Fairview Valley Fire, Inc. v. Department of Forestry & Fire Protection , 182 Cal. Rptr. 3d 667 ( 2015 )

Filed 1/9/15 Fairview Valley Fire v. Cal. Dept. of Forestry CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
FAIRVIEW VALLEY FIRE, INC., D065971
Plaintiff and Appellant,
v. (Super. Ct. No. CIVVS901308)
CALIFORNIA DEPARTMENT OF
FORESTRY,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Bernardino County, Steve
Malone and John P. Vander Feer, Judges. Affirmed.
Pope & Gentile and Daniel K. Gentile for Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Mark Beckington and Michael Glenn
Witmer, Deputy Attorneys General, for Defendant and Respondent.
In this government contracting dispute between defendant and respondent
California Department of Forestry and Fire Protection (Cal Fire) and plaintiff and
appellant Fairview Valley Fire, Inc. (Fairview), we affirm a judgment entered in favor of
Cal Fire on an order sustaining Cal Fire's demurrer.
We agree with Cal Fire that, in approving in advance the vendors from whom Cal
Fire will actually later hire emergency fire equipment, the agency is not required to
employ the formal competitive bid process set forth in the Public Contract Code.1 Under
the express terms of Cal Fire's written policies and procedures, no binding contract arises
between Cal Fire and an equipment vendor until a vendor's equipment is actually
dispatched by Cal Fire in an emergency. Accordingly, the emergency exemption to the
competitive bid procedures set forth in section 10340, subdivision (b)(1) applies to Cal
Fire's emergency hiring, and the trial court did not err in sustaining Cal Fire's demurrer to
Fairview's declaratory relief claim challenging the agency's emergency equipment hiring
process.
We also find the trial court properly dismissed Fairview's causes of action
challenging its suspension as a Cal Fire vendor. Cal Fire suspended Fairview as a vendor
when it learned that, among other matters, Fairview presented Cal Fire with false billing
information and attempted to avoid payment for fuel used during a fire incident. Cal Fire
did not breach any agreement with Fairview, when, after Fairview was suspended as an
approved vendor, Cal Fire declined to hire Fairview's equipment at the scene of a fire
incident. Moreover, Fairview has no claim related to the underlying suspension because,
while the case was pending in the trial court, Cal Fire lifted the suspension.
1 All further statutory references are to the Public Contract Code, unless otherwise
indicated.
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FACTUAL AND PROCEDURAL BACKGROUND
A. Cal Fire Equipment Hiring Policies and Procedures
Cal Fire responds to a wide variety of emergencies throughout the state, including
more than 5,600 wildfires each year. Although Cal Fire itself owns and operates more
than 3,000 fire and emergency response vehicles, it also depends on the availability of
equipment and services it hires from private vendors. Cal Fire has adopted a set of Hired
Equipment Policies and Procedures (the HEPP), which govern hiring of equipment and
services from private vendors.
Under the HEPP, vendors apply to Cal Fire to enter into an Emergency Equipment
Rental Agreement (EERA). The application process requires that vendors satisfy Cal
Fire with respect to a variety of matters related to the availability, preparedness and
safety of their equipment, and includes inspections to verify insurance, personnel, and the
location of equipment.
When a vendor's application is approved, the vendor and Cal Fire execute an
EERA embodied in a Cal Fire-294 form (Cal Fire-294). Under the terms of a Cal Fire-
294, the parties agree that: "[U]pon request of CAL FIRE the contractor will furnish the
equipment listed on the CAL FIRE-294 if the contractor is willing and able at the time of
request. The agreement also establishes the conditions of employment, the rate and
method of payment, and equipment condition requirements."
Importantly, the HEPP states that: "The EERA is a pre-incident agreement that
becomes a binding contract after dispatch." (Italics added.) The obligations set forth in
the Cal Fire-294 are expressly subject to this provision of the HEPP.
The HEPP expressly provides that: "A Cal Fire-294 is required for all hired
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equipment except local government, National Guard and OES-ordered equipment. Other
than those exceptions, no equipment shall be considered hired by Cal Fire or ordered to
work until a Cal Fire-294 has been completed." (Emphasis omitted.) The HEPP further
provides that any Cal Fire employee who hires a piece of private equipment is
responsible for verifying the existence of a Cal Fire-294 and obtaining a copy of it; "[o]n
incidents where no agreement exists, the employee will prepare the CAL FIRE-294."
Under the HEPP, Cal Fire attempts to use local government equipment before
hiring private equipment, and, when required to use private vendors, Cal Fire attempts to
do so on a rotating basis. In this regard, the HEPP states: "By continually utilizing the
same contractors it gives the erroneous perception that we are operating under a 'good ol'
boy' system. Dispatchers will attempt to share the fire assignments with as many
different contractors as possible. Rotating hiring opportunities among all qualified
vendors improves CAL FIRE's ability to maintain a large enough contractor pool to
respond to a large incident or series of incidents.
"Hiring equipment at an incident should only be done when the normal equipment
ordering process cannot meet the immediate need. Investigations have shown that some
contractors attempt to bypass the dispatch system by arriving at an incident with one
legitimate Resource Order Number then marketing additional equipment at the site. This
deprives legitimate contractors of hiring opportunities, and encourages 'smoke chasing.'"
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B. Fairview's Disputed HEPP Violations
Fairview is a vendor of emergency vehicles and services, which it has provided
Cal Fire and other governmental agencies for a number of years. In particular, as of
December 1, 2005,2 Fairview had a valid Cal Fire-294 agreement with Cal Fire.
On August 29, 2007, Cal Fire sent Fairview a letter that suspended Fairview's right
to provide emergency vehicles and services. The suspension was based on Cal Fire's
investigation of a 2006 incident in which a Fairview employee impersonated a high-
ranking fire department officer at a morning briefing being conducted at a fire incident
and thereafter contacted Cal Fire personnel and, in violation of HEPP, was able to have
Fairview vehicles and personnel hired outside the normal Cal Fire rotation. Cal Fire's
investigation also disclosed that Fairview personnel falsified shift tickets so that Fairview
was paid for two operators of a vehicle in instances when it was only entitled to payment
for one, resulting in a $6,433 overpayment to Fairview. The investigation also found
that, during the incident, Fairview employees obtained several hundred gallons of diesel
fuel and then attempted, unsuccessfully, to avoid paying for the fuel.
On October 3, 2007, Fairview appealed its suspension to the Cal Fire regional
chief; the appeal was rejected by the regional chief on October 19, 2007.
On October 22, 2007, a Cal Fire dispatcher contacted Fairview and asked Fairview
to send two water tenders to a major fire incident, the Witch Creek fire. Although the
dispatcher provided Fairview with a "resource order," when Fairview's equipment arrived
2 Prior to December 1, 2005, Fairview's ability to provide services to Cal Fire had
been suspended because of what Cal Fire had determined was an unlawful use of a
disabled veteran business enterprises contracting preference.
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at the incident, the Cal Fire incident manager refused to hire Fairview in light of its
suspension .
C. Trial Court Proceedings
Fairview filed a civil complaint against Cal Fire on March 3, 2009. In response to
Cal Fire's demurrer to the original complaint, Fairview filed a first amended complaint
(FAC) that alleged three causes of action: one cause of action for breach of contract
arising out of the dispatcher's request for two water tenders during the Witch Creek fire; a
cause of action for declaratory relief challenging Cal Fire's decision not to use its
services; and a cause of action for declaratory relief challenging the lack of competitive
bidding under the HEPP.
Cal Fire filed a demurrer to the FAC, and the trial court sustained the demurrer
with leave to amend as to the first two causes of action: Fairview's breach of contract
claim and its challenge to its suspension. The trial court sustained the demurrer without
leave to amend with respect to the third cause of action: Fairview's allegation that the
HEPP did not comply with California's competitive bidding statutes.
Fairview filed a second amended complaint (SAC) that realleged the breach of
contract cause of action and the declaratory relief challenge to its suspension. The trial
court sustained the demurrer without leave to amend with respect to the breach of
contract claim but overruled the demurrer with respect to Cal Fire's declaratory relief
challenge to the suspension.
In April 2011, after the trial court's ruling on Cal Fire's demurrer to the SAC, Cal
Fire lifted Fairview's suspension and readmitted it to its hired equipment rotation.
Shortly thereafter, Cal Fire moved for summary judgment with respect to the remaining
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declaratory relief action. Cal Fire argued that because Fairview failed to challenge its
suspension at the time it was imposed by way of a petition for a writ of mandate,
Fairview could not challenge the suspension by way of a later complaint for declaratory
relief; in the alternative, Cal Fire argued that because it lifted Fairview's suspension,
Fairview's declaratory relief claim was moot. The trial court found that the declaratory
relief claim was moot and granted Cal Fire's motion. Thereafter, the trial court entered
judgment in Cal Fire's favor and Fairview filed a timely notice of appeal.
DISCUSSION
I
The principles governing our review of an order sustaining a demurrer without
leave to amend and an order granting summary judgment are familiar. On appeal from
the dismissal of an action after a demurrer has been sustained, we exercise our
independent judgment to determine whether the complaint states a cause of action under
any theory. (City of Morgan Hill v. Bay Area Air Quality Management Dist. (2004) 118
Cal.App.4th 861, 869.) We accept as true all properly pleaded material facts, all facts
that may be inferred from the allegations and all matters judicially noticed, but we do not
accept the truth of contentions, deductions or conclusions of law. (Aubry v. Tri–City
Hospital Dist. (1992) 2 Cal.4th 962, 967.)
When a demurrer has been sustained without leave to amend, we review the
decision to deny amendment for abuse of discretion. (Careau & Co. v. Security Pacific
Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386.) The court abuses its discretion
when it denies leave to amend if there is a reasonable possibility an amendment would
cure the defects. It is, however, the plaintiff's burden to show how the complaint could
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be amended. (Ibid.)
"We review an order granting summary judgment de novo. [Citation.] We
independently review the record and apply the same rules and standards as the trial court.
[Citation.] The trial court must grant the motion if 'all the papers submitted show that
there is no triable issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.' [Citation.]" (Powell v. Kleinman (2007) 151 Cal.App.4th
112, 121.)
With this background in mind, we take up the trial court's rulings in the order in
which it made them.
II
The parties do not dispute that in hiring emergency equipment vendors Cal Fire is
governed by article 4, part 2 of the Public Contract Code (§§ 10335-10382), which by its
terms applies to "all contracts, including amendments, entered into by any state agency
for services to be rendered to the state, whether or not the services involve the furnishing
of use of equipment, materials, or supplies or are performed by an independent
contractor" (§ 10335, subd. (a)). Section 10340, subdivision (a) states in pertinent part
that "state agencies shall secure at least three competitive bids or proposals for each
contract." However, the requirement of competitive bids does not apply "[i]n cases of
emergency where a contract is necessary for the immediate preservation of the public
health, welfare, or safety, or protection of state property." (Id., subd. (b)(1).)
Cal Fire argues the EERA's embodied in Cal Fire-294's are not binding contracts
at the time they are approved by Cal Fire and only become contracts when, in an
emergency, Cal Fire actually dispatches a vendor's equipment. Accordingly, Cal Fire
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contends that its hiring of emergency equipment is not subject to the competitive bidding
requirements of section 10340, subdivision (a). We agree with Cal Fire for a variety of
related reasons.
First and foremost, we agree with Cal Fire that although styled an agreement, by
its terms, a Cal Fire-294 is not the award of a contract binding on Cal Fire. At most, it is
an irrevocable offer or option by an equipment vendor, which may be accepted by Cal
Fire in the event of (1) an emergency to which (2) the vendor is able to respond and (3)
during which the vendor is next in line in Cal Fire's dispatch rotation or an exception to
that rotation. The theory of an irrevocable offer or option that is binding on the offeror,
but does not become a contract binding on the offeree until accepted, is well established.
(See 1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 168, p. 204; Rest.2d
Contracts, § 87, subd. (1)(a).)
Our conclusion that the Cal Fire-294 is at most an irrevocable offer by the
equipment vendor is supported in the main by its express language. As we have noted,
the form expressly incorporates by reference the provision of the HEPP, which states that
an EERA embodied in a Cal Fire-294 is a "pre-incident agreement" that only becomes a
binding contract at the time of dispatch. This is clearly the language of an irrevocable
offer or option, not a binding contract. (See Rest.2d Contracts, § 87, subd. (1)(a).)
Our conclusion that a Cal Fire-294 is only an offer by a vendor and not a binding
agreement is buttressed by the vendor selection process set forth in the HEPP. As we
have noted, that process permits use of approved private vendors only after equipment
from local public agencies has been exhausted and then on a rotating basis designed to
support as many qualified vendors as possible. These policies, and the procedures HEPP
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employs to advance them, make it clear that at the time a Cal Fire-294 is executed there is
no expectation by vendors or Cal Fire that any particular vendor will be hired during a
fire emergency. This expectation in turn is consistent with our determination that no
contract with a vendor is made until, as set forth in the HEPP, equipment is actually
dispatched in an emergency.
We are also inclined to accept Cal Fire's characterization of its form for practical
reasons. If we treated the Cal Fire-294 as an award of a contract at the time it is
executed, under the code we would impose on Cal Fire the counterproductive
requirement that it engage in a competitive bidding process at that point. Competition
required at the outset, before any emergency, would inherently limit the number of
equipment vendors available later when fire emergencies arise. However, the HEPP
makes it clear that Cal Fire believes the public's interest is best served if, in an
emergency, there are more, rather than fewer, qualified vendors available to meet the
agency's needs.
Contrary to Fairview's argument, the process Cal Fire employs in obtaining
emergency equipment is readily distinguishable from the facts and holding in Marshall v.
Pasadena Unified School Dist. (2004) 119 Cal.App.4th 1241. In Marshall, a school
district used competitive bidding to select a contractor for a school modernization
program but later terminated the contract "for the convenience of the District." (Id. at
p. 1246.) Two months later, the school district awarded a no bid contract to a competitor
by way of an emergency resolution. In holding that the later no bid contract was invalid,
the court found that the district's termination of the original contract was not an
emergency within the meaning of the code: "That event was not a 'sudden, unexpected
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occurrence' posing a clear and imminent danger requiring prompt action to protect life,
health, property, or essential public services. [Citation.]" (Id. at p. 1258.) Plainly, the
holding in Marshall is of no assistance to us in determining whether execution of a Cal
Fire-294 is a binding contract within the meaning of section 10335, subdivision (a).
Because execution of a Cal Fire-294 is not the award of a binding contract, it does
not trigger application of section 10335 and the competitive bidding requirements of the
code. A binding contract plainly does come into existence at the time a vendor's
equipment is dispatched, but, just as plainly, at that point the emergency exception set
forth in section 10340, subdivision (b)(1) relieves Cal Fire of the duty to engage in the
competitive bid procedure.
In light of our construction of the Cal Fire-294, the trial court did not err in
sustaining Cal Fire's demurrer to Fairview's cause of action alleging a violation of the
code.
III
Next, we take up Fairview's claim that it should have been paid for its response to
the October 22, 2007 Witch Creek fire.
The primary obstacle to Fairview's claim for payment for its response is the well-
established principle that private parties may not recover against a public entity on a
quantum meruit or quasi-contract theory. (See Katsura v. San Buenaventura (2007) 155
Cal.App.4th 104, 109-110 [no recovery for extra work performed outside of scope of
written contract].) "Persons dealing with a public agency are presumed to know the law
with respect to any agency's authority to contract. [Citation.] '"One who deals with the
public officer stands presumptively charged with a full knowledge of that officer's
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powers, and is bound at his . . . peril to ascertain the extent of his . . . powers to bind the
government for which he . . . is an officer, and any act of an officer to be valid must find
express authority in the law or be necessarily incidental to a power expressly granted."'
[Citation.]" (Id. at p. 109.) Thus, "'"No government, whether state or local, is bound to
any extent by an officer's acts in excess of his . . . authority."' [Citations.] [¶] . . . [¶] It is
settled that 'a private party cannot sue a public entity on an implied-in-law or quasi-
contract theory, because such a theory is based on quantum meruit or restitution
considerations which are outweighed by the need to protect and limit a public entity's
contractual obligations.' [Citations.]" (Id. at pp. 109-110.)
As Cal Fire points out, at the time of Fairview's response to the Witch Creek fire it
had been suspended as an approved vendor and, hence, did not have a valid Cal Fire-294;
thus, under the HEPP, no contract between Cal Fire and Fairview ever arose with respect
to Fairview's response. Because Fairview had no contract with respect to the Witch
Creek fire and there is no viable quasi-contractual theory of recovery available to it, the
trial court properly sustained without leave to amend Cal Fire's demurrer to Fairview's
breach of contract cause of action.
IV
We also find no error in the trial court's order granting summary judgment with
respect to Fairview's challenge to its suspension.
"California courts will decide only justiciable controversies. [Citations.] The
concept of justiciability is a tenet of common law jurisprudence and embodies '[t]he
principle that courts will not entertain an action which is not founded on an actual
controversy . . . .' [Citations.] Justiciability thus 'involves the intertwined criteria of
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ripeness and standing. A controversy is "ripe" when it has reached, but has not passed,
the point that the facts have sufficiently congealed to permit an intelligent and useful
decision to be made.' [Citation.] But 'ripeness is not a static state' [citation], and a case
that presents a true controversy at its inception becomes moot '"if before decision it has,
through act of the parties or other cause, occurring after the commencement of the action,
lost that essential character"' [citation]." (Wilson & Wilson v. City Council of Redwood
City (2011) 191 Cal.App.4th 1559, 1573 (Wilson).)
"The pivotal question in determining if a case is moot is therefore whether the
court can grant the plaintiff any effectual relief. [Citations.] If events have made such
relief impracticable, the controversy has become 'overripe' and is therefore moot."
(Wilson, supra, 191 Cal.App.4th at p. 1574.)
Here, the record is undisputed that Cal Fire lifted its suspension of Fairview while
this case was pending in the trial court. Thus, Fairview obtained any prospective relief
from the suspension that the trial court could have otherwise provided. Nonetheless,
Fairview argues that its claim is not moot because it believes it suffered damages as a
result of the alleged unlawful and improper suspension of its ability to provide
firefighting equipment. We disagree. Even if Cal Fire acted improperly in suspending
Fairview, its conduct would not give rise to a claim for damages.
In the absence of a statute otherwise providing for such damages, the denial,
suspension or revocation of a permit, license, certificate, approval or authorization, will
not give rise to a claim for damages. (See Gov. Code, § 818.4; see also Carlsbad
Aquafarm, Inc. v. State Dept. of Health Services (2000) 83 Cal.App.4th 809, 817, 821-
823.) As a matter of statutory immunity, Government Code section 818.4 protects Cal
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Fire from any liability for its error in suspending Fairview, and our holding in Carlsbad
Aquafarm deprives it of any due process damage claim against the state. In Carlsbad
Aquafarm, the department of health services declined to approve the plaintiff as a
certified shell fish provider, who in turn sued the department for damages. Although the
plaintiff was successful in the trial court and recovered substantial damages from the
department on theory that the department failed to provide it procedural due process, on
appeal we reversed and held that damages for violation of due process were not available
against the department. (Carlsbad Aquafarm, at p. 823.)
In short, the record here shows that Fairview received all in the way of either
prospective or retrospective relief the trial court could have provided it with respect to its
suspension by Cal Fire. Thus, Fairview's suspension claims were moot and properly
dismissed. (Wilson, supra, 191 Cal.App.4th at p. 1574.)
DISPOSITION
The judgment is affirmed. Cal Fire to recover its costs.
BENKE, Acting P. J.
WE CONCUR:
NARES, J.
McINTYRE, J.
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