JULY 1, 2002
DEVELOPMENTS IN THE ORANGE COUNTY 2% LAWSUIT AS OF JULY 1, 2002
Orange County Tax Collector Added As Defendant:
On March 19, 2002, Judge John M. Watson of the Orange County Superior Court, granted the motion of Robert Pool and Renee Bezaire (the Seal Beach homeowners whose residence is the starting point of the suit) to amend their lawsuit, and to add Orange County Tax Collector John M. W. Moorlach as an additional defendant in the pending lawsuit known as County of Orange vs. Orange County Assessment Appeals Bd. No. 3, Superior Court case number 00CC03385.
Already named as defendants in the case are the County of Orange and Orange County, County Board of Supervisors, and County Assessor Webster Guillory.
The issue in the case that involves the Tax Collector is his statutory duty to notify by mail each county taxpayer who overpaid his or her property taxes by $10 or more. The Tax Collector must inform each of those taxpayers that a claim for refund of the overpaid tax may be presented to the county board of supervisors within 4 years of the date of payment of the overpaid tax, or within 1 year of the date of the Tax Collector’s notice, whichever is later.
The import of this duty imposed by law on the Tax Collector is that the taxpayer’s opportunity to present an administrative claim to the county begins when the Tax Collector gives the notice. Thus, if a taxpayer does not find out about the right to file an administrative claim within 4 years of the tax being overpaid, an additional year is allowed once the Tax Collector gives the required notice to the taxpayer.
Tax Collector’s Motion to Challenge Judge Watson Rejected:
Mr. Moorlach’s first act upon his being named as a defendant in the pending litigation was to file a to have the pending lawsuit, transferred from Judge John M. Watson to a new judge.
Gangloff, Gangloff & Pool, in conjunction with Knapp Petersen & Clarke, (the law firms representing the county taxpayers) opposed the Tax Collector’s motion.
The court heard oral arguments on the Tax Collector’s motion on April 29, 2002. On May 28, 2002, Judge Watson denied Mr. Moorlach’s motion. On June 10, 2002, the Tax Collector filed a petition in the California Court of Appeal, seeking to reverse Judge Watson’s May 28th order.
On June 13, 2002, the Court of Appeal denied the Tax Collector’s petition. Thus, the case remains assigned for all purposes to Judge Watson in the Superior Court.
Assessor’s Motion to Terminate Class Action Proceedings:
In March 2002, Assessor Webster Guillory filed two motions in the case: the first, a motion opposing the addition of the Tax Collector as a new defendant (overruled on 3/19/02); and the second, a motion to terminate the class action aspect of the case.
[Note: The pending lawsuit (although filed in 2000) still is not formally declared as a class action. Trial court judge, John M. Watson, must first hold a hearing on a motion, yet to be filed by Mr. Pool and Ms. Bezaire, called a Motion for Class Certification. Mr. Guillory’s second motion in March 2002 is directed at preempting the taxpayers’ right to have a hearing on class certification.]
Judge Watson denied Mr. Guillory’s second motion on May 30, 2002.
Assessor’s Motion to Block Disclosure of All "Recaptured" Taxpayers:
On June 13, 2002, Assessor Guillory filed a third motion in Judge Watson’s court. His latest motion seeks to prevent his identifying all of the taxpayers in Orange County whose assessments he unconstitutionally "recaptured" between 1996 and 2001. "Recaptured" means that the Assessor increased an assessment more than 2 percent from one year to the next, even though the real property was not sold, did not undergo a change in ownership, and was not newly constructed in the year of the increase. It is the "recapture" method of assessment that Judge Watson declared late last year violates the California Constitution.
Judge Watson will hear oral argument on Mr. Guillory’s latest motion on July 15, 2002.
Assessor Petitions the Court of Appeal to Reverse Judge Watson, and to Stay the Trial Court’s Further Action:
Even though Judge Watson has not yet ruled on class certification, on June 19, 2002, Assessor Guillory filed his own petition to the California Court of Appeal. That petition seeks to reverse Judge Watson’s ruling of May 30, 2002, against the Assessor (i.e., the Assessor’s second motion, above). The Assessor also asked the appellate court to immediately stay (stop) the trial court proceedings.
On June 19, 2002, the Court of Appeal invited Mr. Pool and Ms. Bezaire to file an informal reply to the Assessor’s petition in the appellate court by July 10, 2002. The appellate court also announced that it will allow Mr. Guillory until July 22, 2002, to respond to the brief to be filed by the taxpayers.
After the taxpayers and the Assessor have provided the information requested by the Court of Appeal, the appellate court will announce whether it wants further information (legal briefs), or will rule on the Assessor’s petition as it presently stands.
November 2, 2001
On Friday, November 2, 2001, Orange County Superior Court Judge John W. Watson declared that a longstanding practice of the Orange County Assessor violates Proposition 13.
Have you owned your home for the last several years?
Were your taxes raised more than 2 percent per year?
You may be entitled to a refund.
Judge Watson ruled unconstitutional the Assessor's method of "recapturing" in a single year more than 2 percent of assessed value losses previously recognized due to the declines in the real estate market. The judicial decision overturns more than 20 years of routine assessment practices in Orange County. The decision casts a pall over similar assessment practices in the entire state.
Gangloff, Gangloff & Pool (in association with Knapp, Petersen & Clarke) represent the Seal Beach homeowners who successfully challenged the local assessment practice. Gangloff, Gangloff & Pool engaged the services of Property Tax Assistance Co., Inc. established in 1976, to facilitate the filing of refund claims.
The ruling resulted in a tax refund for the Seal Beach homeowners of about $100. However, if upheld on appeal, the trial court's decision will impact millions of property owners throughout California, and will change the assessment practice of every county assessor in the state. Close to 500,000 Orange County residential property owners alone stand to benefit from Watson's ruling. In addition, the decision likely affects commercial and industrial properties as well. Literally hundreds of millions of tax dollars are at stake in the case, which is filed as a class action.
You may be eligible to file a claim for refund if:
1. Your property value increased by more than two percent between any two consecutive tax years.
2. The above increase was not due to an establishment of new base year value, a change of ownership, new construction (i.e. increased value due to construction improvement) or a change in use of the property, (i.e. agricultural to commercial use).
This is a grassroots campaign to get the word out to all property owners. Please let anyone that you believe may qualify know about this website.