Capri Mobile Villa LLC v. City of Petaluma

However, in order to do so, the City informed Capri that its application required the preparation of an Impact Report, at an estimated total cost of $239,050. That included $75,000 for appraisals of the mobile homes along with related administrative costs. The City required Plaintiff to deposit that amount before it would start on an Impact Report. Capri alleges it is unable to afford this payment and asserts a cause of action for declaratory relief under Code of Civil Procedure section 1060 and 42 U.S.C. section 1983.

Plaintiff alleges the Impact Report charges (1) are an unconstitutional exaction and taking under the Fifth Amendment; (2) burden its First Amendment right to petition; (3) are unlawful “taxes” under articles XIII A and XIII C of the California Constitution; and (4) are “unreasonable” under section 65863.7, subdivision (g). Plaintiff seeks a declaration that the charges are unlawful and seeks an injunction preventing the City from collecting the $239,050 as a precondition of processing Plaintiff’s application to cease operations.

2. City’s Arguments 19

As a whole, the City’s arguments do not establish a failure by Capri to allege facts sufficient to constitute a cause of action under any theory. The demurrer to a complaint must be overruled if the complaint states any valid claim entitling Plaintiff to relief. (Quelimane Co., Inc. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 38-39.)

With respect to the City’s argument that the controversy is unripe, it has not shown that Capri’s alleged inability to afford payment of the required fee causes Capri’s claims to be unripe because the exact amount of the fee is yet to be determined. The complaint alleges the City’s November 10, 2025 “decision” conditioned the processing of Capri’s closure application on the payment of $239,050 and that Capri must make this “minimum” payment. Capri alleges it cannot pay the charge such that its application to close will not be processed, and it will be forced to continue operating the Park in the red and against its will. The controversy became sufficiently concrete at the time of the City’s imposition of the application processing fee, the amount of which is not stated in the government code. The City has not shown the claims are unripe.

With respect to the takings argument, the City argues a regulatory taking occurs only if regulation of property is “so onerous that its effect is tantamount to a direct appropriation or ouster.” The City argues that the obligation to pay money in the tax and government services user fee context is not generally compensable under the Fifth Amendment because taxes and user fees are collected in exchange for government benefits to the payor. However, this is precisely the allegation. Plaintiff alleges the regulations are so onerous that their effect is an appropriation and that the fee benefits third parties—not Capri. Capri alleges the City’s $239,050 cost is not a “user fee” because lacks this distinguishing feature of a benefit to the payor.

The City argues Government Code section 65863.7 and Municipal Code section 8.34.120 authorize local government’s reasonable administrative and processing costs to implement the statute and does not require cities to fund them with public money. While the City cites numerous cases on the issue, none establishes as a matter of law that the City’s $239,050 fee to process an application is reasonable. The issues the City seeks to resolve, whether the costs are reasonable and necessary to cover the benefits supplied to Capri, are fact intensive and not appropriate for resolution on demurrer.

The City argues that even if the challenged deposit is an exaction subject to the Nollan/Dolan analysis, the exaction has an “essential nexus” to the government’s land-use interest and have “rough proportionality” to the development’s impact on that interest. Making such a determination is a factual issue not appropriate on a demurrer. The City also argues that such fee is necessary to allow the City to obtain the information it needs to determine whether it will grant Capri’s application to cease operations.

Inherent in this argument is that the City can require Capri to continue operating the Park—even if it cannot afford to do so. The City argues that requiring Plaintiff to pay for the City’s consultant’s services to process Plaintiff’s application—including the Impact Report—avoids subsidizing any of the government services provided solely because of Plaintiff’s choice to seek to close the Park. However, the allegations are that the tenants receive a large benefit from the fee. The City appears to concede this as it agrees the fee supports efforts to relocate and subsidize the tenants.

In addition, the allegations are such that the Park cannot operate but at a loss due to the City’s regulations such that it was the City who caused the Park to have to close.

Capri argues that the possibility that Park operations may cease—and that tenants may therefore need to relocate—is a background condition of that tenancy relationship, not an externalized public impact generated by wrongful or unexpected conduct. It argues that the City therefore cannot recast the ordinary consequences of a landowner’s lawful exercise of contractual and constitutional rights as a compensable “harm” or “social costs” warranting a monetary exaction. 20

Capri argues its decision does not cause a Nollan/Dolan-cognizable harm and the “essential nexus” requirement is not met such that the $239,050 lacks rough proportionality.

The City also argues Capri’s claim is time-barred. It argues Plaintiff was required to challenge the deposit and ultimate Impact Report fee in a reverse validation action by December 3, 2024, and its failure to do so bars this action. However, Capri challenges the $239,050 processing cost, not the ordinance allowing the City to charge a reasonable fee. The ordinance’s resolution merely announced the City’s intent to recover costs and pointed to general, citywide internal hourly rates, delegating to staff the critical acts that gave rise to the burdens Capri challenges, such as which non-City-provided costs would be charged at all and which third-party consultants would be hired to provide them and on what terms or cost.

In short, the resolution did not enact the fee; it simply purported to authorize the City to charge an unknown fee in the future, allegedly contrary to Government Code section 66016(a) and (b).

The City argues that the challenged fees are not unlawful taxes and do not violate Capri’s first amendment right to petition and thus fail to allege sufficient facts under this theory. Regardless of the ultimate legality of these issues, the Plaintiff need only allege a cause of action under any theory.

The City argues Plaintiff also fails to allege sufficient facts to establish that the challenged fee is unreasonable under section 65863.7(g). To be “reasonable,” the City’s fees cannot “exceed[] the estimated amount required to provide the service for which the fee or service charge is levied.” (Gov. Code, § 66016, subd. (a).) The determination of reasonableness is a factual dispute not appropriate for demurrer.

3. Conclusion and Order The City fails to establish that Plaintiff’s complaint fails on each and every theory such that there are no facts alleged to support Capri’s single cause of action for declaratory relief. Accordingly, the demurrer is OVERRULED. Plaintiff’s counsel is directed to submit a written order to the court consistent with this ruling and in compliance with Cal. Rules of Court, Rule 3.1312.

10. SCV-270338, Salazar v. Moreno Consulting Group Inc.

Pursuant to Code of Civil Procedure section 2023.010, et seq., Plaintiff Olegario Santino Salazar (“Plaintiff”) moves for terminating sanctions against Defendant Moreno Consulting Group, Inc. (“MCG” or “Defendant”). “The discovery statutes evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination. ‘Discovery sanctions “‘should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.”’ [Citation.]

If a lesser sanction fails to curb misuse, a greater sanction is warranted: continuing misuses of the discovery process warrant incrementally harsher sanctions until the sanction is reached that will curb the abuse. ‘A decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.’” (Doppes v.

Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.)

Due to MGC’s refusal to provide responses to Plaintiff’s discovery requests, on December 11, 2025, this Court ordered Defendant MCG to provide responses, without objections, to Plaintiff’s Form Interrogatories, Set Two, Special Interrogatories, Set Two, and Demands for Production of Documents, Set Two, and deemed Plaintiff’s Requests for Admission, Set Two, against Defendant 21