LAGUNA BEACH : State Supreme Court Won’t Hear Landowners’ Case

The California Supreme Court has refused to hear a lawsuit filed by 80 property owners in the Diamond Crestview neighborhood, an attorney for the city said Wednesday.

As a result, a September appeals court decision overturning an earlier $18-million judgment against the city will stand, and the case will be retried.

“It’s extremely good news for the city and its taxpayers,” said Shirley Hufstedler, a Los Angeles attorney and former secretary of education under President Jimmy Carter, who was hired by the city to handle the case. “Now we’re back to Superior Court in Orange County.”

The extended land-use battle began in 1985 when people who owned empty lots in the rural hillside community, between the Arch Beach Heights and Woods Cove neighborhoods, sued the city to have streets installed so they could build on their land. An appellate court ruled that the city owned the streets and had to improve them or compensate the property owners for their land.

By late 1992, the city had a development plan that called for the city to pay upfront to install streets, storm drains and sewers and then later recoup the money by assessing the property owners.

But Orange County Superior Court Judge David H. Brickner ruled that it was the city’s responsibility to build and pay for the streets. He gave Laguna Beach 45 days to submit a new plan.

When the city missed the deadline, Brickner ruled that it had effectively abandoned the streets and owed the property owners $18 million in damages.

While the legal challenges continued, the city installed the streets. But an attorney for the property owners has said they are neither up to code nor wide enough for emergency vehicles.

With the case now being returned to the lower courts, mediation sessions are also expected to begin after the first of the year.

“Unfortunately, it isn’t over,” Hufstedler said.