Scripps Clinic & Research Found. v. County of San Diego

County of San Diego (County) appeals a summary judgment awarding Scripps Clinic and Research Foundation (Scripps) a refund of property taxes it paid to County. Scripps filed this action after County determined that a portion of Scripps’s property did not qualify for the property tax welfare exemption under Revenue and Taxation Code section 214 (exemption). On appeal, County contends the court erred because as a matter of law a portion of Scripps’s property was used for the benefit of a private company through the more advantageous pursuit of that company’s business, thereby disqualifying the property for the exemption under section 214, subdivision (a)(4). We hold that use of property by its owner pursuant to a contract with another person negotiated in good faith at arm’s length, the consideration for which is not greater to the other person than fair market value, does not disqualify the property from the exemption under section 214, subdivision (a)(4). We affirm the judgment.

Factual and Procedural Background

Scripps was incorporated as a nonprofit corporation in 1946. In 1961 Scripps formed Research Institute of Scripps Clinic (RISC) as an unincorporated division to…