Judge: Stephen P. Pfahler, Case: 23STCV22106, Date: 2024-01-25 Tentative Ruling

Case Number: 23STCV22106    Hearing Date: January 25, 2024    Dept: 68

Dept. 68

Date: 1-25-24

Case #23STCV22106

Trial Date: Not Set

STAY

MOVING PARTY: Defendant, Los Angeles County Metropolitan Transportation Authority

RESPONDING PARTY: Plaintiff, Wilshire Gayley, LLC

RELIEF REQUESTED

Motion for Stay Pending Adjudication of Writ of Mandate

SUMMARY OF ACTION

Plaintiff Wilshire Gayley, LLC alleges a grant of entitlements to construct a residential tower, with a subterranean parking lot on a 26,816 sq. ft. parcel on the corner of Wilshire Blvd. and Gayley Ave. Approximately two years following approval of the project, Defendant Los Angeles County Metropolitan Transportation Authority began an extension project of the Purple Line public transportation system, which would run adjacent to the Wilshire Gayley, LLC project. Vested rights were extended until June 13, 2023.

In 2016, University of California Los Angeles/Regents of the University of California and/or City of Los Angeles requested the placement of a station portal adjacent to the Wilshire Gayley property. While no modifications to the residential project were ordered at the time of or after the announced extension, the building permit process was subsequently conditioned on approval from Los Angeles County Metropolitan Transportation Authority.

The parties sought solutions for allowing construction to proceed on the residential project, including specific address of seismic and soil analysis. According to Wilshire Gayley, Los Angeles County Metropolitan Transportation Authority continues to impose demands rendering construction unfeasible and/or refuses to approve of multiple proposed construction solutions, thereby preventing Wilshire Gayley from obtaining a construction permit for the City of Los Angeles. The continued delays in construction both substantially increases costs, and threatens a lapse of entitlements for the construction project.

On September 13, 2023, Wilshire Gayley, LLC filed a complaint against Los Angeles County Metropolitan Transportation Authority, et al. for Inverse Condemnation, Nuisance, Dangerous Condition of Public Property, and Declaratory Relief.

RULING: Granted.

Request for Judicial Notice: Granted.

The court takes judicial notice of the filed pleadings, and notice, but cannot take judicial notice of the content of any and all said items for the truth of the matter asserted.

Defendant, Los Angeles County Metropolitan Transportation Authority (MTA) moves for a stay of the action pending litigation of a writ of mandate, 21STCP03121, Wilshire Gayley, LLC v. Los Angeles County Metropolitan Transportation Authority, et al. (Department 86). MTA moves for the stay on grounds that both actions involve the same parties over the same construction project. MTA acknowledges the distinction between the writ—a challenge to the construction permit approval process—versus the subject action—an action seeking inverse condemnation damages from the loss of use of the property caused by an adjacent public project. Nevertheless, MTA maintains any adjudication of the damages claim is premature pending adjudication of the writ of mandate. Wilshire Gayley, LLC (WG) opposes the motion on grounds that the respective actions seek separate and distinct relief, and are therefore sufficiently decoupled for purposes of independent adjudication of the claims. MTA in reply emphasizes the interrelated nature of the actions given the potential impacts to the design and construction of both projects pending resolution of the writ. Any potential order from the writ will directly impact the scope of the damages claim.

“Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) It remains substantively undisputed from the carefully drafted writ of mandate and separately filed complaint for inverse condemnation that WG seeks different bases of relief albeit on claims arising from the same construction projects. WG cites a valid basis for recovery for the recovery of damages caused as a result of the mitigation process with MTA and consequential delays to the construction permit. (See Holtz v. Superior Court (1970) 3 Cal.3d 296, 311; see also CUNA Mutual Life Ins. Co. v. Los Angeles County Metropolitan Transportation Authority (2003) 108 Cal.App.4th 382, 393.)

Nevertheless, the declaratory relief actions in the respective actions, while pleading for certain forms of distinctive relief, effectively encompass the mitigation measures dispute:

“116. Thus, WG seeks a declaration of its rights or duties with respect to the Project; particularly that: (1) ZI No. 1117 does not apply to or have any legal effect on the Project; (2) Metro does not have the right to impose requirements on the Project through ZI No. 1117; (3) due process would be frustrated if WG is forced to comply with ZI No. 1117; (4) the City cannot condition issuance of a building permit on the requirement that WG assess whether Metro’s Station will impact the Project and whether design changes need to be made to the Project to account for Metro’s Station; and (5) that Metro cannot interfere with the WG permitting process with the City or otherwise prevent WG from pulling permits in the ordinary course, including, but not limited to, the main building permit and early start permits for excavation and shoring.”

“93. An actual, present controversy exists between WG on the one hand and Metro, and Regents on the other, specifically as to whether the application of excessive pressure to the WG Property resulting from the installation of Metro’s SOE System beneath the ground surface on Lot 36 at the westerly boundary line of the WG Property constitutes the taking and use of an easement in the WG Property.

94. Metro and Regents contend they have not created and are not using an easement in the WG Property and WG contends Metro and Regents have done so and are using, and will continue to use, an easement.

95. WG seeks a declaration that such an easement exists in the WG Property and has been taken and is being used by Metro and Regents without WG’s consent and the payment of just compensation in violation of Article 1, Section 19 of the California Constitution.”

The allegations somewhat factually dovetail at the point where the MTA demands for mitigation measures for both the structural integrity of the residential project and outlet station intersect. Whether and when construction will proceed through via signoff on the construction permit by MTA remains integral to the writ, but also impacts the potential scope of mitigation damages and/or complete loss of use of damages. (Holtz v. Superior Court, supra, 3 Cal.3d at p. 311; CUNA Mutual Life Ins. Co. v. Los Angeles County Metropolitan Transportation Authority, supra, 108 Cal.App.4th at p. 393.)

Case law analyzing the scope of a stay on a writ of mandate addresses the process: a writ of mandate follows upon the finding of a “regulatory taking” rather than a final determination. (Hensler v. City of Glendale (1994) 8 Cal.4^th 1, 13.) WG challenges application of the authority based on denial of a regulatory taking and instead pushes for a finding of a ripe claim for inverse condemnation. Regulatory takings are conditionally defined as “one that results from the application of zoning laws or regulations which limit development of real property.” As part of the determination of a regulatory taking, “the owner must afford the state the opportunity to rescind the ordinance or regulation or to exempt the property from the allegedly invalid development restriction once it has been judicially determined that the proposed application of the ordinance to the property will constitute a compensable taking.” (Ibid.)

WG seeks distinction based on a claim of “physical damage” to the property due to MTA tunneling activity already occurring, though admittedly no construction activity has occurred on the WG property. “When property is damaged, or a physical invasion has taken place, an inverse condemnation action may be brought immediately because an irrevocable taking has already occurred.” (Ibid.) It remains unclear how the property otherwise suffered damage or a physical invasion in the instant action. Tunneling constitutes a necessary form of construction of the MTA subway tunnel, but nothing in the complaint or opposition suggests a finding of any actual tunneling underneath the actual WG property, or destabilization of the parcel itself. Again, the dispute involves structural mitigation measures required for the placement of the station adjacent to the proposed residential development. WG also presents insufficient substantive argument on the issue of a complete deprivation of an “economically feasible use of the property,” thereby also potentially supporting the finding of an immediate claim for inverse condemnation. (Ibid.)

Given the efforts to proceed with construction via the writ of mandate, the court finds the damages claim submitted in the subject action at a minimum effectively requires a finding of the impacts of required mitigation measures. The court finds the circumstances of the currently negotiated process constitutes a land use/development rite public versus private debate, and therefore a regulatory taking issue for purposes of considering the imposition of a stay. (Ibid.; see Mola Development Corp. v. City of Seal Beach (1997) 57 Cal.App.4th 405, 407.) The court grants the motion to stay the action pending adjudication of the writ of mandate.

Case Management Conference set for February 1, 2024. The court will set an OSC re: Status of the Writ of Mandate and Stay of the Action.

MTA to give notice to all parties.