Berrum v. Otto

• Decision Date: 07 July 2011
• Docket Number: No. 54947.,54947.
• Citation: 127 Nev. Adv. Op. 30,255 P.3d 1269
• Parties: Bill BERRUM, Washoe County Treasurer, Appellant,v.Charles OTTO, Trustee of the Otto Family Trust; Todd Lowe, Trustee of The Lowe Family Trust; and V Park, LLC, A Nevada Limited Liability Company, for Themselves and On Behalf Of Similarly Situated Residential Property Owners and Taxpayers at Incline Village/Crystal Bay, Washoe County, Nevada, Respondents.
• Court: Nevada Supreme Court

255 P.3d 1269

127 Nev. Adv. Op. 30

Bill BERRUM, Washoe County Treasurer, Appellant,

v.Charles OTTO, Trustee of the Otto Family Trust; Todd Lowe, Trustee of The Lowe Family Trust; and V Park, LLC, A Nevada Limited Liability Company, for Themselves and On Behalf Of Similarly Situated Residential Property Owners and Taxpayers at Incline Village/Crystal Bay, Washoe County, Nevada, Respondents.

No. 54947.

Supreme Court of Nevada.

July 7, 2011.

Richard A. Gammick, District Attorney, and David C. Creekman, Deputy District Attorney, Washoe County, for Appellant.Morris Peterson and Suellen E. Fulstone, Reno, for Respondents.Before the Court En Banc.¹

OPINION

By the Court, HARDESTY, J.:

This appeal arises out of an ongoing conflict between Washoe County and taxpayers in Incline Village and Crystal Bay regarding property tax valuation, equalization, and collection.² In this appeal, we must determine whether the district court properly issued a writ of mandamus requiring the Washoe County Treasurer to refund excess taxes paid by the respondent Taxpayers for the 2006–2007 tax year. The Taxpayers paid the excess taxes because of a stay imposed in a pending appeal challenging a prior year's assessments. We conclude that the district court properly issued the writ of mandamus because the Taxpayers paid more than was due and typical administrative remedies to recover overpaid taxes do not apply where the Taxpayers were successful at all levels below. Additionally, the Treasurer had a duty to refund the excess taxes pursuant to NRS 360.2935.

FACTS

The Taxpayers are owners of real property situated near Lake Tahoe in Crystal Bay and Incline Village, Washoe County, Nevada. In January 2006, the district court concluded that the 2003–2004 property tax assessments for certain Incline Village and Crystal Bay properties were unconstitutional and ordered the Washoe County Assessor to roll back the tax valuations for those properties to 2002–2003 levels. The court also ordered a refund of any excess taxes that had been paid by the affected taxpayers while the case was pending.³ The Assessor appealed the district court's decision to this court, see State, Bd. of Equalization v. Bakst, 122 Nev. 1403, 148 P.3d 717 (2006), and in February 2006, we stayed enforcement of the district court's order pending our disposition of the appeal. Although no refunds could be granted during the pendency of our stay, our order explained that the County Board could continue to evaluate taxpayers' petitions seeking to roll back their tax valuations, so long as no rollbacks were implemented.

Shortly thereafter, in March 2006, the County Board issued a general equalization decision rolling back residential property tax valuations in the Incline Village and Crystal Bay areas. This time, however, the tax year at issue was 2006–2007; the Board, in an attempt to create an equal rate of taxation for the Incline Village and Crystal Bay property owners not affected by the previous decision to roll back tax valuations, decided to revert valuations to the 2002–2003 levels. As noted above, the stay order prevented enforcement of any rollbacks until disposition of the Assessor's earlier appeal in Bakst regarding the 2003–2004 tax values. The Assessor immediately appealed the County Board's decision to the State Board of Equalization, but the State Board deferred considering the issue because of the stay and because the Bakst case was still pending before this court.

The Bakst decision

In December 2006, this court issued an opinion in Bakst, affirming the district court's findings regarding the 2003–2004 property tax assessments and holding that the Assessor's unapproved appraisal methodology for assessing properties in the Incline Village and Crystal Bay areas was unconstitutionally inconsistent with his approach elsewhere in Washoe County. Bakst, 122 Nev. at 1416, 148 P.3d at 726. Thus, we held that taxpayers whose properties were valued using the disputed methodologies were entitled to a refund plus interest pursuant to NRS 360.2935. Bakst, 122 Nev. at 1417, 148 P.3d at 726. ⁴

Immediately after the Bakst decision, which effectively lifted this court's stay, the Assessor corrected the assessment rolls for the 2006–2007 tax year to reflect 2002–2003 valuations for Incline Village and Crystal Bay, in accordance with the County Board's March 2006 equalization decision. And in April 2007, the State Board proceeded with the Assessor's appeal of that equalization decision. At the State Board's hearing, it stayed enforcement of the County Board's decision and remanded the matter to the County Board for further factual findings. However, the taxpayers immediately sought a writ of mandamus from this court to force the State Board to hear the Assessor's appeal on the merits. Village League v. State, Bd. of Equalization, 124 Nev. 1079, 194 P.3d 1254 (2008). This court granted the writ petition and directed the State Board to hear the Assessor's appeal of the County Board's decision to reduce the 2006–2007 tax year assessments to 2002–2003 levels. Id. at 1091, 194 P.3d at 1262–63.

In July 2009, the State Board proceeded with the merits of the Assessor's appeal from the County Board's equalization decision. At the hearing, the State Board orally voted to uphold the County Board's decision. Its written decision affirming the County Board's equalization decision was entered in October 2009.

The district court's writ of mandamus, which is the subject of this appeal

Meanwhile, after the Treasurer rejected a demand by the Taxpayers to refund the excess taxes and did not immediately issue refunds of taxes paid in excess of the 2002–2003 tax year levels, the Taxpayers petitioned the district court for a writ of mandamus to compel him to do so. During his testimony before the district court, the Treasurer explained that, typically, once there is a final written order from the State Board and the Assessor has updated the tax rolls, the Treasurer adjusts his collections, including issuing refunds if required. He also stated that, in the scheme of tax collection, one of his jobs is to issue refunds when the Assessor updates the assessment roll. However, he maintained that he did not pay refunds in this case because of the ongoing legal proceedings related to the assessments and because he had not received a final written decision from the State Board specifically instructing him to issue refunds.

Although the State Board had not yet issued its final written order upholding the County Board's equalization decision, the district court granted the petition and issued the writ. The writ mandated that the Treasurer comply with the County Board's decision to roll back the 2006–2007 taxable values for 8,700 properties located in the Incline Village and Crystal Bay areas to 2002–2003 levels. In its order, the district court outlined the typical procedure for issuing refunds, finding that the Treasurer had a duty to conform his collections to the updated assessment roll and issue refunds if required. Because the Treasurer had collected taxes at the unreduced rate despite the Assessor's update to the assessment roll, the district court mandated that the Treasurer was to calculate the overpayments for the “2006–2007 [tax year] and subsequent years,” compute interest pursuant to the formula contained in NRS 361.486, and refund the total amount to the affected taxpayers. The Treasurer now appeals the district court's order granting the petition for a writ of mandamus.

DISCUSSION

This court generally reviews a district court's decision to grant a petition for writ of mandamus for abuse of discretion. Kay v. Nunez, 122 Nev. 1100, 1105, 146 P.3d 801, 805 (2006). However, this court reviews related statutory and legal issues de novo. Las Vegas Taxpayer Comm. v. City Council, 125 Nev. 165, 172, 208 P.3d 429, 433–34 (2009); Marquis & Aurbach v. Dist. Ct., 122 Nev. 1147, 1156, 146 P.3d 1130, 1136 (2006). “A writ of mandamus is available to compel the performance of an act which the law requires as a duty resulting from an office, trust or station ... or to control an arbitrary or capricious exercise of discretion.” State v. Dist. Ct., 116 Nev. 374, 379, 997 P.2d 126, 130 (2000) (internal citation omitted). Thus, the petitioner must meet two requirements for mandamus relief: there must be no other available remedy at law, see id., and the required act must be within the duties of the person compelled to act. State of Nevada v. Waterman, 5 Nev. 323, 326 (1869).

The Treasurer argues on appeal that writ of mandamus in this instance was inappropriate because Nevada's statutory tax collection scheme provides the Taxpayers with an appropriate legal remedy for overpayment of taxes and because he had no legal duty to refund the excess amounts. But because we conclude that the Taxpayers had no available statutory or legal remedy to obtain a refund and the Treasurer had an affirmative duty to refund, writ relief was appropriate.

No legal remedies were available

Generally, a taxpayer must “exhaust [his] administrative remedies before seeking judicial relief” from tax assessments and determinations. Washoe County v. Golden Road Motor Inn, 105 Nev. 402, 403, 777 P.2d 358, 359 (1989). NRS 361.420(1) requires a taxpayer who believes that he or she is being taxed “in excess of the amount ... justly to be due” to notify the Treasurer, in writing, that he or she is paying under protest. After the taxpayer pays under protest, he or she may then bring a complaint before the County Board and, if necessary, appeal to the State Board. NRS 361.420(2). If denied relief, the taxpayer may commence an action in the district court. Id.

The Treasurer argues that these statutory requirements under NRS 361.420 “envision a suit for precisely the relief ultimately sought by these taxpayers.” He contends that the district court could not grant a refund because the Taxpayers did not pay under protest for the 2006–2007 tax year....