Marin assessor wins appeal in Mill Valley property tax dispute [The Marin Independent Journal, Novato, Calif.]

Oct. 17--A state appeals court has reversed a decision that reduced the assessed value of a Mill Valley property by more than $400,000.

The appellate ruling is a victory for the Marin County Assessor's Office, which sought the higher assessment. The actual tax amount in dispute was less than $3,000.

"Even though it may have been small-time in terms of money it was fairly big in terms of theory and something that we thought was important," said Richard Benson, the county assessor-recorder. "That's why we pursued it."

The case involved Proposition 13 and a Homestead Valley home that was owned by two brothers, Peter and James Mikkelsen.

When their father died in the 1950s, he left the property to his wife Dagmar. She then created a "joint tenancy" with Peter. When Mrs. Mikkelsen died in 1997, Peter created another joint tenancy with James. The brothers owned the property until 2007, when James Mikkelsen filed papers granting himself "an interest as a tenant in common," the appeals court said.

The county assessor's office said the transfer triggered change in ownership -- and thus a property tax reassessment -- under Proposition 13. The county said the assessed value rose from $100,361 to $525,323, increasing the property tax by $2,682.84.

James Mikkelsen took the dispute to the Marin County Assessment Appeals Board and demanded a tax refund. He said the switch from "joint tenancy" to "tenant in common" did not qualify as a change in ownership.

The appeals voted 2-1 in Mikkelsen's favor. The assessor's office then petitioned Marin Superior Court to review the matter.

Judge Faye D'Opal rejected the petition. The assessor's office appealed to the First District Court of Appeal in San Francisco, and the State Board of Equalization filed a brief in support.

A three-judge panel of the appeals court sided with the assessor's office and reversed the earlier judgment.

"From the time the Legislature enacted the change in ownership statutes implementing Proposition 13, it has treated family joint tenancies differently," said Associate Justice Kathleen Banke. "While the wisdom of the policy reason for that differential treatment -- to accommodate the use of joint tenancy as an estate planning tool -- may be a matter of debate, it was within the Legislature's prerogative to craft the change in ownership statutes accordingly.

"What Mikkelsen, the Board and the trial court overlooked was that Mikkelsen got the advantage of this policy when his brother created the joint tenancy and no change in ownership was deemed to have occurred. The price for that property tax break, so to speak, was a change in ownership when the family joint tenancy was terminated."

Deputy County Counsel Sheila Lichtblau said the county is pleased by the ruling.

"The appellate decision confirms the State Board of Equalization's interpretation of joint tenancy law, and clarifies when an assessor may reassess a joint tenancy property," she said.

Frank Mulberg, a Mill Valley lawyer who represented Mikkelsen, said he might appeal to the California Supreme Court, but noted it only agrees to hear about 1 percent of appeals.

"We're strongly considering a petition for review," Mulberg said. "We believe the Court of Appeal violated the law of the state."

The property was sold in 2010 and Mikkelsen now lives out of state.

Contact Gary Klien via email at [email protected] or https://twitter.com/GaryKlien

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