Davis v. Att'y. General of the State of Miss., et al.
| Docket Number: | 2004-SA-02418-SCT Linked Case(s): 2004-SA-02418-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 05-11-2006 Opinion Author: RANDOLPH, J. Holding: AFFIRMED |
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| Additional Case Information: |
Topic: Tax assessment - Exhaustion of administrative remedies - Section 27-7-71 - Section 27-7-73 - Res judicata - Section 27-73-1 - Constitutionality of statute - Financial condition Judge(s) Concurring: SMITH, C.J., WALLER, P.J., EASLEY AND CARLSON, JJ. Non Participating Judge(s): DIAZ, J. Dissenting Author : GRAVES, J. Concurs in Result Only: COBB, P.J., AND DICKINSON, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES |
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| Trial Court: |
Date of Trial Judgment: 11-02-2004 Appealed from: Hinds County Chancery Court Judge: Stuart Robinson Disposition: Granted summary judgment in favor of Appellee Case Number: G-2004-268 R/1 |
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| Party Name: | Attorney Name: | |||
| Appellant: | FREDDIE L. DAVIS AND JEANETTE DAVIS |
A.N. CASTILLA, JOHN FLOYD FLETCHER, CORY RANDLE LANCASTER |
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| Appellee: | ATTORNEY GENERAL OF THE STATE OF MISSISSIPPI AND EXECUTIVE DIRECTOR OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION | ASHLEY MAY, ROMAINE LEVEAN RICHARDS, GARY WOOD STRINGER |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Tax assessment - Exhaustion of administrative remedies - Section 27-7-71 - Section 27-7-73 - Res judicata - Section 27-73-1 - Constitutionality of statute - Financial condition |
| Summary of the Facts: | In 1999, the Mississippi State Tax Commission assessed Freddie Davis and Jeanette Davis with additional income tax, penalties and interest for the tax years 1990 through 1995. Both the Board of Review and the Tax Commission considered and substantially upheld the initial assessment. On March 30, 2001, the Davises received the Order and had thirty days to pay the assessment or file a petition and bond in the chancery court. On May 11, 2001, they fully paid the assessment to the Tax Commission with an accompanying letter stating they were not appealing its final Order. Over two years later, on August 22, 2003, the Davises filed a refund claim with the Department of Finance and Administration. On November 13, 2003, an Opinion of the Attorney General denied the refund request. On December 3, 2003, the DFA denied the refund request based on the Opinion of the Attorney General. On February 19, 2004, the Davises filed a Complaint for Appeal and Review and/or Refund of Erroneously Paid Taxes in the Hinds County Chancery Court. The chancery court thereafter granted summary judgment in favor of the Attorney General of the State of Mississippi and the Executive Director of the Department of Finance and Administration, who had filed a Motion to Dismiss the Complaint for Appeal and Review and/or Refund of Erroneously Paid Taxes filed by Appellants. The Davises appeal. |
| Summary of Opinion Analysis: | Issue 1: Exhaustion of administrative remedies The Davises argues that the chancellor erred in finding they had failed to fully exhaust all administrative remedies, because they passed through all the administrative steps required under section 27-7-71. Upon exhausting the remedies provided under section 27-7-71, an appeal to the chancery court must be perfected within thirty days of receipt of the Tax Commission findings, as outlined in section 27-7-73. When the Davises accepted the Tax Commission determination and paid the tax, the Tax Commission findings became final under section 27-7-73. They had the option, within thirty days of receiving notification of the Tax Commission determination, of paying the tax or appealing under section 27-7-73. Because the Davises affirmatively accepted the Tax Commission ruling and paid the tax instead of appealing to the chancery court, the Tax Commission ruling became the final adjudication. Issue 2: Res judicata The Davises argues that the chancellor erroneously concluded that section 27-73-1 was not a viable alternative to section 27-7-73. Section 27-7-73 permits a taxpayer to seek judicial review of the Tax Commission’s Order without first paying the contested taxes, if the taxpayer appeals within thirty days of receiving the Tax Commission Order and provides an appeal bond equal to two times the amount in controversy. Conversely, section 27-73-1 is available when the taxpayer first pays the contested taxes, avoiding potential penalties and interest if incorrect in his assertions, and then seeks administrative review for a refund of taxes paid through error or otherwise if (and only if) such payment was in error or an overpayment. The Davises argue that they had the option of either avoiding paying the contested tax by posting an appeal bond within thirty days of the Tax Commission’s determination under section 27-7-73 or paying the contested tax and seeking a refund under Section 27-73-1. As such, the Tax Commission’s Order would only become final and unreviewable upon the expiration of the three-year statute of limitations applicable to section 27-73-1. Res judicata or collateral estoppel precludes relitigation of administrative decisions. Both sections 27-7-71, -73 and Section 27-73-1 were available to the Davises when the action was initially commenced. However, when they chose to seek relief under sections 27-7-71 and -73, they also became bound by the provisions of those statutes and the resulting outcome. When the Davises chose not to appeal the Tax Commission’s determination and paid the tax, finality attached under section 27-7-73. As the doctrines of res judicata and collateral estoppel apply to administrative decisions, the finality of section 27-7-73 judicially forecloses the Davises from now utilizing section 27-73-1. In addition, the statute of limitations would have expired, assuming a section 27-73-1 action were permissible, under this set of facts. Issue 3: Constitutionality of section 27-7-73 Because the Court has determined that both sections 27-7-71 and -73 and section27-73-1 were available to the Davises when the action was initially commenced, any argument regarding the unconstitutionality of section 27-7-73 is misplaced. The Davises became bound by the provisions of sections 27-7-71 and -73 when they elected to seek relief thereunder. Issue 4: Financial condition The Davises argue that the chancellor failed to consider whether their financial condition in 2001 precluded them from proceeding under section 27-7-73. Since the Davises failed to appeal or otherwise seek relief from the Tax Commission’s Order within 30 days of receiving notice, that Order became final and is non-appealable. Any attempt to circumvent that finality is barred under the doctrines of res judicata and collateral estoppel. |
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