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Thang D. Vu v. Ronald Ticknor

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (El Dorado)


January 26, 2012

THANG D. VU, PLAINTIFF AND APPELLANT,
v.
RONALD TICKNOR, AS CHIEF BUILDING OFFICER, ETC., ET AL., DEFENDANTS AND RESPONDENTS.

(Super. Ct. No. SC20080281)

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

Vu v. Ticknor

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Plaintiff Thang D. Vu sought government approval for the construction of a single-family residence in South Lake Tahoe. After Vu obtained an environmental impact review, a transfer of coverage rights and a building permit, and after he incurred $300,000 in construction costs, defendant Ronald Ticknor, the chief building officer for defendant City of South Lake Tahoe (the City), revoked Vu's building permit and ordered Vu to tear down the partially constructed residence on his property.

Vu filed a petition for writ of mandate and complaint seeking to rescind the revocation decision and to recover damages. The City and Ticknor filed demurrers, which the trial court sustained without leave to amend.

Among other things, Vu asserts on appeal that (1) the trial court erred in concluding that he failed to exhaust his administrative remedies, and (2) a writ of mandate is available to compel Ticknor to correct his abuse of discretion.

We conclude that Vu's action against the City is barred because he failed to exhaust his administrative remedies, and there is no showing that he can amend his pleading to overcome this defect. Accordingly, we will affirm the judgment as to the City.

Ticknor did not assert Vu's failure to exhaust administrative remedies in his demurrer. Accepting Vu's allegations as true, as we must in reviewing an order sustaining a demurrer (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6), Vu states a claim for mandamus relief against Ticknor. Mandamus is available to correct an abuse of discretion (Cuadra v. Millan (1998) 17 Cal.4th 855, 871, disapproved on another ground in Samuels v. Mix (1999) 22 Cal.4th 1, 16, fn. 4; Inglin v. Hoppin (1909) 156 Cal. 483, 491), and Vu alleges that Ticknor abused his discretion by falsely and wrongfully revoking the building permit. We will reverse the judgment as to Ticknor.

BACKGROUND

Vu owns undeveloped real property located in the City of South Lake Tahoe. The property is subject to an open-air easement, memorialized in a grant of open-space easement with covenants (Grant) recorded with the El Dorado County Recorder's Office in 1981.

The Grant was intended to maintain the property as an open-space land so that the public may enjoy its natural and scenic beauty. The Grant effectively precluded any development on the property. Paragraph 8 of the Grant provides that the City shall not abandon the easement without the written consent of the California Tahoe Regional Planning Agency (TRPA) or its successor agency (collectively Resources Agency)*fn1 unless the City finds that no public purpose described in Government Code section 51084, subdivision (b)*fn2 will be served by keeping the property as open space and the Resources Agency concurs in such finding. The Resources Agency forwarded a copy of the Grant to the El Dorado County Department of Building Inspection in 1981.

Vu acquired title to the property and an adjacent parcel on June 28, 2002. The property detail report Vu obtained from the El Dorado County Assessor's Office showed that the property was subject to an open-space easement. Although the specific terms of the Grant were not disclosed to Vu, he understood that the property had been dedicated to the City as open space and could not be developed without the express written consent of the City, the Resources Agency, and the California Tahoe Conservancy (Conservancy) within the Resources Agency. (Gov. Code, §§ 12800 & 12805, subd. (a).)

Vu contacted the City's building inspection department in 2005 to inquire about building a single-family residence on the property. Defendant Ronald Ticknor, the chief building officer for the City's community development department, informed Vu that the only requirement for building a residence on the property was an assignment of coverage rights*fn3 from the Conservancy. Ticknor told Vu the City would process Vu's application for a building permit if Vu obtained such an assignment.

Vu embarked on a two-year process to obtain an environmental impact review for his construction project and an assignment of 906 square feet of coverage rights from the Conservancy. The environmental impact review concluded that Vu's proposed single-family residence would not create any negative environmental impacts.

Vu purchased 906 square feet of coverage rights from defendants Bill and Lori Olin on March 2, 2006, paying them $75,200, and those development rights were transferred to the property. Vu also purchased 906 square feet of land coverage rights from the Conservancy in 2007 in order to meet the City's requirements for obtaining a building permit.

The Resources Agency approved Vu's building permit application on August 21, 2007. Approximately one month later, Ticknor caused a building permit to issue for Vu's construction project. Vu then began constructing a single-family residence on the property.

However, in a letter dated December 14, 2007, Ticknor informed the Resources Agency that the City had just discovered the open-space easement on the property. On February 19, 2008, Ticknor informed Vu that the building permit was suspended because of incorrect information provided in conjunction with Vu's building permit application and "in violation of the TRPA permit approval conditions."

Nonetheless, Ticknor asked the Resources Agency in April 2008 for consent to abandon the open-space easement, pursuant to paragraph 8 of the Grant. But in August 2008, the Resources Agency denied the request. Two days later, Ticknor informed Vu that the permit was revoked because Vu submitted incomplete and false documentation to transfer development rights to the property. Vu had spent approximately $300,000 in construction costs by the time the revocation decision issued.

The revocation decision required Vu to stop construction and remove the partially constructed residence. It also informed Vu that he had "the right to appeal to the building board of appeals, provided that a written application for appeal is filed in the office of the building official within 20 days after the day the decision, notice or order was served." The revocation decision invited Vu to contact Ticknor with any questions. There is nothing in the record indicating that Vu appealed to the building board of appeals.

Instead, on December 1, 2008, Vu filed a petition for writ of mandate. Vu subsequently filed a first amended petition for writ of mandate and complaint (complaint) against Ticknor, in his official capacity as chief building officer for the City's community development department; the City; Mike Chrisman, in his official capacity as secretary of the Resources Agency; the Resources Agency; and the Olins.

Vu only appeals the trial court's ruling pertaining to the City and Ticknor, and our recitation of the background is limited to those causes of action. Vu named Ticknor in his first cause of action for writ of mandate pursuant to Code of Civil Procedure*fn4 section 1085.*fn5 Vu named the City in his third cause of action for declaratory relief, fourth cause of action for inverse condemnation/taking without just compensation, and sixth cause of action for equitable estoppel.

The City and Ticknor filed separate demurrers to the complaint. The trial court sustained Ticknor's demurrer without leave to amend, concluding that issuance of a building permit is a discretionary act immune from liability under Government Code sections 818 and 821.2, and that section 1085 mandamus could not be used to compel Ticknor to take action in this case.

The trial court also sustained the City's demurrer without leave to amend, ruling that Vu failed to exhaust his administrative remedies, it was improper to seek review of an administrative decision through a declaratory relief action, the revocation was a valid exercise of the police power and not an unconstitutional taking, and the City was immune from liability pursuant to Government Code sections 818 and 821.2.

STANDARD OF REVIEW

We review the sufficiency of a complaint against a demurrer de novo. (Fogarty v. City of Chico (2007) 148 Cal.App.4th 537, 542.) We review a ruling to deny leave to amend for an abuse of discretion. (Record v. Reason (1999) 73 Cal.App.4th 472, 486.) When a general demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) When a demurrer is sustained without leave to amend, we decide whether the defect can be cured by amendment. (Ibid.) If it can, the trial court abused its discretion. (Ibid.) The burden of proving this is on the plaintiff. (Ibid.)

DISCUSSION

I

Vu contends the trial court erred in concluding that he failed to exhaust administrative remedies. We disagree.

Failure to exhaust administrative remedies is a proper basis for demurrer. (2A Cal.Jur.3d (2007) Admin. Law, § 673, p. 107; see, e.g., Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 319, 333 (Campbell).) The rule requiring exhaustion of administrative remedies "'is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.'" (Campbell, supra, 35 Cal.4th at p. 321.) "'Exhaustion of administrative remedies is "a jurisdictional prerequisite to resort to the courts." [Citation].'" (Ibid., italics omitted.)

A plaintiff must exhaust his or her administrative remedies before asserting a cause of action for declaratory relief (Pan Pacific Properties, Inc. v. County of Santa Cruz (1978) 81 Cal.App.3d 244, 248-251), inverse condemnation (ibid.), or taking without just compensation (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1430). Exhaustion is also required for Vu's equitable estoppel claim because it reasserts the allegations in Vu's claim for declaratory relief and seeks the same remedies sought in his claim for inverse condemnation. The policy considerations supporting exhaustion of administrative remedies as to the declaratory relief and inverse condemnation claims apply equally to the equitable estoppel claim. Requiring exhaustion of administrative remedies (1) gives the agency an opportunity to minimize or eliminate damages, (2) accords recognition to the expertise of the agency, "permitting it to adjudicate the merits of the plaintiff's claim in the first instance" and (3) promotes "judicial efficiency by unearthing the relevant evidence and by providing a record which the court may review." (Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 476.)

The complaint acknowledges that the City created a building board of appeals with jurisdiction over the denial of building permits. The building board of appeals hears and decides appeals of decisions made by the building official in the application of the 2007 Building Code (Cal. Code Regs., tit. 24, pt. 2, ch. 1 appen. [authorizing the revocation of a permit issued on the basis of incorrect information]) and related codes adopted by the city council.*fn6 (South Lake Tahoe City Code, § 8-43; City of South Lake Tahoe, City Council Resolution No. 2006-58; 2007 California Building Code, Cal. Code Regs., tit. 24, pt. 2, ch. 1 appen., § 105.6.)

Vu did not allege in the complaint, and he does not contend on appeal, that he appealed to the building board of appeals. Instead, he points to paragraph 26 of his complaint, which alleges that the building board of appeals has no rules giving notice to prospective appellants about the time to bring an appeal or the right to present evidence.

But as the trial court found, the revocation decision expressly informed Vu of the need and deadline for filing an appeal of the revocation decision. It said "[a]ny person directly affected by a decision of the code official or order issued under the building code shall have the right to appeal to the building board of appeals, provided that a written application for appeal is filed in the office of the building official within 20 days after the day the decision, notice or order was served." The complaint implies Vu's knowledge of the content of the revocation letter.

Vu next argues there is no "evidence" that any statute or ordinance imposed a 20-day appeal deadline. But the requirement for exhaustion of an administrative remedy is a question of law that we determine de novo. (Wallich's Ranch Co. v. Kern County Citrus Pest Control Dist. (2001) 87 Cal.App.4th 878, 883-885.) Although the record does not include the authority requiring that an appeal to the building board of appeals be filed within 20 days of the notice of a challenged decision, we take judicial notice, on our own motion, of the applicable portion of the California Code of Regulations. (Evid. Code, §§ 451, subd. (b), 459; Gov. Code, § 11344.6; Assem. Com. on Judiciary com., 29B pt. 1B West's Ann. Evid. Code (2011 ed.) foll. § 451, p. 99.) A reviewing court "can reasonably be expected to discover and apply this law even if the parties fail to provide the court with references to the pertinent . . . regulations, and rules." (Assem. Com. on Judiciary com., 29B pt. 1B West's Ann. Evid. Code, supra, at p. 99.) Section B101.1 of the 2007 California Building Code, which is in appendix B to title 24, part 2 of the then-current California Code of Regulations, provided that an appeal to the board of appeals must be filed within 20 days after the notice was served. The City adopted the 2007 Building Code. (South Lake Tahoe City Code, § 8-13.)

At oral argument, Vu's counsel claimed it was futile for Vu to exhaust his administrative remedies. Counsel asserted that although a building board of appeals was authorized in August 2008, members had not yet been appointed. But Vu did not allege, and does not contend, that he knew in August 2008 that exhaustion was futile or that such knowledge motivated him to forego filing an appeal with the building board of appeals. Instead, the complaint alleged that the City "constituted a Board of Building Permit Appeals." We must accept this allegation as true in reviewing the trial court's order sustaining the demurrer. (Evans v. City of Berkeley, supra, 38 Cal.4th at p. 6) And nothing in the complaint or in judicially noticeable facts establish that a building board of appeals did not exist in August 2008. The trial court was asked to take judicial notice of section 8-43 of the South Lake Tahoe City Code and City Council Resolution No. 2006-58. Both show the creation of a building board of appeals.

Vu also asserts that he can amend his pleading to allege that he and his counsel met with the city attorney shortly after August 29, 2008, to protest the revocation of the permit. However, Vu does not establish how a meeting with the city attorney is equivalent to filing an appeal with the building board of appeals. At oral argument, Vu's counsel claimed he can also amend the complaint to allege that Vu's former attorney wrote a letter which constituted an administrative appeal. But the letter that counsel mentioned in oral argument is not part of the appellate record. Moreover, counsel conceded in oral argument that the letter from Vu's former attorney was not brought to the trial court's attention. Vu bears the burden of showing how the challenged pleading can be amended to satisfy the rule requiring exhaustion of administrative remedies (Blank v. Kirwan, supra, 39 Cal.3d at p. 318), but he has failed to meet this burden. The trial court did not abuse its discretion in sustaining the City's demurrer without leave to amend.

Because the failure to exhaust administrative remedies is a legal and jurisdictional bar to Vu's claims against the City, it is not necessary for us to address Vu's other contentions on appeal pertaining to the City's demurrer.

II

The only cause of action asserted against Ticknor is Vu's first cause of action seeking mandamus relief. The first cause of action does not seek monetary relief against Ticknor,*fn7 but instead seeks to compel Ticknor to rescind his revocation decision and then to suspend the building permit pending final resolution of Vu's petition against the Resources Agency.*fn8 Ticknor separately demurred to the first cause of action, but he did not assert failure to exhaust administrative remedies. Instead, he asserted, among other things, that mandamus is not available to control a public official's discretion to revoke a building permit. The trial court agreed.

Vu contends on appeal that mandamus is available to remedy an abuse of discretion, and that Ticknor abused his discretion by wrongfully revoking the building permit.

Vu is correct that mandamus relief is available to correct an abuse of discretion. (Cuadra v. Millan, supra, 17 Cal.4th at p. 871; Inglin v. Hoppin, supra, 156 Cal. at p. 491.) It has been held that mandamus will lie to compel a public official or entity to issue a permit where the refusal to do so is based on an erroneous opinion about the legality of a racial deed restriction (Palmer v. Fox (1953) 118 Cal.App.2d 453, 455-456) or the illegality of a subdivision (Munns v. Stenman (1957) 152 Cal.App.2d 543, 545-546, 551-552), or the public entity's failure to follow the standards enunciated in relevant law (Redwood City Co. of Jehovah's Witnesses v. City of Menlo Park (1959) 167 Cal.App.2d 686, 696-697 (Redwood City Co.)).

"In order to show that discretion was abused, the party seeking review must show the public official or agency invested with discretion acted arbitrarily, capriciously, fraudulently, or without due regard for the petitioner's rights, and that the action prejudiced the petitioner. Stated differently, where a statute leaves room for discretion, a challenger must show the official acted arbitrarily, beyond the bounds of reason, or in derogation of the applicable legal standards." (43 Cal.Jur.3d (2003) Mandamus and Prohibition, § 16, p. 549, fns. omitted.)

Section 104.2 of the 2007 Building Code (Cal. Code Regs., tit. 24, pt. 2, ch. 1 appen.) gives the building official discretion to issue building permits, and section 105.6 of the same Code authorizes the building official to suspend or revoke a building permit. As this case proceeds, the trier of fact may find that the Grant limits Ticknor's discretion to issue or revoke a building permit. But at this stage of the proceeding, we must accept Vu's allegations as true. Vu alleges that Ticknor, acting as the City's chief building officer, knew that the property was restricted from development but nonetheless issued the building permit to Vu, and later revoked the permit for false reasons. These allegations support a claim for mandamus relief.

Accordingly, Ticknor's demurrer should be overruled. (Inglin v. Hoppin, supra, 156 Cal. at pp. 487-488, 491-492; Redwood City Co., supra, 167 Cal.App.2d at pp. 690-692, 694, 697.)

DISPOSITION

The judgment of dismissal in favor of Ticknor is reversed and the matter is remanded to the trial court with instructions to vacate its order sustaining Ticknor's demurrer without leave to amend. The trial court shall enter a new order overruling Ticknor's demurrer to the first cause of action.

The judgment of dismissal in favor of the City is affirmed.

The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)

We concur: HULL , Acting P. J. BUTZ , J.


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