Lee v. Douglas County Tax Collector

• Court: Oregon Tax Court
• Decided: November 22, 2022
• Docket: TC-MD 220384R
• Status: Unpublished

Opinion

IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax

JANET H. LEE, ) ) Plaintiff, ) TC-MD 220384R, 220385R v. ) ) DOUGLAS COUNTY TAX COLLECTOR, ) ORDER GRANTING DEFENDANT’S ) MOTION FOR JUDGMENT ON THE Defendant. ) PLEADINGS

Plaintiff appeals Defendant’s denial of a property tax discount, the imposition of interest,

and two returned payment fees for the 2021-22 tax year. This matter came before the court on

Defendant’s Motion for Judgment on the Pleadings (Motion), filed August 23, 2022. During the

case management conference held September 8, 2022, Plaintiff agreed to file a response to

Defendant’s motion by September 22, 2022. Plaintiff filed her letter in response (Response) to

Defendant’s Motion on September 8, 2022, and an additional letter on September 22, 2022.

I. STATEMENT OF FACTS

Plaintiff owns property in Douglas County, Oregon, identified as Accounts R42964 and

R54417 (subject property). (Ans at 3.) On November 15, 2021, using Defendant’s online

electronic payment system, Plaintiff attempted to pay the subject property tax, so that she could

take advantage of the statutorily provided three percent discount for paying in full, on or before

November 15. (See Compl at 2.) At 7:39 PM on November 15, Plaintiff received an email

confirmation of her payment of $3,049. (Id. at 3.)1

On November 19, 2021, Defendant notified Plaintiff via email that her payment had been

1 Plaintiff only filed an email confirmation of her $3,049 payment toward tax account R54417 with this court. (Compl at 3.) However, on November 15, 2021, Plaintiff also attempted to submit payment toward tax account R42964. (Ans at 3.) Plaintiff’s attempted property tax payments on November 15, 2021, totaled $7,966. (Id.)

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 1 returned because the bank account from which she attempted to pay was frozen. (Compl at 4.)2

That same day, Plaintiff submitted new payments using a different bank account and received an

accompanying email confirmation of such payment. (Id. at 5.)

On January 31, 2022, Defendant notified Plaintiff by letter that she had been charged a

$25 returned payment fee per account, due to her returned payments on November 15. (Ans at

3.) On April 26, 2022, Defendant mailed Plaintiff two installment notices, each of which

indicating that the corresponding tax account had not yet accrued any interest. (Ptf’s Ltr, Sept

22, 2022.) In May of 2022, Defendant again mailed Plaintiff a letter stating that she was

ineligible for the discount, that she remained responsible for the two returned payment fees, and

charging her interest. (Compl at 2.)

In her complaint, Plaintiff alleged that she called Defendant numerous times between

November and December of 2021 and that Defendant told her that she had not been charged any

additional fees and that she did not overpay. (Compl at 2.) However, also in her complaint,

Plaintiff admitted that the payment “mistake was from the account [she] closed in January 22.”

(Id.)

II. ANALYSIS

Although motions for judgment on the pleadings are generally not favored by the courts,

such motions may be useful “when the answering party admits all material facts in a pleading

and denies only legal conclusions.” Buras v. Dept. of Rev., 17 OTR 282, 284 (2004), aff’d, 338

Or 12, 104 P3d 1145 (2005). This court has previously stated:

“To withstand judgment on the pleadings, a taxpayer must allege the existence of facts that, within an articulated legal position, provide a basis for relief to a

2 Plaintiff only filed documentation with this court showing that her payment toward tax account R54417 had been returned. (Compl at 4.) However, Plaintiff’s entire November 15, 2021, payment of $7,966 was returned. (Ans at 3.)

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 2 taxpayer. For example, where a taxpayer claims that an item of income is exempt or excluded from income, a taxpayer must allege: (1) a legal framework establishing the exemption or exclusion, and (2) facts that, if true, would satisfy the burden of proving the factual elements of the exemption or exclusion.”

Beeler v. Dept. of Rev., 18 OTR 456, 458 (2006) (internal quotations and citation omitted). In

ruling on Defendant’s Motion, the court assumes that all of the well-pleaded facts in Plaintiff’s

complaint are true.3

The issues presented are (1) whether Plaintiff is entitled to a property tax discount under

ORS 311.505, (2) whether Plaintiff is liable for the returned payment fees, and (3) whether

Plaintiff is liable for the accrued interest.4

A. Discount

ORS 311.505 states, in pertinent part, that a one-third payment of property taxes owed is

due on or before November 15 of each year. ORS 311.505(1). Payments of two-thirds or more,

made on or before November 15, are entitled to a discount. ORS 311.505(3). A two-thirds

payment is entitled to a two percent discount. ORS 311.505(3)(a). Full payments are entitled to

a three percent discount. ORS 311.505(3)(b). “There is no statutory requirement that the county

assessor or tax collector notify a taxpayer that the deadline to qualify for the three percent

discount has passed.” O’Neill v. Multnomah Cty. Assessor, TC-MD 110957D, WL 851666 at *2

(Or Tax M Div, Mar 13, 2012).

In Kusuma v. Washington County Assessor, TC-MD 210022R, WL 100005 at *1 (Or Tax

3 Because Plaintiff did not attach a copy of the document from which she was appealing to her complaint, the court also assumes that the facts alleged in Defendant’s Motion, Plaintiff’s Response, and Plaintiff’s letter dated September 22, 2022, are true for purposes of this order. See ORS 305.501(4)(a) (“[A] a magistrate is not bound by common law or statutory rules of evidence or by technical or formal rules of procedure, and may conduct the hearing in any manner that will achieve substantial justice”). 4 The court's references to the Oregon Revised Statutes (ORS) are to the 2019 edition, unless otherwise indicated.

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 3 M Div, Jan 11, 2022), the taxpayers attempted to pay the subject property tax online, on

November 11, 2020, to take advantage of the three percent discount, but mistakenly entered the

tax account number in the bank account number field, so their payment was rejected by the bank

on November 18. The taxpayers were not made aware of the failed payment until November 19.

Id. Among other things, the taxpayers argued that they would have been eligible for the discount

but for the defendant’s delay in notifying them of the failed payment. Id. at *2. Recognizing

that “[t]his court has long held it is ultimately the responsibility of the property owner to see that

the taxes are paid[,]” the court found that the taxpayers did not meet their burden of proof in

establishing that they were eligible for the discount. Id. at *4 (internal quotations and citation

omitted). The court further noted that even if the defendant had notified the taxpayers earlier of

their failed payment, the taxpayers still would not have been eligible for the discount because the

defendant’s payment processor itself was not notified of the rejection from the taxpayers’ bank

until November 18—after the discount deadline. Id. Finally, the court noted that the taxpayers

themselves had the ability to monitor their bank account to see if the funds had been withdrawn.

Id.

Like in Kusuma, Plaintiff’s attempted payment on November 15 failed due to her own

mistake. That is, as Plaintiff conceded in her complaint, her payment failed because she

attempted to pay from a bank account that was set to be closed in January of 2022. Defendant

had no obligation to notify Plaintiff of her failed payment. Plaintiff had the sole responsibility of

monitoring her bank account to confirm that the funds had been withdrawn, but she failed to do

so. Even had Defendant notified Plaintiff sooner of her failed payment, she still would have

been ineligible for the discount because her attempted payment was not confirmed until after

business hours on November 15. Defendant would have been unable to notify Plaintiff until

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 4 November 16 at the earliest, although Defendant likely was not aware itself of the failed payment

by that date. See Kusuma, WL 100005 at *4 (“[I]t can take between seven and ten days for an

[automated clearinghouse] payment initiated on [the Washington County Assessor’s] website to

be fully processed”).

In Docekal & Moyer LLC v. Clackamas County Assessor, TC-MD 110863C, WL

1245610 at *1 (Or Tax M Div, Apr 10, 2012), the taxpayer was denied a discount after making a

payment of the full amount minus the three percent discount on November 15 because the bank

erroneously returned her check. Despite the bank’s error, the court upheld the denial of discount

finding that the taxpayer “had the duty to ensure that a negotiable instrument was tendered to

Defendant by the tax deadline.” Id. at *3.

During the case management conference held September 8, 2022, Plaintiff indicated that

the bank may have erroneously denied her payment. Whether or not the bank erroneously denied

Plaintiff’s payment, such as in Docekal, is an issue beyond the scope of the case presently before

the court. Even if the bank erred, Plaintiff had a duty to ensure that her payment was processed

in a timely manner. The bank’s potential error does not relieve Plaintiff of potential

responsibility or liability.

The court finds that Plaintiff has not alleged any facts that provide a basis for the

requested relief and therefore concludes that Plaintiff was not eligible for a discount on her 2021-

22 property tax statement. The court accordingly finds that Plaintiff is liable for each of the

returned payment fees associated with her failed payment on November 15, 2021.

///

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 5 B. Interest

The second issue is whether Plaintiff is liable for any accrued interest on her outstanding

property taxes for the 2021-22 tax year.

ORS 311.505(2) provides:

“Interest shall begin to accrue, and shall be collected, at the rate of one and one- third percent per month, or fraction of a month, until paid, on any taxes on property, * * * not paid on or before the following dates:

“(a) December 15, for the first one-third;

“(b) February 15, for the second one-third; and

“(c) May 15 next following, for the remaining one-third.”

It is undisputed by the parties that Plaintiff had paid more than two-thirds of her property taxes

by February 15, 2022. Thus, interest did not begin to accrue on Plaintiff’s outstanding balance

until May 16, 2022. See ORS 311.505(2)(c).

ORS 305.145 provides, in pertinent part, that:

“[A] county tax collector shall waive interest on an assessment if the taxpayer has failed to make a timely payment * * * because:

“(a) An employee of the department or of a county tax collector acting in an official capacity, who had knowledge of the necessary facts, misled the taxpayer either by some erroneous factual representation or by a course of dealing or conduct;

“(b) The taxpayer relied on the misleading factual representation or conduct; and

“(c) The taxpayer failed to make a timely payment * * * by reason of the taxpayer's reliance on the information or course of conduct.”

ORS 305.145(1)(a)-(c).

Discussing the legislative history of ORS 305.145(1) in Stancorp Financial

Group, Inc. v. Dept. of Rev., TC-MD 070881B, WL 3654427 at *10 (Or Tax M Div, Aug

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 6 18, 2011), this court previously found that House Bill 2601, which passed in 1987 and

created ORS 305.145(1), “was drafted with the express purpose of mirroring the language

of estoppel case law” and “was intended to codify estoppel principles for waiver of

interest.”5 Thus, this court looks to estoppel case law in determining whether the well-

pleaded facts in Plaintiff’s complaint, taken as true, provide a basis for relief.

Estoppel may only be granted “when there is proof positive that the collector has

misinformed the individual taxpayer.” Johnson v. State Tax Comm'n, 248 Or 460, 463,

435 P2d 302 (1967). “[T]his court has found such proof in incorrect or misleading

documents sent by taxing authorities to the taxpayer.” Webb v. Dept. of Rev., 18 OTR

381, 384 (2005). “[T]here are few cases in which an Oregon court has considered oral

communication to constitute a part of proof positive.” Pippenger v. Lane Cty. Assessor,

TC-MD 100141D, WL 3264283 at *3 (Or Tax M Div, Aug. 19, 2010) (citations omitted).

To meet the proof positive standard for oral communications, the taxpayer must provide

“detailed memoranda that are written contemporaneously with the communications and

that corroborate the taxpayer's recollection of them” or describe “the communications in

great detail, including the nature, date, and time of each conversation; the names and

relationships to the parties of all those who took part in each conversation; those persons'

knowledge of taxpayer's situation and of the relevant law; and the exact statements made

as well as their form and intended meaning.” Webb v. Dept. of Rev., 19 OTR 20, 26

(2006). “Mere testimony that the government orally misguided the taxpayer, is generally,

by itself, insufficient.” Schellin v. Dept. of Rev., 15 OTR 125, 131 (2000).

5 A taxpayer must prove three elements to succeed on a claim of estoppel: “(1) misleading conduct on the part of the defendant(s); (2) taxpayer's good faith reliance on that conduct; and (3) injury to taxpayer.” Hoyt Street Properties LLC v. Dept. of Rev., 18 OTR 313, 318 (2005) (citations omitted).

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 7 Here, Plaintiff alleges that between November and December of 2021, she was

misled numerous times over the phone by Defendant to believe that she had received the

discount and that she would not be charged any additional fees. Plaintiff raises this

allegation in three sentences of her own written testimony and does not offer any

additional evidence. As indicated above, Plaintiff’s mere testimony is insufficient. In the

pleadings, Plaintiff failed to meet her burden of proof by failing to provide detailed

memoranda written contemporaneously with the communications or by describing the

communications in great detail. Even had Plaintiff met this higher standard, in her own

complaint, Plaintiff attached an email payment confirmation from Defendant dated

November 19, 2021, that reflected that she still had an outstanding property tax balance

of $109. (Compl at 5.) That is, Plaintiff provided evidence indicating that Defendant had

expressly informed her, in writing, that she still had an outstanding property tax balance.

Defendant’s November 2021 notification left Plaintiff with ample time to pay her

outstanding balance before interest began accruing in May 2022. The court concludes

that the facts alleged in Plaintiff’s complaint fail to provide a basis for relief from the

assessed interest under ORS 305.145.

III. CONCLUSION

After careful consideration, the court concludes that Plaintiff has not met the burden of

proof to show that she was eligible for a discount on her 2021-22 property tax statement. This

court further concludes that Plaintiff has not met her burden of proof to show that she was misled

by Defendant. Plaintiff is liable for both returned payment fees and for any accrued interest

under ORS 311.505. Now, therefore,

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 220385R 8 IT IS ORDERED that Defendant's Motion for Judgment on the Pleadings is granted. 11/22/2022 1:23:21 PM

Richard Davis, Magistrate

This is a dispositive order pursuant to Tax Court Rule Magistrate Division 16 —

C(1). The court will issue a decision after waiting 14 days to determine whether there is a dispute about costs and disbursements. Any claim of error in regard to this order should be raised in an appeal of the Magistrate's decision when all issues have been resolved. See TCR-MD I 9.

This document was signed by Magistrate Davis and entered on November 22, 2022.

ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS TC-MD 220384R, 2203 85R 9