Key Points

  • The Second Appellate District, Division Four, reversed a judgment sustaining the City of Palos Verdes Estates' demurrer to Wei Shi's Government Claims Act suit over a delayed ADU permit.
  • The court held that Government Code section 66317's duty to approve ADU permits ministerially is designed to protect permit applicants against delay, satisfying the second element of a section 815.6 claim.
  • The panel assumed without deciding that section 66317 imposed a mandatory duty on the city and that the city's breach caused Shi's alleged damages, because the parties did not dispute those elements.
  • Section 815.6, not the ADU statute, supplies the private right of action, so the ADU law's silence on damages did not defeat the claim.
  • The court found the statute unambiguous, cited related findings in sections 66310 and 66311 as confirmation, and discussed SB 1069's legislative history without relying on it.

A California appeals court on Oct. 23 revived a homeowner's lawsuit seeking more than $1 million from the City of Palos Verdes Estates, ruling that a state law requiring cities to approve accessory housing units without discretionary review was written to protect the homeowners who apply to build them.

A three-justice panel of the Second Appellate District, Division Four, reversed a Los Angeles County Superior Court judgment that had ended Wei Shi's suit at the pleading stage. Justice Daum wrote the published opinion, and Presiding Justice Zukin and Justice Mori concurred.

The decision allows a homeowner whose permit for an accessory dwelling unit, or ADU, was delayed in violation of state law to pursue money damages against the city under the Government Claims Act, California's general tort scheme for liability against public entities. The trial court had concluded that the ADU law served the state's housing supply rather than individual applicants, and that applicants could instead seek a writ of mandate.

State law defines an ADU as an attached or detached home with complete independent living facilities on a lot that has, or will have, a primary residence. Government Code section 66317 provides that an ADU permit application "shall be considered and approved ministerially without discretionary review or a hearing." The statute also requires a decision within 60 days of a completed application when the lot already has a home, and it bars a city from relying on local rules, other than a conforming ADU ordinance, to delay or deny the permit.

According to the complaint, whose allegations the court accepted as true at this stage, Shi first applied for an ADU permit in 2020, hoping to finish the unit at the same time as the family home on the lot. The city told him that approval would require a conditional use permit, discretionary review and sign-off from the Palos Verdes Homes Association Art Jury. Shi also alleged that city planning commissioner Janine Nendick personally lobbied his neighbors to oppose the project.

According to Shi, the city did not approve the permit until 2023. Shi alleged that the delay caused him "loss of use of his property, increased construction costs, interest expense and costs of design professionals, and diminished property value," and he estimated his total damages at more than one million dollars. He sued in October 2024 under Government Code section 815.6, which makes a public entity liable when it fails to discharge a mandatory duty imposed by an enactment "designed to protect against the risk of a particular kind of injury."

The city demurred, arguing that Shi failed to sufficiently allege a cause of action. The trial court sustained the demurrer in a written ruling. The judgment on appeal lists Superior Court Judges Amy N. Carter and Alan B. Honeycut. The trial court wrote that the ADU statute "aims to create more houses for California residents, not protect the investments of individuals who choose to build ADUs," and it cited Riddick v. City of Malibu, a 2024 decision, for the point that plaintiffs have obtained writs of mandate against cities that fail to properly permit ADUs. Shi declined to amend, and the court entered judgment for the city.

On appeal, the city made a single argument. It contended that the Legislature meant section 66317 to prevent an abstract harm to the general public, not to protect private homeowners who want to build ADUs. The parties did not dispute that the statute imposed a mandatory duty or that the city's delay caused Shi's losses, so the panel assumed both points without deciding them and addressed only whether the duty was designed to protect against Shi's injury.

Under the California Supreme Court's 2000 decision in Haggis v. City of Los Angeles, a statute that merely confers an "incidental" benefit on a plaintiff cannot support a section 815.6 claim. Justice Daum wrote that the panel did "not find statutory interpretation difficult here." Letting applicants obtain ministerial approval "without discretionary requirements and burdensome local regulations is not 'incidental' to section 66317," the opinion said. "It is the point of section 66317."

The panel held that the statute's text alone compelled that reading and found confirmation in neighboring provisions. In section 66310, the Legislature found that "[h]omeowners who create accessory dwelling units benefit from added income, and an increased sense of security." The court also described legislative history of Senate Bill 1069, from the 2015-2016 legislative session, which enacted the predecessor to section 66317, but said it did not rely on that history because the statute was unambiguous.

The panel rejected the city's argument that the ADU statutes create no private right of action and say nothing about damages for delay. "This argument misses the point," Justice Daum wrote, because Shi relied on section 815.6 itself to supply the cause of action. Quoting Haggis, the court wrote, "It is section 815.6, not the predicate enactment, that creates the private right of action."

The court agreed with the city that the Legislature enacted section 66317 to help ease California's housing crisis. "To that extent, the City is correct," the opinion said. But the panel wrote that the Legislature pursued that goal by encouraging homeowners to build ADUs "without undue interference from local governments," and that "section 66317 does not place a duty upon local agencies to alleviate the housing crisis." Permit seekers, the court held, are "the direct and intended beneficiaries of the relevant duty."

The panel also distinguished Haggis, in which a later purchaser of a property sued Los Angeles for failing to record instability notices issued to the property's former owners. The Supreme Court found that the recording duty was meant to encourage existing landowners to perform stabilization work, not to protect later purchasers. "The facts of Haggis have little to do with this case," Justice Daum wrote.

Shi was represented by Tim Cotter and Jeffrey Lewis of Jeff Lewis Law. Kara L. Coronado, Steven Moctezuma and Christopher M. Moffitt of Best Best & Krieger represented the city.

The appeals court reversed the judgment and awarded Shi his costs on appeal. Because the panel only assumed that the city breached a mandatory duty and caused Shi's losses, those questions remain open, and section 815.6 also lets the city avoid liability by showing that it "exercised reasonable diligence to discharge the duty."