Title: AT & T Communications of the Mountain States, Inc. v. State Bd. of Equalization

State: wyoming

Issuer: Wyoming Supreme Court

Document:

AT & T Communications of the Mountain States, Inc. v. State Bd. of Equalization1989 WY 29768 P.2d 580Case Number: 88-187Decided: 02/01/1989Supreme Court of Wyoming
AT & T 
COMMUNICATIONS OF THE MOUNTAIN STATES, INC., AND AMERICAN TELEPHONE AND 
TELEGRAPH COMPANY-INTERSTATE DIVISION, APPELLANTS (PETITIONERS),

 
 
v.

 
 
STATE BOARD 
OF EQUALIZATION, CONSISTING OF SHIRLEY WITTLER, CHAIRMAN; CARROL ORRISON, DEPUTY 
CHAIRMAN; AND TOM TROWBRIDGE, APPELLEE (RESPONDENT).

 
 
Appeal from 
the District Court, LaramieCounty, Nicholas G. Kalokathis, 
J.

 
 
John A. 
Sundahl of Godfrey, Sundahl & Jorgenson, Cheyenne, Stephen D. Goodwin of 
Laughlin, Halle, Gibson & McBride, Memphis, Tenn., James P. Kratochvill and 
Robert A. Maynes, Basking Ridge, N.J., for appellants.

 
 
Joseph B. 
Meyer, Atty. Gen., Michael L. Hubbard, Sr. Asst. Atty. Gen., and Robert J. 
Walters, Asst. Atty. Gen., Cheyenne, for 
appellee.

 
 
Before CARDINE, C.J., THOMAS, MACY and GOLDEN, 
JJ., and ROONEY, Retired J. 

 
 

ROONEY, Retired 
Justice.

 
 

[¶1.]     This appeal is from an 
order of the district court dismissing appellants' petition for review of a 
decision of appellee, State Board of Equalization. Such decision denied 
appellants' challenge to the ad valorem property tax assessment of its property 
for the year 1985 at a percentage of 16.5, a percentage substantially higher 
than that applied to the property of other taxpayers. The challenge was made on 
the basis of a violation of the uniformity requirement of the Wyoming 
Constitution.

 
 

[¶2.]     We reverse and remand 
to the agency.

 
 

[¶3.]     Appellants state the 
issues on appeal as:

 
 
"1. WERE 
THE AD VALOREM TAX ASSESSMENT PRACTICES EMPLOYED BY THE STATE IN 1985 ANALOGOUS 
TO THE PRACTICES EMPLOYED BY THE STATE IN 1987 WHICH WERE HELD BY THIS COURT IN 
ROCKY MOUNTAIN OIL AND GAS ASSOCIATION v. THE STATE BOARD OF EQUALIZATION, 749 P.2d 221 (Wyo. 1987) (`RMOGA') TO HAVE VIOLATED THE UNIFORMITY REQUIREMENT OF 
THE STATE CONSTITUTION?

 
 
"2. IS THE 
REMEDY FOR SUCH A VIOLATION, UPON COMPLAINT OF AN INDIVIDUAL TAXPAYER WHO PROVES 
HIS ASSESSMENT WAS DISPROPORTIONATE AND EXCESSIVE, A REDUCTION IN THE LEVEL OF 
ASSESSMENT TO A UNIFORM LEVEL?

 
 
"3. DOES 
THIS COURT'S DECISION IN RMOGA FORECLOSE RELIEF FOR APPELLANTS BY WAY OF A 
REDUCTION IN THEIR NONUNIFORM, AND THEREFORE ILLEGAL, 1985 AD VALOREM TAX 
ASSESSMENTS?

 
 
"4. IF THIS 
COURT'S DECISION IN RMOGA DOES NOT FORECLOSE SUCH RELIEF, IS IT APPROPRIATE THAT 
RELIEF FOR 1985 SHOULD BE DENIED ON THE THEORY THAT IT WOULD BE INEQUITABLE TO 
APPLY RELIEF `RETROACTIVELY?'"

 
 

[¶4.]     Appellee acknowledges 
on affirmative answer to the first issue presented by appellants, and it states 
the issues on appeal as:

 
 
"1. IN 
LIGHT OF THE LIMITED SCOPE OF AN ADMINISTRATIVE PROCEEDING UNDER W.S. 
39-2-201(d) AND THE FAILURE OF APPELLANTS TO RAISE THEIR CONSTITUTIONAL 
OBJECTIONS IN THE APPROPRIATE FORUM, IS THE BOARD'S ORDER VIOLATIVE OF ANY OF 
THE JUDICIAL REVIEW CRITERIA OF W.S. 16-3-114(c)?

 
 
"2. UNDER 
ANY CIRCUMSTANCES, SHOULD THE COURT GRANT THE APPELLANTS RETROSPECTIVE RELIEF IN 
LIGHT OF THE COURT'S PURELY PROSPECTIVE REMEDY IN ROCKY MOUNTAIN OIL AND GAS 
ASSOCIATION v. STATE BOARD OF EQUALIZATION?"

 
 
RETROSPECTIVE 
RELIEF

 
 

[¶5.]     Although appellee 
accepts the 1985 assessment of appellants' property to have been in violation of 
the uniformity requirement of the state constitution pursuant to our holding in 
Rocky Mountain Oil and Gas Association v. State Board of Equalization, 749 P.2d 221 (Wyo. 1988) (hereinafter referred to as "RMOGA"), it points to the following 
language on thereof relative to the date set by the court for application of the 
court-determined assessment ratio of 11.5%, i.e., March 15, 1988, unless the 
legislature earlier chooses to act:

 
 
     "However, this court 
does not choose to move precipitously, and determines only that its action will 
be prospective as applied to the taxation year of 1988 * * 
*."

 
 
Appellee 
asserts that relief to appellants in this case is thereby precluded as being 
retrospective.

 
 

[¶6.]     Pursuant to W.S. 
39-2-201(a)(vi) and W.S. 39-2-201(d),1 appellee valued appellants' 
property for the year 1985. On June 20, 1985, appellants timely2 filed written objections to the 
assessment,3 requesting a reduction in it and a 
hearing. On December 30, 1987, the petition for review of a December 31, 1986 
action of the Ad Valorem Tax Division and of appellee was filed in the district 
court in the RMOGA case. On March 6, 1987, appellee held the requested hearing 
in this case. Since the parties had entered into a joint stipulation of facts, 
the facts were not in dispute.4 On May 19, 1987, appellee filed the 
Findings of Fact, Conclusions of Law and Order in this case. On June 18, 1987, 
appellants timely5 filed their petition for review by 
the district court. Both cases were then before the district court. On August 
10, 1987, the district court certified6 the RMOGA case to this court, and 
this court issued the RMOGA opinion on December 31, 1987. Then, on May 31, 1988, 
the district court dismissed appellants' petition for review of this 
case.

 
 

[¶7.]     The most obvious reason 
that this action is not precluded by the above-quoted statement of this court in 
the RMOGA case relative to the prospective application of the opinion is the 
language of the statement itself. It recites that such application was to be "as 
applied to the taxation year of 1988." Regardless of the institution of the 
RMOGA case or of its holding, the tax assessments for 1987 and previous years 
could not be contested by a taxpayer who had not filed written objections 
thereto as required by W.S. 39-2-201(d) (see note 1, supra) or who had not 
requested court review of appellee's action as required by W.R.A.P. 12.01 (see 
note 5, supra). Except for cases already pending, the only taxable year subject 
to contest based on the precedent of the 
RMOGA opinion was 1988. The RMOGA opinion set the assessment ratio for 1988 
subject to possible adjustment by the legislature. The designation of "the 
taxation year of 1988" was in this context, i.e., not to allow other contests to 
the 1988 assessments. A challenge to tax assessments in previous years which had 
been timely and properly instituted and continued according to statutory and 
rule requirements was not precluded by the language of 
RMOGA.

 
 

[¶8.]     It would not be fair or 
equitable to have a right of appellants, as established by law and rule, be 
subject to termination simply because another case is first placed or reached on 
the court's docket or because appellee chose to first hold a hearing on a case 
filed subsequent to that of appellants. A similar conclusion was reached in 
Adkins v. Sky Blue, Inc., 701 P.2d 549 (Wyo. 1985) (hereinafter referred to as 
"Adkins"). The United States District Court for the District of Wyoming had 
there certified the following question to this court:

 
 
     "Do third persons 
injured by an intoxicated patron of a liquor vendor state a claim for relief 
against the liquor vendor for causes of action that arose prior to McClellan v. 
Tottenhoff, 666 P.2d 408 (Wyo. 1983)?"

 
 

Id. at 
550.

 
 

[¶9.]     In McClellan v. 
Tottenhoff, 666 P.2d 408 (Wyo. 1983) 
(hereinafter referred to as "McClellan"), this court overruled its holding in 
Parsons v. Jow, 480 P.2d 396 (Wyo. 1971) (hereinafter referred to as 
"Parsons"). The Parsons case had followed the common law and refused relief to 
one injured by an intoxicated person who had purchased liquor from the defendant 
bar owner. The opinion in the Parsons case was issued February 4, 1971. This 
court said in Adkins, 701 P.2d at 551:

 
 
     "The rule of McClellan 
v. Tottenhoff, supra, became effective with the issuance of the court's opinion 
on June 28, 1983. The accident in which plaintiff was involved and which is the 
subject of this case, occurred May 5, 1982, more than a year prior to the 
court's pronouncement in McClellan v. Tottenhoff. If the rule announced in 
McClellan v. Tottenhoff, supra, applies prospectively only - that is in the 
future, henceforth and from now on - then plaintiff's case is subject to the 
common-law rule of nonliability for sellers of intoxicating liquor as stated in 
Parsons v. Jow. And, as was held in Parsons v. Jow, it must be 
dismissed."

 
 

[¶10.]  Accordingly, the question certified in 
the Adkins case was answered in the negative.

 
 

[¶11.]  Of course, the major difference between 
McClellan and RMOGA is the fact that McClellan changed the existing law in 
overruling Parsons, whereas RMOGA simply stated the law as it always has been, 
i.e., the state constitution required taxes to be assessed uniformly and 
equally.7

 
 

[¶12.]  In Adkins, 701 P.2d  at 553, the court 
stated that it found "comfort" in the language in 
McClellan

 
 
"wherein we 
stated that `henceforth' this type of case would be determined upon ordinary 
negligence principles. It is held that such terms as `hereafter,' `thereafter,' 
and `shall be' speak to prospective operation. 82 C.J.S. Statutes § 413. 
Henceforth is in the same category."

 
 

[¶13.]  Certainly, the words of RMOGA, 749 P.2d 
at 244:

 
 
"this 
court['s] * * * action will be prospective as applied to the taxation year of 
1988 * * *"

 
 
is as 
specific and determinative as "henceforth."

 
 

[¶14.]  In Adkins, 701 P.2d  at 554, the court 
concluded:

 
 
"We, 
therefore, hold that the rule of McClellan v. Tottenhoff, supra, applies 
prospectively only, to claims or causes of action that accrue after the date of its 
publication, to wit, June 28, 1983." (Emphasis added.)

 
 

[¶15.]  The determination relative to the 
prospective or retroactive scope of an opinion is that of the court. Nehring v. 
Russell, 582 P.2d 67 (Wyo. 1978); Oroz v. Board 
of CountyCommissioners of CarbonCounty, 575 P.2d 1155 (Wyo. 1978); Ostwald v. State, 538 P.2d 1298 (Wyo. 1975). The court 
exercised such determination in RMOGA by directing its application to be 
"prospective as applied to the taxation year of 1988." Such limitation does not 
apply to this matter which was timely instituted over a year before RMOGA was 
instituted and which was timely processed since it was instituted and which 
pertains to the taxable year of 1985.

 
 

[¶16.]  Finally, with reference to retrospective 
relief as it applies to this case, it is emphasized that the RMOGA issues, i.e., 
those pertaining to the ad valorem tax assessments as being in violation of the 
uniformity requirement of the state constitution, are not contested issues in 
this case.8 Accordingly, we are not here 
concerned with res judicata or collateral estoppel.

 
 
PROPRIETY 
OF REVIEW OF APPELLEE'S ORDER

 
 

[¶17.]  Appellee first argues that our review in 
this case should be directed to ascertain whether or not there was substantial 
evidence introduced at the hearing to support the findings there made. The only 
evidence consisted of that contained in a joint stipulation. Appellee did not 
have to make a determination between conflicting facts. The stipulation 
contained ample data reflecting a 1985 assessment of appellants' property at a 
percentage substantially in excess of that applied to property of other 
taxpayers. Appellee has acknowledged the lack of uniformity in the assessment. 
(See note 8, supra.)

 
 

[¶18.]  Appellee's second argument on this issue 
is that a challenge to the assessment ratio, including its constitutionality, 
can only be taken from the action (rule) setting the ratio, and that the only 
challenge available at a hearing pursuant to W.S. 39-2-201(d), as here, is to 
the "factual application of a particular assessment 
methodology."

 
 

[¶19.]  Appellee points to the three-to-two 
opinion by this court in Wyoming Board of Equalization v. State ex rel. Basin 
Electric Power Cooperative, 637 P.2d 248 (Wyo. 1981) (hereinafter referred to as 
"Basin") in support of its argument. The reasoning in Basin may be flawed, but 
it is not necessary to override Basin in order to conclude as we do here. The 
two cases are easily distinguished.

 
 

[¶20.]  The challenge in Basin was to an 
assessment made pursuant to the following rule adopted by 
appellee.

 
 
     "Beginning with tax 
year 1980, the level of assessment for electric utilities under construction is 
the use of twenty percent (20%) multiplier times the installation 
cost."

 
 

Id. at 
249.

 
 

[¶21.]  The challenge in this case is not to any 
properly adopted rule of appellee. The only properly adopted rule pertaining to 
the 1985 assessment of appellants' property provided:

 
 
"[T]he 
Board in accordance with W.S. § 39-1-304(a), Cum. supp. 1984, will review its 
own assessments of property and may make adjustment to accomplish the 
equalization goals expressed in Chapter IX, Section 2 
above."

 
 

[¶22.]  The ultimate goal referred to is the 
laudable one of making the taxes uniform as required by the constitution. The 
"plan," however, was to reach the ultimate goal by reducing the lack of 
uniformity over a span of several years. RMOGA held that the lack of 
constitutional mandated tax uniformity in the interim before the ultimate goal 
of the plan was reached was unlawful. The 1985 assessment ratio fixed by 
appellee pursuant to the "plan" is that here challenged by appellants. The 
above-quoted rule under which the plan was implemented could not be challenged. 
The rule itself did not set a ratio. Under it, appellee could be expected to immediately adjust the ratios for all 
property to a uniform amount. There could be no challenge to a rule in which 
such is the obvious anticipation. But the ratios used by the appellee in making 
the adjustment referred to in the rule were not constitutionally uniform. They 
were established without benefit of the rule-making process and opportunity for 
judicial review. Appellants made use of the only procedure available to protect 
their property interest by making the objection to the assessment and asking for 
a hearing.9 By affording appellants the 
requested hearing on the challenge to the assessment ratio, appellee acted 
contrary to its argument on this issue. It recognized the necessity of affording 
a hearing to a taxpayer protesting an assessment. SeeParadiseValley Country Club v. WyomingState 
Board of Equalization, 748 P.2d 298 (Wyo. 1988).

 
 

[¶23.]  Contrary to the situation in Basin, 
appellants' challenge was here taken to the assessment ratio set by appellee 
other than by rule. It was proper and timely.

 
 

[¶24.]  Accordingly, and contrary to appellee's 
contention, this matter is properly before this court under the review criteria 
of W.S. 16-3-114(c). It provides:

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

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

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

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

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

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

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

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

 
 
REMEDY

 
 

[¶25.]  The result reached by the appellee in the 
hearing on this matter and the dismissal by the district court of appellants' 
petition for review are reversed, and this matter is remanded to the appellee, 
Board of Equalization, with instructions (1) to set the ratio for assessment of 
appellants' property for the taxable year of 1985 at 11.5%; (2) to certify such 
ratio and the valuation as changed through the joint stipulation (see note 3, 
supra) to the affected counties for correction of the assessment of appellants' 
1985 ad valorem taxes; and (3) to refund or credit appellants' account10 with the amount of tax 
overpayment.

 
 

[¶26.]  It is not necessary to here repeat the 
difficult considerations set forth in RMOGA relative to court establishment of 
taxation ratios. The 11.5% ratio to be used in computing appellants' 1985 taxes 
results from that which caused the court to designate it in RMOGA. It is also 
recognized that appellee used the 11.5% ratio in 1985 for assessment of the 
properties of electric companies, airlines, and radio-telephones (RCC's) at the 
same time as it used the 16.5% ratio for appellants' property which generated 
this appeal. Appellee also set the ratio for property of natural gas and liquid 
gas pipelines at 11%, and that for railroads at 10.5%. These settings were made 
as adjustments to the original November 1984 plan "to purportedly achieve 
uniformity of all assessed values by 1987." Following are the assessment 
percentages and valuation bases of that plan prior to adjustments: 

 
 


 
 
1985

1986

1987

Appraisal 
      Base

Non-agricultural 
      Land and Lots

8.0%

9.2%

10.6%

Current 
      Value

Buildings 
      and improvements

25.0%

28.8%

10.6%

1967 
      Base 85 & 86

Personal 
      Property

12.8%

10.9%

10.6%

Current 
      Value

Natural 
      Gas Pipeline

10.2%

10.6%

10.6%

Current 
      Value

Major 
      Utilities

13.3%

11.3%

10.6%

Current 
      Value

Liquid 
      Pipeline

10.2%

10.6%

10.6%

Current 
      Value

Telephones

18.9%

16.0%

10.6%

Current 
      Value

Airlines

12.3%

10.6%

10.6%

Current 
      Value

Railroads

8.3%

9.5%

10.6%

Current 
      Value

REA'sCo-Ops

12.1%

10.6%

10.6%

Current 
      Value

Municipal 
      Electric

11.0%

10.6%

10.6%

Current 
      Value

RadioTelephone

11.0%

10.7%

10.6%

Current 
      Value

Agricultural 
      Land

8.0%

9.2%

10.6%

Productive 
      Value

Large 
      Industrial Facilities

8.3%

9.5%

10.6%

Current 
      Value

Miscellaneous

11.1%

10.6%

10.6%

Current 
      Value

 
 

[¶27.]  If appellee had not adjusted the 
percentages for seven of the categories in the original "plan," we could use the 
10.6% ratio as that determined by appellee to be necessary for uniformity. Since 
adjustments were made to the 1985 percentages, albeit not to all categories of 
property, it would not be appropriate to accept appellee's projection as 
accurate or even to consider it in the nature of estoppel.11

 
 

[¶28.]  Reversed and remanded to the 
agency.

 
 
FOOTNOTES

 
 

1 W.S. 39-2-201 
provides in pertinent part:

 
 
     "(a) The board shall 
annually value the following property for taxation:

 
 
* * 
* * * *

 
 
     "(vi) Property of 
telephone and telegraph companies which have more than two thousand dollars 
($2,000.00) in assessed value;

 
 
                                                            
* * * * * *

 
 
     "(d) Following 
determination of the taxable value of property subject to subsection (a) of this 
section, the board shall notify the taxpayer of the value assessed by mail. The 
person assessed may file written objections to the assessment within fifteen 
(15) days following receipt of notice and appear before the board at a time 
specified by the board."

 
 

2 The first Conclusion 
of Law in that Findings of Fact, Conclusions of Law and Order on which this 
appeal is generated provides:

 
 
"1. Petitioners timely 
filed their objections to the valuation of their taxable property as determined 
by the Ad Valorem Tax Division in accordance with W.S. 
39-2-201(d)."

 
 

3 Appellants' objection 
was to the amount at which their property was valued and to the ratio of 16.5 
percent applied to that value. On July 14, 1986, the parties entered into a 
partial settlement whereby the value of the property was reduced from 
$73,500,000 to $64,680,000, leaving only the issue concerning the propriety of 
the ratio for determination at the hearing.

 
 

4 The only additional 
evidence received at the hearing was (1) a letter exhibit from a representative 
of appellants confirming acceptance of the stipulation - the stipulation was 
signed by the attorney for appellant and by an assistant attorney general 
representing the Ad Valorem Tax Division of the state - and (2) an exhibit 
consisting of a statistical compilation of residential sales made since 
enactment of the Real Estate Disclosure Law for the purpose of supplying a 
factual basis for the statement in the stipulation relative to disparity of 
valuation of residential properties.

 
 

5 W.R.A.P. 12.01 
provides that judicial review of an administrative action by a district court 
shall be as provided in Rule 12. W.R.A.P. 12.04 provides in pertinent 
part:

 
 
"[T]he petition for 
review shall be filed within thirty (30) days after written, certified notice to 
all parties of the final decision of the agency * * *."

 
 

6 RMOGA came to this 
court on certification from the district court pursuant to W.R.A.P. 12.09. 
W.R.A.P. 12.09 provides in pertinent part:

 
 
     "If after such review, 
the district court concludes the matter to be appropriate for determination by 
the Supreme Court, the district court may certify the case to the Supreme 
Court."

 
 

7 Justice Thomas 
pointed out in his concurring opinion in RMOGA that its holding had been 
predictable at least since Bunten v. Rock Springs Grazing Association, 29 Wyo. 
461, 215 P. 244 (1923). In Bunten, the ad valorem tax procedure was considered 
at length by Justice Blume. At 215 P. , he noted that a departure from 
assessment at a uniform rate would violate the uniformity requirement of the 
constitution, and that "[s]uch discrimination may arise in various ways, for 
instance, by the adoption of a wrong or illegal rule, principle or method * * 
*."

 
 

8 Appellee so 
acknowledged in oral argument, and it did not address the issue in its brief or 
in oral argument.

 
 

9 The due process 
clauses of the United States Constitution and Wyoming Constitution require the 
availability of a hearing when a protected property interest is involved. Board 
of Regents of State Colleges v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972).

 
 

10 The record does not 
reflect whether or not, at the time appellants objected to the assessment, funds 
were reserved or placed in escrow pending resolution of the 
objection.

 
 

11 Of interest is the 
fact that if the 1985 adjustments to the selected categories (other than the 
telephone category) were carried to the 1986 and 1987 projections, the 10.6% 
projection for such categories in 1987 would be 11.5%. The record does not 
reflect whether it was contemplated that the seven already-adjusted categories 
would be again adjusted to make a uniform ratio of 10.6% by 1987 or whether it 
was contemplated to adjust the other categories to a 1987 uniform ration of 
11.5%.