Los Alamitos Unified School District v. Howard Contracting, Inc.
229 Cal. App. 4th 1222
| Cal. Ct. App. | 2014Background
- Los Alamitos Unified School District entered a lease-leaseback with Byrom-Davey to construct upgrades to a high school track and athletic field; title to improvements vests in the District at lease end.
- District filed a validation action under Code Civ. Proc. § 860 seeking judicial validation of the lease-leaseback; summons was published and posted; Howard Contracting answered.
- Trial court sustained demurrer to an affirmative defense about improper service, overruled other defenses, and granted the District summary judgment validating the agreement.
- Howard appealed, arguing the lease-leaseback illegally avoided competitive bidding required by public contract law and raised procedural challenges (service, judge assignment, pre-judgment construction).
- The trial court also awarded the District statutory costs for service by publication; Howard moved to tax costs and appealed that postjudgment order.
Issues
| Issue | Plaintiff's Argument (District) | Defendant's Argument (Howard) | Held |
|---|---|---|---|
| Whether Ed. Code § 17406 exempts school districts from competitive bidding for lease-leaseback projects | § 17406 expressly permits lease-leaseback “without advertising for bids,” so no bidding required | Public contract law and Ed. Code § 17417 require competitive bidding; § 17406 should not displace that requirement | § 17406 exempts lease-leaseback arrangements from the competitive-bid requirements; summary judgment for District affirmed |
| Whether § 17406 covers entire lease-leaseback (site lease + sublease) or only site lease | § 17406 governs the arrangement and prevents competitive bidding on the transaction as structured | § 17406 applies only to the site lease, not the sublease; otherwise it improperly swallows § 17417 | Court interprets § 17406 to apply to the lease-leaseback arrangement and rejects Howard’s narrow reading |
| Whether procedural defects (summons form, timing, judge assignment, pre-judgment construction) invalidate proceedings | Publication/posting and exhibit provided a proper response date; retired judge assignment was valid; statutes permit commencing work before validation | Summons defective for not giving precise response time; improper judge and District started construction prematurely | Court finds summons adequate, no timely disqualification claim, and statutes allow commencing work; procedural challenges fail |
| Whether costs for service by publication should be taxed against Howard | Costs are statutory and allowable in validation actions; District prevailed | Shifting service costs penalizes a member of public exercising right to challenge validation | Court affirms award of reasonable statutory costs; no abuse of discretion |
Key Cases Cited
- Merrill v. Navegar, Inc., 26 Cal.4th 465 (Cal. 2001) (summary judgment standard)
- Domar Electric, Inc. v. City of Los Angeles, 9 Cal.4th 161 (Cal. 1994) (purpose of competitive bidding in public works)
- San Diego Service Authority for Freeway Emergencies v. Superior Court, 198 Cal.App.3d 1466 (Cal. Ct. App. 1988) (absent statute, public entity not bound to competitive bidding)
- Katz v. Campbell Union High School Dist., 144 Cal.App.4th 1024 (Cal. Ct. App. 2006) (summons defects in validation actions)
- City of Ontario v. Superior Court, 2 Cal.3d 335 (Cal. 1970) (validation action timing and effect)
- People v. Scott, 15 Cal.4th 1188 (Cal. 1997) (failure to timely seek judge disqualification waives claim)
- Foothill-De Anza Community College Dist. v. Emerich, 158 Cal.App.4th 11 (Cal. Ct. App. 2007) (review of taxing costs in validation actions)