Kmart Corp. v. County of Clay, No. A05-590.

Citation711 N.W.2d 485
Decision Date30 March 2006
Docket NumberNo. A05-591.,No. A05-590.
PartiesKMART CORPORATION, Relator, v. COUNTY OF CLAY, Respondent, and American Crystal Sugar Company, Relator, v. County of Clay, Respondent.
CourtSupreme Court of Minnesota (US)

Thomas R. Wilhelmy, Steven J. Quam, Fredrikson & Byron, P.A., Minneapolis, MN, for Relator, Kmart Corporation.

Kenneth Kohler, Clay County Attorney, Michelle C. Winkis, Chief Assistant County Attorney, Moorhead, MN, for Respondent, County of Clay.

Myron L. Frans, Mark D. Savin, Lisa R. Pugh, Faegre & Benson, L.L.P., Minneapolis, MN, for Relator, American Crystal Sugar Company.

Considered and decided by the court en banc without oral argument.

OPINION

PAGE, Justice.

In two separate appeals, relators, American Crystal Sugar Company (ACS) and Kmart Corporation (Kmart), appeal the Minnesota Tax Court's dismissals of their 2003 Clay County real property tax petitions. ACS and Kmart assert separate and distinct tax claims that were litigated separately in the tax court and separately appealed and briefed to this court. Nevertheless, because the procedural facts and legal issues presented by the two appeals are identical, we address both appeals in this combined opinion. Respondent Clay County (County) filed motions to dismiss the tax petitions, contending ACS and Kmart failed to properly serve the county assessor and the county attorney as required by Minn.Stat. § 278.01, subd. 1(a) (2004). The County also claimed that ACS and Kmart failed to timely file proof of service as required by Minn.Stat. § 278.01, subd. 1(c) (2004). ACS and Kmart opposed the County's motions, arguing the service on the county assessor and the county attorney was adequate in light of the officials' refusal to accept service. Further, they argued that their failure to file proof of service by the statutory deadline did not deprive the tax court of jurisdiction. The tax court granted the County's motions to dismiss, holding that for purposes of Minn.Stat. § 278.01, subd. 1(a), ACS and Kmart failed to personally serve the county assessor and the county attorney. The court also held that ACS and Kmart could not use facsimile service under Minn. R. Civ. P. 5.01 for original tax petitions. The court, therefore, concluded that it did not have jurisdiction over ACS's and Kmart's tax petitions.

On appeal, ACS and Kmart argue that the tax court erred in concluding that it did not have jurisdiction over their tax petitions and in granting the county's motions to dismiss. Specifically, ACS and Kmart claim that: (1) the court erroneously determined that they had failed to personally serve the county assessor and the county attorney pursuant to Minn.Stat. § 278.01, subd. 1(a); (2) the court erred in concluding their attempt to serve the original petitions under Minn. R. Civ. P. 5.01 by facsimile was ineffective; and (3) their failure to timely file the required proof of service under Minn.Stat. § 278.01, subd. 1(c), did not deprive the tax court of jurisdiction. We affirm.

In April 2003, ACS and Kmart hired Metro Legal Services (Metro Legal) to file tax petitions in Clay, Becker, and Norman Counties.1 Minnesota Statutes § 278.01 subd. 1(a), provides that a taxpayer may challenge a county's property tax assessment "by serving one copy of a petition for such determination upon the county auditor, one copy on the county attorney, one copy on the county treasurer, and three copies on the county assessor." Subdivision 1(c) of section 278.01 provides that the taxpayer "must file the copies [of the petition] with proof of service, in the office of the court administrator of the district court on or before April 30 of the year in which the tax becomes payable."

On April 30, 2003, Metro Legal successfully served and filed tax petitions for ACS, Kmart, and a third taxpayer not involved in this appeal in Becker County and Norman County. Metro Legal proceeded to Clay County, arriving at the county auditor's office shortly after 4:10 p.m. Once there, the petitions were served on the county auditor, who reviewed the petitions, signed the acknowledgements of service on the back of the petitions, and returned a signed original and a signed copy of each petition to Metro Legal.

Metro Legal proceeded across the hall to the Clay County Treasurer's office at approximately 4:15 p.m. and handed the petitions to the county treasurer, Betty Swetland, who reviewed the petitions of ACS and the third party before signing the acknowledgment of service. After that, Swetland looked at a clock and said, "It is 4:33 p.m., I am not going to accept the [Kmart petition]. You can come back in the morning because we are closed."

After leaving the treasurer's office, Metro Legal walked across the parking lot to the Clay County Courthouse, where the county assessor and the county attorney are located, and discovered that the doors were locked. At approximately 5:00 p.m., Metro Legal called the county assessor at his home in an effort to arrange service of the petitions that evening. The county assessor informed Metro Legal that his office was closed, that Metro Legal had until 4:30 to serve the petitions, and that he was not available to be served that evening, but could be served the next day. After several attempts to locate and serve the county assessor at home failed, Metro Legal left copies of the petitions between the storm door and the front door of the county assessor's home.

Metro Legal also called the county attorney at her office and home, but did not reach her. The county attorney returned Metro Legal's call at about 5:30 p.m. According to Metro Legal, the county attorney said that Metro Legal had until 4:30 to serve the papers and was "out of luck." The county attorney, however, testified that she did not tell Metro Legal that she was not going to accept service that night and that she "would never say those words." According to the county attorney, she told Metro Legal that she would be at work the next day and she could be served then. Subsequent efforts to find the county attorney at her office, home, and at a soccer field were unsuccessful and, ultimately, copies of the petitions were left underneath a rug on the porch of the county attorney's home.

Sometime after 9:30 that evening, Metro Legal began faxing copies of all of the tax petitions to the offices of the county treasurer, county assessor, and county attorney and the Clay County Court Administrator. Regarding proof of service, the record indicates that the court administrator's office received the back page of the Kmart petition, which included the county auditor's acknowledgment of service. The record, however, does not indicate that the back page of the ACS petition, which contained the county auditor and county treasurer's acknowledgement of service, was received. Moreover, none of the petitions included proof of service, by either acknowledgement or affidavit, on the county assessor and the county attorney. On May 1, 2003, Metro Legal filed the original petitions with affidavits of service upon the county assessor and the county attorney in the Clay County Court Administrator's office, indicating that copies of the petitions had been left at the county assessor and the county attorney's homes, as well as faxed to their respective offices.

"We review tax court decisions to determine whether the court lacked jurisdiction, whether the court's decisions are supported by the evidence and in conformity with the law, and whether the court committed any other error of law." Bond v. Comm'r of Revenue, 691 N.W.2d 831, 835 (Minn.2005). While not bound by the tax court's decisions, we will only overrule the court if its decision "is clearly erroneous because the evidence as a whole does not reasonably support the decision." Id. at 835-36. Moreover, we review the tax court's legal determinations de novo. ILHC of Eagan, LLC v. County of Dakota, 693 N.W.2d 412, 419 (Minn.2005). When, as here, the resolution of the parties' claims turn on the application of a statute to undisputed facts, the applicable standard of review is de novo. Morton Bldgs., Inc. v. Comm'r of Revenue, 488 N.W.2d 254, 257 (Minn. 1992).

These cases raise a number of issues. The primary issue is whether ACS and Kmart served the tax petitions on the Clay County Assessor, Clay County Attorney, Clay County Auditor, and Clay County Treasurer on or before April 30, 2003, as required by Minn.Stat. § 278.01, subd. 1. In our view, resolution of this issue is dispositive of this case. Because there appears to be no dispute between ACS, Kmart, and the County as to whether ACS and Kmart timely served the petitions on the county auditor and the county treasurer, we focus our attention on whether the county attorney and county assessor were effectively served.

ACS and Kmart first argue that personal service was complete when they made reasonable attempts to serve the petitions and the county assessor and the county attorney refused to accept them. ACS and Kmart further argue that, as public officials, the county assessor and the county attorney had an obligation to cooperate with their attempts to serve them on April 30, even after regular business hours. Clay County does not directly address the question of whether leaving copies of the tax petitions at the county assessor and the county attorney's homes qualifies as adequate service under Minn.Stat. § 278.01, subd. 1(a). Instead, the county simply asserts that the service was incomplete and argues that the lack of complete service was due to ACS's and Kmart's own negligence. The county further asserts that the county assessor and the county attorney acted appropriately on April 30, 2003, because county officials are not required to be available to the public outside of their 8:00 a.m. to 4:30 p.m. "duty day."

Minnesota Statutes § 278.01, subd. 1(a), requires service on the four designated county officials to initiate a property tax claim, but the method of service required is not...

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