Los Alamitos Unified School Dist. v. Howard Contracting, Inc

In Los Alamitos Unified School Dist. v. Howard Contracting, Inc. (2014) 229 Cal.App.4th 1222, a contractor filed an action invalidating a lease-leaseback agreement between another contractor and a school district. The court concluded that section 17406 "exempts school districts from obtaining competitive bids when entering . . . 'lease-leaseback' agreements to improve school property." (Los Alamitos, at p. 1224.) The court explained that "more than 40 years ago, the California Attorney General concluded the language of the statute is plain, unambiguous, and explicit, and does not impose bid requirements on school districts. We agree, and nothing has occurred in the interim that would change our conclusion." (Ibid.) Los Alamitos relied principally on the plain language of section 17406. (Los Alamitos, supra, 229 Cal.App.4th at p. 1226.) "Section 17406, subdivision (a) expressly provides that notwithstanding the bidding process established by Education Code section 17417, the District was permitted to engage in the type of transaction at issue here 'without advertising for bids.'" (Ibid.) The Los Alamitos court rejected the argument that the Public Contract Code required competitive bidding. (Los Alamitos, supra, 229 Cal.App.4th at p. 1227.) The court also rejected the contention that section 17406 applies only to the site lease in which the district leases the property to the contractor. (Los Alamitos, at p. 1229.) The court rejected the contractor's argument that section 17417 would be rendered a nullity if section 17406 applied to both the site lease and the sublease. (Los Alamitos, at p. 1230.) The court also rejected the argument that "because a more specific statute must take precedence over a general statute, Education Code section 17417 takes precedence over Education Code section 17406." (Id. at p. 1229.) Again relying on the plain language of the statute, the court explained that the term "notwithstanding" in section 17406 indicated that that statute provides an exception to section 17417. (Los Alamitos, at pp. 1229-1230.)