Coeur D'Alene Lakeshore Owners and Taxpayers, Inc. v. Kootenai County

• Decision Date: 06 April 1983
• Docket Number: No. 13858,13858
• Citation: 104 Idaho 590,661 P.2d 756
• Parties: COEUR D'ALENE LAKESHORE OWNERS AND TAXPAYERS, INC., et al., Plaintiffs-Appellants, v. KOOTENAI COUNTY, et al., Defendants-Respondents.
• Court: Idaho Supreme Court

Page 756

661 P.2d 756

104 Idaho 590

COEUR D'ALENE LAKESHORE OWNERS AND TAXPAYERS, INC., et al., Plaintiffs-Appellants, v. KOOTENAI COUNTY, et al., Defendants-Respondents.

No. 13858.

Supreme Court of Idaho.

April 6, 1983.

James R. Michaud, Coeur d'Alene, for plaintiffs-appellants.

Glen E. Walker, Kootenai County Pros. Atty., Coeur d'Alene, David G. High, Deputy Atty. Gen., Boise, Paul D. McCabe, Coeur d'Alene, for defendants-respondents. SHEPARD, Justice.

This is an appeal from an order of the district court in a complex suit brought as a class action by a large number of taxpayers who are owners of property in Kootenai County against local and state taxing authorities. The issues on appeal are relatively narrow since the order of the district court which is the subject of this appeal granted summary judgment in favor of the defendants on only five of the counts of plaintiffs' complaint, denied plaintiffs' motions for summary judgment, and denied plaintiffs' demand for jury trial. We affirm.

The circumstances which gave rise to the instant action are in many respects similar to those involved in and detailed in this Court's opinion in Justus v. Board of Equalization of Kootenai County, 101 Idaho 743, 620 P.2d 777 (1980), decided some four months prior to the district court's order in the instant case. Those circumstances are, in brief, as follows. In 1976, the Idaho Board of Tax Appeals found gross inequities in the 1976 property tax valuation in Kootenai County. As a result a revaluation plan was designed to revalue all property in Kootenai County within three years, beginning February, 1977. That plan, overly simplified, required the majority of the taxable property in Kootenai County to be revalued to 80% of market value in 1977, the remaining property to be revalued to 80% in 1978, and by the end of 1979, an independent appraiser was scheduled to revalue all of the taxable property in Kootenai County to 100% of market value. Thereafter, a five year cyclical or rotating plan for revaluation would commence in 1980. As noted in Justus, that cyclical program may have been interrupted and changed by I.C. § 63-221 (implementing the 1% initiative). The issues on this appeal arise from the revaluation of property within Kootenai County by an independent appraiser pursuant to a contract with the local taxing authorities.

Plaintiffs filed their complaint on November 1, 1978, which in general alleged that plaintiffs were real property taxpayers in Kootenai County, that the defendant county assessor had the duty to assess real property in Kootenai County, and that the defendants county commissioners and defendant assessor, acting by the direction or with the knowledge of defendant Idaho State Tax Commission, entered into contracts in May, 1977, with defendant Gary Hoagland whereunder Hoagland was to establish the market value of real property in Kootenai County for tax purposes. Ultimately, plaintiffs' complaint was stated in eleven counts. The first four counts allege that the Hoagland contracts were illegal, unconstitutional and void upon various theories. Count five alleged that the 1978 assessment and classification of real properties in Kootenai County was arbitrary, was capricious and resulted in nonuniform and discriminatory allocation of the tax burden in Kootenai County, and demanded that the 1977 property valuation be used in lieu of the 1978 property valuations for the purpose of determining 1978 ad valorem taxes. Count six of plaintiffs' complaint alleged that the method of notifying property owners in Kootenai County was not in conformance with law, therefore plaintiffs' rights of due process were denied. Count seven of plaintiffs' complaint alleged that the three year plan of revaluation of properties in Kootenai County was illegal and unconstitutional, and for that reason again demanded that the 1977 property valuations be utilized in lieu of the 1978 property valuations for the purpose of determining 1978 ad valorem taxes. Count eight again alleged the illegality of the Hoagland contracts and sought injunctive relief against the continued activities of Hoagland in revaluing the real property within Kootenai County, against Hoagland being compensated for his work and against the collection of taxes based upon market valuations resulting from the Hoagland contract. Count nine alleged that the notice to taxpayers was deficient and contrary to the regulations of the Idaho State Tax Commission and hence the taxpayers were deprived of due process. Count ten alleged that the valuation for 1978 tax assessment purposes under color of law violated the rights, privileges and immunities of the plaintiffs and hence came within the purview of acts restrained by § 1983, Title 42 of the United States Code, and that plaintiffs were deprived of the equal protection of the laws guaranteed by the Fourteenth Amendment of the United States Constitution. Count eleven alleged that the Hoagland contracts were void in that the statutory requirements of notice thereof to the public was not given through publication. We view the gravamen of plaintiffs' complaint as involving the validity of the contracts for valuation of real property within Kootenai County as executed between defendants Hoagland and the local taxing authorities.

The record demonstrates that the local taxing authorities did indeed enter into a contract with Hoagland for the valuation of real property within Kootenai County and the contract itself is a part of the record. It appears clear that the work contemplated in the Hoagland contract was not placed for public bid by the local taxing authorities.

During the progress of the litigation, the district court in response to various motions, granted or denied certain relief sought by plaintiffs, i.e., denied certain plaintiffs' motions for summary judgment; denied plaintiffs' demand for injunctive relief during the pendency of the litigation; denied plaintiffs' demand that a special fund be established into which real property taxes should be deposited and granted plaintiffs' motion that the suit be a class action. We deem that none of those actions or orders of the district court are properly before this Court on this appeal. The district court also denied plaintiffs' demand for a jury trial, a matter which we deem is properly before this Court on this appeal.

Upon motion therefor, the district court granted summary judgment in favor of defendants as to counts two, three, four and eleven of plaintiffs' complaint, all of which relate to the alleged invalidity of the Hoagland contracts. The district court also granted summary judgment as to count seven of plaintiffs' complaint, which alleges the illegality of the Kootenai County three year plan for revaluation of real property. Incorporated in the district court's order for summary judgment was its order denying plaintiffs' demand for jury trial and thereafter the district judge executed a Rule 54(b) certificate certifying that there was no just reason for delay and making the above summary judgment order a final judgment for the purposes of appeal under the Idaho Appellate Rules.

Hence, albeit appellants contend otherwise, we view the sole issues presented on this appeal to be asserted errors relating to the district court's order denying a jury trial and granting summary judgment in favor of defendant-respondents as to counts two, three, four, seven and eleven of plaintiffs' complaint.

As to the disposition of count seven of plaintiffs' complaint relating to the alleged illegality and unconstitutionality of the three year plan for the revaluation of real property within Kootenai County, we summarily affirm. The district court correctly predicted the result of this Court's decision in Justus, which dealt with and upheld the legality and constitutionality of that same three year revaluation program.

As to count two of plaintiffs' complaint, it is alleged that the Hoagland contract is in violation of Art. 8, § 3 of the Idaho Constitution, in that the taxing authorities have thereby incurred an unlimited, contingent liability without the assent of two-thirds of the qualified electors of Kootenai County. Art. 8, § 3 of the Idaho Constitution forbids any subdivision of the government from incurring any indebtedness or liability which exceeds in any given year the income and revenue provided for that year without the assent of two-thirds of the qualified electors and provides that any such indebtedness or liability incurred in violation shall be void. That section of the constitution also provides, "that this section shall not be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state ...." Plaintiffs-appellants argue strenuously that the services to be provided by Hoagland in the instant case do not fall into the exception. We disagree.

As earlier noted in Justus, the revaluation plan for Kootenai County was expressly approved by this Court, and at least inferentially therein, the employment of an independent appraiser was also approved. At the time of the inception of the contracts in question, I.C. § 63-221 provided:

"63-221. County valuation program to be carried on by assessor.--It shall be the duty of the county assessor of each county in the state to conduct and carry out a continuing program of valuation of all properties under his jurisdiction pursuant to such rules and regulations as the state tax commission may prescribe, to the end that all parcels of property under the assessor's jurisdiction are appraised at least every five (5) years. The county assessor shall maintain in the respective offices sufficient records to show when each parcel or item of property was last appraised.

The state tax commission is hereby authorized, empowered, and directed to promulgate rules and regulations for the implementation of this program, and to provide any such county assessor with such supervision and...