Luz v. SBOE/Staples

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ) ) ) Petitioner-Appellant, ) ) v. ) ) ARIZONA STATE BOARD OF ) EQUALIZATION, ) ) Respondent-Appellee, ) BILL STAPLES, in his official capacity ) ) as Assessor, Pima County, ) Real Party in Interest-Appellee. ) ) ) ) LUZ SOCIAL SERVICES, INC., DIVISION ONE FILED: 04/14/09 PHILIP G. URRY,CLERK BY: DN No. 1 CA-TX 08-0004 DEPARTMENT T MEMORANDUM DECISION (Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Arizona Tax Court Cause No. TX 2007-000261 The Honorable Thomas Dunevant III, Judge AFFIRMED DeConcini McDonald Yetwin & Lacy PC By Denise M. Bainton Nathan B. Hannah John C.E. Barrett Attorneys for Petitioner-Appellant Tucson Terry Goddard, Arizona Attorney General By Rex C. Nowlan, Assistant Attorney General Christina M. Lopez, Assistant Attorney General Attorneys for Respondent-Appellee Phoenix Barbara LaWall, Pima County Attorney By Terri A. Roberts, Deputy County Attorney Attorneys for Real Party in Interest-Appellee Tucson D O W N I E, Judge ¶1 Luz Social Services, Inc. ( Taxpayer ) appeals from the tax court s dismissal of its special action petition and the denial of its petition for an order to show cause. For the following reasons, we affirm. FACTS AND PROCEDURAL BACKGROUND ¶2 Taxpayer is a not-for-profit corporation that operates charter schools in Tucson. The schools are located on real property (the Property ) that is at issue in this appeal. ¶3 On July 21, 2004, Taxpayer filed a notice of claim against Pima County (the County ), alleging entitlement to a property tax exemption under Arizona Revised Statutes ( A.R.S. ) (2006).1 Assessor Bill Staples denied the claimed exemption for tax year 2001. The sections 42-11104 and -11121 County taxes became delinquent.2 ¶4 Taxpayer timely appealed to the State Board of Equalization (the Board ) under the error correction statute, A.R.S. § 42-16254(F) (2006). When the Board refused jurisdiction, Taxpayer brought a successful special action. 1 The We cite the 2006 version of the statute, which duplicated the 1999 language. 2 Investors have purchased the tax liens. 2 court held that the error correction statute provides an avenue for appeal following denial of exempt status and directed the Board to docket and consider Taxpayer s appeal. See Lyons v. State Bd. of Equalization, 209 Ariz. 497, 501, ¶ 17, 104 P.3d 867, 871 (App. 2005). The Board accordingly held a hearing in August 2006. ¶5 argued During the hearing, counsel for the County Assessor that Taxpayer was required to pay taxes due on the Property prior to delinquency under A.R.S. § 42-16210 in order to pursue an appeal to the Board. not paid the taxes. Taxpayer conceded that it had The Board issued a decision on October 16, 2006 holding that it lacked jurisdiction. Taxpayer did not appeal from that decision. ¶6 On April 26, 2007, Taxpayer filed a special action complaint and a petition for order to show cause in the superior court. Taxpayer contended that the Board based its decision on an inapplicable statute and failed to decide the appeal on its merits, as it was required to do. pertinent part that: (1) a special The Assessor responded in action was inappropriate because Taxpayer had a remedy by way of appeal; (2) the Board s decision became final and binding after sixty days; (3) payment of taxes was a prerequisite to the superior court s assumption of jurisdiction; and (4) Taxpayer failed to join a necessary party the--County. 3 ¶7 The tax court held a show cause hearing on October 3, 2007. It subsequently denied Taxpayer s petition for order to show cause and dismissed the special action complaint without reaching the merits of the dispute. The tax court signed an order reflecting the dismissal of the special action and the denial of the petition for order to show cause. This appeal followed.3 DISCUSSION I. The Tax Court Did Not Abuse Its Discretion In Declining To Accept Special Action Jurisdiction. A. ¶8 The Tax Court s Ruling Is Not Ambiguous. When a party appeals from a special action initiated in superior court, the appellate court conducts a bifurcated review. Bilagody v. Thorneycroft, 125 Ariz. 88, 92, 607 P.2d 965, 969 (App. 1979). We must determine whether the superior court exercised its discretion to assume jurisdiction over the claim s merits. Id. If so, we may consider the claim s merits. Id. If not, the sole issue for review is whether the superior court abused its discretion in declining to accept jurisdiction. Id. 3 A different panel of this court previously ruled on portions of appellee Staples Motion to Strike Exhibits to Appellant s Brief and References to Exhibits in Brief. That panel deferred ruling on the remainder of the motion until the court considers this appeal on the merits. We now grant the unadjudicated portions of the motion to strike. 4 ¶9 Taxpayer ambiguous contends because it petition/complaint. that both the tax denied We disagree. court s and action dismissed is the Although the minute entry states that the court is denying/dismissing the special action petition and the petition for order to show cause, the tax court s signed order states that it dismissed the special action complaint and denied the petition for order to show cause. We consider the signed order controlling. ¶10 Taxpayer also alleges ambiguity because the tax court s ruling includes some discussion of the legal merits. Once again, we disagree. the Board s decision was The substantive questions were whether incorrect as a matter of law and whether the Board refused to perform a duty as to which it had no discretion. The tax court did not resolve these issues and instead based its decision on the availability of an appeal from the Board s final decision and Taxpayer s failure to pursue an appeal. The discussion at issue was necessary whether Taxpayer had a remedy by way of appeal. to resolve It did not render the court s specifically worded order ambiguous. B. ¶11 Special Action Relief Was Inappropriate Taxpayer Forfeited its Appeal Rights. Because Taxpayer court s alternatively challenges the refusal to accept special action jurisdiction. tax We review the decision to accept or decline special action jurisdiction for an 5 abuse of discretion. Pima County Assessor v. Ariz. State Bd. of Equalization, 195 Ariz. 329, 332, ¶ 8, 987 P.2d 815, 818 (App. 1999); Bilagody, 125 Ariz. at 92, 607 P.2d at 969. ¶12 The tax court concluded that Taxpayer had an appellate remedy, which it forfeited by failing to appeal within sixty days of the Board s ruling. We agree. As a party dissatisfied with the Board s decision, Taxpayer had a right to appeal to the tax court under A.R.S. § 42-16254 (2006). According to § 42- 16254(G), [a] party that is dissatisfied with the decision of the county board or state board may appeal the decision to court within sixty days after the date the board s decision is mailed . . . . Likewise, [a]n appeal to court shall be taken within sixty days after the date of the state board s final decision. A.R.S. § 42-16203(C) (2006). If an appeal is not taken within the time prescribed in § 42-16203, [a]ny decision of the state board of equalization pertaining to the classification of property is final . . . . valuation or A.R.S. § 42-16169 (2006). ¶13 In exemption Lyons, request we held qualifies that as an an improper incorrect denial of an designation or description of the use of property or its classification under the error correction statutes. at 873. statutes Taxpayer s was a 209 Ariz. at 503, ¶ 24, 104 P.3d exemption challenge to argument pursuant classification, 6 see to id., those and accordingly, the Board s decision became final sixty days after mailing on October 16, 2006. never appealed that See A.R.S. § 42-16169. decision. Instead, it filed Taxpayer a special action complaint on April 26, 2007 -over four months after its appeal rights lapsed. It consequently abandoned its appellate remedy. ¶14 Arizona has a strong . . . policy extraordinary writs as substitutes for appeals. against using State ex rel. Neely v. Rodriguez, 165 Ariz. 74, 76, 796 P.2d 876, 878 (1990); see Thielking v. Kirschner, 176 Ariz. 154, 156, 859 P.2d 777, 779 (App. 1993) (party attempting to correct errors in appealable administrative decision cannot substitute declaratory relief action for timely appeal or avoid requirements of timely appeal by seeking relief via special action). Because Taxpayer did not file a timely appeal, the Board s decision became final, and the doctrine of res special action proceeding. judicata bars its litigation in a See Hurst v. Bisbee Unified Sch. Dist. No. 2, 125 Ariz. 72, 75-76, 607 P.2d 391, 394-95 (App. 1979) (mandamus does not lie to correct errors in appealable judgment and cannot be used as substitute for ordinary channels of appeal; failure to timely appeal renders underlying decision res judicata). None of Taxpayer s cited cases involves a litigant who failed to file a timely appeal and subsequently sought relief by way of special action. 7 See, e.g., Bechtel v. Rose, 150 Ariz. 68, 722 P.2d 236 (1986) (special action review of denial of motion to intervene); Ariz. Dep t of Pub. Safety v. Super. Ct., 190 Ariz. 490, 493, 949 P.2d 983, 986 (App. 1997) (accepting special action jurisdiction to review trial court s grant of preliminary injunction); Vo v. Super. Ct., 172 Ariz. 195, 198, 836 P.2d 408, 411 (App. 1992) (special action brought pursuant to interlocutory ruling denying motion to dismiss a criminal charge). II. The Failure to Jurisdiction. ¶15 The jurisdiction tax because Pay court Taxes Deprived also determined Taxpayer failed to the Tax that pay required to preserve the right to appeal. its Court it of lacked taxes as The timely payment policy is rooted in Arizona s Constitution, which ensures that all property in the state not exempt from tax under the federal or state constitutions bear[s] its just burden of [] taxes. Brophy v. Powell, 58 Ariz. 543, 554, 121 P.2d 647, 652 (1942). Further, [t]he purpose of a statutory requirement that taxes be paid before delinquency is to ensure the continued fiscal soundness of the government; such requirements are mandatory. Bull HN Info. Sys. v. State Dep t of Revenue, 185 Ariz. 393, 397, 916 P.2d 1109, 1113 (App. 1995) (construing former A.R.S. § 42-204). Taxpayers are therefore required to pay taxes before 8 they become delinquent. A.R.S. §§ 42-16210(A) (2006), -18051(D) (2006), -18052 (2006). ¶16 Timely tax payment is also required to preserve court jurisdiction. According to A.R.S. § 42-16254(G): A party that is dissatisfied with the decision of the county board or state board may appeal the decision to court within sixty days after the date the board s decision is mailed, but any additional taxes that are determined to be due must be timely paid before delinquency for the court to retain jurisdiction of the matter. ¶17 In this case, Taxpayer filed a special action, not an appeal. Although the statute expressly addresses appeals, not special actions, we do not believe Taxpayer can evade the payment requirement by filing a special action petition after the appellate deadline has passed. ¶18 The primary goal of statutory interpretation is to discern and give effect to legislative intent. People s Choice TV Corp. v. City of Tucson, 202 Ariz. 401, 403, ¶ 7, 46 P.2d 412, 414 (2002). take account of We consider the tax statute as a whole, and its context, language, subject matter, historical background, effects and consequences, and its spirit and purpose. State ex rel. Ariz. Dep t of Revenue v. Phoenix Lodge No. 708, Loyal Order of Moose, Inc., 187 Ariz. 242, 247, 928 P.2d 666, 671 (App. 1996) (citations omitted). 9 ¶19 The Arizona Legislature has provided an appellate remedy and has stated that payment of taxes is a jurisdictional prerequisite. payment of If a taxes taxpayer by could failing to achieve appeal and review then and avoid bringing a special action, the condition imposed in A.R.S. § 42-16254(G) would be meaningless. We decline to adopt such a construction. See State v. City Ct., 138 Ariz. 244, 246, 673 P.2d 988, 990 (App. 1983) (presuming that the legislature did not intend a futile act when it included a particular requirement in a statute), abrogated on other grounds by Lind v. Super. Ct., 191 Ariz. 233, 954 P.2d 1058 (App. 1998). ¶20 Moreover, property taxes. another statute requires payment of real A person may not test the validity or amount of tax if any of the taxes [t]hat are the subject of the action are not paid before becoming delinquent. 11004(2) (2006). A.R.S § 42- This provision, which appears in the Chapter 11 General Provisions Section, does not distinguish between appeals and special actions. It provides additional support for concluding that the payment requirement applies to a special action. ¶21 See id. § 11004(3). Furthermore, Taxpayer s approach is at odds with the exemption statutes. procedure approved. is to As the Board points out, the statutory refund pre-paid taxes if the exemption is Because Taxpayer did not timely pay, there could be 10 no refund. In effect, obligation be enjoined. Taxpayer is requesting that its tax We find no statutory basis for such a request.4 III. The Tax Court Properly Denied Taxpayer s Petition for Order to Show Cause. ¶22 Taxpayer also challenges the denial of its petition for order to show cause. The petition asked the tax court to require the Board to show cause (1) why the Board should not be ordered to docket and consider Taxpayer s appeal, and (2) why Taxpayer should not recover its attorneys fees and costs in prosecuting its petition for order to show cause. ¶23 The Board held a hearing on Taxpayer s petition and rejected its arguments for the same reasons underpinning the tax court s special action decision: a lack of jurisdiction under A.R.S. § 42-16210 due to Taxpayer s failure to pay its taxes. Even if the Board had incorrectly interpreted its jurisdiction under § 42-16210(B), the tax court plainly had no jurisdiction 4 Further, there is no non-discretionary act remaining for the Board to perform. Under A.R.S. § 42-16254(F), [o]n receiving the petition, the appropriate board shall hold a hearing on the proposed correction within thirty days and shall issue a written decision pursuant to the board s rules. Notwithstanding Taxpayer s arguments, the Board complied with these statutory requirements by deciding in writing that the nonpayment of taxes precluded it from taking jurisdiction. The Board thus performed its nondiscretionary duties. 11 to act because timely payment is a prerequisite under A.R.S. §§ 42-16210 and 16254(G) for the exercise of jurisdiction. CONCLUSION ¶24 We affirm the tax court s rulings. Our holding obviates the need to consider the failure to join Pima County, collateral estoppel, and other alternative arguments. We deny Taxpayer s request for attorneys fees on appeal pursuant to A.R.S. § 12-348(B)(1) (2003). MARGARET H. DOWNIE, Judge CONCURRING: JON W. THOMPSON, Presiding Judge DONN KESSLER, Judge 12

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