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Baker v. Tennessee Gas Pipeline Co.

Court of Appeals of Louisiana, Second Circuit

November 15, 2017

MARY T. "TERRY" BAKER, IN HER OFFICIAL CAPACITY AS ASSESSOR FOR UNION PARISH Plaintiff-Appellee
v.
TENNESSEE GAS PIPELINE COMPANY Defendant-Appellant

         Appealed from the Third Judicial District Court for the Parish of Union, Louisiana Trial Court No. 43, 464 Honorable Cynthia Tregle Woodard, Judge

          MILLING BENSON WOODARD L.L.P. Hilton Sutton Bell for Appellant, Southern Natural Gas Company

          BRIAN ANDREW EDDINGTON for Appellee, Mary T. "Terry" Baker, in her official capacity as Assessor for Union Parish

          ROBERT W. HALLACK for Appellee Dodie Eubanks, Clerk of Court

          ROBERT D. HOFFMAN, JR. Counsel for Amicus Curiae Louisiana Tax Commission

          Before WILLIAMS, STONE, and COX, JJ.

          COX, J.

         Appellant, Southern Natural Gas Company ("Southern"), appeals a judgment from the Third Judicial District Court, Parish of Union, State of Louisiana, wherein the trial court rendered a judgment in favor of Appellee, Mary T. Baker ("Baker"), granting the Clerk of Court's motion to impose court costs in the amount of $49, 516.28, and an additional $6, 000 in attorney fees. Southern prays that the district court's ruling be reversed and vacated, as it argues that the assessment of costs and attorney fees was an abuse of discretion. Southern contends that the costs of this appeal should be assessed against the Union Parish Tax Assessor. For the following reasons, we affirm the rulings of the district court.

         FACTS

         Southern is a corporate affiliate that provides natural gas storage, transportation, and balancing services in Louisiana and in interstate commerce. Its property is classified as "public service property" under La. R.S. 47:1851 and is thus subject to assessment at 25% of fair market value.

         In the 1990s, ANR (Administration of Natural Resources) filed suits alleging that the Louisiana Tax Commission ("LTC") was treating other competing pipelines as though they were not public service property, i.e., assessing their property at only 15% and applying depreciation. Tennessee Gas Pipeline and Southern joined the suits in 2000 through 2003. The cases were later consolidated.

         After a trial on the merits in 2005, the 19th Judicial District Court found that the LTC violated the taxpayers' rights to uniform taxation; however, the court rejected the taxpayers' claims for refunds. Instead, it ordered that the taxpayers' property be reassessed by parish assessors at 15% of fair market value, employing the same method used for the preferred companies.

         Southern appealed, claiming it was entitled to a refund, not an assessment. The First Circuit Court of Appeal affirmed the district court's ruling, and both the Louisiana and United States Supreme Courts denied writs. When this judgment became final, the LTC formally ordered assessors to reassess the taxpayers' property.

         On May 17, 2006, Southern filed its reassessment returns with the assessors of Ouachita, Union, and Lincoln Parishes. Southern reported the depreciated replacement cost of its property and requested a reduction in value for obsolescence. After a hearing in October 2009, the LTC ruled that the assessors had failed to adjust the fair market value for obsolescence, resulting in incorrect valuation and an abuse of discretion. The LTC ordered the assessors to reduce the valuations. Southern lodged an appeal in the 19th Judicial District Court.

         On November 23, 2009, the assessors of Ouachita, Union, and Lincoln Parishes filed petitions for judicial review pursuant to La. R.S. 47:1998(A) and (D). Southern then filed the following exceptions: lis pendens, improper venue, lack of subject matter jurisdiction, no right of action, no cause of action, and prematurity. The district courts denied all exceptions. Southern applied for writs and a stay order, which this Court consolidated and denied on June 17, 2010. The Louisiana Supreme Court also denied writs and the stay.

         A hearing was held on August 5, 2010, and the Third Judicial District Court found that there was no basis for the LTC to conclude that Baker, the Assessor for Union Parish, abused her discretion in denying Southern's request for reduction in value for obsolescence. The district court stated that the LTC exceeded its authority and reversed the previous rulings.

         Southern appealed, challenging the ruling on the merits and re-urging its earlier exceptions. On April 13, 2011, this Court affirmed the decision on both the merits and exceptions in Jones v. Southern Natural Gas Co., 46, 347 (La.App. 2 Cir. 4/13/11), 63 So.3d 1080, and the Louisiana Supreme Court denied writs on September 23, 2011, and reconsideration on November 4, 2011.

         On August 18, 2011, the Union Parish Clerk of Court filed a motion to impose court costs, including attorney fees. On November 17, 2011, the Third Judicial District Court orally assessed costs against Southern. It did not hear the issue of attorney fees, as one party was not prepared to proceed on the issue at that time. The parties agreed that the issue would be submitted through filings without the necessity of a court hearing.

         The parties submitted the judgment assessing courts costs, but, before the district court could sign the judgment, the Louisiana Supreme Court issued a stay across the State in all of these types of tax proceedings. At a conference call thereafter, all parties agreed that the judgment as to costs would not be signed nor any action taken with respect to the issue of attorney fees until the stay was lifted.

         The district court was not notified that the stay was lifted and was unable to locate anything filed in the record indicating that the stay was lifted; however, all parties to the action agreed that the stay had been lifted. On June 27, 2016, the district court entered its order and written reasons assessing costs against Southern, but ordered additional briefs on the issue of attorney fees.

         On October 27, 2016, the district court entered a final judgment ordering Southern to pay the Clerk of Court $49, 516.28 in costs, and an additional $6, 000 in attorney fees. In its reasons for judgment, the district court stated that it found Southern's arguments to be without merit. It noted that the prior rulings and judgments in favor of the Assessor were final judgments.

         Southern now appeals, setting forth seven assignments of error: (1) the district court failed to recognize it lacked subject matter jurisdiction to adjudicate the Assessor's action for judicial review and later failing to hold that its judgment in favor of the Assessor was an absolute nullity; (2) the district court failed to recognize that Southern did not incur the costs it was ordered to pay; (3) the district court failed to find that Southern was, in the end, the prevailing party; (4) the district court failed to recognize that the Clerk's claim for costs had been abandoned and was prescribed; (5) the district court failed to find that the imposition of costs upon Southern was inequitable and unjust; (6) the district court failed to find that the Clerk's claim for costs was grossly excessive; and, (7) the district court erred in finding that the Clerk was entitled to an award of attorney fees.

         DISCUSSION

         Subject Matter Jurisdiction

         Southern alleges that the Third Judicial District Court lacked subject matter jurisdiction to adjudicate the Assessor's action for judicial review. Southern's exception of subject matter jurisdiction has been repeatedly denied by the district court, as well as this Court. Southern has challenged these rulings by writ application, which were denied by this Court and the Louisiana Supreme Court. Although this Court does not ...


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