Judge: Curtis A. Kin, Case: 22STCP03478, Date: 2023-10-19 Tentative Ruling
Hon. Curtis Kin The clerk for Department 82 may be reached at (213) 893-0530.
Case Number: 22STCP03478 Hearing Date: January 16, 2024 Dept: 82
MOTION (1) FOR NEW TRIAL AND (2) TO VACATE JUDGMENT
Date: 1/11/24
(1:30 PM)
Case: Carlos Carachure
et al. v. City of Azusa (22STCP03478)
TENTATIVE RULING:
Petitioners Carlos Carachure and Ana Carachure’s Motion for
New Trial and Motion to Vacate the Judgment is DENIED.
I.
REQUEST FOR JUDICIAL NOTICE
Petitioners’ request for judicial notice of Exhibit A, State
of California Assembly Bill No. 1843, dated January 24, 1939, is GRANTED. (California
Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150,
176 [taking judicial notice of prior version of applicable statute and
associated legislative history].)
Petitioners’ request for judicial notice of Exhibit B, excerpts
from the State Legislative Analyst’s analysis for Proposition 218, is GRANTED.
(City of San Diego v. Shapiro (2014) 228 Cal.App.4th 756, 779, fn. 20
[Legislative Analyst’s analysis is subject to judicial notice].)
II.
AVAILABILITY OF POST-TRIAL RELIEF
On October 19, 2023, the Court denied petitioners’ petition
for writ of mandate on the basis that they did not exhaust their administrative
remedies. On November 14, 2023, judgment was entered in favor of respondent
City of Azusa.
Petitioners move to vacate the judgment and move for a new
trial. Petitioners assert the following grounds: (1) the Court erroneously
relied on property tax cases interpreting Revenue and Taxation Code (“R&T”)
§ 4807 and Article XIII, section 32 of the California Constitution; (2) the Court
erroneously relied on the current version of Article 2, Chapter 5, Part 9 of
Division 1 (“Article 2”) of the Revenue and Taxation Code, not the version of Article
2 existing at the time Health and Safety Code (“H&S”) § 5472 was enacted in
1949; and (3) H&S § 5472 does not govern an action challenging the
diversion of fee revenue.
Petitioner’s arguments are based on law, not in fact. Vacatur
of the judgment and a new trial may be ordered based on an error in law. (CCP §§
657(7) [new trial may be granted for “[e]rror in law, occurring at the trial
and excepted to by the party making the application”]; 663(1) [judgment may be
set aside and vacated for “[i]ncorrect or erroneous legal basis for the
decision, not consistent with or not supported by the facts”].)
Respondent does not dispute that petitioners may seek
vacatur of the judgment. (Opp. at 6:14-15 [“A judgment can only be vacated on
the grounds Petitioners invoke if the Court erroneously
applied the law”].)
With respect to the motion for new trial, citing Renfer
v. Skaggs (1950) 96 Cal.App.2d 380, respondent City of Azusa contends that a
new trial is not available because the Court’s ruling on the writ petition
turned on an issue of law, not an issue of fact. (See Renfer, 96
Cal.App.2d at 384 [“‘Where there has been no error in determining an issue of
fact or affecting the determination of any question of fact, there is no ground
for a new trial’ on the cause that the decision is ‘against law.’ [Citation]”].)
However, CCP § 657 provides that a motion for new trial may
be granted based on an “error in law.” (CCP § 657(7).) After Renfer was
decided, the California Supreme Court in Carney v. Simmonds (1957) 49
Cal.2d 84 recognized a split of authority. One group of cases held that a
“motion for a new trial should not be entertained where the only issue tried is
one of law as distinguished from one of fact or one of law and fact.” (Carney,
49 Cal.2d at 90; see also CCP § 656 [“A new trial is a
re-examination of an issue of fact in the same court after a trial and decision
by a jury, court, or referee”].) The other group of cases held that a new trial
motion is “proper although the issue tried was not one of fact.” (Carney, 49
Cal.2d at 89-90.) The high court found that
CCP § 657 provides that a new trial may be granted based on issues of law in
addition to issues of fact. (Carney, 49 Cal.2d at 90 [“The grounds for
the new trial motion may be either issues of fact such as insufficiency of the
evidence or issues of law such as…that the decision is ‘against the law,’
‘error in law, occurring at the trial,’ and others”].)
Accordingly, petitioners having asserted that the Court
erroneously applied the law, the Court examines whether petitioners are
entitled to vacatur of the judgment or a new trial.
III.
APPLICABLE VERSION OF HEALTH AND SAFETY CODE
SECTION 5142
In the October 19, 2023 ruling denying the writ petition,
the Court held that Health and Safety Code § 5142 required petitioners to have
filed a claim for refund with respondent before commencing the instant writ
proceeding. (Ruling at 8.) H&S § 5142, enacted in 1949, states, “After
fees, rates, tolls, rentals or other charges are fixed pursuant to this
article, any person may pay such fees, rates, tolls, rentals or other charges
under protest and bring an action against the city or city and county in the
superior court to recover any money which the legislative body refuses to
refund. Payments made and actions brought under this section, shall be made and
brought in the manner provided for payment of taxes under protest and actions
for refund thereof in Article 2, Chapter 5, Part 9, of Division 1 of the
Revenue and Taxation Code, insofar as those provisions are applicable.”
Petitioners contend that the version of Article 2 existing at
the time H&S § 5142 was enacted in 1949 applied, not the current version of
Article 2. Former Article 2 did not reference Article 1. Instead, Article 2 allowed
property owners to pay property taxes under written protest. (RJN Ex. A at
former R&T §§ 5136, 5137.) Within six months after payment, action may be
brought against the county to recover the property tax paid under protest. (Id.
at former R&T § 5138; compare with current R&T § 5142(a) [“No
action shall be commenced or maintained under this article, except under
Section 5148, unless a claim for refund has first been filed pursuant to
Article 1 (commencing with Section 5096)”].)
Citing Palermo v. Stockton Theaters, Inc. (1948) 32
Cal.2d 53, petitioners contend that the reference to Article 2 in H&S §
5472 is specific, thereby incorporating the version of Article 2 at the time
H&S 5472 was enacted. “‘It is a well established principle of statutory law
that, where a statute adopts by specific reference the provisions of another
statute, regulation, or ordinance, such provisions are incorporated in the form
the which they exist at the time of the reference and not as subsequently
modified, and that the repeal of the provisions referred to does not affect the
adopting statute, in the absence of a clearly expressed intention to the
contrary.” (Palermo, 32 Cal.2d at 58-59.)
However, the Palermo court recognized a “a cognate
rule…to the effect that where the reference is general instead of specific, such
as a reference to a system or body of laws or to the general law relating to
the subject in hand, the referring statute takes the law or laws referred to
not only in their contemporary form, but also as they may be changed from time
to time, and…as they may be subjected to elimination altogether by repeal.” (Id.
at 59.)
The incorporation of Article 2 in H&S § 5472 is not
expressly time specific. (Cf. Palermo, 32 Cal.2d at 57-60 [referring
statute referenced “any treaty now existing” at the time act was enacted]; People
v. Lopez (2022) 82 Cal.App.5th 1, 23 [“In the Palermo case itself, a
time-specific intent was facially apparent from statutory provisions
referencing ‘any treaty now existing’”].) However. “[T]he presence or absence
of language referring specifically to a statutory or regulatory provision is
not necessarily dispositive” of the issue of whether a reference to another
statute is general or specific. (People v. Rojas (Cal., Dec. 18, 2023,
No. S275835) 2023 WL 8706961, at *4.) “[W]here the words of an incorporating
statute do not make clear whether it contemplates only a time-specific
incorporation, ‘the determining factor will be ... legislative intent....’
[Citation.]” (In re Jovan B. (1993) 6 Cal.4th 801, 816.)
In support of the contention that Article 2 is a specific
reference, petitioners contend that, in enacting H&S § 5472, the
Legislature incorporated Article 2, which set forth procedures for payment
under protest, and declined to incorporate Article 1, which provided for verified
claims. (Reply at 6:15-23; RJN Ex. A at former R&T § 5097.) When H&S §
5472 was enacted, however, Article 1 did not provide for the filing of an
action for refund that was restricted by the grounds set forth in the verified
claim. Accordingly, in Chapter 5, Part 9, of Division 1, Article 2 contained
the only provisions governing “actions for refund thereof,” or actions for
refund tied to any form of protest, which H&S § 5472 could incorporate. “Only
in those cases where an entire body of law relating to a particular subject was
adopted by reference did the court find the reference to be general so that
subsequent amendments to the incorporated statute affected the adopting
statute.” (People v. Domagalski (1989) 214 Cal.App.3d 1380, 1385-86.) In
the language of the “cognate rule” set forth in Palermo, the reference
to Article 2 was a reference to “the general law relating to the subject in
hand,” with the subject in hand being actions for refund of payments made under
protest. (Palermo, 32 Cal.2d at 59.) The Court thus finds that H&S § 5472
incorporated Article 2 as it is repealed and/or amended, not limited to the
version in existence at the time of enactment.
Payment under protest was repealed in 1976. (Los Altos
Golf & Country Club v. County of Santa Clara (2008) 165 Cal.App.4th
198, 205.) In its place, verified claims were required in its stead. (Rev.
& T. Code §§ 5140, 5142(a), 5097, 5097.2.) Because the reference to Article
2 in H&S § 5472 was general, H&S § 5472 refers to Article 2 in its
amended form.
In any event, even if the reference to Article 2 in H&S
§ 5472 were specific, petitioner would be required to file a payment under
protest under former R&T §§ 5136 and 5137. Petitioners do not assert that
they filed any dispute of the subject fees with respondent before commencing
the instant writ proceeding. (See Johnson Decl. Filed in Support of
Opposition to Writ Petition at ¶ 4 [“A review of the relevant records
maintained by the City confirms that the City has not received any claim for
refund, administrative claim, or payment under protest from Carlos Carachure,
Ana Carachure, or the Carachures collectively, prior to the date on which the
City was sued in the present litigation”].)
Petitioners contend that payment under protest is not an
administrative remedy that they have to exhaust because former R&T §§ 5136
and 5137 did not prescribe a process to evaluate or resolve the protest. (Opp.
at 18:10-22; see Hill RHF Housing Partners, L.P. v. City of Los Angeles
(2021) 12 Cal.5th 458, 479 [“[W]e have declined to impose an exhaustion
requirement when a purported administrative remedy did not incorporate ‘clearly
defined machinery for the submission, evaluation and resolution of complaints
by aggrieved parties.’ [Citations]”].) Nevertheless, payment under protest
pursuant to former R&T §§ 5136 and 5137, assuming former Article 2 is
applicable, is a mandatory prefiling procedure. “The payment under protest
requirement provides fiscal protection to the collecting entity, as payment
received under protest puts the entity on notice that a refund may eventually
be required.” (Padilla v. City of San Jose (2022) 78 Cal.App.5th 1073,
1077; see also id. at 1080 [“We also note that this case is resolved by
a procedural bar—noncompliance with a mandatory prefiling procedure”].) Former R&T
§ 5139 provides that an action after payment under protect may be brought
only “[a]s to the portion of the assessment claimed to be void” on “the grounds
specified in the protest.” (RJN Ex. A at former R&T § 5139(a), (b).) Accordingly,
when H&S § 5472 was enacted, the Legislature contemplated the protest to
notify the city that a refund may be required.
Based on the foregoing, regardless of whether the reference
to Article 2 in H&S § 5472 is general or specific, petitioners still did
not comply with the mandatory prefiling requirement of filing any form of
protest prior to the commencement of the instant writ proceeding.
IV.
SCOPE OF CLAIM OF REFUND
Petitioners contend that H&S § 5472 does not govern an
action challenging the diversion of fee revenue for any purpose other than
sewer or trash. (Cal. Const., art. XIII D, § 6(b)(2).) Petitioners also contend
that the Court erroneously relied on property tax cases interpreting Revenue
and Taxation Code (“R&T”) § 4807 and Article XIII, section 32 of the
California Constitution.
Regardless of whether petitioners are challenging the
imposition or diversion of fees, any action that challenges the merits of such
fees “is a refund action that must be brought against the county or city that
collected the tax even if the action does not expressly seek a refund or
disclaims the right to a refund.” (William Jefferson & Co., Inc. v.
Orange County Assessment Appeals Bd. No. 2 (2014) 228 Cal.App.4th 1, 12.) In
a refund action, a taxpayer cannot bypass the prefiling requirement to present
some form of protest to the government entity before asserting the right to
writ relief. (Rickley v. County of Los Angeles (2004) 114 Cal.App.4th
1002, 1014-15 [“Before pursuing judicial relief, respondent was required to pay
the taxes and file a claim for refund…pursuant to [R&T] section 5141.
Instead, she bypassed the administrative procedure to use a declaratory relief
action as a springboard to allege intentional torts of defamation and abuse of
process”].) Indeed, in Los Altos, the petitioners sought mandate relief
directing the city to stop collecting excess sewer charges, and the Court of
Appeal still found that the payment under protest requirements of H&S §
5472 applied. (Los Altos, 165 Cal.App.4th at 202, 205.) Petitioners
cannot avoid the consequences of failing to comply with H&S § 5472 by distinguishing
between the imposition or diversion of fees, as diversion of fees necessarily
renders the charged fees in excess of the cost of providing sewer or trash
services. (Compare Cal. Const., art. XIII D, §§ 6(b)(1), (b)(2).)
Even though William Jefferson and Rickley were
property tax refund cases, their holdings apply with respect to H&S § 5472,
because H&S § 5472 incorporates Article 2 applicable to tax refund cases. If
current Article 2 applies, petitioners’ failure to file a refund claim bars the
instant proceeding. (Rev. & T. Code § 5142(a).) If former Article 2 were to
apply, petitioners’ petition for writ relief still fails because petitioners
did not assert the grounds for refund in any protest. (RJN Ex. A at former
R&T §§ 5139(b).)
Petitioners cite Howard Jarvis Taxpayers Ass'n v. City of
Roseville (2002) 97 Cal.App.4th 637, 639 for the assertion that they are
not obligated to file an administrative refund claim before seeking writ
relief. (Roseville, 97 Cal.App.4th at 639 [“[T]o the extent the
complaint seeks a judicial determination of the legal validity of the in-lieu
fee, it does not involve an issue subject to determination through the
administrative refund remedy available to plaintiffs”].) However, Roseville was
decided before William Jefferson and Rickley. The Roseville court
did not consider whether the reference to “actions for refund” in H&S §
5472 encompasses a request for mandate relief with respect to a fee that is
purportedly unconstitutional under Proposition 218.
Based on the foregoing, because petitioners did not file any
form of protest with respondent before commencing their writ petition,
petitioners are not entitled to the judicial relief they seek.
Because there is no error in law that materially affected
the substantial rights of petitioners or entitled petitioners to a different
judgment (CCP §§ 657, 663), the motion is DENIED.