Opinion
A157086
08-13-2020
YOUR TOWN ONLINE, INC., Plaintiff and Appellant, v. COUNTY OF MENDOCINO., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Mendocino County Super. Ct. No. SCUK-CVG-17-69728)
Plaintiff Your Town Online, Inc. appeals a judgment in favor of defendant County of Mendocino (the county) following entry of an order sustaining without leave to amend the county's demurrer to plaintiff's complaint for breach of contract, promissory estoppel, and breach of the covenant of good faith and fair dealing. Plaintiff contends the trial court erred in holding that its complaint is barred by its failure to comply with the notice requirements of the Government Claims Act, Government Code section 810 et seq. We agree that plaintiff's failure to timely file a proper notice of claim barred this action. Accordingly, we shall affirm the judgment.
All further statutory references are to the Government Code.
Background
Plaintiff's third amended complaint (complaint) alleges as follows: In December 2013, the county library disseminated two written requests for proposals related to the provision of network services to the library. Prior to dissemination of the requests for proposal, the library had received approval from the county board of supervisors to award the contract so long as "E-Rate" funding could be obtained to fund the project. Plaintiff submitted a proposal to the library which was in compliance with the terms and conditions of the requests for proposals. In March 2014, plaintiff was informed that its proposal had been accepted and the library would proceed with submitting an application for E-Rate funding. Sometime after March 2014, plaintiff was informed via correspondence from E-Rate that E-Rate had approved funding of the plaintiff's proposal. In reliance on E-Rate's letter, plaintiff commenced efforts to deliver on the terms of the contract. Thereafter, however, the county informed plaintiff that it was terminating the contract on the ground that it is "not eligible for additional E-Rate programs it had applied for, specifically pertaining to internet services, etc."
The complaint alleges that " 'E-Rate' is the vernacular used for the Schools and Libraries Program administered by the Universal Service Administrative Company" and that the "aim of the 'E-Rate' program is to facilitate the provision of economical telecommunications and internet services to schools and libraries." Plaintiff alleges that "the 'E-Rate' program has been a routine funding source for the Mendocino County Library system."
In March 2015, plaintiff received additional correspondence from E-Rate, "the essence of which was to confirm that, contrary to the prior representations by [county counsel], the county was still approved for E-Rate funding for the contract." Between March 2015 and June 2016, plaintiff made public records requests seeking additional information from the county regarding the termination of the contract.
In February 2017, plaintiff filed a notice of claim with the county. The description of the claim reads, "[Plaintiff] was awarded a contract for provision of network and internet services for the Mendocino County library branches subject to the approval of an e-rate request for funding. [The county] has deprived [plaintiff] of the benefits of that contract." The notice identifies the "date of loss" as August 2017. The claim was rejected in March 2017.
As discussed post, in June 2018, plaintiff submitted a declaration stating that the 2017 date was a clerical error and that the correct date of loss was August 2016.
This action was filed in September 2017. Following successful demurrers to plaintiff's first and second amended complaints based on plaintiff's failure to comply with the Government Claims Act, plaintiff filed its third amended complaint in August 2018.
The county again demurred to the complaint on the ground, among others, that plaintiff failed to comply with the notice requirements of the Government Claims Act. The court sustained the demurrer without leave to amend. The court explained, "Despite four opportunities to state a proper claim, plaintiff is still unable to satisfy the requirements set forth in the Government Claims Act. Even though plaintiff attempts to reframe its allegations made in earlier pleadings it is clear from the face of the complaint that plaintiff was on notice of an alleged breach of contract prior to March 2015. Further the events are alleged to have occurred in 2013 and 2014. The claim should have been filed on or before March 2016. The claim filed in February 2017, referenced events occurring in August 2017. While plaintiff may argue that it meant August 2016 that still does not cure the defect." (Italics omitted.)
Plaintiff timely filed a notice of appeal.
Discussion
Plaintiff's cause of action for breach of contract alleges that the county "breached the terms of the contract, by among other things, refusing to submit the contract to Mendocino County Board of Supervisors for signature despite the fact that (i) the company's proposal had been approved; (ii) E-Rate funding for the company's provision of services under the contract had been secured; (iii) the Mendocino County Board of Supervisors had previously approved the contract so long as E-Rate funding could be obtained; and (iv) falsely stating that the contract was terminated because the county is not eligible for additional E-Rate programs it had applied for, specifically pertaining to internet services, etc." Plaintiff alleges that it "did not discover the aforementioned breach until in or about March 2015, when it received additional correspondence from E-Rate." Plaintiff's two additional causes of action are based on the same conduct.
Section 905 requires the presentation of "all claims for money or damages against local public entities," subject to exceptions not relevant here. (See City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 738 ["Contract claims fall within the plain meaning of the requirement that 'all claims for money or damages' be presented to a local public entity."].) Breach of contract claims must be presented within a year after accrual. (§ 911.2.)
"The purpose of the claims statutes is not to prevent surprise, but '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. [Citations.] It is well-settled that claims statutes must be satisfied even in face of the public entity's actual knowledge of the circumstances surrounding the claim.' " [Citation.] The claims statutes also 'enable the public entity to engage in fiscal planning for potential liabilities and to avoid similar liabilities in the future.' " (City of Stockton v. Superior Court, supra, 42 Cal.4th at p. 738.)
"[N]o 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 . . . until a written claim therefor has been presented to the public entity and has been acted upon . . . or has been deemed to have been rejected . . . ." (§ 945.4.) A plaintiff's "failure to plead facts demonstrating or excusing compliance with the claim presentation requirement of section 900 et seq. may be raised on a general demurrer to the complaint." (State of California v. Superior Court (2004) 32 Cal.4th 1234, 1239.)
Here, plaintiff's complaint alleges the breach of contract occurred sometime after March 2014 and that it learned of the "aforementioned breach" in March 2015. Plaintiff's argument, asserted for the first time on appeal, that its claim did not "accrue" in March 2015 because the "termination" notice from the county was "an anticipatory repudiation that [plaintiff] elected not to treat as a final breach" is unavailing. In Romano v. Rockwell Internal, Inc. (1996) 14 Cal.4th 479, on which plaintiff relies, the court summarized the law regarding accrual of a cause of action for breach of contract as follows: "A cause of action for breach of contract does not accrue before the time of breach. [Citations.] We have established that: 'There can be no actual breach of a contract until the time specified therein for performance has arrived.' [Citation.] Nonetheless, if a party to a contract expressly or by implication repudiates the contract before the time for his or her performance has arrived, an anticipatory breach is said to have occurred. [Citations.] The rationale for this rule is that the promisor has engaged not only to perform under the contract, but also not to repudiate his or her promise. [Citation.] [¶] In the event the promisor repudiates the contract before the time for his or her performance has arrived, the plaintiff has an election of remedies-he or she may 'treat the repudiation as an anticipatory breach and immediately seek damages for breach of contract, thereby terminating the contractual relation between the parties, or he [or she] can treat the repudiation as an empty threat, wait until the time for performance arrives and exercise his [or her] remedies for actual breach if a breach does in fact occur at such time.' " (Id. at pp. 488-489.)
Plaintiff's complaint does not allege an anticipatory repudiation. Nor does it allege an unwillingness by the county to perform in the future. The complaint clearly alleges that the county "breached the terms of the contract, by among other things, refusing to submit the contract to Mendocino County Board of Supervisors for signature despite the fact that (i) the company's proposal had been approved; (ii) E-Rate funding for the company's provision of services under the contract had been secured; (iii) the Mendocino County Board of Supervisors had previously approved the contract so long as E-Rate funding could be obtained; and (iv) falsely stating that the contract was terminated because the county is not eligible for additional E-Rate programs it had applied for, specifically pertaining to Internet services, etc." Thus, the breach alleged in the complaint is the county's refusal to formalize the contract as promised. While a plaintiff "may advance on appeal new legal theories why the allegations of the complaint state a cause of action" (20th Century Ins. Co. v. Quackenbush (1998) 64 Cal.App.4th 135, 139, fn. 3), plaintiff's assertion that a breach did not occur until an unspecified time when the county failed to perform is contrary to the express allegations of the complaint. The breach was alleged to have been discovered in March 2015. As the trial court held, unless excused a timely notice was required to have been filed by March 2016. Even assuming the substance of plaintiff's notice of claim was sufficient, the notice was not filed until February 2017. Plaintiff cannot maintain a claim for damages against the county unless there is an applicable exemption or excuse for not complying with section 911.2. (§§ 905, 911.2, subd. (a), 945.4.)
Initially, plaintiff contends the county waived any objection to the timeliness of the notice by rejecting the claim on the merits rather than as untimely under section 911.3. Section 911.3 reads: "(a) When a claim that is required by Section 911.2 to be presented not later than six months after accrual of the cause of action is presented after such time without the application provided in Section 911.4, the board or other person designated by it may, at any time within 45 days after the claim is presented, give written notice to the person presenting the claim that the claim was not filed timely and that it is being returned without further action. . . . [¶] (b) Any defense as to the time limit for presenting a claim described in subdivision (a) is waived by failure to give the notice set forth in subdivision (a) within 45 days after the claim is presented . . . ." Under section 911.2, only claims "relating to a cause of action for death or for injury to person or to personal property or growing crops" must be presented "not later than six months after the accrual of the cause of action." All other claims, including the present breach of contract claim must be presented "not later than one year after the accrual of the cause of action" (§ 911.2). Accordingly, section 911.3 is not applicable. (Westcon Construction Corp. v. County of Sacramento (2007) 152 Cal.App.4th 183, 199 [Section 911.3 is not applicable to breach of contract claim.].)
Plaintiff also contends the complaint alleges facts sufficient to show that the county is estopped from asserting the claim is untimely. " 'A public entity may be estopped from asserting the limitations of the tort claims statutes where its agents or employees have prevented or deterred the filing of a timely claim by some affirmative act. The required elements for an equitable estoppel are: (1) the party to be estopped must be apprised of the facts; (2) the party to be estopped must intend his or her conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) the other party must rely upon the conduct to his or her injury.' " (Castaneda v. Department of Corrections & Rehabilitation (2013) 212 Cal.App.4th 1051, 1064.) Plaintiff relies on the allegations in the complaint that the county "falsely claimed that the E-Rate funding had not been obtained, failed to produce public records in responding to [plaintiff's] California Public Records Act requests, and also sought delays in responding." Assuming without deciding that these allegations are sufficient to establish conduct by the county intended to delay the filing of the notice, plaintiff has not, and cannot, allege that it was "ignorant of the true state of facts" or that it relied to its detriment on the county's failure to produce the requested records. (See J.J. v. County of San Diego (2014) 223 Cal.App.4th 1214, 1227 [untimely negligence claim is not excused by county's delay in providing reports that substantiated the claim.].)
In J.J. v. County of San Diego, supra, 223 Cal.App.4th at page 1228, the court faulted plaintiff for failing to "distinguish between when her cause of action accrued and the filing of a claim and preserving her rights against a public entity, on the one hand, and determining whether her lawsuit against that public entity, after timely filing a claim, is viable, on the other hand." The court explained that the government claims act only requires plaintiff to provide a " 'general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim.' " (Id. at p. 1228, quoting § 910, subd. (d).) Whether the plaintiff had all the information she needed to determine whether any potential lawsuit against the county was viable is "wholly separate and apart from" the issue of when her cause of action accrued and thus when she was required to notify the county of her claim under section 911.2 and provide the information regarding that claim as then known to her. (J.J., at p. 1229.) Here, the complaint expressly alleges that plaintiff learned of the breach in March 2015 through its correspondence with E-Rate. The complaint alleges further that "[i]n the face of [the] information [learned from E-Rate], [plaintiff] embarked on efforts to obtain additional documents and information from the county concerning, among other things, the veracity and basis for [county counsel's] contention that '. . . the county is not eligible for additional E-Rate programs it had applied for, specifically pertaining to internet services, etc.' " Nothing in the complaint explains how the alleged delay in receiving records prevented the filing of a timely claim. As in J.J. v. County of San Diego, supra, 223 Cal.App.4th at page 1229, plaintiff's attempts to verify or gather evidence to support its claim does not excuse its failure to timely file a notice of claim with the county. Accordingly, the county is not estopped from asserting the untimeliness of the claim.
Plaintiff's rejected request for leave to amend did not proffer any explanation that would excuse the untimeliness of the notice. Accordingly, there was no abuse of discretion in denying leave to amend.
The county's request for judicial notice is denied.
Disposition
The judgment is affirmed.
POLLAK, P. J. WE CONCUR: STREETER, J.
BROWN, J.