Opinion
NOT TO BE PUBLISHED
Marin County Super. Ct. No. CIV090036
Pollak, J.
Richard Floyd Gilliam, appearing in propria persona, appeals from a judgment dismissing his lawsuit following a successful demurrer by defendants Mathew Cate and Scott Kernan, in their capacities as director and deputy director of the California Department of Corrections. Plaintiff’s complaint alleges, among other things, that defendants are violating Government Code section 11013 by operating the prison canteen at San Quentin State Prison for a profit. We agree with the trial court that plaintiff’s complaint fails to state a viable cause of action against defendants. Accordingly, we shall affirm the judgment.
All statutory references are to the Government Code unless otherwise noted.
Background
Plaintiff is an inmate at San Quentin State Prison. On May 5, 2008, he filed a claim against the “California Department of Corrections and its Director” with the California Victim Compensation and Government Claims Board alleging that “the Department of Corrections was violating state law by allowing prison canteens to overcharge inmates for goods.” He requested $260.88 in damages.
After his claim was denied, plaintiff filed a civil action against defendants alleging causes of action for “extortion, breach of contract, conflict of interest, violation of state law, malfeasance, [and] fraud.” The complaint alleges, among other things, that defendants willfully and knowingly violated section 11013 “by artificially raising inmate canteen prices above an amount that would operate canteens on a non-profit basis as required by state law.” An amended complaint filed six months later essentially reiterated the same allegations. The trial court sustained a demurrer by defendants to the amended complaint on the ground that it fails to allege compliance with the claims statute to the extent it purports to assert causes of action for extortion, breach of contract, conflict of interest, malfeasance and fraud. The court also found that the “allegation that defendants charge prices above an amount that would operate canteens on a nonprofit basis by itself is insufficient” to state a cause of action for a violation of section 11013. Plaintiff was given leave to amend.
Plaintiff filed a second amended complaint alleging a single cause of action for a violation of section 11013. The amended complaint alleges that defendants are violating section 11013 “by pricing items in inmate canteens beyond amounts that would allow them to operate as non-profit as required by statutory law.” Plaintiff requested $552.07 in damages and sought “injunctive relief compelling the Department of Corrections to maintain canteen prices at amounts that will operate each prison canteen on a non-profit basis as mandated and Government Code section 11013, ” and an order directing defendants to “place 4.4 million dollars, or the amount of profit derived from unlawful pricing practices in prison canteens, into an account under supervision of the court to be used solely for the benefits of inmates confined to the Department of Corrections as mandated by Penal Code section 5006.”
The trial court sustained without leave to amend defendants’ demurrer to the amended complaint on the ground that it fails to state a cause of action. The court reiterated its prior ruling that the allegation that defendants are charging prices above those necessary to operate canteens on a non-profit basis is insufficient to state a cause of action for a violation of section 11013. Thereafter, judgment was entered in favor of defendants and plaintiff filed a timely notice of appeal.
Discussion
“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
Plaintiff contends that the court erred in sustaining the demurrer to the cause of action for a violation of section 11013. He argues that section 11013 imposes a mandatory duty on defendants to operate the canteen on a nonprofit basis and that the allegation that they are pricing items in a manner that violates this duty is sufficient to state a claim. However, section 11013 is not applicable to prison canteens and nothing in the amended complaint suggests that defendants are violating Penal Code section 5005, which governs canteens operated by the Department of Corrections.
Because the applicability of section 11013 to prison canteens had not been addressed by the parties in the trial court or on appeal, we requested and received further briefing on this issue.
Section 11013 provides that any store or canteen authorized by that section “shall be operated on a nonprofit basis.” The last sentence of section 11013 states, however, “This section shall not apply to any institution at which a store or canteen is authorized to be established under existing law.” Section 11013 was first enacted in 1955. (Stats. 1955, ch. 982, § 1.) Penal Code section 5005, first enacted in 1945, authorizes the Department of Corrections to maintain a canteen at any prison under its jurisdiction. (Stats. 1945, ch. 154, § 1.) Thus, prison canteens operated by the Department of Corrections are governed by the provisions of the Penal Code, not by section 11013.
Section 11013 reads in relevant part, “The director of any state department, subject to approval of the Department of General Services, may establish and maintain, or by contract or otherwise cause to be established and maintained by any person or organization, at any institution under the jurisdiction of such department, a store or canteen for the sale to, or for the benefit of, inmates, patients and other persons entitled to institutional services, or employees of such institution, of candies, tobacco products, packaged food, nonalcoholic beverages and other articles. Such stores or canteens shall be conducted subject to rules and regulations of the department and rental, utilities and service charges shall be fixed and collected from such stores or canteens in an amount sufficient to reimburse the institution for its costs in connection with such store or canteen. The store or canteen when conducted by the institution or under the direction of the superintendent thereof, shall be operated on a nonprofit basis. Any profit derived by the institution from any store or canteen shall be deposited for the use and benefit of said inmates, patients or persons entitled to institutional services. [¶] This section shall not apply to any institution at which a store or canteen is authorized to be established under existing law.”
Penal Code section 5005 authorizes the Department of Corrections to “maintain a canteen at any prison or institution under its jurisdiction for the sale to persons confined therein of toilet articles, candy, notions, and other sundries, and may provide the necessary facilities, equipment, personnel, and merchandise for the canteen.” Penal Code section 5005 provides further, “The sale prices of the articles offered for sale shall be fixed by the director at the amounts that will, as far as possible, render each canteen self- supporting.” Penal Code section 5006 establishes the “Inmate Welfare Fund of the Department of Corrections” and provides that “[t]he money in the fund shall be used for the benefit, education, and welfare of inmates of prisons and institutions under the jurisdiction of the Department of Corrections, including but not limited to the establishment, maintenance, employment of personnel for, and purchase of items for sale to inmates at canteens maintained at the state institutions, and for the establishment, maintenance, employment of personnel and necessary expenses in connection with the operation of the hobby shops at institutions under the jurisdiction of the Department of Corrections. [¶] There shall be deposited in the Inmate Welfare Fund all net proceeds from the operation of canteens and hobby shops and any moneys which may be assigned to the state prison by prisoners for deposit in the fund. The moneys in the fund shall constitute a trust held by the Director of Corrections for the benefit and welfare as herein defined of all of the inmates of institutions and prisons under the jurisdiction of the Department of Corrections.” These statutes vest defendants with broad discretion to set the price of items sold in the canteen. (See In re Hamilton (1996) 41 Cal.App.4th 926, 934-935.)
In his supplemental brief, plaintiff argues that Penal Code section 5005 is not controlling because it only authorizes the Department of Corrections to maintain rather than establish a prison canteen. The establishment of the canteen, however, is necessarily implicit in Penal Code section 5005. Moreover, plaintiff’s claim arises out of the alleged mismanagement of the canteen, not its establishment.
In Hamilton, the court held that the imposition by the Director of the Department of Corrections of a 10 percent surcharge on all handicraft items bought or sold by inmates incarcerated at San Quentin is within the director’s broad discretion. (In re Hamilton, supra, 41 Cal.App.4th at pp. 934-935.) The court observed, “The Legislature has vested the director with considerable discretionary power by which to attain the goal of a self-supporting program. The subject surcharge clearly falls within the ambit of this power.” (Id. at p. 933.) The court concluded that the surcharge was necessary to defray costs and identified “numerous costs associated with San Quentin’s handicraft program. Although these apparently do not include personnel costs, they include numerous other cost items such as: the establishment and maintenance of the prison handicraft shop; the purchase of new equipment for the shop; postage for inmates’ purchase orders; fairs and exhibitions for the purpose of exhibiting and selling handicraft products; and loans for craftsmen in need.” (Id. at pp. 934-935.)
In this case, plaintiff’s allegation that defendants are “pricing items in inmate canteens beyond amounts that would allow them to operate as nonprofit” does not state a cause of action for violation of Penal Code section 5005, which requires only that the canteens attempt to be self-supporting. Penal Code section 5006 clearly implies that prison canteens may price items so as to generate net proceeds, so long as those proceeds are used in the manner required by the statute. Plaintiff has not alleged that the revenue generated by the canteens, including any net profit, is not being applied to expenses reasonably related to the maintenance and operation of the canteen or for the benefit of the inmates. Accordingly, the trial court properly sustained defendants’ demurrer to the second amended complaint.
In his brief, plaintiff suggests that the excess profit being made by defendants is reflected in a memorandum from the Department of Corrections in which defendants impose a 65 percent mark-up on goods sold in the canteen and acknowledge that the “net profit for the year was $1.1 million for the IWF [Inmate Welfare Fund].” The following sentence of that memorandum states, however, “The cost to replace the current automated canteen system will require an IWF cash reserve for the payment of the new canteen system and on-going system maintenance costs. Currently the IWF is paying for the required infrastructure for a new system at the institutions, and for both a Technical Project Manager to oversee the project and solicit vendor estimates to replace the current system, and an Independent Project Oversight Consultant. Consequently, the 65 percent average mark-up will be continued to maintain the cash reserve.” Plaintiff does not argue that this is an improper use of the revenue generated by canteen sales.
Plaintiff has not suggested that the defects in his complaint could be cured by amendment. Accordingly, we need not consider whether the court properly denied him further leave to amend.
2. Extortion, Breach of Contract, Conflict of Interest, Malfeasance and Fraud
Plaintiff contends that the court improperly sustained defendants’ demurrer to his causes of action for extortion, breach of contract, conflict of interest, malfeasance and fraud. Section 945.4 provides that “no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with... Section 910... until a written claim therefore has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board....” Section 910, in turn, requires that the claim state the “date, place, and other circumstances of the occurrence or transaction which gave rise to the claim asserted” and provide “[a] general description of the... injury, damage or loss incurred so far as it may be known at the time of presentation of the claim.” “The purpose of these statutes is ‘to provide the public entity sufficient information to enable it to adequately investigate claims and to settle them, if appropriate, without the expense of litigation.’ [Citation.] Consequently, a claim need not contain the detail and specificity required of a pleading, but need only ‘fairly describe what [the] entity is alleged to have done.’ [Citations.] As the purpose of the claim is to give the government entity notice sufficient for it to investigate and evaluate the claim, not to eliminate meritorious actions [citation], the claims statute ‘should not be applied to snare the unwary where its purpose has been satisfied.’ ” (Stockett v. Association of Cal. Water Agencies Joint Powers Ins. Authority (2004) 34 Cal.4th 441, 446.) “ ‘ “If a plaintiff relies on more than one theory of recovery against the [governmental agency], each cause of action must have been reflected in a timely claim.” ’ ” (Fall River Joint Unified School Dist. v. Superior Court (1988) 206 Cal.App.3d 431, 434.)
Here, plaintiff’s administrative claim alleged only that defendants are “violating state law by allowing prison canteens to overcharge inmates for goods.” Nothing in this claim put defendants on notice of liability claim for extortion, breach of contract, conflict of interest, malfeasance or fraud. Accordingly, the court properly sustained defendants’ demurrers to these causes of action in the first amended complaint.
Disposition
The judgment is affirmed.
We concur: McGuiness, P. J., Siggins, J.