Court Rules Against Developer on Appeal : Litigation: Panel refuses to overturn Seal Beach’s denial of Hellman Ranch project, a setback for Mola.

SEAL BEACH —  Mola Development Corp. suffered a major setback this week when an appellate court refused to overturn the Seal Beach City Council’s denial of the 329-home Hellman Ranch development.

In dismissing Mola’s appeal, the 4th District Court of Appeal also rejected the Wetlands Restoration Society’s attempt to have the city’s 1990 housing plan declared invalid.

“It’s an excellent result for the city,” City Atty. Quinn Barrow said of the court ruling. “We’re very happy that we won both parts of the case.”

In its appeal, Wetlands attacked the merits of the city’s new housing plan but the court said its role was merely to consider whether the plan meets statutory guidelines and not evaluate its merits.

The council’s decision to deny the 149-acre development, which included about 41 acres of wetlands, was based on the seismic risks and soil instability of the site, which is traversed by the Newport-Inglewood Fault.

Officials with Mola, which had invested five years and $11 million in its bid to build the project, would not comment on the court’s decision.

However, the company has resubmitted plans to the city, but with a majority of the council against the development, city officials said approval seems unlikely.

The company has another legal battle ahead--an $11-million lawsuit pending against the city of Seal Beach in which Mola claims the city’s basis for denying the project was invalid.

Barrow said he is not certain whether the appeals court ruling will have a bearing on the lawsuit.

“At any rate, it doesn’t change our approach,” Barrow said. “We’re just defending the case and they’re the ones that have to proceed accordingly.”