In the Matter of Protest Appeals of LYERLA, KATHY L. LIV. TRUST, et al., for Tax Year 2011 in Johnson County, Kansas
As Amended October 20, 2014
As Amended October 28, 2014.
Appeal from Court of Tax Appeals.
Reversed, vacated in part, and remanded with directions.
BY THE COURT
1. Neither K.S.A. 2011 Supp. 74-2433f(e) nor K.S.A. 2011 Supp. 74-2437 give the Court of Tax Appeals the authority to adopt regulations that would set jurisdictional requirements for parties appearing before it.
2. If a timely notice of appeal is filed with the Court of Tax Appeals, the failure to have the proper party sign that notice does not deprive the Court of Tax Appeals of jurisdiction over the appeal.
3. Administrative agencies are created by statute, so they have only the powers granted by statute. The Court of Tax Appeals has no authority to determine the validity of contractual agreements between taxpayers and those hired by the taxpayers to represent them before the Court of Tax Appeals. Nor does the Court of Tax Appeals have authority to determine whether a party is engaging in the unauthorized practice of law or whether an attorney is violating attorney-ethics rules.
4. Like any administrative agency exercising quasi-judicial authority, the Court of Tax Appeals may question its own authority or jurisdiction to hear a matter. Accordingly, the Court of Tax Appeals may take steps to determine whether the real party in interest is before it.
5. On the facts of this case, where the judges of an administrative-law court have concluded that the representatives of a party lack credibility (one as a witness sworn under oath and the other as an attorney who must make truthful representations to a tribunal) and have conducted an inquisition on matters beyond the agency's jurisdiction to the detriment of the party, a reasonable person would lack confidence that the judges could provide a fair and impartial hearing. Accordingly, in this circumstance, the failure of these judges to recuse from further proceedings in the case would be unreasonable under K.S.A. 2013 Supp. 77-621(c)(8).
R. Scott Beeler and Carrie E. Josserand, of Lathrop & Gage LLP, of Overland Park, and Linda Terrill, of Property Tax Law Group, LLC, of Leawood, for appellant taxpayers.
Kathryn D. Myers, assistant county counselor, of Olathe, for appellee Board of Johnson County Commissioners.
Before POWELL, P.J., LEBEN and ARNOLD-BURGER, JJ.
Five taxpayers who appealed tax valuations to the Court of Tax Appeals saw their appeals dismissed by that body because their appeal notices had been signed by non-attorneys. In addition, even though the Court of Tax Appeals ultimately concluded that it had no jurisdiction to hear the appeals, it ruled in some of the cases that the contractual agreements between the taxpayers and those they hired to represent them before the Court of Tax Appeals (an attorney and a tax-appraisal firm) were void as against public policy.
The taxpayers have appealed to this court, arguing that the Court of Tax Appeals should neither have dismissed their appeals nor addressed the validity of their contractual arrangements with the attorney and tax-consulting firm. We agree. Any problem with the signature on the appeal notices would have been a correctable matter, not a jurisdictional hurdle that should have prevented the Court of Tax Appeals from considering the appeals. And the Court of Tax Appeals has no statutory authority to determine the validity of contractual arrangements between a taxpayer and a third party the taxpayer hires to represent it. We therefore reverse the decision of the Court of Tax Appeals and remand these appeals for further proceedings.
Factual and Procedural Background
Five separate tax appeals, all from Johnson County, have been consolidated into one appeal. In all five cases, the taxpayers appealed real-property valuations, and the Court of Tax Appeals dismissed the appeals for lack of subject-matter jurisdiction. All of the taxpayers are corporations, trusts, or some other form of artificial entity, i.e., they are not individuals owning property in their own name. And the notices of appeal for all the taxpayers were filed by non-attorneys who had been hired to assist with the tax appeals but who were not otherwise employees or owners of the taxpayers.
Three of the taxpayers--the Kathy L. Lyerla Living Trust, MBS Barkley 1031, LLC, and ACDC Investments, LLC--filed their appeals in the small-claims division of the Court of Tax Appeals. The other taxpayers--Flik, Inc., and THF College Boulevard, L.L.C.--filed their appeals in the regular division of the Court of Tax Appeals.
Flik and THF College Boulevard hired tax consultants (Property Tax Services, Inc., and Hollrah and Fricke, Inc., respectively) to handle their tax appeals. Non-attorney employees of those companies signed and filed the notices of appeal.
The other taxpayers all hired J.W. Chatam & Associates, Inc., a tax-consulting firm, to handle their tax appeals, and a non-attorney employee of Chatam signed and filed the notices of appeal for those taxpayers. When the taxpayers didn't get any relief from their tax assessments from the small-claims division, they each pursued a further appeal to the regular division. Attorney Linda Terrill filed a notice of appeal in the regular division for each taxpayer.
That summarizes the relevant history for the appeals of Flik and THF College Boulevard. But quite a bit more took place in the appeals involving the Lyerla Living Trust, MBS Barkley 1031, and ACDC Investments.
In the appeal by the Lyerla Living Trust, Johnson County and Terrill reached an agreement to a reduced appraised value and submitted a proposed order reflecting that agreement. But the Court of Tax Appeals refused to consider the merits of any of these taxpayers' appeals or to accept the parties' agreement on the proper valuation for the property in the Lyerla case because it concluded that a non-attorney cannot sign the notice of appeal for a corporate or artificial entity. Based on that ruling, the Court of
Tax Appeals concluded that none of the taxpayers had filed ...