Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. No. PC025500 John P. Farrell, Judge; William MacLaughlin, Judge; Howard J. Schwab, Judge.
Harris, Green & Dennison, Lon Harris, Gary L. Green, Robert D. Dennison and Giuseppe Castaldi, for Defendant and Appellant.
Bowman and Brooke, Gregory P. Gilmer and Robert S. Robinson, for Plaintiff and Appellant.
GRIMES, J.
In 1999, Westchester Fire Insurance Company (Westchester) and Schools Excess Liability Fund (SELF) each contributed $2.1 million to a settlement totaling $8 million. In this action, they seek to recover these sums from each other. They both failed in that effort in the trial court and both appeal. We have consolidated these appeals, case Nos. B211596 and B207008, under the latter number for briefing, oral argument and decision. We shall refer to the parties by their proper names and not as appellant or respondent.
This case has been before us in Schools Excess Liability Fund v. Westchester Fire Ins. Co. (2004) 117 Cal.App.4th 1275, a decision in which we reversed an order granting SELF’s motion for summary judgment. The fundamental question then was the same as it is now, i.e., will SELF and Westchester each be able to recoup from the other the $2.1 million they paid in 1999.
The action was tried to the court in two stages.
In Phase 1, the trial court concluded that the policy issued by Westchester did not cover the injury that led to the settlement and therefore found against SELF on its complaint against Westchester. The court made detailed written findings that disposed of Phase 1.
In Phase 2, the trial court concluded that Westchester’s cross-complaint had to be dismissed because Westchester had not filed a written claim prior to instituting its cross-complaint, as required by Government Code section 945.4. The court filed a Statement of Decision regarding Phase 2 and entered a judgment providing that Westchester shall take nothing by its second amended cross-complaint.
The effect of the trial court’s rulings in Phases 1 and 2 was that neither SELF nor Westchester was entitled to recover against the other. We affirm the judgment in all respects.
SELF’S APPEAL
FACTS
1. The accident
The serious injury that started all this was to a wheelchair-bound high school student, Richard Houghton, on a school bus in April 1994. The bus was owned by the William S. Hart Union High School District (the District) and it was operated by Santa Barbara Transportation (SBT); this was one of approximately 40 buses leased from the District by SBT. The bus driver and SBT stipulated in the Houghton lawsuit that the accident was their sole responsibility.
2. The carriers
Westport Insurance Corporation (Westport) provided primary commercial general liability coverage of $3 million to SBT and the driver. Westport is not a party to this appeal but was named as a defendant in SELF’s action, which is described in part 6, post, at page 5.
Westchester, a commercial insurer, issued an excess commercial general liability policy for $12 million to SBT.
SELF is a Joint Powers Authority and a California public entity formed pursuant to the Joint Exercise of Powers Act (Gov. Code, § 6500 et seq.). Under the Joint Exercise of Powers Act, public agencies may make agreements with each other to jointly exercise a power they have in common; this act grants no new powers but merely sets up new procedures for agencies to jointly exercise existing powers. (The City of Oakland v. Williams (1940) 15 Cal.2d 542, 549.) A Joint Powers Agency or Authority is the agency created by the joint powers agreement to carry the agreement into effect.
The Alliance of Schools for Cooperative Insurance Programs (ASCIP) provided the primary public entity liability coverage for the District. Excess public entity liability coverage above ASCIP’s was provided by SELF. For the cost of $900 per bus, the District agreed to include SBT as an additional covered party under its public entity liability coverage with ASCIP and SELF; the coverage limit was at various times either $10 or $15 million. SBT had previously paid $1,700 per bus for insurance.
3. The Westchester policy
The Westchester policy contained a list of specific vehicles under symbol “7” and also provided certain coverages under symbols “8” and “9.” Symbol “7” covers only specifically listed autos. Symbol “8” provides coverage for leased, hired, rented or borrowed vehicles, and “9” covers nonowned vehicles other than leased vehicles. The premium charged for coverages “8” and “9” was a nominal $63 per year. This was so because these two coverages were based on a possible, but not a planned, lease of a vehicle.
4. The history of the Houghton litigation
After the Houghton action was filed and served on SBT and the driver, SBT conferred with the District and turned the defense of the action over to ASCIP, who proceeded over the next four years to defend the action. In 1999, when faced with an unexpectedly high settlement demand exceeding $10 million, ASCIP got SELF actively involved. SELF had been aware of the Houghton action for some years.
With the trial looming in 1999, and encouraged to do so by SELF, SBT demanded coverage from Westport and Westchester. The demand in Westchester’s case was under coverages “8” and “9.” Westchester learned of the Houghton case less than two weeks before the trial date.
Westchester concluded that there was a possibility of coverage under “8” and “9” and this led it to contribute $2.1 to the settlement. The trial court found that Westchester had very little time to decide what to do, that all the defendants seemed to be “wholly unprepared” for trial, and that under the circumstances Westchester acted prudently.
Westport, who refused to defend, contributed $3 million to the settlement. ASCIP contributed $800,000. With $2.1 million each from Westchester and SELF, the settlement came to $8 million.
5. The “Retroactive Endorsement” of 2001
The trial court found that Westchester did not learn until April 2001 that SBT’s president neither intended to get coverage from Westchester nor believed in 1994/1995 that the Westchester excess policy covered the 40 buses leased from the District.
In 2001, SBT and Westchester signed an endorsement entitled “Retroactive Endorsement” that states that the parties did not intend that the Westchester policy cover the buses leased by SBT from the District.
On advice of counsel, before signing the Retroactive Endorsement, SBT obtained an indemnity agreement from Westchester.
6. The instant litigation
SELF filed its action against Westchester on May 24, 2000. SELF’s complaint alleged that Westchester had issued an excess policy in the amount of $12 million, over Westport’s primary policy of $3 million, that the Westchester excess policy covered the Houghton claim and that Westchester was therefore obligated to reimburse SELF the $2.1 million SELF had contributed to the settlement.
Westchester filed its cross-complaint on August 16, 2001. The operative, second amended cross-complaint named only SELF (along with several “Roes”) as a defendant. The cross-complaint sought an award of $2.1 million in favor of Westchester and against SELF as reimbursement for the sum that Westchester paid to fund the Houghton settlement. The cross-complaint also sought a reformation of the Westchester policy to provide that there was no coverage for the Houghton claim under the Westchester policy.
7. The trial court’s conclusion and order
The trial court found that prior to issuing the excess policy, Westchester did not have notice that SBT was operating a fleet of approximately 40 buses on a long-term lease for transportation of the District’s students to school and to special events. The trial court also found that SBT and its broker did not intend to obtain coverage for the leased buses from Westchester, that these buses were not disclosed by SBT to Westchester, and that SBT’s president believed and informed the broker that the leased buses were covered by SELF. The trial court specifically found that there is no evidence that SBT intended to misrepresent facts to Westchester in order to obtain lower premiums and coverage for the leased buses.
The trial court found that all the witnesses were generally credible and that there “was considerable factual congruence from all the testimony and evidence.”
The trial court found: “The Retroactive Endorsement was not a forgery or a back-dating of a document. [¶] The Retroactive Endorsement has no independent legal effect but is simply an unverified proclamation regarding the past intent of SBT and Westchester.”
The trial court concluded that based “upon a finding of mutual mistake of the parties, the Westchester excess policy is reformed to reflect the true, original intent of Westchester and SBT that the fleet of approximately forty school buses owned by [the District] and leased to SBT to transport [District] students are specifically excluded from coverage under the Westchester excess insurance policy.”
The trial court rejected SELF’s defenses of laches, unclean hands and estoppel. The trial also rejected the claim that Westchester had been negligent in partially funding the settlement and concluded that SELF was not prejudiced by the reformation of the Westchester policy.
DISCUSSION
1. General principles
Reformation, governed by statute, is an equitable remedy. (Martinez v. Martinez (1950) 99 Cal.App.2d 425, 428.) In reforming a contract, the court lends expression to what the parties actually intended; the court cannot make a new contract. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524.)
“When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.” (Civ. Code, § 3399.) “In revising a written instrument, the court may inquire what the instrument was intended to mean, and what were intended to be its legal consequences, and is not confined to the inquiry what the language of the instrument was intended to be.” (Civ. Code, § 3401.)
There was the potential under symbol “8” of the Westchester policy that the buses leased from the District might be covered under the policy. For the reasons discussed below, this was not the actual intention of SBT and Westchester, however. Thus, the policy could be reformed to state that it did not cover the buses leased from the District, of which the accident bus was one.
2. SELF’s summary of the facts ignores basic principles
SELF’s approach to the facts, which we find unnecessary to set forth in detail, is to select that testimony and evidence that supports its failed position. This is fundamentally mistaken. “In order to reform a written instrument, the party seeking relief must prove the true intent by clear and convincing evidence. However, the clear and convincing evidence rule applies only at the trial level. On appeal, it is assumed that the trial court applied the proper standard and the judgment will not be upset if there is substantial evidence to support it. [Citation.]” (Shupe v. Nelson (1967) 254 Cal.App.2d 693, 700.)
SELF’s error has two aspects to it. First, SELF’s approach ignores the findings that the trial court, sitting as a court of equity, made in this case and effectively seeks to retry the case in this appeal. Second, SELF ignores the familiar substantial evidence test that governs factual issues on appeal. Under that test, it is of no consequence that there are conflicts in the evidence as long as there is substantial evidence to support the judgment. (See generally 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 365, pp. 421-424.)
We are satisfied that the evidence in this case meets and exceeds the standard set by the substantial evidence test. The salient aspect of the evidence is that it simply makes no sense to think that SBT acquired insurance coverage in addition to the public entity liability coverage with ASCIP and SELF for its fleet of buses leased from the District. It was paying about half of what it had been paying previously for this coverage which had coverage limits that were quite generous. There was simply no reason to buy additional insurance. From Westchester’s viewpoint, the premium of $63 per year for symbols “8” and “9” coverage would have been ridiculous if either symbol “8” or “9” covered a fleet of 40 school buses. There are other facts that strongly support the judgment that we need not restate here. The gist of the matter is that business realities make a compelling case for the proposition that neither Westchester nor SBT ever intended Westchester to cover the fleet of buses leased from the District.
3. SELF was not prejudiced by the reformation
Under Civil Code section 3399 (see fn. 2, ante, at p. 6), a contract may be reformed if this can be done “without prejudice to rights acquired by third persons, in good faith and for value.”
SELF does not meet the statutory test for prejudice. “The rights referred to [in Civil Code section 3399] are rights acquired by a bona fide purchaser for value from one of the parties to the instrument sought to be reformed after the execution of the instrument.” (Baines v. Zuieback (1948) 84 Cal.App.2d 483, 491.) SELF did not purchase anything from Westchester or SBT. In fact, it received the benefit of a $2.1 million contribution by Westchester to the Houghton settlement.
SELF states that it was prejudiced because Westchester had to show “that SELF would have acted and paid the money absent Westchester’s funding the claim.” (Italics in original.) This is a non sequitur. The question is whether the reformation prejudiced SELF, not whether payment by Westchester of $2.1 million had an effect on SELF. Moreover, SELF’s theory of prejudice simply does not conform to the statutory test.
4. Reformation is not barred by laches
“ ‘Laches is dependent not only upon delay, but also upon injury occasioned by the delay.’ ” (Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 459.)
SELF has failed to adduce any evidence, or even an indication, that it was prejudiced by the delay, assuming that the “delay” was the time period from the Houghton settlement in 1999 to the time that Westchester’s cross-complaint seeking reformation was filed in 2001. SELF cannot show that it was prejudiced by this delay since it would not have made any difference if the claim for reformation had been asserted earlier than 2001.
Westchester states that it learned only in April 2001 that SBT’s president did not believe that the Westchester policy provided excess coverage for the fleet of school buses. This appears to be beside the point. The subjective beliefs of SBT’s president are not material when it comes to a coverage determination. Westchester was in as good a position to determine coverage in 1999 as in 2001. Given the time pressures in 1999 when Westchester learned of the Houghton litigation, it was reasonable, as the trial court found, to contribute to the settlement. But once those pressures abated, Westchester could come to a reasoned decision on coverage. While Westchester was in a better tactical position if SBT agreed with Westchester’s coverage determination, this is all that SBT’s position on coverage was worth.
Thus, the delay that matters is the two years that elapsed after the Houghton settlement. The statute of limitations for the reformation of an insurance contract is three years. (North Star Reinsurance Corp. v. Superior Court (1992) 10 Cal.App.4th 1815, 1822.) While the statute of limitations is not necessarily determinative of delay under the laches doctrine, it is nevertheless of some weight that the delay here was less than the statute of limitations. On balance, it cannot be said that the delay in this case was unreasonable. In any event, the absence of prejudice makes the doctrine inapplicable.
5. The evidence of mutual mistake was clear and convincing
SELF contends that there is no clear and convincing evidence that there was a mutual mistake about the exclusion from coverage of the fleet of the buses leased by SBT from the District. Primarily, SELF points to episodic remarks by two SBT witnesses that supposedly show that SBT intended the buses to be covered by the Westchester policy.
We have already pointed out in part 2, ante, at page 7, that there is substantial evidence that supports the finding that neither SBT nor Westchester intended the policy to cover the buses in question. SELF’s contention must be rejected for that reason.
We do not agree with the proposition that there is no clear and convincing evidence of a mutual mistake. This case presents a clear illustration of mutual mistake, although the manner the mistake manifested itself is somewhat unusual.
The initial intention of the parties was clear, as we have explained. Neither Westchester nor SBT ever intended the Westchester policy to cover the fleet of leased buses.
Nonetheless, symbol “8” of the policy covered “those ‘autos’ you lease, hire, rent or borrow.” The fleet of buses was leased; thus, on the face of the policy, it could be said that the buses were covered. That possibility was in fact the reason that Westchester paid $2.1 million. But this was a mistaken interpretation of the policy.
The duration of time that the parties persisted in the mistaken interpretation of symbol “8” is a somewhat unusual aspect of this case but this does not detract from the conclusion that the interpretation given to symbol “8” in 1999 was mistaken. There are cogent explanations for the delay. There is evidence that after the Houghton settlement Westchester and SELF attempted for a while to iron out their differences; this certainly translated into delay. There is also the consideration that Westchester had a difficult decision to make, in that reversing course on a payment of $2.1 million is no overnight affair. Whatever the reason, about two years passed before Westchester went on record as stating that the 1999 interpretation of the policy was in error.
While it is certainly conceivable that Westchester could have acted faster than it did, the delay, as we have noted, caused no prejudice and was in any case not unreasonable. In any event, the delay does not detract from the fundamental fact that the trial court could reasonably have found that it simply made no sense for either SBT or Westchester to have insured the fleet of leased buses.
The action that SELF filed was predicated on the allegation that Westchester had a duty to respond under its policy with SBT to the Houghton claim. Without this essential fact, SELF had no case against Westchester. Thus, Westchester was entitled to judgment in SELF’S action.
The court’s written findings on Phase 1 terminate with the recitation that “IT IS HEREBY ADJUDGED AND ORDERED” that the Westchester policy is reformed to state that the 40 school buses leased to SBT are “specifically excluded from coverage under the Westchester excess insurance policy.” We deem this to have been a judgment against SELF in its action against Westchester.
WESTCHESTER’S APPEAL
FACTS
1. The government claim
On May 30, 2000, Attorney Gregory M. Heuser, counsel for Westchester, sent a letter addressed to ASCIP, the District, and Bob Stewart (a claims representative for SELF employed by third party administrator McLerens Toplis) which stated that since Westchester and SELF had been unable to resolve the “remaining issues” arising from the funding of the Houghton settlement, “enclosed is a Notice of Claim Against a Public Entity, (per Government Code Section 905 et seq.) advising that Santa Barbara Transportation and/or its insurers present a claim for breach of contract against [the District] and reformation of the ASCIP and SELF policies.”
Enclosed with this letter was a document captioned “CLAIM AGAINST PUBLIC ENTITY” and headed “TO: WILLIAM S. HART UNION HIGH SCHOOL DISTRICT.” The document stated that SBT “hereby makes a claim against [the District] and its insurance program provided by [ASCIP] and [SELF]” for the sum of $5.1 million and for reformation of the coverages issued by ASCIP and SELF. (The claim did not refer to reformation of Westchester’s policy with SBT.) The document describes various terms of a Transportation Agreement between SBT and the District (under which SBT was to be included as an additional covered party under the District’s insurance program with ASCIP and SELF) and recites the circumstances of the Houghton litigation and settlement (under which SBT and/or its insurance carriers pledged $5.1 million in settlement). The document then states that, after the settlement was reached, SELF advised that the coverage the District obtained from SELF “was excess over any other insurance obtained by SBT” and did not apply for the sole negligence of additional covered parties. The document closes by stating that “SBT and/or its insurers have been required to make payments” of $5.1 million “which should have been made by the DISTRICT, ASCIP or SELF absent the DISTRICT’s breach of the original Transportation Agreement by failing to obtain the insurance coverage required thereunder.”
Copies of Heuser’s letter (per “cc”) were sent to four parties, including outside legal counsel for SELF (Jeffrey A. Swedo).
2. SELF’s reactions to Heuser’s letter of May 30, 2000
SELF’s executive director testified that he did not recall one way or the other whether he ever received Heuser’s letter or a copy of it.
Months later, on October 13, 2000, Swedo, SELF’s counsel, wrote Heuser, transmitting a copy of SELF’s complaint, and inquiring whether Heuser would accept service on behalf of Westchester. This letter goes on to state: “I will make arrangements to have the government tort claim you have filed denied so that you can file an appropriate cross-complaint, should you choose to do so.”
Westchester answered SELF’s complaint without filing a cross-complaint. When Westchester later sought to file a cross-complaint (in the summer of 2001), SELF opposed the filing on the ground that it was untimely. The declaration under penalty of perjury by SELF’s counsel (Swedo), dated July 16, 2001, filed in support of the opposition, states among other things that Swedo and Heuser conversed prior to the filing of SELF’s action (in May 2000), as well as afterwards, about Westchester’s “inchoate claim for reimbursement of $2.1 million from SELF.” Swedo explains that when he filed SELF’s complaint, he anticipated that, if Westchester wanted to assert its claim, it would have to do so by compulsory cross-complaint, but Westchester answered without doing so and he thought Westchester “had opted not to pursue its claims.” When Heuser asked him to stipulate to late filing of the cross-complaint, Swedo refused to do so, and when he asked Heuser why Westchester had not filed a cross-complaint when it answered SELF’s suit, Heuser responded that Westchester had made a tactical decision not to bring a cross-complaint. In the course of Swedo’s declaration, he points out that “Westchester submitted a governmental tort claim to SELF dated May 30, 2000.” Attached as an exhibit was a copy of Heuser’s letter of May 30, 2000.
SELF’s answer to the operative cross-complaint alleges as one of several affirmative defenses that Westchester failed to file a timely claim under the Government Claims Act against SELF.
We follow the practice adopted in City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 734, of referring to the claims statutes as the “Government Claims Act.”
THE TRIAL COURT’S RULING
The trial court ordered the parties to file cross-motions for judgment pursuant to Code of Civil Procedure section 631.8 (motion for judgment) on the issue of the requirement of a claim under the Government Claims Act. The parties complied; the court granted SELF’s motion and denied Westchester’s motion.
The court filed a statement of decision. The court found that SELF is a public agency, that Westchester’s claim was one for money and damages, and that a claim was required pursuant to Government Code section 945.4.
The court found that Heuser’s letter of May 30, 2000, was not an adequate claim directly against SELF for reimbursement of the $2.1 million paid in the Houghton settlement. The letter was addressed to the District. “It gives no notice of a direct and independent claim for money against SELF, as opposed to making a claim against the District which might compel SELF to step in and defend.” The letter was written by Westchester’s insurance counsel (Heuser) on behalf of SBT, but the evidence was that SBT had never authorized Heuser’s letter.
The court found that the evidence was that Heuser’s letter was never filed with, or presented to, SELF’s board. “In this case we are not dealing with some hapless citizen who does not know the true name of the entity or its status. Instead, we have a major insurance company which is represented by counsel and which should be expected to file a separate claim with each public entity against which it asserts a claim and intends to sue for money. A contrary rule would lead to chaos in complex multi-defendant cases.” The court rejected Westchester’s contention that Westchester had substantially complied with the claims statute.
The court took note of Swedo’s statement that “Westchester submitted a governmental tort claim to SELF dated May 30, 2000” in his declaration. The court ruled that this was not a formal admission but merely part of a recitation of events, prepared for the purposes of opposing the filing of the cross-complaint. “It was made by counsel rather than a party, and was not a formal admission or testimony on the issue of whether the claim was filed. It does not constitute a judicial admission binding on SELF.”
DISCUSSION
1. Westchester’s claim for $2.1 million is subject to the Government Claims Act
Government Code section 905 provides that all claims for money against a local public entity (with exceptions inapplicable here) must be presented to that entity in accordance with the procedures set forth in Government Code section 900 et seq.
Westchester’s cross-complaint seeks, under various theories, an award of $2.1 million to Westchester to be paid by SELF. This is a claim for money and therefore it is subject to Government Code section 905.
2. Westchester was required to present a claim to SELF
Government Code section 945.4, which we set forth in full in the margin, requires the presentation of a written claim to the public entity as a necessary predicate for the filing of a legal action. The mandatory nature of this requirement has been noted in many decisions. The latest authoritative statement of this rule is found in City of Stockton v. Superior Court, supra, 42 Cal.4th at pages 737-738. Westchester was required to present its claim “not later than one year after the accrual of the cause of action.” (Gov. Code, § 911.2, subd. (a).)
“Except as provided in Sections 946.4 and 946.6, no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of this division until a written claim therefor has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board, in accordance with Chapters 1 and 2 of Part 3 of this division.” (Gov. Code, § 945.4.)
The parties appear to agree that Westchester’s cause of action accrued at the time of the final payment to Houghton, which was apparently made on June 29, 1999.
3. Heuser’s May 30, 2000 letter and notice did not comply with the Government Claims Act
a. Government Code section 915
Government Code section 915 governs the presentation of a claim to a local public entity. Two points are relevant:
1. A claim “shall be presented” to the entity either by delivering it “to the clerk, secretary or auditor thereof” or by mailing it “to the clerk, secretary, auditor, or to the governing body at its principal office.” (Gov. Code, § 915, subd. (a).)
2. If a claim is not delivered or mailed as just stated, the claim is nonetheless deemed to have been presented in compliance with section 915 “if it is actually received by the clerk, secretary, auditor or board of the local public entity... within the time prescribed for presentation thereof.” (Gov. Code, § 915, subd. (d).)
In other words, Westchester was required to deliver or mail its claim to SELF’s clerk, secretary, auditor, or governing body no later than one year after the claim accrued (by June 29, 2000) or, if not so delivered or mailed, the claim was required to have been “actually received” by the clerk, secretary, auditor or board by that date.
As the trial court observed, Westchester did not deliver or mail its claim to the clerk, secretary, auditor or board of SELF. Instead, Westchester mailed the notice--which indicated in its heading that it was a notice to the District--to Bob Stewart, SELF’s claims representative, with a copy to Swedo, the outside legal counsel handling the Houghton litigation, neither of whom is among the persons designated by the statute to receive such notices. Nor is there any evidence that the clerk, secretary, auditor or board of SELF actually received Heuser’s May 30, 2000 letter by June 29, 2000. For this reason alone, Westchester failed to comply with the notice requirements of the Government Claims Act.
As described in the text, the trial court also concluded that the claim was inadequate as to SELF, because it was addressed to the District, purported to be a claim for breach of contract against the District and for reformation of ASCIP and SELF policies, did not state that Westchester was entitled to equitable indemnity or contribution from SELF, and sought $5.1 million (rather than the $2.1 million Westchester expended). We need not address these additional defects in Westchester’s claim.
b. Westchester’s contentions
Westchester suggests several bases for concluding that the lack of compliance with statutory requirements for presentation of its claim to SELF should not be fatal. None of them resuscitates the claim.
(1) The contention that the purposes of the claim-filing requirement were met
Westchester contends that the purposes of the claim-filing requirement were met in this case, because SELF had actual knowledge of Westchester’s claim at the time of the Houghton settlement (when Swedo agreed with the court’s observation that the insurance carriers would fund the settlement and then “fight it out among themselves”), long before Westchester delivered its notice of claim. Westchester also claims that this agreement to “fight it out among themselves” was “an implied in fact contract... to waive the claim notice requirement of the Act....” We think not.
It is true, of course, that the purposes for the claim-filing requirement, recited in many precedents, are to give notice to the public entity so that it has a timely opportunity to investigate and determine the facts, an opportunity to settle claims with merit and avoid unnecessary litigation, and information on potential liability so it can prepare for the next fiscal year. (Bettencourt v. Los Rios Community College Dist. (1986) 42 Cal.3d 270, 279.) But we know of no principle of law and no case stating that, so long as the purposes of the statute are met, the statutory claim-filing requirements need not be followed. If that were so, litigation would proliferate on the issue of “actual knowledge” in every case where a claim is not presented in conformity with the statutory requirements. That is not the law, nor should it be. This is particularly so in the case of a major company represented by counsel; as the trial court observed, “we are not dealing with some hapless citizen who does not know the true name of the entity or its status.” In short, the notion that outside counsel for a public entity could bind the entity by “implicitly waiv[ing] the requirement that Westchester file a notice of claim under the Act” is, in the vernacular, a non-starter.
(2) The contention Westchester had no obligation to file a claim
Westchester next argues it had no obligation to file a claim because, under People ex rel. Dept. of Parks and Recreation v. West-A-Rama, Inc. (1973) 35 Cal.App.3d 786 (West-A-Rama), when a public entity has sued a defendant on a contract, the defendant may cross-complain for damages on the same contract without complying with the claim statutes. (Id. at p. 794 [“it is manifestly unjust to allow State to bring a suit upon a contract and then to use what amounts to a notice statute to shield itself from a cross-complaint asserted by the defendant in the same suit and arising from that very contract”].) Recognizing, as it must, that SELF did not sue Westchester on a contract, Westchester claims the same rule should apply to equitable actions (such as equitable subrogation) seeking monetary recovery, and asserts that the decision in Krainock v. Superior Court (1990) 216 Cal.App.3d 1473 (Krainock) supports its contention. It does not.
Krainock was a tort claim in which the court accepted the principle that “manifest injustice” could arise in a tort action as well as in a contract action, “where a cross-complaint is defensive and is filed in response to an initiation of action by a public entity....” (Krainock, supra, 216 Cal.App.3d at p. 1478.) The court adopted three rules “for determining the applicability of claims requirements to defensive cross-complaints.” (Ibid.) First, “the situations in which claims requirements would not apply should be limited to those cases initiated by the public entity....” (Ibid.) Second, “the defensive pleading... must arise out of the same transaction or event forming the basis of the [public entity’s] claim and may not introduce an unrelated claim.” (Ibid.) And third, “the cross-complaint may assert only defensive matter. That is, a cross-complaint may be filed without a governmental claim as a prerequisite if it is limited to claims ‘... which, if successful, would destroy or diminish the [public entity’s] recovery, but not to claims for affirmative relief.’ ” (Ibid.)
It is apparent that Westchester’s cross-complaint was neither a contract claim (the West-A-Rama principle) nor a tort claim “assert[ing] only defensive matter” (the Krainock principle). Westchester sought affirmative relief--the recovery of $2.1 million from SELF--and was not merely seeking to “destroy or diminish [SELF’s] recovery....” (Krainock, supra, 216 Cal.App.3d at p. 1478.) Accordingly, there is no legal basis for Westchester’s assertion that it had no obligation to present a claim to SELF before filing its cross-complaint.
(3) The contention Westchester substantially complied with the statutory requirements
Westchester argues at length that it substantially complied with the statutory requirements, arguing its notice was timely, and the contents of the notice and other evidence pre-dating the notice showed that SELF (through its claims representative and its outside lawyer) “was aware” of the dispute and Westchester’s position. But what Westchester does not do, has not done, and apparently cannot do is to show substantial compliance with Government Code section 915, which requires delivery or mailing to SELF’s “clerk, secretary, auditor, or to the governing body....” (Gov. Code, § 915, subd. (a).) Westchester’s arguments that SELF “was aware” of the claim ignore the fact that the substantial compliance doctrine is “codified in section 915, subdivision (c).” (Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 901 [“substantial compliance under the statute demands that the misdirected claim be ‘actually received’ by the appropriate person or board”].) Here, as discussed in part 3.a., ante, at pages 15 to 16, there is no evidence in the record demonstrating that Westchester’s claim was actually received by SELF’s clerk, secretary, auditor or governing body.
Westchester attempts to avoid the clear statutory requirements by arguing that the notice of claim was properly served on SELF under principles of agency law, and that the knowledge of SELF’s claims representative (Bob Stewart, who received the notice but did not convey it to SELF) was imputed to SELF. But we know of no legal tenet (and Westchester offers none) that would permit us to apply general principles of agency to supersede express statutory requirements specifying the persons who must receive a government claim. Because Westchester did not comply with those requirements, the trial court properly concluded its claim was barred.
Westchester also contends, in connection with its claim of substantial compliance with the Act, that SELF is bound by its attorney’s “judicial admission” that SELF received Westchester’s notice of claim. This refers to Swedo’s letter of October 13, 2000, stating that “I will make arrangements to have the government tort claim you have filed denied so that you can file an appropriate cross-complaint, should you choose to do so, ” and to his declaration in July 2001 stating that Westchester “submitted a governmental tort claim to SELF dated May 30, 2000.” But neither Swedo’s letter nor his declaration addresses the pertinent point, which is whether any person designated in the statute received Westchester’s notice within the statutory period (or at all). Nothing in Swedo’s statements indicates that he, or anyone else, forwarded Westchester’s notice to any person designated in the statute, nor do those statements indicate that any such person “actually received” the notice “within the time prescribed for presentation thereof.” (Gov. Code, § 915, subd. (d).) (Indeed, Swedo’s letter of October 13, 2000, indicating he would arrange to have the claim denied, does not conform with the statute, under which a claim is denied by operation of law if the public entity’s board fails to act on it within 45 days of presentation (which occurred here, according to Westchester, on May 30, 2000).) In short, we can find no fault in the trial court’s conclusion that Swedo’s declaration “was not a formal admission, ” and that a contrary conclusion would “raise[] the specter of contract litigation counsel waiving retrospectively and perhaps erroneously or through misinformation the requirements of the [Government] Claims Act.”
The board (the governing body of the local public entity) must act on a claim “within 45 days after the claim has been presented.” (Gov. Code, § 912.4, subd. (a).) If the board fails to do so, the claim “shall be deemed to have been rejected by the board on the last day of the period within which the board was required to act upon the claim.” (Id., subd. (c).) The parties may extend the 45-day period by written agreement. (Id., subd. (b).)
The trial court also pointed out, correctly, that Swedo’s declaration “did not directly deal with any existing issue concerning filing of a claim, but instead was a recitation of events, including the claim, for the purpose of demonstrating Westchester’s delay in filing a cross-complaint.”
(4) The contention SELF waived defects in the claim by failing to give Westchester notice of the deficiency
Government Code section 910.8 requires the board of a public entity to give a claimant notice of a defective claim, and the defect is waived if the board fails to do so. (Gov. Code, § 911.) Specifically, section 910.8 states that:
“If, in the opinion of the board or the person designated by it, a claim as presented fails to comply substantially with the requirements of Sections 910 [governing the contents of a claim] and 910.2 [governing the signing of the claim], ... the board or the person may, at any time within 20 days after the claim is presented, give written notice of its insufficiency, stating with particularity the defects or omissions therein.”
If the board or its designee fails to give notice of insufficiency as provided in Government Code section 910.8, “[a]ny defense as to the sufficiency of the claim based upon a defect or omission in the claim as presented is waived....” (Gov. Code, § 911.)
Westchester argues that SELF “never denied or otherwise responded to Westchester’s Notice” and therefore, under Government Code sections 910.8 and 911, waived its defenses to the sufficiency of Westchester’s claim. But where there is no showing that the board (or any statutorily designated person) ever received Westchester’s notice of claim, it is absurd to contend that the board should have given notice of its deficiency. There can be no duty to give notice of defects in a claim that was never validly filed with the person or entity charged with assessing its sufficiency.
(5) The contention SELF is equitably estopped from asserting that Westchester was required to comply with the Government Claims Act
Finally, Westchester complains that the trial court failed to address its claim that SELF, based on its “unconscionable conduct, ” should be equitably estopped “from asserting Westchester was required to comply with the Act’s requirements in the first instance.” Westchester’s theory is that SELF’s bad faith conduct misled Westchester into believing “that filing a claim against SELF would not be necessary.” We disagree.
The trial court did address Westchester’s argument that Swedo’s statements in his letter and declaration constituted judicial admissions and estopped SELF from asserting that Westchester failed to file a timely claim. In addition to finding Swedo’s statements were not judicial admissions, the court stated that, in any event, statements that Swedo made many months after the June 29, 2000 one-year deadline for filing a government claim could not have affected Westchester’s failure to file a claim on time; “[t]here was no misleading and there was no reliance, justifiable or not on the acts of SELF. There is no basis for estoppel.”
“A public entity may be estopped from asserting the limitations of the tort claims statutes where its agents or employees have prevented or deterred the filing of a timely claim by some affirmative act. The required elements for an equitable estoppel are: (1) the party to be estopped must be apprised of the facts; (2) the party to be estopped must intend his or her conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) the other party must rely upon the conduct to his or her injury.” (Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1785.)
Here, nothing SELF did prevented or deterred the filing of a timely claim. Indeed, Westchester obviously knew something about government claims requirements, since it mailed or delivered the document at issue in this case to the District (albeit, so far as SELF is concerned, not to any person designated by the statute). Thus, Westchester cannot claim it was ignorant of the statutory requirement to file a claim. Nor is there any evidence that anyone at SELF told anyone at Westchester that it was unnecessary to comply with the Government Claims Act. Westchester again relies on statements from SELF’s outside counsel, this time Swedo’s statements at the Houghton settlement hearing in April 1999 (where Swedo agreed with the trial judge’s statement that SELF and Westchester would “fight this out among themselves”) and a May 5, 1999 letter to Westchester’s coverage counsel (stating that if a reasonable conclusion to funding of the settlement could not be negotiated by the end of May, “we may request Westchester’s stipulation to accept a binding arbitration in June to resolve the coverage issues”). We cannot see how these statements can conceivably be construed as misleading Westchester--a “major insurance company... represented by counsel, ” not a “hapless citizen”--into believing it was unnecessary to file a claim. Principles of equitable estoppel do not apply here.
DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
I concur: BIGELOW, P. J.
RUBIN, J. – Concurring and Dissenting
I concur in that part of the majority’s opinion on the appeal by Schools Excess Liability Fund (SELF) but respectfully dissent from that part of the opinion on the appeal by Westchester Fire Insurance Company (Westchester). In my view, Westchester substantially complied with the Government Claims Act and, in any event, SELF’s litigation conduct estops it from contending otherwise. I would reverse the judgment against Westchester on its cross-complaint.
Although the majority has described many of the essential facts giving rise to the present dispute, further factual explication, I believe, is warranted. Sometime in 1999, the underlying tort claims of Richard Houghton against the William S. Hart Union High School District (District) and its bus driver were ready for trial. It was in this environment that, presumably out of self interest, SELF belatedly encouraged the District to demand coverage from Westchester (and another carrier, Westport Insurance Corporation, not involved in this appeal). Westchester had issued an excess general liability policy to another party, Santa Barbara Transportation. Prior to this demand, Westchester had had no involvement in the underlying litigation.
Even though the trial court later found that Westchester had no coverage obligations and the insurance contract was reformed accordingly – findings we affirm today in the SELF appeal – Westchester decided to contribute $2.1 million to an $8 million settlement paid to Houghton. Westport, ASCIP (a school cooperative insurance program) and SELF contributed the remainder of the $8 million. As the majority points out, “The trial court found that Westchester had very little time to decide what to do, that all the defendants seemed to be ‘wholly unprepared’ for trial, and that under the circumstances Westchester acted prudently.” (Maj. Opn., at p. 4.) There is some suggestion that Westchester may have had as little as 10 days to assess whether the insurance it had issued actually covered the Houghton accident. In announcing the settlement in open court on April 16, 1999, counsel stated on the record that all insurance carriers – specifically naming SELF and Westchester – “reserve rights as against each other.” As the court described this latter point: “In other words, the carriers agree to fund the settlement and then, if necessary, they can fight it out among themselves somehow.”
Although perhaps not truly insurance carriers, SELF and ASCIP functioned as such in providing coverage for school entities.
This brings us to the year 2000. The underlying litigation had concluded and, as foreshadowed at the settlement conference the previous April, the various insurance carriers were considering their respective indemnification claims and obligations.
On May 24, 2000, SELF filed its complaint against Westchester and Westport. SELF’s complaint was for declaratory relief and equitable subrogation, contribution and indemnity. The collective claims are nicely summarized by this language, found in the operative second amended complaint’s paragraph six: “SELF is seeking reimbursement from Westchester and Does 1-100 of the $2,1000, 000 it advanced, subject to rights of reimbursement, to facilitate settlement of the underlying action. SELF was required to do this because Defendants wrongfully and unreasonably, would not contribute the necessary sums on behalf of their insureds to fund the settlement.”
Westport’s presence in the litigation does not appear to have any bearing on the issues presented in this appeal. The majority does not suggest otherwise.
On May 30, 2000, Attorney Gregory M. Heuser, counsel for Westchester, sent a letter addressed to ASCIP, the District, and SELF’s claims representative, Bob Stewart, who was employed by a third party administrator. Although written on the heels of SELF’s recently filed lawsuit, Heuser’s letter was not in “response” to the complaint. That complaint would not be served on Westchester for another five months, on October 27, 2000. Heuser’s letter enclosed a “Notice of Claim Against a Public Entity.” The claim, although written “TO:” the District, stated that Westchester’s insured was making a claim against: (1) the District, (2) ASCIP, and (3) SELF. The claim was for: (1) the sum of $5.1 million, (2) reformation of the ASCIP Memorandum of Coverage; and (3) reformation of the SELF Memorandum of Coverage. Heuser sent “carbon copies” of the letter to four attorneys, one of whom was Jeffrey A. Swedo, SELF’s outside counsel in the underlying Houghton litigation. By the time Heuser wrote the May 30, 2000 letter, it had been five years since Houghton had filed the underlying lawsuit.
Neither party fully explains how Westchester arrived at the $5.1 million figure. It may have been a typographical error, although perhaps not, as “$5.1 million” is mentioned twice in the claim. The operative second amended cross-complaint seeks damages in the amount of $2.1 million, the amount of Westchester’s contribution to the Houghton settlement. SELF suggests the $5.1 million may be the sum of Westchester’s $2.1 million payment and Westport’s $3 million contribution, but does not develop the discrepancy into a substantive legal point.
Thus, in May of 2000, both SELF (by its complaint) and Westchester (by its Government Claim) appear to have been engaged in the beginnings of what would become a more contentious dispute. That dispute would lead to a determination of whether either or both of them unnecessarily paid the respective $2.1 million each had contributed to the Houghton settlement.
The record does not tell us much of what happened between May, when the complaint was filed and the Heuser letter was sent, and October, when the complaint was filed. We do know that on October 13, 2000, matters had developed to the point that SELF had decided to pursue its unserved complaint against Westchester. On that date, Swedo, SELF’s outside counsel and lead attorney in the lawsuit filed against Westchester, wrote Heuser a letter. The letter, under the caption “Schools Excess Liability Fund [SELF] v. Westchester Fire Insurance Company, et al. Our File No. 30351, ” states the following:
(1) “Enclosed is a Notice of Acknowledgement of Receipt and a copy of the summons and complaint in this action. Please advise us as to whether you will accept service on behalf of your client”; and
(2) “I will make arrangements to have the government tort claim you have filed denied so that you can file an appropriate cross-complaint, should you choose to do so.” (Italics added.)
The complaint was eventually served, and, on November 15, 2000, Westchester filed its answer. It did not immediately file a cross-complaint seeking reimbursement from SELF for the $2.1 million Westchester had paid in the Houghton settlement. Not until June 29, 2001, did Westchester seek leave to file its cross-complaint for the $2.1 million. In its moving papers, Westchester explained that it was only after it had filed its answer that additional investigation revealed grounds for Westchester to seek reformation of the underlying insurance contract with Santa Barbara Transportation. Reformation would have eliminated the contractual basis for Westchester’s $2.1 million contribution to the Houghton settlement. SELF opposed the belated filing of a cross-complaint although it acknowledged Westchester’s stated reasons for the motion: the “recently discovered grounds for reforming the policy it issued to Santa Barbara Transportation.” The trial court granted leave, and the cross-complaint was filed.
SELF stated in its opposition to the motion that it was not until the deposition testimony of the president of Santa Barbara Transportation that Westchester claimed to have fully understood the potential availability of a reformation action.
Significant for the present appeal is what SELF did and did not do in opposing the filing of the cross-complaint. It did not contend that Westchester had not filed a government claim. It argued instead that because it had been over a year since SELF had filed the complaint, the last minute cross-complaint was prejudicial to SELF. In its opposition papers, SELF stated the following:
●At the time the Houghton litigation was settled, “Westchester specifically contended that SELF had the obligation to reimburse it for its portion of the Houghton settlement.”
●Westchester “filed a governmental tort claim last May [2000]....”
●“Westchester’s cross-complaint is merely an attempt to pursue its previously-filed tort claim through judicial process.” (Italics added.)
●“Westchester submitted a governmental tort claim to SELF dated May 30, 2000.”
The only fair reading of the position SELF took before the trial court is that it was unjust to allow a cross-complaint to be filed so late in the process when Westchester obviously had known of its claim for over a year because Westchester had presented that claim to SELF. SELF did not assert the claim was untimely.
These facts, in my view, lead to the following conclusions: (1) Westchester substantially complied with the Government Claims Act. (2) SELF is estopped from claiming that Westchester did not comply with the act.
1. Westchester substantially complied with the Government Claims Act
Some 20 years ago, our colleagues in Division 3 reminded us that, although the Government Code creates several hurdles to a citizen’s ability to pursue a government claim, those hurdles should be viewed in light of the law’s purpose. “The claims statutes should not be used as traps for the unwary where their purpose has been satisfied, and to that end, courts employ a test of substantial compliance rather than strict compliance in evaluating whether a plaintiff has met the demands of the claims statutes.” (Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 899 [holding no substantial compliance in that case].) Stated conversely, “The old doctrine of strict and literal compliance, with its attendant harsh and unfair results, has disappeared from California law.” (Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1778.)
More recently, our Supreme Court reaffirmed this principle, noting several mechanisms for avoiding the harsh results of literal application of government claims statutes. “As an initial matter, we note that the Legislature has provided numerous ways to obtain relief from the claim presentation requirement. For example, [Government Code] sections 911.4, 911.6, 911.8 and 946.6 contain a detailed scheme permitting litigants to petition the public entity and the court for leave to present a late claim. Sections 910.8 and 911 also require public entities to alert a claimant to any deficiencies in his claim or waive any “defect or omission in the claim as presented’ (§ 911). Moreover, a plaintiff need not allege strict compliance with the statutory claim presentation requirement. Courts have long recognized that ‘[a] claim that fails to substantially comply with [Government Code] sections 910 and 910.2, may still be considered a “claim as presented” if it puts the public entity on notice both that the claimant is attempting to file a valid claim and that litigation will result if the matter is not resolved.’ [Citation.]” (State v. Superior Court (Bodde) (2004) 32 Cal.4th 1234, 1245; see also Elias v. San Bernardino County Flood Control Dist. (1977) 68 Cal.App.3d 70; Insolo v. Imperial Irrigation Dist. (1956) 147 Cal.App.2d 172.)
In my view, Westchester has met the standard set out in these opinions. I note, first, that SELF does not argue that the Claim Against Public Entity dated May 30, 2000, was not presented timely. A government claim of this sort must be made within one year of its accrual. (Gov. Code, § 911.2, subd. (a).) The claim here is based upon payments that Westchester made in July and August 1999, within one year of the May 30, 2000, claim. The majority acknowledges that the parties’ agree the claim was timely. (Maj. Opn., at p. 15, fn. 5.)
Second, the claim expressly identifies SELF. The majority states that an “additional defect[]” in the government claim was “that the claim was inadequate as to SELF, because it was addressed to the District, purported to be a claim for breach of contract against the District and for reformation of the ASCIP and SELF policies....” (Maj. Opn., at p. 16, fn. 6.) As noted, it is correct that the District is the only entity listed in the “TO:” line. But the opening paragraph of the claim itself states:
“SANTA BARBARA TRANSPORTATION (hereinafter “SBT”) hereby makes a claim against WILLIAM S. HART UNION HIGH SCHOOL DISTRICT (hereinafter “DISTRICT”) and its insurance program provided by ALLIANCE OF SCHOOLS FOR COOPERATIVE INSURANCE PROGRAMS (hereinafter “ASCIP”) and SCHOOLS EXCESS LIABILITY FUND (hereinafter “SELF”) for:”
Contrary to the majority opinion, the claim for reimbursement of $5.1 million is not limited to the District. The monetary claim stands alone as item “a)” of the claim; it is not restricted to any one of the three parties to whom the claim was directed. In contrast, the second and third government claims refer specifically to ASCIP and SELF, respectively, and the memoranda of coverage those two entities issued. Nor is the claim styled as breach of contract as the majority states. The term “breach of contract” appears nowhere in the claim.
As earlier noted, the $5.1 million was incorrect. The actual figure was $2.1 million but no substantive legal point is made about this inaccuracy. (See fn. 3, ante.)
Heuser’s cover letter refers to “breach of contract.” The operative second amended cross-complaint contained causes of action for declaratory relief, reformation, and equitable subrogation, contribution and indemnity. No breach of contract claim was alleged.
Third, the majority states, “[T]here is no evidence in the record demonstrating that Westchester’s claim was actually received by SELF’s clerk, secretary, or governing body, ” the persons prescribed by Government Code section 915, subdivision (a). I disagree. There is both direct and circumstantial evidence that Westchester’s claim was actually received by SELF. Notably, this body of evidence is uncontradicted.
The record shows that Swedo, the attorney who represented SELF in this litigation and in at least part of the Houghton litigation, not only admittedly received the claim, he made a point to argue that very receipt in opposing leave to file the cross-complaint. Swedo also stated the following in his letter to Westchester’s counsel of October 13, 2000: “I will make arrangements to have the government tort claim you have filed denied so that you can file an appropriate cross-complaint, should you choose to do so.” Swedo’s statement “the government tort claim you have filed” is a statement of historic fact that Swedo, as SELF’s lawyer, was competent to make. As such, it is direct evidence of the fact asserted in the statement; it is direct evidence because it is unnecessary to rely on any inferences. Moreover, from a pragmatic perspective, it is inconceivable that an attorney in Swedo’s position who had already acknowledged that the government claim was filed and who was facilitating its denial to allow the dispute to become properly at issue, would then not turn over the claim to the SELF personnel responsible for handling it under the code. (The Swedo letter was written some five months after counsel for Westchester sent him the claim. It is actually hard to imagine that by the time Swedo wrote back in October 2000, that he had not already submitted the claim to the appropriate SELF officials.) Swedo acknowledged as much when he stated under oath that “Westchester submitted a governmental tort claim to SELF dated May 30, 2000.” As before, this is a statement of historic fact. Indeed, Swedo’s choice of words that the claim was “submitted” to SELF and his earlier statement that the claim had been filed are telling. Swedo did not say Heuser had “mailed me a copy” of the claim. The choice of words appears to reenforce that SELF, not just its lawyer, received the claim. SELF’s executive director, the person SELF claims was authorized to accept government claims on SELF’s behalf, did not deny he had received the claim. He just could not recall one way or the other. This equivocation, while understandable given the passage of time, did not undermine the significant evidence that Westchester had substantially complied with code’s claim presentation requirements. (See also Gov. Code, § 915, subd. (d) [even if claim not delivered or mailed as required by statute, claim is deemed to have been presented in compliance with code if actually received by enumerated parties].) This conclusion is buttressed by the fact that Stewart, SELF’s claims representative, also received the government claim. Again, it is hard to imagine a claims representative not providing a critical document such as a government claim to his principal. Presumably most, if not all, claims presented to SELF, a joint powers authority, were government claims.
Use of the word “filed” by a lawyer connotes formal, official receipt. It is therefore immaterial that we don’t know whether the claim was received by a clerk or a secretary or auditor or the governing body itself.
2. SELF is estopped from claiming that Westchester failed to comply with the Government Claims Act
In reaffirming the substantial compliance rule in Bodde, our Supreme Court also confirmed that estoppel may be available to avoid unfair results under the government claims act. “Finally, a plaintiff may arguably be able to satisfy the claim presentation requirement by alleging an appropriate excuse, such as equitable estoppel.” (State v. Superior Court (Bodde), supra, 32 Cal.4th at p. 1245; see also Hill v. Newkirk (1994) 26 Cal.App.4th 1047, 1058 [public entity may be estopped from asserting noncompliance with claims statutes when filing prevented or deterred by affirmative conduct].) Estoppel “most commonly results from misleading statements about the need for or advisability of a claim; actual fraud or the intent to mislead is not essential.” (John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, 445 [estoppel by intimidation].)
Here, we need look no further than to the statements that SELF’s counsel, Swedo, made to the trial court to hold that SELF is estopped from asserting noncompliance. No less than four times did SELF acknowledge that the government claim had been submitted to SELF and that Swedo would facilitate its denial so that Westchester could pursue the very claim presented in its cross-complaint. These statements were surely not the result of momentary inadvertence. From April 16, 1999, when the Houghton settlement was reached, to October 13, 2000, when Swedo asked Heuser to accept service of the complaint and advised Heuser that Swedo would arrange for the formal denial of the claim “you have filed, ” there is no question that SELF and Westchester understood they were asserting cross claims for reimbursement of the $2.1 million that each had paid. SELF’s lawyer essentially stated before the court that procedural impediments had or would be removed so the parties could pursue their separate claims. The only rational conclusion to be reached from these facts is that, assuming Swedo did not forward the claim to the appropriate persons at SELF, SELF is estopped from asserting otherwise.
I would reverse the judgment against Westchester on its cross-complaint.