CALIFORNIA STATE UNIVERSITY, FRESNO ASSOCIATION, INC., Plaintiff and Respondent, v. COUNTY OF FRESNO, Defendant and Appellant; CITY OF FRESNO et al., Interveners and Appellants. [No. F073149. Fifth Dist. Mar. 2, 2017.] CALIFORNIA STATE UNIVERSITY, FRESNO ASSOCIATION, INC., Plaintiff and Appellant, v. COUNTY OF FRESNO, Defendant and Respondent; CITY OF FRESNO et al., Interveners and Respondents.
No. F072324. | No. F073149.
Court of Appeal, Fifth District, California
March 2, 2017
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Daniel C. Cederborg, County Counsel, and Peter Wall, Deputy County Counsel, for Defendant and Appellant and Defendant and Respondent County of Fresno.
Bewley, Lassleben & Miller, Leighton M. Anderson, Joseph A. Vinatieri and Patricia Verdugo for Plaintiff and Respondent and Plaintiff and Appellant California State University, Fresno Association, Inc.
McCormick, Kabot, Jenner & Lew and Nancy A. Jenner for Intervener and Appellant and Intervener and Respondent City of Fresno.
Lozano Smith, David J. Wolfe and Jenell A. Van Bindsbergen for Intervener and Appellant and Intervener and Respondent City of Clovis.
OPINION
DETJEN, J.—
INTRODUCTION
County of Fresno (County) appeals from a judgment of the superior court entered on July 28, 2015, in favor of California State University, Fresno Association, Inc. (Association), in Fresno County Superior Court case No. 12CECG03791. Association appeals from the superior court‘s postjudgment order issued November 17, 2015, denying its motion for attorney fees in the same case.1
Association is a nonprofit public benefit corporation and auxiliary organization serving California State University, Fresno (University). Along with administering University‘s dining services, residence halls, bookstore, student union, and fitness and recreation center, Association operates and maintains Save Mart Center, an estimated 430,000-square-foot on-campus arena that hosts athletic, cultural, and entertainment events and seats up to 16,000 spectators.
In 2007, Association received property value assessments of Save Mart Center, and the related tax bills, for the period of 2003 through 2006. Association applied for reduced assessments pursuant to
On February 24, 2012, more than a year after Board mailed the notice, Association filed a property tax refund claim with County. County denied the claim.
On November 30, 2012, Association brought a property tax refund action against County pursuant to
On appeal, County again asserts the superior court lacked jurisdiction to consider Association‘s action because Association‘s February 24, 2012, claim was untimely. We agree.5
Section 5097, subdivision (a)(3)(A)(i) sets the procedural time limit within which a party in Association‘s position must file a claim with County for a refund of taxes. That procedural time limit is one year. That time limit is not affected by the timing of the party‘s payment of the property taxes due.
FACTUAL AND PROCEDURAL HISTORY
1. County‘s appeal.
Association and the Trustees of the California State University (Trustees) entered into a ground lease dated October 1, 2001, under which Association agreed to lease from Trustees certain undeveloped land on the University campus; undertake the planning, financing, construction, and operation of Save Mart Center; and convey to Trustees unencumbered title to the real property at the end of the lease term. At the time, Association was “the only vehicle for revenue bond financing for the university” and was “used as the financing vehicle to get [Save Mart Center] built.” Construction began in December 2001 and ended on November 1, 2003. Association issued $74,475,000 in revenue bonds to pay most of the building costs.
In fiscal year 2003, Trustees approved the systemwide revenue bond program. It was through that program that the bond debt incurred to construct Save Mart Center was refinanced in early 2005. Association and Trustees entered into a facility purchase contract dated March 1, 2005, under which Trustees agreed to purchase Association‘s right, title, and interest in and to Save Mart Center for the amount of the outstanding bonds. Association and Trustees then entered into a ground and facility lease dated March 1, 2005, under which Association agreed to lease Save Mart Center from Trustees; occupy, operate, and maintain Save Mart Center for the benefit of University; and convey to Trustees unencumbered title to the real property at the end of the lease term.
Association received a notice of supplemental assessment dated February 5, 2007, in which Assessor appraised Save Mart Center as of November 1, 2003, the date of its completion, and established a taxable value of $64.5 million. A supplemental property tax bill charged $461,477.74. On March 27, 2007, Association filed an assessment reduction application, which was not designated as a refund claim. Association then received a notice of enrollment of escape assessments6 dated May 31, 2007, in which Assessor retroactively appraised Save Mart Center as of the lien dates for 2004, 2005, and 2006 (see
Board conducted a bifurcated hearing on Association‘s applications. The first phase, scheduled for April 15 and 16, 2010, was “limited to the existence of an assessable property interest.” The second phase, scheduled for July 15 and 16, 2010, “relate[d] to valuation of the subject property.” Board announced its decision denying Association‘s applications on November 4, 2010. First, it concluded Association had a taxable interest in Save Mart Center. Second, utilizing the cost method of appraisal,7 Board ordered the following ” ‘equalized’ ” property values, which were lower than Assessor‘s original figures: (1) $62,528,309.34 as of November 1, 2003; (2) $62,840,950.88 as of January 1, 2004; (3) $45,143,297.43 as of January 1, 2005; (4) $45,257,328.97 as of March 1, 2005; and (5) $43,906,188.90 as of January 1, 2006. Board mailed a written notice of its decision to Association on November 4, 2010, and a written copy of its findings of fact on December 2, 2010. The notice did not advise Association to file a refund claim.
Association paid $4,190,859.84 in taxes and penalties on May 5, 2011, and filed a property tax refund claim on February 24, 2012. County, through its auditor-controller/treasurer-tax collector, denied the claim on August 24, 2012.
On November 30, 2012, Association brought a property tax refund action against County, averring Board‘s use of the cost method instead of the income method8 was legally erroneous. In an answer filed January 17, 2013, County alleged, inter alia, the action was “barred by the statute of limitations set forth in ...
“I‘m satisfied that ... Association received the notice and the findings. [¶] The presumption that they were mailed is not rebutted in my mind. My hang up comes ... with ... [s]ection 5097. The first line, no order for a refund under this article shall be made except on a claim. Right there number one, plain meaning, verified by the person who paid the tax. If there is no tax paid, my position is, and I am sure others may differ and maybe be settled at the [c]ourt of appeal. But ... it‘s my feeling and interpretation that verified by the person who paid the tax ... means that you can‘t seek a refund until the tax is paid.
“... [I]n this case, the decision and the findings of facts were prepared and sent out. I‘m satisfied that everybody had them by mid-December. [¶] I‘m satisfied and the record shows as demonstrated that ... Association paid the tax and penalties on May 5th, 2011, [less than] six months thereafter. . . . And that they filed their claim for refund on February 24th, 2012.
“... I understand the arguments. And if I‘m wrong, sobeit [sic], but these are my findings and I will deny. I‘ll find for [Association] with respect to the statute of limitations....”
In a statement of decision adopted July 25, 2015, the court reversed Board‘s November 4, 2010, decision, finding Board‘s application of the cost method “arbitrary, in excess of discretion, and in violation of the standards prescribed by law,” inter alia. Beforehand, the statement of decision clarified the court‘s stance on the timeliness of Association‘s refund claim:
“[S]ection 5097, subdivision (a)(3)(A)(i) is the applicable statute of limitations when an applicant has filed an assessment reduction application pursuant to section 1603 that does not state that the application is intended to also constitute a claim for refund, the county assessment appeals board makes a final determination on the application, and the assessment appeals board mails a written notice of its determination to the applicant that does not advise the applicant to file a claim for refund. In this case, it is undisputed that [Association] filed four assessment reduction applications pursuant to section 1603, that each of the assessment reduction applications specifically stated that they were not also claims for refund, that Board made a final determination on [Association]‘s four applications, and that the written notice of its determination did not advise [Association] to file a claim for refund.
“The Court finds that ... Board mailed out a written notice of its decision on [Association]‘s four assessment reduction applications on November 4, 2010[,] and mailed out a written copy of its findings of fact on December 2, 2010. Further, the Court finds that ... Board sufficiently mailed written notice of its final determination to [Association] when it mailed written notice
of its decision and written notice of its findings of fact to [Association]‘s cocounsel]. Therefore, since all of the factual prerequisites have been met, the Court finds that the statute of limitation[s] applicable to this action is the one-year statute of limitations established in ... section 5097, subdivision (a)(3)(A)(i) ....
“Consequently, [County] argues that, because [Association] did not file its claim for refund until February 2012, more than a year after ... Board mailed written notice of its decision to [Association] on November 4, 2010[,] and mailed written notice of its findings of fact on December 2, 2010, this action for a property tax refund is barred by ... section 5097, subdivision (a)(3)(A)(i). The Court disagrees. ‘It is elementary that a statute of limitations does not begin to run until the cause of action accrues. [Citations.] Equally basic is that a cause of action does not accrue “until the party owning it is entitled to begin and prosecute an action thereon” [citation], that is, not until “the last element essential to the cause of action” occurs.’ (Spear v. California State Auto[.] Assn. (1992) 2 Cal.4th 1035, 1040.) It is clear that the statute of limitations in ... section 5097, subdivision (a)(3)(A)(i) establishes a number of factual conditions to accrual of the right to file a claim for refund, but the Court finds that the statute does not state that accrual occurs, and the statute of limitations begins to run, when all of the factual conditions listed in the statute are met. This is because the statute does not mention the most important condition to accrual of the right to file a refund claim—payment of the disputed taxes.
“The law is similarly clear that a claim for refund pursuant to ... section 5097 cannot be made until after the taxes (and any penalties) have been paid. (...
§ 5097, subd. (a)(1) ; JPMorgan Chase Bank, N.A. v. City and County of San Francisco [ (2009)] 174 Cal.App.4th 1201, 1210.) Accordingly, since a refund claim cannot be properly made until after the disputed taxes are paid, the right to file a claim for refund does not accrue, and the statute of limitations in ... section 5097, subdivision (a)(3)(A)(i) does not start running, until after all of the factual conditions listed in the statute have been met and the disputed taxes have been paid. In this case, this means that, if [Association] had paid the disputed taxes before filing its assessment reduction applications, then the one-year statute of limitations would have commenced when ... Board mailed [Association] the final decision and findings of fact. However, since [Association] did not pay the disputed taxes before filing the assessment reduction applications, the one-year statute of limitations did not commence until [Association] paid the disputed taxes and all of the conditions for accrual of the right to file a refund claim were finally met.“[County] asserts that holding that the one-year statute of limitations does not commence until [Association] pays the disputed taxes will lead to absurd
results in the future because taxpayers would be able to wait a virtually unlimited amount of time to pay their disputed taxes and then will have another year after the date of payment to file a refund claim. The Court disagrees. Ignoring the multitude of penalties attendant to the tardy payment of taxes, ... ‘[“]The rule is well settled that when the plaintiff‘s right of action depends upon some act which he has to perform preliminarily to commencing suit, and he is under no disability or restraint in the performance of such act, he cannot suspend indefinitely the running of the statute of limitations by a delay in performing such preliminary act, and that if the time within which such act is to be performed is indefinite or not specified, a reasonable time will be allowed therefor, and the statute will begin to run after the lapse of such reasonable time.” And it has been uniformly held that unless there are peculiar circumstances affecting the question, a reasonable time is a period coincident with that provided in the statute of limitations for barring the action.’ (Bass v. Hueter (1928) 205 Cal. 284, 287.) “Therefore, in a case such as this one, it makes most sense that, once all of the conditions listed in ... section 5097, subdivision (a)(3)(A)(i) were met, but the disputed taxes had not yet been paid, the accrual of a right to file a refund claim depends on the applicant paying the outstanding taxes. Since no statute specifies the time within which an applicant must pay the disputed taxes or lose the right to file a refund claim, the Court finds that an applicant has a reasonable time of one year after the county assessment appeals board mails the applicant a written notice of its determination which does not advise the applicant to file a claim for refund because the statute of limitations established in ... section 5097, subdivision (a)(3)(A)(i) is one year. If the applicant pays the taxes within that year, then the statute of limitations begins to run on the date the tax is paid. If the applicant fails to pay the taxes within that year, the statute of limitations begins to run one year after all of the conditions listed in ... section 5097, subdivision (a)(3)(A)(i) are met.
“In this case, all of the conditions listed in ...
section 5097, subdivision (a)(3)(A)(i) were met no later than December 2, 2010, when ... Board mailed [Association] the written notice of its findings of fact and did not advise [Association] to file a claim for refund. However, since [Association] had not yet paid the disputed taxes, the one-year statute of limitations did not begin to run. ... [Association] paid the disputed taxes on May 5, 2011, less than a year after all of the conditions listed in ...section 5097, subdivision (a)(3)(A)(i) were met and within the one year of reasonable time. Hence, the one-year statute of limitations established in ...section 5097, subdivision (a)(3)(A)(i) began to run May 5, 2011. Since [Association] filed a claim for refund on February 24, 2012, less than a year later, the Court finds that [Association] timely filed its claim for refund with [County] and that thisaction is not barred by the one-year statute of limitations set forth in ... section 5097, subdivision (a)(3)(A)(i) .”
II. Association‘s appeal.*
...
DISCUSSION
I. The procedural time limit in section 5097, subdivision (a)(3)(A)(i) , within which Association‘s claim for refund of property taxes must be filed, is not affected by the date the disputed taxes are paid.
It is clear that property taxes must be paid before litigation challenging them can occur. “No legal or equitable process shall issue in any proceeding in any court against this State or any officer thereof to prevent or enjoin the collection of any tax. After payment of a tax claimed to be illegal, an action may be maintained to recover the tax paid, with interest, in such manner as may be provided by the Legislature.” (
“The important public policy behind [the ‘pay first, litigate later’ doctrine] ‘is to allow revenue collection to continue during litigation so that essential public services dependent on the funds are not unnecessarily interrupted.’ [Citation.]” (State Bd. of Equalization, supra, 39 Cal.3d at p. 638.) The California Supreme Court noted in an earlier decision:
” ‘The fear that persistent interference with the collection of public revenues, for whatever reason, will destroy the effectiveness of government has
*See footnote, ante, page 250.
been expressed in many judicial opinions. [Citation.] As was said by Mr. Justice Field in Dows v. City of Chicago, 11 Wall. (78 U.S.) 108, 110, “Any delay in the proceedings of the officer, upon whom the duty is devolved of collecting the taxes, may derange the operations of government, and thereby cause serious detriment to the public.“’ [Citation.]
” ’ “The prompt payment of taxes is always important to the public welfare. It may be vital to the existence of a government. The idea that every taxpayer is entitled to the delays of litigation is unreason.” [Citations.]’ [Citation.]” (State Bd. of Equalization, supra, 39 Cal.3d at pp. 638-639.)
Furthermore, the “pay first, litigate later” doctrine “rests on the premise that strict legislative control over the manner in which tax refunds may be sought is necessary so that governmental entities may engage in fiscal planning based on expected tax revenues.” (Woosley v. State of California (1992) 3 Cal.4th 758, 789; see Farrar v. Franchise Tax Bd. (1993) 15 Cal.App.4th 10, 20-21 [“The lesson of Woosley we take [is] that statutes governing administrative tax refund procedures, backed as they are by a plenary constitutional authority, are to be strictly enforced.” (fn. omitted)].)
Association is incorrect, however, in its position that the claim filing deadline in this case did not begin to run until after payment of the taxes sought to be refunded.
“[T]he Legislature has statutorily established a three-step process for handling challenges to property tax assessments and refund requests. The first
“No order for a refund under this article shall be made, except on a claim:
“(1) Verified by the person who paid the tax, his or her guardian, executor, or administrator.
“(2) Except as provided in paragraph (3), filed within four years after making the payment sought to be refunded, or within one year after the mailing of notice as prescribed in Section 2635, or the period agreed to as provided in Section 532.1, or within 60 days of the date of the notice prescribed by subdivision (a) of Section 4836, whichever is later.
“(3) [¶] (A) Filed within one year, if an application for a reduction in an assessment or an application for equalization of an assessment has been filed pursuant to Section 1603 and the applicant does not state in the application that the application is intended to constitute a claim for a refund, of ... the following event[] ..: [¶] (i) After the county assessment appeals board makes a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment of the property,
and mails a written notice of its determination to the applicant and the notice does not advise the applicant to file a claim for refund.”12,13
“The timely filing of a proper claim for refund is a statutory prerequisite to a refund action ....” (Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 34–35 (Plaza Hollister); accord, JPMorgan, supra, 174 Cal.App.4th at p. 1210 [” ‘No action shall be commenced or maintained ... unless a claim for refund has first been filed ....’ (
On appeal, the parties do not contest the following facts: (1) Association filed assessment reduction applications on March 27 and June 18, 2007; (2) Association did not designate these applications as refund claims; (3) Board made its final determination on the applications and mailed written notice of this determination to Association on November 4, 2010; (4) this notice did not advise Association to file a refund claim; (5) Association paid the outstanding taxes and penalties on May 5, 2011; and (6) Association filed a refund claim on February 24, 2012.
The issue before us is, therefore, one of statutory interpretation. “Questions of statutory interpretation, and the applicability of a statutory standard to undisputed facts, present questions of law, which we review de novo.” (Jenkins v. County of Riverside (2006) 138 Cal.App.4th 593, 604, citing Harustak v. Wilkins (2000) 84 Cal.App.4th 208, 212.) “Because the interpretation and application of a statute are questions of law, an appellate court is not bound by the trial judge‘s interpretation.” (Haworth v. Lira (1991) 232 Cal.App.3d 1362, 1367
“In ascertaining the meaning of a statute, we look to the intent of the Legislature as expressed by the actual words of the statute” (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1117), “giving them a plain and commonsense meaning” (County of Fresno v. Malaga County Water Dist. (2002) 100 Cal.App.4th 937, 941). “We examine the language first, as it is the language of the statute itself that has ‘successfully braved the legislative gauntlet.’ [Citation.] ‘It is that [statutory] language which has been lobbied for, lobbied against, studied, proposed, drafted, restudied, redrafted, voted on in committee, amended, reamended, analyzed, reanalyzed, voted on by two houses of the Legislature, sent to a conference committee, and, after perhaps more lobbying, debate and analysis, finally signed “into law” by the Governor. The same care and scrutiny does not befall the committee reports, caucus analyses, authors’ statements, legislative counsel digests and other documents which make up a statute‘s “legislative history.” [Citation.]” (Wasatch Property Management v. Degrate, supra, at pp. 1117-1118.)
“If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs.” (People v. Snook (1997) 16 Cal.4th 1210, 1215.) “When statutory language is clear and unambiguous there is no need for construction, and we will not indulge in it.” (Morton Engineering & Construction, Inc. v. Patscheck (2001) 87 Cal.App.4th 712, 716; see La Jolla Group II v. Bruce (2012) 211 Cal.App.4th 461, 476 [” ’ “An intent that finds no expression in the words of the statute cannot be found to exist.’ “’ “].) “We will not speculate that the Legislature meant something other than what it said. Nor will we rewrite a statute to posit an unexpressed intent.” (Morton Engineering & Construction, Inc. v. Patscheck, supra, at p. 716; accord,
Examining the language of
The sole reference to a deadline that is triggered by a claimant‘s tax payment is in
Furthermore,
Association argues for the conflation of paragraphs (2) and (3) by asserting: “The better reading of
Next, Association invites us to examine the legislative history. We decline. “[W]hen statutory language is clear and unambiguous, resort to the legislative history is unwarranted.” (Bonnell v. Medical Board (2003) 31 Cal.4th 1255, 1264; accord, People v. Maultsby (2012) 53 Cal.4th 296, 300, fn. 3; Red Mountain, LLC v. Fallbrook Public Utility Dist. (2006) 143 Cal.App.4th 333, 347.)
II. Section 5097, subdivision (a) is not subject to equitable tolling.
Association argues that it “at all times acted reasonably and in good faith in the pursuit of its dispute” with Assessor and so equitable tolling should preclude the forfeiture of its right to seek a property tax refund.
“Equitable tolling is a judge-made doctrine ‘which operates independently of the literal wording of the Code of Civil Procedure’ to suspend or extend a statute of limitations as necessary to ensure fundamental practicality
” ‘A statute of limitations is a statute that fixes the latest time within which an action may be brought.’ [Citation.]” (Utah Property & Casualty Ins. etc. Assn. v. United Services Auto. Assn. (1991) 230 Cal.App.3d 1010, 1025 (Utah Property); accord, Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.) “An action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.” (
Because statutes of limitations “fix the time for commencing suit” (Life Savings Bank v. Wilhelm (2000) 84 Cal.App.4th 174, 177), they “are distinguished from procedural limits governing the time in which parties must do an act” (ibid.). (Accord, 43 Cal.Jur.3d (2011) Limitation of Actions, § 1, pp. 16-17 [“Because they fix the time for commencing suit, statutes of limitations are distinguished from procedural limits governing the time in which parties must do an act. ... [E]xamples are statutes requiring certain things to be done within a prescribed time as a condition precedent to the right to recover in a subsequently commenced action, such as the filing of a claim against an estate or a governmental agency.” (fns. omitted)]; Turner & Banke, Cal. Practice Guide: Civil Procedure Before Trial, Statutes of Limitations (The Rutter Group 2016) ¶ 1:50 [“Many causes of action require that plaintiff make a timely demand on the defendant or give other notice of the claim before filing suit. Generally, these are not statutes of limitations. Rather, they are essential elements of the claim itself, and thus prerequisites to suit.“]; 3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 445, p. 566 [“Statutes of limitation, which fix the time for commencing actions, are to be distinguished from other procedural statutes fixing time to
Even assuming arguendo
“It is doubtful that state courts may apply the judicially created doctrine of equitable tolling to alter state tax refund procedures established by the Legislature pursuant to its constitutional grant of power. [Citations.] ... ‘[S]trict legislative control over the manner in which tax refunds may be sought is necessary so that governmental entities may engage in fiscal planning based on expected tax revenues.’ ” [Citation.]
” ‘Ordinarily limitations statutes use fairly simple language, which one can often plausibly read as containing an implied “equitable tolling” exception’ [citation], but ‘[e]quitable tolling is not permissible where it is inconsistent with the text of the relevant statute’ [citation]. In Lantzy, supra, 31 Cal.4th [at page] 371, our state Supreme Court rejected the plaintiff‘s argument that equitable tolling could extend the limitations period for suits based on latent construction defects under
Code of Civil Procedure section 337.15, subdivision (a) , which provides, ‘No action may be brought ... more than 10 years after the substantial completion of the development or improvement ...’ (Italics added.) The court concluded that this ‘stentorian’ language, combined with the statute‘s inclusion of several express exemptions to the limitations period and its stated purpose of protecting contractors from perpetual exposure to lawsuits, demonstrated that equitable tolling would not extend the limitations period for reasons not stated in the statute
itself. (Lantzy, supra, at pp. 373–374.) Similarly,
section 5097, subdivision (a) provides, ‘No order for a refund under this article shall be made...’ except upon the timely filing of a refund claim, andsection 5142, subdivision (a) provides, ‘No action shall be commenced...’ unless a claim for refund has been filed pursuant to section 5097. ... This language, similar to that in the statute considered in Lantzy, signifies an intent to restrict the doctrine of equitable tolling, which is consistent with the Legislature‘s plenary control over tax refunds and the necessity of strict compliance with the administrative refund procedures. [Citation.]” (JPMorgan, supra, 174 Cal.App.4th at pp. 1213-1214; accord, Bjorndal v. Superior Court (2012) 211 Cal.App.4th 1100, 1111-1113.)
To meet the procedural time limit of
III. Association‘s appeal challenging the superior court‘s refusal to award attorney fees is moot.*
...
DISPOSITION
The judgment regarding the Board‘s November 4, 2010, decision is reversed. Association‘s appeal of the judgment regarding attorney fees is dismissed. The case is remanded with directions to the superior court to dismiss the action. Costs on appeal are awarded to County.
Kane, Acting P. J., and Franson, J., concurred.
*See footnote, ante, page 250.