CITY OF PALO ALTO v. PALO ALTO HILLS GOLF & COUNTRY CLUB
Case No.: 1-13-CV-245626
DATE: April 22, 2014
TIME: 9:00 a.m.
DEPT.: 3
“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” Blank v. Kirwan (1985) 39 Cal.3d 311, 318. Allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. See Witkin, California Evidence (4th Ed., 2000) 1 Judicial Notice §3(3) (“It has long been established in California that allegations in a pleading contrary to judicially noticed facts will be ineffectual; i.e., judicial notice operates against the pleader.”)
The request for judicial notice of six documents (Exhibits A-F) by the City of Palo Alto (“City”) is GRANTED pursuant to Evid. Code §§452(b) and (d). Exhibit C, a copy of the Jan. 21, 2014 Verified Answer filed by Defendant/Cross-Complainant Palo Alto Hills Golf & County Club, Inc. (“Club”) states in pertinent part at 13 that “Defendant admits that it has not paid any part of the back bill . . .” Exhibit D, a copy of the prior Sept. 13, 2013 Order of this Court (Hon. McKenney), ruled among other things that “the Look Back Rule cannot be considered a retroactive law as it fails to impose a new duty or obligation on the Defendant.” Exhibit F, a copy Palo Alto Muni. Code §2.28.230, states in pertinent part in subdivision (f) (“Exhaustion of Administrative Remedies”) that: “Prior to seeking judicial relief with respect to a dispute regarding a tax, fee or other charge imposed by the city, an aggrieved taxpayer, fee payer, or any other person must: (i) exhaust any administrative remedies specified by any other provision of this code or other applicable law, (ii) pay the full amount owed, including applicable penalties and interest, and (iii) present a claim for refund as required by any or all of: section 2.28.30 of this code; the Government Claims Act, Government Code Section 910 et seq.; and other applicable law.”
The City’s Demurrer to the entire Cross-Complaint and all three causes of action (Declaratory and Injunctive Relief re: Violations of Cal. Const. Art. XIII D §6; Refund of Excessive Water Charges, and; Declaratory Relief re: Retroactive Application of Resolution 9258) on the ground that they each fail to state sufficient facts because the Club has not paid the disputed adjusted water bill and utility user tax in full before filing the Cross-Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. See Chodos v. City of Los Angeles (2011) 197 Cal App 4th 675 (affirming the sustaining of a demurrer without leave to amend because Plaintiff did not comply with “pay first litigate later” rule); Water Replenishment Dist. of Southern Cal. v. City of Cerritos (2013) 220 Cal App 4th 1450, 1467 (The pay first, litigate later doctrine applies to local governments as a matter of public policy. With regard to an effort to enjoin a tax, there is a strong public policy requiring a taxpayer to pay the tax and sue for a refund. That public policy applies to declaratory relief actions, which have the same effect as injunction actions. The pay first, litigate later rule applies at all levels of government—the federal, the state, and the local.) Plaintiff (“Club”) cannot evade the doctrine by claiming that it does not apply because it considers the amounts it has not paid to be unlawful and retaliatory. This case also does not present a novel question of first impression simply because it involves a bill for water use charges and utility user taxes over a 22-month period.
The City’s Demurrer to the 3rd cause of action is also SUSTAINED WITHOUT LEAVE TO AMEND on the additional, independent ground that judicially noticeable material establishes that there is no present controversy, an essential element of the claim. This Court’s prior Order of Sept. 13, 2013 (Hon. McKenney) expressly ruled, in denying the Club’s motion to strike portions of the City’s Complaint, that “the Look Back Rule cannot be considered a retroactive law as it fails to impose a new duty or obligation on” the Club. Statutory interpretation is a question of law for the Court even on a demurrer or motion to strike. No motion for reconsideration of the Sept. 13, 2013 order was brought and the Court declines to exercise its inherent power to reconsider that interim order now. The Club was always obligated to pay for all of the water it actually used. This ends the debate on the retroactivity issue at the Superior Court level.
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