Private Attorney General: Trial Court’s Dismissal Of Validation Action Based On Lack Of Subject Matter Jurisdiction Did Not Entitle Victor To Private Attorney General Fees

Losing City Was Free to Go Forward With The Sale, So The Victory Was Pyrrhic. 

            In City of Upland v. The Inland Oversight Committee, Case No. E073768 (4^th Dist., Div. 2 Oct. 13, 2020) (unpublished), City sought through a validation action to validate its agreement to sell part of Memorial Park to San Antonio Regional Hospital, which drew an opposition by a nonprofit organization.  The lower court dismissed the validation action only on the technical ground that it lacked subject matter jurisdiction because the contract was not subject to such an action, although the City was free to go ahead with the transaction later.  It in no way determined the validity of the agreement, and nonprofit did not cross-claim on invalidity grounds.  The trial judge denied nonprofit’s request for private attorney general fees for defeating the validation action on such a narrow ground.

            The 4/2 DCA affirmed.  There were two main problems with respect to reversing the fee denial, which was no abuse of discretion under the circumstances.  First, the victory did not confer a significant benefit because the sale could indeed go through later (subject to renewal of other arguments by nonprofit).  Second, nonprofit’s suggestion that defeating any validation action was per se grounds for a CCP § 1021.5 fee grant went too far; after all, nothing showed City and Hospital had done anything wrong and the sale might yet be consummated.   (Cf. Canyon Crest Conservancy v. County of Los Angeles, 46 Cal.App.5^th 398, 410-411 (2020) [discussed in our February 20, 2020 post before it was later certified for publication].)