Filed 8/10/26 22310 PCH v. County of Los Angeles CA2/5
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
22310 PCH, LLC, B342497
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 23STCV08232)
v.
COUNTY OF LOS ANGELES,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Christopher K. Lui, Judge. Affirmed.
Greenberg Traurig, Colin W. Fraser, and Cris K. O’Neall
for Plaintiff and Appellant.
Renne Public Law Group, Michael K. Slattery, Thomas G.
Kelch, Ryan P. McGinley-Stempel, and Zoe Tatarsky for
Defendant and Respondent.
******
A buyer set a record-breaking transaction when it
purchased a home on Malibu’s Carbon Beach for $110 million in
April 2018. Because it was an off-market transaction, the
purchase price does not presumptively govern the home’s fair
market value for purposes of assessing property taxes. The buyer
and the local taxing authority therefore presented competing
comparative sales analyses to the assessment appeals board, with
the buyer advocating for a $36 million value and the local taxing
authority advocating for a $105 million value. The board rejected
the buyer’s analysis because it relied on sales that were not
comparable to the home. Because substantial evidence supports
the $103 million fair market valuation found by the board, we
affirm the trial court’s judgment dismissing the buyer’s refund
action challenging the board’s valuation.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. The property
Situated on two parcels at 22258 and 22310 Pacific Coast
Highway in Malibu, California sits a residential compound. Built
in 2005 using the costly construction method of concrete and
steel, the property, which is hidden behind security gates and
trees, consists of: (1) a 4,618 square foot, two-story, L-shaped
main residence with four bedrooms and five bathrooms; (2) a
2,316 square foot guest house with three bedrooms and four
2
bathrooms, as well as a movie screening room; (3) a large lap
pool; (4) extensive decking joining the structures and traversing
the native landscaped grounds; and (5) 131 linear feet of beach
frontage. The two-parcel lot is 30,254 square feet, of which
16,630 is usable.
The property was designed by Richard Meier, the architect
responsible for The Getty, and utilizes plantation-grown teak as
the primary design feature—teak cladding covers the exterior,
teak shutters control the influx of light and ocean breeze, and
teak decking stretches the length of the beach frontage. The
wood must be oiled multiple times each year to maintain its
sheen.
The property is located in Malibu’s Carbon Beach
neighborhood, which is “one of the most exclusive and expensive
stretches of sand in the world.” Carbon Beach has been coined
“Billionaire’s Beach” to signify the type of residents the
neighborhood attracts.
B. Purchase of the property
Sometime before April 2018, a Canadian natural gas
billionaire and his spouse began renting the property. They
decided they wanted to buy it as a vacation home, and made an
unsolicited offer of $90 million. The then-owner1 demanded $110
million, and the couple agreed to that price.
The $110-million sale closed on April 24, 2018, with the
couple’s entity, 22310 PCH LLC (the owner), holding the
property.2 The transaction was reported as “the most expensive
1 The property was owned by Peter Morton, who founded the
Hard Rock Café restaurants and casino.
2 The purchase price did not include the furniture and
artwork in the home.
3
home sale ever [in] Los Angeles County” at the time, surpassing
the $100-million sale of the Playboy mansion.
Two months after the purchase, the owner obtained an $85
million bank loan secured by the property.
C. Enrolled value
Upon the property’s change in ownership, the County of
Los Angeles (the County) enrolled the $110 million purchase
price as the new “base year value” of the property for purposes of
assessing annual property taxes. Specifically, the two parcels of
land were valued at $107 million and the improvements were
valued at $3 million.
D. Owner’s assessment appeal
1. Application
On March 26, 2019, the owner filed an assessment appeal
application with the County’s Assessment Appeals Board (the
Board) challenging the enrolled value.
2. Hearing
The Board conducted a hearing on the owner’s appeal on
May 3, 2022.
Because the owner asserted that it did not buy the property
in an open-market transaction and therefore rebutted the
presumption that the purchase price governed, the hearing
involved competing opinions of the property’s fair market value
using the comparative sales approach. Pursuant to that
approach, the owner and the County each presented sales of
other homes that were comparable to the property (i.e., “comps”)
and made appropriate adjustments to characteristics of the
comps that differed from the property to try to produce an apples-
to-apples comparison.
4
Based on their different sets of comps, the owner and the
County presented divergent opinions as to what the property
would have sold for in the open market.
a. The owner’s comparative sales analysis
The owner asserted the property’s fair market value is $36
million based on its comparative sales analysis.3
The owner’s appraiser used three comps to arrive at that
figure, which are summarized in the following chart with upward
or downward adjustments indicated by red text:
The 22506 21614 22160
Property Pacific Pacific Pacific
Coast Hwy Coast Hwy Coast Hwy
Location / Carbon Carbon La Costa Carbon
Distance Beach Beach Beach Beach
0.3mi 1mi 0.2mi
Improvements 4,618sqf 5,829sqf 5,131 4,036
$300/sqf -$372,300 -$153,900 +$174,600
Bedrooms 4 5 4 4
$50,000/bed -$150,000 -$150,000
Bathrooms 5 6 7 4
$25,000/bath -$25,000 -$50,000 +$25,000
Pool Yes Yes None None
$50,000 +$50,000 +$50,000
Guest house Yes Yes None None
$1,000,000 +$1,000,000 +$1,000,000
Extras Tennis court
-$200,000
Lot size 30,254 31,800 8,640 10,020
Usable size 16,630 19,000 8,640 10,020
$2,000/sqf -$4,740,000 +$15,980,000 +13,220,000
3 In its appeal application, the owner claimed the property’s
fair market value was $65 million.
5
The 22506 21614 22160
Property Pacific Pacific Pacific
Coast Hwy Coast Hwy Coast Hwy
Beach 131 137 45 60
frontage -$300,000 +$4,300,000 +$3,550,000
$50,000/ft
Construction 2005 1932 / 1971 1978 / 2000 1956 / 1975
date /
effective year
built
Quality class CX 12D D11.5C D9.5B
+$1,900,000 +$723,750 +$935,000
[5%] [5%] [5%]
Sale date 4/24/18 3/22/18 6/30/17 6/29/18
Sale price $110m $38m $14.475m $18.7m
Reconcile -$3,887,300 +$21,699,850 +$18,954,600
TOTAL $34,112,700 $36,174,850 $37,654,600
The owner’s appraiser did not make adjustments to the
comps to account for variances between the property and the
comps in (1) location (specifically, that 21614 Pacific Coast
Highway was not located on Carbon Beach); (2) year of
construction and effective year based on renovations (specifically,
that all three comps were built decades ago); and (3) sale date
(specifically, that 21614 Pacific Coast Highway was sold in
different market conditions a year prior). He testified that
adjusting the comps for “age of the structure” was not “necessary”
because the listing photos showed those homes were in “very good
condition” and because the high-net-worth buyers would renovate
the homes anyway. The appraiser made a flat five-percent
adjustment for any differences in quality class of construction,
regardless of the degree of difference in quality class. The
6
appraiser adjusted the size of improvements at $300 per square
foot because “maybe it would cost [that] to build extra space.”
According to the owner’s appraiser, “[t]here was nothing . . .
special” or “out of the ordinary” about the property purchased by
the owner.
b. The County’s comparative sales analysis
The County asserted the property’s fair market value is
$105 million based on its comparative sales analysis.4
The County’s appraiser used two comps to arrive at that
figure, which are summarized in the following chart with upward
or downward adjustments indicated by red text:
Subject 22108 25040
Property Pacific Coast Pacific Coast
Highway Highway
Location Carbon Beach Carbon Beach Bluffs
0.21 miles 3.5 miles
+$17,425,000
[20%]
Improvements 4,618sqf 2,279 9,000
$1,000/sqf +$2,339,000 -$4,382,000
Bedrooms 4 4 6
$45,000/each -$90,000
Bathrooms 5 4 7
$50,000/each +$50,000 -$100,000
Pool Yes
Guest house Yes Yes Yes
3 bedrooms / 1 bedroom / 800sqf
4 bathrooms 2 bathrooms + $1,516,000
+$638,000
4 Because the County’s opinion was within five percent of the
enrolled value, the County argued for no reduction in the $110
million enrolled value.
7
Subject 22108 25040
Property Pacific Coast Pacific Coast
Highway Highway
Second
guesthouse
-$1,000,000
Extras Inferior privacy Ocean view
+$4,897,500 +$4,356,300 [5%]
[8%] Superior privacy
-$4,356,300 [5%]
Basement
-$1,350,000
Lot size 30,254 39,584 231,619
Usable size 16,630 26,685 135,438
$1,000/sqft -$5,027,500 -$5,940,400
[used $500/sqf] [$50/sqf]
Beach frontage 131 280 0
$50,000/ft -$7,450,000 +$6,550,000
Construction 2005 1948 / 1967 2012 / 2012
date / effective +$5,000,000
year built
Quality class CX D85D DX
+$10,000,000 +$2,500,000
Sale date 4/24/18 5/2/17 2/9/18
15%/year +$12,750,000 +2,125,000
Sale price $110,000,000 $85,000,000 $85,000,000
Reconciliation +$22,187,000 +$18,253,600
TOTAL $107,187,000 $103,253,600
The County’s written comparative sales analysis noted that
the property is “unique [and] for a unique buyer” and that there
were “limited high value comps” on which to rely in preparing in
8
the analysis.5 The first comp used by the County was the
publicized sale of David Geffen’s Carbon Beach compound.
However, that was not an open-market transaction and the
County’s analysis employed data from the assessor’s records that
did not include aspects visible in aerial images or described in
news articles about the sale (such as the number of parcels and
improvements).
The County’s witness who testified at the hearing was not
the appraiser who prepared the written analysis. When
questioned about certain adjustments the County made to its two
comps, the witness could not opine as to the preparing appraiser’s
reasoning and testified the adjustments were based on “appraiser
judgment.” The witness testified that while the County’s written
analysis stated the comps’ usable lot size would be adjusted
according to $1,000 per square foot, that characteristic was
adjusted by $500 per square foot for the first comp on Carbon
Beach and $50 per square foot for the second comp on the bluffs.
The witness testified that he did not disagree with the preparing
appraiser’s analysis given the varying values for beach-side and
bluff-side land in Malibu, but that the adjustment also could have
been accounted for in the location characteristic instead.
3. Decision
The Board issued its decision on October 17, 2022, finding
“by a preponderance of the evidence that the fair market value
for the [] property . . . is $103 million.”
The Board found, as a threshold matter, that the owner
met its burden of rebutting the presumption that the purchase
price governed by showing the property “was not exposed for sale
5 The owner’s agent agreed, stating in closing argument that
“[t]here’s not a lot of sales on this beach.”
9
in the open market.” However, in establishing the value of the
property had it been sold under open-market conditions, the
Board found that none of the owner’s three comps were
“comparable” to the property. Specifically, the Board found
“enormous dissimilarity in regard to character, quality class and
age” between the property and the owner’s comps. Considering
the “real estate principal of substitution”—that is, setting a
property’s value according to the cost of acquiring “an equally
desirable substitute” property—the Board found that no buyer of
a $110 million property would consider a $36 million property an
adequate substitute.
The Board further found, on the other hand, that the
County’s first comp on Carbon Beach was “similar” to the
property. Although it was not sold in the open market, the Board
confirmed that comps “were scarce” and, therefore, the off-market
comp could be used since it was “the best or only available data.”
To account for that comp not being exposed to open-market
conditions, the Board assigned it only 45-percent weight (and the
second, bluff-side comp 55-percent weight) in determining the
property’s fair market value. The Board also adjusted the usable
lot size for the County’s first comp according to $1,000 per square
foot (which it pegged as between the County’s $500 per square
foot and the owner’s $2,000 per square foot calculations).
II. Procedural Background
A. Refund action
The owner challenged the Board’s decision by bringing a
lawsuit against the County on April 13, 2023, seeking a refund of
the property taxes it paid pursuant to the improper valuation of
the property.
10
B. Ruling
Following the submission of trial briefs, a hearing, and the
issuance of a proposed statement of decision followed by
objections, the trial court rendered a final statement of decision
on August 30, 2024 denying the owner’s claim.
The court ruled that the Board “properly discharged its
duties” by making a “detailed evaluation” of the parties’ evidence,
making “criticisms of both” sets of comps, and basing its
determination of fair market value “on what [the Board] found to
be the more credible evidence—the [County’s] comparable sales.”
Specifically, the trial court found the Board’s rejection of the
owner’s comps “well supported” because those comps were of
“lesser quality” and because age was “an important factor” that
the owner made no adjustments for. The court further found that
the Board “properly exercised its discretion” in considering the
County’s first comp despite it not being an open-market
transaction.
C. Appeal
Following the entry of judgment for the County, the owner
timely filed this appeal.
DISCUSSION
The owner’s challenge to the Board’s valuation of the
property turns on how the comparative sales approach should be
applied where there are a limited number of transactions that are
similar to the property at issue.
I. Governing Law
A. Valuation of property for assessment of taxes,
generally
When a piece of real property changes ownership, the local
assessor is required by the California Constitution to determine a
11
new base year value for that property—that is, the “full cash
value” or “fair market value” of the property. (Cal. Cons., art.
XIII, § 1(a); id., art. XIIIA, § 2(a); Rev. & Tax. Code, § 110.1,
subd. (b).) “[A]fter a property’s base year value is determined,
subsequent entries onto the assessment rolls [generally] are done
pro forma without the need to exercise one’s judgment as to
value, simply by applying an inflation factor to the previous
year’s entry.” (Montgomery Ward & Co. v. County of Santa Clara
(1996) 47 Cal.App.4th 1122, 1137.)
The “purchase price paid in the transaction” is presumed to
be the “full cash value” or “fair market value” of the property;
however, that presumption can be rebutted by showing, by a
preponderance of the evidence, that the property “would not
have” sold for the “purchase price in an open market
transaction.” (Rev. & Tax. Code, § 110, subds. (a) & (b); Cal. Code
Regs., tit. 18, §§ 321, subd. (e), 305.5, subd. (c); Dennis v. County
of Santa Clara (1989) 215 Cal.App.3d 1019, 1028 [“an arm’s
length, open market sale for a price that is not influenced by an
exigency of either buyer or seller permits the assessor to presume
fair market value from the purchase price, but the presumption
may nevertheless be rebutted by evidence that the fair market
value of the property is otherwise”].)
B. Hearing to determine fair market value
Where a party disputes that the sale price reflects the fair
market value of the property, the assessment appeals board for
the county in which the property is located is entrusted with the
“quasi-judicial” power to “equalize” the value of the property.
(Plaza Hollister Ltd. Partnership v. County of San Benito (1999)
72 Cal.App.4th 1, 22; Shell Western E & P, Inc. v. County of Lake
(1990) 224 Cal.App.3d 974, 979; Steinhart v. County of Los
12
Angeles (2010) 47 Cal.4th 1298, 1307; Cal. Const., art. XIII, § 16;
Cal. Code Regs., tit. 18, §§ 301, subds. (a), (d) & (m), 302.) In so
doing, the assessment appeals board exercises its special
expertise in property valuation. (Shell Western, at pp. 979–980;
Stenocord Corp. v. City etc. of San Francisco (1970) 2 Cal.3d 984,
988 [“disputes regarding valuation are within the special
competence of the board of equalization”], superseded by statute
on other grounds as stated in Steinhart, at p. 1311.)
Because the local assessor is presumed to have “properly
performed” its duties, the burden is on the party who applies to
the board challenging the enrolled value to overcome the
presumption that the enrolled value—that is, the purchase
price—is not correct.6 (Cal. Code Regs., tit. 18, §§ 321, subd. (a),
313, subd. (c); California Minerals, L.P. v. County of Kern (2007)
152 Cal.App.4th 1016, 1022.) In proceedings where both the
applicant and the local assessor present evidence, the board
“must weigh all of the evidence to determine whether it has been
established by a preponderance of the evidence that the
assessor’s determination [of value] is incorrect.” (Cal. Code Regs.,
tit. 18, § 321, subd. (b).) The “technical rules relating to evidence
and witnesses” do not apply to hearings before the board, and
“[a]ny relevant evidence may be admitted if it is the sort of
evidence on which responsible persons are accustomed to rely in
the conduct of serious affairs.” (Rev. & Tax. Code, § 1609; Cal.
6 The opposite applies—and the local assessor bears the
burden of supporting its enrolled value—when the property is an
owner-occupied single-family dwelling. (Rev. & Tax. Code, § 167;
Cal. Code. Regs., tit. 18, § 321, subd. (d); Mitchell v. County of Los
Angeles (1997) 60 Cal.App.4th 497, 500 (Mitchell).) Here, the
owner has made no assertion that this rule applies.
13
Code Regs., tit. 18, § 313, subd. (e).) But in weighing that
evidence, the board must apply “the same evidentiary standard”
to both sides’ evidence. (Cal. Code Regs., tit. 18, § 321, subd. (f).)
The board is not restricted to choosing “between the opinions of
value promoted by the parties”—the board may “make its own
determination of value based upon the evidence properly
admitted at the hearing.” (Id., § 324, subds. (a) & (b).)
C. The comparative sales approach
In general, there are three basic appraisal approaches for
determining a property’s fair market value: (1) the comparable
sales approach; (2) the income or capitalization approach; and (3)
the cost approach. (Olen Commercial Realty Corp. v. County of
Orange (2005) 126 Cal.App.4th 1441, 1446.) The comparative
sales approach—the one utilized in this case—is the “preferred
method.” (Cal. Code Regs., tit. 18, § 4; Farr v. County of Nevada
(2010) 187 Cal.App.4th 669, 686.) Under that approach, the local
assessor “examines and correlates the prices resulting in other
transactions involving comparable properties [citation]; the
validity of this method rests upon the assumption that
comparable properties have comparable [fair market] values.”
(Bret Harte Inn, Inc. v. City and County of San Francisco (1976)
16 Cal.3d 14, 24.)
When selecting comps for the sales comparison approach,
the comps must (1) have been sold “sufficiently near in time to
the valuation date” and (2) be “sufficiently alike in respect to” (a)
“character,” (b) “size,” (c) “situation,” (d) “usability, (e) “zoning,”
or (f) “other legal restriction as to use.” (Rev. & Tax. Code,
§ 402.5, subd. (a); Cal. Code Regs., tit. 18, § 4, subd. (d); see also
Dressler v. County of Alpine (1976) 64 Cal.App.3d 557, 567
(Dressler) [these “comparability factors . . . are similar to those
14
applied in eminent domain valuation”].) The standard for
comparability is “not absolute;” a comp need only be
“sufficient[ly]” similar “to make it clear” that the comp “shed[s]
light” on the fair market value of the subject property. (Rev. &
Tax. Code, § 402.5, subd. (a); Dressler, at p. 569; Midstate
Theaters, Inc. v. County of Stanislaus (1976) 55 Cal.App.3d 864,
880 (Midstate Theaters).) Thus, “[e]ven relatively poor data” can
be used as a comp “if it is the best or only data available.”
(Midstate Theaters, at p. 880; cf. Domenghini v. County of San
Luis Obispo (1974) 40 Cal.App.3d 689, 699 [where taxpayer fails
to produce information, assessor may issue estimated assessment
based on “the best information then available to him”].)
Where there are differences in the characteristics of a comp
compared to the subject property, the local assessor must make
“allowances” it “deems appropriate” to account for differences
between the comp and the subject property, and to thereby
“adjust” the comp’s sale price. (Cal. Code Regs., tit. 18, § 4,
subds. (c) & (d).)
When the board makes its determination of value, it may
consider only those comps that, “in [the board’s] judgment,
involve properties similar in size, quality, age, condition, utility,
amenities, site location, legally permitted use, or other physical
attributes to the property being valued.” (Cal. Code Regs., tit. 18,
§ 324, subd. (d).)
D. Standard of review
“‘“Although a local assessment appeals board decision
arises from an administrative hearing process, the mechanism for
seeking judicial review of the decision ‘“is significantly different
from that of other administrative agency decisions. . . . [T]he
aggrieved [property owner’s] remedy is . . . to pay the tax and file
15
suit in superior court for a refund.”’”’” (RAR2 Villa Marina
Center CA SPE, Inc. v. County of Los Angeles (2023) 91
Cal.App.5th 1050, 1065.)
Where the property owner’s refund action attacks the
board’s application of a valid valuation method, we review the
record to determine whether the board’s findings are supported
by substantial evidence. (Next Century Associates, LLC v. County
of Los Angeles (2018) 29 Cal.App.5th 713, 722 (Next Century);
Georgiev. V. County of Santa Clara (2007) 151 Cal.App.4th 1428,
1437 (Georgiev) [where assessment is challenged “on the ground
that a ‘valid method’ has been ‘erroneously applied,’” assessment
may be overturned only if board’s valuation is “not supported by
substantial evidence”]; Phillis v. County of Humboldt (2020) 59
Cal.App.5th 432, 440 [same].) But where the refund action
attacks the validity of a valuation method used by the local
assessor or board, our review is de novo. (Ibid.; Main & Von
Karman Associates v. County of Orange (1994) 23 Cal.App.4th
337, 342 (Main & Von Karman) [appeal presents question of law
where appellant’s “contention goes to the methodology used (i.e.,
that the assessor violated the standards prescribed by law”]; GTE
Sprint Communications Corp. v. County of Alameda (1994) 26
Cal.App.4th 992, 1001 [same].)
II. Analysis
Substantial evidence supports the Board’s determination
here that, based on the two comps the County relied upon in its
comparative sales analysis, the fair market value of the property
is $103 million.
There is no dispute that the owner overcame the purchase-
price presumption because the transaction here was not
conducted in the open market. The owner therefore had the
16
burden of showing, by a preponderance of the evidence, that the
fair market valuation by the County was incorrect. It failed to do
so. The County’s two comps giving rise to the $103 million
valuation are sufficiently alike to the property so as to shed light
on the fair market value of the property. One is located on the
desirable Carbon Beach, and while the other is located on the
bluffs of Malibu, it is of a similar magnitude in luxury appeal.
Like the property, the comps have several bedrooms and
bathrooms, at least one guest house, and a pool. To be sure, the
property is different from the comps in some noteworthy ways.
The Carbon Beach property has a larger usable lot and greater
beach frontage, but was constructed and renovated many years
ago using inferior quality materials. The bluffs property has a
larger residence, more privacy, and a massive usable lot size, but
was also constructed using less desirable materials and located in
a neighborhood that was not as renowned as Carbon Beach. The
County’s assessor accounted for these dissimilarities with various
adjustments to the comps to bring them more in line with the
attributes of the property. This is exactly what the law governing
the comparative sales approach contemplates.
The owner raises what boils down to five arguments
challenging the Board’s finding.
First, the owner argues that the Board erred in selecting
the County’s comparative sales analysis over that of the owner’s
expert. However, the Board found that the owner’s three comps
were not sufficiently similar to the property to warrant reliance
on those comps’ sales prices in determining the fair market value
of the property. We do not reweigh the evidence giving rise to
that factual finding and defer to that finding if supported by
substantial evidence—here, it is. (Georgiev, supra, 151
17
Cal.App.4th at p. 1437.) Unlike the property, the owner’s second
and third comps had no pool or guesthouse, a substantially
smaller lot size, and minimal beach frontage. All three of the
owner’s comps were constructed decades ago with lower-grade
materials.7 Unlike the County’s analysis, the owner’s appraiser
did not make any adjustments to the comps for several critical
comparison factors—namely, site location, year of construction
and renovation, and sale date. (See Next Century, supra, 29
Cal.App.5th at p. 723 [the board “has the power to disregard a
valuation analysis it determines for good reason is
unpersuasive”].)
The owner nevertheless asserts that the Board applied an
“arbitrary” “double standard” in evaluating the parties’ evidence,
allowing the County to also use an older comp (the Carbon Beach
property) and different construction quality but rejected the
owner’s comps for the same dissimilarities. This argument
ignores that the owner’s appraiser refused to adjust the comps to
account for the age of construction/renovation and made a
uniform adjustment of construction class without regard for
degree of class. The Board noted this in its summary of the
owner’s evidence and therefore had a basis to find the County’s
comparative sales analysis more persuasive. The owner further
asserts that the Board improperly rejected its comps based on the
“fallacy” that a buyer willing to pay $110 million for the property
would not consider a $38 million home. To be sure, determining
fair market value does not necessarily involve the subjective
7 The quality class rating of the property was CX, which
means the masonry entailed the use of fireproof concrete in the
walls. This rating is not typical for a home and was superior to
the ratings of the owner’s comps.
18
desires of a specific buyer. (See Mola Development Corp. v.
Orange County Assessment Appeals Bd. (2000) 80 Cal.App.4th
309, 311–312 [the law “contemplates a hypothetical open market
transaction”].) But pursuant to the comparative sales approach
for determining fair market value, comps “are those properties
that effectively compete with (i.e., are close substitutes for the
subject property).”8 (Bd. of Equalization, Assessors’ Handbook,
Advanced Appraisal, § 502, ch. 3 (Dec. 1998), p. 35.) The Board
therefore acted well within its discretion in finding that the
owner’s comps—which sold for $38 million, $14.475 million, and
$18.7 million—were not valid substitutes for purposes of
evaluating the property’s value because they did not effectively
compete with the owner’s $110 million purchase. (Cal. Code
Regs., tit. 18, § 324, subd. (d) [“the board may consider those
sales that, in its judgment, involve properties similar in size,
quality, age, condition, utility, amenities, site location, legally
permitted use, or other physical attributes to the property being
valued”], italics added; see A. F. Gilmore Co. v. County of Los
Angeles (1960) 186 Cal.App.2d 471, 477–478 [“The board
seemingly preferred and accepted the opinion of the assessors’
witness to that of the witness of the appellants and this the board
was entitled to do.”].)
Second, the owner argues that the Board was prohibited
from using the Carbon Beach comp in the County’s comparative
sales analysis because that property did not trade in an open-
8 We grant the owner’s and the County’s requests for judicial
notice of excerpts of relevant handbooks and manuals used in the
assessment process. (Evid. Code, §§ 452, subds. (c), (h), 459,
subd. (a).)
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market transaction.9 The Board recognized that this $85 million
transaction was not exposed to the open market, but included it
in calculating the property’s fair market value (albeit assigning it
lesser weight in the calculation) because of the dearth of helpful
sales data. Indeed, the parties agreed before the Board that sales
data for Carbon Beach is scarce. Faced with valuing a sui generis
home like the property here, the Board properly relied on the
County’s comp as one of the only sufficiently similar data
available. (Midstate Theaters, supra, 55 Cal.App.3d at p. 880; Bd.
of Equalization, Assessors’ Handbook, Basic Appraisal, § 501
(Jan. 2002), p. 94 [“usefulness” of comparative sales approach is
“limit[ed]” where “certain types of property are infrequently sold”
and “few comparable sales exist”].)
Third, the owner argues that the County submitted only
“threadbare” evidence and “unverified” data in support of its
comparative sales analysis. (See Bd. of Equalization, Assessors’
Handbook, Advanced Appraisal, § 502, ch. 3 (Dec. 1998), p. 35
[“Application of the comparative sales approach requires detailed,
verified data regarding the subject and comparable properties”].)
This argument fails because the “technical rules relating to
evidence and witnesses” do not apply to proceedings before the
Board and, in any event, the owner waived any challenge to the
County’s evidence by failing to object. (Cal. Code Regs., tit. 18,
§ 313, subd. (e).)
Fourth, the owner argues that it was denied due process
because the appraiser who prepared the County’s analysis did not
testify at the hearing and the witness who did testify on behalf of
9 The County continues to assert that its Carbon Beach comp
qualifies as an open-market transaction, but the County failed to
appeal the Board’s decision finding to the contrary.
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the County could not answer several basic questions about the
County’s analysis. The owner was not denied due process. The
owner was afforded “[a] full and fair hearing” with a “reasonable
opportunity” to cross-examine the County’s witness.10 (Cal. Code
Regs., tit. 18, § 313, subd. (e); Dressler, supra, 64 Cal.App.3d at p.
567; see Mitchell, supra, 60 Cal.App.4th at p. 501 [where
appraiser who prepared analysis was not the witness who
testified, party objected to analysis on the basis of hearsay and
inability to cross-examine]; cf. People ex rel. Department of Public
Works v. Reardon (1971) 4 Cal.3d 507, 512–513 [violation of due
process in eminent domain case where trial court curtailed all
inquiry into circumstances of other sales].) At bottom, the
owner’s due process-based argument is a veiled attempt at
attacking the sufficiency of the County’s evidence supporting the
Board’s valuation of the property.
Fifth and finally, the owner argues that the defects in the
County’s comparative sales analysis establish that the valuation
of the property was based on an invalid methodology and,
therefore, we should review the Board’s determination de novo.
This argument lacks merit. Unlike the cases cited by the owner
where the local assessor failed to perform the steps required by
the comparative sales approach, the methodology here was
properly applied—the owner simply disagrees with the County’s
comps and the sufficiency of its proof. (See Main & Von Karman,
10 In addition, the owner could have requested that the
appraiser who prepared the County’s analysis be subpoenaed to
appear at the hearing or that the hearing be continued to enable
that appraiser to appear. (Cal. Code Regs., tit. 18, § 322, subd.
(a) [subpoena]; County of Los Angeles Assessment Appeals Board
Rules (June 2010), rule 23(B) [continuances].)
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supra, 23 Cal.App.4th at pp. 340–341 [local assessor made no
adjustments to comps based on belief that law governing
comparative sales approach was merely a guideline and not a
requirement; de novo review applied]; Mitchell, supra, 60
Cal.App.4th at p. 504 [witness was not assessor who prepared
analysis and could not explain why assessor used “short-cut
practice of making an ‘overall adjustment’”; de novo review
applied]; Midstate Theaters, supra, 55 Cal.App.3d at pp. 880–881
[same].) Those disagreements present a garden variety
substantial evidence challenge.
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DISPOSITION
The judgment is affirmed. The County is entitled to costs
on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
KUMAR, J.*
We concur:
MOOR, Acting P. J.
KIM (D.), J.
* Retired Judge of the Superior Court of Los Angeles
County, assigned by the Chief Justice pursuant to article VI,
section 6 of the California Constitution.
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