Rossville Vending Mach. Corp. v. Comptroller of the Treasury

• Citation: 114 Md.App. 346,689 A.2d 1295
• Decision Date: 01 September 1996
• Docket Number: No. 920,920
• Parties: ROSSVILLE VENDING MACHINE CORPORATION v. COMPTROLLER OF THE TREASURY. ,
• Court: Court of Special Appeals of Maryland

Page 346

114 Md.App. 346

689 A.2d 1295

ROSSVILLE VENDING MACHINE CORPORATION v. COMPTROLLER OF THE TREASURY.

No. 920, Sept. Term, 1996.

Court of Special Appeals of Maryland.

March 3, 1997.

Robert L. Hanley, Jr. (Thomas J. Renner and Nolan, Plumhoff & Williams, Chartered on the brief), Towson, for Appellant.

Deborah B. Bacharach, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General and Gaylin Soponis, Assistant Attorney General, on the brief), Baltimore, for Appellee.

Argued before WENNER, DAVIS and EYLER, JJ.

EYLER, Judge.

This case of first impression requires us to determine the period of limitations applicable to enforcement of a recorded tax lien.

On September 25, 1985, the Comptroller of the Treasury, appellee (Comptroller), levied an assessment against Rossville Vending Machine Corporation, appellant (taxpayer), for unpaid admission and amusement taxes in the amount of $859,560.58 ¹ for the period of December 15, 1982 through March 6, 1985. On September 27, 1985, the Comptroller filed a notice of tax lien in the Circuit Court for Baltimore County for the amount of the assessment. On September 30 of that year, the circuit court recorded and indexed the lien in its judgment docket at Liber 41, page 329. Taxpayer appealed the assessment to the Maryland Tax Court, the Circuit Court for Baltimore County, and to this Court. The assessment was upheld in Rossville Vending Machine Corporation v. Comptroller, 97 Md.App. 305, 629 A.2d 1283,cert. denied, 333 Md. 201, 634 A.2d 62 (1993). Taxpayer appealed the denial of its refund claim which ultimately was affirmed by this Court in Comptroller v. Rossville Vending Machine Corporation, No. 1872, 84 Md.App. 760, Sept. Term, 1989 (unreported opinion filed September 27, 1990), cert. denied, 321 Md. 639, 584 A.2d 68 (1991). The resolution of the assessment case was delayed because the Maryland Tax Court held it in abeyance until after resolution of the refund case, which occurred in early 1991.

On September 5, 1995, the Comptroller filed a request for writ of garnishment of property, referencing the tax lien at Liber 41, page 329, and caused it to be served on garnishee, Mercantile Safe Deposit & Trust Company. On that same date, the Clerk of the Circuit Court for Baltimore County filed in the garnishment action a notice of recorded judgment in the amount of the tax lien plus interest. Taxpayer filed a motion to quash the writ of garnishment on the grounds that the Comptroller had not obtained a judgment pursuant to Title 13, Subtitle 8, Part III of the Tax-General Article of the Maryland Annotated Code and that the recorded tax lien was no longer effective. The Comptroller filed a response, and on April 12, 1996, the trial court denied taxpayer's motion. On May 8, 1996, judgment was entered against garnishee in the amount of the assets confessed. Taxpayer noted this appeal.

Question Presented

Did the Circuit Court for Baltimore County err in denying Rossville's motion to quash attachment of writ of garnishment because the tax lien underlying the writ of garnishment was unenforceable by reason of lapsed time?

Discussion

Taxpayer argues that the filing of the writ of garnishment was barred by the seven year statute of limitations set forth in the Tax-General Art., § 13-1103. ² That section provides in pertinent part as follows:

(a) 7-year limit.--Except as otherwise provided in this section, a tax imposed under this article may not be collected after 7 years from the date the tax is due.

* * * * * *

(c) Collection action after timely assessment.--If the assessment of any tax has been made within the period of limitations applicable to the assessment, a tax may not be collected after 7 years from the date of the assessment. Any judgment entered may be enforced or renewed as any other judgment.

Taxpayer asks us to conclude that the subsections constitute a bar to the Comptroller's action to collect taxes, i.e., the filing of the writ of garnishment, because the writ was filed more than seven years after the date of the assessment. Taxpayer acknowledges that, under the terms of § 13-1103(c), the Comptroller could have expanded its time for collection by obtaining a judgment, enforceable for twelve years and renewable for twelve year periods, see Cts. & Jud.Proc. Art., § 5-102 and Rule 2-625, but asserts that the Comptroller failed to do so.

Relying upon § 13-808 and the last sentence of § 13-1103, the Comptroller argues that § 13-1103 does not apply to the enforcement of a notice of tax lien that has been filed in the appropriate circuit court. The Comptroller maintains that the filing of a notice of tax lien gives to the State a judgment lien that, at the very least, has a twelve year life renewable for twelve year periods. Section 13-808 provides as follows:

From the date on which a tax lien is filed under § 13-807[ ³] of this subtitle, the lien has the full force and effect of a judgment lien.

The Comptroller further argues that § 13-1103(c) expressly exempts enforcement of judgment liens from the seven year statute of limitations governing collections. By contrast, taxpayer maintains that § 13-808 only gives tax liens the same priority as judgment liens and does not vitiate the statute of limitations set forth in § 13-1103. Taxpayer argues that any other reading of § 13-808 renders nugatory the terms of § 13-806, entitled "Duration of lien." That section provides in pertinent part as follows:

(a) In general.--Unless another date is specified by law and except for a lien under subsection (b) [ (relating to inheritance tax liens) ] of this section, a lien arises on the date of notice that the tax is due and continues to the date on which the lien is:

(1) satisfied; or

(2) released by the tax collector because the lien is:

(i) unenforceable by reason of lapse of time; or

(ii) uncollectible.

Taxpayer argues that, under the Comptroller's theory, a tax lien never would become "unenforceable by reason of lapse of time," thus rendering subsection (a)(2)(i) meaningless. While the Comptroller takes the position that the twelve year statute of limitations governing judgments may not even apply to tax liens, see § 5-102(c), Cts. & Jud.Proc. Art., ⁴ it responds that unrecorded liens are subject to the seven year statute of limitations and may become unenforceable by reason of lapse of time if not recorded within the statute of limitations.

Alternatively, the Comptroller argues that the limitations period set forth in § 13-1103 applies only once the taxpayer's liability for the tax is finally determined by the appropriate administrative or judicial body, a process which, in this case, took eight years.

We begin our analysis by noting that the object of our interpretation is to ascertain and effectuate the intent of the legislature. Ford Motor Land Dev. Corp. v. Comptroller, 68 Md.App. 342, 346, 511 A.2d 578, cert. denied, 307 Md. 596, 516 A.2d 567 (1986). As an aid to that task, we repeat a few of the basic concepts governing statutory construction that we set forth in Ford Motor Land Dev. Corp.:

"Where the language [of the statute] is clear and free from doubt the Court has no power to evade it by forced and unreasonable construction." State Tax. Comm. v. C & P Tel. Co., 193 Md. 222, 231, 66 A.2d 477 (1949). Thus, where "there is no ambiguity or obscurity in the language of a statute, there is usually no need to look elsewhere to ascertain the intent of the General Assembly." Mayor and City Council of Baltimore v. Hackley, 300 Md. 277, 283, 477 A.2d 1174 (1984). Furthermore, the statute must be construed considering the context in which the words are used and viewing all pertinent parts, provisions, and sections so as to assure a construction consistent with the entire statute. Comptroller v. Mandel Re-Election Com., 280 Md. 575, 579, 374 A.2d 1130 (1977). And, if there is no clear indication to the contrary, a statute must be read so that no part of it is "rendered surplusage, superfluous, meaningless or nugatory." Bd. of Educ., Garrett Co. v. Lendo, 295 Md. 55, 63, 453 A.2d 1185 (1982); Baltimore Building and Construction Trades Council v. Barnes, 290 Md. 9, 15, 427 A.2d 979 (1981). On the other hand, we "shun a construction of the statute which will lead to absurd consequences[,]" Erwin and Shafer, Inc. v. Pabst Brewing Co., 304 Md. 302, 311, 498 A.2d 1188 (1985), or "a proposed statutory interpretation if its consequences are inconsistent with common sense." Blandon v. State, 304 Md. 316, 319, 498 A.2d 1195 (1985).

Id. at 346-47, 511 A.2d 578. More particularly, we must strictly construe statutes of limitations that bar the collection of taxes, State v. Cadwalader, Executor, 227 Md. 21, 174 A.2d 786 (1961), and construe, with "very great liberality," laws enacted for the collection of taxes. Surratts Assoc. v. Prince George's County, 286 Md. 555, 566, 408 A.2d 1323 (1979).

The Tax-General Article provides the Comptroller with alternative methods for the collection of tax. Comptroller v. Washington Restaurant Group, 339 Md. 667, 671 n. 5, 664 A.2d 899 (1995); Surratts Assoc., 286 Md. at 566, 408 A.2d 1323. The Comptroller may record a lien and institute enforcement procedures, pursuant to Part II of Subtitle 8 of Title 13 ( §§ 13-805 through 13-811), or may bring a collection action, pursuant to the procedures set forth in Part III of Subtitle 8 of Title 13 ( §§ 13-815 through 13-818). If a tax is not paid when due, the State must institute a collection action under § 13-816, unless a lien on real property under Part II of Subtitle 8 sufficiently secures the tax or unless a judgment in the action would not be collectible. This section implicitly recognizes that securing the tax by lien, and executing thereon, is the preferred method of collection.

An action to collect taxes pursuant to Part III is expressly governed by the limitations period of § 13-1103. Specifically, § 13-815(a) provides as follows:

(a) Authorized.--Within...