State ex rel. Pros. Atty. v. Bayer Corp.

• Decision Date: 05 November 2008
• Docket Number: No. 33871.,33871.
• Citation: 672 S.E.2d 282
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. Prosecuting Attorney of Kanawha County, West Virginia, Petitioner Below, Appellee, v. BAYER CORPORATION, Respondent Below, Appellant.

672 S.E.2d 282

STATE of West Virginia ex rel. Prosecuting Attorney of Kanawha County, West Virginia, Petitioner Below, Appellee, v. BAYER CORPORATION, Respondent Below, Appellant.

No. 33871.

Supreme Court of Appeals of West Virginia.

Submitted October 7, 2008.

Decided November 5, 2008.

Concurring and Dissenting Opinion of Justice Benjamin January 9, 2009.

Syllabus by the Court

1. In a proceeding brought before a county commission by a tax payer under W. Va.Code § 11-3-27 (2000) (Repl.Vol.2008), either the Tax Commissioner or the county prosecutor may challenge the county commission's decision in circuit court through a petition for a writ of certiorari.

2. Unless otherwise provided by law, the standard of review by a circuit court in a writ of certiorari proceeding under W. Va. Code § 53-3-3 (1923) (Repl.Vol.2000) is de novo.

3. A taxpayer seeking relief from an erroneous tax assessment under W. Va.Code § 11-3-27 (2000) (Repl.Vol.2008), must establish entitlement to relief by clear and convincing evidence.

4. Under W. Va.Code § 11-3-27(a) (2000) (Repl.Vol.2008), a mistake occasioned by an unintentional or inadvertent act is established by evidence showing that, although the duty of care was not breached, an error occurred in the entry in the property books of the county, including entries with respect to classification and taxability of property. Relief under the statute may not be granted if it is shown that a taxpayer breached its duty of care.

Herschel H. Rose III, Steven R. Broadwater, Rose Law Office, Charleston, for Appellant.

Stephen B. Revercomb, Prosecuting Attorney, Robert W. Schulenberg III, Assistant Prosecuting Attorney, Charleston, for Appellee.

DAVIS, Justice:¹

This is an appeal by Bayer Corporation, respondent below (hereinafter referred to as "Bayer"), from a final order of the Circuit Court of Kanawha County that reversed a tax exoneration decision by the Kanawha County Commission (hereinafter referred to as "the Commission"). In this appeal, Bayer makes the following assignments of error: (1) the Prosecuting Attorney of Kanawha County did not have authority to challenge the Commission's ruling in circuit court, (2) the circuit court erred in applying a de novo standard of review, and (3) the circuit court erred in reversing the Commission's ruling on the merits of the issues presented. In addition, the Prosecuting Attorney of Kanawha County, petitioner below (hereinafter referred to as "the Prosecutor"), has made a cross assignment of error. The Prosecutor argues that the Commission applied the wrong standard of proof in assessing the evidence.² After a careful review of the briefs and record, and having listened to the oral arguments of the parties, we affirm.

I. FACTUAL AND PROCEDURAL HISTORY

It appears from the record that at some point in 2003, Bayer was involved in litigation with the Department of Tax and Revenue in a matter unrelated to the instant case. During the course of discovery in that litigation, an attorney for Bayer determined that Bayer had made errors in its tax returns for the years 2001, 2002, and 2003. As a consequence of believing that errors were made for those tax years, on August 21, 2003, Bayer made an application to the Commission for relief from tax reporting errors for the years 2001, 2002, and 2003. The errors alleged by Bayer included: (1) reporting inventory data for the wrong month, (2) reporting raw materials as finished goods, (3) reporting materials as being in inventory that were actually in transit, and (4) granting an exemption for raw materials in 2003. As a result of the errors, Bayer sought a total reduction in taxes in the amount of $456,747 for all three years.

On November 6, 2003, the Commission held a hearing on Bayer's application. Bayer was represented by counsel at the hearing and the State (and all affected lower governmental entities) was represented by counsel for the Tax Commissioner. Bayer called three witnesses during the hearing. The State cross examined two of Bayer's witnesses, but did not call any witnesses of its own. At the conclusion of all the evidence, the Commission, by a vote of 2-1, granted Bayer the relief requested.

The record indicates that by letter dated November 19, 2003, Bayer notified the Prosecutor that it had applied to the Commission for relief from erroneous tax assessments for the years 2001, 2002, and 2003. The letter further notified the Prosecutor that a hearing on the matter would be held before the Commission on November 20, 2003.

On November 20, 2003, a hearing was held by the Commission. The hearing was attended by Bayer, but neither the Prosecutor nor the Tax Commissioner were present.³ The hearing appears to have been called in order for the Commission to discuss the contents of the order granting the relief Bayer requested.⁴ The Commission voted to approve the order as drafted, but delayed entry of the order until the dissenting Commissioner had an opportunity to compose a written dissent.

On February 19, 2004, the Commission entered the order granting Bayer the relief it sought. On March 17, 2004, the Prosecutor filed a petition for a writ of certiorari with the circuit court seeking to reverse the decision of the Commission. After reviewing the case based upon the record, the circuit court entered an order on August 10, 2006, reversing the decision of the Commission. Bayer subsequently filed a motion for new trial and a motion to alter or amend the judgment. The circuit court denied the motions by order entered April 20, 2007. Bayer subsequently timely filed this appeal.

II. STANDARD OF REVIEW

This case requires the Court to review a certiorari order of the circuit court. This Court applies an abuse of discretion standard in reviewing a circuit court's certiorari judgment. See Syl. pt. 1, in part, Michaelson v. Cautley, 45 W.Va. 533, 32 S.E. 170 (1898) ("[T]he circuit court has a large discretion in awarding [a writ of certiorari] ... and, unless such discretion is plainly abused, this court cannot interfere there with."). See also Syllabus, in part, Snodgrass v. Board of Educ. of Elizabeth Indep. Dist., 114 W.Va. 305, 171 S.E. 742 (1933) ("When, after judgment on certiorari in the circuit court, a writ of error is prosecuted in this court to that judgment, a decision of the circuit court on the evidence will not be set aside unless it clearly appears to have been wrong."). It has been said that "the scope of review under the common law writ of certiorari is very narrow. It does not involve an inquiry into the intrinsic correctness of the decision of the tribunal below, but only into the manner in which the decision was reached." Hall v. McLesky, 83 S.W.3d 752, 757 (Tenn.Ct.App.2001). However, to the extent that our review involves a question of law, our review is de novo. See Syl. pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995) ("Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review."). With these standards in view, we turn to the issues presented.

III. DISCUSSION

A. The Prosecutor Had Authority to Challenge the Commission's Decision in Circuit Court

The first issue we address is Bayer's contention that the Prosecutor did not have authority to file a petition for a writ of certiorari with the circuit court to challenge the decision of the Commission. Bayer raised this issue before the circuit court and it was rejected. In this appeal Bayer contends that the Prosecutor does not have authority to challenge the Commission's decision, because the Prosecutor is not the real party in interest as required by Rule 17(a) of the West Virginia Rules of Civil Procedure.⁵ Bayer misunderstands the application of Rule 17(a), which has no application to a party who is defending against a claim. Rule 17(a) applies only to a party asserting a claim. We addressed this precise issue in Keesecker v. Bird as follows:

Our reading of the language of Rule 17(a) is that it plainly indicates that its analysis applies only to claimants, that is, individuals who "prosecute[ ]," "sue," or who may bring a lawsuit in the name of the state or others. The real party in interest analysis focuses upon a plaintiff, defendant, petitioner, or intervenor that is asserting a claim, counter-claim or cross-claim, as opposed to a defendant or respondent, that is, the persons against whom a claim is made.

200 W.Va. 667, 676, 490 S.E.2d 754, 763 (1997).

Keesecker, 200 W.Va. at 676, 490 S.E.2d at 763. See also Lincoln Prop. Co. v. Roche, 546 U.S. 81, 90, 126 S.Ct. 606, 614, 163 L.Ed.2d 415 (2005) ("Rule [17(a) ], as its text displays, speaks to joinder of plaintiffs, not defendants.").

In the instant proceeding, the Prosecutor has not asserted a claim against Bayer. The Prosecutor is challenging a ruling by the Commission that granted a claim asserted by Bayer.⁶

To resolve the issue of the Prosecutor's authority to challenge the Commission's ruling, we must look to the applicable statutes. In this regard, we have held that "[t]he primary object in construing a statute is to ascertain and give effect to the intent of the Legislature." Syl. pt. 1, Smith v. State Workmen's Comp. Comm'r, 159 W.Va. 108, 219 S.E.2d 361 (1975). "In order to safeguard the expressed legislative intention, it is imperative to view the precise language and terms employed in the statute at issue. Only when such language is ambiguous may we interpret and construe a statutory provision." Webster County Comm'n v. Clayton, 206 W.Va. 107, 112, 522 S.E.2d 201, 206 (1999). See also Syl. pt. 1, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992) ("A statute that is ambiguous must be construed before it can be applied.").

The statute authorizing Bayer to seek relief from the erroneous tax assessments is W. Va.Code § 11-3-27 (2000) (Repl.Vol. 2008). The relevant provision in the statute provides, in part, as...