Broad Beach Geologic Hazard etc. v. 31506 Victoria Point LLC ( 2022 )

Filed 8/2/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
BROAD BEACH GEOLOGIC
HAZARD ABATEMENT B304699
DISTRICT,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. BC684646)
v.
31506 VICTORIA POINT LLC et
al.,
Defendants and Respondents.
BROAD BEACH GEOLOGIC
HAZARD ABATEMENT B309296
DISTRICT,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. BC684646)
v.
31506 VICTORIA POINT LLC et
al.,
Defendants and Appellants.
APPEALS from a judgment and order of the Superior
Court of Los Angeles County, Mitchell L. Beckloff, Judge.
Affirmed.
Colantuono, Highsmith & Whatley, Michael G.
Colantuono, Ryan Thomas Dunn and Liliane M. Wyckoff;
Elkins Kalt Weintraub Reuben Gartside, Kenneth A. Ehrlich
and John M. Bowman for Plaintiff and Appellant and
Plaintiff and Respondent Broad Beach Geologic Hazard
Abatement District.
Burke, Williams & Sorensen, Kevin D. Siegel and
Megan A. Burke for League of California Cities, California
State Association of Counties, California Special Districts
Association, and California Association of GHADs as Amici
Curiae on behalf of Plaintiff and Appellant.
Tantalo & Adler and Michael S. Adler for Defendants
and Respondents and Defendants and Appellants 31506
Victoria Point LLC, E. Jane Arnault, the Hopkins Family
Trust, the WWV Trust and JLA Seawall, LLC.
Greenspoon Marder and Matthew D. Kanin for
Defendant and Respondent and Defendant and Appellant
Gayle Pritchett Macleod, Trustee of the Pritchett Family
Trust.
2
Alston & Bird, Nicki Carlsen, Andrea Warren and
Julia Consoli-Tiensvold for Defendants and Respondents
Christopher Cortazzo Trust, Zbonfire, LLC, CI Properties,
LLC and Three Chips Realty Investments, LLC.
____________________________________________
INTRODUCTION
The City of Malibu formed appellant, the Broad Beach
Geologic Hazard Abatement District (the District), to protect
the homes on the city’s Broad Beach, threatened by
longstanding shoreline erosion. The District developed a
plan to import sand and maintain a revetment on portions of
the beach, in order to fortify the shoreline. To fund this
project, it proposed a special assessment on parcels within
its boundaries, and homeowners approved the assessment. 1
Litigation ensued, in which the District filed an action
seeking to validate the assessment, and the homeowners
opposing the assessment claimed it violated the
requirements of Proposition 218 (Prop. 218; also known as
the Right to Vote on Taxes Act), which added article XIII D
to the California Constitution, limiting local government’s
1 “[A] special assessment is ‘levied against real property
particularly and directly benefited by a local improvement in
order to pay the cost of that improvement.’” (Silicon Valley
Taxpayers’ Assn., Inc. v. Santa Clara County Open Space
Authority (2008) 44 Cal.4th 431, 442 (Silicon Valley).)
3
ability to impose assessments.2 (Apartment Assn. of Los
Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal.4th
830, 835.)
Before the trial court, the challengers claimed the
District violated Prop. 218 by, inter alia: (1) failing to
consider and exclude from the assessment general benefits
2 Undesignated article references are to the California
Constitution.
The provisions of Prop. 218 require, inter alia, that an
assessment be imposed only for a “special benefit” conferred on
real property, that any “general benefits” from the relevant
project be separated from special benefits, and that the
assessment on any parcel be proportionate to the special benefit
conferred on it. (Art. XIII D, § 4, subd. (a).) A special benefit is
defined as “a particular and distinct benefit over and above
general benefits conferred on real property located in the district
or to the public at large,” excluding a general enhancement of
property value. (Art. XIII D, § 2, subd. (i).) The measure also
precludes an assessing agency from exempting parcels owned by
public entities from assessment. (Ibid.)
Among the assessment’s challengers were the respondents
in the District’s appeal or their predecessors in interest. The
respondents are: 31506 Victoria Point LLC, E. Jane Arnault, the
Hopkins Family Trust, the WWV Trust, and JLA Seawall, LLC
(the West End parties); the Christopher Cortazzo Trust, Zbonfire,
LLC, CI Properties, LLC, and Three Chips Realty Investments,
LLC (the East End Parties); and Gayle Pritchett MacLeod, as
trustee of the Pritchett Family Trust (Pritchett). Some of these
parties sold their Broad Beach properties following the trial
court’s ruling, but continue to have a financial interest in the
invalidation of the assessment because of past payments or
because they seek an award of attorney fees.
4
from the project, in the form of recreational benefits from the
expected wide sandy public beach; (2) failing to consider
special benefits from the revetment, which protected only
some of the homes on the beach, (3) failing to assess two
county-owned parcels that were subject to assessment, and
(4) assigning unsupported special benefits to properties on
the west end of the beach, which would not receive direct
sand placement under the project. The trial court ultimately
agreed with the challengers on these issues and invalidated
the District’s assessment.
After the court’s ruling on the merits, the challengers
sought attorney fees under Code of Civil Procedure section
1021.5 (Section 1021.5), which codified the private attorney
general doctrine of attorney fees. The trial court denied
their motions, concluding that each of the challengers had a
sufficient financial incentive to bring the litigation without
the expectation of a fee award, rendering an award
inappropriate. In these consolidated appeals, the District
challenges the trial court’s invalidation of its assessment,
while two appealing assessment challengers (the West End
Parties and Pritchett) contest the court’s denial of attorney
fees.
In its appeal, the District contests all the trial court’s
grounds for invalidating its assessment. It contends, inter
alia, that it was not required to account for general benefits
from the widened beach because these recreational benefits
did not impose additional costs, were not part of the project’s
purpose, and were required by state agencies which
5
compelled the District to maintain public access to the
beach.3
As discussed below, we hold that Prop. 218 required
the District to separate and quantify general benefits from
the widened beach, regardless of whether those benefits
imposed additional costs and without regard to the District’s
subjective intent in designing the project. That state
agencies precluded the District from hindering public access
to the improved beach neither removed its general benefits
nor exempted them from consideration. We further agree
with the trial court that the District was required to consider
special benefits from the revetment to relevant homes, and
to assess the county-owned parcels.4 Accordingly, we affirm
the court’s judgment invalidating the assessment.
In their appeal of the order denying their motions for
attorney fees, the challengers claim the court erred, inter
alia, in determining they had a meaningful financial interest
in the litigation, in calculating the amount of any such
interest, and in failing to recognize special circumstances
that warranted an award of fees despite such interest. We
3 With our permission, the League of California Cities, the
California State Association of Counties, the California Special
Districts Association, and the California Association of GHADs
filed a brief as amici curiae in support of the District.
4 We do not decide whether the assessment on west end
parcels was sufficiently supported, as we conclude the District
has forfeited its contentions on this point by failing to raise them
in its opening brief.
6
discern no error in the court’s determination and weighing of
the challengers’ financial interest in the litigation, and
conclude the court was not compelled to award fees to
homeowners who were sufficiently incentivized and well able
to fund the litigation. We therefore affirm the court’s order
denying attorney fees as well.
BACKGROUND
A. Broad Beach and the Formation of the District
Broad Beach is a roughly one-mile-long public beach in
the City of Malibu. Along the beach are 121 private parcels,
most of which contain homes, as well as two county-owned
parcels containing public-access stairs. Historically a wide
beach, Broad Beach has been consistently narrowing since
the early 1970s, with its shoreline retreating about 65 feet
between 1974 and 2009. It now consists of a narrow strip of
sand, and little to no dry beach is present at high tide levels.
Continuing erosion threatens the homes along the beach,
and several homes were lost or damaged during storm
events over the years. In 2010, a voluntary association of
Broad Beach residents (the Trancas Property Owners’
Association) constructed a temporary rock revetment to
protect 78 of the homes at the central and eastern parts of
the beach. The temporary revetment was constructed partly
on state land, apparently without sufficient authorization.
In June 2011, seeking a long-term solution to the
erosion of the beach and the threat to Broad Beach homes,
the Trancas Property Owners’ Association petitioned the city
7
to form a geologic hazard abatement district under Public
Resources Code section 26500 et seq. The city obliged by
forming the District, which encompasses all of Broad Beach.5
B. The Project
After its formation, the District adopted a plan to
provide “sand nourishment” for the beach, proposing to
import hundreds of thousands of cubic yards of sand to
restore the width of the beach and provide a protective
barrier for the District’s parcels. The District also sought to
obtain a permit for the permanent retention of the
temporary revetment.
Following extensive negotiations with the California
Coastal Commission (the Commission) to obtain required
permitting for the project, the Commission provided a
conditional permit for an initial 10-year period, imposing
many limitations and requirements on the District. Among
other things, the Coastal Commission prohibited the District
from placing sand at the west end of the beach, due to
environmental concerns. While allowing the District to
retain the revetment, the Commission required it to ensure
5 A geologic hazard abatement district is a political
subdivision of the state and may be formed to, among other
purposes, prevent, mitigate, abate, or control a geologic hazard.
(Pub. Resources Code, §§ 26525, 26570.) In order to achieve its
purposes, it has the power, inter alia, to “[a]cquire, construct,
operate, manage, or maintain improvements on public or private
lands.” (Id., § 26580, subd. (a).)
8
the relocation of its eastern portion landward, onto
homeowners’ lands. Affected landowners agreed to bear the
costs of the revetment’s relocation and to contribute lands for
its new placement. Like the temporary revetment, the
planned permanent revetment would not protect all of the
homes on the beach.
To mitigate environmental impact from the project’s
features, including the revetment, the Coastal Commission
required the District to create and maintain a system of
sand dunes to serve as habitat areas for certain plant and
animal life. The Commission also imposed various
conditions intended to ensure convenient public access to the
beach.6 Relatedly, the California State Lands Commission
6 As part of its efforts to ensure public access to the beach,
the Coastal Commission required the District to obtain
“springing licenses” from owners of property on which the
revetment would lie, to allow public passage over private lands to
the beach, under certain circumstances. While the trial court
sustained a challenge to the assessment relating to this
requirement, it is undisputed that this ground is no longer at
issue due to changed circumstances following the trial court’s
judgment. We therefore do not discuss the springing licenses
requirement.
The Coastal Commission also imposed technical
requirements relating to the minimum width of the nourished
beach. Among other things, the Commission provided that if the
District failed to consistently maintain “at least a 30-foot wide
sandy beach over the 10[-]year period,” its application for an
additional 10-year term would be required to include an
evaluation of all feasible alternatives to the retention of the
revetment without changes.
9
agreed to forgo rent for the revetment’s encroachment onto
state land, conditioned on the maintenance of at least 10 feet
of dry sand seaward of the revetment, to allow unrestricted
public access. However, the State Lands Commission
required the District to pay $500,000 for the temporary
revetment’s prior, unauthorized use of state lands.
C. The 2017 Assessment and Engineer’s Report
Shortly after its formation, the District proposed an
annual assessment on parcels within its boundaries to fund
its project on Broad Beach, and the assessment was
approved by the property owners. It proposed an adjusted
assessment in 2015, after learning that the Coastal
Commission would not allow it to deposit sand at the west
end of the beach, and this assessment was also approved by
the property owners.
In late 2017, after learning of additional regulatory
requirements and receiving updated cost estimates, the
District proposed another adjusted assessment, which is the
subject of this appeal. In support of its proposed assessment,
the District produced an engineer’s report describing the
project and discussing special and general benefits to be
generated by it.7
7 Under Prop. 218, a proposed assessment must be supported
by “a detailed engineer’s report . . . .” (Art. XIII D, § 4, subd. (b).)
The assessing agency must notify owners of relevant parcels of
the proposed assessment and allow them to vote on it. (Art. XIII
(Fn. is continued on the next page.)
10
The District divided assessed parcels into three
assessment tiers (100 percent, 75 percent, and 25 percent of
base rate), based on the expected added beach width in the
area in front of a parcel. Parcels on the west end, which
were to receive no direct sand nourishment, were placed in
the 25 percent tier, as the report projected they would
benefit from westward migration of sand placed elsewhere
on the beach. Vacant parcels were to receive a discounted
rate. The District did not assess the county-owned parcels.
Whether properties would be protected by the revetment was
not a factor in the District’s methodology. 8
The engineer’s report identified six special benefits
from the project: (1) protection from erosion due to wave
action; (2) protection from flooding associated with storms;
(3) protection from sea-level rise; (4) access to the beach;
(5) prevention of blight; and (6) “consequential protection of
properties to the west of the beach improvements to the
D, § 4, subds. (c), (d).) Votes must then be weighted “according to
the proportional financial obligation of the affected property.”
(Art. XIII D, § 4, subd. (e).) If a weighted majority of the votes
opposes the assessment, it may not be imposed. (Ibid.)
8 The properties of most East End Parties were placed in the
100 percent tier, with one vacant lot receiving a discounted rate.
The properties of the Pritchett Family Trust and four of the West
End Parties were placed in the 25 percent tier. The property of
JLA Seawall, the remaining member of the West End Parties
that stood to receive some sand nourishment, was placed in the
75 percent tier. None of these properties was to be covered by the
permanent revetment.
11
extent of natural littoral movement.” It concluded the
project would not provide substantial general benefits for
purposes of Prop. 218. While acknowledging the advantage
to the public in the project’s addition of publicly accessible
beach area, the report stated this result was “legally
compelled” in order to satisfy the requirements of state
agencies, and thus did not constitute a general benefit for
purposes of Prop. 218.
However, seeking to employ a “conservative . . .
analysis,” the report assumed these benefits would
constitute general benefits, and estimated they would
amount to “no more than 2 percent of the total benefit
generated by the Project.” The report asserted that
non-assessment resources would fund the general benefits,
pointing to the revetment homeowners’ agreement to fund
and contribute land for the relocation of the revetment. As
for the county-owned parcels, which encompassed thousands
of square feet each, the report stated that the unassessed
special benefits enjoyed by them would also be funded
through the revetment homeowners’ contribution. The
District’s 2017 proposed assessment was approved by a
weighted majority of the voting homeowners.
D. Challenges to the 2017 Assessment
A number of homeowners sought a writ of mandate to
set aside the District’s latest assessment. Given the
litigation, the District decided to collect only 10 percent of
the difference between the 2017 assessment and the 2015
12
assessment, pending resolution of all legal challenges to its
recent assessment. The District subsequently filed a
validation action under Code of Civil Procedure section 860
et seq., to adjudicate all challenges to the assessment in one
proceeding, and the trial court related the proceedings.
Twelve groups of property owners, including the West End
Parties, the East End Parties, and Pritchett, filed answers in
the District’s action.9 The assessment challengers claimed
that the District violated Prop. 218 by, inter alia, (1) failing
to properly quantify and separate general benefits from the
project, (2) failing to consider special benefits from the
revetment, (3) failing to assess the county-owned parcels,
and (4) assigning unsupported special benefits to the west
end properties.
E. The Trial Court’s Ruling on the Merits, and the
Challengers’ Motions for Attorney Fees
Following a trial on the administrative record, the
court invalidated the District’s assessment as inconsistent
with Prop. 218’s requirements. In a detailed 22-page
statement of decision, the court first concluded the District
had failed to properly quantify general benefits from the
9 Initially, in December 2017, only three of the West End
Parties -- 31506 Victoria Point, E. Jane Arnault, and the Hopkins
Family Trust -- filed an answer opposing the District’s validation
action. The remaining two members of the group, JLA Seawall
and the WWV trust filed their answers and joined the group in
April 2018.
13
project, finding no support for the argument that “legally
compelled” benefits could be disregarded, and finding the
District had intentionally sought to “recreate the wide sandy
beach that existed in the 1970s.” As to the engineer’s
estimate of up to 2 percent in general benefits, the court
noted it was unsupported by any analysis and found it
arbitrary. Second, the court agreed with the challengers
that the District was required to consider the additional
special benefits from the revetment to the homes protected
by it. Third, the court found the District was required to
assess the county-owned parcels.
Finally, the court concluded the assessment of west
end properties was unsupported, finding unreliable the
model used by the engineer’s report to estimate the amount
of added beach expected on the west end of the beach, and
faulting the report for providing no analysis of the degree of
added protection from projected sand additions. While the
District argued the owners of the west end parcels would
receive other special benefits, including recreational benefits
from the wider sandy beach and protection from blight that
would occur if high tides destroyed their neighbors’ homes,
the court determined these did not constitute special benefits
because the general public would enjoy the same benefits.10
10 After the court’s ruling, the District circulated a new draft
engineer’s report and declared its intention to propose a new
assessment that complied with the court’s decision. However, the
District paused its plans for a new assessment in October 2020.
We deny as unnecessary the East End Parties’ request for
(Fn. is continued on the next page.)
14
As discussed more fully below, following the court’s
entry of judgment, several groups of challengers filed
motions for attorney fees under Section 1021.5. The trial
court denied their motions. The District timely appealed the
trial court’s judgment invalidating its assessment, while the
West End Parties and Pritchett timely appealed the court’s
denial of their motions for attorney fees. We consolidated
the appeals.
DISCUSSION
A. The District’s Appeal of the Trial Court’s
Invalidation of the Assessment
Challenging the trial court’s invalidation of its
assessment, the District claims: (1) it was not required to
account for general benefits from the widened public beach
because these benefits did not impose additional costs, were
not part of the project’s purpose, and were required by state
agencies; (2) it was not required to consider special benefits
from the revetment because this was a preexisting facility,
rather than a part of its project; and (3) it was not required
to assess the county-owned parcels because the project would
benefit the public-access stairs and because any benefit
could be funded through non-assessment revenues. For the
first time in its reply brief, the District additionally asserts
that (4) it properly assigned special benefits to west end
judicial notice of resolutions adopted by the District following the
court’s ruling.
15
parcels because its projection of added beach width from
sand migration was reliable, and because those parcels
would receive recreational and other special benefits.
As discussed below, we reject each of the District’s
contentions. First, we hold that Prop. 218 required the
District to separate and quantify general benefits from the
widened beach, without regard to whether those benefits
imposed additional costs or to the District’s subjective intent
in designing the project. That state agencies’ actions would
protect public access to the improved beach did not erase the
project’s general benefits or excuse the District from
considering them. Second, we conclude the District was
required to consider special benefits from the revetment to
relevant homes because substantial evidence supports a
finding that it was part of the District’s project. Third, we
conclude the District was required to assess the
county-owned parcels, as the District has not shown they
would receive no special benefit, and those parcels cannot be
treated more favorably than privately owned parcels.
Finally, we find the District has forfeited its contentions
regarding the assessment on west end parcels.
1. Applicable Law
a. Burden of Proof and Standard of Review
In any legal challenge to the validity of a special
assessment, the burden is on the assessing agency to
demonstrate the validity of the assessment. (Art. XIII D,
§ 4, subd. (f).) We review the trial court’s resolution of
16
factual questions for substantial evidence. (Morgan v.
Imperial Irrigation Dist. (2014) 223 Cal.App.4th 892, 917.)
We then exercise independent judgment in evaluating the
validity of an assessment. (Silicon Valley, supra, 44 Cal.4th
at 448.)
“Our task on appeal is ‘to determine and effectuate the
intent of those who enacted the constitutional provision at
issue.’ [Citation.] . . . . ‘[W]e begin by examining the
constitutional text, giving the words their ordinary
meanings.’” (Valley Baptist Church v. City of San Rafael
(2021) 61 Cal.App.5th 401, 410.) When the language
permits more than one reasonable interpretation, “‘“the
court looks ‘to a variety of extrinsic aids, including the
ostensible objects to be achieved, the evils to be remedied,
the legislative history, [and] public policy . . . .’”’” (Ibid.)
b. Prop. 218 and Its Requirements
Approved by the voters in 1996, Prop. 218 was
intended to “‘significantly tighten the kind of benefit
assessments’ an agency can levy on real property [citation]
and to ‘“protect[] taxpayers by limiting the methods by which
local governments exact revenue from taxpayers without
their consent.”’” (Silicon Valley, supra, 44 Cal.4th at 438.)
Thus, the measure instructed that its provisions “shall be
liberally construed to effectuate its purposes of limiting local
17
government revenue and enhancing taxpayer consent.”11
(Ballot Pamp., Gen. Elec. (Nov. 5, 1996) text of Prop. 218,
§ 5, p. 109.)
As noted, Prop. 218’s substantive provisions tended to
significantly restrict assessments, requiring assessing
agencies to (1) demonstrate special benefits to assessed
properties, (2) separate and quantify general benefits, and
(3) ensure the assessment is proportionate to a property’s
special benefit. (Art. XIII D, § 4, subd. (a).) The measure
further prohibits the exemption of public entities from
applicable assessments. (Ibid.) We discuss these
requirements below.
i. Special Benefit
An assessment may be imposed only for a “special
benefit” conferred on a particular property. (Art. XIII D,
§§ 2, subd. (b), 4, subd. (a).) A special benefit is “a particular
and distinct benefit over and above general benefits
conferred on real property located in the district or to the
public at large,” and a “[g]eneral enhancement of property
value does not constitute ‘special benefit.’” (Art. XIII D, § 2,
subd. (i).) “A project confers a special benefit when the
affected property receives a ‘direct advantage’ from the
improvement funded by the assessment. [Citation.] By
contrast, general benefits are ‘derivative and indirect.’
11 We grant the District’s request for judicial notice of Prop.
218’s ballot materials.
18
[Citation.] The key is whether the asserted special benefits
can be tied to particular parcels based on proximity or other
relevant factors that reflect a direct advantage enjoyed by
the parcel.” (Town of Tiburon v. Bonander (2009) 180
Cal.App.4th 1057, 1077 (Tiburon), fn. omitted.)
Beyond the express exclusion of general enhancement
of property value, Prop. 218 places no limits on the kind of
benefits that may constitute special benefits, so long as they
directly advantage the assessed parcel. Courts have
recognized such benefits as “expanded or improved access to
[an] open space, or improved views of the open space”
(Silicon Valley, supra, 44 Cal.4th at 455 [discussing
potential benefits from open-space acquisitions]), “improved
aesthetics, increased safety, and improved [utility] service
reliability” (Tiburon, supra, 180 Cal.App.4th at 1078
[benefits from undergrounding of utility lines, based on
properties’ proximity to existing overhead lines]), and
“security [and] streetscape maintenance (e.g., street
sweeping, gutter cleaning, graffiti removal)” (Dahms v.
Downtown Pomona Property & Business Improvement Dist.
(2009) 174 Cal.App.4th 708, 722 (Dahms) [services provided
to properties within assessment district]).
ii. Separation and Quantification of
General Benefits
As noted, an assessment may be imposed only for
special benefits. (Art. XIII D, §§ 2, subd. (b), 4, subd. (a).)
Yet “virtually all public improvement projects provide
19
general benefits,” in addition to any special benefit. (Beutz
v. County of Riverside (2010) 184 Cal.App.4th 1516, 1531
(Beutz).) An assessing agency must therefore “‘separate the
general benefits from the special benefits conferred on a
parcel’ and impose the assessment only for the special
benefits. (Art. XIII D, § 4, subd. (a).)” (Silicon Valley, supra,44 Cal.4th at 443.) Any remaining funding must be obtained
through other means. (Id. at 450.) These requirements of
Prop. 218 superseded prior caselaw, under which courts “did
not demand a strict separation of special and general
benefits,” and upheld assessments imposing the entire cost
of a public project on specially benefitted properties,
regardless of general benefits. (Silicon Valley, supra, at 451,
citing, e.g., Knox v. City of Orland (1992) 4 Cal.4th 132, 137
[upholding assessment for park maintenance, though city
did not separate general benefits to public from special
benefits to assessed parcels]; Allen v. City of Los Angeles
(1930) 210 Cal. 235, 238 [city council could “make the cost of
the entire [street improvement project] rest upon the
shoulders of the property owners of a given district
especially benefited thereby”].)
“Generally, this separation and quantification of
general and special benefits must be accomplished by
apportioning the cost of a service or improvement between
the two and assessing property owners only for the portion of
the cost representing special benefits. That is, the agency
must determine or approximate the percentage of the total
benefit conferred by the service or improvement that will be
20
enjoyed by the general public and deduct that percentage of
the total cost of the service or improvement from the special
assessment levied against the specially benefitted property
owners.” (Golden Hill Neighborhood Assn., Inc. v. City of
San Diego (2011) 199 Cal.App.4th 416, 438 (Golden Hill), fn.
omitted.) Applying this requirement, the Golden Hill court
invalidated a city’s assessment intended to fund the
installation, maintenance, and servicing of public
improvements at a city neighborhood: although the
engineer’s report recognized the measures would provide
some general benefits, it deemed them minimal and failed to
quantify them. (Id. at 424, 439.) Rejecting this approach,
the court explained, “[E]ven minimal general benefits must
be separated from special benefits and quantified so that the
percentage of the cost of services and improvements
representing general benefits, however slight, can be
deducted from the amount of the cost assessed against
specially benefitting properties.” (Id. at 439.)
Similarly, in Beutz, the Court of Appeal invalidated a
county’s assessment on certain residential properties to fund
a master plan to acquire and develop parks nearby. (Beutz,
supra, 184 Cal.App.4th at 1519.) Although the engineer’s
report “‘recognized that the general public may benefit from
these parks’” (id. at 1527), it included no analysis of “the
quantity or extent to which the general public may
reasonably be expected to use or benefit from the parks in
relation to the quantity or extent to which occupants of [the
neighboring] residential properties . . . may use or benefit
21
from the parks.” (Id. at 1533.) This deficiency, the court
concluded, violated Prop. 218’s requirements. (Beutz, supra,
at 1534.)
The Beutz court rejected the challengers’ reliance on
Dahms, supra, 174 Cal.App.4th 708. (Beutz, supra, 184
Cal.App.4th at 1537.) In Dahms, a property and business
improvement district imposed a special assessment to fund
certain services, including security and streetscape
maintenance, for properties in a city’s downtown area.
(Dahms, supra, at 712-713.) A property owner challenged
the assessment on the ground that the special benefits to the
downtown properties also produced general benefits (in the
form of increased safety for the general public, for example),
but that the district failed to separate and quantify those
general benefits. (Id. at 723.) Rejecting this contention, the
court reasoned, “[N]othing in article XIII D says or implies
that if the special benefits that are conferred also produce
general benefits, then the value of those general benefits
must be deducted from the reasonable cost of providing the
special benefits before the assessments are calculated.”
(Ibid.) The court explained that the district’s services
“themselves constitute[d] special benefits” provided directly
to assessed parcels, and contrasted these circumstances with
those in which putative special benefits “were merely the
alleged effects of . . . services directly funded by the
assessments . . . .” (Id. at 725.) Construing the services at
issue as the former, it held that where “the special benefits
themselves produce certain general benefits, the value of
22
those general benefits need not be deducted before the (caps
on the) assessments are calculated.” (Id. at 723, italics
added.)
Dahms’s holding as to collateral general benefits
stemming from the special benefits to assessed properties
has not been extended beyond that limited context. As
noted, the Beutz court rejected the challengers’ reliance on
Dahms, explaining that unlike Dahms, “this case involves
. . . the general and special benefits that will accrue,
respectively, to members of the general public and occupants
of [assessed] properties from their common use and
enjoyment of the [developed] parks.” (Beutz, supra, 184
Cal.App.4th at 1537, italics added.)
iii. Proportionality
An assessment on any given parcel must be
proportional to the special benefit conferred on that parcel:
“No assessment shall be imposed on any parcel which
exceeds the reasonable cost of the proportional special
benefit conferred on that parcel.” (Art. XIII D, § 4, subd. (a).)
“The proportionate special benefit derived by each identified
parcel shall be determined in relationship to the entirety of
the capital cost of a public improvement, the maintenance
and operation expenses of a public improvement, or the cost
of the property-related service being provided.” (Ibid.) In
other words, “the ‘reasonable cost of the proportional special
benefit,’ which an assessment may not exceed, simply
reflects an assessed property’s proportionate share of total
23
assessable costs as measured by relative special benefits.”
(Tiburon, supra, 180 Cal.App.4th at 1081.) Thus, for
example, if a property receives 20 percent of the total special
benefits conferred by a project, the assessment imposed on it
may not exceed 20 percent of assessable costs.
2. Analysis
a. General Benefits from the Improved Beach
The trial court correctly concluded that the District
had failed to properly separate and quantify general benefits
from the project. As noted, under Prop. 218, the District was
required to quantify general benefits from the project,
apportion the project’s costs between the special and general
benefits, and assess only the portion of the cost representing
special benefits. (Golden Hill, supra, 199 Cal.App.4th at
438; Beutz, supra, 184 Cal.App.4th at 1533-1534.) It is
undisputed that the project would create a much wider,
sandy public beach. It is likewise undisputed that the added
recreational benefit of a wider beach to the general public
would ordinarily constitute a general benefit. Accordingly,
the District was required to properly quantify this benefit,
apportion costs to it, and exclude those costs in determining
the allowable assessment. (See Golden Hill, at 438; Beutz,
at 1533-1534.)
The District contends that the expected benefits to the
public here should nevertheless be excluded from
consideration for three reasons. As discussed below, we find
none persuasive.
24
i. Additional Costs
First, relying primarily on Dahms, the District
suggests that general benefits need not be considered unless
they impose additional costs. But as discussed above,
Dahms addressed general benefits flowing from the special
benefits themselves. (See Dahms, supra, 174 Cal.App.4th at
723; Beutz, supra, 184 Cal.App.4th at 1537.) Where, as here,
an improvement directly confers both special and general
benefits, courts have required cost apportionment for general
benefits, without asking whether the general benefits impose
additional costs.12 (See Beutz, supra, at 1533-1534; Golden
Hill, supra, 199 Cal.App.4th at 439.)
Indeed, the District agrees that a hypothetical in
Golden Hill “provides the best guidance” regarding the
necessary separation of the general benefits. To illustrate
the required apportionment, the court in Golden Hill
provided the following hypothetical example: “if property
owners are to be specially assessed for street lighting that
will provide both a special benefit for residents of the street
and a general benefit to the general public using the street, a
reasonable separation and quantification of general and
special benefit would be to determine the approximate
percentage of daily (or nightly) trips on the street made by
the specially benefitted residents as opposed to other
members of the public and recoup only that percentage of the
12 Because the rule it enunciated would not apply to the facts
here, we need not decide whether Dahms correctly construed
Prop. 218’s provisions.
25
cost of the lighting through the special assessment.” (Golden
Hill, supra, at 438, fn. 18.) The guidance provided by this
hypothetical precludes the District’s argument: the cost of
providing street lighting does not depend on the percentage
of trips by members of the general public; yet Golden Hill
instructs that the allowable special assessment must be
reduced by that percentage, which reflects the amount of
general benefit to the public. (Ibid.)
Under the District’s proposed rule, any special benefit,
no matter how small, would support an assessment for the
entire cost of a project that provides general benefits, no
matter how substantial, so long as the project is indivisible
and costs cannot be directly attributed to the general
benefits. Such a rule would constitute a return to pre-Prop.
218 law and thus be inconsistent with Prop. 218’s separation
and quantification requirements. 13 (See Silicon Valley,
13 Amici cite Tiburon and City of Saratoga v. Hinz (2004) 115
Cal.App.4th 1202 (Saratoga) in support of the District’s
argument. Neither case stands for the proposition. In Tiburon,
the court concluded the undergrounding of utility lines provided
only special benefits, stating, “[T]here is little reason to believe
the undergrounding project will confer derivative and indirect
benefits upon property owners or others outside the [assessment
district].” (Tiburon, supra, 180 Cal.App.4th at 1080.) Amici
assert that the undergrounding of utilities also benefits the
general public, e.g., by eliminating danger to the public from
downed utility lines, and speculates that the court’s conclusion
reflects a holding that such “collateral” benefits need not be
considered. However, the Tiburon court mentioned no specific
assertion of general benefits by the challengers and provided no
(Fn. is continued on the next page.)
26
supra, 44 Cal.4th at 451; Golden Hill, supra, 199
Cal.App.4th at 438 & fn. 18; Beutz, supra, 184 Cal.App.4th
at 1533-1534.)
ii. Subjective Intent
Second, the District argues the general benefits should
be disregarded because the purpose of the project is to
protect the beach properties, rather than to widen the beach
for recreational purposes. 14 Nothing in the text of Prop. 218,
however, suggests that the assessing agency’s subjective
intent in undertaking a public improvement project is
relevant. Instead, the measure’s defining a special benefit
simply as “a particular and distinct benefit over and above
general benefits,” while excluding a mere increase in
property values (art. XIII D, § 2, subd. (i).), suggests a focus
on real-world effects.
Moreover, a rule that general benefits may be
disregarded based on the agency’s intent would create
reasoning that could suggest an adoption of Amici’s position.
(See City of Oakland v. Public Employees’ Retirement System
(2002) 95 Cal.App.4th 29, 57 [“Cases are not authority for
propositions not considered”].) Still less helpful is Saratoga, in
which it was undisputed that the improvement of a dead-end
road and the water system that served it provided no general
benefits. (Saratoga, supra, at 1225.)
14 The District challenges the trial court’s finding that it
intended to create a wide beach for its own sake. Because we
conclude the District’s intent is not determinative, we need not
address this issue.
27
uncertainty and would not comport with Prop. 218’s
purposes to “‘significantly tighten the kind of benefit
assessments’ an agency can levy on real property” (Silicon
Valley, supra, 44 Cal.4th at 438) and to “limit[] local
government revenue” (Ballot Pamp., supra, text of Prop. 218,
§ 5, p. 109). Consider, for example, the street lighting in
Golden Hill’s hypothetical. Under the District’s proposed
rule, in determining whether apportionment of costs to
general benefits was required, a court would be tasked with
deciding whether the assessing agency subjectively intended
the lighting to reduce auto accidents generally, to prevent
any and all pedestrians from tripping, to protect children
residing in assessed properties from traffic, to deter
burglaries to assessed properties, or to achieve some
combination of the above. For its part, the assessing agency
would be incentivized to narrowly frame the purpose of the
project to focus exclusively on special benefits, and to
disclaim concern for any issue that would benefit the public.
The rule advocated by the District would ultimately lead to
the validation of assessments for the entire cost of projects
that provide only modest special benefits, relative to general
benefits. This loose rule would accord with neither the text
of Prop. 218 nor its purpose.
The District cites no authority, and we are aware of
none, suggesting that an agency’s subjective intent
determines the need to account for general benefits. Indeed,
the District itself maintains that west end properties would
receive a special benefit from their access to a wide sandy
28
beach in front of other parcels. The District cannot treat this
recreational value as an assessable special benefit, while
ignoring its general benefit to the public. (See Tiburon,
supra, 180 Cal.App.4th at 1088 [assessment approach must
be consistently applied].)
iii. State Agency Requirements
Third, the District contends that any general benefit
from public access to a wide beach should not be considered
because state agencies required it to provide this benefit,
either as a condition of the project’s approval or as
consideration for the revetment’s use of state lands. It notes
that the Coastal Commission required it to ensure public
access, stating, “The restored beach is public because the
Coastal Commission made it a condition of project
approval.”15 It further notes that the State Lands
Commission agreed to forgo payments for the use of state
lands, conditioned on the maintenance of enough dry sand
seaward of the revetment to allow public access. The
District claims the enhanced public beach should therefore
be seen as part of the costs of the project, rather than
general benefits.
15 As noted, the Coastal Commission also imposed
requirements relating to the minimal width of the nourished
beach. The District disclaims reliance on those requirements,
pointing only to the Commission’s conditions relating to public
access to the beach.
29
We need not decide whether, or under what
circumstances, Prop. 218 may excuse accounting for benefits
provided in satisfaction of regulatory requirements or as
consideration in commercial transactions. The benefit here -
- the provision of a wide sandy beach -- is the heart of the
District’s proposed project, not a mere condition for approval
or required consideration by a state agency. That state
agencies acted to ensure the project does not cut off the
public’s access to a public beach does not transform the
improvement project’s general benefits into costs. Were it
otherwise, virtually any improvement to a public street or
public park that provided a degree of special benefits could
be fully funded by a special assessment based on the claim
that public access to the improvement could not be
restricted, and thus that any benefit to the public should be
seen as a cost rather than a general benefit. That is not the
law. (See Beutz, supra, 184 Cal.App.4th at 1533-1534
[county required to account for general benefits from general
public’s use of public parks]; Golden Hill, supra, 199
Cal.App.4th at 438, fn. 18 [street lighting project would
require accounting for general benefits from general public’s
nightly use of street].) In short, the District was required to
apportion costs to general benefits stemming from the
creation of a wide and sandy public beach.16
16 Although our conclusion that the District failed to properly
apportion costs to the project’s general benefits is sufficient to
invalidate the assessment, we proceed to assess the District’s
remaining challenges to the trial court’s ruling in order to guide
(Fn. is continued on the next page.)
30
b. Special Benefits from the Revetment
The trial court did not err in concluding that the
District was required to consider the additional special
benefits to be conferred on parcels behind the revetment.
The District does not dispute the court’s finding that the
revetment would provide additional protection to the parcels
behind it. The District’s assessment, however, did not
account for the special benefits the revetment would confer
on those parcels. In failing to consider these benefits in
apportioning assessable costs among all the District’s
parcels, the assessment violated Prop. 218’s proportionality
requirement. (See Tiburon, supra, 180 Cal.App.4th at 1081
[under Prop. 218, assessment may not exceed property’s
proportionate share of total assessable costs, as measured by
relative special benefits].)
In challenging the trial court’s conclusion, the District
maintains that the revetment should be considered a “‘fact
on the ground,’” rather than part of the project, and thus
that any benefits from it should be disregarded. The West
End Parties contend, and the District does not dispute, that
whether the revetment was part of the project is a factual
question we must review for substantial evidence. Because
the District had the burden to prove the validity of the
assessment, it must establish that the evidence compelled a
finding in its favor as a matter of law. (See Dreyer’s Grand
the parties and the court should the District propose and obtain
approval for a new assessment.
31
Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th
828, 838 [“where the trier of fact has expressly or implicitly
concluded that the party with the burden of proof did not
carry the burden and that party appeals, . . . . the question
for a reviewing court becomes whether the evidence compels
a finding in favor of the appellant as a matter of law.”) Far
from compelling a finding that the revetment was extrinsic
to the project, the evidence amply supported a finding that it
was an integral part of it.
Distancing itself from the revetment, the District
emphasizes that the Trancas Property Owners’ Association
had constructed the existing, temporary revetment, and that
revetment homeowners agreed to fund its relocation and
contribute private land for its new placement. Yet the
District concedes that it persuaded the Coastal Commission
to agree to keep the revetment, subject to its relocation, and
that the Commission’s conditions of approval for the project
required the District to ensure the revetment’s relocation
and to maintain dunes to mitigate the revetment’s
environmental impact. The record further shows that the
State Lands Commission required the District to pay for the
temporary revetment’s prior, unauthorized use of state
lands. Under these facts, the court’s finding that the
revetment was part of the District’s planned project was
eminently reasonable.17
17 We observe that to the same extent the revetment’s
benefits are attributed to the project such that they increase the
(Fn. is continued on the next page.)
32
c. Assessment of County-Owned Parcels
The District was required to assess the two
county-owned parcels. Prop. 218 instructs, “Parcels within a
district that are owned or used by any agency, the State of
California or the United States shall not be exempt from
assessment unless the agency can demonstrate by clear and
convincing evidence that those publicly owned parcels in fact
receive no special benefit.” (Art. XIII D, § 4, subd. (a).)
Given that the project would provide protection to the
county’s parcels, alongside other parcels in the District, the
District was required to assess them. (See ibid.)
The District argues there would be no special benefit to
those parcels, which contained stairs providing public access
to the beach, because the project would not change their
function: “Whether the beach is 10 or 100 feet wide, the
stairs will continue to provide access to whatever beach
there is, with or without nourishment.” Yet the District does
not expressly contend, let alone demonstrate by clear and
revetment parcels’ share of special benefits, any costs associated
with the revetment and properly assigned to the District must
also be included in the project’s costs and be borne by all assessed
properties, in proportion to their relative special benefits. (See
art. XIII D, § 4, subd. (a) [proportionate special benefit
determined in relationship to “the entirety of the capital cost of a
public improvement”].) The revetment homeowners’ funding of
any costs properly assigned to the District and provision of land
for the relocation of the revetment may then be credited toward
their assessments or treated as a contribution to fund
non-assessable general benefits.
33
convincing evidence, that the project would not protect the
stairs and the parcels themselves. And as the West End
Parties note, regardless of the stairs, each county parcel
encompasses thousands of square feet, and the District has
assessed even vacant privately owned parcels.
The District alternatively argues that benefits to the
county parcels could be funded through the in-kind
contributions of the revetment homeowners, and thus need
not be assessed. The relevant benefits, however, are special
benefits subject to mandatory assessment, rather than
general benefits that require outside funding. The District
may not treat the county parcels more favorably than it does
privately owned parcels: it may not exempt those parcels
from assessment without showing they would receive no
special benefit from the project. (Art. XIII D, § 4, subd. (a).)
Because it made no such showing, it was required to assess
the county parcels. (See ibid.)
d. Special Benefits to West End Properties
As noted, the trial court concluded the District’s
assessment of properties on the west end of Broad Beach,
where no additional sand was to be placed directly, was
unsupported. While the District contended those properties
would receive additional protection due to the migration of
sand deposited elsewhere on the beach, the court found a
lack of foundation for the District’s estimate of the amount of
added sand and faulted the engineer’s report for failing to
discuss the expected degree of added protection. As for the
34
District’s contention that west end properties would receive
recreational and other benefits from the adjacent wide sandy
beach, the court concluded these would not constitute special
benefits because the wider beach would similarly benefit the
general public.
In its opening brief, the District fails to address the
trial court’s conclusions as to the west end properties. For
the first time in its reply brief, the District contends its
estimate of the amount of added sand on the west end of the
beach was sufficiently supported, and that west end
properties would receive special recreational and other
benefits from the project.18 By failing to raise these
arguments in its opening brief, the District has forfeited
them.19 (See Browne v. County of Tehama (2013) 213
18 Even in its reply brief, the District does not contest the
court’s conclusion that the engineer’s report improperly failed to
assess the degree of added protection from any added sand.
19 Nothing prevents the District from presenting additional
support for any future assessment on west end properties. We
express no opinion on the validity of any such future assessment.
We observe, however, that a property may derive special benefits
from an adjacent public improvement, even if the improvement
provides benefits of a similar category to the general public. The
assessed property’s proximity to the improvement may so
enhance its benefit as to render it “a particular and distinct
benefit over and above general benefits.” (Art. XIII D, § 4, subd.
(a); see Silicon Valley, supra, 44 Cal.4th at 452, fn. 8 [proximity
to public park may provide special benefits]; Golden Hill, supra,
199 Cal.App.4th at 438, fn. 18 [recognizing that street lighting
could provide both special benefit to residents and general benefit
(Fn. is continued on the next page.)
35
Cal.App.4th 704, 726 [failure to raise contention in opening
brief constitutes forfeiture]).
***
In sum, we conclude the 2017 assessment violated
Prop. 218 because in formulating it, the District failed to
properly separate, quantify, and apportion costs to general
benefits from the project, failed to consider special benefits
from the revetment, and failed to assess county-owned
parcels. Accordingly, we affirm the court’s judgment
invalidating the assessment.
B. The Challengers’ Appeal of the Denial of Attorney
Fees
1. Background
Following the trial court’s entry of judgment, six
groups of challengers separately moved for attorney fees
under Section 1021.5.20 One group of five litigants sought
to public, to be apportioned by percentage of each group’s nightly
trips on street]; Beutz, supra, 184 Cal.App.4th at 1533-1534
[public parks would provide both special benefits to neighboring
properties and general benefits to public; engineer’s report failed
to quantify these benefits according to degree of parks’ expected
use by each group].)
20 Section 1021.5 provides, in relevant part: “Upon motion, a
court may award attorneys’ fees to a successful party against one
or more opposing parties in any action which has resulted in the
enforcement of an important right affecting the public interest if:
(Fn. is continued on the next page.)
36
about $1.5 million in fees. The West End Parties sought
about $370,000 in fees, and the East End Parties sought
about $270,000.21 Two other challengers requested smaller
amounts, and finally, Pritchett sought about $36,500 in fees.
In all, the challengers sought over $2.4 million for the work
of more than two dozen attorneys. None suggested counsel
had been retained on a contingency basis. The District
opposed the challengers’ motions, arguing their individual
financial stakes in the litigation made any award of attorney
fees inappropriate.
In a detailed decision, the trial court ultimately denied
all the challengers’ motions, concluding that each group’s
expected economic benefit from the litigation exceeded its
litigation costs by a substantial margin, that each group had
sufficient financial incentives to justify the litigation in
economic terms, and that an award of fees was unwarranted.
The court rejected the challengers’ argument that they
derived no pecuniary benefit from the invalidation of the
2017 assessment because the District could impose a new
(a) a significant benefit, whether pecuniary or nonpecuniary, has
been conferred on the general public or a large class of persons,
(b) the necessity and financial burden of private enforcement, or
of enforcement by one public entity against another public entity,
are such as to make the award appropriate, and (c) such fees
should not in the interest of justice be paid out of the recovery, if
any.”
21 As noted, three of the West End Parties opposed the
District’s validation action from the outset, in December 2017,
while the remaining two joined the group in April 2018.
37
assessment. It concluded that the possibility of a new
assessment was too speculative to undermine the
challengers’ benefits, reasoning that the District had
“several substantial hurdles to overcome before it could issue
a constitutional assessment,” including “the terms of the
coastal development permit and whether the [D]istrict’s
property owners will authorize any proposed [new
assessment] based on costs . . . .” Addressing the
challengers’ concern that if a subsequent assessment were
invalidated, they would “continually have a problem meeting
their burden under Section 1021.5,” the trial court stated it
could not predict what “‘value judgment’” it might make in
the future based on Section 1021.5’s factors, citing City of
Oakland v. Oakland Police & Fire Retirement System (2018)
29 Cal.App.5th 688, 700 (Oakland).22
In calculating each group’s financial benefit, the court
considered only the annual difference between the
invalidated 2017 assessment and the unimpeached 2015
assessment. Based on the scope of the District’s project,
which contemplated “‘at least 20 years’” of various actions on
the beach, the court applied a 20-year “valuation period,”
and thus multiplied the annual difference between the
22 The cited portion of Oakland states that in making a
“‘value judgment’” in determining whether an award of fees is
appropriate given the litigant’s financial incentives, the court
should sometimes award fees even where the litigant’s expected
benefits exceed its actual costs by a substantial margin.
(Oakland, supra, 29 Cal.App.5th at 700.)
38
assessments by 20. In doing so, the court rejected the
challengers’ contention that it should estimate their benefits
based on the 10-year period of the project’s initial permit.
The court then reduced the resulting amounts by 50 percent,
to reflect the parties’ probability of success at the outset of
the litigation, although it remarked that given the multiple
flaws in the 2017 assessment, the probability of success was
actually “somewhat higher than 50 percent.”
As relevant here, using this methodology, the trial
court determined that at the outset of the litigation, the
West End Parties had an expected benefit of over $550,000
(reduced from an actual benefit of over $1.1 million), which
substantially exceeded their litigation costs of about
$370,000. Although the West End Parties argued that the
court should consider the expected benefit to only the three
original members of their group, the court declined to decide
the issue after finding it would not meaningfully change the
group’s cost-benefit analysis. The court determined that
Pritchett had an expected benefit of $160,000 (reduced from
an actual benefit of $320,000), which substantially exceeded
the trust’s litigation costs of about $36,500. 23 The West End
23 As noted, the court similarly determined that the other
challengers’ expected benefits substantially exceeded their
litigation costs. The precise amounts attributed to those parties
are not pertinent here.
39
Parties and Pritchett now challenge the court’s order
denying their motions. 24
2. Applicable Law
“Section 1021.5 codifies the ‘private attorney general’
doctrine of attorneys fees articulated in Serrano v. Priest
(1977) 20 Cal.3d 25 . . . and other judicial decisions.”
(Flannery v. California Highway Patrol (1998) 61
Cal.App.4th 629, 634.) The statute’s purpose is to
compensate with attorney fees “litigants and attorneys who
step forward to engage in public interest litigation when
there are insufficient financial incentives to justify the
litigation in economic terms.” (Conservatorship of Whitley
(2010) 50 Cal.4th 1206, 1211 (Whitley).) It therefore gives
the trial court discretion to award fees to a successful party
if “‘(1) plaintiffs’ action “has resulted in the enforcement of
an important right affecting the public interest,” (2) “a
significant benefit, whether pecuniary or nonpecuniary has
been conferred on the general public or a large class of
persons” and (3) “the necessity and financial burden of
private enforcement are such as to make the award
appropriate.”’” (Id. at 1214.) The party requesting fees has
the burden of proving its eligibility under Section 1021.5.
(Vosburg v. County of Fresno (2020) 54 Cal.App.5th 439, 450
24 We deny requests by the District and Pritchett for judicial
notice of documents relating to the challengers’ efforts to collect
refunds of past payments under the 2017 assessment.
40
(Vosburg).) At issue in this case is only whether the
financial burden of the litigation made the award
appropriate.
“In determining the financial burden on litigants,
courts have quite logically focused not only on the costs of
the litigation but also any offsetting financial benefits that
the litigation yields or reasonably could have been expected
to yield. ‘“An award on the ‘private attorney general’ theory
is appropriate when the cost of the claimant’s legal victory
transcends his personal interest, that is, when the necessity
for pursuing the lawsuit placed a burden on the plaintiff ‘out
of proportion to his individual stake in the matter.’”’”
(Whitley, supra, 50 Cal.4th at 1215.)
In Whitley, the California Supreme Court described
with approval a method for weighing the costs and benefits
of litigation described in Los Angeles Police Protective League
v. City of Los Angeles (1986) 188 Cal.App.3d 1. Under this
method, in assessing the benefits from the litigation: “‘The
trial court must first fix—or at least estimate—the monetary
value of the benefits obtained by the successful litigants
themselves . . . . Once the court is able to put some kind of
number on the gains actually attained it must discount these
total benefits by some estimate of the probability of success
at the time the vital litigation decisions were made which
eventually produced the successful outcome . . . . Thus, if
success would yield . . . the litigant group . . . an aggregate of
$10,000[,] but there is only a one-third chance of ultimate
victory[,] they won’t proceed—as a rational matter—unless
41
their litigation costs are substantially less than $3,000.’”
(Whitley, supra, 50 Cal.4th at 1215.) “‘The reason for the
focus on the plaintiff’s expected recovery at the time
litigation decisions are being made, is that [the statute] is
intended to provide an incentive for private plaintiffs to
bring public interest suits when their personal stake in the
outcome is insufficient to warrant incurring the costs of
litigation.’” (Id. at 1221.) A plaintiff’s financial stake in the
matter can outweigh the costs of litigation even in the
absence of a monetary award, and the court must take other
forms of financial incentives into account. (See Summit
Media LLC v. City of Los Angeles (2015) 240 Cal.App.4th
171, 193 (Summit Media) [“The trial court is not required to
(and indeed may not) take financial incentives out of the
calculation, or conclude there are none, simply because the
plaintiff sought no monetary award in the litigation”]; see
also id. at 188, 193-194 [company had sufficient stake in
litigation to invalidate agreement between city and its
competitors, as it believed agreement would be ruinous to its
business]; California Licensed Foresters Assn. v. State Bd. of
Forestry (1994) 30 Cal.App.4th 562, 572-573 (CFLA)
[association of foresters had sufficient financial stake in
litigation challenging regulation that would have
significantly reduced its members’ income].)
“‘After approximating the estimated value of the case
at the time the vital litigation decisions were being made,
the court must then turn to the costs of the litigation—the
legal fees, deposition costs, expert witness fees, etc., which
42
may have been required to bring the case to fruition . . . . [¶]
The final step is to place the estimated value of the case
beside the actual cost and make the value judgment whether
it is desirable to offer the bounty of a court-awarded fee in
order to encourage litigation of the sort involved in this
case.’” (Whitley, supra, 50 Cal.4th at 1215-1216.) Applying
this method, a party seeking fees will be eligible for an
award unless the expected value of the party’s financial
interest “‘exceeds by a substantial margin the actual
litigation costs.’” (Id. at 1216.)
In making the final value judgment as to whether a
bounty of court-awarded fees is appropriate in a particular
case, additional considerations beyond the prevailing party’s
financial benefits may be relevant. (Oakland, supra, 29
Cal.App.5th at 703-704, 708.) In “unusual case[s],” where a
party would have been unable to fund the litigation without
the expectation of a fee award, an award may be warranted
even where the estimated value of the case substantially
exceeds costs. (Id. at 703; see also id. at 700 [“the
interrelatedness of the section 1021.5 factors ‘means the
court sometimes should award fees even in situations where
the litigant’s own expected benefits exceed its actual costs by
a substantial margin’”].)
“The award of fees under section 1021.5 is an equitable
function, and the trial court must realistically and
pragmatically evaluate the impact of the litigation to
determine if the statutory requirements have been met.
[Citation.] This determination is ‘best decided by the trial
43
court, and the trial court’s judgment on this issue must not
be disturbed on appeal “unless the appellate court is
convinced that it is clearly wrong and constitutes an abuse of
discretion.”’” (Concerned Citizens of La Habra v. City of La
Habra (2005) 131 Cal.App.4th 329, 334 (Concerned
Citizens).) However, we review de novo whether the trial
court applied the proper legal standards in reaching its
determination. (Robinson v. City of Chowchilla (2011) 202
Cal.App.4th 382, 391.)
3. Analysis
In challenging the trial court’s denial of their motions
for attorney fees, both Pritchett and the West End Parties
contend that any financial benefit to them in invalidating
the District’s 2017 assessment is too indirect and
speculative, given the possibility of a new increased
assessment in the future, and thus that an award of fees was
necessary. The West End Parties additionally argue that
the court erred in calculating the amount of financial
benefits to assessment challengers, asserting the court
should have (1) considered the expected recovery of only the
three original West End Parties, rather than all five West
End Parties, (2) assumed the assessment would be collected
for only 10 years, rather than 20; and (3) accounted for the
District’s decision to collect a reduced assessment during the
pendency of litigation. Finally, Pritchett claims the court
erroneously concluded that where assessment challengers’
financial benefits outweigh litigation costs, a fee award is
44
categorically precluded, and that unusual circumstances
compelled an award here.
As explained below, we discern no error in the court’s
calculation of the challengers’ financial benefits from the
litigation, or in its finding that their financial interests
exceeded their litigation costs by a substantial margin.
Under these circumstances, it cannot be said that “‘“the
necessity for pursuing the lawsuit placed a burden on the
plaintiff ‘out of proportion to [the party’s] individual stake in
the matter.’”’” (Whitley, supra, 40 Cal.4th at 1215.)
Moreover, contrary to Pritchett’s argument, the court did not
assume that a fee award was categorically precluded where
a party’s financial benefit substantially outweighed its costs,
and the court was not compelled to award fees to parties that
had sufficient incentive to litigate the matter and faced no
meaningful obstacle in funding the litigation.
a. The Possibility of a New Assessment
The possibility that the District would impose a new
assessment did not render the challengers’ financial benefits
so uncertain as to require an award of attorney fees. The
2017 assessment’s invalidation resulted in expected savings
to the challengers equal to the difference between the 2017
assessment and the 2015 assessment. Although they
received no monetary award, these expected savings
incentivized the challengers to oppose the District’s action,
and were properly considered by the trial court. (See
45
Summit Media, supra, 240 Cal.App.4th at 193-194; CFLA,
supra, 30 Cal.App.4th at 572-573.)
The trial court reasonably concluded that the
possibility of a new assessment was too speculative to
undermine these expected benefits. Any new assessment by
the District would require a difficult multiple-step process
and would face significant challenges at each step. The
District would have to approve a new assessment, adjusted
to account for the significant flaws identified in the 2017
assessment.25 Among other things, the district would be
required to account for general benefits from the project,
meaning it would be required to obtain or identify a
non-assessment source of funding for costs apportioned to
those benefits.26 Additionally, it would have to account for
special benefits to revetment parcels, meaning that the
assessment might impose higher rates on those parcels (and
lower rates on non-revetment parcels, including those of the
assessment challengers). If approved by the District, the
imposition of any new assessment would be contingent on
25 The parties have not asked us to review the draft
engineer’s report contemplated by the District after the trial
court rendered its decision on the merits for compliance with
Prop. 218’s requirements, and we decline to do so sua sponte. In
any case, as noted, the parties agree that the District paused its
plans for a new assessment in October 2020.
26 Contrary to Pritchett’s suggestion, the trial court did not
merely prohibit the District from “tak[ing] the improper shortcut
of a flawed, flimsy, engineer’s report . . . .” Rather, the court
found the assessment’s methodology wanting.
46
the approval of a weighted majority of the property owners.
(Art. XIII D, § 4, subds. (c)-(e).) Because of modifications to
the assessment -- particularly any higher rates imposed on
revetment parcels -- some property owners who supported
the 2017 assessment might well decide to oppose the new
one. Even if approved by the property owners, the new
assessment could face litigation challenges under the strict
requirements of Prop. 218.
Given these challenges, and despite its apparent
commitment to the project, the District could at any point
decide to give up on the project and seek a less costly
alternative that the 2015 assessment could fund. And even
if fully successful, a new assessment would likely impose
lower rates on non-revetment parcels, including Pritchett
and the West End Parties, meaning that the invalidation of
the 2017 assessment would still financially benefit them.
The assessment challengers provided no evidence compelling
the conclusion that their expected pecuniary benefits were
too uncertain. (See Vosburg, supra, 54 Cal.App.5th at 450.)
Neither the West End Parties nor Pritchett cites any
case holding that a theoretical possibility that a litigant’s
financial benefits would be reduced by a future occurrence
compels the trial court to award fees. 27 As noted, this issue
27 The cases they do cite are inapposite. In each, the
appellate court merely found no abuse of discretion in the trial
court’s award of fees, and in each, financial benefits were far less
direct or certain than the financial benefits here. (See People v.
Investco Management & Development LLC (2018) 22 Cal.App.5th
(Fn. is continued on the next page.)
47
is “‘best decided by the trial court,’” and the court’s judgment
must not be disturbed unless “‘“clearly wrong.”’” (Concerned
Citizens, supra, 131 Cal.App.4th at 334.) Neither Pritchett
nor the West End Parties have demonstrated an abuse of
discretion in the trial court’s determination that the
assessment’s invalidation financially benefitted the
challengers.
443, 448, 450-451, 468-470 [affirming fee award where investors
who intervened in security fraud action gained no financial
benefit, and secured only right to sue]; Boatworks, LLC v. City of
Alameda (2019) 35 Cal.App.5th 290, 309-310 [affirming fee award
to developer who successfully challenged city’s development fees;
trial court discounted developer’s financial benefit because
developer estimated there was no more than 50 percent chance
city would approve viable project, and Court of Appeal added that
city would presumably adopt a new, valid fee]; Heron Bay
Homeowners Assn. v. City of San Leandro (2018) 19 Cal.App.5th
376, 387-388, 392 [affirming fee award where plaintiffs obtained
writ compelling city to prepare environmental impact report;
although city argued plaintiffs avoided substantial losses in home
values from planned project, report would not preclude project,
and there was minimal evidence regarding amount of projected
losses]; Keep Our Mountains Quiet v. County of Santa Clara
(2015) 236 Cal.App.4th 714 [similar]; Galante Vineyards v.
Monterey Peninsula Water Management Dist. (1997) 60
Cal.App.4th 1109, 1128 [similar].)
48
b. The Trial Court’s Calculation of Financial
Benefits
i. The Court’s Consideration of All West End
Parties’ Interests
In comparing the assessment challengers’ financial
interests in the litigation to the costs of litigation, the trial
court correctly considered the financial benefits to all West
End Parties against the costs to the same parties. Our
Supreme Court in Whitley endorsed a simple comparison of
the expected benefits to and the costs borne by a single
group of litigants. (See Whitley, supra, 50 Cal.4th at
1215-1216.) Under this method, in determining the expected
benefits to the litigants, the court must determine the value
of the benefits actually obtained and discount it by an
“‘estimate of the probability of success at the time the vital
litigation decisions were made.’” (Id. at 1215.) The trial
court faithfully applied this method, finding that the West
End Parties had obtained economic benefits worth about
$1.1 million, reducing it by 50 percent to about $550,000 to
account to for its estimate of their likelihood of success at the
outset of the litigation, and determining that these expected
benefits exceeded their litigation costs of about $370,000 by
a substantial margin.
Citing Whitley’s reference to the time of vital litigation
decisions, the West End Parties note that initially, only
three of the group’s members opposed the District’s
validation action, with the other two members joining them
49
a few months later. They argue that under Whitley, the trial
court was required to consider the expected benefits to only
the original three West End Parties. We disagree.
Whitley’s reference to the time of vital litigation
decisions was intended to account for the risk of
non-recovery, instructing courts to make an “‘estimate of the
probability of success’” at that time. (See Whitley, supra, 50
Cal.4th at 1215.) In so doing, our Supreme Court
contemplated the weighing of the expected recovery at the
relevant time against the ultimate costs for the same
prevailing parties; it did not contemplate accounting for
changes in the parties’ composition. (See ibid. [“‘if success
would yield . . . the litigant group . . . an aggregate of
$10,000[,] but there is only a one-third chance of ultimate
victory[,] they won’t proceed—as a rational matter—unless
their litigation costs are substantially less than $3,000’”
(italics added)].)
We do not hold that a court may never consider the
joinder (or omission) of parties in assessing a litigant group’s
financial interest in the outcome of the litigation. Such
considerations may be required under appropriate
circumstances, to ensure that plaintiffs lacking a sufficient
stake in the litigation may receive a necessary incentive.
(See Whitley, supra, 50 Cal.4th at 1221 [“‘Code of Civil
Procedure section 1021.5 is intended to provide an incentive
for private plaintiffs to bring public interest suits when their
personal stake in the outcome is insufficient to warrant
incurring the costs of litigation’”].) But here, the West End
50
Parties seek a slanted assessment that compares the
financial benefits of just three of the parties to the costs
borne by all five. They do not suggest that the two added
parties, which joined in the early stages of the case, did not
share in the costs.28 And there is no basis to assume that the
litigant group would have incurred the same amount in costs
-- about $370,000 -- without their assistance in funding this
costly litigation. Indeed, the West End Parties’ litigation
costs far exceeded those of Pritchett, the East End Parties,
and two other assessment challengers, and were second to
those of only one other group of five litigants. Under these
circumstances, it would not have been appropriate for the
court to assess the financial interest of only some of the West
End Parties.29
28 The West End Parties contend that upon filing their
answer, the three original members of their group “committed . . .
to pay the entire costs of opposing validation . . . .” To the extent
they suggest those members gave their counsel a blank check at
the outset of the litigation or somehow bound themselves never to
withdraw or settle in the face of mounting costs, they cite nothing
in the record supporting such claims.
29 Because the trial court’s ruling on this issue was correct
and its resulting determination of the West End Parties’ financial
interests valid, we need not consider its reasoning that
consideration of only the initial three parties would have made no
difference in the analysis. (See Muller v. Fresno Community
Hospital & Medical Center (2009) 172 Cal.App.4th 887, 906-907
[“it is the ruling, and not the reason for the ruling, that is
reviewed on appeal”].)
51
ii. The Court’s Estimation of the Project’s
Duration
The trial court did not abuse its discretion in
estimating the life of the project at 20 years. The court
based its estimate on the intended scope of the project, which
contemplated “‘at least 20 years’” of various actions. In
challenging the court’s calculation, the West End Parties
note that the Coastal Commission permitted the project for
only 10 years, and provided that if the District failed to
consistently maintain a 30-foot wide sandy beach over the
initial 10-year period, its application for an additional
10-year term would be required to include an evaluation of
all feasible alternatives to the retention of the revetment
without changes. The West End Parties state they are
“skeptical that the [District] [could] . . . maintain such a wide
sand beach, given that extended beach erosion was the very
reason that the [District] was formed.” According to the
West End Parties, if the District failed to achieve this goal,
“the project [would] be unlikely to be renewed and the
[District] [would] have to consider other options[,] such as a
much cheaper revetment-only option.” And if successful,
“then the expenses of maintaining the beach in years eleven
to twenty are likely to be less than the full amount
authorized by the [2017] Assessment.”
The West End Parties’ contentions are sheer
speculation regarding the likelihood of future scenarios. The
Coastal Commission could decide to renew the project’s
permit, with or without changes, despite the District’s
52
failure to maintain 30 feet of dry sand. Alternatively, the
District could succeed in that task while still requiring the
full amount of the assessment because its continued success
depended on additional expensive sand nourishment. The
West End Parties’ bare assertions to the contrary do not
demonstrate an abuse of discretion in the trial court’s
estimate that the project would last for 20 years. (See
Friends of Lagoon Valley v. City of Vacaville (2007) 154
Cal.App.4th 807, 834, fn. 13 [speculation does not establish
abuse of discretion].)
iii. The District’s Reduced Collection During
the Litigation Period
For the first time on appeal, the West End Parties
contend that in its calculation of their financial benefits from
the litigation, the trial court should have accounted for the
District’s decision to collect only 10 percent of the difference
between the 2017 and 2015 assessments during the
pendency of the litigation. The West End Parties state that
the trial court assumed 20 years of assessments, and note
that for at least some of those years, the District collected
only a small portion of the increased assessment. They
argue the court was therefore required to reduce its
calculation of their expected benefit in accordance with the
District’s reduced collection during those years, rather than
assume 20 years of full collection.
Initially, the West End Parties have forfeited this
contention by failing to raise it below. (See People v. Redd
53
(2010) 48 Cal.4th 691, 718 [contention not raised in trial
court was forfeited].) Moreover, their argument rests on a
mistaken premise. Rather than assume 20 years of annual
assessments, the trial court used a 20-year “valuation
period” -- the equivalent of 20 years of the full assessment --
based on an assumption that the project itself would last for
20 years. It is undisputed that if the 2017 assessment were
validated, the District would have been able to continue to
collect it in full for as long as necessary to fund its project,
even beyond the life of the project. Under these
circumstances, the court need not have considered the
District’s temporary collection policy.
c. Necessity of an Award Despite Sufficient
Financial Incentives
Contrary to Pritchett’s contention, nothing suggests
the trial court believed a fee award was categorically
precluded where a party’s financial benefit substantially
outweighed its costs. Indeed, in addressing the challengers’
concern that if a subsequent assessment were invalidated,
they would “continually have a problem meeting their
burden under Section 1021.5,” the trial court made clear that
it could not predict what “‘value judgment’” it might make in
the future based on Section 1021.5’s factors, citing Oakland’s
explanation that courts should sometimes award fees even
where the litigants’ expected benefits exceed their costs by a
substantial margin.
54
Nor were there any unusual circumstances that
compelled an award of fees to the Pritchett Family Trust.
The trust owned beachfront property in Malibu and did not
claim poverty. Indeed, Pritchett does not dispute the
District’s characterization of the assessment challengers as
“wealthy landowners.” As far as the record shows, the trust
could, and did, fund its litigation, on a non-contingency
basis, incurring about $36,500 in fees while standing to gain
a benefit valued at $320,000, which the court then
discounted by 50 percent in accounting for the probability of
success.
Pritchett’s attempt to compare the trust’s
circumstances to those of the litigants in Oakland is
unpersuasive. There, an association of retirees from a city’s
police department intervened in litigation in which the city
contended the retirees were being overcompensated and
demanded prospective and retroactive reductions to their
benefits. (Oakland, supra, 29 Cal.App.5th at 694-695.) The
association largely succeeded in minimizing the pension
cuts, but the trial court denied it attorney fees because the
financial interests of the association and its membership in
the litigation were much greater than the costs incurred.
(Id. at 697, 702.) The Court of Appeal reversed. Noting that
courts should sometimes award fees even where the
litigant’s expected benefits exceed its actual costs by a
substantial margin, it concluded this was “just such an
unusual case.” (Id. at 703.) In support, the Oakland court
pointed to the association’s “relative poverty” (id. at 708) and
55
described in detail the special circumstances that rendered
the litigation “financially infeasible for the Association
absent the prospect of a fee award” (id. at 704). It noted, for
example, that (1) the association had difficulty
communicating with its elderly members, many of whom
were scattered throughout the country, lacked internet
access, lived in care homes, etc., (2) its limited staff could not
reasonably have obtained financial commitments from its
membership, (3) the association had low membership dues
and no authority to assess its members more than $100
without a membership vote, and (4) no “new money was on
the table,” meaning that the monetary value of the litigation
“was not of the kind that could easily be accessed to fund the
litigation.” (Id. at 703.)
Although no new money was on the table in this case,
the family trust was hardly in the financial position of the
retirees’ association in Oakland. Pritchett does not contend
otherwise. Instead, Pritchett highlights that the trust’s
property was a defendant in an in rem action by a
well-resourced government entity. But these circumstances
make no difference here. The fact remains that Pritchett
was both sufficiently incentivized to oppose the District’s
action and well able to fund the litigation efforts. Under
these circumstances, an award of fees was not appropriate.30
30 Pritchett additionally argues that the court erroneously
failed to consider a reduced award. (See Woodland Hills
Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 942 [“if
the trial court concludes that plaintiffs’ potential financial gain
(Fn. is continued on the next page.)
56
Section 1021.5 was not intended to award dividends to
litigants who, like the challengers here, are motivated to
pursue their private financial interests without the need of
added incentives and are sufficiently resourced to seek
judicial redress without a promise of assistance.
. . . is such as to warrant placing upon them a portion of the
attorney fee burden, [Section 1021.5’s] broad language and the
theory underlying the private attorney general concept would
permit the court to shift only an appropriate portion of the fees to
the losing party or parties”].) Nothing in the record suggests the
court was unaware of its discretion to grant a reduced award.
Pritchett cites no authority, and we are aware of none, suggesting
the court must make an express consideration of a reduced
award.
57
DISPOSITION
The trial court’s judgment is affirmed. Its order
denying attorney fees is affirmed. The East End Parties are
entitled to their costs on appeal. The remaining parties
shall bear their own costs.
CERTIFIED FOR PUBLICATION
MANELLA, P. J.
We concur:
WILLHITE, J.
CURREY, J.
58