The Silver Creek Association, Inc. v. Matthew Irby, in this official capacity as State Tax Commissioner of the State of West Virginia, and Johnny Pritt, in his official capacity as Assessor of Pocahontas County, West Virginia

CourtIntermediate Court of Appeals of West Virginia
DecidedNovember 14, 2024
Docket23-ica-372
StatusPublished

This text of The Silver Creek Association, Inc. v. Matthew Irby, in this official capacity as State Tax Commissioner of the State of West Virginia, and Johnny Pritt, in his official capacity as Assessor of Pocahontas County, West Virginia (The Silver Creek Association, Inc. v. Matthew Irby, in this official capacity as State Tax Commissioner of the State of West Virginia, and Johnny Pritt, in his official capacity as Assessor of Pocahontas County, West Virginia) is published on Counsel Stack Legal Research, covering Intermediate Court of Appeals of West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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The Silver Creek Association, Inc. v. Matthew Irby, in this official capacity as State Tax Commissioner of the State of West Virginia, and Johnny Pritt, in his official capacity as Assessor of Pocahontas County, West Virginia, (W. Va. Ct. App. 2024).

Opinion

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA

FILED Fall 2024 Term November 14, 2024 ____________________________ released at 3:00 p.m. ASHLEY N. DEEM, CHIEF DEPUTY CLERK INTERMEDIATE COURT OF APPEALS No. 23-ICA-372 OF WEST VIRGINIA

____________________________

THE SILVER CREEK ASSOCIATION, INC, ET AL., Petitioners Below, Petitioners

v.

MATTHEW IRBY, in his official capacity as State Tax Commissioner of the State of West Virginia, AND JOHNNY PRITT, in his official capacity as Assessor of Pocahontas County, West Virginia, Respondents Below, Respondents. ___________________________________________________________

Appeal from the Circuit Court of Pocahontas County The Honorable Robert E. Richardson, Judge Civil Action No. CC-38-2020-P-31

REVERSED ___________________________________________________________

Submitted: September 17, 2024 Filed: November 14, 2024

Mark A. Sadd, Esq. Patrick Morrisey, Esq. Lewis Gianola, PLLC Cassandra L. Means-Moore, Esq. Charleston, West Virginia Seth E. Harper, Esq. Counsel for Petitioners Office of the Attorney General Charleston, West Virginia Counsel for Respondent Matthew Irby

Robert P. Martin, Esq. Marlinton, West Virginia Counsel for Respondent Johnny Pritt JUDGE CHARLES O. LORENSEN delivered the Opinion of the Court. LORENSEN, JUDGE:

Petitioners Russell D. and Cinnamon M. Jessee, Jeffrey S. and Drenna

Banks, Malcolm J. and Colleen K. Cooper, Duval Lee and Dorthea A. Fuqua, Raymond

Bruce James and Harriet Hawks, Louis J. Constanzo, David and Linda Christopher,

William C. White, II, William R. and Mary L. Terrini, Michael D. and Jennifer L. Cajohn,

and Kevin R. Banning (individually, a “Petitioner Owner” and collectively “Petitioner

Owners”) and Petitioner The Silver Creek Association, Inc. (the “Association”) appeal a

July 24, 2023, order of the Circuit Court of Pocahontas County granting summary judgment

to Respondents, Matthew Irby, West Virginia State Tax Commissioner, and Johnny Pritt,

Pocahontas County Assessor. The circuit court upheld the Tax Commissioner’s ruling that

Petitioner Owners’ condominium units did not qualify as Class II properties1 but instead

were properly classified as Class III for ad valorem property tax purposes for property tax

year 2021.

After careful review of the briefs, the appendix record, the arguments of the

parties, and the applicable legal authority, we disagree with the circuit court’s affirmation

1 Reflecting the property classification system established by Article X, Section 1 of the West Virginia Constitution, the Legislature provides the scheme under which taxable property is classified in Classes I–IV. See W. Va. Code § 11-8-5 (1961). Classes II and III are at issue in this case. Class II properties are owned, used, and occupied by the owner exclusively for residential purposes, and Class III properties are all properties outside a municipality, other than Class I or Class II property. Class III property is subject to a higher tax rate than Class II property. 1 of the Tax Commissioner’s Property Tax Ruling 21-16 which found that the West Virginia

Uniform Common Interest Act (“Uniform Act”) prohibits “split ticket” classifications and

assessments of Petitioner Owners’ condominium units where, as here, Petitioner Owners

use their units exclusively as owner-occupied residences, but a part of the common

elements of the condominium are used for commercial purposes. Accordingly, we reverse

the circuit court’s July 24, 2023, order and find that property comprising each Petitioner

Owner’s units is entitled to Class II property classification for property tax year 2021.

I. FACTUAL AND PROCEDURAL HISTORY

The Lodge at Silver Creek (“Lodge”) on Snowshoe Mountain in Pocahontas

County, West Virginia, is a condominium building containing 239 residential units, eight

commercial units, and common elements.2 The Lodge is a common interest community

subject to the Uniform Act, and the Association is the common interest community’s unit

owners’ association under the Uniform Act. Approximately ten percent of the Lodge’s

residential units are used by their owners exclusively for their own residential purposes and

not held out for rental to third-party guests. Petitioner Owners are among this group of unit

owners who do not hold their condominium units out for rent to third-party guests.

2 “‘Common elements’ means… all portions of the common interest community other than the units….” W. Va. Code § 36B-1-103(4) (1998).

2 For property tax purposes, the units in the Lodge that are held for rental to

third-party guests have been and continue to be considered Class III properties because

their owners are not individuals who own, use, and occupy their units exclusively for their

own residential purposes. However, prior to the events discussed below, the Petitioner

Owners’ units were classified as Class II properties as they were not rented and were

owned, used, and occupied exclusively for Petitioner Owners’ own residential purposes.

This case concerns the classification, assessment, and taxation of the Petitioner Owners’

units because a portion of the Lodge, which recently became a part of the Lodge’s common

elements, was used to operate a commercial bar and grill called “The Locker Room” open

to the public, generally.

The Association litigated with Snowshoe Mountain Inc. (“Snowshoe”)

concerning the ownership of a commercial area in the Lodge now used as The Locker

Room (the “Commercial Space”). Snowshoe claimed that the Commercial Space was not

a part of the common interest community but was rather owned separately by Snowshoe

outside the scope of the common interest community. Snowshoe and the Association

reached a settlement in 2016 pursuant to which Snowshoe transferred the Commercial

Space to the Association and the Commercial Space was expressly included as common

interest community property owned by the Association in a restated declaration. Prior to

the settlement, the Commercial Space was, for ad valorem tax purposes, separately

classified, assessed, and billed to Snowshoe.

3 After the settlement, the Pocahontas County Assessor classified, assessed,

and billed the Association separately for the Commercial Space. However, on February 14,

2018, the Association and the Pocahontas County Assessor jointly requested a property tax

ruling from the Tax Commissioner pursuant to West Virginia Code § 11-3-24a (2010)

concerning whether the Commercial Space should be classified, assessed, and billed to the

Association or to the unit owners. The Tax Commissioner issued Property Tax Ruling 18-

49 on February 26, 2018, finding that the Association was a successor declarant of the

condominium and that the Association should be taxed separately for the Commercial

Space, which the Tax Commissioner considered a condominium unit. The Association

appealed Property Tax Ruling 18-49 to circuit court.

On January 4, 2019, the Circuit Court of Pocahontas County reversed

Property Tax Ruling 18-49 and found that the Association was not a successor declarant

under the Uniform Act, and that the Commercial Space was not a unit but instead the

Commercial Space constituted a common element of the common interest community that,

pursuant to West Virginia Code § 36B-1-105(b)(2) (1986), could not be classified,

assessed, and billed separately to the Association.

Based upon the 2019 circuit court order, the Pocahontas County Assessor

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The Silver Creek Association, Inc. v. Matthew Irby, in this official capacity as State Tax Commissioner of the State of West Virginia, and Johnny Pritt, in his official capacity as Assessor of Pocahontas County, West Virginia, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-silver-creek-association-inc-v-matthew-irby-in-this-official-wvactapp-2024.