O.C. Sued for Millions Over Taxes

A class-action lawsuit filed Tuesday alleges that the county owes millions of dollars in property tax refunds to residents and businesses whose appeals were delayed but who didn’t know enough to complain.

Filed on behalf of William B. Bunker, an Orange County resident who challenged the county’s valuation of his property in 1992, and what his lawyers estimate are 1,500 other people, the suit alleges that the county failed to refund the property owners money they were owed under state law, even as similar refunds were being handed out to others.

Under the law, tax assessment appeals must be heard within two years. If they are not, the county has to accept the owner’s proposed value. Those values usually are lower than those proposed by the county.

When real estate values plunged in the early 1990s, more than 100,000 appeals for reduced property tax assessments were filed. The demand created a backlog--which reached 61,000 cases at its height in 1995--in the hearing appeals process.

About 200 property owners who complained after the county missed deadlines to hear their appeals received refunds in 1994. The largest of those was $2 million to Bank of America, which had disputed the county’s valuation of its check-processing center in Brea.

The clerk of the Board of Supervisors, Phyllis Henderson, resigned her position in the wake of the missed deadlines.

The suit alleges that about 1,500 other property owners whose appeals were not heard within two years but who never complained to the county never received refunds.

The county “decided to keep quiet about its responsibilities and not adopt the valuations in the applications filed by the taxpayers who did not know enough to raise the issue themselves,” according to the claim.

Robert Julian, the San Francisco attorney who filed the suit, said, “[The county] apparently had the view that if people didn’t know their rights, then they had no obligation to do anything for them. For those who knew, the county made good.”

County officials contacted Wednesday said that they had not reviewed the suit, which was filed in Orange County Superior Court on Tuesday.

The suit does not seek damages for the plaintiffs who, aside from Bunker, are not identified in the suit. Instead, it seeks property tax refunds and attorneys’ fees.