Opinion
No. 1269 C.D. 2013
06-03-2014
Appeal of Cleft of the Rock Ministries in Regard to Property Situate at 501 E. 9th Avenue, Borough of Munhall, Allegheny County, Pennsylvania (Block & Lot No. 130-1-250 and 130-1-252 Other Interested Parties: Borough of Munhall Steel Valley School District Appeal of: Cleft of the Rock Ministries
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge (P.) HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
This opinion was reassigned to the authoring judge on May 8, 2014.
Cleft of the Rock Ministries (Landowner) appeals from the order of the Court of Common Pleas of Allegheny County (trial court) denying its petition for leave to file an application for an exemption of taxes nunc pro tunc. We affirm.
In its petition, Landowner alleged that it acquired the property at 501 E. 9th Avenue in the Borough of Munhall (Borough), Allegheny County (County), Pennsylvania, on December 14, 2001, from First Christian Church of Homestead and the property was exempt from all taxes on that date. At the time Landowner acquired the property, the phrase "Transaction Tax Exempt" appeared on the deed, and Landowner believed that the property's tax exempt status would transfer along with title from one church to the other. Neither the County, the Borough nor Steel Valley School District (School District) gave any indication to Landowner that the property would not continue to be treated as tax exempt. (Petition at ¶¶1-6).
Landowner did not become aware that it was required to file a new Allegheny County Application for Exemption of Real Estate Taxation until it received tax bills for the tax years 2002 and 2003. Once Landowner learned that a new application was required, it filed an application for exemption for tax year 2004. The application was approved and the property was granted tax exempt status beginning with tax year 2004 and following. The County exonerated the tax lien against the property for tax years 2002 and 2003. The Borough and the School District refused Landowner's requests that tax liens for 2002 and 2003 be exonerated, but they made no efforts to collect any of the amounts owing for tax years 2002 and 2003 until on or about November 2012. (Petition at ¶¶7-11).
In addition to the above averments, Landowner asserted that it will suffer extreme financial hardship if all amounts allegedly owing for tax years 2002 and 2003 are not exonerated. Citing In re Appeal of Borough of Riegelsville from the Bucks County Board of Assessment and Revision of Taxes, 979 A.2d 399 (Pa. Cmwlth. 2009), Landowner argued that this case presents unique circumstances that provide a basis for granting a petition to apply for an exemption nunc pro tunc. Noting that there is no dispute that the property was tax-exempt prior to 2002 and from 2004 onward, Landowner asserted that the collection of taxes by the taxing authorities would result in the receipt of monies that they otherwise would not have received. Finally, Landowner argued that the collection of taxes allegedly owing for years 2002 and 2003 would be contrary to the unambiguous language of Section 8812(a)(1) of the Consolidated County Assessment Law; unconstitutional under Article 8, Section 2(a)(1) of the Pennsylvania Constitution; and contrary to the well-established legal principles regarding the tax-exempt status of property owned in fee by a church and regularly used for religious worship. (Petition at ¶¶12-20). The Borough and the School District filed an answer to the petition with new matter.
53 Pa. C.S. §8812(a)(1). Section 8812(a)(1) states:
(a) General rule.—The following property shall be exempt from all county, city, borough, town, township, road, poor, county institution district and school real estate taxes:
(1) All churches, meetinghouses or other actual places of regularly stated religious worship, with the ground annexed necessary for their occupancy and use.
Art. VIII, §2(a)(1). Article 8, Section 2(a)(1) states:
(a) The General Assembly may by law exempt from taxation:
(i) Actual places of regularly stated religious worship
The trial court denied Landowner's petition without a hearing, holding that the facts set forth in the petition, even if proved, would not permit the granting of the petition to apply for an exemption nunc pro tunc. The trial court stated that it did not consider the taxing bodies' answer or new matter or Landowner's reply in disposing of the petition.
The trial court considered Borough of Riegelsville, which involved an appeal by a borough from the denial of a tax exemption for properties it had acquired and a trial court's subsequent denial of the borough's request to appeal the tax status of those properties nunc pro tunc. The borough acquired three properties to create open space that were tax exempt due to their public ownership and their open-space status. The taxes were imposed on the properties and the assessment notices for each were sent to the former owner, who then forwarded the notices to the borough. On the date to appeal its taxable status, the borough's counsel went to the county's assessment office and informed an official that the prior owner was incorrectly listed as the current owner of the three properties. The official informed counsel that all of its records regarding the borough's ownership of the three properties "were ok," which counsel mistakenly understood to mean that the properties were recognized as tax exempt. The borough learned that the properties were not given tax-exempt status, filed applications for tax exemption, and sought to appeal the tax status of each nunc pro tunc. The county assessment office denied the borough's request and the trial court denied the borough's nunc pro tunc appeal.
On further appeal, this Court explained:
The law is clear that nunc pro tunc relief may only be granted in limited circumstances. "When a statute fixes the time within which an appeal may be taken, a court may not extend that time period or allow an appeal nunc pro tunc absent a showing that extraordinary circumstances involving fraud or its equivalent, duress, or coercion caused the delay in filing an appeal." "Timeliness of such a request goes to jurisdiction and affects the competency of the appellate court to act. The court has no jurisdiction to set back and to resurrect the question of an exemption." However, "an appeal nunc pro tunc may be granted ... in order to prevent injustice" in unique cases, "upon a showing
that unusual circumstances prevented a party from timely filing."Borough of Riegelsville, 979 A.2d at 402-03 (citations omitted and emphasis in original). Ultimately, this Court concluded that the case presented unusual circumstances that caused a delay in the borough's filing a timely appeal. "In particular, we [found] that the statement by the Board Official to the Borough's Counsel created a reasonable presumption that the properties' tax exemption status had been changed." Id. at 403.
The trial court in this case found Borough of Riegelsville distinguishable, noting that the properties at issue in Borough of Riegelsville were owned by a governmental body and were presumed to be tax exempt. The trial court also noted that the tax bills in that case were mistakenly sent to the former owner. Finally, the trial court noted that prior to the appeal deadline, the borough's counsel spoke with assessment officials who indicated that the board was aware of the change of ownership and left counsel with the impression that no further action was required on the borough's part to obtain the exemption.
The trial court observed that in contrast to those circumstances, in this case, the burden of establishing eligibility for a tax exemption is on Landowner. The trial court also noted that Landowner learned that it was required to file an application for tax exemption no later than 2004 when it received tax bills for the years 2002 and 2003. Based on the averments in Landowner's petition, the trial court concluded that Landowner offered no reasonable excuse for its failure to file a request for exemption prior to 2013. Accordingly, the trial court denied Landowner's petition to file an application for exemption of taxes nunc pro tunc and Landowner filed this appeal.
See, e.g., Borough of Riegelsville, 979 A.2d at 403; Evangel Baptist Church v. Mifflin County Board of Assessment Appeals, 815 A.2d 1174, 1175-76 (Pa. Cmwlth.), appeal denied, 827 A.2d 1202 (Pa. 2003).
This court's scope of review is limited to determining whether the trial court abused its discretion or committed an error of law. Borough of Riegelsville, 979 A.2d at 402 n.3.
On appeal to this Court, Landowner argues that it has established the unusual or extraordinary circumstances necessary under Borough of Riegelsville to be entitled to file a petition for an exemption nunc pro tunc. Specifically, Landowner asserts that: (1) it did not realize that the taxing authorities were not treating Landowner as tax exempt for the years 2002 and 2003 until 2012, when the School District initiated the tax sale; (2) Landowner could not afford and was not represented by counsel in connection with the transfer of the property from one church to the other; (3) Landowner reasonably believed that the tax-exempt status of the church property would transfer along with title; (4) Landowner reasonably believed that the filing of the applications for exemptions in 2004 applied retroactively to tax years 2002 and 2003 because it was treated retroactively by the County; and, finally, (5) the taxing authorities' self-imposed ten-year delay in attempting to collect the tax owed allowed for years of penalty and interest to accrue, causing Landowner an extreme hardship and lulling Landowner into believing that the matter had been resolved.
While Landowner argues the foregoing in this appeal, and the dissent relies upon these assertions, they are a mischaracterization of what Landowner alleged in its petition. Landowner never alleged that it reasonably believed that the filing of the application in 2004 applied retroactively to the 2002 and 2003 tax years or that it was treated retroactively by Allegheny County. The petition merely alleges that Landowner wasn't aware of the filing requirement until it received the tax bills for the 2002 and 2003 tax years; that it filed the application for the 2004 tax year once it became aware that a new application was required; and that Allegheny County merely exonerated the tax liens against the premises for the 2002 and 2003 tax years. (Petition at ¶¶7-10). In addition, Landowner did not allege that it did not realize that the taxing authorities were not treating the property as tax exempt for the 2002 and 2003 tax years until 2012. As the foregoing opinion points out, Landowner conceded that it made repeated requests to the Borough and the School District for exoneration that were denied prior to the School District's execution on the lien in 2012. (Id. at ¶11). In sum, the petition doesn't relate the School District's failure to execute on the tax liens until 2012 to Landowner's failure to appeal the assessments for the 2002 and 2003 tax years. Therefore, unlike the extraordinary circumstances that precluded the filing of a timely appeal in Borough of Riegelsville, there is no basis to grant nunc pro tunc relief due to administrative breakdown in this case.
"The taxable status of property is determined at the time of the assessment, and changes during the course of a year that may bring a property into an exempt classification will only become effective for the following year." Borough of Riegelsville, 979 A.2d at 403. Tax exempt status must be affirmatively requested by a property owner. City of Pittsburgh v. Board of Property Assessment Appeals and Review of the County of Allegheny, 412 A.2d 655, 658 (Pa. Cmwlth. 1980). "When exemptions have not been timely sought through statutory appeals, the courts have no jurisdiction to reach back over a period of years, as here, to resurrect that question." In re Petition of Mausoleum Construction Company, 423 A.2d 809, 812 (Pa. Cmwlth. 1980).
Contrary to Landowner's assertions, the trial court properly found that the extraordinary circumstances in Borough of Riegelsville are not present in this case. As noted above, "a court has no jurisdiction to set back and to resurrect the question of an exemption," "absent a showing that extraordinary circumstances involving fraud or its equivalent, duress or coercion" which caused Landowner's failure to obtain an exemption from tax liability. Borough of Riegelsville, 979 A.2d at 402-03. Landowner's petition utterly failed to allege any action or inaction on the part of the Borough or the School District amounting to "fraud or its equivalent, duress or coercion" that caused its failure to file for an exemption for the 2002 and 2003 tax years or to appeal the taxes imposed during those tax years on the basis that its property was exempt. In fact, in the petition, Landowner conceded that both the Borough and the School District timely issued tax bills on its property for the tax years 2002 and 2003. (Petition at ¶7). Landowner also noted that while the County exonerated the overdue taxes, the Borough and the School District had "refused [Landowner]'s repeated requests that [the] tax liens for 2002 and 2003 be exonerated...." (Id. at ¶¶10, 11). Because Landowner's failure to apply for a tax exemption for the 2002 and 2003 tax years or to appeal the imposition of the taxes imposed for those tax years was not based on the actions or inaction of the Borough or School District, Borough of Riegelsville does not apply and the trial court did not err in denying Landowner's petition to apply for an exemption nunc pro tunc.
See also Academy Plaza Associates, Ltd. v. Board of Revision of Taxes, 503 A.2d 1101, 1102-03 (Pa. Cmwlth. 1986); In re Petition of Mausoleum Construction Company, 423 A.2d at 811-12.
Landowner also argues that the taxing bodies are estopped from contesting its petition to apply for an exemption nunc pro tunc. In support, Landowner cites Appeal of McNelly, 553 A.2d 472 (Pa. Cmwlth. 1989), appeal denied, 581 A.2d 574, 575 (Pa. 1990), which involved a city's efforts to enforce a residency requirement which violated Section 1106 of the Public School Code prohibiting such a residency requirement and after the city failed to enforce it for nine years. This Court explained in McNelly that laches and equitable estoppel may be asserted against a governmental agency. "The doctrine of laches applies when a party's rights are so prejudiced by the delay of another in pursuing a claim that it would be an injustice to permit the assertion of a claim against a party so prejudiced. The doctrine of equitable estoppel arises when a party by acts or representations, intentionally or through culpable negligence, induces another to believe that certain facts exist and that party relies on such belief to his prejudice if the former is permitted to deny the existence of such facts." Id. at 477.
Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §11-1106.
The doctrine of equitable estoppel contains three elements: "1) misleading words, conduct, or silence by the party against whom the estoppel is asserted; 2) unambiguous proof of reasonable reliance upon the misrepresentation by the party asserting the estoppel; and 3) the lack of a duty to inquire on the party asserting the estoppel." Com. ex rel. Corbett v. Griffin, 946 A.2d 668, 678 n. 12 (Pa. 2008). In addition, "the doctrine [of laches] is an equitable doctrine that should not be applied in favor of a person who has failed to take required action on his own." In re Estate of Scharlach, 809 A.2d 376, 383 (Pa. Super. 2002) (citation omitted).
As noted above, the facts of this case as alleged in Landowner's petition do not support the application of either the doctrine of equitable estoppel or laches. Landowner conceded that both the Borough and the School District timely issued tax bills on its property for the tax years 2002 and 2003, and that they refused Landowner's repeated requests that the tax liens for 2002 and 2003 be exonerated. (Petition at ¶¶7, 11). As a result and contrary to its assertions in this appeal, Landowner could not have reasonably believed that its 2004 exemption applied retroactively to tax years 2002 and 2003 or that it was not required to appeal in order to assert its exemption. In addition, Landowner knew well before 2012 that the taxing authorities were not treating its property as tax exempt for the tax years 2002 and 2003; that the taxes were, in fact, due and owing; and that the matter had not been resolved. The admitted denial of Landowner's "repeated requests" for exoneration of the tax liens demonstrates this awareness. The Borough's and School District's delay in collecting the overdue taxes in no way contributed to Landowner's failure to appeal its tax liability as in Borough of Riegelsville, and there are simply no misleading words or actions on the part of the Borough or the School District that prevented Landowner from filing for an exemption in the 2002 and 2003 tax years or from timely appealing the taxes that were imposed. In such circumstances, Landowner may not invoke the equitable doctrines of equitable estoppel and laches to permit the filing of a petition for leave to file an application for an exemption nunc pro tunc.
Accordingly, the trial court's order is affirmed.
/s/_________
DAN PELLEGRINI, President Judge ORDER
AND NOW, this 3rd day of June, 2014, the order of the Court of Common Pleas of Allegheny County is affirmed.
/s/_________
DAN PELLEGRINI, President Judge BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED DISSENTING OPINION BY JUDGE McCULLOUGH
Respectfully, I dissent. Citing In Re: Appeal of Borough of Riegelsville from the Bucks County Board of Assessment and Revision of Taxes, 979 A.2d 399 (Pa. Cmwlth. 2009), Cleft of the Rock Ministries (Landowner) asserted that this case presents unique circumstances that provide a basis for granting nunc pro tunc relief. Noting that there is no dispute that the property was tax-exempt prior to 2002 and from 2004 forward, Landowner further asserted that the collection of taxes by the taxing authorities would result in the receipt of monies that they otherwise would not have received. (Petition, ¶¶ 12-20.) The trial court did not hold a hearing, no evidence was taken, and no findings were made. Without a record, it is not possible to determine whether Landowner is entitled to nunc pro tunc relief in order to file an application for exemption of taxes.
As summarized by the Commonwealth Court, the argument in Riegelsville was based on the following facts:
Before this Court, the Borough argues that the case presents unique factual circumstances that, collectively provide a basis for granting nunc pro tunc relief. These facts and circumstances are: 1) the properties were acquired in December 2006; 2) the properties have deed restrictions on them; 3) the Trustees received notice of the assessments in March 1, 2007 but the Borough did not receive these notices from the Trustees until March 27, 2007; 4) the notices identify the wrong owners and give no notice of the need to apply for an exemption; 5) the Borough's Counsel "was told that all records with the Board in as much as they concerned the Borough's ownership of the [properties] were 'o.k.'" (Borough's Br. at 7.); 6) there is no dispute that the properties are tax-exempt; 7) the Board did not deny as untimely the Borough's request for an exemption; and 8) the taxing bodies are receiving taxes which they would not otherwise receive.
Landowner also argued that the collection of taxes allegedly owing for years 2002 and 2003 would be contrary to the unambiguous language of 53 Pa.C.S. §8812(a)(1); unconstitutional under Article VIII, Section 2(a)(1) of the Pennsylvania Constitution; and contrary to the basic and well established legal principle that property owned in fee by a church and regularly used for religious worship is inherently tax-exempt.
Landowner appeals from the July 25, 2013 order of the Court of Common Pleas of Allegheny County (trial court) denying Landowner's petition for leave to file an application for exemption of taxes nunc pro tunc. In relevant part, Landowner avers that it acquired the property at issue on December 14, 2001, from First Christian Church of Homestead. At the time, the property was exempt from all taxes; the phrase "Transaction Tax Exempt" appeared on the deed; and Landowner believed that the property's tax exempt status would transfer along with title from one church to the other. Neither Allegheny County, the Borough of Munhall (Borough), nor Steel Valley School District (School District) gave any indication to Landowner that the property would not continue to be treated as tax exempt. (Petition, ¶¶ 1-6.)
Landowner did not become aware of the administrative requirement that it file a new Allegheny County Application for Exemption of Real Estate Taxation until it received tax bills for the tax years 2002 and 2003. Once Landowner learned that a new application was required, it filed an application for exemption for tax year 2004. The application was approved and the property was granted tax exempt status beginning with tax year 2004 and following. Allegheny County exonerated the tax lien against the property for tax years 2002 and 2003. The Borough and the School District refused Landowner's repeated requests that tax liens for 2002 and 2003 be exonerated. However, Landowner contends they made no efforts to collect any of the amounts owing for tax years 2002 and 2003 until November 2012. (Petition, ¶¶ 7-11.)
In addition to the above averments, Landowner asserted that it will suffer extreme financial hardship if all amounts allegedly owing for tax years 2002 and 2003 are not exonerated. In its brief on appeal, Landowner states that the taxing bodies are seeking payment of approximately $25,000, and Landowner explains that it is a small church with about 25 members, whose total donations are typically less than $200 per month and constitute the church's sole source of income. Landowner also emphasizes that it provides community outreach programs that are essential to the mentally ill and otherwise disadvantaged individuals in the community. In particular, Landowner cites the Steadfast Outreach Program, which houses approximately 10 to 15 homeless or disadvantaged men who find the program both through word of mouth and by court referrals. Landowner states that, although it receives a nominal amount of consideration for each individual referred to the program by the Allegheny County Mental Health Court, the program is costly and operates at a loss.
The Borough and the School District filed an answer to the petition. The trial court denied Landowner's petition without holding a hearing, concluding that the facts set forth in the petition, even if proved, would not permit the granting of nunc pro tunc relief. The trial court stated that, in making its determination, it did not consider the taxing bodies' answer or new matter, or Landowner's reply thereto.
In this appeal, Landowner argues that it has established the unusual or extraordinary circumstances necessary under Riegelsville to be entitled to nunc pro tunc relief. Generally, an appeal nunc pro tunc may be allowed where the delay in filing the appeal was caused by extraordinary circumstances involving fraud or some breakdown in the administrative process or non-negligent circumstances related to the appealing party, his counselor, or a third party. Cook v. Unemployment Compensation Board of Review, 671 A.2d 1130, 1131 (Pa. 1996). In Riegelsville, the court recognized that, in unique cases, "an appeal nunc pro tunc may be granted . . . in order to prevent injustice," and Landowner contends that a payment of the total owed, as significantly increased by interest and penalties, to taxing bodies that have recognized Landowner's tax-exempt status for the past twelve years, constitutes such an injustice.
The trial court held that the averments in Landowner's petition, if proved, would not establish the criteria outlined in Riegelsville. The material averments in Landowner's petition are: Landowner reasonably believed that the tax-exempt status of the church property would transfer along with title; Landowner reasonably believed that the filing of the Applications for Exemptions in 2004 applied retroactively to tax years 2002 and 2003 because it was treated retroactively by Allegheny County; Landowner did not realize that the taxing authorities were not treating Landowner as tax exempt for the years 2002 and 2003 until 2012, when the School District initiated the tax sale; and the taxing authorities' self-imposed ten-year delay in attempting to collect the tax owed allowed for years of penalty and interest to accrue, while lulling Landowner into believing that the matter had been resolved and causing Landowner an extreme hardship.
Landowner alternatively argues that the taxing bodies are estopped from pursuing collection efforts after failing to do so for so many years. In support of this argument, Landowner cites Appeal of McNelly, 553 A.2d 472 (Pa. 1979), which involved a city's efforts to enforce a residency requirement after failing to do so for nine years. The Supreme Court explained in McNelly that laches and equitable estoppel may be asserted against a governmental agency. "The doctrine of laches applies when a party's rights are so prejudiced by the delay of another in pursuing a claim that it would be an injustice to permit the assertion of a claim against a party so prejudiced. The doctrine of equitable estoppel arises when a party by acts or representations, intentionally or through culpable negligence, induces another to believe that certain facts exist and that party relies on such belief to his prejudice if the former is permitted to deny the existence of such facts." Id. at 477; Reform Congregation Oheb Sholom v. Berks County Board of Assessment Appeals, 839 A.2d 1217 (Pa. Cmwlth. 2004). --------
In affirming the trial court's order, the Majority construes Landowner's allegation that the taxing authorities denied "repeated requests" to exonerate the tax liens as an admission that Landowner "knew well before 2012" that the matter had not been resolved. (Majority op. at 9.) However, the trial court made no such finding. Indeed, because the trial court did not hold a hearing, no evidence was submitted, and no record was made. Consequently, there is no evidence as to when those requests were made. In addition, the trial court made no findings as to whether the taxing bodies took any actions from 2004, when Landowner's property again was recognized as tax exempt, and 2012, when collection efforts were finally undertaken. I submit that, without such findings, addressing for example, whether tax bills were sent during this extended period, it is impossible to determine whether Landowners are entitled to nunc pro tunc relief. Thus, I would hold that a remand to the trial court is warranted. See Independent Fire Company No. 1 v. Borough of South Williamsport Zoning Hearing Board, 510 A.2d 410 (Pa. Cmwlth. 1986) (holding that, where the trial court failed to issue findings essential to determining whether a variance was properly granted, a remand to the trial court was required); Washington v. Unemployment Compensation Board of Review, 503 A.2d 1055 (Pa. Cmwlth. 1986) (holding that, where the Unemployment Compensation Board of Review fails to issue findings necessary to resolve issues that may be legally determinative of a claimant's rights, the Court must remand to the board to make the necessary findings).
Accordingly, I would vacate the trial court's order and remand this matter to the trial court to hold a hearing and issue findings necessary to determine whether Landowner is entitled to file an application for exemption of taxes nunc pro tunc.
/s/_________
PATRICIA A. McCULLOUGH, Judge
Id. at 402. We next considered that:
The law is clear that nunc pro tunc relief may only be granted in limited circumstances. "When a statute fixes the time within which an appeal may be taken, a court may not extend that time period or allow an appeal nunc pro tunc absent a showing that extraordinary circumstances involving fraud or its equivalent, duress, or coercion caused the delay in filing an appeal." "Timeliness of such a request goes to jurisdiction and affects the competency of the appellate court to act. The court has no jurisdiction to set back and to resurrect the question of an exemption." However, "an appeal nunc pro tunc may be granted . . . in order to prevent injustice" in unique cases, "upon a showing that unusual circumstances prevented a party from timely filing."Riegelsville, 979 A.2d at 402-03 (citations omitted). Ultimately, we concluded that the case presented unusual circumstances that caused a delay in the borough's filing a timely appeal. "In particular, we [found] that the statement by the Board Official to the Borough's Counsel created a reasonable presumption that the properties' tax exemption status had been changed." Id. at 403.