Opinion
A150048
09-19-2017
CALIFORNIA TAXPAYERS ACTION NETWORK, Plaintiff and Appellant, v. CITY OF ROHNERT PARK, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV 258297)
Plaintiff California Taxpayers Action Network (CTAN), a nonprofit taxpayer and voter organization that has "filed suit in order to protect the interests of taxpayers and voters by preventing the levy of an illegal special tax," appeals from the dismissal of the action as barred by the statute of limitations. The action challenges a resolution adopted by the City of Rohnert Park (the city) establishing a community facilities district and authorizing the levy of a special tax on real property within the district to cover the cost of services and incidental expenses of the district. In accordance with the provisions of the Mello-Roos Community Facilities Act of 1982, Government Code section 53111 et seq. (the Act), because there were fewer than 12 registered voters residing within the district, the levy was approved by the vote of the single landowner within the district. CTAN contends the approval was invalid under California constitutional provisions requiring a two-thirds vote of the qualified electors of a city or special district to impose a special tax on the district. Because the action was filed more than 30 days after the special tax was approved by the single landowner and the city, the trial court held the action to be untimely under the limitations period fixed by section 53341 of the Act and sustained the city's demurrer without leave to amend. We conclude that the trial court correctly held that the action is barred by the statute of limitations without reaching the merits of CTAN's challenge to the validity of the city's action, that the statute of limitations is itself validly applied in this case, and that the continuous accrual of future levies of the special tax does not avoid application of the 30-day limitations period.
Background
The facts are undisputed. By way of general background, the action arises out of the proposal by a developer, Redwood Equities, LLC, to develop approximately 80 acres of land located within an unincorporated area of Sonoma County within the city's sphere of influence. The city worked with the developer to process its application and provide various approvals, including environmental review and general plan amendments. The city adopted a specific plan (the southeast specific plan) and zoning regulations, annexed the territory into the city's boundaries, and approved a development plan and a tentative subdivision tract map. The city and developer entered into a development agreement that was approved by the city council on December 14, 2010. Under the development agreement, the developer received the vested right to develop its property and agreed to pay for the public impacts of that development by paying the development impact fees, and for public facilities and improvements, and public services and maintenance costs necessary to serve the project.
The development agreement required the developer to satisfy the public service costs initially at the time of issuance of the building permit for the first residential unit and annually each subsequent year. To ensure the ongoing payment of the these costs, the developer elected to establish a community facilities district (sometimes referred to as CFD) pursuant to the provisions of the Act. In January 2015, the developer filed a petition with the city requesting the formation of a CFD to fund the public service costs. On October 27, 2015, the city council adopted resolution No. 2015-174 declaring its intent to form a community facilities district based on the anticipated cost of service and an allowance for administration. The resolution directed staff to record the boundary map for the CFD, publish notice, prepare a CFD report, and distribute CFD ballots ahead of a November 24, 2015 public hearing. According to the city council agenda report prepared for the November 24, 2015 meeting, "Because the property proposed for inclusion in the CFD includes less than twelve (12) resident registered voters (in fact it contains no resident registered voters), the property owners are also the voters in the CFD election." Since the developer was the sole landowner in the proposed southeast community facilities district, it was also the sole voter.
In advance of the November 24 city council hearing, counsel for CTAN sent three letters to the members of the city council urging them not to approve the proposed community facilities district resolution. "On behalf of my client, the California Voter-Taxpayer Protection Organization, I am writing to urge you not to approve the above-referenced Community Facilities District ('CFD'). Resolution No. 2015-174 made clear that the CFD will be funded by a special tax, and the accompanying staff report stated that '[b]ecause there are less than 12 resident, registered voters within the boundaries of the proposed CFD, the property owners will cast the ballots.' Such an arrangement is almost certain to be held illegal, and for that reason my client opposes it." The letters cited the "leading case" of City of San Diego v. Shapiro (2014) 228 Cal.App.4th 756 and argued: "Though it is true that Shapiro involved a financing district similar to a Mello-Roos district, and though it is also true that the financing district there had more than 12 registered voters, the analysis in Shapiro makes clear that a statutory owner-approval requirement for a special tax will not trump the constitutional voter-approval requirement if the district has at least one registered voter. It is my understanding that the CFD contemplated by resolution No. 2015-174 includes at least one registered voter. If I am correct, then the proposed special tax would be unconstitutional based on an approval by the property owner."
Nonetheless, at the November 24 hearing, following public comment and discussion, the city council unanimously adopted resolution No. 2015-184. Among many other details, the resolution establishes the City of Rohnert Park community facilities district No. 2015-01 and states that "it is the intention of the city council, subject to the approval of the eligible voters within the community facilities district, to levy the special tax at [specified] rates on all non-exempt property within the community facilities district." Section 10 of the resolution provides: "An election is hereby called for the community facilities district on the propositions of levying the special tax on the property within the community facilities district and establishing an appropriations limit for the community facilities district pursuant to section 53325.7 of the Act." Section 11 states that the date of the election will be that same day (the developer having waived otherwise applicable time requirements) and further: "The city council having found that there are no registered voters within the territory of the community facilities district, pursuant to section 53326 of the Act each landowner who is the owner of record on the date hereof, or the authorized representative thereof, shall have one vote for each acre o:r portion thereof of land that he, she or it owns within the community facilities district."
Following adoption of resolution No. 2015-184, the election was held and the developer voted unanimously to authorize the levy of a special tax within the district. After being presented by the city clerk with a certificate canvassing the results of the election, the city council adopted resolution No. 2015-185, certifying the results of the election and declaring that the public services tax was authorized by more than a two-thirds vote. The same day, November 24, the council adopted Ordinance No. 893, declaring that the public services tax had been approved by a two-thirds vote of the qualified electorate and authorizing the levy of the tax within the southeast community facilities district. On December 9, 2015, the city clerk recorded a notice that a lien to secure payment of the tax was imposed by the southeast community facilities district against all property within the district.
On January 21, 2016, CTAN filed its initial complaint. Its subsequently filed first amended complaint alleges that resolution No. 2015-184 and community facilities district "are invalid because they authorize a special tax that has not been approved by [the] city's registered voters," in violation of California Constitution, article XIII A, section 4 and article XIII C, section 2, subdivision (d), and requests declaratory and injunctive relief. According to the amended complaint, "this lawsuit challenges any and all future levies of the special tax pursuant to the November 24, 2015 landowner-only vote on the tax."
Section 4 of article XIII A of the California Constitution provides: "Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district."
Section 2, subdivision (d) of article XIII C of the California Constitution provides: "No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved."
The city demurred to the amended complaint on the ground that the action is barred by the 30-day limitations period imposed by section 53341 of the Act. The trial court sustained the demurrer without leave to amend, holding that "the 30-day limitation period under Government Code section 53341 applies to this reverse validation action. . . . [¶] Here, even though plaintiff challenges the Mello-Roos Act (Gov. Code, § 53311 et seq.) itself as unconstitutional, the 30-day limitations period imposed by the Legislature in Government Code section 53341 is not clearly erroneous. Therefore, plaintiff was still required to file this action within the period established by the Act, notwithstanding the alleged unconstitutionality of the Act. [¶] Plaintiff's allegations regarding future levies of the special tax pursuant to the challenged election do not save the first amended complaint. Government Code section 53341 provides an express accrual trigger which began to run when the special tax was approved on November 24, 2015. The continuous accrual theory advanced by plaintiff does not apply here because the express language of Government Code section 53341 dictates the accrual date."
CTAN noticed its appeal prematurely, before the entry of judgment dismissing the action. Judgment was subsequently entered and this court has treated the notice of appeal as having been filed immediately after entry of the judgment. (Cal. Rules of Court, rule 8.104(d).)
The pending request to take judicial notice is denied as moot.
Analysis
Section 53341 of the Act provides in relevant part: "Any action or proceeding to attack, review, set aside, void, or annul the levy of a special tax or an increase in a special tax pursuant to this chapter shall be commenced within 30 days after the special tax is approved by the voters." The election by which the special tax was approved was conducted on November 24, 2015. Resolution No. 2015-185, adopted that day, provides: "Each of the Propositions was approved by more than two-thirds of the votes cast at the election, and each of them has carried. The city council is hereby authorized to levy on the property within the community facilities district the special tax described in Proposition A for the purposes described therein and to take the necessary steps to levy the special tax authorized by Proposition A." Ordinance No. 893, also adopted on November 24, 2015, authorized the levy of the special tax. As stated above, CTAN's initial complaint was not filed until January 21, 2016, 58 days after the special tax had been approved.
The ballot contained two propositions, each calling for a yes or no vote. Proposition A read as follows: "Shall a special tax be levied on property within City of Rohnert Park Community Facilities District No. 2015-01 (Southeast Specific Plan - Services) pursuant to the rate and method of apportionment as provided in resolution No. 2015-174 of the City Council of the City of Rohnert Park to pay all or a portion of the cost of the services and incidental expenses described in said resolution?" Proposition B set the appropriations limit within the meaning of subdivision (h) of section 8 of article 13(B) of the California Constitution.
CTAN advances several arguments as to why its complaint was timely despite not having been filed within 30 days after approval of the special tax. Its principal contention is that the provision of the Act authorizing approval of a special tax by the vote of the landowners if there are less than 12 registered voters within the proposed community facilities district, section 53326, subdivision (b) of the Act, is unconstitutional, in violation of the California Constitution, article XIII A, section 4 and article XIII C, section 2, subdivision (d). Therefore, CTAN argues, the special tax was never "approved by the voters" within the meaning of section 53341 of the Act, since to comply with the constitution "the voters" must refer to the city's registered voters, so that the 30-day limitations period was never triggered. This argument erroneously injects the merits of CTAN's constitutional argument regarding the validity of section 53326, subdivision (b) of the Act into the determination of the timeliness of the complaint making such an assertion. Whether or not section 53326, subdivision (b) complies with the state Constitution, it expressly gives the vote to landowners if there are fewer than 12 registered voters in the community facilities district. Reading the sections of the Act together, the voters to whom Government Code section 53341 refers plainly are those who are designated as the voters in Government Code section 53326. "[T]he only pertinent voter tax approval provided for by the Act is that which is obtained in a section 53326 election." (New Davidson Brick Co. v. County of Riverside (1990) 217 Cal.App.3d 1146, 1151.) CTAN's challenge to the validity of the city's approval of the special tax was required to be brought within the time specified in the limitations provision regardless of the grounds of the challenge. The 30 day limitation applies to all challenges, including a challenge based on the alleged unconstitutionality of the approval procedure. (Summer Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1024 ["[I]t is well established that a statute of limitations is enforceable even though constitutional rights may be involved: '[E]ven a constitutional right is subject to reasonable statutory periods of limitation within which to commence an action for its vindication.' "]; accord Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 846; see also, e.g., Travis v. County of Santa Cruz (2004) 33 Cal.4th 757, 767.)
In the amended complaint CTAN alleged that the complaint was timely under the 60-day limitation period in Code of Civil Procedure sections 860 and 863. However, section 53359 of the Act provides explicitly: "An action to determine . . . the validity of any special taxes levied pursuant to this chapter . . . shall, notwithstanding the time limits specified in Section 860 of the Code of Civil Procedure, be commenced within 30 days after the voters approve . . . the special tax if the action is brought by an interested person pursuant to Section 863 of the Code of Civil Procedure." On appeal, CTAN makes no argument that the 60-day limitation applies.
Section 53326, subdivision (a) of the Act provides that the legislative body ordinarily "shall submit the levy of any special taxes to the qualified electors of the proposed community facilities district" at the next general election or in a special election. Subdivision (b) provides in part that "if at least 12 persons, who need not necessarily be the same 12 persons, have been registered to vote within the territory of the proposed community facilities district for each of the 90 days preceding the close of the protest hearing, the vote shall be by the registered voters of the proposed district, with each voter having one vote. Otherwise, the vote shall be by the landowners of the proposed district and each person who is the owner of land at the close of the protest hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that he or she owns within the proposed community facilities district not exempt from the special tax." (Italics added.)
In City of San Diego v. Shapiro, supra, 228 Cal.App.4th 756, the City of San Diego had authorized a special tax on the owners or lessees of a hotel within a community facilities district upon the vote of those property owners or lessees upon whose property the tax would be levied, rather than upon the vote of the registered voters within the community facilities district. The court held that "the election was invalid under the California Constitution because such landowners and lessees are neither 'qualified electors' of the City for purposes of article XIII A, section 4 [citation], nor do they comprise a proper 'electorate' under article XIII C section 2, subdivision (d)." (City of San Diego, supra, at p. 761.) However, the court added: "This appeal does not require that we consider the distinct question of whether landowner voting to impose special taxes pursuant to Government Code section 53326, subdivision (b) is constitutional under article XIII A, section 4 and article XIII C, section 2, subdivision (d) in districts that lack sufficient registered voters to conduct an election among registered voters." (City of San Diego, at p. 786, fn. 32.) We express no opinion on the merits of this question.
CTAN argues that the 30-day limitation period imposed by section 53341 of the Act is unreasonable and therefore is itself unconstitutional. "What constitutes a reasonable time is a question ordinarily left to the Legislature, whose decision a court will not overrule except where palpable error has been committed." (Friedland v. City of Long Beach, supra, 62 Cal.App.4th at p. 846.) The case on which CTAN relies, Day v. Metropolitan Life Ins. Co. (1936) 11 Cal.App.2d 681, recognizes that "the courts will not substitute their opinions for that of the legislature unless the unconstitutionality of the statute is so apparent on the face that no circumstances can be assumed under which it might have a constitutional operation. . . . [U]nless the statute on the face appears unconstitutional, that question can be raised only in a case where its application is sought against a party who may claim that, under the circumstances of that case, he has been denied some of the constitutional guaranties." (Id. at pp. 683-684.)
These statements were made with respect to a statute specifying the time within which a trustee of the estate may be appointed for a missing person. However, the court went on to state: "This principle is illustrated in the numerous cases which have arisen relating to the application of statutes of limitation generally. If the time fixed by a statute within which an action may be commenced, or a right asserted, is an unreasonable time, the statute will not be declared unconstitutional or void for that reason, but the courts will permit the action to be brought within such time as may be found to be reasonable." (Day v. Metropolitan Life Ins. Co., supra, 11 Cal.App.2d at p. 684.) --------
Here, the 30-day limitation to commence an action challenging the imposition of the special tax is entirely reasonable given the governmental agency's recognized interest in promptly resolving any questions about the validity of the tax and in implementing the operations of the community facilities district. (Friedland v. City of Long Beach, supra, 62 Cal.App.4th at pp. 842-844.) It is "clear that one of the Legislature's 'central objectives' with regard to the Act as a whole is to constrain (within legally permissible limits) legal challenges to the Act." (New Davidson Brick Co. v. County of Riverside, supra, 217 Cal.App.3d at p. 1151, fn. 4.) Moreover, in the context of the present dispute it is clear that neither CTAN nor the asserted single registered voter within the community facilities district that CTAN claims to represent were denied notice or a reasonable opportunity to challenge the city's action. CTAN expressed its opposition to the proposed measure in writing as early as April 2015 and as late as the day of the election and city council action approving the measure. CTAN unquestionably knew of the approval of the special tax the day it was authorized. CTAN therefore had ample notice and time within the statutory 30-day period to file suit if it chose to do so, and was not deprived of any constitutional guaranties by reason of the 30-day limitation.
Finally, CTAN argues that because the special tax will continue to be levied in the future, the action is timely under the "continuous accrual" theory adopted in Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809. In that case the Supreme Court held that if a 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.) However, the court limited that holding to "where the three-year limitations period for actions on a liability created by statute (Code Civ. Proc., § 338, subd. (a)) applies, and no other statute or constitutional rule provides differently." (25 Cal.4th at p. 825.) The court was "not concerned in [that] case with bond issues or other governmental action that by state law, are made subject to the accelerated validation procedures of Code of Civil Procedure sections 860-870.5." (25 Cal.4th at p. 825.) In Utility Cost Management v. Indian Wells Valley Water Dist. (2001) 26 Cal.4th 1185, 1195, the Supreme Court reaffirmed that if another statute provides a limitation period triggered by a specified event, the continuous accrual theory does not apply. The same conclusion was reached in Barratt American, Inc. v. City of San Diego (2004) 117 Cal.App.4th 809, 819-820. Here, section 53341, as well as section 53359, of the Act explicitly provide that an action challenging imposition of a special tax must be commenced within 30 days after the special tax has been approved by the voters. The continuous accrual theory therefore does not apply.
Disposition
The judgment is affirmed.
Pollak, J. We concur: McGuiness, P. J.
Jenkins, J.