Ann Sacks Tile & Stone, Inc. v. Department of Revenue

Citations: 352 Or. 380; 287 P.3d 1062; 2012 WL 4129785; 2012 Ore. LEXIS 671Docket: TC 4879; SC S060039

Court: Oregon Supreme Court; September 20, 2012; Oregon; State Supreme Court

Original Court Document: View Document

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The Supreme Court of Oregon dismissed the appeal filed by Ann Sacks Tile and Stone, Inc., Canac Kitchens US Limited, and Kohler Rental Power, Inc. against the Department of Revenue. The appeal originated from a general judgment entered by the Oregon Tax Court on December 19, 2011. The core issue was the jurisdictional validity of the taxpayers' notice of appeal, which they served using the Oregon appellate court electronic filing system (eFiling system). However, as per the Oregon Rules of Appellate Procedure (ORAP), initiating documents, including notices of appeal, must be served through conventional means, not eService. While the Department of Revenue received actual notice of the appeal via a courtesy email, the court concluded that the manner of service was ineffective and jurisdictional requirements were not met. Consequently, the court found it lacked jurisdiction to hear the appeal and dismissed it.

Jurisdiction for the appeal from the Oregon Tax Court is contingent upon compliance with statutory requirements for serving a notice of appeal. Under ORS 305.445, appeals from the Tax Court are treated similarly to those from circuit courts, following the general appellate provisions of ORS chapter 19. Specifically, ORS 19.240(2)(a) mandates that a notice of appeal be served on all parties within 30 days of the judgment entry, while ORS 19.255(1) establishes this deadline as jurisdictional, meaning it cannot be waived or extended (ORS 19.270(2)(a)). The essence of the dispute in this case pertains to the method of service.

ORS 19.260(2) allows service of the notice of appeal by mail (first class, registered, or certified), with effectiveness upon mailing. Alternatively, service can be conducted according to ORCP 9 B, which prescribes various methods including delivery to the party or attorney’s office, mailing to their last known address, or electronic means (e-mail or fax) if agreed upon. The definition of "delivery of a copy" encompasses several methods, such as handing it directly to the person, leaving it with someone in charge at their office, or leaving it at their residence with someone over 14 years old.

For e-mail service, ORCP 9 G mandates a written agreement between the parties’ attorneys, outlining the names and e-mail addresses for service. Confirmation of receipt is required, excluding automatic out-of-office replies. Thus, the appeal’s jurisdiction hinges on ensuring proper service of notice in accordance with these statutory and procedural requirements.

The department argues, unchallenged by taxpayers, that the requirements for service by e-mail under ORCP 9 G were not met due to the absence of a written agreement permitting such service between attorneys. Additionally, the appellate court's eFiling system could not be used for the electronic service of the notice of appeal. Taxpayers propose two defenses for why their e-mailed courtesy copy of the notice of appeal should suffice to establish jurisdiction. First, they claim it qualifies as 'service' under ORCP 9 B's general delivery provisions. Second, they argue that their timely e-mail constituted substantial compliance with jurisdictional service requirements.

Before addressing these arguments, the court notes a preliminary issue: while ORS 19.270(2)(a) mandates timely service as jurisdictional, it does not reference the statutes governing the method of service (ORS 19.260 or ORS 19.500). This raises the question of whether the manner of service is also jurisdictional. However, established case law confirms that appellate jurisdiction necessitates service of the notice of appeal in a specific manner. The court refers to the well-defined legal meaning of 'service' as the formal delivery of legal documents, which inherently includes formal procedural requirements. Past cases, including Wal-Mart Stores, Inc. v. City of Central Point, confirm that failing to adhere to these requirements can result in a lack of jurisdiction.

The statutes collectively suggest that proper service of the notice of appeal is a prerequisite for appellate jurisdiction, and the legislature has established mandatory procedures for such service. Previous rulings indicate that the timing and manner of service are interconnected, implying that the legislature would need to clearly specify if it intended to separate these elements, which it has not done.

Taxpayers argue that emailing a courtesy copy of the notice of appeal to the department's attorneys constitutes valid service under ORCP 9 B, claiming it qualifies as 'delivering a copy' by leaving it in a conspicuous place at the office. They rely on the precedent set in Gadda v. Gadda, where a husband’s service attempt was deemed complete even though he mailed the notice to the wrong attorney, as the notice was ultimately received by the correct attorney before the deadline. The court found that the husband had 'caused' the notice to be delivered, despite the involvement of third parties. The ruling in Gadda and similar cases like Stroh v. SAIF underscores that failure to comply with mailing rules does not negate other valid service methods.

However, this case differs because ORCP 9 B specifically refers to ORCP 9 G for e-mail service, distinguishing it from traditional 'delivery of a copy'. Under ORCP 9 B, service can be made by several means, including e-mail, but it is not interchangeable with delivery methods. Therefore, the logic applied in Gadda and Stroh does not apply here, as the rules for e-mail service are explicitly defined and separate from those for delivery.

The notice of appeal in this case was served by e-mail, which is governed by ORCP 9 B and specifically evaluated under ORCP 9 G. ORCP 9 G prohibits e-mail service unless certain conditions are met: there must be confirmation of actual receipt and a preexisting written agreement between the attorneys. Despite the taxpayers arguing that sending the e-mail constituted delivery under ORCP 9 B, this interpretation would nullify ORCP 9 G and render it superfluous. The court found that while taxpayers received confirmation of the e-mail's receipt, they lacked the necessary written agreement, thus making e-mail service prohibited under ORCP 9 G. Consequently, the service attempt was deemed ineffective.

Taxpayers further argued that they substantially complied with the service requirements by providing timely actual notice to the department, citing the plurality opinion in Brown v. Portland School Dist. 1. However, the court was not convinced that the substantial compliance doctrine from Brown applied here, emphasizing that service must adhere to the prescribed manner, which is jurisdictional. The court concluded that ORCP 9 G clearly intends to prohibit e-mail service without a written agreement, reaffirming that taxpayers' attempt to serve the notice of appeal by e-mail was ineffective.

Taxpayers failed to timely serve their notice of appeal, resulting in the court lacking jurisdiction and necessitating the dismissal of the appeal. The court noted the widespread use of e-mail for transmitting court documents and questioned whether the 2008 restrictions imposed by the Council on Court Procedures under ORCP 9 G align with current legal practices. The court expressed that the strict adherence to the rule seems unnecessarily harsh and suggested that the Council should reconsider the limitations on e-mail service due to evolving practices. Additionally, the court critiqued the dual requirements of a preexisting written agreement and confirmation of receipt for e-mail service, arguing that they do not add value when one condition fulfills the requirements of the other, and suggested that if an attorney agrees to e-mail service, they should accept the responsibility of monitoring their e-mail without needing confirmation of receipt for each document. The appeal is dismissed.