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Tax: Monumental Life Insurance Co. v. Department of Revenue

In Monumental Life Insurance Co. v. Department of Revenue, 201 S.W.3d 500 (Ky. App. 2006), the Kentucky Court of Appeals granted Monumental Life Insurance Company’s (Monumental) Motion to remand the administrative (appellate) record to the Kentucky Board of Tax Appeals (KBTA) for proper organization and indexing. 

The Court noted that “[t]he KBTA is an ‘administrative review agency’ endowed with exclusive jurisdiction over certain appeals from rulings and orders affecting revenue and taxation.” The Court further noted that as an administrative agency, the KBTA is required to maintain an “official record” of the proceedings pursuant to KRS 13B.130, and as to what this means, held: “KRS 13B.130 explicitly requires an administrative agency to keep an ‘official record’ comprised of specific documents and materials. By expressly mandating such an official record, the General Assembly clearly intended that the record be organized in a manner readily capable of review.” 

The taxpayer had moved for remand due to an inability to clearly and accurately cite to the record on appeal, as required under the Ky. Rules of Civil Procedure. The Court held that “In this appeal, the administrative record is comprised of six boxes of various documents and materials and include[s] both copies and originals without differentiation…[t]hese documents are arranged in no particular order and there is no index or listing of same. Without a content index, it is impossible to discern whether the administrative record is even complete.” The Court went on to state: “[w]hile it is generally appellant’s responsibility to ensure an adequate record for judicial review, the statutory duty of an administrative agency to provide a complete and orderly official record is manifestly paramount. Here, the KBTA failed to create and maintain an official record as mandated by KRS 13B.130.” 

The Court therefore remanded the case to the Franklin Circuit Court to order the following: (1) “the Clerk of the Franklin Circuit Court to return the administrative record to the KBTA; (2) the KBTA to properly compile the administrative record in an organized manner that renders it readily capable of review; and (3) “the KBTA to transmit a properly organized administrative record to the Franklin Circuit Court within ninety (90) days of entry of the circuit court’s order.” The Court further ordered that the appeal be held in abeyance pending proper organization and indexing of the record. 

The Court’s opinion and order is significant because it recognizes an administrative agency’s (of which there are dozens in Kentucky) statutory duty to create and maintain a complete and orderly administrative record in the event of subsequent review and/or appeal.

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