Judge: Mary H. Strobel, Case: 22STCP02545, Date: 2023-03-21 Tentative Ruling
Hon. Mary H. Strobel The clerk for Department 82 may be reached at (213) 893-0530.
Case Number: 22STCP02545 Hearing Date: March 21, 2023 Dept: 82
|
Marvin Brown, v. Los Angeles Department of Water and
Power, |
Judge Mary
Strobel Hearing: March
21, 2023 |
|
22STCP02545 |
Tentative
Decision on Demurrer to Second Amended Petition for Writ of Mandate |
Respondent City of Los
Angeles (“City”), acting by and through the Los Angeles Department of Water and
Power (“LADWP” or “Respondent”) demurs to all causes of action in the second
amended petition for writ of mandate filed by Petitioner Marvin Brown (“Petitioner”).
Judicial Notice
Respondent’s Request for Judicial Notice (“RJN”), Exhibits A-G –
Granted. (Evid. Code § 452(b), (c),
(h).)
Petitioner objects to the request for judicial notice on the grounds that
it constitutes “extrinsic evidence.”
(Oppo. 2.) The objection is
overruled. Exhibits A-G are all subject
to judicial notice pursuant to Evidence Code section 452(b), (c), (h) as
official acts of LADWP, provisions from City’s charter, or facts not reasonably
subject to dispute (including Petitioner’s CPRA request). Grounds
for demurrer may appear on the face of the pleading or from judicially
noticeable matters. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.) While the court does not consider the truth
of any hearsay statements in Exhibits A-G, the court judicially notices the
existence of these records.
Background
The second amended
petition (“SAP”) concerns LADWP’s Request for Proposal No. 90654 for Credit
Risk Consulting Services, which was released on or about October 28, 2021. (See SAP ¶¶ 9-84; RJN Exh. H.) The Maverick Consulting Group, LLC
(“Maverick”) submitted a proposal in response to RFP No. 90654. (SAP ¶ 49; RJN Exh. A-C.) Petitioner alleges that he is the “Principal
Consultant” for Maverick, and he verified the SAP as “Independent Consultant
and managing member of the Maverick Consulting Group, LLC.” (SAP ¶ 28 and Verification at p. 28.)
Petitioner alleges that
LADWP wrongfully recommended to award RFP No. 90654 to non-party Pandora
Consulting Associates, LLC (“Pandora”), in violation of various state, local,
and federal laws. Petitioner filed a protest
of the recommendation, which was denied.
Petitioner’s appeal of the denial of his protest was also denied. (See SAP ¶¶ 4-69, 73-84; RJN Exh. A-C.)
Relevant Procedural History
On July 8, 2022, Petitioner, in pro
per, filed a petition for writ of mandate to compel compliance with the
California Public Records Act and Public Contract Code, and a complaint for
declaratory and injunctive relief. On
July 26, 2022, Petitioner filed a first amended petition for the same causes of
action.
On September 19, 2022, Petitioner
filed a motion for leave to file second amended petition.
On November 17, 2022, after a
hearing attended by counsel for Respondent, the court granted Petitioner’s
motion for leave to amend. The court
held a trial setting conference and set the petition for hearing on August 29,
2023. The court stayed all non-writ
causes of action until the writ cause of action is ruled on by the court.
On December 16, 2022, Respondent
filed and served this demurrer and a meet and confer declaration pursuant to
CCP section 430.41(a). The court finds
the meet and confer to be sufficient.
(See Reusch Decl. ¶¶ 10-13, Exh. I, J.)
Also, contrary to Petitioner’s arguments, failure to raise an issue in
meet and confer is not a basis for the court to overrule the demurrer. (CCP § 430.41(a)(4).)
On January 3, 2023, the court denied
Petitioner’s ex parte application to strike the demurrer. The court advised Petitioner that defaults
are not available as a remedy in petitions for writ of mandate. After Petitioner stated he had not yet received
the demurrer, Respondent’s counsel served Petitioner in open court with the
demurrer.
On February 21, 2023, Petitioner
filed his opposition to the demurrer. On
March 13, 2023, Respondent filed and served the reply.
Legal Standard for Demurrer
A
demurrer tests the sufficiency of a pleading, and the grounds for demurrer must
appear on the face of the pleading or from judicially noticeable matters. (Blank v. Kirwan (1985) 39 Cal.3d 311,
318; Saltarelli & Steponovich v.
Douglas (1995) 40 Cal.App.4th 1, 5.) “A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters.”
(Hahn v. Mirda (2007) 147
Cal.App.4th 740, 747.)
The allegations in the petition must be
liberally construed in favor of Petitioner on demurrer. (Mobil Oil Corp. v Exxon Corp. (1986)
177 Cal.App.3d 942, 947.) A demurrer accepts as true “all material
facts properly pleaded and matters subject to judicial notice, but not
deductions, contentions, or conclusions of law or fact.” (Stonehouse Homes
LLC v. City of Sierra Madre (2008) 167 Cal. App. 4th 531, 538.) “A demurrer must dispose of an entire cause
of action to be sustained.” (Poizner v. Fremont General Corp. (2007)
148 Cal.App.4th 97, 119.)
Analysis
First Cause
of Action – “CCP 1085, Failure to Follow Tender Process, Rule and Procedures”
In the first cause of action,
Petitioner seeks a writ of mandate challenging LADWP’s recommendation to award
RFP No. 90654 to non-party Pandora.
Petitioner alleges that Respondent “refused to publish bid results until
after contract award, in violation of the” California Public Contract Code
(“CPCC”). Petitioner also alleges that
evidence he obtained pursuant to the California Public Records Act shows that
“Pandora’s proposal is ineligible for contract award and should have been
disqualified.” Petitioner alleges that
Respondent’s “recommending a fatally flawed. over-budget proposal for contract
award as alleged is bid rigging, price fixing which constitutes per se illegal
antitrust behavior, justifying the issuance of a writ of mandamus.” Petitioner asserts that Respondent “must be
ordered to follow their own rules and award this contract accordingly.” (SAP ¶¶ 78-84.) In the prayer, Petitioner seeks a writ of
mandate that, among other things, would direct Respondent “to follow their own
rules and comply with the tender process and award the contract to the
responsive bidder with the highest score, or award the contract to the lowest,
responsive, and responsible bidder as required by California Public Contract
Code.” (Prayer ¶ 2.) Earlier in the SAP, Petitioner alleges in
detail the reasons he believes Pandora’s proposal was flawed and should not
have been recommended for approval. (SAP
¶¶ 9-27, 37-69.) Petitioner alleges that
Respondent should have instead recommended the approval of Maverick’s
proposal. (Ibid.)
Petitioner
Lacks Standing to Sue On Behalf of Maverick Consulting Group, LLC
Respondent
contends that Petitioner lacks standing to sue on behalf of Maverick and that,
as a result, Petitioner has not stated a cause of action for writ of
mandate. (Dem. 4-6.) The court agrees.
To
have standing to seek a writ of mandate, a party must be “beneficially interested.” (CCP § 1086.) “A petitioner is beneficially
interested if he or she has some special interest to be served or some
particular right to be preserved or protected over and above the interest held
in common with the public at large.” (Rialto Citizens for Responsible Growth v.
City of Rialto (2012) 208 Cal. App. 4th 899, 913; accord Carsten v.
Psychology Examining Com. (1980) 27 Cal.3d 793, 796-97.) “This standard …
is equivalent to the federal ‘injury in fact’ test, which requires a party to
prove by a preponderance of the evidence that it has suffered ‘an invasion of a
legally protected interest that is '(a) concrete and particularized, and (b)
actual or imminent, not conjectural or hypothetical.'’” (Associated Builders and Contractors, Inc.
v. San Francisco (1999) 21 Cal.4th 352, 361-362.)
Here,
Petitioner plainly seeks a writ of mandate on behalf of Maverick. Maverick submitted a proposal for RFP No.
90654 and was informed that LADWP was going to recommend approval of Pandora’s
proposal instead. Petitioner alleges
that Respondent’s process and recommendation were flawed; that it should have
recommended the approval of Maverick’s proposal instead of Pandora’s proposal;
and that the court should issue a writ directing Respondent to follow its
procedures and “award this contract accordingly.” (See RJN Exh. A-C; SAP ¶¶ 1-84.)
Maverick
is an LLC. Petitioner alleges that he is the “Principal Consultant” for Maverick,
and he verified the SAP as “Independent Consultant and managing member of the
Maverick Consulting Group, LLC.” (SAP ¶
28 and Verification at p. 28.) Whether
Petitioner is a consultant or managing member of Maverick, he does not allege
standing to sue on behalf of an LLC.
“A limited liability company is an entity distinct
from its members.” (Corp. Code §
17701.04(a).) As a separate legal
entity, an LLC must sue on its own behalf.
If it refuses to sue, the member may bring a derivative suit on behalf
of the entity. (See PacLink
Communications Int’l, Inc. v. Superior Court (Yeung) (2001) 90 Cal. App.
4th 958, 964-965.) Here, Petitioner has
not brought a derivative suit on behalf of Maverick. Accordingly, he has not pleaded a basis to
seek a writ of mandate on behalf of Maverick as a member of the LLC.
In his opposition, Petitioner
states that he has standing because he is the “founder, owner, signatory,
managing member and principal of Maverick.”
(Oppo. 9.) Petitioner also
states: “Respondent continues to rig bids, defrauding him of contracts, harming
his business with unlawful trade restraints for eight years…. Respondent’s
records include affidavits which attest to Petitioner’s ownership interest and
designation as a principal and managing member.” (Ibid.)
Not all of these facts are alleged in the petition. In any event, even if Petitioner is suing as
an “owner” of an LLC, he lacks standing to sue individually. Maverick, as the corporate entity, could sue
on its own behalf through counsel. (See Merco Const. Engineers, Inc. v. Mun. Ct. (1978) 21 Cal. 3d 724, 731 [corporate
entity must be represented by legal counsel].
Maverick is not named as the
petitioner, and Petitioner has not alleged that he is suing derivatively on
behalf of Maverick or that the requirements for a derivative suit have been met.
Based on the foregoing,
the demurrer to the first cause of action is sustained because Petitioner has
not alleged standing to sue.
Failure
to Join Indispensable Parties
Respondent
also contends that Maverick and Pandora are indispensable parties. (Dem. 6-8.)
Non-joinder of parties may be raised by demurrer. (CCP § 430.10(d).)
“In
civil litigation generally, the question whether a person must be joined as a
party to a suit is governed by the compulsory joinder statute, section 389 of the Code of Civil Procedure. Subdivision (a) of that
statute states: ‘A person who is subject to service of process and whose
joinder will not deprive the court of jurisdiction over the subject matter of
the action shall be joined as a party in the action if (1) in his absence
complete relief cannot be accorded among those already parties or (2) he claims
an interest relating to the subject of the action and is so situated that the
disposition of the action in his absence may (i) as a practical matter impair
or impede his ability to protect that interest or (ii) leave any of the
persons already parties subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations by reason of his claimed
interest.’ (Code Civ. Proc., § 389, subd. (a).) If such a person (sometimes called a ‘necessary’
party) cannot be joined, subdivision (b) requires the court to consider ‘whether
in equity and good conscience’ the suit can proceed without the absent party,
or whether the suit should instead be dismissed without prejudice, ‘the absent
person being thus regarded as indispensable.’ (Id., subd. (b).).” (Bianka
M. v. Sup.Ct. (2018) 5 Cal.5th 1004, 1016-17.)
Specifically, “[t]he factors to be considered by the court
include: (1) to what extent a judgment rendered in the person's absence might
be prejudicial to him or those already parties; (2) the extent to which, by
protective provisions in the judgment, by the shaping of relief, or other
measures, the prejudice can be lessened or avoided; (3) whether a judgment
rendered in the person's absence will be adequate; (4) whether the plaintiff or
cross-complainant will have an adequate remedy if the action is dismissed for
nonjoinder.” (CCP § 389(b).)
“The subdivision
(b) factors ‘are not arranged in a hierarchical order, and no factor is
determinative or necessarily more important than another.’ [Citation.]” [Citation.]
The trial court’s assessment of indispensability and consideration of these
factors “ ‘involve the balancing of competing interests and must be steeped in
“pragmatic considerations.” ’ [Citation.]” (Citizens
for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5th 1159,
1178-79.)
Here, as discussed,
Petitioner seeks a writ of mandate on behalf of Maverick related to
Respondent’s recommendation of an award for RFP No. 90654. Maverick is therefore an indispensable
party. “The corporation is an
indispensable party to a representative action brought on its behalf; its
rights, not those of the nominal plaintiff, are to be litigated, and the court
has no jurisdiction to adjudicate its rights in its absence as a party.” (Keeler v. Schulte (1957) 47 Cal.2d 801, 803.)
Petitioner also acknowledges in the SAP that
Respondent recommended to award the contract to Pandora. Petitioner seeks a writ that would directly
harm Pandora’s interests in that recommendation and contract award. Thus, Pandora claims an “interest relating to
the subject of the action and is so situated that the disposition of the action
in his absence may (i) as a practical matter impair or impede his ability
to protect that interest.” (§ 389(b).)
As a result, Pandora is an indispensable party.
(See Sierra Club, Inc. v. California Coastal Comm'n (1979) 95
Cal. App. 3d 495, 501 [“Where the plaintiff seeks some type of affirmative
relief which, if granted, would injure or affect the interest of a third person
not joined, that third person is an indispensable party.”].)
Petitioner argues that Maverick is not an
indispensable party because it “stands to benefit from a positive outcome and
can’t be further harmed.” (Oppo.
10.) This argument is not
persuasive. In the first cause of
action, Petitioner seeks relief on behalf of Maverick, which is a separate
legal entity. Accordingly, the court
lacks jurisdiction over such claim if Maverick is not joined. For purposes of joinder, it does not matter
that the writ sought would allegedly benefit Maverick. (See Keeler v.
Schulte (1957) 47 Cal.2d 801, 803; see also Olszewski v. Scripps Health
(2003) 30 Cal. 4th 798, 808-809 [“[a] person is an indispensable party [only]
when the judgment to be rendered necessarily must affect his rights.”].)
As to Pandora, Petitioner contends: “Pandora is not
an indispensable party because no valid contract exists; Pandora has no
enforceable rights. Pandora is ineligible for contract award and Respondent’s
agreement to award Pandora the contract is in violation of their own tender
process, city charter and fails to comply with the statues of fraud.” (Oppo. 10.)
These arguments relate to the merits of Petitioner’s claim, not to
whether Pandora is a necessary and indispensable party. Petitioner seeks affirmative relief that
would directly harm Pandora’s interests.
Accordingly, Pandora is indispensable to this action.
Based on the foregoing, the demurrer to the first
cause of action is sustained for failure to joint indispensable parties.
Respondent’s Remaining Contentions
Respondent contends that the first cause of action
is barred because Respondent has discretionary immunity under Government Code
sections 815.2 and 820.2, and because Petitioner failed to comply with the
Government Claims Act. (Dem. 8-11.) Respondent also argues that “[t]he state’s
Public Contract Code sections pertaining to procurement of goods and services
is not applicable to a charter city under the ‘municipal affairs’ doctrine.” (Oppo. 11-12.)
Because the court sustains the demurrer on other
grounds, the court need not decide these issues. However, for purposes of oral argument and
leave to amend, the court notes that the Respondent does not cite any case law
applying discretionary immunity to a petition for writ of mandate. While discretionary
immunity may bar a damages claim, it would not necessarily bar a petition for
writ of mandate seeking to set aside a public contract award or recommendation as
an abuse of discretion. Indeed, one case
cited by Respondent stands for that proposition. (See Monterey Mechanical Co. v. Sacramento
Regional County Sanitation District (1996) 44 Cal.App.4th 1391, 1413-14.) Also, the Government Claims Act requirements
only apply to a claim for money or damages and not an equitable claim for writ
of mandate or damages entirely incidental to such claim. (See generally Eureka Teacher’s Assn. v.
Board of Education (1988) 202 Cal.App.3d 469, 475.) Finally, Petitioner’s first cause of action
is not based solely on the Public Contract Code. Petitioner also seeks to enforce Respondent’s
“rules, regulations,
procedures.” (SAP ¶ 78.) “A demurrer must dispose of an entire cause
of action to be sustained.” (Poizner v. Fremont General Corp. (2007)
148 Cal.App.4th 97, 119.)
Based
on the foregoing, the demurrer to the first cause of action is sustained.
Second Cause
of Action – Violation of California Public Records Act
In the second cause of action, Petitioner
alleges that Respondent failed to comply with the California Public Records Act
(“CPRA”) in its response to a request made by Petitioner on June 6, 2022. (SAP ¶¶ 80-91.)
Pursuant to the CPRA (Gov. Code § 7921.000, et
seq.)[1],
individual citizens have a right to access government records. In enacting the CPRA, the California
Legislature declared that “access to information concerning the conduct of the
people's business is a fundamental and necessary right of every person in this
state.” (Gov. Code, § 7921.000.) “[E]ach state or local agency, upon a request
for a copy of records that reasonably describes an identifiable record or
records, shall make the records promptly available to any person upon payment
of fees covering direct costs of duplication, or a statutory fee if
applicable.” (Gov. Code § 7922.530.) “Any person may institute
a proceeding for injunctive or declarative relief, or for a writ of mandate, in
any court of competent jurisdiction, to enforce that person's right under this
division to inspect or receive a copy of any public record or class of public
records.” (§ 7923.000; see also §
7923.100.)
Respondent challenges the second cause of action
based on standing, failure to joint indispensable parties, discretionary
immunity, and failure to comply with Government Claims Act. (Dem. 4-11.)
Those arguments are not persuasive.
Petitioner made the CPRA request individually. (RJN Exh. D-F.) He has a beneficial interest in enforcing the
CPRA with respect to that request. To the extent Maverick also made a CPRA request,
Respondent cites no authority that Petitioner needed to join Maverick to
enforce his own rights under the CPRA.
Respondent also cites no authority that discretionary immunity or the
Government Claims Act apply to a petition seeking to enforce the CPRA. Nothing in the CPRA suggests that those
statutes apply to the second cause of action.
Petitioner does not seek monetary damages for the second cause of
action.
Respondent contends that this cause of action is
moot because Petitioner has received the requested records. (Dem. 12-13.)
Respondent raises a factual question that cannot be decided on demurrer. While Petitioner alleges that Respondent
untimely produced certain records, he also appears to allege that Respondent
has not produced all responsive records and may destroy them. (See SAP ¶¶ 88-91.) The CPRA letters, of which Respondent
requests judicial notice, do not establish at the pleading stage that “Petitioner
has received the documents requested.”
(Dem. 13.) Moreover, the CPRA
letters show that Respondent redacted the records. CPRA exemptions must be narrowly construed
and the agency bears the burden of showing that a specific exemption
applies. (Sacramento County Employees’ Retirement System v. Superior Court
(2013) 195 Cal.App.4th 440, 453.) The court
cannot determine at the pleading stage that the redactions complied with the
CPRA. Finally, if Respondent failed to
timely produce the records, declaratory relief may be available stating that
CPRA violated the CPRA. The petition
sufficiently alleges that Respondent did not timely produce the records.
The demurrer to the second cause of action is
overruled.
Third,
Fourth, Fifth, Sixth, and Seventh Causes of Action Are Stayed
Pursuant
to the local rules which designate Department 82 a specialized Writs and
Receivers department and not a general civil department, only a cause of action
for writ of mandate is properly assigned to this department. (LASC Local Rules 2.8(d) and 2.9.)
At
the trial setting conference, the court stayed all non-writ causes of action
until the writ cause of action is ruled on by the court. The third, fourth, fifth, sixth, and seventh
causes of action seek declaratory relief, injunctive relief, and/or
damages. Petitioner does not seek a writ
of mandate in these causes of action. Despite
the court’s stay order, in its demurrer, Respondent has not developed any
argument that the third, fourth, fifth, sixth, and seventh causes of action
should be interpreted as petitions for writ of mandate. .
Based
on the foregoing, the third, fourth, fifth, sixth, and seventh causes of action
are stayed. Accordingly, the court does
not rule on the demurrer to these causes of action.
Leave to Amend
A demurrer may be sustained without leave to amend when there
is no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Courts generally allow at least one time to
amend a complaint after sustaining a demurrer.
(McDonald v. Superior Court
(1986) 180 Cal.App.3d 297, 303.) In
assessing whether leave to amend should be granted, the burden is on the
complainant to show the court that a pleading can be amended successfully. (Goodman
v. Kennedy (1976) 18 Cal.3d 335,
348-349.)
This is the court’s
first ruling on a demurrer to the petition.
Petitioner has some reasonable probability of amending the first cause
of action to state a claim by joining Maverick and Pandora. Accordingly, leave to amend will be granted.
The court notes Maverick
will need to be represented by counsel should it be joined. (Merco
Const. Engineers, Inc. v. Mun. Ct.
(1978) 21 Cal. 3d 724, 731.)
Conclusion
The demurrer to the first cause of
action is sustained with 20 days leave to amend. The demurrer to the second cause of action is
overruled.
The third, fourth, fifth, sixth, and
seventh causes of action are stayed until the court rules on the writ causes of
action. The court does not rule on the
demurrer to these causes of action.