Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Los Angeles County Nos. BC316447, BC319543 and BC331404 , Conrad Aragon, Judge.
Winston & Strawn, Charles J. Moll III, Hannah L. Blumenstiel and Matthew A. Scherb for Plaintiff, Respondent and Appellant.
Edmund G. Brown, Jr., Attorney General and Felix E. Leatherwood Jr., Supervising Deputy Attorney General; Raymond G. Fortner, Jr., County Counsel and Albert Ramseyer, Principal Deputy County Counsel, for Defendants, Respondents and Appellants.
OPINION
CROSKEY, J.
INTRODUCTION
Plaintiff Soka University of America (Soka), and defendants the County of Los Angeles (the County) and the California State Board of Equalization (the Board) appeal from a judgment entered after the trial court granted Soka’s summary judgment motion and denied the County’s motion for summary adjudication of issues. The trial court found that Soka’s property qualified for the welfare exemption of Revenue and Taxation Code section 214, subdivision (a)[ in fiscal years 1998-1999 and 1999-2000, and the judgment ordered that Soka was entitled to a refund of property taxes paid in 1998-1999 and in 1999-2000.
Unless otherwise specified, statutes in this opinion will refer to the Revenue and Taxation Code.
In Soka’s appeal, we conclude that Soka’s refund applications complied with requirements in sections 5142, 5096, and 5097.02, and that denial of Soka’s refund claims for fiscal years 1995-1996, 1996-1997, and 1997-1998 for failure to comply with these statutory requirements was error.
In the County’s appeal, we agree with the trial court’s finding that whatever portion of Soka’s property that is found to have been used exclusively for educational purposes was eligible for the welfare exemption. We conclude, however, that Soka did not meet its burden of producing evidence that it used all parcels of its property exclusively for educational purposes, or that its use of each parcel did not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose. Moreover, we must also reverse the judgment to the extent it included a refund of taxes paid on parcels as to which Soka waived its welfare exemption claim. We further conclude that amounts Soka paid as special assessments should be excluded from any refund owed to Soka, because amounts paid as special assessments are not subject to the welfare exemption. We reverse and remand to the trial court for further proceedings.
FACTUAL AND PROCEDURAL HISTORY
Soka’s Complaints Seeking Refund of Property Taxes: Soka filed three complaints, which were later consolidated, for refund of property taxes paid on property at 26800 West Mulholland Highway in Calabasas, California.
On August 4, 2004, Soka filed a complaint against defendant County of Los Angeles (“the County”) for refund of property taxes paid for the 1998-1999 fiscal year, and filed a first amended complaint on December 3, 2004, which added the State Board of Equalization (“the Board”) as a defendant. The complaint alleged that the property Soka owned, identified by ten parcel numbers, qualified for the welfare exemption under section 214, subdivision (a) because it met all statutory requirements for that exemption; that Soka previously paid the County $370,179.48 in property taxes for fiscal year 1998-1999; that Soka filed a claim for refund with the County for this amount; that on February 4, 2004, the County denied Soka’s refund claim on the ground that Soka did not qualify for the welfare exemption under section 214, and that Soka’s claim did not meet provisions in the Revenue and Taxation Code for granting a refund for five parcels. The County did issue refunds on the claim in the amount of $231,186.21.
On October 12, 2004, Soka filed a complaint against the County and the Board for refund of property taxes paid for fiscal years 1995-1996, 1996-1997, and 1997-1998, because it qualified for the welfare exemption in section 214, subdivision (a). The complaint alleged that Soka paid $612,067.66 in property taxes to the County for fiscal year 1995-1996; that Soka paid $625,508.14 in property taxes to the County for fiscal year 1996-1997; and that Soka paid $637,566.18 in property taxes to the County for fiscal year 1997-1998. The complaint alleged that on November 18, 1999, Soka filed claims for refund with the County for taxes paid on the property for fiscal years 1995-1996, 1996-1997, and 1997-1998, which the County denied on the ground that Soka’s exemption claim exceeded the time limits of the refund statute of limitations. The complaint alleged that Soka made property tax payments to the County on December 10, 1995, April 10, 1996, December 10, 1996, April 10, 1997, December 10, 1997, and April 10, 1998; that under the code Soka had four years from December 10, 1995 (the date of the oldest payment for the claim years) to file refund claims with the County, and timely filed its refund claims on November 18, 1999.
On April 5, 2005, Soka filed a complaint against the County and the Board for refund of property taxes paid for the 1999-2000 fiscal year. The complaint alleged that the property Soka owned, identified by 29 parcel numbers, qualified for the welfare exemption in section 214, subdivision (a); that Soka previously paid the County $681,144.42 in property taxes for fiscal year 1999-2000; that Soka filed a refund claim with the County for this amount; that on October 5, 2004, the County denied Soka’s refund claim on the ground that Soka did not qualify for the welfare exemption under section 214 or for the college exemption under section 203, and that Soka’s claim did not satisfy Revenue and Taxation Code provisions to grant a refund for these parcels. The complaint alleged that the County issued partial refunds for certain parcels, but had since issued escape assessments to reverse those refunds. On August 2, 2005, the trial court ordered all three cases consolidated.
Motions for Summary Judgment and Summary Adjudication: On September 9, 2005, the County filed a motion for summary adjudication. The County’s motion argued that Soka had not exhausted its administrative remedies regarding assessment years 1995-1996 through 1999-2000, and was not entitled to a property tax exemption under the welfare exemption for these assessment years. Soka filed opposition and a separate statement in opposition. Soka’s opposition argued that it qualified for the welfare exemption because its English as a Second Language (ESL) courses qualified as charitable educational activities, Soka’s activities were not conducted for the benefit of Soka University Japan, and all Soka’s activities should be considered when evaluating whether it qualified for the welfare exemption. Soka also argued that portions of its property qualified for the welfare exemption as preserved open space land. Soka claimed it had exhausted its administrative remedies.
On September 12, 2005, Soka filed a motion for summary judgment. Soka’s summary judgment motion argued that Soka University met the requirements of section 214 in that it was organized and operated exclusively for charitable purposes (which included educational, preservation, and recreational activities), Soka was not organized or operated for profit, its net earnings did not inure to private shareholders or individuals, Soka used its property in the actual operation of the exempt activity and the property did not exceed an amount of property reasonably necessary to accomplish the exempt purpose, Soka did not use the property for the benefit of another or for fraternal, lodge, or social club purposes, and Soka had irrevocably dedicated the property toward charitable purposes. Soka also briefly argued that much of its property qualified for the preservation/recreational purpose exemption of section 214.02. The County filed opposition and a separate statement in opposition. The County’s opposition argued that section 214 was not available to revive Soka’s claim, Soka’s Calabasas property was not exclusively used for charitable purposes, Soka did not qualify for a preservation/recreational purpose exemption, and that Soka did not exhaust administrative remedies with regard to its exemptions for the 1995-1996, 1996-1997, and 1997-1998 assessment years.
Undisputed Facts: Soka University (Japan), a non-denominational liberal arts college and graduate school in Hachioji, Japan, was founded in 1971. Soka University (Japan) is open to persons of all beliefs, and any member of the public may apply for admission. Soka University (Japan) offers degrees in economics, business, law, education, languages, and engineering, and is fully accredited by Japan’s Ministry of Education.
Soka University was incorporated in 1984, and is a nonprofit corporation organized under California’s Nonprofit Public Benefit Corporation Law for public and charitable purposes. Soka University has been recognized as a tax exempt organization for federal and state income tax purposes since its inception. Soka Japan, a Japanese nonprofit organization, was Soka University’s “sole member” during the period at issue.
Soka University’s articles of incorporation state that Soka University is organized for “ ‘public and charitable purposes’ ” and is “ ‘organized under the Nonprofit Public Benefit Corporation Law.’ ” Soka University’s articles of incorporation also state:
“ ‘No part of the net earnings of the Corporation shall inure to the benefit of any private shareholder or individual.’
“ ‘The property of the Corporation shall not be used or operated so as to benefit any officer, trustee, director, shareholder, member, employee, contributor or bondholder, or the owner or operator, or any other person, through the distribution of profits, payment of excessive charges or excessive compensation.’
“ ‘The property of this Corporation is irrevocably dedicated to charitable and educational purposes meeting the requirements for exemption provided by Section 214 . . . and no part of the net income or assets of this organization shall inure to the benefit of any private person.’
“ ‘Upon the dissolution or winding up of this Corporation, its assets remaining after payment, or provision for payment, of all debts and liabilities of this Corporation, shall be distributed to a nonprofit fund, foundation, or corporation which is organized and operated for religious, hospital, scientific, or charitable and educational purposes meeting the requirements for exemption provided by Section 214 of the Revenue and Taxation Code and which has established its tax exempt status under Section 501(c)(3) of the Internal Revenue Code.’
“ ‘If this Corporation holds any assets in trust, or the Corporation is formed for charitable purposes, such asset shall be disposed of in such manner as may be directed by decree of the superior court of the county in which the Corporation has its principal office upon petition therefor by the Attorney General, or by any person concerned in the liquidation, in a proceeding to which the Attorney General is a party.’ ”
Soka University’s bylaws stated:
“ ‘The objectives of this corporation shall be to operate a nonprofit educational institution which will be the highest seat of learning for humanistic education, the cradle of a new culture, and the fortress for the peace of mankind.’
“ ‘No part of the net earnings, properties, or assets . . . of this corporation, on dissolution or otherwise, shall inure to the benefit of any private person or individual, or any member or director of this corporation.’ ”
Soka University is a nondenominational university open to persons of all beliefs, and is founded on Buddhist principles of peace, human rights, and the sanctity of life.
Soka University did not distribute profits to Soka University (Japan) or pay Soka University (Japan) excessive charges or compensation. Soka’s Calabasas property comprises 635.79 acres and is described by 27 assessor’s parcels. Buildings, roads, parking areas, and driveways occupy approximately 12 acres of the property, and gross building area includes 119,400 square feet. Soka alleged that 48.6 acres constituted ornamental landscaping and trees, and the remainder constituted a botanical reserve and open-space lands. The County disputed the last allegation, stating that there was no foundation for characterizing a portion of the property as a botanical reserve.
Soka provided an ESL program for Japanese students, the majority of whom were enrolled at Soka University (Japan), who came to Calabasas to participate in an English language immersion program that was either short-term (one to three weeks) or longer-term (ten to twelve weeks). The students then returned to Japan. For assessment years 1995-96 through 1999-2000, Soka’s ESL program was not licensed by the State of California Bureau for Private Postsecondary and Vocational Education. During these assessment years, Soka conducted approximately ten ESL courses in each school year (from August 1 through June 30). In each school year, approximately two ESL courses were long-term with approximately 40 students per course; the remainder were short-term courses with 80 students per course. Soka University had approximately 56 full-time students a month enrolled in ESL classes. Soka Japan reimbursed Soka University for the cost of each Soka Japan student who attended Soka University’s ESL classes.
Soka operated a Graduate School, whose classes were held in one or two classrooms on the Calabasas property. The Master of Arts in Second and Foreign Language Education (“the Master’s Program”) educated graduate-level students to become teachers of English as a second or foreign language and stressed knowledge of linguistics, teaching and learning processes, and cross-cultural awareness. Soka University strived to provide an academic environment that nurtured students from a variety of cultures, and emphasized small class size to cultivate close relationships between students and teachers. The California Council for Private Postsecondary and Vocational Education accredited the Master’s Program. The Master’s Program was similar to programs offered at California State University, Los Angeles, UCLA, and San Jose State University. Many other California state universities offer ESL classes to foreign students.[ The parties differed in the number of students attending Soka’s Graduate School; the County alleged that approximately ten students a year pursued a Master’s Degree in teaching ESL, while Soka alleged that 15 students were enrolled in its Master’s Program in the 1996-1997 and 1997-1998 school years and 17 students were enrolled in its Master’s Program in the 1995-1996, 1998-1999, and 1999-2000 school years.
California state universities offering ESL classes to foreign students include: California State University, Fullerton; UC Riverside; California State University, Sonoma; California State University, Long Beach; California State University, Los Angeles; California State University, San Marcos; San Diego State University; California State University, Northridge; City College of San Francisco; California State University, Dominguez Hills; UC Santa Cruz Extension; UC Davis Extension; and California State Polytechnic University, Pomona.
During the period at issue, Soka University offered other programs to the general public. Soka offered foreign language courses; approximately 246 students (averaging 21 students per semester) enrolled in classes teaching Japanese, Spanish, Russian, French, and Chinese. Soka provided a Human Rights Lecture Series; approximately 6,365 persons (averaging 636 persons per semester) attended these lectures, which featured prominent speakers such as Dr. Benjamin Spock, Coretta Scott King, and Shirley Chisholm and covered issues such as race, poverty, ethics, morality, peace, human rights, and civil rights. Soka provided Pan Pacific business seminars; approximately 598 persons (averaging 60 persons per semester) participated in seminars for businesspeople which provided information about business cultures and protocols and practical approaches and state-of-the-art techniques for doing business in the subject country. The seminars also provided timely, market-specific information regarding the region.
Soka operated the Botanical Research Center, a resource for restoring and propagating Santa Monica Mountain native plants. The Botanical Center promoted the practical application of native plants in home and commercial landscapes. Its objectives included educating the public about the value, propagation, and use of California native plants, scientific research on native plants, and restoring portions of Soka University’s campus to its native habitat after the introduction of non-native species over the past 70 years. The Botanical Center facilities included an automated greenhouse, growing grounds, and a teaching lab containing a regional seed bank of more than 250 plant species stored for future propagation, study, and use in repairing disturbed habitats. The Botanical Center’s Native Plant Demonstration Garden provided the public with information on uses and growth of native plants. The Botanical Center had restored many parts of Soka University’s campus to its native habitat.
Soka offered nature classes and activities open to the general public. Course offerings included: “Planning a Year-Round Native Garden;” “People, Places & Flowers of the Santa Monica Mountains;” “Attracting Birds to Your Garden With Native Plants: Guidelines for Contributing to Biodiversity Protection;” “The Living Earth Environmental Studies School;” “Understanding Rose Pruning;” “The Art, Artifacts, and Lifestyles of the Chumash Indians of Southern California;” and “Wild California Cuisine.”
Soka also provided campus tours and walks for students, children, and the general public, including nature and fitness walks, wildflower ecology treks; Botanical Center tours; historical tours; junior environmental walks, activities, and nature exploration hikes; owl watches; and bird walks. From 1995 through 2000, approximately 6,950 persons (averaging 695 persons per semester) participated in Soka’s nature classes and activities and campus walks and tours.
During assessment years 1995-1996 through 1999-2000, Soka did not file a claim for the college exemption with the County Assessor, and the Board did not approve Soka for the welfare exemption.
In 1990, Soka applied to the County to expand its language school into a four-year university for 5,000 students, which would have affected the Soka Campus but did not involve adjacent parcels. Local groups objected to Soka’s expansion plans, and the Mountains Recreation and Conservation Authority (MRCA) initiated an eminent domain lawsuit to acquire 245 acres of the Soka Campus, including substantially all of Soka’s educational and related improvements. In 1996, Soka entered into a settlement agreement with MRCA, the Santa Monica Mountains Conservancy, and the County of Los Angeles, by which Soka agreed to limit its development to a 650-student school. A revised plan stipulated to 25.2 acres of paved surfaces and buildings; 37.2 acres of conservation easements; 25.8 acres of ornamental landscaping; 119.1 acres of private open areas; and 382 acres of public parklands to be dedicated to the MRCA. The Soka property was available to the public seven days a week, and was not used for any fraternal, lodge, or social club purposes.
Soka alleged that it timely paid property taxes on the property during the period at issue. On November 18, 1999, Soka filed a welfare exemption application on the prescribed form for fiscal years 1995-1996, 1996-1997, 1997-1998, 1998-1999, and 1999-2000. Soka later amended its welfare exemption applications for 1998-1999 and 1999-2000. Soka’s original welfare exemption applications for 1995-1996 through 1999-2000 sought an exemption for five parcels. The cover letter accompanying these claims stated: “ ‘To the extent that the enclosed Claims pertain to years for which the Claimant has already paid property taxes, this letter and the enclosed Claims constitute claims for refund of those property taxes, less any penalties for late filing of the enclosed Claims.’ ”
On April 8, 2003, Soka filed a separate “Claim for Refund of Property Taxes” on the prescribed form for 1998-1999, seeking a refund for 10 parcels. On April 9, 2004, Soka filed a “Claim for Refund of Property Taxes” on the prescribed form for 1999-2000, seeking a refund for 27 parcels. On December 2, 2003, the County denied Soka’s refund claims for 1995-1996, 1996-1997, and 1997-1998. On February 4, 2004, the County denied Soka’s refund claim for 1998-1999 for five parcels. The County partially granted, and partially denied, Soka’s refund claim for 1998-1999 for the remaining five parcels.
On May 7, 2004, the County partially granted the refund claim for 1999-2000 on four parcels, but on October 5, 2004, the County denied Soka’s refund claim for 1999-2000 on 27 parcels. The County later reversed its partial refund of 1998-1999 and 1999-2000 taxes, and Soka paid back refunded taxes to the County on April 11, 2005.
Soka’s three complaints for refunds of property taxes sought a tax refund of $275,883.99 for 1995-1996; $290,592.30 for 1997-1998; $370,179.48 for 1998-1999; and $574,817.62 for 1999-2000, for a total refund of $1,793,547.56, plus interest.
Disputed Facts: The County alleged that for assessment years 1995-1996, 1996-1997, and 1997-1998, Soka did not file refund claims with the appropriate officials of the County of Los Angeles. This allegation was based on a declaration of Kelvin Aikens, manager of the County’s Apportionment and Refund Section of the Property Taxes Division of the Office of the Auditor-Controller. Aikens stated that he checked refund claims to see if claims had been received pertaining to parcels owned by Soka for assessment years 1995-1996 through 1997-1998, but no such property tax refund claims had been filed. Soka disputed the County’s allegation, alleging that Soka timely filed its refund claims for fiscal years 1995-1996 through 1997-1998 with the County Assessor. This allegation was based on the declaration of Arnold Kawasaki, Associate Vice President and Vice President of Administration, Secretary to the Soka University Board of Trustees from 1996 to 2000.
The County also alleged that for assessment years 1998-1999 and 1999-2000, Soka did not exhaust is administrative remedies with the Assessment Appeals Board. This allegation was based on the declaration of Kathy Bones, Head Board Specialist employed by the County’s Assessment Appeals Board, who stated that no assessment appeal applications were filed for parcels owned by Soka in the 1995-1996 through the 1999-2000 assessment years. Soka disputed this fact, stating that Soka was not required to file documents with the Assessment Appeals Board and thus there were no administrative remedies with the Assessment Appeals Board for Soka to exhaust.
The Trial Court’s Order Granting Soka’s Summary Judgment Motion and Denying the County’s Motion for Summary Adjudication of Issues: On October 11, 2005, the trial court by minute order granted Soka’s summary judgment motion and denied the County’s motion for summary adjudication of issues.
The trial court concluded that Soka was entitled to the welfare exemption based on its educational programs on the subject property. The trial court rejected the County’s argument that Soka did not devote its property exclusively to educational pursuits, finding that Soka’s plans to expand the campus demonstrated Soka’s dedication to educational goals, which bolstered Soka’s claim that it was a charitable organization dedicated to education. The trial court noted that it was undisputed that Soka was a not-for-profit organization whose campus property was irrevocably dedicated to charitable purposes, that none of Soka’s earnings benefitted Soka University (Japan), and that Soka (Japan) reimbursed Soka for academic fees incurred by Soka (Japan) students at Soka. Regarding the benefit to the community, the trial court found that charitable purposes included educational aims and accomplishments and that “charitable purpose” was to be defined and applied broadly. The trial court therefore rejected the County’s argument that the “community as a whole” should be limited to the local Southern California area because only Japanese ESL students benefited from education at Soka. The trial court found that numerous non-foreign students and visitors came to Soka to study foreign languages, hear lectures by prominent speakers on humanitarian topics of global interest, and obtain sensory enlightenment from Soka’s gardens. The trial court found that although 98 percent of foreign students were Soka (Japan) students, that did not vitiate the exclusivity of Soka’s educational programs or alter Soka’s declared and overriding charitable educational purpose.
The trial court found that Soka was not entitled to a section 214.02 “open space” exemption. With regard to the exhaustion of remedies issue, the trial court found the evidence of Soka’s claims of exemption and refund to be undisputed, and that the dispute concerned the legal effect of these filings on the exhaustion of remedies issue. The trial court found that exemption claims were not refund claims, and thus rejected Soka’s argument that because its exemption application contained a demand for a refund, the application should be deemed a refund claim for 1995-1996 through 1999-2000. A single sentence claiming a refund to the extent taxes were paid was not sufficiently detailed to constitute proper notice of the refund claim under section 5097.02. The trial court did find, however, that Soka filed a compliant refund claim for tax years 1998-1999 and 1999-2000, and therefore was entitled to refunds for those years under section 5097.
The trial court ordered Soka to submit a proposed judgment. Soka submitted two proposed judgments: the first provided for a refund of property taxes paid for all tax years 1995-1996 through 1999-2000; the second provided for a refund of property taxes paid for tax years 1998-1999 and 1999-2000 only. The County objected to the form of the proposed judgments and requested a hearing. The trial court filed a revised proposed judgment on April 24, 2006, ordering that Soka was entitled to a refund of property taxes paid of $275,883.99 for fiscal year 1995-1996; $282,074.17 for 1996-1997; $290,592.30 for 1997-1998; $370,179.48 for 1998-1999; and $574,817.62 for 1999-2000.
New Trial Motions: Soka, the County, and the Board filed motions for a new trial. On June 23, 2006, the trial court denied Soka’s new trial motion, found that the County and the Board had joined in a single motion, deemed the motion of the County and the Board to be a motion to vacate judgment under Code of Civil Procedure sections 663 and 663a, and granted the defendants’ motion to vacate the judgment and enter a different judgment. The trial court’s order stated that after finding that there was no valid tax refund claim for tax years 1995-1996, 1996-1997, and 1997-1998, the trial court then ordered refund of taxes paid for these three tax years. The trial court thus found it had committed legal error in awarding as Soka’s damages all taxes paid for fiscal years 1995-1996 1996-1997, and 1997-1998, and that the judgment should have awarded damages limited to taxes paid for the years 1998-1999 and 1999-2000 and should not have included taxes paid for other years. The trial court therefore set aside the judgment entered on April 24, 2006, and ordered defendants to prepare a judgment ordering that Soka was entitled to a refund of $370,179.48 for property taxes paid in 1998-1999, and of $574,817.62 for property taxes paid in 1999-2000.
A second revised judgment containing these terms was filed on July 24, 2006. Soka, the County, and the Board filed timely notices of appeal.
STANDARD OF REVIEW
“Any party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c, subd. (a).) Separate statements setting forth plainly and concisely all material facts which the parties contend are undisputed must be included. (Ibid.) The trial court shall grant the summary judgment motion if all papers submitted show no triable issue as to any material fact exists and entitle the moving party to judgment as a matter of law. In determining whether the papers show that no triable issue exists as to any material facts, the court shall consider all evidence in the papers and inferences reasonably deducible from the evidence, except evidence as to which the court has sustained objections. The court shall also consider all inferences reasonably deducible from the evidence, but shall not grant summary judgment on inferences reasonably deducible from the evidence, if contradicted by other inferences or evidence raising a triable issue as to any material fact. (Id. at subd. (c).)
“We review an order granting or denying a motion for summary judgment de novo, examining the evidence before the trial court. We independently determine the effects of that evidence as a matter of law. [Citation.]” (Jenkins v. County of Riverside (2006) 138 Cal.App.4th 593, 601.)
ISSUES
In Soka’s appeal, the issue is whether the judgment erroneously granted a refund of only two years of property tax payments rather than granting a refund of five years of property tax payments based on Soka’s failure to file refund claims for the first three of those five years.
In the County’s appeal, the issues are:
1. Whether the property Soka owned qualified for the welfare exemption of section 214;
2. If the property Soka owned did qualify for the welfare exemption, what portion of the property was eligible for that exemption; and
3. Whether the judgment erroneously required refunds of payments for parcels for which exemption filings were not made and of payments of special assessments.
DISCUSSION
1. The Welfare Exemption
All property is taxable. (Cal. Const., Art. 13, § 1, subd. (a).) California Constitution, Article XIII, section 4, however, states: “The Legislature may exempt from property taxation in whole or in part:
“[]
“(b) Property used exclusively for religious, hospital, or charitable purposes and owned or held in trust by corporations or other entities (1) that are organized and operating for those purposes, (2) that are nonprofit, and (3) no part of whose net earnings inures to the benefit of any private shareholder or individual.”
Because this constitutional provision is not self-executing, section 214, subdivision (a), exempts from taxation “[p]roperty used exclusively for religious, hospital, scientific, or charitable purposes owned and operated by community chests, funds, foundations or corporations organized and operated for religious, hospital, scientific, or charitable purposes[.]” This exemption is known as the “welfare exemption.” (Id. at subd. (a)(7).)
“Charitable purposes” in Article XIII, section 4, subdivision (b) and section 214 includes educational purposes. (Stockton Civic Theatre v. Board of Supervisors (1967) 66 Cal.2d 13, 18, 20.) Section 214, subdivision (j) states: “For purposes of this section, charitable purposes include educational purposes. For purposes of this subdivision, ‘educational purposes’ means those educational purposes and activities for the benefit of the community as a whole or an unascertainable and indefinite portion thereof, and shall not include those educational purposes and activities that are primarily for the benefit of an organization’s shareholders. Educational activities include the study of relevant information, the dissemination of that information to interested members of the general public, and the participation of interested members of the general public.”
Section 214, subdivision (a) includes several other requirements that a property owner claiming the welfare exemption must satisfy. As relevant to Soka’s application for the welfare exemption, these requirements include:
“(1) The owner is not organized or operated for profit. . . .
“(2) No part of the net earnings of the owner inures to the benefit of any private shareholder or individual.
“(3) The property is used for the actual operation of the exempt activity, and does not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.
“[]
“(4) The property is not used or operated by the owner or by any other person so as to benefit any officer, trustee, director, shareholder, member, employee, contributor, or bondholder of the owner or operator, or any other person, through the distribution of profits, payment of excessive charges or compensations, or the more advantageous pursuit of their business or profession.
“(5) The property is not used by the owner or members thereof for fraternal or lodge purposes, or for social club purposes except where that use is clearly incidental to a primary religious, hospital, scientific, or charitable purpose.
“(6) The property is irrevocably dedicated to religious, charitable, scientific, or hospital purposes and upon the liquidation, dissolution or abandonment of the owner will not inure to the benefit of any private person except a fund, foundation, or corporation organized and operated for religious, hospital, scientific, or charitable purposes.”
With regard to the construction of the welfare exemption for charitable purposes, generally “all tax exemption statutes are to be strictly construed [citation], but the rule cannot be applied to this peculiar statutory context. Our high court has held that . . . ‘the language of the first part of section 214 . . . must be given the same meaning as [the parallel provision in article XIII, section 4, subdivision (b) of the Constitution.]’ [Citation.] A line of decisions has held that, as it appears in the Constitution, the term ‘charitable purposes’ is to be construed broadly. [Citations.] Since the same term cannot be construed strictly and broadly at the same time, we conclude merely that the term in section 214 must be reasonably construed in a manner consistent with the constitutional provision.” (Clubs of Cal. for Fair Competition v. Kroger (1992) 7 Cal.App.4th 709, 715.) Institutions owning property bear the burden of showing that they clearly come within the terms of the exemption they claim. (Honeywell Information Systems, Inc. v. County of Sonoma (1974) 44 Cal.App.3d 23, 27-28.)
2. Soka’s Refund Applications Complied With Requirements in Sections 5142, 5096, and 5097.02, and Denial of Soka’s Refund Claims for the 1995-1996, 1996-1997, and 1997-1998 Fiscal Years Was Error
The first issue is whether the trial court correctly denied refunds of property taxes paid for the 1995-1996, 1996-1997, and 1997-1998 fiscal years because Soka’s refund claims did not constitute proper notice to the County under section 5097.02 and related statutes governing requirements for a refund claim.
a. Soka’s Refund Applications and the County’s Denials of Those Applications
The undisputed facts show that on November 18, 1999, Soka filed welfare exemption applications for the 1995/1996, 1996/1997, and 1997/1998, 1998/1999, and 1999-2000 fiscal years. The original applications for these five fiscal years sought welfare exemptions for five parcels. The cover letter accompanying these claims stated: “ ‘To the extent that the enclosed Claims pertain to years for which the Claimant has already paid property taxes, this letter and the enclosed Claims constitute claims for refund of those property taxes, less any penalties for late filing of the enclosed claims.’ ”
On December 2, 2003, the County denied Soka’s refund claims filed on November 18, 1999, for 1995/1996, 1996/1997, and 1997/1998. The written “Denial of Claim for Welfare Exemption,” bearing the name of Rick Auerbach, Assessor, and the letterhead of County of Los Angeles, Office of the Assessor, stated that Soka’s claim for exemption exceeded time limits of the refund statute of limitations, and that Revenue and Taxation Code section 5097.02 limited refunds to four years from the last date of payment for the claim year filed.
b. Statutory Requirements for Refund Claims
Section 5142, subdivision (a) states: “No action shall be commenced or maintained under this article, except under Section 5148, unless a claim for refund has first been filed pursuant to Article 1 (commencing with Section 5096).
“No recovery shall be allowed in any refund action upon any ground not specified in the refund claim.”
Section 5096 sets forth the grounds for a refund of property taxes paid. Section 5097, subdivision (a) states: “No order for a refund under this article shall be made, except on a claim:
“(1) Verified by the person who paid the tax, his or her guardian, executor, or administrator.
“(2) Filed within four years after making of the payment sought to be refunded or within one year after the mailing of notice as prescribed in Section 2635, or the period agreed to as provided in Section 532.1, whichever is later.”
Section 5097.02 states: “The claim shall be in writing, specifying:
“(a) Whether the whole assessment is claimed to be void or, if only a part, what portion.
“(b) The grounds on which the claim is founded.”
Article XIII, section 32, of the California Constitution provides that actions for tax refunds must be brought in the manner prescribed by the Legislature. (Woosley v. State of California (1992) 3 Cal.4th 758, 789.) “To implement Article XIII, section 32, the Legislature enacted a specific statutory refund procedure for taxpayers whose property has been improperly assessed. [Citations.] Because article XIII, section 32 vests the Legislature with plenary control over the manner in which tax refunds may be obtained, a party ‘must show strict, rather than substantial, compliance with the administrative procedures established by the Legislature.’ ” (IBM Personal Pension Plan v. City and County of San Francisco (2005) 131 Cal.App.4th 1291, 1299.)
c. Soka’s Refund Claims for the 1995-1996, 1996-1997, and 1997-1998 Fiscal Years Complied With Statutory Requirements
The County concedes that no specific form is required for a refund claim. The County, however, argues that Soka’s refund claims for the three fiscal years in question failed to comply with statutory requirements because they did not set out the grounds upon which the refund claim was made, they were not verified, and they were not directed to the Board of Supervisors. We disagree.
Soka’s November 18, 1999, letter to the Assessor does set out the ground upon which the refund claim is made, specifically identifying and enclosing copies of claims for the “Welfare Exemption (First Filing)” for the five fiscal years for which the refund was claimed. Those claims were signed by Arnold M. Kawasaki, Vice President for Administration of Soka University of America, who certified under penalty of perjury that the information on the claim and accompanying statements or documents was true, correct, and complete to the best of his knowledge and belief. The claims also identified section 214 as the “Welfare Exemption,” and Kawasaki specifically stated “that I make this claim for welfare exemption on behalf of said organization” for each of the fiscal years in question. Attachments to each welfare exemption claim identified the primary use of parcels for which the welfare exemption was claimed as “educational.” Thus the claims identified the ground of the refund claim, as required by section 5142, subdivision (a), and the claims were verified by the person who paid the tax, as required by section 5097, subdivision (a)(1).
Although the County argues on appeal that the claim must be directed to the Board of Supervisors, the County provides no authority for this requirement.[ Moreover, the County’s own “denial of claim for welfare exemption,” which stated that the welfare exemption was denied because it exceeded the time limits in “the Refund Statute of Limitations, section 5097.2,” bears the name and address of the County Assessor.[
The Code Commission Notes to section 5097 also state: “There is no express provision here as to whom claim should be made, though claims made to the board of supervisors have been upheld. Otis v. City and County of San Francisco (1915) 148 P. 933, 170 C. 98, and cases there cited.” (59B West’s Ann. Rev. and Tax. Code (1998), § 5097, p. 312.)
It is also significant that the County’s October 5, 2004, denials of Soka’s claims for refunds of taxes filed on June 2, 2004, each state that the claim “was reviewed by the ASSESSOR[,]” who determined that the claim did not meet Revenue and Taxation Code provisions for granting a refund.
Soka’s evidence shows that its refund claims were not defective for failure to comply with requirements of section 5142, 5096, and 5097.02. It was also clear that the County received notice of Soka’s welfare exemption applications and of its refund claims based on those applications. Therefore to the extent the judgment reflects a finding that Soka’s refund claims were denied for the 1995-1996, 1996-1997, and 1997-1998 fiscal years because of their failure to comply with these statutory requirements, that finding was error.
3. Soka Did Not Meet Its Burden of Producing Evidence That Its Property Was Used Exclusively For Educational Purposes and That Its Property Did Not Exceed An Amount Of Property Reasonably Necessary To The Accomplishment Of The Exempt Purpose
The main issue in this appeal is whether Soka’s property qualified for the welfare exemption. We conclude that Soka’s activities at its property come within the definition of educational purposes, but that Soka’s summary judgment motion did not meet its burden of producing evidence that its property was used exclusively for educational purposes and that its property did not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.
a. Soka’s Activities Come Within the Definition of Educational Purposes
For purposes of the welfare exemption, “charitable purposes” include educational purposes. (Section 214, subd. (j); Stockton Civic Theatre v. Board of Supervisors, supra 66 Cal.2d at p. 20.) Section 214, subdivision (j) further states that for purposes of the welfare exemption, “ ‘educational purposes’ means those educational purposes and activities for the benefit of the community as a whole or an unascertainable and indefinite portion thereof, and shall not include those educational purposes and activities that are primarily for the benefit of an organization’s shareholders. Educational activities include the study of relevant information, the dissemination of that information to interested members of the general public, and the participation of interested members of the general public.”
Soka identified the main use of its property as educational. First, Soka provided an ESL program for Japanese students, the majority of whom were students enrolled at Soka University (Japan) who came to Soka’s Calabasas property for English language immersion programs. These students then returned to Japan. In the five assessment years, Soka conducted approximately two long-term ESL courses with 40 students per course and eight short-term courses with 80 students per course. Second, Soka operated a graduate school leading to a Master of Arts in Second and foreign Language Education, accredited by the California Council for Private Postsecondary and vocational Education. The parties differed on the number of students enrolled in the graduate school, with the County alleging that ten students a year pursued the Master’s Degree, while Soka alleged that 15 to 17 students pursued the Master’s degree. Third, Soka offered foreign language classes in Japanese, Spanish, French, Russian, and Chinese to the general public, with these courses averaging 21 students per semester. Fourth, Soka provided a Human Rights Lecture Series, fearing prominent speakers lecturing on issues such as race, poverty, ethic, morality, peace, human rights, and civil rights, and approximately 636 persons per semester attending these lectures. Fifth, Soka provided Pan Pacific business seminars, with approximately 60 businesspeople per semester attending seminars about business cultures and protocols, and which provided regional market-specific information. Sixth, Soka operated a Botanical Research Center, which promoted the use of native plants in home and commercial landscape, conducted research on native plants, educated the public about the use of California native plants, and offered nature classes and activities (nature and fitness walks, wildflower ecology treks, Botanical Center tours, historical tours, junior environmental walks, and bird watches) open to the general public.
Summarizing cases which had determined whether a charitable purpose qualifies property for the welfare exemption, Peninsula Covenant Church v. County of San Mateo (1979) 94 Cal.App.3d 382 stated: “From these decisions, two dependent variables emerge as particularly important to the determination of the court: the nature of the use of property, and the degree to which the activity is open to the community as a whole. If the use is one which is deemed particularly necessary to the welfare of the community or is a service which the government otherwise would be compelled to provide for the community, such as a hospital or elementary school, it may be considered a charitable purpose even though only a small number of people are directly benefited. [Citations.] If, on the other hand, the activity serves educational or humanitarian goals and is open to all or virtually all of the community, it may be exempt even though it is not a necessary activity in the same sense as a hospital, and even though there are significant collateral benefits, such as amusement and entertainment.” (Id. at p. 399.)
The long-term and short-term ESL classes appear to have enrolled only Japanese students, who returned to Japan after completing their course. Providing this education is a benefit to the community of the most general kind, and constitutes an activity which is “humanitarian in nature and rendered for the general improvement and betterment of mankind.” (Stockton Civic Theatre v. Board of Supervisors, supra, 66 Cal.2d at p. 19.) Soka’s other educational activities—its graduate school, foreign language classes, Human Rights lectures, Pan Pacific business seminars, and botanical education—were all open to the general public. Thus it served educational and humanitarian goals, was open to all or virtually all of the community, and should be eligible for the welfare exemption under the Peninsula Covenant Church test. The “educational activities” at the Soka property included “the study of relevant information, the dissemination of that information to interested members of the general public, and the participation of interested members of the general public.” (§ 214, subd. (j).) We therefore conclude that the trial court properly found that the portion of Soka’s property which was exclusively used for educational purposes was eligible for the welfare exemption.
b. Soka’s Evidence Did Not Meet Its Burden of Production on the Issues of Exclusive Use of the Property and Whether the Amount of Property Was Reasonably Necessary to Accomplish the Exempt Purpose
The finding that the educational activities conducted at Soka’s property were eligible for the welfare exemption is only one part of what is required to satisfy that exemption. The definition of “educational activities” in section 214, subdivision (j) must be read together with the other limitations in section 214 on property eligible for the welfare exemption. Specifically, the property must be “used exclusively” for the educational purposes, must be “used for the actual operation of the exempt activity,” and must “not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.” (§ 214, subds. (a) and (a)(3).) We conclude that triable issues of fact exist concerning whether the parcels of property at issue can satisfy these requirements to qualify for the welfare exemption.
Soka’s evidence in its separate statement consisted of identifying twenty-seven parcels of property by the assessor’s parcel numbers, and giving a general description of activities taking place on each such parcel of property. The evidence supporting the identification of activities taking place on each parcel of property consisted of the declaration of Soka Vice-President Kawasaki; a summary of Soka’s acreage and activities by parcel; and three items of evidence which do not appear to be in the record on appeal. This evidence presents no facts concerning whether each of the twenty-seven parcels of property were “used exclusively” for educational purposes as required by section 214, subdivision (a), whether each of the twenty-seven parcels of property were “used for the actual operation of the exempt activity,” and whether each parcel of property did “not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.” Merely describing the activities conducted on a parcel of property -- to give two examples, “nature classes and activities; open space and community access” or “Master’s Program; ESL Program; botanical reserve; nature classes and activities; campus walks; open space and community access” -- provides no evidence of whether the parcel was used exclusively for educational purposes, and does not address the key issue of whether each parcel of property did “not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.” Therefore there are unresolved questions of fact as to whether each parcel qualifies for the welfare exemption. Evidence of actual use, and of what amount of property in each parcel was reasonably necessary to accomplish the exempt purpose, will be necessary to establish the entitlement to the welfare exemption for each parcel. Soka’s summary judgment motion did not produce such evidence, and thus failed to meet its burden of production. The grant of summary judgment therefore should be reversed.
4. Soka Waived Its Welfare Exemption Claim on Parcels Not Included in Its 1999 Welfare Exemption Claim
The County argues that Soka is not entitled to a tax exemption for parcels for which it did not make an exemption claim. The County refers to Soka’s amended welfare exemption for the 1999-2000 assessment year, dated July 5, 2005, which Soka filed with the Assessor,[ and compares this amended welfare exemption filing with the refund claim which the County describes as having been filed later for that same assessment year.
Soka’s July 5, 2005, amended welfare exemption claim for the 1999-2000 assessment year claimed a welfare exemption for 27 parcels, identified as parcel numbers 4455-033-003, 4455-033-005, 4455-033-026, 4455-034-001, 4455-035-001, 4455-033-009, 4455-033-010, 4455-033-011, 4455-033-021, 4455-033-022, 4455-015-002, 4455-016-032, 4455-016-033, 4455-028-043, 4455-033-023, 4455-033-006, 4455-033-007, 4455-033-018, 4455-040-007, 4455-040-010, 4455-028-070, 4455-028-071, 4455-028-073, 4455-028-075, 4455-028-054, 4455-028-077, and 4455-028-079.
In fact, Soka filed its refund claim for the 1999-2000 assessment year before its amended welfare exemption filing for the 1999-2000 assessment year. Soka first filed a welfare exemption claim for assessment year 1999-2000, which was dated October 25, 1999, and received by the County Assessor on November 18, 1999. This welfare exemption claim was for five assessor’s parcel numbers 4455-033-003, 4455-033-005, 4455-033-026, 4455-034-001, and 4455-035-001.
Soka filed its “claim for refund of property taxes” on April 9, 2004, before Soka’s July 5, 2005, amended welfare exemption for the 1999-2000 assessment year. The April 9, 2004, claim for refund claimed that 29 parcels of property were exempt from taxation and had been overvalued. This “claim for refund of property taxes” thus claimed property tax refunds for 24 parcels as to which no welfare exemption claim had been filed.
California Constitution, Article XIII, section 6 states: “The failure in any year to claim, in a manner required by the laws in effect at the time the claim is required to be made, an exemption or classification which reduces a property tax shall be deemed a waiver of the exemption or classification for that year.” This waiver provision applies to exemptions, such as the welfare exemption, which are filed annually. (Scott v. State Bd. of Equalization (1996) 50 Cal.App.4th 1597, 1602.) In the 1999-2000 fiscal year, Soka claimed the welfare exemption only as to five assessor’s parcel numbers 4455-033-003, 4455-033-005, 4455-033-026, 4455-034-001, and 4455-035-001. As a matter of constitutional law (Copren v. State Bd. of Equalization (1988) 200 Cal.App.3d 828, 834), for the 1999-2000 fiscal year Soka waived its welfare exemption claim to all assessor’s parcel numbers other than the assessor’s parcel numbers 4455-033-003, 4455-033-005, 4455-033-026, 4455-034-001, and 4455-035-001.
5. The Judgment Erroneously Included Payments of Special Assessments in Refunded Amounts
The County claims that Soka is not entitled to a refund of amounts paid as special assessments. The County argues that Soka’s action sought the refund of property taxes, and did not distinguish amounts paid as property tax from amounts paid for special assessments. A tax is a levy on all property without regard to special benefits; a levy made only upon land on the basis of benefits received is a special assessment. (Trumbo v. Crestline-Lake Arrowhead Water Agency (1967) 250 Cal.App.2d 320, 322-323.) “[E]xemptions of private property from taxation do not extend to special assessments, levied upon the basis of equivalent benefit, unless specifically so provided. [Citations.] This rule is generally applied to charitable institutions.” (Cedars of Lebanon Hospital v. Los Angeles County (1950) 35 Cal.2d 729, 747.) The trial court rejected the County’s claim, made in the County’s objection to the proposed judgment and in its new trial motion, that the refund amounts in the proposed judgment erroneously included special assessments. The trial court ruled that the refund amounts were those alleged in the separate statements.
In a summary judgment, the issues which are material are limited to the allegations of the complaint. (Lyons v. Security Pacific Nat. Bank (1995) 40 Cal.App.4th 1001, 1018.) Summary judgment cannot be granted on a ground not raised by the pleadings. (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663; 580 Folsom Associates v. Prometheus Development Co. (1990) 223 Cal.App.3d 1, 18.) Soka’s complaints alleged the amount of taxes paid on the property in five fiscal years, and alleged that Soka had timely filed this suit for refund of property taxes. Soka’s complaints alleged three causes of action “for refund of property taxes,” one of which was that Soka’s property qualified for the welfare exemption under section 214, subdivision (a). The complaints sought refunds of amounts of overpayment of taxes paid on Soka’s property. The complaints made no distinction between a refund of property taxes and a refund of amounts paid as special assessments. Since exemptions of private property from taxation do not extend to special assessments, and Soka’s complaints alleged only that under the welfare exemption it was entitled to a refund of property taxes paid, the County was not required to negate a claim for refunds of amounts paid as special assessment. To the extent the judgment included refunds of amounts paid as special assessment, it was erroneous.
DISPOSITION
The judgment is reversed and the matter is remanded to the trial court for such further proceedings as may be appropriate and not inconsistent with the views expressed herein. The parties are to bear their own costs on appeal.
We Concur: KLEIN, P. J., ALDRICH, J.