Dreyer's Grand Ice Cream, Inc. v. County of Kern
218 Cal. App. 4th 828
| Cal. Ct. App. | 2013Background
- Dreyer's Grand Ice Cream challenged the property tax assessment on equipment and personal property in novelty ice cream lines.
- The plant had 27 production lines; preexisting novelty lines were in dispute after expansion in 2005.
- The parties agreed on real property, buildings, and fixtures value; issue was equipment value in the novelty lines.
- Plaintiff claimed external obsolescence from excess capacity due to lack of market demand for novelty products.
- Rule 6 requires replacement cost to be reduced for obsolescence; plaintiff sought an underutilization adjustment.
- Board and trial court applied substantial evidence review and rejected the underutilization/market-demand theory; judgment affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 6 requires automatic economic obsolescence adjustment. | Rule 6 mandates reduction for obsolescence when applicable. | Adjustment depends on evidence of external factors; not automatically required. | No, adjustment not mandatory without showing external obsolescence. |
| Whether the record supports underutilization/excess capacity as external obsolescence. | There was persistent overcapacity due to lack of demand. | Evidence shows capacity expansion and demand-driven production; no proven external factor. | Record does not establish external factors; substantial evidence supports board. |
| Whether the trial court used correct standard of review on valuation method. | Taxpayer challenges valuation method; de novo review should apply. | Issue was factual/burden of proof; substantial evidence standard applies. | Trial court correctly applied substantial evidence review. |
Key Cases Cited
- Norby Lumber Co. v. County of Madera, 202 Cal.App.3d 1352 (Cal. App. Dist. 1988) (board’s merits review is conclusive; no de novo trial for value disputes)
- Maples v. Kern County Assessment Appeals Bd., 96 Cal.App.4th 1007 (Cal. App. Dist. 2002) (questions of valuation method are legal; arbitrary or in excess of discretion reviewed de novo)
- In re I.W., 180 Cal.App.4th 1517 (Cal. App. Dist. 2009) (where burden of proof fails, appellate review assesses whether evidence compels finding as a matter of law)
- Texaco Producing, Inc. v. County of Kern, 66 Cal.App.4th 1029 (Cal. App. Dist. 1998) (substantial evidence standard governs when both sides present evidence)