C & D Inv. Co. v. Bestor

• Decision Date: 08 July 1980
• Docket Number: No. KCD,KCD
• Citation: 602 S.W.2d 58
• Court: Missouri Court of Appeals
• Parties: C & D INVESTMENT COMPANY, Plaintiff-Appellant, v. Hon. Mike BESTOR, Defendant-Respondent. 30461.

Page 58

602 S.W.2d 58

C & D INVESTMENT COMPANY, Plaintiff-Appellant, v. Hon. Mike BESTOR, Defendant-Respondent.

No. KCD 30461.

Missouri Court of Appeals, Western District.

July 8, 1980.

Charles C. Shafer, Jr., Kansas City, for plaintiff-appellant.

R. Jay Ingraham, County Counselor, Michael F. Dandino, Associate County Counselor, Kansas City, for defendant-respondent.

Before WASSERSTROM, C. J., Presiding, and DIXON and SOMERVILLE, JJ.

DIXON, Judge.

The trial court dismissed plaintiff's petition for refund of real estate taxes paid under protest pursuant to § 139.031. ¹ Plaintiffs initially filed the appeal in the Supreme Court of Missouri, and that court transferred the appeal to this court, prior to the filing of briefs.

Upon briefing and submission in this court, it appears that the disposition of the appeal requires construction of the revenue laws of the State of Missouri. The appeal thus lies within the exclusive jurisdiction of the Supreme Court of Missouri and must be retransferred to that court for decision on the merits. Mo.Const. Art. V, § 3.

Despite the filing of what has been denominated by the parties as an "agreed transcript on appeal," the statement of facts to pose the issue has been difficult. The source of the difficulty is the abstract nature of the pleadings under scrutiny as well as a hazy and ill-defined statement of the assessment practices under attack. By resorting to the trial court judgment, the so-called "agreed transcript," and the briefs, the following facts appear.

There are fifteen separate suits involved in the original appeal; and, by order of the Supreme Court, they were consolidated into one appeal prior to transfer. Each taxpayer filed a petition under the provisions of § 139.031 after written protest. Each of the petitions alleges generally the filing of the protest and the failure of the defendant-collector to refund the taxes. The specific grounds for the petition are contained in the protests, which are incorporated in each petition by reference with attachment of the protest as an exhibit. The protest, as filed, states in six separate paragraphs the claimed basis for a right to refund. By reference to the trial court judgment, it is apparent that the taxpayers have not claimed they were denied a timely and sufficient notice of the assessment. It is conceded by the taxpayers that no appeal was taken from the assessment to the Jackson County Board of Equalization and thereafter to the State Tax Commission. Counsel for the taxpayers candidly conceded in oral argument that he had been employed by the taxpayers to protest the taxes long after the time for pursuit of such administrative remedies had expired.

The only issues presented by the taxpayers in their brief are: first, that the assessment of the taxpayers' income-producing property was not valued in accordance with the "income method" of valuation; second, that the application of a 54% reduction in the valuation of improvements, but not land, results in a classification of land or real estate into subcategories. The taxpayers argue that this violates Article I § 10 of the Missouri Constitution by improperly classifying, for valuation purposes, vacant land and land upon which improvements have been erected.

At this juncture, reference to the trial court judgment will serve to focus the issue which inheres in this case. The trial court's judgment, after a recital of the procedural steps of protest and petition, notes that no issues of notice, computation of the tax, or exemption are present in the case. The court then recites the assertions of the plaintiffs-taxpayers in the following language:

"In contesting the subject real estate taxes to the extent protested, plaintiffs contend in each case, and the court assumes for purposes of defendant's motions, that certain practices were followed by the Jackson County Department of Revenue generally in establishing assessed values for real estate during the years in question. Such practices included ascertainment of market value by an undisclosed appraisal method, application selectively of a 54% reduction factor to some improvements and final computation of assessed value at 331/3% of the result. By whatever method the market or sales value of plaintiffs' properties was established, the income method for capitalization of investment was not used. If such method were adopted as the approach to valuation of plaintiffs' properties, the result would be a lower assessed valuation to the extent of the ratio of the protested payments to the total tax bills."

The trial court then noted that the actions for refund were brought under § 139.031 and that the taxpayers had failed to pursue the remedies afforded them for review of issues of valuation in assessments. Characterizing the taxpayers' claims as protests of the amount of assessed valuation, the trial court held the taxpayers could not maintain an action under § 139.031 since the procedures for the review of questions of assessment under § 137.385 and § 138.100 et seq. provided, by review before the county board of equalization, the State Tax Commission, and, ultimately, the courts, a full, orderly, and exclusive method of review of assessment questions.

The collector, by his brief filed in this court, correctly asserts that the issue is whether or not, by failing to pursue the administrative remedies, the taxpayers have lost any right to assert the claim presented. The issue posed cannot be resolved under the bare language of § 139.031 since no such limitation on a taxpayer's right to pay taxes under protest is either expressed or implied in the statutory language.

Thus, the resolution of the problem requires that the authority dealing with § 139.031 be examined to determine if such a rule has evolved in the case law as a matter of construction. Before the enactment of § 139.031, the issue arose in the context of the availability of an equitable remedy. It was generally held that the equitable remedy was unavailable until the available administrative remedies were exhausted. Brinkerhoff-Faris Trust and Sav. Co. v. Hill, 323 Mo. 180, 19 S.W.2d 746 (banc 1929), reversed 281 U.S. 673, 50 S.Ct. 451, 74 L.Ed. 1107 (1930). ² Understandably, equitable remedies were not denied where the failure to pursue administrative review was occasioned by a lack of notice or other defects which effectively foreclosed administrative review. See, John Calvin Manor, Inc. v. Aylward, 517 S.W.2d 59 (Mo.1974), and cases cited.

So far as can be determined, the Supreme Court of Missouri has considered some aspect of § 139.031 in five cases. ³ These are: John Calvin Manor, Inc.; Xerox Corp. v. Travers, 529 S.W.2d 418 (Mo. banc 1975); Mesker Brothers Industries, Inc. v. Leachman, 529 S.W.2d 153 (Mo.1975); St. John's Mercy Hospital v. Leachman, 552 S.W.2d 723 (Mo. banc 1977); and Breckenridge Hotels Corp. v. Leachman, 571 S.W.2d 251 (Mo. banc 1978).

John Calvin Manor, supra, the first case in which the court considered § 139.031, was a suit for injunction. The taxpayers had received no notice of the assessment. On appeal, the collector claimed the trial court was in error in issuing an injunction because the taxpayer had a complete remedy at law under § 139.031. The Supreme Court affirmed, holding that § 139.031 did not abrogate the equitable remedy of injunction and was not a complete substitute for the equitable remedy. The rationale of the court was that the remedy under § 139.031 was not complete and when the taxpayer had been deprived of his right to administrative review by the failure of notice, the remedy by injunction was available. The case does not reach or decide the question here presented of the availability of relief under § 139.031 when the taxpayer has totally failed to pursue his administrative remedy without excuse or justification.

The next occasion for consideration of § 139.031 was Xerox Corp., supra. There the taxpayer had followed twin procedures. A review of the assessment of personal property of the taxpayer was undertaken by way of administrative review and the taxpayer also paid the taxes under protest pursuant to § 139.031. Suit was filed in Cole County to review the adverse determination of the State Tax Commission, but no suit was filed in St. Louis. The taxpayer then filed a suit for declaratory relief and injunction to prohibit distribution of the taxes paid under protest and to declare that its protest was perfected by the filing of the Cole County suit. The trial court denied relief, and the Supreme Court affirmed on the ground that the filing of the Cole County suit did not perfect the protest under § 139.031. Simultaneously, the Supreme Court decided the taxpayer's claim adversely to the taxpayer so that, with the exception of a possible claim for interest and penalties by the collector, the issues in the declaratory judgment suit were moot. Nonetheless, the Supreme Court outlined a procedure which harmonized and reconciled the statutes. The procedure outlined follows the statutory procedure under § 139.031 and then adds:

"If he appeals to the State Tax Commission, he may notify the collector of such appeal and may file in the circuit court of the county in which the collector maintains his office a notification of such appeal. If he makes and files such notifications, the proceedings pending in the circuit court of the county in which the collector maintains his office shall be stayed until the proceedings before the State Tax Commission and judicial review, if any, are finalized.

The collector should not disburse the impounded funds until all proceedings in the circuit court of the county in which he maintains his office are finalized. " (Emphasis added). 529 S.W.2d at 422.

The emphasized portion of the language from Xerox set forth above at least implies that a suit may be brought under § 139.031 without any proceedings before the administrative bodies.

The next case to consider § 139.031 w...