*1 through all aftercare recommenda- regular
tions and attendance at Alcoholics
Anonymous. independently
This court has reviewed approves jointly
the file and recom- disposition.
mended files, all upon
Based records and herein,
proceedings
IT IS HEREBY ORDERED that re-
spondent Kristine Katherine Trudeau is
indefinitely suspended from practice months,
law for a minimum of 30 effective days filing from the of this order. Re- upon
instatement is conditioned the above- requirements. Respondent
stated shall in costs and $900 disburse- $578.18
ments under Rule RLPR.
BY THE COURT: Russell A. Anderson
/s/
Associate Justice
McNEILUS TRUCK &
MANUFACTURING,
INC., Relator, DODGE, Respondent.
COUNTY OF
No. A05-121.
Supreme Court of Minnesota.
Nov. 2005.
Rehearing Denied Dec.
4H and National Asso- Chamber Commerce of Manufacturers. ciation OPINION ANDERSON, BARRY, G. Justice. McNeilus Truck & Manufactur- Relator (“McNeilus”) real estate ing, Inc. owns Dodge County, in Minnesota. locаted large manufacturing operates McNeilus Center, that plant Dodge alleges and Dodge County Assessor overvalued the years for the tax McNeilus Dodge and 2002. valued the $6,739,900 $6,743,900 erty for 2001 and at trial, the Tax for 2002. After Minnesota Dodge favor of respondent Court held in real County, concluding McNeilus’s $8,800,000as was valuеd at of Janu- estate $9,000,000 January 2, ary 2, Mfg. McNeilus Truck & Dodge, C5-02- Nos. 1843041, at *1 WL 2004). Dodge Aug. The tax court found persuasive, County’s giving more appraisal to the greater weight at to arrive its valu- respondent utilized court, citing the tax its ation. rejected the out-of-state precedent, own McNeilus, comparisons offеred stating: accept comparables “will not
We the circum unless outside Minnesota * * * warrant and unless differ stances markets and tax rates are ences Gilbert, Hedges, H. R. James Steven forth For the reasons set explained.” PLLC, Group, H. Law James Gilbert below, accept McNeilus’s use we do not MN, Minnetonka, Hill, Hill Robert Robert case. MN, Associations, Ltd., for Minneapolis, & omitted). (citations *7 McNeilus Id. at Relator. it the tax court erred when contends that Moen, Firm, Kenneth R. Moen Law rejected use of out-of-state Rochester, MN, Respondent. for unpromulgated an based on Frans, Savin, evidence, the tax thаt the valuations of Myron L. Mark D. John Beukema, Benson, LLP, clearly We reverse Min- court were erroneous. Faegre & F. MN, Amici remand. neapolis, Curiae I. full value for some of the more costly improvements manufacturing appeal issue is a warehouse, would not be used in a Jabs light manufacturing large facility Dodge *3 Center, Minnesota, adjusted comparables involving the 70 miles southeast ware- housing the Twin and miles from both Cities down Using 10%. five of and Buildings Interstate 90. Interstate comparables, these he arrived aat value improvements approximately and total $9,350,000. Using all of compara- feet, 645,734 square and are of steel frame bles, performed Jabs an alternative valua- siding. facility construction with steel analysis, tion considering the value of the cement is used manufacture drums and property if split separate, and sold in refuse containers for use with cement and parcels. smaller Using approach, he majority refuse trucks. The of the im- $8,850,000. came a value of gave Jabs for provements are used manufacturing, approach weight, alternative lesser although some smaller structures are de- and a approach arrived at valuation research,- storage, development votеd to $9,300,000 2, January as of 2002. space. and office also a performed approach Jabs cost Dodge County presented evidence of analysis, beginning with the replac- cost of expert testimony value through ing the improvements and then consider- appraiser certified W. Dennis Jabs. Jabs ing dеpreciation. performed Jabs this anal- primarily employed comparison a sales ysis building by building, each building valuation, approach selecting ten com- has different uses and characteristics. He parable large proper- industrial concluded that value property, resembling subjeсt ties a using cost approach analysis, was nearly fifty total of industrial sales. $9,200,000 January as of comparables Jabs selected his from the determined he included the Relator expert McNeilus offered the tes- plant, specifically, McNeilus a market for timony of appraiser certified Steven M. large manufacturing industrial facilities DeCaster. DeCaster utilized a sales com- centering at intersection of' Inter- parison and a cost approach extending states and and across using seven comparable sales from a mar- Minnesota, southern into northern Iowa larger ket than idеntified Jabs. and eastern proper- South Dakota. The comparables, Unlike Jabs’ all of DeCast- ties, nine in and one South er’s pure were manufacturing Dakota, were dissimilar sizes and uses. facilities. Two comparables, one Hop- One manufacturing was a fa- kins, MN, IL, and one in Chicago Heights, cility much smaller than in large metropolitan were areas. Two of erty, four were warehouse distribution DeCaster’s were in Minneso- centers, and five were combination ware- ta and one inwas Wisconsin. The remain- house/manufacturing facilities. Two com- der were Illinois. All but one of De- parables were Twin Cities metrо Caster’s comparables were at least 100 area, and several close were to interstate from Chicago. miles All were either of freeways. Jabs high- concluded that the or masonry steel steel and est and construction. best use of proper- the McNeilus ty adjustments was DeCaster made tо account for manufacturing, but also considered buyers location, age, size light buildings, often use manufacturing space interchangeably quality warehousing. construction. He did not make But because adjustments willing any warehousers are not for local tax rates mar- obligation to its inde the tax court’s use Using these ket conditions. judgment evaluating all testi pendent final valuation DeCaster arrived mony and before court. See evidence January $2,600,000 as of Advisors, Am. Fin. Express uti- January 2002. DeCaster also Carver, value, 658-59 approach to alternative lized an cost 1998) that the tax court’s $2,800,000 (holding out-of- as of both at a value of arriving rejection of testimony hand certain dates. part exhibits that were of the record was Stores, discretion); II. an abuse Red Owl *4 Taxation, v. 264 Minn. Inc. Comm’r court, rejecting tax in DeCaster’s of The (1962). 117 N.W.2d 407 sales, stated, will not ac “we out-of-state Minnesota cept comparables from outside а specifically, application More * * * the warrant unless circumstances barring rule vio out-of-state in the markets and unless differences duty to proper lates the assess Truck explained.” McNeilus tax rates are re ty at market value. The tax court is Inc., 1843041,at In its *7. Mfg.& 2004 WL 273.11, § quired to follow Minn.Stat. subd. Find Motion for Amended Denying Order (2004), provides property 1 which that “all Law, ings and Conclusions at its market value.” Fair shall be valued Center, County Inc. v. Huisken Meat cited pur value for assessment market C8-95-271, Murray, Nos. a compensation willing is the which poses (Minn. 1998), T.C. 15131 Jan. WL required buy proper not to the purchaser decisions, authority for as among other willing to an but not ty would owner In comparables. Huisk rejecting foreign it, taking to required sell into consider that the basis en tax court stated the highest prop use of ation the best rejection of out-of-state erty. Acquisitions, Ferche , “the did not disclose was- that those Benton, 631, 634 of different tax rates market nor the effect § 1996); see Minn.Stat. subd. also any, adjustments, if to what determine (2004). at *2. The tax court made.” Id. should be comparable ap- utilizing When Corp. case also cited SPX present must appraiser to proach Steele, C1-00-350, 2003 WL No. weight to lands give “consider and due 2003). July character, quality, comparable which are all There, to consider the tax court refused location, all lands to the end that comparables, noting 12 of relator’s as- similarly improved will be located and accept comparables from out “we will upon a uniform basis and without sessed side Minnesota unless circumstancеs § 273.12 discrimination.” Minn.Stat. dif an and unless exception warrant such appraiser The must assess are markets and tax rates ferences hypothetical buyer of the market a actual explained.” Id. *5. at, and would look consid- in that comparable properties sales of say, viewing to tax court еr It is fair depends the market scope a market. The the tax court has created precedent, that property being kind sold—two compa- on the the use prohibiting de facto rule by physical separated great land Minnesota. But sales of from outside of rables comparable nonetheless be use sales distance against informal use intended depending on the than Minne transactions from states other searching buyer a sota, property. example, For explanation, violates without further to for a center a national sary distribution serve account for differencеs local tax buyer’s products might market for the con- policies rates and amongst comparable properties places sider located as far sales across state lines. But the same apart similarly Denver and St. Louis as adjustments kinds of may need to be made situated, prospeсtive buyers whereas regard comparable sales in differ- primary likely residence would limit their ent counties or different cities within buyers presently to where the live search nothing Minnesota. There is particularly Thus, and work. what commentators have salient about the that justifies state line proximity,” termed “economic and not presumption what amounts to a of non- physical proximity, pieces mere two makes While, comparability. things all other be- Eaton, comparable. of real estate J.D. ing equal, likely is in Litigation Real Estate Valuation an superior to out-of-state comparable, ef- (2d 1995). buyers ed. real fectively excluding always is not examine limited distance arbitrary sales is and distorts valuation in location, Indeed, nor state lines. duty contravention of the tax court’s might practically state lines invisible *5 assess fair market value and treat lands certain of purchasers land. Such an arbi- similarly situated on a uniform basis. trary may and artificial limit not reflect §§ Minn.Stat. 273.12. hold We market principles grave creates risk the tax evidentiary court’s de facto distorting property valuation. barring rule vio- obligation lates the tax court’s to assess rejected in other
Courts states have also property at market value.1 that comparable may notion ignored purely they because occurred political boundary.
across a See Bartlett III. & Co. v. Bd. Grain Review Sioux where, here, But even the tax (Iowa (hold 86, 1977) City, 253 N.W.2d 94 court inappropriately evidence, excluded ing grain that sales of terminals other will we not reverse unless the еxclusion comparable states were to grain materially prejudiced appealing party. terminal in Iowa because the nature of the Marquette Bank Nat’l Ass’n v. market for property encompassed 301, Hennepin, 589 N.W.2d by wider area than that bounded state 1999). But neither will we defer to the tax lines); & Grеat Atl. Pac. Tea v.Co. Kier court’s property valuation when the court nan, 236, 718, 42 N.Y.2d 397 N.Y.S.2d 366 “completely explain to fail[s] its reason (1977) N.E.2d (holding that where ing.” Hansen Hennepin, 527 evidence showed that market for large (Minn.1995). N.W.2d In such a food processing plants regional, was ap situation, we remand to the tax court praisers rely comparable could on sales in with instructions to reconsider the evi states, rigid other noting clarify dence and its analysis. See Ren regarding political boundaries would Brown, v. County neke 255 Minn. “abandon the economic realism which (1959) (remanding valuation”). should characterize property tax court’s valuation di course,
Of as the tax court also recog- rections to make specific findings and ex nized, adjustments price may plain reasoning). be neces- note, however, case, 1. We holding excluding, that this appropriate does in the out-of- preclude not exercising the tax court from sales on relevance or other discretion in grounds. admission evidence and court, comment on the remainder. The tax present in the dis The tax reasons, therefore, alternative are court’s alternative reasons provided some pute, support insufficient and cannot the tаx comparables and rejecting DeCaster’s analysis. valuation many But of these reasons also valuation. validity Dodge question into call rejection Because evidence example, the tax County’s appraisal. For by of value and the diffi- offered McNeilus DeCaster’s valuation be cоurt criticized analysis given culties associated with the differences cause he did not address remaining expert the tax court on the market and the the out-of-state between evidence, we are a conclu- unable reach Center, nor he ac Dodge did the appropriateness sion as to differing tax struc impact count for the erty Accordingly, valuation at issue here. we remand the tax court with instruc- of his out-of-state on the valuation tures properly tions consider all offered and the.tax court did comparable sales. But comparable sale and to admitted evidenсe question Dodge County’s out- similarly the samé standard to apply Brookings, comparable in South of-state by either and to party evidence offered any require Nor Dakota. did expert evaluate detail the evidence of- differing local significantly account of posi- take no parties. fered We structures and market conditions be as to eventual of this tion outcome respondent’s in-state tween dispute. valuation as dis which were located communities *6 Owatonna, Lea, Albert parate Eagan, and remanded. Reversed and Northfield. ANDERSON, H„ BLATZ, C.J., PAUL Moreover, tax court considered all ANDERSON, MEYER, A., RUSSELL comparables, despite the fact that of Jabs’ JJ., part took no in the or consideration comparables were
all but one of those of this case. decision using materials and methods constructed property. from the McNeilus different JESSEN, T„ Acting RICHARD Justice Likewise, opinion high- the tax court’s (concurring).* problems with De- lights environmental BRUCE, GROSS, Acting Justice.* noting that
Caster’s without is itself to sim- plant the McNeilus JESSEN, T„ Acting RICHARD Justice designat- is ilar environmental issues and (concurring). Agen- ed the Environmental Protection Control cy and the Minnesota Pollution majori- I concur with the' decision ’ high generator volume Agency as However, emphаsize ty. I write tax hazardous wastes. legal no or economic basis there is criticizes some of DeCást- opinion court’s automatically compa- out-of-state exclude they by either are offered inexplicably but fails to rables whether er’s * Const, VI, § § pursuant art. and Minn.Stat. subd. Appointed to Minn. phrase рarties. “out-of-state” Gregory KVIDERA, Respondent, A.
should be omitted footnote one opinion. There no is automatic v. distinction between in-state and out-of- ROTATION AND ENGINEERING comparables. CO., MANUFACTURING The tax court’s de facto rule does Appellant. automatically compa- exclude out-of-state No. A04-2493. rablеs, up presumption but it sets against Corp. In their use. SPX Court of Appeals of Minnesota. Steele, No. 2003 WL Nov. 23, 2003), July recognized court there exceptions exclusionary to its rule if the
proponent the out-of-state comparable
can show that “the circumstances warrant * * * an exception such differences
the markets and tax rates are explained.”
Id. *5.
Here, hand, on the one
cited its de facto rule to exclude McNeilus’ and, comparables, on the other
hand, again rule, its citing de facto it ad- record,
mitted the evidence into the
then, using its presumption rule as a
against out-of-state comparables but not
in-state that relator found
had not met its burden to show that cir- *7 exception
cumstances warrant an and to
explain the differences in the markets
tax rates. did
hold respondent to the same standard
when it presented evidence of an out-of-
state comparable. utilizing
When ap-
proach all factors relevant to
determining market con- value should be
sidered weighed ad- appropriate
justments should be made for the differ-
ences in the in- comparable sales whether See Minn.Stat. out-of-state.
§ 273.12