Villines v. Harris

Richard Lusby, Special Justice, concurring in part; dissenting in part. I concur with the majority view that the circuit court lacked authority to issue injunctive relief in this case. It may well be that the court could have concluded that appellee now has an adequate remedy at law in her claim for monetary damages, denying appellee injunctive relief on that basis. Nevertheless, I do agree there is an absence of persuasive precedent granting circuit courts the power to issue injunctions. I disagree with the majority with respect to its refusal to address subject-matter jurisdiction and the related illegal-exaction issue.

I. Interlocutory Appeal

The majority noted that this is an interlocutory appeal permitted by Ark. R. App. P. — Civ. 2(a)(6) (1999) pertaining to injunctions. Citing Coleman’s Service Ctr., Inc. v. Southern Inns Management, Inc., 44 Ark. App. 45 , 866 S.W.2d 427 (1993), the court concluded it could not take up any issue other than the circuit court’s authority to grant injunctive relief. However, the court of appeals refused to take up other issues in Coleman’s Service Ctr., Inc. because those issues were “totally unrelated” to the question that was the basis of the interlocutory appeal. Id. at 429. That is not true in the matter now before this court.

In the proceedings below, appellant contended that the circuit court lacked subject-matter jurisdiction. Before granting appellee the injunctive relief requested, the circuit court specifically determined that it did have such jurisdiction. On appeal, appellant not only argues that circuit courts lack power to grant injunctive relief, it again contends that this circuit court lacks subject-matter jurisdiction in the circumstances of this case.

The circuit court’s granting of relief in inextricably bound up in its decision that it had subject-matter jurisdiction. Both below and on appeal, the question of subject-matter jurisdiction is at the heart of the parties’ battle over the appropriateness of the circuit court’s grant of injunctive relief. Under the circumstances, it simply cannot be fairly said that the issue of subject-matter jurisdiction is “totally unrelated” to the injunction which provides the basis for this interlocutory appeal.

The majority concluded that the court cannot take up the issue of subject-matter jurisdiction. The court can take up this issue and if it can, it should. A refusal to do so makes a second appeal almost inevitable. Depending upon the outcome of a second appeal that does resolve the subject-matter jurisdiction issue, the parties’ effort, time, and expense in prosecuting a damage action may well be for naught. I agree this court should not violate its rules and principles simply for the sake of economy. However, where the court, by acting now within its guidelines, can foreclose the necessity of an additional appeal or other legal action, I believe it should.

II. Subject-Matter Jurisdiction and Illegal Exaction

Appellee contends, and appellant vigorously denies, that the case now before the court involved an illegal exaction. If this is an illegal-exaction case, it is beyond question that the circuit court does have subject-matter jurisdiction. Ark. Const art. 16, § 13; Barclay v. Melton, 339 Ark. 362 , 5 S.W.3d 457 (1999); Barnhardt v. City of Fayetteville, 321 Ark. 197 , 900 S.W.2d 539 (1995). However, appellee concedes that the actions of the county in collecting the tax in this case do not fit within the accepted definition of an illegal exaction. Consequently, appellee frankly asks the court to expand the definition of illegal exaction to apply to the circumstances of this case thereby establishing subject-matter jurisdiction in the circuit court.

As set forth in the background provided in the majority opinion, this case involves the collection of taxes based upon a flawed reappraisal. I agree this court has thus far excluded from the definition of illegal exaction, taxes based upon faulty appraisals and assessments. Pockrus v. Bella Vista Village Property Owners Assn., 316 Ark. 468 , 872 S.W.2d 416 (1994); Scott County v. Frost, 305 Ark. 358 , 807 S.W.2d 469 (1991); McIntosh v. Southwestern Truck Sales, 304 Ark. 224 , 800 S.W.2d 431 (1990). I would not broaden the definition of illegal exaction to include such matters. However, the facts in this case go beyond the simple situation of a tax based upon a flawed assessment. Here, the county was faced with the need for property reappraisal. The county chose between two statutory methods for conducting the reappraisal process. The statutory provisions appropriate for these particular circumstances involved public notice and the opportunity for property owners to participate in the process. Ark. Code Ann. § 26-26-601 , et seq. The county chose a method that did not involve the public’s participation. Ark. Code Ann. § 26-27-311 .

As egregious as this decision may have been, it cannot be the basis for an illegal-exaction case, pursuant to the precedents cited above. However, there is more involved here than a taxing authority’s determination to exclude taxpayers from the process. The appellant, having been denied relief by the Board of Equalization, filed suit in county court, seeking to prevent the county from collecting taxes based upon the flawed reappraisal process. The county court agreed that the reappraisal was flawed and gave declaratory relief but denied an injunction, based upon its determination that it lacked authority to provide such relief. Appellant immediately filed suit in chancery court, seeking the additional relief which the county court could not give. Despite notice by a court of competent jurisdiction that its reappraisal process violated the statute, and despite notice of ongoing litigation to enforce the county court’s order, the county went forward to collect taxes based upon a reappraisal that was contrary to statutory law. Stated another way, the county knowingly collected taxes based upon an appraisal that had been declared to be illegal. It is this action of the county that I believe renders the tax collected an illegal exaction.

While the facts described herein do not precisely fit under accepted notions of illegal exaction, I believe the definition should be broadened just enough to include such circumstances. The county’s wrongful exclusion of property owners from the process was bad enough. The county’s inexplicable action, ignoring the court’s order, cannot be allowed to stand. As a practical matter, reversing the trial court’s decision without addressing subject-matter jurisdiction may well do just that.

I share a reluctance to take any action likely to generate unwarranted litigation or undermine the ability of county government to collect legal taxes. However, I do not believe this narrow expansion of existing law would unduly open the door to a flood of illegal-exaction cases. Hopefully, the action of Pulaski County ignoring a court order will not be repeated in this county or any other.

Undoubtedly, there would have been much consternation in Pulaski County government had the majority determined the county’s collection of the tax to be an illegal exaction. I am confident that this consideration played no part in the majority’s refusal to take up this issue. Certainly, such matters should not be of concern to the court. Whatever consequences might flow from a determination that an illegal exaction occurred would be the result of Pulaski County’s blatant disregard of an explicit decision by the county court and applicable statutory law. I would remand this case back to the circuit court for proceedings on damages with a clear statement that the circuit court has subject-matter jurisdiction by virtue of the fact that an illegal exaction has occurred.

Special Justice JAMES E. Baine joins.