De-Annexation of Certain Real Property

Decision Date11 December 2007
Docket NumberNo. 102,524.,102,524.
Citation177 P.3d 551,2007 OK 95
PartiesIn re DE-ANNEXATION OF CERTAIN REAL PROPERTY FROM the CITY OF SEMINOLE, a Municipal Corporation Kinslow Round-Up Inc., an Oklahoma Corporation; Jack C. and Bonnie M. Humphreys Trust No. 1; 8:32, Inc., a Non-profit Corporation; D. Kircher Investments, L.L.C.; The CFS Insurance and Securities Money Purchase Plan and Trust; Gary and Linda Bloomer, HWJT's; Modern Oil Co., Inc.; Bobby J. Williams and Mary E. Williams Living Trust; Joe K. and Alyce Ellis, HWJT's; Billy G. Clark; Hazel Reynolds; Jim and Robin Norris (Landlord), Julia Bellini and Leslie Hinds (Tenants); Eugene and Francis Warrensberg; and Sue Jarvis, Petitioners/Plaintiffs/Appellants, v. The City of Seminole, a Municipal Corporation Respondent/Defendant/Appellee, and State of Oklahoma, ex rel., Oklahoma Tax Commission, Additional Defendant/Appellee.
CourtOklahoma Supreme Court

On Appeal from the District Court, Seminole County; George W. Butner, Trial Court.

¶ 0 Retail merchants who successfully challenged validity of annexation attempt by City of Seminole sought orders from trial court in post-remand proceeding granting refund of municipal sales tax revenues obtained by the City of Seminole by reason of annexation and also granting attorney's fees. The trial court denied both motions and merchants appealed. We find the trial court correctly determined it lacked subject matter jurisdiction of the refund request and that the city was statutorily immune from liability for attorney's fees occasioned by exercise of its legislative function.

ORDERS OF THE TRIAL COURT ARE AFFIRMED.

Michael J. Novotny, Hartzog, Conger, Cason & Neville, Oklahoma City, OK, for Appellants.

Ed Cadenhead, Elsener & Cadenhead, Seminole, OK, for Appellee City of Seminole.

Douglas Allen, General Counsel, Sean McFarland Assistant General Counsel, for Appellee Oklahoma Tax Commission.

EDMONDSON, V.C.J.

¶ 1 The questions before us are whether the trial court erred when it denied appellants' post-remand motions to: (1)order the City of Seminole to disgorge municipal sales tax revenues collected from annexed land and supervise the refund of those revenues to appellants who had successfully challenged the annexation; and (2)award appellants attorneys' fees and litigation costs for that challenge. We find the trial court correctly denied the motions as it did not have subject matter jurisdiction over the tax refund request and the City was immune from liability for payment of attorney's fees. We affirm the trial court's orders.

¶ 2 This is the second appeal involving the City of Seminole's unsuccessful efforts to annex certain territory into its city limits. In In re De-Annexation of Certain Real Property from the City of Seminole, 2004 OK 60, 102 P.3d 120, this. Court overturned the judicial declarations of the District Court and Court of Civil Appeals upholding the validity of the City's annexation of the subject property.

¶ 3 The essential facts of the underlying litigation follow. In December 1999 the City of Seminole (City) enacted Ordinance No. 917 which annexed the land in question into its city limits. Appellants, primarily retail merchants in the annexed territory, challenged the ordinance. First, they petitioned the City to de-annex the land; upon denial they appealed to the district court, contending among other things that the enactment of the ordinance had violated the Oklahoma Open Meeting Act, 25 O.S.2001, §§ 301-314, because the language of the agenda posted for the meeting was insufficient. The trial court found in favor of the protesting appellants on that issue and set the matter for hearing as to whether City's Open Meeting violation was willful. Before that question was decided, however, City gave new notice and enacted Ordinance 941 which, by its terms, vacated Ordinance 917 and de-annexed, and then re-annexed, the property involved.

¶ 4 Appellants then challenged the validity of Ordinance 941 in district court and amended their pleadings and motions for summary judgment to incorporate arguments initially raised against the validity of Ordinance 917. Appellants did not file a claim for refund before the Oklahoma Tax Commission. Instead, they added the Commission as a party defendant and brought a third-party claim against it seeking a judicial declaration of their entitlement to refund of the municipal sales tax revenues collected by City from the annexed territory.

¶ 5 The trial court gave summary judgment to City regarding the validity of Ordinance 941 and certified its order for immediate appeal pursuant 12 O.S.2001, § 994(A). Concerns regarding Ordinance 917 were not addressed. Appellants appealed that order and presented several arguments against the validity of Ordinance 941. They also submitted arguments against Ordinance 917, contending both enactments should be declared invalid because Ordinance 941 is directly dependent on Ordinance 917 which, allegedly, was adopted in willful violation of the Open Meeting Act. They argued City's annexation had failed to meet the statutory jurisdictional prerequisites, the municipal sales tax had therefore been illegally imposed and City should be ordered to disgorge the tax revenues it had received from the annexed area.

¶ 6 The Court of Civil Appeals affirmed the District Court's order upholding Ordinance 941. Appellants sought certiorari, which we granted. We found all issues concerning Ordinance 917 to be outside the purview of that appeal; however, we upheld the argument of appellants that the 3-foot-wide strip of land connecting the annexed territory to the existing city limits of Seminole did not satisfy statutory contiguity standards, and we declared Ordinance 941 subject to invalidation for that reason. Accordingly, we reversed the trial court's order, vacated the opinion of the Court of Civil Appeals and remanded the matter to the District Court with directions to declare the ordinance inefficacious. In re De-Annexation of Certain Real Property from the City of Seminole, 102 P.3d at 132.

¶ 7 In proceedings on remand, the trial court declared both Ordinance 917 and Ordinance 941 invalid. Having prevailed in their efforts to invalidate the annexation, the appellants, the retail merchants who collected the tax, sought to obtain the refund of those tax revenues by presenting the motions at issue asking the court's "supervision of the disgorgement and refund process, and for attorneys' fees and costs." The court denied both motions.

¶ 8 Appellants argue here, as they did below, that the trial court erred by refusing to properly exercise its "unlimited original jurisdiction of all justiciable matters" granted by Art 7, Sec. 7(a), of the Oklahoma Constitution. They complain the trial court wrongly deemed itself powerless to resolve these matters and instead ceded its jurisdiction to the Oklahoma Tax Commission. Appellants submit that only the district court can determine these refund issues because the Oklahoma Tax Commission is a tribunal of limited jurisdiction which cannot render the equitable resolution necessary here. Only a court, they submit, can reach the issues necessary to balance the equities among these parties under these particular facts.

¶ 9 Appellees, City of Seminole and the Oklahoma Tax Commission, contend that the trial court did lack subject matter jurisdiction over appellants' claim for refund of the tax revenue because the right to apply for a refund of municipal sales taxes and the remedy to enforce that right are statutory and the Oklahoma Tax Commission is the exclusive forum in which appellants could have pursued their refund quest. They argue that whether appellants are entitled to a refund or not, their request must be first addressed and decided by the Oklahoma Tax Commission, and that the district court properly denied judicial relief because the appellants failed to exhaust their administrative remedy.

¶ 10 We agree. Pursuant to the Oklahoma Municipal Taxation Code, 68 O.S. Supp.2003, §§ 2701-2706, any incorporated city or town is authorized to levy and collect a municipal sales tax. Title 68 O.S. Supp.2002, § 2702 provides that a municipality may then enter into a contractual agreement with the Oklahoma Tax Commission whereby the Commission will have all the powers of assessment, collection and enforcement and the Commission shall exercise those powers and remit the sales tax revenues to the municipality. Contracting municipalities are required to relinquish their administrative power over the control and enforcement of their taxes to the Commission, which will execute its administration and enforcement duties in the same manner it does regarding similar state taxes. Only in the event that an agreement specifically so provides, may municipalities administer a refund claim made by a taxpayer, and the agreement between the City of Seminole and the Commission did not so provide. Their agreement specifically states the Oklahoma Tax Commission will provide for the procedure and satisfaction of refund claims by taxpayers, as follows:

"The city agrees that refunds of city sales tax previously paid over to the city shall be paid from subsequent collections of the city sales tax. The Commission's determination of claims for refund shall be binding on the City."

¶ 11 The Uniform Tax Procedure Code, 68 O.S.2003, §§ 201-264, sets forth the procedures and remedies with respect to our tax laws and the administrative responsibilities of the Oklahoma Tax Commission in their enforcement. Its provisions govern resolution of the question of the proper forum for the refund claim at issue here.

Section 201 provides:

The purpose of this Article, which may be cited as the "Uniform Tax Procedure Code," is to provide, so far as possible, uniform procedures and remedies with respect to all state taxes. Unless otherwise expressly provided in any state tax law...

To continue reading

Request your trial
3 cases
  • Comanche Nation of Okla. v. Coffey
    • United States
    • Oklahoma Supreme Court
    • 17 Noviembre 2020
    ...20 (Tenn. 2020) (attorney fees incurred in determining the trial court lacked jurisdiction); see also In re De-Annexation of Certain Real Property from the City of Seminole , 2007 OK 95, ¶¶ 18-22, 177 P.3d 551 (reviewing the correctness of the trial court's order denying attorney fees after......
  • Indep. Sch. Dist. of Okla. Cnty. v. Hofmeister
    • United States
    • Oklahoma Supreme Court
    • 23 Junio 2020
  • Throneberry v. Wright
    • United States
    • Oklahoma Supreme Court
    • 9 Febrero 2021

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT