Organizacion Comunidad De Alviso v. City of San Jose

• Decision Date: 09 February 2021
• Docket Number: H046458
• Citation: 275 Cal.Rptr.3d 99,60 Cal.App.5th 783
• Court: California Court of Appeals Court of Appeals
• Parties: ORGANIZACION COMUNIDAD DE ALVISO, Plaintiff and Appellant, v. CITY OF SAN JOSE, Defendant and Respondent, Microsoft Corporation et al., Real Parties in Interest and Respondents.

60 Cal.App.5th 783

275 Cal.Rptr.3d 99

ORGANIZACION COMUNIDAD DE ALVISO, Plaintiff and Appellant,

v. CITY OF SAN JOSE, Defendant and Respondent,Microsoft Corporation et al., Real Parties in Interest and Respondents.

H046458

Court of Appeal, Sixth District, California.

Filed February 9, 2021

Mark Raymond Wolfe, M. R. Wolfe & Associates, P. C., San Francisco, for Plaintiff/Appellant.

Margo Laskowska, Office of the City Attorney City of San Jose, for Defendant/Respondent.

Arthur F. Coon Matthew C. Henderson, Lake Forest, Miller, Starr & Regalia, for Real Party in Interest/Respondent.

Grover, J. Mark Espinoza, a member of plaintiff Organizacion Comunidad de Alviso, asked a planner for the City of San Jose to place him on the public notice list for a proposed project which would rezone fallow farmland for light industrial uses. He also twice specifically requested a copy of the notice of determination (NOD) documenting the city's certification of an environmental impact report (EIR) and approval of the project––once after the city council initially approved the project and again after the city council denied a motion for reconsideration and re-approved the project. The city filed two NOD's for the project: the first NOD listed the wrong project applicant and a second NOD correctly listed Microsoft Corporation. Despite Espinoza diligently and repeatedly requesting all notices for the project, the city––inexplicably and in violation of the California Environmental Quality Act (CEQA)¹ ––failed to send Espinoza the legally operative second NOD for the project.

Relying on the first NOD that the city did email to Espinoza, plaintiff named the wrong real party in interest in its initial petition for writ of mandate. Plaintiff did not file an amended petition naming Microsoft until well after the statute of limitations had run. The trial court determined that the initial petition was defective for failing to join Microsoft as a necessary and indispensable party, and it dismissed the CEQA cause of action in the amended petition as untimely. Had the trial court viewed the equities differently in exercising its discretion and determined the CEQA action could continue without Microsoft, the result here might be different. But that is not the case we are asked to review.

Plaintiff argues on appeal that the trial court applied the incorrect statute of limitations, and alternatively that the trial court should have applied either estoppel or the relation back doctrine ( Code Civ. Proc., § 474 ) in light of the city's conduct. We acknowledge that the city violated CEQA by failing to send the second NOD to Espinoza. But the second NOD was properly filed with the county clerk, it provided constructive notice of the correct parties to sue, and plaintiff did not timely amend its petition to name Microsoft. Our close examination of the relevant statutes leads us to the uncomfortable conclusion that dismissal of the CEQA action was not error, and we must affirm the judgment.

I. ADMINISTRATIVE AND TRIAL COURT PROCEEDINGS

Both NOD's describe the project as follows: "237 Industrial Center . The project site, approximately 64.5 acres, is primarily fallow farmland with two single-family houses, a mobile home, and farm-related accessory structures located near the southern portion of the site. The site is currently supported by well water and a septic tank system. The project includes two development options. Option 1 proposes approximately 1.2 million square feet of light industrial development and Option 2 proposes up to a 436,880 square foot data center (49.5 megawatts) with a PG&E substation to provide the electrical needs for the data center on approximately 26.5 acres of the site and approximately 728,000 square feet of light industrial development. The project (both development options) includes rezoning from A(PD) – Planned Development to L1 Light Industrial. Development Option 2 includes a special use permit and a development exception for reduced parking requirements."

Mark Espinoza is a member of plaintiff Organizacion Comunidad de Alviso. Espinoza emailed the city's environmental project manager for the project in September 2017, asking "to be placed on the noticing list and given dates and time[s] of any public hearings" for the project. The project manager responded by email the same day, providing the dates of the planning commission and city council hearings for the project. That same month, Microsoft purchased the property from the original owner (Cilker) and filed a universal planning application with the city to take over as the project applicant.

The city council initially considered the project and the associated EIR at a hearing in October 2017. The city council meeting agenda did not mention Microsoft and incorrectly referenced "Cilker Carl A And Kathleen C Trustee" as "Owners." At the hearing, the mayor stated: "Let's go to the applicant first and then we'll go to the public. Mr. Noble, will you be speaking for Microsoft?" Cilker was referred to at the hearing as the "previous owner." Espinoza attended the hearing and commented on the project. The city council certified the project EIR; approved the project, including a water supply assessment; and imposed a mitigation monitoring and reporting program.

Espinoza emailed the project manager two days after the October hearing, requesting a copy of the NOD. (His first email mistakenly asked for the "NOP," but he almost immediately followed up with an email clarifying that he sought the NOD.) The project manager responded that someone had moved to reconsider the project approval, that the city council would have an additional hearing in December 2017, and that the city was "waiting until after the hearing to consider filing the NOD."

The city council reconsidered and once again approved the project and its environmental document in December 2017. Although plaintiff's opening brief acknowledges that the December 2017 "hearing notice included the annotation ‘Property Owner: Microsoft,’ " the city council resolution approving the project still referred to the Cilkers as "Owners" in the middle of the first paragraph. The first NOD filed by the city with the county Clerk-Recorder incorrectly lists "Erik Schoennauer for Cilker Orchards MGMT Corp" as the project applicant. Espinoza emailed the project manager the day after the December hearing asking for the filed notice (again mistakenly referring to the notice as an "NOP" rather than an NOD). The project manager responded by email and attached the first NOD.

The city filed a second NOD for the project five days later, correctly showing Microsoft Corporation as the project applicant. The city did not rescind the first NOD, and the second NOD does not refer to it in any way.

Despite Espinoza's earlier requests for all project-related notices, the city never sent him the second NOD.

Plaintiff filed its initial petition for writ of mandate within 30 days of the first NOD, alleging violations of CEQA and the Planning and Zoning Law ( Gov. Code, § 65000 et seq. ). It named the city as defendant and respondent, and named as real parties in interest Cilker Orchards Management Corp. and Erik Schoennauer. Cilker's attorney notified plaintiff's counsel by letter dated January 31, 2018 (two weeks after the 30-day statute of limitations expired) that Microsoft had acquired the property and that the city had filed a second NOD.

Plaintiff filed the operative first amended petition for writ of mandate in March 2018, over a month after receiving the letter from Cilker's counsel and more than 70 days after the second NOD was filed with the county clerk. The amended petition alleged the same violations, but added Microsoft Corporation and Greg Deeney as real parties in interest.

Microsoft and Deeney demurred to the CEQA cause of action in the amended petition, arguing that the CEQA action was time-barred because Microsoft and Deeney were not added to the case until after the limitations period had run. The city joined in the demurrer. Cilker and Schoennauer also demurred to the amended petition, on the basis that they were no longer real parties in interest because they had sold the property to Microsoft before the project was approved.

The trial court sustained the Microsoft and Deeney demurrer without leave to amend, finding the initial petition defective for failing to join an indispensable party (Microsoft), and the CEQA cause of action in the amended petition untimely because Microsoft was not sued within 30 days after the second NOD was filed. The trial court rejected plaintiff's estoppel and relation back arguments. The trial court also sustained the Cilker and Schoennauer demurrer without leave to amend as to all causes of action. After plaintiff voluntarily dismissed its Planning and Zoning Law cause of action, the trial court entered a judgment dismissing all parties, from which plaintiff appealed as to the city and Microsoft.

II. DISCUSSION

We review de novo a judgment of dismissal after demurrer. ( Doan v. State Farm General Ins. Co. (2011) 195 Cal.App.4th 1082, 1091, 125 Cal.Rptr.3d 793 ( Doan ).) We will reverse the dismissal if the allegations in the complaint state a cause of action "under any legal theory." ( Ibid. ) We assume the truth of all facts alleged in the complaint except for facts contradicted by judicially noticeable materials. ( Stoney Creek Orchards v. State of California (1970) 12 Cal.App.3d 903, 906, 91 Cal.Rptr. 139 ; SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 82, 76 Cal.Rptr.3d 73.)

When a local public agency approves a project and certifies an EIR, it must "file a notice of determination within five working days after the approval or determination becomes final, with the county clerk of each county in which the project will be located." (§ 21152, subd. (a).) "Among other things, the NOD must identify and briefly describe the project; identify the lead agency and responsible agency (if applicable);...