ATTORNEYS FOR PETITIONERS: ATTORNEYS FOR RESPONDENT:
KATHRYN D. SCHMIDT JEFFREY A. MODISETT
JOSEPH E. COSTANZA Attorney General of Indiana KEVIN E. STEELE Indianapolis, Indiana
BURKE COSTANZA & CUPPY
Merrillville, Indiana ANGELA L. MANSFIELD
Deputy Attorney General
JOHN S. MATONOVICH et al., ) ) ) Petitioners, ) ) v. ) Cause No. 49T10-9809-TA-00111 ) STATE BOARD OF TAX COMMISSIONERS, ) ) Respondent. ) __________________________________________________________________________________________________________________________________________
ORDER ON MOTION FOR A PRELIMINARY INJUNCTION
NOT FOR PUBLICATION
reassessment of all real property in Lake County.See footnote 1
The Petitioners have moved the
Court to enjoin portions of that order pending the outcome of this original tax appeal.
County assessing officials to submit a statement detailing what assistance they could
make available to the contractor hired by the State Board.
On September 11, 1998, the Petitioners filed this original tax appeal challenging the State Board's reassessment order. Although the Petitioners do not dispute that the State Board has the authority to order a reassessment of all real property within Lake County, the Petitioners contend that portions of the State Board's reassessment order are unlawful. Specifically, the Petitioners contend that the State Board's order will unlawfully infringe upon the Petitioners' duty to conduct the reassessment specified in the reassessment order. The Petitioners also contend that to the extent that the order requires that the data collection for the reassessment will be used for the March 1, 2001 state-wide general reassessment,See footnote 5 5 the order is unlawful because it will infringe upon the Petitioners' duty to conduct the 2001 general reassessment. The Petitioners have moved this Court to enjoin the State Board from hiring a contractor to conduct and oversee the Lake County reassessment pending the outcome of this original tax appeal. On October 7, 1998, this Court held a hearing on the Petitioners' motion, and now the Court issues its decision.
At the outset of its analysis, the Court notes that the Petitioners are not seeking to enjoin the collection of a tax. This puts the Petitioners' motion outside of the ambit of section 33-3-5-11 because that statutory provision on its face only applies to petitions to enjoin the collection of a tax. However, the Court holds that its power to enjoin the actions of parties before the Court is not limited by section 33-3-5-11. In Sproles v. State, 672 N.E.2d 1353, 1359 (Ind. 1996), the Indiana Supreme Court explained that section 33-3-5-11 was enacted in order to allow the Indiana Tax Court to enjoin the collection of taxes, an authority specifically withheld from circuit and superior courts before the creation of the Indiana Tax Court. See id. It therefore follows that the General Assembly did not enact section 33-3-5-11 in order to limit this Court's authority to issue injunctions when necessary to afford the parties before the Court complete and meaningful relief.
Although the authority for the issuance of a preliminary injunction in this instance does not emanate from section 33-3-5-11, but rather the Court's inherent authority, the Court finds the general principles animating that statutory provision helpful in its analysis of this case. Section 33-3-5-11 provides in pertinent part:
[T]he tax court may enjoin the collection of a tax pending the original tax appeal,
if the tax court finds that:
(1) the issues raised by the original tax appeal are substantial;
(2) the petitioner has a reasonable opportunity to prevail in the original tax appeal; and
(3) the equitable considerations favoring enjoining the collection of the tax
outweigh the state's interests in collecting the tax pending the original tax
Obviously, the Court, in its consideration of the instant motion, must modify the
third statutory prerequisite to some extent.
In previous decisions, this Court has drawn
from the general body of case law concerning preliminary injunctions when evaluating
this statutory prerequisite. See Keller, 530 N.E.2d at 791; American Trucking Ass'ns v.
State, 512 N.E.2d 920, 923 (Ind. Tax Ct. 1987). Under that body of case law, a court
must consider whether the Petitioners will suffer irreparable harm if the injunction is not
granted, balance the harm to the Petitioners if the petition is not granted with the harm
to the respondent if the relief is granted, determine whether the public interest will be
adversely affected, and determine whether the Petitioners can post sufficient security to
cover costs and damages that the respondent may suffer if the respondent is wrongfully
enjoined. See American Trucking Ass'ns, 512 N.E.2d at 923.
However, because this case involves a dispute between public servants acting in their official capacities,See footnote 6 6 the Court finds that the public interest is the only relevant equitable consideration. Any interest that the parties have in these proceedings is for the benefit of the public they represent. Accordingly, the Court will evaluate any arguments made by the parties in that light.
be done and raises significant issues concerning the authority of the State Board and
the autonomy of local elected officials. This is no trivial matter; this case will affect all
real property owners in Lake County. The State Board appears to concede as much.
At the hearing on the Petitioners' motion, the State Board did not argue that the issues
raised by this original tax appeal were not substantial. For these reasons, the Court
finds that the first prerequisite for the issuance of a preliminary injunction has been
likelihood of making that demonstration because the Petitioners cannot succeed on the
merits without meeting the standard under which this Court may reverse final
determinations of the State Board.
The Petitioners contend that the State Board does not have the statutory authority to hire a contractor to conduct the Lake County reassessment because the State Board itself does not have the authority to conduct the assessment. In the Petitioners' view, this makes those portions of the State Board's order providing for the hiring of a contractor to conduct that reassessment invalid. In response, the State Board argues that because it has been given wide latitude in determining when to order a reassessment, it has the discretion to choose the means by which a reassessment is to be accomplished. According to the State Board, this includes the authority to conduct the reassessment itself or select and employ persons to conduct the reassessment on its behalf.
Under section 6-1.1-4-9, the State Board has the unquestioned authority to order a county-wide reassessment. The State Board also has the authority to supervise such a reassessment.See footnote 8 8 See Ind. Code § 6-1.1-35-1(3) (1998) (State Board has duty to see that all property assessments are made in manner provided by law.); see also Bielski v. Zorn, 627 N.E.2d 880, 886 (Ind. Tax Ct. 1994); cf. id. § 6-1.1-4-31(a) (State Board required to check conduct of general reassessment). The question presented by this case is whether the authority to order a reassessment and the
authority to supervise that reassessment necessarily imply the authority to conduct that
From the Court's examination of the specific statutory provisions relied
on by the parties, as well as the general tenor of the laws governing the assessment of
real property, the Court concludes that the answer to this question is probably negative.
The plain language of section 6-1.1-4-9See footnote 9
speaks in terms of the State Board
ordering a reassessment, not conducting a reassessment. This strongly implies that
the State Board is not the body charged with actually conducting that reassessment. In
general, someone does not order himself to do something. Rather, an order is given to
others to do something. In addition, the fact that section 6-1.1-4-9 requires the State
Board to specify in its order the time in which the reassessment must be completed
strongly suggests that the reassessment is conducted by someone other than the State
Other statutory provisions inform the Court's analysis as well. Under Ind. Code § 36-6-5-3 (1998), township assessors are charged with duty of conducting assessments. This strongly suggests that township assessors are to conduct reassessments ordered by the State Board pursuant to section 6-1.1-4-9. Moreover, under Ind. Code § 6-1.1-4-29(b) (1998), the State Board is required to estimate the cost of conducting a reassessment. Under subsection 6-1.1-4-29(b), the local assessing officials, the county assessor, the county property tax board of appeals, and the county auditor may not spend more than the amount estimated by the State Board. Once
again, this strongly implies that the local officials are the ones engaged in the
The State Board invites this Court's attention to Ind. Code § 6-1.1-35-13 (1998). The Court finds the State Board's invocation of that statutory provision to support its position unpersuasive. Under section 6-1.1-35-13, the State Board is empowered to prepare a report, plat, or other property tax record if a local official does not make a report required by the laws governing assessments or fails to deliver a plat or property tax record to an appropriate official or board. It is difficult to construe the plain language of this statutory provision as allowing the State Board to conduct a reassessment. A reassessment is not a report, plat, or property tax record. See Peele v. Gillespie, 658 N.E.2d 954, 958 (Ind. Ct. App. 1995) (In construing statute, it is just as important to recognize what statute does not say as it is to recognize what it does say.), trans. denied. In addition, the statutory provision predicates the State Board's ability to act on the failure of an assessing official to act. There is no allegation of a failure to act on the part of Lake County assessing officials in this case.
Moreover, construing this statutory provision to allow the State Board to conduct a reassessment would have palpably absurd results. Under subsection 6-1.1-35-13(b), a local official who fails to prepare a report or to deliver a plat or other property tax record can be personally liable for the amount it cost to prepare the report, plat, or property tax record. If the State Board is authorized to conduct a reassessment under this statutory provision (i.e., because the terms report, plat, or other property tax record include a reassessment), theoretically, at least, an official could be held personally
liable for the entire cost of the reassessment. If the General Assembly intended this
result, it would have said so in much clearer terms.
In addition to these specific statutory provisions, the general tenor of Indiana's property tax assessment system also militates against the State Board's position in this case. In general, assessments are done locally, and the State Board, in general, does not determine the assessed value of property, except in property tax appeals. Therefore, an exception to this general rule is likely to be explicit.See footnote 10 10 The State Board has not identified any statutory provision explicitly allowing it to conduct a reassessment. Accordingly, it is likely that the general rule that assessments are done locally will apply to the Lake County reassessment.
Based on this preliminary analysis of the relevant law, the Court concludes that the Petitioners have demonstrated a reasonable likelihood of success on the merits of their contention that the State Board is without the statutory authority to conduct the Lake County reassessment and therefore cannot delegate this task to a contractor. Accordingly, the Court holds that the second prerequisite for the issuance of a preliminary injunction has been met.
In reaching this conclusion, the Court is not unaware of the State Board's finding
that [t]he weight of the testimony and evidence reflects a widespread recognition that
an assessment problem exists in Lake County. (State Bd. Reassessment Ord. ¶ 14).
In response to this problem, the State Board has ordered a reassessment of Lake
County real property.See footnote 11
Any reading of the reassessment order makes it quite clear that
the State Board believes that it must play a large role in the conduct of this
reassessment because otherwise the reassessment will not be done in accordance with
the law. The Court recognizes the State Board's concern.
However, the fact that a problem exists (even one of constitutional magnitude) does not allow an agency to act in a manner inconsistent with the law. If the State Board is without the power to conduct the Lake County reassessment, as appears likely from the Court's preliminary examination of the relevant law, nothing that happens in Lake County can confer that power. The powers of the State Board are granted by the General Assembly, not the exigencies of any particular situation.
The Court, in good conscience, cannot countenance this possibility.
On the other hand, the Court is aware that the public interest is served by the reassessment ordered by the State Board. Naturally, any delay in the reassessment caused by these proceedings is prejudicial to the public interest. However, the Court is confident in its ability to issue a decision on the merits in this case in a timely manner because the issues are primarily legal. Consequently, any delay caused by these proceedings will be slight, and, when balanced against the possibility of a significant waste of tax dollars, the slight delay is of lesser importance. Accordingly, the Court finds that granting a preliminary injunction is in the public interest.
Thomas G. Fisher, Judge
Indiana Tax Court
Kathryn D. Schmidt
Joseph E. Constanza
Kevin E. Steele
Burke Costanza & Cuppy
8585 Broadway, Suite 600
Merrillville, IN 46410
Jeffrey A. Modisett
Attorney General of Indiana
By: Angela L. Mansfield
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
Converted by Andrew Scriven