Sage v. Williams

• Decision Date: 07 March 1997
• Docket Number: No. 75208,75208
• Citation: 23 Kan.App.2d 624,933 P.2d 775
• Parties: Gary SAGE and ALJU Construction Company, Appellants, v. Sue WILLIAMS, County Treasurer of Greenwood County, Kansas; Frank C. Beyerl, County Attorney of Greenwood County, Kansas; Charles S. Samuels, Former Sheriff of Greenwood County, Kansas; and the Board of County Commissioners of Greenwood County, Kansas, Appellees.
• Court: Kansas Court of Appeals

Page 775

933 P.2d 775

23 Kan.App.2d 624

Gary SAGE and ALJU Construction Company, Appellants, v. Sue WILLIAMS, County Treasurer of Greenwood County, Kansas Frank C. Beyerl, County Attorney of Greenwood County Kansas; Charles S. Samuels, Former Sheriff of Greenwood County, Kansas; and the Board of County Commissioners of Greenwood County, Kansas, Appellees.

No. 75208.

Court of Appeals of Kansas.

March 7, 1997.

Review Denied April 29, 1997.

Syllabus by the Court

1. Where a full and adequate remedy is provided in tax matters by statute, such remedy must ordinarily be exhausted before a litigant may resort to the courts.

2. Under the facts of this case, the doctrine of exhaustion of administrative remedies does not apply because the Board of Tax Appeals (BOTA) does not have the power to hear and decide the taxpayer's equitable estoppel claim. The claim requires judicial determination, and therefore the taxpayer should be permitted to seek relief in the district court without first presenting his case to BOTA.

3. BOTA is an administrative agency and not a court, and it does not have the power to hear and decide equitable claims.

4. K.S.A.1996 Supp. 79-2101, which requires notice by mail to a delinquent taxpayer, does not violate the Due Process Clause or the Equal Protection Clause of the United States Constitution.

5. K.S.A. 12-105b is construed and applied. K.S.A. 12-105b is inapplicable to actions filed pursuant to 42 U.S.C. § 1983 (1994).

6. Federal civil rights claims brought pursuant to 42 U.S.C. § 1983 (1994) are not subject to the state law limitations of the Kansas Tort Claims Act, and therefore the immunity granted by K.S.A.1996 Supp. 75-6104(f) is not available in a 42 U.S.C. § 1983 action. However, under the facts of this case, the trial court correctly ruled that the federal doctrine of qualified immunity applied.

7. Error that does not prejudice the substantial rights of a party is harmless. Where a party does not even allege prejudice, trial court error, if any, is harmless.

Cortland E. Berry, Reading, for appellants.

Patrick G. Reavey of Fisher, Patterson, Sayler & Smith, L.L.P., Overland Park, for appellees.

Before BRAZIL, C.J., and GREEN and KNUDSON, JJ.

BRAZIL, Chief Judge:

Gary Sage and ALJU Construction Company (Sage) filed suit against Sue Williams, et al., as employees of Greenwood County (County) after the County refused to accept Sage's application for vehicle registration because Sage was delinquent in paying personal property taxes. Sage appeals the order of the district court granting summary judgment to the County. We affirm.

In May 1993, Sage filed suit against several officials of Greenwood County as well as the Board of County Commissioners for Greenwood County. The petition claimed the action arose under 42 U.S.C. § 1983 (1994) and K.S.A. 60-907 and asked for injunctive relief to prevent the County from assessing or collecting an illegal tax. It also claimed a conspiracy pursuant to 42 U.S.C. § 1985 (1994).

1. Exhaustion of Remedies

According to Sage's petition to the district court, Sue Williams, the county treasurer, filed several tax warrants between July 1986 and November 1990 against Sage for delinquent personal property taxes. In September 1990 and April 1991, Mrs. Wanda Sage went to the county treasurer's office and offered to pay all delinquent taxes. On each occasion, the county treasurer's office informed Mrs. Sage that she owed a certain amount, and on each occasion Mrs. Sage paid the stated amount. Beginning in August 1992, the county treasurer's office refused to allow Sage to register his motor vehicles because he had not completely paid his personal property taxes. Sage claimed he was never notified prior to that date that any other taxes were due or delinquent.

In his petition, Sage claimed that because the county treasurer's office failed to both inform Mrs. Sage of the full and correct amount of taxes owed and subsequently notify Sage of the tax delinquency, the County should be estopped from claiming delinquent taxes, interest, or penalties for the years 1985-88.

The district court found that Sage failed to exhaust his administrative remedies as required by K.S.A.1996 Supp. 79-2005. The doctrine of exhaustion of administrative remedies applies to tax matters. In State ex rel. Smith v. Miller, 239 Kan. 187, 718 P.2d 1298 (1986), the court held:

"The well-recognized rule in this state is that where a full and adequate administrative remedy is provided in tax matters by statute, such remedy must ordinarily be exhausted before a litigant may resort to the courts." Syl. p 1.

"A party aggrieved by an administrative ruling is not free to pick and choose a procedure in an action in the district court in order to avoid the necessity of pursuing his remedy through administrative channels." Syl. p 2.

In Dean v. State, 250 Kan. 417, 421, 826 P.2d 1372, cert. denied 504 U.S. 973, 112 S.Ct. 2941, 119 L.Ed.2d 566 (1992), the court stated:

"In the realm of taxes, matters of assessment, exemption, equalization, and valuation are administrative in character. See Symns v. Graves, 65 Kan. 628, 636, 70 Pac. 591 (1902). Under Kansas law, it would be unwarranted for a court to entertain a tax suit on any of these matters of administrative expertise where administrative remedies had not been pursued."

See also J. Enterprises, Inc. v. Board of Harvey County Comm'rs, 253 Kan. 552, 555-561, 857 P.2d 666 (1993) (discussing exhaustion doctrine).

Sage contends the doctrine should not apply to this case because his estoppel claim is judicial rather than administrative in nature. In Zarda v. State, 250 Kan. 364, 368-69, 826 P.2d 1365, cert. denied 504 U.S. 973, 112 S.Ct. 2941, 119 L.Ed.2d 566 (1992), the court held:

"Where there are no issues raised which lend themselves to administrative determination and the only issues present either require judicial determination or are subject to judicial de novo review, it follows that plaintiffs should be permitted to seek court relief without first presenting the case to the administrative agency."

The question is whether Sage's estoppel claim lends itself to administrative determination by the Board of Tax Appeals (BOTA) or instead requires judicial determination. The doctrine of estoppel is equitable in nature. Newton v. Hornblower, Inc., 224 Kan. 506, 515, 582 P.2d 1136 (1978). Sage's claim, which is based on the conduct of the county treasurer's office, may properly be characterized as a claim for equitable estoppel. See Tucker v. Hugoton Energy Corp., 253 Kan. 373, 382-83, 855 P.2d 929 (1993). The Tucker court defined equitable estoppel:

"Equitable estoppel is the effect of the voluntary conduct of a party that precludes that party, both at law and in equity, from asserting rights against another who relies on such conduct. A party seeking to invoke equitable estoppel must show that the acts, representations, admissions, or silence of another party (when it had a duty to speak) induced the first party to believe certain facts existed. There must also be a showing the first party rightfully relied and acted upon such belief and would now be prejudiced if the other party were permitted to deny the existence of such facts." 253 Kan. at 382-83, 855 P.2d 929.

Equity is a system of jurisprudence developed in conjunction with the common law. 30A C.J.S., Equity §§ 2-4. Generally "[i]n the absence of statutory language granting equity powers, a tribunal is not vested with equitable jurisdiction." 30A C.J.S., Equity § 6. The Kansas Constitution provides that "[t]he judicial power of this state shall be vested exclusively in one court of justice." Kan. Const. art. 3, § 1. Although administrative agencies such as BOTA may perform quasi-judicial functions reasonably necessary to the proper performance of their administrative duties when authorized by the legislature, see Behrmann v. Public Employees Relations Board, 225 Kan. 435, 443, 591 P.2d 173 (1979), agencies have no general or common-law powers. Woods v. Midwest Conveyor Co., 231 Kan. 763, 770, 648 P.2d 234 (1982).

BOTA is an independent agency within the executive branch of the state government, see K.S.A. 74-2433a, and as a state agency, BOTA's powers are limited to those expressly granted to it by the legislature. See Pork Motel, Corp. v. Kansas Dept. of Health & Environment, 234 Kan. 374, 378, 673 P.2d 1126 (1983); Woods v. Midwest Conveyor Co., 231 Kan. at 770, 648 P.2d 234.

"Administrative agencies are creatures of statute and their power is dependent upon authorizing statutes, therefore any exercise of authority claimed by the agency must come from within the statutes. There is no general or common law power that can be exercised by an administrative agency." Pork Motel, Corp. v. Kansas Dept. of Health & Environment, 234 Kan. at 378, 673 P.2d 1126.

The legislature expressly authorized BOTA to hear appeals from the Director of Taxation and the Director of Property Valuation on their rulings and interpretations and on their assessment of property values. K.S.A. 74-2437(a), (b). The legislature intended to channel all tax matters through BOTA, the paramount taxing authority in the state. Tri-County Public Airport Authority v. Board of Morris County Comm'rs, 233 Kan. 960, 964, 666 P.2d 698 (1983).

Because BOTA is an administrative agency and not a court, it does not have the power to hear and decide equitable claims. BOTA's authority islimited to tax matters, and while Sage's equitable estoppel claim tangentially involves taxes, taxation is not at the heart of the claim. Sage's claim requires judicial determination and, therefore, Sage should be permitted to seek relief in the district court without first presenting his case to BOTA. See Zarda v. State, 250 Kan. at 368-69, 826 P.2d 1365. Because no administrative remedy was available, exhaustion was not required. See Colorado Interstate Gas Co. v. Beshears, 18 Kan.App.2d 814, 821, 860 P.2d 56 (1993), rev....