BONANDER v. TOWN OF TIBURON

Filed 1/31/07; pub. order 2/22/07 (see end of opn.)

THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

This appeal presents the question whether a lawsuit challenging a special assessment levied under the Municipal Improvement Act of 1913 (Sts. & Hy. Code,[1]  10000 et seq.) for failure to comply with Proposition 218 is subject to special procedural rules applicable to validation actions. Appellants are property owners who sought to invalidate a special assessment imposed by respondent Town of Tiburon (Town) to cover the costs of moving overhead utility lines underground. Appellants claimed the special assessment violates Proposition 218 because, among other things, the amount of the assessment exceeds any special benefits conferred on their properties. The trial court dismissed the action because appellants failed to publish notice of the action and file proof of publication within 60 days after the filing of the complaint, a procedural requirement that must be satisfied to confer jurisdiction in a validation action filed by an interested person. (See Code Civ. Proc.,  863.)

We conclude that appellants lawsuit constitutes a validation action subject to the procedural requirements governing such actions contained in section 860 et seq. of the Code of Civil Procedure. We also conclude the trial court did not abuse its discretion in finding no good cause for appellants failure to publish notice of their action within the required time period. Accordingly, we affirm the judgment.

Statutory and Constitutional Framework

Before describing the factual and procedural history of the dispute giving rise to this appeal, we provide an overview of the relevant legal framework pertaining to the Municipal Improvement Act of 1913, Proposition 218, and validation actions.

1. The Municipal Improvement Act of 1913

The use of the special or beneficial assessment district as a device for financing the cost of public improvements has a long pedigree in the history of public finance in the United States. [Citation.] As one law review article on the use of benefit assessment districts has noted, in the 19th century, local jurisdictions levied benefit assessments on property owners to finance street improvements abutting the owners properties. Although the community at large benefited from street improvements in the city, those property owners along the new or improved streets received special benefits that enhanced their property values and thus justified payment of benefit assessments. . . . As the need for public improvements at the local level increased, local governments expanded the application of benefit assessments to other types of improvements. [Citation.] (Not About Water Com. v. Board of Supervisors (2002) 95 Cal.App.4th 982, 991 (Not About Water).)

A special assessment differs in important respects from a tax. Unlike a tax, which is levied without regard to whether the property or person subject to the tax receives a special benefit not enjoyed by others (Knox v. City of Orland (1992) 4 Cal.4th 132, 142), the essential feature of the special assessment is that the public improvement financed through it confers a special benefit on the property assessed beyond that conferred generally. [Citations.] (Southern Cal. Rapid Transit Dist. v. Bolen (1992) 1 Cal.4th 654, 661.) [A] special assessment is levied against real property particularly and directly benefited by a local improvement in order to pay the cost of that improvement.  [Citation.] (Knox v. City of Orland, supra, 4 Cal.4th at p. 142.)

The Municipal Improvement Act of 1913 (hereafter 1913 Act), codified at section 10000 et seq., is one of many statutory schemes authorizing public agencies to impose special assessments to recoup the costs of public improvements that benefit particular properties. (See, e.g.,  5000 et seq. [Improvement Act of 1911],  18000 et seq. [Street Lighting Act of 1919],  22500 et seq. [Landscaping and Lighting Act of 1972].) The 1913 Act authorizes a municipality to install a variety of improvements in or along its streets, including water lines, utility lines and poles, and [a]ny other works, utility, or appliances necessary or convenient for providing any other service. ( 10100, subd. (e).) The 1913 Act specifically incorporates provisions of the Improvement Act of 1911 ( 5000 et seq.) relating to the conversion of overhead utility lines to underground locations. ( 10102.1.)

The 1913 Act establishes a multi-step process for municipalities to create assessment districts. (See generally Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 683 [describing pre-Proposition 218 process for establishing assessment district under 1913 Act].) The first step is the adoption by the local governments legislative body of a resolution of intention describing the proposed improvements, specifying the exterior boundaries of the proposed district, and providing for the issuance of improvements bonds to the extent the project is to be financed by bonds. ( 10200.) Following the preparation of a detailed report ( 10203, 10204), the legislative body must follow certain notice, hearing, and protest requirements. ( 10301.) Upon confirmation of a proposed assessment, the legislative body orders the improvements to be made and orders an assessment to be levied upon the affected parcels. ( 10312, subd. (a).) Bonds may be issued to finance the cost of the improvements. ( 10600.)

Any challenge to the validity of an assessment levied under the 1913 Act must be filed within 30 days after the assessment is levied. ( 10400.) The period for challenging the assessment is brief in order to prevent the possibility of attacks on the validity of assessments years after they are levied, to insure the marketability of assessment bonds at the time they are sold. (See Allis-Chalmers v. City of Oxnard (1980) 105 Cal.App.3d 876, 883.)

2. Proposition 218

The voters approved Proposition 218, the Right to Vote on Taxes Act, in November 1996. (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles(2001) 24 Cal.4th 830, 835.) Proposition 218 can best be understood as the progeny of Proposition 13, the landmark initiative measure adopted in 1978 with the purpose of cutting local property taxes. (Howard Jarvis Taxpayers Assn. v. City of Riverside (1999) 73 Cal.App.4th 679, 681.) One of the principal provisions of Proposition 13 limited ad valorem property taxes to 1 percent of a propertys assessed valuation and limited increases in the assessed valuation to 2 percent per year unless and until the property changed hands. [Citation.] [] To prevent local governments from subverting its limitations, Proposition 13 also prohibited counties, cities, and special districts from enacting any special tax without a two-thirds vote of the electorate. [Citations.] (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal.App.4th at pp. 681-682.)

Local governments found a way to get around Proposition 13s limitations, owing in part to a determination that a special assessment was not a special tax within the meaning of Proposition 13. (See Knox v. City of Orland, supra, 4 Cal.4th at p. 141.) As a consequence, a special assessment could be imposed without the two-thirds vote required by Proposition 13. (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal.App.4th at p. 682.) The ballot arguments in favor of Proposition 218 declared that politicians had exploited this loophole by calling taxes assessments and fees that could be enacted without the consent of the voters. (Apartment Assn. of Los Angeles v. City of Los Angeles, supra, 24 Cal.4th at p. 839.) Proponents of Proposition 218 claimed that [s]pecial districts [had] increased assessments by over 2400% over 15 years. (Ibid.)

To address these concerns, the electorate approved Proposition 218, adding articles XIII C and XIII D to the California Constitution. (Howard Jarvis Taxpayers Assn. v. City of Riverside, supra, 73 Cal.App.4th at p. 682.) Proposition 218 allows only four types of local property taxes: (1) an ad valorem property tax; (2) a special tax; (3) an assessment; and (4) a fee or charge. [Citations.] It buttresses Proposition 13s limitations on ad valorem property taxes and special taxes by placing analogous restrictions on assessments, fees, and charges. (Ibid.)

Proposition 218 establishes certain procedures and requirements applicable to all assessments. (Cal. Const., art. XIII D,  4.) An assessment under Proposition 218 means any levy or charge upon real property by an agency for a special benefit conferred upon the real property. (Cal. Const., art. XIII D,  2, subd. (b).) Special assessments and benefit assessments are both encompassed within the term assessment as used in Proposition 218. (Ibid.) Special benefit is defined as a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute special benefit.  (Cal. Const., art. XIII D,  2, subd. (i).)

Proposition 218 imposes certain notice and hearing requirements before a public agency may adopt a special assessment. (Cal. Const., art. XIII D,  4, subds. (c), (d) & (e).) Also, an assessment may only be imposed if (1) it is supported by an engineers report (Cal. Const., art. XIII D,  4, subd. (b)), (2) it does not exceed the reasonable cost of the proportionate special benefit conferred on each affected parcel (Cal. Const., art. XIII D,  4, subds. (a) & (f)), and (3) it receives a vote of at least half of the owners of affected parcels, weighted according to the proportional financial obligation of the affected property. (Cal. Const., art. XIII D,  4, subd. (e).)

The procedural limitations contained in Proposition 218 apply to the 1913 Act as well as other statutory schemes authorizing a local government to levy special assessments. In order to conform the notice, hearing, and other requirements of the 1913 Act with the mandates of Proposition 218 and the statutory provisions enacted to implement Proposition 218 (Gov. Code,  53750 et seq.), legislation passed in 2003 amended or repealed various provisions of the 1913 Act.[2] (Stats. 2003, ch. 194,  21.)

In addition to specifying procedures that must be followed by a local government before it may levy a special assessment, Proposition 218 also addresses who bears the burden of demonstrating that the amount of an assessment is justified by the special benefits enjoyed by the affected property. (Cal. Const., art. XIII D,  4, subd. (f).)

3. Validation Actions

A validation action, also sometimes referred to as a validating proceeding, is an action that permits a public agency to establish that certain actions it may take are valid and immune from further attack. (See Code Civ. Proc.,  860 et seq.; Kaatz v. City of Seaside(2006) 143 Cal.App.4th 13, 19, 29-30 (Kaatz).) The procedural framework for validation actions is found in Chapter 9 of Part 2, Title 10 of the Code of Civil Procedure, encompassing sections 860 through 870.5 (hereafter the validation statutes).

A validation action is in the nature of a proceeding in rem. (Code Civ. Proc.,  860.) A public agency may file a validation action to determine the validity of any matter brought within the scope of the validation statutes. (Ibid.) Alternatively, any interested person may bring a validation action to determine the validity of the matter. (Id.,  863.) A validation action initiated by an interested person is sometimes referred to as a reverse validation action.[3] (Kaatz, supra, 143 Cal.App.4th at p. 30, fn. 16.)

Under the validation statutes, [t]he public agency may validate its action by either active or passive means. It may initiate an action in rem to establish the validity of the matter. [Citation.] Alternatively, the agency may do nothing, and if no interested person brings suit to determine the validity of the public agencys action within 60 days [citation] the action is deemed valid. (Kaatz, supra, 143 Cal.App.4th at p. 19.) Thus, although section 863 of the Code of Civil Procedure states that an interested person may file a validation action, the failure to do so results in being forever barred from contesting the validity of the agencys action in a court of law. (City of Ontario v. Superior Court (1970) 2 Cal.3d 335, 341 (City of Ontario).) The validation procedure is intended to provide a uniform mechanism for prompt resolution of the validity of a public agencys actions. [Citation.] The procedure assures due process notice to all interested persons and settles the validity of a matter once and for all by a single lawsuit.  [Citation.]. (Katz v. CampbellUnionHigh School Dist. (2006) 144 Cal.App.4th 1024, 1028 (Katz).)

Validation actions are subject to special procedural rules, including the requirement that the summons must be directed to all persons interested in the matter and must contain a detailed summary of the matter that the public agency or an interested person seeks to validate. (Code Civ. Proc.,  861.1.) In addition, when an interested person files a validation action, that person must complete service by publication in a newspaper of general circulation and file a proof of publication within 60 days of the filing of the complaint, unless good cause excuses the failure to comply. (Id.,  861, 863.) If an interested person who files a validation action fails to comply with this requirement and offers no showing of good cause excusing this failure, the court lacks jurisdiction to hear the matter and the action shall be forthwith dismissed. (Id.,  863; Community Redevelopment Agency v. Superior Court (1967) 248 Cal.App.2d 164, 179-180 (Community Redevelopment).)

Factual and Procedural Background

As of May 2005, appellants Jimmie D. Bonander, Jean Bonander, Shelley Mulberg, and Frank Mulberg owned real property in the Town. Their properties were within the border of an assessment district known as the Del Mar Valley Utility Undergrounding Assessment District (District).

The history of the District dates back to at least May 2003, when property owners petitioned the Town Council to form an assessment district for the purpose of placing overhead utility lines underground. In June 2003, the Town adopted a resolution declaring its intention to form an assessment district to finance the undergrounding of utilities. The District was to be formed under the authority of the 1913 Act and article XIII D of the California Constitution, which was added by Proposition 218.

A final engineers report explained that the undergrounding project would provide aesthetic, service reliability, and safety benefits to the affected properties. Appellants, along with other property owners, objected to the proposed assessment and sought to be excluded from the District. The proposed assessment for each of appellants properties was $31,146.62.

The Town held a public hearing on May 18, 2005, to hear testimony and protests relating to the proposed District. At the close of the hearing, the Town tallied the votes of affected property owners. By a margin of 71% to 29%, the property owners vote favored creation of the District. Because there was no majority protest against the proposed District, the Town Council voted unanimously to adopt Resolution No. 21-2005 approving the final engineers report, creating the District, and approving the assessments.

On June 16, 2005, appellants filed a complaint on behalf of themselves and a number of their neighbors similarly situated seeking to invalidate the special assessment on their properties. Styled a Petition for Writ of Administrative Mandamus (CCP  1094.5) or Mandate (CCP  1085) and Complaint for Declaratory and Injunctive Relief, the complaint contained four causes of action, including three causes of action for either an administrative or traditional writ of mandate and one cause of action seeking declaratory relief. Both the summons and the complaint named only the Town, the Town Council, and Does 1 through 20 as defendants and respondents (collectively referred to herein as the Town). The summons was not directed to all persons interested in the subject matter of the complaint.

In their complaint, appellants asserted that the amount of the assessment on each of their properties violated Proposition 218 because it exceeded the reasonable cost of the proportional special benefit conferred on their respective parcels. They alleged that the Town acted in excess of its jurisdiction by imposing an assessment initiated by an inadequate petition. Appellants further alleged that the Town adopted an inadequate Resolution of Intention, illegally formed the District boundaries through gerrymandering and tainted voting, and illegally formed zones within the District. They also claimed there was no substantial evidence to support a determination that placing overhead utilities underground provided any special benefit to their properties. Appellants alleged the Town Council abused its discretion by refusing to consider evidence that the District as created violated the California Constitution, the 1913 Act, and the Towns own published undergrounding policies.

In their prayer for relief, appellants sought to invalidate the Towns approval of the District. Specifically, they sought a peremptory writ of mandate ordering the Town to set aside Resolution No. 21-2005, which approved the assessments and created the District. They also sought a preliminary and permanent injunction enjoining the Town from enforcing Resolution No. 21-2005, and they requested a declaration that Resolution No. 21-2005 . . . including the assessment noticed May 27, 2005, is void and invalid . . . .

On June 17, 2005, appellants had the summons and complaint personally served on a person authorized to accept service on behalf of the Town. On July 11, 2005, the trial court granted appellants ex parte application for a temporary restraining order. The courts order provided that during the pendency of the action the Town could not take any action with respect to appellants properties to give effect to Resolution 21-2005. The order also set out a briefing schedule on the merits of the complaint, with a hearing set in October 2005.

On August 2, 2005, the Town filed an answer to the complaint. As an affirmative defense to the complaint, the Town alleged that appellants were required to, but failed to, comply with the statutory requirement for pursuing this action, including without limitation Code of Civil Procedure section 860 et seq. [i.e., the validation statutes].

According to a declaration filed in the trial court, appellants counsel discovered the possible applicability of the validation statutes on Sunday, August 14, 2005, as counsel was preparing appellants opening trial court brief. The following day, August 15, 2005, was the sixtieth day after the filing of the complaint. Appellants claim they made an ex parte appearance on that date before the trial court, which purportedly granted them a two-day extension to comply with the validation statutes.[4]

In an apparent attempt to comply with the requirements of the validation statutes, appellants mailed the original summons to the property owners in the District on August 15, 2005. At the bottom on the summons (directed only to the Town, the Town Council, and Does 1 through 20), appellants added handwriting stating: 8/15/05 - To All Interested Parties [] See Notice Attached to Summons. A notice attached to the summons was directed to All PERSONS INTERESTED IN THE MATTER OF THE DEL MAR UTILITY UNDER GROUNDING DISTRICT. The notice referred to appellants complaint against the Town and stated in relevant part, All Persons Interested in the matter of determining the validity or invalidity of said Assessment District under Proposition 218 and Article 13D, section 4 of the California Constitution, which is the subject of this lawsuit, as it relates to determination if the assessment levy apportionment formula adopted by such Assessment District results in assessment amounts per parcel that exceed the special benefits attributable to each parcel may file a written Answer to the Complaint. Appellants filed a proof of service on August 15, 2005, indicating that the original summons and the notice prepared by appellants had been served by mail on the property owners.

Appellants appeared ex parte before the trial court on August 17, 2005, the sixty-second day after the complaint was filed. Appellants sought an order amending the summons to comply with the validation statutes, including adding all persons interested to the summons. Appellants did not concede the validation statutes were applicable but merely claimed the purpose of the request was for protective purposes in an abundance of caution. The trial court issued an order granting leave to file the amended summons and attached notice, which was substantially the same as the notice served by mail on affected property owners two days earlier. The amended summons was directed to the Town and all persons interested in matter of Del Mar Utility Undrgrdg Assmt District. The courts order also directed the clerk of the court to authorize issuance of the amended summons and notice. Notably, the courts order was limited to authorizing issuance of the amended summons. It did not extend the time for publishing the summons or complying with the validation statutes, nor did it contain any finding there was good cause to excuse appellants noncompliance with the validation statutes.

Appellants proceeded to publish the amended summons and notice of lawsuit in the Marin Independent Journal newspaper once a week for four consecutive weeks, beginning with the edition on August 19, 2005. On September 9, 2005, 85 days after the action was commenced, appellants filed a proof of publication of the amended summons.

Appellants filed their opening brief on the merits of the complaint on August 24, 2005. The Town filed its opposition on September 23, 2005. The same day, the Town also filed a separate notice of motion and motion to dismiss for appellants failure to comply with certain procedures governing validation actions found in sections 861, 861.1, and 863 of the Code of Civil Procedure. The Town provided points and authorities supporting the motion to dismiss in the brief addressing the merits of appellants complaint. The Town contended that appellants challenge to the District and the assessments constituted a validation action subject to the procedural requirements of the validation statutes, including the requirement that appellants file a proof of publication within 60 days of the complaints filing. Because appellants failed to comply with the 60-day summons publication requirement, the Town urged that the trial court was required to dismiss the action under Code of Civil Procedure section 863.

In reply, appellants contended it was unclear whether the validation statutes applied to their action, which included injunctive and declaratory relief. They claimed it is well settled than the validation statutes do not apply to actions for injunctive and declaratory relief, and that at a minimum the issue was complex and debatable, thereby providing good cause for appellants noncompliance with the validation statutes. Appellants also argued that they made a good faith effort to comply with the service requirements by serving all of the affected property owners by mail on the sixtieth day after the complaint was filed. In a declaration accompanying their reply, appellants claimed that due to the complex and complicated nature of the validation statutes, they did not believe the procedural requirements contained in the validation statutes applied to an action to nullify an underground utility assessment district that purportedly violates Proposition 218.

The trial court granted the Towns motion to dismiss. In its order, the court identified allegations and prayers for relief in the complaint demonstrating appellants intention to invalidate the entire District and not just their individual assessments. The court held that under Not About Water, supra, 95 Cal.App.4th 982, a lawsuit such as that filed by appellants was subject to the requirements found in the validation statutes. The court further found that appellants had not complied with the publication requirements of the validation statutes, stating that even though the court allowed petitioners to attempt to resurrect their case, upon their petition, last summer, this compliance has not occurred . . . .

The court also found an absence of good cause for appellants failure to complete publication of the summons and to file proof of such publication within 60 days of the date the complaint was filed. The court stated: Although an honest and reasonable mistake of law on a  complex and debatable issue is excusable and constitutes good cause for relief, [citation], [appellants] point to no complex and debatable issue which led to their failure to comply with [Code of Civil Procedure] sections 861, 861.1, and 863. The court explained that the Not About Water case concerned claims similar to those raised by appellants under the 1913 Act and Proposition 218, and the court there held that the proceeding was a validation action subject to the requirements of the validation statutes.

The trial court entered a judgment of dismissal on November 22, 2005. Appellants timely appealed.

Discussion

Appellants contend the trial court erred in granting the Towns motion to dismiss, arguing that the procedural requirements of the validation statutes do not apply to a special benefits determination under Proposition 218. Alternatively, appellants assert that, to the extent the validation statutes apply, the trial court abused its discretion by failing to find good cause excusing appellants failure to comply with the summons publication requirement contained in Code of Civil Procedure section 863.

Whether an interested person demonstrated good cause for failing to comply with the summons publication requirements is a question committed to the sound discretion of the trial court. (Katz, supra, 144 Cal.App.4th at p. 1031.) Accordingly, our review of the trial courts good cause determination is governed by the deferential abuse of discretion standard. (Ibid.; see also City of Ontario, supra, 2 Cal.3d at p. 347.) Appellate courts will rarely interfere in such determinations, and  never unless it clearly appears that there has been a plain abuse of discretion.   [Citations.] (City of Ontario, supra, 2 Cal.3d at p. 347.) To establish an abuse of discretion, the complaining party must show that the challenged action constituted a clear case of abuse and a miscarriage of justice. (Blank v. Kirwan (1985) 39 Cal.3d 311, 331.) The remaining issues turn upon the interpretation and applicability of the validation statutes, various provisions of the 1913 Act, and Proposition 218. These issues present questions of law to which we apply an independent review. (Katz, supra, 144 Cal.App.4th at p. 1031.)

As explained below, we conclude that an action challenging the validity of a special assessment imposed under the 1913 Act is governed by the validation statutes. This conclusion is unchanged by the fact that a challenge to a special assessment is premised on an asserted violation of Proposition 218. We also conclude that appellants failed to identify a complex and debatable issue that would constitute good cause for their failure to comply with the requirements governing validation actions.

1. Appellants Failed to Comply with the Procedural Requirements of the Validation Statutes.

A. Appellants Service by Mail of the Original Summons and Their Belated Publication of the Amended Summons did not Satisfy the Publication Requirement Contained in the Validation Statutes.

The validation statutes require that a plaintiff in a reverse validation action publish the summons and file proof of that service within 60 days after commencement of the action.[5] (Code Civ. Proc.,  863.) The procedural requirements of the validation statutes are strictly applied. (See County of Riverside v. Superior Court (1997) 54 Cal.App.4th 443, 451-452 (County of Riverside).) [S]ection 863 [of the Code of Civil Procedure] requires the publication of summons in the precise form and within the time prescribed. Unless good cause is shown by plaintiffs for their failure to comply with the requirements of that section, the court has no jurisdiction to hear their action. (Community Redevelopment, supra, 248 Cal.App.2d at pp. 179-180.) Belated compliance with the statute does not confer jurisdiction to hear the matter. (Id. at p. 180.)

There is little dispute but that, to the extent the validation statutes apply, appellants failed to timely comply with the requirements relating to the summons and its publication. The summons as originally issued was not directed to all persons interested in the action. (See Code Civ. Proc.,  861.1.) Plus, proof of service by publication was not filed within 60 days of the filing of the action. Indeed, publication of the amended summons directed to all persons interested did not even commence until after the sixtieth day following the filing of the complaint.

Appellants do not suggest they complied with the specific requirements of the validation statutes, but they point out they served notice by mail on all property owners within the District on the sixtieth day after the complaint was filed. Although appellants raise this issue primarily in connection with their argument concerning whether good cause exists to excuse noncompliance with the validation statutes, we address the issue here to confirm that personal service on interested persons does not confer jurisdiction under the validation statutes.

As noted above, a validation action is a proceeding in rem. (Code Civ. Proc.,  860.) The very purpose of an in rem action is to provide a binding judgment against the world. (Planning & Conservation League v. Department of Water Resources (2000) 83 Cal.App.4th 892, 921.) The use of the term jurisdiction in this context is deceptive. Since jurisdiction is necessary over the res, not over persons, in a validation proceeding, section 861 of the Code of Civil Procedure is in essence a notice provision. Interested persons must have notice by publication of summons before the court can obtain in rem jurisdiction of the validation action. (Id. at p. 922.)

In the usual case, service by publication is done as a method of last resort when the defendant cannot be found even after the exercise of reasonable diligence. . . . In a validation or reverse validation action, by contrast, published notice to members of the public is the primary means of notice. Such actions involve matters of general public interest, and there is at least some reasonable expectation that potentially concerned parties will observe the notice and consider whether or not to take action on one side or the other. (County of Riverside, supra, 54 Cal.App.4th at p. 450.)

Personal service or service by mail upon interested persons does not confer jurisdiction in a reverse validation action. (Cf. Katz, supra, 144 Cal.App.4th at p. 1032 [jurisdiction over the parties does not confer jurisdiction over the matter].)  The service of a summons by publication is in derogation of the common law, and in order to obtain such constructive service, the statute must be substantially complied with and its mandates observed. [Citation.] When jurisdiction is obtained by a prescribed form of constructive notice the statutory conditions upon which the service depends must be strictly construed. Unless the statute has been complied with there is no power to render a judgment. [Citation.] (Community Redevelopment, supra, 248 Cal.App.2d at p. 178; accord Katz, supra, 144 Cal.App.4th at pp. 1034-1035.) Accordingly, assuming the validation statutes apply, appellants attempt to serve notice by mail on all affected property owners did not cure their noncompliance with the summons publication requirement or confer jurisdiction on the trial court.

B. An Action to Determine the Validity of a Special Assessment under the 1913 Act is Governed by the Validation Statutes.

It is beyond dispute that appellants failed to comply with the procedural requirements applicable to validation actions. The key question is whether an action such as that filed by appellants is governed by the validation statutes. To answer this question, we turn to the history of the validation statutes.

The validation statutes were first enacted in 1961 in an attempt to standardize the procedure by which public agencies established the validity of certain actions. (City of Ontario, supra, 2 Cal.3d at p. 340.) When the Judicial Council originally proposed adoption of the validation statutes, it explained its concern about numerous and scattered statutes authorizing actions by cities, counties, and public agencies to establish the validity of their bonds or assessments or the legality of their existence. (Ibid.) In order to provide a simple, uniform procedure governing such actions, the Judicial Council proposed the validation statutes. (Ibid.) The Judicial Council specifically warned, however, that the validation statutes would only apply when and to the extent they were made applicable by a statute relating to a particular public agency, in order to prevent the procedure from covering matters not studied by the Council which might be less adaptable to the procedure.  [Citation.] (Ibid.)

The principle limiting which governmental actions are subject to the validation statutes is embodied in section 860 of the Code of Civil Procedure, which states in relevant part that a public agency may bring a validation action upon the existence of any matter which under any other law is authorized to be determined pursuant to this chapter . . . . (Italics added.) Not all actions of a public agency are subject to validation. (Kaatz, supra, 143 Cal.App.4th at p. 19.) Rather, we look to other statutes and the cases that have interpreted them to determine the scope of public agency actions subject to validation under the validation statutes. (Id. at p. 31.)

Here, we need not look far to find the relevant statute. In Division 12 of the Streets and Highways Code, which contains the codification of the 1913 Act, section 10601 provides as follows: An action to determine the validity of the assessment, bonds, contract, improvement or acquisition may be brought by the legislative body or by the contractor pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure [i.e., the validation statutes]. For such purpose an improvement or acquisition shall be deemed to be in existence upon its authorization and an assessment upon its confirmation. Notwithstanding any other provisions of law, the action authorized by this section shall not be brought by any person other than the legislative body or the contractor, nor except when permitted by Section 10400 shall the action be brought after the date fixed for the beginning of work. ( 10601.)

Although section 10601 is found in a chapter of the 1913 Act addressing improvement bonds, it is apparent that the section has a general application to any action falling within its scope under the 1913 Act, and it specifically applies to an action to determine the validity of an assessment. Thus, this statute constitutes the other law authorizing application of the validation statutes to an action by a public agency to determine the validity of an assessment under the 1913 Act.[6] (See Code Civ. Proc.,  860.)

TO BE CONTINUED AS PART II.

Publication Courtesy of San Diego County Legal Resource Directory.

Analysis and review provided by San Diego County Property line attorney.

[1] All further statutory references are to the Streets and Highways Code unless otherwise specified.

[2] Thus, for example, before the voters approved Proposition 218, a public agency could adopt a special assessment under the 1913 Act over the protest of a majority of affected property owners with a four-fifths vote of the agencys legislative body. (See former  10311, as amended by Stats. 1994, ch. 860,  5.) After the adoption of Proposition 218, a public agency may not override the affected property owners rejection of a proposed assessment district. (Cal. Const., art. XIII D,  4, subd. (e).)

[3] Except where necessary to distinguish between direct validation actions filed by a public agency and reverse validation actions filed by an interested person, our use of the term validation action encompasses both types of action.

[4] There is nothing in the record confirming that the trial court issued an order extending by two days appellants time to comply with the validation statutes. The only reference in the record to the supposed order of August 15, 2005, is contained in a declaration filed by appellants in the trial court on August 17, 2005.

[5] Specifically, section 863 of the Code of Civil Procedure provides that in any validation action filed by an interested person the summons shall be in the form prescribed in [Code of Civil Procedure] Section 861.1 except that in addition to being directed to all persons interested in the matter of [specifying the matter], it shall also be directed to the public agency. If the interested person bringing such action fails to complete the publication and such other notice as may be prescribed by the court in accordance with [Code of Civil Procedure] Section 861 and to file proof thereof in the action within 60 days from the filing of his complaint, the action shall be forthwith dismissed on the motion of the public agency unless good cause for such failure is shown by the interested person. The summons must be published in a newspaper of general circulation once a week for three successive weeks. (Code Civ. Proc.,  861; Gov. Code,  6063.)

[6] Somewhat surprisingly, none of the parties to this appeal identified a statutory basis to apply the validation statutes to an action challenging a special assessment levied under the 1913 Act. In preparation for oral argument, we requested that counsel be prepared to discuss the relevance of section 10601 and identify any other statutory authority for applying the validation statutes under the circumstances presented here. While counsel for appellants disputed whether section 10601 requires that a challenge to a special assessment be pursued as a reverse validation action, counsel nonetheless agreed that section 10601 is the only possible statutory basis for invoking the validation statutes in an action such as theirs. (Cf.  10100.2, subd. (e) [authorizing validation action with regard to earthquake-related improvements].) The Towns counsel acknowledged that section 10601 is the relevant statutory authority.