Pear v. City of S.F.

67 Cal.App.5th 61

281 Cal.Rptr.3d 841

Matt PEAR et al., Plaintiffs and Respondents,

v.CITY AND COUNTY OF SAN FRANCISCO, Defendant and Appellant.

H045045

Court of Appeal, Sixth District, California.

Filed July 28, 2021

As Modified July 30, 2021

Counsel for Plaintiffs and Respondents MATT PEAR et al: Basil S. Shiber, Jana L. Contreras, Walnut Creek, Miller Starr Regalia

Counsel for Defendant and Appellant CITY AND COUNTY OF SAN FRANCISCO: Dennis J. Herrera, City Attorney, James M. Emery, Brian F. Crossman, Deputy City Attorneys

Grover, J. Defendant City and County of San Francisco obtained fee title to an 80-foot strip of land by grant deed in 1951 from the grandparents of plaintiffs Matt and Mark Pear to construct an underground pipeline conveying water to San Francisco as part of the Hetch Hetchy Regional Water System. The deed reserved certain rights in plaintiffs' family's favor, including among other things the right to use the surface of the property for pasturage and the right to construct roads and streets "over and across" the property "but not along in the direction of the City's pipe line or lines." The property has served since the 1960s as a paved parking lot for commercial uses on plaintiffs' properties on either side of the pipeline. When a dispute arose about whether parking and related circulation was authorized under the deed versus under a revocable permit issued by defendant in 1967, plaintiffs filed this quiet title action to determine whether their current uses of the pipeline property are authorized under the deed.

A bench trial was conducted after a different panel of this court reversed a summary judgment entered in defendant's favor. The trial court ultimately concluded that the deed authorized plaintiffs to use the pipeline property for ornamental landscaping as well as automobile access, circulation, and parking. We agree with the trial court that the deed authorizes ornamental landscaping, the three existing paved roads running across the pipeline property, and use of the property to access auto mechanic service bays. However, while recognizing that some degree of parking incidental to those authorized uses may be allowed, we will reverse the judgment because the express language of the deed does not allow plaintiffs' current use of the pipeline property as a parking lot.

I. TRIAL COURT PROCEEDINGS

The following summary is based on the statement of decision, supplemented with evidence from the bench trial:

Plaintiffs own three parcels of varying sizes totaling around 12 acres in Mountain View, bordered by Showers Drive to the west, California Street to the north, and Ortega Avenue to the east. The parcels contain a Target retail store, a Wheel Works service center, and a single-family residence. Between the Target parcel to the south and the smaller Wheel Works parcel to the north, defendant owns a strip of land (the pipeline property) approximately 80 feet wide and 863 feet long. About 75 percent of the pipeline property is paved and used for access, circulation, and parking for plaintiffs' adjacent commercial properties. The Wheel Works service bays are perpendicular to the pipeline, so customers' cars must be driven across the pipeline property to be serviced. Two underground pipelines running the length of the pipeline property convey water as part of the Hetch Hetchy Regional Water System.

A. HISTORY OF THE DEED AND REVOCABLE PERMIT

The San Francisco Board of Supervisors passed a resolution in 1949 authorizing condemnation proceedings to acquire property (including the pipeline property) for a "public use and purpose, to wit: For the construction, maintenance and use of a series of aqueduct pipe lines for the purpose of conveying additional water from its Hetch Hetchy Water Supply System." The resolution states title would be taken in fee simple "subject to such reservations and conditions ... as may be necessary and proper to secure to the present owners ... the privilege of crossing over the same and to construct and maintain over and across [the property] roads, streets, overhead power lines, telephone lines, telegraph lines, [and] also sewers, water pipes, gas pipes and other underground utilities." Those reserved rights were subject to the limitation that the property could not be used in a manner that would "interfere with, damage, or endanger in any way any aqueduct, pipe lines or other structures" built by defendant.

An eminent domain complaint was filed in 1950. Plaintiffs' grandparents (who owned the pipeline property at the time) retained counsel and negotiated the acquisition terms. Defendant sought to minimize severance damages when negotiating the purchase price, given that the pipeline route would cut through plaintiffs' grandparents' property and arguably diminish its value. (See Code Civ. Proc., § 1263.410.) Plaintiffs' grandparents' counsel wrote to defendant objecting to defendant's calculation of the pipeline property's appraised value. The attorney argued the property was "worth $3,500.00 an acre for subdivision purposes, and in the event the owner were to subdivide on his own, it would be possible for him to get substantially more by selling lots." Defendant ultimately paid $5,702 for the pipeline property, which is roughly equal to $3,500 per acre.

Plaintiffs' grandparents conveyed the property to defendant by deed in 1951. (A different panel of this court concluded in an earlier opinion that defendant obtained fee simple title in the transaction.) The deed granted defendant the right to remove any existing fences, install gates as necessary, and "protect pipes and other structures or improvements ... by means of fences or otherwise." However, the deed forbade defendant from constructing "any other fences" on the pipeline property "without the consent" of plaintiffs' grandparents.

The grandparents' conveyance was subject to certain express reservations. The first states plaintiffs' grandparents "are permitted the right to plant, cultivate, irrigate, harvest and retain crops from the [pipeline property], and to use said land for pasturage," until defendant needed the land for construction purposes, and thereafter to use the surface for those purposes on any parts of the pipeline property not actually needed by defendant for construction and maintenance of pipelines and other structures. The only limitation on agricultural use in the first reservation was that plaintiffs' grandparents "shall not plant any trees" on the pipeline property.

The second reservation states:

"Grantors are permitted the right to construct, maintain, use, repair, replace, and renew, over and across [the pipeline property], (but not along in the direction of the [defendant's] pipe line or lines), fences, roads, streets, earth fills, sewers, water pipes, gas pipes, electric power lines, telephone lines, telegraph lines; provided, however, that the locations and grades of such improvements and structures of the Grantors, and the amount of any earth fill, proposed to be placed on [the pipeline property] by the Grantors, shall first be approved by [defendant's] Public Utilities Commission; provided further, that the Grantors shall not use [the pipeline property], or permit the same to be used, for any purpose or in any manner which will interfere with, damage, or endanger in any way any aqueduct pipe lines and other structures and improvements, appurtenances or appliances of the [defendant]. The Grantors shall install gates in any additional fences which [they] may construct across [the pipeline property] sufficient in width to allow passage of trucks and other equipment."

The two reservations expressly "inure to the benefit of, and bind, the heirs, successors and assigns of the respective parties hereto."

Plaintiffs' grandparents continued to use the land on either side of the pipeline property as an orchard and ran a year-round farm stand selling produce until the mid-1960s. The surface of the pipeline property was used for associated automobile access and parking during that period. But there is no evidence that defendant approved or was even aware of how the surface of the pipeline property was being used at that time.

Plaintiffs' family leased the parcel now occupied by Target for a planned retail store in 1966. Defendant was notified of the proposed development by the City of Mountain View and communicated with plaintiffs' family about the parties' rights in the pipeline property. The parties disagreed about how to interpret their respective rights under the deed. To allow the development to proceed, plaintiffs' family accepted under protest a revocable permit from defendant in 1967, which allowed use of the pipeline property for " ‘additional parking and landscaping’ " in exchange for payment of $50 per month, indemnification, and insurance. (The parties stipulated at trial that the permit was admissible for the limited purpose of showing that the foregoing quoted language was part of it. Plaintiffs argued the remainder of the permit was inadmissible as a settlement agreement (Code Civ. Proc., § 1152).)

In 2012, defendant sought to renegotiate the monthly payment under the revocable permit. Defendant sent an employee from its Public Utilities Commission to inspect the pipeline property and prepare an estimate of the market value of plaintiffs' uses of the property. The employee estimated the market value of the existing access, circulation, and parking uses of the pipeline property as between $4,500 and $6,200 per month. Defendant informed plaintiffs it sought to increase the rent amount in the revocable permit to reflect defendant's estimate of market value. Plaintiffs sued to quiet title after negotiations were unsuccessful.

B. QUIET TITLE LITIGATION

Plaintiffs' complaint contained four causes of action seeking: (1) to quiet title under the deed to allow plaintiffs to use the pipeline property for its current uses; (2) an irrevocable license to use the pipeline property for its current...