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Schellinger Brothers v. City of Sebastopol

December 2, 2009

SCHELLINGER BROTHERS, PLAINTIFF AND APPELLANT,
v.
CITY OF SEBASTOPOL, DEFENDANT AND RESPONDENT.



(Sonoma County Super. Ct. No. SCV-241427), Trial Judge: Honorable Robert S. Boyd.

The opinion of the court was delivered by: Richman, J.

CERTIFIED FOR PUBLICATION

It is probably a truism that since adoption of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.*fn1 (CEQA)) in 1970, every developer has at some point before construction starts ground his teeth or clenched her fists in frustration while enduring the often lengthy process leading to certification of an environmental impact report (EIR) for the proposed project. This appeal shows that frustration is not enough to justify premature judicial action that would short-circuit the decision-making process intended by CEQA.

In Sunset Drive Corp. v. City of Redlands (1999) 73 Cal.App.4th 215 (Sunset Drive), the Court of Appeal held that a cause of action could be alleged to warrant issuance of a writ of traditional mandate under Code of Civil Procedure section 1085 compelling action by a city council that was refusing to make a decision on whether to certify an EIR. The developer here has seized upon Sunset Drive to support the extraordinary proposition-apparently advanced in earnest for the first time since CEQA was enacted-that a court is authorized to issue a writ of administrative mandamus to compel a city council to certify a proposed EIR, even though the council had decided that the pending draft EIR required recirculation to address new issues.

Certain that the Sunset Drive court never imagined that such a construction would be placed on its opinion, we reject that construction, and thus reject the developer's contention that the one- year time limit for certifying an EIR established by section 21151.5 of CEQA constitutes an iron-clad, one-size-fits-all rule that permits of no exception. We reach the same conclusion concerning the impact of Government Code section 65589.5: it too cannot be used to halt the decision-making process specified by CEQA that is still on-going. Finally, we conclude that the developer's active participation in that process for more than three years-which included numerous changes in the size and composition of the project-after the date it now claims the city lost its discretionary jurisdiction amounts to laches, an accepted ground for relaxing the directory deadline of section 21151.5.

In light of these conclusions, we affirm the trial court's decision not to interject itself into the still on-going process of preparing an EIR.

BACKGROUND

The record before us includes 52 volumes of an administrative process that is not yet over. The parties agree that our review is de novo. (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 427 (Vineyard).) Fortunately, our resolution of the issues presented by this appeal will require only the briefest references to that record.

At issue here is the attempt of plaintiff and appellant Schellinger Brothers (Schellinger) to develop half of a site of approximately 20 acres in an area known as Laguna Vista within the limits of defendant City of Sebastopol (City). Schellinger, which is a partnership, does not own the property, but has an option to buy it from the current owner, Scott Schellinger, one of the partners.

Originally, in January 2001, Schellinger submitted an application to construct a project with 182 units of single-residence housing along with a neighborhood commercial center of 16,300 square feet. The City began preparation of an EIR for the project in this form.*fn2

The draft EIR was released for public comment in March 2002. Between April (when Schellinger formally resubmitted its application) and June of 2002, when the draft EIR was completed, Schellinger was continually making changes in the project. By June, when the first public hearing was conducted by the City's planning commission, the project was reduced to 177 units and the size of the commercial-office center had been reduced.*fn3 After two public hearings, the planning commission accepted the draft EIR, with modifications.

In August, as the city council was about to consider the draft EIR as approved by the planning commission, Schellinger again retinkered the project, dropping the number of units to 172, as well as making other changes. After two public hearings, and while the council was considering the matter, Schellinger decided to resubmit its project proposal.

Schellinger submitted its new proposal in May 2003. It sought approval of a project reconfigured with 145 units and no commercial center. The City deemed Schellinger's application complete on June 23, 2003.

Thereafter, it became clear that the project implicated the City's open space ordinance, which would ordinarily require an analysis of the project separate from the EIR. However, with no objection from Schellinger, the City council decided to fold the open space analysis into the EIR. The City also decided to recirculate the draft EIR.In September 2003, the City engaged a firm to prepare the open space analysis and the draft EIR for recirculation. But it was not until November of that year that Schellinger could arrange for that firm to have access to the project site.

The recirculated draft EIR was released for public comment in August 2004. Opposition to the project-which was considerable, as it had been from the beginning-caused the City to propound a large number of requests to Schellinger for additional information. This apparently continued through October 2005.

The recirculated draft EIR was again considered by the planning commission in October and November 2005,*fn4 which recommended conditional approval of the recirculated draft EIR. The city council took up the matter on December 6; the persistent opposition to the project was still vocal, and, at Schellinger's request, the matter was continued to January 2006. In February 2006, the council gave Schellinger the opportunity to submit a comprehensive response to questions and comments from both the council and the public about the project.

In May 2006, matters were approaching the point where the city council had scheduled a vote on the recirculated draft EIR. Apparently in response to the public opposition,*fn5 Schellinger again modified the proposal by reducing the number of units to 125. However, before an actual vote, the City and Schellinger agreed to undergo a mediation of the project controversy.

Almost a year passed before another revised proposal, this one based on the mediation,*fn6 was set to go to the city council. The number of units remained at 125 but the commercial space component was revived, although the square footage was now fixed at 2,335. However, majority support on the city council could not be mustered for the mediated project. Schellinger demanded that "the City comply with its legal duty to approve the 145-unit Laguna Vista Project" as proposed in Schellinger's May 2003 application. The City scheduled a council meeting for June 5, 2007 to consider approving the recirculated draft EIR and the project in its latest form.*fn7 At this point the city council decided that the draft EIR should again be recirculated for further public comment and additional analysis on certain environmental issues.

For Schellinger, this was the final straw. Schellinger refused to pay for what the City's termed "further processing," whereupon the City "halted the administrative proceeding."*fn8 Schellinger's next move was to commence this litigation.

On August 31, 2007, Schellinger filed a complaint with seven causes of action. The only ones relevant here are the first, fourth, and fifth causes of action, which were titled "Violation of Anti-NIMBY statute" (Gov. Code, § 65589.5)*fn9, "Breach of Contract Regarding Processing Costs," and "Breach of Mediation Agreement," respectively.

Government Code section 65589.5 states the policy of the state that local government "shall not disapprove a housing development project... for very low, low-, or moderate-income households,... or condition approval in a manner that renders the project infeasible...." (Subds. (b) & (d).) Because its latest proposal for the project "proposes 20% affordable housing," Schellinger alleged that "The City's arbitrary and capricious actions in processing, or purporting to process the Laguna Vista project [application], and its recent decision to continue in the same path by imposing yet another round of inordinate delay, has effectively imposed infeasible conditions."

Schellinger's fourth cause of action alleged an implied-in-fact agreement between it and the City "that Schellinger... would pay or reimburse the City for the costs of processing the Laguna Vista project [application], and the City would in turn process the project [application] reasonably, competently, and in accordance with law." While Schellinger "performed all its obligations under that contract by making all payments in a timely manner," the City breached it, in that the City "has processed or purported to process the Laguna Vista project [application] unreasonably, in a manner that is arbitrary and capricious, in a manner that unreasonably and without rational cause delayed and hindered the Laguna Vista project." Schellinger alleged that it was thus entitled to damages "including processing costs in excess of those reasonably necessary for lawful, reasonable processing of the Laguna Vista project [application] within the time frame allowed by law, and damages associated with the unlawful and unreasonable delays resulting from the failure to process competently."

Finally, as to the mediation, Schellinger alleged in its fifth cause of action that the agreement to mediate was a contract, as shown by "written communications between the parties..., oral statements made or acquiesced in..., and conduct of the parties in participating and continuing to participate in the mediation process." Schellinger further alleged that the City "never intended to participate in the mediation in good faith," making the effort "a farce," thereby "defraud[ing] [Schellinger] into wasting all the time and effort it had expended" ...


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