Title: WYODAK RESOURCES DEVELOPMENT CORPORATION v. STATE BOARD OF EQUALIZATION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

WYODAK RESOURCES DEVELOPMENT CORPORATION v. STATE BOARD OF EQUALIZATION2001 WY 9232 P.3d 1056Case Number: 00-218Decided: 10/04/2001

OCTOBER TERM, A.D. 2001

 

                                                                                                            

 

WYODAK 
RESOURCES DEVELOPMENT

CORPORATION, 

Appellant(Petitioner) 
,

 

v.

 

STATE 
BOARD OF EQUALIZATION

FOR THE 
STATE OF WYOMING, 

Appellee(Respondent) 
.

 

 

W.R.A.P. 
12.09 Certification from the District Court of Laramie 
County

The 
Honorable Nicholas G. Kalokathis, Judge 

 

Representing 
Appellant:

Timothy 
L. Thomas of Morrill Thomas Nooney & Braun, LLP, Rapid City, South 
Dakota.

 Representing 
Appellee:

Gay 
Woodhouse, Wyoming Attorney General; Michael L. Hubbard, Deputy Attorney 
General; Harry D. Ivey, Assistant Attorney General.  Argument by Mr. 
Ivey.

  

Before 
LEHMAN, C.J.; GOLDEN, HILL, and KITE, JJ.; and SPANGLER, D.J., 
Retired.

  

GOLDEN, 
Justice.

 [¶1]           
In 1997 
and 1998, Appellant Wyodak Resources Development (Wyodak) filed amended coal 
production reports with the State of Wyoming Department of  Revenue (DOR) and requested refunds of 
severance taxes for the years 1992 through 1995.  The DOR denied those refunds, and Wyodak 
appealed to the State of Wyoming Board of Equalization (Board), requesting both 
a contested case hearing pursuant to Wyo. Stat. Ann. § 39-14-109(b), and a 
petition for examination pursuant to Wyo. Stat. Ann. § 39-11-102.1(c)(x).  The Board summarily dismissed that 
petition for examination, and Wyodak appeals.  

 

[¶2]           
We 
reverse and remand for proceedings in compliance with Wyo. Stat. Ann. § 
39-11-102.1(c)(x) (Lexis 1999).

 

 

ISSUES

 

[¶3]           
Wyodak 
presents this single issue for our review:

 

1.  Did the Wyoming State Board of 
Equalization err in summarily dismissing appellant's petition for board 
examination filed pursuant to Wyo. Stat. § 39-11-102.1(c)(x) when the Board has 
an affirmative duty to carefully examine such petitions?

 

The 
Board believes the issue is:

 

Whether 
upon receipt of a written allegation that property subject to taxation has not 
been assessed or has been fraudulently, improperly, or unequally assessed, or 
the law governing assessment, levy and collection has been evaded or violated, 
does the Board have discretion to determine if a full-blown examination is 
warranted when petitioner for a board examination has virtually identical issues 
before the Board in a companion proceeding?

 

In 
response to the Board's issues, Wyodak addresses the following issues in its 
reply brief:

 

Pursuant 
to W.R.A.P. 7.03, the new issues and arguments raised by the Brief of the 
Appellee, which are addressed in this Reply brief, are as 
follows:

 

(a)       The Rules, 
Chapter 4 relied on by the Board were not applicable to this 
proceeding;

 

(b)       The Rules, 
Chapter 4 did not allow a summary dismissal at the Board's own 
instance;

(c)        
Bender v. State Bd. of Equal. is not 
applicable;

 

(d)       A Board 
examination under Wyo. Stat. 39-11-102.1(c)(x) is a different and concurrent 
remedy to an administrative appeal, especially considering the Department of 
Revenue's decision sought to be reviewed;

 

(e)       The 
Petition for Board Examination is not an "end-run" around the administrative 
proceeding when it is clearly a dual remedy under Wyoming 
law.

 

 

FACTS

 

[¶4]           
Wyodak 
mines coal in Campbell County, Wyoming.  
It paid severance taxes for the years 1992 through 1995, and in December 
of 1997 and 1998, it filed with DOR amended annual gross products reports for 
coal for the years 1992 through 1995, with a request for refunds of severance 
taxes paid.  In 1999, DOR refused to 
process the 1992 amended return, stating that in the "interest of finality and 
other considerations, the Department will not accept amended returns for 
production years which have already been audited, assessed, appealed and 
adjudicated."  DOR stated that it 
had not accepted the amended returns for 1993-1995 because "(1) . . . there was 
an audit pending, the objective of which was to determine proper valuation of 
the coal production years in question, and (2) Wyodak's submission of the 
amended returns was simply a device for appealing the original notices of 
valuation for the 1993-1995 production periods after the appeal periods had 
lapsed."

 

[¶5]           
Wyodak 
responded by filing a case notice for review to receive a contested case hearing 
pursuant to Wyo. Stat. Ann. § 39-14-109(b) and Board rules found in Chapter 2 
§5.  It also filed a petition for 
Board examination pursuant to Wyo. Stat. Ann. § 39-11-102(c)(x).  On March 29, 2000, the Board summarily 
dismissed the petition after determining that the two actions involved similar 
issues.  The Board 
stated:

 

[T]o 
permit Wyodak to pursue remedies through both the contested case format and the 
examination procedure would be a redundant waste of administrative resources 
void of additional benefits to either the Board or the parties.  Furthermore, . . . when there is the 
option for a Petitioner to seek its remedy through the Wyoming Administrative 
Procedure Act and Rules, Chapter 2, Wyoming State Board of Equalization 
contested case procedure, it is inappropriate for a petitioner to file a 
Petition for Board Examination either in addition to or in lieu of a contested 
case. 

 

Soon 
afterwards, the Board served notice of its intent to dismiss the contested case 
hearing as res judicata for failure to timely appeal the valuation notices 
within thirty days; however, at the time the Board dismissed the petition, the 
contested case hearing was scheduled to proceed. Wyodak appealed the summary 
dismissal, and the district court certified to this Court pursuant to W.R.A.P. 
12.09.

 

 

DISCUSSION

 

Standard of 
Review

 

[¶6]           
Our 
standard for reviewing agency actions is well settled and defined by 
statute.  On review of petitions for 
judicial review certified to this Court pursuant to W.R.A.P. 12.09, we invoke 
the same standard of review applicable to the district courts.  Wyo. Stat. Ann. § 16-3-114(c) 
(LexisNexis 2001) provides that the reviewing court shall:

 

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

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

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

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

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

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

 

Jones v. 
State, Dept. of Health, 2001 
WY 28, ¶7, 18 P.3d 1189, ¶17 (Wyo. 2001).

 

[¶7]           
Statutory 
interpretation is a question of law.  
If the conclusion of law is in accordance with the law, we affirm it; if 
it is not, we correct it.

 

We 
endeavor to interpret statutes in accordance with the Legislature's intent. We 
begin by making an "inquiry respecting the ordinary and obvious meaning of the 
words employed according to their arrangement and connection.'"  Parker Land and Cattle Company v. 
Wyoming Game and Fish Commission, 845 P.2d 1040, 1042 (Wyo. 1993) 
(quoting  Rasmussen v. Baker, 
7 Wyo. 117, 133, 50 P. 819, 823 (1897)).  
We construe the statute as a whole, giving effect to every word, clause, 
and sentence, and we construe together all parts of the statute in pari 
materia.  

 

Exxon 
Corp. v. Board of County Comm'rs, Sublette County, 987 P.2d 158, 161-62 (Wyo. 1999).  

 

 

Availability of Summary 
Dismissal

 

[¶8]           
Wyodak 
contends that this Court's past decisions have determined that Wyo. Stat. Ann. § 
39-11-102.1(c)(x) (Lexis 1999)1 imposes on the Board the additional 
duty of accepting petitions for examination even though reviewing issues by 
contested case proceedings.  It 
claims that the Board failed to review the underlying merits of the petition, 
choosing instead to summarily dismiss it for the reason that Wyodak would 
receive a contested case hearing.  
Wyodak asserts that, in its case, an examination will provide for 
different relief than that available by contested case hearing because the 
relevant statute permits refunds when an improper valuation method was used 
whereas, in a contested case hearing, the Board may not reach the merits of 
whether an improper assessment was made because of res judicata principles or 
other grounds.    

 

[¶9]           
The 
Board contends that it did comply with the statute by "carefully examining" the 
petition; however, it claims that its rules provide it with the discretion to 
determine the extent of the investigation.  
Here, the Board contends that it carefully examined Wyodak's contentions 
and found that based upon the specific facts and circumstances, it was 
appropriate to summarily dismiss.  
The Board disputes Wyodak's claim that an examination would provide 
relief when a hearing would not.

 

[¶10]       
The 
relevant statute, Wyo. Stat. Ann. § 39-11-102.1(c)(x) (Lexis 1999), 
states:

 

(c) The 
state board of equalization shall perform the duties specified in article 15, 
section 10 of the Wyoming constitution and shall hear appeals from county boards 
of equalization and review final decisions of the department upon application of 
any interested person adversely affected, including boards of county 
commissioners for the purposes of this subsection, under the contested case 
procedures of the Wyoming Administrative Procedure Act.  Any interested person adversely affected 
by the adoption, amendment or repeal of a rule pursuant to W.S. 16-3-103(a) 
shall be afforded an opportunity for a hearing before the board.  In addition, the board 
shall:

                        
* * * *

 

            
(x) Carefully examine into all cases wherein it is alleged that property 
subject to taxation has not been assessed or has been fraudulently, improperly, 
or unequally assessed, or the law in any manner evaded or violated, and cause to 
be instituted proceedings which will remedy improper or negligent administration 
of the tax laws of the state[.]

 

[¶11]       
At the 
time of the dismissal, the Board's rules for this statute 
provided:

 

Section 
2. Purpose.  These rules are 
intended to provide process and standards for the State Board to carefully 
examine into allegations of improper, fraudulent, or unequally assessed 
properties or allegations of evasion or violation of property tax 
laws.

 

Section 
3.  Allegations and Board 
Examination.

 

(a) 
The State Board may institute an examination upon written allegation that 
property subject to taxation has not been assessed or has been fraudulently, 
improperly or unequally assessed, or the law governing assessment, levy and 
collection has been evaded or violated.

 

(b) Such 
examination may be subject to summary dismissal upon evidence or argument 
indicating:

 

(i) The 
allegation is subject to a legal limitation which precludes Board 
Examination;

(ii) The 
allegation is not within the jurisdiction of the Board;

(iii) In 
the discretion of the Board, the matter involves an isolated, trivial or minimal 
issue or problem which may be remedied through conference and 
conciliation;

(iv) In 
the discretion of the Board, the matter involves a final action or inaction of 
another agency which is properly reviewed by district 
court;

(v) 
There is no adequate proceeding provided by law which will remedy the 
allegations; or 

(vi) 
Other good cause as determined by the Board.

 

 

State 
Board of Equalization Rules, Board Examiniation Rules, Ad Valorem Tax, Ch. 4 
(1999) (emphasis added).

 

[¶12]       
In 1999, 
this Court decided Exxon Corp. v. Board of County Comm'rs, Sublette 
County, 987 P.2d 158 (Wyo. 1999), and examined the same statutory language 
at issue here.  We determined that 
the statutory language instituted a dual role for the Board, specifically that 
"the Board's power to carefully examine' alleged taxation improprieties under 
Section 14 is in addition to' the Board's duty to hear appeals from Department 
of Revenue decisions."  Id. 
at 164.  

 

[¶13]       
The 
plain language of the statute mandates that the Board carefully examine 
specified allegations, and the Board concedes that is its mandate.  In Exxon, we 
said:

 

This 
statute delineates two of the Board's functions.  We discern subsection (a) to be part of 
the Board's adjudicatory function, i.e., that subsection gives the Board 
the power to hear appeals.  
Subsection (a)(xiv) (Section 14), on the other hand, is more closely 
aligned with the Board's regulatory function.  This section gives the Board the power 
to carefully examine allegations of improper, unequal, or fraudulent assessment, 
and the power to cause to be instituted proceedings to remedy improper or 
negligent administration of Wyoming's tax laws.   

 

Id. at 
163.  The Board presents us with 
arguments against applying this dual role in this case.  Exxon examined similar arguments 
and held that neither time limitations, adverse impact on the Board's volume, 
nor the doctrine of finality could overcome the statute's clear mandate.  Exxon held that this statutory 
language did not provide for a time limitation that would prohibit examinations, 
and the doctrine of finality was not applicable merely because the time for 
appeal to secure a contested case hearing had passed.  Quoting from Wyo. State Tax Comm'n v. 
BHP Petroleum Co., Inc., 856 P.2d 428, 435-36 (Wyo. 1993), Exxon 
said:

 

This 
section provides for revaluation when it directs the State Board of Equalization 
to discover errors or unequally assessed taxes and remedy those errors.  W.S. 39-1-304(a)(xiv).  As the State points out, errors are 
usually discovered by looking back, therefore retroactive action is explicit in 
the statute.  Thus the process that 
occurs is prospective correction of improper self-assessment.  It is not retroactive revaluation.  

 

Exxon, 987 P.2d  at 163.    
Exxon examined impact and stated:

 

 

[T]he 
appellants argue that a broad interpretation of Section 14 will lead to parties 
bypassing appeals in order to make challenges pursuant to Section 14.  We do not dismiss this concern 
lightly.  However, Wyo. Stat. Ann. § 
39-1-304(a) clearly indicates that the Board's power to "carefully examine" 
alleged taxation improprieties under Section 14 is "in addition to" the Board's 
duty to hear appeals from Department of Revenue decisions.  Therefore, even though the appellants 
raise a legitimate practical concern, we cannot, in the face of clear statutory 
language, judicially remove the Board's statutory duty.  Recognizing the Board's dual roles, the 
clear language of Section 14, and the lack of time limitation on initiating a 
Section 14 petition, we must reject the appellants' argument that Sublette 
County's Section 14 petition is untimely. "The necessity for equal and uniform 
taxation is compelling and overriding."  
State Tax Comm'n v. BHP Petroleum Co., Inc., 856 P.2d  at 439.   

 

Exxon, 987 P.2d  at 164.  

 

[¶14]       
Finally, 
the Board contends that it can review the merits of the petition from the 
petition itself and decide to summarily dismiss.  Assuming without deciding that the Board 
may by rule limit the extent of its examination under the statute, we must agree 
with Wyodak that it does not appear that the petition's merits were examined, 
but, instead, it was summarily dismissed, apparently with prejudice, because a 
contested case review was proceeding.  
Under the statute, the Board does not have the power to dismiss with 
prejudice a petition that will provide for review of issues that is unavailable 
under the contested case proceedings.  
An examination under subsection (x) provides a taxpayer with more 
defenses to government action than may be available otherwise.  At this point, neither the Board nor 
Wyodak knows whether review of issues arising under subsection (x) will be 
available through the contested case proceeding.  A dismissal of the contested case 
proceeding on res judicata or other grounds without review of subsection (x) 
issues would mean that the taxpayer will have only the remedy available by its 
petition for examination, and, therefore, the Board must examine.  The possibility that a contested case 
hearing may prevent review or relief available under this statute is sufficient 
to hold that the Board's summary dismissal was in error and reverse and remand 
for further proceedings in compliance with Wyo. Stat. Ann. § 
39-11-102.1(c)(x).  

  

CONCLUSION

 

[¶15]       
Wyo. 
Stat. Ann. § 39-11-102.1(c)(x) mandates careful examination of specified 
allegations, and this examination is in addition to the review available by a 
contested case hearing.   
Assuming without deciding that the Board can reject a petition when a 
contested case is pending, in this case, Wyodak's petition for examination may 
provide review of subsection (x) issues other than that potentially available 
through a contested case proceeding.  
The Board is mandated to perform a subsection (x) examination that may 
provide an additional avenue to a petitioner seeking relief for an improper 
assessment, and it may not summarily dismiss without examining the petition's 
merits sufficiently for judicial review.  
Reversed and remanded.

       
FOOTNOTES

1Before recodification, the statute was 
numbered Wyo. Stat. Ann. § 39-1-304(a)(xiv) (Michie 1997).  The language did not change until July 
2001 when the following sentence was added:  "Except for allegations based in fraud, 
any request for relief under this paragraph shall be filed within five (5) years 
from the date the taxes were paid or should have been 
paid[.]"