Ehp Glendale, LLC v. County of Los Angeles
193 Cal. App. 4th 262
| Cal. Ct. App. | 2011Background
- Hotel located in Glendale, 18-story structure with 351 rooms, purchased by Eagle in June 2005 for $79.8 million (real property, personal property, and some intangibles).
- Postclosing, Eagle received a $2.5 million refund from Hilton related to redevelopment agency profit participation, effectively reducing the purchase price to $77.3 million.
- Assessor reassessed the property for Prop. 13, initially enrolling $79.8 million total value, with allocations to land, improvements, and personal property.
- Eagle appealed to the Board arguing the assessor’s methodology was invalid and that intangible assets (franchise, workforce, service centers) should be deducted from the sale price in the assessment.
- Board heard extensive testimony; the deputy used an income capitalization approach and the Board adopted the assessor’s valuation, but did not deduct the $2.5 million redevelopment profit participation.
- Eagle filed this action for a property tax refund; the trial court granted summary judgment for Eagle on an incomplete administrative record and the County appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper on an incomplete record | Eagle | County | Summary judgment improper; record incomplete; triable issues remain |
| Whether the assessor’s income approach improperly failed to deduct intangibles | Eagle | County | Issue fact-based; not resolved as a matter of law |
| Whether the Board's valuation properly excluded non-taxable intangibles | Eagle | County | Triable issues of material fact; deference to Board on valuation remains |
| Standard of review for Board valuation decisions when reviewing a taxpayer challenge | Eagle | County | Board findings reviewed for substantial evidence; trial court cannot weigh credibility on summary judgment |
| Whether the entire administrative record must be before the trial court for substantial-evidence review | Eagle | County | Record incomplete; remand for proper record and trial |
Key Cases Cited
- Bret Harte Inn, Inc. v. City and County of San Francisco, 16 Cal.3d 14 (Cal. 1976) (full cash value methods; going-concern concept)
- County of Los Angeles v. Southern Cal. Edison Co., 112 Cal.App.4th 1108 (Cal. App. 2003) (valuation method and factual questions; substantial evidence review)
- Trailer Train Co. v. State Bd. of Equalization, 180 Cal.App.3d 565 (Cal. App. 1986) (board discretion; depreciation adjustments; factual disputes)
- Hunt-Wesson Foods, Inc. v. County of Alameda, 41 Cal.App.3d 163 (Cal. App. 1974) (debatable deductions; not a challenge to method but to alternative valuation)
- American Sheds, Inc. v. County of Los Angeles, 66 Cal.App.4th 384 (Cal. App. 1998) (substantial evidence review; entire record considerations)
- Dennis v. County of Santa Clara, 215 Cal.App.3d 1019 (Cal. App. 1989) (substantial evidence standard; board findings)
- GTE Sprint Communications Corp. v. County of Alameda, 26 Cal.App.4th 992 (Cal. App. 1994) (valuation method; legal challenge to method)
- Mola Development Corp. v. Orange County Assessment Appeals Bd., 80 Cal.App.4th 309 (Cal. App. 2000) (de novo vs substantial evidence review; record relevance)
- County of Stanislaus v. Assessment Appeals Bd., 213 Cal.App.3d 1445 (Cal. App. 1989) (valuation disputes; board expertise deference)
- Maples v. Kern County Assessment Appeals Bd., 103 Cal.App.4th 172 (Cal. App. 2002) ( burden of proof; purchase price as value indicator)
- Shell Western E & P, Inc. v. County of Lake, 224 Cal.App.3d 974 (Cal. App. 1990) (valuation experts; board credibility determinations)
- Domenghini v. County of San Luis Obispo, 40 Cal.App.3d 689 (Cal. App. 1974) (presumption of regular board action; deference to board)
- A. F. Gilmore Co. v. County of Los Angeles, 186 Cal.App.2d 471 (Cal. App. 1960) (credibility and weight of expert testimony; board findings)