Title: In re Tax Appeal of Narmore v. Kawafuchi, Director of the Department of Taxation, State of Hawaii. Dissenting Opinion by J. Levinson, with whom C.J. Moon joins [pdf].

State: hawaii

Issuer: Hawaii Supreme Court

Document:

‘/e+FOR FUELICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER*##

 

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

‘o00~--

   

IN THE MATTER OF THE TAX APPEAL

    

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SIC kd 62

0%

BOBBY R, NARMORE, Appellant~Appellant
KURT KAWAFUCHI, DIRECTOR OF THE DEPARTMENT OF TAXATION,
STATE OF HAWAI'I, Appellee-Appellee
No. 26812

APPEAL FROM THE TAX APPEAL COURT
(TAX APPEAL NO. 02-0066)

SEPTEMBER 29, 2006

NAKAYAMA, ACOBA, AND DUFFY, JJ.; AND LEVINSON, J.,
DISSENTING, WITH WHOM MOON, C.J., JOINS

OPINION OF THE COURT BY ACOBA, J.

We hold that (1) Hawai'i Revised Statutes (HRS) § 232-

17 (2001) and Rules of the Tax Appeal Court of the State of

*  nawai'l Revised Statutes (HRS) § 232-17 (2001), entitled “Appeals
from boards of review to tax appeal court,” provides in relevant part:

 

adninistrative body established by county ordinance, by the
‘filina. by the taxpaver, the comity. of the tax assessor, of
2 ‘the office of the tax soped)

She state beard of review or equivalent administrative
Badd, ond, in the case of any appealing taxpayer, the
Paynent of the costs of court inthe amount’ fixed by section

252-22.

 

seezecr" ode incase of an
Ss Snvsiving a county se @cartv, with th
Eounty clack. ‘he appeal shall bring up for
Getermination li questions of fact end all questions of

 

(coniued.)

oan
 

‘s*+FOR PUBLICATION IN WEST’ § HAWAI'T REPORTS AND PACIFIC REPORTER:

Hawai'i (RTAC) Rule 2(a),? requiring Appellant-Appellant Bobby R.
Nazmore (Narmore) to serve a copy of his “Notice of Appeal to Tax
Rppeal Court” on Appellee-Appellee Kurt Kawafuchi, Director of

the Department of Taxation, State of Hawai'i (the Department), is

not jurisdictional and, hence, failure to comply with such

*(-contined)
‘law, including constitutional questions involved in the
appeal.

 

Anappen)_ahali be deemed to have been taken in tine
< the notice thersof-snd-coste, if anv, and the copy or
‘copies of the notice shall have been denosited in the malls
bortace prevtig, properly addressea to the tax appeal court,

iax_osseasor, tanpaver of taxpavers. and countu.
enpect ively. within the period provided by This section,

(Emphases added.)

 

2 Rules of the Tax Appeal Court of the State of Hawat"l Rule 2(a),
entitled “appeals,” states in relevant part:

(a) Filing. An appeal shall be initiated by filing
with the clerk of the Tax Appeal Court a written notice of
Gppeal and, in the case of # taxpayer, paying the costs of
court a3 prescribed in HRS, ‘Section 232-22. The appellant

 

 

Eections Ziz-1e and 2-12. not later than the ante raed
(au for the tatine of the sopeal.---- The-notice shall be
‘filed either by personally delivering or making Isiel is to.
‘ihe clerk of the Tax Apeeal Court, The notice shall be

condidered filed wh z

Sourt, ot it nailed, cronerly addressed to such court ond
ith sdequste costage paid. on the postaaried date... =
‘The_conv of the notice to the assessor, taxpayer, and

say be filed hy i

ia} ie’the spose) ie from the decision of a board of
review the notice must he filed within 0 dave after the
‘iina‘of such decision.

of these rules, the action shall be
treated and disposition made thercof in the same manner as
appeals fron an assessment of taxes:

‘An appeal to the Suprene Court and the Intermediate
court of Appeals from eny decision of the Tex Appeal Court
in these actions must be filed within 30 days after the
fling of such decision.

For puipes

    

 

 

(Emphases added.)
 

}FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER!

 

 

Language did not deprive the Tax Appeal Court (the tax court)? of
Jurisdiction to hear Narmore’s appeal, inasmuch as (a) under the
plain and unambiguous language of HRS § 232-17, it is the filing
of the “Notice of Appeal to Tax Appeal Court” with the tax court,
and not the filing of a copy of the “Notice of Appeal to Tax
Appeal Court” with the “assessor” Department,‘ that initiates a
tax appeal and (b) this court will not presume that the
Legislature erroneously neglected to include language that would
make service jurisdictional, and (2) Namore was not prejudiced
by the Department’s failure to provide him with a certified copy
of the “Decision{s}” filed by the Board of Review for the First

Taxation District (the Board) ai

 

required by HRS § 232-7 (2001).*

 

> The Honorable Gary W.B. Chang presided
+ the parties appear to agree that Appellee-Appellee Kurt Kawafuchs,
Dixector of the Departeant of Taxation, State of Hawai'i (the Department) 1s
the “assessor” for purposes of HRS § 252-17 inasmuch as the Department argued
in its Janvary 9, 2003 "Motion to Dismiss,” and March 7, 2003 “Supplenental
Hesorandun in Support of Motion to Sienias,” that Appeliant-appellant Bobby R.
Narnore (Narnore) had not properly served 2 copy of his "Notice of Appeal to
‘Tax Appeal Court” with the Cepsrtment, and, in Ais January 24, 2003
Swenorandum in Oppesiticn to the (Department's) Motion to Dismiss,” Narmore
apologized to the Department for not personally serving his "Notice of Appe:
to Tax Appeal Court” on it. Further, as mentioned infrs, the Department
argues on sppeal that the Tax Appeal Court (the tax court) lacked subject
matter jurisdiction to review Narmore’s appeal inasmuch as the Department did
Rot assess Naznore for the 1969 tax year. The parties likewise appear to
‘agree that the Depertnent is the assessor for purposes of RIAC Rule 2(8)-

 

 

   

 

+ uns § 232-7 (2001), entétled “Boards of review; duties, powers,

procedure before,” provides in’ pertinent part:

(2) The board of review for each district shall hear
informally 11 disputes between the assessor and any
taxpayer in all cases in which appeals have been duly taken
ana the fact that a notice of appeal has been duly filed by
2 taxpayer shall be conclusive evidence of the existence of
42 cispote; provided thet this provision shall not be
Construed to permit a texpayer to dispute an assessment to
the extent thst it is in accordance with the taxpayer’ &

 

 

(continued)
‘+470R PUBLICATION IN WEST'S HAWAI'T REPORTS 280 PACIFIC REFORTER‘**
Accordingly, the tax court's July 8, 2004 “Order Granting
[Department's] Motion to Dismiss Filed on January 9, 2003” and
July 8, 200 final judgment in favor of the Department and
against Narmore are vacated and this case is remanded to the tax
court for further proceedings consistent with this opinion.
1

At sone point in early 1983, Narnore brought his 1984,
1985, 1986, 1967, 1988, and 1998 federal incone tax forms, as
well as other tax information to the Department for an audit for
the purpose of determining if he owed any additional excise tax.

This wi

 

done in conjunction with the Department's “Non-Filer
Program." Narnore reviewed his tax forms and information with a
Department enployee and then left them with the Department for
further review. Narnore asserts that after the Department
finished an “audit” of his forms and information, they were
returned to him and he was assessed no taxes, penalties or
interest, but was informed that the Department would contact hin

later if necessary.

*contimaed) ,

lic} Gné board shall base its decision on the evidence
before it, and, as provided in section 231-20, the.
assessment made by the assessor shall be deened prina facie
Correct, the Boafd shall file with the asressor concerned
Sts decieson in writing on each appeal decided by it, anda
Kertified copy of the decision shall be furnished by’ the

 

 

ihe copy_addressed to the taxcaver's Tast know place of
feridence:

(Emphasis added.)

‘The record does not provide a description of the “Non-Filer
Progran.”
‘sefOR FUELICATION IN WEST'S HANAI'T REPORTS AND PACIFIC REPORTERS#®

on October 24, 1996, Narmore received a notice from the

Department’ s Oahu Collection Branch, Collection Division (the
collection division) informing him that he had a current account
balance of $12,872.53 and that he had not filed several “General
Excise” and “Net Income Individual” tax returns. The notice
requested that, by Novenber 4, 1996, Narnore provide a “statement
of Financial Condition and Other Information” and all tax returns
that he had not filed. One of the tax returns requested was
Narmore’ s “Annual Return” for 1989.

Narmore asserts that he reninded the Department that he
had furnished tax information in 1993, an “audit” was conducted,
and he was not assessed any taxes for 1989, He further maintains
that two Department audit supervisors informed him that there was
no record that they had received his documents in 1993, but that
a third employee “confessed” to reviewing the documents in 1993
and stated that the information was in the Audit Division.

At some time in December of 1996, Narmore submitted his
“annual Return Reconciliation General Excise/Use Tax Return for
Calendar Year 1989” (first 1989 tax return). Although the first
1989 tax return in the record is not legible, the parties agree
that it was signed by Narnore and dated December 17, 1996. They
also agree that pursuant to the first 1989 tax return, Narmore
owed $12,179.93. At this time, Narmore also remitted a
$13,000.00 check, dated December 16, 1996, to the Department for

payment of his taxes.
 

[FOR FUSLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER*#*

The parties, however, disagree on the circunstances
surrounding the creation of an additional “Annual Return
Reconciliation General Excise/Use Tax Return for Calendar Year
1989" (second 1989 tax return). The second 1989 tax return
contains Narmore’s signature, is dated Decenber 17, 1996, is date
stanped “Received” on December 16, 1996, and reflects an amount
due of $5,365.92. Narmore asserts that the second 1989 tax
return was purportedly “drastically forged” by the Department:

sturn] to (the second
Department had

 

tthe amount of taxes, deleted the penalty and interest
cniries; date-stanped [the second 1989 tax return) 16
Becenber 1996) and thereafter, repeatedly testified under
Seth that Narmore had filed (the first 1989 tax return] on
$C decenber 1996, that the ancunt of taxes was 55,365.52,
that thie amount as paid on 16 Decenber 1996, and the
Depertrent had waived the penalty and interest on 16
Decenber 1996.

 

 

‘The Department, on the other hand, denies that the second 1989
tax return was forged, and instead contends that “(alt the time
[Narmore] submitted his 1989 general excise annual return in
1996, (Nermore] owed $12,179.93; however, the Department waived
penalties and interest, reducing the tax amount due to
95,365.92," so that the Department made the appropriate
amendnent.?

Either in late Decenber of 1996 or early January of

1997, Narmoze verbally notified the Department that he intended

 

7 although not explicitly stated, it would appear that the

Department concedes that it altered the original "Annual Return Reconciliation
General Excise/Use Tax Return for Calendar Year 1989" filed by Narnore for the
porpose of elininating the penalties and interest that Narmore would owe the
Department.
‘s+4FOR PUBLICATION IN MEST’ S HAWAI'I REPORTS AND PACIFIC REPORTER*##

 

to file an appeal with the Board. On January 7, 1997, the
Department processed the second 1989 tax return and posted a
payment of $5,365.92 to Narmore’s general excise tax liability
for 1989. The balance of Narmore’s $13,000 payment, made by
check dated December 16, 1996, was applied to other outstanding
tax liabilities.

on January 17, 1997, Narmore wrote to the Department
stating that, because the statute of Limitations provided in HRS
§ 237-40 (2001) had expired, he could not be deemed to ove
additional taxes for the 1989 tax year. He also requested the
necessary forms to appeal to the Board. In a letter dated
February 26, 1997, the Department responded that inasmuch as a
return was not filed until December 16, 1996 for the 1989 tax
year, the statute of limitations had not run, The February 26,
1997 letter stated that Narmore’s additional liability was
$5,365.92."

1.
on or about March 17, 1997, Nazmore appealed to the

Board. In his “Notice of Appeal,” Narmore made an “objection to

 

+ uns § 237-40 (2001), entitied “Limitation period,” provides in

felevant part:

(2) General rule, ‘The amount of excise taxes imposed
by this chapter shall be assessed or levied within three
years after the annual return was filed, of within three

's of the due date prescribed for the filing of sai
Feturn, whichever is 1
without Seeessment for
shall be begun after the

 

 

 

  

* the cepartnent provided the necessary appellate forms Narmore

requested and s copy of HRS’ § 237-40.
‘seefOR PUBLICATION IN WEST! § HAKAY'T REPORTS AND PACIFIC REPORTERS

 

the assessment” of $12,179.93 for the 1989 tax year. Narmore
asserted that he had delivered tax forms and information to the
Department in 1993, that the Department had reviewed his tax
forms and information, but not completed his tax return for the
1989 tax year, and that if he had known that the Department was
not going to complete the tax return, he vould have completed it
himself. In a letter to the Board dated April 13, 2002, the
Department asserted that (1) the statute of limitations provided
in HRS § 237-40(a) did not begin to run until Decenber 16, 1996
when Narmore filed the second 1989 tax return, (2) Narmore failed
to file an annual return, as required by HRS § 237-33 (2001)"*
until December 16, 1996, (3) the tax forms and information
Narmore provided to the Department in 1993 did not constitute

filing a return,

 

) Warmore was aware or should have been avare
of the statute of limitations under HRS § 237-40(a), and (5)
Narmore was not aggrieved by an assessment of taxes inasmuch as
the taxes he paid were in accordance with the second 1969 tax

return.

© gas § 237-33 (2001), entitied “Annual return, payment of tax,”
in relevant part

 

fon oF before the twentieth day of the fourth month
following the close of the taxable year, each taxpayer shal
rake a return showing the valve of products, gross proceeds
Of sales or gross income, and compute the amount of tax
chargeable against the taxpayer in accordance with this
chapter and deduct the ancunt of monthiy payments (as
hereinbefore provided), and transmit with the taxpayer's
report a renittance in the form required by section 237-31
Covering the resiase of the tax chargesble against the
Coxpayer to the district office of the depertnent of
tenation hereinafter designates.

 

 

 
‘s*4FOR PUBLICATION IN WEST'S HAWAI'I REEORTS AND PACIFIC REFORTERE+#

Narmore’s appeal was heard by the Board on August 1,
2002." That same day, the Board rendered its “Decision,”
finding in favor of the Department in the amount of $5,365.00.
‘The August 1, 2002 “Decision did not indicate the basis of the
Board’s determination. At the bottom of the “Decision” form was
a notation advising Narmore of the procedure he should comply
with if he disagreed with the Board's decision, stating as
follows:

If you disagree with the Board's Decision, you nai
appeal to the Tax Appeal Court within thirty days after the
Gste the Decision was filed, the Tax Assessor may eso
peal. If you should decide to appeal the Decision to the
Tex Appeal court, ‘the appeal must be made in writing and
comply with the requirements prescribed in (HRS § 232-17
(2001), and the Rules of the fax Appeal Court.

 

 

 

 

  

The August 1, 2002 “Decision” was sent to Nazmore vie certified
mail on August 21, 2002, Narmore’s wife received and signed for
the August 1, 2002 “Decision” on August 23, 2002. On or about
August 23, 2002, Nexmore infozmed the Department that he required
more time to consult with an attorney regarding an appeal to the
tax court. The Board, therefore, refiled its August 1, 2002
“Decision” on August 28, 2002, thus providing Narmore an
additional thirty days to file his appeal. The August 28, 2002
“Decision” indicated that it was based on a determination that
“[t]he evidence demonstrates that the assessment is proper and
valid.” The August 28, 2002 “Decision” was also sent to Narmore
via certified mail. Narmore received and signed for the August

28, 2002 “Decision” on September 9, 2002.

the record does not contain

 

ranscript of this hearing.

°
‘s+ef0R PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTERS

 

mt.
a

on Septeber 26, 2002, Narmore filed his “Notice of
Appeal to Tax Appeal Court” in the tax court. Therein, he
clained the anount of tax in controversy was $12,179.93 plus
accumulated interest from Deconber 16, 1996 and asserted that he
had paid the tax under protest. He reiterated his previous
argunent that the Departnent was barred by the statute of
Limitations from collecting excise taxes from him for the 1989
tax year insofar as he had provided tax forms and information to
the Department in 1993, Narmore asserted that although the
Department claimed to have waived penalties and interest for the
1989 tax year, it had made many attempts to collect them. He

requested that $12,179.93 plus accumulated interest from Decenber

 

16, 1996 be awarded to him
on January 9, 2003, the Department filed its “Motion to
Dismiss.” Therein, the Department contended that (1) the tax
court lacked Jurisdiction to review Narnore’s appeal inasmuch as
(a) Narnore was not aggrieved by an assessment of taxes,
(b) Narnore did not pay his excise tax for the 1989 tax year
under protest, and (c) the Department had not issued an adverse
ruling against Nazmore for the 1989 tax year, (2) the tax court
lacked subject matter jurisdiction pursuant to HRS § 232-17 and
RIAC Rule 2(a) because he did not file a notice of his appeal

with the Department, and (3) Narmore’s appeal should be dismissed

10
e+F0R PUBLICATION IN WEST'S HANAI'E REFORTS AND PACIFIC REFORTER'"

 

for failure to state @ claim upon which relief may be granted
insofar as (a) he provided no legal basis to justify an award of
$12,179.93 when he only paid $5,365.92, and (b) the Department
was not barred from collecting Narmore’s excise tax for the 1969
tax year because the statute of limitations provided for in HRS §
237-40 did not begin to run until Narmore filed his tax return on
December 17, 1996. A declaration of Jill Yamasaki (Yamasaki)
dated January 9, 2003 was attached to the Department’s “Motion to
Dismiss.” Yamasaki listed her title as the “Oahu Office Audit

Branch Chief of the Department of Taxation, State of Hawaii.”

 

She stated that, on behalf of the Department, she was authorized
to accept service of a copy of the "Notice of Appeal to Tax

Appeal Court,” which taxpayers would have previously filed with
the tax court, Yamasaki declared that Narnore had not properly

served his “Notice of Appeal to Tax Appeal Court” on the

 

Department after filing it with the tax court, and that it was
not until a later date that the Department learned of his appeal:

(20) On oF about October 4, 2002, the Department
discovered that [Naraore] filed a Notice of Appeal to the
‘Tax Appeal Court when the clerk of the Tax Appeal Court,
Served Notice of Entry of Notice of Appeal to Tax Appeal
Court on the Departaent. At that tine, the Oepartnent. had
hot been personally served with a filed stamped copy of the
Notice of Appeal to the Tax Appeal Court from (Narmore)

(31) fo the date of this Declaration, the Department
has not received a filed stamped copy of the Notice of
Appeal from [Narmore] to provide notice for the basis of his
appeal.

 

on January 24, 2003, Narmore filed his “Memorandum in
Opposition to the (Department's) Motion to Dismiss.” Therein,

Narmore, inter alia, apologized to the Department for not

a
‘s+4FOR PUBLICATION IN MEST’S HAWAI'I REPORTS AND PACIFIC REPORTERS*®

personally serving his “Notice of Appeal to Tex Appeal Court,”
stated that tax court personnel told him they would submit a copy
for him, and reiterated his statute of limitations argument.”

on January 29, 2003, the Department filed its “Reply to
(arnore’ s] Memorandum in Opposition to the (Department's) Motion
to Dismiss.” The Departnent asserted that Narmore’s “Menorandun
in Opposition to the [Department's] Motion to Dismiss” did not

contain any legal arguments to contest the assertions made in the

 

Department’s “Notion to Dismiss.” The Department also

addressed Narmore’s assertion that the second 1989 tax return was
“drastically forged” and maintained that any alterations made

were irrelevant and readily explained."*

2 Narmore requested that (1) the “Motion to Oiemise” be denied, (2)
the tax court sake a deternination that the statute of limitations had funy
(G) $12,179.52 plus interest accruing from Decesber 16, 1996 be refunded £0
him, and (4) “the parte of this case pertaining to covertly concealed
documents and forged annual returns be referred to the state attorney general
for action.”

 

 

© specifically, the Department maintained that Narmore had failed to
provide any legal argusent conferring subject matter Jurisdiction on the tax
Court when the requirenents of HRS § 232-17 and RIAC Rule 2(s) had not been
complied with of as to why providing the Department with tax forme and
Internation in 1993 would rise to the level of filing # tex ceturn and, thus
begin the tolling of the statute of limitations pursuant to HRS § 237-40,

 

 

“Regarding Narmore's allegation that the second 1989 tax return mas

“drastically forged,” the Department stated!

   

As a side note, [Narnore] has alleged that the {second
1589 tax return] ‘thst vas submitted to [the tax court] was
“drastically forged.” “However, this allegstion is not
relevant to whether this case should (be) dismissed based on
the argunents presented in the (Departrent'e] Notion to
Disaiss and should not be considered by [the tax court) ~
The (second 1989 tax return] submitted co the (tax court)
os certified by the Department as 8 copy of the return that
i"currently sn the Department’ « records

‘Upen feview of the docunente(,) the alterations that
(Narmore) claims do not rise te the level of a forgery
Each of the alteration (sic) can be reasonably explained,

(coniaued.)

 

12
 

FOR PUBLICATION IN WEST’S HAWAI'I REPORTS AND PACIFIC REPORTERS+®

 

on January 30, 2003, Narmore filed an amendment to his
January 24, 2003 “Memorandum in Opposition to the [Department’ s]
Notion to Dismiss.” He requested that @ paragraph be added
stating that he had not been provided a certified copy of the
Board's “Decision” as required by HRS § 232-7 and, without this
certified copy, a taxpayer could not be assured that the Board's
“Decision” had not been modified.

On February 3, 2003, Narmore filed his “Reply
Memorandum to the [Department's] Reply Memorandum, 29 Jan 03.”
‘Therein, he contended that the Department had not provided him a
certified copy of the decision of the Board as required by. HRS

§ 232-7 and that “without this certified copy of the decision,

 

‘the appeal process might not be started” inasmuch as a taxpayer

might feel that a change to the decision could still be mad

 

Narmore also maintained that the tax court having provided the
“Notice of Appeal to Tax Appeal Court” to the Department should
satisfy the requirements of HRS § 232-17 and RTAC Rule 2(a).

B.

‘The tax court held @ hearing on the Department’s

 

.s indicated in the [Department’®] Hotion to
the’ elimination of the interest and penalties,
flected the [Department's] waiver of these ancunts.

ond, the reduction in the amount of taxes, reflects the
adjusthent made by the Department to correct calculation
errors. Lastly, there was no change to the date of the
return, it still indicates a date of December 17, 1996, The
only. sten that reflects a date cf becenber 16, 2996 was
sie} the date stanp of the Department, which’ does not in
any way alter the information contained in the return.

   

   

  

 

(Footnote omitted.)

13
   

}FOR PUBLICATION IN WEST’ S HAWAI'T REPORTS AND PACIFIC REPORTER*

 

“Motion to Dismiss” on February 3, 2003. Supplemental briefing
was requested by the tax court from the Department regarding the
requirements for perfection of Narmore's appeal, the defects in
the perfection of the appeal, and the applicability of equitable
tolling for the time period in which Narnore was to file his
SWotice of Appeal to Tax Appeal Court” with the Department. The
hearing was orally continued until March 17, 2003."

on February 27, 2003, Narmore filed his “Motion to
Approve Taxpayer's Appeal Without Further Trial.” Therein,
Narmore essentially argued that because of the “approximately
twenty to twenty-five perjured, false swearing in official

matters, false sw

 

ring, unsworn falsification to authorities,
and inconsistent statenents” made in the instant case related to
the 1989 tax year, he could not get @ fair hearing before the
Board.

on March 7, 2003, the Department filed its
“supplemental Memorandum in Support of Motion to Dismiss.” The
Department asserted that, while irrelevant to the tax court's
jurisdiction, the Department provided the Board’ s original
decision to Narmore via certified mail to Narnore, so it could

not have prevented him from fulfilling the filing requirements of

 

“eguitable tolling” is defined as
of Limitations will not bar 2 clain if the plaintiff, despite diligent
Sigorts, cid not discover the injury until after the linitations period had
expired.” Black's Law Dictionary $79 (eth ed. 2004).

On February 4, 2003, the tax court issued a written “Notice of
Further Hearing” informing both’ parties that the hearing on the "Notion to
Dismiss” wes continued to March 17, 2003.

(e)he doctrine that the statute

 

   

 

“4
 

FOR PUBLICATION IN WEST’ S HAWAI'T REPORTS AND PACIFIC REPORTER

 

 

RS § 232-17 and RTAC Role 2(a). The Department maintained that,
despite receiving additional tine to appeal due to the refiling
of the August 1, 2002 “pecision,” Nasmore failed to properly file
a copy of his “Notice of Appeal to Tax Appeal Court” with the
Department, thus depriving the tax court of jurisdiction to hear
his oppeal. It was asserted that equitable tolling shovld not
apply to suspend the tine for Narmore to file his “Notice of
Appeal to Tax Appeal Court” with the Department inasmuch as the
Department had not acted in any vay to prevent him from filing
and applying equitable tolling would disadvantage the Department
insofar as Narnore had already had “anple time” to file.

Also on March 7, 2003, the Department filed its
“Memorandum in Response to (Narmore’s} Motion to Approve
Taxpayer's Appeal Without Further Trial Filed February 27, 2003."
the Department requested that Narmore’s “Motion to Approve
Taxpayer's Appeal Without Further Trial” be continued to another
date to allow the tax court time to determine whether it has
subject matter jurisdiction over his appeal.”

Additionally on March 7, 2003, Nazmore filed his “Reply
to [Department's] Reply (29 Jan 03) to (Nernore’s} Menorendum Sn
opposition to the [Depatnent’s] Notion to Dismiss.” Narnore
asserted that while his status as a pro se litigant does not
exenpt hin from the requixenents of HRS § 292-17 and RTAC Rule

the Departnent asserted that Maragrets *Hotion to Approve
oxpayes's appeal itheut further felols mor Sinconerencsinconptshenstbie,

‘ana 1s not supported by the legal authorities cited, nor was any adaiseible
evidence provided to support the motion.”

 

1s
 

‘S+4FOR PUBLICATION IN WEST’ § HAWAI'I REPORTS AND PACIFIC REPORTER:

 

2 (a), the tax court could consider that status. Narmore argued
that a copy of his “Notice of Appeal to Tax Appeal Court” was
placed in the courier’s box at the Tax Appeal Court to be
delivered to the Office Of the Attorney General so “it appears no
irreparable harm has been done to the appeal process."

on March 12, 2003, the Department filed its “Response
to (Narnore’s) Reply Memorandum to the [Department's] Reply
Memorandum (29 Jan 03) to (Narmore’s) Memorandum in Opposition to
the [Department’s) Motion to Dismiss Filed March 7, 2003.” The
Department reiterated its arguments that the tax court lacked
jurisdiction to hear Narnore’s appeal, argued that strict
compliance with HRS § 232-17 and RTAC Rule 2(a) is required, and
maintained that whether or not “irreparable harm has been done to
the appeal process” is irrelevant to the tax court's
jurisdiction."

c

The tax court held a hearing on the Departnent’s
January 9, 2003 “Motion to Dismiss” and Narmore's February 27,
2003 “Motion to Approve Taxpayer's Appeal Without Further Trial”

on March 17, 2003. The tax court informed the parties that a

*  Nernore reitersted that he did not receive a certified copy of the
Board's August 1, 2002 oF August 28, 2002 “Decision{s]” and his statute of
Limitations argument

 — Aetached to thie docunent was another “Declaration of (Yanasaki],”
which stated that ae Of the date of the deciaration, March 12, 2003, Narmore
hed not filed « copy of his “Notice of Appeal to Tax Appeal Court” with the
Department.

 

16
‘*+FOR PUBLICATION IN WEST'S HAMAT'T REPORTS AND PACIFIC REPORTERS

 

 

decision vould be issued in two weeks.”

on October 22, 2003, Narmore filed a letter dated
October 16, 2003 with the tax court addressed to counsel for the
Department. The letter was intended to inform the Department's
counsel that Narmore was submitting additional information to the
tax court. In this letter, Narmore asserted that although HRS §
232-7 does not specify a time period in which a certified copy of
the Board’s decision must be provided to the taxpayer, it must be
provided at some point, and was not in the instant case. He
stated that the Department publishes “Tax Information Releases”
(TIRs) to assist taxpayers and that several of them do not:
indicate that a copy of the “Notice of Appeal to Tax Appeal
Court” must be delivered to the tax assessor. Finally, Narmore
pointed out that the August 1, 2002 and August 28, 2002
“Decision(s]" were not identical inasmuch as the August 1, 2002
“Decision” did not reflect the reasons for the Board's
determination.

D,

on May 26, 2004, the tax court conducted a hearing in
which it orally granted the Department's “Motion to Dismiss.” On
May 27, 2004, Nazmoze sent a letter to the tax court requesting

* on march 24, 2003, Narmore sent a settlenent offer to counsel for

the Department. On June 2, 2003, Narmore sent snother letter to counsel for
the Departnent inguiring as to the status of a settlement, By letter dated
June 10," 2003, the Department apologized for the delay in respon:

Felected Narnore’s settiement offer. On August 11, 2003, Narmore responded to
the Department's June 10, 2003 rejection letter and asserted, inter glia, that
he waa ot owed an apology, but expressed Ms frustration with the
Department's actions.

 

 
      

 

vv
‘++FOR PUBLICATION IN WEST! 8 HANAI'T REFORTS AND PACIFIC REPORTERS

that it reverse its May 26, 2004 oral granting of the
Department's “Motion to Dismiss.” Narmore stated that it was his
understanding that his October 16, 2003 letter had not been made
available to the tax court and provided a copy. He also
expressed his “sincere belie[f] that the legislative requirenents
(and prior case law) dictate” that the time for filing an appeal
to the tax appeal court does not begin until that party is served
with a certified copy of the Board’s “Decision” and that
“[albeen(t] satisfaction of this requirement, it seems all
subsequent actions would become moot as far as jurisdiction is
concerned.” Narmore did not provide any case law or statutory
support for this assertion. On the first page of Narnore’s May
27, 2004 letter there is a notation dated June 14, 2004, stating,
“Judge to take as a non-hearing motion for reconsideration.”
e

On June 3, 2004, Narmore filed a letter dated June 2,
2004 and addressed to counsel for the Department with the tax
court. Narnore requested that counsel for the Department inform

ertion in Narmore’s

 

the tax court of his opinion regarding the
May 27, 2004 letter that receipt of a certified copy of the
Board's “Decision” “must be an integral part of the appeal
process.” Narmore also stated that he was requesting that the
tax court modify its May 26, 2004 order to indicate its
reasoning. the first page of this letter also contained a

notation dated June 14, 2004, stating, “Judge to take as a non-

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‘#4FOR PUBLICATION IN MEST’S HAWAI'I REPORTS AND PACIFIC REPORTER

hearing motion for reconsideration.”
On June 10, 2004, the Department filed its "Memorandum
in Opposition to (Narmore’s] Motion for Reconsideration (May 27,
2004 Letter Addressed to the Honorable Gary W.B, Chang Filed on
May 28, 2004)." Therein, the Department argued that (1) Narmore
did not show any exceptional circumstances to cause the tax court
to grant relief from its order pursuant to Havai'i Rules of Civil
Procedure (HRCP) Rule 60(b)," (2) Narmore’s arguments had
already been heard and addressed by the tax court or should have
been raised prior to its decision so relief could not be granted

Pursuant to HRCP Rule 59(e), and (3) Narmore’s assertions were

 

irrelevant and without merit inasmuch as (a) he provided no legal
basis for his assertion that the mailing of a certified copy of

the Board’s “Decision” is an integral part of the appeal process,

 

» Hawai'i Rules of Civil Procedure (HRCP) Rule 60, entitled “Relic
fron judgment or order,” provides in relevant part:

(b) Mistakes; inadvertence; excusable neglect newly
discovered evicences fraud, ete. On notion and spon such

3 a5 are just, the court may relieve a party oF @
party's legal representative from s final judgment, order,
‘or proceeding for the fellowing reasons: (2) mistake,
Anadvertence, surprise, or excusable neglect; (2) newly
Giscovered evicence vnich by due diligence could not have
been discovered in tine to nove for a new trial under Role
59(b); (3) fraud (whether heretofore denominated intrinsic
or extrinsic), misrepresentetion, or other misconduct of en
adverse party! (4) the judgeent is void; (8) the judgnent
has been satisfied, releases, or discharged, of a prior
judgment upon which it is based has been reversed oF
Otherwise vacated, or it is no longer equitable thet the
judgment should have prospective application’ or (6) any.
other reason Justifying relief from the operation of the
Sussment

 

 

 

 

 

 

 

 

 

 

HRCP Rule 61(b) (6) Lists “[a]ctions for the collection of taxes” as
Proceedings to which the rules epply.

= HRC Rule 59(e) states that “[alay motion to alter or amend «
Jusonent shell be filed no leter than 10 days after entry of the judgment.”

a8

 
‘s++FOR PUBLICATION IN WEST’ S HANAI'T REPORTS AND PACIFIC REPORTERS*#

 

and (b) the TIRs Narnore referred to pertained to an appeal from
a tax assessment by the Department, not a “Decision” by the
Board.

on dune 22, 2004, Narnore submitted his “Reply to the
[Departnent’s] 10 Jun(e) 2004 Memorandum in Opposition to
(Narmore’s] Motion for Reconsideration (May 27, 2004 Letter
Addressed to the Honorable Gary W.B. Chang Filed on May 28,
2004). Narmore asserted that he did in fact show exceptional
circumstances warranting relief under HRCP 60(b). Narmore did

not specify which section of HRCP Rule 60(b) he w

 

referring to,
nor did he specify the exceptional circumstances. Narmore.
contended that the court did not consider his October 16, 2003
letter prior to its decision, thus allowing for relief under HRCP
Rule 59(e).”

on uly 7, 2004, the tax court held a h

 

ring on
Nazmore’s non-hearing motions for reconsideration. The tax court

denied Narmore’s motions, indicating that “the [tax court] is

1 unable to cor jourt’s)_sub:
jurisdiction was properly invoked in the case at bar.”

(Emphasis added.) On July @, 2004, the tax court entered its
“order Granting [Department's] Motion to Dismiss Filed on January

9, 2003” and its final judgment in favor of the Department and

 

> te also reiterated his arguuents regarding a certified copy of the
Board's “Decision” not having been provided to aim and the applicability of
the guidance found in the TIRs.

Me observe that this statenent was contained in the court's minute
order but the parties do not dispute it

 

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‘*4POR PUBLICATION IN WEST’ HAWAI'T REPORTS AND PACIFIC REPORTER

 

against Narmore. On August 10, 2004, the tax court entered its
“order Denying [Narmore’s] Motion for Reconsideration (May 27,
2004 Letter Addressed to The Honorable Gary W.B. Chang Filed on
May 28, 2004).”

On September 7, 2004, Narmore filed his “Appeal to the
Suprene Court, State of Hewaii, from the Minute Order of the (Tax
Court], 26 May 2004, as Extended by Motion for Reconsideration to
10 [August] 2004.”

wv.

on appeal, Narmore asserts that (1) “the [tax court]
erred when it granted [the Department’s] motion to dismiss
because the Department failed to offer sufficient evidence” that
Narmore (a) “had no standing to challenge the amount reflected in
his 1989 general excise tax return,” and (b) “failed to state a
claim upon which relief could be granted,” (2) “the [tax court]
erred in not granting (Narmore’s] request to approve his appeal
because the Department failed to provide sufficient evidence that
a certified copy of the ["Decision”] of the [Board] must be
furnished to him as required by HRS § 232-7," and (3) “the [tax
court] erred by granting [the Department's] motion to dismiss
because the Department failed to provide sufficient evidence that
(Narmore’s} failure to provide a copy of the notice of appeal to

[the Department] was serious enough to dismiss the case,”

* re appears from the argunent accompanying this statement that

Narmore contends that the Departnent failed to provice him a copy of
“Decision(e]" of the Beard of Review for the First Taxation District and that
this failure prejudiced him.

 

a1
 

/FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER*

 

 

inasmuch as (a) the Department was notified of Narmore’s appeal
by the tax court, and (b) TIRs issued by the Department do not
indicate that @ copy of the “Notice of Appeal to the Tax Appeal
Court” must be provided to the Department. Narmore requests
either that this court hear his appeal or that the instant case
be remanded to the tax court for “trial on its merits.”

In response, the Department contends that (1) “the
statute of limitations does not bar assessment or collection of
the 1989 excise taxes,” inasmuch as (a) “only the filing of a
return triggers the statute of limitations for the assessment or
collection of taxes,” and (b) “under federal law, the filing of a
return also triggers the running of the statute of limitations
for assessments,” (2) “the Department did not forge [Narmore’s]
1989 return nor did it commit fraud when it waived [Narmore’s]
penalties and interest,” (3) “the [tax court] lacked subject
matter jurisdiction to review [Narmore’s] tax appeal,” insofar as
(a) “the [Department] did not assess [Narmore],” (b) “{Narmore]
did not pay his 1989 taxes under protest and{,] therefore,

(Warmore’s) appeal is not a complaint for refund,” (c) “the:

 

Ro adverse ruling by the [Department] against [Narmore],”

(d) “{Narmore] failed to perfect his tax appeal as the law
required to confer jurisdiction,” inasmuch as Narmore failed to
comply with the mandatory requirements of HRS § 232-17 and RTAC
Rule 2(a) within the time specified therein, (4) “[Nazmore]

failed to state a claim upon which relief may be granted” because

22
‘*++FOR PUBLICATION IN WEST'S HAMAI'I REFORTS AND PACIFIC REPORTER'S#

 

he “does not provide any legal basis, arguments, or reasoning to
justity an avard of $12,179.93 when the Department credited
(Marnore’s] account with $13,000.00 not only for 1989 delinquent
taxes (in the anount of $5,365.96), but for general excise taxes
due from other years as well,” and (5) “the mailing of the
original ["Decision"] to [Narmore] does not affect the dismissal
of the appeal for lack of jurisdiction.”

In reply, Naznore maintains that (1) for audit purposes
and tolling of the statute of limitations, it does not matter
whether Narmore provided only tax forms and information in 1993,
(2) the second 1989 tax return was a forgery due to the

“circumstances in which the penalties and inti

 

st were waived,
and the manner in which (the second 1989 tax return] was foist
upon the (Board), the (tax court), and now, this [cJourt,”

(3) “the Department’s service of the [Board's] original decision
rather than a certified copy interfered with (Narmore’s] ability
to file an appeal to the [tax court],” (4) the Department is
urging this court to add the language “and file a copy of the
notice of appeal in the assessor's office” to HRS § 232-17 and
RTAC Rule 2(a), (5) the Department is presenting “misinformation
and half-truths” regarding taxes owed by Narmore “to recover
monies [1t] no longer (has) a right to,” and (6) to Nazmore “as
an inexperienced pro se, it seems that the most essential statute
is HRS § 232-7, which requires that 2 copy of the decision of the

(Board) be served upon the taxpayer concerned.”

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v.

“*Review of a decision made by a court upon its review
of an administrative decision is a secondary appeal. The
standard of review is one in which this court must determine
whether the court under review was right or wrong in its
decision.’” Lanai Co. v. Land Use Comm'n, 105 Hawai'i 296, 306-
07, 97 P.3d 372, 382-83 (2004) (quoting Soderlund v. Admin
of the Courts, 96 Hawai'i 114, 118, 26 P.3d 1214, 1218 (2001).

vr.

We do not address the Department’s arguments in (3) (a),
(3) (b), and (3) (c) regarding exercise of the tax court's subject
matter jurisdiction based on a tax assessment made by the
Department of Narmore for the 1989 tax year, whether he paid his
1989 taxes under protest, and whether there is an adverse ruling
against him. Although the existence of subject matter
jurisdiction is essentially a question of law, these grounds
asserted by the Department regarding subject matter jurisdiction
depend on facts that have yet to be determined by the tax court

and are disputed by the parties. As to (3) (a) and as discussed

 

previously, Narmore contends that he was assessed for the 1989
tax year in 1993 and a determination was made that he did not ove
any taxes for that year. The Department insists that no
assessment was made. As indicated, for (3) (b), in his Septenber
26, 2002 “Notice of Appeal to Tax Appeal Court,” Narmore

maintained that he had paid the tax for the 1989 tax year under

24
‘s+4F0R PUBLICATION IN MEST’ EAMAI'T REPORTS AND PACIFIC REZORTERIC#

 

Protest. The Department argues in (3) (b) that he did not.
Finally, as to (3) (c), as related previously, on October 24,
1996, Narmore received a notice from the collection division
informing him that he owed 2 balance of $12,672.53 for the 1989
tax year. However, @ determination as to whether this notice was
correct and, therefore, an “adverse ruling,” depends on whether
or not the statute of limitations had run and Narmore could be
assessed for that year, which, as discussed infra, normally
entails questions of fact that must be determined by the tax
court.

vit.

The remaining subject matter jurisdiction ground

 

indicated in (3)(d) and upon which the court apparently disnis:
the case was that “(Narmore] failed to perfect his tax appeal as
the law required to confer jurisdiction” inasmuch as Narnore
failed to comply with the mandatory requirements of HRS § 232-17
and RTAC Rule 2(a) within the time period specified therein.
Thus, as to Narmore’s argument in (1) (a) and (3) (a), the
Department’ s response in (3) (d), and Narmore’s reply argument in
(4), we must determine if the requirement in HRS § 232-17 and
RIAC Rule 2(a) that an appealing taxpayer file a copy of his or
her "Notice of Appeal to Tax Appeal Court” with the assessor is a
Jurisdictional requirenent. If so, the failure to file this copy

would divest the tax court of jurisdiction to hear an appeal and

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‘s*+FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER'*#

thus also divest this court of jurisdiction to hear a secondary
appeal.

Regarding our subject matter jurisdiction over
proceedings, this court has stated that:

‘The existence of jurisdiction is a question of 1aw that this
Court reviews de ova under the right/wrong standard. Tf 8
Sourt lacks jurisdiction over the subject matter of &
Proceeding, any judgnent rendered in that proceeding is
Tnvalig, ‘therefore, such a question is valid at any stage of
the cast

    

Kepo'o v. Kane, 106 Hawai'i 270, 281, 103 P.3d 939, 950 (2005)
(internal quotation marks, citations, and brackets omitted). “A
trial court’s dismissal for lack of subject matter jurisdiction
is a question of law, reviewable de nove.” Norris v. Hawaiian
Airlines, Inc., 74 Haw. 235, 239, 842 P.2d 634, 637 (1992)
(citations omitted).

Furthermore, “[t]he interpretation of a statute is a
question of law. Review is de novo, and the standard of review
is right/wrong.” Sugarman v. Kapy, 104 Hawai'i 119, 123, 85 P.3d
644, 648 (2004) (citations omitted). It is well settled that the

court!

 

primary obligation “is to ascertain and give effect to
the intention of the legislature, which is to be obtained
primarily from the language contained in the statute itself.”
Id, at 123, 85 P,3d at 648 (internal quotation marks, brackets,
and citations omitted). Accordingly, “where the statutory
language is plain and unambiguous, [the appellate court’s] sole
duty is to give effect to its plain and obvious meaning.” State

vs Kalama, 94 Hawai'i 60, 64, 8 P.3d 1224, 1228 (2000) (internal

26
 

‘*9FOR PUBLICATION IN MEST’ S HAMAI'T REPORTS AND PACIFIC REPORTERS!

 

quotation marks and citations omitted). “Departure from the
Literal construction of a statute is justified only if such a
construction yields an absurd and unjust result obviously
inconsistent with the purposes and policies of the statute.”
Leslie v. Bd. of Appeals, 109 Hawai'i 384, 393, 126 P.3d 1071,
1080 (2006) (internal quotation marks and citation omitted).
‘These principles of statutory construction apply to rules
Promulgated for the tax court. See Keaulii v. Simpson, 74 Haw.
417, 421, 847 P.2d 663, 666 (1993) (stating that “(w)hei

 

considering rules promulgated by courts, principles of statutory
construction apply” (citation omitted) ).
viir.

As noted, the first sentence of HRS § 232-17 states
that “{a]n appeal shall lie to the [tax court] from the decision
of a state board of review . . . by the filing, by the taxpayer
+ + + of a written notice of appeal in the office of the tax
appeal court[.]” (Emphasis added). By its terms, this first
sentence is plain and unambiguous. It expressly directs that an
appeal is taken to the tax court “by the filing” of a “written
notice of appeal in. . . the tax appeal court.” See HRS § 232-
17. “File” is defined as “to deliver (as a legal paper or
instrument) after complying with any condition precedent (as the
payment of a fee) to the proper officer for keeping on file or
among the records of his office." Webster's Third New
International Dictionary 649 (1961). No requirement other than

27
 

‘s+4FOR PUBLICATION IN WEST'S HAWAI'I REPORTS 2ND PACIFIC REPORTER*

 

the filing of a written notice in the tax court is designated in
order that “[a]n appeal shall lie to the tax appeal court.” HRS
§ 232-17.

The requirement that a party timely file a notice of
‘appeal has been held to be jurisdictional by this court. see
e.g, Bacon y, Carlin, 68 Haw. 648, 650, 727 P.2d 1127, 1129
(1986) (stating that “an appellant's failure to file a timely
notice of appeal is a jurisdictional defect that can neither be
waived by the parties nor disregarded by the court in the
exercise of judicial discretion”) (internal quotation marks,
brackets, and citation omitted). HRS § 232-17 prescribes that
the filing of the notice of appeal in the tax court must be
wwithin thirty days after the filing of the decision of the state
board of review, or equivalent administrative body.” On
September 26, 2002, Nazmore filed his "Notice of Appeal to Tax
Appeal Court” in the tax court, within thirty days of August 28,
2002, the date in which the Board refiled its order. Inasmuch as
Narmore has timely filed his written notice of appeal in the tax
court, the jurisdictional requirement of HRS § 232-17 has been
satisfied.

mK.

Contrary to the Department's position, the second
sentence of HRS § 232-17 does not impose a jurisdictional
requirement. This second sentence states in relevant part that

“[tyhe taxpayer shall also file a copy of the notice of appeal in

28
 

FOR PUGLICATION IN WEST’ S HAWAI'I REPORTS AID PACIFIC REFORTERS+#

 

the z ” BRS § 232-17 (emphasis added). This
directive does not indicate that filing a copy is a prerequisite
to “[aln appeal . . . to the (tax court](,]” nor does it state
that failing to file such a copy would divest the tax court of
appellate jurisdiction. See HRS § 232-17. Likewise, RTAC Rule
2(a) states that “[t}he appellant shall file a copy of such

notice lof appeall with the assessor . . . pursuant to HRS,
Sections 232-16 and 232-17, not later than the date fixed by law

for the taking of the appeal.” ‘The rule, too, does not indicate
that this requirement is jurisdictional.
If the legislature intended the filing of the copy to

be jurisdictional, it would have said so.** We will not presume

 

% the legislative history of HRS § 232-17 is supportive, see

108 Hawai'i 238, 266,
118 P.sd 1201, 1205 (z005) (holding that the relevant “statute's lack of
ambiguity is both confirmed and explained by a review of ite statutory history
within the context of Hawai't unemployment security law"). In 193,
anendnents were made to the language of HRS § 232-17 to, inter alia, sanction
a'leeser Of formality for a taxpayer's notice of appeal and to reflect

 

 

(3) Every effort nas been made to prevent situations
under which the Eaxpayer would be “ruled out” on account of
Eechnicel niceties in connection with the wording of his
notice of appeal, all with the idea of bolstering up the
present law which reads "Any notice, however informal,
Stating disagreement with the sssesement shall be
Eulticlene® fin the case of sppeais to the (Doard)) This
ides Se carried throvah
‘besa srocedure. A recent-court decieion epparentiy would
Feguire that oppeals be nade oUt in the greatest deteil.

ro

 

Trax court] the broad powers that
Under @ recent

Secision it scens that the Territory Le now ina position to

Glin that almost any point is @ “question of law" or a

“constitutional question” which must go to the Suprene

court

 

Hee. Stand. Comm. Rep. No, 99, in 1939 House Journal at p. 395-96 (emphases
Sased). Oar holding ie consonant wich the legislature's intent that cexpayers
(conte)

29
‘s++f0R PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REPORTERS

 

that the legislature so intended, but neglected to say so in HRS
§ 232-17, without @ compelling reason. See Reefshare, Lid. v.
Nagata, 70 Haw. 93, 98, 762 P.26 269, 173 (1988) (stating that
“courts will not presume an oversight on the part of the
legislature where such presumption is avoidable” (citation
omitted)); cf. Bender y, Easson, 216 N.¥.S.2d 393, 394 (1961)
(concluding that @ party's failure to serve his notice of appeal
in accordance with the dictates of Sections 702(2) and 708 of the
New York Real Property Tax Law divested that court of
jurisdiction to hear his appeal inasmuch as Section 702(2)
specifically stated that “[iJf . . . the petition or petition and
notice . . . were not filed or served and filed where required
ss + auch failure to file or serve and file the petition or
petition and notice within such time shall constitute a complete
defense to the petition and the petition must be dismissed”
(emphasis added) ).

1t may be further observed that [when a statute
specifies what result will ensue if its terms are not complied
with, the statute is deemed mandatory.” Jones v. Dodendort, 546

N.E.2d 92, 93 (I11. App. Ct. 1989) (citation omitted).

 

(continued)
ruled cut” of their appeals besed on
No: 99; in 1939 House Journel at p. 395. The

lative invent also reflecte that the tax court was efforded "broad

“by preserving ite jurisdiction to hear appeals which contain
Procedure! Geficiency. lise, Stand. Comm, Rep. Nov 99, in 1939 House Journal
p. 396. Finally, our heiding eiso respects the legislative recognition of

being a taxpayers “only recour eo protect himself from

Gnjuet accesenents,” Sen. Stand. Comm. Rep. No: i9, in House Journal at p.
payer of that recourse because of an unrelated

 

minor procedural deficiency.

  
  

 

 

   

     

    

 

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Conversely, when a statute “merely requires certain things to be
done and nowhere prescribes the results that shall follow if such
things are not done, the statute is merely directory.” Hedoes v,
Dep't of Soc. Servs. of Missouri, 585 S.W.2d 170, 172 (Mo. Ct.
App. 1979) (citations omitted). We have held that filing of a
notice of appeal is mandatory for purposes of perfecting an
appeal. Bacon, 68 Haw. at 650, 727 P.2d at 1129. On the other
hand, HRS § 232-17 is silent on the consequences of failing to
file a copy of the notice of appeal in the assessor’s office. In
that light the copy requirement should be viewed as directory.
See Hedges, 585 $.W.2d at 172.

If there is any doubt that filing a copy of a notice of
appeal pursuant to HRS § 232-17 is not jurisdictional, “the doubt
should be resolved in favor of the taxpayer.” In re Frank Fasi,
63 Haw. 624, 629, 634 P.2d 98, 103 (1981) (internal quotation
marks and citation omitted) (“noting that “[iJt is well settled

in this jurisdiction that the rule of strict construction is

 

applicable in tax cases and that, ‘if doubt exists as to the
construction of a taxing statute, the doubt should be resolved in
favor of the taxpayer”); see also In re Hawaiian Tel, Co., 61
Haw. 572, 578, 608 P.2d 383, 388 (1980) (explaining that “[iJt is
a cardinal rule of construction that a statute imposing taxes is
to be construed strictly against the governnent and in favor of

the taxpayers and that no person and no property is to be

included within its scope unless placed there by clear language

31
 

s¥+FOR PUBLICATION IN WEST'S HAWAI'I REFORTS AND PACIFIC REZORTERS

 

of the statute” (citation omitted)); In xe Aloha Motors, Inc., 56
Haw. 321, 536 P.2d 91 (1975) (opining that “[iJt is well settled
in this jurisdiction that the rule of strict construction is
applicable in tax cases. Thus, if doubt exists as to the
construction of a taxing statute, the doubt should be resolved in
favor of the taxpayer”) (internal quotation marks and citations
omitted); and Apokea Sugar Co. v. Wilder, 21 Haw. 571, 577 (1913)
(expounding that “[i]t is the general rule that statutes
providing for taxation are to be construed strictly as against
the state and in favor of the taxpayers, and the burdens and
liabilities which they impose are to be kept within the strict
letter of the law, and not extended beyond its clear terms by any

inferenc:

 

implication or analogy” (internal quotation marks and
citation omitted) ).

‘Thus, under the plain and unambiguous language of HRS §
232-17, it Se the filing of the notice of appeal with the tax
court that initiates the appeal, and not the filing of a copy of
the notice of appeal with the assessor, See HRS § 232-17 (“An

appeal shall lie to the {tax court] from the decision of a state

board of review, . . . by the filing, by the taxpaver, ofa
written notice of appeal in the office of the tax appeal court”
(emphases added)). Indeed, RTAC Rule 2(a) confirms this

interpretation and states that “[aln appeal shal] be initiated by
filing with the clerk of the [tax court] a written notice of

appeal and, in the case of a taxpayer, paying the costs of court

32
   

POR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

 

as prescribed in HRS, Section 232-22." Naxmore’s timely filing
of his notice of appeal with the tax court on Septenber 26, 2002
initiated his appeal. Where the plain language of HRS § 232-17
and RTAC Rule 2(a) indicate that it is only the filing of a
notice of appeal with the tax court that initiates an appeal,
inferring that filing 2 copy of the notice with the Department is
also a jurisdictional requirement would lead to “an absurd result
[creating] inconsistency, contradiction, and illogicality.”
Kanaluv. Paren, 110 Hawai'i 269, 278 , 132 P.3d 378, 387 (2006)
(citations and quotation marks omitted). Accordingly, Nazmore’s
failure to file a copy of this notice in the assessor's office
Pursuant to the second sentence of HRS § 232-17 did not divest
the tax court of appellate jurisdiction.
x.

Moreover, “shall,” as used in the second sentence of
HRS § 232-17 directing that the taxpayer “file a copy of the
notice of appeal in the assessor's office,” must be viewed as
Girectory. This court has recognized the multiple meanings of
“shall,” which “commonly shift{]. . . even in midsentence.” Grav

Mir. of the Court, 84 Hawas'l 138, 150, 931 P.2d 580,
592 (1997) (quoting B. Garner, A Dictionary of Modern Lega:
Usage, 939-40 (2d ed, 1995)). “While the word ‘shall’ is
generally regarded as mandatory, in certain situations it may
properly be given @ directory meaning.” Jack Endo Elec., Inc. v,
Lear Siecler, Inc., 59 Haw. 612, 616-17, 585 P.2d 1265, 1269

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(1978) (citation omitted). “[I]f the provision is mandatory, the
failure to follow it will render the proceeding to which it
relates illegal and void. If the provision is directory,
however, the observance of the provision will not be necessary to
the validity of the proceeding.” Id. (citation omitted).

“In determining whether a statute is mandatory or
directory[,} the intent of the legislature must be ascertained.
‘The legislative intent may be determined from a consideration of
the entire act, its nature, its object, and the consequences that
would result from construing it one way or the other.” State vw.
Tovomura, 80 Hawai'i 8, 20, 904 P.2d 893, 905 (1995) (citations
omitted). Specifically, to determine whether the word “shall”
with respect to filing a copy of the notice of appeal in the
assessor's office pursuant to HRS § 232-17 is directory, a three-
prong test may be applied. See Leslie, 109 Hawai"i at 394, 126
P.3d at 1081 (citing Perry v. Planning Comm, of Hawai'i County,
62 Haw. 666, 619 P.2d 95 (1980).

First, “‘shall’ can be read in a non-mandatory seni

 

when a statute’s purpose ‘confute(s] the probability of a
compulsory statutory design.'* Id, (quoting Perry, 62 Haw. at
676, 619 P.2d at 102). Second, “*shall’ will not be read as
mandatory when ‘unjust consequences’ result." Id. (quoting
Perry, 62 Hew, at 676, 619 P.2d at 102). Third, “the word
‘shali’ may be held to be merely dizectory, when no advantage is

lost, when no right is destroyed, when no benefit is sacrificed,

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either to the public or to the individual, by giving it that
construction.” Id. (quoting Berry, 62 Haw. at 677, 619 P.2d at
103) (internal quotation marks omitted) .

Applying the three-part test described in Leslie and
Berry, the term “shall” as utilized with respect to filing @ copy
in the second sentence of HRS § 232-17, is directory, rather than
mandatory. First, as noted earlier in footnote 27, supra, the
General schene of HRS chapter 232 is to “prevent situations under
which the taxpayer would be ‘ruled out’ on account of technical
‘niceties{,]‘" not only “in connection with the wording of his
or her] notice of appeal{,)" but also “with respect to all
appeal procedure.” Hse. Stand. Comm. Rep. No. 99, in 1939 House
Journal, at 395-96. Thus, as indicated by the legislature's

clear intent to impose a lesser degree of formality with respect

 

to a taxpayer’s notice of appeal, the “probability of a
compulsory statutory design” is not present in the instant case
Such circumstances favors construing “shall” as directory.
Second, “unjust consequences” would result if the term
“shall” in the second sentence of HRS § 232-17 is construed as
mandatory, the effect of which would be to deprive Narmore,” a
taxpayer, of the opportunity for both an administrative and
judicial review of the Board’s decision, It would be unjust to
conclude that failing to file a copy of @ notice of appeal must

divest the tax court of appellate jurisdiction, even though the

 

% Also, Narmore de a pro se litigant,

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filing requirements for the notice of appeal in the tax court had
been completely satisfied. In effect, such a construction would
run counter to the general policy favoring judicial review of
administrative matters, see In re Hawai'i Gov't Emplovees’ Ass'n
63 Haw, 85, 87, 621 P.24 361, 363 (1980) (ruling that “a failure
to designate an agency as an appellee is hardly cause for
dismissal, particularly where there is a policy favoring judicial
review of administrative actions” (citations onitted)), as well
as this court's “policy of affording litigants the opportunity to
have their cases heard on the merits, where possible(.J” Housing
Fin. and dev. Corp, v, Ferguson, 91 Hawai'i 81, 85-86, 979 P.2d
1107, 1111-12 (1999) (internal quotation marks and citation
omitted).

Third, it cannot be said that the Department or the

public has lost any advantage, suffered destruction of rights, or

 

sacrificed any benefits, Leslie, 109 Hawai‘ at 394, 126 P.3d at
1081, by Narmore’s failure to file a copy of his notice of
appeal. The record indicates that Narnore filed his notice of
appeal on September 26, 2002, and despite his failure to file a
copy with the Department, Director was served with the Notice of
Entry of Notice of Appeal by the tax court on October 4, 2002.
Further, the Department does not allege that it lost any

advantage, right, or benefit.

% one seeming purpose of filing copy with the ast
ns § 232-17 4S te aid the Department in fulfilling the infos
Fequirenents of HRs § 232-18, However, HRS § 232-18 specifically provides

(coasaued.)

 

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Hence, having satisfied the three-prong test under
Leslie and Perry, the term “shall” as it applies to filing a copy
must be construed as directory, rather than mandatory.

‘Therefore, Narmore’s failure to file a copy is not “necessary to
the validity of the proceeding(,]” and does not divest the tax
court of appellate jurisdiction. See Jack Endo Blec., Inc., 59
Haw. at 616, 585 P.2d at 1269 (citation omitted).

XI.

It is clear that the final sentence of HRS § 232-17,
which pertains to when a notice of appeal submitted via mail is
“taken in time,” does not impose any additional jurisdictional
requirement in this case. Under the final sentence of HRS § 232-
17, “[a]n appeal shall be deemed to have been taken in time if
the notice thereof and costs, if any, and the copy or copies of
the notice shall have been deposited in the mail, postage
Prepaid, properly addressed to the tax appeal court, tax
assessor, taxpayer or taxpayers, and county, respectively, within
the period provided by thie section.” (Emphases added.) It is
clear and unambiguous that this final sentence applies to a
notice of appeal that is submitted by mail. See HRS § 232-17. A
notice of appeal filed by mail is effective as of the date of

mailing, ises, if it “shall have been deposited in the mail...

%..contised)
that “(failure of the assessor to comply herewith shall not oresudice or
affect the -taxzaver'a, county's, or assessor's apna aed She eee Eee of
‘spoea] nav be atended at any tine up to the final determination of the
Sppeat

 

n
‘seePOR PUBLICATION IN WEST’ HAWAI'I REPORTS AND PACIFIC REPORT

 

 

within the period provided by this section.” HRS § 232-17. A
notice of appeal filed via personal delivery, as in this case,
would be deemed to have been taken in time if received within the
period provided by HRS § 232-17.

RTAC Rule 2(a) confirms the two methods of perfecting
an appeal embodied in HRS § 232-17. See supra note 2. According
to the RTAC Rule 2(a), “[t]he notice shall be filed either by
personally delivering or Imailingl it to the clerk of the Tax
Appeal Court.”* RTAC Rule 2(a) (emphasis added). RTAC Rule
2(a) reiterates the import of the first sentence of HRS § 232-17
in declaring that “[t]he notice shall be considered filed when it
is received in the Tax Appeal Court.” See RTAC Rule 2(a).
Parallel to the last sentence of HRS § 232-17, RTAC Rule 2(a)
also specifies that “if mailed,” the “notice shall be considered
filed when it is . . . properly addressed to such court and with
adequate postage paid, on the postmarked date.” Id, (emphasis
added). On its face, HRS § 232-17 also indicates that the notice
of appeal and the copy must be filed in separate offices. while
the notice of appeal must be filed in the tax appeal court, the
copy is to be filed with the assessor’s office. See HRS § 232-

17. RTAC Rule 2(a) confirms the separate destinations of these

 

> It Se evident from the context in which “making” is used, see

uora note 2, that the term is misspelling of the word "nailing." AS
indicated, RIAC Role 2(a) subsequently refers to reqUiresents applying to 2
Rotice of appeal “if mailed.” The correct spelling of the word is found in
Ennotaced vefsions of the rule. See Roles of the Tex pp. Ce- of the state of
New. Rule 2(a) 1121 (Michie’s 2006); Roles of the Tax. App. Ct. of the State
of iow. Rule 2(a) 328 (West 2008)

 

    

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two filings. As to the notice of appeal, RIAC Rule 2(a) states
that “[t]he notice shall be filed either by personally delivering
or (mailing] it to the clerk of the Tax Appeal Court. The notice
shall be considered filed when it is received in the Tax Appeal
Court, or if mailed, properly addressed to such court and with
adequate postage paid, on the postmarked date.” As pertaining to
the copy, RTAC Rule 2(a) states that “(t]he copy of the notice to
the assessor, taxpayer, and county, as the case may be, may be
filed by similar mailing.”
xIr.

Inasmuch as Narmore filed his “Notice of Appeal to Tax
Appeal Court” directly in the tax court, and not by depositing sit
in the mail, the final sentence of HRS § 232-17 is not implicated

in this

 

‘This is not to say that timely filing a notice of
appeal by personal delivery is accomplished by filing the notice

of appeal with the tax court alone, while timely filing a notice

 

of appeal by mail requires a timely filing both with the tax
court and the filing of a copy of the notice of appeal to the
Department.

The copy of the notice of appeal referred to in the
second sentence of HRS $ 232-17 is of course the same “copy”
designated in the final sentence of HRS § 232-17. Hence, for the
same reasons expressed supra, the requirement of filing the copy,
whether by physical delivery or by mailing, is directory, and not

mandatory. The distinction between the notice of appeal and the

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copy, as discussed supra, provides a principled basis for
according separate treatment to each, i.e., one mandatory and the
other directory, as confirmed in the statutes and RTAC Rule 2(a).
Therefore, while the copy should be filed within the sane tine
period ae the notice of appeal, the requirement as to the copy is
directory, and not mandatory.
xIrr.
In his argunent (2) and reply arguments (3) and (6),

Narmore maintains that we should overlook his non-compliance with

 

HRS § 232-17 and RTAC Rule 2(a) because the Department failed to
provide him a certified copy of the Board’s “Decision” as
required by HRS § 232-7. The Department opposes this argument in
its counterargument (5). Narmore apparently did receive original
copies of both the Board’s August 1, 2002 and August 28, 2002
“Decision(s}” by certified mail. He concedes that the
Department's failure to provide him certified copies of the
“Decision(s}" did not affect his ability to appeal to the tax
court:

Tinen. (Narmore] indicated that failure of the [Department] to
provide # certified copy of the Scara's decision to
[tarnore] “might” prevent filing of an appeal « . . he was
not referring to this sppeal. He meant thet an Appellant’
ight wait for the required certified copy before filing his
appeal to insure he had the official information, and then
find out too late that the certified letter was not
forthcoming. [Narnore) timely fled his appeal without the
certified eopyl.]

Further, Narmore is incorrect in his assertion that service of
certified copies of the Ecard’s “Decision[s]” “start[s) the tine

frame for filing an appeal.” HRS § 232-17 plainly states that

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the thirty day period for filing a notice of appeal to the tax

court begins to run when the Board's “Decision” is filed. See
HRS § 232-17. Accordingly, Nazmore was not prejudiced by the
Department’ s failure to provide hin a certified copy of the
Board's “Decision(s].”" Narmore fails to provide any legal or
statutory support for his assertion that, absent compliance with
HRS § 232-7, “it seems all subsequent actions would become moot
as far as jurisdiction is concerned.” However, based on our

disposition, we need not address this argument.”

% on remand the tax court must order the Department to provide
Nazmore certified copies of the Board's “Decision(s}.”

31 -Based on our disposition and renand, we do not address the
Department's argument in (1){a) and (1) (b) or Narmore’s reply argument in
(1) elated to the statute of Limitations for the assessment or collection of
faxeas Determination of this iene Fests on a factual finding as to what
occurred in 1993 when Rermore brought in his 198¢, 1985, 1986, 1967, 1966, and
1998 federsl income tax returns, as well as other tax infornation, to the
Department, See Norris o. Six flace These Fark, Inc., 102 Hawai 203, 206,
748.30 26, 29-2003) (cbserving that “the monent at which a statute of

{2 triggered is ordinarily a question of fact”). As stated
previously, Narmore asserts that an “audit” was conducted, while the
Department maintains thet he merely provided tax information and no audit wai
performed.

 

    

 

Et
Department's respon

wwe need not consider Nernore’s argument in (1) (b) and the

Sh (2) xegerding whether Nazmore had stated @ claim upon
which relief may be granted. ‘Although the Gepartnent does not expound on this
Sroument before this court, as Giacussed above, in ita sanuary 9, 2003 "Motion
fevblenias,” the Deparcnent argued that Narncre had not stated a claim upon
Which relief could be granted becsuse Nermore had not provided any legal basis
Jstieying en suard sf°¢12)119.39 when he had only paid $5,365.92, and because
the Separtnent. was not barfes from collecting Nermore's excise tax for the
1bts tex your becouse the staute of Limitations found in HRS 237-40 did not
begin to fn unesl. December 17, 1996.

‘yo repeat, Rernore’ asserts thet he is entitled to a refund of
$12,179.93, the amount Feflected in the first 1989 tax return and including
Penalties tnd interest, rather than $5,965.92, the anount shown in the second
USE3 tax cetusn not including penalties ond interest, because the statute of
Limicstions had fun for the 1968 tax year, thus preventing the Department from
collecting any tenes, or penalties and interest, fron hin for thot yeor~

‘The Departhent’s argument chat Nsrmore cid not seate s Claim &
which relief could be granted eppears to be inextricably Linked to a
Gseernbsat len of wneiner the statute of 2imitet ions had ron op co the 2989 tax

fc he discussed aupsa, a determination of that sssue requires findings of
Hace’ enat have yet t9 be nade by the tax court.

‘ie Slso do not Feach the argument made by the Oeparteent in (2) ox

(contd)

    

 

 

 

 

    

 

 

 

 

 

 

aL
 

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xiv.

The requirenent that Narnore tinely file his “Notice of
Appeal to Tex Appeal Court” was clearly jurisdictional and was
satisfied. Accordingly, the requirement found in HRS § 232-17
and RTAC Rule 2(a) that a taxpayer file a copy of his or her
“Notice of Appeal to Tax Appeal Court” with the assessor is hot
jurisdictional and, thus, failure to do so does not deprive the
tax court, or this court, of jurisdiction to hear a taxpayer's
appeal.”

xv.

For the foregoing reasons, the tax court’s July 8, 2004

 

“order Granting [Department's] Motion to Dismiss Filed on January

(continued)
the reply argusent made by Narmore in (2) and (5) regarding whether or not the
Department “forged” the second 1989 tax return and whether the Department 12
perpetuating “aisinfornation and half-truths” related to Narnore’s sppeal.
Again, the resoivtion of those issues requires a determination of facts thet
aze disputed by the parties. To Narnore states that che Department,
“forged” the second 1965 tax return, 1s the Departnent denies this
allegation and contends that it merely "waived peneities and interest,
Feducing the tax sncunt due to $5,365.52" and made the appropriate anendnent.

 

         
       

= as discusted supra, and ae argued by Nernore in 3(2), the
Department acknowledges that it learned of Narnore’s appeal of of about
October 4, 2002, approxinately eight cays after he filed his "Notice of Appeal
to Tax Appeal Court,” when it was served with 8 "Notice of Entry of Notice of
Appeal to the (tax court)” by the clerk of the tax court. The Department,
therefore, plainly had notice of Narmore’s appeal. As nentioned before, the
Departnent does not point to any prejudic

We concluse thst the Yequirenent found in HRS § 232-17 and RTAC

Rule 2(9) that a toxpayer “shall” file a copy of his or her "Notice of Appeal
to Tax Appeal Court” with the assessor is not jurisdictional, Although
Appellant has not expressly argued chat the term “shall” as it pertains to
filing with the ascecsor should be interpreted as directory in the instant
Case, the import of his position ie to the same effect, i.g, that the seatutes
So not require the f1ling of a copy of the notice of appeal as a condition to
Filing the notice with the tax court. Nevertheless, on renand the tax court
must crder Narnore to file a copy of his "Notice of Appeal to Tax Appeal
Court” with the secessor.. Based on our interpretation of the langusge of HRS
§ 252-17 and RIAC Role 2(a), we need not reach Narmore’s argument in (3) (b)
Fegarding “Tax Information Releases.”

 

   

 

 

 

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9, 2003” and July 8, 2004 final judgment in favor of the
Department and against Narmore are vacated and this case is
remanded to the tax court for further proceedings consistent with
this opinion. The tax court is instructed to order Narmore to
file his “Notice of Appeal to Tax Appeal Court” with the
Department and to order the Department to provide Narmore
certified copies of the Board’s “Decision[s].”

on the briefs:

Bobby R. Narmore, Rita Canoe

appellant-appellant,

pro se. JR,

Hugh R, Jones and Damien A.

Elefante, Deputy Attorneys Goren. Dudiigs Oe
General, ‘for appellee-
appellee

43