Swanson v. Union County Assessor

• Court: Oregon Tax Court
• Decided: January 11, 2012
• Docket: TC-MD 110108D
• Status: Unpublished

Opinion

IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax

ROD C. SWANSON ) and FAY J. STEIN, ) ) Plaintiffs, ) TC-MD 110108D ) v. ) ) UNION COUNTY ASSESSOR, ) ) Defendant. ) DECISION

Plaintiffs appeal the real market value of residential property identified as

Account 9400 (subject property) for the 2007-08, 2008-09, 2009-10, and 2010-11 tax

years. A trial was held on October 25, 2011, via telephone at the Oregon Tax Court,

Salem, Oregon. Rod Swanson (Swanson) and Fay Stein (Stein) testified on behalf of

Plaintiffs. Linda Hill (Hill), Union County Assessor, testified on Defendant‟s behalf.

Plaintiffs‟ Exhibits 1 and 2 and Defendant‟s Exhibits A through D were received

without objection.

I. STATEMENT OF FACTS

The subject property is a 1,782 square foot, residential home located on a 0.75

acre parcel. (Def‟s Ex A-1.) The subject property possesses three sheds, two decks, and

a driveway. (Id.) The subject property is located in a semi-remote rural area of Union

County, referred to as Telocaset, which is zoned as a rural residential community. (Id.)

The subject property is surrounded by specially-assessed farm land consisting of parcels

of range land that are primarily used for grazing. (Id.) Stein testified that Plaintiffs

purchased the subject property 28 years ago.

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DECISION TC-MD 110108D 1 In 2007, the Elkhorn Wind Farm was completed, consisting of 63 towers, of

which several towers are located within one mile of the subject property. (Id.) Swanson

testified that the wind turbines are as close as 1,500 feet to the subject property. Swanson

testified that the video provided to the court by Plaintiffs accurately shows the subject

property before and after the installation of the wind turbines. The video, Swanson

stated, displays both the close proximity and the high number of wind turbines

surrounding the subject property.

Stein testified that ever since the installation, Plaintiffs have experienced

continuous negative physical symptoms as a result of the wind turbines. Stein testified

that these symptoms have included headaches, insomnia, decreased concentration, and

vertigo. Stein also testified that these symptoms abate when she leaves the subject

property, a phenomenon Stein attributes to the lack of proximity to the wind turbines,

which she considers to be the primary factor contributing to Plaintiffs‟ symptoms.

Plaintiffs submitted as evidence a book by Nina Pierpont, MD, PhD, titled “Wind

Turbine Syndrome: A Report on a Natural Experiment” (Pierpont book). Plaintiffs

highlighted pages 1-2, 12, 193-205, 239, 241, 252-55, 260-70, and 293-94 in the Pierpont

book. Plaintiffs testified that the Pierpont book establishes the negative health effects

upon people living in close proximity to wind turbines.

Swanson testified that he believed both the Pierpont book and the video to be self-

explanatory of the situation. Stein testified that Plaintiffs also believe the wind turbines

pose additional dangers beyond Plaintiffs‟ symptoms due to the oil stored in the wind

turbine towers, which could potentially leak out and poison the local water supply. Stein

testified that such leakage had occurred previously from the wind turbines.

DECISION TC-MD 110108D 2 The subject property‟s real market value on the tax roll as of the January 1, 2010,

assessment date was $80,290. (Ptfs‟ Compl at 2.) Plaintiffs filed a petition to appeal the

subject property‟s real market value to the Board of Property Tax Appeals (BOPTA),

which on February 17, 2011, upheld the real market value of $80,290. (Id.) Plaintiffs

timely appealed BOPTA‟s order. (Ptfs‟ Compl at 1.)

At trial, Plaintiffs requested a 2010-11 real market value of $0.00. Stein testified

that the subject property has never been listed for sale since the installation of the wind

turbines in 2007. Stein testified that while Plaintiffs were once offered $125,000 for the

subject property 18 years ago, Plaintiffs would not even give the subject property away

now. When asked why by Hill, Stein testified that Plaintiffs believe the property to have

no value due to the dangers posed by the wind turbines and that they could not impose

the current situation upon an innocent family. Stein testified that the Pierpont book

shows that both children and the elderly suffer wind turbine syndrome to a greater degree

than healthy adults and this precludes Plaintiffs from either selling or giving away the

property.

Stein also testified that they contacted an independent assessor who offered to

assess the subject property for free but later informed Plaintiffs that there was no

precedent for which to evaluate the subject property. Swanson testified that this was

because there is a “stigma” against admitting that “green energy” devalues properties.

(See Ptfs‟ Compl at 4.)

At trial, Plaintiffs also requested a refund of property tax for the 2007-08, 2008-

09, and 2009-10 tax years. Plaintiff also requested that all property tax be suspended for

subsequent years after the 2010-11 tax year until “the surrounding wind turbines are

DECISION TC-MD 110108D 3 removed.” Stein testified that the Tax Court should provide precedent and leave the

message that county officials cannot accept “bribes from energy companies,” “citizens

matter” and “corrupt” counties and corporations should be “made to pay for their

actions.” Plaintiffs also stated that their requested refund and suspension of property tax

would act as reimbursement for county actions they believe to be “criminal.” (Ptfs‟

Compl at 4.)

Hill determined a real market value of $80,290 and requested that the roll value

be sustained for the 2010-11 tax year. (Def‟s Answer at 1; Def‟s Ex A-1.) Hill testified

that the subject property was last appraised in 2007, along with the entire southern

portion of Union County. (See Def‟s Ex. A-1.) At that time, Hill testified, the exterior of

the property was inspected by a county appraiser. (See id.) Hill stated that since 2007,

the property has been subjected to value adjustments guided by Union County‟s annual

ratio study. (See id.) Hill testified that on July 12, 2011, the property was viewed again

from the road by Hill and Bart Dickison, Union County Chief Appraiser. (See id.) Hill

testified that pictures were taken and submitted to the court. (See Def‟s Ex C-1, C-2.)

Hill testified that a market sales analysis was not prepared for the property due to

the lack of sales in the surrounding area. (See Def‟s Ex A-1.) Hill testified that other

areas in the county were not considered for comparable sales because of differences in

regional influences and the fact that other areas were not close in proximity to a wind

farm. (See id.) Hill testified that the Ernest Orlando Lawrence Berkeley National

Laboratory report titled “The Impact of Wind Power Projects on Residential Property

DECISION TC-MD 110108D 4 Values in the United States: A Multi-Site Hedonic Analysis,” dated December 2009, on

page 75, shows no evidence of a decline in property values for properties either within

view or proximity to wind facilities. (Def‟s Exs A-1, A-2, D-75.)

Hill also testified that without any other objective market data suggesting that the

subject property has suffered a loss in value, such as listing the property for sale, the roll

value should be sustained. Swanson argued that it was common sense that even if

Plaintiffs put their “home up for sale” on the open market, no one would purchase a home

surrounded by wind farms when other alternatives existed.

Hill also requested that Plaintiffs‟ request for a property tax refund for tax years

2007-08, 2008-09, and 2009-2010 be dismissed. (Def‟s Answer at 1.)

II. ANALYSIS

A. Tort Claims

Plaintiffs testified that they believe the subject property‟s value to be $0.00

because of corruption and criminal acts conducted by county officials and by the nearby

installation of the wind turbine farm that resulted in damage to their physical and mental

health.

A tort is defined as “a wrongful act for which a civil action will lie except one

involving a breach of contract * * * [.]” Webster’s Third New Int’l Dictionary 2413

(unabridged ed 2002).

The Oregon Tax Court has jurisdiction over “all questions of law and fact arising

under the tax laws of this state.” ORS 305.410(1)1. However, as held by the Oregon

Supreme Court: “[a] tort is not a tax matter simply because the tortfeasors are tax

1 All references to the Oregon Revised Statutes (ORS) and the Oregon Administrative Rules (OARs) are to 2009.

DECISION TC-MD 110108D 5 assessors. Plaintiff‟s tax claims are unaffected by whether the assessors committed any

torts. Even if defendants maliciously harassed plaintiff, the assessment may be correct.”

Sanok v. Grimes, 294 Or 684, 697-98 n. 21, 662 P2d 693 (1983). Furthermore, the

Oregon Supreme Court observed that because all cases at the Tax Court are heard without

a jury, “claims such as torts where there is a right to jury trial are not normally within the

jurisdiction of the tax court.” Id. at 698 n. 21.

The Oregon Tax Court has also addressed efforts to litigate tort claims in the tax

court. In Masse v. Dep’t of Rev., 18 OTR 100, 107-08 (2004), the court dismissed a

taxpayer‟s claim for compensatory and punitive damages for not arising out of tax law.

In Masse, the court held that facts giving rise to a tax claim are distinct from facts that

give rise to a tort claim. Id.

The Tax Court can only consider questions of law and fact arising under the tax

laws of this state, which in the current case, involves the real market value of the subject

property. While taxpayers argue that these alleged acts have reduced the real market

value of their property, these are actually alleged damages and do not address the

question of whether or not the current real market value on the tax roll is correct.

Damages in claims stemming from the alleged malfeasance of public officials and the

alleged ill health effects caused by nearby industry are questions of tort and not tax law.

These issues cannot be litigated in the Tax Court.

B. Authority of the Tax Court to Order Valuation Changes

The Tax Court may only order valuation changes when the statutory requirements

of ORS 305.288 are satisfied. First, the Tax Court may only “order a change or

correction applicable to a separate assessment of property to the assessment and tax roll

DECISION TC-MD 110108D 6 for the current tax year or for either of the two tax years immediately preceding the

current tax year, or for any or all of those tax years ***.” ORS 305.288(1). Second, the

Tax Court may only issue a change in value for the property when it “is asserted in the

request and determined by the Tax Court that the difference between the real market

value of the property for the tax year and the real market value on the assessment and tax

roll for the tax year is equal to or greater than 20 percent.” ORS 305.288(1)(b). Third,

the Tax Court may only order a change in value for the property if the “taxpayer has no

statutory right of appeal remaining and the Tax Court determines that good and sufficient

cause exists for the failure by the assessor or taxpayer to pursue the statutory right of

appeal.” ORS 305.288(3). “Good and sufficient cause” is defined by ORS 305.288(5)(b)

as:

(A) *** an extraordinary circumstance that is beyond the control of the taxpayer, or the taxpayer's agent or representative, and that causes the taxpayer, agent or representative to fail to pursue the statutory right of appeal; and (B) Does not include inadvertence, oversight, lack of knowledge, hardship or reliance on misleading information provided by any person except an authorized tax official providing the relevant misleading information.

The current tax year is defined by ORS 306.115 as “the tax year in which the need

for the change or correction is brought to the attention of the department.”

Plaintiffs appealed the real market value of the subject property for the

2010-11 tax year and requested the refund of property taxes for the 2007-08,

2008-09 and 2009-10 tax years. Plaintiffs also requested that the court suspend

all property taxes for all subsequent years after the 2010-11 tax year. The current

tax year in question in this case is the 2010-11 tax year.

DECISION TC-MD 110108D 7 First, this court lacks jurisdiction to consider either a change to the

2007-08 real market value or to issue a refund in property taxes. Because the

2007-08 tax year is more than two years prior to the current 2010-11 tax year, the

court is statutorily barred from addressing this tax year.

Second, this court lacks jurisdiction to consider either a change to the

2008-09 or 2009-10 real market value or to issue a refund in property tax as a

result. Even though Plaintiffs properly appealed the 2010-11 real market value to

BOPTA and subsequently appealed BOPTA‟s order to the Tax Court, Plaintiffs

did not follow this procedure for either the 2008-09 or 2009-10 tax years. If the

taxpayers fail to pursue their statutory right of appeal, this court can consider

whether there was “good or sufficient cause” for failure to do so, and if finding

so, the court may allow Plaintiffs‟ claim. In this case, however, Plaintiffs made

no argument as to why they failed to properly pursue their statutory right of

appeal for the 2008-09 and 2009-10 tax years. Because there was no “good or

sufficient cause” provided by Plaintiffs, and because Plaintiffs did not pursue their

statutory right of appeal, this court may not order a change to the 2008-09 and

2009-10 real market values.

Third, this court has jurisdiction to consider a change to the 2010-11 real

market value. As explained previously, Plaintiffs properly appealed the 2010-11

real market value to BOPTA and then to the Tax Court. Because the 2010-11

appeal satisfies the statutory requirements, the Tax Court may consider a change

to the 2010-11 real market value.

DECISION TC-MD 110108D 8 Fourth, this court does not have jurisdiction to consider a change to tax

years following the 2010-11 tax year. The statutory language is clear; the court

may only consider property tax appeals for either the current tax year, one of the

previous two years, or any and all of those years if the statutory requirements are

met. This court held that “[i]n requiring that taxpayers be „aggrieved‟ under ORS

305.275, the legislature intended that the taxpayer have an immediate claim of

wrong. It did not intend that taxpayers could require the expenditure of public

resources to litigate issues that might never arise.” Kaady v. Dept. of Rev., 15

OTR 124, 125 (2000). Furthermore, the Oregon Supreme Court has held that a

court may only rule on issues involving “present facts as opposed to a dispute

which is based on future events of a hypothetical issue.” Pendleton School Dist.

16R v. State of Oregon, 345 Or 596, 604-05, 200 P3d 133 (2009) (citing Brown v.

Oregon State Bar, 293 Or 446, 449, 648 P2d 1289 (1982)). While Plaintiffs state

that they want all future property taxes suspended “until” the wind turbines are

removed, this court may not make findings of fact and issue rulings on the basis

of hypothetical future events. Because of these reasons, this court does not have

jurisdiction to consider changes to any tax years after the current tax year of

2010-11.

C. Real Market Value

At issue in this case is the subject property‟s real market value for tax year 2010-

11. Real market value is defined in ORS 308.205(a) as:

“[T]he amount in cash that could reasonably be expected to be paid by an informed buyer to an informed seller, each acting without compulsion in an arm‟s-length transaction occurring as of the assessment date for the tax year.”

DECISION TC-MD 110108D 9 The assessment date for the 2010-11 tax year was January 1, 2010. ORS 308.007(2).

The legislature requires real market value to be determined in all cases by “methods and

procedures in accordance with rules adopted by the Department of Revenue.” ORS

308.205(2). There are three methods of valuation that are used to determine real market

value: 1) the cost approach, 2) the sales-comparison or comparable sales approach, and 3)

the income approach. Allen v. Dept. of Rev., 17 OTR 248, 252 (2003). See also OAR

150-308.205-(A)(2)(a) (stating that all three approaches must be considered, although all

three approaches may not be applicable to the valuation of the subject property). Because

the subject property is a residence and not an income producing property, the income

approach is inapplicable. Neither party considered the cost approach.

However, while Plaintiffs do not appear to have considered the comparable sales

approach, Defendant considered, yet did not provide, a comparable sales approach to

support Defendant‟s real market value. Hill testified that there were several reasons for

not providing a comparable sales analysis. First, the county performed a reassessment of

the subject property in 2007 and the subject property‟s real market value has been

adjusted annually using the county‟s annual ratio study. Second, there were no

comparable sales in the nearby area that could be included, particularly because no other

sales were for properties located near wind turbines. Third, the subject property itself has

not been offered for sale or exposed to the real estate market. Fourth, the County

Assessor could not find any other sales data to indicate a loss of value for the subject

property, and Hill testified that her conclusion is supported by the “Impact of Wind

Power Projects on Residential Property Values in the United States” report.

DECISION TC-MD 110108D 10 As the party seeking affirmative relief, Plaintiffs bear the burden of proving that

the subject property‟s real market value is incorrect on the tax roll. ORS 305.427.

Plaintiffs must establish their claim “by a preponderance of the evidence, or the more

convincing or greater weight of evidence.” Schaefer v. Dept. of Rev., TC No 4530 at 4

(July 12, 2001) (citing Feves v. Dept. of Revenue, 4 OTR 302 (1971)). Plaintiffs must

also provide competent evidence of the real market value of their property, as criticism of

the county‟s position is not sufficient to satisfy Plaintiffs‟ burden of proof. Woods v.

Dept. of Rev., 16 OTR 56, 59 (2002) (citing King v. Dept. of Rev., 12 OTR 491 (1993)).

Competent evidence can consist of arm‟s-length sales of property similar to the subject

property in age, quality, size, and location in order to reach a correct real market value for

the subject property. Hausler v. Multnomah County Assessor, TC-MD No 090237C at 2-

3 (Dec 4, 2009).

Plaintiffs must present the greater weight of evidence to support their requested

real market value reduction. Plaintiffs‟ evidence in support of their requested real market

value reduction is inconclusive. When the “evidence is inconclusive or unpersuasive, the

taxpayer will have failed to meet his burden of proof ***.” Reed v. Dept. of Rev., 310 Or

260, 265, 798 P2d 235 (1990). Plaintiffs have failed to carry their burden of proof.

Even though the burden has not shifted under ORS 305.427, the court has

jurisdiction to determine the “real market value or correct valuation on the basis of the

evidence before the court, without regard to the values pleaded by the parties.” ORS

305.412. Defendant provided sufficient information to support the subject property‟s real

market value for the 2010-11 tax year.

DECISION TC-MD 110108D 11 III. CONCLUSION

After careful consideration of the testimony and evidence, the court concludes

that the subject property‟s real market value as of the assessment date was the value on

the tax roll. Now, therefore,

IT IS THE DECISION OF THIS COURT that the 2010-11 real market value of

property identified as Account 9400 was $80,290.

FURTHERMORE, IT IS THE DECISION OF THIS COURT that Plaintiffs‟

appeal of the subject property‟s real market value for tax years 2007-08, 2008-09, and

2009-10 claims is dismissed.

FURTHERMORE, IT IS THE DECISION OF THIS COURT that Plaintiffs‟

request that all future property taxes to be suspended is dismissed.

Dated this day of January 2012.

JILL A. TANNER PRESIDING MAGISTRATE

If you want to appeal this Decision, file a Complaint in the Regular Division of the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563; or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.

Your Complaint must be submitted within 60 days after the date of the Decision or this Decision becomes final and cannot be changed.

This document was signed by Presiding Magistrate Jill A. Tanner on January 11, 2012. The Court filed and entered this document on January 11, 2012.

DECISION TC-MD 110108D 12