Centrium Group v. State Bd. of Tax Com'rs

• Citation: 599 N.E.2d 242
• Decision Date: 17 September 1992
• Docket Number: No. 02T10-9103-TA-00010,02T10-9103-TA-00010
• Parties: The CENTRIUM GROUP, Petitioner, v. The STATE BOARD OF TAX COMMISSIONERS, Bart Blosser, Allen County Assessor, Patricia L. Steigerwald, Allen County Treasurer, Linda K. Bloom, Allen County Auditor, and Daniel E. Patrick, Wayne Township, Allen County Assessor, Respondents.
• Court: Tax Court of Indiana

Page 242

599 N.E.2d 242

The CENTRIUM GROUP, Petitioner, v. The STATE BOARD OF TAX COMMISSIONERS, Bart Blosser, Allen

County Assessor, Patricia L. Steigerwald, Allen County

Treasurer, Linda K. Bloom, Allen County Auditor, and Daniel

E. Patrick, Wayne Township, Allen County Assessor, Respondents.

No. 02T10-9103-TA-00010.

Tax Court of Indiana.

Sept. 17, 1992.

Joseph W. Foye, Joseph W. Kimmell, Baker & Daniels, Fort Wayne, for petitioner.

Linley E. Pearson, Atty. Gen., Ted J. Holaday, Deputy Atty. Gen., Indianapolis, G. William Fishering, Allen County Atty. Staff, Fort Wayne, for respondents.

FISHER, Judge.

The Petitioner, The Centrium Group (Centrium), appeals the final determination of the Respondent State Board of Tax Commissioners (the State Board) denying Centrium's request for a refund of penalties assessed under IND.CODE 6-1.1-37-10 for delinquent real property taxes.

ISSUE

Whether the penalty was properly assessed against Centrium?

FACTS

On June 6, 1983, Centrium, an Indiana general partnership, entered into a "Ground Lease and Agreement to Purchase Real Estate" (the Agreement) with Associated Dry Goods Corporation (Associated) and Ayres Realty Corporation (Ayres). Under the Agreement, Centrium purchased the old L.S. Ayres department store building at 200 East Berry Street in Fort Wayne and leased the underlying land for fifteen years. The Agreement required Centrium to pay all property taxes on the land, and to purchase the land at the end of the term.

The thirty-six page Agreement, which listed Centrium's then current mailing address on page twenty-seven, was filed with the Allen County Recorder (the Recorder) on June 7, 1983. The Allen County Auditor (the Auditor), however, was not notified of the transaction, no entry was made on the transfer books, and the Allen County Treasurer (the Treasurer) continued to mail tax notices as though the transaction had not After the taxes due on Lot I in 1984, 1985, and May of 1986 went unpaid, the Auditor put the property up for tax sale in August 1986. Centrium read the published notice of the pending sale on August 4, 1986, and four days later paid the delinquent taxes of $159,584 and a penalty of $40,995.08.

taken place. In the county tax records, the property had long been divided into two recorded lots, the lot on which the vacant department store building stood (Lot I), and an adjacent parking lot (Lot II). The Treasurer sent the notices for Lot II to Associated in Indianapolis, which forwarded them to Centrium. The notices for Lot I, however, were sent to the vacant department store and returned undelivered.

On March 23, 1987, Centrium timely filed its Form 133 Petition for Correction of Error ¹ and its Form 17T Petition for Refund, ² claiming the Auditor's failure to determine Centrium's address rendered the penalty illegal. The State Board denied the petition on July 31, 1989, and Centrium brought this original tax appeal on March 11, 1991. Additional facts will be supplied as necessary.

DISCUSSION AND DECISION

When acting within the scope of its authority, the State Board is accorded great deference, Rogers v. State Bd. of Tax Comm'rs (1991), Ind.Tax, 565 N.E.2d 398, 399, and the court will not disturb a final determination of the State Board unless the determination is arbitrary or capricious, an abuse of discretion, contrary to law, or unsupported by substantial evidence. Id. Here, Centrium claims the State Board's determination was contrary to law because Centrium suffered a violation of its due process rights under the Fifth and Fourteenth Amendments to the United States Constitution as a result of the Auditor's wrongful failure to ascertain Centrium's address.

As Centrium correctly notes, county auditors are, and have been at all times relevant to this case, required to maintain transfer books containing "a description, for the purpose of taxation, of land that is conveyed by deed or partition, the date of the conveyance, the names of the parties, and the post office address of the grantee." IND.CODE 6-1.1-5-4(a). These records are used to generate the tax duplicate, or roll of property taxes for the county, which the county auditor forwards to the county treasurer. IND.CODE 6-1.1-22-3. Using the tax duplicate, the county treasurer then mails the property tax statements to the last known address of the persons responsible for the taxes. IND.CODE 6-1.1-22-8. If the taxes are not paid in a timely manner, penalties are added to the tax bill. IC 6-1.1-37-10. If the taxes remain delinquent for more than fifteen months, the county auditor must institute tax sale proceedings under IND.CODE 6-1.1-24-1 et seq. Prior to the sale, the county auditor must publish notice of the sale and send notice of the sale to the property owner at the owner's last known address. IND.CODE 6-1.1-24-3, 6-1.1-24-4.

Within this statutory framework for collecting taxes and selling property for delinquent taxes, the question of the scope of county auditors' duty to determine a taxpayer's last known address has engendered a substantial amount of recent litigation. See, e.g., Smith v. Breeding (1992), Ind.App., 586 N.E.2d 932; Holland v. King (1986), Ind.App., 500 N.E.2d 1229. In 1990, the court of appeals decided Elizondo v. Read (1990), Ind.App., 553 N.E.2d 849, on reh'g, 556 N.E.2d 959, holding that auditors are required to "check...