Filed 11/ 1 /21 ; Certified for Publication 12/ 1/21 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT
AWARD HOMES, INC.,
Plaintiff and Appellant,

v.

COUNTY OF SAN BENITO et al ., Defendants and Respondents. H044894 (San Benito County Super. Ct. No. CU1500099)

Tax sharing agreements between the County of San Benito and the City of Hollister require the city to pay the county a fixed fee (referred to as the “Additional Amount”) for each residential unit constructed on land that is annexed into the city from the county . Plaintiff is a real estate developer who entered into development agreements
with the city to build residential units on land subject to the city

- county tax sharing

agree ments. Plaintiff agreed in those documents to satisfy certain obligations from the tax sharing agreements , but sued the city and the county seeking a declaration that payment of the Additional Amount is not among plaintiff’s obligations

. After two court trials, judgment was ultimately entered against plaintiff. For the reasons stated here, we
will affirm the judgment , concluding that plaintiff agreed to pay the city the Additional Amount fees as part of the development agreements.2 I. TRIAL COURT PROCEEDING S
A. T AX S HARING A GREEMENTS B ETWEEN THE C ITY AND THE C OUNTY The city and the county entered into a “Master Agreement for Tax Transfer Upon
Annexation” in 1999 ( the 1999 tax sharing agreement) . (Capitalization omitted.) The agreement was based on Revenue an d Tax ation Code section 99, which authorizes counties and cities to enter into master property tax transfer agreements for the exchange of property tax revenues when a city annexes unincorporated territory

. By its terms the agreement applies to “all those local agency boundary changes defined in Revenue and Taxation Code section 95(e) as jurisdictional changes, occurring during the applicable period of this agreement, where County is the affected county and City is an affected city.”
T he city agreed to pay “an additional amount for property annexed as residential property within the affected territory in an amount equal to $7,000 for each single family dwelling unit ultimately created within the affected territory.” The Additional Amount
“shall accrue a t the time the City issues a building permit” for a ny structure on a particular parcel of land . The agreement state s that the Additional Amount “shall be construed to be a real property tax revenue transfer , ” and that the city agreed to pay the
Additional Amount “regardless of the revenue source” the city identified to make the payments. T o ensure the county receive s the Additional Amount fees , the city agreed
that the county can “deduct the Additional Amount then owed

... fro m City’s property tax allocation whether such allocation is derived from the affected territory or any area
with in the incorporated territory” of the city

. Two other fees provided for in the tax sharing agreement are relevant here . The city agreed to “ adopt a Capital Improvement Impact Fee for county jail and juvenile hall facilities,” to be “imposed on all new residential construction in the C ity.” The city agreed to transfer to the county the capital improvement fee multiplied by the number of
buildi ng permits issued within the city. The provision requiring the city to pay the county3

the Additional Amount regardless of revenue source is incorporated by reference to apply to the capital improvement fee. The city also agreed to “establish, impose and collect a drainage impact fee on all residential and commercial development within the Santa Ana Creek Drainage area,” to be used by the city to implement an existing drainage plan. The 1999 tax sharing agreement expired by its terms in 2010. The city and the county entered into a new “Master Agreement for Tax Transfer Upon Annexation” in 2011 ( the 2011 tax sharing agreement) . The 2011 tax sharing agreement included the Additional Amount obligation, and increased it to $9,500 per single family dwelling unit. The trigger for the Additional Amount also changed : rather than at building permit issuance, under the 2011 agreement the Additional Amount

accrue s when the city “signs off on a final occupancy permit for any structure on a particular parcel of la nd within the affected territory.” T he city again agreed in the 2011 tax sharing agreement to pay the Additional Amount s regardless of the revenue source identified by the city , and the county is allowed under the agreement to deduct the
Additional Amount fees from the city’s property tax allocation to the extent the city does not timely pay any Additional Amount. The capital improvement and drainage fee provisions are essentially the same in the 1999 and 2011 tax sharing agreement s

. The 2011 agreement expire d in January 2020.
B. A GREEMENTS B ETWEEN P LAINTIFF AND THE C ITY Plaintiff entered into a development agreement with the city in 2000 for
construction of residential units on property referred to as West of Fairview. The property was located in an unincorporated area that the city planned to annex. A prefatory recital states: Plaintiff’s “agreement to make the dedications and commitments provided for herein, including without limitation the commitment to assure that the Development pay its own way, constitutes a material factor in City’s willingness to approve and execute this Development Agreement.” The development agreement provides: “Nothing in this Agreement shall prevent application to [plaintiff]

... of any4

provision of the City’s General Plan, any City ordinance, any part of the City municipal code or any resolution or other official enactment of the City which is adop ted for the purpose of assuring that development in the City

... will generate revenues adequate in the City’s judgment to fully pay for all costs of the City associated with or anticipated to result from such development, including without limitation cost s for ongoing municipal services and continuing provision of municipal facilities at levels deemed appropriate by the City (a ‘Pay Its Own Way Measure’).” The agreement also requires plaintiff to pay a $340 fiscal neutrality fee per residential unit, and to satisfy “Developer’s obligations” in the 1999 tax sharing agreement between the city and the county

. Central to this litigation, t he development agree ment does not define what is meant by “ D eveloper’s obligations.”
The West of Fairview annexation was approved by the county’s local agency
formation commission in 2004

. As a condition of the city’s approval of the tentative tract map for the West of Fairview project, plaintiff agreed that the “fees required under the [199 9 tax sharing agreement ] shall be paid with each building permit.” The condition of approval refers specifically to the “Developer’s obligations” section of the West of Fairview development agreement as the source of responsibility for those fees

. Plaint iff and the city entered into an annexation agreement for property referred to as Ladd Ranch in 2014. Like the West of Fairview property, Ladd Ranch was in an unincorporated area set to be annexed into the city

. Plaintiff committed in the annexation

agre ement to “ensure that the proposed development pays its own way and eliminates or minimizes the financial burden on City services and facilities created by development of the subject property.” Plaintiff also agreed “to hold and use the subject property i n compliance with and subject to all City ordinances, resolutions, and policies, and in compliance with all applicable provisions” of the 2011 tax sharing agreement. The Ladd
Ranch annexation was approved by the county’s local agency formation commission in
20 14.5

C. L ITIGATION Plaintiff wrote to the city and the county in 2015 seeking “confirmation” that there
was “no valid legal basis” for the city o r the county to require plaintiff to pay the Additional Amount for any residential unit plaintiff constructs

. Neither the county n or the city responded, and plaintiff commenced this litigation the following month. The complaint alleges plaintiff was “threatened with demands from either the defendant C ity
or defendant C ounty , or both, for payment of the unlawful ‘annexation fees’ as conditions of obtaining necessary development permits and approvals.” The complaint allege s two causes of action. First, the complaint seeks a declaration that there is “no lawful basis for either defendant, individually or collectively, to impose, or threaten to impose and demand payment of any ‘annexation fees’ in any amount as a condition to issuing building permits or any other development permit or approval for the [plaintiff’s ] projects, and that [plaintiff’s ] projects may not be subjected to such fee demands or obligations.” Second, the complaint alleges plaintiff was denied equal protection because similarly situated developers are not charged the Additional Amount. The case proceeded to a court trial in 2016, and the trial court concluded that plaintiff could not be charged the Additional Amount. T he county successfully moved for a new trial. The order granting a new trial vacated and set aside the first judgment
and mandated that a “new trial shall be had in thi s action as to all issues.” The trial court identified two issues as the “reasons for granting relief”: plaintiff’s lack of standing to challenge the tax sharing agreements, and that an applicable statute of limitations might bar plaintiff’s complaint. But the order stated the court had not determined “which party may prevail on the issues to be retried.” After a new trial was granted, the city cross

complained against the county alleging that the Additional Amount is not authorized by
Revenue and Tax at ion Code section 99 and is therefore unenforceable

. The second trial occurred in 2017. T he trial court ultimately found in favor of the county. The court stated it was denying the “relief requested by [plaintiff] and the City of6

Hollister on their respe ctive complaint[] and cross

- complaint” because the court was “influenced by the arguments on statute of limitations, the limitation of actions, the
validation issues.” The trial court also found plaintiff had no standing to challenge the city

- county tax s haring agreements because plaintiff was not a party to them. The court stated: “The city and the county entered into a contract, and the developer and city entered into contracts, and I believe that those contracts are subject to being enforced.” No par ty requested a statement of decision. The court entered a new judgment denying “all relief to Plaintiff Award Homes as prayed for in the Complaint.”
II. DISCUSSION Plaintiff and the county briefed th e direct appeal. The city cross

- appealed, but has
since settled with the county and dismissed its cross

- appeal. Though the city did not file a respondent’s brief in the direct appeal, it filed a letter joining the county’s supplemental brief regarding plaintiff ’s liabilit y for the Additional Amount through plaintiff’s development agreements with the city.
A. S TANDARD OF R EVIEW AND S COPE OF D ECLARATORY R ELIEF

“ Any person interested under a written instrument

... or under a contract, or who
desires a declaration of his or her rights or duties with respect to another

... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action

... for a declaration of his or her rights and duties

... including a
determinatio n of any question of construction or validity arising under the instrument or

contract. ” (Code Civ. Proc., § 1060.) In a declaratory relief action where, as here, the underlying facts are undisputed, we review de novo the trial court’s interpretation of a written instrument

. ( Hott v. College of Sequoias Comm unity College Dist. (2016)
3 Cal.App.5th 84, 95

. ) In interpreting a written instrument, we consider the instrument as

a whole “ so as to give effect to every part, if reasonably practicable, each clau se helping to interpret the other. ” (Civ. Code, § 1641; Sprinkles v. Associated Indemnity Corp. (2010) 188 Cal.App.4th 69, 82.)7

The parties dispute whether various limitations statutes bar plaintiff’s action for declaratory relief. L imitations “ ‘applic able to ordinary actions at law and suits in equity should be applied in like manner to actions for declaratory relief.’ ” ( Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 463.) When “ ‘declaratory relief is sought “before
there has been a breach of the obligation in respect to which said declaration is sought,” or within the statutory period after the breach, the right to such relief is not barred by lapse of time.’ ” ( Ibid. ) Here, plaintiff promptly sought a declaration of its rights and
duties un der the West of Fairview development agreement and the Ladd Ranch
annexation agreement after learning that the city would attempt to collect the Additional
Amount fees on units in those projects . I ts action under Code of Civil Procedure
section 1060 seeking declaratory relief is therefore timely as to whether the development
and annexation agreement s compel payment of the Additional Amount fees. And as a party to both the development agreement and the annexation agreement, plaintiff has standing to seek a declaration of its rights and duties under them.
I nterpreting th ose agreements to determin e whether plaintiff must pay the
Additional Amount is a question properly before the court, but plaintiff’s cause of action seeking to invalidate the Addi tional Amount as not having been “legally established” when the 1999 and 2011 tax sharing agreements were signed is untimely . “While the court in a declaratory relief action may properly determine questions as to rights and duties arising out of an existi ng contract [ c itations], it may not make a new contract for the parties or, in lieu of construing an existing contract, incorporate new obligations into it.” ( Culbertson v. Cizek (1964) 225 Cal.App.2d 451, 462.) W hether the Additional Amount was properly calculated when the city and county negotiated the 1999 and 2011 tax sharing agreement s is also not within the scope of our review, as the issue effectively
calls for this court to rewrite the annexation agreement and development agreement.
Under even th e most generous statute of limitations that might arguably govern a challenge to the amount of those fees (i.e., the four

- year statute for actions on a contract8

under Code of Civil Procedure section 337), plaintiff’s action is untimely as to the 1999
and 2 011 tax sharing agreements. Plaintiff attempts to avoid the timeliness issue by arguing the Additional Amount is void ab initio as not authorized by Revenue and Taxation Code section 99. But Revenue and Taxation Code section 99, subdivision (d) broadly a uthorizes counties to “develop and adopt a master property tax transfer agreement” with a local agency like the city, and we see nothing so fatally defective in the Additional Amount obligations to render their very creation void

. Because no party request ed a statement of decision under Code of Civil Procedure section 632, we apply the doctrine of implied findings and presume the trial court made all necessary factual findings supported by substantial evidence. ( Acquire II, Ltd. v.
Colton Real Estate Grou

p (2013) 213 Cal.App.4th 959, 970.) Plaintiff refers to findings of fact made by the trial court after the first trial that it contends were supported by the evidence. But the trial court unambiguously granted a new trial “as to all issues,” which
nullif ied any findings it had made in the first trial.
B. W EST OF F AIRVIEW D EVELOPMENT Plaintiff signed a development agreement for the West of Fairview project requiring it to satisfy the “Developer’s o bligations” from the 1999 tax sharing agreement.
Plaintiff argues it is not liable for any Additional Amount because: (1) the 1999 tax sharing agreement had expired before plaintiff requested building permits ; and (2) even assuming the Additional Amount obligation survi ved termination of the tax sharing agreement , the West of Fairview development agreement did not impose that obligation on plaintiff because the Additional Amount is a city obligation under the 1999 tax sharing agreement rather than a “Developer’s obligati on .”

1. The 1999 Tax Sharing Agreement Applies to West of Fairview The 1999 tax sharing agreement was in effect from 1999 to 2010, and applied to “all those local agency boundary changes

... occurring during the applicable period of this agreement, where Co unty is the affected county and City is the affected city.” Among9

other things, the agreement requires the city to pay the county the Additional Amount for each single family dwelling unit constructed on “property annexed as residential property
within th e affected territory.” “The Additional Amount owed by the City to County shall accrue at the time City issues a building permit for any structure on a particular parcel of land within the affected territory.” The agreement contains two relevant trigger ev ents: the date residential property is annexed, and the date the city issues a building permit for any structure on a particular parcel. The city becomes liable under the agreement for the Additional Amount as of the annexation date; however, the Additio nal Amount does not come due until the second

event occurs

–– when the city issues a building permit . Because the West of Fairview property at issue here was annexed in 200 4 while the 1999 tax sharing agreement was in
effect , the city owes the county the Ad ditional Amount for any single family dwelling unit that is ultimately constructed on the property. As the liability was incurred before the agreement expired, it is irrelevant that building permits were not issued until several years later. Plaintiff argues that because the agreement expired in 2010, it “was no longer of any force and effect at the time of [plaintiff’s] request for building permits in 2015.” But

n othing in the 1999 tax sharing agreement suggests that obligations created by i t would cease to exist merely because a project annexed during its effective period was not
constructed until after the agreement expired. T he fiscal neutrality goal of the 1999 tax sharing agreement would not be served by such an interpretation because i t would create an incentive to delay developing annexed property to evade paying the Additional Amount. By interpreting the 1999 tax sharing agreement as we do here , the county is
certain to receive the Additional Amount for residential units constructed on land annexed during the term of the tax sharing agreement even if, as here, construction does not occur until after the agreement ’s expiration

.10

2. Plaintiff Owes the Additional Amount to the City for West of Fairview
We requested supplemental briefing a bout whether the phrase “Developer’s obligations” in the development agreement makes plaintiff liable to the city for the
Additional Amount . Plaintiff argues that because the Additional Amount is an obligation of the city to the county under the 1999 tax sharing agreement, it cannot be a “Developer’s obligation.” Plaintiff contends the reference to “Developer’s obligations” in the development agreement means only the capital improvement and drainage fees discussed in the 1999 tax sharing agreement. T he county (joined by the city) argues that “Developer’s obligations” include the Additional Amount. Plaintiff argues the Additional Amount is unlike the capital improvement and drainage impact fees in that the 1999 tax sharing agreement requires the city to impose
th e latter two fees on developers. Indeed, the Additional Amount is owed by the city to the county for each single family dwelling unit constructed within West of Fairview , while t he capital improvement fee must be “imposed on all new residenti al construction
in the C ity,” and the drainage impact fee similarly must be imposed “on all residential and commercial development within the Santa Ana Creek Drainage area.” We view this
as a distinction without a difference. T he 1999 tax sharing agreeme nt requires all three fees to be imposed on new development , and we find it reasonable to conclude that the parties intended “Developer’s obligations” to include the Additional Amount as well as the capital improvement and drainage impact fees.
Our conc lusion is supported by the prefatory statement of intent in the development agreement that “Developer’s agreement to make the dedications and commitments provided for herein, including without limitation the commitment to assure that the Development pay it s own way, constitutes a material factor in City’s willingness to approve and execute this Development Agreement.” Interpreting the development agreement to exclude the Additional Amount without any explicit language to that effect11

would contradict the pa rties’ stated intent to ensure that plaintiff’s development pay its

own way. The timing of payments called for by the conditions of the tentative map approval
for West of Fairview also supports the interpretation that the Additional Amount fees are
“Devel oper’s obligations” under the development agreement. As a condition of approval, plaintiff agreed that “fees required under the [1999 tax sharing agreement] shall be paid with each building permit.” The 1999 tax sharing agreement uses the identical trigg er for payment of the Additional Amount , which “shall accrue at the time City issues a building permit” for a residential structure on the property

. Plaintiff also argues that the Additional Amount fees are different from the capital improvement fees b ecause the 1999 tax sharing agreement requires the city to pay the Additional Amount and provides the county a remedy to withhold the city’s property tax allocation if the city does not do so. Plaintiff contends that if “the Additional Amount
was to be a developer’s obligation, then the [Development] Agreement would have also provided for alternative remedies against the developer for nonpayment to the City.” But plaintiff overlooks that the 1999 tax sharing agreement provides for the same remedy if the city does not pay the capital improvement fee. The 1999 tax sharing agreement states that “paragraph 6 [regarding the county’s ability to withhold property taxes] shall apply to this supplemental amount” of capital improvement fees. That the 1999 tax sharing agreement provides the same remedy in relation to both the capital improvement fee and the Additional Amount further supports uniform treatment as Developer’s obligations under the development agreement. Plaintiff appears to su ggest that because the Additional Amount is not referred to

as a “ fee ” in the 1999 tax sharing agreement, it cannot be treated the same as the capital improvement and drainage fees under the development agreement. But the development agreement does not us e the term “fees” at all and instead requires plaintiff to satisfy the “Developer’s obligations.” T hat the Additional Amount is not referred to as a fee in the12

1999 tax sharing agreement is therefore of no consequence in interpreting the development agree ment

. Plaintiff points to section 8.4 of the development agreement, which states: “No third party who is not a party hereto or a successor or assign of a party hereto, may claim the benefits of any provision hereof, and any party who is in fact so benefi tted shall have no rights greater than those that would be held by any member of the public affected by such actions or enactments without regard to this Development Agreement.” Plaintiff contends that because the county is not a party to the development agreement, the

“ County’s claim that the developer, under the terms of the development agreement, is required to pay to the County the Additional Amount is expressly precluded by” the development agreement. Whether or not plaintiff has any obligation to pa y the Additional Amount directly to the county , the distinction does not absolve plaintiff of the obligation to pay the Additional Amount to the city

. The county relies heavily on the development agreement’s Pay its Own Way provision, which applies to off icial enactments by the city of “any provision of the City’s General Plan, any City ordinance, any part of the City municipal code or any resolution or other official enactment of the City which is adopted for the purpose of assuring that development in th e City

... will generate revenues adequate

... to fully pay for all costs of the City associated with or anticipated to result from such development.” (2 JA 397

- 398.) Because we conclude that plaintiff is responsible for the Additional Amount as a
“Devel oper’s obligation” under the development agreement, we need not decide whether the “Pay its Own Way” provision from the development agreement provides an independent basis for requiring plaintiff to pay the Additional Amount. By the terms of the West of Fairview development agreement, p laintiff must pay

to the city the Additional Amount (calculated according to the 1999 tax sharing agreement) for each residential unit in the West of Fairview project.13

C. L ADD R ANCH D EVELOPMENT Plaintiff agreed in the La dd Ranch annexation agreement to “hold and use the subject property in compliance with and subject to all City ordinances, resolutions, and policies, and in compliance with all applicable provisions” of the 2011 tax sharing agreement between the city and t he county. We requested supplemental briefing about
whether the Additional Amount is an “ applicable provision ” of the 2011 tax sharing agreement. (W e note that the Ladd Ranch property was annexed in 2014 during the applicable term of the 2011 agreement, and therefore the city must pay the county the Additional Amount for any residential structure built in the Ladd Ranch development according to the terms of the 2011 tax sharing agreement .) Plaintiff argue s that the annexation agreement’s reference to “applicable provisions” of the 2011 tax sharing agreement must mean only the capital improvement and drainage impact fees because those fees are the only provisions in the tax sharing agreement “which indisput ably apply to the developer.” Th e argument is premised on the same reasoning as plaintiff’s arguments about the West of Fairview agreement, and it
fails for the same reason: none of the fees “indisputably apply to the developer,” and the
three fees are s ufficiently similar to support the conclusion that the Additional Amount
section is an “ applicable provision ” of the 2011 tax sharing agreement as referenced in the Ladd Ranch annexation agreement . Our conclusion is also consistent with plaintiff’s promis e in the annexation agreement to “ensure that the proposed development pays its own way and eliminates or minimizes the financial burden on City services and facilities created by development of the subject property.” If plaintiff were not responsible for the Additional Amount, the Ladd Ranch development would not pay its own way because the city would bear the cost of those fees ultimately paid to the county

. By the terms of the Ladd Ranch annexation agreement, plaintiff must pay to the city the Addi tional Amount (calculated according to the 2011 tax sharing agreement) for
each residential unit in the Ladd Ranch project.14 III. DISPOSITION The judgment is affirmed. Plaintiff must pay to the city the applicable Additional
Amount for residential units constructed in the West of Fairview and Ladd Ranch developments. Each party shall bear its own costs on appeal. (Cal. Rules of Court,
rule 8. 278(a)(5).)____________________________________ Grover, J.

WE CONCUR:

____________________________ Greenwood, P. J.

____________________________ Danner , J

.

H044894

- Award Homes, Inc. v. County of San Benito et al.Filed 12/1/ 21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT
AWARD HOMES, INC.,
Plaintiff and Appellant,

v.
COUNTY OF SAN BENITO et al.,

Defendants and Respondents. H044894 (San Benito County Super. Ct. No. CU1500099)
ORDER GRANTING REQUEST FOR PUBLICATION

BY THE COURT: Pursuant to California Rules of Court, rule 8.1105(b), the request for publication is hereby granted. It is ordered that the opinion in this matter filed on November 1, 2021 , shall be certified for publication.

Dated:

______________________________ _______ Greenwood, P . J.

_____________________________________ Grover, J.

_____________________________________ Danner , J.Trial Court: San Benito Superior Court Case No. CU15000999

Trial Judge: Hon. Harry J. Tobias
Counsel for Plaintiff/Appellant AWARD HOMES, INC. Norman E. Matteoni Matteoni, O'Laughlin & Hechtman

David P. Lanferman Rutan & Tucker, LLP Counsel for Defendant/Respondent COUNTY OF SAN BENITO Barbara Jeanne Thompson Office of the County Counsel County of San Benito
Michael George Colantuono Ryan Thomas Dunn Colantuono, Highsmith & Whatley, PC
Counsel for Defendant/Respondent CITY OF HOLLISTER Jason Stuart Retterer Johnson, Rovella, Retterer, Rosenthal & Gilles, LLP
Paul Anthony Rovella JRG Attorneys at Law

H04 4894

– Award Homes, Inc. v County of San Benito et al.