Opinion ID: 2637100
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Heading: The Claims Statutes and Contract Causes of Action

Text: Section 905 requires the presentation of all claims for money or damages against local public entities, subject to exceptions not relevant here. Claims for personal injury and property damage must be presented within six months after accrual; all other claims must be presented within a year. (§ 911.2.) [N]o suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented ... until a written claim therefor has been presented to the public entity and has been acted upon ... or has been deemed to have been rejected.... (§ 945.4.) Thus, under these statutes, failure to timely present a claim for money or damages to a public entity bars a plaintiff from filing a lawsuit against that entity. ( State of California v. Superior Court (Bodde), supra, 32 Cal.4th at p. 1239, 13 Cal. Rptr.3d 534, 90 P.3d 116.) The purpose of the claims statutes is not to prevent surprise, but to provide the public entity sufficient information to enable it to adequately investigate claims and to settle them, if appropriate, without the expense of litigation. [Citations.] It is well-settled that claims statutes must be satisfied even in face of the public entity's actual knowledge of the circumstances surrounding the claim. ( City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 455, 115 Cal.Rptr. 797, 525 P.2d 701.) The claims statutes also enable the public entity to engage in fiscal planning for potential liabilities and to avoid similar liabilities in the future. (Baines Pickwick Ltd. v. City of Los Angeles (1999)-72 Cal.App.4th 298, 303, 85 Cal.Rptr.2d 74 (Baines Pickwick); see Minsky v. City of Los Angeles (1974) 11 Cal.3d 113, 123, 113 Cal.Rptr. 102, 520 P.2d 726.) Contract claims fall within the plain meaning of the requirement that all claims for money or damages be presented to a local public entity. (§ 905.) As the Baines Pickwick court noted, other statutory terms further demonstrate the Legislature's intent that the claim requirements apply to contract causes of action. (Baines Pickwick, supra, 72 Cal.App.4th at pp. 303-304, 85 Cal.Rptr.2d 74.) Section 905.2 requires the presentation of all claims against the state [f]or money or damages on express contract. (§ 905.2, subd.(b)(3).) Section 910, governing the contents of claims against both the state and local entities, requires specification of the date, place and other circumstances of the occurrence or transaction which gave rise to the claim asserted (§ 910, subd. (c), italics added), and a general description of the indebtedness, obligation, injury, damage or loss incurred.... (§ 910, subd. (d), italics added.) Section 910.2 provides that [c]laims against local public entities for supplies, materials, equipment or services need not be signed by the claimant or on his behalf if presented on a billhead or invoice regularly used in the conduct of the business of the claimant. Section 930.2 permits local government contracts to include provisions for the presentation of any or all claims arising out of or related to the agreement. (See also § 930, providing the same authorization for state contracts.) In view of these provisions, it is no surprise that courts have `routinely applied the claim requirements to contract causes of action against local government defendants. [3] The legislative history of the money or damages term of sections 905 and 945.4 confirms that they were meant to include contract claims. The current statutory scheme was the second enacted to replace a multiplicity of former claim requirements. In 1959, the Legislature acted on the Law Revision Commission's recommendation to provide a unified procedure for claims against local entities by adding former division 3.5 to the Government Code, including former sections 703 and 710, the predecessors of sections 905 and 945.4. (Stats.1959, ch. 1724, p. 4133 et seq.; Recommendation and Study Relating to the Presentation of Claims Against Public Entities (Jan.1959) 2 Cal. Law Revision Com. Rep. (1959) pp. A-7, A-8, A-11 et seq.) [4] Former section 703 referred to claims for money or damages just as section 905 does now, and former section 710 included the reference to no suit for money or damages currently found in section 945.4. As explained in the study supporting the Law Revision Commission recommendation, references to claims for damages in the pre-1959 statutes were understood to include both tort and breach of contract claims, but not ordinary claims for money due on a contract. Statutes requiring claims for money were construed to cover all forms of monetary demands including pension claims and all types of tort and contract claims. (Recommendation and Study Relating to the Presentation of Claims Against Public Entities, 2 Cal. Law Revision Com. Rep., supra, at pp. A-82, A-83, fns. omitted.) The study noted that the recommended scope of the new statutes governing claims for money or damages was consistent with that of the preexisting statutes, and stated that [i]nsofar as the claim is' one for breach of contract, the need for early investigation and negotiation is frequently as important as in the case of tort claims. (Recommendation and Study Relating to the Presentation of Claims Against Public Entities, 2 Cal. Law Revision Com. Rep., supra, at p. A-117.) Routine claims for money due were in a different category and did not require a formal claims procedure. (Ibid.) The study suggested allowing contractual waiver of compliance with the claims statutes as to causes of action founded upon express contract other than claims for damages for breach of contract. (Ibid.) Thus, it is clear that the references to money or damages now found in sections 905 and 945.4 were always intended to embrace contract as well as tort claims. (See Alliance Financial v. City and County of San Francisco, supra, 64 Cal.App.4th at pp. 641-642, 75 Cal.Rptr.2d 341.) Civic's argument that breach of contract claims are not subject to the claim requirements is based primarily on section 814, which provides: Nothing in this part affects liability based on contract or the right to obtain relief other than money or damages against a public entity or public employee. It is true that some Courts of Appeal have read section 814 to exclude contract causes of action from the scope of the claim requirements. ( Harris v. State Personnel Bd. (1985) 170 Cal.App.3d 639, 643, 216 Cal.Rptr. 274, disapproved on another point in Coleman v. Department of Personnel Administration (1991) 52 Cal.3d 1102, 1123, fn. 8, 278 Cal.Rptr. 346, 805 P.2d 300; Gonzales v. State of California (1977) 68 Cal.App.3d 621, 627, 137 Cal.Rptr. 681; National Automobile & Cas. Ins. Co. v. Pitchess (1973) 35 Cal. App.3d 62, 64-65, 110 Cal.Rptr. 649.) Others, however, have rejected that view, reasoning that section 814 pertains only to immunity from liability, and has no effect on the claims requirements. (Baines Pickwick, supra, 72 Cal.App.4th at pp. 308-309, 85 Cal.Rptr.2d 74; Loehr v. Ventura County Community College Dist, supra, 147 Cal.App.3d at p. 1079, 195 Cal. Rptr. 576; see also Crow v. State of California (1990) 222 Cal.App.3d 192, 199, 271 Cal.Rptr. 349.) This reasoning finds ample support in the language, structure, and purpose of the statutes. Section 814 is found in part 2 of the statutory scheme, which the Legislature captioned Liability of Public Entities and Public Employees. (§ 814 et seq., added by Stats.1963, ch. 1681, p. 3267.) The claim presentation requirements are in part 3, which was enacted separately. (§ 900 et seq., added by Stats.1963, ch. 1715, p. 3372; 1 Cal. Government Tort Liability Practice (Cont.Ed.Bar 4th ed. 1999) Claims Against Public Entities, § 1.45, pp. 29-30 (Cal. Government Tort Liability Practice).) Thus, the claim requirements are not included in section 814's declaration that nothing in this part affects liability based on contract. Section 814 simply reaffirms the long standing rule that governmental immunity does not encompass contractual liability. (See Souza & McCue Constr. Co. v. Superior Court (1962) 57 Cal.2d 508, 510, 20 Cal.Rptr. 634, 370 P.2d 338, citing cases.) [5] That proposition has no necessary connection to the requirement that a claim be presented before suit is filed. Prior notice of claims serves the purpose of facilitating investigation and possible settlement, whether or not the public entity would otherwise be immune from liability. (See Loehr v. Ventura County Community College Dist, supra, 147 Cal.App.3d at p. 1079, 195 Cal.Rptr. 576; People ex rel. Dept. of Parks and Recreation v. West-A-Rama, Inc. (1973) 35 Cal.App.3d 786, 794, 111 Cal.Rptr. 197.) Civic contends we invoked section 814 to exclude contract claims from the reach of the claims statutes in E.H. Morrill Co. v. State of California (1967) 65 Cal.2d 787, 56 Cal.Rptr. 479, 423 P.2d 551, and Longshore v. County of Ventura (1979) 25 Cal.3d 14, 157 Cal.Rptr. 706, 598 P.2d 866. However, in E.H. Morrill this court made no reference to the claim presentation procedures, confining itself to the question of governmental immunity. ( E.H. Morrill, supra, 65 Cal.2d at pp. 793-794, 56 Cal.Rptr. 479, 423 P.2d 551.) Nor did the Longshore court indicate that the scope of the claim requirements is affected by section 814. To the contrary, it held that the claim before it fell within a statutory exception to those requirements, and discussed the immunity exemption of section 814 as a separate matter. ( Longshore, supra, 25 Cal.3d at p. 22, 157 Cal.Rptr. 706, 598 P.2d 866.) Civic's reliance on section 814 fails. Because of the broad scope of the claim requirements, a number of Courts of Appeal have followed the suggestion in Baines Pickwick that Government Claims Act is a more appropriate short title than the traditional Tort Claims Act. (Baines Pickwick, supra, 72 Cal.App.4th at pp. 309-310, 85 Cal.Rptr.2d 74; see, e.g., Bates v. Franchise Tax Bd. (2004) 124 Cal.App.4th 367, 373, fn. 2, 21 Cal.Rptr.3d 285; Gatto v. County of Sonoma (2002) 98 Cal.App.4th 744, 750, fn. 3, 120 Cal.Rptr.2d 550; Hart v. Alameda County (1999) 76 Cal.App.4th 766, 774, fn. 2, 90 Cal.Rptr.2d 386.) [6] We agree that this practice is a useful way to reduce confusion over the application of the claim requirements. Henceforth, we will refer to division 3.6, parts 1 through 7 of the Government Code (§ 810 et seq.) as the Government Claims Act. [7]