Litigation Cases v. City of Palos Verdes Estates
Citizens for Enforcement of Parkland Covenants v City of Palos Verdes Estates, et al.
In reference to Citizens for Enforcement of Parkland Covenants v. City of Palos Verdes Estates, et al., the Court of Appeal issued its decision on January 30, 2018 in favor of the City. The lawsuit challenged the City’s effort to prevent the School District from implementing its plan to sell parkland for residential development where the City and the Homes Association, along with a PVE resident, entered into a settlement. The City’s part of the settlement – commonly called the MOU – required the City to accept two parkland lots that the School District had tried to develop and convey to the Homes Association sloping parkland at the end of a cul-du-sac on Via Panorama. Before conveying the property, the City imposed an open space restriction on it. The Homes Association then sold that property to the resident, with restrictions on its use. The settlement was challenged in a case brought by John Harbison and a group created for the lawsuit called Citizens for Enforcement of Parkland Covenants (CEPC).
The Court of Appeal ruled that the City did not violate the deed restrictions or any laws by conveying the property to the Association and reversed the judgment against the City. This means that the MOU remains in effect for the part that was most important to the City: the deed restrictions protecting open space remain enforceable, including on School District property. As to the parts of the MOU litigated, the Court of Appeal has validated the City’s actions. The Association’s transfer of the property to the resident was found to be inconsistent with the deed restrictions.
The City of Palos Verdes Estates remains committed to preserving and maintaining access to parkland and open space for the enjoyment and use by the public, and it will continue to be a strong steward for protecting parkland.
Mayor’s Statement Regarding the Court of Appeal Ruling
January 31, 2018
“Yesterday afternoon the City learned that the Court of Appeal ruled in favor of the City’s position in the appeal involving the Via Panorama property.
The City appealed for two reasons: first, to protect our parklands and our local control of the parklands; second, to protect our taxpayer dollars from the award of legal fees based on what the City believed to be an incorrect legal decision. The City’s position was upheld on both points. The Court of Appeal ruled that it was inappropriate to grant the Plaintiffs special power over all of our parklands. The Court of Appeal also reversed the attorney fee award against the City.
The City’s intention, throughout this process, has been to protect the open space and neighborhood character that our residents hold dear. We intend to move forward from this point, working positively and proactively with our residents, to preserve and protect the parklands and quality of life we all enjoy in Palos Verdes Estates.”
--- Mayor James Vandever, City of Palos Verdes Estates
Please see Court of Appeal ruling here.
- City’s position with respect to the filings by the Palos Verdes Homes Association and the Luglianis.
Following the decision by the Court of Appeal, the Palos Verdes Homes Association (PVHA) and the Luglianis have each filed a request that the Court reconsider its decision. Their reasons for seeking reconsideration are set out in their requests. The Court of Appeal ruled in the City’s favor, and the issues that are identified for reconsideration do not affect the decision in the City’s favor.
The Court of Appeal reversed the summary judgment against the City and reversed the attorneys’ fees awarded against the City. Additionally, the Court of Appeal held that the City did not violate the deed restrictions or act illegally when it conveyed the property to the PVHA. The Court of Appeal’s rulings regarding the PVHA are separate and independent from the City. Questions about the PVHA’s actions should be addressed directly to its Director or Board.
The City awaits the Court conclusion(s) in reference to the Homes Association and Luglianis’ request for reconsideration of its decision.
Opening Brief for Appeal - November 7, 2016
Council decision to appeal: Questions and Answers
Here are the facts
Q: What were the factors involved in deciding to appeal the judgment? Did you consider input from residents?
Answer: The City Council weighed several factors in its consideration to appeal. The Council listened to those who opposed an appeal. While the Council understood their concerns, there were two very significant factors that stood out in the final decision:
• The serious incursion into our residents’ management of our parklands and open space, and
• The City’s exposure to ongoing legal fees that would result from the court’s decision to maintain “continuing jurisdiction” if the judgment was left unchallenged.
Another factor in deciding to appeal was that the two other defendants in this case had already decided to appeal.
For these reasons, the Council decided it was in the best interest of all Palos Verdes Estates residents to have the City join the appeal.
Q: What is the challenge to local management of our parklands?
A: The judgment contains a provision that allows the plaintiffs in the lawsuit to appear before Judge Meiers on 24 hours’ notice to seek to force the City to remove any “structure, vegetation or object” that they feel might be encroaching on City parklands and open space. This extraordinary power applies to all of the parklands in the City, not just the Via Panorama property. These are far-reaching powers given to one individual and an unincorporated organization.
Q: Why not let a private group take over control of parklands and open space?
A: The City already has rules and laws governing parklands encroachments. Taxpayer funds are currently used to maintain City-owned parklands and open spaces, and for the City to enforce laws that ensure these open spaces remain as intended. For decades, the City has effectively and successfully removed illegal encroachments on open space land to preserve the original vision and scenic beauty of Palos Verdes Estates. Under an open-government system, violators are provided a due process when served notice about an encroachment. Procedures are in place to ensure a timely removal of encroachments and for violators to pay for and assume responsibility for encroachment removals.
Local control assures accountability, transparency, established standards for decision making and an appeals procedure.
Under this judgment, the citizens of Palos Verdes Estates could be denied their chance to have public discussions or debate about the future control and enforcement of open space and parklands in the City by this special power conferred on these plaintiffs. A judge simply conferred on-going power to a private group whose organization or membership is not fully understood or public. The group or its members can exercise their power for any reason or no reason, without any accountability to the rest of our residents.
Additionally, all City decisions are subject to judicial review, and that is an important check on the exercise of government authority. This judgment, however, creates a fast-track into court for the plaintiffs without necessarily allowing the local public meetings and processes to run their course.
Q: Why spend more on legal fees to appeal this decision?
A: We believe pursuing the appeal is the best chance to save money on legal fees. If the City failed to appeal, the City would be the only party that did not appeal and faced the prospect of having to pay the plaintiffs’ attorney fees. More important, the judge’s order, as it stands, will require the City to incur legal costs every time the plaintiffs take a matter to Judge Meiers. The Council believes it is better policy to spend a smaller amount of money on an appeal to defend our residents’ right to manage the parklands compared to the significantly higher costs of multiple future court appearances and litigation expenses should the judgment remain intact.
Q: Are there other cost considerations?
A: Yes. Under the current court decision, taxpayer money may have to be used to remove any and all encroachments found on parklands and open spaces. Then the City would incur additional expenses attempting to recover costs by litigating against property owners. The removal of encroachments would change from a cooperative effort to an adversarial one. Under the current system operated by the City, violators must pay for encroachment removal. The City Council works to avoid using taxpayer money to remove encroachments – as Judge Meiers would order.
Q: Are there any parts of the court judgment that were in the City’s favor?
A: Yes. The court judgment left intact parts of the original settlement agreement, allowing the City to retain ownership of Lots C&D. It is uncertain what will be the status of the settlement agreement if the CEPC/Harbison judgment stands; that may be the subject of further litigation.
Q: Is this case about whether the city sold parklands under the settlement agreement?
A: No. The City did not sell parkland. In connection with the settlement agreement, the City conveyed the Via Panorama parcel to the Homes Association. As part of that transaction, the City also retained an Open Space Easement over the parcel, an emergency access road, and utility easements. (Note: The Open Space Easement guaranteed that all the property subject to it would remain undeveloped). In exchange, the City accepted ownership of Lots C & D for the sole purpose of preserving them as parklands. The Homes Association sold the Via Panorama parcel, subject to and burdened by the City’s easement. Thus, despite the change in ownership, the Via Panorama parcel must forever remain open space. Though the judgment did not undo the City’s conveyance or the City’s open space easement, it determined that the Homes Association’s sale of the property violated the deed restrictions.
The City entered into the settlement agreement to preserve Lots C & D as parklands because it believed that any burden resulting from the transfer of the Via Panorama parcel was outweighed by the benefit of its parklands preservation.
Q: Are there deed restrictions on City-owned parklands?
A: Yes. The City-owned property is subject to deed restrictions the same as all Palos Verdes Estates properties. Palos Verdes Estates is an entirely planned community and compliance with the deed restrictions are an important part of maintaining the City’s beauty and parklike setting.
The deed restrictions may be obtained directly from the Palos Verdes Homes Association.
The City is aware that some questions have been raised about the City's role in enforcing deed restrictions. The City must comply with the deed restrictions on property it owns and will use its resources to prevent violations by others on City property. With respect to non-City property, the City enforces the Municipal Code and the Palos Verdes Homes Association enforces the deed restrictions. This is the same as in planned communities with citywide CC&Rs such as Rolling Hills. This is also true of condominium associations or other homeowner associations that have CC&Rs, which are enforced like civil contracts.
Q: Is the City legally prohibited from selling parkland at its discretion?
What is CITIZENS FOR ENFORCEMENT OF PARKLAND COVENANTS v. CITY OF PALOS VERDES ESTATES, ET. AL about?
In May 2012, the City entered into a multi-party agreement with the Palos Verdes Peninsula Unified School District (School District), the Palos Verdes Homes Association (PVHA), and the property owners of 900 Via Panorama. The agreement is a Memorandum of Understanding (MOU) among the parties which, among other things, achieves these objectives:
Resolved litigation filed by the School District seeking to establish a right to sell open space for residential development (as agreed in the MOU, the School District dismissed the case and abandoned its effort to raise revenue through sale of open space Lots C & D);
Reaffirmed the enforceability of the deed restrictions on all property owned by the School District in the City (as agreed in the MOU, the School District formally accepted the deed restrictions limiting use of its PVE properties to either school uses or open space, abandoning its legal challenge to those limitations on all School District-owned property in PVE);
Resolved certain encroachments in one area of previously City-owned parkland near 900 Via Panorama;
Provided for the preservation of certain open space properties (Lots C & D) by transferring ownership from the School District to the City (the School District had begun to use the lots as a fenced storage yard; the City is maintaining it as open space);
Protected the dark skies in the neighborhood around Palos Verdes High School by avoiding lights on the athletic field;
Facilitated the School District obtaining $1.5 million revenue from the property owner of 900 Via Panorama (the Luglianis) and the reimbursement of $400,000 in legal expenses incurred by the PVHA in defense of the community deed restrictions. In addition, the City received $100,000 to cover ongoing maintenance costs of Lots C & D.
A copy of the MOU and associated exhibits are available here: <MOU, Exhibit 1, Exhibit 2 (part 1), Exhibit 2b (part 2), Exhibits 3 & 4>. This MOU was discussed publicly at City Council meetings and the City approved the MOU at a public meeting. The staff report for the May 8, 2012 City Council meeting is available here: <staff report> The factual history and a complete explanation of the MOU from the City’s perspective is available here: <Summary of MOU Agreement>.
John Harbison objects to one aspect of the MOU and he has formed an unincorporated association called Citizens for Enforcement of Parkland Covenants (CEPC) to sue the parties to the MOU, including the City. CEPC’s particular concern is the PVHA’s sale of a parcel of land to the Luglianis. The parcel was previously owned by the City (and is commonly referred to as Area A or Parcel A). The Parcel is subject to many deed restrictions and easements. The City holds an easement over the entirety of the property for open space, which prohibits the development of most of the lot. The City also has fire access and utility easements over portions of the lot. Like all properties in PVE, the parcel is also subject to the community CC&Rs. Under the MOU and the deed conveying the property, the parties anticipate certain limited accessory uses on a designated portion of Parcel A (such as a sport court, gazebo and a BBQ). CEPC appears to take issue with this aspect of the transaction above all else and its lawsuit seeks to undo the real estate transaction.
Where is the subject property?
Parcel A is approximately 1.7 acres of land located on the hillside below 900 Via Panorama. The overview (below) is meant to serve as a general guideline of the areas in question; for the concise perimeter, please view the perimeter survey here <survey>
The photo (below), submitted to the City by Mr. Harbison, is adjacent to Parcel A and is public right-of-way and City-owned open space (indicated above in yellow), which is not the subject property nor in contention with this lawsuit or subject to the MOU.
What is the City’s position in this case?
The lawsuit challenges the conveyances of Parcel A from the City to the PVHA and from the PVHA to the property owner of 900 Via Panorama (Luglianis). It also seeks to prevent the City from considering the Luglianis’ zoning application and to compel the City to enforce restrictions that the lawsuit claims are applicable to the property. The City will address each of the technical legal arguments in court, which is the appropriate forum.
It is the City’s position that, acting within its legal authority and in the best interests of the community when it participated (at the request of the PVHA) in the agreement, the community received important public benefits, including removing all legal doubt over the enforceability of the deed restrictions on PVE property owned by the School District.
What is at risk to the community and to the City with this lawsuit?
While plaintiff CEPC seeks primarily to undo the conveyance of Parcel A, that transaction is one piece of a complicated puzzle. It is uncertain at this point what effect the CEPC lawsuit may have on the MOU as a whole.
Who represents the City on such legal matters and how does the City respond to litigation?
The City Attorney represents the City in litigation. While the City does not comment on litigation, public information from the City on such matters is disseminated through the Mayor, City Attorney and City Manager.
Can anything be constructed on Parcel A?
The property owners would need approval from the City and the Art Jury in order to construct any accessory uses or to permit the existing retaining walls. The City imposed an open space easement across the property, which continues to be zoned as open space, in addition to deed restrictions recorded on Parcel A by the PVHA, which together prohibit development on most of the parcel. The MOU and the PVHA’s conveyance anticipate limited accessory structures and maintenance of existing retaining walls in designated portions of Parcel A. This expectation was part of the Luglianis’ incentive to participate in the MOU. Note that the Luglianis’ financial participation satisfied the School District’s goal (which the School District had sought to achieve through the litigation and sale of open space). By satisfying the School District’s fiscal goal, the path was cleared for the City and the PVHA to secure from the School District affirmation of the deed restrictions, which protected all public open space in PVE without the risk of litigation. [For a more detailed description of the risks, see <Summary of MOU Agreement>.
What is the status of the lawsuit?
The lawsuit consists of three causes of action (or claims) and was brought originally against four different parties (the City, the School District, the Homes Association and a private property owner); the plaintiffs have not pursued the case against the School District.
The court previously ordered [minute order] that one of the lawsuit’s three claims against the City be dismissed, finding it was without merit as a matter of law. The other two claims were assigned to a different judge.
On July 1, 2015 the City received the second judge’s ruling in favor of plaintiffs [judgment document], which appears inconsistent with and apparently contradicts the court's prior order dismissing one of the claims. The final judgment was signed by the court on September 24, 2015. Both the Palos Verdes Homes Association and the Luglianis appealed the judgment. After evaluating the options, the City Council likewise authorized an appeal.