Connolly v. County of Orange

• Decision Date: 27 February 1992
• Docket Number: No. S016686,S016686
• Citation: 4 Cal.Rptr.2d 857,824 P.2d 663,1 Cal.4th 1105
• Court: California Supreme Court
• Parties: , 824 P.2d 663, 72 Ed. Law Rep. 1089 Robert CONNOLLY, et al., Plaintiffs and Respondents, v. COUNTY OF ORANGE, et al., Defendants and Appellants.

Page 857

4 Cal.Rptr.2d 857

1 Cal.4th 1105, 824 P.2d 663, 72 Ed.

Law Rep. 1089

Robert CONNOLLY, et al., Plaintiffs and Respondents, v. COUNTY OF ORANGE, et al., Defendants and Appellants.

No. S016686.

Supreme Court of California In Bank.

Feb. 27, 1992.

As Modified March 26, 1992.

[1 Cal.4th 1108] [824 P.2d 665] David R. Chaffee, Deputy County Counsel, Santa Ana, for defendants and appellants.

[1 Cal.4th 1109] Christine Helwick, University of California, Oakland, for plaintiffs and respondents.

BAXTER, Justice.

We are asked to decide whether article XIII, section 3, subdivisions (a) and/or (d) of the California Constitution ¹ precludes imposition of an ad valorem tax on privately held leasehold interests in real property owned by the University of California and improved with homes owned and occupied by the university employees who hold the leases. Because appellate decisions have created uncertainty as to the tax status of these interests, ² and similar properties comprise a significant part of the tax base of several local governments and school districts, ³ we address this question notwithstanding significant procedural issues that have arisen in the course of this litigation as a consequence of the manner in which plaintiffs have proceeded.

We conclude that plaintiffs are not entitled to the tax exemption they seek. Although leasehold interests in university property may be property that is exempt from taxation under the exemption afforded by article XIII, section 3, subdivision (d) (section 3(d)), when a lessee of university property uses that property as a site for a privately owned residence, the property is not "used exclusively for public schools, community colleges, state colleges, and state universities" as required by section 3(d).

I PROCEDURAL/JURISDICTIONAL ISSUES

A. Trial Court.

Plaintiffs are the Board of Regents of the University of California (Regents); the Irvine Campus Housing Authority (ICHA), a nonprofit corporation associated with the Irvine campus of the university; and Robert Connolly. Connolly is a professor employed at the Irvine campus who sued on The petition/complaint alleged that County had refused to exempt the possessory interests of some 260 individual homeowners from property taxes. Plaintiffs sought in the first count, identified as a petition for writ of mandate, to have the homeowners' possessory interests in the land underlying the homes exempted from local property tax. In the second count, identified as a complaint for declaratory relief, plaintiffs claimed that the possessory interests in the land underlying the homes were exempt from property tax, but sought a declaration with respect to the possessory interests in the homes. ⁴ In each count they relied on section 3(d).

behalf of himself and other similarly situated owners of homes constructed by the ICHA in the University Hills faculty housing project on land owned by the university and leased to the homeowners. Plaintiffs initiated this action in the Orange County Superior Court by a pleading styled as a petition for writ of mandate or in the alternative a complaint for declaratory relief, naming only the County of Orange (County) as defendant.

County's demurrer, urging the bar of Revenue and Taxation Code section 4807, ⁵ was overruled. County then answered, admitting that plaintiff Connolly's property had been assessed, but asserting as affirmative defenses the failure of plaintiffs to claim either an exemption or a refund, failure to exhaust administrative remedies, and the exclusive remedy of payment followed by an action for a refund. (See Rev. & Tax.Code, § 5140 et seq.)

After denying a motion for summary judgment by County, and soliciting amendment of the petition/complaint to narrow the class, and after plaintiffs agreed to seek summary judgment only on behalf of Connolly, the trial court granted plaintiffs' "motion for issuance of a writ" as to plaintiff Connolly only and limited to exempting his "leasehold" interest from taxation, conditioned on his filing an amended claim for exemption with the county assessor. County appealed. The parties then stipulated to entry of judgment directing County to grant a property tax exemption for some 200 class members on their possessory interests in the land underlying the homes they owned upon their submission of claims for exemption and identification of the claimant as a full-time employee of the university. County appealed from this judgment. The appeals were consolidated in the Court of Appeal.

Although a consent or stipulated judgment is not normally appealable, an exception is recognized when "consent was merely given to facilitate an appeal following adverse determination of a critical issue." (Building Industry Assn. v. City of Camarillo (1986) 41 Cal.3d 810, 817, 226 Cal.Rptr. 81, 718 P.2d 68.)

Additional issues as to the propriety of this appeal arise, however, as a result of the manner in which the judgments were rendered. Arguably the order granting relief These procedures and rulings do, however, give rise to questions of appellate jurisdiction similar to those which troubled the Court of Appeal in Highland Development Co. v. City of Los Angeles (1985) 170 Cal.App.3d 169, 178-179, 215 Cal.Rptr. 881. We join the Cohen v. Equitable Life Assurance Society, supra, 196 Cal.App.3d 669, 242 Cal.Rptr. 84, panel in emphasizing that procedural irregularities of this kind in the trial court often make appellate jurisdiction questionable. ⁶

                [824 P.2d 667]  to Connolly was appealable even though it did not dispose of the class for whom relief was sought in the same cause of action (see Aetna Cas. etc.  Co. v. Pacific Gas & Elec. Co.  (1953) 41 Cal.2d 785, 264 P.2d 5) since he and the class could be considered different parties.  The practice is highly questionable since that left no party representing the class which had been certified.  However, because the court [1 Cal.4th 1112] failed to enter judgment dismissing the second cause of action, the appeals from each judgment did not fall within recognized exceptions to the one final judgment rule.  (See 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 43, p. 66.)   Nonetheless, the two judgments that were rendered disposed of all of the issues between the parties.  Arguably, therefore, the Court of Appeal had jurisdiction if we deem the second count of the petition/complaint as having been dismissed.  (See  Justus v. Atchison (1977) 19 Cal.3d 564, 568, 139 Cal.Rptr. 97, 565 P.2d 122;  Wilson v. Sharp (1954) 42 Cal.2d 675, 677, 268 P.2d 1062.   But see  Cohen v. Equitable Life Assurance Society (1987) 196 Cal.App.3d 669, 242 Cal.Rptr. 84.)
                

B. Court of Appeal.

County did not address the exemption issue in its briefs in the Court of Appeal, relying instead on a challenge to the jurisdiction of the trial court to issue a writ of mandamus directed to County which, it argued, had no duty to grant exemptions from real property taxation. County also argued that mandate did not lie because no present duty to perform the act (granting exemptions) existed; because granting exemptions was a discretionary act not subject to judicial compulsion by mandate; and because plaintiffs had a plain, speedy, and adequate remedy at law making resort to mandate unnecessary. Finally, County again raised the failure of the homeowner plaintiffs to exhaust administrative remedies as a bar to relief.

The Court of Appeal gave greater recognition to the jurisdictional and procedural impediments to issuance of a writ of mandate than did the trial court, and reversed the judgment. It was equally determined to resolve the exemption question, however, and purported to do so in an opinion which simultaneously recognized that mandate could not issue against County and that the Assessor of the County of Orange, who would have been the proper respondent, had not been named as a party to the action. ⁷

The Court of Appeal held that plaintiffs were not entitled to mandamus, noting the preemptive effect of Revenue and Taxation Code section 4807: "No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceedings in any court against any county, municipality, or district, or any officer The court also held that plaintiffs had sued the wrong party since it is the assessor of a county who has the duty to perform the acts sought to be mandated by plaintiffs. The court recognized that Code of Civil Procedure section 1085 authorizes issuance of the writ "to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station; ..." and it will not lie if the named respondent has no duty to perform the act. ⁸ The duties of the assessor are established by statute. (Rev. & Tax.Code, § 401 et seq.) As a county officer, the assessor is subject to supervision by the board of supervisors of the county (Gov.Code, § 25303), but the county may not be compelled to perform the duties of the office. ⁹ The assessor is, therefore, a necessary party. (Peck v. Board of Supervisors (1891) 90 Cal. 384, 385-386, 27 P. 301. See also Code Civ.Proc., § 389.)

thereof, to prevent or enjoin the collection of property taxes sought to be collected."

Finally, the Court of Appeal held, even the assessor had no present duty to grant an exemption because Connolly had not filed a timely claim for exemption, and, in any case, issuance of an extraordinary writ was unnecessary because the homeowner plaintiffs had an adequate remedy at law by which to obtain relief. Revenue and Taxation Code sections 5096 et seq. ¹⁰ and 5140 ¹¹ created those remedies.

The Court of Appeal therefore reversed the judgment of the trial court and ordered that the petition for extraordinary relief be denied. Before doing so, however, the court also addressed the plaintiffs' argument that they were entitled to a tax exemption, and concluded...