Sprint International Communications Corp. v. Department of Revenue

Quinn-Brintnall, J.

¶31 (concurring in the result) — Although I agree with statutory analysis in the majority opinion, I write separately to discuss the procedural posture of this and numerous other tax cases.

*943¶32 Here, the Department of Revenue (DOR) and Sprint International Communications Inc. filed cross motions for summary judgment. The underlying issue is whether Sprint was subject to a retail sales tax for the sale of transmission services via X.25 from 1989 through 1993. Despite the posture of this case as a summary judgment below, DOR, Sprint, and amicus curiae Microsoft Corporation continue to present fact-based arguments to this court regarding whether Sprint X.25 is a network telephone service. While the parties stipulated to the configuration of the X.25 system, they still dispute whether the primary purpose of the X.25 service is data transmission or protocol conversion. To me, this is a disputed issue of material fact that precludes summary judgment. See W. Telepage, Inc. v. City of Tacoma Dep’t of Financing, 140 Wn.2d 599, 607, 998 P.2d 884 (2000) (“Summary judgment is appropriate only if the pleadings, affidavits, depositions, and admissions on file demonstrate the absence of any genuine issues of material fact.”); Barrie v. Hosts of Am., Inc., 94 Wn.2d 640, 642, 618 P.2d 96 (1980) (“A material fact is one upon which the outcome of the litigation depends, in whole or in part.”); Coffel v. Clallam County, 58 Wn. App. 517, 520, 794 P.2d 513 (1990) (“Even if the facts are undisputed, there still may be an issue for the trier of fact when conflicting inferences may be drawn from such undisputed facts.” (citing Preston v. Duncan, 55 Wn.2d 678, 681-82, 349 P.2d 605 (1960))). Moreover, as a disputed issue of material fact, it is not one that can be resolved by an appellate court. See Edwards v. Morrison-Knudsen Co., 61 Wn.2d 593, 598, 379 P.2d 735 (1963) (“The function of ultimate fact finding is exclusively vested in the trial court.”).

¶33 Here, the parties ask us to decide a factual matter upon which the application of the taxing statute follows. That, in my opinion, is not the proper function of an appellate court and, as is clear from recent examples, I perceive this as a procedural impropriety resulting in a repetitious review of a disputed material fact at each level of review. See, e.g., Homestreet, Inc. v. Dep’t of Revenue, 166 *944Wn.2d 444, 210 P.3d 297 (2009); cf. Homestreet, Inc. v. Dep’t of Revenue, 139 Wn. App. 827, 162 P.3d 458 (2007). I believe the proper procedure is for the trial court to enter relevant findings of fact, here, whether the Sprint X.25 service is or is not a network telephone service. These findings of fact would then be subject to review by an appellate court under the substantial evidence standard. Rogers Potato Serv., LLC v. Countrywide Potato, LLC, 152 Wn.2d 387, 391, 97 P.3d 745 (2004); Bering v. SHARE, 106 Wn.2d 212, 220, 721 P.2d 918 (1986).

¶34 As it now stands, the trial court reviews the undisputed evidence, rules that it is or is not a network telephone service or other taxable event or process, and then grants or denies summary judgment. Then the aggrieved party appeals, asking three members of this court to review the arguments and undisputed evidence de novo, claiming this is the proper standard of review because the trial court decided the matter on summary judgment. The aggrieved party then seeks review by the Supreme Court, asking nine members of that court to review the arguments and the undisputed evidence de novo. But neither this court nor the Supreme Court has the ability to ask the necessary questions or weigh expert testimony regarding the nature and the function of the system seeking to avoid taxation. See In re Welfare of Sego, 82 Wn.2d 736, 739-40, 513 P.2d 831 (1973) (“As an appellate tribunal, we are not entitled to weigh either the evidence or the credibility of witnesses.”); Edwards, 61 Wn.2d at 598 (“The function of ultimate fact finding is exclusively vested in the trial court.”). Our factual determination that the X.25 service is or is not a network telephone service is necessarily a speculative factual finding. The trial court is the only competent court to review the undisputed and/or agreed upon evidence and make the necessary factual determination, here, what is the primary purpose of the X.25 service. While the parties presenting to us numerous cases for review seem to prefer summary judgment, in my opinion, they and the trial courts fail to recognize the difference between undisputed evidence and *945the determination of an issue of material fact that must be found by a trial court based on this stipulated evidence.

¶35 Here, it is clear that the parties do not agree that the Sprint X.25 service sold from 1989 to 1993 was a network telephone service. In my opinion, this is a material issue of disputed fact which precludes summary judgment. But because the trial court’s opinion that the system is a network telephone service is supported by substantial evidence, I concur in the result.

Van Deren, C.J., concurs with Quinn-Brintnall, J.

Review denied at 169 Wn.2d 1023 (2010).