Spates v. Montgomery County

WILNER, Chief Judge. “Taxes,” said Justice Holmes in dissent, “are what we pay for civilized society____” Compania General De Tabacos De Filipinas v. Collector, Etc., 275 U.S. 87, 100 , 48 S.Ct. 100, 105 , 72 L.Ed. 177 (1927). The necessity — and certainty — of taxes does nothing to increase their popularity, however. People pay them, but not without grumbling. Alfred Spates has a particular complaint about the State and county property tax, and he has done more than grumble.

In a declaratory judgment action filed in the Circuit Court for Montgomery County, he asked that “the imposition of tax on land owners by the County on behalf of itself and for the State be declared unconstitutional.” His complaint is that, while the State and county impose a tax on real estate, they do not tax mortgages, stocks, or bonds, and that the lack of a tax on such personalty creates an unfair burden on landowners. Presumably in an attempt to show that he is, himself, injured by this system of selective taxation, he alleged that he owns real property in Montgomery County that is subject to State and county property taxes and that he also owns a mortgage on other land in the county and that the mortgage is not subject to such taxes. This scheme of taxing real property but not personal property, he asserts, offends Art. 15 of the Maryland Declaration of Rights and the due process and equal protection clauses of the Fourteenth Amendment to the United States Constitution. The State and the county moved to dismiss Mr. Spates’s second amended complaint on the grounds that it (1) failed to allege any special damage or special interest on Mr. Spates’s part distinct from that of the general public, (2) did ⁵⁹⁴ not present an “actual controversy,” “antagonistic claim,” or “legal relation, status, right or privilege,” and (8) by omitting to specify the particular statutes challenged, failed to present a justiciable controversy.

At a hearing on the motion, the court acknowledged that it understood fully the nature of Spates’s complaint, but, without mentioning any of the grounds raised by the defendants, decided to grant the motion anyway, hoping that Spates would appeal. Addressing counsel for Spates, it announced its decision thusly: “I really do think you maybe are on to something here, but on the other hand, I do think you have to, in my view, sharpen it up a little bit. So I am going to grant their motion to dismiss. But I want to make it a little bit clear on the record.

At least arguably there may be a disparity, and there may be a failure of due process involved in all of this. I am inviting you, if you wish, to get it on to the rocket docket. I will sign whatever order you need and see if the folks in Annapolis will want to take a longer and harder look on it than we can.” In point of fact, it does not appear that any order was ever signed; at least none appears in the record. Aside from the transcript of the court’s remarks, the only record of its decision is a docket entry for that day — July 19, 1990 — reciting that a hearing was held on the motion to dismiss the second amended complaint with prejudice and that the motion was granted.

The notice of appeal, filed August 16,1990, was “from the Order of the Court dismissing Plaintiff’s Amended Complaint without leave to amend on July 19, 1990.” The manner in which the case was disposed of raises a number of procedural questions. The first of these is whether an appealable judgment was entered. In light of the court’s parting remark, the sensible thing would have been for counsel to present an order and see that it was signed and docketed before noting the appeal. Then, at ⁵⁹⁵ least, the jurisdictional lines would have been clear and this discussion would have been unnecessary.

Having said that, we think that, considering the record as a whole, an appeal-able, if not a proper, judgment was entered. Although the court stated its willingness to sign an order, it did not specifically direct that one be prepared or indicate that one was necessary. Compare Rohrbeck v. Rohrbeck, 318 Md. 28 , 566 A.2d 767 (1989). Md.Rule 2-601(a) states that upon a decision by the court denying all relief, which this decision effectively did, the clerk shall forthwith enter the judgment.

The clerk does that, according to Rule 2-601(b), by making a record of it in writing on the docket. As pointed out in Doehring v. Wagner, 311 Md. 272, 274-75 , 533 A.2d 1300 (1987), when the court “makes a ruling which is designed to and which in substance does finally terminate the case in that court, and when that ruling becomes embodied in whatever formal action is necessary to constitute a final judgment, an appeal may be taken.” The decision announced by the court granting the motion to dismiss the complaint, in its entirety and with prejudice, effectively terminated Spates’s ability to proceed further in the Circuit Court, and when the clerk recorded that decision on the docket, an appealable judgment was entered. Having concluded that a judgment was entered, we now look to the propriety of that judgment. Time and time and time again, the Court of Appeals and this Court have made clear that “seldom, if ever, in a declaratory judgment proceeding should a [motion to dismiss] be sustained or the [complaint] dismissed without a declaration one way or the other of the rights of the parties.” Hunt v. Montgomery County, 248 Md. 403, 410 , 237 A.2d 35 (1968); Mauzy v. Hornbeck, 285 Md. 84, 91 , 400 A.2d 1091 (1979); Broadwater v. State, 303 Md. 461 , 494 A.2d 934 (1985).

A motion to dismiss should be used in this kind of proceeding only to challenge the legal availability or appropriateness of the remedy, and it should be granted only upon a finding by the court that the remedy is indeed ⁵⁹⁶ unavailable or inappropriate. Hunt v. Montgomery County, supra. The defendants did allege in their motion that, for various reasons, Spates was not entitled to a declaratory judgment of any kind, but other than to note the need to “sharpen it up a little bit” (which appears to be wholly inconsistent with a dismissal of the complaint with prejudice and thus without leave to amend), the court did not grant the motion for any of those reasons. What it seemingly did was to dismiss the case in order to allow us to decide more quickly the substantive question of whether there is a Constitutional deficiency in the State and county property tax laws.

That is not a proper disposition of a declaratory judgment proceeding. Having failed to find a legitimate reason not to declare the rights of the parties, it was incumbent upon the court to do so. Still, because an appellate court can affirm a trial court’s decision on any ground adequately shown by the record, even if not relied upon by the trial court, Robeson v. State, 285 Md. 498, 502 , 403 A.2d 1221 (1979), cert. denied, 444 U.S. 1021 , 100 S.Ct. 680 , 62 L.Ed.2d 654 (1980), we need to see if any of the grounds alleged in the motion to dismiss would warrant dismissal of the complaint. The three grounds stated in the motion to dismiss have been consolidated into two in appellees’ brief, namely: (1) by failing to identify particular statutes he regards as unconstitutional, Spates has not presented a justiciable issue, and (2) by claiming ownership of currently untaxed personal property — the mortgage — Spates has failed to show that he is being particularly injured by the current law that taxes only real property, which negates his standing to complain about the current law.

Both of these challenges address a more fundamental problem — the fact that the second amended complaint is poorly drawn and seriously lacking in specifics. The precise nature of Spates’s complaint, as explained to us at oral argument, is not entirely clear from the pleading. His basic ⁵⁹⁷ point is that, by failing to tax personal property, the State and county have placed an unfair, disproportionate, and non-uniform tax burden on the owners of land. That much, at least, is clear from the second amended complaint and was apparent to the Circuit Court.

Thus, the failure to identify particular sections of the Tax-Property article of the Code is really not telling in this case. Spates has challenged the system of taxation authorized by law, which includes those sections defining terms, imposing the property tax, determining the kinds of property to be taxed, establishing the method of assessment, and providing for the collection of the tax. Given the nature of his attack, it would, as he contends, be well-nigh impossible, and quite unnecessary in our view, to pick through the entire Tax Code and identify only those specific statutes or parts of statutes that directly support the system he challenges. The second defense asserted by appellees has somewhat more substance, in part because the complaint does not clearly set forth the baleful consequence to Spates from the current system.

At oral argument, he put forth the view that the Federal and State Constitutions require that all property of every kind and description must be taxed. He seemed to waffle on whether any exemptions can be allowed, at one point saying no and at another allowing for exemptions if the appropriate legislative body gives a good reason for the exemption. At least to some extent, the Legislature has done the very thing Spates demands. In Md.Ann.Code, Tax-Property art. § 6-101, it has declared that, except as otherwise provided by statute, “all property located in this State is subject to assessment and property tax.... ” The