City of Huntington v. Bacon

• Decision Date: 14 June 1996
• Docket Number: 23070,Nos. 23067,s. 23067
• Citation: 196 W.Va. 457,473 S.E.2d 743
• Court: West Virginia Supreme Court
• Parties: , 111 Ed. Law Rep. 1001 The CITY OF HUNTINGTON, a West Virginia Municipal Corporation, Plaintiff Below, Appellee, v. John A. BACON and Carole A. Bacon, Defendants Below, Appellants. The CITY OF HUNTINGTON, a West Virginia Municipal Corporation, Plaintiff Below, v. The CABELL COUNTY BOARD OF EDUCATION, a West Virginia Public Corporation, Defendant Below.

Page 743

473 S.E.2d 743

196 W.Va. 457, 111 Ed. Law Rep. 1001

The CITY OF HUNTINGTON, a West Virginia Municipal

Corporation, Plaintiff Below, Appellee, v. John A. BACON and Carole A. Bacon, Defendants Below, Appellants.

The CITY OF HUNTINGTON, a West Virginia Municipal

Corporation, Plaintiff Below, v. The CABELL COUNTY BOARD OF EDUCATION, a West Virginia Public

Corporation, Defendant Below.

Nos. 23067, 23070.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 23, 1996.

Decided June 14, 1996.

Syllabus by the Court

1. "A circuit court's entry of summary judgment is reviewed de novo." Syllabus point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

2. "Collateral estoppel will bar a claim if four conditions are met: (1) The issue previously decided is identical to the one presented in the action in question; (2) there is a final adjudication on the merits of the prior action; (3) the party against whom the doctrine is invoked was a party or in privity with a party to a prior action; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action." Syl. pt. 1, State v. Miller, 194 W.Va. 3, 459 S.E.2d 114 (1995).

3. " 'Municipalities have no inherent power with regard to the exercise of the functions of their government. Such power depends solely upon grants of power by Acts of Legislature, and the Legislature may at any time modify, change or withdraw any power so granted by general law in conformance with the provisions of the Constitution, Article VI, Section 39(a).' Point 2, Syllabus, State ex rel. Alexander v. The County Court of Kanawha County, et al., 147 W.Va. 693[, 130 S.E.2d 200 (1963) ]." Syl. pt. 1, State ex rel. Plymale v. City of Huntington, 147 W.Va. 728, 131 S.E.2d 160 (1963).

4. "The character of a tax is determined not by its label but by analyzing its operation and effect." Syl. pt. 2, City of Fairmont v. Pitrolo Pontiac-Cadillac, 172 W.Va. 505, 308 S.E.2d 527 (1983).

5. "The essential characteristic of an ad valorem tax, as its name suggests, is that the tax is levied according to the value of the property. Also, assessment on a regular basis is a common characteristic." Syl. pt. 3, City of Fairmont v. Pitrolo Pontiac-Cadillac, 172 W.Va. 505, 308 S.E.2d 527 (1983).

6. An ordinance which imposes a municipal service fee pursuant to W. Va.Code, 8-13-13 [1971] upon the owners of buildings at an annual rate plus a percentage based upon the square footage of space contained in each structure on the lot for the sole purpose of defraying the cost of fire and flood protection services is a user fee rather than a tax and therefore, is not in violation of the Tax Limitation Amendment found in W. Va. Const. Art. X, § 1.

7. "The Board of Education of a school-district is a corporation created by statute with functions of a public nature expressly given and no other; and it can exercise no power not expressly conferred or fairly arising from necessary implication, and in no other mode than that prescribed or authorized by the statute." Syl. pt. 4, Shinn v. Board of Education, 39 W.Va. 497, 20 S.E. 604 (1894).

8. Pursuant to W. Va.Code, 18-5-9 [1933], a county board of education is authorized to pay a municipal service fee imposed by a municipality for fire and flood protection services pursuant to W.Va.Code, 8-13-13 [1971] in order to protect the health of its pupils and in order to keep its school grounds and buildings in good order.

J. William St. Clair, St. Clair & Levine, Huntington, for Appellants.

Jendonnae L. Houdyschell, Assistant City Attorney, Huntington, for Appellee.

James Allan Colburn, Baer, Colburn & Morris, L.C., Huntington, for Defendant.

Jendonnae L. Houdyschell, Assistant City Attorney, Huntington, for Plaintiff.

Paul T. Boos, Kevin A. Stryker, Office of City Solicitor, Wheeling, for Amicus Curiae City of Wheeling.

John Preston Bailey, Harry L. Buch, Christopher Paull Riley, Bailey, Riley, Buch & Harman, L.C., Paul C. Camilletti, Camilletti Sacco & Pizzuti, Wheeling, for Amicus Curiae Wheeling College, Inc. and Rev. Bernard W. Schmitt.

James W. Withrow, Vaughan & Withrow, Charleston, for Amicus Curiae West Virginia Municipal League, Inc.

McHUGH, Chief Justice.

The two cases before us were consolidated for argument and opinion. In the first case, the appellants, John Bacon, Carole Bacon, and other owners of buildings in the City of Huntington (hereinafter "the Bacons") appeal the April 25, 1995 order of the Circuit Court of Cabell County which granted summary judgment for the City of Huntington. In the second case, the Circuit Court of Cabell County certified a question to this Court from a declaratory judgment action in which the City of Huntington (hereinafter "City") and the Cabell County Board of Education (hereinafter "Board of Education") are parties. ¹

Both cases involve the resolution of the following issue: Whether the City's municipal service fee imposed upon owners of buildings at an annual rate plus a percentage based upon the square footage of space contained in each structure on the lot in order to defray the cost of fire and flood protection services is a fee or tax. For reasons explained below, we find the municipal service fee to be a fee and not a tax.

I.

In order to facilitate an understanding of how the two cases arose, a history of the municipal service fee in Huntington needs to be discussed. Furthermore, the procedural history of each case should be noted.

A.

History of the municipal service fee

In 1990 the City passed an ordinance imposing a municipal service fee in order to defray the cost of providing fire and flood protection services:

On or after July 1, 1990, there is hereby imposed upon all users of Municipal services a municipal service fee for each lot or parcel of land containing any building or structure owned by each user. The fee shall be imposed at an annual rate of seventy dollars ($70.00) per lot plus $0.0375 per square foot of floor space contained in each building or structure existing on each such lot. ²

Ordinance § 773.03 (footnote added). The term "user" in the above ordinance is defined in the following manner:

For purposes of this article, 'user of municipal services' and 'user' refers to any person, firm, corporation or governmental entity of any kind owning any building or structure, whether residential, commercial, governmental or otherwise, within the limits of the City which benefits from fire and/or flood protection services provided by the City.

Ordinance § 773.02.

In 1991 the City amended ordinance § 773.03 by increasing the rate to $80.00 per lot and $0.0575 per square foot. Additionally, that amendment allocated $250,000.00 of the municipal service fee collected between 1991 and 1994 to the improvement of streets and municipal infrastructure. According to the City, since 1994, the municipal service fee is no longer being used to improve streets and municipal infrastructure.

B. The Bacons

The City filed suit against the Bacons in order to collect the municipal service fee assessed against them. The Bacons maintained they were not required to pay the municipal service fee because the fee was a tax which violated the Tax Limitation Amendment found in W. Va. Const. Art. X, § 1. ³ The Bacons relied, inter alia, upon United States v. City of Huntington, 999 F.2d 71 (4th Cir.1993), cert. denied, 510 U.S. 1109, 114 S.Ct. 1048, 127 L.Ed.2d 371 (1994), which held the municipal service fee was a tax which an agency of the federal government was not obligated to pay pursuant to the Supremacy Clause of the Constitution of the United States. ⁴ More specifically, the Bacons argued that the City of Huntington case collaterally estops the City from raising the issue of whether the municipal service fee is a tax or fee in state court.

The circuit court disagreed and concluded that the municipal service fee was a user fee which the City properly imposed upon the Bacons pursuant to W. Va.Code, 8-13-13 [1971]. Thus, the circuit court granted the motion for summary judgment by the City thereby ordering the Bacons to pay the municipal service fee.

The Bacons have filed the appeal now before us asserting that the application of the doctrine of collateral estoppel mandates the circuit court to uphold the Fourth Circuit's determination that the municipal service fee is a tax in violation of the Tax Limitation Amendment of our State Constitution. In the alternative, the Bacons maintain that the municipal service fee is a tax pursuant to state law which also violates the Tax Limitation Amendment. Lastly, the Bacons assert that even if the municipal service fee is a fee, it is unreasonably applied to them.

C. Cabell County Board of Education

On February 16, 1989, the City brought a declaratory judgment action pursuant to W.Va.Code, 55-13-1 [1941] in order to seek a declaration of its rights to recover certain municipal fees assessed against the Board of Education. On June 22, 1995, the Circuit Court of Cabell County, sua sponte, issued an order certifying the following question to this Court: "May the City of Huntington continue to impose its Municipal Service Fee for Fire and Flood protection upon the Board of Education of Cabell County, West Virginia in light of [United States v. City of Huntington, 999 F.2d 71 (4th Cir.1993) ]?"

The circuit court answered the question in the affirmative, holding that the City of Huntington case from the Fourth Circuit Court of Appeals did not bar the City from seeking the municipal service fee from the Board of Education. Implicitly, the circuit court determined the municipal service fee was a fee and not a tax. Thus, the circuit court concluded the fee could be assessed against the Cabell County Board of Education.

The Board of Education, in the action now before us, maintains that the municipal service fee is a tax (either because the collateral estoppel doctrine mandates the circuit court to apply the...