Campbell Cnty. Library Bd. of Trs. v. Coleman

Decision Date20 March 2015
Docket Number NO. 2013–CA–000874–MR, NO. 2013–CA–001010–MR,NO. 2013–CA–000883–MR,2013–CA–000883–MR
Parties Campbell County Library Board of Trustees, Appellant v. Charlie Coleman ; John P. Roth; and Erik Hermes, Appellees and Kenton County Library Board of Trustees, Appellant/Cross–Appellee v. Garth Kuhnhein, Appellee/Cross–Appellant
CourtKentucky Court of Appeals

Briefs for Appellant, Campbell County Library Board of Trustees: Jeffrey C. Mando (argued), Louis D. Kelly, Covington, Kentucky.

Amici Curiae Brief for Kentucky Library Association; Kentucky Public Library Association; Friends of Kentucky Public Libraries, Inc.; General Federation of Women's Clubs Kentucky; and American Library Association: Mark R. Overstreet, Frankfort, Kentucky, Sheryl G. Snyder (argued), Chongyang Ge, Louisville, Kentucky, Virginia Hamilton Snell, Louisville, Kentucky.

Briefs for Appellees, Charlie Coleman, John P. Roth and Erik Hermes: Timothy J. Eifler, Stephen A. Sherman, Louisville, Kentucky, Brandon N. Voelker (argued), Cold Spring, Kentucky, Erica L. Horn, Sara J. Bishop, Lexington, Kentucky.

Briefs for Appellee/Cross–Appellant, Garth Kuhnhein: Timothy J. Eifler, Stephen A. Sherman, Louisville, Kentucky, Brandon N. Voelker (argued), Cold Spring, Kentucky, Erica L. Horn, Sarah J. Bishop, Lexington, Kentucky.

Briefs for Appellant/Cross–Appellee, Kenton County Library Board of Trustees: Michael W. Hawkins (argued), Cincinnati, Ohio, Mary Ann Stewart, Covington, Kentucky.

BEFORE: NICKELL, TAYLOR, AND THOMPSON, JUDGES.

OPINION

TAYLOR, JUDGE:

At issue in this consolidated appeal from the Campbell and Kenton Circuit Courts is whether public libraries in Kentucky, created by petition pursuant to Kentucky Revised Statutes (KRS) 173.710 et seq. , may assess the library's ad valorem tax rate in accordance with KRS 132.023 (commonly referred to as House Bill 44) or pursuant to the provisions of KRS 173.790.

The Campbell County Library Board of Trustees (Campbell Board) brings Appeal No. 2013–CA–000883–MR from a May 13, 2013, Order of the Campbell Circuit Court holding that KRS 173.790 controlled any increase in the ad valorem tax rate imposed by the Campbell Board. The Kenton County Library Board of Trustees (Kenton Board) brings Appeal No. 2013–CA–000874–MR and Garth Kuhnhein brings Cross–Appeal No. 2013–CA–001010–MR from an April 11, 2013, Summary Judgment of the Kenton Circuit Court also concluding that KRS 173.790 controlled any increase in the ad valorem tax rate imposed by the Kenton Board. For the reasons stated, we reverse and remand Appeal Nos. 2013–CA–000883–MR and 2013–CA–000874–MR and affirm Cross–Appeal No. 2013–CA–001010–MR.

BACKGROUND—CAMPBELL COUNTY

In 1978, the Campbell County Library was created by petition of the voters as a public library district pursuant to KRS 173.710 –173.800. In accordance with KRS 173.720, the petition was signed by more than 51 percent of Campbell County voters who voted in the last general election, and the petition was filed with the Campbell County Fiscal Court. The petition set forth an ad valorem tax rate of $0.30 per thousand dollars of assessed property value as funding for the Campbell County Library District. Since that time, the Campbell County Library District's ad valorem tax rate has been calculated pursuant to the provisions of KRS 132.023, and in 2011 the tax rate was $0.457 per thousand dollars of value.

On January 19, 2012, Charlie Coleman, John P. Roth, and Erik Hermes (collectively referred to as appellees/taxpayers), as landowners in Campbell County, filed a declaratory judgment action against the Campbell Board seeking class action certification in the Campbell Circuit Court. Appellees/taxpayers claimed, inter alia, that the Campbell Board improperly increased the ad valorem tax rate in violation of KRS 173.790 and sought a refund of overpaid taxes. Appellees/taxpayers argued that the Campbell Board erroneously utilized KRS 132.023 to authorize the increase in the ad valorem tax rate. Appellees/taxpayers maintained that the Campbell Board should have utilized KRS 173.790 to impose an increase in the ad valorem tax rate and that such increase could only be obtained by petition of the voters. As the Campbell Board increased the ad valorem tax rate without complying with KRS 173.790, appellees/taxpayers sought a refund of "overpaid" ad valorem taxes collected by the Campbell Board. Conversely, the Campbell Board maintained that the ad valorem tax rate was correctly assessed pursuant to KRS 132.023 and that appellees/taxpayers are not entitled to relief.

Both parties filed motions for summary judgment upon the legal issue of whether KRS 132.023 or KRS 173.790 controlled the ad valorem tax rate. By order granting summary judgment entered April 1, 2013, the circuit court held that KRS 173.790 controlled as the more specific statute. The court stated:

Where two statutes are in apparent conflict, and their inconsistencies cannot be reconciled, "the one containing express and positive language relating to the particular subject should take precedence over a provision dealing with a matter in general terms." Commonwealth v. Martin, 777 S.W.2d 236 (Ky.App.1989). Moreover, it is the Court's duty to harmonize the law so as to give effect to both statutes. Allen v. McClendon, 967 S.W.2d 1 (Ky.1998). KRS 173.790 specifically refers to the "special ad valorem tax rate for the maintenance and operation of a public library district." KRS 132.023 and KRS 132.010 refer generally to taxing districts. Since KRS 173.790 specifically addresses the procedure for increasing or decreasing the Library Tax Rate, it must control over the general provisions of KRS Chapter 132. This interpretation gives effect to both statutes and prevents KRS 173.790 from being meaningless.

Upon motion of the Campbell Board, the circuit court designated the April 1, 2013, summary judgment final and appealable per Kentucky Rules of Civil Procedure (CR) 54.02, by order entered May 13, 2013. The Campbell Circuit Court appeal followed.

BACKGROUND—KENTON COUNTY

In 1967, the Kenton County Public Library was created by petition of the voters as a public library district pursuant to KRS 173.710 –173.800. In accordance with KRS 173.720, the petition was signed by more than 51 percent of Kenton County voters who voted in the last general election, and the petition was filed with the Kenton County Fiscal Court. The petition set forth an ad valorem tax rate of $0.60 per thousand dollars of assessed property value as funding for the Kenton County Library District. Since 1979, the Kenton County Library District's ad valorem tax rate has been calculated pursuant to KRS 132.023, and in 2011 the ad valorem tax rate had increased to approximately $1.13 per thousand dollars of assessed real property value.

On January 20, 2012, Garth Kuhnhein and "others similarly situated," (collectively referred to as appellees/taxpayers) as property owners in Kenton County, filed a declaratory judgment action against the Kenton Board seeking class action certification in the Kenton Circuit Court. Kuhnhein claimed, inter alia, that the Kenton Board improperly increased the ad valorem tax rate in violation of KRS 173.790 and sought a refund of overpaid taxes. Kuhnhein maintained that the Kenton Board erroneously utilized KRS 132.023 to increase the ad valorem tax rate. Kuhnhein argued that the Kenton Board should have utilized KRS 173.790 to impose an increase in the ad valorem tax rate and that such increase could only be obtained by petition of the voters. As the Kenton Board increased the ad valorem tax rate without complying with KRS 173.790, Kuhnhein sought a refund of "overpaid" ad valorem taxes collected by the Kenton County Library District. Conversely, the Kenton Board maintained that the ad valorem tax rate was correctly assessed pursuant to KRS 132.023 and that Kuhnhein was not entitled to relief.

Both parties filed motions for summary judgment. In its summary judgment, the circuit court concluded that KRS 173.790 controlled as the more specific statute concerning imposition of an ad valorem tax rate and that the Kenton Board improperly relied upon KRS 132.023 to increase the ad valorem tax rate. However, the circuit court denied Kuhnhein a refund for "overpaid" ad valorem taxes from the Kenton County Library District. The court designated the summary judgment as final and appealable per CR 54.02. The Kenton Circuit Court appeal and cross-appeal followed.

STANDARD OF REVIEW

Summary judgment is appropriate where there exists no material issue of fact and movant is entitled to judgment as a matter of law. CR 56; Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky.1991). However, the facts in these cases are not in dispute. Accordingly, resolution of these appeals looks to the interpretation, construction, and application of KRS 132.023, KRS 173.790, and KRS 65.190, which is a question of law. See City of Worthington Hills v. Worthington Fire Prot. Dist., 140 S.W.3d 584 (Ky.App.2004). We thus review the rulings below de novo. See 3D Enterprises Contracting Corp. v. Louisville and Jefferson County, 174 S.W.3d 440 (Ky.2005).

ANALYSIS

We begin our analysis by reviewing the relevant legislative history as concerns the creation and funding of library taxing districts formed by petition in Kentucky, and subsequent legislation related thereto.

In 1964, the General Assembly enacted KRS 173.710 –173.800 entitled "Library Districts Formed by Petition." Pursuant to KRS 173.720, a library district could be formed by a petition setting forth the ad valorem rate and signed by 51 percent of the voters in a county who voted in the last general election. The ad valorem tax rate is required to be set forth in the petition. KRS 173.790 provided that the ad valorem tax rate could be only increased or decreased by a petition signed by 51 percent of the voters.

In 1965, the Supreme Court rendered Russman v....

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