Harford County v. Saks Fifth Avenue Distribution Co.

• Decision Date: 31 May 2007
• Docket Number: 2005.,No. 26,26
• Citation: 399 Md. 73,923 A.2d 1
• Parties: HARFORD COUNTY, Maryland, et al. v. SAKS FIFTH AVENUE DISTRIBUTION COMPANY.
• Court: Maryland Court of Appeals

923 A.2d 1

399 Md. 73

HARFORD COUNTY, Maryland, et al. v. SAKS FIFTH AVENUE DISTRIBUTION COMPANY.

No. 26, Sept. Term, 2005.

Court of Appeals of Maryland.

April 17, 2007.

Reconsideration Denied May 31, 2007.

Sean P. Carven, Asst. County Atty. (Robert S. McCord, County Atty., Nancy L. Giorno, Deputy County Atty., Gregory A. Rapisarda, all on brief), for petitioners/cross-respondents.

K. Donald Proctor (Proctor & McKee, P.A., on brief), Towson, for respondent/cross-petitioner.

Charles W. Thompson, Jr., County Atty., Marc P. Hansen, Chief, General Counsel Division, Karen L. Federman Henry, Principal Counsel for Appeals, Scott R. Foncannon, Associate County Atty., amicus curiae.

Argued before BELL, C.J., RAKER,^* WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

BELL, C.J.

This case involves a claim for interest allegedly due to Saks Fifth Avenue Distribution Company, the respondent/cross-petitioner ("Saks"), from the petitioners/cross-respondents (collectively "the petitioners"), Harford County, Maryland ("the County") and the City of Aberdeen ("the City").¹ The genesis of the dispute is a private lease arrangement in respect to certain personal property² utilized by Saks in its distribution center. Under the terms of that lease, the lessor of the personal property was required to pay the taxes due in respect to the property, which Saks then was required to reimburse, as part of its lease payments. During the period of time relevant in the case sub judice, the lessor paid the personal property taxes and Saks reimbursed the lessor as required under the lease.

The problem arose when, in the years 1998, 1999, and 2000, Saks inadvertently included the same personal property on which the lessor had already paid taxes, on its own personal property tax returns. That personal property was assessed by the State Department of Assessments and Taxation ("the SDAT") and, based on that assessment, both the County and the City issued Saks additional personal property tax bills. As indicated, the property assessed was the same personal property on which the lessor had already paid personal property taxes.

Saks paid the bills, not realizing that it was paying for the second time, the same taxes for which it had already reimbursed the lessor. In fact, Saks, by its mistake, was paying the taxes twice, once indirectly as part of its lease obligations, by reimbursing the lessor who had paid the personal property taxes, and once by paying directly to the petitioners, the very taxes for which it had reimbursed the lessor. The petitioners clearly were paid twice for the same taxes and do not argue otherwise. Nor do they dispute that refunds, which they both voluntarily paid, were due Saks. The only issue was whether Saks was due interest on the refunds.

When the petitioners did not pay interest to Saks voluntarily, Saks filed in the Circuit Court for Harford County a suit against the petitioners claiming that interest was due. Saks did not prevail in the Circuit Court, prompting its appeal to the Court of Special Appeals. That court, in an unreported opinion, reversed the judgment of the Circuit Court. Holding that interest was due Saks, it also remanded the case to the Circuit Court for a determination of whether, in addition to regular interest, pre-judgment interest on the refund interest due, was required to be paid by the petitioners. We granted a writ of certiorari upon the petition of the governmental entities and Saks's conditional cross-petition. Harford County v. Saks, 388 Md. 97, 879 A.2d 42 (2005).

In the petition for certiorari, the petitioners asked:

"Whether the Court of Special Appeals erred as a matter of law when it interpreted and applied the refund provisions of Md.Code Ann., Tax-Property (2001 Repl.Vol.) so as to create a new right to interest which was not present under t he previous codification."

Saks's conditional cross-petition asked this Court to consider, in the event that we granted the petitioners' petition:

"Whether it is entitled, as a matter of right, to pre-judgment interest on the statutory sums due from the County and the City...."

We answer the specific question posed by the petitioners in the negative and that by Saks in the affirmative.

I.

The general requirements applicable at the time of the present case were found in various sections of the Tax-Property Article. Section 11-101³ of the Tax-Property Article requires entities, such as Saks, to file annual reports to the SDAT. Upon those entities' listing in those reports, as they were obliged to do, of their personal property situate in the State of Maryland, the SDAT would assess the value of that property.⁴ In addition to notifying the taxpayers of the assessments, local jurisdictions were sent certifications of the valuations. Based on those assessments, the local jurisdictions applied their tax rates and issued bills to the respective taxpayers for personal property taxes. The taxpayers could appeal the assessments and the tax bills, pursuant to §§ 14-501 through 14-515 of the Tax-Property Article, but while the appeal was pending, the taxpayer, by posting a bond, pursuant to the provisions of § 14-514,⁵ would obtain a stay of the obligation to pay the tax bill. Unless its obligation was stayed, the taxpayer had to pay the tax bill, pending the outcome of the appeal.

Generally, appeals with respect to the amount of the SDAT's valuation of a taxpayer's personal property must be taken within 45 days of the date of the SDAT's notice of assessment. Section 14-504 provides:

"(a) In general.—For personal property assessed by the Department, any taxpayer, a county, a municipal corporation, or the Attorney General may submit a written appeal to the Department as to a value or classification in a notice of assessment on or before 45 days from the date of the notice.

"(b) Hearing required.—If the requirements of subsection (a) of this section are met, the Department shall hold a hearing as provided under § 14-510 of this subtitle." (Emphasis added.)

In the case of a taxpayer filing an inaccurate report in respect to personal property, however, the taxpayer, pursuant to § 14-505, has three years in which to file an appeal.⁶ Section 14-505 provides:

"(a) In general.—For personal property assessed by the Department, the owner who reported cost or market information for the personal property to the Department but failed to report the information accurately may appeal the value or classification of the personal property set forth in the notice of assessment by submitting a petition for review to the Department if:

"(1) the owner claims that the personal property is valued at a higher value than if the information had been reported accurately; and

"(2) the appeal is made within 3 years of the date of the notice of assessment.

"(b) Hearing required.—If the requirements of subsection (a) of this section are met, the Department shall hold a hearing as provided under § 14-510 of this subtitle." (Emphasis added).⁷

The specific section from which the present controversy arose was § 14-611 of the Tax-Property Article. Section 14-611 provided, in respect to any refunds of taxes properly due a taxpayer, that:

"Any money paid by a taxpayer that exceeds the amount properly chargeable under the determination shall be refunded at the same rate of interest that the taxes would have borne if the taxes were determined to have been overdue." (Emphasis added.)⁸

Saks filed personal property tax returns with the SDAT, listing its personal property for the relevant years. That property was assessed by the SDAT as follows: 1998 — $12,955,240; 1999-$15,918,999; 2000-$14,354,790. Saks was issued tax bills based upon these assessments, and it paid those bills. Subsequently, Saks filed amended personal property reports in compliance with § 15-505.⁹ The SDAT then issued revised certifications of the assessments for the years in question: 1998-$3,014,730; 1999-$2,724,240; 2000— $1,796, 900. The re-assessments resulted in a determination that Saks had overpaid the County in the amount of $835,219.72 and overpaid the City in the amount of $453,576.00. The County and the City refunded those sums to Saks. Neither the County nor the City paid interest on the refunded amount, however, notwithstanding the language of § 14-611, the statute in effect at the relevant time.

Saks maintains that it is entitled to both the payment of interest on the refunded taxes and pre-judgment interest on that interest.

II.

After denying the motion for summary judgment filed by Saks, the Circuit Court for Harford County dismissed the complaint for failure to state a claim. In light of our holding that the trial court erred in applying the law with respect to summary judgment and because we believe that it is unlikely that the trial court would have dismissed the case sua sponte had it applied the correct standard, we will review the matter under the correct standard.

A party moves for summary judgment on the grounds that "there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law."¹⁰ We review a trial court's decision on a motion for summary judgment de novo. Haas v. Lockheed Martin Corp., 396 Md. 469, 478, 914 A.2d 735, 740 (2007). In conducting that review, we seek to determine whether any material facts are in dispute and, if they are, we resolve them in favor of the non-moving party. Id. at 479, 914 A.2d at 741. If there are no material facts in dispute, the aim of the review is to determine whether the summary judgment decision was correct as a matter of law. Hill v. Knapp, 396 Md. 700, 711, 914 A.2d 1193, 1199 (2007); Haas, 396 Md. at 479, 914 A.2d at 741, citing Livesay v. Baltimore, 384 Md. 1, 9, 862 A.2d 33, 38 (2004). The parties do not dispute the relevant facts of this case and present two issues, both purely legal. Accordingly, the only issue for us to resolve is whether those two issues were correctly decided, as a...