CHARLIE COLEMAN, JOHN P. ROTH JR. AND ERIK HERMES APPELLANTS
CAMPBELL COUNTY LIBRARY BOARD OF TRUSTEES APPELLEE
FROM CAMPBELL CIRCUIT COURT HONORABLE JULIE REINHARDT WARD,
JUDGE ACTION NO. 12-CI-00089
FOR APPELLANT: Timothy J. Eifler Stephen A. Sherman
Louisville, Kentucky Erica L. Horn Madonna E. Schueler
Lexington, Kentucky Brandon N. Voelker Fort Mitchell,
FOR APPELLEE: Jeffrey C. Mando Louis D. Kelly Covington,
BEFORE: COMBS, CLAYTON, AND D. LAMBERT, JUDGES.
Coleman, John P. Roth Jr. and Erik Hermes (hereinafter
"the taxpayers") bring this appeal from the
Campbell Circuit Court's grant of summary judgment to the
Campbell County Library Board of Trustees (hereinafter
"the Board"). The primary issue is whether the
holding of an opinion (hereinafter "the Opinion")
of the Court of Appeals, which harmonized statutes relating
to public library ad valorem tax rates, is to be applied
retroactively or prospectively only.
Campbell Cty. Library Bd. of Trustees v. Coleman,
475 S.W.3d 40, 41 (Ky. App. 2015), disc. review
denied (Dec. 10, 2015), a panel of this Court addressed
whether public libraries in Kentucky, created by petition
pursuant to Kentucky Revised Statutes (KRS) 173.710 et
seq., should assess the library's ad valorem tax
rate in accordance with KRS 132.023 or KRS 173.790. The
underlying class action, brought by a group of taxpayers in
the Campbell Circuit Court,  sought recovery of what they
maintained were unlawfully excessive ad valorem taxes levied
by the Campbell County Library Board. According to the
taxpayers, the Board had erroneously calculated its ad
valorem rate each year according to the provisions of KRS
132.023, which allows a taxing district to increase revenue
from ad valorem taxes up to four percent without triggering a
reconsideration by the district or voter recall referendum,
when in fact it should have applied KRS 173.790, which only
allows an increase in the tax rate via a petition signed by
fifty- one percent of duly qualified voters in the district.
The circuit court entered summary judgment for the taxpayers,
ruling that the Board is required to comply with KRS 173.790,
as the more specific statute, in setting its annual tax rate.
The Board appealed. The Court of Appeals panel reversed the
circuit court, concluding that
KRS 132.023 and KRS 173.790 are both applicable to ad valorem
taxing rates of a library taxing district formed by petition
under KRS 173.720 and can be harmoniously interpreted to
complement each other. KRS 132.023 generally controls the ad
valorem tax rate assessed by a library taxing district formed
by petition; however, KRS 173.790 is triggered if the library
seeks to increase revenue from ad valorem taxes above 4
percent of the revenue generated from the compensating tax
rate as set forth in KRS 132.023(1) and (3). Our construction
of KRS 132.023 and KRS 173.790 gives effect to both statutes
and honors what we believe the General Assembly intended.
Campbell Cty. Library Bd., 475 S.W.3d at 47-48.
case was remanded for proceedings consistent with the
Opinion. The Kentucky Supreme Court denied the taxpayer's
motion for discretionary review.
Board moved for summary judgment on the remaining counts of
the taxpayers' complaint. The taxpayers filed a
cross-motion for summary judgment. The circuit court entered
an agreed order limiting briefing solely to the issue of
whether the Opinion should be applied retroactively or
prospectively only. Following a hearing, the circuit court
entered an order in which it applied the three-factor test
for retroactivity set forth in Chevron Oil Co. v.
Huson, 404 U.S. 97, 106, 92 S.Ct. 349, 355, 30 L.Ed.2d
296 (1971) disapproved of by Harper v. Virginia Dep't
of Taxation, 509 U.S. 86, 113 S.Ct. 2510, 125 L.Ed.2d 74
(1993), to hold that the Opinion harmonizing KRS 173.790 and
KRS 132.023 was intended to be applied prospectively only.
The taxpayers filed a motion to amend, alter or vacate the
order. The motion was denied and this appeal by the taxpayers
taxpayers raise four arguments: (1) that the circuit court
order is contrary to the Opinion and violates the
law-of-the-case doctrine; (2) federal due process and
Kentucky law require the taxpayers to be provided with
meaningful retroactive relief; (3) the order renders KRS
173.790 ineffective for periods prior to the Opinion, thereby
violating Kentucky's separation of powers doctrine and;
(4) even if prospective-only application was possible in this
case, the circuit court erred in finding it justified here.
Whether the circuit court's order is contrary to the
Opinion and violates the law-of-the-case doctrine; and
whether the Board waived the issue of
taxpayers' first argument questions the trial court's
authority to determine that the Opinion is to be applied
prospectively only. Because the Opinion does not expressly
state that its holding is to be given prospective-only
application, they contend the holding must apply both
retroactively and prospectively, and, in the absence of any
petition for rehearing or modification by the Board, this
retroactive application has become the law of the case.
"The law-of-the-case doctrine describes a principle
which requires obedience to appellate court decisions in all
subsequent stages of litigation. Thus, on remand, a trial
court must strictly follow the mandate given by an appellate
court in that case." Buckley v. Wilson, 177
S.W.3d 778, 781 (Ky. 2005) (footnotes omitted). "Upon
receipt of an appellate court opinion, a party must determine
whether he objects to any part of it and if he does, petition
for rehearing or modification or move for discretionary
review. Upon failure to take such procedural steps, a party
will thereafter be bound by the entire opinion."
Williamson v. Commonwealth, 767 S.W.2d 323, 326 (Ky.
pertinent portion of the Opinion states that "the
Campbell and Kenton Circuit Courts erred as a matter of law
by concluding that KRS 132.023 was inapplicable to library
districts formed by petition and erred by rendering the
respective summary judgments so concluding. We hold that KRS
132.023 and KRS 173.790 are both applicable to library
districts formed by petition and can be harmonized in their
application as set out in this Opinion." Campbell
Cty. Library Bd., 475 S.W.3d ...