Judge: Michelle Williams Court, Case: 21STLC00703, Date: 2022-09-12 Tentative Ruling
Case Number: 21STLC00703 Hearing Date: September 12, 2022 Dept: 74
21STLC00703 LIONEL
A. WYATT vs LOS ANGELES COUNTY OFFICE OF THE ASSESSOR
Defendant County of Los Angeles Demurrer to Plaintiff's
Verified First Amended Complaint for Refund of Property Taxes
TENTATIVE RULING: The demurrer is SUSTAINED without leave to
amend.
Background
On January 26, 2021, Plaintiff Lionel A. Wyatt, as
Trustee of the Wyatt Children’s Trust filed this action against the Los Angeles
County Office of the Assessor County of Los Angeles. Plaintiff filed the First
Amended Complaint on February 24, 2021 asserting causes of action for: (1) refund
of property tax overpayments; (2) violation of California Constitution Art.
XIII A, sections 1 and 2; (3) determination of a reversal of assessments; (4)
declaratory relief; and (5) unjust enrichment.
On February 1, 2022, the Court reclassified this action
as an unlimited jurisdiction case and transferred the action to Department 74.
Demurrer
On
August 5, 2022, Defendant County of Los Angeles filed a demurrer to each of the
causes of action asserted in the First Amended Complaint on the grounds that
the action is untimely and the only relief available is for a tax refund.
Opposition
In opposition, Plaintiff contends the action was
timely filed, he has standing, and adequately alleged constitutional
violations.
Reply
The Court did not receive a timely reply. (Code Civ.
Proc. § 1005(c).)
Meet and Confer
The demurrer is accompanied by the declaration of Drew
Taylor. The declaration merely states that counsel “emailed Mr. Wyatt explaining why a
demurrer was warranted,” which does not satisfy the meet and confer
requirement. Pursuant to Code of Civil Procedure section 430.41(a), “the
demurring party shall meet and confer in person or by telephone with the party
who filed the pleading that is subject to demurrer.” An email is not sufficient.
However,
“[a] determination by the court that the meet and confer process was
insufficient shall not be grounds to overrule or sustain a demurrer.” (Code
Civ. Proc. § 430.41(a)(4).) The Court shall address the merits of the demurrer.
Discussion
Standard
A demurrer for sufficiency tests whether the
complaint states a cause of action. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers,
courts read the allegations liberally and in context. In a demurrer proceeding,
the defects must be apparent on the face of the pleading or via proper judicial
notice. (Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (Code Civ.
Proc., §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege
ultimate facts sufficient to apprise the defendant of the factual basis for the
claim against him. (Semole v. Sansoucie
(1972) 28 Cal. App. 3d 714, 721.) A complaint need not allege evidentiary facts
noting plaintiff’s proof. (C.A. v.
William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) A
“demurrer does not, however, admit contentions, deductions or conclusions of
fact or law alleged in the pleading, or the construction of instruments
pleaded, or facts impossible in law.” (S.
Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732.)
A
special demurrer to a complaint is appropriate when the grounds of the pleading
are uncertain, ambiguous, or unintelligible. (Code Civ. Proc. § 430.10(f);
Beresford Neighborhood Assn. v. City of
San Mateo (1989) 207 Cal.App.3d 1180, 1191.) Courts typically disfavor
demurrers based on uncertainty, which the court strictly construes even when
the pleading is uncertain in some respects. (Khoury v. Maly’s of California, Inc. (1993) 14
Cal.App.4th 612, 616.)
The
demurrer rules apply equally to Judicial Council form complaints. (See People
ex rel. Dept. of Transportation v. Superior Court (1992) 5 Cal.App.4th
1480, 1484.)
Timeliness and Sufficiency of Tax
Refund Action
Defendant
contends Plaintiff’s complaint seeking a tax refund is untimely. (Dem. at
7:4-8:9.) As stated by the Court in Steinhart v. County of Los Angeles
(2010) 47 Cal.4th 1298:
Article XIII also specifies
that “[t]he Legislature shall pass all laws necessary to carry out [article
XIII's] provisions.” (Art. XIII, § 33.) Pursuant to this constitutional
command, the Legislature has statutorily established a three-step process for
handling challenges to property tax assessments and refund requests. The first
step is the filing of an application for assessment reduction under section
1603, subdivision (a), which provides: “A reduction in an assessment on the
local roll shall not be made unless the party affected or his or her agent
makes and files with the county board [of equalization] a verified, written
application showing the facts claimed to require the reduction and the
applicant's opinion of the full value of the property.” The second step, which
occurs after payment of the tax, is the filing of an administrative refund
claim under section 5097, subdivision (a), which provides in relevant part that
“[n]o order for a refund ... shall be made except on” the timely filing of a
verified claim for refund. By statute, an application for assessment reduction
filed under section 1603 “also constitute[s] a sufficient claim for refund
under [section 5097] if” it states that it “is intended to constitute a claim
for refund. If [it] does not so state, [the applicant] may thereafter and
within the [specified time] period ... file a separate claim for refund of
taxes extended on the assessment which the applicant applied to have reduced
pursuant to [s]ection 1603 ....” (§ 5097, subd. (b).) The third and final step
in the process is the filing of an action in superior court pursuant to section
5140, which provides that a person who paid the property tax may bring an
action in superior court “against a county or a city to recover a tax which the
board of supervisors of the county or the city council of the city has refused
to refund on a claim filed pursuant to Article 1 (commencing with Section 5096)
of this chapter.” A court action may not “be commenced or maintained ... unless
a claim for refund has first been filed pursuant to Article 1 (commencing with
Section 5096).” (§ 5142, subd. (a).)
(Steinhart,
supra, 47 Cal.4th at 1307–1308.)
Defendant
argues the action is untimely pursuant to Revenue and Tax Code section 5141(a),
which provides “[a]n action brought under this article, except an action
brought under Section 5148, shall be commenced within six months from and after
the date that the board of supervisors or city council rejects a claim for
refund in whole or in part.” “The statute of limitations applicable to claims
against cities and counties for property tax refunds is the six-month period
set forth in Revenue and Taxation Code section 5141, subdivision (a). That
period commences when the public entity denies the claim for refund in whole or
in part.” (Geneva Towers Ltd. Partnership v. City of San Francisco (2003)
29 Cal.4th 769, 782.)
Plaintiff
challenges “erroneous assessments and appraisals in 2017.” (FAC ¶ 8.) Plaintiff’s
FAC attaches the County of Los Angeles Assessment Appeals Board’s Notice of
Board Action dated June 26, 2019 indicating the Board denied Plaintiff’s appeal
based upon his contention that the “Change of Ownership – Base Year Value is
Incorrect.” (FAC ¶ 8, Ex. 14.) Plaintiff did not file this action until January
26, 2021, well-beyond the six-month deadline imposed by Revenue and Taxation
Code section 5141(a). Plaintiff’s contention in opposition that there is a
four-year statute of limitations is not supported by California law. Plaintiff
cites Revenue and Tax Code section 5097, (Opp. at 3:30-4:5), which is a claims
procedure and does not provide the statute of limitations for this court
action. (California State University, Fresno Assn., Inc. v. County of Fresno
(2017) 9 Cal.App.5th 250, 270 (“Section 5097, subdivision (a) is not a statute
of limitations . . . section 5097, subdivision (a) is a claims procedure.”).) Accordingly,
Plaintiff’s claim for a tax refund is untimely and the demurrer is properly
sustained on this basis.
Defendant
also notes Plaintiff’s refund allegations seek to apply an incorrect standard.
(Dem. at 8:1-8.) Plaintiff alleges “the defendants erroneously and illegally
choose to assess the subject real property by employing the ‘former fair market
value’ (using comparable sales) standard, as opposed to the post proposition 13
amendment employing the ‘full cash value’ (purchase price) standard, when
appraising and determining the base value.” (FAC ¶ 7.) Plaintiff admits to
purchasing the property at a foreclosure sale. (FAC ¶ 12.) Accordingly, the
full cash value standard and presumption imposed by Revenue and Tax Code
section 110 does not apply. (Phillis v. County of Humboldt (2020) 59
Cal.App.5th 432, 445 (“a foreclosure sale is by nature not an open market
transaction supporting application of the section 110 purchase price
presumption.”).)
Plaintiff
incorrectly contends Phillis “is an appellant [sic] court decision and
not a final decision of the judiciary – thus, it cannot be applied in this
case.” (Opp. at 6.) This Court is bound to follow decisions, such as that in Phillis,
made by the Court of Appeal. (Auto Equity Sales, Inc. v. Superior Court of
Santa Clara County (1962) 57 Cal.2d 450, 455 (“Decisions of every division
of the District Courts of Appeal are binding upon all the justice and municipal
courts and upon all the superior courts of this state, and this is so whether
or not the superior court is acting as a trial or appellate court.”).)
The
demurrer to the first cause of action is SUSTAINED without leave to amend.
Tax Refund Action as Exclusive Remedy
Defendant
argues the remaining causes of action fail because Plaintiff’s exclusive remedy
is one for a tax refund. (Dem. at 8:10-9:13.) While captioned differently, each
of Plaintiff’s separately stated causes of action arise from his claim that
property taxes were improperly assessed. “Any action challenging the merits of
an assessor's base year value determination 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. See also Schoenberg v. County of Los Angeles
Assessment Appeals Bd. (2009) 179 Cal.App.4th 1347, 1351 (“a tax refund
action, . . . is the exclusive remedy for challenging on the merits a property
tax assessment.”).) Accordingly, all of Plaintiff’s claims fail for the same
reasons stated above as Plaintiff’s sole cause of action is one for a tax
refund.
Based
upon the allegations and exhibits to the FAC as well as the arguments made by
the parties, the demurrer is SUSTAINED in its entirety without leave to amend.
(Schonfeldt v. State of California (1998) 61 Cal.App.4th 1462, 1465 (“If
there is no liability as a matter of law, leave to amend should not be
granted.”); McGee v. Weinberg (1979) 97 Cal.App.3d 798, 802 (“When a
complaint shows on its face that it is barred by a statute of limitations, a
general demurrer may be sustained and a judgment of dismissal may be
entered.”).)