Mallon v. City of Long Beach
| Decision Date | 01 February 1961 |
| Citation | 11 Cal.Rptr. 15 |
| Parties | Felix MALLON, Plaintiff, v. CITY OF LONG BEACH, a Municipal Corporation; A. L. Parmley, Lyman B. Sutter, Raymond C. Kealer, James R. Seaton, Clarence E. Wagner, Max Livoni, Carl Fletcher, Bazil U. Carlson, and John Doe, as Councilmen of the City of Long Beach; Frank W. Brejcha, as Treasurer of the City of Long Beach; and John R. Mansell, as Auditor of the City of Long Beach, Defendants. Theodore R. GABRIELSON, Petitioner in Certain Pleadings, Appellant, v. CITY OF LONG BEACH, Defendants, and People of the State of California, Plaintiff in Intervention in Certain Pleadings, Respondents. Civ. 24025. |
| Court | California Court of Appeals Court of Appeals |
John W. Preston, John W. Preston, Jr., Los Angeles, S. V. O. Prichard, Hollywood, and Peter E. Giannini, Los Angeles, for appellant.
Gerald Desmond, City Attorney, Long Beach, O'Melveny & Myers, and Pierce Works, Los Angeles, for respondent City of Long Beach.
Stanley Mosk, Atty. Gen., and Howard S. Goldin, Deputy Atty. Gen., for respondent People of the State of Cal.
This is a companion case to Mallon v. City of Long Beach, 11 Cal.Rptr. 8. Reference is made to the opinion in that case for the background facts relative to the Long Beach tidelands trust and the general principles of law applicable to the award of attorney's fees and expenses of suit where a fund has been created or preserved.
Prior to 1951 the Legislature had committed to the trusteeship of the City of Long Beach all tidelands and submerged lands, referred to as tidelands, lying within the municipal limits of the city. (Stats 1911, c. 676, p. 1304; Stats.1925, c. 102, p. 235; Stats.1935, c. 158, p. 793.) In 1951 a statute was enacted releasing from the tidelands trust 50 per cent of all revenue theretofore derived and unexpended and to be derived from oil and gas, and other hydrocarbon substances other than dry gas, and 100 per cent of all revenue theretofore derived and to be derived from dry gas. The 1951 statute did not state to whom the released revenue should pass. Stats.1951, c. 915, p. 2443. Thereafter Long Beach proceeded on the premise the revenues had been released to it free from the terms of the trusts. In April 1953 Long Beach was about to expend some $38,437,000 tidelands trust funds for general municipal purposes. On May 1, 1953 Felix Mallon commenced the above entitled suit, referred to as the Mallon suit, to enjoin Long Beach and its officials from appropriating and expending tidelands trust funds for general municipal purposes.
Shortly after the Mallon suit was filed, Alma Swart, represented by Theodore R. Gabrielson, a member of the State Bar, intervened in the suit. In her petition for leave the intervene, Alma Swart stated 'she is and has been a resident and taxpayer of the said City of Long Beach, a municipal corporation, for more than one year last past, having paid a tax to said city within one year prior to the commencement of the proceeding herein'; she 'has a direct interest in the matter in litigation in the above entitled action as a resident and taxpayer of the City of Long Beach and a property owner therein, said interest in many respects being similar to that of plaintiff, Felix Mallon; that your petitioner has a direct interest in that if money belonging to the city is illegally paid out or expended by its officers, the inevitable result would be a detriment to the taxpayers of said city, with a corresponding increase, either directly or indirectly, of the burden of taxation upon the property owners therein; that the interest of your petitioner is of such a direct and immediate character that petitioner will either gain or lose by the direct legal operation and effect of the judgment herein; that as hereinafter alleged, there are various questions of constitutionality as to the above mentioned act of 1951, and all such questions should be before the court and adjudicated or the taxpayers of said city may find at a later date after moneys have been spent that such expenditures were illegal and improper, and if such money must be paid back or returned, the tax burden would be seriously affected.' This petition was denied. In a second petition for leave to intervene, Alma Swart set forth the same facts as to her status as she had stated in her first petition for leave to intervene. This petition was granted.
The complaint in intervention alleged that Alma Swart was 'a citizen of the United States of America and the State of California, and a resident of the City of Long Beach, and she is and has been a resident and taxpayer within said city having paid a tax thereto within one year prior to the commencement of this proceeding'; by the adoption of the 1951 statute the Legislature 'wrongfully attempts to abdicate the State's trust of the property and funds in which the whole people of the State of California are interested and which are held in trust for all of the people of the State of California.' Substantially the same facts were alleged as in Mallon's complaint except that the Mallon complaint, quoting part of the 1951 statute, omitted the provision releasing 100 per cent of the dry gas. The complaint in intervention quoted the 1951 statute in toto.
The prayer was that Long Beach and its officers be enjoined from appropriating and expending any moneys derived from the production of oil and dry gas from tide and submerged lands 'for the purposes other than the improvement and conduct of a harbor on said lands and the construction, maintenance and operation on said lands of wharves, docks, piers, quays and other utility structures and appliances necessary or convenient for the promotion and accom[m]odation of commerce and navigation or for public park, parkway, highway or playground upon said lands.' There was also a prayer for general relief.
Demurrers were sustained to the complaint of Mallon and to the Swart complaint in intervention without leave. On appeal the judgment was reversed. The Supreme Court held that partial revocation of the trust effected by the 1951 statute necessarily resulted in reversion to the state of moneys released from the trust and Long Beach held such funds on a resulting trust for the state. Mallon v. City of Long Beach, 44 Cal.2d 199, 282 P.2d 481, decided April 5, 1955.
On August 25, 1955 in the course of proceedings on remand the trial court by exparte order granted leave to the People of the State of California and Robert C. Kirkwood, the State Controller, to intervene, and their complaint in intervention was filed on that date. The defendants moved to strike the complaint in intervention filed by the People. On March 1, 1956 the motion was granted.
On September 16, 1955 the attorney general commenced a separate action, 1 called the People's case, to protect the interests of the state in the funds which had been declared released from the trust. A compromise and settlement of that case were negotiated between Long Beach and the state. The Legislature passed an Act which was signed by the governor on April 13, 1956 2 in which it found ans determined, among other things, that: as a result of stipulations between the attorney general and the City of Long Beach, $111,000,000 had been impounded and certain future income would be impounded and held intact by the city pending determination of the litigation; the total amount of revenue secured and held by Long Beach for the benefit of the state free from the public trust on or before January 31, 1956 was $120,000,000; the public interest would be served by prompt release of these funds. The Act authorized the attorney general and Long Beach to enter into stipulations as to the amount, not less than $120,000,000, to be paid to the state. A stipulation as to entry of decree was filed on April 13, 1956, and pursuant thereto on September 11, 1956 a consent judgment was entered ordering Long Beach to account for, pay and deliver to the state controller $120,000,000 and to make monthly transfers of future revenue.
On March 27, 1956, Theodore R. Gabrielson, referred to as petitioner, filed a petition in the Mallon suit for attorney's fees and expenses of suit and for a lien on the trust funds then in possession of Long Beach. The petition averred petitioner had performed services in the Mallon suit. The services were alleged in extenso. It also averred the rendition of services after the going down of the remittitur in cooperating with the state in obtaining the released funds from Long Beach. It averred petitioner had moved to intervene in the Mallon suit 'on behalf of one Alma Swart, a citizen, resident and taxpayer of the City of Long Beach, County of Los Angeles, State of California'; '[i]ntervener Alma Swart contended that the 1951 Act operated as a release of said money to the State of California for the benefit of all the people of the State'; 'petitioner argued in the Mallon Case that the effect of the 1951 Statute was to release said moneys, not to the City of Long Beach but to the beneficiaries of the trust, namely, all the people of the State of California'; 'the Attorney General of California refused to take any action of any type whatsoever on behalf of the State of California'; by reason of petitioner's services trust funds 'have been restored to the trust and/or preserved from misappropriation and waste by the trustee; that a substantial amount of trust funds is in the possession of the City of Long Beach as trustee of said trust'; the court had jurisdiction to allow him reasonable attorney's fees and expenses of suit and 'to impress an equitable lien on said trust funds to secure the payment of such amount as may be awarded him as compensation for his said legal services and for his said expenses of suit in the prosecution of said Mallon Case on behalf of Intervener Swart and other taxpayers of...
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