State v. Amerada Hess Corp.
Decision Date | 09 June 2000 |
Citation | 788 So.2d 179 |
Parties | STATE of Alabama and State Department of Revenue v. AMERADA HESS CORPORATION et al. |
Court | Alabama Court of Civil Appeals |
Charles H. Dodson, Jr., and Joseph D. Steadman of Sims, Graddick & Dodson, Mobile; and J. Michael Fincher, Mobile, for appellants.
Rae M. Crowe and Duane A. Graham of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, L.L.C., Mobile, for appellees Chevron U.S.A., Inc.; Hunt Oil Company; Hunt Refining Company; Union Oil Company of California; Murphy Oil U.S.A., Inc.; and Murphy Exploration and Production Company.
Norton Brooker, Jr., of Lyons, Pipes & Cook, P.C., Mobile, for appellees Coastal Oil & Gas Corporation and Coastal States Trading, Inc.
Alan C. Christian of Johnstone, Adams, Bailey, Gordon & Harris, L.L.C., Mobile, for appellee Exxon Mobile Corporation.
Conrad P. Armbrecht, Edward A. Dean, and David E. Hudgens of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, L.L.C., Mobile, for appellees Four Star Oil & Gas Company; Texaco, Inc.; Texaco Exploration and Production, Inc.; and Texaco Trading and Transportation, Inc. (George S. Branch, Charles K. McKnight, Jr., and James W. Boswell, of King & Spalding, Atlanta, Georgia, "of counsel").
Edward P. Turner, Jr., and Halron W. Turner of Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom, for appellee Phillips Petroleum Company.
Alabama Supreme Court 1000036.
The State of Alabama and the State Department of Revenue (collectively referred to as "the Department") appeal from a judgment of the trial court dismissing certain claims filed against Amerada Hess Corporation and 35 other oil producers (collectively referred to as "the producers").
The Department initiated this action on October 24, 1997, by filing a complaint in the Circuit Court of Mobile County alleging that the producers had engaged in deceptive schemes and practices with the purpose of underpaying the severance tax1 they owed. The Department, in its complaint, alleged no specific dates on which or locations at which, these offenses were alleged to have been committed. Further, the complaint included no tax assessment advising the producers of the amount of their tax liability. The Department sought to recover past due taxes, interest, and penalties, in an unspecified amount. In addition the Department sought declaratory and injunctive relief.
The producers filed motions to dismiss the complaint against them, pursuant to Rule 12(b)(1) and 12(b)(6), Ala.R.Civ.P. All parties filed memorandum briefs in support of their respective positions. The trial court granted the producers' motions to dismiss the Department's claims for monetary damages and for a declaratory judgment. The trial court subsequently made its order final pursuant to Rule 54(b), Ala.R.Civ.P. The Department's claims for injunctive relief remain pending and have been stayed pending resolution of this appeal. "When a party appeals the dismissal of its complaint, the dispositive issue before this court is not whether that party will ultimately prevail but whether he can possibly prevail." Town of Camp Hill v. James, 686 So.2d 1208, 1210 (Ala.Civ.App.1996)(citing Davis v. University of Montevallo, 586 So.2d 27 (Ala.Civ. App.1991)). Because the facts of this case are undisputed and 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).
On appeal the Department contends that the trial court erred in dismissing its claims against the producers because, it claims, Ala.Code 1975, § 40-2-11, empowers it to sue a taxpayer for the collection of taxes or penalties due the state. Section 40-2-11(4) sets forth specific powers granted to the Department pertaining to tax collection, as follows:
The producers do not dispute the State's authority to sue for collection of its taxes; they argue, however, that the State must proceed in conformity with the Taxpayers' Bill of Rights and Uniform Revenue Procedures Act ("Taxpayers' Bill of Rights") when it sues taxpayers to recover taxes, interest and penalties. Therefore this appeal turns on the question whether the procedures set forth at § 40-2A-1 et seq. are minimum procedures the Department is bound to follow. We answer this question in the affirmative.
Section 40-2A-2(1) expressly sets forth the legislative intent behind the Taxpayers' Bill of Rights:
The scope of the Taxpayers' Bill of Rights is set forth in § 40-2A-2(2), which provides:
In the present case the imposition of severance taxes is clearly included in the phrase "all matters governed by the department." The record contains no evidence of any agreement pertaining to the collection of these taxes or of any other law that governs the procedure for the collection of severance taxes.
Further, Ala.Code 1975, § 40-2A-2(3), makes it clear that the procedures provided within the Taxpayers' Bill of Rights are exclusive. That section expressly provides that "[t]he department shall not be subject to the declaratory judgment, declaratory ruling, or contested case provisions of the Alabama Administrative Procedure Act, Chapter 22 of Title 41."
An overall review of the Taxpayers' Bill of Rights suggests that that statute provides for a uniform minimum procedure designed to ensure the due-process rights of taxpayers. For example, the Taxpayers' Bill of Rights grants to the taxpayer the right to receive a written description of the grounds for any allegation of underpayment of tax and detailing the method by which to obtain an administrative review. Ala.Code 1975, § 40-2A-4(a)(2). It also provides the taxpayer with the right to receive a preliminary assessment from the Department stating the specific amount of taxes the Department claims it is due. Ala.Code 1975, § 40-2A-7(b)(1). The Taxpayers' Bill of Rights further provides the taxpayer the right to a final assessment and the right to appeal from that assessment to either the administrative law division of the Department or to the circuit court. Ala.Code 1975, § 40-2A-7(b)(4) and (5).
The courts of this state have addressed the requirement that the Department assess the taxes it claims are due and give notice of that assessment to the taxpayer. In Gray v. State, 241 Ala. 313, 314, 2 So.2d 781, 781 (1941), our supreme court held that "[t]he assessment is an indispensable prerequisite to the validity of a tax against any individual, for without a valid assessment there can be no lawful attempt to collect the tax or enforce it against any specific property." In Smith v. Burton, 283 Ala. 391, 217 So.2d 540 (1969), the supreme court stated, "[w]e think it must be conceded that a taxpayer is denied due process if he is required to pay a tax on his property without assessment or notice or opportunity to be heard in protest against the assessment." 283 Ala. at 394, 217 So.2d at 542.
The United States District Court for the Southern District of Alabama stated in Clarke County Commission v. Pruet Production Co., 963 F.Supp. 1136 (S.D.Ala. 1997):
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