Cortese v. United States

782 F.2d 845, 1986 U.S. App. LEXIS 22229
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 12, 1986
DocketNos. 84-5841, 84-5846
StatusPublished
Cited by18 cases

This text of 782 F.2d 845 (Cortese v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cortese v. United States, 782 F.2d 845, 1986 U.S. App. LEXIS 22229 (9th Cir. 1986).

Opinion

KENNEDY, Circuit Judge:

We consider, in the appeal before us, whether principles of California real property law control this ease and whether the government may enforce restrictions on certain real property. We further address whether it was error for the trial judge to take a view of the property in the . circumstances described below. We affirm in part, reverse in part, and remand for further proceedings.

The subject matter of the suit is a 4,000-foot-wide strip, containing about 170 acres, beneath the extended center line of the approach corridor to the main runway of the United States Marine Corps Air Station at El Toro, Orange County, California. The strip was purchased by a corporation known as Rossmoor Corporation to continue a previous owner’s attempt to develop a residential retirement community. Following Rossmoor’s acquisition of the tract, the Marine Corps took a series of actions to oppose development of the strip, in order to protect the approach corridor to the air station’s runway. As a result, Rossmoor failed to obtain necessary financing and approvals for the project.

In 1964 Rossmoor agreed to a Declaration of Restrictions limiting development of the strip in question. The Marine Corps in return withdrew its opposition to the project. In 1967, however, Rossmoor filed an inverse condemnation petition in the United States Court of Claims, alleging the government’s conduct in obtaining the Declaration of Restrictions was a taking of property without just compensation. Pursuant to a stipulation of settlement between the parties, Rossmoor executed a Supplemental Declaration of Restrictions (SDR) in 1974. The SDR permanently limited and restricted use of portions of the property for the benefit of the United States. The stipulation also provided for judgment against the United States in the amount of $2,706,000.00 plus interest, with an additional $272,041.24 in costs. The SDR was recorded in the land use records of Orange County.

The instant action was commenced by Rossmoor’s successors in interest, who are the trustees of the Rossmoor Liquidating Trust. We continue to refer to them as Rossmoor. Rossmoor brought this action to quiet title against the United States, invoking the equitable doctrine of changed conditions. It sought to enjoin the United States from enforcing the restrictions under the SDR. In its answer and counterclaim, the government maintained that the restrictions were valid and enforceable and sought removal of a portion of a 12,000-square-foot warehouse and storage facility that had been constructed on the property, in violation, the government contended, of the SDR.

The warehouse had been constructed by Laguna Federal Savings and Loan, which had purchased 1.234 acres of land from Rossmoor in 1981. Laguna was added as a defendant to the United States counterclaim. Great American Federal Savings and Loan Association, the successor by merger to Laguna, answered and counterclaimed, alleging the United States was estopped from enforcing the SDR against it. Great American also sought indemnifi[848]*848cation from Rossmoor in the event the court decreed removal of the warehouse from the restricted area.

The trial court judgment declared the restrictions in favor of the United States were permanent and enforceable, without reference to the doctrine of changed conditions. Further it found that the warehouse had been constructed on the property in violation of the SDR and ordered its removal. Rossmoor and Great American appeal.

The district court divided the case into four trial phases. Phase 1 addressed the nature and extent of the government’s interest under the SDR. If the interest were determined to be a covenant, Phase 2 would assess the enforceability of the restrictions under the doctrine of changed conditions. In Phase 3 the court was to consider the government’s counterclaims against Rossmoor and Great American for removal of the warehouse. Phase 4 was reserved for Great American’s counterclaim against Rossmoor for indemnification.

At the conclusion of Phase 1, the district court declined to identify the government’s interest in the Rossmoor property as either an easement or a covenant, ruling only that the interest created by the SDR was permanent and not subject to the doctrine of changed conditions. Accordingly, Phase 2 was omitted as unnecessary. In Phase 3 the court granted the government’s motion to dismiss its counterclaim against Rossmoor, while the counterclaim against Great American was retained. The trial court also granted Great American’s motion to dismiss its claim against Rossmoor pursuant to an agreement that the indemnity action could be tried later in state court if the trial court’s decisions were affirmed on appeal. Judgment was entered for the United States on the counterclaim, and this consolidated appeal followed. We affirm the judgment in favor of the United States on its counterclaim against Great American. However, as we conclude the SDR created covenants under California law, we reverse the portion of the judgment holding the government’s interest under the SDR to be permanent, and remand for consideration of the equitable doctrine of changed conditions.

We begin by considering Great American’s claim that the conduct of the Marine Corps equitably estops the United States from seeking removal of the portion of the warehouse located on restricted property. Even without reference to defenses that may be available only to the government, see Heckler v. Community Health Services, 467 U.S. 51, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984) (“It is well-settled that the Government may not be estopped on the same terms as any other litigant.”), four elements must be established to invoke the doctrine of equitable estoppel:

(1) The party to be estopped must know the facts;
(2) He must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended;
(3) The latter must be ignorant of the true facts; and
(4) He must rely on the former’s conduct to his injury.

United States v. Ruby Co., 588 F.2d 697, 703 (9th Cir.1978), cert. denied, 442 U.S. 917, 99 S.Ct. 2838, 61 L.Ed.2d 284 (1979); accord City of Long Beach v. Mansell, 3 Cal.3d 462, 489, 476 P.2d 423, 442, 91 Cal. Rptr. 23, 42 (1970). The district court determined estoppel did not apply under this test, and the factual determinations in support of its ruling are not clearly erroneous. Prior to issuing a permit for the construction of Laguna’s warehouse, Orange County authorities sent a copy of Laguna’s application to the Marine Corps. A Marine Corps official reviewed the application and, failing to note the warehouse was to be constructed in part on property covered by the SDR, wrote to the county, recommending merely that an acoustical study be undertaken, and that the building height and exterior lighting features be designed in compliance with Federal Aviation Administration requirements. There is no indication that Laguna saw this letter or knew of [849]*849its existence.

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Bluebook (online)
782 F.2d 845, 1986 U.S. App. LEXIS 22229, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cortese-v-united-states-ca9-1986.