Opinion
NOT TO BE PUBLISHED
CONSOLIDATED APPEALS from a judgment of the Superior Court of San Diego County, Richard L. Strauss, Judge. Super. Ct. No. GIC803249
O'ROURKE, J.
In 1971, the City of San Diego (City) and (SDG&E) entered into two franchise agreements for SDG&E to install gas and electric lines and facilities on streets owned by City. City retains the right to require SDG&E — at its own expense — to remove or relocate its lines and facilities if they conflict with City's use of the streets. Beginning in 1999, when City was constructing Petco Baseball Park in the area referred to as the East Village Redevelopment Project, a dispute arose regarding who should pay for SDG&E's relocation of utility lines and facilities undertaken at City's request. SDG&E filed a declaratory action in the trial court. City, Redevelopment Agency of the City of San Diego (Agency) and Padres, L.P. (the Padres) (collectively respondents), successfully moved for summary judgment and obtained an award of attorney fees.
One franchise agreement relates to gas and the other to electricity. Section 8 of each franchise agreement is identical. Section 11 of the gas franchise agreement and section 12 of the electricity franchise agreement are identical. We quote from the electricity franchise agreement in this opinion.
SDG&E appeals, contending — as a matter of law — it was not obligated to pay the total cost for the relocation of gas and electrical facilities for the Petco project; and, alternatively, it raised triable issues of material fact. It further contends there is insufficient evidence to support the attorney fees award. We affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The facts relevant to this appeal are undisputed. Section 8 of the franchise agreements, states:
"(a) City reserves the right for itself to lay, construct, erect, install, use, operate, repair, replace, remove, relocate, regrade or maintain below surface or above surface improvements of any type or description in, upon, along, across, under, or over the streets of the City. City further reserves the right to relocate, remove, vacate or replace the streets themselves. If the necessary exercise of the aforementioned reserve rights conflicts with any poles, wires, conduits, and appurtenances of [SDG&E] constructed, maintained and used pursuant to the provisions of the franchise granted hereby, whether previously constructed, maintained and used or not, [SDG&E] shall, without cost or expense to City within ninety (90) days after written notice from the City Manager, or his designated representative, and request so to do, begin the physical field construction of changing the location of all facilities or equipment so conflicting. [SDG&E] shall proceed promptly to complete such required work.
"(b) Irrespective of any other provision of this ordinance, [SDG&E's] right to construct, maintain and use, or remove poles, wires, conduits, and appurtenances thereto shall be subject at all times to the right of the City, in the exercise of its police power, to require the removal or relocation, to either overhead or underground locations, of said poles, wires, conduits and appurtenances thereto at the sole cost and expense of [SDG&E]."
In November 1998, the City's electorate approved Ordinance Number 0-18613, which authorized City to execute a memorandum of understanding with Agency, the Centre City Development Corporation, and the Padres for the construction of a baseball park in the Centre City East area of San Diego. The ballpark is 70 percent owned by City and 30 percent by the Padres.
The parties' joint stipulation of facts states, "Prior to 1999, SDG&E owned and maintained overhead electric transmission and distribution facilities in, among others, the following streets in downtown San Diego: K Street from 7th Avenue to 10th Avenue[;] L Street from 7th Avenue to 13th Street[;] Imperial Avenue from 7th Avenue to 9th Avenue[;] 8th Avenue from J Street to its terminus at the Railroad right-of-way[;] 10th Avenue from K Street to its terminus at the Railroad right-of-way[;] 11th Avenue from K Street to Imperial Avenue. The facilities consisted generally of 24 city blocks of electric distribution system. . . . [¶] SDG&E also owned and maintained gas distribution facilities in the aforementioned streets. The facilities consisted generally of 30 city blocks of gas main with services."
In April 1999, City wrote a letter informing SDG&E, "City is taking necessary steps to relocate public utilities to support redevelopment purposes in the Centre City Redevelopment area. SDG&E will need to relocate facilities, as per the franchise agreements, since the above actions will lead to streets being vacated. Other streets are available for these franchise utilities to be relocated to." In May 1999, SDG&E responded, "While we make every effort to work with customers, system and facility locations for SDG&E are determined by the utility in accordance with the Rules for Sale of Electricity. . . . Moreover, extensions to furnish permanent electric service to applicants are made in accordance with the provisions of Rule 15."
Section 6 of the franchise agreements states "All facilities or equipment of [SDG&E] that [SDG&E] shall construct, maintain and use or remove, pursuant to the provisions of the franchise granted herein shall be accomplished in accordance with the ordinances, rules, and regulations of City now or as hereafter adopted or prescribed, and such rules or regulations as are promulgated under State law, or orders of the Public Utilities Commission or other governmental authority having jurisdiction in the premises."
By April 26, 2000, SDG&E had removed all gas and electric facilities requested by City, and terminated service to previously existing customers and buildings within the vacated area. Some of the existing SDG&E facilities that had been within the vacated streets required immediate replacement for SDG&E to continue to serve customers adjacent to and outside the ballpark redevelopment area. SDG&E, at its own expense, relocated and reconnected these facilities for customers outside the ballpark redevelopment area.
SDG&E refused City's request that SDG&E pay for relocating electric and gas services within the ballpark redevelopment area, and in a letter dated April 26, 2000, stated, "SDG&E will not be taking any financial responsibility for restoring any facilities in this area where we have removed facilities."
On January 8, 2003, SDG&E filed an action for declaratory relief contending it had met its contractual obligations under the franchises by removing and relocating its facilities as City requested and, under Rule 15, it was not responsible for the costs of relocating electric and gas facilities in the ballpark redevelopment area.
In March 2004, respondents filed an administrative complaint with the CPUC regarding the underlying dispute and subsequently brought a motion to dismiss the complaint, which the CPUC granted, reasoning, "The Superior Court has jurisdiction to interpret the Franchise Agreement between the City and SDG&E, as well as Pub. Util. Code § 6297."
In August 2002, the parties entered into a "Cooperation Agreement" requiring SDG&E to deposit in an escrow account 50 percent and respondents to deposit the remaining 50 percent of the cost of the installation at issue here, which they labeled "Installation Work;" it includes: "(a) trenching, conduits, substructures, encasement, backfill, compaction and related work in the locations and configurations shown on Exhibit B to this Agreement; and (b) conduits and substructure installation requested by [SDG&E] for its operating convenience for which [SDG&E] will reimburse the Padres; (c) trench for new gas main installation for which [SDG&E] will reimburse the Padres; and (d) engineering and inspection work and other actions required to obtain and comply with regulatory and statutory requirements applicable to such work." The parties reserved their respective rights to recover through legal action their contribution to the escrow account.
In June 2005, respondents moved for summary judgment arguing there was no triable issue of material fact; and, under the franchise agreements, SDG&E had failed to comply with its obligations regarding the relocation.
In October 2005, the trial court requested briefing from the parties concerning "what SDG&E's electrical and gas utilities consisted of before the City's Ballpark redevelopment project, what work was actually done pursuant to Section 8 of the Franchise Agreements in preparation for the Ballpark, what the subsequent Installation Work consisted of, and what about it constitutes new work." Following a hearing, the trial court granted the summary judgment motion on November 7, 2005, and issued an order stating: "SDG&E would like the Court to interpret the term 'relocation' in the context of this case to mean the complete removal of all SDG&E facilities that conflict with the City's proposed changes and the subsequent realignment of any facilities in order to continue service to any customers interrupted by the City's directive, but not any subsequent replacement of facilities in the redeveloped and previously served area. After hearing the parties' arguments and obtaining a more thorough factual understanding of what occurred in this case and how SDG&E's facilities were affected overall, the Court is not persuaded by SDG&E's interpretation of the term 'relocation' within the Franchise Agreement."
On January 6, 2006, respondents filed a motion for refund of their money placed in the escrow account pursuant to the Cooperation Agreement, and their attorney fees. On February 1, 2006, SDG&E filed a motion requesting to depose respondents' attorneys about the basis of respondents' request for attorney fees. On February 3, 2006, the trial court issued its tentative ruling granting respondents' motion for return of its funds held in the escrow account and for attorney fees. After a hearing on that same day, the trial court affirmed its tentative ruling on the attorney fees matter.
On June 16, 2006, the trial court issued an "Amended Judgment after Court Hearings" and overruled SDG&E's objections to the evidence in the summary judgment motion and awarded respondents, pursuant to the Cooperation Agreement, "$233,000, with interest at 7 [percent] on $203,000 of that amount to run from August 7, 2002 and interest at 7 [percent] to run on the remaining $30,000 of that amount from April 3, 2003." It also denied SDG&E's motion for leave to depose respondents' attorneys; and awarded attorney fees as follows: $191,475 to City and Agency, and $152,997.50 to the Padres.
DISCUSSION
I.
A.
The standards that apply to summary judgment motions under Code of Civil Procedure section 437c are set forth in Aguilar v. Atlantic Richfield (2001) 25 Cal.4th, 826, 843-857 (Aguilar). If the parties' papers show there is no triable issue of material fact and the " 'moving party is entitled to a judgment as a matter of law' " (Code Civ. Proc., § 437c, subd. (c)), the court must grant the motion for summary judgment. (Aguilar, supra, at p. 843.) Code of Civil Procedure section 437c, subdivision (o) provides that a cause of action has no merit if: (1) one or more elements of that cause of action cannot separately be established; or (2) a defendant establishes an affirmative defense to that cause of action. Code of Civil Procedure section 437c, subdivision (p)(2) states: "A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party 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 or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff or cross-complainant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto."
Aguilar made the following observations: "First, and generally, from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. . . . There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . . [¶] "Second, and generally, the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. . . . [¶] "Third, and generally, how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial. . . . [I]f a defendant moves for summary judgment against . . . a plaintiff [who would bear the burden of proof by a preponderance of the evidence at trial], [the defendant] must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not — otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact." (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 850-851, fns. omitted.)
Moreover, a material fact "must relate to some claim or defense in issue under the pleadings, and it must also be essential to the judgment in some way." (Riverside County Community Facilities Dist. v. Bainbridge 17 (1999) 77 Cal.App.4th 644, 653.)
B.
SDG&E contends— as a matter of law — section 8 of the franchise agreement required it only to remove or relocate — at its own expense — the lines, facilities or equipment that conflicted with City's new construction, and SDG&E complied with this requirement. SDG&E further contends that the trial court's grant of summary judgment was erroneous because as a result of it SDG&E was required "to install new and different facilities long after it relocated and eliminated any conflict with City's vacation of the streets to install new facilities to new customers[.]" Moreover, this requirement to "relocate" the facilities does not aim "to eliminate a conflict with the City's desired use of the streets, but affirmatively to undertake the financial obligation to install new facilities wherever and whenever the City demands."
"The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Civ. Code, § 1641.) The contract must be construed as a whole; detached words or clauses standing alone are not controlling on the question of interpretations. Each must be viewed in relation to the agreement as an entity; "and if this is impossible, [we] favor an 'interpretation which gives effect to the main apparent purpose of the contract.' " (Harris v. Klure (1962) 205 Cal.App.2d 574, 578.) A contract must be interpreted to avoid absurd results and to make the contract lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties. (Civ. Code, § 1642; Pacific Tel. & Tel. Co. v. City of Lodi (1943) 58 Cal.App.2d 888, 892.) "The words of a contract are to be understood in their ordinary and popular sense." (Civ. Code, § 1644.) "In California the rule is that 'The terms of a writing are presumed to have been used in their primary and general acceptation.' " (Jenkins v. Valley Oil Co. (1964) 226 Cal.App.2d 41, 45, quoting Code Civ. Proc., § 1861.)
Section 6297 of the Public Utilities Code provides further guidance regarding the interpretation of franchise agreements: "The grantee shall remove or relocate without expense to the municipality any facilities installed, used, and maintained under the franchise if and when made necessary by any lawful change of grade, alignment, or width of any public street, way, alley, or place." "Section 6297 represents a codification of the common law requiring utility franchisees, in the absence of contrary provisions, to relocate utility facilities and equipment at their own cost when properly requested to do so by the municipality. . . . [¶] A review of the cases interpreting section 6297 and the common law indicate an almost unanimous refusal to allow utility company franchisees to recover reimbursement for equipment relocation expenses." (Pacific Gas & Electric Co. v. City of San Jose (1985) 172 Cal.App.3d, 598, 601.) "Section 6297 does not alter the implied common law obligations that are assumed by a utility when it accepts a franchise." (City of Livermore v. Pacific Gas & Electric Co. (1997) 51 Cal.App.4th 1410, 1413-1414.)
All further statutory references are to the Public Utilities Code unless otherwise stated.
Further, section 12 of the franchise agreement states: "This franchise is granted upon each and every condition contained, and shall ever be strictly construed against [SDG&E]. . . . Each of said conditions is a material and essential condition to the granting of the franchise."
We interpret the term "relocate" according to its ordinary meaning, which is, "to locate or allocate again." (Webster's 3d New Internat. Dict. (2002) p. 1919.) City requested that SDG&E relocate, as opposed to merely "remove" its facilities, because City planned to redevelop the area — not permanently vacate it. As a matter of common sense, SDG&E's obligation to relocate had to be performed in stages, the final stage taking place after the ballpark project was completed. Accordingly, we conclude SDG&E was required to pay the entire cost of relocation under the franchise agreements, and Rule 15 does not apply. Our interpretation of section 8 of the franchise agreement is consistent with section 12's mandate that the franchise agreement be strictly construed against SDG&E, and is supported by section 6297's mandate that municipalities and taxpayers be insulated from the expenses related to relocation of utility facilities.
C.
SDG&E contends there is a triable issue of material fact as to whether the streets and customers in the redeveloped areas are "new," which by implication triggers the application of Rule 15. This would require City to pay for excavation and furnishing and installing substructures, conduits and protective structures.
SDG&E relies on sections of the joint stipulation of facts, which state: (a) two "new streets were built (Park Blvd and Tony Gwynn Way);" (b) SDG&E installed "new gas and underground electric facilities in the new and realigned streets;" and (c) "The two new customers that have taken permanent service from the new gas and underground electric facilities are the Padres Ballpark and the Omni Hotel." (Emphasis added.)
Respondents counter: "All of the facilities disputed in this case are located in or on City streets that have been realigned in the Ballpark district as part of the redevelopment process. Similarly, SDG&E's claim that the Padres' Ballpark and the Omni Hotel are 'new customers' is not an issue of fact to be resolved but rather a legal issue as to whether these new uses of the same property change SDG&E's relocation obligations."
We agree with respondents that the issue posed is one of law rather than one of a triable issue of material fact. The fact that the word "new" is used to describe customer, street or facility is immaterial. What is not disputed here is that the installation work related to the City's request for relocation of services to a redevelopment area previously served by SDG&E. By its very notion, relocation of services to a redevelopment area will ordinarily involve different customers than those previously served and sometimes new and realigned streets, and new facilities.
In separate statement of material facts numbers 60 through 62, Respondents made the following assertions that SDG&E conceded were "undisputed": (60) "All of the Installation work required by the Cooperation Agreement and at issue in the instant litigation was done within public streets, public rights-of-way and public thoroughfares within the Centre City Redevelopment Project." (61) "All of the gas and electric work performed by SDG&E which is the subject of the instant litigation was performed entirely within the geographic area which is part of the Centre City Redevelopment Project." (62) "The new distribution line and gas main replacements completed by SDG&E for the Ballpark Project were all made within the public streets, public rights-of-way and public thoroughfares within the Centre City Redevelopment Project."
As stated in Pacific Tel. & Tel. Co. v. Redevelopment Agency of the City of Redlands (1977) 75 Cal.App.3d 957, 969, such redevelopment projects " 'are governmental functions of state concern in the interest of health, safety, and welfare of the people of the State and of the communities in which the areas exist.' " The law is straightforward. "[T]he California Community Redevelopment Law does not require the city or agency to compensate [a utility company] for the expense of relocating its facilities to other city streets. We perceive nothing fundamentally unfair in requiring the utility to bear the relocation expenses as a part of its cost of doing business. It is for the Legislature to decide whether those expenses should be shifted to the taxpayers. It has not so decided in the Community Redevelopment Law." (Id. at p. 968.)
II.
SDG&E does not dispute that respondents were the prevailing party. The trial court awarded attorney fees based on the Cooperation Agreement, which states: "The prevailing party in the [a]ction shall be entitled to recover all costs and expenses incurred by such party as a result of the action, including reasonable in-house (at prevailing market rates for equivalent outside counsel services) and outside counsel attorney fees and disbursements."
An award of attorney fees is a matter within the sound discretion of the trial court and an abuse of discretion standard is applied on appeal. (Lerner v. Ward (1993) 13 Cal.App.4th 155, 158.) " 'In determining what constitutes a reasonable compensation for an attorney who has rendered services in connection with a legal proceeding, the court may and should consider the "nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, [and] the success of the attorney's efforts[.]" ' " (Stokus v. Marsh (1990) 217 Cal.App.3d 647, 656-657.) The experienced trial court is the best judge of the value of professional services rendered in its court, and its decision will not be disturbed on appeal unless it is clearly wrong. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)
Here, the attorneys for City submitted a declaration supporting City's fee request and stated that City's attorneys and staff were "salaried employees of [] City [who] have no regular client billing procedures as may be customary in a private firm. Therefore, the amount of compensable City/Agency attorney time for purposes of this motion is based on the reasonable estimate as reflected in Exhibit A. The figures reflected on Exhibit A were developed by a thorough review of the case chronology, the notes, papers, research, and pleadings in [] City's file, records of meetings, conferences, and interviews, and thorough cross-checking with the records of counsel for co-defendants [the Padres]. The total estimated compensable attorney time for City and Agency is 851 hours. . . . [¶] There is no standard billing rate for attorneys in the Office of the City Attorney. Thus, in this motion attorneys for City/Agency request an hourly fee commensurate with that charged by law firms with attorneys of similar experience and qualifications. . . . $225 per hour is a reasonable rate within the San Diego legal community."
At the hearing on the motion, SDG&E did not challenge the hourly rate charged by attorneys for City. SDG&E noted that the attorney for the Padres had carefully billed every hour worked, but not so the attorneys for City, who kept no contemporaneous records of their hours worked. The trial court recognized respondents' attorneys did extensive work on this case — including in proceedings before the CPUC — and commented, "With the amount of work that's been involved in this case, and the rates being charged, I'm surprised [respondents' fee] request is as low as it is." The court added, "[I]t's become a complicated case." The court told SDG&E's counsel, "Your client is lucky that the amount requested isn't more than this. I think it's an appropriate amount."
We reject SDG&E's contention that, "Particularly given the contractual relationship between [] City and the Padres, it was unnecessary for respondents to have two separate sets of counsel double-billing for the same work." We note that respondents' rejoinder — "Although often aligned, the public entities (City and Agency) and the private party (the Padres) required separate consideration and representation of their interests" — provided ample basis for the court to award attorney fees to all respondents. During the hearing on the motion, counsel for the City identified one such interest of unique concern to City: "The principle is that [SDG&E] took a franchise from [] City with the covenant that they would move their utilities for proper governmental use of the streets. That principle is an important one for [] City to defend in this case." We conclude City submitted sufficient evidence to support its fee request, and the trial court did not abuse its discretion.
DISPOSITION
The judgment is affirmed. Respondents are awarded costs on appeal.
WE CONCUR: McCONNELL, P. J., BENKE, J.
Tariff Rule 15 (Rule 15) was filed with the California Public Utilities Commission (CPUC) and is applicable to electric service; it includes the effective rate and rule for SDG&E's services to "Distribution Line Extensions, defined as "New distribution facilities of utility that is a continuation of, or branch from, the nearest available existing permanent Distribution Line (including any facility rearrangements and relocations necessary to accommodate the Distribution Line Extension) to the point of connection of the last service." Rule 15 allocates to SDG&E the cost of "furnishing and installing cables, switches, transformers, and other distribution facilities" to service a person or agency requesting SDG&E to supply electric service. However, it allocates to an applicant for service the cost of (a) "excavation: all necessary trenching, backfilling, and other digging as required," (b) furnishing and installing all necessary "substructures and conduits," and (c) furnishing and installing "all necessary protective structures."