soldier with rifle american civil warTHEN AND NOW


The History of Palos Verdes Estates

Frank VanderlipIn the early 1900s, Southern California was a mecca for New York financiers. They came by train in droves, to camp out: first, in Pasadena, and then Montecito and Santa Barbara. Several of them bought up huge tracts of Spanish rancho land for a song. Among these men was Frank Vanderlip, who, fronting for a Wall Street syndicate in 1913, bought up 16,000 acres of Palos Verdes for $2 million.

Vanderlip was a farm boy from rural Illinois who rose to the position of president of Citibank. At the age of 16 his father died and he went to work operating a lathe in an Oswego, Illinois factory. In 1885, with a year of college completed, he became an editor on the staff of the Aurora Evening Post. A year later, he was in Chicago employed with a financial services company. In 1889, he became the financial editor of the Chicago Tribune and this job carried him to Washington D.C., in 1897, as the private secretary to Lyman Gage, who was then the Secretary of the Treasury in President William McKinley's administration. (Gage was President of the First National Bank of Chicago.) Gage put Vanderlip in charge of establishing the market for the sale of $200 million of bonds for the funding of the Spanish-American War, which Vanderlip accomplished in thirty days as the head of a sales force of 700 employees. Five years later he was a vice president of the National City Bank of New York, and a few years after that, its president.

early PV landscapeIn the course of his rise, Vanderlip became associated with many of the most powerful of the Wall Street players of the day, and, with their money, he fronted for them in the purchase of several large tracts of land. In 1912, his syndicate bought 15,000 acres of land at the mouth of the Brazos River in Texas and founded the city of Freeport. And, in 1913, he fronted the purchase of 16,000 acres of Palos Verdes real estate from Jotham Bixby, who had stolen it for a song from its original Spanish land grant owners, the Sepulvèda family.

Our Home

 In 1916, Vanderlip constructed the first residence on the Palos Verdes peninsula, in theVanderlip house Portuguese Bend area of what is now Rancho Palos Verdes. A larger "cottage,"  known as the "Villetta," was built in 1924 and other buildings were constructed as well, including what is today the Riding Club. Vanderlip died in New York, in 1937.

Casa FeliciaVanderlip hired the Olmsted Brothers, to plan and landscape what is now Palos Verdes Estates, giving Frederick Olmsted in the bargain the cliff-side lot known today as Case Felicia.

The Olmsted Brothers, in cooperation with the engineering firm of Koebig & Koebig, laid out a road net, landscaped the slopes and planted hundreds of trees. However, by the time World War I began, the project had stalled when Vanderlip sailed off to Washington to join Wilson's administration. At war's end, Vanderlip, back in New York, gave a land promoter named Edward Gardner Lewis an option to buy the Palos Verdes Property for $5 million. Lewis had successfully developed University City, a suburb of St. Louis, and would later develop, after a fall from grace, what is now Atascadero.

Vanderlip established a real estate trust in Lewis's name, capitalizing the project through the sale of notes which were convertible to Palos Verdes real estate. Through the trust, Lewis expected to raise $30 million for infrastructure. When this failed, the trust dissolved and title to the land reverted to Vanderlip's syndicate. At this point—now the middle Twenties—Vanderlip had a new trust set up ("Palos Verdes Trust") and this trust purchased 3,200 acres of the Palos Verdes property owned by the syndicate, to establish what is now Palos Verdes Estates. The trust assumed title to Lewis's improvements, which included roads, sewers and landscaping. Vanderlip's trust then opened Palos Verdes Estates for public sale in June 1923.

Frank Vanderlip Determines to Establish Parkland For Us For All Time

In 1923, Frank Vanderlip, through his trustee, the Commonwealth Trust Co, drafted what are called, in law, "covenants running with the land" into a grant deed of the 2,300 arces comprising Palos Verdes Estates. The deed was executed in 1925, by Bank of America, after Commonwealth Trust Co. had merged into it, naming as grantee the newly created Palos Verdes Estates Homes Association. By accepting the grant deed, the association made promises to Vanderlip's trustee which bind its successors in interest and which are the proper basis upon which the parcel holders' present case against the association turns.

The Palos Verdes Homes Association promised Vanderlip's trustee this:

 "Bank grants to association [parkland]. This conveyance is made and accepted and said realty is hereby granted, subject to each of the following provisions, conditions, restrictions, and covenants, to wit:

2. each and every restriction, condition, covenant contained in the Declarations of establishment of restrictions, in the declaration of establishment of basic protective restrictions, declaration of establishment of local protective restrictions. . . is incorporated herein. . .

3. that the said realty is to be used and administered forever for park or recreation purposes, for the benefit of the persons residing within the boundaries of [the property]. . . and for the further purpose of protecting the residents from any use which may be detrimental to the amenities of the neighborhood. . . ; provided . . .

5. . . . , however, that said realty of any portion thereof, may be conveyed by association subject to the same conditions as herein contained with respect to the purposes for which said realty may be used, to a park commission, or other body suitably constituted by law to take, hold, and maintain and regulate public parks."

6. . . . grantor has reversionary rights if any of the covenants, whether in the deed or in the declarations are violated. . . and, as to each lot and parcel owner the covenants shall be covenants running with the land, and the breach thereof may be enjoined by the grantor, its successors or any lot owner. . . ., provided also that, by the acceptance of this deed, the grantee agrees with the grantor that the covenants set forth are a part of the general plan . . . and are for the benefit of the property and shall apply and bind the respective successors of the parties hereto."

Vanderlip's grant deed gives the Estate's parcel holders, rights, the value of which greatly enhances the market price of every parcel, whether adjacent to parkland or not. Why? Because the existence of the parkland prevents prime real estate from being depreciated in market value by intense density that the pressures of the Los Angeles population creates. Frank may have grown up a farm boy, but at the end he knew the financial value of our parkland. Now, to give the politicians even a hint we are willing to give up our rights, without a legal reaction, makes us very stupid people—from Frank's point of view.

The City and the Association Collude to Ignore Vanderlip's Intent,
and Deed Away Our Parkland

In about 2010, the Palos Verdes Unified School District, the grantee of a parcel of land from the Palos Verdes Homes Association, in 1938, sought to sell the land for profit in violation of the condition that all land given to the district was to be used solely for school purposes. To accomplish this goal, the District sued the City of Palos Verdes Estates, making the claim that Vanderlip's intentions, and the restrictions and covenants he caused to be included in the grant deed of 1925, were no longer binding on the District and it could do what it wanted with the land it received; i.e., sell it for residential construction. In 2012, the Superior Court rejected the District's argument, holding that, as a matter of law, all of Vanderlip's deed restrictions remained in full force and effect.

The district filed an appeal from the court's ruling, and while it was pending Dr. Robert Lugliani stepped into the picture with an offer neither the District, the City, nor the Association had the moral courage to refuse.

Since 1975, the good doctor and his wife, Doris, through a trust, own two lots at the cul de sac of Via Panorama. Over the years of their ownership, they had invaded the parkland that surrounds their lots and, among other things, carved a "sports field (i.e., a tennis court in the making)," inherited retaining walls build by a predecessor-in-interest, one of which is twenty-two feet high; built a set of stairs, pillars, a driveway, barbeque, a gazebo, and a row of forty foot high trees. Their activity put them in a legal gun battle that ran on for years with the City and the Association which they sought to end in an ingenious way.

The District, having lost its bid to gain title to its Vanderlip parkland, sans his restrictions, now offered to deed to the City the property it received from the Association in 1938. Here, Dr. Lugliani stepped in, with a "donation" of $1.5 million to the District, "to alleviate the District's fiscal challenges." (see Association Brief on Appeal at p. 35.) In other words, Dr. Lugliani paid $1.5 million to the District in exchange for the City deeding to the Association to deed to him the parkland surrounding his home for an additional $500,000. Of this latter amount, the Association kept $400,000 for itself and gave the remaining $100,000 to the City; i.e., Lugliani reimbursed the association for the attorney fees it incurred in obtaining the declaratory judgment that the 1925 original grant deed restrictive covenants were still in force. As the superior court put it, in the current Citizens for Enforcement of Parkland Covenants litigation,

"The whole settlement was clearly designed to get around a court order (the District Litigation) that reaffirmed that the deed restrictions on the School District deed in issue (and others) were and are effective, and to obviate the rights of all of the other property owners." (Summary Judgment Ruling of 6/29/15 at p. 25.)

In accordance with the settlement, the City quitclaimed the subject parkland to the Association, placing an open space easement upon it which extinquished the right of public access. This maneuver placed the Association in the position it was in, in 1925, when the Vanderlip trustee's grant deed of Palos Verdes Estates became effective. The next minute, the Association conveyed the parkland to the Lugliani's in a grant deed that was made, by its terms, subject to the City's easement described in its quitclaim deed. (Oh, how muddled things become when we lawyers practice to deceive.) The Association's board then passed a resolution, without public notice and without obtaining 80% of Dr. Lugliani's neighbors' consent, which authorized its "spear head"—President Phil Frengs—to execute the settlement agreement, on the grounds that the Board had "considered the advice of its attorneys," and "that signing the settlement agreement was in the best interest of the Association's members." (Association Opening Brief at p. 37.)

Lugliani lot
The Lugliani Estate Today

The Lugliani Estate Yesterday

Who can fault Dr. Lugliani, here? The fellow is rich, so are we all who live in this beautiful place a New York banker willed us, in 1923. The parkland provides trails and promontories that give us vistas which stretch over a hundred miles to Anacapa and sixty to San Nicholas, the far distance, with Santa Catalina and Malibu in the near. At night, with new moons, we can see they sit, like golden cradles, on the edge of the rippling sea, with the old, we see them huge, rising up from behind the coastal mountains, and sweeping away below them are the night lights of LA, twinkling and bright to the horizen. On smogless days we can see the Getty, the Griffith Observatory, the Hollywood sign, and the spires of Century City and downtown LA. With seven kids to entertain, the good doctor, using his new found parkland, can play with them a football game, swim in a pool, throw a barbeque party, or just sit in his gazebo and gaze at the world he's on top of, satisfied with himself. Nothing wrong with that; except he's put a fence around it, with signs that warn his neighbors to keep out. This is the problem.

To justify the association board's giving away parkland to the Lugliani's, its several lawyers, Sidney F.Croft, Roy Weatherrup et al., threw the kitchen sink at the superior court judge to whose court the Citizens case fell. The board's lawyers argued in the Superior Court and are now arguing again to the Court of Appeal that the board had "the right to conclusively interpret" Frank Vanderlip's restrictive covenants and conditions; and that, in conclusively (and exclusively) interpreting the restrictions, the Board reasonably exercised the Business Judgment Rule.

According to Mr. Croft, the Board's exercise of business judgment involved the task of interpreting the meaning of the language of Mr. Vanderlip's deed restrictions. This task was done, he declared, by the Board reviewing the deeds "to ascertain, before determining [its decision], what would be in the best interests of the Home Association's members." (Association Opening Brief at p. 50.)

In doing this, Mr. Croft declared, first, that "the Association interpreted the relevant documents as a whole to provide that the restrictions. . . no longer applied as the result of [the city's] conveyance of the parkland to the Association." And, second, that "The Association's interpretation (i.e, the Board's) was that the restrictive covenants in these deeds were not intended [by Mr. Vanderlip] to apply to the Association should it reaquire the parkland," because Vanderlip would have known that "the Association required the discretion to respond to changing circumstances. . ." (supra, p. 53.)

To these mixed arguments, the superior court responded with, "hogwash!" As to the argument that we, the parcel holders, are barred from complaining about the Board's exercise of its assumed discretion to sell out from under us our parkland, because we are bound by the settlement agreement the Board signed, the Court wrote:

"The only reasonable interpretation of these documents [Vanderlip's deed restrictions] is that they were intended to and went out of the way to provide for the separate and independent rights of property owners and residents to proceed on their own as a back-up just in case the Association did not act or would not act to protect their interests.

A limitation or restriction running with the land of the type in issue, once imposed, continues and applies to the grantor, its successors-in-interest and to grantees and their successors-in-interest. One of the essential distinctions between a covenant running with the land and a condition, as here, which is technically and most often a condition subsequent running with the land, is that the latter carries with it a reversionary right to the grantor (or its successors) to enable it to enforce the prohibition, if imposition of the restriction or condition is violated.

The entire structure and intention of the grant and related documents from the 1920s onwards was that the Association would be the preserver of the parklands. Under the Association's theory, the minute the Board acted to reclaim a parcel, which it was given a right to do only to enforce parkland restrictions, suddenly, it would have the right to strip that parcel of all its restrictions crying 'Merger!, Merger!', and then pass it back to the [Lugliani's], now cleansed of any restrictions.

Note: Attorney Croft, representing the association in the District Litigation, in 2011, took the position with the court that the "Merger" doctrine did not apply to the deed between association and district, but now is taking the position with the court that the Merger doctrine does apply to the deed between city and association.

In fact, why then stop with that parcel? Under the Association's theory, were it to receive another piece of parkland from the City, even all of the parkland, it could cry 'Merger!' as to them all, strip all deeds of restrictions and sell them (as the District wished to do) for private housing for a substantal sum." (Court ruling at p.25 [edited for clarity].

So, what's to prevent the ten or so public servants that sit on the City's council and on the Assocation's board, pulling the same stunt again?

Nothing. Nothing at all. Why? Because we neighbors of Dr. Lugliani don't care. Three fourths of us don't even know their names. They have been sitting there, changing chairs, rearranging chairs, slipping their pals into the slots surreptitiously so long that they think they are Vanderlips themselves. When was the last time any of us found the PVHA annual vote envelope in the mail, and actually opened it; much less took the time to fill it out and send it in? My wife and I have been residents of Palos Verdes Estates for forty years and haven't done it once. So there's nobody at fault and no one to blame for this pickle of a fraud but ourselves.

The City Manager Explains to Us Its Actions

Question: What were the factors involved in deciding to appeal the judgment? Did you consider input from residents?
Answer: The City Council weighed several factors in its consideration to appeal. The Council listened to those who opposed an appeal. While the Council understood their concerns, there were two very significant factors that stood out in the final decision: 
• The serious incursion into our residents' management of our parklands and open space;
• The City's exposure to ongoing legal fees that would result from the court's decision to maintain "continuing jurisdiction" if the judgment was left unchallenged.
For these reasons, the Council decided it was in the best interest of all Palos Verdes Estates residents to have the City join the appeal.

Joe Ryan Comments:

Boy, that is grand. Let's not be abstract here. It was not the "council" who grandly decided, pondering and thinking and considering. It was the individuals who were members of the council at the time of the events at issue.

Current Members of Council

Of these five individuals, it appears only two of them were members of the Council at the time of the events, with the exception of the last event—the decision to appeal the plaintiff Citizens' judgment and retain several law firms to do it.

Current Members of the Board

Two of the current members—Phil Frengs and Ed Fountain—were on the board when the decisions were made to settle the District Litigation, to appeal the summary judgment awarded to the Citizens plaintiffs, and to retain the law firm of Lewis, Brisbois, Bisgaard & Smith. On November 9, 2016, the Lewis, Brisbois law firm has filed the board's one hundred and thirty-five page Appellant's Opening Brief. The brief identifies the lead attorney as Roy Weatherup, aged about eighty, who charges what? $500 per hour? The fees split how between the Association and the City? Two associates assist him.

What does this mean: "The serious incursion into our residents' management of our parklands and open space?" What does this mean? "Our residents' management of our parkland?"

What is the "serious incursion?" Dr. Lugliani's bold invasion and appropriation of our parkland? The fact that, as plaintiffs, the "Citizens For Enforcement of Parkland Covenants" include some persons who are not Dr. Lugliani's fellow parcel owners? The fact that the superior court has resolved the litigation against the interest of the Association which presses the courts, to justify its duplicity with the City to assuage Dr. Lugliani? Of the Association's board members, one—Phil Frengs—may be an attorney. As currently constituted, it appears the City has at least three lawyers sitting on its council. It has a "City Attorney." It has a share of Roy. Yet no one among this crowd can write clear English? Explain what they really mean?

The second "reason" the association gives for its settlement of the district litigaton, and now pressing the appeal in the Citizen's litigation is "legal fees." Since the litigation began years ago, how much money has the Association spent in legal fees: fees to the city attorney, fees to Roy, fees to whoever. Versus how much money in fees will be incurred in the future, in obeying the court's order, which merely requires the Association, not the City, to put the parkland back in the condition it was in, before Dr. Lugiani invaded it? Not much, in this lawyer's view. And we, who have ignored our duty to supervise our Association's board, cannot complain the board's conduct may cause us to foot the bill to clean up the mess; for the court's decision clearly means that it is we who are responsible for our parkland, and delegating the duty to our agents in the name of the "Palos Verdes Homes Association" doesn't get us off the hook.

Excerpts from the City's website:

Q: What is the Judgment's challenge to local management of our parklands?

A: The judgment contains a provision that allows the plaintiffs in the lawsuit to appear before Judge Meiers on 24 hours' notice to seek to force the City to remove any "structure, vegetation or object" that they feel might be encroaching on City parklands and open space. This extraordinary power applies to all of the parklands in the City, not just the Via Panorama property. These are far-reaching powers given to one individual and an unincorporated organization.

Joe Ryan Comments:

I have the superior court's judgment in hand. Reading it, I find nothing in it that remotely states what the Council says it states. The order is limited to the issue of Dr. Lugiliani's described improvements being removed from the parkland around his home. As for the "Oh gee, we can get hauled into court on a moment's notice," this is silliness. In the ordinary course, a hearing is set, time is given for briefs and then there is an appearance by Roy to make his arguments.

Q: Are there other cost considerations?

 A: Yes. Under the current court decision, taxpayer money may have to be used to remove any and all encroachments found on parklands and open spaces. Then the City would incur additional expenses attempting to recover costs by litigating against property owners. The removal of encroachments would change from a cooperative effort to an adversarial one. Under the current system operated by the City, violators must pay for encroachment removal.

Joe Ryan Comments:

This is more silliness. It is form over substance. The Judgment is limited to Lugiliani's adopted parkland. The cost of removal is a matter of several thousand dollars, certainly less than what the City is now paying to remove the infamous "fort" at Lunada Bay; i.e., the value of one day's legal work provided by Roy on the construction of his 135 page opening brief. But, make no mistake; the responsibility—the duty that goes with the right—is plainly ours.

What about the Palos Verdes Homes Association? What does it say? Mr. Philip Frengs, a Board member and acknowledged as the person who "spearheads" the Association's "legal strategy," speaks for the Board with a flyer he mailed, at his expense, to Dr. Lugliani's fellow parcel owners. The flyer states the Board's side of the case this way:

The whole thing is PVE resident John Harbison's fault. "For more than three years," Mr. Frengs states, "PVHA has been under attack by Harbison. . . . He has bitterly attacked PVHA's Board for its decision to exercise its right to appeal a flawed decision of the superior court. Please don't be deceived by Harbison's self-serving rhetoric. Don't let Harbison's campaign of mistruths, mischaracterizations, and attacks. . . sway you when voting in the upcoming election."

Mr. Frengs emphazises in his flyer that, "To say the PVHA is selling or will sell [or has sold] parkland is simply false." Well, though I am, as I have confessed, a negligent citizen of the City, in my failing to even open the Association's voter mail, and though I know none of the persons who give their time as Council and Board members, I must say that, as a matter of law, Mr Frengs' statement is wrong—which is why Roy has spend sixty-one of his 130 page opening brief explaining that Mr. Vanderlip gave the association the discretion to do it!

The Board's Appellate Counsel Roy Weatherup

Roy, being the good lawyer that he is, can read plain English as well as the next person: so, to avoid the legal effect of the plain language in the 1925 grant deed, that memorializes the association's express promise to Vanderlip's trustee—that it will never sell parkland for private use—he invokes the Declaration of Basic Protective Restrictions, which contains a provision that the board is the exclusive interpreter of the use restrictions specified in it, for the proposition that the association has the exclusive and final authority to interpret the mutual intent of the parties to the grant deed.

mickey mouseIt is at this point that Roy's appellate brief turns into mush. First, he tells the Court of Appeal that the association's board member and its "general counsel," Sidney Croft, knows "the circumstances of the drafting of the governing documents and how such documents are administered and understood by professionals involved in homes associations." But the problem with Roy relying on Croft, is that he spends his entire brief talking about the fact that, in 1940, the association deeded the subject parkland to the city, and that, in 1212, the city deeded it back to the association which then deeded it to Lugliani and by the application of the magic "Doctrine of Merger" the last deed passed to the Lugliani without the restrictive covenant that the parkland must be used forever as parkland. In an earlier case, involving a dispute between the association and a parcel owner, the Court of Appeal, in 2002, found the association's arguments "simply false," and that "its entire argument amounts to nothing more than smoke and mirrors." (See, Palos Verdes Homes Association v. Mittal (2002 Cal. App. Unpub. LEXIS 10370)

So, too, here: Roy is simply conjuring an argument out of nothing. The Declaration of Basic Protective Restrictions, incorporated by reference in the grant deed of 1925, merely gives the association the power and authority to conclusively interpret the meaning of the restrictions set forth in the Declaration, not the covenant running with the land set forth in the grant deed, itself, in which the association promised Vanderlip's trustee it would administer the parkland forever, as parkland, and sell it only as parkland for public use.

To make the tiger disappear from the stage, Roy tells us to follow the California Supreme Court's decision in Werner v. Graham (1919) 181 Cal. 174, to understand how the "burden" imposed on the parkland Lugliani now owns evaporated into thin air when the city deeded the parkland back to the association, in 2012; that is, by virture of the city deed, the parkland came back to the association free of the restriction that it be used solely for public use as parkland.

In Werner, one Marshall was, in 1902, the owner of a tract of land which at that time was unimproved. In that year Marshall subdivided the tract into 132 lots and filed a map of record showing the tract so divided. Marshall then commenced to sell and by October 1905 had conveyed title to 116 of them. Among the 116 lots sold was included the lot of Werner.  In all of the grant deeds that Marshall used to convey the lots there were inserted restrictive covenants which make it clear Marshall had in mind a general and common plan which he was following. After setting forth the several restrictions of use of the lots, the grant deed concludes with, "The grantee accepts this deed upon and subject to each of the said conditions herein set forth, and agrees that each condition and covenant runs with the land and shall be binding upon the successors in interest of the grantee." (This is the same language Vanderlip's trustee inserted into the 1925 grant deed.)

After selling the 116 lots, Marshall quitclaimed to the then owner of Werner's lot any interest in it. It is this fact of the case that Roy, in his brief, seizes upon as the basis to argue that, in 2012, when the city quitclaimed its interest in the parkland to the association, it—the association—was legally released from the restriction that the parkland must be used as parkland for the public's benefit. Here is Roy working his smoke and mirrors: In Werner,the Supreme Court held merely that Marshall's quitclaim to Werner's predecessor in interest had the effect of releasing the grantee from the restrictive covenants, but only "so far as it was in the power of Marshall to release them." (Werner, at p. 178.)

In the Lugliani case, unlike in Werner, the city, when it quitclaimed the parkland to the association, did not have the power to release the restrictive covenants running with the land, for the simple reason that, when the association deeded the parkland to the city, in 1940, it, unlike Marshalll, did not have the legal power to release the restriction—it having promised Vanderlip's trustee, in 1925, that it would never sell the parkland for any purpose other than it be used as a park for the public's benefit, and that its successors in interest would be bound by this promise.

Furthermore, the 1925 grant deed between Vanderlip's trustee and the association, imposed this promise upon the association as a covenant running with the land and attached it to every parcel owner's lot, expressly giving the parcel holders standing to enjoin the association if it breached the promise; i.e., "grantor has reversionary rights if any of the covenants, whether in the deed or in the declarations are violated. . . and, as to each lot and parcel owner the covenants shall be covenants running with the land, and the breach thereof may be enjoined by the grantor, its successors or any lot owner. . . ., provided also that, by the acceptance of this deed, the grantee agrees with the grantor that the covenants set forth are a part of the general plan . . . and are for the benefit of the property and shall apply and bind the respective successors of the parties hereto." (See, 1925 grant deed.)

It follows from this that, unlike in Werner, the parcel holders have not only privity of estate with the association in the parkland, by virtue of the covenant running with the land recorded in the grant deed, itself, but also privity of contract since at the very least they are third party beneficiaries of the promise the association made with Vanderlip's trustee. If, then, as the Supreme Court observed in Werner, the covenant is to be given force, as between the parcel holders and the association, "it clearly must be because: (a) The burden imposed by [the covenants] was one upon the land conveyed and incident to its ownership, so that the [association], when it acquired the [parkland], acquired it subject to such burden; and (b) the benefit of the covenant was an incident of the ownership of the other lots in the tract, so that when [Vanderlip's trustee] parted with them the benefit of the covenant passed with them as an incident of their ownership and the [current parcel owners] are now entitled to such benefit as the present owners of the lots. In other words, in order for the covenants to have force, not merely as between the original parties, but as between [subsequent owners of the parcels], it must appear that their insertion in the deed by [Vanderlip's trustee] was, in effect, the creation of what amounts to a servitude, to the burden of which the [association's parkland] was subjected as the servient tenement, and the benefit of which the remainder of the tract was entitled as the dominant tenement." (Werner, at p. 180.)

It is plain from the undisputed facts, then, that the City deeded parkland to the Association, and the Board, without public notice to its members, and without obtaining the affirmative votes of 80% of its members, deeded the parkland to Dr. Lugliani; and accepted from him, in consideration of the execution of the deed, $500,000, $100,000 of which, as sort of a referral fee, it gave to the City. Though my bar number is not quite as low as Roy's, it is easy to see that the facts indisputably show the Board sold the parkland to Dr. Lugliani for his family's private enjoyment—by interpreting away Mr. Vanderlip's unambiguous intent that it not do so, and making go poof the promise it made to him that it would not do so.


At the "meet the candidates" session held on December 12, Mr. Frengs, President of the PVHA board, was asked the question, Why the settlement of the School District litigation, and why the appeal of the judgment in favor of Mr. Harbison?

Mr. Frengs answered the first part of the two part question with the statement that, summed up, informed the audience that the managers of the City of Palos Verdes Estates suckered the PVHA board into it. After the trial court entered judgment on the school district's action in favor of PVHA, the city approached the board with the idea of deeding parkland to PVHA, to be deeded instantly to the Lugliani's. Since this would mean that the PVHA's judgment against the school district, which established that the covenant against selling parkland for private development was enforceable, would become a final judgment in favor of PVHA, and because PVHA would receive $400,000 in the transaction, the board decided the city's proposal was a good deal and seized it. (Apparently the board did not think through the consequences of flipping its legal position from one side of the coin to the other.)

But then Mr. Harbison, with other parcel owners, sued PVHA for a declaratory judgment that it had breached the covenant running with the land that forbids it from selling parkland for private development. When the court ruled that, as a matter of law, PVHA had breached the covenant, it also ruled that the deed from PVHA to the Lugliani's was null and void, and because now PVHA, not the city, owned the parkland, the legal duty fell to it to enforce the deed restrictions that the city had ignored for thirty years, by returning the parkland to the condition it was in before the Lugliani's and their precedessor in interest invaded it.

In essence, the board was caught in a catch 22 of its own making. Mr. Frengs complains that the court's ruling should have put the parties back where they were before the city deeded the parkland to PVHA, which would put the financial burden of clean-up on the city, not on PVHA. But, in the context of Harbison's declaratory judgment action, the city's deed is immaterial as it, standing alone, has nothing to do with the fact that PVHA indisputably breached the promise it made to Vanderlip's trustee not to sell parkland for private use.

Of course now the unwinding of the convolted settlement the city concocted means that the Lugliani's are out $1.5 million which they will never get back, because they did not give it as consideration for the deed, but gave it as a "gift" to the school district. PVHA will have to return the $500,000 to the Lugliani's, but it gave $100,000 of this sum away to the city. And it will have to sue the Lugliani's for the cost of returning the parkland to its natural state (Or maybe the Lugliani's will have to sue it, to recover the $500,000, as PVHA may use the sum, like an offset, to repair the parkland, giving back what's left to the Lugliani's.) In a nutshell, ladies and gentlemen, the situation is, indeed, a mess. Who is best to sort it out? Who knows.

So, now to your choices in this bastion of Republican Trumpism.

Candidates for Board Offered by Residents for Open Elections

(Link to for statement of the candidates' credentials and positions.)

It's such an easy thing: open the vote card envelope, choose among the names of the candidates listed there, seal it and make sure it is received before January 4, 2017. My wife and I will.

A Personal Comment

At the city hall meet the candidates session, on December 12th, incumbent Ed Fountain, in answering a question, said the parkland is the city's responsibility, when it comes to such things as placing a bench on ocean view parkland, for senior citizens to sit on; that the board has no dog in the fight; that years ago the City's Parkland Committee rejected the idea, because it would invite outsiders to sit on our parkland. I don't think Mr. Vanderlip would agree: he intentionally sliced off the best side of the 16,000 acres of peninsula his trust owned, 3,200 acres of Southern California shoreline, just a few miles from the LA city line, and made it our community. He knew the best way to keep the real estate valuable was to plant it in parkland, and, in doing it, he knew parkland to be parkland needs to be used as parkland.

Since his day the Legislature has created the Coastal Commission and has given it the mandate to make the enjoyment of the coastline available to as many citizens as reasonably possible, given the private rights of property owners. So both Mr. Vanderlip and the State expect us to be good stewards of the coastline in our possession. In choosing our association's leadership, then, we might do ourselves well by choosing good stewards who will enforce the 1925 grant deed covenants the city promised it, in 1940, it would keep; and push it toward making our parkland as amendable to the public's use as the citizens of Pacific Grove, Los Osos, Santa Barbara, and a dozen other communities, have made theirs. Which means benches, not cold rocks, to sit on.

The Court of Appeal's Decision, January 30, 2018

1. It is a fact for a jury to decide whether the City knew, when it reconveyed Parcel A to the Association, that the Association intended to convey Parcel A to the good doctor for $500,000. (What happens to the $100,000 and the title to Lots C and D, which the Association gave the city in exchange for the reconveyance of Parcel A remains to be seen.)

2. The Association acted wrongfully when it ignored the clear language of the original deed restrictions, and sold Parcel A to the good doctor and, therefore, the conveyance is void as a matter of law.

3. The Association and the good doctor must pay Mr. Habison an amount of attorney fees he incurred in prosecuting the complaint.

What Happens Next?

The Association or the good doctor may petition the Supreme Court of California for review of the Court of Appeal's decision.

The City must either defend against the claim that it knew the Association intended to sell Parcel A when it conveyed it to the Association, or settle with plaintiffs.

The good doctor may sue the School District to recover his $1.5 million "donation," and he may sue the Association to recover his $500,000 payment for Parcel A.

The Association may sue the Board members and its lawyers, who were responsible for the decision to ignore the deed restriction and manufacture legal arguments to justify the decision.

The School District may sue everyone, to get back Parcels C and D, or something in exchange.