Cain v. Custer Cty. Bd. of Equal., 906 N.W.2d 285

Background

Donald V. Cain Jr. owned 1,093.93 acres in Custer County used for cattle grazing; about 756 acres were irrigated native grass (not row crops) using center-pivot systems installed in 2006.
For 2012 the county assessor reclassified irrigated grassland as irrigated cropland and raised Cain’s assessed value from $734,968 to $1,834,925 (≈250% increase).
Cain protested but, because he received no timely county hearing, petitioned the Tax Equalization and Review Commission (TERC) under Neb. Rev. Stat. § 77-1507.01; a divided TERC panel affirmed most valuations on the record without a new evidentiary hearing after remand.
On initial appeal (Cain I), the Nebraska Supreme Court held TERC had applied the wrong burden (clear-and-convincing) and remanded for reconsideration under the preponderance standard; one commissioner who heard evidence resigned before remand proceedings.
On remand a different commissioner reviewed the existing record (without taking new testimony) and again affirmed most valuations; Cain appealed to the Nebraska Supreme Court.
The Supreme Court found the assessor’s uniform classification rule was not mandatory, that Cain and his appraiser offered competent evidence showing the irrigated grassland was more comparable to lower-valued market areas, and concluded the TERC erred in affirming the assessor’s valuations.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether TERC’s refusal to permit Cain to argue application of the preponderance standard after remand violated due process	Cain argued he was entitled to argue how the lower standard applied to the existing record	County/TERC relied on remand scope and record review; no request for new evidentiary hearing	Waived; no due process violation — oral argument not required and Cain did not seek a new hearing (Liljestrand inapplicable because credibility assessment of live witnesses not at issue)
Whether TERC erred by applying an improper evidentiary standard or otherwise failing to follow remand instructions	Cain argued TERC continued to treat the assessor’s valuation as presumptively unrebutted and required too much to overturn it	TERC/Assessor relied on presumptions of correctness and agency classification guidance	TERC had used an erroneous approach; once competent contrary evidence existed, presumption disappeared and TERC should have resolved value by weighing evidence under preponderance standard
Whether the assessor lawfully and reasonably classified irrigated native grass as irrigated cropland for valuation purposes	Cain argued irrigated native grass (Valentine sand, highly erodible) is not comparable to irrigated cropland and should be valued like market areas 2–3 or as grassland	Assessor relied on administrative definition treating all land where irrigation is used as irrigated cropland and on established market-area valuations	The administrative definition is an interpretive aid not binding here; competent appraisal and owner testimony showed Cain’s irrigated grassland resembled lower-valued areas — court found assessor’s valuation was grossly excessive and ordered valuation adjusted to $870/acre
Remedy: whether the court should remand for further proceedings or direct a valuation	Cain sought relief lowering the valuation; TERC declined new hearing	TERC argued it had complied with remand limits and affirmed valuations on record	Court reversed TERC and directed valuation to $870 per acre (total $951,719.10) for 2012 and remanded with directions to the TERC/assessor to set taxes accordingly

Key Cases Cited

Cain v. Custer Cty. Bd. of Equal., 291 Neb. 730, 868 N.W.2d 334 (2015) (prior Supreme Court decision holding TERC misapplied burden of proof on initial review)
Liljestrand v. Dell Enters., 287 Neb. 242, 842 N.W.2d 575 (2014) (successor judge may not decide based on conflicting live-evidence testimony without new hearing)
Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954, 613 N.W.2d 810 (2000) (statutory scheme for classifying and valuing agricultural land; subclasses based on soil classification)
Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802 (2008) (administrative decisions must be supported by competent evidence and not be arbitrary)