In re King

• Court: Court of Appeals of North Carolina
• Decided: August 5, 2014
• Docket: 13-1314
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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