Barratt American, Inc. v. City of San Diego

• Decision Date: 09 April 2004
• Docket Number: No. D042038.,D042038.
• Parties: BARRATT AMERICAN, INCORPORATED, Plaintiff and Appellant, v. The CITY OF SAN DIEGO et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

12 Cal.Rptr.3d 132

117 Cal.App.4th 809

BARRATT AMERICAN, INCORPORATED, Plaintiff and Appellant, v. The CITY OF SAN DIEGO et al., Defendants and Respondents.

No. D042038.

Court of Appeal, Fourth District, Division 1.

April 9, 2004.

Review Denied July 14, 2004.

Walter P. McNeill, Redding, for Plaintiff and Appellant.

Casey Gwinn, City Attorney, Anita M. Noone, Assistant City Attorney, John P. Mullen, Deputy City Attorney, for Defendants and Respondents.

O'ROURKE, J.

Barratt American, Incorporated (Barratt) appeals from a judgment entered in favor of the City of San Diego and the City Council of the City of San Diego (collectively the City) after the superior court sustained the City's demurrer and also struck portions of Barratt's complaint, and Barratt dismissed the remainder of its action. Barratt's lawsuit in part challenged a City resolution authorizing a facilities benefit assessment for certain property as violative of article XIII D of the California Constitution (added by the initiative commonly known as Proposition 218). The court sustained the City's demurrer without leave to amend and granted its motion to strike on grounds Barratt's challenge to the resolution was barred by the 30 day limitations period of Code of Civil Procedure¹ section 329.5, and that Proposition 218 did not apply to the resolution in any event.

Barratt contends the court abused its discretion in sustaining the City's demurrer and striking portions of its pleadings relating to the resolution because (1) the resolution establishes an assessment that should have been adopted in accordance with Proposition 218's requirements; (2) Proposition 218 and ensuing legislation abrogated the limitations period of section 329.5; and (3) the assessment is not a fee or charge imposed as a condition of property development that is exempt from Proposition 218 (Cal. Const., art. XIII D, § 1). We hold Proposition 218 does not abrogate, repeal or otherwise invalidate section 329.5's 30-day limitations period for challenging the validity of an assessment against real property for public improvements, and affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND²

On June 25, 2002, the City Council of the City of San Diego adopted its Resolution R-296730 (the FBA resolution), which established a facilities benefit assessment (benefit assessment) in an area of the City of San Diego known as Pacific Highlands Ranch.³ The FBA resolution provides for funding of facilities projects including freeway and road construction and improvements, police and fire protection, and sewers and pipelines. Barratt, a residential developer, owns parcels within Pacific Highlands Ranch that are in process of development. Barratt alleges it must pay the City any assessments required by the City in connection with the issuance of a building permit or property development, including the benefit assessments imposed by the FBA resolution.

On August 2, 2002, 58 days after the FBA resolution's approval, Barratt filed the present action to determine its validity.⁴ In its first cause of action, labeled a "validation" action, Barratt alleged the FBA resolution imposed an assessment within the meaning of article XIII D of the California Constitution (hereafter article XIII D), and that the FBA resolution was unconstitutional, invalid and void because it was not adopted in accordance with the procedures, conditions and limitations of that article. In its third cause of action, Barratt alleged the FBA resolution was "contradictory, self-canceling, inconsistent and overlapping" with respect to another resolution (see footnote 4, ante) so as to render it unconstitutionally vague, unenforceable, and void as a matter of law. Barratt's fourth cause of action sought declaratory and injunctive relief.

The City demurred to Barratt's first cause of action on the ground it was time-barred under section 329.5, which provides a 30-day time period by which to file an action contesting the validity of an assessment against real property for public improvements. On the same ground, the City moved to strike portions of the third and fourth causes of action to the extent they challenged the FBA resolution's validity. In response, Barratt argued Proposition 218 invalidated the limitations period of section 329.5 or rendered it inapplicable; that section 329.5 was irreconcilable with Proposition 218, which required assessments such as the benefit assessment to be adopted only through the constitutionally mandated proceedings prescribed by article XIII D, section 4. Barratt argued it had complied with the 60-day period set forth in sections 860 and 863 for validation proceedings, which was the only applicable limitations period. It finally argued its action was timely under the doctrine of continuing violations in that the statute of limitations began anew each time the City continued to impose the benefit assessment.

The court rejected these arguments and sustained the City's demurrer without leave to amend. It ruled the action was barred under section 329.5 because Barratt's complaint was filed more than 30 days after the benefit assessment's levy. It granted the City's motion to strike allegations attacking the FBA resolution in Barratt's third and fourth causes of action. Barratt thereafter voluntarily dismissed without prejudice its second and third causes of action, as well as the portions of its fourth cause of action that did not challenge the validity of the FBA resolution. The court entered judgment in the City's favor.

DISCUSSION

I. Bar of Section 329.5

We begin with Barratt's argument that the limitations period of section 329.5 was abrogated by Proposition 218 and subsequent legislation, specifically the "Proposition 218 Omnibus Implementation Act" of Government Code sections 53750 et seq. If section 329.5 applies to Barratt's challenge, our inquiry ends because Barratt's complaint unquestionably reveals the action was filed more than 30 days from June 25, 2002, the date the City adopted, and therefore levied,⁵ the benefit assessment that is the subject of the FBA resolution.

Barratt's challenge to the validity and constitutionality of section 329.5 presents a question of law that this court decides on independent review of the facts. (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 836, 102 Cal.Rptr.2d 719, 14 P.3d 930 (Apartment Assn. of Los Angeles County); see California Apartment Ass'n v. City of Fremont (2002) 97 Cal.App.4th 693, 699, 118 Cal.Rptr.2d 603; Redevelopment Agency of the City of Long Beach v. County of Los Angeles (1999) 75 Cal.App.4th 68, 73, 89 Cal.Rptr.2d 10 [rules of construction and interpretation applicable when considering statutes equally apply in interpreting constitutional provisions].)

Section 329.5, enacted in 1959 (stats.1959, c. 1007, p. 3028, § 1) provides in part: "The validity of an assessment or supplemental assessment against real property for public improvements, the proceedings for which are prescribed by the legislative body of any chartered city, shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the assessment is levied, or such longer period as the legislative body may provide." Barrett does not argue the benefit assessment is not the sort of assessment that would fall within section 329.5's language, and the City concedes the benefit assessment is a special assessment against real property for public improvements as that term is defined by the California Supreme Court. (Knox v. City of Orland (1992) 4 Cal.4th 132, 136, fn. 1, 142, 14 Cal.Rptr.2d 159, 841 P.2d 144.)

Barratt's argument rests on two propositions: First, that article XIII D, section 5 "general[ly] abrogated" all statutes of limitation, and second, that "[i]t is not legally possible for the FBA challenged in this action to be an assessment `the proceedings for which are prescribed by the legislative body of any chartered city'" because assessments must now be adopted under the provisions of article XIII D. The latter assertion is based on the premise that all assessments, including the benefit assessment, are governed by Proposition 218. We need not decide the validity of that premise, however, for even if we assume the benefit assessment imposed by the FBA resolution must comply with Proposition 218, we nevertheless hold Proposition 218 does not repeal, abrogate or otherwise invalidate the limitations period of section 329.5.

A. Background

We set out the now familiar history of Proposition 218 to provide some context to our discussion: "`Proposition 218 can best be understood against its historical background, which begins in 1978 with the adoption of Proposition 13. "The purpose of Proposition 13 was to cut local property taxes. [Citation.]" [Citation.] Its principal provisions limited ad valorem property taxes to 1 percent of a property's assessed valuation and limited increases in the assessed valuation to 2 percent per year unless and until the property changed hands. (Cal. Const., art. XIII A, §§ 1, 2.)

"`To prevent local governments from subverting its limitations, Proposition 13 also prohibited counties, cities, and special districts from enacting any special tax without a two-thirds vote of the electorate. (Cal. Const., art. XIII A, § 4; Rider v. County of San Diego (1991) 1 Cal.4th 1, 6-7 [2 Cal.Rptr.2d 490, 820 P.2d 1000].) It has been held, however, that a special assessment is not a special tax within the meaning of Proposition 13. [Citation.] Accordingly, a special assessment could be imposed without a two-thirds vote.

"`In November 1996, in part to change this rule, the electorate adopted Proposition 218, which added articles XIII C and XIII D to the California Constitution. Proposition 218 allows only four types of local property taxes: (1) an ad valorem property tax; (2) a special tax; (3) an assessment; and (4) a fee or charge. (Cal. Const.,...