State Dept. of Assessments and Taxation v. Clark

• Citation: 281 Md. 385,380 A.2d 28
• Decision Date: 04 November 1977
• Docket Number: No. 23,23
• Parties: STATE DEPARTMENT OF ASSESSMENTS AND TAXATION et al. v. Fitzhugh T. CLARK et ux.
• Court: Court of Appeals of Maryland

Page 385

281 Md. 385

380 A.2d 28

STATE DEPARTMENT OF ASSESSMENTS AND TAXATION et al. v. Fitzhugh T. CLARK et ux.

No. 23.

Court of Appeals of Maryland.

Nov. 4, 1977.

Kaye T. Brooks, Asst. Atty. Gen., Baltimore (Francis B. Burch, Atty. Gen., Baltimore, on the brief), for Dept. of Assessments and Taxation et al.

H. Christopher Malone, Asst. County Atty., Rockville (Richard S. McKernon, County Atty. and Robert G. Tobin, Jr., Deputy County Atty., Rockville, on the brief), for Director of Finance for Montgomery County, Md.

Murray L. Deutchman, Rockville (Bullard & Deutchman, P. A., Rockville, on the brief), for appellees.

Argued before MURPHY, C. J., and SINGLEY, ^* SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

ORTH, Judge.

This case is before us on a writ of certiorari to review a judgment of the Court of Special Appeals entered in State Dept. of Assess. & Tax. v. Clark, 34 Md.App. 136, 147, 367 A.2d 69 (1976). The petition for the writ presented this question:

Whether a circuit court may exercise jurisdiction over a declaratory judgment action to review the gratuitous decrease of a final ad valorem assessment on real property by the Supervisor of Assessments, the Property Tax Assessment Appeal Board and the Director of Finance pursuant to Section 67, Article 81, Annotated Code of Maryland?

I

At the time this litigation arose, Maryland Code (1957, 1975 Repl.Vol.) Art. 81, § 67 ¹ read in relevant part:

The final assessing authority, the supervisor of assessments and the county treasurer (in Montgomery County the director of finance) of each county and in Baltimore City, the city solicitor, and the director of the department of assessments, . . . may by an order, decrease or abate an assessment after the date of finality for any year, whether a protest against said assessment was filed before the date of finality or not, in order to correct erroneous and improper assessments and to prevent injustice, provided, that the reasons for such decrease or abatement shall be clearly set forth in such order. ² (Emphasis added).

The circumstances surrounding the litigation are not disputed. In 1970 a parcel of ground in Montgomery County was rezoned on the initiative of the owners, Fitzhugh T. Clark and Geraldine J. Clark, his wife (appellees), from the classification of rural-residential to multiple family medium density residential. In 1971 the assessment of this real property for tax purposes was substantially increased for the 1972 tax year because of the rezoning and a general reassessment. Appellees did not protest, and the assessment became final on 1 January 1972. In May 1972 the Washington Suburban Sanitary Commission imposed limitations on new authorizations for sewer extensions and new connections to existing sewer lines (the sewer moratorium) in parts of Montgomery County, including appellees' land. On 29 August 1972 appellees wrote the Supervisor of Assessments for Montgomery County requesting that a reassessment of their property, to be effective for the next six month period, be made in view of the sewer moratorium. The Supervisor, recommending that the assessment for the taxable year 1972 be reduced 25%, sent the letter to the Appeal Tax Court for Montgomery County ³ for "consideration and appropriate action" under § 67. Upon a hearing at which appellees appeared with counsel and presented evidence and argument, the Appeal Tax Court entered an order on 15 February 1973 decreasing the land assessment 25%. The Supervisor of Assessments signed the order on 22 February. The order and supporting documents were sent to the Director of Finance for Montgomery County who approved it on 23 February upon his independent decision that the decrease was proper. By letter dated 7 March the Appeal Tax Court notified appellees of the order abating the assessment. On 9 April 1973 appellees appealed to the Maryland Tax Court which dismissed the appeal by its order of 21 August 1974. Appellees noted an appeal from the order of dismissal to this Court, but dismissed it on 1 August 1975. See Mont. Co. Council v. Supervisor, 275 Md. 339, 340 A.2d 302, decided 26 June 1975. In the meantime, on 11 April 1973, appellees filed an action in the Circuit Court for Montgomery County, which, upon amendment, named the Director of the State Department of Assessments and Taxation, the Supervisor of Assessments for Montgomery County, the Property Tax Assessment Appeal Board for Montgomery County, and the Director of Finance for Montgomery County (appellants) as defendants. The action sought a declaratory judgment (1) enjoining appellants from collecting taxes levied upon appellees' property without providing them with the opportunity for a rehearing on the question of the value of their property as affected by the sewer moratorium, and (2) declaring § 67 unconstitutional as applied to appellees in that it violated their rights to equal protection and due process of the law and amounted to a taking without just compensation. The action was disposed of by the trial court upon motions for summary judgment. By order of 18 February 1976, the court denied the motions for summary judgment filed by appellants and granted the motion filed by appellees "to the extent that these proceedings are hereby remanded to the Supervisor of Assessments for Montgomery County, the Director of Finance for Montgomery County and the Property Tax Assessment Appeal Board for such further proceeding under Article 81, Section 67 of the Annotated Code of Maryland as may be necessary, consistent with the views expressed in this opinion . . . ." Appellants appealed to the Court of Special Appeals.

The motions for summary judgment included a common question the jurisdiction of the Circuit Court for Montgomery County to review § 67 proceedings. Appellants contended that the trial court had no jurisdiction because "(t)he remedies provided by Article 81 for the contest of property assessments are exclusive . . . ." Appellees claimed that the court had jurisdiction under its inherent power. The trial court held that it had jurisdiction. The Court of Special Appeals agreed. State Dept. of Assess. & Tax. v. Clark, 34 Md.App. at 147, 367 A.2d 69. Appellees had also asserted in their motion for summary judgment that appellants' action under § 67 in arriving at the abatement of the assessment had been arbitrary, capricious and illegal. The trial court was in accord with this view but the Court of Special Appeals was not. Finding that the court erred in ruling as a matter of law that the action of the taxing and fiscal authorities in abating the assessment was arbitrary, it reversed "the judgment summarily granted in favor of appellees on the issue of arbitrariness," id. at 154-155, 367 A.2d at 81 and "also vacate(d)" the denial of the motions for summary judgment of appellants, id. at 155, 367 A.2d 69. It remanded the case "pursuant to Maryland Rule 1071." Upon petition of appellants, we ordered the issuance of a writ of certiorari.

II

(a)

As first enacted by Acts 1939, ch. 294, the Uniform Declaratory Judgments Act (UDJA) did not contain the requirement that when a special statutory remedy exists it must be followed. As first enacted by Acts 1939, ch. 294, the UDJA did not contain this requirement. Its principle, however, was recognized and applied by this Court. Tawes, Comptroller v. Williams, 179 Md. 224, 17 A.2d 137 (1941). The requirement was expressly set out upon the amendment of the UDJA by Acts 1945, ch. 724 ⁴: "When, however, a statute provides a special form of remedy for a specific type of case, that statutory remedy must be followed . . . ." Code (1951) Art. 31A, § 6. This provision was carried over in Code (1974) Courts and Judicial Proceedings Article § 3-409(b) in this form: "If a statute provides a special form of remedy for a specific type of case, that statutory remedy shall be followed in lieu of a proceeding under this subtitle."

(b)

Assessment of real property for the purpose of ad valorem taxation revolves around a date of finality. ⁵ The necessity for a time at which an assessment is finally established is manifest. A final determination of property tax assessments is vital in the ascertainment of a tax base, the fixing of a tax rate, the accurate calculating of future revenues and the timely levying of taxes, so that a balanced budget may be obtained. Of course, it is obvious that the amount of the tax assessment of property is a matter of primary concern to the owner of the property.

The General Assembly, recognizing the importance of both the amount of the assessment and a date of finality, devised a comprehensive scheme whereby an assessment may be protested. Before the date of finality, challenge may be made as a matter of right. Notice of the assessment is required with timely opportunity to protest to the body from which the notice emanates. § 29(a). Any taxpayer, county, city, or the Attorney General or the State Department of Assessments and Taxation may demand a hearing before the supervisor of assessments "as to the assessment of any property or any unit of tax value, or as to the increase, reduction, or abatement of any assessment, or as to the classification, for the next year," § 255(a), and may demand a further hearing before the property tax assessment appeal board, § 255(b). Further appeal may be made to the Maryland Tax Court, § 256. See §§ 229, 234; La Belle v. State Tax Comm., 217 Md. 443, 451-452, 142 A.2d 560, cert. denied, 358 U.S. 889, 79 S.Ct. 135, 3 L.Ed.2d 117 (1958). Thus, there is a full panoply of administrative procedures bestowed as of right with respect to the review of a tax assessment provided the assessment is properly protested before the date of finality. ⁶

Review of an assessment does not stop with the exhaustion of administrative remedies. Thereafter, there is the right to a judicial review. Now, "(a)ny party to the proceedings may appeal from the (Maryland Tax) Court's final order to the circuit...