Armstrong-Trotwood, LLC v. State Tax Comm'n of Mo.
| Decision Date | 20 December 2016 |
| Docket Number | No. ED104000,ED104000 |
| Parties | ARMSTRONG-TROTWOOD, LLC, et al., Appellants, v. STATE TAX COMMISSION OF MISSOURI, et al., Respondents. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of St. Louis County
Hon. Joseph L. Walsh, III
This is an appeal from a judgment of the Circuit Court of St. Louis County, which, on review, affirmed decisions of the State Tax Commission ("STC") and the St. Louis County Board of Equalization ("BOE"). The case involves allegations that the STC failed to properly equalize real property valuations among counties resulting in discriminatory tax assessments for several tracts of land located in St. Louis County as compared to similarly-situated properties located in other counties but within the same multi-county taxing jurisdictions.
Seven Appellants, Armstrong-Trotwood, LLC, Armstrong-Brittany, LLC, Armstrong-Arbor Village, LLC, Robert S. Rothschild, Susan H. Rothschild, Geiger Real Estate, Inc., Josh & Elaine, LLC (collectively "Landowners"), appeal from the circuit court's judgment dismissing all five counts of their petition, seeking: judicial review of a contested case before the STC, which dismissed the Landowners' property tax appeals for lack of jurisdiction (Count I); judicial review of a non-contested case before the STC, which dismissed the Landowners' challenge to the inter-county equalization for lack of jurisdiction (Count IV); and a declaratory judgment that the STC failed to properly conduct inter-county equalization of property valuations (Count II).
We find this Court lacks jurisdiction over this case because the issues involve the "construction of the revenue laws of the state," which is within the exclusive jurisdiction of the Supreme Court of Missouri pursuant to Article V, § 3 of the Missouri Constitution. We therefore transfer this case to the Supreme Court under Article V, § 11.
FACTUAL AND PROCEDURAL BACKGROUND
Because this is an appeal from the grant of Respondents' motions to dismiss for failure to state a claim, we accept as true all well-pled allegations in Landowners' petition and liberally grant it all reasonable inferences drawn therefrom. Mo. Am. Water Co. v. Collector of St. Charles Cnty., 103 S.W.3d 266, 268 (Mo. App. E.D. 2003).
Landowners own properties located entirely in St. Louis County. Their land also falls within several multi-county taxing jurisdictions that include parts of Jefferson County and Franklin County. They allege that the assessors in Jefferson and Franklin counties were systematically undervaluing properties in those counties, including properties within their multi-county taxing jurisdictions.
Landowners each timely filed an appeal of their 2011-2012 property tax assessment with the St. Louis County Board of Equalization ("BOE") alleging that their assessments were discriminatory and raising issues of inter-county equalization. They argued that, although the valuations of their properties were accurate, their assessments were nonetheless discriminatory because the assessments and property valuations were not equalized among all the properties within the territorial limits of the multi-county taxing jurisdictions in which their properties arelocated. These multi-county taxing jurisdictions included the St. Louis Community College District, Special School District of St. Louis County, Rockwood School District, and the Eureka Fire Protection District. The Landowners provided appraisal ratio studies showing that "St. Louis County has a substantially higher appraisal ratio placed on the property on its tax roll than do the jurisdictions in Jefferson County and St. Louis City." Landowners argued that their admittedly correct assessments were discriminatory because "this property and others in St. Louis County are forced to bear a disproportionate share of the cost of operating the above enumerated taxing jurisdictions, while owners of undervalued property in Jefferson County and St. Louis City are paying less than their fair and lawful obligation."
Between September and December of 2011, the BOE sustained the Landowners' assessments. In June of 2012, Landowners timely appealed their cases to the STC. The cases were consolidated in June of 2012, but a hearing officer was not assigned to the case until almost two years later. In July of 2014, the hearing officer dismissed the appeals sua sponte, on the grounds that the STC lacked jurisdiction. The hearing officer reasoned the STC's jurisdiction is derivative of the BOE's jurisdiction. Thus, since the local BOE has no authority over issues of inter-county equalization, the STC also lacks authority to address issues of inter-county equalization in an appeal from the decision of a local BOE. In August of 2014, Landowners filed an Application for Review of the hearing officer's decision, which was affirmed by the STC in December of 2014.
In their orders dismissing the Landowners' petitions, both the hearing officer and the STC cited the uniformity clause of the Missouri Constitution, which states that:
Taxes may be levied and collected for public purposes only, and shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax.
MO. CONST. art. X, § 3 (emphasis added). The STC interpreted this clause to mean that "the authority levying the tax" was the "governing body of the county," and that the "territorial limits" is therefore the boundaries of the county itself. The STC then concluded, in the context of a multi-county taxing jurisdiction, the uniformity clause only requires equalization of assessment within the limits of each county and not within the entire tax district spanning multiple counties.
In January of 2015, the Landowners filed a petition in the Circuit Court of St. Louis County naming both the BOE and the STC as respondents, alleging five counts: judicial review of a contested case, alleging that the BOE and the STC both erred in dismissing their appraisal appeals (Count I); declaratory judgment, asking the court to declare that the Landowners' assessments are discriminatory and that the STC failed to perform timely and accurate inter-county equalization (Count II); mandamus, asking the court to order the STC to perform inter-county equalization and reduce Landowners' assessments to make them uniform with other properties in the multi-county taxing jurisdictions (Count III); judicial review of a non-contested case, alleging that the STC failed to perform timely and accurate inter-county equalization (Count IV); and certiorari, requesting that the court review the record for errors that cannot otherwise be reached by appeal or writ of error (Count V).
The BOE and the STC each filed motions to dismiss the Landowners' petition. The issues were briefed by all parties and a hearing was held, though no transcript was made of the oral arguments. The circuit court granted the motions to dismiss on the grounds that the Landowners' petition failed to state a claim, dismissed the petition with prejudice, and entered judgment in favor of the BOE and the STC on all counts. This appeal follows.
POINTS ON APPEAL
Landowners raise three points on appeal. In Point I, Landowners argue that the circuit court erred in dismissing Count I, seeking judicial review of a contested case for failure to state a claim because "the territorial limits of the taxing authorities in this matter span multiple counties, and the [STC] had a duty to equalize the taxes assessed against the plaintiffs' properties within the territorial limits of the authorities levying the tax, instead of dismissing the appeals." In Point II, Landowners argue that the circuit court erred in dismissing Count IV, seeking judicial review of a non-contested case for failure to state a claim because "the action of the [STC] in performing inter-county equalization for the 2011 tax year constitutes a decision of an administrative body which is not subject to administrative review and which determined the legal rights, duties or privileges of the [Landowners] within the meaning of [RSMo] § 536.150 [], and there is no other provision for judicial review of that [STC] action." In Point III, Landowners argue that the circuit court erred in dismissing Count II, seeking a declaratory judgment because "the action of the [STC] dismissing the [Landowners]' appeals, together with the failure of the [STC] to perform accurate inter-county equalization for the 2011 tax year, have created a justiciable controversy between the parties concerning the issues of whether the assessments for the [Landowners'] properties are discriminatory and not uniform, and the [Landowners] have no adequate remedy at law."
DISCUSSION
The fundamental argument at the heart of each of Landowners' points on appeal is that the STC erroneously interpreted Article X, § 3 of the Missouri Constitution when it concluded that "the territorial limits of authority levying the tax" in the context of a multi-county taxingjurisdiction is "the governing body of the county," rather than the boundaries of the school and fire districts levying the taxes.
Before addressing the merits, however, we must address this Court's jurisdiction. The Missouri Constitution grants exclusive appellate jurisdiction to the Supreme Court of Missouri "in all cases involving . . . the construction of the revenue laws of this state." MO. CONST. art. V, § 3; Twelve Oaks Motor Inn v. Strahan, 96 S.W.3d 106, 108 (Mo. App. S.D. 2003). When a case involving the construction of the revenue laws of the state is appealed to this Court, our Constitution requires the case to be transferred to the Supreme Court. MO. CONST. art V, § 11; see ABB C-E Nuclear Power, Inc. v. Dir. of Revenue, 215 S.W.3d 85, 86-87 (Mo. banc 2007) (transferred from the court of appeals under MO. CONST. art. V, § 11).
"Revenue law" is defined as a law that "directly creates or alters an income stream to the government . . . establishes or...
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