Visteon Corp. v. Yazel , 91 P.3d 690 ( 2004 )

Opinion by

CAROL M. HANSEN, Judge:

¶ 1 Visteon Corporation (Visteon) appeals from the trial court’s order dismissing its appeal of the Tulsa County Equalization Board’s (Board) order which established the fair cash value of Visteon’s business personal property for the tax year 2002.¹ Appellee, the Tulsa County Assessor (Assessor) had moved for dismissal, arguing the trial court lacked subject matter jurisdiction because [a] Visteon failed to give statutory notice to the Tulsa County Treasurer that it had appealed Board’s denial of its formal protest, and [b] Visteon had failed to pay its 2002 business personal property ad valorem taxes under protest.

¶ 2 On June 11, 2002, Visteon filed its Petition in the trial court pursuant to 68 O.S.2001 § 2880.1² (hereafter § 2880.1) seeking a trial de novo “to correct the assessment made by the County Assessor and the [Equalization] Board.” Visteon alleged the County Assessor “failed to utilize proper methodology in determining the fair market value” of its personal business property was $81,214,566, making the valuation arbitrary and excessive.

¶ 3 Visteon paid the first half of its 2002 county property taxes on December 16, 2002, and the second half on March 20, 2003. Each check was for the total amount of $705,373.50, which included $530,290.50 for the business personal property portion. The parties agree the taxes were fully and timely paid. At issue, however, is whether there were any accompanying documents with the checks when they were received by the County Treasurer. As explained below, the documents would be relevant to determining if Visteon preserved its right to the district court appeal.

¶ 4 After filing his Answer, Assessor moved to dismiss Visteon’s 2002 assessment appeal from the consolidated actions. Assessor asserted the trial court lacked subject matter jurisdiction over that appeal because Visteon had not given proper notice in accordance with 68 O.S.2001 § 2884(B) (hereafter § 2884(B)) when the 2002 taxes were paid. Section 2884(B) provides, in pertinent part, that when protested taxes are paid:

... the person protesting the taxes shall give notice to the county treasurer that an appeal involving such taxes has been taken and is pending, and shall set forth the total amount of tax that has been paid under protest.... The notice shall be on a form prescribed by the Tax Commission.... The taxpayer shall attach to such notice a copy of the petition filed in the court or other appellate body in which the appeal was taken.

¶ 6 In his motion to dismiss, Assessor asserted the requisite § 2884(B) notice form and copy of petition were not included when Visteon mailed its payments to the Tulsa County Treasurer. In support of his motion to dismiss, Assessor attached certain documents and affidavits of various county employees who were regularly involved in the operation of the County Treasurer’s office and in receipt of mail in the court house and Treasurer’s office. Assessor argued the evi-dentiary materials showed Visteon had not complied with § 2884(B).

¶ 6 Visteon, in response, contended it had met the requirements of § 2884(B) by enclosing the required notice and pleading, but additionally argued that once the district court properly had subject matter jurisdiction, it could not lose it. Visteon further argued § 2884(B) does not require abatement of a pending appeal for failure to comply with its notice requirements. Visteon attached copies of the notice form in controversy, which it asserts was properly sent with the initial 2002 tax payment, and other documents and affidavits purporting to establish compliance with § 2884(B).

¶ 7 The initial inquiry must be whether compliance with § 2884(B) is a jurisdictional prerequisite to the district court’s hearing the appeal. In Means v. Blevins, 1995 OK 76, 898 P.2d 1286, the Supreme Court held notice pursuant to § 2884(B) is a statutory condition for a trial court’s jurisdiction to decide an appeal from a County Assessor’s valuation decision. In Means, the taxpayer objected to the evaluation of property, but failed to give notice to the County Treasurer that appeal had been taken from that evaluation. The Supreme Court issued a writ of prohibition from proceeding further in the district court case “for lack of jurisdiction for failure to comply with 68 O.S.1991 § 2884(B).” In doing so, the Court cited Dolese Bros. Co. v. Board of Com’rs of Comanche County, 1931 OK 480, 151 Okla. 110, 2 P.2d 955.

¶8 In Dolese, the district court had dismissed the taxpayer’s appeal from the County Board of Equalization’s determination because no transcript of the Board’s hearing was filed with the appeal, and because the taxpayer failed to serve notice to the County Treasurer that the appeal was pending. Both the transcript and notice were statutorily required.

¶ 9 In language identical to that in § 2884(B), Section 9970, C.O.S.1921, provided that persons paying protested taxes shall give notice “that an appeal involving such taxes has been taken and is pending.” The Dolese Court noted it was the taxpayer’s duty to serve notice on the county treasurer “in order that taxes so paid might by him be held separate and apart from other taxes collected by him.” The Court concluded:

We think these provisions are mandatory, and must be complied with in order to confer jurisdiction upon the district court to entertain the appeal.

Dolese, 2 P.2d at 956; See also, Antrim Lumber Co. v. Sneed, 1935 OK 1144, 175 Okla. 47, 52 P.2d 1040.

¶ 10 The rationale expressed in Dolese for making notice to the treasurer mandatory and jurisdictional is as persuasive today as it was then. In fact, the treasurer’s duty, as contained in § 2884(C), “to hold taxes paid under protest separate and apart from other taxes collected” is substantively unchanged from the original enactment in 1915. See, Laws 1915, c. 107, art.1, subd. B, § 6. Section 2884(E) provides for refund of property taxes paid under protest if the court finds the property was assessed at too great an amount. If proper notice of appeal is not given, the County Treasurer is obligated to apportion the taxes received and would be left without proper reserves to make refunds, Such a situation would be antithetical to good business practices and good government.

¶ 11 Therefore, and in view of Assessor’s motion to dismiss for lack of subject matter jurisdiction, we hold that proof of Visteon’s compliance with § 2884(B) is required for continuing jurisdiction in the trial court to determine if the assessed value was proper. “When a jurisdictional question arises, the burden of proof is upon the party asserting that jurisdiction exists.” Union Bank v. Ferris, 1978 OK 149, 587 P.2d 454. The party asserting that jurisdiction exists here is Visteon.

¶ 12 The parties are in conflict not only as to what the evidentiary materials establish, but also as to what procedure the trial court should have applied in considering those materials. Visteon contends the trial court’s consideration of the evidentiary materials submitted in support of, and in opposition to, the motion to dismiss, converts the motion into one for summary judgment. Visteon, citing In re Macfarline, 2000 OK 87, 14 P.3d 551, then argues that because the motion is one for summary 'judgment, [a] the evidence must be considered in the light most favorable to it, the non-moving party, and [b] the motion may be granted only where there is no substantial controversy as to any material fact.

¶ 13 There clearly is substantial controversy as to material facts, i.e. whether the documents required by § 2884(B) were submitted with Visteon’s December payment of the 2002 tax. However, we are more persuaded by Assessor’s argument that under the facts here the trial court could properly consider the evidentiary materials to determine its jurisdiction without using the summary judgment procedure.

¶ 14 We are not aware of any Oklahoma appellate decisions directly on this point, but in construing provisions of our pleading code, we may consider the federal' counterpart from which it was derived. Shaffer v. Jeffery, 1996 OK 47, 915 P.2d 910. The pivotal provision-from our pleading code here is 12 O.S.Supp.2002 § 2012(B). With certain additions not relevant to the question before us, § 2012(B) is “virtually the same as Federal Rule of Civil Procedure 12(b).” See, Committee Comment to Section 2012.

¶ 15 Section 2012(B) provides, among other things, that:

If, on a motion asserting the defense numbered 6 [§ 2012(B)(6)] of this subsection to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by the rules for summary judgment.

¶ 16 Assessor argues the foregoing provision does not apply here because his motion to dismiss is not for failure to state a claim upon which relief can be granted, but for lack of jurisdiction over the subject matter under § 2012(B)(1). In Holt v. U.S., 46 F.3d 1000 (10th Cir.1995), the Circuit Court of Appeals noted that under Rule 12(b)(1), the federal counterpart to § 2012(B)(1), “a party may, go beyond allegations contained in the complaint and challenge the facts upon which subject matter- jurisdiction depends.” The Circuit Court also noted that under Rule 12(b)(1), the trial court “has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts”, and that “when reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint’s factual allegations.” Under these circumstances, the Circuit Court held the court’s reference to evidence outside the pleadings does not convert the motion to dismiss to a motion for summary judgment.

¶ 17 An exception discussed by the Holt Court, and asserted by Visteon as being applicable here, is where the jurisdictional question is “intertwined” with the merits of' the ease. In, that instance, the district court is required] to convert the 12(b)(1) motion to dismiss into a 12(b)(6) motion or a motion for summary judgment. -In Holt, the Circuit Court said the jurisdictional question was intertwined with the merits if subject matter jurisdiction is dependent on the same statute which provides the substantive claim in the case.

¶ 18 Here, the statute which provides the substantive claim is § 2880.1, which authorizes appeal to the district court from any order of the county board of equalization. The continuing subject matter jurisdiction which Assessor raises is dependent on the § 2880.1 appellant’s compliance with the mandate of § 2884 to pay the protested taxes in full and to provide proper notice to the treasurer when the taxes are paid. The substantive claim does not arise from the same statute which regulates subject matter jurisdiction.

¶ 19 Additionally, the Tenth Circuit Court further clarified what it considered to be intertwined issues in Davis ex rel. Davis v. U.S., 343 F.3d 1282 (10th Cir.2003). There, the parties on appeal disagreed whether the district court had dismissed Davis’ claim under Rule 12(b)(1) or 12(b)(6). The plaintiffs argued that even if the defendant’s motion to dismiss was properly construed as one under 12(b)(1), the district court was precluded from considering information beyond the allegations in the complaint because that would convert the motion into one for summary judgment, and the district court did not grant summary judgment.

¶ 20 The Davis Court, citing Holt, restated the rule that where subject matter jurisdiction is factually challenged, the court has wide discretion to consider matters outside the complaint without converting the procedure to one for summary judgment. They recognized the “intertwined” rule they had discussed in Holt, but found the rule inapplicable. The Court said that when deciding if jurisdiction is intertwined with merits, “the underlying issue is whether resolution of the jurisdictional question requires resolution of an aspect of the substantive claim”, citing Sizova v. Nat’l Inst. of Standards & Tech., 282 F.3d 1320 (10th Cir.2002).

¶21 In Davis, the Circuit Court found jurisdiction was not intertwined. with the merits because the substantive issue in the plaintiffs’ case was whether plaintiffs had been improperly denied Certificate of Degree of Indian Blood cards, not whether a particular plaintiff had exhausted administrative remedies — the latter being the basis for dismissal. Similarly, the substantive issue in Visteon’s case is the propriety of Assessor’s evaluation methodology, not whether Visteon filed the appropriate notice with its tax payments. Resolution of the jurisdictional question does, not require resolution of any aspect of Visteon’s substantive claim. Davis, 343 F.3d at 1296. Jurisdiction was not intertwined with substance so as to require the summary judgment procedure. The trial court could properly consider the evidentiary materials in determining if the appeal should be dismissed for lack of subject matter jurisdiction.

¶ 22 The remaining question is whether the trial court properly concluded it did not have subject matter jurisdiction under the factual challenge before it. We answer that question in the affirmative. “Questions concerning a trial court’s jurisdictional power invoke the de novo standard of review.” Medcalf v. Coleman, 2003 OK CIV APP 53, 71 P.3d 53. Under a de novo standard we exercise “plenary, independent and non-deferential” authority to examine the trial court’s legal rulings. Id., at 55.

¶ 23 Visteon’s primary evidentiary material in opposition to Assessor’s motion to dismiss consists of two affidavits and documents supporting the affidavits. The first affidavit is from a Visteon employee in Michigan who was, at the time relevant here, the company’s Tax Counsel and Director, State and Local Taxes. The affiant states she was advised of the need to pay the Tulsa County 2002 personal property taxes on time and with appropriate notice. She states she communicated this information to Visteon’s property tax consultant, indicating tax payment was not to be made without notice of protest, and in December 2003 provided the notice form and copy of the appeal petition to the tax consultant. To her knowledge, no notice form accompanied the second half of the property tax payment.

¶ 24 The second affidavit is from the tax consultant’s employee responsible for Vis-teon’s account. She stated she received the communication from Visteon about providing documents with the payment to indicate payment was made under protest. She said she received the documents from Visteon, including a notice form stating the entire payment was made under protest, and mailed them with the check, which had the “check stub” attached. The phrase, “Payment made under protest — Visteon” was on the check stub. The certified mail delivery confirmation was returned to the tax consultant showing it had been received in the Tulsa County Treasurer’s office on December 23, 2003. The second half of the personal property taxes were paid in March 2003, without notice of payment under protest.

¶25 As noted above, Assessor submitted several affidavits from persons involved in the court house handling of mail and operation of the Treasurer’s office, along with Treasurer’s documents concerning tax payments under protest. An affidavit from the county’s senior mail clerk stated all county certified or registered mail is delivered to his office and sorted to be delivered or picked up by the mail clerks from the various county offices. Certified or registered mail for the Treasurer was picked up by Donald King.

¶ 26 Donald King provided an affidavit stating it was his principal job in the Treasurer’s office to obtain, open and distribute mail. He will normally sign the green cards indicating receipt of the mailed items and mail them back to the sender, but on days when there are many green cards he will ask the receptionist in the office for help in signing the cards. The receptionist does not open or distribute the mail. Mr. King stated he had been trained to recognize protests of property tax assessments and to give them to the appropriate person in the Treasurer’s office. He did not recall “receiving, opening or seeing a protest or other collection of documents relating to Visteon Corporation on December 23, 2002.”

¶ 27 An affidavit from the Treasurer’s receptionist stated she helped Donald King on occasion to sign green return receipt cards attached to certified or registered mail, but she did not open or distribute the mail throughout the Treasurer’s office. She stated it was her signature, acting as agent of the Treasurer, on the receipt -returned to Visteon.

¶ 28 Another affidavit was submitted from the Treasurer’s employee responsible for processing protested tax payments. Mailed protested payments were delivered to her by Donald King. She reviews the documents for completeness, and if in compliance, she opens a protest file which includes copies of all necessary documents, including the notice form, petition, original of the cheek stub, if any, and the envelope from the taxpayer. She enters information on the protest on the tax rolls. She maintains the protest file until the protest is resolved. She also prepares the reports of protested tax payments required by law. She did not recall Donald King or anyone else delivering to her on December 23, 2002, any documents indicating Visteon intended to protest the 2002 personal property tax. She had reviewed the Treasurer’s files on protested taxes and did not find any documents or record indicating Vis-teon’s protest.

¶ 29 Assessor also submitted the affidavit of the Chief Deputy to the Treasurer, who.is responsible for, among other things, custody of the Treasurer’s records. The Chief Deputy stated Visteon did not file notice of protest with either its December 2002 or March 2003 payments. He also stated that because Vis-teon did not provide the notice, the funds received had been apportioned according to law. One of the documents accompanying this affidavit was the Treasurer’s Report to the State Auditor, as required by 68 O.S.2001 § 2884(D), which did not include Visteon’s tax payment as being made under protest. The Chief Deputy testified by deposition that his investigation in the Treasurer’s office had failed to disclose receipt of any notice by Visteon of its protest.

¶ 30 Visteon made several objections to consideration of Assessor’s evidentiary materials. We find these objections have no merit. The records from the Treasurer’s office would be admissible in accordance with 12 O.S.2001 §§ 2803(6)(records kept in the course of regularly conducted business), 2803(8)(record of public office where there is a duty imposed by law to report), and 2803(10)(to prove absence of a record or nonoccurrence or nonexistence of a matter of which a public record was regularly made and preserved). The Chief Deputy Treasurer’s testimony that the Treasurer’s office did not receive notice of protest from Visteon, as determined by his own investigation, would also be admissible under § 2803(10) to prove the absence of a record regularly made and preserved by the Treasurer’s office.

¶ 31 An additional evidentiary matter is Visteon’s contention that the notation on its cheek stub — Payment made under protest— is sufficient to show substantial compliance with § 2884(B). Without deciding if substantial compliance is acceptable under § 2884(B), we find the notation, presuming it was attached to the check when received in the Treasurer’s office, insufficient under the facts here to have properly put the Treasurer on notice of the appeal.

¶ 32 The Supreme Court considered a similar argument in Antrim Lumber Co. v. Sneed, 52 P.2d at 1045. There, the only notice of protest was on the left hand corner of the payment check which read, “this tax paid under protest.” The Supreme Court noted this phrase was:

... wholly insufficient since it failed to set forth any ground of complaint or to advise the defendant that any suit would be brought for the recovery of said tax.... For aught else that appears, it could have been just a method of expressing dissatisfaction with the tax and a reluctance to pay it.

¶ 33 While the statutory requirements in Antrim were somewhat different, the purpose and necessity for sufficient notice is the same, that is, to allow the responsible fiscal officer to reserve funds in case the tax or evaluation is judicially determined to be incorrect. The purported protest notice on the Visteon check stub, as presented in Visteon’s brief, appears among other text on the stub and in the same size type. It is, as Assessor suggests, “almost unnoticeable”, and not sufficiently distinguishable to conclude that the Treasurer’s staff should have the duty to inquire from Visteon as to its meaning. To the contrary, the duty to comply is imposed on Visteon in accordance with § 2884(B).

¶34 Visteon argues that tax laws must be strictly construed against the sovereign, citing Samson Hydrocarbons Co. v. Oklahoma Tax Com’n, 1998 OK 82, 976 P.2d 532. While that may be the general rule, where the issue is the court’s jurisdiction, the proponent of jurisdiction must be held to strict proof. See, Macsuga v. Moreno, 2003 OK 24, 66 P.3d 409 (Although the Workers’ Compensation Act is to be construed liberally in favor of workers, claimant must be held to strict proof that he was an employee in order to be covered by provisions.)

¶ 35 We hold the trial court correctly determined, notwithstanding the conflicting evidence, that Visteon failed to meet its burden to prove compliance with § 2884(B). In the absence of such proof, the trial court was without jurisdiction to hear Visteon’s appeal of the 2002 personal property tax assessment. Accordingly, the trial court’s order is AFFIRMED.

JOPLIN, J., concurs; and MITCHELL, P. J., dissents with a separate opinion.

1 . Appeals by Visteon and Assessor for the tax year 2003 business personal property assessment remain pending in the trial court, but the court made the requisite findings pursuant to 12 O.S. 2001 § 994 for immediate appeal of its determination on the 2002 assessment. The Tulsa County Board of Equalization was initially joined in this consolidated action, but was dismissed with prejudice and is not a party to this appeal.

2 . Section 2880.1(A) provides, in part, that “[both] the taxpayer and the county assessor shall have the right of appeal from any order of the county board of equalization to the district court upon questions of law or fact including value, or upon both questions of law and fact."