Dryden Oaks v. San Diego County Regional Airport Authority

CourtCalifornia Court of Appeal
DecidedOctober 19, 2017
DocketD069161
StatusPublished

This text of Dryden Oaks v. San Diego County Regional Airport Authority (Dryden Oaks v. San Diego County Regional Airport Authority) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dryden Oaks v. San Diego County Regional Airport Authority, (Cal. Ct. App. 2017).

Opinion

Filed 9/26/17; Modified and Certified for Pub. 10/19/17 (order attached)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

DRYDEN OAKS, LLC et al., D069161

Plaintiffs and Appellants,

v. (Super. Ct. No. 37-2014-00004077- CU-EI-NC) SAN DIEGO COUNTY REGIONAL AIRPORT AUTHORITY et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of San Diego County, Earl H.

Maas, III, Judge. Affirmed.

Freeland McKinley & McKinley, Steven A. McKinley and Karen G. McKinley for

Plaintiffs and Appellants.

San Diego County Regional Airport Authority and Amy Gonzalez; Gatze Dillon

& Ballance LLP, Lori D. Ballance, Stephen F. Tee and Michael P. Masterson for

Defendant and Respondent San Diego County Regional Airport Authority. Thomas E. Montgomery, County Counsel, Judith A. McDonough and John P.

Cooley, Deputy County Counsel for Defendant and Respondent County of San Diego.

In 2001, Michael Durkin used two limited liability companies—Dryden Oaks LLC

and Durkin-CAC Lot 24, LLC—to purchase two lots directly adjacent to the McClellan

Palomar Airport (Airport) in the City of Carlsbad, California (City). His development

plans for the two lots were initially successful despite determinations by the San Diego

County Regional Airport Authority (Authority) that the proposed projects were not

compatible with the Airport. Overriding the Authority's objections, the City issued a

planned industrial permit and Durkin completed the construction of a commercial

building on one of the lots in 2005. He also obtained a permit from the City for

construction of a second building on the other lot. Both permits included provisions in

which Durkin agreed to hold the City harmless for any liability arising out of approval of

the projects.

Durkin's permit on the second lot expired in 2012 without the commencement of

any construction. By the time Durkin sought to restart the permitting process with the

City, the Authority had adopted an Airport Land Use Compatibility Plan (ALUCP) that

designated Durkin's properties as being within a Safety Zone that carries specific limiting

recommendations for compatible land uses. Despite having approved Durkin's previous

permit application, the City now refused to override the recommendations in the ALUCP.

Under California law, it is the City that bears ultimate responsibility for deciding

which property development projects to permit. But apparently unable or unwilling to

sue the City, in February 2014 Durkin filed an inverse condemnation action against the

2 Authority and the County of San Diego (County). Durkin's complaint asserted that the

value of his property was depressed by the Authority's 2010 adoption of the ALUCP and

that the decrease in value constituted a governmental taking requiring the County and the

Authority to provide compensation.

We conclude the trial court properly entered summary judgment in favor of the

County and the Authority on the ground that undisputed evidence shows there was no

taking by these defendants. To the extent Durkin has any arguable claim, which we

express no opinion on, it would be against the City. Based on established legal

principles, nothing done by the Authority or the County amounts to a taking of Durkin's

property. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

At the time the complaint was filed, Dryden Oaks owned a parcel of real property

known as Lot 25 and Durkin-CAC owned a parcel known as Lot 24. The two lots are

located in the County of San Diego and the City of Carlsbad at the west end of the

Airport, adjacent to the end of a runway. When Durkin purchased the lots, they were

designated as part of the Airport's Runway Protection Zone (RPZ) on the County's

Airport Layout Plan (ALP), a long-range planning tool that preceded the ALUCP. The

Federal Aviation Administration defines a RPZ as "[a]n area at ground level prior to the

threshold or beyond the runway end to enhance the safety and protection of people and

property on the ground." In March 2000, Durkin entered into an agreement to purchase

Lots 24 and 25 (and a third lot, Lot 23, not at issue in the litigation), which were part of a

development known as the Carlsbad Airport Centre, from the Callaway Golf Company.

3 Durkin visited the property 14 times prior to signing the purchase agreement and

observed the lots' proximity to the airport.

The transaction was in escrow for approximately 15 months, closing in June 2001.

Durkin paid $474,000 for Lot 24 and $310,000 for Lot 25. Prior to the close of the

transaction, Durkin submitted an application to the City for a permit to construct a

29,000 square foot industrial building on Lot 24. In December 2001, the City submitted

the application to the Authority for a determination as to whether the proposed project

was consistent with the 1994 Comprehensive Land Use Plan for the Airport, a

predecessor plan to the ALUCP. Roughly two months later, the Authority issued a

determination that it could not make an administrative finding that the project was

consistent with that plan because the property was "located within the 75 CNEL zone of

the McClellan-Palomar Airport" and the proposed industrial development was not

compatible. The Authority's letter communicating its decision indicated that the City

could pursue the development through the override procedures contained in Public

Utilities Code section 21676.1

In June 2002, the City passed a resolution overriding the Authority's determination

"as to noise compatibility only" conditioned on "internal noise reduction, Notices of

Restrictions, Hold Harmless Agreements, and exemptions from outdoor eating area

requirements . . . ." It also issued planned industrial permits (PIP No. 00-04 and

PIP No. 00-04(A)) to Durkin. Each permit contained an indemnification clause in which

1 Undesignated statutory references are to the Public Utilities Code.

4 Durkin agreed to hold the City harmless from all liabilities arising out of the approval,

development and operation of the project and to execute "a Hold Harmless Agreement

regarding aircraft operations and aircraft noise prior to issuance of grading or building

permits" to be "reviewed and approved by the City Attorney . . . ." Durkin also gave the

County an avigation easement for Lot 24 in the process of developing the property.

Thereafter, the project was finished and the building has been leased to various tenants

since 2005.2

Plans for Lot 25 proceeded on a slower schedule, and it was not until

October 2006 that Durkin submitted an application to the City for a planned industrial

permit to construct a 30,000 square foot two-story industrial building. As with the

project on Lot 24, after Durkin submitted his permit application the plans were submitted

to the Authority for a determination as to whether the project was consistent with the

applicable airport compatibility plan, which at that time was the 2004 Airport Land Use

Compatibility Plan. In February 2007, the Authority provided notice to the City that the

Lot 25 project was not consistent with that compatibility plan.

The City also submitted the project proposal to the California Department of

Transportation (Caltrans) for comment. In its October 2007 response, Caltrans noted that

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