Filed 5/29/20

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

JAMES D. MCGEE,

Plaintiff and Appellant,

v.

TORRANCE UNIFIED SCHOOL 

DISTRICT et al.,

 Defendants and Respondents.

 B298122

 (Los Angeles County

 Super. Ct. No. YC068686)

APPEAL from a judgment of the Superior Court of Los 

Angeles County. Michael P. Vicencia, Judge. Affirmed. 

Carlin Law Group, and Kevin R. Carlin for Plaintiff and 

Appellant. 

Atkinson, Andelson, Loya, Ruud & Romo, Martin A. Hom 

and Jennifer D. Cantrell, for Defendant and Respondent 

Torrance Unified School District.

Finch, Thornton & Baird, Jason R. Thornton and Daniel P. 

Scholz for Defendant and Respondent Balfour Beatty

Construction.

_____________________________
2

This appeal is the latest in a series of cases challenging the 

legality of lease-leaseback agreements used by school districts for 

construction and modernization projects. (See California 

Taxpayers Action Network v. Taber Construction, Inc. (2017) 12 

Cal.App.5th 115, 122 (Taber).) Authorized by Education Code 

section 17406, lease-leaseback agreements are used to “contract[] 

for construction or improvement of school facilities. Under a 

lease-leaseback agreement, the school district leases its own real 

property to a contractor for a nominal amount, and the contractor 

agrees to construct school facilities or improve existing facilities 

on the property and lease the property and improvements back to 

the school district. At the end of the lease-leaseback agreement, 

title to the construction project vests in the school district.” 

(Taber, supra, at p. 122.)

Starting in 2013, taxpayer James D. McGee filed a series of 

three complaints to challenge lease-leaseback agreements 

between the Torrance Unified School District (the District) and 

Balfour Beatty Construction (Balfour) for several schools in the 

district. For the latter two complaints, the California Taxpayers 

Action Network joined him as plaintiff (together referred to as 

McGee). Labeling the complaints as reverse validation actions 

under Code of Civil Procedure section 860 et seq.,1 McGee alleged 

a host of claims to invalidate the agreements. After two previous 

appeals, McGee’s complaints have been narrowed to his causes of 

action for conflict of interest. (McGee v. Torrance Unified School 

District (Jan. 23, 2015, B252570) [nonpub. opn.] (McGee I); McGee 

 

1 All undesignated statutory citations refer to the Code of 

Civil Procedure.
3

v. Balfour Beatty Construction, LLC (2016) 247 Cal.App.4th 235 

(McGee II).)

The trial court entered judgment dismissing the remaining 

conflict of interest claims because the challenged projects had all 

been completed, which it held rendered the reverse validation 

action moot. (See Wilson & Wilson v. City Council of Redwood 

City (2011) 191 Cal.App.4th 1559, 1579 (Wilson).) McGee argues 

this was wrong because the lease-leaseback agreements were not 

subject to validation; his conflict of interest claims were in 

personam claims separate from his in rem reverse validation 

claims; and the court could have ordered disgorgement as a

remedy even though the projects have been finished. 

We reject his contentions. The lease-leaseback agreements 

were subject to validation, and his conflict of interest claims 

necessarily challenge the validity of the agreements, regardless of 

label or remedy. Allowing his claims to proceed long after the 

projects have been finished would undermine the strong policy of 

promptly resolving the validity of public agency actions. Because 

the projects were completed, his claims are moot. We affirm the 

judgment of dismissal.

BACKGROUND

Between 2012 and 2015, the District and Balfour entered a 

series of lease-leaseback agreements for construction projects 

through Torrance Unified School District Obligation Bond 

Measure Y and Measure Z. Starting in 2013, McGee filed three 

complaints challenging them. 

The first lawsuit challenged the lease-leaseback 

agreements for projects at Hickory Elementary School, Madrona 

Middle School, and North High School. The trial court sustained 

demurrers to the complaint, and on appeal, we affirmed dismissal 
4

of all claims except conflict of interest. We held that claim was 

sufficiently pled and remanded it to the trial court. (McGee I,

B252570, 2015 WL 301918, at pp. *1, *6.)

The second lawsuit challenged lease-leaseback agreements 

for projects at Tower Elementary School and Riviera Elementary 

School. Again, the trial court sustained demurrers, and again we 

affirmed except for the conflict of interest claim. (McGee II, 

supra, 247 Cal.App.4th at pp. 246–250.) We held McGee had 

standing to bring his conflict of interest claim pursuant to 

Government Code section 1090 and the claim was sufficiently 

pled. (McGee II, supra, at pp. 246–250.)

The third lawsuit challenged lease-leaseback agreements 

for projects at Torrance High School, Edison Elementary School, 

and Yukon Elementary School. The operative complaint 

contained a single cause of action for conflict of interest.2

McGee alleged each complaint was “brought in this court as 

a special in rem proceeding” to declare the challenged agreements 

void and invalid. Each complaint’s prayer for relief sought a 

declaration the action was properly brought pursuant to the 

validation statutes for “judicial invalidation” of the leaseleaseback agreements. The complaints also sought declarations 

each agreement was void and invalid and requested 

disgorgement of all money paid to Balfour. 

McGee’s conflict of interest claims essentially alleged 

Balfour “had a conflict of interest based on its professional 

program management, construction management, and 

preconstruction services to the District. Plaintiffs allege Balfour 

 

2 The agreements for the Edison and Yukon schools were 

rescinded in 2015, so they are no longer at issue. 
5

provided preconstruction services including budgeting, 

development of plans and specifications and that these services 

‘filled the roles and positions of officers, employees and agents’ of 

the District.” (McGee II, supra, 247 Cal.App.4th at p. 246.)

The trial court consolidated the cases and held a bench trial 

limited to the mootness issue. The court heard testimony that all 

the projects had been completed. Because that was the only fact 

necessary to decide mootness, the court declined to admit 

stipulated exhibits offered by McGee. The court found McGee’s 

case was an “in rem reverse validation action” filed pursuant to 

section 860 et seq. that was rendered moot by the completion of 

the challenged projects. It entered judgment of dismissal.

DISCUSSION

“A case is considered moot when ‘the question addressed 

was at one time a live issue in the case,’ but has been deprived of 

life ‘because of events occurring after the judicial process was 

initiated.’ [Citation.] Because ‘ “the duty of . . . every . . . judicial 

tribunal . . . is to decide actual controversies by a judgment which 

can be carried into effect, and not to give opinions upon moot 

questions or . . . to declare principles or rules of law which cannot 

affect the matter in issue in the case before it[,] [i]t necessarily 

follows that when . . . an event occurs which renders it impossible 

for [the] court, if it should decide the case in favor of plaintiff, to 

grant him any effectual relief whatever, the court will not proceed 

to formal judgment. . . .” [Citations.]’ ” (Wilson, supra, 191 

Cal.App.4th at p. 1574.) The pivotal question in determining 

mootness is “whether the court can grant the plaintiff any 

effectual relief.” (Ibid.) We review the issue de novo when, as 

here, the facts are not disputed. (K.G. v. Meredith (2012) 204 

Cal.App.4th 164, 174.)
6

Section 860 enables a public agency to commence an action 

to validate “any matter which under any law is authorized to be 

determined pursuant to this chapter, and for 60 days thereafter.” 

If the agency does not bring a validation action, “any interested 

person may bring an action within the time and in the court 

specified by Section 860 to determine the validity of such matter.” 

(§ 863.) A case brought by an interested person is frequently 

called a “reverse validation” action. (California Commerce 

Casino, Inc. v. Schwarzenegger (2007) 146 Cal.App.4th 1406, 

1420, fn. 12 (Commerce Casino).) 

By statute, a validation action “shall be in the nature of a 

proceeding in rem.” (§ 860.) That means “a validation action 

operates against the property, as distinct from an injunction that 

operates against persons. [Citation.] As an in rem proceeding, a 

validation action differs from traditional actions challenging a 

public agency decision; its effect binds the agency and all other 

persons.” (Friedland v. City of Long Beach (1998) 62 Cal.App.4th 

835, 843 (Friedland).) 

An agency need not bring a validation action to validate a 

decision, however. Instead, “ ‘an agency may indirectly but 

effectively “validate” its action by doing nothing to validate it; 

unless an “interested person” brings an action of his own under 

section 863 within the 60-day period, the agency’s action will 

become immune from attack whether it was legally valid or not.’ 

[Citations.] As to matters ‘which have been or which could have 

been adjudicated in a validation action, such matters . . . must be 

raised within the statutory limitations period in section 860 et 

seq. or they are waived.’ ” (Commerce Casino, supra, 146 

Cal.App.4th at p. 1420; see § 870, subd. (a).)
7

“A key objective of a validation action is to limit the extent 

to which delay due to litigation may impair a public agency’s 

ability to operate financially.” (Friedland, supra, 62 Cal.App.4th 

at p. 843.) To that end, the validation statutes enable a “ ‘ 

“speedy determination of the validity of the public agency’s 

action . . . plac[ing] great importance on the need for a single 

dispositive final judgment.” [Citation.] The validating statutes 

should be construed so as to uphold their purpose, i.e., “the acting 

agency’s need to settle promptly all questions about the validity 

of its action.” [Citation.]’ ” (Commerce Casino, supra, 146 

Cal.App.4th at pp. 1420–1421.) They “fulfill the important 

objective of ‘facilitat[ing] a public agency’s financial transactions 

with third parties by quickly affirming their legality.’ [Citation.] 

In particular, ‘ “[t]he fact that litigation may be pending or 

forthcoming drastically affects the marketability of public 

bonds[.]” ’ ” (Id. at p. 1421; see Friedland, supra, at p. 843.)

Given the public interest in quickly resolving the legality of 

agency decisions, “California law has long recognized that the 

completion of a public works project moots challenges to the 

validity of the contracts under which the project was carried out.” 

(Wilson, supra, 191 Cal.App.4th at p. 1575.) Thus, a reverse 

validation action “may well become moot if the challenged 

redevelopment project is allowed to proceed during the pendency 

of the action.” (Id. at p. 1579.)

In Wilson, the court dismissed a reverse validation action 

attacking a project and the resolutions authorizing it because the 

project had been completed before final judgment. (Wilson, 

supra, 191 Cal.App.4th at pp. 1575–1576.) The case had been 

pending for five years without explanation, which ran counter to 

the intent of “[v]alidation actions . . . to settle promptly all 
8

questions about the validity of an agency’s action.” (Id. at 

p. 1580.) The delay was partly attributable to the plaintiff, which 

did not try to stop the project during the lawsuit: “ ‘Since [the 

plaintiff] made no effort to seek preliminary injunctive relief or a 

stay order in order to preserve the status quo, [it] is not in any 

position to complain of the very change in circumstances that [it] 

might have prevented by seeking such relief.’ ” (Id. at p. 1581.)

As in Wilson, McGee’s reverse validation action was 

rendered moot by the completion of the challenged projects. 

McGee filed his first lawsuit as far back as 2013, and the trial 

court did not dismiss the cases until 2019. During those six 

years, McGee did nothing to stop the projects from moving 

forward while the validity of the lease-leaseback agreements was 

litigated. He tries to explain that choice by claiming he did not 

want to “impair District’s ability to operate” and he had an 

“adequate remedy at law” through disgorgement. Even if true, 

that does not change the fact that the projects were completed. 

As Wilson recognized, this years-long delay destroyed the very 

purpose behind the validation statutes—“to settle promptly all 

questions about the validity of an agency’s action.” (Wilson, 

supra, 191 Cal.App.4th at p. 1580, italics added.) Having sought 

no stay or injunction, he is in no position “ ‘to complain of the 

very change in circumstances that [he] might have prevented by 

seeking such relief.’ ” (Id. at p. 1581.)

McGee does not seriously dispute the holding in Wilson 

that a reverse validation action becomes moot if the challenged 

project is completed. Instead, he argues his conflict of interest 

claims fall outside Wilson because they were not subject to the 

validation statutes in a number of ways. His arguments are 

unpersuasive.
9

First and most fundamentally, McGee contends the leaseleaseback agreements themselves are not subject to validation. 

The validation statutes apply “when ‘any other law’ authorizes 

their application.” (Golden Gate Hill Development Co. v. County 

of Alameda (2015) 242 Cal.App.4th 760, 765–766.) In 

determining whether his claims “fall[] within the boundaries of a 

particular legislative declaration that the validation statutes 

apply, we assess whether ‘ “[t]he gravamen of a complaint and 

the nature of the right sued upon, rather than the form of the 

action or relief demanded . . . ” ’ falls within the language of the 

declaration.” (Santa Clarita Organization for Planning & the 

Environment v. Abercrombie (2015) 240 Cal.App.4th 300, 308 

(Abercrombie); see McLeod v. Vista Unified School Dist. (2008) 

158 Cal.App.4th 1156, 1165 (McLeod).)

Here, the applicable law is Government Code section 

53511, which declares the validation statutes apply to “an action 

to determine the validity of [a local agency’s] bonds, warrants, 

contracts, obligations or evidences of indebtedness.” (Gov. Code, 

§ 53511, subd. (a), italics added.) McGee argues the leaseleaseback agreements are not “contracts” as the term is used in 

Government Code section 53511. “California courts have read 

[Government Code] section 53511’s reference to ‘contracts’ 

‘narrow[ly]’ to reach only those contracts that ‘are in the nature 

of, or directly relate[d] to a public agency’s bonds, warrants or 

other evidences of indebtedness.’ ” (Abercrombie, supra, 240 

Cal.App.4th at p. 309; see Commerce Casino, supra, 146 

Cal.App.4th at p. 1429.) But contracts “involving financing and 

financial obligations” fall within this provision (Friedland, supra, 

62 Cal.App.4th at p. 843), as do contracts that are “ ‘inextricably 
10

bound up’ ” with bond funding and financing (McLeod, supra, 

158 Cal.App.4th at p. 1169). 

We previously held Education Code section 17406 

authorizes lease-leaseback agreements without competitive 

bidding. (McGee II, supra, 247 Cal.App.4th at p. 242.) That 

provision has been characterized as providing a method of 

“financing school construction.” (Taber, supra, 12 Cal.App.5th at 

p. 136 [noting Education Code section 17406 provided method for 

“financing school construction,” but did not require school district 

to lack funds in order to enter lease-leaseback agreements].) 

As such, “the use of validation actions is a common practice for 

school construction projects structured as a lease-leaseback 

arrangement.” (Davis v. Fresno Unified School Dist. (2015) 237 

Cal.App.4th 261, 273, fn. 4 (Davis).) Here, the challenged leaseleaseback agreements were “funded through Torrance Unified 

School District General Obligation Bond Measure[s].” (See 

McGee II, supra, 247 Cal.App.4th at p. 240 [“The contracts were 

awarded to Balfour and were funded through a general obligation 

bond.”].) Thus, the lease-leaseback agreements involved the 

District’s financial obligations and were inextricably bound up in 

the District’s bond financing, bringing them within the scope of 

“contracts” covered by Government Code section 53511.

Were there any doubt, McGee’s own treatment of the leaseleaseback agreements throughout this litigation demonstrates 

they fall within Government Code section 53511. His operative 

complaints expressly alleged these cases were brought under 

section 863 as in rem actions to invalidate the lease-leaseback 

agreements. That includes his most recent lawsuit, which 

asserted only a conflict of interest claim and yet characterized the 

suit as an in rem proceeding and sought a declaration the lawsuit 
11

was properly brought as a reverse validation action. McGee filed 

each complaint within the short 60-day statute of limitations for 

reverse validation actions. (§§ 860, 863.) He complied with the 

statutory procedure for service of a reverse validation action by 

publication. (§§ 861, 863.) Co-plaintiff California Taxpayers 

Action Network was not a party to the first complaint, but it filed 

an answer, alleging it had “an interest in the validity of the 

contracts.” It could have only done so as an “interested party” 

subject to jurisdiction by publication of the summons according to 

the validation statutes. (§ 861; see Friedland, supra, 62 

Cal.App.4th at p. 843.) 

Beyond the pleadings, McGee previously argued in the trial 

court the lease-leaseback agreements were subject to validation. 

In opposing motions for judgment on the pleadings, he relied on 

Davis to take the position the lease-leaseback agreements “[a]re 

[s]ubject to [v]alidation” pursuant to Government Code section 

53511 because they “are for the purpose of financing.” He also 

distinguished Abercrombie because the court in that case held the 

challenged contracts were not subject to validation. 

(Abercrombie, supra, 240 Cal.App.4th at pp. 309–310.) McGee 

even went so far as to claim Balfour “cannot dispute lease 

leaseback contracts like the ones at issue here are subject to 

validation actions because [the defendants] have in prior motions 

requested the Court take judicial notice of scores of prior 

validation actions as evidence of the legality of their transaction. 

They can[]not have it both ways.” 

We also previously held McGee had standing to bring his 

conflict of interest claims in part because “this case involved a 

validation action in which the court had authority to set aside 

void contracts.” (McGee II, supra, 247 Cal.App.4th at p. 248.) 
12

Similarly, other recent appellate decisions evaluating leaseleaseback agreements arose in cases brought under the 

validation statutes. (See Taber, supra, 12 Cal.App.5th at p. 122; 

Los Alamitos Unified School Dist. v. Howard Contracting, Inc. 

(2014) 229 Cal.App.4th 1222, 1225; Davis, supra, 237 Cal.App.4th 

at p. 273, fn. 4.) We are satisfied the lease-leaseback agreements 

fall within Government Code section 53511, bringing them within 

the validation statutes.3

The centerpiece of McGee’s appeal is his argument the 

conflict of interest claims were in personam taxpayer claims 

brought pursuant to section 526a falling outside the validation 

statutes.4 Section 526a allows a taxpayer to bring “[a]n action to 

obtain a judgment restraining and preventing any illegal 

expenditure of, waste of, or injury to, the estate, funds, or other 

property of a local agency . . . against any officer thereof, or any 

agent, or other person, acting in its behalf.” (§ 526a, subd. (a).) 

“The purpose of section 526a ‘is to permit a large body of persons 

to challenge wasteful government action that otherwise would go 

unchallenged because of the standing requirement.’ [Citation.] 

‘The essence of a taxpayer action is an illegal or wasteful 

 

3 Balfour and the District invoke various legal doctrines to 

argue McGee is precluded from asserting this argument due to 

his prior positions in the trial court. We need not rely on those 

principles. McGee’s previous treatment of the lease-leaseback 

agreements is proof enough to support the conclusion the 

agreements are, in fact, subject to the validation statutes. 

4 McGee argues the trial court had personal jurisdiction over 

Balfour and the District because they made general appearances. 

That aspect of personal jurisdiction over the parties is not 

disputed and is not at issue here. 
13

expenditure of public funds or damage to public property.’ ” 

(McLeod, supra, 158 Cal.App.4th at p. 1165; see Taber, supra, 12 

Cal.App.5th at p. 141.) 

McGee contends he may use section 526a to assert conflict 

of interest claims pursuant to common law and Government Code 

section 1090. “[S]ection 526a is, as a general rule, available to 

taxpayers who wish to challenge government contracts affected 

by financial conflicts of interest,” including pursuant to 

Government Code section 1090. (San Diegans for Open 

Government v. Public Facilities Financing Authority of City of 

San Diego (2019) 8 Cal.5th 733, 746 (San Diegans).)5 

Government Code section 1090 “ ‘ “codifies the long-standing 

common law rule that barred public officials from being 

personally financially interested in the contracts they formed in 

their official capacities.” [Citation.] Government Code “section 

 

5 McGee has withdrawn an argument he may independently 

assert a conflict of interest claim pursuant to Government Code 

section 1092, which permits “any party” to avoid a contract that 

violates Government Code section 1090. San Diegans held that 

section does not “create[] a private right of action for nonparties 

to sue to avoid public contracts.” (San Diegans, supra, 8 Cal.5th 

at p. 746.) The District and Balfour go further to argue McGee 

also cannot pursue a section 526a taxpayer claim—which is 

permissible under San Diegans—because he distinguished a case 

in his opening appellate brief on the ground it “involved a CCP 

§ 526a action not a GC § 1092 action as is the case here.” His 

opening brief was filed before San Diegans was issued. In his 

reply brief, he argued he could bring his claim pursuant to 

section 526a. The District and Balfour filed supplemental briefs 

addressing San Diegans. Considered against this backdrop, we 

will not treat McGee’s isolated comment as a bar to his reliance 

on section 526a.
14

1090 is concerned with ferreting out any financial conflicts of 

interest, other than remote or minimal ones, that might impair 

public officials from discharging their fiduciary duties with 

undivided loyalty and allegiance to the public entities they are 

obligated to serve. [Citation.] Where a prohibited interest is 

found, the affected contract is void from its inception [citation] 

and the official who engaged in its making is subject to a host of 

civil and (if the violation was willful) criminal penalties, 

including imprisonment and disqualification from holding public 

office in perpetuity [citations].” ’ [Citation.] ‘ “[A] contract in 

which a public officer is interested is void, not merely 

voidable.” ’ ” (McGee II, supra, 247 Cal.App.4th at p. 247.)

While in rem validation actions and in personam taxpayer 

actions are not mutually exclusive, section 526a taxpayer claims 

alleging violations of section 1090 may still fall within the 

validation statutes. (See McLeod, supra, 158 Cal.App.4th at p. 

1167; Regus v. City of Baldwin Park (1977) 70 Cal.App.3d 968, 

972.)

6

 The form of the claim does not govern; we must examine 

“ ‘[t]he gravamen of a complaint and the nature of the right sued 

upon,” in order to determine whether his claims fall within the 

validation statutes. (McLeod, supra, at p. 1165; see Committee 

for Responsible Planning v. City of Indian Wells (1990) 225

Cal.App.3d 191, 198 [requiring consolidation under validation 

 

6 McGee argues he timely filed all his claims within the 60-

day period required by the validation statutes. (McLeod, supra, 

at pp. 1166–1167 [Both in rem and in personam “actions may be 

brought to challenge governmental action if suit is filed within 

the 60-day limitations period for validation actions.”].) Balfour 

does not dispute the issue, so it is not clear why McGee focuses on 

it. We need not address it. 
15

statutes of all claims that “relate to the same fundamental issue: 

the validity of Indian Wells’ actions”].) The ultimate question is 

whether the claim “go[es] beyond the determination of the 

validity of the challenged matter” or is merely a “request for 

invalidation . . . in other words.” (Katz v. Campbell Union High 

School Dist. (2006) 144 Cal.App.4th 1024, 1034 (Katz).)

In McLeod, for example, a taxpayer brought a suit 

pursuant to section 526a to challenge aspects of a school district’s 

measure authorizing the issuance of construction bonds. 

(McLeod, supra, 158 Cal.App.4th at p. 1160.) The taxpayer 

sought declaratory and injunctive relief, but did not plead a claim 

under the validation statutes. (Id. at p. 1163.) The suit was filed 

well beyond the 60-day statute of limitations for a validation 

claim, so the issue was whether the section 526a claim was 

subject to that limitations period or some longer period that 

would have made it timely. The court held the 60-day period for 

filing validation claims applied because the section 526a claim 

attacked a decision that was subject to the validation statutes. 

(McLeod, at pp. 1164–1165.) Recognizing section 526a claims and 

validation claims are not mutually exclusive, the court held the 

taxpayer action “directly challenged the validity of a planned 

bond issuance, and the lack of a prompt validating procedure 

would impair the District’s ability to operate.” (McLeod, at 

p. 1169.)

The court in Katz reached a similar conclusion. In that 

case, the taxpayer filed a complaint to invalidate a newly passed 

tax and alleged additional claims for a declaration defining a 

term in the new tax provision and for an injunction restraining 

imposition of the tax. (Katz, supra, 144 Cal.App.4th at p. 1029.) 

The publication of the summons was defective under the 
16

validation statutes, and the court rejected the taxpayer’s 

argument his declaratory and injunctive relief claims were not 

affected because they were not subject to validation. (Id. at 

p. 1033.) The taxpayer’s complaint did “not seek relief unrelated 

to the parcel tax he claims is invalid.” (Id. at p. 1034.) Instead, 

the declaratory relief claim requested the court define the term at 

issue so the tax was valid and the injunction sought to restrain 

levy of the tax, which was “merely a request for invalidation of 

the tax stated in other words.” (Ibid.)

As in McLeod and Katz, regardless of how McGee 

characterizes his conflict of interest claims or the relief he seeks, 

the gravamen is the invalidity of the lease-leaseback agreements. 

McGee admits he seeks “a finding that the contracts were ultra 

vires, illegal, void, and unenforceable due to a conflict of 

interest.” His complaints alleged as much. A judgment finding 

Balfour violated section 1090 would render the lease-leaseback 

agreements “ ‘void from [their] inception.’ ” (McGee II, supra, 247 

Cal.App.4th at p. 247.) Although McGee focuses on the fact that 

he seeks disgorgement directly from Balfour, any judgment 

ordering disgorgement would require a finding the leaseleaseback agreements were void. In other words, the agreements 

would necessarily be invalidated.

A judgment in McGee’s favor would also undermine the 

very purpose behind the validation statutes. A cloud has hung 

over the challenged projects for years, destroying any hope in 

prompt validation of the underlying lease-leaseback agreements. 

That delay is largely attributable to McGee, who strategically 

chose not to prevent the projects from moving forward. Beyond 

the specific projects here, a judgment in McGee’s favor would 

threaten future projects with the prospect of lawsuits long after 
17

completion. That would undoubtedly inhibit the District’s ability 

to obtain financing for them. (See Friedland, supra, 62 

Cal.App.4th at p. 843 [“A key objective of a validation action is to 

limit the extent to which delay due to litigation may impair a 

public agency’s ability to operate financially.”].) “ ‘[T]he essential 

difference between those actions which ought and those which 

ought not to come under [the validation statutes] [is] the extent to 

which the lack of a prompt validating procedure will impair the 

public agency’s ability to operate. The fact that litigation may be 

pending or forthcoming drastically affects the marketability of 

public bonds’ ” and likely would have “ ‘a chilling effect upon 

potential third party lenders, thus resulting in higher interest 

rates or even the total denial of credit.’ ” (McLeod, supra, 158 

Cal.App.4th at pp. 1167–1168.) 

Because his conflict of interest claims are subject to 

validation, McGee cannot obtain effective relief through 

disgorgement. He cites Thomson v. Call (1985) 38 Cal.3d 633 

(Thomson), but it is distinguishable. That case involved a 

taxpayer challenge to a city’s fully performed real estate 

transaction alleging a violation of Government Code section 1090. 

The court held the city could retain title to the land and recoup 

the purchase price from the councilman with the alleged conflict 

of interest. (Thomson, supra, at pp. 646–647; see San Diegans, 

supra, 8 Cal.5th at p. 737 [citing Thomson to note penalty for 

violating Government Code section 1090 “is substantial: The 

interested official must disgorge any profits earned, and may not 

recover any consideration paid, under the contract”].) Thomson 

did not arise under the validation statutes, so the court did not 

address whether the disgorgement remedy remains available 
18

when a Government Code section 1090 claim seeks to void a 

completed contract falling within the validation statutes. 

We will follow the reasoning in Wilson. The court in that 

case noted the plaintiff sought relief similar to what McGee seeks 

here—a judgment the challenged actions were “ ‘invalid, illegal, 

void and of no effect’ ” and an order to direct the public agencies 

to “seek reimbursement ‘for all monies illegally and improperly 

spent’ ” on the challenged project. (Wilson, supra, 191 

Cal.App.4th at p. 1567.) McGee points out Wilson did not involve 

direct disgorgement from a private party like Balfour, but Wilson 

did not focus on the precise form of the claims or requested relief; 

it focused on the fact the challenged project had been completed. 

Because “[v]alidation actions are intended to settle promptly all 

questions about the validity of an agency’s action,” the completion 

of the project rendered the action moot. (Id. at pp. 1580–1581, 

italics added.) 

The question McGee raises is whether the lease-leaseback 

agreements were infected by a conflict of interest. If so, the only 

way he can obtain the remedy of disgorgement is with a judgment 

declaring the lease-leaseback agreements were “ ‘void from [their] 

inception.’ ” (McGee II, supra, 247 Cal.App.4th at p. 247.) 

Because the agreements were subject to validation and he seeks 

to invalidate them, the completion of the challenged projects 

rendered his claims moot.7

 

7 In light of our conclusion, we need not address McGee’s 

argument the trial court abused its discretion by refusing to 

admit his stipulated exhibits. As the trial court noted, the only 

relevant fact was whether the projects had been finished, which 

was proved through testimony. For the same reason, we deny 
19

DISPOSITION

The judgment is affirmed. Respondents are entitled to 

costs on appeal.

CERTIFIED FOR PUBLICATION

BIGELOW, P. J.

WE CONCUR:

GRIMES, J.

STRATTON, J.

 

McGee’s request for judicial notice as unnecessary to resolve the 

appeal.