                                                                            Mar 03 2015, 9:14 am




      APPELLANT PRO SE                                           ATTORNEYS FOR APPELLEE
      Gordon A. Etzler                                           Gregory F. Zoeller
      Gordon A. Etzler & Associates, LLP                         Attorney General of Indiana
      Valparaiso, Indiana
                                                                 John Lowrey
                                                                 Deputy Attorney General
                                                                 Indianapolis, Indiana




                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Gordon A. Etzler,                                         March 3, 2015

      Appellant-Plaintiff,                                      Court of Appeals Cause No.
                                                                50A04-1406-PL-285
              v.
                                                                Appeal from the Marshall Superior
      Indiana Department of Revenue,                            Court
                                                                The Honorable Curtis D. Palmer,
      Appellee-Defendant.
                                                                Judge
                                                                Case No. 50C01-1308-PL-39




      Robb, Judge.



                                 Case Summary and Issue
[1]   Gordon Etzler, pro se, appeals the trial court’s award of summary judgment in

      favor of the Indiana Department of Revenue (the “Department”). Etzler raises

      two issues for our review: (1) whether the trial court abused its discretion by

      denying Etzler’s motion to strike an affidavit designated by the Department in
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      support of its motion for summary judgment; and (2) whether the trial court

      erred by awarding summary judgment to the Department. Concluding Etzler is

      entitled to summary judgment, we reverse.1



                              Facts and Procedural History
[2]   On December 20, 2000, the Department filed four tax warrants in Marshall

      County for unpaid income taxes owed by Dale Dodson. On July 16, 2010, the

      Department renewed its tax warrants in Marshall County, extending their life

      for an additional ten years.


[3]   On November 16, 2010, Etzler filed a UCC Financing Statement with the

      Indiana Secretary of State, asserting an interest in any breeder’s award proceeds

      owed to Dodson by the Indiana Horse Racing Commission. On November 17,

      2010 and October 13, 2011, the Department levied against two separate

      breeder’s awards in the amounts of $7,400 and $4,100, respectively. The funds

      were payable to Dodson but were intercepted and withheld by the Indiana State

      Auditor prior to deposit in Dodson’s bank account. The funds were used to

      satisfy Dodson’s outstanding tax liabilities.


[4]   Etzler sent several letters to the Department claiming a right to the breeder’s

      award funds and demanding that the funds be paid to him. The Department




      1
        The resolution of Etzler’s motion to strike does not affect the outcome of this case. Therefore, we focus
      only on the issue of which party is entitled to summary judgment. We note, however, that the facts
      contained in the affidavit Etzler challenges are the same facts on which he relies in his Appellant’s Brief.

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      denied that Etzler had a superior interest in the funds and refused his demands

      for payment. Etzler sought an administrative review hearing to challenge the

      validity of Dodson’s tax liability, but the Department denied Etzler’s request.

      Etzler then brought an action with the Indiana Tax Court, but the case was

      dismissed for lack of subject matter jurisdiction on November 21, 2011. See

      Etzler v. Indiana Dep’t of State Revenue, 957 N.E.2d 706, 709-10 (Ind. T.C. 2011).


[5]   On November 11, 2012, Etzler filed a complaint against the Department in

      Porter County. On June 7, 2013, the case was transferred to Marshall County

      as the proper venue. Once in Marshall County Superior Court, both parties

      filed motions for summary judgment and designated evidence in support

      thereof. Etzler filed a motion to strike the affidavit of Shawna Cole, which was

      designated by the Department in support of its motion for summary judgment.

      On April 29, 2014, the trial court granted the Department’s motion for

      summary judgment, denied Etzler’s motion for summary judgment, and denied

      Etzler’s motion to strike. Etzler then filed a motion to correct error, which the

      trial court summarily denied. This appeal followed.



                                 Discussion and Decision
                                      I. Summary Judgment
[6]   Etzler contends the trial court erred by granting the Department’s motion for

      summary judgment and also by denying his own motion for summary

      judgment. When reviewing a trial court’s award of summary judgment, we

      apply the same standard as the trial court. Manley v. Sherer, 992 N.E.2d 670,
      Court of Appeals of Indiana | Opinion 50A04-1406-PL-285 | March 3, 2015   Page 3 of 9
      673 (Ind. 2013). Summary judgment is appropriate where there is no genuine

      issue of material fact and the moving party is entitled to judgment as a matter of

      law. Ind. Trial Rule 56(C). Our review is limited to facts designated to the trial

      court. Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind. 2013). All factual

      inferences are made in favor of the non-moving party, and we resolve all doubts

      as to the existence of an issue of material fact against the moving party. Manley,

      992 N.E.2d at 673. “The fact that the parties have filed cross-motions for

      summary judgment does not alter our standard for review. We consider each

      motion separately to determine whether the moving party is entitled to

      judgment as a matter of law.” Asklar v. Gilb, 9 N.E.3d 165, 167 (Ind. 2014)

      (citation omitted). The appellant has the burden of demonstrating that

      summary judgment was erroneous. Amaya v. Brater, 981 N.E.2d 1235, 1239

      (Ind. Ct. App. 2013), trans. denied. Questions of statutory construction, which

      this case presents, are questions of law that are reviewed de novo. Moryl v.

      Ransone, 4 N.E.3d 1133, 1137 (Ind. 2014).


[7]   If the Department determines that a person owes tax to the State, then it must

      issue a demand notice ordering that person to pay. Ind. Code § 6-8.1-8-2(a). If

      the person fails to comply with the demand within ten days, then the

      Department may issue a tax warrant for the amount of tax owed plus additional

      fees, costs, and penalties. Ind. Code § 6-8.1-8-2(b). The Department may issue

      a tax warrant in any county where the person owns property, and a circuit court

      clerk receiving a tax warrant shall record the tax warrant as a judgment against

      the taxpayer. Ind. Code § 6-8.1-8-2(c) & (d).


      Court of Appeals of Indiana | Opinion 50A04-1406-PL-285 | March 3, 2015    Page 4 of 9
              (e) When the entry is made, the total amount of the tax warrant
              becomes a judgment against the person owing the tax. The judgment
              creates a lien in favor of the state that attaches to all the person’s
              interest in any:
                       (1) chose in action in the county; and
                       (2) real or personal property in the county;
              excepting only negotiable instruments not yet due.
      Ind. Code § 6-8.1-8-2(e).


[8]   The Department may collect the tax debt by utilizing the services of the county

      sheriff, see Ind. Code §§ 6-8.1-8-3, or it “may proceed in the same manner that

      any debt due the state is collected . . . .” Ind. Code § 6-8.1-8-4. The

      Department also has some authority to unilaterally collect without further

      judicial proceedings; that authority is provided for as follows:

              After a tax warrant becomes a judgment under section 2 of this
              chapter, a tax warrant is returned uncollected to the department under
              section 3 of this chapter, or the taxpayer does not pay the amount
              demanded under section 2(b) of this chapter and the taxpayer has
              taken an action under section 2(n) of this chapter to foreclose the lien,
              the department may take any of the following actions without judicial
              proceedings.
                       (1) The department may levy upon the property of the taxpayer
                       that is held by a financial institution . . .
                       (2) The department may garnish the accrued earnings and
                       wages of a taxpayer by sending a notice to the taxpayer’s
                       employer. . . .
                       (3) The department may levy upon and sell property . . . .
      Ind. Code § 6-8.1-8-8.


[9]   The parties’ dispute turns on who had priority in the breeder’s award proceeds

      and whether the Department had authority to levy the proceeds in the manner

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       it did. “Under the common law, priority in time gives a lien priority in right.”

       Johnson v. Johnson, 920 N.E.2d 253, 256 (Ind. 2010). In other words, where a

       debtor owes to multiple creditors, the creditor who first perfects its interest in

       the debtor’s property has the right to collect on that property first.


[10]   The Department filed its tax warrants in 2000 and renewed them in 2010—well

       before Etzler filed his first UCC Financing Statement in 2011. The Department

       contends that because its liens were established first, it had a superior interest in

       the breeder’s award proceeds and properly exercised its authority to levy on the

       proceeds pursuant to Indiana Code § 6-8.1-8-8. The Department’s argument

       rests on its conclusory assertion that “Indiana law does not limit the

       Department’s ability to levy on property to satisfy judgment liens by county.”

       Brief of Appellee at 11 (emphasis added). Our own inspection of the relevant

       code sections leads us to a different conclusion.


[11]   Although Indiana Code section 6-8.1-8-8 does not specifically reference a

       county-based limit on the Department’s collection methods, Indiana Code

       chapter 6-8.1-8 is laden with indications that the Department’s tax warrant liens

       are effective county-by-county. Our law states that once a judgment on a tax

       warrant has been entered that judgment “creates a lien in favor of the state that

       attaches to all the person’s interest in any: (1) chose in action in the county; and

       (2) real or personal property in the county . . . .” Ind. Code § 6-8.1-8-2(e)

       (emphasis added). Moreover, the Department’s assertion that a judgment

       entered in one county gives it authority to levy on property statewide is

       contradicted by the law’s contemplation that tax warrants may be filed in

       Court of Appeals of Indiana | Opinion 50A04-1406-PL-285 | March 3, 2015         Page 6 of 9
       multiple counties. See Ind. Code § 6-8.1-8-2(a) (“If the department files a tax

       warrant in more than one (1) county, the department is not required to issue

       more than one (1) demand notice.”).


[12]   The Department relies on Indiana Code section 6-8.1-8-8 for a grant of

       authority to levy on property anywhere in the state, but the authority in that

       section is conditioned such that it may be exercised “[a]fter a tax warrant

       becomes a judgment under section 2 of this chapter . . . .” Ind. Code § 6-8.1-8-8

       (emphasis added). We read this statute to mean that the Department’s

       authority to collect upon its lien “without judicial proceedings” is limited to the

       property “in the county” in which a tax warrant was issued and a judgment

       created pursuant to Indiana Code section 6-8.1-8-2. Presumably, the

       Department must utilize other methods and resources to collect on property of

       the taxpayer in a county other than one in which a tax warrant has been issued.

       See, e.g., Ind. Code §§ 6-8.1-8-4 and -8.5.2 It does not appear that that the

       Department issued a tax warrant in any county other than Marshall County,

       nor did it attempt to enforce the judgment by execution, initiate proceedings

       supplementary, or engage in any other action available to it in order to satisfy




       2
         “When the department collects a judgment arising from a tax warrant, it may proceed in the same
       manner that any debt due the state is collected, except as provided in this chapter. The department my
       employ special counsel or contract with a collection agency for the collection of a delinquent tax . . . .”
       Ind. Code § 6-8.1-8-4(a).
       “For purposes of this chapter, a judgment arising from a tax warrant is enforceable in the same manner
       as any judgment issued by a court of general jurisdiction. . . . The department may initiate proceedings
       supplementary to execution in any court of general jurisdiction in a county in which a judgment arising
       from a tax warrant has been recorded.” Ind. Code § 6-8.1-8-8.5(a)-(b).



       Court of Appeals of Indiana | Opinion 50A04-1406-PL-285 | March 3, 2015                               Page 7 of 9
       the judgment. We conclude that because the judgment resulting from the

       Department’s Marshall County tax warrant only creates a lien on property “in

       the county,” Ind. Code § 6-8.1-8-2(e), and because the Department did not take

       measures to establish a lien on property located in any other county, the

       Department’s ability to levy on Dodson’s property was limited to Marshall

       County.


[13]   The Department levied on the breeder’s award proceeds prior to their deposit in

       Dodson’s bank account and thus prior to the Department’s ability to collect

       directly from a financial institution under Indiana Code section 6-8.1-8-8(1).

       The Department does not dispute that the funds were located outside of

       Marshall County at the time they were seized. Consequently, we conclude that

       the Department did not have authority to levy on the breeder’s award proceeds

       and that it is not entitled to summary judgment.


[14]   Further, the Department does not dispute that Etzler filed a valid UCC

       Financing Statement that perfected his interest in the breeder’s awards.

       Therefore, Etzler was entitled to collect the breeder’s award proceeds, and his

       motion for summary judgment should have been granted.



                                                Conclusion
[15]   We conclude that Etzler had priority in the breeder’s award proceeds and that

       the Department did not have statutory authority to levy upon those proceeds in

       the manner it did. Therefore, the trial court erred by awarding summary


       Court of Appeals of Indiana | Opinion 50A04-1406-PL-285 | March 3, 2015     Page 8 of 9
judgment to the Department and denying Etzler’s motion for summary

judgment.


Reversed.


Bailey, J., and Brown, J., concur.




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