FILED

March 17, 1997

Cecil W. Crowson

Appellate Court Clerk

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

BETTY CORLEW THOMAS, ) FOR PUBLICATION

 )

 ) FILED: MARCH 17, 1997

Petitioner-Appellant, ) 

 ) DAVIDSON COUNTY

v. ) 

 ) HON. C. ALLEN HIGH,

STATE BOARD OF EQUALIZATION; ) CHANCELLOR

KELSEY JONES, Executive Secretary )

State Board of Equalization; ) NO. 01-S-01-9601-CH-00002

HELEN JAMES, Administrative Law )

Judge, State Board of Equalization; )

METROPOLITAN GOVERNMENT OF )

NASHVILLE AND DAVIDSON COUNTY; )

PHIL BREDESEN, Mayor, Metropolitan )

Government of Nashville and )

Davidson County; )

METROPOLITAN BOARD OF EQUALIZATION )

FOR NASHVILLE AND DAVIDSON COUNTY; )

JO ANN NORTH, Assessor of Property, )

Metropolitan Government of )

Nashville and Davidson County; and )

CHARLIE CARDWELL, Trustee, )

Metropolitan Government of )

Nashville and Davidson County, )

 )

 Respondents-Appellees. )

For Appellant: For Appellees:

JOSEPH H. JOHNSTON JOHN KNOX WALKUP

Nashville, TN Attorney General and Reporter

CHRISTINE LAPPS

Assistant Attorney General

Nashville, TN

OPINION

REVERSED AND REMANDED BIRCH, C.J.
1 As is discussed in more detail infra, Thomas’s appeal to the

state board of equalization was dismissed because she did not pay

the undisputed portion of her property tax when due.

2

This cause chronicles the efforts of Betty Corlew Thomas,

the appellant, to challenge the valuation placed on her home by the

Tax Assessor for Metropolitan Nashville-Davidson County. In the

initial stages, Thomas proceeded without a lawyer; it was during

this period of self-representation that the administrative judge,

employed by the state board of equalization (“state board”),

dismissed her appeal.1 Thomas challenged this action, but in the

process, she skipped two of the administrative steps that she could

have taken and sought judicial review in the Chancery Court.

Finding that Thomas had failed to exhaust her administrative

remedies, the trial court dismissed her appeal. The Court of

Appeals affirmed the trial court’s judgment.

Before this Court, Thomas contends first that she was not

required by applicable statutes to exhaust her administrative

remedies in order to obtain judicial review of the dismissal of her

appeal. Second, and alternatively, she insists that even if

exhaustion were ordinarily required, exhaustion was excused in her

case because the pertinent issue was primarily one of law. Third,

Thomas asserts that she was deprived of her due process rights

because the state board’s printed notice failed to inform her that

the consequence of non-payment of the undisputed portion of the

property tax by the due date would be dismissal of her appeal.

Because the statute does not require Thomas to exhaust

her administrative remedies and because the state board provided
3

her inconsistent and misleading information regarding certain

aspects of the administrative appeal process, we reverse the

judgment of the Court of Appeals and remand the cause to the state

board for a hearing to determine the proper valuation of her

property for the year 1993.

I

The procedure prescribed for the appeal of the property

tax valuation of one’s real estate by the assessor is a tedious

one. It is better understood if we enumerate the steps in the

process first and then detail the events that occurred in this

case.

By statute, an aggrieved taxpayer may appeal the

assessor’s valuation of property to the county board of

equalization. Tenn. Code Ann. § 67-5-1402. Unless modified by the

state board, the county board of equalization’s determination is

final. Tenn. Code Ann. § 67-5-1411. 

Pursuant to statutory authority, the state board has

established a three-step procedure to consider and dispose of

appeals like that of Thomas’s, The first step provides the

dissatisfied taxpayer with a hearing before an administrative

judge. After due consideration, the administrative judge makes a

recommendation to the assessment appeals commission. A taxpayer

wishing to contest this recommendation may petition the commission.

If the taxpayer is unsuccessful and the recommendation of the
2 This is the value of the property that was ascertained by the

assessor pursuant to Tenn. Code Ann. §§ 67-5-601 and -602. Such

valuations are determined from “evidence of [the property’s] sound,

intrinsic and immediate value, for purposes of sale between a

willing seller and a willing buyer. . . .” Tenn. Code Ann. § 67-5-

601. As Thomas’s property is residential, it is then assessed at

25% of its value. Tenn. Code Ann. § 67-5-801(a)(3). This assessed

value is then used to determine the amount of the property tax due.

3 This is the correct title of the county board of equalization

for Metropolitan Nashville-Davidson County.

4

administrative judge is accepted, the taxpayer may appeal the

commission’s decision to the state board; however, the statute also

provides that the decision of the commission is subject to judicial

review, Tenn. Code Ann. § 67-5-1502(k), as is any decision of the

state board. Tenn. Code Ann. § 67-5-1511.

Early in 1993, Thomas was informed that the valuation of

her residence for property tax purposes was $205,000 for the 1993

tax year.2 Thomas appealed this valuation to the Metropolitan

Board of Equalization for Nashville and Davidson County3 and

asserted that as of January 1, 1993, the valuation of her property

should have been $100,000. The Metropolitan Board of Equalization

refused to grant Thomas relief. Subsequently, in September of

1993, she appealed to the state board.

Tennessee Code Annotated § 67-5-1512(b)(1)(B) provides

that it is a “condition for appeal” that the undisputed portion of

the property tax be paid by the delinquent date and that no

delinquent taxes accrue on the property. Because the 1993 property

taxes were not delinquent until March 1, 1994, the state board did

not require Thomas to pay the undisputed portion of the tax when

she filed her appeal in September 1993. When she filed her appeal,
4 The substance of this “misleading information” is not

expressed clearly in the record.

5

Thomas received written information about her appeal. Included in

the information was the following notice:

NOTICE REGARDING PAYMENT OF TAXES

WHILE AN APPEAL IS PENDING.

 The law requires that you pay

at least the undisputed portion of

your taxes prior to the delinquency

date in order to file an appeal. By

so doing you avoid the usual penalty

and interest for delinquent taxes.

When a final certificate of

assessment is issued by the Board of

Equalization or Assessment Appeals

Commission, the taxpayer will

receive a refund of any overpayment

or will owe the amount of any

underpayment of taxes, along with

interest at the rate provided by

law. (Emphasis added) 

On February 10, 1994, Thomas was notified that her appeal

would be heard on March 11, 1994. At the hearing on March 11,

1994, the administrative judge dismissed Thomas’s appeal because

she had not paid the undisputed portion of her property tax. 

Thomas immediately paid the undisputed portion of the

tax. On March 30, 1994, Thomas filed a timely petition for

reconsideration and explained that she had not paid her 1993

property tax earlier because she had received “misleading

information” from employees of the state board.4 

On March 31, 1994, the administrative judge found that

Thomas had been fully informed of the requirement that the

undisputed portion of the tax be paid prior to the due date (March
6

1) in order to keep her appeal alive. On this basis, the

administrative judge denied Thomas’s petition for reconsideration.

Specifically, the administrative judge relied on the written

“instructions accompanying all appeal forms obtained from the State

Board of Equalization” and quoted the notice regarding the payment

of taxes while an appeal is pending. The order denying Thomas’s

motion for reconsideration stated that Thomas could appeal both the

administrative judge’s dismissal and the denial of the petition for

reconsideration to the assessment appeals commission within fifteen

days. Thomas did not appeal the administrative judge’s decision to

the assessment appeals commission or to the state board.

On June 9, 1994, the assessment appeals commission of the

state board issued a final certificate dismissing Thomas’s appeal

and affirming the valuation of the property as previously

determined by the county board of equalization. This “Official

Certificate of the Assessment Appeals Commission Relative to 1993

Property Assessments” included the following provisions:

In accordance with the provisions of

Tennessee Code Annotated Section 67-

5-1512 and Section 4-5-314, the

Assessment Appeals Commission hereby

certifies the ad valorem assessment

for the property described below.

The assessment is predicated on the

recommendations of the State Board

of Equalization’s Administrative

Judge and constitutes the final

judgment of the Commission.

. . . .

Any party dissatisfied with this

decision is entitled to judicial

review, proceedings for which are

instituted by filing a petition in

Chancery Court within (60) days of
7

the date of this certificate.

(Emphasis added) 

On July 19, 1994, Thomas, with the assistance of counsel,

filed a petition for judicial review in the Chancery Court of

Davidson County pursuant to Tenn. Code Ann. § 67-5-1511. In her

petition, Thomas prayed:

That the Orders denying Petitioner a

hearing for her alleged failure to

comply within [sic] T.C.A. Section

67-5-1512(b)(1)(B) be vacated and

the matter remanded to the

Respondents State Board of

Equalization, Kelsie Jones and Helen

James, for a full hearing on the

merits on the grounds that these

Respondents have denied Petitioner

Due Process guaranteed under the

14th Amendment.

The state board moved to dismiss Thomas’s petition,

contending that “the plaintiff has failed to exhaust her

administrative remedies in this matter” and that the trial court,

therefore, lacked subject matter jurisdiction pursuant to Rule

12.02(1) and 12.02(6) of the Tennessee Rules of Civil Procedure.

On October 31, 1994, the trial court concluded that “the

Plaintiff failed to exhaust her remedies at the administrative

level” and granted the state board’s motion to dismiss Thomas’s

petition. The Court of Appeals affirmed.

II

Generally when a statute provides an administrative

remedy, one must exhaust this administrative remedy prior to
5 When not mandated by statute, exhaustion is a matter of

judicial discretion. Reeves v. Olsen, 691 S.W.2d 527, 530 (Tenn.

1985). 

8

seeking relief from the courts.5 Bracey v. Woods, 571 S.W.2d 828,

829 (Tenn. 1978); Tennessee Enamel Mfg. Co. v. Hake, 183 Tenn. 615,

194 S.W.2d 468 (1946). The exhaustion doctrine serves to prevent

premature interference with agency

processes, so that the agency may

(1) function efficiently and have an

opportunity to correct its own

errors; (2) afford the parties and

the courts the benefit of its

experience and expertise without the

threat of litigious interruption;

and (3) compile a record which is

adequate for judicial review. In

addition, an agency has an interest

in discouraging frequent and

deliberate flouting of the

administrative process.

2 Am.Jur.2d Administrative Law § 505 (1994)(footnotes omitted). 

In Tennessee, exhaustion is not statutorily required

unless the statute “by its plain words” requires it. Reeves v.

Olsen, 691 S.W.2d 527, 530 (Tenn. 1985). Although the statutes

expressly grant the board the authority to create the assessment

appeals commission and to designate administrative judges to make

preliminary recommendations, nothing in the statute expressly

requires the taxpayer to avail herself of these steps. Rather, the

statute providing for appeal to the assessment appeals commission

is worded permissively:

If an exception to the recommendation of the

hearing examiner is taken by either the

property owner or. . .assessment appeals

commission does not adopt the recommendation
9

of the hearing examiner, a hearing shall be

scheduled. . . .

Tenn. Code Ann. § 67-5-1506. As for an appeal to the board from

the decision of the assessment appeals commission, the statute

expressly provides that the “certificate of assessment or other

final certificate of [the assessment appeals commission’s] action”

is subject to judicial review in the same manner as is a final

action by the board. Tenn. Code Ann. § 67-5-1502(k). Thus, any

appeal to the board from an action of the assessment appeals

commission is clearly discretionary. In our view, Thomas was not

required to exhaust the administrative remedies internal to the

board. Thomas’s petition was properly before the trial court, and

the board’s motion to dismiss should have been denied.

III

Neither the trial court nor the Court of Appeals

addressed the propriety of the administrative judge’s dismissal of

Thomas’s appeal. However, the issue has been raised and briefed by

the parties, and we will address it. Tenn. R. App. P. 13(a). 

Thomas insists that the state board failed to adequately

notify her that her appeal was subject to dismissal should she fail

to pay the undisputed portion of the tax by the due date. Because

the state board failed to notify her of these consequences, she

urges that the dismissal violated her due process rights under the

Fourteenth Amendment to the United States Constitution. 
6 Subdivision (b)(1)(C) does not apply in Davidson County.

1 0

Tenn. Code Ann. § 67-5-1512(b)(1)(B) states:

Except as provided in subdivision

(b)(1)(C), it is a condition for

appeal that the undisputed portion

of the tax levied be paid before the

delinquent date of the tax and that

no delinquent taxes have accrued on

the property.6

The phrase “condition for appeal” could refer to either filing an

appeal or maintaining an appeal. It is int erest ing to note that

the state board’s own notice interprets the statute as imposing the

condition on the fili ng of the appeal. By contrast, the state

board interpreted the statute as imposing the condition on the

maintenance of an appeal in its dismissal of Thomas’s appeal and in

its arguments to this Court. The statute is simply not clear.

Furthermore, the statute does not prevent the reinstatement of an

appeal when the taxpayer pays the undisputed portion of the tax in

a timely manner after the entry of an initial order dismissing the

appeal. 

We do not find that the facts of this case rise to the

level of a constitutional due process violation. However, we do

find that, given the ambiguity of the statute, Thomas’s course of

action was entirely reasonable, and she should not be penalized for

it. When agencies undertake to provide information to parties to

administrative proceedings, that information should be complete and

accurate. Simmons v. Traughber, 791 S.W.2d 21, 24-25 (Tenn. 1990).
1 1

Accordingly, the decision of the Court of Appeals is

reversed. The cause is remanded to the state board of equalization

for a hearing to determine the proper valuation of Thomas’s

property. Costs are taxed to the respondents.

__________ __________ _______________ _

ADOLPHO A. BIRCH, JR., Chief Justice

CONCUR: DROWOTA, ANDERSON, REID, JJ.