Filed 8/26/26 Prang v. L.A. County Assessment Appeals Bd. CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
JEFFREY PRANG, as County B351304 Assessor, etc., (Los Angeles County
Plaintiff and Appellant,
Super. Ct. No. 25STCP01036)
v.
LOS ANGELES COUNTY ASSESSMENT APPEALS BOARD NO. 4,
Defendant;
GI TC ONE WILSHIRE, LLC,
Real Party in Interest and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County, Curtis A. Kin, Judge. Reversed with directions.
Law Office of Albert Ramseyer and Albert Ramseyer for Plaintiff and Appellant.
No appearance for Defendant. Greenburg Traurig, Colin W. Fraser, Cris K. O’Neall, and Blake M. Thomas for Real Party In Interest and Respondent.
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This appeal asks whether the minimum pleading requirements for a petition for writ of administrative mandate have been met, sufficient to defeat a general demurrer (or as here, the equivalent motion for judgment on the pleadings). The test is the same as it is in most civil cases. The petition must (i) set forth ultimate facts sufficient to (ii) state a valid cause of action.
The petition here met this basic test, so we reverse the trial court which found to the contrary.
BACKGROUND
In 2014, GI TC One Wilshire, LLC (One Wilshire)
purchased a building at 624 South Grand Avenue, Los Angeles (the property) in July 2013 for $437,500,000. The property is located at the physical terminus of several major undersea fiber optic cables, and at the time of the sale was leased primarily for use as a “carrier hotel,” a building that hosts web servers for web hosting organizations and large enterprises. (<https://www.pcmag.com/encyclopedia/term/telecom-hotel> [as of Aug. 26, 2026], archived at <https://perma.cc/W52W-WQUD>.) The property’s upper floors were leased as office space.
After the property’s transfer, the Los Angeles County Assessor (Assessor) appraised it to establish a property tax base.
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The Assessor determined that the property’s fair market value was its sale price of $437,500,000 as of tax year 2014, attributing $37,500,000 to the land and $390,500,000 to improvements. 1. The administrative proceedings.
One Wilshire filed a challenge to the Assessor’s valuation with the Los Angeles County Assessment Appeals Board (Board).1 One Wilshire contended that the sale price included a nontaxable “ ‘peering premium’ ” and that the property’s taxable value was $243,000,000. One Wilshire argued that the property had attracted hundreds of telecom lessees who were willing to pay above-market rents because the proximity of other Internet servers—i.e., “ ‘peering’ ”—“makes their telecom services faster, more efficient, and more reliable.” One Wilshire argued that this “ ‘peering premium’ ” was an intangible asset that should be subtracted from the property’s sale price to determine the property’s taxable value.
The Board took testimony and issued a written decision in September 2024. It summarized the testimony of the witnesses and made findings.
The Board noted that intangible assets are not taxed as real property. That is, taxing authorities are required to value intangible assets and remove that value from a property’s taxable base. Intangible assets are those, such as trade names, logos,
1 The Board sits as the Board of Equalization of Los Angeles County. The Board is a quasi-judicial body that settles valuation disputes between the taxpayers and the Assessor. (<https://bos.lacounty.gov/services/assessment-appeals/> [as of Aug. 26, 2026], archived at <https://perma.cc/WSU3-PPKU>.)
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customer relationships, and goodwill, whose value is not attributable to real property or tangible personal property.
The Board concluded that the property’s sale price included an intangible asset—namely, a “peering premium”—that it described as follows:
“[T]he [property] is a ‘carrier hotel,’ that ‘powers the internet’ and one of the most important Data Centers and points of internet connectivity in the United States. [One Wilshire] has built an ecosystem of hundreds of telecom companies that, because of the [property’s] extensive infrastructure, can connect to the core of the internet and each other, i.e., ‘peering’, without connecting to the public internet. . . . The evidence also shows that the telecom companies in the [property] pay a premium for the telecom office space as compared to traditional office space or basic telecom office space in other buildings. The Board finds that the evidence supports [One Wilshire’s] claim that the ‘peering premium’ is an intangible asset.”
The Board found that telecom offices in buildings with very few other telecom offices—“tier two” offices—rented for $3 per square foot per month, which the Board found “represents value attributed solely to real estate and does not represent intangible value.” In contrast, telecom offices in buildings with a “ ‘critical mass’ ” of Internet service providers—“tier one” offices—rented, on average, for $4.73 per square foot per month. The Board concluded that the additional $1.73 per square foot in rent ($4.73/square foot – $3.00/square foot = $1.73/square foot) that tier one buildings were able to charge was an intangible asset “that does not inhere in the buildings and furnishings.”
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The Board calculated that the rents the property was able to attract over comparable “tier two” buildings totaled $8,366,280 per year ($1.73 per square foot per month x 12 months x 403,000 square feet of telecom space). The Board then adopted a capitalization rate of 10.53 percent, by which it divided $8,366,280, to calculate a “ ‘peering premium’ ” of $77,863,000. The Board thus concluded that the property’s taxable value was its purchase price of $437,500,000, less its intangible value of $77,863,000, for a total of $359,637,000. 2. The mandate proceedings.
The Assessor sought review of the Board’s decision by filing a petition for writ of administrative mandate in the trial court in March 2025 (Code Civ. Proc.,2 § 1094.5), and filed the operative first amended petition in April 2025.3 The petition alleged that the Board abused its discretion in three separate ways by concluding that One Wilshire’s critical
2 Further statutory references are to the Code of Civil Procedure. 3 Separately, One Wilshire filed a refund complaint against the County (GI TC One Wilshire LLC v. County of Los Angeles, Los Angeles Superior Court case No. 25STCV08289). In March 2025, the Assessor filed a notice that the mandate and refund cases were related. One Wilshire agreed. The trial court nonetheless declined to relate the two cases, and the refund action remains pending in a different department. The Assessor suggests that if we reverse the judgment in this case, we should direct the cases be related. The Assessor has not cited authority suggesting that this issue is before us in this appeal, and thus we deny the request. We express no opinion on the matter should either party renew the request in the trial court.
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mass of telecommunications leases was non-assessable intangible asset: (1) the Board “did not decide the case . . . in the manner required by law,” (2) its decision “is not supported by the findings,” and (3) “the findings are not supported by the evidence.”
The petition alleged that the property contained physical amenities necessary to support a major telecommunications data center—including security, electrical capacity, HVAC, fire suppression systems, backup generators, batteries, telecom facilities, transformers, electrical vaults, and fiber vaults—that the Board erroneously found were not part of the property’s taxable value. Further, the Board “disregarded the actual rent that the [property] yields resulting from the leasing of space to its telecommunications tenants,” excluded from the property’s taxable value its rent stream attributable to its valuable location, and erroneously concluded that the property’s “ ‘connectivity amenities’ are an intangible assets as distinct from real property.”
In effect, the petition alleged that the evidence showed that the property commanded rents higher than tier two properties because of its exceptional location and physical infrastructure, not an intangible peering premium. The petition claimed that the evidence did not support the Board’s conclusion that any portion of the property’s capitalized income stream was an intangible asset and so not taxable. The Assessor asked the court to issue a writ of mandate directing the Board to vacate its final determination and amend its findings.
One Wilshire filed a motion for judgment on the pleadings in August 2025. It argued that the Assessor’s petition offered just one legal theory to challenge the Board’s ruling—namely,
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that the Board erred as a matter of law by disregarding the actual rent the property generated in calculating the property’s taxable value. One Wilshire argued that as a matter of law a property’s assessed value must be based on “market rent,” and thus an above-market rent premium is a non-taxable intangible asset that must be removed from assessment. One Wilshire further urged that the petition should be dismissed with prejudice because it could not be amended to state a claim.
The Assessor responded that the petition stated a cause of action because it alleged that the value determined by the Board was “contrary to law, unsupported by evidence, and inadequately explained.” Specifically, the Assessor argued, the Board’s valuation was not supported by substantial evidence because the Board “failed to equalize [One Wilshire’s] tangible property in recognition of ‘all of the uses and purposes to which the property is capable of being used’ . . . (Rev. & Tax Code, § 110(a).) Stated in appraisal terms, the Board did not equalize the [property] consistent with its highest and best use.”
The Assessor further contended that the Board’s findings were erroneous as a matter of law and the Board did not adequately explain its conclusions because while the Board acknowledged that the property has “ ‘extensive connectivity infrastructure,’ ” it did not explain what that infrastructure was or why it would justify reducing One Wilshire’s property tax assessment. The Assessor thus requested that the court deny the motion for judgment on the pleadings and set the matter for trial.
The trial court granted the motion for judgment on the pleadings. The court concluded, first, that the Assessor’s contention that the Board should have assessed the property’s
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taxable value based on its actual rents was contrary to law. The court explained:
“[T]he Board permissibly determined that the higher lease rates charged to the subject property’s telecommunication tenants resulted from a premium paid for ‘peering,’ which is ‘an intangible asset that was generated solely from [One Wilshire]’s business model of having a significant number of telecom tenants who can take advantage of the [property’s] extensive connectivity infrastructure.’ . . . It was therefore not error for the Board to deem the ‘peering premium’ as a non-assessable intangible asset.”
Second, the court found that the decision adequately explained the Board’s reasoning. To the extent that the Assessor claimed otherwise, “this theory is also without merit based on the Decision.”
Third, the court found that the Assessor did not properly plead a lack of substantial evidence because it raised this issue “for the first time in its opposition.” In any event, the court said, “the Decision’s summary of evidence describes substantial evidence supporting that decision and [the Assessor] does not represent that it could or would allege in good faith that the Decision incorrectly recounts or summarizes the evidence before the Board.”
Finally, the court declined leave to amend “[b]ecause [the Assessor] has failed to articulate how the petition could be reasonably amended.”
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The trial court entered judgment for One Wilshire. The Assessor timely appealed.4 DISCUSSION
The Assessor urges that the petition stated a cause of action for administrative mandate because it alleged, among other things, that the Board’s attribution of approximately $78 million of the sale price to a nontaxable “peering premium” was not supported by substantial evidence. The Assessor notes that the Board calculated the “peering premium” by comparing the property’s actual rents to rents paid for “tier two” properties, concluding that the property’s higher rents were entirely attributable to its intangible assets. The Assessor asserts that the evidence presented at the hearing demonstrated otherwise— that is, that the property’s premium rents were due to its physical infrastructure, including its connectivity and physical amenities, which are tangible (and thus taxable) assets. The Assessor urges that the trial court should have denied the motion for judgment on the pleadings and considered his substantial evidence challenge with reference to the entire administrative record. We agree.5
4 The Assessor filed a request for judicial notice with his opening brief, which One Wilshire opposes. The documents attached to the Assessor’s request for judicial notice are not relevant to our resolution of this appeal, and thus we deny the request. (The Chemical Toxin Working Group, Inc. v. The Kroger Company (2026) 120 Cal.App.5th 276, 288, fn. 5 [only relevant material may be judicially noticed].) 5 Because we so conclude, we need not consider whether the petition also adequately alleged that the Board did not proceed as
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A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same standard of review (York v. City of Los Angeles (2019) 33 Cal.App.5th 1178, 1193)— that is, we exercise our independent judgment as to whether, as a matter of law, the petition states a cause of action on any available legal theory. (Saint Francis Memorial Hospital v. State Dept. of Public Health (2021) 59 Cal.App.5th 965, 973 (Saint Francis).)
This mandamus proceeding is subject to the general rules of pleading applicable to civil actions. (Saint Francis, supra, 59 Cal.App.5th at p. 973.) The pleading must simply have “[a] statement of facts constituting the cause of action, in ordinary and concise language.” (§ 425.10 (a)(1).) Ultimate facts suffice. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) The elements of the cause of action are simply whether the agency “proceeded without, or in excess of, jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of discretion. Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence.” (§ 1094.5, subd. (b).)
The pleading bar is not high. “For good reason, California state civil procedure makes complaints easy to write and hard to attack: Experience shows litigation effort devoted solely to attacking pleadings is costly and time consuming and rarely yields much helpful information for litigants about the true value
required by law or that the decision was not supported by the findings within the meaning of section 1094.5.
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of their case.” (Brown v. Los Angeles Unified School Dist. (2021) 60 Cal.App.5th 1092, 1110 (Wiley, J. conc.).)
The bar was met in this case. The operative petition alleges a cause of action for administrative mandate, relying on three theories: the Board did not proceed as required by law, and its decision was not supported by its findings, and its findings were not supported by the evidence. A competent claim under any one of these theories defeats a demurrer or, as here, a motion for judgment on the pleadings. (E.g., Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.)
The petition is adequate. It alleges both that the Board’s findings were not supported by substantial evidence, as well as these supporting facts: The property was purchased in July 2014 for $437,500,000, which the Assessor determined was its taxable value. But the Board reduced the property’s assessed value by approximately $78 million, determining that that portion of the sale price was attributable to an intangible “peering premium,” not taxable value. This finding “was not supported by the evidence” because the rents paid by the property’s telecommunications tenants were attributable to the property’s tangible assets—including its “valuable location” in downtown Los Angeles and a variety of amenities necessary to support a telecommunications data center, such as “security, electrical capacity, HVAC, fire suppression systems, backup generators, batteries, telecom facilities, transformers, electrical vaults, and fiber vaults”—not to an intangible “peering premium.” The evidence further established that the property’s tenants “pay significant rent because of the [property’s] . . . amenities.” (Italics added.)
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The petition alleged the ultimate facts relevant to establishing a claim for administrative mandate—that the evidence before the Board did not support its finding that approximately $78 million of the sale price was attributable to an intangible peering premium, not to taxable value.
No more was required for the pleading. Nevertheless, One Wilshire makes arguments in defense of the judgment below, to which we now turn.
First, One Wilshire contends that the substantial evidence issue is not properly before us because the petition “did not allege that the Board’s decision lacked the support of substantial evidence.” But as we’ve noted, it plainly does.
Second, One Wilshire contends that the Assessor advocated “a new rule” that “would require this Court to apply substantial evidence review when considering an order granting a demurrer or motion for judgment on the pleadings.” Not so. The Assessor just contends, rightly, that an administrative mandate petition states a claim sufficient to survive a motion for judgment on the pleadings if it alleges that the Board’s findings were not supported by substantial evidence.
Third, One Wilshire appears to argue that the Assessor can’t present a substantial evidence claim here because he didn’t introduce critical evidence before the Board, thus forfeiting the substantial evidence challenge. For example, One Wilshire says the Assessor “fail[ed] to present evidence to establish a market rental rate for telecom space,” “never challenged One Wilshire’s position that the peering premium was a non-taxable asset,” and “failed to meet [his] burden . . . to identify, value, and remove intangible assets from assessment.” But these contentions rely on what happened at the Board hearing—which is not properly
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before us (or the trial court) in a motion for judgment on the pleadings. These motions look only to the face of the petition and judicially noticed facts. (Environmental Health Advocates, Inc. v. Sream Inc. (2022) 83 Cal.App.5th 721, 728.) We may consider the Board’s findings, appended to the petition, but we don’t assume their truth. (Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (2018) 23 Cal.App.5th 1129, 1149, fn. 24.) The “facts” that One Wilshire contends establish forfeiture in the Board proceedings are not to be considered in connection with a motion for judgment on the pleadings.
Fourth, One Wilshire contends that the trial court properly rejected the Assessor’s substantial evidence challenge because, in the trial court’s words, the Board’s findings “ ‘describe[] substantial evidence supporting that decision and [the Assessor] does not represent that [he] could or would allege in good faith that the [Board’s findings] incorrectly recount[ed] or summarize[d] the evidence before the Board.’ ” This mischaracterizes substantial evidence review. When considering a challenge to the sufficiency of the evidence, courts “ ‘ “ ‘ “review the whole record in the light most favorable to the judgment below to determine whether it discloses substantial evidence.” ’ ” ’ ” (People v. Jimenez (2025) 117 Cal.App.5th 602, 608, italics added; § 1094.5, subd. (c) [“abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record”].)
The trial court may not short circuit this review by considering only the trier of fact’s findings, divorced from the record. Ocheltree v. Gourley (2002) 102 Cal.App.4th 1013 (Ocheltree) is instructive. There, the plaintiff filed a petition for
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writ of mandate, contending that an administrative decision was not supported by the evidence. The trial court denied the petition on the merits before the agency prepared the administrative record, and the plaintiff appealed. The plaintiff argued on appeal that the trial court erred by deciding the substantial evidence issue without reviewing the administrative record. The Court of Appeal wrote that the “trial court stated it made its decision after reviewing the petition for writ of mandate. But it did not review the administrative record because it had not yet been prepared.” The court noted the “trial court could not independently weigh the evidence and resolve these issues without reviewing the administrative record.” (Id. at pp. 1017–1018, italics added.) The court concluded: “It is one thing to put the cart before the horse. Here the trial court put the cart without the horse.” (Id. at p. 1015.)
We agree with Ocheltree that where a petitioner challenges an agency’s findings as unsupported by substantial evidence, the trial court may not limit its review to the face of the findings, but must consider those findings in light of the underlying administrative record; indeed, the whole record. (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 652; Asimow et al., Cal. Practice Guide: Administrative Law (The Rutter Group 2025) ¶ 17:267.)
Relying, as the trial court apparently did, on only the findings recited by the Board may well miss context and facts that undermine the administrative findings. That’s why the evaluation cannot be done on demurrer or motion for judgment on the pleadings:
“As Chief Justice Traynor explained . . . . ‘Occasionally’ . . . ‘an appellate court affirms the trier
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of fact on isolated evidence torn from the context of the whole record. Such a court leaps from an acceptable premise, that a trier of fact could reasonably believe the isolated evidence, to the dubious conclusion that the trier of fact reasonably rejected everything that controverted the isolated evidence. Had the appellate court examined the whole record, it might have found that a reasonable trier of fact could not have made the finding in issue. One of the very purposes of review is to uncover just such irrational findings and thus preclude the risk of affirming a finding that should be disaffirmed as a matter of law.’ (Traynor, The Riddle of Harmless Error (1969) p. 27.) (Fns. omitted.)” (People v. Johnson (1980) 26 Cal.3d 557, 577–578.)
Finally, One Wilshire argues that the Assessor’s claim that the Board made an error of law by disregarding actual rent is itself erroneous because fair market value for tax purposes is based on market rent, not actual rent.
But we need not reach this issue. The petition adequately alleges lack of substantial evidence. It therefore states a cause of action for administrative mandate, and so the motion for judgment on the pleadings should have been denied. (See Santa Clarita Organization etc. v. County of Los Angeles (2024) 105 Cal.App.5th 1143, 1165 [motion for judgment on the pleadings cannot be granted as to only a portion of a cause of action]; Fire Ins. Exchange v. Superior Court, supra, 116 Cal.App.4th at p. 452 [same].)
For these reasons, the trial court erred in granting One Wilshire judgment on the pleadings. We therefore reverse the judgment and remand the matter for the trial court to consider the mandate petition on the merits.
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DISPOSITION
The judgment is reversed and the matter is remanded to the trial court with directions to vacate its order granting One Wilshire’s motion for judgment on the pleadings, and enter a new order denying that motion. The Assessor is awarded his appellate costs.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KARNOW, J.*
We concur:
ADAMS, P. J.
HANASONO, J.
* Retired Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.