AALRR Attorneys Successfully Defend a Claim for Parcel Tax Refunds

On May 19, 2014, AALRR won a motion dismissing a Complaint filed by a developer against a school district in which the developer sought a refund of parcel taxes previously assessed and paid pursuant to two voter-approved parcel tax measures.

The plaintiff, Golden Gate Hill Development Company (“Golden Gate”) filed the action in Alameda Superior Court against the Albany Unified School District (“District”) alleging that Golden Gate was entitled to a refund of all  parcel taxes assessed and paid on its real property pursuant to District  parcel tax ballot Measures I and J, which were passed in 2009 (collectively, “Measures”).  Golden Gate sought the refund on the basis that the recent decision in Borikas v. Alameda Unified School District (2013) 214 Cal.App.4th 135, made the Measures illegal.  The Borikas decision held that voter approved parcel taxes must be structured as a flat rate per parcel to meet the uniformity requirement of Government Code 50079.  Measures I and J have a tiered rate structure.

AALRR successfully argued that the taxes imposed by the Measures were legal and could not be invalidated retroactively based on Borikas.  This is because the Measures had previously been validated (meaning they were legal as a matter of law) under the validation action statutes.  Government Code section 50077.5 provides that school district parcel tax ballot measures adopted under Government Code section 50079 can only be challenged under the validation procedures of Code of Civil Procedure section 860.  Section 860 provides that such challenges must be brought within sixty (60) days.  In this case, Golden Gate filed its Complaint approximately four (4) years after the sixty (60) day deadline had run.  The court agreed with this argument on demurrer and ordered the Complaint dismissed.   An appeal of this decision by Golden Gate has not yet been filed.

The implications of this case extend beyond the District.  There are many school district parcel tax measures that have been passed prior to the Borikas decision with a tiered rate structure.  The holding in this case confirms that these previously validated measures are immune from challenge beyond the sixty (60) day limitations period of section 860, notwithstanding the recent decision in the Borikas case.

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