In re Target Corp.

501 P.3d 910 (Table)

In the MATTER OF the Equalization Appeal of TARGET CORPORATION, Dayton Hudson Corporation, and Eighth Street Development Company for the 2016 Tax Year in Johnson County, Kansas.

No. 119,228

Court of Appeals of Kansas.

Opinion on remand filed January 14, 2022.

Kathryn D. Myers and Ryan Carpenter, assistant county counselors, for appellant Board of Johnson County Commissioners.

Linda Terrill, of Property Tax Law Group, LLC, of Overland Park, and R. Scott Beeler and Carrie E. Josserand, of Lathrop Gage LLP, of Overland Park, for appellees.

Before Arnold-Burger, C.J., Green and Buser, JJ.

MEMORANDUM OPINION

Per Curiam:

This case returns to our court upon remand by the Kansas Supreme Court. See In re Equalization Appeal of Target Corp. , 311 Kan. 772, 466 P.3d 1189 (2020). Target Corporation, Dayton Hudson Corporation, and Eighth Street Development Company (collectively Taxpayers) appealed from Johnson County's (County) 2016 ad valorem tax valuations on seven commercial properties. The Board of Tax Appeals (BOTA) issued a summary decision with lower valuations than assessed by the County.

Generally, an aggrieved party must request a full and complete opinion from BOTA within 14 days of the summary decision before BOTA's order becomes final and subject to review on appeal. The Taxpayers requested a full and complete opinion from BOTA, but after the time to request a full and complete opinion had expired, the Taxpayers withdrew their request. The County, which did not separately request a full and complete opinion, objected to the Taxpayers' withdrawal of their request because it effectively cut off the County's ability to appeal. When BOTA declined to issue a full and complete opinion, the County appealed.

Our court dismissed the County's appeal, finding that we did not have jurisdiction to consider whether BOTA erred in declining to issue a full and complete opinion. The Kansas Supreme Court reversed that decision and remanded the case for our court to determine whether BOTA acted properly in failing to issue a full and complete opinion.

On remand, we hold that under the circumstances, BOTA's actions in not issuing a full and complete opinion were unreasonable and constituted error. We reverse BOTA's order and remand the case with directions to issue a full and complete opinion.

FACTUAL AND PROCEDURAL BACKGROUND

The Taxpayers own commercial real estate in the County. They appealed the County's ad valorem tax valuations for the 2016 tax year on seven commercial properties. BOTA issued a summary decision on February 20, 2018, that lowered the County's valuations on the Taxpayers' properties.

Within a week, the Taxpayers filed a request for a full and complete opinion. The County did not file a separate request. On March 27, 2018, after the time to request a full and complete opinion had expired, counsel for the Taxpayers emailed BOTA and stated:

"I have confirmed with BOTA counsel that the only Request for a Full & Complete Opinion in the Johnson County Target cases was from the Taxpayer.

....

"Relying on that confirmation from BOTA , the taxpayer withdraws its request for a Full & Complete Opinion in each of the above matters, which withdrawal results in the matters being permanently closed."

The next day, the County filed an objection to the Taxpayers' attempt to withdraw their request for a full and complete opinion. The County characterized the Taxpayers' request as a motion to dismiss and asserted that BOTA had no discretion to determine whether to grant the request. The County asserted that the Taxpayers' request was designed to prejudice the County because the Taxpayers waited to make their request until after the time for the County to make its own request had expired. The County concluded by asking BOTA to issue a full and complete order or, at the very least, to reconsider its summary decision. In reply, the Taxpayers argued that the County lost its right to appeal when it failed to file a timely request for a full and complete opinion.

BOTA responded with an order titled "Order Denying Reconsideration." BOTA found "that the County has not provided a legal or statutory basis to show that the Taxpayers have no right to voluntarily withdraw their request for a full and complete opinion." Further, BOTA held that the County's motion for reconsideration was untimely.

The County appealed to our court. Its petition for judicial review specified that it was appealing from (1) BOTA's failure to issue a full and complete opinion, (2) the Order Denying Reconsideration, and (3) the summary decision. The Taxpayers moved for involuntary dismissal of the petition, arguing that this court lacked jurisdiction to consider the appeal because the County failed to timely request a full and complete opinion. The County objected to the motion for involuntary dismissal. We granted the Taxpayers' motion for involuntary dismissal and denied the County's later motion for rehearing or modification.

The Kansas Supreme Court granted the County's petition for review. In its opinion, the court affirmed in part and reversed in part our court's decision. The Supreme Court affirmed the dismissal of the appeal as it pertained to the County's effort to obtain judicial review of the summary decision. 311 Kan. at 781. But, it found the Court of Appeals "erred when it concluded it lacked jurisdiction over the County's petition for judicial review to the extent the petition alleges BOTA illegally failed to timely issue a full and complete opinion." 311 Kan. at 780. The Supreme Court explained that under the Kansas Judicial Review Act, judicial review of nonfinal actions is appropriate where a person is aggrieved by the failure of an agency to act in a timely manner or as otherwise required by law. 311 Kan. at 776-77 ; see K.S.A. 77-631. The Supreme Court remanded the case to our court with directions "to consider whether the Board acted properly in failing to issue a full and complete opinion." 311 Kan. at 780.

JURISDICTION

The Kansas Supreme Court relied on K.S.A. 77-631 in concluding that our court has jurisdiction to review the County's allegation that BOTA acted improperly in failing to issue a full and complete opinion. This statute provides: "A person aggrieved by the failure of an agency to act in a timely manner as required by K.S.A. 77-526 or 77-549, and amendments thereto, or as otherwise required by law, is entitled to interlocutory review of the agency's failure to act." K.S.A. 77-631.

The Taxpayers dedicate several pages of their brief to arguing that the County is not "aggrieved" within the meaning of K.S.A. 77-631. They assert that our Supreme Court found "the County may have been aggrieved by BOTA's finding that it did not meet its burden of proving the valuations it sought for Taxpayer's property," but the County "certainly cannot claim it was aggrieved by BOTA's failure [to] fulfill the Taxpayer's request for a Full and Complete Opinion, which the Taxpayer later withdrew, when the County did not make any such request." The Taxpayers fault the County for failing to address this point in its appellant's brief.

The problem with the Taxpayers' argument is that it misreads our Supreme Court's opinion. The County was not required on remand to address why it was "aggrieved" within the meaning of K.S.A. 77-631 because the Kansas Supreme Court already decided that issue. While considering whether jurisdiction existed to review BOTA's refusal to issue a full and complete opinion, the court held that "BOTA's inaction, i.e., a failure to act, can only be considered an interlocutory (nonfinal) decision." 311 Kan. at 777. Accordingly, the court looked to the rules governing review of nonfinal actions, primarily K.S.A. 77-631. 311 Kan. at 776.

In considering whether K.S.A. 77-631 established jurisdiction for review of the County's claims, the Kansas Supreme Court specifically considered "whether the County is ‘aggrieved’ by BOTA's failure to act, as K.S.A. 77-631(a) requires." 311 Kan. at 778. It acknowledged but rejected the Taxpayers' argument that the County could not be aggrieved by BOTA's failure to issue a full and complete opinion because the County did not make its own request for a full and complete opinion. The Supreme Court stated that "this argument lacks a basis in K.S.A. 74-2426(c) because nothing in the statute restricts the right to judicial review in the Court of Appeals to only those parties who request a full and complete opinion." 311 Kan. at 778. The Supreme Court concluded that the County was "aggrieved by BOTA's failure to issue a full and complete opinion because that inaction cuts off the County's right to seek judicial review of BOTA's lower valuation determinations." 311 Kan. at 779. In remanding the case to our court, the Supreme Court "emphasize[d] the limited scope of the Court of Appeals' inquiry on remand," noting that " K.S.A. 77-631(a) provides only for ‘review of the agency's failure to act’ " and not the summary decision. 311 Kan. at 780.

In summary, the Kansas Supreme Court clearly held that the County was "aggrieved" within the meaning of K.S.A. 77-631. If it had not, then it would not have found that this court had jurisdiction to consider whether BOTA erred in refusing to issue a full and complete opinion. For these reasons, the Taxpayers' jurisdictional argument is unpersuasive.

DID BOTA ACT PROPERLY IN FAILING TO ISSUE A FULL AND COMPLETE OPINION ?

The sole issue before our court on remand is whether BOTA erred in failing to timely issue a full and complete opinion. In re Equalization Appeal of Target Corp. , 311 Kan. at 780. The County makes three arguments. First, it asserts that BOTA erroneously applied the law when it failed to issue a full and complete opinion because the clear, unambiguous language of K.S.A. 74-2426 requires BOTA to issue a full and complete opinion once it has been requested unless the taxpayer appeals to the district court. Second, the County claims that BOTA should have...