Opinion
In March 2004 the City of San Diego (City) publically announced that the rate structure it had been using to bill users of City’s wastewater system had resulted in excessive charges to several classes of users, including residential customers and some commercial and industrial customers. A residential customer, Mr. Shames, timely filed a governmental claim seeking a refund on behalf of residential customers who were overcharged and, after the claim was denied, filed a proposed class action lawsuit on behalf of that class (the Shames action).
After the Shames action was settled and dismissed, California Restaurant Management Systems (CRMS) filed its own governmental claim and then filed the instant putative class action on behalf of restaurant owners. City moved for summary judgment, contending CRMS’s governmental claim was not timely filed and the failure to satisfy the jurisdictional prerequisite required dismissal of CRMS’s proposed class action lawsuit. CRMS opposed the summary judgment motion, arguing the pendency of the Shames action tolled all limitations periods, including the period for filing a governmental claim. The trial court disagreed, and entered judgment in favor of City.
This appeal presents a question of first impression: whether the “equitable tolling” principles outlined in American Pipe & Construction Co. v. Utah (1974)
FACTUAL AND PROCEDURAL BACKGROUND
A. City’s Overcharges to Certain Customers
City operates a regional wastewater treatment and disposal system. In late March 2004 City issued a report that its wastewater user rate charge system did not include any specific cost recovery component for organic materials. The report stated that, as a result of this omission, residential customers and certain commercial and industrial customers who discharged lower levels of organic materials into the sewer system were paying “a disproportionately high percentage of the overall costs of the Wastewater System than is appropriate.”
B. The Shames Action
On April 30, 2004, Mr. Shames filed a governmental claim pursuant to sections 910 and 945.4, on behalf of himself and a putative class composed of “residential property owners who are, or have been, customers of the City’s water and sewer services (‘the putative class’).” The claim asserted a demand for a refund for alleged overcharges paid by the putative class, alleging that “certain commercial and industrial customers discharge waste-water with relatively higher concentration of organic matters than residential customers do,” and that “[b]ecause the [wastewater] rates charged by the City do not account for organics, . . . residential customers have been charged disproportionately higher rates than commercial customers” in violation of the California Constitution.
The City denied the claim on May 14, 2004. Shames promptly filed his class action seeking refunds for residential property owners. The Shames action alleged that “Commercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential customers,” that “[Residential property owners impact the City’s sewer system at lower rates than commercial users because they discharge less organic pollutants,” and that City “does not account for this disproportionate impact when charging sewer fees.” Shames, defining the class as “[a]ll persons who own or have owned residential property [during the class period] and who have been charged sewer fees,” alleged there were common issues of fact and law as to residential property owners’ rights and sought a refund on their behalf. The Shames action alleged Shame had satisfied the governmental claim requirements because he had filed a claim “on behalf of himself and all City of San Diego residential property owners seeking a refund of sewer fee
In mid-2004 the California Restaurant Association (CRA), a trade association that advocates on behalf of restaurants and related businesses, contacted Shames’s attorney (Mr. Benink) to ask whether Benink could amend the Shames action to include food establishments within the class action.
In September 2004 Shames filed an amended complaint. He alleged that “Commercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential and other commercial customers do,” and that because the rates charged by City “do not account for organic pollutants, . . . some customers have been charged disproportionately higher rates than commercial and industrial customers with higher usage.” The amended complaint proposed an expanded class definition to define the putative class as “Customers . . . who, based on their relative contributions to overall system handling and processing requirements, . . . have paid or are paying, during the time period June 16, 2000[,] through October 1, 2004, a disproportionately higher percentage of the costs” (fn. omitted) of the wastewater system. However, Shames did not file an amended governmental claim seeking a refund on behalf of the newly defined class, and did not file a new governmental claim seeking a refund on behalf of the expanded class.
In April 2005 Shames filed his motion for class certification. Shames sought certification of a class defined only as single-family residential sewer
In the spring of 2007, prior to the court’s ruling on the final approval of the class settlement, CRA sought leave to amend the Shames action to (1) add CRA as a class representative and (2) have new attorneys appointed as class counsel. After the court denied that motion,
C. The Present Action
Four days after dismissal of the Shames action, CRMS filed a governmental claim for wastewater rate refunds alleging City overcharged food establishments for sewer services. The claim alleged that food establishments were required to use grease traps and were barred from using food grinders/ garbage disposals, but that wastewater loadings for food establishments were not adjusted to recognize these pretreatment measures, and therefore food establishments paid a disproportionately higher cost for sewer services. CRMS asserted that, as a member of the putative class in the Shames action, its claim was included within the Shames action and its cause of action was
CRMS filed the present action in August 2007 as a putative class action on behalf of itself and other food establishments. The action asserted (1) any administrative claim requirement had been substantially complied with; (2) in the alternative, City waived and/or was equitably estopped from asserting a defense based on failure to exhaust administrative remedies because City had not raised that argument when the Shames complaint was amended to expand the class definition; and (3) in the alternative, any administrative claim requirement had been equitably tolled during the pendency of the Shames action.
City moved for summary judgment, asserting that CRMS’s governmental claim for a refund was not filed within one year of the accrual of the cause of action as required under section 911.2. CRMS opposed the motion, arguing City was equitably estopped from asserting CRMS’s claim was untimely and that any administrative claim requirement had been equitably tolled during the pendency of the Shames action.
II
LEGAL FRAMEWORK
A. Standard of Review
Our “review [of] a grant of summary judgment [is] de novo; we must decide independently whether the facts not subject to triable dispute warrant
B. Governmental Claim Presentation Principles
The Government Claims Act (§ 810 et seq.) “establishes certain conditions precedent to the filing of a lawsuit against a public entity. As relevant here, a plaintiff must timely file a claim for money or damages with the public entity. (§ 911.2.) The failure to do so bars the plaintiff from bringing suit against that entity. (§ 945.4.)” (State of California v. Superior Court (2004)
Claims for personal injury must be presented not later than six months after the accrual of the cause of action, and claims relating to any other cause of action must be filed within one year of the accrual of the cause of action. (§ 911.2, subd. (a).) Timely claim presentation is not merely a procedural requirement, but is a condition precedent to the claimant’s ability to maintain an action against the public entity. (Shirk v. Vista Unified School Dist. (2007)
The failure to timely present a claim to the public entity bars the claimant from filing a lawsuit against that public entity. (City of San Jose v. Superior Court (1974)
However, in San Jose, supra,
“In determining the quantity of information required in a class claim to satisfy the provisions of [section 910], we note the cases gauging sufficiency of claims must be divided into two groups.
“The first treats claims where there has been some compliance with all the required elements—but compliance has been defective. [Citations.] In these cases the test of ‘substantial compliance’ controls: Is there sufficient information disclosed on the face of the filed claim to reasonably enable the public entity to make an adequate investigation of the merits of the claim and to settle it without the expense of a lawsuit?
“In the second group of cases the courts have been less lenient. Here, claims were successfully challenged for failure to comply entirely with a particular statutory requirement. [Citations.] In determining the sufficiency of such claims, the more liberal test of substantial compliance has not been applied—the courts recognizing ‘[substantial compliance cannot be predicated upon no compliance.’ [(Quoting Hall v. City of Los Angeles (1941)
Considering these authorities, the San Jose court held that “to satisfy the claims statutes, the class claim must provide the name, address, and other specified information concerning the representative plaintiff and then sufficient information to identify and make ascertainable the class itself. Because such information would meet the statutory requirements of name and address, any effort to identify the class would satisfy the some compliance test. Beyond this, the sufficiency of the identifying information must be measured by the substantial compliance test.” {San Jose, supra,
C. Equitable Tolling Principles
General Principles
Equitable tolling is a “judicially created, nonstatutory doctrine” “ ‘designed to prevent unjust and technical forfeitures of the right to a trial on the merits when the purpose of the statute of limitations—timely notice to the defendant of the plaintiff’s claims—has been satisfied.’ [Citation.] Where applicable, the doctrine will ‘suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness.’ ” {McDonald v. Antelope Valley Community College Dist. (2008)
“Broadly speaking, the doctrine applies ‘ “[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one.” ’ ” {McDonald, supra,
In assessing whether a statute of limitations will be equitably tolled in a particular situation, the courts examine the presence or absence of three factors: “(1) timely notice to defendants in filing the first claim; (2) lack of prejudice to defendants in gathering evidence to defend against the second claim; and (3) good faith and reasonable conduct by plaintiffs in filing the second claim.” (Downs v. Department of Water & Power (1997)
The doctrine of equitable tolling has been applied in the context of class action lawsuits to toll a statute of limitations. In American Pipe, supra,
In Jolly v. Eli Lilly & Co. (1988)
“The second consideration involved the effectuation of the purposes of the statute of limitations. ‘The policies of ensuring essential fairness to defendants and of barring a plaintiff who has “slept on his rights,” ’ the high court stated, ‘are satisfied when, as here, a named plaintiff who is found to be representative of a class commences a suit and thereby notifies the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs who may participate in the judgment.’ [(Quoting American Pipe, supra, 414 U.S. at pp. 554-555.)] In these circumstances, the court concluded, the purposes of the statute of
However, after considering these two purposes, the Jolly court ultimately held that equitable tolling would not be applied to the particular class action under consideration there, because it concluded the class action lawsuit “neither sufficiently put defendants on notice of the substance and nature of plaintiff’s claims, nor served to further economy and efficiency of litigation . . . .” (Jolly v. Eli Lilly & Co., supra,
Equitable Tolling of Governmental Claim Requirement
Although equitable tolling principles have been applied to toll statutes of limitations, the parties have cited no cases that have considered whether the pendency of a prior class action lawsuit can equitably toll the time for filing a governmental claim
ANALYSIS
We conclude a prior class action does not equitably toll or satisfy the governmental claim requirement for claimants not within the class description contained in a timely filed governmental claim on which the prior class action was predicated. We further conclude that, because the Shames claim did not include CRMS, the Shames action cannot satisfy or toll the governmental claim requirement for CRMS.
As previously discussed, a plaintiff must ordinarily file his or her own claim and may not sue to recover for his or her own injury in reliance on a claim filed by another injured party, even if the plaintiffs injury was caused by the same transaction that injured the other party. (See Nelson v. County of Los Angeles (2003)
However, the Shames claim was not filed solely for himself. Instead, it expressly stated it sought a refund of overcharges paid by “[Shames] and a class of City of San Diego . . . residential property owners who are, or have been, customers of the City’s water and sewer services (‘the putative class’),” thereby coming within the exception identified in San Jose, supra,
CRMS cannot rely on the Shames claim to satisfy the government claim statute and thereby permit a class action against City on behalf of commercial customers of City because, although the Shames claim identified some of the requisite information for Shames as an individual, it did not provide any information that would have enabled City to identify and ascertain that the class (on behalf of which the claim was filed) would include commercial customers of City. In Pacific Tel., supra,
“Assuming arguendo that the employer filed a claim as a representative of a class . . . , it does not follow that the claim for damages filed by the employer satisfied the claims statute with respect to another member of the class who suffered different damages as a result of the same tortious event. . . . [fJ[] Widow argues that the claim filed by the employer constituted substantial compliance with the claims statute insofar as the claim for wrongful death was concerned because ‘the policy behind the claim requirement has been substantially satisfied.’...[][] However, it is clear in this case that the claim of the employer did not satisfy the substantial compliance test insofar as widow’s claim for damages for wrongful death is concerned. The employer’s claim merely averred the circumstances of the accident and sought reimbursement of workers’ compensation benefits paid. It did not give the County notice of the fact that widow claimed damages for the wrongful death of her husband nor the extent of the damages claimed.
“ ‘It is not the purpose of the claims statutes to prevent surprise. Rather, 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. [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. Such knowledge— standing alone—constitutes neither substantial compliance nor basis forestoppel. [Citations.]’ [(Quoting San Jose, supra, 12 Cal.3d at p. 455 .)] m... m
“We conclude, therefore, that even if the employer’s action could be regarded as a class action . . . , the claim filed by the employer did not relieve widow of the necessity of filing a claim for damages for wrongful death.” (Pacific Tel., supra, 106 Cal.App.3d at pp. 190-192, italics added.)
Similarly, the Shames claim merely averred the circumstances of the alleged overcharging and notified City it would be seeking refunds for Shames and residential owners. It did not give City notice that CRMS (either individually or as a member of some undefined class of commercial property owners) would be seeking a refund, and did not apprise City of the extent of the potential refunds that might be sought by such undefined class of commercial property owners. (Accord, Eaton v. Ventura Port Dist. (1975)
Moreover, although the filing of the Shames claim and pendency of the Shames action arguably satisfied the claim requirement for members of the identified class (e.g., residential owners) and would have tolled the limitations period for residential owners to file their own actions if the Shames action had not been settled or resolved on its merits, it did not have any effect on persons or entities who were strangers to the claim, even though they may have been injured by the same transaction identified in the Shames claim. (See Pacific Tel., supra,106 Cal.App.3d at p. 192 [Fact employer’s filing suit might have tolled statute of limitations on widow’s action “does not mean that the employer’s filing of a claim for reimbursement of workers’ compensation benefits relieved her of the necessity of filing a claim . . . .” “[T]he purpose of the claims statute 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.] . . . [T]he claim filed by the employer did not fulfill the purposes of the claims statute with respect to the widow’s claim . . . .”].)
CRMS asserts, however, that tolling should be applied because Shames later amended his complaint to expand the class beyond those members identified in the Shames claim. However, because neither Shames
We are unpersuaded that the American Pipe/Crown Cork tolling doctrine can be transferred from its limited context—tolling of statutes of limitations for class members if the classwide pursuit of the claim falters—to also toll the distinct time limits for filing a governmental claim. As the Crown Cork court observed, “ ‘the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.’ ” {Crown Cork, supra,
The judgment is affirmed. City is entitled to costs on appeal.
McIntyre, 1, and Irion, J., concurred.
Appellant’s petition for review by the Supreme Court was denied August 24, 2011, S194710.
Notes
All further statutory references are to the Government Code unless otherwise specified.
In May 2004, and prior to contacting Benink, CRA had sent letters to City urging it to adjust the rate structure for food service establishments to account for the lower organic materials discharged by such establishments resulting from the ban on food grinders/garbage disposals and the use of grease traps/interceptors. CRA also sought support for a rebate or credit for such establishments to “recognize the years [restaurants were] overcharged due to the use of incorrect wastewater loadings.” City responded that (1) under the existing scheme any establishment was entitled to have its rates adjusted based on the submission of actual wastewater discharge testing and (2) under a proposed new rate structure, City would adjust the rates for the entire food service class based on the use of grease traps and removal of garbage grinders if that new rate structure was approved.
Benink later explained, in opposition to CRA’s motion to amend the Shames action to add CRA as a named plaintiff and class representative and to have new counsel appointed as class counsel, that subsequent investigation had led Benink away from the expanded class definition alleged in the amended complaint and toward a narrower class definition that Benink was more confident about certifying. Among the reasons cited by Benink for seeking a narrower class was that individual commercial customers, unlike residential customers, were permitted to request adjustments to their “return to sewers” (an adjustment that reduced the amount paid each month) and commercial customers are assigned an initial billing rate based on their “SIC code” and are permitted to appeal default rates to request a different rate based on actual discharges. Benink also noted, although City had admitted that all residential customers were aggrieved, only some of the commercial customers could claim damages related to organics, which made certification of the class of residential customers more viable.
The court denied the motion for numerous reasons, including that CRA was not an appropriate class representative, and that the amendment would prejudice the interests of the settlement class. At the hearing on CRA’s motion, the city attorney (responding to the court’s inquiry whether individual restaurants could bring their own claims were the motion to amend denied) stated individual restaurants could benefit from the tolling effect of the Shames action, but also stated City would still be able to interpose administrative claim defenses.
City demurred based on failure to timely file an administrative claim, but the court overruled the demurrer because, although the claim filed by Shames did not satisfy the claim requirement for the present plaintiffs, the issue of estoppel could present factual issues not suitable for resolution on demurrer.
CRMS also opposed the motion by arguing CRA’s letters (see fn. 2, ante) substantially complied with the administrative claim requirement for CRMS’s class action. However, CRMS raises no appellate argument suggesting the trial court’s disposition of this contention was error, and we do not further consider it. {Reyes v. Kosha (1998)
CRMS, asserting on appeal that equitable tolling can also be applied to situations involving “attorney mistakes,” argues equitable tolling should be applied to protect CRMS and other restaurant owners from the “egregious mistakes” by Shames’s counsel. However, CRMS cites
The only Supreme Court case that mentions this question, Bettencourt v. Los Rios Community College Dist. (1986)
City cites Loehr v. Ventura County Community College Dist. (1983)
Although City did not demur to the amended complaint on that ground, we ascribe no significance to that omission. In Nelson v. County of Los Angeles, supra, 113 Cal.App.4th at pages 797-798, the court “summarily rejected] Mrs. Nelson’s related contention that the County was required to notify her that her claim form was insufficient. A public entity’s duty to notify a claimant that the claim form is ‘defective’ necessarily presumes the defect is disclosed on the face of the form. [Citation.] The problem here is not that Mrs. Nelson’s claim was defective, but that no claim at all was filed by or on behalf of Dwayne’s estate.” Similarly, the problem here was not that the Shames claim on behalf of residential owners was defective, but that there was no claim filed at all by the nonresidential owners purportedly added by the amendment.