to submit its zone change applica-

tion. Petitioner did not start working in earnest on the parking

problem until October or November, 1975.

42. Petitioner’s zone change application of June 30, 1976,

was defective in that it included a portion of property not

owned by Petitioner and also a portion of the City street on

A-11

Sheridan Avenue. No City staff member told Petitioner that

such an application would be approved either prior to or after

its submittal.

43. Pursuant to §18.68.070(a) of the City Zoning Ordinance

governing PC District Regulations, zone changes in a PC district

are considered the same as changes in the City zoning map and

are in accordance with the general rezoning procedures set forth

in City Zoning Ordinance Chapter 18.98. Section 18.98.0200

limits zone change applications to the Council or Commission

or “a property owner.” Section 18.98.030 permits zone change

applications to include non-owned property only if it includes

the written consent of the owner of record of legal title to make

such application.

44. Petitioner’s June 30, 1976, zone change application did

not include the written consent of the owner of record of legal

title to either the privately-owned property ‘Mrs. Pierson) or

the City property in Sheridan Avenue.

45. Petitioner’s June 30 zone change application did not re-

quest a hearing date before the Commission until August 25,

1976.

46. Aimost nine years elapsed from the date Petitioner com-

pleted the four-story building on August 17, 1967, to August

11, 1976, when it submitted a request for a three-year exten-

sion of the Phase 2 deadline of October 31, 1976, contained in

the PC Development Schedule in Ordinance No. 2224 and

Resolution No. 4113.

47. On August 25, 1976, the Commission adopted a motion

recommending to the Council that the three-year request be

denied. This procedure followed the provisions of PC District

Regulations set forth in Zoning Ordinance §18.68.080D. Fol-

lowing the Commission’s recommendation of denial, Petitioner

withdrew its three-year request and, instead, filed an application

for a use permit for Phase 2 on August 30, 1976.

A-12

48. On August 31, 1976, Petitioner submitted an applica-

tion for a building permit for the six-story addition based upon

the building plans for which a permit had been issued in 1970.

These plans had not been revised to meet current code require-

ments. The City, subsequent to the expiration of the 1970

building permit for the six-story addition, had adopted the

1970 and 1973 editions of the Uniform Building Code and

other construction codes. The August 31, 1976, application for

a building permit for Phase 2 did not comply with those codes.

49. The City building inspector refused to issue a building

permit for the six-story addition on three grounds: (1) the plans

submitted did not conform to then existing codes; (2) no use

permit had been issued for the six-story addition as required by

§18.68.040 of the PC District Regulations and (3) Petitioner's

zone change application of June 30, 1976 (for parking and new

uses) and August 11, 1976) for time extension) were then

pending.

50. On September 8 and September 21, 1976, respectively,

at Petitioner’s request, City staff members met with Petitioner

and its architect to discuss Phase 2. On September 8, 1976, City

staff members advised Petitioner to resubmit revised building

plans to conform to current codes. No revised plans were sub-

mitted until October 15, 1976, 16 days before the October 31,

1976, deadline for start of construction.

City staff members further advised Petitioner that City would

submit the revised plans to the International Conference of

Building Officials (ICBO) in Whittier, California, for plan check

because (1) there were numerous building code changes that re-

quired extensive review, (2) the revisions were complex, and

(3) under then existing time constraints the City building in-

spector could not undertake the review and approval.

51. On October 1, 1976, Petitioner filed a request with the

Commission to amend the Development Schedule by requesting

ee ee SE

RRA DOM at nei e M 08 Mei Reon

IRS CAPO

A-13

a one-year extension for start of construction of the six-story

addition.

52. On October 20, 1976, Petitioner submitted an extensive

letter to the Commission in support of its one-year extension

request.

53. On October 27, 1976, the Commission held a public

hearing in which all relevant issues were discussed by Petitioner,

its counsel, members of the public, the City staff and the Com:

mission (Exhibit 48). At the conclusion of the hearing, the

Commission passed a motion recommending to the Council

that the one-year request be denied.

54. On October 28, 1976, the City building inspector

denied Petitioner’s request for an interim building permit on the

grounds that no use permit had yet been issued for Phase 2 and

that no plans for construction of a parking structure had been

submitted.

55. On December 7, 1976, the Counci) held a public hearing

on Petitioner’s one-year request. The reque*t for extension was

submitted to lengthy debate in which all relevant issues were

discussed and in which Petitioner and its counsel, members of

the public, members of the City STaff and Council: members

fully participated. The Chairperson of the Planning Commission

described the Commission’s reasons for denying the extension.

These were: the unresolved parking problem, the ten-year

length of time for completing the development, the advantage

over others in granting an extension, the changed conditions of

the area and height limitations that could be considered. Coun-

cil members discussed and considered such subjects as the im-

pact of the County condemnation action on the parking re-

quirements, the economics of the project, building height limits,

environmental impact reports, delays in completing the project,

the interests of the community, the general changes in the

city’s comprehensive plan. The pros and cons from public

A-14

participants discussed added jobs and taxes to be derived from

the building’s construction on the one hand to the need for an

environmental report and general opposition to the building and

its proposed height on the other.

56. The Council thoroughly considered Petitioner’s request

at its meeting. The discussions and deliberations were complete

and unhurried. The factual data the Council had before it fairly

represented both sides of the issues. Petitioner was asked on

two separate occasions if it had been dealt with in good faith by

City. Both times the answer was affirmative.

57. On December 7, 1976, the Council following the hearing

and its deliberations, denied Petitioner’s request for a one-year

extension. Pursuant to PC District Regulations §18.68.070(a)

and 18.68.080, the Development Schedule is part of the De-

velopment Plan which, in itself, is the PC zoning. Any request

to change to the Development Schedule is a request for a re-

zoning or an amendment to the PC zoning as established by

Ordinance No. 2224.

58. At the time the Council denied Petitioner’s one-year

request, no building permit had been issued for construction of

the six-story addition or the parking structure. The previously

issued building permit expired on July 1, 1970, and the use

permit on March 30, 1972.

59. There was never any act or intent on the part of any of

Respondents to obstruct, hinder or delay Petitioner.

60. There was no deliberate or willful attempt to delay,

hinder or obstruct Petitioner in the completion of either Phase

1 or Phase 2.

61. Petitioner did not commence construction on Phase2by

virtue of expending money to overbuild Phase 1 to accommo-

date it.

62. Respondents have acted conscientiously and in good

A-15

faith with Petitioner at cll times.

63. None of Respondents’ actions have been unreasonable,

unlawful, arbitrary or discriminatory.

CONCLUSIONS OF LAW

From the foregoing findings of act, the Court makes the fol-

lowing conclusions of law:

1. Ordinance No. 2224 was a proper legilsative exercise of

the police power through zoning. Zoning is not a contract.

2. Ordinance No. 2224 established a specially enacted zoning

for the subject property which, from its effective date, pre-

scribed a fixed, limited time period for start of construction

for both Phase 1 and Phase 2.

3. There is nothing in Ordinance No. 2224, or law in general,

which provided that the completion of Phase 1 guaranteed or

vested any right to complete Phase 2.

4. The appropriate and applicable form of mandamus in this

action is under California Code of Civil Procedure §1085. The

City’s actions in passing Ordinance No. 2224, Resolutions 3860

and 4055, and in considering Petitioner’s requests for time ex-

tensions were legislative functions, not administrative orders or

decisions which latter functions are reviewable under Code of

Civil Procedure §1094.5.

5. The City Council in considering and deciding upon the

request in this case to extend the ordinance was not acting in a

quasi-judicial capacity but was performing a legislative function

subject only to traditional mandamus review.

6. The decision regarding staff issuance of use permits under

the City’s PC zoning regulations is both ministerial in character

and supplements the PC legislative process reviewable under

Code of Civil Procedure §1085. |

7. The decision whether or not to issue a building permit

A-16

involves a ministerial act reviewable under Code of Civil Pro-

cedure §1085.

8. The scope of review by the trial court in traditional man-

damus actions (section 1085) requires only an examination into

whether the action taken was arbitrary, capricious or entirely

lacking in evidentiary support.

9. A city council in amending a zoning ordinance is not re-

quired to make express findings of fact as to the public purpose

of the ordinance or its relation to the police power. Council

members are not required to articulate for the record all of the

reasons and motives behind their decisions.

10. No fundamental vested right was ever acquired by Peti-

tioner. Absent such a right, the test of the City Council’s action

was whether there was substantial evidence to support it.

11. The action taken by the Council in denying the one-year

request was supported by more than substantial evidence.

12. Petitioner did not acquire vested rights to construct

Phase 2 by virtue of overbuilding Phase 1 to accommodate it

or in any other respect.

13. Petitioner had not at any time acquired vested rights to a

building permit to construct Phase 2; therefore, the Council’s

denial of the one-year extension did not constitute a depriva-

tion of vested rights.

14. There is no basis for application of the doctrine of

estoppel against Respondents.

15. None of Respondents’ actions have been unreasonable,

unlawful, arbitrary, discriminatory, malicious nor void, nor have

such resulted in any denial of due process or equal protection of

the laws.

LET JUDGMENT BE ENTERED ACCORDINGLY.

DATED: July 6, 1978.

JUDGE JOHN R. KENNEDY

Judge of the Superior Court

ewe es

OIE PLO AP AP a BE, OS A EN ESET ONS halts bor SIO me I aa BN

Appendix B

Oniginal

FILED

June 4 1982

William Whittaker

Clerk, U.S. District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

COURT HOUSE PLAZA COMPANY, +)

a limited partnership, ) No. C-81-+4537 SC

)

Plaintiff, )

-Vs— )

) ORDER GRANT-

THE CITY OF PALO ALTO, a ) ING MOTION TO

municipal corporation, et al., ) DISMISS

)

Defendants. )

ORDER GRANTING MOTION TO DISMISS

Plaintiff, a building developer, seeks damages and equitable

relief for the actions of the Palo Alto City Council and its

Planning Commission in denying building and use permits for

the second phase in the construction of a ten-story office

building and in denying a one-year extension of the building's

development schedule provided by a municipal zoning ordinance.

Because plaintiff's action is precluded by the res judicata

effect of a prior judgment in state court, plaintiff’s action

must be dismissed.

After the city council’s denial of plaintiff's application for the

necessary permits and extension of time, plaintiff sought a

writ of mandamus from the California Superior Court. Plaintiff

was denied relief in superior court and on appeal. See Court

House Plaza Co. v. City of Palo Alto, 17 Cal. App. 871, 173

Cal. Rptr. 161 (1981). Plaintiff now seeks relief on six causes

i

A-18

of action: federal and state constitution “taking’’ claims (in-

verse condemnation): federal and state constitution equal

protection and due process claims; a federal civil nghts claim;

and a declaratory judgment claim. The latter two claims rest

on the constitutional violations alleged in the first four, and

contain no independent factual allegations.

The doctrine of res judicata prevents a plaintiff from relitigating

claims adjudicated in another prior proceeding. The Ninth

Circuit has extended res judicata to ban federal constitutional

claims, whether or not asserted in state court,

where the federal constitutional claum is based on

the same asserted wrong as was the subject of

[the] state action, and where the parties are the

same.

Scoggin v. Schrunk, 522 F. 2d 436, 437 (9th Cir. 1975).

The federal clairns here are based on the same alleged wrongful

acts which formed the basis of plaintiff's state court mandamus

action. Also, plaintiff has sued all the same defendants with

the exception of one individual named in the state court pro-

ceeding. Consistent with Scoggin, plaintiff's claims for declara-

tory relief, for relief under the civil rights act, and for the

alleged federal constitutional violations on which those claims

are barred by res judicata. vi a

Plaintiffs citation of Gallagher v. Frye. 631 F. 2d 127 (9th

Cir. 1980) is inapposite. The court in Gallagher distinguished

Scoggin on the facts. In Scoggin, plaintiff sought to set aside

a foreclosure sale in federal court, after being unable to success-

fully challenge it in state court. In Gallagher, however, plain-

tiff*s initial state court mandamus proceeding attempted to en-

force an administrative order of a civil service board against a

museum. Plaintiff's federal claim addressed defendant’s under-

lying act of employment termination. The essential issue in

the state court proceeding was “the jurisdictional authority of

of the state administrative agency.” /d. at 129-30. The issue in

the federal court proceeding was whether the alleged wrongful

conduct of the defendant museum violated plaintiff's civil rights.

A-19

In the instant case, the alleged violations of the federal consti-

tution have been adjudicated in state court. The state court of

appeal upheld the tmal court’s findings that the denial of the

time extension did not deprive plaintiff of equal protection or

due process of law, Court House Plaza v. Citv of Palo Alto.

117 Cal. App. 3d at 883, and that the city’s adverse zoning

action did not constitute a “taking” requiring compensation.

Id. at 888. Furthermore, even assuming that these constitution-

al claims had not been raised, having had the ability to raise

the federal claims in the state court proceedings bars this

court from adjudicating them now. Scoggin v. Schrunk, 522

F. 2d at 437.

Finally, when a district court, as in this case, dismisses all

federal claims prior to trial, “the proper exercise of discretion

requires dismissal”’ of the state claims. Wren v. Sletten Construc-

tion Co., 654 F. 2d $29, 536 (9th Cir. 1981). Such claims

should be dismissed for want of federal jurisdiction. Hodge

v. Mountain States Tel. & Tel. Co., 555 F. 2d 254, 261 (9th

Cir. 1977).

In accordance with the foregoing, it is hereby ordered that

defendants’ motion to dismiss plaintiff's complaint is granted.

Dated: June 4, 1982

SAMUEL CONTI

United States District Judge

Appendix C

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COURT HOUSE PLAZA COMPANY,a_)

limited partnership,

Plaintiff-Appellant,

v. No. 82-4393

THE CITY OF PALO ALTO, a DC #CV-81- .

municipal corporation, STANLEY 4537-SC

R. NORTON, BYRON D. SHER,

FRED S. EYERLY, ROY L. CLAY, MEMORANDUM

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 Com-

missioners, STAN J. NOWICKI, Chief

Building Inspector, JAMES O. GLAN-

VILLE, Zoning Administrator, NAP-

THALI H. KNOX, Director of

Planning and Community Environ-

ment, ROBERT K. BOOTH, JR.,

City Attorney

and LOUIS B. GREEN, Assistant City

Attorney,

ee ee ee ee ee ee ee Le ee a Le, ee ee ee, ee ee ed

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of California

Samuel Conti, District Judge, Presiding

Argued and submitted April 14, 1983

Before: KILKENNY, SCHROEDER, and BOOCHEVER,

Circuit Judges.

The district court’s dismissal, on res judicata grounds, of

this federal civil rights action must be affirmed under Scoggin

v. Schrunk, 522 F.2d 436 (9th Cir. 1975), cert. denied, 423

U.S. 1066 (1979),

Affirmed.

Appendix D

Ropers, Majeski, Kohn, Bentley, Wagner & Kane

A Professional Corporation

Crocker Plaza, Suite 820

84 West Santa Clara Street

San Jose, California 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

Civil No. P33070

Court House Plaza Company, a limited partnership,

Plaintiff,

vs.

The City of Palo Alto, a municipal corporation,

Stanley L. 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 K. 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 G. Green, Assistant City Attorney,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF DEMURRERS AND MOTION

TO STRIKE

Date: Monday, April 26, 1982

Time: 9:30 a.m.

Dept: One

Kst. Length of Hearing: 30 Mins.

A-22

MEMORANDUM OF POINTS AND AUTHORITIES

Page

XUI. SINCE AN ACTUAL CONTROVERSY NO

LONGER EXISTS, PLAINTIFF IS NOT EN-

TITLED TO DECLARATORY RELIEF ........ 21

XIV. CONCLUSION 21

EXHIBITS

A. Claim against City of Palo Alto, March 3, 1977.

B. Complaint for Damages, filed September 22,

1977, Action Number P33070.

C. Petition for Writ of Mandamus, filed May 23,

1977, Action Number P32449.

D. Memo of Decision, Action Number P32449.

E. Findings of Fact and Conclusions of Law,

Action Number P32449.

F. Judgment Denying Peremptory Writ of Man-

date, Action Number P32449.

G. Court House Plaza vs. City of Palo Alto (1981)

117 C.A.3d 871.

H. Denial of Petition for Rehearing in Court of

Appeals.

L. Denial of Hearing by California Supreme

Court.

J. Notice of Appeal to U.S. Supreme Court.

Dismissal of Appeal and Denial of Certiorari

by United States Supreme Court.