Annapolis suit on tax dismissed

April 12, 1995|By John Rivera | John Rivera,Sun Staff Writer

A Circuit Court judge yesterday dismissed Annapolis' lawsuit seeking $9.2 million in back tobacco tax revenue from Anne Arundel County, ruling the city waited too long to make its claim.

Annapolis filed the suit in December, after receiving an attorney general's opinion that the county overstepped its authority in 1965 when it repealed a state law requiring Anne Arundel to give the city one-seventh of tobacco tax revenues it received from Maryland. The money Annapolis sought represents the principal and interest from 1970 until 1992, when Anne Arundel stopped receiving tobacco tax money from the state.

Anne Arundel Circuit Court Judge Bruce C. Williams wrote in a nine-page opinion that the 25 years that had passed since the county stopped sharing the tax with Annapolis was too long a delay in taking action. He also ruled that granting the city's request would cause "grave economic hardship to the county."

"Finally, a judge in Maryland who has the guts to throw out out frivolous lawsuits," said Larry R. Telford, a spokesman for County Executive John G. Gary. "It was a big win for school kids and police, a big loss for lawyers and politicians."

Last week, after the General Assembly killed a bill that would have absolved the county of any responsibility for the back tax revenue, Anne Arundel officials said they might have to freeze $8 million in building projects to pay the possible liability. Mr. Telford said that decision was under review.

Annapolis City Attorney Paul G. Goetzke said he would appeal the decision, although he needs city council approval to proceed. Annapolis Mayor Alfred A. Hopkins agreed on appealing the ruling.

"I think we're right and I think we should go the limit in the court system and appeal," Mr. Hopkins said. He added that even if the county wins on appeal, he hoped Anne Arundel still would hand over the money.

"It seems to me that the ethical way to respond is, 'Although we won in court you really are entitled [to the money],' " he said. "It's ours."

Mr. Goetzke pointed out that the county based its motion for dismissal on arguments that the city did not specify the correct defendant in its lawsuit. The issue of delay in filing the claim never was raised, he said.

"The city is disappointed in the result, especially because the court dismissed the case on a point not raised by the county or covered by the parties in their written arguments," Mr. Goetzke said. "However, we realized from the start that we would have difficulty in Circuit Court and that the case might have to be decided ultimately on appeal."

The judge can raise any issue in ruling on the motion, said Deputy County Attorney David Plymyer said

"For [the city] to suggest that the court is outside its bounds to raise the principal of limitations . . . when the matter is over 25 years old, takes a lot of nerve," Mr. Plymyer said.

"I think counsel for the city is not looking at this in a sense that most people look at it and that is with the following question in mind: If this law is so crystal clear and if the injury to the city is so palpable and convincing, why did it take the city, or anyone else, 25 years to raise the issue?" he said. "And for the city to suggest that the issue is improvidently raised by the court is, in a word, outrageous."

Mr. Goetzke said city officials had no reason to think Annapolis had a claim against the county until they received the attorney general's opinion in July.

"The city assumed the county acted legally in 1965," Mr. Goetzke said.

On a cursory reading of the opinion, Mr. Goetzke said he saw several areas upon which he might base his appeal.

"For instance, Judge Williams concludes that the county was obligated to pay the money but that the city waited too long to collect it," Mr. Goetzke said. "Judge Williams' conclusion was based on his view that this was a 20-year-old debt. In fact, it was a new and different debt each year for the last [22] years."

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