Lawsuit Resolved

Posted: 1/11/2019 

January 11, 2019

The City of Palos Verdes Estates is glad the lawsuit over the Panorama Parkland has been resolved.

The City Council’s main focus has always been the protection of our parklands, and we worked collaboratively with all parties involved to do our part to end this protracted and costly litigation.

We can now come together as a community and continue to enjoy the outstanding lifestyle that we work hard to protect.

Mayor Betty Lin Peterson,

City of Palos Verdes Estates

For PDF copy of this statement, Mayor Statement.

JOINT STATEMENT:

Today the lawsuit over the Panorama Parkland was resolved.  The Parties* found common ground on their mutual priority for preserving parkland.  The lawsuit was originally filed by John Harbison and CEPC to unwind a sale of parkland property from the Homes Association to the Luglianis.  The property was conveyed by the City to the Homes Association as part of an agreement between the City, the Palos Verdes Unified School district and the Luglianis. 

The Court of Appeal held “the public did benefit from this litigation – namely through the protection of a public park.”  Under the settlement, the Luglianis and the Homes Association will comply with the provisions of the CC&Rs that allow for re-designation of land use with this consent of the neighboring property owners.  The Harbison and CEPC support this re-designation in light of two facts: (1) the City is going to deed restrict the Bluff Cove properties (approx. 4 acres) along Palos Verdes Drive West (that are currently R1 Residential zoned) by imposing the same restrictions that are on all other City-owned open space.  As a result, the City of Palos Verdes Estates will enjoy a net increase in deed-restricted open space property.  (2) Unlike the original sale from the Homes Association to the Luglianis, under the agreement, the Homes Association will employ the proper mechanism under the CC&Rs including the explicit consent of the public within 300 feet of each property.  The Agreement will create a view easement and restore natural parkland for the public to enjoy.  All Parties affirm the continuing legal validity of the deed restrictions maintaining parkland.  In addition, the Parties are resolving the ROBE Quorum litigation creating a more democratic election process for the Homes Association.

All parties are pleased to have found a solution that increases parkland for the benefit of our residents.  The Luglianis agreed to restore the flat portion of the Panorama parkland properties (approx. 0.4 acres) and return that to city ownership for the residents to enjoy.  The Homes Association and the Harbison were instrumental in identifying the portion of the property of most value to the community.  The Homes Association is helping to fund the restoration.

This settlement completely resolves the lawsuit over Panorama Parkland.

*Parties to the Agreement are Citizens for Enforcement Parkland Covenants (CEPC), John Harbison, Palos Verdes Homes Association (Homes Association), City of Palos Verdes Estates, Ried Schott, Residents for Open Board Elections (ROBE) and Robert and Dolores Lugliani (the Luglianis, property owners of 900 Via Panorama).

To view the PDF version of this statement; Parklands Settlement joint statement 

To view the settlement agreement, go here. 

 Frequently Asked Questions 

Panorama ParklandSettlement

Q:  Why is this settlement good for the City of Palos Verdes Estates?

 A:  This settlement achieves the City Council’s main focus, the protection of our parklands.  This agreement also provides an opportunity for all of us to come together, restore our community and focus on the outstanding quality of life that we all enjoy and work hard to protect. 

Q:  Why did the City appeal and take part in this lawsuit?

 A:   The City achieved a positive result on appeal because the Court of Appeal reversed the adverse judgment against the City.  As a result of the appeal, the City was able to protect our parklands and our local control of the parklands because the Court of Appeal invalidated the judge’s overbroad ruling that would have allowed on-going parkland management to be handled in her courtroom.  The City’s intention, throughout this process, has been to protect the open space and neighborhood character that our residents hold dear. 

 Q:  How much has it cost the City of Palos Verdes Estates to defend against the litigation?

 A:  The City spent approximately $345,000 in legal fees since the case was filed in June 2013 (5 1/2 years).  More importantly, this protracted situation has taken a toll on the community, fermenting distrust in some residents  and creating fractures in our community even though we all shared a strong, common resolve to protect our parklands.  With this agreement, our community can now come together, and focus on the outstanding quality of life that we all enjoy and work hard to protect.

 Q:  What would happen if this settlement did not happen?

 A:   The case would have proceeded to trial between the City and the plaintiffs over the issue of whether the City can be held responsible for the Homes Association’s actions. The stakes at this point were primarily the plaintiffs’ attorneys’ fees; the Court of Appeal relieved the City of liability for the fees that had been awarded.  There are other effects that do not involve the City directly but would affect the whole community.  The Homes Association would have had to pay the plaintiffs’ fees and bore the costs of the restoration of the Panorama Parkland. But the greater concern would have been over the potential liability to the Luglianis of the Homes Association for sure (and potentially the City) for their damages in connection with the judgment against the Homes Association, which have been estimated in the range of $1 million to $2 million.

 Q:  What happens to the lawsuit(s) now?

 A:  This settlement resolves this dispute and contains a provision that ensures that there will be no more litigation regarding this issue among the parties to the agreement.

 Q: Who made and prepared this settlement?

 A: This agreement was a collaborative effort that included all of the signatory parties.  The City was only directly involved in the provisions affecting it and did not participate in the terms involving the settlement of the ROBE case, the governance of the Homes Association, or the disposition of the Via Panorama property other than to agree to accept as parkland any amount of land donated to the City.

 Q: What protects parklands in the future?

 A:  The parklands continue to be protected by the community CC&Rs and the agreement does not change the City’s role to preserve and protect precious parklands.  

 Q:  Why is Bluff Cove part of this agreement?

 A:  The City was already on course to add Bluff Cove as permanent open space, having ceased the residential uses in 2012/13 and cleared the property of structures in 2015/16.   As part of the settlement, the City committed to stay that course. The City’s commitment was important to the plaintiffs and aided settlement.

 Q:  Does Mr. Lugliani get any land with this agreement?  If so, why, and can it be developed?

 A:  As a result of the Court of Appeal’s decision, the Homes Association would have ended up owning the property and the property contained multiple encroachments in violation of the deed restrictions (retaining walls, etc.).  Part of the Homes Association’s interest in the settlement was to relieve itself of the obligations of property ownership. The City was not involved in the negotiations regarding that portion of the settlement agreement, which is between Mr. Lugliani and the PVHA.  The agreement does provide that the Luglianis obtain 1.4 acres of land, which like all PVE property is subject to the City’s zoning laws and the deed restrictions associated with that parcel.

 Q:  Why is this agreement connected with PVHA governance?

 A:     The plaintiffs in the ROBE case against the Homes Association and the plaintiffs in the CEPC/Harbison case against the City, Homes Association, and the Luglianis insisted as a condition of settlement that both cases be part of a “global” settlement.  It was not the City’s preference but the benefits of settlement outweighed the City’s desire for simplicity.

 Q:  What is the city doing to abate encroachments on public land?

 A:  .  The City has a part-time code enforcement officer assigned to monitor our community for infractions, which accomplishes a number of goals:  removing encroachments and maintaining the city as the community wants and expects, and doing so in a fiscally conservative, yet effective, manner.   Complaints may be submitted to Sam Yang, Code Enforcement Officer, at syang@pvestates.org (310.378.0383).   

For a PDF version of this Frequently Asked Questions, please go here. 

Litigation Cases v. City of Palos Verdes Estates

•  Counter Offer to Settle Parkland Lawsuit

(Posted 04/24/18) 

Dear Messrs. Harbison and Lewis: 

        I write on behalf of the City of Palos Verdes Estates and in response to Mr. Harbison's settlement offer dated April 9, 2018, and amended April 16, 2018. We welcome the discussion. [click to continue reading]

• Citizens for Enforcement of Parkland Covenants v City of Palos Verdes Estates, et al.

In reference to Citizens for Enforcement of Parkland Covenants v. City of Palos Verdes Estates, et al., the Court of Appeal issued its decision on January 30, 2018 in favor of the City.  The lawsuit challenged the City’s effort to prevent the School District from implementing its plan to sell parkland for residential development where the City and the Homes Association, along with a PVE resident, entered into a settlement. The City’s part of the settlement – commonly called the MOU – required the City to accept two parkland lots that the School District had tried to develop and convey to the Homes Association sloping parkland at the end of a cul-du-sac on Via Panorama. Before conveying the property, the City imposed an open space restriction on it. The Homes Association then sold that property to the resident, with restrictions on its use.  The settlement was challenged in a case brought by John Harbison and a group created for the lawsuit called Citizens for Enforcement of Parkland Covenants (CEPC).

The Court of Appeal ruled that the City did not violate the deed restrictions or any laws by conveying the property to the Association and reversed the judgment against the City. This means that the MOU remains in effect for the part that was most important to the City: the deed restrictions protecting open space remain enforceable, including on School District property.  As to the parts of the MOU litigated, the Court of Appeal has validated the City’s actions.  The Association’s transfer of the property to the resident was found to be inconsistent with the deed restrictions.  

The City of Palos Verdes Estates remains committed to preserving and maintaining access to parkland and open space for the enjoyment and use by the public, and it will continue to be a strong steward for protecting parkland. 

 Mayor’s Statement Regarding the Court of Appeal Ruling

January 31, 2018

 “Yesterday afternoon the City learned that the Court of Appeal ruled in favor of the City’s position in the appeal involving the Via Panorama property.  

The City appealed for two reasons: first, to protect our parklands and our local control of the parklands; second, to protect our taxpayer dollars from the award of legal fees based on what the City believed to be an incorrect legal decision.  The City’s position was upheld on both points.  The Court of Appeal ruled that it was inappropriate to grant the Plaintiffs special power over all of our parklands.  The Court of Appeal also reversed the attorney fee award against the City. 

The City’s intention, throughout this process, has been to protect the open space and neighborhood character that our residents hold dear.  We intend to move forward from this point, working positively and proactively with our residents, to preserve and protect the parklands and quality of life we all enjoy in Palos Verdes Estates.”

--- Mayor James Vandever, City of Palos Verdes Estates

Please see Court of Appeal ruling here.

• City’s position with respect to the filings by the Palos Verdes Homes Association and the Luglianis.

Following the decision by the Court of Appeal, the Palos Verdes Homes Association (PVHA) and the Luglianis have each filed a request that the Court reconsider its decision.  Their reasons for seeking reconsideration are set out in their requests. The Court of Appeal ruled in the City’s favor, and the issues that are identified for reconsideration do not affect the decision in the City’s favor.

The Court of Appeal reversed the summary judgment against the City and reversed the attorneys’ fees awarded against the City.  Additionally, the Court of Appeal held that the City did not violate the deed restrictions or act illegally when it conveyed the property to the PVHA.  The Court of Appeal’s rulings regarding the PVHA are separate and independent from the City.  Questions about the PVHA’s actions should be addressed directly to its Director or Board.

The City awaits the Court conclusion(s) in reference to the Homes Association and Luglianis’ request for reconsideration of its decision.

Relevant Documents:

     Court Summons CEPC v City of PVE

     Summary of MOU Agreement

     MOU and Exhibits (MOU; Exhibit 1; Exhibit 2, part 1; Exhibit 2, part 2; Exhibits 3 & 4)

     Judgment - September 2015

     Opening Brief for Appeal - November 7, 2016

     City of Palos Verdes Estates' Combined Appellant's Reply and Cross-Respondent's Brief

     “City Council authorizes appeal of CEPC/Harbison case”

Council decision to appeal: Questions and Answers
Here are the facts

Q: What were the factors involved in deciding to appeal the judgment? Did you consider input from residents?

Answer: The City Council weighed several factors in its consideration to appeal. The Council listened to those who opposed an appeal. While the Council understood their concerns, there were two very significant factors that stood out in the final decision: 
    • The serious incursion into our residents’ management of our parklands and open space, and 
    • The City’s exposure to ongoing legal fees that would result from the court’s decision to maintain “continuing jurisdiction” if the judgment was left unchallenged.

Another factor in deciding to appeal was that the two other defendants in this case had already decided to appeal.

For these reasons, the Council decided it was in the best interest of all Palos Verdes Estates residents to have the City join the appeal.

Q: What is the challenge to local management of our parklands?

A: The judgment contains a provision that allows the plaintiffs in the lawsuit to appear before Judge Meiers on 24 hours’ notice to seek to force the City to remove any “structure, vegetation or object” that they feel might be encroaching on City parklands and open space. This extraordinary power applies to all of the parklands in the City, not just the Via Panorama property. These are far-reaching powers given to one individual and an unincorporated organization.

Q: Why not let a private group take over control of parklands and open space?

A: The City already has rules and laws governing parklands encroachments. Taxpayer funds are currently used to maintain City-owned parklands and open spaces, and for the City to enforce laws that ensure these open spaces remain as intended. For decades, the City has effectively and successfully removed illegal encroachments on open space land to preserve the original vision and scenic beauty of Palos Verdes Estates. Under an open-government system, violators are provided a due process when served notice about an encroachment. Procedures are in place to ensure a timely removal of encroachments and for violators to pay for and assume responsibility for encroachment removals.

Local control assures accountability, transparency, established standards for decision making and an appeals procedure.

Under this judgment, the citizens of Palos Verdes Estates could be denied their chance to have public discussions or debate about the future control and enforcement of open space and parklands in the City by this special power conferred on these plaintiffs. A judge simply conferred on-going power to a private group whose organization or membership is not fully understood or public. The group or its members can exercise their power for any reason or no reason, without any accountability to the rest of our residents.

Additionally, all City decisions are subject to judicial review, and that is an important check on the exercise of government authority. This judgment, however, creates a fast-track into court for the plaintiffs without necessarily allowing the local public meetings and processes to run their course.

Q: Why spend more on legal fees to appeal this decision?

A: We believe pursuing the appeal is the best chance to save money on legal fees. If the City failed to appeal, the City would be the only party that did not appeal and faced the prospect of having to pay the plaintiffs’ attorney fees. More important, the judge’s order, as it stands, will require the City to incur legal costs every time the plaintiffs take a matter to Judge Meiers. The Council believes it is better policy to spend a smaller amount of money on an appeal to defend our residents’ right to manage the parklands compared to the significantly higher costs of multiple future court appearances and litigation expenses should the judgment remain intact.

Q: Are there other cost considerations?

A: Yes. Under the current court decision, taxpayer money may have to be used to remove any and all encroachments found on parklands and open spaces. Then the City would incur additional expenses attempting to recover costs by litigating against property owners. The removal of encroachments would change from a cooperative effort to an adversarial one. Under the current system operated by the City, violators must pay for encroachment removal. The City Council works to avoid using taxpayer money to remove encroachments – as Judge Meiers would order.

Q: Are there any parts of the court judgment that were in the City’s favor?

A: Yes. The court judgment left intact parts of the original settlement agreement, allowing the City to retain ownership of Lots C&D. It is uncertain what will be the status of the settlement agreement if the CEPC/Harbison judgment stands; that may be the subject of further litigation.

Q: Is this case about whether the city sold parklands under the settlement agreement?

A: No. The City did not sell parkland. In connection with the settlement agreement, the City conveyed the Via Panorama parcel to the Homes Association. As part of that transaction, the City also retained an Open Space Easement over the parcel, an emergency access road, and utility easements. (Note: The Open Space Easement guaranteed that all the property subject to it would remain undeveloped). In exchange, the City accepted ownership of Lots C & D for the sole purpose of preserving them as parklands. The Homes Association sold the Via Panorama parcel, subject to and burdened by the City’s easement. Thus, despite the change in ownership, the Via Panorama parcel must forever remain open space. Though the judgment did not undo the City’s conveyance or the City’s open space easement, it determined that the Homes Association’s sale of the property violated the deed restrictions.

The City entered into the settlement agreement to preserve Lots C & D as parklands because it believed that any burden resulting from the transfer of the Via Panorama parcel was outweighed by the benefit of its parklands preservation. 

Q: Are there deed restrictions on City-owned parklands?

A:  Yes. The City-owned property is subject to deed restrictions the same as all Palos Verdes Estates properties.  Palos Verdes Estates is an entirely planned community and compliance with the deed restrictions are an important part of maintaining the City’s beauty and parklike setting. 

The deed restrictions may be obtained directly from the Palos Verdes Homes Association.

The City is aware that some questions have been raised about the  City's role in enforcing deed restrictions. The City must comply with the deed restrictions on property it owns and will use its resources to prevent violations by others on City property. ‎ With respect to non-City property, the City enforces the Municipal Code and the Palos Verdes Homes Association enforces the deed restrictions.  This is the same as in planned communities with citywide CC&Rs such as Rolling Hills.  This is also true of condominium associations or other homeowner associations that have CC&Rs, which are enforced like civil contracts. 

Q:  Is the City legally prohibited from selling parkland at its discretion?

A:  Yes. 

FACT CHECK

What is CITIZENS FOR ENFORCEMENT OF PARKLAND COVENANTS v. CITY OF PALOS VERDES ESTATES, ET. AL about?

In May 2012, the City entered into a multi-party agreement with the Palos Verdes Peninsula Unified School District (School District), the Palos Verdes Homes Association (PVHA), and the property owners of 900 Via Panorama. The agreement is a Memorandum of Understanding (MOU) among the parties which, among other things, achieves these objectives:

• Resolved litigation filed by the School District seeking to establish a right to sell open space for residential development (as agreed in the MOU, the School District dismissed the case and abandoned its effort to raise revenue through sale of open space Lots C & D);
• Reaffirmed the enforceability of the deed restrictions on all property owned by the School District in the City (as agreed in the MOU, the School District formally accepted the deed restrictions limiting use of its PVE properties to either school uses or open space, abandoning its legal challenge to those limitations on all School District-owned property in PVE);
• Resolved certain encroachments in one area of previously City-owned parkland near 900 Via Panorama;
• Provided for the preservation of certain open space properties (Lots C & D) by transferring ownership from the School District to the City (the School District had begun to use the lots as a fenced storage yard; the City is maintaining it as open space);
• Protected the dark skies in the neighborhood around Palos Verdes High School by avoiding lights on the athletic field;
• Facilitated the School District obtaining $1.5 million revenue from the property owner of 900 Via Panorama (the Luglianis) and the reimbursement of $400,000 in legal expenses incurred by the PVHA in defense of the community deed restrictions. In addition, the City received $100,000 to cover ongoing maintenance costs of Lots C & D. 

A copy of the MOU and associated exhibits are available here: <MOU, Exhibit 1, Exhibit 2 (part 1), Exhibit 2b (part 2), Exhibits 3 & 4>. This MOU was discussed publicly at City Council meetings and the City approved the MOU at a public meeting. The staff report for the May 8, 2012 City Council meeting is available here: <staff report> The factual history and a complete explanation of the MOU from the City’s perspective is available here: <Summary of MOU Agreement>.

John Harbison objects to one aspect of the MOU and he has formed an unincorporated association called Citizens for Enforcement of Parkland Covenants (CEPC) to sue the parties to the MOU, including the City. CEPC’s particular concern is the PVHA’s sale of a parcel of land to the Luglianis. The parcel was previously owned by the City (and is commonly referred to as Area A or Parcel A). The Parcel is subject to many deed restrictions and easements. The City holds an easement over the entirety of the property for open space, which prohibits the development of most of the lot. The City also has fire access and utility easements over portions of the lot. Like all properties in PVE, the parcel is also subject to the community CC&Rs. Under the MOU and the deed conveying the property, the parties anticipate certain limited accessory uses on a designated portion of Parcel A (such as a sport court, gazebo and a BBQ). CEPC appears to take issue with this aspect of the transaction above all else and its lawsuit seeks to undo the real estate transaction.

Where is the subject property?

Parcel A is approximately 1.7 acres of land located on the hillside below 900 Via Panorama. The overview (below) is meant to serve as a general guideline of the areas in question; for the concise perimeter, please view the perimeter survey here <survey> 

The photo (below), submitted to the City by Mr. Harbison, is adjacent to Parcel A and is public right-of-way and City-owned open space (indicated above in yellow), which is not the subject property nor in contention with this lawsuit or subject to the MOU.

What is the City’s position in this case?

The lawsuit challenges the conveyances of Parcel A from the City to the PVHA and from the PVHA to the property owner of 900 Via Panorama (Luglianis). It also seeks to prevent the City from considering the Luglianis’ zoning application and to compel the City to enforce restrictions that the lawsuit claims are applicable to the property. The City will address each of the technical legal arguments in court, which is the appropriate forum.

It is the City’s position that, acting within its legal authority and in the best interests of the community when it participated (at the request of the PVHA) in the agreement, the community received important public benefits, including removing all legal doubt over the enforceability of the deed restrictions on PVE property owned by the School District.

What is at risk to the community and to the City with this lawsuit?

While plaintiff CEPC seeks primarily to undo the conveyance of Parcel A, that transaction is one piece of a complicated puzzle. It is uncertain at this point what effect the CEPC lawsuit may have on the MOU as a whole.

Who represents the City on such legal matters and how does the City respond to litigation?

The City Attorney represents the City in litigation. While the City does not comment on litigation, public information from the City on such matters is disseminated through the Mayor, City Attorney and City Manager.

Can anything be constructed on Parcel A?

The property owners would need approval from the City and the Art Jury in order to construct any accessory uses or to permit the existing retaining walls. The City imposed an open space easement across the property, which continues to be zoned as open space, in addition to deed restrictions recorded on Parcel A by the PVHA, which together prohibit development on most of the parcel. The MOU and the PVHA’s conveyance anticipate limited accessory structures and maintenance of existing retaining walls in designated portions of Parcel A. This expectation was part of the Luglianis’ incentive to participate in the MOU. Note that the Luglianis’ financial participation satisfied the School District’s goal (which the School District had sought to achieve through the litigation and sale of open space). By satisfying the School District’s fiscal goal, the path was cleared for the City and the PVHA to secure from the School District affirmation of the deed restrictions, which protected all public open space in PVE without the risk of litigation. [For a more detailed description of the risks, see <Summary of MOU Agreement>.

What is the status of the lawsuit? 
[Updated 7/2/2015] 
The lawsuit consists of three causes of action (or claims) and was brought originally against four different parties (the City, the School District, the Homes Association and a private property owner); the plaintiffs have not pursued the case against the School District.

The court previously ordered [minute order] that one of the lawsuit’s three claims against the City be dismissed, finding it was without merit as a matter of law. The other two claims were assigned to a different judge.

On July 1, 2015 the City received the second judge’s ruling in favor of plaintiffs [judgment document], which appears inconsistent with and apparently contradicts the court's prior order dismissing one of the claims. The final judgment was signed by the court on September 24, 2015. Both the Palos Verdes Homes Association and the Luglianis appealed the judgment. After evaluating the options, the City Council likewise authorized an appeal. 

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