Case Name: Branch Banking & Trust, et al. v. County of Santa Clara, et al.
Case No.: 2015-1-CV-281000

Currently before the Court is defendant County of Santa Clara’s (the “County”) motion for summary judgment of the complaint of plaintiffs Branch Banking & Trust (“BBT”) and Linda Maycock (“Maycock”) (collectively, “Plaintiffs”).

I. Factual and Procedural Background

This is an action arising from the breach of a lease agreement. In the complaint, Plaintiffs allege the following: On December 23, 1998, the County entered into a lease agreement with Carlie W. Smith and Lillian Smith (the “Smiths”) for the use of real property located at 935 Ruff Dr., San Jose, CA. (Compl., ¶ 11.) In 2013, the County assigned its interest in the lease to defendant Judicial Council of California (the “AOC”). (Compl., ¶ 12.) Plaintiffs, the successors-in-interest to the Smiths, consented to the assignment without releasing the County from its liability under the lease. (Compl., ¶ 12.) In October 2013, the AOC sent a 90-day notice of its intention to terminate the agreement. (Compl., ¶ 15.) In response, Plaintiffs stated that the AOC could not invoke the termination provision until 90 days after December 31, 2013. (Compl., ¶ 16.) On January 1, 2014, Defendants vacated the premises and ceased paying the $56,739.24 monthly rent. (Compl., ¶¶ 17-18.) After inspecting the property, Plaintiffs discovered substantial damage to both the floor and ceilings. (Compl., ¶ 19.) On June 18, 2014, Plaintiffs mailed a government claim to the County, County Counsel, and the Victim Compensation and Government Claims Board (the “VC Board”). (Compl., Ex. A.) The complaint asserts three causes of action against the County and the AOC (collectively, “Defendants”) for breach of lease and waste.

On April 4, 2016, the County filed the instant motion for summary judgment. Plaintiffs filed their opposing papers on June 9, 2016. On June 17, 2016, the County filed its reply.

II. Summary of Evidence Submitted

In support of its motion, the County submits the declaration of Dusty Christopherson, the records manager of the Office of the Clerk of the Santa Clara County Board of Supervisors.

In opposition to the motion, Plaintiffs provide the following evidence: their complaint and the County’s cross-complaint against the AOC; a certified mail receipt and copy of U.S. Postal Service records; the depositions of deputy county counsel, Shirley R. Edwards, and the County’s person most knowledgeable, Greg Eglesias; letters and e-mails provided by the County in response to a request for production of documents; a privilege log; a print-out of the County website; and a letter from the VC Board.

III. Evidentiary Objections

The County asserts seven evidentiary objections to the evidence submitted in opposition to the motion. The objections are not material to the disposition of the motion and, therefore, no ruling is required. (See Code Civ. Proc., § 437c, subd. (q) [stating that “[i]n granting or denying a motion for summary judgment or summary adjudication the court need rule only on those objections to evidence it deems material to its disposition of the motion”.)

IV. Request for Judicial Notice

The County asks the Court to take judicial notice of the complaint. The request is GRANTED. (See Evid. Code, § 452, subd. (d) [stating that a court may take judicial notice of court records].)

V. Discussion

The County moves for summary judgment on the sole ground that Plaintiffs have failed to establish strict compliance with the Government Claims Act presentation requirements.

A. Legal Standards

Under the Government Tort Claims Act (Gov. Code, § 810 et seq.), no person may sue a public entity for money or damages unless a timely written claim has been presented to and denied by the public entity. (County of Los Angeles v. Sup. Ct. (2005) 127 Cal.App.4th 1263, 1267.) “The intent of the Tort Claims Act is not to expand the rights of plaintiffs against governmental entities. Rather, the intent of the act is to confine potential governmental liability to rigidly delineated circumstances. The Tort Claims Act requires any civil complaint for money or damages first be presented to and rejected by the pertinent public entity. The act creates a bond between the administrative claim and the judicial complaint. Each theory of recovery against the public entity must have been reflected in a timely claim. In addition, the factual circumstances set forth in the claim must correspond with the facts alleged in the complaint.” (Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1776, internal citations omitted.) Strict compliance with the claims presentation statute is a condition precedent to filing suit against a public entity. (DiCampli-Mintz v. County of Santa Clara (2012) 55 Cal.4th 983, 990.) As such, “[i]t 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.” (Id. at p. 991, internal citations omitted.)

Government Code section 915, subdivisions (a) and (b) specify the manner of presentation of a government claim to a local public entity and the state. (Judicial Council of California v. Sup. Ct. (2014) 229 Cal.App.4th 1083, 1095.) Subdivision (a) provides that a claim shall be presented to a local public entity by “[d]elivering it to the clerk, secretary or auditor thereof” or “[m]ailing it to the clerk, secretary, auditor, or to the governing body at its principal office.” In turn, subdivision (b) states that a claim shall be presented to the state by delivery or mailing to an office of the VC Board. The section “reflects the Legislature’s intent to precisely identify those who may receive claims” and eliminate confusion and uncertainty resulting from different claims procedures. (DiCampli-Mintz, supra, 55 Cal.4th at pp. 990, 992.)

In the event a plaintiff fails to comply with Government Code section 915, subdivisions (a) or (b), it may establish compliance with the presentation requirement via subdivision (e), which states the following: “A claim, amendment or application shall be deemed to have been presented in compliance with this section even though it is not delivered or mailed as provided in this section if, within the time prescribed for presentation thereof, any of the following apply: (1) It is actually received by the clerk, secretary, auditor or board of a local public entity. (2) It is actually received at an office of the [VC Board]. (3) If against the California State University, it is actually received by the Trustees of the California State University. (4) If against a judicial branch entity or judge, it is actually received by the court executive officer, court clerk/administrator, court clerk, or secretariat of the judicial branch entity.” Compliance with this subdivision “requires actual receipt of the misdirected claim by one of the designated recipients.” (DiCampli-Mintz, supra, 55 Cal.4th at p. 992.)

B. The County’s Initial Burden

The County argues that Plaintiffs did not comply with Government Code section 915 because they did not mail the claim to the County’s clerk, secretary, auditor or the Board of Supervisors and these individuals never actually received the claim. In this respect, it presents evidence that Plaintiffs mailed their claim to: County of Santa Clara, 70 West Hedding Street, San Jose, CA 95110 and Shirley R. Edwards, Office of the County Counsel, 70 West Hedding Street, 9th Fl. East Wing, San Jose, CA 95110. (Compl., Ex. A.) Since Plaintiffs did not mail their claim to the County’s clerk, secretary, auditor or the Board of Supervisors, they did not comply with Government Code section 915, subdivision (a). In addition, the County produces evidence that Plaintiffs did not comply with section 915, subdivision (e) because these designated recipients never actually received any claims submitted on Plaintiffs’ behalf. (See Christopherson Decl., ¶¶ 5, 8.) Accordingly, the County meets its initial burden and, therefore, the burden shifts to Plaintiffs to demonstrate a triable issue of material fact.

C. Plaintiffs’ Burden

In opposition, Plaintiffs do not present evidence establishing that they presented their claim directly to the County’s clerk, secretary, auditor or the Board of Supervisors or these recipients actually received their claim. Nevertheless, Plaintiffs contend that there is a triable issue of material fact as to their compliance with the Government Claims Act presentation requirements on the following bases: (1) Plaintiffs complied with Government Code section 915, subdivisions (a) and (e) because the claim was presented to and actually received by County Counsel; (2) Plaintiffs complied with Government Code section 915, subdivision (e)(2) because the claim was actually received by the VC Board; and (3) the County should be estopped from claiming that Plaintiffs failed to comply with the presentation requirements.

1. Presentation to and Receipt by County Counsel of the Claim

Plaintiffs assert that the presentation of a claim to, and actual receipt of the claim by, County Counsel is equivalent to the presentation of the claim to the County’s clerk, secretary, auditor or the Board of Supervisors. In this respect, they argue that County Counsel is the agent of the Board of Supervisors and, therefore, its knowledge of the claim is imputed to its client under general agency principles. (See Civ. Code, § 2332 [providing that “both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other”]; see also Clark Equipment Co. v. Wheat (1979) 92 Cal.App.3d 503, 527 [stating that “where [,] as here, an agent is put on notice by knowledge of facts sufficient to put a reasonable man on inquiry, the notice will be imputed to the agent’s principal and is binding on the principal”].)

In DiCampli-Mintz, supra, the Supreme Court rejected this same argument. In that case, the plaintiff presented her claim to an employee of the County of Santa Clara’s Risk Management department. (DiCampli-Mintz, supra, 55 Cal.4th at p. 988.) After determining that the claim was never presented to or actually received by a statutorily designated recipient under Government Code section 915, the trial court granted summary judgment. The Court of Appeal reversed, finding that the plaintiff substantially complied with the claims statutes because the risk management department was a responsible official of the public entity. In reaching this result, the court relied on several out-of-state authorities in which service on a public entity’s legal department was deemed to be sufficient on the ground that the public entity’s counsel acted as its agent. (DiCampli-Mintz v. County of Santa Clara (2011) 195 Cal.App.4th 1327, rev’d (2012) 55 Cal.4th 983.) The Supreme Court reversed, explaining that the Court of Appeal’s holding was inconsistent with “the statutory language specifically identifying who must actually receive a claim,” and “[f]inding compliance when any agency employee is served exponentially expands the scope of the statute” would “improperly shift[] the responsibility for presenting a claim from the claimant to the public entity.” (DiCampli-Mintz, supra, 55 Cal.4th at p. 995.)

The same analysis applies here. Deeming a plaintiff to have complied with the presentation requirement when any agent of the public entity is served or receives a claim would expand the scope of Government Code section 915 and improperly shift the responsibility for properly presenting a claim from the claimant to the agent of the public entity. Accordingly, Plaintiffs fail to establish a triable issue of fact as to their compliance with the claims presentation statutes on this basis.

2. Actual Receipt by the VC Board

Plaintiffs contend that they properly presented their claim to the County because an office of the VC Board actually received their claim. Specifically, they argue that a claim is deemed to have been presented in compliance with the section if any of its subsections apply, that is, actual receipt by either the clerk, secretary, auditor or Board of Supervisors or the office of the VC Board establishes compliance as to the County. (See Gov. Code, § 915, subd. (e)(1)-(2).)

The Court of Appeal rejected this construction of Government Code section 915, subdivision (e) in Judicial Council of California v. Sup. Ct. (2014) 229 Cal.App.4th 1083. The plaintiff in that case alleged that she was injured while riding an elevator in a courthouse. (Id. at p. 1087.) Rather than presenting her claim to the AOC, she served the claim on the VC Board. (Id. at p. 1086.) The AOC moved for summary judgment on the on the ground that the plaintiff failed to comply with the presentation requirement. The trial court denied the motion, finding that the plaintiff complied with the requirement by serving the VC Board. (Id. at pp. 1087-1088.) The AOC filed a mandate petition, which the Court of Appeal granted.

The court acknowledged that the plain language of Government Code section 915, subdivision (e) could be read as reflection of the “[L]egislature’s intent that a purportedly misdirected claim will satisfy the presentation requirement if the claim is actually received by at least one statutorily designated recipient,” such as the VC Board. (Id. at pp. 1096-1097.) However, the court found the language of the statute to be ambiguous when considered in connection with the statutory scheme as a whole because “section 915, subdivision (e) closely parallels the delivery and mailing provisions in section 915, subdivisions (a) through (d)” and “[t]here is no logical reason the Legislature intended to create separate delivery and mailing provisions in section 915, subdivision (c) and distinct actual receipt regimens in section 915, subdivision (e).” (Id. at p. 1097.) In addition, the Court of Appeal found the use of the qualifier “if … any of the following apply” in subdivision (e) was inconsistent with the qualifier “if against a judicial branch entity” contained in subdivision (e)(4). (Ibid.) After consulting the legislative history, the court rejected the plaintiff’s construction of the statute because there was no indication that the “[VC Board] [had] anything to do with judicial branch entity government claims” and it would be unreasonable for the Legislature to intend a government claim against the AOC to be presented to the VC Board because the board has no power to resolve the claim. (Id. at p. 1100.)

Plaintiffs’ construction of the statute fails for the same reasons articulated in Judicial Council of California. In particular, the language of Government Code section 915, subdivision (e) is ambiguous because there is no logical reason the Legislature intended to create separate presentation and receipt requirements, the legislative history indicates that the Legislature intended that only a claim against the state be presented and/or received by the VC Board, and any other interpretation would be unreasonable given that the board has no power to resolve a claim on behalf of a local public entity. (See Judicial Council of California, supra, 229 Cal.App.4th at p. 1098 [stating that the Legislature intended claims against the state to be presented and received by the VC Board and claims against a local public entity to be presented and received by the governing board of that entity].)

Plaintiffs argue that Judicial Council of California is distinguishable because the Court of Appeal only found the statute to be ambiguous based on the qualifier “if against a judicial branch entity” in subdivision (e)(4). Since such a qualifier is not present in subdivision (e)(1), Plaintiffs assert that the statute is not ambiguous. This argument is not persuasive because the presence of the qualifier is not the sole basis for the Court of Appeal’s determination that the section was ambiguous. In this respect, Plaintiffs ignore the court’s finding that the statute was ambiguous based on the absence of a logical reason for the Legislature to create separate mailing provisions and actual receipt regimens. (See Judicial Council of California, supra, 229 Cal.App.4th at p. 1097.) In addition, Plaintiffs make no attempt reconcile their interpretation of the statute with the incongruous result that a plaintiff could meet the requirements of the claims presentation statute by serving an entity with no power to resolve its claim. (See id. at p. 1100 [stating that it is the court’s duty to avoid absurd outcomes when conducting statutory construction].) As such, the Court finds that the analysis in Judicial Council of California governs this action. Accordingly, Plaintiffs fail to establish compliance with the Government Claims Act presentation requirements as to the County based on the VC Board’s receipt of their claim.

3. Estoppel

Plaintiffs assert that the County should be estopped from claiming lack of compliance with the claims presentation requirements because they mailed their claim in conformity with the terms of the lease, which provides that “[a]ll notices, demands, or other writings in this Lease Agreement provided to be given, made, or sent which may be given, made or sent by either party here to the other” shall be addressed to “County of Santa Clara, 70 West Hedding Street, San Jose, CA 95110….” (Klawier Decl., Ex. 3, ¶ 19.)

“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.” (Munoz, supra, 33 Cal.App.4th at p. 1785.)
Plaintiffs’ estoppel claim fails on several grounds. As an initial matter, Plaintiffs did not allege estoppel in their complaint and, therefore, may not avoid summary judgment based on this argument. (See Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342 [stating that “[t]he [papers] filed in response to a defendant’s motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings”]; Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 648 [stating that “a plaintiff cannot bring up new, unpleaded issues in his or her opposing papers” and a plaintiff wishing “to rely upon unpleaded theories to defeat summary judgment must move to amend the complaint before the hearing”]; see also Munoz, supra, 33 Cal.App.4th at p. 1785 [stating that “[e]stoppel must be pleaded and proved as an affirmative bar to a defense of statute of limitations”].) In any event, Plaintiffs provide no evidence supporting each element of a claim for estoppel. Specifically, they do not submit evidence indicating that the inclusion of the provision in the lease agreement was intended to prevent or deter them from addressing their government claim to the correct individual or that they reasonably relied upon this provision to their injury. (See Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 901 [stating that estoppel to assert the claims statute requires a showing of reasonable reliance on the representation of a public employee]; see also Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 306 [providing that a public agency may be estopped to assert the statute of limitations against a claimant only if the “public agency acted in an unconscionable manner or otherwise set out to, or did take advantage of plaintiff”].) Accordingly, Plaintiffs fail to establish that the County should be estopped from claiming lack of compliance with the claims presentation requirements.

D. Conclusion

In light of the foregoing, the motion for summary judgment is GRANTED.