Opinion ID: 2546268
Heading Depth: 2
Heading Rank: 2

Heading: alliant's assessment contests

Text: ¶ 10 The agreement between Alliant and the BOE was intended to settle disputes for tax years 1995 through 1999 .... [and] include[d] all claims in all outstanding actions for those tax years involving real and personal property [and] NIROP. The outstanding actions for tax years 1995 through 1999 all relate to contests over the Assessor's valuation of Alliant's property in Salt Lake County, and can be organized into three separate groups. ¶ 11 The first is the Independent Action filed by Alliant in district court in February 1998. This action involved statutory and constitutional challenges to the Assessor's assessment of federal property that Alliant operates under control of the United States Navy (the Naval Industrial Reserve Ordinance Plant or NIROP). Alliant's complaint sought declaratory relief, alleging that taxation of the NIROP property violated the Constitution and requesting a refund of taxes paid under protest. Alliant also sought injunctive relief against the payment of future taxes on the NIROP property. Nevertheless, it continued to pay the taxes under protest until the case was decided. When Alliant and the BOE entered into their settlement agreement in December 2000, the matter was still pending before the district tax court. ¶ 12 The second group of cases covers the tax assessments of Alliant's real and personal property for tax years 1995 and 1996 (the 95-96 valuation dispute). In 1995, Alliant's real property was originally assessed at $168,801,600. On appeal to the board of equalization, Alliant sought to reduce the value assessment to $82,865,641 and the Assessor sought a reduction to $152,725,521. The board upheld the Assessor's reduced assessment. In 1996 Alliant's real property was assessed at $168,003,500. Before the board of equalization, Alliant sought to reduce the assessment to $82,965,641, while the Assessor sought an increase to $253,197,000. Ultimately, the board upheld the Assessor's original valuation. ¶ 13 Alliant appealed these decisions to the tax commission. Before the commission, the real property issues for 1995 and 1996 were separated from the personal property issues for those years. In November 1999, the commission rendered a decision on the real property assessments for both years, sustaining the values established by the board of equalization. Subsequently, Alliant filed multiple Petitions for Review of the commission's decision to the district court. In May 2000, these petitions were consolidated, and the appeal was transferred to tax judge Lynn Davis, before whom was pending the Independent Action involving the same parties. At the time of the settlement between the parties, the real property cases from the 95-96 valuation dispute were pending before the district court while the personal property cases from that dispute remained pending before the tax commission. ¶ 14 The third group of cases includes Alliant's contests over the Assessor's valuations of its real and personal property for tax years 1997 through 1999 (the 97-99 valuation dispute). Similar to the 95-96 valuation dispute, Alliant appealed the initial assessment of its property to the board of equalization. However, to facilitate the resolution of those appeals, the parties stipulated to a decision by the board that was adverse to Alliant and upheld the Assessor's original assessments. They then brought the matter before the tax commission where a formal hearing date was set for November 2000. The parties stipulated to a continuance of this hearing, however, in order to discuss a settlement agreement.
¶ 15 As stated above, Alliant and the BOE entered into a settlement agreement covering Alliant's tax challenges for the years 1995 through 1999 on December 5, 2000. At that time, the district court had jurisdiction over the Independent Action and the real property cases from the 95-96 valuation dispute. The personal property cases from the 95-96 valuation dispute and the real and personal property cases from the 97-99 valuation dispute, however, were still pending before the tax commission. Consequently, to settle these multiple cases, the agreement was subject to ... final approval by the Utah State Tax Commission and the District Court. ¶ 16 The settlement terms included a $5 million refund from the BOE to Alliant in satisfaction of all disputed claims for the years 1995-1999 inclusive. However, the parties considered the refund to be a lump sum, which was not designated to compensate for any specific alleged overvaluation for any of the relevant tax years. According to the language of the agreement, [n]o obsolescence percentage or amount will be applied to any particular year under appeal and any allocation of a reduction in value to any particular year shall be for refund calculation percentages only and shall be neither indicative nor dispositive with respect to any issue raised in Alliant's appeal. ¶ 17 On December 6, 2000, the day after the BOE and Alliant entered into their agreement, the Salt Lake County Commission met publicly to discuss the settlement agreement. The Assessor and Granite were present and objected to the settlement. They asked the county commissioners to allow the hearing before the tax commission to go forward so that a proper valuation methodology could be established for the 97-99 valuation dispute and subsequent tax years. Nevertheless, at the same meeting, the county commissioners approved the settlement agreement between Alliant and the BOE. ¶ 18 At the time of the agreement, Granite had pending before the tax commission a Motion to Intervene as a matter of right in the 97-99 valuation dispute. The day after the county commission approved the agreement, Granite filed another Motion to Intervene, this time in the 95-96 valuation dispute and the Independent Action pending before the district tax court. On December 13, 2000, the Assessor, who was a named party in the Independent Action in the district court but not in any other appeals, filed a Motion to Intervene in the 97-99 valuation dispute then pending before the tax commission. Two days later Alliant, and the BOE filed with the tax commission and district court a Stipulation of Settlement and Joint Motion for Approval and Entry of an Order Approving Settlement. Two weeks later, the Assessor sought to intervene in the 95-96 valuation dispute cases before the district court. ¶ 19 In March 2001, the tax commission issued its decision on the Joint Motion. It first recognized Granite's Motion to Intervene in light of its substantial financial interest in any resolution of those cases and held that Granite was a party to the 97-99 valuation dispute from the time it filed its motion on November 17, 2000. The commission further held that since Granite sought to intervene before Alliant and the BOE had reached their agreement, and since Granite objected to the settlement, the settlement was not a complete agreement of all the necessary parties. The tax commission therefore denied Alliant and the BOE's Motion for Approval of the Settlement without further addressing the merits of the valuation dispute. ¶ 20 Consequently, in April 2001, the tax commission held a formal hearing to determine the best valuation methodology for, and the fair market value of, Alliant's real property for the 1997 through 1999 tax years. It issued its decision on September 18, 2001, concluding that the values of Alliant's real property for 1997 through 1999 were closer to the Assessor's original assessments than to Alliant's requested reductions. As a result of this decision, the county would only be required to refund approximately $1 million in overassessed taxes, instead of the $5 million contemplated by the settlement agreement. [2] ¶ 21 Two days after the tax commission issued its decision on the 97-99 valuation dispute, the district court tax judge issued an opinion on Alliant and the BOE's Joint Motion for Approval of Settlement that was then pending before it. Although the district court denied the Motion for Approval on technical grounds, it otherwise expressed approval of the settlement. While this Court accepts the divisibility of jurisdiction [between the district court and the tax commission], it is of the opinion that the refund amount of $5 million is indivisible and non-allocatable between the various tax years. Therefore, even though this Court disagrees with the legal theory relied upon by the Utah State Tax Commission, the Court has no option but to reluctantly disapprove of the Settlement Agreement. The separately recognized divisibility of jurisdiction does not direct this Court, legally, to adopt a divisibility of the global refund. The rejection decision of the Utah State Tax Commission forces this court to reject a Settlement Agreement which it believes is valid and legally sustainable. ¶ 22 The following day, Alliant filed a Petition for Review of the tax commission's final decision in the 97-99 valuation dispute in Third District Court. In conjunction with that Petition, Alliant moved the district court to transfer the matter to tax judge Lynn Davis, before whom were pending the Independent Action and the real property cases from the 95-96 valuation dispute. Furthermore, by the time the Motion to Transfer was granted in early November, Alliant had voluntarily withdrawn all of its personal property tax appeals pending before the tax commission, so that it had no matters pending before that body, and all relevant disputes over tax years 1995 through 1999 were before Judge Davis. [3] ¶ 23 On November 14, 2001, Alliant requested that the district court amend its September 20, 2001 decision in which it had reluctantly disapproved the settlement, asking it to approve the settlement agreement now that it had jurisdiction over all tax disputes relevant to the agreement. After several hearings, the district court approved the settlement agreement between Alliant and the BOE on June 30, 2003. ¶ 24 In addition, the district court awarded attorney fees in favor of Alliant against the Assessor. According to the terms of the agreement, when a party breaches any condition of the settlement, the nonbreaching party is entitled to attorney fees incurred in enforcing the settlement. The district court concluded that since the Assessor was an officer of the county, he was necessarily a party to the agreement; and, since he contested the validity of the agreement instead of seeking to secure its approval, he was a breaching party against whom attorney fees could be assessed. ¶ 25 Granite and the Assessor now bring this appeal from the district court's decision. Both parties challenge the validity of the settlement agreement, arguing that it violates Utah constitutional and statutory provisions that require property to be assessed at a uniform and equal rate based on fair market value. The settlement agreement violates these principles, they argue, because it contemplates a lump sum refund and does not settle on a specific fair market value assessment for each of the tax years in question. Since this issue is dispositive of the question of the settlement's validity, we do not address in our analysis the myriad other arguments raised by the Assessor and Granite to contest the settlement's enforceability. ¶ 26 In addition, the Assessor challenges the district court's award of attorney fees against him. Each of these issues will be discussed in turn.