Opinion
H031985.
10-30-2008
CENTURY RESIDENTIAL, LLC, Plaintiff and Appellant, v. COUNTY OF SANTA CLARA, Defendant and Respondent.
Not to be Published
Century Residential, LLC (Century) brought this action against the County of Santa Clara (County) alleging that county taxing authorities had overvalued certain real property interests acquired by Century from the San Jose Redevelopment Agency (SJRA). Centurys main argument is that because the SJRA had treated the interests in question as having no value, the taxing authorities acted illegally in finding that the interests possessed a positive value. The superior court rejected the challenge and refused to set aside the Countys determination. We find no error in this ruling, but reverse for the limited purpose of securing clarification by the County of an apparent computational error in its findings and conclusions.
In the ground lease, the redevelopment agency is identified as "The Redevelopment Agency of the City of San Jose." On its website, however, the agency identifies itself by the name we have given in the text. (<http://www.sjredevelopment.org/> (as of Oct. 28, 2008).)
BACKGROUND
Century alleged in its first amended complaint, and County admitted in its answer, that Century was in possession of certain real property on South Third Street in San Jose under a 60-year ground lease from the SJRA. The lease requires no rent from Century for the first 10 years, and grants it an option to buy the property for $1 after that period. The property is also governed by a Development and Disposition Agreement (DDA) between Century and the SJRA. The DDA places certain restrictions on Centurys development and use of the property, perhaps most significantly a requirement to provide 13 units of affordable housing for 30 years. In accordance with the DDA, Century has developed the property by constructing an 89-unit apartment building with some 16,500 feet of commercial space.
For property tax purposes the property consists of two parcels. The County Assessor fixed the base year value of the land, as distinct from any improvements, at $1,385,685 for Parcel A and $4,224,314 for Parcel B. The Assessor valued the improvements at $3,933,035 for Parcel A and $11,990,184 for Parcel B.
Century appealed the Assessors determination with respect to the land, but not the improvements, to the Assessment Appeals Board (Board), which conducted a hearing on March 9, 2005. Prior to the hearing Century requested in writing that the Board prepare findings and conclusions. (See Rev. & Tax. Code, § 1611.5; Cal. Code Regs., tit. 18, § 308.) Counsel reiterated this request at the hearing, and the Boards chairperson expressed the intention to honor it. On May 9, 2005, the Board issued a notice of decision reducing the base value of the land for tax year 2003 from $1,413,398 to $687,674 for Parcel A, and from $4,308,800 to $2,096,434 for Parcel B. Meanwhile, despite repeated entreaties from counsel for Century to promulgate findings and conclusions, the County failed to do so in a timely fashion. On or about August 29, 2005, Century submitted a claim for refund to the County Board of Supervisors (Supervisors). Six months later, the Supervisors had taken no action on the application. Century thereupon exercised its prerogative to treat the claim as having been denied by operation of law. (See Rev. & Tax. Code, §§ 5097, 5141, subd. (b).)
Century filed this action on April 4, 2006. The County promulgated findings and conclusions on or about April 7, 2006. No affidavit of service appears of record, but Century alleges that the findings were "deliver[ed]" on April 24, 2006. Century thereupon filed its amended complaint, in which it alleged that "[t]he only appropriate and legally correct value of the land of Parcel A and Parcel B should be $0 as a base year value," and that the Boards contrary determination was "arbitrary, an abuse of discretion, and is not supported by substantial evidence because it constitutes a collateral challenge to the [SJRAs] determination that the land had a value of $0." It also alleged that according to the findings and conclusions, "the Board used a modified residual land method to determine that the value of the land as of May 8, 2001 (the transfer date) was $ 2,675,000. The Boards method is not appropriate or authorized by law." It further alleged that the Boards decision "creates an inappropriate and illegal assessment because it is arbitrary, an abuse of discretion, and is not supported by substantial evidence; and all taxes levied by County based on the Boards Decision were inappropriately collected." Century prayed for a judgment so declaring and remanding the matter to the Board for further hearing.
In its brief to the superior court, Century argued that the Assessor and Board "ignored the value established by the Redevelopment Agency," instead using "a more speculative and unreliable method" to determine the propertys fair market value; that they "should have valued the land according to the actual sales price," and that the court should "direct the Board to assess the property for no more than a nominal value." Century disclaimed any challenge to the Boards factual findings, and insisted that it was only charging the Board with using an "incorrect method of valuation," a question subject to independent judicial review. More specifically, it asserted that "the land residual method utilized by the Board in assessing the value of the Property was an incorrect method of valuation." Instead, it contended, the Board "should have adopted the sale method and recognized the sale by the [SJRA] to [Century] as the most reliable indicator of value." It also faulted the Board for its supposed failure to apply the presumption of California Code of Regulations, Title 18, section 2(b), that the consideration actually given for a piece of property represents its full value. In addition it contended that the Board had neglected to "take into account" the restrictions imposed on the property by the SJRA, as required by Revenue and Taxation Code section 402.1 (section 402.1). It also faulted the Assessor for determining construction costs from an industry publication rather than using the construction costs reported by Century to have been actually incurred. It claimed that permitting taxing authorities to assess redeveloped land at a value greater than that fixed by a redevelopment agency would undermine the policies sought to be effected by redevelopment law. Finally it asserted that the Boards calculation of value included a "blatant mathematical error" causing an overstatement of some $427,000.
Declaring that its decision was governed by the substantial evidence standard of review, the court denied relief. Century took this timely appeal.
DISCUSSION
I. Standard of Review in Trial Court
Century contends that the trial court applied an improper standard of review to the questions before it. Century insists that it raised only questions of law, which the trial court should have addressed de novo. As a potential basis of reversal this assertion suffers from many weaknesses, of which the most briefly stated is that its premise (that the case presents only issues of law) renders academic any error the trial court may have made. Insofar as Century is correct in this premise, we must and will apply our own judgment to the appeal without regard to what the trial court did. (See JKH Enterprises, Inc. v. Department of Industrial Relations (2006) 142 Cal.App.4th 1046, 1058, fn, 11 ["pure issues of law are always subject to independent appellate court review"].) It is true that in reviewing some administrative actions, trial and reviewing courts alike will accord deference to the agencys treatment of an issue of law, at least where it concerns a matter peculiarly within the agencys charter, such as the interpretation and application of its own governing statutes and regulations. (See MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 219.) But any misapprehension by the trial court on this or any similar point is necessarily immaterial to the questions before us. If the case really presented only questions of law, the trial court had neither factfinding nor discretionary power to exercise and there is nothing in its ruling that we can or should defer to. The outcome here will necessarily be the same no matter what the trial court did. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 346, p. 3396 [appellate court reviews trial courts actions, not its reasons].)
II. Method of Valuation
Century contends that the Board erred by relying on the residual land method of valuation. However, despite ample notice that the Assessor had relied on this method and the manifest risk that the Board would do the same, Century failed entirely to challenge this method before the Board. Indeed, Century itself relied on a value analysis, prepared for the SJRA, that itself applied a land residual methodology. Further, Century offers no authority for the necessary premise that this method is categorically improper; it ultimately asserts only that the Board "should" have used a different method. For all these reasons its challenge must fail.
Ordinarily a court reviewing an administrative ruling may only consider issues that were tendered to the agency whose action is challenged. (Sierra Club v. San Joaquin Local Agency Formation Com. (1999) 21 Cal.4th 489, 510 ["Administrative agencies must be given the opportunity to reach a reasoned and final conclusion on each and every issue upon which they have jurisdiction to act before those issues are raised in a judicial forum"]; Fair Political Practices Com. v. Californians Against Corruption (2003) 109 Cal.App.4th 269, 282 [refusing to consider constitutionality of fine imposed by commission].)
Conspicuously absent from Centurys showing below, and from its opening brief on appeal, is any indication that prior to filing its superior court action, Century ever objected to the Assessors or Boards reliance on the residual land method of valuation. This omission might be excused if there were some basis to conclude that Century was surprised by the Boards explicit reliance on this method in its findings and conclusions, but Century had ample notice that the Assessor relied on this method and that the Board was therefore likely to do so. Joseph Machado, who is identified in the record as "representing the Assessors Office," generated the written analysis on which the Board chiefly relied in its ultimate decision. In his introductory comments to the Board, Machado described his analysis as using "a land residual technique," and Board Chairperson Tish confirmed that it constituted a "land residual analysis." Over the rest of the hearing the phrase "land residual" was used no fewer than four times to characterize the method reflected in Machados analysis. Century was thus on explicit notice that the land residual method was central to the Assessors analysis and that in the absence of a cogent challenge to that method the Board would have no reason not to adopt it.
In its reply brief Century claims that it "attack[ed] the land residual method" before the Board. It supports this claim, however, only by citing comments at the hearing that it characterizes as asserting that "Property Tax Rule 2 should be the valuation method used" to valuate the property. It claims to have made this point six times before the Board. None of the cited passages can be understood as having "put the [Board] on notice," as Century now claims, of a challenge to the land residual method. On the contrary, two of the cited passages illustrate Centurys own reliance on a value calculation that appeared to rest on the very methodology Century now attacks. At these two points Centurys counsel did not allude, as now suggested, to the method that the Assessor had used. Rather he was describing the approach taken in a "Reuse Analysis" prepared for the SJRA by an entity referred to in the hearing as "Keyser Marsten." That document was offered by Century to establish the value of the land, and counsel explicitly observed that Century was "relying" on it. Century conceded it to be the only thing approximating an appraisal offered in support of its position. Throughout the hearing, the Board, through Chairperson Tish, expressed reservations about the reports suitability for present purposes. Nonetheless the Board ultimately admitted it into evidence over the Assessors objection that it lacked foundation and that its premises and conclusions could not be tested by cross-examination.
Century relied on the Reuse Analysis to support its contention that the land had a negligible, and indeed negative, value. Indeed even before us Century continues to characterize that analysis as using "a correct valuation principle." But to all appearances, that analysis utilized a variant on the land residual method. It explicitly derived a "residual land value" by projecting income for the project, positing a rate of return, calculating an initial investment amount sufficient to yield this return, subtracting the posited investment amount from projected costs, reducing the difference by the amount of financial support provided by the SJRA, and attributing the remaining difference—a negative $83,000—to the land. Understandably, the Board viewed this as a land residual land analysis; Chairperson Tish referred to it early in the hearing as "doing . . . a land residual analysis." Century did not take issue with this characterization. On the contrary, it described the analysis in its own hearing brief as deriving a "net residual value of the land," namely, "negative$ 83,000."
Century has never attempted to reconcile its reliance on this document with its claim that the land residual method is so categorically unreliable that the Board could not permissibly rely on it. Century has simply ignored the seeming inconsistency—and despite its opponents having explicitly hammered on it in the trial court, arguing, "[T]he KMA report that Mr. Widman referred to and upon which the Plaintiff relies so heavily . . . used a land residual technique, very similar to the technique that the Assessor used. So for them to now say that the technique that the Assessor used was an invalid technique and therefore the Court should review the record De Novo is an interesting concept, is an interesting position to take. [¶] . . . I dont agree that the KMA, the Kaiser Marston Reuse Analysis was truly an appraisal. . . . [A]ssuming that it was, it used the same land residual approach that the Assessor used. The difference between the two was that the Assessor had actual market data, both on retail rents, residential rents, and construction costs that went into the calculation. Whereas . . . there was absolutely no background data, appraisal data to support the Kaiser Marston [sic] determination value."
Century offered no response to these comments in the trial court. Nor has it addressed the inconsistency before us, other than by attempting in its reply brief to equate a challenge to the residual land method with a the contention that the Board failed to duly consider the supposed purchase price of the property. (See pt. III, post.) We view this as an implicit concession of what the record in any event seems clearly to show: that no challenge to the residual land method was offered before the Board, that on the contrary Century itself relied on that method, and that any such challenge has therefore been forfeited.
Even if the merits of the question were before us we would find insufficient basis in Centurys presentation to interfere with the Boards action. Century has furnished neither statute or precedent, from this or any other jurisdiction, concerning use of the land residual value method. Its sole authority on the subject is an appraisers text, which it cites in disparaging the method as "speculative and generally unreliable . . . ." The two pages of the text that Century has included in the record do not unequivocally support this characterization. The text states that the land residual method is "generally recognized by the courts as too speculative to yield a reliable indication of land value." (Appraisal Institute, The Appraisal of Real Estate (12th ed. 2001) p. 336.) But it goes on to allow that this method may be "applicable in testing the feasibility of alternative uses of a particular site in highest and best use analysis or when land sales are not available." (Ibid.)
In any event textbook excerpts are no substitute for legal authority. We are not at liberty to overturn the decision of an administrative agency based upon general statements of opinion in a text dealing with the substantive field specially entrusted by law to the agency. The Board is vested with the discretion and the presumptive expertise to select a method of valuation best suited to the circumstances presented in a particular case. For a court to intervene, it is not enough that the Boards choice appear open to criticism. It must appear to be a violation of governing legal rules.
The nearest thing to a legal argument offered by Century on this point is its assertion (under another heading) that the residual land method of valuation is not among those enumerated in the regulations governing assessments. (See Cal. Code Regs, tit. 18, §§ 4, 6, 8.) It is true that the residual land approach is not mentioned, but for this fact to be germane it would have to further appear both that the enumerated methods are the only ones permitted by law and that the residual land technique represents a fourth method, separate and distinct from all of them. Without addressing the first premise, we find the second wholly unsupported by anything in Centurys presentation, and at least arguably in tension with its own position below as well as with such authority as we find touching on the subject. One of the appraisers text excerpts submitted by Century categorized "[l]and residual" as a "procedure" under the heading of "[i]ncome capitalization," one of the "three traditional approaches to value." (Appraisal Institute, op. cit. supra, at p. 324; see Cal. Code Regs, tit. 18, §§ 3, subd. (e), 8; 9 Witkin, Summary of Cal. Law (10th ed. 2005) Taxation, § 217, pp. 325-326.) Counsel for Century told the Board that the SJRAs Reuse Analysis—which ultimately derived a "residual land value"—used a "cost method, which is one of three recognized methods in this state." In State ex rel. State Public Works Bd. v. Covich (1968) 260 Cal.App.2d 663, 666, the court identified three "approaches" to appraisal, namely, cost of reproduction, market data, and capitalized net income. It noted that none of these was exclusive of the others and that they were often used in parallel or combination. (Ibid.) It then observed that the third, "income" approach might employ "various techniques," including the " `property reversion or `property residual approach." (Ibid.)
These materials indicate that the land residual method is a type or particularization of the income capitalization method, which is one of the methods enumerated in the regulations. We are under no obligation to conduct an independent study of the taxonomy of appraisal methodologies to confirm or disprove this proposition. It is Centurys burden on appeal to affirmatively demonstrate that the trial court erred by failing to set aside the Boards decision. It does not carry this burden merely by suggesting possible grounds of error and inviting us—or the trial court—to independently investigate them.
In the absence of legal authority Century is reduced to assertions that the Board "should not" have used the land residual method. We cannot set aside the action of an administrative agency based only our belief that it "should" have done something else. With limited exceptions, questions of what an agency should do are entrusted to its own sound discretion. Courts are generally empowered to interfere with agency actions only where an agency has failed to do what is required, or has done what it is forbidden, by law. Mere claims that it "should" have acted differently are generally insufficient to tender any issue of which a court may take cognizance.
The trial court did not err in failing to set aside the challenged action based upon the Boards reliance on a residual land value approach.
III. Presumption from Sale
Century contends that the "trial court" erred by "failing to take into account the statutory presumption that the purchase price represents the propertys fair market value." Insofar as the argument faults the trial court it is obviously misplaced, for that tribunal was not empowered to engage in factfinding, which is where any presumption would come into play. We construe Centurys challenge as directed at the actions of the Assessor and the Board. The argument appears to proceed as follows: (1) The law generally presumes that the price actually paid for a property is its true value; (2) Century essentially paid nothing for the land at issue; (3) the Board did not fix the value of the land at zero; (4) therefore the Board "fail[ed] to take" the presumption "into account."
We may accept the first three premises and yet balk at the logical chasm over which we must leap to reach Centurys conclusion. The law does indeed generally presume that the consideration given in purchasing a property represents its market value. (See Rev. & Tax. Code, § 110, subd. (b); Cal. Code of Regs., tit. 18, § 2(b).) The presumption, however, is not conclusive. It is both conditional (certain factors must be present to trigger its application) and rebuttable. (See Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019, 1027-1028; Rev. & Tax. Code, § 110, subd. (b); Cal. Code of Regs., tit. 18, § 2(b).) A tribunals failure to accept the purchase price as the true value may therefore have at least three explanations: (1) The tribunal did not find the conditions triggering the presumption; (2) the tribunal applied the presumption, but found it rebutted by contrary evidence; (3) the tribunal ignored the presumption. Century assumes that the last hypothesis is the correct one, but it makes no attempt to affirmatively establish that point.
Revenue and Taxation Code section 110, subdivision (b), provides, "For purposes of determining the `full cash value or `fair market value of real property, other than possessory interests, being appraised upon a purchase, `full cash value or `fair market value is the purchase price paid in the transaction unless it is established by a preponderance of the evidence that the real property would not have transferred for that purchase price in an open market transaction. The purchase price shall, however, be rebuttably presumed to be the `full cash value or `fair market value if the terms of the transaction were negotiated at arms length between a knowledgeable transferor and transferee neither of which could take advantage of the exigencies of the other. `Purchase price, as used in this section, means the total consideration provided by the purchaser or on the purchasers behalf, valued in money, whether paid in money or otherwise. There is a rebuttable presumption that the value of improvements financed by the proceeds of an assessment resulting in a lien imposed on the property by a public entity is reflected in the total consideration, exclusive of that lien amount, involved in the transaction. This presumption may be overcome if the assessor establishes by a preponderance of the evidence that all or a portion of the value of those improvements is not reflected in that consideration. If a single transaction results in a change in ownership of more than one parcel of real property, the purchase price shall be allocated among those parcels and other assets, if any, transferred based on the relative fair market value of each."
An administrative decision is viewed, as are other official actions, through the lens of the presumption that "official duty has been regularly performed." (Evid. Code, § 664.) Thus administrative orders, no less than trial court judgments, "are presumed to be correct. Persons challenging them have the burden of showing that they are not supported or correct." (Antelope Valley Press v. Poizner (2008) 162 Cal.App.4th 839, 849, fn. 11.) A party claiming that an agency failed to proceed in a manner authorized by law must affirmatively demonstrate the factual premises for this contention before a court has any obligation to examine its legal arguments.
All the record shows here is that the Board failed to grant conclusive effect to the "purchase price" reflected in Centurys transaction with the SJRA. The Board may have concluded either that the conditions triggering the presumption were not present, or that the presumption was rebutted. It is not our duty to independently explore these possibilities. Rather it is Centurys burden to positively show that they do not furnish a satisfactory explanation for the Boards action. This it has failed to do. Accordingly, no ground for relief appears.
IV. Failure to Consider Restrictions
Similarly, Century contends that the Board abused its discretion, and acted arbitrarily and contrary to law, by "fail[ing] to take into account" the restrictions on Centurys use of the property imposed by the SJRA. Century cites Revenue and Taxation Code section 402.1 (§ 402.1), subdivision (a), which provides in part, "(a) In the assessment of land, the assessor shall consider the effect upon value of any enforceable restrictions to which the use of the land may be subjected. These restrictions shall include, but are not limited to, all of the following: [¶]. . . [¶] (2) Recorded contracts with governmental agencies . . . ." Century contends that the SJRA "subjected" the land to various "enforceable restrictions" as conditions of the transfer to Century, and that the Board, having failed to take these into account, rendered a fatally defective decision.
Again the argument suffers from an undemonstrated factual premise. Century makes no attempt to show that the Board disregarded the restrictions. It simply assumes that the Board did so. This appears highly unlikely. The restrictions were a recurring topic of argument and colloquy throughout the hearing before the Board. Counsel for the Assessor freely acknowledged that the restrictions had to be considered, but contended that they were "not that onerous." Indeed Chairperson Tish acknowledged the restrictions as "a pivotal issue in the case." While the Boards findings and conclusions did not explicitly recite that it considered the restrictions, they recited both parties positions on the subject and expressly adopted the Assessors overall treatment as "the most reliable indicator of the value of the land," subject to certain specified adjustments, which appear predominantly if not entirely favorable to Century.
At one point the chair announced an intention to receive further briefing, and conduct a continued hearing, on the question of "how and to what extent the Board is to consider the development agreement in accord with section 402.1 . . . ." The Assessor contended, however, that he had already taken cognizance of the restrictions, which in his view "really result in . . . a highest and best use of this property." He disclaimed any contention that the restrictions could be disregarded. In that light the chair opined that the Boards proposal for further briefing, and by implication for further hearing, might be "moot." The Assessor agreed, saying, "I think its a factual issue for the Board at this point." There was no dissent from Century; an unidentified male speaker agreed that both parties were "valuing the property subject to the DDA [development agreement] . . . ." The chair thereupon announced "no brief, no continuance." No one objected.
Against this strong evidence that the Board considered the restrictions, Century points to no evidence that it failed to do so. Apparently we are expected to infer as much from the Boards failure to agree with Century that the restrictions reduced the value of the land to zero. This of course we cannot do. In the absence of an affirmative showing to the contrary we must presume not that the Board committed legal error by ignoring the restrictions but that it soundly exercised its factfinding discretion to conclude that the restrictions had a less dramatic effect than Century claimed for them. The value of the restrictions was a quintessentially factual question and the Boards ruling on it cannot be disturbed without an affirmative showing that the evidence was insufficient to support it. Century repeatedly disclaims any challenge to the sufficiency of the evidence. It has therefore failed to state any basis for relief from the Boards treatment of the restrictions.
The insufficiency of the record to establish the claimed error distinguishes this case from those cited by Century. In Dominguez Energy v. County of Los Angeles (1997) 56 Cal.App.4th 839, taxing authorities explicitly refused to allow any present reduction in value for the cost of complying with certain environmental requirements. (Id. at pp. 855-856.) The assertedly erroneous method of valuation was thus apparent from the face of the challenged orders. In Humphries Investments, Inc. v. Walsh (1988) 202 Cal.App.3d 766, 769, an arbitrator explicitly directed that the value of certain property would be determined "without regard for any current or hypothetical use of such land except the highest and best use for which the demised premises would be suited if vacant and unimproved." The superior court clarified this directive to "allow consideration of ordinances and statutes which might proscribe or render financially unfeasible a change of use of the property." (Ibid, fn. omitted.) The reviewing court found no error in this clarification. The only question before the court was whether legal constraints on the development of the property should be taken into account, and it answered that question affirmatively.
Here the question is not whether legal constraints should be taken into account but whether the record demonstrates that they were not taken into account. The answer is negative. No error appears.
V. Arithmetic Error
Century reprises its contention in the trial court that the calculations set forth in the Boards findings and conclusions contain a "blatant mathematical error" resulting in an overstatement of value by some $427,000. We agree that the calculations set forth in the findings appear to be arithmetically incorrect. As we understand them, they culminate in the following equation: $ 20,572,993 - ($1,575,000 + $16,750,000) = $2,675,000. As Century points out, the correct sum of this calculation should be $2,247,993. Therefore, assuming no error in the addends, the Boards calculation seems to overstate the value by $427,007.
The Countys only response to this point is to suggest somewhat obliquely that Century forfeited the point by failing to present it to the Board. But the anomaly could not have been raised before the Board before it was revealed in the Boards findings and conclusions, which were not served until after this lawsuit was filed. County implies that Century should still have applied to the Board to clarify its findings, noting that under the regulations, "When findings of fact have been prepared, either party or the clerk may submit a written request for clarification about the details of the decision . . . ." (Cal. Code Regs., tit. 18, § 325 subd. (c).)
We do not believe that the County should be heard to invoke this provision, or more pertinently, to invoke an exhaustion requirement, when its own unexplained 11-month delay in promulgating findings rendered orderly proceedings impossible. To recap the relevant proceedings, the Board gave notice of its action on May 9, 2005. On June 1 and again on August 26, 2005, counsel for Century wrote to the clerk of the Board memorializing the clerks acknowledgment that findings were "overdue" and her promise to remind the Boards counsel "that she must produce the findings." Around August 29, Century submitted to the Supervisors its claim for refund of taxes. More than seven months later, on February 4, 2006, Century filed this action, alleging that the County had failed to serve findings despite a promise by counsel to do so by September 16, 2005, and despite yet another letter on October 11, 2005, demanding that she do so.
Although the County does not address the point and we decline to independently research it, we acknowledge the possibility that Century might have been able to preserve its right to judicial review while waiting indefinitely for findings. Assuming this is true, we see no reason to empower one party to protract proceedings perpetually by simple inaction. Nor do we think Century should be subjected to a procedural forfeiture because of the possibility that it might have sought clarification from the Board when the findings were served, even though it had by then filed suit. The exhaustion rule is not merely some sort of gantlet that the law requires a party to run as proof of his honor or merit. The County was holding money that Century contended belonged to it. Centurys right to secure judicial review of that contention should not have to wait for action that the County had no incentive to take, and had shown every indication it might never take. Having placed Century into this predicament, the County will not now be heard to assert that Century should have come back to it for clarification after it finally performed its duty, but too late to avoid a court action. One purpose of the exhaustion rule, after all, is to secure a resolution of all issues at the earliest, most expeditious, and least expensive stage of proceedings. A party who forces its opponent to move into the next stage of proceedings can hardly invoke this policy to impose a procedural forfeiture.
On its face the Boards determination is marred by a computational error. There is no way to know whether the error is truly one of arithmetic or if some error was made in recording the data used to derive the final sum. The matter must therefore be remanded to the County for the limited purpose of correcting the orders under review to conform to the laws of mathematics. Whether this will entail a reduction in the assessed value depends on whether the error lies in the computation or in transcribing the values from which it was calculated.
DISPOSITION
The matter is reversed with directions to remand to the County for the limited purpose of correcting its orders as stated herein. In all other respects the trial courts judgment is affirmed.
WE CONCUR:
MIHARA, J.
McADAMS, J.