INDIANA TAX COURT
Tax – Township Tax Appeal
Union Township, St. Joseph County v. State of Indiana, Department of Local Government Finance
Union Township, St. Joseph County v. State of Indiana, Department of Local Government Finance
Indiana Tax Court Judge Martha Blood Wentworth had a few choice words for the Department of Local Government Finance in finding the state hadn’t answered the key question in a township’s tax appeal.
Wentworth ruled in favor of Union Township and Union-Lakeville Fire Protection territory in St. Joseph County, which claimed in tax levy appeals a $40 million assessed valuation error shortchanged the entities by almost $52,000 for the 2011 budget year.
“As an aside, the Court notes that this case demonstrates yet another instance where infirmities in the DLGF’s fact-finding process have hindered the Tax Court’s review of the final determination and certified administrative record. See also, e.g., City of Greenfield v. Indiana Dep’t of Local Gov’t Fin., 22 N.E.3d 887, 892 (Ind. Tax Ct. 2014); Gary Cmty. Sch. Corp. v. Indiana Dep’t of Local Gov’t Fin., 15 N.E.3d 1149, 1150 n.3 (Ind. Tax Ct. 2014).
“The Court strongly encourages the DLGF to correct these infirmities so that its adjudicatory process can develop all the relevant facts and legal arguments for possible review by the Court,” Wentworth wrote.
The court released concurrent opinions in favor of the township. Wentworth reversed DLGF final determinations denying the township’s appeals and remanded to the DLGF for further proceedings. The court in a separate opinion denied DLGF’s motion to dismiss the appeal.
Wentworth wrote the department erred in denying the township’s first excess levy appeal, because the shortfall would negatively impact its ability to fund budgets for the township and the fire protection territory. The township demonstrated it depleted its reserves to fund operating costs.
The DLGF also had not answered “‘the $40 million question:’ whether or not an ‘error’ existed,” Wentworth wrote “Here, it is abundantly clear what relief Union Township seeks: it wants to recoup the $51,992 in property tax revenue it was unable to collect in 2011 as a result of the $40 million discrepancy.”
Wentworth remanded to the DLGF to determine whether an error caused the $40 million discrepancy between the net assessed valuation used to certify the township’s budget and the net assessed valuation the county auditor used in issuing property tax bills.
The Legislature granted relief to the fire protection territory, which the DLGF argued mooted the township’s appeal. Wentworth rejected that argument because while the relief provided about $25,000 for the fire protection territory, it provided no relief for the township’s general fund, which claimed it was entitled to $27,000 it was shortchanged due to the assessment error.
Tax – Tax Refund/Timely Filing
J.S. Marten, Inc., Janice S. Marten, and Christopher M. Marten v. Indiana Department of State Revenue
The operators of a former jewelry store in central Indiana were unable to convince the Indiana Tax Court they are entitled to more than $160,000 in sales tax refunds.
J.S. Marten Inc., Janice S. Marten and Christopher M. Marten appealed the Indiana Department of State Revenue’s denial of their claim for refund of sales tax remitted for 2004, 2005 and 2006 tax years. They paid $162,529.11 in sales tax for those years in 2008; four years later, the Martens sought a refund of all but $132.77 that they remitted. The DOR denied the refund in October 2012 and the Martens initiated their tax appeal in January 2013.
The DOR argued that the tax court lacked subject matter jurisdiction over this appeal because the Martens didn’t timely file a claim for a refund of sales tax. But that does not doom the Tax Court from hearing the matter, as it has exclusive subject matter over all original tax appeals, Senior Judge Thomas Fisher pointed out. Subject matter jurisdiction does not depend on the sufficiency or correctness of the averments in the petition.
But the Martens’ failure to timely state a claim upon which relief can be granted does doom their appeal. They paid the sales taxes in question in 2008 but did not seek a refund until 2012. Statute requires a person to file a refund claim within three years of the due date of the return or the date of payment.
“The facts alleged in the Martens’ petition do not rebut the fact that their refund claim was not timely filed nor do they raise an alternative basis for relief,” Fisher wrote. “Accordingly, the Department’s Motion to Dismiss on the basis that the Martens failed to state a claim upon which relief can be granted is hereby GRANTED.”
INDIANA COURT OF APPEALS
Civil Plenary – Teachers’ Contracts
Jay Classroom Teachers Association v. Jay School Corporation and Indiana Education Employment Relation Board
Jay Classroom Teachers Association prevailed in an appeal contesting terms of a teachers’ contract adopted as the last best offer from Jay School Corporation.
The Indiana Court of Appeals ruled that the order of the Indiana Education Employment Relations Board affirmed by a trial court contained errors.
“We find ... a teacher can receive additional compensation for ancillary duties, and that covering another teacher’s class during the normal workday can be a compensable ancillary duty outside the scope of normal teaching duties – where both parties agreed to the same additional-compensation provision and included it in their respective LBOs,” Chief Judge Nancy Vaidik wrote for the panel.
Likewise, the panel ruled the board erred by permitting a practice in the Jay teachers’ contract that violated state law. The court ruled that a provision allowing the school superintendent to set salaries of teachers hired after the beginning of the school year “was impermissible and should have been stricken by the Board,” Vaidik wrote.
“Accordingly, we reverse the trial court and remand to the Board for further proceedings consistent with this opinion.”
Criminal – Revocation of Probation
Joshua T. Trammell v. State of Indiana
A Franklin County man who was ordered to spend five months in the Department of Correction after an alleged probation violation won a reversal of the trial court order for lack of evidence.
The Indiana Court of Appeals ruled that the state offered evidence that could not be judicially noticed as proof that a defendant had violated probation. The court in a footnote wrote the document was not presented to the trial court, and bears no date or the signature of the person who prepared it. The court granted the plaintiff’s motion to strike the document.
Joshua T. Trammell served a concurrent sentence for Class D felony convictions of theft and resisting law enforcement arising from separate causes disposed through a single plea agreement. A probation officer filed a notice of violation alleging he tested positive for opioids, but Trammell claimed he had a prescription.
“The standard of proof for revoking probation may be lower, but there still must be evidence from which the trial court can determine that an alleged violation occurred within the probationary period,” Judge Margret Robb wrote for the panel. “Such evidence is lacking here, and we are compelled to conclude the trial court abused its discretion in revoking Trammell’s probation.”
Mortgage Foreclosure – Refund
William C. Elliott and Mary Kay Elliott v. Dyck O’Neal, Inc., Successor in interest to Fifth Third Mortgage Company
A Court of Appeals panel wrote that justice demands an attack on an improper 2009 garnishment order and a refund to a couple that paid $50 a week in deficiency payments after losing their home to foreclosure.
The panel ordered plaintiffs be refunded more than $12,000 they were improperly ordered to pay.
Judges Rudolph R. Pyle III and Terry Crone reversed a trial court order denying plaintiffs’ motion for a refund. William and Mary Kay Elliott’s Evansville home was foreclosed upon in 2007, and an in rem judgment was entered. The home later sold at a sheriff’s sale, leaving a deficiency of about $16,900 on the mortgage.
Dyck O’Neal Inc. obtained interest in the deficiency and sued the Elliotts, winning a garnishment order in 2009. After representing themselves in the past, the Elliotts sought counsel who appealed the garnishment order and denial of a motion to correct error. The Elliotts argued that because the foreclosure order did not contain an in personam judgment, there was no basis for the garnishment.
“Here, in the foreclosure proceeding against the Elliotts, the trial court entered a default judgment and entered only an in rem judgment,” Pyle wrote for the majority, finding Dyck O’Neal “improperly initiated proceedings supplemental from the in rem judgment and sought an order for garnishment of wages. … (G)iven the specific facts of this particular case, we conclude that equity demands that the Elliotts are entitled to a refund, and we remand with instructions to determine the total amount paid by the Elliotts to Dyck O’Neal and enter an order for the refund of that amount including the applicable interest.”
Pyle wrote in a footnote that the ruling appears to be a collateral attack on the court’s garnishment order. “(W)e find there are ‘extraordinarily compelling reasons’ to address the merits of such an attack on that order, which improperly ordered the Elliotts to pay a deficiency judgment based on an in rem judgment in a foreclosure order.”
Judge Elaine Brown dissented and would affirm the trial court. “I would find no such extraordinarily compelling reasons exist in this case, especially given the long delay in the challenge to the propriety of the garnishment order,” she wrote, noting any challenges would be untimely.
The panel also affirmed the trial court’s denial of Dyck O’Neal’s motion to amend the foreclosure order to add an in personam judgment.
Criminal – Traffic Stop/OWI
Jeremy Darringer v. State of Indiana
A Hendricks County Sheriff’s deputy’s ignorance of where a temporary license plate can be displayed on a car led the Indiana Court of Appeals to overturn a drunken-driving conviction.
Deputy Nathan Hibschman pulled over a vehicle because it did not have a license plate on its bumper. However, after he made the traffic stop, he noticed a temporary tag taped to the car’s rear window but he mistakenly believed state statute required the tag to be placed on the bumper.
Approaching the driver, Jeremy Darringer, the deputy noticed a strong smell of alcohol and subsequently administered a sobriety test. Darringer failed that test.
Before his trial, Darringer filed a motion to suppress the evidence, arguing the deputy had no reason to make the initial stop. However, Hendricks Superior Judge Stephenie LeMay-Luken denied the motion on the grounds that the stop was appropriate because the temporary tag was not clearly visible even though it was in the proper place.
Darringer was convicted of operating a vehicle while intoxicated, a Class A misdemeanor.
On appeal, Darringer renewed his arguments that the state failed to prove the stop was based upon a reasonable suspicion that he committed a traffic violation or that the deputy made an objectively reasonable mistake justifying the stop.
The state countered the stop was proper because the plate was not clearly visible. The Court of Appeals found the record revealed the deputy did not even look anywhere else on the vehicle except the bumper.
Judge Elaine Brown wrote, “While Deputy Hibschman testified that he did not see a plate on the vehicle, he also repeatedly stated that he did not look in the rear window and did not look anywhere else other than the bumper. Accordingly, we cannot say that the facts known to Deputy Hibschman would have otherwise provided a basis for the stop based upon the idea that the interim plate in the rear window was not clearly visible, where Deputy Hibschman specifically testified that he did not look in the rear window.”
The Court of Appeals reversed Darringer’s conviction. Judge Patricia Riley concurred in result without opinion.
Civil Plenary – Transfer Penalty/FSSA
Ada Brown v. Indiana Family and Social Services Administration
Based on evidence presented that a Medicaid recipient’s home sold for $75,000 – the fair market value – and proceeds went back to the irrevocable trust that held legal title of the home, the Family and Social Services Administration incorrectly imposed a transfer penalty against the woman after it found the fair market value was $91,900, the Court of Appeals ruled.
Ada and Roy Brown executed the trust in 2000 and conveyed legal title of their home to the trust. It became irrevocable when the couple resigned from their trusteeships in October 2000. In 2008, Ada Brown moved into a nursing home and Roy Brown stayed in the home until they sold it in 2010 to their daughter for $75,000. The price was based on the sewer work the home needed.
Ada Brown filed for Medicaid benefits in July 2012 and was found eligible. If an applicant is found to be eligible, federal law requires the FSSA to “look back” 60 months from the date of the application to determine if any uncompensated or undercompensated transfers of assets were made. If a transfer of assets has occurred within the 60-month look-back period and that transfer was for less than the fair market value, a transfer penalty is imposed, and an institutionalized individual is ineligible for nursing-facility services during the penalty period, the court explained.
FSSA assessed Ada Brown a transfer penalty based on an assessment of the home of $91,900. Both the ALJ and trial court affirmed that decision based on the notion that the transfer of the assets occurred when the house was sold in 2010, which was during the look-back period of 60 months from the application date.
“With refreshing candor, the FSSA admits that the agency, the ALJ, and the trial court did not analyze this case properly under the trust statutes and regulations,” Chief Judge Nancy Vaidik wrote.
“Nonetheless, the FSSA argues that Ada is not entitled to relief because at the time she applied for Medicaid benefits in 2012 either (1) she was ineligible for the benefits because the trust held $75,000, the proceeds of the sale of the home, and those funds were available assets to her under the trust regulations; or (2) she was appropriately assessed a transfer fee because the funds from the sale in 2010 were not placed back into the trust or given to Ada, leading to an uncompensated transfer of funds and thus a transfer of assets within the look-back period; or (3) she owes a transfer fee, but a smaller one than was imposed, for selling her home for $75,000, which was $16,900 under the fair market value of $91,900.”
But her eligibility for Medicaid was not an issue at the agency level; only the transfer penalty is the issue. Evidence shows the trust received $75,000 in cash for the sale of the home and those funds were placed back into the trust. In addition, it’s unknown when the tax assessment used was made and Indiana-Medicaid-eligibility requirements require use of the most recent property tax assessment. Also, the evidence shows $75,000 was fair market value based on the work that needed done on the sewer system, the court held. The matter is remanded with instructions to vacate the transfer penalty.
Criminal – Probation Revocation
Robert Scott Hilligoss v. State of Indiana
The Indiana Court of Appeals found a man’s due process rights were violated because the state couldn’t prove he was advised of his constitutional rights at his probation revocation hearing. The appeals court ordered further proceedings on the matter, including reducing his period of probation to comply with statute.
Robert Scott Hilligoss was on probation for felony theft when the state sought to revoke his suspended sentence three times based on probation violations. Twice, the court extended his term of probation by a year after Hilligoss admitted to the violations. At the third revocation hearing, he admitted to the violation, his probation was revoked and the court ordered Hilligoss to serve the entire balance of his suspended sentence in the Department of Correction.
Hilligoss admitted to the third probation violation, but contends he was never advised of his rights to confrontation, cross-examination and representation by counsel, as required under I.C. 35-38-2-3(e).
“Because the record is silent with respect to whether Hilligoss was advised of his rights pursuant to Indiana Code Section 35-38-2-3(e) and (f), we must conclude that Hilligoss was not properly advised and, therefore, that he was deprived of his fundamental right to due process,” Judge Edward Najam wrote.
“Thus, we hold that a trial court’s failure to ensure that a probationer who admits to a probation violation has received the advisements as required under Indiana Code Section 35-38-2-3(e) constitutes a fundamental violation of the probationer’s due process rights.”
The judges also held the court erred in extending his probation by more than one year beyond the original term of probation, a violation of I.C. 35-38-2-3(h)(2). They reversed the revocation of Hilligoss’ probation and remanded for further proceedings. The court is required to hold an evidentiary hearing on Hilligoss’ alleged probation violation, or if he admits to the violation, make a record to reflect that he has been properly advised of his rights. Also, the court shall reduce his probation period by six months to bring it into compliance with the statute.
Criminal – Intimidation/Police
Tyrone Causey v. State of Indiana
The Indiana Court of Appeals held that a man who threatened to shoot officers dispatched to his home did not commit intimidation as defined by the statute.
Indianapolis Metropolitan Police officers Juanita Wilkins and Michael Faulk responded to a call regarding a disturbance at Tyrone Causey’s home. When they arrived, they saw the glass on the outer storm door was broken, but did not hear anything. Causey told officers everything was fine, he refused to step out of his home or let them in, and said he was alone in the home. While the officers waited for backup to arrive, Causey opened the door and yelled for them to get off his property and “If you come any closer I’ll shoot.” He continued to yell in an unintelligible manner at the officers and was later arrested for Class D felony intimidation and convicted by a jury.
Causey maintained the evidence is insufficient to support his conviction, citing I.C. 35-45-2-1. The statute finds one commits intimidation if the threat has the intent to place the other person in fear of retaliation for a prior lawful act.
Causey claimed he was attempting to prevent the officers from taking future action when he threatened them, not that he was trying to place them in fear of retaliation for having responded to a disturbance. The appellate judges agreed, finding Causey’s “If you come any closer I’ll shoot” statement to be conditional.
They also held Causey’s unintelligible rant could not support the conviction.
“As a general matter, we agree that one should not threaten a police officer. However, such behavior, in and of itself, does not constitute intimidation as defined by the statute. Here, the State has not clearly identified what it believes Causey’s threat to be, nor has it pointed to evidence indicating that this threat was made with the required intent,” Judge John Baker wrote.
Criminal – Sentence
Ralph Jackson v. State of Indiana
A man who was ordered to serve 20 years – the maximum sentence for a Class B felony – after not completing a drug court program due to smoking Spice will be resentenced. The Indiana Court of Appeals found the trial court selected his sentence based on his failure to complete the program.
Ralph Jackson pleaded guilty in 2010 to Class B felony dealing in a Schedule II controlled substance, and as part of his plea, he was to participate in the Howard County Drug Court program. His sentencing was deferred pending completion of the program. But Jackson’s participation was terminated after it was alleged he smoked Spice and drove another drug court participant to purchase Spice.
The probation department and Jackson sought a 10-year sentence, but the trial court imposed the maximum sentence of 20 years. The judge, when sentencing Jackson, explained he imposed the enhanced sentence because of Jackson’s drug use while in the drug court program and his helping a fellow participant obtain drugs. The judge did not issue a sentencing statement that addressed the specific facts relating to Jackson’s crime for which he was being sentenced. Jackson had sold 10 methadone pills for $81.
“The sparse sentencing statement does not facilitate an independent review of the nature of the offense and the character of the offender,” Judge L. Mark Bailey wrote.
“Although a sentencing court has options vis-á-vis the execution of a sentence, including such things as community placements, work release, home detention, drug court participation and the like, the trial court does not have the option of selecting a sentence based solely on the defendant’s conduct apart from the circumstances of the crime. Because the trial court did not issue an adequate sentencing statement, it abused its sentencing discretion.”
The case is remanded for the trial court to sentence Jackson on the felony, accompanied by a sentencing statement that is adequate to facilitate appellate review.•