AVALONBAY COMMUNITIES INC v. COUNTY OF LOS ANGELES (2011)

We concur:

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

AVALONBAY COMMUNITIES, INC.

Plaintiff and Appellant,

v.

COUNTY OF LOS ANGELES et al.,

Defendants and Respondents.

B225422

(Los Angeles County

Super. Ct. No. BC386768)

ORDER MODIFYING OPINION, DENYING REHEARING AND CERTIFYING FOR PUBLICATION

It is ordered that the opinion filed herein on June 22, 2011, be modified as follows:

1. On page 3, in the first full sentence on the page, the word “after” is removed so the sentence reads:

The second installment is “due and payable” on February 1 of each fiscal tax year and is considered delinquent if the payment is not received by 5:00 p.m. on April 10.

2. On page 3, at the end of the first sentence in the first full paragraph, following the word “County,” add as footnote 3 the following footnote, which will require renumbering of all subsequent footnotes:

The factual summary regarding Avalon's delinquent property tax payment is based on statements in Avalon's Second Amended Petition for Writ of Mandate and its Memorandum of Points and Authorities in Support of Petition for Writ of Mandate.

3. On page 3, in the last sentence of the first full paragraph, which commences “Avalon's tax manager,” the term “(CMD)” is added after the term “Cash Management Department,” so the sentence reads:

Avalon's tax manager and controller approved the FTR, and then forwarded it to the Cash Management Department (CMD), which was supposed to process the request.

4. On page 3, the paragraph commencing with “Avalon's Cash Management Manager” and ending with “the Tax Collector” is modified to read as follows:

Avalon's CMD manager was responsible for issuing the wire payment and ensuring that the payment was made on the appropriate date.   Although the CMD manager received the approved FTR on or around April 3, she “unintentionally and inadvertently neglected” to process the wire payment

5. The paragraph commencing at the bottom of page 3 with “According to Avalon,” and ending at the top of page 4 with “ ‘caught’ the error” is modified to read as follows:

According to Avalon, the CMD analyst, who served as the CMD manager's assistant, was partially responsible for the “inadvertent late payment.”   The CMD manager “traditionally relied on her [analyst] to verify that all transaction payments by that department were completed when scheduled.”   However, in “the March–to–April 2006 time frame,” Avalon hired a new CMD analyst to replace the manager's former assistant.  “In April of 2006, that new employee was not yet sufficiently conversant with all department procedures, and was unaware that the [wire payment] ․ was missed.”   As a result, the newly-hired analyst failed to inform the manager about the unprocessed payment.

6. On page 4, the paragraph commencing with “Following its late payment” and ending with “paid late again” is modified to read as follows:

Following its late payment, Avalon amended its accounting systems to add a “real-time display” that allows the CMD staff and other designated employees to view all pending wire requests on a daily basis.   Avalon adopted theses corrective measures to “prevent such [payment] ․ mistakes in the future.”

7. On page 4, the first sentence in the final paragraph which starts “After reviewing Avalon's request” is modified to read as follows:

After reviewing Avalon's request, the Tax Collector determined that the delinquent payment “was solely the result of employee error,” which was insufficient to “support penalty cancellation under ․ section 4985.2(a).”

8. On page 12, the first full paragraph commencing with “The facts of this case” and ending with “subdivision (a) is inapplicable” is modified to read as follows:

The facts of this case cannot be meaningfully distinguished from ZC Real Estate.   Avalon admits that its delinquent payment was the result of a mistake made by its own employees.   Specifically, Avalon's CMD manager overlooked a fund transfer request that had been authorized by upper management.   The manager's assistant, who was supposed to verify that all approved fund requests were processed in a timely manner, was a newly-hired employee whose inexperience directly contributed to the late payment.   Moreover, the company's computer accounting system had no control mechanism in place to notify the CMD manager of outstanding fund transfer requests.   Thus, as in ZC Real Estate, the factors that caused the delinquent payment – employee error and lack of any control mechanism – were clearly within Avalon's control and, as a result, section 4985.2, subdivision (a) is inapplicable.

9. On page 12, the fourth sentence in the first paragraph in section ii.   Avalon's attempts to distinguish ZC Real Estate are unpersuasive, which begins “Rather, the delinquency,” the phrase “Cash Manager” is replaced with “CMD manager” and the phrase “email directing” is replaced with “fund transfer request that directed” so the sentence reads:

Rather, the delinquency occurred because the CMD manager overlooked a fund transfer request that directed her to release the property tax payment on April 6.

10. On page 12, the fifth sentence in the first paragraph section ii.   Avalon's attempts to distinguish ZC Real Estate are unpersuasive, which begins “We see no meaningful difference,” is modified to read as follows:

We see no meaningful difference between inadvertently mislabeling an envelope and inadvertently overlooking a request to wire funds by a specified date.

11. On page 13, the second sentence in the first full paragraph, which begins “Specifically, Avalon,” is modified to read as follows:

Specifically, Avalon has amended its accounting system to add a “real-time display” that shows the CMD manager and other accounting personnel any “pending EFT transactions.”

12. On page 13, the fourth sentence of footnote 5 (now footnote 6 as the result of modification number two above), which begins “Instead, the evidence shows,” is modified to read as follows:

Instead, Avalon admits that an employee simply failed to process a wire payment on a specified date.

13. On page 13, the fifth sentence of footnote 5 (now footnote 6 as the result of modification number two above), which begins “Moreover, Avalon admitted,” the phrase “admitted in a deposition” is replaced with the word “acknowledges,” so the sentence reads:

Moreover, Avalon acknowledges that it had been using the EFT payment system since at least 2001 and had never experienced any problems.

14. On page 16, in the fourth sentence of the second full paragraph, which commences “Therefore, subdivision (b),” the term “be” is added after the word “only” so the sentence reads:

Therefore, subdivision (b) would only be relevant if Avalon could show that it paid some portion of the second property tax installment prior to April 10, which it admittedly failed to do.

15. On page 17, in the Disposition, the phrase “order denying Appellants' petition for writ of mandate” is replaced with the word “judgment.”   The Disposition now reads as follows:

The trial court's judgment is affirmed.   Respondents are to recover their costs on appeal.

There is no change in judgment.

Appellant's petition for rehearing is denied.

The opinion in the above-entitled matter filed on June 22, 2011, was not certified for publication in the Official Reports.   For good cause it now appears that the opinion should be

ZELON, J.

WOODS, Acting P. J. JACKSON, J.