City of San Marcos v. California Highway Commission (60 Cal. App. 3d 383, 1976)

Opinion

SIMS, J.

This is an appeal from a judgment which ordered that a peremptory writ of mandate issue ordering the respondents below (the California Highway Commission and Department of Transportation, the director of the department and its attorney) to grant an allocation to the City of San Marcos from fiscal year 1974-1975 funds in the State of California Grade Separation Fund in the amount of $1,462,209 for the construction of a grade separation crossing.

The matter came before the trial court on the city’s petition for writ of mandate, and the demurrer and answer filed by the respondents. After hearing oral argument and taking testimony the court ordered the matter submitted. Because of the exigency of the situation, as is reviewed below, the court on June 30, 1975, signed and filed its “Ruling Re Demurrer, Intended Decision, Proposed Findings of Fact and Conclusions of Law Re Petition For Writ of Mandate” and signed, filed and entered its “Judgment Granting Peremptory Writ of Mandate” from which this appeal is taken. A “Peremptory Writ of Mandate” was issued. On appeal the respondents below contend that the court erred in overruling the demurrer interposed in the trial court, and that the judgment is not supported by substantial evidence. The arguments made under those general headings, and other particular points urged against the judgment may be condensed into the following contentions: (1) that the matter is moot because the court erred in entering judgment on June 30, 1975, and no effective judgment for an allocation can be entered subsequent to that date; (2) that the city’s petition is barred by laches; (3) the court erred in concluding that it was necessary to comply with the provisions of the Administrative Procedure Act in adopting regulations governing the review procedure by the department, particularly the requirement of a deadline for the receipt of an application for an allocation; (4) that the court erred in concluding that the application of the deadline (if it was otherwise valid) to the city’s application was an abuse of discretion, was arbitrary because it conflicted with the legislative intent, and was unreasonable because of the protracted period prescribed for departmental review; (5) that the court erred in concluding that there was a sufficiency of compliance by the city with the statutory requirements for an allocation; (6) that the Legislature conferred upon the department the sole discretion to determine the manner in which an allocation should be made, and the court erred in attempting to control that discretion by writ of mandamus; and (7) that the court erred in finding that no other applicant, particularly an applicant with higher priority, was prejudiced by the order to make the allocation to the city.

As outlined below, we find that the foregoing contentions are without merit. The judgment of the trial court must be affirmed.

1

Section 632 of the Code of Civil Procedure provided and provides in pertinent part: “ ... In superior courts, upon such trial, the court shall announce its intended decision. Within the time after such announcement permitted by rules of the Judicial Council, any party appearing at the trial may request findings. Unless findings are requested, the court shall not be required to make written findings and conclusions ...”

Subdivisions (a) and (b) of rule 232, California Rules of Court supplement the code provision, insofar as is material here, as follows: “(a) Upon the trial of a question of fact by the court, the court shall announce its intended decision by an oral statement, entered in the minutes, or by a written statement filed with the clerk. Unless such announcement is made in open court in the presence of all parties who appeared at the trial, the clerk shall forthwith mail to all parties who appeared at the trial a copy of the minute entry or written statement of intended decision, together with a copy of any memorandum of decision filed by the court and shall execute and file a certificate of such mailing. [H] The announcement of intended decision shall not constitute a judgment and shall not be binding on the court ... [11] The announcement of intended decision may state whether written findings of fact and conclusions of law, if requested, shall be prepared by the court or by a designated party. -

“(b) A request for findings of fact and conclusions of law shall be served and filed within 10 days after oral announcement of intended decision in open court or, if mailing of the announcement of intended decision is required, within 10 days after such mailing .... ”

It further may be noted that even if findings are not requested a proposed judgment must be prepared and served so that objections may be made to it. (Rule 232(h).) Subdivision (i) reads: “The court may, by written order, extend any of the times prescribed herein and at any time prior to the entry of judgment, whether or not a signed judgment is filed, it may, for good cause shown and upon such terms as may be just, excuse a noncompliance with the time limits prescribed for doing any act required by this rule.”

Respondents point out that the court failed to comply with the foregoing procedure. Its “Ruling Re Demurrer, Intended Decision, Proposed Findings Of Fact And Conclusions Of Law Re Petition For Writ of Mandate” was filed on June 30, 1975. It concluded, “Counsel for petitioner to prepare a Writ of Mandate in accordance with the ruling of the court, and counsel for petitioner and respondents to submit any objections, modifications, additions to the above proposed findings of fact and conclusions of law in accordance with Rule 232 of the California Rules of Court.” On the same day the court signed, filed and entered a judgment and issued a peremptory writ of mandate.

In Hadley v. Superior Court (1972) 29 Cal.App.3d 389 [105 Cal.Rptr. 500], the court pointed out, “An application for a writ of mandate or administrative mandamus is a ‘special proceeding’ governed by the provisions of section 1063 et seq. of the Code of Civil Procedure including section 1109. Section 1109 provides: ‘Except as otherwise provided in this title [title 1 dealing with special proceedings], the provisions of part 2 of this code [Code of Civil Procedure commencing with section 307] are applicable to and constitute the rules of practice in the proceedings mentioned in this title.’ Once an alternative writ has issued and an evidentiary hearing been had, it is conteifiplated that the proceeding shall be terminated by a judgment, not by a minute order signed by the clerk. [Citation.] The judgment should dispose of the alternative writ theretofore issued as well as the matter of costs. [Citation.] In cases in which the trial court has determined a question of fact, the provisions of Code of Civil Procedure, section 632 and rule 232 of the California Rules of Court also apply. (Code Civ. Proc., § 1109, supra; International Assn. of Fire Fighters v. City of Palo Alto, 60 Cal.2d 295, 300-301 . . . ; Delany v. Toomey, supra, 111 Cal.App.2d at pp. 571-572.)” (29 Cal.App.3d atp. 394.)

It is also generally stated, “A judgment entered without findings where findings are required is' a nullity . . . .. ” (Ohio Cas. Ins. Co. v. Northwestern Mut. Ins. Co. (1971) 17 Cal.App.3d 204, 207 [94 Cal.Rptr. 586]. See also Supple v. Luckenbach (1938) 12 Cal.2d 319, 322-323 [84 P.2d 52] [cf. Cal. Rules of Court, rule 2(c), as amended eff. Jan. 1, 1951, and Estate of Hewitt (1958) 160 Cal.App.2d 584, 585-586 (325 P.2d 113)]; McBride v. Alpha Realty Corp. (1975) 49 Cal.App.3d 925, 928 [123 Cal.Rptr. 270]; Estate of Hewitt, supra; Petroleum Midway Co. v. Zahn (1944) 62 Cal.App.2d 645, 651-652 [145 P.2d 371]; and Hulbert v. All Night and Day Bank (1916) 29 Cal.App. 765, 767 [157 P. 546].)

On July 7, 1975, respondents attacked the judgment on the foregoing grounds in their motion to quash an order to show cause issued on the city’s application (see fn. 3 above), and they accompanied their motion with a request for findings of fact and conclusions of law. Two days later the city proposed modifications and additions to the findings set forth in the court’s proposed findings of fact and conclusions of law which had been signed and filed June 30, 1975. The city’s proposal contained the following recitals: “Said cause having been heard, evidence both oral and documentary having been introduced, and said cause having been submitted for decision, with the understanding of counsel and court that a decision must be rendered prior to the end of fiscal year 1974-75, on June 30, 1975, the court made a ruling re demurrer, intended decision, proposed findings of fact and conclusions of law re petition for writ of mandate on June 30, 1975 . ... [If] On June 30, 1975, counsel for petitioner prepared a judgment granting peremptory writ, of mandate which was signed by the Honorable Walter F. Calcagno on June 30, 1975, and entered on that date in the Judgment Book, Volume A-511, page 18. Said judgment was entered on June 30, 1975, in accordance with the understanding of counsel for petitioner and respondents and the court that the entry of said judgment may be necessary to preserve the rights of petitioner to receive an allocation from fiscal year 1974-75 funds.” The proposed conclusions of law included the following: “4. The decision of this court to grant a peremptory writ of mandate on June 30, 1975, and notification to counsel for petitioner and counsel for respondents was sufficient as a matter of law to preserve funds in the amount of $1,462,209.00 in the grade separation fund for allocation to the City of San Marcos in fiscal year 1974-75.”

On July 11, 1975, respondents filed “Objection to Proposed Findings of Fact and Conclusions Of Law; Proposed Counter Findings and Conclusions; and Request for Special Findings.” This instrument contains no objections to the recitals or conclusions of law which are quoted above. On July 15, 1975, respondents did, however, move to vacate the judgment on the grounds it was null and void in that the court and the court clerk lacked jurisdiction to enter a peremptory writ of mandate until findings of fact and conclusions of law were settled.

On August 25, 1975, the court denied respondents’ motion to vacate, and signed, nunc pro tunc as of June 30, 1975, “Modifications And Additions Findings of Fact And Conclusions Of Law Heretofore Signed On June 30, 1975.” This instrument includes the recitals and conclusions quoted above.

The respondents may not now attack the validity of the June 30 judgment because the record bears out the recitals in the findings signed August 25 to the effect that they waived the right to any procedural formalities which would delay entry of a binding judgment on June 30, or in the alternative, invited any error of the court on that account. Secondly, it is apparent that any error in the court’s action was cured by the subsequent proceedings.

The petition was filed on June 17, 1975, one day after petitioner received a copy of a communication dated June 11, 1975, setting forth that the city failed to qualify for an allocation from the 1974-1975 Grade Separation Fund “by reason of failure to file a timely application.” The filing was also but seven days after the Public Utilities Commission made an order relegating the city to a rank of 96 on the 1975-1976 priority list. The question of whether the city’s petition should have been dismissed because of laches is discussed below (part II).

On June 27, 1975, a Friday, a hearing was held on a demurrer and answer filed by the respondents in return to the alternative writ issued when the petition was filed. At the inception of that hearing counsel for respondents advised the court that the parties were under a considerable deadline because the list would expire on June 30, the following Monday. The chief, office of agreements and local assistance in the Division of Structures in the California Department of Transportation, who signed the communication of June 11, 1975 referred to above, advised the court that if he received a decision on July 1, 1975, that the city was entitled to an allocation, there would be no funds available, but that as of 5 o’clock, June 30, 1975, there would be $3,880,000 available. At the conclusion of the hearing, in response to the court’s question, counsel for respondents indicated that any decision after June 30 would be moot, and counsel for petitioner affirmed that he believed a decision should be made before the end of the business day on June 30. The court inquired whether findings of fact and conclusions of law would be required if requested. Upon receiving an affirmative answer, he indicated that they could be waived, and counsel for respondents stated he would not waive them. In response to the court’s questioning, counsel for respondents indicated that he wanted the court to grant the writ or discharge the alternative writ, and the judge said he would decide the matter, including ruling on the demurrer and the facts, if the demurrer were overruled, by Monday noon. In response to the court’s suggestion that a telephone call be made concerning his decision, respondents’ counsel stated, “It would be better than nothing,” and that he thought respondents would have to have some knowledge if the writ were sustained.

At the hearing on the return day of the order to show cause re contempt, the attorney appearing for respondents pointed out that they wanted to appeal and that there could not be a proper appealable judgment until findings were settled. He stated, “Your Honor, after the Appellate Court makes determination on this matter, if they affirm your action, the money will be set aside—I mean, we are not saying we are going to defy any final court order, but our point is that we want to take the matter up on appeal.” He acknowledged that if a ruling on June 30 was a requirement to prevent the surplus in the 1974-1975 fund from automatically going into the 1975-1976 fund, the ruling had been made in the proper fiscal year, and that the respondents would do whatever the appellate court said they had to do. The hearing on the contempt matter was continued to July 11, 1975. At that time the court advised counsel it considered itself in error in inviting amendments to the findings after the judgment had been filed and entered, and that the only way to attack his findings was by motion for new trial or appeal. After the court quashed the contempt proceedings, respondents’ objections to its findings were nevertheless filed. They were again adverted to in connection with respondents’ motion for a new trial. Then respondents’ counsel suggested that they should be adopted as the findings of fact and conclusions of law of the court.

The foregoing record demonstrates that it was contemplated that the court would make an order on or before June 30, which would be determinative of whether the sum sought by the city, and then available would be allowable to the city, or pass into the 1975-1976 Grade Separation Fund by operation of law. It is conceivable that in the absence of this understanding between the parties, the city might have sought some interlocutory relief which would have permitted earmarking the sum sought so that any final judgment in the action would not be rendered ineffectual by the mere passage of time. (See Code Civ. Proc., § 526, subd. 4 and § 1094.5, subd. (f).) It is unnecessary to pursue that theory. The subsequent conduct of the respondents does not reflect that they seriously questioned the right of the court to make a binding judgment concerning the 1974-1975 fund. Their concern was with having an appealable judgment predicated upon findings. As the trial court pointed out it did make findings. Insofar as the respondents waived the procedural requirements which are ordinarily a condition precedent to the entry of a judgment following trial by the court, they cannot complain at this stage of the case.

In Hadley v. Superior Court, supra, on which respondents rely, the matter quoted above is dicta, because as the court noted, “We need not determine whether findings of fact and conclusions of law were required in the proceeding below for administrative mandamus, because, even if such were required, it is apparent that petitioner has long since waived findings of fact and conclusions of law.” (29 Cal.App.3d at p. 394.) In International Assn. of Fire Fighters v. City of Palo Alto (1963) 60 Cal.2d 295 [32 Cal.Rptr. 842, 384 P.2d 170], relied upon as establishing the principles quoted in Hadley, the matter was dictum because there was no factual issue before the court. The decision also states, “Moreover, it appears that formal findings were not required in the instant action. The trial court filed a written ‘Memorandum Opinion,’ setting forth the basis of its judgment. If there was any need to determine factual issues, that memorandum serves as informal findings.” (60 Cal.2d at p. 300.) Finally, we note that in the second case relied upon in Hadley, Delany v. Toomey (1952) 111 Cal.App.2d 570 [245 P.2d 26], the appeal was dismissed “because taken from an order entered in the minutes upon the trial of issues of fact (not an order of nonsuit) made without findings of fact or waiver of findings.” (111 Cal.App.2d at p. 571.) No judgment or findings at all were involved.

It is apparent that at the risk of losing jurisdiction over the fund, the court could have granted the respondents’ motion to strike, considered the parties’ suggestions concerning the findings, as it in fact did in connection with respondents’ motion for a new trial, rendered the modified and additional findings which it actually signed on August 25, 1975, and then entered a second judgment. (See Supple v. Luckenbach, supra, 12 Cal.2d 319, 323; Ohio Cas. Ins. Co. v. Northwestern Mut. Ins. Co., supra, 17 Cal.App.3d 204, 207; and Hulbert v. All Night and Day Bank, supra, 29 Cal.App. 765, 767.) Here the court did not do so. If the respondents had immediately appealed from the judgment entered June 30, 1975, and refrained from participating in the motion for new trial and settlement of the findings attendant thereto, they would have taken the risk that the appellate court would decide, as we have, that under the circumstances they had waived their procedural rights to settlement of findings. On the other hand, the most they could have gained was a reversal with an opportunity to assert their rights to have findings settled and judgment signed in the manner provided by the code and rules. (See McBride v. Alpha Realty Corp., supra, 49 Cal.App.3d 925, 930; Estate of Hewitt, supra, 160 Cal.App.2d 584, 587-589; and Petroleum Midway Co. v. Zahn, supra, 62 Cal.App.2d 645, 651-652.) In the light of the record in this case it would be supererogation of the highest degree to reverse and remand the case to accomplish what already has been done. To paraphrase from Petroleum Midway Co. v. Zahn, supra, to conclude that we have no jurisdiction on this appeal to rule on the merits of the judgment entered on June 30, 1975, because the findings were ultimately settled after the entry of judgment “would be to give words precedence over the ideas they are meant to convey, and to give to a form of procedure greater obeisance than to the object sought to be attained.” (62 Cal.App.2d at p. 652.)

Respondents’ attack on the procedural aspects of the judgment is not meritorious on the record before us.

II

In their answer respondents alleged, on information and belief, “that petitioner should have challenged the deadline of the Department on or around February 15, 1975, and by reason of said delay, are precluded from the relief sought by laches.” Although requested to make a finding in accordance with those allegations by respondents’ objections to the findings as originally filed by the court, the court failed to do so. Respondents contend that both the city manager and the engineer employed by the city were aware of the February 15, 1975, deadline, when shortly prior to that date they submitted the city’s application to the department, and that they then knew that the application did not contain an agreement with the railroad as required by the order of the Public Utilities Commission and the provisions of section 2456 of the Streets and Highways Code. Respondents assert that at that time the city should have launched its attack on the validity of the deadline. Prejudice is claimed because although the action filed June 17, 1975, was processed with dispatch, it was clear that a writ issued on June 30, 1975 would not give the department sufficient time to determine whether the application did contain “evidence satisfactory to the department that all necessary orders of the Public Utilities Commission have been executed, that sufficient local funds will be made available as the work of the project progresses, that all necessary agreements with affected railroad or railroads have been executed that, if required, all environmental impact reports have been prepared and approvals obtained, and that all other matters prerequisite to the award of the construction contract can be accomplished within one year after the allocation.” (See Sts. & Hy. Code, § 2456.) Moreover, the delayed time period would not permit the commission to determine “at the time of allocation, that sufficient funds are available for all projects which are higher on the priority list and which are, or are reasonably expected to become, eligible during the fiscal year,” as required by section 2460.

“The defense of laches requires unreasonable delay plus either acquiescence in the act about which plaintiff complains, or prejudice to. the defendaftt resulting from the delay.” (Conti v. Board of Civil Service Commissioners (1969) 1 Cal.3d 351, 359 [82 Cal.Rptr. 337, 461 P.2d 617], italics added, fns. omitted. See also Lerner v. Los Angeles City Board of Education (1963) 59 Cal.2d 382, 399-400 [29 Cal.Rptr. 657, 380 P.2d 97]; Cahill v. Superior Court (1904) 145 Cal. 42, 46-49 [78 P. 467]; People v. Department of Housing & Community Dev. (1975) 45 Cal.App.3d 185, 195-197 [119 Cal.Rptr. 266]; Hadley v. Superior Court, supra, 29 Cal.App.3d 389, 395-396; Lewis v. Superior Court (1968) 261 Cal.App.2d 736, 739-741 [68 Cal.Rptr. 631]; and Dresser v. City of Torrance (1956) 140 Cal.App.2d 42, 46-48 [294 P.2d 962], Note also Board of Education v. Common Council (1900) 128 Cal. 369, 371-372 [60 P. 976].)

The respondents may have suffered some prejudice from the fact that the petition for relief was filed so late in the fiscal year. Nevertheless, the record supports the court’s findings, insofar as they are inconsistent with the establishment of the defense of laches and tend to establish that there was neither any unreasonable delay in bringing the action, nor any acquiescence by the city in the proposition that the application should not be considered at all because no agreement with the railroad had been filed on or before February 15, 1975. The pertinent evidence and findings reflect the following.

On February 13, 1974, the Public Utilities Commission initiated proceedings to establish priorities for allocations from the grade separation fund for the fiscal year 1974-1975. (See Sts. & Hy. Code, § 2452, fn. 1 above.) According to officials of the Department of Transportation who testified at the trial, it was publicly announced at the commission’s hearings that applications from those with high priorities would have to be received by the department by February 15, 1975, in order for the applicant to be eligible for an allocation. The city manager of the petitioner could not recall that any such statement was made. The engineer, who had been employed by the city in December 1973 to assist with the planning of the work and the applications for priority and for an allocation, acknowledged that through his work for various local agencies he knew that the department had set a date by which all of the documents necessary to establish the statutory requisites were supposed to be transmitted to the department. According to the engineer there were occasions on which the department had indicated a willingness to waive a deadline. The record showed that an application of lesser priority might receive consideration if a qualifying entity with greater priority withdrew its application. The department officials who testified adamantly denied that funds had ever been allocated to one who failed to complete the application by the deadline. The court found, “There was evidence that the Department of Transportation had in the past indicated its intention to waive the administrative deadline for submitting applications.”

On June 25, 1974, the Public Utilities Commission made its order establishing priority for the 1974-1975 fiscal year. So far as is material here, the application of the petitioning city was assigned a priority number of 23 and that of Los Angeles County for a grade crossing at Hollywood Way, a priority of 21. On July 3, 1974, the department sent a copy of the priority list to all of its district headquarters and advised local agencies of the priority list and requested them to file an application by February 15, 1975. On July 17, 1974, a letter was mailed to the city manager from the district director of transportation. It referred to the priority list which had been established and the city’s intention to submit an application. It stated: “This must be done before February 15, 1975, and should be processed through this office. [1f] Attached is a list of items which should be incorporated into your submittal.” The list included seven items the second of which read, “Fully-executed Agreement between the Local Agency and the railroad.” The city manager could not locate the letter in the city files, but he acknowledged that he had received a similar letter in 1973, and might have received the 1974 letter and sent it on to the engineer.

On October 21, 1974, the city filed an application with the Public Utilities Commission to construct the grade crossing. This application was granted December 30, 1974. The order provided in part, “Construction and maintenance costs shall be borne in accordance with an agreement to be entered into between the parties relative thereto and a copy of said agreement, together with plans of said crossing approved by The Atchison, Topeka and Santa Fe Railway Company shall be filed with the Commission prior to commencing construction. Should the parties fail to agree, the Commission will apportion the cost of construction and maintenance by further order.”

The negotiation of an agreement with the Santa Fe Railroad was entrusted to the engineer retained by the city. The engineer testified he discussed the substantive issues of the extent of the project with which the railroad would participate with the railroad and settled them, and that the agreement in general was similar to other agreements with that railroad. He traced the delays inherent in dealings between a railroad with headquarters in Chicago and a local municipality. He estimated that from 9 months to 65 weeks would be necessary to secure an executed agreement. Other testimony indicated that a railroad, with knowledge of the department’s deadline, might stall to prevent a project from going forward. According to the city manager the agreement was drafted in its final form in January 1975. After it was approved by the city manager it was returned to the railroad’s local agent for delivery to its Chicago head office. Despite urging from the city manager, the agreement was not returned until April 1975. Then, after approval and execution by the city council, it was delivered to the department.

Meanwhile, at the suggestion of a local representative of the department, the city filed its application with the district office. At that time the city manager was not aware that the deadline would be applied so rigidly. There were no unresolved problems concerning the agreement other than its execution, and he believed that the city would be eligible if sufficient funds were available. The court found, “4. Between February 5-7, 1975, the City of San Marcos submitted its application to District 11 (San Diego), Department of Transportation, which included the following documents: [IT] (a) PUC order dated December 30, 1974 and Decision No. 83886 authorizing construction of the grade crossing for which application for an allocation was sought; [H] (b) certified copy of Resolution No. 75-1005 of the City of San Marcos evidencing a commitment of local funds for the project; [1] (c) environmental impact report for the project; [H] (d) a detailed estimate of project work; [1f] (e) a simplified plan, with drawings, of the project. [1f] The railroad agreement was not submitted; it was at that time under review by officials of the affected railway, Santa Fe, at their home office in Chicago. The letter of submittal, dated February 5, 1975, contained the statement, The Railroad agreement is being processed by the Santa Fe Railway Company officials. They have had it several months. Mr. Gilmore of their staff supports this project.’ ”

Apparently the application was held at the district headquarters and was not forwarded to the head office of the department. The papers filed were not returned to the city because they were incomplete, and neither the city nor its responsible employees were advised that the application was not being considered. There was, therefore, no reason for the city to take action at that time. In fact the court found on uncontradicted evidence, “14. On May 1, 1975, the City of San Marcos delivered the executed Railroad Agreement to Mr. Jake Dekema, District Engineer, District 11, California Department of Transportation. By memorandum dated May 2, 1975, Mr. Dekema recommended that an allocation be made to the City of San Marcos stating that: ‘As you are aware, it is difficult to negotiate with the railroads, and because the City of San Marcos sent in all of the necessary documentation with the exception of the signed Railroad Agreement prior to the deadline date of February 15, 1975, I strongly recommend that this project be approved and that the City be granted an allocation of $1,462,209.00 from Fiscal 1974-75 Grade Separation Fund.’ ”

Apparently when the application was received in Sacramento it was reviewed by the chief of the office of agreements and local assistance in the Division of Structures in the California Department of Transportation, an individual who spent half of his time assisting cities and counties and the other half on state projects of similar nature. On May 9, 1975, he recommended against giving the city an allocation. He acknowledged that no formal letter denying the application was sent to the city at any time prior to a communication dated June 11, 1975, to the district director who had forwarded the application. The witness testified he had advised the city manager of the rejection when he was in Sacramento on other business. The witness acknowledged that he did not send the city a letter at that time because he “wanted to make doubly sure.” Although the city manager testified that the meeting was on May 20, 1975, the conversation he related occurred prior to the time the agreement was submitted, because he was left with the impression that the agreement should be forwarded for review of the whole application, even though it were doubtful it could be approved if not complete by February 15.

The department’s witness testified he advised the city’s retained engineer-of the rejection of the application in a telephone conversation initiated by the engineer around the first of June, about three weeks prior to the court hearing on June 27, 1975. At that time the engineer apparently knew the application would not be considered, and the. witness told him it was unfortunate he had not gone to Chicago to secure earlier execution of the agreement. According to the engineer, he called the department on another matter around the first week in June, and was advised the department was rejecting the application. He acknowledged he was not surprised because he had observed past rigid, inflexible adherence to deadlines on the part of the department, but he had also witnessed occasions when it had indicated a willingness to waive the deadline.

On June 10, 1975, the Public Utilities Commission made its order setting the priorities for the fiscal year 1975-1976. In this order the commission established new criteria for weighing priorities. Because “readiness” was relegated to a more subordinate position the city dropped from 23 to 96 in rank.

On June 16, 1975, the petition was verified by the city’s attorney. On the same day the city received a copy of the June 11, 1975, notice of rejection (see fn. 6 above). The petition was filed June 17, 1975, and by amendment filed June 19 the written rejection was incorporated in the petition.

The court made further findings which bear on the issue of laches. They are as follows:

“16. The Department of Transportation treats the receipt by one of its district offices of an application submitted by a municipality as receipt by the Department of Transportation.”

“21. The engineering aspects of the San Marcos project were available for review by the Department of Transportation prior to the administrative deadline of February 15, 1975.”

“12. The delayed delivery of the railroad agreement was not the fault of the City of San Marcos but rather it was the fault of the Santa Fe Railroad.”

“13. Neither the State of California nor any other applicant to the 1974-75 Great [j/c] Separation Fund was in any way prejudiced by the May 1, 1975 submission of the signed railroad agreement with the Department of Transportation.”

“6. As of May 1, 1975 the City of San Marcos was in full compliance with the requirements for receipt of an allocation under Section 2456.”

“22. The review by the state of standard railroad agreements of the type entered into between San Marcos and the Santa Fe Railway Company is not time-consuming and in no case requires four and one-half months.”

The foregoing findings are, with the possible exception of number “6” which is reviewed below (part V) insofar as it involves a conclusion of law, sustained by the evidence.

There may be some merit to the respondents’ claim that the city was prepared to accept a rejection and take its chances on a 1975-1976 allocation until it learned that its priority had dropped from 23 to 96. That analysis confuses the city’s motive in filing, with the city’s right to delay taking action. It was obvious that since the district office invited and received the application, subsequently rejected as inadequate, there was no burden on the city to take action until advised of a rejection. When the papers were forwarded with a favorable recommendation after the receipt of the railroad agreement, the city could do nothing but await further word. The record fails to show that any definitive rejection was communicated in any form until a week or so before the petition was filed. Under those circumstances we conclude that the respondents failed to prove the defense of laches, and the trial court did not err in failing to make the findings requested by them. If there has been prejudice by the delay, it was occasioned by the respondents’ failure to reject the application at the time it was filed.

Ill

As outlined above the department relied upon oral announcements at the hearings of the Public Utilities Commission, internal communication to its district offices and letters to prospective applicants as establishing that any application had to be validly and correctly completed by February 15, 1975, in order to receive consideration. Testimony at the hearing and the records filed in the case reveals the following:

Back in 1958 the department (then the Department of Public Works) had a comprehensive instruction called “G. G. McCoy’s Instruction” which was disseminated to the 11 district offices. It was modified from time to time and in order to determine the current instructions it would be necessaiy to go through the files and come up with a series of instructions or requests.

On February 15, 1973, the California Highway Commission adopted its resolution “M-90” for the purpose of delegating its ministerial and administrative functions relative to the administration of the grade separation program to the Director of Public Works (now Director of Transportation). The resolution authorized the director to apportion funds from the Grade Separation Fund among separation of grade districts and local agencies in accordance with the applicable annual priority list established by the Public Utilities Commission pursuant to sections 190-191 of the Streets and Highways Code, and subject to terms and conditions similar to those now found in sections 2456 and 2457. The resolution expressly provided; “4. That in order for a local jurisdiction to be eligible for an original apportionment from the funds available in "the Grade Separation Fund a valid and correct application must be received in a Division of Highways Office, Headquarters Office, or Office of the Director of Public Works by August 15 of the year affected by the Priority List;” and “[H] 5. That the Director of Public Works shall make apportionments, insofar as funds are available, to all new projects for which valid and correct applications are received by the August 15 deadline in order of priority established by the Public Utilities Commission.”

On June 6, 1975, the Director of Transportation proposed that the foregoing resolution be superseded by a resolution which would update the policy to conform to recent legislative changes, and to simplify the original resolution, which included excerpts of the statutes governing the fund. The summary and conclusion approved by the director stated, “The major change in the statutes was that the Public Utilities Commission shall establish a priority list for projects on July 1 instead of January 1, starting in 1974. This means that the date that applications must be received from local agencies must also change to reflect this. The final filing date for an original allocation will now be February 15 instead of August 15. . . .” This resolution “M-136" was passed by the commission on June 18, 1975, after the present action was commenced. It rescinded resolution “M-90” but did not itself establish a cut off date for applications. It reads in pertinent part, “. . . the Director of Transportation is hereby authorized to administer the Grade Separation Program and to make apportionments from the fund in conformance with said statutes, including setting reasonable dates for applications for original and supplemental allocations and making allocations to qualifying candidates in conformance with current statutes.”

The trial court made the following findings of fact:

“17. The procedure by which the Department of Transportation administers the grade separation fund established under Streets & Highways Code §§ 190, 2453 and 2456, is not published, in the California . Administrative Code.

“18. The February 15 deadline established by the Department of Transportation for the timely filing of applications for grade separation fund allocations is not published in any rules or regulations passed and disseminated to the public by the Department of Transportation.

“19. The procedure governing the administration of the grade separation fund accepted by the Department of Transportation as being in effect on Februaiy 15, 1975, and continuing in effect through approximately June 6, 1975, is set forth in California Highway Commission Resolution No. M-90. Said Resolution No. M-90 establishes a deadline of August 15 for the submission of applications for grade separation allocations and does not mention a deadline of February 15.”

It concluded: “3. In the absence of a regulation enacted pursuant to the California Administrative Procedure Act, setting forth a review procedure for applications to the grade separation fund, the enforcement of a February 15 application submission deadline is unreasonable, arbitrary and invalid.”

It was acknowledged by all concerned that the department, in carrying out its responsibilities under sections 2456 and 2457, and the authority to make allocations under section 2453 as delegated to it by the commission, necessarily needed some period of time within which to review the application of any entity seeking an allocation in order to determine whether it had complied with the statutory conditions for the assertion of its priority. Moreover, it is clear that the department had the implied power to adopt reasonable rules and regulations necessary for the efficient administration and exercise of the express power to review those applications. (See Dickey v. Raisin Proration Zone No. 1 (1944) 24 Cal.2d 796, 810 [151 P.2d 505, 157 A.L.R. 324]; Cal. Drive-In Restaurant Assn. v. Clark (1943) 22 Cal.2d 287, 303 [140 P.2d 657, 147 A.L.R. 1028]; Bank of Italy v. Johnson (1926) 200 Cal. 1, 20 [251 P. 784]; and Leftridge v. City of Sacramento (1943) 59 Cal.App.2d 516, 523-524 [139 P.2d 112].) The question is whether the regulation asserted falls within the purview of the Administrative Procedure Act (Gov. Code, tit. 2, div. 3, pt. 1, chs. 4, 4.5 and 5, particularly ch. 4.5, §§ 11371-11445 dealing with rules and regulations of state agencies).

Subdivision (b) of section 11371 provides in relevant part, that for the purpose of the statute, “ ‘Regulation’ means every rule, regulation, order, or standard of general application or the amendment, supplement or revision of any such rule, regulation, order or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure, except one which relates only to the internal management of the state agencies. . . .” It is obvious that the requirement in the 1973 resolution fixing a deadline for the receipt of “a valid and correct application,” as modified by letter to February 15, 1975, and the accompanying list of the minimum documents that must be included in a local agency’s application, are standards which the commission and the department purported to adopt to implement the provisions of section 2456 of the Streets and Highways Code (see fn. 1 above), which the Legislature entrusted to the department to administer, and, as well, to govern the procedure to be followed by the department in making the mandated review. They therefore would come within those provisions of the act which govern when a regulation will become effective (§ 11422), the manner of giving notice of the proposed adoption of the regulation (§ 11423), the matter to be included in the notice (§ 11424), the opportunity for interested persons to be heard with respect to the proposed regulation (§ 11425), and filing and publication of the regulation (§§ 11380-11385 and §§ 11409-11415).

In reliance upon our opinion in Hubbs v. People ex rel. Dept. Pub. Wks. (1974) 36 Cal.App.3d 1005 [112 Cal.Rptr. 172], respondents assert that the rules in question are not subject to the act because they do not fall within the provisions of section 11420 which read, “. . . Except as provided in Section 11421 [which refer to certain exclusions, discussed below], the provisions of this article are applicable to the exercise of any quasi-legislative power conferred by any statute . . .” In Hubbs we held that the power conferred on the department (then the Department of Public Works) to lease property acquired for future state highway needs, did not carry with it the power or duty to make rules and regulations having the force of law. We concluded, “With respect to defendant, it is not required to perform duties as a landlord additional to those required of private landlords. Accordingly, neither it nor the department, as its agent, was required to enact rules and regulations for the conduct of the landlord-tenant relationship here involved.” (36 Cal.App.3d at p. 1009.) Here on the other hand, the department had to make provision for ways and means of carrying out the review required by the legislative purpose embodied in the statute, a function we recognized as legislative in character in Hubbs (see 36 Cal.App.3d at p. 1008). In fact recognition and insistence on the department’s right to create a deadline and prescribe the material to be furnished demonstrates the quasi-legislative nature of the rules.

Respondents contend that the requirement is merely a rule or standard “which relates only to the internal management” of the department as excluded by the last clause quoted above from subdivision (b) of section 11371. It further may be noted that prior to 1949 the exception read, “except one which relates only to the organization or internal management of the state agency.” (See former Pol. Code, § 720, as added Stats. 1941, ch. 628, § 1, p. 2087, italics added; former Gov. Code, § 11380, as added by Stats. 1945, ch. 111, § 3, p. 445; and Stats. 1947, ch. 1425, § 1, p. 2985. Cf. Stats. 1949, ch. 313, § 1, p. 600.) In 1949 subdivision (a) was added to section 11421 to provide: “The provisions of this article shall not apply to any regulation not required to be filed with the Secretary of State under this chapter, and only this section and Section 11422 of this article shall apply to any regulation prescribing an agency’s organization or procedure or to an emergency regulation adopted pursuant to subdivision (b) of this section.” (Stats. 1949, ch. 313, § 4, p. 601.)

In Faulkner v. Cal. Toll Bridge Authority (1953) 40 Cal.2d 317 [253 P.2d 659], the petitioner attacked several resolutions adopted by the respondent in connection with the construction and financing of a toll bridge on the ground that they were “regulations” within the Administrative Procedure Act and unlawful because not adopted in compliance with the provisions of that act (40 Cal.2d at pp. 321-324). The court found that the resolutions did not fall within the definition of regulations contained in section 11371 of the act because “they were adopted for particular application to the subject of either approving or disapproving, under the provisions of the California Toll Bridge Authority Act (Sts. & Hy. Code, § 30000 et seq.), the recommendation of the Department of Public Works that the bridge be constructed, and of authorizing the issuance of revenue bonds following approval of such recommendation (Sts. & Hy. Code, § 30200).” (Id., p. 323, fn. omitted.) The court rejected the contention that the resolution affected the public generally, and stated, “. . . inasmuch as the ‘application’ so urged by plaintiffs relates to only one particular bridge, and solely to the specific project described, and as the resolutions (as alleged) do not purport to treat generally with, for instance, all bridges or all toll bridges or any open class under the jurisdiction of the authority, we are satisfied that plaintiff’s position in this respect is without merit.” (Id., pp. 323-324.) It added, “Furthermore, it appears that the pertinent resolutions are not calculated or effective to ‘implement, interpret, or make specific the law enforced or administered by’ the authority (§ 11371), but rather that they were adopted in the course of compliance with the statutoiy mandate that the authority act, one way or the other, upon the recommendation of the Department of Public Works that the bridge be constructed (Sts. & Hy. Code, § 30200). In other words, the resolutions constituted steps in the performance of a statutory duty, rather than acts which would ‘implement, interpret, or make specific the law.’ ” (Id., p. 324. See also City of San Joaquin v. State Bd. of Equalization (1970) 9 Cal.App.3d 365, 374-375 [88 Cal.Rptr. 12].)

In Faulkner the governing authority was concerned with exercising its statutory powers in connection with one project. Here, on the other hand, the department is charged with the duty of reviewing not only its own projects, but those submitted by local agencies throughout the state. The form and manner in which applications for funds, to be allocated by the department under the authority delegated by the commission, are to be processed is a matter of concern to every local entity within the state in which there are railroad crossings. The issue is governed by Poschman v. Dumke (1973) 31 Cal.App.3d 932 [107 Cal.Rptr. 596], where the court stated: “Appellant contends that this regulation is invalid because the notice and hearing requirements therein [citation] were not complied with. The record so shows. Respondents contend that these requirements do not apply because the regulation related only to the internal management of a state agency, thus falling within the exception of Government Code section 11371, subdivision (b). For this proposition, respondents rely on several New York decisions which are not applicable herein because (a) the New York exception is broader [citation]; (b) no New York decision involves a teacher’s grievance procedure created under statutes similar to the California Education Code [citations]; and (c) because the better reasoned view is to regard the ‘internal management’ narrowly so as to encompass accounting techniques and the like. (See City of San Joaquin v. State Bd. of Equalization (1970) 9 Cal.App.3d 365, 375 . . .) Tenure within any school system is a matter of serious consequence involving an important public interest. The consequences are not solely confined to school administration or affect only the academic community.” (31 Cal.App.3d at pp. 942-943.) Respondents ¡have confused the internal rules which may govern the department’s procedure in developing its applications for funds for its own projected grade crossings, and the rules necessary to properly consider the interests of all who will seek consideration under the provisions of the statutes dealing with review and allocations.

Although not raised by the respondents, we recognize that subdivision (a) of section 11421 of the act, as quoted above, excludes “any regulations not required to be filed with the Secretary of State under this chapter.” Paragraph (3) of subdivision (a) of section 11380 excludes from that requirement any regulation which “Is directed to a specifically named person or to a group of persons and does not apply generally throughout the State.” (See American Friends Service Committee v. Procunier (1973) 33 Cal.App.3d 252, 259-261 [109 Cal.Rptr. 22].) In the cited case the court examined the general objectives and manifest purposes of the Administrative Procedure Act and concluded, “We observe the basic purposes of APA to be two-fold, namely, to provide in the context of a multi-agency control and supervision over widely varied business and professional enterprises and activities a standard and uniform procedure whereby those affected by the controls may be heard; and second, to provide a repository accessible to the public in which general administrative rules and regulations may be found, thus avoiding secrecy.” (33 Cal.App.3d at pp. 261-262.) After examination of other applicable provisions of law it concluded, with respect to the rules and regulations of the Department of Corrections, its director, and the Adult Authority, “Since the purposes of APA are fulfilled by other and independent provisions of law, it may reasonably be inferred that the Legislature did not intend to superimpose separate and unnecessary statutory procedures designed to meet the same purposes and objectives. [H] We conclude from the foregoing that defendants’ rules and regulations are embraced within the exception defined by Government Code section 11380, subdivision (a)(3), and are thus beyond the purview of APA.” (Id, p. 262.)

In this case on the other hand, although there has been an attempt to furnish applicants with notice of the deadline and advice as to the materials required, there is no statute or official regulation so providing. Nor does it appear that those rules and practices which have evolved in connection with reviewing and making allocations among applicants for grade separation funds have been assembled in a repository accessible to the public. More importantly, it does not appear that the affected local agencies have had an opportunity to participate in the formulation of the rules. They should not be relegated to the status of prisoners and parolees subject to the control of those responsible for their custody. The existence of this controversy, involving in part as it does (see part IV below) the reasonableness of the ¡action taken by the department, and the fact that six cities have filed a brief as amici curiae in support of the petitioning city’s position indicate that there is some necessity for standards in which those affected have a voice. Finally, despite the fact that the record reveals naught to impeach the integrity of the department and its responsible officials, the fact remains that the department which ’ reviews the applications is competing with the local agencies for grade separation funds. In Bayside Timber Co. v. Board of Supervisors (1971) 20 Cal.App.3d 1 [97 Cal.Rptr. 431], we struck down the Forest Practice Act (Pub. Resources Code, §§ 4521-4618) because the Legislature had delegated to timber owners and operators the exclusive power to formulate forest practice rules without adequate guides or standards. Here the department has been furnished with substantive standards in the statute (see part VI below), but its procedural rules are questioned. There we pointed out, “When legislative authority without standards for its guidance is delegated to an agency or group of individuals with a pecuniary interest in its subject matter, the constitutional fault is compounded.” (20 Cal.App.3d at p. 12. See also State Board v. Thrift-D-Lux Cleaners (1953) 40 Cal.2d 436, 448-449 [254 P.2d 29].) The rationale of the cases last cited confirms our conclusion that the procedural rules of thé department in administering allocations from the grade separation fund should be adopted as provided in the Administrative Procedure Act.

Since the deadline was not so adopted it cannot be considered as a valid regulation. The consequences are discussed below.

IV

In addition to the findings which have been set forth above, the court found: “20. The series of steps involved in the preliminary engineering, review, negotiating and processing of an agreement between an out-of-state railroad and a small municipality such as San Marcos requires an extensive period of time which cannot reasonably be accomplished in seven and one-half months.”

It also concluded, “2. The adherence to the February 15, departmental deadline for the allocation requirements, as it specifically pertains to City of San Marcos application, in the unique circumstances of this case, is an abuse of discretion by respondents. In this specific case, it is an enforcement of a rule which thwarts and nullifies the safety program of the grade separation program. Under the factual setting of this case it is an arbitrary application and conflicts with the legislative intent of (1) making funds available to eligible smaller local agencies, and (2) preventing the accumulation of funds from one fiscal year to another”; and “5. Although some kind of administrative deadline for submitting applications is desirable and even necessary, it is unreasonable to apportion seven and one-half months for the preparation of an application by a municipality and four and one-half months for state review. Such a protracted period of review conflicts with the purposes of the grade separation program to serve municipalities rather than the convenience of administrators of said program.”

Respondents attack the foregoing conclusions and the findings of fact on which they are based. They point to testimony given by officials of the department which reflects that in conducting the review directed by section 2456 the department verifies that the local agency has the necessary order from the Public Utilities Commission authorizing construction. It must be satisfied that sufficient local funds will be available to cany out the project. It reviews the plans and engineering data and the estimate of the cost of the project to be sure that the estimated cost is reasonable for the construction proposed, that the estimated cost does not include work which is not compensable from the grade separation fund, and that the railroad is not receiving benefits which would in effect reduce its agreed or ordered contribution below the 10 percent required by law. (See Pub. Util. Code, § 1202.5.) It ascertains that any required environmental impact reports have been prepared and approved. Legal counsel review the agreement with the railroad, where one is required, to insure that the requisite contribution is to be made by the railroad, and generally complies with the statutory provisions governing grade crossings.

At the outset of the trial the court acknowledged, “I am satisfied that there is a lot of work to be done, four and a half months is required, and things of that nature, but what I want to know is, What are these railroad agreements? . . . Were there any other deficiencies in the San Marcos application other than not having the railroad agreement by February 15th?—things of that nature is what we are concerned with today.” Although respondents seize on this remark as establishing that four and one-half months was considered reasonable for a cut off date to give the department time for review, when the remarks are read in context it is apparent that the court was attempting to delineate the issues. The department’s bridge agreements engineer testified that on the basis of a study of 64 projects reviewed during the period from 1968 through 1974, it was determined that 34 percent took 4 or more months, and that 48 percent, involving simple grade crossings, were reviewed in a month’s space of time. His testimony revealed that the review process was not the major function of the office, which was also involved with the state department’s own plans for grade crossings on state highways and applications for funds from the grade separation fund for such projects. He estimated that less than 25 percent of the time was spent on the review process. The attorney for the department testified that legal review of the project, including any agreement, might take from one day to two weeks.

The witnesses for the state acknowledged that an agreement with an out-of-state railroad, such as the Santa Fe, which was involved here, would generally take longer to negotiate than one with a locally based railroad, at least insofar as securing formal approval, after the engineers had reached agreement on the substance of the construction to be embraced. The city’s engineer produced a schedule which showed that it would generally take between SVi and 13 months to secure an executed agreement between a local agency and an out-of-state railroad. In his opinion, if a local agency started to secure an agreement in July when the priorities became known, it would not be humanly possible to accomplish all the steps to get the agreement back in the IVi months allowed by the department. In his opinion it would be a logical solution to have a more flexible provision such as a two-stage procedure where the engineering and financial data would be filed for review at one point and later be supplemented by the executed agreement. He pointed out that smaller cities and counties were handicapped because they do not have the personnel to camp on the railroad’s doorstep and secure prompt review of forms of agreement that may be submitted, whereas the state and large local agencies could do so.

The evidence sustains the court’s finding and