D & M FINANCIAL CORP. v. City of Long Beach

I. INTRODUCTION

The City of Long Beach appeals from a judgment for inverse condemnation in favor of D & M Financial Corporation, which held a security interest in real property on which the City of Long Beach demolished an alleged substandard apartment building. The main issue in this appeal is whether, before demolishing a structure which it had declared to be substandard, the City of Long Beach satisfied its obligation to provide due process of law to D & M Financial Corporation. We reject the claim by the City of Long Beach that recordation of a “Declaration of Substandard Property” placed D & M Financial Corporation on notice that a building on its real property security would be demolished. We further conclude that the City of Long Beach failed to comply with its own practice of updating title reports to determine current ownership of property declared to be substandard. In addition, even after it had actual notice of the security interest held by D & M Financial Corporation, the City of Long Beach failed to comply with its ordinances requiring notice to mortgagees of property declared to be substandard. The City of Long Beach also failed to give D & M Financial…