BP PRODS. NORTH AMERICA, INC. v. BD. OF COM'RS OF LAKE COUNTY, 45A05-0312-CV-636.
| Decision Date | 20 July 2004 |
| Docket Number | No. 45A05-0312-CV-636.,45A05-0312-CV-636. |
| Citation | 812 N.E.2d 139 |
| Parties | BP PRODUCTS NORTH AMERICA, INC., Appellant-Plaintiff, v. The BOARD OF COMMISSIONERS OF LAKE COUNTY; The Lake County Assessment Board of Appeals, Paul G. Karras, Secretary and Paul G. Karras, in his Official capacity as the Lake County Assessor, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Jeffrey T. Bennett, Steven G. Cracraft, Karl L. Mulvaney, Bingham McHale, LLP, Indianapolis, IN, Attorneys for Appellant.
Brian P. Popp, Laszlo & Popp, LLP, Dock McDowell, The McDowell Law Firm, Merrillville, IN, John S. Dull, Crown Point, IN, Attorneys for Appellees.
Appellant-plaintiff BP Products North America, Inc. (BP) appeals the trial court's entry of summary judgment in favor of appellee-defendant the Board of Commissioners of Lake County et al., (Lake County) regarding the issuance of a writ of production compelling BP to produce a number of the corporation's books and records that Lake County had requested for the purpose of conducting an audit. Similarly, BP contends that the trial court erred in concluding that Lake County had the power and jurisdiction to conduct audits of BP's business property in light of the applicable statutes of limitation. Concluding that the trial court acted within its discretion in issuing the writ of production to BP, and further finding that BP's request for declaratory relief was properly denied, we affirm the entry of summary judgment for Lake County. As a result, we also remand this cause to the trial court with instructions that it dissolve the stay that had been issued pending the resolution of this appeal with regard to the writ of production.
BP, a Maryland corporation, is one of the largest oil and gasoline producers/retailers in the United States. It operates its facilities and owns real and personal property in Lake County. Sometime in the spring of 2001, Lake County contracted with a tax management firm in Raleigh, North Carolina, for the audit of several large taxpayers in the county, including BP. Lake County Assessor Paul Karras sent BP a letter notifying the company that the tax firm planned to audit BP's personal property returns for the years 1998 through 2002. BP resisted the audit and filed two petitions requesting a declaratory determination with the State Board of Tax Commissioners — which is currently referred to as the Division of Local Government Finance (DLGF) — as to whether such audits could be conducted. In essence, BP questioned whether such audits would comply with the applicable statutes and rules.
BP and Lake County then entered into discussions pertaining to the proposed audits. Pending BP's request for a declaratory determination and its challenges to the audits, the parties generated a series of documents with the hope that the time allowed for changing the assessment of unreported or undervalued business personal property belonging to BP would be extended.
The DLGF ultimately dismissed BP's request for declaratory determination on March 17, 2003. As a result, Lake County sent BP another letter requesting that the audit be scheduled. Lake County asserted that BP's general ledgers, inventory reports, asset schedules, balance sheets, and related documents that it requested were necessary for its investigation into the accuracy of BP's self-reported tax returns for the tax years at issue. BP continued to resist Lake County's purported right to conduct any investigation at all into the accuracy of BP's property tax returns prior to the 2003 tax year. The Lake County auditor alleged in an affidavit that until an audit of BP's relevant books and records is undertaken, he "and other members of my office do not know whether there is any... omitted [business personal property which BP may have failed to report] or at what amount it should be valued." Appellant's App. p. 202.
On May 27, 2003, BP filed a complaint in the trial court challenging Lake County's authority to undertake the requested audits. In particular, BP sought to obtain a definitive judicial determination that Indiana Code section 6-1.1-16-1, the statute pertaining to a local government's authority and power to change assessments for a taxpayer, bars Lake County from auditing and/or reassessing BP's business personal property with respect to any assessment year prior to 2003. BP also asserted that the exercise of Lake County's audit and subpoena powers violates Indiana Code section 6-1.1-16-1, and that Lake County lacked the power or jurisdiction to conduct the audits given the procedural history of the property tax disputes between Lake County and BP. Thus, BP argued that Indiana Code section 6-1.1-16-1 established explicit timelines for reassessments that are extended to audits. Inasmuch as Lake County has not complied with the timelines for the years in question, says BP, reassessment and audit powers can no longer be exercised. BP also contended that Indiana Code section 6-1.1-9-3, the statute regarding assessment when filing fraudulent returns, not filing a return in a particular year, or omitting items of property from a return, does not apply here because the limited circumstances set forth in that statute do not exist in this case.
Lake County then filed a motion for a writ of production in accordance with Indiana Code section 6-1.1-36-4, that allows for various county officials to file an affidavit with the Circuit Court compelling a taxpayer to supply the requested books or records. Lake County also filed a separate motion for summary judgment, asserting that it was entitled to judgment as a matter of law because there is no time limit in accordance with Indiana law on the ability of a local government to discover undervaluations or omissions in personal property reports. Alternatively, Lake County argued that confidential documents that were signed in 2001, 2002, and 2003 with BP extended the time permitted for changing the assessment of business personal property. Thus, because BP did not comply with the request to produce its books and records, Lake County maintained that the writ to produce those records is compelled as a matter of law.
The trial court consolidated the motions and set them for hearing. BP then filed its own cross-motion for summary judgment, claiming that Lake County's proposed audits and assessments were time-barred under Indiana Code section 6-1.1-16-1 and that the exceptions set forth therein do not apply here. Thus, BP argued that there was no genuine issue of material fact because Lake County is precluded from compelling production of books or other records for the reason that it is prohibited from changing the assessed value of BP's property.
Following a hearing on these combined motions, the trial court granted Lake County's motions for writ of production and summary judgment. The trial court ordered BP to produce the books and records requested in Lake County's motion for writ of production and retained "jurisdiction of [the] action to ensure compliance with [that writ]." Appellant's App. p. 13. It was also determined that the requested books and records were "part of an audit to determine whether BP's self-reported business personal property tax returns for those years were in substantial compliance with Indiana Law." Appellant's App. p. 9. The trial court then noted that the statute of limitations set forth in Indiana Code section 6-1.1-16-1 does not apply to a local government's ability to audit a taxpayer's records and to reassess BP's property. However, the trial court also observed that Indiana Code section 6-1.1-36-12(a) does apply to a local government's ability to audit a taxpayer's records, and, under the provisions of that statute, the legislature chose not to place a time limit on the government's ability to perform the audit. As a result, the trial court ordered BP to produce the "information, books and records,... as they relate to BP's business personal property located in [the] county." BP appeals, and this court issued a stay during the pendency of this appeal regarding the requirement of BP to turn over its books and records in accordance with the writ.
When reviewing a ruling on summary judgment, this court stands in the shoes of the trial court. Rogier v. Am. Testing and Eng'g Corp., 734 N.E.2d 606, 613 (Ind.Ct.App.2000),trans. denied. Summary judgment is appropriate only if the pleadings and designated evidence show that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Ind. Trial Rule 56(C). On a motion for summary judgment, all doubts as to the existence of material issues of fact must be resolved against the moving party. Owens Corning Fiberglass Corp. v. Cobb, 754 N.E.2d 905, 909 (Ind.2001). A trial court's grant of summary judgment is clothed with a presumption of validity, and the appellant has the burden of demonstrating that the grant of summary judgment was erroneous. Rogier, 734 N.E.2d at 613.
In considering the claims that BP presents today with regard to Lake County's power or ability to audit BP's records, as well as the propriety of the writ of production, we initially observe that public policy favors the power to audit for undervalued property. Tippecanoe County v. Indiana Manufacturer's Assoc., 784 N.E.2d 463, 467 (Ind.2003). "Tax audits provide a necessary check upon a `self-assessment' system, and it is heavily reliant on full disclosure and accurate reporting." Paul Heuring Motors, Inc. v. State Bd. of Tax Comm'rs, 620 N.E.2d 39, 41 (Ind.Tax 1993). Absent tax audits, "property would wholly escape taxation, and nothing would be taken from the burden of the honest property owner who returns all of his property to be taxed." Fleener v. Litsey, 30 Ind.App. 399, 404-05, 66 N.E. 82, 84 (1903).
To continue reading
Request your trial
-
Gaddis v. McCullough
...and the plain words of the statute are the best indication of the legislature's intent. BP Prods. N. Am., Inc. v. Bd. of Comm'rs of Lake County, 812 N.E.2d 139, 143 (Ind.Ct.App.2004). The plain language of Section 22(b) does not support the unsuccessful candidates' argument. The statute app......
-
Lake County Assessor v. Amoco Sulfur Recovery Corp.
...fraud, or the lack thereof.12 See A.I.C. § 6-1.1-16-1(d) (footnote added). See also, e.g., BP Prods. N. Am., Inc. v. Bd. of Comm'rs of Lake County, 812 N.E.2d 139, 143-45 (Ind.Ct.App.2004), trans. denied. The statute further provides that should an assessor fail to change an assessment and ......
- Wilson v. Royal Motor Sales, Inc.
- Bp Products North America Inc. v. Board of Com'rs of Lake County