California Restaurant Management Systems v. City of San Diego

195 Cal. App. 4th 1581, 126 Cal. Rptr. 3d 160, 2011 Cal. App. LEXIS 674
CourtCalifornia Court of Appeal
DecidedJune 1, 2011
DocketNo. D056695
StatusPublished
Cited by33 cases

This text of 195 Cal. App. 4th 1581 (California Restaurant Management Systems v. City of San Diego) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Restaurant Management Systems v. City of San Diego, 195 Cal. App. 4th 1581, 126 Cal. Rptr. 3d 160, 2011 Cal. App. LEXIS 674 (Cal. Ct. App. 2011).

Opinion

Opinion

McDONALD, Acting P. J.

In March 2004 the City of San Diego (City) publically announced that the rate structure it had been using to bill users of City’s wastewater system had resulted in excessive charges to several classes of users, including residential customers and some commercial and industrial customers. A residential customer, Mr. Shames, timely filed a governmental claim seeking a refund on behalf of residential customers who were overcharged and, after the claim was denied, filed a proposed class action lawsuit on behalf of that class (the Shames action).

After the Shames action was settled and dismissed, California Restaurant Management Systems (CRMS) filed its own governmental claim and then filed the instant putative class action on behalf of restaurant owners. City moved for summary judgment, contending CRMS’s governmental claim was not timely filed and the failure to satisfy the jurisdictional prerequisite required dismissal of CRMS’s proposed class action lawsuit. CRMS opposed the summary judgment motion, arguing the pendency of the Shames action tolled all limitations periods, including the period for filing a governmental claim. The trial court disagreed, and entered judgment in favor of City.

This appeal presents a question of first impression: whether the “equitable tolling” principles outlined in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 [38 L.Ed.2d 713, 94 S.Ct. 756] (American Pipe) and Crown, Cork & Seal Co. v. Parker (1983) 462 U.S. 345 [76 L.Ed.2d 628, 103 S.Ct. 2392] (Crown Cork) apply to extend the period within which a claim must be filed under the Government Claims Act (Gov. Code, § 810 et seq.).1 We conclude, on the facts presented here, CRMS’s time to file its governmental claim on behalf of restaurants was not tolled by the Shames action, and therefore we affirm the judgment.

[1587]*1587I

FACTUAL AND PROCEDURAL BACKGROUND

A. City’s Overcharges to Certain Customers

City operates a regional wastewater treatment and disposal system. In late March 2004 City issued a report that its wastewater user rate charge system did not include any specific cost recovery component for organic materials. The report stated that, as a result of this omission, residential customers and certain commercial and industrial customers who discharged lower levels of organic materials into the sewer system were paying “a disproportionately high percentage of the overall costs of the Wastewater System than is appropriate.”

B. The Shames Action

On April 30, 2004, Mr. Shames filed a governmental claim pursuant to sections 910 and 945.4, on behalf of himself and a putative class composed of “residential property owners who are, or have been, customers of the City’s water and sewer services (‘the putative class’).” The claim asserted a demand for a refund for alleged overcharges paid by the putative class, alleging that “certain commercial and industrial customers discharge waste-water with relatively higher concentration of organic matters than residential customers do,” and that “[b]ecause the [wastewater] rates charged by the City do not account for organics, . . . residential customers have been charged disproportionately higher rates than commercial customers” in violation of the California Constitution.

The City denied the claim on May 14, 2004. Shames promptly filed his class action seeking refunds for residential property owners. The Shames action alleged that “Commercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential customers,” that “[Residential property owners impact the City’s sewer system at lower rates than commercial users because they discharge less organic pollutants,” and that City “does not account for this disproportionate impact when charging sewer fees.” Shames, defining the class as “[a]ll persons who own or have owned residential property [during the class period] and who have been charged sewer fees,” alleged there were common issues of fact and law as to residential property owners’ rights and sought a refund on their behalf. The Shames action alleged Shame had satisfied the governmental claim requirements because he had filed a claim “on behalf of himself and all City of San Diego residential property owners seeking a refund of sewer fee [1588]*1588overcharges [which] met the requirements of [Government Code sections 910 and 945.4].”

In mid-2004 the California Restaurant Association (CRA), a trade association that advocates on behalf of restaurants and related businesses, contacted Shames’s attorney (Mr. Benink) to ask whether Benink could amend the Shames action to include food establishments within the class action.2 Benink replied that it appeared that “some segments of commercial customers may have been overcharged in the same manner [as residential customers],” and that Benink had decided to amend the complaint to expand the class “to include all customers who were overcharged, rather than limiting it to residential customers.” Benink observed that CRA’s members “may be part of that class, if and when it is certified, and may potentially participate in any benefit we achieve for the class through this lawsuit.” However, Benink cautioned his firm was not agreeing to specifically represent either CRA or any of its members, and they should seek their own attorney if they wanted representation.

In September 2004 Shames filed an amended complaint. He alleged that “Commercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential and other commercial customers do,” and that because the rates charged by City “do not account for organic pollutants, . . . some customers have been charged disproportionately higher rates than commercial and industrial customers with higher usage.” The amended complaint proposed an expanded class definition to define the putative class as “Customers . . . who, based on their relative contributions to overall system handling and processing requirements, . . . have paid or are paying, during the time period June 16, 2000[,] through October 1, 2004, a disproportionately higher percentage of the costs” (fn. omitted) of the wastewater system. However, Shames did not file an amended governmental claim seeking a refund on behalf of the newly defined class, and did not file a new governmental claim seeking a refund on behalf of the expanded class.

In April 2005 Shames filed his motion for class certification. Shames sought certification of a class defined only as single-family residential sewer [1589]*1589customers.3 While the certification motion was pending, Shames and City commenced and pursued a lengthy mediation process that in late 2006 resulted in a tentative settlement. Shames filed a motion for preliminary approval of the settlement in December 2006, and posted a notice to the class in February 2007.

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Bluebook (online)
195 Cal. App. 4th 1581, 126 Cal. Rptr. 3d 160, 2011 Cal. App. LEXIS 674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-restaurant-management-systems-v-city-of-san-diego-calctapp-2011.