State ex rel. Ashby Road Partners, LLC. v. State Tax Com'n

• Citation: 297 S.W.3d 80
• Decision Date: 04 August 2009
• Docket Number: No. SC 89529.,SC 89529.
• Court: United States State Supreme Court of Missouri
• Parties: STATE ex rel. ASHBY ROAD PARTNERS, LLC, et al., Appellants, v. STATE TAX COMMISSION of Missouri, Respondent, Philip Muehlheausler, Assessor of St. Louis County, Respondent.

297 S.W.3d 80

STATE ex rel. ASHBY ROAD PARTNERS, LLC, et al., Appellants, v. STATE TAX COMMISSION of Missouri, Respondent, Philip Muehlheausler, Assessor of St. Louis County, Respondent.

No. SC 89529.

Supreme Court of Missouri, En Banc.

August 4, 2009.

Byron E. Francis, Cynthia A. Petracek, Armstrong Teasdale LLP, St. Louis, for appellants.

Chris Koster, Attorney General, Mark E. Long, Assistant Attorney General, Paula J. Lemerman, Associate County Counselor, Patricia Redington, County Counselor, for respondents.

PATRICIA BRECKENRIDGE, Judge.

Commercial property owners¹ appeal the Cole County circuit court's judgment denying their petition for a writ of prohibition. Property owners had asked the circuit court to issue a writ prohibiting the State Tax Commission of Missouri from requiring property owners to prove their properties' market values in proceedings on their complaints that the St. Louis County assessor assigned discriminatory assessments to their properties. This Court affirms the circuit court's judgment.

Factual and Procedural Background

Property owners assert that Philip Muehlheausler, assessor for St. Louis County, discriminated against them by assessing their properties at a higher percentage of true value² in comparison with other similar commercial properties in the same taxing area. Each appellant alleges that its own property was assessed accurately at precisely 32 percent of its true market value, while other similarly situated properties were assessed at a lower percentage of true market value. After failing to obtain relief from the St. Louis County board of equalization, property owners filed individual complaints for review of assessment with the commission, which were consolidated. The hearing officer assigned to their cases issued an order requiring property owners to designate a lead case for each group for the purpose of determining market value and the assessment ratio.

Property owners filed an objection to this order, arguing it was unnecessary to require property owners to prove their properties' market values. Property owners argued that they do not dispute the assessor's determination of market value and that their only objection was to their properties' assessed values in relation to the assessment of other properties, which they argued had been undervalued systematically.³ Property owners contended that the assessor impermissibly would attempt to use their market value evidence to advocate a higher value for their properties. They asserted that section 138.060⁴ prohibits an assessor, in a hearing or trial of an appeal of a valuation assessment, from advocating for a higher valuation than the value originally set for that assessment period.

The hearing officer overruled their objections to the order, and the commission affirmed the hearing officer's order. The commission held that, to prove their discrimination claims, property owners were required to prove the true market values of their properties to determine the actual levels at which the properties had been assessed. The commission stated that property owners could show true market value through several methods, but that, regardless of the method, the true market value of property owners' properties is relevant and necessary to property owners' discrimination claims and must be proven.

Property owners then petitioned the circuit court for a writ of prohibition, alleging the commission acted in excess of its authority because it imposed a burden of producing evidence that not only was prohibited by section 138.060 but also was irrelevant in light of property owners not contesting their properties' assessed values. The circuit court issued a summons to the commission, and the commission filed a response to the petition as well as suggestions in opposition. The circuit court denied property owners' request for a preliminary writ of prohibition but set the case for hearing. The circuit court heard the matter and subsequently denied property owners' petition on the merits. After the court of appeals dismissed their appeal from that denial, this Court granted transfer. Mo. Const. art. V, sec. 10.

Standard of Review

"Prohibition is an original remedial writ brought to confine a lower court to the proper exercise of its jurisdiction." State ex rel. White Family P'ship v. Roldan, 271 S.W.3d 569, 572 (Mo. banc 2008). A writ of prohibition will issue to prevent "an abuse of judicial discretion, to avoid irreparable harm to a party, or to prevent an abuse of extra-jurisdictional power." State ex rel. Kinder v. McShane, 87 S.W.3d 256, 260 (Mo. banc 2002). A writ of prohibition is discretionary, however, and "`there is no right to have the writ issued.'" State ex rel. Wyeth v. Grady, 262 S.W.3d 216, 219 (Mo. banc 2008) (quoting State ex rel. Linthicum v. Calvin, 57 S.W.3d 855, 857 (Mo. banc 2001)).

Proceedings in Prohibition

The normal proceedings in prohibition established in Rule 97 are as follows: First, a relator initiates a proceeding by filing a petition for a writ of prohibition in the appropriate court. Rule 97.03. Next, the court considers the petition and determines if a preliminary order in prohibition should issue. Rule 97.04. If the court does not grant a preliminary order, the petitioning party then must file its writ petition in the next higher court. Atteberry v. Mo. Bd. of Prob. & Parole, 193 S.W.3d 444, 445 (Mo.App.2006). If the court, however, "is of the opinion that the preliminary order in prohibition should be granted, such order shall be issued." Rule 97.04. The preliminary order directs the respondent to file an answer within a specified amount of time, and it also may order the respondent to refrain from all or some action. Rule 97.05. If the court issues a preliminary order and a permanent writ later is denied, the proper remedy is an appeal. State ex rel. Am. Eagle Waste Indus. v. St. Louis County, 272 S.W.3d 336, 339 (Mo.App.2008).

The proceedings in this case differed from those anticipated by Rule 97. Here, property owners filed a petition for a writ of prohibition. The circuit court denied the request for a preliminary order and, instead, issued a summons. The commission argues that because no preliminary order was issued, property owners' only recourse is to file a writ petition in the next higher court.

This case differs from the cases on which the commission relied, which held that, on the denial of a preliminary order, the petitioning party must file its writ petition in the next higher court. See, e.g., State ex rel. Office of Pub. Counsel v. Mo. Pub. Serv. Comm'n, 741 S.W.2d 114, 115 (Mo.App.1987). Here, despite the fact that the circuit court denied the request for a preliminary order, the court issued a summons and the commission filed a response to the petition. The circuit court then held a hearing, adjudicated the merits of property owners' writ petition, and decided that property owners were not entitled to a permanent writ of prohibition. The issue, then, is whether the circuit court's issuance of a summons, rather than a preliminary order, precludes an appeal.

The purpose of a preliminary order is two-fold. First, a preliminary order notifies a respondent that a petition has been filed and directs the respondent to file an answer to the petition within a set amount of time. Rule 97.05. Second, it allows the court, in its discretion, to restrict a respondent from engaging in certain activities. Rule 97.05. The function of a summons, such as the one issued in this case, accomplishes the first purpose of a preliminary order. A summons notifies that a pleading has been filed, and it provides a fixed time in which a response must be filed. Rules 54.01 and 54.02. Both a preliminary order in prohibition and a summons serve to elicit the filing of a response to a petition.

Although the circuit court called the document it issued a summons rather than a preliminary order, the substance of the document is the equivalent to a preliminary order in prohibition. A legal document "is not judged by its title but by its substance and content." See State v. Abeln, 136 S.W.3d 803, 813 (Mo.App.2004) (quotation marks and citation omitted). The issuance of a summons is not authorized or anticipated by Rule 97. Nevertheless, the summons issued by the circuit court, in substance, met the purpose of a preliminary order in prohibition and triggered property owners' right to appeal. Accordingly, property owners were entitled to appeal, on the merits, the circuit court's judgment denying their petition in prohibition.⁵

Discrimination Claim

Having found property owners were entitled to appeal, this Court now turns to the merits of property owners' argument. Property owners contend that their properties, while valued correctly, were discriminated against in that similar commercial properties in the same taxing area were assessed at a lower percentage of true market value. If true, such discrimination would violate the Missouri Constitution, which requires uniform taxation on the same class of real property. Mo. Const. art. X, sec. 3.

Property owners maintain they are entitled to a writ prohibiting the commission from requiring them to prove the market values of their properties as an element of their discrimination claims. They assert that they do not challenge the values established by the assessor for their properties, which include the true market values the assessor used to calculate the assessed values, so those values are proof of the market values and the assessor cannot present evidence of any other values of their properties to disprove their claims of discrimination. Property owners claim the effect of the commission's order is that they will be required to obtain expensive commercial appraisals of all of their properties to meet their burden of proving market value. Property owners argue such appraisals are "highly irrelevant" as to the issue of whether their properties were assessed...