Town of Bridgewater v. DEPT. OF TAXES

• Decision Date: 08 November 2001
• Docket Number: No. 01-031.,01-031.
• Citation: 787 A.2d 1234
• Parties: TOWN OF BRIDGEWATER, et al. v. DEPARTMENT OF TAXES.
• Court: Vermont Supreme Court

787 A.2d 1234

TOWN OF BRIDGEWATER, et al. v. DEPARTMENT OF TAXES.

No. 01-031.

Supreme Court of Vermont.

November 8, 2001.

Present AMESTOY, C.J., DOOLEY, MORSE, JOHNSON, and SKOGLUND, JJ.

ENTRY ORDER

Plaintiffs are several towns and five individual taxpayers who challenged the assessment methods used by the director of the Division of Property Valuation and Review to calculate the equalized education property tax grand list required by the Equal Educational Opportunity Act of 1997 (Act 60). The State brought a motion to dismiss pursuant to V.R.C.P. 12(b)(1) on the ground that the court lacked subject matter jurisdiction. The Rutland Superior Court granted the motion on the grounds that plaintiffs failed to exhaust administrative remedies provided under 32 V.S.A. § 5408. We affirm.

Act 60 funds the state's education expenses through a general state support grant and local property tax. Each municipality must contribute an amount based on the equalized education property tax grand list. That amount, as well as the coefficient of dispersion, is determined by the director of the Division of Property Valuation and Review in the Department of Taxes. These calculations are based on the aggregate fair market value of all real property in each municipality. Plaintiffs brought suit in Rutland Superior Court claiming that the methods used by the director to determine the equalized education property tax grand lists in the municipalities do not comply with accepted industry standards of appraisal. Based on this argument, the suit alleges numerous state and federal constitutional violations as well as statutory violations.

The State brought a motion to dismiss on the ground that the superior court did not have subject matter jurisdiction. The State claimed that plaintiffs lacked standing, that their claims were moot and that plaintiffs failed to exhaust administrative remedies. The court granted the State's motion, finding that 32 V.S.A. § 5408 provides an administrative process by which municipalities can contest their equalized education grand list value as determined by the director. Because the court determined that the administrative process was an adequate forum for plaintiffs' claims, the court required that plaintiffs exhaust administrative remedies before seeking review in the superior court. This appeal followed.

Plaintiffs raise two challenges to the court's ruling. Primarily they argue that exhaustion is not required because the administrative remedy is not exclusive. If exhaustion is not the exclusive remedy, then, according to plaintiffs, exhaustion can be required only through the exercise of judicial discretion. Plaintiffs' second argument is that judicial discretion does not justify the court's decision not to entertain the action for several reasons. First, they claim that the administrative process does not provide a remedy for the municipality plaintiffs. Similarly, they argue that there is no administrative relief that will satisfy the claims of the individual taxpayer plaintiffs. Plaintiffs also contend that the administrative process is inappropriate where constitutional challenges are raised. Finally, plaintiffs assert that requiring exhaustion of administrative remedies is inconsistent with goals of judicial economy.

We review a trial court's dismissal for lack of subject matter jurisdiction "de novo, with all uncontroverted factual allegations of the complaint accepted as true and construed in the light most favorable to the nonmoving party." Jordan v. State, 166 Vt. 509, 511, 702 A.2d 58, 60 (1997); V.R.C.P. 12(b)(1). The relevant statute in this case sets forth a detailed process by which a municipality may appeal its grand list value:

(a) Not later than 30 days after the receipt by its clerk of a notice under section 5406 of this title, a municipality may petition the director of the division of property valuation and review for a redetermination of the municipality's equalized education property value and coefficient of dispersion. Such petition shall be in writing and shall be signed by the chair of the legislative body of the municipality or its designee.

32 V.S.A. § 5408(a). The statute goes on to specify that "the director shall, after written notice, grant a hearing upon the petition to the aggrieved town." Id. § 5408(b). Should a municipality disagree with the director's redetermination of the equalized education property value, "[a] municipality . . . may appeal the redetermination to the valuation appeal board. . . . The appeal shall be heard de novo . . . ." Id. § 5408(c). Only after this appeal does the statute authorize that "[a] municipality or the division of property valuation and review may appeal ... to the superior court." Id. § 5408(d).

Plaintiffs' first argument is that § 5408 does not present an exclusive remedy to aggrieved municipalities, and that they may pursue the appeal directly in superior court. Plaintiffs rely principally on Stone v. Errecart, 165 Vt. 1, 675 A.2d 1322 (1996), which held that 32 V.S.A. § 5887 outlines the exclusive procedure to pursue a refund for certain taxes. In Stone, the statute requiring exhaustion specified that it was the "exclusive" remedy for taxpayers seeking that refund. 165 Vt. at 3, 675 A.2d at 1324; 32 V.S.A. § 5887. Plaintiffs argue that because § 5408 does not contain such specific language, their remedy is not limited to the one outlined in the statute.

Our paramount goal in statutory construction is to give effect to the Legislature's intent, Burlington Elec. Dep't v. Vermont Dep't of Taxes, 154 Vt. 332, 335, 576 A.2d 450, 452 (1990), and we apply the plain meaning of a statute where the language is clear and unambiguous. Reed v. Glynn, 168 Vt. 504, 506, 724 A.2d 464, 465 (1998). Where a statute creates administrative remedies, "a party must pursue, or `exhaust,' all such remedies before turning to the courts for relief." Rennie v. State, 171 Vt. 584, 585, 762 A.2d 1272, 1274 (2000). In Stone, we stated that "[w]here the Legislature specifically mandates, exhaustion is required." 165 Vt. at 4,675 A.2d at 1325. The question presented in this case, therefore, is whether § 5408 specifically mandates exhaustion. While it is true that § 5408 does not state explicitly that it is the "exclusive" remedy, it is difficult to conceive that the Legislature intended this section to be one of several methods of appeal. The remedy outlined in § 5408 is narrow, circumscribed and highly specific. Plaintiffs' formalistic argument is unpersuasive because we have required exhaustion in cases where the statute does not contain the word "exclusive." See In re D.A. Assocs., 150 Vt. 18, 20, 547 A.2d 1325, 1326 (1988) ("when an administrative remedy is established by statute or regulation, relief must not only be sought in accordance therewith, but must first be exhausted before recourse to the courts is available"); Choquette v. Perrault, 144 Vt. 218, 224, 475 A.2d 1078, 1082 (1984) ("The doctrine of exhaustion of administrative remedies requires that if an administrative remedy is provided by statute, relief must be sought by exhausting this remedy before the court will act.").

Plaintiffs offer no...