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Strong v. Sutter County Board of Supervisors

September 15, 2010

MICHAEL V. STRONG, AS ASSESSOR, ETC. PLAINTIFF AND APPELLANT,
v.
SUTTER COUNTY BOARD OF SUPERVISORS, DEFENDANT AND APPELLANT.



APPEAL from a judgment of the Superior Court of Sutter County, R. Michael Smith, Judge. (Retired Judge of the Solano Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Reversed. (Super. Ct. No. CVCS092065).

The opinion of the court was delivered by: Robie, J.

CERTIFIED FOR PUBLICATION

Dissatisfied with the refusal of the Sutter County Board of Supervisors (the board) to employ independent legal counsel to represent him in a dispute with the board, Sutter County Assessor Michael Strong instituted an ex parte proceeding under Government Code section 31000.6 (set out at length below).*fn1 In that proceeding, he sought "an ex parte order directing that Sutter County engage [a particular attorney] as independent counsel for [him] in lieu of representation from Sutter County Counsel."

In response, the board argued (among other things) that the trial court's role in a proceeding under section 31000.6 is limited to finding whether county counsel would have a conflict of interest in representing the assessor. Notwithstanding this argument, the court issued an order: (1) finding Strong was "acting within the performance of his duties" with regard to the matter for which he sought independent counsel; (2) finding there was a conflict of interest between county counsel and Strong relating to that matter; (3) finding an ethical wall could not be created to enable county counsel to represent Strong in the matter; and (4) ordering the board to select and employ independent legal counsel to represent Strong.

On appeal, the board contends the trial court erred in ordering the board to appoint independent counsel for Strong. On cross-appeal, Strong contends the trial court erred in ordering the board to select the attorney to serve as his independent counsel.

We conclude the trial court erred because under the plain language of section 31000.6, the court has no authority to do anything other than determine whether a conflict of interest exists and determine whether an ethical wall can be created to remedy the conflict. To the extent the court here found Strong was acting within the performance of his duties and ordered the board to select and employ independent counsel for Strong, the court acted beyond its limited authority in the ex parte proceeding then before it. Although Strong might have pursued such a finding and such an order in a mandamus proceeding under Code of Civil Procedure section 1085, by the plain terms of section 31000.6 he was not entitled to either in an ex parte proceeding under that statute. Accordingly, we will reverse.

FACTUAL AND PROCEDURAL BACKGROUND

In the spring of 2005, Fremont Medical Center merged into Rideout Memorial Hospital, and the real property Fremont owned in Sutter County thereafter belonged to Rideout. For reasons related to the change of ownership, Strong subsequently denied Rideout's claims for the welfare exemption from property taxation for the 2006-2007 and 2007-2008 tax years.*fn2

After paying the resulting property taxes, in May 2008, Rideout filed with the board a claim for a refund of more than $850,000 in taxes. The board considered Rideout's refund claim at two closed sessions in February and May 2009. In connection with those sessions, Strong submitted letters to the board explaining the reason he denied the exemption and setting forth his opposition to the board settling the matter with Rideout.

Notwithstanding Strong's opposition, in June 2009 the board entered into a settlement agreement with Rideout, agreeing to pay Rideout just over $588,000 in settlement of its refund claim.

At a public session in August 2009, Strong asked the board to employ independent legal counsel for him, presumably to assist him in challenging the board's settlement of Rideout's refund claim on the ground that the board "wrongfully usurped" his constitutional powers. The board denied his request. Accordingly, on August 27, 2009, Strong -- acting through attorney Dennis M. Cota -- commenced this proceeding by filing an "EX PARTE APPLICATION TO APPOINT INDEPENDENT COUNSEL" under section 31000.6, with a hearing on the application to be held before Presiding Judge Chris Chandler that day.*fn3 (Bold text omitted.) In his application, Strong asked that the court appoint Cota as his independent counsel because county counsel had a conflict of interest. In his declaration in support of Strong's application, Cota noted that county counsel (whom he had contacted about the matter on August 25) had "proposed that the matter be addressed on a noticed motion," but Strong had "elected to proceed as noticed" -- i.e., with the ex parte proceeding.

Two days before the scheduled hearing, the board filed its opposition. In opposition, the board argued that Strong was not acting in the performance of his duties in seeking to challenge the board's decision to settle Rideout's refund claim. The board also argued that "the entire authority granted the court by section 31000.6 is to make a [conflict of interest] finding, not appoint counsel." The board essentially conceded county counsel had a conflict of interest, and thus the only issue to be decided was "whether the Assessor is entitled to an attorney pursuant to section 31000.6 to assist him in the performance of his duties."

Ultimately, Strong's ex parte application was heard by a visiting judge. Thereafter, on September 15, 2009, the court filed its "ORDER AND JUDGMENT," in which it: (1) found Strong was "acting within the performance of his duties in seeking to set aside the Compromise and Release Agreement entered into between Sutter County and Rideout Memorial Hospital"; (2) found there was a conflict of interest between county counsel and Strong relating to the matter; (3) found an ethical wall could not be created to enable county counsel to represent Strong in the matter; and (4) ordered the board to "select and employ independent legal counsel at the expense of Sutter County to represent . . . Strong in seeking to overturn the Compromise and Release Agreement entered into between Sutter County and Rideout Memorial Hospital."

The board filed a timely notice of appeal, and Strong filed a timely notice of cross-appeal.

DISCUSSION

Before we proceed to the arguments on appeal, we begin with the pertinent statute, section 31000.6, which we set out at length.*fn4 As relevant here, the statute provides as follows:

"(a) Upon request of the assessor . . . of the county, the board of supervisors shall contract with and employ legal counsel to assist the assessor . . . in the performance of his or her duties in any case where the county counsel . . . would have a conflict of interest in representing the assessor . . . .

"(b) In the event that the board of supervisors does not concur with the assessor . . . that a conflict of interest exists, the assessor . . . , after giving notice to the county counsel . . . , may initiate an ex parte proceeding before the presiding judge of the superior court. The county counsel . . . may file an affidavit in the proceeding in opposition to, or in support of, the assessor's . . . position.

"(c) The presiding superior court judge that determines in any ex parte proceeding that a conflict actually exists, must, if requested by one of the parties, also rule whether representation by the county counsel . . . through the creation of an 'ethical wall' is appropriate. The factors to be considered in this determination of whether an 'ethical wall' should be created are: (1) equal representation, (2) level of support, (3) access to resources, (4) zealous representation, or (5) any other consideration that relates to proper representation.

"[¶] . . . [¶]

"(e) If the presiding judge determines that a conflict of interest does exist, and that representation by the county counsel . . . through the creation of an ethical wall is inappropriate, the board of supervisors shall immediately employ legal counsel to assist the assessor . . . .

"(f) As used in this section, 'conflict of interest' means a conflict of interest as defined in Rule 3-310 of the Rules of Professional Conduct of the State Bar of California, as construed for public attorneys."

With the terms of the statute in mind, we turn to the arguments on appeal. For its part, the board contends the trial court "erred by exercising authority not conferred by section 31000.6 by ordering the [b]oard to select and employ legal counsel to represent the Assessor. If an action is brought under section 31000.6, the only authority afforded the court is to make a finding as to whether a conflict of interest on the part of county counsel exists." The board also contends the trial court "erred in finding that the Assessor would be acting within the performance of his duties in seeking to set aside a compromise and release agreement entered into between the county and a taxpayer."

For his part, on cross-appeal Strong contends "[t]he trial court judge improperly applied Government Code section 31000.6 when he ordered the [b]oard to select [his] attorney."

As we will explain, the board's first claim of error has merit and requires reversal; therefore, we do not reach the board's second claim of error, or Strong's claim of error.

Because the board's first claim of error requires us to determine the intended meaning of section 31000.6, we begin with a few of the basic principles of statutory construction. "A fundamental rule of statutory construction is that a court should ascertain the intent of the Legislature so as to effectuate the purpose of the law. [Citations.] In construing a statute, our first task is to look to the language of the statute itself. [Citation.] When the language is clear and there is no uncertainty as to the legislative intent, we look no further and simply enforce the statute according to its terms." (DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387-388.) "Our role in construing a statute is simply to ascertain and to declare what is in terms or in substance contained in the statute, not to insert what has been omitted." (Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 270, citing Code Civ. Proc., § 1858.)

By its plain terms, subdivision (a) of section 31000.6 imposes a duty on the board of supervisors to "contract with and employ legal counsel to assist the assessor . . . in the performance of his or her duties" when the assessor requests counsel and "county counsel . . . would have a conflict of interest in representing the assessor." Subdivision (b) of the statute provides a prompt dispute resolution method when the assessor requests independent counsel but the board of supervisors refuses that request because the board "does not concur . . . that a conflict of interest exists." In other words, the dispute resolution procedure in subdivision (b) becomes operative when the assessor asks the board of supervisors to hire independent counsel to assist him in the performance of his duties but the board refuses to do so based on the belief that independent counsel is unnecessary because there is no conflict of interest and therefore it is ethically permissible for county counsel to represent the assessor. In that circumstance, the statute empowers the presiding judge of the superior court to resolve the dispute over whether a conflict of interest exists in an ex parte proceeding initiated by the assessor. In such a case, county counsel may weigh in on either side -- agreeing with the assessor that there is conflict or agreeing with the board of supervisors that there is not -- by "fil[ing] an affidavit in the proceeding." (Ibid.)

Subdivision (c) of the statute provides that if the presiding judge sides with the assessor in the ex parte proceeding and "determines . . . that a conflict actually exists," the judge must also address "whether representation by the county counsel . . . through the creation of an 'ethical wall' is appropriate," provided one of the parties asks the court to make that determination. (§ 31000, subd. (c).)

Finally, subdivision (e) of the statute provides that if the presiding judge's ruling supports the assessor's position -- that is, if the judge decides "a conflict of interest does exist, and . . . representation by the county counsel . . . through the creation of an ethical wall is inappropriate" -- the board of supervisors has a duty to "immediately employ legal counsel to assist the assessor." (§ 31000, subd. (e).)

From the plain terms of the statute, we discern that the board is correct here -- section 31000.6 provides for an ex parte proceeding to resolve only the very narrow question of whether county counsel has a conflict of interest that prevents county counsel from representing the assessor and, if so, whether an ethical wall can be created to allow the representation of the assessor by county counsel despite the conflict. There is no authority in the statute for the court to resolve in an ex parte proceeding under the statute a dispute over whether the purpose for which the assessor seeks independent counsel is within "the performance of his or her duties." Nor is there any authority for the court to order in the ex parte proceeding that the board of supervisors actually employ independent legal counsel for the assessor. By the plain terms of section 31000.6, all the court is empowered to do in an ex parte proceeding brought under the statute is resolve the disagreement between the assessor and the board over whether "a conflict actually exists" and, "if requested by one of the parties, also rule whether representation by the county counsel . . . through the creation of an 'ethical wall' is appropriate." (§ 31000.6, subd. (c).)

Here, after the board settled a property tax refund claim over Strong's objection, Strong requested that the board hire independent counsel to represent him in resolving his disagreement with the board over the settlement. In requesting independent counsel, Strong quite rightly recognized that county counsel would have a conflict of interest in representing him in the matter because county counsel would also have to represent the board. The board denied Strong's request for independent counsel, and there is nothing in the record to indicate the board did so because the board believed there was no conflict of interest and county counsel could ethically represent both the board and the assessor in the matter. Indeed, under the circumstances, it would have been unreasonable for anyone to believe the board thought county counsel could represent both parties. Thus, it is apparent that the dispute here regarding the appointment of independent counsel for Strong was never over whether county counsel had a conflict of interest. As the board admitted in its opposition to Strong's ex parte application, "Obviously, County Counsel could not represent the Assessor in a lawsuit against the Board of Supervisors and no one is suggesting he could. The only issue in this proceeding is whether the Assessor is entitled to an attorney pursuant to section 31000.6 to assist him in the performance of his duties." From the outset, the board's position was that Strong was not entitled to county-funded counsel -- whether an independent attorney or an attorney in county counsel's office -- because the matter for which Strong sought legal assistance -- pursuing his dispute with the board over the tax refund settlement -- was not within the performance of his duties as assessor.

Unfortunately for Strong, section 31000.6 does not provide any means to resolve a dispute between the assessor and the board of supervisors over whether the purpose for which the assessor seeks legal counsel is within the performance of his duties. Instead, the statute provides only for the presiding judge of the superior court to become involved "[i]n the event that the board of supervisors does not concur with the assessor . . . that a conflict of interest exists." (§ 31000.6, subd. (b).) In other words, by its plain terms, section 31000.6 addresses only the situation that arises when the assessor requests the appointment of independent counsel because he believes county counsel cannot ethically represent him due to a conflict of interest, but the board disagrees that any such conflict exists. In such a case, the board's position is necessarily that, because no conflict exists, county counsel can ethically represent the assessor and the board in the matter. In such a situation -- and only in such a situation -- section 31000.6 permits the assessor to "initiate an ex parte proceeding before the presiding judge of the superior court" to resolve whether "a conflict actually exists." (§ 31000.6, subds. (b) & (c).)

Here, because there was never a disagreement between Strong and the board about whether county counsel had a conflict of interest, section 31000.6 did not provide Strong with any avenue of relief. To resolve his dispute with the board over whether he was entitled to county-funded legal counsel because the purpose for which he sought legal assistance was within the performance of his duties, Strong needed to pursue a writ of mandate in a regularly noticed proceeding under Code of Civil Procedure section 1085. In mandamus, the court has the power to direct the issuance of a writ to the board of supervisors "to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station . . . ." (Ibid.) Necessarily, in deciding whether the board of supervisors had a duty to employ independent counsel for the assessor under ...


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