Crest Communications v. Kuehle

• Decision Date: 26 July 1988
• Docket Number: No. 69813,69813
• Citation: 754 S.W.2d 563
• Parties: CREST COMMUNICATIONS, Appellant, v. Harold KUEHLE, et al., Respondents.
• Court: Missouri Supreme Court

Page 563

754 S.W.2d 563

CREST COMMUNICATIONS, Appellant, v. Harold KUEHLE, et al., Respondents.

No. 69813.

Supreme Court of Missouri En Banc.

July 26, 1988.

R. Michael Howard, Larry H. Ferrell, Warren L. Wells, City Atty., Cape Girardeau, Paul Roger Ellis, Jackson, for respondents.

J. Kent Lowry, Hallie H. Gibbs, II, Jefferson City, for appellant.

RENDLEN, Judge.

Plaintiff, Crest Communications, appeals the trial court's dismissal of its petition seeking to recover from the defendant collectors of revenue taxes "mistakenly or erroneously paid" under the terms of § 139.031.5. ¹ This appeal involves the construction of a revenue law and jurisdiction is in this Court. Mo. Const. art. V, § 3. We reverse and remand.

On review of dismissal of a petition, our duty is to determine if the facts pleaded and reasonable inferences to be drawn from the allegations, when viewed in the light most favorable to plaintiffs, demonstrate any basis for relief. We accept as true all facts averred in the petition, construe all averments liberally and favorably to the plaintiff and determine whether they invoke principles of substantive law upon which relief may be granted. Jacobs v. Jacobs, 272 S.W.2d 185, 188 (Mo.1954); San Luis Trails Association v. E.M. Harris Building Co., 706 S.W.2d 65, 67 (Mo.App.1986).

So viewed, the petition recites that plaintiff operates a cable television business in Cape Girardeau and Jackson, Missouri, and for the tax year beginning January 1, 1985, filed its property list declaring taxable real and tangible personal property of $309,577. The assessor of Cape Girardeau County subsequently issued a notice of increase asserting an assessed value of $1,148,930. Understandably dissatisfied with the assessor's conclusion, plaintiff initiated a timely review by the county board of equalization, and when no relief was afforded there, appealed to the state tax commission. While in the midst of this administrative review process, plaintiff paid the 1985 taxes under protest and filed its property assessment list for 1986, computing its taxable property in the same manner as the previous year and declaring a value of $278,028. This time plaintiff received no notice of increase from the county assessor; however, on or before December 31, 1986, it "mistakenly or erroneously" paid the 1986 tax liability shown on its tax bill and calculated on an assessed valuation of $1,148,930 without indicating such taxes were paid under protest. On January 23, 1987, the state tax commission issued its decision reducing plaintiff's total assessed valuation for 1985 from $1,148,930 to $519,265 ², and on March 16 plaintiff made written application for refund of that portion of its 1986 taxes calculated on the increased valuation added by the assessor. The county collector denied plaintiff's application for refund and this action against the Cape Girardeau County Collector and the collectors of the cities of Jackson and Cape Girardeau followed, by which plaintiff seeks recovery pursuant to § 139.031.5 of all 1986 taxes paid beyond that due on the self-assessed value of $278,028. Defendants filed motions to dismiss, asserting that the taxes in question were neither mistakenly nor erroneously paid within the meaning of § 139.031.5 and that plaintiff was precluded from seeking other relief by its failure to pay the taxes under protest. The city collectors of Jackson and Cape Girardeau further asserted the statutes in question authorize relief only against county collectors. The trial court sustained defendants' motions to dismiss with prejudice.

We are initially confronted with the question of whether the property valuation shown on the 1986 tax bill constituted an increase, notice of which must be given to the taxpayer under § 137.180. That section provides:

137.180. Valuation increased--assessor to notify owner--appeals to county board of equalization.--Whenever any assessor shall increase the valuation of any real property he shall forthwith notify the record owner of such increase, either in person, or by mail directed to the last known address; every such increase in assessed value made by the assessor shall be subject to review by the county board of equalization whereat the landowner shall be entitled to be heard, and the notice to the landowner shall so state.

(Emphasis added.)

Defendants contend that no notice of increase was required in this case because "the assessed valuation was the same as that for the previous year, 1985." However, that argument ignores the importance of a taxpayer's responsibilities and the assessor's statutory duties under §§ 137.115, 137.120, and 137.155. Under those sections, the assessor is to require the taxpayer "make a correct statement of all taxable real property" located in the county and owned by, or under the care or management of, the taxpayer, as well as "all taxable tangible personal property," § 137.115, and the taxpayer must list, among other items, all of his real estate "and its value," § 137.120. The list of property must be sworn to under oath, § 137.155, and making a false or fraudulent list subjects the taxpayer to "double assessment" as well as penalties for perjury. § 137.285. A taxpayer's failure to deliver the required list results in "double assessment" of property which should have been listed, and a $50 penalty is imposed on the assessor if he "neglects" or "refuses" to assess the penalty against the taxpayer, with the caveat "the assessor may omit assessing the penalty in any case where he is satisfied the neglect is unavoidable and not willful."

It is against this background that we examine the notice provision of § 137.180. Prior to the adoption of that section, it had been held that "the property owner is entitled to rely upon the assessment being made in accordance with his listed valuation, unless and until he has knowledge or information or is notified to the contrary by the assessing officials[,]" and "a taxpayer is entitled to notice in some form other than the mere filing of the assessment roll, before he can be made to pay a subsequently changed valuation." Wymore v. Markway, 89 S.W.2d 9, 14 (Mo.1935). Given the continued importance of the taxpayer's listed valuation under the current statutory scheme and the notice rule existing at the time of § 137.180's adoption, illustrated by Wymore, the "increase" referred to in the statute necessarily means an increase above the valuation contained in the taxpayer's property list for the pertinent tax year. See Mo. Atty. Gen. Op. No. 18 (February 28, 1957). Defendants' argument that there can be no "increase" in valuation when the assessor assesses the property at the same valuation as the prior tax year ignores the role of the taxpayer's property list and the rationale underlying § 137.180's notice requirement. The taxpayer is not to be charged with knowledge that the assessor will reject the valuation contained on the property list, sworn to under oath and declared pursuant to statutory mandate, simply because it differs from the valuation placed on the property for the preceding year. The taxpayer is entitled to rely on the valuation contained in his property list until he receives notice that it has been rejected by the assessor. Wymore, 89 S.W.2d at 14.

Our conclusion is further supported by cases considering the effect of an assessor's failure to provide the taxpayer with notice of increased valuation. In John Calvin Manor, Inc. v. Aylward, 517 S.W.2d 59, 62 (Mo.1974), this Court stated: "It is apparent that the failure to give the notice required by § 137.180 completely frustrates the statutory scheme at the very outset. Without this notice to the taxpayer, the taxpayer remains ignorant of the increased valuation put upon the taxable property and consequently does not have the opportunity to appeal to the board of equalization during the limited period allowed for such appeals." The question presented in John Calvin Manor was whether a suit for injunction to prevent the collection of taxes in excess of that due on the valuation submitted by the taxpayer, when the assessor fails to notify the taxpayer of any increase in valuation, is still viable after the enactment of § 139.031's protest procedure. The Court concluded:

It does not appear ... that the legislature intended to abrogate those remedies existing prior to the enactment of sec. 139.031 nor to make the procedure set forth in sec. 139.031 the exclusive remedy available to a taxpayer. Had the legislature intended to make the procedure set forth in sec. 139.031 the exclusive remedy, we would be confronted with a serious due process claim in cases such as the instant one, where the taxpayer, having been deprived of the statutory notice of the increased assessed valuation and thereby totally deprived of a hearing before the board of equalization and all of his administrative remedies, would have to pay a very substantial sum in order to even question the legality of the assessment.

Id. at 63. The Court further stated "[w]here, as here, the failure to give notice of the increased assessment prevents the taxpayer from pursuing his administrative remedies, the increased assessment made by the assessor is void and, consequently, so is the tax computed thereon...." Id. at 65.

Subsequently, in B & D Investment Co., Inc. v. Schneider, 646 S.W.2d 759 (Mo. banc. 1983), the Court was confronted with a situation in which a taxpayer filed an equitable action to obtain a refund of taxes paid without protest for the years 1976 through 1979, asserting that the assessor improperly increased the assessed valuation in 1976 without sending notice. The Court distinguished the injunction sought in John Calvin Manor from the refund action before it and concluded "[i]n the circumstances of this case, the remedy under § 139.031 provided the taxpayer a fair and adequate remedy as contrasted with the so-called common law action. It is implicit in the decisions of ...