Dept. of Rev. v. American Honda Motor Co., Inc.

404                           December 21, 2011                       No. 48

                  IN THE OREGON TAX COURT
                      REGULAR DIVISION

              DEPARTMENT OF REVENUE,
                       Plaintiff,
                          v.
            AMERICAN HONDA MOTOR CO. INC.,
                      Defendant.
                      (TC 5038)
     Plaintiff (the department) appealed a Magistrate Division decision. Defen-
dant (taxpayer) moved to dismiss the department’s complaint on the grounds
that it was time-barred because the department had failed to timely and properly
serve the complaint within the statutory time period. Following oral argument,
in granting taxpayer’s motion to dismiss, the court ruled that the department
had not properly served the complaint within the statutory time period and that
the appeal was dismissed.


   Oral argument on Defendant’s Motion to Dismiss was
held December 20, 2011, in the courtroom of the Oregon Tax
Court, Salem
   Marilyn J. Harbur, Senior Assistant Attorney General,
Department of Justice, Salem, filed the response and argued
the cause for Plaintiff.
  John H. Gadon, Lane Powell PC, Portland, filed the
motion and argued the cause for Defendant.
   Decision for Defendant rendered December 21, 2011.
           HENRY C. BREITHAUPT, Judge.
                         I.    INTRODUCTION
        This case is before the court on the motion of Defen-
dant (taxpayer) to dismiss the appeal. The basis for the
motion is that service of process upon taxpayer was not com-
pleted within the time allowed by ORS 305.560(3).
                                 II.   FACTS
           The facts are not disputed and are these:
   (1) The decision of the magistrate appealed in this case
       was entered on August 10, 2011.
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  (2)   The time for filing an appeal pursuant to ORS
        305.501(5) was 60 days and expired on Sunday,
        October 9, 2011.

  (3)   Pursuant to ORS 174.120, the date for filing the com-
        plaint with the court was extended to the next busi-
        ness day, October 10, 2011.

  (4) Plaintiff (department) filed the complaint with the
      court on October 10, 2011.

  (5) ORS 305.560(3) required the department to serve the
      complaint upon taxpayer within the 60 day period for
      filing with the court. Therefore, service was required
      to be made on or before October 10, 2011.

  (6)   ORS 305.560(3) requires that service of the complaint
        upon taxpayer be done by certified mail.

  (7) On October 10, 2011, the department discovered that
      the United States Post Office was closed, as it had been
      for over 40 years, by reason of that day being a federal
      holiday, to wit, Columbus Day.

  (8)       Columbus Day is not a holiday in Oregon pursuant to
            ORS 187.010.

  (9)       Faced with this situation, the department faxed a copy
            of the complaint to the person who had been counsel
            for taxpayer in the Magistrate Division, a person who
            was, in any case, not authorized to accept service of
            process for taxpayer.

  (10)   The department also delivered a copy of the complaint
         to the office of the registered agent of taxpayer, but the
         delivery was not accomplished during regular busi-
         ness hours of that agent.

  (11)    The complaint was not mailed through the United
        States Postal Service until October 11, 2011.

                          III. ISSUE

        The issue for decision is whether the appeal should
be dismissed by reason of the fact that service of process was
not accomplished within the time allowed by statute.
406             Dept. of Rev. v. American Honda Motor Co., Inc.

                              IV.    ANALYSIS
          The time limit for service of process is mandated
by ORS 305.560(3).1 The legislature did not provide any
rules relaxing that requirement in the case of appeals to
the Regular Division. The legislature knows how to provide
such relaxation rules when it wishes to do so. ORS 12.020
provides that service of process, if accomplished within 60
days of the filing of the complaint, relates back to the date
of filing for purposes of determining whether the action has
been commenced within the statute of limitations. ORS
12.220 provides further extension in the case of certain
involuntary dismissals of actions where the defendant had
actual notice of the original filing within 60 days of the fil-
ing of the original action.
          The department argues that Tax Court Rule (TCR)
10 provides relief to it in this case for the reason that the
rule provides an extension in the case where the Post Office
is closed unexpectedly. The department also argues that the
closure in this case was unexpected to it. This position is
not well taken. An unexpected closing might add time for
filing of the complaint and therefore additional time for ser-
vice because ORS 305.560(3) ties the service time require-
ment to the filing requirement. However, the court cannot
conclude that the closure of the Post Office on Columbus
Day was unexpected. That determination must be made
objectively and not based on the subjective knowledge of the
department. In this regard, the record indicates that this
postal holiday has been established for over 40 years and
notice of the closure was publicly available. This closure was
not unexpected. Nor is there any statutory relaxation rule
invoked by the department similar to ORS 12.020(2).
         The department next asks the court to provide relief
to it pursuant to TCR 12 B. That rule provides: “[t]he court
shall, in every stage of an action, disregard any error, defect,
or omission in the pleadings or proceedings which does not
affect the substantial rights of the adverse party.”
        The court cannot base a relaxation of a statutory
requirement on TCR 12 B. The rules of the Tax Court, adopted
   1
       All references to the Oregon Revised Statutes (ORS) are to the 2009 edition.
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 (2011)                                  407

by the court itself pursuant to ORS 305.425(3), do not have
the statutory status of the Oregon Rules of Civil Procedure
(ORCP). Even if they did, Oregon courts have been clear
that the provisions of ORCP 12 B cannot serve to relax the
rules on service of process. See Murphy v. Price, 

, 

 (1994) (holding that service in accor-
dance with the relevant rules and statutes is itself a “sub-
stantial right” for purposes of ORCP 12 B). One prong of the
department’s argument in this regard is that taxpayer had
actual notice of the filing of the complaint and that should
suffice. However, in cases where the legislature has consid-
ered actual notice to be a basis for the relaxation of time
requirements, it has so provided. See ORS 12.220.
                     V. CONCLUSION
         On numerous occasions this court has granted
motions to dismiss made by the department or by county
assessors in situations where taxpayers, as the appealing
parties, have failed to strictly comply with time limits or
other requirements that mandate action at or before the
time for filing of a complaint. See, e.g., Sproul & Sproul, Inc.
v. Deschutes County Assessor, 

 (2005). Here the
department was faced with a statutory mandate and did not
satisfy that mandate. Its appeal must be dismissed. Now,
therefore,
         IT IS ORDERED that Defendant’s motion to dis-
miss is granted.