Citizens for Goleta Valley v. HT Santa Barbara

Opinion

YEGAN, J.

HT Santa Barbara and Great Universal Capital Corporation (GUCC) appeal from the judgment entered after a court trial in favor of Citizens for Goleta Valley (Citizens) and Goleta Valley Land Trust, respondents. The judgment requires appellants to provide a bond or letter of credit securing their payment obligations pursuant to a settlement agreement. We affirm.

Factual And Procedural Background

In June 1991 GUCC and Hyatt Development Corporation entered into an agreement with Citizens settling all claims relating to a hotel project on Haskell’s Beach in unincorporated Goleta, Santa Barbara County. Prior to the settlement, the parties’ claims reached the appellate courts. (See

Citizens of Goleta Valley v. Board of Supervisors

(1990) 52 Cal.3d 553 [276 Cal.Rptr. 410, 801 P.2d 1161];

Citizens of Goleta Valley

v.

Board of Supervisors

(1988) 197 Cal.App.3d 1167 [243 Cal.Rptr. 339].) The settlement agreement provided for the development of the project by GUCC and the establishment of a trust fund by Citizens. The purpose of the trust fund was to acquire, restore, and preserve “open space lands, lands of recreational significance or lands of ecological or environmental significance . . . located in Goleta . . . .”

GUCC agreed to make a series of contributions to the trust fund totaling $5 million plus interest. The contributions included $3,000,000 to be paid in 24 quarterly installments over a six-year period ending in September 2006. Payment of the quarterly installments was to be secured by a bond or letter of credit: “Upon issuance of the final Certificate of Occupancy, GUCC shall deposit in the Settlement Escrow a bond or letter of credit securing GUCC’s obligation to make the quarterly payments . . . .”

HT Santa Barbara is the successor in interest to GUCC. In September 2000 it purchased a $3,000,000 bond from Amwest Surety Insurance Company (Amwest) to secure payment of the quarterly installments. The obligee under the bond was Goleta Valley Land Trust, the trust fund established by Citizens pursuant to the settlement agreement. GUCC paid $180,000 for the bond. On

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