Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC349969, Mary Thornton House, Judge.
Law Offices of Morton C. Devor and Morton C. Devor for Plaintiff and Appellant.
Robert E. Shannon, City Attorney for the City of Long Beach, and Belinda R. Mayes, Principal Deputy, and Barry Meyers, Deputy City Attorney, for Defendant and Respondent.
KRIEGLER, J.
Plaintiff and appellant T&M Projects, Inc., doing business as T&M Construction, appeals from a judgment of dismissal following the sustaining of a demurrer in favor of defendant and respondent City of Long Beach in an action arising out of a construction contract. T&M contends that a letter it sent to personnel at the Port of Long Beach constituted a claim under the Government Claims Act (Gov. Code, § 910, et seq.). We conclude that T&M failed to present a claim to the City as required by statute, and therefore, we affirm.
All further statutory references are to the Government Code unless otherwise indicated.
FACTS
On September 26, 2002, the City, acting by and through its Board of Harbor Commissioners, authorized Executive Director Richard Steinke of the Long Beach Harbor Department to enter into a construction contract with T&M. Steinke executed the contract on behalf of the City and the city attorney approved the contract as to form. The City agreed to pay unit prices set forth in “Exhibit A” to the contract totaling $3,790,800 for labor and equipment rental from September 1, 2002, through August 31, 2003. The contract stated the quantities set forth in the exhibit were estimates and the “City will pay and [T&M] will accept, as full payment for such items of work, the unit prices set forth in Exhibit ‘A’ multiplied by the actual number of units performed or provided as directed by the City’s Chief Harbor Engineer.” Once the contract amount had been spent, the City could terminate the contract by providing 10 days notice. The contract terminated automatically if the City spent 150 percent of the contract price. T&M paid a premium of $56,862 for a performance bond in the amount of $3,790,800. On August 6, 2003, the City entered into a supplemental construction contract extending the term by one year. As of August 31, 2003, the City had ordered and paid $2,295,305; $1,495,495 of the contract price remained. During the extension period, the City ordered and paid $506,425. Therefore, $989,070 of the contract price remained on August 31, 2004.
T&M contacted the City’s Chief Engineer Paul Sheets and asked to whom T&M should address its claim. Sheets told T&M to send the claim to Steinke and Deputy Chief Harbor Engineer Gary Cardamone at the Port.
On January 26, 2005, T&M sent a letter to Cardamone and Steinke at the Port that referred to the equipment rental contract. The letter stated as follows: “Upon review of our 2004 earnings, it was determined that the above noted contract failed to produce a profit due to the lack of assigned work and the cost of the bonds and insurance. Because the utilization of heavy equipment was not realized during the second year of the contract[,] we were unable to recover operating costs. Had the remaining open contract amount of $1,495,500.00 been earned, a profit would have been realized versus a loss. T&M . . . believed the extension of the contract’s term for another year would fulfill the remaining open contract amount and justify these expenses sufficiently.
“On-call contracts of this type are only viable when the full contract amount is earned. Such was not the case, and the resulting net loss is surprising. Our other jobs sustained our ability to meet the [Port’s] needs, and in retrospect, it cost us money to work this contract. We billed $506,425.06, however our operating expenses were $829,966.50.” T&M provided an itemized list of its expenses, including the portions of bond and insurance premiums attributable to the remaining contract price. The profit loss shown was $323,541.44.
“We billed only 22% of the prior year[’]s sales of $2,295,305.32 when told by Ron Brisson that we would work as much as the first contract year. I am compelled to present this information to you because we would not have extended the contract otherwise. Surely the [Port] valued the work performed. I am suggesting a meeting with you to discuss a retroactive payment to lessen this loss.”
Cardamone wrote a response to T&M on March 3, 2005, as follows: “Reference is made to your letter dated January 26, 2005[,] wherein you state that your company failed to make a profit on this contract and that you were not able to recover your operating costs due to the lack of assigned work and the cost of bonds and insurance. Your letter also suggested a retroactive payment to lessen this loss.
“Special Provision (S.P.) 34 of the specifications state that ‘in lieu of the requirements of Subdivision 3.022 of the General Provisions, the City does not warrant that the actual quantity of each bid item will be used.’ Furthermore, Article 3 of the construction contract between the City . . . and T&M . . . states that ‘It is understood and agreed that the quantities set forth in Exhibit ‘A’ for which unit prices are fixed are estimates only and that City will pay and Contractor will accept, as full payment for such items of work, the unit prices set forth in Exhibit ‘A’ multiplied by the actual number of units performed or provided as directed by the City’s Chief Harbor Engineer.’ According to Progress Payment No. 24 for the period ending August 31, 2004, T&M has been paid for all work performed under this contract. At the time of extending the contract for a second year, the Port made no guarantees or representations as to the amount of work that may be requested for the second year.
“The above referenced letter does not cite any specific provision in the contract that would entitle you to additional compensation. Our review of the contract terms also finds no provisions to compensate you for the losses enumerated in your letter. Furthermore, the subject contract was accepted by the Board of Harbor Commissioners on October 11, 2004. Section 2.11 of the General Provisions requires that claims and protests be filed within ten (10) days. No such claim or protest was filed as required.
“While the Port sympathizes with your position, we can find no contractual basis to compensate you for your loss. [¶] The Port recognizes and values the quality and timeliness of work performed by T&M Construction and hopes you will continue to bid on port projects in the future.”
PROCEDURAL BACKGROUND
On April 3, 2006, T&M filed a complaint against the City. On February 23, 2007, T&M filed a fourth amended complaint against the City for breach of contract requesting reformation of the contract. The City filed a demurrer on the grounds that the January 26, 2005 letter did not constitute a claim as required under the Government Claims Act and the Port’s response did not constitute rejection of a claim. After a hearing on April 9, 2007, the trial court sustained the demurrer without leave to amend. On May 2, 2007, the trial court entered a judgment of dismissal. T&M filed a timely notice of appeal from the judgment.
DISCUSSION
Standard of Review
“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “Where written documents are the foundation of an action and are attached to the complaint and incorporated therein by reference, they become a part of the complaint and may be considered on demurrer.” (City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 800.) “[F]acts appearing in exhibits attached to the complaint . . ., if contrary to the allegations in the pleading, will be given precedence.” (Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1627.)
“To meet [the] burden of showing abuse of discretion, the plaintiff must show how the complaint can be amended to state a cause of action. [Citation.] However, such a showing need not be made in the trial court so long as it is made to the reviewing court.” (William S. Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal.App.3d 1612, 1621.) “The issue of leave to amend is always open on appeal, even if not raised by the plaintiff. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 970-971.)” (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 746.)
Failure to Present a Claim to the City
T&M contends that its January 26, 2005 letter to the Port constituted a proper claim filed with the proper entity. We disagree.
No complaint seeking money or damages may be filed against a public entity, unless the entity was presented with a claim as provided under the Government Claims Act. (§ 945.4.) A breach of contract claim must be presented to the public entity within one year of accrual of the cause of action. (§ 911.2; City of Stockton v. Superior Court, supra, 42 Cal.4th at pp. 737-738; Westcon Construction Corp. v. County of Sacramento (2007) 152 Cal.App.4th 183, 190.) “Thus, under these statutes, failure to timely present a claim for money or damages to a public entity bars a plaintiff from filing a lawsuit against that entity.” (State of California v. Superior Court (Bodde) (2004) 32 Cal.4th 1234, 1239.)
A claim against a local public entity must be presented by either “[d]elivering it to the clerk, secretary or auditor” of the entity, or “[m]ailing it to the clerk, secretary, auditor, or to the governing body at its principal office.” (§ 915, subd. (a).) A claim is deemed to have been presented even though it was not delivered or mailed as provided in the statute, if it is actually received by the clerk, secretary, auditor or board of the local public entity within the time prescribed. (§ 915, subd. (d).)
A governmental entity may provide forms for making claims, but the claimant is not required to use a form as long as the claim conforms to the requirements of section 910 and is signed. (§ 910.4.) Section 910 provides that “a claim must show (1) the name and address of the claimant, (2) the address to which notices are to be sent, (3) the date, place and other circumstances of the occurrence or transaction which gave rise to the claim asserted, (4) a general description of the indebtedness, obligation, injury, damage or loss incurred, (5) the name or names of the public employee or employees causing the injury, damage, or loss, and (6) the amount claimed if it totals less than $10,000.” (Baines Pickwick Ltd. v. City of Los Angeles (1999) 72 Cal.App.4th 298, 303; § 910.)
“The public entity has 45 days to grant or deny the claim; if the claim is not acted upon within 45 days, it is deemed rejected. (§ 912.4.)” (Chalmers v. County of Los Angeles (1985) 175 Cal.App.3d 461, 464.) If the public entity sends a written notice of rejection that substantially complies with the form provided in section 913, the action must be brought within six months. (§ 945.6, subd. (a)(1).) If no written notice is given, or the notice given does not comply with section 913, the claimant must bring the action within two years from the accrual date. (§ 945.6, subd. (a)(2).)
“The Government Claims Act requires only substantial compliance with the claims presentation requirement. (Schaefer Dixon Associates v. Santa Ana Watershed Project Authority (1996) 48 Cal.App.4th 524, 533.) In City of San Jose v. Superior Court (1974) 12 Cal.3d 447, the state high court adopted a two-part test for determining whether there has been substantial compliance with the Government Claims Act: ‘Is there some compliance with all of the statutory requirements; and, if so, is this compliance sufficient to constitute substantial compliance?’ ([Id.] at pp. 456-457.)” (Westcon Construction Corp. v. County of Sacramento, supra, 152 Cal.App.4th at p. 200.) Although only substantial compliance is required, the purported “claim” must be readily identifiable as a claim. (Schaefer Dixon Associates v. Santa Ana Watershed Project Authority, supra, 48 Cal.App.4th at p. 533.)
“The claim-filing requirement of the Government Claims Act serves several purposes: (1) to provide the public entity with sufficient information to allow it to make a thorough investigation of the matter; (2) to facilitate settlement of meritorious claims; (3) to enable the public entity to engage in fiscal planning; and (4) to avoid similar liability in the future. (TrafficSchoolOnline, Inc. v. Clarke (2003) 112 Cal.App.4th 736, 742.) Notice to a subordinate employee of the public entity may not serve these purposes. As is often the case, the individual known to the claimant may be the very person who committed the wrongdoing that is the subject of the claim. This may be the last person who would want to pass a claim on to his or her employer. Thus, giving notice to a subordinate employee may not assure that the public entity has an opportunity to review the claim before suit is filed.” (Westcon Construction Corp. v. County of Sacramento, supra, 152 Cal.App.4th at pp. 200-201.)
“Where a claim is filed with the proper entity, although with the wrong statutory official thereof, the doctrine of substantial compliance will save the claim if the claim was actually received by the statutory officer. [Citations.] But where there is a complete failure to serve any responsible officer of the entity, the doctrine does not apply.” (Jamison v. State of California (1973) 31 Cal.App.3d 513, 517.)
In this case, T&M failed to present a claim for damages to any of the recipients authorized by statute. T&M contends that the January 26, 2005 letter written to employees at the Port constituted a claim mailed to the governing body at its principal office. However, the City is the sole defendant named in the lawsuit. The Port is not the City’s governing body. T&M failed to present a claim to the proper authority.
“‘A “claim as presented” is a claim that is defective in that it fails to comply substantially with Government Code sections 910 and 910.2, but nonetheless puts the public entity on notice that the claimant is attempting to file a valid claim and that litigation will result if it is not paid or otherwise resolved. A “claim as presented” triggers a duty on the part of the governmental entity to notify the claimant of the defects or omissions in the claim. A failure to notify the claimant of the deficiencies in a “claim as presented” waives any defense as to its sufficiency. [Citations.] A document will be deemed a “claim as presented” “if it discloses the existence of a ‘claim’ which, if not satisfactorily resolved, will result in a lawsuit against the entity. [Citation.] A public entity's receipt of written notice that a claim for monetary damages exists and that litigation may ensue places upon the public entity the responsibility, and gives it the opportunity, to notify the potential plaintiff pursuant to sections 910.8 and 911 of the defects that render the document insufficient under sections 910 and 910.2 and thus might hamper investigation and possible settlement of the claim.”. . .’ (Alliance Financial v. City and County of San Francisco (1998) 64 Cal.App.4th 635, 643-644.)” (Westcon Construction Corp. v. County of Sacramento, supra, 152 Cal.App.4th at p.202.)
However, a claim that is deficient because it was not sent to the proper authority is not a claim as presented. (Westcon Construction Corp. v. County of Sacramento, supra, 152 Cal.App.4th at pp. 202-203.)
T&M contends the City should be estopped to assert that the claim was not mailed to the proper person or entity, because the City’s chief engineer instructed T&M to file its claim with the Port. This is incorrect.
“‘It is well settled that a public entity may be estopped from asserting the limitations of the claims statute where its agents or employees have prevented or deterred the filing of a timely claim by some affirmative act. [Citations.] 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. [Citation.]’ (John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, 445; see also Ortega v. Pajaro Valley Unified School Dist. (1998) 64 Cal.App.4th 1023, 1044-1045.)” (City of Stockton v. Superior Court, supra, 42 Cal.4th at p. 744.) “The required elements for an equitable estoppel are: (1) the party to beestopped 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. [Citation.]” (Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1785.) “The existence of an estoppel is a question of fact for the trial court.” (Elmore v. Oak Valley Hospital Dist. (1988) 204 Cal.App.3d 716, 724.)
However, estoppel requires a representation or concealment of material facts to a party “actually and permissibly” ignorant of the truth. (Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 902.) Accordingly, it has been held that an attorney could not reasonably rely on the advice of a medical records’ clerk to file a claim with the hospital’s legal department, so as to estop the public entity. (Ibid.) Similarly, T&M could not rely on the advice of the City’s chief engineer to file a claim for damages with the Executive Director of the Port, so as to estop the City.
Leave to Amend the Complaint
T&M contends the trial court abused its discretion by denying leave to amend the complaint. T&M suggests it could allege the Port had notice of T&M’s claim, and the Port, rather than the City, is the entity “that has to know whether a claim is being filed” and “has to either allow the claim or reject the claim.” However, the City is the sole defendant named in the complaint. T&M did not name the Port or the Board of Harbor Commissioners as defendants. T&M does not contend that it could allege service of a claim on one of the entities provided for in the Government Claims Act with respect to the City. T&M has failed to explain how notice to the Port is legally sufficient under the Government Claims Act to provide notice to defendant in this case. Therefore, T&M has not demonstrated that it could amend its complaint to show service of a claim in accordance with the requirements of the Government Claims Act.
DISPOSITION
The judgment is affirmed. Respondent City of Long Beach is awarded its costs on appeal.
We concur TURNER, P. J.,MOSK, J.