Oates

Assessment bonds provide a means for private property owners to borrow, and to pay over time for, the costs of public infrastructure benefiting their property. In tandem with assessment bonds, reserve bonds are issued as a means of providing bondholders with a degree of assurance that debt service due on the assessment bonds will be paid in the event of credit difficulties.

Plaintiff Marvin L. Oates, a property owner (but not a bondholder), filed suit against defendants City of Lincoln (City) and the Lincoln Public Financing Authority (Authority), alleging the City and the Authority misused reserve funds he had paid into when they refinanced eight bonds under the Marks-Roos Local Bond Pooling Act of 1985 (Marks-Roos Act). (Gov. Code, § 6584 et seq.) Oates claimed defendants’ actions constituted an unconstitutional taking, and defendants committed constructive fraud by violating their fiduciary duty to him. The trial court granted summary judgment, finding as a matter of law that Oates had no legal interest in the bond issue reserve funds. Oates appeals, contending assessed property owners possess an interest in the reserve fund sufficient to support both a takings and a…