Opinion
A167054
12-11-2023
GREEN TREE HEADLANDS, LLC, Plaintiff and Appellant, v. CITY OF SAUSALITO, Defendant and Respondent; TSERENPUNTSAG TSEDENDAMBA et al., Real Parties in Interest and Respondents.
NOT TO BE PUBLISHED
Marin County Super. Ct. No. CIV2103380
MARGULIES, J.
Plaintiff Green Tree Headlands, LLC (Green Tree) appeals from the trial court's denial of its petition for writ of mandate against defendant City of Sausalito (the City) after the City granted design review approval for construction of a new single-family residence by real parties in interest. Green Tree contends the trial court erred in interpreting the settlement agreement governing development of the lot at issue, in particular by giving great weight to the City's incorrect and inconsistent interpretation of that agreement. Green Tree further asserts the City abused its discretion in granting approval for the project because the City's findings that the project complied with the settlement agreement are not supported by substantial evidence. We will affirm.
I. BACKGROUND
We summarize only those facts necessary to the resolution of the limited issues raised on appeal, and incorporate the factual summary from our prior nonpublished opinion, Green Tree Headlands, LLC v. City of Sausalito (July 21, 2022, A162387) (Green Tree I).
Real parties in interest, Tserenpuntsag Tsedendamba and Oigonjargal Bazarsad (RPIs), are the owners of an undeveloped residential parcel of land in the Wolfback Ridge Estates Subdivision (Wolfback Estates) of the Marin Headlands. The parcel, purchased by RPIs in 2017, is identified as "Lot 5." RPIs are planning to build a single-family residence on Lot 5.
Lot 5 is an irregularly shaped parcel, roughly in the shape of a "C," which is 41,073 square feet and wraps around a previously developed residence. Lot 5 sits on top of a ridge that directly overlooks the Marin Headlands and Golden Gate National Recreation Area. The buildable portion of Lot 5 sits at the bottom of the C-shaped lot, on top of the ridge, and is approximately 13,500 square feet. Green Tree, which is managed by Steven McArthur, owns real property identified as "Lot 3" of the Wolfback Estates, located at 51 Wolfback Ridge Road.
In December 1989, a final environmental impact report (FEIR) was completed for the proposed subdivision that would become Wolfback Estates. The FEIR incorporated the draft environmental impact report (DEIR), and was certified complete by the City in January 1990. The FEIR identified environmental impacts associated with the proposed subdivision which were expected to be significant, and proposed mitigation measures to guide future development in the subdivision. As part of the project description for Wolfback Estates, the FEIR states: "6. Anticipated Home Characteristics. [¶] The 13 custom homes in the project would be expected to range in size from approximately 2,000 to 4,000 square feet. They would contain three to four bedrooms, two to three bathrooms, and two-car garages. They are likely to include single-story, split-level, and two-story configurations in a variety of architectural styles....Home designs are also likely to contain elevated elements and decks in order to take advantage of the spectacular views from the site." The FEIR also contained 13 architectural standards for mitigating the visual impact of development on Wolfback Ridge.
In 1990, the City sought to deny approval for the subdivision. Developers Alan Patterson and Carolyn Wean sued the City, and eventually the parties entered into a settlement agreement in 1993, amended in 1997, which created Wolfback Estates (settlement agreement). Lot 5 is subject to the settlement agreement. The settlement agreement contains a provision stating as follows: "1. Application of FEIR. All of the environmental issues having an impact on the project proposed by the Petitioners herein are contained in the document entitled Final Environmental Impact Report for the Proposed Wolfback Estates Project dated December 1989 [(FEIR)] . . . which incorporates the [DEIR] .... The parties herein extract those portions of the FEIR which pertain directly to the development of the property in the manner as agreed to in this Settlement Agreement, provided, however, that to the extent that any provision of this Agreement is unclear, incomplete or at variance with the FEIR, the FEIR shall be the overriding document and shall prevail." (Italics added.)
Among the provisions of the FEIR expressly incorporated in the settlement agreement are architectural standards set forth in paragraph 7 of the settlement agreement. As relevant to Green Tree's claims on appeal, "Architectural Standard (h)" (hereafter Architectural Standard H) provides: "Hillside and ridge top design should incorporate a combination of small volume and varying surface planes to create visual interest and to avoid, if possible, conspicuous large bulk structures and box-like masses." (Italics added.)
In 2017, RPIs purchased Lot 5 and hired Architect Scott Couture to help them plan their residence. Couture met with then-Senior Planner Calvin Chan and then-Community Development Director Danny Castro to seek determinations as to how the City would apply the language of its planning code to Lot 5 so Couture could develop the project in accordance with applicable development standards.
In July 2018, Couture submitted an application for a design review permit for RPIs' proposed residence. The project includes a single-family residence of 5,120 square feet, and a subterranean garage that is 1,465 square feet.
Between November 2019 and April 2021, the City held four noticed public meetings to discuss RPIs' application. On April 21, 20121, the City's planning commission passed and adopted Resolution No. 2021-10 by a vote of three to two, which approved the design review permit for construction of the project. Green Tree and others appealed the resolution to the city council on 18 different grounds. The city council denied the appeal and upheld the decision of the planning commission granting project approval by a vote of four to zero.
In October 2021, Green Tree and Bruce T. McMillan filed a petition for writ of mandate challenging the design review approval. As relevant to this appeal, they alleged the large size of RPIs' proposed home violates the provisions of the settlement agreement and the City abused its discretion because its finding that the project complies with the settlement agreement is not supported by the evidence.
McMillan is also a neighbor of RPIs. Although he was a party to Green Tree I and the trial court proceedings in this case, he did not appeal the decision denying the petition for writ of mandate here.
The trial court denied the petition for writ of mandate in its entirety and subsequently entered judgment in favor of the City and RPIs. With respect to the claim raised on appeal, the trial court ruled as follows:
We have changed the text of the court's order from all caps text to normal capitalization to improve readability. We have also omitted the court's record citations.
"Petitioners argue that the settlement agreement must be read in conjunction with the environmental impact report ('EIR'). The EIR consists of the 1990 [FEIR], which incorporated the [DEIR]. The settlement agreement provides: 'The parties herein extract those portions of the FEIR, which pertain directly to the development of the property in the manner as agreed to in this settlement agreement, provided, however, that to the extent that any provision of this agreement is unclear, incomplete or at variance with the FEIR, the FEIR shall be the overriding document and shall prevail.' Petitioners contend that the EIR is premised on studying the impact of potential homes ranging in size from 2,000-4,000 square feet with 3-4 bedrooms, 2-3 bathrooms, and a 2-car garage, and thus the intent was to limit future development to small, low-profile, visually adaptive homes.
"Petitioners contend that the project failed to comply with the settlement agreement because the project is actually a 6,585 square foot home (including the subterranean garage) that was treated as only a 3,900 square foot home and thus the project falls far outside the EIR's contemplated 2,000-4,000 square foot range and the 'small volume', 'low profile' and 'subordinate' to the ridgeline guidance of the architectural standards.
"The City did not abuse its discretion in determining the project was consistent with, and did not violate, the settlement agreement. The settlement agreement, by its terms, extracted certain portions of the EIR, such as the architectural standards expressly set forth in paragraph 7 of the settlement agreement. It did not state that all guidelines or mitigation measures discussed in the EIR must be implemented for lots within the Wolfback Estates subdivision. The settlement agreement itself does not specify any limits on size, and it does not expressly incorporate any portion of the EIR that provides for size limits. With respect to [Architectural Standard H], which was expressly incorporated into the settlement agreement, the City's interpretation of 'small volume' was reasonable as the language on its face relates to surface planes, not building size. The City's findings that the project complied with other architectural standards, focusing on elements such as the use of varying surface planes and the location of the garage and lower floor areas below grade to decrease visibility, are supported by substantial evidence."
Plaintiff timely appealed from the judgment.
II. DISCUSSION
A. Standard of Review
The parties disagree as to the appropriate standard of review. Although they agree generally that the City's interpretation of the settlement agreement is subject to independent review, plaintiff contends the trial court erred in according deference to the City's interpretation of the settlement agreement under the standard articulated by our Supreme Court in Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7-8 (Yamaha), while the City and RPIs contend deference to the City's interpretation is appropriate.
1. General Principles
On review of a decision on a petition for writ of administrative mandate under Code of Civil Procedure section 1094.5, we have the same role as the trial court. We determine whether (1) the agency proceeded without, or in excess of, jurisdiction; (2) there was a fair hearing; and (3) the agency abused its discretion. (McAllister v. California Coastal Com. (2008) 169 Cal.App.4th 912, 921-922.) An abuse of discretion is established if the respondent has not proceeded in a manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence. (Code Civ. Proc., § 1094.5, subd. (b); McAllister, at p. 921.)
In granting design review approval, the City was required to review the project under its general plan, the municipal code, and the settlement agreement to which the City is a party. As to pure questions of law, such as the City's interpretation of its own regulations and the settlement agreement, our review is de novo. (Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1339; Harrington v. City of Davis (2017) 16 Cal.App.5th 420, 434.) Nonetheless, a city's interpretation of its own laws"' "is entitled to great weight unless it is clearly erroneous or unauthorized." '" (Berkeley Hills Watershed Coalition v. City of Berkeley (2019) 31 Cal.App.5th 880, 896 (Berkeley Hills), quoting Anderson First Coalition v. City of Anderson (2005) 130 Cal.App.4th 1173, 1193.)
In determining what weight to give a city's interpretation, we apply the "complex factors" set forth by our Supreme Court in Yamaha. (Yamaha, supra, 19 Cal.4th at p. 12 [weight to be given an agency's interpretation is "fundamentally situational" (italics omitted)].) The four factors include: (1) whether" 'the agency [or city] has expertise and technical knowledge' "; (2) "indications of careful consideration by senior agency [or city] officials"; (3) "evidence that the agency [or city] 'has consistently maintained the interpretation' "; and (4) "indications that the agency's [or city's] interpretation was contemporaneous with legislative enactment of the statute being interpreted." (Id. at pp. 12-13.)
B. Interpretation of the Settlement Agreement
Green Tree contends the settlement agreement governing development of Lot 5 requires that new homes constructed in Wolfback Estates must be limited to a maximum size of 4,000 square feet with a two-car garage, and that the 5,120-square-foot home and 1,465-square-foot garage approved by the City in this case violates the settlement agreement.
As an initial matter, the parties disagree as to whether the City's interpretation of the settlement agreement is entitled to any deference under Yamaha, and spend a substantial portion of their briefing on appeal discussing that question. Although we are not persuaded that all of the Yamaha factors favor Green Tree's position that the City's interpretation of the settlement agreement is entitled to no deference, we need not resolve the issue because even without according any deference to the City's interpretation, we conclude it did not err in finding the project complies with the terms of the settlement agreement. (See, e.g., Berkeley Hills, supra, 31 Cal.App.5th at p. 897 [concluding a city's interpretation of its own ordinance was correct even without granting deference to its opinion]; PacifiCare Life &Health Ins. Co. v. Jones (2018) 27 Cal.App.5th 391, 408 [concluding Insurance Commissioner's interpretation of statute was correct even without according it deference].)
Green Tree argues that both the City and the trial court erred in interpretating the settlement agreement for two reasons: first, they failed to consult the entire FEIR to interpret unclear and ambiguous phrases in the architectural standards, and second, they ignored the "small volume" requirement within the architectural standards which is ambiguous without reference to the size restrictions in the FEIR. Green Tree asserts the failure to treat the FEIR, including its size restrictions, as incorporated into the settlement agreement is reversible error.
As to its first contention, Green Tree specifically asserts the trial court erred in focusing only on the language in the FEIR pertaining to architectural standards and failed to consult the "entire FEIR document" to interpret those standards. As noted above, the settlement agreement states: "The parties herein extract those portions of the FEIR which pertain directly to the development of the property in the manner as agreed to in this Settlement Agreement, provided, however, that to the extent that any provision of this Agreement is unclear, incomplete or at variance with the FEIR, the FEIR shall be the overriding document and shall prevail." (Italics added.) Green Tree argues that because the italicized language in the second half of this provision refers to the FEIR (which includes both the FEIR and the DEIR), the entire FEIR document is the overriding document, not only those portions of the FEIR that are extracted in the settlement agreement. Because the trial court focused narrowly on the language of the architectural standards that were expressly incorporated, Green Tree asserts, the court failed to consider the meaning of those provisions in light of the entire EIR.
Although not binding on us, we observe the trial court's reading of this provision appears correct. The plain language in the first part of the disputed provision states that the parties to the settlement agreement "extract those portions of the FEIR which pertain directly to the development of the property." The second clause of the sentence regarding any lack of clarity, completeness, or variance (in which case the FEIR prevails), logically refers to the first clause regarding "those portions of the FEIR which pertain directly to the development of the property" and have been incorporated in the settlement agreement. Moreover, the settlement agreement expressly states that the architectural standards contained therein "are more fully explained in the FEIR at pages 86 and 87." Given the specificity of this language, it does not appear the parties to the settlement agreement intended the entire FEIR to govern interpretation of the architectural standards.
In any event, even if the entire FEIR must be consulted to interpret the architectural standards, Green Tree's contention that it dictates the size of homes that may be constructed in Wolfback Estates is untenable. We have reviewed the FEIR, and nowhere does it contain express size limits on residences that may be constructed. The language regarding size of homes on which Green Tree relies is contained in the FEIR's general project description for the planned subdivision, not specific guidelines or mitigation measures which must be met. On its face, the language in that description is vague and nonspecific-it refers to "Anticipated Home Characteristics," stating the "13 custom homes in the project would be expected to range in size from approximately 2,000 to 4,000 square feet," with three to four bedrooms, two to three bathrooms, and two-car garages. (Italics added.) The description notes the home designs are "likely" to include a variety of building configurations in a variety of architectural styles, and are "likely" to contain elevated elements to take advantage of views. This language, which is the only language in the FEIR referencing the anticipated and approximate size of the homes in the subdivision, is simply too vague to constitute a mandatory limit on the size of structures. Nor is the project description cross-referenced anywhere else in the document where specific mitigation measures (including the architectural standards incorporated in the settlement agreement) are discussed. Accordingly, we disagree with Green Tree that the project description language in the FEIR constitutes an upper limit on the size of homes that may be constructed in Wolfback Estates.
Green Tree next contends the language in the project description regarding anticipated sizes of the homes is necessary to interpret the ambiguous, "non-objective" phrases contained in the architectural standards. Specifically, Green Tree asserts the project description gives meaning to the phrase "small volume" in Architectural Standard H of the settlement agreement.
As described above, the settlement agreement specifically incorporates provisions of the FEIR regarding architectural design standards to be employed in homes built in Wolfback Estates. Green Tree focuses on Architectural Standard H, which provides: "Hillside and ridge top design should incorporate a combination of small volume and varying surface planes to create visual interest and to avoid, if possible, conspicuous large bulk structures and box-like masses." (Italics added.) The trial court concluded that "small volume" in that standard "on its face relates to surface planes, not building size." Green Tree contends this interpretation is incorrect because the "actual language of Architectural Standard H clearly indicates that the homes in Wolfback Estates must be 'small volume' and utilize varying surface planes." Green Tree argues the settlement agreement uses two different terms, i.e., "small volume" and "varying surface planes," which refer to two distinct concepts. Acknowledging that "small volume" is not defined in the settlement agreement, Green Tree urges us to use "familiar insights about conventional language usage" to conclude that "volume" measures three dimensions and "surface planes" measures two dimensions. Thus, "volume" refers to the interior of the home and surface planes refers to the fagade. The City and RPIs contend the trial court correctly interpreted the provision because both "small volume" and "varying" describe and modify "surface planes."
Green Tree asserts that the "conventional measurement for a home which most closely approximates 'volume' or 'mass' is square footage, as homes' volumes are not typically measured in cubic square feet."
We have reviewed closely the terms of both the settlement agreement and the FEIR. As an initial matter, we note a discrepancy between the language used in the two documents. The settlement agreement provides, "Hillside and ridge top design should incorporate a combination of small volume and varying surface planes to create visual interest ...." (Italics added.) The FEIR's architectural standard, on the other hand, states that "Hillside and ridgetop building designs should incorporate a combination of small volumes [(plural)] and varying surface planes to create visual interest ...." (Italics added.) Under the express terms of the settlement agreement, to the extent the settlement agreement is "at variance with the FEIR," the FEIR prevails. Accordingly, we consider the meaning of the phrase "small volumes and varying surface planes" as it appears in the FEIR.
On our independent review of the record, however, we disagree with Green Tree that this phrase is ambiguous. "The interpretation of a contract is a judicial function." (Wolf v. Walt Disney Pictures &Televisions (2008) 162 Cal.App.4th 1107, 1125 (Wolf).) Courts give effect to the parties' intent at the time of contracting. (Civ. Code, § 1636.) "Ordinarily, the objective intent of the contracting parties is a legal question determined solely by reference to the contract's terms," which govern interpretation. (Wolf, at p. 1126; Civ. Code, §§ 1638, 1639.) "We ascertain that intention solely from the written contract if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. [Citation.] We consider the contract as a whole and interpret its language in context so as to give effect to each provision, rather than interpret contractual language in isolation. [Citation.] We interpret words in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. [Citation.] If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs." (Legacy Vulcan Corp. v. Superior Court (2010) 185 Cal.App.4th 677, 688.)
Looking to the plain language of the contract and the context in which it appears, there is no ambiguity here. First, the words of the architectural standard itself clearly indicate the standard is concerned with visual appearances, not square footage or the size of the buildings. The standard requires that "building designs should incorporate a combination of small volumes and varying surface planes to create visual interest and to avoid conspicuous, large-bulk structures and box-like masses." (Italics added.) On its face, this language describes the use of small volumes and varying surface planes in the design of the building to break up the fagade and avoid the appearance of "large-bulk structures and box-like masses." This language clearly deals with the visual impact of the building and not its overall size.
We also observe this interpretation appears to be consistent with Green Tree's attorney's own analysis below. In a letter to the planning commission, she wrote: "[Architectural] Standard H mandates that hill top and ridge top design incorporate a combination of small volume and varying surface planes to create visual interest and avoid, if possible, conspicuous large bulk structures and box-like masses. The proposed residence reads like a large glass box on the ridge, and this standard was specifically designed to prevent that." (Italics added.)
Moreover, while Green Tree urges us to examine the entire FEIR to interpret the settlement agreement, doing so only reinforces our conclusion. Looking at the language of the FEIR as a whole and the plain language of the architectural standards in context, the meaning of the disputed Architectural Standard H becomes even clearer. The 13 architectural standards incorporated into the settlement agreement come from the "Visual Factors" section of the FEIR. The introduction to that section explains that the "visual implications of additional residential development on Wolfback Ridge are a project concern, including potential impacts of the proposed 13-unit PUD [(planned unit development)] on the valued visual character of Wolfback Ridge in general, and on views of the ridge from Sausalito vantage points to the east, from Golden Gate National Recreation Area vantage points to the west, from the Golden Gate Bridge to the south, and from Highway 101 below. This EIR describes the possible impacts of the project on these vantage points, and possible measures to reduce these visual impacts to insignificant levels." (Italics added.) The architectural standards, in turn, appear in a subsection of the "Visual Factors" section, titled "Mitigation Measures." About the architectural design standards, the FEIR states they "should be incorporated in the PUD and CC&Rs [(conditions, covenants, and restrictions)] to ensure against the construction of conspicuous sideslope or residential structures which would adversely affect the character of Wolfback Ridge. The standards should be formulated to achieve the following visual impact mitigation objectives: ...." (Italics added.) As all of this language makes clear, the architectural standards, including the settlement agreement's Architectural Standard H, were intended to address concerns about the appearance of the structures and the visual impacts from Wolfback Ridge, not the size of the buildings themselves.
Even if there were ambiguity in the use of the phrase "small volumes," nothing in the settlement agreement or the FEIR suggests that phrase was meant to limit the square footage of the homes constructed. The only reference in the FEIR to building size is the general project description, which appears 45 pages before the architectural standards in a different section of the FEIR. The architectural standards do not discuss, cite, or reference the project description, which itself only provides approximations of the size of the anticipated buildings, not specific limitations. Had the agreement intended to restrict the size of the buildings to a maximum square footage, it easily could have done so.
We also reject Green Tree's confusing and incorrect legal argument that we should interpret the settlement agreement using principles of statutory interpretation and consider the" 'legislative history' of the Settlement Agreement," which Green Tree contends includes a "contemporaneous City Attorney memo." (Italics added.) To the extent Green Tree is arguing that the memorandum, recommending approval of an amendment to the settlement agreement, constitutes admissible parol evidence that helps us understand the intent of the parties when they entered the settlement agreement, we find the argument unavailing. (See, e.g., Wolf, supra, 162 Cal.App.4th at p. 1126 [extrinsic evidence may show ambiguous language is susceptible to more than one reasonable interpretation but cannot vary or contradict the contract].) Even if we were able to and did consider the memorandum, nothing in it concerns the size of the properties to be developed. As Green Tree acknowledges, the memorandum describes the historical context for the settlement agreement, including the "very troubling environmental picture" for the Wolfback Estates project and identifies concerns the planning commission had about, among other things, the "visual impacts" of developing Wolfback Ridge. But Green Tree fails to explain how those concerns translate to an express limit on the square footage of construction. Accordingly, even if we were to consider the extrinsic evidence it would not change our analysis.
In sum, our de novo review of the terms of the settlement agreement leads us to conclude the language of Architectural Standard H is not ambiguous, and to the extent there is any ambiguity in that standard, it is not susceptible to an interpretation that places an express square footage limit on the size of homes developed in Wolfback Estates. Accordingly, Green Tree has not shown that the City erred in finding the project complied with the terms of the settlement agreement.
C. Substantial Evidence
Green Tree next contends the City and the trial court erred in determining that RPIs' proposed residence complies with the settlement agreement because the finding that the "above-grade" portion of the design is 3,900 square feet is not supported by the evidence. This argument depends on the assertion we have already rejected that the settlement agreement limits the size of homes to 4,000 square feet. Given that interpretation, we reject Green Tree's argument.
Finally, Green Tree makes a conclusory argument that the settlement agreement requires homes to be subordinate to the ridgeline, whereas the silhouette of RPIs' home will rise above the ridgeline. We reject this argument as well, because the architectural standard Green Tree apparently cites, but does not discuss, provides: "The design of residential and accessory structures should be subordinate to existing hillside and ridge line forms. Hillside and ridge crest homes should be constructed in multiple levels to achieve a better fit with the existing side slopes, reduce the need for grading, increase overall visual compatibility with Wolfback Ridge and maximize architectural interests." Importantly, the standard does not require homes to be below the ridgeline, only that the design be subordinate to existing hillside and ridgeline forms and compatible with existing characteristics of the site. In approving the project, the City found that the "proposed residence is not only to be constructed in multiple levels, but a substantial portion of the residence is proposed to be developed below grade. This not only allows better integration into the hillside and overall compatibility with Wolfback Ridge, but also facilitates compliance with the development restrictions placed on the subject property by the [settlement agreement]." The City's finding that the project complies with the settlement agreement is supported by substantial evidence.
III. DISPOSITION
The judgment is affirmed. The City and RPIs are to recover their costs on appeal.
WE CONCUR: HUMES, P. J., BANKE, J.