MATLOCK v. STATE ex. rel. OKLAHOMA TAX COMMISSION

MATLOCK v. STATE ex. rel. OKLAHOMA TAX COMMISSION
2001 OK CIV APP 104
29 P.3d 614
72 OBJ 2451
Case Number: 95363
Decided: 05/03/2001
Mandate Issued: 07/26/2001
DIVISION I
THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION I

DARELL R. MATLOCK, JR. and CATHY L. MATLOCK, Appellants
v.
STATE OF OKLAHOMA, ex rel., OKLAHOMA TAX COMMISSION, Appellee

APPEAL FROM THE OKLAHOMA TAX COMMISSION

SUSTAINED

Darell R. Matlock, Jr., Tulsa, Oklahoma, for Appellants
Douglas B. Allen, Lyn Martin-Diehl, Oklahoma City, Oklahoma, for Appellee

OPINION

JONES, Judge

¶1 Appellants, Darell R. Matlock, Jr. and Cathy L. Matlock (Matlocks), are appealing an order by the Appellee, Oklahoma Tax Commission (OTC), wherein it was determined the Matlocks' request that the refund of overpaid 1993 income taxes be applied as a credit to their 1994, 1995, and 1996 returns was barred by

¶2 The issues on appeal are: 1) whether the Matlocks' 1993 claim and carry-over refund request was untimely; 2) whether the OTC's Rule 710:50-9-2 is an arbitrary overreaching of authority resulting in an infringement of legislative authority; and 3) whether the doctrine of constructive trust is applicable to this matter. When OTC, an administrative agency, acts in its adjudicative capacity, an order issued by it will be affirmed on appeal if the record contains substantial evidence supporting the facts upon which the order is based and the order is free of legal error. Dugger v. State of Oklahoma ex rel. Oklahoma Tax Com'n,

¶3 The Matlocks contend their time to file their income taxes was extended, and the three-year limitation began to run from the extended date. We do not agree. The Oklahoma Supreme Court has analyzed

¶4 The Matlocks contend Rule 710:50-9-2 issued by the OTC is beyond the [29 P.3d 616] scope of OTC's authority. The Rule provides:

"When an original return has not been filed, the Commission will not issue a refund on an original Individual Income Tax Return filed 3 years after the original due date of the return. A refund that is 'barred by statute' cannot be used as payment on any delinquent account or applied to estimated tax. Exceptions to the statute of limitations set out in 710:50-5-13 also apply to certain refund situations. [See:

The rules adopted by an administrative agency under legislative authority are presumed valid and reasonable. The burden to establish otherwise is upon the protestant. Public Service v. State ex rel. Corporation Com'n,

¶5 The Matlocks assert an implied trust should have been imposed on the OTC because the OTC had in the past applied their refund to future taxes. An implied trust or constructive trust arises by operation of law. It is imposed against an individual when the individual obtains legal right to property through fraudulent, abusive means or through a method which violates equity and good conscience. Matter of Estate of Ingram,

¶6 SUSTAINED.

¶7 ADAMS, P.J., and JOPLIN, J., concur.

FOOTNOTES

1Although §2375 was amended in 1998, the pertinent language remains substantially the same as the language in 1997 which is applicable to this litigation.