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DesRosier v. Montana Ninth Judicial District Court

Supreme Court of Montana

February 19, 2019



         Petitioners, Glacier County and its Commissioners (collectively, "County Officials" or the "County"), seek a writ of supervisory control over the Ninth Judicial District Court, the Hon. Gregory G. Pinski, presiding, in Glacier County Cause Number DV-17-19. Petitioners request this Court to vacate a writ of mandate the District Court issued on November 19, 2018. After a December 20 show-cause hearing, the District Court denied Petitioners' motion to quash and ordered that the writ would continue in effect. The writ of mandate was entered in part to effectuate relief sought by Plaintiffs Jeff Gottlob, Elaine Mitchell, and James Childress, on behalf of themselves and other similarly-situated Glacier County taxpayers ("Taxpayers"), whose Second Amended Complaint alleges in part that County Officials unlawfully disbursed County Taxpayers' protested tax payments before the final determination of the appeal in Mitchell v. Glacier County and State of Montana, S.Ct. Cause No. DA 16-0716. We concluded in that case that Taxpayers lacked standing to sue the County because they had alleged only that "it is 'foreseeable' that the County will raise property taxes to compensate for its imbalanced budget" and had not demonstrated 'actual or imminent', rather than 'conjectural or hypothetical', injury. Mitchell v. Glacier County, 2017 MT 258, ¶¶ 34, 37, 389 Mont. 122, 406 P.3d 427 (quoting Heffernan v. Missoula City Council, 2011 MT 91, ¶ 32, 360 Mont. 207, 255 P.3d 80). We concluded further that they lacked standing to sue the State because they could not "compel the State to take discretionary action" under the Single Audit Act. Mitchell, ¶ 32.

         Taxpayers' Second Amended Complaint alleges that Glacier County maintains cash reserves in excess of that allowed by law, as a result of which the County "levies property taxes for more than it is authorized to levy" and Taxpayers are "paying more taxes than the County can lawfully levy[.]" The Second Amended Complaint alleges further that "[f]or the tax years 2015, 2016, and 2017, the County has levied taxes without establishing either a preliminary annual budget or a final budget" contrary to law, as a result of which "the County is illegally taking money from Plaintiff taxpayers and the class." Taxpayers seek a declaration that property taxes collected were illegally or unlawfully imposed and an order directing that the unlawfully or illegally imposed taxes for tax years 2015, 2016, and 2017 be refunded to the Plaintiffs and to the class, and that the individually named County Officials be held personally liable for the allegedly unlawful assessments of taxes, unlawful disbursements, and expenditures they have made. Taxpayers also seek to have the Single Audit Act, §§ 2-7-501, MCA, et seq., declared unconstitutional.

         The writ of mandate requires Glacier County and its treasurer to accept taxes paid under protest for the 2018 tax year and place them in a designated protest fund as required by § 15-1-402(4)(a), MCA, until final determination of the action; to notify any Plaintiffs and class members in the underlying action who sought to pay their taxes under protest and were rejected that their taxes paid under protest shall be accepted; and to notify all county taxpayers that taxpayers who wish to protest their 2018 property taxes under the provisions of § 15-1-406(1)(b), MCA, may do so for thirty days from the postmark of such notice.

         Petitioners argue that immediate relief from the writ of mandate is warranted because the District Court is proceeding under a mistake of law and appeal will not be an adequate remedy, as the writ denies Glacier County the use of its property tax revenues from potentially all county taxpayers. County Officials assert that mandamus is not an available remedy here because the Taxpayers have an adequate remedy at law. In particular, they observe that once Taxpayers pay their taxes, whether under protest or not, they have "parted company with their money." If they later prevail in the protest action, the County must return the protested funds to the Taxpayers. County Officials maintain that the writ of mandamus is unnecessary to secure this relief, because it is expressly provided by law. Section 15-1 -4O2(6)(b), MCA. County Officials assert that the tax protest statutes do not envision or allow a taxpayer to pay the entire amount of her tax bill under protest, but only "that portion of the property tax or fee protested." Section 15-1-402(1)(a), MCA. They argue that the District Court's writ potentially denies the County the use of all tax revenue for the duration of the litigation, placing it in jeopardy of financial immobilization. County Officials also urge the Court to declare that Taxpayers have no private right of action to maintain the underlying suit.

         In response, Taxpayers first allege that the petition should be denied because County Officials failed to timely appeal the District Court's November 19, 2018 Order. Taxpayers point out that M. R. App. P. 6(3)(e) allows immediate appeal from an order granting or denying injunctive relief. But appeal is allowed only if the order is "the court's final decision on the referenced matter." M. R. App. P. 6(3). The District Court's November 19 Order directed the County and its treasurer to show cause why the writ of mandate should not continue in full force and effect until final resolution of the case and set a hearing a month later to hear any objections to its order. The November 19 Order was not the court's final order on the issue, and we conclude that the Petition is not barred by the County Officials' failure to appeal it.

         "A writ of mandamus compels 'the performance of an act that the law specially enjoins as a duty resulting from an office, trust, or station.'" Victor Fed'n of Teachers Local 3494 v. Victor Sch. Dist. No. 7, 2018 MT 72, ¶ 13, 391 Mont. 139, 414 P.3d 1284 (quoting Citizens for a Better Flathead v. Bd. of Cty. CommVs, 2016 MT 325, ¶ 58, 385 Mont. 505, 386 P.3d 567, and citing § 27-26-102, MCA). The writ is available if the requesting party "is entitled to the performance of a clear legal duty by the party against whom the writ is sought" and "there is no speedy and adequate remedy available in the ordinary course of law." Victor Fed'n of Teachers, ¶ 13 (citation and internal quotations omitted). A writ of mandamus may compel the performance of only a ministerial act, not of a discretionary act. Victor Fed'n of Teachers, ¶ 13. "An act is ministerial when 'the law prescribes and defines the duty to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment.'" Victor Fed'n of Teachers, ¶ 13 (quoting Citizens for a Better Flathead, ¶ 59).

         The District Court determined that the actions the Taxpayers sought to compel were purely ministerial acts. Despite County Officials' argument that the tax protest statutes did not apply to the Taxpayers' claims, the court held that the county treasurer and the County have no authority to determine the validity of the tender of taxes paid under protest under the provisions of §15-l-406(1)(b) and (3), MCA. Citing § 15-1-402(4)(a), MCA, the court observed that, "when taxes are paid under protest, the governmental entity at issue must deposit such tendered protested taxes in 'a special fund to be designated as a protest fund and [the payments] must be retained in the protest until the final determination of the action.'" If Taxpayers did not submit their payment under protest within thirty days of the levy, they would be delinquent. Section 15-16-102, MCA.

         Taxpayers filed their Second Amended Complaint under § 15-1-406, MCA, which provides in part: "An aggrieved taxpayer may bring a declaratory judgment action in the district court seeking a declaration that . . .a tax authorized by the state or one of its subdivisions was illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax." Section 15-1-406(1)(b), MCA. The statute requires that any taxes being challenged under this section "must be paid under protest when due as a condition of continuing the action." Section 15-1-406(3), MCA. Further, the remedy authorized by § 15-1-406, MCA, "is the exclusive method of obtaining a declaratory judgment concerning a tax authorized by the state or one of its subdivisions." Section 15-1-406(5), MCA. Taxpayers emphasize that the crucial factor in consideration of the writ of mandate was the thirty-day deadline for paying property taxes; they had to pay those taxes under protest to sustain their right of action under § 15-1-406, MCA.

         The only issue presented by the County Officials' petition is whether this Court should assume supervisory control to vacate the writ of mandate concerning the payment of taxes under protest, the County's handling of funds it receives under protest, and notification to all taxpayers in the County. Multiple myriad issues in the litigation remain pending in the District Court. We decline to wade into the substantive challenges raised in the Taxpayers' Second Amended Complaint or the County's defenses to their claims. Except as necessary to resolve the writ petition, we express no opinion on any of the matters at issue.

         On its face, the Second Amended Complaint asserts a claim for declaratory relief that the County's imposition of property taxes for tax years 2015, 2016, and 2017 exceeded County Officials' taxing authority and that the taxes were "illegally or unlawfully imposed." Section 15-1-406(1)(h), MCA. Taxpayers do not contend that the County lacks statutory authority to impose property taxes. Their complaint challenges the method and process by which the County has determined the amount of taxes imposed for the tax years at issue and alleges that the County's unlawful acts and failures have resulted in increased taxes for County taxpayers.

         The District Court concluded that the statutes afford a county treasurer no discretion to reject a tax payment made under protest. It concluded that the question raised by the County-whether §15-1 -4O2(1), MCA, allows a taxpayer to protest the entire amount of her property tax bill-was a question "to sort out at another day." It thus mandated that the County notify some 6, 000 Glacier County taxpayers that they could have their first-half property taxes for 2018 paid under protest, even if they already had paid those taxes, because the treasurer wrongfully had advised some taxpayers that the County could not accept the protest payments.

         We see two problems with the District Court's ruling. First, the Second Amended Complaint challenges taxes levied for tax years 2015, 2016, and 2017, yet the taxes being paid under protest are for tax year 2018. More important, although they submitted their entire tax payment under protest, neither the Taxpayers' protest statements nor the Second Amended Complaint articulate a theory or explanation that the entire tax levied is unlawful. A writ of mandamus requires proof of a clear legal duty. The "Reason for Protest" identified in the Taxpayers' protest statements indicates that the County is not complying with laws and regulations concerning local budgets, that the result is the Taxpayers being injured by having to pay "more taxes than the County can lawfully levy," and that the County is "illegally taking" some unspecified amount of money from the Taxpayers. Again, Taxpayers do not dispute that the County has taxing authority or claim that all property taxes levied by the County exceed its authority. Absent identification of the portion of the taxes they claim is unlawful, they have no right under the tax protest statutes to protest the entire amount of their tax payments and thereby compel the County to deposit all property tax revenue in a special protest fund under § 15-1-402(4)(a), MCA. The District Court therefore erred by issuing a writ of mandate. Finally, there is no clear legal duty for the County to notify all taxpayers in the County that they have an opportunity to pay their taxes under protest.

         IT IS THEREFORE ORDERED that the Petition for Writ of Supervisory Control is GRANTED. The District Court's November 19, 2018 Order and Writ of Mandate is hereby VACATED.

         The Clerk is directed to provide copies of this Order to counsel for Petitioners, to counsel for the Plaintiffs in Glacier County Cause No. DV-17-19, and to the ...

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