Judge Reverses Ruling, Gives City Full Title to 21-Acre Park : Property: Court of Appeal orders him to justify his decision or change it. Manhattan Beach officials say it is a welcome surprise and legal victory.

A Superior Court judge has ruled that the city of Manhattan Beach owns outright a 21-acre park on a former railroad right of way, reversing an earlier decision that could have cost the city up to $100 million.

The city is being sued by 88 people who say they are the heirs of the land’s rightful owners and that the city must compensate them for the property.

Torrance Superior Court Judge William C. Beverly Jr. ruled in the heirs’ favor in December, 1992. But he reversed his decision Aug. 20, two days after the California Court of Appeal ordered him to either change his earlier ruling or justify why it should stand.

The reversal, made public this week, came as a welcome surprise to city officials, who called it a major legal victory.

“It’s like having a huge burden removed from our shoulders,” City Manager Bill Smith said. “We were facing the possibility of losing $100 million and going bankrupt. When you have that kind of a burden, it shadows every decision you make.”

The heirs, however, have not given up the fight. They have scheduled a hearing with Beverly on Friday in which they plan to ask him to reconsider his decision.

“He has reversed himself without any argument, without any change in the facts,” said their attorney, Roger M. Sullivan. “The form that (Beverly) used to reverse himself indicated that he felt he was required to do so by the appellate court. In fact, that was not the case. We think there was a misunderstanding.”

Pressing the complicated lawsuit are 88 heirs to the Redondo Land Co., a development firm that granted the property to a railway company in 1888. Atchison, Topeka & Santa Fe Railway Co. later acquired the property, which it used for railway purposes until 1982. The land was unoccupied until 1986, when the company sold it for $5 million to the city of Manhattan Beach, which turned it into a park.

The long, narrow park, only 100 feet wide, is a green belt that contains a jogging path between Valley Drive and Ardmore Avenue. It stretches from near the north end of the city, west of Sepulveda Boulevard, to the Hermosa Beach boundary.

In 1989, a lawsuit was filed against the city and Atchison, Topeka by John P. Farquhar of Santa Monica, a researcher who tracked down 88 heirs of the Redondo Land Co. and has contracts with them granting him half of any compensation they receive in the case.

The lawsuit says that the original grant by the Redondo Land Co. gave the railway company an easement to the land, not outright ownership. Farquhar says that when the easement ceased to be used for a railroad, the land should have reverted to the heirs of the original owners.

The city’s attorneys argued that Farquhar is a bounty hunter seeking a windfall against the city and Atchison, Topeka. They argued that the 1888 deed was modified by an agreement in 1897 that made it clear that Redondo Land Co. had deeded ownership of the property to the railroad.

Judge Beverly sided with the heirs in December, 1992, ruling that the city and the railroad company owed them compensation for the land. In July, a second trial was held to determine who were the legal heirs. Another trial was scheduled for Sept. 13 to determine the property’s value, which the heirs estimate could be as high as $100 million.

While the third trial was pending, the city appealed Beverly’s December ruling. The 2nd District Court of Appeal denied the city’s petition, saying it would consider an appeal only after the last trial is resolved.

The city asked the California Supreme Court to review the matter. The state’s highest court unanimously ordered the Court of Appeal to tell Beverly to either change his decision or justify why he wouldn’t. On Aug. 18, the appeal court made the ruling. Two days later, Beverly reversed his decision.

Noting that the city spent more than $1 million defending itself against the suit, City Atty. Carl K. Newton said he believed the Supreme Court recognized that Beverly had erred in a way that placed the city at great disadvantage.

“We had hanging over the city the specter of a very large judgment,” Newton said. “It would have been quite devastating for Manhattan Beach.”

But Sullivan, who said he believes the Supreme Court was too busy to adequately consider the merits of the case, expressed confidence his clients would eventually prevail.

“The facts have not changed, the law has not changed and we feel our position is very sound,” Sullivan said.