BEFORE THE STATE BOARD OF EQUALIZATION


FOR THE STATE OF WYOMING


IN THE MATTER OF THE APPEAL OF           ) 

JOHN AND DELANA GORSKI FROM         )

A DECISION OF THE ALBANY COUNTY      )         Docket No. 2006-01

BOARD OF EQUALIZATION - 2005               )

PROPERTY VALUATION                                 ) 



DECISION AND ORDER





APPEARANCES


John and DeLana Gorski, appearing pro se (Petitioners or Taxpayers).


James P. Schermetzler, Deputy Albany County Attorney, on behalf of Deborah J. Nagel-Smith, the Albany County Assessor (Respondent or Assessor).



DIGEST


This is an appeal from a decision of the Albany County Board of Equalization (County Board). The State Board of Equalization (State Board), comprised of Alan B. Minier, Chairman, Thomas R. Satterfield, Vice-Chairman, and Thomas D. Roberts, Board Member, considered the parties’ respective briefs, the hearing record and the decision of the County Board.


Petitioners’ Notice of Appeal was filed with the State Board effective January 4, 2006. Petitioners and the Assessor filed briefs as allowed by the State Board’s Briefing Order issued March 20, 2006. Neither party requested oral argument.


Petitioners appealed the County Board decision affirming the Assessor’s 2005 fair market valuation of their property. We will evaluate the Taxpayers’ claims against our standard of review, which is whether the ruling of the County Board was arbitrary, capricious, unsupported by substantial evidence, and/or contrary to law. Rules, Wyoming State Board of Equalization, Chapter 3, § 9. We affirm the decision of the County Board.



PROCEEDINGS BEFORE THE COUNTY BOARD

The County Board conducted a hearing on November 15, 2005. The County Board entered its Findings of Fact, Conclusions of Law and Order on December 6, 2005, affirming the Assessor’s 2005 fair market value of $179,800 for Petitioners’ property.



JURISDICTION


The State Board is required to “hear appeals from county boards of equalization.” Wyo. Stat. Ann. § 39-11-102.1(c). A timely appeal from the County Board decision was filed with the State Board. Rules, Wyoming State Board of Equalization, Chapter 3, § 2.



STANDARD OF REVIEW


When the State Board hears appeals from a County Board, it acts as an intermediate level of appellate review. Laramie County Board of Equalization v. Wyoming State Board of Equalization, 915 P.2d 1184, 1188 (Wyo. 1996); Union Pacific Railroad Company v. Wyoming State Board of Equalization, 802 P.2d 856, 859 (Wyo. 1990). In its appellate capacity, the State Board treats the County Board as the finder of fact. Id. In contrast, the State Board acts as the finder of fact when it hears contested cases on appeal from final decisions of the Department of Revenue (Department). Wyo. Stat. Ann. § 39-11-102.1(c). This sharp distinction in roles is reflected in the State Board Rules governing the two different types of proceedings. Compare Rules, Wyoming State Board of Equalization, Chapter 2 and Rules, Wyoming State Board of Equalization, Chapter 3. Statutory language first adopted in 1995, when the State Board and the Department were reorganized into separate entities, does not express the distinction between the State Board’s appellate and de novo capacities with the same clarity as our long-standing Rules. 1995 Wyo. Sess. Laws, Chapter 209, § 1; § 39-1-304(a) (Currently Wyo. Stat. Ann § 39-11-102.1(c)).


By Rule, the State Board’s standards for review of a County Board’s decision are nearly identical to the Wyoming Administrative Procedure Act standards which a district court must apply to hold unlawful and set aside agency action, findings of fact, and conclusions of law. Wyo. Stat. Ann. § 16-3-114(c)(ii). However, unlike a district court, the State Board will not rule on claims that a County Board has acted “[c]ontrary to constitutional right, power, privilege or immunity.” Wyo. Stat. Ann. § 16-1-114(c)(ii)(B). The State Board’s review is limited to a determination of whether the County Board action was:

 

(a) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

 

(b) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

 

(c) Without observance of procedure required by law; or

 

(d) Unsupported by substantial evidence.


Rules, Wyoming State Board of Equalization, Chapter 3, § 9.


Since the State Board Rules are patterned on the judicial review provision of the Wyoming Administrative Procedure Act, we look to precedent under Wyo. Stat. Ann. § 16-3-114(c) for guidance. For example, we must apply this substantial evidence standard:

 

Our task is to examine the entire record to determine if substantial evidence exists to support the [County Board’s] findings. We will not substitute our judgment for that of the [County Board] if [its] decision is supported by substantial evidence. Substantial evidence is relevant evidence which a reasonable mind might accept in support of the agency’s conclusions.

 

Romero v. Davey McKee Corp., 854 P.2d 59, 61 (Wyo. 1993).


We review the findings of ultimate fact of a county board of equalization de novo:

 

“When an agency’s determinations contain elements of law and fact, we do not treat them with the deference we reserve for finding of basic fact. When reviewing an ‘ultimate fact,’ we separate the factual and legal aspects of the findings to determine whether the correct rule of law has been properly applied to the facts. We do not defer to the agency’s ultimate factual finding if there is an error in either stating or applying the law.”

Basin Elec. Power Co-op., Inc. v. Dep’t of Revenue, State of Wyoming., 970 P.2d 841, 850-51 (Wyo. 1998)(citations omitted).


Britt v. Fremont County Assessor, 2006 WY 10, ¶ 17, 126 P.3d 117, 123 (Wyo. 2006).


We must also apply this “arbitrary and capricious’ standard:

 

Even if sufficient evidence is found to support the agency’s decision under the substantial evidence test, this [Board] is also required to apply the arbitrary-and-capricious standard as a “safety net” to catch other agency action which might have violated the Wyoming Administrative Procedures Act. Decker v. Wyoming Medical Comm’n, 2005 WY 160, ¶ 24, 124 P.3d 686, 694 (Wyo. 2005). “Under the umbrella of arbitrary and capricious actions would fall potential mistakes such as inconsistent or incomplete findings of fact or any violation of due process.” Id. (Quoting Padilla v. State ex rel. Wyoming Workers’ Safety and Comp. Div., 2004 WY 10,¶ 6, 84 P.3d 960, 962 (Wyo. 2004)).


State ex rel. Wyoming Workers’ Safety and Comp. Div. V. Madeley, 2006 WY 63, ¶ 8, 134 P.3d 281, 284 (Wyo. 2006)



ISSUES


Under our standards of review, the Petitioners must argue that the County Board decision is unsupported by substantial evidence, and/or the County Board arbitrarily and capriciously determined their property’s value for 2005 tax purposes.


We conclude the decision of the County Board was neither unlawful, arbitrary, nor capricious. We further conclude there was substantial evidence in the record supporting the Assessor’s valuation.



FACTS PRESENTED TO THE COUNTY BOARD


1.   Petitioners own residential property at 53 Upper Road, Albany County, Wyoming. [County Board Record, Exhibit 1, p. 19].


2.   The Assessor sent Petitioners a Notice of Assessment for the 2005 tax year on April 27, 2005. The Notice indicated a 2005 fair market value of $179,800. [County Board Record, Exhibit 29, p. 47].


3.   Petitioners, on May 11, 2005, filed a Petition For Appeal Before the County Board of Equalization. [County Board Record, p. 1].

 

4.   On May 25, 2005, the Assessor sent Petitioners a letter setting a hearing date of June 22, 2005. [County Board Record, Exhibit 9, p. 27].


5.   Mr. Gorski wrote a letter to Albany County Commissioner Chesnut on June 6, 2005, requesting additional time and stating the June 22, 2005 date was not convenient. [County Board Record, p. 3].


6.   On June 14, 2005, Petitioners sent a letter to the Assessor requesting the assessed value of their property at 53 Upper Road be adjusted to $148,000. [County Board Record, Exhibit A, p. 11].


7.   On August 4, 2005, the Albany County Clerk sent Petitioners a letter setting September 7, 2005, for a hearing on Petitioners’ appeal. [County Board Record, p. 5].


8.   On August 9, 2005, Petitioners requested a different hearing date because they were planning to be out of state on September 7, 2005. They also requested the hearing be set on a Friday in September excluding the 2nd and the 9th. [County Board Record, p. 7].


9.   On August 31, 2005, the Albany County Clerk sent Petitioners a letter advising Friday hearings were not possible. A hearing date for their appeal before the County Board was rescheduled for Tuesday, November 15, 2005. [County Board Record, p. 9].


10. The County Board held a hearing on Petitioners’ appeal on November 15, 2005. [County Board Record, Transcript, p. 5].


11. Petitioners appeared pro se at the County Board hearing. James Schermetzler, Deputy

County Attorney, appeared at the hearing for the Assessor. [County Board Record, Transcript, p. 2].


12. Mr. Gorski testified he purchased the property for $189,000 paying “a whole lot more money for this property than it was worth.” Mr. Gorski told the County Board he was not a qualified or informed buyer since he was from Colorado, and unfamiliar with the Wyoming state statutes. [County Board Record, Transcript, p.14].


13. Mr. Gorski objected to the comparable sales used by the Assessor to value their property and introduced two properties they felt were more comparable to their property: Exhibit C- Assessor’s Property Card for parcel located at 6 Sommers Road, and Exhibit D - Assessor’s Property Card for parcel located at 15 Valley Road. [County Board Record, Transcript, p. 11].


14. Mr. Gorski told the County Board the Assessor’s comparable number two was 60 square feet larger than his property, has 500 square feet of outbuildings, and is located on one half acre of land assessed at $19,290. He did not believe this was a very good comparable. [County Board Record, Transcript, pp. 15-16; Exhibit 16, p. 34; Exhibit 17, p. 35].


15. Mr. Gorski testified he had walked through the Assessor’s comparable number three. The property was sold with all furnishings, a pair of snowmobiles and an ATV. The Assessor’s office contended there was no documentation of personal property being sold with the buildings. Mr. Gorski understood many homes in that area have no record of personal property when selling the homes. [County Board Record, Transcript, p. 16].


16. Mr. Gorski objected to 1.6 acres of land in the Assessor’s comparable number three being assessed the same as his .99 acres which he said was not fair. [County Board Record, Transcript, p. 20].


17. Mr. Gorski also objected to the Assessor’s comparable number four because it was in Cheyenne. The Assessor’s residential appraiser, Grant Showacre informed Petitioners and the County Board that the Cheyenne address was the owners’ address, not the location of the property being assessed. [County Board Record, Transcript, p. 21].


18. Mr. Gorski told the County Board the buildings in the Assessor’s comparable number five were larger than his buildings. However, the land area in the Assessor’s comparable number five was only one third of an acre. Mr. Gorski believed the use of Assessor’s comparable number five showed his property was overvalued. [County Board Record, Transcript, p. 22].


19.  Mr. Gorski reviewed the comparable in Exhibit C for the County Board, pointing out the difference in parcel size and building square footage. The property had a market value of $140,700. Its 1.4 acres of land are valued less than his one acre. [County Board Record, Transcript, p. 23; Exhibit C, p. 15].


20. Mr. Gorski also reviewed the comparable in Exhibit B. The house was 1,032 square feet and the land size was .34 acres. The Petitioners’ house was 960 square feet and the land size was just under an acre (0.995 acres). The Exhibit B property was valued at $125,000 and Petitioners’ at $178,000. He told the County Board, something is wrong in this area, either Petitioners’ valuation is too high or everyone else’s is too low. Everyone has to be equally treated according to state statute. [County Board Record, Transcript, p. 25].


21. Mr. Gorski referred the County Board to Wyo. Stat. Ann. § 18-3-204 quoting the duties of the county assessor as “secure data concerning the listings and taxation of property within his County and gather data from public records and other sources as will enable him to assess all property at its fair value.” Mr. Gorski did not see any mention of computer models in the statute and thought there was something amiss. [County Board Record, Transcript, pp. 28-29].


22. When cross-examined by Assessor’s Counsel, Mr. Gorski testified he bought the property in November of 2004 paying $189,000, and he was not under duress or undue influence. He did not think the price was a fair market price because he was an out of state buyer and a realtor will not tell you what properties sell for. [County Board Record, Transcript, p. 32].


23. When questioned about getting an appraisal Mr. Gorski told the County Board he did not get an appraisal of his property because an appraisal company told him the cost would be about $600 and it probably would not help in the hearing. [County Board Record, Transcript, p. 33].


24. Mr. Gorski conceded he was not an appraiser and had no evidence other than the comparable exhibits he presented at the hearing. [County Board Record, Transcript, p. 34].


25. The Assessor’s residential appraiser, Grant Showacre, testified he worked for the Assessor for over five years and was certified as a property tax appraiser by the Department meeting the prescribed educational requirements in accordance with Wyo. Stat. Ann. § 18-3-201 and Department Rules. [County Board Record, Exhibit 2, p. 20; Transcript, p. 36].


26. Mr. Showacre reviewed Exhibit 5, the Valuation Indications and Recommendations, explaining it contained the appraisal year, the original appraisal value and the purchase price. A $20,000 difference of the value was being appealed. This value is the overvalue claimed by Petitioners which included the refrigerator, stove, drapes etc. However, the Statement of Consideration prepared by Petitioner at the time of sale shows no value for personal property. [County Board Record, Exhibit 5, p. 23; Exhibit 19, p. 28;Transcript, pp. 37-38].


27. Mr. Showacre informed the County Board the Property Information Sheet contained the address, property type, land size, year built and grade. The grade gives an idea of the quality of the construction. Contractor constructed buildings are graded as C. Petitioners’ building was graded as D+. The area of the building is 960 square feet. The property type is residential. It is a ranch style and has no basement and the desirability is good. The last inspection by the Assessor’s office was on June 25, 2001. [County Board Record, Exhibit 4, p. 22; Transcript, pp. 38-39].


28. Mr. Showacre testified when using the Computer Assisted Mass Appraisal (CAMA) system their office uses five years of sales. Everyone selling property is required by law to file a Statement of Consideration showing sales information. The computer system finds sales of houses similar to the Petitioners’ house for the comparable process. Information going into the computer includes style of building; the square footage; the grade of construction; the year built; the land size; number of rooms; how many bathrooms; and how many bedrooms. There are over ninety variables which are used to compare buildings. [County Board Record, Transcript, p. 40].


29. Mr. Showacre explained Exhibit 12 to the County Board. This exhibit was prepared showing all sales of the properties used to compare Petitioners’ property. Mr. Showacre explained the computer adjusts each property. As an example if one property has a garage but the Petitioners’ does not, the computer removes the value the garage so both properties will be on an equal playing field. [County Board Record, Transcript, p. 43].


30. Mr. Showacre testified the comparisons used in Exhibit 12 were all sales occurring within the last five years. All the comparable sales were classified as residential and within similar neighborhood groups. The Petitioners’ property was also used as a comparable sale in the group of sales occurring in the five year period. The prime sale used as a comparable was the property on Sommers Road which is in the same subdivision as the Petitioners’ property. When using the valuation method, they do not use the high sale or the low sales but attempt to find the middle sale as the best comparable sale. [County Board Record, Exhibit 12, p. 30; Transcript, pp. 48-49].


31. Mr. Showacre was questioned why he did not use the two parcels the Petitioners used for Exhibit C and Exhibit D. Mr. Showacre explained that Exhibit D did not have a similar grade to the Petitioners’ property and the structure was older, being built in 1955. In Exhibit C the sale occurred in l998. In their analysis they only used sales occurring within the last five years. [County Board Record, Transcript, pp. 51-52].

 

32. The County Board issued its decision on December 6, 2005, affirming the Assessor’s fair market value of $179,800. [County Board Record pp. 49-51].



DISCUSSION OF ISSUES AND APPLICABLE LAW


33. Petitioners’ Notice of Appeal to the State Board was timely filed. The State Board has jurisdiction to hear and determine all issues properly raised pursuant to Wyo. Stat. Ann. § 39-13-109(b)(ii).


34. The Wyoming Constitution, article 15 § 11, requires all property “be uniformly assessed for taxation, and the legislature shall prescribe such regulations as shall secure a just valuation of taxation of all property, real and personal.”


35. The determination of fair market value involves a degree of discretion:

 

Early on, Justice Blume recognized a truth inherent in the area of property valuation: “There is no such thing as absolute value. A stone cannot be other than a stone, but one man may give a different valuation to a piece of land than another.” Bunten v. Rock Springs Grazing Ass'n, 29 Wyo. 461, 475, 215 P. 244, 248 (1923). Accordingly, this court has consistently interpreted Wyo. Const. art. 15, § 11 to require “only a rational method [of appraisal], equally applied to all property which results in essential fairness.”


Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 857 (Wyo.1998) quoting Holly Sugar Corp. v. State Board of Equalization, 839 P.2d 959, 964 (Wyo.1992). The Wyoming Supreme Court has recently reiterated the “rational method” standard. Britt v. Fremont County Assessor, 2006 WY 10, ¶ 18,126 P.3d 117,124 (Wyo. 2006).


36. Broken into its component parts, the constitutional standard requires: (1) a rational method; (2) equally applied to all property; and (3) essential fairness. It is the burden of one challenging an assessment to prove by a preponderance of the evidence that at least one of these elements has not been fulfilled. Basin Electric Power Coop., 970 P.2d at 852.


37. Fair market value is defined as:

 

[T]he amount in cash, or terms reasonably 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….


Wyo. Stat. Ann. § 39-11-101(a)(vi).


38. The Department is required to confer with, advise and give necessary instructions and directions to the county assessors as to their duties, and to promulgate rules and regulations necessary for the enforcement of all tax measures. Wyo. Stat. Ann. § 39-11-102(c)(xvi) and (xix). In particular, the Department “shall prescribe by rule and regulation the appraisal methods and systems for determining fair market value using generally accepted appraisal standards.” Wyo. Stat. Ann. § 39-13-103(b)(ii).


39. An assessor is required to annually value property within the assessor’s county for tax purposes at its fair market value. In completing this task, an assessor is required to “[f]aithfully and diligently follow and apply the orders, procedures and formulae of the department of revenue or orders of the state board of equalization for the appraisal and assessment of all taxable property.” Wyo. Stat. Ann. § 18-3-204(a)(ix).


40. The Department has promulgated rules prescribing the methods for valuing property. The acceptable methods include a sales comparison approach, a cost approach, and an income or capitalized earning approach. The Rules also authorize the use of the CAMA system. Rules, Wyoming Department of Revenue, Chapter 9, § 6(a), (b), (c), and (d).


41. The Wyoming Supreme Court has recognized the validity of valuations derived from the CAMA system. Gray v. Wyoming State Board of Equalization, 896 P.2d 1347 (Wyo. 1995), Britt v. Fremont County Assessor, 2006 WY 10, ¶ 17, 126 P.3d 117,123, (Wyo. 2006). In fact, the Wyoming Supreme Court rejected the use of actual sales price for properties in favor of the value established by the CAMA system because of the equality and uniformity which result from its use. Gray, supra, at 1351.


42. An assessor’s valuation is presumed valid, accurate, and correct. This presumption survives until overturned by credible evidence. Teton Valley Ranch v. State Board of Equalization, 735 P.2d 107, 113 (Wyo. 1987). A mere difference of opinion as to value is not sufficient to overcome the presumption. J Ray Mc Dermott & Co. v. Hudson, 370 P.2d 364, 370 (Wyo. 1962). The presumption is especially valid where the Assessor valued the property according to the Department’s Rules and Regulations which provide for the use of the CAMA system in the assessment of real property. Rules, Wyoming Department of Revenue, Chapter 9 § 6(b), (d). “The burden is on the Taxpayer to establish any overvaluation.” Hillard v. Big Horn Coal Co., 549 P.2d 294 (Wyo. 1976).


43. The County Board record indicates the Assessor’s office complied with the requirements of state law in determining the value for the Taxpayers’ property by using the cost and sales comparison approaches to value the property as prescribed in Chapter 9 of the Department Rules. Rules, Wyoming Department of Revenue, Chapter 9, § 6(a). The uncontroverted testimony of the Assessor’s residential appraiser showed that the Department’s Rules were followed. Supra ¶¶ 28, 29, 30.

  

44. The Taxpayer did not demonstrate the CAMA based results were incorrect. While the Taxpayers are obviously of the opinion that a review of what they believe are comparable properties do not support the Assessor’s 2005 value, they can not prevail simply by having an opinion contrary to that of the Assessor. A mere difference of opinion is not sufficient to overcome the presumption in favor of the Assessor’s valuation. Supra, ¶ 42.


45. We further conclude there is substantial evidence in the record to support the valuation of the Assessor. In determining whether there is substantial evidence in the record, the State Board will not substitute its judgement of findings reasonably supported by evidence in the County Board record. Laramie County Board of Equalization v. State Board of Equalization, 915 P.2d 1184, 1188-1189 (Wyo. 1996); Holly Sugar Corp. v. Wyoming State Board of Equalization, 839 P.2d 959 (Wyo. 1992); Sage Club, Inc. v. Employment Sec. Comm’n., 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. The Wyoming Supreme Court has stated “[s]ubstantial evidence is a term of art best described as relevant evidence that a reasonable mind can accept as adequate support for an agency’s conclusion.” Sidwell v. State Workers’ Compensation Div., 977 P.2d 60, 63 (Wyo. 1999).



ORDER


      IT IS THEREFORE HEREBY ORDERED the Albany County Board of Equalization Order affirming the valuation of Petitioner's 2005 property is affirmed.


Pursuant to Wyo. Stat. Ann. §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 _______ day of September, 2006.

 

STATE BOARD OF EQUALIZATION

 

 

 

_____________________________________

Alan B. Minier, Chairman

 

 

 

_____________________________________

Thomas R. Satterfield, Vice-Chairman

 

 

 

_____________________________________

Thomas D. Roberts, Board Member


ATTEST:




________________________________

Wendy J. Soto, Executive Secretary