In re King ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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.
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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
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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
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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
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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
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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
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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
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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
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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).