Judge: Mark A. Young, Case: 23SMCVP00421, Date: 2024-09-24 Tentative Ruling

Case Number: 23SMCVP00421    Hearing Date: September 24, 2024    Dept: M

23SMCVP00421:  Prang v. Assessment Appeals Board:

The Assessor argues that the Board had authority to reconsider its decision regarding the valuation of the property, or that this Court has such jurisdiction and should order reconsideration. Specifically, the First Amended Petition (“FAP”) requests that the Court direct the Los Angeles County Assessment Appeals Board No. 6 (the “Board”) to reverse its finding that Petitioner was bound by, and the Board was without authority to, reconsider Petitioner’s value recommendation of $3,774,000 ,and to schedule a hearing on appeal application number 2012-006911 to determine the base year value of the Property as of the April 20, 2007 transfer date as described below. (FAP at 1.) According to the FAP, the value recommendation was made by a former member of Petitioner’s staff who is now a criminal defendant and was made corruptly and fraudulently in a scheme to lower assessed values of property in exchange for payments. The Petition affects the property tax valuation of Real Parties-in-Interests’ real property located at 416 North Rockingham Avenue, Los Angeles CA 90049 also known as Assessor Identification Number 4406-006-006 (the “Property”).

There are two essential requirements to the issuance of an ordinary writ of mandate under Code of Civil Procedure section 1085: (1) a clear, present and ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty.  (California Ass’n for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 704.) “An action in ordinary mandamus is proper where … the claim is that an agency has failed to act as required by law.” (Id. at 705.) “Normally, mandate will not lie to control a public agency's discretion, that is to say, force the exercise of discretion in a particular manner. However, it will lie to correct abuses of discretion. In determining whether a public agency has abused its discretion, the court may not substitute its judgment for that of the agency, and if reasonable minds may disagree as to the wisdom of the agency's action, its determination must be upheld. A court must ask whether the public agency's action was arbitrary, capricious, or entirely lacking in evidentiary support, or whether the agency failed to follow the procedure and give the notices the law requires.”  (County of Los Angeles v. City of Los Angeles (2013) 214 Cal.App.4th 643, 654.)   

The court independently reviews legal questions, such as questions of statutory construction. (City of Alhambra v. County of Los Angeles (2012) 55 Cal.4th 707, 718.) To the extent “purely legal issues involve the interpretation of a statute an administrative agency is responsible for enforcing, [the court] exercise[s] [its] independent judgment, ‘taking into account and respecting the agency's interpretation of its meaning.’”  (Housing Partners I, Inc. v. Duncan (2012) 206 Cal.App.4th 1335, 1343; see also Yamaha Corp. of America v. State Bd. Of Equalization (1998) 19 Cal.4th 1, 11.) 

An agency is presumed to have regularly performed its official duties.  (Evid. Code § 664.)  Generally, the petitioner “bears the burden of proof in a mandate proceeding brought under Code of Civil Procedure section 1085.”  (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1154.)  

Petitioner argues that the “trier of fact” has the inherent “equitable” authority to vacate the Board’s decision. (See Rev. & Tax. Code, § 1605.5.) Petitioner cites no authorities which illuminate this equitable authority for the Board or the Court. Petitioner cites section 1605.5, which provides in relevant part that “The county board shall hear applications for a reduction in an assessment in cases in which the issue is whether or not property has been subject to a change in ownership… [and] The county board shall hear and decide issues with respect to penalties assessed under Section 463, 482, or 504 where those issues arise in connection with an application timely filed under Section 1603 or 1605…” (Emphasis added.) The section does not provide any ministerial duty which could support a section 1085 writ. Further, Petitioner’s cited duties (equitable and fiduciary) simply do not apply to the petition at hand. The cases only refer to court judgments, not administrative hearings. Petitioner has put forth insufficient authority that an “equitable” authority creates a “clear, present and ministerial duty” on the part of the Board.

The only question of law posed by Petitioner regards the Board’s decision not to disturb the valuation of the property at $3.7 million. Independently reviewing the relevant legal interpretations, the court also sees no abuse of discretion considering that Rev. & Tax. Code section 51.5 limited the assessor’s authority to correct the valuation here. Depending on the nature of the error, section 51.5 establishes time limits on an assessor's authority to correct a base year value. (William Jefferson & Co. v. Orange Cnty. Assessment Appeals Bd. No. 2, (2014) 228 Cal. App. 4th 1, 10.)   The relevant section states:

“(a) Notwithstanding any other provision of the law, any error or omission in the determination of a base year value pursuant to paragraph (2) of subdivision (a) of Section 110.1, including the failure to establish that base year value, which does not involve the exercise of an assessor's judgment as to value, shall be corrected in any assessment year in which the error or omission is discovered.

(b) An error or an omission described in subdivision (a) which involves the exercise of an assessor's judgment as to value may be corrected only if it is placed on the current roll or roll being prepared, or is otherwise corrected, within four years after July 1 of the assessment year for which the base year value was first established.” (Emphasis added.)

This section allows an assessor to correct any base-year value error or omission within 4 years after enrolling an assessment so long as that error did not “involve the exercise of an assessor’s judgment as to value.” (Id.)

The court in William Jefferson explains:

Judgmental errors subject to the four-year time limit typically involve a claim the assessor's determination of the base year value failed to reflect the property's fair market value. [Citation.] Nonjudgmental errors subject to correction at any time include (1) “an assessor's erroneous determination that a change of ownership occurred” [Citation.]; (2) “the assessor's failure to set a new base year value upon a change of ownership” [Citation.]; (3) “defects of a mechanical, mathematical, or clerical nature, not involving judgment as to value, where it can be shown from papers in the assessor's office or other evidence that the defect resulted in a base year value that was not intended by the assessor at the time it was determined” [Citation.] and (4) “errors or omissions that result from the taxpayer's fraud, concealment, misrepresentation, or failure to comply with legal requirements for furnishing information” [Citation.]”

(William Jefferson & Co., Inc. v. Assessment Appeals Board (2014) 228 Cal.App.4th 1, 10, emphasis added.)

The question is whether the assessor's erroneous determination would include the pled circumstances. The term erroneous generally connotes something in error, mistaken, or misled. The Assessor argues that a correction of an erroneous determination that the Property had changed ownership did not involve an exercise of the assessor ‘s judgment about value. However, the challenged decisions by the Assessor were not that the Assessor mistakenly set a base year value, but that the Assessor improperly valued the Property due to extrinsic fraud. The Board found, as matters of fact, that it was “indisputable” that the as of March 17, 2010, the November 2007 transfer was viewed by both parties as a 100 percent re-assessable change in ownership, the parties agreed that the $3.774 million base year value and made such representations to the board through a voluntary stipulation valid, the board duly equalized the base year value of the subject property at $3.77 million based on evidence presented by both parties, and that the stipulation was still binding despite any evidence of fraud or the 2012 the assessor’s reconsideration and redetermination of its 2007/2008 determination of the November 2007 transaction was a brief assessable change in ownership event. The Assessor’s initial decision to view the 2007 transfer was a re-assessable change in ownership certainly involving an issue of judgment. Further, the Court cannot view the Assessor’s 2012 redetermination as a failure to set a new base year value upon a change of ownership. Such determinations necessarily “involved” the valuations of the property. Indeed, the Board determined that it was without authority to reconsider Petitioner’s value recommendation of $3,774,000, which was the ultimate question posed below.