CASTRINGO v. McQuade

• Decision Date: 28 January 2005
• Docket Number: No. 30051.,30051.
• Parties: Matthew and Melissa CASTRIGNO, Husband and Wife, Plaintiffs-Appellants, v. Robert H. McQUADE and Ada County Board Of Equalization and Ada County, Defendants-Respondents.
• Court: Idaho Supreme Court

106 P.3d 419

141 Idaho 93

Matthew and Melissa CASTRIGNO, Husband and Wife, Plaintiffs-Appellants, v. Robert H. McQUADE and Ada County Board Of Equalization and Ada County, Defendants-Respondents.

No. 30051.

Supreme Court of Idaho, Boise, November 2004 Term.

January 28, 2005.

Holland & Thiel, P.C., Boise, for appellants. W. John Thiel argued.

Greg H. Bower, Ada County Prosecuting Attorney, Boise, for respondents. Ray J. Chacko argued.

TROUT, Justice.

Matthew and Melissa Castrigno brought this action against Ada County seeking a property tax refund, arguing, among other things, that the 2001 assessment notice they received from the Ada County Assessor was defective under Idaho law and denied them procedural due process. The trial court granted summary judgment for Ada County from which the Castrignos now appeal. Because we agree with the district judge that the Castrignos failed to exhaust administrative remedies, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2000, the Castrignos owned a 5.626 acre lot in Eagle, Idaho, which had an assessed value, according to the Ada County Assessor, of $120,000. During 2001, the Castrignos built a 9,428 square foot home (the Residence) on the lot, with Matthew Castrigno acting as the general contractor. On September 10, 2001, the Castrignos sent the Ada County Assessor's office a Notice of Occupancy, informing Ada County they had moved into their home as of that date. In response, on November 2, 2001, the Assessor's office sent the Castrignos notice that they would be assessed an occupancy tax based on the value of improvements constructed during 2001.

On December 24, 2001, the Assessor sent Castrignos the 2001 assessment notice for the property, stating the assessed market value was $290,400 for the residential improvement and the estimated taxes for 2001 were $2,986.54. The assessment notice also stated the value of the unimproved land was $120,000 in 2000 and noted that the 2000 tax was $1,490.78. Although it is not reflected on the assessment notice, the improvements were actually assessed at a total value of $1,039,300 based upon a full year's occupancy. That value was then prorated to reflect 102 days of occupancy in 2001, resulting in the value on the assessment notice of $290,400. Nowhere on the assessment notice does it indicate this is a prorated value. As a result, the Castrignos claim they understood this amount to represent the total assessed value of the lot and improvements for a full year. The assessment notice also indicated that the Castrignos had until January 25, 2002, within which to appeal any dispute about the assessed value. The Castrignos did not appeal the assessment.

After the time to appeal had passed, the Castrignos received their tax bill for 2001. Although the listed tax of $2,906.60 was consistent with the assessment notice, the Castrignos discovered that the total assessed value was actually $1,039,300, based on a full year's assessed value. The Castrignos paid the tax for 2001, but on March 4, 2002, they contacted the Ada County Board of Equalization (BOE) regarding the assessed value of their property and were referred to the County Assessor.

Robert McQuade, the Ada County Assessor, met with the Castrignos and heard their complaint. McQuade then ordered the property to be reassessed and allowed the Castrignos to choose the appraiser to do such an assessment. In March 2002, the appraiser appraised the improvement's value at $750,000, including the unimproved property. After taking the new appraisal into consideration, the Ada County Assessor set the value of the Castrignos' improvements at $675,100, with a $175,000 value assessed for the unimproved land, for a total assessed value of $800,100. Based on the prorated value for occupancy tax purposes, the Castrignos were refunded the difference in the prorated tax assessments: $1,259.70. They did not appeal this new 2001 assessment or the newly reduced occupancy tax.

Instead, the Castrignos filed suit on August 28, 2002, claiming the original 2001 assessment notice failed to notify them of the full-assessed value of their property before the time expired within which to challenge the assessed value and thus, denied them due process. They sought a tax refund, requesting the court to compute their tax using as the total market value for 2001 the $290,400 amount shown on the December 2001 assessment notice, and then prorating their occupancy tax from that amount. Ada County answered and both parties served cross-motions for summary judgment soon thereafter.

The district judge granted Ada County's motion, finding that the court lacked subject matter jurisdiction because the Castrignos had failed to exhaust their administrative remedies by failing to timely appeal the original assessment to the BOE under I.C. § 63-317(4). The court noted that the equitable doctrines of "unclean hands, equitable estoppel, and quasi-estoppel" were not available to the Castrignos to excuse their failure to exhaust administrative remedies. The court also determined that even if it had jurisdiction to hear the contest, it would find that Ada County had complied with the statutory requirements regarding calculation of the tax and providing notice, and had properly applied them to the calculation of the Castrignos' occupancy tax. The Castrignos timely filed this appeal.

II. STANDARD OF REVIEW

When the Supreme Court reviews the district court's ruling on a motion for summary judgment, it employs the same standard employed by the district court when originally ruling on the motion. Farmers Ins. Co. v. Talbot, 133 Idaho 428, 431, 987 P.2d 1043, 1046 (1999) (citing Smith v. Meridian Joint Sch. Dist. No. 2, 128 Idaho 714, 718, 918 P.2d 583, 587 (1996)). Summary judgment is appropriate when "the pleadings, depositions, admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). Further, the construction and application of a legislative act are pure questions of law as to which the Court exercises free review. Idaho State Ins. Fund v. Van Tine, 132 Idaho 902, 980 P.2d 566 (1999).

The valuation placed on property by the Assessor for tax purposes is presumed to be correct. Greenfield Vill. Apartments, L.P. v. Ada County, 130 Idaho 207, 209, 938 P.2d 1245, 1247 (1997). Therefore, the burden of proof lies with the party challenging the assessment to show by clear and convincing evidence that he is entitled to relief. Id. Clear and convincing evidence refers to "a degree of proof greater than a mere preponderance." Matter of Jenkins, 120 Idaho 379, 383, 816 P.2d 335, 339 (1991) (citing Molyneux v. Twin Falls Canal Co., 54 Idaho 619, 35 P.2d 651 (1934)). Relief can be granted only if the Assessor's valuation is "manifestly excessive, fraudulent or oppressive; or arbitrary, capricious and erroneous." Greenfield Vill. Apartments, 130 Idaho at 209, 938 P.2d at 1247 (citing Merris v. Ada County, 100 Idaho 59, 64, 593 P.2d 394, 399 (1979)).

III. ANALYSIS

The basis of the Castrignos' claim is that Ada County made an improper assessment of the improvements on their real property for tax year 2001 and then failed to properly notify them of the actual full-year true appraised value of their property so they could determine whether to appeal the appraisal to the BOE. Although the Castrignos try to characterize their claims in terms of a defective tax assessment notice, the action is in substance a request for judicial relief from the Ada County Assessor's decision determining the Castrignos' occupancy tax liability. As such, I.C. § 63-317(4) mandates the exclusive method for attacking the Ada County Assessor's valuation — to appeal to the Board of Equalization and follow the procedure provided for such appeals. See also I.C. § 63-501 et seq.

A. The District Court Lacked Jurisdiction

This Court has previously held that Idaho statutes providing a remedy against an excessive, erroneous or improper assessment of property by county officials constitute the exclusive method for contesting an assessment. See Washburn-Wilson Seed Co. v. Jerome County, 65 Idaho 1, 138 P.2d 978 (1943). The Court wrote:

It is a well settled rule of law that statutory remedies of this nature are exclusive and that a taxpayer may not maintain an action against a county for a general money judgment for the amount of taxes erroneously or illegally exacted, where the tax is not absolutely void.

Id. at 8, 138 P.2d at 981 (cited with approval in Fairway Dev. Co. v. Bannock County, 119 Idaho 121, 804 P.2d 294, 299 (1990)

). Likewise, in Fairway Development, the Court once again made it clear that pursuit of statutory administrative remedies in tax assessment complaints is a condition precedent to judicial review. Fairway Development,

119 Idaho at 124,

804 P.2d at 297.

The Castrignos argue that Washburn-Wilson and Fairway Development do not apply to this case because those decisions dealt with appeals regarding excessive assessments instead of an allegation of impropriety regarding an assessment notice. They point out that the appellants in those cases simply failed to make use of the administrative process, while in this particular case the Castrignos argue they were denied the ability to make use of the administrative process because of a defective notice which did not adequately apprise them of the actual appraised value — a factual difference they argue should lead to an exception to the rule. However, it is important to note the nature of the Castrignos' claims. They are asking the courts to act as the BOE and determine the Castrignos' correct tax liability and issue a tax refund in the absence of a prior administrative adjudication. The Castrignos cite no authority for the proposition that a district court has jurisdiction to decide the merits of an excessive assessment case without having exhausted...