Court Opinion

ID: 9365595
Source: CourtListenerOpinion
Date Created: 2023-01-24 17:02:46.67481+00
Date Added: 2024-06-11T17:15:46.308745
License: Public Domain

Filed 1/23/23 Spjut v. County of Kern CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIFTH APPELLATE DISTRICT

 RICHARD W. SPJUT,
                                                                                             F082265
           Plaintiff and Appellant,
                                                                            (Super. Ct. No. BCV-18-101505)
                    v.

 COUNTY OF KERN et al.,                                                                   OPINION
           Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Kern County. David R.
Lampe, Judge.
         Richard W. Spjut, in pro. per., for Plaintiff and Appellant.
         The Appellate Law Firm and Berangere Allen-Blaine, for Plaintiff and Appellant.
         Margo A. Raison, County Counsel, and Jerri S. Bradley, Deputy County Counsel
for Defendants and Respondents.
                                                        -ooOoo-
       Richard W. Spjut filed an action in the superior court seeking a refund of property
taxes he had paid on his house in Bakersfield. He made equal protection and due process
claims, among other claims. The trial court found in favor of defendants Kern County,
the Kern County Board of Supervisors and its Assessment Appeals Board, and dismissed
the case. Spjut appealed. We affirm.
                   FACTUAL AND PROCEDURAL OVERVIEW
A.     Spjut Gets the Family House in Divorce from His Wife
       Richard Spjut and his ex-wife purchased a house in Bakersfield on May 23, 2003,
with title in the name of Spjut’s ex-wife (they were not married at the time). Spjut and
his ex-wife got married in 2004, and, in 2006, Spjut’s name was added to the title.
Spjut’s ex-wife filed for divorce in January 2010. Judgment of dissolution was entered
on May 5, 2011, with the family court ordering bifurcation and retaining jurisdiction to
determine the property settlement while the parties negotiated the same. The family court
granted temporary use and control of the residence to Spjut, pending an appraisal of the
property.
       On June 30, 2011, the family court ordered Spjut to “provide proof of qualification
for refinance in total of the amount of the first and second mortgage/loan on the family
residence.” (Unnecessary capitalization omitted.) The court further ordered that Spjut’s
ex-wife “may bring [a] motion for occupancy of the house if [Spjut] does not provide
proof of refinancing ability.” (Unnecessary capitalization omitted.) On September 29,
2011, judgment was entered on the reserved issues, with Spjut awarded sole title to the
residence, contingent on him refinancing the first mortgage on the property solely “in his
name.” (Unnecessary capitalization omitted.) His ex-wife was ordered “to cooperate
with [the] refinance” and was held “solely responsible for [the] 2nd mortgage.”
(Unnecessary capitalization omitted.) The parties agreed the court would retain
jurisdiction to enforce the property settlement pursuant to Code of Civil Procedure
section 664.6, which permits the court to enter judgment pursuant to a settlement between

                                            2.
the parties and, if requested by the parties, to “retain jurisdiction over the parties to
enforce the settlement until performance in full of the terms of the settlement.”
       On account of issues between the parties, the final judgment was not entered until
September 4, 2013. Spjut acknowledged, in a statement included in the record, that
refinancing of the first mortgage to one in his name was “delayed” until September 2013.
An interspousal transfer deed was eventually signed by Spjut’s ex-wife on August 1,
2013, and recorded on September 12, 2013, with Spjut thereupon holding sole title to the
property. On the September 12, 2013 interspousal transfer deed, Spjut’s ex-wife
declared: “This is an Interspousal Transfer and not a change in ownership under Section
63 of the Revenue and Taxation Code and Grantor(s) has (have) checked the applicable
exclusion from reappraisal.”

B.     Spjut Challenges the Valuation, for Property Tax Purposes, of the House, at a
       Hearing Before the Assessment Appeals Board for the County of Kern
       As noted above, the house was originally purchased in 2003; its purchase price
was $258,000, which represented its base value for property tax purposes under
Proposition 13. In 2011, when the family court had ordered an appraisal of the house, the
housing market was depressed and the house was valued, pursuant to the appraisal, at
$182,000. Following the recordation, in 2013, of the interspousal transfer deed by which
Spjut’s wife transferred her interest in the property to Spjut, the Kern County Assessor’s
Office assessed the value of the house for purposes of property taxes for the 2014-2015
tax year (this value represented the 2014 lien date assessment). The value of the house
for this purpose (that is, the 2014 lien date assessment) was assessed at $272,000, in
compliance with the requirements of Proposition 13 and Proposition 8.
       On November 29, 2014, Spjut filed an “application for changed assessment” with
the County of Kern. (Unnecessary capitalization omitted.) The matter was heard by the
Assessment Appeals Board of the County of Kern (AAB or the Board) on May 11, 2016.

                                               3.
Jeff Graham, chief appraiser with the Kern County Assessor’s Office (Assessor’s Office)
represented that office; Spjut appeared on behalf of himself.
       Joshua Armstrong, a residential property appraiser employed by the Assessor’s
Office testified on behalf of the Assessor. Armstrong also submitted a written appraisal
report that he had prepared assessing the value of Spjut’s residence at $272,000 as of
January 1, 2014. The written appraisal report provided as follows:

             “The property’s base year value was established as of its May 23,
       2003 acquisition for $258,000. This value was subjected to the California
       Consumer Price Index (CPI) factor each year per Proposition XIIIA.

              “The applicant has asserted that the Assessor was in error for
       enrolling the indicated 2014 fair market value (which was below the
       property’s factored base year value of $304, 823), as he believes the
       property should have been reassessed at an earlier 2011 event. The event in
       question, a 50% transfer of interest between the applicant and his ex-wife,
       is considered to be an interspousal transfer per Section 63 of the Revenue
       and Taxation Code and is therefore categorically excluded from
       reassessment. Multiple attempts were made to remedy the applicant’s
       stated misconception of the pertinent property tax laws. The contested
       Proposition 8 value that was indicated by market data and enrolled as of
       January 1, 2014 was $272,000. [¶ ]…[¶ ]

              “Article XIIIA of the State Constitution (Proposition 13) requires
       that property be re-appraised at its market value as of the date of change in
       ownership. Article XIIIA also allows for the base year value to be
       increased by no more than 2 percent each year.

               “Revenue and Taxation Code Section 51 allows for the enrollment
       of the lesser of the factored year value or the full cash value as of the lien
       date. The property’s full cash value, as of the lien date, takes into
       consideration the reductions in value due to damage, destruction,
       depreciation, obsolescence, removal of property, or other factors causing a
       decline in value.

              “Revenue and Taxation Code section 110 defines ‘full cash value’ or
       ‘fair market value’ as the amount of cash or its equivalent that property
       would bring if exposed for sale in the open market under conditions in
       which neither buyer nor seller could take advantage of the exigencies of the
       other, and both the buyer and seller have knowledge of all of the uses and

                                             4.
      purposes to which the property is adapted and for which it is cable of being
      used, and of the enforceable restrictions upon those uses and purposes.

              “In response to Mr. Spjut’s assertion that his 2011 interspousal
      transfer should have been reassessed: Revenue and Taxation Code 63
      states, ‘a change in ownership shall not include any interspousal transfer,
      including, but not limited to: (c) Transfers to a spouse or former spouse in
      connection with a property settlement agreement or decree of dissolution of
      a marriage or legal separation, or (d) The creation, transfer, or termination,
      solely between spouses, of any co-owner’s interest. [¶ ] … [¶ ]

             “Based on the available comparable sales data in the subject’s
      neighborhood, the Assessor believes the subject property was not over-
      assessed as of lien date, and, per state law, the lesser of the two possible
      values (i.e. the subject’s factored base year value or fair market value) was
      correctly enrolled. No further reduction in value is warranted at this time.”
      In addition to the foregoing explanation in his appraisal report, Armstrong testified
that Spjut wanted the family court’s contingent award of the family residence to him in
2011 to count as a change of ownership, with a corresponding reassessment of the
property for property tax purposes. Armstrong noted this outcome was precluded by
applicable state law, which expressly provided that a transfer between spouses did not
constitute a change of ownership. Specifically, Armstrong testified:

              “The subject property is located in Northwest Bakersfield. It’s
      improved with a single family residence that was constructed in 1995. It
      has 2,009 square feet of living space. The construction quality is typical for
      the area that it is located in. And, the current base year value was
      established on May 23, of 2003. And as Mr. Graham said what is being
      contested today is the 2014 lien date evaluation which it was receiving, and
      is receiving, a discounted rate, a reduction under Proposition 8. I’ve
      included in my report here the four best comparable sales from the area that
      describe a range of value from $277,000 to $299,000. The Assessor’s
      original opinion of value for 2014 was $272,000, which is within 5% of
      what the Board of Equalization considers a significant variant. So, the
      Assessor is recommending no change. I wanted to just briefly address the
      applicant, what he at length contends in his application and also in our
      phone conversations, uh, is regarding a subsequent transfer [as to which
      the] applicable tax code – State Tax Code is very explicit. It’s not
      considered a change of ownership. So I wanted to briefly address that. It
      has to do with an interspousal transfer. So the applicable tax code,

                                            5.
       Revenue and Taxation Code Section 63 states: ‘A change of ownership
       shall not include any interspousal transfer, including, but not limited to,
       transfers to a spouse or former spouse in connection with a property
       settlement agreement or decree of dissolution of marriage or legal
       separation.’ Also the creation[,] transfer[,] or termination solely between
       spouses of any co-owner[’]s interests is deemed to not be a change of
       ownership. Again, I just mention that because that seems to be what the
       applicant is continuing with.”
       After Armstrong concluded his testimony before the Assessment Appeals Board,
Spjut testified on his own behalf. Spjut submitted a 2011 appraisal, prepared as part of
his divorce proceedings, as evidence of the value of the house; he also submitted various
documents from his divorce proceedings. Spjut argued the 2011 valuation of the house
should constitute its base value for property tax purposes, so he could take advantage of
the fact the property market had dropped, rendering the 2011 valuation lower than the
2003 purchase price of the house.
       One of the members of the Board addressed Spjut: “So let me see if I can
understand. Your argument is essentially that the transfer between you and your ex-wife
was a change of ownership as defined under the Revenue and Taxation Code. The
assessor’s indicated that that type of change of ownership is specifically exempt from
reassessment rules. Uh, so given that what the assessor’s pointed out, that there’s a
specific exemption in place under state law, I assume to prevent spouses from being able
to reset their Prop 13 value by divorce or by other types of ownership [transfers]. So
there’s this – appears there’s this specific law in place that directly addresses your
situation. What is it about that specifically that you don’t feel applies?” Spjut gave a
rambling response that did not address the question; Spjut basically said that Proposition
13 protected homeowners in times when property values were rising, “but that purpose
does not work in this kind of climate we’re in now.”
       The Board member then added: “So you bought the property. The Prop 13 value
was set. And there was no transfer until there was a transfer between spouses or pursuant
to dissolution of marriage. At that time, a transfer was made. At that time, state law

                                              6.
indicates that there’s no reassessment based on that type of transfer. I’m still struggling
to find [your point, given] how state law seems to squarely apply here. It seems like
you’re trying to find, uh, ways around application of what’s a pretty clear cut issue.”
Spjut responded: “Well to me it’s like a constitutional issue. It’s like there should be –
the idea that 63(c), I believe it is, is to provide a benefit for the spouse against the rising
market. Why not have that same benefit apply to me through those other statutes. Why
should I be barred from that? That’s just – I’m being denied a benefit – (unintelligible)
under the 14th Amendment of the Constitution.”
       A Board member subsequently raised the following point: “Although the divorce
may have been started in 2011 – uh, excuse me, 2011, the first document we have is an
interspous[al] transfer deed between you and your wife in September 2013.” Spjut
responded: “That’s correct.” The Board member observed that, given the date of the
deed, “the absolute first date [Spjut] could have done anything” was September 2013 not
2011, but, regardless of the transfer date, the transaction was “exempted from
reappraisal” because it was “part of a dissolution of marriage.” Another Board member
added: “We don’t get to apply [the law] differently when the market is rising or falling.
It’s just an absolute.” Spjut responded: “I’m just simply saying that the option of me
being able to – the fact that I went through that – the appraisal. I went through the
change in ownership and now you turn around and you’re kicking me away. Why can’t I
just use the change of ownership and have it set to the year I bought the house? 2011.”

C.     The Assessment Appeals Board Denies Spjut’s Challenge
       In written findings, the Board found in favor of the Assessor. The Board
summarized Spjut’s claims:

       “[Spjut] provided this Board with a written brief and attached documents
       and confirmed that his primary dispute is that the Assessor did not
       recognize the 2011 transfer as a change in ownership. He acknowledged
       that the 2011 transfer was part of his divorce. He also testified that he is a
       senior citizen who would qualify under California Revenue & Taxation

                                               7.
       Code section 69.5 for a transfer of the base year value, except that the 2011
       transaction is not recognized as a change in ownership. [Spjut] asked that
       the Board recognize that the intent behind California Revenue & Taxation
       Code section 63 was to provide tax relief when property is transferred
       between spouses. He asked that the 2011 transfer be considered a change
       in ownership, subject to reassessment.”
The Board also noted that Spjut “considers failure to recognize [this] 2011 transfer as a
change in ownership to be a violation of his constitutional rights … as he is being denied
a benefit (the ability to take advantage of the transfer of base value) offered to others.”
       The Board found: “The only competent evidence of value presented was the
comparable sales analysis provided by Mr. Armstrong on behalf of the Assessor. The
Applicant’s submission of a 2011 appraisal is not persuasive when discussing a 2014
valuation. Nothing presented by the Applicant contradicted the Assessor’s analysis. As a
result, this Board finds that the fair market value of the subject property is $272,000.”
       The Board further found:

              “This Board is legally unable to recognize a change in ownership
       due to the 2011 transfer of property from [Spjut’s] ex-wife to [Spjut]. This
       Board finds that California Revenue & Taxation Code section 63 states
       unequivocally:

              “Notwithstanding any other provision in this chapter, a change of
              ownership shall not include any interspousal transfer, including, but
              not limited to:

              “(a) Transfers to a trustee for the beneficial use of spouse, or the
              surviving spouse of a deceased transferor, or by a trustee of such a
              trust to the spouse of a trustor[;]

              “(b) Transfers which take effect upon the death of a spouse.

              “(c) Transfers to a spouse or former spouse in connection with a
              property settlement agreement or decree of dissolution of a marriage
              or legal separation, or

              “(d) The creation, transfer, or termination, solely between spouses,
              of any coowner’s interest.

                                              8.
              “(e) The distribution of a legal entity’s property to a spouse or
              former spouse in exchange for the interest of such spouse in the legal
              entity in connection with a property settlement agreement or a
              decree of dissolution of a marriage or legal separation.

              “Subdivision (c) specifically addresses the situation before us. The
       2011 transfer was part of the property settlement in the [Spjuts’] divorce.…
       Therefore the 2011 transfer is not considered a change in ownership. This
       Board is not the forum for a discussion of constitutional rights except to
       note that the state confers a conditional benefit on certain persons and
       conditional benefits are not unconstitutional per se.”
The Board concluded that “the currently enrolled value is correct and is supported by the
evidence.”
D.     Spjut’s Action for Refund of Property Taxes in the Kern County Superior Court
       Spjut then filed the instant action in the Kern County Superior Court seeking a
refund of property taxes. Among other claims, Spjut challenged the constitutionality of
Revenue and Taxation Code section 63, subdivision (c), on equal protection grounds,
under the federal Constitution. The trial court rejected Spjut’s constitutional claim and
dismissed the case. The court issued a statement of decision explaining its reasoning:

              “This matter proceeded to trial on June 11, 2020 before this court.
       The case had been bifurcated, and the legal issues were tried to the court on
       essentially stipulated facts. The case was tried in less than an hour. Neither
       side requested a Statement of Decision, but this court gives this Statement
       to provide context for its judgment.

              “The court hereby renders judgment for the Defendant and against
       the Plaintiff[.] The Plaintiff is to take nothing by way of his complaint.
       Defendant is entitled to their costs of suit incurred according to law.

              “The facts are not in dispute.

               “Plaintiff sues the County of Kern based on the Board of Supervisors
       and its Assessment Appeals Board’s failure to refund property taxes.… [¶ ]
       This case originates from Plaintiff’s November 29, 2014 Application for
       Changed Assessment pursuant to Revenue & Tax Code § 1603 before the
       Board of Supervisors, in which Plaintiff sought a change in his tax base
       year from 2003 to 2011. The Application was prompted by an increase in

                                               9.
Plaintiff’s property taxes when the County reassessed Plaintiff’s property
taxes … in 2013.

        “Plaintiff and his wife divorced in 2011. Pursuant to the marital
dissolution settlement (May 24, 2011), the marital home went to Plaintiff
(September 29, 2011). Plaintiff was required thereafter to refinance their
first loan in order to buy his ex-wife out of their second loan on the
property. Once Plaintiff refinanced the loan, title changed on September
29, 2013. When ownership transferred from Plaintiff and his wife to
Plaintiff in 2011, the home appraised for $182,000. The County reassessed
the value of the property [in 2013] at [$]272,000, generating a property tax
bill of $4,012.74.

       “Through his appeal Plaintiff sought a finding that a change of
ownership occurred in 2011, and requested that the base year of his taxes be
reassessed for that year at a value of $182,000. The County informed
Plaintiff that Revenue & Tax Code § 63 provides that any transfer between
spouses does not constitute a change in ownership [for this purpose].

        “In his Amended Complaint, Plaintiff purports to allege 10 causes of
action. Boiled down, Plaintiff alleges [the] County denied equal protection
of the law through its interpretation of Revenue & Tax Code § 63(c). More
specifically, he contended ‘that R&TC §63(c) was a ‘constitutional issue’
… and that he ‘was being denied a benefit’…and…that his ‘constitutional
rights are being violated[.]’ ” (Amended Complaint, ¶ 34.) He contends
Section 63 amounts to a denial of equal protection, depriving Plaintiff of
the benefits of a change of ownership in 2011, which would have afforded
him options in terms of tax benefits and/or protections.

        “Further, [Plaintiff alleges] the Board’s failure to inform Plaintiff
prior to the hearing that it did not have jurisdiction to determine that issue
violated his due process rights under 42 U.S.C. § 1983. Rather than
informing Plaintiff of this, [he alleges] the Board incorrectly proceeded
with the appeal of the decision pertaining to his Application for Changed
Assessment as one for a request for reassessment. Plaintiff alleges he did
not dispute the actual assessment, but rather the Board’s application of
Revenue & Tax Code § 63(c) to his property.

        “Plaintiff prays for a finding that (1) the Board’s narrow
interpretation of Tax & Revenue Code § 63(c) is unconstitutional pursuant
to 42 U.S.C. § 1983, (2) his base year for property taxes is 2011, (3) he is
entitled to a tax refund of $4,084 and payment of overpayments since filing
suit, (4) damages, costs, and punitive damages, and (5) a finding that he has
been denied due process.

                                      10.
               “Fundamental to Plaintiff’s entire case is the proposition that
       Revenue & Tax Code § 63(c) is unconstitutional. Plaintiff’s theory is that
       the distinction that exempts marital property transfers from reassessment
       upon change of ownership is a violation of equal protection, depriving him
       of a benefit available to others in a declining real estate market.

               “Plaintiff’s theory of unconstitutionality is simply wrong. ‘In the
       field of taxation, the states enjoy wide “latitude” ... in the classification of
       property ... and the granting of partial or total exemptions upon grounds of
       policy.’ (Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1281 .…) ‘So
       long as the system of taxation is supported by a rational basis, and is not
       palpably arbitrary, it will be upheld despite the absence of “ ‘a precise,
       scientific uniformity’ ” of taxation.’ (Amador Valley Joint Union High Sch.
       Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 234 …[;] Munkdale
       v. Giannini (1995) 35 Cal.App.4th 1104, 1114.)

              “The exclusion from reassessment afforded to marital transfers
       under [Revenue and Taxation Code] section 63 fulfills a fundamental state
       interest in removing tax barriers to typical marital property transfers.
       Generally speaking, the exclusion benefits taxpayers, because it prevents
       taxation in rising real estate markets. There are times, in unusual declining
       markets, as occurred here, where the taxpayer hopes for a reassessment in
       order to lower the tax burden. This is not grounds to declare the section
       unconstitutional. The law meets the ‘rational basis’ test.

               “Therefore, all of Plaintiff’s other theories of liability fail. He was
       not denied due process by the Board’s failure to hear his constitutional
       challenge. Because the constitutional challenge is not valid, he suffered no
       injury.

               “There is no other issue to be determined by this court or by a jury
       on the basis of the bifurcation. The court’s decision here is plenary.
       Actions for tax refunds cannot be tried before a jury. A suit for legal relief
       pursuant to 42 U.S.C. § 1983 is an action at law which might otherwise
       give rise to trial by jury, but, since the court has found no legal basis for the
       constitutional challenge, there is nothing further for any jury to decide.

             “All other defenses offered by the Defendants are essentially moot.”
       (Fn. omitted.)
       The trial court entered judgment in favor of defendants. Spjut appealed following
the entry of judgment in the trial court.

                                              11.
                                      DISCUSSION
       Spjut raises three issues on appeal, each of which we address seriatim below.
Finding no merit to any of the three issues, we affirm the judgment of the trial court.
I.     Spjut’s Constitutional Claims

       A. Spjut’s Marital Status Had No Bearing on His Eligibility for Property Tax
          Relief Under Revenue and Taxation Code Section 69.5, Subdivision (a)(1)
       Spjut argues: “Appellant’s claim is that he was denied certain tax benefits based
solely on his status as having been married. Absent Appellant’s marriage classification,
he would have been eligible to obtain the homeowner’s exemption under subdivision (k)
of Proposition 13. (Revenue & Tax Code § 69.5(a)(1).)” (Italics added.) We reject this
contention.
       Revenue and Taxation Code section 69.5, subdivision (a)(1), provides:

              “Notwithstanding any other provision of law … any person over the
       age of 55 … who resides in property that is eligible for the homeowners’
       exemption … may transfer, subject to the conditions and limitations
       provided in this section, the base year value of that property to any
       replacement dwelling of equal or lesser value that is located within the
       same county and is purchased or newly constructed by that person as his or
       her principal residence within two years of the sale by that person of the
       original property, provided that the base year value of the original property
       shall not be transferred to the replacement dwelling until the original
       property is sold.” (Italics added.)
       Revenue and Taxation Code section 69.5, subdivision (d), clarifies that “[t]he
property tax relief provided by this section shall be available to a claimant who is the
coowner of the original property, as a joint tenant, a tenant in common, a community
property owner, or a present beneficiary of a trust,” subject to certain specified
limitations. Among the limitations specified in Revenue and Taxation Code section 69.5,
subdivision (d), is the following: “If two or more replacement dwellings are separately
purchased or newly constructed by two or more coowners and more than one coowner
would otherwise be an eligible claimant, only one coowner shall be eligible under this

                                             12.
section. These coowners shall determine by mutual agreement which one of them shall
be deemed eligible.” (Rev. & Tax. Code, § 69.5, subd. (d)(2).)
       Revenue and Taxation Code section 69.5, subdivision (a)(1) is not applicable to
the instant scenario by its express terms, as it clearly requires the sale of the original
property and acquisition of a replacement property. Spjut and his ex-wife had owned the
house in question as joint tenants, and the relevant transaction concerned the transfer, to
Spjut, of his ex-wife’s 50 percent interest, but did not affect Spjut’s own 50 percent
interest in the property. Thus, Spjut retained ownership of the original property all along;
he did not sell it and acquire a replacement dwelling. Based on the nature of the
transaction at issue, Spjut was not eligible for property tax relief under Revenue and
Taxation Code section 69.5, subdivision (a)(1).
       Spjut’s argument that, “[a]bsent [his] marriage classification, he would have been
eligible to obtain the homeowner’s exemption” under Revenue and Tax Code section
69.5, subdivision (a)(1), is specious. Revenue and Taxation Code section 69.5,
subdivision (a)(1), provides property tax relief to any qualifying coowner of property,
regardless of his or her marital status, when the coowner sells one property and buys
another one within the limitations specified in the statute. Spjut’s marital status had no
bearing on his eligibility for property tax relief under Revenue and Taxation Code section
69.5, subdivision (a)(1).
       B. The Trial Court’s Application of the Rational Basis Test Was Not Error
       Spjut next argues:

              “The court below mistakenly applied the rational basis test to the
       constitutional questions raised by Appellant. [¶ ] … [¶ ] Appellant’s equal
       protection claim challenge to Revenue & Tax Code § 63 stems from his
       disparate treatment based on his marital status. The U.S. Supreme Court
       has applied an intermediate level of scrutiny to laws that classify
       individuals based on whether or not they are married. (See Clark v. Jeter
       (1988) 486 U.S. 456, 461; see also Sessions v. Morales-Santana (2017) 137
       S.Ct. 1678, 1700 n. 25 [noting that ‘[d]istinctions based on parents’ marital

                                              13.
       status, we have said, are subject to the same heightened scrutiny as
       distinctions based on gender’].)”
       Spjut further contends: “Accordingly, the court below should have applied [an]
intermediate level of scrutiny to Appellant’s constitutional challenge of Revenue & Tax
Code § 63 instead of the rational basis test. Thus, the Judgment and Order After Hearing
should be reversed and this action remanded so that the court below may reconsider
Appellant’s constitutional arguments while applying an intermediate level of scrutiny.”
We reject this argument as meritless.
       In general, any “transfer of a present interest in real property, including the
beneficial use thereof, the value of which is substantially equal to the value of the fee
interest,” constitutes a change in ownership, subjecting the property to reassessment.
(Rev. & Tax. Code, § 60.) There are, however, exceptions to this general rule. Revenue
and Taxation Code section 63, subdivision (c), for example, specifically excludes
transfers of real property made between spouses in connection with divorce proceedings,
from the range of transactions that constitute a “change of ownership” in terms of
requiring reassessment of the property for property tax purposes.
       Revenue and Taxation Code section 63, subdivision (c) provides:
“Notwithstanding any other provision in this chapter, a change of ownership shall not
include any interspousal transfer, including, but not limited to: [¶ ] … [¶ ] (c) Transfers
to a spouse or former spouse in connection with a property settlement agreement or
decree of dissolution of marriage or legal separation.”
       As reflected in the trial court’s statement of decision, Spjut’s operative complaint
alleged that Revenue and Taxation Code section 63, subdivision (c) violated the equal
protection guarantee of the federal Constitution insofar as the statute specifies that marital
property transfers effected in connection with divorce proceedings, do not constitute a
change of ownership, in terms of requiring reassessment of the property for property tax

                                             14.
purposes. The trial court analyzed Spjut’s claim by evaluating the statute under the
“rational basis” test and concluded the statute did not violate equal protection.
       Spjut argues on appeal that his equal protection challenge posited that Revenue
and Taxation Code section 63, subdivision (c) creates a discriminatory classification
based on “marital status,” which required the trial court to apply an “intermediate level of
scrutiny,” not the rational basis test, in evaluating whether the statute violated equal
protection. However, the authorities Spjut has cited for this proposition are inapposite,
and do not establish that intermediate scrutiny applies to Spjut’s claim.
       Spjut has cited Clark v. Jeter (1988) 486 U.S. 456, 461 and Sessions v. Morales-
Santana (2017) 137 S.Ct. 1678, 1700, fn. 25. Clark v. Jeter notes that “intermediate
scrutiny … generally has been applied to discriminatory classifications based on sex or
illegitimacy.” (Clark v. Jeter, supra, at p. 461 [intermediate scrutiny may apply to
classifications that “burden illegitimate children” (italics added)].) Clark v. Jeter does
not address classifications based on marital status in the context of tax schemes or in any
other context, and therefore does not help Spjut. Spjut’s citation to Sessions v. Morales-
Santana, supra, 137 S.Ct. at p. 1700, fn. 25, is similarly unavailing, as it cites Clark v.
Jeter in noting that distinctions based on illegitimacy (“parents’ marital status”) and
“gender” are subject to intermediate scrutiny.
       Accordingly, we decline Spjut’s invitation to remand the matter for the trial court
to reconsider his “constitutional arguments while applying an intermediate level of
scrutiny.”
II.    The Trial Court Provided Appropriate Guidance to the Parties
       In a confusing argument, Spjut complains the trial court provided confusing
directions as to how the case would proceed. We disagree.
       Spjut’s main complaint appears to be that the trial court bifurcated the trial to hear
issues of law first, but then dismissed the case after deciding the issues of law. Spjut

                                             15.
contends the trial court did not make sufficiently clear, in advance, the format it
ultimately followed.
       However, the record shows the court repeatedly explained to Spjut the format it
intended to follow. At a pre-trial hearing held on January 17, 2020, on the defendants’
motion to proceed to trial without a jury, the court explained how it intended to handle
the case:

       “THE COURT: This is Defendant’s Motion to Proceed to Trial Without a
       Jury as a Bench Trial.

              “This is a complaint that is very difficult to file. I mean, to follow.
       I’m inclined to deny the motion for a bench trial without prejudice. I’m
       inclined – I think the matter should essentially be bifurcated. There are
       legal questions that have to be answered by the Court. But once I answer
       them, one way or the other, that determines, I think, whether there is any
       further proceedings to be had in front of a jury.

             “So I’m inclined to treat the motion in that fashion, deny it as a
       motion to completely eliminate the jury, but there are legal questions.

              “The reason I would deny the motion outright is because the way the
       matter is pleaded, and it hasn’t otherwise been addressed by dispositive
       motion, there may be matters, for instance, the allegations under 42 U.S.C.
       Section 1983[,] that may require a jury trial.”
The court indicated in this exchange that, upon bifurcation, the first hearing would be on
legal issues, and that it could potentially be dispositive.
       The issue was addressed again at a later point in the same January 17, 2020
hearing:

              “MS. BRADLEY [counsel for defendants]: Your Honor, the County
       has no objection to bifurcate the matter to decide the issue of law. What
       I’m concerned about is under the California statutes the Assessment
       Appeals Board is the finder of fact in tax matters. And that duty cannot be
       passed on to a jury. So I’m concerned with that. But I’m more than willing
       to bifurcate on the legal issues and get that out of the way.

               “THE COURT: Right. But if you’re right and I decide in your
       favor, then that would conclude the matter.

                                              16.
                  “MS. BRADLEY: Agreed.

               “THE COURT: Mr. Spjut, I’m inclined to follow my own reasoning
       in this matter, preserve your right to jury trial but bifurcate and hear the
       legal questions first. Do you understand that?

                  “MR. SPJUT: Yes, I do, Your Honor.

              “THE COURT: All right. Well, that will be the order of the Court.”
       [¶ ] … [¶ ]

             “MR. SPJUT: Okay. My only question then, Your Honor, is, see, I
       was having to prepare the jury instructions.

                  “THE COURT: No, I’m going to bifurcate, so you don’t need to do
       that.

                  “MR. SPJUT: Right. That’s right. But for the other part of the
       trial --

               “THE COURT: Right. Well, I’ll handle that at the time of trial.
       Because what I’m likely to do is I’m bifurcating so we’ll try the questions
       for the Court first. And then, depending on how I decide, I’ll set another
       date--

                  “MR. SPJUT: Okay.

           “THE COURT: -- for potential jury trial and we’ll proceed in that
       way….”
       This record reflects the court kept Spjut informed and made sure he understood the
nature of the proceedings. Nor are we persuaded that the court mishandled other aspects
of the proceedings and thereby prejudiced Spjut.
III.   Step Transaction Doctrine
       Finally, Spjut contends the trial court abused its discretion in failing to consider
Spjut’s argument that the step transaction doctrine “should have been applied to
determine that a change in ownership occurred on September 29, 2011.” The step
transaction doctrine is utilized when circumstances warrant “ ‘combin[ing] a series of
steps into one transaction for tax purposes.’ ” (Shuwa Investment Corp. v. County of Los
Angeles (1991) 1 Cal.App.4th 1635, 1650 (Shuwa).)

                                              17.
       Spjut describes the “step transaction doctrine” as follows:

               “The Step Transaction Doctrine determines the transfer of ownership
       based on the actual substance of the transaction. ([Shuwa, supra, 1
       Cal.App.4th at p. 1648.].) Three tests are used to determine change in
       ownership under the doctrine – the end result test, interdependence test, and
       binding commitment test. (Id. at 1650-1652.) ‘Under the “end result test,”
       purportedly separate transactions will be amalgamated with a single
       transaction when it appears that they were really component parts of a
       single transaction intended from the outset to be taken for the purpose of
       reaching the ultimate result.’ (Id. at 1650.) The interdependence test
       ‘concentrates on the relationship between the steps and [asks] whether one
       step would have been taken without any of the others.’ (Id. at 1652). The
       binding commitment test is used ‘if one transaction is to be characterized as
       a “first step” [and] there [is] a binding commitment to take later steps.’
       ([Ibid.].)”
       The substance of Spjut’s argument regarding the step transaction doctrine is
essentially one paragraph long, as follows:

               “If the Board used any of the tests under the step transaction doctrine
       to determine Appellant’s appeal, it would have found that change of
       ownership occurred on September 29, 2011. That was the date Appellant
       and his ex-wife entered into a stipulated agreement in open court. He
       essentially had possession and ownership of the residence on that date.
       Appellant and his ex-wife clearly intended that Appellant would take
       possession and ownership of the residence on September 29, 2011.
       Thereafter, Appellant’s ex-wife was required, under their agreement, to
       take later steps so that Appellant could refinance the home, and the deed
       could be recorded. Those acts can be characterized as merely ministerial.”
       Spjut’s argument that the trial court committed reversible error in failing to apply
the step transaction doctrine is unavailing. Spjut’s argument fails to account for the fact
that the transfer of ownership at issue here occurred between former spouses, in
connection with a divorce judgment. The step transaction doctrine may be relevant for
purposes of identifying when Spjut’s ex-wife effectively transferred her interest to Spjut.
However, application of the doctrine would not change the fact that the transfer was
made between former spouses in connection with a divorce judgment. Accordingly,
application of the step transaction doctrine would not remove the transaction from the

                                              18.
purview of Revenue and Taxation Code section 63, subdivision (c), under which
provision there was no transfer of ownership for purposes of property tax reassessments.
       Since Revenue and Taxation Code section 63, subdivision (c) applies here
regardless of the application of the step transaction doctrine, we decline to remand the
matter, as requested by Spjut, “for further consideration with instructions to conduct a
Step Transaction analysis to determine whether a change in ownership occurred.”
       Finally, we note that, to the extent Spjut raises new arguments for the first time in
his reply brief, such arguments are rejected as improperly raised. (See People v. Tully
(2012) 54 Cal.4th 952, 1075 [“It is axiomatic that arguments made for the first time in a
reply brief will not be entertained because of the unfairness to the other party.”].)
                                      DISPOSITION
       The judgment is affirmed. Each party to bear its own costs on appeal.

                                                                                   SMITH, J.
WE CONCUR:

POOCHIGIAN, Acting P. J.

DE SANTOS, J.

                                             19.