City of Stockton v. Superior Court, C048162.
| Citation | 35 Cal.Rptr.3d 164,133 Cal.App.4th 1052 |
| Decision Date | 04 October 2005 |
| Docket Number | No. C048162.,C048162. |
| Court | California Court of Appeals |
| Parties | CITY OF STOCKTON et al., Petitioners, v. The SUPERIOR COURT of Sacramento County, Respondent; Civic Partners Stockton, LLC, Real Party in Interest. |
Malcolm A. Misuraca, Coral Gables, FL, for Real Party in Interest.
After the trial court overruled their demurrers to the complaint of real party in interest Civic Partners Stockton, LLC (Civic), petitioners the City of Stockton (the City) and the Redevelopment Agency of the City of Stockton (the Redevelopment Agency) initiated this original proceeding for writ of mandate seeking to compel the trial court to sustain the demurrers. The City and the Redevelopment Agency contend Civic's complaint is barred by Civic's failure to present a claim under the Government Claims Act (Gov.Code, § 810 et seq.) before filing suit. We agree and shall grant the requested relief.
Because this proceeding follows an order overruling demurrers to the most recent complaint filed by Civic, we summarize and accept as true all material allegations of that complaint. (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 8, fn. 3, 32 Cal.Rptr.2d 244, 876 P.2d 1043; Shoemaker v. Myers (1990) 52 Cal.3d 1, 7, 276 Cal.Rptr. 303, 801 P.2d 1054.)
Civic and the Redevelopment Agency entered into two contracts, the first for rehabilitation of the Hotel Stockton (the hotel) and the second for development of a cinema near the hotel.
In May 2001, the City entered into a lease with Civic for 65,000 square feet on the upper floors of the hotel. However, three months later, the City repudiated the lease. In a meeting with Civic and several others, Mark Lewis, the City manager and executive director of the Redevelopment Agency, "stated that the [C]ity would not go forward with the lease, and he demanded that [Civic] agree to replace the lease with another use of the upper floors of the hotel, or the [C]ity would not participate further in Civic's development." Without the lease, or a viable alternative use, Civic could not finance renovation of the hotel and, without the hotel, Civic could not finance the cinema.
Lewis offered Civic an alternative to use the upper floors of the hotel for senior housing. This alternative made it impossible for Civic to meet milestones and dates for performance of the hotel development agreement. The hotel interior had to be redesigned and the space had to be "financeable" through government grants and income tax credits, application for which would take time. Civic agreed to the change to mitigate its damages from the City's breach of the lease.
By the end of 2001, "Civic had completed the tax and financing analysis, plans, and other work necessary to prepare the application for tax credits in the March competition." This process cost Civic several hundred thousand dollars.
In January 2002, Lewis informed Civic that the Redevelopment Agency had decided to allow Cyrus Youssefi and his company, CFY Development, Inc., to take over renovation of the upper floors of the hotel the senior housing plan and the tax credit application. Civic immediately began discussions with Steve Pinkerton, the Redevelopment Agency's director of housing and development, and Jim Rinehart, the Redevelopment Agency's manager of housing and development, "on how the [Redevelopment Agency] intended to protect Civic from the damages from this breach of the hotel [development] agreement and the prior breach of the lease and the hotel development agreement." Pinkerton and Rinehart "agreed that to avoid damaging [Civic] further by the breach, the [Redevelopment Agency] owed Civic and would repay Civic's investment and overhead to develop the hotel and would assure Civic that the hotel development agreement would not be undermined further. . . ."
In order to obtain tax credits, an application had to be submitted by March 19, 2002. To facilitate this application, the Redevelopment Agency requested that Civic turn over the plans it had created on the hotel. On February 19, Civic sent Pinkerton a letter indicating its willingness to turn over the plans subject to the understanding that the plans can only be used by the Redevelopment Agency, the City or others subject to an agreement between the Redevelopment Agency and Civic regarding the future renovation of the hotel, including the reimbursement of costs incurred by Civic to date. That same day, Rinehart signed the letter for Pinkerton, agreeing to its terms.
In a subsequent discussion on March 15, Pinkerton "agreed that the [Redevelopment Agency] recognized certain specific amounts due to or on behalf of [Civic] and certain necessary acts to cure to the extent possible the outstanding breach of the hotel development agreement." Civic followed this discussion with a memorandum sent to Pinkerton the same day setting forth various terms of Civic's understanding with the Redevelopment Agency, including that the City would assume a $800,000 loan to Civic, the City would reimburse Civic for hotel expenditures after December 1, 2001, and CFY Development, Inc., would lease the first floor of the hotel to Civic for 55 years. Pinkerton never questioned or disavowed this memorandum.
Civic had paid its architect over $600,000 to prepare the plans for the hotel by the time they were turned over to the City and the Redevelopment Agency. The Redevelopment Agency personnel assured Civic that the plans would not be given to Youssefi unless the Redevelopment Agency provided Civic with assurances that Civic's interests would be protected. The Redevelopment Agency also agreed to assume Civic's obligation on the $800,000 loan.
On March 19, 2002, the Redevelopment Agency entered into a new hotel development agreement with another of Cyrus Youssefi's companies, Hotel Stockton Investors. This effectively repudiated the hotel development agreement with Civic. The City and the Redevelopment Agency also turned over Civic's plans to Youssefi. The Redevelopment Agency did not pay Civic for the cost of preparing the plans. The Redevelopment Agency also did not take over Civic's obligation on the $800,000 loan.
In connection with the cinema development agreement, Civic obtained a lease of the new cinemas from Kirkorian Premiere Theatres. The City and the Redevelopment Agency approved the lease. However, some time thereafter, the City began to induce Kirkorian to deal directly with the City or the Redevelopment Agency to become a tenant of the Redevelopment Agency rather than Civic. The City or the Redevelopment Agency later entered into a lease with another theater chain. The Redevelopment Agency eventually terminated the cinema development agreement with Civic in order to enter into a new agreement with another developer.
Civic filed suit against the City, the Agency, Cyrus Youssefi, Hotel Stockton Investors, and CFY Development, Inc. After various demurrers were sustained, Civic filed a second amended complaint. It alleges five causes of action: (1) breach of the lease by the City; (2) breach of the hotel development agreement by the Redevelopment Agency; (3) breach of the cinema development agreement by the Redevelopment Agency; (4) intentional interference with the development agreements by the City; and (5) intentional interference with the development agreements by Youssefi and his companies.
The City and the Redevelopment Agency (collectively Petitioners) filed a cross-complaint against Civic alleging, among other things, that Civic breached the two development agreements and the lease.
Petitioners filed demurrers and a motion to strike the second amended complaint, asserting Civic failed to allege compliance with the claims presentation requirement for suits against governmental entities. The trial court overruled the demurrers, concluding the claims presentation requirements do not apply to actions based on contract. The court also denied the motion to strike.
Petitioners contend the trial court erred in overruling their demurrers to the second amended complaint. They argue Civic's claims are subject to the claim filing requirement of the Government Claims Act () and the complaint fails to allege compliance with that requirement. We agree.
The Government Claims Act establishes the bases and conditions under which claims against state and local public entities may be pursued. Section 905.2 states: "(a) There shall be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of this part all claims for money or damages against the state. . . ." A valid claim must contain, among other things, the name and address of the claimant, "[t]he date, place and other circumstances of the occurrence or transaction which give rise to the claim asserted," "[a] general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim," and the amount claimed. (§ 910.)...
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