The owners of adjacent bluff-top homes applied to the City of Encinitas in 2003 for authorization to replace an erosion control structure and bluff wall, as well as the lower portion of a staircase that gave the owners access to the beach below. The city approved the project but conditioned its approval on the homeowners obtaining a permit from the California Coastal Commission. By the time the Commission considered the permit application, a severe storm had caused the bluff below the homes to collapse. The applicants therefore sought to demolish the remaining erosion control structure, construct a new seawall and bluff protection, and reconstruct the lower stairway. The Commission approved the permit subject to numerous special conditions, including precluding reconstruction of the stairway and limiting the permit’s duration to 20 years. Lynch v. California Coastal Commission (Sept. 9, 2014) 14 C.D.O.S. 10586.
The homeowners challenged the special conditions of the permit. Meanwhile, they signed and recorded the required deed restrictions, satisfied the other prerequisites to permit issuance, obtained the permit, and constructed their project. The Commission argued the owners could no longer proceed with their action because they had agreed to the permit conditions and accepted the benefit of the permit. The trial court found the homeowners had not specifically agreed to nor necessarily accepted the challenged conditions, but the court of appeal disagreed.
The appellate court iterated the maxim that “he who takes the benefit must bear the burden”; i.e., after accepting the benefits of the permit, they could not then challenge aspects of the permit with which they disagreed. The court did not find that the homeowners fit under any exceptions to this general principle. The exception allowing a developer to comply with a condition under protest and proceed with development while simultaneously challenging the condition did not apply to conditions imposed by state agencies or to conditions restricting the manner in which the developer may use its property. The exception for when an agency imposes new conditions on a permit for a later phase of a project already underway did not apply here, as the project did not fit those parameters.
The court did not agree that there should be an “under protest” exception for permit applicants who are opposed to nonfee conditions and desire to build their projects while simultaneously challenging the conditions. The exception would effectively swallow the general rule, as almost all permit applications are submitted by applicants who view the conditions unfavorably. Furthermore, allowing applicants to accept a permit’s benefits while challenging its burdens would foster litigation and create planning uncertainty. Finally, an invalid nonfee condition is not readily quantified or remedied. The court noted that interpretation of deed restrictions is the same as interpretation of contracts, and stated it was “unwilling to condone deliberate subterfuge in recorded documents as doing so would subvert the documents’ noticing function.”
Even if respondents had not waived their right to challenge the permit conditions, the court reasoned, the Commission had lawfully limited the duration of respondents’ permit. The Commission’s findings provided substantial evidence that the seawall would likely need substantial changes within 20 years and would have long-term impacts on adjacent properties. The court found no authority categorically precluding the Commission from imposing a condition limiting the duration of a permit. The court also noted that the reconstruction of the lower stairway required a permit, and therefore must conform to the city’s local coastal program. The court found the reconstruction inconsistent with both general plan policies and coastal bluff overlay regulations, and thus inconsistent with the city’s local coastal program.
The dissent argued that the homeowners had not waived their right to challenge the permit conditions, as they had followed all the legal requirements for challenging the conditions and had put the Commission on notice of their objections and intent to challenge them in court.
The dissent concluded that section 30235 of the California Coastal Act precluded the Commission from imposing any condition on the seawall except a condition intended to eliminate or mitigate the seawall’s adverse impacts on the local shoreline sand supply. The majority argued that this position had been rejected in Ocean Harbor House Homeowners Association v. California Coastal Commission. The majority also argued that the conditions were intended to mitigate the project’s adverse long-term impacts.
Finally, the dissent argued that the Commission’s actions violated the Takings clause. The majority argued that until the Commission reached a final decision on future applications for renewals of the seawall, any takings claim was not ripe for adjudication.