Beatley v. D.C.

314 A.3d 51

Kirk BEATLEY, et al., Appellants,

v.DISTRICT OF COLUMBIA, Appellee.

No. 22-TX-0762

District of Columbia Court of Appeals.

Submitted November 14, 2023

Decided January 11, 2024

As amended May 23, 2024^*

Appeal from the Superior Court of the District of Columbia (2018-CVT-000035), (Hon. Laura A. Cordero, Trial Judge)

Kevin E. Byrnes, Washington, DC, was on the brief for appellants.

Brian L. Schwalb, Attorney General for the District of Columbia, Caroline S. Van Zile, Solicitor General, Ashwin P. Phatak, Principal Deputy Solicitor General, Carl J. Schifferle, Deputy Solicitor General, and James C. McKay, Jr., Senior Assistant Attorney General, were on the brief for appellee.

Before Howard and Shanker, Associate Judges, and Thompson, Senior Judge.

Thompson, Senior Judge:

This matter is an appeal from the Superior Court Tax Division’s dismissal of an action brought by homeowners/taxpayers/appellants Kirk Beatley and Lisa Holden in April 2018 challenging the validity of a (corrected) special assessment levied against their property in January 2016. The Tax Division dismissed the action as untimely filed under D.C. Code § 47-3303. We hold on the particular facts of this case that the action should not have been dismissed as untimely even though it was commenced considerably more than six months after the corrected special assessment was imposed. Accordingly, we reverse and remand for further proceedings.

I.

The complaint in this matter alleges (or documents in the record show) the following: Initially, appellee District of Columbia (the "District") levied a special assessment (in the amount of $15,146.63) on appellants’ property on January 2, 2015. The assessment amount purportedly was the cost incurred by the District in paying a contractor to perform emergency repairs to appellants’ residence in December 2014 pursuant to D.C. Code § 42-3131.01.¹ Appellants contend that the contractor performed unnecessary repairs; that the contractor’s invoice exaggerated the charges for the work and that the assessment was "unsubstantiated and fraudulent;" that the assessment was levied fewer than four business days after completion of the work, such that appellants had no opportunity to contest the assessment; that the unnecessary repairs and appellants’ efforts to resolve the situation caused them to place a temporary hold on renovations that had been underway at the residence; and that the temporary hold then led the District to improperly classify the residence as a vacant property for real property tax purposes and to levy a large increase in the real property tax on the residence "at the highest tax rate" for tax year 2017.

In response to appellants’ inquiries and complaints, DCRA eventually produced the contractor’s invoice and, on the evening of January 15, 2016—after telling appellants on January 10, 2016, that she would review the special assessment and receiving appellants’ January 11, 2016, reply email in which they communicated that they "look[ed] forward to discussing" with DCRA the particular facts of their complaints about "fraud and corruption"—the DCRA Director notified appellants that it had imposed a corrected special assessment. Days before the Director sent appellants the January 15 notice, i.e., on January 12, 2016, the DCRA had filed a lien in the Office of the Recorder of Deeds on the basis of the corrected special assessment. The District’s Office of Tax and Revenue ("OTR") subsequently required appellants to pay the corrected special assessment amount as a condition of correcting an erroneous tax classification of appellants’ property as a vacant or nuisance property. Appellants paid the corrected special assessment amount (totaling $17,047.88, including accrued interest and fees) in November 2017 and then brought an action in the Superior Court on April 13, 2018, seeking a refund of the amount they paid, recovery of their "costs in renovating the [property after the unnecessary and improper repairs," and a review of the contractor’s invoice and a "refund for those charges that were illegally and improperly assessed[.]"

[1, 2] The Superior Court Tax Division, to which the case had been transferred, twice dismissed the homeowners’ action. Initially, accepting an argument that had been advanced by the District, the court dismissed the action on the ground that appellants had failed to exhaust their administrative remedies and that the court therefore lacked jurisdiction over appellants’ claim for a refund of the assessment amount. After appellants appealed to this court from that dismissal, the District changed its position, asserted that appellants had no available administrative remedy that they could have been required to exhaust, and asked this court to remand the case to the Superior Court for a decision on the merits. On remand from this court, the Superior Court Tax Division again dismissed, accepting the District’s new argument that the Superior Court lacked subject matter jurisdiction because appellants had failed to bring their action within six months after the assessment, as required by D.C. Code § 47-3303. The appeal presently before us seeks review of that dismissal order. Our review is de novo.²

II.

The special assessment in this case was imposed pursuant to D.C. Code § 42-3131.01. The District asserted in its motion for remand in the first appeal that the assessment was imposed pursuant to Section 42-3131.01(a)(1), which provides as follows:

[W]henever the owner of any real property in the District of Columbia shall fail or refuse, after the service of reasonable notice in the manner provided in § 42-3131.03, to correct any condition which exists on or has arisen from such property in violation of law or of any regulation made by authority of law, with the correction of which condition said owner is by law or by said regulation chargeable, or to show cause, sufficient in the judgment of the Mayor of said District, why he should not be required to correct such condition, then, and in that instance, the Mayor of the District of Columbia is authorized to: Cause such condition to be corrected; assess the fair market value of the correction of the condition or the actual cost of the correction, whichever is higher, and all expenses incident thereto (including the cost of publication, if any, herein provided for) as a tax against the property onwhich such condition existed or from which such condition arose, as the case may be; and carry such tax on the regular tax rolls of the Distinct, and collect such tax in the same manner as general taxes in said District are collected[.]

Id. The District’s brief in this appeal, however, suggests—and it seems to us—that the special assessment in the instant case was (as appellants assert) imposed pursuant to D.C. Code § 42-3131.01(c)(1). Section 42-3131.01(c)(1) authorizes the Mayor "to take emergency action, including putting in temporary safeguards, without prior notification when the Mayor determines there is imminent danger due to an unsafe condition and immediate emergency action is necessary to alleviate the danger," id. § 42-3131.01(c)(1)(B); permits the Mayor to "assess all reasonable costs of correcting the condition … as a tax against the property," id. § 42-3131.01(c)(1)(D)(ii); and provides that "[a] tax placed against a property pursuant to this subsection shall be carried on the regular tax rolls and collected in the same manner as real estate taxes are collected." id. § 42-3131.01(c)(1)(D)(iii). Section 42-3131.01 does not define the term "collected," but our case law accepts that the tax collection process includes the process whereby proposed tax assessments are appealed before they are finalized.³

In the District of Columbia, real estate taxes are collected through a process whereby an assessment is announced; taxpayers have an opportunity to challenge the assessment through a multi-level administrative review; and there is a final assessment only after exhaustion of such administrative-review remedies (or after the deadline for pursuing them has passed). See D.C. Code § 47-825.01a(d)(1) and (3), (e), and (g)(1) (providing for administrative review by OTR of a property’s proposed assessed value or classification, appeal of the proposed assessed value or classification to the Real Property Tax Appeals Commission ("RPTAC") within forty-five days of the notice of the OTR determination, and appeals to the Superior Court by "an owner aggrieved by a proposed assessed value or classification," "provided, that the owner shall have in good faith first appealed the assessed value or classification to the Commission immediately preceding the appeal to the Superior Court" "in the same manner and to the same extent as provided in §[ ] 47-3303").⁴

Section 47-3303 provides that:

Any person aggrieved by any assessment by the District of any personal property, inheritance, estate, business privilege, income and franchise, sales, alcoholic beverage, gross receipts, gross earnings, insurance premiums, or motorvehicle fuel tax or taxes, or penalties thereon, may within 6 months after the date of such assessment appeal from the assessment to the Superior Court of the District of Columbia; provided, that such person shall first pay such tax together with penalties and interest due thereon to the D.C. Treasurer. The mailing to the taxpayer of a statement of taxes dueshall be considered notice of assessment with respect to the taxes. …

Id. Section 47-3303 does not explain what date is to be treated as the "date Of [the] assessment."⁵ As the above block quote shows, and as the District noted in its petition for rehearing, the statute does provide that "[t]he mailing to the taxpayer of a statement of taxes due shall be considered notice of assessment with respect to the taxes." Id. However, that provision governs the date of notice to the taxpayer, not the operative date of an assessment for purposes of an appeal to the Superior Court. For purposes of...