City of Sacramento v. Drew

• Decision Date: 14 February 1989
• Docket Number: No. C002305,C002305
• Citation: 255 Cal.Rptr. 704,207 Cal.App.3d 1287
• Court: California Court of Appeals Court of Appeals
• Parties: , 51 Ed. Law Rep. 998 CITY OF SACRAMENTO, Plaintiff and Respondent, v. Charles H. DREW, Defendant and Appellant.

Page 704

255 Cal.Rptr. 704

207 Cal.App.3d 1287, 51 Ed. Law Rep. 998

CITY OF SACRAMENTO, Plaintiff and Respondent, v. Charles H. DREW, Defendant and Appellant.

No. C002305.

Court of Appeal, Third District, California.

Feb. 14, 1989.

As Modified on Denial of Rehearing March 15, 1989.

Ronald A. Zumbrun, John H. Findley, Sharon L. Browne, Sacramento, for defendant and appellant

Littler, Mendelson, Fastiff & Tichy, Bruce J. Sarchet and Ann M. Freers, Sacramento, for plaintiff and respondent.

BLEASE, Associate Justice.

Charles Drew, represented by Pacific Legal Foundation, appeals from an order denying his motion for an award of attorneys' fees under Code of Civil Procedure section 1021.5. Drew prevailed upon summary judgment as a defendant in an action brought by the City of Sacramento (City) to declare the validity of a special tax assessment district to be formed to raise the unfunded construction costs for three elementary schools. The trial court denied the fee award for two reasons. The district "presumably" would have been declared invalid regardless of Drew's participation in the action. Drew "belatedly" raised the prevailing legal theory. Drew claims that neither ground warrants denial of a fee award under section 1021.5.

We agree and shall reverse the trial court's order.

FACTS AND PROCEDURAL BACKGROUND

The Sacramento City Unified School District (District) determined that future population growth within the City would require construction of three elementary schools in an area known as the Pocket Area. The District had funds for one school. The City and the District were advised by counsel that the City had authority to form a district to assess the unfunded costs of constructing the schools under the provisions of the Streets and Highways Code. The City passed a resolution of intention to go forward with this proposal under the authority of the Municipal Improvement Act of 1913 (Sts. & Hy.Code, § 10000 et seq.). Drew sent a letter of protest to the City, which was noted at a hearing preceding the resolution, claiming: (1) the construction of a public school is not authorized by the Municipal Improvement Act of 1913; (2) the assessment is a special tax under California Constitution, article XIIIA (Proposition 13) and may not be imposed, as here, without the approval of a vote of the electorate.

The City brought a validation proceeding (Code Civ.Proc., § 860) to determine whether the Municipal Improvement Act of 1913 authorized the assessment scheme and whether bonds could be issued under the Improvement Bond Act of 1915 (Sts. & Hy.Code, § 8500 et seq.). Drew filed an answer to the complaint, as a person interested Drew filed a motion for summary judgment on the latter ground. He argued that, pursuant to Solvang Mun. Improvement Dist. v. Board of Su (1980) 112 Cal.App.3d 545, 553, 169 Cal.Rptr. 391, the assessment is in reality a tax levied for general revenue for a general public improvement and is barred for noncompliance with the two-thirds vote requirement of Proposition 13. The City replied, relying upon City of San Diego v. Holodnak (1984) 157 Cal.App.3d 759, 203 Cal.Rptr. 797, which held that a public library and a park-and-ride facility were proper subjects of special assessments without the prohibitions of Proposition 13. ¹

in the matter (Code Civ.Proc., § 861.1), controverting the City's allegations. As an affirmative defense he tendered the additional claim that the assessment scheme contravenes Proposition 13.

At the hearing on the motion the City argued that consideration of the issue whether the assessment was a special assessment was foreclosed on procedural grounds and that the only viable issue was whether the assessment acts could be used to construct schools. Alternatively it argued that the trial court should view the construction of the schools as the proper subject of a special assessment district under the reasoning of Holodnak, supra. Drew replied that there was no procedural bar and that Proposition 13 would be eviscerated if that were the case.

The trial court asked for further briefing: (1) Was the technical procedural claim of the City superseded by enactment of Proposition 13; (2) was Drew's counter argument concerning inapplicability of that claim correct; (3) were prior statutory determinations concerning appropriateness of special assessments for certain purposes superseded by Proposition 13; (4) was the court to consider the intentions of the District regarding neighborhood attendance at the schools with respect to the question of direct or local benefit and (5) was the assessment distinguishable from development fees for school impact upheld in Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985) 39 Cal.3d 878, 218 Cal.Rptr. 303, 705 P.2d 876. The matter was continued to accomplish the briefing.

In the City's reply brief it again asserted that the sole issue was "whether authority exists [to] use the assessment acts to construct public school buildings, where the construction of such facilities is not specified in so many words in the assessment legislation." It pointed to Holodnak, supra, and oddly enough, quoted a snippet from a companion case, J.W. Jones Companies v. City of San Diego (1984) 157 Cal.App.3d 745, 203 Cal.Rptr. 580, which upheld the use of assessments on undeveloped property for growth impact costs under San Diego's authority as a charter city. That quotation contrasted the flexibility of San Diego's action under its charter with the statutory authority upon which the City relied in this case: "The narrow strictures of general law concepts of financing public facilities as embedded in acts such as the Improvement Act of 1911 or the Municipal Improvement Act of 1913 do not accommodate the dynamics of explosive growth in sunbelt cities." (Id., at pp. 757-758, 203 Cal.Rptr. 580.)

Drew's closing brief picked up the City's statutory gauntlet and argued that the language of the assessment acts, upon which the City had relied, did not permit it to finance school construction. He argued: (1) the property to be improved was not owned by the City and hence was outside the list, in Streets and Highways Code section 5101, of the kinds of work permitted under the Improvement Act of 1911 and (2) Streets and Highways Code section 10102 indicates that the Municipal Improvement Act of 1913 only permits works and improvements of a local nature and which does not include public schools.

When the motion for summary judgment again came on for further hearing the trial court said it had requested an appearance for oral argument because Drew had "raised an issue in [his] reply brief which has not previously been raised in this motion, and that is whether or not an assessment for this purpose, for the planned purpose is authorized by the legislation upon which the City of Sacramento relies." Counsel for both parties agreed the issue was not raised in the original moving papers. The trial court said that the statutory issue would have to be resolved prior to the constitutional issue, and another continuance for further briefing was had.

Following that briefing and further hearing the trial court decided that school construction was not "of a local nature" within the meaning of section 10102 and that an assessment district for that purpose could not be formed under the Municipal Improvement Act of 1913. The trial court said that school construction was not a kind of work permitted under section 5101 and the assessment scheme could not be upheld under the Improvement Act of 1911. The trial court granted Drew's motion for summary judgment on these grounds. Judgment was entered accordingly. No appeal was taken by the City and we have no occasion to consider the merits of the decision.

Drew filed a motion for attorneys' fees under Civil Code section 1021.5. It was denied. The court said: "I would probably conclude that all of those criteria of the statute have been met, that is [section 1021.5, subdivisions (a)--(c) ] and the general requirement that the action resulted in the enforcement of an important right affecting the public interest." From the comments of the court at the hearing, it appears the motion was denied for two reasons. First, Drew had not raised the issue upon which he prevailed: "The only manner in which Mr. Drew can claim credit for his victory in this lawsuit--and I don't--and I don't deny that he prevailed in this lawsuit in the sense that he--a judgment was issued in his favor and against the City. But the only manner in which--the way in which he came to be the prevailing party was that he responded to the court's request to brief an issue which he had never raised. And after that issue was briefed the court decided that the position that Mr. Drew had taken at the invitation of the court was well taken and--and--and ruled in Mr. Drew's favor."

Second, the action was brought as a validation action by the City and might have been resolved the same way regardless of Drew's participation: "Presumably had Mr. Drew not appeared in this proceeding the court would have arrived at the same result. And I--I say that mindful of--I use the word presumably advisedly because I'm not saying as a matter of fact that the court would have. That would be sort of idle speculation on my part."

Drew sought reconsideration of the order denying attorney fees. He challenged the trial court's premise that he had not raised the issue of statutory authority, asserting that he had raised the issue in the proceedings prior to the lawsuit, in the answer and in his reply brief of September 22, 1986. Drew supported the claim with references to documents in the superior court's file and a transcript of the prior hearing at which the trial court acknowledged that Drew had raised the issue. The trial court denied the motion by minute order, noting: "Motion denied. The movant's motion for summary judgment was granted, upon a basis not presented by the...