Court Overturns Ruling on Land Deal Near Reservoir

The California Court of Appeal on Wednesday overturned a ruling that would have forced the Santa Monica Mountains Conservancy and a water district to pay a developer $4.2 million for interfering with the builder’s ability to buy land near Westlake Village.

Wednesday’s decision sends back to Superior Court the issue of whether the conservancy and the Las Virgenes Municipal Water District improperly thwarted Village Properties’ attempts to buy nearly 500 acres above Las Virgenes Reservoir.

“It’s a great victory,” said Liz Cheadle, the conservancy’s chairwoman and dean of students at the UCLA Law School. “We had this huge verdict hanging over our head, and now that’s gone.”

In an opinion written by Justice Miriam A. Vogel, the Court of Appeal held that the lower court improperly granted summary judgment in favor of the builder, which paved the way for the multimillion-dollar award.

Although the case could again be tried in Superior Court, Wednesday’s opinion appeared to bolster the position of the water district and the conservancy.

“Public entities [such as the district] have an indefeasible right to acquire land for public purposes, a right that is exercised by invoking the power of eminent domain and which cannot be contracted away,” the appeals court held.

The appeals court overturned a decision handed down in 1995 by Superior Court Judge Madeleine I. Flier, who ruled in favor of Village Properties, an affiliate of the Baldwin Co. of Orange County. Flier agreed that the conservancy, along with the Las Virgenes Municipal Water District, had conspired to interfere with a deal the builder had to buy the land.

A jury then awarded the builder $11.2 million, an amount the judge later reduced to $4.2 million.

Village Properties had argued that in 1989 it made a deal with the Federal Deposit Insurance Corp., which had acquired 492 acres from a failed bank.

The builder paid $1.4 million for an option to buy the land in order to build 330 homes on Westlake Vista bluff, parts of which boasted spectacular views of the reservoir and the Santa Monica Mountains.

Village Properties said it also made a deal with the Las Virgenes Municipal Water District: The builder would not develop the land closest to the reservoir’s edge in exchange for the water district’s support of the project. The builder maintained that the deal called upon the water district not to attempt to buy the land itself--which the water district disputed.

In fact, the water district soon moved to buy the land, in cooperation with the conservancy.

The district said it needed the land to provide a larger buffer for the reservoir, to comply with state and federal guidelines for maintaining water quality. The conservancy’s interest was in protecting what it said was the world’s largest concentrations of two plants: Lyon’s pentachaeta, an endangered yellow flower, and the Santa Monica Mountains Dudleys, a rare succulent.

In a suit against the FDIC, the conservancy accused the agency of violating the federal Endangered Species Act. That action, the builder contended, prevented the builder from obtaining title insurance, ensuring the land would be sold to the water district.

The water district subsequently bought the property for $6.3 million, and resold half of it to the conservancy.

Village Properties sued the FDIC, won a summary judgment and settled for $7 million before going after the water district and conservancy.

Attorneys for Village Properties could not be reached for comment Wednesday night.