County of Ventura v. Channel Islands Marina, Inc.

*618 Opinion

Bad behavior does not establish damages: causation does. Taking claims do not arise from a breach of contract.

With these two principles in mind, we discuss this case concerning a dispute over leasehold improvements installed by a private party on land leased from the County of Ventura (County). At the end of the lease term, County sued the lessee to prevent it from removing the improvements. The lessee cross-complained for breach of lease and inverse condemnation. The trial court found that County took the lessee’s property and breached the lease by not consenting to removal of the improvements. But the court also found that had County consented, California Coastal Commission regulations would have prevented removal of the improvements.

Nevertheless, the trial court submitted the question of damages to the jury based on inverse condemnation and instructed the jury to value the improvements in place. The jury returned a verdict against County for $3.5 million.

We conclude that inverse condemnation is not an appropriate theory of recovery where the wrong is nothing more than a breach of lease. We also conclude that under any other theory of recovery, in-place value…

I respectfully dissent.

The lynchpin of the majority’s reversal of the jury’s award of damages in this case is its mistaken position that Channel Islands Marina, Inc.’s (CIM) improvements had only salvage value at the end of the lease. On the contrary, as set forth frequently in the statement of decision of the trial judge, the land and waterside improvements had a “fair market value” to each party to the lease. Evidence of the existence of this value, among other things, can be found in the actions of the County of Ventura (County) in preventing CIM from removing the improvements.

The majority points to the trial court’s finding that “the evidence established . . . that the Coastal Commission would not have issued a coastal development permit without a replacement plan, which CIM was clearly in no condition to satisfy.” However, in the same paragraph, the court also found that, “[b]ased on the evidence, it appears that, if County had received a request from CIM for consent to its applications to state and federal permitting authorities, County would have refused.”

The County actively prevented CIM from obtaining the necessary permits, some of which were under the County’s…

Bad behavior does not establish damages: causation does. Taking claims do not arise from a breach of contract.

With these two principles in mind, we discuss this case concerning a dispute over leasehold improvements installed by a private party on land leased from the County of Ventura (County). At the end of the lease term, County sued the lessee to prevent it from removing the improvements. The lessee cross-complained for breach of lease and inverse condemnation. The trial court found that County took the lessee's property and breached the lease by not consenting to removal of the improvements. But the court also found that had County consented, Coastal Commission regulations would have prevented removal of the improvements.

Nevertheless, the trial court submitted the question of damages to the jury based on inverse condemnation and instructed the jury to value the improvements inplace. The jury returned a verdict against County for $3.5 million.

We conclude that inverse condemnation is not an appropriate theory of recovery where the wrong is nothing more than a breach of lease. We also conclude that under any other theory of recovery, inplace value is not an…