On Appeal from the 18th Judicial District Court, Parish of Pointe Coupee, Louisiana. Docket No. 45406, Division " A" . Honorable James J. Best, Judge Presiding.
H. Alston Johnson, III, Jeffrey M. Barbin, Shelton D. Blunt, A. Paul LeBlanc, Jr., Phelps Dunbar LLP, Baton Rouge, LA, for Plaintiff-Appellant City of New Roads.
Dannie P. Garrett, III, Baton Rouge, LA, for Defendant-Appellee, Pointe Coupee Parish Police Jury.
BEFORE: GUIDRY, MCDONALD, THERIOT, DRAKE, AND HOLDRIDGE, JJ.
[2014 0179 La.App. 1 Cir. 2]
The City of New Roads (City) appeals a judgment of the trial court, which denied the City's petition for declaratory judgment and related injunctive relief and dismissed the City's petition, with prejudice. For the reasons that follow, we reverse and render.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Pursuant to LSA-Const. art. VI, § 26(A), the governing authority of a parish may levy annually an ad valorem tax for general purposes not to exceed four mills on the dollar of assessed valuation. The Pointe Coupee Parish Police Jury (Police Jury) has exercised the authority granted to it by this provision to levy an ad valorem tax in Pointe Coupee Parish for general purposes at the rate of 3.42 mills. Article VI, § 26(C) of the Louisiana Constitution of 1974 addresses the amount of the parish tax that a parish may levy on property located wholly within any municipality and provides, as follows:
The amount of the parish tax for general purposes which any parish, except Orleans Parish, may levy, without a vote of the electors, on property located wholly within any municipality which has a population exceeding one thousand inhabitants according to the last federal decennial census, or other census authorized by law, and which provides and maintains a system of street paving, shall not exceed one-half the tax levy for general purposes.
On April 23, 2013, the Police Jury adopted a resolution providing for the levy of 3.42 mills of general ad valorem taxes within the various municipalities in Pointe Coupee Parish, including the municipalities of New Roads and Livonia. Prior to the adoption of this resolution, the millage rate on property in the municipalities of New Roads and Livonia had been 1.71 mills, or one-half the ad valorem tax levy for general purposes on the parish as a whole.
On July 18, 2013, the City filed a petition for declaratory judgment and injunctive relief, including a request for a temporary restraining order and a preliminary injunction, which challenged the tax levy pursuant to this resolution as unconstitutional and further sought injunctive relief, restraining any implementation of the increase in the parish ad [2014 0179 La.App. 1 Cir. 3] valorem general purposes tax rate on property located within the City from 1.71 mills to 3.42 mills. Specifically, the City contended that the increase in the millage was in violation of LSA-Const. art. VI, § 26(C) (Section 26(C)). The Police Jury filed an answer to the petition, as well as a peremptory exception pleading the objection of no right of action. In its exception, the Police Jury argued that the City did not have the right to assert a cause of action reserved to citizens and taxpayers.
The City's request for a preliminary injunction was set for a hearing on July 30, 2013, and by agreement of the parties,
that hearing was converted into a full bench trial on the merits of the petition for declaratory judgment, as well as the City's request for a permanent injunction. Prior to the trial, the trial court denied the Police Jury's exception of no right of action, finding that it was acceptable for the mayor of the City to bring the underlying suit on behalf of the City's citizens.
At the trial on the merits, the parties stipulated that the City had a population of more than 1,000; therefore, the only substantive issue before the trial court, with regard to the applicability of Section 26(C), was whether the City " provides and maintains a system of street paving." After the trial, the trial court took the matter under advisement until the next day, when it issued written reasons for judgment in favor of the Police Jury, dismissing the City's petition with prejudice. The trial court specifically found that the City had failed to demonstrate that it had provided and maintained a system of street paving in accordance with Section 26(C). In addition, the trial court noted that " the governmental guardian of the streets of New Roads, for the purposes of maintaining a system of street paving, is and has been for as far as anyone can remember, the Pointe Coupee Parish Police Jury." On August 23, 2013, the trial court signed a written judgment in accordance with these written reasons. The City has appealed.
[2014 0179 La.App. 1 Cir. 4] NO RIGHT OF ACTION
As a preliminary matter, we note that the Police Jury has purportedly assigned as error the trial court's denial of its peremptory exception of no right of action. Although the Police Jury acknowledges its concurrence with the trial court's judgment on the merits, it asserts that the trial court erred in denying the exception of no right of action, thus finding that the City had standing to bring the underlying action on behalf of the citizens of New Roads. However, our review of the record indicates that the Police Jury failed to file an answer to the City's appeal. See LSA-C.C.P. art. 2133(A). Even so, we discern no error on the part of the trial court in denying the Police Jury's peremptory exception of no right of action. Accordingly, we proceed to address the merits of the City's appeal.
STANDARD OF REVIEW
The parties disagree as to the standard of review to be applied to this matter. The Police Jury contends that the trial court's determination that the City did not provide and maintain a system of street paving within the meaning of Section 26(C) was a finding of fact, which must be reviewed pursuant to the manifest error/clearly wrong standard of review. In applying this standard of review, the issue to be resolved is not whether the trier of fact was right or wrong, but whether the factfinder's conclusion was a reasonable one. Stobart v. State, through Dep't of Transp. and Dev., 617 So.2d 880, 882 (La. 1993). If the trial court's findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse those findings even though convinced that, had it been sitting as the trier of fact, it would have weighed the evidence differently. Hulsey v. Sears, Roebuck & Co., 96-2704 (La.App. 1st Cir. 12/29/97), 705 So.2d 1173, 1176-77.
According to the City, however, the trial court applied the improper legal standard in rendering its decision, which interdicted the fact-finding process. Thus, the City
argues that the trial court committed legal error and that this court should subject the entire record to a de novo review and render a judgment on the merits. See Lam ex rel. Lam v. State Farm Mutual Automobile Insurance Company, 05-1139 (La. [2014 0179 La.App. 1 Cir. 5] 11/29/06), 946 So.2d 133, 135.
In finding that the City had not provided and maintained a system of street paving within the meaning of Section 26(C), the trial court stated that the City's burden of proof had been established in Pearce v. Couvillon, 164 La. 155, 161, 113 So. 801, 803 (1927), which provides:
The object of plaintiffs' suit is to secure an exemption from taxation. Such an exemption is an exceptional privilege, and it must be clearly and unequivocally and affirmatively established, for it is an elementary rule of construction in our jurisprudence that exemptions are strictly construed.
The trial court further stated that the City had fallen short of satisfying the " very narrow and strictly construed test exempting the citizens of New Roads from the Parish's increase in tax ..."
In Pearce, the Louisiana Supreme Court was interpreting Article XIV, § 8 (the predecessor provision) of the Louisiana Constitution of 1921, the predecessor provision to Section 26(C), which provided:
No parish, parish of Orleans excepted, shall levy for parochial purposes, on property located wholly within incorporated cities and towns of the state, having a population in excess of one thousand (1,000) inhabitants, according to the last census, which provide and maintain systems of street paving, any general parochial tax in excess of one-half the levy for general parochial purposes; provided, that this section shall not apply in a parish which had a general unbonded indebtedness on January 1st, 1921, until said debt has been paid or funded into bonds.
In that case, certain resident property owners of Bunkie had filed suit to enjoin the collection of two mills of a four-mill tax levied by the police jury of Avoyelles Parish for general parochial purposes. As in the case before this court, various factual stipulations were made, such that the only issue before the trial court was whether the town of Bunkie provided and maintained a system of street paving within the meaning and intent of the predecessor provision. Pearce, 164 La. at 156-57, 113 So. at 801. In finding that the town did not provide or maintain such a system, the supreme court applied the strict construction standard noted above, which is applicable to exemptions from taxation. Pearce, 164 La. at 161, 113 So. at 803.
The City contends that the application of this strict construction standard by the trial court in the matter before this court was legal error. According to the City, Section [2014 0179 La.App. 1 Cir. 6] 26(C) is a constitutional limitation on the power of the Police Jury to levy an ad valorem tax, rather than an exemption of a class of property from an otherwise permissible tax. As such, the City concludes that the stricter standard should not apply. See Ocean Energy. Inc. v. Plaquemines Parish Government, 04-0066 (La. 7/6/04), 880 So.2d 1, 6 n.2.
The City attempts to distinguish Pearce, which applied the stricter standard to the predecessor provision, by noting that it involved a challenge brought by taxpayers who sought to exempt specific property from taxation, rather than a challenge by the municipality itself to the levy of the tax by the Police Jury. However, we note that, in subsequent cases addressing the predecessor provision where the municipality itself was the plaintiff, the supreme court also referred to the predecessor provision as an exemption. See Town of Winnsboro
165 La. 702, 703, 115 So. 908 (1928); Town of Jonesboro v. Jackson Parish Police Jury,174 La. 1063, 1068, 142 So. 689, 691 (1932); Town of Winnfield v. Police Jury of Winn Parish,179 La. 171, 172-74, 153 So. 681, 682 (1934). However, at no point in these cases did the supreme court address why it considered the predecessor provision to be an exemption, rather than a constitutional limitation on the power of the parish governing authority to levy an ad valorem tax, nor ...