Lee v. Douglas County Tax Collector ( 2022 )

IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
JANET H. LEE, )
)
Plaintiff, ) TC-MD 220384R, 220385R
v. )
)
DOUGLAS COUNTY TAX COLLECTOR, ) CORRECTED ORDER GRANTING
) DEFENDANT’S MOTION FOR
Defendant. ) JUDGMENT ON THE PLEADINGS
This Corrected Order Granting Defendant’s Motion for Judgment on the Pleadings is
issued in response to Defendant’s letter filed on November 28, 2022. In its letter, Defendant
asserts that the court cited the wrong version of ORS 311.505 in its original order. Plaintiff did
not respond to Defendant’s letter. After reviewing the letter, the court agrees with Defendant.
Corrections to the order are underlined. The remainder of the order remains unchanged.
Plaintiff appeals Defendant’s denial of a property tax discount, the imposition of interest,
and two returned payment fees for the 2021-22 tax year. This matter came before the court on
Defendant’s Motion for Judgment on the Pleadings (Motion), filed August 23, 2022. During the
case management conference held September 8, 2022, Plaintiff agreed to file a response to
Defendant’s motion by September 22, 2022. Plaintiff filed her letter in response (Response) to
Defendant’s Motion on September 8, 2022, and an additional letter on September 22, 2022.
I. STATEMENT OF FACTS
Plaintiff owns property in Douglas County, Oregon, identified as Accounts R42964 and
R54417 (subject property). (Ans at 3.) On November 15, 2021, using Defendant’s online
electronic payment system, Plaintiff attempted to pay the subject property tax, so that she could
take advantage of the statutorily provided three percent discount for paying in full, on or before
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CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 1
November 15. (See Compl at 2.) At 7:39 PM on November 15, Plaintiff received an email
confirmation of her payment of $3,049. (Id. at 3.)1
On November 19, 2021, Defendant notified Plaintiff via email that her payment had been
returned because the bank account from which she attempted to pay was frozen. (Compl at 4.)2
That same day, Plaintiff submitted new payments using a different bank account and received an
accompanying email confirmation of such payment. (Id. at 5.)
Because Plaintiff’s November 15, 2021, payment did not go through, she was charged
interest. On January 31, 2022, Defendant notified Plaintiff by letter that she had been charged a
$25 returned payment fee per account, due to her returned payments on November 15. (Ans at
3.) On April 26, 2022, Defendant mailed Plaintiff two installment notices, each of which
indicating that the corresponding tax account had no outstanding interest. (Ptf’s Ltr, Sept 22,
2022.) In May of 2022, Defendant again mailed Plaintiff a letter stating that she was ineligible
for the discount, that she remained responsible for the two returned payment fees, and charging
her interest. (Compl at 2.)
In her complaint, Plaintiff alleged that she called Defendant numerous times between
November and December of 2021 and that Defendant told her that she had not been charged any
additional fees and that she did not overpay. (Compl at 2.) However, also in her complaint,
Plaintiff admitted that the payment “mistake was from the account [she] closed in January 22.”
(Id.)
1
Plaintiff only filed an email confirmation of her $3,049 payment toward tax account R54417 with this
court. (Compl at 3.) However, on November 15, 2021, Plaintiff also attempted to submit payment toward tax
account R42964. (Ans at 3.) Plaintiff’s attempted property tax payments on November 15, 2021, totaled $7,966.
(Id.)
2
Plaintiff only filed documentation with this court showing that her payment toward tax account R54417
had been returned. (Compl at 4.) However, Plaintiff’s entire November 15, 2021, payment of $7,966 was returned.
(Ans at 3.)
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 2
II. ANALYSIS
Although motions for judgment on the pleadings are generally not favored by the courts,
such motions may be useful “when the answering party admits all material facts in a pleading
and denies only legal conclusions.” Buras v. Dept. of Rev., 17 OTR 282, 284 (2004), aff’d, 338
Or 12, 104 P3d 1145 (2005). This court has previously stated:
“To withstand judgment on the pleadings, a taxpayer must allege the existence of
facts that, within an articulated legal position, provide a basis for relief to a
taxpayer. For example, where a taxpayer claims that an item of income is exempt
or excluded from income, a taxpayer must allege: (1) a legal framework
establishing the exemption or exclusion, and (2) facts that, if true, would satisfy
the burden of proving the factual elements of the exemption or exclusion.”
Beeler v. Dept. of Rev., 18 OTR 456, 458 (2006) (internal quotations and citation omitted). In
ruling on Defendant’s Motion, the court assumes that all of the well-pleaded facts in Plaintiff’s
complaint are true.3
The issues presented are (1) whether Plaintiff is entitled to a property tax discount under
ORS 311.505, (2) whether Plaintiff is liable for the returned payment fees, and (3) whether
Plaintiff is liable for the accrued interest.4
A. Discount
ORS 311.505 states, in pertinent part, that a one-third payment of property taxes owed is
due on or before November 15 of each year. ORS 311.505(1). Payments of two-thirds or more,
made on or before November 15, are entitled to a discount. ORS 311.505(3). A two-thirds
3
Because Plaintiff did not attach a copy of the document from which she was appealing to her complaint,
the court also assumes that the facts alleged in Defendant’s Motion, Plaintiff’s Response, and Plaintiff’s letter dated
September 22, 2022, are true for purposes of this order. See ORS 305.501(4)(a) (“[A] magistrate is not bound by
common law or statutory rules of evidence or by technical or formal rules of procedure, and may conduct the
hearing in any manner that will achieve substantial justice”).
4
The court's references to the Oregon Revised Statutes (ORS) are to the 2019 edition, unless otherwise
indicated.
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 3
payment is entitled to a two percent discount. ORS 311.505(3)(a). Full payments are entitled to
a three percent discount. ORS 311.505(3)(b). “There is no statutory requirement that the county
assessor or tax collector notify a taxpayer that the deadline to qualify for the three percent
discount has passed.” O’Neill v. Multnomah Cty. Assessor, TC-MD 110957D, WL 851666 at *2
(Or Tax M Div, Mar 13, 2012).
In Kusuma v. Washington County Assessor, TC-MD 210022R, WL 100005 at *1 (Or Tax
M Div, Jan 11, 2022), the taxpayers attempted to pay the subject property tax online, on
November 11, 2020, to take advantage of the three percent discount, but mistakenly entered the
tax account number in the bank account number field, so their payment was rejected by the bank
on November 18. The taxpayers were not made aware of the failed payment until November 19.
Id. Among other things, the taxpayers argued that they would have been eligible for the discount
but for the defendant’s delay in notifying them of the failed payment. Id. at *2. Recognizing
that “[t]his court has long held it is ultimately the responsibility of the property owner to see that
the taxes are paid[,]” the court found that the taxpayers did not meet their burden of proof in
establishing that they were eligible for the discount. Id. at *4 (internal quotations and citation
omitted). The court further noted that even if the defendant had notified the taxpayers earlier of
their failed payment, the taxpayers still would not have been eligible for the discount because the
defendant’s payment processor itself was not notified of the rejection from the taxpayers’ bank
until November 18—after the discount deadline. Id. Finally, the court noted that the taxpayers
themselves had the ability to monitor their bank account to see if the funds had been withdrawn.
Id.
Like in Kusuma, Plaintiff’s attempted payment on November 15 failed due to her own
mistake. That is, as Plaintiff conceded in her complaint, her payment failed because she
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 4
attempted to pay from a bank account that was set to be closed in January of 2022. Defendant
had no obligation to notify Plaintiff of her failed payment. Plaintiff had the sole responsibility of
monitoring her bank account to confirm that the funds had been withdrawn, but she failed to do
so. Even had Defendant notified Plaintiff sooner of her failed payment, she still would have
been ineligible for the discount because her attempted payment was not confirmed until after
business hours on November 15. Defendant would have been unable to notify Plaintiff until
November 16 at the earliest, although Defendant likely was not aware itself of the failed payment
by that date. See Kusuma, WL 100005 at *4 (“[I]t can take between seven and ten days for an
[automated clearinghouse] payment initiated on [the Washington County Assessor’s] website to
be fully processed”).
In Docekal & Moyer LLC v. Clackamas County Assessor, TC-MD 110863C, WL
1245610 at *1 (Or Tax M Div, Apr 10, 2012), the taxpayer was denied a discount after making a
payment of the full amount minus the three percent discount on November 15 because the bank
erroneously returned her check. Despite the bank’s error, the court upheld the denial of discount
finding that the taxpayer “had the duty to ensure that a negotiable instrument was tendered to
Defendant by the tax deadline.” Id. at *3.
During the case management conference held September 8, 2022, Plaintiff indicated that
the bank may have erroneously denied her payment. Whether or not the bank erroneously denied
Plaintiff’s payment, such as in Docekal, is an issue beyond the scope of the case presently before
the court. Even if the bank erred, Plaintiff had a duty to ensure that her payment was processed
in a timely manner. The bank’s potential error does not relieve Plaintiff of potential
responsibility or liability.
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CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 5
The court finds that Plaintiff has not alleged any facts that provide a basis for the
requested relief and therefore concludes that Plaintiff was not eligible for a discount on her 2021-
22 property tax statement. The court accordingly finds that Plaintiff is liable for each of the
returned payment fees associated with her failed payment on November 15, 2021.
B. Interest
The second issue is whether Plaintiff is liable for any accrued interest on her outstanding
property taxes for the 2021-22 tax year.
ORS 311.505(2) provides:
“Interest shall be charged and collected on any taxes on property, other charges,
and on any additional taxes or penalty imposed for disqualification of property for
special assessment or exemption, or installment thereof not paid when due, at the
rate of one and one-third percent per month, or fraction of a month until paid.”
Because Plaintiff’s November 19, 2021, payment was untimely under ORS 311.505(1), interest
was charged. Id.
ORS 305.145 provides, in pertinent part, that:
“[A] county tax collector shall waive interest on an assessment if the taxpayer has
failed to make a timely payment * * * because:
“(a) An employee of the department or of a county tax collector acting in
an official capacity, who had knowledge of the necessary facts, misled the
taxpayer either by some erroneous factual representation or by a course of
dealing or conduct;
“(b) The taxpayer relied on the misleading factual representation or
conduct; and
“(c) The taxpayer failed to make a timely payment * * * by reason of the
taxpayer’s reliance on the information or course of conduct.”
ORS 305.145(1)(a)-(c).
Discussing the legislative history of ORS 305.145(1) in Stancorp Financial
Group, Inc. v. Dept. of Rev., TC-MD 070881B, WL 3654427 at *10 (Or Tax M Div, Aug
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 6
18, 2011), this court previously found that House Bill 2601, which passed in 1987 and
created ORS 305.145(1), “was drafted with the express purpose of mirroring the language
of estoppel case law” and “was intended to codify estoppel principles for waiver of
interest.”5 Thus, this court looks to estoppel case law in determining whether the well-
pleaded facts in Plaintiff’s complaint, taken as true, provide a basis for relief.
Estoppel may only be granted “when there is proof positive that the collector has
misinformed the individual taxpayer.” Johnson v. State Tax Comm’n, 248 Or 460, 463,
435 P2d 302 (1967). “[T]his court has found such proof in incorrect or misleading
documents sent by taxing authorities to the taxpayer.” Webb v. Dept. of Rev., 18 OTR
381, 384 (2005). “[T]here are few cases in which an Oregon court has considered oral
communication to constitute a part of proof positive.” Pippenger v. Lane Cty. Assessor,
TC-MD 100141D, WL 3264283 at *3 (Or Tax M Div, Aug 19, 2010) (internal quotations
and citations omitted). To meet the proof positive standard for oral communications, the
taxpayer must provide “detailed memoranda that are written contemporaneously with the
communications and that corroborate the taxpayer’s recollection of them” or describe
“the communications in great detail, including the nature, date, and time of each
conversation; the names and relationships to the parties of all those who took part in each
conversation; those persons’ knowledge of taxpayer’s situation and of the relevant law;
and the exact statements made as well as their form and intended meaning.” Webb v.
Dept. of Rev., 19 OTR 20, 26 (2006). “Mere testimony that the government orally
///
5
A taxpayer must prove three elements to succeed on a claim of estoppel: “(1) misleading conduct on the
part of the defendant(s); (2) taxpayer’s good faith reliance on that conduct; and (3) injury to taxpayer.” Hoyt Street
Properties LLC v. Dept. of Rev., 18 OTR 313, 318 (2005) (citations omitted).
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 7
misguided [the] taxpayer, is generally, by itself, insufficient * * *.” Schellin v. Dept. of
Rev., 15 OTR 126, 131 (2000).
Here, Plaintiff alleges that between November and December of 2021, she was
misled numerous times over the phone by Defendant to believe that she had received the
discount and that she would not be charged any additional fees. Plaintiff raises this
allegation in three sentences of her own written testimony and does not offer any
additional evidence. As indicated above, Plaintiff’s mere testimony is insufficient. In the
pleadings, Plaintiff failed to meet her burden of proof by failing to provide detailed
memoranda written contemporaneously with the communications or by describing the
communications in great detail. Even had Plaintiff met this higher standard, she would
remain liable for the interest charged because her November 19, 2021, payment was late
before she alleged that the misleading conversations had even taken place. Further, in her
own complaint, Plaintiff attached an email payment confirmation from Defendant dated
November 19, 2021, that reflected that she still had an outstanding property tax balance
of $109. (Compl at 5.) That is, Plaintiff provided evidence indicating that Defendant had
expressly informed her, in writing, that she still had an outstanding property tax balance.
Defendant’s November 2021 notification left Plaintiff with ample time to pay her
outstanding balance before additional interest began accruing in May 2022. The court
concludes that the facts alleged in Plaintiff’s complaint fail to provide a basis for relief
from the assessed interest under ORS 305.145.
III. CONCLUSION
After careful consideration, the court concludes that Plaintiff has not met the burden of
proof to show that she was eligible for a discount on her 2021-22 property tax statement. This
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 8
court further concludes that Plaintiff has not met her burden of proof to show that she was misled
by Defendant. Plaintiff is liable for both returned payment fees and for any accrued interest
under ORS 311.505. Now, therefore,
IT IS ORDERED that Defendant’s Motion for Judgment on the Pleadings is granted.
Dated this ______ day of December 2022.
RICHARD DAVIS
MAGISTRATE
This is a dispositive order pursuant to Tax Court Rule – Magistrate Division 16
C(1). The court will issue a decision after waiting 14 days to determine whether
there is a dispute about costs and disbursements. Any claim of error in regard to
this order should be raised in an appeal of the Magistrate’s decision when all
issues have been resolved. See TCR-MD 19.
This document was signed by Magistrate Richard Davis and entered on
December 20, 2022.
CORRECTED ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS TC-MD 220384R, 220385R 9