Vriginia Garwood v. Indiana Department of State Revenue ( 2014 )

ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
STACY K. NEWTON GREGORY F. ZOELLER
JACKSON KELLY, PLLC ATTORNEY GENERAL OF INDIANA
Evansville, IN JOHN P. LOWREY
DEPUTY ATTORNEY GENERAL
Indianapolis, IN
_____________________________________________________________________
IN THE
INDIANA TAX COURT
_____________________________________________________________________
Dec 31 2014, 1:44 pm
VIRGINIA GARWOOD, )
)
Petitioner, )
)
v. ) Cause No. 82T10-1208-TA-46
)
INDIANA DEPARTMENT OF STATE )
REVENUE, )
)
Respondent. )
______________________________________________________________________
ORDER ON RESPONDENT’S MOTION FOR SUMMARY JUDGMENT
FOR PUBLICATION
December 31, 2014
FISHER, Senior Judge
Virginia Garwood has filed her second appeal with this Court, seeking a refund of
over $100,000 from the Indiana Department of State Revenue.1 The matter, currently
before the Court on the Department’s motion for summary judgment, concerns whether
the Department properly denied a portion of Garwood’s refund claim. The Court finds
1
On three separate occasions, the Court has discussed the facts and the procedural history
related to this appeal. See Garwood v. Indiana Dep’t of State Revenue (Garwood I), 939
N.E.2d 1150 (Ind. Tax Ct. 2010); Garwood v. Indiana Dep’t of State Revenue (Garwood II), 953
N.E.2d 682 (Ind. Tax Ct. 2011), review denied; Garwood v. Indiana Dep’t of State Revenue
(Garwood III), 998 N.E.2d 314 (Ind. Tax Ct. 2013). Accordingly, the Court will not restate the
facts and the procedural history in full a fourth time, but rather will present an abbreviated
version of them for purposes of this matter.
that the Department’s denial was not proper as a matter of law.2
FACTS AND PROCEDURAL HISTORY
The following facts are not in dispute. On June 2, 2009, the Department served
Garwood with several jeopardy tax assessments which provided that she owed
approximately $125,000 in sales tax, penalties, and interest on her sales of dogs for the
January 1, 2007 through April 30, 2009 tax period. When Garwood indicated that she
could not pay the liability, the Department seized 240 of her dogs pursuant to several
jeopardy tax warrants. The Department also seized $1,260 in cash and $1,325 in
uncashed checks pursuant to a search warrant issued by the Superior Court of Marion
County.
On June 3, 2009, the Department sold all 240 of the seized dogs to the U.S.
Humane Society for a total of $300.00. (See Pet’r Des’g Evid. Supp. Pet’r Resp. Opp’n
Resp’t Mot. Summ. J., Ex. C.) The Department subsequently applied half of the
proceeds from that sale to Garwood’s purported tax liability. 3 The Department,
however, did not apply the seized cash or checks to Garwood’s purported tax liability.
(See Resp’t Confd’l Des’g Evid., Ex. 3.) Several months later, Garwood remitted $25.48
to the Department for her purported tax liability, and the Department applied the
payment to her outstanding balance.
On June 29, 2009, Garwood filed her first appeal with this Court challenging the
validity of the jeopardy tax assessments. See Garwood v. Indiana Dep’t of State
2
Portions of the designated evidence are confidential; therefore, this order will only provide the
information necessary for the reader to understand its disposition of the issues presented. See
generally Ind. Administrative Rule 9.
3
Because the Department had also issued jeopardy tax assessments to Garwood’s daughter
on June 2, 2009, it applied the other half of the proceeds from the sale of the dogs to her
purported sales tax liability. See Garwood III, 998 N.E.2d at 316.
2
Revenue (Garwood I), 939 N.E.2d 1150 (Ind. Tax Ct. 2010) (order denying the
Department’s motion to dismiss for lack of subject matter jurisdiction). On August 19,
2011, the Court held that the jeopardy tax assessments were void as a matter of law
because they were not issued in accordance with Indiana Code § 6-8.1-5-3. See
Garwood v. Indiana Dep’t of State Revenue (Garwood II), 953 N.E.2d 682 (Ind. Tax Ct.
2011), review denied.
On August 29, 2011, Garwood filed a refund claim with the Department that
provided, in part:
I am attaching an appraisal of the value of my property as well as
the decision of the Indiana Tax Court. My dogs were appraised at
$122,650.00. I calculate my actual sales tax due as $1217.00 for
2008 and $1333.50 for 2009. In addition to taking the dogs[,] the
Department took $1260 in cash and uncashed checks totaling
$1325. Subtracting what I owed from what was seized[,] I am owed
a refund of $122,684.50.
(Resp’t Des’g Evid., Ex. 4 at Ex. A at 3.) In June 2012, the Department issued a check
to Garwood in the amount of $175.48. The Department subsequently issued a second
check to Garwood to compensate her for its seizure of $1,260 in cash and $1,325 in
uncashed checks. (See Resp’t Des’g Evid., Exs. 1-2.)
On August 27, 2012, Garwood initiated this appeal, challenging the Department’s
partial denial of her refund claim. (See Resp’t Des’g Evid., Ex. 4.) Nearly a year later,
the Department unsuccessfully moved to dismiss Garwood’s appeal on the basis that
the Court lacked subject matter jurisdiction. See Garwood v. Indiana Dep’t of State
Revenue (Garwood III), 998 N.E.2d 314 (Ind. Tax Ct. 2013). On December 2, 2013,
after its motion to reconsider was denied, the Department requested that the Court
certify Garwood III for interlocutory appeal. The Court denied the Department’s request
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on December 20, 2013. On June 3, 2014, the Department filed a Motion for Summary
Judgment. The Court held a hearing on December 5, 2014. Additional facts will be
supplied as necessary.
STANDARD OF REVIEW
Summary judgment is proper only when the designated evidence demonstrates
that no genuine issues of material fact exist and the moving party is entitled to judgment
as a matter of law. Ind. Trial Rule 56(C). When reviewing a motion for summary
judgment, the Court will construe all properly asserted facts and reasonable inferences
drawn therefrom in favor of the non-moving party. See Scott Oil Co. v. Indiana Dep’t of
State Revenue, 584 N.E.2d 1127, 1128-29 (Ind. Tax Ct. 1992).
ANALYSIS
The Department contends that it is entitled to judgment as a matter of law
because it has already “returned all [of the] monies [that] it obtained from Garwood, [and
therefore] there is nothing else left for [her] to receive from the Department.” (See
Resp’t Confd’l Mem. Supp. Mot. Summ. J. (“Resp’t Br.”) at 1.) The Department explains
that because a tax payment under Indiana Code § 6-8.1-8-14 cannot be made by
providing goods (i.e., animal inventory) or services to the Department, Garwood is
actually “seek[ing] compensatory damages . . . when she asks for more money than she
paid in tax.” (See Resp’t Confd’l Reply Supp. Mot. Summ. J. (“Resp’t Reply Br.”) at 1-
4.) (See also Resp’t Br. at 5-8; Hr’g Tr. at 3-6.) The Department contends that
Garwood’s claim for compensatory damages, arising from its sale of her animal
4
Indiana Code § 6-8.1-8-1 provides, in part, that “[a] person may make a tax payment: (1) in
cash; (2) by bank draft; (3) by check; (4) by cashier’s check; (5) by money order; (6) by credit
card, debit card, charge charge, or similar method; or (7) if approved by the department, by an
electronic fund transfer (as defined in IC 4-8.1-2-7).” IND. CODE § 6-8.1-8-1(a) (2011).
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inventory in Harrison County, should be litigated in the Harrison Circuit Court rather than
the Tax Court. (See Resp’t Reply Br. at 4; Hr’g Tr. at 14-15.) The Court, however, finds
these arguments unpersuasive.
First, on October 31, 2013, the Court already determined that it has subject
matter jurisdiction over Garwood’s appeal. See Garwood III, 998 N.E.2d at 318-21. As
the Indiana Supreme Court has explained, the “Legislature intended that all challenges
to the tax laws--regardless of the legal theory relied on--be tried in the Tax Court.” State
v. Sproles, 672 N.E.2d 1353, 1357 (Ind. 1996). Accordingly, Garwood may prosecute
her claim for compensatory damages, which was asserted concurrently with her refund
claim, in the Tax Court because it arose from the Department’s seizure and subsequent
sale of her animal inventory pursuant to invalid jeopardy tax assessments. See, e.g.,
Newby v. Indiana Dep’t of State Revenue, 826 N.E.2d 173, 175-77 (Ind. Tax Ct. 2005)
(upholding a taxpayer’s CSET assessment because it did not violate federal and state
double jeopardy prohibitions or the provisions of his plea agreement), review denied;
Harlan Sprague Dawley, Inc. v. Indiana Dep’t of State Revenue, 583 N.E.2d 214, 217
(Ind. Tax Ct. 1991) (stating that “a § 1983 claim, a federal civil rights tort, which arises
under the tax laws of Indiana and is [an] initial appeal from the final determination of a
state tax agency can only be determined in Indiana by the tax court”).
Moreover, Indiana’s notice pleading provision, Indiana Trial Rule 8(A), requires
“only ‘a short and plain statement of the claim showing that the pleader is entitled to
relief.’” Trail v. Girls & Boys Clubs of Nw. Indiana, 845 N.E.2d 130, 135 (Ind. 2006)
(citation omitted). Garwood’s petition alleges that she is entitled to relief because 1) the
Department seized property that was valued at $125,235; 2) Garwood filed a refund
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claim for $122,684.50; and 3) the Department only returned $175.48. (See Resp’t
Des’g Evid., Ex. 4 ¶¶ 4-9.) Garwood subsequently explained that the Department’s
allegedly improper “closed door” sale of her animal inventory to the U.S. Humane
Society pursuant to invalid jeopardy tax assessments entitles her to relief. (See Pet’r
Resp. Resp’t Mot. Summ. J. at 2-5; Hr’g Tr. at 7-8.) Consequently, even if the Court
found that the provision of goods or services does not constitute a tax payment under
Indiana Code § 6-8.1-8-1, the Department would not be entitled to an entry of summary
judgment because Garwood has presented a claim for which this Court can provide
relief. See Harlan Sprague, 583 N.E.2d at 224 (explaining that a taxpayer properly
invoked this Court’s jurisdiction and its judicial remedies by appealing the Department’s
denial of its refund claim concurrently with its § 1983 claim). As such, Garwood’s claim
for compensatory damages will be heard in the Tax Court without a jury. See IND. CODE
§ 33-26-6-1 (2014) (stating that the Court “shall try each original tax appeal without the
intervention of a jury”); State Line Elevator, Inc. v. State Bd. of Tax Comm’rs, 526
N.E.2d 753, 753-54 (Ind. Tax Ct. 1988) (holding that a taxpayer does not have a
constitutional right to a jury trial in a statutory proceeding).
CONCLUSION
For the above stated reasons, the Court cannot conclude that the Department
properly denied Garwood’s refund claim as a matter of law. Accordingly, the Court
DENIES the Department’s motion for summary judgment. The Court will issue, under
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separate cover, an order scheduling this matter for further proceedings.
SO ORDERED this 31st day of December 2014.
_____________________________
Thomas G. Fisher
Senior Judge, Indiana Tax Court
Distribution:
Stacy K. Newton, JACKSON KELLY, PLLC, 221 N.W. Fifth Street, P.O. Box 1507,
Evansville, IN 47706-1507;
Gregory F. Zoeller, Attorney General of Indiana, By: John P. Lowrey, Deputy Attorney
General, Indiana Government Center South, Fifth Floor, 302 West Washington Street,
Indianapolis, IN 46204-2770.
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