Court Opinion

ID: 4659004
Source: CourtListenerOpinion
Date Created: 2021-02-09 22:03:05.600429+00
Date Added: 2024-06-11T08:01:56.938265
License: Public Domain

Filed 2/9/21
                            CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                              SIXTH APPELLATE DISTRICT

 ORGANIZACION COMUNIDAD DE                          H046458
 ALVISO,                                           (Santa Clara County
                                                    Super. Ct. No. CV321687)
          Plaintiff and Appellant,

          v.

 CITY OF SAN JOSE,

          Defendant and Respondent,

 MICROSOFT CORPORATION et al.,

          Real Parties in Interest and
          Respondents.

        Mark Espinoza, a member of plaintiff Organizacion Comunidad de Alviso, asked
a planner for the City of San Jose to place him on the public notice list for a proposed
project which would rezone fallow farmland for light industrial uses. He also twice
specifically requested a copy of the notice of determination (NOD) documenting the
city’s certification of an environmental impact report (EIR) and approval of the project––
once after the city council initially approved the project and again after the city council
denied a motion for reconsideration and re-approved the project. The city filed two
NOD’s for the project: the first NOD listed the wrong project applicant and a second
NOD correctly listed Microsoft Corporation. Despite Espinoza diligently and repeatedly
requesting all notices for the project, the city––inexplicably and in violation of the
                                                   1
California Environmental Quality Act (CEQA) ––failed to send Espinoza the legally
operative second NOD for the project.
       Relying on the first NOD that the city did email to Espinoza, plaintiff named the
wrong real party in interest in its initial petition for writ of mandate. Plaintiff did not file
an amended petition naming Microsoft until well after the statute of limitations had run.
The trial court determined that the initial petition was defective for failing to join
Microsoft as a necessary and indispensable party, and it dismissed the CEQA cause of
action in the amended petition as untimely. Had the trial court viewed the equities
differently in exercising its discretion and determined the CEQA action could continue
without Microsoft, the result here might be different. But that is not the case we are
asked to review.
       Plaintiff argues on appeal that the trial court applied the incorrect statute of
limitations, and alternatively that the trial court should have applied either estoppel or the
relation back doctrine (Code Civ. Proc., § 474) in light of the city’s conduct. We
acknowledge that the city violated CEQA by failing to send the second NOD to
Espinoza. But the second NOD was properly filed with the county clerk, it provided
constructive notice of the correct parties to sue, and plaintiff did not timely amend its
petition to name Microsoft. Our close examination of the relevant statutes leads us to the
uncomfortable conclusion that dismissal of the CEQA action was not error, and we must
affirm the judgment.
           I.   ADMINISTRATIVE AND TRIAL COURT PROCEEDINGS
       Both NOD’s describe the project as follows: “237 Industrial Center. The
project site, approximately 64.5 acres, is primarily fallow farmland with two single-
family houses, a mobile home, and farm-related accessory structures located near the
southern portion of the site. The site is currently supported by well water and a septic

       1
         CEQA is codified at Public Resources Code section 21000 et seq. Unspecified
statutory references are to the Public Resources Code.
                                               2
tank system. The project includes two development options. Option 1 proposes
approximately 1.2 million square feet of light industrial development and Option 2
proposes up to a 436,880 square foot data center (49.5 megawatts) with a PG&E
substation to provide the electrical needs for the data center on approximately 26.5 acres
of the site and approximately 728,000 square feet of light industrial development. The
project (both development options) includes rezoning from A(PD) – Planned
Development to L1 Light Industrial. Development Option 2 includes a special use permit
and a development exception for reduced parking requirements.”
       Mark Espinoza is a member of plaintiff Organizacion Comunidad de Alviso.
Espinoza emailed the city’s environmental project manager for the project in September
2017, asking “to be placed on the noticing list and given dates and time[s] of any public
hearings” for the project. The project manager responded by email the same day,
providing the dates of the planning commission and city council hearings for the project.
That same month, Microsoft purchased the property from the original owner (Cilker) and
filed a universal planning application with the city to take over as the project applicant.
       The city council initially considered the project and the associated EIR at a
hearing in October 2017. The city council meeting agenda did not mention Microsoft
and incorrectly referenced “Cilker Carl A And Kathleen C Trustee” as “Owners.” At the
hearing, the mayor stated: “Let’s go to the applicant first and then we’ll go to the public.
Mr. Noble, will you be speaking for Microsoft?” Cilker was referred to at the hearing as
the “previous owner.” Espinoza attended the hearing and commented on the project. The
city council certified the project EIR; approved the project, including a water supply
assessment; and imposed a mitigation monitoring and reporting program.
       Espinoza emailed the project manager two days after the October hearing,
requesting a copy of the NOD. (His first email mistakenly asked for the “NOP,” but he
almost immediately followed up with an email clarifying that he sought the NOD.) The
project manager responded that someone had moved to reconsider the project approval,
                                              3
that the city council would have an additional hearing in December 2017, and that the
city was “waiting until after the hearing to consider filing the NOD.”
       The city council reconsidered and once again approved the project and its
environmental document in December 2017. Although plaintiff’s opening brief
acknowledges that the December 2017 “hearing notice included the annotation ‘Property
Owner: Microsoft,’ ” the city council resolution approving the project still referred to the
Cilkers as “Owners” in the middle of the first paragraph. The first NOD filed by the city
with the county Clerk-Recorder incorrectly lists “Erik Schoennauer for Cilker Orchards
MGMT Corp” as the project applicant. Espinoza emailed the project manager the day
after the December hearing asking for the filed notice (again mistakenly referring to the
notice as an “NOP” rather than an NOD). The project manager responded by email and
attached the first NOD.
       The city filed a second NOD for the project five days later, correctly showing
Microsoft Corporation as the project applicant. The city did not rescind the first NOD,
and the second NOD does not refer to it in any way. Despite Espinoza’s earlier requests
for all project-related notices, the city never sent him the second NOD.
       Plaintiff filed its initial petition for writ of mandate within 30 days of the first
NOD, alleging violations of CEQA and the Planning and Zoning Law (Gov. Code,
§ 65000 et seq.). It named the city as defendant and respondent, and named as real
parties in interest Cilker Orchards Management Corp. and Erik Schoennauer. Cilker’s
attorney notified plaintiff’s counsel by letter dated January 31, 2018 (two weeks after the
30-day statute of limitations expired) that Microsoft had acquired the property and that
the city had filed a second NOD.
       Plaintiff filed the operative first amended petition for writ of mandate in
March 2018, over a month after receiving the letter from Cilker’s counsel and more than
70 days after the second NOD was filed with the county clerk. The amended petition

                                               4
alleged the same violations, but added Microsoft Corporation and Greg Deeney as real
parties in interest.
       Microsoft and Deeney demurred to the CEQA cause of action in the amended
petition, arguing that the CEQA action was time-barred because Microsoft and Deeney
were not added to the case until after the limitations period had run. The city joined in
the demurrer. Cilker and Schoennauer also demurred to the amended petition, on the
basis that they were no longer real parties in interest because they had sold the property to
Microsoft before the project was approved.
       The trial court sustained the Microsoft and Deeney demurrer without leave to
amend, finding the initial petition defective for failing to join an indispensable party
(Microsoft), and the CEQA cause of action in the amended petition untimely because
Microsoft was not sued within 30 days after the second NOD was filed. The trial court
rejected plaintiff’s estoppel and relation back arguments. The trial court also sustained
the Cilker and Schoennauer demurrer without leave to amend as to all causes of action.
After plaintiff voluntarily dismissed its Planning and Zoning Law cause of action, the
trial court entered a judgment dismissing all parties, from which plaintiff appealed as to
the city and Microsoft.
                                    II.   DISCUSSION
       We review de novo a judgment of dismissal after demurrer. (Doan v. State Farm
General Ins. Co. (2011) 195 Cal.App.4th 1082, 1091 (Doan).) We will reverse the
dismissal if the allegations in the complaint state a cause of action “under any legal
theory.” (Ibid.) We assume the truth of all facts alleged in the complaint except for facts
contradicted by judicially noticeable materials. (Stoney Creek Orchards v. State of
California (1970) 12 Cal.App.3d 903, 906; SC Manufactured Homes, Inc. v. Liebert
(2008) 162 Cal.App.4th 68, 82.)
       When a local public agency approves a project and certifies an EIR, it must “file a
notice of determination within five working days after the approval or determination
                                              5
becomes final, with the county clerk of each county in which the project will be located.”
(§ 21152, subd. (a).) “Among other things, the NOD must identify and briefly describe
the project; identify the lead agency and responsible agency (if applicable); state the date
of project approval and the agency’s environmental impact determination; report that a
negative declaration, mitigated negative declaration or EIR has been adopted, and give
the address where it may be examined; and state whether mitigation measures were
required as a condition of approval.” (Committee for Green Foothills v. Santa Clara
County Bd. of Supervisors (2010) 48 Cal.4th 32, 52 (Green Foothills).)
         CEQA’s statutory scheme evidences a clear legislative intent to “ensure extremely
prompt resolution” of lawsuits claiming violations of the statute. (Stockton Citizens for
Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481, 500.) A legal challenge to a
project approval based on a CEQA violation must be commenced within 30 days after the
date a valid NOD is filed. (§ 21167, subd. (c).) As summarized by the Supreme Court, if
a “valid NOD has been filed [citations], any challenge to that decision under CEQA must
be brought within 30 days, regardless of the nature of the alleged violation.” (Green
Foothills, supra, 48 Cal. 4th at p. 48.) However, if a notice is “materially defective”
because it omits one or more required elements, courts have found a 180-day statute of
limitations applies. (See id. at pp. 52–53; § 21167, subds. (a), (d).) “The application of a
statute of limitations based on facts alleged in the complaint is a legal question subject to
de novo review.” (Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal.App.4th 1336,
1340.)
         In addition to naming as a defendant the agency that approved the project, a
petitioner must name as a real party in interest the “person or persons identified by the
public agency” in the NOD. (§ 21167.6.5, subd. (a).) Plaintiff does not dispute that
Microsoft is both a necessary and indispensable party to this CEQA action. Failure to
join an indispensable party is a ground for demurrer. (Code Civ. Proc., §§ 430.10,
subd. (d); 389.) And failure to include a necessary and indispensable party as a real party
                                              6
in interest within the applicable limitations period is a ground for dismissal. (Sierra
Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495, 502; accord Save Our
Bay, Inc. v. San Diego Unified Port Dist. (1996) 42 Cal.App.4th 686, 699.)
       If a person makes a written request to a public agency, in advance of a specific
project’s approval, to receive the NOD for the project, “then not later than five days from
the date of the agency’s action, the public agency shall deposit a written copy of the
notice addressed to that person in the United States mail, first class postage prepaid.”
(§ 21167, subd. (f).) But significantly, the “date upon which this notice is mailed shall
not affect” the statute of limitations. (Ibid.)
   A. THE CITY VIOLATED CEQA BY NOT SENDING PLAINTIFF THE SECOND NOD
       A public agency must send the relevant notice (here, the second NOD) within five
days after the project is approved to any person who has “made a written request to the
public agency for a copy of the notice ... prior to the date on which the agency approves
or determines to carry out the project.” (§ 21167, subd. (f).) Espinoza emailed the
project manager a month before the project was initially approved by the city council,
asking “to be placed on the noticing list and given dates and time[s] of any public
hearings” for the project. He also asked specifically for the NOD by email to the project
manager after the project was initially approved in October, and again after the city
council re-approved the project in December. Despite Espinoza’s requests, the city
inexplicably failed to send him the second NOD. The city violated section 21167,
subdivision (f) by failing to do so. But as we will explain, CEQA contains no remedy for
that violation, and it is not properly our role to create one where the Legislature has not.
   B. PLAINTIFF FAILED TO TIMELY SUE MICROSOFT
       It is undisputed that plaintiff did not sue Microsoft until more than 30 days after
the second NOD was filed with the county clerk. Plaintiff’s addition of Microsoft to the
case via the amended petition was untimely if a 30-day limitations period applies.
Plaintiff makes two arguments based on the CEQA statutory scheme to circumvent the
                                                  7
30-day statute of limitations: that the longer 180-day CEQA statute of limitations
applies; and that plaintiff’s untimely filing should be excused because the city violated
CEQA by not sending Espinoza the second NOD despite his written request to receive all
notices related to the project.
       When an NOD is materially defective for not including all information required by
CEQA and the CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), courts have
applied CEQA’s fallback 180-day statute of limitations. (See Green Hills, supra,
48 Cal.4th at pp. 52–53.) Plaintiff does not claim that anything in the second NOD was
incorrect or missing. Plaintiff instead suggests that the reasoning of the defective notice
cases should apply here because the effect of “the City’s posting two NODs containing
conflicting, contradictory, legally operative information concerning the identity of the
Project applicant, where it neither rescinded the first NOD nor otherwise publicly
indicated that it was inaccurate, is that the City never posted a legally adequate NOD at
all.” That assertion is not supported by the authorities plaintiff cites. The second NOD
contained all required information and was therefore not defective. As a legally proper
NOD, it triggered the 30-day statute of limitations to challenge the project. (§ 21167,
subd. (c).) The trial court therefore correctly concluded that plaintiff’s initial petition was
defective for failing to name Microsoft, and also that the statute of limitations barred the
amended petition which was filed more than 30 days after the second NOD was filed.
       Plaintiff argues any failure to timely sue Microsoft is not plaintiff’s fault but the
city’s, because the city violated section 21167, subdivision (f) when it failed to send
                                                  2
Espinoza the second NOD as he had requested. We agree that the city violated CEQA

       2
           Plaintiff also suggests the city violated the notice requirements of
section 21092.2, subdivision (a), but that section applies only to individuals who have
“filed a written request for notices with either the clerk of the governing body or, if there
is no governing body, the director of the agency.” (§ 21092.2, subd. (a).) There is no
evidence any member of plaintiff’s organization requested notices from either of those
officials.
                                              8
by not sending the second NOD. But that violation cannot excuse or cure the amended
petition’s untimeliness because section 21167, subdivision (f) itself provides that the
“date upon which [the NOD] is mailed shall not affect” the statute of limitations to
commence a CEQA action. The NOD is the limitations trigger under CEQA. The
Supreme Court has made clear that it is the “responsibility of potential litigants to review
these notices, and any revisions, with care.” (Green Hills, supra, 48 Cal.4th at p. 54.)
Although the city failed to send the second NOD to Espinoza, that NOD was duly filed
with the county clerk and available for review by all potential litigants before plaintiff
filed its initial petition. It is not for us to legislate a remedy for the city’s violation of
section 21167, subdivision (f), particularly where the remedy plaintiff seeks would
conflict with express provisions of that very statute.
       Plaintiff claims, without citation to authority, that while the “mere posting of a
NOD at the County Clerk’s office may work to provide constructive notice to the public
generally, it cannot work to provide actual or constructive notice to a party who has
properly requested the NOD” under section 21167, subdivision (f). The argument is
contrary to settled principles of filed notices providing constructive notice to all potential
litigants. (Stockton Citizens for Sensible Planning v. City of Stockton, supra,
48 Cal.4th 481, 502.) We also note that plaintiff appears to have had actual notice of
Microsoft’s status well before the limitations period expired. Plaintiff’s members
participated in city council hearings at which Microsoft was identified as the property
owner, and the public notice for the December hearing listed Microsoft as the owner.
       Plaintiff complains that affirming the judgment will force future CEQA petitioners
to “make repeated trips to the County Clerk’s office to check for newly posted notices, or
make repeated requests to agency officials, just to ensure that no superseding NOD was
ever posted.” We observe that notices of the sort at issue here are increasingly available
electronically which facilitates public access to them. We nonetheless understand and
share plaintiff’s frustration at not being able to rely on the environmental document sent
                                                9
by the city in response to specific requests. That said, the Legislature has identified the
NOD as the trigger for the statute of limitations, and the Supreme Court has emphasized
that potential litigants must pay close attention to those filings before initiating litigation.
We conclude, therefore, that the trial court properly applied the foregoing standards and
did not err in finding plaintiff’s amended petition untimely under CEQA.
   C. THE RELATION BACK DOCTRINE
       Plaintiff argues the trial court erred by not applying the relation back doctrine of
Code of Civil Procedure section 474 to allow it to substitute Microsoft in place of one of
the fictitiously named Doe real parties in interest. “When the plaintiff is ignorant of the
name of a defendant, he must state that fact in the complaint, or the affidavit if the action
is commenced by affidavit, and such defendant may be designated in any pleading or
proceeding by any name, and when his true name is discovered, the pleading or
proceeding must be amended accordingly.” (Code Civ. Proc., § 474.) A plaintiff’s
ignorance must be genuine and based on a lack of knowledge of the defendant’s
connection with the case. (General Motors Corp. v. Superior Court (1996)
48 Cal.App.4th 580, 594.) If a plaintiff satisfies those requirements, the amendment
relates back to the filing of the original petition or complaint such that the “statute of
limitations stops running as of the date the original complaint was filed.” (Id. at p. 589.)
Trial courts also have discretion, “in furtherance of justice, and on any terms as may be
proper, [to] allow a party to amend any pleading or proceeding by adding or striking out
the name of any party.” (Code Civ. Proc., § 473, subd. (a)(1).)
       As we have discussed, the statute of limitations to challenge the adequacy of an
EIR begins to run when a valid NOD is filed. We acknowledge the city’s notices and
project-related documents, both at the planning stage and in the first NOD, sometimes
referenced the former project applicant instead of Microsoft. But the legally operative
second NOD, which was filed with the county clerk and readily available to potential
litigants, correctly referred to Microsoft. The city’s filing of the second NOD with the
                                               10
county clerk provided constructive notice of Microsoft’s identity precluding plaintiff’s
ability to claim genuine ignorance. There is also evidence that plaintiff (through
individual members) likely had actual notice that Microsoft was referred to as the project
applicant during at least one public hearing on the project and in the public notice of the
second approval hearing. And plaintiff received actual notice of the second NOD from
Cilker’s attorney in January 2018. Despite learning about the second NOD by the end of
January 2018 at the latest, plaintiff did not file its amended petition until March 2018 – a
delay longer than even the initial limitations period. Given the constructive and likely
actual notice of Microsoft’s identity as the project applicant, any claim of plaintiff’s
ignorance of that status is unreasonable as a matter of law.
       Plaintiff points to no case in which the relation back doctrine has been allowed
where a party had constructive notice of the identity of a fictitiously named defendant.
Plaintiff cites Garrison v. Board of Directors (1995) 36 Cal.App.4th 1670 using the
following parenthetical summary: “amended CEQA writ petition filed after 30-day
limitations period relates back to date [of] original petition’s timely filing, where no
change to ‘basic set of facts’ and amendment only addressed party identities.” Plaintiff
omits the crucial detail that the substituted party in Garrison was a plaintiff, not a
defendant or real party in interest. (Id. at p. 1678 [noting the “notice policy [of the statute
of limitations] was therefore satisfied [because the defendant] received notice of the
nature of the action within the 30-day limitations period”].)
       Plaintiff also argues without citation “the burden is on a defendant asserting a
statute of limitations defense to prove that a petitioner ‘knowingly acted in bad faith and
that actual prejudice to the substituted party occurred due to the timing of the
substitution.’ ” We have been unable to locate any authority containing the language
quoted by plaintiff. To the contrary, even one of plaintiff’s own authorities contains this
statement: “[I]f the identity ignorance requirement of [Code of Civil Procedure]
section 474 is not met, a new defendant may not be added after the statute of limitations
                                              11
has expired even if the new defendant cannot establish prejudice resulting from the
delay.” (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 177.) We see no error in not
applying Code of Civil Procedure section 474.
   D. ESTOPPEL
       Plaintiff argues the city and Microsoft should have been equitably estopped from
asserting the statute of limitations defense. To rely on the doctrine of equitable estoppel,
plaintiff must show: (1) the city knew about the second NOD; (2) the city intended to
keep plaintiff from learning about the second NOD by sending Espinoza the first NOD
and failing to send him the second NOD; (3) plaintiff did not know about the second
NOD; and (4) plaintiff detrimentally relied on Espinoza not receiving the second NOD
despite his written request. (See Feduniak v. California Coastal Com. (2007)
148 Cal.App.4th 1346, 1359.) When, as here, equitable estoppel is alleged against a
public entity, the plaintiff must also show that the “injustice which would result from a
failure to uphold an estoppel is of sufficient dimension to justify any effect upon public
interest or policy which would result from the raising of an estoppel.” (City of Long
Beach v. Mansell (1970) 3 Cal.3d 462, 496–497.) The “existence of an estoppel is
generally a question of fact” (Albers v. County of Los Angeles (1965) 62 Cal.2d 250,
266), but estoppel can be denied if the asserted reliance was unreasonable as a matter of
law. (Penn-Co v. Board of Supervisors (1984) 158 Cal.App.3d 1072, 1081.)
       Even assuming arguendo that the city’s failure to send Espinoza the second NOD
was intentional rather than inadvertent, plaintiff’s reliance on that failure would be
unreasonable as a matter of law. As with our discussion of the relation back doctrine,
plaintiff’s equitable estoppel argument fails because the city’s timely filing of the second
NOD with the county clerk gave constructive notice to all potential litigants of the correct
parties to name in a CEQA action. Citizens for a Responsible Caltrans Decision v.
Department of Transportation (2020) 46 Cal.App.5th 1103, cited by plaintiff, is factually
distinguishable. In that case a state agency promised a citizens group it would circulate
                                             12
an EIR and file an NOD, but it instead filed a notice of exemption for the project, which
the citizen’s group did not become aware of until after the applicable statute of
limitations had run. Finding that the agency was equitably estopped from asserting a
time bar on demurrer, the appellate court stated, “Caltrans knew of its position that the
Project was exempt from CEQA and would approve the Project and file an NOE, but
nevertheless made misrepresentations to CRCD and the public, as described ante, that it
would approve the Project only after circulation of the FEIR and then would file an NOD
in compliance with CEQA.” (Id. at p. 1133.) In contrast here, the city’s failure to
provide individual notice to Espinoza did not affect the fundamental process followed nor
the filing of public notice of that process (in the form of the second NOD).
   E. LEAVE TO AMEND
       A trial court abuses its discretion when it sustains a demurrer without leave to
amend if there is a reasonable possibility any defect identified by the defendant can be
cured by amendment. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)
Plaintiff argues the trial court should have allowed leave to amend the petition to assert
estoppel against the city, and to allege that the city violated section 21167, subdivision (f)
by failing to send Espinoza the second NOD.
       As we have explained, the elements of estoppel are not met here, and the city’s
violation of section 21167, subdivision (f) did not affect the requirement to name
Microsoft as a real party in interest before the limitations period expired. As neither of
plaintiff’s proposed amendments would cure the failure to timely sue Microsoft, the trial
court did not abuse its discretion by sustaining the demurrer without leave to amend.
                                  III.    DISPOSITION
       The judgment of dismissal is affirmed. Each party shall bear its own costs on
appeal.

                                             13
                                        ____________________________________
                                        Grover, J.

WE CONCUR:

____________________________
Greenwood, P. J.

____________________________
Danner, J.

H046458 - Organizacion Comunidad De Alviso v. City of San Jose
Trial Court:                        Santa Clara County Superior Court
                                    Case No. CV321687

Trial Judge:                        Hon. Helen E. Williams

Counsel for Plaintiff/Appellant     Mark Raymond Wolfe
ORGANIZACION COMUNIDAD              M. R. Wolfe & Associates, P. C.
DE ALVISO

Counsel for Defendant/Respondent    Margo Laskowska
CITY OF SAN JOSE                    Office of the City Attorney
                                    City of San Jose

Real Party in Interest/Respondent   Arthur F. Coon
MICROSOFT CORPORATION               Matthew C. Henderson
                                    Miller, Starr & Regalia