Gundogdu v. City of San Mateo

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TONY MEHMET GUNDOGDU et al., Plaintiffs and Appellants, v. CITY OF SAN MATEO, Defendant and Respondent.

A168173

California Court of Appeals, First District, Fourth Division

October 24, 2024

NOT TO BE PUBLISHED

(San Mateo County Super. Ct. No. 22-CIV-04242)

STREETER, J.

Plaintiffs Tony Mehmet Gundogdu and Aynur Gundogdu appeal after the trial court sustained a demurrer to their complaint for inverse condemnation arising from the denial of a permit to construct a 10-unit apartment building in San Mateo. The court ruled the Gundogdus' action was barred by the applicable 90-day statute of limitations, because they filed suit more than four years after defendant City of San Mateo (the City) denied their permit application.

On appeal, the Gundogdus contend an exception to the 90-day limitations period applies. According to them, an earlier administrative mandamus action brought by other parties to challenge the permit denial- an action that was the subject of our opinion in California Renters Legal Advocacy &Education Fund v. City of San Mateo (2021) 68 Cal.App.5th 820 (California Renters)-established that a taking of the Gundogdus' property occurred, so the present case merely seeks to fix the amount of damages. We reject the Gundogdus' argument, and we agree with the trial court that the present action is time-barred. We therefore affirm.

I. BACKGROUND

A. The Permit Application and the Mandamus Action^[1]

In 2015, the Gundogdus submitted an application to build a four-story, 10-unit multifamily residential building in San Mateo. Staff to the City's planning commission, after securing minor changes to the proposal, recommended that the application be approved, but the planning commission denied the application without prejudice on October 10, 2017. The San Mateo City Council (the City Council) considered the appeal, and on February 5, 2018, upheld the planning commission's decision, also denying the application without prejudice.

On April 26, 2018, San Francisco Bay Area Renters Federation (an association of renters), California Renters Legal Advocacy and Education Fund (CARLA) (a nonprofit corporation), Victoria Fierce, and John Moon filed a petition for a writ of administrative mandamus (Code Civ. Proc., § 1094.5), alleging the permit denial violated the Housing Accountability Act (HAA) (Gov. Code,^[2] § 65589.5) and seeking to compel the project's approval. The petition named as respondents the City, the City Council, and the City's planning commission. The Gundogdus were named as real parties in interest. The petition did not include a claim for inverse condemnation or allege that the permit denial effected a taking of the Gundogdus' property.

The trial court (Hon. George A. Miram) denied the petition. CARLA and the two individual petitioners (Fierce and Moon) appealed, and in September 2021 we reversed. (California Renters, supra, 68 Cal.App.5th at p. 831 &fn. 2; id. at p. 833.) We concluded that the City's denial of the permit application violated the HAA and that the HAA was consistent with the California Constitution. (California Renters, at pp. 831, 845-846, 854.) We directed the trial court to grant writ relief and to order the City to reconsider the matter. (Id. at p. 855.) We stated: "The judgment of the trial court is reversed. The trial court shall issue a writ of mandate directing the City to (1) vacate its February 5, 2018 action upholding the planning commission's decision to deny the application, and (2) reconsider the challenge to the planning commission's decision in accordance with the views expressed in this opinion. The trial court may make any other appropriate orders that are consistent with this opinion." (Ibid.)

On December 16, 2021, the trial court (Hon. Nancy L. Fineman, assigned to the case following Judge Miram's retirement) issued a writ requiring the City respondents to vacate the City Council's denial of the permit application and to reconsider the matter in accordance with the views expressed in this court's opinion. On February 24, 2022, the City filed a return to the writ, confirming that it had reversed its prior decision; it had concluded that the application complied with all objective design standards established by the City; and it had issued the requested permits.

B. The Present Action

On October 12, 2022, the Gundogdus filed their initial complaint in the present action, naming as defendants the City and the City Council. The complaint alleged a cause of action for violation of due process pursuant to title 42 United States Code section 1983, as well as a cause of action for inverse condemnation. The Gundogdus alleged the City denied their permit application on February 5, 2018. The Gundogdus alleged the denial caused them four or five years of delay damages from loss of rental income and at least a 50 percent increase in the cost of construction, for a total of at least $6 million.

The City parties demurred to the complaint, arguing both causes of action were barred by the applicable statutes of limitations. The trial court (Judge Fineman) sustained the demurrer with leave to amend.

The Gundogdus then filed a first amended complaint (FAC) on February 7, 2023. Like the original complaint, the FAC alleges that the City denied the Gundogdus' permit application on February 5, 2018, and that the denial caused four or five years of delay damages from loss of rental income and increased construction costs, totaling at least $6 million.

The FAC includes only a cause of action for inverse condemnation and omits the separate due process claim that was asserted in the original complaint. The FAC does, however, allege that a constitutional violation occurred. Specifically, the FAC alleges that, under principles of issue preclusion, there were findings of fact and conclusions of law in the previous mandamus action by the CARLA petitioners that establish a compensable taking in violation of the Fifth Amendment to the United States Constitution and article I, section 19 of the California Constitution. The FAC alleges that only the amount of compensation remains to be resolved.

The City defendants again demurred on statute of limitations grounds, and the court (Judge Fineman) sustained the demurrer, this time without leave to amend. The court ruled the Gundogdus' present action for inverse condemnation filed in October 2022 was barred by the applicable 90-day limitations period (§§ 65009, subd. (c), 65589.5, subd. (m)), which began to run when their permit application was denied in February 2018. Rejecting the Gundogdus' position, the court ruled there were no findings or conclusions in the prior mandamus action that establish a compensable taking occurred.

A judgment of dismissal was entered, and the Gundogdus appealed.^[3]

II. DISCUSSION

A. Standard of Review

" 'In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory.' [Citation.] '"' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.... We also consider matters which may be judicially noticed." . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.'" '" (Mathews v. Becerra (2019) 8 Cal.5th 756, 768.)" 'When a ground for objection to a complaint, such as the statute of limitations, appears on its face or from matters of which the court may or must take judicial notice, a demurrer on that ground is proper.'" (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 746.)^[4]

B. Analysis

The parties agree the Gundogdus' inverse condemnation action had to be brought within 90 days of the City's February 2018 permit denial (although they cite different code provisions as establishing the 90-day period), unless an exception described in Hensler v. City of Glendale (1994) 8 Cal.4th 1 (Hensler) applies. In Hensler, the California Supreme Court held that "an action in inverse condemnation" challenging the adoption or application of an ordinance enacted pursuant to the Subdivision Map Act (§ 66410 et seq.) "is governed by" the 90-day limitations period in section 66499.37, "unless it alleges the existence of a final judgment establishing that there has been a compensable taking of the plaintiff's land." (Hensler, supra, 8 Cal.4th at p. 7.) Hensler "identified an exception to the general rule against splitting claims." (Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761, 779 (Kavanau).)

In Honchariw v. County of Stanislaus (2015) 238 Cal.App.4th 1 (Honchariw), the Fifth District Court of Appeal considered the scope of "the Hensler exception" (Honchariw, at p. 11) to the usual statute of limitations (which in that case, as in Hensler, was the 90-day period in § 66499.37) (Honchariw, at p. 5). The Honchariw court concluded that, for a property owner to bring a later claim for damages under "the two-step procedure identified in Hensler" (Honchariw, at p. 5), the property owner must first bring a timely mandamus action (within the 90-day limitations period) that expressly raises the taking issue (id. at pp. 13-14). The Honchariw court stated that "Hensler requires, at a minimum, the [prior] mandamus action to challenge the validity of the regulation or administrative decision on the ground it effected an unconstitutional taking." (Honchariw, at p. 13, italics added.) It is not sufficient that a prior mandamus action alleged or established that the regulation or administrative decision was invalid on some other ground, such as that it was inconsistent with statutory requirements. (Id. at pp. 14-15, 5.)

Honchariw explained: ...