Fraughton v. Tax Commission , 438 P.3d 961 ( 2019 )


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    2019 UT App 6
    THE UTAH COURT OF APPEALS
    EDWARD J. FRAUGHTON,
    Petitioner,
    v.
    UTAH STATE TAX COMMISSION AND BOARD OF
    EQUALIZATION OF SALT LAKE COUNTY,
    Respondents.
    Opinion
    No. 20170430-CA
    Filed January 10, 2019
    Original Proceeding in this Court
    Edwin S. Wall, Attorney for Petitioner
    Bradley C. Johnson, Attorney for Respondent Board
    of Equalization of Salt Lake County
    JUDGE DAVID N. MORTENSEN authored this Opinion, in which
    JUDGES KATE APPLEBY and RYAN M. HARRIS concurred.
    MORTENSEN, Judge:
    ¶1     In 2015, Edward J. Fraughton challenged the assessed
    value on his residence, claiming that promises made in 1973 by
    unidentified persons from South Jordan City (the City) were key
    to determining the correct value. Fraughton’s challenge was, in
    large part, successful, resulting in just a three percent difference
    in the assessed value from Fraughton’s claimed value. But
    Fraughton refused to stipulate to the new assessed value and
    appealed to the Utah State Tax Commission (the Commission).
    Fraughton now seeks review of the Commission’s final decision
    that Fraughton had neither shown an error in the assessment nor
    provided a sound evidentiary basis for a lower residential
    property value. We are unpersuaded by Fraughton’s arguments
    and decline to disturb the decision of the Commission.
    Fraughton v. Tax Commission
    BACKGROUND
    ¶2     Edward Fraughton purchased an abandoned brick church
    in the City in 1973. Fraughton, an artist, planned to preserve the
    historic building and the 2.41 acres of land on which it sat (the
    Property) for use as his workshop and as a residence for his
    family.
    ¶3     For the 2015 tax year, the Property was assessed at
    $1,163,780. In September 2015, Fraughton appealed that
    assessment to the Salt Lake County Board of Equalization (the
    Board), arguing that the fair market value of the Property was
    $704,480. In a March 2016 hearing, the Board reduced the
    assessed value to $947,000 based on evidence submitted by the
    Salt Lake County Assessor. The Board noted that Fraughton had
    not “provided evidence to establish a value.” Fraughton then
    appealed the Board’s decision to the Commission.
    ¶4     At the Commission hearing in April 2017, Fraughton did
    not provide comparable sales values, an appraisal, or any other
    evidence of the Property’s value. Instead, he argued that the fair
    market value of the Property should be based on a “reasonable
    adjustment” to the purchase price instead of “speculative”
    market value. In contrast, the Commission based its conclusion
    on a report submitted by an appraiser for Salt Lake County. The
    appraiser, relying primarily on comparable land sales, valued
    1.48 acres of the Property at $8.65 per square foot and .93 acres of
    the Property at $4.11 per square-foot, for a total value of $724,155
    in land. The appraiser noted that nearly all of the value consisted
    of the land, with the building valued at only $1,500, for a total
    rounded value of $725,700 for the Property.
    ¶5     The Salt Lake County appraiser also stated that the
    county assessor’s office contacted Fraughton and offered to
    stipulate to a value of $725,700 for the Property. Fraughton had
    requested an assessed value of $704,480 from the Board in
    August 2015, but in October 2015, he declined to stipulate to Salt
    Lake County’s adjusted lower value. These two values differ by
    $21,200, or about three percent.
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    Fraughton v. Tax Commission
    ¶6      The Commission also received evidence at the hearing, in
    the form of a letter from the City, that the Property was zoned—
    current as of October 2015—as RM or “Residential
    Multi-Family” by the City, and it had been in that zoning
    category since at least 1987. Allowed uses in RM zoning include
    various residential dwellings, community and public safety
    services, worship, public utilities, and daycare. Fraughton
    testified that the Property was indeed zoned RM, but he
    contended that this designation meant “Rural Mix,” which
    allowed “a mix of agricultural and residential uses as well as an
    art studio.” He further contended that the City had agreed to
    this special zoning designation when he purchased the property
    in 1973. 1
    ¶7    After considering the evidence presented, the
    Commission set the fair market value of the Property at $725,700.
    The Commission limited its decision to determining the
    Property’s value and did not address the zoning issue.
    Fraughton petitions for judicial review.
    ISSUES AND STANDARDS OF REVIEW
    ¶8    Fraughton brings two claims. First, he contends the
    Commission erred in its determination of the fair market value
    of the Property. When reviewing proceedings before the
    Commission, this court “grant[s] the Commission deference
    concerning its written findings of fact, applying a substantial
    evidence standard on review,” and grants “no deference
    concerning its conclusions of law, applying a correction of error
    standard, unless there is an explicit grant of discretion contained
    1. No exhibit or other evidence corroborates that zone RM means
    anything other than “Residential Multi-Family.” Moreover, there
    is no documentary or testimonial evidence, other than
    Fraughton’s recollection, that the City changed any zoning
    designation of the Property.
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    Fraughton v. Tax Commission
    in a statute at issue before the appellate court.” 
    Utah Code Ann. § 59-1-610
    (1) (LexisNexis 2015); see also Atlas Steel, Inc. v. Utah
    State Tax Comm'n, 
    2002 UT 112
    , ¶ 14, 
    61 P.3d 1053
     (stating that
    the Commission’s findings of fact receive a substantial evidence
    standard of review, but its conclusions of law receive no
    deference).
    ¶9     Second, Fraughton argues that the Commission violated
    the federal and state constitutions by basing the fair market
    value of the Property on comparable property values without
    taking into consideration “non-intrinsic human values,” such as
    open space, history, and aesthetics. This court reviews
    constitutional questions for correctness. State v. Van Dyke, 
    2009 UT App 369
    , ¶ 18, 
    223 P.3d 465
    .
    ANALYSIS
    I. The Commission Correctly Determined the Fair Market Value
    of the Property
    ¶10 When challenging an assessment made on property by
    the Commission, the “protesting taxpayer is required not only to
    show substantial error or impropriety in the assessment, but also
    to provide a sound evidentiary basis upon which the
    Commission could adopt a lower valuation.” Utah Ry. Co. v. Utah
    State Tax Comm’n, 
    2000 UT 49
    , ¶ 6, 
    5 P.3d 652
     (cleaned up). Thus,
    Fraughton, as the protesting taxpayer, has a two-pronged
    burden. He must (1) show that the Commission made a
    substantial error in arriving at the Property’s current value and
    (2) provide a sound evidentiary basis for the Commission to
    change the valuation. See 
    id.
     2 We address each prong in turn.
    2. We note that although Fraughton recognizes the existence of
    both prongs in his brief, he conflates them in his analysis by
    stating that he has “provided evidence that the current value
    contains error.”
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    A.    Fraughton Fails to Show That the Commission Erred in
    Arriving at the Property’s Current Value
    ¶11 On review, Fraughton does not challenge the actual dollar
    value the Commission placed on the Property; rather, he
    challenges the zoning designation. Fraughton contends that the
    City, in an effort to encourage completion of the purchase of the
    Property, agreed in 1973 to rezone, or spot zone, 3 the Property as
    “Rural Mix.” Fraughton argues that his testimony of what
    happened in 1973 shows that there has been an error in the
    zoning designation of the Property. He further argues that the
    Commission should have obtained from the City evidence of the
    Property being zoned Residential Multi-Family in 1973 if the
    Property had, in fact, been zoned Residential Multi-Family at
    that time. Because the City failed to provide such evidence to the
    Commission, Fraughton argues that the Rural Mix zoning
    designation should be grandfathered to the present. He asserts,
    “The zoning as of and from 1973 should not merely be presumed
    based on the [City planner’s] evidence as to the zoning . . . at
    least of 1987.” In a nutshell, Fraughton’s argument is that (1) he
    was told by an unidentified City official that the Property would
    be spot-zoned as Rural Mix in 1973 when he purchased it and (2)
    the Commission has not provided evidence that this putative
    Rural Mix zoning was ever changed.
    ¶12 Fraughton’s argument is a classic red herring in that he is
    attempting to bring the Commission into a dispute that
    essentially involves a disagreement that he has with the City. 4
    3. “Under Utah’s jurisprudence, spot zoning occurs when a
    municipality either grants a special privilege or imposes a
    restriction on a particular small property that is not otherwise
    granted or imposed on surrounding properties in the larger
    area.” Tolman v. Logan City, 
    2007 UT App 260
    , ¶ 15, 
    167 P.3d 489
    .
    4. City records show that the Property was zoned Residential
    Multi-Family from at least 1987. The Commission relied on the
    (continued…)
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    Therefore, Fraughton’s evidence about an oral pledge given in
    1973 is largely irrelevant to the issue before this court. To
    persuade this court, Fraughton needed to provide material
    evidence that a pledge allegedly made in 1973 was acted upon
    and, therefore, that the Commission made a substantial error in
    arriving at the Property’s current value. See Utah Ry., 
    2000 UT 49
    ,
    ¶ 6. Fraughton has failed to do so, and, more importantly, he has
    (…continued)
    City’s zoning designation to establish the assessment value of
    the Property. Fraughton argues that the Commission should
    investigate whether “RM” means “Rural Mix,” as Fraughton
    contends, or “Residential Multi-Family,” as the City indicated in
    its letter. The essence of Fraughton’s argument is that the City
    has applied the incorrect zoning designation to the Property. But
    the Commission’s task is to determine the fair market value of
    the Property, see 
    Utah Code Ann. § 59-2-103
     (LexisNexis 2015),
    not to resolve zoning disputes between residents and
    municipalities. Although the zoning designation is a factor in
    determining fair market value, see Palazzolo v. Rhode Island, 
    533 U.S. 606
    , 625 (2001) (stating that fair market value depends on
    “restrictions on use imposed by legitimate zoning or other
    regulatory limitations”), the Commission’s task is limited to
    assessing and taxing property on the basis of its fair market
    value as of the beginning of the calendar year. See University
    Heights, Inc. v. State Tax Comm'n, 
    364 P.2d 661
    , 662 (Utah 1961)
    (“[T]he authority of the Commission over local assessments is a
    general supervisory one to enable it to assist in keeping the
    values for property tax purposes in counties and localities on a
    fair and equitable basis in relation to each other, rather than to
    suppose it was intended that the Commission would maintain
    active detailed supervision of the appraisals of all of the
    individual properties in the state.”). Fraughton appears to
    assume, but offers no support for his assumption, that the
    Commission has the authority to revise the zoning designations
    made by municipalities.
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    Fraughton v. Tax Commission
    failed to provide evidence that the Property ever was zoned
    otherwise than as identified by the City in 2015.
    ¶13 In contrast, the Commission acted on evidence that the
    Property was zoned as Residential Multi-Family in October 2015
    and that it has been so zoned since at least 1987. If the Property
    was zoned Residential Multi-Family in 1987, the presumption, in
    the absence of evidence of a pre-1987 change to the contrary, is
    that it was zoned Residential Multi-Family in the years before.
    Fraughton fails to explain why his assertion regarding how the
    Property was zoned in 1973 is any more credible than the
    Commission’s evidence of the Property’s 2015 and 1987 zoning
    designation. And as a protesting taxpayer, the evidentiary
    burden is on Fraughton. 
    Id.
    ¶14 Fraughton admits that no change in zoning status can
    occur in the absence of notice and a hearing, implying that the
    Property must currently be zoned Rural Mix because there was
    no notice or hearing regarding a change in the zoning to
    Residential Multi-Family. Yet this is exactly what Fraughton
    infers happened between 1973 and 1987 when he contends that
    the Property’s zoning was improperly changed from Rural Mix
    to Residential Multi-Family. One possible explanation for the
    lack of evidence about notice and a hearing is that the zoning
    change was done illicitly. Yet Fraughton offers no evidence of
    such an illicit change other than his personal, uncorroborated
    contention. A more likely and simpler explanation is that there is
    no evidence of a change in zoning because the zoning
    designation was never changed. In any event, even if the
    Property is not currently zoned correctly, that fact does not
    change the current market value. Ultimately, zoning is a point of
    contention between Fraughton and the City having nothing to
    do with the original assessing authority, the County. Moreover,
    these facts do not inform the question on review, which is
    whether an evidentiary basis exists for the Commission’s
    determination.
    ¶15 Therefore, we conclude that Fraughton’s assertions
    regarding the 1973 zoning status of the Property fail to show that
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    Fraughton v. Tax Commission
    the Commission erred when it relied on evidence of the
    Residential Multi-Family zoning status produced by the City.
    B.    Fraughton Fails to Provide a Sound Evidentiary Basis to
    Support Adopting a Lower Valuation
    ¶16 In addition to showing that the Commission made an
    error in arriving at the value of the Property, Fraughton must
    also provide a sound evidentiary basis for the Commission to
    adopt a lower value. Utah Ry. Co. v. Utah State Tax Comm’n, 
    2000 UT 49
    , ¶ 6, 
    5 P.3d 652
    . Fraughton has not satisfied this prong
    either.
    ¶17 At the hearing before the Commission, Fraughton did not
    put forward any evidence regarding the value of the Property.
    He did not provide comparable sales for the Property, nor did he
    provide an appraisal or any other evidence of its value. Indeed,
    Fraughton explicitly concedes that he “did not submit any
    valuation evidence.” 5
    ¶18 In this regard, Fraughton’s case bears striking similarity
    to Utah Power & Light Co. v. Utah State Tax Commission, 
    590 P.2d 332
     (Utah 1979). There, a utility company protested the
    assessment placed on one of its properties following a hearing
    before the Commission. Id. at 333. After the court determined
    that there had been no error in the method of assessment, it also
    stated that the utility appeared to argue “that it is entitled to a
    reduction of its assessment if it shows any error to its
    disadvantage in the method of evaluation or the computation of
    5. Fraughton may have decided not to press this point before the
    Commission because the value he requested before the Board
    and the value arrived at by Salt Lake County were already very
    close, at least for the purpose of imposing a property tax. Rather,
    Fraughton’s arguments on review center on changing the zoning
    status of the Property to a more restrictive category—a change
    that presumably would have resulted in a lower assessed value.
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    the Commission’s original assessment.” Id. at 335. Because the
    purpose of a proceeding before the Commission is to “determine
    what should be the fair, reasonable and proper valuation and
    assessment, . . . where the taxpayer claims error, [the taxpayer]
    has an obligation . . . to provide a sound evidentiary basis upon
    which the Commission could adopt a lower valuation.” Id. The
    court noted it was “significant here that [the utility company] . . .
    presented no alternative evaluation or appraisal which could be
    subject to critical scrutiny by the Commission.” Id. Likewise,
    here it is not enough for Fraughton to show that there has been
    an error. See Utah Ry., 
    2000 UT 49
    , ¶ 6. He must also provide an
    “alternative evaluation or appraisal” by which the Commission
    could determine “fair, reasonable and proper valuation and
    assessment” of the Property. See Utah Power & Light, 590 P.2d at
    335; see also Utah Ry., 
    2000 UT 49
    , ¶ 6.
    ¶19 Thus, we conclude that Fraughton also failed to meet the
    second prong of his burden: showing a sound evidentiary basis
    to the Commission for arriving at a lower value for the Property.
    II. Fraughton’s Constitutional Claim Was Inadequately Briefed
    ¶20 We do not reach the substance of Fraughton’s
    constitutional claim because this issue has not been properly
    briefed. “We have long held that we have discretion to not
    address an inadequately briefed argument. Rather, a party must
    plead his claims with sufficient specificity for this court to make
    a ruling on the merits. We will not assume a party’s burden of
    argument and research.” Angel Inv'rs, LLC v. Garrity, 
    2009 UT 40
    ,
    ¶ 35, 
    216 P.3d 944
     (cleaned up). “We accordingly decline to
    address [an] inadequately briefed issue.” ASC Utah, Inc. v. Wolf
    Mountain Resorts, LC, 
    2013 UT 24
    , ¶ 16, 
    309 P.3d 201
    .
    ¶21 An adequate brief provides “meaningful legal analysis”
    and “fully identifies and analyzes the issues with citation to
    relevant legal authority.” State v. Hawkins, 
    2016 UT App 9
    , ¶ 60,
    
    366 P.3d 884
    ; see also Utah R. App. P. 24(a)(8) (“The argument
    must explain, with reasoned analysis supported by citations to
    legal authority and the record, why the party should prevail on
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    Fraughton v. Tax Commission
    appeal.”). “A brief is inadequate when it merely contains bald
    citations to authority without development of that authority and
    reasoned analysis based on that authority.” Smith v. Four Corners
    Mental Health Center, Inc., 
    2003 UT 23
    , ¶ 46, 
    70 P.3d 904
     (cleaned
    up). “Under this standard, [Fraughton] inadequately briefed this
    claim. Accordingly, he fails to carry his burden of persuasion on
    [judicial review].” See Hawkins, 
    2016 UT App 9
    , ¶ 60.
    ¶22 Fraughton argues in his brief that taxing the Property
    based on its fair market value is “neither fair, equitable, or just.”
    Instead of a fair market value approach, he argues that “both
    state and federal constitutional principles” require the
    “consideration of ‘non-intrinsic human values’” in determining a
    property’s value. In support of this proposition, Fraughton
    claims that the “Declaration of Independence and the United
    States Constitution were written to establish a possible means for
    achieving humanity’s highest form for civil human
    engagement.” “[T]hese meaningful, lofty, fair and noble
    principles,” Fraughton asserts, require the State of Utah to honor
    the individual’s right to possess and protect property. Therefore,
    Fraughton concludes, “Utah’s method of taxing real estate based
    solely on ‘fair market value,’ is neither fair, equitable or just. It
    entirely discriminates against any ‘non-intrinsic human values.’
    As such, the tax law as applied is unconstitutional.”
    ¶23 In his brief, Fraughton cites only one constitutional
    provision—Article 1, Section 1 of the Utah Constitution—as he
    makes his argument, and this he does in passing. 6 He fails to
    explain how the Commission’s fair market valuation method
    6. This Article states: “All men have the inherent and inalienable
    right to enjoy and defend their lives and liberties; to acquire,
    possess and protect property; to worship according to the
    dictates of their consciences; to assemble peaceably, protest
    against wrongs, and petition for redress of grievances; to
    communicate freely their thoughts and opinions, being
    responsible for the abuse of that right.” Utah Const. art. I, § 1.
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    Fraughton v. Tax Commission
    violates this provision. He cites no case law supporting his
    position that fair market valuation is unconstitutional. Nor does
    he attempt to explain why the fair market value standard is
    unconstitutional when the Utah Constitution itself states that
    “all tangible property in the State . . . shall be . . . assessed at a
    uniform and equal rate in proportion to its fair market value.”
    Utah Const. art. XIII, § 2.
    ¶24 Fraughton’s broad statements are simply not enough to
    make a cogent argument concerning the constitutional fairness,
    equity, and justness of the fair market value standard. And “we
    will not exercise appellate review based on our best guess as to
    the subject of the appeal.” ASC Utah, 
    2013 UT 24
    , ¶ 15. As our
    supreme court has “repeatedly noted, we are not a depository in
    which a party may dump the burden of argument and research.”
    Four Corners Mental Health, 
    2003 UT 23
    , ¶ 46 (cleaned up).
    ¶25 Therefore, we decline to further address Fraughton’s
    constitutional arguments concerning the fair market value
    standard for property tax determinations because this issue has
    been inadequately briefed.
    CONCLUSION
    ¶26 Fraughton’s arguments are unpersuasive. Fraughton has
    not shown that there was an error in the assessment of the
    Property, nor has he presented a sound evidentiary basis for a
    lower value on the Property. Finally, we decline to address
    Fraughton’s constitutional arguments concerning fair market
    value because they are inadequately briefed. For the foregoing
    reasons, we decline to disturb the decision of the Commission.
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