No. S227786 (Court of Appeal No. F068477) (Fresno County Super. Ct. No. 12CECG03718) IN THE SUPREME COURT OF THE STATE OF CALIFORNIA STEPHEN K. DAVIS, Plaintiff and Appellant, v. FRESNO UNIFIED SCHOOL DISTRICT, ET AL., Defendant/Respondent and Petitioner After a Decision By the Court of Appeal, Fifth Appellate District ANSWER TO PETITION FOR REVIEW BY FRESNO UNIFIED SCHOOL DISTRICT Kevin R. Carlin, Esq. (SBN 185701) Carlin Law Group, APC 4452 Park Blvd., Suite 310 San Diego, CA 92116 Telephone: (619) 615-5325 Facsimile: (619) 615-5326 Kcarlin@carlinlawgroup.com Attorneys for Plaintiff/Appellant and Respondent STEPHEN K. DAVIS No. S227786 (Court of Appeal No. F068477) (Fresno County Super. Ct. No. 12CECG03718) IN THE SUPREME COURT OF THE STATE OF CALIFORNIA STEPHEN K. DAVIS, Plaintiff and Appellant, v. FRESNO UNIFIED SCHOOL DISTRICT, ET AL., Defendant/Respondent and Petitioner After a Decision By the Court of Appeal, Fifth Appellate District ANSWER TO PETITION FOR REVIEW BY FRESNO UNIFIED SCHOOL DISTRICT Kevin R. Carlin, Esq. (SBN 185701) Carlin Law Group, APC 4452 Park Blvd., Suite 310 San Diego, CA 92116 Telephone: (619) 615-5325 Facsimile: (619) 615-5326 Kcarlin@carlinlawgroup.com Attorneys for Plaintiff/Appellant and Respondent STEPHEN K. DAVIS TABLE OF CONTENTS Page 1 I. ISSUES PRESENTED FOR REVIEW II. STATEMENT OF CASEIPROCEDURAL HISTORY 2 III. ARGUMENT AGAINST GRANTING THE PETITION 3 A. B. The Same Issues Are Currently Being Considered in the First Appellate District 3 Grounds for Supreme Court Review Are Not Present 4 1. 2. 3. 4. 5. C. The Fifth District Concurred with the Only Other Published Decision on the Lease-Leaseback Contracts 4 District Unsuccessfully Tries to Use Legislative History as to a Different Statute to Create "Conflict" in Law 6 District Relies on "Employee" Cases Not Addressing Section 1090 7 KlistoffDid Not Address Section 1090's Extension to Independent Contractors and Consultants 8 Public Contract Code Section 10365.5 Does Not Apply 9 Davis' Interpretation of 17406 in Favor of Taxpayer Was Correct 1. Davis Correctly Requires Lease Leaseback Transactions under 17400 et Seq., to Be Genuine and Not Subterfuges to Avoid Other Applicable Statutory Obligations -1- 10 11 2. Davis Correctly Requires Actual Use During the Term of the Lease Leaseback Transaction a. Education Code Section 17406 Does Not Speak of a Mere "Right" to Use Property and Any Such "Right" Would Be Illusory in Any Event 13 Early Vesting of Title Has No Relation to Use During the Lease Term 14 Duration and Nature of Use Are Irrelevant in the Context of a Genuine Lease 14 Davis Correctly Requires Contractor Financing ofthe Lease Leaseback Transaction 15 b. c. 3. D. If Review Were Granted, Which it Should Not Be, this Court Should Also Address the Following Additional Issues l. 2. IV. 12 16 If Review Is Granted the Court Should Also Grant Review on the Additional Issue of the Duty of Care Applicable to a Board of Education When Awarding Contracts Paid for with Proposition 39 School Bond Proceeds 16 If Review Is Granted the Court Should Also Grant Review on the Additional Issue of What The Competitive Bidding Requirements in Education Code 17417 Apply To 20 CONCLUSION 27 -11- TABLE OF AUTHORITIES Page(s) Cases California Employment Stabilization Com'n v. Payne (1947) 31 Cal.2d 210 6 California Housing Finance Agency v. Hanover/California Management and Accounting Center, Inc.(2007) 148 Cal. App.4th 682 City ofLos Angeles v. Offner (1942) 19 Cal.2d 483 Clarkv. Feder Semo and Bard, P.e. (2014) 739 FJd 28 6, 7, 8 5 19 Davis v. Fresno Unified School Dist. (2015) 237 Cal.App.4th 261 (modified June 19,2015) 6, 7,8, 10-17,20,21,22,23 Driscoll v. Burlington-Bristol Bridge Co. et al. (1952) 8 N.J. 433 17 Fink v. Nat 'I Sav. & Trust Co. (1985) 772 F.2d 951 19 Harbor v. Deukmejian (1987) 43 Cal.3d 1078 25 Hatch v. Superior Court (2000) 80 Cal.App.4th 170 22 Hobbs, Wall & Co. v. Moran (1930) 109 Cal.App 316 18 Hub City Solid Waste Servo V. City of Compton (2010) 186 Cal.App.4th 1114 6, 7, 8 In re Hamon's Estate (1922) 60 Cal.App. 154 Joyce V. Ford Motor Co. (2011) 198 Cal.App.4th 1478 Kaufman & Broad Communities, Inc. V. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26 Klistoffv. Superior Court (2007) 157 Cal.App.4th 469 Los Alamitos Unified Sch. Dist. V. Howard Contracting, Inc. -111- 19 25,26 26 8 (2014) 229 Cal.App.4th 1222 5,20,21,22,23 Marshall v. Pasadena Unified School Dist. (2004) 119 Cal.App.4th 1241 11 McClung v. Employment Development Dept. (2004) 34 Cal.4th 467 6 Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 491 7 Noble v. City ofPalo Alto (1928) 89 Cal.App. 47 17 Nussbaum v. Weeks (1989) 214 Cal.App.3d 1589 18 People v. Davis (1905) 147 Cal. 346,348 4 People v. Harby (1942) 51 Cal.App.2d 759 People v. Palma (1995) 40 Cal.App.4th 1559 Renee J v. Superior Court (2001) 26 Cal.4th 738 17 7 22 Reynolds v. Bement (2005) 36 Cal.4th 1075 7 Stigall v. City of Taft (1962) 58 Cal.2d 565 Terry v. Bender (1956) 143 Cal.App.2d 198 8 17 Tristv. Child (1874) 88 U.S. 441 17 United States v. Thomas (1872) 82 U.S. 337 18 Varity Corp. v. Howe (1996) 516 U.S. 489 19 Woods v. Young (1991) 53 Cal.3d 315 24 Wilcox v. Birtwhistle (1999) 21 Cal.4th 973 Constitutions 23 CALIFORNIA CONSTITUTION article Xiiia, § 1(b )(3)( c) CALIFORNIA CONSTITUTION article XVI, §6 -lV- 2 24 Statutes 1 CALIFORNIA RULES OF COURT § 8.1105 CALIFORNIA RULES OF COURT § 8.500(b)(l) 6, 8, 10 EDUC. CODE §§ 17400-17429 2,21,23 EDUC. CODE §§ 17280-17316 20 EDUC. CODE § 17400 1, 11, 16 EDUC. CODE § 17402 20 EDUC. CODE § 17406 2,4,5, 10, 11, 12, 13, 14, 15, 16,21,22,23 EDUC. CODE § 17407 21 EDUC. CODE § 17417 2,20,21,22 EDUC. CODE § 17418 21 GOV'T CODE § 1090 1,2, 6, 7, 8 GOV'T CODE § 4525 9,10 GOV'T CODE § 4526 9 GOV'T CODE § 4529.5 10 PUB. CONT. CODE § 102 20 PUB. CONT. CODE § 10365.5 9, 10 PUB. CONT. CODE §§ 10100-19102 9 PUB. CONT. CODE §§ 20105-20118.4 9 PUB. CONT. CODE §§ 20110-20118.4 21 PUB. CONT. CODE § 20100 9 Other Authorities 7 Witkin, Summary of Cal. Law (lOth), Constitutional Law §125 -v- 25 56 Ops.Atty.Gen. 571 (1973) 24 Bogert, The Law Of Trusts And Trustees (2014) § 612 19 Restatement 3d Trusts, § 77 19 -Vl- I. ISSUES PRESENTED FOR REVIEW The Modified Opinion (hereinafter Mod. Opn.) of the Fifth District COUli of Appeal states well the law and public policy of the State of Califomia on consultant conflicts of interest under Govemment Code section 1090 and, separately, the common law.! Likewise the Court of Appeal is correct in its analysis and statement oflaw requiring genuine leases, use during the tenn and contractor financing for school lease leaseback contracts pursuant to Education Code section 17400 et seq. The Petition for Review ("Petition") by Fresno Unified School District ("District") should therefore be denied? 3 If, however, review were granted,4 which it should not be, Stephen K. Davis ("Taxpayer") requests review of the following additional issues: 1. What is the duty of care applicable to a Board of Education when awarding contracts paid for with school constmction bond proceeds obtained via the lower 55% threshold created by 2000's Proposition 39? Taxpayer's Second Cause of Action. Neither Petition takes issue with the Opinion's conclusion that an adequate common law claim for conflict of interest was stated. 2 Taxpayer does not understand why District is seeking review of the Opinion which will retum $36.7 million dollars to District from Contractor. The Petition of Harris Constmction Co., Inc., ("Contractor") is being answered separately. 4 If review is granted Taxpayer respectfully requests Califomia Rules of Court Rule 8.ll05(e)(2) be invoked to order publication of the portion of the Opinion conceming the common law conflict of interest prohibition applicable to public entity consultant contracts which is not an issue for review under either Petition for Review as well as those other portions of the Opinion dealing with genuine leases, contractor financing and/or consultant conflicts of interest under Govemment Code section 1090 issues to the extent they are not the subject of this Court's review. 1 2. What does Education Code 17417 apply to if not leasebacks of school district owned property with new facilities constructed thereon as is the case here? Taxpayer's Third Cause of Action. H. STATEMENT OF CASE/PROCEDURAL HISTORY Taxpayer adopts the statement of facts and procedural history set fOlih in the Opinion and by District except as follows. First, District inconectly asserts there is a single "lease leaseback agreement." (Petition, 4 [hereinafter Pet.].) While there was a single lease leaseback transaction it consists of two separate contracts: a site lease and a facilities lease. Second, District inconectly asselis the lease leaseback transaction is govemed solely by Education Code 17406. It is not. Various provisions of Education Code sections 17400-17429 apply to the overall lease leaseback transaction and each of those applicable provisions must be complied with. Additionally, in its summary of Taxpayer's conflict of interest cause of action, District fails to acknowledge that cause was based both on COlmnon Law and Govemment Code lO90 conflict of interest prohibitions. The Opinion concludes Taxpayer "also has stated a common law claim for a conflict of interest." (Mod. Opn., 4l.) This COlTect statement of law is not challenged in the Petition. Further, District's assertion that "[t]here are many advantages to the lease leaseback project delivery method over the traditional hard-bid method" is pure speculation. (Pet. 12.) First, there was no evidence in the record on appeal to support this assertion. To the contrary, Exhibit 5 to Taxpayer's Motion for Judicial Notice ("MJN") filed concunently herewith is Sweetwater Union High School District's school bond performance audit which is required by Article l3A, Section 1(b )(3)( c); Califomia Constitution. Page 45 of the audit states: 2 Roughly even split between delivery methods: approximately 171 thousand square feet constructed using DBB and 183 thousand square feet using LLB EH&A analyzed project costs on a per square foot basis for prime contracts alone (Figure Q), and for the entire project cost (Figure R). In the prime contract analysis, EH&A found DBB projects had more change orders but were cheaper to build. The average change order rate for the DBB projects was 9.6%, and the average change order rate for the LLB projects was 2.8%. Average construction costs were $293/sq ft for DBB projects and $346/sq ft for LLB projects. Multiplying the $53 per square foot additional cost for lease leaseback ("LLB") over design bid build ("DBB") by the 183,000 square feet constructed under LLB reveals Sweetwater spent $9.7 million dollars more using LLB than it would have spent using DBB. The foregoing audit also acknowledges there are change orders on LLB' s so District's assertion of a "guaranteed maximum price" is also speculative. Just as in DBB, District's contract with Contractor allows for additional compensation to Contractor on account of "CHANGES AND EXTRA WORK/MODIFICATION" (Appellant's Appendix ("AA") pp. 63-64.) Finally, District's assertion that the Legislature will be amending California's school construction and conflict of interest statutes is also speculative. (Pet.l3.) Taxpayer has not found any legislation that has been introduced as of the date of filing this Answer relative to the foregoing. III. ARGUMENT AGAINST GRANTING THE PETITION A. The Same Issues Are Currently Being Considered in the First Appellate District This Court should deny both Petitions because the same issues analyzed in the Opinion are currently being considered by the First Appellate District COUli of Appeal in California Taxpayers Action Network v. Taber 3 Construction, Inc., et al., Appeal No. A145078. A copy of the Appellant's Opening Briefin that appeal is attached as Exhibit 1 to Taxpayer's Request for Judicial Notice filled conculTently herewith. Accordingly, this Court should exercise its discretion to deny the Petitions for Review in order to allow the First District to complete its analysis and see where it comes in compared to the published decisions of the Fourth and Fifth Appellate Districts. B. Grounds for Supreme Court Review Are Not Present A function of the California Supreme Court is "to secure hannony and uniformity in the [Courts of Appeal's] decisions, their conformity to the settled rules and principles of law, a uniform rule of decision throughout the state, a COlTect and unifonn construction of the Constitution, statutes, and charters, and in some instances a final decision by the court of last resort of some doubtful or disputed question of law." (People v. Davis (1905) 147 Cal. 346, 348.) Additionally the Court may order review to settle an important question oflaw. District's Petition does not rise to the level of justifying review by this COUli on either of these grounds and should be rejected. If, however, review is granted justice, good government and judicial efficiency dictate Taxpayer should likewise be granted review of his additional issues discussed below. 1. The Fifth District Concurred with the Only Other Published Decision on the Lease Leaseback Contracts In its decision, the Fifth District explicitly agreed with Los Alamitos on the lease leaseback issue addressed in that case-namely, whether section 17406(a) creates an exception to competitive bidding for both the lease and the leaseback contracts. ( Mod. Opn. 16.) As the COUli is aware, Taxpayer alleged in his First Amended Complaint ("F AC") and argued at the Fifth District, that the exception to competitive bidding in section l7406(a) applies only to one contract in the lease leaseback transactions, the site lease, and not the leaseback contract 4 whereby a school district pays a contractor to sublease back district property with new facilities built and paid for by contractor. (AOB 21-35.) Admittedly, to Taxpayer's disappointment, the Fifth District rejected Taxpayer's argument in this regard, holding that the exception to competitive bidding applied to both contracts, the site lease and leaseback, as did the Fourth District in Los Alamitos. "We agree with the statutory interpretation that the exception to competitive bidding in section 17406( a)( 1) is not limited to site leases. (Los Alamitos, supra, 229 Cal.App.4th 1224, 1229)." (Mod. Opn.16.) This is one of Taxpayer's additional issues discussed below. Notwithstanding the Fifth District's explicit agreement with Los Alamitos District argues in its Petition that the Fifth District is somehow at odds with Los Alamitos. However, District never successfully explains why or how there is a conflict with the Fifth District's decision here. Los Alamitos is silent on the genuine lease, occupancy during tenl1 and contractor financing requirements analyzed by Davis. Two published cases cannot be in conflict if one case does not address the alleged basis of the conflict. District's sole focus on an unpublished opinion of McGee to create a conflict on this front-all the while ignoring, or at least never delving into the Los Alamitos ruling. In light of the above, there is no disagreement in the published decisions of the COUlis of Appeal on the issue of whether the competitive bidding exception applies to both a site and facilities lease. That the McGee opinion may have reached a different conclusion on the need for a genuine lease does not justify review by this Court because McGee is unpublished and this Court has already rejected its analysis relative to genuineness ofleases in City a/Los Angeles v. Offner (1942) 19 Ca1.2d 483,486. 5 2. District Unsuccessfully Tries to Use Legislative History as to a Different Statute to Create "Conflict" in Law District incorrectly contends that legislative history can be utilized to create a conflict of law as against subsequent and unifonn decisions by the Court of Appeal-Hub City, Hanover, Davis-on the same subject for purposes of creating a conflict under California Rules of Court, lUle 8.500 (b)(1). In other words, District does not contend there is a conflict within the courts but rather a conflict as between the courts and prior legislative intent on a separate statute. This is at odds with basic concept of judicial review. "Ultimately, the interpretation of a statute is an exercise of the judicial power the Constitution assigns to the courts." (California Employment Stabilization Com'n v. Payne (1947) 31 Ca1.2d 21 0,213). Indeed, it is the duty of the court, when a question of law is properly presented, to state the true meaning of the statute finally and conclusively. (McClung v. EmploYl1'lent . Development Dept. (2004) 34 Ca1.4th 467 [subject to constitutional constraints, the Legislature may enact legislation, but the judicial branch interprets that legislation].) District overlooks the function of the Legislature is to make laws and the function of the Courts is to interpret laws. Once those laws have been interpreted by the courts legislative history is of no further use. (W Sec. Bank v. Superior Court (1997) 15 Ca1.4th 232,244.) In this case, Government Code 1090' s scope and application to consultants who perfonn the functions, duties and/or roles of officers and employees of government entities has been long and well established in California case law based on the analysis of Hanover and Hub City, and now Davis as well as the prior authorities cited therein. If the Legislature had disagreed with the courts' interpretation of Government Code section 1090's 6 broad application to consultants it would have amended the statute. Prior to and after Hanover and Hub City the Legislature has been making minor modifications and exceptions to Government Code 1090. None of those legislative effOlis has resulted in the wholesale exemption of consultants from Government Code section 1090 as has been suggested by District as evidenced by District's inability to point to a specific applicable exception. The unifonnity of published case law on the matter as set fOlih in Hanover and Hub City, and now Davis, entirely undermines any purpOlied conflict of law as to the interpretation of Government Code section 1090. 3. District Relies on "Employee" Cases Not Addressing Section 1090 District next adopts a different approach, arguing a conflict of law exists because the Courts of Appeal's decisions in Hub City, Hanover and Davis are at odds with separate statutes and cases not dealing with Government Code section 1090. For instance, District contends Reynolds v. Bement (2005) 36 Ca1.4th lO75, Metropolitan Water Dist. v. Superior Court (2004) 32 Ca1.4th 491, and People v. Palma (1995) 40 Cal.App.4th 1559, all undennine and/or conflict with the ruling in Hub City, Hanover, and Davis. None of these cases address Government Code section 1090. Reynolds concerns a claim for recovery of unpaid overtime compensation. (Reynolds, supra 36 Ca1.4th at 1081). Metropolitan Water deals with interpretation of the Public Employees Retirement Law. (Metropolitan Water, supra.) Palma addresses the construction of the Welfare & Institutions Code. (Palma, supra.) In ShOli, these are general employment law cases, and even as to Palma, a criminal case, the primary issue was whether the defendant was an employee or independent contractor for purposes of ascertaining liability under the Welfare & Institutions Code. These cases in no way concern conflicts of interest in public contracting addressed by the Courts of Appeal in Hub City, 7 Hanover and Davis, as well as this Court before them in Stigall, 58 Cal.2d 565. Invoking the California Supreme COUli, the Fifth District in this case stated the following: In Stigall, a civil action, the Supreme Court interpreted the statutory tenns broadly to implement [the] objectives of the conflict of interest statute and did not rely on technical definitions or rules to limit the reach of the statute. Similarly, we conclude that technical definitions of the term "employee" taken from other areas of law should not be used to limit the scope of Govemment Code sectionl090. (Mod. Opn. 39.) Immediately thereafter, the Fifth District expressly concurred with the Hub City and Hanover cOUlis that the tenn "employees" in Govemment Code section 1090 encompasses consultants hired by local govemment. 4. Klistoff Did Not Address Section 1090's Extension to Independent Contractors and Consultants District also makes passing reference to KlistofJ v. Superior Court (2007) 157 Cal.AppAth 469, suggesting this case too creates a conflict in law under Califomia Rules of Court, Rule 8.500(b)(1). However, upon closer inspection, KlistofJ does not directly address whether section 1090 applies to independent contractors or consultants at all. That case tumed on the fact that the defendant entities who were alleged to have received the benefits of the public contract at issue did not receive any govemment funds. (ld. at 481-482.) The public entity had actually paid funds to a separate business in relation to the contract, and the KlistofJ court explained there were no allegations that the recipient of the contract was the alter ego of those defendants who allegedly had a hand in the contract's making. (ld.) Consequently, KlistofJ did not deal with the extension of section 1090 to independent contractors or consultants. Thus, it is ilTelevant to the analysis here. 8 5. Public Contract Code Section 10365.5 Does Not Apply Interestingly Public Contract Code section 10365.5 was never raised by counsel for Petitioners in the Superior COUli or the COUli of Appeal because it does not apply. Public Contract Code section 10365.5 is pali of Part 2 of the Public Contract Code consisting of Public Contract Code sections 10100 through 19102 which applies to contracting by state agencies. School districts, such as Fresno Unified School District, are not covered by Part 2 of the Public Contract Code. Instead, Part 3 of the Public Contract Code applies to school districts, specifically Public Contract Code sections 20105 through 20l18.4. Part 3 of the Public Contract Code is entitled the Local Agency Public ConstlUction Act. Public Contract Code section 20100. Because school district contracts are governed by Pmi 3 of the Public Contract Code rather than Part 2, section 10365.5 in Pmi 2 does not apply to school district contracts. Moreover, Public Contract Code section 10365.5 relied upon by Petitioners is limited by the definition of "constlUction project management" contained in Government Code section 4525( c) which is limited to services "for management and supervision of work." Thus one who has providing consulting services under a prior contract may be awarded a subsequent contract "for management and supervision of work." A subsequent contract for "management and supervision of work" is significantly different than a subsequent contract for the performance of construction work as is the case here. The type of services contemplated by Government Code section 4525 et seq., are "professional services." Government Code section 4526. ConstlUction work is not a professional service. Further, even if the tenn "construction project management" used in Government Code section 4525 et seq., included the performance of the work, which it does not, it would not apply here to local school constlUction work 9 because Govemment Code section 4525(c)'s definition of "construction project management" is expressly limited to "work performed on state construction projects. [emphasis added]." State construction projects are those referenced in PaIi 2 of the Public Contract Code and do not include school districts which are govemed by Part 3 thereof. Additionally, there is no evidence in the record Contractor complied with Government Code section 4529.5's requirements in order to avail itself to Petitioners' alleged exemption to Califomia's conflict of interest prohibitions. Finally, the FAC does not allege Contractor had a conflict based on prior construction management services. Instead, according to the Opinion, the FAC alleges Contractor had a conflict due to its prior contract where "Contractor acted as a consultant and provided Fresno Unified with professional preconstruction services related to the project, which included the development of plans, specifications and other construction documents for the project." (Mod. Opn. 33.) Because Califomia's conflict of interest obligations are strictly construed, Petitioners' attempts to asseli and exception to them based upon Public Contract Code section 10365.5 must be rejected. C. Davis' Interpretation of 17406 in Favor of Taxpayer Was Correct In its Petition, District spends a considerable amount of time criticizing the reasoning of the Fifth District's decision. Criticism of an appellate cOUli' s legal analysis is not grounds for review by the Califomia Supreme COUli per Califomia Rules of Court, rule 8.500(b)(1). Moreover, there is no conflict in the law in Davis as to either the lease leaseback or conflict of interest rulings made in favor of Taxpayer's arguments. As such, Taxpayer submits the Petition should be denied based on the foregoing points raised in this answer alone. 10 Contrary to District's assertions in the Petition, the Fifth District properly adhered to the mle that exceptions to competitive bidding are to be constmed nan"owly. (Marshall v. Pasadena Unified School Dist. (2004) 119 Cal.AppAth 1241,1256). To that end, the Fifth District confined its analysis to the plain language of Education Code section 17406. In so doing, the Fifth District by no means "added" requirements to section 17406 as District contends. District incorrectly argues that the Fifth District's decision is inconsistent with the plain language of Education Code section 17406(a). District, however, misrepresents the plain wording of the statute in the first paragraph of its argument. (Pet. 16-17 .) Under section IV, subsection C of the Petition, District describes section 17 406( a) as reading, "the school district must own the land to be leased to the builder; the instmment by which the property is let to the builder must require the builder constmct a building or buildings on the land for the school district's use ... " (Pet. 16-17 .) (emphasis added) However, the statute actually reads that a school district may let its real property if the lease requires the lessee to constmct a building on the premises "for the use of the school district during the term of the lease ... " (Education Code section 17406(a).) In essence, District argues that the Fifth District violated fundamental mles of statutory constmction in its findings that section 17406 requires: (1) a genuine lease; (2) actual use during the tenll of the lease; and (3) contractor financing of the lease leaseback transaction. District is wrong. 1. Davis Correctly Requires Lease Leaseback Transactions under 17400 et Seq., to Be Genuine and Not Subterfuges to Avoid Other Applicable Statutory Obligations. As conectly explained by the Fifth District, "exceptions to competitive bidding requirements 'should be strictly constmed and restricted in circumstances which tmly satisfy the statutory criteria. '" (Mod. Opn. 19 [citing 11 Marshall, supra 119 Cal.App.4th at 1256.) Thus, in interpreting section 17406(a), the Fifth District was explicit in its adherence to this principle. In its analysis, the Fifth District first addressed whether the lease refen-ed to in section 17406(a) must be genuine, and it concluded the statute indeed requires that. (Mod Opn. 20.) Significantly, District, in its Petition, does not challenge this finding and is thus in complete agreement with Taxpayer and the Fifth District that any lease entered into pursuant to section 17406(a) must be genuine and not a sham. In sum, everyone agrees such leases must be legitimate. Per the Fifth District, "[b lased on the principle that words indicate substance, we conclude the word 'lease' used in section l7406(a)(l)'s phrase 'buildings for the use of the school district during the tenn of the lease' means something more than a document designated by the parties as a lease. Rather, the Legislature chose the term to indicate the substance of the transactions that are eligible for the exception." (Mod. Opn. 18.) All parties to this action concur on this point. 2. Davis Correctly Requires Actual Use During the Term ofthe Lease Leaseback Transaction As to section 17 406( a)' s clear requirement that the premises be used by a school district during the tenn of the lease, District argues such a requirement "finds no suppOli in the plain language of the statute." (Pet. 18.) However, the statute literally states just that, rendering peculiar any argument to the contrary. In its decision, the Fifth District reasoned, with reference to the "nearest-reasonable referent canon," [that m order for a] leaseback an-angement to qualify for the exception to the competitive bidding requirement, there must be a lease tenn during which the school district, as tenant, makes use of the newly built facilities. If, from a substantive point of view, there is no period during which the school district uses the new facilities 12 while leasing them from the construction finn, the anangement does not confonn to the requirements of section 17406 and, therefore, would be subj ect to competitive bidding procedures. (Mod. Opn. 25.) Contrary to District's claim, that conclusion is based on the express language of section 17406 which requires use of the premises by the school district during the tenn of the lease. Here, it is undisputed, and District has explicitly conceded in its appellate briefs and at oral argument before the Fifth District, that it did not use the premises at all during the lease term. (Mod. Opn. 26, fn. 12.) Thus, its failure to comply with the requirements of section 17406 is not in question, and this is especially true since exceptions to competitive bidding must be strictly construed. On a related note, District's argument that the "statute does not specify any particular 'use' a school district must make of the premises" is entirely irrelevant to the analysis because District has conceded there was no use at all during the lease tenn. (Pet. 18.) In light of District's admission that it made no use whatsoever of the premises during the lease tenn (Mod. Opn. 26, fn. 12), as required by the plain language of section 17406, it was unnecessary for the Fifth District to delve into the nature of the pat1icular "use. " a. Education Code Section 17406 Does Not Speak of a Mere "Right" to Use Property and Any Such "Right" Would Be Illusory in Any Event Aware of its admission that it did not use the premises during the tenn of the lease as required by section l7406(a), District pivots to its purported "right" to use the premises during the lease tenn. (Pet. 19.) The statute plainly requires use during the lease period by the school district. It speaks nothing of a mere right to use, and this is consistent with all pat1ies' concunence that section 17406 prohibits sham leases as a basis to qualify for competitive bidding. 13 Still, the argument that District had a "right" to use the premises is without merit since it would have been impossible for District to utilize the premises for its intended purposes while the structures were being built. Indeed, the supposed "right" to use the premises as argued by District would be completely illusory and indicative of a sham lease. Alternatively, to put it more simply, it was unlikely District was going to commence classes while the buildings were being framed or while the buildings lacked a roof. b. Early Vesting of Title Has No Relation to Use During the Lease Term Next, District contends that because section 17406 pell11its title to vest in the school district before the lease tell11 expires, this somehow invalidates or undell11ines any requirement that a school district utilize the premises during the lease tell11. (Pet. 19-20). However, there is nothing inconsistent with the option for title to vest in the school district early and the requirement that the premises be used during the lease tell11 by a school district as tenant. Those two scenarios are entirely consistent on their face, and both can occur in the context of a lease leaseback arrangement. Thus, District invoking the potential early vesting of title as a means to undermine the Fifth District's decision based on the plain language of the statute (regarding use during the lease term) is without merit. c. Duration and Nature of Use Are Irrelevant in the Context of a Genuine Lease In addition, District attempts to obtain review under the guise of needing "guidance" regarding the Fifth District's "new" requirements under section 17406(a). As explained above, the ruling of the Fifth District is based on the explicit, plain language of section 17406 requiring use of the premises by a school district "during the tell11 [of the lease]." No "new" requirements have been imposed. That aside, there is no need for Supreme Court intervention to clarify any supposed requirements regarding duration of the 14 lease or the nature of the use required thereunder.. Those issues are ilTelevant here since District has already conceded there was no use at all during the lease tenn. (Mod. Opn. 26, fn. 12.) The issue of duration and nature of use are oflittle or no concem when section 17406 is properly utilized to effect a genuine lease alTangement, as is required per the Fifth District's decision. District has not challenged that finding and is in agreement that leases under section 17406 must be genuine and not a sham. 3. Davis Correctly Requires Contractor Financing ofthe Lease Leaseback Transaction As noted in its decision" "the Legislature adopted the lease leaseback structure to create a way for school districts to pay for construction over time and avoid the constitutional limitation on debt." (Mod. Opn. 11.) This "allows a school to acquire facilities that it might not be able to pay for using other financing methods. As a result, the lease leaseback method opened up a new source of financing for school construction-namely, private sector funding through the contractor and a third pmiy lending money to the contractor." (Mod.Opn. 12.) The Fifth District went on, "it appears that the primmy purpose for the Legislature's adoption of section 17406(a)(l)'s predecessor in 1957 was to provide a new source of financing for school construction." (Mod. Opn. 13.) "The use of the new source was encouraged by providing an exception to competitive bidding. The exception would have allowed school districts, contractors and lenders to enter into eamest negotiations of the construction and financing arrangements without the concem that the deal would subsequently be derailed by the competitive bidding process." (Mod. Opn. 12-13). Per the Fifth District, "we have not located, and the parties have not cited, any sources indicating the fonnalities inherent in traditional lease leaseback alTangements had any importance to the design or construction 15 aspects of the project." (Mod. Opn. 13.) Thus, the Fifth District has simply pointed out the obvious-that the purpose of sections 17400 et seq., was to provide flexibility to school districts that desired higher quality facilities but did not have the present ability to pay for them. UnfOliunately, the exception to competitive bidding carved out for that very purpose has been hijacked in recent years by what Taxpayer and many others have suspected to be sweethemi deals and cronyism. The Fifth District has merely blown the whistle. Nevertheless, it has done so in a measured, straightforward way-relying on the plain language of 17406, standard definitions of tenlls, and the legislative history of lease leaseback that establishes the purpose of the statute as a financing mechanism, not an end run around competitive bidding as it is now being exploited. D. If Review Were Granted, Which it Should Not Be, this Court Should Also Address the Following Additional Issues 1. If Review Is Granted the Court Should Also Grant Review on the Additional Issue of the Duty of Care Applicable to a Board of Education When Awarding Contracts Paid for with Proposition 39 School Bond Proceeds. As District asserts in its Petition, hundreds of school districts statewide have entered into no bid leaseback contracts on thousands of projects involving hundreds of millions of dollars. (Pet.l.) Finding 4 of the 2009 Yuba County Grand Report dated July 25,2009 is typical of what happens with most school boards: "There is minimal review of lease leaseback contracts by the MJUSD Board. The Board is given a listed contractor on a project by the Facilities Depmiment. The Board does not have the opportunity to review the full range of proposals to ensure equity, fairness and oversight in awarding contracts paid by public bond funds." 16 Likewise the February 22, 2013 Orange County Registrar Article quoted on pages 4 through 8 of Taxpayers Reply to Amicus Curiae Brief of California's Coalition for Adequate School Housing submitted on November 10, 2014 in the Davis appeal smllillarizes the sheer volume of money and influence that is brought to bear on elected school board members and school administrators by CASH members seeking to cuny favor with them for a piece of the billions of dollars of school bond funds obtained via Proposition 39's lower 55% passage threshold. The balance of Taxpayer's Reply to CASH goes into fmiher detail of the evils and mischief that surround and are enable by no bid contracts like the ones at issue here. All of the foregoing beg for this Comi to provide a statement of law on the duty of care applicable to Board of Education members acting as trustees in the expenditure of billions of dollars of taxpayers' Proposition 39 monies. Taxpayer's second cause of action is the perfect vehicle for this purpose. While taxpayer originally cast this cause of action as a breach of fiduciary duty, such denomination was off the mark. The duty owed and pled as ultimately breached-while akin to that of a fiduciary-encompasses a much broader fundamental common law principle: the public office is a public bust. (Trist v. Child (1874) 88 U.S. 441,450 ("the theory of our government is, that all public stations are trusts, and those animated in the discharge of their duties solely by the considerations of right,justice, and the public good. "; see also People v. Harby (1942) 51 Cal.App.2d 759,773 (holding that the "public office is a public trust is a universal truism."); Terry v. Bender (1956) 143 Cal.App.2d 198, 206; Driscoll v. Burlington-Bristol Bridge Co. et al. (1952) 8 N.J. 433, 474-475.) Moreover, a public officer is bound to exercise the powers conferred on them with skill, zeal and diligence. (Noble v. City of Palo Alto (1928) 89 Cal.App. 47, 51. ) This Comi needs to declare District's Board of Education has a duty to 17 act with the utmost good faith, care and diligence in all of their actions, including but not limited to the expenditure of funds for $36.7 million dollar school constmction projects. (See United States v. Thomas (1872) 82 U.S. 337, 342; Nussbaum v. Weeks (1989) 214 Cal.App.3d 1589,1597; citing Hobbs, Wall & Co. v. Moran (1930) 109 Cal.App 316,319.) Moreover, this COUli should give guidance on how that duty would be fulfilled had the School Board members engaging in the actions including, but not limited to, those listed in Taxpayer's Second Cause of Action to wit: after the Division of State Architect approves the plans and specifications for the Project which is the subject of the Lease Leaseback Contracts they inter alia: (1) failed to consider altemative less expensive proposals to perfonn the work contemplated under the approved plans and specifications that were the subject of the Lease Leaseback Contracts; (2) failed to consider any evidence as to whether the price to be paid for the work contemplated under the approved plans and specifications that were the subject of the Lease Leaseback Contracts was reasonable; (3) failed to exercise due diligence to determine whether the price to be paid for the work contemplated under the approved plans and specifications that were the subject of the Lease Leaseback Contracts could be lower; (4) knew or should have known that the price to be paid for the work contemplated under the approved plans and specifications that were the subj ect of the Lease Leaseback Contracts could have been lower; (5) failed to solicit altemative bids to the price quoted by Contractor for work contemplated under the approved plans and specifications that were the subject of the Lease Leaseback Contracts; (6) failed to proceed in a manner that would secure the best price for the work contemplated under the approved plans and specifications that were the subject of the Lease Leaseback Contracts; and/or (7) failed to proceed in a manner required by law as alleged elsewhere in the FAC. (1 AA 12:~34.) 18 Taxpayer acknowledges Boards of Education are vested with great discretion by the Education Code. However, Taxpayer suggests that discretion is limited to issues relating to education rather than the expenditure of taxpayer funds they have been entrusted with by the electorate. Moreover, even the discretion School Boards do have in this regard can not be exercised arbitrarily and capriciously. In this case Taxpayer's allegation that the School Board failed to take any action to ensure the $36.7 million was spend wisely and prudently constitutes and arbitrary and capricious exercise of discretion and should be enough to state a cause of action. A fundamental principle of the common law of busts holds trustees to the standard of conduct of an objectively prudent person. Clark v. Feder Semo and Bard, P.C. (2014) 739 F.3d28, 31 (citing Varity COlp. v. Howe (1996) 516 U.S. 489,496; Fink v. Nat'l Sav. & Trust Co. (1985) 772 F.2d 951, 955; RESTATEMENT (THIRD) OF TRUSTS § 77; see also Bogeli, The Law Of Trusts And Trustees (2014) § 612.) One California court held that a trustee violated her duty of prudence by relying on the valuation of a propeliy where the valuation was provided by only one interested pmiy. (See In re Hamon's Estate (1922) 60 Cal.App. 154, 157.) If the Court grants District's Petition for Review, which it should not, then the Court should also grant review on this additional issue of Taxpayer to provide a current clarification of the law and duties applicable to School Boards in their expenditure of Proposition 39 funds since no such statement of law currently exists in that context. 19 2. If Review Is Granted the Court Should Also Grant Review on the Additional Issue of What The Competitive Bidding Requirements in Education Code 17417 Apply To. This is an important question of law affecting school districts, contractors and taxpayers statewide and was not settled by Los Alamitos or Davis. Moreover, as discussed below, their treatment of the question is not uniform with California Courts' interpretations of statutes and longstanding public policy favoring competitive bidding of contracts funded with taxpayer dollars. The intent of the Legislature in this regard is clearly stated in Public Contract Code 102 which mandates "[t]o encourage competition for public contracts and to aid public officials in the efficient administration of public contracting, to the maximum extent possible, for similar work perfonned for similar agencies, California's public contract law should be uniform." Under Los Alamitos and Davis interpretation of 17417 California's public contract law is not uniforn1 By saying "[t]here would appear to be many ways in which seCtion 17417 would be used, even iflease leaseback anangements are excluded from it" the Los Alamitos opinion at page 1230 causes confusion and actually renders the competitive bidding requirements of 17417 a nullity because there is no other scenario in Article 2 that 17417 applies to other than leasebacks of school district owned property with new facilities constmcted thereon as is the case here. 5 The Davis opinion's analysis likewise offers no clarification of what 17417 applies to and instead adopts Los Alamitos' murky conclusion. Section 17417 only applies to lease of property involving construction because it expressly references 17402 which provides "[b ]efore the governing board of a school district enters into a lease or agreement pursuant to this article, it shall .... have prepared and shall have adopted plans and specifications for the building that have been approved pursuant to Sections 17280 to 17316, inclusive." 20 (Mod.Opn.p.1S-17.) Why would the Legislature exempt leaseback contracts involving school district payment of money to third parties for new facilities constlUcted . on district owned property (which is the way nearly all CUlTent leasebacks have been done according to District and the Coalition for Adequate School Housing ("CASH")) when every other scenario under 17400 to 17429 that involves school district payment of money to a third paIiy requires competitive bidding? Specifically, 17407 (where a district does not own the property to begin with), and 17418 (where a district contracts with a nonprofit public benefit corporation which in tum must use competitive bidding). Moreover, why would the Legislature exempt school constlUction perfollned via leaseback contracts that end concurrent with the completion of constlUction (as is the case here) from competitive bidding on the one hand when on the other hand competitive bidding is required where school constlUction is perfollned under Public Contract Code 20110 to 20118.4? If the Legislature really wanted to allow school districts to hand no bid contracts to whichever contractor they want to (as is suggested by Petitioners and CASH) would it not simply repeal Public Contract Code 20110 to 20118.4 and eliminate the need for the artificial constlUct of a lease leaseback transaction in the first place? If the Legislature really meant for 17406 to be to be a complete exception to the lUle of competitive bidding they would have simply repealed the lUles requiring schools to use competitive bidding in Public Contract Code 20110 to 20118.4. The Legislature did not do that, so there must be something else to 17406 than has been suggested by Petitioners, CASH, Los Alamitos and Davis .. Los Alamitos and Davis both relied on 17406's plain and certain preamble "[n]otwithstanding 17417" to alTive at their conclusion 174l7's 21 requirements of competitive bidding could not apply to the leaseback contracts at issue which were both ones involving property owned by the school district where new facilities had been constlUcted. This conclusion is inconsistent with other California courts that have said "[a]lthough the meaning of a statutory phrase may be plain and celiain if the phrase is considered in isolation, blind adherence to the text of a statutory phrase is improper if its literal interpretation is inconsistent with other provisions of the same statute, defeats the apparent legislative intent and is otherwise in conflict with accepted interpretive canons." (Hatch v. Superior Court (2000) 80 Ca1.AppAth 170,226.) FUliher, both Los Alamitos and Davis rejected Taxpayer's equally plausible alternative interpretation that (1) 17406 only applied to the site lease contract in the lease leaseback transaction and (2) 17417 applied to the leaseback contract in the lease leaseback transaction. In doing so both courts are in conflict with this Court's statutory interpretation lUle stated in Renee J. v. Superior Court (2001) 26 Ca1.4th 738: We must give the provision a reasonable and commonsense interpretation consistent with the apparent purpose and intention of the lawmakers, practical rather than technical in nature, which upon application will result in wise policy rather than mischief or absurdity. Significance, if possible, should be attributed to every word, phrase, sentence and part of an act in pursuance of the legislative purpose, as the various parts of a statutory enactment must be hannonized by considering the particular clause or section in the context of the statutory framework as a whole. The court should take into account matters such as context, the object in view, the evils to be remedied, the history of the times and of legislation upon the same subject, public policy, and contemporaneous constlUction. [citations and internal quotes/ellipsis omitted.]" Id. at 744. California law and public policy favors competitive bidding and narrowly constlUe exceptions thereto. Each section in Education Code section 22 17400 through 17429 where a school district is paying money out to a third party requires competitive bidding. (See Sections 17407 [where a district does not own the propeliy to begin with], 17417 [where a district does own the propeliy to begin with, as is the case here] and 17418 [where a district contracts with a nonprofit public benefit corporation which in tum must use competitive bidding].) Section 17406 must be interpreted in a way that considers the whole Aliicle of which it is a part and gives meaning to each section therein. Los Alamitos and Davis give 17406 an interpretation that is in conflict with the foregoing Review by this COUli is warranted to secure uniformity of decisions going forward and settle this impOliant question oflaw, namely what pOliions of the lease leaseback transaction 17406 and 17417 apply to. Taxpayer's altemate interpretation that 17406 only applies to the site lease agreement (by which a district receives payment) and that 17417 applies to the leaseback agreement (by which a district makes payment) is preferable, consistent with Califomia law and public policy and should therefore be adopted by this COUli. Doing so will, consistent with the goals of Wilcox v. Birtwhistle (1999) 21 Ca1.4th 973,977-978, protect and promote Califomia's public policy favoring competitive bidding and achieve its ostensible objects (see Public Contract Code section 100); avoid the evils associated with non-competitive bidding (as discussed in Exhibits 4,6 A-K and 8-15 to Taxpayer's MJN); harmonize the statutory scheme of which the 17417 is a pati; and make the current process 6 "The select list of contractors employed by MJUSD for its lease leaseback contracting is a closed pool of contractors with little or no competition. This· has resulted in a closed and exclusive list of contractors, subject to favoritism or abuse, noted by the large percentage of contract dollars awarded to two general contractors with previous relationships to personnel in the Facilities Department." (Finding 1 of Yuba County Grand Jury Final RepOli June 252009 at p. 6.) 23 of lease leaseback school construction clear as well as consistent with the contemporaneous administrative construction of the staff, executive officer and general counsel of the Califomia Office of Public School Construction (see SAB Report Exhibit D to FAC, 1 AA 114-129.) Moreover, the Los Alanzitos and Davis interpretations of 17406 exempting the leaseback contract at issue here from 17417' requirements of competitive bidding are in conflict with well established Califomia authority because those interpretations render 17417 a nullity. Section 17406's preamble "[n]otwithstanding 17417" is solely intended to exempt the site lease from competitive bidding which would ordinarily be required to ensure a district receives adequate consideration and avoids a gift of public propeliy when it leases out its propeliy as otherwise required by 17472 and Section 6 of Article XVI of the Califomia Constitution. (See 17406(b).) 17406 contains no express or implied language defining the procedures by which a district will pay money to a third party to leaseback the district's property with its newly constructed facilities. Section 17417 does. Therefore 17417 controls since a "specific provision relating to a paliicular subject will govem a general provision, even though the general provision standing alone would be broad enough to include the subject to which the specific provision relates." (Woods v. Young (1991) 53 Ca1.3d 315,325.) The Attomey General opinion (56 Ops.Atty.Gen. 571 (1973)) upon which Los Alamitos based its interpretation of 17406 was not unifonn with Califomia law because it did not even acknowledge or consider 15712 which at the time of the opinion was the predecessor of 17417. Moreover, the Attomey General acknowledges how incongruous its conclusion was with the sunounding lease leaseback statutes requiring competitive bidding as well as Califomia's long tradition of requiring competitive bidding to determine the 24 amount of public funds to be paid by a public entity for construction projects. (Id., at 580.) The Attorney General expressly states its reservation about its conclusion because "[ c]onsiderations of wisdom, expediency, or policy suggest a contrary conclusion ... " (Id., at 580-581.) Los Alamitos references in its analysis of legislative intent Governor Schwarzenegger's 2004 veto of Assembly Bill 1486. (Id. at 1228-1229.) The role the Governor plays in the legislative process is limited to "the manner expressly authorized by the constitution." (Harbor v. Deukmejian (1987) 43 Cal.3d 1078, 1084.) The Governor does not actually create law; instead, the Governor may merely prevent the creation oflaw. Consequently, a Governor's "veto message" cannot reflect the intent of the Legislature in creating any given statute. "Acceptable sources of legislative history are: legislative cOlmnittee reports, legislative analyst's reports, statements and memorandums of legislators, unpassed bills and other statutes, omissions from bills, model bills and their cOlmnentaries, and public comments." (7 Witkin, Summary of Cal. Law (1 Oth) , Constitutional Law § 125.) Absent from that list are items prepared by the Executive Branch, including the Governor's office. The inclusion of executive documents as legislative history has been rejected by California COUlis. In Joyce v. Ford Motor Co. (2011) 198 Cal.AppAth 1478, the court considered whether enrolled bill reports and Governor's press releases regarding a bill constituted legislative history, such that the documents had some binding authority in the Court's interpretation of a statute. The Joyce cOUli unequivocally rejected this notion. While a reviewing cOUli may be bound to take judicial notice of executive document, including enrolled bill repOlis and Governor's press releases, they do so with the understanding that "enrolled bill reports cannot reflect the intent of the Legislature because they are prepared by the executive branch .... [T]o pennit consideration of enrolled bill reports as cognizable legislative history gives the 25 executive branch an unwalTanted opportunity to detennine the meaning of statutes. That is the proper and exclusive duty of the judicial branch of government." ... [W]e similarly conclude that [a Governor's press release] cannot reflect the intent of the Legislature, and is therefore not cognizable legislative histOly. (Joyce, 198 Ca1.App.4th at 1492-1493, quoting Kal1finan & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Ca1.App.4th 26,42.) Even if it were proper to consider the Governor's veto message, which it is not, that message does not suppOli the Los A lamitos court's interpretation of 17417. The Governor's veto message is ambiguous as to why he vetoed AB 1486. He does not expressly and clearly state what proposed change(s) AB 1486 was making to 17400 to 17429 that caused him to veto the proposed amendments in order to maintain the status quo. Moreover, the veto message could be read to imply Governor Schwarzenegger supports SAB' sand Taxpayer's interpretation that the current lease leaseback statutes 17400 to 17429 require competitive bidding of the leaseback contract. This is because the Governor stated "I am suppOliive of using a competitive process for public works projects ... However, this bill imposes restrictions on lease leaseback contracts that could limit competition." Real competition occurs when all qualified bidders are given an oppOliunity to submit bids. Real competition does not occur when a school district negotiates with only a few or one "prefelTed" bidders. If the Court grants any portion of the Petition for Review it should also grant review of this additional issue to settle is and secure unifonnity of decisions in California. 26 IV. CONCLUSION Grounds for Supreme Court review are not present. District's Petition for Review should be denied. C~~~APC DATED: August 3,2015 By: Kevin R. Carlin Attomeys for Plaintiff/Appellant and Respondent Stephen K. Davis 27 CERTIFICATE OF COMPLIANCE PURSUANT TO CAL. R. CT. 504( d)(l) Pursuant to California Rule of Court 8 .504(d)( 1), and in reliance upon the word count feature of the software used to prepare this document. I certify that the foregoing Answer to Petition for Review contains 8098 words, exclusive of those materials not required to be counted under Rule 8.504(d)(3). DATED: August 3,2015 CARLIN LAW GROUP, APC By: ~~ Kevin R. Carlin Attorneys for Plaintiff/Appellant and Respondent Stephen K. Davis 28 PROOF OF SERVICE STATE OF CALIFORNIA COUNTY OF FRESNO ) ) SS ) I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen (18) years and not a party to the within-entitled action. My business address is 4452 Park Boulevard, Suite 310, San Diego, CA 92116. On August 3,2015, I served the within document( s): ANSWER TO PETITION FOR REVIEW BY FRESNO UNIFIED SCHOOL DISTRICT IIKJI BY MAIL: By placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in the United States mail at San Diego, California, addressed as set forth below. Donald R. Fischbach Steven M. Vartabedian Lynne Thaxter Brown Matthew R. Dildine Dowling Aaron Incorporated 8080 North Palm Avenue, 3rd FI. P.O. Box 28902 Fresno, California 93729 (559) 432-4500 Attorneys for Defendant and Respondent Fresno Unified School District Frank J. Lozoya, Esq. Lozoya & Lozoya 15060 Ventura Blvd., #211 Sherman Oaks, CA 91403 (818) 789-7150 Attorneys for DefendantlRespondent Harris Construction, Co., Inc. Martin A. Hom and Jennifer Cantrell Atkinson, Andelson, Loya, Ruud & Romo 5260 N Palm Ave # 300 Fresno, CA 93704 (559) 225-6700 Attorneys for Defendant and Respondent Fresno Unified School District Ryan Keats Sean M. SeLegue Arnold & Porter LLP Three Embarcadero Center, 10th FI. San Francisco, CA 94111 (415) 471-3370 Attorneys for DefendantlRespondent Harris Construction, Co., Inc. -29- Hon. Donald S. Black Fresno County Superior Court Department 502 11300 Street Fresno, CA 93724 Clerk of the Court Fresno County Superior Court Department 502 1130 0 Street Fresno, CA 93724 Philip J. Henderson Orbach Huff Suarez & Henderson 1901 Harrison St Ste 1630 Oakland, CA 94612 (510) 999-7908 Fred Fenster Greenberg Glusker 1900 Avenue of the Stars, 21 st FI. Los Angeles, CA 90067 (310) 785-6866 Attorneys for California's Coalition for Adequate School Housing: Amicus Curiae for Respondent Attorneys for Beverly Hills Unified School District as Amicus Curiae on behalf of Plaintiff and Appellant James Richard Traber Fagen Friedman & Fulfrost 520 Capitol Mall, Suite 400 Sacramento, CA 95814 (916) 443-0000 Anthony N. Kim Cory J. Briggs Mekaela M. Gladden Briggs Law Corporation 99 East C Street, Suite III Upland, CA 91786 (909) 949-7115 Attorneys for California's Coalition for Adequate School Housing: Amicus Curiae for Respondent Lawrence H. Kay Law Office of Lawrence H. Kay 7801 Folsom Blvd., #101 Sacramento, CA 95826 (916) 381-7868 Attorneys for Construction Employers Association: Amicus Curiae for Respondent Attorneys for Kern County Taxpayers Association as Amicus Curiae on behalf of Plaintiff and Appellant Court of Appeal Fifth Appellate District (Via e-service pursuant to California Rules of Court, Rule 8.212 bye-submission to Court of Appeal, Fifth District) I am readily familiar with the firm's practices of collection and processing of correspondence for mailing. Under that practice, it would be deposited with the United States Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid ifpostal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. -30- I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on August 3, 2015, at San Diego, California. Duane Besse -31-