Bonander v. Town of Tiburon

• Decision Date: 31 January 2007
• Docket Number: No. A112539.,A112539.
• Citation: 147 Cal.App.4th 1116,55 Cal.Rptr.3d 184
• Court: California Court of Appeals Court of Appeals
• Parties: Jimmie D. BONANDER et al., Plaintiffs and Appellants, v. TOWN OF TIBURON et al., Defendants and Respondents.

55 Cal.Rptr.3d 184

147 Cal.App.4th 1116

Jimmie D. BONANDER et al., Plaintiffs and Appellants, v. TOWN OF TIBURON et al., Defendants and Respondents.

No. A112539.

Court of Appeal, First District, Division 3.

January 31, 2007.

Frank I. Mulberg, Mill Valley, and Brett D. Mulberg for Plaintiffs and Appellants.

McDonough Holland & Allen PC, Thomas R. Curry, Kevin D. Siegel, Oakland, Ann R. Danforth, Town Attorney, for Defendants and Respondents.

McGUINESS, P.J.

This appeal presents the question whether a lawsuit challenging a special assessment levied under the Municipal Improvement Act of 1913 (Sts. & Hy.Code,¹ § 10000 et seq.) for failure to comply with Proposition 218 is subject to special procedural rules applicable to "validation actions." Appellants are property owners who sought to invalidate a special assessment imposed by respondent Town of Tiburon (Town) to cover the costs of moving overhead utility lines underground. Appellants claimed the special assessment violates Proposition 218 because, among other things, the amount of the assessment exceeds any "special benefits" conferred on their properties. The trial court dismissed the action because appellants failed to publish notice of the action and file proof of publication within 60 days after the filing of the complaint, a procedural requirement that must be satisfied to confer jurisdiction in a validation action filed by an interested person. (See Code Civ. Proc, § 863.)

We conclude that appellants' lawsuit constitutes a validation action subject to the procedural requirements governing such actions contained in section 860 et seq. of the Code of Civil Procedure. We also conclude the trial court did not abuse its discretion in finding no good cause for appellants' failure to publish notice of their action within the required time period. Accordingly, we affirm the judgment.

STATUTORY AND CONSTITUTIONAL FRAMEWORK

Before describing the factual and procedural history of the dispute giving rise to this appeal, we provide an overview of the relevant legal framework pertaining to the Municipal Improvement Act of 1913, Proposition 218, and validation actions.

1. The Municipal Improvement Act of 1913

"The use of the special or beneficial assessment district as a device for financing the cost of public improvements has a long pedigree in the history of public finance in the United States. [Citation.] As one law review article on the use of benefit assessment districts has noted, in the 19th century, `local jurisdictions levied benefit assessments on property owners to finance street improvements abutting the owners' properties. Although the community at large benefited from street improvements in the city, those property owners along the new or improved streets received special benefits that enhanced their property values and thus justified payment of benefit assessments. . . . As the need for public improvements at the local level increased, local governments expanded the application of benefit assessments to other types of improvements.' [Citation.]" (Not About Water Com. v. Board of Supervisors (2002) 95 Cal. App.4th 982, 991, 116 Cal.Rptr.2d 526 (Not About Water).)

A special assessment differs in important respects from a tax. Unlike a tax, which is levied without regard to whether the property or person subject to the tax receives a special benefit not enjoyed by others (Knox v. City of Orland (1992) 4 Cal.4th 132, 142, 14 Cal.Rptr.2d 159, 841 P.2d 144), "the essential feature of the special assessment is that the public improvement financed through it confers a special benefit on the property assessed beyond that conferred generally. [Citations.]" (Southern Cal. Rapid Transit Dist. v. Bolen (1992) 1 Cal.4th 654, 661, 3 Cal.Rptr.2d 843, 822 P.2d 875.) "[A] special assessment is `levied against real property particularly and directly benefited by a local improvement in order to pay the cost of that improvement.' [Citation.]" (Knox v. City of Orland, supra, 4 Cal.4th at p. 142, 14 Cal.Rptr.2d 159, 841 P.2d 144.)

The Municipal Improvement Act of 1913 (hereafter 1913 Act), codified at section 10000 et seq., is one of many statutory schemes authorizing public agencies to impose special assessments to recoup the costs of public improvements that benefit particular properties. (See, e.g., § 5000 et seq. [Improvement Act of 1911], § 18000 et seq. [Street Lighting Act of 1919], § 22500 et seq. [Landscaping and Lighting Act of 1972].) The 1913 Act authorizes a municipality to install a variety of improvements in or along its streets, including water lines, utility lines and poles, and "[a]ny other works, utility, or appliances necessary or convenient for providing any other service." (§ 10100, subd. (e).) The 1913 Act specifically incorporates provisions of the Improvement Act of 1911 (§ 5000 et seq.) relating to the conversion of overhead utility lines to underground locations. (§ 10102.1.)

The 1913 Act establishes a multi-step process for municipalities to create assessment districts. (See generally Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 683, 129 Cal.Rptr. 97, 547 P.2d 1377 [describing pre-Proposition 218 process for establishing assessment district under 1913 Act].) The first step is the adoption by the local government's legislative body of a "resolution of intention" describing the proposed improvements, specifying the exterior boundaries of the proposed district, and providing for the issuance of improvements bonds to the extent the project is to be financed by bonds. (§ 10200.) Following the preparation of a detailed report (§§ 10203, 10204), the legislative body must follow certain notice, hearing, and protest requirements. (§ 10301.) Upon confirmation of a proposed assessment, the legislative body orders the improvements to be made and orders an assessment to be levied upon the affected parcels. (§ 10312, subd. (a).) Bonds may be issued to finance the cost of the improvements. (§ 10600.)

Any challenge to the validity of an assessment levied under the 1913 Act must be filed within 30 days after the assessment is levied. (§ 10400.) The period for challenging the assessment is brief in order to prevent the possibility of attacks on the validity of assessments years after they are levied, to insure the marketability of assessment bonds at the time they are sold. (See Allis-Chalmers v. City of Oxnard (1980) 105 Cal.App.3d 876, 883, 165 Cal.Rptr. 128.)

2. Proposition 218

The voters approved Proposition 218, the Right to Vote on Taxes Act, in November 1996. (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 835, 102 Cal.Rptr.2d 719, 14 P.3d 930.) Proposition 218 can best be understood as the progeny of Proposition 13, the landmark initiative measure adopted in 1978 with the purpose of cutting local property taxes. (Howard Jarvis Taxpayers Assn. v. City of Riverside (1999) 73 Cal.App.4th 679, 681, 86 Cal.Rptr.2d 592.) One of the principal provisions of Proposition 13 "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. [Citation.] [¶] 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. [Citations.]" (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal.App.4th at pp. 681-682, 86 Cal.Rptr.2d 592.)

Local governments found a way to get around Proposition 13's limitations, owing in part to a determination that a "special assessment" was not a "special tax" within the meaning of Proposition 13. (See Knox v. City of Orland, supra, 4 Cal.4th at p. 141, 14 Cal.Rptr.2d 159, 841 P.2d 144.) As a consequence, a special assessment could be imposed without the two-thirds vote required by Proposition 13. (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal.App.4th at p. 682, 86 Cal. Rptr.2d 592.) The ballot arguments in favor of Proposition 218 declared that politicians had exploited this loophole by calling taxes "assessments" and "fees" that could be enacted without the consent of the voters. (Apartment Assn. of Los Angeles v. City of Los Angeles, supra, 24 Cal.4th at p. 839, 102 Cal.Rptr.2d 719, 14 P.3d 930.) Proponents of Proposition 218 claimed that "[s]pecial districts [had] increased assessments by over 2400% over 15 years." (Ibid.)

To address these concerns, the electorate approved Proposition 218, adding articles XIII C and XIII D to the California Constitution. (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal. App.4th at p. 682, 86 Cal.Rptr.2d 592.) "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. [Citations.] It buttresses Proposition 13's limitations on ad valorem property taxes and special taxes by placing analogous restrictions on assessments, fees, and charges." (Ibid.)

Proposition 218 establishes certain procedures and requirements applicable to all assessments. (Cal. Const., art. XIII D, § 4.) An "assessment" under Proposition 218 means "any levy or charge upon real property by an agency for a special benefit conferred upon the real property." (Cal. Const., art. XIII D, § 2, subd. (b).) "Special assessments" and "benefit assessments" are both encompassed within the term "assessment" as used in Proposition 218. (Ibid.) "Special benefit" is defined as "a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute `special benefit."' (Cal. Const., art. XIII D, § 2, subd. (i).)

Proposition 218 imposes certain notice and hearing requirements before a public agency may adopt a special assessment. (...