Petition for Writ of Certiorari — Hillcrest Development v. County of Riverside

Supreme Court, 0.3.

( FILED

991708 APR 2 4200

No. OFFICE GE THE CLERK

IN THE SUPREME COURT

OF THE

UNITED STATES

October Term, 1999

HILLCREST DEVELOPMENT,

a California Limited Partnership,

Petitioner,

VS.

COUNTY OF RIVERSIDE, a Public Entity;

R. WAYNE WATTS, Treasurer-Tax Collector

of the County of Riverside;

N.R.L.L., INC., a California Corporation;

SPAN, L.L.C., a Limited Liability Company,

Respondents.

Petition for Writ of Certiorari

To The Court of Appeal of California

Fourth District, Division Two

PETITION FOR WRIT OF CERTIORARI

*RONALD K. VAN WERT, ESQ.

A Member of Ronald K. Van Wert,

A Professional Corporation

3200 Park Center Drive, Suite 1110

Costa Mesa, California 92626

Telephone: (714) 546-2400

*Counsel of Record for Petitioner

Hillcrest Development, a

California Limited Partnership

a

QUESTIONS PRESENTED FOR REVIEW

WHERE NO ANTICIPATORY TAX RELIEF IS

SOUGHT BY A PROPERTY OWNER, ARE A

MUNICIPALITY AND ITS TAX COLLECTOR WHO

DEPRIVED THE PROPERTY OWNER OF HIS REAL

PROPERTY WITHOUT DUE PROCESS WHOLLY

IMMUNE FROM SUIT UNDER 42 U.S.C. §1983 AS THE

RESULT OF THE “PRINCIPLE OF COMITY” AND Lies

“TAX INJUNCTION ACT”.

ARE PRIVATE PERSONS WHO PARTICIPATE

WITH A MUNICIPALITY AND ITS TAX COLLECTOR IN

THE DEPRIVATION OF REAL PROPERTY IN VIOLATION

OF THE DUE PROCESS CLAUSE WHOLLY IMMUNE

FROM SUIT UNDER 42 U.S.C. §1983 AS A RESULT OF

THE “PRINCIPLE OF COMITY” AND THE “TAX

INJUNCTION ACT”.

(i)

LIST OF PARTIES TO THE PROCEEDINGS

IN THE COURT BELOW

The caption of the case in this Court contains the names

of all parties to the proceedings in the Court below. Rule 29.6

of the Rules of the Supreme Court does not apply in that the

Petitioner is a limited partnership.

(ii)

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW .......... (1)

LIST OF PARTIES TO THE PROCEEDINGS

oe). fee 8 3 204, Se eee (i1)

ME GAMUEENEESD oo cee bebe ke cee ea ta es ss (111)

pp Ba ig yg 848s |. Sr (vi)

PETITION FOR WRIT OF CERTIORARI ............ ]

CITATIONS OF THE OFFICIAL

AND UNOFFICIAL REPORTS ............... 2

STATEMENT OF JURISDICTION .................. 3

CONSTITUTIONAL PROVISIONS, TREATISES,

STATUTES, RULES AND REGULATIONS

EE bed oid iséee Cae eee ke anne ohh ees 3 4

UP Pert e OO ERR CADE 5 nce ce cece es esens 6

:. PEEP EIUIE cd cece en sacduseecne 6

ps STAGE AS TO WHEN THE FEDERAL

QUESTIONS SOUGHT TO BE

REVIEWED WERE RAISED AND HOW

THEY WERE PASSED UPON BY THE

EE a level ee hanga sane aan eue es 7

cS STATEMENT GF FACTS ..46.52042%.. 8

4. ARGUMENT

A. Summary of Reasons for Review by

the Supreme Court ............. 1]

l.

Conflict with Decisions of

This Court and with

Decisions of the United

States Courts of Appeal ... 11

The Unpublished Decision

May Still Be Used by the

~ Tax Collector or the County

of Riverside to Curtail Any

Future Proceeding or Set

Up a Defense of

Reasonableness ......... 1]

In Order to Ensure National

Uniformity, Only this Court

Should Determine if Agencies

Involved in Tax Collection

Should be Entirely Immune

from Suit Under the Civil

|. Seer res 12

(iv)

B. This Court Should Grant Review

Because the Court of Appeal Has

Created Complete Immunity From a

Civil Rights Suit for the County

of Riverside and Its Officials in All

Tax Related Cases Which is

Contrary to a Decided Case by This

a ccaxnwh cee eeieeaees 13

.. Any Expansion of the Principles

Established in Fair Assessment and

National Private Truck Should Only

Be Done by This Court Because of

the Importance of Having National

Uniformity in Civil Rights Actions 14

D. The Expansion of the “Tax

Injunction Act” and the Principle of

Comity by the California Court of

Appeal is Unwarranted and is

Contrary to Decisions of This

CS vhs bec eee eres aes 14

E. Review is Necessary Because the

California Court of Appeal has

Extended the Principle of Comity

and Anti-Injunction Act Even to the E

Non-Governmental Defendants ... 16

5. et eR Serre rrer Tr rrr Tr 17

(v)

TABLE OF AUTHORITIES

Federal Cases

California v. Grace Brethren Church

G57 US. FFU IGED ov vce cer ck csesnsneses 11, 16

BSS UB. DOT LUG IO) occ nace cguvevanecces 15, 16

Ww - Vv

~yisih By fi. | rrr eye er 16

Dows v. City of Chicago

CUR fs) y, Brey rr 16

F.E. Trotter, Inc v. Watkins

069 F.2d 1312 CO" Cer. 19GP) «5 caves ca sscces 16

454.U.S. TOD CISS]) «occ face cence 6, 7,10, 12-14

Harlow vy. Fitzgerald

457 U.S. GOO CISEZ) oon cet onesvcuancesecenuns 16

Jefferson County, Ala. v. Acker

§27-U.S. 423, 119 S.Ct. 2069 (1999) ........ 11,14

Keleher v. New England Telephone & Telegraph Co

947 F.2d $47 (24 Cin. 1991)... cnc ccevenes 13,15

(vi)

Leatherman v. Tarrant County Narcotics

S07 US. 163(1993) ccna csscec sees 11,13

mM ST US. 922 (1982) noone ccc vev csc ceesee r

M ee

a ee seas gre 9, 11,17

SISUS $82 (1998) 2s... 67,1314 16

eo

Pe Sls ET so sk ea ee ckee neces 7, 10, 14

Constitut

United States Constitution, Section | of

pe ree re ere eer re 4

Federal Statutes and Rules

28 United States Code §1257(a) ... 2... ccc cece eee 3

ee ME TIE TE BU OGE 6o nee kk Ki ea ewes cause 3 5

42 United States Code §1983............. 4,6, 7,9, 10, 16

OE TE TO ENE ow oa no hhc dd ace wens eas 3

De CUE TNO BIG) kc oo ook ce ekss cr incoxs 3

Supreme Court Rule 29.6... .. Pele fC eee ue ease aOR (i1)

S S i Rul

California Revenue and Taxation Code §3725......... 7,9

California Rules of Court, Rule 977(b) ................ 12

Code of Civil Procedure §340, subd 3 ................ 10

a ea =

2 California Civil Appellate Practice, §22.7

(California Continuing Education of the Bar, 1999) 12

9 Witkin, California Procedure, Appeal §716

PU oes eda vae beter eure tied oe 12

(viil)

PETITION FOR WRIT OF CERTIORARI

To The Court of Appeal of California

Fourth District, Division Two

Petitioner, HILLCREST DEVELOPMENT (“Hillcrest

Development”), respectfully prays that a writ of certiorari issue

to review the judgment of the California Court of Appeal, for

the Fourth District, Division Two, entered in the above-entitled

case on November 9, 1999 and in which discretionary review

was denied by the California Supreme Court on February 2,

2000.

CITATIONS OF THE OFFICIAL

AND UNOFFICIAL REPORTS

There are no official or unofficial reports. The Opinion

of the Court of Appeal of California is set forth in its entirety in

the Appendix.

STATEMENT OF JURISDICTION

On February 2, 2000, the California Supreme Court

denied discretionary review of the judgment of the Court of

Appeal which had been entered on November 9, 1999. No

rehearing was requested and no extension of time to file the

Petition has been sought.

Upon This Court to Review on a Writ of Certiorari the

Judgment.

The statutory provision conferring jurisdiction on this

Court jurisdiction to review on a Writ of Certiorari the judgment

and orders in question is 28 U.S.C. §1257(a).

3. Compliance With Rule 29.4(b) or (c) of the

Rules of the Supreme Court

Notice is not required under Rule 29.4(b) or 29.4(c) of

the Rules of the Supreme Court.

CONSTITUTIONAL PROVISIONS, TREATISES,

STATUTES, RULES AND REGULATIONS INVOLVED

Section 1 of AMENDMENT XIV to the United States —

Constitution:

“Section 1. All persons born or naturalized in

the United States, and subject to the jurisdiction

thereof, are citizens of the United States and of

the State, wherein they reside. No State shall

make or enforce any law which shall abridge the

privileges or immunities of citizens of the

United States; nor shall any State deprive any

person of life, liberty, or property, without due

process of law; nor deny to any person within its

jurisdiction the equal protection of the laws.”

42 U.S.C. §1983

“Every person who, under color of any statute,

ordinance, regulation, custom, or usage, of any

State or Territory or the District of Columbia,

subjects, or causes to be subjected, any citizen of

the United States or other person within the

jurisdiction thereof to the deprivation of any

rights, privileges, or immunities secured by the

Constitution and laws, shall be liable to the party

injured in an action at law, suit in equity, or

other proper proceeding for redress, except that

in any action brought against a judicial officer

for an act or omission taken in such officer's

judicial capacity, injunctive relief shall not be

granted unless a declaratory decree was violated

or declaratory relief was unavailable. For the

purposes of this section, any Act of Congress

applicable exclusively to the District of

4

Se mall

Columbia shall be considered to be a statute of

the District of Columbia.”

28 U.S.C. § 1341

“The district courts shall not enjoin, suspend or

restrain the assessment, levy or collection of any

tax under State law where a plain, speedy and

efficient remedy may be had in the courts of

such State.”

STATEMENT OF THE CASE

1. INTRODUCTION

Without providing Hillcrest Development with notice of

the tax sale as required by the Due Process Clause, Respondents

County of Riverside, a municipality (“County of Riverside”),

and R. Wayne Watts, its tax collector (“Tax Collector”), sold

Hillcrest Development's million dollar real property for about

15% of its value at the tax sale to Respondent N.R.L.L., Inc. As

a result of the tax sale, all delinquent property taxes were paid.

Within a month of discovering that its property had been sold,

Hillcrest Development sought to recover the property through

a civil rights action brought under the provisions of 42 U.S.C.

§1983. It did not seek any anticipatory relief as to any tax or to

stop, enjoin, suspend or restrain the collection of taxes. It did

not question the validity of the tax that was collected or its

amount. Regardless, the California Court of Appeal ruled that

the Respondents are wholly immune from a suit under 42

U.S.C. §1983 as a result of this Court's decisions in Fair

Assessment in Real Estate Assn. v. McNary, 454 U.S. 100

(1981) and National Private Truck Council, Inc. v, Oklahoma

Tax Commissioner, 515 U.S. 582 (1995).

As a result of the California Court of Appeal’s decision,

Hillcrest Development and similarly situated property owners

in the County of Riverside have no remedy for the failure of the

County of Riverside and the Tax Collector to provide notice as

required by the Due Process Clause prior to the deprivation of

their property. ;

2. STAGE AS TO WHEN THE FEDERAL QUESTIONS

SOUGHT TO BE REVIEWED WERE RAISED AND

HOW THEY WERE PASSED UPON BY THE

COURTS

The federal questions were first raised in the Complaint

filed by Hillcrest Development when it sought relief under the

Civil Rights Act [42 U.S.C. §1983] to invalidate the tax deed or

for damages as a result of the violation of Hillcrest

Development’s right to Due Process. The defendants sought

summary judgment based upon a claim that the action was

barred by Section 3725 of the California Revenue and Taxation

Code. Hillcrest asserted that the applicable statute of limitations

was the California personal injury statute based upon this

Court’s determination in Wilson v. Garcia, 471 U.S. 261 (1985).

The places in the record where the matters appear are the

Complaint filed by Hillcrest Development, the Motion for

Summary Judgment filed by the County of Riverside and Tax

Collector, the Opposition to the Motion filed by Hillcrest

Development, and the Order granting the Motion for Summary

Judgment.

On appeal, and in their Brief, the County of Riverside

and the third party defendants raised for the first time the claim

that this Court's decision in Fair Assessment, supra, and

National Private Truck, supra, barred a §1983 suit against a

municipality and its Tax Collector as a matter of law. The

Court of Appeal determined that, though Hillcrest Development

was correct as to the applicable statute of limitations, the §1983

action was nevertheless barred by the principles established by

this Court in Fair Assessment and National Private Truck. The

place where the determination was made by the Court of Appeal

is at pages A-19 - A-22 [Appendix] of its Opinion.

The federal questions were raised again in Hillcrest

Development’s Petition for Review in the California Supreme

Court. which Petition was summarily denied.

3. STATEMENT OF FACTS

The Statement of Facts is based upon undisputed facts

or facts accepted as true for purposes of deciding the Motion for

Summary Judgment brought by the Tax Collector and the

County of Riverside.

On March 26, 1996, and without actual notice to

Petitioner Hillcrest Development, the Tax Collector sold

Hillcrest Development's tax defaulted real property to N.R.L.L.

The County of Riverside and the Tax Collector failed to make

a reasonable effort to obtain either Hillcrest Development’s last

known address or even the phone number and address of its

general partner (“General Partner”), whose name and county of

residence were known to the Tax Collector, as well as the

County of Riverside, and whose phone number and address

were listed in the phone directory of the County of residence,

which County (Orange) adjoined the County of Riverside. The

fictitious business statement filed by Hillcrest Development in

Orange County also listed its correct address and phone number.

Other information was also in the possession of the County of

Riverside or the Tax Collector which would have enabled either

of them to ascertain the current address of Hillcrest

Development, its General Partner, or counsel for Hillcrest

Development.

In September of 1997, the General Partner discovered

a “for sale” sign on Hillcrest Development’s real property,

which was located in the City of Elsinore, County of Riverside.

Upon calling the number on the “for sale” sign, the General

Partner learned that N.R.L.L. had purchased the real property

8

ene a ay VE le aD EERE ie Mc RN I AM AIO ie hal OD PLEIN

for about 15% of its million dollar value at the tax sale in 1996.

The General Partner immediately contacted the representative

of the Tax Collector, informed him that neither Hillcrest

Development nor the General Partner had received any notice of

the tax sale, and requested that the tax sale be rescinded and that

its real property be returned. When the Tax Collector refused to

take any action and within one month of discovering the “for

sale” sign, Hillcrest Development filed a civil rights action

under Section 1983 of Title 42 of the United States Code to set

aside the Tax Deed, quiet title, and for damages. The action was

based upon the requirement established by this Court in

Mennonite Board of Missions v, Adams, 462 U.S. 791, 800

(1983), that actual notice be provided of the tax sale by the

taxing authorities, prior to depriving the interested party of his

property rights, even if an interested party is in default with

respect to property taxes and should have protected itself, so

long as the interested party's address is “reasonably

ascertainable” by the taxing authorities. The civil rights action

of Hillcrest Development named as defendants the Tax

Collector, the County of Riverside, and the purchasers of the

real property.

In its civil rights action, Hillcrest Development did not

seek a refund of any tax and did not seek to enjoin, suspend or

restrain the collection of any tax.

After the answer was filed by the Respondents, the

County of Riverside and Tax Collector filed a Motion for

Summary Judgment based upon the assertion that, regardless of

the conduct of the Tax Collector and regardless of whether a

property owner's Due Process rights were violated, a property

owner is time barred from bringing any type of action to

invalidate the Tax Deed or recover damages unless brought

within one year of the execution of a tax deed. This assertion

was based upon Section 3725 of the California Revenue &

9

Taxation Code. None of the Defendants asserted in the Motion

for Summary Judgment that the action was precluded by the

principle of comity or by the “Tax Injunction Act”.

Though Hillcrest Development asserted that the

applicable statute of limitations for the civil rights action is the

personal injury statute or Section 340, subdivision 3, of the

Code of Civil Procedure as a result of this Court’s decision in

Wilson v. Garcia, 471 U.S. 261 (1985), the trial court disagreed,

and granted the Motion and dismissed the action as to all of the

defendants. An appeal was timely filed.

On appeal, the Tax Collector and County of Riverside

raised for the first time their assertion that “section 1983 does

not afford a remedy in state tax cases”. Page A-17, Appendix.

Though finding that the trial court committed error and

that Respondents N.R.L.L and SPAN's claim that Wilson

requires the Court to look to the most analogous statute of

limitations “grossly misrepresents Wilson,” it stated that the

error was harmless in that a civil rights action could not be

maintained in a tax case because of the potential “for a chilling

effect on state tax administration that was a motivating concern

in Fair Assessment”. Page A-22, Appendix. It also concluded

that, since the California tax scheme allowed for a refund of

taxes, the “adequate remedy” exception to the principle of

comity and the “Tax Injunction Act” did not apply. Page A-22,

Appendix.

10

The California Court of Appeal has decided important

federal questions in a way that conflict with decisions of the

United States Courts of Appeals and with relevant decisions of

this Court. By denying a remedy to a property owner who has

been deprived of his property without notice, it has rendered

ineffective the notice requirement in Mennonite, supra. It has

misapplied the “Tax Injunction Act” (Jefferson County, Ala. v.

Acker, 527 U.S. 423, 119 S.Ct. 2069, 2076 (1999)). It has

changed the definitional meaning of “adequate remedy” in

considering whether the exception to the “Tax Injunction Act”

and principle of comity apply. See California v. Grace Brethren

Church, 457 U.S. 393, 411-412 (1982). The Court of Appeal

creates an absolute immunity not only for a county’s tax

collector, but also the municipality, which is contrary to this

Court’s decision in

Leatherman v. Tarrant County Narcotics

Intelligence and Coordination Unit, 507 U.S. 163, 166 (1993).

7 The Unpublished Decision May Still E

Used by the Tax Coll he C PRiversid Curtail

Any Future Proceeding or Set Up a Defense of Reasonableness

Though the case was a case of first impression, and

Hillcrest Development requested its publication in writing and

at oral argument, the Court of Appeal issued its final Opinion as

“Not to Be Published.” In California, an unpublished opinion

1]

has virtually no chance of being reviewed by the C alifornia

Supreme Court. See 2 California Civil Appellate Practice,

§22.7 (California Continuing Education of the Bar, 1999). The

reason is because the case generally does not have precedential

value. However, there are exceptions. Rule 977(b), California

Rules of Court; 9 Witkin, California Procedure, Appeal §716

(4" ed. 1996). If another aggrieved property owner brings a

civil rights action against the Tax Collector and County of

Riverside. there can be no doubt that the Tax Collector would

show the litigant the prior determination of the same Court of

Appeal that would hear his appeal. The Tax C ollector may also

assert it as a basis for the “reasonableness” of his conduct in a

subsequent civil rights case where he could assert qualified

immunity. .

Though the Opinion was not published, the case

received notoriety in that it was reported in a newspaper serving

Riverside County because of the nature of the action and the

naming of the Tax Collector and County of Riverside as

defendants.

3. ip Ord E Nasional. Uniformni

Only this Court Should Determine if Agencies Involved in Lax 4 he Entiealy 3 ; Suit Under 1)

“ivil Rig!

Because of the recognized need by this Court to ensure

uniformity in civil rights action and to reduce expensive

litigation and uncertainty, it should be this Court who

establishes any rule which exempts an entire class of state or

municipal employees from liability under the Civil Rights Act.

There has been an ever increasing effort by the States to

use this Court’s decision in Fair Assessment as a basis to ban

any action either in federal court or state court when such action

12

a

might have a tangential effect on the collection of taxes. See.

e.g.. Keleher v. New England Telephone & Telegraph Co., 947

F.2d 547 (2d Cir. 1991).

Tax Related Cases Which is C Decided Case by Thi

In Leatherman v, Tarrant County Narcotics Intelligence

and Coordination Unit, 507 U.S. 163, 166 (1993), Chief Justice

Reinquist stated in a unanimous decision:

“(U)nlike various government officials.

municipalities do not enjoy immunity from suit--

either absolute or qualified--under §1983. In

short, a municipality can be sued under §1983,

but it cannot be held liable unless a municipal

policy or custom caused the constitutional

injury.”

The California Court of Appeal concluded in essence

that this Court created a separate immunity in Fair Assessment

and National Private Truck for the County and its Tax Collector

merely because the constitutional injury occurred in connection

with the tax process, i.e., the municipality and its tax collector

cannot be sued under any circumstance because recovery by an

aggrieved property owner may have a chilling effect on the

collection process. This conclusion, if allowed to stand, will

shield a municipality and its tax collector from any claim that

arises under the Constitution merely because they are involved

in the process of raising taxes.

The need for national uniformity in civil rights actions

was recognized by this Court in Wilson v, Garcia. supra, with

respect to the issue of the applicable statute of limitations. Any

expansion of the limited doctrine established in Fair

Assessment. supra and National Private Truck, supra. should

only be accomplished by this Court in order that there is

national uniformity with respect to civil rights actions so that

both uncertainty and time consuming litigation are eliminated.

The County of Riverside has received full payment of

the property taxes, has not been sued for a repayment of the

taxes. and Hillcrest Development's civil rights action was not a

disguised effort on the part of Hillcrest Development to seek

review of the constitutionality of a tax without payment. It is a

suit resulting solely from the damages attributable to the

deprivation of Hillcrest Development’s property in violation of

the Due Process Clause. The County of Riverside or the Tax

Collector cannot avoid suit by asserting that because of the

tangential effect on their taxing activity that the principle of

comity and “Tax Injunction Act” precludes any relief.

In June of 1999, this Court in Jefferson County, Ala, v.

Acker, 527 U.S. 423, 119 S.Ct. 2069, 2076 (1999) explained the

meaning and purpose of “The Tax Injunction Act” [“Act”]. It

stated, supra:

14

3

|

;

“By its terms, the Act bars anticipatory relief,

Suits to stop (‘enjoin, suspend or restrain’) the

collection of taxes.” [emphasis added]

This Court also stated that the conclusion of the Second

Circuit in the 1991 case of K w Eng

& Telegraph, 947 F.2d 547, 551 as to the intent of Congress in

passing the Act was wrong. Id. In Keleher, supra, the Court of

- Appeals stated that the “Tax Injunction Act” “creates an absolute

jurisdictional bar to federal involvement in state and local

revenue collection schemes, and that, as a result, a federal court

may not play any role at all in the tax enforcement efforts of

state or local governments.” The conclusion reached in Keleher,

Supra, was in essence adopted by the California Court of Appeal

as to a civil rights action in the state court. Though Hillcrest

Development had no other way to recover its property or

damages for the unlawful taking of its property, the California

Court of Appeal reasoned that, since Hillcrest Development

could file a refund, it had an “adequate remedy at law”. It did

not and could not explain how such refund, even if sought,

would compensate Hillcrest Development for the injury

resulting from the violation of its Due Process rights or how it

was plain or complete. See, Carey v. Piphus, 435 U.S. 247, 259

(1978) (“the rules governing compensation for injuries caused

by the deprivation of constitutional rights should be tailored to

the interests protected by the particular right in question”). As

to the Court of Appeal’s conclusion ( page A-22. Appendix)

that Hillcrest Development did not claim that the tax refund

scheme was inadequate, such conclusion is nonsensical.

Hillcrest Development brought a civil rights action under

federal law because California does not provide for relief. The

adequacy of the tax refund scheme is simply irrelevant to a post

collection case or a case not involving the collection of taxes.

Even where the action is one to enjoin, restrain, or

suspend, neither the “Tax Injunction Act” nor the principle of

comity preclude a taxpayer's action where the state court

remedy is inadequate, i.e., the constitutional issues will not be

given a full hearing (California v. Grace Brethren Church, 457

U.S. 393, 411-412 (1982)), where the damages are irreparable,

or where there is a cloud on title. Dows v, City of Chicago, 78

U.S. 108, 110 (1870); National Private Truck Council v.

Oklahoma Tax Commissioner, 515 U.S. 582, 591 (ftn. 6)

(1995). The damages are irreparable and there is a cloud on

title.

The issue is not whether a state statute is constitutionally

valid but rather whether the municipality and its official's

conduct violated established constitutional standards. This is

precisely the purpose of section 1983 suits. See Harlow v.

Fitzgerald. 457 U.S. 800, 818 (1982). The appropriate remedy

for deprivation of a liberty and/or property interest without Due

Process is to order the process that was due and any attendant

damages which directly result from the failure to give the proper

notice. Carey v. Piphus, supra.

Private parties acting under color of state law are not

entitled to the qualified immunity defense. Crawford-El v.

Britton, 523 U.S. 574, 590 (ftn. 13 (1998)); E.E. Trotter, Inc v.

Watkins, 869 F.2d 1312, 1318-1319 (9" Cir. 1989). They are

subject to a civil rights action when they participate in a state

action which results in the deprivation of the property of

another. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 942

(1982).

16

The right to sue a purchaser in order to quiet title as a

result of the failure of the government to give notice or improper

notice was recognized in Mennonite, supra.

5. CONCLUSION

Review is appropriate because of the necessity of

resolving important questions of law, because of the effect of

the Court of Appeal Opinion on the Tax Collector of a major

County in California, which established that his actions in

providing constitutionally mandated notice are not subject to

judicial review under the Civil Rights Act, and because of the

need to secure uniformity of decisions in civil rights actions.

Dated: April 14, 2000

se ok SOT

RONALD K. VAN WERT, A

Member of Ronald K. Van Wert,

A Professional Corporation,

Counsel of Record for Petitioner

HILLCREST DEVELOPMENT

APPENDIX

FILED

NOV 9 1999

Court of Appeal Fourth District

COURT OF APPEAL, FOURTH DISTRICT

DIVISION TWO

STATE OF CALIFORNIA

HILLCREST E023512

DEVELOPMENT,

(Super.Ct.No. 303035)

Plaintiff and

Appellant, OPINION

V.

COUNTY OF RIVERSIDE

et al...

Defendants and

Respondents.

APPEAL from the Superior Court of Riverside County.

Richard G. Van Frank, Judge. Affirmed.

Ronald K. Van Wert for Plaintiff and Appellant.

William C. Katzenstein, County Counsel, and

Dorothy L. Honn, Deputy County Counsel, for Defendants and

Respondent County of Riverside and R. Wayne Watts,

Treasurer-Tax Collector of the County of Riverside.

Reid & Hellyer, James J. Manning, Jr., and Michael G.

Kerbs for Defendants and Respondents N.R.L.L., Inc., and

SPAN, L.L.C.

Plaintiff Hillcrest Development (Hillcrest) owned land

worth over $1 million. However, it failed to pay property taxes

on the land for at least six years inarow. Asa result, the land

was sold for taxes; the purchaser paid only $162,000 for it.

About three years before the sale, Hillcrest moved. It

did not notify the tax collector of its change of address. When

it came time to send notice of the sale, the tax collector tried to

find Hillcrest's current address through Riverside County and

Department of Motor Vehicle (DMV) zecords, as well as

Riverside and Orange County telephone directories, but was

unable to do so. The tax collector therefore sent notice of the

sale to three of Hillcrest's former addresses. Hillcrest never

received actual notice. Even though Hillcrest's former addresses

were all in Orange County, the tax collector failed to check

Orange County fictitious business name filings; doing so would

have revealed Hillcrest's current address. The tax collector also

failed to make inquiries regarding Hillcrest's general partner,

even though his name was listed on numerous documents

concerning Hillcrest.

Hillcrest filed this action to set aside the tax sale. The

trial court granted summary judgment against Hillcrest on the

ground that the applicable statute of limitations was Revenue

and Taxation Code section 3725, which had run. In this appeal,

Hillcrest argues (1) defendants were estopped to assert the

statute of limitations, and (2) Hillcrest's complaint asserted

federal civil rights causes of action (42 U.S.C. § 1983), and

therefore the applicable statute of limitations was Code of Civil

Procedure section 340, subdivision (3), which had not run.

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To the extent that Hillcrest's complaint arises under state

law, the trial court was correct. Revenue and Taxation Code

section 3725 was the applicable statute of limitations; it had run;

and Hillcrest failed to raise a triable issue of fact regarding

estoppel.

To the extent that Hillcrest's complaint arises under 42

United States Code section 1983 (section 1983), the trial court

erred. Code of Civil Procedure section 340, subdivision (3),

was the applicable statute of limitations. There was at least a

triable issue of fact with respect to whether it had run. The

error, however, was harmless. Defendants were entitled to

summary judgment in any event because section 1983 does not

afford a remedy for allegedly unconstitutional state taxation.

I

FACTUAL BACKGROUND

The following facts are taken from the papers filed in

support of and in opposition to defendants’ motion for summary

adjudication. Consistent with the applicable standard of review,

we view the evidence in the light most favorable to the party

opposing the motion — in this case, to Hillcrest. (A bou-Jaoude

v. British Airways (1991) 228 Cal.App.3d 1137, 1139.)

Hillcrest is a limited partnership. Paul 7. Salata is

Hillcrest's general partner.

In 1984, Hillcrest acquired certain real property in Lake

Elsinore. It paid taxes on the property only once, in 1988.

In 1984, when Hillcrest purchased the property,

Hillcrest's address was 213 La Jolla Drive, Newport Beach.

This address was listed on the deed. The deed also stated that,

after recording, it was to be sent to Ronald K. Van Wert at 3151

Airway Avenue, Suite A-1, Costa Mesa.

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Later in 1984, Hillcrest filed a certificate of limited

partnership listing its La Jolla Drive address; again,

acknowledgment was to be sent to Van Wert at his Airway

Drive address.

In 1988. Hillcrest filed an amendment to its certificate

of limited partnership. The amendment listed Hillcrest's address

as 15707 Rockfield Boulevard, #215, Irvine; it listed Salata as

its general partner, at the Rockfield Boulevard address; and it

indicated acknowledgment was to be sent to Van Wert, at 1301

Dove Street, 10th Floor, Newport Beach. Also in 1988,

Hillcrest recorded a deed affecting the property; the deed gave

the Rockfield Boulevard address.

In 1989, Salata notified the tax collector that Hillcrest's

address had changed to 3100 Airway Avenue, # 124, in Costa

Mesa. This became its address of record on the tax roll.

Some time in 1993, Hillcrest moved to 3723 Birch

Street. #11, Newport Beach. It did not notify the tax collector

of this change of address. However, it did file a change of

address with the post office. It also filed a fictitious business

name statement listing this address and listing Salata as general

partner, with his home address. The fictitious business name

statement was, as required, filed in Orange County, where

Hillcrest's principal place of business was located. (See Bus. &

Prof. Code, § 17915.)

On February 8, 1996, the tax collector sent "Notices of

Sale" (Rev. & Tax. Code, § 3701) to Hillcrest, by certified

mail. addressed to each of its pre-1993 addresses: La Jolla

Drive. Rockfield Boulevard, and Airway Avenue. They were

all returned as undeliverable.

Before sending the notices, the tax collector tried,

without success, to find Hillcrest's address using Riverside

County and DMV records and the Riverside and Orange County

telephone directories. It could have found Hillcrest, however,

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by checking the Orange County fictitious business name filings.

It could have found Salata through DMV records and the

Orange County telephone directory. It could have found Van

Wert at his Dove Street address, which was listed in Hillcrest's

amended certificate of limited partnership, and through the

Orange County telephone directory.

On March 26, 1996, the tax collector sold the property

at auction to N.R.L.L., Inc. (NRLL). NRLL paid $162,000 for

it; it was worth over $1 million. On April 24, 1996, the tax

deeds to NRLL were recorded. NRLL later conveyed the

property to SPAN, L.L.C. (SPAN). Hillcrest continued to pay

for utilities for the property.

On July 19, 1996, Nelson-Brown Equities, Inc. (Nelson-

Brown), an asset search company, notified Hillcrest that it

appeared to be entitled to unclaimed assets worth approximately

$83,000. Nelson-Brown would not disclose the nature or source

of the assets unless Hillcrest entered into a fee agreement.

Salata discussed the matter with Van Wert, who was

Hillcrest's attorney. Based on his own knowledge of Hillcrest's

development activities, Salata believed one possible source of

unclaimed funds was Riverside County (County). At Salata's

request, Van Wert contacted the County and asked if it owed

Hillcrest any money. County representatives responded that it

did not owe Hillcrest any money.

Because Hillcrest was unable to identify the source of

the funds on its own, it entered into a fee agreement with

Nelson-Brown. In a letter dated October 15, 1996) Nelson-

Brown disclosed to Hillcrest that: "The holder of the unclaimed

funds is the County of Riverside. The form is in excess

proceeds from the sale of [assessor's parcel numbers of the

property]."

On November 7, 1996, Salata signed documents

authorizing Nelson-Brown to act as Hillcrest's agent in

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submitting a claim for the excess proceeds. These documents

stated: "I, the undersigned, do hereby make Nelson-Brown

Equities, Inc. my agent to apply for and collect the excess

proceeds which you are holding and to which I am entitled from

the sale of assessment number [assessor's parcel numbers of the

property] sold at public auction. . . ." On December 18, 1996 (as

to one parcel), and March 12, 1997 (as to the other), Nelson-

Brown submitted Hillcrest's excess proceeds claim to the tax

collector. (See Rev. & Tax. Code, § 4675.)

In September 1997, Salata saw a "for sale" sign on the

property. He called the phone number listed on the sign and

was told the property had been sold for taxes.

On October 14, 1997, Hillcrest filed this action.

On November 18, 1997, the County paid Hillcrest's

excess proceeds claim.

II.

PROCEDURAL BACKGROUND

Hillcrest filed this action against the County, the tax

collector, NRLL and SPAN.' Hillcrest alleged three causes of

action: (1) to quiet title and to cancel the tax deed, against all

defendants, (2) for civil rights violations (42 U.S.C. § 1983),

against the County and the tax collector, and (3) for declaratory

relief, against all defendants.

Defendants filed answers asserting various affirmative

defenses, including that the action was barred by Revenue and

Taxation Code section 3725.

On a date not reflected in the record, NRLL and SPAN

filed a cross-complaint. On March 6, 1998, they filed a first

amended cross-complaint against Hillcrest and Salata.

On May 28, 1998, the County and the tax collector filed

a motion for summary judgment. Subsequently, NRLL and

A-6

SPAN were deemed to have joined in the motion. Defendants

argued (1) the action was barred by Revenue and Taxation Code

section 3725, and (2) the tax collector had complied with all

statutory notice requirements.

On August 4, 1998, the trial court granted the motion on

the ground that the action was barred by Revenue and Taxation

Code section 3725 and dismissed the complaint.

On September 10, 1998, Hillcrest filed a timely notice

of appeal.

On October 13, 1998, NRLL and SPAN dismissed their

cross-complaint without prejudice.’

Ill

APPEALABILITY

We perceive a preliminary issue regarding appealability.

The judgment finally resolved all issues as between.

Hillcrest on the one hand and the County and the tax collector

on the other hand. To that extent, it is clearly appealable.

(Hydrotech Systems, Ltd v. Oasis Waterpark (1991) 52 Cal.3d

988, 993, fn. 3; Justus v. Atchison (1977) 19 Cal.3d 564, 568,

disapproved on other grounds in Ochoa v. Superior Court

(1985) 39 Cal.3d 159, 171; Buckaloo v. Johnson (1975) 14

Cal.3 d 815, 821, fn. 3, disapproved on other grounds in Della

Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th

376, 393, fn. 5.)

What is unclear is whether NRLL and SPAN are proper

parties to the appeal. When Hillcrest filed its notice of appeal,

their cross-complaint was still pending. Accordingly, as to

them, the judgment was not final. (American Alternative Energy

Partners Il v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 557;

G.E. Hetrick & Associates, Inc. v. Summit Construction &

A-7

Maintenance Co. (1992) 11 Cal.App.4th 318, 325; Holt v. Booth

(1991) 1 Cal.App.4th 1074, 1081.)

Later, NRLL and SPAN dismissed their cross-complaint

without prejudice. Even assuming a subsequent dismissal can

legitimate a previously filed appeal under other circumstances

(but see Cal. Rules of Court, rule 2(c)), we question whether a

dismissal without prejudice can do so. (See Tudor Ranches, Inc.

v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1429;

Hill v. City of Clovis (1998) 63 Cal.App.4th 434, 442-445; cf

Roy Brothers Drilling Co. v. Jones ( 1981) 123 Cal.App.3d 175,

180.)

Nevertheless, the issues on which we ultimately resolve

this appeal are essentially identical with respect to all

defendants. Resolving them solely with respect to the County

and the tax collector, while dismissing the appeal with respect

to NRLL and SPAN, “would result in the fragmentation and

multiplicity of appeals which the one final judgment rule seeks

to avoid.” (GE. Hetrick & Associates, Inc. v. Summit

Construction & Maintenance Co., supra, \\ Cal.App.4th at p.

326, fn. 5.) Under these circumstances, we may decide the

issues with respect to all parties. (/d., at pp. 325-326 and 326,

fn. 5: see also Homestead Savings v. Darmiento (1991) 23 0

Cal.App. 3d 424, 430, fn. 5.)

IV

CAUSES OF ACTION TO INVALIDATE THE TAX SALE

A. The Applicable Statute of Limitations.

Chapter 7 of the Revenue and Tax Code (Rev. & Tax.

Code, §§ 3691-3731.1) prescribes the procedures for the sale of

tax-defaulted property to private parties. Tax defaulted property

cannot be sold until it has remained in default for at least five

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years. (Rev. & Tax. Code, § 3691, subd. (a)(1); see also Rev. &

Tax. Code, § 3361.) Throughout these five years, and up until

the property is sold, the owner has the right to redeem it by

paying the delinquent taxes, plus interest, costs and fees. (Rev.

& Tax. Code, §§ 3707, subds. (a), (d), 4101, 4102, 4103.)

Revenue and Taxation Code section 3701 requires the

tax collector to “send notice of the proposed sale by certified

mail with return receipt requested to the last known mailing

address, if available, of parties of interest... .”’ It further

requires the tax collector to “make a reasonabie effort to obtain

the name and last known mailing address of parties of interest.”

Revenue and Taxation Code section 3725, however, provides:

“A proceeding based on alleged invalidity or irregularity of any

proceedings instituted under this chapter can only be

commenced within one year after the date of execution of the

tax collector's deed.”

Hillcrest's first cause of action was to quiet title. “The

law is clear that the theory of relief underlying an action for

quiet title ... determines which statute of limitations applies.

[Citations.]” (Ankoanda v. Walker-Smith (1996) 44 Cal.App.4th

610, 615, and cases cited.) To the extent that Hillcrest's right to

quiet title turned on the invalidity or irregularity of the tax sale,

the applicable statute of limitations was Revenue and Taxation

Code section 3725.

Hillcrest's third cause of action was for declaratory

relief. A declaratory relief cause of action is governed by the

statute of limitations applicable to the analogous cause of action

for coercive relief. (Lerner v. Los Angeles City Board of

Education (1963) 59 Cal.2d 382, 389; Engstrom v. Kallins

(1996) 49 Cal.App.4th 773, 784.) Thus, once again, to the extent

the declaratory relief cause of action was based on the invalidity

or irregularity of the tax sale, it, too, was subject to Revenue and

Taxation Code section 3725.

A-9

B. Estoppel to Assert the Statute of Limitations.

Revenue and Taxation Code section 3725 had run before

Hillcrest brought suit. Indeed, Hillcrest does not argue

otherwise. It does contend, however, there was a triable issue

of fact with respect to whether defendants were estopped from

invoking the statute of limitations. As a basis for estoppel,

Hillcrest relies on the alleged fact that the tax collector failed to

give it due notice, together with the fact that, when it asked the

County if it was owed any money, the County said no. The

County and the tax collector fail to respond to this contention.

(NRLL and SPAN merely respond that any estoppel runs

against the County, not against them.) We do not take this as a

concession that it has merit, however, because it does not.

It seems clear that failure to give notice of a tax sale

does not give rise to an estoppel. ( Union Paving Co. v. East Del

Paso Heights (1963) 217 Cal.App.2d 772, 776777, see also

Howard v. State of California (1963) 216 Cal.App.2d 281, 284-

286.) "If an estoppel could be raised when the assertion is made

that notice was not given, then the question could be presented

in nearly every case where an irregularity occurred." (Union

Paving Co. v. East Del Paso Heights, supra, at p. 777.)

Numerous cases have held a challenge to a tax sale based on

lack of notice may be barred by the statute of limitations. (E.g.,

Kaufman v. Gross & Co. (1979) 23 Cal.3d 750, 757-760; Elbert,

Ltd. v. Gross (1953) 41 Cal.2d 322, 328-332; Tannhauser v.

Adams (1947) 31 Cal.2d 169, 173-177; Howard v. State of

California, supra, 216 Cal.App.2d at pp. 284-286.) While these

cases did not address estoppel in so many words, they

necessarily imply that estoppel is not available based on lack of

notice. (Union Paving Co. v. East Del Paso Heights, supra, at

p. 777.)

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This appears to be a particular application of the more

general principle that “estoppel will not be applied against the

government if to do so would nullify a strong rule of policy

adopted for the benefit of the public. [Citations.]" (Lusardi

Construction Co. v. Aubry (1992) 1 Cal.4th 976, 994-995.) In

tax deed cases, the statute of limitations serves the important

public purposes of ensuring stability of title and protecting

finality in tax proceedings. (See Sears v. County of Calaveras

(1955) 45 Cal.2d 518, 521-522; Howard v. State of California,

supra, 216 Cal.App.2d at pp. 285-286.) Any resulting unfairness

to the plaintiff is insufficient to outweigh these public purposes.

"There is ... the unquestioned tax debt to justify the taking, and,

in addition, the taxpayer is permitted at least six years within

which to redeem or attack any supposed irregularity in the tax

proceedings. Such period is a most reasonable allowance for the

cure of the laxity of tax delinquency." (Howard v. State of

California, supra, at p. 286.) For these reasons, we conclude

that neither the County's failure to give notice nor its affirmative

misrepresentation that it did not owe Hillcrest any money will

estop it from invoking the statute of limitations.

Alternatively, even assuming the County could be

estopped, we do not believe Hillcrest has raised a triable issue

of fact with respect to estoppel. Estoppel is sometimes likened

to equitable tolling. It differs, however, in that it does not

literally toll the limitations period. That is, the time during

which an estoppel is in effect is not simply subtracted from the

total limitations period. The ultimate issue is whether the

plaintiff failed to file within the limitations period due to

reliance on the defendant's conduct. Accordingly, "[i]f there is

still ample time to institute the action within the statutory period

after the circumstances inducing delay have ceased to operate,

the plaintiff who failed to do so cannot claim an estoppel.

[Citations.]" (Lobrovich v. Georgison (1956) 144 Cal.App.2d

A-11

567. 573-574.) "[W]hen a substantial period for instituting

proceedings supervened after expiration of the delay engendered

by a party ... his conduct or representations will not estop him

from asserting the bar of the statue... .” (Industrial Indem.

Co. v. Ind. Acc. Com. (1953) 115 Cal.App.2d 684, 690; accord,

John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438,

446. and cases cited; Santee v. Santa Clara County Office of

Education (1990) 220 Cal.App.3d 702, 716.)

In the Santee case, for example, the plaintiffs failed to

present a timely governmental tort claim; they did present a

timely late-claim application, but to the wrong public entity.

That entity purported to grant the late-claim application and to

deny the claim. (Santee v. Santa Clara County Office of

Education, supra, 220 Cal.App.3d at p. 709.) On appeal, the

plaintiffs argued this excused their failure to present a timely

late-claim application to the correct public entity. The appellate

court treated this as an estoppel argument. It held that, when the

plaintiffs learned of their mistake, " [they] still had two months

in which to submit a late-claim application to [the defendant]

before the one-year jurisdictional limit expired. Their failure to

do so precludes reliance on an estoppel." (/d., at p. 716.)

Assuming, without deciding, a jury could find Hillcrest

initially failed to file suit in reliance on defendants’ conduct, any

such reliance had clearly ended long before the end of the

limitations period. On October 15, 1996, Nelson-Brown

advised Hillcrest that the County was holding $83,000 in excess

proceeds from the sale of its property. Moreover, on November

7, 1996, Salata signed documents authorizing Nelson-Brown to

claim the excess proceeds from the sale of the property at public

auction. Even at the latter point Hillcrest still had five-and-a-

half months in which it could have filed a timely suit. It cannot

claim it was still relying on any conduct of defendants.

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Hillcrest, attempting to raise a triable issue of fact,

submits Salata's testimony that: "I had no understanding of the

meaning of 'excess proceeds’, and I was told and understood that

there may not be any moneys due Hillcrest. If there was, I did

not believe that it had anything to do with the tax sale of the

[p]roperty because when | discovered the ‘for sale’ sign in

September of 199[7], we immediately found out about the tax

sale... ." Even accepting Salata's claim that he "did not believe

[the money] had anything to do with the tax sale," he never

plainly testifies he did not know there had been a tax sale. But

more important he never claims Hillcrest did not know there

had been a tax sale. When Salata appointed Nelson-Brown as

Hillcrest's agent, Hillcrest was deemed to know what Nelson-

Brown knew. Thus, from that point on, Hillcrest was

chargeable with knowledge of the tax sale. (Civ. Code, § 2332;

Chaplis v. County of Monterey (1979) 97 Cal.App.3d 249, 262

[agents' knowledge, imputed to principal, defeats estoppel].)

ad Exception for an Owner in Possession.

Hillcrest also argues Revenue and Taxation Code section

3725 does not apply where the asserted procedural defect is

jurisdictional and the original owner remained in possession of

the property.

"The contention that a statute limiting the time for the

commencement of an action to set aside a deed to the state for

delinquent taxes does not apply to an owner in exclusive and

undisputed possession of the property taxed, is largely based on

a rule stated to be that a general statute of limitations does not

run against such an owner to remove a cloud upon his title."

(Sears v. County of Calaveras, supra, 45 Cal.2d at p. 521.) In

delinquent tax cases, this rule has been more honored in the

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breach than in the observance. Indeed, we have been unable to

find a single case in which an owner actually benefited from it.

The owner in possession rule applies only "to owners

who because of their possession could not be assumed to have

actual knowledge of claims of adverse interest by persons not in

possession.” (McCaslin v. Hamblen (1951) 37 Cal.2d 196, 199.)

When an owner owes delinquent taxes, however, "the very fact

of his delinquency operates to charge him ‘with notice that if he

claims the invalidity of a tax deed to the state or of the

proceedings leading up to it he must bring his action for that

purpose within the statutory time.’ [Citation.]" (Kaufinan v.

Gross & Co., supra, 23 Cal.3d at p. 756, quoting Sears v.

County of Calaveras, supra, 45 Cal.2d at p. 522.) "There

appears to be no reason why an owner of land, although in

exclusive and undisputed possession, should not be required to

be alert to protect his rights as against his own delinquency in

the payment of taxes." (Sears v. County of Calaveras, supra, at

pp. 521-522; accord, Edwards v. City of Santa Paula (1956) 138

Cal.App.2d 375, 378-379.)

Salata testified that, on occasion, portions of Hillcrest's

land were sold and delinquent taxes were paid out of escrow.

He also testified, or at least implied, that he was unaware there

were any delinquent taxes not paid in this way. Once again,

however, Salata never testified that Hillcrest, as an entity, was

unaware that any taxes were due. In any event, we do not

believe the applicability of the owner in possession rule turns on

whether the owner has actual knowledge of the delinquency.

Rather, an owner is deemed to have constructive knowledge.

An owner either knows or should know whether property taxes

have been paid (at least in the absence of unusual circumstances

not present here).

Hillcrest had not paid property taxes for six years.

Despite Salata's claim of ignorance, Hillcrest was chargeable

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with knowledge of the delinquency. Thus, even though it was

in undisturbed possession, it knew or had reason to know that its

property could be sold for taxes. Hillcrest therefore cannot

claim the benefit of an "owner in possession" exception to

Revenue and Taxation Code section 3725.

We conclude the trial court correctly granted summary

judgment on both Hillcrest's cause of action to quiet title and its

cause of action for declaratory relief, to the extent they were

based on the invalidity or irregularity of the tax sale, on the

ground that they were barred by the statute of limitations.

Vv

SECTION 1983 CAUSES OF ACTION

A. The Applicable Statute of Limitations.

Hillcrest's second cause of action was for a deprivation

of civil rights under section 1983. Moreover, Hillcrest's first

cause of action, to quiet title, and its third cause of action, for

declaratory relief, both alleged, and were at least partially based

on, the same alleged deprivation of civil rights. To this extent,

all three causes of action were subject to the statute of

limitations applicable to a federal civil rights action.

In Wilson v. Garcia (1985) 471 U.S. 261 [105 S.Ct.

1938, 85 L.Ed.2d 254], the Supreme Court held that a section

1983 action is governed by the state statute of limitations for a

"tort action for the recovery of damages for personal injuries .

_. ." Ud., at p. 276.) In California, this is Code of Civil

Procedure section 340, subdivision (3), which provides a one-

year limitations period. (City of Huntington Park v. Superior

Court (1995) 34 Cal.App.4th 1293, 1297; Ponderosa Homes,

Inc. v. City of San Ramon (1994) 23 Cal.App. 4th 1761, 1772;

Jackson v. Cedars-Sinai Medical Center (1990) 220 Cal.App.3d

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1315. 1323-1324; Newton v. County of Napa (1990) 217

Cal.App.3d 1551, 1563-1564.)

NRLL and SPAN characterize Wilson as holding that a

section 1983 cause of action is governed by the most analogous

state statute of limitations; they argue that here, Revenue and

Taxation Code section 3725 is most analogous. This grossly

misrepresents Wilson. Wilson recognized a section 1983 cause

of action "can have no precise counterpart in state law.... [A]ny

analogies to [state law] causes of action are bound to be

imperfect." (Wilson v. Garcia, supra, 471 U.S. at p. 272, fn.

omitted.) It emphasized the need for uniformity and

predictability: "[A] simple, broad characterization of all § 1983

claims best fits the statute's remedial purpose. The experience

of the courts that have predicated their choice of the correct

statute of limitations on an analysis of the particular facts of

each claim demonstrates that their approach inevitably breeds

uncertainty and time-consuming litigation that is foreign to the

central purposes of § 1983." (Id, at p. 272, fn. omitted.) It

described section 1983 as "a directive to select in each State, the

one most appropriate statute of limitations for all § 1983 claims.

The federal interests in uniformity, certainty, and the

minimization of unnecessary litigation all support the

conclusion that Congress favored this simple approach." (/d., at

p. 275.) Accordingly, Wilson did not hold the "most analogous"

state statute of limitations applies; it specifically held the state

personal injury statute of limitations applies. (/d., at pp. 276-

279.)

Although Code of Civil Procedure section 340,

subdivision (3), like Revenue and Taxation Code section 3725,

prescribes a one-year limitations period, it affords a more

generous accrual rule. "[F]ederal law governs when a cause of

action accrues and the statute of limitations begins to run in a §

1983 action. [Citation.] Under federal law, the claim generally

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accrues when the plaintiff 'knows or has reason to know of the

injury which is the basis of the action.’ [Citation.]" (Cabrera v.

City of Huntington Park (9th Cir. 1998) 159 F.3d 374, 379-380,

quoting Elliott v. City of Union City (9th Cir. 1994) 25 F.3d

800, 802.)

Here, there was a triable issue of fact with respect to

when Hillcrest knew or should have known its property had

been sold for taxes. A reasonable jury could find it had no

reason to know this until it received Nelson-Brown's letter,

dated October 15, 1996, advising it that it was entitled to excess

proceeds from the County's sale of the property. A reasonable

jury could even find it had no reason to know this until

November 7, 1996, when Salata signed the forms making

Nelson-Brown Hillcrest's agent for the purpose of claiming the

excess proceeds. This action was filed on October 14, 1997 —

less than a year from both of these dates. Thus, there was at

least a triable issue of fact with respect to whether Hillcrest's

causes of action, to the extent they were based on section 1983,

were timely filed.

B. The Availability of a Section 1983 Cause of

Action to Challenge State Taxation.

The County and the tax collector contend, however, that

section 1983 does not afford a remedy in state tax cases. Asa

preliminary procedural matter, we note that they never raised

this contention in their motion for summary judgment.

Nevertheless, we have discretion to reach a pure question of law

for the first time on appeal (Waller v. Truck Ins. Exchange, Inc.

(1995) 11 Cal. 4th 1, 24; In re Marriage of Peters (1997) 52

Cal.App. 4th 1487, 1490) — even on appeal from a summary

judgment. (Cislaw v. Southland Corp. (1992) 4 Cal.App. 4th

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1284. 1297.) This contention presents such a pure question of

law.

Hillcrest does not object to our reaching this contention.

To the contrary, after mentioning that it was not raised below,

Hillcrest proceeds to respond to it on the merits. Hillcrest does

not claim that, if this contention had been made below, it could

have introduced additional evidence which would have raised a

triable issue of fact on this issue. (Cf. Juge v. County of

Sacramento (1993) 12 Cal.App.4th 59, 70-71.) Thus, we believe

Hillcrest has waived any objection to our considering it.

The contention finds its source in two United States

Supreme Court cases. In the first of these, Fair Assessment in

Real Estate Assn. v. McNary (1981) 454 U. S. 100 [ 102 S.Ct.

177. 70 L.Ed.2d 271], the plaintiffs filed a section 1983 action,

alleging certain local real property reassessment practices

violated equal protection and due process. Individual plaintiffs

sought a refund and punitive damages; an organizational

plaintiff sought an award of the expenses it had incurred in

seeking more equitable assessments. (/d., at pp. 105-106.)

The Supreme Court held “taxpayers are barred by the

principle of comity from asserting § 1983 actions against the

validity of state tax systems in federal courts. Such taxpayers

must seek protection of their federal rights by state remedies,

provided of course that those remedies are plain, adequate, and

complete, and may ultimately seek review of the state decisions

in this Court. [Citations.]" (Fair Assessment in Real Estate Assn.

v. McNary, supra, 454 U.S. at p. 116, fn. omitted.)

The court began by noting that under the Tax Injunction

Act federal courts are barred. from enjoining the collection of a

state tax, at least where there is "a plain, speedy and efficient

remedy” in state court. (Fair Assessment in Real Estate Assn. v.

McNary, supra, 454 U.S. at p. 103, quoting 28 U.S. C. § 1341.)

The Tax Injunction Act, it indicated, merely reflects broader

A-18

principles of comity. (Fair Assessment, supra, at p. 103.) As it

also noted, it had previously held, based on comity, that federal

courts "may not even render declaratory judgments as to the

constitutionality of state tax laws." (Ibid.; see also id., at pp.

110-111.)

The court concluded comity also barred an action for

damages based on the unconstitutionality of a state tax, for two

reasons. (Fair Assessment in Real Estate Assn. v. McNary,

supra, 454 U.S. at pp. 113-115.) First, "(t]he recovery of

damages under the Civil Rights Act first requires a ‘declaration’

or determination of the unconstitutionality of a state tax scheme

that would halt its operation." (/d., at p. 115.) "In effect the

district court must first enter a declaratory judgment .... We are

convinced that such a determination would be fully as ‘intrusive

as the equitable actions that are barred by principles of comity."

(/d., at p. 113, fn. omitted.) Second," . . . damages actions, no

less than actions for an injunction, would hale state officers into

federal court every time a taxpayer alleged the requisite

elements of a § 1983 claim." (/d., at p. 115.) "[S]uch officials,

faced with the prospect of personal liability to numerous

taxpayers, not to mention the assessment of attorney's fees under

42 U.S.C. § 1988, would promptly cease the conduct found to

have infringed petitioners’ constitutional rights, whether or not

those officials were acting in good faith. In short, petitioner's

action would ‘in every practical sense operate to suspend

collection of the state taxes... "' (/d., at p. 115, quoting Great

Lakes Dredge & Dock Co. v. Huffman (1943) 319 U.S. 293, 299

[63 S.Ct. 1070, 87 L.Ed. 1407}.)

Next, in National Private Truck Council, Inc. v.

Oklahoma Tax Comm'n (1995) 515 U.S. 582 [115 S.Ct. 2351,

132 L.Ed.2d 509], the plaintiffs claimed a state tax on motor

carriers violated both the commerce clause and the privileges

and immunities clause. They filed suit in state court, under both

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state law and section 1983. (National Private Truck Council,

supra, at p. 584.) The state courts held the tax unconstitutional,

and awarded refunds; however, they refused to award any relief

under section 1983. (/d., at p. 585.)

The Supreme Court affirmed. It held: § 1983 does not

call for either federal or state courts to award injunctive and

declaratory relief in state tax cases when an adequate legal

remedy exists." (National Private Truck Council, Inc., v.

Oklahoma Tax Comm'n, supra, 515 U.S. at p. 589.) It explained:

"Just as Fair Assessment relied upon a background principle in

interpreting § 1983 to preclude damages actions in tax cases

brought in federal court, so we rely on the same principle in

interpreting § 1983 to provide no basis for courts to award

injunctive relief when an adequate legal remedy exists. Our

interpretation is supported not only by the background principle

of federal noninterference discussed in Fair Assessment, but

also by the principles of equitable restraint discussed at length

in that case. [Citation.] Whether a suit is brought in federal or

state court, Congress simply did not authorize the disruption of

state tax administration in this way." (Id., at p. 590.)

The only question Fair Assessment and National Private

Truck did not address directly was whether a section 1983

action challenging a state tax could be brought in state court, for

damages. In California, this question was recently resolved in

General Motors Corp. v. City and County of San Francisco

(1999) 69 Cal.App.4th 448. There, General Motors claimed a

municipal business tax violated the commerce clause by

discriminating in favor of local manufacturers. It sued for a

refund under both state law and section 1983. (General Motors

Corp., supra, at p. 451.) On appeal, the court held the tax was

indeed unconstitutional (id., at pp. 452-454), and therefore,

General Motors was entitled to a refund. (Id., at pp. 454-456.)

It also held, however: "A citizen, like General Motors, may not

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maintain a section 1983 action challenging municipal taxation

when an adequate state remedy exists." (/d., at p. 460.) After

discussing Fair Assessment and National Private Truck, it

stated: "The conclusion drawn when these two cases are jointly

considered is inescapable: section 1983 actions challenging state

taxation are barred, whether the actions seek damages or

equitable relief, and whether brought in federal or state court,

provided an adequate state remedy exists." (General Motors

Corp., supra, at p. 460.) It concluded General Motors was not

entitled to attorney's fees under section 1983. (General Motors

Corp., supra, at pp. 456-461.)

"Other state courts have likewise barred section 1983

damages claims challenging local taxes where an adequate state

remedy exists. (Citations. }" (General Motors Corp. v. City and

County of San Francisco, supra, 69 Cal.App.4th at p. 460, and

cases cited: see also Kerr v. Waddell (1996) 185 Ariz. 457, 463-

464 [916 P.2d 1173]; State v. Golden's Concrete Co. (Colo.

1998) 962 P. 2d 919, 925; New England Legal Foundation v.

City of Boston (1996) 423 Mass. 602, 614 [670 N.E.2d 152].)

Hillcrest's only response is that it is not seeking to enjoin

or prevent the collection of any tax. Fair Assessment, however,

held the comity principle applies to section 1983 actions for

damages. Here, if Hillcrest could invalidate the tax sale, the

County would have to refund the sale price to NRLL and/or

SPAN. The sale price, however, minus the excess proceeds

which the County has already refunded to Hillcrest,’ represent

the taxes due. In essence, then, Hillcrest is seeking a refund,

just like the plaintiffs in Fair Assessment and General Motors.

Hillcrest is not merely challenging a single isolated

instance of alleged failure to give notice. In order to prevail on

its section 1983 claim, Hillcrest would have to prove the tax

collector had an official policy or custom of failure to give

notice. (Sinclair & Valentine Co. v. County of Los Angeles

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(1988) 201 Cal.App.3d 1021, 1027-1028; see generally Monell

v. New York City Dept. of Social Services (1978) 436 U.S. 658

[98 S. Ct. 2018, 56 L.Ed.2d 61 1].) Thus, Hillcrest is effectively

seeking a declaration regarding the constitutionality of a state

tax scheme. Moreover, such a declaration would have ihe same

potential for a chilling effect on state tax administration that was

a motivating concern in Fair Assessment. Hillcrest's section

1983 cause of action therefore presents all the vices that led the

court in Fair Assessment to bar actions for damages.

Hillcrest does not argue it had no adequate legal remedy

under state law. We believe an action for a refund under state

law is precisely such an adequate remedy. Hillcrest's own

failure to bring a refund action before the statute of limitations

supervened does not render that remedy inadequate. (Burris v.

City of Little Rock (8th Cir. 1991) 941 F. 2d 717, 721, fn. 4;

Aluminum Company of America v. Department of the Treasury

of the State of Michigan (6th Cir. 1975) 522 F.2d 1120, 1123-

1125; Henry v. Metropolitan Dade County (Sth Cir. 1964) 329

F.2d 780, 781; see also Fair Assessment in Real Estate Assn. v.

McNary, supra, 454 U.S. at p. 116, fn. 8 ["no significant

difference" between adequacy of state remedy for purposes of

comity and adequacy of state remedy for purposes of Tax

Injunction Act].) This is not a case in which the taxpayer, due to

lack of notice, had no way of bringing a refund action before the

expiration of the limitations period. Hillcrest had notice of the

tax sale more than five months before the end of the limitations

period. Thus, we need not consider whether in such a case a

state refund action would be an adequate remedy.

We conclude Hillcrest could not state a claim under

section 1983. Accordingly, the trial court properly granted

summary judgment on all of Hillcrest's causes of action to the

extent that they were based on an alleged deprivation of civil

rights.

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VI

~ DISPOSITION

The judgment is affirmed. Defendants shal! recover

costs against Hillcrest.

NOT TO BE PUBLISHED

/s/ Richii

We concur:

/s/ McKinster

Acting P. J.

/s/ Ward

FILED

AUG 04 1998

Superior/Municipal Court

of Riverside County

WILLIAM C. KATZENSTEIN (61681)

County Counsel

WILLIAM D. KENISON (103329)

Deputy County Counsel

3535 Tenth Street, Suite 300

Riverside, CA 92501-3674

Telephone: (909) 955-6300

Attorneys for Defendants County of

Riverside and Riverside County

Treasurer-Tax Collector, R. Wayne Watts

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF RIVERSIDE

HILLCREST DEVELOPMENT, _ ) Case No. 303035

a California Limited Partnership, )

) ORDER GRANTING

Plaintiff, ) MOTION FOR

) SUMMARY

v. ) JUDGMENT AND

) JUDGMENT OF

COUNTY OF RIVERSIDE, ) DISMISSAL

a Public Entity; R. WAYNE )

WATTS, Treasurer-Tax )

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Collector of the County of

Riverside; N.R.L.L., INC.,

a California Corporation;

SPAN, L.L.C., a Limited

Liability Company; and all

persons claiming by, through

or under such person, and all

persons unknown, claiming

any legal or equitable right,

title, estate, lien, or interest

in the property described in

the complaint adverse to

plaintiff's title, or any cloud

on plaintiff's title thereto,

named as DOES 1-20, inclusive,

Defendants.

N.R.L.L., INC. a California

corporation,

Cross-Complainant,

v.

HILLCREST DEVELOPMENT,

a California Limited Partnership:

PAUL SALATA, general partner

of HILLCREST DEVELOPMENT;

ali persons unknown claiming any

legal or equitable right, title, estate,

lien, or interest in the real property

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

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described in the cross-complaint

adverse to cross-complainant's

ownership or any cloud on cross-

complainant's title thereto; and,

DOES 1 through 200, inclusive,

Cross-Defendants.

The motion of Defendants, County of Riverside and R.

Wayne Watts, Tax Collector, for summary judgment, and the

joinder in such motion of Defendants N.R.L.L. and Span, Lis

came on regularly for hearing before this Court in Department

8. the Honorable Richard G. Van Frank, Judge Presiding.

Ronald K. Van Wert appeared as attorney for Plaintiff, Hillcrest

Development; James J. Manning, Jr. appeared as attorney for

Defendants and Cross-Complainants, N.R.L.L., Inc. and Span,

LLC: and William D. Kenison appeared for Defendants and

moving parties, County of Riverside and R. Wayne Watts, Tax

Collector.

After full consideration of the evidence set forth in the

papers submitted, the Court finds that Plaintiff's Complaint to

Quiet Title, Cancel Tax Deeds, Deprivation of Rights,

Privileges or Immunities Secured by the Constitution, and

Declaratory Relief, is barred as a matter of law by Section 3725

of the California Revenue and Taxation Code in that the action

was not filed within one year after the execution of the tax deeds

by Tax Collector. The Court's determination is set forth in the

court reporter's record of the hearing on the motion, as required

by Code of Civil Procedure section 437c(g).

THEREFORE, IT IS ORDERED, ADJUDGED, AND

DECREED that the motion for summary judgment is

GRANTED and that this judgment of dismissal of the complaint

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shall be entered forthwith against Plaintiff, Hillcrest

Development, a California Limited Partnership, which shall

recover nothing from defendants. The cross-complaint is hereby

severed.

Dated: AUG 04 1998 Ls/

Richard G. Van Frank

Judge of the Superior Court

APPROVED AS TO FORM:

LAW OFFICES OF

RONALD K. VAN WERT

Dated: July 17, 1998 By:/s/

Ronald K. Van Wert for

° Plaintiff, Hillcrest

Development, a

California Limited

Partnership

REID & HELLYER

a PROFESSIONAL

CORPORATION

Dated: July 20, 1998 By:4s/

James J. Manning, Jr.

Attorneys for

Defendants/Cross-

Complainants N.R.L.L.,

Inc., and SPAN, LLC

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}

FILED

FEB -2 2000

Frederick K. Ohlrich Clerk

Deputy

Fourth Appellate District, Division Two, No. E023512

S$084297

IN THE SUPREME COURT OF CALIFORNIA

EN BANC

HILLCREST DEVELOPMENT, Appellant

v.

COUNTY OF RIVERSIDE Et Al., Respondents

Appellant's petition for review DENIED.

/s/ CHIN

Acting Chief Justice

A-28

l. The complaint also named Land Disposition Company

as a defendant. Apparently this is a fictitious business name

used by NRLL, rather than a separate entity.

2. We hereby grant NRLL and SPAN's request for

judicial notice of their request for

dismissal.

3. “Parties of interest” are defined as “any person with

title of record to all or any portion of the property,” together

with all “lienholders of record.” (Rev. & Tax Code, § 4675.)

4 We note — but need not resolve — the lurking

question of whether Hillcrest lost whatever rights to

invalidate the sale it may have had by claiming and accepting

the excess proceeds

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