Yazel v. William K. Warren Med. Research Ctr., Inc., s. 111502

• Decision Date: 24 June 2014
• Docket Number: 111643.,Nos. 111502,s. 111502
• Citation: 364 P.3d 1281
• Parties: Ken YAZEL, Tulsa County Assessor, Petitioner/Appellant, v. The WILLIAM K. WARREN MEDICAL RESEARCH CENTER, INC., an Oklahoma not-for-profit corporation; and Montereau, Inc., an Oklahoma not-for-profit corporation; Respondent/Appellees.
• Court: Oklahoma Supreme Court

364 P.3d 1281

Ken YAZEL, Tulsa County Assessor, Petitioner/Appellant,

v.The WILLIAM K. WARREN MEDICAL RESEARCH CENTER, INC., an Oklahoma not-for-profit corporation; and Montereau, Inc., an Oklahoma not-for-profit corporation; Respondent/Appellees.

Nos. 111502

111643.

Supreme Court of Oklahoma.

June 24, 2014.

Leisa S. Weintraub, Tulsa, Oklahoma, for Plaintiff/Appellant.

Joel L. Wohlgemuth, David R. Ross, Tulsa, Oklahoma, for Defendants/Appellees.

KAUGER, J.:

¶ 1 This cause (Yazel 1) and its companion case No. 111,643 Ken Yazel, Tulsa County Assessor v. The William K. Warren Medical Research Center, Inc., et al. (Yazel 2), involve the dispositive issue of whether 68 O.S.2011 § 2880.1(D)¹ requires a county assessor to be represented by a district attorney or by the Oklahoma Tax Commission before an appeal from the Board of Equalization may proceed to the Courts. We hold that it does not.

FACTS

¶ 2 The defendants/respondents, The William K. Warren Medical Research Center, Inc. (Warren), and Montereau, Inc. (Montereau), (collectively taxpayers) not-for-profit corporations, owned real property located in Tulsa County, Oklahoma. For the tax year 2012, Ken Yazel, the Tulsa County Assessor (assessor) levied ad valorem taxes on portions of the real property owned by Warren and Montereau. Warren's property was valued for ad valorem tax purposes at $178,990,012.00 and Montereau's was valued at $1,648,042.00.

¶ 3 On March 2, 2012, Warren filed a written informal protest with the assessor, arguing that the property should be exempt from taxation pursuant to 68 O.S.2011 2887(8)(b)(1) because it was a "continuum of care retirement community."² On May 14, 2012, the assessor modified Warren's assessment to $107,394,007.00 based on the ratio of licensed nursing facility, assisted living and Alzheimer beds to the total number of beds in the overall facility.³ On May 27, 2012, Montereau also filed a written informal protest and its assessment was adjusted to $988,825.00 for the same reasons.

¶ 4 The taxpayers filed a formal appeal on June 8, 2012, with the Tulsa County Board of Equalization (Board). The Board held a hearing on June 20, 2012, and at the conclusion of the hearing, the Board issued a notice of adjustment and cancelled the assessment because it determined that the properties were not taxable. The assessor, represented by its general counsel, appealed the Board's decision on July 9, 2012, to the District Court of Tulsa County.⁴

¶ 5 There, the assessor argued that the Board's cancellation of the tax assessments was not supported by the facts or by the statutes because they pertain to "continuum of care retirement community facilities." The taxpayers answered, contending that the Assessor's actions were arbitrary and unlawful in finding a partial exemption rather than a 100% exemption, and that the properties had been exempt for more than a decade. They also alleged that pursuant to 68 O.S.2011 § 2880.1(D), the appeal could not be brought to the district court unless it was brought by the Tulsa County District Attorney.⁵

¶ 6 On September 7, 2012, Warren and Monereau filed a motion for summary judgment, arguing that: 1) their use of the property met the requirements for exemption; 2) the assessor's interpretation was contrary to the plain and ordinary meaning of a "Continuation of Care Retirement Community;" and 3) the assessor abruptly reversed 12 years of continuous exemption status. In a footnote of the summary judgment motion, the taxpayers also noted that the appeal to District Court was filed without the participation of the Tulsa County District Attorney, an independent legal flaw that required summary judgment be rendered.

¶ 7 On January 7, 2013, the trial court granted the taxpayers' motion for summary judgment, and the order was filed on January 28, 2013.⁶ On February 22, 2013, the assessor appealed raising six issues relating to the exemption status of the taxpayers.⁷

The taxpayers filed a response reasserting their arguments made in their summary judgment motion. The cause was assigned to the Court of Civil Appeals on April 4, 2013.

¶ 8 Also on April 4, 2013, the assessor appealed case No. 111,643, Yazel 2, from the Tulsa County District Court.⁸ It was filed on July 9, 2012, and it involved the same parties with the addition of similar taxpayer parties. In Yazel 2, the assessor challenged the constitutionality of 68 O.S.2011 § 2887(8)(b)⁹ by declaratory judgment action as required by 68 O.S.2011 § 2880.1(A).¹⁰ The trial court certified the question of constitutionality to the Oklahoma Attorney General and expressly invited the Attorney General to intervene on behalf of the State of Oklahoma on September 12, 2012. The Attorney General neither responded nor participated in the proceedings.

¶ 9 However, the record does reflect that on July 17, 2012, counsel for the taxpayers sent a letter to the Tulsa County District Attorney, informing the district attorney of the lawsuits, advising him that the Assessor was represented by "inside counsel" and asking for the district attorney's position on this issue. The district attorney responded by letter dated the same day, stating:

... The Legislature recently amended 19 O.S. § 527 to authorize the county assessor to employ general counsel to advise or represent him in the performance of his official duties. Mr. Yazel advised our office on July 6, 2012, that he intended to exercise his rights under the aforementioned statute to have his general counsel, Leisa Weintraub, represent him in the above-referenced matter.

If you have any questions or comments, please contact me....¹¹

Section 527 has not been amended since. Neither the State Attorney General nor the district attorney represented the assessor, and the cause culminated in a final order on March 11, 2013 which granted summary judgment in favor of the respondents and against the assessor. Yazel 2 was made a companion case to this cause on April 8, 2013.

¶ 10 On June 17, 2013, the Court of Civil Appeals issued an order in both cases directing the assessor to show cause why the appeals should not be dismissed for violation of 68 O.S.2011 § 2880.1(D)¹² because the assessor was not represented by either the district attorney or the Oklahoma Tax Commission. Both the assessor and the respondents responded to the show cause order. The assessor argued that he was not required to be represented by the district attorney or the Oklahoma Tax Commission. The respondents argue that the cause must be dismissed because the district attorney or tax commission was not representing the assessor on appeal. On September 26, 2013, the Court of Civil Appeals issued an unpublished opinion in which it dismissed the appeal in this cause because neither the district attorney nor an attorney from the Oklahoma Tax Commission appeared on behalf of the assessor. It also issued an order in Appeal No. 111,643 dismissing that cause for the same reason.

¶ 11 On October 16, 2013, the assessor filed for certiorari in this Court, arguing that the Court of Civil Appeals had misconstrued the § 2880.1(D) and ignored the application of 19 O.S.2011 § 527¹³ which expressly allows a county assessor to hire counsel to represent the assessor in the official duties of office. On November 18, 2013, the County Assessors Association of Oklahoma and the County Officers and Deputies Association of Oklahoma filed an amicus curiae statement in support of certiorari. We granted leave to file the amicus curiae briefs and certiorari in both companion cases on March 24, 2014, to address the issue of first impression.

COUNTY ASSESSORS MAY EMPLOY COUNSEL TO REPRESENT THEM IN COURT PROCEEDINGS INCLUDING APPEALS FROM THE BOARD OF EQUALIZATION.

¶ 12 The taxpayers argue that the district attorney and/or counsel from the Oklahoma Tax Commission have a mandatory duty to represent the assessor. They also insist that use of the word "duty" in 19 O.S.2011 § 527 unambiguously and clearly means that only the district attorney or counsel from the Oklahoma Tax Commission may represent the assessor in a proceeding such as this in the district court.¹⁴

¶ 13 The assessor does not dispute that when requested, the district attorney or Oklahoma Tax Commission has a duty to represent an assessor. However, the assessor contends that the taxpayers' construction of § 527 is inconsistent with the entire statutory scheme regarding the ability of county officials to hire private counsel. The amicus curiae contend that following the taxpayers' construction of the statute would significantly impact the ability of assessors to effectively and efficiently provide revenue to counties across Oklahoma.

¶ 14 The Oklahoma Constitution grants counties the power of assessment and collection. It provides in art. 10, § 20:

The Legislature shall not impose taxes for the purpose of any county, city, town, or other municipal corporation, but may, by general laws, confer on the proper authorities thereof, respectively, the power to assess and collect such taxes.

Pursuant to 19 O.S.2011 § 1,¹⁵ counties are granted the right to sue and be sued and pursuant to 19 O.S.2011 §§ 215.4,¹⁶ 215.25¹⁷ and 215.37M,¹⁸ they have the right to obtain private counsel to represent them in any civil actions or proceedings which any county in the district is interested. County officials are also entitled to receive advice and opinions from district attorneys.¹⁹

¶ 15 The tax collecting authority of the county is critical to the operation of the State.²⁰ The necessity of county collections was discussed by the Court in Webster v. Morris, 1928 OK 84, 129 Okla. 145, 264 P. 190, a case involving the enforcement of tax collections and the county excise board's participation. The Court explained:

... Government is not supported by voluntary donations from its citizenship. County and state governments of Oklahoma, together with the municipalities thereof, are almost wholly dependent for their sustenance upon the enforcement of collecting taxes levied and assessed

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