Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC422002, Terry A. Green, Judge.
Law Offices of Lin M. Meyer and Lin M. Meyer for Plaintiff and Appellant.
Robert E. Shannon, City Attorney, Cristyl Meyers, Deputy City Attorney, for Defendant and Respondent.
ALDRICH, J.
Plaintiff and appellant Instant A & A Fire Protection, Inc. (the Company) appeals from a judgment of dismissal in favor of defendant and respondent the City of Long Beach (the City) after the trial court sustained the City’s demurrer to the Company’s amended complaint without leave to amend. The Company installed a fire protection sprinkler system onboard the Queen Mary pursuant to an agreement with the now-bankrupt lessee of the Queen Mary. The Company sought to recover $115,000 for its services from the City on the theory that the City is a third-party beneficiary of the agreement.
We conclude that all the causes of action in the amended complaint fail because the Company did not provide the City with notice of its claim within one year of accrual, as required by the government claims statute. (Gov. Code, §§ 905, 911.2, 945.4.) Therefore, the order of dismissal is affirmed.
FACTUAL AND PROCEDURAL BACKGROUND
Our review of the sufficiency of a complaint against a general demurrer admits all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Thus, the facts set out here are the allegations in the Company’s amended complaint (hereafter referred to as the complaint).
The City is the legal owner of the Queen Mary and leased the Queen Mary to RMS Foundation, Inc. (RMS). The Company’s “agreement” was with the “Queen Mary” to install a fire protection sprinkler system onboard the ship. Neither the City nor RMS is mentioned in the agreement.
The attached exhibit, which the Company refers to as an “agreement” states on its face that it is a “proposal, ” and the “quotation [is] valid for 30 days.”
Beginning in late August through October 25, 2007, the Company repaired and performed work on the Queen Mary’s fire protection sprinkler system. RMS did not pay the Company any part of the $114,948.21 owed for these services.
On January 21, 2008, shortly after the work on the fire sprinkler system was completed, RMS filed for bankruptcy and listed the Company as a creditor, claiming the work performed was a leasehold improvement. Up until January 21, 2008, the Company “believed that the debt would be paid by the City of Long Beach but confronted with RMS Foundation’s action, Plaintiff submitted the claim to the City and began requesting that the City pay the debt.”
The complaint is internally inconsistent and ambiguous in the use of the word “claim.” As alleged, the government claim was presented more than one year later, on March 19, 2009, as noted in the exhibit to the complaint.
On March 17, 2009, the Company’s attorney sent a letter to the City requesting payment and disputing that its services on the Queen Mary constituted a leasehold improvement. As stated in the letter, the Company acknowledged RMS breached the agreement as of January 21, 2008.
On March 19, 2009, the Company also presented a government claim to the City for damages, arising from a breach of the agreement. The government claim listed the date of injury as January 21, 2008. According to the complaint, the City “took no position on whether the work was a leasehold improvement and on whether it had to pay as a third party beneficiary of the contract, until [the City] rejected Plaintiffs’ claims on or about May 1, 2009.” The claim was “rejected by operation of law, ” on May 1, 2009, and the City informed the Company that it had six months within which to file suit on the claim. (Gov. Code, § 945.6.)
When, as here, the defendant is a public entity, such a claim is required under the government claims statute. Government Code section 911.2 requires timely notice to a public entity before commencing a legal action.
1. Pleadings
Within the statutory timeframe, the Company filed suit against the City. The complaint alleges five causes of action against the City: breach of written agreement based upon third-party beneficiary principles (first cause of action), conspiracy to defraud (second cause of action), breach of the covenant of good faith and fair dealing (third cause of action), goods sold and delivered (fourth cause of action), and services had and received (fifth cause of action).
The Company alleged the City is a third-party beneficiary of the agreement and is liable to pay for the Company’s services. The City’s failure to pay for the Company’s services allegedly constituted a breach of the agreement and a breach of the covenant of good faith and fair dealing implied in the agreement. In the alternative, the Company sought to recover from the City under common counts arising from the performance of the agreement.
The Company also sought to recover damages from the City for conspiracy to defraud. The complaint alleged the City was aware RMS was insolvent and conspired with RMS to characterize the fire protection sprinkler system as a leasehold improvement so as to avoid paying the Company, and further conspired with RMS to name the Company as a creditor.
2. City’s Demurrer Sustained Without Leave to Amend
The City filed a demurrer to the complaint. The City contended the complaint was barred for failure to timely present a government claim to the City. Additionally, the City contended that since there was no valid contract with the City, the complaint failed to allege a viable theory of recovery against the City.
The trial court sustained the demurrer without leave to amend, rejecting the Company’s position that the absence of a contract with the City was irrelevant to its contract causes of action based upon third-party beneficiary principles and its conspiracy cause of action.
The Company timely appealed from the judgment following the order of dismissal.
DISCUSSION
1. Standard of Review
The trial court’s decision to sustain a demurrer is a legal ruling subject to our de novo review. When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) When a demurrer is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment. (Ibid.) If the defect can be cured, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. (Ibid.) The burden of proving a reasonable possibility is on the Company. (Ibid.) A judgment based upon an order sustaining a demurrer can be affirmed on the alternate ground raised in the demurrer that the claim is time-barred, even if the trial court did not rely on that ground. (See CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1533.)
2. The Company’s Complaint is Barred by the Failure to Present a Timely Government Claim to the City
Before suing the City, the Company had to present a timely written claim for damages. (Gov. Code, §§ 911.2, 945.4; Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201, 208.) The claim for damages had to be presented to the City not later than one year after the cause of action accrued. (Gov. Code, § 911.2; Lee v. Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 848, 855; see also Westcon Construction Corp. v. County of Sacramento (2007) 152 Cal.App.4th 183, 190.)
Timely claim presentation is “a condition precedent” to maintaining an action against the City, and thus, an element of a cause of action. (Shirk v. Vista Unified School Dist., supra, 42 Cal.4th at p. 209.) A complaint that fails to allege facts demonstrating either that a claim was timely presented or that compliance with the claims statute is excused, is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action. (K.J. v. Arcadia Unified School Dist. (2009) 172 Cal.App.4th 1229, 1238.)
a. The Accrual Date of the Contract Claims (First and Third Causes of Action)
The government claims statutes do not contain a unique definition of accrual. Rather, accrual of the cause of action for purposes of the claims statute is the date of accrual that would pertain under the statute of limitations applicable to a dispute between private litigants. (Gov. Code, § 901; Shirk v. Vista Unified School Dist., supra, 42 Cal.4th at pp. 208-209.)
“As a general rule, a cause of action accrues and a statute of limitations begins to run when a controversy is ripe-that is, when all of the elements of a cause of action have occurred and a suit may be maintained.” (Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1388.) A breach of contract claim accrues at the time of the breach. (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 488.) A breach of the implied covenant of good faith and fair dealing is an allegation arising out of the contract itself and is read into contracts in order to protect the express covenants or promises of the contract. (Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 220.) This cause of action accrued when the contract was breached.
The Company alleged the agreement, which it alternatively argues was believed to be an agreement with the City, or the City is a third-party beneficiary, was breached at the latest on January 21, 2008 when the Company learned RMS was the contracting party and listed the unpaid balance as its obligation in the bankruptcy proceedings. The complaint alleges at that point, the Company submitted its invoice to the City. The government claim, however, was not presented to the City until March 19, 2009 and did not meet the one-year claim presentation deadline.
We do not find persuasive the Company’s arguments that the City can be sued as a third-party beneficiary under this agreement. Civil Code section 1559 provides: “A contract, made expressly for the benefit of a third person, may be enforced by him [or her] at any time before the parties thereto rescind it.” The Company principally relies on the inapposite case, Zigas v. Superior Court (1981) 120 Cal.App.3d 827, in which a third party sued to enforce a valid contract between a public entity and another party. (Id. at pp. 830-831.) Here, we have a party to the agreement (the Company) suing a third-party public entity on an agreement that is void based upon the public entity’s contracting principles. The Company’s other cited cases also are inapposite. (See In re Marriage of Smith & Maescher (1993) 21 Cal.App.4th 100, 105-106 [promisee has right to seek specific performance of contract benefiting third party]; COAC, Inc. v. Kennedy Engineers (1977) 67 Cal.App.3d 916, 920-923 [third party may enforce contract]; see also Mercury Casualty Co. v. Maloney (2003) 113 Cal.App.4th 799, 802-803 [third-party beneficiary had no greater rights than the contracting parties, who were obligated under the terms of the insurance policy to reimburse the insurer for medical expenses from settlement proceeds].)
The Company contends, however, the period for submitting its claim was tolled while the Company and City attempted to resolve the dispute as to whether the fire protection sprinkler system was a leasehold improvement. The Company alleged the dispute was not resolved until May 1, 2009, when the City refused to pay the outstanding balance owed for services performed pursuant to the agreement. This allegation, however, is inconsistent with the exhibits attached to the complaint.
The government claim was presented to the City on March 19, 2009 – almost two months before the Company now alleges its claim against the City accrued. The government claim listed the date of injury (accrual) as January 21, 2008. And, on May 1, 2009, when the City rejected the claim, its denial was by “operation of law, ” without any reference to the reasons for denial. Thus, “to the extent the factual allegations conflict with the content of the exhibits to the complaint, we rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.” (Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.)
We also reject the Company’s argument that the City is estopped from asserting the limitations of the claims statute. Absent from the pleading is any misleading statements about the need for, or advisability of, a claim. (K.J. v. Arcadia Unified School Dist., supra, 172 Cal.App.4th at pp. 1239-1240.) While the Company presents argument on this point, asserting representations by City employees on the characterization of the fire protection sprinkler system as a leasehold improvement, there is no assertion or cited allegation in the complaint that any of these representatives made misleading statements about the need to file a claim for damages as a prerequisite to a lawsuit against the City. Thus, the Company’s contract-based causes of action are barred by the expiration of the time for presenting a claim to the City.
Since the government claim was untimely, we do not address the City’s alternate ground for demurrer in which the City contended it is not bound by any contract unless the underlying contract complies with the requirements of section 1800 of the Long Beach City Charter. We note, however, this court has held the City cannot incur contract liability or quasi-contract liability unless the contract formation provisions of the city charter are satisfied. (Dynamic Ind. Co. v. City of Long Beach (1958) 159 Cal.App.2d 294, 299; see also North Bay Construction, Inc. v. City of Petaluma (2006) 143 Cal.App.4th 552, 564.) As the Supreme Court stated: “ ‘[T]he proposition that a contract with a city is not binding unless formed in accordance with the city charter has been in place in California at least since the time of the Civil War, and is based on analogous authority traceable back to Chief Justice Marshall.’ ” (Amelco Electric v. City of Thousand Oaks (2002) 27 Cal.4th 228, 235, quoting First Street Plaza Partners v. City of Los Angeles (1998) 65 Cal.App.4th 650, 671.)
b. The Accrual Date of the Conspiracy Claim (Second Cause of Action)
Civil “[c]onspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design....” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) To plead a civil conspiracy, the Company must allege three elements: (1) the formation and operation of the conspiracy; (2) wrongful conduct in furtherance of the conspiracy; and, (3) damages arising from the wrongful conduct. (Ibid.) Since civil conspiracy is not an independent tort, there is no civil action unless the wrongful act itself is committed. (Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 574.) Thus, the cause of action accrues when the wrongful act has been committed.
The complaint alleges the wrongful conduct, or last overt act, in furtherance of the alleged conspiracy occurred on January 21, 2008, when RMS fraudulently listed the fire protection sprinkler system as a leasehold improvement. All circumstances relating to the fraud were revealed as of January 21, 2008, thus there is no postponed accrual here. (See Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 786-787.) The government claim was not timely filed within one year of that date. The Company’s cause of action is barred by the expiration of the time for presenting a claim to the City.
The Company’s reliance on cases asserting claims for promissory estoppel against public entities is misplaced. (See, e.g., Swinerton & Walberg Co. v. City of Inglewood-L.A. County Civic Center Authority (1974) 40 Cal.App.3d 98, 103-105 & fn. 7.) The complaint does not allege a promise on the part of the City.
c. The Accrual Date for Common Counts for Goods Sold and Delivered and Services Had and Received (Fourth and Fifth Causes of Action)
In the alternative, the Company has alleged common counts (goods sold and delivered and services had and received) to recover the approximately $115,000 from the City. Even if these causes of action were viable theories of recovery, accrual of a cause of action for services arises upon performance (3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 547, p. 697), and for goods delivered at the time of the last item sold (Code Civ. Proc., § 344).
Government Code section 944 states, “[n]othing in this part imposes liability upon a public entity unless such liability otherwise exists.” “No statute imposes liability on a public entity for debts incurred by a lessee for improving property owned by and leased from the public entity.” (North Bay Construction, Inc. v. City of Petaluma, supra, 143 Cal.App.4th at p. 557.) North Bay held the contractor could not recover for the value of its services based upon quasi-contract theory. (Id. at p. 563; see also Dynamic Ind. Co. v. City of Long Beach, supra, 159 Cal.App.2d at p. 299.) We do not view this as an appropriate case to depart from this well-settled principle of law.
The complaint alleges the work on the fire protection sprinkler system was completed on October 25, 2007. Accrual of the common counts occurred on that date, and the claim submitted was not timely filed within one year. These causes of action are barred by the expiration of the time for presenting a claim to the City.
The Company has not met its burden to show that alleging additional facts would overcome the claims limitations bar under the government claims statute.
DISPOSITION
The judgment entered upon the order of dismissal is affirmed. The City is entitled to recover costs on appeal.
We concur: KLEIN, P. J., KITCHING, J.