Wednesday, September 23, 2009
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C.A. Rejects Attempt to Recover Court Security Costs
By Sherri M. Okamoto, Staff Writer
Alameda County cannot collect the unpaid balance of a bill for $18.2 million in court security service costs from its superior court, the First District Court of Appeal has ruled.
Explaining that the lack of an enforceable written contract for the costs was fatal to the county’s claims of breach, Div. Three on Monday in an unpublished opinion affirmed the San Francisco Superior Court’s grant of summary judgment against the county.
A 1999 memorandum of understanding between the county and the court regarding the county’s provision of various services stated that any direct services provided by individual county departments and the rate charged would be agreed upon in writing before the services were provided.
The MOU further provided that the court and the Sheriff’s Department would develop a separate memorandum of understanding describing the service levels the sheriff would provide the court, and the costs of those services, by July 1999.
Although the county and the court failed to reach an agreement regarding the contemplated MOU prescribing the sheriff’s service levels for several years, the department continued to provide court security services and the court paid the amounts it was billed by the county.
During the 2002-2003 fiscal year, the court budgeted $15.1 million for security services. After the deadline for the court to submit a budget-change request to the Administrative Office of the Courts—and after the governor signed off on the budget—the county granted Sheriff’s Department personnel two pay raises comprising a 14.8 percent salary increase.
In light of the increased personnel costs, the court then informed the Sheriff’s Department that it was “extremely doubtful” the court could sustain its then-current level of security services and complained about the department’s failure to give advanced notice of its pay negotiations.
Even though the Sheriff’s Department implemented changes that reduced its security costs by over $4 million by the end of the fiscal year, its total bill was $18.3 million. The court paid the $15.1 million it had budgeted for security costs and rejected the county’s claim for the additional $3.2 million.
The county filed a petition for writ of mandate and a complaint for breach of implied and express contract against the court. Both the Judicial Council and Administrative Office of the Courts were also named as defendants, but they successfully demurred to the complaint.
Based on undisputed facts, the trial court found that the MOU committing the parties to reach an agreement on future services was not an enforceable contract and that the Sheriff’s Department had assumed the risk of providing services with no binding contractual commitment to pay for the increased costs.
Writing for the appellate court, Justice Peter Siggins agreed, concluding that the MOU between the Superior Court and the Sheriff’s Department did not encompass an enforceable agreement to pay for security.
The justice said that the MOU provision requiring security charges to “be based on actual expenditures” did not mean that costs and actual expenditures were necessarily one and the same. The reference to “actual expenditures” could be “readily harmonized with the multiple provisions requiring a further agreement, when interpreted in its usual sense, as providing a starting point or ‘fundamental ingredient’ for cost negotiations,” he wrote.
Siggins also rejected the county’s argument that the cost term could be supplied by reference to the court’s alleged historical practice of paying the county’s security bills in full since parol evidence is not admissible to contradict the express terms of an agreement and the MOU unambiguously required the parties to enter a successive MOU identifying the cost and level of security services in advance of their provision to the court.
As for the county’s breach of implied contract claim, Siggins explained that it was precluded by the Government Code’s requirement that any agreement for court security services be in writing, and that the principle of equitable estoppel could not contravene such a statutory limitation.
The justice additionally opined that absent a contractual agreement, express or implied, requiring the court to pay for the sheriff’s salary increases, there was no basis for an alleged violation of the implied covenant of good faith and fair dealing.
Justices Stuart R. Pollak and Martin Jenkins joined Siggins in his decision.
The case is County of Alameda v. Superior Court, A121590.
Copyright 2009, Metropolitan News Company