Walmart Inc. v. County of Anoka
| Decision Date | 17 June 2020 |
| Docket Number | 02-CV-19-2201 |
| Parties | Walmart Inc., Petitioner, v. County of Anoka, Respondent. |
| Court | Tax Court of Minnesota |
This matter came before the Honorable Wendy S. Tien, Judge of the Minnesota Tax Court, on respondent's motion to dismiss and petitioner's motion to compel discovery.
Robert A. Hill, Robert Hill Law, Ltd., and Dan Biersdorf and Ryan R Simatic, Biersdorf & Associates, P.A., represent petitioner Walmart Inc.
Jason J. Stover and Christine V. Carney, Assistant County Attorneys, represent respondent Anoka County.
Respondent Anoka County moves to dismiss the petition filed by Walmart Inc. contesting the assessment of real property taxes as of January 2, 2018, and alleging discrimination against the subject property, on the ground that Walmart failed to timely disclose income and expense information as required by Minn Stat. § 278.05, subd. 6(a) (2018). Petitioner Walmart Inc. moved to compel discovery. We grant the County's motion and deny Walmart's motion.
Based upon all the files, records, and proceedings, the court now makes the following:
IT IS SO ORDERED. THIS IS A FINAL ORDER. LET JUDGMENT BE ENTERED ACCORDINGLY.
On April 26, 2019, Walmart Inc. ("Walmart") filed a petition in the Anoka County District Court with respect to Property Identification No. 34-32-24-13-0018 () for taxes payable in 2019.[1] The petition is captioned "Chapter 278 Petition," and alleges two counts.[2]
First, the petition alleges the assessed value of the subject property is greater than the property's real, actual, or market value.[3] Second, Walmart makes both statutory and constitutional unequal assessment claims.[4] Walmart alleges the County refused to accept "valid fee-simple sales of like properties," in violation of statutory rights arising under Minnesota Statutes section 273.12 (2018) and constitutional rights arising under the Equal Protection Clause of the United States Constitution and the Uniformity Clause of the Minnesota Constitution.[5] Walmart also seeks damages pursuant to 42 U.S.C. §§ 1983 and 1988 (2012).[6]
On February 4, 2020, two sets of motions were filed in this court. Walmart filed a motion to transfer all the Pay-2019 Cases pending with respect to its Anoka County properties to the district court, [7] alleging it specifically sought and is entitled to "judicial relief" concerning the market value of the subject properties, and further alleging entitlement to injunctive relief requiring the County to reassess the subject properties in accordance with market sales.[8]
The County moved to dismiss the petition, [9] alleging that Walmart failed to comply with the requirements of Minnesota Statutes section 278.05, subdivision 6 (2018) (the "mandatory disclosure rule"), relating to income-producing property.[10] The County further alleges that Walmart lacks standing to bring a chapter 278 (2018) petition, because Walmart has not established its interest in the subject property.[11]
Walmart disclosed a document titled "Financial Statement and Budget," describing the square footage of the subject property, and including columns for "2017 Actual," "2018 Actual," "2019 Budget," and "2019 YTD." [12] Each column includes a single line entry for income, and multiple entries under the category of expenses, which are summed up for a "Grand Total" amount.[13]
Walmart also disclosed a document titled "Rent Roll" setting forth the Walmart store number associated with the subject property, and columns for "Lease Start Date," "Lease End Date," "SF," "$/SF," "Monthly Gross," "Annual Gross," and "% Rent." [14] Walmart disclosed information relating to Subway in the Rent Roll document.[15] Walmart also disclosed a document titled "Master Lease Wal-Mart Stores, Inc.," an agreement executed on February 3, 2015, between Wal-Mart Real Estate Business Trust (the "Trust") as landlord, and Stores as tenant (the "Walmart Master Lease").[16] Walmart provided no other disclosures to the County.
Walmart contends its disclosures comply with the mandatory disclosure rule.[17] The County disputes these assertions based, in part, on information obtained in prior litigation regarding the subject property.[18]
A hearing on Walmart's motion to transfer, followed by a hearing on the County's motion to dismiss, was held on March 30, 2020.[19] Following the hearing, the parties each submitted supplemental affidavits relating to the ownership of the subject property.[20]
On February 7, 2020, Walmart served a notice of deposition on Alex Guggenberger, the Anoka County Assessor (regarding the Pay-2019 Cases).[21] Following service of the notice, the County wrote to Walmart's counsel on February 13, 2020, to state the deponent would not be produced.[22] The County objected to discovery considering Walmart's pending motion to transfer and the County's motion to dismiss.[23] Walmart moved to compel discovery on March 19, 2020.[24]The County opposed the motion.[25] A hearing on the motion to compel was held on April 15, 2020.[26]
In an order separately issued, this court denied Walmart's motion to transfer.[27] We now grant the County's motion to dismiss and deny Walmart's motion to compel as moot.
An objection to standing is jurisdictional as it relates to the existence of the cause of action. In re Custody of D.T.R., 796 N.W.2d 509, 512-13 (Minn. 2011); In re Welfare of Mullins, 298 N.W.2d 56, 61 & n.7 (Minn. 1980). A party has standing if it has suffered "some 'injury-in-fact' or … is the beneficiary of some legislative enactment granting standing." D.T.R., 796 N.W.2d at 512 (quoting Enright v. Lehmann, 735 N.W.2d 326, 329 (Minn. 2007)).
Minnesota Statutes section 278.01, subdivision 1(a), provides that "[a]ny person having personal property, or any estate, right, title, or interest in or lien upon any parcel of land" may file a petition with respect to the claims set forth in the statute. A lessee who is bound by the terms of a lease has a "vital interest" to protect and accordingly has standing pursuant to section 278.01. Int'l Harvester Co. v. State, 200 Minn. 242, 244-45, 274 N.W. 217, 218 (1937).
Minnesota Statutes section 278.05, subdivision 6, sometimes called the "mandatory disclosure rule," specifies that, in cases where the petitioner contests the valuation of income-producing property, certain information must be provided to the county assessor no later than August 1 of the taxes-payable year. Failure to submit the required documentation by the August 1 deadline results in automatic dismissal of the petition unless an exception applies. Id., subd. 6(b); Wal-Mart Real Estate Bus. Tr. v. Cty. of Anoka, 931 N.W.2d 382, 386 (Minn. 2019).
The mandatory disclosure rule requires the petitioner to timely provide all the following information:
Minn. Stat. § 278.05, subd. 6(a).
The text of Minnesota Statutes section 278.05, subdivision 6, does not define the term "income-producing property." Wal-Mart, 931 N.W.2d at 386. "The term 'income-producing property' simply means that the mandatory-disclosure obligation is triggered whenever the property itself generates income, and not just … when the property owner is the recipient of that income." Id. at 387. "[T]he traditional notion of 'income-producing' property is property that generates rental income for its owner on the basis of an arms-length, market-based lease, but the term is not necessarily limited to rental property." Id. at 386 (quoting Nw. Airlines, Inc. v. Cty. of Hennepin, 632 N.W.2d 216, 219 (Minn. 2001)).
"[T]he purpose of the [mandatory disclosure rule] is to provide information that would be useful to the determination of value." Kmart Corp. v. Cty. of Becker, 639 N.W.2d 856, 859 (Minn. 2002); see also 78th St OwnerCo, LLC v. Cty. of Hennepin, 813 N.W.2d 409, 413 (Minn. 2012). In other words, the mandatory disclosure rule ensures the "taxing authority receives all information a petitioner actually possesses relevant to application of the income approach to valuing real property." Sadat v. Cty. of Scott, No. 70-CV-12-8404, 2015 WL 410434, at *1 (Minn. T.C. Jan. 29, 2015) (citing Irongate Enters., Inc. v. Cty. of St. Louis, 736 N.W.2d 326, 330-31 (Minn. 2007)); see also Wal-Mart, 931 N.W.2d at 387 (). "[T]he importance of the income-producing nature of the property is in arriving at a reliable market value for tax purposes." Nw. Airlines, 632 N.W.2d at 220. Accordingly, a petitioner may not decline to provide information required by the mandatory disclosure rule on the subjective grounds it believes such information to be irrelevant or incomplete. 78th St. OwnerCo, 813...
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