Lions Club of Albany v. City of Albany

323 F. Supp. 3d 1104
CourtDistrict Court, N.D. California
DecidedJune 15, 2018
DocketNo. C 17-05236 WHA
StatusPublished

This text of 323 F. Supp. 3d 1104 (Lions Club of Albany v. City of Albany) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lions Club of Albany v. City of Albany, 323 F. Supp. 3d 1104 (N.D. Cal. 2018).

Opinion

William Alsup, United States District Judge

INTRODUCTION

A cross on a hill stands at the center of this case. The town wants it down. The sponsor wants it up. Both sides invoke the First Amendment and both have moved for summary judgment.

STATEMENT

Since 1971, a twenty-foot electrically-illuminated steel and plexiglass Latin cross has stood atop Albany Hill, the prominent knoll near the intersection of Interstates 80 and 580. At the time of its erection, the 1.1 acres hosting the cross belonged to Hubert and Ruth Call (who lived in Albany but not on the 1.1 acres). They allowed The Lions Club of Albany, California, a non-profit corporation, to erect the cross and to illuminate it (and the Lions Club proceeded to illuminate it every Christmas and Easter season up to the present) (Dkt. Nos. 43 at 10, 44, Exh. TTT). Hubert Call was then a member of both the Lions Club and Albany City Council.

All would have remained well for the cross but for a multi-party real estate deal by which defendant The City of Albany acquired title to the 1.1 acres along with adjacent parcels in exchange for approving a high-rise project nearby. The details remain important, so this order will lay them out.

Developer Interstate General Corporation (IGC) sought to develop high-rise condominiums on its real property located along the western slope and base of Albany Hill. In April 1972, IGC asked the City for permission for the development. The City saw opportunity and replied that it wanted an "overlook" park on Albany Hill. In May 1972, the Albany City Council passed an ordinance requiring a Council-issued use permit before any building or structure could proceed on Albany Hill. IGC's land and the Call's land (including the cross) fell within this restriction.

In July 1972, IGC applied to the Council for a use permit. In October 1972, the City proposed conditions for issuing the requested *1108use permit, including requiring IGC to deed the City two hilltop acres for parkland use. After a series of negotiations, IGC eventually proposed a so-called "$600,000 plan"-a complex multi-party agreement involving, among others, IGC (and its affiliates), the City, and the Calls. Under this plan, IGC offered to allocate $600,000 of its own money to purchase additional private property for the City's desired Overlook Park (now Albany Hill Park)-including the Calls' 1.1 acres at the summit of Albany Hill-and to convey it to the City. In November 1972, the Council issued IGC's use permit and accepted IGC's proposed $600,000 plan (Dkt. No. 44, Exh. TTT).

Pursuant thereto, IGC offered to pay the Calls $258,000 for title to their 1.1-acre parcel "free of liens, encumbrances, easements ... and conditions of record ... other than exceptions of record." 38 Cal. 3d at 641, 214 Cal.Rptr. 139, 699 P.2d 316.1 IGC and the Calls eventually reached an agreement whereby the Calls deposited two grant deeds into escrow-a grant deed conveying the Call parcel to an IGC affiliate and another grant deed conveying to the Lions Club an "easement for ingress and egress to maintain the existing cross standing" on the Call parcel. Before closing escrow, Call insisted upon burdening the parcel with the easement and would sell only on the condition that the cross would remain with an easement for access. The developer went along and deposited in escrow a grant deed conveying the Call parcel to the City. That deed did not indicate that title to the Call parcel was subject to the easement (but it did not have to for the easement to be effective). See 38 Cal. 3d at 642 n.10, 214 Cal.Rptr. 139, 699 P.2d 316. The City followed by depositing the building permit in escrow.

In the instant case, the City suggests that it was not actually aware of the easement but concedes that it was on at least constructive notice (see Dkt. No. 72). When escrow closed, the easement deed to the Lions Club was recorded before the grant deed to the City. 198 Cal.Rptr. at 330. The City thus acquired the Call parcel subject to the Lions Club's easement.

Taxpayers subsequently filed a suit challenging the City's land acquisition, alleging that Hubert Call's role as city council member at the time of the transaction created a conflict of interest. The taxpayer suit itself raised no easement or Establishment Clause problem. The City, the Calls, various council members, and IGC (and its affiliates) became named defendants. The suit became known as the Thomson litigation.

In 1978, the Alameda County Superior Court found that although the transaction was non-fraudulent and although Call had abstained in the approval process, Call nevertheless had a proscribed financial interest under California's Government Code Section 1090 in the agreement between IGC and the City. The Superior Court ordered the Calls to pay the City the full *1109$258,000 amount (plus interest) received by the Calls for the parcel and denied relief as to the other defendants (Dkt. No. 44, Exh. TTT).

The Establishment Clause became part of that litigation, ironically, at the behest of the Calls. See 198 Cal.Rptr. at 336. They argued that the City's acceptance of the deed to the land burdened by the easement protecting the cross violated the Establishment Clause. The trial court, however, held that the City's acceptance of the Call parcel was consistent with the Establishment Clause because of the acquisition's secular purpose (namely, "to provide additional park land to the City"), it neither advanced nor inhibited religion, and it did not constitute excessive governmental entanglement with religion (Dkt. No. 44, Exh. TTT).

On appeal, the Calls challenged their liability and the taxpayers appealed the denied relief as to the corporate defendants. The California Court of Appeal affirmed the lower court's holding that the agreement between IGC and the City was void due to Call's proscribed financial interest in the contract under Section 1090. (This had nothing to do with the easement.) Thomson v. Call , 150 Cal.App.3d 354, 198 Cal.Rptr. 320, 342 (1983).

In challenging their liability, the Calls again argued that the City's acquisition of the land burdened with an easement protecting the "Christian type cross" was constitutionally invalid. Id. at 336.

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Bluebook (online)
323 F. Supp. 3d 1104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lions-club-of-albany-v-city-of-albany-cand-2018.