Case Title: Berrum v. Otto

Citation: 127 Nev. Adv. Op. No. 30

Docket Number: 54947

State: nevada

Court: Nevada Supreme Court

Date: 2011-07-07T00:00:00Z

Document:
4127 Nev, Advance Opinion 30

IN THE SUPREME COURT? OF THE STATE OF NEVADA

‘TREASURER,
FILED

Appellant,
UL 07 2011

CHARLES OTTO, TRUSTEE OF THE
OTTO FAMILY TRUST; TODD LOWE,
‘TRUSTEE OF THE LOWE FAMILY
‘TRUST; AND V PARK, LLC, A NEVADA
LIMITED LIABILITY COMPANY, FOR
THEMSELVES AND ON BEHALF OF
SIMILARLY SITUATED RESIDENTIAL,
PROPERTY OWNERS AND
‘TAXPAYERS AT INCLINE
VILLAGE/CRYSTAL BAY, WASHOE

 

BILL BERRUM, WASHOE COUNTY | No. 54947
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COUNTY, NEVADA,
Respondents.

Appeal from a district court order granting a petition for a
writ of mandamus in a tax action. Second Judicial District Court, Washoe
County; Brent T. Adams, Judge.

Affirmed.
Richard A. Gammick, District Attorney, and David C. Creekman, Deputy

District Attorney, Washoe County,
for Appellant,

Morris Peterson and Suellen E. Fulstone, Reno,
for Respondents.

 

J1-Aol53

 
1 N08

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

This appeal arises out of an ongoing conflict between Washoe
County and taxpayers in Incline Village and Crystal Bay regarding
property tax valuation, equalization, and collection? In this appeal, we
must determine whether the district court properly issued a writ of
mandamus requiring the Washoe County Treasurer to refund excess taxes
paid by the respondent Taxpayers for the 2006-2007 tax year. The
‘Taxpayers paid the excess taxes because of

 

stay imposed in a pending
appeal challenging a prior year’s assessments. We conclude that the
district court properly issued the writ of mandamus because the
‘Taxpayers paid more than was due and typical administrative remedies to
recover overpaid taxes do not apply where the Taxpayers were successful
at all levels below. Additionally, the Treasurer had a duty to refund the
excess taxes pursuant to NRS 360.2935,
FACTS

The Taxpayers are owners of real property situated near Lake

‘Tahoe in Crystal Bay and Incline Village, Washoe County, Nevada. In

"The Honorable Kristina Pickering, Justice, voluntarily recused
herself from participation in the decision of this matter.

*See Village League v, State, Bd. of Equalization, 124 Nev. 1079, 194
P.3d 1254 (2008); State, Bd. of Equalization v. Barta, 124 Nev. 612, 188
P.3d 1092 (2008); State, Bd. of Equalization v. Bakst, 122 Nev. 1403, 148
P.3d 717 (2006).

 
re

 

January 2006, the district court concluded that the 2003-2004 property
tax assessments for certain Incline Village and Crystal Bay properties
were unconstitutional and ordered the Washoe County Assessor to roll
back the tax valuations for those properties to 2002-2003 levels, The court
also ordered a refund of any excess taxes that had been paid by the
affected taxpayers while the case was pending.’ The Assessor appealed
the district court's decision to this court, see Sta ion v,
Bakst, 122 Nev. 1403, 148 P.3d 717 (2006), and in February 2006, we
stayed enforcement of the district court's order pending our disposition of
the appeal. Although no refunds could be granted during the pendency of
our stay, our order explained that the County Board could continue to
evaluate taxpayers’ petitions seeking to roll back their tax valuations, so
long as no rollbacks were implemented.

Shortly thereafter, in March 2006, the County Board issued a
general equalization decision rolling back residential property tax
valuations in the Incline Village and Crystal Bay areas. This time,
‘however, the tax year at issue was 2006-2007; the Board, in an attempt to
create an equal rate of taxation for the Incline Village and Crystal Bay
Property owners not affected by the previous decision to roll back tax
valuations, decided to revert valuations to the 2002-2003 levels, As noted

The details of the actions leading to the district court’s decision and
related events can be found in our prior opinions. See Village League, 124
Nev. at 1081-85, 194 P.3d at 1256-58; Barta, 124 Nev. at 617-19, 188 P.3d
at 1095-97; Bakst, 122 Nev. at 1405-08, 148 P.3d at 719-21

 

 
above, the stay order prevented enforcement of any rollbacks until
disposition of the Assessor's earlier appeal in Bakst regarding the 2003-
2004 tax values. ‘The Assessor immediately appealed the County Board’s
decision to the State Board of Equalization, but the State Board deferred
considering the issue because of the stay and because the Bakst case was
still pending before this court.
‘The Bakst decision

In December 2006, this court issued an opinion in Bakst,
affirming the district court's findings regarding the 2003-2004 property

 

tax assessments and holding that the Assessor's unapproved appraisal
methodology for assessing properties in the Incline Village and Crystal
Bay areas was unconstitutionally inconsistent with his approach
elsewhere in Washoe County. Bakst, 122 Nev. at 1416, 148 P.3d at 726.
Thus, we held that taxpayers whose properties were valued using the
disputed methodologies were entitled to a refund plus interest pursuant to
RS 360.2935. Bakst, 122 Nev. at 1417, 148 P.3d at 726.4

Immediately after the Bakst decision, which effectively lifted
this court's stay, the Assessor corrected the assessment rolls for the 2006-

‘Another group of taxpayers, including some of the Bakst taxpayers,
made @ similar challenge to the Assessor's valuations for the 2004-2005
tax year. Barta, 124 Nev. 612, 188 P.3d 1092. This court concluded that,
in assessing the taxable values for that year, the Assessor employed
methods deemed unconstitutional in Bakst. Id. at 616, 188 P.3d at 1095.
‘This court determined that Barta was indistinguishable from Bakst and
thus affirmed the district court's determination that the 2004-2005
assessments were void, concluding that the taxpayers were entitled to a
refund of taxes paid in excess of the 2002-2003 assessed values. Id. at 628,
188 P.3d at 1103.

 

 
ne

2007 tax year to reflect 2002-2003 valuations for Incline Village and
Crystal Bay, in accordance with the County Board's March 2006
equalization decision. And in April 2007, the State Board proceeded with
the Assessor's appeal of that equalization decision, At the State Board's
hearing, it stayed enforcement of the County Board's decision and
remanded the matter to the County Board for further factual findings.
However, the taxpayers immediately sought a writ of mandamus from this
court to force the State Board to hear the Assessor's appeal on the merits,
Village League v, State, Bd, of Equalization, 124 Nev. 1079, 194 P.3d 1254
(2008). This court granted the writ petition and directed the State Board
to hear the Assessor's appeal of the County Board’s decision to reduce the
2006-2007 tax year assessments to 2002-2008 levels. Id, at 1091, 194 P.3d
at 1262-63.

In July 2009, the State Board proceeded with the merits of the
Assessor's appeal from the County Board's equalization decision. At the
hearing, the State Board orally voted to uphold the County Board's
decision. Its written decision affirming the County Board's equalization
decision was entered in October 2009.
‘The district court's writ of mandamus, which is the subject of this appeal

Meanwhile, after the Treasurer rejected a demand by the
Taxpayers to refund the excess taxes and did not immediately issue
refunds of taxes paid in excess of the 2002-2003 tax year levels, the
‘Taxpayers petitioned the district court for a writ of mandamus to compel
him to do so. During his testimony before the district court, the Treasurer
explained that, typically, once there is a final written order from the State
Board and the Assessor has updated the tax rolls, the Treasurer adjusts
his collections, including issuing refunds if required. He also stated that,
in the scheme of tax collection, one of his jobs is to issue refunds when the

 
Assessor updates the assessment roll. However, he maintained that he

did not pay refunds in this case because of the ongoing legal proceedings

 

related to the assessments and because he had not received a final written
decision from the State Board specifically instructing him to issue refunds.

Although the State Board had not yet issued its final written
order upholding the County Board’s equalization decision, the district
court granted the petition and issued the writ, The writ mandated that
the Treasurer comply with the County Board's decision to roll back the
2006-2007 taxable values for 8,700 properties located in the Incline Village
and Crystal Bay areas to 2002-2008 levels. In its order, the district court
outlined the typical procedure for issuing refunds, finding that the
Treasurer had a duty to conform his collections to the updated assessment
roll and issue refunds if required. Because the Treasurer had collected
taxes at the unreduced rate despite the Assessor's update to the
assessment roll, the district court mandated that the Treasurer was to
calculate the overpayments for the “2006-2007 [tax year] and subsequent
years,” compute interest pursuant to the formula contained in NRS
361.486, and refund the total amount to the affected taxpayers. ‘The
‘Treasurer now appeals the district court's order granting the petition for a
writ of mandamus.

DISCUSSION

‘This court generally reviews a district court's decision to grant
a petition for writ of mandamus for abuse of discretion. Kav v. Nunez, 122
Nev. 1100, 1105, 146 P.3d 801, 805 (2006). However, this court reviews
related statutory and legal issues de novo. Las Vegas Taxpayer Comm. v.
City Couneil, 125 Nev. 165, 172, 208 P.3d 429, 433-34 (2009); Marquis &
Aurbach v. Dist. Ct., 122 Nev. 1147, 1156, 146 P.3d 1180, 1136 (2006). “A
writ of mandamus is available to compel the performance of an act which

6

 

 
the law requires as a duty resulting from an office, trust or station .. or
to control an arbitrary or capricious exercise of discretion.” State v, Dist
Ct, 116 Nev. 374, 379, 997 P.2d 126, 180 (2000) (internal citation
omitted). ‘Thus, the petitioner must meet two requirements for mandamus
relief: there must be no other available remedy at law, gee id., and the
required act must be within the duties of the person compelled to act.
State of Nevada v, Waterman, 5 Nev. 323, 326 (1869)

‘The Treasurer argues on appeal that writ of mandamus in this
instance was inappropriate because Nevada's statutory tax collection
scheme provides the Taxpayers with an appropriate legal remedy for
overpayment of taxes and because he had no legal duty to refund the
excess amounts. But because we conclude that the Taxpayers had no
available statutory or legal remedy to obtain a refund and the Treasurer

  

had an affirmative duty to refund, writ relief was appropriate.
‘No legal remedies were available

Generally, a taxpayer must “exhaust [his] administrative
remedies before seeking judicial relief” from tax assessments and
determinations. Washoe County v. Golden Road Motor Inn, 105 Nev. 402,
403, 777 P.2d 358, 359 (1989). NRS 361.420(1) requires a taxpayer who
believes that he or she is being taxed “in excess of the amount . . . justly to
be due” to notify the Treasurer, in writing, that he or she is paying under
protest. After the taxpayer pays under protest, he or she may then bring a
complaint before the County Board and, if necessary, appeal to the State
Board. NRS 361.420(2). If denied relief, the taxpayer may commence an
action in the district court. Id.

The Treasurer argues that these statutory requirements
under NRS 361.420 “envision a suit for precisely the relief ultimately

sought by these taxpayers.” He contends that the district court could not

 

 
grant a refund because the Taxpayers did not pay under protest for the
2006-2007 tax year. The Taxpayers argue that they prevailed before the
County Board because the Board decided to roll back their assessed valu

 

and the Treasurer would have collected taxes at the lower rate but for this
court's stay. Therefore, they had no reason to pay under protest. We
agree.

RS 361.420(2) states that a taxpayer who protests and has
been “denied relief by the State Board of Equalization” may commence a
lawsuit for recovery of excess taxes. Similarly, NRS 361.420(3) requires a
taxpayer to commence a suit for overpaid taxes within three months after
paying the tax under protest or within three months after the “decision of
the State Board of Equalization denying relief.”

Here, although the County Board made an equalization
decision to roll back taxable values for the 2006-2007 tax year to the 2002-
2003 levels, it could not enforce that decision because the Bakst stay order
enjoined it from implementing any rollbacks while the stay was pending.
‘Thus, at the time of collection for the 2006-2007 tax year, the Taxpayers
were not overpaying their taxes because the stay prevented any rollback of
the taxable valuations, Until the stay was lifted and the State Board
heard the Assessor's appeal of the County Board's March 8, 2006, decision,
the Taxpayers had no grounds, or reason, to pay under protest because

they were required to pay the amount listed on the 2006-2007 assessment,
roll. Even if the Taxpayers had paid under protest, NRS 361.420(2) would
not have provided relief because it applies only if the taxpayer has
previously “been denied relief by the State Board of Equalization.” These
‘Taxpayers were not denied relief but instead prevailed before the County
Board and, ultimately, the State Board. Therefore, we conclude that the

 

 
Taxpayers were not required to pursue the protest remedies in NRS.
361.420 before seeking a refund under the procedural facts of this case.

Having concluded that no alternative legal remedies existed to
preclude writ relief, we must now determine whether the Treasurer had a
duty to refund the excess taxes paid by the Taxpay
‘The Treasurer had a duty to refund excess taxes

‘The Treasurer argues that he had no duty to refund the excess
taxes because the State Board failed to direct him to do s0, as required
under NRS 361.405(4), and no other authority for doing so exists.$

 

The Treasurer also argues as a matter of policy that the voluntary
payment doctrine precludes him from issuing refunds. Under the
voluntary payment doctrine, if a taxpayer tenders a tax, assessment, or
exaction voluntarily, he or she is generally not entitled to a refund except
as provided for by statute. See 16 Eugene McQuillin, The Law of
Municipal_Corporations § 44.180 (3d ed. 2003) (‘[GJenerally, in the
absence of statute there can be no recovery of taxes which have been
voluntarily paid.”); see also Video Aid Corp, v. Town of Wallkill, 651
N.E.2d 886, 888 (N.Y. 1995) (“The settled law is that the payment of a tax
or fee cannot be recovered subsequent to the invalidation of the taxing
statute or rule, unless the taxpayer can demonstrate that the payment
was involuntary.”). The purpose of this doctrine is to encourage stability
and certainty for the taxing entity. See City of Laredo v. South Texas Nat.
Bank, 775 S.W.2d 729, 731 (Tex. App. 1989); see also Budget Rent-A-Car
of Tulsa v. Tax Com'n, 773 P.2d 736, 739 (Okla. 1989).

‘The Treasurer argues that NRS 361.420 is Nevada's version of the
voluntary payment doctrine. However, these circumstances are unique
from those envisioned in NRS 361.420 because, here, the Taxpayers
successfully challenged the basis of their 2006-2007 assessments,
prevailed before the County Board, and were simply waiting for this court
to decide the Bakst appeal and to lift the stay preventing enforcement of
the rollback of their taxable valuations, Therefore, we conclude that the
voluntary payment doctrine does not apply to these Taxpayers.
Furthermore, disallowing refunds in this case would not further the

continued on next page

 

 

 

 

 
NRS 361.405(4) governs the duties of the Treasurer when
changes to assessed property valuations are made, stating:

‘As soon as changes resulting from cases having
less than a substantial effect on tax revenue have
been certified to the county tax receiver by the
Secretary of the State Board of Equalization, the
county tax receiver shall adjust the assessment
roll or the tax statement or make a tax refund, as
directed by the State Board of Equalization.

According to this statute, the State Board could have ordered the

 

‘Treasurer to adjust the assessment roll or the tax statement, or to make a
refund, based on changes certified by the State Board.

At its July 2009 hearing, the State Board orally voted to
uphold the County Board's decision to roll back the taxable values of the
Incline Village and Crystal Bay area properties to 2002-2003 levels, but it

» continued

voluntary payment doctrine’s policy goals of certainty and stability. The
Treasurer knew that the Taxpayers had challenged the assessed taxable
values, and he knew that the Taxpayers prevailed before the County
Board on March 8, 2006, s0 he could have planned appropriately.

©NRS 361.405(4) applies when the effect on tax revenue is not
substantial, and NRS 361.405(2) applies when the effect on tax revenue is
substantial. At its annual session regarding the 2006-2007 tax year, the
State Board concluded that the County Board’s March 8, 2006, decision
would not have a substantial effect on revenue despite the $12 million at
stake. See Village League v. State, Bd. of Equalization, 124 Nev. 1079,
1083, 194 P.8d 1254, 1257 (2008). However, the State Board made this
decision based, at least in part, on the fact that the County Board's
decision was not yet final because of the stay in effect at the time. Id.
Because we conclude that this statute does not apply to the refund issues
before us, the distinction is irrelevant to this case.

 

 
4

 

did not explicitly refer to a refund of excess taxes collected.” Thus, the
Treasurer argues, the State Board opted to adjust the assessment roll but
not to refund the tax money. Without the State Board's specific order to
refund taxes, the Treasurer claims that he had no duty to refund them,
We disagree. As demonstrated above, even if the State Board's order it
the Treasurer states, the State Board’s failure to explicitly direct a refund

 

 

in this case does not abrogate the district court's power to enforce any

other statutory duty to issue a refund,

‘The plain language of NRS 361.405(4) indicates that its
remedies apply only when the State Board changes valuation decisions
made by county boards, If the State Board makes such a change, it
necessarily follows that it must direct the Treasurer regarding how to
implement its change. For example, if the Assessor prevailed in an appeal
before the State Board, the State Board would then have to direct the tax

receiver’ to adjust the assessment roll to reflect the increase so that the

"The Treasurer requests that we take judicial notice of the State
Board's final written decision, entered after the district court granted the
writ, He claims that the written decision required that the assessment
roll be certified but did not direct the Treasurer to issue any refunds. He
contends that this failure to require refunds precludes his duty to issue
them. However, neither party provided this court with this document, 50
we decline to take judicial notice of the State Board’s written decision, and
we do not address the Treasurer's argument on this point, See Mack v.
Estate of Mack, 125 Nev. 80, 91, 206 P.3d 98, 106 (2009) (holding that this
court generally will not take judicial notice of records in other matters);
Carson Ready Mix v, First Nat'l Bk,, 97 Nev. 474, 476, 635 P.2d 276, 277
(1981) (providing that this court will not consider evidence not appearing
in the record on appeal).

Sin Washoe County, the Treasurer is the designated tax receiver, but
the Assessor manages the assessment roll.

u

 
Treasurer could collect taxes accordingly. Conversely, if the State Board
decision resulted in lower taxes, the Board would have to order an
adjustment of tax statements or order a refund of excess taxes paid. Here,
however, the State Board upheld the County Board's decision to roll back
tax valuations but made no changes of its own to assessed values. Thus,
the remedies in NRS 361.405(4) are not applicable here because the State
Board did not need to direct the Treasurer to take action as a result of its
decision.

‘Typically, in cases such as this, the County Board’s decision
would be implemented immediately, and no adjustment to the

 

ssessment
rolls after the State Board's affirmance would be necessary. This situation
arose, again, because of the stay imposed by this court preserving the
status quo pending our consideration of the Bakst appeal. Once the stay
was lifted, the County Board’
Treasurer, however, continues to assert that, now that they have been

 

decision could be fully implemented. ‘The

paid, no authority exists allowing him to refund the excess taxes. He
overlooks NRS 360.2935.

Pursuant to NRS 360.2935, “a taxpayer is entitled to receive
‘on any overpayment of taxes...a refund.” This is the same statutory
ground upon which we ordered similar refunds in Bakst. In that case, we
concluded that refunds were proper because of the Assessor's use of
unconstitutional methods for assessing property values. Bakst, 122 Nev.
at 1416-17, 148 P.3d at 726; see also State, Bd, of Equalization v. Barta.
124 Nev. 612, 628, 188 P.3d 1092, 1103 (2008). Here, under NRS
360.2935, the Treasurer has a duty to refund the excess taxes paid during

our stay of the County Board’s equalization decision. Once we decided
Bakst and the stay was lifted, the only means of placing the Taxpayers in

 

 
   
 
 
  
    
 
 
 
   
     

the position they would have been in absent the stay is by refunding the
excess amounts paid.®

Accordingly, because the Taxpayers’ requested refund is not
barred by their failure to comply with any particular statutory scheme and
the Treasurer had a duty to refund, we affirm the district court's order

granting the Taxpayers’ petition for a writ of mandamus,”°

Hardesty \

 

 

Parraguirre

"The Treasurer also argues that he should not have to issue refunds
because: (1) NRS 249.020 and 249.130, which outline some of the general
duties of his sworn office, preclude issuing refunds; and (2) the refund
provisions in NRS 854,220-.250 do not provide a basis for his duty to
refund in this case. We conclude that these arguments are without merit.

whe stay imposed by our February 18, 2010, order is hereby
vacated.