1

Filed 2/25/22 Schmier v. City of Berkeley CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or 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

FIRST APPELLATE DISTRICT

DIVISION ONE

KENNETH J. SCHMIER,

Plaintiff and Appellant,

v.

CITY OF BERKELEY,

Defendant and Respondent.

 A161556

 (Alameda County

 Super. Ct. No. 

RG19036596)

This is an appeal from a judgment of dismissal following the sustaining 

of a demurrer without leave to amend on the ground the case is barred by the 

90-day statute of limitations set forth in Government Code section 66499.37.1

We reverse.

BACKGROUND

In 1996, appellant Kenneth J. Schmier converted two apartment units 

in Berkeley into condominiums.2 At that time, Berkeley Municipal Code 

section 21.28.060(A) required that an owner converting an apartment to a 

1 All further undesignated statutory references are to the Government 

Code.

2 This was a joint project with his brother, Eric Schmier. However, 

Eric Schmier is now deceased, and Schmier is the sole plaintiff as “the owner 

in fee simple of two real properties which are condominium units . . . in the 

City of Berkeley.” 
2

condominium execute and record a lien on the property obliging the owner to 

pay an “ ‘Affordable Housing Fee’ ” based on a formula set forth in the code. 

Accordingly, Schmier executed two lien agreements as a condition of approval 

of the conversion.

The agreements provided in part, “[e]ach of the duties of the 

undersigned is created in consideration of the City’s approval of an 

Application for Conversion of TIC to Condominiums for the undersigned prior 

to the payment of the full Affordable Housing Fee required by law. . . .” 

(Boldface omitted.) It further specified, 

“[t]he undersigned represent and agree that they intend to 

convert this unit and that the applicable Affordable Housing Fee is 30 

percent of the difference between the sale price of the unit when it is 

sold as a condominium and eight (8) times the annual rental value at 

the time of the application for conversion. The annual rental value, 

$6040.56, is 12 times the permanent rent ceiling of $503.38. Eight 

times the annual rental value (8X503.38X12) is equal to $48,324.48. 

Thus, the Affordable Housing Fee would be calculated at the time of 

sale as 30 percent of the difference between the sales price and 

$48,324.48. . . . [S]aid sum will be paid . . . at the time of sale of this 

converted unit.” (Boldface omitted.) 

The lien agreements also provided,“Execution of this document shall 

not prejudice the right of the undersigned to challenge the validity of the 

Affordable Housing Fee. In the event that the Affordable Housing Fee is 

determined to be invalid by a court of competent jurisdiction, or is rescinded 

by the City of Berkeley, this lien shall be void and have no effect.” 

In his first amended complaint, Schmier alleged that more than 10

years later, in 2008, Berkeley “formally rescinded [Berkeley Municipal Code
3

section] 21.28.060(A) under which the Liens were demanded by [Berkeley] 

and recorded, and instead enacted [Berkeley Municipal Code section] 

21.28.070. . . .” The new code section sets forth a different formula for 

calculation of the affordable housing fee, under which the fee owed by 

Schmier is significantly less.

Another 10 years later, in February 2019, counsel for Schmier “advised 

[Berkeley] in writing of [Schmier’s] intention to sell . . . and that escrow had 

opened on the sale at a gross selling price of $539,000.” Berkeley responded 

with a request that Schmier pay an affordable housing fee of $147,202.66, 

calculated under the long since rescinded section of the municipal code. Had 

the city applied the current code section, the fee would have been less than 

half of what was requested. 

Schmier “formally protested”the requested fee on multiple grounds, 

including that Berkeley Municipal Code section 21.28.060(A) had been 

rescinded, rendering the liens void by their own terms. Berkeley rejected 

Schmier’s protest on July 29, 2019 and demanded payment of $147,202.66 

upon the close of escrow. Schmier filed the instant action on September 25, 

2019. 

Berkeley interposed a demurrer to Schmier’s first amended complaint3

on the ground the action is barred by the 90-day statute of limitations set 

forth in the Subdivision Map Act (Gov. Code, § 66410 et seq.) section 

66499.37, which, according to the Berkeley, commenced running more than 

20 years earlier when Schmier signed the lien agreements. Berkeley further 

asserted “the facts alleged in the [first amended complaint] show that the 

Affordable Housing Fee imposed on each of [Schmier’s] units as a condition of 

3 The court had sustained Berkeley’s demurrer to Schmier’s initial 

complaint with leave to amend. 
4

their conversion to condominiums was not rescinded by City of Berkeley 

Ordinance No. 7,025.” 

The trial court sustained the demurrer without leave to amend, ruling 

Schmier “entered into an agreement involving the city Ordinance that existed 

at the time the agreement [was] memorialized in a recorded lien. Whether or 

not the ordinance was later rescinded or amended is immaterial. The City 

may still enforce the agreed upon recorded lien on the property.”4

DISCUSSION

Schmier contends the Subdivision Map Act’s statute of limitations is 

inapplicable, and even if it were applicable, it did not begin running until the 

instant dispute arose over the meaning of the language of the lien 

agreements.

“[I]t is difficult for demurrers based on the statute of limitations to 

succeed because (1) trial and appellate courts treat the demurrer as 

admitting all material facts properly pleaded and (2) resolution of the statute 

of limitations issue can involve questions of fact. Furthermore, when the 

4 Our standard of review is well-established. “ ‘We review the trial 

court’s sustaining of the general demurrer independently, and “[o]ur task in 

reviewing a judgment of dismissal following the sustaining of a demurrer is 

to determine whether the complaint states a cause of action.” [Citation.] We 

treat the demurrer as admitting all the properly pleaded material facts and 

consider matters which may be judicially noticed, but we do not treat as 

admitted contentions, deductions, or conclusions of fact or law. [Citation.] 

Further, “ ‘we give the complaint a reasonable interpretation, reading it as a 

whole and its parts in their context.’ ” [Citation.] Because a demurrer tests 

only the legal sufficiency of the pleading, we accept as true even the most 

improbable alleged facts, and we do not concern ourselves with the plaintiff’s 

ability to prove its factual allegations. [Citation.] “Facts appearing in 

exhibits attached to the first amended complaint also are accepted as true 

and are given precedence, to the extent they contradict the allegations.” ’ ” 

(Gray v. Dignity Health (2021) 70 Cal.App.5th 225, 236, fn. 10.)
5

relevant facts are not clear such that the cause of action might be, but is not 

necessarily, time-barred, the demurrer will be overruled. [Citation.] Thus, 

for a demurrer based on the statute of limitations to be sustained, the 

untimeliness of the lawsuit must clearly and affirmatively appear on the face 

of the complaint and matters judicially noticed.” (Coalition for Clean Air v.

City of Visalia (2012) 209 Cal.App.4th 408, 420, fns. omitted (Visalia).)

Section 66499.37 provides in part, “Any action or proceeding to attack, 

review, set aside, void, or annul the decision of an advisory agency, appeal 

board, or legislative body concerning a subdivision, or of any of the 

proceedings, acts, or determinations taken, done, or made prior to the 

decision, or to determine the reasonableness, legality, or validity of any 

condition attached thereto, including, but not limited to, the approval of a 

tentative map or final map, shall not be maintained by any person unless the 

action or proceeding is commenced and service of summons effected within 90 

days after the date of the decision. Thereafter all persons are barred from 

any action or proceeding or any defense of invalidity or unreasonableness of 

the decision or of the proceedings, acts, or determinations. . . .”

Schmier maintains he has never disputed “the reasonableness or 

legality of any condition” of approval of the condominium conversion. Rather, 

what is in dispute is the meaning of certain language in the lien 

agreements—that “ ‘[i]n the event that the Affordable Housing Fee is . . . 

rescinded by the City of Berkeley, this lien shall be void and have no 

effect’ ”—that arose in light of circumstances that did not even exist at the 

time of the approval. 

Berkeley asserts, in contrast, that Schmier “conced[ed] that the liens 

are a condition of approval of a subdivision that is subject to the Subdivision 

Map Act . . . [and] that this action challenges a condition of approval of a 
6

subdivision” and therefore “cannot avoid the conclusion that the action is 

untimely . . . [because it was] filed more than two decades too late.” Berkeley 

cites to paragraphs 8 and 9 of Schmier’s first amended complaint in support 

its assertion. 

Berkeley misreads the amended complaint. What Schmier actually 

alleged in those two paragraphs is “a ‘[c]ondominium conversion is the 

process of subdividing a multi-unit property into separately owned housing 

units with individual mortgages. . . .’ [¶] Plaintiff alleges that ‘[s]uch 

[s]ubdivisions are regulated under the California Subdivision Map Act and 

Subdivided Lands Act.’ ” He further alleged that “[o]n February 27, 1996, 

pursuant to [Berkeley Municipal Code section] 21.28.060(A), Plaintiff 

executed and recorded . . . the liens demanded by [Berkeley] on the 

Properties, as a mandatory precondition of approval of Plaintiff’s conversion 

application. . . .” 

What these paragraphs allege are the historic facts—that Schmier 

applied for a conversion approval and executed the documents required for 

the approval. They do not allege that Schmier is contesting the imposition of 

any of the conditions of approval. Rather, as the remainder of Schmier’s 

allegations make clear, this dispute, which could not possibly have existed at 

the time of the conversion approval, concerns the meaning of certain 

language in the lien agreements and the consequences of Berkeley’s alleged 

rescission of the then-operative Berkeley Municipal Code provision and 

enactment of a new provision in its place. 

Berkeley’s reliance on Aiuto v. City and County of San Francisco (2011) 

201 Cal.App.4th 1347 is misplaced. In Aiuto, the plaintiffs were owners of 

condominium units subject to restrictions imposed by San Francisco’s Below 

Market Rate Condominium Conversion Program (BMR Program). (Id. at 
7

p. 1350.) The plaintiffs’ complaint “challeng[ed] [the] adoption of the 

ordinance,” specifically alleging a regulatory taking, state law preemption, 

and a violation of their civil rights. (Id. at p. 1352.) They sought “to set aside 

the City’s decision to adopt [the] ordinance.” (Id. at p. 1359.) Because the 

plaintiffs challenged the adoption of the ordinance, itself, the court held “the 

90-day litigation limitation period prescribed by section 66499.37 applies to 

plaintiffs’ facial claims.” (Id. at pp. 1359–1360.) Schmier made no such facial 

claim—he did not challenge the requirement that he execute a lien 

agreement, nor did he challenge the city’s adoption of the former Affordable 

Housing Fee code section, or its alleged recission thereof and adoption of a 

new code section.

Thus, Schmier’s complaint is not subject to the 90-day limitations 

period set forth in the Subdivision Map Act.5 

But even if it were, Schmier correctly maintains it did not begin to run 

until the instant dispute over the meaning of the lien agreement language.

Honchariw v. County of Stanislaus (2020) 51 Cal.App.5th 243 (Honchariw), to 

which Schmier cites, is illustrative. 

In Honchariw, the plaintiff sought to divide a parcel of land into eight 

residential lots. (Honchariw, supra, 51 Cal.App.5th at p. 246.) The county 

ultimately approved the plaintiff’s application, subject to 42 “conditions of 

approval.” (Id. at p. 249.) Certain of these pertained to water supply and fire 

hydrants. (Id. at pp. 249–250.) The plaintiff interpreted the conditions to 

mean “a functional fire suppression system was not required for approval of a 

final map and, instead, could be built out as the lots were developed.” (Id. at 

5 Schmier also asserts section 66499.37 does not apply to this action 

because the voidness provision of the lien agreement is “self-executing.” We 

need not and do not reach this claim.
8

p. 253.) The county, however, interpreted the conditions to “ ‘require the 

Developer to install a fire suppression system based on functional fire 

hydrants’—something the draft developer agreement did not require.” (Id. at 

p. 252.) The plaintiff filed an action for declaratory and writ relief, which the 

trial court denied, agreeing with the county’s reading of the conditions. (Id.

at p. 253.) 

On appeal, the county maintained the 90-day statute of limitations in 

the Subdivision Map Act barred the suit because the plaintiff’s complaint

assertedly challenged the “ ‘reasonableness, legality, or validity of any 

condition.’ ” (Honchariw, supra, 51 Cal.App.5th at p. 255.) The appellate 

court ruled otherwise, explaining section 66499.37 “covers lawsuits 

challenging a variety of decisions by the local agency and lawsuits ‘to 

determine the reasonableness, legality, or validity of any condition attached,’ 

to a decision about a subdivision.” (Honchariw, at p. 255.) However, the 

plaintiff’s “main issue is not with the reasonableness, legality or validity of 

any of the conditions of approval adopted in May 2012. Instead, he contends 

the County has misinterpreted and misapplied the conditions of approval.” 

(Ibid.) Accordingly, the statute of limitations period did not accrue until “the 

interpretation of the conditions of approval set forth in the June and July 

2017 correspondence of the [County, which] is the act or determination being 

challenged in this lawsuit.” (Ibid., italics omitted.)

The analysis in Honchariw is equally apropos here—the limitations 

period did not accrue until the city disagreed with Schmier as to the meaning 

of the language in the lien agreements. Indeed, the city’s assertion that the 

90-day period commenced at the time the conversion project was approved 

defies logic given that the events giving rise to the instant dispute did not 

exist at that time but occurred more than 20 years later. Like the plaintiff in 
9

Honchariw, Schmier did not challenge the reasonableness, legality or validity 

of any of the conditions of approval of the condominium conversion. Rather, 

he alleged Berkeley “misinterpreted and misapplied” the language of the lien 

agreements stating,“this lien shall be void and have no effect” if the 

affordable housing fee is “rescinded by the City of Berkeley.” 

Thus, even assuming the 90-day statute set forth in section 66499.37 

applies, as in Honchariw, it could not have begun to run until Berkeley 

rejected Schmier’s assertion that the lien agreement, by its own terms, was 

no longer operative when the city rescinded the then-applicable municipal 

code provision.6

In sum, “the untimeliness of the lawsuit [did not] clearly and 

affirmatively appear on the face of the complaint,” (Visalia, supra, 

209 Cal.App.4th at p. 420), and the court erred in sustaining the demurrer to 

the first amended complaint on that basis.

Although the trial court sustained Berkeley’s demurrer solely on the 

basis of the 90-day statute of limitations, Berkeley demurred on the 

additional ground that the “facts alleged in the Petition show that the 

Affordable Housing Fee imposed on each of [Schmier’s] units as a condition of 

their conversion to condominiums was not rescinded by City of Berkeley 

Ordinance No. 7,025.” Berkeley reasserts this ground on appeal, asserting 

6 Berkeley asserts it did not interpret the terms of the lien agreements

but simply applied “the mathematical formula in the lien agreements to 

calculate the amount of the Affordable Housing Fees.” Schmier, however, is 

not challenging the calculation itself. Rather, he disputes the city’s reading 

of the agreements as requiring use of the formula set forth in the allegedly 

rescinded ordinance despite the agreements’ provisions that “[i]n the event 

that the Affordable Housing Fee is . . . rescinded by the City of Berkeley, this 

lien shall be void and have no effect,” a dispute that did not arise until the 

city disagreed with Schmier.
10

Schmier’s “interpretation of the lien agreements is incorrect,” because he 

“conflates the so-called ‘rescission’ of an ordinance with the rescission of the 

‘Affordable Housing Fee’ defined by the lien agreements.”7 

At this juncture, we have only the amended complaint before us. 

Schmier alleged that Berkeley “rescinded [Berkeley Municipal Code section] 

21.28.060(A) under which the Liens were demanded by [Berkeley] and 

recorded and instead enacted [Berkeley Municipal Code section] 21.28.070,” 

which provided for a new, differently calculated, Affordable Housing Fee. He

further alleged the “Affordable Housing Fee” under the lien agreement 

specifically referred to the “Affordable Housing Fee required by law,” which 

at the time was Berkeley Municipal Code section 21.28.060(A). In short, 

Schmier alleged the “Affordable Housing Fee” under the lien agreement was 

rescinded when Berkeley rescinded the ordinance imposing it.

The language of the lien agreements is ambiguous, rendering both 

Schmier’s alleged interpretation and the Berkeley’s asserted construction 

arguably reasonable. “ ‘[W]here an ambiguous contract is the basis of an 

action, it is proper, if not essential, for a plaintiff to allege its own 

construction of the agreement. So long as the pleading does not place a 

clearly erroneous construction upon the provisions of the contract, in passing 

upon the sufficiency of the complaint, we must accept as correct plaintiff’s 

allegations as to the meaning of the agreement.’ ” (Aragon-Haas v. Family 

Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239 (Aragon-Haas).) 

“Where a complaint is based on a written contract which it sets out in full, a 

general demurrer to the complaint admits not only the contents of the 

7 “ ‘We affirm if any ground offered in support of the demurrer was well 

taken.’ ” (Modacure v. B&B Vehicle Processing, Inc. (2018) 30 Cal.App.5th 

690, 694, italics omitted.)
11

instrument but also any pleaded meaning to which the instrument is 

reasonably susceptible. [Citation.] While plaintiff’s interpretation of the 

contract ultimately may prove invalid, it was improper to resolve the issue 

against her solely on her own pleading. ‘In ruling on a demurrer, the 

likelihood that the pleader will be able to prove his allegations is not the

question.’ ”

8

(Aragon-Haas, at p. 239.)

Schmier’s first amended complaint does not place a “ ‘clearly erroneous 

construction’ ” on the voidness provisions of the lien agreements. (AragonHaas, supra, 231 Cal.App.3d at p. 239.) Accordingly, sustaining the 

demurrer on this ground would likewise have been improper.

DISPOSITION

The judgment is reversed with directions to the superior court to vacate 

its order sustaining the demurrer to the first amended complaint without 

leave to amend and enter a new order overruling the demurrer. Schmier is 

entitled to recover his costs on appeal.

8 Indeed, extrinsic evidence may be necessary to show the meaning of 

the lien agreement. “ ‘Where the meaning of the words used in a contract is 

disputed, the trial court must provisionally receive any proffered extrinsic 

evidence which is relevant to show whether the contract is reasonably 

susceptible of a particular meaning. [Citations.] . . . Even if a contract 

appears unambiguous on its face, a latent ambiguity may be exposed by 

extrinsic evidence which reveals more than one possible meaning to which 

the language of the contract is . . . reasonably susceptible.’ ” (Wolf v. Superior 

Court (2004) 114 Cal.App.4th 1343, 1350–1351.)
12

_________________________

Banke, J.

We concur:

_________________________

Margulies, Acting P.J.

_________________________

East, J.*

*Judge of the San Francisco Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.

A161556, Schmier v. City of Berkeley