Collins v. County of Monterey Board of Supervisors

[6] 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA [10] JAMES G COLLINS, Case No. 19-cv-01214-NC [11] Plaintiff, FINDINGS OF FACT AND 12 CONCLUSIONS OF LAW v. AFTER BENCH TRIAL [13] COUNTY OF MONTEREY, [14] Defendant. [16] 17 James Collins argues that the Conservation and Scenic Easement on his property in 18 Monterey County is terminated, and he should thus prevail in this quiet title action. 19 Alternatively, Collins argues that even if his predecessors in interest did not validly 20 terminate the easement, he is a good faith purchaser for value without notice of the 21 easement, and Defendant County of Monterey should be equitably estopped from 22 enforcing the easement. 23 On April 6, 2021, the Court held a bench trial on these three issues. The Court held 24 the trial by Zoom videoconference, with the parties’ consent. The Court makes the 25 following findings of fact and conclusions of law. 26 I. PROCEDURAL HISTORY 27 This Court held a three-day bench trial from April 6, 2021, through April 8, 2021. 1 and Scenic Easement. Specifically, he seeks a determination that the Easement has been 2 properly terminated or is otherwise not effective to limit his rights to use his property. The 3 County contends that neither the purported 1990 nor 2019 Notice of Termination meets the 4 conditions precedent required for unilateral termination under Article 7 of the 5 Conservation Scenic Easement. See Dkt. No. 147 at 1. Thus, the County contends that the 6 Easement remains in effect, and that Collins is not entitled to any requested relief. 7 At trial, Plaintiff’s counsel called James Collins to testify regarding his purchase 8 and the history of the Property, Wendy Strimling as his witness to testify as to her role as 9 Assistant County Counsel of the County in evaluating Mr. Collins’ application to build a 10 home on the Property, Anna Quenga as his witness to testify as to her role as a planner 11 with the County and the scope of development restrictions imposed on RC/CZ properties, 12 and Michael Bennett as his witness to testify about the assessor’s maps prepared for the 13 Collins Property.1 14 The County called Maria Rico-Haro as an expert witness to testify about the process 15 for recordation of documents, and the County called Christopher Daniel as its expert 16 witness to testify about the appraisal value of Collins’ property. All parties have consented 17 to the jurisdiction of a magistrate judge. See Dkt. Nos. 12, 17. This Court has subject 18 matter jurisdiction over the quiet title claim based on diversity. See Dkt. No. 60; see also [19] 28 U.S.C. § 1332 (a). 20 II. STANDARD OF REVIEW 21 “In an action tried on facts without a jury or with an advisory jury, the court must 22 find the facts specially and state its conclusions of law separately.” Fed. R. Civ. P. 23 52(a)(1). 24 III. FINDINGS OF FACT 25 A. The Property and History of Site Ownership 26 Collins’ Property (“the Property”), located at 83 Mount Devon Road, Carmel [27] 1 Highlands in Monterey County, California, presently consists of approximately 21 acres of 2 undeveloped land. See Trial Transcript (“TT”) Vol. 2, 222:21, 223:8. The Property was 3 first owned by Allan Prese in 1960, and Prese later transferred the property to D’Ambrogio 4 in 1962. TT Vol. 1, 30:24–25, 31:1; Ex. 31 at 5. In 1966, D’Ambrogio donated the parcel 5 to the Monterey County Foundation for Conservation, and the Foundation subsequently 6 granted the County of Monterey a Conservation and Scenic Easement Deed (the 7 “Easement”) in 1967. TT Vol. 1, 31:21–24; Ex. 31 at 5; Ex. 3. In 1977, the Foundation 8 granted the Property to the Behavioral Sciences Institute Foundation, and BSI later sold the 9 Property to Walter and Loretta Warren in 1989. Ex. 14 at 4. 10 B. Conservation Scenic Easement 11 The Conservation and Scenic Easement Deed provides that “no structures of any 12 kind will be placed or erected upon said described premises, except structures, lines and 13 other facilities necessary to maintain a water, drainage or sewer system, utilities consisting 14 of telephone, power, and cable television lines, utility roads necessary to serve same, 15 under, on or over said land, bridges, fences, and other structures reasonably necessary and 16 incidental to the construction, maintenance, and operation of an undeveloped scenic area, 17 including but not limited to roads, riding and hiking trails, fireplaces and picnic areas.” 18 Ex. 3 “Easement” § 1; TT Vol. 2, 157:3–14, 158:21–25. The Easement Deed further 19 provides that “except for the construction, alteration, relocation and maintenance of roads 20 and riding and hiking trails, the general topography of the landscape shall be maintained in 21 its present condition and no excavation or topographic changes shall be made, except to 22 prevent erosion or damage to the land.” Easement § 3; TT Vol. 2, 159:20–25, 160:1. 23 The Easement contains a termination provision, Article 7, which provides in 24 relevant part: 25 In the event that the State of California, or any political subdivision thereof, should pass legislation pursuant to Article XXVIII of the Constitution of the 26 State of California, or should pass legislation such as the California Land Conservation Act of 1965, or other legislation for the purpose of restricting 27 the use of real property to conserve and maintain natural scenic beauty, open space lands, natural resources and agricultural land for plant and animal restrict, the use of said property for scenic and recreational uses or for the use 1 of natural resources or for the production of food and fiber, the Grantor, or its successors in interest, shall have the option to have the [Property], or a 2 portion thereof, subjected to the restrictions created by such legislation, free from the restrictions imposed by this conveyance. [3] Should Grantor, or its successors in interest, desire to exercise the option to 4 restrict the use of a portion of or all of [the Property] pursuant to such legislation, Grantor, or its successors in interest, shall give written notice to 5 [County of Monterey] of the exercise of such option. 6 Upon the giving of such notice, this [Easement], as to the portion of the property subjected to such legislation or which will be subject to such 7 legislation by the agreement of the Grantor, or its successors in interest, shall immediately cease and determine and revert to and vest in the Grantor, or its 8 successors in title, upon being subject to such legislation; the intent of this clause being that in the event that the subject property, or a portion thereof, 9 shall become restricted pursuant to such legislation, that the restrictions placed upon Grantor, or its successors in title, on said real property shall 10 become null and void and of no further force and effect. 11 Easement § 7 (line breaks added). 12 C. Collins’ Acquisition of the Property 13 Collins has prior experience purchasing and selling approximately four different 14 pieces of real property. TT Vol. 1, 46:8–10. In 1994, Collins, a resident of Kentucky, 15 purchased the 21-acre Property from the Warrens for $129,000. TT Vol. 1, 17:20–21, 25. 16 Collins’ “price per acre was [approximately] $6,000[,] because it’s not a buildable lot. That 17 was a parcel that, when it was sold, it was not sold to be built. The zoning did not allow a 18 home. So[,] he purchased a property that was not buildable at the time.” TT Vol. 2, 19 232:13–17. It was Collins’ understanding, from both his realtor and the seller, that the 20 Property could not be developed for residential purposes. TT Vol. 1, 47:5–8. By contrast, 21 an appraisal of comparable properties in the area showed that the fair market value of the 22 Property is approximately $275,000–$300,000, making the value per acre somewhere 23 between $13,000–$15,000 per acre without the existence of an Easement. See id. at 24 228:11 (emphasis added). 25 After Collins obtained title insurance, the insurance company conducted a title 26 search, and the search did not disclose the existence of any active easements encumbering 27 the property. TT Vol. 1, 18:9–10. The title documents list several easements, and 1 1, 18:15. In 2014, Collins began his efforts to obtain permits and authorization to build a 2 home on the Property. TT Vol. 1, 8:13; Ex. 14 at 6. The County of Monterey rebuffed his 3 efforts, eventually concluding in 2018 that it could not grant Collins the necessary permits 4 and authorization until a judicial determination resolved the status of the Easement. See 5 Ex. 14. 6 As a result, Collins filed a claim with the title insurance company after the last 7 board hearing in 2018. TT Vol. 1, 18:22–23. Collins opined that although the title 8 company found a terminated easement, they did not notify him because “they don’t report 9 terminated easements.” TT Vol. 1, 20:8, 11. The title insurance agent arranged a new 10 property appraisal, and later notified Collins that the title insurance company would 11 “terminate or cancel [the] policy and . . . issue a check for $129,000,” because “a 12 preliminary appraisal showed [his] property was worth in excess of one million dollars.” 13 Id. 19:2–8. 14 D. Legislation Relevant to the Property 15 1. California Coastal Act 16 The California Coastal Act of 1976 (Pub. Resources Code, § 30000 et seq.) created 17 a “comprehensive scheme to govern land use planning for the entire coastal zone of 18 California,” Yost v. Thomas, 36 Cal. 3d 561, 565 , 572–73 (1984), by setting “‘minimum 19 standards and policies’ for localities to follow in developing land use plans,” DeVita v. 20 County of Napa, 9 Cal. 4th 763, 775 (1995); McAllister v. County of Monterey, 147 Cal. 21 App. 4th 253, 272 (2007). The Coastal Act regulates “‘development’ that results in a 22 change in the intensity of use of or access to land” within the Coastal Zone, and requires 23 that any person who undertakes development within the Zone first obtain a Coastal 24 Development Permit (“CDP”). Greenfield v. Mandalay Shores Community Assn., 21 Cal. 25 App. 5th 896, 898 (2018). Thus, no land use restrictions are imposed under the Coastal 26 Act itself, until a CDP is issued as the result of a property owner voluntarily developing 27 real property within the Coastal Zone. The California Coastal Act requires county 1 the local coastal program which implements the coastal act,” TT Vol. 2, 148:17–18. 2 2. Monterey County Ordinance 3 Adopted in 1983, the Monterey County Zoning Coastal Implementation Plan 4 Ordinance, known as the Resource Conservation Coastal Zone or “RC/CZ” zone, is a local 5 implementation of the California Coastal Act. See TT Vol. 2, 148:17–18. The RC/CZ 6 zoning ordinance requires a coastal administrative permit, unless exempt, for the following 7 principal uses: “Resource dependent educational and scientific research facilities uses, and 8 low intensity day use recreation uses such as trails, picnic areas and boardwalks; 9 Restoration and management programs for fish, wildlife, and other physical resources.” 10 Ex. 7, Monterey County Ordinance § 20.36.040. 11 The zoning ordinance allows conditional uses, subject to a coastal development 12 permit, for “utility facilities such as pipe lines, underground and overhead utility 13 extensions, and water tanks, but not including public/quasi-public uses such as schools, 14 fire stations, or parking lots.” Ex. 7, Monterey County Ordinance § 20.36.050. The 15 exempt developments, those properties that do not require a coastal development permit, 16 are listed in § 20.70.120; Section 20.70.115 allows for an interpretation of a permit 17 requirement. See TT Vol. 2, 143:20–23. Exempt properties “depend on the development 18 being proposed.” TT Vol. 2, 144:1. Because Collins proposes to build a house on the 19 Property, it does not qualify as exempt, and he would require a permit. Id. at 144:15–17. 20 3. The Effect of the Zoning Ordinance 21 The Resource Conservation Coastal Zone “is a very restrictive zoning designation. 22 There’s very limited development allowed within [it].” TT Vol. 1, 98:15–17. The Collins 23 Property is designated as an RC/CZ zone. See TT Vol. 2, 149:15–16. “The resource 24 conservation zone on the Property, they would have to follow whatever uses that were 25 allowed, that were listed.” TT Vol. 2, 170:2–4. The “County’s position is that termination 26 of the easement did not result in the intensification of use because the [P]roperty was 27 zoned Resource Conservation, which restricts development on the property in a manner 1 E. First Notice of Termination 2 Walter and Loretta Warren recorded with the Monterey County Recorder a Notice 3 of Termination of the Conservation and Scenic Easement Deed on December 24, 1990. 4 Ex. 4 (“1990 Termination”). The 1990 Termination stated that it was “based upon the 5 enactment of the California Coastal Act (Public Resources Code §§ 30,000–30,900),” 6 pursuant to the terms of Article 7 in the Easement Deed. Id. 7 F. Second Notice of Termination 8 During the pendency of this lawsuit, Collins delivered to Valerie Ralph, the Clerk 9 of the Board of Supervisors, a Notice of Termination of the Conservation and Scenic 10 Easement Deed on October 17, 2019. Ex. 5 (“2019 Termination”). That 2019 11 Termination stated that Monterey County Ordinance § 20.36.040 “qualifie[d] as the 12 legislation under Article 7 of the Easement Deed and authorize[d] termination of the 13 Easement Deed.” Id. 14 G. Facts Not Bearing on the Court’s Finding 15 The Court corrects two statements made in its February 20, 2020, Order Denying 16 Summary Judgment at ECF 82: First, this case is not about the De Amaral Preserve. It is 17 about a specified property, identified by plat number, and the Conservation and Scenic 18 Easement on that Property. See Dkt. No. 82 at 1. Second, the Collins Property is 21 acres, 19 not 30 acres. See id. 20 The De Amarals and other neighbors may be interested in the outcome of this trial, 21 but they were not parties in this case, and this case did not adjudicate their property rights. 22 Further, the parties stipulate that the title insurance issued to Collins at the time of his 23 purchase of the Property did not disclose the Easement or make any reference to a “De 24 Amaral Preserve.” Dkt. No. 136 at 3. Accordingly, the Court makes no finding as to the 25 De Amarals or the adequacy of the title company’s practices. 26 IV. CONCLUSIONS OF LAW 27 A. The Court Denies the County’s Rule 52(c) Motion 1 findings under Federal Rule of Civil Procedure 52(c). See TT Vol. 2, 201:21. 2 Specifically, the County argued that Collins cannot prove reasonable reliance based on a 3 change to an assessor’s map, id. at 203:3, and that because Quenga testified to the 4 differences between restrictions in the Easement Deed and the RC/CZ zoning, Collins 5 failed to meet his burden, id. at 203–204.2 6 Judgment on partial findings should be granted only where a party has been fully 7 heard on an issue that is dispositive to the success of its claim or defense, and the court has 8 found against it. See Fed. R. Civ. P. 52(c). The court may enter judgment on partial 9 findings “at any time that it can appropriately make a dispositive finding of fact on the 10 evidence.” Id. (advisory committee notes on 1991 amendment). Having made the findings 11 of fact described in detail above, the Court declines to enter judgment in favor of the 12 County under Rule 52(c). Rather, as described in detail below, the Court concludes that 13 the Conservation and Scenic Easement is terminated, and that Collins prevails in his Quiet 14 Title Action against the County of Monterey. 15 B. Quiet Title 16 “The purpose of a quiet title action is to finally settle and determine the parties’ 17 conflicting claims to the property and to obtain a declaration of the interest of each party.” 18 City of Santa Maria v. Adam, 211 Cal. App. 4th 266, 298 (2012). “The quiet title claimant 19 has the burden of proof to show every element of the right claimed.” Id. (citing Tulare 20 Irrigation Dist. v. Lindsay-Strathmore Irrigation Dist., 3 Cal. 2d 489 , 547–48 (1935)). A 21 quiet title action requires the claimant to provide: (1) a description of the property; (2) the 22 claimant’s title and basis of the title; (3) the adverse claims to the title; (4) the date as of 23 which the determination is sought; and (5) a prayer for the determination of title of the 24 plaintiff against the adverse claims. See Cal. Code Civ. Proc. § 761.020. 25 // [27] 2 Counsel for Collins also moved for directed verdict under FRCP 52(c), TT Vol. 2, 1 1. Termination of Easement 2 “Conservation easements are negative easements that impose specific restrictions 3 on the use of the property they cover.” Wooster v. Department of Fish & Game, 211 Cal. 4 App. 4th 1020, 1026 (2012) (internal citations omitted). A conservation easement is a 5 limitation in a deed, will, or other instrument in the form of an easement, restriction, 6 covenant, or condition by the owner of land that is binding on successive owners for the 7 purpose of retaining the land predominantly in its natural, scenic, historical, agricultural, 8 forested, or open-space condition as specified in the instrument creating or transferring the 9 easement. See Cal. Civ. Code § 815.1 , 815.2(d). Just as easements can be created by 10 express agreement between the parties, an easement can similarly be terminated by the 11 terms of an easement agreement or deed. See Wooster, 211 Cal. App. 4th at 1027 ; see also 12 City of Manhattan Beach v. Superior Court, 13 Cal. 4th 232, 260 (1996) (analyzing terms 13 of a railway easement deed). 14 Here, the Easement restricts structures from being erected on the property, and 15 prohibits excavation and topographic changes, with the exception of those “reasonably 16 necessary and incidental to the construction, maintenance, and operation of an 17 undeveloped scenic area,” such as roads, riding and hiking trails, fireplaces and picnic 18 areas.” Easement § 1; TT Vol. 2, 159:5. Article 7 of the Easement Deed allows the 19 Grantor to terminate the Easement under specific conditions. By its terms, the Easement 20 allows the Foundation, or its successors in interest, to terminate the Easement when 21 California or Monterey passes conservation legislation which restricts, or would by 22 agreement restrict, the use of the Property for “scenic and recreational uses or for the use 23 of natural resources or for the production of food and fiber.” Easement § 7 (emphasis 24 added). 25 The California Coastal Act defines “development” to include: the placement or 26 erection of any solid material or structure; discharge or disposal of any dredged material or 27 of any gaseous, liquid, solid, or thermal waste; grading, removing, dredging, mining, or 1 Resources Code § 30106. The Monterey County RC/CZ zoning ordinance allows “only 2 such development that can be achieved without adverse effect and which will be 3 subordinate to the resources of the particular site and area.” Ex. 7, Monterey County 4 Ordinance § 20.36.010. As such, development is prohibited unless a property owner is 5 exempt, or obtains a required coastal administrative permit for principal or conditional 6 uses. See id. §§ 20.36.040, 20.36.050. 7 Here, Collins asserts that the RC/CZ zoning ordinance §20.36.040 restricts the use 8 of the Property, and therefore triggers the condition in Article 7 of the Easement deed 9 required for unilateral termination. The Court agrees. The County argues that the zoning 10 ordinance is not more restrictive than the restrictions in the Easement Deed, and it 11 therefore cannot be considered “restrictive” for purposes of triggering the unilateral 12 termination in Article 7. See TT Vol. 2, 155:22–25. But the Court finds that the degree of 13 restriction is immaterial to this analysis. Rather, the Easement Deed may be unilaterally 14 terminated when conservation legislation is both passed and when it restricts the use of the 15 Property; it need not be the most restrictive. The Court finds that the Monterey County 16 Ordinance § 20.36 does so here. 17 Although the California Coastal Act alone (the basis for the Warren’s 1990 18 Termination) may not have been sufficient to trigger the termination provision in the 19 Easement Deed, the Court finds that the Monterey County Zoning Ordinance is the type of 20 qualifying legislation that would allow for the termination of the Easement. The Property 21 is not intensified, despite any easement termination, because it is still restricted by RC/CZ 22 zoning. See Ex. 19 at 6. The Court also finds that Monterey County Ordinance § 20.36 23 constitutes local implementation of the California Coastal Act. Thus, because the 24 Monterey County Ordinance restricts the use of the Property pursuant to Article 7 of the 25 Easement, it satisfies the condition precedent required to trigger unilateral termination of 26 the Easement. Furthermore, Collins’ 2019 Termination invoked the Monterey County 27 Ordinance as the basis of the Easement’s termination. Thus, the Court finds that the 2019 1 upon the Monterey County Zoning Ordinance. 2 C. Good Faith Purchaser for Value Without Notice 3 In the alternative, Collins argues that he was a good faith purchaser for value when 4 he purchased the Property. “The elements of bona fide purchase are payment of value, in 5 good faith, and without actual or constructive notice of another’s rights” or an easement 6 contract. See C & C Properties v. Shell Pipeline Company, No. 14-cv-01889-DAD-JLT, [7] 2019 WL 6341047 , *9 (E.D. Cal. Nov. 27, 2019) (citing Melendrez v. D & I Inv., Inc., 127 8 Cal. App. 4th 1238 , 1251 (2005); Gates Rubber Co. v. Ulman, 214 Cal. App. 3d 356 , 364 9 (1989)). If the defendant claims that a plaintiff was not such a good faith purchaser, the 10 burden is on the defendant to establish “that [plaintiff] is chargeable with actual or 11 constructive notice of the existence of the easement.” Johnson v. Cella, 122 Cal. App. 2d 12 72, 74 (1953). 13 Here, the Court finds that the County’s evidence establishes that Collins was 14 chargeable with notice of the Easement’s existence. Although the Warrens did not 15 disclose the prior existence of an easement on the Property, Collins did not present 16 adequate evidence that he was without notice. At the time he purchased the Property, the 17 price per acre was far below fair market value, thereby reflecting the restrictions and 18 encumbrances on the Property. The Property was not only encumbered by an easement, 19 but Collins was also aware of the zoning restrictions on the Property. Furthermore, the 20 Court finds that Collins was on notice of the Easement’s existence once his title insurance 21 company returned to him the $129,000 paid. Based on his prior experience investing and 22 purchasing properties, Collins also should have known that the Property was not a 23 buildable parcel. Therefore, the Court finds that Collins was not a good faith purchaser for 24 value without notice. 25 D. Equitable Estoppel 26 Collins argues that the County’s actions led him to believe that the Easement was 27 previously terminated, so it should be equitably estopped from enforcing the Easement. 1 of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the 2 party asserting the estoppel had a right to believe it was so intended; (3) the other party 3 must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his 4 injury.” Strong v. County of Santa Cruz, 15 Cal. 3d 720, 725 (1975); Driscoll v. City of 5 Los Angeles, 67 Cal. 2d 297, 305 (1967). When a government entity is the estopped party, 6 the knowledge of the facts that form the basis of the estoppel must reach someone in 7 authority. Strong, 15 Cal. 3d at 727 . When county agents act in the county’s name, their 8 knowledge may be imputed to the county. See Escondido Union School Dist. v. Casa 9 Suenos De Oro, Inc., 129 Cal. App. 4th 944, 968 (2005); County of Orange v. Carl D., 76 10 Cal. App. 4th 429 , 440 (1999). The detrimental reliance must be reasonable. Waller v. 11 Truck Ins. Exchange, Inc., 11 Cal. 4th 1, 35 (1995). 12 In cases involving equitable estoppel against a government entity, an additional 13 factor must be considered: “the court must weigh the policy concerns to determine whether 14 the avoidance of injustice in the particular case justifies any adverse impact on public 15 policy or the public interest.” Schafer v. City of L.A., 237 Cal. App. 4th 1250 , 1261 16 (2015); see also West Washington Properties, LLC v. Department of Transportation, 210 17 Cal. App. 4th 1136 , 1149–50 (2012); Golden Gate Water Ski Club v. County of Contra 18 Costa, 165 Cal. App. 4th 249 , 259–63 (2008). The burden rests on the party asserting 19 estoppel to prove to prove all elements “by evidence having some reasonable tendency to 20 establish the fact.” General Motors Acceptance Corp. v. Gandy, 200 Cal. 284, 295 (1927). 21 Here, the Court finds that Collins did not present evidence that the County intended 22 that its conduct would be acted upon, nor acted in a way such that Collins had a right to 23 believe it was so intended. Even though the County received notice of the termination, 24 Collins did not provide evidence showing that the County accepted or agreed with the 25 1990 Notice of Termination. Thus, the Court concludes that the County did not intend for 26 such reliance and rejects Collins’ equitable estoppel claim presented during the bench trial. 27 Finally, the Court finds that public policy considerations weigh in the County’s favor. Any 1 || in conservation of these undeveloped lands. 2 || V. CONCLUSION 3 Accordingly, the Court finds that the Conservation and Scenic Easement is 4 || terminated, and that Collins prevails in his quiet title action against the County of 5 || Monterey. Nevertheless, the Court’s conclusion does not change the zoning of the 6 || property. This case did not ask, and the Court has not rendered an opinion, as to how the 7 || Property should be zoned under state and county law. The Court also does not render an 8 || opinion about the De Amaral Preserve. 9 Collins’ request for declaratory relief is GRANTED. Collins’ good faith purchaser 10 |} and equitable estoppel claims are DENIED. The Court will enter judgment in Plaintiffs 11 || favor on the quiet title claim. [12] = 13 IT IS SO ORDERED. [14] 8 15 || Dated: April 21, 2021 h-_=——— _ NATHANAEL M. COUSINS Q 16 United States Magistrate Judge [17] 1g Zz