Barkley v. City of Blue Lake

• Decision Date: 10 July 1996
• Docket Number: No. A071174,A071174
• Citation: 47 Cal.App.4th 309,54 Cal.Rptr.2d 679
• Court: California Court of Appeals Court of Appeals
• Parties: , 96 Cal. Daily Op. Serv. 5193, 96 Daily Journal D.A.R. 8356 Patrick J. BARKLEY, Plaintiff and Respondent, v. CITY OF BLUE LAKE, Defendant and Appellant.

Page 679

54 Cal.Rptr.2d 679

47 Cal.App.4th 309, 96 Cal. Daily Op. Serv. 5193,

96 Daily Journal D.A.R. 8356

Patrick J. BARKLEY, Plaintiff and Respondent, v. CITY OF BLUE LAKE, Defendant and Appellant.

No. A071174.

Court of Appeal, First District, Division 3, California.

July 10, 1996.

P. Timothy Murphy, Eureka, Richard E. Rader, Sacramento, for plaintiff and respondent.

Richard S. Platz, Blue Lake, C. Dan Lange, San Francisco, for defendant and appellant.

PARRILLI, Associate Justice.

In this case, we hold that an action on a judgment against a public entity is not subject to the claim filing requirements of Government Code sections 905 and 945.4. ¹

The City of Blue Lake (the City) appeals from a summary judgment granted to respondent Patrick J. Barkley. Barkley brought an action on a judgment against the City, which awarded him damages for breach of a contract to construct a sewer system. The City contends the trial court erroneously rejected three of its defenses: (1) Barkley's recovery was subject to the constitutional debt limitation provided in article XVI, section 18 of the California Constitution; (2) laches; and (3) failure to comply with the claim filing requirements of sections 905 and 945.4. Barkley contends the City's appeal is frivolous and asks us to impose sanctions. We affirm the judgment and decline to impose sanctions.

FACTS

Much of the history of this protracted litigation is set out in our opinion on a previous appeal. (Barkley v. City of Blue Lake (1993) 18 Cal.App.4th 1745, 23 Cal.Rptr.2d 315.) We briefly recapitulate that history to set the stage for the present controversy. In December 1969, Barkley obtained a judgment for $90,354.88, with interest running from January 3, 1958. The City appealed. ² We dismissed the appeal on April 5, 1982, and the judgment became final when remittitur issued on June 7, 1982. In 1984, Barkley sought a writ of mandate to enforce the judgment, as authorized by section 970.2. In May 1992, Barkley moved to advance or specially set the case for an evidentiary hearing, in an attempt to bring the matter to trial before expiration of the 10-year period prescribed in section 970.1, for enforcement of judgments against local public entities. The trial court denied the motion because of Barkley's inexcusable delay.

Barkley also filed a new action on the 1969 judgment in May 1992. The trial court dismissed the action after sustaining the City's demurrer without leave to amend. The trial court then granted the City's motion to dismiss Barkley's mandamus proceeding. Barkley appealed from both judgments of dismissal. We held the trial court properly dismissed the mandamus proceeding, both because the 10-year period for enforcement of the judgment had expired and because Barkley failed to bring the matter to trial within 5 years after filing his petition (Code Civ. Proc., §§ 583.310, 583.360). However, we reversed the dismissal of his action on the judgment, concluding the Legislature intended to preserve a judgment creditor's right to file an action on the judgment within the 10-year limitation period prescribed by Code of Civil Procedure section 337.5, subdivision 3. (Barkley v. City of Blue Lake, supra, 18 Cal.App.4th at pp. 1751-1752, 23 Cal.Rptr.2d 315.) Remittitur was filed on February 22, 1994.

The City demurred to Barkley's complaint on July 15, 1994. The demurrer was overruled, and the City filed an answer on September 8, 1994. Barkley moved for summary judgment on February 28, 1995, based on four "incontrovertible facts": (1) entry of the 1969 judgment for $90,354.88, plus interest; (2) finality of the judgment on June 7, 1982; (3) the City's nonpayment of the judgment; and (4) the timely filing of the present action on the judgment. The City filed its opposition on March 24, acknowledging the above facts were undisputed (with the caveat that interest on the judgment ran only until the judgment was paid), and listing a number of disputed material facts pertaining to its

defenses. On April 25, the trial court issued its ruling granting summary judgment. Judgment was entered July 10, 1995, and this appeal followed.

DISCUSSION

Summary judgment is proper when there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) Once Barkley established the elements of his cause of action, the burden shifted to the City to show a triable issue of material fact regarding any element of Barkley's cause of action, or any defense raised by the City. (Code Civ. Proc., § 437c, subd. (o)(1).) The City argues it has raised triable issues of material fact regarding its defenses. Our review of the summary judgment is de novo. (Hunter v. Pacific Mechanical Corp. (1995) 37 Cal.App.4th 1282, 1285, 44 Cal.Rptr.2d 335.) We are not limited by the trial court's reasons; even if summary judgment was granted on an incorrect basis, we must affirm if it would have been proper on another ground. (Mero v. Sadoff (1995) 31 Cal.App.4th 1466, 1478, 37 Cal.Rptr.2d 769; Aaitui v. Grande Properties (1994) 29 Cal.App.4th 1369, 1373, 35 Cal.Rptr.2d 123.)

1. The Constitutional Debt Limitation Was Not an Issue in This Action

Article XVI, section 18 of the California Constitution provides in relevant part: "No ... city ... shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the qualified electors thereof, voting at an election to be held for that purpose...." This provision, formerly found in article XI, section 18, has been part of the California Constitution since 1879. It was intended to prevent municipalities from incurring debts and liabilities exceeding their revenue, a practice that had created heavy burdens on future municipal revenues. It has been construed to require each year's debts and liabilities to be paid from that year's revenue, and to bar payment from the revenue of any future year. Those contracting with a municipality are presumed to know the extent of its authority, and must bear the risk of a shortfall in the current year's revenues. (San Francisco Gas Co. v. Brickwedel (1882) 62 Cal. 641, 642-643; Arthur v. City of Petaluma (1917) 175 Cal. 216, 219-220, 165 P. 698; Compton Community College etc. Teachers v. Compton Community College Dist. (1985) 165 Cal.App.3d 82, 88-89, 211 Cal.Rptr. 231.)

There are a number of exceptions to the constitutional debt limitation. (See generally Beebe et al., Joint Powers Authority Revenue Bonds (1968) 41 So.Cal.L.Rev. 19.) Barkley raised two of these in his motion for summary judgment. He contended the judgment was an obligation imposed by law to which the constitutional debt limitation did not apply. (See Compton Community College etc. Teachers v. Compton Community College Dist., supra, 165 Cal.App.3d at pp. 91-92, 211 Cal.Rptr. 231; cf. City of Sacramento v. State of California (1990) 50 Cal.3d 51, 74, fn. 23, 266 Cal.Rptr. 139, 785 P.2d 522.) He also argued the debt limitation did not apply because the sewer system Barkley contracted to build was financed with revenue bonds collected in a special fund. (See City of Santa Clara v. Von Raesfeld (1970) 3 Cal.3d 239, 247, 90 Cal.Rptr. 8, 474 P.2d 976; City of Oxnard v. Dale (1955) 45 Cal.2d 729, 733, 290 P.2d 859.)

The trial court ruled the constitutional debt limitation did not bar payment of Barkley's judgment debt because the limitation applies only to voluntarily incurred debts, not those imposed by law. The City contends this was error, noting that in Arthur v. City of Petaluma, supra, 175 Cal. 216, 165 P. 698, the plaintiff obtained a judgment against the defendant city for breach of contract, and the court held the constitutional debt limitation barred recovery on the judgment. (Id. at p. 223, 165 P. 698.) In response, Barkley contends the constitutional debt limitation applies only to his right to compel payment from the City, and does not affect his right to entry of a judgment establishing his claim. He quotes Arthur v. City of Petaluma, supra: "Having a valid claim, one valid when the indebtedness was incurred, the subsequent exhaustion of funds from which the same could be paid before the claimant was able to obtain formal allowance and payment does not make his claim bad, but only affects Both parties are correct. Under Arthur v. City of Petaluma, supra, entry of judgment on a breach of contract claim does not preclude application of the constitutional debt limitation, and Barkley is entitled to a judgment establishing his claim regardless of the obstacles to recovering payment imposed by article XVI, section 18. The fact that Barkley had previously established his claim by obtaining the 1969 judgment makes no difference. His right to reestablish his claim in an action on that judgment was settled in his earlier appeal, Barkley v. City of Blue Lake, supra, 18 Cal.App.4th 1745, 1751, 23 Cal.Rptr.2d 315, and the constitutional debt limitation affects only his right to obtain payment, ( Arthur v. City of Petaluma, supra, 175 Cal. at p. 221, 165 P. 698; see also Beebe et al., Joint Powers Authority Revenue Bonds, supra, 41 So.Cal.L.Rev. at pp. 22-23). The summary judgment was proper on that basis, and does not preclude either party from arguing other aspects of the constitutional debt limitation, or its recognized exceptions, in proceedings to enforce the judgment.

his remedy to obtain payment, and he is entitled to have his claim established by a judgment for the amount due." (Id. at p. 221, 165 P. 698, original italics.)

2. Laches Is Not an Available Defense in This Action

It is well settled that the equitable defense of laches does not apply in an action based on a judgment, which is an action at law. (Pratali v. Gates (1992) 4 Cal.App.4th 632, 645, 5 Cal.Rptr.2d 733; United States Capital Corp. v. Nickelberry (1981) 120 Cal.App.3d 864, 867, 174 Cal.Rptr....