No. 51-417 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

EVANS PRODUCTS COMPANY, a Delaware Corporation, 

Plaintiff and Respondent, 

MISSOULA COUNTY, a municipal corporation of 

the State of Montana; FERN HART, as Clerk 

and Recorder & Treasurer, et al., 

Defendants and Appellants. 

Appeal from: District Court of the Fourth Judicial District, 

In and for the County of Missoula 

Honorable John Henson Judge presidinq. 

Counsel of Record: 

For Appellants: 

Robert L. Deschamps,III, County Attorney, Missoula, Montana 

R. Bruce McGinnis, Dept. of Revenue, Helena, Montana 

For Respondent: 

Mulroney, Delaney & Dalby, Missoula, Montana 

Submitted on briefs: September 13, 1982 

Decided: December 3, 1982 

Filed: $kc-'j i98Z 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Missoula County and the State Department of Revenue appeal 

from a summary judgment issued by the District Court of the 

Fourth Judicial District, Missoula County, in which the 

plaint iff , Evans Products Company, was refunded real property 

taxes it had paid under protest. 

Evans Products Company (Evans) operated a plywood and wood 

products mill in Missoula County during the tax years 1977, 1978, 

and 1979. 

In 1978 and 1979, Evans received a tax assessment list, 

stating that the market value for Evans1 buildings was $396,050, 

and the taxable value was $33,862. Evans paid both the 1978 and 

1979 taxes on its buildings based on these figures. 

Missoula County discovered that it had miscalculated the 

market value assigned to Evans1 buildings for the years 1978 and 

1979. On December 27, 1979, the Missoula County Assessor's 

Office sent Evans the following notice and explanation of the 

error: 

"This is to inform you that in 1978 there was 

an incorrect assessment of the Evans Products 

Co. improvements on N.P. land here in 

Missoula. Prior to 1978 the improvement 

values shown on assessment notices were 

assessed values and were 40% of full or 

appraised value. Then 30% of the assessed 

value was used to arrive at a taxable value 

which equalled 12% of full value. In 1978, as 

a result of the state-wide reappraisal of real 

property this - - - - method - - - - - was changed so that the - - - - -- - - - - - - - - 

figure shown on the assessment notice would-be - - -- - - - -- - - fuli marke-t --value and then 8;55% would be - - -- appi-ied to arrive at -a-taxable -value. Because -- - 

your--plant-had not been reappraised at the 

time the 1978 assessments went out,- the 197-7 

assessed value o£ -the improv~efis--was inad- -- -- 

vertently - - carried forward---as full --ma-rket - - - -- -- value. ~hi-s--?igure was $396,050 when it 

should have been $990,125 as shown on the 1979 

assessment. This resulted in an underassessment of $594,075 with a taxable value of 

$50,794. 

"1978 method used in error: 

$396,050 (assessed value) x 8.55% = $33,862 

taxable value 

"Should have been t 

$990,125 (full value) x 8.55% = $84,656 

taxable value 

-2- 
"A corrected 1978 assessment notice is 

enclosed with this letter and a supplemental 

tax bill will be sent to you for the balance 

in the amount of $11,507.89." 

A new 1979 assessment notice was also sent Evans with the same 

corrections. 

Missoula County admittedly made the error in assigning the 

proper market value to Evans' building. The error was made in 

1978, when all the real property and improvements in the county 

were being reappraised, and at the same time the county was 

making a change-over to a new data processing system. 

Prior to 1978, the Missoula County Assessor had only received 

assessed values (40 percent of market value) of property from the -- - 

county appraisers and with these figures computed the taxable 

value. In 1978, all of these assessed values were keypunched 

into the new data processing system: values that were to be immediately replaced by the market value when a reappraisal was - . -- - -. - 

done. For those properties missed by the reappraisal, the 

assessed value had to be multiplied by 2.5 in order - to - - - carry - -. - . - - . - for- - - 

ward the market value. - - .. -- . . -- -- 

Evans' property was never reappraised. Evans' old assessed 

value was erroneously carried forward as the full market value. 

Someone in the Assessor's Office, whoever keypunched in the 

information, had failed to multiply the assessed value by 2.5 in 

order to carry forward the true market value, resulting in a 

significant tax decrease for Evans. 

When Evans received the notices to pay increased taxes for 

the year 1978 and 1979, it paid them under protest. In 1980, 

Evans filed a complaint seeking refund of the taxes paid under 

protest. Both parties moved for summary judgment, which was 

granted to Evans. 

On appeal, Missoula County and the Department of Revenue 

(DOR) admit that the taxes should be refunded at this time because 

the county initially failed to follow the procedures set down in 

section 15-8-601, MCA. Sect ion 15-8-601 provides that whenever 

the DOR discovers that any taxable property has been "erroneously 
assessed" it may reassess the property. DOR is given ten years 

to reassess the property. Subsections (2) and (3) of section 

15-8-601, MCA, then provide that when the DOR proposes to 

increase the prior valuation, it must give notice of the proposed 

change, with the opportunity for a conference and appeal to the 

state tax appeal board. 

Here, Evans was not given the proper notice nor the opportunity for a conference and an appeal to the state tax appeal 

board. 

Because DOR admits that the taxes should have been refunded 

we must affirm that part of the District Court's summary 

judgment. However, we reverse that part of the judgment which 

would preclude DOR from proceeding anew under section 15-8-601, 

MCA. 

Evans claims that the DOR is precluded from now proceeding 

under section 15-8-601, MCA, because initially the proper procedures were not followed. We resolved this issue in dicta of the 

recent case Balock v. Town of Melstone (1980), I ... -.- Mont. - .- -- . . 

607 P.2d 545, 37 St.Rep. 288. While Balock directly involved - - - - -. - .- - - 

taxation as a result of annexation, we noted that a finding of 

improper procedure does not prohibit the collect ion of disputed 

taxes under section 15-8-601, MCA: 

"As a practical matter, finding the improper 

procedure was followed by the respondents does 

not prohibit the collection of the disputed 

taxes. Section 15-8-601, MCA, allows the 

Department of Revenue to reassess property 

erroneously assessed within the preceding ten 

years. The section sets up procedural guidelines for correcting past improper assessments. The respondents here can follow the 

statutory procedures and collect the taxes on 

appellants' property for the years in 

question." 607 P.2d at 549 

DOR may therefore proceed properly under section 15-8-601, MCA, 

assuming 15-8-601, MCA, applies to the type of error involved 

here. 

Section 15-8-601 (I), MCA, provides : 

"Whenever the department of revenue discovers 

that any taxable property of any person has in 

any year escaped assessment, been erroneously -- - - - -- - -- - - - - - - - .. 
assessed, or been omitted from taxation, the 

department may assess the same providing the 

property is under the ownership or control of 

the same person who owned or controlled it at 

the time it escaped assessment, was erroneously assessed, or was omitted from taxation ." 

Here, Evans claims that DOR may not proceed under section 

15-8-601, MCA, because the error is not an "erroneous assessment" 

but rather an "erroneous appraisal. " This technical distinct ion 

drawn by Evans is not correct. 

The record simply does not support the statements made by 

Evans in its brief that the error here occurred in the Missoula 

County Appraiser's Off ice and not in the Assessor's Off ice. 

Neither does the record support the statement made by Evans that 

this is solely an "appraisal" error. The error here arose 

because a keypuncher in the County Assessor's Office failed to 

multiply the assessed value by 2.5. An incorrect market value 

was theref ore carried forward. 

This error was merely a clerical one. It was not an error, 

as characterized by Evans, of undervaluation during the process 

of reappraisal. Such a clerical error falls under the plain 

language meaning of "erroneous assessment" as it is used in section 15-8-601, MCA. 

Evans argues that this case is similar to those cases where a 

county assessor has, through an error in - judgment, . - - - - - - - undervalued 

property. The error here was not one of judgment, but, as noted 

above, only a miscalculation. The Florida Supreme Court has 

expressed well the difference be tween valuation resulting from an 

error in judgment and one resulting from a clerical error: 

"We must keep in mind the distinction between 

changes and ' miscalculations' by the assessor 

which 'up ' the amount previously assessed 

after tax roll certification, and the 

situation here where there has been no billing 

at all on the improvement (or it could be a 

separate, ' overlooked' parcel of land ) which 

has been completely excluded from the tax 

roll. This is obviously a mistake, error, 

oversight, which cannot be prejudicial to the 

taxpayer as in those cases where a change in -- - - -- -- - -- judgment by the tax assessor was involved, - .- -- - belatedly increasing the valuation which had 

in fact earlier been assigned, and entered on 

the tax roll. . . 1 I 
Korash v. Mills (1972), _ Fla . -- 263 So.2d 579, 581. 

Even if the clerical error can be termed solely an 

"appraisal" error, Evans argument fails. The bulk of authority 

and prior Montana case law suggest that appraisal, the setting of 

market value, is an integral part of the taxation process. Am. 

Jur.2d State and Local Taxation, Section 704; and Larson v. State 

(1975), 166 Mont. 449, 534 P.2d 854. In - Larson, .--. - - - we stated that 

the suggested distinction between the statutory use of the word 

"tax" and the operative fact of an "appraisal" was without 

substance because the appraisal would have been used as the basis 

for the tax computation. 534 P.2d at 858. Likewise, here, the 

mistakenly used assessed value was the basis for the computation 

of the taxable value. 

Whether the error is termed an "assessment" error, or an 

"appraisal" error, because it was a clerical error made while 

assessing the taxable value on Evans' property, it was an 

"erroneous assessment" within the meaning of section 15-8-601, 

MCA. 

We therefore affirm the summary judgment to the extent that 

the taxes must now be refunded to Evans because the mandatory 

procedures of section 15-8-601, MCA, were not initially followed. 

We reverse the District Court's decision to the extent that it 

would preclude DOR from now proceeding properly under section 

15-8-601, MCA. /-