BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
WILLIAM P. SAUNDERS FROM )
A DECISION OF THE TETON COUNTY ) Docket No. 2001-160
BOARD OF EQUALIZATION - 2001 )
PROPERTY VALUATION )
FINDINGS OF FACT
CONCLUSIONS OF LAW
DECISION AND ORDER
William P. Saunders, Trustee, Petitioner, appearing pro se.
James L. Radda, Deputy Teton County Attorney, appearing for the Teton County Assessor.
This matter was considered by the State Board of Equalization (Board) consisting of Edmund J. Schmidt, Chairman, Roberta A. Coates, Vice-Chairman, and Sylvia Lee Hackl, Member, on written information pursuant to a Briefing Order (Locally Assessed Property) dated October 25, 2001. The appeal arises from a decision of the Teton County Board of Equalization (County Board). Petitioner contends that the decision of the County Board was in error because it upheld a value in excess of the fair market value of the property. On appeal, the Board must consider the following issue:
Was the County Board decision upholding the value of the property as assigned by the assessor, a value set by the sale price of the property, supported by substantial evidence, in accordance with procedures required by law, and neither arbitrary, capricious, nor inconsistent with law?
The Board is mandated to "hear appeals from county boards of equalization . . . upon application of any interested person adversely affected" and to hold hearings after due notice pursuant to the Wyoming Administrative Procedure Act and prescribed rules and regulations. Wyo. Stat. 39-11-102.1(c). An appeal from a county board of equalization decision must be filed with the Board within thirty (30) days from entry of the county board decision. Rules, Wyoming State Board of Equalization, Chapter 3, 2.
William P. Saunders, Trustee, purchased land in Teton County on January 13, 2000, from an unrelated third party for five million dollars ($5,000,000.00). Petitioner believed the purchase price was not the fair market value of the land and appealed to the County Board because an independent appraisal set the value at three million dollars ($3,000,000.00). The land is 11.4 acres and is undeveloped. It borders the Snake River Valley and land owned by the United States Forest Service.
FINDINGS OF FACT
1. The property is undeveloped land located in Teton County, Wyoming, that borders the Snake River and United States National Forest Service land. [County Board Record, Exhibit 5, pp. 17-18; Audiotape of hearing].
2. The legal description of the property is Lot 63 Rivermeadows Subdivision, Fourth filing. The address is 4895 West Bald Eagle Road. The land is 11.4 acres. [County Board Record p. 15].
3. On January 13, 2000, Petitioner purchased the property for $5,000,000.00 as
evidenced by the Statement of Consideration. [County Board Record p. 18]. The
Assessor's office verified the sales price of the property with the realtor and the title
company. [County Board Record p. 15]. Petitioner confirmed that the
seller was asking $5,000,000.00 dollars as the purchase price, and Petitioner paid
$5,000,000.00. However, Petitioner testified he previously had attempted to purchase the
land because of emotional ties, and he agreed to the purchase price prior to the land
being offered for sale to the general public.[Audiotape of hearing].
4. After purchasing the land, Petitioner had an appraisal performed for the property. The appraisal determined the fair market value of the property to be $3,000,000.00. [County Board Record pp. 19-44]. There was no criticism of the appraisal. The Assessor rejected the appraised value because of the recent sale of the property. [Audiotape of hearing].
5. Petitioner filed an "Official Appeal of Assessment" on May 21, 2001. [County Board Record pp. 10- 12].
6. The County Board held a hearing on July 23, 2001. The County Board entered an Order that affirmed the value as set by the Assessor on August 6, 2001. [County Board Record, pp. 45-48].
7. The County Board's Order at paragraph 8 found:
Upon inquiry of the Board, it was ascertained that the comparable properties used by the County Assessor were, in fact, comparable in size and location to the property of the Appellant.
However, a review of the record shows that the only comparable properties presented were presented by Petitioner and in the appraisal presented by the Petitioner. The Assessor did not present any comparable properties. [County Board Record, pp. 10, 21-24, 33-36, Audiotape of the Hearing].
Petitioner timely filed his Notice of Appeal with the State Board on August 28, 2001.
9. Any Discussion above or Conclusion of Law below which includes a finding of fact may also be considered a Finding of Fact and, therefore, is incorporated herein by this reference.
CONCLUSIONS OF LAW
10. Petitioner's Notice of Appeal was timely filed and the Board has jurisdiction to determine this matter.
11. The State Board's inquiry is limited to whether the value of the land, as determnied by the Assessor and affirmed by the County Board is: (a) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; (b) in excess of statutory jurisdiction or authority; (c) without observance of procedures required by law; or (d) unsupported by substantial evidence. Rules, Wyoming State Board of Equalization, Chapter 3, 9.
12. As a reviewing body, we will not substitute our judgment for findings reasonably supported by evidence in the County Board record. Laramie County Board of Equalization v. State Board of Equalization, 915 P.2d 1184, 1189 (Wyo. 1996); Amax Coal v. State Board of Equalization, 819 P.2d 825 (Wyo. 1991); Sage Club, Inc. v. Employment Security Commission, 601 P.2d 1306, 1310 (Wyo. 1979). While substantial evidence may be less than the weight of the evidence, it cannot be clearly contrary to the overwhelming weight of the evidence. As the Wyoming Supreme Court has stated, substantial evidence "is more than a mere scintilla of evidence or suspicion of a fact to be established." Mountain Fuel Supply Company v. Public Service Commission, 662 P.2d 878, 882 (Wyo. 1983). "Substantial evidence is relevant evidence which a reasonable mind might accept in support of the conclusions of the agency." Amax Coal, 819 P.2d at 828.
13. The Wyoming Supreme Court has held that "an agency's action is arbitrary and capricious and must be reversed if any essential finding is not supported by substantial evidence." Amax Coal West, Inc. v. State Board of Equalization, 896 P.2d 1329, 1335 (Wyo. 1995), citing Majority of Working Interest Owners in Buck Draw Field Area v. Wyoming Oil and Gas Conservation Commission, 721 P.2d 1070, 1079 (Wyo. 1986), and Amax Coal, supra. "Substantial evidence is that quantum of relevant evidence which would be accepted by a reasonable mind as adequate to support the conclusion." Gray v. Wyoming State Board of Equalization, 896 P.2d 1347, 1348 (Wyo. 1995).
14. An assessor's valuation is presumed valid, accurate and correct, which presumption survives until overturned by credible evidence. Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 851 (Wyo. 1998). The burden was on the Petitioner to demonstrate the land is overvalued.
15. The relevant statute provides:
Wyo. Stat. 39-11-101. Definitions.
(a) As used in this act unless otherwise specifically provided:
(vi) "Fair market value" means the amount in cash, or terms reasonable equivalent to cash, a well informed buyer is justified in paying for a property and a well informed seller is justified in accepting, assuming neither party to the transaction is acting under undue compulsion, and assuming the property has been offered in the open market for a reasonable time.
This exact definition is found in the Department of Revenue Rules, Chapter 9, Section 2(f).
16. The Assessor and the County Board interpreted the sale price paid for this property to be the sole indicator of fair market value. At the outset it should be noted this property was never on the open market. Therefore, the sale price is not an indication of fair market value.
17. Assessors are to value property using the methods prescribed by the Department of Revenue. Wyo. Stat. 39-13-103(b)(ii) and 39-11-102(c)(xv). The methods to value property are: 1) the sales comparison approach, 2) the cost approach, 3) the income or capitalized earnings approach, and 4) the Computer Assisted Mass Appraisal approach. Rules, Department of Revenue, Chapter 9, 6. The Assessor did not use any of the approaches as set forth in the Rules. The Assessor did not use the sales comparison approach when the value was set by the sales price of the parcel of land being valued.
18. It is established law in Wyoming that the sale price of property may not reflect its fair market value. Gray v. Wyoming State Bd. Of Equalization, 896 P.2d 1347 (1995). In Gray, the taxpayer wanted the value of his hotel properties to be set at the level he bought the properties at an auction. The Court rejected Gray's arguments and stated at page 1351:
It is clear from the Constitution of the State of Wyoming and all of the relevant statutes that discrimination in a class is prohibited. Property must be uniformly valued and equally and uniformly taxed. The rules and regulations promulgated by the State Board, pursuant to statutory authority, authorize several methods of appraisal which may be used by the assessor to provide uniformity. Reliance upon actual sales prices, in lieu of the methods adopted by the State Board, may well lead to discrimination and lack of equality and uniformity. While one method of arriving at assessed valuation, the sales comparison approach, may rely upon actual sales, it is not limited to the sale price for the particular property involved.
19. As the Supreme Court noted, there need to be consistent approaches to value property which result in uniformity and equality. Using the sales price of one piece of property does not result in uniformity and equality as required by the Wyoming Constitution.
20. The County Board's finding of fact in paragraph 6 is unclear: "It was her position that the State Board of Equalization required that all assessments be placed within 95 to 105% of the median value of comparable sales that she had utilized." [County Board Record, p. 46]. The Assessor utilized no comparable sales. Furthermore, this is a misstatement and misapplication of the Board's rule. The rule to which this paragraph may be referring is Wyoming State Board of Equalization Rule, Chapter 5, Section 6 (a) which provides:
(i) Level of Appraisal. The level of appraisal for residential and commercial, improved and vacant, shall be between .95 and 1.05. To determine compliance with this standard, a 95% confidence interval will be computed around the county's level of appraisal and the confidence interval must include one or more points in the range of .95 and 1.05.
This rule does not lead to the conclusion that the actual sales price of property must be used to determine value.
21. The appraisal introduced by Petitioner is the only evidence of value in the record. The appraisal used the sales comparison approach. There was no criticism of the appraisal. The appraisal appears to present a reasonable estimate of fair market value. "Substantial evidence is that quantum of relevant evidence that a reasonable mind might accept as adequate to support a conclusion." Holly Sugar v. State Board of Equalization, 839 P.2d 959, 963 (Wyo. 1992) The Board concludes the appraisal submitted by Petitioner constitutes substantial evidence the 2001 value of Petitioner's property was $3,000,000.00.
22. The Board concludes the County Board decision was founded on an incorrect citation of the law. First the sale price of the property does not indicate fair market value because the property was not exposed to the open market. Second, there were no comparable property sales presented by the Assessor. Third, an assessor should not utilize the State Board's rules regarding the use of a confidence interval to represent that the Assessor has reached fair cash market value for a particular piece of property. The State Board uses the confidence interval to gauge assessment bias between counties, not as a definitive test to verify an Assessor's value on a neighborhood or one piece of property basis.
23. The County Board's decision is not supported by substantial evidence. Thus, its order upholding the Assessor's value is arbitrary and capricious and must be reversed. Amax Coal West, Inc., supra, citing Majority of Working Interest Owners in Buck Draw Field Area, supra, and Amax Coal, supra.
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IT IS THEREFORE HEREBY ORDERED:
A. The decision of the Teton County Board of Equalization affirming the 2001 estimate of fair market value of $5,000,000.00, for Petitioner's property located at Lot 63 Rivermeadows Subdivision, Fourth filing, Teton County Wyoming, shall be and the same is hereby reversed; and
B. The matter is remanded to the County Board of Equalization with directions to direct the Assessor to enter a value of $3,000,000.00 consistent with this decision.
Pursuant to Wyo. Stat. 16-3-114 and Rule 12, Wyoming Rules of Appellate Procedure, any person aggrieved or adversely affected in fact by this decision may seek judicial review in the appropriate district court by filing a petition for review within 30 days of the date of this decision.
DATED this 28th day of March, 2002.
STATE BOARD OF EQUALIZATION
Edmund J. Schmidt, Chairman
Roberta A. Coates, Vice-Chairman
Sylvia Lee Hackl, Member
Wendy J. Soto, Executive Secretary