Edgemont Community Service Dist. v. City of Moreno Valley, E013628

Decision Date18 July 1995
Docket NumberNo. E013628,E013628
Citation42 Cal.Rptr.2d 823,36 Cal.App.4th 1157
CourtCalifornia Court of Appeals Court of Appeals
Parties, 95 Cal. Daily Op. Serv. 5609, 95 Daily Journal D.A.R. 9492 EDGEMONT COMMUNITY SERVICES DISTRICT, Plaintiff and Appellant, v. CITY OF MORENO VALLEY, Defendant and Appellant.
OPINION

RAMIREZ, Presiding Justice.

Plaintiff Edgemont Community Services District (District) appeals from judgment entered in an action filed against defendant City of Moreno Valley (City) for declaratory relief and an injunction. Under the judgment the District is required to collect from its customers and remit to the City a utility user's tax imposed by the City on the sewer services rendered by the District to its customers, and the District is required to remit those taxes to the City without reimbursement for costs of collection.

The City also has appealed, challenging that portion of the judgment which provides that the City may not require the District to collect the utility user's tax from the District's customers for street lighting services rendered by the District, and that the City may not collect the utility user's tax from the District for its use of electrical energy. In that judgment the court also directed that the District was to recover from the City the sum of $161.86 previously paid by the District as tax on electrical energy used by the District.

Facts

The facts of this case are not in dispute. The District is a community services district organized in 1957 under the Community Services District Law (Gov.Code, § 61000 et seq.) and as such is a political subdivision and public agency of the State of California. The District is located in the County of Riverside; a portion of the District lies within the boundaries of the City of Moreno Valley and a portion within the City of Riverside.

The City is a general law city, incorporated in 1984, which is located in the County of Riverside. A portion, but not all, of the City is located within the boundaries of the District.

The District was formed for the purposes of "1. The collection, treatment or disposal of sewage, waste and storm water of the district and its inhabitants; [p] 2. Public recreation by means of parks, playgrounds, swimming pools or recreation buildings; [p] 3. Street lighting." Since its formation the District has operated a sanitary sewer system for the collection and disposal of sewage and waste water and has provided street lighting to areas within the District. The District uses electrical energy purchased from Southern California Edison Company to provide the street lighting.

The District annually determines the cost of operating and maintaining its sewer system and the cost of furnishing street lighting within the District and, after a public hearing, establishes rates to cover those costs which are to be charged to the properties receiving the services. The rates, charges and taxes which are imposed by the District for its services are submitted annually to the Riverside County Assessor and are then collected on the Riverside County tax roll. The District is required to reimburse the County of Riverside for expenses incurred by the county in collecting those rates, charges and taxes.

In May and June of 1991 the City adopted a series of ordinances which were codified as chapter 3.26 of the City's municipal code. The ordinances imposed a 6 percent utility user's tax on, among others, every person in the City using a sanitary sewer system and every person, other than an electric or gas corporation, using electrical energy in the City.

The ordinance provides that the tax is to be collected from the service user by the person furnishing the service, and that the tax, or an estimated amount of tax based on previous months' billings, is to be remitted to the tax administrator before the last day of each month. As finally amended, the ordinance also provides that "As used in this Section, the term 'using electrical energy' shall not be construed to ... include the use and consumption of such energy by a public utility or governmental agency in the conduct of its business."

On February 10, 1992, the District filed a complaint for declaratory and injunctive relief against the City. The District first contended that it was not a "person" as defined in the ordinances, and that the District was therefore not included within the obligation to pay tax on electricity furnished to it or the obligation to collect tax from other users of utilities. The complaint also sought a declaration by the court that the ordinances enacted by the City were invalid and unenforceable against the District "with respect to any tax on use of electrical energy by the District in street lighting ... and with respect to any provision or requirement that the District collect the city utility user's tax from persons using the District's sanitary sewer system." The District also sought a temporary restraining order, a preliminary injunction and a permanent injunction restraining the City and its agents from enforcing the ordinances against the District.

The complaint went on to ask, in the event the court found that the District was required to collect the utility user's tax on behalf of the City, that the court would order the City to pay all costs incurred by the District in collecting the tax.

The City demurred to the complaint, contending first that there was clear legal authority under which the District could be required to collect the tax on behalf of the City, and rejecting the District's narrow interpretation of the word "person." The City next conceded that the District's obligation to collect the tax was without compensation or reimbursement from the City for the costs of collection, but argued that the same authority which obligated the District to collect the tax should be construed to require the District to pay for that collection. The City then argued that the District had failed to exhaust its administrative remedies.

The District opposed the demurrer stating that at the very least the complaint alleged an actual controversy over whether the ordinance even applied to the District, and that there were no administrative remedies which were a prerequisite to the filing of an action. The court overruled the demurrer and ordered the City to file an answer to the complaint.

The City filed a motion for reconsideration of the order overruling the demurrer noting, among other contentions, that following the hearing on the demurrer the City had amended the definition of "person" in the ordinance to include a "district of any kind." Thus, to the extent the demurrer had been overruled on the ground that the District was not a "person" under the ordinance, that ground had been removed.

In August 1992, the court granted the motion for reconsideration and upon reconsideration again overruled the City's demurrer. In ruling on the motion the court noted that "Defendant [City] has failed to demonstrate that it can tax Plaintiff [District] as a user or consumer of electricity."

The City filed its answer to the complaint and trial was held in April 1993. At the close of the trial the parties were permitted to file additional post-trial briefs, which they did. The court issued a written statement of decision, and judgment was entered on October 22, 1993.

In its judgment the court held that the City could require the District to collect the City's utility user's tax from the District's customers for sewer services provided by the District and remit those taxes to the City without reimbursement for costs of collection. Accordingly, the court directed that the District was to abide by the ordinance imposing the tax as of the date on which the ordinance had been amended to include a community service district as a person to whom the ordinance applied.

The court concluded, however, that the City could not require the District to collect the tax for street lighting services rendered by the District. The court went on to hold that the City could not collect the utility user's tax from the District for the District's use of electrical energy, and directed that the District was to recover from the City the sum of $161.86 which had previously been collected on the District's use of electrical energy.

The District filed an appeal from that portion of the judgment holding that the District could be required to collect the tax on sewer services it provided, without reimbursement for the costs of collecting that tax; and the City filed an appeal from those provisions holding that the District was not required to collect the tax on street lighting services provided by the District, and that the City could not collect the tax from the District itself for its use of electrical energy.

Discussion
I. The District's Appeal
A. Collection of Tax on Sewer Services Provided by the District

On appeal the District first argues that the City, as a general law city, does not have the power to require the District to collect and remit to the City the utility user's tax on the sewer services provided by the District to its customers. We have recently addressed this issue in a decision involving the same ordinance in a challenge brought by a municipal water district which provides water and sewer services to customers who live within the City of Moreno Valley. (Eastern Mun. Water Dist. v. City of Moreno Valley (1994) 31 Cal.App.4th 24, 36 Cal.Rptr.2d 823, review den.) In that case we upheld the trial court's decision to enforce the ordinance against the water district, and we have not been presented here with arguments which persuade us that there is reason for us to reconsider that decision. We...

To continue reading

Request your trial
11 cases
  • White v. State of California
    • United States
    • California Court of Appeals Court of Appeals
    • April 4, 2001
    ...governmental entity." (Id. at p. 208, 84 Cal.Rptr. 291, original italics; see Edgemont Community Service Dist. v. City of Moreno Valley (1995) 36 Cal.App.4th 1157, 1163-1166, 42 Cal.Rptr.2d 823; Atlantic Richfield Co. v. County of Los Angeles (1982) 129 Cal.App.3d 287, 299, 180 Cal. Rptr. 9......
  • Cal. Chamber of Commerce v. State Air Res. Bd.
    • United States
    • California Court of Appeals Court of Appeals
    • April 6, 2017
    ...California (1974) 36 Cal.App.3d 688, 692-696, 111 Cal.Rptr. 750 (Veterans ); see also Edgemont Community Service Dist. v. City of Moreno Valley (1995) 36 Cal.App.4th 1157, 1163-1166, 42 Cal.Rptr.2d 823.) But the mere possibility that the Legislature may err at times in making an expenditure......
  • City of Marina v. The Trustees
    • United States
    • California Court of Appeals Court of Appeals
    • June 17, 2003
    ...improvements could lead to legal challenges to such expenditures as illegal "gifts." (Cf, Edgemont Community Service Dist. v. City of Moreno Valley (1995) 36 Cal.App.4th 1157, 1165, 42 Cal.Rptr.2d 823; White v. State of California (2001) 88 Cal.App.4th 298, 105 Cal.Rptr.2d 714 [taxpayer sue......
  • Jenkins v. T & N PLC
    • United States
    • California Court of Appeals Court of Appeals
    • May 28, 1996
    ...Second of Torts section 402A. (6 Witkin, Summary of Cal. Law (9th ed. 1988) § 1243, p. 678.) Services District v. City of Moreno Valley (1995) 36 Cal.App.4th 1157, 1166, 42 Cal.Rptr.2d 823.) Section 402A of the Restatement Second of Torts provides in pertinent part: "(1) One who sells any p......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT