Court Backs Laguna Beach on Rejection of House Plans : Architecture: The city’s controversial Design Review Board wins first round in one of three pending legal challenges.

SANTA ANA —  In a victory for the controversial Laguna Beach Design Review Board, a Superior Court judge ruled Friday that the city had reasonable grounds for rejecting design plans for an oceanfront home that would partially block the views of neighbors.

While the ruling could be just the first step in an extended legal battle over development at the site, Judge W. F. Rylaarsdam’s ruling put the city a leg up in one of three legal challenges currently pending over review board approvals.

Mayor Robert F. Gentry hailed the judge’s decision.

“I’m very pleased the court found the city did operate within its power and with fairness,” Gentry said. “It reaffirms for me the thorough and professional nature of our design review process, and I am pleased that the people of Laguna Beach have won.”

At issue is a 5,400-square-foot parcel on Ocean Way, which is essentially a ravine between an ocean lookout point and a house. Property owner M. William Dultz, who owns a Newport Beach travel agency, has tried for the past year to gain city approval to build a single-family house on the land.

After five board hearings and an unsuccessful appeal to the City Council, Dultz took his case to court.

Friday’s hearing had special significance for the city and for some local architects, who have assailed Design Review Board members for being too arbitrary in their decision making. Had the judge ruled in favor of Dultz, it would have amounted to approving a design by court order, something that has never happened before in Laguna Beach, City Attorney Philip Kohn said.

Dultz’s attorney had asserted that the city’s denial of the project was an “abuse of discretion” and that the city was unreasonable in rejecting the project based on the partial loss of neighbors’ views.

“Any construction on this house would have a slight impact on views, but their ocean views are still maintained,” Veronica Gray said before the hearing. “They still have panoramic views of the ocean with the construction.”

The real issue, she said, is that the city and the neighbors do not want anything built on the property.

“Nobody really wants this lot developed,” she said.

The judge, however, denied the legal challenge, saying the petitioner failed to show that the city is blocking development at the site. In addition, he said, questions about view blockage “constitute rational concerns.”

City officials had said all along that the plan could have been approved if Dultz would have made further design modifications. Assistant City Atty. Hans Van Ligten said he was not surprised by the judge’s decision.

“In all honesty, it’s more or less the way I thought it would go,” he said immediately after the brief hearing. “But you never know when you walk into court.”

Gray would not comment on the judge’s decision. She said a decision will be made regarding whether to take further legal action after she consults with Dultz, who is out of the country.

A court trial could follow, based upon the allegation that Dultz has been denied the right to build on his property, which amounts to a “taking” of the property without just compensation, Gray said.

Kohn, however, said the legal challenges were answered Friday.

“To me, all the threshold issues have been decided,” Kohn said after the judge’s ruling. “I can’t imagine what issues would be remaining for trial.”

Another option would be for Dultz’s attorney’s to simply appeal Friday’s court decision.

Christian Abel, the architect who guided the project through six city hearings, attended Friday’s session in court. He said architects throughout Laguna Beach have been watching the case closely.

Had the judge ruled in favor of the property owner, it would have given local architects “ . . . if nothing else, just courage to continue working in Laguna because it’s become so difficult to get a project approved,” he said.

The Dultz case is one of three lawsuits pending against the city based on denials by the Design Review Board.

Eugene and Meredith Gratz have filed a lawsuit against Laguna Beach, saying they were deprived of their constitutional rights when their plans to build a hillside home were denied by the city partly because it would cast a shadow on another home.

Nick and Denise Karagozian filed a $1-million lawsuit against the city for denying them permission to move into their new home last year because they had painted it white instead of “sandstone,” a color approved by the city. They were later allowed to move in after repainting the house a compromise shade of white.

Gratz, an attorney, is handling the Karagozian lawsuit. Gratz was on hand for the Dultz hearing Friday.

Kohn said the Karagozian case will likely go to trial in November or December. No hearing date has been set yet in the Gratz case.