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Home My WebLink About1997-01-16 Packet° Wed, January 15, 1997 BROWN ACT I. BROWN ACT II. PUBLIC RECORDS ACT III. VOTING PROCEDURE A. Quasi-judicial vs. quasi-legislative decisions B. City resolution IV. CONFLICT OF INTEREST A. Fair Political Practices Act 1. May have a reasonably forseeable and material affect on a financial interest, 2. different from its affect on the public generally B. Community Redevelopment Law 1. Councilmember cannot acquire an interest in real property (other than property used as a principal residence) within the redevelopment area; and 2. Must disclose interests they owned prior to assuming position and refrain from participating in certain decisions that could affect the property C. Government Code Section 1090 1. Prohibits council from making contract with business entity in which any individual councilmember has a financial interest D. Reporting requirements V. GIFTS VI. LIABILITY VII. CEQA A. Applies to every City decision involving discretionary "project." 1. Any private use of property requiring City approval that involves the exercise of discretion and judgment is a discretionary "project." a) General plan amendments b) Zoning changes c) Use permits, variances, site development permits, subdivision maps 2. Any activity undertaken directly by the City which could alter the environment, such as a construction project, the lease of public property, etc. B. Establishes three tiered review: 1. statutory or categorically exempt projects. 2. projects subject to initial study and a negative declaration (projects that will not have a significant, adverse impact on environment). 3. projects requiring environmental inmpact report (EIR) - 1 - BROWN ACT mw.Th..e New Brown Act. Open Meetings ~or Open Government The New Brown Act Overview · Who Is Covered? · Meetings · Notfce~ Location & Agenda Closed Sessions · Eh, lo,cement & · WtYat Do ! Need to Know'/ amnmw.n_ Act Policy A Sunshine Law · 1ho people of Ms S'tat~ do ne1 ytdd ~elr sovtrclfJity te ~e agende; wtdch aewe them. lheJr I~J:~.lc yu'v'~.n~ Ihs rigid Il decide what good lor tbs people tn know afld what i8 not good f~ lhcm as I~ow, The pt,)pie Ifldft o~ ITmalalq b'Jl~r~ed el Bla~ ~ley may reCaJfl I~Who is Covered? ~What. is a "Standing Committee'? · Aa advlaory body ~ eL'the4': · A met'Un; schedule flied ~ fermal acUon · M hoc or SL~lrlg? * Single VL IllullSplo Purposel * 'TemlJo~ry VL I~rpeba! · ?ask-e~m~ted v~. Reg~tar Part of Govemmm. l ~gMeetings Face-tm. Face · A ma{odty plhedag In I~e some limb and IdaOo Io hear, dl~*,un ur dntfb~te uIMn Iftllh~ gdt It MlhlU 'tlJe m~eet matter Jmri~tct~e M lb lOlJdalJve body er diV. c~mmt~,lcatlefl: ~ tntermedlarlee, er lechnologlcal dtrdces to dc'~Lnp cdleclke ~Me~ing Exemptions A~[cncrarx;e of a nmJodty at: · Public 'gmorml InMrmK" conferences amd · 'Open md I:mbflcJzed" commtmlt~ meelJngs Bo! org:mized by ~e ~ * h~ ~ ar c~onfal ~Agendas & Location Summa~ · Iio Out-eF-Town MeMfngs Ui~eu .... · 20 Word Agr..qda Dflcflptlett Gaidolfne · 'S~l~ Hart)e~' tm' CJeted Settbn 'l'iUos · Afldlng Agenda Items · #m4ge~ffzed #fid Responm are O~ · C~.m..p!rance with Law or C,m~ Mdcr * H ~ MccUng F~]~ In ~e ~ . ~e~ngj ~ S~ or ~e~ O~als i20 Word Agenda Description · A0enems Mum Kak'e · '"lrlef Gm3erai · 20 Words la · Gu;delrue, Not o FIfT1~ Rule wldi me escept:fon · Kced to Take Immediate ~ omi ·Nccd br A~tJon Came ks the City's AflenlJm' Attar Jtgen~f3 IkasUng · lk Iddllkru to ~pedal Mcclbge ~FJ n. ~2 'iTf~R . . o. . Ag.nd_.. Brief. Responses are OK · Pending Litigation · Real Estate · Ucense Applcatlon$ · Pubnc Security · JPA LbMIRy CLaims ~Closed Session To ~Ciosed Session Agendas · Multiple Sources of Clo~,d Session Ageinda Desenpuon Rules · 20 Word ~riptioA · ~tc Hnr~r · ~a] ~te ~d Nego~ator~ · Ct~ Names ~?;e-Closed Session Announcements ~"Pending LRigation' Defined · What Is **Pembg UlJga'thm~ * LftfgatJuu has l)~m Jonually ~ 'O(;tsllag ~ mmd cb'cumst~nc4~" - The session Im unll to deride wh4stber 1here tm slgnlfl~nt exT)emtru tm Hllgmi%on 1o mulhoflze a clewed session - The ieGlstatlve body ITM tlccldcl~ m' Is ~ ~_, b !'.., c Testimony JurlsdicUen OI kbe agenw · Ma/adopt _~m~,m-_~km time flmlfa & nltm~ · Name & Addrr_Ta almuld be ~Oll~tar~ · Cannot to4'old criticism ~Public Records from Meetings · Jigendam and an], oma, writings · Bddl~led k) · malodty · Mud be made mra1~Me w~iJt dd~ · (:h~ll~g~s ti rulee Itel 'penall:re tiieceural/e fi~e $x~ifesa~un IJ~ & likgJla~d" · latefll to 'd~rlve the Imuldle of Inform=lion w~ick ~e rr~mbe, Imows ar hal reason to know t~¢ pul)ftc fl ~d ~ Wela~nrl Law Offices Of RAPPORT AND MARSTON An Association of Sole Practitioners David J. Rapport Lester J. Marston 200 W. Henry Street P.O. Box 488 Ukiah, California 95482 (707) 462-6846 FAX 462-4235 .,MEMORANDUM TO: Candace Horsley, City Manager FROM: David J. Rapport, City Attorney DATE: January 15, 1997 SUBJECT: City Council Reports and the Ralph M. Brown Act Our File No. U-1.3 I have been asked whether the City Council can discuss items presented by City Council members during the agenda item: "City Council Reports." Government Code §54954.2(a), which generally addresses agenda requirements under the Brown Act, provides, in part as follows: No action or discussion shall be undertaken on any item not appearing on the posted agenda, except that members of a legislative body or its staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights * * · . In addition, on their own initiative or in response to quesitons posed by the public, a member of the legislative body or its staff may ask a question for clairifcation, make a brief announcement, or make a brief report on his or her own acitivties. Furthermore, a member of a legislative body or the body itself, subject to rules or procedures of the legislative body, may provide a reference to staff or other resources for factual information, request staff to report back to the body at a subsequent meeting concerning any matter or take action to direct staff to place a matter of business on a future agenda. (Emphasis added.) s:\u\memos96\horsley.brn January 15, 1997 Memorandum to Candace Horsley, City Manager January 15, 1997 Subject: City Council Reports and the Ralph M. Brown Act Page 2 The April 1994 amendments to the Brown Act changed portions of this paragraph. However, it did not change the "no action or discussion" language, which has remained in the statute for quite some time. Under this subsection, City Council Members or staff may ask questions for clarification, make a brief announcement, or make a brief report on their own activities. In addition, members of the City Council or the City Council as a body may "provide a reference to staff or other resources for factual information," request staff to report back to the body at a subsequent meeting, or take action to direct staff to place a matter of business on a future agenda. By prohibiting any discussion other than those items specifically mentioned in the subsection, the Brown Act intends to strictly limit the amount of discussion that occurs in response to City Council reports. The reports themselves are clearly authorized by the section. Reports can be made by both the City Council and the City Manager. Other Council members can ask those who make the reports a question for clarification, brief announcements concerning the subject of the report and may refer matters brought up during the reports to staff or other sources for factual information. Council members can request matters that are the subject of a report be brought be back at a subsequent meeting or they can ask staff to report back on a matter on which a Council member reports. Other discussions, however, are prohibited. I hope this clarifies the matter of Council reports and discussions of those reports. If you have any other further questions, please feel free to contact me. DJR:can s:\u\memos96\horsley.brn January 15, 1997 VOTING PROCEDURE TO' FROM: DATE: RE: MEMORANDUM · Michael F. Harri:~ David J. Rapport December 14, 199 Conduct of Planning Commissioners in Conducting Quasi-Judicial Hearings "A Practical Primer for Planning Commissioners, a 1980 pub- lication from the Intergovernmental Training and Development Center, sets forth the legal parameters of conduct for planning commissioners when acting in a quasi-judicial capacity: PROCEDURAL CONSIDERATIONS Two Roles Keep in mind the distinction between quasi-judicial and quasi-legislative actions of the commission. Quasi-judicial ac- tions are those wherein the planning commission makes a decision based upon the particular facts of a given situation. Quasi- legislative decisions are those in which the planning commission considers rules of general applicability. A common, but not al- ways accurate distinction, is that permit actions are quasi- judicial, while rule-making actions are quasi-legislative. Quasi-Judicial In quasi-judicial actions planning commissioners are sitting as judges and constitutional due process is required. Although all of the due process requirements applicable in court do not apply (right of cross-examination, etc.) the courts have held that such quasi-judicial type hearings must be fundamentally fair. This means that the applicant must have a reasonable op- portunity to present his case and to rebut the evidence against him, the opponents and other interested parties must have a reasonable opportunity to present their case, and all interested parties must receive reasonable notice prior to the hearing. Ad- ditionally, planning commissioners should not receive evidence outside of the public hearing in quasi-judicial matters. This means contacts with applicants and opponents should be avoided outside of the hearing, including phone conferences, letters, etc. Sometimes these contacts cannot be avoided. If evidence is received outside of the hearing the planning commissioner should disclose at the hearing the nature of the contact and the evidence received so that all parties are aware of it and have a chance to rebut it. MEMO TO: Michael F. Harris, December 14, 1990, ~jge 3 3. site viewing the property as part of the hearina If at all possible, it is recommended that the Commission site view the property as a whole Commission at a time certain with the public invited to attend. This would be a regularly agendaed meeting to comply with the Brown Act. If it is impossible or impractical for the entire Commis- sion, or a quorum thereof, to site view the property at the same time, there are two alternatives: 1) To establish dates certain for individual commissioners to site view the property provided that members of the public are also invited to attend each such site view; or' 2) Adopt a rule similar to the City Council's, re- quiring every Commissioner to visit the site in each case without discussing the application outside the public hearing. These in- dividual site visits should be disclosed at the time of the for- mal hearings. Attached to this letter please find a letter from the California Attorney General explaining why following these guidelines is important to avoid violating due process require- ments that apply in quasi-judicial hearings and Brown Act re- quirements that apply to all Planning Commission meetings. Planning Commissioners should also keep in mind that 42 U.S.C. §1983 provides applicants for permits involving due process rights a cause of action in federal court against those public officials who violate those rights and a right to recover damages and their attorneys' fees from the officials, if they win. (42 U.S.C. §1988.) Although in most instances the City would defend and indemnify its officials against such claims, if a public official knowingly and willfully violated clearly estab- lished legal standards, the City might have grounds to refuse such defense or indemnity. (See Government Code §§825, 995). I hope this information is helpful in advising Planning Com- missioners regarding their proper conduct in conducting quasi- judicial hearings. RESOLUTION NO. 95- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH ESTABLISHING PROCEDURE FOR FILLING VACANCIES ON CITY COMMISSIONS AND BOARDS. WHEREAS, 1. Ukiah City Code §1151 provides that members of the Planning Commission shall be appointed in accordance with a procedure established by resolution of the City Council; and 2. The City Council has not adopted a procedure for filling vacancies on the City's boards and commissions including the Planning Commission; and ' 3. The City Council has determined that using a uniform procedure will insure fair and consistent treatment of candidates and councilmembers; NOW, THEREFORE, BE IT RESOLVED that the City Council hereby adopts the following procedure for filling vacancies on the City's commissions and boards, including the Planning Commission. PROCEDURE FOR FILLING VACANCIES ON COMMISSIONS AND BOARDS The City Council shall fill vacancies on City boards and commissions, using the following procedure. 1. Applicant pool. The City Council shall develop an available pool of candidates for a vacancy by advertising the vacancy at least once in a newspaper of general circulation in Ukiah not less than thirty (30) days prior to the council meeting at which the vacancy is to be filled. The advertisement shall specify a deadline for submitting applications. All completed applications received prior to the deadline shall be included in the pool of available applicants, provided the applicant: a. meets the minimum qualifications for the position as established in the applicable Ukiah City Code section or resolution, establishing the commission or board; and b. participates in a personal interview, if the City Council conducts personal interviews for the position. Applications included in an available pool may be used as a source of nominations for a period of one (1) year from the application deadline. s:\u\resos95\vacancy.pro January 12, 1997 I 2. Nominations. Each councilmember, including the Mayor, shall have the right to nominate a candidate from the available pool of candidates. a. The right to place a name before the City Council for consideration shall rotate among the councilmembers based on seniority with the most senior councilmember going first. made. b. The Council shall vote on each nomination as it is c. A councilmember's right to make a nomination shall terminate and the right to nominate candidates shall rotate to the next most senior councilmember, when a councilmember's nomination is approved by a majority vote of the councilmembers present or the councilmember agrees to pass the nomination to the next most senior councilmember, whichever occurs first. d. This process for rotating the right to nominate candidates among councilmembers to fill vacancies shall be followed for each separate commission or board. (1) The City Clerk shall maintain a record of the last councilmember to make a nomination for each commission or board. (2) When another vacancy must be filled on that commission or board, the next councilmember in line to make nominations for that commission or board shall make the first nomination to fill the vacancy. PASSED AND ADOPTED this following roll call vote: th day of , 1995, by the AYES: NOES: ABSTAIN: ABSENT: ATTEST: Fred Schneiter, Mayor Cathy McKay, City Clerk s:\u\resos95\vacancy.pro January 12, 1997 CONFLICT OF INTEREST David J. Rapport Lester J. Marston Scott Johnson Law Offices Of RAPPORT AND MARSTON An Association of Sole Practitioners 200 W. Henry Street P.O. Box 488 Ukiah, California 95482 (707) 462-6846 FAX 462.-4235 MEMORANDUM TO: City Council FROM: David J. Rapport, City Attorney DATE: November 6, 1996 SUBJECT: Reporting requirements The purpose of this memorandum is to explain the obl~ations of City Councilmembers to report financial interests. City Councilmembers must report financial interests as follows: 1. Under Health and Safety Code section 33130 newly appointe8 city coun¢i!mem~ers must report all leases and ownership interests in real property located within the redevelopment area to the city council and the redevelopment agency. The disclosures must be entered in the minutes of both the city council and the redevelopment agency. 2. City Councilmembers are prohibited from acquiring any interest in real property located within the redevelopment area, while they are on the city council, except a councilmember may: a. acquire an interest in real property to replace a substantially similar property used in the councilmember's business which the councilmember owned for at least three years immediately prior to his or her appointment to the commission; b. lease property for use in his or her principal business as long as the property cannot be subleased for a greater rent than is charged in the master lease; and c. purchase or lease property for a personal residence (Health and Safety Code section 33130.5.) 3. Any councilmember acquiring property under exception 2b. or 2c. must make an immediate written disclosure of the acquired interest to the redevelopment agency and the city council. s:\u\memos96\council.rpt January 12, 1997 Memorandum to City Council Subject: Reporting requirements January 12, 1997 4. Under the City's local Conflict of Interest Code City Councilmembers upon assuming office and each year thereafter while on the councilmember must disclose all of their sources of income, interests in real property, investments and business interests within the City in accordance with the instructions accompanying form. When making disclosure of ownership interests in real property, a Councilmember should disclose the address of the property, a description of the ownership interest and the use to which the property is being put. The following are examples of an adequate description of an ownership interest: sole owner in fee, co-owner (1/2 interest), general partnership (1/4 interest), general partner in limited partnership (1/10 interest), limited partner (1/10 interest), trust beneficiary (1/2 interest) leasehold (sole lessee). ' The following are examples of adequate descriptions of property use: used as primary location of Councilmember's principal business, commercial rental property, residential rental property, Councilmember's principal residence, undeveloped land held for investment or development. If you have further questions about disclosure requirements, please feel free to contact me. CC: Candace Horsley, City Manager S:\u\memos96\council.rpt January 12. 1997 ,.ISSUE SPOTrER CI~CIC[JST LAW Financial Conflicts of Interests Political Reform Act Gov. Code, § 87100 et seq. .GUIDEPOSTS Is a state or local official participating in a government decision? Does the decision affect an interest in real property or an investment of $1,000 or more held by the official? Or a source of income or gifts to the official of $250 or more? If so, is there a reasonable poss~ility that the decision will significantly affect the interests involved? Financial Interest in Contracts Gov. Code, § 1090 et seq. Are the official's interests affected differently than those of the general public or a significant se~ent of the public? If the answer to these questions is yes, the official may have a conflict of interests and be required to disqualify himself or herself from an participation in that decision. (See ch. I.) Does a member of a board have a direct or indirect financial interest in a contract being made either by the board or by any agency under the board's jurisdiction? If so, the contract may be void and any private ga/n, recehted by the official under the contract, may have to be returned. (See ch. VII.) Has any other state or local officer or employee participated in the making of a contract in which the official had a direct or indirect financial interest? If so, the contract may be void and any private gain received by the official under .L/mitations on State Contracts Pub. Con. Code, § 10410 Conflict of Interests Produced bv Campaign Contributions Gov. Code, § 84308 the contract may have to be returned. (See ch. VII.) Is a state official (other than a part-time board member) involved in an activity, employment or enterprise, some portion of which is funded by a state contract? Is a state official, while employed by the state, contracting with any state agency to provide goods or services? ff the answers to any of these questions are yes, a proMbited activity may have occurred. (See ch. VIII.) IS there a proceeding involving a license, permit or entitlement for use? IS the proceeding being conducted by a board or commission? Were the board members appointed to office? _Le~slative Ethics Gov. Code, § 8920 et seq. Has any board member received contn'butions of more than $250 or more during the proceeding or within the previous 12 months from the applicant or any other person who would be affected by the decision? If the answers to these questions are yes, the board member may have to disqualify himself or herself from participating in the decision. (See ch. III.) Is a high maaking state official, state legislator, state legislative staff member or judge engaged in an activity or enterprise which is in conflict with his or her official duties? If so, a prohibited activity may have occurred. (See ch. VI.) Appearance of Financial Conflict of Interests Common Law Public Reporting of Financial Interests Political Reform Act; Gov. Code, §§ 87200-87313 Incompatible Activities Gov. Code, § 1125 et seq. (local officials); Gov. Code, § 19990 (state officials) _Incompatible Offices Common Law Court-made law, based on avoiding actual impropriety ar the appearance of impropriety in the conduct of government affairs, may require government officials to disqualify themselves from participating in decisions ia which there is an appearance of a financial conflict of interest. (See ch. Xlrl.) Is the offi~ a state or local officer or employer who participates in the making of government decisions? If so, the official may be required to file a public report disclosing investments, real property, income and gi~. (See ch. H.) Is an official using hi~ or her government position or using government information or property in an improper manner? Has the official's agency or appointing authority adopted an incompau'ble activities statement? If the activity has been prohibited by an incompatible activity statement, the official can be ordered to stop the practice and poss~ly be disciplined. (See ch. X regarding local officials and eE XI regarding state officials.) Does a single official hold two offices simultaneously? (For purposes of this common law doctrine, an employment is not considered to be an office.) Do the offices overlap in jurisdiction, such that the official's loyalty would be divided between the two offices? If the answers to these questions are yes, the holding of the two offices may be incompatible and the first assumed office xiiie Transportation: Gifts or Discounts Cal. Corot., an. XII, § 7 Retired State Officials and Their Former A~encies Political Reform Act; Gov. Code, § 87400 et seq. Retired State Officials and Their Contracts Pub. Con. Code, § 10411 may have been forfeited by operation of law. (See ch. XII.) Is a state or local official, other than an employee, receiving a gift or discount in the price of transportation from a transportation company? (The protn'bition covers inter or intrastate transportation in connection with either government or personal business.) ff the answer to this question is yes, the officer may have forfeited his or her office. (See ch. IX.) Ls a former state administrative official being compensated, by other than the State of California, to appear before any court or state administrative agency, in a judicial or quasi-judicial proceeding? ff so, did the official wkile in office participate personally and substantially in the proceeding? ff so, the official may be protn'bited from appearing in the proceeding. (See ch. IV.) IS a former state official, within one year of his/her retirement from state service, contracting with the former agency to provide goods and services? If the answer to this question is yes, a proba'bited activity may have occurred. (See ch. VIII.) David J. Rapport Lester J. Marston Scott Johnson Law Offices Of RAPPORT AND MARSTON An Association of Sole Practitioners 200 W. Henry Street P.O. Box 488 Ukiah, California 95482 (707) 462-6846 FAX 462-4235 MEMORANDUM TO: City Council FROM: David J. Rapport DATE: January 12, 1997 SUBJECT: Valuation guidelines under FPPA The planning staff has asked me to provide the Planning Commission with monetary guidelines it can use when Commissioners have a conflict of interest question. In order to use the attached flow chart the Commission should understand the following: 1. Only the Fair Political Practices Act (FPPA) uses monetary guidelines. A Planning Commissioner could also have a conflict of interest under common law1, Mealth and Safety Code section 331302, or Government Code section 10903. The attached 1Independently of any statute court decisions have recognized that public officials can have a conflict of interest whenever their private interests may be affected by a decision they must participate in making as part of their official duties. (See Noble v. City of Palo Alto (1928) 898 Cal. App. 47,41. In addition, courts have recognized a prohibition against a public official holding more than one public office, if those positions are inherently incompatible. (See ?eople ex rel. Chapman v. RaDsey (1940) 16 Cal. 2d 636, 641-642. For two offices to conflict there must be a potential conflict or overlap in the functions or responsibilities of the two offices. In the ~ case the court found the positions of municipal court judge and city attorney to be incompatible. 2This section creates a special disqualification and/or disclosure obligation on city council and planning commission members who own or acquire property in a redevelopment area. (See 9/24/91 memo from me re: Conflicts for Appointees to s:\u\memos97\conflic=.val January 12, 1997 Memorandum to Council SUbject: Valuation ~Uidelines January 12, 1997 flow chart does not apply to conflicts under these other laws. 2. The FPPA generally prohibits a public official from making, participating in or attempting to influence a decision which he or she is empowered to make or participate in making, where it is reasonably foreseeable that the decision could materially affect a financial interest of the official. (Government Code sections 87100, 87103.) The monetary tests discussed in the attached flow chart have been developed in regulations adopted by the Fair Political Practices Commission (FPPC) to aid officials in determining when it is reasonably foreseeable that the decision will have a material financial effect on an official,s economic interests. (See generally 2 Cal. Admin. Code sections 18702 et seq.) However, in addition to the question of materiality, a public official must also answer the following questions whenever he or she is faced with a conflict of interest question: a. Does the official have a statutorily defined economic interest that could be affected by the decision? b. Is the official making, participating in making or using his or her official position to influence the making of a decision? c. Will the effect of the decision on the public official's economic interests be distinguishable from its effect on the public generally? In using the attached chart Planning Commissioners should keep in mind that they must evaluate the impact of the decision on an their: a. Business investment.s (direct or indirect of $1,000 Planning Commission Under Community Redevelopment Laws.) 3This section provides in pertinent part that: · . . city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members .... s:\u\memos97\conflict.val January 12, 1997 Memorandum to Council Subject: Valuation guidelines January 12, 1997 or more); b. Interests in real property (owned by the official, his or her spouse or any dependent children, where the interest is worth $1,000 or more, including direct or indirect equity interests, options, leases, mortgages or deeds of trust); c. Sources of income and gifts (equal to $250 or more in the preceding 12 month period, except for commercial loans in the ordinary course of business); or d. business entities in which the official is an officer, director, employee or in which he or she holds a management position, regardless of whether the official has an investment in the business or receives any income from the business. This memorandum and the attached chart are provided as guidance. If a Commissioner has a conflict of interest question, he or she can discuss that question with me or the FPPC by calling 916-322-5901. I can also assist a Commissioner in requesting a hold harmless opinion from the FPPC. $:\u\memos97\conflic~.val January 12, 1997 ~e i: TO: FROM: SUBJECT: MEMORANDUM COUNCILMAN FRED SCHNEITER DAVID J. RAPPORT, CITY ATTORNEY FINANCIAL INTEREST IN REDWOOD OIL COMPANY CONTRACT Councilman Fred Schneiter works two days each month providing bookkeeping services for the Beacon Station located at 1099 South State Street. The station is leased to Andi and Don Akin, Peter Van Alyea and Robert I. Barbieri. Any one of the four lessees has the option to purchase the station. These same four own all of the improvements at that location, including the small shopping center located next to the Beacon Station on Talmage Road. Apparently, these four comprise a partnership that owns the property and improvements, operates the gas station and receives rental income from the other businesses in the shopping center. Robert I. Barbieri also owns a controlling interest in Redwood Oil Company. Redwood Oil Company provides payroll and bookkeeping services for the Beacon Station and issues the checks to all employees of the station, including Councilman Schneiter. Redwood Oil Company owns a bulk plant located on Lake Men- docino Drive and sells petroleum products in bulk. It has sub- mitted the low bid of approximately $67,000 on a City of Ukiah solicitation for bids to supply various petroleum products to the City in bulk. Bids to purchase supplies in excess of $25,000 must be approved by the City Council. The question presented is whether the City Council can make a contract with Redwood Oil Company under these circumstances. CONCLUSION The City Council is prohibited by Government Code section 1090 from approving the contract with Redwood Oil Company. If the Council were to approve the contract, the contract could be set aside and Redwood Oil could be required to return all funds received from the City under the contract and the City would be entitled to keep all products sold to it. In addition, Councilman Schneiter could be charged with a misdemeanor and loose all right permanently to hold any public office in the State of California. ANALYSIS Government Code section 1090~ provides in pertinent part that: · . . city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members .... Section 1092 provides that any contract made in violation of section 1090 may be avoided. (See Thomas v. Call (1985) 38 Cal. 3d 633, 650-652 [councilmember interested in sale of land to city required to return purchase price while city allowed to keep land] . ) ' Section 1091 allows such contracts, where the councilmember has only a remote interest, provided the existence of the interest is disclosed to the city council and the city council approves the contract by a sufficient vote not counting the interested councilmember. A number of remote interests are described in section 1091, but none of them apply to councilman Schneiter's circumstances. The question becomes: What does "financially interested,, mean in section 10907 In .People v. Watson (1971) 15 Cal. App. 3d 28, 37, the court upheld the following jury instruction in the criminal prosecution of a county purchasing agent: The word "financially interested,, as used in Government Code section 1090 means any financial interest which might interfere with a city officer's unqualified devotion to his public duty. The interest may be direct or indirect and includes monetary or proprietary benefits, or gain of any sort, or the contingent possibility of monetary or proprietary benefits. The interest is direct when the city officer, in his official capacity, does bus- iness with himself in his private capacity. Th__~e interest is indirect when when the city officer, or the board of which he is a member, enters into a contract in his or its official capacity with an individual or business firm, which individual or business fi~m, by reason of the city offic~r'~ relationship to the individual or business fii~, at the time the contract is entered into, is in a position to render actual or potential pecuniary benefits directly or indirectly to the city office~ based on the contract the individual business firn', ~All references to the Government Code unless otherwise indi- cated. has received. (Emphasis added.) As explained in San Dieqo v. McKinley (1978) 80 Cal App. 3d 204, 213, the policy behind section 1090" . . . is not intended to strike only at fraud or dishonesty and it's conceded none exists in the present case; the object of the enactment is to remove or limit the possibility of any personal influence either directly or indirectly which might bear on an official's decision as well as to void contracts which are actually obtained through fraud or dishonest conduct." This policy is very similar to that behind section 87100 of the Fair Political Practices Act (FPPA) which prohibits a public official from participating in making or attempting to influence a decision in which he knows or has reason to know he has "a financial interest." For that reason, the definition of "financial interest" in the FPPA has a direct bearing on how the courts are likely to interpret the phrase "financially interested" as used in section 1090. Both the FPPA and section 1090 prohibit indirect as well as direct interests. Section 87103 of the FPPA provides that an official has a "financial interest" in a decision, if it is reasonably foreseeable that the decision will have a material financial effect on the official or on: (a) any source of income to the official of $250 or more per year or (b) any business entity in which the public official is an employee. The public official is disqualified if the business which will be financially benefited is a parent or subsidiary of, or is otherwise related to, a business entity in which the official is employed. (2 Cal Admin. Code section 18706.) Business entities, including corporations, partnerships, joint ventures and any other organizations and enterprises operated for profit, which do not have a parent-subsidiary relationship are "otherwise related" if any one of the following three tests is met: (1) One business entity has a controlling ownership interest in the other business entity. (2) There is shared management and control between the entities. In determining whether there is shared management and control, consideration should be given to the following factors: (A) The same person or substantially the same person owns and manages the two entities; (B) There are common or commingled funds or assets; (C) The business entities share the use of the same offices or employees, or otherwise share activities, resources or personnel on a regular basis; (D) There is otherwise a regular and close working relation- ship between the entities; or (3) A controlling owner (50% or greater interest as a shareholder or as a general partner) in one entity also is a con- trolling owner in the other entity. (2 Cal Admin. Code section 18236.) ' The contract at issue will have a material financial effect on Robert I. Barbieri as the owner of a controlling interest in Redwood Oil Company. Robert Barbieri is also a general partner in the Beacon Station. It does not appear that he has a controlling interest in the Beacon Station (50% or greater). Hence, tests (1) and (3) in regulation 18236 would not apply. However, there does appear to be some shared management and control between the Beacon Station and Redwood Oil Company in that funds are commingled (funds drawn on Redwood Oil Company accounts pay employees of the Beacon Station and activities and resources are shared (Redwood Oil prepares payroll for the Beacon Station, withholds FICA and state and federal income tax from wages paid to Beacon Station employees). It also appears that there is a close working relationship between the two entities.2 For these reasons, I must conclude that Councilman Schneiter has a financial interest in the decision to approve the contract between the City and Redwood Oil Company under the FPPA and for that reason is also "financially interested,, in the contract under section 1090. If the decision had not involved the City Council ~in making a contract, Councilman Shneiter could have avoided the conflict of interest by simply declaring the conflict and withdrawing from the decision. However, since the decision does approve a contract with Redwood Oil Company, the prohibition in section 1090 prevents the City Council from approving the contract. cc: Charles L. Rough, City Manager George Vara, Finance Director ~Even if the business entities were not otherwise related, Mr. Barbieri, as general partner in the Beacon Station, is a source of income to Councilman Schneiter of, at least, $250 per year. Since Mr. Barbieri will be financially benefited by the contract with the City (as the controlling owner of Redwood Oil Company), Councilman Schneiter is financially interested in the contract for this independent reason. GIFTS COD~ V GOVERNMENT CODE § 87103 'r'ne requirements of Section 87100 are in addition to the requirements of Articles 2 (commencing with S~/on 872iX)) and 3 (commencing with Section 873~) and any Conflict of Intm~t Code adopted tbet~nder. * * * The remedies provided in Chapters 8 (commencing with Section 83100) and 11 (wmmensn~ with S~ciion 91000) shall * · * be applicsble to eleciad state officers for violations or titreat~n~ violations of * * * Section itl00 ~ under the conditions set forth in Sections 8710R.5~ and ~ by Initistive Me&sure (Prop. 2~ § ~, eE Nov. 6, lsd, if approved Nov. r~ F~ ~ o/ ~ ~ ~o ~ ~ Initi~w M~n,~r~ (t~i~ ~Zt ~. Nov. ~ lsd, if ... Historical an/Stntutol? Note~ - ! ~//0~. Financial inte~st in decision by public official · -'~ * ~ official has a flnan~in~ interest in a decision within the meanin~ of Section 87100 if it is maaonsbly of~reseeable that the decision ~ have · rrmteri~ ftrmn~ effect, distinguishable from its dfect on the public ~enertlly, on the officig, a member of his or her immediate famfly~ or on ~ (n) Any busin~ enti~ in ~hi~ the p~lic ~ has a direct or ~ investment worth one tlxs=and dollars ($1,000) or mo~. ~ Any ~ property in which the public ofl~lal has · direct or indite· intm.est worth one thousand &liars ($1,000) or more. (c) Any source of income, other than ~ and other than loans by · commerdal lending institution in ~ r~,ular course of business on terms ·vallnble to the public without ~ to official q~%'~ two hundred ~ dollars (~.50) or more in value provided to, received by or premised to the ~ official within 12 months prior to the time when the decision is made. h~.~ business entity in which the public official is a ~r, officor, panner, trustee, employee, or any position of ma~'mgement. (e) Any donor of, or say intermediary or at~nt for · donor of, · gift or t'ift.s att, regaling two hundred ~y dollars (~250) or more in vtlue provided to, received by, or promised to the public official within 12 ~t t~i~suted biennially b the commission to ua] the sa~e amount de~rrnined For pm'poses of this section, indh'~.-,a investment or interest means any investment or interest owned by the spouse or dependent child of a public olYlciaL by an a~nt on behalf of a public official, or by a busine~ entity or trust in which the official, the dflcial's a~ents, spouse, and dependent children own dir~, indirectiy, or beneficially a 10-percent intm, est or ~eeater. 0tree·deal ~ Sta~A994, c. ~86 (S~.~60~), § L) Historic-I m~! Statutory Notes *'Sec. 2. The amount of' the vaJue of' rifts subject to su~on (e) m' Section 8710~ of the Govu'nment Code I)mll, effective Janum.y 1, 1996, be two hundred seventy doLiin (S270) unti] adjusted by the F&b' Political Prumees Commimon at the aL, ne brae and in the same amount as t~ amount determined pursuant to subdivision (e) or Section "Sec 4. The Legislamt. e finds ~nd dee. bras that the o'rmSiOns of this L--t further the purpose of the Pol~tic&] Act of 1974 witch the meinin~ of subdiv~on (~) of Section 81012 of the Government Code." 'e?'-. ~w~)e.ry commission, ind~wy a~ ~ public intm'est, Tomato eomminion, industry as a public interest, see Food and Atmcuitural Code § 7'/407. Food a.nd Arricultm. al Code § ?8609. AddttJon8 or chango8 Indicated by underline; dolotJon8 by literlika * · · ,"T CODi GO~q~4Eh~r CODE § 89502 ents. T~. ior, 88~.~ I~a~ Revie~ and Join-hal Comm~ntarie~ Jed. m'~i~ ~ ~ g~o and C&mDoJ~ Fin&ace Reka-m al~ Yo~ Used to dc: ~ Michael Bog~w~ 29 Id&ho thru C~ ~'s Prcgmit~on 7~: Why ~n~ Y~ ~ ~ ~ ~. ~ II~). ~'~a ~: :remptc: 'nphiet a~ Count.: eeding > ,i, ng -,ally .~.:. ely high. ;erker.: I 8560L Honorarium; application (a) For purposes cf this chapter, 'honorm. ium" m~,~ except as provided in subdiviaion (b), any paymant made in consideration for any s~_~e~__h given, a.-'dcle published, or a~tendance at any public or priv~ coMerance, convemiort, meeting, social evant, meal, or like gathering. (b) The ~ 'h~norarium~ does not ir~ude: (1) Earned income for personal ~rvices which ~re customarily prm~ded in cormec~on with the practice of a bona fide business, trade, or pr~fesaioa, such ~s t~J~g, practicing l~w, medicine, insurance, real e~tat& banking, or building contracting, uale~ the ~ole or predominant activity of the busine~ trade, or pr~fe~tion t, making speeches. The commi~ion ~ ~lopt regulations to implement t.his subdiv~ion. (2) Any honorarium which is not taed and, within 30 clad afttr receipt, is either returned to the donor or delivered to the Sate Controller for donation to the C,~neral l:'und, or in the case of a public official for local ~verrtment agency, delivered to 1~ or her agency for donation to an equivalent fund, without being claimed n a dedu~on from income for tax ~ (e) Section ~ shall apply to all payman~ advance~ or reim~ents for travel and related ~ and ~ubaisten~ (Added by Stm. l~, c. ~0 (S.B.?0~}, § Hi.lode. al ami Statutory Notes i~ L~atlon ' Derlvati~t: Fm'm~r I ~ ~ded by Stat~.1990, c. tA.~lbO.~o I ~; 8tat~l~4, c. I10~ (A.B.~I~}, i 1, am/ ~u _ml~l~ by 8taa.t~, c. ~90 (S.B.7~I}, I I. See, .... ~dw Review &nd Journil Commentaries i~vt~ ~, ~leet~l 1~ California lerlahtton. Z6 ~ Je~J~ I 8W)2. Honortrh prohibitions; ma)IX (~) No eleet~cl mtm~e officer, elected ofllcer of · local govmrnment m&mncy, or other inctividuml mpec~ed in Sec~on 87200 ~ m~ept L'ty honorurium. · .~~ a~c~__"a~allfO~,~ective ?ate o.fflce= for Judicial omce~ or for elective office in a local t~,....,. ....~ . pt any nonormqum, a ~n ~hali be deemed m c~ndicL~.e for Durt~ --..--mCaion when The pm'~on 1~ filed m mtatemant of o ' tion ' i-2.-df2~-°-f rran~ mi · com~ttee for el~o, state or local o~ee, m declaration of intent, or a declaration of candidacy, whichever occurs first. A Person ahall not be deemed m candidate for purposes of this subdivision after he or she is sworn into the elective office, or, if the person lost the election after the person has terminated his or her statement filing obligations for that office pursuant to Section 84214 or after certification of the ele~ion · ~it m candidate as described in ara h (1) for (c) No member of a state board or commi~on and no deaignated employee of a state or local · report the rec~pt of income or 84frs from thit source on his or her statement of economic interests. (d) ~ section ~ not app]y to s person in his or her clpactty as judge. This section shall not apply o~,~er~°~ _n~in ~ or her cap~ity ~sa part. time member of the g~veming board of any public institution --u,, e~ucation unless t~t position is an elective (Added by SIm&1995, c. 690 (S.B.701), § 4. Amended by Stats.1996, c. 1056 (S.It.1697), § 1.) AddltJonl or chit)gem ifldlc~tocl by undofflne; dolotJon$ by ilterJlkO · · · 101 Se~on 4 of St,m.199~ c. 1066 (S.B.1097). i:nmvides: "The l. egislsu~ ~ re, nd dech.,,u thm~ the ~ ~ of 1~/4 within the meini~ of ~ (&) cml ~t'~ien 81012 of the Goverm~nt Code.' Derh, gioe: Former ! ~6Ol, ~ b~ StmAsS~, e. M,! 13, mmended by Stita.1994, c.M, j 3; Stau.1994, e. 1106, ! 1. mmended by Stmu,4998, e. 789, f ~. .. I ~,03. Git~ from mhgie ~o~ce ~ cMemt~r ~ ~u~ ~ oF pmh~iUon (I) No ~ s~ office, ~ o~ of ~ 1~ ~~t ~n~, ~ o~ ~~ ~ ~ ~on ~_~ ~pt ~ ~ ~ ~e ~ ~ ~ ~ ~M~ a ~ ~ of ~ m~ ~ h~ ~ do~ (~). ~)(1) No ~~ for ~ ~ ~f~ ~ o~ ~ f~ ~e o~ ~ m ~ ~v~ent ~n~ ~ ~pt ~ ~m ~y ~e ~ in ~y ~en~ y~ ~ m m~ ~ ~ mom ~ ~ h~d~ ~ d~ (~). A ~n ~ ~ d~m~ a ~dam for ~ of ~ ~on wh~ ~e ~n h~ ~ a m~t of o~on ~ a ~m~ for ~n ~ a ~ ~ ~ot ~ d~ m ~i~m for p~ of ~ ~u~on ~ he or she ~ ~m ~m ~e ~ o~ or, ff ~e ~n l~t ~e ~o~ ~ ~e ~n ~ ~~ ~ or h~ ~~ ~~t ~ ob~Uo~ for ~ offi~ ~ ~ ~n ~14 or ~ ~~on of ~e ~Uon ~ ~~ · ~er. .. ~onhofrI) %al]~ nots , rto31a~ . nwho is, candidate ms described~ (c) No member of a state board or commisaion or desiimated employee of a state or local government agency shall accept gifts from any singte sourtm in any calendar year with a to~ value of more than two hundred fifty dollars (11250) ff the member or employee would be required to report the receipt, of income or gtfta from that source on his or her stamment of economic interests. (d) This section shall not apply to a person in his or her ~_~city as judge * * *. This section shall not apply to a person in hh or her capacity ms a pan-time member of the governing board of any public inst/u~tion of higher educm/on unle~ that poaition i~ an elective office. (el This ~eetion ahall not prolu~t or limit the fo~. (1) Paymen~ advancea or rembursements for travel and related lodging and submtence permitted by Sect. ion 89506. (2) Wedding gifts and gifts exehan~ between individuals on birthdaya holiday~, and other ~ occasions, provided that the gifts excl~ged are not subetam/ally disproportionate in value. (f~ Beg~rming on January 1, 11~3, the commi~on shall adjust the gi~ limitat/on in this ~-'tion on January I of each odd-numbered year to reflect change~ in the Consumer Price Index, rounded to the nearest ~ dollars ($10). (gl The limitations in this ~/on are in addition to the limitation~ on gifts in Sec~on 86203. (Added by Stats.1995, c. 690 (S.~.TOl), § 6. Amended by Stata1996, c. 1056 (S.B.1697), § 2.) Hlm~cal and Statutory Note~ 10tS Legimhtion lin Let, blition Former. § 89603 wu repealed by ~-_;_..1996, c. (S.B. The 1996 amendment, in subcL (b), de~$,nated the exist- TOlL § (~. See, nov,,, Goven~ment Code ! 8964~ ink pm~,mph m subd. (bX1) &nd ~ in the fL-ut AdcllUoflo or chmngem frJcfi~tod by ~undorll~; cbloffono by astorto~ · · · 102 CObz GOVEILN~ENT CODE ~504, 8960~. Repealed. § 89506 'The L~i~lar. ur~ ~nc~ ~nd declares that the provi~n~ thi~ ~ ~er ~e p~es of ~e Poh~ ~ ~ ~ 1~4 ~n ~e ~g of ~u~ (a) ~ ~on 81012 of ~e, ~~nL ~e." ~o.: Foyer [ ~, ~ed by S~I~, a ~ ~ 1~ ~nd~ ~y Smml~, c. 11~, [ Z ~r ~ ~ ~ by S~.l~, ~ ~, ~ 1~. Article 2 Mearu~ (P~ ~lZ § ;l, eft. Nov. & 199~, if a~d ~ ~ Nov. 5, 199& ~e of ~la~on. ~femn~. ~om, ~ 2 C~. C~e of ~. ~on at ~e ~e ~me ~d in the ~e ~t ~ ~e n~, ~ent C~e I ~. ~t dete~i~d pumuant ~ ~ub~on (e) ~ the ~em ~e s~ ~ Article 8 TRAVEL Section 89~6. Truve! paymen~ sdvinces nd reim- bursements. Repeal ! 8150r~. Truvel plymen~ adya.nces end reimbm'semenU (a) Payment~ ~v~nees, or reirnbur~emen~ for .t~vel, in. du..ding actual transportation and related .hd~g and ~ub~tence which is re~onably rehted u~ ~ le~aUve or ~vernmental purpose, or to an ~e of ~ate, r~tional, or int~.nutional public policy, m'e not prohibited or limited by this chapter ff either of the following apply:. · mnn m~.T. LZ ...... ~o_r~? srmte om.ce or 1 .o~l.d .e~. offi?, ~ Lndividual specified in Sec~on ~. :V,,.-~...~. ~e ? or comrmsmon, or..a~?~e, employee oz ,, state or ioc~ government (Z) The ~r~vd m prov/ded I~' a government, a governmental agency, a foreign government, a IommmentaJ author/ty, a bona f~de public or pr/vats educat/ona]/n.~tut/on, as defined in Sect/on g(B of Additton8 or changes lndic~tod by underline; deloflonl by merilks * * * 103 2' § 89506 the Revenue Lng Tix~o~ Code, a nonprofit ~ or rP. tigious orpniz~o~ which is ex~mpt i3xa~on under Section 501(~X3) ~ I~.t~ml ~ Code, or by ~ person domiciled United States which subsumti~¥ es ~e ~ roi' tax-exempt sLIvas u~der of the Inter~ Revenue Code. (b) Gil~ of tr~vel not described in subdivisio~ (a) sr~ mbject to the limits in · (c) Subdivision (a) s~)lies only to trlvel ~ is r~or',ed on the recipie~t'$ (d) For pu.,po~ of (I) ~10), or . ~' ~v~ ~i~ m~o~ ' ~ ~ (4) ~ ~end~ by Sm~l~, ~ 11~ ~21~), ~ ~ ~1~ c. ~ (S2.701), ~ 9.) Hbtor/ca~ ~ Statutory Notes 1004 LelbhUon The 1Oh smendznent, in subcL (&Xl) reh~inf to U'tve] o,nne~o.n. wiLh · speech, irc'ted 'io~ ~-d oMce. laer, madidaLe for eject, ed start office or local elected c~c~"; sad in subd. (dX2) relating to travel provided by lS~5 Lesislation 'the 19c~ amendmenL ia subd. (aXIL inserted '~a indi. viclug specked in S~.ion gT200," foUoMn~ "local eJec~ Code of Reruhtions References' (]iA lJ~t .~Gs~ent. see 2 C~ Code of' Refs. i 18964. Ar'dcle 4 CAMPAIGN FUNDS 895173. Electronic securit~ s~.ms for use in home or office of candidate or officer verification of thres~. ~9519. Pos~lection campaign fimds r~ised M~er Jar~ 1, 1989. 89519. 89619. Surplus campaign funds. Funds rm~ining following withdrawal or election. Construcaon of d~pter. LIABILITY Law Offices Of RAPPORT AND MARSTON An Association of Sole Practitioners David J. Rapport Lester J. Marston 200 W. Henry Street P.O. Box 488 Ukiah, California 95482 (707) 462-6846 FAX 462-4235 MEMORANDUM TO: FROM: DATE: SUBJECT: Candace Horsley, City Manager ~ David J. Rapport, City Attomey,~ ( ~ February 15, 1996 *'~,/t~ '~ Personal liability of City Council members for intentional torts Jeff Davis, the General Manager for REMIF, has sent you a copy of Government Code Section 815.3, enacted in 1994, effective January 1, 1995. (A copy of his letter and Section 815.3 are attached.) That Section contains rules governing the liability of elected officials, such as City Counciimembers, for their intentional torts. Mr. Davis suggested that the City Attorney prepare a memorandum advising City Councilmembers about the effects of Section 815.3. That is the purpose of this memo. SUMMARY OF SECTION 815.3 Section 815.3 states that elected officials, not the public entities on which they serve, are individually liable for their intentional torts, except for defamation, unless the public official and the public entity are both named as co-defendants in the same law suit. Even if they are both named as co-defendants, the public entity has no liability for the intentional tort of its elected official, unless the court determines that the intentional tort "arose from and was directly related to the elected official's performance of his or her official duties." If the court determines that the intentional tort did arise from the elected official's performance of his or her official duties, the City is liable as otherwis~ provided by law.~ ~ An elected official, like any other public employee, is entitled to have the public entity defend a lawsuit against the official, if the claim is based on an act or omission occurring with the scope of his or her employment. (Government Code §825.) The public entity is also required to pay any settlement or judgment against the official. However, the public entity is not responsible for defense costs or any settlement or judgment, if it can establish that the elected official acted or failed to act because of "actual fraud, corruption, or actual malice, or willfully failed or refused to conduct the defense of the claim or action in good faith." (Gov. Code §825.6.) In addition, a public entity is not required to pay that part of a claim or judgment that is for punitive or exemplary damages. (Gov. Code §825(a).) However, the legislative body of a public entity can pay a punitive damage claim against a public employee, if it decides in its sole discretion that: ·: \u\memos96\council. cr~ February 15, 1996 Memorandum to Horsley Subject.. Liability of Co-~cilmembers February 15, 1996 Page 2 If the court determines that the intentional tort did n~ot arise from and was not directly related to the elected official's duties, the plaintiff must first seek to satisfy the judgment fro-"'m the elected official's assets. However, if the court determines that the elected officiaJ's assets are insufficient to satisfy the whole judgment, the plaintiff may seek to collect the balance from the public entity and the public entity may pay the deficiency, if othenvise authorized by law. If the public entity pays any portion of the judgment against the elected official or paid any of his or her defense costs, the public entity is required I:¥ Section 815.3 to seek to recover those expenditures from the elected official, using ~ available creditor's remedies. TO WHAT TYPE OF CONDUCT DOES SECTION 815.3 APPLY? Section 815.3 applies to all intentional torts, except defamation. A "tort" is "any wrong, not consisting in mere breach of contract, for which the law undertakes to give the injured party some appropriate remedy against the wrongdoer." 2 The most common remedy is money damages. Torts are broadly divided into two broad categories: negligence and intentional torts. Section 815.3 obviously only concerns intentional torts. Negligence is the causing of injury or damage by failing to use ordinary or reasonable care, meaning that care which persons of ordinary prudence would use in order to avoid injury to themselves or others under similar circumstances? In other words, suits for negligence are based on injury or damages caused by carelessness; not injury or damage resulting from an intentionally wrongful act. Intentional torts, on the other hand, involve intentionally causing injury or damage through conduct which is generally considered wrongful and not justifiable under the circumstances. 4 Examples of intentional torts include, assault, battery, false imprisonment, intentional infliction of emotional distress, fraud, interference with contract or prospective economic advantage, defamation, including libel and slander, invasion of privacy, trespass, and conversion of property. Section 815.3 specifically lists harassment, sexual battery, and intentional infliction of emotional distress as examples of intentional torts to which the section applies. It also expressly excludes defamation. 1. the act or omission giving rise to the claim occurred within the scope of the employee's employment; 2. the employee acted or failed to act in good faith and without actual malice and in the apparent best interests of the public entity; and 3. payment of the claim or judgment would be in the best interests of the public entity. 2 Witkin, Summary of California L~w (9th Ed. 1988), Vol. 5, Torts, §3, p. 59, quoting Denninq v. Sram (1899) 123 Cal. 316.) :~ Witkin, su_F.p.m. §729, p. 57. 4 Witkin, supra. {}17, p. 77. s: \u\memos 96 \council. February 15. 1996 Law Offices Of RAPPORT AND MARSTON An Association of Sole Practitioners David J. Rapport Lester J. Marston 200 W. Henry Street P.O. Box 488 Ukiah, California 95482 (707) 462-6846 FAX 462-4235 ,.MEMORANDUM TO: FROM: DATE: SUBJECT: Candace Horsley, City Manager ~ David J. Rapport, City Attomey,~ [ ~ February 15, 1996 ~' ~,/t~ '~ Personal liability of City Council members for intentional torts Jeff Davis, the General Manager for REMIF, has sent you a copy of Government Code Section 815.3, enacted in 1994, effective January 1, 1995. (A copy of his letter and Section 815.3 are attached.) That Section contains rules governing the liability of elected officials, such as City Councilmembers, for their intentional torts. Mr. Davis suggested that the City Attorney prepare a memorandum advising City Councilmembers about the effects of Section 815.3. That is the purpose of this memo. SUMMARY OF SECTION 815.3 Section 815.3 states that elected officials, not the public entities on which they serve, are individually liable for their intentional torts, except for defamation, unless the public official and the public entity are both named as co-defendants in the same law suit. Even if they are both named as co-defendants, the public entity has no liability for the intentional tort of its elected official, unless the court determines that the intentional tort "arose from and was directly related to the elected official's performance of his or her official duties." If the court determines that the intentional tort did arise from the elected official's performance of his or her official duties, the City is liable as otherwis'~-'provided by law.~ ~ An elected official, like any other public employee, is entitled to have the public entity defend a lawsuit against the official, if the claim is based on an act or omission occurring with the scope of his or her employment. (Government Code §825.) The public entity is also required to pay any settlement or judgment against the official. However, the public entity is not responsible for defense costs or any settlement or judgment, if it can establish that the elected official acted or failed to act because of "actual fraud, corruption, or actual malice, or willfully failed or refused to conduct the defense of the claim or action in good faith." (Gov. Code §825.6.) In addition, a public entity is not required to pay that part of a claim or judgment that is for punitive or exemplary damages. (Gov. Code §825(a).) However, the legislative body of a public entity can pay a punitive damage claim against a public employee, if it decides in its sole discretion that: ·: \u\memos96 \counc~.l. ~rl: Februaz%, 15, 1996 Memorand~ to Horsle¥ Subject: Liability of Counci]~-~hers February 15, 1996 Page 3 Defamation is an invasion of a person's interest in his or her reputation. It can consist of libel or slander. Generally, libel involves defamatory statements made in writing. Slander is generally restricted to oral statements and gestures. The tort of defamation includes an unprivileged publication (written or oral) which is false, damaging to reputation, and has a natural tendency to injure or, in fact, causes special damage,s Section 815.3 is also primarily addressed to the conduct of the individual elected officials; not to policy decisions made by the City Council through the votes of the councilmembers at a City Council meeting. For example, in Caldwell v. Montoyas, the California Supreme Court held that individual members of a school board could not be held personally liable for a decision not to renew the contract with the school superintendent, even if the board members voting for the termination of the superintendent were motivated by a desire to discriminate on the basis of race or age in violation of California's Fair Employment and Housing Act ("FEHA"). The Court ruled that the decision by members of an elected school board whether to renew the contract of the district's superintendent is a basic policy decision, and thus a discretionary act of the kind for which public employees are entitled to personal immunity under Government Code §820.2, even against liabilities imposed by prohibitory state statutes of general application such as FEHA. Thus, when councilmembers vote on matters before the council at duly called council meetings, there is little risk of personal liability for damages caused by the resulting decision, even if the decision violates a state law. WHEN DOES AN ACT OR OMISSION ARISE FROM AND DIRECTLY RELATE TO THE ELECTED OFFICIAL'S PERFORMANCE OF HIS OR HER OFFICIAL DUTIES? Section 815.3 specifically states that acts or omissions constituting sexual harassment shall not be deemed to arise from, and to directly relate to, the elected official's official duties. The State Supreme Court recently reached the same conclusion in Farmers Ins. Group v. Santa Clara County7. In that case, the court held that a deputy sheriff's repeated acts of sexual harassment of co-workers, including another deputy under his direct supervision, fell outside the scope of his employment as a deputy sheriff. As a result, the court concluded that public funds could not be used to indemnify him for liabilities arising out of his own conduct. 8 s Witkin, supra, r~471, pp. 557-558. s._ Cal. 4th ~ 42 Cal. Rptr. 2d 842 (1995) 7__ Cal.4th ....., 47 Cai. Rptr. 2d 478 (1995) 8 This does not mean that the county escapes all liability. In Farmers Ins. GrouD the plaintiffs recovered separately from the county. One of the former deputies recovered $700,000 from the county, because of its liability as an employer. An employer can have liability for sexual harassment under Title VII of the Civil Rights Act for the acts of its supervisory employees, or if it fails to take adequate steps to protect its employees from sexual harassment. At issue was whether the county was also required to repay the deputy who harassed the plaintiffs (or his insurance company) for his defense costs and the $153,000 settlement against him. \u\memcs96 \counczl. :ri: 15. 1996 Memorandum =o Horsley Subj ec=.- Liabil£ty of Councilmembers February 15, 1996 Page 4 At the same time, Section 815.3 also states that "employee managerial functions shall be deemed to arise from, and to directly relate to, the elected official's official duties." i interpret this to mean that where the City Council has responsibility under the City Code or state law for managing city employees, acts or omissions of City Council members in performing those duties will be considered to arise from and directly relate to their official duties. However, councilmembers should keep in mind that the City Code delegates much of that direct managerial control to the City Manager and individual city councilmembers have no individual managerial responsibilities. Accordingly, councilmembers may not have a right to indemnification from the City for intentional torts committed by them individually, even if they claim to be exercising an 'employee managerial function." It is not clear whether the 'arising from" and "directly related to" language in Section 815.3 has the same meaning as the phrase 'scope of employment," which has been the subject of many court decisions, including, most recently, Farmers Ins. Group_. As to public employees generally, whether an act or omission occurred within the employee's scope of employment determines whether they are individually liable or entitled to a defense and indemnification from the public employer. (Gov. Code §825 and footnote 1.) To determine whether an act or omission occurred within the scope of employment the courts ask the broad policy question whether the liability is one which it is reasonable to impose on the employer as an expected cost of doing business.' Put another way, is the risk of liability one that may fairly be regarded as typical of or broadly incidental to the enterprise undertaken by the employer. After reviewing numerous decisions, the Farmer decision concluded that courts impose liability on the employer where the employee's conduct was undertaken for purposes connected with the employer's interests, as opposed to the purety personal interest or gratification of the employee; ware engendered by events or conditions relating to employment duties or tasks; or were necessary to the employee's comfort, convenience, health or welfare while at work. If none of these elements are present, regardless of whether the conduct occurred during normal business hours or on the business premises, the conduct would not be regarded as within the scope of employment. Examples of acts not regarded as within the scope of employment were sexual assault of a student by a Sunday school teacher, seduction of a Parishioner by a priest, rape of a student by school janitor. ~o These acts were undertaken for the purely personal gratification of the employee, had no purpose connected to the employment, and were not necessary to the employee's comfort, convenience, health or welfare while at work. The broad and somewhat complicated standard employed by the courts may be difficult to apply to electecl officials, whose duties outside attendance at city council meetings and other organizations they attend in their official capacity are somewhat vague and difficult to define. D JR:can 9 Farmers at 486. ~o Farmers, at 488. ~,u \memos 96 \ councl i. :ri 15. 1996 SELECTED ISSUES IN CALIFORNIA GOVERNMENT ENTITY DEFENSE 1996 Low, BALL & LYNCH Attorneys at Law San Francisco Office 601 California Street, 21st Floor San Francisco. CA 94108-2898 (415) 981-6630 Peninsula Office 10 Twin Dolphin Drive, B-500 Redwood City, CA 94065 (415) 591-8822 II. III. IV. V. VI. SELECTED ISSUES IN CA.LIFO~ GOVERNMENT ENTFrY DEFENSE OVERVIEW OF TORT CLAIMS ACT AND GENERAL LIABILITY AND IMMUNITY PRINCIPLES A. B. C. D. Eo G. Terminology: California Tort Claims Act ....................... 1 Outline of Government Code §§ 810 - 996.6 ..................... Public Entity Liability Solely Statutory ......................... 2 Public Entity Liable for Acts or Omissions of Public Employees ia Scope of Employment ................... '. 3 Liability is Generally Subject to Immunities ...................... 3 Liability Subject to Defenses Available to Private Persons General Tort Case Law Applicability .......................... 3 Strict Products Liability not Available .......................... 6 Entity Not Liable for Punitive Damages ........................ 6 IMMUNITIES A. B. C. D. E. Discretionary Acts and Omissions 7 Inspection of Propert3' 8 Enforcement or Non-Enforcement of L.:~v ....................... 8 Malicious Prosecution Asbestos DANGEROUS CONDITION OF PUBLIC PROPERTY .................. 9 A, B. C. D. E. Plaintiff's Burden of Proof ................................... 9 Defenses and Immunities ................................. 11 Happening of Accident not Evidence "~ ....................... 14 Res Ipsa Loquitur ............ " 14 Evidence of Other Accidents or Abser .,, f'hereof .................. 15 CLAIMS AGAINST PUBLIC ENTITIES ............................. 15 A. Preparation and Presentation of Claim ......................... 15 Response by Public Entity to Claim ........................... 17 Late Claims Procedures 18 ACTIONS AGAINST PUBLIC ENTITIES ............................ 19 A. Statute of Limitations Pleading Considerations 19 Malicious Prosecution TRIAL/POST-JUDGMENT CONSIDERATIONS ....................... 20 A. C. Jury Fees/Court Reporter Fees ............................... 20 Motion for Reduction of Judgment for Collateral Source Payments ................................. 20 Post-Verdict Settlement Conference ........................... 20 Installment Payments ..................................... 21 Interest Rate ........................................... 21 S~:CTED ISSUES IN CA~.rFORNLA GO~ ENTITY DEFENSE' OVERVIEW OF TORT CLAIMS ACT AND GENF, RAL LIABfI.ITY AND IMMUNITY PRINCIPLES A. Termir~ology: California Tort Claim.~ Ac~ Prior to 1963. government tort liability was set forth in various unrelated statutes and limited case authority. In 1963, the legislature enacted a group of related statutes pertaining to government tort liability which have become collectively known as the Tort Claims Act. These statutes are found in California Government Code § § 810 through 996.6. NOTE: For suits against the United States, .see Federal Torts Claims Act, 28 U.S.C. §1346(b). B. Outline of Government Cod_e Sections 810 through , Definitions for Public Entity, Employee, Public Employee, Employment, Law, Enactment, Statute, Regulation and Injury. (Government Code 4§ 810-811.8). . Liability of Public Entities and Public Employees (Government Code 48 814-895.8). These sections are divided into nine chapters: a. General Provisions Relating to Liability (Government Code § § 814-825.6). b. Dangerous Condition of Public Property (Government Code 44 830--840.6). C. Police and Correctional Activities (Government Code d. Fire Protection (Government Code 44 850-850.8). This material is derived m pan from California Government Tort Liability (3d ed. Cal, CEB 1992 and June 1995 update). LOW, BALL & LYNCH. Attorneys at Law, 601 Califomi~ Street. San Francisco, California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822 e, Medical, Hospital, and Public Health Activities (Government Code §§ 854-856.6). Administration of Tax Laws (Government Code 860.4) §§ 860- go Use of Pesticides (Government Code § 862). h. Activities to Abate an Impending Peril (Government Code §§ 865467). Tort Liability Under Agreements Between Public Entities (Government Code §§ 895-895.8). , Claims Against Public Entities (Government Code §§ 900- 935.6). . Actions Against Public Entities and Public Employees (Government Code §§ 940-960.8). . Payment of Claims and Judgments (Government Code §§ 965- 978.8). 6. Insurance (Government Code §§ 989-991.2). . Defense of Public Employees (Government Code §§ 995-996.6). C. Public Entity Liabili_ty Solely Smm~ry Once the Tort Claims Act was adopted in 1963, all government tort liability was dependent exclusively on statute. Government Code § 815(a) provides '[e]xcept as otherwise provided by statute, [a] public entity is not liable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person." Thus, all common law liability was abrogated except as required under the state or federal constitution. (Michael $. v. Los Angeles County_ Dep't. of Adoptions (1988) 201 Cal. App.3d 859, 866, 247 Cal. Rptr. 504, 507. See, e.g., Youne v. County of Marin (1987) 195 Cal. App.3d 863, 869 (claim for wrongful termination based on exercise of First Amendment fights); !,,ucas v. Fresno Unified School Dist. (1993) 14 Cal. App.4th 866, 18 Cal. Rptr.2d 79 (School District liable for LOW. BALL & LYNCH. Attorneys at Law, 601 California Sweet. San Francisco. California 94108 (415) 9814630 10 Twin Dolphin Drive. B-SOO. Redwood City, California 94065 (415) 591-8822 injuries to an elementary school student resulting from dirt clod fight, pursuant to Educ. Code §44807.). Do Public Entity Liable for Acts or Omi~,~ions of Public Employees in Scope of Their Fxnployment The government code provides in pertinent part that "[al public entity is liable for injury proximately caused by an act or omission of an employee of the public entity within the scope of his [or her] employment if the act or omission would, apart from this section, have given rise to a cause of action against that employee or his [or her] personal representative." (Government Code § 815.2(a).) Therefore, under the California Tort Claims Act, a public entity's liability may be based on the principle of respondeat superior. Lisa M. v. Henry Mayo Newhall Memorial Hosp. (1995) D.A.R. 17103; Mary M. v. Cim of Los Angeles (1991) 54 Cal.3d 202. E. Public Entity Liability is Generally Subj_,~t_ to Immunities Government Code § 815(b) provides that public entity liability is subject to the statutory immunities in the Tort Claims Act. Therefore, the statutory immunities prevail over the general liability provisions applicable to public entities. Fo Public Entity and Public Employee Liability Subject to Defenses Available to Private Persons Unless provided for otherwise by statute, the liability of a public entity under Government Code §§ 814 through 895.8 is subject to any defense that would be available to the public entity if it were a private person (Government Code § 815(b). Thus. a public entity has both immunities to limit liability and the defenses available to the private person absent a statute providing otherwise. For example, the doctrine of comparative negligence is applicable in government tort actions and may be raised as an affirmative defense. (Fredette v. City of Long Beach (1986) 187 Cal. App.3d 122, 130, 231 ~2al. Rptr. 598, 602; Levine v. City of Los An_,2eles (1977) 68 Cal. App.3d 481,488, 137 Cal. Rptr. 512, 515.) Go General Tort Case Law ApplJc~_bility to Government ~ntity Ca~e_ 1. Generally Although government tort liability is statutory, many of the theories of liabilities against government entities are the same as general tort law principles. Thus, LOW. BALL & LYNCH. Attorneys at Law. 601 California Street, San Francisco, California 94108 (415) 9814630 I0 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822 frequently a case against a government entity is based on common law negligence. Additionally, since a public entity can raise a defense available to a private person. case law interpreting the applicability of a defense in a case other than against government entities is likewise applicable. . Ne li~ence Law A licable to Government Entitv Therefore. when a case is brought against a public entity to recover for damages under a negligence theory of liability, the general requirements of a negligence case in the private sector likewise applies. In order to recover for damages under a negligence theory of liability against a public entity., the following must be present: A statutory, legal duty to use due care; A breach of that legal duty; and The breach as a legal cause of the resulting injury. (City of Sacramento v. Superior Court (1982) 131 Cal. App.3d 395,402.) a. Duty to Use Due Care The issue of whether a duty of care is owed to plaintiff is a question of law. The question of duty is decided on a case by case basis. Whether a duty exists in a given situation involves the analysis and weighing of various factors. The general factors from Rowland v. Christian (1968) 69 Cal.2d 108, 70 Cal.Rptr. 97 have been held to be applicable to cases against government entities. (See _Thompson v. County of Alameda (1980) 27 Cal.3d 741,750, 167 Cal. Rptr. 70, 74.) The factors to be considered include the following: The foreseeability of harm to the plaintiff; The degree of certainty that the plaintiff suffered injury; The closeness of the connection between the defendant's conduct and the injuries suffered; The moral blame attached to the defendant's conduct; The policy of preveming future harm; The extent of the burden to the defendant; The consequences to the community of imposing a duty to exercise care with resulting liability for breach; and The availability, cost, and prevalence of insurance for the risk involved. LOW. BALL & LYNCH. Attorneys at Law. 601 California Street, San Francisco. California 94108 (415) 981-6630 I0 Twin Dolphin Drive, B-SOO. Redwood City, California 94065 (41.5) 591-8822 The court in Thompson v. County of Alameda suvra, also stated that in addition to the above, in a case against a public entity, the f°ilowing three factors must also be considered: The extent of the agency's power; The role imposed on it by law; and The limitations imposed on it by budget. b, Duty Issue to be Determined Prior to Immunity Issue The court will generally answer the question of whether the defendant owes a duty. of care to the plaintiff prior to determining whether or not any immunity applies. If duty is found, the court will then determine whether any immunity issues exist which will bar liability against the government entity. However, where the issue of immunity is clear.-and the duty issue is not so clear, some courts have disposed of the case on the immunity issue prior to deciding the duty. issue. In such a situation, defense counsel should consider trying to dispose of the issue by pre-trial motion or demurrer. (Se._.!.e Geffen v. County of Los Angeles (1987) 197 Cal.App.3d 188, 192, 242, Cal. Rptr. 492, 494.) C, Mandatory Duw Liahili~ Under Government Code {} 815.6 "where a p ,: entity is under a mandatory duty imposed by an enactment that is designed to .~i otect against a risk of a particular kind of injury., the public entity is liable for an injury of that kind proximately caused by its failure to discharge the duty unless the public entity establishes that it exercised reasonable diligence to discharge the duty." In order to find liability against the public entity pursuam to Government Code {} 815.6, three prerequisites must be found: (1) (2) (3) An enactment must impose a mandatory, not discretionary, duty; The enactment must intend to protect against the kind of risk suffered by the plaintiff; and The breach of the mandatory duty must be a legal cause of the plaintiff's injury. LOW. BALL & LYNCH, Attorneys at Law. 601 California Street. San Francisco, California 94108 (415) 981-6630 10 Twin Dolphin Drive. B-500, Redwood City, California 9~,065 (415) 591-8822 (See State v. Superior Court (Perry) (1984) 150 Cal. App.3d 848, 854, 197 Cal. Rptr. 914, 918. d. Liability for Act of Independent Contractors A public entity cannot be liable for an independent contractor's act or omission "if the public entity would not have been liable for the injury had the act or omission been that of an employee of the public entity." (Government Code § 815.4; see also, Foster v. County of San Luis Obispo (1993) 14 Cal. App.4th 668.) (1) Non-Delegable Duty California law recognizes that private employers are liable for torts of their independent contractors that involve a failure to discharge a non-delegable duty of the employer. Under this theory of liability, when the employer is under a "duty to do certain work carefully, or maintain property in [a] safe condition, [the employer] cannot escape responsibility by delegating the work to an independent contractor." Government Code § 815.4 makes this theory of liability applicable to public entities as well. (2) Peculiar Risk Doctrine A public entity may be held liable under Government Code § 815.4 for the torts of its independent contractors based on the peculiar risk doctrine. (S. ee Jordv v. County of Humboldt (1992) 11 Cal.App.4th 735, 14 Cal. Rptr.2d 553; but see Privette v. Superior Court (1993) 5 Cal.4th 689, which held that the doctrine of peculiar risk does not extend to employees of an independent contractor hired to do dangerous work if the worker is covered by worker's compensation.) H. Strict Products Liability Not Available Because liability is solely statutory, plaintiff may not assert the non-statutory strict products liability theory against a public entity. (Tolan v. State (1979) 100 Cal. App.3d 980, 987, 161, Cal.Rptr. 307, 310.) I. ~nti_ty Not Liable for Punitive Darrmges Government Code § 818 specifically provides that public entities are not liable for punitive damages under any circumstances. The reason for this departure from normal common law is that punitive damages are designed to punish a defendant for wrongful conduct and are found to be inappropriate where public entities are LOW. BALL & .LYNCH, Attorneys at Law, 601 California Street, San Francisco. California 94108 (415) 9814630 10 Twin Dolphin Drive, B-500. Redwood City. California 94065 (415) ~91-8822 involved because ultimately the punishment would fall upon innocent taxpayers. A public employee under certain circumstances, however, may be liable for punitive damages. Runvan v. Superior Court (1986) 187 Cal. App.3d 878, 881,232 Cal. Rptr. 101. 102. A. Discretionar3r Acts and Omimions of Public l::xn_ulovees Under Government Code § 820.2 a public entity is not liable for an injury resulting from an act or omission that was "the result of the exercise of the discretion vested in him [or her], whether or not such discretion be abused." This is applicable to cases against public entities pursuant to Government Code § 815.2(b). The key issue in determining whether the discretionary immunity applies is whether the act or omission in question was the result of an actual exercise of policy or planning level discretion in which risks and advantages were deliberately weighed and a balance struck. (See Johnson v. State (1968) 69 Cal.2d 782.) If the public employee's act is deemed "ministerial," however, it is not within discretionary immunity. Lopez v. Southern Cal. Rapid Transit Dist. (1985)40 Cal.3d 780. This area has become a continuing source of uncertainty. Several recent cases have been decided in this area. In Ronald S. v. County of San Diego (1993) 16 Cal. App.4th 887,896, 20 Cal. Rptr.2d 418, the court held that Government Code §§ 820.2 and 815.2 immunized the county from liability to a minor for any negligence resulting in his adoption by abusive parents. The court held that the work of the social service employees of the county prior to the adoption constituted discretionary activity and was protected under the immunity provisions of Government Code § 820.2. For a case finding immunity inapplicable, see Wallace v. City of Los Angeles (1993) 12 Cal. App.4th 1385, 1402, 16 Cal.Rptr.2d 113, which held that an officer was not engaged in discretionary act when he minimized the importance of a threatening call made to a witness and decided not to warn or protect the witness. LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco. California 94108 (415) 981-6630 I0 Twin Dolphin Drive. B-500, Redwood City, California 9406:5 (41:5) :591-8822 B. Inspection of Property Public entities are not liable for failures to inspect, or for inadequate or negligent inspection of property (other than its own property) to determine the property's compliance with Health and Safety standards. (Government Code §§ 818.6,821.4.) C. Enforcement or Non-F~nforcement of Law Public employees are not liable for injuries inflicted by their acts or omissions "in the execution or enforcement of any law," while exercising due care. (Government Code § 820.4.) Note, however, that nothing in § 820.4 exonerates a public employee from liability for false arrest or imprisonment or other intentional tort. Nevertheless, the employee may be exonerated through Civil Code § 43.55 and Penal Code § 847. Se_~.e generally Government Code § 820.4 and 821; see also Forrester v. City of San Diego (1994) 25 F.3d 804; Scott v. Henrich (1994) 39 F.3d 912. _ D. Malicious Prosecution Under Government Code § 821.6 public employees acting within the course and scope of employment have personal immunity for liability for the prosecution of administrative or judicial proceedings even if found to have acted maliciously and without probable cause. However, this state tort immunity does not apply to federal civil rights cases brought under 42 U.S.C. § 1983. See Usher v. City of Los Angels (9th Cir. 1987)828 F.2d 556, 561 (complaint stated a cause of action for malicious prosecution under 42 U.S.C. § 1983. The general rule is that a claim for malicious prosecution is not cognizable under 42 U.S.C. § 1983 when process is available in state court to provide remedy. An exception to the general rule exists when there is malicious prosecution conducted with an intent to subject the person to denial of his or her constitutional fights). School district and employees are immune from civil liability arising out of exposure to asbestos contained in buildings on or after January 1, 1989. (Government Code § 905.5.) LOW, BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco. California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-500, Redwood City, California 944365 (415) 5914822 l/I. DANGEROUS CONDrrION OF PUBLIC PROPERTY Ao Plaintiff's Burden of Proof: Elements of Liability Under Government Code § 835, liability in an action against a public entity for an injury, caused by the dangerous condition of public property requires that the following elements be proven: (1) The public property was in a dangerous condition at the time of the injury. (2) The injury to the plaintiff was legally mused by the dangerous condition. (3) The kind of injury that occurred was reasonably foreseeable as a consequence of the dangerous condition; and (4) Either (a) The dangerous condition was created by a public employee's negligent or wrongful act or omission within the scope of his or her employment; or (b) The entity must have had actual or constructive notice of the condition a sufficient time before the injury occurred to have taken reasonable measures to protect against such injury. The court in Curtis v. State (1982) 128 Cal. App.3d 668, 691, 180 Cal. Rptr. 843,856, held plaintiff need not prove that the public entity was both negligent in creating the condition and had notice of the dangerous condition; either negligence or notice is sufficient under Government Code § 835. 1. Dangerous Condition Element Under Government Code § 830(a), a dangerous condition is def'med as "a condition of property that creates a substantial (as distinguished from a minor, trivial or insignificant) risk of injury when such property or adjacent property is used with due care in a manner in which it is reasonably foreseeable that it will be used." In applying this definition to specific cases, a dangerous condition of property can include a public improvement which has become changed, flawed, 'damaged or has LOW. BALL & LYNCH. Attorneys at Law, 601 California Street. San Francisco. California 94108 (415) 981-6630 10 Twin Dolphin Drive. B-500. Redwood City, California 94065 (415) 591-8822 deteriorated to a state that it is potentially dangerous to reasonably foreseeable users. 10 Applying the above definition of condition of property, the following are examples of cases where the property has been determined to be dangerous. A boulevard stop sign that had become obscured by foliage (.De La Rosa v. City of San Bernardino (1971) 16 Cal.App.3d 739, 94 Cal. Rptr. 175); An inadequately maintained road that had crumbled away (Elias v. San Bemardino County Flood Control Dist. ' (1977) 68 Cal. App.3d 70, 135 Cal.Rptr. 621). A mudhole in an improved parking strip (Low v. City of Sacramento (1970) 7 Cal. App.3d 826, 87 Cal. Rptr. 173). A boat launching ramp with a missing plank (Stron~man v. County of Kern (1967) 255 Cal. App.2d 308, 62 Cal. Rptr. 908). Additionally, a condition of property can be determined to be dangerous because of design or location of the improvement. These cas'es involve a non-obvious hidden danger. .~: A non-defective h:_-way overpass rendered dangerous by a negligently issued oversize load permit that routed a truck through the overpass (Hill v. People ex rel. Dep't. of Transportation (1979) 91 Cal. App.3d 426, 154 Cal.Rptr. 142). A sharp curve incorporated into a highway improvement without signs posted warning of the need to reduce speed (Anderson v. City of Thousand Oaks (1976)65 Cal. App.3d 82, 135 Cal. Rptr. 127). A children's sandbox located close to a baseball diamond (Bauman v. City_ & County of San Francisco (1940) 42 Cal. App.2d 144). LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco. California 94108 (415) 981-6630 I0 Twin Dolphin Drive. B-500. Redwood City, California 94065 (415) 591-8822 11 For an example of a recent case in which the court found that a property was not in a dangerous condition see Lompoc Unified School Dist. v. Superior Court (1993) 20 Cal. App.4th 1688, 1691, 26 Cal. Rptr. 122. This case held that the existence of a football field unscreened from and therefore observable to passing motorists did not constitute a dangerous condition merely because a motorist's attention may be drawn to activity on the premises. However, see also, Constantinescu v. Cone]o Valley Unified School Dist. (1993) 16 Cal. App.4th 1466, 1473, 20 Cal. Rptr.2d 734, which had a contrary holding that a jury could reasonably conclude that such an area constituted a dangerous condition. This case specifically involved congestion in a parking lot which resulted in a vehicle jumping a curb and injuring students in an adjacent designated waiting area next to parking lot. 2. Injury Caused by Third Party_ Conduct A public entity is not liable for a dangerous condition of public property based on third party conduct alone. There must be some concurrent contributing defect in the property itself. Pekarek v. City_ of San Diego (1994) 30 Cal. App.4th 909. 3. Element of Use With Due Care In Mathews v. City of Cerritos (1992) 2 Cal.App.4th 1380, 4 Cal. Rptr.2d 16, an eight year old was injured while attempting to ride his bike down a steep, wet, grassy hill in a park. In affirming summary judgment ia the City's favor, on the ground that as a matter of law the park's condition was not a dangerous condition of public property, the court noted that "no reasonable person would conclude the property. created a substantial risk of harm to reasonably foreseeable child users who used the property with the due care expected of children." B. Defenses and Immunities . Public Entity May Assert Defenses Available to Private Defendants a. Assumption of the Risk Given the resurgence of the assumption of the risk doctrine remains, recent cases in this area are applicable to government entity defense. In particular, see Knight v. Jewett (1992) 3 Cal.4th 269 and Ford v. Gouin (1992) 3 Cal.4th 339. b. Comparative Negligence LOW, BALL & LYNCH. Attorneys at Law. 601 California Street, San Francisco. California 94108 (415) 981-6630 10 Twin Dolphin Drive. B-500. Redwood City, California 94065 (415) 591-8822 c. Third Party Negligence Statutory Immunities 12 a. D. esien Immunity' __ A public entity is generally not liable for injuries caused by a dangerous condition of public property if the following three essential elements are satisfied: (1) Causal relatiomhip between the plan or design and the accident; (2) Discretionary approval of plan or design prior to construction; and (3) Substantial evidence supporting the reasonableness of the plan or design (Government Code § 830.6) (Uyeno v. State (1991) 234 Cal. App.3d 1371, 1376, 286 Cal. Rptr. 328, 331). It is an issue of law as to whether design immunity and each of its elements have been satisfied. It is defendant's burden to plead and prove this aff'a'mative defense. Design immunity may not be applicable if there are changed circumstances rendering the design inappropriate (Government Code § 830.6). Thus, in Compton v. City of Santee (1993) 12 Cal. App.4th 591, 15 Cal. Rptr.2d 660, the court held that a showing of changed condition and notice to the public entity is required before the entity loses the immunity under Government Code § 830.6. In this case, the trial court's granting of the City's motion for summary judgment was afl're'ned because the plaintiff presented no factual showing of any change in conditions between the time of the planned approval and the time of the accident. See Morfin v. State (1993) 12 Cal. App.4th 812, 15 Cal. Rptr. 12 861. This case involved a personal injury action against the state alleging unsafe design of a Department of Motor Vehicles building and adjacent parking lot. The Court of Appeal held that the trial court erred in denying the plaintiffs discovery of evidence that could have defeated the state's design immunity defeme under Government Code § 830.6. LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco, California 94108 (415) 981-6630 10 Twin Dolphin Drive. B-500, Redwood City, California 94065 (415) 591-8822 13 b. Traffic Signals, Signs and Markings Under Government Code § 830.4, a condition is not dangerous if the property deficiency relied on by the plaintiff consists "merely... of the failure to provide regulator2,.' traffic control signals, stop signs, yield tight--of-way signs ... speed restriction signs .... or distinctive roadway markings as described in Section 21460 of the Vehicle Code." The public entity., however, loses the protection and is liable for injury when it fails to provide traffic regulatory or warning signals of a type other than those described in § 830.4 which were "necessary to warn of a dangerous condition which endangered the safe movement of traffic and which would not be reasonably apparent to, and would not have been anticipated by, a person exercising due care." Government Code § 830.3; Kessler v. State (1988) 206 Cal. App.3d 317, 332, 253 Cal. Rptr. 537, 539. c. Effect of Weather Conditions on Street Government Code § 831 provides that public entities are not liable under the Tort Claims Act for injuries resulting from the effect of weather conditions on the use of streets and highways, except when the hazard "would not be reasonably apparent to, and would not be anticipated by, a person exercising due care." This immunity is meant to cover fog, rain, wind, flood, ice or snow. However, under Government Code § 831 this immunity does not apply to physical damage or deterioration of the street and highways as a result of weather conditions. This statutory immunity has been held to apply to highway fight-of-ways including sidewalks. d. Natural Conditions of Unimproved Land Government Code § 831.2 provides that injuries caused by "a natural condition of an unimproved public property" are not actionable under the Tort Claims Act. e. Hazardous Recreational Activities Government Code § 831.7 provides that a public entity or public employee is not liable to any person who participates in "hazardous recreational activity" or to any assistant or any spectator for any damage or injury to property or persons arising out of the activity. Hazardous activity has been defined to include diving, archery, animal riding, bicycle racing or jumping, boating, skiing, hang gliding, kayaking, motorized vehicle racing, off-road motorcycling or four-wheel driving, rodeo, LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco, California 94108 (415) 9814630 10 Twin Dolphin Drive. B-500. Redwood City. Californta 94065 (415) :591-8822 14 sk'5.'diving, body contact sports, surfing, tree climbing, tree rope swinging, waterskiing, white water rafting and wind surfing. Thus. the immunity, of Governmem Code § 831.7 has been held to apply to bar liability when a plaintiff dove from a tree stump into a river sustaining injuries when her head hit a concrete structure under the water. The court noted that diving from diving platforms and diving boards is exempt from the meaning of hazardous recreational activity. However, a tree stump is not deemed a diving platform and therefore is not an exception to the application of the hazardous recreational activity immunity. (Berry v. State (1992) 2 Cal. App.4th 688, 3 Cal. Rptr.2d 382.) Additionally, where plaintiff was injured while playing basketball in the junior high school gymnasium it has been held that this was a hazardous recreational activity and therefore governmental immunity of Govemmem Code § 831.7 barred liability. (Yarber v. Oakland Unified School Dist. (1992) 4 Cal. App.4th 1516, 6 Cal. Rptr.2d 437. But see Acosta v. Los Angeles Unified School District (1995) 31 Cal. App.4th 471: Iverson v. Muroc Unified School District (1995) 32 Cal. App.4th 218. Unvaved Access Roads to Recreational Activities Government Code § 831.4 provides that public entities cannot be held liable for physical injuries caused by a physical defect of a trail used for or leading to recreational activities such as hiking, fishing, tiding or camping. See State of California v. Sonoma County Superior Court (1995) 32 Cal. App.4th 325. C. Ha~_oening of Accident Not Evidet,,-e of Dangerous Condition Government Code § 830.5(a) provides that the happening of an accident causing the plaintiff's injury "is not in and of itself evidence that public property was in a dangerous condition." The only exception to this rule is when the docmne of res ipsa loquitur applies. D. Res lpsa lxxtuimr The California Supreme Court, while recognizing that res ipsa loquitur applies to cases against government entities, decided the case of B. rown v. Powav Unified School Dist. (1993) 4 Cal.4th 820, 838, 15 Cal.Rptr. 2d 679, 690. There, the court held that the res ipsa loquitur presumption does not by itself establish a prima facia case of liability against the public entity under Government Code § 835(a). To establish liability under Government Code § 835(a), a plaintiff must show that an employee of the public entity created the dangerous condition (the term "created" LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco. California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-SOO, Redwood City, California 94.065 (415) 591-8822 being defined as the sort of employee involvement that would justify a presumption of notice on the entity's party), which differs from the showing that plaintiff must make under the doctrine of res ipsa loquitur. E. Evidence of Other Accidents or Ab~_nce Thereof While it is not specifically covered in the Tort Claims Act, either the occurrence or lack of occurrence of other accidents at the same location may be admissible evidence on the issue of whether a condition is defective or dangerous. See. Baldwin v. State (1972) 6 Cal.3d 424, 428, 99 Cal. Rptr. 145, 147. This issue is one primarily for the trial court and is pursuant to the trial court's discretion. (Kopfinger v. Grand Central Pub. Market (1964)60 Cal.2d 852.) Evidence of prior but not subsequent accidents may also be admissible to prove actual or constructive notice of the defective or dangerous condition (Genrich v. State (1988) 202 Cal. App.3d 221,248 Cal. Rptr. 303). In Morfin v. State of California (1993) 12 Cal.:xpp.4th 812, plaintiff who collided into DMV building was entitled to introduce evidence of other collisions that motorists had at other DMV buildings. 15 Cl.,AIMS AGAINST PUBLIC ENHI'IISS . Ae Preparation and Pmse___ntntjon c ... 1. Notice of Claim The California Tort Claims Act has codified that, generally, an action for "money or damages" may not be maintained against a public entity unless a written claim has first been timely presented to the defendant and rejected in whole or in part. (Government Code §§ 905,905.2, and 945.4.) Exceptions: Claims involving inverse condemnation, Federal civil rights, University of California. 2. .Purpose of Claims Procedure The purpose of the claims presentation procedure is to give the public entity the opportunity to evaluate the merit and extent of its liability and determine whether to grant the claim without the expense of litigation. (,San Diego Unified Port Dist. v. Superior Court (1988) 197 Cal.App.3d 843,847.) LOW. BALL & LYNCH. Attorneys at Law. 601 California Street, San Francisco. California 94108 (415) 981-6630 I0 Twin Dolphin Drive. B-500, Redwood City, California 94065 (415) 591-8822 16 , Presentation of Claim Prerequisite to Suit Against Public Entitw -- Generally. presentation of claim is mandatory. Failure to file a claim is fatal to claimant's cause of action. (Pacific Tel. & Tel. Co. v. County of Riverside (1980) 106 Cal.App.3d 183, 188, 165 Cal. Rptr. 29, 31: Green v. State Center Community College Dist. (1995) 34 Cal. ApP.4th 1348, 41 Cal.Rptr. 140.) - There must be a claim presented for each plaintiff. (Peterson v. City of Vallejo (1958) 259 Cal. App.2d 757.) Each cause of action that plaintiff is relying on must be reflected in a timely claim. (Fall River Joint Unified School Dist. v. Superior Court (1988) 206 Cal. App.3d 431, 434. 4. Determining the Date of Accrual The general rules of accrual applicable to causes of action generally and for stat'ute of limitation purposes apply with the following exceptions: b. F, auitable Indernni~ A cause of action accrues when plaintiff serves defendant with the complaint giving rise to claim for indemnity against the public entity. (Government Code § 901.) c. .Subrogation Claim Insurer's uninsured motorist claim accrues when insurer makes payment to injured party. (Allstate Ins. Co. v. County of Alameda (1973) 33 Cal. App.3d 418, 421. 109 Cal. Rptr. 53, 55; Greyhound Lines, Inc. v. County_ of Santa Clara (1986) 187 Cal. App. 3d 480.) d. Minors Statutes of limitation have exceptions for minors tolling until the age of majority. However, the claims requirements apply to minors, and must be complied with. Whitfield v. Ross (1974) 10 Cal.3d 874; Du!ardin v. Venture County General LOW, BALL & LYNCH. Attorneys at Law, 601 California Street. San Francisco, California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822 17 Hospital ('1977) 69 Cal. App.3d 350. 358. However, claimant's status as minor provides the basis to file a late claim. e. Delayed Discover3,. Rule In a fraud or medical malpractice case. the accrual date can be the date of "discovery.." Whitfield v, Ross (1974) 10 Cal.3d 874. 5. Deadline to Present Claim a. Six months after the date of injury or damage for claim in action for (Government Code § 911.2)' (1) Personal injuries; (2) Wrongful death; (3) (4) Damage to personal property; and Damage to crops. b. One year from date of accrual for all other claims. (Government Code § 911.2.) For example: (I) (2) (3) Damage to real property; Breach of contract; Equitable estoppel. 6. Date of Presentation Presentation of the claim is deemed completed when it is deposited in the mail or personally delivered. (Govemmem Code § 915.2.) B. Response by Public i~.m.i~ m Claim 1. Deadline For Entity to Act Forty-five days from date of presentation or later if parties agreed in writing. (Government Code §§ 912.4; 913.) LOW. BALL & LYNCH. Atzorneys It /~w, 601 Clliforni~ Street. Sin Frincisco. Clliforni~ 94108 (415) 981-6630 10 Twin Dolphin Drive. B-500. Redwood Cizy, Californi~ 94065 (415) 591-$$22 18 2. Where Claim Allowed Public entity may allow claim by notice of total or partial allowance; or 3. Claim Reiected Public entity can reject claim either wholly or partially by: a. Operation of law if the entity refuses or fails to act within 45 days; or b. Notice of rejection, that must include a warning containing the time limit to file a court action (see Government Code § 913(b)). Be aware that many entities do not give the required written notice for rejection; the claim is deemed rejected as a matter of law after 45 days. See Government Code §§ 912.4(c); 913. Failure to advise of the six month ruling extends the statute of limitations to two years. (Government Code § 945.6(a).) 4. Waiver of Late Claim If notice is not given within 45 days and plaintiff has presented a late claim without a petition for late claim, public entity waives defense as to late claim. (Government Code § 911.3(b).) C. l.~te Clans Pr~c, edu~s 1. Application for late Claim Initial application for leave to present late claim, after a six month period, must be presented within one year. (Government Code § 911.4.) 2. Deadline for Entity_ to Act Public entity has 45 days to grant or deny an application for late claim. (Government Code § 911.6(a).) LOW. BALL & LYNCH. Attorneys at Law. 601 California Street. San Francisco. California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-500, Redwood City., California 94065 (415) 591-8822 19 o If Application for L-ate Claim Denied Seek Relief From Court If the application for late claim is denied by the public entity, claimant may petition court for order relieving claimant from complying with claims requirement within six months of denial by public entity. (Government Code §§ 946.6(a)and (b).) a. Failure to present claim through mistake, inadvertence, surprise, or excusable neglect. _Tackett v. City of Huntington Beach (1994) 22 Cal. Ap.4th 60. 4. If Petition Granted by Court If court grants order dispensing with need to comply with claims requirement, plaintiff will have 30 days to file a complaint. (Government Code § 946.6(f).) V. ACTIONS AGAINST PUBLIC ENTrrlF~ A. Statute of Limitatiortn If timely claim rejected by public entity, plaintiff must t'fie a complaint within either (a) six months after the date of written notice of rejection or inaction by public entity, was personally delivered or deposited in the mail (Government Code § 945.6(a)(1)); or (b) two years from date the cause of action accrued if public entity gives no written notice of rejection. (Government Code § 945.6(a)(2); see also Schmidt v. Southern California Rapid Transit District (1993) 14 Cal. App.4th 23.) B. Pleading Co~iderations Specificitw in Pleading Requirement Liability. against the public entity must be based on statute. Causes of action within the complaint must be pled with particularity showing every fact essential to prove violation of the statute. (Government Code § 815.) For a case in which a demurrer to a Judicial Council form complaint was sustained with leave to amend for failure to allege specific allegations, see People ex tel. Department of Transportation v. Superior Cour[ (1992) 5 Cal. App.4th 1480, 7 Cal. Rptr.2d 498. LOW. BALL & LYNCH, Attorneys at Law, 601 California Street, San Francisco, California 94108 (415) 981-6630 10 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822 Content of complaint must match claim. (Fall River Joint Unified School Dist. v. Superior Court (1988) 206 Cal. App.3d 531.) , , Must Plead Staruto Basis For Liabili Must Allege Claim Presentation. (But see Bohrer v. County of San Diego (1980) 104 Cal. App.3d 155.) C. Malicious Pro~_~oation The plaintiff is absolutely privileged to bring an action against the public entity and therefore even if frivolous or wholly unfounded in fact that action cannot form the basis for a malicious prosecution action by the public entity against a previously unsuccessful plaintiff. (City of Lon~ Beach v. Bozek (1982) 31 Cal.3d 527.) If the facts warrant, however, the public entity may recover sanctions under Code Civ. Proc. § 128.5 which authorizes an award of re~sonable expenses including attorney's fees incurred by a party as a result of bad faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. 20 VI., TRIALdPOST-~~ CONSIDERATIONS · h. Sury_ Fees/Court Reporter F,_~-e~__, .." S. Motion For Reduction of Iud .~.:,t For Collateral Source Pa ems Generally, in a personal injury or wrongful death action in which a public entity is the defendant, any collateral source payments paid or owed to on behalf of a plaintiff is inadmissible. (Government Code § 985(b).) However, after a verdict against the public entity is rendered, and verdict includes damages for which a collateral source has paid part thereof, and if the total amount of collateral source payments is greater than $5,000, the public entity may bring a post-trial motion for a reduction of the judgment by the amount of collateral source payments. (Government Code § 985(b).) Co Post-Verdict Settlement Confe_renee In a personal injury or wrongful death action, following entry of the verdict against a public entity in excess of $100,000, the public entity may request in writing a LOW. BALL & LYNCH. Attorneys at Law, 601 California Street. San Francisco. California 94108 (415) 981-6630 I0 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822 21 mandatory settlement conference for the purpose of discussing available measures by which the judgment may be satisfied. (Government Code § 962.) D. Im'tallment Paymen~ Local public entities are required to pay judgments, with interest, to the extent funds are available for the purpose, in the fiscal year in which they become final. (Government Code § 970.4.) However, if the government body determines that "an unreasonable hardship will result unless a judgment is paid in installments, and the court, after hearing, concurs, the court is required to provide for payments of the judgment, with interest, in not more than ten annual installments of equal amount." (Government Code § 970.6(a).) The rate of interest upon a judgment against a public entity is generally 7%. San Francisco Unified School Dist. v. San Francisco Classroom Teachers Assn. (1990) 222 Cal.App.3d 146. The Public Entity Group of LOW, BALL & LYNCH includes Linda S. Meyer, Steven D. Werth, Patrick E. Taylor, Sr., Mark F. Hazelwood and Dale L. Allen, Jr. LOW, BALL & LYNCH, Attorneys at Law, 601 California Street, San Francisco. California 94108 (415) 981..6630 10 Twin Dolphin Drive, B-500, Redwood City, California 94065 (415) 591-8822