District Court, Farmington Department The Honorable David M.
Connors No. 170700397
Kingston, Attorney for Appellant
D. Reyes, Erin T. Middleton, and Chauntel M. Lopez, Attorneys
David N. Mortensen authored this Opinion, in which Judges
Jill M. Pohlman and Diana Hagen concurred.
"[I]n this world nothing can be said to be certain,
except death and taxes." Nearly as certain is the
procedural bar attendant to court challenges when a party has
failed to exhaust administrative remedies, resulting in an
absence of jurisdiction. A-Fab Engineering (A-Fab) challenges
two property tax assessments levied in 2012 and 2013 by the
Utah State Tax Commission (Commission). The Commission
dismissed A-Fab's administrative appeal as untimely.
A-Fab then petitioned the district court for review of the
Commission's decision. The district court summarily
dismissed the petition because (1) A-Fab did not timely
exhaust its administrative remedies; and therefore, the court
lacked subject matter jurisdiction; and (2) A-Fab was not
entitled to equitable tolling of the deadline to file an
administrative appeal. We affirm.
A-Fab is a Utah corporation that fabricates, refurbishes, and
sells equipment. In or before 2007, A-Fab acquired and
rebuilt a "long-wall mining system" (Property). In
September 2007, A-Fab sold the Property to C.W. Mining (CW).
The sale was financed through a capital lease. In January
2008, however, CW involuntarily entered into bankruptcy, and
the bankruptcy court asserted jurisdiction over the Property.
In December 2008, A-Fab filed a proof of claim in the
bankruptcy proceeding, asserting that it owned the Property,
and sought "substantial amounts for lease rejection
damages." The trustee of the bankruptcy estate responded
by filing a complaint against A-Fab that included, among
eleven claims for relief, a claim of ownership over the
Property. In 2010, while the Property dispute was still
pending, the bankruptcy court ordered that A-Fab could take
possession of the Property, but that the Property would still
be subject to the bankruptcy trustee's authority before
it could be sold or transferred in any way. A-Fab took
possession of the Property shortly thereafter.
A-Fab regained full ownership rights to the Property in 2014
when it entered into a settlement agreement with the
bankruptcy estate. Under the terms of the settlement, the
bankruptcy estate relinquished any and all claims to the
Property in return for a $225, 000 payment from A-Fab. The
bankruptcy court approved the settlement agreement in
November 2014. In the motion to approve the settlement
agreement, the bankruptcy trustee noted that "A-Fab
asserted that it owned the [Property] and was leasing it to
[CW] under a purported September 1, 2007 lease" and
"A-Fab has asserted that it incurred substantial
removal, storage and preservation costs, including the
payment of personal property taxes, in connection with .
. . the [Property]." (Emphasis added.)
Property Tax Assessments
As required by Utah Code sections 59-2-201 and 59-2-202(1),
A-Fab completed and filed its 2012 annual return for
assessment of personal property (Return) with the Commission
on March 1, 2012. A-Fab's 2012 Return listed the Property
as being "subject to assessment by the State Tax
Commission."Based on the 2012 Return, the Commission
prepared a notice of assessment and mailed it-to the address
provided by A-Fab on its 2012 Return-on May 1, 2012.
On February 27, 2013, A-Fab filed its 2013 Return and again
listed the Property as being "subject to Assessment by
the State Tax Commission." A-Fab attached to the 2013
Return a letter requesting that the Commission reconsider the
value of the Property. In this letter, A-Fab included an
independent appraisal of the Property and "urge[d] the
Tax Commission to reconsider its 2013 assessment of the value
of [the Property]." The Commission prepared a notice of
assessment and mailed it on May 1, 2013, to the address
provided by A-Fab on the 2013 Return. A-Fab did not appeal or
pay the 2012 and 2013 assessments (Assessments) within the
prescribed tax years.
A-Fab appealed the Assessments in December 2016. Earlier that
year, A-Fab had "inquired of Carbon County whether there
were any taxes owed [on the Property] before 2014"-when
A-Fab's ownership rights to the Property were
restored-and Carbon County responded that there were not. On
June 15, 2016, however, Carbon County mailed a delinquent tax
notice, based on the Assessments, to the address provided by
A-Fab on its Returns. A-Fab initially raised a challenge to
the delinquent tax ...