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Tejon Real Estate, LLC v. City of Los Angeles

California Court of Appeals, Second District, Fourth Division

January 22, 2014

TEJON REAL ESTATE, LLC, Plaintiff and Appellant,
v.
CITY OF LOS ANGELES, Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County Super. Ct. No. BC485719, Frederick C. Shaller, Judge.

David M. Leeper for Plaintiff and Appellant.

Michael N. Feuer, City Attorney and Brian I. Cheng, Deputy City Attorney for Defendant and Respondent.

MANELLA, J.

Appellant Tejon Real Estate, LLC, the owner of a vacant lot in Los Angeles, contends the trial court erred in sustaining the demurrer of respondent City of Los Angeles (City) to appellant’s complaint and dismissing the underlying action. Appellant had engaged in discussions with City representatives concerning the conditions under which it could obtain an extension of water service to its lot, and whether installation of a fire hydrant would be required prior to building a residence. Having obtained informal opinions from City and Fire Department representatives concerning the cost of the water extension and the necessity of the hydrant, appellant initiated an action for declaratory relief, seeking interpretation of the Department of Water and Power Rules Governing Water and Electric Service (DWP Rules) and the Fire Code. We conclude an action for declaratory relief is not appropriate to review an administrative decision; moreover, the action was unripe, as appellant had failed to exhaust administrative remedies or obtain a final administrative determination. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant’s original complaint alleged that it owned a vacant lot described as unimproved and zoned for a single family residence. The lot is located on an unpaved portion of Harriman Avenue, approximately 430 feet from the closest water main and fire hydrant. Appellant alleged that it desired to build a residence on the lot and had been informed by a Fire Department “representative” that a building permit would not be approved unless there was a fire hydrant within 300 feet of the proposed structure. In addition, appellant allegedly received a written estimate from the DWP stating that the cost of extending the water main to the lot would be $77, 000.[1] Appellant alleged that the requirements outlined by the representatives were not authorized by law, and that it was DWP’s obligation to provide water service at its own expense, “rather than make it impractical for an owner of a lot to build on the lawfully subdivided lot, because of the expense of obtaining water and fire protection....” Appellant sought a court interpretation of DWP’s Rules, in particular Rule 15, governing “[e]xtensions of the Department’s Water Distribution System which are necessary to make water service of a permanent character available to Applicants....”

The City demurred contending that the case was not ripe, and that appellant had failed to exhaust the administrative process as it had not submitted plans, applied for a permit or obtained an official decision from the City. Moreover, to the extent appellant contended it had received a final administrative decision, administrative mandamus rather than declaratory relief was the appropriate remedy. The demurrer was sustained with leave to amend, and appellant filed a first amended complaint (FAC).

In the FAC, appellant alleged that its inquiries to City and Fire Department personnel represented a “complete application for water service to the subject lot” and that the letter it received in response to its inquiry represented “the official action and final determination on [its] application[] by [DWP].” Appellant conceded it had not applied for a building permit, but contended the cost of providing water service to the lot was not dependent on the use of the property. Appellant further contended that applying for a building permit would be a “waste” of funds because the lot was “in an area where homes do not sell for enough money to make it practical to start spending an unknown amount of money to seek permits as long as the cost of water remains at $77, 000.”

Appellant quoted a DWP rule applicable to a water main extension “on [an] unimproved street[], not in [a] new subdivision, ” which was “not at... grade” level. Although it denied Harriman Avenue was not at grade level, appellant sought to rely on this provision, contending it prohibited charging the owner for the extension “‘[w]here[] in the opinion of the Chief Engineer of Water Works, the estimated revenue from the service to be provided does not justify the additional cost necessary for local distribution facilities.’” (Quoting DWP Rules, rule 15.A.6.c.) In addition, appellant alleged that a fire hydrant and six-inch water supply was not required, because the applicable provisions of the Fire Code state that its requirements pertain “‘unless otherwise determined by the Chief.’” (Quoting Fire Code, § 57.09.07; see also § 57.09.08 [“Supplemental fire protection equipment or systems shall consist of... [f]ire hydrants which shall be installed in accordance with section 57.09.06..., or as required by the Chief.”].)[2] Appellant alleged that before it could be charged for the service extension, “there must first be a reasonable opinion by the DWP that, ‘the estimated revenue from the service to be provided does not justify the additional cost necessary for local distribution facilities, ’” that the Fire Chief had the “authority to be flexible as to the location and flow rate of fire hydrants, ” and that “the [Fire Code] does not require a hydrant within 300 feet of a building, or 20 gallons per second, with 20 psi remaining, as the [City’s] staff is requiring, because the [C]hief has the authority to determine otherwise, which authority must be exercised reasonably.”

In the prayer for relief, the FAC requested a declaration determining whether “a service connection could be used, instead of a main extension, and still provide adequate water for a permit for a single family residence on the subject lot” and whether “a standard, single outlet fire hydrant, located directly in front of plaintiff’s lot, fed by a 1-1/4 inch service connection, would be a project which should be approved by the Fire Chief, if the proposed house had a garage with two-hour fire rated walls and ceiling, and if all roofs were covered with class A fire rated covering, with stucco covering all exterior walls, and with automatic fire sprinklers inside all portions of the house and garage, with a box to hold a 44 yard hose, to bring water within[] 300 feet of the house, or what else would make a house on the subject lot a project which would be approved by the Fire Chief.”

The City again demurred, asserting as it had before that the request for declaratory relief was not ripe, and that administrative remedies had not been exhausted as appellant had not prepared plans for an actual project or applied for permits. The City pointed out that “until complete plans (showing all features of the house) are submitted for review, [it] [could] not grant any exemption or impose any conditions.” The City also continued to assert that declaratory relief was not an appropriate substitute for mandamus. Appellant contended that the facts alleged in the FAC established that application for a permit would have been futile. It stated it would amend to seek a writ of mandate if necessary.

The court sustained the demurrer without leave to amend, stating: “In spite of the ruling on the Demurrer to the complaint placing [appellant] on notice of this defect in the pleading, [appellant] has still not alleged facts to establish that this controversy is ripe for declaratory relief. [Appellant] admits it never applied for permits, nor is there an allegation of an actual proposal for construction. Nor are there any facts alleged to establish that applying for a permit would have been futile.” The court found that “[a]dministrative decisions are reviewable by administrative writ, ” and observed that appellant was “attempting to sidestep the administrative process by obtaining an ...


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