197 Cal. App. 4th 890
Cal. Ct. App.2011Background
- AvalonBay Communities, Inc. was assessed a 10 percent delinquency penalty after its second property tax installment was paid late.
- Avalon sought cancellation under Revenue and Taxation Code section 4985.2, arguing the late payment was due to inadvertent employee error and outside its control.
- The Tax Collector denied cancellation, determining the late payment resulted from employee error within Avalon’s control.
- Avalon petitioned for writ of mandate, asserting mandatory cancellation under §4985.2 or, alternatively, a neutral evidentiary hearing.
- The trial court held that §4985.2 requires lack of ordinary negligence and that Avalon’s delay was due to its own negligence, denying cancellation and dismissing an administrative hearing request, though ordering a written procedure for appeals.
- On appeal, Avalon challenged both the statutory interpretation of §4985.2 and the right to an administrative hearing; the court affirmed the trial court’s decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §4985.2 require cancellation when delay is caused by taxpayer negligence? | Avalon argues no cancellation if delay was inadvertent employee negligence. | Tax Collector contends cancellation requires circumstances beyond the taxpayer’s control, excluding mere employee error. | No cancellation when delay results from the taxpayer’s own employee negligence. |
| Is subdivision (b) applicable where partial payment was made but the second installment was delinquent? | Avalon contends subdivision (b) applies because an inadvertent error affected the amount paid. | Subdivision (b) applies only to underpayment within 10 days of shortage notice, not to untimely payment of the second installment. | Subdivision (b) does not apply; late second installment triggers the delinquency penalty without relief under (b). |
| Right to a due process administrative hearing on §4985.2 claims? | Avalon seeks an administrative evidentiary hearing before a neutral arbiter. | Tax Collector need not provide a formal hearing for every penalty cancellation claim. | Due process does not require an administrative hearing; a written explanation suffices and the outcome was correct as a matter of law. |
Key Cases Cited
- Strumpfer v. Westoaks Investment #27, 139 Cal.App.4th 1038 (Cal. Ct. App. 2006) (mandatory cancellation when predicates met; 'may' not discretionary where predicates proven)
- ZC Real Estate Tax Solutions Ltd. v. Ford, 191 Cal.App.4th 378 (Cal. Ct. App. 2010) (subdivision (a) does not allow cancellation for taxpayer’s own mistake where control fails)
- First American Commercial Real Estate Services, Inc. v. County of San Diego, 196 Cal.App.4th 218 (Cal. Ct. App. 2011) (avoidability of error and lack of control negate §4985.2(a) relief)
- Acco Contractors, Inc. v. McNamara & Peepe Lumber Co., 63 Cal.App.3d 292 (Cal. Ct. App. 1976) (corporation acts through its agents; employee acts imputable to employer)
- Fiol v. Doellstedt, 50 Cal.App.4th 1318 (Cal. Ct. App. 1996) (corporate actions attributable to employees; employer responsibility for negligence)
- Reber v. Superior Court, 189 Cal.App.2d 622 (Cal. Ct. App. 1961) (procedural mandamus principles and when no genuine factual issue exists)
- Hinrichs v. County of Orange, 125 Cal.App.4th 921 (Cal. Ct. App. 2004) (harmless error analysis in due process context)
- Valtz v. Penta Investment Corp., 139 Cal.App.3d 803 (Cal. Ct. App. 1983) (1090 procedures where no genuine factual issue exists)