January 2005 - Los Angeles County Bar Association

Transcription

20th Annual Real Estate Law Issue
January 2005 / $4
E A R N MCLE CR E D I T
DELAY AND
DISRUPTION
LITIGATION
page 31
A Line
in the Sand
Los Angeles lawyer Philip J. Hess analyzes the legal controversies
over public access through private beachfront property page 24
PLUS
Urban Infill Housing page 12
New Water Legislation page 18
Equity in Boundary Disputes page 40
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AL6271
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January 2005
Vol. 27, No. 10
FEATURES
24 A Line in the Sand
BY PHILIP J. HESS
Beachfront homeowners have employed numerous strategies to delay, if not
altogether halt, efforts to enforce offers to dedicate access through their property
31 Delay of Game
BY JOHN D. DARLING
Delay and disruption litigation has proven to be a vexing problem for both owners and
contractors
Plus: Earn MCLE credit. MCLE Test No. 133 appears on page 33.
40 Setting Boundaries
BY MARK L. SHARE
Courts have employed a nuanced approach when granting equitable easements to
resolve boundary disputes
LosAngelesLawyer
The magazine of
The Los Angeles County
Bar Association
DEPARTMENTS
10 Barristers Tips
Helping public works contractors avoid
FCA lawsuits
47 Computer Counselor
Addressing Web browser security
BY CAROLE LEVITT AND MARK ROSCH
BY THOMAS F. QUILLING
12 Practice Tips
The challenges of infill housing
52 Closing Argument
What lawyers can contribute through jury
participation
BY JONATHAN C. CURTIS AND MARY C. KLIMA
BY JACK R. GOETZ
18 Practice Tips
New water requirements for large-scale
developments
49 Classifieds
50 Index to Advertisers
BY BRUCE TEPPER
Cover photograph by Tom Keller
51 CLE Preview
46 By the Book
Matthew Bender Practice Guide:
California Landlord-Tenant Litigation
REVIEWED BY GORDON ENG
LosAngelesLawyer
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4929 Wilshire Blvd., Suite 740 Los Angeles, CA 90010
hen a 1,300 square-foot turn-of-the-last-century bungalow around
the corner from Purple Panther Tattoo on Sunset Boulevard sells for
over $800,000, “affordable housing” becomes an oxymoron even
among the triple-digit crowd. For the working class and poor in Los
Angeles, affordable housing is increasingly a friend’s couch or a
family member’s garage or a small apartment in an outlying suburb. The city of Los
Angeles will fall approximately 30 percent short of its general plan goal to build 8,000
affordable housing units per year between 1998 and 2005. That is why most city
hall insiders agree that mandatory inclusionary affordable housing is coming.
The city council has proposed an ordinance that would require developers of new
market rate housing for sale or rent to include a certain percentage of units affordable to very low-, low-, and moderate-income households. The inclusionary units
typically have rent or sales prices restricted by covenants for a specified term of affordability.
In return, developers receive various benefits intended to offset the costs of providing the mandatory affordable units. These benefits include fee deferments or
waivers, density bonuses, increased height, decreased open space requirements,
and reduced parking. Other jurisdictions allow developers to pay an in-lieu fee rather
than build the affordable units, but there is strong political opposition to an in-lieu
fee in Los Angeles.
But who qualifies for affordable housing? Qualification is based on a percentage of the Los Angeles County Annual Median Income (AMI), which is currently
$59, 500. For a family of four, the affordable housing income thresholds are 50 percent AMI for very low income, 80 percent AMI for low income, and 120 percent
AMI for moderate income. For a family of four, a very low-income unit rents for
$897 per month and sells for $95,187, low-income units rent for $1,021 per month
and sell for $145,094, and moderate-income units rent for $1,950 and sell for
$242,646.
The problem is that many middle-income people earn too much to qualify for
affordable housing. For example, with a starting annual salary of approximately
$75,000, LAPD officers do not qualify for any affordable housing under the ordinance. An LAPD officer could not afford the little bungalow around the corner from
the tattoo parlor, but the officer could move his or her family of four into some of
the apartments in the neighborhood if the little ones don’t mind sharing a room.
For this reason and others, the Central City Association and the Valley Industry
Commerce Association oppose mandatory affordable housing. In addition, the
CCA argues that the housing problem in Los Angeles is not the lack of affordable
housing but underproduction of housing at all income levels. In 2003, 44 percent
of all new housing in Los Angeles qualified as affordable housing.
To the city’s credit, it has formed working groups of developers, city staff, and
affordable housing advocates to help frame and refine the ordinance. The city’s consultant, Rosen & Associates, produced a laudably comprehensive study in 2002 and
continues its work with stakeholders.
Every member of the Los Angeles County Bar Association is related to, works
with, employs, or represents a person or entity that could realize benefits or burdens as a result of the proposed mandatory inclusionary affordable housing ordinance. It therefore seems a fitting backdrop to Los Angeles Lawyer’s 20th annual
Real Estate Law issue.
■
W
R. J. Comer is a partner at Allen Matkins Leck Gamble & Mallory LLP, where he specializes in
land use law and municipal advocacy. Gordon Eng, a sole practitioner in Torrance, specializes
in business transactional and real estate law. Comer and Eng are the coordinating editors of
the 20th annual Real Estate Law issue.
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Barristers Tips
BY THOMAS F. QUILLING
Helping Public Works Contractors Avoid FCA Lawsuits
CONTRACTORS AND THE ATTORNEYS who represent them should uti- the MTA submitted proof of over $400,000 in actual damages. The
lize caution in meeting the contract requirements for public works proj- court also found that Oved submitted a minimum of 135 separate false
ects. Recent cases indicate that state and local agencies are prepared claims that included DBE violations during the course of the conto use California’s False Claims Act (FCA) against contractors that struction. Each of these claims subjected the Oved parties to a
violate provisions of the Disadvantaged Business Enterprise (DBE), $10,000 fine.
In another case, Kajima Engineering & Construction, Inc. v. Los
Minority Business Enterprise (MBE), and Women Business Enterprise
(WBE) regulations. In particular, attorneys and contractors should Angeles,4 the contractor sued Los Angeles for $35 million in damages
expect to review the outcome of the appeal of Tutor-Saliba-Perini J.V. arising from the reconstruction of the Badger Avenue Bridge for the
v. Los Angeles Metropolitan Transportation Authority,1 which may port of Los Angeles. The city filed a cross-complaint containing a total
of 21 causes of action, including 10 separate violations of the FCA,
set precedent for any future bidding for public works projects.
The federal False Claims Act was established in 1896 and was substantially amended
in 1986. A number of states also passed their
In a case involving the construction of the Los Angeles subway
own FCAs, often based on the 1986 federal law.
California’s law, based on the federal model,
was enacted in 1987.
system, a jury awarded the Metropolitan Transportation Authority
The California FCA imposes liability on a
person who knowingly presents, makes, or
submits a false claim. It is sufficient to show
$29.5 million in damages, basing the decision significantly on a
that a person acted in reckless disregard of
the truth or falsity of the information in the
claim. No proof of a specific intent to defraud
number of false claims violations by Tutor-Saliba-Perini.
is required. The act states that a violator is liable
for three times the amount of the damages
caused by the false claim. In addition, each
act can trigger a separate penalty of up to $10,000. Furthermore, a bid-shopping, substitution of subcontractors in violation of the Public
contractor found liable for asserting a false claim can be required to Contract Act, and various acts in violation of the federal Racketeer
pay the reasonable attorney’s fees and costs of the public agency. Courts Influenced and Corrupt Organizations Act. The false claim allegations
have found FCA liability when contractors falsely certified DBE included violations of the city’s MBE requirements. The basis for the
compliance in order to induce government agencies to award con- violations was Kajima’s attempt to meet the MBE regulations by using
tracts.2
a pass-through MBE enterprise. Kajima indicated in the contract
In California, several recent cases illustrate the activist approach that an MBE subcontractor would perform more than $2 million in
taken by a number of public agencies in prosecuting actions under work. Actually, the subcontractor performed slightly over $200,000
the FCA. In a case involving the construction of the Los Angeles sub- in actual work and passed through the remaining monies of work perway system, a jury awarded the Metropolitan Transportation formed by a non-MBE subcontractor, with a mark-up.
Public agencies in Los Angeles are utilizing DBE, MBE, and WBE
Authority (MTA) $29.5 million in damages, basing the decision significantly on a number of false claims violations by Tutor-Saliba-Perini. regulations as a basis to assert violations of the FCA. Contractors and
In that case, the MTA prevailed on its claim that virtually every attorneys should use caution to meet the bidding requirements for pubprogress payment application submitted by the contractor through- lic works contracts and pay close attention to fulfilling the DBE, MBE,
■
out the course of the project constituted a false claim. Furthermore, and WBE requirements.
the MTA pinpointed numerous false statements contained in letters
or other documents sent by the contractor to the MTA. The jury also 1 Tutor-Saliba-Perini J.V. v. Los Angeles Metro. Transp. Auth., No. BC123559 (L.A.
awarded damages under the FCA against the contractor for violat- Super. Ct., Aug. 1, 2001).
2 See, e.g., Harrison v. Westinghouse Savannah River Co., 176 F. 3d 776 (4th Cir.
ing federal DBE regulations.
1999).
A more recent case awarded the MTA $5.4 million in damages, 3
Oved & Assocs. Constr. Servs. Inc. v. Los Angeles Metro. Transp. Auth., No.
again involving the construction of the Los Angeles subway system, BC123559 (L.A. Super. Ct., Mar. 2004).
based on a number of false claims violations of DBE regulations.3 In 4 Kajima Eng’g & Constr., Inc. v. Los Angeles, 95 Cal. App. 4th 921 (2002).
Oved & Associates Construction Services Inc. v. Los Angeles
Metropolitan Transportation Authority, an order granting the MTA’s Thomas F. Quilling is an associate with Holland & Knight LLP and serves on
request for $5.2 million in damages and penalties was awarded after the Barristers Executive Committee.
MARTY JOSEPHSON PAYS ATTENTION
Practice Tips
Tips
BY JONATHAN C. CURTIS AND MARY C. KLIMA
RON OVERMYER
The Challenges of Infill Housing
HOUSING SHORTAGES throughout California and the economic and
social needs of local communities have sparked a growing interest in
infill housing, which is higher density housing, often created in the
midst of existing neighborhoods. Infill housing can involve the creation or modification of condominiums, apartments, townhouses, and
single-family homes. Infill housing represents not only a response to
a housing shortage but also an attempt to address other problems facing California communities. Successful infill housing can only be
achieved, however, by understanding the problems, needs, and limitations of each individual community.
In recent decades California has experienced dramatic changes in
demographics that have resulted in the recent focus on infill housing.
Over the past 30 years, the population of California has greatly
increased. As the population grew, many communities experienced
a strong trend toward suburban growth, which drew many middleclass households away from the cities. Lower land prices in suburban areas allowed developers to build housing that was more affordable to home buyers. Access to freeways and local governments
seeking to enlarge their tax base encouraged this large demographic
shift. Suburban development created many communities with low population density that were dependent on the automobile.
Suburban development not only includes residential development
but also stimulates the creation of new office, industrial, and retail
space. The advent of big box centers, in conjunction with every
county’s and city’s desire for more sales tax, has worked to ensure an
abundance of newly constructed retail space. For many residents, however, with this growth has come an increase in the time of the daily
commute. As California’s population continues to expand, infill
housing has arisen as residents seek an equilibrium between many variables, such as housing costs and the need for a shorter commute.
The state’s Department of Housing and Community Development
estimates an increase of more than 12.5 million residents and approximately 5 million households in California between 1997 and 2020.1
In the 1990s, only 1.11 million housing units were added, compared
to the 2.07 million units built in the previous decade. In addition, multifamily housing fell to a mere 25 percent of total output, falling from
a rate of 45 to 49 percent of total housing construction during the
1960s, 1970s, and 1980s.2 Projecting these numbers into the future,
the result is that less than 60 percent of the new housing units that
are needed to accommodate the projected population growth will be
built.3 Essentially, an average of 220,000 housing units will need to
be built each year to meet the housing requirements of California’s
growing population.4 New planned communities and single-family
home tracts will supply a portion of the housing demand in California,
but this type of housing cannot fill all the demand.
These trends indicate significant problems for California. The
most critical of these may be summarized as a housing shortage and
its resulting high cost,5 projected increases in traffic congestion over
the next 20 years,6 a growing concentration of poverty in some urban
areas, the loss (or fragmentation) of farmland and open space, and
a decline in economic competitiveness. These problems and issues have
helped renew interest in developing more housing in urban centers.
Many policy makers, planners, and developers in California are
now focusing on infill housing. Infill housing is relatively dense compared to suburban developments and represents an effective way to
meet a community’s affordable housing and population growth
needs. Infill housing developments are built in proximity to existing
transit routes and job centers, or within walking distance of services
and entertainment. Such planning and development helps to reduce
the automobile use of many residents.
Infill housing typically capitalizes on existing community assets such
as parks, transit, and other infrastructure and encourages new community assets such as child care centers, art districts, and shopping
areas. Moreover, it has the potential to increase jobs, purchasing power,
and public amenities in urban neighborhoods, generate tax dollars
for the local government, and promote redevelopment. Such redevelopment contributes to the elimination of crime associated with
vacant, abandoned, or underutilized properties.
The demand for infill housing is supported by a wide variety of
people, such as empty nesters who raised their children in suburban
areas and couples with double income and no children, who prefer
higher density living near restaurants and entertainment centers.
Moreover, recent developments in Los Angeles, Pasadena, and the midWilshire district have become popular places to live for young professionals.
Jonathan C. Curtis is a partner and Mary C. Klima is an associate in the Los
Angeles office of Sheppard, Mullin, Richter & Hampton LLP, where they specialize in real estate and land use law.
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AL6297
Infill housing is not just for the wealthy.
By building housing around or near public
transportation and other centers, middleand low-income households can also reap
the benefits of infill housing. Everyone from
mid-level professionals, such as financial analysts and nurses, to individuals working in the
service sector, such as janitors and receptionists, can benefit from living very close to
the existing assets of a community. California,
along with a few other states, has begun to
recognize the potential benefits of infill housing and has adopted several statutes to
encourage infill housing.7 Some cities encourage infill housing by providing incentives to
developers. Examples of incentives include
lower impact fees if a developer upgrades
infrastructure and amenities; potential fast
track and streamlined permitting; and reduced
lot size, setback, and parking requirements.
Some cities also provide creative zoning for
mixed-use developments to increase flexibility and allow for the transitioning of uses
among neighborhoods in a community.
Unfortunately, there are also many barriers and challenges to developing infill housing. Often, legislative amendments to the
city’s general plan and zoning provisions are
necessary. Neighborhood opposition to new
high density housing may also exist and result
in constant battles waged by groups who
oppose infill developments in their communities. Fragmented decision making among
governmental entities stifles the process. In
addition, outdated infrastructure, environmental contamination, the extensive regulations of the California Environmental Quality
Act (CEQA), and brownfields development
issues plague the potential development of
infill housing.
Given these barriers and challenges, the
development of infill housing requires an
experienced development team, made up of
public and private representatives, that is
able to invest significant predevelopment time
and capital to identify the right type of infill
housing and to create a strategic and effective
plan for the community.
Successful infill housing requires one to see
beyond the vacant or underutilized property
and have a thorough understanding of the
entire community, with particular attention
to the entitlement process. This picture
includes an understanding of the parties
involved, a community’s current plans, a
community’s needs and problems, infrastructure opportunities and limitations, fiscal
problems, and the maze of federal, state, and
local laws and regulations.
The parties who may have control or
influence in a proposed infill project include
government entities; elected representatives;
city managers, planners, and economic development directors; property owners and own14 Los Angeles Lawyer January 2005
ers of adjacent property; business organizations and owners; construction and permanent
lenders; architects, engineers, consultants,
and contractors; and utility providers. Each
of these actors and their agendas must be
considered because they can individually or
collectively encourage or impede planning
and development.
The General Plan
Once the parties are identified and their interests understood, relevant plans must be closely
examined for consistency and be adjusted
appropriately. At the heart of this inquiry
lies not only the zoning code but what is
called the general plan. Each city and county
is required to adopt a comprehensive, longterm general plan for the physical development of the city or county and for land outside of its boundaries affected by its plans.8
The general plan is often viewed as the document governing the direction of future land
use and contains a statement of development
policies that sets forth objectives, principles,
standards, and proposals.9
The California Supreme Court recognized
the importance of the general plan in Lesher
Communications, Inc. v. Walnut Creek.10 In
Lesher, the court positioned the general plan
at the top of the planning hierarchy—subordinating zoning ordinances, tentative maps,
and development agreements to the general
plan when they were inconsistent with it.
Such inconsistent land use actions were
“invalid at the time [they were] passed.”11
Government Code Section 65302 details
seven mandatory elements to be included in
a general plan.
The first is the land use element. This designates the proposed general location and
extent of uses of the land for housing, business, industry, open space, agricultural, and
natural resources. The land use element also
includes a statement of the population density and building density recommended for the
area covered by the plan. Finally, the land use
element identifies areas subject to flooding,
and designates parcels of land for the production of timber when appropriate.12 In
practice, the land use element is one of the elements of the general plan most frequently at
issue.
The second required element of a general
plan is circulation, which designates the general location of existing and proposed thoroughfares, major transportation routes, terminals, and other public utilities and facilities
in conjunction with the land use element of
the general plan.13
The third element is housing—the most
significant for infill housing purposes—which
consists of the identification and analysis of
housing needs along with a statement of
goals, policies, objectives, and scheduled pro-
grams for the development of housing. The
housing element must identify adequate sites
for housing for all economic segments of the
community.14
Requirements for the housing element
have been codified beginning at Government
Code Section 65580. The legislative finding
accompanying the enactment of these requirements declares, “The availability of housing
is of vital statewide importance, and the early
attainment of decent housing and a suitable
living environment for every California family is a priority of the highest order.”15 This
legislation encourages the cooperation of all
levels of government in the achievement of
these goals.
In assessing a community’s housing needs,
the general plan should take into account
population and employment trends; household characteristics such as level of payment
compared to ability to pay; housing characteristics such as overcrowding; an inventory
of land suitable for residential development;
an analysis of both governmental and nongovernmental constraints upon the maintenance, improvement, or development of housing; an analysis of special housing needs (such
as housing for the handicapped, elderly, and
large families); and an analysis of opportunities for energy conservation in relation to
residential development.16
In addition, the housing element should
also include a statement of the community’s
goals, quantified objectives, and policies
related to the maintenance, improvement,
and development of housing. To foster progression towards these goals, the housing
element should include a five-year schedule of
actions to reach the stated goals.17
The housing element requirement also
includes a provision to determine each local
government’s share of regional housing needs.
The distribution of regional housing needs
takes into account market demand for housing, employment opportunities, the availability of suitable sites and public facilities, the
type and tenure of housing needs, commuting patterns, and the housing needs of farm
workers. The distribution must make a concerted effort to avoid further impacting of
areas with high proportions of lower-income
households. The Department of Housing and
Community Development uses data provided
by the Department of Finance and consults
with local councils of government to determine the regional share of the statewide housing need. Each council of government also
determines housing needs for its region based
on data provided by the Department of
Housing and Community Development. This
determination must be consistent with the
statewide housing need.
The fourth required element is conservation. The general plan must address the con-
servation, development, and utilization of
natural resources, including water, forests,
soils, rivers, harbors, fisheries, and wildlife.18
The fifth required element concerns open
space and aims for the preservation of parcels
of land or water that are essentially unimproved and devoted to an open-space use. The
primary purpose of this element is to “assure
that cities and counties recognize that openspace land is a limited and valuable resource
which must be conserved wherever possible.”19 In addition, it aims to discourage the
“premature and unnecessary conversion of
open-space land to urban uses.” 20 This
includes the preservation of natural resources
such as habitats for fish and wildlife species;
natural resources such as forest lands and
agricultural lands; outdoor recreation including areas of significant scenic, historic, and
cultural value; and open space for public
health and safety, such as areas that require
special management or regulation due to hazardous or special conditions (e.g., earthquake
fault zones).21
The sixth element is noise and the measures and possible solutions for existing and
foreseeable noise problems. To that end, the
noise element recognizes the guidelines established by the Office of Noise Control in the
State Department of Health Services and analyzes the current and projected noise levels for
highways and freeways, major local streets,
ground rapid transit systems, airport operations, industrial plants, and other ground
stationary noise sources that contribute to the
community noise environment. The noise
element should aim to minimize the exposure
of residents to excessive noise.22
The seventh is the safety element, which
details the protection of the community from
unreasonable risks associated with seismic
and geologic hazards. The safety element
includes the mapping of known hazards and
should address evacuation routes, minimum
road widths, and water supply requirements.23
A presumption exists that a city’s general
plan is valid once adopted. Legal adequacy is
the standard used to assess a general plan’s
sufficiency. In order to meet this standard, a
plan must show substantial compliance with
the statutory requirements for general plans
as enumerated in Government Code Section
65302. “Substantial compliance” is interpreted to mean actual compliance with respect
to the “substance essential to every reasonable
objective of the statute,” as distinguished
from “mere technical imperfections of
form.”24
Failure to enact a legally adequate general
plan puts all subsequently proposed land use
actions at risk. For instance, in Resource
Defense Fund v. County of Santa Cruz, the
court held that the absence of a valid general
plan precluded the enactment of zoning ordinances and other land use actions.25 Likewise,
in Friends of “B” Street v. City of Hayward,
the court granted injunctive relief against the
city of Hayward to prevent the development
of a public works project because the general
plan failed to include the noise element, making it incomplete.26 Thus, it is imperative
that each local government create and enact
a general plan that conforms to the relevant
statutes.
Other Factors
In addition to the general plan, the pursuit of
infill housing must be scrutinized in relation
to several other sets of regulations. A specific
plan may exist to cover all or a portion of an
area covered by a general plan. Specific plans
normally cover many of the same subjects as
the general plan but in greater detail. Some
jurisdictions actually use a specific plan as
their zoning for a specific project. In the residential context, specific plans can be advantageous because subdivisions, zone changes,
or other actions undertaken to implement a
specific plan may be exempt from further
environmental review under CEQA.
Under CEQA, California’s public agencies
must identify the significant environmental
effects of their actions and either avoid or
mitigate those effects.27 Governmental discretionary actions on projects that have the
potential for impact on the environment,
such as the enactment of zoning ordinances,
the issuance of conditional use permits, or the
approval of tentative subdivision maps, may
require evaluation under CEQA for the
impact those actions may have on the environment. When the impact is deemed to be
potentially significant, a governmental agency
may be required to prepare an environmental impact report (EIR), which details the
potentially significant environmental effects
that a proposed project is likely to have and
lists ways to minimize the effects or proposes
alternatives. If an EIR has already been prepared under the specific plan, however, the
proposed action may be exempt from further
environmental review under CEQA.
Another plan, called a redevelopment plan
(adopted pursuant to California’s Community
Redevelopment Law), may also exist, and
any development attempted on land located
in a redevelopment plan area must be consistent with the plan.28 A redevelopment plan
must conform to a valid general plan but is
not required to conform with applicable zoning laws. Thus, a redevelopment plan’s use
designations can be different from zoning
laws and can, in effect, restrict development
that is actually permitted under the zoning
regulations.29 As a result, close scrutiny of any
redevelopment plan is required for any infill
housing development.
In addition, the zoning of any proposed
infill project site must be reviewed. Zoning
regulations typically concern the height, bulk,
and use of structures. Zoning may take a
number of different forms, including interim
ordinances, conditional zoning, overlay districts, and planned unit developments. In an
infill situation, one must not only look at
the permitted uses and required structural
and architectural provisions contained in the
basic zoning regulations and other applicable
plans but must also look closely at current or
proposed zoning restrictions that are either
particular to the property or that would overlay or preempt the basic zoning laws.
California governments continue to cautiously adopt legislation intended to encourage new housing, including infill housing.
State law currently requires that the housing
element of a general plan be updated every
two years and that individual cities bear their
fair share of meeting housing needs.30 Other
laws, such as AB 1866, which permits
“granny units” (typically, small, separate
apartments added to the back yards of single
family residences),31 have also been adopted.
Moreover, in September 2002, AB 857
was passed into law with three stated land use
goals: 1) infill development and equitable
development in cities, 2) the protection of
open space, farmland, and habitat outside
cities, and 3) more efficient use of the land
where development is to occur. The bill set
forth state planning priorities that include
the promotion of infill development by requiring state agencies to pursue it. This law also
requires that when state agencies request an
infrastructure development they are to specify how the improvement is consistent with
and supports infill development and redevelopment, cultural and historic resources,
environmental and agricultural resources,
and efficient development patterns. Although
some considered AB 857 to be a tame effort
toward dealing with California’s population
growth problem, many others opposed it.
Opponents argued that the state government
was acting prematurely because many local
jurisdictions had not been given sufficient
time and opportunity to update their land use
plans to reflect an emphasis on infill development.32 Whether AB 857 will accomplish
its stated goals still remains to be seen.
Other legislation has also been enacted to
encourage the development of infill housing.
CEQA may exempt housing projects from
further environmental review when such projects qualify by meeting certain criteria, such
as consistency with an applicable general
plan, specific plan, and local coastal program.33 In a redevelopment situation, if housing was analyzed in the EIR for the redevelopment plan, no further environmental review
would be required unless a subsequent EIR or
Los Angeles Lawyer January 2005 15
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a supplement to an EIR is required under
CEQA.34
Cities and counties are also undertaking
a vast array of planning to promote infill
housing. For example, Los Angeles adopted
Residential/Accessory Services (RAS) zones
to provide a mechanism to increase housing
opportunities, enhance neighborhoods, and
revitalize older commercial corridors.35 Also,
the city adopted an Adaptive Reuse Incentive
Areas Specific Plan for the areas of Chinatown
and Lincoln Heights, the Hollywood Community Redevelopment Project area, certain
portions of the Wilshire Center/Koreatown
Community Redevelopment Project area, and
portions of Central Avenue.36 This specific
plan greatly encourages the reuse of existing
commercial buildings for residential purposes
and provides six incentives: 1) new mezzanines are permitted but not considered new
floor area, 2) increased density is permitted
by not subjecting dwelling units to lot area
requirements, 3) existing automobile parking
is considered adequate, 4) projects are exempt
from certain shopping center regulations, 5)
projects are exempt from site plan review, and
6) loading space requirements are relaxed.
Other cities have adopted similar ordinances. To reach affordable housing goals, a
number of cities have adopted (and more are
considering) inclusionary housing requirements for new housing developments. These
requirements mandate that a certain percentage of units be affordable and rent restricted.
Density bonus provisions may be tied into the
inclusionary requirements, and some statutory
schemes permit the payment of a fee in lieu
of including rent-restricted units.
Infill housing will continue to be part of
the solution for the housing crisis in California. Infill housing can provide needed housing in addition to housing supplied in master
planned communities and single-family home
tract development. Infill housing can help
redevelopment efforts, mend neighborhoods,
and provide individuals with the opportunity to live close to employment centers and
underutilized retail centers. Each county and
city has its own set of problems, needs, and
limitations; therefore, counsel must examine
these areas closely in order to help clients
develop successful infill housing development
plans that will benefit local communities. ■
1 JOHN
D. LANDIS ET AL., RAISING THE ROOF: CALIFORNIA
HOUSING DEVELOPMENT PROJECTIONS AND CONSTRAINTS,
1997-2020 (Cal. Dep’t of Housing and Cmty. Dev.,
2000) [hereinafter LANDIS]. But see Daryl Kelley,
California Cuts Its Population Projection, L.A. TIMES,
Oct. 4, 2004, at A1 (Demographic experts project
California’s population to reach about 51 million by
2040—7 million fewer than they forecast a few years
before.).
2 U.S. C ENSUS B UREAU , C ENSUS 2000, available at
http://www.census.gov/main/www/cen2000.html.
3 LANDIS, supra note 1.
4
Id.
Press Release, California Association of Realtors,
California’s Housing Affordability Index at 18 percent
in July; unchanged from previous month, down nine
points from year ago (Sept. 9, 2004), available at
http://www.car.org/index.php?id=MzQwMTg= (The
median price of a home in California in July 2004
was $463,540, and only 18% of Californians could
afford it.).
6 Press Release, Transportation California, State
Highway System among Worst in U.S. (May 2001),
available at http://www.transportationca.com/archives
/newsletter-05-01-2.shtml (A road conditions report prepared by the Road Information Program shows an
increase in the number of vehicle miles traveled on
California’s roads between 1980 and 2000, nearly
doubling from 155 billion miles to 300 billion miles,
and anticipates that vehicle miles may increase another
70% by 2025.).
7 COLETTE ALPEN ET AL., SMART GROWTH INITIATIVE
(Urban Land Inst., Spring 2002):
[Smart growth is] [d]eveloping compact mixeduse housing, employment centers, and retail
sites with easy pedestrian access to regional
transit stops, preserving farmland, species habitat, and other important open-space by encouraging compact and mixed-use development,
removing fiscal and legal disincentives to the
production of much needed housing, developing recreational facilities on former brownfields, close to downtown and easily accessible
by transit, [and] using school siting and
improvement decisions to reconnect local residents with a valuable community resource,
while also containing sprawl.
8 GOV’T CODE §65302. The general plan and other
plans are generally available at the city planning office
or the office of the city clerk.
9 Id.
10 Lesher Communications, Inc. v. City of Walnut
Creek, 52 Cal. 3d 531, 540 (1990).
11 Id. at 544.
12 GOV’T CODE §65302(a).
13 GOV’T CODE §65302(b).
14 GOV’T CODE §§65583, 65302(c).
15 GOV’T CODE §65580(a).
16 GOV’T CODE §65583(a).
17 GOV’T CODE §§65583(b)-(c).
18 GOV’T CODE §65302(d).
19 GOV’T CODE §65562(a).
20 GOV’T CODE §65561(b).
21 GOV’T CODE §§65302(e), 65560-65568.
22 GOV’T CODE §65302(f).
23 GOV’T CODE §65302(g).
24 Camp v. Board of Supervisors, 123 Cal. App. 3d 334,
348 (1981).
25 Resource Defense Fund v. County of Santa Cruz, 133
Cal. App. 3d 800, 806 (1982).
26 Friends of “B” Street v. City of Hayward, 106 Cal.
App. 3d 988, 999 (1980).
27 PUB. RES. CODE §§21000 et seq.
28 HEALTH & SAFETY CODE §33000.
29 Kehoe v. City of Berkeley, 67 Cal. App. 3d 666, 676
(1977).
30 GOV’T CODE §65584.
31 A.B. 1866, 2002-2003 Assem. (Cal. 2002).
32 Lori Weisberg, State Crafts a Small Rudder to Steer
Future Development, SAN DIEGO UNION-TRIBUNE, Sept.
22, 2002.
33 See CAL. CODE Regs. tit. 14, §§15181, 15182, available at http://ceres.ca.gov/topic/env_law/ceqa
/guidelines/ (visited Oct. 4, 2004).
34 CAL. CODE REGS. tit. 14, §15180.
35 LOS ANGELES CODE §§12.10.5, 12.11.5 (2003).
36 LOS ANGELES, CAL., ORDINANCE 175038 (Dec. 20,
2002).
5
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Practice Tips
BY BRUCE TEPPER
New Water Requirements for Large-Scale Developments
WATER AVAILABILITY lies at the vortex of a number of problems water years.14 If the supplies are inadequate, the lead agency conducting
involving residential land use decisions during the past 10 years. the environmental review must be notified of the inadequacy.15 The
First, there is an acute statewide housing shortage. The number of lead agency is required to include information received as a result of
housing units produced in recent years is half the number of units pro- the assessment in the EIR.16 After reviewing the assessments, the lead
duced in 1986 and 50,000 units fewer per year than the amount of agency makes a determination as to whether or not there is a sufficient
units produced in the 1970s, when California’s population was lower water supply available to meet the anticipated demand of the project.17
than it is today by about 10 million people.1 Second, California SB 901 contains no provisions to ensure that water suppliers provide
housing is less affordable than at any time in the state’s history.2 Third, water assessments and no mechanism for ensuring that the assessments
California is undergoing another period of extended drought, with are prepared or considered in the event that the water suppliers fail
water availability in flux.3 Fourth, the increasing diversion of surface to provide them by the statutory deadlines.18
water for new residential subdivisions means
less secure water supplies for already developed
areas, less instream water for fish and wildlife,
The Kuehl and Costa legislation, along with a series of cases brought
and less water available for farmers.4 Finally,
surface water diversions also have been affected
by the 1992 Central Valley Project Improveunder CEQA, have raised the visibility of the water supply issue.
ment Act5 and the 1998 CALFED Bay-Delta
6
Program.
Historically, concerns about water availability in California were addressed after, rather than before, new housAlong with the legislature, California courts recognized a problem
ing construction. The reasoning behind this phenomenon was sim- of growing magnitude and have used the existing framework of the
ple: Once the housing was built, the water needed to service the new California Environmental Quality Act (CEQA)19 to apply increasing
houses would be located and made available because of the insistence scrutiny to development and water supply issues. For example, in
of the public—primarily, the new homeowners and the municipal gov- Stanislaus Heritage Project v. County of Stanislaus,20 the appellate court
ernments.7 Local governments usually were able to obtain necessary rejected the environmental review of a proposed 5,000-unit residenwater from local and state agencies controlling water supply.8 tial development because the water supply analysis addressed only the
Sometimes, however, the solutions involved relying on State Water first 5 years of a 25-year phased project.21 The county had deferred
Contractor “entitlements” to State Water Project (SWP) water—so- the environmental analysis of years 6 through 25, promising to undercalled paper water.9 This led to courts and the legislature expressing take the review when those phases of the project were implemented.
their frustration with determinations of water availability after hous- The court of appeal determined this approach inadequate, stating that
ing construction was completed and with the attendant reliance on “to defer any analysis whatsoever of the impacts of supplying water
to this project until after adoption of the specific plan calling for the
water that was not “real” or “wet.”
On October 9, 2001, two bills were enacted that represent the leg- project to be built appeared to be putting the cart before the horse.”22
islature’s latest attempt to ensure that water needs are analyzed
Similarly, in County of Amador v. El Dorado County Water
before large-scale developments are constructed. The bills, SB 221 and Agency,23 the court of appeal invalidated an EIR that proposed the
SB 610, are known as the Kuehl and Costa legislation—SB 221 was diversion of water from several Sierra lakes and the South Fork of the
introduced by State Senator Sheila Kuehl, and SB 610 was introduced American River to provide water to meet the needs of the projected
by State Senator Jim Costa. The bills were designed to correct defi- population increases that were set forth in a draft general plan. The
ciencies in SB 901, a 1995 enactment that created a scheme for appellate court found that by “proceeding without the benefit of a
addressing the water requirements of proposed major developments. general plan in place, and developing [a] project predicated on needs
SB 901, which is codified at Part 2.10 of the Water Code,10 described in an unadopted general plan, the CEQA process [had
requires any city or county preparing an environmental impact report been] stood on its head.”24
(EIR) for a qualifying project to request each potential water supplier
Moreover, in Napa Citizens for Honest Government v. Napa
for a water supply assessment. The assessment is based on the sup- County,25 the court of appeal invalidated a supplemental EIR prepared
plier’s most recent urban water management plan11 and thus indicates in connection with the Specific Plan in unincorporated Napa County
whether the supplier could meet the water supply needs of the project.12 SB 901, however, applies only to certain types of projects that Bruce Tepper is a Century City lawyer who specializes in land use, environexceed a defined size.13 The water supply assessment must indicate mental, and water litigation and appeals. He represents public sector water
whether there will be sufficient water to meet the project’s needs over clients in Los Angeles County and the Central Valley. He is a member of the
a projected 20-year period that includes single-dry and multiple-dry Los Angeles Lawyer Editorial Board.
because 1) the water supply analysis had not
adequately assessed the need for secondary
water sources for the project, and 2) the mitigation analysis concerning secondary water
sources also was inadequate.26 The court
held that “[b]ecause of the uncertainty surrounding the anticipated sources for water
and waste-water treatment, however, the FS
[Final Supplemental] EIR also cannot simply
label the possibility that [the water sources]
would not materialize as ‘speculative,’ and
decline to address it.”27
In Save Our Peninsula Committee v. Monterey County,28 the court of appeal set aside
an EIR addressing a general plan amendment converting open space to housing. The
court found that the county’s EIR—which
had assumed that a significant amount of
groundwater was being used to irrigate the
land and that the change to residential use
would not result in a significant increase in
groundwater pumping—set forth baseline
conditions that were “clearly faulty” because
they must accurately represent the environmental conditions existing on the property
prior to the project. While the court stated
that there is no “rigid rule” regarding the
date on which the baseline must be established, an appropriate baseline must be determined as the first step in the environmental
review process.29
Planning and Conservation League v. Department of Water Resources directly confronted the issue of paper water in a nondevelopment setting.30 The court of appeal
validated an EIR prepared for the Monterey
Agreement—negotiated between the State
Water Contractors (an agency that, in effect,
serves as water wholesalers) and the Department of Water Resources (DWR). “Paper
water” refers to water entitlements that are
quantified in water agreements even though
it is uncertain whether the water resources are
or will be available in fact. The Monterey
Agreement was a result of the determination
by the State Water Contractors and the DWR
that a SWP did not in any one year possess
enough water to meet the entitlements that
had been promised by the State Water
Contractors. The Monterey Agreement
removed a system of prioritization between
urban water users and agricultural water
users that had been in effect for a number of
years. It also called for the creation of a subsurface water storage bank in Kern County.
The court of appeal invalidated the Monterey
Agreement EIR because it failed to address
adequately the “no project” alternative, which
would have left in place the proportional
reduction rule and thereby reduce the ability
of the DWR to provide additional water.
Paper water was always an illusion:
“Entitlements” is a misnomer, for contractors surely cannot be entitled to
water nature refuses to provide or the
body politic refuses to harvest, store,
and deliver. Paper water represents the
unfulfilled dreams of those who,
steeped in the water culture of the
1960s, created the expectation that
4.23 MAF [million acre-feet] of water
could be delivered by a SWP built to
capacity.
[W]here land use planning determinations can be made on the basis of
entitlement rather than real water, development can outpace the availability
of water, leading to detrimental environmental consequences, excessive
groundwater pumping, and pressure to
develop additional water supplies.31
Planning and Conservation League suggests that a decision on the availability of
real water based on a determination of entitlements cannot be reached in a manner sufficient to meet the requirements of CEQA.
The Kuehl and Costa Legislation
Against the backdrop of CEQA litigation
addressing water supply for development
purposes, the legislature enacted SB 221 and
SB 610 in 2001. SB 221 and SB 610 were not
only crafted to modify SB 901 but are
intended to ensure that local land use authorities will thoroughly consider the availability
of water supplies before approving major
new developments. While SB 610 applies to
a wide range of residential, commercial, and
industrial projects, SB 221 applies only to residential housing projects.
SB 221 has its roots in AB 1219, which
was introduced by Kuehl in 1999 when she
was a member of the State Assembly. AB
1219 would have required SB 901’s water
supply assessment process to be linked to
land use planning. The aim was to enhance
coordination between water suppliers and
land use agencies as development projects
proceeded from the planning stage to the
construction stage.32 The proposed legislation
attracted a number of opponents, including
the California Chamber of Commerce, the
California Association of Realtors, and the
California Building Industry Association.
These groups argued that AB 1219 would
remove local land use decision-making
authority from cities and counties and shift
it to local water suppliers. Amendments to the
bill attracted further opposition from the
League of California Cities and the American
Planning Association.33 When Kuehl was
elected to the State Senate in 2000, AB 1219
morphed into SB 221. Only when the Association of California Water Agencies (ACWA)
proposed significant modifications to SB 221
in the spring of 2001 did opposition to the bill
begin to recede.34
SB 221, applicable to proposed residential
subdivisions of more than 500 residential
units, 35 requires that cities and counties
demonstrate an adequate water supply before
they approve a tentative map for the residential development.36 Adequacy of the water
supply may be established by obtaining written verification from a public water supplier
confirming the total water supplies available
within a 20-year period sufficient to meet
the projected demand associated with the
proposed subdivision.37
If the public water supplier is unable to
provide written verification of adequate water
supply,38 a city or county may approve a tentative map only if there is substantial evidence to support a finding that the necessary water supply will be available prior to
completion of the subdivision.39 Under SB
221, cities, counties, and other interested
parties are expressly authorized to institute
proceedings for a writ of mandate against a
water supplier for failing to respond to a
request for a Written Letter Verification. The
determination of a sufficient water supply
based on a water supply assessment or a
written verification presents opportunities
for litigation by project proponents and opponents. The actions of cities and counties may
also be subject to legal challenge when they
approve or disapprove a development based
on information provided by the wholesale
water supplier to the development—and the
cities and counties, as local water suppliers,
are required to prepare their own water supply assessment and written verifications.
The requirements of SB 221, however, do
not apply to residential housing proposed
for a site that is within or immediately contiguous to an urbanized area—referred to as
infill housing40—or to housing projects that
are exclusively for low-income households.41
“Urbanized” and “urban use” are terms that
are not defined in SB 221.
SB 610 was introduced on February 22,
2001, one week following the introduction of
SB 221. SB 610 focused on improving the SB
901 process by strengthening urban water
management plans and the nexus between
water supply assessment and the plans (or the
equivalent level of analysis if there is no
plan).42 In contrast to SB 221, SB 610 moved
through both houses of the legislature without much opposition.43
Like SB 221, SB 610 applies to residential
developments with more than 500 units.44 SB
610, however, also applies to 1) shopping
centers or business establishments employing
more than 1,000 persons or containing more
than 500,000 square feet of floor area, 2)
commercial buildings employing more than
1,000 persons or containing more than
250,000 square feet of floor area, 3) hotels or
motels containing more than 500 rooms, and
4) industrial and manufacturing plants occu-
pying more than 40 acres or containing more
than 650,000 square feet of floor area.45
Among other things, SB 610 requires that,
before approving any projects within these
categories, cities and counties must request a
water supply assessment from the water supplier most likely to serve the project, and the
water assessment must be included in any
environmental documents.46 If the city or
county is unable to identify a potential water
supplier, it must prepare the required water
supply assessment in consultation with the
local agency formation commission and any
water supplier with a service area that overlaps or is adjacent to the project site.47 The
water supply assessment—like the one
required under SB 221—must evaluate
whether the total water supplies during a
20-year period will meet the projected water
demand of the proposed project.48
Synthesizing SB 221 and SB 610
Although SB 221 and SB 610 were intended
to correct perceived deficiencies in SB 901 and
respond to recent CEQA litigation concerning water supply, SB 221 is simply a narrowly focused version of the broader SB 610
and establishes an additional layer of environmental review for housing projects.49
The two pieces of legislation are almost
identical. SB 221 requires a “public water
assistant” to provide a “written verification”
that it has adequate supplies to serve the
project. SB 610 requires a “public water system” to provide a “water supply assessment”
evaluating whether its total projected water
supplies will meet project demand.50 SB 221
and SB 610 require the water supply assessment to cover a projected 20-year demand for
water that includes normal, single-dry, and
multiple-dry water years. They also require
the public water system to base its determination of the adequacy of its supplies on substantial evidence.51 SB 221 and SB 610 allow
the public water system to rely on information in its most recent urban water management plan, if the plan has taken the project
demand into account.52 SB 221 and SB 610
require cities and counties to request the
water supplier to provide the information
within 90 days of the request.53 Finally, SB
221 and SB 610 permit the city or county to
make a finding that adequate water supplies
exist to meet the project’s anticipated demand,
even if that finding is inconsistent with the
conclusions in the public water system’s
assessment.54
Although SB 221 and SB 610 are substantially similar, neither provides an exemption for projects that have complied with the
other. The problem is exacerbated by the fact
that SB 221 and SB 610 vary just enough to
preclude interchangeable use, notwithstanding the fact that they were intended to serve
precisely the same purpose.55 For example, if
groundwater is needed to serve the project, the
SB 221 assessment must include an evaluation
of the ability to extract the needed groundwater.56 SB 610 has a similar requirement
but also requires additional data about the
needed groundwater, including: 1) a review of
any information in the supplier’s current
urban water management plan that is relevant
to the water supply, 2) a description of the
groundwater basin that the project proposes
to use, 3) a copy of any court order or decree
adjudicating the right to pump water from the
basin, 4) information as to whether the DWR
has determined that a basin with an adjudicated order or decree is or will be overdrafted
under current management conditions, 5) a
detailed description of efforts to eliminate the
overdraft condition, 6) a detailed description
and analysis of the amount and location of the
groundwater the supplier has pumped from
the basin in the past five years, and 7) an
analysis of whether the groundwater to be
pumped from the basin will meet the project
demand.57 Accordingly, if a home builder
relying on groundwater to serve its project has
secured an SB 221 verification, the builder
must supplement the information in that verification to meet the requirements of SB 610.
Moreover, SB 221 requires water supply information that is not required under SB 610.58
Under SB 221, a water supplier must consider: 1) the historical availability of water
supplies over a 20-year period, 2) the applicability of an urban water footage contingency analysis that includes actions to be
taken by the water supplier in response to
water supply shortages, 3) the reduction in
water supply allocated to a specific water
use sector in accordance with a resolution,
ordinance, or contract, and 4) whether the
supplier can reasonably rely on receiving
water from other water supply projects. The
impact of SB 221 is solely on new housing,
with housing developers enduring costly and
duplicative environmental reviews and analyses without any corresponding benefits.59
Given the risks inherent in this new legislative scheme, SB 221 appears to be a font
of litigation opportunities, with anticipated
challenges on water supply assessments, the
low-income housing and urban infill exceptions, and the prospect of developers creating
projects in a piecemeal fashion. Similarly, SB
610 could generate litigation over attempts to
construct larger projects piecemeal in order
to avoid requirements mandating minimum
units, square footage, and employees, or
acreage thresholds and the adequacy of water
supply assessments.60
Infill development involves the demolition or adaptive reuse of land previously converted from open space to residential, commercial, or industrial uses as well as new
construction in place of these previous uses.
This type of development is becoming increasingly popular. Most infill development will not
be subject to SB 221 and SB 610. This is
because the development usually will not
meet the statutory thresholds of the legislation. Urban sprawl development is new residential and commercial development on land
previously used as open space—such as agricultural land, recreational land, or wild land.
In contrast to infill development, urban sprawl
development usually breaches the statutory
thresholds and therefore must comply with SB
221 and SB 610. One intended benefit of SB
221 and SB 610 will be to encourage infill
development in place of sprawl.
In the three years since the enactment of
SB 221 and SB 610, there have been no
reported decisions discussing the adequacy of
a water supply assessment in the context of
either of the new legislative schemes. 61
However, in 2003, the court of appeal in
Santa Clarita Organization for Planning the
Environment (SCOPE) v. City of Los
Angeles62—while not directly addressing SB
221 or SB 610—analyzed the adequacy of
water supplies within the traditional EIR
context.
In SCOPE, Los Angeles County’s EIR
was found to be inadequate because its cumulative impact analysis relied on additional
SWP entitlements—that is, paper water.63
Measuring environmental adequacy from the
date of the court’s decision (as opposed to the
date of the EIR certification), the court criticized the EIR’s lack of justification for its projection of 100 percent delivery of SWP entitlements because the SWP system has not yet
been completed.64 The court confirmed that
the EIR inadequacy could not be cured by a
pledge to secure adequate water supplies
before the track map was recorded.65 At least
in the Second Appellate District, the bootstrap
approach to developing a water supply is no
longer available.66
In a state where urban sprawl has been
perfected as an art form, SB 221 and SB 610
provide unintended incentives to housing
developers to undertake infill development as
a way to avoid the reach of the legislation.
Whether or not the laws will have a chilling
effect on large-scale housing construction or
result in price increases caused by the additional documentation and exposure to litigation is an open question at the moment.
What is clear is that in California, where
there are unlimited water demands, water is
a limited resource. It is subject to the uncertainties of climate and other conditions far
beyond human control. The Kuehl and Costa
legislation, along with the water supply cases
brought under CEQA, have raised the visibility of the water supply issue to a paramount concern. What must ultimately be
Legislative Intent.
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determined is whether legislation designed
to produce reports truly addresses the issue
of water supply availability or merely raises
the cost per housing unit in a state in which
housing is already too expensive and too
scarce.
■
1 Among the states, California has the second-lowest
(after New York) rate of home ownership: 58 percent. Among cities, Los Angeles has the second-lowest
(after New York City) rate of home ownership: 39 percent. See J. Kotkin, Locked Out of a House, L.A.
TIMES, Sept. 22, 2002.
2 California Housing Affordability Declines in August,
L.A. DAILY NEWS, Oct. 15, 2004.
3 J.H. Minan, Whose Water Is It?, 12 ENVTL. NEWS 21
(2003).
4 B.H. Epstein & P.S. Kibel, Sprawl and Paper Water:
A Reality Check from California Courts, 12 ENVTL. L.
NEWS 3 (2003).
5 Pub. L. 102-575, 106 Stat. 4600 (1992). The 1992
Central Valley Project Improvement Act is an attempt
by the U.S. Congress to restore and protect fish and
wildlife habitat in the California Central Valley and
Trinity River basins. The legislation regulates the flow
release from the Trinity Dam with a goal of maintaining a river environment that would support salmon
and steelhead and encourage natural fish production.
See Westlands Water Dist. v. United States Dep’t of the
Interior, 376 F. 2d 853, 864 (9th Cir. 2004).
6 See P. Wright, Fixing the Delta: The CALFED BayDelta Program and Water Policy under the Davis
Administration, 31 GOLDEN GATE U. L. REV. 331, 341
(2001).
7 See Epstein & Kibel, supra note 4.
8 See MCCORMICK ET AL., WATER SUPPLY AND LAND USE
APPROVALS, Forward at i-iii (Association of California
Water Agencies (ACWA) 2002).
9 See Planning & Conservation League v. California
Dep’t of Water Res., 83 Cal. App. 4th 892, 914 (2000).
10 SB 901 arose out of litigation between the East Bay
Municipal Utility District (EBMUD) and Contra Costa
County concerning whether or not a farmer had a sufficient water supply to satisfy the demands of a proposed 11,000-home development in the Dougherty
Valley of Contra Costa County. See MCCORMICK ET AL.,
supra note 8, at 2. SB 901 was a product of negotiation among three representative groups: 1) EBMUD and
ACWA, which supported the bill, 2) the California
Building Industry Association, and 3) local government associations (including the League of California
Cities). The latter two had initially opposed the bill.
11 The Urban Water Management Planning Act—
WATER CODE §§10610-10657—requires every “urban
water supplier” to prepare and adopt an “urban water
management plan,” with certain specified requirements. WATER CODE §10610. An urban water management plan is required to project in five-year increments for 20 years or the life of the plan. See Friends
of the Santa Clara River v. Castaic Lake Water Agency,
123 Cal. App. 4th 1, 12 (2004).
12 WATER CODE §§10910-10915.
13 WATER CODE §10913 (residential developments of
more than 500 units; shopping centers or business
establishments employing more than 1,000 persons
or containing more than 500,000 square feet of floor
areas; office buildings employing more than 1,000
persons or containing more than 250,000 square feet
of floor area; hotels or motels containing more than 500
rooms; industrial, manufacturing, or processing plants
or industrial parks housing more than 1,000 persons
occupying more than 40 acres or containing more
than 650,000 square feet of floor area; or mixed-use
projects that demand as much or more water than a
500-unit residential project).
14 Id.
15 WATER CODE §10911(a). If the supplier fails to provide the assessment within 30 days, the lead agency is
required to assume that the supplier has no information to submit. WATER CODE §§10910(g)(2), (3).
16 WATER CODE §10911(b).
17 Id.
18 See generally R.C. Morrison & D.D. Doporto,
Opening a Pandora’s Box?, 12 ENVTL. L. NEWS 15, 16
(2003).
20 Stanislaus Heritage Project v. County of Stanislaus,
48 Cal. App. 4th 182 (1996).
21 Id. at 200.
22 Id.
23 County of Amador v. El Dorado County Water
Agency, 76 Cal. App. 4th 931 (1999).
24 Id. at 951. See also Epstein & Kibel, supra note 4,
at 6.
25 Napa Citizens for Honest Gov’t v. Napa County, 91
Cal. App. 4th 342 (2001).
26 Id. at 370-71.
27 Id. at 370.
28 Save Our Peninsula Comm. v. Monterey County, 87
Cal. App. 4th 99 (2000).
29 Id. at 125-26. See Epstein & Kibel, supra note 4, at
4. See also M.A. Staples & K.M. Casey, Recent Court
Decisions and Publications Provide Guidelines in
Piecing Together Water Supply Analyses for
Development Projects, 15 CALIFORNIA WATER L. &
POLICY REP. 4 (2004).
30 Planning & Conservation League v. Department of
Water Res., 83 Cal. App. 4th 892 (2000).
31 Id. at 914. See also id. at 914 n.7.
32 MCCORMICK ET AL., supra note 8, at 4.
33
Id. at 4-5.
Id. at 5-15.
35 The 500-unit threshold has prompted commentators
to suggest that efforts by developers to evade SB 221
requirements will result in large multi-phase residential projects being “piecemealed” into separate projects
of 499 units or less. These actions, which are proscribed under CEQA, would generate litigation. See,
e.g., Epstein & Kibel, supra note 4, at 9. See also
MCCORMICK ET AL., supra note 8, at 2.
36 GOV’T CODE §§66473.7(a)(1), 66473.7(b)(1).
37 GOV’T CODE §§66473.7(a)(2), 66473.7(b)(1).
38 See MCCORMICK ET AL., supra note 8, at 2.
39 GOV’T CODE §66473.7(b)(3).
40 The issue of what constitutes an urban area has
been hotly contested since the concept of urbanization
was introduced in 1984. See HEALTH & SAFETY CODE
§33320.1; Emmington v. Solano County Redev.
Agency, 195 Cal. App. 3d 491, 499 (1987); Friends of
Mammoth v. Town of Mammoth Lakes Redev.
Agency, 82 Cal. App. 4th 511, 541 (2000).
41 GOV’T CODE §66473.7(i).
42 Id. See MCCORMICK ET AL., supra note 8, at 22.
43 Id.
44 Id.
45 WATER CODE §10912(a).
48 WATER CODE §10910(A)(4).
49 GOV’T CODE §66473.7(b)(8).
51 See GOV’T CODE §66473.7(a)(2) (SB 221); WATER
CODE §10910(c)(n1-3) (SB 610).
52 See GOV’T CODE §66473.7(a)(1-3) (SB 221); WATER
CODE §10910(c)(n1-3) (SB 610).
53 GOV’T CODE §§66473.7(b)(i), (3) (SB 221); WATER
34
CODE §10910(g)(1) (SB 610).
54 GOV’T CODE §66473.7(b)(3) (SB 221); WATER CODE
§10910(b)(8) (SB 610).
55 SB 221 and SB 610 were enacted to ensure that sufficient water is available to serve new housing projects.
SB 610 also applies to other types of new development
projects.
56 GOV’T CODE §66473.7(h).
57 WATER CODE §10910(4)(f).
58 GOV’T CODE §66473.7(a)(2)(A)-(D).
59 See Morrison & Doporto, supra note 18.
60 See Epstein & Kibel, supra note 4, at 1-9; Morrison
& Doporto, supra note 18, at 17-18.
61 See DEPARTMENT OF WATER RESOURCES, GUIDEBOOK
FOR IMPLEMENTATION OF SENATE BILL 610 AND SENATE
BILL 221 (Oct. 2003). It is doubtful that this DWR publication has provided guidance sufficient to eliminate
any challenges.
62 Santa Clarita Org. for Planning the Environment
(SCOPE) v. City of Los Angeles, 106 Cal. App. 4th 715
(2003).
63 See Planning & Conservation v. Department of
Water Res., 83 Cal. App. 4th 892, 914 n.7 (2000).
64 SCOPE, 106 Cal. App. 4th at 721-22.
65 Id. at 722-23.
66 A somewhat confounding result was recently reached
by the Fifth District Court of Appeal in Friends of the
Santa Clara River v. Castaic Lake Water Agency, 123
Cal. App. 4th 1 (2004). In that case, an urban water
management plan was invalidated four years after its
adoption for deficiencies that did not exist and were not
known at the time the plan was adopted. Like the
floating timeline of adequacy in SCOPE, the decision
in Friends lends greater uncertainty to the reports generated in compliance with SB 221, SB 610, and the
Urban Water Management Planning Act.
REAL ESTATE LAW
By Philip J. Hess
A LINE IN
THE SAND
Oceanfront landowners and the
California Coastal Commission have
been battling over easements
allowing public access to beaches
KEN CORRAL
T
he fortunate few who can afford a
spacious beachfront home expect
exclusive ocean views and beach
access. In recent years many of them
have been unpleasantly reminded that they,
or their predecessors, granted rights to the
public to share their sand or to walk across
their property on the way to the beach. As
public agencies seek to enforce these rights,
homeowners have committed impressive
resources to litigation seeking to nullify past
promises.
In Santa Barbara, Wendy McCaw, a billionaire environmentalist and owner of the
Santa Barbara News-Press, challenged the
validity of an access promise made 18 years
earlier by a prior owner. McCaw pursued
the case over four years all the way to the U.S.
Supreme Court,1 ultimately losing on the
merits and settling a companion enforcement
action brought by the Coastal Commission
for $460,000 in civil penalties.2 In a similar
battle, which is still in the pleading stage
after more than two years, media mogul
David Geffen is resisting the opening of a
walkway through his land to the beach—an
access promise that he made to the commission in 1983 in return for permits to improve
his Malibu estate.3
In Humboldt County a homeowner fought
the town of Trinidad for 11 years to shut
down the use of a public trail down his driveway that allowed beachgoers to pass so close
to his deck he could touch them. Crippled by
legal fees consuming a fourth of its annual
budget, the town agreed to settle by closing
the trail and conveying the right of way to the
Philip J. Hess is a sole practitioner in Los Angeles
concentrating on land use matters.
homeowner. The settlement could not be
implemented, however, because the Coastal
Commission intervened in the case and
obtained a court order reopening the trail to
enforce an easement for public use. The town
was forced to continue the litigation and to
consider bankruptcy, a county takeover, or a
tax increase to pay the bills.4
Public agencies and private parties bring
considerable perseverance and assets to public access disputes. The decisions that result
will continue to test, and possibly reshape, the
limits of regulatory and constitutional land
use doctrines.
The California Legislature provoked this
clash of public and private interests through
its 1976 declaration that the purpose of the
Coastal Act was to “maximize public access
to and along the coast.”5 This statement was
presumably intended to expand the access
to the land between the low and high tide lines
along the coast that the public has enjoyed
since California was admitted to statehood.6
The legislature implemented its declaration
through a mandate that every form of development on the coast obtain a permit from the
Coastal Commission.7 From its inception the
commission used this regulatory authority
to withhold permits for oceanfront development unless the applicant provided the public either with “lateral” access to the beach in
front of the property from elsewhere on the
shore or “vertical” access from inland to the
beach by crossing the property on a right of
way that is perpendicular to the ocean.8
The exaction of access rights in return
for permits was curtailed by a 1987 U.S.
Supreme Court decision, Nollan v. California
Coastal Commission, which found that these
deals amounted to inverse condemnation and
required compensation to the owner unless
the permit condition would restore the same
kind of access the development would
impede.9 Although the volume of access commitments diminished after Nollan, the commission has continued to seek them, and by
2002 had secured more than 1,300 lateral and
vertical access opportunities.10
The efforts by McCaw, Geffen, and others to avoid these commitments have arisen
because of the legal mechanism used to create them. The Coastal Commission lacks
statutory authority to hold title to property.11
Permit applicants instead encumber their
property with a recorded offer to dedicate
(OTD) an access or beach right of way to an
unspecified government agency or not-forprofit organization. Although these OTDs
cannot be revoked or amended by the permittee without incurring enforcement action
by the commission,12 the public will not be
able to use the access unless and until two
conditions are fulfilled. First, a public entity
must accept the OTD, and the entity volun26 Los Angeles Lawyer January 2005
teering for this task must be willing to assume
responsibility for opening and managing the
access on terms acceptable to the Coastal
Commission.13 Second, OTD acceptance usually must occur within 21 years of recordation.14 Timely acceptance converts the OTD
to a permanent easement burdening the property. If not accepted, however, the offer expires
and the contingent obligation to provide public access is extinguished.15
The Coastal Commission proved to be
better at exacting OTDs than managing them.
A 1995 study by the Los Angeles Times found
that out of 1,269 access offers, only one in five
had been accepted, and many were close to
expiration.16 Agencies and organizations eligible to accept OTDs were unwilling to do so
because of concerns regarding the cost of
opening and maintaining an access way and
the potentially significant risk of liability for
personal injury or property damage claims
arising from public use.17
The Coastal Commission launched an
action plan to improve the situation, which
revealed that the agency had few records of
how many OTDs had been recorded, who
owned the underlying property, or where
on the property an access way would be
located.18 After committing additional resources to address these problems, the commission reported in 2000 that one in three
OTDs had been secured.19 The State Coastal
Conservancy, an agency established to acquire
land and improve public access to the coast,20
was enlisted to accept every access offer that
would otherwise expire.21 By 2002 the commission had obtained commitments for 1,363
OTDs, of which 15 have expired and approximately 750 have been accepted, with the
balance protected against expiration by legislation enacted that year to require the
Coastal Conservancy to act as the grantee of
last resort.22
By assuring acceptance of the outstanding
OTDs, the Coastal Commission satisfied
coastal access advocates that OTDs would not
be lost to expiration. At the same time, the
commission provoked outrage among homeowners confronting the prospect of the public walking on their beach frontage or across
their yards. In recent years, for example,
homeowners in Broad Beach, an unincorporated community in Malibu, posted “No
Access” signs along their beachfront and
hired private security guards to confront and
repel outsiders seeking to traverse the area.23
The commission recently ordered the homeowners to remove the signs and the guards
because they were effectively precluding public use of beach areas covered by OTDs.24 The
homeowners, in turn, have commenced litigation seeking to nullify the OTDs and easements because they are invalid under Nollan
or were improperly obtained through extor-
tion and duress.25 The Geffen, McCaw, and
Broad Beach cases demonstrate that the passage of time does not fully and finally extinguish the potential for challenges to past
promises by permit applicants.
Challenging OTDs
Unhappy homeowners have discovered that
a direct attack on the validity of an OTD that
has been on title for a substantial period of
time is no longer viable no matter how strong
the merits of the claim might be. Even if the
Coastal Commission improperly exacted an
OTD unrelated to any loss of access the permit applicant would cause, its decision is
immune from judicial review unless a challenge was brought within the 60-day period
prescribed by statute.26
Counsel for aggrieved homeowners may
avoid this problem by targeting more recent
agency decisions other than the original permit approval. These decisions include acceptance of the OTD, “opening the OTD”—
that is, opening the access way provided by
the OTD—to public use, and the disposition
of an application to amend the permit condition requiring the OTD.
Once an OTD has been recorded, it must
be accepted by a government agency or a
not-for-profit organization willing to open
and maintain the access way. The suitability
of the accepting entity must be approved by
the Coastal Commission. A homeowner may
challenge 1) the decision by the commission
to approve the accepting entity, and 2) the
acceptance itself, if the accepting entity is a
government agency. These challenges by
homeowners are launched by a petition for a
writ of mandamus.
In a mandamus proceeding the petitioner
applies to the court for an order to compel a
public agency to perform a mandatory duty
or reverse an action that constitutes an abuse
of discretion.27 In an OTD challenge, the
grounds for mandamus could include a decision by the Coastal Commission to permit
acceptance by an entity after the deadline
for acceptance has passed; a commission
decision to approve acceptance by an entity
that is not eligible under the terms of the
OTD; a commission decision to approve
acceptance by an eligible entity that, according to the affected homeowner, lacks the
resources, experience, or expertise necessary
to manage and maintain the access way once
it has been opened to public use; or a decision
by the commission or the accepting entity to
implement a management plan for the access
way that conflicts with the hours of operation,
means of access, or other conditions incorporated into the coastal development permit
and the recorded OTD.
A homeowner faces several obstacles in a
mandamus proceeding. The petitioner bears
the burden of proof28 and is required to
exhaust administrative remedies—either by
participating in the proceedings, if any, leading to the challenged decision, or by first
bringing the objections that will be asserted
in the mandamus action to the attention of the
agency before it acts.29 The determinations by
the agency are accorded a “strong presumption of correctness” by California courts,30
which resolve reasonable doubts in favor of
the administrative decision31 and uphold it
unless a reasonable person could not reach the
same conclusion.32 While there is no fixed limitations period for a traditional mandamus
proceeding, most courts are unreceptive if
the petitioner defers the challenge more than
60 days past the agency action.33 A jury trial
is not available by right in a mandamus proceeding,34 although the court has discretion
to impanel a jury to determine essential issues
of fact.35
should accordingly seek to apply CEQA by
asserting that the Coastal Commission has
sufficient discretion to modify the terms under
which an entity will be approved for acceptance of an OTD, and the accepting entity has
similar discretion to determine essential conditions for management of the access way,
including hours of operation, methods of
access, and security measures to protect adjacent property.
impact.45 The agency is only required to
demonstrate substantial evidence that its decision regarding a project falls within the categorical exemptions. The burden then shifts
to the party challenging the exemption to
produce substantial evidence showing a reasonable possibility that adverse environmental
impacts would result from the project.46
Assuming that there is no statutory or
categorical exemption available, and that the
Assuming that either the acceptance or
the opening of the OTD is found to be discretionary, the homeowner must then show
that these decisions meet the “physical change
of environment” requirement for projects
subject to CEQA. Public use of the access,
especially in a popular beach area, will generate traffic, litter, land deformation, or other
adverse physical impacts on and adjacent to
the OTD site. In addition, opening an OTD
may cause adverse aesthetic impacts. These
are all potential physical changes that may
bring the acceptance and opening decisions
within the ambit of CEQA.
The officials making these decisions may
claim that their actions are exempt under
CEQA and therefore not subject to the environmental review requirements of the act.
Many types of projects have been granted
exemptions directly by the legislature.43 In
addition, certain types of agency decisions,
known as categorical exemptions, have been
declared to be exempt from CEQA’s requirements by the secretary of the California
Resources Agency under delegated legislative authority.44 A determination by an agency
that a categorical exemption applies necessarily includes an implied finding that the
project has no significant environmental
homeowner prevails on the issues of discretionary action and physical change, an agency
accepting or opening an OTD would have to
comply with CEQA. If the agency made its
OTD decisions without the required review,
the court will set aside those actions and the
OTD implementation process would have to
be restarted.
Under CEQA, the agency making the
acceptance or opening decision is required, at
a minimum, to conduct an initial study to
determine whether any potential adverse
impacts may result.47 Any such impacts that
are disclosed must be mitigated through specific curative actions to be taken in conjunction with the access opening or studied further through a comprehensive environmental
impact report (EIR) that is subject to public
review and comment.48 The homeowner may
then initiate further litigation to challenge
the form and the adequacy of the initial study,
the mitigation measures, and any EIR adopted
by the agency.49
Forcing the agency into the CEQA process
would be a victory, albeit only a temporary
one, for the grantor of a burdensome OTD.
CEQA is a disclosure statute that does not
mandate a particular decision by the agency.
At some point the disclosure obligation will
Invoking CEQA
The California Environmental Quality Act
(CEQA)36 offers homeowners another means
of disclaiming previously assumed access
obligations, even though the statute of limitations for a challenge under CEQA ranges
from 30 to 35 days (if the agency gives formal notice of the action) to 180 days (if the
action is taken without notice).37 Assuming the
homeowner failed to attack the original
Coastal Commission approval imposing the
OTD obligation under CEQA, the subsequent
decisions to accept or open the OTD may
still be challenged for failure to conform to the
required environmental review process.
Before commencing suit, the petitioner
must first exhaust administrative remedies
by presenting the agency with all available evidence and legal arguments supporting the
claim of noncompliance.38 In addition, since
an action under CEQA must be brought in the
form of a petition for mandamus,39 the other
procedural hurdles in a mandamus action—
including burden of proof, deference to the
agency, and the lack of a jury trial—all apply
with equal force to CEQA challenges.
The challenged action also must be shown
to be subject to CEQA, which applies to discretionary projects that are “carried out, supported by, or authorized by a public agency”
and may result in “a direct” or “a reasonably
foreseeable indirect physical change in the
environment.”40 Although the Ninth Circuit
has refused to characterize the acceptance of
an OTD as a discretionary action,41 California state courts have adopted a more
expansive reading of “discretionary” to
include every situation in which an agency has
the power to modify as well as deny a proposal on the basis of environmental consequences that a CEQA review might disclose.42
Counsel for an aggrieved homeowner
be satisfied, and the agency will then be free
to implement its decision.50
A different provision of CEQA may offer
an opportunity for a homeowner to bring
an OTD back before the courts for a new
assessment of its potential environmental
impact. The statute requires that a subsequent or supplemental EIR be prepared if
the “circumstances under which the project
is being undertaken” have changed to an
extent that would require “major revisions”
to the previous environmental review.51 Since
the acceptance and opening of OTDs has in
most cases been deferred for decades, it would
not be surprising if the physical environment
of the area surrounding the OTD had changed
in several respects, including the level of traffic, the character of the neighborhood, and the
development of other uses that might conflict
with the volume of public use projected for
the promised access.
In response the Coastal Commission can
argue that the introductory clause of the
statute requiring subsequent or supplemental
EIRs applies only when an EIR was prepared
during the initial process of approval for a
project.52 The commission is exempt from
CEQA and therefore never prepares an EIR
for its proposed permit decisions.53
This CEQA exemption does not, however, immunize the Coastal Commission from
evaluating the environmental impact of its
permit decisions. Other provisions of CEQA
require exempt agencies to prepare written
documentation “in lieu of” an EIR with an
equivalent analysis of impacts and mitigation measures.54
Counsel for the homeowner can argue
that the legislature has established complementary mandates requiring exempt agencies 1) to conduct environmental reviews
equivalent to EIRs, and 2) to redo EIRs when
surrounding circumstances have significantly
changed. CEQA could be construed to give
effect to both policies by requiring exempt
agencies to go through a subsequent or supplemental EIR-equivalent review for an OTD
in an area in which traffic, land use, neighborhood character, or other conditions have
materially changed since the time, perhaps
decades in the past, when the OTD obligation
was first imposed. Granting an exempt agency
the right to ignore the legislative directive to
recognize and assess changed circumstances
would elevate the form of the review over the
substantive policy behind the statute, which
mandates subsequent or supplemental
reviews.
If this argument succeeds, the Coastal
Commission would be required to set aside
a decision imposing an OTD condition until
an updated evaluation of potential adverse
impacts—and measures to mitigate those
impacts—has been prepared. The homeowner
would then have the right to challenge the
procedural and substantive adequacy of that
evaluation in a mandamus proceeding.
Permit Amendments and Equal
Protection
Homeowners can also restart the statute of
limitations, and acquire standing to bring a
new action against the Coastal Commission,
by applying for an amendment to their permit that would modify or delete the OTD condition.55 Although such an application would
have little chance of success with the commission, its submission and denial satisfy the
exhaustion of remedies requirement and
enable the homeowner to seek judicial review
of the commission decision through a mandamus action.56 The proceeding must be
commenced within the 60-day limitations
period applicable to commission decisions.57
No matter how unlikely the chance of
success before the Coastal Commission, counsel for the homeowner should take great care
in preparing the permit amendment, since
the record on which the court will decide
the mandamus petition is limited to the evidence submitted to the agency in the amendment application and during any hearing
held by the commission on the application.58
The application to the commission should
include a comprehensive presentation on the
potential adverse impacts of the opening of
the OTD on the homeowner, the immediate
neighborhood, and the surrounding area.
Counsel should provide facts and expert
opinion on noise, traffic and pedestrian safety,
litter, degraded aesthetic quality, liability, and
property damage concerns.
A permit amendment application also
provides an opportunity to challenge the
OTD on equal protection grounds. In Village
of Willowbrook v. Olech,59 the U.S. Supreme
Court allowed a landowner, acting as a “class
of one,” to claim that a local regulatory decision amounted to impermissible disparate
treatment.
The elements of such a claim, however,
remain unclear. The lower court in Olech
required the plaintiff to prove that the local
officials making the challenged decision were
motivated by malice.60 In a brief per curiam
affirmance of the lower court decision, eight
justices of the U.S. Supreme Court declined
to reach the issue of malice.61 Justice Breyer
concurred with the per curiam decision but
issued a separate opinion asserting that malice must be a necessary element to avoid
“transforming run-of-the-mill zoning cases
into cases of constitutional right.” 62
Moreover, the lower court, in its first case after
Olech involving the same issue, again required
proof of malice, reasoning that the full
Supreme Court would in the future adopt
the position urged by Justice Breyer.63
An Olech equal protection claim offers distinct advantages to a homeowner belatedly
seeking relief from a beach access promise.
The action may be brought in federal rather
than state court, and agency decisions do
not enjoy a presumption of validity in federal
court.
The plaintiff also is entitled to a jury trial
on the equal protection claim and should be
able to overcome a summary judgment
motion by making a colorable showing of differential treatment by the Coastal Commission of permit amendment applicants or
nonperforming OTD grantors in the area
near the plaintiff’s property. 64 A much
broader array of evidence may be compiled
and offered in support of the equal protection
claim and in opposition to a summary judgment motion by the commission since, unlike
the mandamus process, the full range of traditional discovery techniques may be used
in an equal protection suit to develop facts
pertinent to the grounds for denial of the
permit amendment application and the disposition of other such applications by the
commission.
In Malibu, for example, the Coastal
Commission allowed billionaire developer
Eli Broad and the wife of former Los Angeles
mayor Richard Riordan to delete OTD conditions from their separate coastal development permits by together acquiring a substitute piece of property for a vertical easement
in another neighborhood. These two parties
also agreed that if the substitute location ultimately could not be utilized for vertical access,
they would offer cash equal to the value of the
substitute, and the money could be used at the
discretion of the Coastal Conservancy to provide or improve beach access in the area.
The court of appeal upheld this tradeoff as
within the authority of the commission, rejecting a challenge by the homeowners residing
adjacent to the substitute property on which
access would be developed.65
Other OTD grantors with ample means
can be expected to seek similar accommodation from the Coastal Commission, and
under Olech they have a chance to convince
a jury that a denial of their offer of substitute
access, or cash in lieu of an actual right-ofway, denied them equal protection.
If a showing of malice is required, or useful in persuading a jury, the plaintiff has the
unusual luxury of being able to create the
record on which to base that element of the
case. The federal cases imposing a malice
requirement have found it satisfied, at least for
pleading purposes, if the plaintiff alleges that
the application was rejected in retaliation for
advocacy or other conduct hostile to local officials before they rejected the plaintiff’s application.66 A coastal landowner contemplating
a challenge based on a permit amendment
denial can therefore plan and carry out a
carefully orchestrated public advocacy campaign about the evils of the Coastal
Commission in general, and its beach access
exaction policies in particular, before commencing formal proceedings aimed at nullifying an OTD.67
Homeowners also may be able to negotiate with the Coastal Commission, or with the
agency or entity that assumes responsibility
for opening and operating the access, for
some measure of relief from their OTD obligation.68 The commission has accepted limitations on the hours an access may be open
as well as security measures—including locks,
gates, and other devices—to ensure compliance with closing times and to minimize
potential conflicts between members of the
public using the access and the adjacent residents.69 The commission has also approved
the relocation of an access way to a different
neighborhood and has accepted a cash payment as a substitute for the dedication of
land.70
The most effective time to open negotiations over an access obligation will vary from
case to case. If the mood of the Coastal
Commission staff appears hostile to any relaxation of the original OTD terms, the homeowner may be well advised to wait until litigation seeking to nullify the obligation is
well under way. The commission and the
access operators may be more amenable to
compromise when faced with ever-mounting legal bills or the prospect of an adverse
precedent that could dilute the effectiveness
of the commission’s entire beach access acquisition program.
Over the next few years efforts to open
coastal access dedications are certain to provoke litigation as homeowners resist sharing their property with the public. Far less certain is how these cases may alter the current
contours of CEQA and equal protection law.
Appellate decisions expanding opportunities
for challenges by homeowners would become
powerful precedents in other areas of land use
regulation and may provoke efforts by coastal
regulatory agencies and their allies to overrule
adverse rulings through legislation. Even less
clear is whether and when access to the beach
on and through the most coveted beach sanctuaries controlled by the wealthiest homeowners will be delivered to the public.
■
1
Cole v. County of Santa Barbara, 2001 WL 1613856
(Cal. App., 2d Dist. 2001) (unpublished), cert. denied,
537 U.S. 973 (2002).
2 David G. Savage & Kenneth R. Weiss, Justices Bolster
Beach Access, L.A. TIMES, Oct. 22, 2002, at A1;
Kenneth R. Weiss, Not All Quiet on the Beachfront,
L.A. TIMES, July 12, 2002, at B8.
3 City of Malibu v. Access for All, L.A. Sup. Ct. No.
BC 277034 (filed July 3, 2002).
4 Hank Sims, Town Is on Brink over Trail at Sea’s Edge,
L.A. TIMES, Oct. 27, 2003, at B5.
5 PUB. RES. CODE §30001.5.
6 City of Berkeley v. Superior Court of Alameda
County, 26 Cal. 3d 515, 521 (1980).
7 PUB. RES. CODE §30600(a).
8 Georgia-Pacific Corp. v. California Coastal Comm’n,
132 Cal. App. 3d 678, 687 n.4 (1st Dist. 1982).
9 Nollan v. California Coastal Comm’n, 483 U.S. 825,
837 (1987).
10 John Krist, Lawmakers Act to Preserve Coastal
Access, Environmental News Network (Oct. 4, 2002),
at http://www.enn.com (last visited Sept. 8, 2004).
11 P UB . R ES . C ODE §§30330-30344; C ALIFORNIA
COASTAL COMMISSION, PUBLIC ACCESS ACTION PLAN
ch. II, at 29 (1999), available at http://www
.coastal.ca.gov/accesspl.pdf (last visited Sept. 6, 2004).
12 Weiss, supra note 2.
13 CALIFORNIA COASTAL COMMISSION, PUBLIC ACCESS
ACTION PLAN, supra note 11, at 14.
14 Id.
15 Id. at 17.
16 James Rainey, State Agency Opens 2 Paths to
Exclusive Malibu Beach, L.A. TIMES, Sept. 21, 1995,
at 1.
17 CALIFORNIA COASTAL COMMISSION, RECAP PILOT
PROJECT FINDINGS & RECOMMENDATIONS ch. 4 (1995),
available at http://www.coastal.ca.gov/recap/chap4.html
(last visited Sept. 6, 2004).
18 Rainey, supra note 16; C ALIFORNIA C OASTAL
COMMISSION, PUBLIC ACCESS ACTION PLAN, supra note
11, at 24.
19 James Rainey, Faster Action by Agencies Is Preserving
Beach Access, L.A. TIMES, July 10, 2000, at 3.
20 PUB. RES. CODE §§31400, 31404.
21 Id.
22 PUB. RES. CODE §§31402.1, 31402.2.
23 Kenneth R. Weiss, The Sand and the Fury, L.A.
TIMES, July 10, 2004, at A1.
24 Id.
25 Trancas Prop. Owners v. State of Cal., L.A. Sup. Ct.
No. BC 309893 (filed Jan. 30, 2004). The case is currently on appeal after demurrers to the complaint were
sustained without leave to amend.
26 Serra Canyon Co. Ltd. v. California Coastal
Comm’n, 120 Cal. App. 4th 663, 670-71 (2d Dist.
2004).
27 CODE CIV. PROC. §1085.
28 Fukuda v. City of Angels, 20 Cal. 4th 805, 817
(1999).
29 Anthony v. Snyder, 116 Cal. App. 4th 643, 657 (4th
Dist. 2004); Unnamed Physician v. Board of Trs. of
Saint Agnes Med. Ctr., 93 Cal. App. 4th 607, 619 (5th
Dist. 2001).
30 Fukuda, 20 Cal. 4th 805, 817.
31 Topanga Ass’n for a Scenic Community v. County
of Los Angeles, 11 Cal. 3d 506, 514 (1974).
32 Sierra Club v. California Coastal Comm’n (County
of Mendocino), 12 Cal. App. 4th 602, 610 (1st Dist.
1993).
33 JON B. EISENBERG ET AL., CALIFORNIA PRACTICE GUIDE:
CIVIL APPEALS AND WRITS ¶15:146 (2004).
34 CODE CIV. PROC. §1094.5(a); Brennan v. Superior
Court of Sutter County (County of Sutter), 30 Cal. App.
4th 454, 458-59 (3d Dist. 1994).
35 CODE CIV. PROC. §1090.
37 PUB. RES. CODE §21167.
39 Western States Petroleum Ass’n. v. Superior Court
of L.A. County (Air Res. Bd.), 9 Cal. 4th 559, 566
(1995).
40 PUB. RES. CODE §§21065, 21080; 14 CAL. CODE
REGS. §15378.
41 Daniel v. County of Santa Barbara, 288 F. 3d 375,
383 (9th Cir. 2002).
42 Friends of Westwood, Inc. v. City of L.A., 191 Cal.
App. 3d 259, 272 (2d Dist. 1987).
Adoption of or amendments to Local Coastal
Programs certified by the Coastal Commission, for
example, are exempt from CEQA. PUB. RES. CODE
§§21080.5, 21080.9; see also Santa Barbara County
Flower & Nursery Growers Ass’n, Inc. v. County of
Santa Barbara, 121 Cal. App. 4th 864, 872 (2d Dist.
2004). For most of the statutory exemptions, see
CALIFORNIA RESOURCES AGENCY, CEQA GUIDELINES, 14
CAL. CODE REGS. §§15260-15285.
44 For a list of the categorical exemptions, see
CALIFORNIA RESOURCES AGENCY, CEQA GUIDELINES, 14
CAL. CODE REGS. §§15300-15333. See also 1 PRACTICE
UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
§5.5, at 175-182, and §5.58, at 216-220 (2004) (a useful compendium of both types of exemptions, including statutory exemptions not listed in the CEQA
GUIDELINES).
45 Magan v. County of Kings, 105 Cal. App. 4th 468,
474 (5th Dist. 2002).
46 Id.
47 14 CAL. CODE REGS. §15063.
48 14 CAL. CODE REGS. §§15072-15075, 15081-15088.
50 PUB. RES. CODE §21002.1 (A project may be undertaken even if the CEQA review discloses significant
adverse environmental impacts that are infeasible to mitigate.).
52 Id.
53 14 CAL. CODE REGS. §15251(c); La Costa Beach
Homeowners Ass’n v. California Coastal Comm’n,
101 Cal. App. 4th 804, 819-20 (2d Dist. 2002).
54 PUB. RES. CODE §21080.5.
55 14 CAL. CODE REGS. §§13164-13166.
56 The homeowner may not include a CEQA claim in
a mandamus petition challenging the denial of a permit amendment, even if the Coastal Commission conducted no environmental review, since the act expressly
exempts disapproval decisions. P UB . R ES . C ODE
§21080(b)(5).
58 CODE CIV. PROC. §1094.5(e).
59 Village of Willowbrook v. Olech, 528 U.S. 562
(2000).
60 Olech v. Village of Willowbrook, 160 F. 3d 386, 388
(7th Cir. 1998).
61 Olech, 528 U.S. at 565.
62 Id. at 566.
63 Hilton v. City of Wheeling, 209 F. 3d 1005, 1008
(7th Cir. 2000).
64 David Pettit & Michael Schafler, In a Class of Their
Own, LOS ANGELES LAWYER, Jan. 24, 2004, at 39, 40.
65 La Costa Beach Homeowners Ass’n v. California
Coastal Comm’n, 101 Cal. App. 4th 804, 816-17 (2d
Dist. 2002).
66 Olech v. Village of Willowbrook, 160 F. 3d 386, 388
(7th Cir. 1998).
67 Pettit & Schafler, supra note 64, at 40.
68 The homeowners in La Costa Beach Homeowners
Association v. California Coastal Commission presumably engaged in negotiations with the commission and
its staff before the initial permits were approved, since
each permit expressly authorized an application for an
amendment “that provides for offsite mitigation of
the public view corridor condition by provision of an
offsite public view corridor.” 101 Cal. App. 4th at 808.
69 For example, in approving the offsite access in La
Costa Beach Homeowners Association, the Coastal
Commission imposed conditions that were intended to
respond to adjacent homeowner concerns, including
limiting the use of the offsite access to daytime hours
and requiring the installation of a new fence and gate.
101 Cal. App. 4th at 809.
70 La Costa Beach Homeowners Ass’n, 101 Cal. App.
4th at 808-11.
43
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MCLE ARTICLE AND SELF-ASSESSMENT TEST
By reading this article and answering the accompanying test questions, you can earn one MCLE credit.
To apply for credit, please follow the instructions on the test answer sheet on page 33.
REAL ESTATE LAW
By John D. Darling
DELAY OF
GAME
One of the thorniest issues in delay and disruption
litigation is the quantification of actual damages
T
he oft-heard statement “time is
money” is nowhere truer than in
the construction industry. Owners,
design professionals, and contractors use time to calculate the
effect of lost performance. When construction
takes longer than planned, owners and contractors most certainly will lose money.
Managing time in construction is difficult,
because all construction projects bear some
degree of confusion and uncertainty. Indeed,
one court likened the conditions on a large
construction project to those on a battlefield:
[E]xcept in the middle of a battlefield,
nowhere must men coordinate the
movement of other men and all materials in the midst of such chaos, and
with such limited certainty of present
facts and future occurrences as a huge
construction project….Even the most
painstaking planning frequently turns
out to be mere conjecture[,] and
accommodation to changes must necessarily be of the rough, quick, and ad
hoc sort, analogous to ever-changing
commands on the battlefield.1
Delay and disruption claims are some of
the most expensive, difficult, and, yes, timeconsuming disputes to litigate. Delay arises
when the project is not completed within the
agreed deadline. Disruption emerges when an
owner causes a change in the method of construction upon which the contractor based its
bid. Within the rubric of disruption claims are
those that are sometimes labeled as labor
productivity, loss of efficiency, impact, and
hindrance claims.
Delay and disruption often occur together.
However, there is a difference between a disruption claim and a claim for pure delay.
Disruption of the contractor’s planned
sequence and method of construction typically
causes a loss of productivity. This loss of
productivity, however, does not necessarily
mean that the overall contractual completion date will be delayed as a result of the disruption. Understanding these claims not only
will help clients avoid litigation but will also
encourage clients to transform their contracts
from those that increase client vulnerability
to litigation to those that can foster a conJohn D. Darling is a shareholder of the law firm Hunt
Ortmann Blasco Palffy & Rossell, Inc. He specializes in the resolution of disputes involving public
and private construction, with a particular emphasis on delay and disruption claims.
struction environment that is resilient in the
face of the confusions and setbacks of a construction project.
Over the years, the construction industry
has developed various methods of contractually allocating the risk of project delay and
disruption. Some of these methods include liquidated damages provisions, “no damages
for delay” clauses,2 mutual waivers of consequential damages,3 provisions that limit
liability,4 claims notice provisions, and provisions addressing responsibility for the adequacy of the construction plans and specifications. 5 Parties frequently litigate the
sufficiency of these risk-shifting efforts in
conjunction with the underlying merits of
delay and disruption disputes.
The conditions that erupt into delay and
disruption claims do not occur in a vacuum.
When the owner or the owner’s agents—
such as the construction manager, architect,
and engineer, among others—ostensibly delay
or disrupt the contractor, the actual cause
may be that the owner breached one or more
of its obligations to the contractor. These
obligations include providing adequate plans
and specifications, providing site access, cooperating with the contractor when difficulties
or problems are encountered, and making
timely progress payments.
In 1918, the U.S. Supreme Court established the Spearin doctrine, which obligates
owners to furnish contractors with accurate
construction plans and specifications. 6
California courts still follow the Spearin doctrine.7 Unless an owner opts for a comprehensive constructability review—typically
performed by a group of construction professionals, including a disinterested architect
and a nonbidding contractor—to ferret out
any ambiguities or omissions in the plans
and specifications, defects typically are not
discovered until construction is underway
and thousands of dollars are being spent
daily on labor, material, and equipment.
In the midst of this activity, the discovery of defects in the plans and specifications usually leads to allegations hurled back
and forth among the parties, and chaos
ensues. Contractors refuse to fabricate or
buy critical material. Architects and engineers contend that the plans and specifications are complete and that an experienced
general contractor should be able to properly read and interpret them. The owner is
in a precarious position. Further delays
could result by siding with one party.
Moreover, whatever side the owner chooses,
increased costs are inevitable. The ability of
the owner, contractor, and design professionals to work proactively through legitimate disputes regarding the adequacy of a
design makes the critical difference as to
whether a project will be successful or lead
to multiple lawsuits involving delay and disruption claims.8
Owners also may cause or contribute to
delay and disruption claims by failing to provide adequate site access to the contractor. If
site access is restricted because of easements,
or if the owners have not secured the necessary permits to allow site construction to
commence, a contractor’s initial construction plan may be stymied. The inability to
build according to the planned sequence can
lead to delay and disruption claims.
The owner’s timely payment of the contractor is the key to job site productivity.
Money motivates contractors to perform.
Subcontractors who are not being timely
paid are reluctant to fully staff a project, and
productivity invariably lessens.
The responsibility of contractors for delay
and disruption tends to arise from improper
planning. A contractor’s obligations center on
proper planning, which ensures that the work
is adequately scheduled, sequenced, and coordinated. The contractor is the captain of the
ship and is responsible for a coherent and logical construction plan in the form of a schedule. Schedules are typically based on “critical
path” methodology. The critical path is “the
longest series of the work activities to the
performance of a whole project.”9 A schedule based on the critical path method breaks
down the activities on a given project into
component parts and shows an early start/late
start and early finish/late finish for any particular task. If the contractor’s schedule is flawed,
either because it does not permit enough time
to complete critical components of the work
or does not lay out the construction activities
in a logical sequence, delay and disruption
claims invariably arise. Scheduling errors can
cause further delay or disruption if the work
is not properly coordinated.
Contractors frequently create “look
ahead” schedules, which are designed to
show the work that will be performed in the
subsequent two or three weeks. Once the
project starts, all the major subcontractors
want to start their work first, with as little
interference from the other subcontractors as
possible. To maximize profit, subcontractors
are motivated to work quickly and expend as
few worker hours as possible. If the prime
contractor schedules the subcontractors so
that they are forced to work together in confined spaces, the subcontractors expend more
worker hours to accomplish less work. This
leads to a lack of productivity and labor cost
overruns. More important, the environment
becomes one in which disruption claims may
emerge.
Contractors can also delay a project by
untimely material procurement, by providing
an insufficient work force, and by not following the plans and specifications.
If a project is not completed on time, the
owner can assess liquidated damages against
the contractor or, in the absence of a liquidated damages clause, pursue a delay claim.
The contractor may also pursue a delay claim.
Whatever action is taken, contractors generally bear the burden of proof to establish
that 1) they are not responsible for the delay,
and 2) the reasons for the delay will lead to
owner liability.10
Prosecuting and Defending Delay
Claims
Excusable delay occurs as a result of events
outside a contractor’s control, such as acts of
God (floods, hurricanes), labor strikes, unusually severe weather, and an inability to obtain
critical materials due to plant closings and
product shortages. Inexcusable delay is caused
by the contractor due to a failure to properly
schedule or supervise the work or to prosecute the work diligently. Generally, an excusable delay entitles a contractor to a contract
time extension and relief from a potential or
actual liquidated damages assessment but
does not allow the contractor to recover the
costs of delay.
A contractor seeking damages for a delay
must prove that the delay was excusable and
compensable. An excusable, compensable
delay is caused by the owner or the owner’s
agent, for example because of defective plans
and specifications. Establishing proof of an
excusable, compensable delay—or providing the foundation for a defense against an
allegation of an excusable, compensable
delay—hinges, for the most part, on the
research and wisdom of experts in construction scheduling, work sequencing, and design
inadequacy. The development of this expert
evidence is a time-consuming and therefore
expensive process.
Frequently in delay litigation a contractor
tries to prove excusable, compensable delay
in response to an owner’s action for a liquidated damages assessment. In the context of
construction claims, a liquidated damages
provision requires the contractor to pay the
owner a per diem amount for every calendar
day of delay. Liquidated damages can range
from $250 to $25,000 a day depending on the
project. Such clauses are presumed valid.11 In
order to invalidate the clause, the contractor
must demonstrate “that the provision was
unreasonable under the circumstances existing at the time the contract was made.”12
Contractors sometimes contend that a
liquidated damages clause cannot be enforced
because the owner cannot establish actual
damages. Under this line of attack, the contractor asserts that the clause is a penalty
and therefore invalid. To date, no California
case has addressed this issue. Contractors
also attack the validity of an owner’s liqui-
MCLE Test No. 133
The Los Angeles County Bar Association certifies that this activity has been approved for Minimum
Continuing Legal Education credit by the State Bar of California in the amount of 1 hour.
1. Delay occurs when an owner causes a change
in the method of construction upon which the
contractor based its bid.
True.
False.
2. Disruption claims are legally distinct from
impact, hindrance, or loss of efficiency claims.
True.
False.
3. California courts follow the Spearin doctrine.
True.
False.
4. The critical path is the shortest series of
work activities to the performance of the entire
construction project.
True.
False.
5. When a contract is not completed on time,
the owner can only assess liquidated damages
after it has proven that the contractor was
responsible for the delayed completion date.
True.
False.
6. Because clauses for liquidated damages can
lead to the assessment of a penalty, they are presumptively invalid.
True.
False.
7. California follows the apportionment rule for
purposes of liquidated damage assessments.
True.
False.
8. Generally, the only delays that are compensable are those that occur on the critical
path.
True.
False.
9. A bar chart schedule may be used at trial to
prove critical path delays.
True.
False.
10. The Eichleay formula is used to calculate
a contractor’s disruption damages.
True.
False.
11. Some courts have indicated that quantifying
disruption claims is essentially impossible.
True.
False.
12. Under California law, contractors must
prove disruption damages with mathematical
precision.
True.
False.
13. The measured mile method is used to prove
a disruption claim.
True.
False.
14. The industry standard method of quantifying productivity has never been used successfully in the prosecution of a disruption
claim.
True.
False.
15. The total cost method of quantifying labor
inefficiency claims has never been adopted in
California.
True.
False.
16. The total cost method can be used in a claim
arising from a public works project in
California.
True.
False.
17. The jury verdict method has never been
applied in California.
True.
False.
18. The jury verdict method can be used even
when a more reliable method of computing
damages is available.
True.
False.
19. A contractor can receive compensation for
its delay costs if the delay is excusable.
True.
False.
20. A contractor is entitled to be paid for its
delay costs during a concurrent delay period.
True.
False.
MCLE Answer Sheet #133
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1.
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2.
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3.
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4.
■ True
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5.
■ True
■ False
6.
■ True
■ False
7.
■ True
■ False
8.
■ True
■ False
9.
■ True
■ False
10.
■ True
■ False
11.
■ True
■ False
12.
■ True
■ False
13.
■ True
■ False
14.
■ True
■ False
15.
■ True
■ False
16.
■ True
■ False
17.
■ True
■ False
18.
■ True
■ False
19.
■ True
■ False
20.
■ True
■ False
dated damages claim time period by asserting that the owner’s claimed date of completion is not based on when the project was
actually finished, which should be the date the
owner had “beneficial occupancy.”13
The issue of concurrent delay typically is
raised in the litigation of delay claims and liquidated damages. One court defined true concurrent delay: “If a period of delay can be
attributed simultaneously to the actions of
both the government and the contractor,
there are said to be concurrent delays, and the
result is an excusable but not compensable
delay.”14 The older line of California cases on
concurrent delay held that if the owner bore
responsibility for any of the delay, the owner
ibility and decreases the potential for a liquidated damages assessment.
An expert may employ one or more methods of proving compensable critical path
delay. The “window analysis” involves
preparing an as-planned schedule together
with an analysis demonstrating the delays
that occurred on the project and how those
delays created a new critical path. The expert
then assesses responsibility for each delay
and opines as to whether it is excusable and
compensable.
Another method is the “collapsed schedule analysis.” Under this approach, the expert
prepares an as-planned schedule and an asbuilt schedule. After these schedules are com-
compensable critical path delay, then the trier
of fact will be asked to multiply the number
of days of delay by the per diem charge for
the contractor’s extended general conditions.
This calculation is designed to capture the
contractor’s delay damages for direct costs.
To establish the contractor’s claim for
indirect damages, the generally preferred
method is the Eichleay home office overhead
calculation.20 This calculation is designed to
demonstrate the contractor’s “unabsorbed”
home office overhead. Eichleay is based on the
premise that contractors pay for their fixed
overhead expenses through a revenue stream
generated from various construction projects. The home office overhead expenses help
A contractor seeking to recover under Eichleay must
demonstrate that 1) an excusable, compensable delay
occurred, 2) the contractor was working on standby,
and 3) the contractor was unable to take on other work.
was prohibited from assessing liquidated
damages.15 Recent courts have opted for the
doctrine of apportionment. In situations in
which the period of delay is partly the fault
of the owner and partly the fault of the contractor, courts will permit the parties to apportion delay according to fault.16
Assuming a contractor can establish excusable, compensable delay, the contractor typically only recovers delay damages if the
delay falls on the critical path.17 One court
clearly articulated the rationale for this rule:
The reason that the determination of
the critical path is crucial to the calculation of delay damages is that only
construction work on the critical path
had an impact upon the time in which
the project was completed. If work on
the critical path was delayed, then the
eventual completion date of the project
was delayed. Delay involving work
not on the critical path generally had
no impact on the eventual completion
of the project.18
“Float” is the total time an activity can be
delayed without delaying the entire project.
If a particular activity has no float, that activity is on the critical path. An activity that has
float can become a critical path activity if
the preceding activities are delayed and the
float is used. In delay litigation, owners and
contractors contend that they each own the
float. Contractors want to own the float
because it gives them greater scheduling flex34 Los Angeles Lawyer January 2005
plete, the expert creates a collapsed schedule
that removes the alleged owner-caused delay.
Some experts will not use a critical path
schedule analysis to demonstrate compensable
delay. Instead, they will employ a “bar chart”
analysis. A bar chart schedule is one that
shows the duration of particular activities
but does not necessarily show the relationship
among predecessor and successor activities.
Owners frequently contend that a contractor
may only prove delay damages through a
critical path analysis, not through a bar chart
analysis. In California, courts have held that
a bar chart schedule may be used to demonstrate delay so long as the schedule identifies
the project’s critical path and the analysis
demonstrates “that the delays constitute critical path delays.”19
A contractor’s delay damages typically
consist of direct and indirect expenses. Direct
expenses are those expended at the project site
for supervision, office trailers, fences, fax
machines, and the like. Direct expenses are
commonly referred to as general conditions.
Indirect expenses are costs expended to support job site activities, such as the contractor’s
office staff, office lease payments, project
management, and administrative support.
Indirect expenses are commonly referred to
as home office overhead charges.
Part of a contractor’s proof of delay damages typically includes a per diem charge for
extended general conditions. Once the contractor has established a period of excusable,
support the contractor’s direct job site
expenses. Contractors’ bids include an
amount necessary to cover home office overhead. If a project is delayed and the contractor does not receive corresponding payments from the owner to cover its overhead
during the delay period, the contractor will
nevertheless have to contribute some amount
of its home office overhead to support its
project activities. Under this scenario, the
contractor experiences unabsorbed home
office overhead.
The Eichleay formula, and the various
iterations of Eichleay, are designed to calculate the daily home office overhead incurred
to support the project during the delay period.
This daily rate is given to the trier of fact
together with the number of excusable, compensable days of delay. If persuaded by the
analysis, the trier of fact then calculates the
total extended home office overhead claim to
be awarded to the contractor.
A contractor seeking to recover under
Eichleay must demonstrate that 1) an excusable, compensable delay occurred, 2) the contractor was working on standby, and 3) the
contractor was unable to take on other
work.21 California courts have permitted the
recovery of unabsorbed overhead, although
no explicit reference to the Eichleay formula
has been made.22 According to the West v.
Allstate Boiler decision, “the proper Stand By
test focuses on the delay or suspension of
contract performance for an uncertain dura-
tion, during which a contractor is required to
remain ready to perform.”23 If the contractor is able to satisfy the “stand by” test, then
the burden of proof shifts to the owner to
show that the contractor took on other work
specifically to cover the contractor’s lost overhead.24
Calculating Disruption Damages
A contractor’s disruption claim arises when
an owner changes the method and/or
sequence of construction from that upon
which the contractor based its bid. When
the planned method of completing the project
is disrupted, contractors incur increased labor
costs because it takes them more time to
complete the task than originally contemplated. When this occurs, contractors either
allege a breach of an express contract provision that requires cooperation between the
owner and the contractor for project planning
and coordination or a breach of the implied
duty of the owner to cooperate with the contractor or refrain from hindering the contractor.25
A nationally recognized construction law
treatise elaborates on the implied duty to
cooperate:
Failure to cooperate can come in the
form of disapproval of an accepted
method of performance, untimely
progress payments, delay in approving
changes or correcting design specifications and drawings, failure to disclose superior knowledge or provide
timely information, disruptive inspections, poor coordination of other contractors, and refusal to permit storage or access to the site.26
To counter a contractor’s disruption claim,
owners often argue that they had the right to
change the schedule and, therefore, the
sequence of construction because of the terms
of the contract. Owners reason that these
express terms trump the implied duty to
cooperate, thereby rendering the legal basis
for a contractor’s claim suspect.27
Owners also contend that a contractor’s
assumptions regarding job site access and
sequencing were unrealistic and therefore not
the owner’s fault. When confronted with these
owner defenses, contractors must prove a
cause-and-effect relationship between their
labor cost overrun or disruption claim and the
owner’s conduct.28 All too frequently, disruption claims cannot be established with
precise cause-and-effect proof. Courts have
recognized that experts are needed to demonstrate a cause-and-effect relationship by some
accepted method of proving causation and
quantification: “Quantification of loss of efficiency or impact claims is a particularly vexing and complex problem. We have recognized that maintaining cost records, identifying
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and separating inefficiency costs to be both
impractical and essentially impossible.”29
Another court addressed the quantification
issue in a similar fashion by noting that the
quantification of the loss of labor productivity
is difficult and the determination of exact
damages is “essentially impossible.” Nevertheless, the measurement of this type of
damages will be determined largely by expert
testimony.30
To support a disruption damage calculation, contractors typically refer to Civil Code
Section 3300—which defines the “measure
of damages” for a breach of contract—and
case law holding that once damages have
been established with “reasonable certainty,”
recovery will be allowed, even though the
damages cannot be stated with mathematical
precision.31
There are various methods that experts
use to quantify loss of productivity and show
causation in labor inefficiency claims. These
methods include the “measured mile” analysis, the “industry standard” approach, the
“total cost” method, the “modified total cost”
approach, and the “jury verdict” method.
The measured mile approach analyzes the
contractor’s productivity during a portion of
the project in which the contractor’s work was
not impeded by the owner. This measure of
productivity is then compared to the productivity experienced during the disruption.
One court, in describing the measured mile
approach, also terms it the “good period versus bad period analysis.”32
The productivity rate for a period of disruption is quantified in lost worker hours,
which are multiplied by an hourly rate to
find the loss of labor productivity, or the disruption claim amount. The measured mile has
been accepted by many courts and is generally the favored method of quantifying labor
productivity claims.
Owners attack a measured mile calculation by claiming that the baseline productivity measure—that is, the measure of the period
unaffected by disruption—is faulty. A baseline productivity measure can be inaccurate
if the “good period versus bad period” comparison is not an “apples to apples” comparison. The measured mile in its purest
application measures two different periods of
productivity for the same type of work performed under the same type of physical conditions on the same project.
A less favored approach is the industry
standard method of quantifying labor productivity. Trade groups for various contractors have published productivity tables that
show how various job site conditions can
affect labor productivity. Particular conditions are scored in terms of their effect on productivity. One of the more recognized industry productivity standards is the Mechanical
Contractors’ Association of America’s
(MCAA) Productivity Factor Analysis. A contractor’s expert can use the MCAA factors and
opine as to how much the contractor’s productivity was affected by the owner’s disruption. These measurements are then quantified to show the loss of labor efficiency and
the disruption claim amount.
Owners attack these standards as being
biased, since they were created by contractor
trade groups. Owners also contend that industry standards are factually distinguishable
from the conditions actually experienced on
their job sites. Nonetheless, industry standards have been used successfully as a way to
measure productivity.33
The total cost method is based on the
premise that the resulting project is a “cardinal change” from what was originally contracted—that is, the current project is fundamentally different from the project
envisioned by the contract. Once a cardinal
change, or abandonment, has been established, the contractor is freed from the terms
of the contract and is allowed to recover the
reasonable value of labor and materials, plus
reasonable markups for overhead and profit,
less what was previously paid. In effect, the
total cost method turns a fixed-price contract into a time-and-materials contract.34
For this reason numerous courts have disfavored this method.35
A contractor using the total cost method
must satisfy a four-part test. The contractor
must 1) demonstrate the impracticability of
proving its actual losses directly, 2) prove
that its bid was reasonable, 3) prove that its
actual costs were reasonable, and 4) prove
that it was not responsible for its added
costs.36 On a public works project, the judge
first determines if the contractor has submitted prima facie evidence that the fourpart test has been established before the jury
can be instructed on a total cost theory or a
modified total cost theory of recovery.37
The modified total cost method alters the
total cost method by subtracting from the
total costs any costs incurred by the contractor due to its own inefficiencies.38 The
main criticism of the total cost and modified
total cost methods is that they can be used by
contractors to hide losses not caused by the
owner, such as those losses due to the contractors’ bidding errors or defective project
management. Owners frequently seek to bar
the total cost and modified total cost methods on these grounds.
Owners also contend that the contractor’s cost records are sufficiently detailed so
that, during the course of a project, the contractor could have tracked its costs to show
an actual causal relationship between the
owner’s actions and the contractor’s loss of
production. Owners argue that to the extent
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the contractor failed to adjust its accounting
system to track job costs, the contractor
should be barred from using the total cost
method.
Owners are particularly uncomfortable
with allowing total cost claims to be submitted to a jury. A total cost calculation is easy
for a jury to understand. Indeed, owners are
loathe to allow a total cost claim to be submitted to a jury without a fight because a jury,
after the presentation of a long and complex
construction case, can arrive at a substantial
total cost verdict after a short deliberation.
The jury verdict method is used to allow
the trier of fact to determine recoverable disruption damages. Some characterize this
method as a last resort. To apply this method,
a party must present 1) a clear proof of injury,
2) an indication that there is no more reliable
method of computing damages than leaving
the matter to the trier of fact, and 3) evidence
of sufficient weight for the trier of fact to
make a fair and reasonable approximation of
damages.39 Frequently, courts as the trier of
fact use evidence submitted in support of
other quantification methods, such as the total
cost method, to derive a jury verdict calculation.40 Owners contend that the jury verdict method should not be used because the
plaintiff contractor failed to meet its burden
of demonstrating damages with reasonable
certainty. Owners also contend that the jury
verdict method, in essence, amounts to nothing more than allowing the trier of fact to
make a guess regarding what the contractor’s
damages are, and this process frees the contractor from its normal and customary burden
of showing breach, causation, and damage.
Several elements can be included in contract documents to reduce the risk of delay
and disruption losses. These include “no
damages for delay” clauses, claims notice
provisions, scheduling provisions, claim
waivers, and “limitation of liability” clauses,
to name just a few. Since each of these provisions and exceptions generally will be
weighted toward one of the parties, all bear
serious consideration before use, with particular attention to their enforceability under
California law.
Litigating delay and disruption claims can
be disastrous for all parties. The best means of
preventing these claims in the first place is for
attorneys to properly educate owners and contractors about delay and disruption issues.
Appropriate planning and awareness of all
the ways owners and contractors are vulnerable to delay and disruption claims can avert
a battle or, at the very least, minimize the
casualties.
■
1
Blake Constr. Co. v. C.J. Coakley Co., Inc., 431 A.
2d 569, 575 (D.C. Ct. App. 1981).
2 Yamanishi v. Bleily & Collishaw, Inc., 29 Cal. App.
3d 457, 463 (1972); Hawley v. Orange County Flood
Control Dist., 211 Cal. App. 2d 708 (1963); Blake
Constr. Co., 431 A. 2d 572; E.C. Ernst v. Manhattan
Constr. Co. of Tex., 551 F. 2d 1026, 1029 (5th Cir.
1977). See PUB. CONT. CODE §7102; see also Howard
Contracting, Inc. v. G.A. McDonald Constr. Co., 71
Cal. App. 4th 38, 48 (1999) (finding in favor of the contractor and rendering the contract provision invalid).
3 AMERICAN INSTITUTE OF ARCHITECTS, A201 GENERAL
CONDITIONS §4.3.10 (1997 ed).
4 C IV . C ODE §2782.5; Markborough Cal., Inc. v.
Superior Court of Riverside, 227 Cal. App. 3d 705
(1991).
5 See AMERICAN INSTITUTE OF ARCHITECTS, AIA A201
GENERAL CONDITIONS §§3.2.1, 3.2.2, 3.2.3, 3.12.10
(1997 ed.); PUB. CONT. CODE §1104.
6 United States v. Spearin, 248 U.S. 132 (1918).
7 PUB. CONT. CODE §1104; City of Salinas v. Souza &
McCue, 66 Cal. 2d 217 (1967); Howard Contracting,
71 Cal. App. 4th 138.
8 Acceleration claims—another subset of time-related
construction claims—are not included in the category
of disruption claims. However, many of the legal principles underpinning disruption claims apply to issues
that arise in acceleration claims.
9 Appeal of Montgomery-Ross-Fisher, Inc., PSBCA
(Postal Service Board of Contract Appeals) Nos. 1033,
1096, 84-2 BCA (CCH) No. 7499 (1984).
10 Bigelow, Inc., ASBCA (Armed Services Board of
Contract Appeals) No. 24376, 81-2 BCA (CCH) ¶15,
300 (1981).
11 CIV. CODE §1671; PUB. CONT. CODE §10226.
12 Id.
13 CIV. CODE §3086; Westinghouse Elec. Corp. v.
County of Los Angeles, 129 Cal. App. 3d 771, 779
(1982); Peter Kiewitt Sons Co. v. Pasadena City Junior
College Dist., 59 Cal. 2d 241, 245-46 (1963).
14 Dawson Constr. Co., GSBCA (General Services Board
of Contract Appeals) No. 3998, 75-2 BCA (CCH)
¶11,563 (1975).
15 Go Go v. Los Angeles Flood Control Dist., 45 Cal.
App. 2d 334 (1941); Aetna Cas. & Sur. Co. v. Board of
Trs., 223 Cal. App. 2d 337 (1963); General Ins. Co. v.
Commerce Hyatt House, 5 Cal. App. 3d 460 (1970).
16 Nomellini Constr. Co. v. State of Cal., 19 Cal. App.
3d 240 (1971); Jasper Constr. v. Foothill Junior College
Dist., 91 Cal. App. 3d 1 (1979); Pathan Constr. Co. v.
High-Way Elec. Co., 65 Ill. App. 3d 480, 382 N.E. 2d
453 (1978).
17 Howard Contracting, Inc. v. G.A. McDonald Constr.,
Inc., 71 Cal. App. 4th 38 (1998); Fortec Constr. v.
United States, 8 Cl. Ct. 490 (1985); Mega Constr. Co.,
Inc. v. United States, 29 Fed. Cl. 396, 424 (1993).
18 Fortec Constr., 8 Cl. Ct. 490.
19 Howard Contracting, 71 Cal. App. 4th 38.
20 Eichleay Corp., ASBCA No. 5183, 60-2 BCA (CCH)
¶2,688 (1960).
21 West v. Allstate Boiler, Inc., 146 F. 3d 1368, 1373
(1998); Interstate Gen. Gov’t Contracts, Inc. v. West, 12
F. 3d 1053, 1056 (Fed. Cir. 1993).
22 Howard Contracting, 71 Cal. App. 4th at 54.
23 Allstate Boiler, 146 F. 3d at 1373.
24 The “other work” test has been analyzed by many
cases since the original Eichleay decision. See Melka
Marine, Inc. v. United States, 187 F. 3d 1370 (Fed. Cir.
1999). In some instances, the Federal Acquisition
Regulations (FAR) apply a certain percentage on
change orders to cover a contractor’s home office
overhead.
25 Howard Contracting, 71 Cal. App. 4th at 50; Henseler
v. City of L.A., 124 Cal. App. 2d 71, 82-83 (1954); Shea
v. City of L.A., 6 Cal. App. 2d 534 (1935); McWilliams
v. Holton, 248 Cal. App. 2d 447, 451 (1967); Blake
Constr. Co. v. C.J. Coakley Co., Inc., 431 A. 2d 569
(D.C. Ct. App. 1981); Fowler & Butts, PSBCA No.
254591-1, BCA (CCH) ¶23,391, at 117,383 (1990).
26 CUSHMAN & BUTLER, CONSTRUCTION CHANGE ORDER
CLAIMS §7.11 (1994).
27 Carma Devs. (Cal.), Inc. v. Marathon Dev. Cal., 2
Cal. 4th 342, 373 (1992).
28 Lewis Mgmt. & Serv. Co., ASBCA No. 24,389, 852 BCA (CCH) ¶18,042, at 90,565 (1985).
29 The Clark Constr. Group, Inc., VABCA (Veterans
Affairs Board of Contract Appeals) No. 5674, 00-1
BCA ¶30,870 (2000).
30 P.J. Dick, Inc., VABCA No. 5597, 01-2 BCA ¶31,647
(2001).
31 Allen v. Gardner, 126 Cal. App. 2d 335, 340-42
(1954); State of Cal. v. Guy F. Atkinson, 186 Cal. 3d
25 (1986).
32 P.J. Dick, Inc., VABCA No. 5597, 01-2 BCA ¶31,647
(2001) (italics in original).
33 Fire Sec. Sys., Inc., VABCA No. 3086, 91-2 BCA
¶23,743 (1991).
34 C. Norman Peterson Co. v. Container Corp. of
Am., 172 Cal. App. 3d 628 (1985).
35 Huber Hunt & Nichols, Inc. v. Moore, 67 Cal.
App. 3d 278 (1977); Amelco Elec. v. City of Thousand
Oaks, 27 Cal. 4th 228 (2002).
36 Amelco Elec., 27 Cal. 4th at 243.
37 Id. at 243, 244.
38 Servidone v. United States, 19 Cl. Ct. 346, 348
(1990), aff’d, 931 F. 2d 860 (Fed. Cir. 1990).
39 State ex rel. Dep’t of Transp. v. Guy F. Atkinson Co.,
187 Cal. App. 3d 25, 32-35 (1986); WRB Corp. v.
United States, 138 Ct. Cl. 409, 425 (1968).
40 Tutor-Saliba-Perini, PSBCA No. 12, 87-2 BCA
(CCH) ¶19,775 (1987).
REAL ESTATE LAW
By Mark L. Share
SETTING
BOUNDARIES
L
ike the general in Hamlet who complained, “We go to gain
a little patch of ground that hath in it no profit,”1 California
courts have, in several recent cases, shown a lack of sympathy to property owners who seek to win a bit of land that
has little value to them. These reported opinions favor the
encroacher when the encroacher has improved the land in such a way
that it would cause that party relatively great injury if the court
ordered the encroachment removed. In such cases, the trial courts are
denying the landowner’s request for an injunction and permitting some
of the encroachments to remain for a period of time. Although the
California Supreme Court has not yet weighed in on this issue, the
courts of appeal have consistently affirmed trial court decisions,
while at the same time taking care to clarify that the remedy is not
labeled a “prescriptive easement.”
Boundary disputes generally raise two issues: Where is the actual
boundary line, and, when it is located, what should be done with the
improvements lying on the wrong side? In the mid-1990s, the courts
of appeal answered the first question by reference to the recorded line.2
Legal theories that attempted to trump the recorded line through
adverse use, such as a prescriptive easement3 or agreed boundary,4
were broadly disapproved.5 Those opinions did not, however, resolve
what to do with the improvements that lay on the wrong side of the
recorded boundary line. This latter issue has now been considered by
the courts of appeal in a series of opinions that, perhaps surprisingly,
and undoubtedly to the frustration of title insurers, unanimously
uphold the trial courts’ judgment in equity to allow some or all of the
encroachments to remain.6
These recent cases apply a nuanced approach to boundary dispute
resolution. The adverse claimant who seeks a prescriptive right at law
to a portion of a neighbor’s yard for softscape (no structures) landscaping based on the fence line is likely to lose, as held in Silacci v.
Mark L. Share has a real estate, business, and litigation practice at De Castro,
West, Chodorow, Glickfeld & Nass, Inc., in Westwood.
RICHARD EWING
Principles of equity will not protect encroachers who
have knowingly invaded their neighbors’ property
Abramson, Mehdizadeh v. Mincer, and more
recently, in Harrison v. Welch. However, a
claimant who seeks an easement in equity to
maintain a driveway or utility line will likely
find more favor in the courts, as in Kapner v.
Meadlowark Ranch Association or Harrison
v. Welch (in a separate finding in that case)
and Hirshfield v. Schwartz. A claimant who
has actually built an expensive structure also
will find that courts tend to award an equitable easement, as in Hirshfield, which permitted a neighbor to encroach upon a Bel Air
property to maintain hardscape landscaping,
including a sand trap and electrical equipment
number or record title and do not assess easements. Prescriptive easements have the same
requirements as adverse possession, except
they do not require payment of taxes. Those
requirements are: continuous, open, and notorious use of the land and hostile use (without
permission) for five years under a claim of
right.11 The prescriptive easement theory
was, however, held to be inapplicable by
Silacci and Mehdizadeh when it would grant
exclusive use of the disputed property to the
encroacher, such as by means of a fence.
Another theory that courts rejected was
the agreed-boundary doctrine, which has
for waterfalls and a swimming pool.
The recent cases also point to a solution
for claimants who seek rights over publicly
owned property. The law has been clear that
one cannot acquire prescriptive rights at law
to public land.7 Equitable principles, however,
can be applied to government entities. Absent
a strong countervailing public policy, estoppel and other equitable principles are “now
applied freely against the state, its subdivisions, and other governmental agencies.”8
Therefore, governmental entities may have
difficulty in some cases obtaining injunctions
requiring the removal of encroachments and
may suffer equitable easements over their
land.
An adverse or prescriptive claimant has
various legal arguments to retain possession.9
Adverse possession is the best known, but this
claim requires the adverse claimant to have
paid real estate taxes on the disputed land for
the previous five years.10 Usually the claimant
cannot establish payment of taxes because the
county tax assessors send tax bills by lot
been used by encroachers to argue that neighbors should treat any longstanding fence or
wall as the legal boundary. But the doctrine
no longer applies when a surveyor is able to
locate the boundary from recorded documents.12
Encroachers can also claim permission to
encroach. Oral permission can be enforced if
relied upon. For instance, in Noronha v.
Stewart, the court held that an encroaching
wall would not be enjoined when the record
owner of the land had given permission to
build the wall and the encroaching neighbor
had gone to considerable expense to build
it.13 In another case, permission to drain rainwater onto a neighbor’s roof was implied
when it was the most reasonable way to prevent water damage to both parties’ adjacent
buildings.14
Equitable Easements
When the encroacher cannot prove that the
record owner gave permission and legal doctrines of prescriptive easement and agreed-
boundary appear unavailing, equity may provide relief through an equitable easement.
Recent opinions provide guidance on how to
persuade a court in equity to let the encroachments remain—or to order their removal. In
reviving the equitable easement in 2001, the
Hirshfield court drew on a long line of California case law and confirmed its ongoing
applicability despite Silacci and Mehdizadeh.
In summary, the encroacher must persuade the
trial court on three issues: 1) that the encroachment was created innocently, 2) that the
record owner will not suffer irreparable injury,
and 3) that removal would cause the
encroacher to suffer hardship that is greatly
disproportionate to the hardship that the
record owner would suffer if the encroachment remained.15 If the encroacher establishes these three elements, the encroachment
may remain, despite the encroacher’s failure
to establish adverse possession or a prescriptive easement.
The courts have made some general statements regarding how easy or hard it should
be to obtain an injunction requiring removal
of encroachments. For instance, some courts
have agreed that the court should “start with
the premise that defendant [encroacher] is a
wrongdoer, and…[t]hus doubtful cases should
be decided in favor of plaintiff.” 16 Encroachers can find comfort in a countervailing policy that the “remedy of injunction is
a drastic one” that should not be granted
when it would inequitably burden the encroacher and when the landowner can be
“adequately compensated in damages.”17
The latter position is consistent with the
maxim that equity abhors a forfeiture, which
is essentially the result if an encroachment is
enjoined.
The test of innocence, as opposed to negligence or bad intent, often will be satisfied,
because encroachments generally result from
ignorance of the location of the boundary line.
For example, in Hirshfield, the court noted,
“Both the Schwartzes and Hirschfields assumed that the chain link fence marked their
property lines.”18 Encroachers are in an even
stronger position to show innocence if they
relied on statements by their sellers about
the location of the boundary line.19
The element of innocence is subjective
and requires that the encroacher believe that
the legal owner consents to the encroachment or that the encroacher owns or has
acquired a prescriptive right in the land. As
stated by the California Supreme Court: “To
be wilful the defendant must not only know
that he is building on the plaintiff’s land, but
act without a good faith belief that he has a
right to do so.”20
Even if the encroachment is negligent, a
doctrine of comparative negligence applies.
For instance in Christensen v. Tucker, the
encroacher was thought by the trial court to
have been negligent in relying on his seller’s
statements regarding the position of the
boundary line. The court of appeal remanded
for the trial court to consider, among other
things, whether that negligence was the “sole
proximate cause of the encroachment.”21 If
the landowners’ conduct “also contributes to
the situation” then the encroacher’s negligence does not bar the court from permitting
the encroachment to remain after balancing
hardships. In Christensen, the landowner
complained that the encroacher had not
obtained a survey before building an
encroaching garage, wall, and badminton
court, but then neither had the landowner
until after the encroachments had been in
place for several years. This scenario could
satisfy the requirement of “innocence.”
The classic scenario involving bad intent
is continuing to build the encroachment after
receiving the neighbor’s complaint. For
instance, in Morgan v. Veach,22 the encroacher
disregarded complaints from the neighbors
and a letter from one of their attorneys. (The
encroachment actually occurred into the
required setback area, not onto a neighbor’s
land.) When there is bad intent, the courts
must grant an injunction requiring removal
of the improvements. The court in Morgan
held that “relief by way of a mandatory
injunction will not be denied on the ground
that the loss caused by it will be disproportionate to the good accomplished, where it
appears that the defendant acted with a full
knowledge of the complainant’s rights and
with an understanding of the consequences
which might ensue.”23
Assuming that the encroacher is innocent,
or at least not willful or solely negligent, the
court proceeds to balance the hardships that
would result from enjoining the encroachment
against the hardships that would be engendered by denying the injunction and recognizing an equitable easement for the encroachment to remain upon some payment of
compensation.The courts exercise this discretion to create the least amount of hardship.
If the landowner would suffer more detriment
from permitting the encroachment to remain
than the encroacher could suffer if it were
enjoined, then the encroachment must be
removed.24
If evidence is introduced on the issue, the
court must make findings regarding the balancing of hardships.25 Sometimes, courts take
judicial notice in lieu of evidence. A court may,
for instance, take judicial notice of the fact
that removal of the porch pillar, gas pipes and
meters, roof eaves, and other structures would
involve considerable expense as well as disfigurement of a house.26 The encroacher can
introduce evidence of the expense of moving
the encroachments.27 The encroacher can
also show that the loss of the encroachment—
such as a driveway encroachment28 or sewer
pipe29—would hinder the use of the property.
In recent cases courts have taken this tack.
For example, in Hirshfield, while the cost of
removing the encroachment was not introduced into evidence, the landowners presented no credible evidence of any imminent
plans to develop the encroached-upon portion
of the yard. Therefore, the court, in essence,
took judicial notice that a sand trap and
equipment for a waterfall and swimming
pool would be expensive to relocate. In contrast, in Harrison, the court in effect took judicial notice that the cost of removal would be
relatively low when it ordered the encroacher
to remove her landscaping and woodshed, following the rule established by Silacci and
Mehdizadeh. In Kapner, the encroacher did
not present any evidence about the cost of his
improvements, but the landowner stipulated
that the encroachments could remain until the
land was needed, and the court’s balancing did
not extend beyond requiring the encroacher
to accept the offer by the landowner of a
terminable easement. Kapner does not state
if or how the judgment would have differed
had the landowner not offered an easement.
The lesson here is that landowners may be
clever to offer an easement that is less generous than what the court has power to
award.
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Limits on Equitable Easements
When the court grants an equitable easement, the encroacher pays compensation.
(By contrast, persons who obtain prescriptive
easements need not pay any compensation.)
Generally, the payment ordered by the trial
courts in the reported opinions is modest,
reflecting the speculative nature of valuing a
small portion of a larger lot. As one court
stated, the judgment permitting the encroachment to remain upon “payment of $1,000,
apparently was an act of grace toward the
defendants.”30 Some courts, like the Hirshfield
court, have relied on appraisals of the severed
portions of land. It appears that the appraisals
probably cost as much as or more than the
appraised value of the land.31
The equitable easement granted to the
encroacher is generally for a terminable
period, differentiating it from a fee interest.
The courts have not, however, set forth a
rule regarding when the easement should terminate. Several cases hold that the easement
extends for the life of the building.32 Or it may
terminate upon abandonment by the encroacher.33 Or the easement may terminate
when the landowner needs the land back.34
Or, as in Hirshfield, it may terminate when the
encroacher transfers the property, a result
that probably applies best to the facts in that
case in which the encroachments were priLos Angeles Lawyer January 2005 43
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marily aesthetic luxury items that were not
necessary to the property.35
The courts still need to reach a consensus
on the issue of whether the statute of limitations ever bars a landowner from recovering
property subject to a substantial encroachment. There are two inconsistent statutes of
limitation that arguably apply. One view,
espoused in Field-Escandon v. DeMann and
a recent unpublished opinion, is that if the
encroachment is a “permanent” trespass or
nuisance, such as a building or other substantial structure, then a plaintiff must file an
action for damages or injunctive relief within
three years after the structure is completed.36
The opposing view, applied in Harrison, is
that the statute of limitations for the recovery of real property never expires unless and
until the encroacher can establish a prescriptive easement or adverse possession.37
There are statutes and reported opinions supporting both positions, so the two cannot be
reconciled. If the three-year statute of limitations applies, many more encroachments
will be permitted to remain, and the issue of
equitable balancing will not be reached in
those cases. If the unlimited statute of limitations applies, then equitable balancing will
need to be considered.
What is clear is that the judgments rendered in Hirshfield, Kapner, and Harrison
modified the bright-line rule that the
landowner wins and the encroacher loses.
The problem with that simple test was that
it led to some landowners threatening their
neighbors with forced removal of minor
encroachments at great expense or other burden. Typically, these discrepancies between
record title and the location of improvements
are not even discovered until a survey is commissioned, such as in connection with a home
remodel. While many courts will continue
to summarily order the removal of encroaching fences and ordinary landscaping, it
appears that more vital improvements, like
utilities and driveways, and more expensive
improvements, like swimming pools and perhaps even privacy hedges, will be permitted
to remain for a time on payment of some,
usually modest, compensation. These decisions evidencing the court’s effort to devise a
compromise, as opposed to a winner-takesall outcome, should also serve to encourage
neighbors to achieve a reasonable resolution
between themselves.
■
1
WILLIAM SHAKESPEARE, HAMLET act 4, sc. 4.
Silacci v. Abramson, 45 Cal. App. 4th 558 (1996);
Mehdizadeh v. Mincer, 46 Cal. App. 4th 1296 (1996).
3 Id.
4 Bryant v. Blevins, 9 Cal. 4th 47 (1994).
5 But see Warsaw v. Chicago Metallic Ceilings, Inc., 35
Cal. 3d 564, 575 (1984) (approving trial court’s judgment granting 25-by-650-foot prescriptive easement for
access along adjacent edge of landowner’s lot).
2
6
Kapner v. Meadlowlark Ranch Ass’n, 116 Cal. App.
4th 1182, 1186 (2004) (forcing encroacher to sign
agreement that all encroaching portions of driveway,
gate, and perimeter fence could remain until owner
needed land); Hirshfield v. Schwartz, 91 Cal. App.
4th 749, 756 (2001) (All the encroaching portions of
block wall, sand trap, underground water and electric
lines, and motors that run waterfalls and swimming
pool could remain until property transferred.); Harrison
v. Welch, 116 Cal. App. 4th 1086 (2004) (Underground
sprinkler lines could remain, but not surface landscaping and woodshed.).
7 Civil Code §1007 provides: “Occupancy for the
period prescribed by the Code of Civil Procedure as sufficient to bar any action for the recovery of the property confers a title thereto, denominated a title by prescription, which is sufficient against all, but no
possession by any person, firm or corporation no matter how long continued of any land, water, water right,
easement, or other property whatsoever…dedicated
to or owned by the state or any public entity, shall ever
ripen into any title, interest or right against the owner
thereof.”
8 11 B. WITKIN, SUMMARY OF CAL. LAW, §185 (9th ed.
1990). See also Liker v. The Foundation for the Preservation of Mt. Helix Nature Theater, No. D041091 (Cal.
App., 4th Dist., June 24, 2004) (unpublished) (granting prescriptive easement for residential driveway and
carport over public land).
9 For more detail, see Mark Share, Don’t Fence Me Out,
LOS ANGELES LAWYER, Jan. 1997, at 30.
10 CIV. CODE §1007; Gilardi v. Hallam, 30 Cal. 3d 317,
321 (1981). See also Young v. Brown, No. G031914
(Cal. App., 4th Dist., June 21, 2004) (unpublished)
(Encroacher successfully used visual assessment theory
to establish payment of taxes in adverse possession
claim over portion of unimproved lot.).
11 Warsaw v. Chicago Metallic Ceilings, Inc., 35 Cal.
3d 564, 570 (1984) (prescriptive easement for driveway); Raab v. Casper, 51 Cal. App. 3d 866, 878 (distinguishing adverse possession claims for landscaping
from prescriptive easement claims for driveways and
utility lines).
12 Bryant v. Blevins, 9 Cal. 4th 47, 50 (1996).
13 Noronha v. Stewart, 199 Cal. App. 3d 485 (1988)
(irrevocable license).
14 Strodel v. Wilcox, 137 Cal. App. 2d 781, 785 (1955).
15 See Christensen v. Tucker, 114 Cal. App. 2d 554,
562-563 (1952).
16 Id. at 562.
17 Baglione v. Leue, 160 Cal. App. 2d 731, 734 (1958)
(affirming judgment granting landowner damages in lieu
of injunction to remove overhanging eaves plus compensation for easement).
18 Hirshfield v. Schwartz, 91 Cal. App. 4th 749, 755
(2001).
19 Baglione, 160 Cal. App. 2d at 735.
20 Brown Derby Hollywood Corp. v. Hatton, 61 Cal.
2d 855, 859 (1964) (remanding for trial court to determine, based on conflicting evidence, whether tenant’s
encroachment into other tenant’s parking lot was innocent).
21 Christensen v. Tucker, 114 Cal. App. 2d 554, 564
(1952).
22 Morgan v. Veach, 59 Cal. App. 2d 682 (1943).
23 Id. at 690 (citations omitted); see also Agmar v.
Solomon, 87 Cal. App. 127, 142 (1927) (affirming
injunction to move small apartment building approximately four inches at cost of $1,500 to $2,000 upheld
where reasonable person would have known that new
building encroached).
24 Bennett v. Lew, 151 Cal. App. 3d 1177, 1184-85
(1984) (preliminary injunction ordering removal of
boundary fence).
25 Posey v. Leavitt, 229 Cal. App. 3d 1236, 1249
(1991) (remanding to trial court to make findings
regarding deck extension at condominium).
26 Dolske v. Gormley, 58 Cal. 2d 513, 520 (1962).
27 D’Andrea v. Pringle, 243 Cal. App. 2d 689, 694-95
(1966) (Encroacher testified as to costs of removing
encroachments.); Baglione v. Leue, 160 Cal. App. 2d
731, 733 (1958) (evidence received as to costs to
remove overhanging eaves).
28 Miller v. Johnston, 270 Cal. App. 2d 289, 307
(1969).
29 Field-Escandon v. DeMann, 204 Cal. App. 3d 228,
238-39 (1988) (landowner failed to introduce evidence of alternative route for sewer pipe).
30 Morgan v. Veach, 59 Cal. App. 2d 682, 694 (1943).
31 Oertel v. Copley, 152 Cal. App. 2d 287, 290 (1957)
(“The report of the appraiser filed herein was that the
market value of the portion of Lot A enclosed by
defendant’s fence, on September 15, 1954, was the sum
of $30; that the severance or consequential damage by
reason of the severance or separation of said portion
of Lot A from the remainder of Lot A would be nil.”).
32 Dolske, 58 Cal. 2d at 521; D’Andrea, 243 Cal.
App. 2d at 691-92; Baglione, 160 Cal. App. 2d at
735.
33 Christensen v. Tucker, 114 Cal. App. 2d 554, 563
(1952) (disapproving trial court’s grant of fee interest).
34 Kapner v. Meadlowlark Ranch Ass’n, 116 Cal. App.
4th 1182, 1186 (2004) (requiring encroacher to sign
an agreement permitting the encroachments to remain,
subject to their removal should the need arise).
35 Hirshfield v. Schwartz, 91 Cal. App. 4th 749, 757
(2001).
36 C ODE C IV . P ROC . §338(b); Field-Escandon v.
DeMann, 204 Cal. App. 3d 228, 233 (1988); Troeger
v. Fink, 166 Cal. App. 2d 22, 26 (1958). See also
Axford v. Sinsheimer, 2004 Cal. App. LEXIS 6710
(2004) (unpublished).
37 CODE CIV. PROC. §§318, 321; Harrison v. Welch, 116
Cal. App. 4th 1086, 1098 (2004).
By the Book
REVIEWED BY GORDON ENG
Matthew Bender Practice Guide:
California Landlord-Tenant Litigation
By Andrew Westley and Michael J. Saltz
Matthew Bender, 2003
$140
This single-volume, loose-leaf binder provides
a straightforward explanation of the issues
facing landlords and tenants when litigation
must be considered. A number of useful checklists are designed to give practitioners a quick
preview of the relevant factors that must be considered before selecting and pursuing a course of action.
Much of the book’s discussion and analysis focus on either the landlord’s or the tenant’s perspective, and as a result there are separate
checklists for landlord and tenant clients. The opposing viewpoints
allow attorneys to advise clients according to their situation. The checklists are supported with substantive discussions of landlord and tenant rights, defenses, and strategies. Citations of case law and statutory law provide excellent starting points for the reader to conduct
additional research. These substantive discussions, for the most part,
follow the order set in the checklists. The authors also provide a variety of sample forms, which cross-reference to source materials. The
cross-references are useful when a practitioner is trying to verify
that the form is up-to-date or is comparing forms from different
sources. Caution is appropriate when using the forms, but they provide a fine starting point and can be supplemented to accommodate
local rules or the particulars of a given case.
The book begins with a discussion about how to interview a
client and discover what the client’s goal is for the resolution of the
issue. In this initial step in the process various fee arrangements to
negotiate with the client are also raised.
The book proceeds through a discussion of the various rights of
landlords and tenants, when they can be asserted, and the consequences
of prevailing in the exercise of these rights. For example, the relevance
of dependent and independent covenants is highlighted. Many landlords often learn through experience that the tenant’s covenant to pay
rent and the landlord’s warranty of habitability are dependent, which
means that the tenant does not have to pay rent if the premises are
not habitable. Similarly, a legal analysis of a dispute between a landlord and a tenant often will focus on determining if there is a breach
of a condition or a covenant.
The authors describe the choices of remedies available for a given
breach and the procedural steps necessary to pursue these remedies.
For example, possession of the premises may be prosecuted through
an unlawful detainer action. This is a summary proceeding that may
result in possession more quickly than a case based on a quiet title
action. The speed of an unlawful detainer action, however, comes at
the cost of having to pursue damages in a separate action.
Coverage of the end of a case includes a discussion of enforcement,
removal of personal property, and disposition of the security deposit.
For example, the book describes what a landlord actually does to
remove the tenant if an unlawful detainer action is successful. After
reading this book a practitioner will likely feel prepared to confront
landlord-tenant litigation issues and to discuss them with clients.
Caveats
However, this book is only one volume, and excluded details subtract
from the book’s nuts-and-bolts usefulness. For example, how does one
contact the sheriff’s office to serve an order to vacate, and how
much will this cost? These mundane details are often of great significance to the attorney who is prosecuting a landlord-tenant case.
Further, the book focuses on the steps involved in enforcing either landlord or tenant rights. A welcome complement would include discussion of the defenses that may be asserted by landlords or tenants,
including technical defenses to pleadings and service of process that
can delay the prosecution of a case. Often, these measures are the best
weapon of defense counsel, along with such substantive defenses as
bankruptcy and retaliatory eviction.
This book, like many other resources on the subject, discusses residential and commercial landlord-tenant issues. A larger body of
statutory and case law pertains to residential leases, and the authors
focus on residential law and note how commercial leases differ. For
a commercial lease practitioner, this method of presentation can be
distracting. On the other hand, a significant amount of overlap
would result if one book for commercial and one for residential
landlord-tenant litigation were published.
It is helpful that there is a general discussion of rent control ordinances. For many practitioners rent control law is mysterious and difficult to research. At this time, rent control ordinances are limited to
a handful of localities and cover only residential leases. However, in
order to provide a better resource for readers who want a single-source
guide for landlord-tenant litigation, it would be very helpful if the
authors explored the rights and obligations of landlords and tenants
under each of the specific rent control ordinances. This information
would be of critical significance to the handling of a case if a rent control ordinance is applicable.
A topic somewhat related to rent control is public housing and subsidized housing. This is another area in which practitioners need guidance on the rules established by statutory regimes. Unfortunately, this
area is not covered. Readers should also be aware that the book does
not cover marina leases, RV park leases, and mobile home park
leases. These relationships are subject to their own statutory and case
law framework. The authors do note, however, that they lack the space
needed to cover these relationships.
In general, however, the book’s easy-to-follow format and wealth
of practical advice in pursuing a basic landlord-tenant case should be
welcome to many California attorneys.
■
Gordon Eng is a real estate and business law practitioner located in Torrance.
He is a member of the Executive Committee of the Real Property Law Section
of the State Bar of California.
Computer Counselor
BY CAROLE LEVITT AND MARK ROSCH
Addressing Web Browser Security
THROUGHOUT 2004, reports of the security vulnerabilities of ways that many users may not expect. Most computer users know
Microsoft’s Internet Explorer (IE) have made Internet users give that viruses and trojans may gain access to a computer as attachments
more consideration to their Web browser. These vulnerabilities can to e-mail messages. This form of attack remains a serious problem,
allow hackers to obtain sensitive information from a user’s computer. but at least users are generally familiar with the protection offered
While all users of Web browsers are vulnerable to identity theft, by antivirus software and the simple act of deleting suspicious attachattorneys need to give additional consideration to the security of the ments. In November, however, a new vulnerability was identified that
may be exploited when a user does nothing more than visit a Web page.
confidential client information on their computers.
Until recently, most Internet users did not give much thought to Malicious code that downloads with the page can make the user’s comwhat Web browser they used. In fact, for the majority of Internet users, puter execute whatever instructions the hacker wants.
Secunia.com, a Danish security firm, announced it had assigned
“Web browser” and “IE” were essentially interchangeable. Since its
introduction in 1995, IE has surged ahead of the
pack to become the most used browser. The IE
browser is closely integrated with Microsoft’s
Currently, the most popular alternative browser is Firefox,
Windows operating systems and as a result
comes already installed on the vast majority of
computers sold. The most used browser is not
available as a free download from the Mozilla Foundation.
necessarily the most popular, however.
Explorer is not the only, nor the first, Web
browser. The graphical Web browser was first
developed by the National Center for Supercomputer Applications its highest level of alert to rectifying the vulnerability, because the code
(NCSA) at the University of Illinois in 1993. The following year, a that exploits the vulnerability is available to hackers around the
number of key members of the development team left to produce a world. Explorer is not the only browser that contains vulnerabilities,
but ironically its prominence makes it the obvious choice for hackcommercial version, which they dubbed Netscape Navigator.
In response, Microsoft launched IE, and in December 2002, ers to exploit. An article on Microsoft’s own moneycentral Web site
OneStat, a provider of Internet usage statistics, reported that IE had titled “Keep Thieves out of Your Bank Account” even suggests: “To
a total global usage share of 95 percent, while the global usage share thwart online thieves, consumers might want to install…browsers
of Netscape was 3 percent. That lopsided percentage held until news [other than Internet Explorer], such as Mozilla or Opera, for finanof IE’s vulnerabilities began to make headlines. By November 2004, cial transactions.”
Currently, the most popular alternative browser is Firefox, availWebsidestory, another provider of Internet traffic statistics, reported
that IE had suffered five straight months of declining use and that its able as a free download from the Mozilla Foundation (www.mozilla
market share had slipped from 95.5 percent in June 2004 to 92.9 per- .org). Versions of the browser are available for Windows, Apple, and
cent in October. The primary recipients of Microsoft’s lost market share Linux operating systems. Mozilla was the original code name for the
were the open source browser Firefox (older versions of which are browser that became Netscape Navigator. In January 1998, Netscape
known as Mozilla) and Netscape Navigator. In October, 6 percent of Corporation announced that it would make the source code for the
Internet users were browsing with Navigator, Firefox, or Mozilla, Netscape browser open and freely available to software developers
according to Websidestory. The other 1 percent of browser usage was worldwide. Since then, volunteer software developers have refined that
split primarily between Opera and Safari, with other browsers not reg- original code to create Mozilla (and now Firefox). The developers’
goal with Firefox was to create a browser that would not take up large
istering a measurable percentage.
In the first 10 months of 2004, the U.S. Computer Emergency amounts of hard disk space, would be compatible with the most numReadiness Team (US-CERT)—a partnership of the U.S. Department ber of Web pages, and would open pages quickly. Firefox also feaof Homeland Security, other public entities, and the private sector— tures pop-up and image blocking, further speeding the load time of
documented 10 vulnerabilities in Explorer. (For more information, pages that users want to see. A simple Google search box is integrated
visit www.kb.cert.org/vuls.) According to US-CERT, a remote user may into the browser, and users can add other search engines. Firefox can
exploit IE’s vulnerabilities to access files on a computer, including those also help users keep up with news via a Latest Headlines menu that
with confidential or personal information. The hacker could exploit is located beneath the browser’s control buttons. The menu contains
other vulnerabilities and hijack someone’s computer to send spam mes- headlines and links to current news stories provided by the BBC. There
sages and attack Web sites. It is even possible for the hacker to wipe is also a companion e-mail reader called Thunderbird. Both applisomeone’s hard drive clean. The move away from IE is largely attributed to the identification of these vulnerabilities.
Carole Levitt and Mark Rosch are principals of Internet For Lawyers (www.
These vulnerabilities also allow malicious code to function in netforlawyers.com).
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cations can be downloaded as one integrated
piece in the Mozilla suite.
Opera, a longtime favorite browser of
many savvy Internet users, is also available as
a free download (www.opera.com). Opera
offers a suite of functions, including e-mail and
chat applications, an address book, and the
ability to store quick notes without leaving the
browser. One downside is the banner advertisements displayed at the top of the free version’s window. An ad-free version is available
for $39. One welcome feature of Opera is that
it gives users the option of starting where
they ended their last Internet surfing session,
starting with a previously saved session, opening to a blank browser window, or starting
with a familiar home page. Despite all of
these features, the total installation size of version 7.5.4 is only 5.5 MB. Opera is available
for Windows, Apple, Linux, and OS/2, select
handheld computers, and Web-enabled cell
phones.
In June 2003, Microsoft announced that
it would no longer be developing new versions
of Internet Explorer for Apple operating systems. Coincidentally, this was not long after
Apple had announced its Safari Web browser.
Some of the refinements Apple engineers
added to the Web browser feature set include
built-in Google searching and snap back,
which allows users to return to the point in
their surfing session where they last typed a
URL or selected a bookmark—useful if one
has followed numerous links from one page
to another while online. Safari also offers
pop-up blocking, tabbed browsing, and
tabbed bookmarks. Safari works only on
Apple’s OS X operating systems and is available as a free download at the Apple Web site.
Microsoft, however, still has an overwhelming share of the browser market. While
some alternative Web browsers also have
some known vulnerabilities, they are usually
less critical and easy to patch. Additionally,
because the non-Microsoft browsers are not
integrated into the Windows operating system—as IE is—a malicious coder has to work
harder to use them to access the inner workings of a user’s computer. In fact, even as
Microsoft works to make its browser more
secure, there are rumors that search engine
powerhouse Google will soon enter the fray
with a Web browser of its own. In October
2004 news sites reported that America Online
was planning to release its own browser,
which would be based on IE. It was also
reported that Netscape founder Marc Andreessen felt that this renewed interest in
browser technology could reignite the browser
wars of the 1990s and, in his opinion, reinvigorate browser development. If Andreessen
is right, which he has been before, users may
have even more Web browser options to
choose from.
■
Classifieds
ciation? Log on to www.lacba.org and join today.
Consultants/Experts
NEED AN EXPERT WITNESS, legal consultant, arbitrator, mediator, private judge, attorney who outsources, investigator, or evidence specialist? Make
your job easier by visiting www.expert4law.org.
Sponsored by the Los Angeles County Bar Association, expert4law—the Legal Marketplace is a comprehensive online service for you to find exactly
the experts you need.
DIRECTORY OF EXPERTS & CONSULTANTS COMING
SOON! Watch your mail for the 2005 edition of the
Los Angeles County Bar Association’s Southern
California Directory of Experts & Consultants—FREE
to LACBA members. This comprehensive directory
contains more than 2,000 expert witness and consultants listings in nearly 500 categories of expertise—plus litigation service providers, trial support
services, dispute resolution professionals, the
Lawyer-to-Lawyer Consultants Network, and more.
Not a member of the Los Angeles County Bar Asso-
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Mediation Training
THE 30-HOUR BASIC MEDIATION TRAINING PROGRAM is the ideal introductory program for those
persons wanting to become mediators or incorporate conflict resolution skills into their present professions or lives and for other professionals who
want to gain new techniques to de-escalate anger
and deal with conflict positively. The mediation
training curriculum covers convening, confidentiality, mediation styles, the mediation process, setting
the agenda, breaking impasse, the importance of
the opening statement, communication techniques,
re-framing, listening techniques, and questioning.
The course meets the requirements of the California
Dispute Resolutions Programs Act of 1998 and is
mandatory for those persons wanting to join the
LA Superior Court Panel. Classes are scheduled
throughout the year at locations and times to suit
you. For information on the basic training and other
mediation and conflict resolution training, please
contact our DRS Training Coordinator at 213-8966441 or visit our Web site at www.lacba.org.
Office Space
SOUTHERN CALIFORNIA. FREE. Executive Suite
Offices Guide. Eighty-page booklet lists over 150
buildings in Los Angeles, Orange, San Diego Counties and the Inland Empire that offer executive
suites. Guide includes office prices, amenities
offered, photos, maps, and contacts. Mailed the
same day ordered. Call 24 hours: (800) 722-5622.
PLEASE SUPPORT THOSE THAT SUPPORT THE LOS ANGELES COUNTY BAR ASSOCIATION!
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Index to Advertisers
Alexander’s Legal Seminars & Publications, p. 22
Tel. 888-231-7154
Nextel Communications, p. 1
Tel. 866-805-9890 reference MLSAB www.nextel.com/lacba
Aon Direct Administrators/LACBA Professional Liability, p. 5
Tel. 800-634-9177 www.attorneys-advantage.com
Noriega Clinics, p. 49
Tel. 323-728-8268
AT&T Wireless, Inside Back Cover
Tel. 213-253-2400 www.attwireless.com
North American Title Company, p. 2
Tel. 818-240-4912 www.natic.com
Law Office of Donald P. Brigham, p. 4
Tel. 949-206-1661 e-mail: [email protected]
Old Republic Exchange Co., p. 19
Tel. 800-738-1031 www.orexco1031.com
Commerce Escrow Company, p. 45
Tel. 213-484-0855 www.comescrow.com
One Legal, Inc., p. 44
Tel. 415-491-0606 www.onelegal.com
DataChasers.com, p. 43
Tel. 909-780-7892 www.datachasersinc.com
Ostrove, Krantz & Ostrove, p. 6
Tel. 323-939-3400 www.lawyers.com/ok&olaw
Deadlines On Demand, p. 9
Tel. 888-363-5522 www.deadlines.com
Overland Pacific & Cutler, Inc., p. 17
Tel. 562-304-2000 www.opcservices.com
Greg David Derin, p. 44
Tel. 310-552-1062 www.derin.com
Pacific Construction Consultants, Inc. (PCCI), p. 35
Tel. 916-638-4848 www.pcciconsultants.com
Diversified Risk Management, Inc., p. 44
Tel. 800-810-9508 www.diversifiedriskmanagement.com
Pacific Construction Management, Inc., p. 37
Tel. 800-576-7264 www.pcmi-experts.com
E. L. Evans & Associates, p. 48
Tel. 310-559-4005
Pacific Health & Safety Consulting, Inc., p. 17
Tel. 949-253-4065 www.phsc-web.com
Exchange Resources and Foreclosure Resources, p. 22
Tel. 877-799-1031 www.exchangeresources.net
Quo Jure Corporation, p. 16
Tel. 800-843-0660 www.quojure.com
ForensisGroup Inc., p. 37
Tel. 626-795-5000 www.forensisgroup.com
Jan Raymond, p. 22
Fragomen, Del Rey, Bernsen & Loewy, LLP, p. 23
Tel. 310-820-3322 www.fragomen.com
Ronsin Legal, p. 16
Tel. 323-526-7300 www.rosinlegal.com
Samuel K. Freshman, p. 38
Sales Tax Resource Group, p. 48
Tel. 714-377-2600 www.salestaxresource.com
G. L. Howard CPA, p. 44
Sanli Pastore & Hill, Inc., p. 16
Tel. 310-571-3400 www.sphvalue.com
Gibbs, Giden, Locher & Turner, LLP, p. 35
Tel. 310-552-3400 www.GGLT.com
Steven R. Sauer APC, p. 8
Steven L. Gleitman, Esq., p. 4
Tel. 310-553-5080
Anita Rae Shapiro, p. 48
Tel. 714-529-0415 www.adr-shapiro.com
Higgins, Marcus & Lovett, Inc., p. 17
Tel. 213-617-7775 www.hmlinc.com
Spiegel Property Damage Consulting and Forensics, p. 38
Tel. 800-266-8988 www.propertydamageinspections.com
Jack Trimarco & Associates Polygraph, Inc., p. 38
Tel. 310-247-2637 www.behaveanalysis.com
Stonefield Josephson, Inc., p. 11
Tel. 866-225-4511 www.sjaccounting.com
Jeffrey Kichaven, p. 6
Tel. 310-556-1444 www.jeffkichaven.com
Taylor, Simonson & Winter LLP, p. 38
Tel. 909-625-4785 www.tsw-lawyers.com
Kudrave Arhitects, p. 36
ULTIMO Organization, Inc., p. 39
Tel. 714-560-8999 www.geotechnical.com
Lawyers’ Mutual Insurance Co., p. 7
Tel. 800-252-2045 www.lawyersmutual.com
Vision Sciences Research Corporation, p. 43
Tel. 925-837-2083 www.vsrc.net
Lexis Publishing, Inside Front Cover, p. 13
www.lexis.com
Temmy Walker, Inc., p. 6
Tel. 818-760-3355
Lyndehurst, Ltd., p. 36
Law Offices of Alan D. Wallace, p. 8
Tel. 818-501-0133 www.expertwitnessre.com
Arthur Mazirow, p. 16
Washington Mutual/Ted Burkow, p. 4
Tel. 310-777-2327 www.wamuloans.com/ted.burkow
MCLE4LAWYERS.COM, p. 37
Tel. 310-552-5382 www.MCLEforlawyers.com
West Group, Back Cover
Tel. 800-762-5272 www.westgroup.com
MP Group, p. 35
Tel. 310-390-4936 www.mpgroup.com
Witkin & Eisinger, LLC, p. 43
Tel. 310-670-1500
National Properties Group, p. 22
Tel. 310-516-0022
CLE Preview
2005 Nuts & Bolts: Basic Litigation Skills
ON THURSDAY THROUGH SATURDAY, JANUARY 13 TO 15, the Los Angeles County Bar Association
will hold its highly respected nuts and bolts program on essential tools for lawyers. This
conference gives attorneys the skills they need to be effective litigators in state and federal
courts in Los Angeles. Seminars focus on the typical stages of a case and feature as speakers
many of the best lawyers, professors, and judges in the community. Participants will also
obtain a form file of sample pleadings. On Thursday, sessions will cover drafting complaints
and responsive pleadings, substance abuse and the legal profession, access to the courts for
people with disabilities, and the practical aspects of professional responsibility (including
issues of disqualification, discipline, and defense to malpractice claims). On Friday, the
conference will address law and motion, mediation, arbitration as an alternative to litigation,
and advanced deposition techniques (parts 1 and 2). On Saturday, participants will hear from
leading judges and attorneys of the community regarding written discovery and discovery
motions, the iTap-Introductory Trial Advocacy Project (which covers such courtroom basics as
examining witnesses, observing courtroom protocol, organizing and presenting exhibits,
laying evidentiary foundations, making objections, and using demonstrative evidence), and
writing in plain English. This program will take place at the LACBA/Lexis Publishing
Conference Center, 281 South Figueroa Street, Downtown. Continental breakfast will be served
each day starting at 8 A.M., with the program continuing (with a lunch break) until 5 P.M on
Thursday and Friday and until 4:15 P.M. on Saturday. The registration code number is 008792.
Space is limited, and advance payment is required to guarantee seating. This conference also
features a special “become a LACBA member discount” that includes the 2005 Nuts & Bolts
course, a 2005 LACBA membership, and a 2005 CLE+PLUS card, all for $670.
$455—CLE+PLUS members
$505—LACBA Barristers
$585—LACBA members (a 2005 CLE+PLUS card is included)
$930—all others
19.5 CLE hours, including 1.5 hours of ethics, 1 hour of prevention of substance abuse, and
1 hour of elimination of bias
ETHICS: A VIEW FROM
THE BENCH
ON THURSDAY, JANUARY 20, the
Barristers will present a seminar
featuring Judges Dennis Perluss and
Fumiko Wasserman on ethics. For those
who need ethics credit for their
compliance period, this is a great
opportunity to obtain an hour. The
program will take place at the
LACBA/Lexis Publishing Conference
Center, 281 South Figueroa Street,
Downtown. On-site registration and the
reception will begin at 11:45 A.M., with
lunch at noon and the program
continuing from 12:30 to 1:30 P.M. The
registration code number is 008857.
CLE+PLUS members may attend for free
($15 meal not included). The prices
below include the meal.
$25—Barristers
$30—other LACBA members
$40—all others
1 CLE hour of ethics
The Bench Meets the Bar
ON FRIDAY, JANUARY 28, the Litigation Section will hold its annual luncheon for federal and state court judges and justices. At this luncheon,
Judge Consuelo B. Marshall and Judge Robert A. Dukes will provide updates on issues of current concern to the courts. The Litigation Section
will also award its 8th Annual Clerk of the Year Award to a federal and a state courtroom clerk. The luncheon will take place at the Omni Los
Angeles Hotel, 251 South Olive Street, Downtown. On-site registration will begin at 11:30 A.M., with the program continuing from noon to 1:30
P.M. The registration code number is 008882. Judges and justices may attend for free. CLE+PLUS members may attend for free ($15 meal not
included). The prices below include the meal.
$60—Litigation Section members
$80—all others
$600—law firm/group table of 10 (8 firm or group members and 2 judicial officers)
1 CLE hour
The Los Angeles County Bar Association is a State Bar of California MCLE approved provider. To register for the programs listed
on this page, please call the Member Service Department at (213) 896-6560 or visit the Association Web site at http://calendar.lacba.org/.
For a full listing of this month’s Association programs, please consult the County Bar Update.
Closing Argument
BY JACK R. GOETZ
What Lawyers Can Contribute through Jury Participation
WITH OUR LEGAL TRAINING and experience, many of us lawyers aspire law that the jury had posed by explaining what might normally hapto jury service. However, because trial lawyers are often reluctant to pen in the courtroom during that period.
The questions involved terms used in the relevant code sections.
see other lawyers serve, they often excuse us through peremptory challenges. I personally had been excluded in a dozen previous summonses Some jurors wondered if an arresting officer who initiated contact with
in my lifetime, so I was surprised to find myself chosen as a juror on the defendant was considered an illegal “pickup” under the code, just
a three-day misdemeanor trial in Los Angeles County in July 2004. as another member of the public would be. And some jurors had quesI debated about how I should behave as a juror. Did I have an oblig- tions about the defendant’s version that he only agreed to drive the
ation to act like a lawyer? Did I have an obligation not to act like a passenger for “gas money.” Would that be considered driving for a
lawyer? Could I even separate who I was from my professional train- “rate” as defined by the code? We profitably used the time it took to
ing? I ultimately reasoned that doctors or software developers serv- receive answers to these questions by posing what-if questions on how
ing on juries could be no less than themselves, and so would I. I should participate
fully in the process based upon my legal
I reasoned that doctors or software developers serving on juries could
background and experience, as long as it
did not conflict with California law, the
judge, or jury instructions.
be no less than themselves, and so would I.
The defendant was alleged to have operated a “bandit” taxi within Los Angeles.
Los Angeles municipal codes require that
both the vehicle and the driver of an “automobile for hire” be the judge would respond and narrowing our points of contention.
Third, a lawyer’s understanding of the process and the various tools
licensed by the city. At the beginning of deliberations, I was chosen
that are used to help understand testimony and jury instructions
to be jury foreperson.
can aid a jury in arriving at the proper verdict. It was clear at the end
A Lawyer’s Role
of the fifth hour of deliberations that jurors had different memories
Through my experience on this jury, I became convinced that lawyers of the testimony. A verdict was impossible unless we could agree on
do have a role to play while serving on juries—in at least three ways. our recollections. I took this to be a good sign because I knew I could
First, lawyers can help lay people on the jury focus on the actual issues ask that the testimony be read back. It was not clear that without a
that must be decided, eliminating the irrelevant from discussion and lawyer as foreperson jurors would have understood this option.
ensuring that the law and jury instructions are what govern the case.
At the outset of the deliberations, I was able to narrow the prima facie The Verdict
case to the relevant dimensions. For example, I determined it was Since it was the end of the court workday, the judge encouraged us
important to distinguish “reasonable doubt” from “all possible to end deliberations for the day, but we asked for a few more mindoubt.” I found the appropriate place in the jury instructions and utes. The rereading of testimony and the judge’s encouragement
passed it around.
seemed to galvanize the jury, but I reassured the minority who were
I had concluded that the defendant was guilty, but sensitivity to leaning toward “not guilty” not to feel pressured. We could come back
my role as foreperson delayed my expression of opinion until I was and deliberate the next day. A general groan arose, so I asked the miasked why. I returned to the case and the credibility of the defendant. nority if anything else was creating reasonable doubt. They asked some
Essentially, he maintained that he threw into his car trunk a two-way additional questions and then became satisfied. I reminded everyone
radio and business cards originally found 18 months earlier in a prior to consider that they could be polled individually, so we should not
arrest on the same charge. (The arresting officers testified they found rush back until we were comfortable with our vote. Each one agreed,
the evidence in the front seat.) I did not find it credible that an inno- and we sent a message to the judge that we were ready.
cent man would allow implements used in a prior violation to remain
The strength of our jury system is never more evident than when
anywhere in his car, and I was skeptical that an innocent man would a mixed group of citizens, who presumably wish they were elsenot repaint his car to a color other than the taxi yellow that had led where, painstakingly work through the evidence without leaving
to his original arrest. In short, the defendant’s story may have intro- anything to chance. In the final analysis, my experience and training
duced some doubt, but not a reasonable one.
were reflected in the jury verdict, and I am confident in the fairness
Second, lawyers can help reduce the anxiety most jurors feel of the result. Lawyers can serve important roles on juries, and we
about the process, helping them understand the necessity and com- should not routinely be rejected or excused.
■
plexity of each stage. I was able to relieve juror anxiety during the
delays that occurred while the judge was answering questions on the Jack R. Goetz is dean emeritus of Concord Law School.
When your association membership
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it’s an easy call to make.
Members of the Los Angeles County Bar Association can save with AT&T Wireless.
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© 2003 AT&T Wireless. All Rights Reserved. General requirements: Requires credit approval, $36 Activation Fee, annual contract, $175 cancellation fee and a compatible phone. Subject
to service terms and conditions and the calling plan brochure for the specific plan you choose. Service not available for purchase or use in all areas. May not be available with other
offers. 5% Discount: Available only to active members of associations participating in the AT&T Wireless Association Program or its predecessor. Discount is activated only when you
call the toll-free membership verification number listed above. Discount is only available on select AT&T Wireless digital calling plans and only applies to qualified charges as defined in
your association’s AT&T Wireless Services Wireless Association Agreement. It may take up to 90 days for the discount to appear on your account. Other terms, conditions and restrictions
apply—contact your association or your local AT&T Wireless Account Representative.
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© 2003 West, a Thomson business L-302391/9-03 west.thomson.com

January 2005 - Los Angeles County Bar Association

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