Indiana Tax Court affirms Voluntary Dismissals of Property Tax Appeals, where Assessor had not incurrred a “Substantial Expense”

Indiana Tax Court affirms Voluntary Dismissals of Property Tax Appeals, where Assessor had not incurrred a “Substantial Expense”

Indiana Tax Court affirmed the voluntary dismissals of property tax appeals. Assessor had not incurred substantial expenses (having spent little time and conducted limited discovery) and was not legally prejudiced.

Assessor had spent little time with limited discovery prosecuting case

Name: Marion County Assessor v. Stutz Business Center, LLC

Date Issued: August 30, 2019

Property Type: Vacant land

Assessment Years: 2012-2014

Point of Interest: Assessor challenged the Indiana Board’s granting of Taxpayer’s voluntary withdrawals following a discovery dispute. Assessor had not filed a counter claim or its equivalent. Tax Court affirmed the dismissals, because no evidence showed that Assessor had incurred substantial expenses in the litigation or was legally prejudiced.  

Synopsis: Before the Indiana Board of Tax Review, the Assessor had objected to the Notice of Withdrawal of Appeals filed by Taxpayer (“SBC”), claiming he had incurred substantial expense as a result of discovery disputes and would be prejudiced because the time to seek increases of assessments for the property outside the appeals process had passed. SBC responded that Indiana Trial Rule 41(A)(1)(a) allowed the withdrawal of its appeals without an order from the Board. The Board dismissed the appeals, noting that Assessor did not submit proof of the purported substantial expenses and the proceedings were not yet at an advanced stage.

On appeal (and following the Court’s denial of SBC’s motion to dismiss), the Court first explained that Trial Rule 41(A)(1) governs the voluntary dismissal of cases and specific claims. “The purpose of the Rule is to eliminate evils resulting from the absolute right of a plaintiff to take a voluntary nonsuit at any stage of the proceedings before the pronouncement of judgment and after the defendant had incurred substantial expense or acquired substantial rights.” (citation and internal quotes omitted). Regarding the rule’s application to an administrative appeal, where no responsive pleading is required, the Court observed that its ruling in Joyce Sportswear Co. v. State Bd. of Tax Comm’rs, 684 N.E.2d 1189 (Ind. Tax Ct. 1997), addressed the issue. Whether a voluntary dismissal is permitted depends on “whether the party opposing the dismissal can demonstrate either a substantial expense or legal prejudice.” (citing Joyce Sportswear, 684 N.E.2d at 1193, internal quotes omitted).

The Board articulated specific facts showing the proceedings had not reached an advanced stage. And the facts demonstrated that the Assessor had spent little time over more than two years on the appeal. Moreover, the parties’ limited discovery dispute did not evince that Assessor had incurred substantial expense. The Court, furthermore, stated that “the attorney’s fees incurred in a routine property tax proceeding, like here, cannot, without more, rise to the level of a substantial expense.” (citations omitted, emphasis in original). Finally, without a counterclaim or an equivalent assertion seeking an increase in place, the Court held, “[T]he Assessor did not acquire either a substantive or a vested right to increase [SBC’s] assessments upon the filing of its administrative appeals.”

The Court affirmed the Board’s ruling permitting the dismissals.

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