Ramirez v. City of Petaluma

Filed 2/27/09 Ramirez v. City of Petaluma CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

Appellant City of Petaluma and City Council of Petaluma (collectively City) contend the trial court erroneously granted a petition for writ of mandate, setting aside Citys decision under the Subdivision Map Act (Gov. Code,[1] 66410 et seq.) to issue a conditional certificate of compliance for a parcel owned by respondents Robert Ramirez and Rick Costa (collectively Owners), and ordering City to issue an unconditional certificate of compliance. City also appeals from the judgment granting declaratory relief in favor of Owners with respect to Citys attorney fees incurred in the course of Owners administrative appeal. We reverse the trial courts order granting the petition for writ of mandate and affirm the judgment on the declaratory relief action.

I. FACTUAL AND PROCEDURAL BACKGROUND

The property at issue is a 5,011-square foot, triangular parcel located in Petaluma. The property was originally part of a larger parcel that was subdivided in 1971 as the Cherry Valley Subdivision. However, due to the fact that the property was of a substandard size for the applicable zoning district, the property was never designated as a parcel in the Cherry Hill Subdivision. Rather, the property was designated as a remainder parcel and the conditions of approval required the subdivider to deed the property to an adjacent property owner and to reserve a 50-foot roadway easement over the property. These conditions were required to be completed prior to the recordation of the final map. In compliance with these conditions, the subdivider executed a deed (the 1971 deed) in favor of an adjacent property owner, but it was never recorded. The final map was inadvertently approved and recorded despite the fact that the conditions set forth in the tentative map had not been fulfilled. The property was not identified as a parcel on the approved tentative map or on the recorded final map.

The county tax assessor, however, at some point assigned a parcel number to the property and began assessing taxes against the subdivider. When the subdivider failed to pay the property taxes, the property was tax-deeded to the state. In 1979, Owners purchased the property for $2,700 at a tax sale.

Shortly after purchasing the property, Owners asked City about developing the property, but were told that the lot was  not big enough  for development. City staff suggested that Owners seek a lot line adjustment by purchasing some land from a neighbor with a large parcel. Consequently, in a 1980 letter to an adjacent landowner, Owners stated they needed some assistance in developing their property, which Owners acknowledged was not buildable.

Nine years later, Owners applied to City for a building permit for a single-family home, but were told that development of the property would not be permitted because the property is not a . . . buildable lot, but a remainder parcel. Then, in September 2005, Owners applied for a certificate of compliance from City. City staff determined that the unrecorded 1971 deed could not be valid as against Owners, and therefore, the property should be deemed to be a legally created remainder parcel under the Subdivision Map Act. (See  66424.6.) City staff determined, however, that the property did not comply with minimum lot size and depth requirements of the zoning standards applicable at the time Owners purchased the property. In light of the substandard size of the property, City issued a conditional certificate of compliance, setting forth the conditions which were required to bring the property into compliance with the local zoning ordinance applicable in 1979. Specifically, the conditional certificate of compliance enumerated the required lot dimensions, to wit: (1) minimum lot area (6,500 square feet), (2) minimum lot depth (100 feet), and (3) minimum lot width (65 feet).

In March 2006, Owners filed an administrative appeal regarding the conditional certificate of compliance. Following two public hearings, City denied the appeal and upheld the conditional certificate of compliance. Thereafter, Owners filed a petition for writ of mandate seeking to overturn Citys determination. Owners also sought declaratory relief, challenging Citys determination that Owners were liable to pay Citys attorney fees incurred in processing Owners administrative appeal, pursuant to the terms of the cost recovery agreement signed by Owners when they filed their appeal of the conditional certificate of compliance.

After reviewing the parties briefs and hearing oral arguments, the trial court granted Owners petition for writ of mandate, requiring City to set aside the conditional certificate of compliance, and to grant Owners appeal and issue an unconditional certificate of compliance. The trial court also granted Owners request for declaratory relief concerning the issue of attorney fees.

In its statement of decision, the trial court found that the subject parcel was created in compliance with, and without violating, the Subdivision Map Act . . . and the Subdivision Ordinance of the City . . . . The trial court further found that although the property did not conform to the applicable zoning requirements set forth in Citys subdivision ordinance (the Ordinance), these standards . . . are not absolute and the City . . . is free to make exceptions in approving a map that creates a parcel, such as the parcel at issue, without violating the Ordinance. In so ruling, the trial court explained that City implicitly determined the property complied with the Ordinance, even though the property did not satisfy the Ordinance in terms of size, width, and depth requirements.

Finally, the trial court found that Owners were entitled to declaratory relief, ruling that the cost recovery agreement purporting to entitle City to its attorney fees in connection with Owners administrative appeal was vague and ambiguous.

Following the judgment in their favor, Owners moved for attorney fees and costs. The trial court determined that Owners were the prevailing parties and awarded them $5,754.90 as attorney fees and costs.[2] The instant appeal followed.

II. DISCUSSION

A. Writ of Mandate

City contends that the trial court erred in granting Owners petition for writ of mandate, and in ordering it to issue an unconditional certificate of compliance. City maintains that it properly issued a conditional certificate of compliance for the property, which was a remainder parcel and which was substandard in area, depth, and width. Conversely, Owners insist that they were entitled to an unconditional certificate of compliance because it is undisputed that the parcel in question, though substandard in size, was lawfully created under the Subdivision Map Act. Owners further contend that even if a conditional certificate of compliance was appropriate, the conditions imposed by City were absolute and, therefore, improper as a matter of law.

1. Standard of Review

 Like the trial court, we also review the administrative record to determine whether its findings are supported by substantial evidence in light of the whole record, our object being to ascertain whether the trial court ruled correctly as a matter of law. [Citations.] The appellate court thus does not review the actions or reasoning of the superior court, but rather conducts its own review of the administrative proceedings to determine whether the superior court ruled correctly as a matter of law. [Citation.] (Hongsathavij v. Queen of Angeles etc. Medical Center (1998) 62 Cal.App.4th 1123, 1136-1137.) In other words, we examine Citys decision, not the trial courts.

Thus, we assess whether City abused its discretion in that it failed to proceed as required by law. (Code Civ. Proc., 1094.5, subd. (b).) We also consider whether Citys findings are supported by substantial evidence, but review de novo any issues of statutory interpretation that may arise. (Id., subds. (b) & (c); Witt Home Ranch, Inc. v. County of Sonoma (2008) 165 Cal.App.4th 543, 551 (Witt Home Ranch).)[3]

2. Subdivision Map Act

We first discuss the legal framework of the Subdivision Map Act (the Act) and then consider the role of a certificate of compliance in the development process.

The Act is  the primary regulatory control governing the subdivision of real property in California. [Citation.] The Act vests the [r]egulation and control of the design and improvement of subdivisions in the legislative bodies of local agencies, which must promulgate ordinances on the subject. ( 66411.) (Gardner v. County of Sonoma (2003) 29 Cal.4th 990, 996-997, fn. omitted (Gardner).) The Act defines  design  as including, among other things, lot size and configuration, as well as other specific physical requirements in the plan and configuration of the entire subdivision that are necessary to ensure consistency with the general plan and any applicable specific plan of the local agency. ( 66418.)

By generally requiring local review and approval of all proposed subdivisions, the Act aims to control the design of subdivisions for the benefit of adjacent landowners, prospective purchasers and the public in general. [Citation.] More specifically, the Act seeks to encourage and facilitate orderly community development, coordinate planning with the community pattern established by local authorities, and assure proper improvements are made, so that the area does not become an undue burden on the taxpayer. [Citations.] (Gardner, supra, 29 Cal.4th at pp. 997-998.)

In practice, the Act requires every landowner proposing to subdivide property to obtain city or county approval of a final map or a parcel map of the subdivision, which must comply with the local ordinances adopted under the Act. ( 66452.1, 66457, 66463; [citation].) A final map is required for a subdivision of five or more parcels, while a parcel map is required for smaller subdivisions. ( 66424, 66426.) Section 66499.30, subdivisions (a), (b), and (c) enforces the requirement of map approval by prohibiting the sale, lease, or financing of a lot until an approved final or parcel map, as appropriate, has been recorded with respect to the lot. (Witt Home Ranch, supra, 165 Cal.App.4th at p. 551.)

As relevant here, when only a portion of real property is subdivided, the Act allows the subdivider to designate the undivided portion as a remainder parcel or to omit it entirely from the map, so long as that portion is not divided for the purpose of sale, lease, or financing. ( 66424.6, subd. (a).) The Act allows a remainder parcel to be sold without any subsequent filing of a parcel map or final map. (Id., subd. (d).) But, the Act expressly provides that for such parcels, the local agency may require a certificate of compliance or conditional certificate of compliance. (Ibid.)

Section 66499.35 governs the issuance of certificates of compliance. Pursuant to that section, an owner of real property may request that a local agency determine whether the property complies with the provisions of the Act and local ordinances enacted pursuant thereto. (Id., subd. (a).) Upon receiving such a request, the local agency shall issue either a certificate of compliance or a conditional certificate of compliance. (Id., subds. (a) & (b).) The local agency must issue a certificate of compliance if the real property complies with the provisions of the Act and local subdivision ordinances. (Id., subd. (a).) But if property does not comply, the agency must issue a conditional certificate of compliance, setting forth the conditions that must be satisfied before the property will be deemed to be in compliance. (Id., subd. (b).)[4] Consistent with all of these legal principles, we conclude City correctly issued a conditional certificate of compliance.

3. Analysis

The trial courts fundamental error was in its conclusion that the parcel in question was created in compliance with, and without violating, . . . the Subdivision Ordinance of the City of Petaluma. In fact, it was a non-compliant remainder parcel that should have been deeded away prior to recordation of the final map. Instead, for reasons no one explains, the city assessor at some point assigned to the remainder parcel an assessors parcel number, resulting in the subsequent purchase of the property by Owners at a tax sale.

Notwithstanding the technicallylegal status of the accidentally created parcel, a conditional certificate of compliance was properly issued. The Act expressly provides that the local agency may require a certificate of complianceor conditional certificate of compliance for a remainder parcel. ( 66424.6, subd. (d), italics added.) When a request for a certificate of compliance has been made, section 66499.35, subdivision (a) requires the local agency to determine whether the real property complies with the provisions of this division and of local ordinances enacted pursuant to this division. (Italics added.) If the local agency determines that the real property does not comply with the . . . local ordinances enacted pursuant to this division, it shall issue a conditional certificate of compliance. (Id., subd. (b), italics added.) Here, it is undisputed that the property does not meet the lot size requirements set forth in Citys Ordinance. Although City may modify these requirements (see, e.g., Petaluma Mun. Code, ch. 20.04,  20.04.120), the administrative record discloses no such modification or other exception to the zoning requirements. The trial courts finding that City implicitly made such an exception simply by approv[ing] a subdivision map creating the subject [remainder] parcel is nowhere supported in the record, and ignores Citys ordinances requiring specific findings before making such modification or exceptions. (See, e.g., Petaluma Mun. Code, ch. 20.40,  20.40.010-20.40.040.)[5]

Owners contention that the conditions imposed are unconstitutional is also unsubstantiated. The conditional certificate of compliance, which merely requires the property to meet minimal lot dimensions applicable to all buildable parcels, does not deprive Owners of equal protection or constitute an uncompensated taking. The conditional certificate of compliance neither on its face nor in its application precludes Owners from seeking a variance, lot line adjustment, or other relief; and City has admitted, both here and below, that these administrative procedures can be utilized by Owners to seek relief from the conditions. In any event, Owners were on noticealthough they did not actually knowthat the parcel was not buildable in 1979, when it was purchased, and cannot now be heard to complain that this is a new condition recently imposed by City.

In sum, we conclude that the trial court erred in ordering City to set aside the conditional certificate of compliance and to issue an unconditional certificate of compliance.[6]

B. Declaratory Relief

City argues that the judgment granting declaratory relief in favor of Owners should be reversed because the trial court erroneously determined that the cost recovery agreement was vague and ambiguous with respect to attorney fees. We disagree.

It is well established that attorney fees are not recoverable as costs unless authorized by agreement, statute, or law. (Code Civ. Proc., 1021, 1033.5, subd. (a)(10); Santisas v. Goodin (1998) 17 Cal.4th 599, 606 (Santisas); Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127-128.) Here, City relies on the cost recovery agreement as authorizing the payment of its attorney fees in connection with Owners administrative appeal. Whether the cost recovery agreement extends to attorney fees turns on the contract language. (Santisas, supra, 17 Cal.4th at p. 608; Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 708 (Exxess Electronixx).) To resolve this question, we apply ordinary rules of contract interpretation. (Santisas, supra, 17 Cal.4th at p. 608; Exxess Electronixx, supra, 64 Cal.App.4th at p. 709.)

The goal of interpreting a written agreement is to ascertain the parties intent. (WDT-Winchester v. Nilsson (1994) 27 Cal.App.4th 516, 528-529.) The language of the instrument must govern its interpretation if the language is clear and explicit. (Civ. Code, 1638; Santisas, supra, 17 Cal.4th at p. 608.) Generally, the words of an agreement are to be understood in their ordinary and popular sense (Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 931; Civ. Code, 1644; Code Civ. Proc.,  1861) unless a contrary intent is shown, such as a specialized meaning due to trade custom and practice or a prior course of dealing (see Code Civ. Proc., 1856, subd. (c)). When there is ambiguity in the contract language, extrinsic evidence may be considered to ascertain a meaning to which the instruments language is reasonably susceptible. [Citation.] (Golden West Baseball Co. v. City of Anaheim (1994) 25 Cal.App.4th 11, 21; Foothill Properties v. Lyon/Copley Corona Associates (1996) 46 Cal.App.4th 1542, 1549.) If the ambiguity cannot be eliminated by extrinsic evidence or the rules of contract interpretation, then the contract is interpreted against the party who prepared it. (Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084, 1094.)

Here, the cost recovery agreement required Owners to pay to City all reimbursable costs, both direct and indirect, including State-mandated costs, associated with the review and processing of the accompanying application for land use approval(s) with respect to the subject property . . . . Reimbursable costs include but are not limited to all items within the scope of the City[]s adopted Costs Recovery Program, . . . as well as the cost of retaining professional and technical consultant services and any services necessary to perform functions related to review and processing of the applications and monitoring of the work. Notably, the cost recovery agreement does not state that attorney fees or litigation costs are reimbursable costs, but rather states reimbursable costs include the cost of retaining professional and technical consultant services and any services necessary . . . . The phrase the cost of retaining professional and technical consultant services and any services necessary is ambiguous at best, but suggests that reimbursement would be required if City needed to retain consultants to provide expertise.

We similarly conclude that City Resolution No. 2004-028 and the fee schedule upon which City relies are equally vague and ambiguous in terms of attorney fees. City Resolution No. 2004-028, which authorizes the cost recovery program, does not include attorney fees in any of the items that may be charged to an applicant filing an appeal. Likewise, the fee schedule is silent as to attorney fees.

Moreover, had City intended to include attorney fees and litigation costs as reimbursable costs in connection with the administrative appeal, it could have included just such language, as it has done in other instances. For example, in the context of legal actions arising out the cost recovery agreement itself, City provided that the prevailing party shall be entitled to recover its reasonable litigation expenses, including costs and attorneys fees. Another example of Citys express articulation of its entitlement to attorney fees is found in City Resolution No. 94-173, which pertains to planning and engineering applications. Pursuant to that resolution, City is authorized to include specified language in applications expressly obligating the applicant to be responsible for the payment of all city attorney costs and fees, both direct and indirect, associated with the processing of this application. Here, however, no such language is found in the cost recovery agreement regarding Owners administrative appeal before the city council.

Because the cost recovery agreement was ambiguous with respect to attorney fees as reimbursable costs and because the administrative appeal did not seek to enforce the cost recovery agreement itself, no contractual attorney fees were recoverable. (See, e.g., Exxess Electronixx, supra, 64 Cal.App.4th at p. 709.) Accordingly, the trial court did not err in granting declaratory relief in favor of Owners, and by finding that City was not entitled to recover attorney fees incurred in connection with Owners administrative appeal before the city council.[7]

III. DISPOSITION

The judgment is reversed and the matter is remanded to the trial court with instructions to enter a judgment denying the petition for writ of mandate regarding Owners request for an unconditional certificate of compliance. The judgment is affirmed with respect to the declaratory relief granted in favor of Owners.

The parties shall bear their own costs on appeal.

________________________

RIVERA, J.

We concur:

___________________________

REARDON, Acting P. J.

___________________________

SEPULVEDA, J.

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[1] All further undesignated statutory references are to the Government Code.

[2] The trial court order awarding Owners their attorney fees and costs is silent as to the statutory basis for this determination.

[3] Owners dispute the applicable standard of review, arguing that the proceeding below was in traditional mandamus (Code Civ. Proc., 1085), rather than administrative mandamus (id., 1094.5). This contention is without merit. The challenged decision was reached after a public hearing at which City received evidence and made a discretionary determination regarding the propertys compliance with the Subdivision Map Act. Clearly, Citys decision to issue a conditional certificate of compliance brought the matter within the ambit of administrative mandamus.

[4] For purposes of the Act, [a] recorded final map, parcel map, official map, or an approved certificate of exception shall constitute a certificate of compliance with respect to the parcels of real property described therein. ( 66499.35, subd. (d).) Here, Owners property was not included in the final map and no approved certificate of exception has ever been filed or recorded for the property.

[5] Owners also assert that Citys determination to issue a conditional certificate of compliance was not supported by substantial evidence, because the ordinance in effect in 1971 when the remainder parcel was created was not included as part of the administrative record. This contention is without merit. Pursuant to section 66499.35, subdivision (b), [a] local agency may, as a condition to granting a conditional certificate of compliance, impose any conditions that would have been applicable to the division of the property at the time the applicant acquired his or her interest therein . . . . (Italics added.) Here there is no serious dispute that the property did not meet the standards applicable in 1979 when Owners purchased the property.

[6] By reason of this holding, the trial courts order awarding attorney fees to Owners as the prevailing party is necessarily reversed. (See Gillan v. City of San Marino (2007) 147 Cal.App.4th 1033, 1053.) However, nothing in this opinion should be deemed as a determination that City is the prevailing party for purposes of attorney fees incurred in the trial court.

[7] By this holding, we express no opinion regarding the merits of Owners passing claim that they are entitled to attorney fees on appeal.