Filed 10/30/19
                        CERTIFIED FOR PARTIAL PUBLICATION*




             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                THIRD APPELLATE DISTRICT
                                             (El Dorado)
                                                 ----



COUNTY OF EL DORADO et al.,                                              C088409

                 Petitioners,                                        (Super. Ct. No.
                                                                      PC20150633)
        v.

THE SUPERIOR COURT OF EL DORADO COUNTY,

                 Respondent;

THOMAS AUSTIN et al.,

                 Real Parties in Interest.


       ORIGINAL PROCEEDINGS in mandate. Stay issued. Petition denied. Warren
C. Stracener, Judge.

      Michael J. Ciccozzi and David Livingston, County Counsel, Kathleen A.
Markham, Deputy County Counsel; Abbott & Kindermann, William W. Abbott, and
Glen C. Hansen for Petitioner.

      Jennifer Bacon Henning for California State Association of Counties, Rural
County Representatives of California, and League of California Cities as Amici Curiae
on behalf of Petitioner.


* Pursuant to California Rules of Court, rule 8.1110, this opinion is certified for
publication with the exception of parts 2.0 and 3.0 of the Discussion.

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       No appearance for Respondent.

     Kuzyk Law, Mark J. Leonardo, Reid H. Breitman; Benedon & Serlin, Douglas G.
Benedon, Wendy S. Albers for Real Parties in Interest.

       Bernard Carlson in pro. per. for Friends of El Dorado County as Amicus Curiae on
behalf of Real Parties in Interest.



       Real parties in interest Thomas and Helen Austin (the Austins) filed an action to
recover development impact fees under the Mitigation Fee Act (Gov. Code, § 66000 et
seq.)1 for the failure of petitioners County of El Dorado and its Community Development
Agency (collectively “County”)2 to make prescribed findings to justify the continuing
need for 11 fees assessed by the County and its special districts. The trial court denied a
second demurrer that renewed the County’s previous claim that the limitations period for
the Austins’ action expired. On the County’s petition for a writ of mandate to overturn
this ruling, we issued an alternative writ or order to show cause and, with the
acquiescence of the Austins, issued a stay of proceedings. On plenary review, we shall
vacate the stay and deny the County’s petition for writ of mandate.3
                 FACTUAL AND PROCEDURAL BACKGROUND
       We do not act as an adjunct to the superior court’s motion department. We should
exercise discretion to review rulings on pleadings with extreme reluctance, confining it
“to instances of such grave nature or of . . . significant legal impact.” (Babb v. Superior



1 Undesignated statutory references are to the Government Code.

2 These are the only defendants appearing as petitioners in this matter.

3 We have allowed amicus briefing. We are not persuaded to expand the issues beyond
those that the actual litigants in this proceeding have already briefed. (City of Brentwood
v. Campbell (2015) 237 Cal.App.4th 488, 493, fn. 6.)


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Court (1971) 3 Cal.3d 841, 851.) The present case is simply a desultory request by
particular landowners for a refund of fees that a particular local entity failed to justify.
We are not aware, at least through the vehicle of the present litigation, that floodgates
will open to challenges of mitigation fees for failure to make these prescribed findings on
a statewide basis4 if we do not rule in the County’s behalf at the pleadings stage on the
question of the proper limitations period. This is as opposed to the context of a
subsequent ruling premised on a factual showing as to the limitations period, or a ruling
on the merits of the underlying dispute that might moot the whole issue—in contrast with
the Babb decision regarding the propriety of cross-complaints for malicious prosecution
in pending actions. Moreover, if the purported size of the administrative record (as the
County asserts) were a ground for writ relief, we would find ourselves issuing writs in
every demurrer that raised the limitations period in challenges to environmental impact
reports. The County’s concern with its potential liability on the merits also does not
distinguish it from any other defendant unsuccessful on a demurrer in an action involving
a large prayer for relief. However, having issued the alternative writ and created a cause,
we do not see any purpose in revisiting this threshold issue. We therefore address the
demurrer on the merits, without intending to signify the present proceedings as a
bellwether of our willingness to entertain relief for rulings on pleadings.
       In the original pleading filed in December 2015, the Austins alleged that as the
current property owners, they were entitled to a refund of eight different mitigation fees
exacted by four special districts in which their real property is located, because the
County had failed to comply with its obligation under section 66001 to make findings
justifying the continued collection and retention of the mitigation fees within the
prescribed period of five years (so-called “nexus” findings). A first amended complaint


4 There is, so far as the parties have identified, only a single appellate case regarding the
failure to make nexus findings, which we cite below in part 1.0 of the Discussion.


                                               3
superseded the original pleading in December 2016 (apparently following a demurrer that
is not included in the exhibits to the petition). The Austins now named 11 different
mitigation fees assessed by five special districts. They alleged the deadlines for nexus
findings for each of these fees had expired prior to the filing of their action on various
dates.
         The County demurred, asserting that a one-year limitations period for penalties
and forfeitures applied, that the Austins had failed to allege “prejudice” as purportedly
required under section 65010, and that the Austins failed to name necessary parties as
defendants. In December 2017, the trial court overruled the demurrer on the first two
grounds because it found each subsequent collection of a fee within the applicable
limitations period—in the absence of nexus findings—was a new breach, and as a result
the limitations period could not apply to the entirety of the cause of action under the
“continuous accrual” doctrine. Thus, it concluded that “[r]egardless of which statute of
limitation applies, one year, three year or four year, it does not appear clearly and
affirmatively that, upon the face of the [first] amended complaint and petition, the right of
action is necessarily barred. There remains claims for refund of fees collected within the
one year, three year and four year statutes. ‘A demurrer does not lie to a portion of a
cause of action’ ” (citing PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682
(PH II)). It also concluded the requirement to plead prejudice under section 65010 did
not apply to proceedings under section 66001 for failure to make nexus findings. It did
find, however, that certain parties were indispensable with respect to certain of the
collected fees, and sustained the demurrer to that extent with leave to amend.
         The Austins filed the present amended pleading in January 2018. The pleading
again identified the 11 funds collecting mitigation fees for the County and special
districts. It again alleged the County had failed to make nexus findings for each of these
by various deadlines between June 2011 and June 2013. The County shortly thereafter



                                              4
filed the present demurrer, setting the hearing for August 2018, reiterating its arguments
regarding the limitations period and the need to plead prejudice.5
        Although a defendant cannot demur on the same grounds to a previous demurrer
that was overruled (Bennett v. Suncloud (1997) 56 Cal.App.4th 91, 97 & fn. 1
(Bennett)),6 and the Austins raised an objection on this basis, the trial court reached the
merits of this renewed challenge to the pleadings and overruled it “for the same reasons
as stated in the analysis and rulings on the prior demurrer[]” in a November 2018 order.
The County filed the present petition shortly thereafter. Briefing was completed in April
2019.
                                       DISCUSSION
1.0     The Limitations Period is One Year
        Section 66001 does not specify a limitations period. The County contends that
relief under the statute constitutes a penalty or forfeiture, and therefore the appropriate
limitations period is one year. (Code Civ. Proc., § 340, subd. (a); see People ex rel. Dept.
of Conservation v. Triplett (1996) 48 Cal.App.4th 233, 252 [concluding that fee was not a
penalty within meaning of statute]; 3 Witkin, Cal. Procedure (5th ed. 2008) Actions,
§ 668, pp. 884-886.) We agree.
        Under well-established California law, statutes that provide for mandatory
damages either in addition to actual injury or regardless of actual injury or fault are



5 Arguably, this further undermines the County’s entitlement to writ relief because it is
untimely, since its claims of “large record” and “threat to its fisc” were surely present at
the time of the December 2017 order overruling its second demurrer, yet the County did
not seek writ relief at that time on the denial of the merits of its present limitations claim.
Again, we will put this matter aside and simply reach the issue.
6 Nevertheless, on review this does not preclude our consideration of the issue. (Herrera
v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1508-1509; Bennett,
supra, 56 Cal.App.4th at p. 97.)


                                               5
considered to be in the nature of a penalty or forfeiture subject to the one-year limitations
period. (County of San Diego v. Milotz (1956) 46 Cal.2d 761, 766 [“ ‘sum of money
made payable . . . for the nonperformance of an act’ ”; applies to reduction in fee for
untimely court reporter’s transcripts]; Hypertouch, Inc. v. ValueClick, Inc. (2011) 192
Cal.App.4th 805, 842 [liability for deceptive e-mail regardless of actual damage];
Brandenburg v. Eureka Redevelopment Agency (2007) 152 Cal.App.4th 1350, 1365
[contract voided for conflict of interest without showing of damage]; Goehring v.
Chapman University (2004) 121 Cal.App.4th 353, 387 [mandatory refund of tuition for
failure to make timely disclosures of accreditation status]; Montalti v. Catanzariti (1987)
191 Cal.App.3d 96, 98 [liability for eavesdropping regardless of actual injury].)
       Section 66001 provides in pertinent part, “For the fifth fiscal year following the
first deposit into the account [dedicated to the mitigation fee (see subd. (c) & § 66006)],
and every five years thereafter, the local agency shall make all of the following [nexus]
findings with respect to that portion of the account . . . remaining unexpended” (we omit
the particulars for nexus findings). (§ 66001, subd. (d)(1).) “If the findings are not made
as required by this subdivision, the local agency shall refund the moneys in the account
. . . as provided in subdivision (e).” (§ 66001, subd. (d)(2).) The cross-referenced
subdivision directs the local agency to identify the commencement of the public
improvement for which sufficient funds have been collected “or shall refund to the then
current record owner . . . of the [property] . . . the unexpended portion of the fee, and any
interest accrued thereon. By means consistent with the intent of this section, a local
agency may refund the unexpended revenues by direct payment, by providing a
temporary suspension of fees, or by any other reasonable means. The determination by
the . . . local agency of the means by which [to refund] those revenues . . . is a legislative
act.” (§ 66001, subd. (e), italics added.)
       This entitlement to the return of unexpended mitigation fees for failure to make
nexus findings exists regardless of whether on the merits the local agency could in fact

                                              6
demonstrate that the basis for nexus findings existed at the time the deadline expired.
(Walker v. City of San Clemente (2015) 239 Cal.App.4th 1350, 1367-1369 [concluding
that local agency was not entitled to a remand to make nexus findings post hoc to defeat
action] (Walker).)7 Moreover, because it is the current property owner who is entitled to
the refund regardless of whether the current owner actually paid any fees into the fund,
this entitlement to a refund exists regardless of whether actual injury exists. Thus, as in
the cases cited above where a court reporter provided a product, or a contractual right is
voided regardless of whether it provided mutual arms-length benefits, or educational
services go uncompensated for failure to make prescribed disclosures, this statute
imposes liability without regard to any substantive fault on the part of the party held
liable, and regardless of any actual injury (as with liability for e-mail & eavesdropping
violations). Therefore, it does not represent a remedy but a focus on coercing particular
conduct from the party held liable without any substantive fault. We conclude the statute
is in the nature of a penalty or forfeiture, and as a result is subject to the one-year period
of limitations. (Code Civ. Proc., § 340, subd. (a).)
2.0    Ongoing Accrual Bars a Demurrer to the Cause of Action
       Where there is an ongoing severable wrong, a limitations period generally runs at
the time of each breach, making actionable any breaches that occur within the limitations
period, even if the earlier breaches are untimely. (Aryeh v. Canon Business Solutions,
Inc. (2013) 55 Cal.4th 1185, 1199 (Aryeh); Armstrong Petroleum Corp. v. Tri-Valley Oil



7 The Walker case, otherwise focused on the issue of nonexistent findings to justify
continued retention of a “beach parking” impact fee after 20 years without any showing
of need or identification of proposed new facilities, does not consider the issue of the
limitations period beyond rejecting the plaintiffs’ invocation of estoppel or unjust
enrichment in connection with the assumption that a four-year limitations period applied.
(Walker, supra, 239 Cal.App.4th at pp. 1370-1371.) In the only remarks touching on the
present issue, the court rejected the request to remand even if the refund constituted a
forfeiture. (Id. at p. 1369.)


                                               7
& Gas Co. (2004) 116 Cal.App.4th 1375, 1388-1389 [contractual breach].)8 This theory
of ongoing accrual applies in the context of challenges to the lawfulness of taxes, with the
limitations period accruing with each payment. (Howard Jarvis Taxpayers Assn. v. City
of La Habra (2001) 25 Cal.4th 809, 822, 825 (Howard Jarvis).)
       As stated above, the trial court ruled in its November 2018 order (incorporating its
Dec. 2017 tentative ruling on the same issue) that a failure to make the nexus findings by
the deadline required a requested refund of any payments made after the deadline without
nexus findings within the period of limitation (whatever it was), and therefore it would
not sustain a demurrer to the entire cause of action on this basis. The County claims this
amounts to prospective “invalidation” of the various fees, a remedy that goes beyond the
statute. (The County does not contest the trial court’s conclusion that a demurrer to the
refund cause of action is improper under PH II, supra, 33 Cal.App.4th 1680 if the
continuous accrual doctrine applies to payments within the limitations period).
       The County’s assertions in support of its invalidation theory are mostly non
sequiturs. That the statute allows a credit to be applied against future payments for any
necessary refunds does not preclude refunds for any payments made after the deadline in
the absence of nexus findings. The entitlement of the current property owner to claim the
refund also does not prevent application of the refund procedure to payments made after
the deadline. Similarly irrelevant are the limitation of the refunds to funds that are
unexpended and on hand (§ 66001, subd. (d)(2) [excluding letters of credit, bonds, or
other instruments]); this does not bar subsequent payments from the refund procedure if
they have not been spent on the dedicated project before the request for a refund or are
otherwise unavailable. In short, an ongoing obligation to refund available fees on request



8 This contrasts with the continuing violation doctrine, in which ongoing nonseverable
wrongs toll the commencement of the limitations period as to the entire injury. (Aryeh,
supra, 55 Cal.4th at pp. 1197-1198.)


                                              8
in the absence of nexus findings does not invalidate the ability of the local agency to
collect the fees.
       Ongoing accrual also does not entitle a plaintiff, as the County claims, to postpone
indefinitely a claim against public entities. If not made within one year of the deadline
for findings, the plaintiff has only a limited remedy for the subsequent payments made
within one year before filing a refund action, not the entire corpus existing at the time of
the deadline. The County’s liability for failure to comply with its statutory duty is
accordingly limited. (See Howard Jarvis, supra, 25 Cal.4th at p. 825 [“Our decision in
this case does not . . . subject municipalities to limitless claims for refund of illegal
taxes,” pointing out “our holding relates only to injuries occurring in the statutory three-
year period before suit is brought”].)
       As for the County’s assertion that the trial court misapplied “legislative intent” in
finding ongoing accrual applicable misstates the trial court’s analysis. It was simply
describing the purpose of the refund mechanism in preventing unwarranted collection and
retention of mitigation fees. That is evident on the face of the statute. It provides for
refunds of available funds in the fee accounts in the absence of nexus findings, not the
funds available at the time of the findings deadline. Having breached its statutory duty to
justify its fees, the ongoing collection was subject to refund until the County remedied its
breach. It is the nature of the manner in which violations occur and not any legislative
intent that prompted the trial court properly to apply the ongoing accrual principle.
       Finally, the County’s recurrent invocation of public policy and the threat to the
security of its financial resources “ ‘is not a trump card that somehow requires the courts
to countenance ultra vires or illegal tax practices.’ ” (Howard Jarvis, supra, 25 Cal.4th
at p. 824.)
       The trial court thus correctly overruled the demurrer, because there is at least some
portion of the Austins’ cause of action for a refund that is timely. Whether this merits
further litigation of this matter is for the Austins to determine.

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3.0    The Austins Did Not Need to Plead “Prejudice and Substantial Injury”
       Title 7 of the Government Code (Planning and Land Use) has three divisions:
“Planning and Zoning” (§ 65000 et seq.; see Stats. 1974, ch. 1536, § 3, p. 3464),
“Subdivisions” (§ 66410 et seq.; see Stats. 1974, ch. 1536, § 4, p. 3464), and “Official
Maps” (§ 66499.50 et seq.; see Stats. 1975, ch. 24, §26.5, p. 42). In chapter one of the
Planning and Zoning division, called “General Provisions” (§ 65000 et seq; see Stats.
1957, 1st Ex. Sess. 1956, ch. 33, § 2, p. 359), appears section 65010: “(a) Formal rules
of evidence or procedure applicable in judicial actions and proceedings shall not apply in
any proceeding subject to this title . . . . [¶] (b) No action [or] inaction . . . by any public
agency . . . on any matter subject to this title shall be held invalid . . . by any court on the
ground of . . . any . . . omission . . . as to any matter pertaining to . . . findings . . . subject
to this title, unless the court finds that the error was prejudicial and that the party . . .
appealing suffered substantial injury from that error and that a different result would have
been probable if the error had not occurred. There shall [not] be [any] presumption that
error is prejudicial . . . .” “Section 65010 . . . is a ‘curative statute’ enacted by the
Legislature for the purpose of ‘terminating [the] recurrence of judicial decisions which
had invalidated local zoning proceedings for technical procedural omissions.’ ” (Rialto
Citizens for Responsible Growth v. City of Rialto (2012) 208 Cal.App.4th 899, 921
(Rialto Citizens); id. at pp. 922-923 [failure of city council to make findings of
consistency with general plan did not result in prejudice or substantial injury where
planning commission had made the finding and no evidence of inconsistency].)
       Section 65010 is thus a general statutory directive to courts to apply the doctrine
of harmless error to agency proceedings under title 7 of the Government Code. It does
not purport to require a litigant to plead harmless error in seeking relief when an agency
fails to comply with an express statutory directive to make findings, such as in section
66001. Moreover, with respect to section 66001, where the entitlement to a refund can be
a windfall for an owner subsequent to the owner who actually made the payment, the

                                                 10
County does not explain how the current owner could even plead prejudice when it is the
failure itself that entitles the current owner to the refund without any further showing of
injury. Rialto Citizens is not apposite, as the County claims, because there were findings
made but not adopted at the city level. As a result, the Austins were not obligated to
plead prejudice and substantial injury in their complaint.
                                      DISPOSITION
       The stay is vacated upon finality of this opinion. The County’s petition for a writ
of mandate is denied. The Austins shall recover their costs. (Cal. Rules of Court, rule
8.493(a)(1)(A).)



                                                   /s/
                                                  Butz, J.



We concur:



 /s/
Raye, P.J.



 /s/
Hull, J.




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