Work v. Dept. of Rev.

396 July 20, 2017 No. 40

IN THE OREGON TAX COURT

REGULAR DIVISION

James WORK,

Plaintiff,

v.

DEPARTMENT OF REVENUE,

Defendant.

(TC 5286)

Plaintiff (taxpayer) filed a complaint appealing a Magistrate Division deci-

sion as to property tax. Taxpayer challenged the real market value (RMV)

and maximum assessed value (MAV) for each tax year from 2002-03 through

2012-13. He then amended his complaint to include tax years 2013-14 through

2015-16. While in the Magistrate Division, taxpayer and the county assessor

entered into a stipulation to resolve the case and presented it to the magistrate.

The stipulation reduced various roll values of taxpayer’s property for tax years

2010-11 through 2015-16, and dismissed other tax years. Taxpayer later appealed

to the Regular Division, apparently because the Magistrate Division decision

only addressed tax years 2014-15 and 2015-16. The department moved to dismiss,

arguing that the Tax Court was not required to honor in the Regular Division a

stipulation made in the Magistrate Division. The department further argued that

the Tax Court could not adjust the RMV or the MAV in any year because either the

period was not open to adjustment, or the fact that an error went unchallenged in

a prior year meant the current year MAV could not be challenged. Granting the

department’s motion to dismiss, the court ruled that as the department was not a

party to the Magistrate Division stipulation, and the stipulation was not renewed

before the Regular Division, it could not be enforced. Further, taxpayer’s Regular

Division complaint had failed to state ultimate facts sufficient to constitute a

claim as to any values for any of the tax years. However, as to the department’s

request that the assessment values, which were changed by the decision of the

magistrate, remain at their current roll values, the court ruled that any party

aggrieved by a magistrate’s decision and seeking affirmative relief must first file

a complaint in the Regular Division, otherwise, the magistrate’s decision becomes

final and a judgment is entered giving effect to that decision.

Oral argument on Defendant’s Motion to Dismiss was

held March 7, 2017, in the courtroom of the Oregon Tax

Court, Salem.

James Work, Plaintiff (taxpayer), filed a response and

argued the cause pro se.

Daniel Paul, Assistant Attorney General, Department of

Justice, Salem, filed the motion and argued the cause for

Defendant Department of Revenue (the department).

Decision rendered for Defendant on July 20, 2017.

Cite as 22 OTR 396 (2017) 397

HENRY C. BREITHAUPT, Judge.

I. INTRODUCTION

This case is before the court following oral argu-

ment on the motion of Defendant Department of Revenue

(the department) to dismiss the complaint filed by Plaintiff

(taxpayer) under Tax Court Rule (TCR) 21 A(8) for failure

to “state a claim for relief over which the court has juris-

diction.” The motion was filed prior to any answer and

the department has not filed a complaint in this division

requesting any affirmative relief.

The resolution of this case requires the consider-

ation of matters discussed by this court in Village at Main

Street Phase II, LLC II v. Dept. of Rev., (Village at Main Street)

22 OTR 52 (2015), vacated on other grounds, 360 Or 738,

387 P3d 374 (2016). Those matters, which were addressed

by this court but not by the Supreme Court,1 concern the

necessity of a party seeking affirmative relief in this court

to file its own complaint. In this case, the question is not

whether “counterclaims” must be included in a complaint,

but whether affirmative relief may be obtained in this court

on the basis of dismissal. However, the analysis touches on

many of the same statutes.

With respect to the department’s motion in this case,

it appears that the department has conflated two bases for

dismissal. TCR 21 A(8) provides for dismissal where a plain-

tiff has failed to “state ultimate facts sufficient to constitute

a claim.” It is TCR 21 A(1) that provides for dismissal where

there is a “lack of jurisdiction over the subject matter.” The

court will address both bases.

II. FACTS AND PROCEDURAL HISTORY

In considering a motion to dismiss for failure to state

ultimate facts sufficient to constitute a claim, the court’s

review is limited to “the facts alleged in the complaint,

1

The Supreme Court expressly avoided addressing these matters when it

vacated this court’s decision. See 360 Or at 745 n 4. Accordingly, the issue of

whether a party seeking affirmative relief must file a complaint in the Regular

Division within 60 days under ORS 305.501(5)(a) is still open.

398 Work v. Dept. of Rev.

accepting those facts as true.” Douglas County v. Smith, 18

OTR 450, 453 (2006). In considering a motion to dismiss for

lack of jurisdiction over the subject matter, the court may

consider “ ‘matters outside the pleading, including affida-

vits, declarations and other evidence.’ ” Id. (quoting TCR 21

A). No relevant evidence outside of taxpayer’s complaint has

been introduced in this case.2

This case stems from an alleged property classifica-

tion error made in 1996 by the county assessor in which the

property was listed on the roll as a “6” instead of a “5,” which

affected the real market value (RMV) of the subject prop-

erty in that year and the ensuing tax years until it was cor-

rected, apparently for tax year 2013-14. Taxpayer pleaded

that this error affected the tax liability of his property in

that tax year and each ensuing tax year.3

Taxpayer purchased the property in 2001. There is

no allegation that taxpayer or the prior owner had, until the

events of this case, appealed any property tax assessment

for any year to the Board of Property Tax Appeals (BOPTA)

or sought supervisory relief from the department.

In his initial complaint filed with the Magistrate

Division on May 2, 2016, taxpayer challenged the RMV and

maximum assessed value (MAV) for each tax year from

2002-03 through 2012-13. He then amended his complaint

to include tax years 2013-14 through 2015-16.

While in the Magistrate Division, taxpayer and the

county assessor entered into a stipulation to resolve the case

2

The department attached to its motion to dismiss a copy of the Magistrate

Division docket in this case. Even if such a document were to be considered

additional evidence outside the complaint, such evidence is not essential to this

court’s decision. Separately, this court has reviewed the decision of the magis-

trate, which decision was not included with taxpayer’s complaint. However, that

decision is a matter of court record and in any event was required to be filed with

taxpayer’s complaint. TCR 1 B(1) (stating, in part, “A copy of the magistrate’s

written decision is to be included with the complaint[.]”).

3

Unlike in Kaufman v. Dept. of Rev., 20 OTR 159 (2010), taxpayer has not

specified an error in a year that manifestly would have affected the maximum

assessed value (MAV) in that particular year. Regardless, taxpayer has alleged

that the MAV for the years at issue in this case are in error. Exactly when the

MAV was affected by the property classification error is not relevant to this

decision.

Cite as 22 OTR 396 (2017) 399

and presented it to the magistrate. The stipulation reduced

various roll values of taxpayer’s property for tax years

2010-11 through 2015-16.4 The stipulation called for the fol-

lowing adjustments:

TAX YEAR RMV MAV AV

2010-11 Reduced to Reduced to Reduced to

$434,520 $453,340 $434,520

2011-12 Reduced to Reduced to Reduced to

$422,060 $453,340 $422,060

2012-13 Reduced to Reduced to Reduced to

$397,520 $453,340 $397,520

2013-14 No Adjustment Reduced to No Adjustment

$421,360 $453,340 (based on RMV)

2014-15 No Adjustment Reduced to Reduced to

$464,300 $453,340 $453,340

2015-16 No Adjustment Reduced to Reduced to

$502,860 $466,940 $466,940

Upon review of the stipulation, the magistrate

determined that the court lacked jurisdiction to adjust

either the RMV, MAV, or assessed value (AV) for tax years

2010-11 through 2012-13. It accordingly dismissed those

claims.5 The magistrate further determined that as to tax

year 2013-14, taxpayer would not be aggrieved as to any

adjustment to MAV, because the MAV would still be higher

than the RMV. Accordingly, the AV, the value on which

property taxes are actually calculated, which is based on

the lower of either the RMV or the MAV, would not change.

The magistrate did, however, find good and sufficient cause

under ORS 305.288(3) to address tax years 2014-15 and

4

The department did not participate in the proceedings in the Magistrate

Division, although it had a statutory right to intervene at any time. ORS

305.560(4)(a).

5

The court also dismissed taxpayer’s claims in the Magistrate Division as

to tax years 2002-03 through 2009-10. However, taxpayer has not appealed those

years to this court.

400 Work v. Dept. of Rev.

2015-16.6, 7, 8 The magistrate’s decision gave effect to the stip-

ulation for those years.

Dissatisfied with the magistrate’s decision because

it only addressed tax years 2014-15 and 2015-16, taxpayer

filed a complaint in the Regular Division. Taxpayer’s com-

plaint could be read as requesting that the stipulation itself,

although entered into in the Magistrate Division, be enforced

in its entirety in the Regular Division. It could also be read

as requesting that the assessment values for tax years

2010-11 through 2015-16 be adjusted to reflect values identi-

cal to those appearing in the stipulation. These allegations

will be addressed in the analysis section of this order.

The department moved to dismiss taxpayer’s com-

plaint under both readings. First, the department argued

that this court is not required to honor in the Regular

Division a stipulation made in the Magistrate Division.

Second, the department argued that this court cannot

adjust the RMV or the MAV in any year because either

(1) the period is not open to adjustment; or (2) the fact that

an error went unchallenged in a prior year means the cur-

rent year MAV cannot be challenged on that basis.

The court heard oral argument on the department’s

motion on March 7, 2017. During oral argument, taxpayer

clarified that he sought changes to the assessment values for

the respective tax years reflective of the agreement entered

into between the assessor and himself. However, taxpayer

also stated that he “[doesn’t] believe [he] would want [the

RMV] changed in 2013, 2014, or 2015 because that’s the way

it is reflected in the stipulation.” (Statement of James Work,

Oral Argument, Mar 7, 2017, at 13:32.) As illustrated in the

previous table, the stipulation did not address or change

the RMV as to tax years 2013-14 through 2015-16, but it

6

Apparently, taxpayer had previously informed the county of the classifica-

tion error, and received incorrect information regarding his ability to correct the

error. The county asked the magistrate to consider this conduct when reviewing

the stipulation.

7

There was no change to RMV requested.

8

Unless otherwise stated, references to the Oregon Revised Statutes (ORS)

are to the 2015 edition. The relevant statutes have not materially changed from

prior years.

Cite as 22 OTR 396 (2017) 401

did address changes to the MAV for those years. Taxpayer’s

only basis for the change to the MAV in those years was the

1996 classification error.

During oral argument, a question arose as to the

effect that a dismissal would have on the values on the

roll—specifically, whether, if taxpayer’s case was dismissed,

the roll values would be changed in accordance with the

magistrate’s decision, or not. The court requested additional

briefing on the effect of dismissal of taxpayer’s complaint.

On this question, the department asserted that the

values on the roll should remain what they were prior to

the taxpayer filing his complaint in the Magistrate Division.

The department argued that neither division of the court has

jurisdiction to change the MAV in a current year based on

an unchallenged error from 1996. Accordingly, and because

the court only issues one judgment, the department con-

tends that dismissal in the Regular Division of taxpayer’s

complaint would have the effect of voiding the magistrate’s

decision, thereafter leaving the roll values as they were prior

to the appeal by taxpayer to the Magistrate Division. In dis-

missing the entire appeal, the department claimed that the

original actions of the county assessor—the original roll

values—would be given effect.9 The department, however,

did not file a complaint in the Regular Division to appeal the

magistrate’s decision—only taxpayer did so.

III. ISSUES

There are three issues in this case. The first issue

is whether either division of this court has or had subject

matter jurisdiction over taxpayer’s claims. The second issue

is whether taxpayer stated ultimate facts sufficient to con-

stitute a claim for relief in this division. The third and final

issue is whether the dismissal of taxpayer’s complaint in the

Regular Division would leave the decision of the magistrate

in effect or void that decision, leaving the roll values as orig-

inally set by the county assessor.

9

Taxpayer filed a response, but failed to materially address the issue iden-

tified by the court. Taxpayer did, however, question the department’s assertion of

lack of subject matter jurisdiction.

402 Work v. Dept. of Rev.

IV. ANALYSIS

As already discussed, the department appears

to have conflated two separate bases for dismissal of tax-

payer’s complaint. One basis is lack of subject matter juris-

diction.10 See TCR 21 A(1). The other basis is failure to state

a claim. See TCR 21 A(8). This court will address each one in

turn before determining the effect of any dismissal.

A. Dismissal for Lack of Subject Matter Jurisdiction

The Tax Court, except as otherwise specifically

provided by statute, is the “sole, exclusive and final judicial

authority for the hearing and determination of all questions

of law and fact arising under the tax laws of this state.” ORS

305.410. A claim arises under the tax laws of this state if it

“has some bearing on tax liability.” Sanok v. Grimes, 294 Or

684, 701, 662 P2d 693 (1983); see also Perkins v. Dept. of Rev.,

22 OTR 370 (2017); Christensen v. Dept. of Rev., 22 OTR 384

(2017).

Taxpayer’s claims in both divisions requested the

reduction of both the RMV and the MAV of the subject prop-

erty, resulting in a reduction to the AV and the associated

tax burden.11 Such claims arise under the tax laws of this

state. ORS 305.410. The department has introduced no

authority that states this court—either division—does not

have subject matter jurisdiction over claims regarding the

determination of the AV of a property for property tax pur-

poses. Nor is this court aware of any relevant to this case.12

10

There is no question of personal jurisdiction in this case.

11

There is a question as to whether taxpayer has standing to challenge the

MAV as to tax year 2013-14 because taxpayer has not alleged a change to the AV

for that tax year. Accordingly, taxpayer has not requested a change resulting in

the reduction of the amount of tax due. However, given the scope of the claims of

taxpayer as to other years, taxpayer might have standing to change the MAV in

tax year 2013-14 if there was a corresponding change in any or all of tax years

2010-11 through 2012-13, or in relation to the lookback period, explained later, of

ORS 305.288. That said, even if taxpayer does not have standing to challenge the

MAV as to tax year 2013-14, such lack of standing would not change the result in

this decision. This is so because there was no change ordered by the magistrate

as to tax year 2013-14, and so there is no question as to what value the MAV for

tax year 2013-14 will appear on the assessment roll.

12

But, of course, the existence of subject matter jurisdiction does not mean

that the basis for relief exists.

Cite as 22 OTR 396 (2017) 403

The department relies upon various statutes, such

as ORS 305.288, to argue that taxpayer cannot achieve

the relief he seeks, and from that concludes that this court

has no jurisdiction. Those statutes, however, concern only

whether certain relief is available. Those statutes may dic-

tate the relief available in a given situation, but it does not

limit or define the scope of this court’s jurisdiction provided

for in ORS 305.410. Stated, differently, courts can and do err

in the interpretation and application of law—that does not

mean courts act without jurisdiction in all such cases.

Both divisions of this court have subject matter

jurisdiction over taxpayer’s claims in his complaint. To the

extent that the department moved to dismiss taxpayer’s

claims in his complaint for lack of subject matter jurisdic-

tion, the motion is denied.

B. Dismissal for Failure to State a Claim

The department also moved to dismiss taxpayer’s

complaint for failure to state ultimate facts sufficient to

constitute a claim for relief. As previously discussed, tax-

payer’s complaint can be interpreted one of two ways, either

(a) requesting enforcement of the stipulation in the Magis-

trate Division or (b) requesting assessment values identical

to the stipulation in the Magistrate Division. The department

moved against taxpayer’s complaint on both interpretations.

As to enforcement of the stipulation entered into

in the Magistrate Division, the department’s motion is well

taken. The department was not a party to the stipulation,

and the stipulation was not renewed before this court. See

Dept. of Rev. v. Guardian Management Corp., 16 OTR 17,

20 (2002) (stating “no party can be compelled to accept any

record created in the Magistrate Division”). To the extent

that taxpayer requests enforcement of the Magistrate

Division stipulation in this court, that claim is dismissed.13

As to requesting assessment values identical to the

stipulation in the Magistrate Division, the claims made by

13

The court cautions that the proceedings in the Magistrate Division are not

always irrelevant. This court has issued many statements on the scope and limits

of de novo review in this court. See Spears v. Dept. of Rev., 20 OTR 229 (2010);

Freitag v. Dept. of Rev., 19 OTR 144 (2006); Norpac Foods, Inc. v. Dept. of Rev., 15

OTR 331 (2001).

404 Work v. Dept. of Rev.

taxpayer relate to the RMV of the property for tax years

2010-11 through 2012-13 and the MAV for tax years 2010-11

through 2015-16. Generally, the county assessor makes the

initial determination of RMV. Richardson v. Dept. of Rev., 22

OTR 207, 208 (2016). The MAV is, absent any constitutional

exception, determined pursuant to a statutorily provided

calculation. ORS 308.146(1); see Comcast Corp. III v. Dept.

of Rev., 22 OTR 233, 235 (2016). A change or correction of

either RMV or MAV may be obtained in this court.

However, for the reasons discussed below, taxpayer

in his complaint in this division has failed to state ultimate

facts sufficient to constitute a claim as to either value for any

of these years. No such motion was made before the magis-

trate regarding taxpayer’s complaint in that division.14

1. Tax Year 2010-11

For tax year 2010-11, taxpayer seeks adjustment of

both the RMV and MAV of the property. There are at least

four routes to obtain relief of RMV or MAV determinations

in this court.15 None of these routes is of assistance to tax-

payer for this tax year. The court will discuss these in some

detail here as the analysis is relevant to other tax years.

First, a taxpayer may appeal a county assessment

to the BOPTA. Property tax assessments are mailed on or

before October 25 of each year. ORS 311.250. Taxpayers

may—no later than December 31 of the same year—petition

for review of an assessment to the BOPTA. ORS 309.100.

An unsatisfactory BOPTA decision may then be appealed to

the Magistrate Division of this court. ORS 305.275(1)(a)(3).

Taxpayer has not alleged that he petitioned for review before

the BOPTA for tax year 2010-11. Nor, considering the fact

that taxpayer filed his complaint in the Magistrate Division

on May 2, 2016, does it appear that he could have. This route

to relief is foreclosed as to tax year 2010-11.

14

Nor was there a motion to dismiss on the basis of subject matter juris-

diction. However, the magistrate dismissed several years on that basis. To the

extent that the magistrate determined there was a lack of subject matter juris-

diction he was, as has been discussed, incorrect.

15

Taxpayer has not identified any additional routes to relief relevant to this

case.

Cite as 22 OTR 396 (2017) 405

Second, a taxpayer may request the department

to exercise its supervisory authority over assessors, which

includes correcting valuation errors. ORS 306.115(1). The

department may order a change “for the current tax year

and for either of the two tax years immediately preceding

the current tax year.” ORS 306.115(3). The current tax year

is “the tax year in which the need for the change or cor-

rection is brought to the attention of the department.” ORS

306.115(5) (emphasis added). Such an order is discretionary,

but may be reviewed by this court. ORS 306.115(3); ORS

305.275. Taxpayer, however, did not seek supervisory relief

from the department for tax year 2010-11.16 This route to

relief is foreclosed as to tax year 2010-11.

Third, a taxpayer may request a correction from

this court under ORS 305.288(1). That statute directs this

court to order changes or corrections to RMV for the current

tax year and the two immediately preceding years where the

property is a dwelling and the RMV assessment differential

is equal to or greater than twenty percent. ORS 305.288(1);

Richardson, 22 OTR at 209. The current tax year has the

same meaning as used in ORS 306.115, meaning the cur-

rent tax year is defined by the year in which the request

is made. ORS 305.288(5)(a). In this case, when taxpayer

filed his complaint in the Magistrate Division, the current

tax year was tax year 2015-16, and therefore the lookback

provisions of ORS 305.288(1) only reach back to tax years

2013-14 and 2014-15. Accordingly, this route to relief is fore-

closed as to tax year 2010-11.

Fourth, and finally, the court may order a change

or correction to the current tax year and the two imme-

diately preceding tax years under ORS 305.288(3) if the

taxpayer has no statutory right of appeal remaining and

the court determines that good and sufficient cause exists

for the taxpayer’s failure to pursue the statutory right of

appeal. As with subsection (1) of ORS 305.288, the current

tax year is defined by the year in which the request is made

to this court. In this case, that year is tax year 2015-16, and

16

Nor could he. The current tax year at the time taxpayer filed his complaint

in the Magistrate Division was tax year 2015-16, and therefore the department’s

supervisory authority would have only extended back to tax year 2013-14.

406 Work v. Dept. of Rev.

accordingly the court may only reach back as far back as tax

year 2013-14. Accordingly, this route to relief is foreclosed as

to tax year 2010-11.

Taxpayer’s claims regarding the RMV and MAV of

the subject property for tax year 2010-11 are dismissed.

2. Tax Year 2011-12

For this tax year, taxpayer seeks adjustment of both

the RMV and MAV of the property. For the same reasons as

tax year 2010-11 and elsewhere, taxpayer’s claims regard-

ing the RMV and MAV of the subject property for tax year

2011-12 are also dismissed.

3. Tax Year 2012-13

For this tax year, taxpayer again seeks adjustment

of both the RMV and MAV of the property. For similar rea-

sons as tax year 2010-11, taxpayer’s claims regarding the

RMV and MAV of the subject property for tax year 2012-13

are also dismissed.

4. Tax Year 2013-14

Tax year 2013-14 is the first year in which the lim-

ited lookback period is satisfied for purposes of ORS 306.115

and ORS 305.288. It is also noteworthy that tax year

2013-14 is the first year in which taxpayer is only seeking a

correction to the MAV—not the RMV. Notwithstanding that

fact, the result does not change the analysis from prior tax

years.

For tax year 2013-14, there is a question regarding

whether taxpayer is aggrieved by the values determined by

the county assessor. The RMV for taxpayer’s property for

this year is $421,360. Even if the MAV is reduced to $453,340

as requested, his AV, which is based on the lesser of RMV

or MAV, would be the RMV of $421,360. Accordingly, tax-

payer’s tax burden would not change, and it appears that

taxpayer is not aggrieved by the increased MAV. Cf. Paris

v. Dept. of Rev., 19 OTR 519 (2008) (holding that taxpayer

was not aggrieved by allegedly erroneous RMV where the

AV would still be based on the MAV, which was lower than

the RMV).

Cite as 22 OTR 396 (2017) 407

For this reason alone, taxpayer’s claim regarding

the MAV for tax year 2013-14 could be dismissed. However,

for the reasons expressed below as to tax year 2014-15, tax-

payer has also failed to state ultimate facts sufficient to con-

stitute a claim. He has not alleged that the MAV for this

year was calculated in error, and his claim must therefore

be dismissed.

5. Tax Year 2014-15

Just as in tax year 2013-14, taxpayer is only chal-

lenging the MAV in tax year 2014-15. Unlike tax year

2013-14, there are no standing issues as to the basic chal-

lenge to the MAV. However, there is a standing issue as to

taxpayer’s appeal from the Magistrate Division.17 Although

taxpayer did not receive all the relief he requested in the

Magistrate Division, the magistrate did change the MAV

in tax year 2014-15 (and tax year 2015-16) to the value

requested by taxpayer. Accordingly, as to this tax year, tax-

payer is not aggrieved by the decision of the magistrate,

and his claim as to this tax year must be dismissed. See

ORS 305.570(1)(a).

Taxpayer’s claim as to this tax year would also

be dismissed for failure to state a claim. Although this

analysis is not essential to this court’s decision, it gives

context to the department’s argument—discussed below—

regarding the effect of this court’s dismissal. Accordingly,

the court returns to the familiar four routes to relief dis-

cussed above.

First, taxpayer has not alleged that he appealed

to the BOPTA for tax year 2014-15. Second, taxpayer did

not request the department use its supervisory authority

under ORS 306.115. Third, because taxpayer is only seek-

ing an adjustment to MAV, he cannot seek relief under ORS

305.288(1), which pertains only to RMV relief. And fourth,

taxpayer has not alleged that the MAV was not calculated

pursuant to statute, or that an exception to that calculation,

such as new improvements or construction, applies. See ORS

308.146(1); Comcast Corp. III, 22 OTR at 236.

17

The court notes that the department did not move on this basis. However,

the court will not ignore it.

408 Work v. Dept. of Rev.

Taxpayer’s sole complaint is that the MAV in this

year is, because of the unchallenged classification error in

1996, too high. However, that allegation is insufficient to

constitute a claim for relief.

This court explained in Kaufman v. Dept. of Rev., 20

OTR 159 (2010), that a party cannot request a change to the

MAV in the current year solely on the basis of a past error.

The current year MAV is based upon a statutory calculation

based on the prior year’s AV and MAV. See ORS 308.146;

Comcast Corp III, 22 OTR at 235. That calculation applies

unless one of six constitutional exceptions applies. See Or

Const, Art XI, § 11(1)(c)(A) - (F). Taxpayer admitted during

oral argument that no such exception was pleaded or has

occurred here.

Taxpayer has not stated ultimate facts sufficient to

show that the MAV was erroneously calculated. Therefore,

taxpayer’s claim regarding the MAV for tax year 2014-15 is

dismissed.

6. Tax Year 2015-16

For this tax year, the current tax year, taxpayer

only seeks adjustment to the MAV. Similar to tax year

2014-15, taxpayer received the relief he requested in the

Magistrate Division and does not have standing to appeal

to the Regular Division. ORS 305.570(1)(a). And, as in tax

year 2014-15, none of the four routes to relief assist taxpayer

for tax year 2015-16.

First, taxpayer has not alleged that he sought

review before the BOPTA for this year. Of note, the timing of

taxpayer’s appeal to the Magistrate Division plausibly lines

up with taxpayer having pursued relief from the BOPTA for

tax year 2015-16 before filing a complaint in the Magistrate

Division. However, even if that were true, taxpayer has still

failed to allege ultimate facts sufficient to show that the

statutory calculation of the MAV for this tax year was done

in error, or that an exception applies.

The analysis for the remainder of the routes to relief

follows tax year 2014-15. Accordingly, taxpayer’s claim for

tax year 2015-16 as to MAV is dismissed.

Cite as 22 OTR 396 (2017) 409

There being no other claims for relief, the depart-

ment’s motion to dismiss is granted.

C. Effect of Dismissal

The question now presents itself: Is the decision

of the magistrate to be given effect after dismissal of tax-

payer’s complaint in the Regular Division. The department

argues that the assessment values, which were changed by

the decision of the magistrate, must remain at their current

roll values. In effect, the department, which did not file a

complaint in this court, seeks to use its motion to challenge

what it sees as an error in the magistrate’s decision and

receive affirmative relief.

The department has set forth two bases for its posi-

tion. First, the department argues that this court lacks

subject matter jurisdiction and therefore must dismiss the

entire case. Second, the department argues that the Tax

Court can only issue one judgment and therefore the entry

of a judgment of dismissal prevents the entry of a judgment

giving effect to the magistrate’s decision. The department

seeks to bolster this argument by pointing out that a com-

plaint in the Regular Division must state how the assessor

erred, and so therefore this court is reviewing taxpayer’s

claims as a whole on the department’s motion to dismiss.

See ORS 305.560(2).

This case presents a variation of the problem

presented in Village at Main Street. Although not iden-

tical to the “cross-appeal” issue in Village at Main Street,

which resulted from the seeking of affirmative relief in an

answer to the taxpayer’s complaint, the department has

similarly argued in this case that it is entitled to affir-

mative relief in this court without ever filing a complaint

within the time permitted by statute. See ORS 305.501

(5)(a) (allowing 60 days for parties to appeal the final deci-

sion of the magistrate); ORS 305.501(7) (providing that

after 60 days the decision becomes final and a judgment is

issued).

As to the department’s first argument, it does

appear that a dismissal on the basis of subject matter juris-

diction, assuming that the lack of subject matter jurisdiction

410 Work v. Dept. of Rev.

also extends to the magistrate’s decision, might well result

in the decision of the magistrate being vacated.18 Courts are

required to consider sua sponte the existence or not of sub-

ject matter jurisdiction, and subject matter jurisdiction can

be raised at any time. See, e.g., TCR 21 G(4). Accordingly,

once the judge determines that there is a lack of jurisdiction

over the complaint filed in the Regular Division, the magis-

trate may, depending on the basis for the lack of jurisdiction

in the Regular Division, be on notice to ensure that there

is jurisdiction over the complaint filed in the Magistrate

Division.

However, both divisions of this court have subject

matter jurisdiction over taxpayer’s claims, notwithstand-

ing the fact that taxpayer’s claims are not sufficiently well

pleaded.19 Even if the magistrate’s decision was in error,

that decision was still within the jurisdiction of the court.

Therefore, unless the magistrate’s alleged error is appealed

by one or more parties aggrieved by that decision, it has the

full force of law once a judgment is issued giving it effect. See

ORS 305.501(5)(d) (“Appeal to the judge of the tax court is

the sole and exclusive remedy for review of a written decision

of a magistrate.”); ORS 305.501(7) (“If no appeal is taken to

18

Although unlikely, it is possible that the Regular Division would lack

jurisdiction over a taxpayer’s claims in the Regular Division, but the Magistrate

Division would have jurisdiction over that taxpayer’s claims in the Magistrate

Division. Consider the following hypothetical:

Taxpayer timely and appropriately files a complaint in the Magistrate

Division alleging that the RMV and AV of a property is too high. Property val-

uations cases routinely come through the Magistrate Division, and such cases

are within the subject matter jurisdiction of the Magistrate Division (and the

Regular Division for that matter).

Assume the magistrate decides that the county’s appraisal was correct, and

issues a final decision declaring the RMV and AV is that specified by the county.

Further assume that the taxpayer chooses not to litigate the RMV and AV fur-

ther by filing a complaint in the Regular Division. However, assume that the

county appraiser damaged taxpayer’s property during an on-site inspection of

the property.

If taxpayer files a complaint in the Regular Division seeking relief in tort for

the damage to the property, the Regular Division would dismiss the complaint for

lack of subject matter jurisdiction. See Sanok, 294 Or 684. However, lack of sub-

ject matter jurisdiction in the Regular Division would not, in this hypothetical,

also mean that the Magistrate Division lacked subject matter jurisdiction over

the valuation appeal.

19

Even though taxpayer is not aggrieved as to tax year 2013-14, that fact does

not change the analysis as to tax years 2014-15 and 2015-16. See 22 OTR at 402 n 11.

Cite as 22 OTR 396 (2017) 411

the tax court judge within 60 days, the decision of the mag-

istrate shall become final. The tax court shall enter a judg-

ment enforcing all final decisions of the magistrate, which

judgment shall be binding upon all parties. ORS 305.440(2)[,

requiring adjustment to the roll values,] applies to the final

determination of any property tax matter.”).

The department’s second basis touches on the

unique nature of this court with two divisions. As seen in

Village at Main Street, this court is subject to statutory pro-

visions that at times cause its practice to diverge from the

general practice of civil courts.

The court now turns to the department’s argu-

ments. First, the department is essentially correct that this

court, being one court with two divisions, can only issue one

judgment—at least as to where this court reaches the mer-

its of a dispute. See Dept. of Rev. v. Froman, 14 OTR 543,

546-547 (1999). There is generally only one final act of a

court on the merits of any particular issue.20 However, this

court is aware of no authority preventing it from entering

an order granting a motion to dismiss a complaint filed in

the Regular Division, and then entering a judgment giving

effect to the decision of the Magistrate Division, at least

where there is no “cross-appeal.” See TCR 14 A (providing

that a motion is an application for an order; it is not a claim

for relief).

Second, the department is mistaken as to the effect

of ORS 305.560(2) in this court.21 The department relies

20

Of course, the finality of a judgment in this court is subject to numerous

qualifications. One is reversal by the Supreme Court. ORS 305.445. Another is a

motion for relief from judgment. TCR 71 B and C. Another is a motion to correct

a judgment. TCR 71 A. Another is a motion for supplemental judgment. TCR 68

C(3)(b). None of these qualifications affects the basic premise of the department

as to the finality of a court’s decision to determine the rights and responsibilities

of the parties in a tax dispute.

21

ORS 305.560(2) provides:

“The complaint shall state the nature of the plaintiff’s interest, the facts

showing how the plaintiff is aggrieved and directly affected by the order, act,

omission or determination and the grounds upon which the plaintiff contends

the order, act, omission or determination should be reversed or modified. A

responsive pleading shall be required of the defendant.”

This language is similar to the language used in ORS 305.275 to determine who

may appeal from an “act, omission, order or determination of” a taxing authority.

ORS 305.275(1)(a).

412 Work v. Dept. of Rev.

upon ORS 305.560(2) in arguing that complaints must

demonstrate how the underlying act, order, determination,

or omission of the taxing authority was erroneous. But the

statute is not so limited to taxing authorities.

Rather, ORS 305.560 mentions how a complaint

must show how a plaintiff is “aggrieved” and “affected” by

the order, act, omission, or determination. ORS 305.570 sim-

ilarly mentions being “aggrieved” and “affected” by a writ-

ten decision of a magistrate to have standing to appeal to

the Regular Division. Such a written decision is certainly a

form of order, act, omission, or determination. Indeed, ORS

305.560(4)(a) mentions orders of the Tax Court.

In any case, the department’s strained reading of

ORS 305.560 cannot turn on its head the statutory scheme

of appeals from the Magistrate Division. That scheme

requires that “[a]ny party dissatisfied with a written deci-

sion of a magistrate” appeal to the judge of the Tax Court.22

ORS 305.501(5)(a).

The department’s view of dismissal fails to consider

the context of the de novo review obtained in the Regular

Division and the structure of this court. While a party is

generally free to proceed on new facts, new law, and new

arguments, the party aggrieved by the magistrate’s decision

and seeking affirmative relief must first file a complaint in

the Regular Division. ORS 305.501(5)(a) and (d). Otherwise,

the magistrate’s decision becomes final and a judgment will

be entered giving effect to that decision. ORS 305.501(7).

The department’s theory also treats the proceedings

in the Magistrate Division as completely irrelevant. This

court has not held that the proceedings in the Magistrate

Division are at all times irrelevant upon the filing of a

22

This court perhaps overstated the importance of the word “to” in Village at

Main Street when it discussed whether ORS 305.560 is included in the statutory

reference “ORS 305.404 to 305.560” found in ORS 305.570 in discussing how an

appeal to the Regular Division is perfected. See Preface to ORS; ORS 174.100(9)

(“ ‘To’ means ‘to and including’ when used in a reference to a series of statute

sections, subsections or paragraphs.’ ”). Even so, ORS 305.570 simply addresses

standing to appeal to the Regular Division. The operative statute concerning

appeals to the Regular Division is ORS 305.501, which, as discussed throughout

this order, requires that a party must file a complaint—that is, a request for

affirmative relief—if that party is dissatisfied with a decision of the magistrate.

Cite as 22 OTR 396 (2017) 413

complaint in the Regular Division. Quite the opposite. See

Spears v. Dept. of Rev., 20 OTR 88 (2010) (reviewing only

the decision of the magistrate to dismiss for failure to pros-

ecute); Freitag v. Dept. of Rev., 19 OTR 144 (2006) (same);

Newton v. Clackamas County Assessor, 17 OTR 348 (2004)

(articulating abuse of discretion standard for some deci-

sions of the magistrate); Norpac Foods, Inc. v. Dept. of Rev.,

15 OTR 331 (2001) (reviewing failure to submit a written

report as required by the magistrate). This court is aware

of no authority that the magistrate’s decision automatically

disappears when a complaint is filed.

In addition, this court has made clear that, even

though parties are entitled to an “original” and “indepen-

dent” proceeding in the Regular Division under ORS 305.425,

“ ‘original’ has never been construed to mean that an act or

failure to act below should be ignored by the court.” Norpac

Foods, Inc., 15 OTR at 332-33. A party cannot frustrate a mag-

istrate’s decision based upon that party’s failures below. See,

e.g., Wynne v. Dept. of Rev., 342 Or 515, 156 P3d 64 (2007) (dis-

missal in Regular Division for failure to file complaint in the

Magistrate Division).

Appeal to the Regular Division by one party of the

magistrate’s decision is not necessarily in all ways and for

all parties a complete redo of the Magistrate Division pro-

ceeding. Rather, an appeal from the Magistrate Division is

more like a suit to set aside the decision of the magistrate.

See ORS 305.425(2).23 And, as has already been stated, the

23

ORS 305.425(2) does not expressly refer to setting aside a decision of the

magistrate. However, that statute existed before the Magistrate Division was cre-

ated by statute, and it was not materially amended to reflect the creation of the

Magistrate Division. See Or Laws 1997, ch 541, § 60 (amending ORS 305.425(2)

only to reflect the change from “a board of equalization or board of ratio review”

to “a board of property tax appeals”). That the legislature failed to amend ORS

305.425(2) to reflect the existence of the Magistrate Division is curious. Before

the creation of the Magistrate Division, litigants generally appealed directly to

the judge of the Tax Court from acts, orders, omissions, or determinations of tax-

ing authorities. See Henry C. Breithaupt & Jill A. Tanner, The Oregon Tax Court

at Mid-Century, 48 Willamette L Rev 147, 148 (2011). Now, litigants generally

appeal first to the Magistrate Division from such acts. See ORS 305.275.

Curiosity aside, ORS 305.570 provides that an appeal to the Regular Division

“shall be perfected in the manner provided in ORS 305.404 to 305.560.” That ref-

erence includes ORS 305.425(2), which implies that the perfection of an appeal to

the Regular Division includes demonstrating why the magistrate erred and why

its decision should be set aside.

414 Work v. Dept. of Rev.

ability to set aside such decision and received affirmative

relief is dependent upon the filing of a complaint in the

Regular Division. ORS 305.501(5)(a) and (d), (6). A dismissal

only ensures that the plaintiff does not receive affirmative

relief.

This court held in Village at Main Street that each

party requesting affirmative relief from a magistrate’s deci-

sion must file its own complaint in the Regular Division to

secure its requested relief. Otherwise, the nonappealing

party’s ability to assert other positions as to income or

value is at the risk of the other party voluntarily dismissing

its appeal. While this court’s decision was vacated by the

Supreme Court on other grounds, this court adheres to the

analysis here.24

In many situations, it does not matter which party

actually files the complaint in the Regular Division. This is

because this court has authority to determine the correct

RMV of property notwithstanding the values pleaded by the

parties, ORS 305.412, and the correct amount of tax defi-

ciency even if greater than the amount originally assessed

by the department. ORS 305.575. Generally, the court is

tasked with reaching the correct result.

However, a party only has standing to maintain an

action requesting relief in this court if it is aggrieved by

the magistrate’s decision and it “fil[es] a complaint in the

regular division of the tax court within 60 days after the

date of entry of the [magistrate’s] written decision.”25 ORS

305.501(5)(a). Further, “[a]ppeal to the judge of the tax court

is sole and exclusive remedy for review of a written decision

of a magistrate.” ORS 305.501(5)(d).

If a party does not file a complaint in the Regular

Division asserting its independent claims for relief, it walks

a precarious line. It may be that the party obtains the relief

it seeks because (a) the appealing party stays the course and

24

The Supreme Court vacated this court’s decision, but it did not address

this issue. See 22 OTR at 397 n 1.

25

Except in cases where appeal directly to the Regular Division is permitted

by statute, or the parties petition for special designation to the Regular Division.

See, e.g., ORS 305.501(1) (providing for petitions for special designation); TCR

1 C (corresponding rule on petitions for special designation).

Cite as 22 OTR 396 (2017) 415

(b) the court, based on its authority to independently deter-

mine the correct value or amount of deficiency, affirmatively

rules in favor of the nonappealing party. However, such an

outcome is not certain, and requires the appealing party to

stay the course.26

It is also especially important for each party to

file its own complaint when the issue is one other than the

correct value, ORS 305.412, or the correct amount of tax,

ORS 305.575. Yet, even in those cases, if the nonappealing

party wants to request affirmative relief to improve its posi-

tion, it needs to do so by filing a complaint in the Regular

Division asking for relief greater than that obtained in the

Magistrate Division.

The above discussion notwithstanding, it is a cer-

tainty that a nonappealing party does not get affirmative

relief from a successful motion to dismiss an appealing par-

ty’s complaint for failure to state a claim. Rather, the appeal-

ing party does not get the relief sought and the nonappeal-

ing party gets no relief from the magistrate’s decision.

Having discussed the general statutory nature of

appeals to the Regular Division and why the department’s

arguments do not comport with the statutory scheme, the

court now addresses why, as a practical matter, the depart-

ment’s successful motion to dismiss in this case simply can-

not result in magistrate’s decision being nullified. The logic

of this decision is similar to that of the department in its

supplemental brief on the effect of dismissal in the Regular

Division. Although the premise of the statement was that

this court had no jurisdiction of taxpayer’s claims, an argu-

ment which this court has rejected, the analysis is salient.

On page 3 of its brief, the department states:

“This situation[, dismissal for lack of subject matter juris-

diction,] should be distinguished from appeals of a magis-

trate’s decision to the Regular Division that are dismissed

because they are defective for some procedural reason not

related to subject matter jurisdiction. For example, if the

taxpayer fails to pay the disputed tax and fails to file an

affidavit of hardship as required by ORS 305.419, or if the

26

Of course, it also requires the “appealing party” to have even filed a com-

plaint in the Regular Division in the first place.

416 Work v. Dept. of Rev.

appeal to the Regular Division is untimely or if there is a

failure of process. In such cases, it is appropriate for the

Regular Division to enter a judgment enforcing the mag-

istrate’s decision on the merits, because otherwise parties

could avoid the effect of the magistrate’s decision simply by

filing an untimely appeal to the Regular Division. Here, nei-

ther division of the court has authority to change the MAV

for any of the tax years that were appealed and the judg-

ment of the court should reflect that.”

(Emphasis added.)

This court notes that the department’s final sen-

tence reflects a critical misunderstanding regarding the

roles of motions to dismiss versus complaints (appeals). If

a magistrate acts within the court’s jurisdiction but outside

its authority, the correct response by the aggrieved party is

to appeal, not dismiss the other party’s appeal.

As far as the distinction between dismissals for lack

of subject matter jurisdiction and other bases for dismissal,

this court agrees. If the magistrate acted outside the court’s

jurisdiction, then no judgment may be entered reflecting

that decision. However, the distinction between dismissals

on the basis of subject matter jurisdiction and otherwise,

and the emphasized rationale, confirms the result in this

case.

Consider, for example, the problems that would be

raised by a notice of dismissal filed by a plaintiff. See TCR

54. Assume that the department’s theory is correct that a

dismissal by this court requires that it enter, in all cases,

a judgment of dismissal, which judgment must dismiss the

case in its entirety. In fact, a plausible reading of TCR 54

A(1) so states, “[A] plaintiff may dismiss an action in its

entirety * * * without order of court * * * by filing a notice of

dismissal with the court * * *. Upon notice of dismissal * * *

a party must submit a form of judgment and the court will

enter a judgment of dismissal.” (Emphasis added.)

Such an interpretation would do violence to the

statutory scheme providing for resolution of disputes first

in the Magistrate Division and then by de novo proceedings

in the nature of review in the Regular Division. Cf. ORS

305.501(5)(d). Consider where a taxpayer had prevailed in

Cite as 22 OTR 396 (2017) 417

the Magistrate Division, for example by proving that the

assessment roll values were too high. The county assessor,

having failed to prove that the roll values were correct, could

file a complaint in the Regular Division on the last such day

a complaint could be filed. Then, on that day or the next day,

the county could file a notice of dismissal, completely wiping

out taxpayer’s victory in the Magistrate Division.

These results are particularly troublesome where,

as in the case where the taxpayer prevailed in the Magistrate

Division, the taxpayer does not have standing to appeal

to the Regular Division under ORS 305.570(1)(a). Such

a situation is not just precarious—it is unwinnable and

indefensible.

In fact, taxpayer in this case did not have stand-

ing to appeal tax years 2014-15 and 2015-16, yet he filed a

complaint attempting to appeal them anyway. If the depart-

ment’s theory was correct, an incredibly unusual circum-

stance would arise here. In this case, taxpayer received

relief for tax years 2014-15 and 2015-16 when the magis-

trate gave effect to the stipulation. And, although he did

not need to, taxpayer appealed those years to this court.

This court dismissed those years because he had already

received the relief he requested in the Magistrate Division.

Yet, under the department’s theory, because taxpayer won

in the Magistrate Division, he would lose in the Regular

Division and this court should both dismiss his complaint in

this division and set aside the decision of the magistrate.

Such a result cannot be the law, and an appropriate

reading of the statutory scheme governing this court and

its two divisions does not support it. Regardless of how this

court’s rules might be interpreted, any such interpretation

cannot supersede what is provided for by statute. See Village

at Main Street, 22 OTR at 57-58. If the department wants

affirmative relief, it must file its own complaint.

The court notes that the potentially troublesome

language in TCR 54 A is not present in TCR 21 A, with

respect to motions to dismiss. However, the statutory

scheme remains. If a party believes that the magistrate has

erred, that party is required to file a complaint to secure its

opportunity to request affirmative relief. ORS 305.501(5)(d).

418 Work v. Dept. of Rev.

In this case, the department did not file its own complaint,

and therefore has no basis for affirmative relief after the

dismissal of taxpayer’s complaint. On dismissal, the roll val-

ues will be set according to the magistrate’s decision.

It is also worth noting that this court dismissed

taxpayer’s claims as to tax year 2014-15 and 2015-16 for

lack of standing to proceed to the Regular Division because

taxpayer was not aggrieved by the magistrate’s decision. It

would be inconsistent for this court to dismiss a claim on

such a basis and then enter a judgment that returns the

assessment values to the roll values.

Finally, the court comments on two procedural

matters regarding appeals to the Regular Division that the

department argues support the proposition that a dismissal

must revert to the original act, order, omission, or deter-

mination of the taxing authority before the decision of the

Magistrate Division.

The first procedural matter addresses the form of

the complaint filed in the Regular Division. ORS 305.560(2)

provides that the taxpayer must establish in its complaint

how the taxpayer is aggrieved by the act, order, omission,

or determination of the taxing authority. Essentially, the

department argues that ORS 305.560(2) requires taxpayer to

show why the assessor was wrong and, if taxpayer fails to do

so, then the court must give effect to the original roll values.

The second procedural matter addresses the requirement,

in income tax matters, of the taxpayer to pay the amount

of the department’s assessment “on or before the filing of a

complaint with the regular division.” ORS 305.419(1).

Neither of these procedural matters changes the

analysis. First, the department’s view appears to fit nicely

when it is a taxpayer that is appealing from the decision of a

magistrate. The problem with the department’s construction

is easily demonstrated where the county, instead of the tax-

payer, loses in the Magistrate Division, and the county finds

itself appealing to the Regular Division in order to defend

its assessed values. One is certainly not aggrieved by one’s

own assessment actions. In that situation, the county is not

aggrieved by its own assessed values. What it is aggrieved

by is the decision of the magistrate. That is where ORS

Cite as 22 OTR 396 (2017) 419

305.570 provides that the county has standing to appeal to

the Regular Division. The pleading requirements contained

in ORS 305.560(2) do not change the requirement that, if a

party is dissatisfied by the magistrate’s decision, that party

must file a complaint as required by ORS 305.501.

As to the department’s second procedural point,

ORS 305.419(1) simply reflects a legislative policy that

taxpayers get one full and fair hearing before a magis-

trate before they are required to pay the tax assessment

or demonstrate hardship. The fact that a taxpayer would

only have standing to appeal to the Regular Division if the

taxpayer lost, at least in part, in the Magistrate Division,

means that the taxpayer failed to prove in the first instance

that the taxpayer’s claims are correct. A policy requiring

such a taxpayer to now pay the full assessment before liti-

gating further is irrelevant to the effect of a dismissal of a

complaint filed in the Regular Division.27

In sum, a motion to dismiss a plaintiff’s complaint

in the Regular Division for failure to state ultimate facts

sufficient to constitute a claim does not entitle the moving

party to affirmative relief, even assuming that the grant

of dismissal implies that the magistrate erred. A different

result would have been reached in a dismissal for lack of

subject matter jurisdiction,28 and a different result most

probably would have been reached had the department filed

a complaint in this court seeking review of the magistrate’s

decision.

This conclusion fits nicely within the statutory

scheme governing appeals to the Regular Division. If a

party is dissatisfied with a decision of the magistrate, that

party must file a complaint in the Regular Division. ORS

305.501(5)(a) and (d).

The conclusion of this court also fits within the

rules of this court regarding claims for relief. Claims for

relief must be raised in the pleadings. TCR 18 A(2). The

27

It is worth noting that this case is not an income tax case, and ORS

305.419(1) does not apply here.

28

Unless the lack of subject matter jurisdiction in the Regular Division did

not also extend to the Magistrate Division. See 22 OTR at 410 n 18.

420 Work v. Dept. of Rev.

only pleadings in which a claim for relief is allowed are com-

plaints and answers (to the extent they contain “counter-

claims”). TCR 13 B. Accordingly, even if this court is incor-

rect in its analysis in Village at Main Street with respect to

the availability of “counterclaims” after the 60-day appeal

period has expired, any such error does not save the depart-

ment here because the department has neither filed a com-

plaint nor an answer with a counterclaim.29

It is appropriate at this time to comment on the sit-

uation in which the department finds itself. The department

was not the assessing authority in this case. The depart-

ment was not named as a defendant in the Magistrate

Division. The department did not participate in the proceed-

ings of the Magistrate Division. And, the department was

not a party to this case until taxpayer filed a complaint in

the Regular Division naming the department as Defendant,

as required by statute. See ORS 305.501(5)(c) (requiring

the department to be named as the defendant in property

tax matters if a party other than the county appeals to the

Regular Division). It might appear that the department is

at a disadvantage in correcting alleged errors of the mag-

istrate when it might not be a party until the appeal to the

Regular Division.

However, the legislature has enacted a statutory

scheme designed to give the department substantial notice

of the occurrences in the Tax Court, and the power to react to

such notice as it deems fit. First, the Tax Court serves “cop-

ies of all complaints and petitions” filed in the Magistrate

Division (and Regular Division) on the department. ORS

305.560(1)(b). Second, the court serves copies of “any order

or judgment issued by the tax court” on the department.

ORS 305.560(4)(a). And third, the department may “[a]t any

time in the course of any appeal * * * intervene as a matter

of right.” Id.

The notice and intervenor power conferred on the

department by the legislature assists the department in

29

The court of course adheres to its decision in Village at Main Street because

the statutory provision governing appeals to this division, ORS 305.570, does not

contemplate a counterclaim. That statutory provision prevails over this court’s

rules.

Cite as 22 OTR 396 (2017) 421

carrying out its duty to supervise the tax laws of the state,

including the property tax system. ORS 305.015; see also

ORS 306.115; ORS 306.120.

The department finds itself in a situation which is

analogous to that of a taxpayer in a property tax matter. As

discussed by this court in Taft Church v. Dept. of Rev., 14

OTR 119, 122 (1997), aff’d, 326 Or 139, 950 P2d 313 (1997):

“Most taxpayers are familiar with our income tax systems

under which taxpayers keep the records and assess the tax,

and the government audits for accuracy and correctness. In

contrast, the property tax system requires the government

to keep the records and assess the tax, and the taxpayer

audits for accuracy and correctness. Both systems impose

time limits on the right to audit. A failure to audit and

challenge the assessment within the time limit will result

in a loss by the party responsible for the audit.”

(Emphases in original.)

Similarly, the department must monitor and “audit”

the actions and decisions of local assessors in property tax

matters, including stipulations by assessors and appeals,

to ensure accuracy and correctness. It may, of course, also

instruct assessors that any stipulation of value, including

MAV, must be reviewed by the department. Finally, the

department must be “vigilant” in reviewing what the mag-

istrate has done “so as to timely appeal” if it so desires.

Cf. Myslony v. Dept. of Rev., 21 OTR 146 (2013).

The department’s motion to dismiss is granted.

However, the result of that action is that the decision of the

magistrate, which was not appealed by the department, will

be given effect in a judgment of this court.

V. CONCLUSION

The department’s motion to dismiss is denied as to

lack of subject matter jurisdiction, but granted as to fail-

ure to state ultimate facts sufficient to constitute a claim

as to tax years 2010-11 through 2013-14, and for lack of

standing as to tax years 2014-15 and 2015-16. The depart-

ment’s motion is granted to the extent that it dismisses tax-

payer’s claims in this court, but the court grants no affir-

mative relief to the department. The assessment values

422 Work v. Dept. of Rev.

adjusted by the magistrate in his Final Decision were not

appealed by the department, and should therefore be given

effect. Now, therefore,

IT IS ORDERED that Defendant’s Motion to

Dismiss is granted.

The court will enter a judgment giving effect to

the assessment values determined by the magistrate in his

Final Decision.