Fourth District, Division Sustains Finding That Suit Was Unmeritorious, Frivolous Litigation.
Code of Civil Procedure section 1038 is a potent fee-shifting statute allowing public entities a way to recover the costs of defending against unmeritorious and frivolous litigation. (Kobzoff v. Los Angeles County Harbor/UCLA Medical Center, 19 Cal.4th 851, 857 (1998).) In relevant part, the statute provides that in any civil proceeding under the California Tort Claims Act, the trial court shall, upon motion of the defendant public entity, determine at the time of granting a summary judgment whether or not the plaintiff brought the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint. If not, then the lower court decides the reasonable defense costs (in additional to routine costs) that should be awarded to the prevailing public entity. The next unpublished decision affirmed a fairly good-sized award under section 1038.
Dannemeyer Family Partnership v. City of Fullerton, Case No. G043376 (4th Dist., Div. 3 Dec. 8, 2010) (unpublished) involved a plaintiff family partnership seeking to compel the City of Fullerton to pave a 700-foot unimproved portion of an alley abutting the general partner’s property and to remove various obstructions. The problem was that plaintiff could cite no statutory authority that compelled such action, further complicated by the facts that (1) the germane portions of the alley had been completely unimproved for the 45 years that general partner had lived there, and (2) general partner wanted the City to bear the cost of improving and paving the alley for better access so he had a parking/storage area for his RV/boat (an improvement that would cost between $300,000-$800,000). Summary judgment was granted to the City, with the lower court later awarding its requested defense costs of $67,644.30 under section 1038. Appeal followed.
Plaintiff lost both the merits and fees challenges.
Because the California Torts Claims Act does encompass all suits for money or damages, plaintiff’s suit was within the ambit of section 1038. The good faith element is a factual, subjective determination subject to the substantial evidence review test, whereas the reasonable cause element is objective and subject to de novo review on appeal. (Clark v Optical Coating Laboratory, Inc., 165 Cal.App.4th 150, 183 (2008).) Lack of reasonable cause was shown by the failure to show any statute or other duty-producing law with respect to paving the unimproved alley section. Subjective good faith was in doubt based on the ulterior motive apparently driving the suit in the first place, a factual determination for the lower court to make and one supported by the record.
Dannemeyer was a 3-0 decision authored by Acting Presiding Justice O’Leary on behalf of the Fourth District, Division 3.