Irvine Co. Legally Owned 3 Islands in Bay It Sold to State, Judge Rules

The Irvine Company was the legal owner of land in Upper Newport Bay that it sold to the state for $3.4 million in 1975, a judge ruled Tuesday.

The decision may be appealed, according to Frank and Frances Robinson, the Newport Beach couple who first battled the giant developer to a judicial and political standstill over plans to bring the same sort of development to the back bay as that now bordering Newport Harbor.

The company, which paid more than $500,000 in fees defending the lawsuit filed in 1979 by the Robinsons and the Sierra Club, considers Tuesday’s ruling a vindication of its long-held position, according to Raymond E. Watson, a company director.

Irvine Co. General Counsel Peter Zeughauser said he may ask that the firm’s costs be paid by the plaintiffs.

Sierra Club attorney Philip S. Berry had alleged in a monthlong trial that the firm knew--when the company accepted $3.4 million from the state for Upper, Lower and Shellmaker islands in the back bay--that the state already owned the land.

Watson, then president of the company, signed the deal with the state creating the Upper Newport Bay Ecological Preserve and settling earlier litigation over the back bay. Lawyers for the state, though not defendants in the earlier litigation, supported the agreement with the company.

Orange County Superior Court Judge Judith M. Ryan said in announcing her decision Tuesday: “I find the settlement agreement is valid and should be upheld. At all times up to the settlement, the Irvine Co. had a good-faith belief that its title to the islands was valid.”

Watson, a star witness who sat through several parts of the trial, said he was pleased by the decision, but added: “I’m saddened by the amount of time and money that everybody--including the public--had to spend after what we thought was an agreement reached in good faith. The public has the property. I jog down there; everybody enjoys it. That’s what was achieved, and I think it was a fine compromise at that time.”

Berry, past president of the Sierra Club, declined comment. Asked whether he will consider an appeal, Robinson said, “You betcha, sure.”

“Twenty elephants will always beat up on a couple of fleas,” Robinson said, describing his view of the powerful forces he battled.

The case turned on Ryan’s conclusion that the environmentalists failed to clearly prove that the islands in the upper bay were tidelands when California was admitted to the Union in 1850.

Upon admission, all tidelands, or lands below high tide, passed to the state in trust for the public. A series of statutes, constitutional changes and court decisions have made it impossible for the state to transfer tidelands into private hands. Other state-owned lands above high tide are not similarly protected.

Berry tried to show by a combination of scientific analysis and historical documents that the back bay’s islands did not exist in 1850, but arose as swampland after statehood.

Irvine Co. lawyers Gregory P. Lindstrom and Edgar B. Washburn argued that the earliest evidence showed that the islands did exist as swamp above high tide. Therefore, they argued, the chain of title traced by the company was valid.

Ryan ruled for the county’s largest landowner on virtually every disputed point.

Company Foes Saluted

“She saw the issues the way we saw them,” Washburn said. “Under those circumstances, there’s not much I can add.”

While ruling against the Robinsons, Ryan saluted the couple for playing an instrumental role in the creation of the reserve.

“I think they have achieved a great deal,” Ryan said. “In the long run, everyone has ultimately benefitted.”

Ryan said she was not so “naive” as to think her decision would not be appealed, a possibility about which Robinson was hazy and Watson hopeful.

“The Irvine Co. has spent hundreds of thousands of dollars, but it isn’t just that,” Watson said. “It’s the court’s time and money, the Sierra Club’s time and money. The lawyers’ money and everybody else’s. It’s still a loss to me, frankly, as to what purpose.

“But anyway, I’m glad it’s over with. At least, I hope it’s over with.”