No. 12809 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

19 75 

J. EINAR LARSON, et al., 

Plaintiffs, 

THE STATE OF MONTANA and THE 

DEPARTMENT OF REVENUE, et a 1. , 

Defendants. 

Appeal from: District Court of the First Judicial District, 

Honorable James D. Freebourn, Judge presiding. 

Counsel of Record: 

, L -4 ICLL (! ,' t--1 

For ~lalLTitll!Zs : 

R. Bruce McGinnis appeared, Helena, Montana 

Randall Swanberg argued, Great Falls, Montana 

,I '" { $ (. Ll:4/J 

For &fen en s : - L - 

UI r LL~ 4~. A. Sa~,Wcrp,fi ~fud* 

Scribner and Huss , Helena, Montana 

Lawrence D. Huss argued, Helena, Montana 

Thoaas Dowling, County Attorney, Helena, Montana 

~ei E B. Erickson, Deputy County Attorney appeared, 

hi Lena, Montana 

William Leaphart, City Attorney, Helena, Montana 

Submitted March 3, 1975 

Decided:APR 2 4 1975 

Filed : APR 2 4% ~Y'fi 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

This appeal is by defendants fr0m.a declaratory judgment 

and injunction entered against them in the district court, 

Lewis and Clark County. Defendants (hereinafter referred to as 

the state) are agencies and individuals responsible for the 

appraisal of property in Lewis and Clark County for taxation purposes. Plaintiffs (hereinafter referred to as taxpayers ) are 

owners of real property in Lewis and Clark County, and Helena 

Property Owners Association, a corporation. Taxpayers brought 

this suit as a class action, representing themselves and all other 

owners of real property in Lewis and Clark County subject to taxation computed upon valuations as appraised by the state. Lewis 

and Clark County and the City of Helena appeared as intervenors, 

supporting the taxpayers' position. 

As is the practice in many parts of the country, Montana 

taxes real property and improvements by an appraisal-assessmentlevy method. This lawsuit involves the first of these steps -- 

the appraisal. Prior to 1972, the last county-wide appraisal in 

Lewis and Clark County was one completed in 1962. At the urging 

of the State Board of Equalization (predecessor to the Department 

of Revenue, a defendant here), Lewis and Clark County hired a 

private firm, James R. Laird & Associates, to conduct a countywide appraisal in 1972-1973. However, before Lewis and Clark 

County could use that appraisal to adjust its tax rolls, statutory 

and constitutional changes shifted responsibility for appraisals 

to the state. Section 84-429.7, R.C.M. 1947; Article VIII, Section 3, 1972 Montana Constitution. 

When the state assumed these new responsibilities, it 

was determined the Laird appraisal would be used for 1974 Lewis 

and Clark County assessments. Notice of this proposed action 

prompted the taxpayers t o f i l e this suit, seeking a declaration 
~hac ~~npLsie LO oI tile Laird appraisal would violate conscitutional and statutory limitations on the state's power to 

tax. The state here appeals from the district court's declaration that the proposed use of the Laird appraisal would vioiate equal protection, due process, and uniformity requirements 

of the United States and Montana Constitutions, and Montana 

statutes. The district court enjoined use of the appraisal on 

these grounds, and the state also appeals from that ruling. 

These issues are presented for this Court's determin1. Would implementation of the Laird appraisal violate 

coristltutional and statutory limitations on the state's power to 

appraise and tax? 

2. Must the taxpayers exhaust their administrative 

remedies before protesting the appraisal in the courts? 

3. Did the district court err in granting injunctive 

relief? 

4. Is the judgment supported by substantial evidence? 

5. Should taxpayers' motion to strike portions of the 

state's appellate brief be granted? 

However, before considering these issues, two factual 

disputes must necessarily he resolved. 

First, the state alleges the following findings of fact 

are contrary to the evidence presented at the trial: 

"The reappraisal of property lying within Lewis 

and Clark County conducted,by James R. Laird & 

Associates and adopted by the defendant DEPARTMENT 

OF REVENUE and its officers, agents and employees 

for the fiscal year 1974-1975 was not conducted 

as a part of a uniform plan for reappraisal of all 

;>roperty within the State of Montana. 

"XIV. 

"The defendant DEPARTMENT OF REVENUE has not 

adopted or implemented a uniform plan for the 
iippra~sal, assessment and equalization of all 

l~roperty within the State of Montana." 

Nnile a factual dispute concerning the existence and 

impiementation of a uniform plan is presented by the record, 

we find ample evidence supporting the quoted findings. For 

example, the administrator of the property valuation department 

of the Department of Revenue was called as an adverse witness 

by the taxpayers. He testified that, to his knowledge, there 

was no state-wide plan for reappraisal at the time of the Laird 

appraisal. He further testified that, although some plans have 

since been formulated, none would employ the same methods used 

by James R. Laird & Associates. A review of the record finds this 

cestimony to be uncontradicted, and certainly adequate to support 

the quoted findings of fact. 

Second, is the comparison of appraisals between properties 

in Lewis and Clark County and other counties. The district court 

found : 

"The appraised value of rural and urban improvements for property lying within Lewis and Clark 

County for the fiscal year 1973-74 were as high 

or higher than the appraised value of similar 

properties lying in comparable counties outside 

of Lewis and Clark County for the same period 

of time." 

"XI. 

"T'he reappraisal of property lying within Lewis 

and Clark County conducted by James R. Laird 

s Associates and adopted by the defendant 

3EPARTMENT OF REVENUE and its officers, agents 

and employees for implementation for the fiscal 

year 1974-75 has resulted in property within 

Lewis and Clark County being appraised substantially higher than similar property in comparable 

c~unties outside of Lewis and Clark County." 

Again, the state argues the quoted findings are concrary to the evidence presented at the trial and, again, we 

Jisagree. Taxpayers called an expert who, after being duly 

qualified and, after laying the proper foundation, formed 
similar conclusions on the basis of his investigations. The 

state called an expert who drew different conclusions on the 

basis of his own investigation. This Court has held on numerous occasions--the trier of fact is best situated to determine 

the credibility of witnesses and weigh their testimony. For a 

recent discussion of the applicable principles see Holenstein v. 

Andrews , Mont . , 530 P.2d 476, 32 St.Rep. 41. The testimony of the taxpayers1 expert here is sufficient to support the 

quoted findings of fact. 

Accepting as facts the absence of a state-wide appraisal 

plan and the disproportionate appraisal made on Lewis and Clark 

property, we turn to the legal questions presented. The district 

court concluded that the adoption of the Laird appraisal would 

require taxpayers to bear a disproportionate share of Montana's 

tax burden, in violation of the equal protection requirements 

of the Fourteenth Amendment to the United States Constitution and 

Article 11, Section 4, 1972 Montana Constitution. The use of 

the appraisal was also found to violate the due process requirements of the Fifth and Fourteenth Amendments to the United States 

Constitution and Article 11, Sections 17 and 29, 1972 Montana 

Constitution. Finally, the district court found the appraisal 

violated the provisions of Title 84, Chapter 4, R.C.M. 1947, 

which requires general and uniform appraisal, assessment and 

equalization of all taxable property in the state. 

In bringing this appeal, the state challenges all of these 

conclusions of law. We will not discuss the United States Constitutional questions in this opinion, since the appeal can be 

decided on the basis of Montana's Constitution and statutes. 

Section 84-429.12, R.C.M. 1947, provides in pertinent 

part : 

"It is hereby made the duty of the state 
department of revenue to implement the provisions of this act by providing: 

"2. For a general and uniform method of 

appraising city and town lots. 

"3. For a general and uniform method of 

appraising rural and urban improvements." 

A "general and uniform method of appraising" necessarily 

requires that each appraisal or reappraisal must be part of a 

plan which provides that all similar properties will be valued 

in a like manner. The plain meaning of the statutory language 

admits of no other interpretation. The absence of such a plan, 

as discussed earlier in this opinion, thus prevents lawful implementation of the Laird appraisal. 

Article 11, Sections 4 and 17, 1972 Montana Constitution 

compel the same result. These sections guarantee equal protection and due process to the taxpayers aggrieved here. The Laird 

appraisal was found to increase Lewis and Clark County taxable 

valuations to a level in excess of valuations of similar property 

in other counties. The obvious result, and that found by the 

district court, is a disproportionate share of the tax burden placed 

upon Lewis and Clark County taxpayers. 

We find the violations of the cited constitutional provisions are patent. However, since it has already been established 

that use of the appraisal was unlawful under the statute cited, 

we will not lengthen this opinion with a complete discussion of 

these constitutional violations. Authorities are in accord, 

holding that violations of statutory uniformity requirements 

generally result in violations of equal protection-due process 

requirements. 71 Am Jur 2d. State and Local Taxation, S158, and 

cases footnoted there. In so holding, we are aware of the abundance of authority which finds no violation of constitutional or 

statutory mandates in the temporary inequalities which accompany 
a cyclical plan of reappraisal. An excellent discussion of 

applicable law in this regard is found in Hillock v. Bade, 22 

Ariz.App. 46, 523 P.2d 97, and in the Annotation, 76 ALR2d 1077. 

Here, the fatal flaw in the state's position is the absence of any plan. Without such a plan, there is no assurance 

of uniformity of appraisal method or of sequential selection 

property for reappraisal. The state's position is even weaker 

than that of the taxing officials in Sparks v. McCluskey, 84 

Ariz. 283, 327 P.2d 295, 297, where the Arizona court held,: 

"We cannot subscribe to the proposition that 

grossly inequal values by the use of a specific 

method of assessment may be placed on a small 

portion of a class of property and remain subject to the disproportionately excessive value 

for an indefinite number of years in the future 

until the taxing officials can get around to 

using the same method upon the other like properties. " 

It is clear the state's proposed implementation of the 

Laird appraisal is prohibited by Montana constitutional and 

statutory provisions. In so holding, we do not prohibit the use 

of cyclical plans of reappraisal, nor do we hold that such a 

plan could not begin with a reappraisal of the property in Lewis 

and Clark County. The state has the legal authority to determine 

the order of reappraisal. We hold only that the state's determinations must be a part of a general and uniform plan for reappraising all like property in the state. 

The state also contends the taxpayers should have been 

required to exhaust their statutory, administrative remedies 

before bringing this challenge in the courts. The procedure 

suggested would require hearings before the county tax appeal 

board (section 84-603, R.C.M. 1947) with a subsequent appeal, if 

unsuccessful, before the state tax appeal board (section 84- 

709, R.C.M. 1947). 

In an early construction of these statutes (which have 
since been amended in respects not relevant here), this Court 

held, in Belknap Realty Co. V. Simineo, 67 Mont. 359, 365, 215 

"The statutes having made ample provision 

whereby a taxpayer may have any alleged excessive or erroneous assessment or valuation of 

his property reviewed by the county and state 

boards of equalization, this remedy is exclusive 

except in cases where fraud or the sdo2tion of a 

kund,amentally wrong principle of assessment is 

shown. " (Emphasis supplied. ) 

The state's use of an unconstitutional and illegal appraisal 

here is the type of "fundamentally wrong principle" of appraisal 

for which specific exception was made ir Belknap. Were it otherwise, we would have the anomalous situation of an administrative, 

quasi-judicial board passing on constitutional and statutory 

questions presented by this appeal. 

Tax appeal boards are particularly suited for settling 

disputes over the appropriate valuation of a given piece of 

property or a particular improvement, and the judiciary cannot 

properly interfere with that function. Blair v. Potter, 132 

Mont. 176, 315 P.2d 177. The instant case does not concern the 

value of a specific tract of land within Lewis and Clark County, 

but rather the constitutional and statutory correctness of implementing a discriminatory reappraisal. That determination is 

an appropriate function of the courts. 

In Conrad v. Managhan, 157 Mont. 335, 485 P.2d 948, this 

Court noted that when a taxing authority lacks the statutory 

power to increase appraisals, an aggrieved taxpayer may seek 

equitable relief in the courts. Conrad speaks both to the administrative remedy issue and the injunctive relief issue raised 

by the state in the instant case. The state was outside its 

statutory authority in attempting to implement the Laird appraisal. 

Under these facts, taxpayers may proceed in the courts to seek 

injunctive relief. 
However, the scate argues section 93-4203 (4) , R.C.M. 

L 947, ;+ronibits issuance of ail injunction preventing execution 

af public statutes by public officers, and that the district 

court here ignored that limitation on its equitable powers. 

While the cited section does prohibit enjoining the execution 

of statutory duties, section 84-4505, R.C.M. 1947, provides for 

an injunction where the tax, or a part thereof sought to be 

2njoined, is illegal or unauthorized by law. Heretofore, we 

held implementation of the Laird appraisal would be illegal and 

unauthorized. The suggested distinction between the statutory 

use of the word "tax" and the operative fact of an "appraisaln 

here is without substance. The ~aird appraisal would have been 

used as the basis for computation of taxes. 

This Court's refusal to recognize this distinction is 

admittedly contrary to dicta contained in State ex rel. Keast 

v. ~riey, 145 Mont. 521, 402 P.2d 405. In Keast, an injunction 

2rohibiting utilization of a certain valuation for tax purposes 

was quashed. The injunction had been issued without notice, 

and plaintiffs had shown no irreparable in jury. 'Those grounds, 

il-i themselves, were sufficient to support quashing the injunction, 

and tile Court expressly recognized that fact. Nonetheless, it 

went on to find the injunction was also banned by section 93-4203, 

H.Z.M. 1947. For reasons heretofore stated, that holding is 

expressly overruled. 

The preferable law is enunciated in Hames v. City of 

Polson, 123 Mont. 469, 479, 215 P.2d 950, where it was held: 

" * * * public bodies and public officers may 

be restrained by injunction from proceeding in 

violation of the law, to the prejudice of the 

public, or to the injury of individual rights * * * .I' 

The propriety of injunctive relief is also recognized by Montana's 

skatute governing payment of taxes under protest. Section 84-4504, 
"The remedy hereby provided shall supersede 

the remedy of injunction znd all other remedies 

which might be invoked to prevent the collection 

of taxes or licenses alleqed to be irreaularlv 

levied or demanded, except in unusual cases A 

where the remedy provided is deemed by the court 

to be inadequate. " (Emphasis supplied. ) 

The intent of the Legislature to provide for the retention of 

equitable remedies in taxation cases where statutory remedies 

prove inadequate is evident. To hold that equitable remedies 

are not available for halting unconstitutional and illegal 

appraisals would produce the strange result of prohibiting enjoining utilization of an illegal appraisal while allowing the 

enjoining of levies computed upon that appraisal. Section 84- 

4505, R.C.M. 1947. We will not so hold. 

The facts discussed throughout this opinion sufficiently 

answer the state's contention that the evidence does not support 

the district court's judgment. The implementation of the Laird 

appraisal fails because there is substantial evidence that it 

was not a part of a general and uniform, state-wide plan. We 

cannot approve use of an appraisal which would result in a discriminatory, disproportionate tax burden on Lewis and Clark 

County taxpayers, when the appraisal suffers the deficiencies 

already noted. 

Finally, the taxpayers' motion that portions of the 

state's appellate brief should be stricken will not be considered. 

Since our decision holds in favor of the taxpayers, they have 

not been prejudiced by the materials in the state's brief--whether 

properly included therein or not. 

The judgment of the district court is affirmed. 

Justice 
We concur: