Minnesota Tax Court Allows Property Tax Petition Extension

Ira Azhakh,
Petitioner,
v.
County of Hennepin,
Respondent.

Bassam K. Abu Samrah,
Petitioner,
v.
County of Hennepin,
Respondent.

STATE OF MINNESOTA 
COUNTY OF HENNEPIN

TAX COURT
REGULAR DIVISION

Filed: January 12, 2022

ORDER ON MOTION TO DISMISS

These matters¹ came on for hearing before the Honorable Jane N. Bowman, Judge of the Minnesota Tax Court, on respondent's motions to dismiss.

Jay Smigielski, Ferdinand F. Peters Esq. Law Firm, represents petitioners Ira Azhakh and Bassam K. Abu Samrah.

Sara L. Bruggeman, Assistant Hennepin County Attorney, represents respondent Hennepin County.

Petitioner Ira Azhakh filed a property tax petition on April 15, 2021, for taxes payable in 2020.² Petitioner Bassam K. Abu Samrah also filed a property tax petition on April 15, 2021,³ for taxes payable in 2020.The County moves to dismiss each petition⁴ on the ground that it is untimely.⁵

The court, having heard the arguments of counsel, and upon all the files, records, and proceedings herein, now makes the following:

ORDER

The County's motions are denied.

IT IS SO ORDERED.

BY THE COURT:

Jane N. Bowman
Jane N. Bowman, Judge
MINNESOTA TAX COURT

Dated: January 12, 2022

MEMORANDUM

I. BACKGROUND

Petitioner Ira Azhakh filed a property tax petition on April 15, 2021, challenging the 2019 assessment for taxes payable in 2020 for a property located in Minneapolis, Minnesota.⁶ Similarly, petitioner Bassam K. Abu Samrah filed a property tax petition on April 15, 2021, challenging the 2019 assessment for taxes payable in 2020 for a property located in Medina, Minnesota.⁷

On October 27, 2021, the County filed in each case a motion to dismiss on the ground that the petition was untimely.⁸ The County argued that the Minnesota legislature, in response to the COVID-19 pandemic, extended the deadline for property tax petitions filed in the district court, but did not similarly extend the deadline for property tax petitions filed in the tax court and that the petitioners did not timely file by the May 30, 2020 tax court deadline.⁹ Petitioners opposed the County's motions at a joint hearing held on December 2, 2021.

II. GOVERNING LAW

Minnesota Statutes chapter 278 establishes the procedure for challenging a property tax assessment. Minn. Stat. ch. 278 (2021). The statute provides the taxpayer a choice of forum: the taxpayer may “have the validity of the claim, defense, or objection determined by the district court of the county in which the tax is levied or by the Tax Court.” Minn. Stat. § 278.01, subd. 1(a); see also Walmart Inc. v. Winona Cnty., 963 N.W.2d 192, 203 (Minn. 2021) (“Although the statute permits taxpayers to bring their claims in tax court, it also provides taxpayers with the option of proceeding in district court.”).

Regardless of the forum chosen, a chapter 278 petition normally must be filed on or before April 30 of the year in which the tax becomes payable. Minn. Stat. § 278.01, subd. 1(c). Failure to timely file and serve a petition deprives the tax court of jurisdiction to hear the matter. Kmart Corp. v. Cnty. of Clay, 711 N.W.2d 485, 488-90 (Minn. 2006); see also Odunlade v. City of Minneapolis, 823 N.W.2d 638, 646 (Minn. 2012) (noting that “[c]hapter 278 petitions have a strict time limit”). Only the legislature may alter or extend these deadlines. See Langer v. Comm'r of Revenue, 773 N.W.2d 77, 81 (Minn. 2009) (“The tax court is not vested with the power to extend the filing deadline beyond that which the legislature has set by statute.”).

On March 28, 2020, in response to the COVID-19 pandemic, the Minnesota legislature extended the filing deadline for petitions concerning property taxes payable in 2020:

Notwithstanding Minnesota Statutes, section 278.01, subdivision 1, paragraph (c), or any other law to the contrary, for property taxes payable in 2020 only, a petitioner filing a real or personal property tax petition under Minnesota Statutes, section 278.01, shall have until May 30, 2020, to file copies of the petition, with proof of service, in the office of the court administrator of the district court.

Act of Mar. 28, 2020, ch. 71, art. 2, § 18, 2020 Minn. Laws 17, 38 (“Session Law 71”).

A few weeks later, on April 15, 2020, the legislature enacted Session Law 74, which temporarily extended certain statutory deadlines as follows:

(a) The running of deadlines imposed by statutes governing proceedings in the district and appellate courts, including any statutes of limitations or other time periods prescribed by statute, is suspended during the peacetime emergency declared on March 13, 2020, in governor's Executive Order 20-01 and any extensions authorized under Minnesota Statutes, section 12.31, subdivision 2, and for 60 days after the end of the peacetime emergency declaration[.]

(b) This section expires 60 days after the end of the peacetime emergency declaration described in paragraph (a) or February 15, 2021, whichever is earlier.

Act of Apr. 15, 2020, ch. 74, art. 1, § 16, 2020 Minn. Laws 55, 66 (“Session Law 74”).

Finally, early in 2021, the legislature further extended the February 15, 2021 deadline:

Deadlines imposed by statutes governing proceedings in the district and appellate courts, including any statutes of limitations or other time periods prescribed by statute, shall not expire from the beginning of the peacetime emergency declared on March 13, 2020, in governor's Executive Order 20-01 through April 15, 2021.

Act of Feb. 12, 2021, ch. 3, § 1, 2021 Minn. Laws ___, ___ (“Session Law 3”).

In WMH Prop. Owner LLC v. Cnty. of Hennepin, Nos. 27-CV-20-6274 & 27-CV-21-4306, 2021 WL 4312988 (Minn. T.C. Sept. 9, 2021), this court addressed the effect of Session Law 74 on chapter 278 property tax petitions and held that, under the plain meaning of the statute, Session Law 74 extended the deadlines in all district court proceedings, including chapter 278 petitions filed in the district court. WMH, 2021 WL 4312988, at *8. The court did not address whether Session Law 74 also extended the filing deadlines for chapter 278 petitions filed in the tax court. Id. at *9.

The court answered that question in a subsequent ruling. In Timber New Ulm Props. LP v. Brown Cnty., No. 08-CV-20-1048, 2021 WL 5856123 (Minn. T.C. Dec. 7, 2021), this court held that “the suspension of deadlines provided in Session Law 74 applies not only to chapter 278 petitions invoking the jurisdiction of the district court but to those invoking the jurisdiction of the tax court.” Timber New Ulm, 2021 WL 5856123, at *3. Thus, due to the additional extension provided by Session Law 3, petitions concerning property taxes payable in 2020 that invoke the jurisdiction of either the district court or the tax court are timely filed provided they were filed by April 15, 2021.

III. ANALYSIS

The court's decision in Timber New Ulm relies on its interpretation of the language in Session Law 74. Rather than referring directly to deadlines in district and appellate court proceedings, Session Law 74 states that “[t]he running of deadlines imposed by statutes governing proceedings in the district and appellate courts . . . is suspended[.]” Act of Apr. 15, 2020, ch. 74, art. 1, § 16(a) (emphasis added). Chapter 278, while it also governs proceedings in the tax court, clearly governs proceedings in the district court. See, e.g., Minn. Stat. § 278.01, subd. 1(a) (providing that property tax petitions may be determined by “the district court of the county in which the tax is levied or by the Tax Court”). Accordingly, the text of Session Law 74 plainly refers to deadlines imposed by chapter 278. WMH, 2021 WL 4312988, at *8.

The County did not have the benefit of the court's decision in Timber New Ulm when it briefed its motion in the current matter and urges an alternate interpretation. The County notes that Chapter 278 references two separate deadlines:

For all counties, the petitioner must file the copies with proof of service, in the office of the court administrator of the district court on or before April 30 of the year in which the tax becomes payable. A petition for determination under this section may be transferred by the district court to the Tax Court. An appeal may also be taken to the Tax Court under chapter 271 at any time following receipt of the valuation notice that county assessors or city assessors having the powers of a county assessor are required by section 273.121 to send to persons whose property is to be included on the assessment roll that year, but prior to May 1 of the year in which the taxes are payable.

Minn. Stat. § 278.01, subd. 1(c) (emphasis added).¹⁰ The County asserts that the first deadline, “on or before April 30,” applies exclusively to district court filings and that the second deadline, “prior to May 1,” applies exclusively to petitions filed in the tax court.¹¹ Accordingly, although “prior to May 1” is synonymous with “on or before April 30,” the County argues that Session Law 74 only extended the first deadline and not the second and, therefore, that Session Law 74 did not extend any deadlines for filings in the tax court, which additionally renders the deadline extension provided by Session Law 3 inapplicable.¹²

The court is unpersuaded by the County's argument for two reasons. First, the sentence of Minnesota Statutes section 278.01, subdivision 1(c), that specifies a filing date “on or before April 30” references “the petitioner,” which is a continuation of earlier statutory language about property tax petitions in section 278.01, subdivisions 1(a) and 1(b). Those proceeding provisions of the statute give taxpayers the choice to have a property tax petition “determined by the district court of the county in which the tax is levied or by the Tax Court.” Minn. Stat. § 278.01, subd. 1(a) (emphasis added).As a result, the first sentence of section 278.01, subdivision 1(c), and therefore the “on or before April 30” deadline, refers both to petitioners who have invoked the jurisdiction of the district court and to petitioners who have invoked the jurisdiction of the tax court. The later provision of section 278.01, subdivision 1(c), concerns appeals “following receipt of [a] valuation notice” and grants taxpayers the ability to challenge a notice of valuation before an assessment has been levied according to the procedures outlined in Minnesota Statutes chapter 271. Such an appeal is not at issue here.

Moreover, the court reads Session Law 74 as an extension of all deadlines in Chapter 278.

As the court observed in Timber New Ulm:

The court can find no plausible — or rational — reason why the legislature would create an implicitly bifurcated scheme in which a case involving the same claims and the same property would be subject to one deadline if filed in the district court, and an entirely different deadline if filed in the tax court.

Timber New Ulm, 2021 WL 5856123, at *3. The court further noted that

[t]he existence of two separate deadlines would be especially confusing, given the district court's discretion to transfer property tax petitions to the tax court. See Minn. Stat. § 278.01, subd. 1(c) (“A petition for determination under this section may be transferred by the district court to the Tax Court.”); see also Wulff v. Tax Ct. of Appeals, 288 N.W.2d 221, 224-25 (Minn. 1979) (observing the power to transfer a case from district court to tax court is discretionary with the district court).

Id. at *3 n.13. The court's interpretation of Session Law 74 avoids “such an incongruous result.” Id. at *3.¹³

Because Session Law 74 suspended the deadlines for property tax petitions under chapter 278 invoking the jurisdiction of either the district court or the tax court, and because Session Law 3 further extended that deadline until April 15, 2021, the petitions in these matters were timely filed. The County's motions to dismiss are denied.

J.N.B.H.