Court Opinion

ID: 7806869
Source: CourtListenerOpinion
Date Created: 2022-09-07 13:09:18.92552+00
Date Added: 2024-06-11T16:30:19.135877
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Warner J. Hamilton Jr. and                     :
Maria D. Hamilton,                             :
                         Petitioners           :
                                               :
                v.                             :    No. 705 F.R. 2019
                                               :    SUBMITTED: March 11, 2022
Commonwealth of Pennsylvania,                  :
                     Respondent                :

BEFORE:       HONORABLE ANNE E. COVEY, Judge
              HONORABLE MICHAEL H. WOJCIK, Judge
              HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER                                        FILED: September 7, 2022

              Taxpayers, Warner J. Hamilton, Jr. and Maria D. Hamilton, petition pro
se for review of the Board of Finance and Revenue’s denial of their request for
reconsideration from the decision and order dismissing Taxpayers’ petition for
refund.1 In the absence of an abuse of discretion, we affirm the Board of Finance
and Revenue’s denial.2

    1
      In Taxpayers’ brief, Mrs. Hamilton advised the Court of her husband’s 2021 death. While
the Court remains responsible for deciding this matter and applying the applicable law, we extend
our condolences to Mrs. Hamilton.
    2
      Because the vote of the commissioned judges was evenly divided, the opinion is filed “as
circulated” pursuant to Section 256(b) of the Commonwealth Court’s Internal Operating
Procedures. 210 Pa. Code § 69.256(b).
              The pertinent background of this matter is as follows. In July 2016,
Taxpayers were issued an assessment for personal income tax imposed on interest
income in the form of annuity death benefit payments. In the spring of 2017, notices
were issued advising them that they had an outstanding balance for Commonwealth
tax liabilities but were eligible to participate in the Department of Revenue’s Tax
Amnesty Program. They chose to participate in the program, paying by electronic
check which the Department processed.
              In November 2018, Taxpayers filed a petition for refund asserting that
the assessed tax was improperly imposed on funds that were already taxed. In
December 2018, the Board of Appeals dismissed their petition for failure to file their
petition within six months of the actual payment. See Section 3003.1(d) of the Tax
Reform Code of 1971.3 The Board of Finance and Revenue agreed, noting that
Taxpayers paid the tax on May 30, 2017, but did not file their petition for refund
until November 26, 2018, 361 days beyond the time limitation. (June 11, 2019
Board of Finance and Revenue Decision at 2, Ex. B to Commonwealth’s Br.) In
addition, the Board of Finance and Revenue observed that Taxpayers satisfied their
tax liability through the Tax Amnesty Program, which bars the right to claim any
refund of money paid under the program. Id.
              By letter dated June 20, 2019, Taxpayers requested reconsideration of
the denial of their petition for refund. On June 25, 2019, the Board of Finance and
Revenue denied the request. In July 2019, Taxpayers filed a letter with this Court
thereby preserving the filing date of their planned appeal. Subsequently, Taxpayers
filed an ancillary petition for review stating:

    3
      Act of March 4, 1971, P.L. 6, as amended, added by Section 14 of the Act of July 1, 1985,
P.L. 78, 72 P.S. § 10003.1(d).

                                              2
                    We received money from my [Mr. Hamilton]
             father’s inheritance that was not taxed in the state of
             Pennsylvania, so we paid the state taxes on the amount
             given to us by the lawyers . . . . Due to an error, the amount
             was included on our taxes, so the state understood that this
             was more money and income needed to be taxed. We
             started to appeal this when we received the first notice[,]
             but we were accruing interest. We decided to pay the
             interest to avoid more penalties, while we waited to hear
             the outcome of the issue. . . . We are asking the court for
             a decision in our favor to return the money from the
             interest and penalties we paid in this situation. Thank you.

(Aug. 12, 2019 Ancillary Pet. for Review at 1.)
             The Commonwealth filed an application to quash the ancillary petition,
alleging that it was either an untimely appeal of the Board of Finance and Revenue’s
June 11, 2019 decision or an attempted appeal of a non-appealable June 25, 2019
letter from the Board of Finance and Revenue denying reconsideration. In denying
the Commonwealth’s application, this Court held that Taxpayers’ appeal of the
Board of Finance and Revenue’s letter denying reconsideration was timely and could
go forward. However, we held that Taxpayers’ attempted appeal of the decision
denying their petition for refund was untimely. We stated that the timeliness of an
appeal goes to our jurisdiction to hear and decide an appeal, which cannot be
extended absent fraud, a breakdown in the administrative or court process, or non-
negligent circumstances justifying a late appeal. Hamilton v. Commonwealth (Pa.
Cmwlth., No. 705 F.R. 2019, filed Nov. 22, 2021) (Crompton, J.) (“Hamilton”), slip
op. at 7. In addition, we reiterated that the filing of a petition for reconsideration
does not toll the thirty-day appeal period. Id. Consequently, we held that we could
consider the Board of Finance and Revenue’s denial of reconsideration from the
decision dismissing Taxpayers’ petition for refund but not the merits of the decision

                                           3
denying the petition.4 The net result is that we may only reverse the Board of Finance
and Revenue’s decision to deny reconsideration for an abuse of discretion but may
not delve into the merits of the denial of the petition for refund. Id. at 7-8.
               We now consider whether the Board of Finance and Revenue abused
its discretion in denying Taxpayers’ petition for reconsideration.5 “A request for
reconsideration may be filed by a party to object to a Board order due to the Board’s
alleged failure to address an issue raised in the appeal, error of law or fact, or
computational error.” 61 Pa. Code § 703.41(a). “Neither the sufficiency of the
submission nor a determination as to whether a party satisfied its burden of proof is
a basis for reconsideration.” Id.
               In the request for reconsideration, Taxpayers stated that they were
requesting reconsideration and enclosed the same documents previously submitted

    4
      In light of this decision, we entered an order which set a briefing schedule and further stated,
inter alia, “Briefing shall be limited to whether or not the Board of Finance and Revenue abused
its discretion by denying [Taxpayers'] request for reconsideration.” (Order 11/22/2021). In
derogation of this order, the Commonwealth renewed its jurisdictional argument in its brief. While
we disagree with the Commonwealth and the dissent that the cited regulations can fairly be read
to prohibit appeals from denials of reconsideration, and we question the power of an agency to
impose such a rule on its own authority, we will not address the issue further here.
    5
      Absent evidence of bad faith, fraud, capricious action or abuse of power, this Court will not
review administrative tribunals’ acts of discretion. Keith v. Dep’t of Pub. Welfare, 551 A.2d 333,
336 (Pa. Cmwlth. 1988). It has been long established that an abuse of discretion “is not merely an
error of judgment, but if in reaching a conclusion the law is overridden or misapplied, or the
judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or ill-will,
as shown by the evidence of record, discretion is abused.” Mielcuszny v. Rosol, 176 A. 236, 237
(Pa. 1934). In addition, it is well established that abuse of discretion is a high standard, requiring
this Court to abide by an agency’s decision absent satisfaction of the foregoing criteria. Slawek v.
State Bd. of Med. Educ. & Licensure, 586 A.2d 362, 365 (Pa. 1991).

                                                   4
in their petition for refund. Their request letter, submitted by Albert G. Smith MA,
RTRP,6 provided:

                        This letter is for a request for Reconsideration for
                 [Taxpayers], Social Security Number []. Please find the
                 enclosed documents of Board of Appeals Petitioner Form,
                 original letter dated 2-24-2016, original notice dated 2-17-
                 2016, follow[-]up letter dated 6-3-2016, Billing Notice
                 dated 5-19-2016, copies of 1099 R from Life Insurance Co
                 of the Southwest, 1099 R from Transamerica Advisors
                 Life Insurance Co, 1099 R of the Life Insurance Co of the
                 Southwest, 1099 R from America General Life Ins.,
                 Pennsylvania Department of Revenue notice, letter dated
                 11-24-2016. If you need any additional information,
                 please contact me. Thank you for your time.

(June 20, 2019 Req. for Recons. at 1, Ex. D to Commonwealth’s Br.)
                 The Board of Finance and Revenue did not abuse its discretion in
denying Taxpayers’ request for reconsideration. In Taxpayers’ request, they did not
assert any grounds for the Board to reconsider its original order. In addition, in their
brief to this Court, they failed to assert any basis for an abuse of discretion on the
part of the Board in denying their request. Their perception that they maintained
communication with the courts and the Commonwealth “in a timely and appropriate
manner” and assertion of alleged “misinformation from numerous sources, for
example the [Tax] Amnesty Program[,]”7 simply are not sufficient to rise to the level
of an abuse of discretion.8
    6
        According to Taxpayers, their accountant requested reconsideration.
    7
        (Taxpayers’ Br. at 6.)
    8
        The decision dismissing Taxpayers’ petition for refund stated:
                    [Taxpayers] were subsequently issued notices on April 17
             and May 10, 2017, that they had an outstanding balance for
             Pennsylvania tax liabilities, and were eligible to participate in the
(Footnote continued on next page…)

                                                 5
               Accordingly, we affirm.9

                                              _____________________________________
                                              BONNIE BRIGANCE LEADBETTER,
                                              President Judge Emerita

               Department of Revenue’s Tax Amnesty Program. These notices
               included the statement “Important Note – If you elect to take
               advantage of this program, you shall forgo all rights to protest any
               amnesty eligible period and may not file a later claim for refund for
               amounts paid through the Tax Amnesty Program.”
(June 11, 2019 Board of Finance and Revenue Decision at 1, Ex. B to Commonwealth’s
Br.)(emphasis added).
    9
       Notwithstanding the Commonwealth’s reiteration of its argument that the denial of
Taxpayers’ petition for reconsideration is not a final order of a government unit and, therefore, not
reviewable on appeal, we rely on the ruling set forth in Hamilton rejecting the Commonwealth’s
position.

                                                 6
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Warner J. Hamilton Jr. and               :
Maria D. Hamilton,                       :
                         Petitioners     :
                                         :
              v.                         :   No. 705 F.R. 2019
                                         :
Commonwealth of Pennsylvania,            :
                     Respondent          :

                                   ORDER

            AND NOW, this 7th day of September, 2022, the Board of Finance and
Revenue’s denial of Petitioners’ request for reconsideration from the Board’s
decision and order is hereby AFFIRMED.

                                       _____________________________________
                                       BONNIE BRIGANCE LEADBETTER,
                                       President Judge Emerita
           IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Warner J. Hamilton Jr. and                :
Maria D. Hamilton,                        :
                  Petitioners             :
                                          :
             v.                           :
                                          :
Commonwealth of Pennsylvania,             :   No. 705 F.R. 2019
                Respondent                :   Submitted: March 11, 2022

BEFORE:      HONORABLE ANNE E. COVEY, Judge
             HONORABLE MICHAEL H. WOJCIK, Judge
             HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

DISSENTING OPINION
BY JUDGE COVEY                                        FILED: September 7, 2022

             Respectfully, I disagree with the Majority’s conclusion that this Court has
jurisdiction to decide the instant appeal. Because the Board of Finance and Revenue’s
June 25, 2019 letter denying reconsideration is not an appealable order, I believe this
Court lacks jurisdiction.
             In the instant case, this Court, in a single-judge memorandum opinion,
denied the Commonwealth’s Motion to Quash. See Hamilton v. Commonwealth (Pa.
Cmwlth. No. 705 F.R. 2019, filed Nov. 22, 2021) (Hamilton I). In Hamilton I, the
Court determined that an administrative agency’s denial of reconsideration is an
appealable order based on case law and Section 5105(a)(2) of the Judicial Code, 42
Pa.C.S. § 5105(a)(2) (relating to a right of appeal from an administrative agency’s final
order). However, the cases upon which Hamilton I relied, Keith v. Department of
Public Welfare, 551 A.2d 333 (Pa. Cmwlth. 1988), and Southwest Pennsylvania
Natural Resources, Inc. v. Department of Environmental Resources, 465 A.2d 108 (Pa.
Cmwlth. 1983), as well as Section 5105(a)(2) of the Judicial Code, refer to the
application of the Administrative Agency Law.1 Importantly, the Administrative
Agency Law does not apply to the Board of Finance and Revenue.
               Significantly, Section 701 of the Administrative Agency Law (Scope of
Subchapter) provides, in relevant part:

               (a) General rule.--Except as provided in subsection (b), this
               subchapter [entitled Judicial Review of Commonwealth
               Agency Action] shall apply to all Commonwealth agencies
               regardless of the fact that a statute expressly provides that
               there shall be no appeal from an adjudication of an agency,
               or that the adjudication of an agency shall be final or
               conclusive, or shall not be subject to review.
               (b) Exceptions.--None of the provisions of this subchapter
               shall apply to:
               (1) Any matter which is exempt from Subchapter A of
               Chapter 5 [of the Administrative Agency Law] (relating to
               practice and procedure of Commonwealth agencies).

2 Pa.C.S. § 701 (underline emphasis added).
               Subchapter A of Chapter 5 of the Administrative Agency Law (entitled
Practice and Procedure of Commonwealth Agencies), specifically, Section 501 of the
Administrative Agency Law (Scope of Subchapter) states, in pertinent part:

               (a) General rule.--Except as provided in subsection (b), this
               subchapter shall apply to all Commonwealth agencies.
               (b) Exception.--None of the provisions of this subchapter
               shall apply to:
               (1) Proceedings before the Department of Revenue, Auditor
               General or Board of Finance and Revenue, involving the
               original settlement, assessment or determination or
               resettlement, reassessment or redetermination, review or
               refund of taxes, interest or payments made into the
               Commonwealth treasury.

      1
          2 Pa.C.S. §§ 501-508, 701-704.
                                           AEC - 2
2 Pa.C.S. § 501 (underline emphasis added). Here, because Warner J. Hamilton Jr. and
Maria D. Hamilton (Taxpayers) are appealing from the Board of Finance and
Revenue’s order dismissing Taxpayers’ petition for refund, the Administrative Agency
Law does not apply.
            Further, Section 5105(a) of the Judicial Code provides, in relevant part:

            General rule.--There is a right of appeal under this
            subsection from the final order (including an order defined
            as a final order by general rule) of every:
            ....
            (2) Government unit which is an administrative agency
            within the meaning of section 9 of Article V of the
            Constitution of Pennsylvania to the court having jurisdiction
            of such appeals. An order is appealable under this paragraph
            notwithstanding the fact that it is not appealable under
            Chapter 7 of Title 2 (relating to judicial review).

42 Pa.C.S. § 5105(a). The “Bar Association Comment” following that provision
expounds, in pertinent part: “Subsection (a)(2) (second sentence) [is] intended to
overrule Fricchione v. Department of Education, [287 A.2d 442] ([Pa. Cmwlth.]
1972).” Id. cmt.
            The issue in Fricchione was whether the Department of Education’s
action constituted an adjudication from which the appellant could appeal under the
Administrative Agency Law. The Fricchione Court held: “‘(T)he Administrative
Agency Law does not afford review of actions of governmental bodies which are not
adjudications or judicial in nature.’ Manheim [Twp.] Sch[.] Dist[.] v. State [Bd.] of
Educ[.], . . . 276 A.2d 561 ([Pa. Cmwlth.] 1971).” Fricchione, 287 A.2d at 443.
Because Section 5105(a) of the Judicial Code was added to clarify the Administrative
Agency Law’s application, and the Administrative Agency Law expressly excludes
Board of Finance and Revenue proceedings, Section 5105(a) of the Judicial Code does
not apply to the Board of Finance and Revenue.

                                      AEC - 3
            Moreover, Section 703.45(a) of the Board of Finance and Revenue’s
Regulations provides:

            A request for reconsideration is not a substitute for a court
            appeal. When the Board [of Finance and Revenue] denies
            the request for reconsideration[,] the Board[] [of Finance and
            Revenue’s] original order is a “final order” for purposes of
            appeal to Commonwealth Court within the time specified by
            Pennsylvania Rule of Appellate Procedure 1571(b) (relating
            to [“D]eterminations of the Board of Finance and
            Revenue[” Pa.R.A.P. 1571(b)]). When the Board [of
            Finance and Revenue] grants a request for reconsideration
            the time period for filing an appeal is stayed until the Board
            [of Finance and Revenue] issues a reconsidered order. The
            reconsidered order will replace the original order and will be
            a “final order” appealable to Commonwealth Court within
            the time specified by Pennsylvania Rule of Appellate
            Procedure 1571(b).

61 Pa. Code § 703.45(a) (emphasis added).
            In addition, in the instant action, the Notice included with the Board of
Finance and Revenue’s order expressly provided:

            The enclosed Board of Finance and Revenue Order (“Order”)
            is a “final order” for purposes of appeal to the
            Commonwealth Court.
            APPEAL TO COURT – If you are dissatisfied with the
            enclosed Order, you may appeal to the Commonwealth
            Court of Pennsylvania (“Court”) by filing a Petition for
            Review with the Court within the time specified by Rule
            1571(b) of the Pennsylvania Rules of Appellate
            Procedure.
            REQUEST FOR RECONSIDERATION – If you think
            that the Order contains a misstatement of fact or law based
            on evidence previously submitted, you can request that the
            Board [of Finance and Revenue] reconsider its Order by
            filing a written Request for Reconsideration with the Board
            [of Finance and Revenue] within 15 days from the mailing
            date indicated on the Order.

                                      AEC - 4
             Important: A Request for Reconsideration is not a
             substitute for a Court appeal. When a Request for
             Reconsideration is filed, the Board [of Finance and Revenue]
             will respond within five days advising both the Petitioner and
             the Department [of Revenue] that either: 1) the Request for
             Reconsideration is denied and the Board [of Finance and
             Revenue] will not issue a Reconsidered Order; or 2) the
             Request for Reconsideration is granted in which case the
             Board [of Finance and Revenue] will further review the
             Request for Reconsideration and will subsequently issue a
             Reconsidered Order. If the Board [of Finance and Revenue]
             responds that a Reconsidered Order will be issued, the
             Reconsidered Order will be a “final order” appealable to the
             Court as set forth above.

Petition for Review at 9 (all emphasis in original). Consequently, because a taxpayer
has 15 days to request reconsideration, and the Board of Finance and Revenue has 5
days to respond, if reconsideration is denied, a taxpayer has 10 days to timely appeal
from the Board of Finance and Revenue’s original order to this Court.
             Finally, the June 25, 2019 letter denying reconsideration herein included
the following: “The original order remains the Board [of Finance and Revenue]’s final
order and is appealable to Commonwealth Court within the time specified in 1571(b)
of the Pennsylvania Rules of Appellate Procedure [(relating to review of
“Determinations of the Board of Finance and Revenue,” Pa.R.A.P. 1571)].”
Commonwealth Br. Appendix A. Because a denial of a reconsideration request is not
a final order, and neither Taxpayers nor the Majority has presented any authority to
show otherwise, it is not appealable.
             Just as a trial court’s denial of reconsideration is not an appealable order,
see Chaney v. Fairmount Park Real Est. Corp., 155 A.3d 648 (Pa. Cmwlth. 2016); see
also Commonwealth v. Rachau, 670 A.2d 731 (Pa. Cmwlth. 1996) (trial court order
denying motion for reconsideration dismissed as unreviewable); Thorn v. Newman, 538
A.2d 105 (Pa. Cmwlth. 1988) (order denying reconsideration not reviewable on
appeal), neither is the Board of Finance and Revenue’s denial of reconsideration an

                                        AEC - 5
appealable order. Accordingly, since the Board of Finance and Revenue’s June 25,
2019 letter denying reconsideration is not an appealable order, I would quash the appeal
for lack of jurisdiction.2

                                                 _______________________________
                                                 ANNE E. COVEY, Judge

       2
               It is [] well[-]settled [law] that where subject matter jurisdiction does
               not exist, consent of the parties is incapable of conferring such
               jurisdiction. Roberts v. Martorano, . . . 235 A.2d 602 (Pa. 1967); Local
               302, [Int’l] [Ass’n] of Fire Fighters v. City of Allentown, . . . 423 A.2d
               1119 ([Pa. Cmwlth.] 1980). In Pozzuolo Estate, . . . 249 A.2d 540, 545
               ([Pa.] 1969), the [C]ourt stated, “[n]either by act of the parties nor by
               the act of this Court can jurisdiction be conferred upon a court where
               jurisdiction is nonexistent.” (Emphasis added.) . . . . [W]henever a
               court discovers that it lacks jurisdiction over the subject matter or the
               cause of action it is compelled to dismiss the matter under all
               circumstances, even where we erroneously decided the question in a
               prior ruling.
Hughes v. Pa. State Police, 619 A.2d 390, 393 (Pa. Cmwlth. 1992); see also Domagalski v. Szilli, 812
A.2d 747, 750 n.2 (Pa. Cmwlth. 2002) (“[W]e will reconsider a decision from a single judge if the
decision concerns subject matter jurisdiction.”); Curley v. Bd. of Sch. Dir. of the Greater Johnstown
Sch. Dist., 641 A.2d 719, 723 n.3 (Pa. Cmwlth. 1994) (“[T]his Court will reconsider a decision from
a single judge if the decision concerns subject matter jurisdiction.”).

                                              AEC - 6