Carmel Valley Fire Protection Dist. v. State of California

• Decision Date: 19 February 1987
• Court: California Court of Appeals Court of Appeals
• Parties: CARMEL VALLEY FIRE PROTECTION DISTRICT et al., Petitioners and Respondents, v. STATE of California et al., Respondents and Appellants. RINCON DEL DIABLO MUNICIPAL WATER DISTRICT et al., Petitioners and Respondents, v. STATE of California et al., Respondents and Appellants. COUNTY OF LOS ANGELES, Petitioner and Respondent, v. STATE of California et al., Respondents and Appellants. Civ. B006078, Civ. B011941, Civ. B011942.

Page 795

234 Cal.Rptr. 795

190 Cal.App.3d 521

CARMEL VALLEY FIRE PROTECTION DISTRICT et al., Petitioners and Respondents, v. STATE of California et al., Respondents and Appellants.

RINCON DEL DIABLO MUNICIPAL WATER DISTRICT et al., Petitioners and Respondents, v. STATE of California et al., Respondents and Appellants.

COUNTY OF LOS ANGELES, Petitioner and Respondent, v. STATE of California et al., Respondents and Appellants.

Civ. B006078, Civ. B011941, Civ. B011942.

Court of Appeal, Second District, Division 5, California.

Feb. 19, 1987.

As Modified March 10, 1987.

Review Denied May 14, 1987.

John K. Van de Kamp, Atty. Gen., N. Eugene Hill, Asst. Atty. Gen., and Marilyn K. Mayer and Carolyn Hunter, Deputy Attys. Gen., for respondents and appellants State of California et al

Ross & Scott, William D. Ross and Diana P. Scott for petitioners and respondents Ross & Scott, William D. Ross and Diana P. Scott for petitioners and respondents Rincon Del Diablo Municipal Water District et al.

Carmel Valley Fire Protection District et al.

DeWitt Clinton, Co. Counsel, and Amanda F. Susskind, Deputy Co. Counsel, for petitioner and respondent County of Los Angeles.

EAGLESON, Associate Justice.

These consolidated appeals arise from three separate trial court proceedings concerning the heretofore unsuccessful efforts of various local agencies to secure reimbursement of state-mandated costs.

Case No. 2d Civ. B006078 (Carmel Valley et al. case) was the first matter decided by the trial court. The memorandum of decision in that case was judicially noticed by the trial court which heard the consolidated matters in 2d Civ. B011941 (Rincon et al. case) and 2d Civ. B011942 (County of Los Angeles case). Issues common to all three cases will be discussed together under the County of Los Angeles appeal, while issues unique to the other two appeals will be considered separately.

We identify the parties to the various proceedings in footnote 1. ¹ For literary convenience, however, we will refer to all appellants as the "State" and all respondents as the "County" unless otherwise indicated.

APPEAL IN CASE NO. 2 CIVIL B011942

(County of Los Angeles Case)

FACTS AND PROCEDURAL HISTORY

County employs fire fighters for whom it purchased protective clothing and equipment, as required by Title 8, California Administrative Code, sections 3401-3409, enacted in 1978 (executive orders). County argues that it is entitled to State reimbursement for these expenditures because they constitute a state-mandated "new program" or "higher level of service." County relies on Revenue and Taxation Code section 2207 and former section 2231, and California Constitution, article XIII B, section 6 to support its claim. ² , ³, ⁴ County filed a test claim with the State Board of Control (Board) for these costs incurred during fiscal years 1978-1979 and 1979-1980. ⁵ After hearings were held on the matter, the Board determined on November 20, 1979, that there was a state mandate and that County should be reimbursed. State did not seek judicial review of this quasi-judicial decision of the Board.

Thereafter, a local government claims bill, Senate Bill 1261 (Stats.1981, ch. 1090, p. 4191) (S.B. 1261) was introduced to provide appropriations to pay some of County's claims for these state-mandated costs. This bill was amended by the Legislature to delete all appropriations for the payment of these claims. Other claims of County not provided for in S.B. 1261 were contained in another local government claims bill, Assembly Bill 171 (Stats.1982, ch. 28, p. 51) (A.B. 171). The appropriations in this bill were deleted by the Governor. Both pieces of legislation, sans appropriations, were enacted into law. ⁶

On September 21, 1984, following these legislative rebuffs, County sought reimbursement by filing a petition for writ of mandate (Code Civ.Proc., § 1085) and complaint for declaratory relief. After appropriate responses were filed and a hearing was held, the court executed a judgment on February 6, 1985, granting a peremptory writ of mandate. A writ of mandate was issued and other findings and orders made. It is from this judgment of February 6, 1985, that State appeals. The relevant portions of the judgment are set forth verbatim below. ⁷

CONTENTIONS

State advances two basic contentions. It first asserts that the costs incurred by County are not state mandated because they are not the result of a "new program," and do not provide a "higher level of service." Either or both of these requirements are the sine qua non of reimbursement. Second, assuming a "new program" or "higher level of service" exists, portions of the trial court order aimed at assisting the reimbursement process were made in excess of the court's jurisdiction.

These contentions are without merit. We modify and affirm all three judgments.

DISCUSSION

I ISSUE OF STATE MANDATE

The threshold question is whether County's expenditures are state mandated. The right to reimbursement is triggered when the local agency incurs "costs mandated by the state" in either complying with a "new program" or providing "an increased level of service of an existing program." ⁸ State advances many theories as to why the Board erred in concluding that these expenditures are state-mandated costs. One of these arguments is whether the executive orders are a "new program" as that phrase has been recently defined by our Supreme Court in County of Los Angeles v. State of California (1987) 43 Cal.3d 46, 233 Cal.Rptr. 38, 729 P.2d 202.

As we shall explain, State has waived its right to challenge the Board's findings and is also collaterally estopped from doing so. Additionally, although State is not similarly precluded from raising issues presented by the State of California case, we conclude that the executive orders are a "new program" within the meaning of article XIII B, section 6.

A. Waiver

We initially conclude that State has waived its right to contest the Board's findings. Waiver occurs where there is an existing right; actual or constructive knowledge of its existence; and either an actual intention to relinquish it, or conduct so inconsistent with an intent to enforce the right as to induce a reasonable belief that it has been waived. (Medico-Dental Etc. Co. v. Horton & Converse (1942) 21 Cal.2d 411, 432, 132 P.2d 457; Loughan v. Harger-Haldeman (1960) 184 Cal.App.2d 495, 502-503, 7 Cal.Rptr. 581.) A right that is waived is lost forever. (L.A. City Sch. Dist. v. Landier Inv. Co. (1960) 177 Cal.App.2d 744, 752, 2 Cal.Rptr. 662.) The doctrine of waiver applies to rights and privileges afforded by statute. (People v. Murphy (1962) 207 Cal.App.2d 885, 888, 24 Cal.Rptr. 803.)

State now contends to be an aggrieved party and seeks to dispute the Board's findings. However, it failed to seek judicial review of that November 20, 1979 decision (Code Civ.Proc., § 1094.5) as authorized by former Revenue and Taxation Code section 2253.5. The three-year statute of limitations applicable to such review has long since passed. (Green v. Obledo (1981) 29 Cal.3d 126, 141, fn. 10, 172 Cal.Rptr. 206, 624 P.2d 256; Code Civ.Proc., § 338, subd. (1).)

In addition, State, through its agents, acquiesced in the Board's findings by seeking an appropriation to satisfy the validated claims. (Former Rev. & Tax.Code, § 2255, subd. (a).) On September 30, 1981, S.B. 1261 became law. On February 12, 1982, A.B. 171 was enacted. Appropriations had been stripped from each bill. State did not then seek review of the Board determinations even though time remained before the three-year statutory period expired. This inaction is clearly inconsistent with any intent to contest the validity of the Board's decision and results in a waiver.

B. Administrative Collateral Estoppel

We next conclude that State is collaterally estopped from attacking the Board's findings. Traditionally, collateral estoppel has been applied to bar relitigation of an issue decided in a prior court proceeding. In order for the doctrine to apply, the issues in the two proceedings must be the same, the prior proceeding must have resulted in a final judgment on the merits, and the same parties or their privies must be involved. (People v. Sims (1982) 32 Cal.3d 468, 484, 186 Cal.Rptr. 77, 651 P.2d 321.)

The doctrine was extended in Sims to apply to a final adjudication of an administrative agency of statutory creation so as to preclude relitigation of the same issues in a subsequent criminal case. Our Supreme Court held that collateral estoppel applies to such prior adjudications where three requirements are met: (1) the administrative agency acted in a judicial capacity; (2) it resolved disputed issues properly before it; and (3) all parties were provided with the opportunity to fully and fairly litigate their claims. (Id. at p. 479, 186 Cal.Rptr. 77, 651 P.2d 321.) All of the elements of administrative collateral estoppel are present here.

The Board was created by the state Legislature to exercise quasi-judicial powers in adjudging the validity of claims against the State. (County of Sacramento v. Loeb (1984) 160 Cal.App.3d 446, 452, 206 Cal.Rptr. 626.) At the time of the hearings, the Board proceedings were the sole administrative remedy available to local agencies seeking reimbursement for state-mandated costs. (Former Rev. &amp Tax.Code, § 2250.) Board examiners had the power to administer oaths, examine witnesses, issue subpoenas, and receive evidence. (Gov.Code, § 13911.) The hearings were adversarial in nature and allowed for the presentation of evidence by the claimant, the Department of Finance, and any other affected agency. (Former Rev. & Tax.Code, § 2252.)

The record indicates that the state mandate issues in this case were fully litigated before the Board. A representative of the state Division of Occupational Safety and Health and the Department of Industrial Relations testified as to why County's costs were not state mandated. Representatives of the...