Filed 5/2/17 Certified for publication 5/31/17 (order attached)




              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FIRST APPELLATE DISTRICT

                                               DIVISION TWO


CALIFORNIA TAXPAYERS ACTION
NETWORK,
         Plaintiff and Appellant,                                 A145078

v.                                                                (Contra Costa County
TABER CONSTRUCTION, INC., et al.,                                 Super. Ct. No. MSC1400996)
         Defendants and Respondents.


         Education Code section 17406 authorizes school districts to use lease-leaseback
agreements in contracting for construction or improvement of school facilities. Under a
lease-leaseback agreement, the school district leases its own real property to a contractor
for a nominal amount, and the contractor agrees to construct school facilities or improve
existing facilities on the property and lease the property and improvements back to the
school district. At the end of the lease-leaseback agreement, title to the construction
project vests in the school district. (Ed. Code, § 17406, subd. (a); Davis v. Fresno
Unified School District (2015) 237 Cal.App.4th 261, 277 (Davis).)
         This case is the latest in a line of cases challenging the propriety of school
districts’ use of lease-leaseback agreements. (See Davis, supra, 237 Cal.App.4th 261;
McGee v. Balfour Beatty Construction, LLC (2016) 247 Cal.App.4th 235 (McGee); Los
Alamitos Unified School District v. Howard Contracting, Inc. (2014) 229 Cal.App.4th
1222 (Los Alamitos).) Plaintiff California Taxpayers Action Network brought a reverse
validation action (Code Civ. Proc., § 863), raising various legal theories to challenge a


                                                          1
lease-leaseback agreement between defendants Mount Diablo Unified School District
(the School District) and Taber Construction, Inc. (Taber). Defendants demurred, and the
trial court sustained the demurrers without leave to amend.
       We uphold the trial court’s ruling on the demurrers as to all of the lease-leaseback
related claims that attempt to engraft requirements on the transaction that are not part of
the applicable Education Code. However, we conclude plaintiff has stated a claim of
conflict of interest against Taber sufficient to withstand a demurrer.
       Accordingly, we reverse the judgment with respect to plaintiff’s fourth cause of
action for conflict of interest and otherwise affirm.1
                  FACTUAL AND PROCEDURAL BACKGROUND
       A “lease-leaseback” agreement under Education Code section 17406 has been
described as a “method for financing and delivery of new school facilities.” (Davis,
supra, 237 Cal.App.4th at p. 276). It is an alternative to the traditional “design-bid-
build” method, which involves hiring an architect to design the project, requesting
competitive bids based on the design, and having the winning bidder build the project.
(Ibid.)2


       1
        We granted the applications of five organizations—Construction Employers
Association, California Association of School Business Officials, California School
Boards Association’s Education Legal Alliance, Coalition for Adequate School Housing,
and Association of California Construction Managers—to file briefs in support of
defendant as amici curiae. We also granted plaintiff’s request for judicial notice of
documents filed on July 23, 2015, and we granted Taber’s request for judicial notice of
documents filed October 22, 2015.
       2
         The Legislature first authorized lease-leaseback agreements in 1957. (Davis,
supra, 237 Cal.App.4th at p. 276.) We note that a third project delivery method known
as “design-build” was approved by the Legislature in 2001. (Id. at p. 279, fn. 10.)
“Under the design-build delivery method, both the design and construction work is let to
a single entity, which centralizes responsibility for both aspects of the project. ([Ed.
Code,] § 17250.15, subd. (b) [definition of design-build]; see 10 Miller & Starr, Cal. Real
Estate [(3d ed. 2010)] § 27:27, p. 27-143 [(rel. 9/2010)].) Design-build contracts are not
subject to the competitive bidding requirements in Public Contract Code section 20110,
but the school district must (1) invite competitive sealed proposals, (2) award the contract
to the responsible bidder whose proposal is determined to provide the “ ‘best value’ ” to

                                              2
       In this case, the School District and construction firm Taber entered into a lease-
leaseback agreement for Taber to complete a construction project, which involved
heating, ventilation, and air conditioning (HVAC) modernization of five elementary
schools and three middle schools owned by the School District. The agreement
comprised a master site lease and a master facilities lease. Under the master site lease,
the School District agreed to lease the “Project Sites,” which are portions of the eight
school sites, to Taber for one dollar. (This is the “lease” of the lease-leaseback
agreement.) Under the master facilities lease, Taber agreed to construct the project for
the “Guaranteed Project Cost” of $14,743,395. The master facilities lease included
general construction provisions and construction schedules for each project site. The
School District was to pay Taber $13,269,057 in “Tenant Improvement Payments” prior
to “taking delivery or occupancy of the Project.” Later, six “Lease Payment Amount[s]”
of $245,723 plus interest would be paid at 30-day intervals starting 35 days after the
filing of a notice of completion of the project. (This is the “leaseback” of the lease-
leaseback agreement.)3
       Plaintiff initiated a reverse validation action against Taber and the School District
under California Code of Civil Procedure section 863.4 In its first amended complaint


the school district, and (3) comply with the other requirements in [Education Code]
section 17250.25. This selection method has been described as competitive selection.”
(Ibid.)
       3
          Although the master site lease and master facilities lease were ostensibly separate
contracts, the master site lease included a term that the project sites would be leased back
to the School District pursuant to the master facilities lease, and the master facilities lease
provided that it was executed at the same time as the master site lease. When we refer to
“defendants’ lease-leaseback agreement,” we mean the master site lease and the master
facilities lease together.
       4
         Code of Civil Procedure section 863 is part of the validation statutes (Code Civ.
Proc., §§ 860-870), which “ ‘provide an expedited process by which certain public
agency actions may be determined valid and not subject to attack.’ ” [Citations.] The
validation statutes apply to a matter when ‘any other law’ authorizes their application,
and the statutes provide for a 60-day period during which an action may be brought to
‘determine the validity of such matter.’ (Golden Gate Hill Development Company, Inc.

                                              3
(FAC), the operative pleading, plaintiff asserted seven causes of action: (1) failure to
comply with Education Code sections 17400 et seq., (2) breach of fiduciary duty, (3)
failure to comply with Education Code section 17417, (4) contractor conflict of interest,
(5) improper use of Education Code sections 17400 et seq., (6) improper delegation of
discretion, and (7) declaratory relief.
        Plaintiff alleged, among other things, that the Education Code requires “genuine
lease-leaseback agreements,” which “provide for financing of the school facility project
over time,” but defendants’ lease-leaseback contracts were “sham leases”; that the lease-
leaseback contracts were illegal because a public bidding process is required for school
construction projects; and that Taber was precluded from being awarded the contracts due
to conflicts of interest that arose from Taber providing professional preconstruction
services to the School District regarding the construction project prior to entering the
lease-leaseback contracts.
        The School District filed a demurrer to the FAC and a motion to strike portions of
the FAC, and Taber filed a demurrer. The School District and Taber each requested the
court take judicial notice of 57 documents, including a written opinion of the Attorney
General from 1973, documents filed in pending cases raising the same issues (and
brought by plaintiffs represented by Kevin Carlin, the attorney representing plaintiff in
this case), Assembly Bill Number 1486 from 2004, and the Governor’s veto message on
the bill.5



v. County of Alameda (2015) 242 Cal.App.4th 760, 765-766.) “While [Code of Civil
Procedure] section 860 authorizes a public agency to bring an action to validate matters
to which the validation statutes apply, the public is also authorized to bring actions.
Thus, section 863 provides that if the relevant public agency does not initiate validation
proceedings, ‘any interested person may bring an action within the time and in the court
specified by Section 860 to determine the validity of such matter.’ ” (Id. at p. 766.)
        5
        Among the documents listed in the defendants’ requests for judicial notice were
many default validation judgments involving various California school districts dating
back to 2001. These were apparently intended to show that lease-leaseback construction
agreements are commonly used by school districts throughout the state.


                                             4
       The trial court issued a tentative decision on the demurrers and the School
District’s motion to strike, no party requested argument, and the tentative decision
became the court’s final ruling. The trial court sustained defendants’ demurrers without
leave to amend.6 It granted defendants’ request for judicial notice of the published
opinion of the California Attorney General but denied their requests as to the remaining
56 documents.
                                      DISCUSSION
A.     Standard of Review
       “In reviewing the sufficiency of a complaint against a general demurrer, we are
guided by long-settled rules. ‘We treat the demurrer as admitting all material facts
properly pleaded, but not contentions, deductions or conclusions of fact or law.
[Citation.] We also consider matters which may be judicially noticed.’ [Citation.]
Further, we give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context. [Citation.] When a demurrer is sustained, we determine whether
the complaint states facts sufficient to constitute a cause of action. [Citation.] And when
it is sustained without leave to amend, we decide whether there is a reasonable possibility
that the defect can be cured by amendment: if it can be, the trial court has abused its
discretion and we reverse; if not, there has been no abuse of discretion and we affirm.
[Citations.] The burden of proving such reasonable possibility is squarely on the
plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
       Issues of statutory construction are questions of law subject to independent review.
(MacIsaac v. Waste Management Collection and Recycling, Inc. (2005) 134 Cal.App.4th
1076, 1082. (MacIsaac).)




       6
        The trial court found the School District’s motion to strike moot in light of the
ruling on the School District’s demurrer.


                                             5
B.     First, Third, and Fifth Causes of Action: Claims Based on the Education Code
       Education Code sections 17400 through 17429 (article 2) govern leases and
agreements relating to real property and buildings used by school districts.7 Plaintiff’s
first, third, and fifth causes of action are expressly premised on the allegation that the
lease-leaseback agreement in this case (consisting of the master site lease and the master
facilities lease) does not comply with article 2 and, in particular, sections 17406 and
17417. As will be seen, section 17417 imposes competitive bidding requirements for
school construction projects, but section 17406 exempts lease-leaseback agreements from
the requirements of section 17417. Plaintiff contends defendants’ lease-leaseback
agreement is not a genuine lease-leaseback agreement under section 17406, and,
therefore, defendants’ agreement is illegal because the School District did not comply
with section 17417 and obtain competitive bids. In addition, plaintiff contends that, as a
matter of statutory interpretation, section 17406 does not exempt school districts from the
competitive bidding requirements of section 17417. We conclude plaintiff has failed to
state any claim based on asserted violation of article 2.
       1.     Relevant Education Code Statutes
       Section 17417 generally requires competitive bidding for school construction
projects and sets forth the procedures for soliciting and reviewing sealed bids.8 Section


       7
         Further undesignated statutory references are to the Education Code. Because
sections 17400 through 17429 are at title 1, division 1, part 10.5, chapter 4, article 2 of
the Education Code, we refer to this set of statutes as “article 2.”
       8
         Section 17417 provides: “After the governing board of a school district has
complied with Section 17402, it shall, in a regular open meeting, adopt a resolution
declaring its intention to enter into a lease or agreement pursuant to this article. The
resolution shall describe, in any manner to identify it, the available site upon which the
building to be used by the district shall be constructed, shall generally describe the
building to be constructed and state that the building shall be constructed pursuant to the
plans and specifications adopted by the governing board therefor, shall, if that is the case,
state the minimum yearly rental at which the governing board will lease real property
belonging to the district upon which the building is to be constructed, and shall state the
maximum number of years for which the school district will lease the building or site and
building, as the case may be, and shall state that the proposals submitted therefor shall

                                              6
17406 offers an exception to section 17417. The version of section 17406, subdivision
(a), in effect in 2014 provides: “Notwithstanding Section 17417, the governing board of
a school district, without advertising for bids, may let, for a minimum rental of one dollar
($1) a year, to any person, firm, or corporation any real property that belongs to the
district if the instrument by which such property is let requires the lessee therein to
construct on the demised premises, or provide for the construction thereon of, a building
or buildings for the use of the school district during the term thereof, and provides that
title to that building shall vest in the school district at the expiration of that term. The
instrument may provide for the means or methods by which that title shall vest in the
school district prior to the expiration of that term, and shall contain such other terms and
conditions as the governing board may deem to be in the best interest of the school
district.” (Former § 17406, subd. (a), added by Stats.1996, ch. 277, § 3.)9


designate the amount of rental, which shall be annual, semiannual, or monthly, to be paid
by the school district for the use of the building, or building and site, as the case may be.
The resolution shall fix a time, not less than three weeks thereafter for a public meeting
of the governing board to be held at its regular place of meeting, at which sealed
proposals to enter a lease or agreement with the school district will be received from any
person, firm, or corporation, and considered by the governing board. Notice thereof shall
be given in the manner provided in Section 17469.”
       “At the time and place fixed in the resolution for the meeting of the governing
body, all sealed proposals which have been received shall, in public session, be opened,
examined, and declared by the board. Of the proposals submitted which conform to all
terms and conditions specified in the resolution of intention to enter a lease or agreement
and which are made by responsible bidders, the proposal which calls for the lowest rental
shall be finally accepted, or the board shall reject all bids. The board is not required to
accept a proposal, or else reject all bids, on the same day as that in which the proposals
are opened.”
        Section 17402 requires the governing board of a school district to “have available
a site upon which a building to be used by the district may be constructed” and to prepare
and adopt “plans and specifications for the building . . . approved pursuant to Sections
17280 to 17316 [governing the construction of school buildings]” before it may enter into
a lease.
       9
         Section 17406 has since been amended, as we discuss post at footnote 18. The
parties do not dispute that the version of section 17406 in effect in 2014 applies to

                                               7
       2.     First Cause of Action: Defendants’ Lease-Leaseback Agreement Meets the
              Requirements of Section 17406
       Plaintiff contends it has properly alleged a violation of section 17406 because,
even though defendants’ lease-leaseback agreement meets the express requirements of
section 17406, the agreement is a sham and subterfuge to avoid the competitive bidding
requirements of section 17417. We disagree.
       Our conclusion is based on the plain language of section 17406. The statute has
three requirements: “[1] the real property belong[s] to the school district, [2] the lease is
for the purposes of construction, and [3] the title shall vest in the school district at the end
of the lease term.” (McGee, supra, 247 Cal.App.4th at p. 244; § 17406, subd. (a)(1).)10
Here, the lease-leaseback agreement between the School District and Taber, as alleged by
plaintiff, meets these three statutory requirements. The School District owns the project
sites, the agreement requires Taber to complete the construction project (HVAC
modernization), and title vests in the School District at the end of the lease term. Nothing
more is required.11
       Plaintiff premises its contention that section 17406 imposes additional
requirements on City of Los Angeles v. Offner (1942) 19 Cal.2d 483 (Offner), but the case


determining the requirements of a lease-leaseback agreement. Further references to
section 17406 are to the 2014 version of the statute unless otherwise specified.
       10
           Los Alamitos, supra, 229 Cal.App.4th 1222 also recognized three requirements
for a lease-leaseback agreement under section 17406. The court determined the school
district established the necessary elements of its validation action where the district
showed “[1] it owns the land to be leased; [2] Byrom-Davey, the contractor for the
Project, agreed to construct the Project for a guaranteed maximum price; and [3] title to
the site and all improvements made by the Project will vest in the District at the end of
the lease term.” (Id. at p. 1227.)
       11
          We note that Taber identifies four requirements under section 17406: (1) the
school district owns the property, (2) the school district lets the property to the contractor
for a minimum rent, (3) the agreement requires the contractor to provide construction
services, and (4) title to the improvements vests with the school district at the expiration
of the lease term. The lease-leaseback agreement in this case meets the minimum lease
requirement.


                                               8
has nothing to do with section 17406 and is inapposite. In Offner, the city of Los
Angeles proposed a lease-leaseback agreement under which the city would lease its real
property to a contractor, the contractor would build a rubbish incinerator on the property,
and the contractor would lease the property with the incinerator back to the city for 10
years. (Id. at p. 484.) The city’s proposed lease-leaseback agreement was challenged “on
the ground that [the proposed agreement] would violate the constitutional provision
[former article 11, section 18 of the California Constitution] which prohibits a city from
incurring an indebtedness or liability in any year in excess of the income and revenue
provided for that year without the assent of two-thirds of the qualified electors of the
city.” (Id. at p. 485.)
       In Offner, the California Supreme Court framed the question for consideration as
“whether the city in entering into the proposed leases and contract will incur an
indebtedness or liability for the rentals for the entire term or whether such action will
create an indebtedness or liability in that year for such rentals only as will become
payable during that fiscal year.” (Offner, supra, 19 Cal.2d at p. 485.) The court observed
that the general rule from case law is “no violence is done to the constitutional provision”
“if the lease or other agreement is entered into in good faith and creates no immediate
indebtedness for the aggregate installments therein provided for but, on the contrary,
confines liability to each installment as it falls due and each year’s payment is for the
consideration actually furnished that year.” (Id. at p. 486.) On the other hand, if “the
instrument creates a full and complete liability upon its execution, or if its designation as
a ‘lease’ is a subterfuge and it is actually a conditional sales contract in which the
‘rentals’ are installment payments on the purchase price for the aggregate of which an
immediate and present indebtedness or liability exceeding the constitutional limitation
arises against the public entity, the contract is void.” (Ibid.) Our Supreme Court in
Offner concluded the city’s proposal did not violate the Constitution: “In view of the
admitted fact that the amount of rentals that the city may be required to pay in any single
fiscal year, together with its other debts and liabilities will not exceed its income and



                                              9
revenue for such year, it cannot be said that the proposed agreements violate the debt
limitation provision of the Constitution.” (Id. at p. 487.)
       Borrowing language from Offner, plaintiff argues that a lease-leaseback agreement
under section 17406 must be entered into in “good faith” and must not be a “subterfuge”
to avoid the competitive bid requirements of section 17417. Offner, however, is not
authority for plaintiff’s argument. The case addressed the constitutional prohibition
against a local government entity incurring indebtedness in excess of its income and
revenue for the year; the Offner court did not purport to impose additional requirements
on a “lease” whenever the term is used in a statute. To the extent Offner may be applied
in this case, it means only that defendants’ lease-leaseback agreement cannot be a
“subterfuge” to avoid the constitutional provision on indebtedness, but plaintiff in this
case makes no claim that the School District is in violation of the debt limit provision of
the state Constitution.
       We also note that the arguments plaintiff raises here have been considered by two
courts in previous cases challenging school districts’ use of lease-leaseback construction
agreements under section 17406. (See Davis, supra, 237 Cal.App.4th at pp. 284-287;
McGee, supra, 247 Cal.App.4th at pp. 243-244.) In both cases, attorney Carlin
represented the plaintiffs, and the appeals followed successful demurrers by the defendant
school districts and construction firms. (Davis, at pp. 269, 271; McGee, at pp. 238-239.)
       In McGee, supra, our colleagues in the Second District rejected the suggestion that
Offner imposed additional requirements for lease-leaseback agreements beyond the three
required elements set forth in section 17406. (McGee, supra, 247 Cal.App.4th at p. 244.)
The McGee court reasoned that the plaintiffs’ “efforts to engraft additional requirements
. . . are not based on the plain language of the statute.” (Ibid. [noting that, in contrast to
Offner, the plaintiffs’ claims did “not involve a contract that potentially violated the
constitutional provision on indebtedness”].)
       But the Court of Appeal in the Fifth District reached a different result in Davis,
supra, 237 Cal.App.4th 261. There, the court held, “[O]ur review of the entire legislative
scheme, the ostensible objects it seeks to achieve, the evils to be remedied, and the


                                               10
underlying public policies lead us to conclude the word ‘lease’ refers to the substance of
the transaction and means more than a document designated a lease by the parties.
Moreover, to fulfill the primary statutory purpose of providing financing for school
construction, the arrangement must include a financing component.” (Id. at p. 284.)
       The Davis court explained how it would determine whether a leaseback is a “true”
(or genuine) lease as follows: “We conclude the true legal effect of the leaseback in
question is based on all the terms of the document. [Citation.] Provisions in the
document that are significant include those that define (1) who holds what property rights
and when those rights and interests are transferred between the parties and (2) the amount
and timing of the payments. [Citation.] The payment provisions, particularly the length
of the period over which payments are made, are important in this context because the
primary purpose of the legislation was to provide a source of financing for school
construction and the payment provisions will show whether the project is being financed
through the contractor or whether the school district is paying for the project by using
funds from other source.” (Davis, supra, 237 Cal.App.4th at p. 285.) The court
concluded the challenged “Facilities Lease” in that case was “not a true lease that
provided financing for the project.” In reaching its conclusion, the Davis court relied on
its determination that “the substance of the payment terms in the Facilities Lease is that
of compensation for construction, not payment for a period of use of the facilities” and
the fact that “[the] Contractor did not provide any financing to [the school district] under
the Facilities Lease.” (Id. at p. 286.)
       We decline to follow Davis, which went far beyond the language of section 17406
in adopting ill-defined additional factors to determine whether the leaseback portion of a
lease-leaseback agreement is a “true” lease and imposing a requirement that the
contractor provide financing for the project. Instead, we agree with McGee, which
rejected Davis and declined to read additional requirements into section 17406. The
Davis court relied on what it determined to be the intended purpose of section 17406 to
impose requirements not expressed in the statute, but, as McGee observed, “our role is to
interpret the language of the statute, not to rewrite the statute.” (McGee, supra, 247


                                             11
Cal.App.4th at p. 244.) “We may not, under the guise of interpretation, insert qualifying
provisions not included in the statute.” (Estate of Griswold (2001) 25 Cal.4th 904, 917.)
       In its first cause of action, plaintiff alleged defendants’ lease-leaseback agreement
violated article 2 because it was not genuine and it failed to provide financing. Based on
the foregoing discussion, we conclude the trial court correctly sustained defendants’
demurrers as to this cause of action.
       3.     Third Cause of Action: Section 17406’s Exemption from Competitive
              Bidding Requirements Applies to the Lease and the Leaseback
       Section 17406 allows school districts to enter lease agreements,
“[n]otwithstanding Section 17417” and “without advertising for bids.” Plaintiff contends
the exemption from competitive bidding applies to a school district’s agreement to lease
its property to a contractor, but does not apply to the associated agreement contemplated
by section 17406 that the contractor lease the property with improvements back to the
school district. In other words, plaintiff argues, the exemption from section 17417’s
competitive bidding requirements applies to the lease, but not to the leaseback, of a lease-
leaseback agreement.
       “We give the words of the statute ‘a plain and commonsense meaning’ unless the
statute specifically defines the words to give them a special meaning. [Citations.] If the
statutory language is clear and unambiguous, our task is at an end, for there is no need for
judicial construction.” (MacIsaac, supra, 134 Cal.App.4th at p. 1083.) We are not the
first court to consider plaintiff’s interpretation of section 17406. Three appellate courts
have addressed and rejected it. (Los Alamitos, supra, 229 Cal.App.4th at pp. 1229-1230;
Davis, supra, 237 Cal.App.4th at pp. 280-282; McGee, supra, 247 Cal.App.4th at p. 246.)
We agree with our sister courts.
       “[T]he ordinary meaning of the word ‘notwithstanding’ is ‘in spite of.’ [Citation.]
It is well established that the phrase ‘notwithstanding any other provision of law’ is a
term of art that expresses a legislative intent to have the specific statute control despite
the existence of other law that might govern. [Citation.] Therefore, . . . the phrase
‘[n]otwithstanding Section 17417’ means the bidding procedures set forth in section


                                              12
17417 do not apply to agreements covered by section 17406(a)(1). The phrase ‘without
advertising for bids’ provides a further indication that competitive bidding is not required
for agreements falling within section 17406(a)(1).” (Davis, supra, 237 Cal.App.4th at pp.
281-282.)
       Section 17406 applies to a lease of real property by a school district “if the
instrument by which such property is let [also] requires the lessee therein to construct on
the demised premises, or provide for the construction thereon of, a building or buildings
for the use of the school district during the term thereof, and provides that title to that
building shall vest in the school district at the expiration of that term.” (§ 17406, subd.
(a).) Thus, section 17406 contemplates a single instrument that provides for both a lease
(of real property by the school district) and a leaseback (of constructed facilities to the
school district).12 As to such an instrument, section 17417’s competitive bidding
requirements do not apply. We agree with the Davis court’s reasoning on this question.
“The reference to an instrument that requires the lessee under a site lease ‘to construct on
the demised premises . . . a building or buildings for the use of the school district’ clearly
encompasses the construction services provided by a contractor to a school district under
a facilities lease. [Citation.] Therefore, a facilities lease that specifies the terms of
construction is eligible for the exception [from section 17417’s competitive bidding
requirements].” (Davis, supra, 237 Cal.App.4th at p. 282.)
       We believe the language of section 17406 is clear and unambiguous, and no
further analysis is needed. But we also observe that lease-leaseback agreements have
long been understood to be exempt from competitive bidding as demonstrated by, first,

       12
          As we have mentioned, the School District and Taber entered into two separate
contracts (the master site lease and the master facilities lease), which, together, we refer
to as a lease-leaseback agreement. These two contracts together also constitute a single
“instrument” for purposes of section 17406. (Plaintiff does not claim defendants’ lease-
leaseback agreement is invalid because it is composed of two contracts instead of a single
instrument.) The master site lease required the parties to enter into the master facilities
lease, which was incorporated by reference and referred to throughout the master site
lease. The master facilities lease provided that it would take effect only if executed by
the School District and Taber within three days of execution of the master site lease.


                                               13
an Attorney General’s opinion from 1973 and, second, legislative action in the 2003-2004
session.
       First, “[t]he Attorney General interpreted an earlier version of Education Code
section 17406 and concluded it exempted school district lease-leaseback arrangements
from the competitive bidding process.”13 (Los Alamitos, supra, 229 Cal.App.4th at p.
1227.) “In 1973, the Attorney General interpreted Education Code former section 15705
as follows: ‘There is no question but that the Legislature has plainly, unambiguously, and
explicitly imposed notice and bid requirements with respect only to construction
authorized by [Education Code former] section 15706 and not to that authorized by
section 15705. Considerations of wisdom, expediency, or policy suggest a contrary
conclusion but such factors may be effectuated only by amendment through the
legislative process rather than judicial construction. Such judicial restraint prevents
inadvertently invalidating such construction, without notice or bids, as may have
occurred pursuant to the provisions of section 15705. [¶] It is concluded that the
Legislature excluded an arrangement entered into under section 15705 from the notice
and bid requirements. Because a school district is not required to obtain bids for lease
arrangements under section 15705, it may lease its property for the purpose of permitting
the construction thereon of school buildings which the district will lease at such rental
rates as the governing board deems in the best interests of the district without reference to


       13
          “The predecessor of section 17406 provided: ‘The governing board of a school
district may let, at a minimum rental of one dollar ($1) a year, to any person, firm, or
corporation any real property which belongs to the district if the instrument by which
such property is let requires the lessee therein to construct on the demised premises, or
provide for the construction thereon of, a building or buildings for the use of the school
district during the term thereof, and provides that title to such building shall vest in the
school district at the expiration of such term. Such instrument may provide for the means
or methods by which such title shall vest in the school district prior to the expiration of
such term, and shall contain such other terms and conditions as the governing board may
deem to be in the best interest of the school district.’ (Ed. Code, former § 15705;
Stats.1959, ch. 2, § 1, pp. 595, 1086-1087.)” (Los Alamitos, supra, 229 Cal.App.4th at p.
1227.)


                                             14
competitive bidding.’ (56 Ops.Cal.Atty.Gen. 571, 581 (1973).)” (Id. at p. 1228, italics
added.)
       Second, the Legislature’s subsequent action on section 17406 bolsters the
Attorney General’s opinion. During the 2003-2004 session, the Legislature passed a bill
that would have amended section 17406 to add “the following provision: ‘ “(a) In order
to enable school districts to let real property for the purpose of acquiring, financing, or
constructing facilities, and notwithstanding Section 17417, the governing board of a
school district, through the competitive proposal process set forth in Article 2.2
(commencing with Section 17429.1), may let, for a minimum rental of one dollar ($1) a
year, to any person, firm, or corporation any real property that belongs to the district if
the instrument by which the property is let requires the lessee therein to construct on the
demised premises . . . .” (Legis. Counsel’s Dig., Assem. Bill No. 1486 (2003-2004 Reg.
Sess.).)’ ” (McGee, supra, 247 Cal.App.4th at pp. 244-245.) However, this bill was
vetoed by Governor Schwarzenegger.14 Los Alamitos and McGee agreed that this
“attempt to amend section 17406 to delete reference to the language ‘without advertising
for bids’ implies that section 17406 as it reads now does not require competitive
bidding.” (Los Alamitos, supra, 229 Cal.App.4th at p. 1229; McGee, supra, 247
Cal.App.4th at p. 245 [quoting Los Alamitos].)
       Plaintiff’s arguments for a contrary interpretation of section 17406 are not
persuasive. Plaintiff argues that section 17417’s competitive bidding requirements apply
whenever a construction project involves real property owned by the school district. But
section 17406 also involves real property owned by the school district since it requires a


       14
          The governor “explained: ‘ “I am supportive of using a competitive process for
public works projects and understand that this bill is needed to clarify that process.
However, this bill imposes restrictions on lease-leaseback contracts that could limit
competition, inadvertently limit schools[’] flexibility, and drive higher administrative
costs; thereby potentially increasing the overall cost of school facility construction.
[¶] For this reason, I cannot sign this measure.” (Governor’s veto message to Assem. on
Assem. Bill No. 1486 (2003-2004 Reg. Sess.) (Sept. 24, 2004).)” (McGee, supra, 247
Cal.App.4th at p. 245.)


                                              15
lease of the property to the contractor, and yet it expressly provides for agreements
“without advertising for bids,” “[n]otwithstanding Section 17417.” Plaintiff relies on the
maxim of statutory interpretation that the specific controls the general, claiming that
section 17406 is the more general statute and section 17417 is more specific on the
subject of competitive bidding. We disagree. “Nothing supports the application of this
principle to the statutes in this case. To the contrary, section 17406, subdivision (a)
begins with the language, ‘[n]otwithstanding Section 17417,’ which shows section 17406
provides an exception to the more general section 17417.” (Los Alamitos, supra, 229
Cal.App.4th at pp. 1229-1230 [rejecting argument that section 17417 is more specific and
section 17406 is more general].)
       Plaintiff asserts that interpreting section 17406 as exempting lease-leaseback
agreements from section 17417’s competitive bidding requirements would “lead[] to
mischief” because it would enable “the evils of fraud, favoritism and corruption that exist
with subjective contractor selection criteria rather than objective contractor selection
criteria.” But, as the Los Alamitos court noted in response to a similar policy argument
for imposing competitive bidding requirements on lease-leaseback agreements, “ ‘absent
a statutory requirement, a public entity is not bound to engage in competitive bidding.’ ”
(Los Alamitos, supra, 229 Cal.App.4th at p. 1229.)15 While there may be policy reasons
for requiring competitive bidding for all school construction projects, we have “ ‘no

       15
          Taber further counters that the law provides many exemptions from competitive
bidding. Among other statutes, Taber cites various sections of the Public Contract Code,
including sections 10187 et seq. (allowing certain state agencies to procure design-build
contracts using “best value procurement methodology” or lowest cost method), sections
22160 et seq. (same for certain local agencies), sections 6700 et seq. (providing “for an
alternative procurement procedure for certain transportation projects”), section 20111,
subdivision (c) (exempting from competitive bidding requirements “professional services
or advice, insurance services, or any other purchase or service otherwise exempt from
this section, or to any work done by day labor or by force account pursuant to Section
20114”), and section 20113 (allowing school districts to make emergency repairs or
improvements “without advertising for or inviting bids”). These exemptions show the
Legislature purposefully exempts government agencies from competitive bidding
requirements in various circumstances.


                                             16
power to rewrite the statute so as to make it conform to a presumed intention which is not
expressed.’ ” (California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist.
(1997) 14 Cal.4th 627, 633.)
       Next, plaintiff claims an interpretation of section 17406 that exempts lease-
leaseback agreements from competitive bidding requirements renders section 17417’s
competitive bidding requirements a nullity. We follow Los Alamitos, which rejected this
argument. “[The plaintiff] contends that if Education Code section 17406 applies to the
entire series of agreements that form a lease-leaseback arrangement between a school
district and a contractor, Education Code section 17417 would be rendered a nullity ‘as
there is no scenario under which Section 17417 would then apply.’ Section 17417
applies generally to ‘a lease or agreement pursuant to this article.’ Title 1, division 1,
part 10.5, chapter 4, article 2 of the Education Code applies even more generally to
leasing property. There would appear to be many ways in which section 17417 would be
used, even if lease-leaseback arrangements are excluded from it.” (Los Alamitos, supra,
229 Cal.App.4th at p. 1230.) As the School District responds, a lease-leaseback delivery
method under section 17406 “is just one of the contemplated lease arrangements” under
article 2, which governs “leases and agreements relating to real property and buildings to
be used by the school district” generally. (§ 17400, subd. (a).)
       Finally, plaintiff relies on a report of the executive officer of the State Allocation
Board (SAB) prepared for a board meeting on January 28, 2004 (2004 SAB report).16 In
the 2004 SAB report, the executive officer observed, “The use of Education Code (EC)
Section 17406 as a project delivery method for public school construction is growing.
Increasingly, districts are interpreting this code section to allow the award of a public
works project without competitive bid.” The report described the growing use of lease-


       16
           The State Allocation Board implements and administers California’s school
facilities construction program; its duties include “apportioning money from a state fund
and determining which schools are eligible to receive funding.” (Davis, supra, 237
Cal.App.4th at p. 291, fn. 16.) Plaintiff incorporated the 2004 SAB report by reference in
the FAC.


                                              17
leaseback agreements (without competitive bidding) and arguments in favor of, and
concerns about, the use of this delivery method.17
       The 2004 SAB report then provided the staff’s opinion of the school districts’ use
of lease-leaseback agreements without competitive bidding under section 17406. “It is
the opinion of staff and SAB counsel that [the] . . . interpretation [that section 17406
exempts lease-leaseback agreements from competitive bidding requirements] expands the
meaning of [section] 17406 beyond its simple intent and ignores other requirements in
the same article regarding competitive bid requirements for leases ([section] 17417).
There is no disagreement that [section] 17406 is clear in allowing districts to lease a
district-owned site to a person, firm or corporation when the lessee agrees to construct
buildings for the use of the school district. However, the exemption from public bidding
allowed in this section applies only to the property lease from the district to the
developer. It does not address how the contract for the construction of the buildings is
procured nor does it provide an exemption to competitive bidding for that contract.”
       “If the building to be constructed on the property let to the developer using
[section] 17406 is to be leased to the district, Staff believes the provisions of [section]
17417 . . . must be followed. [¶] . . . [¶] Nothing in [section] 17406 provides an
exemption from this requirement or, when applicable, from the [Public Contract Code]
requirements. Instead, [section] 17406 provides exactly what it states: a simple manner
to transfer district property without competitive bid to a developer who has been
previously selected by competitive bid to construct a building for the use of the district.”
       The 2004 SAB report concluded with suggested issues the SAB might wish to
consider including, among others, whether construction projects that were not subject to
public bidding “should continue to be presented for funding,” whether state policy

       17
          School districts cited guaranteed price, a “[t]eam approach,” and the ability to
select a known contractor “on the basis of their record of success, recommendations from
previous clients and financial strength” as reasons to use lease-leaseback agreements
rather than “the traditional design, bid, and build approach.” However, the 2004 SAB
report identified the concern that construction projects were “not being subjected to the
checks and balances of the competitive bid process.”


                                              18
makers should investigate school districts’ claims that they “need better tools to deliver
quality public facilities,” and “[w]hether legislation is necessary to clarify the appropriate
use of . . . Section 17406 and to clarify, if necessary, the relationship of that section to the
entire article on leases . . . .” Notably, the SAB did not accept this report, although
legislative board members did express interest in proposed legislation to address the
issues raised.
       We find the 2004 SAB report unpersuasive on the matter of statutory
interpretation. It did not address the language of section 17406 specifying that the
leasing “instrument” must also require the lessee to provide construction services.
(§ 17406, subd. (a); see Davis, supra, 237 Cal.App.4th at p. 282.) Instead, we view the
report as raising policy concerns, which the SAB staff recognized might be addressed
through legislation. In fact, the Legislature did attempt to amend section 17406 in the
2003–2004 session, but the proposed amendment was vetoed. (McGee, supra, 247
Cal.App.4th at p. 245.)18
       In sum, a lease-leaseback agreement under the 2014 version of section 17406 is
exempt from the competitive bidding requirements of section 17417. Therefore, the trial
court properly sustained defendants’ demurrers as to plaintiff’s third cause of action,




       18
          In 2016, the Legislature amended section 17406 to require a “best value”
method for selecting a contractor. (Stats. 2016, ch. 521, § 2.) The current version of
section 17406 provides, in part, that a lease-leaseback construction agreement “shall be
awarded based on a competitive solicitation process to the proposer providing the best
value to the school district, taking into consideration the proposer’s demonstrated
competence and professional qualifications necessary for the satisfactory performance of
the services required. Before awarding an instrument pursuant to this section, the
governing board of the school district shall adopt and publish required procedures and
guidelines for evaluating the qualifications of proposers that ensure the best value
selections by the school district are conducted in a fair and impartial manner.” (Current
§ 17406, subd. (a)(2).) Thus, under the current version of section 17406, a construction
project must be open to bidding, but the school district is not required to use the lowest
bidder. Section 17417, in contrast, requires the school district to select the lowest
responsible bidder.


                                              19
which was based on the claim that the School District was required to comply with
section 17417 before entering into a lease-leaseback agreement under to section 17406.
       4.     Fifth Cause of Action: Section 17406 Does Not Require a School District
              to Engage in “Genuine ‘Financing’”
       In its fifth cause of action, plaintiff claimed the School District was barred from
using a lease-leaseback agreement under section 17406 as a project delivery method
because the School District has sufficient funds available to cover the immediate costs of
construction of the project, and section 17406 requires “genuine ‘financing.’ ” Following
Davis and McGee, we reject this claim. (Davis, supra, 237 Cal.App.4th at p. 292;
McGee, supra, 247 Cal.App.4th at pp. 242, 246 [implicitly rejecting the plaintiffs’ claim
that section 17406 only applies when the school district does not have sufficient funds to
finance the cost of construction].)
       Plaintiff begins with the premise that article 2 is intended as a method for
financing school construction.19 From this premise, plaintiff takes the position that a
school district is prohibited from utilizing section 17406 if the district has sufficient funds
to pay for the construction (and therefore does not need financing). But plaintiff’s
position does not follow from its premise. Section 17406 does not expressly require that
a school district lack funds in order to enter a lease-leaseback agreement (Davis, supra,
237 Cal.App.4th at p. 292), and plaintiff offers no authority for a general rule that a
statutorily-provided financing option should be deemed unavailable merely because the
entity seeking to use the option has the funds to pay in cash.
       Plaintiff again cites the 2004 SAB report as support for its position. In the 2004
SAB report, the executive officer observed that a previous version of article 2 “is about
financing.” The report continued: “Staff believes that virtually none of the projects
currently using lease-leaseback arrangements actually have financing provided by the
developer. If a ‘lease agreement’ other than the site lease exists at all, it serves no

       19
         Plaintiff cites Morgan Hill Unified School Dist. v. Amoroso (1988) 204
Cal.App.3d 1083, 1086, in which the court observed, “The Education Code creates the
following method for financing school construction.”


                                              20
significant purpose other than as a construction contract. The full cost of the project is
borne by the district using normal funds it has available for capital projects. . . . [¶] Since
no financing exists in the lease lease-back arrangement (or there is no lease agreement at
all), the use of Article 2 appears to be inappropriate.”
       The 2004 SAB report does not support plaintiff’s position. As the Davis court
explained in rejecting an identical argument: “[T]he views expressed in the SAB Report
do not actually include the interpretation advocated by [the plaintiff]. Specifically, the
SAB report does not state that the legislation restricts the availability of the lease-
leaseback method to situations where other funding is not available. In other words, the
report’s reference to a case stating the ‘Education Code creates the following method for
financing school construction’ (Morgan Hill Unified School Dist. v. Amoroso, supra, 204
Cal.App.3d at p. 1086) does not imply that method is allowed only if other methods of
financing are not available.” (Davis, supra, 237 Cal.App.4th at p. 293.)
       Consequently, the trial court properly sustained defendants’ demurrers as to
plaintiff’s fifth cause of action.
C.     Second Cause of Action: Breach of Fiduciary Duty, Breach of Trust
       In the second cause of action against the School District only, plaintiff alleged the
members of the board of the School District breached the fiduciary duty imposed upon
them by their position, oath of office, and law. Plaintiff relied on the following seven
acts or omissions, alleged in paragraph 34 of the FAC: (1) failing to consider less
expensive proposals, (2) failing to consider whether the price for the work was
reasonable, (3) failing to exercise due diligence to determine whether the price paid could
be lower, (4) knowing the price paid could have been lower, (5) failing to solicit
alternative bids for the work, (6) failing to proceed in a manner that would secure the best
price, and (7) failing to proceed in a manner required by law. Plaintiff sought an order
that Taber return “all money paid” under the lease-leaseback agreement by the School
District.
       The plaintiff in Davis asserted a claim of breach of fiduciary duty based on
precisely the same allegations and seeking the same relief. (Davis, supra, 237


                                              21
Cal.App.4th at p. 293.) The plaintiffs in McGee similarly claimed breach of fiduciary
duty based on the failure to obtain competitive bids. (McGee, supra, 247 Cal.App.4th at
p. 242.) In both cases, the appellate courts concluded the allegations failed to state a
claim. (Davis, at p. 294; McGee, at p. 246.) The Davis court explained: “When a claim
for breach of fiduciary duty is asserted against a public official by the Attorney General
or a taxpayer, the damage element can be satisfied by alleging the official obtained
profits from the unauthorized act. [Citation.] In these cases, the relief available is
restitution, which can include the disgorgement of profits obtained by the public official.
[Citation.] [¶] . . . Here, the [the operative complaint] requests that Contractor return all
money paid to it under the Lease-leaseback Contracts, but does not allege Contractor was
subject to a fiduciary duty. As to the persons who allegedly breached their fiduciary duty
(i.e., Fresno Unified’s board), the [operative complaint] does not allege they profited
from the transactions and does not request restitution or the disgorgement of profits.
Furthermore, the relief sought for the alleged breach of fiduciary duty is against
Contractor, a party that did not have a fiduciary duty. Accordingly, the second cause of
action failed to allege facts sufficient to state a claim for breach of fiduciary duty.”
(Davis, at pp. 293-294.)
       Plaintiff’s second cause of action fails for the same reasons the claim failed in
Davis. On appeal before us, plaintiff does not dispute the Davis court’s analysis, now
acknowledging its original claim of breach of fiduciary duty was “was off the mark.”
Instead, plaintiff argues its allegations support a claim for breach of trust. This argument
also lacks merit.
       Plaintiff quotes Terry v. Bender (1956) 143 Cal.App.2d 198, 206-207, in which
the court wrote: “A public office is a public trust created in the interest and for the
benefit of the people. Public officers are obligated, virtute officii, to discharge their
responsibilities with integrity and fidelity. Since the officers of a governmental body are
trustees of the public weal, they may not exploit or prostitute their official position for
their private benefits. When public officials are influenced in the performance of their
public duties by base and improper considerations of personal advantage, they violate


                                              22
their oath of office and vitiate the trust reposed in them, and the public is injured by being
deprived of their loyal and honest services. It is therefore the general policy of this state
that public officers shall not have a personal interest in any contract made in their official
capacity. . . . A transaction in which the prohibited interest of a public officer appears is
held void both as repugnant to the public policy expressed in the statutes and because the
interest of the officer interferes with the unfettered discharge of his duty to the public.
The public officer’s interest need not be a direct one, since the purpose of the statutes is
also to remove all indirect influence of an interested officer as well as to discourage
deliberate dishonesty. Statutes prohibiting such ‘conflict of interest’ by a public officer
are strictly enforced.”
       Plaintiff asserts that nothing prevented the School District from soliciting sealed
bids for the project. That may be. But, “ ‘absent a statutory requirement, a public entity
is not bound to engage in competitive bidding.’ ” (Los Alamitos, supra, 229 Cal.App.4th
at p. 1229.)
       Plaintiff also relies on Proposition 39, enacted in November 2000, which amended
the state Constitution to allow the issuance of bonds for the construction of school
facilities if specified conditions are met and if approved by 55 percent of a school
district’s voters. (See San Lorenzo Valley Community Advocates for Responsible Educ.
v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356, 1396, fn. 9.)
Generally, a local government entity must obtain approval of two-thirds of the voters of
the entity in order to incur indebtedness in the form of general obligation bonds. (Ibid.;
Cal. Const., art. XVI, § 18, subd. (a).) Plaintiff argues, “Implicit in Proposition 39’s
reduction of the passage rate from 66% to 55% for school construction bonds is an
obligation on the part of [the School] District’s to maximize the amount of facilities that
can be obtained with those bond dollars. By [failing to consider less expensive proposals,
and the acts and omissions alleged in the FAC, paragraph 34)], [the School] District’s
decision to award [Taber] $14.7 million dollars worth of construction contracts was
arbitrary and capricious and in breach of their duty of care owed relative to the [School]
District’s expenditure of its limited . . . school construction bond proceeds.” Plaintiff


                                              23
offers no authority for its position that Proposition 39 imposed additional duties on
school districts, which are not expressly provided for in either the proposition or section
17406.
         Returning to plaintiff’s theory of breach of trust, “the general policy of this state
[is] that public officers shall not have a personal interest in any contract made in their
official capacity.” (Terry v. Bender, supra, 143 Cal.App.2d at p. 206.) But plaintiff does
not allege any member of the Board of the School District has a personal interest in the
lease-leaseback agreement in this case. As a result, plaintiff’s allegations do not state a
claim for breach of the public trust.
D.       Fourth Cause of Action: Conflict of Interest
         Plaintiff’s fourth cause of action for conflict of interest was asserted against Taber
only. Plaintiff alleged Taber was “employed” by the School District “to provide
professional preconstruction services” relating to the project at issue (HVAC
modernization) and other potential projects, and in providing these services, Taber
“performed the functions and filled the roles and positions of officers, employees and
agents of [the School] District who would ordinarily perform and provide . . .
professional, design, and financial functions and advise the [School] District relative to
same.” Plaintiff further alleged that in providing these services, Taber “was in a position
to advise and provide considerable influence upon [the School] District’s school board
and staff as to what actions they should take relative to the Project.” Plaintiff claimed
conflicts of interest arose “under the common law conflict of interest doctrine” and
Government Code section 1090 when Taber was subsequently awarded the lease-
leaseback agreement to construct the project at issue.
         The trial court sustained Taber’s demurrer as to the fourth cause of action,
explaining, “plaintiff cites no legal authority supporting the proposition that defendant
Taber’s alleged provision of ‘preconstruction services’ created an actionable conflict of




                                                24
interest.”20 We disagree, and conclude plaintiff may go forward on the claim of conflict
of interest.
       1.       Statutory and Common Law Conflict of Interest
       Government Code section 1090 provides in relevant part, “Members of the
Legislature, state, county, district, judicial district, and city officers or employees shall
not be financially interested in any contract made by them in their official capacity, or by
any body or board of which they are members.” (Gov. Code, § 1090, subd. (a).) The
statute “codifies the long-standing common law rule that barred public officials from
being personally financially interested in the contracts they formed in their official
capacities.” (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1072 (Lexin).) “The
common law rule and section 1090 recognize ‘[t]he truism that a person cannot serve two
masters simultaneously. . . .’ [Citations.] ‘The evil to be thwarted by section 1090 is
easily identified: If a public official is pulled in one direction by his financial interest and
in another direction by his official duties, his judgment cannot and should not be trusted,
even if he attempts impartiality.’ ” (Id. at p. 1073.)
       Government Code section 1092 provides a remedy for violation of Government
Code section 1090: “Every contract made in violation of any of the provisions of Section
1090 may be avoided at the instance of any party except the officer interested therein.
No such contract may be avoided because of the interest of an officer therein unless the
contract is made in the official capacity of the officer, or by a board or body of which he
or she is a member.” (Gov. Code, § 1092, subd. (a).)
       2.       Standing
       Defendants belatedly argue that plaintiff lacks standing to bring a claim of conflict
of interest. Although defendants did not make this argument in their demurrers, we
consider it because standing may be raised for the first time on appeal. (Horn v. County
of Ventura (1979) 24 Cal.3d 605, 619.) Defendants contend only a “party” to the contract
at issue has standing under the language of Government Code section 1092, and plaintiff

       20
            Davis and McGee had not been decided at the time of the trial court’s ruling.


                                               25
cannot rely on taxpayer standing because the School District has no mandatory duty to
bring a lawsuit to avoid the lease-leaseback agreement. Defendants rely solely on San
Bernardino County v. Superior Court (2015) 239 Cal.App.4th 679 (San Bernardino).
But, as we discuss, cases before and after San Bernardino have recognized that an action
under Government Code section 1090 may be brought by a taxpayer, and San Bernardino
is distinguishable.
       A taxpayer may bring suit against government bodies pursuant to Code of Civil
Procedure section 526a and based on common law. (Los Altos Property Owners Assn. v.
Hutcheon (1977) 69 Cal.App.3d 22, 26 (Hutcheon).) Section 526a permits “ ‘[a]n action
to obtain a judgment, restraining and preventing any illegal expenditure of, waste of, or
injury to, the estate, funds, or other property of a county, town, city or city and county of
the state, . . . against any officer thereof, or any agent, or other person, acting in its
behalf.’ ” A common law taxpayer suit is limited to the “grounds [of] fraud, collusion,
ultra vires, or a failure to perform a duty specifically enjoined.” (Hutcheon, at p. 26.)
“The primary purpose of [section 526a], originally enacted in 1909, is to ‘enable a large
body of the citizenry to challenge governmental action which would otherwise go
unchallenged in the courts because of the standing requirement.’ [Citation.] [¶]
California courts have consistently construed section 526a liberally to achieve this
remedial purpose.” (Blair v. Pitchess (1971) 5 Cal.3d 258, 267-268.)
       For example, in Gilbane Building Company v. Superior Court (2014) 223
Cal.App.4th 1527 (Gilbane), a taxpayer association brought an action under Government
Code section 1090, based on allegations that construction firms, including the defendant
Gilbane, provided gifts to officials of a high school district in exchange for construction
contracts worth several million dollars. (Id. at p. 1530.) In a demurrer, Gilbane argued
the taxpayer association lacked standing, but Division One of the Fourth District Court of
Appeal rejected this argument. The court explained: “Taxpayers may sue under section
1090 in order to have improper contracts declared void. [Citations.] These lawsuits may
be against the public agency as well as the private parties who entered into the improper
contract with the public agency.” (Id. at p. 1532.)


                                               26
       The Gilbane court acknowledged the long-standing rule that “ ‘[a] taxpayer may
not bring an action on behalf of a public agency unless the governing body has a duty to
act, and has refused to do so. If the governing body has discretion in the matter, the
taxpayer may not interfere.’ ” (Gilbane, supra, 223 Cal.App.4th at p. 1532.)21 But
“[w]here the public agency has expended funds illegally or for an unlawful purpose and
its management is in the hands of the persons accused of the wrongdoing, a taxpayer is
not required to make a demand on the public agency as it would be unavailing.” (Id. at p.
1533.) The court concluded that, if the taxpayer association’s allegations were true, the
high school district “expended funds illegally and the subject [construction] contracts are
void, not merely voidable. Whether the contracts are void is not a matter within the [the
high school] District’s discretion.” (Ibid.) Accordingly, the court held the taxpayer
association had standing to challenge the construction contracts between Gilbane and the
high school district under Government Code section 1090.
       The Davis court also recognized that a taxpayer has standing to bring a claim
under Government Code section 1090. In Davis, as here, the defendants did not argue in
the trial court that the plaintiff lacked standing, but the court observed in passing, “The
term ‘any party’ [in Government Code section 1092] is not restricted to parties to the
contract. Defendants did not base their demurrer on the ground [the plaintiff] Davis
lacked standing to bring the conflict of interest claim under Government Code section
1090 since it is recognized that either the public agency or a taxpayer may seek relief for

       21
          The court explained the rule: “ ‘ “The rule is that the municipality, through its
governing body, has control of the property and general supervision over the ordinary
business of the corporation; and there would be utter confusion in such matters if every
citizen and taxpayer had the general right to control the judgment of such body, or usurp
the office. Where the thing in question is within the discretion of such body to do or not
to do, the general rule is that then neither by mandamus, quo warranto, or other judicial
proceeding, can either the state or a private citizen question the action or nonaction of
such body; nor in such cases can a private citizen rightfully undertake to do that which he
thinks such body ought to do. It is only where performance of the thing requested is
enjoined as a duty upon said governing body that such performance can be compelled, or
that a private citizen can step into the place of such body and himself perform it.” ’ ”
(Gilbane, supra, 223 Cal.App.4th at pp. 1532-1533.)


                                             27
a violation of section 1090. (E.g., Thomson v. Call (1985) 38 Cal.3d 633, [taxpayer suit
successfully challenged validity of land transfer from city council member through
intermediaries to city]; see Kaufmann & Widiss, The California Conflict of Interest Laws
(1963) 36 So.Cal. L.Rev. 186, 200.)” (Davis, supra, 237 Cal.App.4th at p. 297, fn. 20.)22
       A month after Davis was decided, Division Two of the Fourth District Court of
Appeal decided San Bernardino, the case upon which defendants now rely. In San
Bernardino, a land owner and San Bernardino County (County) reached a settlement
agreement in an inverse condemnation matter in 2006. The County then brought a
validation action and obtained a judgment declaring the settlement agreement and the
bonds issued to satisfy the inverse condemnation judgment valid in 2007. Five years
later, taxpayer organizations sued the County and the landowner, seeking to void the
settlement agreement under Government Code section 1090 based on allegations that a
County supervisor received bribes from the landowner in exchange for his vote to
approve the settlement agreement. (The supervisor pleaded guilty to bribery-related
charges in 2011 and was no longer a County supervisor at the time the lawsuit was filed.)
(San Bernardino, supra, 239 Cal.App.4th at pp. 681-683.) The San Bernardino court
held that only a party to the challenged contract has standing to bring a claim for
violation of section 1090. (Id. at p. 684.)23

       22
         The Davis court cited Thomson v. Call, a California Supreme Court case from
1985, and there are examples of taxpayers bringing claims under Government Code
section 1090 as far back as 1946. (See Raymond v. Bartlett (1946) 77 Cal.App.2d 283,
284-285.)
       23
          While the Davis court observed the phrase “any party” in Government Code
section 1092 was “not restricted to parties to the contract” (Davis, supra, 237
Cal.App.4th at p. 297, fn. 20), the San Bernardino court reached the opposite conclusion.
The court reasoned, “Nothing in the plain language of either section 1090 or section 1092
grants nonparties to the contract, such as plaintiffs, the right to sue on behalf of a public
entity that may bring a claim as provided in section 1092, but has not done so. Indeed,
the Legislature's choice of the word ‘party’ in section 1092—as opposed to, say,
‘person’—suggests the Legislature intended only parties to the contract at issue normally
to have the right to sue to avoid contracts made in violation of section 1090.” (San
Bernardino, supra, 239 Cal.App.4th at p. 684.)


                                                28
       The San Bernardino court further held that neither Code of Civil Procedure
section 526a nor common law conferred standing to taxpayers to bring claims under
Government Code section 1090. (San Bernardino, supra, 239 Cal.App.4th at pp. 685-
688.) The court explained its reasoning: “[U]nder either Code of Civil Procedure section
526a or the common law, ‘[t]axpayer suits are authorized only if the government body
has a duty to act and has refused to do so. If it has discretion and chooses not to act, the
courts may not interfere with that decision.’ [Citation.] ‘It is the general rule that a
taxpayer cannot maintain an action in behalf of [a government entity] to enforce a claim
or demand inuring to the [government entity].’ [Citation.] ‘It has long been held that a
government entity's decision whether to pursue a legal claim involves the sort of
discretion that falls outside the parameters of waste under section 526a and cannot be
enjoined by mandate.’ [Citation.] And because deciding whether to pursue a legal claim
is generally an exercise of discretion, rather than ‘a duty specifically enjoined,’ the
common law too does not normally provide the taxpayer a cause of action to pursue a
legal claim on behalf of the government entity.” (Id. at pp. 686-687.)24
       The plaintiffs in San Bernardino “argue[d] that ‘compliance with [Government
Code] Section 1090 is a nondiscretionary duty specifically enjoining [the County] from
making the $102 million settlement agreement in exchange for bribes. . . .’ ” (San
Bernardino, supra, 239 Cal.App.4th at p. 687.) The court was not persuaded: “This
argument would be more to the point if plaintiffs were seeking to enjoin the County from
entering into such a settlement agreement. But that ship has long since sailed. The issue
now is the County’s decision (or lack thereof) with respect to bringing suit on the basis of
the alleged violation of section 1090, and whether this decision is an exercise of
discretion or a mandatory duty that County—so far, at least—has failed to perform. For

       24
          In the passage quoted, the San Bernardino court cited three cases: Daily
Journal Corp. v. County of Los Angeles (2009) 172 Cal.App.4th 1550, Elliott v. Superior
Court (1960) 180 Cal.App.2d 894, 897, and Silver v. City of Los Angeles (1961) 57
Cal.2d 39. (San Bernardino, supra, 239 Cal.App.4th at pp. 686–687.) However, none of
these three cases involved a taxpayer attempting to bring a conflict of interest claim under
Government Code section 1090.


                                              29
the reasons stated above, it is an exercise of discretion.” (Ibid.) The court noted that the
taxpayer associations made no allegations “that any present County official was involved
in the alleged bribery scheme leading to [the former County supervisor]’s guilty plea, or
is otherwise engaged in fraud or collusion.” (Id. at p. 688.)
       McGee was decided after San Bernardino, and the Second District declined to
follow it. Instead, the McGee court, citing Davis, held the plaintiffs had standing to
challenge lease-leaseback construction contracts under Government Code section 1090.
(McGee, supra, 247 Cal.App.4th at pp. 247-248.) The court explained: “Davis is closer
to this case than San Bernardino. As in Davis, this case involved a validation action in
which the court had authority to set aside void contracts. A contract in violation of
section 1090 is void. [Citation.] In contrast, in San Bernardino, [the] plaintiffs’
challenge to the agreement was barred by a prior validation judgment. [Citation.]
Additionally, in contrast to San Bernardino, this case did not involve a decision by
former school board members, but was brought shortly after the District approved the
contracts. [Citation.] Further, in contrast to the San Bernardino court, we find Thomson
v. Call, supra, 38 Cal.3d 633, apposite as our high court could not have concluded a
contract was invalid in violation of section 1090 without implicitly concluding that the
taxpayers challenging it had standing to challenge it.” (McGee, at p. 248.)
       We conclude that Davis and McGee are more like this case than San Bernardino,
and the weight of authority supports permitting a taxpayer to bring a claim under
Government Code section 1090 under the circumstances here. If the lease-leaseback
agreement in this case violates section 1090, then it is void, not merely voidable.
Whether the lease-leaseback agreement is void is not a matter within the School District’s
discretion. (Gilbane, supra, 223 Cal.App.4th at p. 1533.) And, even assuming San
Bernardino was correctly decided under its facts, the case is distinguishable (as it was in
McGee). First, in San Bernardino, a prior, validation action had concluded long before
the plaintiffs sued; here, plaintiff’s action is itself a reverse validation action. Second, in
San Bernardino, the person with the alleged conflict of interest was no longer a County
supervisor at the time the taxpayer lawsuit was filed, and there were no allegations


                                              30
“showing that any present County official was involved in the alleged” conflict of
interest. (San Bernardino, supra, 239 Cal.App.4th at p. 688.) But in the present case, the
party with an alleged conflict of interest, Taber, is still allegedly involved in the
challenged transaction.
       In short, we hold plaintiff has standing to bring a claim of conflict of interest.25
       3.     Analysis
       We also follow Davis and McGee on the analysis of whether allegations such as
plaintiff’s state a claim of conflict of interest. As we have described, Government Code
section 1090’s proscription applies to “[m]embers of the Legislature, state, county,
district, judicial district, and city officers or employees.” (Gov. Code, § 1090, subd.
(a).)26 Such individuals are barred from being “financially interested in any contract
made by them in their official capacity, or by any body or board of which they are
members.” (Ibid.) Yet, despite the reference to “ ‘officers or employees’ ” and “ ‘any
contract made by them,’ ” it has been held in the civil context that Government Code
section 1090 may apply to a corporate independent contractor to a government body if
the contractor serves a public function and advises the government body on the making of




       25
          Taber further argues on appeal that plaintiff lacks standing to bring any of its
claims, citing San Bernardino, supra, 239 Cal.App.4th 679. Given our conclusion that
plaintiff has standing to bring a claim of conflict of interest, this argument obviously
fails. We note the contractor-defendant in McGee also argued that San Bernardino stood
for the proposition that the plaintiffs lacked standing even to bring their claims under the
Education Code, but McGee rejected the argument because San Bernardino “consider[ed]
only a cause of action for conflict of interest.” (McGee, supra, 247 Cal.App.4th at p.
248, fn. 4.) Moreover, Taber acknowledges that “any taxpayer who feels the public
entity has entered a contract contrary to the law, may bring a timely action under Code of
Civil Procedure section 863 [reverse validation] . . . or a timely action under Code of
Civil Procedure section 526a [taxpayer suit].” Here, plaintiff alleged that the action was
being brought under Code of Civil Procedure section 863 and Code of Civil Procedure
section 526a.
       26
          Similarly, the common law rule on conflicts of interest applies to “public
officials.” (Lexin, supra, 47 Cal.4th at p. 1072.)


                                              31
the contract. (McGee, supra, 247 Cal.App.4th at p. 249; HUB City Solid Waste Services,
Inc. v. City of Compton (2010) 186 Cal.App.4th 1114, 1124-1125 (HUB City.)
       First, it has long been recognized that “[a] person merely in an advisory position to
a city is affected by the conflicts of interest rule.” (Schaefer v. Berinstein (1956) 140
Cal.App.2d 278, 291.) Second, “ ‘[t]he fact that someone is designated an independent
contractor is not determinative; the statute applies to independent contractors who
perform a public function.’ ” (California Housing Finance Agency v.
Hanover/California Management and Accounting Center, Inc. (2007) 148 Cal.App.4th
682, 690 [approving quoted statement as a jury instruction] (Hanover).) In HUB City, the
court explained the determination of whether an individual is considered an officer or
employee for purpose of the statute “turns on the extent to which the person influences an
agency’s contracting decisions or otherwise acts in a capacity that demands the public
trust.” (HUB City, supra, 186 Cal.App.4th at p. 1125.) In HUB City, the defendant
Aloyan advised the city of Compton’s assistant city manager on establishing an in-house
waste management division. Compton then entered into a management agreement with
Aloyan’s shell company, under which Aloyan’s company was designated “an
independent contractor but assumed many of the city’s waste management needs” by
“ ‘providing the private management’ of the city’s in-house waste operation.” (Id. at p.
1119.) At trial, evidence showed “Aloyan had discretion over which vendors to solicit,
and influenced the city’s staffing decisions. He assisted Compton with the acquisition of
insurance, and discussed the possibility of outsourcing waste hauling operations to a
private contractor. Under the agreement Aloyan acted as the director of the in-house
waste division, working alongside city employees, overseeing day-to-day operations of
Compton’s waste management division, and taking responsibility for public education
and compliance with state mandated recycling and waste reduction efforts.” (Id. at p.
1120.) Rejecting Aloyan’s argument that he was not a public official or employee under
Government Code section 1090, the Court of Appeal held, “A person in an advisory
position to a city may fall within the scope of section 1090. In particular, independent
contractors whose official capacities carry the potential to exert considerable influence


                                             32
over the contracting decisions of a public agency may not have personal interests in that
agency’s contracts.” (Id. at pp. 1124-1125.)
        Third, in Davis (reviewing the sufficiency of allegations following a successful
demurrer), the Court of Appeal held that Government Code section 1090 could apply to
corporate consultants. Considering a claim of conflict of interest based on a
preconstruction services agreement, the Davis court reasoned: “[A]s to whether the word
‘employees’ should be interpreted to exclude corporate consultants, we conclude that
corporate consultants should not be categorically excluded from the reach of Government
Code section 1090. Such a statutory interpretation would allow the use of the corporate
veil to insulate conflicts of interest that otherwise would violate the prohibition against
local government officers and employees from making contracts in which they are
financially interested. A corporate consultant is as capable of influencing an official
decision as an individual consultant. Because the statute’s object is to limit the
possibility of any influence, direct or indirect, that might bear on an official’s decision
[citation], we conclude the allegations that Contractor served as a professional consultant
to Fresno Unified and had a hand in designing and developing the plans and
specifications for the project are sufficient to state that Contractor (1) was an ‘employee’
for purposes of Government Code section 1090 and (2) participated in making the Lease–
leaseback Contracts.” (David, supra, 237 Cal.App.4th at pp. 300-301.)
        Likewise, McGee concluded the plaintiffs stated a claim of conflict of interest
sufficient to withstand demurrer based on similar allegations. The court explained:
“[The] plaintiffs allege that [contractor-defendant] Balfour ‘filled the roles and positions
of officers, employees and agents of [the District.].’ At this early stage in the
proceedings, the allegation must be credited. [Citation.] As in HUB City, ‘[a] person in
an advisory position to a city may fall within the scope of section 1090.’ (HUB City,
supra, 186 Cal.App.4th at p. 1124.) The trial court therefore should have overruled the
demurrer to McGee’s fourth cause of action.” (McGee, supra, 247 Cal.App.4th at p.
249.)



                                              33
       Here, plaintiff alleged Taber “performed the functions and filled the roles and
position of officer, employees and agents of [the School] District who would ordinarily
perform and provide” and, further, Taber “was in a position to advise and provide
considerable influence upon [the School] District’s school board and staff as to what
actions they should take relative to the Project.” Under Davis, McGee, HUB City, and
Hanover, these allegations are sufficient to state a claim of conflict of interest.
       Disagreeing with Davis and McGee, defendants and amici curiae rely on People v.
Christiansen (2013) 216 Cal.App.4th 1181 (Christiansen), which refused to extend
Government Code section 1090 to independent contractors in the criminal context. (The
trial court also relied on Christiansen. Because “employees” is not defined in the statute,
the Christiansen court applied the common law test of employment. “Under the common
law test, independent contractors are not employees.” (Id. at p. 1189.) The court
declined to extend Hanover and HUB City to a criminal prosecution. “We express no
opinion on the soundness of those opinions in the civil context, but we hold that their
expansion of the statutory term ‘employees’ to apply to independent contractors does not
apply to criminal prosecutions for violation of section 1090. At least for purposes of
criminal liability under section 1090, an independent contractor is not an employee.”
(Ibid.) Declining to follow Hanover, the Christiansen court explained: “First, it fails to
follow the Supreme Court’s guidance concerning interpretation of the undefined statutory
term ‘employees.’ [Citation.] Second, it is a civil case, and the matter before us is a
criminal case. Third, none of the cases cited in [Hanover] provides any support for the
proposition that an independent contractor can be an employee within the meaning of
section 1090.” (Ibid.) The court declined to follow HUB City, which adopted Hanover’s
broad interpretation of “employees,” for the same reasons. (Id. at p. 1190.)27

       27
          The issue whether an individual who performs work for a public entity and
qualifies as an independent contractor for purposes of tort liability at common law may
be subject to criminal liability under Government Code section 1090 is currently pending
before the California Supreme Court in People v. Superior Court (Sahlolbei), review
granted April 13, 2016, S232639. The court heard oral argument in Sahlolbei on April 4,
2017.


                                              34
       Davis harmonized Christiansen, Hanover, and HUB City, concluding that
Christiansen’s narrow definition of the term “employees” “is appropriate in the context
of criminal prosecution, but is not appropriate in the context of civil actions seeking to
invalidate a contract with a public entity.” (Davis, supra, 237 Cal.App.4th at p. 300.) “In
Stigall [v. City of Taft (1962) 58 Cal.2d 565], a civil action, the Supreme Court
interpreted the statutory terms broadly to implement the objectives of the conflict of
interest statute and did not rely on technical definitions or rules to limit the reach of the
statute. Similarly, we conclude that technical definitions of the term ‘employee’ taken
from other areas of law should not be used to limit the scope of Government Code section
1090. Therefore, we join the courts in Hanover and Hub City in concluding that, in civil
actions, the term ‘employees’ in Government Code section 1090 encompasses
consultants hired by the local government.” (Ibid.) McGee followed Davis and HUB
City, while recognizing Christiansen reached a different result in the criminal context.
(McGee, supra, 247 Cal.App.4th at p. 249 and fn. 5.) We also conclude that, in the civil
context, an independent contractor who serves a public function may be subject to
Government Code section 1090.
       Defendants and amici curiae also cite Public Contract Code section 10365.5,
enacted in 1990. This statute applies to contracts made by state agencies, not local
government entities. (Pub. Contract Code, § 10335.) It provides in part: “No person,
firm, or subsidiary thereof who has been awarded a consulting services contract may
submit a bid for, nor be awarded a contract for, the provision of services, procurement of
goods or supplies, or any other related action which is required, suggested, or otherwise
deemed appropriate in the end product of the consulting services contract.” (Pub.
Contract Code, § 10365.5, subd. (a).) Taber argues this statute demonstrates that
Government Code section 1090 does not apply to consultants who later contract to
perform related work because, if it did, the Legislature would not have needed to enact
Public Contract Code section 10365.5 in 1990. Amicus curiae California Association of
School Business Officials (CASBO) points to the “ ‘settled rule of statutory construction
that where a statute, with reference to one subject contains a given provision, the


                                              35
omission of such provision from a similar statute concerning a related subject is
significant to show that a different legislative intent existed with reference to the different
statutes.’ ” (In re Jennings (2004) 34 Cal.4th 254, 273.) CASBO argues that the fact
Legislature enacted Pubic Contract Code section 10365.5 but did not amend Government
Code section 1090 shows that the term “employees” in Government Code section 1090
should not be expanded to include independent contractors who provide consulting
services.
       The Court of Appeal in McGee responded to the identical argument as follows:
“If anything, Public Contract Code section 10365.5 suggests that the Legislature
recognized the potential conflict inherent in the same entity serving as a consultant that
plans a construction project and the contractor who carries out the project. The fact that
Public Contract Code section 10365.5 applies specifically to consultants does not show
that Government Code section 1090 cannot also apply to consultants as the two statutes
are not mutually exclusive. In a proper case, arguably both could apply, but here the
District is not governed by Public Contract Code section 10365.5.” (McGee, supra, 247
Cal.App.4th at p. 250.)
       The fact that the Legislature passed Public Contract Code section 10365.5, which
applies only to contracts with state agencies, but failed to provide a similar law for
contracts with local government entities suggests that there is no blanket prohibition
against consultants contracting with local government entities for work related to their
consulting services (as there clearly is in the context of state contracting under Public
Contract Code section 10365.5). But we fail to see how Public Contract Code section
10365.5 could mean that an independent contractor working for a local government entity
could never be deemed an employee for purposes of Government Code section 1090. In
other words, the existence of Public Contract Code section 10365.5 does not suggest to us
that Hanover, HUB City, Davis, and McGee were wrongly decided.
       Finally, on the request of Taber, we have taken judicial notice of the legislative
history of Assembly Bill No. 1059 (2013-2014), which died in the Assembly. This bill
proposed amending Government Code section 1090 to apply to “independent contractors


                                              36
who perform a public function.” It further proposed adding a new statute providing that
an independent contractor employed by government agency “has a financial interest in a
subsequent contract” with that agency if he or she “participates in the making of the
subsequent contract.” The existence of this bill does not change our analysis. As the
McGee observed, “The legislative history provided to us does not suggest the Legislature
intended to modify the statute to overrule the analysis in Hub City, which was decided
prior to the proposed amendment.” (McGee, supra, 247 Cal.App.4th at p. 250, fn. 6.)
       In sum, plaintiff’s allegations are sufficient to state a claim of conflict of interest.
Therefore, we reverse the trial court’s ruling as to plaintiff’s fourth cause of action.
E.     Remaining Issues
       1.     Sixth and Seventh Causes of Action
       Plaintiff does not challenge the trial court’s ruling with respect to the sixth cause
of action (improper delegation of discretion). Plaintiff’s seventh cause of action was for
declaratory relief. This claim is dependent upon the preceding causes of action in the
FAC, all incorporated by reference, and does not allege an independent basis for relief.
The trial court determined that the seventh cause of action was “superfluous, because the
validity of the subject leases is an issue that is already ‘fully engaged’ by plaintiff’s other
causes of actions,” citing Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324, and
General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 470-471. The court
denied declaratory relief, citing its statutory discretion under Code of Civil Procedure
section 1061. We find no reversible error in this ruling.
       2.     Requests for Judicial Notice
       As mentioned in footnote 1, we granted requests for judicial notice filed by
plaintiff and Taber. Three additional requests for judicial notice were taken under
submission. We deny the pending requests. In a motion filed November 30, 2015,
plaintiff requests we take judicial notice of the first amended complaint filed in San
Bernardino, supra, 239 Cal.App.4th 679, cited by defendants. This document is not
necessary to resolve the standing issue raised by San Bernardino. (See Jordache
Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6


                                              37
[denying request for judicial notice where items were not necessary, helpful, or
relevant].) In a motion filed December 14, 2015, amicus curiae Association of California
Construction Managers requests we take judicial notice of Assembly Bill No. 1486
(2003-2004), Assembly Bill No. 1097 (2005-2006), and a report prepared by the San
Diego Taxpayers Educational Foundation. We have already taken judicial notice of
Assembly Bill No. 1486, and the Governor’s veto message is described in McGee, supra,
247 Cal.App.4th at page 245. The remaining documents are unnecessary to decide this
appeal. Finally, in a motion filed on February 4, 2016, in response to the amicus curiae
briefs, plaintiff asks us to take judicial notice of 10 documents. These materials are not
necessary, helpful, or relevant to the issues presented in this appeal.
                                      DISPOSITION
       The judgment of dismissal is reversed. The trial court is directed to enter a new
order sustaining defendants’ demurrers without leave to amend as to all causes of action
except the fourth cause of action for conflict of interest. The parties shall bear their own
costs on appeal.



                                                  _________________________
                                                  Miller, J.


We concur:


_________________________
Kline, P.J.


_________________________
Richman, J.




                                             38
Filed 5/31/17
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIRST APPELLATE DISTRICT

                                     DIVISION TWO


CALIFORNIA TAXPAYERS ACTION
NETWORK,
        Plaintiff and Appellant,                 A145078

v.                                               (Contra Costa County
TABER CONSTRUCTION, INC., et al.,                Super. Ct. No. MSC1400996)
                                                 ORDER CERTIFYING OPINION
        Defendants and Respondents.              FOR PUBLICATION




BY THE COURT:
        The opinion in the above-entitled matter filed on May 2, 2017, was not certified
for publication in the Official Reports. For good cause and pursuant to California Rules
of Court, rule 8.1105, it now appears that the opinion should be published in the Official
Reports, and it is so ordered.




Dated: _______________________                   ________________________________
                                                 Kline, P.J.




                                             1
Trial Court: Superior Court of Contra Costa County

Trial Judge: Hon. George V. Spanos


Attorney for Appellants                         Kevin R. Carlin
                                                Carlin Law Group, A.P.C.

Attorneys for Respondent                        Jason R. Thornton
Taber Construction                              Louis J. Blum
                                                Finch, Thornton & Baird, LLP

Attorneys for Respondent                        Glenn N. Gould
Mt. Diablo Unified School Dist.                 Deepika S. Saluja
                                                Dannis Woliver Kelley

Attorneys for Amicus Curiae                     Harold M. Freiman
California Association of School Business       Devon B. Lincoln
Officials in support of Respondents             Travis E. Cochran
                                                Lozano Smith

Attorneys for Amicus Curiae                     Paul G. Thompson
California School Boards Association’s          James Traber
Education Legal Alliance in support of          Fagen Friedman & Fulfrost, LLP
Respondent Mt. Diablo Unified School Dist.

                                                Keith Bray
                                                Joshua R. Daniels
                                                California School Boards Association/
                                                Education Legal Alliance

Attorneys for Amicus Curiae                     Martin A. Hom
Coalition for Adequate School Housing           Jennifer D. Cantrell
In support of Respondent                        Atkinson, Andelson, Loya, Ruud &
Mt. Diablo Unified School Dist.                   Romo



A145078, California Taxpayers Action Network v. Taber Construction, Inc., et al.



                                            2
Attorney for Amicus Curiae                   Martin A. Hom
Association of California Construction       Atkinson, Andelson, Loya, Ruud &
Managers in support of Respondent             Romo
Mt. Diablo Unified School Dist.

Attorney for Amicus Curiae                   Lawrence H. Kay
Construction Employers Association           Law Office of Lawrence H. Kay
in support of Respondent
Taber Construction, Inc.




                                         3
