Case Title: Enron Oil & Gas Co. v. Freudenthal

Citation: 

Docket Number: 93-60

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-10-21T00:00:00Z

Document:
Enron Oil & Gas Co. v. Freudenthal1993 WY 134861 P.2d 1090Case Number: 93-60Decided: 10/21/1993Supreme Court of Wyoming
ENRON 
OIL & GAS COMPANY,

 Appellant 
(Plaintiff/Petitioner),

v.

Nancy 
FREUDENTHAL, Marvin Applequist, and Terry E. Rubald, 

sitting 
as the Board of Equalization of the State of Wyoming, 

Appellees 
(Defendants/Respondents).

Appeal 
from The District Court, Laramie County, Nicholas G. Kalokathis, 
J.

Dante 
L. Zarlengo, Denver, CO and Joseph P. Fonfara of Fonfara Law Offices, Cheyenne, 
for appellant. 

Joseph 
B. Meyer, Atty. Gen., Michael L. Hubbard, and Vicci M. Colgan, Sr. Asst. Attys. 
Gen., for appellee.

Before 
MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, 
JJ.

CARDINE, 
Justice.

[¶1]      Appellant, Enron 
Oil and Gas Company (Enron), applied for a severance tax refund with the Wyoming 
Department of Revenue and Taxation (Department) for the years 1987 through 1990. 
The Department granted the refunds for the years 1989 and 1990 but rejected 
Enron's claims for refunds for the years 1987 and 1988. Enron appealed the 
denial of its refund claims to the Board of Equalization of the State of Wyoming 
(Board) which concluded that the refund claims for 1987 and 1988 were barred by 
the two-year filing limit of W.S. 39-6-304(g) (1985) (Repealed by 1988 Wyo. 
Sess. Laws, ch. 90, § 2). The District Court affirmed the Board's decision, and 
Enron appealed to this court.

[¶2]      We 
affirm.

[¶3]      Enron raises the 
following issues:

A. 
Whether the time period for filing a request for a refund of severance taxes 
that is provided in W.S. 39-6-304(g) (1977) commences to run while the amount of 
refund is subject to an administrative appeal to the Wyoming Board of 
Equalization?

     B. Whether the time 
period for filing a request for a refund of severance taxes that is provided in 
W.S. 39-6-304(g) (1977) is tolled while the amount of refund is subject to an 
administrative appeal to the Wyoming Board of 
Equalization?

C. 
Whether the trial court erred in finding that the decision of the Wyoming Board 
of Equalization denying a refund for severance taxes overpaid for the years 1987 
and 1988 was not arbitrary and capricious?

FACTS

[¶4]      The facts in this 
case are undisputed. Enron is the operator of several oil and gas properties 
that it owns with Chevron U.S.A., Inc. (Chevron). Enron produced oil and gas 
from these properties, and Chevron took its share of the production in kind. 
During the years in question, 1987 to 1990, Enron paid severance taxes on the 
total production, including the portion delivered to Chevron. Unbeknownst to 
Enron, Chevron was also paying severance taxes on its share which resulted in 
the State collecting double taxes.

[¶5]      The Department 
noticed that there were discrepancies in the production figures reported to it 
by Enron and Chevron. Based on the highest production figures, the Department 
issued severance tax assessments against Chevron. Chevron appealed these 
assessments to the Board. Enron was joined as a necessary party but did not 
participate in the Chevron appeals. The discrepancies in the production figures 
were reconciled by agreements between Enron and Chevron; and, on September 24 
and 27, 1990, the Board entered orders resolving Chevron's 
appeals.

[¶6]      Subsequently, 
Enron filed requests for refunds for the overpaid severance taxes with the 
Department for the years 1987 through 1990. The Department granted the refunds 
for 1989 and 1990. The refund requests for 1987 and 1988 were denied. Enron 
appealed the denial of the refunds to the Board. The Board affirmed the 
Department's decision, concluding that the refunds for 1987 and 1988 were barred 
by the two-year filing requirement of W.S. 39-6-304(g). The district court 
affirmed the Board's decision for the same reason, and Enron now appeals to this 
court.

STANDARD 
OF REVIEW

[¶7]      The standard of 
review for administrative decisions is well established.1 The scope of our review is 
controlled by W.S. 16-3-114(c) (1990), which provides:

(c) 
To the extent necessary to make a decision and when presented, the reviewing 
court shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action. In making the following determinations, the court shall review 
the whole record or those parts of it cited by a party and due account shall be 
taken of the rule of prejudicial error. The reviewing court 
shall:

(i) 
Compel agency action unlawfully withheld or unreasonably delayed; 
and

(ii) 
Hold unlawful and set aside agency action, findings and conclusions found to 
be:

(A) 
Arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law;

(B) 
Contrary to constitutional right, power, privilege or 
immunity;

(C) 
In excess of statutory jurisdiction, authority or limitations or lacking 
statutory right;

(D) 
Without observance of procedure required by law; or

(E) 
Unsupported by substantial evidence in a case reviewed on the record of an 
agency hearing provided by statute.

See 
Barcon, Inc. v. State Bd. of Equalization, 845 P.2d 373, 376 (Wyo. 1992). We do 
not give the district court's decision any special deference. 
Id.

[¶8]      The issues in 
this case concern the proper interpretation and application of a rule of law by 
a state agency. The standard of review for agency conclusions of law 
is:

If 
the conclusion of law is in accordance with law, it is affirmed, [Department of 
Revenue and Taxation v.] Casper Legion Baseball Club, Inc., 766 [767] P.2d 608 
[Wyo. 1989]; if it is not, it is to be corrected, Rocky Mountain Oil & Gas 
Ass'n [v. State Board of Equalization], 749 P.2d 221 [Wyo. 
1987].

Employment 
Sec. Comm'n v. Western Gas Processors, Ltd., 786 P.2d 866, 871, 86 A.L.R.4th 295 
(Wyo. 1990). See also Aanenson v. State ex rel. Worker's Compensation Div., 842 P.2d 1077, 1079 (Wyo. 1992).

W.S. 
39-6-304(g)

[¶9]      Wyoming Statute 
39-6-304(g) stated:

Any 
excess tax found to have been paid, whether as the result of overpayment, an 
appeal or an erroneous assessment shall be refunded to the person paying the 
tax. All applications for refunds shall be made within two (2) years from the 
payment of the erroneous tax.2

[¶10]   Enron contends that the Board 
misinterpreted the language of this statute and, as a result, Enron was denied 
refunds to which it was entitled. Enron contends that the statute's two-year 
limitation on filing for refunds does not begin to run until the refund accrues. 
According to Enron, this occurs when the actual amount of the refund becomes 
determined. Here, the amount of the refunds did not become known until the Board 
issued its orders in the Chevron appeals. Enron alleges that to apply for a 
refund before then is an exercise in futility because the Board would have to 
deny its claim since the amount is not known.

[¶11]   In support of its position, Enron 
refers to the language of the statute. Specifically, Enron asserts that the word 
"appeal" in the statute endorses the conclusion "that the two year limitation 
provision commences when the appeal creating the excess tax is concluded." Enron 
points out that the statute is silent as to whether the appeal has to be one 
filed by the taxpayer or a third party. Enron argues that the Chevron appeals, 
to which Enron was a non-participating party, delayed the start of the two-year 
limitation in W.S. 39-6-304(g) until 1990 when those appeals were concluded. If 
that position is correct, then Enron filed its application for refunds within 
the statutory time limit.

[¶12]   We have stated many times our 
approach to reading the language of a statute:

As 
we read the text of a statute keeping in mind the functional relation between 
the parts and the whole, we know that statutory language may be either 
unambiguous or ambiguous. A "statute is unambiguous if its wording is such that 
reasonable persons are able to agree as to its meaning with consistence and 
predictability." Allied-Signal, [Inc. v. State Bd. of Equalization,] 813 P.2d 
[214] at 220 [Wyo. 1991]. "[A] statute is ambiguous only if it is found to be 
vague or uncertain and subject to varying interpretations." Id. at 219-20. 
"[W]hether an ambiguity exists in a statute is a matter of law to be determined 
by the court." Id.

     On numerous occasions 
the court has, over its long history, consistently followed a general rule that 
if the statutory language is unambiguous, the court may not resort to 
application of rules of construction. See, e.g., Rasmussen [v. Baker], 7 Wyo. 
[117] at 128, 50 P. [819] at 821 [1897] ("If the language employed is plain and 
unambiguous, there is no room left for construction. * * * Courts are not at 
liberty to depart from that meaning which is plainly declared."); Gale v. Sch. 
Dist. No. 4, 49 Wyo. 384, 54 P.2d 811 (1936); Druley v. Houdesheldt, 75 Wyo. 
155, 294 P.2d 351 (1956); and Zmijewski v. Wright, 809 P.2d 280, 282 (Wyo. 1991) 
("If the language of a statute communicates a plain meaning to this court, that 
meaning will be applied.")

Parker 
Land & Cattle Co. v. Wyo. Game & Fish Comm'n, 845 P.2d 1040, 1043 (Wyo. 
1993) (footnote omitted).

[¶13]   We have had previous occasion to 
examine W.S. 39-6-304(g). In Amoco Production Co. v. State Bd. of Equalization, 
797 P.2d 552 (Wyo. 1990), Amoco revised its reporting and accounting procedures 
which resulted in lower severance taxes for previous years' production. The 
Board denied refunds to Amoco for the years prior to the two-year limitation 
contained in 39-6-304(g). We affirmed the Board's finding that the statute was 
"clear" and that it "provides no exception for adjustments outside the two-year 
statute of limitations." Amoco, at 555.

[¶14]   The second sentence of the statute 
is clear and unambiguous:

All 
applications 
for refunds shall be made within two (2) years from the payment of 
the erroneous tax. [emphasis added]

See 
Amoco. The statute clearly states that all applications for refunds must be made 
within two years of the payment of the tax. It does not say, as Enron suggests, 
that the taxpayer has two years from the date of determination of the amount of 
a claimed refund. Enron's reading of the statute in this way would mean that we 
would ignore the mandatory "shall" in this sentence and the word "payment." 
Whether an appeal is by the taxpayer or a third party, "the statute's use of the 
term `payment' means when the severance tax was actually paid." Amoco, at 
556.

[¶15]   "Paid" is the operative word in the 
statute. Thus the plain meaning of 39-6-304(g) is that a refund is available for 
any excess tax found to have been paid because of an overpayment, because of an 
appeal, or because of an erroneous assessment. The excess tax here was not paid 
because of an appeal. It was not paid because of an erroneous assessment. It was 
paid as an overpayment, and the statute runs from the date of 
payment.

[¶16]   Enron's assertion that it could not 
file for a refund until the Chevron appeals were concluded because it would not 
know the amount of the refund until then does not govern the beginning of the 
running of the statute of limitations. A similar argument was made in 
Amoco:

Amoco 
argues that it was not always able to foresee when later accounting and 
reporting corrections might result in subsequent adjustments (e.g., when a 
take-in-kind interest owner would submit revised figures) and, therefore, it was 
difficult to meet the two-year period. We do not disagree with this claim. The 
legislature, however, drafted the statute to place the burden of compliance on 
Amoco. Absent legislative direction, this court will not shift that 
burden.

Amoco, 
at 555 n. 6. The burden was on Enron to file its claims before the two years 
from payment elapsed. Enron failed to do so.

[¶17]   In fact, Enron's assertion that it 
could not apply for its tax refund until the amount was determined by the 
Chevron appeals is contradicted by the record. Amended returns can and almost 
always are filed before the Board rules on take-in-kind appeals. Enron could 
have filed its refund claims but failed to do so. We cannot legislate an 
exception to an unambiguous statute because it would be fair or equitable to do 
so.

[¶18]   Enron argues that if the statute of 
limitation did commence when it paid the tax, it was nevertheless tolled by the 
Chevron appeals. In support of this contention, Enron urges this court to adopt 
the doctrine of equitable tolling. See Dayhoff v. Temsco Helicopters, Inc., 772 P.2d 1085, 1087 (Alaska 1989); Erickson v. Croft, 233 Mont. 146, 760 P.2d 706, 
708 (1988). This court has not previously considered whether the doctrine of 
equitable tolling is available to allow litigants the opportunity to escape the 
bar of a statute of limitations.

[¶19]   The issue of whether equitable 
tolling applied to toll W.S. 39-6-304(g) was not raised by Enron in its briefs 
at the administrative level nor at the district court. Enron, in its appeal to 
this court, raises the matter of equitable tolling for the first time. We have 
stated numerous times that this court will not consider matters that are raised 
for the first time on appeal. Iberlin v. TCI Cablevision of Wyoming, Inc., 855 P.2d 716, 726 (Wyo. 1993); Sheridan Commercial Park, Inc. v. Briggs, 848 P.2d 811, 817 (Wyo. 1993); Strom v. Felton, 76 Wyo. 370, 302 P.2d 917, 924 (1956). We 
have also stated that "[t]his court has taken a dim view of a litigant trying a 
case on one theory and appealing it on another." Epple v. Clark, 804 P.2d 678, 
681 (Wyo. 1991). "Parties are bound by the theories which they advanced below." 
Id.

[¶20]   Enron did not advance the theory of 
equitable tolling at the district court or at the agency level. Therefore, we 
would ordinarily decline to consider its argument. It is a simple matter for us 
in this case, however, to point out that if we were to consider the argument, 
Enron could not prevail on the merits. Equitable tolling applies only where a 
party has more than one legal remedy available to him. Erickson, at 708 (quoting 
Addison v. State, 21 Cal. 3d 313, 146 Cal. Rptr. 224, 226-27, 578 P.2d 941, 943 
(1978)). The doctrine acts to toll the statute of limitations for the one remedy 
while the party is pursuing the other. Id. Here, only one remedy was available 
to Enron. Enron could obtain a severance tax refund only by applying to the 
Department. The appeals by Chevron did not constitute an alternative legal 
remedy available to Enron. First, it was Chevron who instituted the action, not 
Enron. Second, although Enron was joined in the action, it did not participate 
in the proceedings. Third, Enron could recover nothing in the action being 
pursued by Chevron. Consequently, Enron's claim must fail on the 
merits.

ARBITRARY 
AND CAPRICIOUS

[¶21]   Enron's final argument is that the 
Board's decision should be reversed because its denial of refunds was arbitrary 
and capricious. This argument must also fail for the obvious reason that since 
the Board correctly applied the appropriate rule of law to the facts, its action 
was not arbitrary or capricious.

CONCLUSION

[¶22]   Wyoming Statute 39-6-304(g) is 
clear and unambiguous. All applications for refunds of severance taxes must be 
made within two years of the payment of the tax. Enron failed to make 
application within the prescribed two-year period. Therefore, the Board was 
correct in denying the refund requests for 1987 and 1988.

[¶23]   Affirmed.

FOOTNOTES

1 Our authority to review decisions of the Board of Equalization is 
contained in W.S. 39-1-306 (1990) and 16-3-115 (1990). Section 39-1-306 
provides:

Any person including the state of Wyoming aggrieved by any order issued 
by the board, or any county board of equalization whose decision has been 
reversed or modified by the state board of equalization, may appeal the decision 
of the board to the district court of the county in which the property or some 
part thereof is situated.

Section 16-3-115 provides for supreme court review of the district 
court:

An aggrieved party may obtain a review of any final judgment of the 
district court under this act by appeal to the supreme court. The appeal shall 
be taken as in other civil cases.

2 Section 39-6-304(g) (1985) has since been repealed. 1988 Wyo. Sess. 
Laws, ch. 90, § 2. The repealed statute controls in this 
case.