Filed 6/24/15 (received for posting 6/25/15) (unmodified opn. attached)




                                 CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                    FIFTH APPELLATE DISTRICT

NICHOLAS HONCHARIW, as Trustee, etc.,
                                                                                 F069145
        Plaintiff and Appellant,
                                                                          (Super. Ct. No. 680294)
                 v.
                                                                   ORDER MODIFYING OPINION
COUNTY OF STANISLAUS et al.,                                        AND DENYING REHEARING
                                                                      [No Change in Judgment]
        Defendants and Appellants.


        THE COURT:
        It is ordered that the partially published opinion filed herein on June 3, 2015, be
modified as follows:
        1.       On page 8, footnote 4 is deleted in its entirety, which will require
renumbering of all subsequent footnotes.
        2.       On pages 10 through 12, the paragraphs under subheading “3. Scope of
Hensler Exception” are deleted in their entirety. The following paragraphs are inserted in
their place.

                  3.      Scope of the Hensler Exception

                         In Hensler, the Supreme Court stated that the exception to the
                 statute of limitations applies only if the plaintiff in the inverse
                 condemnation action “alleges the existence of a final judgment
                 establishing that there has been a compensable taking of the
                 plaintiff’s land.” (Hensler, supra, 8 Cal.4th at p. 7.) Subsequently,
                 the Supreme Court described its holding as follows: “In Hensler …,
                 we held that, if a property owner brings a timely action to set aside
or void a regulation, he may but need not join a claim for damages.
Instead, he may bring a damages claim separately after successfully
challenging the regulation.” (Kavanau, supra, 16 Cal.4th at p. 779.)
The question before us it how to interpret these statements about
what must be achieved in the initial mandamus action.

       In Honchariw’s view, the requirement for a final judgment
establishing a compensable taking is no longer good law and all
Kavanau requires is a final judgment establishing the invalidity of
the challenged regulation or land use decision on any ground. The
practice guide quoted by Honchariw uses language that supports his
position. (See 2 Matteoni & Veit, Condemnation Practice in Cal.,
supra, §§ 16.4, 17.3, pp. 16-8 & 17-4.) However, the excerpts did
not explicitly frame and answer the question whether the initial
mandamus action must include the constitutional claims as a basis
for invalidating the regulation or administrative decision.

       In contrast, another practice guide has addressed what issues
must be resolved in the initial mandamus action before a second
action for compensation or damages is permitted:

        “Mandamus must be filed as a condition to an inverse
condemnation action. A property owner who claims that a
condition to a development permit constitutes a taking generally
must first exhaust the administrative remedies, file a mandamus
action, and receive a judicial determination that the regulation is a
taking before filing or pursuing an action for compensation. If the
statute of limitations expires on and bars the mandamus action, the
owner is barred from seeking compensation.” (9 Miller & Starr, Cal.
Real Estate (3d ed. 2007) § 25:54, p. 25:249, italics added.)

      Thus, the practice guides are not in explicit agreement about
what Hensler and Kavanau require of the first step in the two-step
procedure.

       One approach to Kavanau’s one paragraph summary of
Hensler is to consider whether that paragraph contained general
observations unnecessary to the holding in Kavanau and, thus, was
dicta with no force as precedent. (9 Witkin, Cal. Procedure (5th ed.
2008) Appeal, § 509, pp. 572-573; see Trope v. Katz (1995) 11
Cal.4th 274, 287 [Supreme Court’s statement that is not precedent
does not abrogate an earlier statement that is precedent].) It appears
Kavanau’s summary of Hensler’s two-step procedure is dicta
because the summary is not necessary to the reason ultimately given


                              2.
by the court for affirming the order sustaining the demurrer—that is,
“[t]he remedy of future rent adjustments available to Kavanau under
the due process clause precludes a finding of a taking in this case.”
(Kavanau, supra, 16 Cal.4th at p. 786.) The court could reach this
conclusion without modifying the two-step procedure recognized in
Hensler.

        Another approach is to consider whether the language used in
Kavanau expresses an intention by the Supreme Court to modify
Hensler. In Kavanau, the court did not expressly acknowledge
Hensler’s reference to a “final judgment establishing … a
compensable taking.” (Hensler, supra, 8 Cal.4th at p. 7.) As a
result, the court did not explicitly approve or disapprove that
language. Accordingly, we next consider whether the language used
in Kavanau implies a modification of Hensler.

       The court in Kavanau referred to Hensler as identifying “an
exception to the general rule against splitting claims.” (Kavanau,
supra, 16 Cal.4th at p. 779.) This statement implies that the two-
step procedure is invoked when a plaintiff’s cause of action alleging
an unconstitutional taking is split between the mandamus action and
a subsequent action seeking damages. In other words, if the
mandamus action does not allege an unconstitutional taking, that
cause of action has not been “split” into (1) a claim challenging the
validity of administrative action and (2) a subsequent claim for
damages. (See generally, 4 Witkin, Cal. Procedure (5th ed. 2008)
Pleading, § 45, pp. 108-109 [rule against splitting a cause of action].)
Therefore, we infer from the statement in Kavanau about “an
exception to the general rule against splitting claims” that the court
continued to intend that the initial mandamus petition include the
unconstitutional taking cause of action even though it was not
required to seek compensation for the alleged taking. (Kavanau,
supra, at p. 779.)

       In addition, the circumstances and issues presented in
Kavanau gave the Supreme Court little reason to consider and alter
the formulation of the first step of the two-step procedure. First, the
application of the two-step procedure was not contested in Kavanau
and, therefore, the issues raised did not involve the timeliness of the
second action. Second, the challenged rent control regulations had
not been adopted under the Subdivision Map Act and, therefore
section 66499.37 was not mentioned. Third, the circumstances
presented did not cause the court in Kavanau to address the policies


                               3.
underlying the adoption of the two-step procedure. Therefore, the
inference that the Supreme Court intended to modify the
requirements adopted in Hensler is weak.

       The reason the mandamus proceeding must include the
constitutional taking issue is that the court’s determination that a
regulatory taking has occurred triggers a range of options for the
public entity—it could approve the project as proposed,
conditionally approve the project, or exercise the power of eminent
domain. (Hensler, supra, 8 Cal.4th at p. 11.) Which of these
options is adopted by the public entity affects the scope of the taking
and, thus, the just compensation due to land owner. For example, if
the public entity approves the project as proposed, the land owner’s
recovery would be limited to compensation for a temporary taking.
At the other end of the range of options, if the public entity were to
exercise eminent domain, the land owner then would be entitled to
compensation for a permanent taking. The existence of this range of
options means that the use of the two-step procedure is a convenient
and efficient way to administer the decisions an agency must make
to choose among those options.

       Based on the foregoing, we read the Supreme Court’s
description of the Hensler decision as follows:

       “In Hensler …, we held that, if a property owner brings a
timely [mandamus] action to set aside or void a regulation [on
constitutional grounds], he may but need not join a claim for
damages. Instead, he may bring a damages claim separately after
successfully challenging the regulation [on constitutional grounds].
[Citation.] Thus, in Hensler we identified an exception to the
general rule against splitting claims. [Citations.] In accordance with
Hensler, Kavanau brought his present claim for damages, alleging
two causes of action.” (Kavanau, supra, 16 Cal.4th at p. 779.)

       As a result, the two-step procedure approved in Hensler
allows a plaintiff to postpone bringing a claim for damages caused
by an unconstitutional taking until a mandamus proceeding has been
completed, provided that the mandamus judgment or order
establishes an unconstitutional taking or due process violation.

       As to Honchariw’s argument that he could not have obtained
a “judgment establishing that there had been a compensable taking”
(Hensler, supra, 8 Cal.4th at p. 7, italics added) because that claim
was not ripe, we conclude that Hensler requires, at a minimum, the


                               4.
             mandamus action to challenge the validity of the regulation or
             administrative decision on the ground it effected an unconstitutional
             taking. Such a challenge to the validity would be ripe when the
             mandamus petition is filed and, therefore, section 66499.37 requires
             that challenge to be brought within 90 days even though the exact
             parameters of any compensation for the taking cannot be determined
             until after the local agency has made a final decision about which
             option it will adopt in response to any judgment obtained in the
             mandamus proceeding. (Hensler, supra, at p. 11.)
      3.     On page 13, after the last paragraph ending in “under section 66499.37”
add the following paragraph.

                     Alternatively, even if the exception applied and the statute of
             limitations did not begin to run until the Board’s May 22, 2012,
             approval of the project, Honchariw’s inverse condemnation
             complaint was untimely because it was filed in December 2012, well
             after the 90 days allowed by section 66499.37.



      There is no change in judgment.

      Appellant’s petition for rehearing filed on June 19, 2015, is denied.



                                                                _____________________
                                                                          FRANSON, J.
WE CONCUR:


 _____________________
GOMES, Acting P.J.


 _____________________
POOCHIGIAN, J.




                                            5.
Filed 6/3/15 (unmodified version)




                        CERTIFIED FOR PARTIAL PUBLICATION*


             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                    FIFTH APPELLATE DISTRICT

NICHOLAS HONCHARIW, as Trustee, etc.,
                                                                     F069145
        Plaintiff and Appellant,
                                                             (Super. Ct. No. 680294)
                 v.
                                                                    OPINION
COUNTY OF STANISLAUS et al.,

        Defendants and Appellants.



        APPEAL from a judgment of the Superior Court of Stanislaus County, Hurl
Johnson, Judge.
        Nicholas Honchariw for Plaintiff and Appellant.
        Shute, Mihaly & Weinberger, Matthew D. Zinn, Laura D. Beaton; John P.
Doering, County Counsel, and Thomas E. Boze, Deputy County Counsel, for Defendants
and Appellants.


        The plaintiff contends the trial court erred when it applied the 90-day statute of
limitations contained in Government Code section 66499.371 to his inverse


*       Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of parts I and III of the Discussion.
condemnation action and concluded the action was untimely. The plaintiff argues
California law allows him to postpone bringing a complaint for just compensation until
after he successfully challenged the local government’s land use decision in a mandamus
proceeding.
       We conclude that the 90-day statute of limitation in section 66499.37 applies to
the inverse condemnation action. (Hensler v. City of Glendale (1994) 8 Cal.4th 1
(Hensler).) While we agree with the plaintiff that a land owner may elect to pursue a
damage claim for an unconstitutional taking after a mandamus proceeding results in a
final judgment, the initial mandamus action must result in “a final judgment establishing
that there has been a compensable taking of the plaintiff’s land.” (Id. at p. 7.) Here, the
plaintiff’s mandamus action did not seek or establish an unconstitutional taking occurred
when the county denied his subdivision application. Therefore, the plaintiff does not
qualify for the two-step procedure identified in Hensler. As a result, the unconstitutional
taking claim in his inverse condemnation action is time barred under section 66499.37.
       As to the cross-appeal involving the denial of sanctions against the plaintiff, we
conclude the trial court correctly determined the plaintiff’s complaint was not frivolous.
       We therefore affirm the judgment of dismissal.
                             FACTS AND PROCEEDINGS
       Plaintiff Nicholas Honchariw proposed to divide a 33.7-acre parcel of land in the
Knights Ferry area of Stanislaus County into eight residential parcels and one
undeveloped parcel. In connection with this proposal, Honchariw submitted a vesting
tentative map application to the planning commission of the County of Stanislaus.
       In February 2009, the planning commission considered Honchariw’s application
and his request for an exception to the county’s rule requiring that all subdivision lots be


1     All further statutory references are to the Government Code unless stated
otherwise.


                                             2.
connected to a public water system whenever such a system is available. The planning
commission voted to deny Honchariw’s application and the request for an exception.
       Honchariw filed an administrative appeal. In March 2009, the Board of
Supervisors of the County of Stanislaus (Board) voted to disapprove the subdivision
project application and to deny the request for an exception to the rule requiring
connections to an available public water system. The Board did not make any of the
findings specified in subdivision (j) of section 65589.5 (i.e. that the project would have a
specific, adverse impact and there is no satisfactory method to mitigate or avoid that
adverse impact).
       In June 2009, Honchariw filed a petition for administrative mandamus,
challenging the Board’s disapproval of his application.
       The superior court denied the petition, concluding that the Board was not required
to make written findings under subdivision (j) of section 65589.5 when it denied the
application.
       In November 2011, we reversed the superior court’s judgment and ordered the
court to issue a writ of mandate directing the Board to vacate its denial of Honchariw’s
subdivision project application, reconsider the application, and make certain
determinations and findings in the event that it again denied the application. (Honchariw
v. County of Stanislaus (2011) 200 Cal.App.4th 1066, 1081-1082.)
       In January 2012, the superior court issued the writ of mandate and directed the
Board to file a return to the writ within 90 days.2 The Board’s initial return was filed in
April 2012 and stated that the hearing on its reconsideration of Honchariw’s vesting
tentative map application would be held in May 2012.
       On May 22, 2012, the Board approved the project.

2      Before the Board’s return was submitted, Honchariw filed a motion for statutory
attorney fees. The superior court denied the motion, which was affirmed by this court in
Honchariw v. County of Stanislaus (2013) 218 Cal.App.4th 1019.


                                             3.
       In December 2012—almost seven months after the approval—Honchariw filed a
complaint against the County of Stanislaus and the Board (collectively defendants) that
alleged they were liable for inverse condemnation and for violating his right to
substantive due process. Honchariw alleged the Board’s May 2012 approval of his
application ended the temporary taking of his property without just compensation. He
sought damages of $2.5 million for the alleged taking.
       In October 2013, after successive successful demurrers, Honchariw filed a second
amended complaint (SAC), which again asserted causes of action for inverse
condemnation and deprivation of substantive due process rights. The SAC is the
operative pleading for purposes of this appeal.
       Defendants again demurred based on the 90-day statute of limitations contained in
section 66499.37.
       In December 2013, the superior court sustained the demurrer without leave to
amend, concluding that the causes of action were untimely.
       The day after their demurrer was sustained, defendants filed a motion for sanctions
under Code of Civil Procedure section 128.7, which contended that Honchariw’s original
and amended complaints were frivolous. The motion requested sanctions in the amount
of $77,610. Honchariw opposed defendants’ motion for sanctions.
       On January 3, 2014, the superior court held a hearing and denied the motion for
sanctions. During the hearing, the court stated, “I thought there was pretty good
arguments made on both sides, so I didn’t feel it fell under [Code of Civil Procedure
section] 128.7.”
       In March 2014, the superior court filed a judgment of dismissal.
       Honchariw timely appealed. County filed a cross-appeal limited to the superior
court’s denial of its motion for sanctions.
                                       DISCUSSION



                                              4.
I.    STANDARD OF REVIEW*
      Code of Civil Procedure section 430.30, subdivision (a) provides that when “any
ground for objection to a complaint … appears on the face thereof, … the objection on
that ground may be taken by a demurrer to the pleading.” The statute of limitations is a
“ground for objection to a complaint” for purposes of this provision and, therefore, may
be raised in a demurrer. (Cochran v. Cochran (1998) 65 Cal.App.4th 488, 493.)
      Generally, an order sustaining a demurrer on statute of limitations grounds is
subject to de novo review on appeal. (Committee for Green Foothills v. Santa Clara
County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) Moreover, issues of statutory
construction regarding the proper scope of section 66499.37 are questions of law subject
to de novo review on appeal. (Legacy Group v. City of Wasco (2003) 106 Cal.App.4th
1305, 1311.)
II.   STATUTE OF LIMITATIONS
      A.       Statutory Text
      The Subdivision Map Act (§ 66410 et seq.) includes a 90-day limitations period in
section 66499.37, which provides in part:

      “Any action or proceeding to attack, review, set aside, void, or annul the
      decision of an advisory agency, appeal board, or legislative body
      concerning a subdivision, or of any of the proceedings, acts, or
      determinations taken, done, or made prior to the decision, or to determine
      the reasonableness, legality, or validity of any condition attached thereto,
      including, but not limited to, the approval of a tentative map or final map,
      shall not be maintained by any person unless the action or proceeding is
      commenced and service of summons effected within 90 days after the date
      of the decision. Thereafter all persons are barred from any action or
      proceeding or any defense of invalidity or unreasonableness of the decision
      or of the proceedings, acts, or determinations….” (§ 66499.37.)




*     See foonote, ante, page 1.


                                            5.
       B.     Supreme Court Cases
              1.         Overview
       In 1994, the construction and application of section 66499.37 was addressed by
our Supreme Court in Hensler.
       In Hensler, the city approved construction of residential units on the plaintiff’s
300-acre tract of land in April 1986, but rejected all proposed use of the major ridge lines
within that tract. (Hensler, supra, 8 Cal.4th at p. 8.) The rejection was based on a city
ordinance that prohibited construction on major ridge lines within the city. (Id. at pp. 7-
8.) The ordinance had been enacted pursuant to authority granted by the Subdivision
Map Act. (Id. at p. 8.) In September 1989, over three years after the city’s
administration decision to reject development of the ridge lines, the plaintiff filed an
inverse condemnation action alleging the city’s action prevented development of 40
percent of the tract. (Ibid.)
       The city demurred to the plaintiff’s inverse condemnation action, contending the
90-day statute of limitations in section 66499.37 barred the claim. (Hensler, supra, 8
Cal.4th at p. 8.) The trial court sustained the demurrer. (Ibid.) The Court of Appeal and
the Supreme Court affirmed. (Id. at pp. 7-8.)
       The issue presented in Hensler was which statute of limitation applied to an
inverse condemnation complaint alleging the application of an ordinance adopted
pursuant to the Subdivision Map Act resulted in an unconstitutional taking of the
plaintiff’s property. (Hensler, supra, 8 Cal.4th at pp. 6-7.) The Supreme Court resolved
this issue by stating:

       “We conclude that an action in inverse condemnation, whether or not
       joined with an action in administrative mandamus [citation] challenging the
       ordinance or its application to the plaintiff’s property, is governed by …
       section 66499.37 … unless it alleges the existence of a final judgment
       establishing that there has been a compensable taking of the plaintiff’s
       land.



                                             6.
               “The legislative intent is clear. Section 66499.37 was enacted to
       ensure that any challenge to local legislative or administrative acts or
       decisions taken pursuant to ordinances enacted under the authority of the
       Subdivision Map Act will be brought promptly. A complaint in inverse
       condemnation, even one which does not expressly attack the validity of the
       ordinance or its application, and seeks only compensation for an alleged
       taking, must be deemed a challenge to the local action. This follows
       because the constitutional validity of the governmental action if
       uncompensated must be determined in the course of ruling on the claim that
       compensation is owed. Moreover, the validity of the action must be
       determined to afford the local entity the opportunity to rescind its action
       rather than pay compensation for a taking. A landowner may not, by
       seeking only compensation, force a governmental agency to condemn the
       property.” (Hensler, supra, 8 Cal.4th at p. 7, italics added.)
       Based on this analysis, the court concluded that the 90-day limitation period in
section 66499.37 applied to the inverse condemnation claim.
       A few years after Hensler, the Supreme Court considered a case in which the
plaintiff had used the two-step procedure described in Hensler. (Kavanau v. Santa
Monica Rent Control Bd. (1997) 16 Cal.4th 761 (Kavanau).) Kavanau initially brought a
timely administrative mandamus action challenging rent control regulations of the City of
Santa Monica. The trial court denied the writ, but the Court of Appeal reversed,
concluding that the rent control limits deprived the plaintiff of “‘a just and reasonable
return’” and were therefore unconstitutional. (Id. at p. 767.)
       Kavanau then took the second step and filed a new lawsuit to recover the money
he lost while the rent control provisions were in effect. He alleged the rent control
regulations were both an unconstitutional taking and a violation of his due process rights.
(Kavanau, supra, 16 Cal.4th at p. 767.) The trial court sustained a demurrer without
leave to amend, and the Court of Appeal affirmed the dismissal of Kavanau’s inverse
condemnation claim.3 (Id. at p. 766.) The Supreme Court granted review to consider


3      On appeal, Kavanau abandoned his due process claim, which sought damages
under 42 United States Code section 1983. (Kavanau, supra, 16 Cal.4th at pp. 768, 780.)
Consequently, the only issues addressed by the appellate court related to his inverse

                                             7.
“whether a taking occurred and what, if any, right to just compensation Kavanau might
have.” (Id. at p. 768.)
       To provide background for its analysis of these constitutional issues,4 the Supreme
Court discussed Kavanau’s use of the two-step procedure described in Hensler:

       “In Hensler …, we held that, if a property owner brings a timely action to
       set aside or void a regulation, he may but need not join a claim for
       damages. Instead, he may bring a damages claim separately after
       successfully challenging the regulation. [Citation.] Thus, in Hensler we
       identified an exception to the general rule against splitting claims.
       [Citations.] In accordance with Hensler, Kavanau brought his present
       claim for damages, alleging two causes of action.” (Kavanau, supra, 16
       Cal.4th at p. 779.)
       The Supreme Court then addressed whether a taking occurred and determined
“[t]he remedy of future rent adjustments available to Kavanau under the due process
clause precludes a finding of a taking in this case.” (Kavanau, supra, 16 Cal.4th at p.
786.) Because the takings clause was satisfied, Kavanau’s inverse condemnation cause
of action failed to state a claim for relief and the decision sustaining the demurrer was
affirmed. (Ibid.)
       The proper interpretation of the description of Hensler set forth in Kavanau stands
at the center of the dispute presented in this appeal.
              2.     Parties’ Contention
       Honchariw contends Hensler and Kavanau should be read to mean that the first
step in the two-step procedure is satisfied by any successful mandamus proceeding
challenging the validity of a regulation or local land use decision. In contrast, defendants


condemnation claim, which sought just compensation for an unconstitutional taking. (Id.
at p. 780.)
4      The background provided by the court (1) did not mention section 66499.37
because the challenged rent control regulations had not been adopted under the
Subdivision Map Act and (2) did not address any other statute of limitations because the
timeliness of the second lawsuit was not an issue before the court.


                                              8.
contend the rule that a writ of mandate and damages claim may, but need not, be joined
in the same lawsuit applies only if the mandamus proceeding asserts that the challenged
administrative action is invalid as an unconstitutional taking.
       Honchariw supports his reading of the cases by citing the following discussion of
section 66499.37 set forth in a practice guide:

       “When challenging land use regulations [citation], the practitioner should
       examine the regulatory scheme for any special statute of limitations. In
       Hensler …, the [S]upreme [C]ourt held that the 90-day limitation period of
       … [section] 66499.37 applied to the property owner’s challenge of a city’s
       restrictions on that owner’s plan to build a planned residential
       development…. Hensler did not require that the inverse suit for a taking be
       filed within the 90 days; it could be filed at the same time as the
       invalidation action or later. See Kavanau ….” (2 Matteoni & Veit,
       Condemnation Practice in Cal. (Cont.Ed.Bar 3d ed. 2014) § 16.4, p. 16-8.)
       Honchariw also quotes a subsequent provision from this practice guide discussing
Hensler and Kavanau:

       “Kavanau … clarifies that Hensler did not demand that the inverse takings
       claim be filed within the short statute of limitations for challenging a land
       use decision. The required first step of a mandate suit can proceed to
       conclusion and a later suit for compensation is proper.” (2 Matteoni &
       Veit, Condemnation Practice in Cal., supra, § 17.3,p. 17-4.)
       In Honchariw’s view, these excerpts support his position that the mandamus action
is not required to include an unconstitutional taking claim and any challenge that
invalidates the local land use decision satisfies “[t]he required first step of a mandate suit
….” (2 Matteoni & Veit, Condemnation Practice in Cal., supra, § 17.3, p. 17-4.)
Honchariw argues this view makes sense because the claim that a compensable taking
occurred was not yet ripe when he filed his mandamus action. (See Toigo v. Town of
Ross (1998) 70 Cal.App.4th 309, 325 [regulatory taking claim is not ripe for adjudication
until the governmental entity charged with implementing the regulations has reached a
final decision on application of regulations to affected property].)




                                              9.
       Defendants contend the statements in Kavanau and the practice guide that are the
foundation for Honchariw’s argument are general in nature and must be read in the
context of the issues addressed by the Supreme Court and its rationale for authorizing the
two-step procedure described in Hensler.
              3.     Scope of the Hensler Exception
       First, we read the practice guide quoted by Honchariw as being ambiguous on the
specific question presented in this appeal. The wording used certainly supports his
position, but the excerpts did not explicitly frame and answer the question whether the
initial mandamus action must include the constitutional claims as a basis for invalidating
the regulation or administrative decision.
       Second, another practice guide has addressed what issues must be resolved in the
initial mandamus action before a second action for damages is permitted:

       “Mandamus must be filed as a condition to an inverse condemnation
       action. A property owner who claims that a condition to a development
       permit constitutes a taking generally must first exhaust the administrative
       remedies, file a mandamus action, and receive a judicial determination that
       the regulation is a taking before filing or pursuing an action for
       compensation. If the statute of limitations expires on and bars the
       mandamus action, the owner is barred from seeking compensation.” (9
       Miller & Star, Cal. Real Estate (3d ed. 2007) § 25:54, p. 25:249, italics
       added.)
       Our conclusion about the proper scope of the Hensler exception is based on (1) the
language used by the Supreme Court in Hensler and Kavanau as well as the rationale for
the two-step procedure.
       In Hensler, the Supreme Court stated that the exception to the statute of limitations
applies only if the plaintiff in the inverse condemnation action “alleges the existence of a
final judgment establishing that there has been a compensable taking of the plaintiff’s
land.” (Hensler, supra, 8 Cal.4th at p. 7.) When the court discussed Hensler a few years
later in Kavanau, it did not expressly acknowledge this statement and disapprove it.



                                             10.
Therefore, we infer the requirement for an allegation about a final judgment establishing
an unconstitutional taking was not eliminated or discarded by our Supreme Court in
Kavanau.
        In addition, the court in Kavanau referred to Hensler as identifying “an exception
to the general rule against splitting claims.” (Kavanau, supra, 16 Cal.4th at p. 779.) This
statement implies that a plaintiff’s cause of action alleging an unconstitutional taking is
split between the mandamus action and a subsequent action seeking damages when the
two-step procedure is used. In other words, if the mandamus action does not allege an
unconstitutional taking, that cause of action has not been “split” into (1) a claim
challenging the validity of administrative action and (2) a subsequent claim for damages.
(See generally, 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 45, pp. 108-109 [rule
against splitting a cause of action].) Therefore, we interpret the statement in Kavanau
about “an exception to the general rule against splitting claims” to mean that the initial
mandamus action must present the unconstitutional taking cause of action to the court,
but need not seek compensation in that proceeding. (Kavanau, supra, 16 Cal.4th at p.
779.)
        The reason the mandamus proceeding must include the constitutional taking issue
is that the court’s determination that a taking has occurred triggers a range of options for
the public entity—it could approve the project as proposed, conditionally approve the
project, or exercise the power of eminent domain. (Hensler, supra, 8 Cal.4th at p. 11.)
Which of these options is adopted by the public entity affects the scope of the taking and,
thus, the just compensation due to land owner. For example, if the public entity approves
the project as proposed, the land owner’s recovery would be limited to compensation for
a temporary taking. At the other end of the range of options, if the public entity were to
exercise eminent domain, the land owner then would be entitled to compensation for a
permanent taking.



                                             11.
       Based on the foregoing, we read the Supreme Court’s description of the Hensler
decision as follows:

       “In Hensler …, we held that, if a property owner brings a timely
       [mandamus] action to set aside or void a regulation [on constitutional
       grounds], he may but need not join a claim for damages. Instead, he may
       bring a damages claim separately after successfully challenging the
       regulation [on constitutional grounds]. [Citation.] Thus, in Hensler we
       identified an exception to the general rule against splitting claims.
       [Citations.] In accordance with Hensler, Kavanau brought his present
       claim for damages, alleging two causes of action.” (Kavanau, supra, 16
       Cal.4th at p. 779.)
       As a result, the two-step procedure approved in Hensler allows a plaintiff to
postpone bringing a claim for damages caused by an unconstitutional taking until a
mandamus proceeding has been completed, provided that the mandamus judgment or
order establishes an unconstitutional taking or due process violation.
       C.     Sufficiency of the Pleadings
              1.       Application of Section 66499.37
       Before addressing whether the exception (i.e., the two-step procedure) set forth in
Hensler and discussed in Kavanau applies to Honchariw’s claims, we first consider
whether those claims fall within the statutory text of section 66499.37.
       First, we conclude the Board’s denial of Honchariw’s vesting tentative map
application in March 2009 was a “decision of an advisory agency, appeal board, or
legislative body concerning a subdivision” as that phrase is used in section 66499.37.
       Second, Honchariw’s complaint for damages is an “action or proceeding to attack
[or] review … the decision” of the Board concerning the subdivision proposed by
Honchariw. (§ 66499.37.) The scope of this statutory text was addressed in Hensler
when the court stated “section 66499.37 applies by its terms to any action involving a
controversy over or arising out of the Subdivision Map Act” (Hensler, supra, 8 Cal.4th
at p. 23), and concluded the inverse condemnation action before it was governed by



                                             12.
section 66499.37 (Hensler, supra, at p. 7). Similarly, we conclude that Honchariw’s
inverse condemnation action regarding the denial of Honchariw’s subdivision application
involves a controversy arising out of the Subdivision Map Act.
       Therefore, Honchariw’s inverse condemnation action falls within the statutory text
of section 66499.37 and is subject to the 90-day limitation period, unless the exception
identified in Hensler applies.
              2.     Application of the Hensler Exception
       Based on our interpretation of Hensler and Kavanau, the exception identified by
the Supreme Court in Hensler applies only if the plaintiff in the inverse condemnation
action “alleges the existence of a final judgment establishing that there has been a
compensable taking of the plaintiff’s land.” (Hensler, supra, 8 Cal.4th at p. 7.)
       Here, Honchariw alleged that his petition for writ of mandate sought to set aside
the disapproval of the subdivision application “because the Board did not comply with
the ‘anti-NIMBY’ protections of Gov. Code Sec. 65589.5(j).” Honchariw did not allege
that a compensable taking was established in the mandamus proceeding.
       Therefore, Honchariw failed to make the necessary allegation to come within the
exception identified in Hensler because he did not allege “the existence of a final
judgment establishing that there has been a compensable taking of the plaintiff’s land.”
(Hensler, supra, 8 Cal.4th at p. 7.) Furthermore, Honchariw has not asserted that such an
allegation can be made. Consequently, we conclude that Honchariw’s inverse
condemnation action is untimely under section 66499.37.

III.   SANCTIONS*
       A.     Standard of Review
       Appellate courts apply the abuse of discretion standard of review to orders
awarding or denying sanctions under Code of Civil Procedure section 128.7. (Guillemin

*      See footnote, ante, page 1.


                                            13.
v. Stein (2002) 104 Cal.App.4th 156, 167.) The abuse of discretion standard calls for
varying levels of deference depending on the aspect of the trial court’s ruling under
review. (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711.)
        First, the trial court’s findings of fact will be upheld if supported by substantial
evidence. (Haraguchi v. Superior Court, supra, 43 Cal.4th at p. 711.) Second, its
conclusions on questions of law are subject to independent review. (Id. at p. 712; e.g.,
Optimal Markets, Inc. v. Salant (2013) 221 Cal.App.4th 912, 922 [interpretation of
language of Code Civ. Proc., § 128.7 is subject to de novo review].) Third, where the
particular legal criteria being applied requires the trial court to consider and weigh
multiple factors, the result of that weighing process will be upheld on appeal so long as
the trial court did not exercise its discretion in an arbitrary, capricious or patently absurd
manner that resulted in a manifest miscarriage of justice. (People v. Jordan (1986) 42
Cal.3d 308, 316; Bank of America, N.A. v. Superior Court (2013) 212 Cal.App.4th 1076,
1089 [abuse of discretion standard measures whether, given the established evidence,
trial court’s decision falls within permissible range of options set forth by applicable legal
criteria].)
        B.     Sanctionable Conduct
        Subdivision (b) of Code of Civil Procedure section 128.7 lists four types of
sanctionable conduct.
        Defendants argue Honchariw’s pursuit of the inverse condemnation action was
frivolous and therefore sanctionable under subdivision (b)(2) of Code of Civil Procedure
section 128.7. That provision states it is improper for a pleading to present claims that
are not “warranted by existing law or by a nonfrivolous argument for the extension,
modification, or reversal of existing law or the establishment of new law.” (Ibid.)




                                              14.
       C.     Contentions of the Parties
       Defendants contend Honchariw’s inverse condemnation claim was frivolous
because it was filed well beyond the 90-day limitations period contained in section
66499.37 and “the California Supreme Court and courts of appeal have consistently held
that the sweeping language of Government Code section 66499.37 applies to all claims
arising from a local government’s subdivision decision, including constitutional claims
like Honchariw’s takings and substantive due process claims.”
       Honchariw contends his complaint was not frivolous because he followed the two-
step procedure approved in Hensler and Kavanau. As discussed in part II.B.2, ante,
Honchariw supported his position by quoting excerpts from a practice guide.
       D.     Analysis
       We conclude that it was not unreasonable under an objective standard for
Honchariw to adopt a literal interpretation of the following statement by our Supreme
Court in Kavanau:

       “In Hensler …, we held that, if a property owner brings a timely action to
       set aside or void a regulation, he may but need not join a claim for
       damages. Instead, he may bring a damages claim separately after
       successfully challenging the regulation. [Citation.]” (Kavanau, supra, 16
       Cal.4th at p. 779.)
       Here, Honchariw brought a timely mandamus proceeding and obtained a writ of
mandate directing the Board to set aside its decision denying his subdivision application.
Thus, in a literal sense, Honchariw brought “a timely action to set aside or void” the
Board’s denial of his application. (Kavanau, supra, 16 Cal.4th at p. 779.) Honchariw’s
literal approach treated the statement in Kavanau as complete and failed to recognize it
was general in nature. In other words, the description of the two-step procedure in
Kavanau did not set forth all aspects of the rule established in Hensler. Specifically, that
description was incomplete because it did not reiterate Hensler’s requirement that the
initial mandamus proceeding must result in “a final judgment establishing that there has



                                            15.
been a compensable taking of the plaintiff’s land.” (Hensler, supra, 8 Cal.4th at p. 7.) In
effect, Honchariw’s position was that Kavanau expanded the exception created in
Hensler. We conclude this position was not unreasonable under an objective standard.
Therefore, Honchariw’s reliance on this interpretation of Kavanau in his initial and
subsequent pleadings was not frivolous for purposes of subdivision (b)(2) of Code of
Civil Procedure section 128.7.
       Consequently, we conclude that the trial court did not abuse its discretion in
denying defendants’ motion for sanctions under Code of Civil Procedure section 128.7.
                                     DISPOSITION
       The judgment of dismissal and the order denying the motion for sanctions are
affirmed. The parties shall bear their own costs on appeal.

                                                                _____________________
                                                                          FRANSON, J.
WE CONCUR:


 _____________________
GOMES, Acting P.J.


 _____________________
POOCHIGIAN, J.




                                            16.
