Odunlade v. City of Minneapolis

Decision Date19 December 2012
Docket NumberNo. A11–1832.,A11–1832.
Citation823 N.W.2d 638
PartiesIdowu ODUNLADE, et al., Relators, v. CITY OF MINNEAPOLIS, et al., Respondents, County of Hennepin, et al., Respondents.
CourtMinnesota Supreme Court

823 N.W.2d 638

Idowu ODUNLADE, et al., Relators,
v.
CITY OF MINNEAPOLIS, et al., Respondents,
County of Hennepin, et al., Respondents.

No. A11–1832.

Supreme Court of Minnesota.

Dec. 19, 2012.


[823 N.W.2d 641]



Syllabus by the Court

1. Where relators allege that respondents unfairly assessed relators' properties for tax purposes, Minn.Stat. ch. 278 (2012), provides the exclusive remedy for relators' statutory claims and for relators' demands for declaratory and mandamus relief not premised on alleged constitutional violations.

2. The tax court properly dismissed relators' federal and state constitutional claims because they fail as a matter of law.

3. Because Minn.Stat. § 278.01 allows multiple taxpayers to file one tax petition raising a common legal issue concerning multiple properties, the tax court erred in dismissing the seven named relators' properly-filed claim that the 2010 assessments of their properties violated Minn.Stat. § 273.11 (2012).


Laura M. Thomas, University of Minnesota Law School Civil Practice Clinic, Minneapolis, MN, and Michael D. Gavigan, David L. Wilson, Wilson Law Group, Minneapolis, MN, for relators.

Susan L. Segal, Minneapolis City Attorney, James A. Moore, Gregory P. Sautter, Amanda Trelstad, Assistant Minneapolis City Attorneys, Minneapolis, MN, for respondents City of Minneapolis, et al.


Michael O. Freeman, Hennepin County Attorney, Lisa C. Hahn–Cordes, Assistant Hennepin County Attorney, Minneapolis, MN, for respondents County of Hennepin, et al.

OPINION

GILDEA, Chief Justice.

Relators Idowu Odunlade, Kimberly Larson, Charles Enck, Kent Lageson, Timothy Wesbrook, Jose Llangari, and Andrea Kral (“relators”) represent a putative

[823 N.W.2d 642]

class including all residential property owners in three Minneapolis neighborhoods: Camden, Near North, and Phillips. Relators challenge the assessed values respondent City of Minneapolis placed on relators' properties, and allege that because their properties were overvalued, relators were required to overpay property taxes in 2009, 2010, and 2011. The tax court granted respondents' motion to dismiss for failure to state a claim. Because relators allege that respondents' assessment practices are illegal, the court held that Minn.Stat. ch. 278 (2012), provides the relators' exclusive remedy.1 The court then concluded that relators' 2008 and 2009 claims are untimely under chapter 278, and that the 2010 claims fail because chapter 278 does not allow multiple taxpayers to file a single action concerning multiple properties. The court also determined that relators' claims for declaratory and mandamus relief, and their constitutional claims fail on the merits. Relators sought certiorari review in our court pursuant to Minn.Stat. § 271.10 (2012).

Because we conclude that relators' claims are covered by chapter 278, we agree with the tax court that relators' claims based on the 2008 and 2009 tax years are untimely, and that their claims for declaratory and mandamus relief are precluded; we also agree that relators' constitutional claims fail on the merits. But because the plain language of chapter 278 allows multiple taxpayers to file one tax action concerning multiple properties, we conclude that the tax court erred in dismissing the seven named relators' claims based on the 2010 tax year to the extent those claims allege a violation of Minn.Stat. § 273.11 (2012).2 We therefore affirm in part, reverse in part, and remand.

This action arises from assessments of relators' respective properties for property tax purposes for tax years 2008 (payable in 2009), 2009 (payable in 2010), and 2010 (payable in 2011). Relators allege that although they purchased their respective properties in “arms' length transactions,” respondents refused to recognize these sales in determining the value of relators' properties. Rather than use the purchase prices relators paid for their respective properties, respondents allegedly used earlier sales of the properties. In these earlier sales, relators allege that the properties sold for much higher prices than the prices for which relators bought their properties. As a result of the respondents' use of these earlier transactions, relators contend that their properties were valued higher than their actual market value. Relators' amended complaint asserts, generally, that respondents' refusal to consider relators' allegedly arms-length purchases when assessing real property values in 2008, 2009, and 2010 “constitute[d] illegal and unequal property tax assessment.”

Relators allege that respondents' assessments of their properties violate relators' federal and state rights to equal protection, the uniformity clause of the Minnesota Constitution, and Minn.Stat. § 273.11, which requires property to be assessed at its market value for taxation purposes.3 Relators seek declarations, pursuant to the

[823 N.W.2d 643]

Uniform Declaratory Judgments Act, Minn.Stat. § 555.01 (2012), that respondents violated relators' federal and state equal protection rights, state constitutional right to uniform taxation, and statutory right to have their property tax assessments based on market value. With respect to the 2008 and 2009 assessments, relators also seek writs of mandamus “requiring reassessment of all residential property” located within relators' putative class neighborhoods and credits for overpayment. With respect to the 2010 assessments, relators seek a writ of mandamus requiring reassessment and reissuing of valuation notices. Pursuant to 42 U.S.C. §§ 1983 and 1988 (2006), relators seek damages and attorney fees for violations of their federal right to equal protection. Finally, relators seek damages “equivalent to the amount any [relator] overpaid in property taxes” in 2009 and 2010.

The tax court dismissed all of relators' claims. The court first considered whether relators' claims could have been brought under Minn.Stat. ch. 278. Because chapter 278 provides the exclusive “remedy for challenging property taxes on five statutorily enumerated bases, namely allegedly improper valuation, classification, exemption, unfair assessment, or illegality,” the court reasoned that if chapter 278 covered relators' claims, all of their other claims were precluded. Concluding that relators alleged illegal conduct resulting in unfair assessments, the court held that chapter 278 was relators' exclusive remedy, and that relators' claims therefore must comply with the procedural requirements of chapter 278.

The tax court concluded that claims based on the 2008 and 2009 tax years were untimely because chapter 278 petitions must be brought by April 30 of the year the challenged tax becomes payable. With respect to the 2010 claims, the court held that chapter 278 claims could be brought only by property owners on an individual basis. Because relators' 2010 claims “include[d] multiple petitioners and different properties,” the court concluded that their amended complaint was “fatally deficient” and dismissed it.

On appeal, relators argue that chapter 278 does not provide the exclusive remedy for their claims and that, even if chapter 278 controls, their claims with respect to the 2010 assessments (taxes payable in 2011) survive a motion to dismiss. Our review of the final order of the tax court is limited. Hutchinson Tech., Inc. v. Comm'r of Revenue, 698 N.W.2d 1, 6 (Minn.2005). We determine only whether the tax court lacked jurisdiction, whether the tax court's order is supported by the evidence and is in conformity with the law, and whether the tax court committed any other error of law. Minn.Stat. § 271.10, subd. 1; Jefferson v. Comm'r of Revenue, 631 N.W.2d 391, 394 (Minn.2001). We review de novo the tax court's legal determinations. Hutchinson Tech. Inc., 698 N.W.2d at 6. We overturn the tax court's factual findings only if they are “clearly erroneous.” 200 Levee Drive Ass'n v. Cnty. of Scott, 532 N.W.2d 574, 576 (Minn.1995). With this standard of review in mind, we turn to relators' arguments.4

[823 N.W.2d 644]

I.

We turn first to relators' argument that the tax court erred in determining that their claims are covered by Minn.Stat. § 278.01. Section 278.01 provides that:

[a]ny person having ... any parcel of land, who claims that such property has been partially, unfairly, or unequally assessed in comparison with other property in the ... city ... or that the parcel has been assessed at a valuation greater than its real or actual value, or that the tax levied against the same is illegal, in whole or in part, or has been paid ... may have the validity of the claim, defense, or objection determined by the district court of the county in which the tax is levied or by the Tax Court....

Minn.Stat. § 278.01, subd. 1(a). We have consistently held that section 278.01 “provide[s] the exclusive means by which a taxpayer may” attack an unfair or unequal assessment in court. Fichtner v. Schiller, 271 Minn. 263, 267, 135 N.W.2d 877, 880 (1965) (quoting State v. Elam, 250 Minn. 274, 281, 84 N.W.2d 227, 231 (1957)); see also, e.g., Evanson v. Comm'r of Taxation, 280 Minn. 559, 561, 159 N.W.2d 259, 261 (1968) (“It is elementary that a taxpayer's remedies for relief on the basis that realty has been unfairly or unequally assessed are statutory.... [Minn.Stat. § 278.01] is [a] petitioner's exclusive remedy to contest unfair, unequal, or erroneous valuation.”). We therefore evaluate relators' claims to see whether relators allege that their properties have been unfairly or unequally assessed.5


Relators' amended complaint includes claims based on alleged constitutional violations and non-constitutional claims. We first address relators' claims that are not premised on constitutional violations and then examine the constitutional claims.

A.

The tax court held that relators' non-constitutional claims fell within the scope of Minn.Stat. § 278.01 because their claims were “related to the assessment process, which [c]hapter 278 was designed to address.” We agree with the...

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