Cain v. Custer Cty. Bd. of Equal., 298 Neb. 834

Background

Donald V. Cain, Jr. owned 1,093.93 acres in Custer County used for cattle grazing; ~756 acres were irrigated native grass with center‑pivot systems (no row crops).
In 2012 the county assessor reclassified irrigated grassland as "irrigated cropland," raising Cain’s total assessed value from $734,968 to $1,834,925.
Cain protested but did not receive timely county board notice; he petitioned the Tax Equalization and Review Commission (TERC) under § 77‑1507.01 for an initial determination.
On initial review TERC applied an incorrect "clear and convincing" standard; the Nebraska Supreme Court reversed (Cain I) and remanded for reconsideration under the preponderance standard.
On remand one commissioner had resigned; the successor reviewed the record without a new hearing and the divided TERC panel affirmed most valuations. Cain appealed to the Nebraska Supreme Court.

Issues

Issue	Plaintiff's Argument (Cain)	Defendant's Argument (Custer Cty/Assessor)	Held
Whether TERC’s refusal to permit Cain to argue under the preponderance standard after remand violated due process	Cain argued he was entitled to present argument applying the correct burden to the existing record and that a successor commissioner deciding without oral argument deprived him of process	TERC/Assessor relied on the remand scope and practice; no new evidentiary hearing was requested and oral argument is not a required due process element	Court: Cain waived any Liljestrand‑type due process right by not requesting a new evidentiary hearing; denial of argument was not a due process violation
Whether TERC erred in affirming the assessor’s 2012 valuations of Cain’s irrigated grassland	Cain argued the irrigated grassland was not comparable to irrigated cropland in market area 1 due to Valentine sand, topography, and use; he offered owner testimony and an appraiser’s report valuing the land between $450–$870/acre (opining $870/acre)	Assessor argued regulation defines "irrigated cropland" to include all land where irrigation is used and that she followed statutory/regulatory guidance and prior county practice	Court: Cain’s owner testimony and certified appraiser’s report were competent evidence that rebutted the presumption of correctness; TERC erred in affirming assessor; Court set value at $870/acre and remanded with directions
Whether the Department of Revenue regulation mandating uniform classification of all irrigated land as "irrigated cropland" was binding on the assessor	Cain argued the assessor’s past practice to adjust irrigated grassland valuations and the statutory valuation framework permit consideration of soil, use, and market characteristics	Assessor relied on 350 Neb. Admin. Code ch.14 §002.21B to treat all irrigated land as irrigated cropland	Court: The regulation is a non‑binding guideline (an aid) and does not compel classification when it confers no procedural benefit; assessors must consider statutory factors (soil, use, market characteristics)
Standard and allocation of burden in §77‑1507.01 proceedings	Cain argued remand required TERC to apply preponderance standard (initial review role)	TERC initially applied a higher standard (clear and convincing) but the Supreme Court previously reversed that application	Court: For TERC factfinding under §77‑1507.01 taxpayer’s burden is preponderance; once competent contrary evidence rebuts assessor presumption, valuation is decided on the evidence and taxpayer must prove unreasonableness by preponderance

Key Cases Cited

Cain v. Custer Cty. Bd. of Equal., 291 Neb. 730 (2015) (TERC must apply preponderance standard on initial §77‑1507.01 review)
Liljestrand v. Dell Enters., 287 Neb. 242 (2014) (successor judge generally should not decide based solely on conflicting testimony heard by predecessor where credibility must be assessed)
Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954 (2000) (statutory scheme requires agricultural subclasses be based on soil/related classifications rather than ad hoc market areas)