Department of Revenue v. Southern Union Gas Co.

OPINION WREN, Acting Presiding Judge. The Department of Revenue brings this appeal from the dismissal of its action against Southern Union Gas Co. and the State Board of Tax Appeals for failure to bring its case to trial within 90 days. The Department had filed a pleading entitled “Notice of Appeal and Complaint” contesting the Board of Tax Appeals’ reduction in the valuation of Southern Union Gas Co.’s utility property for the 1974 tax year. The dismissal was ordered pursuant to A.R.S. § 42-152 A.1 [538] The Department urges three grounds for reversal of the Superior Court’s judgment. It contends that the case is not entitled to the priority provision of A.R.S. § 42-152 A, that the failure to try a property tax appeal within 90 days does not require dismissal, and that Southern Union Gas Co. waived any right it had to the A.R.S. § 42-152 A priority. The Department’s contention that the case was not entitled to priority is based upon the assertion that the action was brought under A.R.S. § 42-123 B(l) and B(6).2 The Department admits that an appeal under A.R.S. § 42-123 B(6) is entitled to priority but urges that priority is lost when a B(6) appeal is coupled with a complaint alleging illegality under B(l). By analogy, the appellant cites the authorities permitting a taxpayer to contest valuation by bringing an appeal under A.R.S. §§ 42-151 and 152 and thereby be entitled to priority or in the alternative to sue for a refund under A.R.S. § 42-204 C raising valuation questions but without the benefit of the priority granted in A.R.S. § 42-152 A. Department of Property Valuation v. Salt River Project Agri. Imp. and Power Dist., 113 Ariz. 472, 556 P.2d 1134 (1976); County of Maricopa v. Chatwin, 17 Ariz. App. 576, 499 P.2d 190 (1972). In County of Maricopa v. Chatwin, supra, this Court noted that if the taxpayer appeals under the provisions of A.R.S §§ 42-151 and 152, he is limited to raising only issues relating to valuation and classification. A taxpayer wishing to raise other issues can proceed under A.R.S. § 42-204 C in a suit for refund. However, the Court went on to hold that the appeal procedure of A.R.S. §§ 42-151 and 152 was not the exclusive means by which a taxpayer can raise valuation and classification questions. These issues may also be raised in an A.R.S. § 42-204 C suit. This conclusion was based upon the Court’s belief that the enactment of the valuation and classification appeal procedure did not affect the previously existing remedies under A.R.S. § 42-204 C which had always encompassed valuation and classification questions. This reasoning was expressly approved by the Supreme Court in Department of Property Valuation v. Salt River Project Agri. Imp. and Power Dist., supra. However, it does not necessarily follow that the Department has a similar choice of procedures, as it contends. [539] A.R.S. § 42-123 B(6) provides the specific method by which the Department can contest allegedly erroneous valuations and classifications. “[T]he director may appeal such decision to the superior court in the manner provided in A.R.S. § 42-151.” (Emphasis added.) It is the conclusion of this Court that A.R.S. § 42-123 B(6) provides the exclusive means by which the Department can appeal a valuation decision of the Board of Tax Appeals. It follows therefore that the procedures outlined in A.R.S. §§ 42-151 and 152 are applicable to all Department appeals, since no alternative method of raising valuation and classification is provided by statute for the Department. We hold that the issue of erroneous valuation alleged by the Department pursuant to A.R.S. § 42-123 B(6) must be heard pursuant to. the procedures of A.R.S. §§ 42-151 and 152 and therefore the 90 day priority provision was applicable. Further, because A.R.S. § 42-152 limits the issues on appeal to valuation and classification, County of Maricopa v. Chatwin, supra, if appellant’s “Notice of Appeal and Complaint” raised any issues under A.R.S. § 42-123 B(l) they were properly dismissed. A final issue relating to the matters pleaded by appellant is the assertion that the Board’s reduction in valuation was made without jurisdiction. This issue falls under the claim of erroneous valuation and is without merit. The date of transmittal of valuation by the Department as required by A.R.S. § 42-124.01 does not establish a time before which any appeal would be premature. Southern Union Gas Co. had received notice of the Department’s final valuation figure which was in fact transmitted. Southern Union Gas was justified in appealing to the Board upon receiving this notification and could presume that no further reductions would be made before the Department transmitted its valuations. The appellant’s second contention is that the failure to try a case entitled to an A.R.S. § 42-152 A priority does not mandate dismissal if not tried within 90 days. Initially, we find no merit to appellant’s assertion that the responsibility to try the case within 90 days lies with the Court. The wording of the statute indicates that the 90 days begins to run from the time the appeal is docketed. This means nothing more than from the date the appeal is filed with the Clerk of Court. This statute places no duty on the court to set the case for trial on its own. The responsibility for prosecuting a case lies with the plaintiff. Copper v. Odom, 6 Ariz.App. 466, 433 P.2d 646 (1967); see, Rule 41 B, Arizona Rules of Civil Procedure, 16 A.R.S.; Rule V, Uniform Rules of Practice of the Superior Court, 17A A.R.S. The Local Rules of Practice for Maricopa County, Rule V(e) places on the litigant the responsibility to note in the caption of the case that it is one entitled to priority. It was the Department and not the court that had the responsibility to have the matter set for trial within 90 days. Appellant also asserts that A.R.S. § 42-152 A is not mandatory but directory. This assertion is based on appellant’s contention that the statute is not jurisdictional. We agree with appellant that the 90 day priority for trial is not a jurisdictional provision. Failure to try the case within 90 days does not deprive the court of subject matter jurisdiction. This is made evident by the fact that the parties may agree to a waiver of the 90 day priority. Subject matter jurisdiction cannot be conferred or lost by agreement of the parties. Although not a jurisdictional matter, the question of the appropriate remedy for non-compliance with A.R.S. § 42-152 A still remains. In County of Maricopa v. Garfield, 109 Ariz. 503, 513 P.2d 932 (1973), the Supreme Court, in discussing the mandatory vs. directory nature of another statute relating to taxation, noted that this determination depended upon the purposes to be achieved by the statute. If the provisions were intended to benefit the taxpayer, the statute would be construed as mandatory. If the purpose was only to benefit the taxing authority by setting forth an adminis [540] trative guide, the statute would be considered directory. While the speedy resolution of valuation and classification certainly benefit the taxing authority, the appeal procedures provide some “very definite” advantages to the taxpayer. These include the priority given in A.R.S. § 42-152 A as well as the ability to contest valuation prior to paying the taxes under protest. County of Maricopa v. Chatwin, supra; also, Harvey v. Lissner, 124 Ga.App. 448, 184 S.E.2d 184 (1971). We can only conclude that the priority granted by A.R.S. § 42-152 A was intended to be mandatory unless the parties agree to a waiver. Further, the responsibility is on the party filing the appeal to comply with the provision. It does not necessarily follow, however, that dismissal is the sole remedy should the case not be set for trial within 90 days of the filing of the notice of appeal. Depending upon the circumstances, the trial court may choose to dismiss or may choose to order the parties to trial. In the absence of any express language mandating dismissal, we will not infer that the legislature intended this harsh result in all cases. This case must be remanded for reconsideration however, because the trial judge dismissed on his mistaken belief that subject matter jurisdiction had been lost. Finally, we do not agree with appellant’s contention that priority was lost due to appellees’ failure to assert it. As previously noted appellant had the responsibility to bring the matter of priority to the court’s attention and have the case set for trial. Appellees had the right to move to dismiss after appellant failed to comply with A.R.S. § 42-152 A. Remanded. NELSON, J., concurs. Footnotes [1] That statute provides: “A. The superior court shall hear the appeal within ninety days after the appeal is docketed, with or without a jury, unless both parties file a written agreement with the court for a postponement.” [2] The pertinent sections of A.R.S. § 42-123 B provide: “B. The department may: 1. Examine into all alleged violations of the provisions of this title relating to the valuation of property and the assessment and collection of taxes and request the attorney general or the county attorney in their respective counties to commence and prosecute actions and proceedings or to represent counties to commence and prosecute actions and proceedings or to represent the department in litigation to enforce the laws relating to taxation and orders, or the rules and regulations of the department. When in the opinion of the director and in the opinion of the attorney general or the county attorney of the county in which the public official serves, a public official, who performs valuing, taxing or equalizing functions, is guilty of official misconduct or neglect of duty, the director shall take whatever steps are necessary to insure that complaints are filed and prosecutions commenced against such officials for their removal from office. A complaint by the director charging official misconduct or neglect of duty of a public officer shall be delivered to the county attorney or to the attorney general who shall file the original with the superior court in the county in which the public official serves and cause a copy thereof to be served upon such public official. Proceedings upon such complaints shall be in accordance with the provisions of subsections B and C of § 38-342, and §§ 38-343 and 38-345. ****** 6. Contest any proposed valuation or classification or any proposed change in valuations or classifications before any county board of equalization or before the state board of tax appeals. If any decision of any county board of equalization or of the state board of tax appeals is, in the opinion of the director, erroneous, the director may appeal such decision to the superior court in the manner provided in § 42-151, on or before the final date a taxpayer may file an appeal from the valuation or classification of his property.”