Pettit v. Board of Tax Appeals, s. 43058

• Decision Date: 24 July 1975
• Docket Number: Nos. 43058,43059 and 43060,s. 43058
• Citation: 85 Wn.2d 646,538 P.2d 501
• Parties: Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and Port Blakely Mill Company, Respondents. Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and Weyerhaeuser Company,Respondents. Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and S. J. Agnew, Respondents.
• Court: Washington Supreme Court

Page 646

85 Wn.2d 646

538 P.2d 501

Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and Port Blakely

Mill Company, Respondents.

Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and Weyerhaeuser

Company,Respondents.

Del PETTIT, Thurston County Assessor, Appellant, v. BOARD OF TAX APPEALS, State of Washington and S. J. Agnew,

Respondents.

Nos. 43058, 43059 and 43060.

Supreme Court of Washington, En Banc.

July 24, 1975.

Mooney, Cullen & Holm, Gerald K. Mooney, Special Assistant to Smith Troy, Olympia, for appellant.

Slade Gorton, Atty. Gen., Edward B. Mackie, Deputy Atty. Gen., Olympia, for respondent.

HAMILTON, Associate Justice.

The Tax Assessor for Thurston County appeals from the Superior Court's dismissal of his action seeking de novo review of the action of the State Board of Tax Appeals. We must decide whether the Assessor can obtain judicial review of a decision of the Board of Tax Appeals by way of either RCW 82.03.180 or the inherent review power of the Superior Court.

Respondents are timber companies, owners of an estimated 60,000 acres of land in Thurston County, which prior to 1972 was assessed as 'classified' forest land, with attendant tax advantage, under the forest tax act, RCW 84.33. In 1972, the Thurston County Assessor determined, pursuant to RCW 84.33.120(4), to discontinue the 'classified' status on the grounds that a higher and better use existed for those lands. ¹ Respondents appealed to the County Board of Equalization, which reversed the Assessor's decision. The Assessor then appealed to the State Board of Tax Appeals, which, after a series of informal hearings, affirmed the decision of the County Board of Equalization.

The Thurston County Assessor then appealed to the Superior Court, seeking judicial review of the Board of Tax Appeals' decision under RCW 82.03.180. The Superior Court granted respondents' motion for dismissal on the grounds that RCW 82.03.180 did not confer jurisdiction on that court to review a decision of the Board entered following informal hearings. The Superior Court also declined to exercise its inherent review power on grounds that no fundamental right was asserted by the Assessor.

RCW 82.03.140 permits one appealing from a decision of the Board of Equalization to elect formal hearings before the Board of Tax Appeals. Such an election entitles a further appeal to the Superior Court under the administrative procedure act. RCW 82.03.180, RCW 34.04.150. The first question raised by this appeal is whether, having failed to elect such formal proceedings, the Tax Assessor is entitled to do novo review under RCW 82.03.180. That statute provides:

Judicial review of a decision of the board of tax appeals shall be de novo in accordance with the provisions of RCW 82.32.180 or 84.68.020 as applicable except when the defendant has been rendered pursuant to a formal hearing elected under RCW 82.03.140 or 82.03.190, in which event judicial review may be obtained only pursuant to RCW 34.04.130 and RCW 34.04.140; Provided, however, That nothing herein shall be construed to modify the rights of a taxpayer conferred by RCW 82.32.180 and RCW 84.68.020 to sue for tax refunds: And Provided Further, That no review from a decision made pursuant to RCW 82.03.130(1) may be obtained by a taxpayer unless within the petition period provided by RCW 34.04.130 the taxpayer shall have first paid in full the contested tax, together all penalties and interest thereon, if any. The director of revenue shall have the same right of review from a decision made pursuant to RCW 82.03.030(1) as does a taxpayer.

The difficulty is what the construction to be given to the first evidence of the statute. Appellant argues that the statute authorizes do novo judicial review of all proceedings before the Board of Tax Appeals, except insofar as individual cases fall within the terms of RCW 82.32.180 or RCW 84.68.020, ² or where a formal hearing was elected. Appellant's construction of the statute amounts to a grant of de novo review of all decisions rendered in informal proceedings. Otherwise, he argues, taxpayers not falling within the terms of RCW 82.32.180 or RCW 84.68.020 have no recourse to the courts under RCW 82.03.180.

We point out, by way of initial response, that appellant is a Tax assessor, not a Taxpayer; and that in any event election of a formal hearing procedure at the Board of Tax Appeals level insures the availability of subsequent judicial review under the administrative procedure act. The construction of the statute advanced by respondents, with which we agree, allows no appeal from an informal hearing (but preserves the taxpayer's right to seek refunds in accordance with the two specified statutes, RCW 82.32.180, RCW 84.68.020). Essentially, the question rests on a determination of the impact of the statutory language 'in accordance with the provisions of RCW 82.32.180 or 84.68.020 as applicable . . ..' Without belaboring the vagaries of punctuation, we note that the statute, while not perhaps ideally clear, does not say 'judicial review shall be de novo,' but rather says 'judicial review . . . shall be do novo in accordance with . . ..' We read the 'in accordance with' language as modifying and therefore limiting the grant of review de novo. The statute's first mention of RCW 82.32.180 and RCW 84.68.020 confirms, as cross-reference would indicate, that actions for refunds pursuant to those statutes shall be de novo. The proviso, stating that rights under those sections are not modified, is not merely defendant under our construction of the statute, but rather makes clear that no exhaustion of remedies is required; the taxpayer may directly seek the refund without a Board of Tax Appeals proceeding. (If, however, a Board of Tax Appeals formal hearing is elected, a separate action for refund is precluded by RCW 82.32.180.)

Our conclusion is bolstered by the specific reference to review of formal hearings. As the trial court reasoned, if de novo review were available in every case, a party would have no reason to elect a formal proceeding which results in a record reviewable under the administrative procedure act, by which both parties are bound. We conclude that the legislature intended to limit judicial review of Board of Tax Appeals proceedings to those procedures in which a formal record was generated, except where other statutes provide specifically for de novo review, I.e., tax refund actions pursuant to RCW 82.32.180 and RCW 84.68.020. Taxpayers are amply protected by the legislation; they may either sue for a refund or pursue an administrative procedure act appeal. That the legislature contemplated the function of the statute as one of protection of taxpayers, not tax assessors, is indicated by the statement of purpose of the 1967 amendatory act, establishing the Board of Tax Appeals:

Section 1. The purpose of this 1967 amendatory act is to provide . . . a convenient and economical form in which the Appeals of individual taxpayers may be determined.

(Italics ours.) Laws of 1967, 1st Ex.Sess., ch. 26, § 1, p. 1519.

Appellant protests that to rule against him is inconsistent with strong presumptions favoring judicial review of agency action. The cases cited to us by appellant, however, involved the applicability of the federal Administrative Procedure Act. In Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), the Supreme Court held that a statutory scheme providing for pre- enforcement review of certain kinds of agency regulations did not imply an intent to deny review of other kinds of regulations merely because no specific provision was made for such review. The court's decision turned on a construction of the federal Administrative Procedure Act, 5 U.S.C. § 701. Appellant does not attempt to proceed under our state's administrative procedure act, and by its express terms he cannot so proceed. The act does not apply to Board of Tax Appeals proceedings unless an election for formal hearing has been made. RCW 34.04.150, RCW 82.03.180. Our reading of the statutes is consistent with the presumption of reviewability; judicial review is in fact guaranteed to anyone who elects a formal proceeding before the Board of Tax Appeals. ³

Appellant contends that even if he has no right to judicial review under RCW 82.03.180, the Superior Court has inherent constitutional power to review illegal or arbitrary and capricious actions of public officials, citing State ex rel. Shannon v. Sponburgh, 66 Wash.2d 135, 401 P.2d 635 (1965); State ex rel. Cosmopolis Consol. School Dist. 99 v. Bruno,59 Wash.2d 366, 367 P.2d 995 (1962). In Sponburgh, we reversed a decision of the State Liquir Control Board in which the Board revoked its earlier approval of a location change, on which approval Mr. Shannon had relied in...