Carlsbad-Palomar Airline v. County of San Diego CA4/1 (2015) · DecisionDepot
Carlsbad-Palomar Airline v. County of San Diego CA4/1
California Court of Appeal Dec 18, 2015 No. D067283Unpublished
Filed 12/18/15 Carlsbad-Palomar Airline v. County of San Dieog CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
CARLSBAD-PALOMAR AIRLINE, INC., D067283
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2013-00063209-CU-BC-CTL) COUNTY OF SAN DIEGO,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Diego County, Judith F.
Hayes, Judge. Affirmed.
Thornton Koller and Audrey Powers Thornton for Plaintiff and Appellant.
Thomas E. Montgomery, County Counsel, and Thomas D. Bunton, Deputy
County Counsel, for Defendant and Respondent.
Plaintiff Carlsbad-Palomar Airlines, Inc. (Airline) obtained an "Airport Use
Permit" (AUP), signed on behalf of defendant County of San Diego (County) by
Mr. Drinkwater in his capacity as Director of Airports for County's Department of Public
Works, granting Airline certain rights and privileges at County's airport facilities at
McClellan-Palomar Airport (Airport) for the calendar year 2012. In 2013, Airline filed a
lawsuit against County alleging claims sounding in fraud and breach of contract. Airline
dismissed all of the fraud-based claims when it filed its Second Amended Complaint (the
SAC). Airline's SAC contract claims alleged, in essence, that County was obligated
under the AUP to provide runways and taxiways at Airport, and to resolve unspecified
environmental requirements, that would allow for the type of aircraft Airline wished to
use in its proposed commercial airline service from Airport. The SAC further alleged
County's failure to meet those obligations damaged Airline by preventing it from
obtaining the federal certifications required to operate Airline's proposed commercial
airline service.
County moved for summary judgment, alleging (1) Airline could not recover for
breach of the 2012 AUP because it had not been approved by County's Board of
Supervisors and was therefore void, and (2) County had not breached any express or
implied obligation imposed on it by the AUP. The trial court agreed and entered
summary judgment in favor of County, and Airline timely appealed.
I
FACTUAL AND PROCEDURAL BACKGROUND
A. The Relevant Actors
Airline is a California corporation doing business as California Pacific Airlines.
Ted Vallas was the Chief Executive Officer of (and majority shareholder in) Airline and
was involved in the discussions and negotiations with County over the rights and
privileges obtained by Airline.
2
County owns and operates Airport, which is located within the City of Carlsbad in
northern San Diego County. Mr. Drinkwater was County Director of Airports within the
transportation division for County's Department of Public Works.
B. The AUP's and Certification Process
Airline wanted to start a commercial airline operating out of Airport. Airline
obtained its first AUP for the calendar year 2010 and obtained subsequent AUP's for
2011 and 2012. During these years, Airline was pursuing Federal Aviation
Administration (FAA) certification to operate its proposed airline. Airline commenced
the process of certification, which takes between two and four years and includes
preparation of an environmental assessment. Airline obtained some of the required
approvals from the United States Department of Transportation and the FAA, and by
2012 had obtained funds necessary to complete "part 21 certification" (by merger, lease
or acquisition) and had aircraft available to start its operations, but ultimately did not
receive final FAA certification.
Airline hoped to obtain certification to operate a certain aircraft (an Embraer E-
170) out of Airport to run an economically viable airline. Even before Airline obtained
its first AUP in 2010, County advised it (at least as early as 2009) that Airport did not
meet FAA standards for that aircraft. Although Airline and County hoped to obtain FAA
modifications or deviations from those standards to allow Airline to operate the Embraer
E-170 at Airport, Airline knew the FAA could reject the necessary modifications or
deviations. Approximately six months before the 2012 AUP was obtained by Airline,
County officials told Airline that although airports can apply to the FAA for a waiver of
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the wingspan limitation, the "mismatch of a Category 'C' airplane to a Category 'B' airport
might be a bigger issue, since [Airport] has no room to accommodate safety zones
required for [Category 'C' airplanes], and FAA regulations seem to indicate that they are
not willing to waive the safety zone requirements." Also during this period, the FAA told
Airline it was concerned whether Airport could safely accommodate Airline's proposed
aircraft and asked Airline to provide data demonstrating the Embraer E-170 could operate
safely out of Airport.
When Airline obtained the 2012 AUP, the AUP provided (among other things)
that Airline "shall not operate aircraft which have not been approved by the Airport[']s
Director or which exceed total passenger loading limits for which the airport is certified."
The AUP also stated Airline "accepts the Premises in their current condition," and Airline
"acknowledges that County has made no oral or written representations or warranties . . .
regarding the condition of the Premises . . . ." The 2012 AUP required Airline to pay
monthly fees totaling $4,652 for exclusive use of various Airport facilities (i.e. two
check-in counters, three offices and six reserved employee parking spaces at Airport),
and also provided for additional monthly payments (calculated based on the number of
landings by Airline's airplanes and any overnight parking requirements for airplanes) set
by a schedule that was "set independently of the Schedule of Rates and Charges and Use
Control Policy of the County of San Diego Airports . . . ."
In August 2012 the City of Carlsbad, commenting on Airline's draft environmental
assessment, indicated it had several concerns with that assessment. Among other
concerns, the City of Carlsbad's comments stated Airport operated under a Conditional
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Use Permit (CUP) issued by the City of Carlsbad that limited Airport to use as a facility
for "General Aviation Basic Transport Service," and Airline's proposed use of Airport for
an aircraft (the Embraer E-170) carrying 70 or more passengers "exceeds the 'basic
transport' CUP limitation" and would require an amendment of the CUP issued by the
City of Carlsbad.
C. The Litigation and SAC
Airline thereafter submitted to County a "Notification of Claim," asserting County
had concealed from (or misrepresented to) Airline that the CUP limited commercial
service at Airport to commercial aircraft seating no more than 30 passengers per flight
knowing Airline intended to operate 70-passenger aircraft from Airport, and demanded
damages from County for failing to perform its obligations under the contract with
Airline. On February 20, 2013, County notified Airline it had rejected its claim.1
Airline filed this action in August 2013 alleging claims for fraud, inverse
condemnation, and for breach of the 2012 AUP, which turned on Airline's claim that (1)
County entered into the AUP's without disclosing that the CUP limitations and applicable
land use elements did not allow for use of Airline's proposed aircraft at Airport and (2)
County had not "compl[ied] with its environmental obligations" to allow Airline to
1 Shortly after County rejected Airline's claim, the City of Carlsbad wrote to Airline to inform it that, "[a]fter consultation with [County] officials responsible for airport operations," the City of Carlsbad was withdrawing its request that the CUP be amended because the CUP "does not specifically restrict the General Aviation Basic Transport Airport airline service with respect to the weight, seat number, or other similar limitations on air carrier activities . . . . [I]t appears that the proposed California Pacific Airline is within the CUP . . . permitted activity. Therefore, a CUP amendment will not be required . . . ."
5
establish its operations using the Embraer E-170 at Airport.2 County demurred to this
version of Airline's complaint on the grounds the fraud claims were barred by immunity
and the contract claims did not identify what contractual obligation was allegedly
breached by County. Airline, recognizing County's demurrers to the fraud and inverse
condemnation claims "may have merit," sought to obviate the demurrer by seeking leave
to file its SAC, which would (1) dismiss those claims and (2) clarify the nature of
Airline's breach of contract claims. As to its "clarified" breach of contract claims, Airline
explained it would amend its complaint to clarify that its contract claims rested in the
provision in the AUP that allowed Airline to use Airport's "runways, taxiways, ramp[s]
and passenger loading areas" (in exchange for a fee calculated based on the amount of
flights by Airline's aircraft) and alleging County breached that provision by not providing
runways, taxiways, ramps and passenger loading areas suitable for Airline's desired
aircraft. The court permitted Airline to file the SAC.
D. The Summary Judgment Motion
County moved for summary judgment, arguing the undisputed facts showed the
AUP was void because it was a lease or contract not authorized by a resolution of
2 Although Airline's Notification of Claim was somewhat opaque and appeared to rest on the alleged concealments, Airline's SAC subsequently claimed County also breached its obligations under paragraph 3 of the AUP because County did not insure Airport had completed the tasks required to receive approval from the FAA for flights by the type of aircraft Airline wished to operate, and this failure prevented Airline from receiving FAA certification. However, in a January 2013 letter to Airline, the FAA representative advised Airline that "matters related to the performance issues . . . have been resolved" and stated that "[Airline] has shown that the proposed aircraft . . . , the Embraer EMB-170, is compatible with [Airport]." Accordingly, Airline was advised that "FAA is now prepared to proceed with the certification process for [Airline] to achieve Part 121 certification." 6
County's Board of Supervisors (or subjected to competitive bidding), as required by the
applicable statutes. County also asserted that, even if the AUP was not void, the
undisputed facts showed County did not breach any obligations imposed on it under the
AUP because (1) nothing in the AUP mandated that County provide runways and
taxiways at Airport suitable for the Embraer E-170, and (2) the FAA in fact determined
Airport was suitable for the Embraer E-170.
Airline's opposition to the motion for summary judgment did not contest that the
AUP was a lease or contract not authorized by County's Board of Supervisors as required
by the applicable statutes, but instead asserted County should be judicially or equitably
estopped from contesting the validity of the AUP. From that predicate, Airline then
argued there were triable issues of fact on whether the AUP contained either an express
or implied term that County warranted its runways and taxiways at Airport were suitable
for the Embraer E-170, County breached that express or implied term because the City of
Carlsbad declared that use of Airport for the Embraer E-170 violated the CUP, and as a
result of this breach Airline was unable to continue to obtain funding and its efforts to
obtain certification therefore collapsed.
The trial court found the AUP was void, and rejected Airline's claims that County
was judicially or equitably estopped from asserting the AUP was void. The court also
found that, even if the AUP was not void, Airline had not produced evidence raising a
triable issue of fact that the AUP contained an express or implied term warranting the
runways and taxiways at Airport were suitable for the Embraer E-170, or any express or
implied promise it had environmental compliance to accommodate the Embraer E-170.
7
The court granted County's motion for summary judgment on all claims. Airline timely
appealed.
II
DISCUSSION
A. Standard of Review
We review de novo a grant of summary judgment, and we independently review
the record before the trial court. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 925.) The
purpose of the summary judgment procedure is to penetrate pleadings to discern, by
means of affidavits, whether triable issues of material fact exist. (Molko v. Holy Spirit
Assn. (1988) 46 Cal.3d 1092, 1107.) A "motion for summary judgment shall be granted
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." (Code Civ. Proc.,
§ 437c, subd. (c).) In determining whether the affidavits submitted are sufficient to
sustain a judgment in favor of the moving party, the moving party's affidavits are strictly
construed and those of the opposition are liberally construed. (Stationers Corp. v. Dun &
Bradstreet, Inc. (1965) 62 Cal.2d 412, 417.) "[D]oubts as to the propriety of granting the
motion should be resolved in favor of the party opposing the motion." (Ibid.)
When a defendant moves for summary judgment, the supporting affidavits or
declarations must demonstrate either that an element 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. (o); Dolquist v. City of Bellflower (1987) 196 Cal.App.3d 261,
266.) "[A] party opposing a motion for summary judgment which is supported by
8
affidavits or declarations sufficient to sustain the [motion] has the burden of showing that
triable issues of fact exist." (Chern v. Bank of America (1976) 15 Cal.3d 866, 873.)
B. The Trial Court Correctly Held the AUP Was Void
It is undisputed the 2012 AUP was not entered into by County in compliance with
Government Code3 sections 25526 and 25530, which are part of the regulatory scheme
governing the ability of a county to sell or lease county property.4 Because the 2012
AUP was not entered into after completion of the resolution, notice and competitive
bidding process prescribed by statute, but was instead signed by Mr. Drinkwater in his
capacity of Director of Airports within a division of County Department of Public
Works,5 we agree with the trial court the contract was void.
3 All further statutory references are to the Government Code.
4 Section 25526 provides that, "[b]efore ordering the sale or lease of any property the board of supervisors shall . . . adopt a resolution, declaring its intention to sell the property, or a resolution declaring its intention to lease it . . . . The resolution shall describe the property proposed to be sold, or leased, . . . and shall specify the minimum price, or rental, and the terms upon which it will be sold, or leased, and shall fix a time . . . at which sealed proposals to purchase or lease will be received and considered." Section 25530 provides that, "[a]t the time and place fixed in the resolution for the meeting of the board of supervisors, all sealed proposals which have been received shall, in public session, be opened, examined, and declared by the board. Of the proposals submitted which conform to all terms and conditions specified in the resolution of intention to sell or to lease and which are made by responsible bidders, the proposal which is the highest shall be finally accepted . . . ."
5 The regulatory scheme permits a board of supervisors to "prescribe by ordinance a procedure alternative to that required by Sections 25526 to 25535, inclusive, for the leasing or licensing of any real property belonging to, leased by, or licensed by, the county. . . ." (§ 25537, subd. (a).) However, Airline does not contend the 2012 AUP may be upheld as a contract for a "leas[e] or licens[e]" validly entered into by Mr. 9
As explained in Miller v. McKinnon (1942) 20 Cal.2d 83, 87-88, "compliance with
the terms of a statute requiring the letting of certain contracts by a public agency such as
a municipal corporation or county by competitive bidding and the advertising for bids is
mandatory with respect to those contracts coming within the terms of the statute; a
contract made without compliance with the statute is void and unenforceable as being in
excess of the agency's power." (Accord, Schram Construction, Inc. v. Regents of
University of California (2010) 187 Cal.App.4th 1040, 1061 [statute requiring letting of
contracts by competitive bidding is mandatory and contract made without compliance is
void and unenforceable as in excess of the agency's power].) Thus, " 'when by statute the
power of the board or municipality to make a contract is limited to a certain prescribed
method of doing so and any other method of doing it is expressly or impliedly prohibited,
no implied liability can arise for benefits received under a contract made in violation of
the particular[ly] prescribed statutory mode. Under such circumstances the express
contract attempted to be made is not invalid merely by reason of some irregularity or
some invalidity in the exercise of a general power to contract, but the contract is void
because the statute prescribes the only method in which a valid contract can be made, and
the adoption of the prescribed mode is a jurisdictional prerequisite to the exercise of the
power to contract at all and can be exercised in no other manner so as to incur any
liability on the part of the municipality. Where the statute prescribes the only mode by
which the power to contract shall be exercised the mode is the measure of the power. A
Drinkwater under procedures specified by an ordinance adopted by County's Board of Supervisors. 10
contract made otherwise than as so prescribed is not binding or obligatory as a
Unified Sch. Dist. v. Persh (1970) 5 Cal.App.3d 945, 953-954.)
Airline argues, for the first time on appeal, that the AUP was not a lease subject to
the provisions of sections 25526 and 25530. Airline argues airport "use permits" are
different from "leases" (citing City & County of San Francisco v. Western Air Lines, Inc.
(1962) 204 Cal.App.2d 105) and asserts that, because the terms of sections 25526 and
25530 apply only to "leases" and do not mention "permits," those sections have no
application to the AUP. We are not persuaded by Airline's arguments. First, Airline
admitted, in response to an interrogatory propounded by County during discovery, that
the 2012 AUP was a lease.6 Ordinarily, an admission during discovery is properly
utilized in granting summary judgment against the answering party (see, e.g., Gordon v.
Superior Court (1984) 161 Cal.App.3d 157, 166 ["answers to interrogatories . . .
[citations] may be treated as admissions against the answering party in granting a motion
for summary judgment"]) and Airline has raised no argument it should be relieved of its
6 County propounded an interrogatory asking whether Airline "contend[s] that the [2012 AUP] is a lease?" and Airline responded (subject only to the objection that the question violated attorney client and attorney work product privileges), "Yes." This interrogatory was proper (Burke v. Superior Court (1969) 71 Cal.2d 276, 281-283), and Airline made no effort below, and raises no persuasive argument on appeal, to explain why its objections should have been sustained to bar use of this answer when examining and ruling on County's summary judgment motion. (See, e.g., Universal Underwriters Ins. Co. v. Superior Court (1967) 250 Cal.App.2d 722, 728 ["an interrogatory calling on one's adversary to state whether or not he makes a particular contention, either as to the facts or as to the possible issues in the case, is not only proper but desirable. The contention of an adversary which relates to its claim or defense is certainly a 'matter, not privileged . . . .' "].) 11
admission. Moreover, in opposing County's motion for summary judgment, Airline did
not dispute the 2012 AUP was a lease subject to the requirements of sections 25526 and
25530, but instead contended only that County should be equitably or judicially estopped
from relying on noncompliance with those sections to avoid liability. Ordinarily, a
concession bars an appellant from raising the contrary claim on appeal. (See, e.g.,
Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th
30, 50-51.)
However, even had Airline preserved the argument below, we are not persuaded
by its claim that the 2012 AUP was not a lease subject to the requirements of sections
25526 and 25530. Although entitled "Permit," it is the character of the agreement, not
the title of the document, that controls whether the AUP is a "lease." (See, e.g., Mattson
v. County of Contra Costa (1968) 258 Cal.App.2d 205, 207 [although agreement referred
to respondents as "concessionaires" and did not use the words "lessees" or "tenants," "the
descriptive words used are not controlling"]; Bill Froehlich Motor Co. v. Estate of Kohler
(1966) 240 Cal.App.2d 897, 898 [court noted a document entitled "special use permit"
was "in effect a lease of the land upon which the house and improvements are located"].)
Here, the AUP granted Airline the right to occupy certain office spaces, counter spaces,
and employee parking spaces at Airport in exchange for a set monthly fee, and also
granted Airline the right to use certain common areas (the runways, taxiways, ramps and
passenger loading areas) for a variable monthly fee based on usage, and barred any
assignment by Airline of its rights under the AUP. Under similar circumstances, the
courts have concluded a contract containing provisions and terminology analogous to
12
those contained in the AUP was a lease (see, e.g., Beckett v. City of Paris Dry Goods Co.
(1939) 14 Cal.2d 633, 636-637), and Airline cites no pertinent authority suggesting a
grant of the right to use County's real property employing similar language is not a
"lease" within the meaning of sections 25526 and 25530. Instead, Airline cites only City
& County of San Francisco v. Western Air Lines, Inc., supra, 204 Cal.App.2d 105 for the
proposition that an airport use permit is not a lease. However, in Western Air Lines, the
central issue was whether the owners of the airport could lawfully distinguish among the
different airlines operating out of the facility by charging some airlines a lower rate for
the common use facilities (because they held long-term leases that froze the rate at the
lower amount) than it charged to Western Air Lines (operating under a revocable permit
issued by the City that did not freeze the rate it would pay for using the common use
facilities). (Id. at pp. 111, 134.) The Western Air Lines court had no occasion to address
whether the permit issued by City to the plaintiff was subject to sections 25526 and
25530, and it did not hold a "permit" to use the airport cannot be a "lease" for purposes of
sections 25526 and 25530. Western Air Lines is irrelevant to whether the 2012 AUP was
a "lease" subject to the procedural requirements of sections 25526 and 25530.
Although we conclude the 2012 AUP was a "lease" subject to the procedural
requirements of sections 25526 and 25530, we alternatively conclude that, even if the
2012 AUP was not a "lease" within the meaning of (and subject to) the requirements of
those sections, it would still have been void as against County. "A county may exercise
its powers only through the board of supervisors or through agents and officers acting
under authority of the board or authority conferred by law" (§ 23005), and "[a]ny
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contract . . . made or attempted to be made in violation of [law] is void, and shall not be
the foundation or basis of a claim against the treasury of any county." (§ 23006.) County
submitted evidence below, without objection by Airline, that at the time the 2012 AUP
was issued, County's Board of Supervisors had adopted a use control policy for County's
airports that provided certain permits could be issued without approval of the Board of
Supervisors if they were (1) "issued by the Director of Transportation" (2) involved
"activities specified in Section 5 of this Part VII" and (3) involved "fees not exceeding
$1,000 per month." The use control policy also specified that "[p]ermits which the
Director of Transportation is not authorized to issue pursuant to [this section] shall
require approval by the Board of Supervisors." The 2012 AUP satisfied none of the
requirements for permits issuable without approval by County's Board of Supervisors.7
Even if the 2012 AUP was a "permit" rather than a "lease" within the meaning of sections
25526 and 25530, it would still have required approval of County's Board of Supervisors,
and the absence of approval rendered the 2012 AUP void. (See Bear River etc. Corp. v.
County of Placer (1953) 118 Cal.App.2d 684, 690 [where statutory scheme shows
government employee had no power to enter into the contract without approval of Board
of Supervisors, contract is void and county not bound]; accord, Frandzen v. County of
San Diego (1894) 101 Cal. 317, 319-322.)
7 There are 14 permissible "activities" for which a permit could be issued without approval of the Board of Supervisors, none of which encompassed Airline's activities. Moreover, the monthly fees paid by Airline exceeded the $1,000 per month ceiling under the use control policy. Finally, the 2012 AUP was not signed by the Director of Transportation. 14
Airline appears to argue sections 25526 and 25530 cannot apply to the AUP
because the purpose of those sections—to protect the public from corrupt public officials
by mandating competitive bidding in the sale or lease of public property—does not and
cannot apply to the AUP. Airline's argument for why the policy purpose does not apply
here is that, because lease rates for the use of runways, taxiways, ramps and passenger
loading areas are already set under a schedule of rates and charges adopted by County,
any need to engage in competitive bidding is moot. However, this argument ignores that
(1) the rates charged for every other aspect of the AUP (i.e. rental rates charged for the
two check-in counters, three offices and six reserved employee parking spaces, and
charges for overnight parking of aircraft) are not set by a schedule of rates and charges
adopted by County, and (2) the AUP specifically declared the landing fees under the
AUP are "set independently of the Schedule of Rates and Charges and Use Control
Policy of the County of San Diego Airports . . . ."
Airline's argument for why sections 25526 and 25530 cannot apply to the AUP is
that federal law mandates free access to public airports for qualified airline companies.
From this predicate, Airline contends principles of preemption preclude application of
state law that would impede an airline's free access to airport facilities by requiring a
prospective airline company to competitively bid for contracts to use the facilities, and
therefore sections 25526 and 25530 cannot be applied to the 2012 AUP. However,
Airline cites no authority for the proposition that competitive bidding necessarily
conflicts with the federal regulatory scheme governing access to airports (see, e.g., Viva!
Intern. Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41
15
Cal.4th 929, 936 [noting four types of preemption and cautioning courts " ' "are reluctant
to infer preemption, and it is the burden of the party claiming that Congress intended to
preempt state law to prove it" ' "]), and FAA decisions suggest competitive bidding is
compatible with the federal scheme. (Cf. Aerodynamics of Reading, Inc. v. Reading
Regional Airport Authority (2001) 2001 WL 1085346, at p. [10] [complainant alleged
airport authority "awarded a lease for an available hangar to a competing FBO without
providing any other FBO the opportunity to bid on that hangar. [Citation.] This
allegation could be construed as a violation of grant assurance 23.].) We are
unpersuaded Airline has demonstrated application of sections 25526 and 25530 to the
2012 AUP is preempted by federal law.
C. The Trial Court Correctly Entered Summary Judgment on Airline's Common
Count
Airline argues that, once the trial court concluded the 2012 AUP (and its
predecessor AUP's) were void, it was necessarily entitled to maintain its common count
(seeking to recover all monies paid to County under the AUP's) and therefore it was
improper to grant summary judgment in favor of County on that count. However,
Airline's common count, which is a claim for money "had and received" (Philpott v.
Superior Court (1934) 1 Cal.2d 512, 518), has been described as an " ' "equitable action
to recover back money, which ought not in justice to be kept . . . . It lies only for money
which . . . the defendant ought to refund; it does not lie for money paid by the plaintiff,
which is claimed of him as payable in point of honor and honesty, although it could not
have been recovered from him by any course of law; as in payment of a debt barred by
16
the statute of limitations, or contracted during his infancy, or to the extent of principal
and legal interest upon a usurious contract, or, for money fairly lost at play: because in all
these cases, the defendant may retain it with a safe conscience, though by positive law he
was barred from recovering. . . . In one word the gist of this kind of action is, that the
defendant, upon the circumstances of the case, is obliged by the ties of natural justice and
equity to refund the money." ' " (H. Russell Taylor's Fire Prevention Service, Inc. v.
Coca Cola Bottling Corp. (1979) 99 Cal.App.3d 711, 718 [quoting Moses v. Macfarlan
(2 Burr. 1005, English Reports, Full Reprint, King's Bench Book 26, vol. 97, p. 676)].)
The claim is in the nature of an equitable action and rests on an obligation "created by
law, or by legal fiction, that where the defendant has money which in equity and good
conscience he ought to pay to the plaintiff he is deemed to have promised to pay it."
(Firpo v. Pacific Mut. Life Ins. Co. (1926) 80 Cal.App. 122, 125.)
Ordinarily, when a contract is void as against a governmental entity because it was
entered into in violation of state law, the plaintiff is prohibited from recovering under the
contract for the work or materials provided, and may not avoid that prohibition by
pleading a common count seeking to enforce an implied-in-law obligation. (See Katsura
v. City of San Buenaventura (2007) 155 Cal.App.4th 104, 111; Reams v. Cooley, supra,
171 Cal. at p. 153 ["no implied liability can arise for benefits received under a contract
made in violation of the particularly prescribed statutory mode"].) Airline argues those
authorities may correctly hold a plaintiff may not by a common count recover the value
of goods or services provided to the government under an invalid contract, but asserts
those cases are irrelevant to whether payments to the government under a void contract
17
may be recovered under a common count for money "had and received." We are not
confronted with, and express no opinion on, whether a common count for money "had
and received" could be pursued by a person who paid in advance for goods or services
from the government and the government, although disclaiming any obligation to provide
the contracted-for goods or services on the grounds the contract was void, nevertheless
refused to refund the advance payments. Instead, it appears to be undisputed that Airline
received what it paid for: the right to use of certain office space, counter space and
employee parking spaces at Airport over the years 2010 through 2012.8 Because the
only evidence in this record is that the amounts paid by Airline to County were for the
agreed monthly rates for rental of the office space, counter space and employee parking
spaces, and Airline actually received the beneficial use of those spaces, there is no triable
issue of fact that "[County] has money which in equity and good conscience [it] ought to
pay to [Airline]. . . ." (Firpo v. Pacific Mut. Life Ins. Co., supra, 80 Cal.App. at p. 125),
and therefore the trial court correctly entered summary judgment against Airline on its
common count.
8 For this reason, Airline's reliance on Philpott v. Superior Court, supra, 1 Cal.2d 512, 518 and Schultz v. Harney (1994) 27 Cal.App.4th 1611 is inapposite. In Philpott, the court held a plaintiff could maintain a common count for money had and received when he alleged he had paid in advance for, but never received, certain stock. (Philpott, at pp. 516-517.) Unlike Philpott, Airline did receive what it paid for. In Schultz, the court merely held that when an attorney collected a contingency fee under a contingency fee contract that was void because it provided for payment of a percentage fee that exceeded the statutorily prescribed limitation, the client properly stated a claim against the attorney for money had and received for that excess. (Schultz, at p. 1623 ["Because the contingent fee agreement . . . was void for illegality (to the extent it violated the [statutory limitations]), the facts alleged . . . effectively state a cause of action for money had and received."].) Unlike Schultz, there was no evidence County received payments in excess of the value of what it provided to Airline. 18
DISPOSITION
The judgment is affirmed. County is entitled to costs on appeal.
McDONALD, J.
WE CONCUR:
HUFFMAN, Acting P. J.
AARON, J.
19
AI Brief
AI-generated · verify before citing
Holding. The court held that the 2012 Airport Use Permit (AUP) was void because it was a lease of county property that failed to comply with mandatory statutory competitive bidding and board approval requirements. Consequently, the County could not be held liable for breach of contract under the invalid agreement.
Issues
Whether the 2012 Airport Use Permit (AUP) was a lease subject to statutory competitive bidding and board approval requirements.
Whether the AUP was void due to the lack of approval by the County's Board of Supervisors.
Whether the County was equitably or judicially estopped from asserting the invalidity of the AUP.
Disposition. Affirmed
Quotations verified verbatim against the opinion
“a contract made without compliance with the statute is void and unenforceable as being in excess of the agency's power.”
“the adoption of the prescribed mode is a jurisdictional prerequisite to the exercise of the power to contract at all and can be exercised in no other manner so as to incur any liability on the part of the municipality.”
“Even if the 2012 AUP was a "permit" rather than a "lease" within the meaning of sections 25526 and 25530, it would still have required approval of County's Board of Supervisors, and the absence of approval rendered the 2012 AUP void.”