CITY OF ANAHEIM v. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

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Court of Appeal, Fourth District, Division 2, California.

CITY OF ANAHEIM, Plaintiff and Appellant, v. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, Defendant and Respondent.

Civ. 25840.

Decided: June 07, 1982

William P. Hopkins, City Atty., City of Anaheim, and Malcolm E. Slaughter, Deputy City Atty., for plaintiff and appellant. Carl Boronkay, Gen. Counsel, Warren J. Abbott, Asst. Gen. Counsel, Lauren R. Brainard and Setha Schlang, Deputy Gen. Counsel, Los Angeles, for defendant and respondent.

OPINION

The question presented by this appeal is whether The Metropolitan Water District of Southern California (Metropolitan) must bear the costs of relocating a pipeline it maintains in the right of way of a city street in the City of Buena Park in order to make way for a storm drain extension to be constructed in the street by the adjoining City of Anaheim.

Anaheim brought the instant action against Metropolitan to recover expenses of relocating Metropolitan's pipeline in order to permit construction of a portion of Anaheim's storm drain system.   The complaint alleged that Anaheim maintains a storm drain system to drain surface waters from the streets and lands within the city and contiguous areas and intended to install a storm drain for the westerly portion of the city which would extend partially into that portion of Dale Avenue located in the adjoining City of Buena Park.   Metropolitan's pipeline is located in Dale Avenue pursuant to a franchise.   Metropolitan refused to relocate its facilities unless Anaheim paid the expenses.   Anaheim paid the expenses under protest, presented a claim to Metropolitan for damages, and upon rejection of the claim by operation of law, instituted the instant action alleging three theories of recovery:  An implied common law obligation of a franchisee using a public street to pay the costs of relocation to make way for a proper governmental use of the street;  inverse condemnation;  and declaratory relief.

Metropolitan demurred on the ground the complaint failed to state a cause of action under any of the pleaded theories of recovery.   Metropolitan conceded that if its pipeline were located in a city street within Anaheim, Metropolitan would have been responsible for the relocation costs to make way for Anaheim's storm drain under this court's decision in City of Anaheim v. Metropolitan Water Dist. of Southern Cal. (1978) 82 Cal.App.3d 763, 147 Cal.Rptr. 336.   Metropolitan maintained, however, that inasmuch as the conflict in use pertains to a public street outside of the territorial boundaries of the City of Anaheim, the governmental entity whose facilities are first in place should be compensated for relocation costs, citing County of Contra Costa v. Central Contra Costa Sanitary Dist. (1960) 182 Cal.App.2d 176, 5 Cal.Rptr. 783;  Northeast Sacramento etc. Dist. v. Northridge Park etc. Dist. (1966) 247 Cal.App.2d 317, 55 Cal.Rptr. 494;  City of Los Angeles v. The Metropolitan Water Dist. (1981) 115 Cal.App.3d 169, 171 Cal.Rptr. 217.   The court sustained Metropolitan's demurrer without leave to amend and entered an order dismissing the action with prejudice.

Anaheim appeals from the order.   First, it contends that Metropolitan's franchise rights were subject to an implied obligation to assume the cost of relocating its facilities to permit the construction of Anaheim's storm drains.   Secondly, that the court erred in sustaining a demurrer to the declaratory relief causes of action;  and thirdly, that the court abused its discretion in sustaining the demurrer without leave to amend.

I

 Under the common law, a privately owned public utility's franchise rights in a public street are subject to an implied obligation to relocate its facilities at its own expense when such relocation is necessary to make way for a proper governmental use of the street.  (New Orleans Gaslight Co. v. Drainage Com. of N. O. (1905) 197 U.S. 453, 461–462, 25 S.Ct. 471, 473–474, 49 L.Ed. 831, 835.)   California follows the common law rule.  (L. A. County Flood Control Dist. v. Southern Cal. Edison Co. (1958) 51 Cal.2d 331, 334, 333 P.2d 1;  Southern Cal. Gas Co. v. City of L. A. (1958) 50 Cal.2d 713, 329 P.2d 289;  Pacific Tel. & Tel. Co. v. Redevelopment Agency (1972) 75 Cal.App.3d 957, 964–965, 142 Cal.Rptr. 584;  Pacific Tel. & Tel. Co. v. City & County of San Francisco (1961) 197 Cal.App.2d 133, 154, 17 Cal.Rptr. 687.)   The Legislature may grant a utility the right to compensation for relocating its facilities to accommodate a governmental use of the street, but such right is not deemed to have been granted unless the statute specifically so provides.  (Southern Cal. Gas Co. v. City of L. A., supra, 50 Cal.2d 713, 719, 329 P.2d 289;  Pacific Tel. & Tel. Co. v. Redevelopment Agency, supra, 75 Cal.App.3d 957, 964, 965, 142 Cal.Rptr. 584, see East Bay Mun. Utility Dist. v. Richmond Redevelopment Agency (1979) 93 Cal.App.3d 346, 354, 155 Cal.Rptr. 636.)

 Metropolitan has been granted the right to construct, establish and maintain its facilities across or along any public street or highway.   (Metropolitan Water District Act, § 142;  Wat.Code Appen., § 109–142.) 1  Rights so granted are deemed to be franchises;  they do not grant the public utility a property right in the land but confer only limited rights to use the streets to the extent necessary to furnish its services to the public.  (State of California v. Marin Mun. W. Dist. (1941) 17 Cal.2d 699, 703–704, 111 P.2d 651;  East Bay Mun. Utility Dist. v. Richmond Redevelopment Agency, supra, 93 Cal.App.3d 346, 350, 155 Cal.Rptr. 636;  Kachadoorian v. Calwa County Water Dist. (1979) 96 Cal.App.3d 741, 746, 158 Cal.Rptr. 223;  Pacific Tel. & Tel. Co. v. Redevelopment Agency, supra, 75 Cal.App.3d 957, 964–965, 142 Cal.Rptr. 584, see East Bay Municipal Utility Dist. v. County of Contra Costa (1962) 200 Cal.App.2d 477, 479, 19 Cal.Rptr. 506.)

II

Based upon the foregoing principles, Anaheim contends that Metropolitan had a common law obligation to bear the relocation costs to permit the construction of the city's storm drain.   The city argues that under this court's decision in City of Anaheim v. Metropolitan Water Dist. of Southern Cal., supra, 82 Cal.App.3d 763, 147 Cal.Rptr. 336, if the conflict had occurred within the portion of Dale Avenue located in the City of Anaheim, Metropolitan would have been responsible for the relocation expenses.2  Anaheim maintains that the outcome should be no different simply because the competing uses pertain to a portion of Dale Avenue located in the adjoining City of Buena Park.

Metropolitan responds that the common law rule governing privately owned utilities is inapplicable where the competing surface users of the public street right of way are governmental entities.   It contends that in such cases, the entity whose facilities were in place first is entitled to be compensated for relocation necessitated by a later governmental use by another entity.   In support of its position, Metropolitan cites County of Contra Costa v. Central Contra Costa Sanitary Dist., supra, 182 Cal.App.2d 176, 5 Cal.Rptr. 783;  Northeast Sacramento etc. Dist. v. Northridge Park etc. Dist., supra, 247 Cal.App.2d 317, 55 Cal.Rptr. 494;  City of Los Angeles v. Metropolitan Water Dist., supra, 115 Cal.App.3d 169, 171 Cal.Rptr. 217.

In County of Contra Costa v. Central Contra Costa Sanitary Dist., supra, 182 Cal.App.2d 176, 5 Cal.Rptr. 783, a sewer line was constructed in an area shown on a subdivision map as “drainage reserve.”   A county flood control district project required relocation of the sewer line.   The county relocated the facilities on behalf of the flood control district and sought reimbursement from the sanitary district.   The trial court entered judgment in favor of the sanitary district and on appeal the judgment was affirmed.   The reviewing court held that the common law rule pertaining to the obligation of a franchisee to bear relocation costs was inapplicable.   The court noted that the sewer line had been constructed and transferred to the sanitary district before the subdivision map was recorded and before the county and the flood control district acquired any rights through the dedication of the “drainage reserve” shown on the subdivision map.   The reviewing court therefore agreed with the trial judge who stated that the sanitary district's right to maintain its lines was a “species of real property,” that neither the flood control district nor the county board of supervisors acting on its behalf had any right to appropriate or interfere with the property already dedicated to public use without payment of just compensation.   The court concluded that the costs of relocation should be borne by the taxpayers of the flood control district who benefited from the improvement and not by the taxpayers of the county generally or by the taxpayers of the sanitary district.

In Northeast Sacramento etc. Dist. v. Northridge Park etc. Dist., supra, 247 Cal.App.2d 317, 55 Cal.Rptr. 494, the county water district had constructed and maintained its lines in a county road right of way.   The county sanitation district composed of unincorporated territory proposed to construct a sewer line in the same county road requiring relocation of the water district's line.   The trial court decreed that the sanitation district was required to compensate the water district for the relocation expenses and the reviewing court agreed.   The court found no “priority” in the governmental function performed by one entity over the other.   The court noted that the function performed by one was not perceptibly different from that performed by the other.   The court reasoned that in such circumstances it would be unfair for the taxpayers of the district whose facilities were first in place to bear the cost of the work necessitated by the improvements constructed for the benefit of the taxpayers of the second district and concluded that it was “both equitable and sound law” that the entity whose facilities were first in place should be compensated for the relocation costs.

City of Los Angeles v. Metropolitan Water Dist., supra, 115 Cal.App.3d 169, 171 Cal.Rptr. 217, was a declaratory relief action to determine what entity must bear the costs of physically determining the location of Metropolitan's underground facilities located in the city streets of Los Angeles, a procedure known as “pot holing.”   The court held that Metropolitan would be required to pay the costs of “pot holing” necessitated by any public works projects conducted by the city in or under its streets.   However, with respect to projects conducted by the city on behalf of another governmental agency (such as a flood control district) or by another governmental agency on its own behalf, responsibility for the “pot holing” costs must be determined on the basis of priority in time.

The foregoing cases are not dispositive of the issue before us.   They all involved the allocation of relocation costs as between districts exercising limited governmental powers, i.e., water district, sanitation district, flood control district, etc.   None of the cases involved a special district, such as Metropolitan, as against a city.

In State of California v. Marin Mun. W. Dist., supra, 17 Cal.2d 699, 111 P.2d 651, the Supreme Court held that the water district could be required to relocate its facilities located in a public street at its own expense to permit reconstruction and incorporation of the street into the state highway system.   The court held that the right of the traveling public to the use and maintenance of the road was superior to the subsurface rights of the water district.   Similarly, in East Bay Municipal Utility Dist. v. County of Contra Costa, 200 Cal.App.2d 477, 19 Cal.Rptr. 506, the water district was held responsible for the cost of relocating its facilities in a county highway road to permit construction of a county road improvement project.   The court reasoned that the county was engaging in a “governmental use of the street” when it undertook reconstruction of the road whereas the utility district was “operating in a proprietary capacity.”   The court therefore held that the district was required to relocate its facilities at its own expense.

Metropolitan would distinguish the Marin Municipal Water Dist. and the County of Contra Costa cases on the ground that in those cases the state and county were operating within their respective territorial jurisdictions whereas in the case at bench the City of Anaheim is operating outside its municipal boundaries.   In Southern Cal. Gas Co. v. City of L. A., supra, 50 Cal.2d 713, 329 P.2d 289, the Supreme Court rejected a similar argument where the City of Los Angeles constructed a sewer line in unincorporated territory requiring the relocation of the gas company's mains.   The high court held that the people have a primary right to the public use of streets wherever located and that a franchise exercised by a city to construct and maintain sewer lines in a public street outside of its boundaries was not subordinate to a prior franchise granted to a public utility.

 Metropolitan concedes that Anaheim could require it to relocate water mains in public streets within the city at its own expense to make way for the construction of a city storm drain.   Metropolitan's right to use public streets is no greater outside the boundaries of the City of Anaheim than within and the power of the City of Anaheim to install and maintain a storm drain system to protect properties, streets, and inhabitants of the city empowers it to extend its storm drain system beyond its boundaries even without express statutory authority.3  (Southern Cal. Gas Co. v. City of L. A., supra, 50 Cal.2d 713, 718, 329 P.2d 289;  Harden v. Superior Court (1955) 44 Cal.2d 630, 639, 284 P.2d 9.)   We therefore perceive no valid reason why a distinction should be drawn between relocations within the city and outside the city boundaries.   Unless we were to hold that the principle enunciated in City of Anaheim v. Metropolitan Water Dist. of Southern Cal., supra, 82 Cal.App.3d 763, 147 Cal.Rptr. 336, should be limited to street improvement or reconstruction projects, an interpretation which has not been accorded to that case (see City of Los Angeles v. Metropolitan Water Dist., supra, 115 Cal.App.3d 169, 173, 175, 171 Cal.Rptr. 217), the same principle should govern allocation of relocation costs where the city public works project extends beyond city boundaries.

For the foregoing reasons we conclude that Anaheim's complaint stated a valid cause of action for recovery of the costs of relocating Metropolitan's facilities and that the order dismissing the action should be reversed with directions to overrule Metropolitan's general demurrer.

FOOTNOTES

FOOTNOTE.  

1.   Water Code Appendix section 109–142 provides:“A district may construct and maintain works and establish and maintain facilities across or along any public street or highway and in, upon, or over any vacant public lands which are the property of the State of California, and may construct works and establish and maintain facilities across any stream of water or watercourse, except that the district shall promptly restore any such street or highway to its former state of usefulness as nearly as may be, and shall not use the same in such manner as to completely or unnecessarily impair the usefulness thereof.”Water Code Appendix section 109–146 provides:“In the use of streets the district shall be subject to the reasonable rules and regulations of the county or city in which such streets lie, concerning excavations and the refilling of excavations, the relaying of pavements and the protection of the public during periods of construction, except that the district shall not be required to pay any license or permit fees or file any bonds.   The district may be required to pay reasonable inspection fees.”

2.   In City of Anaheim v. Metropolitan Water Dist. of Southern Cal., supra, 82 Cal.App.3d 763, 147 Cal.Rptr. 336, relocation of Metropolitan Water District's facilities became necessary when the city constructed an undercrossing under a railroad right of way for the street in which the facilities were located.

3.   Section 10101 of the Public Utilities Code provides:“There is granted to every municipal corporation of the State the right to construct, operate, and maintain water and gas pipes, mains and conduits, electric light and power lines, telephone and telegraph lines, sewers and sewer mains, all with the necessary appurtenances, across, along, in, under, over, or upon any road, street, alley, avenue, or highway, and across, under, or over any railway, canal, ditch, or flume which the route of such works intersects, crosses, or runs along, in such manner as to afford security for life and property.”

THE COURT: * FN* Before MORRIS, P. J., and KAUFMAN, J.