Hidden Glen Partners, LLC v. City of Napa

HIDDEN GLEN PARTNERS, LLC, Plaintiff and Appellant, v. CITY OF NAPA, Defendant and Respondent.

A143542

A144537

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION ONE

December 13, 2016

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Napa County Super. Ct. No. 26-55542)

The City of Napa (City) repeatedly assured residential developer Hidden Glen Partners, LLC (Hidden Glen or HGP) it would build a neighborhood park on property that was once a landfill. More than 10 years later, there is no park. There is, instead, a morass of litigation which, to date, has cost many times more than the cost of the promised park.

For years, the parties have disputed whether Hidden Glen timely filed an administrative claim with the City (Gov. Code, §900 et seq.) and whether the City's conduct lulled Hidden Glen into delaying presentation of its claim such that the City is equitably stopped from raising the one-year claims filing period (id., § 911.2) as a defense. Eventually, the trial court bifurcated and tried first the issue of whether the City is equitably estopped from asserting the claims filing period. After rendering a tentative decision that the City was estopped through March 2009—a victory for Hidden Glen—the court, in its final statement of decision, ruled the City was estopped only through April 2008. The City then moved for judgment on the pleadings on the ground the court's equitable estoppel findings conclusively establish Hidden Glen's breach of contract claims are barred for failure to timely present a claim. The court granted the motion. Hidden Glen contends the court erred and, at the very least, should have granted leave to amend.

As we discuss, this case has had an unusual and prolonged procedural history. We conclude the trial court erred, in part, in granting judgment on the pleadings and remand for further proceedings. We also reverse the associated fee and cost rulings, and additionally reverse the judgment as to the sixth and seventh causes of action and direct that they be dismissed without prejudice.

BACKGROUND

This is our second look at this case. In a previous writ proceeding, we described the origins of the dispute. (Hidden Glen Partners, LLC v. Superior Court of Napa County (Dec. 19, 2012, A135029) [nonpub. opn.] (Hidden Glen).) "In May, 2001, a settlement agreement was executed regarding the closure of the Hidden Glen Landfill in Napa. In exchange for dismissal of the lawsuit filed against Napa and others, Napa agreed to 'assume responsibility for the closure of the Landfill, pursuant to [a] Closure Plan . . . .' " (Id.)

Under that closure plan, the landfill would be capped with various composites and soils. Then, " '[t]he cap will be covered with a playing field turf which will be irrigated. A 20-foot buffer will be maintained around the perimeter of the landfill. The landfill area will be maintained as a dedicated open space within the residential development for recreational use.' " (Hidden Glen, supra, A135029.) The closure plan estimated the total cost " 'for completing the cap installation . . . is $400,000 to $450,000, plus or minus 15%,' " and the cost " 'for installing irrigation and the turf field is $50,000 to $70,000, plus or minus 15%,' " assuming nearby power and water. (Id.)

When closure was incomplete eight months after execution of the settlement agreement, the parties entered into a "Subdivision Improvement Agreement" (SIA), which, among other things, extended the parties' performance obligations for at least two years and obligated Hidden Glen to install water and power hookups for the park.(Hidden Glen, supra, A135029.) (We refer to the settlement agreement, the closure plan and the SIA as the "park-related agreements.")

Hidden Glen installed the water and power hookups in 2005, but no park has been built.

The Lawsuit and Initial Pleadings

After years of discussions with the City, Hidden Glen, in January 2010, presented a claim to the City demanding several million dollars in contract-specified and other damages related to impeded marketing of the residential parcels. The claim asserted, among other things that: "In breach of and contrary to its obligations under the 2001 Settlement Agreement, the SIA and the approved Closure Plan, the City has never installed the required irrigated playing field turf on the City Property. The site has yet to be opened as a public park. As a result of the City's breaches and failure to live up to its contractual obligations as set forth herein, and even though the City has repeatedly promised HGP that it would do so, eight years later the City Property remains an unsightly, unirrigated weed patch in the middle of the Hidden Glen Subdivision, fenced off by a cyclone fence . . . . [¶] . . . Only recently, the City has rejected HGP's demands to complete the park and has improperly taken the position that it has no obligation to install the required sod turf, or to complete the construction of the public park contemplated by the 2001 Settlement Agreement, the approved Closure Plan and the SIA."

Its claim rejected, Hidden Glen proceeded with a lawsuit in superior court.

The City demurred on several grounds, including that Hidden Glen's first, second and third causes of action—all alleging breach of the City's obligations under the park-related agreements—are barred for failure to timely present a claim.¹

In opposition, Hidden Glen asserted the "City's duty to install the irrigated turf playing field and public park on the Landfill Property is a continuing one, which it continues to breach to the present day." It further asserted, given the penalty clause in the settlement agreement, that "the City's liability continues to accrue for each day that the City fails to install the playing field turf for the public park in accordance with the approved Closure Plan."

Hidden Glen also filed a first amended complaint, which included the three causes of action pertinent to the park—for breach of contract, specific performance, and declaratory relief—and mooted the City's demurrer. Hidden Glen alleged, among other things, that the "City has breached and continues to breach the 2001 Settlement Agreement and the SIA by, among other things, repeatedly promising to install an irrigated playing field turf or otherwise complete the construction of the public park which was contemplated and required under" the terms of the park-related agreements. It also alleged the settlement agreement included a $1,000 per day penalty/liquidated damages provision if the remedial work in the closure plan was not completed eight months from execution of the settlement agreement and that the "remedial work included the installation of the irrigated playing field turf which the City has failed to install."

The City again demurred, again raising the one-year claims filing period. Hidden Glen reiterated its opposition based on its continuing breach theory.

The trial court sustained the City's demurrer with leave to amend. The court agreed with the City "that as currently pled the [contract] claims are barred." "As is clear from the complaint's allegations," stated the court, "the alleged breach occurred in February 2002 [i.e., eight months after execution of the settlement agreement], rendering the January 2010 complaint long time barred." The court rejected Hidden Glen's "continuing breach" theory (which was based on the fact the contract contained a liquidated damages clause), stating no authority supported it. Because Hidden Glen claimed it could allege facts supporting equitable estoppel to assert the limitations period, the court granted leave to amend. The court "question[ed]," however, "whether the estoppel theory w[ould] withstand scrutiny since it [was] apparently based upon theCity's conduct in 2007, after the [period of] limitations would have already run" (i.e., having commenced running, according to the court, in 2002, eight months after execution of the settlement agreement).

Hidden Glen filed its second amended complaint (the operative complaint)² in May 2010, alleging the "City has breached and continues to breach the 2001 Settlement Agreement and the SIA by, among other things, failing to install an irrigated playing field turf or otherwise complete the construction of the public park which was contemplated and required under" the terms of the park-related agreements. As for the $1,000 per day liquidated damages provision, Hidden Glen alleged it was operative eight months after the settlement agreement was executed until completion of the park.

Hidden Glen emphasized the SIA, which allegedly extended the parties' obligations such that Hidden Glen would install the utility hookups and the City would then be obligated to install the turf and build the park. The hookups were completed in February 2006. Hidden Glen further alleged that from January 2002 to as late as March 2009, the City repeatedly promised, assured and made representations to Hidden Glen that the City was going to perform its contractual obligations and complete the park to induce Hidden Glen not to sue the City for breach of contract. Hidden Glen fleshed out this allegation with a number of specific allegations of promises and assurances by the City. It then alleged "[t]he first time the City informed [Hidden Glen] that it would not move forward with installing the irrigated playing field turf and completing the park improvements was on March 5, 2009"—the date of an e-mail from the City to Hidden Glen, wherein the City allegedly "disavowed . . . previous assurances" to "install turf and cap the playing field turf or complete the park."

The City demurred once again, claiming Hidden Glen had not...