Cal. Dep't of Fin. v. City of Merced

This is an unusual "Great Dissolution" case (see City of Brentwood v. Campbell (2015) 237 Cal.App.4th 488 , 491, 188 Cal.Rptr.3d 88 ) that turns on basic civil procedure questions. 1 The City of Merced (City) participated in the normal due diligence review (DDR) process to review what, if any, monies had to be disgorged when its former RDA was statutorily dissolved. The City did not initiate a judicial challenge to the amounts the Department of Finance (DOF) ultimately found had to be repaid and the reasons therefor. The DOF soon filed what amounted to a collection action, seeking mandamus compelling the City to transfer certain money to the RDA's successor agency, and compelling that agency to transfer money to the relevant county's auditor-controller. The City answered with a general denial and boilerplate affirmative defenses. The City then tried to challenge the merits of the DDR determinations, and later filed a belated cross-petition seeking to challenge the merits.

The trial court struck the cross-complaint, declined to consider the City's challenges to the merits of the disputed amounts, and ordered a writ compelling the monetary transfers. The City timely filed this…