Facts

SST Investments LLC sued the City & County of San Francisco; CCSF Assessor-Recorder; and CCSF Tax Collector, seeking a transfer tax refund in connection with a property purchased in 2012.

PLAINTIFF'S CONTENTIONS: Plaintiff purchased the subject property in 2012 and recorded a declaration of restrictions and condominium plan for the building. In 2016, plaintiff sold the property and thereafter attempted to record the grant deed and related documents. The Assessor-Recorder's office, informed plaintiff that it owed transfer tax on the value of the building as a whole. Plaintiff claimed it should have been required to pay transfer tax on only the value of the separate condominium units ($171,521) and not for the value of the entire property ($625,000). Plaintiff also contended that defendants had previously permitted a similarly situated taxpayer to pay transfer tax on separate condominium units.

DEFENDANTS' CONTENTIONS: Defendants demurred, on the basis that the building had never been legally converted to condominiums because none of the units had been separately transferred.

Result

The court sustained the demurrer with leave to amend, finding that SST failed to state a cognizable claim for tax refund. SST filed an amended complaint adding a claim for promissory estoppel. Defendants demurred to the amended complaint, and the court sustained the second demurrer without leave to amend. The court found that SST failed to state a cognizable claim for promissory estoppel because the government cannot be prevented from collecting a proper tax.