Opinion
A138355
09-19-2017
TAYLOR DANE, Plaintiff and Appellant, v. CITY OF SANTA ROSA et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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-253003)
This matter comes before us on remand from the California Supreme Court, which granted review of our previous nonpublished decision in this case, but deferred further action pending consideration and disposition in a case involving nearly identical facts and legal issues. (See Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241 (Weatherford).) In Weatherford, the Supreme Court interpreted Code of Civil Procedure 526a, under which certain individuals and corporations have taxpayer standing to pursue legal actions enjoining wasteful or illegal expenditures by government entities, holding that a person's standing to sue under section 526a did not require payment of a property tax. (Weatherford, at p. 1245.) Instead, "[a]n allegation that the plaintiff has paid an assessed tax to the defendant locality is sufficient under section 526a." (Ibid.) After issuing its opinion in Weatherford, the Supreme Court transferred the matter back to this court for reconsideration in light of its holding in that case.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
In our previous decision in this case, we held, as had the appellate court in Weatherford, that payment of an assessed property tax is required for an individual to have taxpayer standing to bring an action under section 526a. (Dane v. City of Santa Rosa (Aug. 12, 2014, A138355) [nonpub. opn.], review granted Oct. 29, 2014, S221341; transferred to this court for reconsideration Aug. 9. 2017.) Now, having reconsidered our earlier decision in this matter in light of Weatherford, we shall reverse the judgment and remand the matter for further proceedings consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
On January 4, 2013, Taylor Dane (plaintiff) filed a complaint for declaratory and injunctive relief against the City of Santa Rosa and the County of Sonoma (collectively defendants) that included claims challenging their enforcement of Vehicle Code section 14602.6, which authorizes the 30-day impoundment of a vehicle being driven by a person with a suspended, revoked, or restricted driver's license, or who had never been issued a license. The complaint alleged, in essence, that defendants "impound vehicles in circumstances where Vehicle Code section 14602.6 does not allow it, and provide post-seizure notice and an administrative hearing process which violate procedural due process guarantees."
Vehicle Code section 14602.6 provides: "Whenever a peace officer determines that a person was driving a vehicle while his or her driving privilege was suspended or revoked, driving a vehicle while his or her driving privilege is restricted pursuant to Section 13352 or 23575 and the vehicle is not equipped with a functioning, certified interlock device, or driving a vehicle without ever having been issued a driver's license, the peace officer may either immediately arrest that person and cause the removal and seizure of that vehicle or, if the vehicle is involved in a traffic collision, cause the removal and seizure of the vehicle without the necessity of arresting the person in accordance with Chapter 10 (commencing with Section 22650) of Division 11. A vehicle so impounded shall be impounded for 30 days."
In the complaint, plaintiff did not allege that either the Santa Rosa Police Department or the Sonoma County Sheriff's Office had impounded her vehicle, but instead stated that she was a resident of the City and County and that, "[w]ithin 1 year of the filing of this action, plaintiff paid taxes in and to the City of Santa Rosa, County of Sonoma and the State of California, such that she has taxpayer standing pursuant to . . . section 526a to bring this action seeking declaratory and injunctive relief against the governmental defendants in order to secure defendants' compliance with state and federal constitutional guarantees and enjoin the unlawful expenditure of taxpayer monies. . . . [¶] The taxes paid by plaintiff include sales tax, gasoline tax, water and sewage fees, and other taxes, charges and fees routinely imposed by municipalities, counties and the states, with the exception of property taxes. Payment of property taxes is not required for standing under section 526a. Plaintiff has not paid property taxes because, like millions of others, she does not own and cannot afford to buy real property in California, particularly in the Bay Area, one of the most expensive real estate markets in California—indeed, the entire United States." (Fn. omitted.)
On January 30, 2013, the City of Santa Rosa filed a general demurrer to the complaint on the ground that plaintiff lacked taxpayer standing under section 526a because she did not pay property taxes in Sonoma County.
On March 26, 2013, the trial court issued a tentative ruling sustaining the demurrer, finding that, because plaintiff did not allege that she paid "assessed" taxes, she did not have taxpayer standing to bring her action. Plaintiff declined the trial court's permission to amend the complaint. Plaintiff's counsel explained that, if plaintiff were found to lack taxpayer standing based on non-payment of property taxes, rather than requesting leave to amend to substitute a resident property owner as plaintiff, "she will appeal so that this important legal question may be squarely addressed by the First District Court of Appeal and, if review be granted, the California Supreme Court."
In a declaration filed on February 5, 2013, in opposition to the demurrer, plaintiff's counsel had stated that he had litigated numerous vehicle impound and forfeiture cases, including several against defendants, with the bulk of the litigation brought on behalf of taxpayer plaintiffs, pursuant to section 526a. Counsel further declared that he had "intentionally selected a party plaintiff, Taylor Dane, who does not own real property or pay property taxes, so that the issue of property tax payments may be litigated in this court and, if Ms. Dane falls short here, on direct appeal or by writ of mandate to the Court of Appeal and the California Supreme Court."
Accordingly, the parties stipulated that the tentative ruling on the demurrer be made final as to both defendants, that dismissal of the case be made with prejudice, and that plaintiff's prior motion for a preliminary injunction be denied. On March 27, 2013, the court entered a stipulated order and judgment of dismissal. The notice of entry of order and judgment was filed on April 3, 2013.
On April 8, 2013, plaintiff filed a notice of appeal.
On August 12, 2014, we affirmed the trial court's judgment in a nonpublished opinion. (Dane v. City of Santa Rosa, supra, A138355.) On October 29, 2014, our Supreme Court granted review. On August 9, 2017, following its decision in Weatherford, the Supreme Court transferred the matter back to this court for reconsideration in light of Weatherford.
DISCUSSION
I.
Section 526a, which confers standing to bring suit as a taxpayer, provides in relevant part: "An action to obtain a judgment, restraining and preventing any illegal expenditure of, waste of, or injury to, the estate, funds, or other property of a county, town, city or city and county of the state, may be maintained against any officer thereof, or any agent, or other person acting in its behalf, either by a citizen resident therein, or by a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax therein."
In Weatherford, our Supreme Court described the question before it as "how to read the phrase 'who is assessed for and is liable to pay . . . or, has paid, a tax therein'—a phrase in section 526a that we have not previously construed." (Weatherford, supra, 2 Cal.5th at p. 1246.) In answering that question, the court examined the language and structure of section 526a, as well as its larger legal context, which encompassed "the evolution of standing in California from its common law roots to its various statutory incarnations." (Weatherford, at pp. 1246, 1247.) The court then expressed its understanding of "section 526a not only as a means for certain people to pursue an action enjoining some expenditures of public funds even when those people have not been injured, but also as a measure narrowing the category of taxpayers that are eligible to commence such actions relative to what the common law allows." (Weatherford, at p. 1250.)
After analyzing the statute's language and history, the Weatherford court concluded: "Section 526a does narrow the category of taxpayers able to sue to enjoin certain expenditures of governmental funds. But the Court of Appeal traveled a step too far when it held that the statute requires individual plaintiffs to pay a property tax. Although we need not delineate the precise outer limits of the statute's operation, we can conclude with confidence that limiting its application to property taxpayers reflects an unduly constrained view of the statute's requirements. To begin, nothing in the statute's language suggests such a cramped conception of taxpayer standing. It is no doubt true that the statute's conception of an 'assessed' tax encompasses property taxes. [Citation.] Yet the conclusion that property taxes satisfy the statute's requirement for standing does not suggest that only such taxes suffice. As a matter of statutory drafting, the Legislature could easily have written the statute to restrict standing only to those who pay property taxes. That no such limitation appears in the statute is a strong indication that the statute's invocation of an 'assessed' tax is a general description, not a proxy for the term 'property tax.'
"Nor would it be at all consistent with the statute's 'primary purpose' to hold that payment of a property tax is required. [Citation.] We have previously described this purpose as ' "enabl[ing] a large body of the citizenry to challenge governmental action which would otherwise go unchallenged in the courts because of the standing requirement." ' [Citation.] In light of this purpose, it is crucial that the statute provide a ' "broad basis of relief." ' [Citation.] Accordingly, we have always construed section 526a liberally—though not in a manner inconsistent with the explicit statutory limits it imposes on taxpayer standing—in light of its remedial purpose. [Citations.] Limiting individual plaintiffs' use of the statute to those who pay property taxes is simply incompatible with the recognized need to construe the statute broadly. The Court of Appeal erred in holding to the contrary." (Weatherford, supra, 2 Cal.5th at pp. 1250-1251, fn. omitted.)
In light of its holding, as a matter of statutory interpretation, that payment of property taxes was not required under section 526a, the Weatherford court declined to reach the plaintiff's argument that construing the statute to apply only to property owners violated equal protection.
In the present case, in light of our Supreme Court's analysis and holding in Weatherford—and in contrast to our original holding in this matter—we now hold that the trial court erred in concluding that payment of an assessed property tax is required for taxpayer standing under section 526a.
In light of this holding, we need not address plaintiff's related constitutional claims.
II.
After holding that standing under section 526a does not require the payment of a property tax, the court noted that the question remained: "Which taxes are sufficient to establish standing under the statute?" (Weatherford, supra, 2 Cal.5th at p. 1251.) After noting that the parties' dispute centered on the meaning of "therein" in section 526a, the court stated that its ability to fully consider their competing theories was limited by the case's procedural posture since, in the trial court, the parties had entered into a stipulated judgment of dismissal before any factual development had taken place. This meant that "basic factual questions—including which taxes the defendants actually impose—are unresolved. Such information about local governments' tax structures might shed some light on the consequences of a requirement that taxes be directly assessed against a plaintiff. [Citation.]" (Weatherford, at p. 1252.)
Specifically, the plaintiff argued "that all forms of taxes assessed by state and local governments qualify so long as the plaintiff resides in the defendant locality. Defendants, by contrast, argue[d] that a plaintiff must be 'assessed for and liable to pay' a tax which the defendant imposes directly onto the plaintiff, and thus that the plaintiff pays directly into the defendant." (Weatherford, supra, 2 Cal.5th at p. 1251.)
Given these limitations, the court concluded "that it is sufficient for a plaintiff to allege she or he has paid, or is liable to pay, to the defendant locality a tax assessed on the plaintiff by the defendant locality. Such an allegation satisfied the more stringent version of the requirement that a tax be paid 'therein,' and is consistent with prior holdings recognizing taxpayer standing under section 526a. [Citations.] An allegation of direct tax payment to the defendant locality also does not implicate the competing interest underlying our approach to standing. In sum, we can be certain that the Legislature's purpose, at a minimum, was for the statute to apply where plaintiffs are directly taxed by the defendant locality." (Weatherford, supra, 2 Cal.5th at p. 1252.) Because the record in that case was "devoid of information regarding which taxes defendants actually impose, or whether [the plaintiff] has, in fact, paid any assessed taxes to San Rafael or Marin County," the court could not determine whether the general statements in the plaintiff's complaint satisfied this standard. The court therefore remanded the matter to the appellate court "with directions to reverse the stipulated judgment and remand to the superior court for further proceedings consistent with this opinion." (Ibid.)
The plaintiff in Weatherford had alleged in her complaint that she had paid " 'in and to the City of San Rafael, County of Marin, and State of California' taxes 'routinely imposed by municipalities, counties and the state[].' " (Weatherford, supra, 2 Cal.5th at p. 1252.) --------
The procedural posture of the present case is nearly identical to that in Weatherford, except that the challenge involves the City of Santa Rosa and Sonoma County, where plaintiff resides, rather than San Rafael and Marin County. Just as the plaintiff in Weatherford had alleged as to San Rafael and Marin County, plaintiff alleged in her complaint that she has paid "in and to the City of Santa Rosa, County of Sonoma and the State of California" taxes "routinely imposed by municipalities, counties and the state[], with the exception of property taxes." (See Weatherford, supra, 2 Cal.5th at p. 1252.) Also as in Weatherford, the parties in this case consented to dismissal before any factual development, leaving the record "devoid regarding which taxes defendants actually impose, or whether [plaintiff] has, in fact, paid any assessed taxes to [Santa Rosa] or [Sonoma County]," which means we cannot determine whether the general statements in plaintiff's complaint satisfy the standard set forth in Weatherford. (Ibid.)
III.
In conclusion, because we find the trial court erred in holding that payment of a property tax was required for taxpayer standing under section 526a, we shall reverse the judgment. Moreover, because the case's procedural posture precludes full consideration of the parties' other contentions related to plaintiff's taxpayer standing, we shall remand the matter to the trial court for further proceedings consistent with this opinion. (See Weatherford, supra, 2 Cal.5th at p. 1252.)
DISPOSITION
The judgment is reversed and the matter is remanded to the trial court for further proceedings consistent with this opinion. Costs on appeal are awarded to plaintiff.
/s/_________
Kline, P.J. We concur: /s/_________
Richman, J. /s/_________
Miller, J.