COA rules for Lake County in tax deduction dispute

The Indiana Court of Appeals has ruled in favor of Lake County’s auditor in a tax deduction dispute after finding that the trial court that granted the county summary judgment lacked subject matter jurisdiction.

In 2010, the Lake County Board of Commissioners executed a contract renewed annually through 2016 with DSG Lake, LLC. Through the contract, DSG reviewed all property tax deductions claimed during the past 10 years, collected any improper deductions and retained a percentage as compensation.

Meanwhile, a dispute arose between DSG and various state and local officials regarding the appropriate look-back period. By 2017, however, a draft contract renewal was not approved by the commissioners.

In response, DSG filed a complaint against Lake County and Lake County Auditor John Petalas, alleging breach of contract and intentional interference with DSG’s business and contractual relationships.

The Porter Superior Court entered summary judgment for Petalas on all of DSG’s claims, prompting DSG to file a motion for partial summary judgment as to the lookback period, which the trial court denied. Lake County then filed a motion for summary judgment, which the trial court granted on the basis that it lacked subject matter jurisdiction to decide DSG’s claims.

DSG appealed the rulings in DSG Lake, LLC v. John Petalas, Individually and as the Lake County Auditor, and Lake County, Indiana, 20A-PL-370, but the Indiana Court of Appeals affirmed in part and reversed in part.

First, the appellate court concluded that DSG failed to establish that the trial court erred in granting summary judgment for Petalas. It agreed with Petalas that summary judgment was proper because he was not a party, in any capacity, to any contract with DSG. It further found that DSG failed to make a cogent argument that the trial court erred in granting summary judgment for Petalas on its intentional interference claims.

Additionally, the appellate court concluded that DSG’s claims against Lake County should be dismissed for lack of subject matter jurisdiction.

“Here, DSG’s breach of-contract case rests on its theory that the County wrongly limited DSG’s collection of improper property tax deductions to three years (per Indiana Code Section 6-1.1-9-4) instead of ten years (per Indiana Code Section 6-1.1-22-10 and the parties’ contract). Thus, we readily conclude that this case arises under Indiana’s tax laws,” Judge Terry Crone wrote for the appellate court.

“… Because the trial court here lacked subject matter jurisdiction, it could not render summary judgment for the County; accordingly, we reverse and remand with instructions to dismiss DSG’s claims against the County for lack of subject matter jurisdiction,” it wrote.

On a final note, the appellate court concluded that the trial court did not err in denying DSG’s motion for partial summary judgment.