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March 28, 2007 -

New Case: Feduniak v. California Coastal Commission

California’s Sixth District Court of Appeals issued an opinion today in Feduniak v. California Coastal Commission, rejecting a claim of estoppel against the Commission by homeowners in Monterey County.

The Feduniaks had purchased a home on 17-Mile Drive in the Asilomar Dunes area of Pebble Beach in Monterey County. The lot included a three-hole pitch-and-putt golf course, which was installed without permits or permission. As part of the permitting process for a previous construction permit, the previous owners had given the Commission an easement “recorded an irrevocable offer to dedicate an open space easement, which incorporated by reference the specific provisions of the permit, in which they agreed “to restrict development on and use of the Property so as to preserve the open-space and scenic values present on the property and so as to prevent the adverse direct and cumulative effect on coastal resources and public access to the coast which could occur if the Property were not restricted.” The easement was recorded, but not picked up by the title search company used by the Feduniak’s in their purchase of the home.

After receiving the permit, the prior owners modified the plan without informing the coastal commission, constructing the golf course. The Feduniaks relied on the assertions of the prior owners, and the title company report, when purchasing the property, and believed their were no issues with the property as it was being used. They reportedly would not have spent the $13 million for the property if the golf course were not there. When the golf course was discovered to be a violation, they claimed the Coastal Commission was estopped from requiring it’s removal.

Their claim was based on evidence the commissioner members had seen the golf course and it had been in place for a number of years prior to their purchase of the property. The trial court agreed, ruling that “the Commission should have known that the golf course violated the easement and permit restrictions because (1) the golf course was easily visible, (2) it had been there for 18 years, and (3) the Commission did not inspect the site for compliance until 2002.”

The appellate court disgreed. They held that knowledge of the golf course’s existence was not the same as knowledge that the golf course was a violation, and that the Commission had no duty to inspect the site for ongoing compliance. They also held that policy reasons can prevent estoppel from being applied against government agencies, and those reasons were present in this case.

The Appellate Court did note that the Feduniaks may well now have causes of action against both the prior owners and their title insurance company.

Impacts for coastal property owners: Clear law that prior violations are not erased by a sale, or grandfathered into legality by the mere passage of time. It should be interesting to see where this dispute goes from here.

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