Work v. Dept. of Rev. , 22 Or. Tax 396 ( 2017 )

396 July 20, 2017 No. 40
IN THE OREGON TAX COURT
REGULAR DIVISION
James WORK,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 5286)
Plaintiff (taxpayer) filed a complaint appealing a Magistrate Division deci-
sion as to property tax. Taxpayer challenged the real market value (RMV)
and maximum assessed value (MAV) for each tax year from 2002-03 through
2012-13. He then amended his complaint to include tax years 2013-14 through
2015-16. While in the Magistrate Division, taxpayer and the county assessor
entered into a stipulation to resolve the case and presented it to the magistrate.
The stipulation reduced various roll values of taxpayer’s property for tax years
2010-11 through 2015-16, and dismissed other tax years. Taxpayer later appealed
to the Regular Division, apparently because the Magistrate Division decision
only addressed tax years 2014-15 and 2015-16. The department moved to dismiss,
arguing that the Tax Court was not required to honor in the Regular Division a
stipulation made in the Magistrate Division. The department further argued that
the Tax Court could not adjust the RMV or the MAV in any year because either the
period was not open to adjustment, or the fact that an error went unchallenged in
a prior year meant the current year MAV could not be challenged. Granting the
department’s motion to dismiss, the court ruled that as the department was not a
party to the Magistrate Division stipulation, and the stipulation was not renewed
before the Regular Division, it could not be enforced. Further, taxpayer’s Regular
Division complaint had failed to state ultimate facts sufficient to constitute a
claim as to any values for any of the tax years. However, as to the department’s
request that the assessment values, which were changed by the decision of the
magistrate, remain at their current roll values, the court ruled that any party
aggrieved by a magistrate’s decision and seeking affirmative relief must first file
a complaint in the Regular Division, otherwise, the magistrate’s decision becomes
final and a judgment is entered giving effect to that decision.
Oral argument on Defendant’s Motion to Dismiss was
held March 7, 2017, in the courtroom of the Oregon Tax
Court, Salem.
James Work, Plaintiff (taxpayer), filed a response and
argued the cause pro se.
Daniel Paul, Assistant Attorney General, Department of
Justice, Salem, filed the motion and argued the cause for
Defendant Department of Revenue (the department).
Decision rendered for Defendant on July 20, 2017.
Cite as 22 OTR 396 (2017) 397
HENRY C. BREITHAUPT, Judge.
I. INTRODUCTION
This case is before the court following oral argu-
ment on the motion of Defendant Department of Revenue
(the department) to dismiss the complaint filed by Plaintiff
(taxpayer) under Tax Court Rule (TCR) 21 A(8) for failure
to “state a claim for relief over which the court has juris-
diction.” The motion was filed prior to any answer and
the department has not filed a complaint in this division
requesting any affirmative relief.
The resolution of this case requires the consider-
ation of matters discussed by this court in Village at Main
Street Phase II, LLC II v. Dept. of Rev., (Village at Main Street)
22 OTR 52 (2015), vacated on other grounds, 360 Or 738,
387 P3d 374 (2016). Those matters, which were addressed
by this court but not by the Supreme Court,1 concern the
necessity of a party seeking affirmative relief in this court
to file its own complaint. In this case, the question is not
whether “counterclaims” must be included in a complaint,
but whether affirmative relief may be obtained in this court
on the basis of dismissal. However, the analysis touches on
many of the same statutes.
With respect to the department’s motion in this case,
it appears that the department has conflated two bases for
dismissal. TCR 21 A(8) provides for dismissal where a plain-
tiff has failed to “state ultimate facts sufficient to constitute
a claim.” It is TCR 21 A(1) that provides for dismissal where
there is a “lack of jurisdiction over the subject matter.” The
court will address both bases.
II. FACTS AND PROCEDURAL HISTORY
In considering a motion to dismiss for failure to state
ultimate facts sufficient to constitute a claim, the court’s
review is limited to “the facts alleged in the complaint,
1
The Supreme Court expressly avoided addressing these matters when it
vacated this court’s decision. See 360 Or at 745 n 4. Accordingly, the issue of
whether a party seeking affirmative relief must file a complaint in the Regular
Division within 60 days under ORS 305.501(5)(a) is still open.
398 Work v. Dept. of Rev.
accepting those facts as true.” Douglas County v. Smith, 18
OTR 450, 453 (2006). In considering a motion to dismiss for
lack of jurisdiction over the subject matter, the court may
consider “ ‘matters outside the pleading, including affida-
vits, declarations and other evidence.’ ” Id. (quoting TCR 21
A). No relevant evidence outside of taxpayer’s complaint has
been introduced in this case.2
This case stems from an alleged property classifica-
tion error made in 1996 by the county assessor in which the
property was listed on the roll as a “6” instead of a “5,” which
affected the real market value (RMV) of the subject prop-
erty in that year and the ensuing tax years until it was cor-
rected, apparently for tax year 2013-14. Taxpayer pleaded
that this error affected the tax liability of his property in
that tax year and each ensuing tax year.3
Taxpayer purchased the property in 2001. There is
no allegation that taxpayer or the prior owner had, until the
events of this case, appealed any property tax assessment
for any year to the Board of Property Tax Appeals (BOPTA)
or sought supervisory relief from the department.
In his initial complaint filed with the Magistrate
Division on May 2, 2016, taxpayer challenged the RMV and
maximum assessed value (MAV) for each tax year from
2002-03 through 2012-13. He then amended his complaint
to include tax years 2013-14 through 2015-16.
While in the Magistrate Division, taxpayer and the
county assessor entered into a stipulation to resolve the case
2
The department attached to its motion to dismiss a copy of the Magistrate
Division docket in this case. Even if such a document were to be considered
additional evidence outside the complaint, such evidence is not essential to this
court’s decision. Separately, this court has reviewed the decision of the magis-
trate, which decision was not included with taxpayer’s complaint. However, that
decision is a matter of court record and in any event was required to be filed with
taxpayer’s complaint. TCR 1 B(1) (stating, in part, “A copy of the magistrate’s
written decision is to be included with the complaint[.]”).
3
Unlike in Kaufman v. Dept. of Rev., 20 OTR 159 (2010), taxpayer has not
specified an error in a year that manifestly would have affected the maximum
assessed value (MAV) in that particular year. Regardless, taxpayer has alleged
that the MAV for the years at issue in this case are in error. Exactly when the
MAV was affected by the property classification error is not relevant to this
decision.
Cite as 22 OTR 396 (2017) 399
and presented it to the magistrate. The stipulation reduced
various roll values of taxpayer’s property for tax years
2010-11 through 2015-16.4 The stipulation called for the fol-
lowing adjustments:
TAX YEAR RMV MAV AV
2010-11 Reduced to Reduced to Reduced to
$434,520 $453,340 $434,520
2011-12 Reduced to Reduced to Reduced to
$422,060 $453,340 $422,060
2012-13 Reduced to Reduced to Reduced to
$397,520 $453,340 $397,520
2013-14 No Adjustment Reduced to No Adjustment
$421,360 $453,340 (based on RMV)
2014-15 No Adjustment Reduced to Reduced to
$464,300 $453,340 $453,340
2015-16 No Adjustment Reduced to Reduced to
$502,860 $466,940 $466,940
Upon review of the stipulation, the magistrate
determined that the court lacked jurisdiction to adjust
either the RMV, MAV, or assessed value (AV) for tax years
2010-11 through 2012-13. It accordingly dismissed those
claims.5 The magistrate further determined that as to tax
year 2013-14, taxpayer would not be aggrieved as to any
adjustment to MAV, because the MAV would still be higher
than the RMV. Accordingly, the AV, the value on which
property taxes are actually calculated, which is based on
the lower of either the RMV or the MAV, would not change.
The magistrate did, however, find good and sufficient cause
under ORS 305.288(3) to address tax years 2014-15 and
4
The department did not participate in the proceedings in the Magistrate
Division, although it had a statutory right to intervene at any time. ORS
305.560(4)(a).
5
The court also dismissed taxpayer’s claims in the Magistrate Division as
to tax years 2002-03 through 2009-10. However, taxpayer has not appealed those
years to this court.
400 Work v. Dept. of Rev.
2015-16.6, 7, 8 The magistrate’s decision gave effect to the stip-
ulation for those years.
Dissatisfied with the magistrate’s decision because
it only addressed tax years 2014-15 and 2015-16, taxpayer
filed a complaint in the Regular Division. Taxpayer’s com-
plaint could be read as requesting that the stipulation itself,
although entered into in the Magistrate Division, be enforced
in its entirety in the Regular Division. It could also be read
as requesting that the assessment values for tax years
2010-11 through 2015-16 be adjusted to reflect values identi-
cal to those appearing in the stipulation. These allegations
will be addressed in the analysis section of this order.
The department moved to dismiss taxpayer’s com-
plaint under both readings. First, the department argued
that this court is not required to honor in the Regular
Division a stipulation made in the Magistrate Division.
Second, the department argued that this court cannot
adjust the RMV or the MAV in any year because either
(1) the period is not open to adjustment; or (2) the fact that
an error went unchallenged in a prior year means the cur-
rent year MAV cannot be challenged on that basis.
The court heard oral argument on the department’s
motion on March 7, 2017. During oral argument, taxpayer
clarified that he sought changes to the assessment values for
the respective tax years reflective of the agreement entered
into between the assessor and himself. However, taxpayer
also stated that he “[doesn’t] believe [he] would want [the
RMV] changed in 2013, 2014, or 2015 because that’s the way
it is reflected in the stipulation.” (Statement of James Work,
Oral Argument, Mar 7, 2017, at 13:32.) As illustrated in the
previous table, the stipulation did not address or change
the RMV as to tax years 2013-14 through 2015-16, but it
6
Apparently, taxpayer had previously informed the county of the classifica-
tion error, and received incorrect information regarding his ability to correct the
error. The county asked the magistrate to consider this conduct when reviewing
the stipulation.
7
There was no change to RMV requested.
8
Unless otherwise stated, references to the Oregon Revised Statutes (ORS)
are to the 2015 edition. The relevant statutes have not materially changed from
prior years.
Cite as 22 OTR 396 (2017) 401
did address changes to the MAV for those years. Taxpayer’s
only basis for the change to the MAV in those years was the
1996 classification error.
During oral argument, a question arose as to the
effect that a dismissal would have on the values on the
roll—specifically, whether, if taxpayer’s case was dismissed,
the roll values would be changed in accordance with the
magistrate’s decision, or not. The court requested additional
briefing on the effect of dismissal of taxpayer’s complaint.
On this question, the department asserted that the
values on the roll should remain what they were prior to
the taxpayer filing his complaint in the Magistrate Division.
The department argued that neither division of the court has
jurisdiction to change the MAV in a current year based on
an unchallenged error from 1996. Accordingly, and because
the court only issues one judgment, the department con-
tends that dismissal in the Regular Division of taxpayer’s
complaint would have the effect of voiding the magistrate’s
decision, thereafter leaving the roll values as they were prior
to the appeal by taxpayer to the Magistrate Division. In dis-
missing the entire appeal, the department claimed that the
original actions of the county assessor—the original roll
values—would be given effect.9 The department, however,
did not file a complaint in the Regular Division to appeal the
magistrate’s decision—only taxpayer did so.
III. ISSUES
There are three issues in this case. The first issue
is whether either division of this court has or had subject
matter jurisdiction over taxpayer’s claims. The second issue
is whether taxpayer stated ultimate facts sufficient to con-
stitute a claim for relief in this division. The third and final
issue is whether the dismissal of taxpayer’s complaint in the
Regular Division would leave the decision of the magistrate
in effect or void that decision, leaving the roll values as orig-
inally set by the county assessor.
9
Taxpayer filed a response, but failed to materially address the issue iden-
tified by the court. Taxpayer did, however, question the department’s assertion of
lack of subject matter jurisdiction.
402 Work v. Dept. of Rev.
IV. ANALYSIS
As already discussed, the department appears
to have conflated two separate bases for dismissal of tax-
payer’s complaint. One basis is lack of subject matter juris-
diction.10 See TCR 21 A(1). The other basis is failure to state
a claim. See TCR 21 A(8). This court will address each one in
turn before determining the effect of any dismissal.
A. Dismissal for Lack of Subject Matter Jurisdiction
The Tax Court, except as otherwise specifically
provided by statute, is the “sole, exclusive and final judicial
authority for the hearing and determination of all questions
of law and fact arising under the tax laws of this state.” ORS
305.410. A claim arises under the tax laws of this state if it
“has some bearing on tax liability.” Sanok v. Grimes, 294 Or
684, 701, 662 P2d 693 (1983); see also Perkins v. Dept. of Rev.,
22 OTR 370 (2017); Christensen v. Dept. of Rev., 22 OTR 384(2017).
Taxpayer’s claims in both divisions requested the
reduction of both the RMV and the MAV of the subject prop-
erty, resulting in a reduction to the AV and the associated
tax burden.11 Such claims arise under the tax laws of this
state. ORS 305.410. The department has introduced no
authority that states this court—either division—does not
have subject matter jurisdiction over claims regarding the
determination of the AV of a property for property tax pur-
poses. Nor is this court aware of any relevant to this case.12
10
There is no question of personal jurisdiction in this case.
11
There is a question as to whether taxpayer has standing to challenge the
MAV as to tax year 2013-14 because taxpayer has not alleged a change to the AV
for that tax year. Accordingly, taxpayer has not requested a change resulting in
the reduction of the amount of tax due. However, given the scope of the claims of
taxpayer as to other years, taxpayer might have standing to change the MAV in
tax year 2013-14 if there was a corresponding change in any or all of tax years
2010-11 through 2012-13, or in relation to the lookback period, explained later, of
ORS 305.288. That said, even if taxpayer does not have standing to challenge the
MAV as to tax year 2013-14, such lack of standing would not change the result in
this decision. This is so because there was no change ordered by the magistrate
as to tax year 2013-14, and so there is no question as to what value the MAV for
tax year 2013-14 will appear on the assessment roll.
12
But, of course, the existence of subject matter jurisdiction does not mean
that the basis for relief exists.
Cite as 22 OTR 396 (2017) 403
The department relies upon various statutes, such
as ORS 305.288, to argue that taxpayer cannot achieve
the relief he seeks, and from that concludes that this court
has no jurisdiction. Those statutes, however, concern only
whether certain relief is available. Those statutes may dic-
tate the relief available in a given situation, but it does not
limit or define the scope of this court’s jurisdiction provided
for in ORS 305.410. Stated, differently, courts can and do err
in the interpretation and application of law—that does not
mean courts act without jurisdiction in all such cases.
Both divisions of this court have subject matter
jurisdiction over taxpayer’s claims in his complaint. To the
extent that the department moved to dismiss taxpayer’s
claims in his complaint for lack of subject matter jurisdic-
tion, the motion is denied.
B. Dismissal for Failure to State a Claim
The department also moved to dismiss taxpayer’s
complaint for failure to state ultimate facts sufficient to
constitute a claim for relief. As previously discussed, tax-
payer’s complaint can be interpreted one of two ways, either
(a) requesting enforcement of the stipulation in the Magis-
trate Division or (b) requesting assessment values identical
to the stipulation in the Magistrate Division. The department
moved against taxpayer’s complaint on both interpretations.
As to enforcement of the stipulation entered into
in the Magistrate Division, the department’s motion is well
taken. The department was not a party to the stipulation,
and the stipulation was not renewed before this court. See
Dept. of Rev. v. Guardian Management Corp., 16 OTR 17,
20 (2002) (stating “no party can be compelled to accept any
record created in the Magistrate Division”). To the extent
that taxpayer requests enforcement of the Magistrate
Division stipulation in this court, that claim is dismissed.13
As to requesting assessment values identical to the
stipulation in the Magistrate Division, the claims made by
13
The court cautions that the proceedings in the Magistrate Division are not
always irrelevant. This court has issued many statements on the scope and limits
of de novo review in this court. See Spears v. Dept. of Rev., 20 OTR 229 (2010);
Freitag v. Dept. of Rev., 19 OTR 144 (2006); Norpac Foods, Inc. v. Dept. of Rev., 15
OTR 331 (2001).
404 Work v. Dept. of Rev.
taxpayer relate to the RMV of the property for tax years
2010-11 through 2012-13 and the MAV for tax years 2010-11
through 2015-16. Generally, the county assessor makes the
initial determination of RMV. Richardson v. Dept. of Rev., 22
OTR 207, 208 (2016). The MAV is, absent any constitutional
exception, determined pursuant to a statutorily provided
calculation. ORS 308.146(1); see Comcast Corp. III v. Dept.
of Rev., 22 OTR 233, 235 (2016). A change or correction of
either RMV or MAV may be obtained in this court.
However, for the reasons discussed below, taxpayer
in his complaint in this division has failed to state ultimate
facts sufficient to constitute a claim as to either value for any
of these years. No such motion was made before the magis-
trate regarding taxpayer’s complaint in that division.14
1. Tax Year 2010-11
For tax year 2010-11, taxpayer seeks adjustment of
both the RMV and MAV of the property. There are at least
four routes to obtain relief of RMV or MAV determinations
in this court.15 None of these routes is of assistance to tax-
payer for this tax year. The court will discuss these in some
detail here as the analysis is relevant to other tax years.
First, a taxpayer may appeal a county assessment
to the BOPTA. Property tax assessments are mailed on or
before October 25 of each year. ORS 311.250. Taxpayers
may—no later than December 31 of the same year—petition
for review of an assessment to the BOPTA. ORS 309.100.
An unsatisfactory BOPTA decision may then be appealed to
the Magistrate Division of this court. ORS 305.275(1)(a)(3).
Taxpayer has not alleged that he petitioned for review before
the BOPTA for tax year 2010-11. Nor, considering the fact
that taxpayer filed his complaint in the Magistrate Division
on May 2, 2016, does it appear that he could have. This route
to relief is foreclosed as to tax year 2010-11.
14
Nor was there a motion to dismiss on the basis of subject matter juris-
diction. However, the magistrate dismissed several years on that basis. To the
extent that the magistrate determined there was a lack of subject matter juris-
diction he was, as has been discussed, incorrect.
15
Taxpayer has not identified any additional routes to relief relevant to this
case.
Cite as 22 OTR 396 (2017) 405
Second, a taxpayer may request the department
to exercise its supervisory authority over assessors, which
includes correcting valuation errors. ORS 306.115(1). The
department may order a change “for the current tax year
and for either of the two tax years immediately preceding
the current tax year.” ORS 306.115(3). The current tax year
is “the tax year in which the need for the change or cor-
rection is brought to the attention of the department.” ORS
306.115(5) (emphasis added). Such an order is discretionary,
but may be reviewed by this court. ORS 306.115(3); ORS
305.275. Taxpayer, however, did not seek supervisory relief
from the department for tax year 2010-11.16 This route to
relief is foreclosed as to tax year 2010-11.
Third, a taxpayer may request a correction from
this court under ORS 305.288(1). That statute directs this
court to order changes or corrections to RMV for the current
tax year and the two immediately preceding years where the
property is a dwelling and the RMV assessment differential
is equal to or greater than twenty percent. ORS 305.288(1);
Richardson, 22 OTR at 209. The current tax year has the
same meaning as used in ORS 306.115, meaning the cur-
rent tax year is defined by the year in which the request
is made. ORS 305.288(5)(a). In this case, when taxpayer
filed his complaint in the Magistrate Division, the current
tax year was tax year 2015-16, and therefore the lookback
provisions of ORS 305.288(1) only reach back to tax years
2013-14 and 2014-15. Accordingly, this route to relief is fore-
closed as to tax year 2010-11.
Fourth, and finally, the court may order a change
or correction to the current tax year and the two imme-
diately preceding tax years under ORS 305.288(3) if the
taxpayer has no statutory right of appeal remaining and
the court determines that good and sufficient cause exists
for the taxpayer’s failure to pursue the statutory right of
appeal. As with subsection (1) of ORS 305.288, the current
tax year is defined by the year in which the request is made
to this court. In this case, that year is tax year 2015-16, and
16
Nor could he. The current tax year at the time taxpayer filed his complaint
in the Magistrate Division was tax year 2015-16, and therefore the department’s
supervisory authority would have only extended back to tax year 2013-14.
406 Work v. Dept. of Rev.
accordingly the court may only reach back as far back as tax
year 2013-14. Accordingly, this route to relief is foreclosed as
to tax year 2010-11.
Taxpayer’s claims regarding the RMV and MAV of
the subject property for tax year 2010-11 are dismissed.
2. Tax Year 2011-12
For this tax year, taxpayer seeks adjustment of both
the RMV and MAV of the property. For the same reasons as
tax year 2010-11 and elsewhere, taxpayer’s claims regard-
ing the RMV and MAV of the subject property for tax year
2011-12 are also dismissed.
3. Tax Year 2012-13
For this tax year, taxpayer again seeks adjustment
of both the RMV and MAV of the property. For similar rea-
sons as tax year 2010-11, taxpayer’s claims regarding the
RMV and MAV of the subject property for tax year 2012-13
are also dismissed.
4. Tax Year 2013-14
Tax year 2013-14 is the first year in which the lim-
ited lookback period is satisfied for purposes of ORS 306.115
and ORS 305.288. It is also noteworthy that tax year
2013-14 is the first year in which taxpayer is only seeking a
correction to the MAV—not the RMV. Notwithstanding that
fact, the result does not change the analysis from prior tax
years.
For tax year 2013-14, there is a question regarding
whether taxpayer is aggrieved by the values determined by
the county assessor. The RMV for taxpayer’s property for
this year is $421,360. Even if the MAV is reduced to $453,340
as requested, his AV, which is based on the lesser of RMV
or MAV, would be the RMV of $421,360. Accordingly, tax-
payer’s tax burden would not change, and it appears that
taxpayer is not aggrieved by the increased MAV. Cf. Paris
v. Dept. of Rev., 19 OTR 519 (2008) (holding that taxpayer
was not aggrieved by allegedly erroneous RMV where the
AV would still be based on the MAV, which was lower than
the RMV).
Cite as 22 OTR 396 (2017) 407
For this reason alone, taxpayer’s claim regarding
the MAV for tax year 2013-14 could be dismissed. However,
for the reasons expressed below as to tax year 2014-15, tax-
payer has also failed to state ultimate facts sufficient to con-
stitute a claim. He has not alleged that the MAV for this
year was calculated in error, and his claim must therefore
be dismissed.
5. Tax Year 2014-15
Just as in tax year 2013-14, taxpayer is only chal-
lenging the MAV in tax year 2014-15. Unlike tax year
2013-14, there are no standing issues as to the basic chal-
lenge to the MAV. However, there is a standing issue as to
taxpayer’s appeal from the Magistrate Division.17 Although
taxpayer did not receive all the relief he requested in the
Magistrate Division, the magistrate did change the MAV
in tax year 2014-15 (and tax year 2015-16) to the value
requested by taxpayer. Accordingly, as to this tax year, tax-
payer is not aggrieved by the decision of the magistrate,
and his claim as to this tax year must be dismissed. See
ORS 305.570(1)(a).
Taxpayer’s claim as to this tax year would also
be dismissed for failure to state a claim. Although this
analysis is not essential to this court’s decision, it gives
context to the department’s argument—discussed below—
regarding the effect of this court’s dismissal. Accordingly,
the court returns to the familiar four routes to relief dis-
cussed above.
First, taxpayer has not alleged that he appealed
to the BOPTA for tax year 2014-15. Second, taxpayer did
not request the department use its supervisory authority
under ORS 306.115. Third, because taxpayer is only seek-
ing an adjustment to MAV, he cannot seek relief under ORS
305.288(1), which pertains only to RMV relief. And fourth,
taxpayer has not alleged that the MAV was not calculated
pursuant to statute, or that an exception to that calculation,
such as new improvements or construction, applies. See ORS
308.146(1); Comcast Corp. III, 22 OTR at 236.
17
The court notes that the department did not move on this basis. However,
the court will not ignore it.
408 Work v. Dept. of Rev.
Taxpayer’s sole complaint is that the MAV in this
year is, because of the unchallenged classification error in
1996, too high. However, that allegation is insufficient to
constitute a claim for relief.
This court explained in Kaufman v. Dept. of Rev., 20
OTR 159 (2010), that a party cannot request a change to the
MAV in the current year solely on the basis of a past error.
The current year MAV is based upon a statutory calculation
based on the prior year’s AV and MAV. See ORS 308.146;
Comcast Corp III, 22 OTR at 235. That calculation applies
unless one of six constitutional exceptions applies. See Or
Const, Art XI, § 11(1)(c)(A) - (F). Taxpayer admitted during
oral argument that no such exception was pleaded or has
occurred here.
Taxpayer has not stated ultimate facts sufficient to
show that the MAV was erroneously calculated. Therefore,
taxpayer’s claim regarding the MAV for tax year 2014-15 is
dismissed.
6. Tax Year 2015-16
For this tax year, the current tax year, taxpayer
only seeks adjustment to the MAV. Similar to tax year
2014-15, taxpayer received the relief he requested in the
Magistrate Division and does not have standing to appeal
to the Regular Division. ORS 305.570(1)(a). And, as in tax
year 2014-15, none of the four routes to relief assist taxpayer
for tax year 2015-16.
First, taxpayer has not alleged that he sought
review before the BOPTA for this year. Of note, the timing of
taxpayer’s appeal to the Magistrate Division plausibly lines
up with taxpayer having pursued relief from the BOPTA for
tax year 2015-16 before filing a complaint in the Magistrate
Division. However, even if that were true, taxpayer has still
failed to allege ultimate facts sufficient to show that the
statutory calculation of the MAV for this tax year was done
in error, or that an exception applies.
The analysis for the remainder of the routes to relief
follows tax year 2014-15. Accordingly, taxpayer’s claim for
tax year 2015-16 as to MAV is dismissed.
Cite as 22 OTR 396 (2017) 409
There being no other claims for relief, the depart-
ment’s motion to dismiss is granted.
C. Effect of Dismissal
The question now presents itself: Is the decision
of the magistrate to be given effect after dismissal of tax-
payer’s complaint in the Regular Division. The department
argues that the assessment values, which were changed by
the decision of the magistrate, must remain at their current
roll values. In effect, the department, which did not file a
complaint in this court, seeks to use its motion to challenge
what it sees as an error in the magistrate’s decision and
receive affirmative relief.
The department has set forth two bases for its posi-
tion. First, the department argues that this court lacks
subject matter jurisdiction and therefore must dismiss the
entire case. Second, the department argues that the Tax
Court can only issue one judgment and therefore the entry
of a judgment of dismissal prevents the entry of a judgment
giving effect to the magistrate’s decision. The department
seeks to bolster this argument by pointing out that a com-
plaint in the Regular Division must state how the assessor
erred, and so therefore this court is reviewing taxpayer’s
claims as a whole on the department’s motion to dismiss.
See ORS 305.560(2).
This case presents a variation of the problem
presented in Village at Main Street. Although not iden-
tical to the “cross-appeal” issue in Village at Main Street,
which resulted from the seeking of affirmative relief in an
answer to the taxpayer’s complaint, the department has
similarly argued in this case that it is entitled to affir-
mative relief in this court without ever filing a complaint
within the time permitted by statute. See ORS 305.501
(5)(a) (allowing 60 days for parties to appeal the final deci-
sion of the magistrate); ORS 305.501(7) (providing that
after 60 days the decision becomes final and a judgment is
issued).
As to the department’s first argument, it does
appear that a dismissal on the basis of subject matter juris-
diction, assuming that the lack of subject matter jurisdiction
410 Work v. Dept. of Rev.
also extends to the magistrate’s decision, might well result
in the decision of the magistrate being vacated.18 Courts are
required to consider sua sponte the existence or not of sub-
ject matter jurisdiction, and subject matter jurisdiction can
be raised at any time. See, e.g., TCR 21 G(4). Accordingly,
once the judge determines that there is a lack of jurisdiction
over the complaint filed in the Regular Division, the magis-
trate may, depending on the basis for the lack of jurisdiction
in the Regular Division, be on notice to ensure that there
is jurisdiction over the complaint filed in the Magistrate
Division.
However, both divisions of this court have subject
matter jurisdiction over taxpayer’s claims, notwithstand-
ing the fact that taxpayer’s claims are not sufficiently well
pleaded.19 Even if the magistrate’s decision was in error,
that decision was still within the jurisdiction of the court.
Therefore, unless the magistrate’s alleged error is appealed
by one or more parties aggrieved by that decision, it has the
full force of law once a judgment is issued giving it effect. See
ORS 305.501(5)(d) (“Appeal to the judge of the tax court is
the sole and exclusive remedy for review of a written decision
of a magistrate.”); ORS 305.501(7) (“If no appeal is taken to
18
Although unlikely, it is possible that the Regular Division would lack
jurisdiction over a taxpayer’s claims in the Regular Division, but the Magistrate
Division would have jurisdiction over that taxpayer’s claims in the Magistrate
Division. Consider the following hypothetical:
Taxpayer timely and appropriately files a complaint in the Magistrate
Division alleging that the RMV and AV of a property is too high. Property val-
uations cases routinely come through the Magistrate Division, and such cases
are within the subject matter jurisdiction of the Magistrate Division (and the
Regular Division for that matter).
Assume the magistrate decides that the county’s appraisal was correct, and
issues a final decision declaring the RMV and AV is that specified by the county.
Further assume that the taxpayer chooses not to litigate the RMV and AV fur-
ther by filing a complaint in the Regular Division. However, assume that the
county appraiser damaged taxpayer’s property during an on-site inspection of
the property.
If taxpayer files a complaint in the Regular Division seeking relief in tort for
the damage to the property, the Regular Division would dismiss the complaint for
lack of subject matter jurisdiction. See Sanok, 294 Or 684. However, lack of sub-
ject matter jurisdiction in the Regular Division would not, in this hypothetical,
also mean that the Magistrate Division lacked subject matter jurisdiction over
the valuation appeal.
19
Even though taxpayer is not aggrieved as to tax year 2013-14, that fact does
not change the analysis as to tax years 2014-15 and 2015-16. See 22 OTR at 402 n 11.
Cite as 22 OTR 396 (2017) 411
the tax court judge within 60 days, the decision of the mag-
istrate shall become final. The tax court shall enter a judg-
ment enforcing all final decisions of the magistrate, which
judgment shall be binding upon all parties. ORS 305.440(2)[,
requiring adjustment to the roll values,] applies to the final
determination of any property tax matter.”).
The department’s second basis touches on the
unique nature of this court with two divisions. As seen in
Village at Main Street, this court is subject to statutory pro-
visions that at times cause its practice to diverge from the
general practice of civil courts.
The court now turns to the department’s argu-
ments. First, the department is essentially correct that this
court, being one court with two divisions, can only issue one
judgment—at least as to where this court reaches the mer-
its of a dispute. See Dept. of Rev. v. Froman, 14 OTR 543,
546-547 (1999). There is generally only one final act of a
court on the merits of any particular issue.20 However, this
court is aware of no authority preventing it from entering
an order granting a motion to dismiss a complaint filed in
the Regular Division, and then entering a judgment giving
effect to the decision of the Magistrate Division, at least
where there is no “cross-appeal.” See TCR 14 A (providing
that a motion is an application for an order; it is not a claim
for relief).
Second, the department is mistaken as to the effect
of ORS 305.560(2) in this court.21 The department relies
20
Of course, the finality of a judgment in this court is subject to numerous
qualifications. One is reversal by the Supreme Court. ORS 305.445. Another is a
motion for relief from judgment. TCR 71 B and C. Another is a motion to correct
a judgment. TCR 71 A. Another is a motion for supplemental judgment. TCR 68
C(3)(b). None of these qualifications affects the basic premise of the department
as to the finality of a court’s decision to determine the rights and responsibilities
of the parties in a tax dispute.
21
ORS 305.560(2) provides:
“The complaint shall state the nature of the plaintiff’s interest, the facts
showing how the plaintiff is aggrieved and directly affected by the order, act,
omission or determination and the grounds upon which the plaintiff contends
the order, act, omission or determination should be reversed or modified. A
responsive pleading shall be required of the defendant.”
This language is similar to the language used in ORS 305.275 to determine who
may appeal from an “act, omission, order or determination of” a taxing authority.
ORS 305.275(1)(a).
412 Work v. Dept. of Rev.
upon ORS 305.560(2) in arguing that complaints must
demonstrate how the underlying act, order, determination,
or omission of the taxing authority was erroneous. But the
statute is not so limited to taxing authorities.
Rather, ORS 305.560 mentions how a complaint
must show how a plaintiff is “aggrieved” and “affected” by
the order, act, omission, or determination. ORS 305.570 sim-
ilarly mentions being “aggrieved” and “affected” by a writ-
ten decision of a magistrate to have standing to appeal to
the Regular Division. Such a written decision is certainly a
form of order, act, omission, or determination. Indeed, ORS
305.560(4)(a) mentions orders of the Tax Court.
In any case, the department’s strained reading of
ORS 305.560 cannot turn on its head the statutory scheme
of appeals from the Magistrate Division. That scheme
requires that “[a]ny party dissatisfied with a written deci-
sion of a magistrate” appeal to the judge of the Tax Court.22
ORS 305.501(5)(a).
The department’s view of dismissal fails to consider
the context of the de novo review obtained in the Regular
Division and the structure of this court. While a party is
generally free to proceed on new facts, new law, and new
arguments, the party aggrieved by the magistrate’s decision
and seeking affirmative relief must first file a complaint in
the Regular Division. ORS 305.501(5)(a) and (d). Otherwise,
the magistrate’s decision becomes final and a judgment will
be entered giving effect to that decision. ORS 305.501(7).
The department’s theory also treats the proceedings
in the Magistrate Division as completely irrelevant. This
court has not held that the proceedings in the Magistrate
Division are at all times irrelevant upon the filing of a
22
This court perhaps overstated the importance of the word “to” in Village at
Main Street when it discussed whether ORS 305.560 is included in the statutory
reference “ORS 305.404 to 305.560” found in ORS 305.570 in discussing how an
appeal to the Regular Division is perfected. See Preface to ORS; ORS 174.100(9)
(“ ‘To’ means ‘to and including’ when used in a reference to a series of statute
sections, subsections or paragraphs.’ ”). Even so, ORS 305.570 simply addresses
standing to appeal to the Regular Division. The operative statute concerning
appeals to the Regular Division is ORS 305.501, which, as discussed throughout
this order, requires that a party must file a complaint—that is, a request for
affirmative relief—if that party is dissatisfied with a decision of the magistrate.
Cite as 22 OTR 396 (2017) 413
complaint in the Regular Division. Quite the opposite. See
Spears v. Dept. of Rev., 20 OTR 88 (2010) (reviewing only
the decision of the magistrate to dismiss for failure to pros-
ecute); Freitag v. Dept. of Rev., 19 OTR 144 (2006) (same);
Newton v. Clackamas County Assessor, 17 OTR 348 (2004)
(articulating abuse of discretion standard for some deci-
sions of the magistrate); Norpac Foods, Inc. v. Dept. of Rev.,
15 OTR 331 (2001) (reviewing failure to submit a written
report as required by the magistrate). This court is aware
of no authority that the magistrate’s decision automatically
disappears when a complaint is filed.
In addition, this court has made clear that, even
though parties are entitled to an “original” and “indepen-
dent” proceeding in the Regular Division under ORS 305.425,
“ ‘original’ has never been construed to mean that an act or
failure to act below should be ignored by the court.” Norpac
Foods, Inc., 15 OTR at 332-33. A party cannot frustrate a mag-
istrate’s decision based upon that party’s failures below. See,
e.g., Wynne v. Dept. of Rev., 342 Or 515, 156 P3d 64 (2007) (dis-
missal in Regular Division for failure to file complaint in the
Magistrate Division).
Appeal to the Regular Division by one party of the
magistrate’s decision is not necessarily in all ways and for
all parties a complete redo of the Magistrate Division pro-
ceeding. Rather, an appeal from the Magistrate Division is
more like a suit to set aside the decision of the magistrate.
See ORS 305.425(2).23 And, as has already been stated, the
23
ORS 305.425(2) does not expressly refer to setting aside a decision of the
magistrate. However, that statute existed before the Magistrate Division was cre-
ated by statute, and it was not materially amended to reflect the creation of the
Magistrate Division. See Or Laws 1997, ch 541, § 60 (amending ORS 305.425(2)
only to reflect the change from “a board of equalization or board of ratio review”
to “a board of property tax appeals”). That the legislature failed to amend ORS
305.425(2) to reflect the existence of the Magistrate Division is curious. Before
the creation of the Magistrate Division, litigants generally appealed directly to
the judge of the Tax Court from acts, orders, omissions, or determinations of tax-
ing authorities. See Henry C. Breithaupt & Jill A. Tanner, The Oregon Tax Court
at Mid-Century, 48 Willamette L Rev 147, 148 (2011). Now, litigants generally
appeal first to the Magistrate Division from such acts. See ORS 305.275.
Curiosity aside, ORS 305.570 provides that an appeal to the Regular Division
“shall be perfected in the manner provided in ORS 305.404 to 305.560.” That ref-
erence includes ORS 305.425(2), which implies that the perfection of an appeal to
the Regular Division includes demonstrating why the magistrate erred and why
its decision should be set aside.
414 Work v. Dept. of Rev.
ability to set aside such decision and received affirmative
relief is dependent upon the filing of a complaint in the
Regular Division. ORS 305.501(5)(a) and (d), (6). A dismissal
only ensures that the plaintiff does not receive affirmative
relief.
This court held in Village at Main Street that each
party requesting affirmative relief from a magistrate’s deci-
sion must file its own complaint in the Regular Division to
secure its requested relief. Otherwise, the nonappealing
party’s ability to assert other positions as to income or
value is at the risk of the other party voluntarily dismissing
its appeal. While this court’s decision was vacated by the
Supreme Court on other grounds, this court adheres to the
analysis here.24
In many situations, it does not matter which party
actually files the complaint in the Regular Division. This is
because this court has authority to determine the correct
RMV of property notwithstanding the values pleaded by the
parties, ORS 305.412, and the correct amount of tax defi-
ciency even if greater than the amount originally assessed
by the department. ORS 305.575. Generally, the court is
tasked with reaching the correct result.
However, a party only has standing to maintain an
action requesting relief in this court if it is aggrieved by
the magistrate’s decision and it “fil[es] a complaint in the
regular division of the tax court within 60 days after the
date of entry of the [magistrate’s] written decision.”25 ORS
305.501(5)(a). Further, “[a]ppeal to the judge of the tax court
is sole and exclusive remedy for review of a written decision
of a magistrate.” ORS 305.501(5)(d).
If a party does not file a complaint in the Regular
Division asserting its independent claims for relief, it walks
a precarious line. It may be that the party obtains the relief
it seeks because (a) the appealing party stays the course and
24
The Supreme Court vacated this court’s decision, but it did not address
this issue. See 22 OTR at 397 n 1.
25
Except in cases where appeal directly to the Regular Division is permitted
by statute, or the parties petition for special designation to the Regular Division.
See, e.g., ORS 305.501(1) (providing for petitions for special designation); TCR
1 C (corresponding rule on petitions for special designation).
Cite as 22 OTR 396 (2017) 415
(b) the court, based on its authority to independently deter-
mine the correct value or amount of deficiency, affirmatively
rules in favor of the nonappealing party. However, such an
outcome is not certain, and requires the appealing party to
stay the course.26
It is also especially important for each party to
file its own complaint when the issue is one other than the
correct value, ORS 305.412, or the correct amount of tax,
ORS 305.575. Yet, even in those cases, if the nonappealing
party wants to request affirmative relief to improve its posi-
tion, it needs to do so by filing a complaint in the Regular
Division asking for relief greater than that obtained in the
Magistrate Division.
The above discussion notwithstanding, it is a cer-
tainty that a nonappealing party does not get affirmative
relief from a successful motion to dismiss an appealing par-
ty’s complaint for failure to state a claim. Rather, the appeal-
ing party does not get the relief sought and the nonappeal-
ing party gets no relief from the magistrate’s decision.
Having discussed the general statutory nature of
appeals to the Regular Division and why the department’s
arguments do not comport with the statutory scheme, the
court now addresses why, as a practical matter, the depart-
ment’s successful motion to dismiss in this case simply can-
not result in magistrate’s decision being nullified. The logic
of this decision is similar to that of the department in its
supplemental brief on the effect of dismissal in the Regular
Division. Although the premise of the statement was that
this court had no jurisdiction of taxpayer’s claims, an argu-
ment which this court has rejected, the analysis is salient.
On page 3 of its brief, the department states:
“This situation[, dismissal for lack of subject matter juris-
diction,] should be distinguished from appeals of a magis-
trate’s decision to the Regular Division that are dismissed
because they are defective for some procedural reason not
related to subject matter jurisdiction. For example, if the
taxpayer fails to pay the disputed tax and fails to file an
affidavit of hardship as required by ORS 305.419, or if the
26
Of course, it also requires the “appealing party” to have even filed a com-
plaint in the Regular Division in the first place.
416 Work v. Dept. of Rev.
appeal to the Regular Division is untimely or if there is a
failure of process. In such cases, it is appropriate for the
Regular Division to enter a judgment enforcing the mag-
istrate’s decision on the merits, because otherwise parties
could avoid the effect of the magistrate’s decision simply by
filing an untimely appeal to the Regular Division. Here, nei-
ther division of the court has authority to change the MAV
for any of the tax years that were appealed and the judg-
ment of the court should reflect that.”
(Emphasis added.)
This court notes that the department’s final sen-
tence reflects a critical misunderstanding regarding the
roles of motions to dismiss versus complaints (appeals). If
a magistrate acts within the court’s jurisdiction but outside
its authority, the correct response by the aggrieved party is
to appeal, not dismiss the other party’s appeal.
As far as the distinction between dismissals for lack
of subject matter jurisdiction and other bases for dismissal,
this court agrees. If the magistrate acted outside the court’s
jurisdiction, then no judgment may be entered reflecting
that decision. However, the distinction between dismissals
on the basis of subject matter jurisdiction and otherwise,
and the emphasized rationale, confirms the result in this
case.
Consider, for example, the problems that would be
raised by a notice of dismissal filed by a plaintiff. See TCR
54. Assume that the department’s theory is correct that a
dismissal by this court requires that it enter, in all cases,
a judgment of dismissal, which judgment must dismiss the
case in its entirety. In fact, a plausible reading of TCR 54
A(1) so states, “[A] plaintiff may dismiss an action in its
entirety * * * without order of court * * * by filing a notice of
dismissal with the court * * *. Upon notice of dismissal * * *
a party must submit a form of judgment and the court will
enter a judgment of dismissal.” (Emphasis added.)
Such an interpretation would do violence to the
statutory scheme providing for resolution of disputes first
in the Magistrate Division and then by de novo proceedings
in the nature of review in the Regular Division. Cf. ORS
305.501(5)(d). Consider where a taxpayer had prevailed in
Cite as 22 OTR 396 (2017) 417
the Magistrate Division, for example by proving that the
assessment roll values were too high. The county assessor,
having failed to prove that the roll values were correct, could
file a complaint in the Regular Division on the last such day
a complaint could be filed. Then, on that day or the next day,
the county could file a notice of dismissal, completely wiping
out taxpayer’s victory in the Magistrate Division.
These results are particularly troublesome where,
as in the case where the taxpayer prevailed in the Magistrate
Division, the taxpayer does not have standing to appeal
to the Regular Division under ORS 305.570(1)(a). Such
a situation is not just precarious—it is unwinnable and
indefensible.
In fact, taxpayer in this case did not have stand-
ing to appeal tax years 2014-15 and 2015-16, yet he filed a
complaint attempting to appeal them anyway. If the depart-
ment’s theory was correct, an incredibly unusual circum-
stance would arise here. In this case, taxpayer received
relief for tax years 2014-15 and 2015-16 when the magis-
trate gave effect to the stipulation. And, although he did
not need to, taxpayer appealed those years to this court.
This court dismissed those years because he had already
received the relief he requested in the Magistrate Division.
Yet, under the department’s theory, because taxpayer won
in the Magistrate Division, he would lose in the Regular
Division and this court should both dismiss his complaint in
this division and set aside the decision of the magistrate.
Such a result cannot be the law, and an appropriate
reading of the statutory scheme governing this court and
its two divisions does not support it. Regardless of how this
court’s rules might be interpreted, any such interpretation
cannot supersede what is provided for by statute. See Village
at Main Street, 22 OTR at 57-58. If the department wants
affirmative relief, it must file its own complaint.
The court notes that the potentially troublesome
language in TCR 54 A is not present in TCR 21 A, with
respect to motions to dismiss. However, the statutory
scheme remains. If a party believes that the magistrate has
erred, that party is required to file a complaint to secure its
opportunity to request affirmative relief. ORS 305.501(5)(d).
418 Work v. Dept. of Rev.
In this case, the department did not file its own complaint,
and therefore has no basis for affirmative relief after the
dismissal of taxpayer’s complaint. On dismissal, the roll val-
ues will be set according to the magistrate’s decision.
It is also worth noting that this court dismissed
taxpayer’s claims as to tax year 2014-15 and 2015-16 for
lack of standing to proceed to the Regular Division because
taxpayer was not aggrieved by the magistrate’s decision. It
would be inconsistent for this court to dismiss a claim on
such a basis and then enter a judgment that returns the
assessment values to the roll values.
Finally, the court comments on two procedural
matters regarding appeals to the Regular Division that the
department argues support the proposition that a dismissal
must revert to the original act, order, omission, or deter-
mination of the taxing authority before the decision of the
Magistrate Division.
The first procedural matter addresses the form of
the complaint filed in the Regular Division. ORS 305.560(2)
provides that the taxpayer must establish in its complaint
how the taxpayer is aggrieved by the act, order, omission,
or determination of the taxing authority. Essentially, the
department argues that ORS 305.560(2) requires taxpayer to
show why the assessor was wrong and, if taxpayer fails to do
so, then the court must give effect to the original roll values.
The second procedural matter addresses the requirement,
in income tax matters, of the taxpayer to pay the amount
of the department’s assessment “on or before the filing of a
complaint with the regular division.” ORS 305.419(1).
Neither of these procedural matters changes the
analysis. First, the department’s view appears to fit nicely
when it is a taxpayer that is appealing from the decision of a
magistrate. The problem with the department’s construction
is easily demonstrated where the county, instead of the tax-
payer, loses in the Magistrate Division, and the county finds
itself appealing to the Regular Division in order to defend
its assessed values. One is certainly not aggrieved by one’s
own assessment actions. In that situation, the county is not
aggrieved by its own assessed values. What it is aggrieved
by is the decision of the magistrate. That is where ORS
Cite as 22 OTR 396 (2017) 419
305.570 provides that the county has standing to appeal to
the Regular Division. The pleading requirements contained
in ORS 305.560(2) do not change the requirement that, if a
party is dissatisfied by the magistrate’s decision, that party
must file a complaint as required by ORS 305.501.
As to the department’s second procedural point,
ORS 305.419(1) simply reflects a legislative policy that
taxpayers get one full and fair hearing before a magis-
trate before they are required to pay the tax assessment
or demonstrate hardship. The fact that a taxpayer would
only have standing to appeal to the Regular Division if the
taxpayer lost, at least in part, in the Magistrate Division,
means that the taxpayer failed to prove in the first instance
that the taxpayer’s claims are correct. A policy requiring
such a taxpayer to now pay the full assessment before liti-
gating further is irrelevant to the effect of a dismissal of a
complaint filed in the Regular Division.27
In sum, a motion to dismiss a plaintiff’s complaint
in the Regular Division for failure to state ultimate facts
sufficient to constitute a claim does not entitle the moving
party to affirmative relief, even assuming that the grant
of dismissal implies that the magistrate erred. A different
result would have been reached in a dismissal for lack of
subject matter jurisdiction,28 and a different result most
probably would have been reached had the department filed
a complaint in this court seeking review of the magistrate’s
decision.
This conclusion fits nicely within the statutory
scheme governing appeals to the Regular Division. If a
party is dissatisfied with a decision of the magistrate, that
party must file a complaint in the Regular Division. ORS
305.501(5)(a) and (d).
The conclusion of this court also fits within the
rules of this court regarding claims for relief. Claims for
relief must be raised in the pleadings. TCR 18 A(2). The
27
It is worth noting that this case is not an income tax case, and ORS
305.419(1) does not apply here.
28
Unless the lack of subject matter jurisdiction in the Regular Division did
not also extend to the Magistrate Division. See 22 OTR at 410 n 18.
420 Work v. Dept. of Rev.
only pleadings in which a claim for relief is allowed are com-
plaints and answers (to the extent they contain “counter-
claims”). TCR 13 B. Accordingly, even if this court is incor-
rect in its analysis in Village at Main Street with respect to
the availability of “counterclaims” after the 60-day appeal
period has expired, any such error does not save the depart-
ment here because the department has neither filed a com-
plaint nor an answer with a counterclaim.29
It is appropriate at this time to comment on the sit-
uation in which the department finds itself. The department
was not the assessing authority in this case. The depart-
ment was not named as a defendant in the Magistrate
Division. The department did not participate in the proceed-
ings of the Magistrate Division. And, the department was
not a party to this case until taxpayer filed a complaint in
the Regular Division naming the department as Defendant,
as required by statute. See ORS 305.501(5)(c) (requiring
the department to be named as the defendant in property
tax matters if a party other than the county appeals to the
Regular Division). It might appear that the department is
at a disadvantage in correcting alleged errors of the mag-
istrate when it might not be a party until the appeal to the
Regular Division.
However, the legislature has enacted a statutory
scheme designed to give the department substantial notice
of the occurrences in the Tax Court, and the power to react to
such notice as it deems fit. First, the Tax Court serves “cop-
ies of all complaints and petitions” filed in the Magistrate
Division (and Regular Division) on the department. ORS
305.560(1)(b). Second, the court serves copies of “any order
or judgment issued by the tax court” on the department.
ORS 305.560(4)(a). And third, the department may “[a]t any
time in the course of any appeal * * * intervene as a matter
of right.” Id.
The notice and intervenor power conferred on the
department by the legislature assists the department in
29
The court of course adheres to its decision in Village at Main Street because
the statutory provision governing appeals to this division, ORS 305.570, does not
contemplate a counterclaim. That statutory provision prevails over this court’s
rules.
Cite as 22 OTR 396 (2017) 421
carrying out its duty to supervise the tax laws of the state,
including the property tax system. ORS 305.015; see also
ORS 306.115; ORS 306.120.
The department finds itself in a situation which is
analogous to that of a taxpayer in a property tax matter. As
discussed by this court in Taft Church v. Dept. of Rev., 14
OTR 119, 122 (1997), aff’d, 326 Or 139, 950 P2d 313 (1997):
“Most taxpayers are familiar with our income tax systems
under which taxpayers keep the records and assess the tax,
and the government audits for accuracy and correctness. In
contrast, the property tax system requires the government
to keep the records and assess the tax, and the taxpayer
audits for accuracy and correctness. Both systems impose
time limits on the right to audit. A failure to audit and
challenge the assessment within the time limit will result
in a loss by the party responsible for the audit.”
(Emphases in original.)
Similarly, the department must monitor and “audit”
the actions and decisions of local assessors in property tax
matters, including stipulations by assessors and appeals,
to ensure accuracy and correctness. It may, of course, also
instruct assessors that any stipulation of value, including
MAV, must be reviewed by the department. Finally, the
department must be “vigilant” in reviewing what the mag-
istrate has done “so as to timely appeal” if it so desires.
Cf. Myslony v. Dept. of Rev., 21 OTR 146 (2013).
The department’s motion to dismiss is granted.
However, the result of that action is that the decision of the
magistrate, which was not appealed by the department, will
be given effect in a judgment of this court.
V. CONCLUSION
The department’s motion to dismiss is denied as to
lack of subject matter jurisdiction, but granted as to fail-
ure to state ultimate facts sufficient to constitute a claim
as to tax years 2010-11 through 2013-14, and for lack of
standing as to tax years 2014-15 and 2015-16. The depart-
ment’s motion is granted to the extent that it dismisses tax-
payer’s claims in this court, but the court grants no affir-
mative relief to the department. The assessment values
422 Work v. Dept. of Rev.
adjusted by the magistrate in his Final Decision were not
appealed by the department, and should therefore be given
effect. Now, therefore,
IT IS ORDERED that Defendant’s Motion to
Dismiss is granted.
The court will enter a judgment giving effect to
the assessment values determined by the magistrate in his
Final Decision.