Opinion ID: 1613628
Heading Depth: 1
Heading Rank: 3

Heading: Ward's Claims of Discrimination and Inequitability in Property Value Assessment.

Text: Ward next contends that the allegations embodied in count II of its petition in the district court were adequately invoked in their 1989 protest filed with the board. Despite the numerous arguments put forth by Ward on this point, we conclude that the grounds for protest detailed in count II were not properly pleaded in the 1989 protest and, therefore, Ward is precluded from seeking judicial review of their 1989 real estate assessment on these bases. Iowa Code § 441.38(1) (In appeals to the district court, no new grounds in addition to those set out in the protest to the board of review as provided in section 441.37 can be pleaded....). As was the case in subdivision II, our standard of review on this partial summary judgment ruling is for errors at law. Moser, 312 N.W.2d at 886. A. As noted earlier, the petition that Ward filed with the board in 1989 submitted the requisite details for only one basis for protest: that the property in question was assessed for more than the value authorized by law and that the amount of the overassessment was $1,207,794. Ward now argues that this is sufficient to register the constitutional components of their discriminatory assessment claim with the board. We disagree. A claim of discriminatory assessment in violation of the state and federal constitutions is sufficiently similar to a claim of inequitable assessment so as to require that it be invoked by supplying the necessary information under ground one on the board's petition, which corresponds to subparagraph (a) in section 441.37(1). See Chicago & Northwestern Ry. v. Iowa State Tax Comm'n, 257 Iowa 1359, 137 N.W.2d 246, 253-54 (1965) (noting that a claim of unconstitutional discrimination in property tax assessment also justifies a reduction of assessment under the predecessor of section 441.37(1)(a)). Subparagraph (a) of section 441.37(1) permits protests on the ground that the assessment is not equitable as compared with assessments of other like property in the taxing district. In all pertinent respects, this parallels the standard articulated by the United States Supreme Court for evaluating whether property tax assessments are violative of the equal protection clause. Allegheny Pittsburgh Coal Co. v. County Comm'n, 488 U.S. 336, 345, 109 S.Ct. 633, 639, 102 L.Ed.2d 688, 698 (1989) ([I]ntentional systematic undervaluation by state officials of other taxable property in the same class contravenes the constitutional right of one taxed upon the full value of his property.). In contrast, the ground invoked by Ward corresponds to subparagraph (b) of 441.37(1), which proscribes assessments that exceed the property's fair and reasonable market value as that term is defined in Iowa Code section 441.21. Security Mut. Ins. Ass'n v. Board of Review, 467 N.W.2d 301, 304 n. 1 (Iowa App.1991). Thus, Ward's contention that the constitutional component of their discriminatory assessment claim was adequately raised in the 1989 petition filed with the board must be rejected. B. Ward next maintains that ground one of the board's form petition, which corresponds with the basis for protest detailed in section 441.37(1)(a), was invoked simply because Ward did not strike out this ground as is requested on the board's form petition. Again, we must disagree. Iowa Code section 441.37(1)(a) clearly provides that when the petitioner intends to rely on the ground of inequitability of assessment within a taxing district, the legal description and assessments of a representative number of comparable properties, as described by the aggrieved taxpayer, shall be listed on the protest, otherwise said protest shall not be considered on this ground.  Iowa Code § 441.37(1)(a) (emphasis added). In recognition of this statutory directive, the board's form petition directs applicants to [g]ive legal description and assessment of a representative number of comparable propertiesnot less than five if real estate is involved. The statutory requirement is both a jurisdictional prerequisite and an evidentiary requirement for bringing a claim of inequitable or discriminatory assessment before the board. The board's statement on its form petition that applicants should [s]trike out the ground or grounds that do not apply does not derogate from this requirement inasmuch as subject matter jurisdiction cannot be created by consent. Lloyd v. State, 251 N.W.2d 551, 556 (Iowa 1977). Since Ward failed to list the requisite comparable properties, count II was not properly set out in the protest and thus may not be considered on appeal. Iowa Code § 441.38(1). C. In a related argument, Ward contends that the word shall in Iowa Code section 441.37(1)(a) is merely directory and not mandatory. As such, it asserts that the failure to list a representative number of comparable properties is not fatal to lodging a successful protest with the board on the grounds detailed in count II. Generally, the word `shall,' when used in a statute, is construed to mean something that is mandatory. State v. Bartusek, 383 N.W.2d 582, 584 (Iowa 1986); Iowa Code § 4.1(36)(a). However, we have held that where the prescribed duty is not essential to the main objective or purpose of the legislation in question, the statute ordinarily is directory and a violation thereof will not invalidate subsequent proceedings unless prejudice is shown. In re A.E.O., 437 N.W.2d 238, 239 (Iowa 1989); Pearson v. Robinson, 318 N.W.2d 188, 191 (Iowa 1982). Nevertheless, in the case at hand, we conclude that a listing of comparable properties is essential to the main objective of the statute. The failure to list the required properties directly frustrates the sole function of the requirement, which is to enable the board to make a preliminary determination on the matter of equitability of assessment. The term shall, therefore, must be interpreted to create a mandatory duty. Ward properly notes that we have stated that only substantial compliance with requirements of section 441.38 is necessary to confer jurisdiction upon the district court. Cowles Communications, Inc. v. Board of Review, 266 N.W.2d 626, 631 (Iowa 1978); Maxwell v. Shivers, 257 Iowa 575, 581, 133 N.W.2d 709, 712 (1965) (considering a claim of inequitability although only one comparable property was listed on the board's form petition). However, we find absolutely no evidence that Ward gave the board an opportunity to consider the grounds detailed in count II in their written petition or otherwise. Thus, far from substantially complying with the requirements of section 441.38, Ward is merely attempting to circumvent the requirement that taxpayers first exhaust their remedies with the administrative tribunal before seeking judicial review. D. In its final argument in support of their assertion that the grounds embodied in count II were properly invoked in the 1989 protest, Ward contends that the board was obligated, under section 441.37(3), to inform them of any defects in their protest. Section 441.37(3) does require that the board file a final disposition of the protest in which it specifies the reasons for the action taken. However, this obligation does not require that the board be clairvoyant. Given that Ward in no way indicated that it was relying upon the ground for protest detailed in section 441.37(1)(a), the board was obviously under no duty to inform Ward that this particular ground had not been invoked in its protest.