Denham v. Los Angeles County

• Decision Date: 08 March 1968
• Citation: 66 Cal.Rptr. 922,259 Cal.App.2d 860
• Court: California Court of Appeals Court of Appeals
• Parties: James E. DENHAM, Plaintiff and Appellant, v. The COUNTY OF LOS ANGELES, Defendant and Respondent. Civ. 31098.

Page 922

66 Cal.Rptr. 922

259 Cal.App.2d 860

James E. DENHAM, Plaintiff and Appellant, v. The COUNTY OF LOS ANGELES, Defendant and Respondent.

Civ. 31098.

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

March 8, 1968.

Rehearing Denied April 3, 1968.

Hearing Denied May 1, 1968.

Acret & Perrochet and Robert W. Robinow, Los Angeles, for plaintiff and appellant.

Harold W. Kennedy and John D. Maharg, County Counsel, and Lloyd S. Davis, Chief Trial Deputy County Counsel and Richard C. Greenberg, Deputy County Counsel, for defendant and respondent.

AISO, Associate Justice, pro tem. ^*

This action arises from a contract entered into April 9, 1963, wherein plaintiff, James E. Denham, agreed to construct for the defendant, County of Los Angeles, a vivarium (animal housing and testing annex) at the Olive View Hospital for the sum of $170,486.00.

By his third amended complaint (setting forth six counts), plaintiff seeks to recover a total of $31,655.40, together with interest thereon, claiming an unwarranted deduction of $7,100.00 by the County as liquidated damages for late completion of the structure, $9,190.50, plus interest, for performance of extra work not covered by the contract, and $15,155.40, plus interest, for sundry damages alleged to have been caused to plaintiff by the County's default.

To this third amended complaint, defendant County interposed general and special demurrers. The trial court sustained the demurrer upon the specific ground that the third amended complaint and each cause of action therein contained, was barred by section 945.6 of the Government Code ¹ requiring suit to be commenced within six months after the claim is rejected by the board of supervisors or is deemed to have been rejected by that board. ² Leave to amend was granted. Upon plaintiff's failure to amend, a written order of dismissal was signed and filed. (Code of Civ.Proc. §§ 581, subd. 3 and 581d.) Plaintiff appeals from said order which is deemed to be a judgment of dismissal.

During the course of construction, plaintiff was required by defendant to correct certain irregularities in the concrete ceiling which had resulted from the use of misfitting forms. ³ Plaintiff claims that this was extra work not covered by the contract and for which defendant by terms of the contract agreed to pay in addition to the contract price of $170,486.00. On February 10, 1964, plaintiff sent a letter to the board of supervisors requesting additional compensation for this work. The board of supervisors made an order on June 30, 1964, denying this request and plaintiff was notified of said action by letter dated July 3, 1964.

Among other things, the contract specified that construction be completed within 225 days from date of execution of contract, or on November 20, 1963; that time was of the essence; that the date for completion would be extended for delays caused by changes in the work or by any default, act or omission of defendant or by stress of weather; and that defendant could deduct the sum of $100.00 per day as 'liquidated damages' from the amount due plaintiff under the contract for delays ascribable to plaintiff.

Construction was completed May 27, 1964, which was 188 days beyond the original completion date. Defendant allowed an extension of 118 days, 100 days for changes in work and other causes attributable to defendant and 18 days for delays caused by stress of weather. The work was accepted by defendant on September 8, 1964, at which time defendant assessed plaintiff $7,100.00 as and for liquidated damages. Defendant on October 1, 1964, made its final payment of $6,012.71 to plaintiff on the contract.

On November 16, 1964, plaintiff filed a formal claim (including therein the one covered by the previous letter of February 10, 1964) for additional compensation for finishing the ceilings, restoration of the liquidated damages which plaintiff claimed were improperly assessed, damages due to delays caused by defendant and other minor items. The board of supervisors by order made on January 12, 1965, denied this claim. Plaintiff was advised of this action by the board on January 14, 1965, by letter dated January 13, 1965, which was pleaded In haec verba by plaintiff's reference to and incorporation of Exhibit 'D' attached to plaintiff's second amended complaint. ⁴ Plaintiff further alleged: 'In sending the letter, defendant represented and intended to represent that defendant had denied the claim on January 12, 1965, and that the statute of limitations for filing suit on the claim should be computed from that date. Plaintiff relied on such representation and filed the suit within six months after January 12, 1965.'

Plaintiff further alleged that on or about January 20, 1965, plaintiff asked defendant how to amend the formal claim so as to include some facts ascertained subsequent to the presentation of its formal claim in November 1964. A letter dated May 6, 1965, addressed to the board of supervisors, attention: Warren M. Dorn, which plaintiff claims to be an amendment of his claim but which defendant urges is a communication addressed to Supervisor Dorn only asking his assistance in 'getting the Board of Supervisors to grant us a re-hearing' and not an amendment, was received by the board on May 11, 1965. The board reexamined plaintiff's entire claim as thus amended and denied it on May 27, 1965.

Plaintiff filed suit on July 9, 1965, which defendant contends was nine days too late under the provisions of section 945.6, reading in part relevant to this action, '* * * any suit brought against a public entity on a cause of action for which a claim is required to be presented * * * must be commenced within six months after the date the claim is acted upon by the board, or is deemed to have been rejected by the board * * *.'

Section 912.4 provides: '(a) The board shall act on a claim * * * within 45 days after the claim has been presented. If a claim is amended, the board shall act on the amended claim within 45 days after the amended claim is presented. (b) The claimant and the board may extend the period within which the board is required to act on the claim by written agreement made: (1) Before the expiration of such period; or (2) After the expiration of such period if an action based on the claim has not been commenced and is not yet barred by the period of limitations provided in Section 945.6. (c) If the board fails or refuses to act on a claim within the time prescribed by this section, the claim shall be deemed to have been rejected by the board on the last day of the period within which the board was required to act upon the claim. If the period within which the board is required to act is extended by agreement pursuant to this section, whether made before or after the expiration of such period, the last day of the period within which the board is required to act shall be the last day of the period specified in such agreement.'

It is defendant's position that: The claim of November 16, 1964, is deemed to have been filed on that date. (§ 915.2.) ⁵ The 45-day period after the date of presentation was December 31, 1964, and since the board of supervisors had not acted on the claim up to that time, the claim is deemed to have been rejected on that date. (§ 912.4.) Six months following this deemed rejection expired on June 30, 1965, thus making the filing of the action on July 9, 1965, nine days too late. Defendant further contends that action of the board of supervisors on January 12, 1965, rejecting the claim was beyond the 45-day period prescribed for taking action and since there was no express written agreement extending time, the board was acting Ultra vires and its actions were a nullity.

It is plaintiff's contention that the six-months' period should be calculated from the date of rejection by the board of supervisors on January 12, 1965, citing Hochfelder v. County of Los Angeles (1954) 126 Cal.App.2d 370, 272 P.2d 844 decided prior to the 1963 amendments to the Government Code sections providing for a uniform procedure for instituting actions against public entities. In any event, plaintiff urges as one ground for reversal that the letter of January 13, 1965, constitutes a basis for estoppel barring defendant from now insisting that the statute of limitations commenced running on December 31, 1964, instead of January 12, 1965. With this latter contention, we agree.

The factual situation in Hochfelder was similar to the situation here presented. Section 29714 of the Government Code as it then read provided 'the claimant may treat the refusal or neglect as final action and rejection on the ninetieth day.' The board of supervisors failed to act within the ninety day period and thereafter rejected the claim. Action was filed within six months from the date of rejection, but not within six months from the expiration of the ninety-day period. Pointing out that the statute fixed no definite period within which the board had to act, the court held that the provisions of section 29714 were optional only and hence an action filed within six months from the date of rejection by the board of supervisors was timely filed.

One of the purposes for enacting section 912.4 was to fix a time limit within which the board must act. If that were the only change, then the general policy considerations of Hochfelder might no longer be viable. However, section 912.4 went further. As the Law Revision Commission Comments to that section point out, 'Although this section provides that a claim is deemed to be rejected if the board does not act within 45 days, it expressly authorizes the claimant and the board to extend the 45-day period by agreement. In addition, new Section 913.2 authorizes reconsideration and settlement of claims within the period allowed for commencing an action.' This affirmatively indicates a legislative intent not to make the 45-day period a jurisdictional limitation 'adamant rather than...