You are on page 1of 10

2

3
4
5

JAMES L. MARKMAN (Bar No. 43536)


jmarkman@rwglaw.com
B. TILDEN KIM (Bar No. 143937)
tkim@rwglaw.eom
KYLE H. BROCHARD (Bar No. 293369)
kbrochard@rwglaw .com
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071-3101
Telephone: 213.626.8484
Facsnnile: 213.626.0078

ELECTRONICALLY

FILED
Superior Court of California.
County of San Francisco

FEB 21 2014
Clerk of the Court
BY: VANESSA WU
Deputy Clerk

7
8
9
10

MARK FOGELMAN (BarNo. 50510)


mfogelman@friedmanspring.com
RUTH STONER MUZZIN (Bar No. 276394)
rmuzzin@friedmanspring.com
FRIEDMAN & SPRINGWATER LLP
33 New Montgomery Street, Suite 290
San Francisco, CA 94105
Telephone: 415.834.3800

II Attorneys for Defendant and Cross-Complainant


MARINA COAST WATER DISTRICT
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
15 CALIFORNIA-AMERICAN WATER
COMPANY, a California corporation,
16
Plaintiff,
v.
17

Case No. CGC-13-528312


SUPPLEMENTAL BRIEF OF MARINA
COAST WATER DISTRICT IN
SUPPORT OF MOTION FOR
SUMMARY JUDGMENT AND
SUMMARY ADJUDICATION

18 MARINA COAST WATER DISTRICT;


MONTEREY COUNTY WATER
Date: TBD
19 RESOURCES AGENCY; and DOES 2
through 10, inclusive,
Time: TBD
Dept: 304 (Hon. Curtis Karnow)
20
Defendant.
21 1 1 - - - - - - - - - - - - - - - - - 1 Trial Date: (phase one) March 24,2014
Complaint Filed:
October 4, 2012
Cross-Complaint Filed: November 19, 2012
22 MARINA COAST WATER DISTRICT,
23

Cross-Complainant,
V.

[Exempt from filing fees pursuant to Govt.


Code 6103]

24
CALIFORNIA-AMERICAN WATER
25 COMPANY, a California Corporation;
MONTEREY COUNTY WATER
26 RESOURCES AGENCY; and ROES I
through 10, inclusive,
27
Cross-Defendants.
28
SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I I.

INTRODUCTION

Marina Coast Water District ("MCWD") submits this Supplemental Brief,

3 responding to the Court's request for briefing on how best to harmonize or resolve a
4 conflict of the provisions of Agency Act 52-39 ("Section 52-39") and Government Code
5 I 092(b) ("Section 1092(b )"). The 60-day statute oflimitations ("SOL") in Section 52-39
6 applies to the RDP Agreements under well-recognized legal principles and applicable
7 legislative history and for sound policy reasons as stated below.
8

First, as the language of Section 52-39 is clear on its face, and Section I 092(b)

9 contains no language giving it priority over the continuing vitality of other existing SOLs,
I 0 Section 52-39 must be deemed to be controlling. Fundamental principles of statutory
II construction and an analysis oflegislative history compel this conclusion. Section I 092(b)
12 -the later-enacted statute- does not apply its 4-year SOL "notwithstanding any other
13 provision oflaw," despite the fact that Section 52-39 was enacted several decades
14 previously. Thus, general principles of statutory interpretation require Section 52-39 to be
15 deemed controlling. See, e.g., Anson v. County of Merced, 202 Cal.App.3d 1195, 1202
16 (1988) ("Because Government Code Section 945.6 was in existence before Code of Civil
17 Procedure section 340.5, it can be inferred that the Legislature knew of its existence.")
18 (emphasis added); see also Bailey v. Superior Court, 19 Cal. 3d 970, 977 n. I 0 ( 1977)
19 (Court reiterating "presumed knowledge" doctrine: "It is assumed that the Legislature has
20 in mind existing laws when it passes a statute. . . . [T]he Legislature is presumed to have
21 had knowledge of existing domestic judicial decisions and to have enacted and amended
22 statutes in light of such decisions as have a direct bearing upon them.").
23

A "general versus specific" analysis of the two subject SOLs should not be

24 necessary. If, however, this Court applies such an analysis, the Court must conclude that
25 Section 52-39 is the more specific statute. Section 52-39 very narrowly and specifically
26 applies in the event of a 1090 violation only with respect to a contract entered into by
27 MCWRA. It requires any claim that a I 090 violation has voided a MCWRA contract (and
28 only a MCWRA contract) be contained in a lawsuit filed within 60 days from contract
-ISUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I approval. Section 52-39 only applies to the limited number of contracts entered into by
2 MCWRA, and the short SOL affects only one potential remedy for a 1090 violation.
In contrast to those very limited proscribed potential applications of Section 52-39,

4 Section 1092(b) applies to every contract entered into by every public entity operating in
5 this state, from the State of California to the smallest single purpose district, except when
6 another more specific shorter statute of limitations is made applicable by the Legislature,
7 such as Section 52-39. In addition, an analysis of the interests fostered by the two SOLs
8 demonstrates a more focused and specific interest supported by Section 52-39.
9 Government Code sections I 090 and 1092(b) protect the very broad interest of the general
I 0 public in California that public officials should make decisions based on public interests

11 rather than their own financial interests. Without the articulation of a competing, narrower
12 policy interest, Section I 092(b) generally affords a 4-ycar statute of limitations, during
13 which the offender may be prosecuted or sued civilly, barred from holding office, and/or
14 the contract can be sought to be declared void ab initio.
15

In contrast to Section 1092(b), the very specific interest protected by Section 52-39

16 is rapid validation of any contract entered into by MCWRA, many of which assures
17 MCWRA and its contractual partners, finance providers and contractors that the basis for
18 their activities will not vanish before contract completion. This protection effects
19 legislative policy recognizing the severity of water problems in the Monterey area (see Kim
20 Reply Declaration, Ex. PP-RR) by providing those pursuing solutions to such problems
21 with a high and unusual degree of assurance that the underlying contracts may not be
22 attacked on any grounds after 60 days.
23 II.

LEGAL ANALYSIS

24

A.

Legislative History and Intent Support Section 52-39's 60-Day SOL Over Section
1092(b)'s 4-Year SOL Here.

25
26

To date, there is no published opinion analyzing the application of Section I 092(b)

27 versus any other competing SOL. However, as to the Validating Act statutes, in Planning
28 & Conservation League v. Department of Water Resources, 17 Cal. 4th 264 ( 1998), the
-2SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I Court upheld the application of a new short 30-day appeal statute under Code of Civil
2 Procedure ("CCP") Section 870(b) over the 60-day appeal statute under California Rules of
3 Court, rule 2. In doing so, the Court held that the 30-day time to appeal from a judgment
4 under the Validating Act (CCP Section 870(b)) takes precedence over the 60-day time to
5 appeal under Rule 2 when applied to an "appealable order" other than a judgment. The
6 Court concluded the 30-day appeal period applied for two reasons.
7

First, the Court noted that Rule 2 expressly stated "except as provided by" CCP

8 Section 870. This language expressly established the priority of the shorter, older SOL. In
9 contrast, Section I 092(b) docs not state "except as provided by," "notwithstanding any
I 0 other provision of law," or any other language which establishes a priority.

II

Second, the Court analyzed legislative history, noting that Rule 2 was not

12 substantively changed since 1942. In contrast, CCP Section 870(b) had been substantively
13 amended two times: (a) in 1985, to add a 60-day appeal period following a judgment; and
14 (b) in 1994, to change the 60-day appeal period to 30-days. The Court reasoned that the
15 application of the 30-day appeal period was consistent with the quick finality of decisions
16 legislatively implemented by amendments to CCP Section 870.
In summary, the Court in Planning & Conservation League applied an even shorter

17

18 time period than that in issue here because (I) Rule 2 expressly prioritized CCP Section
19 870; and (2) the more recently enacted CCP Section 870 was based on legislative history
20 indicating that the 60- to 30-day reduction in the appeal period was intended to promote
21 finality of decisions. In the instant case, nothing stated in Section I 092(b) or in its
22 legislative history indicates that the 4-year SOL was intended by the Legislature to take
23 precedence over any then-existing shorter SOL. In addition, the legislative history of
24 Section 52-39 emphasizes that establishing a 60-day SOL period was one of the three core
25 legislative purposes for amending MCWRA's enabling act. Kim Reply Dec!., Ex. PP, pp.
26 1-2; QQ, pp. 1-2. Thus, analysis of express legislative intent supports the conclusion that
27 Ill
28 Ill

-3SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT


1 l221-0005\l689346v2.doc

1 Section 52-39 has clear priority over Section 1092(b) in the very limited instances in which
2 the two could be in eonfliet. 1
Many statutes of limitations have "except as provided" language. 2 More

4 importantly, many other SOLs expressly contain "notwithstanding any other provision of
5 law" language. See, e.g., CCP Section 340.9(a), (b) ("Notwithstanding any other provision
6 of law .... , [a]ny action ... commenced prior to, or within one year from, the effective
7 date of this section shall not be barred based upon this limitations period."); CCP Section
8 340.7 ("Notwithstanding Section 335.1, a eivil action .... shall be brought within 15 years
9 .... "); CCP Section 340.3(b)(l) ("Notwithstanding subdivision (a), an action for damages.
10 .. must be commenced within 10 years .... "); CCP Section 341.5 ("Notwithstanding any
II other provision of law, any action or proceeding ... any action shall be commenced within
12 90 days of the effective date of the statute at issue in the action."). Section 1092(b)
13 contains no such language. The Legislature did not afford Section 1092(b) that prioriti.
B.

14

The Legislature Is Presumed to Have Known of and to Have Given Continuing


Effect to the Sh01ier 60-Day SOL Under Section 52-39 When It Amended Section
I 092(b).

15
16

Even assuming that Section 52-39 and Section 1092(b) stand on equal footing,

17 Section 52-39 also takes preeedenee because the Legislature is presumed to have known of
18
19
20
21
22
23
24
25
26
27
28

To hold otherwise, i.e., that Section 1092(b) takes precedent over Section 52-39's 60-day
SOL this Court would "repeal by implication"- a result discouraged by the appellate
courts. See, e.g., Garcia v. McCutchen, 16 Cal. 4th 469, 476 (1997) ("all presumptions are
against repeal by implication.").
2
See, e.g., Gov't Code Section 65009( c)( I) (90-day statute of! imitations applies to
challenges to loeal zoning and planning decisions, "except as provided in subdivision (d)
[one-year SOL if two requirements are met]"; Rules of Court, rule 8.104(a) ("Unless a
statute or rule 8.108 provides otherwise, a notice of appeal must be filed .... 60 days after .
. . 'Notice of Entry' of judgment .... "); CCP Section 340.3(a) states "Unless a longer
period is prescribed for a specific action .... "
3
The application of Section 1090 (b) to a contract otherwise protected by Section 52-39
would eliminate the certainty provided for participants in Monterey water projects and put
those participants in peril of suffering a financial forfeiture for over four years. This result
would be both harsh and absurd. "The intention of the Legislature should not be presumed
to include harsh or absurd results unless the language is so clear as to admit no doubt."
Brown v. Huntington Beach, etc. Sch. Dist., 15 Cal. App.3d 640,646 (1971) (citing
Artukovich v. Astendorf, 21 Cal. 2d 329, 336 (1942)).
-4SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I Section 52-39 when it amended Section 1092(b). Where two SOLs apply to an action and
2 neither is more specific than the other and both stand on equal footing, both will apply so
3 that the statute with the shorter limitation period controls. See, e.g., Anson v. County of
4 Merced, 202 Cal.App.3d 1195 ( 1988).
5

In Anson, plaintiff filed a complaint within the one-year statute of limitations period

6 ofCCP section 340.5 for medical malpractice actions, but after the expiration of the six7 month statutory period of Government Code section 945.6 for filing an action against a
8 public entity after a claim is rejected. The court in Anson found that neither statute was
9 "more right" than the other and that each legislative scheme stood "on equal footing from
I 0 the perspective of the specificity with which the Legislature sought to address the
II respective social ills." ld. at 1199.
12

The court therefore concluded that because the shorter SOL of Government Code

13 section 945.6 was in existence before CCP section 340.5, it could be inferred that "the
14 Legislature knew of its existence" and "because the Legislature did not address the conflict
15 between the two statues," it intended the shorter of the two, CCP section 340.5, "to remain
16 in full force and effect." ld. at 1202. This interpretation, the court reasoned, resulted in
17 "both statutes being given effect," i.e., both applying and the shorter therefore controlling.
18 !d. (emphasis added). Anson is factually analogous to the case at bar and should be held to
19 control here.
20

In addition, a conflict only exists between Sections 52-39 and I 092(b) when one of

21 multiple possible remedies is sought to be applied to a potential I 090 violation. That one
22 remedy is to attempt to invalidate the subject contract or contracts. However, other
23 remedies also exist, i.e., criminal sanctions and a bar from holding public office
24 (Government Code Section I 097), and always would apply to the individual who commits
25 conflicts violations. Here, a remedy being applied in the instant circumstance is the
26 currently-pending criminal prosecution of Stephen Collins. Thus, the two statutes should
27 be considered partially harmonized or reconciled. See, e.g., Strother v. California Coastal
28 Comm ri, 173 Cal.App.4th 873, 881-82 (2009) ("plaintiffs are limited to challenging the
-5SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I Commission's alleged noncompliance with the requirements set forth in [Public Resources
2 Code] section 21080.5." However, any other challenges on "grounds beyond what is
3 specified in section 21080.5, subdivision (g), ... [arc] time-barred.").
4

c.

Assuming arguendo that a "general versus specific" analysis is even necessary (or

Section 52-39's 60-Day SOL Is More Specific Than Section 1092(b)'s 4-Year SOL.

6 proper), Section 52-39 clearly should be considered the more "specific" statute when
7 compared to the 4-year SOL statute under Section 1092(b). Set forth below is a short
8 synopsis of the cases cited by the Court at the February 7, 2014 hearing on this issue:
Garcia v. McCutchen, 16 Cal. 4th 469, 476 (1997) (not a SOL case; involved an

I 0 apparent conflict between CCP Section 575.2(b) (listing penalties for violation of fast track

II rules) and Government Code Section 68609( d) (listing sanctions violating Trial Court
12 Reduction rules)). While the court stated that Government Code Section 68609 was clearly
13 more narrowly circumscribed and specific than CCP Section 575.2(b), it also observed "[i]t
14 is arguable which statute is more specific and which is more general." !d. at 478.
Turner v. Ass

15

nof American Medical Colleges, 193 Cal.App.4th I 047 (2011) (not

16 a SOL case; resolved conflicting prevailing party provisions of the Unruh Civil Rights Act).
17 Sections 52 and 54.3 had conflicted with Section 55 of the Unruh Act. Sections 52 and
18 54.3 were amended in 1992; whereas Section 55 was enacted in 1974. The court assumed
19 that these sections were equally specific, and used the "exception by implication" doctrine
20 to hold that Sections 52 and 54.3 prevailed because those later amendments were on the
21 same subject matter as Section 55.

CD Strother v. California Coastal Comm r(, 173 Cal.App.4th 873 (2009) (competing

22

23 SOL issue). As to any apparent conflict between two CEQA statutes (Section 30801 versus
24
4

Garcia v. McCutchen, 16 Cal. 4th 469,478 (1997) ("The principle that a specific statute
prevails over a general one applies only when the two sections cannot be reconciled. If we
26 can reasonably harmonize two statutes dealing with the same subject, then we must give
27 'concurrent effect' to both even though one is specific and the other general.") (emphasis
added) (citations omitted).
28
25

-6SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT


1 l221-0005\l689346v2.doc

I Section 21080.5 of the Public Resources Code), held that Section 21080.5 was the more
2 specific statute under the particular set of facts.
3

Stone Street Capital, LLC v. California State Lottery Comm rl, 165 Cai.App.4th

4 109 (2008) (not a SOL issue; analyzed a conflict between the Lottery Act (prohibiting
5 assignment oflottery winnings) and the Uniform Commercial Code (allowing assignment)).
6 Held that the Lottery Act was the more specific law because (I) the Legislative history
7 supported the conclusion that it was a very specific, comprehensive Act to cover lottery
8 winnings; and (2) the UCC consists of general uniform commercial rules.
9

iJJMcLaughlin v. State Board ofEducation, 75 Cai.App.4th 196 (1999) (not a SOL

I 0 issue; involved whether Proposition 227 (requiring English only classes for limited
II language proficient students) prevailed over Education Code Section 33050 (allowing
12 waiver of requirements following a public hearing)). Concluded that (I) the two statutes
13 could not be reconciled; (2) Proposition 227 was more specific than Education Code
14 Section 33050 (without analysis); and (3) the failure to amend Education Code 33050 (i.e.,
15 to make it subject to Prop. 227) was due to an oversight by Prop. 227 Initiative's drafters.
16

Bradwell v. Superior Court, !56 Cal.App.4th 265 (2007) (not a SOL issue,

I 7 involved whether a welfare fraud conviction under Welf. & Inst. Code 11483 could be
18 used as a prior theft-related conviction for a Penal Code 666 criminal charge of petty
19 theft.) Court concluded that both sections involved the same subject matter, and that
20 Section 11483 was the more "specific" versus the more "general" Penal Code section 666.
21

In the instant case, the Court should conclude that Section 52-39 is more specific

22 than Section I 092(b) for the following reasons. First, Section 52-39 very narrowly and
23 specifically applies to the application of this remedy in the event of a I 090 violation which
24 occurs only with respect to a contract entered into by MCWRA. It requires that an alleged
25 1090 violation to void a MCWRA contract be prosecuted in a lawsuit filed within 60 days
26 from contract approval. Stated another way, Section 52-39 only applies to the limited
27 number of contracts of one public entity in the state, and, even then, only affects one
28 remedy provided in response to a 1090 violation. Contrast those very rare potential
-7SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
1 l221-0005\l689346v2.doc

I applications of Section 52-39 with the application of Section 1092(b).


2

Second, Section 1092(b) applies to virtually every contract entered into by every

3 public entity operating in this state, from the State of California itself to the smallest single
4 purpose district, except when another more specific shorter statute of limitations is made
5 applicable by the legislature as is the case here. Section 52-39 clearly is the more specific of
6 the two statutes.
7

Third, an analysis of the interests protected by the two statutes also is instructive.

8 Government Code sections 1090 and 1092(b) protect the very broad interest of the general
9 public in California that public officials should make decisions based on public interests
I 0 rather than their own financial interests. In sharp contrast, Section 52-39 seeks promptly to

II protect the validity of only those contracts entered into by MCWRA. This protection

12 effectuates specifically-focused legislative policy recognizing the extreme severity of water


13 supply problems in the Monterey area. It enables those pursuing projects to cope with those
14 severe problems to rely quickly on the statutory assurance that their underlying contracts
15 with MCWRA may not be attacked on any grounds after 60 days. The short SOL provides
16 MCWRA, its contracting partners and its finance providers with the ability to carry out
17 important works for the public benefit without the risk that their contracts will vanish at a
18 later date, perhaps years after execution. Thus, Section 52-39 is the more specific statute as
19 to the interests protected as well as the scope of application. It is entitled to priority in the
20 narrow confines in which it applies.
21 III.

CONCLUSION

22

In conclusion, the Court should grant MCWD's summary judgment motion.

23 Dated: February 21, 2014


24

RICHARDS, WATSON & GERSHON


A Professional Corporation
FRIEDMAN & SPRINGWATER, LLP

25
26
By:

27

JAMES L. MARKMAN, Attorneys for


Defendant and Cross-Complaint MARINA
COAST WATER DISTRICT

28

-8SUPPLEMENTAL BRIEF TN SUPPORT OF MOTION FOR SUMMARY JUDGMENT


1 l221-0005\l689346v2.doc

PROOF OF SERVICE
2

I, Linda I. Pomatto, declare:

I am a resident of the state of California and over the age of eighteen years and not a pmiy
to the within action. My business address is 355 South Grand Avenue, 40th Floor, Los Angeles,
5 California 90071-3101. On February 21,2014, I served the within document(s) described as:

SUPPLEMENTAL BRIEF OF MARINA COAST WATER DISTRICT IN SUPPORT


OF MOTION FOR SUMMARY JUDGMENT AND SUMMARY ADJUDICATION

on the interested parties in this action as stated below:


8

9
I0

II

12
13
14

Robert Moore, Esq.


Andrew Mayer
Allen Matkins
Three Embarcadero Center
San Francisco, CA 94111
Attorneysfor California American Water Company
Marc Wasser, Esq.
Law Offices of Marc Wasser
400 Capitol Mall, Suite 2640
Sacramento, CA 95814
Attorneys for County ofMonterey

15 was served electronically via LexisN ex is File & Serve on the recipients designated on the
Transaction Receipt located on the LexisNexis File & serve website.
16
I declare under penalty ofpetjury under the laws ofthe State of California that the
17 foregoing is true and correct.
Executed on February 21, 2014, at Los Angeles,
19
20

~a.

C I~~ ~~Ji/-

Linda I. Pomatto
(Type or print name)

21
22

23
24
25
26
27
28

-I1122l-0005\1546486vl.doc

(Signature)