Mission Oaks Ranch, Ltd. v. County of Santa Barbara

In Mission Oaks Ranch, Ltd. v. County of Santa Barbara (1998) 65 Cal.App.4th 713, after a project application was denied based on conclusions in a draft EIR prepared by a consultant, the applicant sued the consultant and the county for refund of fees paid to obtain the EIR, which it argued was inaccurate. (Id. at pp. 719-720, 723.) The Mission Oaks court concluded the applicant was not a third party creditor beneficiary of the contract with the consultant because the county did not owe the applicant a legal duty to "provide a proper EIR." (Id. at p. 724.) The court reasoned: "CEQA confers the duty upon the local lead agency to produce an adequate EIR for dissemination to the public, and the discretion to evaluate the project for the public. These statutory obligations may not be the consideration for a contract or promise, nor may the county bargain away its constitutional duty to regulate development. The county, as lead agency on the project, owes its duty to the public to release a proper EIR. The county owes no duty to assuage the desires of the potential developer." (Id. at pp. 723-724.) In support of its holding that the county owed no duty to the developer, Mission Oaks cited to section 313 of the Restatement Second of Contracts (hereafter section 313), which addresses third party beneficiary claims in the context of government contracts. (Mission Oaks, supra, 65 Cal.App.4th at p. 724.)