Town of Eagle v. Christensen
| Decision Date | 26 January 1995 |
| Docket Number | No. 94-0503,94-0503 |
| Parties | TOWN OF EAGLE, Donald Wilton, John Burton, and Joan Dempsey Family Trust, Plaintiffs-Appellants, v. Harold CHRISTENSEN, Fred Matthes, Eugene Miller, Glenn Niere, and Department of Revenue of the State of Wisconsin, Defendants-Respondents. d |
| Court | Wisconsin Court of Appeals |
For the defendant-respondent, Harold Christensen, the cause was submitted on the brief of Michael J. Cieslewicz of Kasdorf, Lewis & Swietlik, S.C. of Milwaukee.
For the defendants-respondents, Fred Matthes, Eugene Miller, Glenn Niere, and Dept. of Revenue of the State of Wis., the cause was submitted on the brief of James E. Doyle, Atty. Gen., and F. Thomas Creeron III, Asst. Atty. Gen.
Before GARTZKE, P.J., and DYKMAN and VERGERONT, JJ.
The Town of Eagle, Donald Wilton, John Burton and the Joan Dempsey Family Trust appeal from judgments dismissing their action Appellants also appeal from an order transferring venue from Waukesha County to Jefferson County. Because the remaining defendants are either a state agency or state employees, we conclude that venue is properly situated in Dane County. Accordingly, the order is reversed and we order venue transferred to Dane County.
for a declaratory judgment. Appellants asked the trial court to declare unconstitutional the property valuation and equalization processes used by Harold Christensen, the former assessor of the Town of Palmyra, Fred Matthes and Eugene Miller, Supervisors of Equalization of the Department of Revenue (DOR), Glenn Niere, Chief of the Equalization Section of DOR, and DOR. We conclude that the complaint states a claim upon which relief may be granted as to Matthes, Miller, Niere and DOR, but not as to Christensen, that the Town of Eagle has standing to sue, the exhaustion doctrine does not apply, and sovereign immunity does not bar this suit. Accordingly, the judgment as to Christensen is affirmed, but the judgment as to Matthes, Miller, Niere and DOR is reversed.
This case involves a claim for declaratory relief by the appellants to have the property assessment practices utilized by the defendants declared unconstitutional as violations of the uniformity clause of the Wisconsin Constitution. Specifically, their challenge concerns the inequitable tax burden they claim results when differing processes are used to value and equalize property in the Towns of Palmyra and Eagle. Appellants allege that the Towns of Palmyra and Eagle are in different property assessment districts and their respective property tax burdens are based upon the valuations and equalizations made by the local assessors and DOR officials. The towns share a common school district which is funded by property tax revenue based upon the equalized values of property. Appellants contend that because Christensen classifies untilled agricultural land as residential, while the Town of Eagle assessor does not, and the differing classifications are adopted by DOR when equalizing valuations, Town of Eagle agricultural landowners are paying a disproportionate share of property taxes.
The complaint focuses on three different stages of the assessment process. When agricultural land is sold in the Town of Eagle but lies idle, the Town of Eagle assessor does not reclassify that property as residential land. It remains classified as agricultural land. Consequently, that sale is used as a comparable sale to determine the full value of agricultural land in the Town of Eagle and results in an increase in the full value of the Town of Eagle's agricultural land. Conversely, in the Town of Palmyra, when agricultural land is sold but lies idle, Christensen reclassifies the property as residential land. Consequently, the value of agricultural land in the Town of Palmyra remains unchanged and the sale is used as a comparable sale in determining the full value of the Town of Palmyra's residential land. The supervisors of equalization of each property assessment district adopt, without scrutiny, the classifications made by the local assessors and equalize the valuations. 1
The complaint also alleges that because there are inadequate sales within a municipality with which the supervisors of equalization may establish equalized values, the supervisors use sales outside of their respective districts to determine land values. The complaint alleges that Supervisors Matthes and Miller use different criteria to determine which outside sales will be used to establish equalized values in the Towns of Eagle and Palmyra.
The complaint alleges that the Palmyra-Eagle School District apportions its tax levy based upon the equalized values of property as determined by the supervisors of equalization. Because Christensen classifies untilled agricultural land as residential land while the Town of Eagle's assessor classifies the same land as agricultural, and these classifications are incorporated into the equalizations made by DOR, Town of Palmyra agricultural land is undervalued at the expense of Town of Appellants filed suit in Waukesha County against Christensen, Matthes, Miller, Niere, and DOR to have the valuation and equalization practices declared unconstitutional. The trial court determined that Jefferson County was the proper venue, and after the case was transferred, it was dismissed. This appeal followed.
Eagle agricultural landowners. The underassessment of Town of Palmyra agricultural land shifts the tax burden to other property owners. Therefore, the valuations violate the uniformity clause found in article VIII, § 1 of the Wisconsin Constitution.
Appellants contend that their amended complaint states a valid claim against each defendant upon which relief may be granted. According to appellants, the complaint alleges that Christensen's classification methods create inequitable valuations that violate the uniformity clause of the Wisconsin Constitution. Appellants further contend that their complaint alleges that the equalization process utilized by DOR officials does not cure the underassessment but reinforces it by adopting, without scrutiny, the classifications made by the local assessors.
To determine whether the amended complaint states a valid claim upon which relief may be granted under § 802.06(2)(a)6, STATS.,
the facts pled are taken as admitted. No inference can be reached in respect to the ultimate facts alleged until resolved by judge or jury. The purpose of the motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint. Since pleadings are to be liberally construed, a claim will be dismissed only if "it is quite clear that under no conditions can the plaintiff recover."
Evans v. Cameron, 121 Wis.2d 421, 426, 360 N.W.2d 25, 28 (1985) (citations and quotations omitted). When reviewing a motion to dismiss for failure to state a claim upon which relief may be granted, this court accepts the alleged facts and all reasonable inferences as true but decides the legal conclusions independently. Morgan v. Pennsylvania Gen. Ins. Co., 87 Wis.2d 723, 731, 275 N.W.2d 660, 664 (1979).
Appellants argue that their complaint alleges that Christensen's classification methods, which differs from the Town of Eagle's, makes Town of Eagle agricultural land overvalued in relation to the Town of Palmyra's. A pattern of over or underassessment means that an unequal burden of property taxation exists in violation of the uniformity clause of the Wisconsin Constitution. State ex rel. Boostrom v. Board of Review, 42 Wis.2d 149, 160, 166 N.W.2d 184, 190 (1969). Article VIII, § 1 of the Wisconsin Constitution requires that the rules of taxation be uniform. This means that a taxation scheme must follow six principles:
1. For direct taxation of property, under the uniformity rule there can be but one constitutional class.
2. All within that class must be taxed on the basis of equality so far as practicable and all property taxed must bear its burden equally on an ad valorem basis.
3. All property not included in that class must be absolutely exempt from property taxation.
4. Privilege taxes are not direct taxes on property and are not subject to the uniformity rule.
5. While there can be no classification of property for different rules or rates of property taxation, the legislature can classify as between property that is to be taxed and that which is to be wholly exempt, and the test of such classification is reasonableness.
6. There can be variations in the mechanics of property assessment or tax imposition so long as the resulting taxation shall be borne with as nearly as practicable equality on an ad valorem basis with other taxable property.
Sigma Tau Gamma Fraternity House Corp. v. City of Menomonie, 93 Wis.2d 392, 410-11, 288 N.W.2d 85, 93 (1980) (quoting Gottlieb v. City of Milwaukee, 33 Wis.2d 408, 424, 147 N.W.2d 633, 641-42 (1967)). Tax schemes forcing taxpayers who own like property to pay disproportionate amounts of taxes will be struck down as unconstitutional violations of The amended complaint states three general causes of action. The first cause of action alleges that the Towns of Eagle and Palmyra share a common school district that receives revenue from property taxes based upon the equalized value of property as determined by Christensen, Matthes, Miller, Niere, and DOR. The complaint alleges that the Wisconsin statutes instruct assessors to divide property into classifications (i.e., residential, agricultural, etc.) and to determine the full value of each parcel of land. The complaint refers to § 70.32, STATS., which instructs assessors how to value real property. Section 70.32(1) provides in part,
the uniformity clause....
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