KAATZ v. CITY OF SEASIDE

Filed 9/20/06

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Code of Civil Procedure sections 860 through 870 (hereafter the validation statutes)[1] provide an expedited process by which certain public agency actions may be determined valid and not subject to attack. The 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. (§ 860.) Alternatively, the agency may do nothing, and if no “interested person” brings suit to determine the validity of the public agency’s action within 60 days (§ 863), the action is deemed valid. (§ 869.) But not all actions of a public agency are subject to validation, and the present case requires us to determine the limits of sections 860 through 870.

Benjamin Kaatz brought suit as a taxpayer to challenge certain actions of the City of Seaside (City) arising out of its purchase and sale of 105 acres of residential property that were formerly part of the Fort Ord military base. Kaatz claimed, among other things, that immediately after the City purchased the property from the United States Army in July 2002, it conveyed the entire acreage to a developer, K&B Bakewell Seaside Venture, LLC (K&B Bakewell), for a fraction of its fair market value. Following motions for judgment on the pleadings and for dismissal filed by K&B Bakewell (joined in by the City), the suit was dismissed on the basis that it was time barred. In so doing, the court concluded that (1) the challenged purchase and sale of property were matters that were embraced by Government Code section 53511’s language[2] permitting a local agency to bring a proceeding under the validation statutes to “determine the validity of its bonds, warrants, contracts, obligations or evidences of indebtedness,” and (2) Kaatz had not filed suit to determine the validity of the City’s actions within 60 days as required by the validation statutes.

As a threshold matter, we will address K&B Bakewell’s motion to dismiss the appeal--joined in by the City--on the basis that the notice of appeal was not filed within 30 days of entry of judgment as provided in section 870, subdivision (b) (section 870(b)). We will conclude that the notice of appeal was timely filed; section 870(b) does not apply here, because the appeal is not challenging a “judgment entered pursuant to” the validation statutes. We will then address the primary issue on appeal, namely, whether the City actions challenged by Kaatz were ones that were subject to validation under sections 860 through 870. We will hold, based upon the limited scope of the validation statutes, that the City’s conveyance of the property--along with the City’s prior execution of the underlying contract with the developer concerning the potential acquisition and sale of the property--was not subject to validation. We will therefore find that the trial court erred in its application of the 60-day statute of limitations for validation proceedings and consequent dismissal of the action. Accordingly, we will reverse the judgment entered on that dismissal.

PROCEDURAL HISTORY

I. Early Proceedings

On May 16, 2003, Kaatz filed a complaint (captioned “Complaint by Taxpayer for Injunctive Relief [CCP § 526a]”)[3] alleging eight claims for relief against the City.[4] Kaatz alleged that he resided in the City and had paid real property taxes to the City within one year before the action was initiated. Kaatz challenged, among other things, the validity of a deed by which the City conveyed property known as the “Hayes Park Property” (hereafter Hayes Park or Property) to K&B Bakewell.

Kaatz sought an order pendente lite enjoining the City from granting any construction permits and from approving any final parcel maps for Hayes Park. On August 7, 2003, after extensive briefing and argument, the court granted a preliminary injunction preventing the City from “taking any action with regard to approval of the final subdivision map“ for the Property.[5]

One day after granting the preliminary injunction, the court granted Kaatz’s motion for leave to amend the complaint to add K&B Bakewell as a defendant. And less than a week later, K&B Bakewell filed a motion for an order vacating the preliminary injunction, or, in the alternative, an order increasing the amount of the bond from $1,000 to $5,320,000. K&B Bakewell argued that it--as well as buyers of homes who had already planned to move into the development--would suffer substantial injury if the injunction were allowed to remain in effect. Over Kaatz’s opposition, the court vacated the preliminary injunction on August 15, 2003, on the condition that K&B Bakewell’s parent, KB Home, execute an enforceable guaranty of any monetary judgment imposed against K&B Bakewell.[6]

II. Second Amended Complaint

The second amended complaint was the operative pleading addressed in K&B Bakewell’s alternative motions to dismiss and for judgment on the pleadings.[7] Kaatz asserted eight causes of action against all defendants, each claim arising generally out of the City’s purchase of Hayes Park from the United States Army and the City’s immediate resale of that Property to K&B Bakewell. As to the majority of the claims, Kaatz cited as authority the statute permitting suit by a taxpayer to prevent the “illegal expenditure of, waste of, or injury to, the estate, funds, or other property of a . . . city” under section 526a. (See fn. 3, ante.)

The relevant allegations of the second amended complaint consisted of the following: (1) Following the enactment of the Defense Base Closure and Realignment Act of 1990, as amended,[8] the United States closed the Fort Ord military base located in Monterey County; (2) The federal government was authorized to sell as surplus property (under the National Defense Authorization Act for Fiscal Year 1996)[9] portions of the former Fort Ord, including Hayes Park; (3) On or about May 4, 1998, the City, pursuant to its council’s resolution authorizing such action, entered into an agreement with K&B Bakewell concerning Hayes Park entitled “Land Disposition Agreement“ (LDA); (4) On or about July 25, 2002, the federal government conveyed the Property by quitclaim deed to the City for a purchase price of $5,100,000; (5) Also on or about July 25, 2002, the City transferred all of its interest in Hayes Park to K&B Bakewell for $5,950,000; (6) The City’s transfer of the Property was in contravention of the City Council’s resolution approving the LDA that the Property “not be sold for other than ‘fair market value,’ “ was a breach of the City’s “statutory duty to make the surplus property available for affordable housing,” was done “without ever considering any other bid, proposal, or offer for the [Property],” and was “in violation of the constitutional and statutory prohibition against cities giving away public property”; and (7) As a result, K&B Bakewell stood to “pocket, in addition to standard profit on the housing construction, an approximately $115 million pure cash windfall representing the value of the [Property] purportedly purchased from the City . . . for a fraction of its fair market value.”

The first cause of action sought to invalidate the deed of the Property from the City to K&B Bakewell. Kaatz alleged that the alleged transfer was void because the LDA, as approved by the City Council, required that Hayes Park be sold at its fair market value.

The second cause of action likewise sought to void the transfer of Hayes Park to K&B Bakewell--and to invalidate the LDA--on the ground that the City, both through its execution of the LDA in 1998 and its conveyance of the Property in July 2002, violated the Surplus Land Act (Gov. Code, § 54220 et seq.).[10] Kaatz alleged that that statute required the City to provide statutory notice to specified public agencies prior to selling or otherwise disposing of surplus public land acquired from the federal government to facilitate that law’s goal of making such surplus land available for affordable housing.

Kaatz alleged as a third cause of action that the deed of the Property to K&B Bakewell and the underlying LDA were void because they constituted a sale of city property below fair market value and did not fall within the statutory exception of Government Code section 37364, under which a city may sell its land for below fair market value where the sale’s specific purpose is to create affordable housing.[11]

The fourth cause of action claimed that the LDA required K&B Bakewell, in conjunction with acquiring the Property, to construct two public works projects to be located on City-owned land outside of Hayes Park, namely, a 4,000 square foot building and 10 housing units for homeless persons. Kaatz alleged that the LDA was void because the City failed to solicit competitive bids for construction of these two public works, as required under Public Contract Code section 20162.

Under the fifth cause of action, Kaatz similarly sought avoidance of the LDA. He alleged that, notwithstanding the LDA’s recital that it was approved after a “ ‘duly noticed public hearing,’ “ no valid public hearing occurred, because “the terms and conditions of the LDA were modified on the very day the LDA Public Hearing was held.”

The sixth cause of action alleged that the California Constitution (art. 16, § 6) “prohibits public entities from giving away public property.” Kaatz asserted that, because the City sold Hayes Park to K&B Bakewell for five percent of its fair market value, the LDA and deed were void because the City’s actions were unconstitutional.

The seventh cause of action alleged that the City’s actions in transferring the Property constituted a “waste of public estate, property and funds.” Kaatz claimed that the LDA and deed to K&B Bakewell were therefore void.

Finally, Kaatz alleged in the eighth cause of action that there was a present controversy that required (under section 1060) a judicial declaration of the parties’ rights and duties under the LDA and deed conveying the Property to K&B Bakewell.

III. Motion To Dismiss Or Motion For Judgment On The Pleadings[12]

On November 14, 2003, K&B Bakewell filed a motion to dismiss, or, in the alternative, a motion for judgment on the pleadings. K&B Bakewell argued that the actions of the City being challenged--the execution of the LDA and the sale of the Property pursuant to that agreement--were subject to the validation statutes, and that because Kaatz had not brought a validating proceeding within 60 days, his action was time barred. The City filed a joinder, and Kaatz opposed K&B Bakewell’s alternative motions.

After extensive briefing (including several posthearing briefs) and argument, and after submission of the matter, on March 12, 2004, the court granted the motion to dismiss. It concluded that the City’s challenged actions were subject to validation and accordingly Kaatz’s claims were barred by the 60-day statute of limitations under the validation statutes.[13]

Judgment was entered on the dismissal on April 1, 2004. K&B Bakewell gave written notice of entry of the judgment on April 5, 2004.

IV. Postjudgment Motions

On April 20, 2004, Kaatz filed alternative motions for new trial or to set aside and vacate the judgment. Kaatz’s principal argument was that the court, in ruling on the alternative motions to dismiss or for judgment on the pleadings, granted the motion for judgment on the pleadings; the court therefore should have granted leave to amend. Kaatz’s alternative motions for new trial or to set aside the judgment--opposed by K&B Bakewell and the City (hereafter sometimes collectively respondents)--were denied by the court.

On June 4, 2004, Kaatz filed a notice of appeal from the judgment of dismissal and from the order denying the alternative motions for new trial or to set aside the judgment. K&B Bakewell filed a motion to dismiss the appeal, and the City joined in that motion. After considering Kaatz’s opposition and K&B Bakewell’s reply, this court ordered that the dismissal motion be heard concurrently with the appeal.

DISCUSSION

I. Issues On Appeal

Kaatz contends that the court erred in dismissing the action. He asserts that the action was not brought under, and was thus not subject to, a 60-day statute of limitations specified in the validation statutes. Kaatz argues further that his appeal was timely.

II. Timeliness Of Notice Of Appeal

Because the timely filing of a notice of appeal is a jurisdictional prerequisite for our review of this case (Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 56), we first address respondents’ motion to dismiss the appeal. Here, the notice of appeal was filed on the 60th day after K&B Bakewell mailed a notice of entry of judgment. Respondents contend that the notice of appeal was not timely filed because, pursuant to section 870(b), “no appeal shall be allowed from any judgment entered pursuant to this chapter [9, sections 860 through 870] unless a notice of appeal is filed within 30 days after the notice of entry of the judgment.” Kaatz responds that he is not challenging by appeal a “judgment entered pursuant to” the validation statutes. Therefore (he asserts), his notice of appeal was timely filed under rule 2(a)(2) of the California Rules of Court, which specifies that the “normal time” for filing an appeal from a judgment is “60 days after the party filing the notice of appeal serves or is served by a party with a document entitled ‘Notice of Entry’ of judgment.”

The motion to dismiss the appeal presents an interesting conundrum. Respondents assert that since the trial court concluded that the validation statutes applied to Kaatz’s claims--and, accordingly it dismissed the action--the judgment entered on the dismissal was clearly one “entered pursuant to” the validation statutes. Therefore (they argue), the 30-day appeal period of section 870(b) applies, and this court must dismiss the appeal without regard to its underlying merits. Thus, respondents urge that we must dismiss the appeal because the trial court ruled that the action was subject to the validation statutes, regardless of whether that conclusion was correct. Naturally, Kaatz argues that we must consider the underlying merits to determine whether the action was governed by the validation statutes before we may consider whether the notice of appeal was timely filed. We concur with Kaatz’s position.

We are directed to no authority squarely holding that where the trial court concludes that an action is one for which a special statute applies for purposes of calculating the timeliness of a notice of appeal--and the appellant disputes that characterization of the action--the appellate court must accept without question the lower court’s conclusion. Nor do we find the absence of such authority surprising; the proposition respondents advance seemingly suggests an abdication of the appellate court’s responsibilities.

Respondents, however, urge that dismissal of the appeal here is supported by Planning & Conservation League v. Department of Water Resources (1998) 17 Cal.4th 264 (Planning & Conservation League I), a case in which the Supreme Court held that a notice of appeal based upon an appealable order under the validation statutes was untimely. There, the Supreme Court noted that the underlying facts and the merits of the dispute were not relevant to its determination of the timeliness of the appeal. (Id. at p. 267.) But in that case, there was no dispute between the parties that the underlying action was brought under the validation statutes. Instead, the court only addressed “the narrow procedural issue” (ibid.) of whether section 870(b) applied not only to judgments entered in validating proceedings, but to appealable orders as well. Thus, the court was not faced with the unusual procedural setting present here: an appeal from the dismissal of an action in which the plaintiff (Kaatz) did not invoke the validation statutes--and one in which, parenthetically, the public agency defendant (City) only belatedly asserted the statutes’ applicability--but the trial court concluded that the action was subject to the validation statutes. Planning & Conservation League I does not suggest dismissal of the appeal in this case.[14]

Kaatz cites three cases that he contends support his position that we may consider the underlying merits of the appeal to decide whether the shortened appeal period of section 870(b) applies. (See New Davidson Brick Co. v. County of Riverside (1990) 217 Cal.App.3d 1146 (New Davidson Brick); Bliler v. City of San Diego (1976) 61 Cal.App.3d 530; Vogel v. City of Millbrae (1959) 167 Cal.App.2d 403.). These cases have some bearing on our inquiry; in each of them, the appellate court examined the substance of the plaintiff’s claims to determine whether the action was one that, in fact, invoked the statute that provided for a shortened appeal period. (See, e.g., New Davidson Brick, supra, at p. 1151.) But while they are somewhat supportive of our conclusion that, in resolving the motion to dismiss the appeal, we must consider whether the validation statutes apply to Kaatz’s claims, these cases are by no means dispositive. In none of the cases did the trial court determine that the action was in fact subject to a statute that invoked a shortened appeal period. Thus, the appellate courts were not addressing the precise question here: Are we precluded from reviewing the trial court’s specific finding that the case was subject to the validation statutes, thereby rendering applicable, ipse dixit, the shortened appeal period of section 870(b)?

We conclude that in order to determine the timeliness of the appeal notice, under the circumstances here, we must determine if the underlying action was, in fact, a proceeding under the validation statutes. This requires us, of necessity, to resolve the principal issue of the appeal itself. A contrary conclusion, we believe, would yield an anomalous and unjust result. It would preclude review on the merits of a trial court decision by having the appellate court assume the applicability of a statute providing for a shortened appeal period without regard to whether that assumption was correct. Our view that we must consider whether Kaatz’s action was, in fact, subject to the validation statutes--rather than agreeing blindly with the trial court on this point--is consistent with “the well-established policy, based upon the remedial character of the right of appeal, of according that right in doubtful cases ‘when such can be accomplished without doing violence to applicable rules.’ [Citation.]” (Hollister Convalescent Hosp., Inc. v. Rico (1975) 15 Cal.3d 660, 674.)[15]

We foreshadow the balance of our decision by summarily noting our conclusion below that the City’s conduct challenged by Kaatz was not subject to the validation statutes. The 30-day appeal period under section 870(b) was therefore inapplicable. The appeal was filed within 60 days of the mailing by a party of the notice of entry of judgment as required by California Rules of Court, rule 2(a)(2). We thus deny respondents’ motion to dismiss.

III. The Order Dismissing The Action

A. Standard of Review

Kaatz argues that the trial court’s dismissal of the action is subject to de novo review. Citing McKay v. County of Riverside (1959) 175 Cal.App.2d 247, 249, he asserts that when the dismissal motion challenged the pleadings, the order of dismissal should be treated on appeal as if it had been an order sustaining a demurrer without leave to amend. Of course, under well settled principles, “[t]he function of a demurrer is to test the sufficiency of the complaint as a matter of law, and it raises only a question of law. [Citations.] On a question of law, we apply a de novo standard of review on appeal. [Citation.]” (Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1420.) Respondents do not discuss the applicable standard of review.

It is settled that one method of asserting a challenge that an action was untimely filed under the validation statutes is by the method employed here, namely, a motion to dismiss. (See Smith v. Mt. Diablo Unified Sch. Dist. (1976) 56 Cal.App.3d 412, 415; Phillips v. Seely (1974) 43 Cal.App.3d 104, 109.) A defense that the statute of limitations bars a validation proceeding, however, may also be asserted by demurrer. (See Meaney v. Sacramento Housing & Redevelopment Agency (1993) 13 Cal.App.4th 566, 572; see also Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995 [complaint barred on its face by statute of limitations subject to general demurrer].) And “[w]hether a statute of limitations applies ordinarily is a question of law.” (See Embarcadero Mun. Improvement Dist. v. County of Santa Barbara (2001) 88 Cal.App.4th 781, 789.)

As we will discuss, the principal issue here is whether the matters alleged in Kaatz’s second amended complaint were subject to the validation statutes, thereby rendering the 60-day statute of limitations provided in those statutes applicable. This issue, in turn, is resolved through interpreting Government Code 53511 and the validation statutes. As such, the issue here is one of law requiring our independent review. (Planning & Conservation League v. Department of Water Resources (2000) 83 Cal.App.4th 892, 906 (Planning & Conservation League II)

We review the court’s order dismissing Kaatz’s action with the above standard of review in mind.

B. K&B Bakewell’s Motion to Dismiss

The essential position advanced in K&B Bakewell’s alternative motions to dismiss and for judgment on the pleadings was that Kaatz’s claims were based on a challenge to the validity of the LDA, executed in May 1998. The City’s execution of the LDA was a “contract” such that the City, as a local public agency, had the right to bring an action to determine the LDA’s validity under former Government Code section 53511, and under the validation statutes. Therefore (K&B Bakewell argued) Kaatz was required to have filed his complaint within 60 days of the LDA’s execution in May 1998; Kaatz’s action (filed in May 2003) was initiated nearly five years too late. As a fallback position, K&B Bakewell argued that if the suit were construed simply as a challenge to the City’s sale of the Property, it would nonetheless be time barred; since the sale occurred in July 2002, Kaatz was required under sections 860 through 870 to have filed an action challenging the validity of the City’s action no later than September 2002.

In opposing K&B Bakewell’s alternative motions, Kaatz argued that the LDA and subsequent deeding of the Property by the City were not the kinds of public agency actions that were governed by the validation procedures specified in sections 860 through 870. Accordingly (Kaatz asserted), the action was not time barred.

In the court’s lengthy ruling granting the motion to dismiss, it discussed the various authorities cited by the parties. It held that the validation procedures specified in sections 860 through 870 applied to the City’s challenged actions. The court’s holding was based upon the following reasoning: (1) Unless contracts such as the LDA were subject to the validation statutes (i.e., allowing for a prompt determination of such contract’s validity), the City’s ability to operate financially would be substantially impaired; (2) significant third-party financial interests were affected by the LDA, suggesting a need for prompt validation of the LDA; and (3) the LDA was a financing mechanism by which the City had acquired the Property.

C. The Validation Statutes

Sections 860 through 870 provide a procedure by which a public agency may determine the validity of certain acts. The public agency may bring a validating proceeding in superior court within 60 days of “the existence of any matter which under any other law is authorized to be determined pursuant to [the validation statutes].” (§ 860.) Such an action is “in the nature of a proceeding in rem.” (Ibid.) And where the public agency does not initiate a validating proceeding under section 860, “any interested person may bring an action within the time and in the court specified by Section 860 to determine the validity of such matter.” (§ 863.)[16] The interested person must bring a validating proceeding within 60 days: “No contest except by the public agency or its officer or agent of any thing or matter under this chapter shall be made other than within the time and the manner herein specified.” (§ 869.) Thus, insofar as section 863 provides that an interested person “may” bring a validating proceeding, the statute “seems innocuous enough . . . section 869 says he must do so or be forever barred from contesting the validity of the agency’s action in a court of law.” (City of Ontario v. Superior Court (1970) 2 Cal.3d 335, 341 (City of Ontario).)[17]

To be continue as Part II...

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[1] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

[2] After the motion to dismiss was heard and decided, Government Code section 53511 was amended; the text of the former statute that is at issue here remained unchanged but was designated as subdivision (a) in the amendment. (See Stats. 2004, ch. 470, § 3, p. 3064.) Unless otherwise specified, we will refer to Government Code section 53511 as it existed before its 2004 amendment.

[3] Section 526a reads in part: “An action to obtain a judgment, restraining and preventing any illegal expenditure of, waste of, or injury to, the estate, funds, or other property of a . . . city . . . of the state, may be maintained against any officer thereof, or any agent, or other person, acting in its behalf, either by a citizen resident therein, or by a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax therein.”

[4] The action also named Daniel E. Keen as a defendant in his official capacity as City Manager. City and Keen were and are represented by the same counsel and their positions concerning the litigation do not diverge. We will therefore for simplicity refer to them collectively as the “City.”

[5] In so ruling, the court found that there was a reasonable probability that Kaatz would prevail on his claims that the City had violated (1) the Surplus Land Act (Gov. Code, § 54220 et seq.), and (2) Government Code section 37364 by selling the property for less than its fair market value.

[6] In its motion--countering Kaatz’s argument that an injunction was needed to prevent the possibility that K&B Bakewell (a limited liability corporation) would dissipate the profits it had obtained from purchasing and developing the Property--KB Home (a corporation listed on the New York Stock Exchange) offered to guarantee any unsatisfied money judgment that might ultimately be entered against K&B Bakewell.

[7] K&B Bakewell’s alternative motions to dismiss and for judgment on the pleadings attacked Kaatz’s first amended complaint. (The filing of K&B Bakewell’s motions predated the filing of Kaatz’s motion for leave to file the proposed second amended complaint, wherein Kaatz sought to amend the prayer.) But at the hearing on K&B Bakewell’s alternative motions, all parties stipulated that Kaatz could file the amended pleading and that the court could consider K&B Bakewell’s motions as applying to the second amended complaint. The second amended complaint did not alter the material allegations of the first amended complaint.

[8] See Public Law 101-510 section 2905(b)(2)(D), (Nov. 5, 1990), 104 Stat. 1814, set forth as subsequently amended as Note following section 2687 of title 10 United States Code. The Defense Base Closure and Realignment Action of 1990 (Pub. L. 101-510), as subsequently amended, is found in the notes following 10 U.S.C. 2687.

[9] See Public Law 104-106, sections 3411-3415 (Feb. 10, 1996) 110 Stat. 186, 631-635, reprinted at Historical and Statutory Notes of title 10 United States Code (1998 ed.) following section 7420.

[10] “The Legislature reaffirms its declaration that housing is of vital statewide importance to the health, safety, and welfare of the residents of this state and that provision of a decent home and a suitable living environment for every Californian is a priority of the highest order. The Legislature further declares that there is a shortage of sites available for housing for persons and families of low and moderate income and that surplus government land, prior to disposition, should be made available for that purpose.” (Gov. Code, § 54220, subd. (a).) “Any agency of the state and any local agency disposing of surplus land shall, prior to disposing of that property, send a written offer to sell or lease the property as follows:

(a) A written offer to sell or lease for the purpose of developing low- and moderate-income housing shall be sent to any local public entity as defined in Section 50079 of the Health and Safety Code, within whose jurisdiction the surplus land is located. Housing sponsors, as defined by Section 50074 of the Health and Safety Code, shall, upon written request, be sent a written offer to sell or lease surplus land for the purpose of developing low- and moderate-income housing. . . . With respect to any offer to purchase or lease pursuant to this subdivision, priority shall be given to development of the land to provide affordable housing for lower income elderly or disabled persons or households, and other lower income households.” (Gov. Code, § 54222.)

[11] “The Legislature reaffirms its finding that the provision of housing for all Californians is a concern of vital statewide importance. . . . [N]otwithstanding any provision of a city’s charter, or any other provision of law, whenever the legislative body of a city determines that any real property or interest therein owned or to be purchased by the city can be used to provide housing affordable to persons and families of low or moderate income, as defined by Section 50093 of the Health and Safety Code or as defined by the United States Department of Housing and Urban Development or its successors, and that this use is in the city’s best interests, the city may sell, lease, exchange, quitclaim, convey, or otherwise dispose of the real property or interest therein at less than fair market value, or purchase an interest in the real property, to provide that affordable housing under whatever terms and conditions the city deems best suited to the provision of such housing.” (Gov. Code, § 37364, subd. (a).)

[12] To avoid repetition, we present further particulars regarding K&B Bakewell’s alternative motions to dismiss or for judgment on the pleadings in part III section B of the Discussion, post.

[13] After the alternative motions to dismiss or for judgment on the pleadings were heard but before the motion to dismiss was granted, K&B Bakewell filed a demurrer to the second amended complaint. The demurrer challenged each cause of action on grounds other than Kaatz’s failure to bring a timely validation proceeding under section 860 through 870. Because granting the motion to dismiss disposed of the entire action, the court never ruled on the merits on K&B Bakewell’s demurrer. The dismissal order specifically noted that in light of its ruling on the motion to dismiss, the court took “no action with respect to [K&B Bakewell’s] Demurrer.”

[14] Additionally, as we will discuss (see pt. III sec. D.3.b., post), the Supreme Court’s discussion of the legislative history of the 1985 and 1994 amendments to section 870 suggest that the validation statutes do not apply to the claims asserted by Kaatz here. (See Planning & Conservation League I, supra, 17 Cal.4th at pp. 271-273.)

[15] In noting this principle, we acknowledge that it is most commonly enunciated in cases where the appellant has filed a timely notice of appeal that is claimed to be procedurally defective in some respect, not in instances where there is a controversy concerning whether the normal time for filing an appeal under California Rules of Court, rule 2(a) applies. (See, e.g., Rapp v. Golden Eagle Ins. Co. (1994) 24 Cal.App.4th 1167 [motion to dismiss appeal denied where notice was timely but check accompanying it for filing fee and deposit was insufficient].)

[16] The initiation of a validating proceeding by an “interested person” is sometimes referred to as a “reverse validation action.” (See Embarcadero Mun. Improvement Dist. v. County of Santa Barbara, supra, 88 Cal.App.4th at p. 792.)

[17] We note that while “any interested person” must bring a validating proceeding within 60 days, “no such restriction is placed on the [public] agency itself, which is in effect authorized by section 869 to disregard the 60-day statute of limitations imposed by section 860.” (City of Ontario, supra, 2 Cal.3d at p. 341, fn. omitted.) This is the case because the second sentence of section 869 provides: “The availability to any public agency, including any local agency, or to its officers or agents, of the remedy provided by this chapter, shall not be construed to preclude the use by such public agency or its officers or agents, of mandamus or any other remedy to determine the validity of any thing or matter.”