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Village League To Save Incline Assets, Inc. v. State

Supreme Court of Nevada

January 26, 2017

VILLAGE LEAGUE TO SAVE INCLINE ASSETS, INC., A NEVADA NONPROFIT CORPORATION, ON BEHALF OF THEIR MEMBERS AND OTHERS SIMILARLY SITUATED; DEAN R. INGEMANSON, TRUSTEE OF THE LARRY D. & MARYANNE B. INGEMANSON TRUST; DEAN R. INGEMANSON, INDIVIDUALLY AND AS TRUSTEE OF THE DEAN R. INGEMANSON TRUST; J. ROBERT ANDERSON; LES BARTA; KATHY NELSON, INDIVIDUALLY AND AS TRUSTEE OF THE KATHY NELSON TRUST; ANDREW WHYMAN; ELLEN BAKST; JANE BARNHART; CAROL BUCK; DANIEL SCHWARTZ; LARRY WATKINS; DON & PATRICIA WILSON; AND AGNIESZKA WINKLER, Appellants,
v.
THE STATE OF NEVADA, BOARD OF EQUALIZATION; WASHOE COUNTY; WASHOE COUNTY TREASURER; AND WASHOE COUNTY ASSESSOR, Respondents.

         Appeal from a district court order dismissing a petition for judicial review of a State Board of Equalization reappraisal decision. Second Judicial District Court, Washoe County; Patrick Flanagan, Judge.

         Reversed and remanded with instructions.

          Norman J. Azevedo, Carson City; Snell & Wilmer, L.L.P, and Suellen Fulstone, Reno, for Appellants.

          Adam Paul Laxalt, Attorney General, and Dawn Buoncristiani, Deputy Attorney General, Carson City, for Respondent Nevada State Board of Equalization.

          Christopher J. Hicks, District Attorney, and Herbert B. Kaplan, Deputy District Attorney, Washoe County, for Respondents Washoe County, Washoe County Treasurer, and Washoe County Assessor.

          OPINION

          HARDESTY, J.

         This appeal is a continuation of a dispute between many taxpayers from the Incline Village and Crystal Bay areas of Washoe County and respondent Nevada State Board of Equalization concerning the State Board's failure to equalize property values as required by NRS 361.395 for tax years 2003-04, 2004-05, and 2005-06. In this appeal, we must determine whether the district court erred when it dismissed a petition for judicial review of the State Board's interlocutory administrative order and whether the district court's decision is appealable to this court. Additionally, we are asked to determine whether the interlocutory administrative order issued by the State Board, requiring reappraisals of properties around Incline Village and Crystal Bay for the tax years in question, exceeded the Board's statutory authority by seeking to equalize property values nearly a decade before the date of the order.

         Initially, we conclude that this court has jurisdiction to consider the district court's dismissal of the petition for judicial review. We further conclude that the district court erred when it dismissed the petition for judicial review because the State Board exceeded its statutory authority to order reappraisals pursuant to NRS 361.395. Accordingly, we reverse the district court order dismissing the petition for judicial review and instruct the district court to grant, in part, the petition for judicial review and vacate the State Board's interlocutory administrative order directing reappraisals of the properties in the Incline Village and Crystal Bay areas for the tax years in question.

         FACTS AND PROCEDURAL HISTORY

         Appellant Village League to Save Incline Assets, Inc., filed a class action complaint in the district court in 2003 alleging, in relevant part, that the State Board failed to carry out its constitutional obligation to equalize property valuations in Incline Village and Crystal Bay and sought damages and declaratory relief directing the State Board to conduct the annual equalization of property values required by NRS 361.395. Respondents Washoe County, Washoe County Treasurer, and Washoe County Assessor (collectively, Washoe County) were also named in that action. Because Village League failed to administratively challenge the property valuations before filing the complaint, the district court dismissed the complaint, and Village League appealed the district court's decision in 2004 (2004 appeal).

          Before the 2004 appeal was decided, in opinions published in 2006 and 2008 arising from separate cases, this court determined that assessment methods used in 2002 to value properties at Incline Village and Crystal Bay for real estate tax purposes were unconstitutional. See State ex rel. State Bd. of Equalization v. Barta, 124 Nev. 612, 627, 188 P.3d 1092, 1102 (2008); State ex rel. State Bd. of Equalization v. Bakst, 122 Nev. 1403, 1416, 148 P.3d 717, 726 (2006). In Barta and Bakst, this court concluded, as a remedy, that because property is physically reappraised once every five years and the assessment methods used in 2002 were unconstitutional, the taxable values for the unconstitutionally appraised properties were void for the tax years beginning in 2003-04 and ending in 2007-08. Barta, 124 Nev. at 623-24, 188 P.3d at 1100; Bakst, 122 Nev. at 1416, 148 P.3d at 726. As a result, property taxes in those years were to be based on the taxable values previously established for the 2002-03 tax year. Barta, 124 Nev. at 628, 188 P.3d at 1103 (holding invalid any assessments based on the invalid 2002 taxable values); Bakst, 122 Nev. at 1416-17, 148 P.3d at 726 (invalidating the 2003-04 tax year assessments).

         As to Village League's 2004 appeal, this court reversed in part the district court's dismissal of the declaratory relief claim seeking statutory equalization and remanded the case to the district court for it to decide the viability of the claim. See Village League to Save Incline Assets, Inc. v. State ex rel. Dep't of Taxation, Docket No. 43441 (Order Affirming in Part, Reversing in Part and Remanding, March 19, 2009). On remand, Village League filed an amended complaint and petition for a writ of mandamus, asserting that the State Board was required to ensure a uniform and equal rate of assessment statewide.[2] The district court denied the petition, and Village League again appealed.

         On appeal, this court again reversed in part the district court's decision. See Village League to Save Incline Assets, Inc. v. State ex rel. Bd. of Equalization, Docket No. 56030 (Order Affirming in Part, Reversing in Part and Remanding, February 24, 2012). The case was remanded, and the district court subsequently issued a writ of mandamus ordering the State Board to hold a hearing and fulfill its equalization duty for all tax years in which unconstitutional methodologies were used, beginning with the 2003-04 tax year. The State Board was also required to report back to the district court regarding its compliance with the writ.

         In front of the State Board, Village League argued that all property owners in the Incline Village and Crystal Bay areas were entitled to the same remedy provided to the taxpayers in Bakst and Barta, which involved setting property values to the last constitutionally assessed level and issuing refunds. The State Board found that some properties located in the Incline Village and Crystal Bay areas were valued in 2003-04, 2004-05, and 2005-06 using methods that were unconstitutional but there was no evidence that these unconstitutional methods were used outside of the Incline Village and Crystal Bay areas for the tax years at issue.

         The State Board, concluded that, with the exception of NRS 361.333 concerning equalization by the Nevada Tax Commission, there were no statutes or regulations defining equalization by the State Board prior to 2010. Ultimately, the State Board determined that although no statewide equalization was required, regional equalization in the Incline Village and Crystal Bay areas was. Relying on a 2010 regulation, the State Board issued an interlocutory administrative order directing reappraisals of all properties in the Incline Village and Crystal Bay areas in which unconstitutional methodologies were used for the disputed tax years (hereinafter, Equalization Order).

         As required, the State Board submitted its report to the district court indicating that it had complied with the writ of mandamus. Village League objected to the report, arguing that the Equalization Order did not comply with the writ.[3] Village League also filed a petition for judicial review in the district court challenging the Equalization Order and the State Board's power to order reappraisals of properties for the 2003-04, 2004-05, and 2005-06 tax years.[4] Further, the taxpayers from the Bakst and Barta cases (collectively, Bakst intervenors), [5] whose property values for the disputed tax years had already been established, filed a motion to intervene in the district court action, arguing that the Equalization Order directing reappraisal of their properties threatened the previous final judgments. The district court granted the motion to intervene.

         The State Board moved to dismiss the petition for judicial review. The district court granted the motion because it concluded that the Equalization Order was interlocutory and review of the State Board's final decision would provide an adequate remedy. Village League appeals the dismissal of the petition for judicial review, arguing that the State Board does not have the authority to order reappraisals. The Bakst intervenors appeal, making issue and claim preclusion arguments, DISCUSSION

         I.

         As a threshold matter, the State Board argues that the district court properly refused to review the Equalization Order because it was a legislative action of general applicability, not an adjudicative action. The State Board and Washoe County also argue that this court lacks jurisdiction to consider this appeal because the district court did not enter a final, appealable judgment in a contested case. Finally, they maintain that neither Village League nor the ...


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