86 Cal.App.5th 1272
Cal. Ct. App.2022Background
- Parties: California-American Water Company (Cal‑Am) and Monterey County Water Resources Agency sued Marina Coast Water District over collapse of a regional desalination project (RDP) and related torts; Stephen Collins (a consultant) had undisclosed payments and later was found to have violated Gov. Code §1090.
- The parties executed a suite of interrelated RDP agreements in 2010 (WPA, Reimbursement Agreement, Settlement Agreement, Project Management Agreement, Credit Line Agreement); PUC approval was a condition precedent and came later in 2010–2011.
- Extensive pre‑suit negotiations and mediations occurred in 2011–2012; Marina’s counsel made statements at the end of mediation that plaintiffs contend waived the Government Claims Act presentation requirement or invoked the contract/mediation procedures.
- Cal‑Am presented a formal Gov. Claims Act claim in Sept. 2012 and sued in Oct. 2012; Phase One (2014 trial, affirmed on appeal) found Collins’s conduct violated §1090 and voided most RDP agreements.
- In post‑judgment litigation (2015 onward) plaintiffs pleaded negligence and interference claims against Marina and RMC; Marina moved for summary adjudication in 2019: against Cal‑Am on Claims Act compliance and against Monterey on a two‑year statute of limitations theory.
- The trial court granted both summary adjudications; the Court of Appeal reversed, holding there were triable issues on waiver, applicability of contractual dispute procedures, and accrual of Monterey’s negligence claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cal‑Am’s tort claims are barred for failure to comply with the Government Claims Act | Cal‑Am: either it substantially complied, or alternative contractual dispute procedures (WPA, Mediation Agreement, Credit Line) governed, or Marina waived/estopped enforcement of claim presentation | Marina: Cal‑Am didn’t satisfy the Act; any contractual alternative cannot supplant the Act because the WPA was void ab initio; no valid waiver—only the Board could waive and it never did | Reversed: triable issues existed on express and implied waiver, applicability of contractual alternatives, and substantial compliance; summary adjudication improper |
| Whether Marina impliedly or expressly waived the statutory claim‑presentation requirement | Cal‑Am: Marina’s counsel’s mediation statements and conduct amounted to express waiver; Marina’s conduct also supports implied waiver | Marina: waiver requires formal Board action; counsel had no authority; implied waiver would require detrimental reliance | Reversed: waiver need not be based on detrimental reliance; apparent/actual authority of counsel and the record create triable issues of fact on both express and implied waiver |
| Whether the WPA or Mediation Agreement (contractual claims procedures) can displace the Government Claims Act even though the WPA was later declared void | Cal‑Am: §930.4 makes contractual procedures exclusive when parties entered into them and complied; void status after the fact doesn't negate that parties followed the agreed procedure | Marina: a contract void ab initio cannot supply an alternative claims procedure; enforcing it would treat the void contract as effective | Reversed: court found the trial court erred in treating void status as dispositive; triable issues exist whether contractual procedures applied and were followed |
| Whether Monterey’s negligence claim accrued by April 6, 2010 (two‑year limitations) | Monterey: its negligence claim is vicarious (respondeat superior and contractor supervision) and did not accrue until plaintiffs discovered Marina’s negligent supervision—years later; uncertainty in 2010 precluded accrual | Marina: injury and causation occurred no later than April 6, 2010 when the tainted contracts were executed (§1090 violation made contracts void and caused harm) | Reversed: accrual is a factual question; summary adjudication wrongly equated Collins’s §1090 violation with accrual of plaintiff’s distinct vicarious negligence claim and ignored discovery rule and unresolved factual disputes |
Key Cases Cited
- Stockett v. Association of California Water Agencies Joint Powers Ins. Authority, 34 Cal.4th 441 (2004) (claims statute purpose: permit investigation/settlement; claim need only fairly describe entity’s conduct)
- DiCampli‑Mintz v. County of Santa Clara, 55 Cal.4th 983 (2012) (policy rationales for claims‑presentation rules)
- City of Stockton v. Superior Court, 42 Cal.4th 730 (2007) (limits on estoppel/waiver defenses to Claims Act; separate treatment of waiver and estoppel)
- Arntz Builders v. City of Berkeley, 166 Cal.App.4th 276 (2008) (local contractual claims procedures can exclusively govern and supplant statutory process)
- Bickel v. City of Piedmont, 16 Cal.4th 1040 (1997) (waiver is intentional relinquishment; question of fact)
- Lynch v. California Coastal Commission, 3 Cal.5th 470 (2017) (distinguishing waiver from estoppel; reliance element required for estoppel only)
- Blanton v. Womancare, Inc., 38 Cal.3d 396 (1985) (attorney’s apparent/implied authority can bind client on procedural matters)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (2001) (standards for summary judgment/defendant’s burden to negate plaintiff’s theories)
- Merrill v. Navegar, Inc., 26 Cal.4th 465 (2001) (summary adjudication must negate each element of plaintiff’s cause of action)
- Norgart v. Upjohn Co., 21 Cal.4th 383 (1999) (accrual and discovery rule principles for statutes of limitations)
- Fox v. Ethicon Endo‑Surgery, Inc., 35 Cal.4th 797 (2005) (policy balance underlying statutes of limitation; caution against forcing premature suits)
- State of California v. Superior Court, 32 Cal.4th 1234 (2004) (claim presentation is an element of causes of action subject to the Claims Act)
- California‑American Water Co. v. Marina Coast Water Dist. (Cal‑Am One), 2 Cal.App.5th 748 (2016) (prior Phase One decision finding §1090 violation and voiding agreements)
- California‑American Water Co. v. Marina Coast Water Dist. (Cal‑Am Two), 18 Cal.App.5th 571 (2017) (affirming fee award and discussing effect of void ab initio on remedies)