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S & R Properties v. Maricopa County9/28/1993
TOCI, Judge
The taxpayers brought separate special actions in the tax court, claiming that each taxpayer's property had been misclassified, and that as a result, each had paid excessive real property taxes for the years 1985 through 1989. They also alleged that Maricopa County ("the County") and the Arizona Department of Revenue ("DOR") failed to perform duties required by law in refusing to respond to their refund requests and to negotiate in good faith with their agent. The taxpayers requested refunds of the excess taxes pursuant to Ariz. Rev. Stat. Ann. ("A.R.S.") sections 11-505 and -506 (1990).
The County appeals from the tax court judgment directing it to consider and respond to the taxpayers' claims. The County's appeal also challenges the tax court's decision to award the tax-payers attorneys' fees pursuant to A.R.S. section 12-2030 (Supp. 1992). Appellant S & R Properties cross-appeals from the tax court's ruling reducing the fees award to approximately 35% of the amount requested.
The primary issues are (1) whether property taxes paid in error may be refunded under former A.R.S. sections 11-505 and -506, independently of the appeal procedure in A.R.S. section 42-204(E) (1991), and (2) whether the 1991 amendment to A.R.S. section 11-506 (Sup. 1992), which excludes from the reach of the statute questions of valuation that can be appealed according to Title 42, A.R.S., and limits refund claims to those involving "clerical or computation error," retroactively defeats the taxpayers' claims. Our answer to the second question turns on whether retroactive application of the amendment to A.R.S. section 11-506 would violate due process by depriving the taxpayers of a substantive vested right.
We hold that the taxpayers' special actions under A.R.S. section 11-506 are not untimely classification appeals. We further hold that section 42-204(E), which provides that a taxpayer dissatisfied with the valuation or classification of his property may appeal to the superior court, does not preclude the taxpayers from seeking a refund under section 11-506 for clear and indisputable classification or valuation errors. In addition, the tax court was correct in holding that the County and the DOR must respond to the taxpayers' refund claims by determining whether the County made an erroneous assessment. We also hold that if the County made a clear and indisputable error in the valuation or classification of the taxpayers' property, former section 11-506 confers a vested substantive right to a refund on the taxpayers. The legislature may not, therefore, impair that right by the adoption, with explicit retroactive intent, of amended section 11-506. Finally, we reverse the tax court's reduction in attorneys' fees and remand for a hearing on this issue.
I. FACTS AND PROCEDURAL HISTORY
A. The Taxpayers and Their Properties
The taxpayers in these consolidated appeals are owners of property in Maricopa County classified either as class 3 (commercial) or class 6 (residential-rental). See A.R.S. ยง 42-162 (1991 and Supp. 1992). Those whose properties had been classified as commercial filed claims with the Maricopa County Assessor ("Assessor") asserting that only a portion of each property was actually commercial. Those whose properties were classified as residential filed claims asserting that the properties qualified as class 5, owner-occupied residences. The taxpayers filed their claims by February 28, 1989. Each r
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