Debro v. Los Angeles Raiders

• Decision Date: 05 October 2001
• Docket Number: No. A094248.,A094248.
• Citation: 92 Cal.App.4th 940,112 Cal.Rptr.2d 329
• Parties: Joseph DEBRO, Plaintiff and Appellant, v. The LOS ANGELES RAIDERS, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

112 Cal.Rptr.2d 329

92 Cal.App.4th 940

Joseph DEBRO, Plaintiff and Appellant, v. The LOS ANGELES RAIDERS, Defendant and Respondent.

No. A094248.

Court of Appeal, First District, Division 5.

October 5, 2001.

Certified for Partial Publication.^*

Review Denied Jan. 23, 2002.

Counsel for Appellant: Joseph Debro, in pro per.

Counsel for Respondent: Kenneth G. Hausman, Kevin H. Lewis, Howard, Rice,

Nemerovski, Canady, Falk & Rabkin, San Francisco.

STEVENS, J.

Joseph Debro (Debro) appeals from a judgment following the sustaining of respondent's demurrer to his second amended complaint without leave to amend. Debro contends the trial court erred because one of his causes of action, based on the California False Claims Act (Gov.Code, §§ 12650-12655), was not time-barred. We disagree and affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

On August 7, 1995, The Los Angeles Raiders (Raiders) and entities known as the East Bay Entities (the City of Oakland, the County of Alameda, the Oakland-Alameda County Coliseum Authority, the Oakland-Alameda County Coliseum Financing Corporation, and the Oakland-Alameda County Coliseum, Inc.) entered into certain agreements by which the Raiders would play professional football in Oakland through 2011. Under the terms of the master agreement, the Raiders would receive revenue from ticket sales, as well as loans to finance a training facility and operation expenses. In addition, the Oakland-Alameda County Coliseum would be expanded and modernized. The East Bay Entities agreed to finance the stadium renovations and their other obligations through the sale of personal seat licenses, club seats, and luxury suites, as well as the issuance of bonds.

Under the loan agreement, which was part of the master agreement, the East Bay Entities authorized the Oakland-Alameda County Coliseum Financing Corporation (Financing Corp.) to loan up to $85 million to the Raiders to finance the renovation of the stadium, $10 million to finance the construction and development of a training facility, and $53.9 million for operations purposes. The loan agreement set forth the methods of disbursement of the loan proceeds, the Raiders' repayment obligations, and the events of default and remedies. The loan agreement also granted the Financing Corp. a security interest to secure repayment of the loans. Article V of the loan agreement, entitled "NON-RECOURSE OBLIGATIONS," stated that aside from certain limitations, "any claim ... against Raiders based upon this Loan Agreement shall be non-recourse."

On August 15, 1995, Debro filed a lawsuit in Alameda County Superior Court against the City of Oakland, County of Alameda, and others, seeking to void and enjoin performance of the master agreement. The action was dismissed in April 1996, without explanation in the record.

In August 1997, Debro filed a lawsuit against the administrator of the Oakland-Alameda County Coliseum Authority (OACCA), a joint powers authority of the City of Oakland and the County of Alameda that was formed in connection with the 1995 Raiders transaction. The complaint sought damages for professional misconduct relating to the loan agreement and the construction contracts by which the Coliseum was renovated. The lawsuit was dismissed in June 1999 for Debro's failure to comply with local rules.

Debro filed the lawsuit at issue here on October 6, 1999, against the Raiders, the general partner of the Raiders, the Oakland-Alameda County Coliseum, Inc., the Tutor-Saliba Corporation (the contractor for the renovation of the Coliseum), and two individuals. His complaint charged, among other things, that the defendants conspired to defraud the taxpayers of the City of Oakland and the County of Alameda by "knowingly making using or causing to be made or using false statements to get false claims approved by the Oakland City Council and the Alameda [C]ounty Board of Supervisors." His action purported to state causes of action under six statutes, including Government Code sections 12650 and 12651 of the California False Claims Act (California Act).

Debro filed a first amended complaint in July 2000. He dropped all of the defendants except for the Raiders, and added the OACCA as a defendant. The new pleading charged the Raiders and the OACCA with violating the six statutes on which the original complaint was based, including Government Code sections 12650 and 12651 of the California Act.

The Raiders demurred to Debro's first amended complaint. As to two statutes that Debro conceded could not support a cause of action, the trial court sustained the demurrer without leave to amend. As to the remaining four statutes, the court sustained the demurrer with leave to amend, directing him to "allege, if possible, facts that state cognizable causes of action under these statutes that are not barred by the applicable statutes of limitations." The court also granted Debro "leave to amend to join all necessary parties or to allege facts that demonstrate that such parties cannot be joined."

The second amended complaint (the one at issue here) was filed in November 2000. Its first three causes of action alleged that the Raiders and the OACCA violated Government Code sections 12650, 12651, and 23007 in entering into the loan agreement in August of 1995. The second cause of action, based on Government Code section 12651, charged that the Raiders "negotiated for and accepted $64.9 million of public money as a payment for relocating of the Raiders to Oakland and fraudulently conspired to hide the relocation payment in a public document by calling said relocation payment a loan in violation of Government Code Section 12651." A fourth cause of action pled that the Raiders and the OACA conspired to violate these three statutes. As to the statute of limitations, Debro alleged that the limitations period did not begin running in August 1995, when the loan agreement was signed, because he did not discover the fraud until December 1997. Despite the trial court's admonishment to join all necessary parties, Debro did not name any additional parties.

In their demurrer to the second amended complaint, the Raiders and OACCA contended that (1) all of the causes of action were time-barred, (2) fraud was not pled with particularity, (3) no qui tam action could be brought under Government Code section 23007 (the statute on which the third and fourth causes of action were based), (4) necessary parties were not joined, and (5) the second amended complaint was ambiguous and unclear. Before the demurrers were heard, Debro dismissed OACCA as a defendant.

The court sustained the Raiders' demurrer without leave to amend as to the entire second amended complaint. This appeal followed.

II. DISCUSSION

According to his notice of appeal, Debro challenges only the dismissal of the second cause of action, which he brought under Government Code section 12651. In neither his notice of appeal nor his briefs does he challenge the dismissal of the first, third, and fourth causes of action. We therefore consider whether the trial court erred in sustaining the demurrer without leave to amend, only as to Debro's cause of action under Government Code section 12651. (See Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4, 188 Cal.Rptr. 115, 655 P.2d 317.)

A. Standards of Review

On appeal from a demurrer sustained without leave to amend, we assume the truth of the allegations of the complaint and determine whether they state a cause of action and, if not, whether the defect may be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.) We will affirm the court's ruling if it is correct under any legal theory raised in the demurrer, whether the court relied on the theory or not. (Hendy v. Losse (1991) 54 Cal.3d 723, 742, 1 Cal.Rptr.2d 543, 819 P.2d 1.) The denial of leave to amend we review for abuse of discretion. (Cantu v. Resolution Trust Corp. (1992) 4 Cal. App.4th 857, 889-890, 6 Cal.Rptr.2d 151 (Cantu).)

B. Statute of Limitations

A complaint fails to state a cause of action if the allegations disclose that the cause of action is barred by the applicable statute of limitations. (Duggal v. G.E. Capital Communications Services, Inc. (2000) 81 Cal.App.4th 81, 86, 96 Cal. Rptr.2d 383.) To decide whether Debro's cause of action under the California Act was time-barred, we begin with a brief overview of the California Act, and then ascertain what false claim Debro has alleged, interpret the statute of limitations in the California Act, and examine the complaint's allegations regarding the commencement of the limitations period.

1. The California False Claims Act

The California Act, set forth at Government Code sections 12650 through 12655, is intended to "supplement governmental efforts to identify and prosecute fraudulent claims made against state and local governmental entities." (Rothschild v. Tyco Internal (US), Inc. (2000) 83 Cal. App.4th 488, 494, 99 Cal.Rptr.2d 721.)¹ In general, the California Act permits a governmental agency, or a qui tam plaintiff bringing an action on behalf of the government agency, to recover civil penalties and damages from any person who, for example, knowingly presents to the state or political subdivision a false claim for payment or approval. (§ 12651, subd. (a)(1).) The California Act was patterned after the federal False Claims Act (31 U.S.C. § 3729 et seq.). (Rothschild, supra, at p. 494, 99 Cal.Rptr.2d 721 [citing legislative history].)²

Section 12652 sets forth three ways in which a lawsuit under the California Act can proceed. First, the Attorney General "shall diligently investigate" false claims involving state funds and may bring an action against violators. (§ 12652, subd. (a)(1).) Second, the prosecuting authority of a political subdivision "shall diligently investigate" false claims involving political subdivision funds and may bring an action against violators....