Opinion
D074133
03-13-2020
LIONS COMMUNITY SERVICE CORPORATION, Plaintiff and Appellant, v. CIVIC SAN DIEGO, Defendant and Respondent.
Michael F. Armstrong for Plaintiff and Appellant. Best Best & Krieger, Shawn Hagerty, and Matthew L. Green for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2015-00040292-CU-BC-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Joel R. Wohlfeil, Judge. Affirmed. Michael F. Armstrong for Plaintiff and Appellant. Best Best & Krieger, Shawn Hagerty, and Matthew L. Green for Defendant and Respondent.
Lions Community Service Corporation (Lions) appeals a judgment in favor of Civic San Diego following an order granting summary judgment on Lions's complaint for negligence and negligent misrepresentation. Lions alleged that Civic San Diego (or its predecessor) erroneously billed Lions for certain payments due to the City of San Diego. The trial court found the undisputed facts showed that Lions's claims were barred by a limitation of liability clause in the contract establishing the payments. Lions contends this finding was erroneous. We disagree and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Consistent with our standard of review of orders granting summary judgment, we recite the historical facts in the light most favorable to Lions as the nonmoving party. (See Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768 (Saelzler); Light v. Dept. of Parks & Recreation (2017) 14 Cal.App.5th 75, 81.)
In 1980, Lions entered into a Disposition and Development Agreement (DDA) with the Redevelopment Agency of the City of San Diego. Under the DDA, Lions took title to City-owned land in downtown San Diego and agreed to construct housing for low-income, elderly, and disabled residents there. For any period in which the land and improvements would be exempt from property tax payments, the DDA obligated Lions to make equivalent payments to the Redevelopment Agency in the same amount and on the same schedule as property taxes.
The Redevelopment Agency engaged Civic San Diego's predecessor to provide various services, including coordinating payments. Civic San Diego continues to provide similar services to the City of San Diego, which took over the Redevelopment Agency's assets, properties, and contracts when the Agency was dissolved in 2012.
The DDA contains the following limitation of liability, which is the focus of this appeal: "No member, official, employee or consultant of the Agency or [Civic San Diego's predecessor] shall be personally liable to [Lions], or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to [Lions] or its successor, or on any obligations under the terms of this Agreement."
The dispute here arose in 2011. In October of that year, Civic San Diego's predecessor informed Lions's property manager that Lions's payment in lieu of property taxes for the fiscal year 2011-2012 would be approximately $133,000. It requested a check payable to the City of San Diego Treasurer, and Lions made the requested payment. The next year, in November 2012, Civic San Diego requested another payment to the City Treasurer, approximately $136,000, for fiscal year 2012-2013. Lions made a first installment payment of half that amount the same month.
Lions eventually concluded that, under the terms of the DDA, its obligation to make payments in lieu of property taxes expired on July 29, 2011. It requested a refund of its 2011 and 2012 payments from Civic San Diego, with interest. When Civic San Diego did not agree, Lions filed this lawsuit. Lions's operative complaint alleges that Civic San Diego and its predecessor negligently billed Lions for the 2011-2012 and 2012-2013 payments in lieu of property taxes, and misrepresented that the payments should be made, when they knew or should have known that the payments were no longer due.
Civic San Diego moved for summary judgment on the ground that Lions's claims were barred by the limitation of liability clause in the DDA, among other reasons. In opposition, Lions argued that the clause was against public policy and unenforceable under Civil Code section 1668 and Tunkl v. Regents of University of Cal. (1963) 60 Cal.2d 92 (Tunkl). The trial court disagreed with Lions and granted the motion. Lions appeals.
DISCUSSION
I
Summary Judgment Standards
"A defendant's motion for summary judgment should be granted if no triable issue exists as to any material fact and the defendant is entitled to a judgment as a matter of law." (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1002-1003 (Kahn).) A defendant moving for summary judgment on an affirmative defense has "the initial burden of showing that the undisputed facts support each element of the defense. [Citation.] It 'must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not—otherwise, [it] would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.' [Citation.] If a defendant fails to meet this initial burden, its motion should be denied regardless of the plaintiff's evidentiary showing in opposition." (Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 388-389.)
If the defendant "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." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) "The plaintiff . . . shall not rely upon the 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 the cause of action or a defense thereto." (Code Civ. Proc., § 437c, subd. (p)(2).)
"We review the record and the determination of the trial court de novo." (Kahn, supra, 31 Cal.4th at p. 1003.) "In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [the plaintiff's] evidentiary submission while strictly scrutinizing defendants' own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor." (Saelzler, supra, 25 Cal.4th at p. 768.)
"Although our review of a summary judgment is de novo, it is limited to issues which have been adequately raised and supported in plaintiffs' brief. [Citations.] Issues not raised in an appellant's brief are deemed waived or abandoned." (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6; accord, Frittelli, Inc. v. 350 North Canon Drive, L.P. (2011) 202 Cal.App.4th 35, 41.)
II
Limitation of Liability
Lions contends the court erred by applying the limitation of liability in the DDA to bar its claims against Civic San Diego. It argues that the limitation of liability implicates the public interest and is therefore invalid. "[T]he issue of whether a contractual provision is contrary to public policy, or a statute which embodies such public policy, is a question of law that we may independently determine." (Health Net of California v. Department of Health Services (2003) 113 Cal.App.4th 224, 232.)
"Traditionally the law has looked carefully and with some skepticism at those who attempt to contract away their legal liability for the commission of torts. [Citation.] This general policy of the common law found legislative expression early in California's history with the enactment of Civil Code section 1668." (Gardner v. Downtown Porsche Audi (1986) 180 Cal.App.3d 713, 716 (Gardner).) That section provides, "All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law." (Civ. Code, § 1668.) As subsequent decisions have explained, "This section made it clear a party could not contract away liability for his fraudulent or intentional acts or for his negligent violations of statutory law. However, a contract exempting from liability for ordinary negligence is valid where no public interest is involved and where no statute expressly prohibits it." (Nunes Turfgrass v. Vaughan-Jacklin Seed Co. (1988) 200 Cal.App.3d 1518, 1534; see City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 756 (City of Santa Barbara).)
Our Supreme Court described the public interest exception in Tunkl, supra, 60 Cal.2d 92. It identified six circumstances that tend to indicate that a transaction implicates the public interest: "It concerns a business of a type generally thought suitable for public regulation. The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents." (Id. at pp. 98-101, fns. omitted.)
The Supreme Court explained that the public interest here is the protection of vulnerable contracting parties, who may be compelled to agree to limitations on tort liability, without consideration, in order to obtain necessary services. "While obviously no public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party, the above circumstances pose a different situation. In this situation the releasing party does not really acquiesce voluntarily in the contractual shifting of the risk, nor can we be reasonably certain that he receives an adequate consideration for the transfer. Since the service is one which each member of the public, presently or potentially, may find essential to him, he faces, despite his economic inability to do so, the prospect of a compulsory assumption of the risk of another's negligence. The public policy of this state has been, in substance, to posit the risk of negligence upon the actor; in instances in which this policy has been abandoned, it has generally been to allow or require that the risk shift to another party better or equally able to bear it, not to shift the risk to the weak bargainer." (Tunkl, supra, 60 Cal.2d at p. 101.) Thus, courts consider the circumstances identified in Tunkl to determine whether "a particular release concerns a service that transcends a purely private agreement and affects the public interest." (City of Santa Barbara, supra, 41 Cal.4th at p. 757.)
The facts of Tunkl are illustrative. The plaintiff sought medical care at a University of California research hospital. (Tunkl, supra, 60 Cal.2d at p. 94.) When the plaintiff was admitted, he signed a contract absolving the hospital of any liability for the negligence of its employees, as long as the hospital used due care in selecting the employees. (Ibid.) Considering the circumstances above, the Supreme Court concluded that the transaction implicated the public interest: "In brief, the patient here sought the services which the hospital offered to a selective portion of the public; the patient, as the price of admission and as a result of his inferior bargaining position, accepted a clause in a contract of adhesion waiving the hospital's negligence; the patient thereby subjected himself to control of the hospital and the possible infliction of the negligence which he had thus been compelled to waive. The hospital, under such circumstances, occupied a status different than a mere private party; its contract with the patient affected the public interest." (Id. at p. 102.)
Other instances where courts have invalidated contractual limitations on liability have similarly implicated the public interest, with relatively vulnerable plaintiffs accessing important public services. (See, e.g., Henrioulle v. Marin Ventures, Inc. (1978) 20 Cal.3d 512, 518-519 [residential property lease]; Gavin W. v. YMCA of Metropolitan Los Angeles (2003) 106 Cal.App.4th 662, 671-676 [child care]; Gardner, supra, 180 Cal.App.3d at pp. 717-719 [consumer auto repair]; see also City of Santa Barbara, supra, 41 Cal.4th at pp. 757-758 [collecting cases].)
In its briefing, Lions addresses only two of the Tunkl factors: (1) whether the transaction concerns a business of a type generally thought suitable for public regulation and (2) whether the party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. We agree that the transaction here (municipal redevelopment) is generally suitable for public regulation. But Lions misunderstands the second factor. It argues, "The housing project which is the subject of the [DDA] . . . is one to assist elderly, low income, and disabled people. It is subsidized with public funds. As such, by its very nature, [it] is a matter involving the public interest." (Underlining omitted.) Lions erroneously focuses on its own part of the transaction, whereas the second Tunkl factor looks to the relative importance of the services provided by the party seeking exculpation, here Civic San Diego. This factor applies where, for example, the public may be forced to accept limitations on tort liability from those who provide essential services. Unlike a hospital, or a child care provider, or even an auto repair shop, Civic San Diego's services under the DDA were not something the public at large relied upon or needed. They were specialized services to the City of San Diego and private parties engaged in redevelopment activities. They were not of great importance to members of the public, let alone matters of practical necessity for them.
Although Lions does not address them, our consideration of the remaining factors confirms that the transaction at issue here does not implicate the public interest. Civic San Diego does not hold itself out as willing to perform its services for any member of the public who seeks them. It provides specialized redevelopment services to the City of San Diego. (See CAZA Drilling (California), Inc. v. TEG Oil & Gas U.S.A., Inc. (2006) 142 Cal.App.4th 453, 469.) Civic San Diego does not possess a decisive advantage in bargaining strength, and it did not present a standard adhesion contract to Lions. Indeed, Civic San Diego and its predecessor were not parties to the DDA at all. The DDA itself is not a standard consumer contract; it is a complex redevelopment transaction negotiated and voluntarily entered into between two sophisticated entities. Thus, even considering the City of San Diego's bargaining power, we do not find that the Tunkl factors favor invalidation. (See ibid.) Finally, neither Lions nor its property was placed under the control of Civic San Diego and subject to the risk of its carelessness. The loss alleged here was the result of Lions's voluntary payment. Civic San Diego did not control any Lions property. Moreover, Lions could have discovered for itself that the payments in lieu of taxes were no longer required merely by reviewing the DDA and other transaction documents. This transaction does not reflect the inequality of the parties that the Supreme Court in Tunkl was concerned about.
Further supporting our conclusion is the fact that the DDA's limitation of liability is only partial. It did not foreclose any recovery by Lions; it merely limited Lions's recovery to the City of San Diego, the party whose predecessor signed the DDA and who was entitled to in lieu payments under the agreement. Lions has not shown that such a partial limitation should be invalidated. (See Farnham v. Superior Court (1997) 60 Cal.App.4th 69, 77-78 [upholding a contract provision waiving the right to sue corporate officers, directors, and employees for their wrongful acts, where the contract provided a remedy against the corporation].)
We express no opinion regarding the viability of any such claims.
Lions also appears to argue that the limitation on liability is invalid under Civil Code section 1542. That section provides, "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." (Civ. Code, § 1542.) Lions has not shown that the limitation of liability clause here is a "general release" covered by this statute. "A release has been defined as the abandonment, relinquishment or giving up of a right or claim to the person against whom it might have been demanded or enforced [citations] and its effect is to extinguish the cause of action . . . ." (Pellett v. Sonotone Corp. (1945) 26 Cal.2d 705, 711; see Civ. Code, § 1541.) Here, Lions did not release Civic San Diego (or its predecessor) from any existing claims. It was therefore not a general release under the statute. (See Mesmer v. White (1953) 121 Cal.App.2d 665, 674-675.)
Lions claims the clause was "not clear or explicit with regard to its scope, particularly with regard to known and unknown future claims." We disagree. The clause identifies the parties excluded from liability and the types of claims involved. The clause is necessarily prospective, since it involves obligations under the DDA and amounts due to Lions. Lions has not shown the clause was insufficiently clear or explicit. The intent of the parties to exclude consultants such as Civic San Diego and its predecessor from liability is evident. (See Bennett v. United States Cycling Federation (1987) 193 Cal.App.3d 1485, 1490.)
Lions mentions several other legal principles regarding exculpatory clauses, but it does not offer any cogent legal argument why they should apply to limit or invalidate the type of clause at issue here. "Mere suggestions of error without supporting argument or authority other than general abstract principles do not properly present grounds for appellate review. The court is not required to make an independent, unassisted study of the record in search of error. The point is treated as waived and we pass it without further consideration." (Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100 Cal.App.4th 1066, 1078.) " 'We are not bound to develop appellants' arguments for them. [Citation.] The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived.' " (Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956.) Lions has not shown the court erred by granting Civic San Diego's motion for summary judgment.
DISPOSITION
The judgment is affirmed. Respondent is entitled to its costs on appeal.
GUERRERO, J. WE CONCUR: HUFFMAN, Acting P. J. AARON, J.