Opinion
C069441
03-02-2018
CIVIC PARTNERS STOCKTON, LLC, Plaintiff and Appellant, v. THE CITY OF STOCKTON et al., Defendants and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 03AS00193)
This case -- the subject of prior appeals and a bankruptcy stay -- deals with redevelopment contracts entered in May 2000 between plaintiff Civic Partners Stockton, LLC (Civic) and defendants City of Stockton (City) and Redevelopment Agency of the City of Stockton (Agency). On our own motion we take judicial notice (Evid. Code, § 459) that, following the legislative dissolution of redevelopment agencies, the City of Stockton has become the Agency's successor. (City Resolution No. 11-0251, Aug. 23, 2011, implementing Stats. 2011, 1st Ex. Sess. 2011-2012, chs. 5-6.) Since the pertinent events occurred before dissolution, we use the term "Agency" to avoid confusion.
In the operative "FOURTH AMENDED COMPLAINT FOR RESTITUTION," Civic claims the City and Agency breached contracts for Civic to redevelop a hotel building, instead gave the project to new developers, and transferred to them Civic's development plans and partnership agreement with a third party to market tax credits. The complaint seeks restitution for the value of Civic's development plans and partnership agreement.
The trial court issued a judgment dismissing Civic's fourth amended complaint upon the City's and Agency's demurrer, on the ground that Civic failed to comply with the claim-filing requirements of the Government Claims Act (Gov. Code, §§ 905, 945.4). This ruling was consistent with the California Supreme Court's decision in a prior appeal in this same lawsuit that the claim-filing requirement applied to Civic's contract claims for money, and the exception for recovery of property did not apply. (City of Stockton v. Superior Court (Civic Partners Stockton, LLC) (2007) 42 Cal.4th 730 (City) [statutes should be referenced as " 'Government Claims Act' " to avoid confusion engendered by the previous informal short title " 'Tort Claims Act' "].) The Supreme Court remanded to allow Civic an opportunity to amend.
As a result of the trial court's dismissal of the fourth amended complaint, the City and Agency voluntarily dismissed without prejudice a cross-complaint they had filed against Civic for breach of contracts, misrepresentation, and failure of consideration.
The trial court then granted the City's and Agency's motion for an award of contractual attorney fees (Civ. Code, § 1717) as against Civic.
Civic appeals from both the judgment dismissing the fourth amended complaint and the order awarding attorney fees. We denied a motion to consolidate this appeal with a separate pending appeal (C077028) between Civic and other defendants -- the new developers Cyrus Youssefi, an individual, Hotel Stockton Investors, a California limited partnership, and CFY Development, a corporation (collectively, Youssefi).
Most of Civic's arguments on this appeal turn on a flawed premise that the City's and Agency's voluntary dismissal of the cross-complaint "without prejudice" must be deemed a dismissal "with prejudice" (because the statute of limitations has expired), which as a matter of law supposedly operates as a retraxit resolving the merits of the cross-complaint in favor of Civic. Civic claims this supposed retraxit compels reversal of both the trial court's judgment dismissing Civic's complaint and the order for Civic to pay attorney fees. We reject these arguments.
As to the demurrer, Civic argues it pleaded around the claim-filing requirement because, whereas its prior complaint sought damages for conversion of property, its current complaint sues for "specific recovery" of property, which means "specific performance," which is "old equity" for recovering restitution or value of a misappropriated asset. Civic claims it lost specific property -- its development plans and tax-credit partnership agreement -- that had been converted or transferred to the new developers -- leaving Civic to recover money for what was once valuable but now is not. Civic maintains the Supreme Court "inadvertently" got it wrong in City, supra, 42 Cal.4th 730, by saying the exception from the claim-filing requirement is for recovery of "specific property," when the Court should have said "specific recovery" of property. We reject Civic's arguments.
We grant respondents' March 3, 2015, request for judicial notice of documents filed in the trial court (the City/Agency's request for judicial notice and reply papers for the demurrer) that should have been included in appellant's appendix. Respondents also move to strike portions of appellant's appendix and opening brief concerning documents that were not before the trial court in ruling on the demurrer. Civic opposes the motion. Since we need not reach the merits of the underlying dispute, we deny the motion as unnecessary.
We affirm the judgment of dismissal and the order awarding attorney fees.
FACTS AND PROCEEDINGS
We distill the background from the fourth amended complaint, the cross-complaint, and City, supra, 42 Cal.4th at pages 734-737.
Civic executed two redevelopment contracts in May 2000 with the Agency. One Disposition and Development Agreement (DDA) called for Civic to buy the Hotel Stockton from the Agency and renovate it. The other DDA called for Civic to buy from the Agency land adjacent to the hotel and construct a multiplex cinema. (City, supra, 42 Cal.4th at p. 734.)
Civic submitted designs to develop the first floor of the hotel for lobby and retail space, while the City would lease the upper floors (third, fourth, and fifth) to use as office space.
Because the hotel was a historic building, Civic was required to obtain approval of its plans from the State Historic Preservation Office (SHPO). SHPO determined that the corridors and walls on the upper floors had to be preserved. This meant the walls could not be removed to make the open office space required for the City's purposes.
SHPO's determination contributed significantly to the project's costs. Civic informed the Agency that Civic lacked sufficient funds to perform the historic renovation of the hotel. Even with the Agency's original assistance and the agreed hotel lease, Civic's development costs had increased by over $7 million, and Civic's additional "funding gap" totaled approximately $6 million.
Civic proposed that the City contribute additional funds and increase its total rent obligations through increased rents or subsidies. The City and Agency rejected Civic's proposals but were willing to explore alternatives.
The Agency proposed redesigning the hotel project to use the upper floors for senior or low-income housing, which would allow the Agency and Civic to apply to the California Tax Credit Allocation Committee (CTCAC) for tax credits unavailable for office space. Civic negotiated a partnership agreement with Paramount Financial Corporation to market the federal and state tax credits on the hotel. To obtain tax credits without significantly delaying the project, the application and designs for the new proposal had to be submitted to CTCAC by March 26, 2002. Civic promised to do so but ultimately failed.
By the end of 2001, Civic still had not resolved its funding issues. The Agency continued to work with Civic but doubted its ability to perform by the deadline and opened discussions with other qualified developers as an alternative, should the Civic project not move forward.
Youssefi's Hotel Stockton Investors (HSI) submitted a development proposal.
Consistent with the terms of the DDA, the Agency asked Civic to turn over all "Planning Documents" for the hotel project, including architectural plans, and agreed to reimburse Civic's outstanding costs in preparing the plans.
Civic turned over the documents to the Agency, which gave them to Youssefi. Civic alleges the Agency violated a promise to hold the documents "in trust" and not give them to Youssefi until signing of a formal agreement for the Agency to reimburse Civic for its investment in the project.
The Agency ultimately transferred the hotel project to Youssefi, assertedly with Civic's consent subject to reimbursement that never happened. Civic alleges the Agency and Youssefi unlawfully converted Civic's hotel plan without Civic's consent, had Youssefi take over Civic's tax credit partnership with Paramount (valued at $800,000), and entered indemnity agreements that prevent Youssefi from being a bona fide purchaser. In turn, the Agency alleges Civic's admitted inability to perform under the terms of the DDA and lease constituted Civic's repudiation and default under the terms of these agreements.
Civic's fourth amended complaint alleged three counts. The first count, for restitution against all defendants for conversion of the Hotel Stockton plans, said "Civic waives its claim for conversion against the city, the agency and the Youssefi defendants and sues for restitution of Civic's investment in its hotel plans . . . and the profit that the Youssefi defendants made from the Hotel Stockton in any form." Youssefi allegedly knew when he used Civic's plans that the Agency had not honored the commitment to Civic. The City, the Agency, and the Youssefi defendants contracted to divide among them the liability to Civic for their joint torts. The second count sought restitution from all defendants for conversion of Civic's tax partnership with Paramount. The third count -- not at issue in this appeal -- alleged restitution against the Youssefi defendants for conversion of Civic's hotel contract and interests in the Hotel Stockton.
The City's and Agency's cross-complaint -- which they filed after the trial court overruled their demurrer to the second amended complaint (reversed by City, supra, 42 Cal.4th 730 [affirming Third District's writ of mandate]) -- sought damages and declaratory relief for Civic's breach of the hotel and cinema contracts. The Agency alleged it gave Civic proper written notice of default and notice of termination for failure to cure the default. The cross complaint alleged Civic never provided documents or invoices needed for reimbursement.
With respect to the hotel project, the cross-complaint alleged breach of the Hotel DDA (Count Two), breach of the hotel lease (Count Three), intentional misrepresentation as to the lease (Count Four), negligent misrepresentation as to the lease (Count Five), failure of consideration as to the DDA (Count Six), and failure of consideration as to the lease (Count Seven). The cross-complaint sought declaratory relief rescinding the DDA and hotel lease, restoration of consideration, compensatory damages, punitive damages, and attorney fees.
Civic's answer to the cross-complaint tried to include claims for affirmative relief, but the trial court granted defendants' motion for judgment on the pleadings.
The City and Agency demurred to the fourth amended complaint, arguing (1) Civic's claims for restitution are claims for money or damages barred under the Government Claims Act due to Civic's failure to present a written claim to the public entities before filing a lawsuit, and (2) Civic's "quasi-contract" claims cannot be asserted against the public entities as a matter of law.
The trial court sustained the demurrer to the fourth amended complaint without leave to amend. The complaint was for money damages, not restitution of specific property. The complaint did not successfully allege an exception to the claims presentation requirement. Additionally, the contracts had not been formally approved under procedures established in the public contracting statutes and ordinances, which meant Civic could not enforce the agreements through contract or quasi-contract theories.
The court observed that Civic's opposition to demurrer stated the City has returned Civic's development plans. The court said this is a fact outside the pleadings and, in any event, does not advance Civic's arguments but instead further shows that Civic's claims are for money damages.
In April 2009, the trial court entered a judgment of dismissal in favor of the City and Agency of the fourth amended complaint without leave to amend. The court later entered judgment in favor of Youssefi, which is the subject of the related appeal.
The City and Agency voluntarily dismissed their cross-complaint "without prejudice" in two stages. They dismissed some causes of action in December 2010, and the remaining counts in July 2011. Both dismissals were "without prejudice" and were entered by the court clerk.
After the City and Agency voluntarily dismissed the entire cross-complaint without prejudice in July 2011, they filed a motion for contractual attorney fees under Civil Code section 1717, arguing the judgment dismissing the complaint made them "prevailing parties," leaving their compulsory cross-complaint as the only pending matter in the case, and "To end further costs of litigation, the City and Agency elected to file a voluntar[]y dismissal of [the] Cross-Complaint. This final act terminated all claims in this action between the City and Agency, and Civic. . . ."
Civic opposed attorney fees on the ground that the City's and Agency's voluntary dismissals of the cross-complaint "without prejudice" must be deemed to be "with prejudice" because the statute of limitations had expired. Therefore, according to Civic, the dismissals of the cross-complaint operated as a retraxit making Civic the "prevailing party" on the cross-complaint.
The trial court granted the City and Agency's motion for contractual attorney fees as against Civic and ordered Civic to pay jointly to the City and Agency attorney fees in the amount of $1,263,361.98. The court order states: "Civic does not challenge the fee amount sought by the City and Agency. Instead, Civic argues that because the City and Agency voluntarily dismissed their cross-claims without prejudice, Civic is in fact the prevailing party. Civic appears to argue that the statute of limitations had run on the City and Agency's cross-claims, and thus the voluntary dismissals should be deemed 'with prejudice.' However, Civic offers no reasoning or authority that supports these contentions. The Court perceives that attorney fees should not be awarded automatically to a party (here, Civic) in whose favor a voluntary dismissal has been entered. Specifically, it appears inaccurate to characterize Civic as the 'prevailing party' if the City and Agency dismissed their action only after obtaining all or most of its requested relief, or dismissed for reasons unrelated to the probability of success on the merits. See e.g. Santisas v. Goodin (1998) 17 Cal.4th 599."
DISCUSSION
I
Appealability
We consider the question of appealability including the timeliness of this appeal, though not raised by the parties. (Code Civ. Proc., § 904.1 [appealable judgments/orders]; Cal. Rules of Court, rule 8.104 [appeal must be filed within 60 days of notice of entry of judgment/order or, if no notice, within 180 days after entry].)
On October 3, 2011, Civic filed a notice of appeal from the April 28, 2009, judgment, and the August 31, 2011, order for Civic to pay the City's and Agency's attorney fees.
The April 2009 judgment was not appealable until the cross-complaint was dismissed on July 12, 2011. (ECC Construction, Inc. v. Oak Park Calabasas Homeowners Assn. (2004) 122 Cal.App.4th 994, 1002 [where a judgment is entered separately as to a complaint and a cross-complaint, there is no final appealable judgment until both have been resolved]; Gutkin v. University of Southern California (2002) 101 Cal.App.4th 967, 974; American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 557 [appeal of order dismissing a complaint was timely when filed within 60 days of judgment dismissing cross-complaint].)
By dismissal of the cross-complaint, the judgment dismissing the complaint became final and appealable. (Kurwa v. Kislinger (2013) 57 Cal.4th 1097, 1104-1105 [claims voluntarily dismissed without prejudice do not prevent a judgment on other claims from being a final, appealable judgment unless the parties agreed to preserve dismissed counts for potential litigation upon conclusion of the appeal].)
There was no final, appealable judgment until July 12, 2011, when the cross-complaint was dismissed completely.
Civic's October 3, 2011, notice of appeal asserts it is timely as to the April 2009 judgment because it was filed within 60 days of notice of entry of dismissal of the cross-complaint on September 8, 2011. Our review of the trial court record reflects a notice of entry of dismissal dated September 8, 2011, and abstract of judgment dated October 6, 2011.
The appeal is timely as to the judgment and as to the attorney fee order filed less than 60 days before the notice of appeal.
II
No Retraxit
Civic argues the voluntary dismissal of the cross-complaint "without prejudice" must be deemed to be "with prejudice" -- because the statute of limitations has expired -- and therefore operates as a retraxit resolving the merits of the cross-complaint in favor of Civic. According to Civic, this means defendants' failure to make restitution voids their attempted rescission of the contracts, and the Youssefi defendants are not bona fide purchasers, and Civic still has equitable title to the property, which defendants transferred to Civic in the redevelopment contracts, and defendants retained only bare legal title to the property "in trust" for Civic. We disagree.
A cross-complaint may be dismissed with or without prejudice upon written request of the cross-complainant to the clerk at any time before actual commencement of trial. (Code Civ. Proc., § 581.)
A voluntary dismissal "with prejudice" has the same effect as a common law retraxit -- it is equivalent to a verdict and judgment on the merits in favor of the opponent. (Manning v. Wymer (1969) 273 Cal.App.2d 519, 525 (Manning).) "In common law, a retraxit was 'a voluntary renunciation by plaintiff in open court of his suit, and cause thereof, and by it plaintiff forever loses his action.' [Citations.] In California, the same effect is now accomplished by a dismissal with prejudice. [Citation.]" (Morris v. Blank (2001) 94 Cal.App.4th 823, 828.)
In contrast, a voluntary dismissal "without prejudice" does not adjudicate anything. "Dismissals of actions without prejudice ordinarily indicate that such judgments of dismissal affect no right or remedy of the parties and that there has been no decision of the case upon the merits. [Citation.] The only adjudication by a judgment of dismissal 'without prejudice' is that nothing is adjudged and that the parties are free to litigate the issue as though the action had not been commenced. [Citation.]" (Fleishbein v. Western Auto Supply Agency (1937) 19 Cal.App.2d 424, 427 (Fleishbein).) A dismissal without prejudice does not constitute a retraxit. (Manning, supra, 273 Cal.App.2d at p. 526.)
Civic argues that, since a dismissal without prejudice does not toll the statute of limitations (Hill v. City of Clovis (1998) 63 Cal.App.4th 434, 445 (Hill)), and because the statute of limitations had run on the cross-complaint in this case, the dismissals without prejudice were therefore dismissals with prejudice.
However, Civic's cited case law (which Civic cites without discussion of facts or issues in those cases) does not even remotely support this proposition. In Hill, supra, 63 Cal.App.4th 434, after the trial court granted summary adjudication to the defendant on some causes of action, the parties stipulated to a dismissal of remaining causes of action without prejudice and entry of judgment, in order to advance to appeal on the claims summarily adjudicated, while reserving later potential litigation on the remaining causes of action. The appellate court held there was no final, appealable judgment. (Id. at pp. 445-446.) The court noted a dismissal without prejudice runs a risk that the statute of limitations will expire before the party is in a position to renew the dismissed cause of action. (Id. at p. 445.) Hill addressed only the one final judgment rule; it did not hold or even suggest that a dismissal without prejudice automatically becomes a retraxit upon expiration of the limitations period.
While expiration of the limitations period may bar a renewed claim, it does not necessarily do so, because there may be a basis for tolling the limitations period or for estopping the opposing party from asserting the limitations defense. (E.g., Fleishbein, supra, 19 Cal.App.2d at pp. 427-428.) We do not suggest the City or Agency meant to renew the cross-complaint. To the contrary, we discern no intent to renew the cross-complaint. Rather, as the trial court indicated in its order awarding attorney fees, it appears the City and Agency dismissed the cross-complaint only after obtaining all or most of its requested relief by the court's dismissal of the complaint without leave to amend, or otherwise dismissed for reasons unrelated to the probability of success on the merits of the cross-complaint (e.g., litigation costs). The motion for attorney fees indicated the City and Agency dismissed the cross-complaint to end further costs of litigation. We disregard Civic's assertion in its reply brief -- unsupported by any citation to the record -- that the reason for dismissal of the cross-complaint was that the Agency "finally grasped" that its cross-complaint -- by alleging that performance of Civic's contracts became merely impractical -- in essence admitted Civic did not breach the contracts.
The point here is that expiration of the limitations period does not as a matter of law convert a dismissal without prejudice into a retraxit, as Civic proposes without any supporting authority.
Civic also cites Nolan v. Workers' Comp. Appeals Bd. (1977) 70 Cal.App.3d 122, 130. There, an employee made a timely claim for workers' compensation benefits but was then sent to prison and was told by the employer's insurer that the claim would proceed with a medical examination on his release from prison. Years later, he was released from prison and filed a petition to reopen the workers' compensation claim but learned that the insurer had moved for and been granted a dismissal of the claim without prejudice, for lack of prosecution. The employee did not receive notice. His lawyer did but did not oppose the dismissal, thinking the case could be reactivated later. The appellate court held the employee was entitled to pursue his claim, even though the limitations period had expired, because the insurer was estopped from asserting the statute of limitations due to its representations that release from prison was necessary before further claim processing, which induced the worker and his attorney not to contest the dismissal. Nolan has no bearing at all here.
Civic also cites Fleishbein, supra, 19 Cal.App.2d 424, where the "sole question" on appeal was whether the plaintiff had successfully pleaded an estoppel to the limitations defense. (Id. at p. 426.) The plaintiff originally brought his action in state court. It was removed to federal court. After expiration of the limitations period, he dismissed the action without prejudice. (Ibid.) He later filed a new action in state court and, because it otherwise would have appeared upon the face of the complaint to be barred by the statute of limitations, he undertook to allege as an equitable estoppel that the defendant, by consenting to dismissal without prejudice, had consented to waive the limitations period. (Ibid.) The trial court dismissed the lawsuit upon the defendant's demurrer. The appellate court affirmed. The complaint merely alleged that, when plaintiff told the federal court he wanted to dismiss the case, the defendant said he did not object. (Id. at p. 428.) This did not set forth an estoppel. (Ibid.)
Thus, Fleishbein did not deem a dismissal without prejudice to be a dismissal with prejudice constituting a retraxit. Rather, it merely held that the re-filed complaint was barred by the statute of limitations because, under the circumstances of that case, there was no basis to estop the defendant from raising the limitations defense.
Civic also cites Torrey Pines Bank v. Superior Court (1989) 216 Cal.App.3d 813, 820-821, for the proposition that a dismissal with prejudice is a retraxit. There, the plaintiff voluntarily dismissed the complaint with prejudice.
Civic also cites Gagnon Co. v. Nevada Desert Inn, Inc. (1955) 45 Cal.2d 448, 455, which is inapposite because it involved a dismissal with prejudice. Though not mentioned or argued by Civic, we notice Gagnon contains brief dictum referencing an excerpt from Cal.Jur.2d that a dismissal without prejudice may have the effect of a final judgment in some respects. (Id. at p. 455.) The current version of the treatise mentions some such respects, e.g., the dismissal dissolves any injunction previously issued, but also recognizes the general rule that "[t]he words 'without prejudice' negate the intent or conclusion that the dismissal should prevail as a judgment on the merits." (1A Cal.Jur.3d Actions § 364.)
Civic argues that, even if the dismissal of the cross-complaint was without prejudice, it failed to extinguish Civic's equitable title to the property because a prevailing party for purposes of recovery of costs includes "a defendant in whose favor a dismissal is entered." (Code Civ. Proc., § 1032, subd. (a)(4); Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 186-187.) However, a dismissal does not necessarily make the defendant the prevailing party. DeSaulles v. Community Hospital of Monterey Peninsula (2016) 62 Cal.4th 1140, recently disapproved Chinn and held that a dismissal pursuant to a monetary settlement is not a dismissal in the defendant's favor under Code of Civil Procedure section 1032. (Id. at p. 1158.) When any party recovers other than monetary relief, the trial court determines which party, if any, is the prevailing party for purposes of recovering costs. (Code Civ. Proc., § 1032, subd. (a)(4).)
Civic cites no authority deeming a dismissal without prejudice to be a dismissal with prejudice. We conclude the City's and Agency's dismissal of their cross-complaint without prejudice does not constitute a dismissal with prejudice or a retraxit and does not help Civic in this appeal.
III
Noncompliance with Claim-Filing Requirement Bars Lawsuit
We review de novo the trial court's ruling on the demurrer. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
Government Code section 905 requires that "all claims for money or damages against local public entities" be presented to the responsible public entity before a lawsuit is filed, with exceptions inapplicable here. Failure to present a timely claim bars suit against the entity. (Gov. Code, § 945.4.)
City, supra, 42 Cal.4th at pages 736-742, held these requirements apply to breach of contract claims and therefore barred Civic's second amended complaint alleging breach of contract and interference with contract.
The Supreme Court next addressed and rejected Civic's contention that its contract claims were based on the law of restitution and were therefore exempt from the claims statutes under Holt v. Kelly (1978) 20 Cal.3d 560 (Holt) and Minsky v. City of Los Angeles (1974) 11 Cal.3d 113 (Minsky), which held there is an exception to the claim-filing requirement when a party seeks the return of specific property held by a public entity as bailee. (City, supra, 42 Cal.4th at pp. 742-743.)
Minsky involved the return of money seized by police from an arrestee and allegedly diverted to a law enforcement pension fund after resolution of the criminal charges. (Id. at pp. 117-118.) The Supreme Court held this was a claim for recovery of specific property exempt from the Government Claims Act, not a claim for money or damages subject to the Act. (Id. at p. 121.) Even if the cash taken from the arrestee was no longer traceable, the "initial exemption of the action from the claims statute is not lost simply because the city takes the further wrongful step of disposing of the bailed property. The city cannot be permitted to invoke the claims statute, originally not available to it, by virtue of a later wrongful dissipation of the property. To so hold would be in effect to allow the local entity to profit by its own wrong, penalizing a plaintiff who, in light of the specific recovery remedy apparently available to him, justifiably did not file a claim." (Id. at pp. 121-122, fn. 14.)
Holt, supra, 20 Cal.3d at pages 564-565, which applied the Minsky holding, similarly involved a claim for return of personal property (tools) seized at the time of an arrest that the sheriff had apparently misplaced. Holt issued a writ of mandate directing the sheriff to return the property or, if unable to do so, pay the petitioner the value thereof. (Id. at p. 566.)
City, supra, 42 Cal.4th at page 742, also stated, "The rule that suits to recover specific property are not subject to the claim requirements has also been applied in actions to recover property seized under a search warrant, or compensation for its value" but "[n]one of these cases involved a government contract." (Ibid.)
In the Supreme Court, Civic argued it transferred its plans and assets to the Agency in the expectation it would be compensated for them, bringing it within the rule of Holt and Minsky, which Civic characterized as an exemption of all restitution claims from the government claim requirements. (City, supra, 42 Cal.4th at p. 743.) The Supreme Court disagreed: "The Minsky rationale is that a claim for specific property effectively held by the government as a 'bailee' for the claimant is not one for 'money or damages' under the Government Claims Act. [Citation.] The Minsky court's reference to 'general constructive trust principles' must be understood in that context. [Citation.] Subsequent cases have limited the Minsky exception to situations in which the defendant had a duty to return seized property, enforceable by way of mandamus. [Citations and fn. omitted.] When a claim for 'money or damages' is not based on a governmental obligation to return specific property, it is subject to the claim requirements." (City, supra, 42 Cal.4th at p. 743.) The Supreme Court noted in a footnote: "Civic also relies on Bertone v. City & County of [San Francisco] (1952) 111 Cal.App.2d 579, a case cited in Minsky to support the conclusion that the claims procedures do not apply to a claim for specific recovery of money. [Citation.] Bertone involved a deposit given by the plaintiff to cover a disputed water bill. It does not help Civic. Not only did it involve a specific sum of money held in a trust account, but it predated the Government Claims Act and applied a local ordinance governing only ' "claims for damages." ' [Citation.]" (City, supra, 42 Cal.4th at p. 743, fn. 8.)
The Supreme Court said: "Civic identifies no specific property held by defendants that it was entitled to recover. Rather, it contends it yielded assets in exchange for a promise of compensation. An attempt to enforce such a contractual agreement is a claim for 'damages' under [Government Code] section 905. [Fn. omitted.]" (City, supra, 42 Cal.4th at p. 743.) "As the Court of Appeal noted [in our writ directing the trial court to sustain the demurrer], the contract causes of action in Civic's second amended complaint alleged breach of three express contracts and did not seek the return of property. Civic argues that its claims to ownership of the copyright in the hotel plans, included in the first two complaints, were claims for restitution exempt from the claim requirements. However, these claims were omitted from the complaint before us. In any event, all claims for damages arising from defendants' alleged misappropriation of the plans would be subject to the Government Claims Act. Civic has not sought recovery of the plans themselves or their replacement value, but rather compensation for their unauthorized use." (Id. at p. 743, fn. 9.)
The Supreme Court rejected Civic's argument that the City and Agency were estopped from or waived the defense of the Government Claims Act by filing the cross-complaint which would unjustly allow defendants to pursue contract claims while barring Civic's claims arising from the same transactions. (City, supra, 42 Cal.4th at pp. 743, 745.) The Court observed defendants filed their cross-complaint only after the trial court erroneously overruled their demurrer, and "[a]t this early stage of the litigation, we express no view on whether the Government Claims Act might apply to particular affirmative defenses" Civic might want to raise against the cross-complaint. (Id. at pp. 745-746.)
The Supreme Court said Civic had not had an opportunity to amend its complaint to meet the Government Claims Act defense, which defendants had asserted for the first time in the demurrer to the second amended complaint. (City, supra, 42 Cal.4th at p. 747.) "While [Civic] has yet to advance a successful argument against that defense, the second amended complaint does not on its face foreclose any reasonable possibility of amendment." (Ibid.)
And so, here we are again, on review of a demurrer to the fourth amended complaint.
Civic argues its fourth amended complaint is good. It seeks restitution for conversion of Civic's architectural plans and restitution for misappropriation of Civic's partnership with Paramount. Civic says its current complaint sues for "specific recovery" of property, which means "specific performance," which is "old equity" for recovering restitution or value of a misappropriated asset. Civic claims it lost specific property -- its development plans and tax-credit partnership agreement -- that had been converted or transferred to the new developers -- leaving Civic to recover money for what was once valuable but now is not. Civic argues it may waive torts (conversion, deceit, interference with contract) and instead sue for restitution, which is a broader remedy than tort damages because it reaches illicit profits. Civic claims the California Supreme Court in City, supra, 42 Cal.4th 730, inadvertently transposed Minsky's proper phrasing ("specific recovery" of property) into improper phrasing (recovery of "specific property"). Civic argues it is suing in restitution for "specific recovery of property" which is exempt from the Government Claims Act but, because defendants allegedly "dissipate[d]" the assets, Civic has no choice but to sue for their value.
Civic's parsing is misguided and not helpful to Civic's appeal.
Both Supreme Court decisions recognize that the exemption is for specific property being held by the government, though that specific property may be cash. Minsky said "the government in effect occupies the position of a bailee when it seizes from an arrestee property that is not shown to be contraband. [Citations.] The arrestee retains his right to eventual specific recovery, whether he seeks to regain tangible property like an automobile, ring, wallet or camera, or whether he seeks to recover a specific sum of money which under general constructive trust principles, is traceable to property within the possession of the defendant. [Citations.]" (Minsky, supra, 11 Cal.3d at p. 121; italics added.)
City correctly summarized that "[t]he Minsky rationale is that a claim for specific property effectively held by the government as a 'bailee' for the claimant is not one for 'money or damages' under the Government Claims Act. [Citation.] The Minsky court's reference to 'general constructive trust principles' must be understood in that context. [Citation.] Subsequent cases have limited the Minsky exception to situations in which the defendant had a duty to return seized property, enforceable by way of mandamus. [Citations and fn. omitted.] When a claim for 'money or damages' is not based on a governmental obligation to return specific property, it is subject to the claim requirements." (City, supra, 42 Cal.4th at p. 743; italics added.)
Civic's argument that the Supreme Court mistakenly transposed words somehow saving Civic's complaint is defeated by the Supreme Court's comment: "Civic also relies on Bertone v. City & County of [San Francisco, supra,] 111 Cal.App.2d 579, a case cited in Minsky to support the conclusion that the claims procedures do not apply to a claim for specific recovery [italics added] of money. [Citation.] Bertone involved a deposit given by the plaintiff to cover a disputed water bill. It does not help Civic. Not only did it involve a specific sum of money held in a trust account, but it predated the Government Claims Act and applied a local ordinance governing only ' "claims for damages." ' [Citation.]" (City, supra, 42 Cal.4th at p. 743, fn. 8.)
Here, Civic does not seek return of any property in the government's possession. Civic does not seek return of the documents -- the architectural plans for the project -- which Civic admits have no value now, and which apparently were returned. Civic wants to be compensated for the expense it incurred in creating the plans and for the value of the partnership agreement with Paramount for tax credits. These are claims subject to the Government Claims Act. Nor does Civic propose any possible amendment to cure the defect.
Insofar as Civic claims it has a right to property -- "bare legal title" to the property held by the Agency "in trust" for Civic -- Civic raised that point only in response to the cross-complaint which has been dismissed. No such claim appears in the fourth amended complaint, nor did Civic raise it in opposition to the demurrer or leave to amend to raise it in a fifth amended complaint against the City or Agency. The trial court rejected Civic's attempt to assert equitable title in a fifth amended complaint against the Youssefi defendants.
Civic complains that the City and Agency argued in their demurrer that they cannot be liable in quasi-contract, and the trial court agreed. However, the trial court was referring to a rule precluding a party from enforcing an agreement through a quasi-contract theory when the contract has not been formally approved under procedures established in applicable public contracting statutes, ordinances, and city charters. On appeal, Civic offers no analysis or authority regarding compliance with public contracting rules. Civic simply argues quasi-contract and restitution are the same thing, and Minsky and Holt said the claim-filing requirement does not apply to actions for restitution where the public entity misappropriates property, and therefore the claim-filing requirement does not apply to quasi-contract theories.
Civic cites replevin statutes. (Code Civ. Proc., §§ 627 [in action for recovery of specific personal property, if the property is not returned, the trier of fact must find the value of the property], 667 [in action to recover possession of personal property, judgment may be for possession or, if property cannot be delivered, for its value, plus damages for the detention].) Civic argues there can be no doubt that its architectural plans were "specific." However, specificity of the plans does not make this a suit for recovery of property. The City's and Agency's point about lack of specificity of the plans was merely that the plans lacked value to the new developers.
Civic fails to show error in the trial court's sustaining of the demurrer without leave to amend.
IV
Attorney Fees
We review an attorney fee award for abuse of discretion; a trial court abuses its discretion if it misconstrues the statutory criteria for an award. (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.) Trial courts exercise wide discretion in determining who, if anyone, is the prevailing party for purposes of attorney fees. (Cussler v. Crusader Entertainment, LLC (2012) 212 Cal.App.4th 356, 366.)
Civic's sole avenue of attack is that it is the prevailing party because the City's and Agency's dismissal of the cross-complaint constituted a retraxit resolving the merits of the cross-complaint in Civic's favor. While acknowledging that the contractual fee statute states there is no prevailing party in the case of voluntary dismissal of a contract claim (Civ. Code, § 1717, subd. (b)(2)), Civic argues this case is about tort claims for restitution and cross-claims alleging fraud. Civic's arguments miss the mark for the reasons that we have stated herein.
DISPOSITION
The judgment and order awarding attorney fees are affirmed. The City and the City as successor to the Agency shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
HULL, Acting P. J. We concur: MURRAY, J. DUARTE, J.