Court Orders Orange County Tax Collector to Defend Proposition 13 Lawsuit; Court Orders Assessor to Reconsider Chance to Appeal


Bellflower, California, March 19, 2002 – A judge today ordered Orange County Treasurer-Tax Collector John M. W. Moorlach added as a party to the pending lawsuit concerning the "recapture method" of property tax assessment that in December 2001 the court declared violates Proposition 13. The new action against the Tax Collector contends that Moorlach must notify by mail anyone who overpaid his or her taxes by $10 or more that a claim for refund of taxes may be filed. "Recapture method" refers to the practice of Orange County’s Assessor to increase real estate tax assessments more than 2 percent in one year, even though the property wasn’t newly constructed, and didn’t change ownership.

Moorlach, who did not attend today’s court hearing, will have one month to defend the case filed against him today by the Bellflower law firm Gangloff, Gangloff & Pool and Glendale law firm Knapp Petersen & Clarke. The case against the Tax Collector was filed by Seal Beach residents Robert Pool and his wife, Renee Bezaire. Pool and Bezaire recovered a $100 tax refund from Orange County for the 4 percent increase in their home’s 1998 assessment, after the County Assessment Appeals Board ruled in favor of the homeowners. In March 2000 the County sued its Appeals Board and the Seal Beach couple in Superior Court to recover the $100.

In December 2001, Superior Court Judge John M. Watson ruled for the homeowners, and declared the Assessor’s "recapture method" of assessment unconstitutional. By that time, however, the Assessor had already continued to apply the bogus recapture method to Pool’s property for 1999, 2000, and 2001.

"Of the more than 400,000 property owners in Orange County who are affected by the unconstitutional ‘recapture method’ of assessment," according to Pool, "only a small number are aware of the right to claim a refund. The required notice from the Tax Collector will assure that every affected person in the County knows his or her rights have been violated. Without notification by the Tax Collector many people will simply lose the opportunity to protect their rights."

Pool’s law firm has a website where taxpayers can obtain a refund claim form and learn more about how this ruling could affect residential, commercial or industrial property:

Other developments in the case focused on Orange County Assessor Webster J. Guillory’s opportunity to seek appellate court review of Judge Watson’s decision on the constitutionality of the "recapture method." The Assessor’s attorney told the court today that the Assessor believes that it is too late to challenge Watson’s December 2001 order. Judge Watson, supported by Pool, disagreed. The judge today ordered the Assessor’s attorney to advise the Assessor to make a decision whether he will challenge the court’s order against him within one week. The Assessor must notify the court of his decision by next Tuesday, March 26th.



Court Orders Los Angeles County to Stipulate Liability to All Affected Refund Recipients or Court Will Order Class Action Certified


Bellflower, California, March 22, 2002 – A judge today ordered Los Angeles County to file a stipulation before April 15, 2002, agreeing that the legal rulings in the lawsuit against the County apply to all affected taxpayers who received a property tax refund with the wrong amount of interest. If the County does not file the stipulation, or if the court rejects the stipulation, then the court will certify the class action against the County, the County Auditor-Controller, and County Treasurer-Tax Collector.

Superior Court Judge Charles McCoy, Jr., heard oral argument today on Roger Eldon Bacon’s motion for class certification in the case, Bacon vs. Sasaki, No. BS 058574. The suit charges Los Angeles County, the County Auditor-Controller, and County Treasurer-Tax Collector with failure to pay interest on property tax refunds as required by law; and with failure to notify taxpayers who received refunds since 1995 that they have the right to file a claim for additional interest.

Judge McCoy announced his intention to certify the class as requested by Bacon, unless the County agreed to apply the legal rulings on the case to all those to whom the County failed to pay interest. The County agreed to the judge’s recommendation, and was ordered to file a formally binding agreement in the court by April 15, 2002.

Bacon’s attorneys, Gangloff, Gangloff & Pool, of Bellflower, and Knapp Petersen & Clarke, of Glendale, will monitor the terms of agreement to be submitted by the County. Bacon’s attorneys estimate the amount of unpaid interest owed by County at $80 million.

Bacon’s class action lawsuit was filed in August 1999, after the County paid the wrong amount of interest on refunds of property taxes Bacon received for the 1992 through 1997 tax years. Bacon claims the County paid the wrong rate of interest and computed the interest for the wrong period of time, resulting in an underpayment to Bacon of about $2,000. One of Bacon’s attorneys, Robert A. Pool, previously sued the County, raising the same issues as Bacon. In 1997 Pool won a judgment of more than $300,000 against the County. The County appealed and lost the 1997 judgment awarded to Pool’s client, an aerospace manufacturer. But because the appellate decision was not published, Bacon’s suit alleges that the County did not change is practice of violating the interest law when making property tax refunds.

Attorney Pool called to Judge McCoy’s attention that a bill was introduced in the Sacramento last week, SB 2085, that, if signed into law, will eliminate the County’s duty to notify potential interest recipients of their right to claim the money to which they are entitled. Pool urges L.A. County taxpayers to oppose SB 2085.

For further information on this case, and on other class action litigation against the County, visit Gangloff, Gangloff & Pool’s website:



Orange County Superior Court Certifies Class Action Lawsuit against County of Orange for Violations of Proposition 13


Bellflower, California, December 17, 2002 – On Thursday, December 12, 2002, a judge ruled that any Orange County taxpayer whose property assessment went up more than 2 percent due to "recapturing" since 1979 is part of the certified class action lawsuit filed against the County of Orange in 2000 by a Seal Beach couple. Orange County Superior Court Judge John M. Watson last year, in December 2001, declared that the Orange County Assessor’s method of real estate valuation, dubbed "recapturing," violates Proposition 13, part of the state constitution. "Recapturing" means a real estate assessment increase of more than 2 percent from one tax year to the next, even though the property was not sold, did not change ownership, and was not newly constructed. The class certification order filed last Thursday expands the benefit of Judge Watson’s determination that "recapturing" is unconstitutional to hundreds of thousands of Orange County taxpayers.

The Bellflower law firm of Gangloff, Gangloff & Pool, in conjunction with Knapp, Petersen & Clarke of Glendale, represented the taxpayers, and have been appointed as attorneys for the formally certified class action. If upheld on appeal, the class action suit ultimately may result in $1 billion in illegally collected taxes being returned to Orange County taxpayers, according to County sources.


In 1998 Seal Beach homeowners Renee Bezaire and Robert Pool challenged the Assessor in an administrative hearing on the validity of the "recapturing" assessment method that raised their home’s assessment by 4 percent in a single year. Bezaire-Pool won that round, and received a tax refund of $100.55. Then in March 2000, the County of Orange sued the couple in superior court to recover the $100.55 refund. Ms. Bezaire and her husband, Mr. Pool, counter-sued the County and its Assessor, Webster Guillory, as a class action, on behalf of themselves and all other Orange County taxpayer victims of the "recapturing" practice. Last December, Judge Watson denied the County’s lawsuit, and ruled in favor of Bezaire-Pool, declaring that "recapturing" violates Proposition 13.

In March 2002, the Orange County Tax Collector, John Moorlach, was added to the lawsuit as another County defendant. A hearing before Judge Watson now is set for January 30, 2003, and will determine whether the Tax Collector must notify "recapture" victims of their right to file tax refund claims.

Before the December 12th ruling, County officials had estimated that the County may have to refund $285 million in taxes collected under the unconstitutional "recapturing" assessment practice. But given Judge Watson’s pronouncement last week

–– that the extent of the class membership may reach all the way back to 1979 –– County sources revised the liability estimate to $1 billion.

"We don’t yet know if the County’s figures are reliable. In the strict sense of this class action, no money will change hands," said Mr. Pool, who is a property tax attorney and member of Gangloff, Gangloff & Pool, as well as the Seal Beach homeowner whose "recapturing" assessment started the entire case. Attorney Pool added, "The County will not be ordered to write any checks at the end of this lawsuit. That’s because this lawsuit only sets the stage that may eventually lead to tax refunds of the money the County already illegally collected through the unconstitutional ‘recapturing’ method of assessment. Under our class action suit no taxpayer again will have to prove that ‘recapturing’ is unconstitutional, and the County only will be required to notify all ‘recapturing’ victims of their right to file refund claims for overpaid tax. In addition, we don’t expect the County to start refunding taxes anytime soon. Instead, we know the County defendants will appeal the rulings by Judge Watson to the highest court they can convince to review the ‘recapturing’ decision. Only when the appellate courts rule against the County will tax refunds begin to be processed. That’s probably several years away. But in true David-vs-Goliath fashion, the slingshot blow dealt to the County defendants by the Judge Watson’s approval of the case as a certified class action provides renewed strength and determination to press forward against enormous odds for the class action legal team."

The June 1978 voter initiative, Proposition 13, rolled back property assessments to their 1975 value, fixed property taxes at 1 percent of a property’s assessed value, and limited increases to a maximum 2 percent from year to year until the property is sold, changes ownership, or is newly constructed. In November 1978 voters enacted Proposition 8 to correct an omission from Proposition 13, and provide a mechanism to reduce a property’s "full cash value base" due to decline in value.

The Orange County Assessor (as well as every California county assessor) treats an assessment reduction (often called "Decline in Value," "Proposition 8 Adjustment," or "Economic Adjustment") as "temporary," and as exempt from the 2-percent cap on increased assessments. In fact, the Assessor recently mailed thousands of notices to taxpayers throughout the County that assert the Assessor’s view of the "temporary" nature and unlimited increase of so-called "Economic Adjustments." Even though Judge Watson ruled that "recapturing" violates Proposition 13 nearly a year ago, in July this year thousands of taxpayers throughout Orange County received "recapture" assessment increase notices, some increases exceeded 50 percent compared to prior years.

Judge Watson’s original decision made last December declared that a decline in value is not temporary, and is subject to the 2-percent cap on annual assessment increases imposed by Proposition 13. In other words, once a property’s value declines, its assessment cannot be raised more than 2 percent in a single year (until there is a sale, change in ownership, or new construction of that property). Judge Watson found this to be the plain language of the California Constitution, and reflects the intent of California voters who enacted Proposition 8 in November 1978.

The Orange County Board of Supervisors has voted not to appeal Judge Watson’s order; recommended that the Assessor immediately cease its practice of utilizing the "recapture" method; directed that the Assessor, the Tax Collector, or the Auditor-Controller notify all prospective taxpayers affected by the "recapture" method to file claims to protect their rights; and authorized the Assessor and Tax Collector to retain outside legal counsel at County expense to pursue their own appeal or further litigation.

Earlier this year the Board of Supervisors approved a litigation budget of $500,000 for the Assessor’s and the Tax Collector’s outside legal counsel in this case. Later this week the Board of Supervisors will consider the Assessor’s recent request for another $400,000 in legal fees to continue his opposition to the certified class action case.

For further information on this case, and on other taxpayer class action litigation, visit Gangloff, Gangloff & Pool’s website: