Full Opinion (html_with_citations)

ATTORNEY FOR PETITIONER:               ATTORNEYS FOR RESPONDENT:
STACY K. NEWTON                        GREGORY F. ZOELLER
JACKSON KELLY, PLLC                    ATTORNEY GENERAL OF INDIANA
Evansville, IN                         JOHN P. LOWREY
                                       DEPUTY ATTORNEY GENERAL
                                       Indianapolis, IN
_____________________________________________________________________

                                IN THE
                          INDIANA TAX COURT
_____________________________________________________________________
                                                          Dec 31 2014, 1:44 pm


VIRGINIA GARWOOD,                     )
                                      )
     Petitioner,                      )
                                      )
                 v.                   )   Cause No. 82T10-1208-TA-46
                                      )
INDIANA DEPARTMENT OF STATE           )
REVENUE,                              )
                                      )
     Respondent.                      )
______________________________________________________________________

         ORDER ON RESPONDENT’S MOTION FOR SUMMARY JUDGMENT

                                   FOR PUBLICATION
                                   December 31, 2014

FISHER, Senior Judge

       Virginia Garwood has filed her second appeal with this Court, seeking a refund of

over $100,000 from the Indiana Department of State Revenue.1 The matter, currently

before the Court on the Department’s motion for summary judgment, concerns whether

the Department properly denied a portion of Garwood’s refund claim. The Court finds
1
   On three separate occasions, the Court has discussed the facts and the procedural history
related to this appeal. See Garwood v. Indiana Dep’t of State Revenue (Garwood I),
939 N.E.2d 1150
 (Ind. Tax Ct. 2010); Garwood v. Indiana Dep’t of State Revenue (Garwood II),
953 N.E.2d 682
 (Ind. Tax Ct. 2011), review denied; Garwood v. Indiana Dep’t of State Revenue
(Garwood III),
998 N.E.2d 314
 (Ind. Tax Ct. 2013). Accordingly, the Court will not restate the
facts and the procedural history in full a fourth time, but rather will present an abbreviated
version of them for purposes of this matter.
that the Department’s denial was not proper as a matter of law.2

                           FACTS AND PROCEDURAL HISTORY

       The following facts are not in dispute. On June 2, 2009, the Department served

Garwood with several jeopardy tax assessments which provided that she owed

approximately $125,000 in sales tax, penalties, and interest on her sales of dogs for the

January 1, 2007 through April 30, 2009 tax period. When Garwood indicated that she

could not pay the liability, the Department seized 240 of her dogs pursuant to several

jeopardy tax warrants.      The Department also seized $1,260 in cash and $1,325 in

uncashed checks pursuant to a search warrant issued by the Superior Court of Marion

County.

       On June 3, 2009, the Department sold all 240 of the seized dogs to the U.S.

Humane Society for a total of $300.00. (See Pet’r Des’g Evid. Supp. Pet’r Resp. Opp’n

Resp’t Mot. Summ. J., Ex. C.)           The Department subsequently applied half of the

proceeds from that sale to Garwood’s purported tax liability. 3                The Department,

however, did not apply the seized cash or checks to Garwood’s purported tax liability.

(See Resp’t Confd’l Des’g Evid., Ex. 3.) Several months later, Garwood remitted $25.48

to the Department for her purported tax liability, and the Department applied the

payment to her outstanding balance.

       On June 29, 2009, Garwood filed her first appeal with this Court challenging the

validity of the jeopardy tax assessments.            See Garwood v. Indiana Dep’t of State

2
   Portions of the designated evidence are confidential; therefore, this order will only provide the
information necessary for the reader to understand its disposition of the issues presented. See
generally Ind. Administrative Rule 9.
3
  Because the Department had also issued jeopardy tax assessments to Garwood’s daughter
on June 2, 2009, it applied the other half of the proceeds from the sale of the dogs to her
purported sales tax liability. See Garwood III,
998 N.E.2d at 316
.
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Revenue (Garwood I),
939 N.E.2d 1150
 (Ind. Tax Ct. 2010) (order denying the

Department’s motion to dismiss for lack of subject matter jurisdiction). On August 19,

2011, the Court held that the jeopardy tax assessments were void as a matter of law

because they were not issued in accordance with Indiana Code § 6-8.1-5-3.           See

Garwood v. Indiana Dep’t of State Revenue (Garwood II),
953 N.E.2d 682
 (Ind. Tax Ct.

2011), review denied.

       On August 29, 2011, Garwood filed a refund claim with the Department that

provided, in part:

          I am attaching an appraisal of the value of my property as well as
          the decision of the Indiana Tax Court. My dogs were appraised at
          $122,650.00. I calculate my actual sales tax due as $1217.00 for
          2008 and $1333.50 for 2009. In addition to taking the dogs[,] the
          Department took $1260 in cash and uncashed checks totaling
          $1325. Subtracting what I owed from what was seized[,] I am owed
          a refund of $122,684.50.

(Resp’t Des’g Evid., Ex. 4 at Ex. A at 3.) In June 2012, the Department issued a check

to Garwood in the amount of $175.48. The Department subsequently issued a second

check to Garwood to compensate her for its seizure of $1,260 in cash and $1,325 in

uncashed checks. (See Resp’t Des’g Evid., Exs. 1-2.)

       On August 27, 2012, Garwood initiated this appeal, challenging the Department’s

partial denial of her refund claim. (See Resp’t Des’g Evid., Ex. 4.) Nearly a year later,

the Department unsuccessfully moved to dismiss Garwood’s appeal on the basis that

the Court lacked subject matter jurisdiction. See Garwood v. Indiana Dep’t of State

Revenue (Garwood III),
998 N.E.2d 314
 (Ind. Tax Ct. 2013). On December 2, 2013,

after its motion to reconsider was denied, the Department requested that the Court

certify Garwood III for interlocutory appeal. The Court denied the Department’s request



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on December 20, 2013. On June 3, 2014, the Department filed a Motion for Summary

Judgment. The Court held a hearing on December 5, 2014. Additional facts will be

supplied as necessary.

                                 STANDARD OF REVIEW

       Summary judgment is proper only when the designated evidence demonstrates

that no genuine issues of material fact exist and the moving party is entitled to judgment

as a matter of law. Ind. Trial Rule 56(C). When reviewing a motion for summary

judgment, the Court will construe all properly asserted facts and reasonable inferences

drawn therefrom in favor of the non-moving party. See Scott Oil Co. v. Indiana Dep’t of

State Revenue,
584 N.E.2d 1127, 1128-29
 (Ind. Tax Ct. 1992).

                                         ANALYSIS

       The Department contends that it is entitled to judgment as a matter of law

because it has already “returned all [of the] monies [that] it obtained from Garwood, [and

therefore] there is nothing else left for [her] to receive from the Department.” (See

Resp’t Confd’l Mem. Supp. Mot. Summ. J. (“Resp’t Br.”) at 1.) The Department explains

that because a tax payment under Indiana Code § 6-8.1-8-14 cannot be made by

providing goods (i.e., animal inventory) or services to the Department, Garwood is

actually “seek[ing] compensatory damages . . . when she asks for more money than she

paid in tax.” (See Resp’t Confd’l Reply Supp. Mot. Summ. J. (“Resp’t Reply Br.”) at 1-

4.)   (See also Resp’t Br. at 5-8; Hr’g Tr. at 3-6.)        The Department contends that

Garwood’s claim for compensatory damages, arising from its sale of her animal


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  Indiana Code § 6-8.1-8-1 provides, in part, that “[a] person may make a tax payment: (1) in
cash; (2) by bank draft; (3) by check; (4) by cashier’s check; (5) by money order; (6) by credit
card, debit card, charge charge, or similar method; or (7) if approved by the department, by an
electronic fund transfer (as defined in IC 4-8.1-2-7).” IND. CODE § 6-8.1-8-1(a) (2011).
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inventory in Harrison County, should be litigated in the Harrison Circuit Court rather than

the Tax Court. (See Resp’t Reply Br. at 4; Hr’g Tr. at 14-15.) The Court, however, finds

these arguments unpersuasive.

       First, on October 31, 2013, the Court already determined that it has subject

matter jurisdiction over Garwood’s appeal. See Garwood III,
998 N.E.2d at 318-21
. As

the Indiana Supreme Court has explained, the “Legislature intended that all challenges

to the tax laws--regardless of the legal theory relied on--be tried in the Tax Court.” State

v. Sproles,
672 N.E.2d 1353, 1357
 (Ind. 1996). Accordingly, Garwood may prosecute

her claim for compensatory damages, which was asserted concurrently with her refund

claim, in the Tax Court because it arose from the Department’s seizure and subsequent

sale of her animal inventory pursuant to invalid jeopardy tax assessments. See, e.g.,

Newby v. Indiana Dep’t of State Revenue,
826 N.E.2d 173, 175-77
 (Ind. Tax Ct. 2005)

(upholding a taxpayer’s CSET assessment because it did not violate federal and state

double jeopardy prohibitions or the provisions of his plea agreement), review denied;

Harlan Sprague Dawley, Inc. v. Indiana Dep’t of State Revenue,
583 N.E.2d 214, 217

(Ind. Tax Ct. 1991) (stating that “a § 1983 claim, a federal civil rights tort, which arises

under the tax laws of Indiana and is [an] initial appeal from the final determination of a

state tax agency can only be determined in Indiana by the tax court”).

       Moreover, Indiana’s notice pleading provision, Indiana Trial Rule 8(A), requires

“only ‘a short and plain statement of the claim showing that the pleader is entitled to

relief.’” Trail v. Girls & Boys Clubs of Nw. Indiana,
845 N.E.2d 130, 135
 (Ind. 2006)

(citation omitted). Garwood’s petition alleges that she is entitled to relief because 1) the

Department seized property that was valued at $125,235; 2) Garwood filed a refund



                                             5
claim for $122,684.50; and 3) the Department only returned $175.48.          (See Resp’t

Des’g Evid., Ex. 4 ¶¶ 4-9.) Garwood subsequently explained that the Department’s

allegedly improper “closed door” sale of her animal inventory to the U.S. Humane

Society pursuant to invalid jeopardy tax assessments entitles her to relief. (See Pet’r

Resp. Resp’t Mot. Summ. J. at 2-5; Hr’g Tr. at 7-8.) Consequently, even if the Court

found that the provision of goods or services does not constitute a tax payment under

Indiana Code § 6-8.1-8-1, the Department would not be entitled to an entry of summary

judgment because Garwood has presented a claim for which this Court can provide

relief. See Harlan Sprague,
583 N.E.2d at 224
 (explaining that a taxpayer properly

invoked this Court’s jurisdiction and its judicial remedies by appealing the Department’s

denial of its refund claim concurrently with its § 1983 claim). As such, Garwood’s claim

for compensatory damages will be heard in the Tax Court without a jury. See IND. CODE

§ 33-26-6-1 (2014) (stating that the Court “shall try each original tax appeal without the

intervention of a jury”); State Line Elevator, Inc. v. State Bd. of Tax Comm’rs,
526 N.E.2d 753, 753-54
 (Ind. Tax Ct. 1988) (holding that a taxpayer does not have a

constitutional right to a jury trial in a statutory proceeding).

                                        CONCLUSION

       For the above stated reasons, the Court cannot conclude that the Department

properly denied Garwood’s refund claim as a matter of law. Accordingly, the Court

DENIES the Department’s motion for summary judgment. The Court will issue, under




                                               6
separate cover, an order scheduling this matter for further proceedings.

      SO ORDERED this 31st day of December 2014.




                                         _____________________________
                                         Thomas G. Fisher
                                         Senior Judge, Indiana Tax Court




Distribution:
Stacy K. Newton, JACKSON KELLY, PLLC, 221 N.W. Fifth Street, P.O. Box 1507,
Evansville, IN 47706-1507;

Gregory F. Zoeller, Attorney General of Indiana, By: John P. Lowrey, Deputy Attorney
General, Indiana Government Center South, Fifth Floor, 302 West Washington Street,
Indianapolis, IN 46204-2770.

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