Pessin v. State Tax Com'n, 63793
| Decision Date | 08 February 1994 |
| Docket Number | No. 63793,63793 |
| Parties | Barry I. PESSIN, et al., Appellants, v. STATE TAX COMMISSION OF MISSOURI, et al., Respondents. |
| Court | Missouri Court of Appeals |
Suelthaus & Kaplan, P.C., Robert J. Selsor & Stuart H. Zimbalist, St. Louis, for appellants.
John A. Ross, County Counselor, Edward W. Corrigan, Asst. County Counselor, Clayton, for respondent County.
W.B. Tichenor & Randall Turley, Jefferson City, for respondent State.
Plaintiffs are partners and partnerships who own multi-unit housing complexes in St. Louis County, Missouri. Plaintiffs filed a four count petition seeking reclassification and then reassessment of these properties from commercial to residential. Commercial real estate is taxed at 32% of the assessed value, residential at 19%. Sections 137.016.1(1) & (3) and 137.115.5 RSMo 1986. The trial court determined that it could not reach the question of whether plaintiffs are entitled to reclassification because they failed to pursue and exhaust their administrative remedies by application to the St. Louis County Board of Equalization and, if necessary, appeal to the State Tax Commission of Missouri. For that reason the trial court dismissed the petition. We affirm.
This case involves a dispute over 1992 real estate taxes. The amount in controversy is the difference between the amount of tax for plaintiffs' property as commercial and plaintiffs' property as residential. In November and December, 1991, plaintiffs complied with the provisions of the Condominium Property Act, §§ 448.005 to 448.210 RSMo 1986, by recording a declaration for condominiums for their apartments and a plat as required by §§ 448.030 and 448.040. Plaintiffs intended to convert apartments into condominiums and thereby make the property "residential" for purposes of taxation because of the definition of residential property in § 137.016.1(1) RSMo 1986. Condominiums are defined as residential properties.
No condominium units have been sold. Accordingly, plaintiffs continue to operate their properties and collect rent from tenants who occupy condominium units in the same manner they collected rent on apartments.
In the fall of 1992, plaintiffs received their tax bills which were determined by the continued classification of the property as commercial and application of the tax rate of 32%. A change in valuation did not occur and valuation is not an issue in the dispute. Counsel for plaintiffs requested the assessor and the State Tax Commission to reclassify the properties in the same manner as other "conversions" had been reclassified. The request was refused, in part, because of a decision of the State Tax Commission issued on July 1, 1992. The Commission decided in the case of St. Louis Questover Associates v. Morton, Assessor for St. Louis County, Missouri, Appeal No. 91-10655, that the form of ownership is not decisive in determining the classification of real estate for tax purposes. The Commission held the proper basis for assessment of condominiums was "the actual use of the subject property." The effect of the Questover opinion was to deny the taxpayer a reclassification of an apartment building after conversion by the owners to condominiums when the owners of an entire multi-unit complex failed to occupy the units as a tenant. 1
Count I of the petition filed in the present case requested: (1) a declaratory judgment respecting the rights and remedies and legal obligations of plaintiffs taxpayers, the State Tax Commission of Missouri and Kenneth Morton, as Assessor of St. Louis County, Missouri with reference to the Questover v. Morton decision; (2) a court ordered reclassification of plaintiffs' condominiums as residential under Article X, § 4(a) and (b) of the Missouri Constitution and § 137.016 RSMo 1986; (3) recalculation of plaintiffs' 1992 real estate taxes using residential property tax rate; and, (4) if applicable, refunds of taxes paid under protest be made and cost and expenses be borne by defendants.
Counts II, III and IV sought alternative relief in the form of a Writ of Mandamus ordering defendants to reclassify plaintiffs' condominium properties as residential, a Writ of Prohibition prohibiting defendants from applying a "rule" set forth in Questover v. Morton, and judicial review of the ruling. The denial of a writ, where no provisional writ was issued, is not an appealable order. Gullic v. City of Fredericktown, 679 S.W.2d 436, 437 (Mo.App.1984). Plaintiffs abandoned Count IV which sought review of the Tax Commission ruling in Questover v. Morton where they were not parties.
Five of six claims of error are directed at the Count I declaratory judgment cause of action. The sixth claim of error is directed only at denial of extraordinary writs. It is not properly before us. The underlying issue in plaintiffs' claims of error is whether the trial court had subject matter jurisdiction to enter a declaratory judgment which would result in a reclassification of plaintiffs' properties from commercial apartments to residential condominiums. We need not address each of the other five claims of error individually because we hold the court properly applied the doctrine of exhaustion of administrative remedies and determined that it did not have jurisdiction to judicially determine plaintiffs' real estate taxes for the year 1992.
Administrative remedies were available to plaintiffs from January 1, 1992, to the third Monday in June. Plaintiffs acknowledge they did not attempt any administrative remedy after receiving 1992 tax bills sometime in October of 1992. At that time there were no administrative remedies available. In preparing plaintiffs' 1992 tax bills the county assessor took no notice of the 1991 condominium recordings. He did not reclassify, revalue, reassess or otherwise change the real estate taxes on plaintiffs' properties as billed and paid in 1991. Accordingly, no notices of change were sent in the first half of 1992. Section 137.180 RSMo 1986 requires the assessor to send notice only when he increases the valuation of any real property. The administrative procedure is for an aggrieved taxpayer. But, plaintiffs were not aggrieved by...
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