2019 UT App 87

THE UTAH COURT OF APPEALS

A-FAB ENGINEERING,

Appellant,

v.

PROPERTY TAX DIVISION OF THE

UTAH STATE TAX COMMISSION,

Appellee.

Opinion

No. 20180014-CA

Filed May 23, 2019

Second District Court, Farmington Department

The Honorable David M. Connors

No. 170700397

Lynn Kingston, Attorney for Appellant

Sean D. Reyes, Erin T. Middleton, and Chauntel M.

Lopez, Attorneys for Appellee

JUDGE DAVID N. MORTENSEN authored this Opinion, in which 

JUDGES JILL M. POHLMAN and DIANA HAGEN concurred.

MORTENSEN, Judge:

¶1 “[I]n this world nothing can be said to be certain, except 

death and taxes.”1 Nearly as certain is the procedural bar 

 

1. Like many good quotations, there is some dispute as to this 

quotation’s origin. The Yale Book of Quotations attributes the 

saying to Christopher Bullock. See Fred R. Shapiro ed., The Yale 

Book of Quotations 610 (Yale Univ. Press 2006) (discussing 

Christopher Bullock, The Cobler of Preston (1716) (“Tis impossible 

to be sure of anything but Death and Taxes.”)). But since there is 

apparently little doubt as to the use of this phrase in a letter from 

Benjamin Franklin, we will lay our attribution there. See Letter

(continued...)
A-Fab Engineering v. Tax Commission

20180014-CA 2 2019 UT App 87

attendant to court challenges when a party has failed to exhaust 

administrative remedies, resulting in an absence of jurisdiction.

A-Fab Engineering (A-Fab) challenges two property tax 

assessments levied in 2012 and 2013 by the Utah State Tax 

Commission (Commission). The Commission dismissed A-Fab’s 

administrative appeal as untimely. A-Fab then petitioned the 

district court for review of the Commission’s decision. The

district court summarily dismissed the petition because (1) 

A-Fab did not timely exhaust its administrative remedies; and 

therefore, the court lacked subject matter jurisdiction; and (2) 

A-Fab was not entitled to equitable tolling of the deadline to file 

an administrative appeal. We affirm.

BACKGROUND2

The Property

¶2 A-Fab is a Utah corporation that fabricates, refurbishes, 

and sells equipment. In or before 2007, A-Fab acquired and 

rebuilt a “long-wall mining system” (Property). In September 

2007, A-Fab sold the Property to C.W. Mining (CW). The sale 

was financed through a capital lease. In January 2008, however,

CW involuntarily entered into bankruptcy, and the bankruptcy 

court asserted jurisdiction over the Property.

 

(...continued)

from Benjamin Franklin to Jean-Baptiste Le Roy (Nov. 13, 1789), 

in 10 The Writings of Benjamin Franklin 68, 69 (A. Smyth ed., 1907).

2. Because this is an appeal from summary judgment, “we view 

the facts and all reasonable inferences drawn therefrom in the 

light most favorable to the nonmoving party and recite the facts 

accordingly.” Ockey v. Club Jam, 2014 UT App 126, ¶ 2 n.2, 328 

P.3d 880 (cleaned up).
A-Fab Engineering v. Tax Commission

20180014-CA 3 2019 UT App 87

¶3 In December 2008, A-Fab filed a proof of claim in the 

bankruptcy proceeding, asserting that it owned the Property, 

and sought “substantial amounts for lease rejection damages.”

The trustee of the bankruptcy estate responded by filing a 

complaint against A-Fab that included, among eleven claims for 

relief, a claim of ownership over the Property. In 2010, while the 

Property dispute was still pending, the bankruptcy court 

ordered that A-Fab could take possession of the Property, but 

that the Property would still be subject to the bankruptcy 

trustee’s authority before it could be sold or transferred in any 

way. A-Fab took possession of the Property shortly thereafter.

¶4 A-Fab regained full ownership rights to the Property in 

2014 when it entered into a settlement agreement with the 

bankruptcy estate. Under the terms of the settlement, the 

bankruptcy estate relinquished any and all claims to the

Property in return for a $225,000 payment from A-Fab. The 

bankruptcy court approved the settlement agreement in 

November 2014.3 In the motion to approve the settlement 

 

3. A-Fab argued for the first time at oral argument that it did not 

regain ownership rights to the Property until early 2016. 

However, “[w]e do not address issues raised for the first time 

during oral argument,” Porenta v. Porenta, 2017 UT 78, ¶ 33, 416 

P.3d 487, and, in any event, this argument is unsupported by the 

record and at odds with the position taken by A-Fab below and 

in briefing before this court. First, the record demonstrates that 

the settlement was executed in October 2014 and the bankruptcy 

court approved the settlement in November 2014. Second, A-Fab 

stated in its petition for review to the district court, “On October 

29, 2014, A-Fab entered into a settlement agreement with the 

Trustee of the CW estate, in which the Trustee relinquished his 

claim on the Property.” Third, in its opposition to the 

Commission’s motion for summary judgment, A-Fab did not 

dispute the terms of the settlement agreement and affirmatively 

(continued...)
A-Fab Engineering v. Tax Commission

20180014-CA 4 2019 UT App 87

agreement, the bankruptcy trustee noted that “A-Fab asserted 

that it owned the [Property] and was leasing it to [CW] under a 

purported September 1, 2007 lease” and “A-Fab has asserted that 

it incurred substantial removal, storage and preservation costs, 

including the payment of personal property taxes, in connection 

with . . . the [Property].” (Emphasis added.)

The Property Tax Assessments

¶5 As required by Utah Code sections 59-2-201 and 59-2-

202(1), A-Fab completed and filed its 2012 annual return for 

assessment of personal property (Return) with the Commission 

on March 1, 2012. A-Fab’s 2012 Return listed the Property as 

being “subject to assessment by the State Tax Commission.”4

Based on the 2012 Return, the Commission prepared a notice of

assessment and mailed it—to the address provided by A-Fab on 

its 2012 Return—on May 1, 2012.

¶6 On February 27, 2013, A-Fab filed its 2013 Return and 

again listed the Property as being “subject to Assessment by the 

State Tax Commission.” A-Fab attached to the 2013 Return a

letter requesting that the Commission reconsider the value of the 

 

(...continued)

alleged that upon the agreement’s approval in November 2014, it 

“essentially purchased the [P]roperty” back from the bankruptcy 

estate. Finally, A-Fab concedes these points in its opening brief 

without arguing that it did not actually regain its rights to the 

Property until 2016.

4. We note that A-Fab’s 2012 Return includes only the statement 

“* NO ADDITIONS * . . . * NO DELETIONS *”—however, it was 

undisputed below that the Property was listed on previous 

returns for assessment. In other words, it is an undisputed fact 

that the Property was included on A-Fab’s 2012 Return.
A-Fab Engineering v. Tax Commission

20180014-CA 5 2019 UT App 87

Property. In this letter, A-Fab included an independent appraisal 

of the Property and “urge[d] the Tax Commission to reconsider 

its 2013 assessment of the value of [the Property].” The 

Commission prepared a notice of assessment and mailed it on 

May 1, 2013, to the address provided by A-Fab on the 2013 

Return. A-Fab did not appeal or pay the 2012 and 2013 

assessments (Assessments) within the prescribed tax years.

¶7 A-Fab appealed the Assessments in December 2016. 

Earlier that year, A-Fab had “inquired of Carbon County 

whether there were any taxes owed [on the Property] before 

2014”—when A-Fab’s ownership rights to the Property were 

restored—and Carbon County responded that there were not.

On June 15, 2016, however, Carbon County mailed a delinquent 

tax notice, based on the Assessments, to the address provided by 

A-Fab on its Returns. A-Fab initially raised a challenge to the 

delinquent tax notice with Carbon County, but the county

instructed A-Fab that a formal appeal would need to be taken up 

with the Commission.

The Proceedings

¶8 On December 6, 2016, A-Fab filed an administrative 

appeal with the Commission challenging the Assessments. The 

Commission issued an order to show cause directing A-Fab to 

explain why its appeal should not be dismissed for failure to 

timely file.5 In its answer, A-Fab argued that equitable tolling 

should extend the deadline to appeal because the Property was

subject to CW’s bankruptcy proceedings until October 2014. The 

 

5. To timely challenge the Assessments, A-Fab was required to 

request a hearing “on or before the later of June 1 or a day within 

30 days of the date the notice of assessment is mailed by the 

commission.” Utah Code Ann. § 59-2-1007(1)(a) (LexisNexis 

2008) (emphasis added).
A-Fab Engineering v. Tax Commission

20180014-CA 6 2019 UT App 87

Commission rejected A-Fab’s argument concluding that A-Fab

failed to timely appeal the Assessments and further failed to 

“demonstrate extraordinary circumstances or due diligence 

sufficient” to toll the deadline to appeal. Specifically, the 

Commission concluded that A-Fab knew that it included the 

Property on its 2012 Return and 2013 Return and therefore knew 

the Property would be assessed for those years. The Commission 

also decided that A-Fab was not excused from missing the 

deadline to appeal because it had regained full ownership rights 

to the Property in October 2014 and “yet it still did not file this 

appeal until December 6, 2016.” A-Fab then petitioned the 

district court for review of the Commission’s decision.

¶9 The parties filed cross-motions for summary judgment in 

the district court. The Commission argued that “A-Fab’s petition 

should be dismissed because it did not exhaust its administrative 

remedies by filing a timely appeal to the Commission” and that 

“equitable tolling would be inappropriate because A-Fab waited 

until December 2016—more than two years after it settled with 

the bankruptcy trustee—to appeal the [Assessments].” A-Fab

argued that the Commission lacked the authority to assess the 

Property and that the untimely administrative appeal was 

therefore inconsequential. In the alternative, A-Fab argued that 

equitable tolling should apply and extend the deadline to appeal

because: although the Commission had mailed the Assessments, 

A-Fab never actually received the Assessments because they 

were mailed to A-Fab’s old address.

¶10 The district court granted the Commission’s motion. In 

the court’s ruling and order, it found that “A-Fab did not file its 

appeals for the 2012 and 2013 tax years until December 6, 2016, 

well after the deadlines of June 1, 2012, and June 1, 2013, 

respectively,” and thus concluded that “A-Fab did not exhaust 

its administrative remedies and therefore the Court does not 
A-Fab Engineering v. Tax Commission

20180014-CA 7 2019 UT App 87

have subject matter jurisdiction.”6 The district court also 

concluded that equitable tolling did not extend the deadline to 

file an appeal because A-Fab “was given clear ownership of the 

Property in 2014”—and therefore, “[e]ven if equitable tolling 

were applicable, . . . A-Fab’s appeal would still be untimely.” 

The court reasoned that even if “A-Fab was uncertain regarding 

its obligations to pay taxes on the Property, A-Fab clearly knew 

that the Tax Commission believed the tax payments on the 

Property were A-Fab’s responsibility” because “an attorney for 

A-Fab sent a letter to the [Commission] disputing the valuation 

of the Property.” Finally, “A-Fab asserted that it owned the

property and was leasing it to [CW],” and therefore, “because 

A-Fab was asserting an ownership interest in the Property and 

had been provided [the Assessments], equitable tolling is 

inapplicable.”

¶11 A-Fab appeals.

ISSUES AND STANDARDS OF REVIEW

¶12 The first issue raised is whether the district court erred by 

dismissing A-Fab’s petition for judicial review and finding that it

lacked subject matter jurisdiction due to A-Fab’s failure to 

exhaust administrative remedies. A district court’s order 

dismissing a claim for lack of subject matter jurisdiction due to 

the failure to exhaust administrative remedies is reviewed for 

correctness. Nebeker v. Utah State Tax Comm’n, 2001 UT 74, ¶¶ 11–

12, 34 P.3d 180.

¶13 The second issue is whether the district court erred in 

concluding that no genuine issue of material fact existed when it 

 

6. The district court noted that because it lacked subject matter 

jurisdiction it declined to address A-Fab’s contention that the 

Commission lacked the authority to tax the Property.
A-Fab Engineering v. Tax Commission

20180014-CA 8 2019 UT App 87

granted summary judgment in favor of the Commission on the 

issue of equitable tolling. “We affirm summary judgment only 

when there is no genuine issue as to any material fact and the 

moving party is entitled to judgment as a matter of law.” Arnold 

Indus., Inc. v. Love, 2002 UT 133, ¶ 11, 63 P.3d 721 (cleaned up). 

“We grant the [district] court’s legal conclusions no deference, 

reviewing them for correctness.” Id. And “in reviewing a grant 

of summary judgment, we view the facts and all reasonable 

inferences drawn therefrom in the light most favorable to the 

nonmoving party.” Id. (cleaned up). 

ANALYSIS

I. Administrative Remedies

¶14 “As a general rule, parties must exhaust applicable 

administrative remedies as a prerequisite to seeking judicial 

review.” Nebeker v. Utah State Tax Comm’n, 2001 UT 74, ¶ 14, 34 

P.3d 180 (cleaned up). This court has held that an untimely 

appeal to an administrative agency is the equivalent of failing to 

exhaust administrative remedies—which deprives a district 

court of subject matter jurisdiction. Republic Outdoor Advert., LC 

v. Utah Dep’t of Transp., 2011 UT App 198, ¶ 30, 258 P.3d 619.

¶15 Here, it is undisputed that A-Fab failed to timely appeal 

the Assessments. See Utah Code Ann. § 59-2-1007(1)(a) 

(LexisNexis 2008) (providing that to appeal an assessment, a 

party must request a hearing “on or before the later of June 1 or 

within 30 days of the date of the notice of assessment is mailed 

by the commission”). A-Fab contends, however, that the district 

court erred by concluding that it lacked subject matter 

jurisdiction despite A-Fab’s failure to exhaust its administrative 

remedies. Specifically, A-Fab argues that the Assessments are 

void because the Commission “did not have jurisdiction to 

assess a tax on the Property.” In other words, A-Fab asserts that 

the Assessments suffer from “jurisdictional” defects and that its 
A-Fab Engineering v. Tax Commission

20180014-CA 9 2019 UT App 87

appeal to the district court can therefore “be raised at any time”

and without exhausting administrative remedies. We disagree.

¶16 Utah’s well-established body of relevant case law 

demonstrates that parties contesting whether they are subject to 

a tax or assessment must exhaust administrative remedies before 

seeking judicial review. Nebeker, 2001 UT 74, ¶ 14; State Tax 

Comm’n v. Iverson, 782 P.2d 519, 524 (Utah 1989); Pacific 

Intermountain Express Co. v. State Tax Comm’n, 316 P.2d 549, 551–

52 (Utah 1957); State Tax Comm’n v. Spanish Fork, 100 P.2d 575, 

577 (Utah 1940); State Tax Comm’n v. J. & W. Auto Service, 66 P.2d 

141, 143 (Utah 1937); see also Amax Magnesium Corp. v. Utah State 

Tax Comm’n, 796 P.2d 1256, 1257–58 (Utah 1990) (reviewing a 

decision of the Commission); Action TV v. County Board of 

Equalization of Salt Lake County, 1999 UT App 231, ¶ 1, 986 P.2d 

108 (same). As noted, A-Fab does not dispute that it failed to 

exhaust in this case—rather, it contends that it fits into an

exception to the general rule.

¶17 This court has recognized an exception to the rule that a 

party must exhaust when “it appears that exhaustion would 

serve no useful purpose.” TDM, Inc. v. Tax Comm’n, 2004 UT 

App 433, ¶ 4, 103 P.3d 190 (per curiam) (cleaned up). Exhaustion 

would serve no useful purpose when the issue being reviewed 

presents a “threshold legal issue that cannot be impacted or 

avoided by any turn the case may take before the Commission.” 

Id. ¶ 6. For example, a controversy raising a purely constitutional 

question “with no alternative administrative basis that could 

resolve the issue” and no “administrative determination that 

could obviate the need to reach the constitutional issue” is not 

required to first be presented to the administrative body. Id.

¶18 However, “[e]xhaustion of administrative remedies is still 

required when the administrative proceeding may obviate the 

need to reach the constitutional [or other legal threshold] 

question.” Id. ¶ 5. Because “[e]ven if the constitutional [or 
A-Fab Engineering v. Tax Commission

20180014-CA 10 2019 UT App 87

threshold legal] issue is not avoided entirely, an administrative 

proceeding may be useful to better frame the issues before the 

court.” Id. “In contrast, where purely legal questions are raised 

that cannot be finally determined in an administrative 

proceeding, the pursuit of the administrative proceeding may 

serve no purpose.” Id.

¶19 A-Fab has not raised a constitutional issue, nor has it

articulated a “threshold legal issue” that would render 

administrative review a waste. The crux of A-Fab’s challenge is 

that the Commission lacked authority to assess and tax the 

Property. A-Fab argues that the Assessments are “illegal and 

void” because A-Fab is not a mining company, (citing Utah Code 

Ann. § 59-2-201(1)(vi) (LexisNexis 2018)7 (authorizing the 

Commission to assess and tax “all machinery used in mining . . . 

that [is] primarily used by the owner of a mine . . . regardless of 

actual location”)); and that in 2012 and 2013 the Property was 

“inventory held for sale in the ordinary course of business and 

thus was exempt from taxation,” (citing id. § 59-2-1114(1)

(providing an exemption for property “held for sale in the 

ordinary course of business”)). These arguments fall short of 

demonstrating that exhaustion would serve no useful purpose.

¶20 As the Commission points out, A-Fab could have timely 

appealed the Assessments and argued that it was not a mine 

owner and that the Property was merely inventory. And if it 

had, the Commission might have agreed and there would be no 

need for judicial review.

¶21 Further, the record does not indicate that the Commission 

lacked authority “on its face” to assess the property. See State Tax 

 

7. Because the statutory provision in effect at the relevant time 

does not differ in any material way from that now in effect, we 

cite the current version of the Utah Code.
A-Fab Engineering v. Tax Commission

20180014-CA 11 2019 UT App 87

Comm’n v. J. & W. Auto Service, 66 P.2d 141, 143 (Utah 1937). 

Whether the Commission lacked authority “on its face” was 

visited in J. & W. Auto Service when a taxpayer argued that a 

sales tax assessment was void because the Commission “had no 

authority to tax interstate sales”—and, therefore, exhausting its 

claim with the Commission was not necessary. Id. at 142. Our 

supreme court disagreed, id. at 144, stating that even if the 

Commission “made an error as to certain [jurisdictional] facts 

and upon such error assumed to tax some sales it had no 

authority to tax,” the Commission nonetheless has “jurisdiction 

over the general subject-matter of taxing sales.” Id. at 143.

Therefore, even if the Commission lacked authority to assess 

“some sales which it should really not have taxed,” it does not 

follow that such a lack of authority was apparent on its face. See 

id.

¶22 Conversely, our supreme court has held that the 

Commission lacked jurisdiction on its face when a 

“constitutional challenge was the sole claim” at issue. Nebeker v. 

Utah State Tax Comm’n, 2001 UT 74, ¶ 24, 34 P.3d 180. The court

in Nebeker elaborated that deciding constitutional issues is “not 

within the [Commission’s] jurisdiction.” Id.

¶23 Here, like in J. & W. Auto Service, the Commission did not 

lack authority on its face to tax the Property. First, the 

Commission reasonably believed it had the authority to assess 

the Property because A-Fab identified the Property as “subject to 

assessment by the State Tax Commission” on its 2012 and 2013 

Returns. Second, but for the allegation that the Property was 

being held as inventory, the Property would have been subject to 

assessment by the Commission because it is mining equipment.

See Utah Code Ann. § 59-2-201(1) (authorizing the Commission 

to assess and tax “all machinery used in mining . . . that [is]

primarily used by the owner of a mine . . . regardless of actual 

location”).
A-Fab Engineering v. Tax Commission

20180014-CA 12 2019 UT App 87

¶24 Whether the Commission should have taxed the Property 

is precisely the type of issue that could have, and should have, 

been brought before the Commission. Thus, A-Fab has failed to 

demonstrate that it was justified in bypassing the administrative 

appeal process—and therefore, the district court properly 

dismissed A-Fab’s petition on the grounds that the court lacked 

subject matter jurisdiction.

II. Equitable Tolling

¶25 Alternatively, A-Fab contends that the district court erred 

in concluding that equitable tolling did not apply as a matter of 

law. A-Fab raises a single argument in support of its contention: 

whether it received the Assessments is disputed, and therefore 

summary judgment should not have been granted. A-Fab argues 

that the Commission mailed the Assessments to its old address;

and consequently A-Fab did not learn about the Assessments 

until 2016, when Carbon County mailed the delinquent tax 

notice. We find this argument unpersuasive for three reasons.

¶26 First, as the Commission points out, this disputed fact is

immaterial because the time to appeal is triggered by the mailing 

of the assessment, not whether the assessment is received. See

Utah Code Ann. § 59-2-1007(1)(a) (LexisNexis 2008). And even if 

this fact was material, A-Fab did not create a genuine dispute of 

this fact. The record indicates that A-Fab presented an affidavit 

claiming “it did not have any record of receiving” the 

Assessments. This affidavit only avers that A-Fab did not have a 

record of receipt, not that A-Fab did not indeed receive the 

Assessments. A-Fab has declined to address these points

anywhere in the record or on appeal, and therefore, A-Fab’s 

notice argument fails.

¶27 Second, it is undisputed that the Assessments were 

mailed to the address provided by A-Fab itself. The Returns filed 

in 2012 and 2013—which were prepared, signed, and dated by 

A-Fab—both list A-Fab’s old address. The certified mail receipts 
A-Fab Engineering v. Tax Commission

20180014-CA 13 2019 UT App 87

for those Returns also list A-Fab’s old address. In other words, 

any mistake in the mailing address to which the Assessments 

were sent was invited by A-Fab. Accordingly, A-Fab is not 

excused from its alleged ignorance.

¶28 Finally, the record indicates that A-Fab was on notice of 

the Assessments. Attached to A-Fab’s 2013 Return is a letter 

requesting that the Commission reconsider the value of the 

Property. This letter included an independent appraisal of the 

Property and urged the Tax Commission to reconsider its 2013 

assessment of the value of the Property. Simply put, A-Fab could 

not ask for reconsideration of something it was not aware of. 

Thus, A-Fab has not demonstrated a dispute of material fact

sufficient to preclude summary judgment, and therefore, the 

district court properly granted summary judgment in favor of 

the Commission.

CONCLUSION

¶29 A-Fab failed to timely appeal the Assessments and 

therefore the district court properly dismissed A-Fab’s petition 

for review for lack of subject matter jurisdiction. A-Fab also 

failed to demonstrate a dispute of material fact that would 

preclude summary judgment on the issue of whether the 

deadline to appeal should have been equitably tolled. 

Accordingly, we affirm.