Filed 8/26/26 Prang v. L.A. County Assessment Appeals Bd. CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
JEFFREY PRANG, as County B351304
Assessor, etc.,
(Los Angeles County
Plaintiff and Appellant,
Super. Ct. No. 25STCP01036)
v.
LOS ANGELES COUNTY
ASSESSMENT APPEALS BOARD
NO. 4,
Defendant;
GI TC ONE WILSHIRE, LLC,
Real Party in Interest and
Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Curtis A. Kin, Judge. Reversed with
directions.
Law Office of Albert Ramseyer and Albert Ramseyer for
Plaintiff and Appellant.
No appearance for Defendant.
Greenburg Traurig, Colin W. Fraser, Cris K. O’Neall, and
Blake M. Thomas for Real Party In Interest and Respondent.
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
This appeal asks whether the minimum pleading
requirements for a petition for writ of administrative mandate
have been met, sufficient to defeat a general demurrer (or as
here, the equivalent motion for judgment on the pleadings). The
test is the same as it is in most civil cases. The petition must
(i) set forth ultimate facts sufficient to (ii) state a valid cause of
action.
The petition here met this basic test, so we reverse the trial
court which found to the contrary.
BACKGROUND
In 2014, GI TC One Wilshire, LLC (One Wilshire)
purchased a building at 624 South Grand Avenue, Los Angeles
(the property) in July 2013 for $437,500,000. The property is
located at the physical terminus of several major undersea fiber
optic cables, and at the time of the sale was leased primarily for
use as a “carrier hotel,” a building that hosts web servers for web
hosting organizations and large enterprises.
(<https://www.pcmag.com/encyclopedia/term/telecom-hotel> [as of
Aug. 26, 2026], archived at <https://perma.cc/W52W-WQUD>.)
The property’s upper floors were leased as office space.
After the property’s transfer, the Los Angeles County
Assessor (Assessor) appraised it to establish a property tax base.
2
The Assessor determined that the property’s fair market value
was its sale price of $437,500,000 as of tax year 2014, attributing
$37,500,000 to the land and $390,500,000 to improvements.
1. The administrative proceedings.
One Wilshire filed a challenge to the Assessor’s valuation
with the Los Angeles County Assessment Appeals Board
(Board).1 One Wilshire contended that the sale price included a
nontaxable “ ‘peering premium’ ” and that the property’s taxable
value was $243,000,000. One Wilshire argued that the property
had attracted hundreds of telecom lessees who were willing to
pay above-market rents because the proximity of other Internet
servers—i.e., “ ‘peering’ ”—“makes their telecom services faster,
more efficient, and more reliable.” One Wilshire argued that this
“ ‘peering premium’ ” was an intangible asset that should be
subtracted from the property’s sale price to determine the
property’s taxable value.
The Board took testimony and issued a written decision in
September 2024. It summarized the testimony of the witnesses
and made findings.
The Board noted that intangible assets are not taxed as
real property. That is, taxing authorities are required to value
intangible assets and remove that value from a property’s taxable
base. Intangible assets are those, such as trade names, logos,
1 The Board sits as the Board of Equalization of Los Angeles
County. The Board is a quasi-judicial body that settles valuation
disputes between the taxpayers and the Assessor.
(<https://bos.lacounty.gov/services/assessment-appeals/> [as of
Aug. 26, 2026], archived at <https://perma.cc/WSU3-PPKU>.)
3
customer relationships, and goodwill, whose value is not
attributable to real property or tangible personal property.
The Board concluded that the property’s sale price included
an intangible asset—namely, a “peering premium”—that it
described as follows:
“[T]he [property] is a ‘carrier hotel,’ that ‘powers the
internet’ and one of the most important Data Centers
and points of internet connectivity in the United
States. [One Wilshire] has built an ecosystem of
hundreds of telecom companies that, because of the
[property’s] extensive infrastructure, can connect to
the core of the internet and each other, i.e., ‘peering’,
without connecting to the public internet. . . . The
evidence also shows that the telecom companies in
the [property] pay a premium for the telecom office
space as compared to traditional office space or basic
telecom office space in other buildings. The Board
finds that the evidence supports [One Wilshire’s]
claim that the ‘peering premium’ is an intangible
asset.”
The Board found that telecom offices in buildings with very
few other telecom offices—“tier two” offices—rented for $3 per
square foot per month, which the Board found “represents value
attributed solely to real estate and does not represent intangible
value.” In contrast, telecom offices in buildings with a “ ‘critical
mass’ ” of Internet service providers—“tier one” offices—rented,
on average, for $4.73 per square foot per month. The Board
concluded that the additional $1.73 per square foot in rent
($4.73/square foot – $3.00/square foot = $1.73/square foot) that
tier one buildings were able to charge was an intangible asset
“that does not inhere in the buildings and furnishings.”
4
The Board calculated that the rents the property was able
to attract over comparable “tier two” buildings totaled $8,366,280
per year ($1.73 per square foot per month x 12 months x 403,000
square feet of telecom space). The Board then adopted a
capitalization rate of 10.53 percent, by which it divided
$8,366,280, to calculate a “ ‘peering premium’ ” of $77,863,000.
The Board thus concluded that the property’s taxable value was
its purchase price of $437,500,000, less its intangible value of
$77,863,000, for a total of $359,637,000.
2. The mandate proceedings.
The Assessor sought review of the Board’s decision by filing
a petition for writ of administrative mandate in the trial court in
March 2025 (Code Civ. Proc.,2 § 1094.5), and filed the operative
first amended petition in April 2025.3
The petition alleged that the Board abused its discretion in
three separate ways by concluding that One Wilshire’s critical
2 Further statutory references are to the Code of Civil
Procedure.
3 Separately, One Wilshire filed a refund complaint against
the County (GI TC One Wilshire LLC v. County of Los Angeles,
Los Angeles Superior Court case No. 25STCV08289). In
March 2025, the Assessor filed a notice that the mandate and
refund cases were related. One Wilshire agreed. The trial court
nonetheless declined to relate the two cases, and the refund
action remains pending in a different department. The Assessor
suggests that if we reverse the judgment in this case, we should
direct the cases be related. The Assessor has not cited authority
suggesting that this issue is before us in this appeal, and thus we
deny the request. We express no opinion on the matter should
either party renew the request in the trial court.
5
mass of telecommunications leases was non-assessable intangible
asset: (1) the Board “did not decide the case . . . in the manner
required by law,” (2) its decision “is not supported by the
findings,” and (3) “the findings are not supported by the
evidence.”
The petition alleged that the property contained physical
amenities necessary to support a major telecommunications data
center—including security, electrical capacity, HVAC, fire
suppression systems, backup generators, batteries, telecom
facilities, transformers, electrical vaults, and fiber vaults—that
the Board erroneously found were not part of the property’s
taxable value. Further, the Board “disregarded the actual rent
that the [property] yields resulting from the leasing of space to its
telecommunications tenants,” excluded from the property’s
taxable value its rent stream attributable to its valuable location,
and erroneously concluded that the property’s “ ‘connectivity
amenities’ are an intangible assets as distinct from real
property.”
In effect, the petition alleged that the evidence showed that
the property commanded rents higher than tier two properties
because of its exceptional location and physical infrastructure,
not an intangible peering premium. The petition claimed that
the evidence did not support the Board’s conclusion that any
portion of the property’s capitalized income stream was an
intangible asset and so not taxable. The Assessor asked the court
to issue a writ of mandate directing the Board to vacate its final
determination and amend its findings.
One Wilshire filed a motion for judgment on the pleadings
in August 2025. It argued that the Assessor’s petition offered
just one legal theory to challenge the Board’s ruling—namely,
6
that the Board erred as a matter of law by disregarding the
actual rent the property generated in calculating the property’s
taxable value. One Wilshire argued that as a matter of law a
property’s assessed value must be based on “market rent,” and
thus an above-market rent premium is a non-taxable intangible
asset that must be removed from assessment. One Wilshire
further urged that the petition should be dismissed with
prejudice because it could not be amended to state a claim.
The Assessor responded that the petition stated a cause of
action because it alleged that the value determined by the Board
was “contrary to law, unsupported by evidence, and inadequately
explained.” Specifically, the Assessor argued, the Board’s
valuation was not supported by substantial evidence because the
Board “failed to equalize [One Wilshire’s] tangible property in
recognition of ‘all of the uses and purposes to which the property
is capable of being used’ . . . (Rev. & Tax Code, § 110(a).) Stated
in appraisal terms, the Board did not equalize the [property]
consistent with its highest and best use.”
The Assessor further contended that the Board’s findings
were erroneous as a matter of law and the Board did not
adequately explain its conclusions because while the Board
acknowledged that the property has “ ‘extensive connectivity
infrastructure,’ ” it did not explain what that infrastructure was
or why it would justify reducing One Wilshire’s property tax
assessment. The Assessor thus requested that the court deny the
motion for judgment on the pleadings and set the matter for trial.
The trial court granted the motion for judgment on the
pleadings. The court concluded, first, that the Assessor’s
contention that the Board should have assessed the property’s
7
taxable value based on its actual rents was contrary to law. The
court explained:
“[T]he Board permissibly determined that the higher
lease rates charged to the subject property’s
telecommunication tenants resulted from a premium
paid for ‘peering,’ which is ‘an intangible asset that
was generated solely from [One Wilshire]’s business
model of having a significant number of telecom
tenants who can take advantage of the [property’s]
extensive connectivity infrastructure.’ . . . It was
therefore not error for the Board to deem the ‘peering
premium’ as a non-assessable intangible asset.”
Second, the court found that the decision adequately
explained the Board’s reasoning. To the extent that the Assessor
claimed otherwise, “this theory is also without merit based on the
Decision.”
Third, the court found that the Assessor did not properly
plead a lack of substantial evidence because it raised this issue
“for the first time in its opposition.” In any event, the court said,
“the Decision’s summary of evidence describes substantial
evidence supporting that decision and [the Assessor] does not
represent that it could or would allege in good faith that the
Decision incorrectly recounts or summarizes the evidence before
the Board.”
Finally, the court declined leave to amend “[b]ecause [the
Assessor] has failed to articulate how the petition could be
reasonably amended.”
8
The trial court entered judgment for One Wilshire. The
Assessor timely appealed.4
DISCUSSION
The Assessor urges that the petition stated a cause of
action for administrative mandate because it alleged, among
other things, that the Board’s attribution of approximately
$78 million of the sale price to a nontaxable “peering premium”
was not supported by substantial evidence. The Assessor notes
that the Board calculated the “peering premium” by comparing
the property’s actual rents to rents paid for “tier two” properties,
concluding that the property’s higher rents were entirely
attributable to its intangible assets. The Assessor asserts that
the evidence presented at the hearing demonstrated otherwise—
that is, that the property’s premium rents were due to its
physical infrastructure, including its connectivity and physical
amenities, which are tangible (and thus taxable) assets. The
Assessor urges that the trial court should have denied the motion
for judgment on the pleadings and considered his substantial
evidence challenge with reference to the entire administrative
record. We agree.5
4
The Assessor filed a request for judicial notice with his
opening brief, which One Wilshire opposes. The documents
attached to the Assessor’s request for judicial notice are not
relevant to our resolution of this appeal, and thus we deny the
request. (The Chemical Toxin Working Group, Inc. v. The Kroger
Company (2026) 120 Cal.App.5th 276, 288, fn. 5 [only relevant
material may be judicially noticed].)
5 Because we so conclude, we need not consider whether the
petition also adequately alleged that the Board did not proceed as
9
A motion for judgment on the pleadings is equivalent to a
demurrer and is governed by the same standard of review
(York v. City of Los Angeles (2019) 33 Cal.App.5th 1178, 1193)—
that is, we exercise our independent judgment as to whether, as a
matter of law, the petition states a cause of action on any
available legal theory. (Saint Francis Memorial Hospital v. State
Dept. of Public Health (2021) 59 Cal.App.5th 965, 973 (Saint
Francis).)
This mandamus proceeding is subject to the general rules
of pleading applicable to civil actions. (Saint Francis, supra,
59 Cal.App.5th at p. 973.) The pleading must simply have “[a]
statement of facts constituting the cause of action, in ordinary
and concise language.” (§ 425.10 (a)(1).) Ultimate facts suffice.
(Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) The
elements of the cause of action are simply whether the agency
“proceeded without, or in excess of, jurisdiction; whether there
was a fair trial; and whether there was any prejudicial abuse of
discretion. Abuse of discretion is established if the respondent
has not proceeded in the manner required by law, the order or
decision is not supported by the findings, or the findings are not
supported by the evidence.” (§ 1094.5, subd. (b).)
The pleading bar is not high. “For good reason, California
state civil procedure makes complaints easy to write and hard to
attack: Experience shows litigation effort devoted solely to
attacking pleadings is costly and time consuming and rarely
yields much helpful information for litigants about the true value
required by law or that the decision was not supported by the
findings within the meaning of section 1094.5.
10
of their case.” (Brown v. Los Angeles Unified School Dist. (2021)
60 Cal.App.5th 1092, 1110 (Wiley, J. conc.).)
The bar was met in this case.
The operative petition alleges a cause of action for
administrative mandate, relying on three theories: the Board did
not proceed as required by law, and its decision was not
supported by its findings, and its findings were not supported by
the evidence. A competent claim under any one of these theories
defeats a demurrer or, as here, a motion for judgment on the
pleadings. (E.g., Fire Ins. Exchange v. Superior Court (2004)
116 Cal.App.4th 446, 452.)
The petition is adequate. It alleges both that the Board’s
findings were not supported by substantial evidence, as well as
these supporting facts: The property was purchased in July 2014
for $437,500,000, which the Assessor determined was its taxable
value. But the Board reduced the property’s assessed value by
approximately $78 million, determining that that portion of the
sale price was attributable to an intangible “peering premium,”
not taxable value. This finding “was not supported by the
evidence” because the rents paid by the property’s
telecommunications tenants were attributable to the property’s
tangible assets—including its “valuable location” in downtown
Los Angeles and a variety of amenities necessary to support a
telecommunications data center, such as “security, electrical
capacity, HVAC, fire suppression systems, backup generators,
batteries, telecom facilities, transformers, electrical vaults, and
fiber vaults”—not to an intangible “peering premium.” The
evidence further established that the property’s tenants “pay
significant rent because of the [property’s] . . . amenities.” (Italics
added.)
11
The petition alleged the ultimate facts relevant to
establishing a claim for administrative mandate—that the
evidence before the Board did not support its finding that
approximately $78 million of the sale price was attributable to an
intangible peering premium, not to taxable value.
No more was required for the pleading.
Nevertheless, One Wilshire makes arguments in defense of
the judgment below, to which we now turn.
First, One Wilshire contends that the substantial evidence
issue is not properly before us because the petition “did not allege
that the Board’s decision lacked the support of substantial
evidence.” But as we’ve noted, it plainly does.
Second, One Wilshire contends that the Assessor advocated
“a new rule” that “would require this Court to apply substantial
evidence review when considering an order granting a demurrer
or motion for judgment on the pleadings.” Not so. The Assessor
just contends, rightly, that an administrative mandate petition
states a claim sufficient to survive a motion for judgment on the
pleadings if it alleges that the Board’s findings were not
supported by substantial evidence.
Third, One Wilshire appears to argue that the Assessor
can’t present a substantial evidence claim here because he didn’t
introduce critical evidence before the Board, thus forfeiting the
substantial evidence challenge. For example, One Wilshire says
the Assessor “fail[ed] to present evidence to establish a market
rental rate for telecom space,” “never challenged One Wilshire’s
position that the peering premium was a non-taxable asset,” and
“failed to meet [his] burden . . . to identify, value, and remove
intangible assets from assessment.” But these contentions rely
on what happened at the Board hearing—which is not properly
12
before us (or the trial court) in a motion for judgment on the
pleadings. These motions look only to the face of the petition and
judicially noticed facts. (Environmental Health Advocates, Inc. v.
Sream Inc. (2022) 83 Cal.App.5th 721, 728.) We may consider the
Board’s findings, appended to the petition, but we don’t assume
their truth. (Gerawan Farming, Inc. v. Agricultural Labor
Relations Bd. (2018) 23 Cal.App.5th 1129, 1149, fn. 24.) The
“facts” that One Wilshire contends establish forfeiture in the
Board proceedings are not to be considered in connection with a
motion for judgment on the pleadings.
Fourth, One Wilshire contends that the trial court properly
rejected the Assessor’s substantial evidence challenge because, in
the trial court’s words, the Board’s findings “ ‘describe[]
substantial evidence supporting that decision and [the Assessor]
does not represent that [he] could or would allege in good faith
that the [Board’s findings] incorrectly recount[ed] or
summarize[d] the evidence before the Board.’ ” This
mischaracterizes substantial evidence review. When considering
a challenge to the sufficiency of the evidence, courts “ ‘ “ ‘ “review
the whole record in the light most favorable to the judgment
below to determine whether it discloses substantial
evidence.” ’ ” ’ ” (People v. Jimenez (2025) 117 Cal.App.5th 602,
608, italics added; § 1094.5, subd. (c) [“abuse of discretion is
established if the court determines that the findings are not
supported by substantial evidence in the light of the whole
record”].)
The trial court may not short circuit this review by
considering only the trier of fact’s findings, divorced from the
record. Ocheltree v. Gourley (2002) 102 Cal.App.4th 1013
(Ocheltree) is instructive. There, the plaintiff filed a petition for
13
writ of mandate, contending that an administrative decision was
not supported by the evidence. The trial court denied the petition
on the merits before the agency prepared the administrative
record, and the plaintiff appealed. The plaintiff argued on appeal
that the trial court erred by deciding the substantial evidence
issue without reviewing the administrative record. The Court of
Appeal wrote that the “trial court stated it made its decision after
reviewing the petition for writ of mandate. But it did not review
the administrative record because it had not yet been prepared.”
The court noted the “trial court could not independently weigh the
evidence and resolve these issues without reviewing the
administrative record.” (Id. at pp. 1017–1018, italics added.) The
court concluded: “It is one thing to put the cart before the horse.
Here the trial court put the cart without the horse.” (Id. at
p. 1015.)
We agree with Ocheltree that where a petitioner challenges
an agency’s findings as unsupported by substantial evidence, the
trial court may not limit its review to the face of the findings, but
must consider those findings in light of the underlying
administrative record; indeed, the whole record. (Roddenberry v.
Roddenberry (1996) 44 Cal.App.4th 634, 652; Asimow et al., Cal.
Practice Guide: Administrative Law (The Rutter Group 2025)
¶ 17:267.)
Relying, as the trial court apparently did, on only the
findings recited by the Board may well miss context and facts
that undermine the administrative findings. That’s why the
evaluation cannot be done on demurrer or motion for judgment
on the pleadings:
“As Chief Justice Traynor explained . . . .
‘Occasionally’ . . . ‘an appellate court affirms the trier
14
of fact on isolated evidence torn from the context of
the whole record. Such a court leaps from an
acceptable premise, that a trier of fact could
reasonably believe the isolated evidence, to the
dubious conclusion that the trier of fact reasonably
rejected everything that controverted the isolated
evidence. Had the appellate court examined the
whole record, it might have found that a reasonable
trier of fact could not have made the finding in issue.
One of the very purposes of review is to uncover just
such irrational findings and thus preclude the risk of
affirming a finding that should be disaffirmed as a
matter of law.’ (Traynor, The Riddle of Harmless
Error (1969) p. 27.) (Fns. omitted.)” (People v.
Johnson (1980) 26 Cal.3d 557, 577–578.)
Finally, One Wilshire argues that the Assessor’s claim that
the Board made an error of law by disregarding actual rent is
itself erroneous because fair market value for tax purposes is
based on market rent, not actual rent.
But we need not reach this issue. The petition adequately
alleges lack of substantial evidence. It therefore states a cause of
action for administrative mandate, and so the motion for
judgment on the pleadings should have been denied. (See Santa
Clarita Organization etc. v. County of Los Angeles (2024)
105 Cal.App.5th 1143, 1165 [motion for judgment on the
pleadings cannot be granted as to only a portion of a cause of
action]; Fire Ins. Exchange v. Superior Court, supra,
116 Cal.App.4th at p. 452 [same].)
For these reasons, the trial court erred in granting
One Wilshire judgment on the pleadings. We therefore reverse
the judgment and remand the matter for the trial court to
consider the mandate petition on the merits.
15
DISPOSITION
The judgment is reversed and the matter is remanded to
the trial court with directions to vacate its order granting
One Wilshire’s motion for judgment on the pleadings, and enter a
new order denying that motion. The Assessor is awarded his
appellate costs.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
KARNOW, J.*
We concur:
ADAMS, P. J.
HANASONO, J.
* Retired Judge of the San Francisco Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.
16