Running v. City of Azusa
| Decision Date | 03 August 2020 |
| Docket Number | B293638 |
| Court | California Court of Appeals Court of Appeals |
| Parties | PRAXEDES E. RUNNING, individually and as Trustee, etc., Plaintiff and Appellant, v. CITY OF AZUSA et al, Defendants and Respondents |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC623542)
APPEAL from a judgment of the Superior Court of Los Angeles County, Teresa A. Beaudet, Judge. As to the City of Azusa and Azusa Valley Water Company, the judgment is reversed and remanded with directions. As to George Morrow, Chet Anderson, Fran Delach, Canyon Water Company, Andrew M. McIntyre and William L. McIntyre, Jr. the judgment is affirmed.
Marlene Thomason for Plaintiff and Appellant Praxedes E. Running, in her individual capacity and as trustee of the Praxedes E. Running Trust.
Best Best & Krieger, Christopher M. Pisano and Gregg W. Kettles for Defendants and Respondents City of Azusa, Azusa Valley Water Company, George Morrow, Chet Anderson and Fran Delach.
Larson O'Brien, Stephen G. Larson, Paul A. Rigali and Lauren S. Wulfe for Defendants and Respondents Canyon Water Company, William L. McIntyre, Jr. and Andrew M. McIntyre.
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Praxedes E. Running, individually and as trustee of the Praxedes E. Running Trust, appeals the judgment entered after the trial court sustained without leave to amend the demurrer by the City of Azusa, Azusa Valley Water Company (AVWC), George Morrow, Chet Anderson and Fran Delach (collectively the City defendants) to several tort causes of action alleged in Running's third amended complaint and granted the motions for summary judgment by the City defendants and their codefendants Canyon Water Company (Canyon) and Canyon's directors William L. McIntyre, Jr. and Andrew M. McIntyre (collectively Canyon defendants) on all remaining causes of action. We reverse the judgment as to the City and AVWC because they failed to carry their burden on summary judgment as to Running's causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing based on the diversion of irrigation water and her cause of action for financial elder abuse. In all other respects we affirm.
Running filed this action in June 2016 against the City defendants, the Canyon defendants, Covina Irrigation Company (CICO) and San Gabriel River Water Committee (SGRWC), alleging a cause of action for financial elder abuse against all of them and against all but the Canyon defendants causes of action for negligence, breach of contract, breach of the implied covenant of good faith and fair dealing and trespass.1 The gravamen of the complaint was that each defendant, acting in concert with, and/or as the agent of, each other and without notice to Running, diverted water belonging to Running on which she had relied for nearly 60 years to irrigate her seven-acre property in Azusa. As a result, several mature trees on Running's property died; and the land deteriorated.
Running's revocable living trust holds the property involved in this lawsuit. Running is the trustee; but Patricia Beecham, her daughter and court-appointed guardian ad litem, filed this action on Running's behalf because Running suffersfrom advanced Alzheimer's disease and lacks the mental capacity to proceed on her own.
According to the third amended complaint, AVWC is a California corporation operating as a publicly regulated water company. The City is the controlling shareholder of AVWC; the City and AVWC "combine and comingle [sic] their activities such that one acts as the agent and alter ego of the other." The City and AVWC are members of SGRWC, a nonprofit unincorporated association established to manage the water rights, or "flow rights," of users of San Gabriel River water. Since its acquisition of AVWC, the City has paid AVWC's share of SGRWC assessments from City's treasury; and City's officials overlap with AVWC's such that City's treasurer is also the treasurer of AVWC.
Delach is the City of Azusa's city manager and supervised operations of AVWC; Morrow is City's director of utilities; and Anderson is City's assistant director of utilities.
Canyon is a private corporation. William McIntyre, Jr. is the president of Canyon, a director of CICO and a board member of SGRWC. Andrew McIntyre is a principal manager at Canyon and a director of CICO.
As alleged in the third amended complaint, Running and her husband purchased property on North San Gabriel Canyon Road in 1950. They recorded their grant deed in April 1963. A cement-lined canal, part of a system of canals that transported water from the San Gabriel River to the cities of Covina and Azusa, traversed a portion of Running's property and continued through an underground tunnel, part of which ran beneath Running's house. CICO owned the canal; SGRWC members,including CICO and the City, possessed an easement on Running's property to operate and maintain the canal.
For nearly 60 years Running used the water that flowed through the canal to irrigate her property. Running claimed a property right in that water as a successor-in-interest to J.T. and Emma Gordon, the original owners of the property, who had entered into agreements in the late 19th and early 20th centuries that recognized their "old user" rights to a specified amount of water from the San Gabriel River as rights that were appurtenant to, and ran with, the land. Running attached to the third amended complaint three agreements: (1) The Old User Agreement of 1888, (2) the Compromise Agreement of 1889 and (3) the Indenture of 1920. The Indenture, the result of a settlement of a lawsuit between the Gordons and SGRWC, was recorded in 1921 and referred to, and incorporated by reference in, Running's grant deed, which was also attached to the complaint.
In 2009 Running, then 85 years old and suffering from advanced Alzheimer's disease, relocated to Yuba County to be near Beecham. In 2010 the City, AVWC, CICO and SGRWC diverted the water that had flowed through the canal to a newly constructed underground pipeline. While the City, CICO and SCRWC (the complaint failed to distinguish among them) notified other property owners of the plan to divert water from the canal to the underground pipeline, and CICO paid neighboring property owners "to release" them from the maintenance easement, none of the defendants notified Running of the pipeline project, nor did they connect her property to the pipeline. As a result, more than 15 mature trees on Running'sproperty, along with substantial vegetation, died from lack of water.
In 2015 the City posted on Running's property a notice of hearing for abatement of a nuisance—dead trees and brush that riddled the property and made it an eyesore—and warned that failure to remediate the nuisance could result in a lien imposed in the amount of $200,000 for anticipated clean-up costs. Beecham responded to the notice by paying more than $100,000 to clear the property, after which the City cancelled the scheduled hearing. During the cleanup Beecham discovered the diversion of the canal water to the underground pipeline. Beecham also learned the defendants (again failing to distinguish among them) had closed the underground tunnel in 2011 with cement plugs and, when doing so, ignored engineering reports that indicated substantial reinforcement of the structure was required to ensure it remained sound. As a result, the tunnel collapsed and damaged Running's property. Anderson, Delach, and Morrow were alleged to have "approved and ratified" the City's conduct.
In paragraph 60 of the third amended complaint Running alleged all defendants, acting as the agents of one another, failed to maintain the canal in accordance with the terms of the easement granted in the Compromise Agreement and Indenture and wrongfully permitted an uphill property owner to construct a sewer line and septic runoff pipe on her property without her knowledge or consent, all of which "result[ed] in a taking of the equity value" of Running's property.
Running asserted her first cause of action for elder abuse against "all defendants," including the Canyon defendants, alleging generally that all defendants committed the wrongfulconduct alleged in the complaint. As to the McIntyres specifically, the third amended complaint alleged they had abused their roles as CICO directors by using confidential information obtained from CICO to solicit and obtain Running's three CICO shares for themselves and their friends and family members at prices that were detrimental to CICO and to Running as a CICO shareholder.
The City defendants jointly demurred to the third amended complaint. (Prior demurrers had been sustained with leave to amend.) The City argued, as to all tort claims with the exception of elder abuse (to which it did not demur), it was immune from liability under the Government Claims Act. Morrow, Anderson and Delach argued the complaint failed to state a cause of action against them; and AVWC argued the complaint failed to allege any wrongdoing by AVWC.2
The trial court sustained the demurrer without leave to amend. The court ruled the City was immune from tort liability under the Government Claims Act. Citing Running's allegations that AVWC and the City were alter egos, the court ruled AVWC was similarly immune. As to Delach, Morrow and Anderson, the court ruled the allegations in the third amended complaint that these individuals "directed,...
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