Puritan Funding Co., L.P. v. State Bd of Tax Comm.

IN THE INDIANA TAX COURT _____________________________________________________________________

PURITAN HOME FUNDING CO., L.P., ) ) Petitioner, ) ) v. ) Cause No. 49T10-0011-TA-122 ) STATE BOARD OF TAX COMMISSIONERS, ) ) ) Respondent. ) _____________________________________________________________________
 
Order on Motions for Joinder or Dismissal

 
NOT FOR PUBLICATION
 
July 13, 2001
 
 
FISHER, J.
    Puritan Home Funding Co., L.P. (Puritan) appeals the October 13, 2000, final determinations by the State Board of Tax Commissioners (State Board) that assessed its parcels of property as of the March 1, 1995 and March 1, 1996 assessment dates. The issue before the Court today is whether the Court should grant the State Board's motion for joinder of local taxing officials as parties in interest or alternative motion for joinder of local officials and dismissal of the State Board.
For the reasons stated below, the Court DENIES the State Board's motions for dismissal and joinder.
 
FACTS AND PROCEDURAL HISTORY
 
    Puritan owns parcels of property located in Center Township in Marion County, Indiana. For the tax years March, 1, 1995 and 1996, the Center Township Assessor (Township Assessor) assessed the properties in question. Puritan appealed the assessments to the Marion County Board of Review (BOR). See footnote Thereafter, Puritan sought review of the BOR's assessment by the State Board via 131 petitions for review of assessment (131 Petition). On October 10, 2000, the State Board issued final determinations on Puritan's 131 Petitions.
    On November 22, 2000, Puritan filed an original tax appeal with this Court. On March 27, 2001, the State Board filed a motion for joinder of local taxing officials as parties in interest or alternative motion for joinder of local officials and dismissal of the State Board. Thereafter, the Marion County Assessor and the Center Township Assessor (local officials) filed responses to the State Board's motion and motions for amicus curiae status. On April 23, 2001, this Court held a hearing on the State Board's motion and the local officials' motion. At the hearing, the Court granted the local officials' motion for amicus curiae status. (Hearing Tr. at 3.) Additional facts will be provided as necessary.
ANALYSIS, OPINION, AND ORDER
I. Motion for Dismissal
The State Board argues that it should be dismissed from this case because it is a quasi-judicial decision making body with no legal interest in the outcome of this proceeding. The State Board claims that it is more like a "lower tribunal." (Memorandum in Support of State Board's Motion for Joinder or Dismissal at 3.) More specifically, the State Board asserts that making it a party in this case is "analogous to a trial court being named as a proper party in an appeal filed with the Court of Appeals." Id. The State Board contends that there are no statutes or cases that require that it be a party to a case under judicial review.
Historically, the State Board has been a party in tax cases. First, the State Board's position as a defendant in tax cases is not a recent development. Naming the State Board as a party is established precedent. The Court's research reveals that as early as 1898 the State Board was a party in tax cases. See State Bd. of Tax Comm'rs v. Holliday, 49 N.E. 14, 20 (Ind. 1898)(holding that State Board did not have the legal authority to provide regulations for or order the assessment of life insurance policies as personal property).
Second, despite the State Board's quasi-judicial role, the Indiana Tax Court Rules make it a party in all cases where it has issued a final determination. Indiana Tax Court Rule 4 provides: "[n]otwithstanding anything to the contrary herein, the Tax Court acquires jurisdiction over the . . . State Board of Tax Commissioners in an original tax appeal upon the filing of a petition with the clerk of the Tax Court seeking to set aside a final determination [of the State Board]." Ind. Tax Court Rule 4(A). The rule also states that the Clerk will transmit copies to the State Board as a defendant and that it is not necessary to serve summons on the State Board. Tax Ct. R. 4(A)&(B). In Indiana Model Co., Inc. v. State Bd of Tax Comm'rs, this Court stated that "Tax Ct. R. 4 explains how the Tax Court acquires personal jurisdiction over the State Board." Indiana Model Co., Inc. v. State Bd of Tax Comm'rs, 639 N.E.2d 695, 698 (Ind. Tax Ct. 1994) (original emphasis). The Indiana Tax Court Rules clearly make the State Board a party to an appeal.
While the State Board's argument that it is a quasi-judicial body has merit, dismissing the State Board as a party in these cases where it has historically been a party is for the legislature by statute or for our Supreme Court by rule change to do, not this Court. See footnote
For the above stated reasons, the Court DENIES the State Board's motion to dismiss it as a party to this original tax appeal.
II. Motion for Joinder
The State Board argues that the local officials should be joined as necessary parties in interest in this case because these entities have a direct interest in the proceedings as a result of their financial stake in the outcome of the proceedings. See footnote More specifically, the State Board argues that the local officials make property tax assessments, and local units of government use that tax money to "fund schools, police and fire departments." (Memorandum in Support of State Board's Motion for Joinder or Dismissal at 1.) The local officials argue that they should not be joined in this case.
The State Board asserts that the local officials should be joined pursuant to Indiana Trial Rules 12(B)(7) and 19. Trial Rule 12(B)(7) provides a defense to a claim for "[f]ailure to join a party needed for just adjudication under Rule 19." Ind. Trial Rule 12(B)(7). Trial Rule 19 is titled "Joinder of person needed for just adjudication" and provides that a person shall be joined as a party if:
(1) in his absence complete relief cannot be accorded among those already parties; or

(2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may:

(a) as a practical matter impair or impede his ability to protect that interest, or

(b) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.
 
Ind. Trial Rule 19(A)(1)&(2). "The rule governing joinder of parties does not set forth a rigid or mechanical formula for making the determination, but rather is designed to encourage courts to apprise themselves of the practical considerations of each individual case in view of the policies underlying the rule." Rollins Burdick Hunter of Utah, Inc. v. Board of Trustees of Ball State University, 665 N.E.2d 914, 920 (Ind. Ct. App. 1996). The party asserting joinder has the burden of proving that joinder is necessary. Id.
Here, the State Board simply argues that the local officials should be joined because they "made the property tax assessment and bear the risk of loosing [sic] money as a result of the proceedings." (Memorandum in Support of State Board's Motion for Joinder or Dismissal at 5.) However, the State Board has not shown that "complete relief cannot be afforded" between the State Board and taxpayer in the absence of the local officials. See footnote See T.R. 19(A)(1). In fact the contrary is true as the State Board makes a final determination of the true tax value of property in an appeal. As such, the State Board has not met its burden of proof that joinder is necessary. See footnote See Rollins Burdick Hunter of Utah, Inc., 665 N.E.2d at 920.
The Court DENIES the State Board's motion to joinder of the local officials in this action.
CONCLUSION
    For the foregoing reasons, the State Board's motion for joinder of local taxing officials as parties in interest and motion for joinder of local officials and dismissal of the State Board are DENIED.

 
________________________________
                            Thomas G. Fisher, Judge
                            Indiana Tax Court

 
Distribution:

Joseph Calderon
DANN, PECAR, NEWMAN & KLEIMAN
One American Square Suite 2300
Indianapolis, IN 46282

Mark C. Webb
William M. Waltz
State Board of Tax Commissioners
100 N. Senate Avenue
Room N1058
Indianapolis, IN 46204

Robert Borgman
Andrew P. Sweiwert
Office of Corporation Counsel
200 East Washington Street, Suite 1601
Indianapolis, IN 46204
 

Footnote: The BOR no longer exists. The Marion County Property Tax Assessment Board of Appeals (PTABOA) now reviews appeals by taxpayers from assessments by the township assessing official. See Pub. Law No. 6-1997, § 71, Eff. Jan. 1, 1999 (codified at Ind. Code § 6-1.1-15-1 (West 2000)) (substituting "county property tax assessment board of appeals" for "county board of review").

Footnote: The Court notes that effective January 1, 2002, the State Board will be abolished and no longer a party to original tax appeals in this Court. Act of May 11, 2001, Pub. L. No. 198-2001 §§ 95, 119 (H.E.A. 1499). However, appeals to the Tax Court from final determinations of the State Board of Tax Commissioners that were "issued before January 1, 2002, [will be] subject to the law in effect before the amendments under this act." Id. at § 117.

Footnote: At trial, the State Board conceded that the Marion County PTABOA should not be joined as the State Board stated that the PTABOA "has no direct interest, but the county and township assessors do." (Hearing Tr. at 9.)

Footnote: In addition, the local officials are not claiming that they have an interest in being joined as a party in this action. See T.R. 19(A)(2). However, in most cases, if the local officials wish to be joined as amicus curiae the Court will be willing to grant such status.
 
Footnote: Effective January 1, 2002, the legislature has amended the Indiana Code to provide for naming local officials as parties in tax cases before this Court. Act of May 11, 2001, Pub. L. No. 198-2001 §§ 45, 95, 100 (H.E.A. 1499). In addition, this legislation requires that the Attorney General represent local officials in cases where the local official "made an original determination that is the subject of a judicial proceeding in" this Court and "is a defendant in a judicial proceeding" in this Court. Id. at § 100.