High court rules with Dodgeville on interest rate issue in Lands End tax dispute
The state Supreme Court on Tuesday ended a protracted legal dispute between clothing maker Lands’ End and the city of Dodgeville, ruling that a lower rate of interest applies on the amount that the city must pay the clothier to partially refund its 2008 property tax bill.
The court had to decide which version of a state law governing the issue would be applied to the judgment that Lands’ End would collect. Because of a 2011 change to the law, the difference was substantial -- a 12 percent rate in effect in 2009, when Lands’ End offered to settle the case, or 1 percent plus prime, in effect when Lands’ End was granted its judgment. Prime rate at the time was 4.25 percent.
Grant County Circuit Judge Craig Day, hearing the Iowa County case, ruled that the latter applied. The state 4th District Court of Appeals passed the matter directly to the Supreme Court, which on Tuesday agreed 4-2 with Day’s ruling. Justice David Prosser and Chief Justice Patricia Roggensack dissented. Justice Rebecca Bradley did not take part in the case.
This dispute between Dodgeville and Lands’ End dates from 2008, when Lands’ End challenged Dodgeville’s property tax assessment for its headquarters and sought a refund of the overage. In 2009, Lands’ End offered to settle the case for $724,000, but the city rejected the offer.
Lands’ End then asked a judge to rule in its favor, but the judge denied the motion and affirmed the city’s valuation of Lands’ End’s headquarters. Lands’ End appealed, and the appeals court reversed, ordering judgment in Lands’ End’s favor for $724,292, plus “statutory interest and other interest or costs to which Lands’ End may be entitled.”
The two sides disagreed on which version of a state law governing the interest rate applied. Ultimately, Day agreed with the city, and the Supreme Court upheld that decision.
Among other arguments, Lands’ End contended that it had a vested interest in a 12 percent rate when it made its settlement offer and that its due process rights were violated by applying the lower rate.
Justice Shirley Abrahamson, writing for the majority, ruled that when the Legislature changed the law, it did not intend for the law to be applied retroactively, and said that Lands’ End did not have a vested right to 12 percent interest. She added that Lands’ End’s equal protection rights were not violated because the Legislature “did not create an irrational or arbitrary classification” in changing the applicable interest rate.