58 Cal.App.5th 246
Cal. Ct. App.2020Background
- Super A Foods, Inc. (the Corporation) owned two Los Angeles properties; all voting stock was issued to the Amen Family Trust, while nonvoting stock was held by the Trust and several other individuals.
- The Corporation transferred the properties to the Trust; the Assessor concluded this was a change in ownership and reassessed the properties at about $10 million (from ~$5 million).
- The Assessment Appeals Board reversed, reasoning that section 62(a)(2) measures ownership by voting stock only and the Trust owned 100% of the voting stock, so no reassessment was required.
- The Assessor petitioned for writ of administrative mandate; the trial court vacated the Board’s decision and upheld the reassessment.
- The Court of Appeal considered whether the word “stock” in Revenue & Taxation Code §62(a)(2) means only voting stock or all classes of stock, and whether the State Board of Equalization’s contrary interpretation warranted deference.
- The Court affirmed the trial court: “stock” in §62(a)(2) means all classes of stock (voting and nonvoting), and proportional ownership is measured by all stock; applying section 60’s “primary economic value” test, nonvoting shareholders had an economic interest that was lost on transfer, so reassessment was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether “stock” in Rev. & Tax. Code §62(a)(2) means only voting stock or all classes of stock | Amen: “stock” ambiguous; should be read as voting stock so Trust owned the property both before and after transfer (no change) | Assessor (Prang): plain meaning of “stock” includes all classes (voting and nonvoting); proportional interests change -> reassessment | Court: “stock” means all classes of stock; proportional interests changed; reassessment upheld |
| Whether the State Board of Equalization’s interpretation (that “stock” means voting stock) controls | Amen/BOE: BOE interpretation and administrative guidance should be given deference to promote uniformity | Assessor: BOE guidance is not dispositive; courts independently interpret statutes | Court: gave limited weight to BOE guidance; independently interpreted statute and declined to adopt BOE’s view |
Key Cases Cited
- Pacific Southwest Realty Co. v. County of Los Angeles, 1 Cal.4th 155 (Cal. 1991) (explains change in ownership under Proposition 13 and the section 60 “primary economic value” test)
- 926 North Ardmore Ave., LLC v. County of Los Angeles, 3 Cal.5th 319 (Cal. 2017) (confirms that a change in ownership triggers reassessment)
- Yamaha Corp. of America v. State Bd. of Equalization, 19 Cal.4th 1 (Cal. 1998) (agencies’ statutory interpretations are persuasive but courts independently interpret statutes)
- Wells v. One2One Learning Foundation, 39 Cal.4th 1164 (Cal. 2006) (statutory interpretation should avoid rendering any part superfluous)
- Rudd v. California Casualty Gen. Ins. Co., 219 Cal.App.3d 948 (Cal. Ct. App. 1990) (general principles guiding statutory interpretation)