County Assesses Danger in Tax Court Case

Robert Pool and wife Renee Bezaire of Seal Beach felt pretty good when they got a refund check on their property taxes last year. But their joy turned sour when they found out a few weeks ago that the full force of Orange County government is taking them to court to get it back.

The county is getting tough on this one. Hey, a hundred bucks is a hundred bucks, right? Plus 55 cents.

That’s right, the Pool/Bezaire refund check was for $100.55.

It cost more than that just to serve court papers on the couple. Then there are lawyers and secretaries and copy machines and miscellaneous court costs.

Are Pool and Bezaire so notorious that the county has to take them to court over a single Ben Franklin?

It turns out there’s much more at stake. If Pool/Bezaire have correctly figured that Proposition 13 limits the county on how much it can increase their property’s assessment, it could affect thousands of other properties in Orange County.

“It wouldn’t matter if the amount involved was one dollar or a million dollars,” said Orange County Assessor Webster Guillory. “My job is to be even-handed and fair to all taxpayers.”

If the $100 lawsuit seems a little wacky to the average taxpayer, here’s another bizarre twist that might frazzle you too--the same lawyer winds up on both sides on this issue.

To understand all this, here’s some background:

Pool and Bezaire, who have two young daughters, bought a three-bedroom home in Seal Beach in late 1995 for $330,000. For the next three years, they paid their property taxes just like everyone else, the same amount each year.

But in 1998, the county assessor’s office gave the Seal Beach couple some disturbing news: The value of their property would be listed at a 4% increase.

Now that’s the kind of thing most of us would curse at, then go ahead and pay accordingly.

Not Pool. He happens to be a tax attorney. He makes his living representing people and companies against government tax collectors.

Pool was convinced the county had no right, under Proposition 13, to increase his property value any more than 2%. The assessor’s office argued it could compound that 2% to 4% because the property hadn’t been hit with any increases in previous years.

Pool and Bezaire paid, but appealed to the county’s Assessment Appeals Board for a refund. Board members weren’t sure if Pool’s argument was right, so they turned to their attorneys for advice.

That would be the county counsel’s office.

County Counsel vs. ... County Counsel

Deputy County Counsel Karen Prather, in a vigorously worded opinion, said the Seal Beach couple were correct. She wrote that the assessor’s 4% increase “violates . . . the Revenue and Taxation Code . . . . “

Voila! After two hearings, Pool and Bezaire got their $100.55 check in the mail last October.

But a few weeks ago, the county assessor sued in Superior Court to get it back. And just who is representing the assessor’s office in this legal matter?

That would be the county counsel’s office.

Uh, the same county counsel’s office that said Pool and Bezaire were correct. County Counsel Laurence M. Watson’s letterhead is on both the pro and con.

Watson understands that to the average taxpayer “that looks kind of dumb.”

But he does explain it well. The Legislature allows the county counsel’s office to wear numerous hats. Otherwise, the county would have to hire outside counsel to represent its various clients when they were at odds. And that would be highly expensive.

So Watson creates divisions within his office and establishes what he says is the “Great Wall of China” between them.

Even so, he admits, when these situations come up, “that’s not good.” Someone in his office is saying someone else in his office doesn’t know what she’s talking about.

The assessor’s office lawsuit lists the Assessment Appeals Board that gave the couple their tax break. Normally, such a situation would put Watson going to battle in court against himself. To avoid that, the Assessment Appeals Board has waived its right to counsel. That means Watson’s lawyers will be left to fight what the law calls “the real parties of interest.” That would be Pool and Bezaire.

Let me say right here that I have no idea which side is right. I’ve read the briefs from the lawsuit. I’ve also read the state statute that both sides use to back their position. It’s all totally over my head. If tax experts cannot agree on what it means, how should I know?

But something in me is pulling for the taxpayers. Maybe because I pay property taxes too. Maybe there’s something about siding with the little guy up against City Hall.

Pool is luckier than most of us who would be in that position. He’s in a law office with a host of friends who are tax lawyers. They’re just itching to get into court to fight the county counsel’s office on this one.

How far is Pool willing to carry this?

“I don’t see this settled anywhere short of the state Supreme Court,” he said. “This is a precedent type of case or the county wouldn’t be fighting us over $100.”

Guillory, the assessor, is just as convinced that such cases are too important to let the dollar amount determine how far he takes it.

“These are technical issues that affect all taxpayers,” Guillory said. “Otherwise, we’d never bother appealing it.”

I just hope his folks don’t go looking at my house next.

Jerry Hicks’ column appears Monday and Thursday. Readers may reach Hicks by calling (714) 966-7789 or e-mail to jerry.hicks@latimes.com.