In Board of County Commissioners of Harding County v. New Mexico Taxation and Revenue Department, the New Mexico Supreme Court affirmed a sanctions award against the Department. Although the case involves an interesting use of preemptory writs and involves a fight between two state actors, it does not appear to change the law in any significant way. However, Justice Thompson quotes both Theodore Roosevelt and Marbury v. Madison, instantly making this my favorite case of the new year.
This case involves the taxation of some power lines. By law, the New Mexico Taxation and Revenue Department was required to assess the value of the lines. Petitioners, who are governmental bodies funded by tax money, could not tax the lines without the valuation. The Department held the process up indefinitely by failing to conclude the tax protest proceedings that had been initiated by the owner of the lines.
The petitioners sought help from the courts. The district court determined that the lines were taxable and that Department’s indefinite waiver of the time limits for the protest amounted to a refusal to perform its mandatory duty. It ordered the Department to forward its decision on taxability to the hearing officer, finish the protest proceedings, and certify the property values to the assessor.
The Department did not fully comply with the order. It did not forward the taxability order to the hearing officer (who eventually learned of it from the petitioners). Ignoring that order, the hearing officer concluded that the lines were not taxable and valued them at $0. Although aware that the hearing officer’s ruling was contrary to the district court’s order, the Department did not appeal. Instead, it certified to the district court that the protests were complete and the lines had no taxable value.
The petitioners asked the court to sanction the department for violating the order. The Court found that the Department had “willfully and intentionally refused to perform the duties and obligations required of [it] by law” and restated the Department’s obligation to fully “comply with the terms of the [Peremptory] Writ . . . to enable the assessment and collection of the subject property taxes from Springer.” It awarded petitioners their attorney fees as a sanction.
The Department appealed to the court of appeals. But its appeal as to the order itself was about four months late. The court of appeals therefor declined to address the merits of the order. However, the appeal was timely as to the contempt ruling and sanctions, which the court of appeals affirmed. The Department appealed to the Supreme Court.
Although the facts were somewhat complicated, the issues on appeal were not. The court needed to decide (1) whether the Court of Appeals abused its discretion by declining to address the merits of the Peremptory Writ, (2) whether the district court abused its discretion by holding the Department in contempt, and (3) whether the district court abused its discretion by determining that Petitioners’ costs and fees were reasonable. Because all three issues were reviewed for abuse of discretion, the Department had an uphill battle.
First, the Court easily affirmed the court of appeal’s decision not to address the untimely appeal of the writ. Parties must adhere to rules of procedure, including deadlines. However, an appellate court may exercise its discretion and entertain an appeal even though it is not timely filed if unusual circumstances beyond the control of the parties are present. Typically, the late filer must show a court-caused delay, unusual circumstances, or that the appeal was only marginally untimely. Since the Department did not explain its 177-day late filing, there was no basis to find the court of appeals had abused its discretion.
Next, the Court affirmed the district court’s contempt and sanction order. Sanction orders are reviewed for abuse of discretion. For civil contempt, all that is necessary is that the sanctioned party (1) knows of the court’s order and (2) could have, but did not, comply with it. Appellant admitted that it knew of the order and that it could have complied. It argued that its failure to do so was “trivial”. The Court disagreed, observing that performing a statutory obligation, especially in the context of taxation, is never trivial.
Finally, the court affirmed the district court’s award of attorney fees. Again, this was not a difficult decision. The reasonableness of attorney fees is reviewed for abuse of discretion under a number of factors. Appellants had not addressed any of the factors in their arguments. Since the court does not review unclear or undeveloped arguments, it simply affirmed.
The issues the Department appealed in this case all seem to have arisen from various failures of the Department to timely or adequately take basic legal actions. The result seemed inevitable, both at the court of appeals and the supreme court level. Under Rule 12-502, there are four reasons the supreme court can review a case from the court of appeals: conflict between the decision below and supreme court or court of appeals precedent, constitutional questions, and matters of substantial public interest. It is unclear how or why the Court thought this case met those criteria. Perhaps the Court viewed the question of whether the Department can shirk its legal obligations as one of substantial public interest. If so, it might have been helpful to state that directly.
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