Filed 8/26/16 Orange County Communities Organized for Responsible Development v. City of Anaheim CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

ORANGE COUNTY COMMUNITIES

ORGANIZED FOR RESPONSIBLE 

DEVELOPMENT,

 Plaintiff and Appellant,

v.

CITY OF ANAHEIM et al.,

 Defendants and Respondents.

 G052274

 (Super. Ct. No. 30-2014-0072186)

 O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, David T. 

McEachen, Judge. Affirmed.

Briggs Law Corporation, Cory J. Briggs and Anthony N. Kim for Plaintiff 

and Appellant.

Duane Morris, Colin L. Pearce and Heather U. Guerena; Michael R.W. 

Houston, City Attorney and Kristin A. Pelletier, Assistant City Attorney, for Defendant 
2

and Respondents City of Anaheim, Kris Murray, Lucille Kring, Gail Eastman and Jordan 

Brandman.

Rutan & Tucker, Robert S. Bower, John A. Ramirez and Peter J. Howell for 

Defendant and Respondent GardenWalk Hotel I, LLC.

* * *

OCCORD (Orange County Communities Organized for Responsible 

Development), a community activist group, has sued the City of Anaheim (the city), four 

of its councilmembers (defendants Kris Murray, Lucille Kring, Gail Eastman, and Jordan 

Brandman), and a hotel developer (GardenWalk) to invalidate two contracts, called 

“economic assistance agreements” or “EAAs,” entered into by the city with GardenWalk

in May 2013. The two EAAs contemplate GardenWalk will build two hotels in 

Anaheim’s resort district: a “resort hotel” and a “convention hotel.” In return, the city 

has promised to remit to the developer 70 percent of the bed taxes the city will collect 

from the hotels up to a certain amount. Those amounts are about $76 million for the 

resort hotel, and $81 million for the convention hotel. 

OCCORD calls the deal a “tax subsidy.” But the city hopes the presence of 

the two hotels will produce an overall net increase in tax revenue from the increased job 

growth and tourism precipitated by the presence of first-class hotels in its resort district. 

While OCCORD tells us it has no quarrel with the basic theory behind the EAA 

agreements, it believes the agreements should be set aside because they were made in 

violation of the state conflict of interest statute, section 1090 of the Government Code.1 

 

1 All further statutory references are to the Government Code unless otherwise indicated. The 

statute provides in its entirety: 

“(a) Members of the Legislature, state, county, district, judicial district, and city officers or 

employees shall not be financially interested in any contract made by them in their official capacity, or by anybody 

or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees 

be purchasers at any sale or vendors at any purchase made by them in their official capacity.

“(b) An individual shall not aid or abet a Member of the Legislature or a state, county, district, 

judicial district, or city officer or employee in violating subdivision (a).

“(c) As used in this article, ‘district’ means any agency of the state formed pursuant to general law 

or special act, for the local performance of governmental or proprietary functions within limited boundaries.” 
3

On that point OCCORD has two theories: The first is that the four city 

council member defendants received “excessive” campaign contributions from the 

developer. According to the complaint, that was the result of individuals who have 

affiliations with GardenWalk donating to their individual limits, with a total that exceeds 

legal limits. These excessive contributions, alleges OCCORD, were given as “quid pro 

quo” (the exact words in the complaint) to approve the EAAs. Other than using the 

words “quid pro quo,” however, the second amended complaint contains no elaboration 

as to the alleged exchange. For example, there is no allegation that a councilmember 

solicited contributions from GardenWalk to vote for the EAAs, or that a GardenWalkaffiliated contributor approached a council member offering to contribute in exchange for 

a favorable vote on the EAAs, or even that there was anything like a wink-wink-nudgenudge implied understanding to vote in the contributor’s interest. No such allegations are 

made.

The second theory, according to OCCORD, is that the EAAs were 

negotiated on the developer’s behalf by a law firm, Rutan and Tucker, who at the same 

time served as the city’s own attorney. Thus the agreements are also the product of the 

law firm contravening section 1090. 

On demurrer to OCCORD’s second amended complaint, the trial court 

ruled the suit was barred by the shortened (60-day) statute of limitations provided by 

what are known as the “validation” statutes (see Code Civ. Proc., §§ 860-870). The court 

also ruled the complaint had failed to state a valid conflict-of-interest claim under section 

1090, and further held the mere fact Rutan and Tucker were paid for their services did not 

violate section 1090 either. OCCORD has timely appealed from the judgment entered 

after demurrer was sustained without leave to amend.

Preliminarily we reject the defendants’ statute of limitations argument as 

unviable. Statutorily, the specific controls the general (e.g., Hughes Electronics Corp. v. 

Citibank Delaware (2004) 120 Cal.App.4th 251, 270 [specific statutory provisions 
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bearing on a particular subject control over more general ones]) and section 1090 has its 

own specific statute of limitations in section 1092, which is considerably more lenient 

(four years after discovery) than the 60 days set out in the validation statutes. This suit is 

easily within that time frame – filed in May 2014, which is just a little more than a year 

after the signing of the EAAs in March 2013. 

The same applies to their argument OCCORD lacks standing to bring a

taxpayer challenge to the EAAs. Taxpayers have standing to challenge government 

actions in alleged contravention of section 1090. (See Thomson v. Call (1985) 38 Cal.3d 

633 [taxpayers had standing to challenge double escrow by which firm purchased land 

from city council member and then sold it to city]; McGee v. Balfour Beatty 

Construction, LLC (2016) 247 Cal.App.4th 235, 248 [following Thomson in finding 

taxpayer standing under section 1090].) 

That brings us to the merits of OCCORD’s challenge. Anaheim has a set of 

campaign finance ordinances, called the campaign reform law or “CRL.” The current 

(inflation adjusted) limit for individual donations subject to the CRL is $1,900. While 

GardenWalk made no contributions to city council members directly, OCCORD’s second 

amended complaint identifies 14 contributors to the four city council member defendants

it says are “affiliated” with GardenWalk. This pool consists of five individuals,2 four 

businesses,3 a political action committee (PAC) and three of its board members,

4 and 

finally, an anonymous “general manager” of one of the businesses.5 The second 

amended complaint totes up the aggregate total of the contributions from those 14 for 

 

2 Bill O’Connell, Jean O’Connell, Ajesh Patel, John Ramirez and Mike Rubin. 

3 Stovall’s Inn, Anaheim Park Place Inn, Orangewood LLC and Paul Kott Realtors.

4 The PAC is SOAR, standing for (according to the complaint) “Support Our Anaheim Resorts.” 

The three board members are Sandra Day, Craig Farrow, and Larry Slagle.

5 Who is only called the “general manager of Stovall’s Inn” in the complaint. 
5

each city councilmember and ascribes that total to GardenWalk in order to arrive at 

amounts in excess of $1,900.6

But Anaheim’s CRL sets out its aggregation rules in section 1.09.070. Two 

or more entities are treated as one person for aggregation purposes only when the entities

fall within one of five categories. They are one person when they: (1) share the majority 

of members of their boards of directors (1.09.070.0201), (2) are controlled by the same

majority shareholders (1.09.070.0202), or are (3) in a parent-subsidiary relationship 

(1.09.070.0203). Additionally, (4) an individual and any partnership which he or she 

manages or owns a controlling interest is treated as one person (1.09.070.030), as are (5) 

campaign committees where the majority of officers of those committees are the same 

(1.09070.040). As it turns out, none of the 14 contributors listed in the complaint gave 

more than $1,900 to any one of the four individual city council defendants, with the 

exception of one business, whose $300 contribution in excess of $1,900 to member 

Eastman was returned by her in February 2014. The general manager of that business 

also made a contribution of $1,900 to member Murray, but that contribution was also 

returned in February 2014. 

The complaint’s theory of excessive contributions is based on each 

contributor’s putative allegiance to developer GardenWalk. It alleges that three of the 

individuals (Bill O’Connell, Jean O’Connell and Ajesh Patel) were “members and 

managers” of GardenWalk. Likewise it asserts that Jean O’Connell controls the SOAR 

PAC. 

These putative allegiances, however, do not establish single-personhood 

under the plain terms of the city’s CRL. After two previous efforts, OCCORD’s second 

amended complaint lacks allegations that would result in aggregation of the various 

 

6 For example, for councilmember Murray, the complaint alleges she received $1,600 from Bill 

O’Connell, $1,900 from Jean O’Connell, $1,900 from Ajesh Patel, $300 from Stovall’s Inn, $1,900 from the general 

manager of Stovall’s Inn, and $1,900 from the SOAR PAC to arrive at a grand total of $9,500 from GardenWalk 

“affiliated” contributors.
6

contributors. The CRL has no rule of looking to some amorphous affiliation between 

contributors for aggregation. Rather it lays down a series of bright lines, and OCCORD 

fails to show the various members of the contributor pool fall on the one-person side of 

those bright lines.7 

The upshot is that OCCORD’s excess contribution theory as stated in its 

second amended complaint is without the excess element.8 That’s important. It has been 

established that legal campaign contributions do not implicate the conflict of interest 

prohibition of section 1090. (See BreakZone Billiards v. City of Torrance (2000) 81 

Cal.App.4th 1205, 1230 (BreakZone)

9; All Towing Services LLC v. City of Orange (2013) 

220 Cal.App.4th 946, 957 [noting state Political Reform Act of 1974 (PRA) categorically 

excludes receipt of campaign contributions from definition of financial interest]; see also 

Woodland Hills, supra, 26 Cal.3d at p. 947, fn. 9 [noting mischief that might be done if 

campaign contributions did disqualify recipient from voting on matter related to 

donor].)10 As our Supreme Court very recently opined, councilmembers are not barred 

“from acting on matters involving contributors” – indeed, “campaign contributions are 

 

7 While the CRL’s categories may be counterintuitive, they are nonetheless clear. Perhaps the most 

obvious case in point is Bill O’Connell and his wife Jean. The CRL is quite clear that contributions by one spouse 

are not aggregated with the other spouse’s contributions. (§ 1.09.070.050.) That may or may not be the way we 

would have written the rule, but that is the rule.

8 The sharp-eyed trial judge recognized that an unreported meal “long after the vote at issue,” as 

described in a newspaper article and email mentioned in the opposition to the demurrer were not in the second 

amended complaint. We need merely note here that after two previous chances to cure any deficiencies in its 

pleading, the trial judge was within his discretion in impliedly denying any further chances to amend. 

9 The relevant passage concerning section 1090 is quite clear: “Government Code section 1090 

codified the common law prohibition of public officials having a financial interest in contracts they make in their 

official capacities. [Citations.] The purpose of this section is to prohibit self-dealing, not representation of the 

interests of others. It is the latter circumstance that confronts BreakZone. BreakZone contends that the recipients of 

political contributions voted the interest of the developer who had a history of contributing to their political 

campaigns. That allegation, whether true or not, is not forbidden by either Government Code section 1090 or 

section 87103.” (BreakZone, supra, 81 Cal.App.4th at p. 1230, citing Woodland Hills Residents Assn., Inc. v. City 

Council (1980) 26 Cal.3d 938, 946-947 (Woodland Hills), italics added.) 

10 That’s to be contrasted with the several ways in which a waste-management entrepreneur in Hub 

City Solid Waste Services, Inc. v. City of Compton (2010) 186 Cal.App.4th 1114 (Hub City) showered benefits on 

the Compton City Council in return for a franchise on the city’s waste-management services. Those included jobs 

for councilmembers’ relatives (id. at pp. 1118) and monetary gifts to other relatives (id. at pp. 1120-1121). The Hub 

City court did not discuss the question of whether the campaign contributions given by the entrepreneur were legal 

or not; it had no need to.
7

constitutionally protected and ‘do not automatically create an appearance of unfairness.’” 

(City of Montebello v. Vasquez (Aug. 8, 2015, S219052) ___ Cal.4th ___, ___ [2016 Cal. 

LEXIS 6386 at p. 25], quoting Woodland Hills, supra, 26 Cal.3d at p. 947.) The second 

amended complaint (at paragraphs 12.A.i. and 12.A.x.) makes it clear that its claims of 

illegality rest upon the alleged excessiveness of the GardenWalk-affiliated persons’ 

contributions.

11 That effort fails.

OCCORD’S other theory involves a law firm, Rutan and Tucker (Rutan). 

Back in 2012 and 2013, Rutan represented Anaheim in OCCORD’s earlier – and then 

successful – attempt to thwart the city’s attempt to enter into EAAs with GardenWalk, 

OCCORD v. City of Anaheim, case No. 30-2012-00549175 (the “175 case”). That 

attempt was successful based on a Brown Act violation. In the case now before us, 

OCCORD alleges that Rutan acted as GardenWalk’s counsel in negotiating the EAAs 

with Anaheim. Fairness requires we note here that on appeal Rutan strenuously denies

the allegation of representing GardenWalk. Rutan points out that the EAAs themselves 

indicate Gardenwalk was actually represented by another firm in the negotiations leading 

up to the March 2013 EAAs.12 We must also note there is no allegation Rutan 

represented Anaheim in negotiating those EAAs. 

Rutan’s relationship with Anaheim has been that of an independent 

contractor. The city has had its own city attorney’s office since at least as far back as 

1992 (see Guillory v. City of Anaheim (9th Cir. 1992) 979 F.2d 854 at p. 1 [nonpub. 

opn.]), but Rutan has, from time to time, also represented the city in specific litigation, 

such as the 175 case.

That independent contractor status is not dispositive for section 1090. In 

California Housing Finance Agency v. Hanover/California Management & Accounting 

 

11 Indeed, by not including a reporter’s transcript in the record, OCCORD has foregone the 

opportunity to show that it argued anything else to the trial court.

12 The EAAs themselves list the “The Busch Firm” as counsel for GardenWalk and the Anaheim 

City Attorney’s office as counsel for the city.
8

Center, Inc. (2007) 148 Cal.App.4th 682 (CHFA), this court held that a former general 

counsel of a government agency could be liable under section 1090 where he had, as an 

independent contractor after leaving his official office, exercised “‘considerable’ 

influence” in obtaining a contract from that agency for his own company. 

That said, what is lacking here, but present in the cases on which OCCORD 

relies, is an interest in the government contract itself that is sought to be invalidated under 

section 1090. In Hub City, supra, 186 Cal.App.4th 1114, a private person became a 

city’s de facto waste disposal czar with a monopoly on the city’s waste disposal services

as a result of a contract he himself negotiated. In CHFA, supra, 148 Cal.App.4th 682, the 

former general counsel of a state agency set up a private company which he owned that 

allowed him to skim off profits from government mortgage insurance premiums. In 

People v. Gnass (2002) 101 Cal.App.4th 1271, an attorney earned fees on bonds issued 

by a public financing authority for which he acted as counsel. In Campagna v. City of 

Sanger (1996) 42 Cal.App.4th 533, a deputy city attorney tried to obtain a share of a 

contingency fee obtained on litigation he himself sent to an outside law firm, and in City 

Council v. McKinley (1978) 80 Cal.App.3d 204, 207, the president and stockholder in a 

landscape architectural firm was also on the city’s park and recreation board which 

awarded a gardening contract for the firm.

Here, however, there are no allegations of any interest on Rutan’s part in 

the EAAs. The worst that can be said about the firm is that it got paid. To that, 

OCCORD responds that it would not have been retained by GardenWalk at all, but for 

Rutan’s representation of the city in the prior suit brought by OCCORD.13 

But the motivation for GardenWalk’s retention makes no difference. 

OCCORD confuses the benefits conferred by the contracts themselves (on GardenWalk 

 

13 The second amended complaint in effect admits that its allegation that Rutan represented 

GardenWalk in negotiating the EAAs with Anaheim is essentially speculative. At paragraph 12.B.ii of the second 

amended complaint, OCCORD states its belief that once it obtains discovery, it will find emails between Rutan, the 

city and GardenWalk concerning the EAAs which were the subject of the 175 case. 
9

and arguably on Anaheim) with the payment Rutan allegedly received for negotiating 

them. As the court said in Quantification Settlement Agreement Cases (2011) 201 

Cal.App.4th 758, 819: “‘[t]he interest proscribed by . . . section 1090 is an interest in the 

contract. The purpose of the prohibition is to prevent a situation where a public official

would stand to gain or lose something with respect to the making of a contract over 

which in his official capacity he could exercise some influence.’” (Italics added, quoting 

People v. Vallerga (1977) 67 Cal.App.3d 847, 867-868, fn. 5.) 

There are no facts indicating Rutan exerted sufficient influence over 

Anaheim in its decision to enter into the EAAs such that Rutan, an independent 

contractor, could be deemed a public official within section 1090 the way the 

entrepreneur in Hub City or the former general counsel in CHFA were. Indeed, the main 

point of the complaint was that a majority of the Anaheim city council itself was 

determined to enter into the EAAs because of campaign contributions from the pool of 

14, and didn’t need any influence from an outside law firm in that regard.

We cannot find here anything on which to base reversal of the trial court’s 

demurrer ruling. The judgment is therefore affirmed. Respondents shall recover their 

costs on appeal.

BEDSWORTH, ACTING P. J.

WE CONCUR:

ARONSON, J.

IKOLA, J.