Maricopa County v. TWC CHANDLER

• Decision Date: 03 October 2003
• Docket Number: No. TX 2003-000198.,TX 2003-000198.
• Citation: 77 P.3d 468,206 Ariz. 293
• Parties: MARICOPA COUNTY, v. TWC CHANDLER, et al.
• Court: Arizona Tax Court

77 P.3d 468

206 Ariz. 293

MARICOPA COUNTY, v. TWC CHANDLER, et al.

No. TX 2003-000198.

Tax Court of Arizona.

October 3, 2003.

Roberta S. Livesay, Helm & Kyle, Ltd, Counsel for Plaintiff.

Rex C. Nowlan, Assistant Attorney General, Paul J. Mooney, Fennemore Craig, P.C., Counsel for the Defendants.

UNDER ADVISEMENT RULING

PAUL A. KATZ, Judge.

The Court having taken Defendant Arizona State Board of Equalization's (the "SBOE") Motion to Dismiss and Defendant TWC-Chandler, L.L.C.'s ("TWC") Motion to Dismiss under advisement; having reviewed the memoranda of the parties and the legal authorities cited therein; and good cause appearing, enters the following Opinion,

Opinion

Nature of the case

This action involves three (3) of more than a dozen real estate parcels that make up the Chandler Fashion Center ("CFC"). Originally, the CFC consisted of two parcels, however the property owner/developer asked the Maricopa County Assessor (the "Assessor") on several successive occasions to split the parcels consistent with its development plan for this shopping center. Maricopa County (the "County") alleges the Assessor mistakenly crossed off the improvement values from the split/combining form for several parcels, which had the effect of showing no improvement values for those parcels. On September 11, 2002, the County mailed Notices of Proposed Correction on these three parcels of land owned by TWC (the "Subject Property"), proposing to correct what the County claimed was an "error" in the values assigned to the Subject Property and proposing to increase the values assigned to each of these parcels. TWC disputed the proposed correction and appealed the Assessor's decision to the SBOE. The SBOE issued its decision on February 7, 2003, upholding TWC's objection to the proposed error correction and reducing the values back to those originally determined for the Subject Property by the Assessor for the 2002 tax year. The SBOE eliminated all value associated with the existing improvements, effectively removing the improvements from the County tax roll, and valued the land only. On April 4, 2003, the County filed a complaint that was amended on April 24, 2003, appealing the SBOE's valuation decision and requesting declaratory relief regarding the SBOE's alleged failure to comply with the statutes and rules governing the listing of improvements on the tax roll for the Subject Property.

Issues

The County is seeking: 1) the Court's de novo review of the valuation of the subject properties, including the improvements, and 2) a declaration that the SBOE, in removing the improvements, acted without authority and in excess of its jurisdiction. The first issue is a matter routinely accomplished by the Court pursuant to A.R.S. § 42-16203, which usually results in de novo review of value without any comment on the legality of the SBOE's actions. The Court finds that the only way to effectively resolve the issue as to whether the SBOE has the authority to add or remove property after agency adjudication is by way of declaratory judgment relief.

Legal Discussion

The Court of Appeals in Estate of Bohn v. Scott, 185 Ariz. 284, 915 P.2d 1239 (App.1996), recognized the right to declaratory relief in tax matters but only when the action is not a challenge to the constitutional validity of a tax statute and only upon the exhaustion of all administrative remedies. In the case at bar, there is no challenge as regards the constitutionality of a tax statute and there is no requirement to exhaust administrative remedies before bringing a tax valuation appeal. Absent the taxpayer or the County having the right to seek review of claimed unlawful action of the SBOE by way of special action prior to the final administrative decision or by way of a declaratory action after the agency's final...