Sixth District Upholds Dismissal for Petitioner who Relied on an Incorrect NOD Provided by City

March 15th, 2021

By: Sam Bacal-Graves

In Organizacion Comunidad de Alviso v. City of San Jose (2021) 60 Cal.App.5th 783 the Sixth District Court of Appeal held that failure to timely name the correct real party in interest required dismissal despite the City providing Petitioner with only an incorrect Notice of Determination (NOD) showing the wrong project applicant and not the subsequently corrected NOD. Though the City violated CEQA by not sending the second NOD, this failure did not excuse Petitioner from its obligation to timely amend its petition to name the correct real party in interest.

The case involved a project on property that changed hands during the approval process. Shortly before the project was approved, the initial project applicant sold the property to Microsoft, which filed an application to take over as project applicant. Subsequently, the project was considered and approved by the city council and then reconsidered and approved once more several months later. Both approvals occurred after Microsoft had purchased the property. A member of the Petitioner organization asked the project manager to be provided with the NOD, which was emailed to him promptly. The first NOD issued after the second Council approval (the planner informed the Petitioner that they would not file a NOD until after the scheduled reconsideration) incorrectly listed the original owner as the project applicant. Five days later a second NOD was filed by the City, correctly showing Microsoft as the applicant, but it was not sent to Petitioner.

Petitioner subsequently filed a lawsuit naming the original owner as real party in interest. Two weeks after the statute of limitations expired, the original owner’s attorney informed Petitioner that Microsoft acquired the property and that a second NOD had been filed. Petitioner filed an amended petition over a month after receiving that letter – more than 70 days after the second NOD had been filed. The amended petition named Microsoft as real party in interest. Microsoft, joined by the City, demurred on the grounds that the action was time-barred. The trial court sustained the demurrer without leave to amend.

On appeal, Petitioner argued that the City had violated Public Resources Code section 21167, subdivision (f), by not providing the second NOD. This provision requires that an agency provide the relevant notice within five business days after project approval to anyone who has submitted a written request for it. Petitioner’s member had submitted such a request. The Court quickly concluded that the City’s failure to send the second NOD was a violation of this requirement.

However, Petitioner had still failed to name Microsoft before the applicable 30-day limitations period expired. Petitioner argued that the 180-day statute of limitations applicable when a NOD is materially defective should have applied. However, the Court rejected this, as the second NOD was legally proper and not defective.

Petitioner also argued that its failure to comply with the 30-day statute of limitations was due to the City’s violation. While the Court reiterated its agreement as to the violation, it noted that the same subdivision specifies that the date on which the notice is mailed does not affect the statute of limitations. The Court declined to legislate a remedy for the City’s violation, particularly where it would conflict with the express provisions of the statute.

The Court also rejected Petitioner’s claim that the mere posting of a NOD at the County Clerk’s office failed to provide actual or constructive notice to a party which had properly requested the NOD. The Court found this reasoning to be at odds with settled principles. Petitioner’s members participated in city council hearings at which the correct project applicant was identified and, therefore, did have actual notice. While the Court was sympathetic to Petitioner’s frustration, it held that the proper application of section 21167 rendered the petition untimely, and advised that potential litigants should pay close attention to agency filings before initiating litigation.

The Court further rejected Petitioner’s argument that the trial court should have permitted Microsoft to be substituted for a fictitiously named Doe under the relation back doctrine, thereby rendering the suit timely. Under the relation back doctrine, a plaintiff who is genuinely ignorant of the name of a defendant, and who states that fact in the pleading, may subsequently amend the pleading to add his or her name. If the requirements are satisfied, the amendment relates back to the filing of the original pleading, and the statute of limitations stops running as of the date the original complaint was filed. Plaintiff was unable to satisfy the requirements because the Court held that any claim Petitioner could make to ignorance was unreasonable as a matter of law. The second NOD correctly identified the project applicant. Petitioner’s members had actual notice of its identity from the city council meetings as well. Finally, after receiving additional actual notice from the party Petitioner erroneously named, Petitioner still delayed for a period of time longer than the initial limitations period before seeking to amend the pleading.

Petitioner also argued that the City and Microsoft should have been equitably estopped from asserting the statute of limitations as a defense. To invoke equitable estoppel, Petitioner was required to show that the city knew about the second NOD, intended to withhold it, that Petitioner was unaware of the second NOD, detrimentally relied on not receiving it, and that the injustice which would result from failing to uphold the estoppel would be of sufficient dimension to justify any consequent effect upon the public interest or policy. Even assuming the City’s failure to send the second NOD was intentional rather than inadvertent, the Court held that Petitioner’s reliance on that failure was unreasonable. As with the relation back issue, Petitioner’s reasoning faltered because the second NOD provided constructive notice of the correct project applicant. The Court found this case distinguishable from Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, where the agency intentionally misrepresented that it would circulate an EIR and file an NOD, but instead filed a notice of exemption, unbeknownst to the challengers.

As Petitioner’s proposed amendments would not have cured the failure to timely sue the Real Party, the Court held that the trial court did not abuse its discretion by sustaining the demurrer without leave to amend.

Key Point: There is no remedy for an agency’s violation of Public Resources Code section 21167, subdivision (f); thus, if a proper NOD is filed, courts must strictly apply CEQA’s statute of limitations. Petitioners are cautioned to review agency notices, agendas, staff reports, and information in hearings to ensure the information in their petition is correct. Petitioners should not rely on the agency to provide a copy of the NOD, even if a proper request was filed, or assume that the NOD will not be corrected without further notice. Agencies should carefully review NODs for accuracy to assure the validity of the NOD and the shorter statute of limitations.