A tardy process server has led a state tax judge to throw out petitions from two companies asking the court to lower the value of their Clay County properties for 2002.

Minnesota Tax Court Chief Judge George W. Perez sided in a ruling with Clay County's Oct. 27 motion to dismiss the challenges by American Crystal Sugar Co. and Kmart.

The rulings, if not overturned on appeal, ensure city, county and school coffers will keep about $600,000 the companies paid in 2003 taxes, which are paid based on 2002 values.

American Crystal's Clay County properties were valued at about $12.4 million in 2002. It was seeking a two-thirds reduction, claiming the value of its facilities has dropped because of a sagging sugar industry.

Kmart's Moorhead store was valued at about $2 million in 2002. Steven Quam, a Minneapolis attorney representing Kmart, would not say the size of the reduction it was seeking.

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Assistant Clay County Attorney Michelle Winkis, who received word of the ruling Monday, said she was pleased but not surprised.

"It is what I expected. I think it's a good insightful ruling," she said.

American Crystal spokesman Jeff Schweitzer admitted the company made a procedural error. He said he is not sure whether the Moorhead-based sugar beet cooperative will appeal to the Minnesota Supreme Court.

The Minneapolis lawyer representing American Crystal, Myron Frans, was not available for comment Monday.

Quam said Kmart is reviewing its options. He did not say whether it would appeal.

According to court records:

A process server from Metro Legal Services, a Twin Cities business hired by both companies to deliver to county officials documents asking for a court review of the property values, missed the deadline for doing so by minutes.

State law requires a copy of the petitions to be delivered to the county auditor, treasurer and attorney -- and three copies to the assessor -- by April 30 in order to protest the values set the year before.

On that day in 2003, the process server, who is not named in the ruling, arrived at the Clay County Courthouse in the late afternoon, first delivering petitions to County Auditor Lori Johnson.

At about 4:15 p.m., the process server went next door to the Clay County Family Service Center to serve Treasurer Betty Swetland.

After signing for two of the petitions, Swetland refused to accept the third, noting it was 4:33 p.m., three minutes after the office closed.

The process server then went next door to the courthouse, which was locked because it also closed at 4:30.

Unsuccessfully, the process server attempted that night to serve County Attorney Lisa Borgen and County Assessor Loren Johnson at their homes.

In his ruling, Perez wrote the process server "simply miscalculated the amount of time it would take to serve three county officials, in two separate buildings on three separate floors, and also file with the Court Administrator, all within fifteen minutes."

The ruling does not affect the companies' challenges to values set in other years.

American Crystal is contesting the value of all its facilities in four counties in Minnesota and North Dakota.

"American Crystal believes the merits of our case are still intact," Schweitzer said.

Winkis said there is no date set for the next hearing in the sugar processor's tax court case seeking a two-thirds cut in its 2003 property values.

Pembina County, N.D., commissioners will hear a request today from American Crystal to lower the value of its plant in Drayton by about $10 million.

The cooperative is appealing a judge's decision to dismiss the challenge for the 2002 value of a plant in East Grand Forks. The rest of the case, which includes a plant in Crookston and four rural piling stations, is on hold until the appeal is settled.

Last week commissioners in Traill County rejected American Crystal's tax abatement request to lower the value of its facilities by $20 million for each of three years.

Winkis said Kmart is scheduled to make its case for lowering the values of its store set in 2000, 2001 and 2003 at a tax court trial in Clay County starting March 1.

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