Sw. Allen Cnty. Fire Prot. Dist. v. City of Fort Wayne

142 N.E.3d 946

SOUTHWEST ALLEN COUNTY FIRE PROTECTION DISTRICT and Tera K. Klutz, in her official capacity as Auditor of Allen County, Indiana, Appellants-Defendants,

v.CITY OF FORT WAYNE, Appellee-Plaintiff.

Court of Appeals Case No. 19A-PL-510

Court of Appeals of Indiana.

FILED February 14, 2020

STATEMENT OF THE CASE

[1] Appellants-Defendants, the Southwest Allen County Fire Protection District (District) and Tera K. Klutz,¹ in her official capacity as Auditor of Allen County, Indiana (Auditor), appeal the trial court's

summary judgment in favor of Appellee-Plaintiff, the City of Fort Wayne (City), on the City's request for declaratory judgment to receive the tax revenues from Annexed Territories.²

[2] We affirm in part, reverse in part, and remand for further proceedings.

ISSUES

[3] The District raises two issues for our review, which we restate as:

(1) Whether the City is entitled to receive the tax revenue from the fire protection services it provided to annexed areas; and

(2) Whether the City is entitled to retroactive relief even though the City failed to exhaust its administrative remedies.

FACTS AND PROCEDURAL HISTORY

[4] The underlying facts were stated by this court in its disposition of the first appeal; therefore, we shall rely on City of Fort Wayne v. Southwest Allen County Fire Protection District , 82 N.E.3d 299 (Ind. Ct. App. 2017), trans. denied ( First Appeal ) for the recitation of the facts. The District is a fire protection district created in 1986 pursuant to state law. Beginning in December of 1987, the City effected a series of fifteen annexations of territory, formerly located within the District. The first of these annexations took effect in December 1987, with the most recent being on January 1, 2006. Following the effective date of these annexations, the Fort Wayne Fire Department (FWFD) provided fire protection services to the areas within the annexed territories (Annexed Territories) that formerly were serviced by the District. Subsequent to the annexations, neither the City, FWFD, or the FWFD Pension Fund received distributions of property tax revenue relating to the fire protection services from the Annexed Territories; rather, the Auditor continued to make these distributions to the District.

[5] By letter dated August 27, 2014, the City notified the District and the Auditor that pursuant to Indiana's annexation statutes—enacted in Ind. Code §§ 36-8-11-16 ; -22—once the areas that were part of the District were annexed by the City, and once the City began providing fire protection services to the Annexed Territories, the Annexed Territories were no longer part of the District and the property tax revenues derived from these Annexed Territories should have been redirected to the applicable City fire protection funds.

[6] Each year, the Department of Local Government Finance (DLGF) prepared a document, titled the 1782 Notice,³ and sent it to the City. The 1782 Notice is based on assessed values information provided by the Auditor. This information submitted by the Auditor includes an allocation of the values to be directed, among others, to specific City or District funds. The Auditor provided the total valuation of the Annexed Territories to the DLGF, based upon an understanding, rooted in an Unofficial Indiana Attorney General Advisory Letter of July 6, 1988, that informed that the District was grandfathered. Specifically, this Unofficial Letter advised that the annexing municipality cannot tax the annexed area within the fire protection district for fire protection services in order to avoid the risk of double taxation. Accordingly, the Auditor calculated the total assessed value of land within the boundaries of the District, including the assessments of the Annexed Territories. The Auditor did not include the Annexed Territories, now serviced by the FWFD, in the calculation of the total attributable to the City and the FWFD.

[7] On May 11, 2016, the City filed its Complaint for Declaratory and Other Relief against the District and the Auditor, seeking a declaration that the City is entitled to receive the property tax revenues of the Annexed Territories. On July 27, 2016, the Auditor filed her motion to dismiss Plaintiff's Request, arguing that the trial court did not have subject matter jurisdiction over the City's claim because the City had failed to exhaust the administrative remedies available to it. On August 8, 2016, the Auditor filed a complementary motion to dismiss, in which the Auditor sought a complete dismissal of the City's Complaint based on a lack of subject matter jurisdiction because the claims asserted fell within the exclusive jurisdiction of the Indiana Tax Court. The District joined in the Auditor's motions. On October 30, 2016, following a hearing, the trial court issued its Order, granting the Auditor's and the District's motions to dismiss.

[8] The City appealed. After conducting oral argument, this court issued the First Appeal, concluding that

the present case is an annexation case and requires no consideration of substantive tax law. The parties do not dispute the tax assessments and do not request a change in tax levies nor are the parties attempting to collect a tax. No calculation to determine a specific tax assessment must be made, and no interpretation of tax laws is required. Rather, the City's dispute merely centers on the intended recipient of taxes already assessed and collected, pursuant to I.C. § 36-8-11-22. This is not quintessentially a tax matter.

Id. at 304 (internal citation omitted). Accordingly, we held that subject matter jurisdiction was vested in the trial court and we remanded for further proceedings.

[9] On remand, the City sought partial summary judgment on December 11, 2018, as to the merits of its declaratory judgment request, seeking a declaration that the City is entitled to collect future tax revenues for the Annexed Territories. That same day, the District also moved for summary judgment, responding that the City cannot statutorily receive the future tax revenues of the Annexed Territories, and seeking a declaration that the relief requested by the City in its Complaint—reallocation of past, present, and future tax revenues—was not available as to any tax levy because the City had failed to exhaust its administrative remedies.

[10] On February 7, 2019, after a hearing, the trial court granted the City's motion for partial summary judgment and denied the District's requested relief. In its summary judgment, the trial court concluded:

The [c]ourt disagrees with the [District] as to which statute or statutes control. On appeal of this [c]ourt's October 30, 2016 Order of dismissal, the Indiana Court of Appeals concluded that this is an annexation case, and as such, the annexation statute I.C. § 36-8-11-22 controls. It is undisputed that the [District] had fire protection districts in the Annexed Territories, that the City has annexed the Annexed Territories, and that the City has provided fire protection services in the Annexed Territories. The [c]ourt concludes that I.C. § 36-8-11-22 plainly states that when a municipality annexes areas that are part of a fire protection district, and then provides fire services in the annexed areas, the fire protection district ceases to exist in those areas. Thus, by operation of the controlling statute, and as a matter of law, the [c]ourt concludes that the [District] has ceased to exist in the areas of the Annexed Territories.

The [District] makes the additional argument that the [c]ourt lacks the authority to grant the relief sought by the City. The [District] continues to argue that the City must seek an administrative remedy via the [DLGF] and thereafter appeal to the Indiana Tax Court. In the [First Appeal], the Indiana Court of Appeals summarized the [District's] arguments on appeal, which are identical to this second argument now being advanced by the [District] in its [m]otion for [s]ummary [j]udgment. The Court of Appeals concluded that this [c]ourt can grant relief "because the present case is an annexation case and requires no consideration of substantive tax law ..." Thus, "the trial court has subject matter jurisdiction to decide the City's request for declaratory judgment."

The determination of the Court of Appeals as to this legal issue is both binding on this [c]ourt and the appellate court in any subsequent appeal involving the same case and substantially the same facts. The [First Appeal] and its binding nature on legal issues facing the [c]ourt in this case, compels the [c]ourt to conclude that as a matter of law, this [c]ourt has the authority and subject matter jurisdiction to grant relief sought by the City. The City need not pursue a remedy through the DLGF.

(Appellant's App. Vol. II, pp. 18-19) (internal references omitted).

[11] The District now appeals. Additional facts will be provided if necessary.

DISCUSSION AND DECISION

I. Standard of Review

[12] In reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley , 891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied . Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. Id. at 607-08. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if it helps to prove or disprove an essential element of the plaintiff's cause of action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an opposing party's different version of the underlying facts. Ind. Farmers Mut. Ins. Group v. Blaskie , 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's...