Opinion
No. 257 C.D. 2011
12-08-2011
Renee White, Robin Taylor and Laura Lowery, Annette Baldwin and Patricia Morgan on their own behalf and behalf of all others similarly situated, Appellants v. Allegheny County, PA, the City of Pittsburgh, PA, the School District of the City of Pittsburgh and the Woodland Hills School District
PER CURIAM
ORDER
AND NOW, this 9th day of December, 2011, it is ORDERED that the above-captioned memorandum opinion filed December 8, 2011 shall be corrected as follows: page 1, line 2, "Patricia Morgan" shall replace "Patricia Baldwin". BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JOHNNY J. BUTLER, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE BUTLER
Renee White, Robin Taylor, Laura Lowery, Annette Baldwin, and Patricia Morgan, on their own behalf and on behalf of others similarly situated (collectively Taxpayers) appeal the January 14, 2011 order of the Court of Common Pleas of Allegheny County (trial court) sustaining the Preliminary Objections filed by the City of Pittsburgh, the School District of the City of Pittsburgh, and Woodland Hills School District (collectively the Taxing Districts), and dismissing the Taxpayers' amended complaint. There are three issues before the Court: (1) whether Taxpayers have stated a claim for which relief can be granted, (2) whether Section 1 of the Act of 1943 is applicable, and (3) whether retroactive relief is required. For the following reasons, we affirm the trial court's order.
Act of May 21, 1943 P.L. 349, as amended, 72 P.S. § 5566b.
The instant matter is litigation subsequent, but related, to Clifton v. Allegheny County, 600 Pa. 662, 969 A.2d 1197 (2009) (Clifton/Pierce), which was before the en banc Court on the issue of whether the taxpayers in that case were entitled to counsel fees. Both matters were before the same trial court and involve the same taxing history. The relevant facts of Clifton/Pierce are as follows.
In 2001, the Allegheny County Assessment Office performed a countywide reassessment for use in 2002. In 2002, the Allegheny County Assessment Ordinance was amended to provide that the 2002 assessment shall serve as a base year for 2003-2005. On October 18, 2005, the Allegheny County Council enacted Ordinance 45 (Ordinance) which amended the Allegheny County Administrative Code to provide for the continued use of the 2002 assessment as a base year. The Ordinance did not set forth a date by which the Office of Property Assessments would conduct a countywide reassessment to replace the 2002 base year assessments.
James Clifton (Clifton) and Kenneth Pierce (Pierce) are property owners in Allegheny County. They alleged that their property values had declined since 2002. They brought an action challenging the legality of the Ordinance. On March 15, 2006, the trial court filed an order denying the request of Clifton and Pierce to set aside the assessments for 2006 on the grounds that Section 402(a) of the General County Assessment Law, and Section 4(a.2) of the Second Class County Assessment Law, permit the use of a base year system in which the assessed value of a property in subsequent years is based on its value in the base year.
Act of May 22, 1933 P.L. 853, as amended, 72 P.S. § 5020-402(a); subsequently found to be unconstitutional by Clifton/Pierce.
Act of June 21, 1939 P.L. 626, as amended, 72 P.S. § 5452.4(a.2); subsequently found to be unconstitutional by Clifton/Pierce.
Clifton and Pierce amended their complaint alleging that Pennsylvania's base year method of assessing property violated the Uniformity Clause of the Pennsylvania Constitution and the Equal Protection Clause of the 14th Amendment to the U.S. Constitution. On June 6, 2007, the trial court ordered that the provisions of the General and Second Class County Assessment laws permitting the use of base years violate the Uniformity Clause of the Pennsylvania Constitution, and ordered a reassessment by March 31, 2009. Allegheny County (County) appealed to the Pennsylvania Supreme Court which held that statutes permitting indefinite use of a base year method of valuation for property tax purposes did not facially violate the Uniformity Clause of the State Constitution, but the statutes at issue violated the Uniformity Clause as applied in the County. The Supreme Court remanded the matter to the trial court to determine the County's progress in executing a countywide reassessment and to set a realistic timeframe for its completion. Said reassessment is to be ready for use in 2012.
The facts that follow refer specifically to the matter currently before this Court. On February 25, 2010 Taxpayers filed a complaint against the Taxing Districts alleging that the property value of their homes decreased in value from 2002 to 2006 and as a result they suffered economic harm. Taxpayers rely upon the decision in the above case (Clifton/Pierce) to support their contention that they have been unconstitutionally taxed and therefore they are entitled to tax credits. Taxpayers filed an amended complaint on May 24, 2010, and the Taxing Districts filed preliminary objections to that complaint. The trial court sustained the preliminary objections, and dismissed the Taxpayers' complaint. The trial court listed several reasons for its decision: (1) Taxpayers are similarly situated to Clifton and Pierce, (2) class actions do not apply in this type of a case, (3) the ruling in Clifton/Pierce applies prospectively, and (4) Pennsylvania law is not superseded in this case by the equal protection clause. Taxpayers appealed to this Court.
Where a trial court's order sustained preliminary objections and dismissed a complaint, an appellate court's review
is limited to a determination of whether that court abused its discretion or committed an error of law. In reviewing preliminary objections, all well pleaded relevant and material facts are to be considered as true, and preliminary objections shall only be sustained when they are free and clear from doubt. Such review raises a question of law as to which our standard of review is de novo and our scope of review is plenary.
Taxpayers argue that the trial court should exercise its equity jurisdiction because they have stated a claim for which relief can be granted. It is their contention that being similarly situated is not enough for claim preclusion. Taxpayers specifically contend that they were not parties to Clifton/Pierce, or in privity to those parties. In addition, Taxpayers contend that the trial court was not limited to the remand order as this is a separate case. We disagree with the above contentions.
It has long since been established that in taxation cases, for a court to exercise its equity jurisdiction, taxpayers must lack an adequate remedy at law. Lee Hosp. v. Cambria Cnty. Bd. of Assessment Appeals, 638 A.2d 344 (Pa. Cmwlth. 1994). This Court has held that assessment appeals are an adequate statutory remedy. Beattie v. Allegheny Cnty., 847 A.2d 185 (Pa. Cmwlth. 2004). More importantly, Allegheny County's base year tax assessment has already been challenged and the Pennsylvania Supreme Court, after determining that the taxation did violate Pennsylvania's Uniformity Clause, affixed the remedy of reassessment. Clifton/Pierce. That case had been remanded to the trial court for implementation of the reassessment. Taxpayers cannot get a different result by starting a separate action on the same grounds. Accordingly, Taxpayers have not stated a claim for which relief can be granted.
Taxpayers next argue that although they have asked for a refund under Section 1 of the Act of 1943, it was only as an alternative. What Taxpayers are really seeking is a credit. Taxpayers concede that the right to a refund would not provide an adequate remedy for relief.
Section 1(b) of the Act of 1943 provides:
The right to a refund . . . may not be resorted to in any case in which the taxpayer involved had or has available under any other statute, ordinance or resolution, a specific remedy by way of review, appeal, refund or otherwise, for recovery of moneys paid as aforesaid, unless the claim for refund is for the recovery of moneys paid under a provision of a statute, ordinance or resolution subsequently held, by final judgment of a court of competent jurisdiction, to be unconstitutional, or under an interpretation of such provision subsequently held by such court, to be erroneous.72 P.S. § 5566b(b) (emphasis added). Here, both parties agree that this statute does not apply. Taxpayers claim that because it does not apply they cannot get a refund, thus they are entitled to equitable relief, i.e., a credit. The Taxing Districts argue it does not apply because the Taxpayers have not first appealed their assessments; and because it cannot be used by a class, only individually. We agree with the Taxing Districts. As the statute could apply to the individual taxpayers if they appealed their assessments, an adequate remedy at law does exist under the statute. Thus, Taxpayers are not entitled to equitable relief. Accordingly, Taxpayers are not entitled to a credit.
Taxpayers next argue that the trial court erred by applying Pennsylvania law. Specifically, Taxpayers contend that because the Pennsylvania Supreme Court determined that the use of base year assessments violated the Pennsylvania Uniformity Clause, federal law should be applied. Thus, it is Taxpayers contention that Harper v. Virginia Department of Taxation, 509 U.S. 86 (1993), which requires that decisions of unconstitutionality should be applied retroactively, should apply. We disagree.
In Harper, the U.S. Supreme Court held:
When this Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule.509 U.S. at 97. However, in Clifton/Pierce, the Pennsylvania Supreme Court did not apply a rule of federal law. In fact, the Court did not address the issue of whether the taxation violated the U.S. Constitution. It merely found that the base year assessments as applied in Allegheny County violated the Pennsylvania Uniformity Clause.
The Pennsylvania Supreme Court in Oz Gas, Ltd. v. Warren Area School District, 595 Pa. 128, 938 A.2d 274 (2007) held:
To avoid the potentially devastating consequences to taxing entities, it is important that taxes collected pursuant to a valid statute remain valid unless and until otherwise determined by this Court. The incentive to challenge still remains for the challenge, if successful, results in relief from the tax going forward. With respect to tax statutes, then, we reaffirm [American Trucking Associations, Inc. v. McNulty, 528 Pa. 212, 596 A.2d 784 (1991)] in holding that a decision of this Court invalidating a tax statute takes effect as of the date of the decision and is not to be applied retroactively.595 Pa. at 146, 938 A.2d at 285. Here, it was perfectly legal to use base year assessments in taxation, hence, it was a valid statute; it was its application which was violative of the Pennsylvania Uniformity Clause. As such, the Supreme Court, upon said determination, ordered a reassessment. Accordingly, retroactive relief is not appropriate.
For all of the above reasons, the trial court's order is affirmed.
/s/_________
JOHNNY J. BUTLER, Judge Judge McCullough did not participate in the decision in this case.
ORDER
AND NOW, this 8th day of December, 2011, the January 14, 2011 order of the Court of Common Pleas of Allegheny County is affirmed.
/s/_________
JOHNNY J. BUTLER, Judge
Petty v. Hosp. Serv. Ass'n of Ne. Pa., 967 A.2d 439, 443 n.7 (Pa. Cmwlth. 2009) (citations omitted).