Reynolds v. City of Calistoga

• Citation: 223 Cal.App.4th 865,167 Cal.Rptr.3d 591
• Decision Date: 03 February 2014
• Docket Number: A136502
• Court: California Court of Appeals
• Parties: Grant REYNOLDS, Plaintiff and Appellant, v. CITY OF CALISTOGA et al., Defendants and Respondents.

223 Cal.App.4th 865

167 Cal.Rptr.3d 591

Grant REYNOLDS, Plaintiff and Appellant,

v.CITY OF CALISTOGA et al., Defendants and Respondents.

A136502

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

Filed February 3, 2014

See 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 162 et seq.

Superior Court of Napa County, No. 26–56480, Raymond A. Guadagni, Judge.

Grant Reynolds, in pro. per., for Plaintiff and Appellant.

Burke, Williams & Sorensen, Michelle Marchetta Kenyon and Matthew D. Visick, Oakland, for Defendants and Respondents City of Calistoga, Jack Gingles, Michael Dunsford, Chris Canning, Gary Kraus and Karen Slusser.

Minh C. Tran, County Counsel, and Robert C. Martin, Deputy County Counsel for Defendant and Respondent Napa County Flood Protection and Watershed Improvement Authority.

Bruiniers, J.

Grant Reynolds, proceeding pro se, brought a public trust action challenging operation of a reservoir by the City of Calistoga (City) insofar as that operation affected downstream fisheries (the Public Trust Suit). He then initiated a second action, the matter on appeal here, challenging the City's use of Napa County sales tax revenue (the Tax Suit). He purported to bring the Tax Suit in the public interest and sought to make the sales tax revenues available for purposes of settling the Public Trust Suit. Reynolds is neither a resident nor a taxpayer of the City or Napa County, and he asserts no other personal interest in the City's use of the sales tax revenue. The trial court sustained the defendants' demurrer without leave to amend on the ground that Reynolds lacked standing to bring the Tax Suit. We agree that Reynolds lacks standing to pursue this action as a taxpayer, as a citizen suing in the public interest, or as a person suing to protect a public trust. We affirm.

I. Background¹

In May 2010, the Napa County Superior Court found that Reynolds, a resident of San Diego, had standing to bring the Public Trust Suit based on allegations that the City failed to comply with state law requiring it, as the owner/operator of a dam creating the Kimball Reservoir, to allow sufficient water to bypass the dam to support downstream fisheries. (See National Audubon Society v. Superior Court (1983) 33 Cal.3d 419, 189 Cal.Rptr. 346, 658 P.2d 709; Fish & G.Code, § 5937.) In the summer of 2010, fishery and hydrology experts investigated the issue, and unsuccessful settlement talks followed in the fall. In May 2011, Reynolds filed a motion for summary adjudication of the public trust cause of action,² and one week later the City published a draft water bypass plan, which was adopted by the City Council in August 2011. Prior to a scheduled trial date, the court granted the City's motion to dismiss the public trust cause of action as moot in light of the adopted bypass plan and entered judgment for the City. That judgment is the subject of a related appeal ( Reynolds v. City of Calistoga (A134190, app. pending) [consolidated with A135501 on July 3, 2012] ).

Reynolds alleges that he urged the City to use funds raised by a Napa County sales tax (Measure A funds) to restore the Upper Napa River riparian environment as part of a settlement of the Public Trust Suit, but was told that all available funds had been expended on other projects. Reynolds concluded the City had used Measure A funds for a particular purpose (the Mount Washington Water Tank project, hereafter Water Tank Project) not permissible under the terms of the voter initiative that had approved the sales tax.

In June 2011, Reynolds filed the complaint in the Tax Suit challenging alleged misuse of Measure A funds. As subsequently amended, the complaint named several defendants—the City, the City's mayor, four City Council members, and the Napa County Flood Protection and Watershed Improvement Authority (Authority) (collectively Defendants)—and alleged that the Water Tank Project, proposed by the City and approved by the Authority as a project to be funded by Measure A funds, was not an authorized use of such funds, which he contends were to be used exclusively for flood protection and watershed improvement. Reynolds asserted a cause of action for breach of fiduciary duty, which was founded on allegations that “[a]ll property under the care and control of a county is held in trust by the county for the people of the entire state,” and that the Defendants were “trustees of such property thereby owing a fiduciary duty to Plaintiff and all citizens of the State” and more specifically were “trustees of the money collected and deposited [pursuant to Measure A] who owe a fiduciary duty to all citizens (including Plaintiff) to insure that special tax funds are spent lawfully.” He alleged that Defendants violated their fiduciary duty to the people of the state of California by allowing the Water Tank Project to be funded with Measure A funds. Reynolds sought a declaratory judgment that Measure A funds were not properly spent on the Water Tank Project, an order enjoining use of Measure A funds on the project, and an order directing the Defendants to repay Measure A funds already spent on the project. ³

Reynolds alleged standing to bring the action on three grounds: as a payer of sales tax in Napa County; “as a public trust beneficiary interested in having Measure A funding applied to the restoration of the upper Napa River riparian habitat” where Kimball Reservoir is located; and “because the question to be decided by this complaint is one of a public right sought to be enforced by a citizen interested in having the law executed where the duty in question is related to [Measure A].” (Italics added.)

Defendants demurred to the complaint in part on the ground that Reynolds lacked standing. They argued that taxpayer standing could not be based on payment of sales tax; that public trust standing was inapplicable because Reynolds was not asserting a claim of harm to the public trust; and that the allegations did not support the narrow circumstances in which public right standing is recognized. Defendants also asserted laches as a defense.

The court sustained the demurrer without leave to amend, ruling: “Plaintiff does not have standing as a tax payer because sales tax is levied against businesses rather than individuals. He does not have standing under the public trust doctrine because he is not asserting a public trust claim. Lastly, he does not have standing under the public right doctrine because the claim for improper spending of tax revenue within Napa County does not rise to such a level.”

Reynolds filed a motion for reconsideration.⁴ He submitted evidence that he held a lien interest in O'Gorman's real property (a June 2010 deed of trust with assignment of rents that secured a $4 million loan) and argued he therefore had “a real, personal and direct interest in the subject matter of the [first amended complaint].” He also argued that the purpose of Measure A “was to bestow a benefit on all citizens of the State, not merely local residents” because its stated purpose was “ ‘to provide protection, save lives, protect property, restore the Napa River, Napa Creek, and other tributaries, maintain Napa County's economic vitality, and enhance riparian environments,’ ” and “[s]uch waterways are part of the public trust.... Misappropriation of funds intended for the benefit of the public trust gives standing to any citizen to hold the responsible governmental entities and elected officials to account for their malfeasance.”

The trial court denied the motion and entered judgment for the Defendants.⁵ “Plaintiff has not offered any ‘new’ evidence or law that could not have been offered, in the exercise of reasonable diligence, prior to the court issuing its ruling denying the underlying demurrer on the ground plaintiff lacked standing. [¶] Even if plaintiff had satisfied the procedural requirements of [ Code of Civil Procedure section] 1008, the court would nevertheless deny the motion. Having a lien interest on a property located in Napa County does not confer taxpayer standing on plaintiff. Moreover, the gravamen of this complaint is that [D]efendants misspent taxpayer funds. Plaintiff cannot obtain standing simply by characterizing his claims as one[s] for a violation of the public trust doctrine. Plaintiff provides no authority for the extension of the public trust doctrine in the manner he proposes herein. [¶] Lastly, even if the complaint could be considered as including a claim for violation of the public trust for which plaintiff had standing, the claim would nevertheless be barred by laches, as a matter of law, based on plaintiff's unreasonable and prejudicial delay in bringing the claims.” The court entered judgment for the Defendants on July 13, 2012. Reynolds filed a notice of appeal from the judgment.

II. Discussion

This appeal is timely and properly brought as to the February 2012 order sustaining the demurrer (see Hill v. City of Long Beach (1995) 33 Cal.App.4th 1684, 1695, 40 Cal.Rptr.2d 125 [order sustaining demurrer is nonappealable, but may be reviewed on appeal of subsequent order of dismissal or judgment] ) and the July 2012 order denying Reynolds's motion for reconsideration (Code Civ. Proc., § 1008, subd. (g) [denial of motion for reconsideration not appealable but reviewable on timely appeal of the underlying order] ). We review an order sustaining a demurrer de novo. (Ortega v. Contra Costa Community College Dist. (2007) 156 Cal.App.4th 1073, 1080, 67 Cal.Rptr.3d 832.) “When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is...