San Diego Unified Port Dist. v. Superior Court CA4/1 ( 2015 )

Filed 10/27/15 San Diego Unified Port Dist. v. Superior Court CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
SAN DIEGO UNIFIED PORT DISTRICT, D067684
Petitioner, (San Diego County
Super. Ct. No. 37-2013-00040725-
v. CU- CO-CTL)
THE SUPERIOR COURT OF SAN
DIEGO COUNTY,
Respondent;
FIFTH AVENUE LANDING, LLC,
Real Party in Interest.
ORIGINAL PROCEEDING in mandate. Randa Trapp, Judge. Petition denied.
Thomas A. Russell, Simon M. Kann; Liedle, Lounsbery, Larson & Lidl, Matthew
J. Liedle, Erich J. Lidl and Tami G. Vail for Petitioner.
No appearance for Respondent.
Schwartz Semerdjian Ballard & Cauley, Schwartz Semerdjian Cauley & Moot,
Ross J. Schwartz, John S. Moot, Sarah Brite Evans; Higgs, Fletcher & Mack and Victoria
E. Fuller for Real Party in Interest.
San Diego Unified Port District (Port District) issued a coastal development
permit (CDP) to Fifth Avenue Landing, LLC (FAL), a developer of property along the
South Embarcadero San Diego bayfront. The CDP requires FAL to construct a walkway
that is an "extension of the Hilton San Diego Convention Center Hotel's promenade . . . ."
The Port District also leased FAL property at Fifth Avenue and Marina Park Way. The
lease requires FAL to complete construction as defined in the CDP.
A dispute arose between the Port District and FAL about the required width of the
walkway. FAL contends the CDP and lease require a 15-foot-wide walkway. The Port
District contends the walkway must be 35 feet wide. The difference in cost between the
two is about $350,000.
To avoid a possible default under its lease, FAL constructed a 35-foot-walkway
under a reservation of rights, and then sued the Port District for breach of the lease.
The Port District moved for summary judgment on four alternative procedural
grounds: (1) FAL's exclusive remedy to challenge the CDP was a writ petition under
Public Resources Code section 30802; (2) by completing construction, FAL waived its
rights; (3) FAL failed to file a government claim; and (4) the Port District is immune for
its "discretionary" decisions.
The trial court denied the Port District's motion. The Port District filed a petition
for a writ of mandate; this court issued an order to show cause.
We conclude the trial court reached the correct result on the four issues the Port
District raised, although on some issues our reasoning differs from the trial court's
rationale. To guide further proceedings in the trial court, we also address an issue
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presented for the first time in the Port District's reply to FAL's return. There, the Port
District asserts the CDP, lease, and extrinsic evidence establishes as a matter of law FAL
was required to construct a 35-foot-wide walkway.
As we explain, on summary judgment a trial court may properly interpret a written
contract as a matter of law, even when conflicting inferences arise, so long as the
extrinsic evidence itself is undisputed. However, the Port District did not seek summary
judgment on such grounds in the trial court, and we cannot consider the new issue for the
first time here. (Noe v. Superior Court (2015) 237 Cal.App.4th 316, 335-336.)
FACTUAL AND PROCEDURAL BACKGROUND
The Port District is a government entity established by the Legislature to acquire,
construct, and maintain harbor works and improvements, and to promote commerce,
navigation, fisheries and recreation of the tidelands and navigable waters of San Diego
Bay. The Port District has responsibility for approving land use decisions for the land
surrounding San Diego Bay and, as part of this responsibility, the Port District prepared a
port master plan. Persons seeking to develop land under the Port District's authority must
obtain a CDP.
The Port District also owns land on the bayfront. The dispute in this case concerns
one of those parcels, behind the convention center and between the Hilton and Marriott
Hotels. FAL leases this land from the Port District.
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A. FAL's Water Transportation Center Project
In 2006 FAL sought to build a water transportation center, hotel, and public park
on the leased premises. This development was to occur in phases, with the water
transportation center built first and the hotel later.
In 2006 the Port District and FAL amended their lease. This amendment provides
improvements must be built in accordance with plans approved by the Port District. It
also requires any improvements must be "consistent" with those of the adjacent Hilton
Hotel, which was then under construction. The amendment provides FAL shall construct
"Phase One improvements," including "a fifteen (15) foot wide concrete walkway
contiguous to Convention Way and Marina Park Way . . . ."
FAL submitted plans for the water transportation center, which included a
proposed 15-foot-wide walkway. The Port District required FAL to revise the plans,
including designing the walkway to be 35 feet wide to be consistent with the Hilton Hotel
promenade, which is 35 feet wide, and the Port's Master Plan and Urban Design
Guidelines, which also require a minimum 35-foot promenade.
The Port District approved FAL's plans for the water transportation center, subject
to certain conditions. These conditions allowed FAL to construct a temporary 15-foot
asphalt walkway. Another condition specified if FAL did not start constructing the
planned hotel within three years, FAL would be required to construct a permanent 35-
foot-wide walkway:
"4. FAL shall construct a temporary 15ft wide asphalt walkway
along the waterfront as an extension of the promenade from the
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Water Transportation Center to Marina Parkway. FAL shall submit
improvement plans for District review prior to construction.
"5. In the event that FAL has not started construction of the hotel
project within three years by August 7, 2010, FAL must
substantially comply with the District's Port Master Plan and the
South Embarcadero Urban Design and Signage Guidelines and
Amendment. FAL shall construct the promenade a minimum 35 feet
in width per public access easement requirement and Port Master
Plan. The promenade plan shall follow the single uniform design
that is consistent with the approved design of the Hilton Hotel
development. The promenade shall be extended from the Water
Transportation Center to Marina Parkway." (Italics added.)
The temporary asphalt walkway was a concession to FAL. As explained in board
meeting minutes, FAL's later construction of the planned hotel would require the
walkway to be excavated. Allowing FAL to construct a temporary asphalt walkway,
coupled with an obligation to construct a permanent concrete walkway later, would save
FAL money. Condition No. 5 unambiguously states, however, that FAL was required to
build the permanent 35-foot wide concrete promenade if hotel construction did not start
within three years.
B. The CDP
The Port District adopted a resolution to issue a coastal development permit to
FAL. Consistent with the approved plans and board meeting discussion, the resolution
describes the project as including a "15-foot wide waterfront walkway as an extension of
the Hilton San Diego Convention Center Hotel's promenade to the remainder of the South
Embarcadero." The resolution also requires FAL to "replace the temporary asphalt
walkway with a permanent concrete walkway consistent with the approved design of the
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Hilton San Diego Convention Center [H]otel Development by no later than September
30, 2011 . . . ."
The Port District also sent a letter to FAL stating, "The plans you submitted for
approval for the proposed Water Transportation Center and site improvements at Fifth
Avenue Landing have been approved subject to the following conditions:
"4. FAL shall construct a temporary 15ft wide asphalt walkway
along the waterfront as an extension of the promenade form the
Water Transportation Center to Marina Parkway. . . .
"5. In the event that FAL has not started construction of the hotel
project within three years by August 7, 2010, FAL . . . shall
construct the promenade a minimum 35 feet in width per public
access easement requirement and Port Master Plan. The promenade
plan shall follow the single uniform design that is consistent with the
approved design of the Hilton Hotel development."
The Port District issued a CDP for the proposed water transportation center. Page
2 of the CDP provides for a "15-foot wide waterfront walkway as extension of the Hilton
San Diego Convention Center Hotel's promenade to remainder of South Embarcadero."
Page 7 provides, "Permittee shall replace the temporary asphalt walkway with a
permanent concrete walkway consistent with the approved design of the Hilton San
Diego Convention Center Hotel development by no later than September 30, 2011. The
walkway shall extend from the project site, cross Marina Parkway, and connect to the
existing waterfront promenade fronting the Convention Center to create a continuous
connection along the bayfront." Exhibit A to the CDP shows a 15-foot-wide walkway
connecting to a wider 35-foot-wide walkway at the Hilton Hotel site.
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C. The 2010 Lease
In 2010 FAL sold its lease for the hotel site to the San Diego Convention Center.
At about the same time, FAL also entered into a new lease with the Port District (the
Lease). Section 5 of the Lease, entitled "Construction of Improvements" provides in part:
"Lessee shall complete development of the 'Fifth Avenue Landing
Water Transportation Center' Project defined in the Coastal
Development Permit ('CDP') issued by Lessor to Lessee, dated
September 4, 2007 . . . . Should Lessee fail to comply with any
requirement of said CDP shall be considered a Default as per Section
10 of this Lease."
The Lease also provides, "No construction, installation, or removal of any
improvement upon the Leased Premises shall commence without Lessor's prior written
approval. All construction, installations, and removals shall be in accordance with Plans
submitted to and approved in writing by Lessor prior to the commencement of any such
work."
D. FAL Submits an Application for a 15-Foot-Wide Walkway
As required by the Lease, FAL submitted a "Tenant Project Plan Application" to
obtain the Port District's approval to construct the walkway, planned to be 15 feet wide.
The Port District rejected FAL's application, explaining the CDP, master plan, and urban
design guidelines all require a 35-foot-wide walkway:
"[W]e listened to FAL's rationale for submitting a 15 foot walkway
and reviewed the documents handed out from the August 7, 2007
Board Meeting. While we understand there was discussion amongst
the Commissioners regarding the material of the walkway, the width
was not of issue. It was the Board's intent that FAL complete the
promenade connection between the Hilton and Convention Center
either as part of the Spinnaker Hotel project or upon a date certain,
later determined to be September 30, 2011."
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FAL disagreed. FAL considered the 35-foot-wide walkway a condition of
building its once-planned hotel. Having abandoned its plans to build a hotel, FAL
asserted it was not required to build a 35-foot walkway.
E. Litigation
FAL's lawyer wrote to the Port District's attorney, stating the Port District had
placed FAL in the "untenable position" of either constructing the 35-foot-wide walkway
or risking "being in default of the CDP and/or the lease." FAL's attorney stated FAL
would "proceed with construction of the walkway as demanded by the Port but reserves
all rights relative thereto."
FAL sued the Port District for breach of the implied covenant of good faith and
fair dealing and breach of the Lease. FAL alleged the Port District's failure to approve its
tenant project plan application "was an unfair interference with FAL's right to receive the
benefits of the Lease . . . ." FAL alleged the Port District's failure to approve its tenant
project plan application breached section 4 of the Lease, "related to approval of plans and
specifications." FAL also alleged the Port District breached a Lease provision requiring
mediation as "a precondition to the initiation of any legal action or proceeding."
F. Motion for Summary Judgment
The Port District filed a motion for summary judgment or, in the alternative,
summary adjudication. Characterizing FAL's action as an attack on the CDP's
construction conditions, the Port District asserted summary judgment should be entered
on any of the following four procedural grounds:
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1. "FAL failed to challenge the applicable Coastal Development Permit pursuant to
the Public Resources Code . . . ."
2. "[FAL] waived its right to challenge the CDP by completing construction of the
disputed improvement."
3. "The District has immunity against FAL's complaint."
4. "FAL failed to comply with notice requirements under the Government Claims
Act . . . ."
Opposing the motion, FAL explained it is not challenging the CDP or seeking to
have the CDP's conditions invalidated. Rather, FAL asserted its lawsuit challenged the
Port District's conduct—as Lessor—in disapproving FAL's tenant application to build a
15-foot-wide walkway.
At the hearing, the Port District's attorney acknowledged there was a factual
dispute whether FAL was required to build a 15- or 35-foot-wide walkway. However,
counsel asserted that factual dispute was not material to the procedural bars raised in the
motion:
"I want to make sure that it's absolutely clear that even though
there's a dispute, as you identified, Your Honor, regarding the
walkway, and I don't believe or we don't believe that that's a material
fact, yes, there is a dispute. But it's not a material fact. [¶] . . . [¶] So
the fact that there is this dispute is really not a material dispute. It's
just a matter of how they should have proceeded to resolve that
dispute. And that's really the point of the motion that we've made.
[¶] And how they should have proceeded, Your Honor, is pursuant
to the Public Resources Code. . . .[¶] . . . [¶] So the fact that there is a
dispute regarding the size of the promenade, Your Honor, is not a
material fact preventing this Court from granting the port's motion
for summary adjudication based on the fact that they failed to file a
writ."
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The trial court denied the Port District's motion. The court determined FAL was
not challenging the CDP, but rather was suing under the Lease. The court found a triable
issue whether FAL was required to construct a 15- or a 35-foot-wide walkway. In light
of that factual dispute, the trial court stated it could not grant summary judgment on
discretionary immunity. Citing Government Code section 66020, the trial court found
there was a triable issue whether FAL waived its rights by constructing the 35-foot-wide
walkway. The trial court also found there was a "triable issue" whether a series of letters
by FAL's attorneys constituted either a claim or a "claim as presented."
G. Writ Petition
The Port District's writ petition reiterates the same arguments it made in the trial
court. The Port District acknowledges it sought summary judgment "on purely
procedural grounds."
DISCUSSION
I. STANDARD OF REVIEW
To prevail on a motion for summary judgment, a defendant must show that one or
more elements of the plaintiff's cause of action cannot be established or that there is a
complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)
Because a motion for summary judgment raises only questions of law, we independently
review the parties' supporting and opposing papers and apply the same standard as the
trial court to determine whether a triable issue of material fact exists. (City of San Diego
v. U.S. Gypsum Co. (1994) 30 Cal.App.4th 575, 582.) "This review consists of 'an
independent assessment of the correctness of the trial court's ruling, [in which we]
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apply[] the same legal standard as the trial court in determining whether there are any
genuine issues of material fact or whether the moving party is entitled to judgment as a
matter of law.' [Citation.] We need not defer to the trial court and are not bound by the
reasons in its summary judgment ruling; we review the ruling of the trial court, not its
rationale." (Law Offices of Dixon R. Howell v. Valley (2005) 129 Cal.App.4th 1076,
1092.)
II. THE TRIAL COURT CORRECTLY DETERMINED FAL'S ACTION IS FOR BREACH
OF LEASE AND NOT A CHALLENGE TO THE CDP
Under Public Resources Code section 30802, a writ of administrative mandamus is
a landowner's exclusive remedy for challenging the validity of conditions in a coastal
development permit. (City of Berkeley v. 1080 Delaware, LLC (2015) 234 Cal.App.4th
1144, 1150.) Failing to timely pursue that remedy bars the permit holder's challenge to
the validity of the coastal development permit. (Ibid.)
FAL contends a writ of mandamus was not its exclusive remedy here because
FAL is challenging the Port District's conduct as lessor—not the CDP or the Port
District's distinct role as the public entity issuing the CDP.
We agree with FAL that its lawsuit sounds in contract and Public Resources Code
section 30802 does not apply. The Lease expressly incorporates the CDP by reference.
For example, paragraph 5 of the Lease requires FAL to "complete development" of the
project as "defined in the [CDP] issued by Lessor to Lessee." Moreover, the Lease
makes any failure to comply with the CDP a "[d]efault" under the Lease Thus, whatever
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obligations the CDP imposes on FAL, once the parties entered into the Lease, those
obligations also became contractual duties under the Lease.
Under paragraph 4(b) of the Lease, FAL cannot commence construction of "any
improvement upon the Leased Premises" without the Port District's "prior written
approval" and all such work "shall be in accordance with all applicable laws, regulations,
ordinances, and codes." FAL's lawsuit seeks to enforce these contractual obligations by
alleging: (1) FAL submitted a tenant project plan application to obtain the Port District's
approval, as lessor, to construct a 15-foot-wide walkway, as required under paragraph
4(b) of the Lease; and (2) the Port District breached its lease obligations by refusing to
approve such construction.
The trial court correctly understood FAL is not challenging the validity of the
CDP or any of its conditions. The CDP specifies what FAL has to build, but the Lease
incorporates those specifications by reference and contains the Port District's obligation
as Lessor to allow and approve such construction.
The lessor-lessee relationship between the Port District and FAL distinguishes this
case from those cited by the Port District where courts hold a writ of mandamus is the
exclusive remedy for challenging a permit condition. (E.g., City of Berkeley v. 1080
Delaware, LLC, supra, 234 Cal.App.4th 1144 [challenge to validity of permit condition
restricting residential housing]; Pfeiffer v. City of La Mesa (1977) 69 Cal.App.3d 74[challenge to validity of permit condition requiring granting of an easement and storm
drain], modified by statute as stated in Sterling Park, L.P. v. City of Palo Alto (2013) 57
Cal.4th 1193, 1200; Patrick Media Group, Inc. v. California Coastal Com. (1992) 9
12
Cal.App.4th 592 [challenge to validity of permit condition requiring off-site advertising
signs to be removed]; City of Santee v. Superior Court (1991) 228 Cal.App.3d 713[challenge to conditions on building permit].)
Even if FAL did waive or forfeit any challenge to the CDP by not filing a
mandamus petition, FAL could still prevail on its breach of contract theory if the CDP,
properly interpreted, only requires a 15-foot-wide walkway. Thus, FAL is suing under
the lease, and not to invalidate the CDP, and therefore the exclusive remedy provision in
Public Resources Code section 30802 does not apply.
III. NO MANDAMUS, NO IMMUNITY, NO WAIVER
Having determined FAL's lawsuit is what it claims to be—an action for breach of
contract—three of the four issues in the Port District's motion are easily resolved.
A. No Exclusive Remedy Under Public Resources Code Section 30802
The trial court correctly determined the exclusive remedy (writ of mandate)
specified in Public Resources Code section 30802 does not apply here because FAL is
not seeking judicial review of the validity of the CDP's conditions.
B. No Immunity
The trial court also correctly determined the immunity issue, although we reach
that result for other reasons. The trial court stated, "Because there is a triable issue as to
what width of walkway was required, the court cannot determine at this point whether
defendant's refusal to approve a 15 foot walkway and require a 35 foot walkway was an
exercise of discretion entitling it to immunity." However, having already determined
FAL's action is one for breach of contract, a more direct answer is governmental
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immunity does not protect public entities from breach of contract. (Gov. Code, § 814;
Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145, 153.)
C. No Waiver
Generally, if a property owner complies with an allegedly unreasonable or invalid
permit condition, the owner waives his or her right to challenge it. (Hensler v. City of
Glendale (1994) 8 Cal.4th 1, 19, fn. 9; Pfeiffer v. City of La Mesa, supra, 69 Cal.App.3d
at p. 78.) Government Code section 66020 contains an exception to this waiver rule,
allowing a developer to comply with a condition under protest and proceed with
development while simultaneously challenging the condition. But this exception applies
only to conditions imposed by local agencies that "divest the developer of money or a
possessory interest in property." (Sterling Park, L.P. v. City of Palo Alto, supra, 57
Cal.4th at p. 1207.) It does not apply to conditions imposed by agencies or conditions
that restrict "the manner in which a developer may use its property." (Ibid.) A second
exception applies when an agency imposes new conditions on a permit for a later phase
of a project already underway. (McLain Western #1 v. County of San Diego (1983) 146
Cal.App.3d 772, 777.)
The trial court rejected the Port District's waiver arguments. Citing Government
Code section 66020, the trial court determined there was a "triable issue" whether
constructing a 35-foot-wide walkway waived FAL's rights.
The trial court reached the correct result, although our reasoning differs. Having
determined this is a breach of contract case, the relevant standard for determining waiver
is found in the Lease itself.
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Paragraph 31 of the Lease is entitled, "Waiver." It provides in part: "[F]ailure on
the part of either party to require or exact the other's full and complete compliance with
any of the Lease covenants, conditions, or agreements shall not be, nor be construed as in
any manner changing the terms, or preventing the enforcement in full, of the provisions
hereof." Under this provision, FAL's failure to require the Port District's "full and
complete compliance" with what FAL construed to be its obligation to construct a 15-
foot-wide walkway "shall not be, nor be construed as" any waiver.
IV. CLAIMS ACT COMPLIANCE
Government Code section 900 et seq.,1 the government Claims Act, establishes
certain conditions precedent to the filing of a lawsuit against a public entity. The Claims
Act applies to tort and contract actions. (City of Stockton v. Superior Court (2007) 42
Cal.4th 730.) Failing to timely present a proper claim for money or damages is fatal to a
plaintiff's lawsuit against a public entity. (DiCampli–Mintz v. County of Santa Clara
(2012) 55 Cal.4th 983, 990.)
A. Requirements for a Valid Claim
A claim is a notice that complies with sections 910 and 910.2. (Phillips v. Desert
Hospital Dist. (1989) 49 Cal.3d 699, 707.) Section 910 requires a claim to set forth all of
the following: (1) "[t]he name and post office address of the claimant"; (2) "[t]he post
office address to which the person presenting the claim desires notices to be sent"; (3)
1 Hereafter, all statutory references are to the Government Code. When referring to
statutory subparts in that code, the word "subdivision" is omitted.
15
"[t]he date, place and other circumstances of the occurrence or transaction which gives
rise to the claim asserted"; (4) "[a] general description of the indebtedness, obligation,
injury, damage or loss incurred so far as it may be known at the time of presentation of
the claim"; (5) "[t]he name or names of the public employee or employees causing the
injury, damage, or loss, if known"; and (6) "[t]he amount claimed if it totals less than
[$10,000] as of the date of presentation of the claim, including the estimated amount of
any prospective injury, damage, or loss, insofar as it may be known at the time of the
presentation of the claim, together with the basis of computation of the amount claimed.
If the amount claimed exceeds [$10,000], no dollar amount shall be included in the claim.
However, [the claimant must] indicate whether the claim would be a limited civil case."
The claimant or some person on the claimant's behalf must sign the claim. (§ 910.2.)
The purpose of requiring a plaintiff to submit a pre-lawsuit claim to the public
entity is not to prevent surprise, but to give "the entity an opportunity to promptly remedy
the condition giving rise to the injury, thus minimizing the risk of similar harm to others";
permit "the public entity to investigate while tangible evidence is still available,
memories are fresh, and witnesses can be located"; and permit "early assessment by the
public entity, allow[ing] its governing board to settle meritorious disputes without
incurring the added cost of litigation, and giv[ing] it time to engage in appropriate
budgetary planning." (Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201, 213.)
"Where a claimant has attempted to comply with the claim requirements but the
claim is deficient in some way, the doctrine of substantial compliance may validate the
claim 'if it substantially complies with all of the statutory requirements . . . even though it
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is technically deficient in one or more particulars.'" (Connelly v. County of Fresno
(2006) 146 Cal.App.4th 29, 38.) Substantial compliance is at least some compliance with
each of the statutory requirements. (Del Real v. City of Riverside (2002) 95 Cal.App.4th
761, 769.) However, "[t]he doctrine of substantial compliance . . . 'cannot cure [a] total
omission of an essential element from the claim or remedy a plaintiff's failure to comply
meaningfully with the statute.'" (Connelly, at p. 38.)
B. Requirements for a Claim as Presented
A "claim as presented" is a claim that is defective in that it fails to comply
substantially with sections 910 and 910.2, but nonetheless puts the public entity on notice
the claimant is attempting to file a valid claim and litigation will result if it is not
resolved. (Alliance Financial v. City and County of San Francisco (1998) 64
Cal.App.4th 635, 643.) "[A] document constitutes a 'claim as presented' . . . if it discloses
the existence of a' claim' which, if not satisfactorily resolved, will result in a lawsuit
against the entity." (Phillips v. Desert Hospital Dist., supra, 49 Cal.3d at p. 709.)
A claim as presented triggers a duty on the part of the governmental entity to
notify the claimant of defects in the claim. A failure to notify the claimant of deficiencies
waives any defense as to its sufficiency. (Phillips v. Desert Hospital Dist., supra, 49
Cal.3d at p. 709; §§ 910.8, 911.)
C. FAL's Lawyer's Letter Is a Claim as Presented
The trial court determined three letters by FAL and/or its attorneys constituted
either a claim or a claim as presented. We agree the trial court correctly denied summary
judgment on this ground, although our reasoning differs. Claims compliance cannot be
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based on piecing together a series of letters. Dilts v. Cantua Elementary School Dist.
(1987) 189 Cal.App.3d 27 and Schaefer Dixon Associates v. Santa Ana Watershed
Project Authority (1996) 48 Cal.App.4th 524 hold that substantial compliance with the
Claims Act requires a single document. A claim cannot be cobbled together from
multiple letters:
"If a series of letters received over a period of time could
collectively constitute a claim, it would be impossible to ascertain
whether a claim had been presented within the 100 days or one-year
time limitation as specified in section 911.2. The act provides that if
a claimant files a timely claim, the public entity has 45 days within
which to grant or deny the claim. (§ 911.6.) If the claim is denied
by way of written notice, the claimant has six months within which
to file a court action. (§ 913.) If the claim is not acted upon by the
public agency within 45 days, it is deemed denied by operation of
law and the claimant has 2 years within which to file a court action.
(§ 945.6.) It would be difficult for the public entity to identify
whether a particular letter were a claim and which letter triggered its
obligation to accept or deny a claim if a series of correspondence
could be considered collectively to constitute a claim. If an agency
was unable to determine whether a claim had been filed or when the
claim had been filed, it would be equally difficult for the court to
determine which statute of limitation applied or when the statute of
limitation began to run.
"The procedures prescribed by the Tort Claims Act envisioned the
filing of a single claim with the public entity so that the public entity
may investigate the claim, consider settlement and formally approve
or reject a claim. The letters sent to the district on behalf of Dilts by
his attorney do not constitute a claim within the meaning of the Tort
Claims Act, and the doctrine of substantial compliance cannot be
applied." (Dilts, supra, 189 Cal.App.3d at pp. 35-36.)
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Apparently recognizing this rule, FAL focused the trial court exclusively on the
June 6, 2011 letter its lawyer sent to the Port District's attorney.2 That letter states in
part:
"At this point in time, the Port has put Fifth Avenue Landing, LLC
in an untenable position. The Port has made it clear that it will not
approve the plans FAL submitted for a 15-foot walkway and FAL is
now in a position where it needs to proceed with the construction of
a 35-foot walkway or be at risk of being in default of the CDP and/or
the lease. [¶] With the foregoing in mind and subject to the Port's
approval of FAL's plans for the 35-foot walkway and FAL's receipt
of an Entry Permit from the San Diego Convention Center, this is
formal notice to the Port that FAL will proceed with construction of
the walkway as demanded by the Port but reserves all rights relative
thereto. [¶] If the Port remains unwilling to mediate this matter,
FAL has instructed me to file action in court for declaratory relief
and damages. If the Port is willing to pursue mediation, then I need
to hear back from you before June 16. Otherwise, action will be
filed without further notice." (Italics added.)
To constitute a claim, the June 6, 2011 letter must substantially comply with all of
the statutory requirements. Substantial compliance is at least some compliance with each
of the statutory requirements. (Del Real v. City of Riverside, supra, 95 Cal.App.4th at p.
769.) "The doctrine of substantial compliance, however, 'cannot cure total omission of an
essential element from the claim . . . .'" (Connelly v. County of Fresno, supra, 146
Cal.App.4th at p. 38.)
The June 6, 2011 letter from FAL's lawyer is not a government claim because it
does not state: (1) the name and post office address of the claimant; (2) the date, place
and other circumstances of the occurrence or transaction which gives rise to the claim
2 FAL's return filed in this court erroneously asserts its "series of letters" constitute
the requisite claim.
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asserted; (3) the name or names of the public employee or employees causing the injury,
damage, or loss, if known; and (4) whether the claim would be a limited civil case.
Where, as here, the claim does not provide each of the categories of information required
by section 910, "there is an entire failure on the part of the plaintiff to comply with one of
the mandates of the statute. Substantial compliance cannot be predicated on no
compliance." (Hall v. Los Angeles (1941) 19 Cal.2d 198, 202.)
Accordingly, the trial court was incorrect in stating there was a "triable issue" that
FAL submitted a valid claim. Nevertheless, the ruling denying summary judgment was
correct because as the trial court stated in the alternative, FAL's letter is a "claim as
presented."
In Green v. State Center Community College Dist. (1995) 34 Cal.App.4th 1348,
the appellate court outlined the "legal standard to apply in determining whether
correspondence" is a claim as presented:
"[T]o be sufficient to constitute a trigger-claim under section 910.8,
the content of the correspondence to the recipient entity must at least
be of such nature as to make it readily discernible by the entity that
the intended purpose thereof is to convey the assertion of a
compensable claim against the entity which, if not otherwise
satisfied, will result in litigation." (Id. at p. 1358.)
For example, in Phillips v. Desert Hospital Dist., supra, 49 Cal.3d 699, an
attorney's letter stated, "This letter will serve to advise you that this office intends to
commence an action against Desert Hospital" and stated the date of the alleged medical
negligence. (Id. at p. 703.) The Court held this letter was a claim as presented because it
disclosed the plaintiffs had a claim which, if not satisfactorily resolved, would result in
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their filing a lawsuit. (Id. at p. 710.) In contrast, in Green v. State Center Community
College Dist., supra, 34 Cal.App.4th 1348, the letter referred to an accident involving the
plaintiff, recited the attorney had been retained to represent the plaintiff, and directed the
putative defendant to send all further correspondence relating to the matter to the
attorney. The Court of Appeal in Green held this did not constitute a claim as presented
because "there is nothing in counsel's . . . letter to the College remotely implying that a
demand was being made . . . or that counsel would initiate litigation if appellant's
demand was not satisfied." (Id. at p. 1359.)
Here, FAL's attorney's June 6, 2011 letter is a claim as presented because it put the
Port District on notice of FAL's assertion of a compensable claim for the cost of
constructing a 35-foot-wide walkway and that FAL intended to pursue the matter by
litigation if necessary. ("If the Port is willing to pursue mediation, then I need to hear
back from you before June 16. Otherwise, action will be filed without further notice.")
FAL's claim as presented triggered the Port District's obligation to notify FAL of
defects or omissions in the claim. A failure to do so waives any defense as to its
sufficiency. (Alliance Financial v. City and County of San Francisco, supra, 64
Cal.App.4th at p. 643.) Here, it is undisputed that the Port District did not notify FAL of
any such defects or omissions. Therefore, the trial court correctly rejected the Port
District's contention that FAL's action was barred for Claims Act noncompliance.
V. CONTRACT INTERPRETATION ISSUES
The Lease requires FAL to complete development as "defined in the Coastal
Development Permit." With respect to the walkway width, the CDP itself is ambiguous
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and seemingly contradictory. It first specifies a "15-foot wide waterfront walkway," but
also requires FAL to "adhere strictly to the current plans for the project as approved by
the District" and to build a "permanent concrete walkway consistent with the approved
design of the Hilton San Diego Convention Center Hotel." Both of these requirements
dictate a 35-foot walkway. The Lease, which incorporates the CDP by reference,
necessarily contains the same ambiguity.
In the trial court, the parties and the court seem to have been operating under the
assumption that when language in a written instrument is ambiguous and reasonably
susceptible to two different interpretations, that conflict necessarily raises a triable issue
that cannot be resolved on summary judgment.
However, taking a distinctly different approach in its reply brief filed here, the
Port District contends "no genuine issue of material fact exists that the permanent
concrete walkway was to be 35 feet wide." The Port District asserts, "There is no
evidence the 35-foot promenade requirement was ever 'contingent' on the construction of
a hotel." The Port District states that based on all the evidence, "FAL cannot show that a
triable issue existed concerning the CDP's 35-foot wide requirement."
We asked the parties to address this issue in supplemental letter briefs. Both sides
agree on the legal standard: The appellate court may consider a newly-raised issue when
it "involves purely a legal question which rests on an uncontroverted record which could
not have been altered by the presentation of additional evidence." (In re Marriage of
Broderick (1989) 209 Cal.App.3d 489, 501.) However, "[e]ven under such
circumstances, we will not consider the issue unless 'the opposing party has notice of and
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an opportunity to respond to that ground.'" (Noe v. Superior Court (2015) 237
Cal.App.4th 316, 335-336.)
In its supplemental brief, the Port District contends this Court should determine as
a matter of law that FAL was required to construct a 35-foot-wide walkway because
"FAL also fully put forth all its facts on this width issue" in the trial court. The Port
District asserts "FAL had notice of the supposed width issue" because FAL addressed the
issue in its "opposition and attempted to show a contested issue of fact." The Port District
concludes, "Even though summary judgment was sought by the Port District on
procedural grounds, the factual issue regarding the width requirement of the walkway
was raised below in the opposition to the motion for summary judgment filed by FAL."
(Italics omitted.)
In sharp contrast, FAL contends the factual record would be significantly different
if the Port District had sought summary judgment on the merits. FAL's supplemental
brief states, "Had the Port District adequately raised the issue of whether, as a matter of
law, the permit required a width of 15 or 35 feet in the trial court, Fifth Avenue would
have submitted additional evidence that is critical to its position." Akin to an offer of
proof, FAL's supplemental brief asserts that certain testimony and documentary evidence
would have been submitted in the trial court if the Port District had sought summary
judgment on the merits. Appellate counsel for FAL represents such evidence includes
"evidence that the Port District itself requested the width of 15 feet for the walkway . . . ."
We decline the Port District's invitation to direct entry of summary judgment on
the merits. The Port District's notice of motion did not seek summary judgment on this
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ground. Moreover, FAL had no notice of this merits issue where it counted—in the trial
court—where FAL represents it could have responded with evidence to meet it. Given
FAL's offer of proof in its supplemental brief, obvious considerations of fairness prevent
this Court from deciding a dispositive motion on an issue raised for the first time in a
reply brief filed in the appellate court. (SCI California Funeral Services, Inc. v. Five
Bridges Foundation (2012) 203 Cal.App.4th 549, 573, fn. 18.)
Nevertheless, because this issue may arise again, and to guide the parties and the
trial court in further proceedings, we note that interpretation of a written contract is a
question of law for the court unless that interpretation depends upon resolving a conflict
in properly admitted extrinsic evidence. (City of Hope National Medical Center v.
Genetech, Inc. (2008) 43 Cal.4th 375, 395.) Extrinsic evidence includes "objective
matters as the surrounding circumstances under which the parties negotiated or entered
into the contract; the object, nature and subject matter of the contract; and the subsequent
conduct of the parties." (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.)
When the extrinsic evidence itself is uncontradicted—that is, when the evidentiary
facts themselves are not in conflict, but the parties only disagree about the inferences to
be drawn from those undisputed facts—interpretation of the agreement is a question of
law for the court, suitable for resolution on summary judgment. (Wolf v. Walt Disney
Pictures & Television (2008) 162 Cal.App.4th 1107, 1126-1127 ["When there is no
material conflict in the extrinsic evidence, the trial court interprets the contract as a
matter of law."]; Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th 370, 390
["Even where uncontroverted evidence allows for conflicting inferences to be drawn, our
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Supreme Court treats the interpretation of the written contract as solely a judicial
function."]; Sprinkles v. Associated Indemnity Corp. (2010) 188 Cal.App.4th 69, 76
["When the facts are undisputed . . . the interpretation of a contract, including the
resolution of any ambiguity, is a question of law."]; Medical Operations Management,
Inc. v. National Health Laboratories (1986) 176 Cal.App.3d 886, 892 [interpretation is a
question of law for the court because "although the parties hotly dispute the inferences to
be drawn from this extrinsic evidence, the evidentiary facts themselves are not in
conflict"].)
This means that if the historical facts are undisputed but give rise to conflicting
inferences, the question of what inferences to draw from the facts for purposes of contract
interpretation is a question of law for the trial court to decide. (City of El Cajon v. El
Cajon Police Officers' Assn. (1996) 49 Cal.App.4th 64, 71.)
On this record, there is no material conflict in the relevant extrinsic evidence. The
historical facts are undisputed. The parties dispute only the inferences to be drawn from
those undisputed facts. Some of these undisputed material facts, summarized below, are
compelling evidence that the Lease requires FAL to construct a 35-foot-wide walkway:
In June 2006 the Port District reviewed the water transportation
center plans and required a 35-foot-wide walkway in accordance
with "the single uniform design of the Hilton Plan."
In December 2006 the Port District delivered Hilton Hotel plans to
FAL.
In July 2007 the Port District conditionally approved plans for the
water transportation center. Condition 4 stated, "FAL shall construct
a temporary 15ft wide asphalt walkway . . . ." Condition 5, printed
immediately below condition 4 states, "In the event that FAL has not
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started construction of the hotel project within three years by August
7, 2010, FAL . . . shall construct the promenade a minimum 35 feet
in width . . . . The promenade shall follow the single uniform design
that is consistent with the approved design of the Hilton Hotel
development."
An August 2007 resolution by the Port District states FAL "shall
replace the temporary asphalt walkway with a permanent concrete
walkway consistent with the approved design of the Hilton San
Diego Convention Center hotel development no later than
September 30, 2011 . . . ."
In August 2007 the Port District sent FAL correspondence to
confirm the conditions of approval concerning the proposed water
transportation center, stating in part, "FAL shall construct a
temporary 15ft wide asphalt walkway . . . . In the event that [] FAL
has not started construction of the hotel project within three years by
August 7, 2010, FAL . . . shall construct the Promenade a minimum
35 feet in width per public access easement requirement and Port
Master Plan."
Interpreting the Lease in light of these historical facts, and any other undisputed
extrinsic evidence properly received into evidence, is a judicial function. So long as the
issue remains one of resolving an ambiguity based on undisputed extrinsic evidence, the
trial court should decide the issue as a matter of law. The parties may hotly dispute the
inferences to be drawn from undisputed historical facts, but that does not change the issue
of contract interpretation into a question of fact for a jury. (Medical Operations
Management, Inc. v. National Health Laboratories, supra, 176 Cal.App.3d at p. 892.)
DISPOSITION
The petition is denied. Each party to bear its own costs.
To avoid any misunderstanding of the law of the case effect of this opinion: None
of these proceedings, whether in the trial court or in this Court, preclude the Port District
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from bringing a motion for summary judgment or some other dispositive motion in the
trial court to address whether the Lease requires the subject walkway to be 15 or 35 feet
wide. We express no opinion on the resolution of such a motion if it were based on a
factual record different from the one presented here.
NARES, Acting P. J.
WE CONCUR:
McDONALD, J.
McINTYRE, J.
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