Title: CIG Exploration, Inc. v. State, Dept. of Revenue

State: wyoming

Issuer: Wyoming Supreme Court

Document:

CIG Exploration, Inc. v. State, Dept. of Revenue1994 WY 85880 P.2d 601Case Number: 93-204Decided: 09/08/1994Supreme Court of Wyoming
CIG 
EXPLORATION, INC.; and Colorado Interstate Gas Company,

Appellants 
(Plaintiffs),

v.

STATE 
of Wyoming, DEPARTMENT OF REVENUE,

Appellee 
(Defendant).

 

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

 

Representing 
Appellants:

Lawrence 
J. Wolfe and Susan E. Laser-Bair of Holland & Hart, 
Cheyenne.

Representing 
Appellee:

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

 

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

* 
Retired July 6, 1994.

** 
Chief Justice at time of court's consideration.

GOLDEN, 
Chief Justice.

[¶1]      In response to 
two certified questions, we hold that WYO. STAT. § 39-6-304(g) (1985), now 
repealed, was a statute of repose, rather than one of limitations, and thus it 
required that the taxpayer file an application for severance tax refund within 
two years of the date of overpayment. Having so concluded, we need not reach the 
second certified question which asks, if WYO. STAT. § 39-6-304(g) was a statute 
of limitations, did it permit only the property operator who originally filed 
the tax forms to file the refund application.

BACKGROUND

[¶2]      In December, 
1989, appellants, Colorado Interstate Gas Company and CIG Exploration, filed 
applications with the State of Wyoming for severance tax refunds for natural gas 
production from 1979 to 1987. The refund claims followed the Federal Energy 
Regulatory Commission's (FERC) order directing appellants to reduce their 
natural gas prices for those years and issue refunds for the difference between 
the two prices. Appellants sought severance tax refunds of approximately 
$911,000 for the difference between the amount of the tax paid on the higher 
prices initially charged, and later reduced by the FERC, and the amount of the 
tax which would have been paid at the reduced price.

[¶3]      Appellants filed 
their applications for severance tax refunds more than two years after paying 
the taxes but less than two years after FERC ordered the price reduction and 
refund. Appellee, the Department of Revenue (Department), denied appellants' 
refund claims as untimely, relying upon the following language in WYO. STAT. § 
39-6-304(g):

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

The 
Department also ruled that application for severance tax refunds must be filed 
by the operator of the property.

[¶4]      Appellants 
appealed the Department's decision to the State Board of Equalization and 
contemporaneously filed a declaratory judgment action in district court. On 
September 13, 1993, the district court, upon stipulation of the parties and 
pursuant to Wyoming Rules of Appellate Procedure 11, certified to this court the 
questions set forth below. On November 17, 1993, this court issued an Order 
Agreeing to Answer Certified Question.

CERTIFIED 
QUESTIONS

[¶5]      The district 
court certified the following questions for our review:

1. 
Whether the statute of limitations for severance tax refunds in W.S. 39-6-304(g) 
(1985, repealed 1988) requires an application for refund to be filed within two 
years of the date of overpayment, when discovery occurred after that 
time.

2. 
Whether a severance tax refund claim must be filed by the operator of the 
property who originally filed the tax forms, instead of a working interest 
owner.

DISCUSSION

[¶6]      In Enron Oil 
& Gas Co. v. Freudenthal, 861 P.2d 1090, 1093 (Wyo. 1993) and Amoco 
v. State Bd. of Equalization, 797 P.2d 552, 555 (Wyo. 1990), this court held 
that the language of WYO. STAT. § 39-6-304(g)1 was clear and unambiguous and 
required that all applications for severance tax refunds be made within two 
years of payment of the tax. Appellants acknowledge these holdings but 
contend they did not resolve the question whether WYO. STAT. § 39-6-304(g) is a 
statute of limitations or one of repose because in both Enron and 
Amoco, appellants assert, this court contradicted its holdings and 
applied the statute as one of limitations.2 Thus appellants contend an 
ambiguity exists, and they request that we now resolve that alleged ambiguity 
and declare WYO. STAT. § 39-6-304(g) a statute of limitations and hold 
appellants' refund applications should have been considered from the date 
appellants discovered they were entitled to a refund, not from the date of 
payment of the tax.

[¶7]      Appellants 
contend we should declare WYO. STAT. § 39-6-304(g) a statute of limitations 
because the plain language of the statute supports such an interpretation and 
because the legislature has acquiesced in the Department's interpretation of the 
statute as one of limitations. We do not agree that this court's decisions in 
Enron and Amoco created an ambiguity, and we reiterate our holding 
from those cases that WYO. STAT. § 39-6-304(g) requires that refund applications 
be filed within two years from payment of the tax.

[¶8]      We turn first to 
appellants' contention that this court has treated WYO. STAT. § 39-6-304(g) as a 
statute of limitations. To support this position, appellants point to the 
following language in Enron and Amoco:

In 
fact, Enron's assertion that it could not apply for its tax refund until the 
amount was determined by the Chevron appeals is contradicted by the record. 
Amended returns can and almost always are filed before the Board rules on 
take-in-kind appeals. Enron could have filed its refund claims but failed to do 
so.

Enron, 
861 P.2d  at 1094.

Our 
ruling today only addresses the issue of whether the statute applies to the 
adjustments filed by Amoco. We do not decide whether the Department has 
correctly applied the statute in other instances.

Amoco, 
797 P.2d  at 555.

[¶9]      Appellants argue 
this language demonstrates this court reached its conclusion that neither 
taxpayer filed timely applications only after determining each failed to 
exercise diligence in discovering the existence of and/or amount of their 
refunds - that a finding of diligence would have changed the result in each case 
and may change the result in future cases. A determination of diligence, 
appellants argue, is irrelevant unless the statute is one of limitations as 
opposed to repose. We disagree with appellants' interpretation of the 
above-quoted language from Enron and Amoco.

[¶10]   In Enron, we declined the 
taxpayer's invitation to create an exception to the requirement of WYO. STAT. § 
39-6-304(g) that applications for refunds be filed within two years of payment. 
We held that this court does not possess the authority to legislate an exception 
to an unambiguous statute because it would be fair or equitable to do so and 
also noted that, in that instance, fairness did not demand creation of such an 
exception because "Enron could have filed its refund claims but failed to do 
so." Enron, 861 P.2d  at 1094. Read in context, our conclusion that the 
taxpayer did not act diligently in filing its application was clearly unrelated 
to our determination that the statute unambiguously required application for 
refund be made within two years from payment, and our conclusion that the 
taxpayer had not acted diligently did not dictate the outcome of the 
case.

[¶11]  Likewise, the language appellant relies 
upon from Amoco did not limit our holding in that case. The language, 
taken in context, was a rejection of the taxpayer's argument that our 
construction of WYO. STAT. § 39-6-304(g) should be influenced by the 
Department's prior interpretations of the statute. The full paragraph, from 
which appellants extracted their quote, reads:

We 
find little merit in Amoco's pointing to other instances where the Department 
may or may not have applied the statute as written. Our ruling today only 
addresses the issue of whether the statute applies to the adjustments filed by 
Amoco. We do not decide whether the Department has correctly applied the statute 
in other instances.

Amoco, 
797 P.2d  at 555.

[¶12]   Read as a whole, and taken in 
context, the above-quoted language in no way suggests that this court will 
consider the timeliness of refund applications on a case-by-case basis, 
depending upon whether the taxpayer acted diligently in discovering its refund 
claim. Nor can any such language be found in Amoco. We clearly held in 
Amoco that WYO. STAT. § 39-6-304(g) required application for severance 
tax refunds be made within two years of payment of the tax, 
regardless of when the taxpayer discovers, diligently or otherwise, its right to 
a refund. Amoco, 797 P.2d  at 555.

[¶13]   We address next appellants' 
contention that WYO. STAT. § 39-6-304(g) should now be declared a statute of 
limitations. Appellants first argue that WYO. STAT. § 39-6-304(g) should be 
treated as a statute of limitations because the legislature has acquiesced in 
the Department's prior interpretation of the statute as one of limitations. 
However, as we noted in Amoco, where the statute is clear and unambiguous, as we 
have held this one is, this court will not resort to rules of construction to 
determine the statute's meaning. Thus, the Department's interpretation of WYO. 
STAT. § 39-6-304(g) and the legislature's acquiescence in that interpretation 
are immaterial.

[¶14]   In their final argument, appellants 
contend that the statute's plain language supports an interpretation of the 
statute as one of limitations because it provides that refund applications must 
be made within two years from "the payment of the erroneous tax." 
Appellants assert the two year period does not begin to run until the tax is 
determined to be erroneous, and since the tax was not erroneous until FERC 
ordered the price reductions and refunds, that should be the date from which the 
two year period is measured.

[¶15]   While we understand the difficulty 
taxpayers face in determining the existence of and/or amount of their refund 
claims within two years of payment, this court has twice rejected the argument 
set forth by appellants. In Enron, we noted that an interpretation such 
as that urged here by appellants would ignore the mandatory "shall" in WYO. 
STAT. § 39-6-304(g) and the term "payment." Enron, 861 P.2d  at 1093. We 
defined "payment" in Amoco as "when the severance tax was actually 
paid." Amoco, 797 P.2d  at 556 (emphasis added). As we noted in 
both Amoco and Enron, the legislature drafted WYO. STAT. § 
39-6-304(g) to place the burden of compliance on the taxpayer, and "[w]e cannot 
legislate an exception to an unambiguous statute because it would be fair or 
equitable to do so." Enron, 861 P.2d  at 1094; Amoco, 797 P.2d  at 
555.

[¶16]   Because we have determined that 
WYO. STAT. § 39-6-304(g) was a statute of repose, requiring application for 
refund within two years of payment of the tax, appellants' claims must be 
dismissed as untimely. We therefore need not address who, under WYO. STAT. § 
39-6-304(g), must file the application for refund.

CONCLUSION

[¶17]   WYO. STAT. § 39-6-304(g) was a 
statute of repose and clearly and unambiguously required that applications for 
severance tax refunds be made within two years of payment.

Footnotes

1 WYO. STAT. § 39-6-304(g) reads:

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

2 This court has distinguished statutes of repose and statutes of 
limitation as follows:

Statutes of repose and statutes of limitation * * * are similar in that 
both prescribe the time period within which a plaintiff may commence his suit. 
The distinguishing feature between the two is the time at which the respective 
periods commence. Generally, if the plaintiff's cause of action accrues and the 
statutory period commences when the injury occurs, or, as is most often the 
case, when the plaintiff is or should be aware that he has been injured, the 
statute is properly termed a statute of limitations. If the statutory period 
commences upon the occurrence of an event, regardless of when the injury occurs, 
at a time when the plaintiff may or may not be aware of any injury, the statute 
is properly termed a statute of repose. * * * Consequently, the plaintiff's 
claim may be barred before he is or should be aware that he has been injured or 
has a claim.

Bredthauer 
v. TSP, 
864 P.2d 442, 446 (Wyo. 1993) (quoting Worden v. Village Homes, 821 P.2d 1291, 1295 (Wyo. 1991)).