Blankenship v. Franklin Cnty. Collector

• Decision Date: 02 March 2021
• Docket Number: No. ED 108824,ED 108824
• Citation: 619 S.W.3d 491
• Parties: Larry D. BLANKENSHIP, Appellant, v. FRANKLIN COUNTY COLLECTOR, et al., Respondent.
• Court: Missouri Court of Appeals

619 S.W.3d 491

Larry D. BLANKENSHIP, Appellant,

v.FRANKLIN COUNTY COLLECTOR, et al., Respondent.

No. ED 108824

Missouri Court of Appeals, Eastern District, DIVISION FOUR.

Filed: March 2, 2021

FOR APPELLANT: John S. Steward, 14824 West Clayton Road, Suite 24, Chesterfield, Missouri 63017.

FOR RESPONDENT: Mark C. Piontek, Sandberg Phoenix & Von Gontard, P.C., 1200 Jefferson Street, Washington, Missouri 63090, Joshua E. Douglass, Thomas A. Mickes, Anne R. Kerns, Mickes O'Toole, LLC, 12444 Powerscourt Drive, Suite 400, St. Louis, Missouri 63131.

Philip M. Hess, Judge

Introduction

Larry Blankenship, individually and on behalf of a certified class of owners of real estate and personal property (collectively, "Taxpayers") in the Strain-Japan R-XVI (R-16) School District ("District"), sued to challenge the District's operating funds tax levies for 2013, 2014, 2015, 2016, 2017, and 2018. Taxpayers alleged the District erroneously determined the highest rate of tax it could levy without additional voter approval in each of those years. Specifically, Taxpayers contended the tax levies for those years were improperly adjusted using section 137.073.5(2).¹ Taxpayers argued a tax levy calculated under section 137.073.5(2) may be used only if it is lower than the tax levy authorized by article X, section 22(a) of the Missouri Constitution (the "Hancock Amendment").

Taxpayers requested an order declaring the District's levies for 2013, 2014, 2015, 2016, 2017, and 2018 unlawful; enjoining the District from collecting taxes under the unlawful levies; refunding to Taxpayers any sums paid over the amount due on each Taxpayer's respective tax bills when the lawful levy is used to compute the 2013, 2014, 2015, 2016, 2017, and 2018 tax bills; and awarding Taxpayers their costs and attorney's fees. The trial court found the District did not violate section 22(a) of the Hancock Amendment or section 137.073 and Taxpayers were entitled to no refunds. The trial court entered judgment for the District.

Taxpayers appeal. In Point I, Taxpayers argue the trial court erred in determining the District's levies did not violate section 22(a) of the Hancock Amendment. In Point II, Taxpayers argue the trial court erred in determining the District's levies complied with section 137.073 because, although section 137.073.5(2) provides a method for the District to increase its levies in accordance with the consumer price index ("CPI") to allow for inflationary assessment growth, section 137.073.4(2) requires the District to use the lowest tax levy ceiling calculated by section 137.073.5(2) or section 22(a) of the Hancock Amendment, which the District failed to do. In Point III, Taxpayers argue the trial court erred in determining they were not entitled to refunds on their 2013, 2014, 2015, 2016, 2017, and 2018 tax bills under section 137.073.9. In Point IV, Taxpayers argue the trial court erred in determining they were not entitled to refunds on their 2013, 2014, 2015, 2016, 2017, and 2018 tax bills under article X, section 23 of the Hancock Amendment. In Point V, Taxpayers argue the trial court erred in determining all class members had to comply with section 139.031.1-2 to be entitled to refunds under section 137.073.9, section 23 of the Hancock Amendment, or section 139.031.1. In Point VI, Taxpayers argue the trial court erred in determining they were not entitled to costs and attorney's fees under section 23 of the Hancock Amendment. In Point VII, Taxpayers argue the trial court erred in determining they were not entitled to costs and attorney's fees under section 137.073.8.

"We must first address the issue of our jurisdiction because Article V, Section 3 of the Missouri Constitution grants exclusive appellate jurisdiction to the Missouri Supreme Court of all cases involving the constructions of revenue laws of the state." Maryville Props., L.P. v. Nelson , 83 S.W.3d 608, 610 (Mo. App. W.D. 2002). Where an appeal involves the application of revenue laws already construed by the Missouri Supreme Court, jurisdiction lies with our Court and we are bound to apply the Missouri Supreme Court's precedent. A.P. Green Refractories Co. v. State Tax Comm'n of Missouri , 621 S.W.2d 340, 345 (Mo. App. W.D. 1981). The questions in this appeal have been resolved by prior decisions of the Missouri Supreme Court. See Franklin Cty. ex rel. Parks v. Franklin Cty. Comm'n , 269 S.W.3d 26 (Mo. banc 2008) ; State ex rel. Indus. Servs. Contractors, Inc. v. Cty. Comm'n of Johnson Cty. , 918 S.W.2d 252 (Mo. banc 1996) ; Green v. Lebanon R-III Sch. Dist. , 13 S.W.3d 278 (Mo. banc 2000) ; Zweig v. Metro. St. Louis Sewer Dist. , 412 S.W.3d 223 (Mo. banc 2013) ; Fort Zumwalt Sch. Dist. v. State , 896 S.W.2d 918 (Mo. banc 1995). Because this case involves the application of revenue laws already authoritatively construed, we determine jurisdiction is properly vested in this Court. Stout Indus., Inc. v. Leachman , 699 S.W.2d 129, 130 (Mo. App. E.D. 1985).

The trial court's judgment is reversed and remanded for further proceedings consistent with this opinion.

Factual and Procedural Background

The facts are undisputed. The District is a political subdivision of the State of Missouri with authority to set an operating funds tax levy and assess taxes against real and personal property within its boundaries. As of November 4, 1980, the District calculated its tax levy ceiling at $3.50 per $100 of assessed valuation. On November 6, 2012, the voters approved an increase of the District's tax levy ceiling to $3.5342 per $100 of assessed valuation.² The voters have not approved an increase to the District's tax levy ceiling since November 6, 2012.

The District used the Missouri Auditor's office online tax form and tax rate calculators to determine its tax levies for 2012, 2013, 2014, 2015, 2016, 2017, and 2018. The District's tax levies per $100 of assessed valuation for those years were:

2012	$3.1842
2013	$3.8393
2014	$3.8393
2015	$3.8393
2016	$3.7770
2017	$3.7540
2018	$3.7798

The District's tax levies for 2013, 2014, 2015, 2016, 2017, and 2018 exceeded the District's November 4, 1980 tax levy of $3.50 and the District's November 6, 2012 voter-approved tax levy of $3.5342. The District increased its tax levies in 2013, 2014, 2015, 2016, 2017, and 2018 using the method of adjustment provided in section 137.073.5(2). Section 137.073.5(2) provides the tax levy ceiling:

shall be adjusted such that when applied to the current total assessed valuation of the political subdivision, excluding new construction and improvements since the date of the election approving such increase, the revenue derived from the adjusted tax rate ceiling is equal to the sum of: the amount of revenue which would have been derived by applying the voter-approved increased tax rate ceiling to total assessed valuation of the political subdivision, as most recently certified by the city or county clerk on or before the date of the election in which such increase is approved, increased by the percentage increase in the [CPI], as provided by law.

The District's assessed valuations, including real and personal property, for 2012, 2013, 2014, 2015, 2016, 2017, and 2018 were:

2012	$11,206,793
2013	$10,818,937
2014	$10,865,691
2015	$11,101,202
2016	$11,339,918
2017	$11,947,844
2018	$12,266,283

The District's adjusted valuations, i.e., the total assessed valuation excluding new construction and improvements, for 2012, 2013, 2014, 2015, 2016, 2017, and 2018 were:

2012	$10,970,495
2013	$10,491,537
2014	$10,747,326
2015	$10,852,436
2016	$11,122,098
2017	$11,780,331
2018	$12,862,824

The increases in the general price level as measured by the CPI in 2012, 2013, 2014, 2015, 2016, 2017, and 2018 for each of the preceding twelve-month periods were:

2012	3.0%
2013	1.7%
2014	1.5%
2015	0.8%
2016	0.7%
2017	2.1%
2018	2.1%

The percentage changes in the District's assessed valuation of property as finally equalized, excluding the value of new construction and improvements, for 2013, 2014, 2015, 2016, 2017, and 2018 were:

2013	-6.3823% from 2012
2014	-0.6619% from 2013
2015	-0.1220% from 2014
2016	+0.1882% from 2015
2017	+3.8837% from 2016
2018	-0.7116% from 2017

The District's tax levies for 2013, 2014, 2015, 2016, 2017, and 2018 yielded additional revenue to the District exceeding the revenue the District would have realized had the November 6, 2012 voter-approved rate of $3.5342 per $100 of assessed valuation been levied in 2012. Specifically, the District's levies resulted in $33,008 of additional revenue in 2013; $33,150 of additional revenue in 2014; $33,869 of additional revenue in 2015; $27,533 of additional revenue in 2016; $26,261 of additional revenue in 2017; and $30,126 of additional revenue in 2018.

Blankenship paid his 2013, 2014, 2015, and 2016 taxes but did not do so under protest. He paid his 2017 and 2018 taxes under protest and submitted a written statement explaining the grounds on which his protests were based. Blankenship made a formal complaint with the prosecuting attorney of Franklin County on November 30, 2017, challenging the District's 2013, 2014, 2015, 2016, and 2017 tax levies. The prosecutor failed to bring an action within ten days of November 30, 2017.

On December 22, 2017, Taxpayers filed their Petition against the District and Linda Emmons, the Collector of Franklin County. Their Petition alleged the District "improperly calculated its tax rate for the year 2013, which resulted in its collection of excess tax revenue in 2013, 2014, 2015, 2016 and 2017." On October 8, 2018, Blankenship made another formal complaint with the prosecuting attorney of Franklin County, challenging the District's 2018 tax levy. The prosecutor failed to bring an action within ten days of October 8, 2018. On October 31, 2018, Taxpayers filed their Second Amended Petition, alleging the District "improperly calculated its tax rate for the years 2013 through 2018, which resulted in its collection of excess tax revenue in each year 2013 through 2017 and anticipated collection of excess tax revenue in 2018." Taxpayers...