Ct. App. 1/3 A112539, Marin County, Super. Ct. No. CV052703, Judge: James R. Ritchie.
The opinion of the court was delivered by: Kennard, J.
Under the Municipal Improvement Act of 1913 (Sts. & Hy. Code, § 10000 et seq.), an assessment district may be formed and assessments may be levied on real property for various purposes, including moving overhead utility wires underground, as occurred here. Under article XIII D of the state Constitution, however, any assessment on real property must be in proportion to the special benefit conferred on that property. (See Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th 431, 443.) When a lawsuit challenges the assessments imposed on specific parcels of real property for (among other things) noncompliance with article XIII D, must the plaintiff comply with the requirements governing validation proceedings brought under Code of Civil Procedure sections 860 through 870.5? We conclude that the answer is "no." Because the Court of Appeal reached the opposite conclusion, we reverse its judgment.
In May 2003, owners of 116 parcels in the Town of Tiburon (hereafter the Town) in Marin County petitioned the Town to create an assessment district in Del Mar Valley to install underground utility wires carrying electricity, telephone signals, and other cable services, replacing overhead wires strung from poles.
On June 4, 2003, the Town's council adopted a resolution of intention to form the proposed assessment district under the Municipal Improvement Act of 1913. The Town then engaged a civil engineer to prepare a report analyzing the proposed project. On March 10, 2005, the civil engineer submitted a preliminary engineer's report, which the Town's council approved on March 16, 2005. As the special benefit that would be conferred on the 221 parcels located in the proposed district, the report identified the new underground electrical, telephone, and cable facilities that would be "the direct source of service to the properties." In determining the special benefit conferred on each individual parcel, the report assigned points based on three benefit categories: (1) aesthetic benefit from removal of unsightly poles and overhead wires, (2) improved safety because of the reduced risk of downed poles and wires, and (3) greater service reliability because of new wiring and equipment. The estimated cost of the project was $4,720,000, of which construction costs represented $3,900,611. The proposed individual assessments ranged from about $7,200 to about $31,200 per parcel, with $21,717.04 being the most frequent assessment.
On March 30, 2005, notices of a public hearing and ballots were sent to the owners of parcels within the proposed assessment district. Each ballot was weighted to reflect the amount of the proposed assessment for the parcel in question. Owners of parcels representing 71 percent of the total proposed assessment voted in favor of the project.
On May 12, 2005, the Town received a final engineer's report, and on May 18, 2005, the Town's council voted unanimously to approve that report, to order the improvements, to establish the Del Mar Valley Utility Undergrounding Assessment District, and to confirm the proposed individual assessments. On May 27, 2005, assessment notices were sent to property owners within the new assessment district.
Two couples, Jimmie and Jean Bonander and Frank and Shelley Mulberg, had previously objected to inclusion of their parcels in the district. The assessment levied against each of their parcels was $31,146.62. On June 16, 2005, the Bonanders and the Mulbergs filed a "Petition for Writ of Administrative Mandamus or Mandate and Complaint for Declaratory and Injunctive Relief" (hereafter complaint) in the superior court, alleging four causes of action - three of them for administrative mandate and the fourth seeking declaratory relief. The complaint named as defendants the Town, its council, and 20 unnamed Does.
The complaint alleged that the assessment district, as formed, violated article XIII D of the state Constitution because the apportionment method used by the district resulted in assessments against plaintiffs' parcels that exceeded the special benefit to be conferred on those parcels. According to plaintiffs, their lots would receive no aesthetic benefit at all and little, if any, safety or reliability benefit, because after the project's completion utility poles and overhead wires would remain nearby. The complaint further alleged that the assessment district was infirm because (1) the petition initiating the creation of the district was inadequate, (2) the Town's resolution of intention to form the district was also inadequate, (3) the Town's engineers had drawn the district's boundaries by "cherry picking and gerrymandering," (4) the boundaries adopted were the product of "tainted voting," and (5) the zones created within the district prevented a fair allocation of construction costs. The complaint sought not only to set aside the assessments on plaintiffs' parcels but also to invalidate the Town's May 18, 2005, resolution, which established the assessment district and confirmed the individual assessments.
On June 17, 2005, plaintiffs served the summons and complaint on the Town, but they did not serve the owners of the other 219 parcels within the district.
On August 2, 2005, the Town answered the complaint, alleging several affirmative defenses, including that plaintiffs' claims were barred as untimely under Streets and Highways Code section 10400 and that plaintiffs had failed to file, within 60 days of the complaint's filing date, proof of service by newspaper publication, as required under Code of Civil Procedure sections 861 and 863.
On August 15, 2005, the 60th day after the filing of the complaint, plaintiffs mailed a modified copy of the summons and complaint to the record owners of the parcels in the assessment district. To a copy of the summons (which was directed only to the Town, the Town's council, and 20 unnamed Does) plaintiffs added this handwritten notation: "8/15/05 - To All Interested Parties [¶] SEE NOTICE ATTACHED TO SUMMONS." The attached sheet, addressed to "ALL PERSONS INTERESTED IN THE MATTER OF THE DEL MAR UTILITY UNDERGROUNDING ASSESSMENT DISTRICT," advised: "You may contest the legality or validity of the matter by appearing and filing a written answer to the complaint not later than SEPTEMBER 20, 2005." That same day, plaintiffs filed proof of service by mail of the modified summons on the other property owners.
On August 17, 2005, plaintiffs applied ex parte for an order amending the caption on their summons to include "all interested persons," thereby attempting to bring the summons into compliance with Code of Civil Procedure section 863. Plaintiffs, however, did not concede that this statute applied.
The trial court granted plaintiffs' application and authorized issuance of the amended summons. Plaintiffs then published the amended summons and its attached notice in a local newspaper, once per week, for four successive weeks, from August 19 through September 9, 2005, thereby attempting to come into compliance with Code of Civil Procedure section 861. On September 9 - 85 ...