Rosalind Peychaud, Neal Morris & Mktg., LLC v. Williams

337 So.3d 957

Rosalind PEYCHAUD, Neal Morris as Officer and Member of New Orleans Apartment Management and Marketing, LLC

v.Erroll WILLIAMS, in His Official and Individual Capacity as the Assessor of Orleans Parish, The Louisiana Tax Commission, and Normal White in His Capacity as the Chief Financial Officer for the City of New Orleans and Department of Finance

NO. 2021-CA-0686

Court of Appeal of Louisiana, Fourth Circuit.

APRIL 6, 2022

Clara Joyce Potter, Anjana Joshi, SOUTHERN POVERTY LAW CENTER, 201 St. Charles Avenue, Suite 2000, New Orleans, LA 70170 and Pierre G. Walker, III, REASONOVER & BERG, LLC, 400 Poydras Street, Suite 1980, New Orleans, LA 70130, COUNSEL FOR PLAINTIFF/APPELLANT

John J. Weiler, Reese F. Williamson, WEILER & REES, LLC, 909 Poydras Street, Suite 1250, New Olreans, LA 70112 And Galen S. Brown, SULLIVAN STOLIER & KNIGHT LLC, 909 Poydras Street, Suite 2600, New Orleans, LA 70112 And Franklin "Drew" Hoffmann, FAIRCLOTH MELTON SOBEK & BASH, LLC, 9026 Jefferson Highway, Suite 200, Baton Rouge, LA 70809, COUNSEL FOR DEFENDANTS/APPELLEES

(Court composed of Judge Roland L. Belsome, Judge Daniel L. Dysart, Pro Tempore Judge Madeline Jasmine )

Pro Tempore Judge Madeline Jasmine

This appeal arises from a challenge to the assessment of ad valorem property taxes for certain commercial properties owned by plaintiffs. On appeal, plaintiffs seek review of the trial court's granting of an exception of prescription in favor of defendants, who also filed an answer seeking review of the trial court's denial of their exceptions of lack of subject matter jurisdiction. For the reasons expressed below, we find the trial court does not have original jurisdiction over the instant litigation. We therefore reverse the trial court's denial of the defendants’ exception of lack of subject matter jurisdiction and dismiss with prejudice Plaintiffs’ claims against Defendants. Furthermore, in light of our ruling and the dismissal of Plaintiffs’ claim, the issue of prescription is rendered moot; and consequently, we pretermit discussion of the issue on appeal.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In the instant appeal, Rosalind Peychaud ("Peychaud") and Neal Morris ("Morris"), in his capacity as the officer and member of New Orleans Apartment Management and Marketing, LLC ("Apartment Management") ("collectively Plaintiffs") filed suit against Assessor Erroll Williams ("Assessor Williams"), in his capacity as the Assessor of Orleans Parish, the Louisiana Tax Commission ("LTC"), and Norman White, in his capacity as the Chief Financial Officer for the City of New Orleans and Department of Finance. Plaintiffs alleged that Assessor Williams failed to use one of the statutorily required methodologies to assess the property taxes for the 2021 tax year and disputed the value of the taxes they were assessed.

Peychaud owns a residential property at 2626 Milan Street, and her 2021 Orleans Parish ad valorem tax bill was $5,234.87. On February 25, 2021, she paid her tax bill under protest, the protested portion of which was $427.69. Apartment Management is the owner of two adjoining parcels of immovable property: a warehouse located at 3521 S. Liberty Street and an unimproved lot located at 3527 S. Liberty Street. Apartment Management's 2021 Orleans Parish ad valorem tax bill was $2880.00 for the warehouse and $500.95 for the unimproved lot. Morris paid Apartment Management's tax bills under protest on February 26, 2021, the protested portions of which were $235.30 and $40.94, respectively, for a total of $276.24.

On March 26, 2021, Plaintiffs filed their petition alleging Assessor Williams: (1) violated La. R.S. 47:2323, which sets forth the three types of appraisal methods that may be used in determining tax assessments; (2) violated the state constitutional requirement of uniformity for allegedly taxing Plaintiffs’ properties differently than other commercial properties, such as hotels in Orleans Parish; and (3) violated the state and federal constitutional requirement of equal protection for not taxing Plaintiffs’ properties the same as certain commercial properties in Orleans Parish.¹

On April 16, 2021, LTC filed its answer to the petition. On April 27, 2021, Assessor Williams filed several exceptions, including an exception of lack of subject matter jurisdiction and an exception of prescription.² Assessor Williams claimed Plaintiffs’ petition constitutes a correctness challenge to their property assessments and that they must first file their claim with the parish governing authority, then with the LTC before filing suit. In that Plaintiffs failed to do so, Assessor Williams argued that the trial court lacks jurisdiction over their claims. Assessor Williams further asserted that Plaintiffs’ challenge to the assessments were prescribed because they failed to file an appeal with the Board of Review within the time periods provided by La. R.S. 47:1992(C). Alternatively, Assessor Williams averred that if the trial court determined that Plaintiffs’ action was a legality challenge, their claims are prescribed because they did not pay their taxes before February 1, 2021, pursuant to La. R.S. 47:1997(B).

LTC also filed an exception of lack of subject matter jurisdiction, joining and adopting the arguments Assessor Williams raised in his exception. Thereafter, Norman White, in his capacity as the CFO for the City of New Orleans, filed an answer and incorporated several exceptions, including an exception of lack of subject matter jurisdiction.

On June 16, 2021, Plaintiffs filed an opposition to the exceptions. Plaintiffs argued that their claims are legality challenges because they alleged the tax assessments "suffer radical defects because they were undertaken entirely outside of Assessor Williams’ authority as an assessor, and thus are altogether void." Plaintiffs additionally argued that they preserved their rights by timely paying their property taxes under protest pursuant to La. R.S. 47:2134(C) "within the deadline set by the City of New Orleans acting as the lawful tax collector." Plaintiffs alleged that while taxes are generally due by January 21, for 2021, the City extended the deadline to February 28, 2021 and the delinquency date to March 1, 2021, for paying property taxes and resolving any tax issues. Plaintiffs further claimed that because they paid their taxes before February 28, 2021, they timely paid their taxes. Alternatively, Plaintiffs averred that their claims are not prescribed under the doctrine of contra non valentem .³ Plaintiffs also filed a motion for leave to amend the petition, seeking to include additional claims and add factual allegations responsive to the exceptions.

A hearing on the exceptions was held on June 24, 2021, wherein the trial court provided reasoning on the record. The trial court concluded that Plaintiffs’ claims constitute a legality challenge. Consequently, because a legality challenge can be filed directly with the trial court, it had jurisdiction over Plaintiffs’ lawsuit and denied the exceptions of lack of subject matter jurisdiction. Addressing the exception of prescription, the trial court found Plaintiffs did not timely pay the disputed portion under protest in accordance with La. R.S. 47:1997(B). It reasoned that while the City may extend the deadline for tax collection for its own enforcement, the City lacks authority to alter the deadlines for a timely legality challenge set forth by state statutes. The trial court therefore found Plaintiffs failed to preserve their legality challenge. It also determined that the doctrine of contra non valentem did not apply in this case. Accordingly, the trial court granted the exception of prescription and dismissed Plaintiffs’ claims. The trial court deemed the remaining exceptions as moot and denied Plaintiffs’ motion to amend the petition as moot.

Subsequently, Plaintiffs filed a motion for reconsideration of the denial of their motion for leave to amend the petition as moot, which the trial court denied on July 2, 2021. On the same date, the trial court issued the judgment on the exceptions, denying the exceptions of lack of subject matter jurisdiction and granting the exception of prescription and dismissed Plaintiffs’ claims with prejudice.⁴

It is from the trial court's July 2, 2021 judgment that Plaintiffs seek this Court's appellate review. Additionally, Assessor Williams and LTC filed answers to the appeal seeking review of the trial court's denial of their exceptions of lack of subject matter jurisdiction.

DISCUSSION

Plaintiffs raise three assignments of error, the substance of which overlap significantly. Although Plaintiffs’ appeal challenges the correctness of the trial court's granting of the exception of prescription, their arguments focus on the trial court's denial of the motion for leave to amend the petition as moot. Plaintiffs contend that the allegations set forth in their amended petition demonstrated that their claims had not prescribed; that the grounds for granting the exception for prescription could be removed by amendment; and that they were entitled to amend as a right because Assessor Williams, who alone brought the exception of prescription, had not yet answered the petition.

Defendants aver, in their brief and answer to the appeal, that the trial court lacked subject matter jurisdiction over Plaintiffs’ lawsuit because Plaintiffs’ petition constitutes a correctness challenge rather than a legality challenge. In that the trial court must have jurisdiction over Plaintiffs’ claims before it can render a decision on an exception of prescription, we address the jurisdictional issue first.

Subject Matter Jurisdiction

An exception of lack of subject matter jurisdiction is a question of law and is subject to de novo review. Ryan Gootee Gen. Contractors, LLC v. Plaquemines Parish Sch. Bd. & One Constr., Inc. , 15-325, p. 9 (La. App. 5 Cir. 11/19/15), 180 So.3d 588, 595.

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