Dunn v. Board of Property Assessment

Decision Date01 June 2005
Citation877 A.2d 504
PartiesLawrence W. DUNN and Carol L. Dunn, his wife, Coin Flip Associates, a Pennsylvania General Partnership, Mayview Road Associates Trust Agreement, Highland Farms Incorporated and Lowries Run Road Trust Agreement, on behalf of all similarly-situated taxpayers v. The BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW OF ALLEGHENY COUNTY and County of Allegheny and All Local Taxing Authorities Located in Allegheny County. James T. Beebout and Karen L. Ferri, on behalf of themselves and others similarly-situated v. The Board of Property Assessment, Appeals and Review of Allegheny County and County of Allegheny and All Local Taxing Authorities Located in Allegheny County. Appeal of: Lawrence W. Dunn and Carol L. Dunn, his wife, Coin Flip Associates, a Pennsylvania General Partnership, Mayview Road Associates Trust Agreement, Highland Farms Incorporated, and Lowries Run Road Trust Agreement, on behalf of all similarly-situated taxpayers.
CourtPennsylvania Commonwealth Court

Dusty E. Kirk and Samuel P. Kamin, Pittsburgh, for appellants.

Ira Weiss, Pittsburgh, for appellees.

BEFORE: McGINLEY, Judge, FRIEDMAN, Judge, and KELLEY, Senior Judge. OPINION BY Senior Judge KELLEY

The appellants in this matter (Taxpayers)1 appeal from the order of the Court of Common Pleas of Allegheny County (trial court) dismissing all counts of Taxpayers' second amended class action complaint. We affirm.

On January 1, 1996, the Allegheny County Board of Property Assessment, Appeals and Review (Board) adopted a resolution which froze property assessments for all of the approximately 414,000 properties located in Allegheny County. The following day, the Allegheny County Commissioners adopted a similar resolution intending to freeze the assessments until a county-wide reassessment was completed, or until five years had passed. A number of landowners initiated an action in the trial court (the Miller Litigation) seeking a declaratory judgment in which they alleged, inter alia, that the operation of the assessment system in Allegheny County resulted in a disproportionate tax burden upon them.

On April 18, 1997 and May 22, 1997, the trial court issued two orders in the Miller Litigation that determined that the freeze was unlawful, ordered the Board to undertake a county-wide reassessment, and ordered that remedial steps be taken to alleviate the negative effects of the freeze imposed by the Board and the County Commissioners.2 In early 1998, the Board filed a petition for modification of the trial court's 1997 orders in the Miller Litigation. Based on the modification petition, in January and September of 1998, the trial court issued orders which included the imposition of a two percent increase in the assessed fair market value for all properties in Allegheny County for the 1999 tax year, and an additional two percent increase for the 2000 tax year.

Based upon these orders in the Miller Litigation, on January 1, 1999, the Board mailed a notice to all landowners in Allegheny County that the fair market value of their properties for 1999 will be increased by 2% by court order. As a result, on January 13, 1999, Taxpayers filed a class action complaint in the trial court on behalf of all property owners in Allegheny County, and naming the Board and Allegheny County as defendants.3 On July 16, 1999, the trial court granted Taxpayers' motion for leave to amend their complaint and to add additional defendants. Ultimately, on October 20, 1999, Taxpayers filed the instant second amended class action complaint in which they added all relevant taxing authorities in Allegheny County as additional defendants to the action.4

In the eight-count complaint Taxpayers initially sought class certification to represent all similarly situated taxpayers.5 On December 10, 1999, the Board filed an answer and new matter to Taxpayers' second amended complaint. On December 14, 1999, the Core Defense Committee filed an answer and new matter to Taxpayers' second amended complaint.6 On September 19, 2000, the trial court issued an order denying Taxpayers' motion for class certification. Taxpayers appealed the trial court's order to this Court.7 On March 11, 2002, this Court issued an opinion and order reversing the trial court's order denying class certification, and remanding the matter to the trial court for proceedings consistent with the opinion. See Dunn v. Allegheny County Property Assessment Appeals and Review, 794 A.2d 416 (Pa.Cmwlth.2002).8

In December of 2002, Taxpayers filed a motion for recusal which alleged, inter alia, that as the trial court's orders were the basis of the instant action, the trial court should recuse itself from considering the propriety of those orders. In January of 2003, Taxpayers filed a motion for recusal from its recusal motion in which they alleged that the trial court should recuse itself from considering the recusal motion. On May 27, 2003, the trial court issued an order denying the recusal motion.

On September 12, 2003, the Core Defense Committee filed a motion for judgment on the pleadings. On September 22, 2003, Taxpayers filed a cross-motion for judgment on the pleadings.

On December 23, 2003, the trial court issued an opinion and order dismissing all of Taxpayers' claims for refunds of the taxes paid in the 1999 tax year and the 2000 tax year, and all claims seeking the award of attorney fees. With respect to the claims for refunds, the trial court determined that Taxpayers could not maintain a class action at law or in equity, or an action under 42 U.S.C. § 1983, as they failed to pursue an adequate statutory remedy for a refund of the purportedly improperly collected taxes under Sections 1 and 2 of the Act of May 21, 1943, P.L. 349, as amended, 72 P.S. §§ 5566b, 5566c (Refund Act).9 See Trial Court Opinion 12/23/03 at 6-17.

On April 1, 2004, the trial court issued an opinion and order dismissing all of Taxpayers' remaining claims seeking injunctive and declaratory relief as they are now moot. See Trial Court Opinion 4/1/04 at 2-3 (footnote omitted)10,11 Based on the foregoing, the trial court issued a final order dismissing all counts of Taxpayers' second amended complaint See Id. at 6. Taxpayers then filed the instant appeal to this Court.12

In this appeal, Taxpayers claim: (1) the trial court erred in dismissing all of Taxpayers' claims for a refund of taxes and attorney fees in the second amended complaint without first addressing the constitutionality of its orders imposing the two percent increase in valuations for the tax years 1999 and 2000; (2) the trial court erred in denying their claim for refunds and declaratory and injunctive relief as its orders directing an increase in the assessed value for all properties in Allegheny County violate the Pennsylvania Constitution and statutes; and (3) the trial court erred in denying Taxpayers' motions to recuse.13

Taxpayers first claim that the trial court erred in determining that they were not entitled to receive refunds14 without first addressing the constitutionality of its orders imposing the two percent increase in valuations for the tax years 1999 and 2000. Taxpayers argue that, as in Automobile Trade Association of Greater Philadelphia v. City of Philadelphia, 528 Pa. 233, 596 A.2d 794 (1991), the trial court "put the cart before the horse", and erred in failing to address the constitutional issues before determining the availability of relief in the form of refunds. However, Taxpayers' reliance upon Automobile Trade Association of Greater Philadelphia is misplaced.

In Automobile Trade Association of Greater Philadelphia, automobile dealers and their trade association sought declaratory judgment and refunds of the Philadelphia Mercantile License Tax paid on the basis that the tax was violative of the uniformity requirement of Article 8, Section 1 of the Pennsylvania Constitution. While the matter was pending before the court of common pleas, the tax ordinance was repealed. The court subsequently granted summary judgment in favor of the City of Philadelphia on both the claims for declaratory relief and the claims for refunds. The court concluded that as the grant of retroactive relief is discretionary, it would not grant refunds even if it were to determine that the tax was unconstitutional. As a result, the court avoided addressing the constitutionality of the repealed tax ordinance. Following affirmance by this Court, the automobile dealers and trade association appealed to the Pennsylvania Supreme Court.

In reversing and remanding for further proceedings on the claims for refunds, the Supreme Court noted:

Here, the lower courts relied almost exclusively on the conclusory assertion that requiring refunds would impose a substantial hardship on the City's budget as the basis for denying retroactive application. Little attention was given to determining whether a decision that the tax violated the uniformity requirement was "clearly foreshadowed", the courts merely stating that the taxes had been "collected under a presumptively valid statute." More importantly, there was no discussion of the purpose of the uniformity rule and the effect retroactive or prospective application of a decision invalidating the Mercantile License Tax would have on its operation. This is not surprising, in that the courts did not actually find the tax to be violative of the uniformity provision, but instead avoided deciding that question by addressing the retroactivity question first. In approaching the questions in this manner, putting the cart before the horse, the courts below committed fundamental error.
It makes little sense to follow the precept of avoiding resolution of constitutional questions unless absolutely necessary, where the alternate grounds for decision call into play the reasoning necessary to the constitutional decision. The Chevron Oil [v. Huson, 404 U.S. 97,
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