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Friends of Shingle Springs Interchange, Inc v. County of El Dorado

November 22, 2011


(Super. Ct. No. PC20090555) APPEAL from a judgment of the Superior Court of El Dorado County, Nelson Keith Brooks, Judge. Affirmed.

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


Appellant Friends of Shingle Springs Interchange, Inc. (FSSI) filed a verified petition for writ of mandate (the petition) challenging the certification and approval by the County of El Dorado, through its board of supervisors (County), of a Circle K mini-mart and gas station complex off Highway 50 in Shingle Springs. At the time FSSI filed its petition, its corporate powers had been suspended for some two and a half years. Real party in interest Convenience Retailers, LLC (CRL), joined by the County (collectively respondents) demurred to the petition, asserting that FSSI did not have the legal capacity to file the petition and that FSSI's corporate powers were not revived until after the applicable statutes of limitations had run. The trial court sustained the demurrer without leave to amend and dismissed the petition.

On appeal, FSSI contends (1) the existence of unresolved factual disputes rendered dismissal of the petition by demurrer improper, (2) it was error to sustain the demurrer because FSSI substantially complied with the corporate suspension and revivor statutes prior to expiration of the relevant statutes of limitations, and (3) the trial court abused its discretion when it denied leave to amend the petition to allege substantial compliance.

We hold that a demurrer was an appropriate vehicle to challenge the petition, that FSSI cannot allege substantial compliance with the suspension and revivor statutes to avoid the short limitations periods in the California Environmental Quality Act and the Planning and Zoning Law, and that the trial court did not abuse its discretion in denying leave to amend the petition. We affirm the judgment of dismissal.


A. The Project

This litigation involves the construction of a Circle K convenience store and gas station adjacent to Highway 50 at the Shingle Springs Interchange near Placerville (the project). FSSI challenged approval of the project, asserting three causes of action in its petition: the first for violations of the California Environmental Quality Act (CEQA);*fn1 the second for violations of the Planning and Zoning Law;*fn2 and the third for "violating the traffic safety provisions" of a County regulation. Essentially, FSSI complained that the site is too small for the proposed use, that the driveways are unsafe because of the traffic that will result from the project, and that the County failed to consider the traffic impacts that would result from the project.

B. FSSI's Corporate Status

At the hearing on the demurrer, FSSI submitted to the trial court the declaration of Kelly Rasco, "secretary, bookkeeper, office assistant" and the custodian of records of FSSI.*fn3 Attached as an exhibit to the Rasco declaration and incorporated by reference was a timeline of events. At the hearing on the demurrer, counsel for FSSI referred to events set forth in the declaration and timeline. As FSSI hoped, the trial court read and considered the declaration. We include events from the Rasco declaration in our chronology. These events are relevant to the claim of substantial compliance and therefore have a bearing on whether FSSI could amend its petition to state facts sufficient to defeat the statute of limitations bar.

FSSI filed its articles of incorporation with the Secretary of State (SOS) on May 14, 2002. The original articles state, among other things, that FSSI is a "nonprofit public benefit corporation . . . not organized for the private gain of any person."

According to the Rasco timeline, FSSI received a request from the Franchise Tax Board (FTB) dated February 28, 2006, for past due taxes. Rasco did not specify in her timeline the amount that was past due.*fn4 On March 14, 2006, FSSI sent the FTB a letter "in response to [FTB's] 02-28-06 request for past due taxes." Rasco did not state what response FSSI actually provided in its letter. FSSI received a reply from the FTB dated July 31, 2006 "citing need for 'Limitations of Powers' clause in Articles of Incorporation." On August 4, 2006, FSSI sent the "information" that was requested by the FTB on July 31, 2006. FSSI received a letter from the FTB dated September 27, 2006 "requesting additional information." Rasco did not state what information was requested.

FSSI subsequently received a notice of pending suspension and penalty assessment from the SOS dated November 2, 2006 for failure to file a statement of information. Based on Rasco's statement that the notice related to FSSI's failure to file a statement of information, we assume the notice referenced a pending suspension pursuant to Corporations Code section 2205 or section 5008.6.*fn5 Thereafter, FSSI received a notice of balance due from the FTB dated November 15, 2006. According to the Rasco timeline, the notice read, "[T]he corporation continues to be delinquent in filing the statement(s) required by statute" and reflected a balance due of $50 for previously assessed penalties, plus an additional balance due of $1,404.25 (consisting of $800 in taxes, $456.36 in penalties/fees, and $147.89 in interest). Rasco stated the notice indicated FSSI could obtain "relief from the SOS suspension '. . . by filing the required statements(s).'" The notice further read, "This is our final notice requesting you immediately pay the balance due and file all past due returns noted above. We scheduled this entity for suspension or forfeiture on 03/01/07 because you have not filed tax returns or paid an amount due on behalf of the above entity under Revenue and Taxation Code Sections 23301, and 23301.5. If your entity is exempt, it may be subject to revocation under Section 23775[.]"

On January 5, 2007, FSSI sent a letter to the FTB "requesting additional time to supply various documents previously requested & previously submitted" and advising the FTB that dissolution of the corporation was under consideration. Rasco did not identify the specific documents for which FSSI was requesting time to produce.

FSSI subsequently received a final notice before suspension from the FTB dated December 22, 2006, and reflecting a balance due of $1,362.70. The summary of account balance attached to the notice actually reflected a balance due of $1,404.25 as previously noted.

On February 1, 2007, the SOS suspended FSSI's corporate powers for failure to file a statement of information. On March 1, 2007, the FTB suspended FSSI's corporate powers for failure to file tax returns and pay amounts due and owing.*fn6

There are no specific events listed on the Rasco timeline between March 28, 2007 and January 17, 2008. However, Rasco stated that FSSI considered "dissolv[ing]" or "abandoning" the corporation beginning in early 2007 and into early 2008. During this time, FSSI sent various documents to the FTB concerning "abandonment" or "dissolution" of the corporation and, in fact, on January 17, 2008, FSSI sent the FTB a registered letter and form requesting abandonment of the corporation but received no response. Over a period of months following the January 17 letter, FSSI "changed [its] mind[] about abandoning the corporation and ultimately made a decision to revive the corporation. The Rasco timeline reflects that Rasco spoke with a person at the FTB in early December 2008 regarding "taking necessary steps to revive [FSSI]." However, it was not until January 26, 2009, that FSSI sent to the FTB the Form 3557 Application for Certificate of Revivor. According to the Rasco timeline, "several calls" inquiring about the progress of FSSI's application were made to a person at the FTB between February and August of 2009. None of the calls were returned. Rasco did not state how many phone calls were made or the dates on which they were made. On August 13, 2009, a person associated with FSSI (from the timeline, it appears it could have been Rasco) spoke to the person at the FTB that FSSI had been trying to reach and was advised to resend the application material previously submitted. On August 14, 2009, FSSI sent the FTB an account of corporate activities, an FTB Form 3500 Tax Exemption Application, and a check for the filing fees. Rasco did not expressly state in either her declaration or the timeline that a request for exemption had been made prior to this date; nor did she state a check for filing fees had been submitted prior to this date.*fn7 On August 31, 2009, a corporate officer of FSSI hand delivered to the FTB what Rasco called "another FTB Application package." On that same day, the same corporate officer went to the SOS and filed a statement of information.

The SOS sent FSSI a letter dated September 1, 2009, which reads in part, ". . . The required statement [of information] has recently been received and filed by the Secretary of State." The letter further stated, "[O]ur records indicate that the [FTB] has also suspended/forfeited the corporation. Pursuant to California Corporations Code Section 2205(d) or 5008.6, the corporation will remain suspended/forfeited until the [FTB] issues a Certificate of Revivor. To obtain a Certificate of Revivor, it will be necessary to complete the enclosed Application for Certificate of Revivor (FTB 3557 form) and submit: [¶] - a completed FTB 3557 form, and [¶] - a copy of this letter [¶] together, to the [FTB]. Questions regarding the [FTB] revivor requirements should be directed to the [FTB] . . . ." Rasco did not state the date FSSI actually received this letter.

On September 2, 2009, FSSI filed its petition challenging certification and approval of the project. FSSI alleged that the environmental impact report (EIR) for the project was approved and certified by the County at a public hearing on August 4, 2009, and that a CEQA notice of determination was filed on that same date. As discussed post, this date triggered the applicable statutes of limitations.

According to the Rasco timeline, FSSI submitted another application package to the FTB on September 8, 2009. This package included the "initial and current Statement of Information and Application." While the September 1, 2009 letter from the SOS indicated the application to the FTB must include a copy of that letter, Rasco did not specifically state in her declaration or timeline that a copy of this letter was included.

Also on September 8, 2009, FSSI electronically filed with the SOS "another Statement of Information dated 09/08/09." On September 9, 2009, FSSI faxed a "Relief From Suspension form" to the FTB and on September 10, 2009, FSSI faxed "additional info[rmation]" to the FTB. Rasco did not indicate the nature of the "additional info[rmation]." On September 18, 2009, FSSI faxed the FTB an "[a]pplication package with the Relief From Suspension & Application for Certificate of Revivor forms previously submitted to FTB numerous times, in addition to Statement of Purpose and copy of By Laws." Nowhere in the timeline or the declaration does Rasco state that the statement of purpose and bylaws had previously been submitted to the FTB.

Rasco stated that FSSI faxed articles of incorporation to the FTB on September 22, 2009. On September 28, 2009, FSSI "[r]eceived" a fax from the FTB "requesting missing clause in Articles of Incorporation for an Amendment of Nonprofit, with sample Articles to add."

On October 8, 2009, FSSI filed a Certificate of Amendment of Articles of Incorporation with the SOS.*fn8 According to Rasco, FSSI faxed and mailed to the FTB "Endorsed Articles of Incorporation" on October 19, 2009. Although not expressly stated, we infer that this submission included the October 8, 2009 amendment. No explanation was given for the delay between the filing of the amended articles with the SOS on October 8 and the mailing to the FTB on October 19.

According to the certificate of status issued by the SOS on November 4, 2009, FSSI's corporate status was still "suspended" as of that date.

In a letter dated November 9, 2009, the FTB informed FSSI that it was "exempt from California franchise or income tax," and that its tax-exempt status was "effective as of 05/14/2002."

A subsequent notice from the FTB dated November 24, 2009, informed FSSI that it had been relieved of suspension or forfeiture and that it was in good standing with the FTB effective November 4, 2009.

C. Respondents' Demurrer and the Trial Court's Ruling

Respondents demurred to the petition, arguing FSSI lacked the capacity to sue because its corporate status was suspended in 2007 and remained so as of November 4, 2009. Since FSSI did not have the capacity to sue when it filed its petition on September 2, 2009, each cause of action in the petition failed to state facts sufficient to constitute a cause of action in that the CEQA challenge was barred by the 30-day statute of limitations set forth in Public Resources Code section 21167, subdivision (c),*fn9 and the project challenges grounded on the Planning and Zoning Law and County regulations were barred by the 90-day statute of limitations set forth in Government Code section 65009, subdivision (c)(5) [sic].*fn10

FSSI responded that it had substantially complied with corporate suspension and revivor statutes prior to the running of the applicable statutes of limitations. FSSI also argued it was entitled to amend the petition to substitute in its place another petitioner with standing, in which case the ...

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