Spann Family 2007 Rev Trust v. Crook County Assessor
TC-MD 170329G
| Or. T.C. | May 15, 2018Background
- Brasada Ranch luxury resort cabins (two- and three-bedroom) had personal property (furnishings) omitted from tax rolls for years dating back to 2011; ten consolidated cases were tried together.
- County added personal property to tax roll in 2017 using a component cost approach with a straight 10% annual depreciation and initial 2006 values set by assessor staff.
- Taxpayers challenged assessed values and offered alternative valuations: a procurement estimate (non-testifying), an auctioneer’s liquidation-based opinion (Hulick), taxpayer-prepared component estimates (Pratt), and a 2010 sale of a three-bedroom cabin’s assembled furnishings for $14,000.
- County relied on buyer questionnaires, paired-sale (furnished vs. unfurnished) analyses using foreclosure sales, and reported replacement-purchase amounts to support much higher contributory values.
- Court focused on highest-and-best-use (HBU) analysis (assemblage v. component valuation), weighed reliability of evidence, and determined the best market evidence supported a $14,000 value for a three-bedroom cabin’s furnishings for tax years 2011–12 through 2017–18.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of real market value (assemblage v. component) | Taxpayers argued component-by-component liquidation values (auction/market listings) show low values. | County valued furnishings as assembled (contributory to furnished cabin sales) via questionnaires and paired sales. | HBU is continued use as assembled; component-only valuations given little weight. |
| Best market evidence of value | Taxpayers pointed to Hulick’s auction-based low values and a non-testifying expert’s cost estimate. | County pointed to buyer-reported contributory values, paired-sale differentials, and reported replacement purchases. | The single verified assembled sale for $14,000 (2010) is the best market evidence; court adopts $14,000 as controlling value. |
| Reliability of cost approach and depreciation | Taxpayers argued county’s original costs and 10% straight-line depreciation overstated value; advocated Dept. of Revenue factors or auctioneer testimony. | County relied on longstanding 10% annual reduction from assessor records and reported original cost basis. | Cost approach here is unreliable (property not new, possible functional obsolescence); county’s 10% method unexplained and unpersuasive. |
| Weight of buyer questionnaires and paired-sales (foreclosures) | Taxpayers challenged buyer allocations as unreliable and self-interested. | County used questionnaires and paired sales to attribute large amounts to personal property. | Buyer allocations and paired sales (using foreclosure baselines) are of limited weight; wide variability and foreclosure discounts undermine reliability. |
Key Cases Cited
- Cook v. Michael, 214 Or. 513, 330 P.2d 1026 (1958) (burden of proof for taxpayer seeking affirmative tax relief requires showing facts are more probably true than false)
- Hewlett-Packard Co. v. Benton County Assessor, 357 Or. 598, 356 P.3d 70 (2015) (highest-and-best-use is essential to credible appraisal; error on HBU undercuts appraisal weight)