City of Los Angeles v. Centex Telemanagement, Inc.

California Court of Appeal Oct 20, 1994 No. B073192Published

Before: Woods (a.M.)

AI Brief

AI-generated · verify before citing

Holding. The statute of limitations for a city's tax collection action is tolled while a taxpayer pursues mandatory administrative remedies, meaning the limitations period does not begin to run until those remedies are exhausted.

Issues

Whether the statute of limitations for a city's tax collection action is tolled while a taxpayer pursues administrative remedies.
Whether the doctrine of exhaustion of administrative remedies applies when the taxing entity is the party bringing the legal action.

Disposition. reversed

Quotations verified verbatim against the opinion

“We hold, therefore, that the statute of limitations for the City’s collection action did not commence until Centex had exhausted its administrative remedy with the board of review’s issuance of a decision on April 14, 1989.”

“It is clear to us from these provisions that the doctrine of exhaustion applies in this case and pending such exhaustion the City was not authorized to begin a legal action.”

Opinion

WOODS (A. M.), P. J.

The City of Los Angeles (City) appeals the dismissal of its action against Centex Telemanagement, Inc. (Centex) for money due on an unpaid tax assessment on grounds the action was barred by the statute of limitations.

Centex provides telecommunications management services for a fee to small and medium-sized businesses located in the City. Centex paid the City an annual business tax based on the amount of these fees.

In June 1987, Centex filed a claim for a refund of its previous year’s business tax. The City then informed Centex it was beginning an examination of Centex’s business tax liability for 1986 and 1987.

On June 27, 1988, the City notified Centex that its examination had resulted in additional liability in the principal amount of $38,048.05. On September 16, the City issued to Centex a notice of tax due which stated in part that if payment was not made by October 17, 1988, there would be an additional penalty of $6,564.71. When Centex failed to pay the tax, the City, on November 3, 1988, sent Centex a second letter that referred to “delinquent” amounts and informed Centex if it failed to pay its tax liability before November 30, 1988, additional interest would be charged. No additional penalty was sought, however. When Centex again failed to pay the tax, the City, on November 22, 1988, sent another letter notifying Centex that it was levying an assessment in the amount of $44,218.23, which amount included the original penalty and interest.

Centex then sought an administrative hearing under Los Angeles Municipal Code (L.A. Municipal Code) section 21.16. Pursuant to that statute, the matter was heard before the City’s board of review. On April 14, 1989, the board affirmed the assessment. Centex filed written exceptions to the notice of decision.

On November 21, 1991, the City filed the instant complaint. Centex filed an answer asserting, inter alia, the statute of limitations. The trial of the action was based exclusively on written stipulated facts and documentary exhibits. The City argued that the statute of limitations was tolled while

[1387]

City of Los Angeles v. Centex Telemanagement, Inc.

AI Brief

WOODS (A. M.), P. J.

More from California Court of Appeal

Related research

AI Brief