Court Upholds Coastal Commission Cease and Desist Order Directing Homeowners to Remove Seawall Protecting $25 Million Home and Pay $1 Million Administrative Penalty

Miller Starr Regalia
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Miller Starr Regalia

On December 18, 2020, the Fourth District Court of Appeal published 11 Lagunita, LLC v. California Coastal Commission, __ Cal.App.5th __ (2020) (Case No. G058436), a case involving a Coastal Development Permit issued by the California Coastal Commission in 2015 for the reinforcement of an existing seawall that was installed years earlier, before the Coastal Act, at the base of a 1950’s era Laguna Beach home.

Because seawalls have negative effects on beaches and can impact public access, the Commission intended to allow the seawall to remain and be repaired only to protect the existing structure.  The CDP thus included several conditions of approval that provided the permit would expire and the seawall would have to be removed if the home was “redeveloped in a manner that constitutes new development.”  The City’s certified Local Coastal Program defines “new development” to include improvements that increase the size or degree of nonconformity of a structure.

The construction project was essentially a 100% remodel involving the demolition of all the exterior walls down to their studs, the removal and replacement of the roofing materials, and the reinforcement of the entire framing system.  Virtually all components of the home (interior walls, floors, windows, doors, counters, cabinets, plumbing, electrical, etc.) were demolished, removed, and replaced, increasing its from $14 million to $25 million.  The homeowners contacted the City for approval, which determined the project was exempt from CDP requirements, but did not contact the Commission or seek its approval.

When the project was well underway, a neighbor complained to the Commission and requested a stop work order.  Commission staff determined that “new development” had taken place and concluded that in replacing and fortifying every part of the house and increasing its lifespan the improvements increased the degree of nonconformity, in violation of both the CDP and LCP.  Commission staff issued an enforcement letter directing the homeowners to apply for a permit to remove the seawall.  The homeowners continued with the remodel throughout the enforcement process.

The Commission began official enforcement proceedings and eventually conducted a lengthy public hearing at which its members voted unanimously to issue a cease and desist order and impose a $1 million administrative penalty.  The Court of Appeal was not persuaded by the homeowners’ argument that the project did not affect public access because it maintained the residence’s floor area, height, and bulk.  Instead, the Court agreed with the Commission that the project affected public access because it added decades of life to the home—meaning that the seawall would be present far into the future—as well as the Commission’s finding that the homeowners violated the CDP by redeveloping the residence in a manner that constitutes “new development.”  The Court also agreed with the Commission’s reasoning that a “reasonable person” would have recognized that if he or she wanted to embark on a major construction project without triggering a condition imposed by a regulatory body, it would make sense to contact that regulatory body before doing so to be sure the work would not trigger that condition.  The Court thus upheld the Commission’s decision in all respects, which plainly sought to make an example out of the circumstances and to send a message to other owners of coastal property.

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