Summary 2011 WY 81

Summary of Decision May 13, 2011


[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it is issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note when you look at the opinion that all of the paragraphs are numbered. When you need to provide a pinpoint citation to a quote the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion will need to have the reporter page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance]

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

Case Name: Mountain Cement Co. v. The South of Laramie Water & Sewer Dist.

Citation: 2011 WY 81

Docket Number: S-10-0199, S-10-0238

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=462190

Docket No. S-10-0199: Appeal from the District Court of Albany County, The Honorable Jeffrey A. Donnell, Judge

Docket No. S-10-0238: W.R.A.P. 12.09(b) Certified Question from the District Court of Albany County. The Honorable Jeffrey A. Donnell, Judge

Representing Appellant (Plaintiff/Petitioner): Philip A. Nicholas & Mitchell H. Edwards of Nicholas & Tangeman, LLC, Laramie, Wyoming. Argument by Mr. Nicholas.

Representing Appellee (Defendant/Respondent): Kermit C. Brown and Elisa M. Butler of Brown & Hiser LLC, Laramie, Wyoming. Argument by Mr. Brown.

Date of Decision: May 13, 2011

Facts: The Appellee Water and Sewer District (the District) was established by a Board of County Commissioners (the Board) in 1992. The persons attempting to organize the District represented that the District would not levy property taxes, but would fund itself solely through user fees. Both the Petition submitted to the Board and the District’s Amended Rules and Regulations provided that the District intended to fund its systems with user fees, and not to levy taxes. Since its inception, the District has obtained water pursuant to an agreement for the city to furnish municipal water to the District.

Appellant owns land south of the city, with a portion of said land exceeding 20 acres in size lying within the District. It is undisputed that, in 1992, Appellant’s plant manager signed a petition favoring organization of the District, but that no one with actual authority ever consented in writing to Appellant’s inclusion in the District. It is also undisputed that Appellant obtains no water or other services from the District.

In 2008, Appellant learned from the County Assessor that the District intended to levy a tax against property lying within the District. Subsequently, Appellant filed in the district court the Complaint that underlies the Court’s case no. S-10-0199. A day after the Complaint was filed in the district court, Appellant filed with the Board the Petition which underlies this Court’s case no. S-10-0238. The Petition contained the same allegations found in the Complaint, but sought relief under Wyo. Stat. Ann. § 41-10-120 (LexisNexis 2007) and Wyo. Stat. Ann. § 22-29-307 (LexisNexis 2007).

In these consolidated appeals, Appellant challenged the district court’s conclusions that Appellant’s property was properly included in the District, that the District lawfully issued certain general obligation bonds, and also challenged the refusal of the Board to exclude Appellant’s property from the District.

Issues in S-10-0199: 1) Whether the District had the authority to include Appellant’s property within the District’s boundaries without Appellant’s written consent; 2) Whether the District’s proposed general obligation bond issue for the purpose of improving and expanding the District’s existing water system is in violation of law; and 3) Whether the District’s proposed general obligation bond issue for the purpose of improving and expanding the District’s existing water system violates the District’s statutory indebtedness limitation.

Issues in S-10-0238: 1) Does a Wyoming board of county commissioners have the power and authority to remove real property from a water and sewer district?; 2) If the answer to the first question is “yes,” under what circumstances may a board of county commissioners remove property from a water and sewer district?; and 3) Does the Petition for Exclusion of Appellant Company from the South of Laramie Water and Sewer District (the Petition), taking the facts alleged in the Petition as true and the allegations viewed in the light most favorable to Appellant, state a claim upon which relief can be granted?

Holdings: The Court affirmed the district court in S-10-0199, finding that Appellant is barred from challenging the inclusion of its property in the District. The allegation is barred not only by the strict thirty day period of limitation found in § 41-10-107(g), but also by the quo warranto requirement of the same statutory section. The Court did not consider the issue of whether the period of limitations found in § 1-3-109 was also exceeded.

The Court also affirmed the district court in finding that the District’s proposed general obligation bond issue was not unlawful. The Court concluded that, when read in pari materia with the other provisions of the Water and Sewer District Law, the unambiguous intent of § 41-10-128 is to allow, but not to require, the use of revenue bonds to fund its proposed well water project.

The Court also affirmed the district court’s determination that the District’s proposed general obligation bond issue did not violate the District’s statutory indebtedness limitation under the provisions of § 41-10-127. The Court concluded that, within the Water and Sewer District Law, the legislature did not intend to distinguish between the act of creating a system for the purpose of supplying water and the act of supplying water, and could see no logical reason for exempting from the debt limitation part, but not all, of the process of obtaining and providing water to a district.

In regards to the certified questions of S-10-023, The Court answered as follows and affirmed the decision of the Board not to exclude Appellant’s property from the district:

1. Does a Wyoming board of county commissioners have the power and authority to remove real property from a water and sewer district? Yes.

2. If the answer to the first question is “yes,” under what circumstances may a board of county commissioners remove property from a water and sewer district? The legislature has not defined the circumstances under which a board of county commissioners may remove property from a water and sewer district, leaving such boards unable to act upon a petition for exclusion.

3. Does the Petition for Exclusion of Appellant from the District, taking the facts alleged in the Petition as true and the allegations viewed in the light most favorable to Appellant, state a claim upon which relief can be granted? No.

J. Voigt delivered the opinion for the court.

Summary 2010 WY 122

Summary of Decision issued August 26, 2010

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Sinclair Oil Corp. v. Wyo. Dept of Revenue

Citation: 2010 WY 122

Docket Number: S-09-0231

W.R.A.P. 12.09(b) Certification from the District Court of Laramie County. The Honorable Thomas T.C. Campbell, Judge

Representing Appellant Sinclair: John A. Sundahl, Sundahl, Powers, Kapp & Martin, LLC, Cheyenne, Wyoming.

Representing Appellee Wyo. Dept of Revenue: Bruce A. Salzburg, Attorney General; Michael L. Hubbard, Deputy Attorney General; Karl D. Anderson, Senior Assistant Attorney General, Martin L. Hardsocg, Senior Assistant Attorney General.

Facts/Discussion: Effective July 1, 2004, the Wyoming Legislature provided a sales tax exemption for machinery used in manufacturing in Wyoming. It is undisputed that the tax exemption applied to two large pieces of machinery owned by Sinclair Oil Corporation. Sinclair claimed that the materials used to construct foundations for the machines also qualified for the tax exemption. Sinclair applied to the Dept. of Revenue for a refund of the sales tax it had paid on the foundation materials. The Department denied that application. Sinclair appealed to the State Board of Equalization, and the Board upheld the Department’s determination. Sinclair then appealed to the district court, which certified the case for direct review by the Court.
The task before the Court was to interpret the statute establishing the tax exemption, Wyo. Stat. Ann. § 39-15-105(a)(viii), along with related provisions, to determine whether the Board correctly applied the statute to the largely undisputed facts. Sinclair argued the reformer and hydrocracker are the basic units, but without foundations, neither piece of machinery could be operated safely and properly. The foundations fit the definition of an “adjunct or attachment necessary for the basic unit to accomplish its intended function.” The Department maintained that whether or not the foundations were attachments or adjuncts to the basic units, the foundations could not be considered “machinery” because they did not satisfy the initial phrase of the definition: “all tangible personal property.” The Court agreed with the Board that the statutes plainly provide that the tax exemption applies only to manufacturing machinery and unambiguously defined the term “machinery” to include only tangible personal property. The foundations are real property and not tangible personal property. The Board relied upon Hanover Compression where it had determined that the compressor facilities were real property because they were structures affixed to the land. In the instant case, the Board determined and the Court agreed that the concrete and related foundation materials were “articles” that had been “buried or embedded.”
Next, Sinclair asserted that if the foundations are real property, then it should not have paid sales tax on the foundation materials when it purchased them because sales tax applies only to tangible personal property and not to real property. The Court noted that personal property can be converted into real property. An article that is personal property can be converted to real property when it is buried or embedded as in the instant case.

Conclusion: The Board correctly concluded that the concrete and related materials were personal property when Sinclair purchased them. In Wyoming, sales or excise tax is levied on the retail price at the time of sale. Consequently, the concrete and related materials were subject to sales tax. Later, Sinclair buried and embedded the foundation materials, thereby converting them into real property. By the time the hydrocracker and reformer were bolted to the foundations, the foundations had become real property. They were therefore ineligible for the tax exemption for manufacturing machinery because they did not satisfy the definition of machinery which includes only tangible personal property.

Affirmed.

J. Burke delivered the decision.

C.J. Kite dissenting, joined by J. Voigt: In order to remain true to the legislative intent, the nature of the property should have been determined at the time of sale. At that time, the materials were tangible personal property and qualified for the exemption under § 39-15-105(a)(viii)(O). The Justices would have held that the Board erred by concluding that Sinclair was not entitled to an exemption from the excise tax for the foundation materials.

Link: http://tinyurl.com/2bbxutj .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance using the Universal Citation format, please contact the Wyoming State Law Library.]

Summary 2010 WY 106

Summary of Decision issued July 30, 2010

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Oakley, Fremont County Assessor v. Fremont County Cmty. Coll. Dist.

Citation: 2010 WY 106

Docket Number: S-09-0261

Appeal from the District Court of Fremont County, the Honorable Norma E. Young, Judge.

Representing Oakley: Jodi A. Darrough, Fremont County Attorney’s Office, Lander, Wyoming.

Representing Fremont County Community College District: Frank B. Watkins of Watkins, PC, Riverton, Wyoming.

Facts/Discussion: The Fremont County Assessor (the Assessor) appealed from a decision of the district court exempting from taxation certain property in Riverton owned by Central Wyoming College (CWC). The parties agreed the sole issue was whether certain lots within CWC’s business park were exempt from taxation based on their current use.
The parties agreed that the CWC property was tax exempt if used primarily for a governmental purpose. CWC asserted that the business park property was intended to enhance the educational purpose of the college and the leased property generated revenue that was used for the college’s support and maintenance. The Assessor contended the lessee’s use of the property was clearly non-governmental and therefore was taxable.
Article 15, § 12 of the Wyoming Constitution was amended to provide an exemption for governmental property only when used primarily for a governmental purpose. The Court has acknowledged that property use is the critical issue in determining tax-exempt status. The mere ownership of property by a governmental entity does not exempt the property. The property at issue is part of a business park. The tenants that have leased property are all private, for-profit businesses. The businesses are lessees only and are not managed by, controlled by, or affiliated with CWC. The lessees do not appear to be reasonably necessary or essential to the operation of CWC. If there was some tangential use of the property by CWC faculty, staff, or students, it has not been demonstrated that such use was primarily governmental. The district court correctly pointed out that we want to avoid a tax spiral where the government is taxing itself to pay itself. In this case, the for-profit tenants will likely have the tax assessment passed on to them. This will avoid the tax spiral and result in the tenants being placed on equal footing with the competitor businesses who don’t lease from government entities.

Conclusion: The for-profit tenants’ use of CWC’s business park property was clearly non-governmental and not necessary or essential to facilitate the efficient operation and maintenance of the college. Therefore the property is not tax exempt pursuant to Article 15, § 12 of the Wyoming Constitution. The decisions of the Fremont County Assessor and Board of Equalization are affirmed and the district court was reversed.

Reversed.

Dist.J. Brooks delivered the decision.

Link: http://tinyurl.com/2eeq927 .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance using the Universal Citation format, please contact the Wyoming State Law Library.]

Summary 2009 WY 30

Summary of Decision issued March 5, 2009

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Hull v. D’Arcy

Citation: 2009 WY 30

Docket Number: S-08-0058

Appeal from the District Court of Platte County, the Honorable David B. Park, Judge.

Representing Appellant Hull: Frank J. Jones, Wheatland, Wyoming.

Representing Appellees D’Arcy and Dalton: Jack John C. Hoard, Casper, Wyoming.

Facts/Discussion: The appeal concerns the validity of a tax deed. Ms. Hull the former owner, contends that the tax deed is invalid because she did not receive the statutorily required notice prior to issuance of the deed. The district court granted summary judgment in favor of the tax deed grantee, Dalton, and the current owners of the property, D’Arcy.
Ms. Hull and her husband owned a residential property in Guernsey. They did not pay the property taxes for 1999 and in 2000 the Platte County Treasurer conducted a tax sale of the property. Dalton paid the delinquent taxes and obtained a certificate of purchase to the property. In 2006, Dalton applied for and received a tax deed. He subsequently conveyed the property to the D’Arcys. They are the current owners of the property and have made improvements to the property since obtaining ownership.
At the time that Dalton began the deed application process, the Hulls had separated and were living in different locations from one another. Ms. Hull contended she never received a copy of any of the letters sent by Dalton nor did she see the notice published in the paper. The district court appeared to conclude as a matter of law that Ms. Hull received actual notice of the forthcoming application for a tax deed based upon its finding that Mr. Hull was Ms. Hull’s agent for receipt of the mailed notice. The Court stated there was insufficient information indicating agency to justify the finding that Mr. Hull was Ms. Hull’s agent.
The Court determined that a genuine issue of material fact existed regarding whether Ms. Hull could be found within Platte County upon exercise of due diligence. In Thompson-Green, the Court addressed a similar situation and ordered summary judgment to the title owners because the tax sale buyer relied upon service to the father and that the son living within Laramie County could have been found upon diligent inquiry.

Conclusion: When the Court considered Ms. Hull’s affidavit in the light most favorable to her, it concluded that a genuine issue of material fact existed regarding whether she could be found within the county upon the exercise of due diligence. Summary judgment in favor of Appellees was inappropriate.

Reversed and remanded.

J. Burke delivered the decision.

Link: http://tinyurl.com/alzqad .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2009 WY 29

Summary of Decision issued March 4, 2009

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: White v. Woods; Adamson v. Woods

Citation: 2009 WY 29

Docket Number: S-08-0078; S-08-0085

Appeal from the District Court of Albany County, the Honorable Jeffrey A. Donnell, Judge.

Representing Appellant Whites: Philip White, Jr., Laramie, Wyoming.

Representing Appellee Adamson: Pro se.

Representing Appellee Woods: Frank J. Jones, Wheatland, Wyoming.

Facts/Discussion: The Woods filed suit in district court seeking to quiet their title to several small pieces of property located in the interior of their ranch property. Among the defendants were Adamson and the Whites. The district court entered summary judgment against Adamson and the Whites. Their separate appeals were consolidated before the Court.
Background: Tax deeds in Wyoming: There are many specific and detailed requirements applicable to tax sales and tax deeds. Particularly relevant here are the requirements that, upon applying for a tax deed, notice must be provided in a specified manner to the person in whose name the taxes were assessed, to the person in actual possession or occupancy of the property, to the record owner, and to mortgagees. After receiving a tax deed, the tax-sale purchaser must file the notices and proofs of service to be recorded as instruments affecting the conveyance of real property. Wyoming courts have required strict compliance with the statutory requirements and have declared tax deeds invalid for relatively minor deviations from the requirements. The problems facing tax deed purchasers are due in part to a strong policy of protecting the former owner’s rights to redeem and recover his property. In 1975, the legislature enacted provisions meant to promote more stability and better marketability for tax deeds. Adamson and the Whites purchased their lots thirty-five years ago and obtained their tax deeds nearly thirty years ago but have never taken possession of their lots. In contrast, the Woods have used the lots as part of their ranch. Their principle claim was that they had acquired title by adverse possession. When the Woods acquired their ranch, the tax deeds were of record. Because the Woods did not own the ranch when the lots were sold for taxes, it is not clear they should benefit from the policy favoring former owners and their rights to redeem and recover property.
The Woods’ claims against Adamson and the Whites: The Woods filed for summary judgment stating they had acquired the property by the combination of a quit claim and a warranty deed. The Woods challenged the Adamson and Whites’ tax deeds on the basis of noncompliance with the statutory requirements for providing notice to interested parties. It is undisputed the Woods did not own or claim an interest in the property when the lots were sold at the tax sale or when Adamson and the Whites applied for their tax deeds, but the Woods appear to claim that they are entitled to challenge the tax deeds as successors. The question of whether summary judgment was precluded by the existence of genuine issues of material fact is intertwined with the issue of standing. After reviewing the record, the Court stated there remained the question of whether the Woods were successors in interest to the Kents. The Woods were not the owners at the time of the tax sale or tax deed, so the Court reviewed the record to determine whether they submitted facts adequate to show that they were prejudiced or injured and that a favorable court decision would provide them redress. The record was devoid of facts establishing that the Woods were the successors in interest to the Kents. Based on the record, Adamson was entitled to judgment as a matter of law because even if his tax deed was invalid, the Woods had no valid claim to the property. A court decision in their favor could not vest title in the Woods or otherwise redress their alleged injury.
Statutes of limitation: The parties have disputed whether two different statutes of limitation bar the Woods’ challenge to the tax deeds. Wyo. Stat. Ann. § 34-2-132(a) or § 39-13-108(e)(vii)(D). By its plain language, the first statute applies only if the grantee has been in possession of the property for six months. The record demonstrated that the Whites never took possession of the lot, so the statute of limitation did not apply. The Whites claimed constructive possession but the Court stated that the Woods had been in possession of the land from the date of purchase and continuously since then, using it as part of their ranch activities. The second statute mentioned was a limitation on actions for the recovery of real property. The Woods’ action in the case was not one to recover the property since they were in possession of it. The Whites have never been in possession and the statute of limitation never commenced to run in favor of the Whites. It does not bar the Woods’ quiet title action.
Payment of property taxes: The Whites asserted they have paid property taxes on the lot ever since the tax sale and insist that the payment of taxes must mean something to the law. The legislature has provided remedies for tax purchasers whose tax deeds are discovered or adjudged to be invalid.

Conclusion: The Court determined that the district court improperly granted summary judgment in favor of the Woods in their challenges to the tax deeds of Adamson and the Whites.

Reversed and remanded.

J. Burke delivered the decision.

Link: http://tinyurl.com/bo43ea .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]