County of San Diego v. Pointe
Communities of San Diego
Filed 1/28/14 County of San Diego v. Pointe
Communities of San Diego CA4/1
OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a),
prohibits courts and parties from citing or relying on opinions not certified
for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO,
Plaintiff and Appellant,
v.
POINTE
COMMUNITIES OF SAN DIEGO, INC., et al.,
Defendants and Respondents.
D063074
(Super. Ct. No.
37-2009-00069442-CU-BC-EC)
APPEAL
from a judgment of the Superior Court of
Orange County, Luis A. Rodriguez, Judge.
Affirmed.
Thomas
E. Montgomery, County Counsel, and
Thomas Deák, Senior Deputy County Counsel, for Plaintiff and Appellant.
George
Edward Hurley; McKenna Long & Aldridge, Charles A. Bird and Michelle A.
Herrera for Defendants and Respondents.
In
1992, as one of the conditions for approving a Final Map for a real estate development,
County of San Diego (County) entered into an
Communities of San Diego, Inc. (PCSD) and Pointe San Diego Residential
Community, L.P. (Pointe Residential) requiring PCSD and Point Residential
(together Pointe) to construct specified street improvements (the street
two other agreements requiring Pointe to build certain water and sewer improvements
(collectively the Subdivision Improvement Agreements). The Subdivision Improvement Agreements required
completion of the improvements within 730 days of County's approval of the
Final Map, but permitted County's Board of Supervisors (Board) to extend the
time for completing the required improvements.
During
the next 11 years, County granted Pointe a series of extensions until January
2005 to complete the improvements required by the Subdivision Improvement
Agreements. In April 2005 County's
Department of Public Works (DPW) informed Pointe the Subdivision Improvement
Agreements had expired, Pointe was in default, and DPW was unable at that time
to recommend the Board grant further extensions.
In
September 2009, more than four years after the Subdivision Improvement
Agreements expired and County declared Pointe in default, County filed its
complaint alleging Pointe breached its obligations under the Subdivision
Improvement Agreements and seeking damages and
County's claims were time-barred by the four-year statute of limitations
applicable to claims for breach of written contracts. County opposed the motion, asserting there
were triable issues of fact whether a later 2002 agreement between County and
Pointe (the Tri-Party Agreement) and a 2006 amendment to the Tri-Party
Agreement (the Amended Agreement) were intended to extend the time for
performing the Subdivision Improvement Agreements. County argued, because the 2009 complaint was
filed within four years of the 2006 Amended Agreement, County's action was not
time-barred. County alternatively
argued, to the extent the Tri-Party Agreement and Amended Agreement were
collateral to (and did not extend the time for performing) the Subdivision
Improvement Agreements, County should be granted leave to amend to assert
claims based on breach of the Tri-Party Agreement and Amended Agreement. The trial court rejected County's claim that
the Tri-Party Agreement extended the time for performing the Subdivision
Improvement Agreements, and found County's claims as pleaded were therefore
time-barred. The court also rejected
County's request for leave to amend, and entered judgment on the complaint in
favor of Pointe. This appeal by County followed.
I
FACTUAL CONTEXT
A. The Subdivision Improvement
Agreements
In
1990, the Board approved a Specific Plan Amendment (SPA 88-001) for a mixed use
development in Spring Valley, along with a Tentative Map (TM-4828-1) and a series of public
improvements described on TM-4828-1. The
approval included a condition that, before a Final Map could be approved,
Pointe was required to construct significant road improvements, including
improvements to a section of Jamacha
Boulevard from Huron Road to
Spring Glen Lane to provide an access road to the future State Route 54
freeway.
In
early 1992 the Board approved the Final Map and Pointe entered into the Subdivision
Improvement Agreements obligating Pointe to perform the street, water and sewer
improvements required by TM-4828-1, and requiring bonds to secure Pointe's
performance of its improvement obligations.
Pointe was required to complete the specified improvements within 730 days of
the Board's approval of Final Map 4828-1.
However, the Subdivision Improvement Agreements provided that, if
necessary, the Board could grant extensions (either unilaterally or on Pointe's
request) to complete the improvements.
Between
1992 and 1994, Pointe completed some of the improvements. In 1994, County granted Pointe a two-year
extension of time to complete the improvements, and in 1999 the Board approved
another extension for completion of the improvements for TM-4828-1. In 2003, the Board approved another extension
for completion of the improvements for TM-4828-1; under this extension, Pointe's
time to complete the improvements required by the Subdivision Improvement
Agreements was extended to January 29, 2005.
On
April 15, 2005, County wrote a letter to Pointe with a reference line stating "Expiration
of Improvement Agreement for County of San Diego Tract
TM-4828-1, Final Map No.
12924." That letter stated, among
other things, that "[a]fter reviewing the file for the above noted
project, the Department of Public Works (DPW) has identified that this project's
Improvement Agreement is in default due to the original agreements expiring on January 29, 2005. DPW is unable to recommend
an extension to the Board of Supervisors at this time."
B. The Tri-Party Agreement
In
early 2000, three years before the Board approved the last extension for Pointe
to complete the improvements required by the Subdivision Improvement Agreements,
County began meeting with representatives of Pointe (together with another
developer, Atlas Homes) to discuss ways to improve Jamacha Boulevard and fund
those improvements. In 2001 County made
a demand against the bonding company based on Pointe's failure to widen Jamacha Boulevard as required by the Subdivision Improvement Agreements. A few months later, County, Pointe, and
American Motorists Insurance Company (Surety) entered into the Tri-Party
agreement.
The
Tri-Party Agreement contained a series of recitations that described the
interests of both Pointe and Surety in agreeing to the obligations it imposed. The Tri-Party Agreement recited that Pointe
had two proposed apartment projects before County for approval, "which
approval cannot be given until construction of the road improvements is assured
for completion prior to occupancy of the apartments" and Pointe was
willing to construct those improvements prior to occupancy of these
projects. As to Surety, which agreed to
undertake the obligation to provide financing for construction of the road
improvements required by the Tri-Party Agreement, the agreement recited that Surety
had issued a bond guaranteeing completion of road improvements required by
TM-4828-1, the improvements had not been constructed and a demand on the bond
had been made, and Surety was willing to finance the road improvements required
by the Tri-Party Agreement in exchange for a right to be reimbursed by Pointe
from the four properties then under Pointe's control that would be benefitted by
the road improvements.
name="_ftnref3" title="">[3] The Tri-Party Agreement provided Pointe would
construct road improvements to Jamacha Boulevard "as required by TM4828-1 in accordance with plans to be
resubmitted for approval by [the DPW]," and Surety would deposit with
County funds to pay for those improvements and be entitled to reimbursement
from Pointe for those outlays.
name="_ftnref4" title="">[4] County also required, as a condition to
approval of Pointe's apartment projects, that the road improvements to Jamacha Boulevard be completed before occupancy permits would be issued, and
specified it would not withhold approval of the projects due to road conditions
on Jamacha Boulevard but would withhold occupancy permits until the road improvements
were finished. The Tri-Party Agreement
contained no express references to the Subdivision Improvement Agreements and
(apart from the references to TM 4828-1 and to Surety's previously issued bond)
contained no references to any facts relating to Pointe's 1992 undertakings.
In
June 2002, DPW received Pointe's revised plans for the work to Jamacha Boulevard contemplated by the Tri-Party Agreement. The revised plans (processed under County
Permit CG 4476) were deemed deficient in numerous respects and, after a lengthy
review process involving numerous changes to and iterations of the planned
work, Pointe's plans for the work to Jamacha Boulevard contemplated by the Tri-Party Agreement were approved by County in
August 2004.
title="">[5] After approval of the plans submitted under
permit CG 4476, Pointe began working on the improvements covered under CG 4476
and the Tri-Party Agreement.
C. The 2006 Amendment to the
Tri-Party Agreement
In
March 2006, nearly one year after DPW informed Pointe the Subdivision
Improvement Agreements had expired and Pointe was in default, Pointe wrote to
County to explore the possibility of amending the Tri-Party Agreement to find
ways to fill a funding gap for the improvements contemplated by the Tri-Party
Agreement. To fill the funding gap,
which apparently arose because changes in the scope of work and delays had
increased the construction costs by preventing timely completion of the Jamacha Boulevard improvements, County and Pointe in November 2006 entered into the
Amended Agreement concerning completion of the improvements contemplated by the
Tri-Party Agreement.
The
Amended Agreement recited that Pointe had three projects under construction,
and the intent of the parties had been to insure completion of Jamacha
Boulevard prior to occupancy of the residences, but circumstances beyond Pointe's
control "prevented completion of Jamacha [Boulevard] prior to the
scheduled closing of residential units, necessitating the release of
occupancies[.]" The Amended
Agreement provided (1) Pointe would construct the road improvements "as
required by TM4828-1 and [CG] 4476 in accordance with the plans approved by"
DPW, (2) funding (in addition to Surety's bond as contemplated by the Tri-Party
Agreement) would be secured by Pointe's agreement to deposit with County $5,952
per unit from the first units sold from its projects "to secure the
remaining, unfunded portion of Jamacha [Boulevard's] construction costs to a
maximum of $500,000[,]" (3) County agreed it would allow certain occupancy
permits to be "issued prior to substantial completion of Jamacha [Boulevard,]
including four working lanes, to the satisfaction of" DPW, and (4) Pointe
agreed it would seek "no further occupancy permits or enter into any sales
agreements or leases for the remainder of its property until the improvements
to Jamacha Boulevard are substantially completed, including four working lanes,
to the satisfaction of" DPW."
County
issued the occupancy permits, Pointe sold units in its project, and Pointe
deposited approximately $260,000 with County from these sales. Pointe continued working on the Jamacha Boulevard improvements and hoped to complete the improvements by mid-March
2007. However, by April 2007, all work
on the improvements had stopped. Between
December 2007 and September 2009 representatives of County, Pointe and Surety
held numerous meetings and exchanged correspondence regarding how to complete
the required improvements. However, the
parties were unable to resolve the dispute and County commenced this action against
Pointe on September
22, 2009.
D. The Complaint and Cross-complaint
County's
complaint pleaded claims against Pointe alleging it had breached its
obligations under the Subdivision Improvement Agreements, which it defined as
the 1992 agreements relating to street improvements, water improvements and
sewer improvements, and sought damages and declaratory relief. County's complaint contained factual
allegations pertaining to the Tri-Party Agreement and the Amended Agreement but
pleaded no separate claims for breach of those agreements.
Pointe
Residential cross-complained against County asserting County had breached the Tri-Party
Agreement and the Amended Agreement by not releasing funds escrowed for the
improvements required by those agreements, by unilaterally increasing the scope
and costs for those improvements, and by not seeking contribution from the
owner of the Dictionary Hill property.
E. The Summary Judgment Motion
Pointe
moved for summary judgment, asserting County's causes of action were
time-barred by the four-year statute of limitations applicable to claims for
breach of written contracts. Pointe
alleged the four-year statute of limitations under Code of Civil Procedure
section 337, subdivision (1), applied to actions on the Subdivision Improvement
Agreements, the Board did not extend Pointe's time to perform the Subdivision
Improvement Agreements beyond the January 29, 2005, expiration date on those
agreements, and therefore County's complaint was time-barred.
County
did not dispute the applicable statute of limitations. However, it contended summary judgment was
improper because the parties intended to extend the time for performing the
obligations of the Subdivision Improvement Agreements when they entered into the
Tri-Party Agreement and the Amended Agreement, and the lawsuit was timely
because it was filed within four years of the date the Amended Agreement was
executed. County alternatively asserted
the Tri-Party Agreement and the Amended Agreement constituted independent
contractual undertakings to construct the Jamacha Boulevard improvements, and its complaint, when liberally construed, stated
claims for breach of the Tri-Party Agreement and the Amended Agreements. Even if it did not, County should be granted
to leave to amend the complaint to state claims for breach of the Tri-Party
Agreement and the Amended Agreement.
The
court, after hearing oral argument, confirmed its tentative ruling and granted
the motion for summary judgment. It
first noted the pleadings defined the boundaries of the issues to be resolved
on summary judgment, and a party cannot avoid summary judgment either by
presenting new and unpleaded issues in opposing a summary judgment motion or by
presenting extrinsic evidence raising issues of facts on issues beyond those
pleaded in the complaint. The court then
concluded Pointe's evidence established (1) the complaint pleaded only claims
based on the 1992 Subdivision Improvement Agreements, (2) those agreements
lapsed on January 29, 2005, and (3) by April 15, 2005, County had decided not
to grant further extensions of the Subdivision Improvement Agreements and had
determined Pointe was in default on those agreements. The court concluded Pointe met its burden of
showing the County's complaint was required to be filed by January 29, 2009, and, because it was not filed until September 2009, Pointe met its
burden of establishing County's claims were time-barred.
The
court rejected County's effort to raise triable issues of fact on whether the Tri-Party
Agreement and the Amended Agreement extended the time for performing the
obligations of the Subdivision Improvement Agreements. First, the court concluded that claim was
outside the scope of County's claims as pleaded, because the complaint did not
assert its causes of action were based on the Tri-Party Agreement or the
Amended Agreement. Moreover, the court
noted neither the Tri-Party Agreement nor the Amended Agreement purported to
extend the time for performance of the obligations imposed by the Subdivision
Improvement Agreements.
The
court also rejected County's alternative assertion-- summary judgment was
improper because the complaint stated claims based on the independent
contractual undertakings embodied in the Tri-Party Agreement and the Amended
Agreement--because neither the breach of contract nor the declaratory relief
causes of action were based on breaches of the Tri-Party Agreement or the
Amended Agreement. The court noted the
complaint, although referring to the Tri-Party Agreement and the Amended
Agreement, specifically alleged Pointe breached the Subdivision Improvement
Agreements, which it defined to include the three 1992 agreements but not to
encompass either the Tri-Party Agreement or the Amended Agreement.
At
oral argument, the court also rejected County's request for leave to amend the
complaint to state claims based on breaches of the Tri-Party Agreement and the
Amended Agreement as untimely. The court
granted the summary judgment motion, and entered judgment on County's complaint
in favor of PCSD and Pointe Residential and against County. County timely filed its notice of appeal.
Pointe asserts (1) the appeal as to
PCSD should be dismissed because no argument of error was raised as to PCSD,
and (2) the judgment as to Pointe Residential is not appealable. The first argument is based on County's
nomenclature in its opening brief on appeal: County's opening brief defined the
term "Pointe" to mean Pointe Residential (and omitted inclusion of
PCSD under the term "Pointe") and thereafter argued the judgment in
favor of Pointe should be reversed.
However, County has filed a notice of errata correcting this omission, and
asserts that because all of its arguments applied equally to both PCSD and
Pointe Residential, and all of those arguments have been responded to on the
merits in the respondent's brief, no prejudice will result from permitting this
correction. We agree, and therefore deny
Pointe's motion to strike County's errata.
Pointe also asserts the judgment as to Pointe Residential is
interlocutory, and therefore is not appealable, because its cross-complaint
against County remains unresolved.
Although Pointe is correct as to the interlocutory nature of the appeal
as to Pointe Residential, this court has the power to treat a premature appeal
as a writ petition (Olson v. Cory
(1983) 35 Cal.3d 390, 399-401), and Pointe Residential has affirmed it has no
objection to this court doing so here.
The interests of judicial economy will be served by resolving the issues
raised both as to PCSD (in whose favor an appealable judgment was entered) and
Pointe Residential (in whose favor only a nonappealable interlocutory judgment
exists), because the issues raised are identical as to both PCSD's appealable
judgment and Pointe Residential's nonappealable judgment. We treat the appeal as to Pointe Residential
as a petition for writ of mandate rather than dismissing it. (G. E. Hetrick
& Associates, Inc. v. Summit Construction & Maintenance Co. (1992)
11 Cal.App.4th 318, 323-324.)
II
APPLICABLE LAW
Standards for Summary Judgment
When
a defendant moves for summary judgment on statute of limitations grounds, the
defendant bears the initial burden of production to demonstrate that the
limitations period has expired. (Code
Civ. Proc. § 437c, subd. (p)(2); Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 [the "initial
burden of production [requires the defendant] to make a prima facie showing of
the nonexistence of any triable issue of material fact"].)
sufficient to support the position of the party in question." (Aguilar,
at p. 851.) When the party moving for
summary judgment carries his initial burden of production and makes a prima
facie showing of the nonexistence of any triable issue of material fact, "he
causes a shift, and the opposing party is then subjected to a burden of
production of his own to make a prima facie showing of the existence of a
triable issue of material fact." (
Importantly,
as explained in County of Santa Clara v.
Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 332, " '[t]he
burden of a defendant moving for summary judgment only requires that he or she
negate plaintiff's theories of liability as alleged in the complaint. A "moving party need not '. . .
refute liability on some theoretical possibility not included in the pleadings.'
[Citation.]" . . . " '[A]
motion for summary judgment must be directed to the issues raised by the
pleadings. The [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.' " ' [Quoting Tsemetzin
v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342,
second italics added by County of Santa
Clara.]"
"Appellate
review of a ruling on a summary judgment or summary adjudication motion is de
novo." (Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 210.)
"While resolution of the statute of
limitations issue is normally a question of fact, where the uncontradicted
facts established through discovery are susceptible of only one legitimate
inference, summary judgment is proper."
(Jolly v. Eli Lilly & Co.
(1988) 44 Cal.3d 1103, 1112.)
III
ANALYSIS
A. Summary Judgment on the
Complaint Was Proper
County
apparently concedes its claims arising from Pointe's alleged breach of the Subdivision
Improvement Agreements would be barred by the expiration of the statute of
limitations, and therefore summary judgment would be proper, if those
agreements lapsed in January 2005.
Pointe's showing below satisfied its initial burden of making a prima
facie showing that the Subdivision Improvement Agreements did lapse in January 2005, because (1) they provided for the mode
by which those agreements could be extended (e.g. by Board approval either
unilaterally or on request of Pointe), (2) the agreements were extended several
times in accordance with the prescribed mode, (3) the last extension approved
by the Board specified an expiration date of January 29, 2005, and (4) County
informed Pointe on April 15, 2005, that the Subdivision Improvement Agreements
had expired and were in "default due to the original agreements expiring
on January 29, 2005." The burden therefore
shifted to County (Aguilar v. Atlantic
Richfield Co., supra, 25 Cal.4th at p.
850) to produce evidence raising a triable issue of fact on whether,
notwithstanding County's statement the Subdivision Improvement Agreements had
expired and were in default as of January 29, 2005, the Subdivision Improvement Agreements had not expired until some
later date.
County's
evidence in opposition to Pointe's statute of limitations showing was that the
2006 Amended Agreement was signed less than four years before County filed its
lawsuit, from which County asserts its lawsuit was timely. County argued the Subdivision Improvement
Agreements had not expired, and therefore its claims for breach of those
agreements were not time-barred, because the time for performing the
obligations imposed by the Subdivision Improvement Agreements was first
extended by the Tri-Party Agreement, and thereafter was extended by the Amended
Agreement, to a date less than four years before County's lawsuit was filed.
However,
as County conceded below, neither the Tri-Party Agreement nor the Amended
Agreement expressly extended the time for performing the obligations imposed by the Subdivision Improvement Agreements. To the contrary, the Tri-Party Agreement
provided it would construct road improvements to Jamacha Boulevard "as
required by TM4828-1 in accordance with
plans to be resubmitted for approval by [the DPW]" (italics added), and the subsequent Amended Agreement
reiterated that Pointe agreed to "construct the road improvements to
Jamacha Boulevard as required by TM4828-1 and
[CG] 4476 in accordance with plans approved by [the DPW]" (italics added), which is inconsistent with an
agreement to perform road improvement obligations previously imposed by the Subdivision Improvement Agreements. Indeed, the structure of the Tri-Party
Agreement created new obligations among its participants, rather than extending
the time for performing obligations imposed under the 1992 Subdivision
Improvement Agreements, because (1) the road plans had to be resubmitted,
approved and permitted under a distinct permit (CG 4476),
(2) the parties to the Tri-Party Agreement undertook obligations apparently
distinct from the obligations of Pointe under the Subdivision Improvement
Agreements,
title="">[9] and (3) the parties (when
they restructured these newly imposed obligations in the Amended Agreement in
recognition that "both [the] construction costs and the scope of work for
(italics added)) apparently acknowledged the "project" contemplated
by the "original contract" was limited to the stop-gap emergency
modification of Jamacha Boulevard.
the Amended Agreement contain any
references to the Subdivision Improvement Agreements, and were instead designed
to impose a new set of rights and obligations to solve distinct concerns by
each of the contracting parties, the trial court correctly ruled that neither
the Tri-Party Agreement nor the Amended Agreement was understood or intended by
the parties as extending the time for Pointe to perform its obligations under
the Subdivision Improvement Agreements.
This understanding and intent was confirmed by County because, shortly
after County finally approved the plans for the Jamacha Boulevard improvements
called for by the Tri-Party Agreement (and during the time Pointe was still
performing the independent obligations imposed under the Tri-Party Agreement)
County informed Pointe (in its April 15, 2005, letter) that the Subdivision
Improvement Agreements had expired and were in "default due to the
original agreements expiring on January 29, 2005."
County
argues the references in the Amended Agreement to Pointe's obligation to build "the
road improvements to Jamacha Boulevard as required by TM4828-1 and [CG] 4476"
by implication necessarily extended the time for performing the obligations
imposed on Pointe by the Subdivision Improvement Agreements. However, Pointe's showing below was that the
Tri-Party and Amended Agreements required improvements to Jamacha Boulevard
significantly different from the improvements required under the Subdivision Improvement
Agreements (see fn. 5, ante), and
were built under a distinct set of plans and at a different cost using
different financing arrangements. County's
showing below contained no evidence raising a triable issue of fact that "the
road improvements to Jamacha Boulevard as required by TM4828-1 and [CG] 4476"
were the same road improvement
obligations imposed on Pointe by the Subdivision Improvement Agreements, much
less that "the road improvements to Jamacha Boulevard as required by
TM4828-1 and [CG] 4476" were coextensive with all of the other obligations imposed on Pointe by the Subdivision
Improvement Agreements, and therefore County's claim that the later agreements
by implication necessarily extended the time for performing the earlier
agreements does not have evidentiary support.
We
conclude the trial court correctly ruled the Subdivision Improvement Agreements
lapsed more than four years before County's complaint was filed, and County's
claims asserting breach of the Subdivision Improvement Agreements were barred
by the expiration of the statute of limitations.
B. Denial of County's Motion for
Leave to Amend Was Not an Abuse of Discretion
County
alternatively argues the trial court abused its discretion when it denied its
motion for leave to amend the complaint.
Background
In
opposition to Pointe's summary judgment motion, County asserted summary
judgment was improper because the complaint set forth the terms of the
Tri-Party Agreement and the Amended Agreement, and the complaint alleged that
despite the Tri-Party Agreement and the Amended Agreement, Pointe had not
completed the required improvements to Jamacha Boulevard. County argued these
allegations, when liberally construed, stated facts sufficient to support a
claim for breach of the Tri-Party Agreement and the Amended Agreements, and its
2009 complaint for breach of those later agreements was not time-barred. Pointe argued the mere reference to those
later agreements did not preclude summary judgment on the complaint, because
(1) County's allegations demonstrated the action sought damages for breach of
the Subdivision Improvement Agreements, (2) County alleged the three 1992
contracts comprised the Subdivision Improvement Agreements and did not allege
the Tri-Party and the Amended Agreements were among the Subdivision Improvement
Agreements, and (3) the undisputed facts showed the Subdivision Improvement
Agreements involved distinctly different obligations from the obligations of
the Tri-Party and Amended Agreements.
County
alternatively argued that, even if its allegations were insufficient to state a
claim for breach of those later agreements, the materials submitted in
opposition to the motion for summary judgment demonstrated County could state a
claim for breach of those agreements and County should be granted leave to
amend the complaint to state claims for breach of the Tri-Party Agreement and
the Amended Agreement. Pointe argued
County's request for leave to amend should be denied because (1) the request
for leave to file an amended complaint was untimely and (2) an order permitting
County to amend to state entirely new claims for breach of the Tri-Party and
Amended Agreements would be futile because such claims would themselves be
time-barred. The court agreed the
request was untimely, and also questioned how County would obviate the statute
of limitations as to claims for breach of the Tri-Party and Amended
Agreements. Accordingly, the court
denied County's request to amend the complaint, and entered summary judgment in
favor of Pointe.
Applicable
Legal Principles
A
trial court has wide discretion to allow the amendment of pleadings, and
generally courts will liberally allow amendments at any stage of the
proceeding. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) However, unwarranted delay in seeking leave
to amend may be considered by the trial court when ruling on a motion for leave
to amend (Huff v. Wilkins (2006)
138 Cal.App.4th 732, 746), and appellate courts are less likely to find
an abuse of discretion where, for example, the proposed amendment is " 'offered
after long unexplained delay . . . or where there is a lack of
diligence . . . .' " (Hulsey
v. Koehler (1990) 218 Cal.App.3d 1150, 1159.) Thus, when a plaintiff seeks leave to amend
his or her complaint only after the defendant has mounted a summary judgment motion
directed at the allegations of the unamended complaint, even though the
plaintiff has been aware of the facts upon which the amendment is based,
allow plaintiffs to defeat [the] summary judgment motion
allowing them to present a 'moving target' unbounded by the pleadings." (Melican
v. Regents of University
A
trial court may also consider whether the proposed amendment would be
futile. For example, it is not an abuse
of the trial court's discretion to deny leave to amend when the newly proposed
causes of action would be barred by res judicata (Yee v. Mobilehome Park Rental
Review Bd. (1998) 62 Cal.App.4th 1409, 1428-1429) or by the statute
of limitations (Foxborough v. Van Atta
(1994) 26 Cal.App.4th 217, 230-231 (Foxborough)).
Analysis
County
asserts, and Pointe does not dispute, that County could have pleaded facts
adequate to state a cause of action for breach of the Tri-Party and Amended
Agreements. However, Pointe argues (and
County does not dispute) any such claim would have been time-barred had County
filed a new complaint against Pointe
on July 5, 2012, the date County sought leave to amend. Unless County's claims for breach of the Tri-Party
and Amended Agreements could take advantage of the so-called "relation-back"
doctrine, so any cause of action for breach of the Tri-Party and Amended
Agreements would be deemed (for limitations purposes) to have been filed as of
the date County filed its complaint on the Subdivision Improvement Agreements,
the trial court's refusal to allow an amendment as futile would not be an abuse
of discretion. (Foxborough, supra, 26 Cal.App.4th 217.)
"An
amended complaint is considered a new action for purposes of the statute of limitations
only if the claims do not 'relate back' to an earlier[,] timely[-]filed
complaint." (Pointe San Diego Residential Community, L.P. v. Procopio, Cory,
Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 276.) "An amended complaint relates back to a
timely[-] filed original complaint, and thus avoids the bar of the statute of
limitations, only if it rests on the same general set of facts and refers to
the same 'offending instrumentalities,' accident and injuries as the original
complaint." (Davaloo v. State Farm Ins. Co.
(2005) 135 Cal.App.4th 409, 415.) Thus, "[u]nder the relation-back
doctrine, an amendment relates back to the original complaint if the amendment:
(1) rests on the same general set of facts; (2)
instrumentality. [Citations.] An amended complaint relates back to an
earlier complaint if it is based on the same general set of facts, even if the
plaintiff alleges a different legal theory or new cause of action. [Citations.] However, the doctrine will not apply if . . .
'the plaintiff seeks by amendment to recover upon a set of facts entirely
unrelated to those pleaded in the original complaint.' " (Pointe
San Diego, at pp. 276-277.) "[A] plaintiff
who changes the essential facts upon which recovery is sought is not entitled
to the benefits of the relation-back doctrine . . . ."
(Davaloo, at p. 416.)
We are convinced County's proposed
amendment would have changed the essential facts upon
which recovery was sought and therefore would be outside the ambit of the
relation-back doctrine.
name="_ftnref11" title="">[11] The original complaint alleged the formation
of agreements in 1992 apparently obligating Pointe to build permanent
improvements to Jamacha
Boulevard that would be
integrated into a planned new freeway, and also obligating Pointe to make other
improvements, including water and sewer improvements. The amended complaint presumably would have
alleged the formation, 10 years later, of a different agreement apparently
obligating Pointe to build different improvements under a different set of
plans (e.g. temporary improvements to Jamacha Boulevard to serve as a stop-gap
measure pending resolution of the state's plans for the freeway, see fn. 5,
financing arrangements and contemplated different benefits for each of the
contracting parties. The original
complaint also involved a different date of default (early 2005) than did the
amended complaint (April 2007), different injuries (failure to construct road
improvements for freeway access versus failure to complete a widening of
Jamacha Boulevard), and involved potentially different counterclaims by Pointe
(alleging default by County as to County's obligations under the Tri-Party and
Amended Agreements that had no counterpart under the 1992 Subdivision
Improvement Agreements). Because County
could have commenced its action for breach of the contract alleged in its
original complaint over two years before
its claim against Pointe under the Tri-Party and Amended Agreements even
essential facts on which recovery was sought in part.
We
are convinced County's proposed amendment did not rest on the same general set
of facts, did not involve the same injury, and did not refer to the same
instrumentality, for purposes of the relation-back doctrine. (See, e.g.,
supra, 26 Cal.App.4th 217 [original complaint alleged
negligent transactional advice between 1978 and 1981 and proposed amendment
alleged negligence when attorney served as expert consultant and witness and
denied responsibility for the oversight; no relation back because latter was
separate incident that arose from new and later contractual relationship
between the parties]; Kim v. Regents of University of California (2000) 80 Cal.App.4th
160, 168-169 [amended complaint alleging cause of action for age
discrimination did not relate back to filing of the original complaint because
wrongful conduct described in the discrimination claim did not arise out of
same set of facts alleged in original complaint to support claims of breach of
contract and Labor Code violations]; Coronet
Manufacturing Co. v. Superior Court (1979) 90 Cal.App.3d 342, 347 [amended
complaint alleging decedent was electrocuted by lamp socket and switch
manufactured by one entity did not relate back to original complaint alleging
electrocution was caused by a defective hair dryer from a different
manufacturer].) Because County's
proposed amendment sought to interpose a claim that would not be eligible for
the relation-back doctrine and therefore would have been time-barred, the trial
court did not abuse its discretion when it denied County's request for leave to
amend.
DISPOSITION
The
judgment as to PCSD is affirmed. The petition
for writ of mandate as to the judgment in favor of Pointe Residential is
denied. Pointe is entitled to costs on
appeal.
McDONALD, J.
WE CONCUR:
BENKE, Acting P. J.
HALLER, J.
name="_ftn1" title="">[1] The street
improvement agreement covering "Streets, Drainage and Monuments Only"
was secured by a bond issued by Lumbermens Mutual Casualty Company, and the agreements
covering "Water Only" and "Sewer Only" were secured by
bonds issued by American Motorists Insurance Company.
name="_ftn2" title="">[2] The letter went on to
list four "items that need to be resolved before DPW can consider
recommending an extension," including that (1) the current owners of the
property appeared to be different from the Pointe entities that were parties to
the Improvement Agreement, (2) the current bonds were outdated both as to
ownership and because changed construction costs required revised estimates and
bond amounts, (3) the grading permit had expired five years earlier and needed
to be renewed, and (4) there was a discrepancy in the identity of the engineer
on the work. Additionally, DPW asked for
additional information on the status of the project's compliance with current
stormwater requirements and on what " 'substantial progress' is being
made to complete the improvements required by the final map." DPW indicated this information would assist
it "in determining potentials for agreement extensions."
