San Marcos Success

LFAP successfully assisted the City of San Marcos in its enforcement of an agreement for payment of fair share street improvement costs and Public Facilities Fees imposed in connection with land use entitlements.  The agreement had been modified twice to provide additional time for the property owner to perform.  After the owners defaulted on an Amended Agreement for payment of the fees, the City initiated its enforcement efforts.  Defendants claimed that the fees were not due because they had been unsuccessful in developing the project, despite the fact that the agreement had been structured to provide for phased payment of the fees.  Defendants also included a claim that the fees violated the Mitigation Fee Act.  After the trial court found that the Amended Agreement was valid and ordered payment, Defendants appealed.  The Fourth District Court of Appeal agreed that the City could lawfully enter into and enforce an agreement to phase payment of fees associated with land use entitlements.  The California State Supreme Court denied review.  The Opinion supports municipalities that wish to securitize fees agreed upon by the parties and to enforce upon default.

The full opinion can be found at this link. http://www.courts.ca.gov/opinions/nonpub/D062628.PDF

Prop. 218 Success

LFAP successfully represented the City of Lemon Grove and the Lemon Grove Sanitation District in a recent Proposition 218 challenge filed by a rate payer.  The underlying Writ of Mandate action sought to set aside over $3 million in transfers from the Sanitation District to the City, contending that the transfers were not properly tied to actual costs incurred for the Sanitation District’s benefit, in violation of Proposition 218.  The trial court denial of the Writ and ruling in favor of the City and Sanitation District was appealed.  The Court of Appeal upheld the trial court ruling, finding that the City and Sanitation District demonstrated the transfers were proper.  On June 2, 2015 the Court of Appeal published its Opinion in Moore v. City of Lemon Grove, et al, 237 Cal.App.4th 363.  LFAP is experienced in appropriately structuring and defending such enterprise fund transfers.

 

The Appellate Court’s Opinion can be found at http://www.courts.ca.gov/opinions/documents/D066670.PDF.

New Decisions in Inverse Condemnation

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It is axiomatic that private property may not be taken for public use without just compensation (Cal. Const., art. I, Section 19; U.S. Const., 5thAmend.), but the nuances of inverse condemnation are growing.  So, what constitutes a taking these days?

Jefferson Street Ventures, LLC v. City of Indio

Recently the Fourth District Court of Appeal ruled that a city’s imposition of conditions indefinitely prohibiting the development of over one-third of a commercial property for possible future rights-of-way for an interchange project was an unlawful taking under the 5th Amendment of the U.S. Constitution and the California Constitution, Art. I, Section 19.  It was not surprising that the Court found that a public entity may be liable to compensate the property owner for such restrictions, even though the city expressed an intention to eventually acquire the development-restricted property through either eminent domain or negotiated purchase.  (Jefferson Street Ventures, LLC v. City of Indio (2015) 236 Cal.App.4th 1175.)

Take away: public entities must be aware of and realistic about timelines when implementing public projects, and refrain from imposing limitations on development until they know they can proceed with the acquisition or condemnation.  Private clients should ensure that any conditions relating to acquisition of or restriction on their properties can be tied to impacts arising from their proposed project and are susceptible of being accomplished within a reasonable time period, and pay close attention to governmental actions regulating development.

Horne, et al. v. Department of Agriculture

The property that may not be taken for public use without just compensation includes raisins, according to the Supreme Court of the United States’ June 22, 2015 decision in Horne, et al. v. Department of Agriculture, 576 U.S. ___ (2015).  The holding in the Horne case clarifies that the Takings Clause of the Fifth Amendment to the U.S. Constitution applies not only to real property, but also to personal property.

Chief Justice John G. Roberts Jr. delivered the opinion of the Court finding that a decades-old program developed to increase raisin prices by keeping a portion of the crop off the market amounted to an unconstitutional taking of private property.

In Horne, a group of Fresno, CA, raisin farmers refused to recognize the government program aimed at increasing raisin prices by removing some raisins from the market.  The government then imposed a fine.  The Hornes filed suit, challenging the program as an unlawful taking of private property for public use.  The Ninth Circuit held that the reserve requirement was not a Fifth Amendment taking because personal property is afforded less protection under the Takings Clause than real property. The U.S. Supreme Court disagreed, stating “[t]he Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.” (Id. (slip op., at 5)).  In this case, the fair market value of the raisins came in just over $483,000.00.  (See id. at 17).  The Fifth Amendment was once typically understood to apply only to governmental takings of real property; it is now known to apply to personal property as well.

Take away:  Public entities should closely scrutinize their interactions with private citizens and businesses to avoid a taking of personal property as well real property interests.

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Kristen S. Steinke has an established practice focused on eminent domain, inverse condemnation, land use and real property-related litigation.  She represents public entities, land owners, developers, small businesses, contractors, and subcontractors. Native to San Diego, Ms. Steinke is the Chair of the Eminent Domain Section of the San Diego County Bar and is also a member of the San Diego chapter of Lawyers Club.