Brown v. Towell

• Decision Date: 18 March 2021
• Docket Number: No. CV-20-480,CV-20-480
• Citation: 619 S.W.3d 17,2021 Ark. 60
• Parties: Anthony BROWN, Appellant v. Hannah TOWELL, in Her Official Capacity as the Craighead County Tax Assessor ; and Wes Eddington, in His Official Capacity as the Craighead County Tax Collector, Appellees
• Court: Arkansas Supreme Court

2021 Ark. 60

619 S.W.3d 17

Anthony BROWN, Appellant

v.Hannah TOWELL, in Her Official Capacity as the Craighead County Tax Assessor ; and Wes Eddington, in His Official Capacity as the Craighead County Tax Collector, Appellees

No. CV-20-480

Supreme Court of Arkansas.

Opinion Delivered: March 18, 2021

Ritter Law, by: George P. Ritter, for appellant.

Branch, Thompson, Warmath & Dale, P.A., by: Adam H. Butler, Little Rock, for appellees.

KAREN R. BAKER, Associate Justice

This appeal stems from the assessment and ad valorem taxation of personal property, a 2005 Ford F150 truck, owned by appellant, Anthony Brown. Appellees are Hannah Towell, in her official capacity as the Craighead County Tax Assessor, and Wes Eddington, in his official capacity as the Craighead County Tax Collector. On November 14, 2019, Eddington issued a notice of intent to offset Brown's Arkansas state income tax refund due to multiple failed attempts to collect delinquent personal property taxes for 2011 in the amount of $138.83.

Relevant to this appeal is the history of Brown's personal property. Brown purchased the truck in 2007. Brown resided in Craighead County until December 2010 when he moved to Pulaski County. On November 14, 2019, Eddington issued notice of intent to offset Brown's state income tax refund due to delinquent personal property taxes on the truck in the amount of $138.83. The record demonstrates that Towell and Eddington contend that the notice was mailed to Brown's current address in Pulaski County and the delinquent tax notice was published in the Jonesboro Sun as required by law. Brown asserts that he "notified Craighead County that he was moving to Pulaski County." However, Brown further contends that he did not receive the notice and only received the notice through a January 2020 Freedom of Information Act request he submitted to Towell. Towell responded to Brown's email with a copy of the notice. Upon receiving the notice of delinquency and offset, on November 22, 2019, Brown sent a letter to Eddington stating, "I am requesting a hearing related to an alleged personal property tax in the amount of $138.83.... I am entitled to a hearing with the agency if requested within thirty (30) days." On January 28, 2020, Brown sent an email to Towell and Eddington titled "Formal Complaint" stating that in response to his request for a hearing, Brown had received a phone call from "Rachel" at Eddington's office "who informed me it is in fact not a hearing, but simply members of the office who listen to my complaint.... Mr. Eddington next informed me that I could talk with the County Judge Marvin Day in order to work out a resolution through the Quorum Court.... I received correspondence from [Judge Day and he] informed me that my only option was to file suit in Circuit Court."

On February 26, 2020, Brown's attorney contacted Towell through a letter directed to Towell's attorney and contended that Towell had not demonstrated a valid assessment; Brown had not been afforded notice and due process regarding the non-assessment or delinquent taxes; and Brown requested a hearing. On March 9, 2020, Towell responded, stating that despite Brown's representation that he assessed the truck in Pulaski County for the year at issue, Pulaski County records did not support Brown's claim that the truck had been assessed in Pulaski County. Towell further responded that Craighead County "each year reported the tax owing and delinquent as required" by law.

On March 19, 2020, Brown filed suit in the Craighead County Circuit Court seeking declaratory and injunctive relief pursuant to Ark. Code Ann. § 16-111-103 (Repl. 2016) and requesting a declaration that the Craighead County Assessor has no power to assess property that is located outside Craighead County; the Craighead County Assessor has no power to assess the personal property of citizens who live or reside outside of Craighead County; the Craighead County Tax Collector has no power to collect taxes on the personal property of citizens who live or reside outside of Craighead County; the Craighead County Assessor had no legal or constitutional power to assess his Ford truck in 2012 because Mr. Brown no longer resided in Craighead County; the County Assessor of Craighead County cannot assess personal property of a taxpayer that the taxpayer no longer owns; the assessment of the Ford truck which Mr. Brown no longer owned made by Towell in 2012 is a legal constitutional nullity; the Craighead County Tax Collector has no legal or constitutional power to take any legal action against him, either civil or criminal, or to garnish his state income tax refund based on the illegal 2012 property tax assessment of his Ford truck conducted by the Craighead County Assessor; the Craighead County Collector violated Plaintiff's right to procedural due process regarding the alleged tax liability; for a preliminary and permanent injunction enjoining Towell and Eddington from taking any legal or administrative actions that attempt to collect money, garnish his tax returns, or subject him to civil or criminal liability based on personal property taxes they claim are owed on Brown's Ford pickup truck which he no longer owns.

On April 21, 2020, pursuant to Arkansas Rules of Civil Procedure Rule 12(b)(1)–(3) and (6)–(7), Towell and Eddington filed a motion to dismiss asserting that the matter should be dismissed because (1) Brown failed to exhaust his administrative remedies; (2) the circuit court lacked jurisdiction, asserting there was no remedy available for Brown; (3) Brown had failed to include necessary parties, the Pulaski County Assessor's Office and the Arkansas Department of Finance and Administration; and (4) the circuit court should dismiss Brown's cause of action for an injunction, alleging Brown's complaint failed to plead the necessary elements for the circuit court to enter an injunction. Brown responded and opposed the motion to dismiss. Towell and Eddington replied. Brown requested that the circuit court rule based on the record. On July 21, 2020, the circuit court entered an order granting the motion to dismiss. The order stated in pertinent part:

This cause comes before the Court on the Defendant's Motion to Dismiss. After reviewing of briefs of the parties, the court finds as follows:

The law is clear that a Plaintiff must exhaust his administrative remedies before seeking relief in Circuit Court. Here, Plaintiff contends the administrative remedy available is a "sham" based upon an alleged statement made by an employee at the Collector's Office, but any perceived perfunctory failings in the process cannot be addressed by avoiding the administrative procedure altogether. The Court finds that the Plaintiff failed to exhaust his administrative remedies.

Further, even if the administrative remedies have been properly exhausted, the court agrees that the Department of Finance and Administration is an indispensable party to this action. Additionally, the Court finds there has been a failure to state a claim for injunctive relief and dismissal is warranted pursuant to Ark. Rules of Civil Procedure 12 (b)(6).

THEREFORE, The Court grants the County's Motion to Dismiss.

From that order, Brown timely appealed and presents ten points: (1) The circuit court failed to follow the standard of review used for evaluating the merits of a motion to dismiss; (2) The Defendants cannot raise factual disputes about whether Brown paid taxes in Pulaski County in a motion to dismiss for failure to state a claim; (3) The Department of Finance and Administration is not an indispensable party; (4) Contrary to the circuit court's unsubstantiated conclusions, Brown exhausted all the county's ad hoc administrative remedies that were given to him; (5) Hypothetical remedies defendants claim Brown should have exhausted cannot substitute for administrative remedies that were actually offered to him; (6) Brown did not have to exhaust futile administrative remedies; (7) Presenting a claim to the Craighead County Board of Equalization would have been an exercise in futility; (8) Exhaustion of remedies is not a prerequisite to a legal action against an administrative agency which acts beyond its delegated powers; (9) The assessment and taxation of Brown's Ford truck by Craighead County was illegal as a matter of law; and (10) The Craighead County Assessor and Tax Collector had no power to assess or collect taxes on Brown's personal property after he moved to Pulaski County. For the reasons that follow, we affirm the circuit court.

I. Standard of Review

"When reviewing a circuit court's order granting a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff. Biedenharn v. Thicksten , 361 Ark. 438, 206 S.W.3d 837 (2005). In viewing the facts in the light most favorable to the plaintiff, the facts should be liberally construed in the plaintiff's favor. Id. at 441, 206 S.W.3d at 840. Furthermore, our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. Ballard Grp., Inc. v. BP Lubricants USA, Inc. , 2014 Ark. 276, at 6, 436 S.W.3d 445, 449 (citing Ark. R. Civ. P. 8(a) (2013))." Kennedy v. Ark. Parole Bd. , 2017 Ark. 234, at 3–4, 2017 WL 3300581. Further, "we treat only the facts alleged in the complaint as true but not a plaintiff's theories, speculation, or statutory interpretation. Ark. State Plant Bd. v. McCarty , 2019 Ark. 214, 576 S.W.3d 473. The standard of review for the granting of a motion to dismiss is whether the circuit court abused its discretion. Dockery v. Morgan , 2011 Ark. 94, 380 S.W.3d 377." Henson v. Cradduck , 2020 Ark. 24, at 4, 593 S.W.3d 10, 14. Finally, "we consider questions of law de novo. See Tucker v. Sullivant , 2010 Ark. 170, 370 S.W.3d 812." Ahmad v. Beck , 2016 Ark. 30, at 5, 480 S.W.3d 166, 169.

II. Points on Appeal

We first consider Brown's fourth, fifth, sixth, seventh...