Opinion ID: 2524934
Heading Depth: 3
Heading Rank: 3

Heading: The Board's Failure to Make Sufficient Factual Findings Constitutes Harmless Error.

Text: Alvarez claims that the Board did not make factual findings that are sufficient to enable meaningful judicial review, as required by our decision in Faulk v. Board of Equalization. [14] Alvarez asserts that the Board made no findings of fact at all to support its conclusion that the assessor's assessment should be upheld, and that therefore meaningful review of the Board's conclusion is impossible. The Borough claims that Faulk is distinguishable, and that in this case the findings made by the Board were sufficient to enable meaningful review. The superior court below made sufficient factual findings. The court stated that [w]ith regard to the vacant land, there is a clearly adequate record. As for the residential property, the court concluded that it is relatively clear from comments made on the record by Board members that the Board concluded that the assessor had adequately addressed Alvarez's objections and incorporated changes, where necessary, into their valuation. In Faulk, we articulated the standard for the sufficiency of factual findings by an administrative board of equalization, stating that the threshold question on appeal is whether the record sufficiently reflects the basis for the [board's] decision so as to enable meaningful judicial review: [15] In answering that question, [t]he test of sufficiency is ... a functional one: do the [board's] findings facilitate this court's review, assist the parties and restrain the [board] within proper bounds? [16] We stated that findings will not always be required: in certain cases, the issues are such that, based on the record, detailed findings are not necessary for this court to understand the agency's reasoning process. [17] In this appeal, Ketchikan Gateway Borough Code § 45.11.105(9) is also relevant; it states that the Board of Equalization should make its decisions in the form of motions, with specific findings of fact therefore. In several earlier decisions, we considered the sufficiency of administrative factual findings, and we concluded that the findings there were not sufficient to enable meaningful review. In five of those cases, the findings were not sufficient because it was impossible for us to determine how the board resolved some crucial dispute or other issue. [18] In two other decisions, we held that the findings of an administrative board were sufficient because it was possible to determine how all crucial disputes and issues were resolved. [19] The factual circumstances involved in Faulk are similar to those in this appeal. In Faulk, the property owner (Faulk) owned a condominium complex in Seward that he bought for $495,000. [20] Approximately one month after Faulk purchased the complex, the assessor assessed its value at $1,055,400. [21] Since there were no other condominium complexes in the area, the assessor based the value on comparable sales of townhouses. [22] Before the board of equalization, Faulk claimed that (1) costly repairs that were needed at the complex were undervalued by the assessor, and (2) the comparable properties used by the assessor were not really comparable. [23] The assessor supported its valuation by claiming that Faulk received a bulk discount when he bought the entire complex at once, rather than each unit individually. [24] In a written report, the assessor claimed that the alleged bulk discount was between twenty-five and thirty-five percent; however, at the hearing the assessor stated that the discount was between thirty and fifty percent. [25] After the parties made their presentations, the board voted, without any discussion or analysis, to uphold the assessor's valuation. [26] On appeal, we held that the equalization board's findings were insufficient because the board did not address Faulk's argument that the repair costs were undervalued, did not indicate whether it agreed with the assessor's bulk discount theory, and did not resolve the inconsistency between the assessor's written and oral testimony. [27] As in Faulk, this appeal is from a decision of a board of equalization, where the original dispute between the parties concerned the proper valuation of the taxpayer's property. Before the Board, Alvarez claimed that her undeveloped lots should be assessed using the amount of the best offer to buy that Alvarez had received; she claimed that the closure of a local timber mill had a negative impact on property values, making prior comparable sales irrelevant. As for her residential property, Alvarez claimed that the Borough made various factual errors, and that the assessment should have accounted for an encroachment on her lot. The Borough responded to all of these arguments, claiming that Alvarez did not make a reasonable attempt to sell the undeveloped lots, that the mill closure had no effect on undeveloped property values, that factual errors concerning the residential property were corrected, and that the encroachment had no effect because this was true for comparable properties. Also, as in Faulk, the Board below did not make any explicit factual findings. At the close of the discussion period for each of Alvarez's appeals, the Board voted to affirm the assessments for each of the three properties, and no factual findings were issued. Unlike in Faulk, however, the failure here to make any explicit factual findings is harmless. This appeal is distinguishable from Faulk because the record indicates that the Board addressed all of the arguments made by the parties, and left no disputes unresolved; it is clear that the Board agreed with all of the borough assessor's arguments and disagreed with those made by Alvarez. Specifically, the Board addressed all of the arguments raised by the parties in question and answer and discussion periods, conducted after the parties' presentations to the Board. In these periods, the Board addressed the reasonableness of the offer to buy the unimproved lots, the relevance of the comparable sales relied upon by the assessor in light of the mill closure, the alleged factual errors concerning the residential property, and the encroachment on the residential property. Also, unlike in Faulk, where we could only guess how the equalization board resolved evidentiary conflicts, [28] it is clear in this case how the conflicting theories were resolved. On the material points of conflict noted above, the Board clearly agreed with the assessor's arguments and disagreed with Alvarez's arguments. [29] No disputes were left unresolved. We do not condone the Board's failure to make factual findings. Ketchikan Gateway Borough Code § 45.11.105(9) clearly required the Board to issue factual findings, and it should have done so in this case. However, we conclude that this failure was harmless because the record adequately discloses the basis for the Board's decision, and shows how the Board resolved the disputes between the parties.