STATE DEPT. OF REVENUE v. Calhoun

• Decision Date: 24 April 1998
• Citation: 792 So.2d 373
• Parties: STATE DEPARTMENT OF REVENUE v. Clay J. CALHOUN. Clay J. Calhoun v. State Department of Revenue.
• Court: Alabama Court of Civil Appeals

792 So.2d 373

STATE DEPARTMENT OF REVENUE v. Clay J. CALHOUN.

Clay J. Calhoun v. State Department of Revenue.

2970301.

Court of Civil Appeals of Alabama.

April 24, 1998.

Rehearing Applications Denied June 19, 1998.

Bill Pryor, atty. gen.; Ron Bowden, chief counsel, Department of Revenue, and asst. atty. gen.; and John J. Breckenridge, asst. counsel, Department of Revenue, and asst. atty. gen., for appellant/cross appellee.

Gregory L. Leatherbury, Jr., and Bryan A. Thames of Hand Arendall, L.L.C., Mobile, for appellee/cross appellant.

ROBERTSON, Presiding Judge.

The State Department of Revenue ("the Department") appeals from a summary judgment entered by the Circuit Court of Mobile County in favor of Clay J. Calhoun.

On October 17, 1988, the Department entered two preliminary assessments against Calhoun for oil and gas privilege taxes. Calhoun disputed the assessments, and attempts between Calhoun and the Department to informally resolve the disputes failed. In January 1989, Calhoun requested a formal hearing with the Department's Administrative Law Division. In a letter dated February 8, 1989, the administrative law judge notified Calhoun that his request for a hearing had been docketed. The administrative law judge's letter also stated that Calhoun would be informed of the time and place of the hearing, by written notice, and that "this confirmation letter requires no response on your part at this time. You will forthwith receive the above mentioned notice." In a letter dated February 8, 1989, the administrative law judge notified the Department of Calhoun's appeal to the Administrative Law Division. The administrative law judge also requested that the Department "at its earliest convenience, please forward to this office a short statement of the relevant facts, the matters asserted, the Department's position, and the issues involved."¹ No further action was taken by the Department for over five years.

On February 24, 1994, the administrative law judge entered an order setting a hearing on Calhoun's appeal for April 14, 1994, and directing the Department to file an answer by March 31, 1994. The Department filed an answer stating its position regarding Calhoun's disputed oil and gas privilege taxes. On March 11, 1994, Clay Calhoun, Jr., Calhoun's representative, wrote a letter to the administrative law judge, objecting to the assessments. Calhoun's representative asserted that Calhoun was in ill health and was unable to attend the hearing; that Calhoun had not agreed to the Department's five-year delay in prosecuting its claim; and that Calhoun had relied, to his detriment, on the Department's inactivity on the file, so as to bar the Department's assessment pursuant to the equitable doctrine of laches.

On November 23, 1994, Calhoun filed a motion for a judgment on the pleadings and a motion to dismiss. Calhoun alleged, among other things, that the Department's assessments were due to be dismissed pursuant to the administrative appeal provisions of Ala.Code 1975, § 40-2A-1 et seq., the "Alabama Taxpayers' Bill of Rights and Uniform Revenue Procedures Act" (sometimes hereinafter referred to as "the Act" or "the Taxpayers' Bill of Rights"). Specifically, Calhoun argued that § 40-2A-9(c) required the Department to file an answer within 30 days upon receiving a notice of appeal to the Administrative Law Division. On January 30, 1995, the administrative law judge entered a preliminary order denying Calhoun's motions and concluding that the Taxpayers' Bill of Rights was inapplicable because Calhoun's administrative appeal was filed in January 1989, three years before the October 1, 1992, effective date of the Act.

A hearing was held on the merits of Calhoun's case on May 18, 1995, and on October 31, 1995, the administrative law judge entered an order requiring the Department to recompute Calhoun's tax liability in accordance with the findings contained in its order. The Department recalculated Calhoun's assessments in accordance with the administrative law judge's order. Calhoun subsequently filed an application for rehearing, and on May 9, 1996, the administrative law judge entered a final order upholding the Department's final assessment of Calhoun's oil and gas privilege tax.

On June 10, 1996, Calhoun filed a complaint and notice of appeal with the Circuit Court of Mobile County. Both the Department and Calhoun thereafter filed motions for a summary judgment. After a hearing on the motions, the trial court entered a summary judgment in favor of Calhoun on October 21, 1997. That judgment stated, in pertinent part:

"The Court has considered all of the motions, briefs, exhibits, and arguments of the parties, as well as the entire administrative law record of the proceedings in the Administrative Law Division and the orders entered by the administrative law judge. [The court having] considered this information, Calhoun's motion for a summary judgment is due to be and hereby is granted, and the Department's motion for a summary judgment is due to be and hereby is denied. The Court finds that the Taxpayers' Bill of Rights is applicable to this case and that the Department's failure to answer within the time limits required by said Act mandates entry of a summary judgment in favor of Calhoun and against the Department.

"Alternatively, entry of a summary judgment of behalf of Calhoun is compelled based on the equitable doctrine of laches because this Court finds: (i) that there was a substantial delay in this matter; (ii) that the delay was without just cause; and (iii) that Calhoun suffered substantial prejudice as a result.

"This Order constitutes a final judgment herein. The parties are to bear their own costs."

The Department appeals, contending that the trial court erred in entering the summary judgment in favor of Calhoun because, it claims, the trial court's judgment was clearly erroneous and contrary to law. Specifically, the Department argues that the trial court erred in entering the summary judgment in favor of Calhoun based on the applicability of the Taxpayers' Bill of Rights or, alternatively, based on the applicability of the equitable doctrine of laches. Calhoun cross-appeals, contending that the trial court erred in not awarding him attorney fees.

In reviewing the disposition of a motion for a summary judgment, we utilize the same standard as the trial court in determining whether the evidence made out a genuine issue of material fact and whether the movant was "entitled to a judgment as a matter of law." Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988); Rule 56(c), Ala.R.Civ.P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989).

In this case, the Department does not contend that the trial court's summary judgment in favor of Calhoun was erroneous on the basis that there was a genuine issue of material fact in dispute. Rather, the Department asserts that the trial court's summary judgment was erroneous because the Department was entitled to a judgment as a matter of law. Rule 56(c), Ala.R.Civ.P.

Because the parties concede that the facts of this case are undisputed and because the controversy involves only questions of law, the trial court's judgment carries no presumption of correctness, and our review is de novo. Beavers v. County of Walker, 645 So.2d 1365 (Ala.1994), and Lake Forest Property Owners' Ass'n v. Smith, 571 So.2d 1047 (Ala.1990).

I. The Department's Appeal

The Department argues that the trial court's summary judgment in favor of Calhoun based on the applicability of the Taxpayers' Bill of Rights was contrary to the law because, it claims, the Act was not effective until three years after Calhoun filed his notice of appeal to the Administrative Law Division. The Department asserts that because nothing in the Taxpayers' Bill of Rights indicates that its provisions are retroactive, the trial court erred in applying its provisions to Calhoun's appeal.

Calhoun argues that, because the Taxpayers' Bill of Rights is a remedial statute, the trial court correctly applied it to Calhoun's case. Calhoun further asserts that because the Taxpayers' Bill of Rights is a remedial statute that should be applied retroactively, the Department was required to answer Calhoun's appeal to the Administrative Law Division within 30 days of the October 1, 1992, effective date of the Act. Section 40-2A-9(c), a part of the Act states, in pertinent part, that "[t]he administrative law division shall notify the legal division of the department that an appeal has been filed, and the legal division shall be required to file a written answer with the administrative law division within 30 days from receipt of notice." (Emphasis added.)

Our Supreme Court stated the general rule regarding the retroactivity of statutes in Ex parte Bonner, 676 So.2d 925, 926-27 (Ala.1995).

"[T]his Court has often noted that `retrospective application of a statute is generally not favored, absent an express statutory provision or clear legislative intent that the enactment apply retroactively as well as prospectively.' Jones v. Casey, 445 So.2d 873, 875 (Ala.1983). See also Kittrell v. Benjamin, 396 So.2d 93, 94 (Ala.1981); City of Brewton v. White's Auto Store, Inc., 362 So.2d 226 (Ala.1978). This general rule is, however, subject to an equally well-established exception, namely, that `remedial statutes... are not within the legal [concept] of "retrospective laws," ... and do operate retroactively, in the absence of language clearly showing a contrary intention.' Street v. City of Anniston, 381 So.2d 26, 29 (Ala.1980). See Jones, 445 So.2d at 875, citing Street, supra. In other words, `remedial statutes—those which do not create, enlarge, diminish, or destroy vested rights—are favored by the courts, and their

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