The Pepper Group Nevada v. City of Desert Hot Springs CA4/2 (2016) · DecisionDepot
The Pepper Group Nevada v. City of Desert Hot Springs CA4/2
California Court of Appeal Feb 11, 2016 No. E062990Unpublished
Filed 2/11/16 The Pepper Group Nevada v. City of Desert Hot Springs CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
THE PEPPER GROUP NEVADA, LLC,
Plaintiff and Appellant, E062990
v. (Super.Ct.No. INC1300452)
CITY OF DESERT HOT SPRINGS, OPINION
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. John G. Evans, Judge.
Affirmed.
Reid & Hellyer and Michael G. Kerbs for Plaintiff and Appellant.
Green de Bortnowsky, Charles R. Green, Nicholas Hermsen, and Tuan-Anh Vu
for Defendant and Respondent.
In 2002, the City of Desert Hot Springs (City) began imposing a development
impact fee (impact fee) on all new development, including on the installation of a
mobilehome in a mobilehome park. In January 2011, the Pepper Group Nevada, LLC
(Pepper) acquired a mobilehome park within the City. In October 2011, Pepper asked the
City to forgo the collection of impact fees in its park; the City denied the request. In
March 2012, however, the state Department of Housing and Community Development
(Department) determined that the City’s impact fees were illegal as applied to
mobilehome parks, because they violated the Mobilehome Parks Act (Health & Saf.
Code, §§ 18200-18700) (Act).
In May 2012, Pepper presented a government claim to the City for damages based
on the illegality of the impact fees; specifically, it sought a refund of impact fees
collected in the past, plus rents lost due to the existence of the impact fees. When its
claim was denied, Pepper filed this action. The trial court granted summary judgment
against Pepper and in favor of the City; it ruled that the government claim was untimely
because it was filed more than one year after the claim accrued.
Pepper appeals. Its sole appellate contention is that its claim actually accrued less
than one year before May 2012. The trial court, however, was correct. Hence, we will
affirm.
I
FACTUAL BACKGROUND
In 1986, the City adopted an ordinance by which it assumed the responsibility for
local enforcement of the Act.
In 2002, the City adopted another ordinance making an impact fee applicable to all
new developments. Thus, an impact fee applied to the installation of a new mobilehome
in a mobilehome park.
Palm View Estates (Palm View) is a mobilehome park in the City’s jurisdiction.
Between February 2003 and December 2008, the City collected a total of $22,847.48 in
impact fees in connection with the installation of mobilehomes at Palm View. One of the
entities that paid impact fees during this time was Superior Manufactured Housing
(Superior). In June 2011, the city collected another $7,057.57 in impact fees from one
Jim Waterman.
Each time, the impact fee was paid by the applicant for the building permit. Thus,
neither Pepper nor any of the previous owners or operators of Palm View paid any impact
fees.
Meanwhile, in January 2011, Pepper acquired Palm View. At some point,
Superior assigned its right to a refund of impact fees paid in connection with Palm View
to Pepper.1
Palm View had extremely low occupancy. To make a profit, it needed to attract
tenants who would install more mobilehomes until it was at or near full occupancy. On
October 10, 2011, at a City Council meeting, Pepper asked the City to waive impact fees
in Palm View. The City denied the request.
1 Mountain Financial Group, LLC also purported to assign its right to a refund of impact fees paid in connection with Palm View to Pepper. However, this entity had never actually paid any such impact fees.
It is undisputed that Pepper did not obtain any assignment from Jim Waterman.
On March 28, 2012, the Department ruled that the City’s imposition of impact fees
on mobilehome parks violated the Act; it therefore revoked the City’s local enforcement
jurisdiction. The City acquiesced in the Department’s ruling.
On May 22, 2012, Pepper presented a government claim to the City. According to
the claim, Pepper’s damages consisted of:
1. $22,847.48, representing the total impact fees paid in connection with Palm
View from February 2003 to December 2008;
2. “At least $143,000,” representing lost rent to date; and
3. An unspecified additional amount of lost rent, on the theory that, in the absence
of impact fees, Palm View would have become fully leased within nine years.
The City denied the claim on several grounds, including that it was untimely and
that it failed to specify “[t]he date, place and other circumstances of the occurrence or
transaction which gave rise to the claim . . . .”
On September 26, 2012, Pepper presented an amended government claim to the
City. According to the amended claim, the date of the occurrence ran from “the first . . .
wrongful collection of [impact fees],” in February 2003, through “the last wrongfully
collected [impact fee],” in December 2008. The City denied the amended claim as
untimely.
II
PROCEDURAL BACKGROUND
Pepper filed this action on January 18, 2013, asserting causes of action for
violation of the Act, nuisance, inverse condemnation, and declaratory relief. Like
Pepper’s previous government claim, the complaint alleged damages consisting of
$22,847.48 in previously paid impact fees, plus “[a]t least $143,000” in lost rent, plus
additional lost rent to be shown at trial.
On September 12, 2014, the City filed a motion for summary judgment. It argued,
among other things, that Pepper’s government claim was untimely.
In its opposition to the motion, Pepper argued that (1) the City had collected one
impact fee payment (i.e., the one from Jim Waterman) in mid-2011; and (2) Pepper was
seeking lost rent, which continued into 2012.
At the hearing on the motion, Pepper additionally argued that its claim accrued
either on October 11, 2011, when Pepper asked the City to waive impact fees, or on
March 28, 2012, when the Department declared the impact fees illegal.
The trial court granted the motion. Accordingly, it entered judgment against
Pepper and in favor of the City.
III
STANDARD OF REVIEW
“A trial court properly grants summary judgment where no triable issue of
material fact exists and the moving party is entitled to judgment as a matter of law.
[Citation.]” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.)
“[I]n moving for summary judgment, a ‘defendant . . . has met’ his ‘burden . . . if’
he ‘has shown that one or more elements of the cause of action . . . cannot be established,
or that there is a complete defense to that cause of action. Once the defendant . . . has
met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or
more material facts exists as to that cause of action or a defense thereto. . . .’ [Citation.]”
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.)
“In ruling on the motion, the court must ‘consider all of the evidence’ and ‘all’ of
the ‘inferences’ reasonably drawn therefrom [citation], and must view such evidence
[citations] and such inferences [citations], in the light most favorable to the opposing
party.” (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.)
“We review the trial court’s decision de novo . . . . [Citations.]” (Johnson v. City
of Loma Linda (2000) 24 Cal.4th 61, 65-66.)
IV
THE TRIAL COURT CORRECTLY RULED
THAT PEPPER’S CLAIMS WERE BARRED
Suits against a public entity for money or damages are subject to the Government
Claims Act (Gov. Code, § 810 et seq.).
Subject to certain specified exceptions, “Government Code section 905 provides
that all claims for money or damages against a local public agency . . . must be presented
in accordance with the claims procedures set forth elsewhere. Government Code section
911.2, subdivision (a), provides that all claims other than a claim relating to a cause of
action for death or injury to person or property shall be presented no later than one year
after the accrual of the cause of action. Claims arising more than one year prior to
presentation of the claim are barred. [Citation.]” (Border Business Park, Inc. v. City of
San Diego (2006) 142 Cal.App.4th 1538, 1562, fn. 20 [Fourth Dist., Div. Two].)
“Accrual of the cause of action for purposes of the government claims statute is
the date of accrual that would pertain under the statute of limitations applicable to a
dispute between private litigants. [Citations.]” (Shirk v. Vista Unified School Dist.
(2007) 42 Cal.4th 201, 208-209.)
“A cause of action accrues ‘when [it] is complete with all of its elements’ — those
elements being wrongdoing, harm, and causation. [Citation.]” (Pooshs v. Philip Morris
USA, Inc. (2011) 51 Cal.4th 788, 797.)
Here, Pepper claimed two types of damages. First, it claimed the impact fees that
had been paid between February 2003 and December 2008. Because the last of those
fees had been paid well over a year before Pepper presented its government claim, any
such claim was barred. In its claim, and also in its complaint, Pepper did not demand the
$7,057.57 in impact fees that Jim Waterman had paid in June 2011. Even if it had done
so, however, we can see no theory on which it had any right to them.
Second, Pepper claimed lost rent, both past and future. It first started to lose rent,
however, in January 2011, when it took over Palm View. And given that it was already
claiming “[a]t least $143,000 in lost rent” by May 2012, the only reasonable inference is
that its lost rent between January 2011 and April 2011 must have been more than merely
nominal. “[A]lthough a right to recover nominal damages will not trigger the running of
the period of limitation, the infliction of appreciable and actual harm, however uncertain
in amount, will commence the statutory period . . . . [N]either uncertainty as to the
amount of damages nor difficulty in proving damages tolls the period of limitations.”
(Davies v. Krasna (1975) 14 Cal.3d 502, 514.) Because Pepper already had a claim for
substantial lost rent over a year before it submitted a government claim, this claim, too,
was barred.
“[T]he discovery rule, where applicable, ‘postpones accrual of a cause of action
until the plaintiff discovers, or has reason to discover, the cause of action.’ [Citations.]”
(Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1192.) Pepper,
however, does not rely on the discovery rule. It has not alleged that it did not discover
that it was losing rent until some later time. “Whether the discovery rule applies at all is
initially a matter of pleading. . . . ‘A plaintiff who relies on this exception must plead
facts justifying delayed accrual; the complaint must allege (1) the time and manner of
discovery and (2) the circumstances excusing delayed discovery. [Citations.]’
[Citation.]” (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1150-
1151.) “[S]ummary judgment cannot be denied on a ground not raised by the pleadings.
[Citations.]” (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663
[Fourth Dist., Div. Two], italics omitted.) We therefore need not discuss the discovery
rule.
Pepper argues that its claim accrued on October 10, 2011, when the City refused
its request to waive impact fees. However, Pepper did not suffer any new or different
injury at that point. It asserts, “Had the City granted Pepper’s . . . request . . . , there
would have been no imposition of [impact fees] on the Park and, accordingly, no claim.”
But this is not true. To the extent that Pepper had any claim for impact fees, those fees
had already been paid. Moreover, to the extent that it had any claim for lost rent, some
rent had already been lost between January and October 2011. Admittedly, if the City
had granted Pepper’s request, Pepper might have chosen to forgo filing suit for those
damages. Nevertheless, Pepper’s cause of action had already accrued.
Finally, Pepper argues that its claim accrued on March 28, 2012, when the
Department ruled that the City’s impact fees violated the Act. Again, however, Pepper
did not suffer any new or different injury at that point. If the impact fees violated the Act
at all, they violated the Act all along. Pepper did not have to wait for a ruling by the
Department before it could file suit.
Once again, Pepper has not alleged that this was when it first discovered that the
impact fees were illegal, and it does not invoke the discovery rule. In any event, Pepper
already knew all of the facts that made the impact fees illegal; at most, it was ignorant of
the law. “The statute of limitations is not tolled by belated discovery of legal theories, as
distinguished from belated discovery of facts.” (McGee v. Weinberg (1979) 97
Cal.App.3d 798, 803.)
Pepper relies on Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25
Cal.4th 809. There, a city adopted an ordinance establishing a utility users tax. (Id. at
p. 813.) More than three years later, the plaintiff filed an action for injunctive and
declaratory relief and for mandamus, alleging that the city’s imposition and collection of
the tax without voter approval violated Government Code section 53723. (Ibid.) The
applicable limitations period, for an action on a liability created by statute, was three
years. (Id. at p. 815.)
The California Supreme Court announced that the applicable rule was “continuous
accrual” (Howard Jarvis Taxpayers Assn. v. City of La Habra, supra, 25 Cal.4th at
p. 819): “[I]f, as alleged, the tax is illegal, its continued imposition and collection is an
ongoing violation, upon which the limitations period begins anew with each collection.”
(Id. at p. 812.) It noted that it was undisputed that an action for a refund of individual tax
payments would have been timely. (Id. at p. 820.) It concluded that “[s]o long as an
action for refund or injunction could have been brought during the period of continued
collection, so could an action for declaratory relief.” (Id. at p. 821.) It cautioned, “our
holding relates only to injuries occurring in the statutory three-year period before suit is
brought and applies only to plaintiffs injured by tax collections within the three-year
period.” (Id. at p. 825.)
In a later case, the Supreme Court summarized the Jarvis continuous accrual rule
as follows: “[A] series of wrongs or injuries may be viewed as each triggering its own
limitations period, such that a suit for relief may be partially time-barred as to older
events but timely as to those within the applicable limitations period. [Citation.]” (Aryeh
v. Canon Business Solutions, Inc., supra, 55 Cal.4th at p. 1192.) Thus, “continuous
accrual” is actually a misnomer; the rule might more accurately be called the “repeated”
or “recurrent accrual” rule.
Here, we do agree that the continuous accrual rule would apply to past impact fee
payments.2 However, Pepper did not make (and did not receive any assignment from a
maker of) any impact fee payments within one year before filing. Thus, even under
Jarvis, its claim for past impact fee payments was barred.3
2 The City concurs that “[i]f there was any continuous accrual in this case, it was by the repeated collection of [impact fees] from February 2003 to December 2008.” 3 At oral argument, counsel for Pepper conceded that its claim for “historic fees” was untimely.
The continuous accrual rule could not apply to lost rent, because lost rent is not
suffered in any particular amount at any particular time. Hence, it cannot trigger a series
of new limitations periods. Rather, the total of past and future lost rent must be
approximated and awarded in one lump sum.
We therefore conclude that the trial court properly granted summary judgment
based on Pepper’s failure to file a timely government claim, subject only to a possible
exception for Pepper’s inverse condemnation claim, which we will now discuss.
V
INVERSE CONDEMNATION CLAIM
As mentioned earlier, certain claims against a public entity are excepted from the
general rule requiring the presentation of a timely government claim. One of these is an
inverse condemnation claim. (Gov. Code, § 905.1.)
Pepper’s fourth cause of action was for inverse condemnation. The trial court
ruled that this cause of action was barred by a three-year statute of limitations.
Pepper has one and only one argument as to why this ruling was erroneous — it
simply repeats its assertion that its claim accrued either on October 10, 2011, when the
City denied its request for a waiver, or on March 28, 2012, when the Department ruled
that the impact fees were illegal. Once again, however, we reject this assertion, because
Pepper did not incur any new injury on those dates. Pepper has forfeited any other
grounds for an attack on this aspect of the trial court’s ruling.
VI
DISPOSITION
The judgment is affirmed. The City is awarded costs on appeal against Pepper.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS McKINSTER J.
We concur:
HOLLENHORST Acting P. J.
MILLER J.
AI Brief
AI-generated · verify before citing
Holding. The court held that the plaintiff's claims against the City were time-barred because the government claim was not presented within one year of the accrual of the cause of action, and the plaintiff failed to establish a later accrual date.
Issues
Whether the plaintiff's government claim for damages was timely filed under Government Code section 911.2.
Whether the 'continuous accrual' rule applied to the plaintiff's claims for impact fees and lost rent.
Whether the plaintiff's inverse condemnation claim was barred by the statute of limitations.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“Claims arising more than one year prior to presentation of the claim are barred.”
“[A]lthough a right to recover nominal damages will not trigger the running of the period of limitation, the infliction of appreciable and actual harm, however uncertain in amount, will commence the statutory period”
“The statute of limitations is not tolled by belated discovery of legal theories, as distinguished from belated discovery of facts.”