                                                                           FILED
                                                                       Feb 14 2020, 5:43 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court




ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
Thomas F. Bedsole                                          James P. Fenton
Maggie L. Smith                                            Timothy A. Manges
Emily J. Schmale                                           Fletcher Van Gilder, LLP
Frost Brown Todd, LLC                                      Fort Wayne, Indiana
Indianapolis, Indiana



                                             IN THE
    COURT OF APPEALS OF INDIANA

Southwest Allen County Fire                                February 14, 2020
Protection District and Tera K.                            Court of Appeals Case No.
Klutz, in her official capacity as                         19A-PL-510
Auditor of Allen County,                                   Appeal from the Allen Superior
Indiana,                                                   Court
Appellants-Defendants,                                     The Honorable Craig J. Bobay,
                                                           Judge
        v.                                                 Trial Court Cause No.
                                                           02D02-1605-PL-231
City of Fort Wayne,
Appellee-Plaintiff.



Riley, Judge.




Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020                           Page 1 of 25
                                    STATEMENT OF THE CASE
[1]   Appellants-Defendants, the Southwest Allen County Fire Protection District

      (District) and Tera K. Klutz, 1 in her official capacity as Auditor of Allen

      County, Indiana (Auditor), appeal the trial court’s summary judgment in favor

      of Appellee-Plaintiff, the City of Fort Wayne (City), on the City’s request for

      declaratory judgment to receive the tax revenues from Annexed Territories. 2


[2]   We affirm in part, reverse in part, and remand for further proceedings.


                                                        ISSUES
[3]   The District raises two issues for our review, which we restate as:


             (1) Whether the City is entitled to receive the tax revenue from the fire

                 protection services it provided to annexed areas; and

             (2) Whether the City is entitled to retroactive relief even though the City

                 failed to exhaust its administrative remedies.


                          FACTS AND PROCEDURAL HISTORY
[4]   The underlying facts were stated by this court in its disposition of the first

      appeal; therefore, we shall rely on City of Fort Wayne v. Southwest Allen County

      Fire Protection District, 82 N.E.3d 299 (Ind. Ct. App. 2017), trans. denied (First




      1
          The Auditor did not file a brief on appeal.
      2
       We heard argument in this cause on December 11, 2019 in the Indiana Court of Appeals Courtroom in
      Indianapolis, Indiana. We thank counsel for their excellent advocacy.

      Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020                       Page 2 of 25
      Appeal) for the recitation of the facts. The District is a fire protection district

      created in 1986 pursuant to state law. Beginning in December of 1987, the City

      effected a series of fifteen annexations of territory, formerly located within the

      District. The first of these annexations took effect in December 1987, with the

      most recent being on January 1, 2006. Following the effective date of these

      annexations, the Fort Wayne Fire Department (FWFD) provided fire

      protection services to the areas within the annexed territories (Annexed

      Territories) that formerly were serviced by the District. Subsequent to the

      annexations, neither the City, FWFD, or the FWFD Pension Fund received

      distributions of property tax revenue relating to the fire protection services from

      the Annexed Territories; rather, the Auditor continued to make these

      distributions to the District.


[5]   By letter dated August 27, 2014, the City notified the District and the Auditor

      that pursuant to Indiana’s annexation statutes—enacted in Ind. Code §§ 36-8-

      11-16; -22—once the areas that were part of the District were annexed by the

      City, and once the City began providing fire protection services to the Annexed

      Territories, the Annexed Territories were no longer part of the District and the

      property tax revenues derived from these Annexed Territories should have been

      redirected to the applicable City fire protection funds.




      Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020        Page 3 of 25
[6]   Each year, the Department of Local Government Finance (DLGF) prepared a

      document, titled the 1782 Notice, 3 and sent it to the City. The 1782 Notice is

      based on assessed values information provided by the Auditor. This

      information submitted by the Auditor includes an allocation of the values to be

      directed, among others, to specific City or District funds. The Auditor provided

      the total valuation of the Annexed Territories to the DLGF, based upon an

      understanding, rooted in an Unofficial Indiana Attorney General Advisory

      Letter of July 6, 1988, that informed that the District was grandfathered.

      Specifically, this Unofficial Letter advised that the annexing municipality

      cannot tax the annexed area within the fire protection district for fire protection

      services in order to avoid the risk of double taxation. Accordingly, the Auditor

      calculated the total assessed value of land within the boundaries of the District,

      including the assessments of the Annexed Territories. The Auditor did not

      include the Annexed Territories, now serviced by the FWFD, in the calculation

      of the total attributable to the City and the FWFD.


[7]   On May 11, 2016, the City filed its Complaint for Declaratory and Other Relief

      against the District and the Auditor, seeking a declaration that the City is

      entitled to receive the property tax revenues of the Annexed Territories. On

      July 27, 2016, the Auditor filed her motion to dismiss Plaintiff’s Request,

      arguing that the trial court did not have subject matter jurisdiction over the

      City’s claim because the City had failed to exhaust the administrative remedies



      3
          The 1782 Notice is the notice of final budget recommendations pursuant to I.C. § 6-1.1-17-16(d) (2016).


      Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020                               Page 4 of 25
      available to it. On August 8, 2016, the Auditor filed a complementary motion

      to dismiss, in which the Auditor sought a complete dismissal of the City’s

      Complaint based on a lack of subject matter jurisdiction because the claims

      asserted fell within the exclusive jurisdiction of the Indiana Tax Court. The

      District joined in the Auditor’s motions. On October 30, 2016, following a

      hearing, the trial court issued its Order, granting the Auditor’s and the District’s

      motions to dismiss.


[8]   The City appealed. After conducting oral argument, this court issued the First

      Appeal, concluding that


              the present case is an annexation case and requires no
              consideration of substantive tax law. The parties do not dispute
              the tax assessments and do not request a change in tax levies nor
              are the parties attempting to collect a tax. No calculation to
              determine a specific tax assessment must be made, and no
              interpretation of tax laws is required. Rather, the City’s dispute
              merely centers on the intended recipient of taxes already assessed
              and collected, pursuant to I.C. § 36-8-11-22. This is not
              quintessentially a tax matter.


      Id. at 304 (internal citation omitted). Accordingly, we held that subject matter

      jurisdiction was vested in the trial court and we remanded for further

      proceedings.


[9]   On remand, the City sought partial summary judgment on December 11, 2018,

      as to the merits of its declaratory judgment request, seeking a declaration that

      the City is entitled to collect future tax revenues for the Annexed Territories.

      That same day, the District also moved for summary judgment, responding that

      Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020      Page 5 of 25
       the City cannot statutorily receive the future tax revenues of the Annexed

       Territories, and seeking a declaration that the relief requested by the City in its

       Complaint—reallocation of past, present, and future tax revenues—was not

       available as to any tax levy because the City had failed to exhaust its

       administrative remedies.


[10]   On February 7, 2019, after a hearing, the trial court granted the City’s motion

       for partial summary judgment and denied the District’s requested relief. In its

       summary judgment, the trial court concluded:


               The [c]ourt disagrees with the [District] as to which statute or
               statutes control. On appeal of this [c]ourt’s October 30, 2016
               Order of dismissal, the Indiana Court of Appeals concluded that
               this is an annexation case, and as such, the annexation statute
               I.C. § 36-8-11-22 controls. It is undisputed that the [District] had
               fire protection districts in the Annexed Territories, that the City
               has annexed the Annexed Territories, and that the City has
               provided fire protection services in the Annexed Territories. The
               [c]ourt concludes that I.C. § 36-8-11-22 plainly states that when a
               municipality annexes areas that are part of a fire protection
               district, and then provides fire services in the annexed areas, the
               fire protection district ceases to exist in those areas. Thus, by
               operation of the controlling statute, and as a matter of law, the
               [c]ourt concludes that the [District] has ceased to exist in the
               areas of the Annexed Territories.


               The [District] makes the additional argument that the [c]ourt
               lacks the authority to grant the relief sought by the City. The
               [District] continues to argue that the City must seek an
               administrative remedy via the [DLGF] and thereafter appeal to
               the Indiana Tax Court. In the [First Appeal], the Indiana Court
               of Appeals summarized the [District’s] arguments on appeal,

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020       Page 6 of 25
               which are identical to this second argument now being advanced
               by the [District] in its [m]otion for [s]ummary [j]udgment. The
               Court of Appeals concluded that this [c]ourt can grant relief
               “because the present case is an annexation case and requires no
               consideration of substantive tax law . . .” Thus, “the trial court
               has subject matter jurisdiction to decide the City’s request for
               declaratory judgment.”


               The determination of the Court of Appeals as to this legal issue is
               both binding on this [c]ourt and the appellate court in any
               subsequent appeal involving the same case and substantially the
               same facts. The [First Appeal] and its binding nature on legal
               issues facing the [c]ourt in this case, compels the [c]ourt to
               conclude that as a matter of law, this [c]ourt has the authority
               and subject matter jurisdiction to grant relief sought by the City.
               The City need not pursue a remedy through the DLGF.


       (Appellant’s App. Vol. II, pp. 18-19) (internal references omitted).


[11]   The District now appeals. Additional facts will be provided if necessary.


                                DISCUSSION AND DECISION
                                               I. Standard of Review


[12]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

       shoes of the trial court, applying the same standards in deciding whether to

       affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

       891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

       must determine whether there is a genuine issue of material fact and whether

       the trial court has correctly applied the law. Id. at 607-08. In doing so, we

       consider all of the designated evidence in the light most favorable to the non-

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020      Page 7 of 25
       moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if

       it helps to prove or disprove an essential element of the plaintiff’s cause of

       action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an

       opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.

       Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant

       of summary judgment has the burden of persuading this court that the trial

       court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.


[13]   We observe that, in the present case, the trial court entered findings of fact and

       conclusions of law thereon in support of its judgment. Generally, special

       findings are not required in summary judgment proceedings and are not binding

       on appeal. AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48

       (Ind. Ct. App. 2004). However, such findings offer a court valuable insight into

       the trial court’s rationale and facilitate appellate review. Id.


                                                  II. Tax Revenue


[14]   At issue here is the broad and extensive statutory scheme that establishes and

       funds fire protection districts and addresses annexation issues connected to

       these districts. The 1981 enabling legislation mandates that the Fire District is

       to provide fire protection services and receive the tax revenues for the real

       property within the Fire District’s boundaries, which the legislation expressly

       contemplates might be overlapping between the Fire District boundaries and

       other municipal entities’ boundaries. See I.C. §§ 36-8-11-4; -16.




       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020          Page 8 of 25
[15]   In 1987, the General Assembly continued the evolution of fire districts and

       enacted Public Law 341 which addressed aspects of fire districts in the context

       of annexation. In this regard, Indiana Code section 36-8-11-22 allows property

       in a fire district to be transferred to a municipality upon annexation, and the

       municipality then provides the services and receives the tax revenue.

       Specifically, the statute provides:


               Areas annexed by municipalities


               (a) Any area that is part of a fire protection district and is
                   annexed by a municipality that is not a part of the district
                   ceases to be a part of the fire protection district when the
                   municipality begins to provide fire protection services to the
                   area.


                    ****


                    Nothing in this section requires a municipality to provide fire
                    protection services to an annexed area described in this
                    subsection.


       I.C. § 36-8-11-22(a).


[16]   Furthermore, Indiana Code section 36-4-3-7 requires that the annexing

       municipality takes on all the financial obligations of that fire district relating to

       the assessed valuation of the property being removed from the fire protection

       district. In other words, the municipality obtaining the revenues must also be

       responsible for the payment of the ongoing obligations. Specifically, the statute

       stipulates:

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020           Page 9 of 25
        Publication of adopted ordinance; effectiveness; fire protection
        districts.


        (c) Subsection (d) and (e) apply to fire protection districts that
        are established after July 1, 1987 . . .


        (d) [] whenever a municipality annexes territory, all or part of
        which lies within a fire protection district (I.C. § 36-8-11), the
        annexation ordinance (in the absence of remonstrance and
        appeal under section 11 or 15.5 of this chapter) takes effect the
        second January 1 that follows the date the ordinance is adopted
        and upon the filing required by section 22(a) of this chapter.
        Except in the case of an annexation to which subsection (g)
        applies, the municipality shall:


                 (1) provide fire protection services to that territory
                 beginning the date the ordinance is effective; and


                 (2) send written notice to the fire protection district of the
                 date the municipality will begin to provide fire protection
                 to the annexed territory within ten (10) days of the date the
                 ordinance is adopted.


        (e) If the fire protection district from which a municipality
        annexes territory under subsection (d) is indebted or has
        outstanding unpaid bonds or other obligations at the time the
        annexation is effective, the municipality is liable for and shall pay
        that indebtedness in the same ratio as the assessed valuation of
        the property in the annexed territory (that is part of the fire
        protection district) bears to the assessed valuation of all property
        in the fire protection district, as shown by the most recent
        assessment for taxation before the annexation, unless the
        assessed property within the municipality is already liable for the
        indebtedness. . . .


Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020         Page 10 of 25
       I.C. § 36-4-3-7 (emphasis added).


[17]   Focusing on the 1987 statutory amendments, the District contends that because

       the District was created on or before June 14, 1987, the financial protections

       provided in I.C. § 36-4-3-7 are not applicable. “To avoid disharmonious,

       irrational, [and] illogical results,” the District maintains that the date limitation

       of I.C. § 36-4-3-7 must be read to also apply to I.C. § 36-8-11-22, which was

       enacted simultaneously with I.C. § 36-4-3-7, and therefore, as the District was

       created prior to June 14, 1987, the boundaries of the taxing district for the

       purpose of levying taxes cannot be changed. (Appellant’s Br. p. 17). Resorting

       to public policy, the District claims that “[t]his is the only way to shield fire

       districts from municipalities using I.C. § 36-8-11-22 as a sword to selectively

       annex only those properties in the fire district with a sizeable property tax

       base—as was done here—while leaving the fire district still holding the financial

       responsibilities to provide fire services to the remainder of the fire district but

       leaving it without sufficient resources to do so because of the selective

       annexation.” (Appellant’s Br. p. 18). To support its combined reading of the

       two statutes, the District relies on the general guidelines to interpret statutes. It

       argues that because both statutes were part of the same Act dealing with the

       same subject matter (Annexation of fire protection districts), the Legislature

       knew that Indiana law mandates the statutes must be read together. Providing

       the temporal framework in I.C. § 36-4-3-7, which carried over to all the other

       statutes in the Act, meant that the Legislature did not have to repeat the date

       limitation in each of the statutes in the Act.

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020        Page 11 of 25
[18]   In response, the City claims that where the City has annexed areas within the

       District and has provided fire protection services to those same areas, the

       District ceases to exist, entitling the City to the tax levies of the Annexed

       Territories. To support its argument, the City relies on another canon of

       statutory construction, i.e., “when general and specific statutes conflict in their

       application to a particular subject matter, the specific statute will prevail over

       the general statute.” Lake Co. Bd. of Elections and Registration, v. Millender, 727

       N.E.2d 483, 486 (Ind. Ct. App. 2000). The specific statute being I.C. § 36-8-11-

       22, which—according to the City—unambiguously provides that “[a]ny area

       that is part of a fire protection district and is annexed by a municipality that is

       not part of the district ceases to be a part of the fire protection district when the

       municipality begins to provide fire protection services to the area.” The City

       contends that this statute “speaks plainly to this case and admits of no

       exceptions where a city has annexed areas of a fire protection district and has

       begun to provide fire protection services to those areas.” (Appellee’s Br. p. 15).

       Had the Legislature wished to provide that I.C. § 36-8-11-22 only applied to

       districts established after June 14, 1987, it could have easily incorporated a date

       as it did in I.C. § 36-4-3-7(c). Rather, the Legislature’s failure to include a date

       signals its intent that no date should be associated with I.C. § 36-8-11-22.


[19]   While both parties implicitly appear to advance a claim that the annexation

       statutes are ambiguous, we are mindful that the parties’ disagreement about a

       provision is not conclusive of ambiguity, but is merely evidence that an

       ambiguity may exist. See Indianapolis Publ. Transp. Corp. v. Ind. Dep’t of State


       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020        Page 12 of 25
       Revenue, 512 N.E.2d 906, 908 (Ind. Tax Ct. 1987). When, as here, appellate

       courts interpret a statute, they independently review a statute’s meaning and

       apply it to the facts of the case under review. State Farm Fire and Cas. Co. v.

       Riddell Nat. Bank, 984 N.E.2d 655, 658 (Ind. Ct. App. 2013), trans. denied. A

       court should construe and interpret a statute only if it is ambiguous. Jefferson

       Smurfit Corp. v. Ind. Dept. of State Revenue, 681 N.E.2d 806, 810 (Ind. Tax Ct.

       1997). A statute that is clear and unambiguous must be read to mean what it

       clearly expresses, and its plain and obvious meaning may not be enlarged or

       restricted. Dep’t of State Revenue v. Horizon Bancorp, 644 N.E.2d 870, 872 (Ind.

       1994). The words and phrases of such a statute shall be taken in their plain,

       ordinary, and usual sense. State Bd. of Tax Comm’rs v. Jewell Grain Co., 556

       N.E.2d 920, 921 (Ind. 1990). But if a statute is susceptible to more than one

       interpretation, it is deemed ambiguous and thus open to judicial construction.

       Sees v. Bank One, Ind., N.A., 839 N.E.2d 154, 157 (Ind. 2005). At that point, we

       will engage in construction to effect the intent of the legislature. Hinshaw v. Bd.

       of Comm’rs of Jay Co., 611 N.E.2d 637, 638 (Ind. 1993). We do not presume that

       the legislature intended language used in a statute to be applied illogically or to

       bring about an unjust or absurd result. State ex. rel. Hatcher v. Lake Superior Ct.,

       Room Three, 500 N.E.2d 737, 739 (Ind. 1986).


[20]   Our review of the statute at issue, I.C. § 36-8-11-22, does not reveal any

       ambiguity and requires no judicial interpretation. The statute is unequivocal

       that where, as here, the area that was originally part of the District, becomes

       annexed by the City, the area ceases to be part of the District as soon as the City

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020        Page 13 of 25
       begins to provide fire protection services to the Annexed Territory. The parties

       do not dispute that since the annexation, the City has provided the Annexed

       Territories with fire protection services. With the exception of providing fire

       protection services, the legislature did not impose any other requirements on an

       annexing municipality prior to becoming the recipient of the tax revenue in the

       annexed areas.


[21]   We are not persuaded by the District’s argument that the temporal framework

       in I.C. § 36-4-3-7 should be read into the other statutes of the Act. While both

       statutes are part of the same Act, our legislature did not provide any indication

       that the date restriction included in one statute, should be read into another

       statute. Rather to the contrary: while I.C. § 36-4-3-7 consists of subsections (a)

       through (g), our legislature explicitly limited the date restriction to apply only to

       subsections (d) and (e). As our legislature restricted the application to two

       specific subsections within a broader statute, there is no reason to infer, absent

       any explicit indication, that it intended to have us apply the same restrictive

       provision in a different statute. See Jefferson Smurfit Corp., 681 N.E.2d at 810

       (“[W]hen a definite provision is made with reference to one particular

       subdivision of a section of the law dealing with the identical subject matter as

       the other subdivisions thereof and a similar reference is omitted from the other

       subdivisions thereof as well as from all of the rest of the section, the particular

       reference is intended to apply solely to the subdivision in which it is contained

       and to exclude its application from all of the rest.”) Accordingly, giving effect

       to the plain, ordinary, and usual meaning of the words of the statute, we


       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020       Page 14 of 25
       conclude that upon annexation and provision of the fire protection services to

       the Annexed Territories, the City was entitled to receive the assessed tax

       revenue associated with the Annexed Territories.


                         III. Administrative Remedies & Reallocation of Tax Levies


                                                A. Law of the Case


[22]   As a threshold issue, we need to determine the parameters of this second issue.

       The City contends, and the trial court agreed, that the District’s argument

       concerning the exhaustion of administrative remedies is barred by the law of the

       case. Pointing to our decision that the trial court has subject matter jurisdiction

       because “there is no tax law that needs interpreted or applied” and footnote 4 in

       which we outline a possible litigation strategy with respect to the DLGF, the

       City claims that the law of the case derived from the First Appeal limited the

       administrative remedy to the situation when “the Auditor and/or DLGF fail to

       comply with the declaratory judgment.” (First Appeal, 82 N.E.2d at 304, n.4).


[23]   The law of the case doctrine provides that an appellate court’s determination of

       a legal issue binds both the trial court and the court on appeal in any subsequent

       appeal involving the same case and substantially the same facts. Pinnacle Media,

       LLC v. Metr. Dev. Com’n of Marion Co., 868 N.E.2d 894, 901 (Ind. Ct. App.

       2007), trans. denied. The purpose of the doctrine is to minimize unnecessary

       relitigation of legal issues once they have been resolved by an appellate court.

       Id. Accordingly, under the law of the case doctrine, relitigation is barred for all

       issues decided “directly or by implication in a prior decision.” Id. However,

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020          Page 15 of 25
       where new facts are elicited upon remand that materially affect the questions at

       issue, the court upon remand may apply the law to the new facts as

       subsequently found. Id. We also note that the law of the case doctrine “is a

       discretionary tool.” Hanson v. Valma M. Hansom Revocable Trust, 855 N.E.2d

       655, 662 (Ind. Ct. App. 2006). To invoke this doctrine, the matters decided in

       the earlier appeal must clearly appear to be the only possible construction of an

       opinion. Id. Thus, questions not conclusively decided in the earlier appeal do

       not become law of the case. Id. Moreover, statements that are not necessary in

       the determination of the issues presented are dicta, are not binding, and do not

       become the law of the case. Id. As always, it should be remembered that we do

       not decide issues in footnotes. See Richardson v. State, 856 N.E.2d 1222, 1229

       (Ind. Ct. App. 2006), trans. denied.


[24]   The First Appeal analyzed whether the trial court had subject matter

       jurisdiction over the dispute between the parties. Based on the specific facts

       before us, we concluded that the case was essentially an annexation case which

       did not require an interpretation of tax laws. The current second issue before us

       on this subsequent appeal focuses on the question as to whether the City should

       have exhausted its administrative remedies prior to being awarded the tax levies

       of the Annexed Territories. Failing to exhaust administrative remedies is not

       directly or by implication connected to the subject matter jurisdiction and

       should be considered as a separate question, unrelated to the First Appeal. See

       First Am. Title Ins. Co. v. Robertson, 19 N.E.3d 757, 760 (Ind. 2014) (“the

       exhaustion of administrative remedies . . . is a procedural error and does not

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020     Page 16 of 25
       implicate the trial court’s subject matter jurisdiction.”) Accordingly, the law of

       the case doctrine is not implicated and we have jurisdiction to decide this issue

       on the merits.


                                                  B. Tax Revenues


[25]   The City’s declaratory judgment action requested the trial court to determine

       whether the City is entitled to past, present, and future property tax revenues

       derived from the Annexed Territories and to order tax revenues previously

       allocated to the District reallocated to the City. However, in its motion for

       partial summary judgment, the City only sought a declaration that the City is

       entitled to future tax revenues.


[26]   On the other hand, the District sought summary judgment not only as to its

       right to continue providing fire protection services to the Annexed Territories,

       but also that any tax levy, past, present, and future, be challenged through the

       administrative process prior to being reallocated to the City.


[27]   The trial court granted partial summary judgment to the City and denied the

       District’s summary judgment. The District appealed the trial court’s summary

       judgment and is now challenging the trial court’s denial of its motion of

       summary judgment, i.e., that the City is not entitled to past tax levies that have

       already been allocated and distributed. The City does not address past

       allocations, but only presents an argument with respect to current and future

       allocations of the tax levies. For judicial expediency’s sake, we will address the



       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020     Page 17 of 25
       tax levy argument as initially presented by the District, i.e., past, present, and

       future payments.


[28]   Property tax revenues fund local government through tax levies. See I.C. § 6-

       1.1-17-1 et seq. 4 The tax levy for a specific area is based on the political

       subdivision’s budget, tax rates, and assessed values as determined and certified

       by the auditor. I.C. § 6-1.1-17-1 (2016). The county auditor then submits the

       budget, tax rates, and tax levies to the County Board of Tax Adjustment for

       review and adjustment. I.C. §§ 6-1.1-17-5 (2012);-6 (2016). Challenges must be

       made by way of an appeal to the DLGF. I.C. § 6-1.1-17-13 (2009). After the

       DLGF provides formal notice with a 1782 Notice of the final budget, the

       objecting political subdivision “must file a statement with the [DLGF] no later

       than ten (10) days” after receiving the annual notice of tax levy. I.C. § 6-1.1-17-




       4
         By P.L. 257-2019, our Legislature made significant changes to Chapter 17 of Indiana Code 6-1.1. In
       essence, the current Chapter provides that the auditor shall submit a certified statement of the assessed value
       for a specific political subdivision to the DLGF. I.C. § 6-1.1-17-1(a). In turn, the DLGF “shall make the
       certified statement available on the department’s computer gateway.” I.C. § 6-1.1-17-1(b). Thereafter, the
       DLGF “shall certify the tax rates and tax levies for all funds of political subdivisions subject to the [DLGF’s]
       review.” I.C. § 6-1.1-17-16(a).
                The [DLGF] shall give the political subdivision notification electronically in the manner
                prescribed by the [DLGF] specifying any revision, reduction, or increase the department
                proposed in a political subdivision’s tax levy or tax rate. The political subdivision has ten
                (10) calendar days from the date the political subdivision receives the notification to
                provide a response electronically in the manner prescribed by the [DLGF]. The response
                may include budget reductions, reallocation of levies, a revision in the amount of
                miscellaneous revenues, and further review of any other item about which, in the view of
                the political subdivision, the department is in error. The [DLGF] shall consider the
                adjustments as specified in the political subdivision’s response if the response is provided as
                required by this subsection and shall deliver a final decision to the political subdivision.
       I.C. § 6-1.1-17-16(g). Accordingly, the Legislature has streamlined the DLGF’s procedures by incorporating
       an electronic gateway system, which replaces the formerly written 1782 Notice of the final budget.

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020                               Page 18 of 25
       13 (2009). The DLGF shall then “consider the adjustments as specified in the

       political subdivision’s response if the response is provided as required by this

       subsection and shall deliver a final decision to the political subdivision. I.C. §

       6-1.1-17-13 (2009).


[29]   “A claimant with an available administrative remedy must pursue that remedy

       before being allowed access to the courts.” Graham v. Town of Brownsburg, 124

       N.E.3d 1241, 1247 (Ind. Ct. App. 2019), reh’g denied, trans. denied. This is true

       even when neither a statute nor agency rule specifically mandates exhaustion as

       a prerequisite to judicial review. Id. Thus, where an administrative remedy is

       readily available, “filing a declaratory judgment action is not a suitable

       alternative” to exhaustion. Id. The exhaustion doctrine is supported by strong

       policy reasons and considerations of judicial economy.


               The exhaustion requirement serves to avoid collateral, dilatory
               action . . . and to ensure the efficient, uninterrupted progression
               of administrative proceedings and the effective application of
               judicial review. It provides an agency with an opportunity to
               correct its own errors, to afford the parties and the courts the
               benefit of the [agency’s] experience and expertise, and to compile
               a [factual] record which is adequate for judicial review.


       Id. There are exceptions to the general requirement to exhaust administrative

       remedies. For example, exhaustion is not required where it would be futile,

       where the agency action is ultra vires, where exhaustion would cause irreparable

       injury, or where other equitable considerations preclude exhaustion. Id.




       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020      Page 19 of 25
[30]   Here, upon receipt of the 1782 Notice which confirmed the Auditor’s allocation

       of tax levies to the District, the City was required to file a statement with the

       DLGF no later than ten (10) days after receiving this annual notice of tax levy.

       The City has conceded that it never disputed any allocations that pre-date the

       commencement of this litigation, i.e., prior to May 2016, by using the

       administrative remedies outlined in the 1782 Notice. Accordingly, the City is

       now foreclosed from pursuing these tax revenues. Moreover, as these levies

       have already been spent by the local government entity, it would be inequitable

       to allow the City to now—very belatedly—receive these tax levies.


[31]   In line with our decision in the first issue, we agree with the trial court’s

       conclusion that the City is entitled to receive all future property taxes

       attributable to fire protection services in the Annexed Territories. If the Auditor

       fails to allocate future levies to the City, and the DLGF certifies this allocation,

       then the City should follow the administrative procedure outlined in I.C. § 6-

       1.1-17, as recently amended by our Legislature in 2019.


[32]   With respect to the allocations between the date of filing the declaratory

       judgment lawsuit in May 2016 and the judgment in February 2019, we are

       apprehensive that where an administrative remedy is readily available, “filing a

       declaratory judgment action is not a suitable alternative” to exhaustion.

       Graham, 124 N.E.3d at 1247. Accordingly, as the City does not invoke any

       exceptions to the general requirement to exhaust administrative remedies, the

       City is only entitled to receive these revenues if the City appealed the 1782

       Notice within the requisite period of time. Therefore, we reverse the trial court

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020        Page 20 of 25
       in this respect, and remand for further determination whether the City timely

       availed itself of this administrative procedure.


                                               CONCLUSION
[33]   Based on the foregoing, we conclude that the City is entitled to receive the

       future tax revenues from the fire protection services it provided to the Annexed

       Territories. The City is not entitled to the past revenues. Finally, we conclude

       that the City is entitled to tax revenues between May 2016 and February 2019,

       if the City availed itself of the administrative remedy to appeal the Auditor’s

       allocation. Accordingly, we remand to the trial court for determination

       whether the City timely appealed the tax revenues allocated between May 2016

       and February 2019.


[34]   Affirmed in part, reversed in part, and remanded for further proceedings.


[35]   Bradford, C. J. concurs


[36]   Vaidik, J. concurs in part and dissents in part with separate opinion




       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020    Page 21 of 25
                                                    IN THE
           COURT OF APPEALS OF INDIANA

       Southwest Allen County Fire                                Court of Appeals Case No.
       Protection District and Tera K.                            19A-PL-510
       Klutz, in her official capacity as
       Auditor of Allen County,
       Indiana,
       Appellants-Defendants,

               v.

       City of Fort Wayne,
       Appellee-Plaintiff



       Vaidik, Judge, concurring in part, dissenting in part.


[37]   I respectfully dissent in part. I believe that our holding in the first opinion—that

       the trial court had subject-matter jurisdiction over the City’s declaratory-

       judgment action—was incorrect. As the District explains, with no dispute from

       the City, the Legislature has set forth what should happen if a political

       subdivision disagrees with an allocation of funds in a budget notice from the

       DLGF. See Appellant’s Br. pp. 13-14. “The political subdivision has ten (10)

       calendar days from the date the political subdivision receives the notice to

       provide a response electronically in the manner prescribed by the department of

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020                   Page 22 of 25
       local government finance.” Ind. Code § 6-1.1-17-16(g). If a political

       subdivision provides such a response, the DLGF “shall consider the

       adjustments as specified in the political subdivision’s response” and “shall

       deliver a final decision to the political subdivision.” Id. If the political

       subdivision remains unsatisfied, it can file a petition for judicial review “in the

       tax court.” Id. at (j) (emphasis added). Because the Legislature has established

       a procedure that leads to the tax court, I believe we erred in determining that

       the trial court had subject-matter jurisdiction in this matter. See Ind. Code § 33-

       26-3-2 (establishing that a tax court has “any other jurisdiction conferred by

       statute”).


[38]   That being said, we must resolve this appeal in accordance with our first

       opinion. In that regard, I agree with the majority that the trial court properly

       interpreted Indiana Code section 36-8-11-22 and properly determined that the

       City is entitled to the property-tax revenues from February 2019 onward.

       Where I depart from the majority is on the issue of the 2016-2019 property-tax

       revenues.


[39]   The City chose to file a declaratory-judgment action in the trial court. A trial

       court has the jurisdiction “to declare rights, status, and relations, and to

       interpret statutes, contracts, and instruments generally.” Brindley v. Meara, 198

       N.E. 301, 306 (Ind. 1935). Once the trial court declares the rights and stakes of

       the parties, execution of the order is left to “a court having jurisdiction to grant

       the relief.” Id. Indiana’s declaratory-judgment statute provides that trial courts,

       within their respective jurisdictions, “have the power to declare rights, status,

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020       Page 23 of 25
       and other legal relations whether or not further relief is or could be claimed.”

       Ind. Code § 34-14-1-1 (emphasis added). Having declared the City’s right to

       receive future tax revenues associated with the Annexed Territories, the trial

       court’s job under our first opinion is done. The City is therefore not entitled to

       seek recovery of 2016-2019 property-tax revenues in the trial court. That is so

       because the City made the choice to file a declaratory-judgment action in the

       trial court instead of exhausting their administrative remedies by filing an

       objection with the DLGF each year. That was their strategic choice. Their

       inability to now seek recovery of the 2016-2019 property-tax revenues is a

       consequence of that choice.


[40]   I am troubled by the majority’s analysis requiring the City to exhaust its

       administrative remedies while the declaratory-judgment action was pending in

       the trial court for two reasons. First, that reasoning is inconsistent with what

       we said in the first opinion—that the trial court had jurisdiction over this

       dispute without the City having to exhaust its administrative remedies. Second,

       the majority’s reasoning—requiring the City to exhaust its administrative

       remedies at the same time the trial court had jurisdiction—means that the City

       would have been required to file parallel proceedings in two separate courts—

       one in the trial court and one with the DLGF (followed by judicial review in the

       tax court). Parallel proceedings waste judicial resources, generate questions of

       which judgment controls, and may produce contradictory judgments.


[41]   I therefore concur with the majority’s conclusion that the trial court was correct

       in declaring that the City is statutorily entitled to the future property-tax

       Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020       Page 24 of 25
revenues associated with the Annexed Territories. However, I respectfully

dissent as to its resolution of the 2016-2019 property-tax revenues. I would

hold that the City is not entitled to those interim revenues and instruct the trial

court to enter summary judgment on the 2016-2019 property-tax revenues for

the District.




Court of Appeals of Indiana | Opinion 19A-PL-510 | February 14, 2020      Page 25 of 25
