Robinson v. Ind. Dep't of Local Gov't Fin.

• Decision Date: 09 April 2018
• Docket Number: Court of Appeals Case No. 45A03–1707–PL–1643
• Citation: 99 N.E.3d 684
• Parties: Kimberly K. ROBINSON, in her official capacity as Trustee of Calumet Township, Indiana, and as a resident and taxpayer of Calumet Township, Appellant–Plaintiff, v. INDIANA DEPARTMENT OF LOCAL GOVERNMENT FINANCE and Town of Griffith, Indiana, Appellees–Defendants
• Court: Indiana Appellate Court

99 N.E.3d 684

Kimberly K. ROBINSON, in her official capacity as Trustee of Calumet Township, Indiana, and as a resident and taxpayer of Calumet Township, Appellant–Plaintiff,

v.INDIANA DEPARTMENT OF LOCAL GOVERNMENT FINANCE and Town of Griffith, Indiana, Appellees–Defendants

Court of Appeals Case No. 45A03–1707–PL–1643

Court of Appeals of Indiana.

Filed April 9, 2018

Attorneys for Appellant: Leanna Weissmann, Tony Walker, The Walker Law Group, P.C., Indianapolis, Indiana

Attorneys for Appellee, Indiana Department of Local Government Finance: Curtis T. Hill, Jr., Attorney General of Indiana, Patricia C. McMath, Deputy Attorney General, Indianapolis, Indiana

Attorney for Appellee, Town of Griffith, Indiana: Joseph C. Chapelle, Barnes & Thornburg LLP, Indianapolis, Indiana

Crone, Judge.

Case Summary

[1] Kimberly K. Robinson, in her official capacity as Trustee of Calumet Township, Indiana, and as a resident and taxpayer of Calumet Township ("the Trustee"), brings this discretionary interlocutory appeal from the trial court's order transferring this case to the Indiana Tax Court based upon the trial court's conclusion that the Tax Court has exclusive subject matter jurisdiction. Specifically, the Trustee filed a complaint for declaratory judgment and injunctive relief against the Indiana Department of Local Government Finance ("the DLGF") and the Town of Griffith ("the Town") in the Lake Superior Court in an effort to prevent the Town from seceding from Calumet Township. Because the Town's secession eligibility was based upon the DLGF's calculation of the statewide average township assistance property tax rate, the Trustee challenged the DLGF's method for calculating the tax rate and its failure to follow administrative rulemaking procedures. The DLGF moved to dismiss the case arguing that the trial court lacks subject matter jurisdiction over this matter and that the Tax Court has exclusive subject matter jurisdiction. Determining that this case "arises under" the tax laws, the trial court concluded that it lacks subject matter jurisdiction and that the Indiana Tax Court has exclusive jurisdiction. Therefore, the trial court ordered the case transferred to the Tax Court.

[2] We conclude that the trial court indeed lacks subject matter jurisdiction, but we express no opinion as to whether the Tax Court has acquired exclusive jurisdiction at this procedural juncture. We further conclude that neither this Court nor the trial court has authority to transfer this case to the Tax Court. Accordingly, we affirm in part, reverse in part, and remand to the trial court with instructions to dismiss this case.

Facts and Procedural History

[3] In 2013, the legislature enacted Indiana Code Chapter 36–1–1.5 which allows for the territory of an "eligible municipality" to be transferred to an adjacent township. An "eligible municipality" means a municipality located in a township that has a township assistance property tax rate that is twelve times higher than the statewide average township assistance property tax rate as determined by the DLGF. Ind. Code § 36–1–1.5–2.¹ In 2015, the DLGF issued its first calculation of the statewide average township assistance property tax rate using a "weighted average" method. Appellant's App. Vol. 2 at 16.² Under this formula, the statewide total township assistance levy for the year is divided by the statewide total net assessed value upon which the township assistance levies were assessed in that year. After the DLGF released its calculation, the Town sought transfer out of Calumet Township. The DLGF informed the Town that it was not eligible based upon the weighted average calculation.

[4] In February 2016, the Attorney General of Indiana issued an advisory opinion that the Legislature likely intended that an "arithmetic mean" formula be used to calculate the statewide average township assistance property tax rate. Id. at 78. This formula uses the sum of the tax rates imposed by all Indiana townships using an assistance levy, divided by the total number of those townships. In September 2016, the DLGF announced that it would calculate the statewide average township assistance property tax rate for 2016 using the arithmetic mean formula consistent with the Attorney General's opinion. Because the Town believed that it was eligible for transfer based on the arithmetic mean calculation, the Town requested that the Lake County Election Board hold a special election to vote on the Town's transfer out of Calumet Township. The Lake County Election Board granted the Town's request for a special election.

[5] In an effort to halt the process and to prevent the Town from transferring from Calumet Township, the Trustee filed a complaint for declaratory judgment and injunctive relief against the DLGF and the Town in the Lake Superior Court. The Trustee challenged the DLGF's method for calculating the statewide average township assistance property tax rate and its failure to follow administrative rulemaking procedures in choosing its calculation method. The DLGF moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that the Indiana Tax Court has exclusive subject matter jurisdiction. The trial court subsequently issued an order concluding that it lacks subject matter jurisdiction and transferred the case to the Tax Court. Upon the Trustee's motion, the trial court certified its order for interlocutory appeal, and we accepted appellate jurisdiction.

Discussion and Decision

[6] The sole issue we address in this appeal is whether the Lake Superior Court has subject matter jurisdiction over the present dispute. Subject matter jurisdiction exists when the Indiana Constitution or a statute grants the court the power to hear and decide cases of the general class to which any particular proceeding belongs. Lorenz v. Anonymous Physician # 1 , 51 N.E.3d 391, 396 (Ind. Ct. App. 2016). Therefore, a motion to dismiss for lack of subject matter jurisdiction presents a threshold question concerning the court's power to act. Curry v. D.A.L.L. Anointed, Inc. , 966 N.E.2d 91, 95 (Ind. Ct. App. 2012), trans. denied . "Our standard of review for a trial court's grant or denial of a motion to dismiss for lack of subject matter jurisdiction is a function of what occurred in the trial court." Berry v. Crawford , 990 N.E.2d 410, 414 (Ind. 2013). Where, as here, the facts before the trial court are not in dispute, the question of subject matter jurisdiction is one of law and we review the trial court's ruling de novo. Id.

[7] All standard superior courts have "original and concurrent jurisdiction in all civil cases and in all criminal cases[.]" Ind. Code § 33–29–1–1.5(1). However, in 1986, the legislature created the Indiana Tax Court to channel tax disputes into a single specialized tribunal, thereby ensuring the uniform interpretation and application of the tax laws. State ex. rel. Ind. Att'y Gen. v. Lake Superior Court , 820 N.E.2d 1240, 1247 (Ind. 2005), cert. denied . The legislature intended that all challenges to the tax laws—regardless of the legal theory relied on—be tried in the Tax Court. State v. Sproles , 672 N.E.2d 1353, 1357 (Ind. 1996). Accordingly, the Tax Court is a court of limited jurisdiction that has exclusive subject matter jurisdiction over "original tax appeals" which include "any case that arises under the tax laws of Indiana and that is an initial appeal of a final determination" of a relevant agency. Ind. Code §§ 33–26–3–1, –3. Thus, there are two statutory prerequisites to the Tax Court having exclusive subject matter jurisdiction. State ex rel. Zoeller v. Aisin USA Mfg., Inc. , 946 N.E.2d 1148, 1152 (Ind. 2011). First, the case must "arise under" the tax laws, and second, there must be a "final determination" by a relevant agency. Id. If the Tax Court has subject matter jurisdiction over a case, a trial court does not. Id.

[8] As for the first statutory prerequisite to the exclusive jurisdiction of the Tax Court, a case "arises under" the tax laws if: (1) an Indiana tax statute creates a right of action; or (2) the case principally involves collection of a tax or defenses to that collection. Sproles , 672 N.E.2d at 1357. Our supreme court has interpreted the "arises under" language broadly to include "any case challenging the collection of a tax or assessment ... whether the challenge is premised on constitutional, statutory, or other grounds." Aisin , 946 N.E.2d at 1153. Moreover, "the challenge need not be to the collection directly—challenges to the earlier steps in the taxation or assessment process arise under the tax laws." Id.

[9] Other panels of this Court had occasion to consider the "arises under" concept in Wayne Township v. Indiana Department of Local Government Finance , 865 N.E.2d 625 (Ind. Ct. App. 2007), clarified on rehearing , 869 N.E.2d 531, trans. denied , and City of Fort Wayne v. Southwest Allen County Fire Protection District , 82 N.E.3d 299 (Ind. Ct. App. 2017), trans. denied (2018). In Wayne Township , we sua sponte addressed the Hamilton Superior Court's jurisdiction over the Township's lawsuit against the DLGF and the Marion County Auditor challenging the DLGF's calculation of the Township's maximum permissible property tax levy. 865 N.E.2d at 627.³ The Township challenged the DLGF's calculation because it effectively reduced the amount of tax revenues the Township would receive from Marion County's county option income tax ("COIT"). Id. Although noting that the case was unique in that it involved "warring governmental entities rather than a taxpayer versus the government," we concluded that the case certainly arose under the tax laws of this state because it "principally involve[d]" the Township's attempt to collect a tax, namely what it believed to be its fair share of Marion County's COIT, based on its assertion that the DLGF inaccurately calculated the Township's maximum permissible property tax levy. Id. at 628. Thus, we concluded that the trial court...