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TRANCAS PROPERTY OWNERS ASSOCIATION, Plaintiff and Appellant, v. B174674 COURT OF APPEAL, SECOND APPELLATE
DISTRICT, DIVISION EIGHT Filed APPEAL from
a judgment of the David P. Yaffe, Judge.
Reversed. COUNSEL Jeffer,
Mangels, Butler & Marmaro, John M. Bowman and David R. Daniels for
Plaintiff and Appellant. Jenkins
& Hogin, Christi Hogin and Gregg Kovacevich for Defendant and Respondent. Horvitz
& Levy, Barry R. Levy, Andrea M. Gauthier; Law Offices of Alan
Robert Block, Alan Robert Block and Michael N. Friedman for Real Party in
Interest and Respondent. OPINION COOPER, P.J. Involved in
litigation with developer Trancas- We hold
that the agreement, however well-intended, was invalid, because it impermissibly
attempted to abrogate the city’s zoning authority and provisions. Addressing a further issue that could well
recur, we also hold that adoption of the agreement in a closed council session
violated the Ralph M. Brown Act, Government Code section 54950 et seq. (Brown
Act), even though the agreement included a settlement of litigation.[i] For both reasons, we reverse the judgment
denying the petition of appellant Trancas Property Owners Association
(Association) for a writ of mandate to set aside the agreement. FACTS Trancas
owns approximately 35 acres of undeveloped land in the city (property),
situated upland of Efforts to
subdivide the property extend back over 20 years. Before the city’s incorporation in 1991, its
territory, including the property, was an unincorporated portion of the In 1993,
Trancas submitted proposed final subdivision maps for consideration and
approval to the city, which now had jurisdiction over the property. The city, however, refused to consider them,
asserting that the preliminary maps had temporally expired. In this regard, a tentative map generally
expires two years after its approval or conditional approval (§ 66452.6, subd.
(a)), subject to extensions by the governing body (id., subd. (e)), and to tolling during a development
moratorium (id., subds. (b),
(f)). Such expiration terminates all
proceedings under the Map Act, and precludes filing of a final map until a new
tentative map is processed. ( Trancas
petitioned the superior court for a writ of mandate, which the court granted,
finding the city’s position not well taken.
In May 1995, Division Two of this court affirmed that judgment, ruling
that a combination of an extension by the county and tolling because of
development moratoria (including one imposed by the city at its creation) had
preserved the tentative maps’ vitality to September 1993. Although
Trancas thus retained the ability to file its final maps, their approval by the
city remained forestalled by a number of factors, including questions regarding
the status of other governmental
approvals, on which the tentative maps had been conditioned. One of these was a coastal development
permit, which Trancas had obtained from the California Coastal Commission. The question arose whether that permit had
expired, under the commission’s regulations, because Trancas had failed timely
to commence development. The Coastal
Commission’s general counsel informally opined that the permit would be
considered subsisting if Trancas obtained final subdivision map approval. Plaintiff Association then brought suit for a
declaration that the coastal permit had expired. The trial court ruled against the
Association, but the Court of Appeal, Division Six, reversed. In an unpublished decision rendered The city
resisted further processing Trancas’s final maps, because of claimed failures
to satisfy tentative map conditions.
Taking issue with these contentions, in 2002 Trancas sued the city, to
enjoin it from disapproving the maps.
After unsuccessful settlement efforts, the action was reinitiated in
January 2003, but Trancas’s requests for temporary restraining order and
preliminary injunction were denied, leaving the city free to act pending trial. On Contemporaneous
with the resolution, representatives of the city and Trancas recommenced
discussions to explore settling both Trancas’s pending lawsuit and the overall
subdivision matter. On The
two-page document recited that the parties agreed to settle “the disputes
between them related to” the property, including the pending lawsuit, “as well
as all other potential disputes over the development of the property,” on the
following terms. (1) Trancas
would dedicate to the city the larger of the property’s two tracts, of
approximately 26.5 acres. (2) The city “shall approve amended or revised
final map No. 29273 to permit up to 32 units” on the roughly 8.5-acre
tract, on which 52 town houses were originally to be built. (3)
Four of the new units would be restricted for sale to low or
moderate-income families. (See, e.g.,
Health & Saf. Code, § 50093.)
(4) “The units shall be built in conformance with development
standards of City’s zoning code, except density.” On The SA
included the following salient elements.
Paragraph 1 provided: “The City
shall rescind Resolution No. 03-15 [disapproving the final maps], as it
pertains to Tract No. 29273, and said resolution shall be null and void as
to said tract.” Under
paragraph 2.1, Trancas would record a covenant, limiting development on
that smaller tract to 32 units, four of them restricted to low-to-moderate
income housing, and each to include 2,000 to 2,400 square feet, and be not more
than 28 feet high. “Any changes to the
development as a result of th[is] covenant . . . shall conform to the
City’s zoning code in effect as of the date of the recordation of said
covenant, except any limitations on density which vary from the terms of the
covenant.” With further regard to
zoning, by paragraph 3.2 the city agreed not to enact “zoning or other
ordinances applicable to the property that prohibit the construction of the
residential units depicted in the final map, as limited by the terms of the
covenant . . . .” The SA
further provided that “If necessary, the City shall further expedite the
processing of a general plan amendment” for the property. (¶ 2.3.)
Trancas would diligently satisfy all remaining conditions of the
tentative map for the smaller tract.
(¶ 2.5.) Once Trancas had
done so, and had recorded the covenant, the city engineer would certify the
final map, and the city council would approve it. (¶ 3.1.)
If, however, another agency or a court required that a revised tentative
map be filed, because of the covenant’s alteration of the development, Trancas
would speedily present such a map, in lieu of the contemplated final map. (¶ 2.6.) Finally,
with its final map Trancas would offer to dedicate the larger tract to the
city, for public recreation and open space, reserving an easement for discharge
of treated water from the smaller tract’s wastewater disposal system. (¶ 4.)
Following recording of the final map and the covenant, Trancas would
dismiss with prejudice its pending lawsuit against the city. (¶ 6.)
The agreement would not be severable.
(¶ 7.) In sum, by
the SA the city would obtain dedication of three-fourths of Trancas’s property,
a scaled-down development project, and relief from Trancas’s lawsuit concerning
the validity of final subdivision maps for a more extensive development. Trancas would obtain reinstatement of its
final map application, which would be approved once the conditions of the
tentative map were met. In addition, the
city extended guarantees that Trancas’s proposed development would not be
blocked by future zoning, or be required to comply with zoning density
restrictions of whatever age. As a
further benefit, the city would if necessary expedite amending its general plan
with respect to the development. In June
2003, the Association commenced the present case, filing a petition for writ of
mandate and complaint for declaratory relief against the city, with Trancas
named as real party in interest. The
ultimate, amended version of the pleading contained four causes of action. The first sought a writ of mandate (Code Civ.
Proc., § 1085), requiring the city to set aside its approval of the SA, on
grounds that (a) the city’s resolution disapproving the final subdivision maps
was correct and in any event final, (b) the revised development project did not
conform with the prior tentative map, (c) approval of the SA had required but
had not received review under the California Environmental Quality Act, Public
Resources Code section 21000 et seq. (CEQA), and (d) adoption of the SA in a
closed session of the city council violated the Brown Act. The petition’s third cause of action restated
and enlarged the Brown Act challenge. The
Association’s second cause of action sought a writ of mandate requiring the
city to disapprove the final maps, because the tentative maps had expired, and
because Trancas had not met numerous conditions imposed with them. In a fourth cause, for declaratory relief,
the Association sought a declaration sustaining several of its previously
alleged contentions. The trial
court denied all of the writ relief requested.
The court opined that the SA did not violate any provision of the Map
Act or the Municipal Code, nor did it constitute approval of a discretionary
project within the meaning of CEQA. As
for the Brown Act, the city council had been entitled to consider the SA in
closed session, under the litigation exception of section 54956.9. The Association was not entitled to a writ on
the second cause of action, challenging the final maps, because “The court can
find no provision of either the Subdivision Map Act or of the Malibu Municipal
Code that imposes upon the City a mandatory duty to disapprove a final tract
map.” (But see §§ 66458,
subd. (a), 66473; M.C., § 16.16.060.) The
superior court also disallowed most of the declaratory relief requested. However, the court did declare, based on the
Municipal Code, that unless Trancas recorded a final map for the modified
project that conformed to the original tentative tract map, that code would
prohibit transfer of title to any of the subdivision, until such a complying
final map was recorded. The
Association appealed from the judgment as a whole. DISCUSSION The
parties’ contentions pose a number of legal issues, involving the Map Act, the
Brown Act, CEQA, and other principles of local government and land use
law. However, we need not resolve all of
these questions, because two are independently dispositive of the appeal. First, the SA is intrinsically invalid
because it includes commitments to take or refrain from regulatory actions
regarding the zoning of Trancas’s development project, which may not lawfully
be undertaken by contract. Second, the
SA is also invalid as a municipal act because its adoption in closed city
council session violated the Brown Act.
Because of this invalidity, the Association’s further contentions under
CEQA and the Map Act are moot. 1. Retraction
of Zoning Authority. In
paragraph 3.2 of the SA, the city agreed that it would not enact “zoning or
other ordinances applicable to the property that prohibit the construction of
the residential units depicted in the final map, as limited by the terms of the
covenant . . . .”
This promise to abjure legislative zoning action was unlawful. A similar situation came before the Supreme
Court in Avco Community Developers, Inc.
v. South Coast Regional Com. (1976) 17 Cal.3d 785 (Avco). There, a developer
had agreed to sell and dedicate acreage to a local harbor district, conditioned
on the issuance of certain development approvals for a project. (Id.
at p. 799.) The developer asserted that
this agreement precluded enforcement of a coastal permit requirement. The Supreme Court held that, assuming the
contract “constituted a promise by the government that zoning laws thereafter
enacted would not be applicable to [the tract], the agreement would be invalid
and unenforceable as contrary to public policy.” (Id.
at p. 800.) The court explained, “Land
use regulations, such as the [then coastal act], involve the exercise of the
state’s police power [citation], and it is settled that the government may not
contract away its right to exercise the police power in the future. [Citations.]”
(Ibid.; accord, Delucchi v. County of Santa Cruz (1986)
179 Cal.App.3d 814, 823; see Mission Oaks
Ranch, Ltd. v. County of Santa Barbara (1998) 65 Cal.App.4th 713, 723.) A second,
similar attempt to restrict the city’s zoning appears in paragraph 2.1 of the
SA. It provides that the revised project
will conform to the city’s zoning code as of the recording of Trancas’s
development covenant, “except any limitations on density which vary from the
terms of the covenant.” Although the
parties suggest that the quoted exception is ambiguous, it rather plainly
constitutes agreement that the development need not comply with density
limitations different from the density set forth in the covenant. The language thus follows the Deal Memo’s
statement that “The units shall be built in conformance with development
standards of City’s zoning code, except density.” The provision most likely was occasioned by
the fact that the existing zoning of the property allows only one residence per
five acres, far fewer than the number. This
contractual exemption from an element of the city’s zoning is indistinguishable
from the one condemned by Avco, supra, 17
Cal.3d at page 800. Moreover, it
functionally resembles a variance. Such
departures from standard zoning, however, by law require administrative
proceedings, including public hearings (§ 65905; M.C., ch. 17.72; id., § 17.72.040), followed by findings
for which the instant density exemption might not qualify. (See § 65906; M.C., § 17.72.060.) Both the substantive qualifications and the
procedural means for a variance discharge public interests. Circumvention of them by contract is
impermissible. As the
Association points out, there exist procedures by which a landowner-developer
and a city or county may lawfully agree to permit a described development
project, including fixing the zoning governing it. (§ 65864 et seq.; see Santa Margarita Area Residents Together v.
San Luis Obispo County Bd. of Supervisors (2000) 84 Cal.App.4th 221,
226-227 (Santa Margarita).) Under the governing statute, however,
numerous procedural and substantive limitations attend the making and
performance of such a “development agreement.”[v] In Santa
Margarita, an agreement made pursuant to and in conformity with this regime
surmounted a challenge that it worked an unconstitutional surrender of the
police power. (Id. at pp. 232-233.)
The provisions of the SA which we have discussed cannot do so. Defending
these provisions, the city and Trancas do not come to grips with their
significance. Trancas essentially avers
that the city did no more than settle a dispute with it, obtaining
consideration in exchange for “agreeing not to enact ordinances that would
interfere with the proposed development . . . .” Of course, that is what Avco, supra, 17 Cal.3d at page 800, declared to be
prohibited. Trancas also argues that
paragraph 2.1’s exemption from compliance with density restrictions cannot
yet be termed a variance, because those restrictions may be relaxed by the time
Trancas is ready to build. But whatever
the density requirements may turn out to be, the SA presently provides Trancas
a red carpet around them. The city
similarly asserts that the challenged provisions are not ripe for writ review,
because the development they frame will not immediately or even necessarily
take place. The city, however, has
already made impermissible promises and commitments which, contrary to its
representations, extend beyond simply renewed consideration of the final
maps. Regardless of the city’s and
Trancas’s assurances that zoning and general plan changes lie in the future,
the SA’s covenants to restrict zoning for Trancas’s project constitute present,
absolute commitments, adjudication of which is timely and appropriate. (Cf. Green
v. Obledo (1981) 29 Cal.3d 126, 144-145; California Water & Telephone Co. v. County of Los Angeles (1967)
253 Cal.App.2d 16, 22-24, 26.) The
Association urges that other aspects of the SA also impermissibly conflict with
and evade zoning law – principally
paragraph 2.1’s provision for applying the city’s zoning code (other than
density limits) as it exists when Trancas records the development covenant,
rather than when Trancas obtains a building permit. We need not, however, resolve these issues,
or for that matter the first cause of action’s further claim that adoption of
the SA required an evaluation under CEQA.
The SA specifically provides that its provisions are not severable, and
the unlawful provisions already considered render the agreement invalid. The Association is entitled to a writ of
mandate setting it aside. The
Association’s second cause of action sought a writ requiring the city to
disapprove the final maps, because of certain alleged shortcomings. The Association’s challenges to the maps
these claims are not now suitable for adjudication, because they are moot. The city already has disapproved Trancas’s
maps, by the resolution, and for essentially the reasons the Association
advances. Although the SA called for
rescission of the resolution, the city avows that that has not occurred, and
the SA now has been determined invalid.
We do not at this juncture find it appropriate to render an advisory
opinion, regarding the intrinsic merits of maps that have been rejected.[vi] 2.
The Brown Act. In its
third cause of action, the Association adduced a separate challenge to the SA,
as invalid because adopted in closed city council session, allegedly in
violation of the Brown Act. (See
§ 54960.1, subd. (a) [authorizing mandate proceeding to determine that
action taken in violation of certain provisions of the act is “null and
void”].) The trial court rejected this
challenge, on the ground that the city council’s consideration and approval of
the agreement were exempt from the public meeting requirements of the act
(§§ 54952.6, 54953, subd. (a)) by virtue of section 54956.9’s
exception for consultation with counsel regarding pending litigation.[vii] Respondents presently defend that holding,
while the Association opposes it.
Whether or not the exemption for advice about pending litigation
authorizes approval in closed session of a settlement agreement containing the
dynamic features of the SA is novel question, potentially subject to
recurrence. We therefore address it,
even though we already have held the SA invalid for other reasons. The city
avows that it “technically complied” with the Brown Act in adopting the
SA. The extent to which the city
complied was as follows. Three weeks
after it disapproved Trancas’s final maps, the city council met, first in
closed and then in open session, on Did the
litigation exemption of section 54956.9 permit the city to discuss and approve
the SA in closed sessions, and with the abbreviated agenda notice permitted for
such sessions? The Association
acknowledges that section 54956.9 does authorize a city council to discuss with
its counsel, in closed session, the settlement of a lawsuit to which the city
is a party. (See id., subd. (a).) And it also
has been established that, in general, under section 54596.9 a local
legislative body may act to approve the settlement of such litigation. (See § 54957.1, subd. (a); Southern California Edison Co. v. Peevey (2003)
31 Cal.4th 781, 798-799 [discussing 75 Ops.Cal.Atty.Gen. 14 (1992), which
so opined]; cf. id. at pp. 800-801
[open meeting law for state agencies].)
Nevertheless, the Association urges, this exemption from the requirement
that action be taken in public, after an opportunity for public comment (§
54953, subd. (a)), cannot apply to the adoption of a settlement agreement, like
the SA, that includes either provisions for future action that would ordinarily
be subject to the Brown Act’s open meeting requirements (e.g., rescission of
the final map disapproval), or decisions intrinsically required by law to be
made after public hearings (e.g., grant of a zoning variance).[viii] In support
of its position, the Association cites Shapiro
v. San Diego City Council (2002) 96 Cal.App.4th 904 (Shapiro). That case stands
first for the proposition that statutory exceptions to the Brown Act’s general
requirements of local legislative openness are to be narrowly construed, having
in mind the general spirit of the act (see § 54950).[ix]
(Shapiro,
at p. 917.) Substantively, the
decision addressed, among other
things, the nature and scope of discussion allowed in closed city council
session by section 54956.8, which permits closed sessions held with a real
property negotiator, regarding the terms of purchase, sale, exchange, or lease
of property. In the context of a major
and complex redevelopment project to build a new baseball stadium, the court
rejected San Diego’s arguments that such closed sessions should be permitted to
extend, beyond the specific matter in the statute, to significantly related items,
such as finance, environmental impact, and architectural design. The court declared that “The important policy
considerations of the Brown Act . . . must be enforced, even where
particular transactions do not fit neatly within its statutory categories.” (Shapiro,
at p. 924.) The city
and Trancas insist that the exemption construed in Shapiro is distinctly narrow, whereas both the text of section
54956.9 and the authorities construing it embrace a broader, more general
exemption for litigation settlement agreements.
As Trancas puts it, “The Brown Act permits cities to settle litigation
in closed session; it makes no exception for settlements ‘concerning’ matters
ordinarily dealt with in open session or settlements ‘addressing’ matters that
ordinarily require a public hearing.” But
this argument simply begs the issue presented. Section 54956.9
does not by its terms provide for entry into or approval of settlements in
closed session. (See ante, fn. 7.) The statute has been construed, however, to
allow a city council decide in closed session to settle numerous types of
litigation that cities face, with agreements not limited to the payment of or
acceptance of money. (E.g., 75
Ops.Cal.Atty.Gen. 14, supra; but
see Southern California Edison Co. v.
Peevey, supra, 31 Cal.4th at pp. 813-814 (conc. & dis. opn. of Baxter,
J.).) But in determining the extent of
this implied legislative exemption, the statutory rules and underlying policies
that require certain municipal action to be taken after public hearings are at
least equally vital, and require harmonization.
We say equally because even within the context of the Brown Act, exemptions
like section 54956.9 must be strictly construed. (Shapiro,
supra, 96 Cal.App.4th at p. 917.) It
therefore appears compelling that the statutory allowance for settlements in
closed session not override extrinsic requirements for public proceedings. This would mean that a settlement approved in
closed session could not include agreement to take governmental action that independently
requires a public hearing, at least without holding one before that action is
actually authorized or taken. For
example, a city could not settle a suit by a developer by agreeing to take
zoning action, without conducting the public proceedings required by the
Government Code or city ordinance. In the
present case, the city recognized that the SA, and the Deal Memo that preceded
it, involved more than just a settlement of litigation. Both documents recited that the parties were
undertaking to settle a number of disputes, and “potential disputes,” including
but not limited to Trancas’s outstanding lawsuit. We believe it ineluctable that, when such a settlement
extends to authorization or taking of action that by law requires public
decision-making, section 54956.9 cannot and does not provide an exemption
either from that mandate or from the public meeting norm of the Brown Act. The city council therefore was not authorized
to adopt the present SA in closed session, and the SA was void for that reason
as well as those previously discussed. 3.
Conclusion. Our conclusion that the SA is invalid as presently
cast should not be taken as disparaging either the values favoring settlement
of disputes or, in this case particularly, the public benefit that the city
sought to reap through dedication of the larger Trancas tract. Agreements that satisfy the needs and
interests of developers, concerned citizens, and the municipality that embraces
their interests and those of the broader public, should be pursued and
commended (cf. §§ 65864 et seq., 66030 et seq.) – and such a result should
yet be possible here. The limit that we
necessarily recognize and enforce is that statutory procedures and protections
of public involvement cannot be ignored, and established regulatory regimes
such as zoning may not be deviated from solely on bilateral agreement. DISPOSITION The judgment is reversed. The trial court shall enter judgment granting
a writ of mandate requiring the city to set aside the Settlement Agreement
adopted CERTIFIED FOR PUBLICATION We concur: BOLAND, J. FLIER, J. [i] Undesignated
section references hereafter are to the Government Code. [ii] The
court so stated while applying the holding of Division One of this court, in a
case involving another project, that a coastal permit had not expired because
the city engineer had already approved that project’s final subdivision
map. (Trancas Property Owners Assn. v. City of Malibu (1998) 61
Cal.App.4th 1058.) Trancas
subsequently delivered an application for a new coastal permit to the Coastal
Commission, but the commission replied that in light of a recently approved
local coastal plan, Trancas now had to present the application to the city. The city, in turn, generally declined to
process such applications, pending resolution of its own lawsuit challenging
the coastal plan – which was not concluded until after the judgment in this
case. (City of [iii] The
city has requested that we take judicial notice of this agenda. We do so, but only as proof of its
contents. We also grant the city’s
concurrent request for judicial notice of a portion of the Municipal Code. [iv] The
city attorney had informed the Association’s attorney of the initial agreement
of [v] “Particulars
of the statute include requirements that a development agreement may be
approved only after a public hearing (§ 65867) and must be consistent with the
general plan and any specific plan (§ 65867.5), a provision permitting annual
review by the governmental entity and termination for noncompliance (§
65865.1), and a statement that the agreement is subject to referendum (§
65867.5). The statute also specifies
certain provisions which may or must be included in a development agreement. (§ 65865.2.)”
(Santa Margarita, supra, 84
Cal.App.4th at p. 227.) [vi] Nor
does the Association’s fourth cause of action, for declaratory relief, require
appellate adjudication. The six pleaded
issues largely replicate the claims of the second cause. Moreover, the Association has not separately
pressed them here. [vii] Section
54956.9 relevantly provides: “Nothing in
this chapter shall be construed to prevent a legislative body of a local
agency, based on advice of its legal counsel, from holding a closed session to
confer with, or receive advice from, its legal counsel regarding pending
litigation when discussion in open session concerning those matters would
prejudice the position of the local agency in the litigation.” [viii] The
Association also argues that the SA violated the Brown Act because the
settlement was actually decided on when the city tendered the Deal Memo, two
weeks earlier. But indulging this
premise arguendo, presentation of the Deal Memo to Trancas also followed a
nominally properly noticed closed session, to discuss the ongoing
litigation. The Association’s instant
argument thus depends on the answer to the principal issue. [ix] This
initial section of the Brown Act provides:
“In enacting this
chapter, the Legislature finds and declares that the public commissions, boards
and councils and the other public agencies in this State exist to aid in the
conduct of the people’s business. It is
the intent of the law that their actions be taken openly and that their
deliberations be conducted openly.
[¶] The people of this State do
not yield their sovereignty to the agencies which serve them. The people, in
delegating authority, do not give their public servants the right to decide
what is good for the people to know and what is not good for them to know. The people insist on remaining informed so
that they may retain control over the instruments they have created.” 
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