Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Kern County No. S-1500-CV-260222 NFT. Linda S. Etienne, Judge.
McCann & Carroll and C. Daniel Carroll for Plaintiff and Appellant.
B.C. Barmann, Sr., County Counsel and Jerri S. Bradley, Deputy County Counsel for Defendant and Respondent.
No appearance for Real Parties in Interest and Respondents.
OPINION
HILL, J.
Global Discoveries, Ltd. (Global) appeals the denial of its petition for a writ of mandate, which sought to reverse the Kern County auditor’s denial of its claim to excess proceeds from the tax sale of certain real property. Global made a timely claim to the auditor, but failed to provide all the original documentation required by the auditor as proof of the claim within the time allowed by resolution of the Board of Supervisors. The auditor denied Global’s claim, concluding she had no discretion to allow Global further time to furnish the missing documentation.
FACTUAL AND PROCEDURAL BACKGROUND
On February 7, 2005, two parcels of real property were sold at auction by Kern County for delinquent taxes. The tax collector’s deeds to the purchasers of the properties were recorded on April 5, 2005. The county received funds in excess of those necessary to satisfy the delinquent taxes and costs of sale, totaling approximately $13,000.
On or about April 5, 2006, Global filed claims to the excess proceeds from the two parcels with respondent, the Kern County Auditor-Controller-County Clerk (auditor). Real parties also filed timely claims to the excess proceeds.
Documents Global submitted with its claim indicated the basis of its claims, as follows. In 1992, Dreamland Investment Corporation executed promissory notes secured by deeds of trust on the two parcels of real property, which it owned. The beneficiary of the deeds of trust was the Josephine R. Debs Irrevocable Trust. In 1993, by grant deed, Dreamland conveyed its interest in the two parcels to the real parties in interest. The real parties executed promissory notes, secured by an All-Inclusive Deed of Trust to Dreamland, which stated it was “subject and subordinate to” the deeds of trust to the Josephine R. Debs Irrevocable Trust.
Global’s claims also included copies, rather than originals, of assignments, purporting to show that, on March 31, 2006, the Josephine R. Debs Irrevocable Trust assigned its rights and interests in Dreamland’s promissory notes and deeds of trust to Global; the assignments expressly included the right to submit a claim for the excess proceeds from the tax sale of the properties.
On September 19, 2006, the auditor sent Global a letter requesting the originals of the assignments and stating: “These documents must be in our office within 35 days of this letter or your claims will be denied as incomplete.” Global asserts that, due to a change in its office personnel, the letter was misplaced. Global failed to respond within 35 days, and the auditor sent it another letter on November 21, 2006, advising that the excess proceeds would be paid to the real parties in interest, and that Global had 90 days to contest the distribution pursuant to Revenue and Taxation Code section 4675, subdivision (g). On December 5, 2006, Global sent the original assignments to the auditor, asking that they be accepted despite their tardiness. On December 14, 2006, the auditor responded, stating that, pursuant to a resolution of the Board of Supervisors, she was authorized to allow a claimant 30 days to provide required documentation, but was not authorized to allow any additional time, and therefore, “we must deny your claim.”
On February 21, 2007, Global filed its petition for writ of mandate, seeking a writ compelling the auditor to distribute all of the excess proceeds from the tax sale to Global. After a hearing, the trial court found the auditor did not abuse her discretion in requiring original documents or in applying the 35-day time period; it denied the petition. Global appeals.
DISCUSSION
I. Standard of Review
Global petitioned for a traditional writ of mandate under Code of Civil Procedure section 1085. Such a writ “is a method for compelling a city to perform a legal, usually ministerial duty.” (Kreeft v. City of Oakland (1998) 68 Cal.App.4th 46, 53.) “When a court reviews an administrative decision pursuant to Code of Civil Procedure section 1085, it merely asks whether the agency’s action was arbitrary, capricious, or entirely lacking in evidentiary support, or whether the agency failed to follow the procedure and give the notices the law requires. [Citation.] In reviewing a trial court’s judgment on a petition for writ of ordinary mandate, we apply the substantial evidence test to the trial court’s factual findings. However, we exercise our independent judgment on legal issues, such as the interpretation of statutory … provisions.” (Ibid.) “‘Mandamus is an appropriate remedy to compel the exercise of discretion by a government agency, but does not lie to control the exercise of discretion unless under the facts, discretion can only be exercised in one way. [Citations.]’ [Citation.]” (MCM Construction, Inc v. City and County of San Francisco (1998) 66 Cal.App.4th 359, 368, last bracketed insertion added.)
II. Statute and Resolution
Excess proceeds from a tax sale “may be claimed by parties of interest in the property as provided in, Section 4675.” (Rev. & Tax. Code, § 4674.) Section 4675 provides, in relevant part:
All further statutory references are to the Revenue and Taxation Code, unless otherwise indicated.
“(a) Any party of interest in the property may file with the county a claim for the excess proceeds … at any time prior to the expiration of one year following the recordation of the tax collector's deed to the purchaser.
“(b) After the property has been sold, a party of interest in the property at the time of the sale may assign his or her right to claim the excess proceeds only by a dated, written instrument that explicitly states that the right to claim the excess proceeds is being assigned .… [¶] … [¶]
“(d) The claims shall contain any information and proof deemed necessary by the board of supervisors to establish the claimant's rights to all or any portion of the excess proceeds.
“(e) No sooner than one year following the recordation of the tax collector's deed to the purchaser, and if the excess proceeds have been claimed by any party of interest as provided herein, the excess proceeds shall be distributed on order of the board of supervisors to the parties of interest who have claimed the excess proceeds in the order of priority set forth in subdivisions (a) and (b). For the purposes of this article, parties of interest and their order of priority are:
“(1) First, lienholders of record prior to the recordation of the tax deed to the purchaser in the order of their priority.
“(2) Second, any person with title of record to all or any portion of the property prior to the recordation of the tax deed to the purchaser. [¶] … [¶]
“(g) Any action or proceeding to review the decision of the board of supervisors shall be commenced within 90 days after the date of that decision of the board of supervisors.”
“The board of supervisors … may … authorize any county officer to perform on its behalf any act required or authorized to be performed by the board of supervisors under Section 4675.” (§ 4675.1.)
In 1982, the Kern County Board of Supervisors (board) passed resolution 82-363, “to establish rules and procedures for dealing with and disposing of” excess proceeds claims. The resolution requires that claims under section 4675 be filed with the auditor, and provides that no claim “shall be treated by the Auditor as ready for approval” unless it meets requirements set out in the claim form and “the claim contains or incorporates all such other information as the Auditor, in the discretion of the Auditor (as authorized agent of the Board of Supervisors in these matters), reasonably deems necessary to establish or refute the claim in whole or in part.” The resolution adds: “Further, any claimant failing to furnish written information required or requested … within 30 days after reasonable request was sent by the Auditor, will have his or her claim rejected.” The resolution delegates to the auditor the authority to approve or deny claims and to distribute the excess proceeds to claimants whose claims are approved by the auditor.
Resolution 82-363 effectively delegates to the auditor the authority to determine what proof is reasonably necessary to establish a claimant’s claim to excess proceeds of a tax sale. The auditor requires that claimants submit original documents or certified copies if the document has been recorded, as proof of their claims for excess proceeds. When a party claiming excess proceeds does so as an assignee of the party who held the right of record at the time of the tax sale, the auditor requires submission of the original assignment as part of the claim.
When a claim for excess proceeds is timely filed with the auditor, but the accompanying proof is incomplete or deficient, resolution 82-363 prohibits the auditor from treating the claim as “ready for approval.” The auditor requests the missing information or documentation from the claimant. The deadline the auditor sets for the claimant’s response is either one-year from the recordation of the tax deed (i.e., the end of the one-year period for filing the excess proceeds claim) or 35 days from the request letter, whichever is later. Thus, if the request for further information is made well within the one-year statutory claim period, the claimant may submit the required information and complete its claim within the one-year period. When, however, the auditor does not discover, or does not notify the claimant of, the deficiency prior to expiration of the one-year period, the claimant cannot be expected to cure the deficiency during that period. In that situation, under the resolution, the auditor requests the needed information or documentation and allows the claimant 30 days in which to provide it, extended by five days for mailing. If the requested documentation is not provided within that time period, the auditor denies the claim.
III. Abuse of Discretion
Global contends the board abused its discretion or acted beyond its authority by imposing a 30-day time limit on the submission of additional proof of a claimant’s claim when that proof is requested by the auditor. It contends the auditor abused her discretion by denying its claim to the excess proceeds instead of accepting the original assignments despite their late submission. More specifically, Global contends the auditor abused her discretion by implementing the board’s 30-day time limit strictly and by erroneously interpreting the statute and resolution to preclude granting relief from default.
A. Board of Supervisor’s 30-day time limit
Global filed its claim, along with supporting documentation, with the auditor on the last day of the one-year period set out in section 4675, subdivision (a). Global claimed as an assignee, but submitted only a copy of the assignments, not the originals. Because the auditor did not discover any deficiency in the claim in time to notify Global and have Global rectify it within the one-year period, in accordance with resolution 82-363, the auditor requested the original assignments and gave Global 35 days to provide them. Global did not respond within the 35-day period, and the auditor denied its incomplete claim. One week after it received notice of that denial, Global sent the originals of the assignments to the auditor. The auditor refused to consider them.
Resolution 82-363 allows an excess proceeds claimant 30 days to provide additional documentation when the auditor notifies the claimant that the documentation is needed. Global contends the board was not authorized by section 4675 to set such a time limit. It asserts section 4675 authorizes counties to require the proof they deem necessary to establish excess proceeds claims, but does not authorize them to “establish secondary statutes of limitation, or to impose short-fuse time restrictions” on submission of additional documents requested by the auditor.
Section 4675 requires that the claim, containing “any information and proof deemed necessary … to establish the claimant’s rights to all or any portion of the excess proceeds,” be filed within one year after recording of the tax collector’s deed to the purchaser. (§ 4675, subd. (d).) Consequently, if, as Global asserts, the board was not authorized to allow an additional 30-day period for providing requested documentation after expiration of the one-year period, then the only applicable time limit was the one-year period established by section 4675. Global did not meet that deadline. Thus, if the 30-day time limit was unauthorized, Global was not prejudiced by its enactment, because the necessary proof of Global’s claim was not submitted within the one-year statutory filing period, and its claim would have been denied as incomplete anyway.
B. Auditor’s strict application of deadline
Global contends the auditor abused her discretion by applying the 30-day time limit strictly and refusing to grant relief from Global’s failure to meet the deadline. The auditor, believing she had no discretion to extend the 30-day period, did not consider Global’s request for relief from the failure to meet the deadline, but denied its claim because the original documents she requested were not submitted within the 30-day period. The auditor’s authority to act in connection with claims to excess proceeds of tax sales of real property is derived from the board’s resolution delegating to her those tasks. The board’s authority, in turn, is derived from section 4675.
When “a public official’s authority to act in a particular area derives wholly from statute, the scope of that authority is measured by the terms of the governing statute.” (Lockyer v. City and County of San Francisco (2004) 33 Cal.4th 1055, 1086.) However, “[i]t is well settled in this state that governmental officials may exercise such additional powers as are necessary for the due and efficient administration of powers expressly granted by statute, or as may fairly be implied from the statute granting the powers.” (Dickey v. Raisin Proration Zone (1944) 24 Cal.2d 796, 810, italics omitted.) To determine whether the auditor had discretion to grant relief, we consider the purpose and provisions of section 4675 and the board’s resolution.
Under prior law, excess proceeds from a tax sale remained the property of the state. (Fjaeran v. Board of Supervisors (1989) 210 Cal.App.3d 434, 439.) In 1976, the Legislature enacted section 4675, which for the first time authorized those who held an interest in the property to file claims for and receive distributions of the excess proceeds. (Stats. 1976, ch. 113, § 6, p. 177; Fjaeran, supra, at p. 439.) Claims may now be made by lienholders and title holders of record prior to recordation of the tax deed. Section 4675 requires the claimant to prove its claim and specifies the priority to be given to competing claims. The apparent purpose of the statute was to permit the county to recover the delinquent taxes due on the property, but preserve the former owner’s and the former lienholder’s interests in the property, if the proceeds from the sale exceed the amount due to the county for taxes.
Section 4675 delegates to the board of supervisors the determination of the proof needed to establish a claimant’s claim and the approval or denial of claims. It also authorizes the board to distribute the excess proceeds to claimants with approved claims, in accordance with the order of priority set out in the statute. Section 4675.1 authorizes the board of supervisors to delegate to a county officer any of the acts required or authorized by section 4675, and requires that the board “specify administrative rules and procedures” for the delegated acts.
Section 4675.1 provides, in pertinent part: “The board of supervisors of any county may, by resolution, authorize any county officers to perform on its behalf any act required or authorized to be performed by the board of supervisors under Section 4675. [¶] The resolution shall enumerate the section, or those portions of the section, to which the authorization is to apply, and shall specify administrative rules and procedures concerning any act performed under the authorization.”
Resolution 82-363 effectively delegates to the auditor receipt of claims, determination of what information is necessary to establish or refute claims, authority to request omitted information from the claimant, approval of claims, and distribution of excess proceeds. Exhibit A to the resolution sets out procedures for handling claims. Those procedures include: “Claims will be filed with the Auditor-Controller who will verify the timeliness of the claim and see that appropriate information and documentation are included. Incomplete or questionable items will be reviewed and resolved as soon as possible by: consultation with the claimant where appropriate, checking of County records, and consultation with the other County offices where appropriate. If requested documentation from claimant is not received by the Auditor-Controller within 30 days of its request, the claim will be denied as incomplete.” The resolution also provides that there is no right of appeal to the board, except in extraordinary cases.
Section 4675 is designed to ensure that those with an interest in the property sold at a tax sale, rather than the state or county, receive the benefits of any excess value of the property over the delinquent taxes. The statute defines the “parties of interest” who may file claims for the proceeds and specifies the priority of such claims. (§ 4675, subd. (e).) Section 4675 leaves substantial discretion to the board or its designee to determine what proof of claims is required, to approve or deny claims, and to determine their order of priority. If claims have been filed, the board must distribute the excess proceeds “[n]o sooner than one year following the recordation of the tax collector’s deed to the purchaser.” (Id., subd. (e).) Thus, while the statute requires that the board wait until after the one-year period for filing claims has passed before distributing the excess proceeds, it does not set any deadline by which the claims must be approved or denied or by which the distribution must be made.
The board’s resolution and procedures implement the statute, delegating much of the responsibility to the auditor. The auditor is expected to resolve problems with incomplete or questionable claims by consulting the claimant, county records, or other county offices “where appropriate.” It is left to the auditor to determine the exact means to use in attempting to resolve problems in each individual case. The requirement that the auditor review and resolve incomplete claims, combined with the lack of an available appeal to the board, suggests the board intended the auditor to take the time necessary to resolve the problem and arrive at a correct result as to the approval or denial of the claimant’s claim.
The resolution provides that “any claimant failing to furnish written information required or requested … within 30 days after reasonable request was sent by the Auditor, will have his or her claim rejected.” This provision does not use the customary language of mandate, “shall,” although that term is used elsewhere in the same paragraph of the resolution. Nor does the resolution expressly mandate that the auditor reject a claim if the claimant does not provide requested information within the 30-day time period, or deny the auditor discretion to vary the 30-day period. Rather, the 30-day period appears to be a deadline for the claimant, which the auditor could extend as necessary to satisfy her obligation to resolve incomplete or questionable claims in order to make a proper distribution of the excess proceeds.
It is a well-settled principle of statutory construction that the word “‘may’” is ordinarily construed as permissive, whereas “‘shall’” is ordinarily construed as mandatory, particularly when both terms are used in the same statute. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 443.)
The same paragraph states: “A claim … shall be filed with the Auditor,” and “[n]o claim shall be treated by the Auditor as ready for approval unless .…”
This interpretation is consistent with the auditor’s addition to the 30-day period of five days for mailing of the request for further documents. If, as the auditor now contends, she had no discretion to increase the 30-day period, she would have no discretion to add five days to it due to the mailing of the request. The resolution has been in effect since 1982. The record does not indicate when the addition of five days for mailing was implemented, but apparently it has remained in effect without objection from the board.
In light of the language and purpose of the statute and resolution, we believe the auditor’s discretion to accept proof of a claim at a time beyond the 30-day period, when good cause is shown and the excess proceeds have not yet been distributed, is an “additional power[] … necessary for the due and efficient administration of powers expressly granted” by section 4675 and the resolution or “fairly … implied from the [provisions] granting the powers.” (Dickey v. Raisin Proration Zone, supra, 24 Cal.2d at p. 810, italics omitted.) We conclude that power included the discretion to grant relief after expiration of the 35-day period on a showing of good cause, equivalent to a showing under Code of Civil Procedure section 473. (See Kupka v. Board of Administration (1981) 122 Cal.App.3d 791, 795, “courts have interpreted the ‘good cause’ standard as equivalent to a showing under section 473.”)
A writ of mandate may be used to compel the exercise of discretion, but not to control it. (MCM Construction, Inc. v. City and County of San Francisco, supra, 66 Cal.App.4th at p. 368.) The auditor failed to exercise her discretion to grant or deny relief from Global’s failure to meet the 30-day deadline, because of her belief that the 30-day period was absolute and she had no discretion to deviate from it. She cannot be compelled by writ of mandate to exercise her discretion in any particular way. She can only be compelled to exercise her discretion to grant or deny Global’s request for relief.
DISPOSITION
The judgment is reversed and the matter is remanded to the trial court with directions to grant Global’s petition for a writ of mandate directing the auditor to exercise her discretion to grant or deny Global’s request for relief from its failure to respond to the auditor’s request for original documents within the 35-day period. Global is awarded its costs on appeal.
WE CONCUR: WISEMAN, Acting P.J., GOMES, J.