Janet H. Lee v. Douglas Cnty. Tax Collector

• Decision Date: 20 December 2022
• Docket Number: TC-MD 220384R,TC-MD 220385R
• Parties: JANET H. LEE, Plaintiff, v. DOUGLAS COUNTY TAX COLLECTOR, Defendant.
• Court: Oregon Tax Court

1

JANET H. LEE, Plaintiff, v. DOUGLAS COUNTY TAX COLLECTOR, Defendant.

Nos. TC-MD 220384R, TC-MD 220385R

Tax Court of Oregon, Magistrate Division, Property Tax

December 20, 2022

CORRECTED ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

RICHARD DAVIS, MAGISTRATE JUDGE

This Corrected Order Granting Defendant's Motion for Judgment on the Pleadings is issued in response to Defendant's letter filed on November 28, 2022. In its letter, Defendant asserts that the court cited the wrong version of ORS 311.505 in its original order. Plaintiff did not respond to Defendant's letter. After reviewing the letter, the court agrees with Defendant. Corrections to the order are underlined. The remainder of the order remains unchanged.

Plaintiff appeals Defendant's denial of a property tax discount the imposition of interest, and two returned payment fees for the 2021-22 tax year. This matter came before the court on Defendant's Motion for Judgment on the Pleadings (Motion), filed August 23, 2022. During the case management conference held September 8, 2022, Plaintiff agreed to file a response to Defendant's motion by September 22, 2022. Plaintiff filed her letter in response (Response) to Defendant's Motion on September 8, 2022, and an additional letter on September 22, 2022.

I. STATEMENT OF FACTS

Plaintiff owns property in Douglas County, Oregon, identified as Accounts R42964 and R54417 (subject property). (Ans at 3.) On November 15, 2021, using Defendant's online electronic payment system, Plaintiff attempted to pay the subject property tax, so that she could take advantage of the statutorily provided three percent discount for paying in full, on or before November 15. (See Compl at 2.) At 7:39 PM on November 15, Plaintiff received an email confirmation of her payment of $3,049. (Id. at 3.)^[1]

On November 19, 2021, Defendant notified Plaintiff via email that her payment had been returned because the bank account from which she attempted to pay was frozen. (Compl at 4.)^[2] That same day, Plaintiff submitted new payments using a different bank account and received an accompanying email confirmation of such payment. (Id. at 5.)

Because Plaintiff's November 15, 2021, payment did not go through, she was charged interest.

On January 31, 2022, Defendant notified Plaintiff by letter that she had been charged a $25 returned payment fee per account, due to her returned payments on November 15. (Ans at 3.) On April 26, 2022, Defendant mailed Plaintiff two installment notices, each of which indicating that the corresponding tax account had no outstanding interest. (Ptf's Ltr, Sept 22, 2022.) In May of 2022, Defendant again mailed Plaintiff a letter stating that she was ineligible for the discount, that she remained responsible for the two returned payment fees, and charging her interest. (Compl at 2.)

In her complaint, Plaintiff alleged that she called Defendant numerous times between November and December of 2021 and that Defendant told her that she had not been charged any additional fees and that she did not overpay. (Compl at 2.) However, also in her complaint, Plaintiff admitted that the payment "mistake was from the account [she] closed in January 22." (Id.)

II. ANALYSIS

Although motions for judgment on the pleadings are generally not favored by the courts, such motions may be useful "when the answering party admits all material facts in a pleading and denies only legal conclusions." Buras v. Dept. of Rev., 17 OTR 282, 284 (2004), aff'd, 338 Or 12, 104 P.3d 1145 (2005). This court has previously stated:

"To withstand judgment on the pleadings, a taxpayer must allege the existence of facts that, within an articulated legal position, provide a basis for relief to a taxpayer. For example, where a taxpayer claims that an item of income is exempt or excluded from income, a taxpayer must allege: (1) a legal framework establishing the exemption or exclusion, and (2) facts that, if true, would satisfy the burden of proving the factual elements of the exemption or exclusion."

Beeler v. Dept. of Rev., 18 OTR 456, 458 (2006) (internal quotations and citation omitted). In ruling on Defendant's Motion, the court assumes that all of the well-pleaded facts in Plaintiff's complaint are true.^[3]

The issues presented are (1) whether Plaintiff is entitled to a property tax discount under ORS 311.505, (2) whether Plaintiff is liable for the returned payment fees, and (3) whether Plaintiff is liable for the accrued interest.^[4]

A. Discount

ORS 311.505 states, in pertinent part, that a one-third payment of property taxes owed is due on or before November 15 of each year. ORS 311.505(1). Payments of two-thirds or more, made on or before November 15, are entitled to a discount. ORS 311.505(3). A two-thirds payment is entitled to a two percent discount. ORS 311.505(3)(a). Full payments are entitled to a three percent discount. ORS 311.505(3)(b). "There is no statutory requirement that the county assessor or tax collector notify a taxpayer that the deadline to qualify for the three percent discount has passed." O'Neill v. Multnomah Cty. Assessor, TC-MD 110957D, WL 851666 at *2 (Or Tax M Div, Mar 13, 2012).

In Kusuma v. Washington County Assessor, TC-MD 210022R, WL 100005 at *1 (Or Tax M Div, Jan 11, 2022), the taxpayers attempted to pay the subject property tax online, on November 11, 2020, to take advantage of the three percent discount, but mistakenly entered the tax account number in the bank account number field, so their payment was rejected by the bank on November 18. The taxpayers were not made aware of the failed payment until November 19. Id. Among other things, the taxpayers argued that they would have been eligible for the discount but for the defendant's delay in notifying them of the failed payment. Id. at *2. Recognizing that "[t]his court has long held it is ultimately the responsibility of the property owner to see that the taxes are paid[,]" the court found that the taxpayers did not meet their burden of proof in establishing that they were eligible for the discount. Id. at *4 (internal quotations and citation omitted). The court further noted that even if the defendant had notified the taxpayers earlier of their failed payment, the taxpayers still would not have been eligible for the discount because the defendant's payment processor itself was not notified of the rejection from the taxpayers' bank until November 18-after the discount deadline. Id. Finally, the court noted that the taxpayers themselves had the ability to monitor their bank account to see if the funds had been withdrawn. Id.

Like in Kusuma, Plaintiff's attempted payment on November 15 failed due to her own mistake. That is, as Plaintiff conceded in her complaint, her payment failed because she attempted to pay from a bank account that was set to be closed in January of 2022. Defendant had no obligation to notify Plaintiff of her failed payment. Plaintiff had the sole responsibility of monitoring her bank account to confirm that the funds had been withdrawn, but she failed to do so. Even had Defendant notified Plaintiff sooner of her failed payment, she still would have been ineligible for the discount because her attempted payment was not confirmed until after business hours on November 15. Defendant would have been unable to notify Plaintiff until November 16 at the earliest, although Defendant likely was not aware itself of the failed payment by that date. See Kusuma, WL 100005 at *4 ("[I]t can take between seven and ten days for an [automated clearinghouse] payment initiated on [the Washington County Assessor's] website to be fully processed").

In Docekal &Moyer LLC v. Clackamas County Assessor, TC-MD 110863C, WL 1245610 at *1 (Or Tax M Div, Apr 10, 2012), the taxpayer was denied a discount after making a payment of the full amount minus the three percent discount on November 15 because the bank erroneously returned her check. Despite the bank's error, the court upheld the denial of discount finding that the taxpayer "had the duty to ensure that a negotiable instrument was tendered to Defendant by the tax deadline." Id. at *3.

During the case management conference held September 8, 2022, Plaintiff indicated that the bank may have erroneously denied her payment. Whether or not the bank erroneously denied Plaintiff's payment, such as in Docekal, is an issue beyond the scope of the case presently before the court. Even if the bank erred, Plaintiff had a duty to ensure that her payment was processed in a timely manner. The bank's potential error does not relieve Plaintiff of potential responsibility or liability.

The court finds that Plaintiff has not alleged any facts that provide a basis for the requested relief and therefore concludes that Plaintiff was not eligible for a discount on her 202122 property tax statement. The court accordingly finds that Plaintiff is liable for each of the returned payment fees associated with her failed payment on November 15, 2021.

B. Interest

The second issue is whether Plaintiff is liable for any accrued interest on her outstanding property taxes for the 2021-22 tax year.

ORS 311.505(2) provides:

"Interest shall be charged and collected on any taxes on property, other charges, and on any additional taxes or penalty imposed for disqualification of property for special assessment or exemption, or installment thereof not paid when due, at the rate of one and one-third percent per month, or fraction of a month until paid."

Because Plaintiff's November 19, 2021, payment was untimely under ORS 311.505(1), interest was charged. Id.

ORS 305.145 provides, in pertinent part, that:

"[A] county tax collector shall waive interest on an assessment if the taxpayer has failed to make a timely payment * * *

...