DONALD V. CAIN, JR., APPELLANT, v. CUSTER COUNTY BOARD OF EQUALIZATION, APPELLEE.
No. S-14-764
Supreme Court of Nebraska
Filed August 28, 2015
291 Neb. 730
Taxation: Judgments: Appeal and Error. Appellate courts review decisions rendered by the Tax Equalization and Review Commission for errors appearing on the record. - Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, an appellate court’s inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.
- Taxation: Appeal and Error. Questions of law arising during appellate review of Tax Equalization and Review Commission decisions are reviewed de novo on the record.
- Jurisdiction. A question of jurisdiction is a question of law.
- Appeal and Error. Although an appellate court ordinarily considers only those errors assigned and discussed in the briefs, the appellate court may, at its option, notice plain error.
- ____. Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process.
- Jurisdiction: Appeal and Error. Before reaching the legal issues рresented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.
- Statutes: Appeal and Error. An appellate court will not read into a statute a meaning that is not there.
- Appeal and Error. An alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error to be considered by an appellate court.
- Taxation: Statutes: Appeal and Error. The meaning of a statute is a question of law, and a reviewing court is obligated to reach
its conclusions independent of the determination made by the Tax Equalization and Review Commission. - Statutes: Legislature: Presumptions. The Legislature is presumed to know the general condition surrounding the subject matter of a legislative enactment, and it is presumed to know and contemplate the legal effect that accompanies the language it employs to make effective the legislation.
- Constitutional Law: Rules of the Supreme Court: Notice: Statutes: Appeal and Error. Strict compliance with
Neb. Ct. R. App. P. § 2-109(E) (rev. 2014) is required in order for an appellate court to consider a challenge to the constitutionality of a statute. - Taxation: Valuation: Presumptions: Proof. In protests before a county board of equalization, the valuation by the assessor is presumed to be correct. The burden of proof rests upon the taxpayer to rebut this presumption and to prove that an assessment is excessive.
- Counties: Evidence. The standard generally applicable in proceedings before county boards, including monetary disputes, is a preponderance, or greater weight, of the evidence.
- Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.
Appeal from the Tax Equalization and Review Commission. Reversed and remanded.
Patrick M. Heng and Lindsay E. Pedersen, of Waite, McWha & Heng, and Steven P. Vinton, of Bacon & Vinton, L.L.C., for appellant.
Steven R. Bowers, Custer County Attorney, and Glenn A. Clark for appellee.
HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.
WRIGHT, J.
I. NATURE OF CASE
In 2012, the Custer County assessor (Assessor) increased the assessed value of property ownеd by Donald V. Cain, Jr., from $734,968 to $1,834,925. Cain challenged this valuation increase by filing petitions with the Tax Equalization
II. SCOPE OF REVIEW
[1,2] Appellate courts review decisions rendered by TERC for errors appearing on the record. Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750 (2013). When reviewing a judgment for errors appearing on the record, an appellate court’s inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasоnable. Id.
[3,4] Questions of law arising during appellate review of TERC decisions are reviewed de novo on the record. Id. A question of jurisdiction is a question of law. Sherman T. v. Karyn N., 286 Neb. 468, 837 N.W.2d 746 (2013).
[5,6] Although an appellate court ordinarily considers only those errors assigned and discussed in the briefs, the appellate court may, at its option, notice plain error. Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012). Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process. Id.
III. FACTS
Cain owns 10 contiguous parcels of land in Custer County, Nebraska, which total over 1,093 acres. Approximately 70 percent of the property, or 756 acres, is irrigated “native grass” upon which Cain grazes cattle. The remainder of the property is nonirrigated grassland.
In situations such as this, where there is a change in the assessed value of real property,
By the time Cain learned of the change in assessed values, the deadline to file protests with the county board of equalization pursuant to
On December 28, 2012, Cain petitioned TERC to determine the actual value of each parcel pursuant to
TERC held two separate hearings on Cain’s petitions. On each occasion, the hearing was held before commissioners
The first hearing was a “show cause hearing” to determine if TERC had jurisdiction over Cain’s petitions. The jurisdictional question was whether Cain was entitled to file his petitions pursuant to
At a hearing on the merits, Salmon and Freimuth heard evidence that for purposes of valuation, the Assessor has divided Custer County into five “market areas” based on her analysis of real estate markets and recent sales. Market area 1 covers the majority of Custer County and is the markеt area with the highest average sale price. Within each market area, property is classified according to a use category (irrigated, dryland, grassland, canyon, Sandhills-type land, “frequently flooded,” and waste) and a soil type (a numeric value between 1 and 4, with 1 representing the highest quality). For each market area, there is a standard value per acre for property of the same use and soil type.
Cain’s property is located within market area 1 and has been valued as part of that market area for some time. In terms of use category, for tax year 2012, the Assessor classified the nonirrigated portions of Cain’s property (approximately 337 acres) as grassland and valued them between $495 and $505 per acre, depending on soil type. The Assessor classified the irrigated parts of his property (approximately 756 acres) as irrigated
Cain adduced evidence that the irrigated portions of his land had been “inequitably classified” and valued. He presented testimony that in 2012, the irrigated portions of his property were valued similarly to irrigated cropland, but that his property was not comparable to irrigated cropland in terms of soil type or topography. He also presented testimony that his property was located in market area 1 for purposes of valuation but that because of the soil type, it was more comparable in value to the property in market area 2 or area 3. Cain argued that a “more equitable” way of valuing his property would be to lower its assessed value to the level of the irrigated grassland in market areа 2 or area 3.
The Assessor explained how she classified Cain’s property. She testified that Cain’s property had a different soil type than the properties in market area 2, even though both had sandy soils. She also testified that under the relevant statutes and regulations, she was allowed to differentiate between parcels of irrigated land according to soil type but not actual use of the land and that, as a consequence, she could not treat irrigated grassland differently than other irrigated land.
On July 31, 2014, Salmon entered an order on behalf of TERC on the merits of Cain’s petitions. She first addressed whether the lack of notice rendered the valuation increases void. She stated that in prior cases, this court held that assessments were void where there was a failure to provide the required notice. But she concluded that these cases were “supersede[d]” by the adoption of
In cases concerning failures to provide sufficient notice, the [Nebraska Supreme Court and Court of Appeals] concluded that because the taxpayer had lost its access
to review, the increased assessment was void. However, all of these cases were prior to the adoption of . . . section 77-1507.01. Under . . . section 77-1507.01 taxpayers now have an avenue for appeal by December 31 of each tax year if notice was not timely provided. [TERC], therefore, has jurisdiction over petitions which it did not otherwise have prior to the passage of the statute. Because [TERC] now has jurisdiction and the taxpayer has an avenue for review, the previous Nebraska Supreme Court and Court of Appeals decisions are no longer applicable; it appears that . . . section 77-1507.01 now supersedes these decisions in instances where a taxpayer petitions [TERC] prior to December 31 of a tax year where a failure of noticе from the County Assessor or County Board prevents timely filing under other statutes.
Salmon therefore dismissed Cain’s argument that the increased assessments were void due to lack of notice. Freimuth agreed with this determination.
On the merits, Salmon rejected Cain’s argument that his property should have been valued within market area 2 or area 3. She concluded that there was not clear and convincing evidence that the Assessor’s decision to classify Cain’s property within market area 1 for 2012 was arbitrary or unreasonable. She explained that the soil types on Cain’s property were “more suitable to irrigation and production than the soils located in Market Area 2 and Market Area 3” and that this difference in soil “support[ed] the . . . Assessor[’s] assertion that the Subject Property [was] more valuable than irrigated grassland in Market Area 2 and Market Area 3.”
Freimuth dissented from the determination that the increased valuations were neither arbitrary nor unreasonable. He stated that he would find Cain had “provided sufficient evidence to show that the [Assessor’s] valuation determinations . . . were arbitrary or unreasonable . . . in part because the Subject Property is unique as compared to other Market Area 1
Cain timely appeals. Pursuant to our statutory authority to regulate the dockets of the appellate courts of this state, we moved the case to our docket. Seе
IV. ASSIGNMENTS OF ERROR
Cain assigns, reordered and restated, that TERC erred (1) in determining that it had jurisdiction over the case; (2) in determining that the notice required under
V. ANALYSIS
The issues tried by TERC were (1) whether the Assessor failed to provide proper notice under
(a) Final Order
[7] We first address whether TERC’s decision was a valid order. Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it. Breci v. St. Paul Mercury Ins. Co., 288 Neb. 626, 849 N.W.2d 523 (2014).
The dissent to this opinion argues that under
We respectfully disagree with the dissent. Given that
Any person otherwise having a right to appeal may petition [TERC] in accordance with section 77-5013, on or before December 31 of each year, to determine the actual value or special value of real property for that year if a failure to give notice prevented timely filing of a protest or appeal provided for in sections 77-1501 to 77-1510.
[8] Section 77-1507.01 does not specify that a hearing held pursuant to this section must strictly conform to the
Under the procedural rules which normally govern TERC proceedings and which we find applicable in the instant case, the order denying Cain’s petitions was a valid order. Section 77-5005(2) provides that a “majority of [TERC] shall at all times constitute a quorum to transact business, and one vacancy shall not impair the right of the remaining commissioners to exercise all the powers of [TERC].” At all times relevant to this case, TERC had three commissioners. See
The two commissioners who heard Cain’s petitions did not agree about whether to grant the relief requested by Cain. But this did not prevent TERC from entering an order denying Cain’s petitions. Section 77-5016 provides that “[i]n any hearing or proceeding heard by [TERC]: . . . (13) [TERC] shall deny relief to the appellant or petitioner in any hearing or proceeding unless a majority of the commissioners present determine that the relief should be granted.” Since one commissioner did not constitute a majority, pursuant to
[9] In his petition for review, Cain alleged that the use of a two-member panel violated his due process. His assignment
(b) Increased Assessments Not Void
We next address Cain’s argument that TERC did not have jurisdiction over his petitions, because the Assessor’s failure to provide the notices of increased valuation required by
For purposes of our analysis, we find that the Assessor did not provide the necessary notices to Cain. Both TERC commissioners found that the Assessor failed to provide the notices of increased valuation required by
We consider whether this lack of notice voided the assessments and thereby deprived TERC of jurisdiction to consider Cain’s petitions. Cain argues that under our case law, the
[10] Based upon our interpretation of
(i) Statutory Background
In the event that the assessed value of real property is increased for any particular tax year, our statutes require notices to be sent to the taxpayer at various points throughout the proceedings arising from such increase. See
Prior to 2005, there was no statutory remedy for a taxpayer who was prevented by a lack of notice from filing a protest or appeal. But in 2005, the Legislature enacted
(ii) Case Law
Prior to the enactment of
In Rosenbery, supra, the taxpayer had not received the notice of increаsed valuation required by a predecessor to
In Falotico v. Grant Cty. Bd. of Equal., 262 Neb. 292, 631 N.W.2d 492 (2001), the assessed values for several pieces of property were increased by the county assessor for tax
On appeal from TERC’s order, we determined that the notice required by
ensure[] that a taxpayer will be notified of the board’s decision in order that the taxpayer may have time to prepare and file an appeal within the statutory 30-day period. Without this notice provision, the board could very well delay notification to the taxpayer, thereby preventing review of the board’s decision. Likewise, if a violation of this provision were without consequence, the board could similarly engage in such delay and defeat the taxpayer’s appeal, effectively denying the taxpayer the process that is due under the statutes.
See Falotico, 262 Neb. at 298-99, 631 N.W.2d at 498. Viewing these facts in light of our decision in Rosenbery, supra, we concluded that because there was a failure to comply with the notice requirement of
(iii) Resolution
In our cases before the Legislature enacted
But the failure of the county to provide notice of an increased assessment or the county board of equalization’s decision no longer deprives a taxpayer of an opportunity to be heard on the increased assessment or decision. After our decision in Falotico v. Grant Cty. Bd. of Equal., 262 Neb. 292, 631 N.W.2d 492 (2001), the Legislature adopted
[11] The language of
Moreover, the Legislature provided that TERC’s role within this new procedure would be “to determine the actual value or special value of real property for that year.” See
TERC correctly determined that the assessments were not void and that it had jurisdiction under
§ 77-1507.01
At oral argument, Cain asserted for the first time that
Cain’s assignment of error related to due process might be sufficiently broad to encompass this argument. But he did not argue in his brief that
[12] Moreover, Cain did not satisfy the procedural prerequisites for appellate review of such a claim.
A party presenting a case involving the federal or state constitutionality of a statute must file and serve notice thereof with the Supreme Court Clerk by a separate written notice or by notice in a Petition to Bypass at the time of filing such party’s brief. If the Attorney General is not already a party to an action where the constitutionality of the statute is in issue, a copy of the brief assigning unconstitutionality must be served on the Attorney General within 5 days of the filing of the brief with the Supreme Court Clerk; proof of such service shall be filed with the Supreme Court Clerk.
Strict compliance with
3. PLAIN ERROR
In considering Cain’s petitions filed pursuant to
Although an appellate court ordinarily considers only those errors assigned and discussed in the briefs, the appellate court may, at its option, notice plain error. Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012). Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process. Id. In the instant case, we note plain error in the standard of review applied by TERC to Cain’s petitions.
TERC applied the standard of review found in
In all appeals, excepting those arising under section 77-1606, if the appellant presents no evidence to show that the ordеr, decision, determination, or action appealed from is incorrect, the commission shall deny the appeal. If the appellant presents any evidence to show that the order, decision, determination, or action appealed from is incorrect, such order, decision, determination, or action shall be affirmed unless evidence is adduced establishing that the order, decision, determination, or action was unreasonable or arbitrary.
We have interpreted this section as providing that there is “‘“a presumption that a board of equalization has faithfully performed its official duties in making an assessment and has acted upon sufficient competent evidence to justify its action.”’” See JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120, 124, 825 N.W.2d 447, 451 (2013). The
TERC should not have applied
In performing this initial review of the increased assessments on Cain’s property, TERC should have applied the same standards and burdens of proof as the board of equalization would have used in a protest. As explained above, in enacting
[13,14] In protests before a county board of equalization, “the valuation by the assessor is presumed to be correct.”
By considering Cain’s petitions under
4. REMAINING ASSIGNMENTS OF ERROR
[15] Because we have determined that TERC’s order should be reversed, we do not address Cain’s remaining assignments
VI. CONCLUSION
For the foregoing reasons, we reverse the decision of TERC which affirmed the Assessor’s valuations of Cain’s property for purposes of tax year 2012. We remand the cause for reconsideration on the record using the preponderance, or greater weight, of the evidence standard applicable to protests before a county board of equalization.
REVERSED AND REMANDED.
CONNOLLY, J., dissenting
I dissent. I disagree with the majority’s сonclusion that two TERC commissioners can render a valid decision on a taxpayer’s assessment protest if they disagree. I believe that TERC is bound by the rules that would apply to a protest hearing before the county board of equalization. So does the majority—to an extent. It finds plain error in TERC’s application of a clear and convincing standard of proof and holds that TERC must apply the same standard that would apply before a county board of equalization. But it seems that it inconsistently concludes that TERC is not bound by the rules relevant to whether the adjudicating body has issued a valid decision. I believe that our case law compels TERC to comply with those rules, or the increased assessment is void. And those rules require a decision on the merits, not a statutory default decision. Because TERC failed to render a valid decision under the statutes that apply to protest hearings, I conclude that there is no final order and that wе do not have jurisdiction to consider the merits of the appeal. I would remand the cause for a tie-breaking decision on the merits.
No statute governing protest hearings provides that taxpayers shall be denied relief if a county board of equalization splits evenly on the action to be taken. In my opinion,
I recognize that
Obviously, due process requires adequate notice and the opportunity to be heard when the State seeks to deprive persons of their property interests.5 So it has always been
We expanded on this reasoning in Gamboni v. County of Otoe.8 There, the county assessor sent noticе to the taxpayers of increased assessments, but the notice did not provide the date that the county board would convene, as required by statute. We recognized that the board’s meeting time was set out by statute, that the board had published notice of the increases and the deadline for filing protests, and that most of the property owners had received notice of the increased assessments for their tax returns. But we concluded that
What has been said of the notice itself being mandatory we think is equally applicable to what the Legislature has said shall be contained herein. . . .
. . . .
We find the statute requires the notice must be given by the assessor and that it must specifically contain all the information the statute requires shall be set forth therein.9
In sum, whilе it is true that due process requires notice and an opportunity to be heard, our case law goes beyond minimal due process requirements. We have required strict compliance with statutory procedures for increasing property assessment because they are intended to protect taxpayers and safeguard against excessive levies. Our more recent decision in Falotico v. Grant Cty. Bd. of Equal.10 reaffirmed these principles.
In Falotico, we required counties to strictly comply with the statutory time limit for notifying a taxpayer of a county board’s decision. Because the notice was late, the taxpayer did not file a timely appeal with TERC. In relying on Rosenbery, we reiterated its strict compliance requirement: “[T]he procedure prescribed by the Legislature in respect to levying a tax must be strictly observed. We further stated [in Rosenbery] that the statutory provision relating to a tax levy, the objects of which are the protection of taxpayers and to safeguard against excessive levies, is mandatory.”11
We concluded that under Rosenbery and Gamboni, all statutory requirements intended to protect taxpayers and guard
The notice requirements under § 77-1502 occur at a different point in time in the assessment process than the notice required by what is now § 77-1315. However, its object is largely the same, namely, notice. Given that appeals to TERC must be taken within 30 days after the adjournment of a board of equalization, § 77-1502 ensures that a taxpayer will be notified of the board’s decision in order that the taxpayer may have time to prepare and file an appeal within the statutory 30-day period. Without this notice provision, the board could very well delay notification to the taxpayer, thereby preventing review of the board’s decision. Likewise, if a violation of this provision were without consequence, the board could similarly engage in such delay and defeat the taxpayer’s appeal, effectively denying the taxpayer the process that is due under the statutes. We conclude that just as notice by the county assessor under § 77-1315 is essential to the validity of the levy, so too is notice by the county clerk under § 77-1502.12
We held that because the county had violated this statutory duty, the valuation increase was void. Falotico emphasizes that under our case law, even if the taxpayer received notice of the increased assessment and an opportunity to be heard, an increased assessment is void if a taxpayer does not receive the statutory “process that is due” at every stage of an assessment proceeding.
I agree that in enacting
I also agree with the majority that because TERC is providing a substitute protest hearing, it erred in applying a clear and convincing standard of proof in reliance on what is now
As the majority opinion explains, under the statutes governing TERC’s procedures,13 if only two TERC commissioners hear a taxpayer’s protest, the taxpayer must obtain a unanimous decision to prevail. But the majority opinion also acknowledges that the protest statutes do not contemplate a procedure in which a single adjudicator has veto power, as in this case. So Cain did not received the procedures that he would have received under the protest statutes.
I see no reason to distinguish the statutory adjudication requirement from the statutory standard of proof. If taxpayers are entitled to the benefit of one procedure, they are entitled to the benefit of the other. And our case law requiring strict compliance with the protest procedures would be meaningless if a county could simply avoid the procedures by delaying notice and depriving a taxpayer of a protest hearing before a county board. Because
Because TERC failed to render a valid decision under the protest statutes, I conclude that we do not have a final order or jurisdiction to consider the merits of the appeal. The lack of a final order, however, does not preclude us from vacating the order and remanding the cause for a tie-breaking decision on the merits under the same standards that apply to a county board of equalization.14 But I would hold that unless TERC provides a hearing equivalent to the procedure that Cain would have received before the county board had the Assessor complied with notice requirements, the increased assessment is void.