Appeal from Shawnee District Court; TERRY L. BULLOCK, judge.
1. Under K.S.A. 77-607(a), a person who has standing, has exhausted administrative remedies, and has timely filed a petition for judicial review is entitled to judicial review of a final agency action.
2. The terms final agency action and final agency order are not synonymous. A final agency action is the whole or a part of any agency action other than a non-final agency action.
3. Under the facts of this case, the decision by the Board of Tax Appeals requiring the appellant to disclose confidential in-house information as part of discovery was a final agency action. The decision left nothing unresolved on the discovery issue before the Board of Tax Appeals except the decision's enforcement. Therefore, the decision was ripe for judicial review.
4. Judicial review of orders by the Board of Tax Appeals is governed by K.S.A. 77-621. For purposes of this appeal, this court is required to grant relief if: (1) the agency has erroneously interpreted or applied the law, K.S.A. 77-621(c)(4); (2) the agency action is based on a factual determination, made or implied by the agency, not supported by substantial evidence when viewed in light of the whole record, K.S.A. 77-621(c)(7); or (3) the agency action is otherwise unreasonable, arbitrary, or capricious, K.S.A. 77-621(c)(8).
5. Ordinarily, the enforcement of a subpoena duces tecum is left to the discretion of the enforcing tribunal. Nevertheless, a subpoena duces tecum is subject to K.S.A. 60-245(b), and it must be relevant and not unreasonable or oppressive.
6. Under K.S.A. 79-1456, a county appraiser is obligated to follow the Oil and Gas Appraisal Guide prescribed by the Director of Property Valuation in valuing a taxpayer's oil and gas properties. A county appraiser may deviate from the Oil and Gas Appraisal Guide on an individual piece of property only upon a showing of just cause and in a manner consistent with achieving fair market value.
7. In this case, the taxpayer's confidential in-house information relating to its oil and gas properties was never used by either the taxpayer or the county in their valuation processes. Moreover, the Oil and Gas Appraisal Guide does not prescribe the use of a taxpayer's confidential in-house information in valuing oil and gas-producing properties. Consequently, the taxpayer's confidential in-house reserves information was not relevant to the equalization proceedings before the Board of Tax Appeals in this case.
8. Under the facts of this case, the county never met the "just cause" requirement under K.S.A. 79-1456 to deviate from the valuation methods prescribed by the Oil and Gas Appraisal Guide. The county cannot circumvent this "just cause" requirement by obtaining information not called for under the Oil and Gas Appraisal Guide through discovery and using this information to establish the value of the taxpayer's properties.
The opinion of the court was delivered by: Green, J.
Before GREEN, P.J., ELLIOTT and HILL, JJ.
Cimarex Energy Co. (Cimarex) appeals from the trial court's judgment upholding the State Board of Tax Appeals (BOTA) discovery order compelling Cimarex to disclose in-house information concerning its remaining recoverable oil and gas reserves to the Seward County Board of County Commissioners (County). In ordering Cimarex to disclose its confidential in-house reserves information, BOTA found that such information was relevant because it could be probative of the fair market value of Cimarex's oil and gas producing properties. On appeal, Cimarex contends that BOTA's decision was not supported by substantial evidence and that the decision was contrary to the law. We agree.
Under K.S.A. 79-1456, a county appraiser is obligated to follow the Oil and Gas Appraisal Guide (Guide) prescribed by the Director of Property Valuation in the valuation of oil and gas producing properties. No part of the Guide calls for the use of a company's confidential in-house reserves information in the valuation of oil and gas properties. The County concedes that neither it nor Cimarex used Cimarex's confidential in-house reserves information in valuing Cimarex's oil and gas properties. The County, however, argues that it should be able to look at Cimarex's confidential in-house reserves information in order to determine whether Cimarex's valuation under the Guide arrives at fair market value. Nevertheless, because Cimarex's confidential in-house reserves information was never used by either Cimarex or the County in their valuation processes and because the Guide does not prescribe the use of such information in valuing oil and gas-producing properties, the information was not relevant to the proceedings before BOTA.
Moreover, a county appraiser may deviate from the Guide on an individual piece of property only upon a showing of just cause and in a manner consistent with establishing fair market value under K.S.A. 79-1456. Because the County in this case never showed "just cause" to deviate from the valuation method prescribed by the Guide, Cimarex's confidential in-house reserves information was not relevant to a valuation of the property. Therefore, BOTA's finding of "relevance" was not supported by substantial evidence, and its decision was contrary to K.S.A. 79-1456. Accordingly, we reverse BOTA's order compelling Cimarex to disclose its in-house reserves information.
This case arose out of a K.S.A. 79-1448 equalization proceeding which Cimarex brought before BOTA concerning the valuation of one of its oil producing properties and five of its gas producing properties in Seward County, Kansas, for the 2002 tax year. Apparently, the 2002 property tax return was actually filed by Helmerich & Payne. Helmerich & Payne later merged with Cimarex, and Cimarex took over the oil and gas producing properties at issue in this case.
During the course of the administrative proceedings, the County sought and obtained a subpoena for Cimarex to produce documents concerning its in-house oil and gas reserves estimates. Apparently, Cimarex provided some of the requested documents and served the County with its limited objections to disclosing the remainder of the requested information. The County later sought and obtained another subpoena for Cimarex to produce additional information concerning its reserves.
When Cimarex failed to produce the requested documents, the County moved for BOTA to issue an order compelling discovery. Cimarex responded to the County's motion to compel and moved to quash portions of the County's subpoena, arguing: (1) that the information was so highly confidential that a protective order could not provide adequate protection; (2) that the information was not relevant to determining the value of oil and gas producing properties in Kansas for property tax purposes and that the use of such information would be contrary to the uniform valuation procedures set forth in the Guide; and (3) that the requirement of disclosure of such information would have a "chilling effect" on operators seeking review of a county's property tax assessment.
After an evidentiary hearing on the matter, BOTA issued an order granting the County's motion to compel discovery and denying Cimarex's motion to quash.
Cimarex petitioned the Seward County district court for review of BOTA's decision. The case was later transferred to the Shawnee County district court. In a memorandum decision and order, the trial court upheld BOTA's order compelling discovery. The trial court, however, limited the required disclosure to the reserves information for Cimarex's wells in Seward County that were at issue in this case. Cimarex appealed the trial court's order to this court. This court issued an order requiring the parties to show cause why the appeal, which appeared to be interlocutory in nature, should not be dismissed for lack of jurisdiction. After both parties responded to the show cause order, this court retained the case and directed the parties to address the issue in their appellate briefs.
The County argues that this court should dismiss the present action for lack of jurisdiction because the action is based on an interlocutory discovery order. Whether jurisdiction exists presents a question of law over which this court's review is unlimited. Riedmiller v. Harness, 29 Kan. ...