Department of Revenue v. Southern Union Gas Co.

• Decision Date: 23 May 1978
• Docket Number: No. 13338-PR,13338-PR
• Citation: 119 Ariz. 512,582 P.2d 158
• Parties: DEPARTMENT OF REVENUE, Appellant, v. SOUTHERN UNION GAS COMPANY, a corporation and Division One of the State Board of Tax Appeals, Appellees.
• Court: Arizona Supreme Court

Page 158

582 P.2d 158

119 Ariz. 512

DEPARTMENT OF REVENUE, Appellant, v. SOUTHERN UNION GAS COMPANY, a corporation and Division One of the State Board of Tax Appeals, Appellees.

No. 13338-PR.

Supreme Court of Arizona, In Banc.

May 23, 1978.

John A. LaSota, Jr., Atty. Gen., Bruce E. Babbitt, Former Atty. Gen. by Mary Z. Chandler, Asst. Atty. Gen., Phoenix, for appellant.

Evans, Kitchel & Jenckes by David William West, Joseph F. Abate, Phoenix, for appellee Southern Union Gas Co.

Beer, Kalyna & Simon by Olgerd W. Kalyna, Phoenix, for appellee State Board of Tax Appeals.

STRUCKMEYER, Vice Chief Justice.

This is an appeal by the Department of Revenue from the dismissal of its action by the Superior Court on the ground that the Department failed to bring its case to trial under the provisions of A.R.S. § 42-152 A within ninety days. The Court of Appeals, Division One, 118 Ariz. ---, 582 P.2d 182 (App.1977), held that the statute was mandatory. It remanded for reconsideration by the Superior Court for the reason the Superior Court mistakenly believed that dismissal was the only remedy available. We granted review. Opinion of the Court of Appeals vacated. Reversed.

The appellee, Southern Union Gas Company, operates various utility properties in Arizona. In 1974, the Arizona Department of Revenue ¹ fixed the full cash value of appellee's property for tax purposes at $12,400,000. The State Board of Tax Appeals, after a hearing, reduced the full cash value to $10,500,000. On October 29, 1974, the Department of Revenue filed this action in the Superior Court as an appeal from the Board's valuation. On May 30, 1975, seven months later, Southern Union filed a motion to dismiss because the appeal was not heard within ninety days of the date of docketing, as required by A.R.S. § 42-152 A. ² The trial judge granted appellee's motion and dismissed the case.

The Department first advances a vague argument that the word "docketed" as used in the statute is the placing of a case upon a trial calendar and that this has not, in fact, ever been done. The Department's argument is readily resolved by an examination of § 4887 of the 1913 Revised Statutes of Arizona, the predecessor to § 42-152 A. That statute provided that "(u)pon the filing of said notice of appeal * * * the clerk of the superior court shall docket the appeal * * *." We think that it is clear that the docketing of an appeal was to occur contemporaneously with the filing of the appeal in the office of the Clerk of the Superior Court. Hence, the ninety day period begins immediately upon filing. When the statute is so construed, more than ninety days elapsed without a trial in the Superior Court.

Accordingly, we reach the principal issue: what is the legal consequence for noncompliance with the ninety-day provision of the statute?

As a general proposition, statutes may be classified as either mandatory or directory. The word "mandatory" is defined as "containing a command." Black's Law Dictionary 1114 (4th ed. 1968). Black further states:

"A 'mandatory' provision in (a) statute is one the omission to follow which renders the proceedings to which it relates void * * *." Id.

"Directory" is defined by the same authority as:

"A provision in a statute * * * which is a mere direction or instruction of no obligatory force, and involving no invalidating consequence for its disregard * * *." Id. at 547.

In Commonwealth v. Kowell, 209 Pa.Super. 386, 228 A.2d 50, 52 (1967), the court quoted with approval from Pleasant Hills Borough v. Carroll, 182 Pa.Super. 102, 106-107, 125 A.2d 466, 469 (1956), as follows:

"To hold that a provision is directory rather than mandatory, does not mean it is optional to be ignored at will. Both mandatory and directory provisions of the legislature are meant to be followed. It is only the Effect of non-compliance that a distinction arises. A provision is mandatory when failure to follow it renders the proceeding to which it relates illegal and void; it is directory when the failure to follow it does not invalidate the proceedings."

It is therefore apparent that if the ninety-day requirement is a mandatory provision, then its disregard would compel the dismissal of the appeal because the failure to follow the statute would invalidate the proceedings. We do not conclude that the ninety-day provision is mandatory.

The basic rule of statutory construction is for the court to ascertain the legislative intent. Mardian Constr. Co. v. Superior Court,113 Ariz. 489, 557 P.2d 526 (1976). In arriving at the Legislature's intent, the effect and consequences of alternative constructions may be considered. See State v. Stockton, 85 Ariz. 153, 333 P.2d 735 (1958). A mandatory construction will require that litigation involving substantial rights of both the State and appellees must be dismissed without a determination on the merits. A contrary construction, however, permits the judicial resolution of the questions at issue. When the statute is examined in this light, we are not convinced the Legislature intended that the proceeding should be dismissed if not tried within ninety days, for had the Legislature intended such a consequence, it could have plainly spelled it out in appropriate language. Language, mandatory in form, may be deemed directory when the legislative purpose can best be carried out by such construction. Valley Bank v. Malcolm, 23 Ariz. 395, 204 P. 207 (1922). We hold that A.R.S. § 42-152 A, while couched in obligatory language, does not require a dismissal of the action for its violation. The trial court erroneously entered its order of dismissal.

We are aware of the rule that ambiguous tax statutes should be liberally construed in favor of the taxpayer and strictly construed against the state. Corporation Commission v. Equitable Life Assur. Soc. of United States,73 Ariz. 171, 239 P.2d 360 (1951); Arizona Tax Commission v. Dairy & Consumers Coop. Ass'n., 70 Ariz. 7, 215 P.2d 235 (1950). However, we consider that the undesirable consequences of a dismissal is the controlling factor in interpreting the legislative intent.

Southern Union argues at length that it is the duty of the party bringing the tax appeal to have the case set for trial within ninety days. Admittedly, it is the responsibility of an appealing party to expeditiously prosecute the appeal to effect, and, admittedly, dismissal is a proper remedy for failure to so prosecute. Arizona Rules of Civil Procedure, 16 A.R.S., Rule 41(b); Cooper v. Odom, 6 Ariz.App. 466, 433 P.2d 646 (1967). Litigation should be disposed of on its merits. Unless such an unreasonable period of time has elapsed that it can be concluded that a party has abandoned his case or that he has failed to comply with the Rules of Civil Procedure or an order of the court, Rule 41(b), supra, a dismissal should not be ordered. But a violation of this ninety-day provision, without more, such as a showing that the opposing party has suffered substantial detriment, is not sufficient.

We think, moreover, that it is not solely the responsibility of appellant to cause the appeal to be set for trial within ninety days. The duty of the court is to carry out the mandate of the Legislature. Analogous is former Art. 6, § 15 of the Arizona Constitution, which placed the duty on the Superior Court to decide cases within sixty days from their submission to the trial judge. It was held this constitutional provision was directory and that dismissal was not required if the judge failed to decide the case within the time specified. See Cahn v. Schmitz, 56 Ariz. 469, 108 P.2d 1006 (1941), and Williams v. Williams, 29 Ariz. 538, 243 P. 402 (1926). Manifestly, it could hardly be argued that the Superior Court was relieved of the responsibility to rule if counsel did not call the sixty-day period to his attention. A.R.S. § 42-152 A, when reasonably construed means that the Superior Court has the responsibility to set up internal procedures by which the legislative mandate can be carried out.

This cause would be remanded without further discussion except that the Department of Revenue has urged that § 42-152 A has no application to this case in...