Monette-Shaw v. San Francisco Board of Supervisors

43 Cal. Rptr. 3d 659, 139 Cal. App. 4th 1210, 2006 Daily Journal DAR 6566, 2006 Cal. App. LEXIS 784
CourtCalifornia Court of Appeal
DecidedMay 26, 2006
DocketA110378
StatusPublished
Cited by9 cases

This text of 43 Cal. Rptr. 3d 659 (Monette-Shaw v. San Francisco Board of Supervisors) 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
Monette-Shaw v. San Francisco Board of Supervisors, 43 Cal. Rptr. 3d 659, 139 Cal. App. 4th 1210, 2006 Daily Journal DAR 6566, 2006 Cal. App. LEXIS 784 (Cal. Ct. App. 2006).

Opinion

Opinion

BUSCH, J.

Introduction

This is an appeal from the trial court’s denial of a petition for writ of mandate seeking to prevent the City and County of San Francisco (City) from *1214 diverting tobacco settlement revenues away from the project to replace Laguna Honda Hospital and to require the City to maintain Laguna Honda as a 1,200-bed skilled nursing facility. We affirm.

Factual Background and Procedural History

Laguna Honda Hospital, founded in 1866, has long been a fixture in the City, providing continuing care services to the City’s elderly and chronically disabled population without regard to ability to pay. As of 1999, the City operated Laguna Honda as a 1,200-bed skilled nursing facility. By the late 1990’s, its physical condition was seriously deteriorating, it suffered damage from the 1989 earthquake, and its open-ward structure was outmoded, leaving it at risk to lose federal funding that was critical to its survival. Also, in 1998, the City settled litigation it had brought against the tobacco industry. As of 1999, the City was projecting that it would receive more than $580 million in settlement payments over the next 37 years. The proceeds of this settlement gave the City a unique opportunity to address the serious problems at Laguna Honda.

In November 1999, the voters of the City approved Proposition A, a ballot measure authorizing the City to incur $299 million in debt for a health care facility to replace Laguna Honda Hospital, and dedicating certain revenues derived from the settlement with the tobacco industry to help pay for the replacement facility. After passage of Proposition A, the City began planning the project. In February 2004, the City authorized sale of bonds pursuant to Proposition A. In October 2004, the City received construction bids for the project as originally contemplated that significantly exceeded the project’s budget. Also in October 2004, in response to the escalating cost of the project, the City adopted an ordinance allowing it to negotiate with bidders to try to reduce the project costs. The project was then rebid.

During this same time period, the City was experiencing a severe economic downturn. In fiscal year 2003-2004, the City faced an unprecedented budget deficit. The tobacco settlement, however, was a fiscal bright spot. As of June 2003, projections indicated that the City would receive $238 million more over 37 years than projected at the time Proposition A was placed on the ballot. By the beginning of fiscal year 2003-2004, including interest that would be earned during the coming fiscal year, that unexpected windfall already equaled $25 million. On July 25, 2003, still before any bonds were authorized or issued pursuant to Proposition A, the City enacted an ordinance *1215 authorizing the transfer of $25 million of tobacco settlement payments from the tobacco settlement revenue sub-account 1 to its general fund.

Petitioner, a resident of the City, brought this writ of mandate action in November 2004 in the San Francisco Superior Court seeking an order that the City (a) return the $25 million and not divert any tobacco settlement funds away from the Laguna Flonda project and (b) maintain Laguna Honda as a skilled nursing facility with at least 1,200 inpatient beds unless the City could satisfy certain conditions. On April 4, 2005, the superior court, having heard oral argument, entered judgment on its order denying the writ of mandate, from which this appeal is taken.

Analysis

Because this case turns on application of settled principles of statutory interpretation as applied to the Proposition A bond measure, and not on disputed issues of fact, our review is de novo. “In reviewing a trial court’s judgment on a petition for writ of ordinary mandate, the appellate court applies the substantial evidence test to the trial court’s factual findings, but exercises its independent judgment on legal issues, such as the interpretation of statutes.” (Abbate v. County of Santa Clara (2001) 91 Cal.App.4th 1231, 1239 [111 Cal.Rptr.2d 412].)

In Associated Students of North Peralta Community College v. Board of Trustees (1979) 92 Cal.App.3d 672 [155 Cal.Rptr. 250] (Associated Students), Division One of this court reviewed the law governing interpretation of voter-approved bond measures. In that case, as in the second issue addressed here, the petitioner appealed from the superior court’s denial of a petition for writ of mandate seeking to constrain the public entity’s use of bond proceeds. (Id. at p. 676.) We noted that the relationship between the public entity and its electors had been characterized variously as either contractual or as analogous to contract, but that under either characterization the same elements comprise what we referred to as the “ ‘contract’ between the entity and its electors.” (Id. at pp. 676-677.) The four “primary” elements from which to derive the terms of the “contract” are: (1) the statutes creating the bonding entity and authorizing bonded indebtedness; (2) “[t]he resolution by which the bonding entity resolves to submit the issue to [its] electors”; (3) “the ballot proposition submitted to the voters”; and (4) the voters’ assent or ratification. (Id. at pp. 677-678.) “Extrinsic documents may be added to the primary elements,” but courts have generally looked to such extrinsic aids *1216 only where the extrinsic documents were themselves specifically referred to in one of the primary documents. (Id. at p. 678; Flood Control Dist. v. Wright (1931) 213 Cal. 335, 340, 350 [2 P.2d 168] [the proposition referred to the report of the chief engineer, which was distributed to voters]; Robbins v. Sonoma County Flood etc. Dist. (1956) 138 Cal.App.2d 291, 294 [292 P.2d 52] [the ballot question referred to the project as being “more particularly described” in an extrinsic document].) 2

I. Transfer of Tobacco Settlement Money to the General Fund

Petitioner argues that Proposition A requires the City to apply all money received from the tobacco settlement to the Laguna Honda project (with the exception of the first $1 million annually that is set aside for tobacco education) and that, therefore, the City was not permitted to allocate the $25 million to the general fund. Petitioner contends that certain language in the voter pamphlet summary of Proposition A should control over conflicting language in the ordinance by which Proposition A was placed on the ballot. This argument fails for several reasons.

The primary “contract” documents are unambiguous. The bond ordinance, which was included in the voter information pamphlet distributed to voters prior to the election, in its title, “provides] for the use of available tobacco settlement revenues’'’

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Bluebook (online)
43 Cal. Rptr. 3d 659, 139 Cal. App. 4th 1210, 2006 Daily Journal DAR 6566, 2006 Cal. App. LEXIS 784, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monette-shaw-v-san-francisco-board-of-supervisors-calctapp-2006.