20th Century Fiberglass v. Indiana State Bd. of Tax Com'rs

• Decision Date: 07 August 1997
• Docket Number: Nos. 49T10-9605-TA-00041,49T10-9605-TA-00045,s. 49T10-9605-TA-00041
• Citation: 683 N.E.2d 1376
• Parties: 20TH CENTURY FIBERGLASS, Petitioner, v. INDIANA STATE BOARD OF TAX COMMISSIONERS, Respondent.
• Court: Indiana Tax Court

Page 1376

683 N.E.2d 1376

20TH CENTURY FIBERGLASS, Petitioner, v. INDIANA STATE BOARD OF TAX COMMISSIONERS, Respondent.

Nos. 49T10-9605-TA-00041, 49T10-9605-TA-00045.

Tax Court of Indiana.

Aug. 7, 1997.

David L. Pippen, Curtis Dickinson, Dickinson & Abel, Indianapolis, for Petitioner.

Jeffrey A. Modisett, Attorney General, Marilyn S. Meighen, Deputy Attorney General, Indianapolis, for Respondent.

FISHER, Judge.

20th Century Fiberglass appeals the State Board of Tax Commissioners' final determination of its real property assessment for 1989 and 1990. Although several issues were raised by the parties, the Court finds the following to be dispositive:

I. Whether 20th Century's property tax consultant had the authority to appeal to the State Board.

II. Whether the alleged errors were properly appealed by a Form 133 Petition to Correct Errors.

FACTS AND PROCEDURAL HISTORY

20th Century owns real property in Elkhart County, Indiana. 20th Century appealed assessments for the years 1989 and 1990 by filing Form 133 Petitions with the County Board of Review on June 26, 1991. 20th Century stated that there were mathematical errors in computing the assessment in each year. Specifically, 20th Century claimed that the Perimeter to Area Ratio (PAR) was incorrectly computed, an improper base rate had been applied, and that an incorrect life expectancy table was applied to their property.

The County Board of Review denied 20th Century's Form 133 Petitions on July 5, 1991, and 20th Century timely appealed to the State Board. The State Board rejected 20th Century's petitions on March 19, 1996 and issued Final Assessment Determinations on each claim. 20th Century then timely appealed to this Court on April 29, 1996. Additional facts will be provided as needed.

STANDARD OF REVIEW

This Court gives the decisions of the State Board great deference, and their final determinations are reversed only when the decision is unsupported by substantial evidence, is arbitrary or capricious, constitutes an abuse of discretion, or exceeds statutory authority. Corey v. State Board of Tax Comm'rs, 674 N.E.2d 1062, 1064 (Ind. Tax Ct.1997).

DISCUSSION AND ANALYSIS

Power of Attorney

The threshold issue that this Court must address is whether 20th Century's tax consultant, Landmark Appraisals, had the authority to act on 20th Century's behalf. The State Board claims that Landmark failed to file a proper power of attorney as required by its regulations. See IND.ADMIN.CODE tit. 50 r. 4.1-1-20 (1988). However, the State Board's Final Assessment Determinations do not mention this as a reason for denying 20th Century's petition. At no time prior to appealing to this Court, in its Answer and Affirmative Defenses to 20th Century's petition, throughout the discovery period, or in its Contentions and Lists of Witnesses and Exhibits, did the State Board raise this issue. In fact, the State Board raised this issue--for the first time--during the week prior to trial before this Court. Tr. at 4.

As the Court's review is limited on appeal from the State Board, it is "necessary that written findings be before the [C]ourt." Stokely-Van Camp, Inc. v. State Bd. of Tax Comm'rs, 394 N.E.2d 209, 211, 182 Ind.App. 91, 94 (Ind.Ct.App.1979). There are no written findings before the court that pertain to this new issue. To be sure, there are unsigned letters, purporting to be requests for a power of attorney, in the administrative transcript filed by the State Board. But the actual determination by the State Board nowhere indicates that 20th Century's claim was being dismissed on the grounds that a power of attorney was not filed. In fact, the State Board's findings are entitled "Final Assessment Determination," which indicates that they are conclusive action on 20th Century's petitions. As this Court has previously held, the State Board "may not support its determination by referring to reasons which are not ruled on previously but which are offered as post hoc rationalizations." Scheid v. State Bd. of Tax Comm'rs, 560 N.E.2d 1283, 1284 (Ind.Tax Ct.1990) (citing Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S.Ct. 239, 245-46, 9 L.Ed.2d 207 (U.S.1962)).

Furthermore, a challenge to standing is an affirmative defense. As the State Board is the party seeking its benefit, it bears the burden of proof. IND. TRIAL RULE 8(C); Freedom Express, Inc. v. Merchandise Warehouse Co., 647 N.E.2d 648, 651 (Ind.Ct.App.1995). Additionally, the State Board is required by statute to notify a taxpayer of a defect in its petition and grant the Petitioner thirty days to cure any defect. IND.CODE ANN. § 6-1.1-15-4(b) (West 1989). The State Board failed to present any testimony or evidence sufficient to show that it complied with the trial rules or statute. In contrast, 20th Century provided this Court At trial, the State Board presented unsigned letters requesting powers of attorney for the Forms 133. Pet. Ex. B and C. The State Board, however, presented no evidence that those letters were ever mailed or that their contents were in any way communicated to the taxpayer or its representative. See F & F Const. Co. v. Royal Globe Insurance Co., 423 N.E.2d 654, 655-56 (Ind.Ct.App.1981) (requiring testimony from one with direct and actual knowledge to serve as proof of mailing). The State Board failed to present testimony from the author of the letter and the one witness presented by the State Board could not personally testify to the office procedure at the time the letters would have been mailed. Tr. at 30-31.

with testimony that it did not receive notice of any defect with its petitions prior to the week of trial. Tr. at 9.

Based on the State Board's failure to cite it as a reason in its findings, and based on the testimony given at trial, the Court finds that the State Board waived the issue of whether Landmark had the authority to represent 20th Century. However, it should be noted that the Court agrees with the State Board that powers of attorney are required to practice before them. The regulations are quite explicit in requiring the execution of a power of attorney "before any representative of [the State] Board may communicate with an individual other than the taxpayer." IND.ADMIN.CODE tit. 50, r. 4.1-1-20. 20th Century argues that since this requirement is found in the portion of the Administrative Code that deals with the assessment of tangible personal property (Article 4.1), it does not apply to the assessment of real property. In support of its contention, it cites this Court's opinion in Western Select Properties v. State Bd. of Tax Comm'rs, 639 N.E.2d 1068 (Ind.Tax Ct.1994).

In Western Select, this Court found that the State Board acted in an arbitrary and capricious manner when it used the same standard of proof for real property assessment that it uses for personal property obsolescence. 639 N.E.2d at 1073. In that case, the State Board was applying regulations written specifically for one type of property to another type of property that had its own specific regulations. In the instant case, the regulations in question clearly relate to the administration and procedure of the State Board. The fact that they are located under the rubric of tangible personal property is merely due to the inconcinnity of the regulations' drafting. A plain reading of Rule 1, located in Article 4.1, indicates that those provisions relate to all areas of taxation and not only to personal property. It is simply a bewildering placement of a procedural requirement--lost among a byzantine set of regulations.

As the Supreme Court has directed in regards...