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contractappealtrial

plaintiffdefendantappealtrial

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Stadium Concessions, Inc. v. City of Los Angeles, 60 Cal.App.3d 215, 131 Cal.Rptr. 442

Facts

Stadium Concessions, Inc. is the exclusive concessionaire at the Los Angeles Memorial Coliseum and Sports Arena, providing food and drink during events. The concessionaire operates under a contract with the Coliseum Commission, which has been renewed regularly since 1967. The county assessed the concessionaire's use of the facilities as a 'possessory interest' for tax purposes, leading to the concessionaire's action to recover taxes paid under protest for the years 1972, 1973, and 1974.

Plaintiff is the exclusive concessionaire at the Los Angeles Memorial Coliseum and the Los Angeles Sports Arena, providing food and drink to the public in attendance at the events staged at these facilities, including most of the widely attended local college football games.

Issue

Did the concession agreement between Stadium Concessions, Inc. and the Coliseum Commission create a taxable possessory interest?

Rule

A possessory interest is defined as possession of, claim to, or right to the possession of land or improvements, except when coupled with ownership of the land or improvements in the same person. The court must determine the existence of a taxable interest based on the totality of the contractual relationship, considering factors such as exclusivity, control, and the nature of the use.

The term, ‘possessory interests,’ is defined in Revenue and Taxation Code section 107 to mean ‘(a) Possession of, claim to, or right to the possession of land or improvements, except when coupled with ownership of the land or improvements in the same person.'

Analysis

The court analyzed the concession agreement and determined that it conferred more than a mere license to operate. The agreement allowed for permanent occupancy of the concession stands, which were accessible to both the concessionaire and the Commission. The exclusive nature of the concession, along with the control retained by the Commission, indicated that the concessionaire had a possessory interest that was subject to taxation.

We conclude that The Agreement confers upon plaintiff more than a naked right; it contemplates permanent occupancy by plaintiff of public improvements, I.e., concession stands, to which both plaintiff and the Commission have access by duplicate keys, during those times when plaintiff is performing the servicing function contemplated by the parties.

Conclusion

The Court of Appeal reversed the trial court's judgment in favor of the concessionaire, concluding that the concession agreement created a taxable possessory interest.

The judgment appealed from is reversed, with directions to the trial court to render judgment in favor of defendants.

Who won?

County of Los Angeles prevailed in the case because the Court of Appeal found that the concession agreement established a taxable possessory interest, contrary to the trial court's ruling.

Defendants have appealed from the judgment; we reverse, for the reasons herein stated.

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