Court Opinion

ID: 9722570
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:39:39.589562+00
Date Added: 2024-06-11T18:24:37.215167
License: Public Domain

BUCKINGHAM, Judge,
concurring in part and dissenting in part.
I concur with most portions of the majority opinion. However, I respectfully dissent from the portion of the opinion allowing the taxpayers to seek refunds as a part of their class action suit.
The circuit court certified this case as a class action and determined that the City had not been authorized to collect ad valo-rem taxes on the taxpayers’ real property. But the circuit court did not allow the taxpayers to seek refunds as a class. Citing the Taulbee and Swiss Oil eases, the court concluded that class action relief was not available for the refund of taxes.26
As noted by the majority, the Taulbee and Bischojf cases hold that “an action for a refund of taxes paid may not proceed as a class action.” Bischoff, 733 S.W.2d at 763. This conclusion was reached by the Taulbee and Bischojf courts based on the emphasis in the Swiss Oil case on the words “in each case” as used in the predecessor statute to KRS 134.590(6). Because those three words were omitted when the statute was amended in 1996, the majority reasons that class action relief is now available for the refund of taxes. More specifically, the majority remands this case to the circuit court for further proceedings to award tax refunds to the members of the class. I believe the majority has erroneously resolved this issue.
First, assuming that the majority is correct that the removal of the words “in each case” from the statute opened the door for class actions for tax refunds, that does not mean the circuit court in this case was required to allow the taxpayers to proceed in that manner. There is no right to litigate a claim as a class action, and CR27 23 provides only that the court may certify a class action if the plaintiffs satisfy the requirements of the rule. See Southwestern Refining Co., Inc. v. Bernal, 22 S.W.3d 425, 439 (Texas 2000). In fact, whether a class should be certified is a matter within the discretion of the trial court, and the trial court’s decision is final absent an abuse of that discretion. See Sowders v. Atkins, 646 S.W.2d 344, 346 (Ky.1983). See also 32B AM.JUR.2D Federal Courts §§ 1821 and 2203 (1996). Assuming the majority was correct in its holding that the removal of the words from the statute by the legislature now authorizes class actions for tax refunds, then the case should be remanded for the circuit court to determine whether the class action should be maintained in this case based on the requirements in CR 23.
Second, the taxpayers could not seek refunds as a class in this case because not all members of the class met the jurisdictional amounts for maintaining an action in circuit court. The district courts have exclusive jurisdiction of amounts in controversy not exceeding $4,000. KRS 24A.120(l)(a). Therefore, the circuit courts have jurisdiction of amounts in controversy exceeding $4,000. See KRS 23A.010(1). In this case most of the individual claims for tax refunds were within the exclusive jurisdiction of the district court, although a few were within the jurisdiction of the circuit court.
*332In Lamar v. Office of Sheriff of Daviess County, 669 S.W.2d 27 (Ky.App.1984), this court held that a class action could not be maintained where none of the individual claims was equal to or exceeded the statutory jurisdictional amount of thé circuit court. Id. at 31. Although that case is distinguishable from this case since some members of the class in this case meet the jurisdictional requirements of the circuit court, the Lamar court relied on Zahn v. International Payer Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), a case involving similar facts from the U.S. Supreme Court under the applicable federal civil rule concerning class actions. In the Zahn case, the Supreme Court affirmed a ruling by a lower court refusing to permit a case to proceed as a class action. 414 U.S. at 302, 94 S.Ct. 505. The court reasoned that every member of the class must satisfy the jurisdictional amount before the case may proceed as a class action. Id. at 301, 94 S.Ct. 505. In short, I conclude that this court should have affirmed the trial court and not allowed the ease to proceed as a class action for tax refunds since all members of the class did not meet the jurisdictional requirements for maintaining an action in circuit court.
Third, the class action should , not have been allowed to proceed in this case because there is no indication that all members of the class had filed a claim for refund within two years from the date of the payment of the tax as required by KRS 134.590(6). “In a purported class action refund suit, all class members must have filed a refund claim, and the suit is not maintainable on the basis of the refund claim filed by the class representative.” 35A AM.JUR.2D Federal Tax Enforcement § 966 (2001). As the Kentucky Supreme Court said in the Taulbee case, “KRS 134.590(6) is not self-executing. Application for refund must be made individually.” Id. at 829. See also McConnell v. United States, 295 F.Supp. 605 (E.D.Tenn.1969) and Agron v. Illinois Bell Telephone Co., 325 F.Supp. 487, 488 (N.D.Ill.1970). Neither the circuit court nor this court may speculate whether all members of the class were jurisdietionally capable of bringing a refund action. See Lipsett v. United States, 37 F.R.D. 549, 552 (S.D.N.Y.1965). Like those members of the class who failed to meet the jurisdictional amount for filing their claim in the circuit court, those who failed to timely apply for a refund likewise are jurisdic-tionally prohibited from being members of the class.
Fourth, I disagree with the majority’s opinion that the' effect of the removal of the words “in each case” from KRS 134.590(6) was to alter the statute so as to permit taxpayers requesting refunds for ad valorem taxes to bring their claims by way of class action. KRS 134.590(6) does not relate to the manner in which a civil suit may be filed for tax refunds. Rather, the statute sets a two-year period of time within which one may apply for a refund. Eliminating the words “in each case” has no impact on whether taxpayers may proceed by class action to obtain refunds.
In short, Kentucky law does not allow a class action to seek tax refunds. See Taulbee and Bischoff. More importantly, a class action for tax refunds was properly denied in this case because numerous members of the class were jurisdietionally incapable of maintaining an action in circuit court. I would affirm the trial court on this issue.

. The action by the circuit court in initially certifying the class and determining the validity of the tax but then not allowing the action for refunds to proceed by class action was proper. See Bischoff, 733 S.W.2d at 763. See also 59 AMJUR.2D Parties § 106 (2002), concerning de-certification of a class.

. Kentucky Rules of Civil Procedure.