IN THE COURT OF APPEALS
STATE OF ARIZONA
STATE OF ARIZONA, ex rel., ARIZONA ) 1 CA-TX 94-0014
DEPARTMENT OF REVENUE, )
Petitioner-Appellee, ) DEPARTMENT T
Cross Appellant, )
v. ) MEMORANDUM DECISION
) (Not for Publication -
THE ORIGINAL APARTMENT MOVERS, INC., ) Rule 28, Arizona Rules
) of Civil Appellate
Respondent-Appellant, ) Procedure)
Cross Appellee. )
Appeal from the Arizona Tax Court
Grant Woods, The Attorney General
Shimmel, Hill, Bishop & Gruender, P.C.
Judges Jon W. Thompson, Thomas C. Kleinschinidt and William F. Garbarino have considered this appeal from an order of the tax court directing appellant Original Apartment Movers, Inc. ("Movers") to produce books and records pursuant to an administrative subpoena issued by appellee Arizona Department of Revenue ("ADOR"). For the following reasons, we conclude that ADOR may enforce its subpoena during the pendency of Movers*s appeal in a related action. We accordingly affirm the tax court’s decision.
A. Subpoena enforcement
On March 18, 1993, the tax court found that Movers had shown reasonable cause not to comply with ADOR*s subpoena during the pendency of its previous appeal to this court. In its order, the court stayed "any further orders in connection with this case until such time as the Court of Appeals has ruled upon the Declaratory Judgment [sic] action or any subsequent action the Court of Appeals may order, such as a remand to Judge Schafer’s court." Movers argues that this order is the "law of the case," and that it should apply in the present appeal to quash ADOR*s subpoena.
The "law of the case" doctrine provides that the decision of a court in a case is the law of that case on the issues decided throughout all subsequent proceedings in both the trial and appellate courts, provided the facts, issues and evidence are substantially the same as those on which the first decision rested. Dancing Sunshines Lounae v. Industrial Comm*n, 149 Ariz. 480, 482, 720 P.2d 81, 83 (1986); Ziegler v. Superior Court In and For Pima County, 134 Ariz. 390, 393, 656 P.2d 1251, 1254 (App. 1982). The "law of the case" doctrine is inapplicable here. The March 18 order only stayed enforcement of ADOR*s subpoena until the court of appeals reached a decision regarding Movers*s previous appeal. On December 7, 1993, this court issued an opinion affirming the tax court*s granting of ADOR*s motion to dismiss Movers*s declaratory judgment action. Original Apartment Movers, 179 Ariz. 419, 880 P.2d 639 (App. 1993). Following this opinion, the March tax court order no longer effectively stayed enforcement of ADOR*s subpoena, and ADOR was free to reinstitute subpoena enforcement proceedings. Thus, ADOR* s subsequent attempt to enforce its subpoena does not constitute re-litigation of the same issues, as Movers contends, because the March tax court order is no longer the final and binding "law of the case," and, even if it were, the order did not preclude enforcement of the subpoena once this court had decided the appeal. Movers therefore cannot rely on the "law of the case" doctrine to quash the present ADOR administrative subpoena.
Although the March tax order is no longer binding in this case, the subsequent court of appeals opinion is of precedential value. In Original Apartment Movers, this court held that Movers could not "preempt the administrative investigation by rushing to the tax court before all factual questions have been subjected to [ADOR*s] audit." Id. at 421, 880 P.2d at 641. The disputed tax liability issues in this case must be subjected first to administrative review, even if the result is that no taxes are owed. Id. at 422, 880 P.2d at 642. By this appeal, Movers is once again attempting to circumvent well-established administrative procedures for determining an entity*s tax liability. As this court has already held, Movers must first submit to an ADOR audit before challenging its potential tax liability in court. Otherwise, the tax court would wrongly become the primary fact-finder in matters of tax liability. Id.
Movers further claims that ADOR*s subpoena should be stayed pending the supreme court*s decision regarding Movers*s petition for review, because otherwise Movers*s right to appeal would be eviscerated. We disagree. Movers exercised its right to appeal when it sought and received review by the court of appeals. Any future stay of ADOR*s subpoena pending further appellate proceedings is a matter within the tax court*s discretion, and that court has refused to grant another stay. Moreover, while Movers awaits the supreme court*s decision whether to grant review, it is not overly burdensome to require that Movers comply with ADOR*s audit procedures. Id. To hold otherwise would lead to interminable delays in determining Movers*s potential tax liability. Indeed, under Movers*s reasoning, ADOR*s subpoena would be unenforceable until at least a petition for certiorari to the United States Supreme Court had been decided. Such a result would clearly not be what the legislature intended in enacting Arizona*s present tax procedures.
There is nothing new contained in the record to compel divergence from this court*s prior opinion in Original Apartment Movers, Inc. v. Waddell. We find therefore that ADOR*s present subpoena for Movers*s books and records is enforceable, and affirm the tax court*s decision denying Movers*s motion to quash ADOR*s subpoena.
B. Attorneys* fees
ADOR filed a cross-appeal from the order of the tax court denying their request for attorneys* fees. We have previously entered an order that their cross-appeal was timely filed. ADOR contends that they are entitled to attorneys* fees under Arizona Revised Statutes Annotated ("A.R.S.") §§ 12-341.01(C) and 12-349(A).
A.R.S. § 341.01(C) provides for award-of attorneys* fees where "the claim or defense constitutes harassment, is groundless and not made in good faith." After reviewing the record, we do not find that the declaratory judgment action by Movers is in this category. Similarly, we find that Movers*s suit was not abusive or unjustified so as to warrant an award of attorneys* fees pursuant to A.R.S. § 12-349(A).
For the reasons stated, the judgment of the tax court is affirmed.