Hugo Argumedo Verified Quo Warranto Complaint

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OLIVO & ASSOCIATES EDUARDO OLIVO (State Bar No. 150363) STEPHEN FRIEDER (State Bar No. 274061)

13181 Crossroads Parkway North, Suite 220 Industry, California 917 46 Telephone:(562) 697-2440 Fax: (562) 697-2443

Attorneys for Plaintiff, City of Commerce

KAMALA D. HARRIS Attorney General of California MARC J. NOLAN Lead Deputy Attorney General ANY AM. BINSACCA Deputy Attorney General State Bar No. 189613

455 Golden Gate Ave., Ste. 11000 San Francisco, California 94102 Telephone:(415) 703-5713 Fax: (415) 703-1234 E-mail: anya. binsacca@doj .ca.gov

Attorneys for the Attorney General of the State of California

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

THE PEOPLE OF THE STATE OF ~ CALIFORNIA ex rei. CITY OF Case No. COMMERCE

) ) ) VERIFIED COMPLAINT IN QUO

Plaintiff, ) WARRANTO )

vs. ~ [Code of Civil Procedure§ 803; California

) Code of Regulations Title 11]

HUGO ALEXANDER ARGUMEDO, ) ) [Leave to Sue and Attorney General Opinion ) 15-501 attached as Exhibit A]

Defendant. ) ) )

VERIFIED COMPLAINT IN QUO WARRANTO

The People of the State of California, on the relation of the City of Commerce, herein

2 complain as follows:

3 1. This action is brought pursuant to the Code of Civil Procedure§ 803. On May 5,

4 2015, the City of Commerce filed an application with the California Attorney General, pursuant to

5 the provisions of California Code of Civil Procedure§§ 803, et. seq. and California Code of

6 Regulations, Title 11, for leave to sue in quo warranto to determine whether Defendant, Hugo

7 Alexander Argumedo, is qualified pursuant to Cal. Const. article VII, § 8 and Government Code

8 §§ 1021, 3000, 1770(h), and 1770.2, to hold the public office of Commerce City Councilmember.

9 On October 27,2015, the California Attorney General granted the City of Commerce leave to sue

10 in quo warranto.

11 THEPARTffiS

12 2. At all times referenced herein, Plaintiff, the City of Commerce, California ("the

13 City"), was a municipal corporation duly formed and existing pursuant to the laws of the State of

14 California. The City is the Relator in this action.

15 3. At all pertinent times referenced herein, Defendant, Hugo Alexander Argumedo

16 ("Argumedo") was an individual residing within the City of Commerce and was holding and

17 exercising the authority of the public office of Commerce City Councilmember.

18 FACTUAL ALLEGATIONS

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A.

4.

Argomedo's Election to the Commerce City Council- Before His

Criminal Conviction

Argumedo was first elected as a Commerce City Councilmember on November 5,

22 1996, to fill an unexpired term. He was re-elected on March 11, 1997. He was removed from

23 office as a result of a recall election on May 26, 1998. Argumedo was then re-elected to the City

24 Council in March of2005.

25 5. Argumedo was a City Councilmember when the Council terminated attorney

26 Francisco Leal ("Leal") as City Attorney in or around April of2005. The vote to terminate was 3

27 to 0, with Argumedo making the motion to terminate. Leal later filed a lawsuit against the City

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relating to his termination. Argumedo's misconduct relating to that litigation led to his criminal

2 conviction, as discussed below.

3 B. The City's Complaint to the District Attorney Against Argomedo

4 6. On May 1, 2008, the City filed a complaint with the Public Integrity Division of the

5 Los Angeles County District Attorney's Office ("City's Complaint"). The City's Complaint

6 alleged the following facts set forth in paragraphs 7 through 19 herein.

7 7. The City alleged that Argumedo had committed perjury and illegally revealed

8 confidential closed-session and attorney-client information in a declaration filed in support of Leal

9 in a lawsuit filed against him by the City. The City advised that: "The City Council has

10 determined that this disclosure was improper and contrary to the best interest of the citizens of the

11 City generally, and in the context of the then-pending litigation" and urged the District Attorney to

12 investigate the matters set forth in the Complaint and to take all appropriate steps in response, to

13 maintain the integrity of the office. The City informed the District Attorney that it believed that

14 Argumedo and Leal had engaged in conduct that violated several laws and potentially constituted

15 criminal conduct.

16 8. The City was involved in two lawsuits with Leal. The first Leal matter (LASC case

17 number BC339482) involved claims by Leal for attorneys' fees allegedly owed and counter-claims

18 by the City for violations of Government Code § 1090 and malpractice. The City and Leal

19 mediated the matter in the time leading up to trial. During the mediation, Leal made an offer to pay

20 the City $20,000 to settle the case (Leal also agreed to forgo $120,000 in fees he claimed were

21 owed to him by the City).

22 9. On September 22, 2006, the Council met in closed session to discuss the settlement

23 offer. City Attorney Eduardo Olivo was present with then-Mayor Nancy Ramos and the Council,

24 including Argumedo. During this closed session, then-Mayor Ramos and City Attorney Olivo

25 presented and explained the proposed settlement offer whereby Leal would pay the City an

26 additional $20,000. After discussing the settlement offer and alternatives at length, the Council

27 ultimately rejected the $20,000 proposal and authorized a counter-offer of $70,000.

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10. The City Clerk took confidential Minutes of the closed session portion of the

2 September 22, 2006, meeting. The confidential Minutes confirmed the following: the Council

3 discussed the $20,000 settlement proposal at great length and in great detail; City Attorney Olivo

4 and then-Mayor Ramos reported on the multiple settlement conferences; the Council discussed the

5 upsides and downsides of going to trial; and the Council debated various settlement proposals and

6 whether or not Leal's conduct should be reported to the criminal authorities. Significantly,

7 Argumedo was noted to be involved in and to have contributed to the conversation about the

8 $20,000 proposal at several instances. Argumedo even made the motion to counter the $20,000

9 proposal with a higher figure.

IO 11. The parties settled the first action on November 2, 2006 for $70,000, but Leal

II eventually refused to pay this amount based on his contention that Mayor Ramos and City

I2 Attorney Olivo failed to advise the Council of the settlement offer of$20,000. Leal's contention

I3 was surprising because (1) the discussions in closed session were strictly confidential attorney-

I4 client communications and (2) the allegations were clearly false. The City was then forced to file

I5 a second action (LASC Case No. BC 367248) to enforce the written settlement agreement.

I6 12. During the second Leal matter, the City filed a Motion for Summary Adjudication

I7 regarding Leal's breach of the settlement agreement. In response, Leal sought to depose certain

I8 elected officials from the City. The City objected to the depositions to the extent they were

I9 designed to inquire into the confidential closed sessions of the City Council. Abandoning this

20 tactic, Leal instead obtained a declaration from Councilmember Argumedo (the "Argumedo

2I Declaration") and used it in support of his opposition to the City's motion.

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13. The Argumedo Declaration stated, in part, that:

5. After we retained Olivo, I met with him to discuss the approximately $120,000 in pending legal invoices owed to the Leal firm, and even though we did not have a basis to deny payment, we agreed to withhold those paynients.

7. In September 2006, I was informed by Olivo that the case was assigned to a new judge for settlement negotiations. After a series of negotiations, the Council agreed to settle the case for $70,000 to be paid by Leal and his law firm to the City of Commerce.

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8. It is my understanding the [sic] Leal refused to pay on the $70,000 on the basis that in the final settlement discussions before the judge, Mayor Nancy Ramos and

2 Olivo agreed to present and support a settlement amount of $20,000 to be paid by Leal to the City of Commerce.

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9. In fact, Mayor Ramos never presented this settlement amount for consideration by the Council. Nor did she, nor Olivo, inform the Council that the $20,000 proposed settlement amount was recommended by the Judge and that they had agreed to present it and support it before the Council.

14. The City first received the Argumedo Declaration around November 19, 2007, in

8 opposition to the City's pending Motion for Summary Adjudication. At the Council meeting on

9 December 4, 2007, the City Council, including Argumedo, addressed the Argumedo Declaration in

10 closed session. The City Council reviewed the confidential Minutes of the relevant closed-session

II meeting of September 22, 2006, when the Council discussed Leal's settlement offer. The Council

I2 then compared the language of the Argumedo Declaration to the September 22, 2006, closed-

I3 session Minutes.

I4 15. The Minutes of the December 4, 2007, closed session revealed the inaccuracies of

I5 the Argumedo Declaration; namely, Argumedo's false statement that neither Mayor Ramos nor the

I6 City Attorney presented the settlement offer from Leal. During the December 2007 meeting, the

I7 Council discussed the misunderstanding or misstatements made in the Argumedo Declaration and

I8 encouraged Argumedo to withdraw his declaration or reconsider his testimony. Notwithstanding

I9 the demonstrated inconsistencies between the Minutes of the September 22, 2006, meeting and the

20 Argumedo Declaration, Argumedo refused to correct his testimony and stated that he was

2I "standing by [his] statement."

22 16. Eventually, the Court heard the City's Motion for Summary Adjudication in the

23 second Leal matter. The Court's ruling was to deny Summary Adjudication. The Court found a

24 triable issue of material fact, apparently as to the defense of fraud in the inducement, which was

25 supported by the Argumedo Declaration: "the Declaration of Argumedo reflects that there's a

26 triable issue of fact on the motion for Summary Judgment Issue Number 1." Hence, the Court

27 denied the City's motion, relying on the Argumedo Declaration, which contained indisputably

28 false information pertaining to confidential closed-session discussions.

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17. The City questioned Argumedo's motivation for executing the false Argumedo

2 Declaration. The City noted that around the time Argumedo had submitted his declaration, Leal

3 had stated to a business person in the City that he had made sure that Argumedo had received

4 financial assistance for his recent election campaign. Whatever Argumedo 's purpose, there was

5 no legitimate reason for him to directly contradict the City's interests in favor of Leal.

6 Nevertheless, the City contended that he acted adversely to its interests and substantially harmed

7 the City as a result. Had the City prevailed on its Motion for Summary Adjudication, the potential

8 recovery exceeded $300,000. After Argumedo refused to withdraw or revise the false Argumedo

9 Declaration, the parties settled and the City recovered only $175,000.

10 18. Additional facts suggested that Leal attempted to protect Argumedo from having to

11 explain his actions under oath. At the conclusion of mediation for the second Leal matter on

12 February 20, 2008, but prior to payment of the settlement amount, counsel for the City indicated

13 that he would proceed with the deposition of Argumedo noticed for March 4. Leal delayed

14 making payment of the agreed upon amount. Nevertheless, at the last hour, on March 3, the day

15 before Councilmember Argumedo's deposition, Leal's legal partner, Arturo Fierro, personally

16 drove the settlement check for $175,000 from Los Angeles to Orange County. The City alleged

17 that Leal sought to prevent the deposition of Argumedo in order to avoid the revelation of

18 malfeasance and criminal conduct.

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19. The City complained that Argumedo had revealed closed-session and attorney-

client information and that he had committed perjury. The City complained that these violations

resulted in a less favorable determination of the Second Leal matter for the City. The City also

alleged that the Argumedo Declaration forced the City to litigate the Second Leal matter further

than necessary and compromised settlement negotiations more than necessary.

C. The District Attorney Responded to the City's Complaint by Filing a Criminal Complaint Against Argomedo

20. The District Attorney conducted an investigation into the City's Complaint

27 allegations. The District Attorney's Summary Report summarized the facts, most of which were

28 first set forth in the City's Complaint, as follows:

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The case was opened on the allegation that Hugo Argumedo disclosed confidential information from a closed City Council session held on September 22, 2006, in violation of Government Code section 54963. It was further alleged that Argumedo committed petjury, in violation of Penal Code § 118, by signing a sworn affidavit submitted to the court in a lawsuit between the City of Commerce and former City Attorney Francisco Leal. Leal filed a lawsuit against the City of Commerce for unpaid legal fees. The City of Commerce counter sued Leal for Conflict of Interest (GC § 1090). A settlement was reached in which Leal agreed to pay the City of Commerce $70,000. Leal failed to pay and the City of Commerce initiated another lawsuit.

My investigation reveals that City of Commerce Council Member Hugo Argomedo knowingly and willfully submitted a false declaration to court, signed under penalty of perjury, in violation of Penal Code§ 118. The declaration was relied upon by Judge Mary Ann Murphy in Department 25 of the Los Angeles Superior Court, in denying a motion for summary judgment filed by the City of Commerce. Hugo Argumedo's declaration, signed under penalty of perjury, stated that a $20,000 proposed settlement amount was never presented to the City Council. Argumedo declared that he would have voted in favor of the $20,000 settlement. My investigation revealed that the $20,000 proposed settlement was presented and discussed in the closed session of City Council on September 22, 2006. Additionally, in another closed session of City Council on December 4, 2007, Hugo Argumedo was presented with the option to correct his declaration. Argumedo declined.

My investigation and/or subsequent conclusion that Argumedo's declaration submitted to court was false is based upon:

• Obtaining and review of a certified copy of"Declaration ofHugo Argumedo in Support of Defendants' Opposition to Plaintiffs' Motion for Summary Adjudication," court case BC367248, dated and court file stamped November 16, 2007 (see attached copy).

• Obtaining and review of additional documents from court cases BC339482 and BC367248.

• Review of Commerce closed session City Council meeting minutes, dated September 22, 2006 and December 4, 2007.

• Obtaining and review of various documents pertaining to prior attempts to recall Hugo Argumedo.

• Interviews/meetings with the following people:

• City of Commerce City Attorney Eduardo Olivo

• City of Commerce Mayor Pro Tern Tina Baca Del Rio

• Former City of Commerce Council Member Rosalina Lopez

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• City of Commerce Council Member Hugo Argumedo

2 • Judge Mary Ann Murphy.

3 21. Based on the results of its investigation, on December 14, 2010, the District

4 Attorney filed a criminal complaint which charged Argumedo with having committed a felony

5 when he signed and submitted a false declaration in the pending civil case involving the City of

6 Commerce, LASC Case No. BC367248 (Leal v. City of Commerce).

7 22. On December 20, 2010, the District Attorney amended the Criminal Complaint

8 against Argumedo to allege a violation of Penal Code§ 148(a) (1). Los Angeles Superior Court,

9 Case No. BA378873.

IO 23. Argumedo then pled guilty to the misdemeanor count instead of the perjury count.

II The Court then ordered that Argumedo be placed on three years of summary probation with the

I2 following terms and conditions:

I3 • He was ordered to resign from Commerce City Council;

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• He was ordered to not hold any public office during the entire three years of probation;

• He was ordered to complete the entire three years of probation;

• He waived all appellate and statute of limitation rights;

• He was ordered to obey all laws, rules, regulations, instructions, and orders of the court; and

• He was ordered to pay standard fees and conditions of misdemeanor probation.

D. Argomedo's Election to the Commerce City Council on March 3, 2015-After His Conviction

24. On December 21, 2010, Argumedo abruptly resigned from the City Council during

23 a public meeting. He never explained his motivation for submitting the false declaration testimony

24 against the City or what he had received, or expected to receive, from Leal in exchange for the

25 false testimony. The City Council did not take any further action at that time to address any of the

26 damages that it may have incurred as a result of Argumedo's conduct. The fact that he was no

27 longer in a positon of public trust was good enough at that time.

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VERJFIED COMPLAINT IN QUO WARRANTO

25. On December 1, 2014, Argumedo submitted nomination papers for his candidacy

2 for election to the Commerce City Council. On March 3, 2015, the City of Commerce voters re-

3 elected Argumedo to the City Council. It is unknown whether some or all of the voters were

4 aware of, or remembered, Argumedo's criminal conviction involving malfeasance in office and a

5 violation of his official duties as a City Councilmember.

6 CAUSE OF ACTION

7 (Declaratory Relief Against Defendant Hugo A. Argumedo)

8 26. Plaintiff incorporates and re-alleges paragraphs 1 through 25 above as though fully

9 set forth herein.

10 27. The California Constitution sets forth the basic conditions under which a person

11 may be disqualified from public office and required to relinquish his or her position because of

12 misconduct. Cal. Const., art. VII, § 8, subdivision (b) states that: "[l]aws shall be made to exclude

13 persons convicted of bribery, perjury, forgery, malfeasance in office, or other high crimes from

14 office or serving on juries .... " (Emphasis added.)

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28. The pertinent legislation implementing Cal. Const. art. VII, § 8(b) is Government

Code § § 1021, 3000, 1770, and 1770.2. Section 1021 provides that: "A person is disqualified

from holding any office upon conviction of designated crimes as specified in the Constitution and

laws of the State." Section 3000 similarly provides that: "An officer forfeits his office upon

conviction of designated crimes as specified in the Constitution and laws of the State."

Government Code § 1770 more specifically provides that:

An office becomes vacant on the happening of any of the following events before the expiration of the term:

*** (h) His or her conviction of a felony or any offense involving a violation of his or her official duties. An officer shall be deemed to have been convicted under this subdivision when trial court judgment is entered. For purposes of this subdivision, 'trial court judgment' means a judgment by the trial court either sentencing the officer or otherwise upholding and implementing the plea, verdict, or finding." (Emphasis added.)

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VERJFIED COMPLAINT IN QUO WARRANTO

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29. Government Code § 1770.2 also provides that one convicted of a crime due to

malfeasance in office or a violation of his official duties is disqualified from holding office:

Upon the entry of a plea of guilty, the entry of a plea of nolo contendere, or the rendering of a verdict of a guilty . . . the conviction of which would invoke the provisions of Section 1021, subdivision (h) of Section 1770, or Section 3000, the person found guilty shall not assume the office for which the person is otherwise qualified or shall be suspended immediately from the office the person then holds. During the time of inability to assume an office or of suspension from office, the person shall not be entitled to receive the emoluments of the office, including, but not limited to, the exercise of the powers of the office, the rights to be seated in the office, and the compensation, including benefits, prescribed for the office ... " (Emphasis added.)

30. The office of Commerce City Councilmember is a public office that is considered a

11 public trust created in and for the benefit ofthe people. Faithful execution of the public trust is

12 central to the official duties of a city councilmember. As a member of the Commerce City

13 Council, Argumedo was at all times a trustee of the public welfare and had a duty to discharge his

14 responsibilities with honesty and fidelity. He also had a duty to maintain the confidentiality of

15 closed session and attorney-client communications.

16 31. In December of 2010, the District Attorney charged Argumedo with having

17 committed felony peijury. The City had filed a motion for summary adjudication against an

18 opposing party (Leal) in a lawsuit involving the City. The City filed the motion in an effort to

19 collect substantial monies it believed were owed by Leal to the City. In order to defeat the City's

20 efforts, Leal obtained a false declaration from Argumedo that was based on confidential closed

21 session meeting communications. Based on Argumedo's false declaration, the Los Angeles

22 Superior Court sided with Leal and denied the City's motion -- Argumedo succeeded in helping

23 Leal to defraud the Court to the detriment of the City. The basis for the felony peijury charge

24 against Argumedo was that: he knowingly defrauded the Court by way of the false declaration

25 about confidential closed-session and attorney-client communications; he provided the false

26 declaration to the opposing party (Leal) in a litigation matter filed by the City; and the judge in

27 that matter relied on the false declaration to deny the City's Motion for Summary Adjudication.

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Argumedo negotiated a plea deal that resulted in his conviction of a violation of Penal Code §

2 148(a) (1), a misdemeanor. Nevertheless, the factual basis for the conviction was the same.

3 32. The City is entitled to a declaration of the respective rights of the City and

4 Argumedo. The City contends that Argumedo breached his duties as a City Councilmember when

5 he revealed confidential closed session meeting information without the authority of the City

6 Council and provided the false declaration to Leal (an opposing party in ligation against the City)

7 in order to defeat the City's efforts to collect monies owed to the City. The City further contends

8 that Argumedo's criminal conviction for violation of Penal Code§ 148 (a) involved the breach of

9 these duties and, therefore, involved his malfeasance in office and a violation of his official duties

10 as a Commerce City Councilmember. Consequently, the City contends that, pursuant to California

11 Constitution, Article VII,§ 8, and Government Code§§ 1021, 3000, 1770(h), and 1770.2,

12 Argumedo was disqualified from holding office after his criminal conviction in December of

13 2010; that he was not and is not qualified to hold the office of Commerce City Council after his

14 conviction; and that he is currently unlawfully holding and exercising the authority of such public

15 office. If Argumedo is disqualified from holding the public office of Commerce City

16 Councilmember, he should not be allowed to participate in confidential City Council closed

17 session meeting discussions involving sensitive personnel matters, strategy in litigation matters

18 involving the City, real property negotiations, and other confidential matters. He should not be

19 entitled to receive the emoluments of the office of City Councilmember, including, but not limited

20 to, the exercise of the powers of the office, the rights to be seated in the office, and the

21 compensation, including benefits, prescribed for the office.

22 33. Argumedo disputes the City's interpretation and believes that, in spite of his

23 criminal conviction, he has a right to hold the office of Commerce City Councilmember. Thus, an

24 actual controversy exists that requires judicial resolution.

25 WHEREFORE, the People of the State of California, on the relation of the City of

26 Commerce, pray for the following relief:

27 1. For judgment determining that Hugo Argumedo is unlawfully holding the office of

28 City Councilmember for the City of Commerce and that he be excluded from such office;

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2. For judgment determining that Hugo Alexander Argumedo is permanently

2 disqualified from holding the position of City Councilmember in the City of Commerce;

3 3. For any and all actual, consequential, and incidental damages according to proof,

4 including but not limited to damages that have been or may be suffered by the City in attempting

5 to have this Court determine that Hugo Alexander Argumedo is unlawfully holding the office of

6 City Council for the City of Commerce;

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4. For attorneys ' fees pursuant to California Code of Civil Procedure § 1021.5 or

otherwise;

5. For costs of suit herein incuned pursuant to California Code of Civil Procedure §

809; and

6. For such costs and further relief as the Court deems just and proper.

Respectfully submitted,

OLIVO & ASSOCIATES

Dated: November _b_, 2015 By:

Dated: November __1_, 2015

EDUARDO OLIVO

STEPHEN FRIEDER

Attorneys for Plaintiff

Approved for filing pursuant to Code of Civil Procedure sections 803 et seq.

KAMALA D. HARRIS

Attorney General of California MARC J. NOLAN

Lead Deputy Attorney General ANY AM. BINSACCA

Deputy Attorney General

By 9=~ ANY AM. INSACCA

Deputy Attorney General Attorneys for the Attorney General of the State of California

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3 STATE OF CALIFORNIA,

4 COUNTY OF LOS ANGELES

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VERIFICATION:

6 I, Tina Baca Del Rio, am the Mayor Pro Tern for the Plaintiff in the above-entitled

7 proceeding. I served on the Commerce City Council at all pertinent times herein. I have read the

8 foregoing VERIFIED COMPLAINT IN QUO WARRANTO and know the contents thereof. The

9 same is true of my own knowledge except as to those matters which are therein alleged on

10 information and belief, and as to those matters, I believe it to be true.

11 I declare under the penalty of perjury under the laws of the State of California that the

12 foregoing is true and correct.

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14 Dated: November .£_, 2015

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EXHIBIT A

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KAMALA D. HARRIS Attorney General of California MARCJ. NOLAN Lead Deputy Attorney General ANY AM. BINSACCA Deputy Attorney General State Bar No. 189613

455 Golden Gate Ave., Ste. 11000 San Francisco, CA 94102 Telephone: (415) 703-5713 . Fax: (415) 703-1234 E-mail: anya.binsacca@doj .ca.gov

Attorneys for the Attorney General ofthe State ofCalifornia

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

CITY OF COMMERCE, Case No: -------Plaintiff, LEAVE TO SUE

v.

17 HUGO ALEXANDER ARGUMEDO

18 Defendant.

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20 For the reasons set forth in Attorney General's Opinion No. 15-501 (a copy of which is

21 attached hereto), Leave to Sue is hereby granted to Relator-Plaintiff (Plaintiff) CITY OF

22 COMMERCE, and to Plaintiff's attorneys, Eduardo Olivo and Stephen Frieder, to file the original

23 Verified Complaint in Quo Warranto and this Leave to Sue. Plaintiff may use the name ofTHE

24 PEOPLE OF THE STATE OF CALIFORNIA ex rel. CITY OF COMMERCE as plaintiff in this

25 proceeding. No amended complaint or substantive pleading shall be filed unless it has been

26 approved by the Attorney General. At any time, the Attorney General may either dismiss or

27 assume the management of this action. Upon any adverse judgment, approval of the Attorney

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Leave To Sue 1

General must be obtained before Plaintiff may file a notice of appeal. Copies of all documents

2 filed in this action by any party must be served on the Attorney General.

3 This Leave to Sue is granted upon the condition that neither the PEOPLE OF THE STATE

4 OF CALIFORNIA, nor the Attorney General, shall be liable for any damages, costs, charges, or

5 counsel fees in the proceeding. (Code Civ. Proc., § 810.) In this regard, this Leave to Sue has

6 been issued only upon Plaintiffs acknowledgement and agreement that, without limitation, any

7 judgment for damages, costs, charges, or fees that may be recovered against Plaintiff, and/or any

8 associated costs and expenses incurred in this action, will be borne and paid by Plaintiff.

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Dated: November q , 2015

Dated: November _L_, 2015

Leave to Sue 15-501

Respectfully Submitted,

KAMALA D. HARRIS

Attorney General of California MARC J. NOLAN

Lead Supervising Deputy Attorney General ANY A M. BIN SACCA

Dep~utyAttomey Gene;~

By: . ANYA M. SACCA

Deputy Attorney General Attorneys for the Attorney General ofthe State of California

EDUARDO OLIVO

STEPHEN FRIEDER

OLIVO & ASSOCIATES

By:/? ~hc::::5%-EDUARDO OLIVO

Attorneys for Plaintiff

Leave To Sue 2

TO BE PUBLISHED IN THE OFFICIAL REPORTS

OFFICE OF THE ATTORNEY GENERAL State of California

OPINION

of

KAMALA D. HARRIS Attorney General

KAMALA D. HARRIS Attorney General

ANY A M. BINSACCA Deputy Attorney General

No. 15-501

October 27, 2015

Proposed relator the CITY OF COMMERCE has requested leave to sue proposed defendant HUGO ARGUMEDO in quo warranto to oust him from the public office of city council member on the ground that his previous conviction for obstruction of justice constitutes "malfeasance in office," and therefore precludes him from serving as a city council member.

CONCLUSION

Whether proposed defendant Argumedo's conviction for obstruction of justice constitutes "malfeasance in office," and therefore precludes him from serving as a city council member, presents substantial questions of law and fact warranting judicial resolution, and allowing the action to proceed would serve the public interest. Therefore, leave to sue in quo warranto is GRANTED.

1 15-501

ANALYSIS

Proposed defendant Argumedo currently sits on the city council for proposed relator the City of Commerce, but the question of his legal eligibility to serve in that capacity stems from Argumedo's conduct during an earlier term on the Commerce city council. 1 The parties do not dispute the basic underlying facts of the incidents at issue, which we briefly summarize below.

While Argumedo was serving on the city council in 2005, the council terminated the city's contract with then-City Attorney Francisco Leal. In response, Leal sued the city, claiming it owed him attorney's fees. The city counter-sued, alleging legal malpractice and violations of Government Code section 1090.2

On September 22, 2006, the city council met in a closed session to discuss negotiations regarding the lawsuits. The confidential minutes of that meeting reflect that the council discussed a settlement offer from Leal, under which Leal would pay the city $20,000. On Argumedo's motion, the city council voted to make a counter-offer requesting Leal pay $60,000 to $70,000, based on the city's incurred attorney's fees and costs. The case settled in November 2006, with Leal agreeing to pay the city $70,000. Leal failed to pay that amount, however, contending that the settlement agreement was void because the city council had never been advised of his previous $20,000 settlement offer.

The city filed smt m March 2007 to enforce the settlement agreement. In opposition to the city's motion for summary adjudication, Leal filed a declaration, signed by Argumedo under penalty of perjury, which stated that Leal's $20,000 settlement offer was never presented to the city council, and that Argumedo would have voted in favor of that offer had it been presented.3 The superior court denied the city's motion for summary adjudication, finding that Argumedo's declaration created a triable issue of fact.

1 Argumedo was first elected to the city council in 1996, and again several times thereafter.

2 This section provides that "[m]embers of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members."

3 In a closed-session meeting on December 4, 2007, at which Argumedo was present, the city council reviewed the minutes of the September 22, 2006, council meeting, which disclosed that the $20,000 settlement offer from Leal had in fact been presented and considered. Argumedo declined to change or withdraw his declaration, however.

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Ultimately, on March 3, 2008, the city's enforcement action settled, with Leal agreeing to pay the city $175,000.

In December 2010, the Los Angeles County District Attorney charged Argumedo with felony perjury. 4 The criminal complaint alleged that Argumedo had knowingly submitted a false declaration to the superior court which stated that the $20,000 settlement offer had not been presented to the city council. The district attorney later amended the complaint to add a misdemeanor charge of obstruction of justice, i.e., obstructing a public official (the judge) in the discharge of her duty. 5 On December 20, 2010, Argumedo pleaded guilty to the misdemeanor obstruction of justice charge. The plea agreement required, among other things, that Argumedo resign from the city council and not run for or hold any public office for three years.

Argumedo was again elected to the Commerce city council in 2015. The city contends here, however, that Argumedo is disqualified from serving in this public office based on his previous conviction for obstruction of justice, and now seeks leave to sue in quo warranto to have the issue judicially determined. For the reasons discussed below, we grant the city's application for leave to sue.

Nature of and Criteria for Quo Warranto

Code of Civil Procedure section 803 provides, "An action may be brought by the attorney-general, in the name of the people of this state, upon [her] own information, or upon a complaint of a private party, against any person who usurps, intrudes into, or unlawfully holds or exercises any public office, civil or military, or any franchise, or against any corporation, either de jure or de facto, which usurps, intrudes into, or unlawfully holds or exercises any franchise, within this state."6 Thus, such an actioncommonly referred to as "quo warranto"-is the "appropriate remedy to test the right of a person to hold public office."7

4 Pen. Code,§ 118, subd. (a). 5 Pen. Code, § 148, subd. (a)(l) ("Every person who willfully resists, delays, or

obstructs any public officer, ... in the discharge or attempt to discharge any duty of his or her office or employment, when no other punishment is prescribed, shall be punished by a fine not exceeding one thousand dollars ($1 ,000), or by imprisonment in a county jail not to exceed one year, or by both that fine and imprisonment").

6 Code Civ. Proc., § 803. 7 76 Ops.Cal.Atty.Gen. 157, 165 (1993); Rando v. Harris (2014) 228 Cal.App.4th

868, 875.

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Where the action is based on the complaint of a private party, the Attorney General acts as a gatekeeper to the filing of a quo warranto action; a party must obtain the Attorney General's permission, or "leave to sue," before filing such an action in superior court. 8 In evaluating whether to grant leave to sue, we do not endeavor to resolve the merits of the controversy, but rather "we decide whether the application presents substantial issues of fact or law that warrant judicial resolution, and whether granting the application will serve the public interest. "9

There Are Substantial Issues of Law and Fact as to Whether Argomedo's Conviction for Obstruction of Justice Disqualifies Him from Serving as a City Council Member

Article VII, section 8 of the California Constitution (section 8) directs that, "Laws shall be made to exclude persons convicted of bribery, perju7c, forgery, malfeasance in office, or other high crimes from office or serving on juries." 0 Section 8 contemplates legislative action to give it effect, and the Legislature enacted several statutes accordingly. Most relevant to our inquiry here is Government Code section 1021, which provides, "A person is disqualified from holding any office upon conviction of designated crimes as specified in the Constitution and laws of the State." 11

The city contends that Government Code section 1021 bars Argumedo from holding the office of city council member 12 because his conviction for obstruction of justice amounts to malfeasance in office within the meaning of section 8. Argumedo makes two arguments in opposition: (1) his conviction does not amount to malfeasance in office within the meaning of section 8; and (2) section 8 and Government Code section 1021 apply only to a current term of office rather than operating as a permanent disqualification. We address those arguments in turn.

1. Did Argomedo commit "malfeasance in office"?

Argumedo pleaded guilty to obstruction of justice under Penal Code section 148. Based on the criminal complaint and the district attorney's documentation, the factual basis for this conviction was that Argumedo provided the superior court with a declaration falsely attesting that the city council had not been presented with Leal's

8 Nicolopulos v. City of Lawndale (2001) 91 Cal.App.4th 1221, 1228-1229. 9 95 Ops.Cal.Atty.Gen. 50, 51 (2012). 10 Cal. Const., art. VII, § 8, subd. (b). 11 Gov. Code, § 1021. 12 A city council member is a city officer. (Gov. Code,§ 56025.)

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$20,000 settlement offer, which created a triable issue of fact, causing the superior court judge to deny, erroneously, the city's motion for summary adjudication. Does this conviction, and the conduct on which it is based, amount to malfeasance in office within the meaning of section 8?

Malfeasance in office is not an offense enumerated in the Penal Code. Rather, . section 8 appears to use "malfeasance in office," as well as "other high crimes," as catchall phrases to encompass a variety of offenses. To determine the meaning of malfeasance in office, we apply the rules of constitutional interpretation.

"The principles of constitutional interpretation are similar to those governing statutory construction. In interpreting a constitution's provision, our paramount task is to ascertain the intent of those who enacted it. To determine that intent, we look first to the language of the constitutional text, giving the words their ordinary meaning. If the language is clear, there is no need for construction." 13

The ordinary meaning of a word can be informed by dictionary definitions. 14

Dictionaries consistently define malfeasance as "[a] wrongful, unlawful, or dishonest act; esp., wrongdoing or misconduct by a public official"15 or ''wrongdoing or misconduct esp. by a public officia1."16 The Constitution then adds to this the requirement that the malfeasance be committed "in office." We believe the ordinary meaning of that phrase is that the act of malfeasance be related to the actor's occupation of a public office.

Given this framework, we find there to be substantial questions of law and fact whether Argumedo 's conviction for obstruction of justice amounts to malfeasance in office that warrant judicial determination. In the course of this determination, a court can inquire into both the evidentiary basis supporting the facts at issue and whether the legal elements of Argumedo's conviction satisfy the constitutional prohibition. For example, a court could evaluate whether the facts support fmdings that Argumedo disclosed the contents of a closed-session city council meeting without the council's authorization; 17

13 Thompson v. Department of Corrections (2001) 25 Ca1.4th 117, 122, internal citations and quotation marks omitted.

14 Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1122. 15 Black's Law Diet. (lOth ed. 2014) p. 1100, col. 2. 16 Merriam-Webster's Collegiate Dictionary (lOth ed. 1999) p. 704, col. 2. 17 Gov. Code, § 54963. The court could also consider whether Argumedo qualified

for an exception to this provision, such as "[ e ]xpressing an opinion concerning the propriety or legality of actions taken ... in closed session .... " (Gov. Code, § 54963,

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violated the city's attorney-client privilege without authorization; or misled a judge so that she erroneously denied the city's motion for summary adjudication, which in tum subjected the city to continued and unnecessary litigation. The court could also determine the legal questions whether Argumedo's acts constituted malfeasance and whether those acts were intrinsically related to Argumedo's position as a city council member. As we previously observed when evaluating whether certain acts constituted a violation of official duties, "We do not have here an offense that involves purely 'private' conduct." 18 Argumedo provided a declaration in litigation between the city and its former attorney, purporting to provide information that he had access to exclusively based on his status as a city council member. Thus, we believe the question whether Argumedo' s conviction constitutes malfeasance in office within the meaning of article VII, section 8 of the California Constitution presents substantial issues of law and fact that warrant judicial resolution.

2. Is Argomedo's exclusion from holding public office permanent?

Argumedo also maintains that section 8 and its enabling legislation apply only to a conviction suffered during a current term of office, rather than imposing a lifetime ban on holding office. Section 8 specifies that "Laws shall be made to exclude persons convicted" of various crimes from serving in office. 19 What here is the meaning of "exclude"?

Exclude is defined as "to prevent or restrict the entrance of," or "to bar from participation, consideration, or inclusion."20 The plain meaning of "exclude ... from office," then, would be to prevent a person from assuming an office or to bar the person's consideration for office. We see no ambiguity in this constitutional language, nor any implication that the exclusion is temporary. Additionally, the full text of section 8, subdivision (b) is: "Laws shall be made to exclude persons convicted of bribery, perjury, forgery, malfeasance in office, or other high crimes from office or serving on juries."21

Certainly the exclusion from juries is permanent, rather than limited to a jury an individual might be sitting on when convicted. It would be a strained and unusual construction to intend one exclusion to be permanent and the other temporary without so specifying.

subd. (e)(2).) 18 75 Ops.Cal.Atty.Gen. 64, 69 (1992). 19 Cal. Const., art. VII, § 8, subd. (b). 20 ~erriam-Webster's Collegiate Dictionary (lOth ed. 1999) p. 404, col. 2. 21 Cal. Const., art. VII, § 8, subd. (b), italics added.

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Argumedo fails to address this constitutional language, and focuses instead on the statutory language, but this is of no moment as the same result obtains. Government Code section 1021 provides, "A person is disqualified from holding any office upon conviction of' the crimes designated in section 8. In ascertaining the meaning of "disqualified," we turn to well-established rules of statutory construction.

The "first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, [we] must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. "22 If the statutory language is clear, we "follow its plain meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend."23 On the other hand, where ambiguity exists, "consideration should be given to the consequences that will flow from a particular interpretation. "24

"Disaualify'' means "[t]he act of making ineligible; the fact or condition of being ineligible,"2 or "to deprive of the required qualities, properties, or conditions; make unfit."26 These definitions do not connote a fleeting condition, but rather a status of ineligibility or unfitness. Additionally, a permanent disqualification from office is a longstanding and common collateral consequence of a conviction. 27 Nevertheless, we acknowledge that a potential ambiguity exists given that in several statutes the Legislature has used the phrase "forever disqualified" with reference to disqualifications from office, 28 but has not done so here.

22 Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387 (Dyna-Med).

23 Los Angeles Unified School Dist. v. Garcia (2013) 58 Cal.4th 175, 186, internal quotation marks and citations omitted.

24 Dyna-Med, supra, 43 Cal.3d at p. 1387. 25 Black's Law Diet. (7th ed. 2000) p. 383, col. 1. 26 Merriam-Webster's Collegiate Dictionary (lOth ed. 1999) p. 336, col. 1. 27 The Collateral Consequences of a Criminal Conviction (Oct. 1970) 23 Vand. L.

Rev. 929, 987 ("[m]ost states have constitutional and statutory provisions disqualifying persons convicted of certain crimes from holding public office"); id. at p. 993 (noting that New Hampshire is the only state to have adopted the Uniform Act on the Status of Convicted Persons, which provides that a felon regains the right to hold public office at discharge); id. at p. 1000 ("[i]in the absence of a pardon, the offender, even though rehabilitated, will be unable to hold public office in most states").

28 See Gov. Code, § 1097 (person prohibited from making or being interested in contracts who willfully does so "is forever disqualified from holding any office in this

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Attempting to resolve this ambiguity in his favor, Argumedo points to two other statutes that implement section 8. Government Code section 1770 directs that a public office becomes vacant upon an officer's "conviction of a felony or of any offense involving a violation of his or her official duties."29 And Government Code section 3000 provides that "[a ]n officer forfeits his office upon conviction of designated crimes as specified in the Constitution and laws of the State."30 Argumedo contends that the disqualification set out in section 1021 refers only to the current term of office because it must be read as operating simultaneously with the vacancy in section 1770 and the forfeiture in section 3000. In support, Argumedo cites Helena Rubenstein International v. Younger (1977) 71 Cal.App.3d 406 (Rubenstein). There, the court noted that Government Code sections 1021, 1770, and 3000 must be read together and harmonized, concluding that the three consequences they define-disqualification, vacancy, and forfeiture-necessarily occur simultaneously.31

We think Rubenstein inapposite. The "sole substantive issue presented" in Rubenstein was whether a sitting Lieutenant Governor "was 'convicted' within the meaning of the applicable California constitutional provision (former art. XX, § 11 [321)

and relevant implementing statutes for the purpose of exclusion from holding public office upon the rendition of the jury verdict, ... , or the judgment, .... "33 Given that the Lieutenant Governor was in office upon his conviction, there could be no other result than that he was disqualified from office, forfeited his office, and vacated his office simultaneously. The only question was whether those events were triggered by the jury's verdict or the trial court's judgment on sentencing, and the appellate court did not

state"); Pen. Code, § 88 ("Every Member of the Legislature, and every member of a legislative body of a city, county, city and county, school district, or other special district convicted of any crime defined in this title [Of Crimes Against the Legislative Power], in addition to the punishment prescribed, forfeits his or her office and is forever disqualified from holding any office in this state or a political subdivision thereof'). But we note that in at least one other place, the Legislature has expressly imposed only a temporary ban based on certain convictions. (Gov. Code, § 1021.5 [imposing five-year ban on public employment based on certain convictions].)

29 Gov. Code, § 1770, subd. (h). 30 Gov. Code, § 3000. 31 Rubenstein, supra, 71 Cal.App.3d at p. 421. 32 Cal. Const., art. XX, § 11 was the predecessor to section 8, and was identical to it in

all respects relevant to this opinion. (Rubenstein, supra, 71 Cal.App.3d at p. 412, fn. 6.) 33 Rubenstein, supra, 71 Cal.App.3d at p. 411. The court held that the "conviction"

occurs only upon the rendition of judgment. Ibid.

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consider whether the Lieutenant Governor was forever disqualified from office. Cases cannot provide authority on issues not considered. 34

More relevant, we believe, is Lubin v. Wilson (1991) 232 Cal.App.3d 1422 (Lubin). There, Paul Carpenter served as a member of the State Board of Equalization beginning in 1987. In September 1990, Carpenter was convicted of federal racketeering, extortion, and conspiracy based on events that occurred when he was a state senator, before he joined the Board of Equalization. In November 1990, Carpenter was reelected to the Board of Equalization. The Secretary of State did not allow Carpenter to file his oath of office in January 1991, and Carpenter-along with several voters-sought mandate to compel his installation on the Board of Equalization. 35

The court rejected various challenges to the statutory scheme embodied in Government Code sections 1021, 1770, and 3000, including under the First Amendment and the ex post facto clause. At no time did the court express concern that the conviction involved conduct in a former office, or that the conviction occurred before Carpenter was elected or attempted to assume his seat. 36 Unlike in Rubenstein where the question involved a currently sitting office-holder, in Lubin the court actually barred Carpenter from assuming office based on a conviction suffered before the new term. Thus, although not directly on point, we fmd Lubin supports our view that a court may find that the disqualification codified in Government Code section 1021 is permanent.

In addition, viewing the statutory scheme as a whole, 37 we see that Government Code sections 1021 and 3000 have existed in their current forms since 1943,38 when they were enacted as part of a bill that "assemble[ d), codifie[d], and consolidate[d] the law relating to the organization, operation and maintenance of a system of government for the State and its local units."39 Given that Government Code section 3000 provides that an officer forfeits an office upon a conviction enumerated in section 8, Government Code

34 In reMarriage of Cornejo (1996) 13 Cal.4th 381, 388. 35 Lubin, supra, 232 Cal.App.3d at p. 1426. 36 E.g., id. at p. 1427 (rejecting contention that Government Code section 1770 is

ambiguous and noting, "The fact the charges stemmed from activities during Carpenter's senate term does not cloud the statute's applicability").

37 Curle v. Superior Court (200 1) 24 Cal. 4th 1057, 1063 ("we consider portions of a statute in the context of the entire statute and the statutory scheme of which it is a part, giving significance to every word, phrase, sentence, and part of an act in pursuance of the legislative purpose").

38 Stats. 1943, ch. 134, § 1021, p. 954; Stats. 1943, ch. 134, § 3000, p. 976. 39 Legis. Counsel, Rep. on Sen. Bill No. 958 (1943 Reg. Sess.) p. 1.

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section 1021 must mean something different. And we presume that the different meaning is its plain meaning: upon conviction of a crime enumerated in section 8, not only does an officer forfeit his or her current office, but the officer is also disqualified from future office holding.

We are not persuaded by Argumedo' s assertion that we must read the disqualification imposed by Government Code section 1021 as applying only to a currently held office in order to avoid what he characterizes as an absurd result-that one who obtains a reversal of conviction on appeal is nevertheless forever barred from public office. First, of course, Argumedo's own conviction has not been appealed, much less reversed. In any event, athough the hypothetical result Argumedo posits may be harsh, it is not absurd, but rather intended. Government Code section 1770.1 provides:

"The disqualification from holding office upon conviction, as provided in Section 1 021, or the forfeiture of office upon conviction, as provided in subdivision (h) of Section 1770 and Section 3000, is neither stayed by the initiation of an appeal from the conviction, nor set aside by the successful prosecuting of an appeal from the conviction by the person suffering the conviction. "40

This language expresses the Legislature's "intent to preclude convicted individuals from holding public office from the moment of entry of 'trial court judgment,' regardless of a later successful appeal."41 Thus, while a lifetime ban on holding office may be severe, "[t]he statutory scheme advances the compelling interest for honesty, integrity and confidence of the public in government, which is greater than the convicted person's interest in the office. "42

Allowing the Action to Proceed Would Serve the Public Interest

As our analysis reveals, there are substantial legal and factual questions regarding Argumedo' s eligibility to serve on the Commerce city council in light of the obstruction of justice conviction at issue here. We additionally conclude that allowing this action to proceed "would serve the overall public interest in ensuring 'the integrity of public office

40 Gov. Code, § 1770.1. 41 Lubin, supra, 232 Cal.App.3d at p. 1429. 42 Ibid. We are also not swayed by Argumedo's contention that the term of his plea

agreement, which prevented him from serving in office for only three years, entitles him to hold office now, without regard to other laws. A plea agreement cannot supersede constitutional and statutory prohibitions on holding office.

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and in the qualifications of their officials. "'43 Ordinarily we view the need for judicial resolution of substantial questions of law or fact as sufficient public interest to grant leave to proceed in quo warranto. 44 There is no reason to depart from that general rule here. Both the City of Commerce and the public have an interest in judicial determination of Argumedo's eligibility for continued service as a city council member. Accordingly, the leave for application to sue in quo warranto is GRANTED.

*****

43 97 Ops.Cal.Atty.Gen. 12, 19 (2014), quoting 95 Ops.Cal.Atty.Gen. 43,49 (2012). 44 95 Ops.Cal.Atty.Gen., supra, at p. 49.

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Hugo Argumedo Verified Quo Warranto Complaint

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