Judge: Curtis A. Kin, Case: 19STCP04166, Date: 2023-08-29 Tentative Ruling

Hon. Curtis Kin The clerk for Department 82 may be reached at (213) 893-0530.

Case Number: 19STCP04166    Hearing Date: August 29, 2023    Dept: 82

MOTIONS (3) TO ENFORCE SETTLEMENT

Date:               8/29/23 (9:30 AM)

Case:               Lionel A. Wyatt v. City of Los Angeles et al. (19STCP04166)

TENTATIVE RULING:

Respondent City of Los Angeles’ Motion to Enforce Settlement Agreement and Dismiss the Suit is GRANTED.

Respondent County of Los Angeles Treasurer and Tax Collector’s Motion to Enforce Settlement is GRANTED.

Petitioner Lionel A. Wyatt’s Motion for an Order Enforcing the Stipulation Between the Parties is DENIED.  

On April 11, 2023, the Court (Hon. Mary H. Strobel) indicated its inclination to continue the hearings on the motions listed above for supplemental briefing. The Court found that based on the evidence presented, it could not determine whether City of Los Angeles (“City”) fulfilled its obligations under the June 1 Settlement (“Settlement”). (4/11/23 Minute Order at 8-10.) As stated in the 4/11/23 Minute Order, “The Settlement required City to: (1) release the LADBS lien; (2) provide a copy of said release to Petitioner; and (3) accept $1,769 as payment in full for all claims arising from the events described in the petition.” (Id. at 7; Atwood Decl. ¶ 2 & Ex. A.) “To prove that it has fully performed its obligations under the Settlement, City must show that the full amount of the lien, including accrued interest, penalties, fees, or charges, have been removed from the County tax rolls.” (4/11/23 Minute Order at 9.)

Based on the evidence provided in the original briefing, it was unclear why the Secured Defaulted Tax Roll System showed a secured amount for the Los Angeles Department of Building and Safety (“LADBS”) lien in the amount of $1,768.47 when the original amount of the lien was $3,536.95. (Id. at 8; Atwood Decl. ¶ 7 & Ex. E.) It was also unclear whether the amounts that petitioner still owes, as reflected in the Statement of Prior Years Taxes and the Substitute Property Tax Bill filed by County of Los Angeles Treasurer and Tax Collector (“County”), includes interest, penalties, fees, or charges that accrued in connection with the LADBS lien. (4/11/23 Minute Order at 9-10; McComas Decl. ¶¶ 1-3 & Exs. A, B.)

After having issued the tentative and having conferred with the parties, the Court ordered the case to the Hon. William Fahey for a further mandatory settlement conference. (4/11/23 Minute Order at 15.)

On June 27, 2023, having determined that case had not settled after the mandatory settlement conference, the Court reset the motions listed above for hearing. The Court ordered additional briefing as follows:

For the reasons set forth in the Court’s 4/11/23 Minute Order, prior to the hearing, City and/or County should submit declarations from knowledgeable County tax officials regarding: (1) the amount of the LADBS lien immediately before and after it was released by the City; (2) how interest, penalties, fees, or charges related to the LADBS lien were calculated and applied on petitioner’s county tax assessment; (3) whether all such interest, penalties, fees, or charges related to the LADBS lien have been removed or “zeroed” from petitioner’s tax account; and (4) whether petitioner made payments which were credited toward the LADBS lien instead of ad valorem taxes for 2018. Petitioner may also submit a supplemental declaration addressing these issues.

The Court has reviewed the supplemental declarations filed by City and County and supplemental briefing and declaration filed by petitioner.

Through a declaration from Deondria Barajas, an Assistant Treasurer Tax Collector-Tax Collections Branch of the County of Los Angeles Treasurer and Tax Collector, County avers that in connection with the Annual Secured Property Taxes for the 2018-19 Fiscal Year, the first installment out of two installments included $1,768.47 for the LADBS direct assessment (half of the LADBS lien), $1,949.07 in ad valorem taxes, and $120.13 in other direct assessments. (Barajas Decl. ¶¶ 7, 28.) County received $2,069.36 on 12/10/18 and $1,945.14 on 3/20/19 – a total of $4,014.50 – in payments for the first installment. (Id. ¶¶ 8, 9.) County paid City $1,768.48 in partial satisfaction of the LADBS lien. (Id. ¶¶ 10, 20, 28.) Considering that the total lien was $3,536.95 and the difference between the total lien and County’s payment to City is $1,768.47, this sufficiently explains why County’s Secured Defaulted Tax Roll System reflected a secured amount of $1,768.47 – as opposed to original lien amount of $3,536.95 – as of December 14, 2022. (Atwood Decl. ¶ 7 & Ex. E.)

On or about June 19, 2019, LADBS credited $1,768.47 to the account associated with Assessor Parcel Number 2314-014-041 associated with petitioner’s property. (Supp. Salumbides Decl. ¶¶ 4, 5.) This reduced the amount due to LADBS from $3,536.95 to $1,768.48. (Id. ¶ 5.)

For the second installment, County did not receive any payment by the April 10, 2019 due date. Having issued a notice of delinquency in May 2019 and not having received payment by June 30, 2019, on July 1, 2019, taxes and penalties totaling $4,303.98 defaulted and a redemption penalty of $57.56 accrued monthly. (Barajas Decl. ¶ 12.)

On or about September 16, 2022, petitioner mailed a check in the amount of $1,769.00 pursuant to the Settlement. (Atwood Decl. ¶ 3 & Ex. B.) Upon receiving the check on or about September 20, 2022, City’s counsel delivered the check to LADBS. (Id. ¶ 4.) City’s counsel instructed LADBS to ask the Los Angeles County Assessor to release the LADBS lien on petitioner’s property and record the release of lien with the County Recorder. (Id. ¶ 4 & Ex. C.) On November 9, 2022, LADBS requested County to reduce the amount owed to LADBS to $0.00. (Supp. Salumbides Decl. ¶¶ 7, 8 & Ex. A.) LADBS executed a Release of Lien on November 10, 2022 and recorded it on December 9, 2022. (Salumbides Decl. ¶ 7 & Ex. I.)

Having learned that petitioner paid LADBS directly and LADBS released its lien, County reduced the second half of the LADBS lien from $1,768.48 to $0. (Barajas Decl. ¶¶ 13, 21; see also Atwood Decl. ¶ 7 & Ex. E [showing delinquent amount of LADBS lien as $0.00].) Both City and County confirm that no interest, penalties, fees, or charges relating to the LADBS lien remain outstanding. (Barajas Decl. ¶¶ 22, 26, 30; Supp. Salumbides Decl. ¶ 9.)

City and County demonstrate that the full amount of the LADBS lien, including accrued interest, penalties, fees, or charges, have been removed from the County tax rolls. City released the LADBS lien, provided a copy of the release to petitioner (Atwood Decl. ¶ 8 & Ex. F), and accepted $1,769.00 as payment in full for all claims arising from the events described in the petition.

With respect to petitioner’s contention that his Settlement payment should cover the entirety of the taxes reflected in the County tax roll, a total of $3,821.96 on petitioner’s property tax remains outstanding because after the deletion of the amount owed to LADBS, the base tax amount of $2,069.19 remained outstanding along with a 10% penalty, plus a $15 redemption fee and 1.5 percent redemption penalty of $31.03 accruing monthly since July 2019. (Barajas Decl. ¶¶ 14, 15, 22, 31.) The Settlement did not release other ad valorem taxes. (Atwood Decl. ¶ 2 & Ex. A.)

Petitioner contends that his property tax payment in 2018 should not have been diverted to the LADBS lien without notice. (Supp. Wyatt Decl. ¶¶ 3, 5.) The Annual Secured Property Tax Bill for the 2018-19 Fiscal Year reflected that out of the total $7,675.33 owed, $3,536.95 was owed to LADBS. (Wyatt Decl. ¶ 5 & Ex. 5; Supp. Wyatt Decl. ¶ 17 & Ex. 17.) The total $7,675.33 was owed in two installments. (Ibid.) Petitioner was thus on notice that his payment of the first installment would be used to partially satisfy the LADBS lien. In any event, and more to the point, the parties, with the assistance of a neutral bench officer (Hon. William F. Fahey), negotiated and entered into a Stipulation Re Settlement that explicitly and unambiguously provides that petitioner’s payment of $1,769 would be deemed by City as “payment in full of all . . . claims, known or unknown, arising from the events described in the petition.”  (6/1/22 Minute Order; Atwood Decl. Ex. A.)  The Stipulation says nothing about satisfaction of other tax obligations and therefore does not provide for such.  Nor does the Stipulation place any qualifier on what the $1,769 represents, other than the amount that will satisfy all claims arising from what is described in the petition. 

In addition, to the extent petitioner contends that the penalties were discharged in bankruptcy proceedings (Supp. Wyatt Decl. ¶ 5 & Exs. 1, 2), that issue is beyond the scope of the instant motions. In the Settlement, petitioner agreed to pay $1,769.00 in exchange for the release of the LADBS lien. Both petitioner and City complied with their obligations under the Settlement. The Settlement must be enforced. 

For the reasons stated in the April 11, 2023 Minute Order and herein, City has complied with the terms of its June 1, 2022 Settlement with petitioner. Accordingly, respondents City of Los Angeles and County of Los Angeles Treasurer and Tax Collector are entitled to dismissal with prejudice. City and County’s motions are GRANTED.

As petitioner moves to enforce the Settlement on the grounds that all outstanding claims by County be “zeroed out,” (Supp. Wyatt Decl. ¶ 19), petitioner’s motion is DENIED.  That claim by petitioner far exceeds the scope of the Settlement stipulation.

Respondent City of Los Angeles is ordered to submit a proposed judgment of dismissal with respect to all parties within five (5) court days hereof.