Acadian Props. Northshore, L.L.C. v. Fitzmorris

• Court: Court of Appeal of Louisiana
• Writing for the Court: CRAIN, J.
• Citation: Acadian Props. Northshore, L.L.C. v. Fitzmorris, 234 So.3d 927 (La. App. 2017)
• Decision Date: 01 November 2017
• Docket Number: NO. 2017 CA 0424,2017 CA 0424
• Parties: ACADIAN PROPERTIES NORTHSHORE, L.L.C. v. Louis FITZMORRIS, in his Capacity as St. Tammany Parish Assessor, Rodney J. Strain Jr., in his Capacity as Ex–Officio Tax Collector, and the Louisiana Tax Commission

234 So.3d 927

ACADIAN PROPERTIES NORTHSHORE, L.L.C.

v.Louis FITZMORRIS, in his Capacity as St. Tammany Parish Assessor, Rodney J. Strain Jr., in his Capacity as Ex–Officio Tax Collector, and the Louisiana Tax Commission

NO. 2017 CA 0424

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: NOVEMBER 1, 2017

Robert S. Reich, Lawrence R. Plunkett Jr., Metairie, Louisiana, Attorneys for Plaintiff/Appellant, Acadian Properties Northshore, L.L.C.

Patrick J. Berrigan, Slidell, Louisiana, Attorney for Defendant/Appellee, Louis Fitzmorris, in his capacity as St. Tammany Parish Assessor

Charles M. Hughes Jr., Mandeville, Louisiana, Attorney for Defendant/Appellee, Rodney J. Strain Jr., in his capacity as Ex–Officio Tax Collector

Robert D. Hoffman Jr., Covington, Louisiana Attorney for Defendant/Appellee, Louisiana Tax Commission

BEFORE: GUIDRY, PETTIGREW, AND CRAIN, JJ.

CRAIN, J.

This case involves a challenge to an ad valorem property tax assessment. The plaintiff appeals a summary judgment dismissing its petition with prejudice. Finding a procedural error, we vacate the summary judgment and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

Acadian Properties Northshore, L.L.C., owns an eight-acre parcel of land in St. Tammany Parish. Beginning in 2008, the property was assessed as "bona fide timberland," which meant its assessed valuation was determined based on the parcel's use value instead of its fair market value. See La. Const. art. VII, § 18 ; La. R.S. 47:2301 –09. In 2015, citing Acadian's efforts to develop the property for a shopping center, the St. Tammany Parish Assessor's Office notified Acadian the property did not meet the requirements for "timberland"; therefore, it was not eligible for the use value assessment. As a consequence, the Assessor sought additional taxes and penalties for several prior years in question, including 2012 and 2014.

Acadian responded by suing Louis Fitzmorris, in his capacity as St. Tammany Parish Assessor; Rodney J. Strain, Jr., in his capacity as the St. Tammany Parish Tax Collector; and the Louisiana Tax Commission. Acadian's petition focused on two claims: (1) for the 2012 assessment, the Assessor could not retroactively change the use value as qualified timberland and assess additional taxes for that tax year; and (2) for the 2014 assessment, the Assessor ignored the proper classification of the property as bona fide timberland. Acadian paid the 2014 taxes under protest and sought a refund of those taxes.

After the defendants answered, Acadian filed a motion for partial summary judgment challenging the validity of the "retroactive" 2012 assessment. The motion was set for hearing on November 21, 2016. Twelve days before the hearing, the Assessor filed an opposition to Acadian's motion and a "cross-motion for summary judgment," seeking dismissal of all of Acadian's claims. Relying on several alternative arguments, the Assessor maintained Acadian did not exhaust its administrative remedies, the property did not qualify for a use value assessment, and Acadian was statutorily barred from challenging the assessed value of the property due to its failure to timely contest the assessments.

The district court ordered Acadian to appear and show cause on December 20, 2016, why the Assessor's motion for summary judgment should not be granted. The order, which was apparently filed with the Assessor's motion, contained a type-written hearing date of November 21, 2016, but the signed order replaced that date with a hand-written date of December 20, 2016.

At the November 21, 2016 hearing on Acadian's motion for partial summary judgment, Acadian's attorney objected to the timeliness of the Assessor's opposition and requested that the opposition be stricken and opposing counsel be prohibited from presenting oral argument. Acadian's attorney noted, "[The Assessor] also filed something which is entitled a [cross] motion for summary judgment. It was not properly filed, it was not properly noticed, [and] it is not set for hearing today."

The district court denied Acadian's partial summary judgment motion and granted the Assessor's cross-motion. When Acadian's attorney objected that the Assessor's motion was not before the court, the district court said it would "suspend the rule of the Court and allow them to file late." A judgment was signed on December 14, 2016, denying summary judgment for Acadian, granting the Assessor's motion, and dismissing Acadian's petition with prejudice. Acadian appeals, arguing, in relevant part, the district court erred by granting summary judgment in favor of the Assessor.

DISCUSSION

Subject Matter Jurisdiction

The Assessor argues the district court lacked subject matter jurisdiction to hear this dispute. Consequently, before addressing the merits of Acadian's appeal, we must determine whether the district court had subject matter jurisdiction. If it did not, then this court likewise lacks jurisdiction, except to vacate the district court's judgment to correct the error in entertaining the suit. See Metro Riverboat Associates, Inc. v. Louisiana Gaming Control Board , 01-0185 (La. 10/16/01), 797 So.2d 656, 663 ; see also Motorola, Inc. v. Associated Indemnity Corporation, 02-0716 (La. App. 1 Cir. 4/30/03), 867 So.2d 715, 717(en banc).

Generally, suits contesting ad valorem assessments fall into one of two categories: (1) a "correctness" challenge, which must first be submitted to a board of review, then to the Louisiana Tax Commission and, after exhaustion of those remedies, the district court has appellate jurisdiction; and (2) a "legality" challenge, which is within the original jurisdiction of the district court. See La. Const. art. VII, §§ 3 (A) and 18 (E); La. R.S. 47:1992B(1), 1998A(1)(a), and 2134C(1); Gisclair v. Louisiana Tax Commission, 09-0007 (La. 6/26/09), 16 So.3d 1132, 1135 ; Triangle Marine, Inc. v. Savoie, 95-2873 (La. 10/15/96), 681 So.2d 937, 939. Therefore, the nature of a challenge to an ad valorem assessment determines which tribunal has original jurisdiction over the proceeding. See Gisclair , 16 So.3d at 1135.

In the absence of evidence introduced at a hearing, the allegations in the petition, considered in light of the applicable jurisprudence, determines whether the claim is a correctness challenge or a legality challenge. See Gisclair, 16 So.3d at 1138. Where the appeal record contains no reviewable evidence relative to jurisdiction, the factual allegations of the petition must be accepted as true. See Beasley v. Nezi, LLC, 16-1080 (La. App. 1 Cir. 9/8/17), 227 So.3d 308, 315 (2017 WL 3947889) ; State v. Illinois Central Railroad Company, 04-1789 (La. App. 1 Cir. 12/22/05), 928 So.2d 60, 68.¹ The jurisdiction question presented is whether the petition challenges the correctness of the assessment, or its legality. See Gisclair, 16 So.3d at 1138.

Acadian's allegations regarding the 2012 and 2014 assessments rely on the characterization of the property as "timberland." Specifically, the petition alleges:

The [p]roperty is and has at all pertinent times hereto been in full compliance with the bona fide timberland requirements of La. R.S. 47:2302. On or about November or December of 2012 trees on the property were cut for timber. On or about January of 2014, trees were replanted on the property, within the three year period required under the statute, maintaining its true status as bona fide timberland.

Specific to the 2012 assessment, Acadian alleges the Assessor sent a tax bill in April 2015 for the tax year 2012 that "does not reflect an assessment of the property as timberland which use it previously had been assessed." The petition further states:

V.

The tax assessor had no authority to retroactively change the Use Value of the property three years after the subject property was assessed as timberland. Such a retroactive change is in direct violation of La. R.S. 47:1966 and such retroactive taxation was and is illegal.

VI.

The property was assessed for use value as timberland in 2010, 2011, and 2012 and the tax bills were paid by Acadian. The assessor of St. Tammany Parish amended these bills and a penalty was erroneously added together with the deletion of use value. This is in direct violation of La. R.S. 47:2301 et seq.

For the 2014 tax assessment, Acadian alleges:

In addition to the improper 2012 retroactive tax assessed against the [p]roperty, [the] tax assessor's 2014 assessment of the property improperly denied the land use valuation that had been in place on the property for the previous seven years. The 2014 assessment ignores the proper classification of the [p]roperty as bona fide timber land pursuant to La. R.S. 47:2302... in violation of the statute.

Article VII, Section 18 of the Louisiana Constitution mandates that property subject to ad valorem taxation be listed on the assessment rolls at its "assessed valuation." In most instances, the assessed valuation is a stated percentage of the "fair market value" of the property. See La. Const. art. VII, § 18 (A). However, Section 18 provides an exception for "bona fide ... timber lands," which are assessed at "ten percent of use value rather than fair market value." See La. Const. art. VII, § 18 (C) (emphasis added). Section 18 more fully provides:

(C) Use Value. Bona fide agricultural, horticultural, marsh, and timber lands, as defined by general law, shall be assessed for tax purposes at ten percent of use value rather than fair market value. The legislature may provide by law similarly for buildings of historic architectural importance.

(D) Valuation. Each assessor shall determine the fair market value of all property subject to taxation within his respective parish or district except public service properties, which shall be valued at fair market value by the Louisiana Tax Commission or its successor. Each assessor shall determine the use value of property which is to be so assessed under the provisions of Paragraph (C). Fair market value and use value of property shall

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