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2320-2329 Delinquent Payment Enforcement: Court Actions/General Applications

2320. GENERAL INFORMATION 
A taxpayer cannot, as a defense in any court action, claim that the taxes are excessive based on an overvaluation unless he/she has petitioned the county board of equalization for a reduction of the assessment (Security First National Bank v. County of Los Angeles, 35 Cal. 2d 319). However, distinctions exist between a wrongful assessment of property not subject to taxation and property wrongfully valued that is taxable. The county board of equalization need not be petitioned if property is nontaxable (Lockheed Aircraft Corp. v. County of Los Angeles, 207 Cal. App. 2d 119). The defendant, except for small claims cases, may claim that the tax was illegally assessed for reasons other than valuation.

2321. AUTHORITY FOR SUITS 
Revenue and Taxation Code section 3003 authorizes civil action by the county in its own name against an assessee, including general partners of a partnership assessee, persons who have assumed the liability to pay the assessed taxes by contract or lease, and those persons who are the alter ego or successor in interest of a corporate assessee, to recover delinquent unsecured taxes or assessments, including penalties, interest, and costs. Revenue and Taxation Code section 3002  authorizes the tax collector to employ an attorney to sue in his/her name if the assessee moves to another county (M-2333). Revenue and Taxation Code sections 107 and 2189.5 authorize suits for the collection of delinquent taxes on leasehold estates or rights as defined therein. The Code of Civil Procedure section 116.530 provides that no attorney may take part in the conduct or defense of a small claims action.

Government Code section 25203 allows the board of supervisors discretionary power to appoint county officials to initiate and conduct litigation in superior court on behalf of the county.

For the collection of delinquent taxes on improvements of water distribution systems, see M-6115.

For the collection of delinquent taxes on possessory interests that have been entered on the secured roll, see M-2011.

2322. AUTHORITY FOR EX PARTE WRIT OF ATTACHMENT
When there is sufficient information to justify the commencement of an action prior to the date taxes on the unsecured roll become delinquent, the tax collector may apply to the court for issuance of an ex parte writ of attachment of enough of the assessee's property as is necessary to satisfy the taxes on the basis of this information (Rev. & Tax. Code §3006).

NOTE: "Ex parte" means that a judicial proceeding may be held and any petition for this writ may be granted by the court without notice to the assessee or without the necessity of the assessee being present in court.

A tax collector generally seeks this attachment because of the financial position of the assessee or for some other appropriate reason, such as when there is a reported sale of unsecured property to another party, or when property is moved or hidden. Since this declaration must be filed under penalty of perjury, the tax collector should seek the advice of the county counsel prior to commencing the lawsuit.

2323. RESOLUTION OF BOARD OF SUPERVISORS
The board of supervisors directs and controls the prosecution and defense of all suits to which the county is a party (Gov. Code §25203). The board, by resolution, should authorize actions to recover delinquent unsecured property taxes, penalties, and costs. This should include the authority to name partners of an assessed partnership and other persons as alter egos or successors in interest.

A single annual resolution, or a resolution effective until rescinded, authorizing institution of legal actions by either the district attorney or the county counsel and the tax collector is recommended, since it facilitates collection and obviates the need for a resolution by the board of supervisors in each instance.

2324. NOTICE OF INTENTION TO BRING SUIT
The assessee may be notified before an action is filed that only immediate payment will avoid impending court action, the costs of which will be added to the amount due. Form SCO 2-09 is recommended.

NOTE: Consider sending one "Notice of Intent to Enforce Collections," which includes all collection alternatives. The desired methods can then be chosen without further notification.

2325. REFERRAL TO COUNTY COUNSEL
Following the delinquency date and prior to expiration of the statute of limitations, the tax collector may prepare and submit to the county legal officer a list of unpaid accounts where, individually, the total sum of tax and penalties exceeds $5,000 (Code Civ. Proc. §116.220(a)(2)).

The tax collector should keep county counsel informed of any payments the taxpayer makes. Counsel will be better able to advise whether to accept any partial payment. Partial payments do not constitute full satisfaction of the taxes, costs, and penalties due the county (Attorney General Opinion 9-18-79).

Amounts of $5,000 or less lie within the jurisdiction of the small claims courts (Code Civ. Proc. §116.220(a)(1)). Counsel may be consulted but may not appear in court. However, in known disputed cases involving amounts greater than $2,500, the county legal officer may pursue an action in superior court. County counsel may also wish to pursue an action in superior court to recover taxes from third parties liable under contract, "alter egos," or successors in interest.

2326. ENFORCEMENT BY COURT ACTION/ SMALL CLAIMS
Action in small claims court is commenced when the plaintiff files, in person or by mail, a claim under oath with the judge or clerk of the small claims division (Code Civ. Proc. §116.320). The claim shall be prepared by the tax collector in substantially the same form as shown in the Claim of Plaintiff and Order form (Code Civ. Proc. §116.320).

Civil Procedures Code section 116.220 authorizes suits where the small claims courts have jurisdiction in actions to enforce payment of delinquent unsecured personal property taxes if the legality of the tax is not contested by the defendant (M-2328).

Small claims actions often are less effective as a collection measure than either summary judgment or seizure and sale.

If an assessee denies the legality of unsecured personal property taxes, the tax collector may have the matter transferred to superior court (Code Civ. Proc. §116.220(a)) and (M-2328).

The assessee's defenses in any court action appear limited to:

1) The fact that the assessee did not own the property (People v. Wilson, 26 Cal. 127);

2) The nonexistence of the property on the lien date; or

3) The fact that the property was outside the jurisdiction of the county on the lien date. Temporary absence from jurisdiction is not, however, a valid defense against the assessment of personal property (Brock & Co. v. Board of Supervisors, 8 Cal. 2d 286; Church v. City of Los Angeles, 96 Cal. App. 2d 89).

Generally, summary judgment is preferable to a small claims action because the defendant often raises an "assessment" issue, requiring the case to be transferred to superior court (M-2328).

2327. FILING FEE EXEMPTION
Authority for exemption of filing fees is found in Government Code section 6103. However, the filing fee exempted by this section must be included in the amount of final judgment (M-2380).

2328. DEFENSES AGAINST COUNTY'S CLAIM
Small claims, justice, or municipal courts are without jurisdiction to try the legality or validity of the tax. Defenses raised on these points fall within the jurisdiction of the superior court only (Code Civ. Proc. §§86(a)(1), 116.220(a)(2); Cal. Empl. Stab. Com. v. Municipal Court, 62 Cal. App. 2d 781). In such cases, the district attorney or the county counsel should initiate steps to transfer these cases to the superior court.

In any suit for taxes, the roll or a duly certified copy of any entry showing the assessee, the property, and unpaid taxes or assessments is prima facie evidence of the plaintiff's right to recover (Rev. & Tax. Code §3004).

2329. STATUTE OF LIMITATIONS
The three-year statute of limitations, contained in the Code of Civil Procedure section 338(1), applies to suits for collection of unsecured taxes and begins with the date of delinquency (Los Angeles County v. Continental Corp., 113. Cal. App. 2d 207; see annotations to Revenue and Taxation Code sections 107 and 3003).

Civil actions for delinquent taxes or assessments, pursuant to Revenue and Taxation Code section 3003, shall be commenced within three years of the date upon which unsecured taxes became delinquent. The limitation period of this section shall be extended for any and all periods during which a civil action described by this section is prohibited by federal bankruptcy laws or rules or by a court order.

EXCEPTION: If property is acquired by a public agency so as to become tax-exempt, and all delinquent taxes, together with the pro rata share of current taxes, are transferred from the secured to the unsecured roll, the statute of limitations begins to run from the date of the transfer (Rev. & Tax. Code §5090(b)).