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COA to hear arguments in fire departments’ tax, annexation dispute

July 24, 2017

The Indiana Court of Appeals will hold oral arguments this week to determine whether a trial court has jurisdiction to hear a Fort Wayne case that involves questions of both annexation and tax laws.

A panel of judges Edward Najam, Patricia Riley and Cale Bradford will hear City of Fort Wayne v. Southwest Allen County Fire Protection District, et al, 02A05-1612-PL-02883, on Wednesday. The case stems from a dispute between the City of Fort Wayne Fire Department and the Southwest Allen County Fire Protection District, which each claim tax revenues from an annexed property located in the Southwest Fire District legally belong to them.

After the property was annexed in 1987, the city fire department claims it began providing fire protection services, thus giving it the right to claim the tax revenues derived from the area. But Allen County Auditor Tera Klutz and the Southwest Fire District instead argued that state statute requires the tax revenues to continue being allocated to the Southwest Fire District.

However, the current appeal arises not from the question of who should receive the revenues, but rather where the dispute between the parties should be resolved. According to Allen Superior Judge Craig J. Bobay, the central issues in the case are grounded in tax law, depriving him of jurisdiction to hear the case.

Specifically, Bobay wrote in a December opinion that the City of Fort Wayne must first take its complaint to the Department of Local Government Finance, then bring the case before the Indiana Tax Court if it is not satisfied with the DLGF’s decision. Both Klutz and the Southwest Fire District make a similar argument in their briefs on appeal, pointing to the case of State ex rel. Zoeller v. Aisin USA Manufacturing, Inc. 946 N.E.2d 1148, 1152-1153 (Ind. 2011).

The city fire department, however, claims its case actually presents a question of annexation law, an area within the jurisdiction of the trial court. It bases its case on Indiana Code section 36-8-11-16, which the city claims falls under a section of state code dealing with local governments, not taxation.

The case will come before the appellate panel at 1:30 p.m. Wednesday in the Indiana statehouse courtroom.

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