Court Opinion

ID: 2726941
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:10:09.930289+00
Date Added: 2024-06-11T12:39:57.578120
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                               NO. COA13-1314
                       NORTH CAROLINA COURT OF APPEALS

                              Filed:    5 August 2014

In The Matter of the Appeal of:

DENNY E. and DEBORAH C. KING from                   From The North Carolina
the decision of the Haywood County                  Property Tax Commission
Board of Equalization and Review                        No. 11 PTC 838
regarding the valuation of certain
real property for tax year 2011.

      Appeal by Haywood County from final decision of the North

Carolina Property Tax Commission entered 21 June 2013.                     Heard in

the Court of Appeals 9 April 2014.

      Denny E. King, pro se.

      Parker Poe Adams & Bernstein LLP, by Charles C. Meeker, for
      Haywood County.

      McCULLOUGH, Judge.

      Haywood County appeals from the final decision of the North

Carolina Property Tax Commission (the “Commission”) in favor of

Denny   E.   King    and   Deborah     C.   King    (“taxpayers”).         For   the

following reasons, we vacate the final decision and remand to

the Commission.
                                       -2-
                                 I. Background

    This      case   concerns    a   2011    valuation     of   taxpayers’    real

property located at 296 Rough Water Point in Haywood County,

North    Carolina,      (the    “subject     property”)     for    purposes    of

assessing ad valorem taxes.             The subject property includes a

single family residence situated on 3.1 acres of land.

    In    a   general    reappraisal       effective   1   January    2011,   the

Haywood County Tax Assessor (the “assessor”) valued the subject

property at a total value of $210,900.                   Unsatisfied with the

valuation, taxpayers appealed the assessor’s determination to

the Haywood County Board of Equalization and Review (the “County

Board”), who later received evidence and heard testimony in the

case on 25 July 2011.           By notice mailed 2 September 2011, the

County Board notified taxpayers of its decision to reduce the

valuation to a total value of $205,100.

    Still      unsatisfied,     taxpayers     proceeded     to    challenge    the

County Board’s decision by appealing to the Commission.                         In

their notice of appeal to the Commission, taxpayers asserted the

“assessed value per square foot [was] substantially higher than

similar assessed homes[]”            and alleged   the true value of           the

subject property was $165,232.              Taxpayers’ appeal then came on
                                  -3-
for hearing before the Commission, sitting as the State Board of

Equalization and Review, in Raleigh on 18 January 2013.

      Subsequent to the hearing, the Commission entered its final

decision in favor of taxpayers on 21 June 2013.            Specifically,

the   Commission   concluded   “[i]n    this   appeal,   [taxpayers]   did

present evidence tending to show that the county tax supervisor

used an arbitrary method of valuation; and that the county’s

assessment substantially exceeded the true value in money of the

property.”   The Commission then ordered that the value assigned

to the subject property by the County Board be modified to a

total value of $172,200.

      Haywood County appealed the Commission’s decision to this

Court on 18 July 2013.

                       II. Standard of Review

      N.C. Gen. Stat. § 105-345.2 governs this Court’s review of

a final decision by the Commission.            It provides in pertinent

part:

           So far as necessary to the decision and
           where presented, the court shall decide all
           relevant   questions   of   law,   interpret
           constitutional and statutory provisions, and
           determine the meaning and applicability of
           the terms of any Commission action.      The
           court may affirm or reverse the decision of
           the Commission, declare the same null and
           void, or remand the case for further
           proceedings; or it may reverse or modify the
                                            -4-
               decision if the substantial rights of the
               appellants have been prejudiced because the
               Commission's      findings,     inferences,
               conclusions or decisions are:

               (1)    In    violation             of      constitutional
                      provisions; or

               (2)    In excess of statutory authority                     or
                      jurisdiction of the Commission; or

               (3)    Made upon unlawful proceedings; or

               (4)    Affected by other errors of law; or

               (5)    Unsupported by competent, material and
                      substantial evidence in view of the
                      entire record as submitted; or

               (6)    Arbitrary or capricious.

N.C. Gen. Stat. § 105-345.2(b) (2013).                    “In making the foregoing

determinations, the court shall review the whole record or such

portions thereof as may be cited by any party and due account

shall be taken of the rule of prejudicial error.”                               N.C. Gen.

Stat. § 105-345.2(c).

                                    III. Discussion

      Haywood        County    raises     the     following      issues     on    appeal:

whether    the       Commission     erred    in    (1)    failing     to   explain      the

process by which it concluded taxpayers rebutted the presumption

of   correctness        afforded     to     ad    valorem      tax   assessments,       (2)

failing to explain why the valuation of the subject property

should    be    reduced       to   $172,200,      and    (3)   failing     to    find   and
                                      -5-
conclude that substantial evidence supported the County Board’s

assessment of the subject property at a value of $205,100.                  We

address the first two issues together, followed by the third

issue.

            Sufficiency of the Commission’s Final Decision

      In    the    first   two    issues    on   appeal,     Haywood   County

challenges the sufficiency of the Commission’s final decision.

Specifically, Haywood County contends the Commission erred in

failing to explain how it applied the burden shifting analysis

and how it determined the reduced value of the subject property.

In   response     to   Haywood   County’s   arguments,     taxpayers   do   not

address the adequacy of the Commission’s final decision, but

instead point to evidence they contend supports the Commission’s

decision.       Upon review, we agree with Haywood County and hold

the final decision inadequate.

      North Carolina’s uniform appraisal standards              provide the

following guidance:

            All property, real and personal, shall as
            far as practicable be appraised or valued at
            its true value in money. When used in this
            Subchapter, the words “true value” shall be
            interpreted as meaning market value, that
            is, the price estimated in terms of money at
            which   the  property  would   change  hands
            between a willing and financially able buyer
            and a willing seller, neither being under
            any compulsion to buy or to sell and both
                                    -6-
            having reasonable knowledge of all the uses
            to which the property is adapted and for
            which it is capable of being used.

N.C. Gen. Stat. § 105-283 (2013).

    “It is . . . a sound and a fundamental principle of law in

this State that ad valorem tax assessments are presumed to be

correct.”    In re Amp, 287 N.C. 547, 562, 215 S.E.2d 752, 761

(1975).     Yet,   “the   presumption     is   only   one   of   fact    and   is

therefore rebuttable.”         Id. at 563, 215 S.E.2d at 762.            “[T]he

burden of proof is on the taxpayer to show that the assessment

was erroneous.”    Id. at 562, 215 S.E.2d at 762.

            [I]n order for the taxpayer to rebut the
            presumption   he   must  produce  competent,
            material and substantial evidence that tends
            to show that:    (1) [e]ither the county tax
            supervisor used an arbitrary method of
            valuation; or (2) the county tax supervisor
            used an illegal method of valuation; AND (3)
            the assessment substantially exceeded the
            true value in money of the property. Simply
            stated, it is not enough for the taxpayer to
            show that the means adopted by the tax
            supervisor were wrong, he must also show
            that the result arrived at is substantially
            greater than the true value in money of the
            property assessed, i.e., that the valuation
            was unreasonably high.

Id. at 563, 215 S.E.2d at 762 (quotation marks and citation

omitted)    (emphasis     in   original).        “[O]nce    [the]       taxpayer

produces the evidence required by AMP, the burden of proof then

shifts to the taxing authority:           ‘The burden of going forward
                                    -7-
with evidence and of persuasion that its methods would in fact

produce true values then rest[s] with the [taxing authority].’”

In re IBM Credit Corp., 186 N.C. App. 223, 226, 650 S.E.2d 828,

830 (2007) (quoting In re Appeal of S. Ry. Co., 313 N.C. 177,

182, 328 S.E.2d 235, 239 (1985)).

    As this Court has recognized, in order for this Court to

apply its standard of review         on appeal, the Commission must

issue   specific   findings   and    conclusions   explaining   how   it

weighed the evidence to reach its decision using the burden-

shifting framework and how it determined the true value.         See In

re Parkdale America, 212 N.C. App. 192, 197-98, 710 S.E.2d 449,

453 (2011); In re IBM Credit Corp., 201 N.C. App. 343, 349, 689

S.E.2d 487, 491-92 (2009).     In the present case, the Commission

did not do so.

    Here, the Commission made the following three findings of

fact related to its review of the assessment:

          6.   At the hearing, [taxpayers] provided
               evidence that Haywood County overvalued
               their property, and that the value
               assigned to the subject property by the
               County Board should, in their opinion, be
               reduced by thirty percent (30%) to
               recognize the watershed issues associated
               with the property.

          7.   At the hearing, the Commission also heard
               testimonial evidence by Mr. James Messer.
               Mr. Messer testified that Haywood County
                                         -8-
                  did consider the 2011 schedule of values,
                  standards, and rules when assessing the
                  subject property, and that the value
                  assigned   by   the   County   Board  was
                  consistent with the values assessed to
                  similarly    situated   properties   when
                  considering Haywood County’s 2011 general
                  reappraisal.

            8.    Accordingly,     after     hearing    and
                  considering evidence presented by the
                  parties, the Commission determined that
                  the value of $205,100 assigned to the
                  subject property by the County Board did
                  not reflect true value of the property as
                  of January 1, 2011.     Consequently, the
                  Commission determined that the market
                  value of the property was $172,200 as of
                  January 1, 2011.

The Commission then concluded, “[i]n this appeal, [taxpayers]

did    present    evidence     tending    to    show   that      the    county        tax

supervisor used an arbitrary method of valuation; and that the

county’s   assessment        substantially     exceeded    the    true        value    in

money of the property.”

       We hold these findings and conclusions are inadequate to

explain    the    Commission’s     analysis,        frustrating        this    Court’s

review.    Thus, we vacate the final decision and remand to the

Commission.       As we instructed in In re Parkdale America, 212

N.C.    App.     at   198,   710   S.E.2d      at   453,   “[o]n       remand,        the

Commission shall make specific findings of fact and conclusions
                                          -9-
of   law    explaining      how   it   weighed     the   evidence      to    reach   its

conclusions[.]”

                                       True Value

      In the third issue on appeal, Haywood County contends the

evidence     supported      the    County   Board’s      valuation     and     requests

that this Court provide guidance to the Commission as to the

weight     and    sufficiency      that   should    be   afforded      the     evidence

presented.        We decline Haywood County’s request.

      We    simply       note   that    both    sides    presented       evidence     in

support of their argument.             It is the Commission’s role to weigh

and apply that evidence, as well as issue specific findings and

conclusions to permit review by this Court.

                                   III. Conclusion

      For    the    reasons       discussed     above,    we    vacate      the   final

decision     of    the    Commission      and   remand    the   case     for   further

proceedings.

      Vacated and remanded.

      Judges ELMORE and DAVIS concur.

      Report per RULE 30 (e).