Nordlinger v. Lynch

Decision Date03 December 1990
Docket NumberNo. B048719,B048719
Citation275 Cal.Rptr. 684,225 Cal.App.3d 1259
CourtCalifornia Court of Appeals Court of Appeals
PartiesStephanie NORDLINGER, an individual, Plaintiff and Appellant, v. John J. LYNCH, in his capacity as Tax Assessor for Los Angeles County, and the County of Los Angeles, Defendants and Respondents. Civ.

Hall & Phillips, Carlyle W. Hall, Jr., Mary Louise Cohen and Ann E. Carlson, Brent N. Rushforth, Los Angeles, for plaintiff and appellant.

De Witt W. Clinton, County Counsel, David L. Muir, Senior Deputy County Counsel, and Albert Ramseyer, Senior Associate County Counsel, for defendants and respondents.

Ajalat & Polley, Charles R. Ajalat, Terry L. Polley and Richard J. Ayoob, Los Angeles, Mayer, Brown & Platt and Michael W. McConnell, Chicago, Ill., Howarth & Smith and Don Howarth, Barash & Hill, Alexander H. Pope, T. Larry Watts and Richard A. Kolber, Los Angeles, William K. Rentz, Santa Cruz, amici curiae on behalf of plaintiff and appellant.

John K. Van de Kamp, Atty. Gen., San Francisco, Arthur C. De Goede, Asst. Atty. Gen., Los Angeles, Ronald A. Zumbrun, Anthony T. Caso and Johathan M. Coupal, Sacramento, Trevor A. Grimm, General Counsel, Los Angeles, amici curiae on behalf of defendants and respondents.

KLEIN, Presiding Justice.

Plaintiff and appellant Stephanie Nordlinger (Nordlinger) appeals an order of dismissal following the sustaining without leave to amend of a demurrer to her first amended complaint. The demurrer was interposed by defendants and respondents John J. Lynch in his capacity as Tax Assessor for Los Angeles County (the Assessor) and the County of Los Angeles (sometimes collectively referred to as the Assessor).

SUMMARY STATEMENT

A dozen years have elapsed since California voters launched the so-called "tax revolt" and adopted Proposition 13 by a wide margin, adding article XIII A to the California Constitution. 1 In the intervening years, some disenchantment has set in with the "welcome stranger" clause, which bases real property assessments on acquisition cost rather than on current value. Generally, this system disproportionately burdens recent purchasers of real property, whose property is assessed at full current value, and favors longtime property owners, whose assessments reflect their outdated acquisition values. Articles and editorials have questioned the fairness of the acquisition value approach, especially as to younger persons, first-time home buyers and newcomers to the State.

While disillusionment with Proposition 13 and the welcome stranger aspect in particular has been mounting, it was the recent United States Supreme Court opinion in Allegheny Pitt. v. Webster County (1989) 488 U.S. 336, 109 S.Ct. 633, 102 L.Ed.2d 688 (Allegheny), which provided the impetus for the present attack on Proposition 13. Some of the language used by the court in Allegheny has emboldened the Proposition 13 critics. They rely on such phrases as "[t]he constitutional requirement is the seasonable attainment of a rough equality in tax treatment of similarly situated property owners." (Id., 488 U.S. at p. 343, 109 S.Ct. at p. 638, 102 L.Ed.2d at p. 697.) They also invoke Allegheny's related requirement "to seasonably dissipate the remaining disparity between [older] assessments and the assessments based on a recent purchase price." (Ibid.) Observers additionally point to Allegheny's pronouncement that " '[i]ntentional systematic undervaluation by state officials of other taxable property in the same class contravenes the constitutional right of [those] taxed upon the full value of [their] property.' " (Id., 488 U.S. at p. 345, 109 S.Ct. at p. 639, 102 L.Ed.2d at p. 698.)

Taken out of context, these statements appear to apply to the fact situation brought before this court by the plaintiff herein, Nordlinger, and the amici curiae on her behalf. 2 This challenge has compelled this court to consider whether Allegheny has undermined Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 149 Cal.Rptr. 239, 583 P.2d 1281 (Amador ), wherein the California Supreme Court upheld the constitutionality of article XIII A.

After a thorough analysis, we conclude Allegheny does not prohibit the states from adopting an acquisition value assessment method. That decision merely prohibits the arbitrary enforcement of a current value assessment method. Because Allegheny is inapposite, Amador remains controlling. Any modification of the provisions of Proposition 13 is for the political process, not the courts. The order of dismissal therefore is affirmed.

FACTUAL & PROCEDURAL BACKGROUND
1. Key provisions of article XIII A in controversy.

At the June 1978 primary election, the electorate adopted Proposition 13, thereby adding article XIII A to the California Constitution. The initiative measure changed the system of real property taxation and imposed important limitations upon the assessment and taxing powers of state and local governments. (Amador, supra, 22 Cal.3d at p. 218, 149 Cal.Rptr. 239, 583 P.2d 1281.)

Article XIII A provides in relevant part at section 1: "(a) The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property."

The article defines "full cash value" in two ways: "the county assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. All real property not already assessed up to the 1975-76 full cash value may be reassessed to reflect that valuation." (Art. XIII A, § 2, subd. (a), italics added.)

The full cash value base thereafter may be adjusted to "reflect from year to year the inflationary rate not to exceed 2 percent for any given year ..., or may be reduced to reflect ... a decline in value." (Art. XIII A, § 2, subd. (b).)

2. The reassessment of Nordlinger's home reflected the acquisition cost.

As gleaned from the papers filed, Nordlinger purchased her first home on November 1, 1988, after living in rental property for 25 years and saving her money. She paid $170,000 for the subject property, located in the Baldwin Hills area of Los Angeles. The residence is part of a tract of single family homes which was developed in 1947. It measures 1,114 square feet and is situated on a 8,200 square foot lot.

The previous owners, the Smiths, had purchased the property in 1986 for $121,500. While the Smiths owned the property, its assessed value was based on their $121,500 purchase price. In early 1989, the Assessor sent Nordlinger a notice of assessed value change and a joint consolidated supplemental tax bill which reflected a reassessment of the property to the new acquisition value of $170,000. The ownership change resulted in a tax increase on an annual basis of $454.

Nordlinger paid the tax bill "under protest." She then unsuccessfully filed a verified application for reduction of assessment and claim for refund with the Assessment Appeals Board.

3. The complaints.

After filing an original complaint on September 28, 1989, Nordlinger filed a first amended complaint against the Assessor on October 25, 1989, seeking declaratory relief pursuant to Revenue and Taxation Code section 4808 3 and a refund of property taxes. We summarize the essential allegations as follows:

The fair assessed value of Nordlinger's property was $30,000, taking into account the assessment of comparable properties in the neighborhood. For example, one neighbor's home contains square footage identical to Nordlinger's and sits on a lot which is 900 square feet larger than Nordlinger's. That home is assessed at $35,820 based on its 1975 valuation. Another neighbor's home is 44 square feet greater than Nordlinger's on a lot 1,040 square feet larger than Nordlinger's. That home is assessed at $36,107 based on its 1975 valuation. Thus, Nordlinger's annual property tax is nearly five times that paid by these neighbors on their comparable properties.

The examples reveal the welcome stranger approach of Proposition 13 has resulted in gross disparities in the assessed values of generally comparable properties. In 1978, immediately after the adoption of Proposition 13, the tax disparity between similar properties purchased in 1978 and those owned since 1975-76 was approximately 1.4 to 1. In 1989, the disproportionate assessments averaged 5 to 1 in Los Angeles County, while in certain neighborhoods, such as Venice, the disparity was 15 to 1, or more. As property values increase in the future, Proposition 13's discriminatory impact against more recent purchasers will be magnified.

Proposition 13 was promoted as a means of limiting government spending and making property taxes fair and within the ability of taxpayers to pay. However, it created an arbitrary system which imposed disparate tax burdens on owners of similarly situated properties without regard to the use of the real property, the burden the property placed on the government, the actual value of the property, or the financial means of the property owner.

The first cause of action sought a declaratory judgment that article XIII A is unconstitutional insofar as it requires owners of similarly situated properties to be taxed disparately.

The second cause of action sought an $896 refund of property taxes for 1988-89.

4. The demurrer.

The Assessor demurred to both causes of action on the ground Amador had determined the provisions of article XIII A do not violate the equal protection guarantees of the state and federal constitutions.

The Assessor also demurred to the first cause of action on the ground it was time-barred because the original complaint was not filed within 12 months after article XIII A became effective, as required by Revenue and Taxation Code section 4808.

5. Nordlinger's...

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10 cases
  • Nordlinger v. Hahn
    • United States
    • United States Supreme Court
    • 18 Junio 1992
    ...... App. to Pet. for Cert. D2. .           The California Court of Appeal affirmed. Nordlinger v. Lynch, 225 Cal.App.3d 1259, 275 Cal.Rptr. 684 (1990). It noted that the Supreme Court of California already had rejected a constitutional challenge to ......
  • Pfizer Inc. v. LANCASTER COUNTY BD., No. S-99-908 to S-99-913.
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    • Supreme Court of Nebraska
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    ...assessment method, but merely prohibits the arbitrary enforcement of a current value assessment method. See Nordlinger v. Lynch, 225 Cal. App.3d 1259, 275 Cal.Rptr. 684 (1990), affirmed sub nom. Nordlinger v. Hahn, Pfizer also claims that the legitimate state interests served by the statute......
  • City of Rancho Cucamonga v. Mackzum
    • United States
    • California Court of Appeals
    • 20 Marzo 1991
    ...courts apply the same standard in determining whether legislation violates equal protection guarantees. In Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 275 Cal.Rptr. 684, the court, in ruling on an . equal protection challenge to the assessment limitations of article XIII A, instructed, ......
  • Cruz v. Pacificare Health Systems, Inc., A093002.
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    ...intent, nor the Broughton court's application of that rationale to state statutory claims. (Cf. Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1264-1265, 1274-1275, 275 Cal.Rptr. 684 [California courts bound by state Supreme Court's rejection of federal constitutional challenges to state l......
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2 books & journal articles
  • Proposition 13, Revisited.
    • United States
    • 1 Febrero 2021
    ...Challenge, N.Y. Times (July 7,1991), https://perma.cc/64VP-P49W. (195.) Nordlinger, 505 U.S. at 7-8. (196.) Nordlinger v. Lynch, 225 Cal. App. 3d 1259, 1264-65 (Ct. App. 1990), aff'd sub nom. Nordlinger v. Hahn, 505 U.S. 1 (197.) Id. at 1268. (198.) Id. at 1274. (199.) Johnston & Roderi......
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    • 1 Octubre 2003
    ...courts. The California Court of Appeals affirmed the trial court finding Proposition 13 constitutional. Nordlinger v. Lynch, 225 Cal. App.3d 1259, 275 Cal. Rptr. 684 (1990). The Supreme Court of California denied review and the U.S. Supreme Court granted (21) Id. (22) Id. The court in Nordl......

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