Eminent Domain Report

As we’ve seen all too many times in California, when local municipalities delay development approvals -- even improperly -- courts are reluctant to find liability under an inverse condemnation cause of action and award temporary damages. While there have been some successful cases (see Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161), those results are the exception, not the rule.  A recent court of appeal opinion, Mahon v. County of San Mateo 2018 Cal. App. Unpub. LEXIS 1483, provides an example of the uphill battle a property owner faces in successfully recovering for a temporary taking.

In Mahon, a property owner sought to develop two homes on his property.  The owner originally sought approvals in 1999, and after numerous hearings and changes to his plans to address public comments, the proposed development was denied by the County Board in 2005.  The property owner filed a petition for writ of mandate, along with an inverse condemnation action.  The owner was successful on the writ, with the trial court finding the owner had not been given a fair and proper hearing and that one of the Board members had become personally involved in the underlying permit application process.

The property owner finally obtained a new Board hearing in 2009 (10 years later), and the application for development was once again denied, with the Board concluding that under a recent case interpreting the Subdivision Map Act, the owner could not develop two residences since the property had not been lawfully subdivided. When brought back to the court, the trial court again held that the County should issue the development permits, and the County did so, conditioned upon the owner’s demonstrating his property had been lawfully subdivided.  Even then, because there was no evidence that a lawful subdivision had occurred, the owner still could not develop the two residences.

In 2016 (17 years after the owner had originally applied for permits), the trial court finally reached a decision on the owner’s inverse condemnation cause of action. The court concluded that there was no taking, despite conceding that the owner had been treated unfairly, had been denied due process, and had been required to satisfy years of inconsistent and ever-shifting demands by the County.  The Court of Appeal confirmed the decision, explaining that even though the County had committed a procession of delays and errors, the owner had viable development options.  The Court explained that despite the known political pressure, the owner chose to try and obtain approvals through continuous design changes without doing the one thing that the County clearly wanted:  significant revisions to the size of the planned residences.  Under the Penn Central line of regulatory takings cases, the Court held that while the owner was initially denied a proper hearing, the delays in securing that hearing through the court did not amount to a taking.

Mahon highlights the difficulty for property owners to successfully recover for a temporary taking due to improper delays in the entitlement process.  Even if the municipality acts improperly, courts will typically give the agency broad leeway before finding liability.  It is imperative that owners demonstrate they are left with virtually no options to develop their property, or that the agency’s actions go well beyond mere errors or typical delays.