Beaver County v. Property Tax Division of the Utah State Tax Commission

DURHAM, Chief Justice,

concurring in the result:

(52 I concur with the result reached by the lead opinion. However, although I agree that the Commission erred in allowing equitable tolling in this case, I do not believe our application of equitable tolling principles to a lookback period should rely solely on the discovery rule.

153 The lead opinion concludes that the Commission's application of equitable tolling here was improper because the extraordinary circumstances required for its use are not present. I agree that this court has generally relied on the discovery rule when determining whether a statute of limitations may be tolled. Russell Packard Dev. v. Carson, 2005 UT 14, ¶ 21, 108 P.3d 741; see also Grynberg v. Questar Pipeline Co., 2003 UT 8, ¶ 65, 70 P.3d 1 (observing that this court has relied "almost exclusively" on the discovery rule when addressing requests to equitably toll a statute of limitations). This reliance recognizes that, in a system where a statute of limitations controls a potential plaintiff's ability to file a cause of action, the discovery rule balances the equitable interests of the potential plaintiff and defendant where the potential plaintiff has "discover{edl[new] facts forming the basis for the cause of action." Russell Packard Dev., 2005 UT 14, ¶¶ 21, 26, 108 P.3d 741 (internal quotation marks omitted).

1 54 Lookback provisions, however, are not concerned with a potential plaintiff's ability to bring suit; rather, as the lead opinion recognizes, they "preseribe[ ] a period within which certain rights ... may be enforced." Young v. United States, 535 U.S. 43, 47, 122 S.Ct. 1036, 152 L.Ed.2d 79 (2002). In Young, the United States Supreme Court recognized that lookback periods "serve[ ] the same basic policies furthered by all limitations provisions: repose, elimination of stale claims, and certainty about a plaintiff's opportunity for recovery and a defendant's potential labilities." Id. (internal quotation and alteration marks omitted). It thus concluded that look-back periods are "subject to traditional principles of equitable tolling." Id.

( 55 In applying equitable principles to the lookback period at issue in Young, the Court recognized that the balancing of interests in that context required an examination of why the party in question failed to enforce its rights within the statutorily-preseribed peri*1198od. Id. at 50, 122 S.Ct. 1036. Broadly speaking, this is the same question addressed when a court applies the discovery rule in a statute of limitations context. In that context, the court presumes the primary reason a plaintiff would fail to file a claim earlier is that he was unaware of the facts necessary to file the claim. The court then goes further to determine whether the defendant was responsible for concealing these facts or whether other exceptional cireumstances warrant tolling. Russell Packard Dev., 2005 UT 14, ¶ 26, 108 P.3d 741. I do not believe, however, that the discovery rule adequately serves equitable principles in the context of the lookback period at issue here.

156 The analysis in Young is instructive on this point, although, as the lead opinion points out, it is not identical on its facts; it is nonetheless helpful in what I believe to be a similar situation. In Young, the Court faced a situation where, simply because of the structure of federal bankruptcy laws, the IRS could be prevented from enforcing its rights where a bankruptcy petitioner filed back-to-back Chapter 18 and Chapter 7 petitions. 535 U.S. at 50, 122 S.Ct. 1036. The Court concluded that the lookback period must be tolled on behalf of the IRS whenever a petitioner's back-to-back petitions would otherwise preclude the IRS's claim, "regardless of petitioners' intentions when filing" these petitions. Id. at 50-51, 122 S.Ct. 1036.

157 Here, the statutory scheme is similar to that reviewed in Young in that the Counties, who have a statutorily-recognized interest in recovering escaped property taxes,1 may be prevented from receiving the benefit of such taxes whenever the Tax Division fails to perform the calculation required by the lookback period to determine whether previously-missing information resulted in undervaluation of a taxpayer's property. As in Young, the Counties in such a circumstance may be deprived of taxes they are entitled to despite their own best efforts to protect their interests. Indeed, the Commission reasoned that such was the case here and granted equitable tolling on that basis.

1 58 However, the scheme at issue here is complicated by the status of the Counties as intervenors, rather than claimants, and the involvement of two additional parties-the Tax Division and PacifiCorp, the taxpayer, rather than only one. The interests of Paci-fiCorp must be given significant weight in any equitable assessment. The Commission concluded that "[the hardship for [Pacifi-Corp] in defending the escaped property assessment due to the additional five months [delay in issuing the assessment] could not be extensive, as [PacifiCorp] knew of the Intervening Counties Request for Agency Action well in advance of the expiration of the five year period." I believe, however, in accord with Young, that equitable tolling should not apply, to the detriment of the taxpayer, unless the taxpayer itself is responsible for causing the lookback period to expire before the Division makes an escaped property determination.2

€59 Here, there is no indication in the record that any action by PacifiCorp caused the Division's delay in issuing its escaped property assessment. The Counties filed their request with the Commission for an escaped property assessment in July 2001. The Commission decided in April 2002 that the Counties lacked standing to make this request. The Counties appealed that decision to this court on May 1, 2002-the date of the lookback period's expiration. - Pacifi-Corp's intervention in that proceeding thus occurred after the lookback period's expiration. The record reveals no other action by PacifiCorp that could be viewed as causing the Division's delay. Because the Division's untimely assessment does not appear to be the result of PacifiGorp's actions, I concur *1199with the lead opinion's conclusion that equitable tolling was improperly granted.

. See, eg., Utah Code Ann. § 59-1-602(2) (2004) ("A county whose tax revenues are affected by the decision being reviewed shall be allowed to be a party in interest in the proceeding before the court.").

. The Counties suggest that the relevant inquiry is whether PacifiCorp caused an incorrect assessment in the first instance, "by providing incomplete or erroneous information." However, the legislature has already taken into account such initial errors in its definition of escaped property. See Utah Code Ann. § 59-2-102(11)(a). Thus, it would be inappropriate to take such factors into account again when conducting an equitable tolling analysis.