Defective Notice of Tax Assessment; Nunc Pro Tunc Relief
Circle of Seasons Charter Sch. v. Northwestern Lehigh Sch. Dist., 273 A.3d 23 (Pa. Cmwlth. 2022), allocatur granted Sept. 28, 2022, appeal docket 99 MAP 2022
Circle of Seasons Charter School (Charter School) filed a complaint seeking a refund of real estate taxes that were erroneously collected by Northwestern Lehigh School District (School District) on Charter School’s tax-exempt property based on Lehigh County’s (County) revision of the Charter School property from non-taxable to taxable status. The School District filed preliminary objections, arguing that Charter School failed to exhaust its statutory remedy under the Consolidated County Assessment Law to challenge the County’s revision of the properties’ status from non-taxable to taxable.
The trial court concluded that it lacked subject matter jurisdiction because Charter School failed to exhaust its statutory remedy for challenging the taxable status of its school property. Charter School appealed, arguing that (1) County did not timely notify Charter School that its property’s non-taxable status had changed so that Charter School could seek the statutory remedy (2) the dismissal left the Charter School without recourse to challenge the assessment.
Commonwealth Court reversed the trial court’s dismissal of the Charter School’s complaint, and held that the Charter School was entitled to a hearing to challenge the change in its taxable status due to the defective notice. Commonwealth Court concluded:
The trial court had before it a complaint in equity and should have considered, inter alia, whether Charter School should be permitted to pursue an appeal nunc pro tunc. See Department of Transportation, Bureau of Traffic Safety v. Rick, 75 Pa.Cmwlth. 514, 462 A.2d 902, 903 (1983) (whether to allow a nunc pro tunc appeal is an equitable matter). A nunc pro tunc appeal is a recognized exception to an appeal deadline and will be allowed where there is a breakdown or negligence by the administrative agency. Union Electric Corporation v. Board of Property Assessment, Appeals & Review of Allegheny County, 560 Pa. 481, 746 A.2d 581, 584 (2000). Here, the trial court’s finding that the County’s assessment notices did not conform to statutory requirements established the negligence that warrants a nunc pro tunc appeal before the Appeals Board on whether the County properly revised the tax status of Charter School’s properties on June 5, 2017.
To enable Charter School to avail itself of this hearing, the trial court should have transferred Charter School’s complaint to the Appeals Board for disposition. Section 708 of the Judicial Code states that
[i]f a complaint in the nature of equity … is commenced in any court against a government unit … objecting to a governmental determination … where the proper mode of relief is an appeal from the determination of the government unit, this alone shall not be a ground for dismissal[.]
42 Pa. C.S. § 708(c) (emphasis added). The trial court may transfer an “appeal” or other matter “deemed to be filed or commenced under any provision of [Section 708].” 42 Pa. C.S. § 708(d). Because the “proper mode of relief” for a charter school to challenge its tax assessment is an appeal before the Appeals Board, the trial court erred in dismissing the complaint with prejudice. Instead, it should have transferred Charter School’s complaint to the Appeals Board for a decision on whether the County’s assessment notices of June 5, 2017, were valid, whether Charter School’s properties are taxable, and whether Charter School is entitled to a refund from the School District.
Slip op. at 14-15.
The Pennsylvania Supreme Court will consider the following issues:
1. Did the Commonwealth Court err in reversing the trial court’s ruling that it had no jurisdiction to entertain the Circle of Seasons Charter School’s tax refund claims for tax years 2017 and 2018 because Circle of Seasons had failed to seek redesignation of those properties as nontaxable before the Lehigh County Board of Assessment Appeals before seeking refunds for those years, thus failing to exhaust its administrative remedies pursuant to Pa.R.C.P. 1028(a)(7)?
2. Did the Commonwealth Court err in directing a remand to the Lehigh County Board of Assessment Appeals for an appeal nunc pro tuncof the taxpayer’s taxable designation of two properties for tax years 2017 and 2018 on the basis of defective notice of the designation, when the taxpayer paid those levies, did not seek redesignation or refunds for 2017 and 2018 when it challenged its 2019 taxable designation before the Board, did not name the Board as a party to a claim relying upon a defective reassessment notice, and did not seek nunc pro tuncrelief from the Commonwealth Court?
For more information, contact Kevin McKeon or Dennis Whitaker.