Advanced Silicon Materials v. Grant County

• Decision Date: 08 December 2005
• Docket Number: No. 75641-4.,75641-4.
• Citation: 156 Wn.2d 84,124 P.3d 294
• Parties: ADVANCED SILICON MATERIALS, L.L.C., Respondent, v. GRANT COUNTY, Petitioner.
• Court: Washington Supreme Court

124 P.3d 294

156 Wn.2d 84

ADVANCED SILICON MATERIALS, L.L.C., Respondent, v. GRANT COUNTY, Petitioner.

No. 75641-4.

Supreme Court of Washington, En Banc.

Argued May 19, 2005.

Decided December 8, 2005.

Mr. Stephen John Hallstrom, Ms. Teresa Jeanne Chen, John Dietrich Knodell, Grant County Prosecutors Office, Ephrata, for Petitioner.

Mr. Norman J. Bruns, Mr. William Colwell Severson, Seattle, for Respondent.

Douglas P. Ruth, Lewis County Prosecutor's Office, Chehalis, for Amicus Curiae Washington Association of County Assessors.

Cameron Gordon Comfort, Olympia, for Amicus Curiae Washington State Department of Revenue.

FAIRHURST, J.

¶ 1 This case involves a property tax refund action involving the 2002 tax assessments for four real and personal property tax accounts owned by Advanced Silicon Materials, L.L.C. (ASiMI). ASiMI filed suit against Grant County for a refund of property taxes paid under protest in 2003 pursuant to RCW 84.68.020, alleging that Grant County imposed unlawful and excessive taxes on ASiMI's properties for the 2002 tax year. The superior court granted partial summary judgment to ASiMI on a key legal issue from which Grant County filed an interlocutory appeal directly with this court.

¶ 2 Grant County uses a four-year cyclical valuation system pursuant to RCW 84.41.041, meaning roughly one-fourth of the real properties within Grant County's authority are revalued for property tax purposes each year. ASiMI's real properties were last inspected and revalued in 1999. The assessed values of ASiMI's properties in the years 2000, 2001, and 2002 were based on the 1999 valuations. The issue before us is whether the superior court was correct in ordering that, despite the fact that under Grant County's cyclical revaluation system properties are only revalued once every four years, ASiMI should be allowed to establish a midcycle fair market value for its properties as of January 1, 2002. We reverse the superior court.¹

I. FACTS

¶ 3 At all times relevant to this lawsuit the Grant County assessor used a four-year revaluation cycle for real estate. Under this system, real properties were physically inspected and revalued once every four years, with no annual statistical updates between revaluations.² This plan was approved by the Department of Revenue. Personal properties were generally listed and assessed annually based on value as of January 1 of each assessment year.

¶ 4 In 2002, ASiMI had three real and one personal property tax accounts in Grant County. When assessments were made in 2002, the assessor had last revalued ASiMI's real properties in 1999. The 1999 values were carried forward to assessment years 2000, 2001, and 2002, altered only for physical additions and deletions.

¶ 5 ASiMI alleges that the 2002 real property assessment (based on the 1999 valuation) overshot the value of its properties as of January 1, 2002, by almost $200 million. It filed suit in Kittitas County Superior Court seeking a judgment against Grant County for a refund of taxes in the amount of $2,794,298.58.

¶ 6 ASiMI filed a motion for partial summary judgment asking the superior court to determine the correct appraisal date for the 2002 property tax assessment. ASiMI argued that resolution of this legal issue was necessary so that the parties could "prepare and present their valuation evidence as of the correct appraisal date." Clerk's Papers (CP) at 16. ASiMI contends that January 1, 2002, is the correct valuation date for the 2002 assessments, citing RCW 84.36.005 and RCW 84.40.020. The county, relying on its cyclical revaluation authority under RCW 84.41.041, argues that the correct valuation date was January 1, 1999—the date on which the property was last inspected and revalued under its four-year cycle.

¶ 7 The superior court granted partial summary judgment in favor of ASiMI and established January 1, 2002, as the proper valuation date for determining the validity of ASiMI's 2002 tax assessment. In its memorandum decision, the trial court ruled that "RCW 84.36.005 and RCW 84.40.020 require the assessment be based on the value of the property on January 1, 2002." CP at 199. As such, the trial court ruled that the county's valuation established in 1999 and carried forward to 2002

can be challenged and if plaintiff establishes by clear, cogent and convincing evidence that the value of its property on January 1, 2002 was less than that which was used by the Grant County Assessor for the assessment, the plaintiff will have sustained its burden to lower the valuation to the corrected value.

CP at 200.

¶ 8 The county moved this court for discretionary review of the superior court's order upon motion for partial summary judgment. ASiMI agreed in its response that review was appropriate under RAP 2.3(b)(4) because the order involves a controlling question of law as to which there is substantial ground for a difference of opinion, and immediate review may materially advance the termination of the litigation.

II. ISSUE

¶ 9 Where a county revalues real properties once every four years, but a property owner challenges a property tax assessment in a year in which the property is not revalued, what is the proper year the litigants must use to prove the true and fair value of the property at issue: the midcycle year in which the assessment is being challenged or the year the property was last revalued by the county?

III. ANALYSIS

¶ 10 The parties agree that the legal question presented in this case centers around the interpretation of and interplay between several statutory provisions, notably RCW 84.36.005, RCW 84.40.020, and RCW 84.41.030. We review de novo decisions based on statutory interpretation. Dep't of Ecology v. Campbell & Gwinn, L.L.C., 146 Wash.2d 1, 9, 43 P.3d 4 (2002). Our chief goal in analyzing and applying a statute is to give effect to the legislature's intent, "and if the statute's meaning is plain on its face then the court must give effect to that plain meaning as an expression of legislative intent." Id. at 9-10, 43 P.3d 4. The plain meaning of a statute "is discerned from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question." Id. at 11, 43 P.3d 4. If a statute might be accorded more than one reasonable meaning after this inquiry, "the statute is ambiguous and it is appropriate to resort to aids to construction, including legislative history." Id. at 12, 43 P.3d 4. "We avoid readings of statutes that result in unlikely, absurd, or strained consequences." Glaubach v. Regence BlueShield, 149 Wash.2d 827, 833, 74 P.3d 115 (2003).

RCW 84.36.005

¶ 11 Chapter 84.36 RCW, entitled "Exemptions," begins by articulating the general rule that all property is subject to taxation, absent a statutory exemption:

[a]ll property now existing, or that is hereafter created or brought into this state, shall be subject to assessment and taxation for state, county, and other taxing district purposes, upon equalized valuations thereof, fixed with reference thereto on the first day of January at twelve o'clock meridian in each year, excepting such as is exempted from taxation by law.

RCW 84.36.005. The chapter then goes on to list types of properties that are exempt from taxation, as well as the applicable standards and procedures for obtaining such exemptions.

¶ 12 ASiMI attempts to read into RCW 84.36.005 the requirement that real property tax be measured against the property's fair market value as of January 1 of each assessment year. But the statute is not about the proper measure of property tax; it provides the general rule that all property is subject to taxation unless a law specifically exempts it. Id. The phrase that ASiMI clings to, "fixed with reference thereto on the first day of January at twelve o'clock meridian in each year," simply provides the date on which the "equalized valuations" of property are assigned or "fixed." Id.; see also WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 861 (1993) (defining "fix" as, among other things, to "set or place definitely," or "to assign precisely: settle on: DETERMINE, DEFINE"); id. at 1414 (defining "meridian" as midday). The statute does not define what an "equalized valuation[]" of property is and how it is determined. The plain language of RCW 84.36.005 does not require counties to conduct annual valuations nor does it require midcycle assessments to be based on the fair market value of property on January 1 of each assessment year.

RCW 84.40.020

¶ 13 Chapter 84.40 RCW, captioned "Listing of Property," contains several provisions prescribing how counties should value different types of properties. It begins, however, with a rule regarding assessment. RCW 84.40.020 provides in relevant part that "[a]ll real property in this state subject to taxation shall be listed and assessed every year, with reference to its value on the first day of January of the year in which it is assessed." ASiMI relies on this language in RCW 84.40.020, which is similar to the language ASiMI relies on in RCW 84.36.005 for its proposition that midcycle assessments are required to be based upon the fair market value of property as of January 1 of that assessment year.

¶ 14 Like RCW 84.36.005, RCW 84.40.020 refers to the value of the property that was fixed or assigned to the property as of January 1 of each assessment year. It requires annual assessments — not annual valuations. RCW 84.40.020 says nothing of the basis on which the value of real property must be determined. See RCW 84.40.020; RCW 84.04.020 (defining "value" as the "`assessed value of property' as defined in RCW 84.04.030."); RCW 84.04.030 (defining "`[a]ssessed value of property'" as "the aggregate valuation of the property subject to taxation by any taxing district as placed on the last completed and balanced tax rolls of the county preceding the date of any tax levy."). Other provisions within chapter 84.40 RCW prescribe...