Freeny v. City of San Buenaventura

216 Cal.App.4th 1333

157 Cal.Rptr.3d 768

Robert FREENY et al., Plaintiffs and Appellants,

v.CITY OF SAN BUENAVENTURA et al, Defendants and Respondents.

2d Civil No. B240893

Court of Appeal, Second District, Division 6, California.

Filed June 4, 2013.

See 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 348.

Rebecca S. Riley, Judge, Superior Court County of Ventura. (Case No. 56–2011–00403267–CU–WM–VTA) (Ventura County)

Law Offices of James B. Devine and James B. Devine, for Plaintiffs and Appellants.

Ariel Pierre Calonne, City Attorney, Andy H. Viets, Senior Assistant Attorney, Jennifer Lee, Assistant City Attorney, for Defendants and Respondents.

HOFFSTADT, J. ^*

The California Tort Claims Act (Act) confers immunity from tort liability on public employees when they make “basic policy decisions” in a legislative capacity. (Gov.Code, §§ 820.2, 821, 821.2.) ¹ We hold that public employees' tort immunity for legislative decision-making applies even when that decision-making is also alleged to involve the making of misrepresentations motivated by “actual fraud, corruption or actual malice.” (§ 822.2) For this reason and others, we affirm the dismissal of plaintiffs' suit against a city and five city council members for nearly $2 million in compensatory damages, plus punitive damages, for voting against an application for building permits and variances.

FACTS AND PROCEDURAL HISTORY

We draw these facts from the allegations in the complaint, which we accept as true except where contradicted by the exhibits attached to the complaint. (Tucker v. Pacific Bell Mobile Servs.(2012) 208 Cal.App.4th 201, 210, 145 Cal.Rptr.3d 340.)

I. Administrative Review

Plaintiffs Robert and Linda Freeny (plaintiffs) own two adjacent parcels of land in mid-town City of San Buenaventura (City). For three years, they worked with their own architect and consulted with the City's staff to design a living facility for senior citizens. The City's planning commission (Planning Commission) eventually approved a 44–unit, 42,172–square foot facility (the Project), and concomitantly granted a conditional use permit, a design review, an administrative variance, and a lot-line adjustment.

A group of 35 persons living near the proposed facility appealed the Planning Commission's decision to the City Council. Following a remand to the Planning Commission for further fact-finding, the City Council took up the matter at a public hearing. On a five-to-two-vote, the City Council approved the neighbors' appeal and overturned the Planning Commission's approval. In so doing, the City Council found that building a facility of that “size” on a “street-to-street lot” was “incompatible” with the “existing residential neighborhood.” The City Council stated that plaintiffs “need[ed] to rethink the entirety of the project,” but that its denial was “without prejudice” and invited plaintiffs to submit a “redesign[ed]” project. The City Council subsequently adopted a formal resolution sustaining the appeal “without prejudice.”

II. Plaintiffs' Complaint

Plaintiffs sued the City and five City Council members (collectively, defendants) who voted to reject the Project.² The complaint includes a petition for administrative mandamus seeking an order (1) commanding the City to approve the Project or (2) requiring a new hearing before the City Council. The complaint also prays for $1.8 million in compensatory damages and additional punitive damages arising from tort claims for fraud, misrepresentation and, because plaintiffs are in their 70s, elder abuse.

III. The Trial Court's Ruling

The trial court sustained defendants' demurrers without leave to amend on two grounds. First, the court concluded that plaintiffs' lawsuit was not ripe because the City's denial “without prejudice” left administrative remedies unexhausted. The court rejected plaintiffs' arguments that further exhaustion was futile or would irreparably injure plaintiffs. Second, the court ruled that defendants were immune from liability for adopting laws under sections 818.2and 821; for denying permits or similar authorizations under sections 818.4 and 821.2; and for exercising their discretion under section 820.2. The court concluded that this immunity applied “irrespective of the specific causes of action” plaintiffs alleged.

DISCUSSION

We independently review the trial court's sustaining of a demurrer. (San MateoUnion High Sch. Dist. v. County of San Mateo (2013) 213 Cal.App.4th 418, 425, 152 Cal.Rptr.3d 530 ( San Mateo ).) In so doing, we accept the complaint's allegations as true and construe them liberally to attain substantial justice among the parties. ( Ibid.) We review the trial court's decision not to grant leave to amend for an abuse of discretion. (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091, 32 Cal.Rptr.3d 483, 116 P.3d 1162 (Reynolds ), abrogated on other grounds inMartinez v. Combs (2010) 49 Cal.4th 35, 62-66, 109 Cal.Rptr.3d 514, 231 P.3d 259.) On appeal, plaintiffs bear the burden of establishing error. (San Mateo,supra, at p. 426, 152 Cal.Rptr.3d 530.)

I. Exhaustion of Administrative Remedies

When an administrative forum exists for presenting claims, a party is usually required to present claims in that forum before “resorting to the courts....” (Coachella Valley Mosquito Vector Control Dist. v. California PERB (2005) 35 Cal.4th 1072, 1080, 29 Cal.Rptr.3d 234, 112 P.3d 623.) “Exhaustion requires ‘a full presentation to the administrative agency upon all issues of the case and at all prescribed stages of the administrative proceedings.’ ” (City of San Jose v. Operating Engineers Local Union No. 3 (2010) 49 Cal.4th 597, 609, 110 Cal.Rptr.3d 718, 232 P.3d 701, quoting Bleeck v. State Bd. of Optometry (1971) 18 Cal.App.3d 415, 432, 95 Cal.Rptr. 860.)

This is not a case where the would-be litigant skipped the administrative procedures entirely. To the contrary, plaintiffs presented their application for building permits and variances to the Planning Commission and the City Council. Plaintiffs also obtained a definitive ruling rejecting their application as to the 42,172–square foot project that underlies this lawsuit.

Defendants contend that this was still not enough. Defendants note that the City Council's rejection was “without prejudice,” and argue that plaintiffs have yet to avail themselves of their right under the City's municipal code (SBMC) to file a new application with the Planning Commission. (See SBMC § 24.565.050(H).) Because the City Council advised plaintiffs that they would “need” to “rethink” and “redesign” “the entirety of the project” before submitting a new application, the question presented is whether the duty to exhaust administrative remedies requires plaintiffs to reexhaust their remedies by vetting an entirely different project through the same administrative process even though the project they seek to challenge judicially has already been definitively rejected through that process. We review this question de novo. (Sierra Club v. City of Orange (2008) 163 Cal.App.4th 523, 536, 78 Cal.Rptr.3d 1.)

Whether reexhaustion with an entirely different project is required depends on the nature of the subsequent judicial challenge. If a plaintiff is claiming that a government entity has effected a regulatory taking by “ ‘... deny[ing] [her] all economically beneficial or productive use ...’ ” of her property, denial of a single use or project may not be sufficient. (Landgate, Inc. v. California Coastal Com. (1998) 17 Cal.4th 1006, 1017, 73 Cal.Rptr.2d 841, 953 P.2d 1188, citing Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1015, 112 S.Ct. 2886, 120 L.Ed.2d 798, italics added.) Presentation and rejection of other uses—that is, reexhaustion—may also be necessary to establish that the property has no use. (See Dunn v. County of Santa Barbara (2006) 135 Cal.App.4th 1281, 1299–1301, 38 Cal.Rptr.3d 316; Del Monte Dunes v. City of Monterey (9th Cir.1990) 920 F.2d 1496, 1501.)

However, when all a plaintiff challenges is the denial of a specific use through denial of a special project, the plaintiff need only show that the administrative agency has finally ruled on that project. Requiring reexhaustion in these circumstances would pervert the exhaustion requirement. No longer would exhaustion be a means of allowing administrative agencies the opportunity to apply their expertise and flesh out facts. (Williams v. Housing Auth. of Los Angeles (2004) 121 Cal.App.4th 708, 722, 17 Cal.Rptr.3d 374.) Instead, exhaustion would become a tool for forestalling judicial review indefinitely by leaving the door open for further applications.

Because plaintiffs are not raising a regulatory takings claim and are challenging only the denial of the Project, the City Council's unequivocal rejection of the Project satisfies the exhaustion requirement.

II. Immunity From Tort Damages

Plaintiffs contest the trial court's ruling that defendants are immune from liability for tort damages under the Act. (§ 810 et seq.) We independently review the trial court's construction and application of the Act. (Coito v. Super. Ct. (2012) 54 Cal.4th 480, 488, 142 Cal.Rptr.3d 607, 278 P.3d 860 [statutory construction]; Alvarez v. State of Calif. (1999) 79 Cal.App.4th 720, 728, 95 Cal.Rptr.2d 719 [application], abrogated on other grounds inCornette v. Dept. of Transportation (2001) 26 Cal.4th 63, 74, fn. 3, 109 Cal.Rptr.2d 1, 26 P.3d 332.)

A. City Council Defendants

When it comes to tort suits against public employees, “ ‘the rule is liability, immunity is the exception.’ [Citation.]” (Ramos v. County of Madera (1971) 4 Cal.3d 685, 692, 94 Cal.Rptr. 421, 484 P.2d 93, limited on other grounds byCaldwell v. Montoya (1995) 10 Cal.4th 972, 978, fn. 8, 42 Cal.Rptr.2d 842, 897 P.2d 1320 ( Caldwell ); see also § 820, subd. (a) [“Except as otherwise provided by statute ..., a public employee is liable for injury caused by his act or omission to the same extent as a private person”].) However, the Act...