8 Or. Tax 279 | Or. T.C. | 1980
Decision and Order for intervenor rendered January 29, 1980.
Reversed
Trial of the question of jurisdiction was heard on December 20, 1979. *281
The legal question presented is a common one, but some of the facts necessary to the legal conclusion are so unusual that, for greater clarity, the court has chosen to set out a chronological narrative.
The intervenor, Mt. Hood Meadows, Oreg., Ltd., (hereinafter referred to as Mt. Hood) leases the site of the Mt. Hood Meadows Ski Resort from the U.S. Forest Service and has improved the property by constructing ski lifts, parking areas and the buildings necessary to the business of a ski resort. Mt. Hood appealed to the Hood River County Board of Equalization from the assessed values placed upon the subject property by the county assessor for the six consecutive assessment dates, January 1, 1972, through January 1, 1977, and from the orders of the county board of equalization to the defendant, the Department of Revenue.
The department's hearing began on November 26, 1976, and was continued on September 7, 1977. At the request of the respondent, Hood River County, the Attorney General assigned, as counsel for the county, Alfred B. Thomas, an assistant attorney general who, for many years, has been associated with the Tax Division of the Department of Justice and has participated in many property tax cases. Richard T. Ligon, County Counsel for Hood River County, also participated, but left the employ of the county before the department's Order No. VL 78-48 was issued.
Apparently, a lengthy study of the testimony ensued. This is indicated by the date of issuance (February 7, 1979) of the department's Opinion and Order No. VL 79-48. It may be explained by the number of tax years and the intricacies of the problems involved.1
In his opinion, the Deputy Director of the Department of Revenue compared and adjudicated specific *282 conflicting positions of the individual appraisers who testified on behalf of the petitioner, Mt. Hood (Mr. Kane), and the respondent, Hood River County (Mr. Kenney), as follows:
1. Mr. Kane's upward adjustment to gross income to account for anticipated future economic growth of the facility was approved, "in accord with petitioner's estimates set out on Exhibits 1 and 3."
2. The experts disagreed on the amount of annual expenses deductible in the use of the income approach to value. Mr. Kenney assigned operating expense ratios of 62 percent for the years 1972 through 1975 and 64 percent for the years 1976 and 1977. Mr. Kane used the same expense data as Mr. Kenney but "stabilized" expense estimates at 72 percent for 1972 and 1973, 70 percent for each of the years 1974, 1975 and 1976, and 72.3 percent for 1977. The deputy director found Mr. Kane's conclusions to be better supported and adopted them.
3. The principal area of dispute between Mr. Kane and Mr. Kenney was the selection of the appropriate rate of capitalization. (As is well known, even slight variations in the rate can cause dramatic swings in the valuation result.) After study, the deputy director approved the work of Mr. Kenney (described in detail on pp 7-9 of the opinion, VL 79-48).
The deputy director then concluded:
"Having considered the entire record together with the exhibits incorporated therein, the hearing officer finds, and I agree, that the true cash values for the subject property must be set in accord with the valuation method advanced by Mr. Kenney, except for the modifications to gross income and operating expenses as hereinabove determined. Within 30 days after issuance of this order, respondent [Hood River County] shall forward to petitioner [Mt. Hood Meadows, Oreg., Ltd.] its computations pursuant to the findings set out above. If the parties agree on the result determined, respondent must then proceed to refund any overpaid tax, with *283 interest, pursuant to ORS
311.806 and311.812 . If the parties are unable to agree, petitioner must file and serve a computation believed to be in accord with the decision herein. The hearing officer may then require written or oral argument to aid him in resolving the disputed computation." (Emphasis supplied.)
Following the date and signature of the deputy director, the department's stock form of notice of the statutory time for appeal was appended to the order. It reads:
"Note: If you are dissatisfied with this decision, you may appeal it to the Oregon Tax Court within 60 days of the date of mailing shown above. ORS
305.560 ."
It is also important to note that ORS
[1.] "(4) * * * Subject to judicial review by the Oregon Tax Court and the Supreme Court, the order shall determine finally all the questions of law and fact arising in the appeal under the tax laws of the State of Oregon. * * * The order is binding upon the taxpayer, all county officers and all other persons affected thereby until reversed or modified upon review by the Oregon Tax Court." (Emphasis supplied.)
If the county had carried out the department's order, as it was lawfully bound to do (State ex rel v. Smith et al.,
Mt. Hood's complaint alleged:
"V. To date, computations have not been made [by Hood River County], filed and served upon Plaintiff as provided by defendant's Opinion and Order [No. VL 79-48]."
The complaint then prayed for an order of the court, requiring defendant, forthwith, to make or cause to be made the computations required by its opinion and order.
The testimony reveals that after the copy of the complaint in No. 1320 was served on the Department of Revenue, Mr. Thomas obtained from Mr. Kenney, the county's expert witness (who had been "loaned" to the county by the Department of Revenue), three pages of calculations, prepared in accordance with the department's Order No. VL 79-48. Mr. Thomas then mailed a copy to Mr. Hiefield, counsel for Mt. Hood Meadows, who received them on April 6, 1979, and turned them over to Mr. Kane, the taxpayer's controller. Then, on April 20, 1979, Mr. Thomas filed an answer in No. 1320, as counsel for the department, denying plaintiff's paragraph V, putting plaintiff to the proof of its allegation that Hood River County had failed to carry out the department's order. It further appears that, upon receipt of the department's pleading, Mr. Hiefield assured Mr. Thomas that Mr. Kenney's calculations accorded with Mt. Hood's understanding of Order No. VL 79-48 and were acceptable to Mt. Hood. Thereupon, the department took an unusual step. Over the signature of its deputy director, under date of April 23, 1979, it issued "Opinion and Order No. VL 79-48A" (emphasis supplied), using the caption in Order No. VL 79-48 and utilizing Mr. Kenney's computations, as follows:
[2.] "WHEREAS the Department, in its Order # VL 79-48, found that the true cash value of Mt. Hood *285 Meadows Ski Resort must be set in accord with the valuation method advanced by respondent's witness except for certain modifications to gross income and operating expenses as detailed in the order; and
"Respondent was directed to serve upon petitioner its mathematical computations [emphasis supplied] giving effect of the findings set out in the order; and
"Petitioner having agreed that the respondent's calculations properly reflect and incorporate the Department's findings, the true cash value of the Mt. Hood Meadows Ski Resort must be set as follows: [the computations set out in intervenor's Amended Complaint in the present suit, 2,3].
"IT IS HEREBY ORDERED that the Assessor and Tax Collector of Hood River County take such steps as are necessary to amend the assessment and tax rolls in conformance with this decision. If petitioner has paid taxes in excess of those required by the rolls, as amended, the excess, with statutory interest thereon, shall be remitted to Petitioner by the Board of Commissioners of Hood River County pursuant to ORS
311.806 and311.812 .
"IT IS SO ORDERED."
It should be noted that this document also contained the stock paragraph or "note" (quoted supra), ordinarily used by the Department of Revenue in its orders, calling attention to the 60-day limitation on an appeal to the Oregon Tax Court.
Following the issuance of Order No. VL 79-48A on April 23, 1979, Messrs. Hiefield and Thomas, on May 2, 1979, filed a "Stipulated Order of Dismissal" of Tax Court No. 1320, which was executed by the court on that day and the file was closed.
It would seem that this should have settled the question of true cash value for the years involved in Order No. VL 79-48; however, on June 19, 1979, Hood River County, utilizing new counsel, filed a complaint in this court (Tax Court No. 1336) and sought to appeal from the department's Order No. VL 79-48A, contending that the true cash values of the subject property as *286 of the assessment dates in question should be substantially increased over the amounts approved by the deputy director for the department.
On July 5, 1979, inexplicably, the Department of Revenue, now represented by Mr. Thomas as counsel, filed an answer in No. 1336, in effect confessing judgment and praying the court to find the true cash value of the property to be as alleged by the plaintiff county in this suit! On the same day, a copy of the complaint was served by mail upon the taxpayer, Mt. Hood Meadows, and was received by the taxpayer on July 9, 1979.
[3.] On August 3, 1979, Mt. Hood filed a motion to appear as intervenor in the suit and on August 7, 1979, it filed its complaint in intervention. On the same day, it filed the intervenor's demurrer to the plaintiff's complaint, based on the question of jurisdiction. On August 9, 1979, the plaintiff county filed a memorandum in opposition to the demurrer. Hearing on the intervenor's demurrer was held on August 15, 1979. The demurrer was first sustained by the court but was subsequently denied on the showing of plaintiff's counsel that lack of jurisdiction was not patently revealed in the pleadings, requiring an affirmative allegation. Intervenor was allowed time to plead over and has done so.
The question now before the court is whether the complaint of Hood River County in the present case (No. 1336) was timely filed under the provisions of ORS
[4.] The explicit legislative intent of ORS
Perhaps it would have been wiser to have issued an order complete within itself.2 However, the department issued an order which, on its face, was intended to be final,3 and which this court deems final, as stated above. The court's conclusion that the specifications in the order were understandable by the parties to the appeal (through their counsel and expert witnesses) was confirmed by the testimony of the expert, Mr. Kenney, who made the recomputation which was approved and accepted by the taxpayer. Mr. Kenney's calculations were just what the deputy director sought. *288
[5.] The county failed to carry out its ministerial duty under VL 79-48 within the required 30 days. (The county's present counsel, Mr. Byers, contended that, practically, only Mr. Thomas and Mr. Kenney could easily have made the recomputation; he appeared to overlook the fact that these individuals represented the county and Mr. Thomas, as counsel,bound it.4 The court suggests that Mr. Kane was equally capable, but the duty was placed on the county.)
[6.] The department, as an administrative agency, had exhausted its jurisdiction to set values for the subject property for the assessment dates involved when it issued Order No. VL 79-48. No discretion was left to be exercised by it and it has no inherent power to change statutory procedures.5 It cannot grant a rehearing and it did not attempt to do so.6 If Hood River County had desired to appeal, it had 60 days after February 7, 1979, in which to act, ORS
The stock paragraph regularly used by the department as a "note" following the director's signature, reminding the parties of the 60-day limitation on an appeal to the Tax Court, was added to Order No. VL 79-48A. It had no place there and can be attributed to a mechanical use of instructions designed for the typical order; it was surplusage, considering the nature of this unique "order."
The court concludes that the date of issuance of "Order No. VL 79-48A" could not have added to the 60-day period of limitations prescribed by ORS
Accordingly, the intervenor's objection to jurisdiction must be sustained and, since it follows that the Tax Court does not have jurisdiction to try the appeal from Order No. VL 79-48A on the merits, Hood River County's complaint in case No. 1336 should be dismissed. Now, therefore,
IT IS ORDERED that the plaintiff's complaint should be and hereby is dismissed, with prejudice.
At the trial of December 20, 1979, in this court, Mr. Thomas was not clear whether he represented the county merely through the issuance of Order No. VL 79-48 or through VL 79-48A. He admitted that he had discussed with Mr. T. W. de Looze, his chief counsel, which of the two orders was "final" and that Mr. de Looze "indicated that the first order was final * * *." In the court's opinion, the counsel had a duty (Mr. Ligon having left the county's employment) affirmatively to act to advise the county on its appeal rights, including the applicable statute of limitations. Canon 6.
The court can give no legal effect to the department's "confession-of-judgment" answer in the pleadings in this case. Its use by Mr. Thomas, in Tax Court No. 1336, after the stipulated dismissal of Tax Court No. 1320, cannot be reconciled.
