Filed 3/22/16
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
MERKOH ASSOCIATES, LLC, B265178
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC555533)
v.
LOS ANGELES UNIFIED SCHOOL
DISTRICT,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County, William
Highberger, Judge. Affirmed.
Steve A. Hoffman for Plaintiff and Appellant.
David Holmquist, Gregory L. McNair, Carl J. Piper and Sung Yon Lee for
Defendant and Respondent.
******
The only issue on appeal is whether Civil Code section 3287 (section 3287), which
provides for interest when damages are awarded, applies specifically to interest on a
refund for a development fee paid to the Los Angeles Unified School District. We
conclude that section 3287 does not apply because Government Code section 66020,
subdivision (e) more specifically sets forth the interest available on the development fee
refund.
The substance of Government Code section 66020 (section 66020) was enacted in
1984 as part of the Mitigation Fee Act. (Sterling Park, L.P. v. City of Palo Alto (2013)
57 Cal.4th 1193, 1200 (Sterling Park), citing former Gov. Code, § 66499.37.) “„Prior to
the enactment of this statute, a developer could not challenge the validity of fees imposed
on a residential development without refusing to pay them. [Citation.] Since payment is
a condition of obtaining the building permit, a challenge meant that the developer would
be forced to abandon the project. The bill was drafted to correct this situation. It
provided a procedure whereby a developer could pay the fees under protest, obtain the
building permit, and proceed with the project while pursuing an action to challenge the
fees. If the action were successful, the fees would be refunded with interest.‟” (Ibid.)
Section 66020, subdivision (a) allows any party to protest the imposition of
development fees if it followed the procedures set forth in the statute. Section 66020,
subdivision (d)(2) provides in pertinent part: “Any party who files a protest pursuant to
subdivision (a) may file an action to attack, review, set aside, void, or annul the
imposition of the fees, dedications, reservations, or other exactions imposed on a
development project by a local agency within 180 days after the delivery of the notice.
Thereafter, notwithstanding any other law to the contrary, all persons are barred from any
action or proceeding or any defense of invalidity or unreasonableness of the imposition.”
A successful plaintiff is entitled to a refund of “the unlawful portion of the payment, with
interest at the rate of 8 percent per annum.” (§ 66020, subd. (e).)
Merkoh Associates, LLC (appellant) sought interest under Civil Code section
3287 (rather than under Gov. Code, § 66020) from the time of its application to Los
Angeles Unified School District for a refund to the time of the refund. The trial court
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correctly concluded that Civil Code section 3287 did not apply and properly sustained the
school district‟s demurrer and dismissed the lawsuit. We affirm.
FACTS AND PROCEDURE
The relevant facts are undisputed. The City of Los Angeles collects a school
district development fee when it issues a building permit. The Los Angeles Unified
School District Demolition Credit Guidelines provides: “School District developer fees
are charged only for the net increase in square footage. If a structure, is demolished,
developers may be eligible for demolition credit in the form of a refund.” To obtain a
refund following demolition, a developer must apply with the Los Angeles Unified
School District within 90 days after the payment of the development fees.
Appellant paid $25,052 in school district development fees to obtain a permit for
residential construction at a single family residence on North Fuller Avenue. On July 30,
2013, appellant filed a “request for refund of fees for demolition credit.” (Capitalization
omitted.) Appellant provided verification of the demolition of the preexisting single
family residence. On March 26, 2014, appellant wrote respondent indicating that eight
months had elapsed since its refund request and again requested the school district
promptly issue the refund. On April 16, 2014, the school district issued a refund in the
amount of $8,852. The refund did not include interest.
On August 21, 2014, appellant filed a complaint on its behalf and on behalf of
persons similarly situated alleging causes of action for money had and received and
declaratory relief. Appellant sought class action status. Appellant alleged that the Los
Angeles Unified School District (sometimes referred to as the school district) wrongfully
withheld the refund for over eight months and refused to pay interest. Appellant alleged
that interest in the amount of $632.98 was due under section 3287. Section 3287,
subdivision (a) provides: “(a) A person who is entitled to recover damages certain, or
capable of being made certain by calculation, and the right to recover which is vested in
the person upon a particular day, is entitled also to recover interest thereon from that day,
except when the debtor is prevented by law, or by the act of the creditor from paying the
debt. This section is applicable to recovery of damages and interest from any debtor,
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including the state or any county, city, city and county, municipal corporation, public
district, public agency, or any political subdivision of the state.”
The school district demurred to the complaint.
The court concluded that “Civil Code section 3287 cannot be the basis for interest
on the refund of developer fees. Plaintiffs‟ claim for interest is time-barred pursuant to
Government Code § 66020.” (Italics omitted.) The court sustained the demurrer without
leave to amend. Judgment was entered against appellant. This appeal followed.
DISCUSSION
A school district is entitled to levy fees on new residential construction.
(California Ranch Homes Development Co. v. San Jacinto Unified School Dist. (1993) 17
Cal.App.4th 573, 576 (California Ranch Homes Development); Ed. Code, § 17620, subd.
(a).) Section 66020 applies to partial refunds of fees paid, such as the refund sought by
appellant. (California Ranch Homes Development, supra, at p. 579.) Section 66020
“provides the exclusive method for challenging a school impact fee.” (California Ranch
Homes Development, supra, at p. 577, italics added.)
Section 66020, subdivision (e) “concerns remedies for a prevailing plaintiff.”
(Sterling Park, supra, 57 Cal.4th at p. 1208.) It provides: “If the court finds in favor of
the plaintiff in any action or proceeding brought pursuant to subdivision (d), the court
shall direct the local agency to refund the unlawful portion of the payment, with interest
at the rate of 8 percent per annum, or return the unlawful portion of the exaction
imposed.” (§ 66020, subd. (e), italics added.) Because this special statute expressly
provides for interest in this context it “„“controls and takes priority over a general
statute.”‟” (Sterling Park, supra, at p. 1200.)
None of the authority appellant cites requires a different result. For example,
Macy’s Dept. Stores, Inc. v. City and County of San Francisco (2006) 143 Cal.App.4th
1444, 1459, distinguished the interest available generally under Civil Code section 3287
for a tax refund from interest available under Revenue and Taxation Code section 5151
for the specific refund on property purchased by a public entity. It does not hold that
Civil Code section 3287 applies where a more specific statute is present. Other cases
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holding that absent a specific statute the general statue under section 3287 applies
similarly do not assist appellant. (See, e.g., Collins v. City of Los Angeles (2012) 205
Cal.App.4th 140 (Collins).) In Aguilar v. Unemployment Ins. Appeals Bd. (1990) 223
Cal.App.3d 239, the court held that although the Legislature did not specifically mention
interest, a successful plaintiff may be able to recover it under Civil Code section 3287.
(Aguilar, supra, at p. 242.) In contrast here, in the context of the development fee levied
against appellant, the Legislature specifically set forth an interest provision and the
method for obtaining it.
Finally, appellant‟s argument that its challenge was not “an action to attack,
review, set aside, void, or annul the imposition of the fees” lacks merit because appellant
was required to attack the imposition of fees to obtain a refund, and the refund was the
only basis for interest. (Boldface and underscoring omitted.) Appellant‟s statement that
they were “not challenging” the imposed fees means that they were not entitled to the
refund received solely as a result of their challenge. Absent the partial refund, interest
would be unavailable under any statute. (See, e.g., Collins, supra, 205 Cal.App.4th at pp.
150-151 [prejudgment interest under § 3287 is based on calculable damages]; § 3287,
subd. (a) [interest flows from damages certain or capable of being made certain].)
It is now too late to follow the procedures to obtain interest, and the trial court
therefore properly sustained the demurrer without leave to amend. Appellant was
required to follow the procedure in section 66020 to obtain interest under section 66020,
subdivision (e). Appellant cannot show that it followed the procedure in section 66020
for attacking the fee as it did not file an action within the specified limitation period.
“The timely filing of a written protest is a mandatory prerequisite to any later action to
challenge the imposition of the fees, and any such action must be filed within 180 days
after the imposition of the fees.” (California Ranch Homes Development, supra, 17
Cal.App.4th at p. 577.)
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DISPOSITION
The judgment is affirmed. Respondent is entitled to costs on appeal.
FLIER, J.
WE CONCUR:
RUBIN, Acting P. J.
GRIMES, J.
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