II Iiiiii: Ii Ii Iii II II Ii Ii

You might also like

Download as pdf or txt
Download as pdf or txt
You are on page 1of 7

II

II II II I Ill II

II II II II 1111 II II

SUPERIOR COURT OF CALIFORNIA


COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet


Apr-15-201411:12 am

Case Number: CGC-13-528312


Filing Date: Apr-15-2014 11:11
Filed by: SHAWNA VANTREE
Juke Box: 001

Image: 04447780

ORDER

CALIFORNIA-AMERICAN WATER COMPANY, A CALIFORNIA CO VS. MARINA


COAST WATER DISTRICT et al

001C04447780

Instructions:
Please place this sheet on top of the document to be scanned.

r\;po
t\

\ ",) . .t
.;.,.J; ~

3
4
5

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SAN FRANCISCO

7
8

CALIFORNIA-AMERICAN WATER CO.,


Plaintiff,

10
11

12

Case No. CGC -13-528312

vs.
MARINA COAST WATER DISTRICT, ET
AL.,

13

ORDER GRANTING MOTION OF


MONTEREY COUNTY WATER
RESOURCESAGENCYFORLEAVETO
FILE CROSS COMPLAINT

Defendants.

14

15

AND RELATED CROSS ACTIONS

16

The parties Cal-Am, the Marina Coast Water District (Marina), the Monterey County
17
18
19

Water Resources Agency (Monterey), and RMC Water and Environment entered into contracts
by which the parties would develop, construct and operate regional desalination projects.

20

The parties disagree whether these agreements may be void or voidable as the result of

21

the actions of one Stephen Collins, a member of the Board of Directors of Monterey, who was

22

secretly paid by RMC to advocate for approval of the desalination project and the associated

23

contracts while he was serving as a board member of Monterey. Government Code 1090.

24

Marina asserts that the agreements are valid and enforceable.


25
26
27

Marina filed a motion for summary judgment on its cross-complaint which was heard in
February. My decision focused on 52-39 of Annotated Water Code Appendix which sets forth

CGC 13-528312

-I -

a 60 day time limit for actions challenging the validity of any contract entered into by the
agency. There is no exemption for lawsuits that attempt to "void" a contract subject to the

3
validations statutes based on a violation of Government Code 1090. (Below, I occasionally
4

refer to the these general validation statutes, CCP 860 through 870, as "Chapter 9". 1) I

decided Cal-Am was barred under 52-39 from bringing its declaratory relief action. I held that

under CCP 869 "no entity except for Monterey can seek to void the contracts in this case on

the basis of a I 092 violation."

9
10

Monterey now seeks leave to file a cross-complaint for declaratory relief that the actions
of Stephen Collins renders the RDP Agreements void.

11
12
13

Discussion
Marina opposes this motion seeking leave to file a cross-complaint under CCP 426.50,

14
15

arguing that the 60 day statute oflimitations is set forth in 52-39 and that CCP 860 et. seq.

16

provide no exceptions, even for public agencies. If this is true, then the 4 year statute of

17

limitations of Government Code 1090 cannot apply and the action is time barred, making it

18
futile to allow the cross complaint.
19
Marina makes essentially two arguments.

20

First, Marina notes that the exception relied on by Monterey is in CCP 869, and that the

21

22
23
24
25
26
27

scope of that exception is "within the time and the manner herein specified." The time period
1

I follow the Supreme Court's usage in City of Ontario v. Superior Court, 2 Cal. 3d 335, 340 (1970). The rationale
for Chapter 9 [the General Validation Statutes found at CCP 860 through 870] was explained by the Supreme
Court: "By 1961, the California codes contained a patchwork of provisions goveming validation proceedings, with
each set of provisions dedicated to a different statutory scheme. In that year, the Legislature sought to replace this
patchwork with a general validation procedure. (Stats.l961, ch. 1479, 1-3, pp. 3331-3332.) This procedure,
which the Legislature codified as Code of Civil Procedure sections 860 through 870, does not, in itself, authorize
any validation actions; rather, it establishes a uniform system that other statutory schemes must activate by
reference. At the time the Legislature enacted this general validation procedure, it revised 80 statutory schemes,
deleting existing provisions governing validation proceedings and referring instead to the new uniform system."
Bonander v. Town of Tiburon, 46 Cal. 4th 646, 656 (2009).

CGC 13-528312

- 2-

"herein" specified is that of 860 {60 days} which is not the particular 60 days specified in
52-39; 52-39, in other words, is its own source of limitation, unaffected by the exceptional

3
language of 869, and it bars this cross-complaint. The second argument focusses on the last

4
5

clause of 869 which says that the public agency is not precluded from the chapter's remedies to

"to determine the validity of anything or matter" (emphasis supplied) which Marina reads as not

encompassing actions designed to void anything or matter. That is, Marina reads 869 as

contemplating exceptions to the short statute oflimitations but only for actions that validate

contracts, not actions that seek to invalidate them. The same argument is made regarding 863.

10

I turn to the first argument. It is clear that 52-39 triggers the chapter "Validating

11

Proceedings," 860 et seq. It does so with this language: "The action or proceeding shall be
12
13

brought pursuant to Chapter 9 (commencing with Section 860) of Title I 0 of Part 2 of the Code

14

of Civil Procedure." Contrary to Marina's suggestion at argument, the invocation is a general

15

one; it does not select pieces of Chapter 9; it invokes the entirety of it. It thus triggers the 60 day

16

period of 860 (and 863 ), and 869 provides an exemption to this 60 day period. The 60 day

17

period of 52-39 is not a different period; it is the same 60 day period. Marina objects that if this

18

is true, then the recitation in 52-3 9 is surplusage. Perhaps it is; perhaps the recitation of this
19
20
21

critical time limit was so important that it was again highlighted in 52-39.
The alternative, following Marina's argument, is that the triggering language of 52-39

22

("The action or proceeding shall be brought pursuant to Chapter 9") only acts to incorporate

23

from Chapter 9 certain portions or certain pieces of that schema which have to do with procedure

24

as opposed to, I suppose, more substantive provisions such as those pertaining to statutes of

25

limitation. This reading places reads the phrase "pursuant to" in 52-39 to act as a selective

26

27

CGC 13-528312

-3-

incorporator of provisions, but the same language in a variety of other statutes invoke the
panoply of provisions in Chapter 9. 2

There is another untoward consequence of Marina's argument. It is that the Legislature in


4

5
6
7

enacting 52-3 9 decided that within Monterey county -but not elsewhere-there would be a 60
day limit for all actions, without the relief valve provided by Chapter 9. Why that should be so
remains unexplained.

9
10

To be sure, the Legislature does not intend to invoke Chapter 9 in some contexts, and so
its provisions do not apply, 3 but that does not suggest that the Legislature from time to time
determines to invoke only pieces of Chapter 9.

11
I turn to Marina's second argument. Marina argues that even if 869 "provides an
12
13

exception" to the 60-day statute, it only applies to actions to confirm the validity of the

14

agreement and does not apply to actions to challenge the agreement. Marina cites Millbrae

15

School Dist. v. Superior Court, 209 Cal.App.3d 1494 (1989) and City of Ontario v. Superior

16

Court, 2 Cal. 3d 335 (1970), and describes them as cases in which courts "discuss the idea that

17

CCP Section 869 may provide an exception which would allow a public agency to litigate the

18
validity of its own action outside the 60-day SOLs stated in CCP Sections 860 and 863." Opp.
19
Briefp. 7:8-10.
20
Neither of these cases discusses statute of limitations. Nor do they discuss a situation in

21

22

which the public agency attempts to use 869 as a "sword to void otherwise 'validated'

23

contracts." Opposition Brief, p. 823-25. In Millbrae, a public agency that challenged the actions

24

of another public agency attempted to avoid compliance with the publication requirements of

25

861 by arguing that 869 exempted it (as a public agency) from the requirement. The court

26
27

Some of these are noted at Kaatz v. City ofSeaside, 143 Cal. App. 4th 13, 31-32 (2006).
Bonander v. Town of Tiburon, 46 Cal. 4th 646, 658 (2009).

CGC 13-528312

- 4-

I
2

ruled that the 869 exception applies to the public agency whose actions are being validated or
contested, and does not apply to a third party public agency that is essentially acting as any other

3
individual in contesting the action. Similarly, in Ontario, the trial court excused plaintiffs'

failure to comply with the publication requirement of 861-863. In both cases, the lawsuits
challenging the public action were timely filed.
Marina also argues that the legislative history of Chapter 9 reveals it was never intended

7
8

to allow an agency to contest the validity of its contracts, but only to affirm them. Agencies

generally do seek to confirm or validate their actions, and "confirm" was indeed used in

10

11

materials produced by the Judicial Council as the bill was moving through the Senate Judiciary
Committee. But resort to this part of the legislative history is not necessary, 4 given the plain

12
13

meaning of the statute which does not limit agencies' actions to the confirmation of their

14

actions. 5 The statute provides that the "availability to any public agency ... of the remedy

15

provided by this chapter, shall not be construed to preclude the use by such public agency ... of

16

mandamus or any other remedy to determine the validity of any thing or matter." That

17

"determination" may go either way- validation or invalidation. If not, then what point has the

18
legal process? Marina must surely agree that the result of the validation proceeding might be
19

20
21

that the agency action be found to be invalid (else the proceeding would be a pointless fraud);
what reason then to allow everyone except the agency to ask for that result? No, the better

22

reading is that actions to "determine" the validly of action include what is also known as reverse

23

validation actions:

24
4

25
26
27

Indeed, "the validating statute appears to have grown far beyond the scope originally conceived by the Council."
City of Ontario v. Superior Court, 2 Cal. 3d 335, 341 (1970).
5
Quarterman v. Kefauver, 55 Cal. App. 4th 1366, 1371 (1997)(" Of course our first step in determining that intent is
to scrutinize the actual words of the statute, giving them a plain and commonsense meaning .... When the words are
clear and unambiguous, there is no need for statutory construction or resort to other indicia of legislative intent, such
as legislative history") (citations omitted).

CGC 13-528312

- 5-

More important, the general validation procedure is broad enough to include actions to
invalidate public agency matters (sometimes called reverse validation actions). Code of
Civil Procedure section 863 permits "any interested person [to] bring an action ... to
determine the validity of [the] matter" (italics added), and the phrase "any interested
person" might of course include a party contesting the matter in question. 6

2
3
4

Finally, as the Supreme Court noted, agencies need actually do nothing at all to validate
5
6
7

their actions which are subject Chapter 9. 7 If Marina were right to insist that 869 applies only
when the agency seeks to validate its actions, 869's exceptions would be entirely unnecessary.

Conclusion

10

The motion for leave to amend is granted. Monterey's cross complaint must be filed

11

within six court days of today' s date.


12
13

Date: April15, 2014


Curtis E.A. Karnow
Judge Of The Superior Court

14
15
16
17

18
19
20
21

22
23
24
25
26
27

6
7

Bonander v. Town of Tiburon, 46 Cal. 4th 646, 656 (2009).


City of Ontario v. Superior Court. 2 Cal. 3d 335, 341 (1970).

CGC 13-528312

- 6-

You might also like