Dawson v. Town of Los Altos Hills

• Decision Date: 08 April 1976
• Docket Number: S.F. 23341
• Citation: 547 P.2d 1377,16 Cal.3d 676,129 Cal.Rptr. 97
• Court: California Supreme Court
• Parties: , 547 P.2d 1377 Laurence DAWSON et al., Plaintiffs and Appellants, v. TOWN OF LOS ALTOS HILLS, Defendant and Respondent.

Page 97

129 Cal.Rptr. 97

16 Cal.3d 676, 547 P.2d 1377

Laurence DAWSON et al., Plaintiffs and Appellants, v. TOWN OF LOS ALTOS HILLS, Defendant and Respondent.

S.F. 23341.

Supreme Court of California In Bank.

April 8, 1976.

Michael di Leonardo, and di Leonardo & Aguilar, P.C., Sunnyvale, for plaintiffs and appellants.

Robert G. Auwbrey and Wilson, Jones, Morton & Lynch, San Mateo, for defendant and respondent.

Evelle J. Younger, Atty. Gen., Carl Boronkay, Asst. Atty. Gen., and E. Clement Shute, Jr., Deputy Atty. Gen., as amici curiae on behalf of defendant and respondent.

SULLIVAN, Justice.

In this action for declaratory and injunctive relief plaintiff property owners sought a judgment declaring that a certain Sanitary Sewer Assessment District No. 9 and a resolution adopted prior to its formation were void and illegal and that defendant Town of Los Altos Hills and its agents be enjoined from levying assessments proposed to be called for pursuant to the formation of the district. The trial court denied plaintiffs all relief, holding in substance that the district was duly and regularly formed and established under applicable law and that the challenge to the questioned resolution was moot. Plaintiffs appeal from this judgment.

The Town of Los Alto Hills (Town) is situated in two natural basins, one of which drains in the direction of the City of Los Altos and the other in the direction of the City of Palo Alto. In 1967 and 1968 it entered into contracts with each of these cities for the handling of sewer discharge from the Town. The Los Altos contract, which permitted Town property owners in that begin to individually purchase capacity rights, did not commit the Town to the payment of any set amount of money. The Palo Alto contract, on the contrary, was based upon the assumption that all available building sites in the Palo Alto Drainage Basin would be occupied within a relatively short period of time. Accordingly, it provided for the purchase by the Town of capacity rights in the Palo Alto sewage system for all such sites. To this end, the Town agreed to pay over a five-year period the sum of approximately $400,000. Subsequently, it incurred an additional obligation of $270,000 as its share of the cost of a new treatment plant. This contract and these obligations eventually produced the difficulties underlying the present suit.

In 1971 problems in discharging these financial obligations became imminent. To resolve them, the Town council determined to form a special assessment district in that portion of the Town located in the Palo Alto Drainage Basin and in furtherance of this plan adopted a series of resolutions. Among other things, it set a time and place for a public hearing on the resolution of intention to form the special assessment district, on the engineer's report directed to be prepared, and on any protests thereafter filed. After a hearing on August 2, 1971, the council overruled the protests by a vote of four to one and thereafter by resolution ¹ approved the engineer's report and levied assessments.

Plaintiffs thereupon commenced the instant action 'on behalf of themselves and all other citizens, property owners, taxpayers and residents in the Town . . . who are or may be assessed in connection with' the district. The complaint alleged that the formation of the district was violative of various state and federal constitutional provisions as well as relevant provisions of state law and that therefore the formation of the district and the special assessments imposed pursuant thereto were without force of law. In particular, it was alleged, plaintiffs were being assessed to meet a contractual commitment of the Town 'which is wholly or partly for the benefit of all of the property owners within the municipal boundaries of the Town . . . and for which adequate funds would have been, and would be, available had defendants not enacted' and adhered to a certain Resolution No. 458, which was passed in 1968 (i.e., at essentially the same time as the Palo Alto contract) and set forth the Town's then sewer policy; that the proposed assessmens 'were made completely without consideration of special benefits conferred upon each parcel of land within said proposed district'; and 'that said proposed assessments are so unjust, discriminatory and without regard to benefits conferred as to amount to a fraud upon these plaintiffs.' Plaintiffs prayed for a judgment declaring that the formation of the district and Resolution No. 458 were without force of law; that plaintiffs were not required to comply with demands made by the Town with regard to payments illegally assessed thereunder; and that the Town and its agents be enjoined from exercising any powers, rights, or duties--including the levying of further assessments--pursuant to the formation of the district.

So far as is here relevant, the court found and concluded in substance that all the proceedings relative to the formation of the district were properly and correctly conducted pursuant to the Municipal Improvement Act of 1913 and the Improvement Bond Act of 1915; that there was substantial evidence adduced before the Town council at the hearing of August 2, 1971, to support its determination 'that the property of plaintiffs . . . was benefited by the proposed acquisition and its determination as to the amount of bene fit'; that all real property which was specially benefited was included within the boundaries of the district and all property not so benefited was excluded therefrom, and that 'all the assessments were uniformly and equally spread in accordance with the law'; that 'the acquisition of capacity and disposal rights and the right of service and use in sanitary sewerage collection, treatment, outfall and disposal facilities of the City of Palo Alto constitute works and improvements of a local nature within the meaning of the Municipal Improvement Act of 1913,' such acquisition being authorized by the act; that the question of the validity of Resolution No. 458 was moot because the resolution, in either its original or amended form, was not followed by the Town council in forming the district or spreading the assessment therein, and moreover such resolution had been rescinded; and finally, that the district 'was duly and regularly formed and established under and pursuant to the Municipal Improvement Act of 1913 and bonds to be issued on the unpaid accessments pursuant to the Improvement Bond Act of 1915, and all proceedings undertaken by the defendant (Town) in the formation of (the district) are valid and lawful.' Judgment was entered accordingly. This appeal followed.

Plaintiffs advance four basic contentions on appeal. Of these we need concern ourselves with only three. The remaining contention may be briefly characterized as one urging that the trial court failed to appreciate the representative character of the acting and in so doing erroneously concluded certain class members to have waived their rights by neglecting to undertake certain procedural steps. In view of our ultimate conclusion that the trial court properly denied all relief, we are satisfied that this last mentioned contention need not concern us since the precise identity of all those seeking such relief thereby dissolved as a matter of no consequence. Accordingly, and following some general introductory remarks concerning the nature of the instant proceeding and the appropriate scope of review, we shall limit our consideration to plaintiffs' contentions (1) that the trial court erred in concluding that the Town council proceeded upon proper statutory authority in the creation of the district; (2) that the trial court erred in refusing to determine that Resolution No. 458 was unconstitutional; and (3) that the trial court erred in upholding the Town council's determinations relative to the benefits to accrue to the properties assessed.

I

As already stated, the instant action sought declaratory and injunctive relief. Its essential object, as disclosed by the prayer, is a declaration that the district here in question is without legal existence, and that all obligations and duties arising as a result of its information are likewise of no legal effect. It is therefore an 'action or proceeding' contesting 'the validity of an assessment' (Sts. & Hy.Code, § 10400; see also Vogel v. City of Millbrae (1959) 167 Cal.App.2d 403, 334 P.2d 620) and as such differs in no essential respect from other civil actions or special proceedings brought to test the validity of a special assessment. ²

The standard of judicial review which is applicable in such proceedings flows from the nature of the action being reviewed. A special assessment district--unlike other public districts such as irrigation districts and reclamation districts--is not a legal entity with officers and corporate rights and duties. Rather such a district, in the words of the Municipal Improvement Act of 1913 (under which the Town council here proceeded), is merely 'the district of land to be benefited by the improvement and to be specially assessed to pay the costs and expenses of the improvement and the damages caused by the improvement.' (Sts. & H.Code, § 1008.) ³ The procedure for 'forming' such a district involves the passage of a resolution of intention by the legislative body of the city or county involved (§ 10200); the preparation of a report containing plans for the proposed improvement if not already installed, an estimate of the cost of the improvement, a diagram showing the boundaries of the district and the parcels within it to be assessed, and a proposed assessment scheme showing the individual assessments against such parcels in proportion to the estimated benefits to be received by them respectively (§§ 10203, 10204); the consideration and modification of the report by the legislative body (§ 10300); the public hearing of protests (§ 10301; see also § 10310); and finally, confirmation...