The California Court of Appeal held that a county’s failure to comply with statutory notice requirements did not render an assessment a “legal nullity” that would excuse the taxpayer from the requirement to exhaust administrative remedies.

For property tax purposes, California requires a “Notice of Proposed Escape Assessment” (which levies a retroactive assessment to recapture any under-taxation in prior taxable years) be issued ten days before the assessments are enrolled. The assessor, however, mailed the taxpayer such Notices only five days before the assessments were enrolled. The taxpayer timely paid the property taxes assessed by the Notices, and filed a refund action in court arguing that because the Notices were issued less than ten days before enrollment the assessments were void and subject to refund.

The court held that the taxpayer’s claim was not reviewable because it did not exhaust its administrative remedies. For escape assessments, taxpayers are required to file an administrative request for reassessment and refund before filing a refund action in court unless the assessment is a “nullity as a matter of law.” The court concluded that the assessment may be treated as a nullity only when the real property at issue was not tax exempt, nonexistent, or outside the county’s jurisdiction—circumstances that did not exist in the taxpayer’s case.

LA Live Props. LLC v. Cty. of L.A., No. B298278 (Cal. Ct. App. Feb. 26, 2021).