Atwell Island Water Dist. v. Atwell Island Water Dist.

• Decision Date: 24 February 2020
• Docket Number: F076043
• Citation: 258 Cal.Rptr.3d 917,45 Cal.App.5th 624
• Court: California Court of Appeals Court of Appeals
• Parties: ATWELL ISLAND WATER DISTRICT, Defendant and Appellant, v. ATWELL ISLAND WATER DISTRICT, Defendant and Respondent.

45 Cal.App.5th 624

258 Cal.Rptr.3d 917

ATWELL ISLAND WATER DISTRICT, Defendant and Appellant,

v.ATWELL ISLAND WATER DISTRICT, Defendant and Respondent.

F076043

Court of Appeal, Fifth District, California.

Filed February 24, 2020

As Modified February 27, 2020

Certified for Partial Publication.^*

Herr, Pedersen & Berglund, Leonard C. Herr, Rachele Berglund and Rhea Ikemiya, Visalia, CA, for Defendant and Appellant.

McCormick, Barstow, Sheppard, Wayte & Carruth and Scott M. Reddie, Fresno, CA, for Defendant and Respondent.

SNAUFFER, J.

Atwell Island Water District (AIWD) is a California water district located in Tulare County, California, and is governed by a five-member board of directors. There is currently a dispute concerning which persons are the true members of its board.

There are two competing factions, each of which claims to constitute a board majority; neither faction recognizes the other as legitimate. One faction is controlled by John Mitchell, Milton Pace, and Nathan Cameron, who claim the board is currently comprised of the three of them plus Donald Jackson.

The second faction is controlled by Donald Jackson and Deanna Jackson, who claim the current board is comprised only of the two of them plus John Mitchell. AIWD is both the appellant and respondent in this appeal; appellant is governed by the controllers of the first faction, while respondent is governed by the controllers of the second faction.

The dispute stems from a disagreement concerning the validity of a purported January 17, 2017 election to replace two board members whose terms were ending. Appellant contends a valid election took place, resulting in Pace and Cameron being newly elected to the board; respondent maintains no valid election occurred.

After the election took place, and Pace and Cameron were allegedly seated on the board, appellant filed on behalf of AIWD, through newly-retained legal counsel Leonard Herr, an answer to a petition for a writ of mandate filed by John Mitchell (the Mitchell Petition) as well as a cross-complaint against Donald Jackson, Deanna Jackson, and Matthew Hurley, in their individual capacities.

Respondent filed a motion to strike appellant's answer and cross-complaint on the ground that Herr was not authorized to prepare and file those pleadings on AIWD's behalf. Specifically, respondent claimed the meeting at which appellant retained Herr's firm was held in violation of the Brown Act ( Gov. Code, § 54950, et seq. ) as a majority of the board of directors was not present. The motion to strike was supported by a request for judicial notice as well as by declarations with accompanying exhibits. The court entered an order granting respondent's motion without leave to amend, ruling the meeting at which Herr's firm was retained was held in violation of the Brown Act as a quorum of the board of directors was not present. Appellant appeals from that order, contending the trial court abused its discretion by relying on improper extraneous documents in ruling on the motion. Appellant also contends the trial court abused its discretion by not allowing appellant leave to amend its pleadings.

We conclude the trial court relied on improper extraneous documents when ruling on the motion to strike and thereby abused its discretion, but we nevertheless affirm the granting of the motion without leave to amend. The election that appellant alleges took place on January 17, 2017 was void as it was held the day after a state holiday, namely Martin Luther King, Jr. Day, and Pace and Cameron were therefore not duly elected to the AIWD board. Herr's firm was therefore not retained by a board majority as John Mitchell could not constitute a majority by himself, and Herr consequently was not authorized to prepare, sign, or file pleadings on AIWD's behalf. The pleadings were rightfully stricken, and leave to amend should not have been allowed because the pleadings were incurably defective.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Because this case comes to us after the granting of a motion to strike, we accept as true the well-pleaded allegations in appellant's first amended cross-complaint¹ as well as the well-pleaded allegations admitted in appellant's answer. We "read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth." ( Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255, 79 Cal.Rptr.2d 747.) "An admission in a pleading is conclusive on the pleader." ( Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1272, 127 Cal.Rptr.2d 436.) We also consider matters which are judicially noticeable. ( Code Civ. Proc., § 437.) We draw the following facts from the allegations of appellant's first-amended cross-complaint as well as from the Mitchell Petition's allegations, the truth of which were admitted in appellant's answer.

AIWD is a California water district to be governed by a five-member board of directors. In September 2016, the five directors were John Mitchell, Deanna Jackson, Donald Jackson, James Atwell, and Monte Mitchell. On September 1, 2016, the board adopted a resolution to conduct a "special election" to fill the seats of two directors, Deanna Jackson and Monte Mitchell, whose terms were ending. The election was to be conducted by an all-mail ballot on January 17, 2017.²

Appellant alleged only two individuals, Milton Pace and Nathan Cameron, submitted to AIWD their declarations of candidacy and oaths of office, per the requirements of Elections Code sections 10511 and 15012. Two other individuals, Deanna Jackson and Matthew Hurley, also attempted to declare their candidacy, but failed to timely submit the required documents per the Elections Code.

A disagreement arose amongst the board concerning whether Deanna Jackson and Matthew Hurley were qualified candidates for the election, and the board retained special elections counsel to render an opinion regarding which individuals were qualified to be on the ballot. The elections counsel opined Pace and Cameron were the only qualified candidates.

In light of this opinion of counsel, John Mitchell noticed a special board meeting to take place on December 12, 2016. The agenda for the meeting included an action item "to approve the candidate list for the January 17, 2017 special election." The candidate list included only Milton Pace and Nathan Cameron. Deanna Jackson and Donald Jackson chose not to attend the meeting. The first amended cross-complaint and answer do not allege what actions were taken at this meeting; the pleadings only allege an agenda was prepared and the meeting was held.

On December 19, 2016, Donald Jackson and Deanna Jackson met as directors and agreed to cancel the January 17, 2017 election in an effort to circumvent provisions of the Elections Code and allow Deanna Jackson and Matthew Hurley more time to file the requisite documents to become candidates. The agenda for this meeting called for action on matters including the following: (1) hiring new general counsel for AIWD, (2) cancelling and re-noticing the January election, (3) amending the AIWD bylaws to change the location of board meetings, and (4) nominating and electing board officers. Appellant alleged this meeting was not properly noticed and not open to the public, and thus was conducted in violation of the Brown Act ( Gov. Code, §§ 54953, subd. (a), 54956.) John Mitchell received no notice whatsoever of this meeting.

The Pace-Cameron Petition

On January 5, 2017, Pace and Cameron filed, in Tulare County Superior Court, a verified petition for a writ of mandate to compel the completion of the noticed January 17, 2017 election (the Pace-Cameron Petition). AIWD was named the respondent. John Mitchell, Deanna Jackson, and Donald Jackson were listed as real parties in interest in their capacities as AIWD board members, and Matthew Hurley and Deanna Jackson were listed as real parties in interest in their capacities as AIWD board member applicants. The petition was supported by a declaration of John Mitchell (the Mitchell Declaration).

The Election and Hiring of Counsel

The election for the two board positions was conducted on January 17, 2017, by all-mail ballot, and Pace and Cameron were elected to the board.³ On January 26, 2017, a board meeting was noticed at which Pace and Cameron took the oath of office and were officially seated on the AIWD board. The board voted to accept the "Certification of Election results" and voted to retain the law firm of Herr, Pedersen & Berglund LLP as general counsel for AIWD. The board also voted to reverse and invalidate all actions taken at the purported board meeting held by Deanna Jackson and Donald Jackson on December 19, 2016, including the purported cancellation of the January 17, 2017 election.

Appellant contends the board is currently comprised of John Mitchell, Donald Jackson, Pace, and Cameron. Donald Jackson, Deanna Jackson and Matthew Hurley, on the other hand, have continued to act as if they are the rightful board.

The Mitchell Petition

On February 15, 2017, John Mitchell filed a verified petition for a writ of mandate and injunctive relief seeking to void, rescind, and invalidate all actions taken by respondent at the December 19, 2016 meeting, and seeking to enjoin respondent from enforcing those actions. Mitchell was represented in this petition by Stringham & Stringham, PLC.

Answer to Mitchell Petition and Cross-Complaint

On February 16, 2017, appellant filed in the name of AIWD an answer admitting all of the Mitchell Petition's allegations. The answer was signed by Leonard Herr.

On that same day, appellant filed a cross-complaint, signed by Herr, against Donald Jackson, Deanna Jackson, and Matthew Hurley, in their individual capacities, for declaratory relief, damages, and indemnity. On March 6, 2017, appellant filed a first amended cross-complaint, which added a request for injunctive relief and withdrew the claim for declaratory relief.

Motion to Strike

On March...