Gust v. N.C. Dep't of Revenue

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. NO. COA13-673 NORTH CAROLINA COURT OF APPEALS Filed: 7 January 2014 THOMAS E. GUST, Plaintiff, Cleveland County No. 12 CVS 1393 v. THE NORTH CAROLINA DEPARTMENT OF REVENUE, Defendant. Appeal by plaintiff from the order entered 18 December 2012 by Judge Robert T. Sumner in Cleveland County Superior Court. Heard in the Court of Appeals 6 November 2013. Attorney General Roy Cooper, by Assistant Attorney General Perry J. Pelaez, for The North Carolina Department of Revenue. Thomas E. Gust, pro se. ELMORE, Judge. Plaintiff appeals from the 18 December 2012 judgment and order dismissing his complaint and petition for declaratory judgment rendered during the 10 December 2012 Civil Session of -2Cleveland County Superior Court. After careful consideration, we dismiss plaintiff s appeal. I. Background The dispute before us initiated when the North Carolina Department of Revenue (the Department) issued a tax assessment against Thomas E. Gust (plaintiff) for his failure to pay individual income taxes for the 2003, 2004, 2005, and 2006 tax years. To contested Hearings contest case (OAH) determination, judgment the petition on 8 assessment, with November plaintiff against tax the the Department Court on 25 July 2012. Office 2011. filed an in plaintiff of Before action a Administrative OAH for Cleveland filed issued its declaratory County Superior The purported purpose of the action for declaratory judgment was to compel the Department to answer the following requires question: a person Which to file North an Carolina income tax General return Statute with the Department for the same year(s) he is not required to file an income tax return with the Internal Revenue Service? court dismissed the declaratory action on 18 The trial December 2012 pursuant to Rule 12(b)(1), Rule 12(b)(2), and Rule 12(b)(6) and on the basis that the action was barred by the doctrine of -3sovereign immunity. It is from the entry of this order that plaintiff appeals. In an attempt to resolve plaintiff s OAH case, the Department served him with its first set of interrogatories and request for production of documents on 22 March 2012. When plaintiff failed to respond, the Department filed a motion to compel discovery. Plaintiff again refused to provide the requested discovery. As such, the Department filed a motion to dismiss the contested case as a sanction against plaintiff. 15 August 2012, OAH granted the Department s On motion and dismissed plaintiff s action with prejudice as a sanction for his noncompliance with the order compelling his response to discovery. Plaintiff appealed OAH s dismissal to Wake County Superior Court pursuant to N.C. Gen. Stat. § 105-241.16. Judge Donald prejudice for W. Stephens want of dismissed subject On 23 May 2013, plaintiff s matter action jurisdiction. with Judge Stephens found that plaintiff had not paid the tax, penalties, and interest due as required by N.C. Gen. Stat. § 105-241.16. II. Declaratory Judgment Plaintiff argues that the trial court erred in dismissing his action for declaratory judgment based on the Department s -4sovereign immunity defense. We are unable to reach the merits of this issue and therefore dismiss it. Plaintiff avers that under the Uniform Declaratory Judgment Act, N.C. Gen. jurisdiction Stat. to § 2-153 hear his et declaratory contention is unsupported by law. that the declaratory jurisdictional and they seq., not trial judgment court action. had This Our Supreme Court has held judgment do the statutes create or themselves grant are not jurisdiction where it does not otherwise exist, nor do they enlarge or extend the jurisdiction of the courts over the subject matter or the parties. State ex rel. Edmisten v. Tucker, 312 N.C. 326, 348, 323 S.E.2d 294, 308 (1984) (citation omitted). In the instant case, the trial court lacked jurisdiction to hear plaintiff s declaratory judgment action for the reasons set fourth below. A taxpayer may challenge his tax liability pursuant to the procedures laid out in Chapter 105 of our general statutes. Under § N.C. Gen. Stat. 105-241.15 (2011), a taxpayer who disagrees with a notice of final determination issued by the Department may file a contested case accordance with Article 3 of Chapter 150B. hearing with OAH in A taxpayer aggrieved by OAH s determination may seek judicial review of the decision pursuant to N.C. Gen. Stat. § 105-241.16 (2011): -5A taxpayer aggrieved by the final decision in a contested case commenced at the Office of Administrative Hearings may seek judicial review of the decision in accordance with Article 4 of Chapter 150B of the General Statutes. Notwithstanding G.S. 150B-45, a petition for judicial review must be filed in the Superior Court of Wake County and in accordance with the procedures for a mandatory business case set forth in G.S. 7A-45.4(b) through (f). Before filing a petition for judicial review, a taxpayer must pay the amount of tax, penalties, and interest the final decision states is due. A taxpayer may appeal a decision of the Business Court to the appellate division in accordance with G.S. 150B-52. Notably, N.C. Gen. Stat. § 105-241.19 provides: The remedies in G.S. 105-241.11 through G.S. 105-241.18 set out the exclusive remedies for disputing the denial of a requested refund, a taxpayer s liability for a tax, or the constitutionality of a tax statute. Any other action is barred. Neither an action for declaratory judgment, an action for an injunction to prevent the collection of a tax, nor any other action is allowed. N.C. Gen. Stat. § 105-241.19 (2011) (emphasis added). Here, plaintiff has appealed the trial court s dismissal of his action language of unambiguous. declaratory for declaratory N.C. Gen. judgment. Stat. § However, 105-241.19 is the clear plain and It specifically prohibits a taxpayer from filing a judgment action to contest his tax liability. -6Instead, it Department s provides tax that assessment a only taxpayer by may exhausting challenge the the statutory remedies set forth in N.C. Gen. Stat. §§ 105-241.11 through 105241.18. Accordingly, plaintiff was statutorily filing the action for declaratory judgment, and to rule on the merits of his appeal. plaintiff s appeal is dismissed. Dismissed. Judges MCCULLOUGH and DAVIS concur. Report per Rule 30(e). For barred from we are unable this reason,

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