Opinion ID: 1155452
Heading Depth: 1
Heading Rank: 1

Heading: statement of facts the rich creek loan and the determination of improper assessment

Text: On December 14, 1979, the respondent entered into a written agreement with Rich Creek Mining Company. Pursuant to that agreement, Rich Creek loaned $10,000 to the respondent. In return, the respondent agreed to repay the loan with interest at the rate of ten percent. Certain certificates of stock of the respondent in Electronic Laboratories, Inc., and D. & G. Coal Processing, Inc., were to serve as collateral for the loan. As further collateral, the respondent was to execute a trust deed upon his farm at Godby Branch in Logan County. The loan agreement was executed on behalf of Rich Creek by Millard R. Ellis. The respondent never repaid the Rich Creek loan. Furthermore, Larry D. Cochran, an incorporator of Rich Creek, indicated at trial that two of the items of collateral for the loan (the D. & G. Coal Processing, Inc., stock and the farm at Godby Branch) were sold by the respondent to others without prior notice to Rich Creek. By way of correspondence in 1980 and 1982, Rich Creek demanded that Godby repay the loan. At trial, Millard R. Ellis, Larry D. Cochran and the respondent denied that the Rich Creek loan had anything to do with the fact that the respondent was the Assessor of Logan County. [1] In addition to their association with Rich Creek Mining Company, Millard R. Ellis and Larry D. Cochran were associated with the following companies: (1) C.C. & E. Coal Co., (2) Deerfield Mining Co., (3) Laramie Mining Company, Inc., and (4) Spring Branch Mining Co., Inc. Ellis performed accounting functions for the above companies as an employee of Cochran. Cochran had an ownership interest in the companies. With respect to tax year 1982, property tax returns entitled Personal Property Report By Incorporated Firms, Mines and Manufacturers were filed with the respondent by Rich Creek Mining Company, C.C. & E. Coal Co., Deerfield Mining Co., Laramie Mining Company, Inc., and Spring Branch Mining Co., Inc. The record indicates that those returns were prepared either by J.K. Runyon, a deputy assessor in Logan County, or by Millard R. Ellis. Runyon's signature appears upon the returns of C.C. & E. Coal Co. and Deerfield Mining Co. Ellis' signature appears upon the returns of Rich Creek Mining Company, Laramie Mining Company, Inc., and Spring Branch Mining Co., Inc. Petitioners' exhibit 11 reveals that for tax year 1982, certain Logan County personal property tax tickets for each of the above five companies contained one of the following stamped or handwritten notations: To be Improper  J.T. Godby, Assessor, or Improper Charge, J.T. Godby, Assessor. Petitioners' exhibit 11 indicates that those tax tickets were impropered as of April 1983. [2] Moreover, petitioners' exhibit 12, a list of improper charges for the month of April, 1983, indicates that in May 1983 the respondent notified the Logan County Commission of the respondent's determination of improper assessment, concerning the above five companies. [3] The respondent and others testified at trial that the tax tickets of those companies were marked improper because the personal property attributed to those companies was, in fact, owned by Chafin Coal Co. [4] Chafin Coal Co. had been assessed for that property, and the other companies had leased the property from Chafin for mining purposes. See respondent's exhibit 25. The record indicates that those companies never applied to the Logan County Commission for relief concerning the alleged improper assessments. According to the evidence at trial, the respondent had, for many years, impropered personal property tax tickets without prior involvement of the Logan County Commission. [5] In that regard, Vernon Dingess, Sheriff and Treasurer of Logan County, testified as follows: A. Well, the procedure has been that the Assessor comes over there and stamps them improper. Q. Then what do you do? A. I don't do nothing. I don't try to collect any of them. Q. You don't collect them then? A. No, sir. .... Q. Okay. When these tickets are stamped improper by the Assessor's office, is that all you require to not collect taxes? A. Yes, sir. Q. I will hand you what has been placed in evidence as Petitioner's Exhibit 11 and ask you if these are documents of your office? A. Yes, sir. Q. And is this the stamp notation on the document that you are referring to, improper charges, J.T. (Tom) Godby, Assessor? A. Yes, sir. Q. And it is that action upon which you act not to collect the taxes; is that correct? A. Yes, sir. During the trial, petitioner's exhibit 2, entitled Audit Report  Logan County, West Virginia  July 1, 1981 through June 30, 1982, was admitted into evidence. That report was made by an accounting firm at the direction of the West Virginia State Tax Commissioner. The report, which describes various instances in Logan County of alleged violations of the West Virginia Code, states, in part, as follows: W.Va.Code 11-3-27 Relief in County Court From Erroneous Assessments Comments relating to W.Va.Code 11-3-27 are as follows: The Sheriff is not receiving certified copies (by the County Clerk) of any corrections made by the County Court in relation to relief from erroneous assessments resulting from a clerical error or a mistake occasioned by an unintentional act. Presently, a Tax Deputy in conjunction with an Assessor's employee prepares a list of erroneous assessments and forwards it to the County Clerk for certification. We recognize the practicality of the above procedures due to the volume of the improper assessments, however, this is not in conformity with the W.Va. Code. We recommend the Assessor present a list of the orders of improper taxes to the County Clerk for certification who upon certification will in turn forward the certified list to the Sheriff. Logan County's response was not received timely to permit submission in the financial statements. [6] In spite of the above language of the audit report, the respondent indicated at trial that, by way of an exit conference in 1982 following the report, he was informed by representatives of the State Tax Department that, although his procedure of marking tax tickets improper without prior involvement of the county commission was in violation of the West Virginia Code, such procedure could be continued so long as the respondent thereafter notified the county commission of the impropered tax tickets. See trial transcript at 303. The respondent's testimony in that regard was supported by the testimony at trial of deputy assessor JoAnn Means. As indicated above, it was subsequent to the audit report and exit conference that the tax tickets of (1) Rich Creek Mining Company, (2) C.C. & E. Coal Co., (3) Deerfield Mining Co., (4) Laramie Mining Company, Inc., and (5) Spring Branch Mining Co., Inc., were marked improper. Finally, it should be noted that Thomas Zamow, Assistant Prosecuting Attorney of Logan County, testified at trial that by memorandum dated July 15, 1981, he notified the respondent that the Logan County Sheriff and the respondent had violated the West Virginia Code with respect to the marking of tax tickets improper. That memorandum concerned a West Virginia State Tax Department audit of Logan County conducted prior to the audit of July 1, 1981, through July 30, 1982, described above. That memorandum stated, in part, as follows: Specifically, the West Virginia State Tax Department found that the Sheriff and Assessor violated West Virginia Code Chapter 11, Section 3-27. Specifically, the Sheriff excepted improper tax tickets that were approved only by the Assessor and not by the County Commission. The West Virginia State Tax Department ordered that the procedures prescribed by the West Virginia Code 11-3-27 for allowing relief from erroneous assessments be followed. Therefore, the Prosecuting Attorney is required by the West Virginia State Tax Department and by the law to advise you to correct this instance of noncompliance and the Prosecutor would request that you advise him in writing as to what steps have been taken to correct this situation. The respondent and JoAnn Means, a deputy assessor, testified at trial that they did not see the Zamow memorandum during the period in question.