MONTEREY/SANTA CRUZ COUNTY BUILDING AND CONSTRUCTION TRADES COUNCIL v. CYPRESS MARINA HEIGHTS LP











Filed 1/10/11; pub. order 1/24/11 (see end of opn.)









IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

MONTEREY/SANTA CRUZ COUNTY BUILDING AND CONSTRUCTION TRADES COUNCIL et al., Plaintiffs and Respondents, v. CYPRESS MARINA HEIGHTS LP, Defendant and Appellant.

H034143 (Monterey County Super. Ct. No. M81343)

Plaintiffs,[1] who are labor organizations, an association of contractors, and two City of Marina taxpayers, prevailed in their action for declaratory and injunctive relief against Cypress Marina Heights LP (CMH). CMH had acquired Fort Ord land from the City of Marina’s Redevelopment Agency (MRDA) for the development of CMH’s Marina Heights project. MRDA had acquired that land from the Fort Ord Reuse Authority (FORA). Deed covenants in the FORA/MRDA deeds required payment of the prevailing wage to workers on all development of the land. CMH refused to commit to pay the prevailing wage to workers on the Marina Heights project. It claimed that its purchase agreement with MRDA did not require payment of the prevailing wage. The trial court granted plaintiffs’ summary adjudication motion and found that it was undisputed that CMH was required to pay the prevailing wage on the Marina Heights project. The court thereafter entered judgment for plaintiffs and awarded plaintiffs their attorney’s fees under Code of Civil Procedure section 1021.5.
CMH appeals. It claims that triable issues of fact precluded summary adjudication of the prevailing wage issue. CMH also contends that the trial court abused its discretion in awarding plaintiffs their attorney’s fees and awarded plaintiffs an excessive amount of fees. We find no error or abuse of discretion in the trial court’s rulings and affirm the judgment.

I. Undisputed Facts
Fort Ord was a military base in Monterey County which closed in 1994. FORA was created by the Legislature to facilitate the transition of Fort Ord to civilian use. FORA’s board is made up of representatives from each of its member jurisdictions, including the City of Marina. In 1997, the FORA board adopted a Master Resolution.[2]
Chapter 3 of the Master Resolution was entitled “Procurement Code.”[3] Article 3.03 of this chapter was entitled “Public Works Contracts.” The first seven sections of this article dealt with the procedures for bids on public projects. The fourth section of this article, section 3.03.040, was entitled “Local Preference.” The eighth and ninth sections of this article concerned prevailing wages.
Section 3.03.090, which was entitled “Prevailing Wages,” provided: “Not less than the general prevailing rate of wages for work of a similar character in Monterey County as determined by the Director of the Department of Industrial Relations pursuant to the provisions of Division 2, Part 7, Chapter 1 of the California Labor Code shall be paid to all workers employed on construction.[[4]] This subsection is applicable only to work performed under contract and is not applicable to work carried out by the Authority with its own forces.”
Section 3.03.100, which was entitled “Developers of Property Pursuant to Agreements with FORA,” provided: “Any developer or owner of property, including any governmental entity, who enters into an Agreement with FORA for the acquisition, disposition, or development of property at Fort Ord shall pay or cause to be paid to all workers employed in connection with the development of such property an amount not less than the general prevailing rate of pay as established pursuant to Section 3.03.090 of this Master Resolution and shall employ local workers and grant local preferences pursuant to Section 3.03.040 of this Master Resolution. The provisions of this section relating to the payment of prevailing wages pursuant to Section 3.03.090 of this Master Resolution shall apply only to work performed under contract and are not applicable to work carried out by paid, full time employees of the developer or owner of property.”[5]
In 1999, the City of Marina (the City) promulgated a “Request for Qualifications/Proposals for a Master Housing Developer” (RFQ) for a housing development on Fort Ord land. The City’s RFQ stated: “FORA and the City shall require the Master Developer to pay prevailing wage rates, comply with FORA local preference policy and be consistent with the FORA procurement code.” When CMH submitted a bid in response to the RFQ, the City noted that CMH’s bid had not “Specifically Addressed” the prevailing wage requirement.
In 2001, FORA entered into an Implementation Agreement with the City governing the transfer of Fort Ord property to the City. The Implementation Agreement, which was recorded, required the City to “use or transfer” any such property in compliance with the Master Resolution and the specific deed restrictions which were attached to the Implementation Agreement. These deed restrictions included: “The Owner, for itself and for its heirs, assigns, and successors in interest, covenants and agrees that: [¶] . . . Any development of the property will be and is subject to the provisions of the Reuse Plan, the policies and programs of the Fort Ord Reuse Authority, including the Authority’s Master Resolution . . . .” “This Deed Restriction and Covenants . . . is hereby deemed and agreed to be a covenant running with the land binding all of the Owner’s assigns or successors in interest.” The Implementation Agreement was an integrated agreement, and it provided: “No waiver of any right or obligation of either Party hereto shall be effective unless in writing, specifying such waiver, executed by the Party against whom such waiver is sought to be enforced.” The Implementation Agreement permitted the City to assign its rights under the agreement to its redevelopment agency.
In 2002, the City and its redevelopment agency (MRDA) entered into an Option Agreement with CMH under which CMH obtained the option to purchase a 248-acre site within Fort Ord and develop 1,050 residential units on this site. This proposed residential development was referred to as the Marina Heights project. Almost all of the proposed residential units were intended to be sold to the general public at market rates.
In 2005 and March 2006, FORA conveyed the property upon which the Marina Heights project was to be sited to MRDA by means of a series of quitclaim deeds, which were recorded. MRDA paid $1 for each deed. The deeds stated that the Implementation Agreement set forth the terms and conditions upon which the deeds were conveyed and accepted: “[The Implementation Agreement] sets forth the specific terms and conditions upon which the Grantor agrees to convey and the Grantee agrees to accept title” to this property. (Bold omitted.) The deeds also stated: “Grantee covenants for itself, its successors, and assigns and every successor in interest to the Property, or any part thereof, that Grantee and such successors and assigns shall comply with all provisions of the Implementation Agreement as if the Grantee were the referenced Jurisdiction under the Implementation Agreement and specifically agrees to comply with the Deed Restrictions and Covenants set forth in Exhibit F of the Implementation Agreement as if such Deed Restrictions and Covenants were separately recorded prior to the recordation of this Deed.” (Bold omitted.) Finally, the deeds stated: “The conditions, restrictions, and covenants set forth in this Deed are a binding servitude on the herein conveyed Property and will be deemed to run with the land in perpetuity. Restrictions, stipulations and covenants contained herein will be inserted by the Grantee verbatim or by express reference in any deed or other legal instrument by which it divests itself of either the fee simple title or any other lesser estate in the Property or any portion thereof.” (Bold omitted.)
In April 2006, MRDA conveyed the Marina Heights property to CMH by quitclaim deeds pursuant to the Option Agreement in exchange for more than $10 million. CMH paid fair market value for the property, and it received no public subsidies. MRDA’s deeds to CMH stated that “[t]he Property is conveyed subject to the Option Agreement,” and they required CMH to “comply with all of the terms and conditions of the Option Agreement with respect to the construction of Improvements . . . .” The deeds also provided: “The conditions, restrictions, and covenants set forth in this deed are a binding servitude on the herein conveyed Property and will be deemed to run with the land in perpetuity.”
In March 2007, the FORA board amended its prevailing wage policy to clarify that the prevailing wage “ ‘shall be paid to all workers employed on the first generation construction performed on parcels subject to the Fort Ord Base Reuse Plan’ ” including “ ‘work performed . . . by contract with a FORA member or a FORA member agency including their transferees, agents, successors-in-interest, developers or building contractors.’ ”

II. Procedural Background
In October 2006, plaintiffs filed an action against Marina Community Partners, LLC (MCP), Shea Properties LLC (Shea), W.L. Butler Construction, Inc., Target Corporation, MRDA, and various individuals. In July 2007, plaintiffs filed a second[6] amended complaint which added as defendants CMH, East Garrison Partners I LLC (Garrison), and the Monterey County Redevelopment Agency.[7] Plaintiffs alleged that CMH had violated the deed covenants, the Labor Code, and the Unfair Competition Law (UCL) by refusing to honor its obligation to pay the prevailing wage.[8] Plaintiffs sought an injunction mandating that CMH pay the prevailing wage, and a declaration that CMH was required to pay the prevailing wage. They also sought attorney’s fees under Code of Civil Procedure section 1021.5.
In February 2008, the trial court issued a preliminary injunction against some of the defendants named in the original complaint, but not CMH or Garrison.[9]
In July 2008, plaintiffs filed a motion for summary judgment or summary adjudication of their causes of action against CMH.[10] Plaintiffs asserted that the Master Resolution, the Implementation Agreement, the deed covenants, and the extrinsic evidence all unambiguously required CMH to pay and cause to be paid the prevailing wage. Plaintiffs argued that “the Master Resolution is made applicable to downstream government entities and developers through the implementation agreement,” which binds the downstream developers through the deed covenants In support of their motion, plaintiffs submitted the declaration of Ron Chesshire, who had been the president of plaintiff Monterey/Santa Cruz Building and Construction Trades Council until 2008. Chesshire asserted that, if the Marina Heights project “is bid on a non-prevailing wage basis, many union-signatory contractors will either not bid on the work (because they correctly believe such bids would likely be futile), or if they bid will be less likely awarded the work.”
CMH opposed the motion on multiple grounds. It argued: (1) the Master Resolution’s prevailing wage provisions apply to only public works; (2) CMH was not bound by the Master Resolution because its contract was with MRDP, not FORA, and the Option Agreement did not require CMH to pay the prevailing wage; (3) the prevailing wage requirement was not a covenant that runs with the land; (4) FORA and MRDP waived the prevailing wage requirement; and (5) plaintiffs lack standing to assert these claims against CMH.
CMH submitted evidence that the Marina Heights project was not a “public works” project because it had paid “fair market value” for the land and was receiving no public subsidies. CMH also submitted extrinsic evidence which it claimed established that FORA, the City, and MRDA had not intended for the prevailing wage requirement in the Master Resolution to apply to successors-in-interest.[11] MRDA’s attorney declared that it was “my understanding” that the Master Resolution and the Implementation Agreement did not “require prevailing wages,” but “instead” left it to MRDA to decide whether to require that the prevailing wage be paid. In a March 2006 memo written by FORA’s attorney to FORA’s executive officer, FORA’s attorney asserted that FORA “may not . . . require each entity taking title from FORA to pass this obligation along to its successors in title until the ice caps thaw or the sun fizzles out‌ The law disfavors such ‘dead hand’ deed restrictions. Landowners can not tie up its use with such minute restrictions.” In an October 2006 memo from FORA’s attorney to FORA’s executive committee, the attorney reached a similar conclusion. “These provisions [sections 3.03.090 and 3.03.100 of the Master Resolution] do not require third parties to pay prevailing wages on Fort Ord. They limit that requirement to FORA and its contractors.” CMH also asserted that, because construction had not yet begun, “no workers have actually been damaged (underpaid) because there has been no work on the project for which prevailing wages were owed but not paid.” However, CMH made no secret of the fact that it did not intend to honor a prevailing wage requirement.
The superior court granted summary adjudication of two of plaintiffs’ causes of action against CMH: the cause of action for violation of the deed covenants and the associated cause of action for declaratory relief. The court found that there were no triable issues regarding the requirement of “payment of prevailing wages on this project.”[12] The court reasoned: “The plain meaning of Section 3.03.100, in context, supports Plaintiffs’ arguments that the prevailing wage requirement was not restricted to public works contracts.” Under the Master Resolution, “as enforced through the Implementation Agreement and deed covenants[,] . . . prevailing wages are required to be paid on the project.” The court discounted CMH’s reliance on the Option Agreement and on the intent of the parties to the Option Agreement because “any downstream agreement . . . cannot circumvent the Master Resolution’s prevailing wage requirement. . . . [MRDA] could not simply bargain away the prevailing wage requirements.”
Plaintiffs abandoned their remaining causes of action against CMH and sought entry of judgment requiring CMH to pay the prevailing wage. The court entered a judgment awarding plaintiffs declaratory and injunctive relief. The court declared that CMH’s Marina Heights project is “covered by prevailing wage requirements in the Ford Ord Reuse Authority Master Resolution and implementing documents,” and ordered CMH to “pay prevailing wages” on “all ‘First Generation Construction’ work” on the Marina Heights project. The court defined “ ‘First Generation Construction’ ” to mean “construction performed during the development of each parcel of real property at the time of transfer from the public agency” to CMH “until issuance of a certificate of occupancy by the initial owners or tenants of each parcel.” The judgment also required CMH to “include in all calls for bids, bid specifications and contracts . . . an express requirement that such work be performed at the prevailing wage . . . .”
Plaintiffs filed a motion seeking $212,550 in attorney’s fees under Code of Civil Procedure section 1021.5 from CMH and Garrison, as to whom plaintiffs had also obtained summary adjudication on a separate motion.[13] In support of their motion, they submitted their billing records and an expert’s declaration that the hourly rates sought were reasonable. Chesshire submitted a declaration in which he stated that the case had “benefitted a large class of persons” because the Marina Heights project and the Garrison project were expected to “provide work to over 900 construction workers.” Because “we do not expect unionized contractors will get all the work on these projects,” the judgment would benefit many contractors who were not members of the unions represented by plaintiffs. Plaintiffs argued that fees for work done “analyzing the Master Resolution and implementation agreements and the issues of standing” in connection with plaintiffs’ action against other defendants were properly chargeable to CMH and Garrison because this work was “common work . . . done on common issues . . . .”
CMH opposed plaintiffs’ attorney’s fees motion. It asserted that plaintiffs had failed to demonstrate that their action had “benefitted the general public or a large class beyond Plaintiffs’ own members and the unions themselves.” CMH also argued that liability for attorney’s fees should not be joint and several between CMH and Garrison because different projects were involved. Finally, CMH urged that the amount of fees sought was unreasonable, and it maintained that $25,000 was the amount of fees attributable solely to plaintiffs’ action against CMH. CMH argued that the only attorney’s fees attributable to CMH were the fees associated with the filing of the second amended complaint and the summary judgment/summary adjudication motion against CMH.
The court found that the litigation “resulted in the enforcement of an important right affecting the public interest.” “[I]t has ramifications that’s [sic] beyond the interests of the parties directly before the court.” Public agencies had refused to pursue this litigation, and the financial burden of the fees far exceeded the financial value of the litigation to plaintiffs. “Plaintiffs’ pecuniary benefit will be indirect and uncertain.” Thus, plaintiffs were entitled to fees. The court also found that the hourly rate sought was reasonable. In terms of whether time spent on other parts of the litigation was properly chargeable to CMH, the court found that “Plaintiffs’ time spent on this entire action was useful and necessary to its ultimate resolution.” The court decided not to make the award joint and several but to allocate only 35 percent of the fees to CMH and the other 65 percent of the fees to Garrison. This was based on the court’s finding that CMH was “less culpable” than Garrison.[14] The court ordered CMH to pay $73,167.50 in attorney’s fees. The court entered an amended final judgment which incorporated the attorney’s fees award. CMH timely filed a notice of appeal.

III. Discussion
CMH contends that the Master Resolution’s provisions did not apply to its project because those provisions were limited to public works and to those in privity with FORA. CMH also contends that the deed covenants did not contain a prevailing wage requirement, or at least there were triable issues of fact as to whether they did, and, in any case, those covenants did not run with the land. Finally, CMH contends that any prevailing wage requirement could not be enforced against it because FORA waived the requirement and plaintiffs lacked standing to enforce such a requirement. CMH also challenges the attorney’s fees award.

A. Summary Adjudication Standard of Review
“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.) “The purpose of the law of summary judgment [and summary adjudication] is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) “[S]ummary judgment law in this state no longer requires a plaintiff moving for summary judgment to disprove any defense asserted by the defendant as well as prove each element of his own cause of action.” (Aguilar, at p. 853.) “All that the plaintiff need do is to ‘prove[] each element of the cause of action.’ ” (Ibid.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, at p. 850.) “Thus, if a plaintiff who would bear the burden of proof by a preponderance of evidence at trial moves for summary judgment, he must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not—otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.” (Aguilar, at p. 851.)


B. The Master Resolution
The Master Resolution is the originating source of any prevailing wage requirement that applies to CMH’s project. CMH contends that the Master Resolution’s prevailing wage requirements could not apply to CMH’s project because those requirements are contained in the “Procurement Code” chapter and the “Public Works” article of the Master Resolution and are limited to those developers who contract directly with FORA.
The two sections of the Master Resolution which set forth a prevailing wage requirement appear in a chapter entitled “Procurement Code” and, within that chapter, in an article entitled “Public Works Contracts.” The first seven sections in this article concern procedures for bids on public projects. The eighth and ninth sections of this article are the ones concerning prevailing wages.
Section 3.03.090, the eighth section, entitled “Prevailing Wages,” provides: “Not less than the general prevailing rate of wages for work of a similar character in Monterey County as determined by the Director of the Department of Industrial Relations pursuant to the provisions of Division 2, Part 7, Chapter 1 of the California Labor Code shall be paid to all workers employed on construction. This subsection is applicable only to work performed under contract and is not applicable to work carried out by the Authority with its own forces.” It is undisputed that section 3.03.090 does not itself apply to CMH’s project.
The critical section is section 3.03.100, entitled “Developers of Property Pursuant to Agreements with FORA.” It provides: “Any developer or owner of property, including any governmental entity, who enters into an Agreement with FORA for the acquisition, disposition, or development of property at Fort Ord shall pay or cause to be paid to all workers employed in connection with the development of such property an amount not less than the general prevailing rate of pay as established pursuant to Section 3.03.090 of this Master Resolution and shall employ local workers and grant local preferences pursuant to Section 3.03.040 of this Master Resolution. The provisions of this section relating to the payment of prevailing wages pursuant to Section 3.03.090 of this Master Resolution shall apply only to work performed under contract and are not applicable to work carried out by paid, full time employees of the developer or owner of property.”
CMH omits from its opening brief any mention of the rules which govern interpretation of the Master Resolution. In its reply brief, it concedes that the Master Resolution should be interpreted under the rules applicable to statutory construction, and it asserts that its interpretation must prevail because it is “logical” and the Master Resolution is “reasonably susceptible” to such an interpretation.
“We apply well-settled principles of statutory construction. Our task is to discern the Legislature’s intent. The statutory language itself is the most reliable indicator, so we start with the statute’s words, assigning them their usual and ordinary meanings, and construing them in context. If the words themselves are not ambiguous, we presume the Legislature meant what it said, and the statute’s plain meaning governs. On the other hand, if the language allows more than one reasonable construction, we may look to such aids as the legislative history of the measure and maxims of statutory construction. In cases of uncertain meaning, we may also consider the consequences of a particular interpretation, including its impact on public policy.” (Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, 1190.)
“ ‘If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose.’ [Citation.]; ‘a construction making some words surplusage is to be avoided.’ [Citation.] ‘When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.’ [Citations.] Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole.” (Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230.)
CMH’s primary contention is that section 3.03.090 applies only to public works projects because it appears in a chapter entitled “Procurement Code” and within that chapter in an article entitled “Public Works.” “Title or chapter headings are unofficial and do not alter the explicit scope, meaning, or intent of a statute.” (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 602.) “ ‘[T]he title of an act may be relied on in ascertaining the intention of the legislature, where the act itself is ambiguous; but the title “cannot be used for the purpose of restraining or controlling any positive provision of the act.” ’ ” (In re Bandmann (1958) 51 Cal.2d 388, 392, italics added.) We may look at the chapter and article headings only if we first conclude that section 3.03.100 is ambiguous.^[15] CMH’s argument presupposes, rather than establishes, that section 3.03.100 is ambiguous. We conclude, as the superior court did, that section 3.03.100 is not ambiguous.
Section 3.03.100 plainly states: “Any developer or owner of property, including any governmental entity, who enters into an Agreement with FORA for the acquisition, disposition, or development of property at Fort Ord shall pay or cause to be paid to all workers employed in connection with the development of such property an amount not less than the general prevailing rate of pay . . . .” (Italics added.) The trial court found that section 3.03.100 requires any entity, such as MRDA, which acquires land from FORA not only to “pay” the prevailing wage itself but also to “cause to be paid” the prevailing wage “to all workers employed in connection with the development of such property . . . .”
CMH argues that section 3.03.100 applies only to public works contracts. This argument is not based on the text of section 3.03.100, which says nothing about public works contracts, but is based on CMH’s reliance on the chapter and article headings. Since those headings are relevant only if section 3.03.100’s text is ambiguous, this contention does not support CMH’s implicit claim that section 3.03.100 is ambiguous. CMH’s only other claim regarding the text of section 3.03.100 is that it does not apply to an entity such as CMH because CMH has no contract with FORA. However, no one claims that section 3.03.100 itself directly applies to CMH. The plain language of section 3.03.100 required MRDA to “cause to be paid” the prevailing wage. The only possible meaning of the requirement that MRDA must “cause to be paid” the prevailing wage was that MRDA was obligated to ensure that any other entity employing workers in connection with the development of the property acquired by MRDA from FORA must pay the prevailing wage.
CMH offers no alternative construction of the “cause to be paid” language in section 3.03.100 in its opening brief. In its reply brief, the “cause to be paid” language is mentioned only in a footnote. CMH asserts, in its footnote, that this language obligated MRDA, not CMH, and could be enforced only by an action against MRDA. Of course, the question here is whether the Master Resolution required MRDA to require CMH to pay the prevailing wage. The question of whether this obligation was in fact passed on to CMH depends on whether the Implementation Agreement and the deed covenants did so. Our interpretation of the Master Resolution ends with a determination that the Master Resolution obligated MRDA to require CMH to pay the prevailing wage.



TO BE CONTINUED AS PART II….

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