444 Lafayette, LLC v. Cnty. of Ramsey

• Decision Date: 25 January 2012
• Docket Number: No. A11–1014.,A11–1014.
• Citation: 811 N.W.2d 106
• Parties: 444 LAFAYETTE, LLC, et al., Relators, v. COUNTY OF RAMSEY, Respondent.
• Court: Minnesota Supreme Court

811 N.W.2d 106

444 LAFAYETTE, LLC, et al., Relators,

v.COUNTY OF RAMSEY, Respondent.

No. A11–1014.

Supreme Court of Minnesota.

Jan. 25, 2012.

Syllabus by the Court

When the tax court adopts, verbatim, the value determination proposed in a party's post-trial brief, and that proposed value is lower or higher than the appraisal testimony presented at trial, the court must explain its reasoning for rejecting the appraisal testimony and adequately describe the factual support in the record for its property value determination.

Thomas R. Wilhelmy, Jennifer A. Kitchak, Fredrikson & Byron, P.A., Minneapolis, MN, for relators.

John J. Choi, Ramsey County Attorney, M. Jean Stepan, Assistant County Attorney, Saint Paul, MN, for respondent.

Considered and decided by the court without oral argument.

OPINION

PER CURIAM.

Relators 444 Lafayette, LLC, and Meritex Enterprises, Inc., seek certiorari review of the Minnesota Tax Court's determination of the fair market value on the January 2, 2007; January 2, 2008; and January 2, 2009, assessment dates for an office building located at 444 Lafayette Road in Saint Paul, Minnesota. At trial, the tax court heard expert testimony from relators' appraiser and Ramsey County's appraiser. After trial, the County submitted a post-trial brief that argued for higher property valuations than the market values assigned to the property by either appraiser. The court then adopted, verbatim, the County's proposed market valuations on the three assessment dates.

We are generally deferential to the tax court's property value determination and will not overturn the court's valuation determination unless it is clearly erroneous. Cont'l Retail, LLC v. Cnty. of Hennepin, 801 N.W.2d 395, 398–99 (Minn.2011). “Because of the tax court's expertise and judgment, the court has discretion to decide whether to adopt either expert's appraisal, and if so, which expert's appraisal to adopt.” Berry & Co., Inc. v. Cnty. of Hennepin, 806 N.W.2d 31, 33 (Minn.2011). But we have, under certain circumstances, been unwilling to defer to the tax court's decision. See Eden Prairie Mall, LLC v. Cnty. of Hennepin, 797 N.W.2d 186 (Minn.2011).

In Eden Prairie Mall, we noted that the tax court's verbatim adoption of the market value determination presented in a post-trial brief “raises doubts over whether the tax court exercised its own skill and independent judgment.” Id. at 195; cf. Lundell v. Coop. Power Ass'n, 707 N.W.2d 376, 380 n. 1 (Minn.2006) (stating that the district court's adoption of one party's proposed findings “does not allow the parties or a reviewing court to determine the extent to which the court's decision was independently made”). We also explained that when the tax court arrives at a property value determination that is lower or higher than the appraisal testimony presented at trial, the court runs the risk of having its determination overturned unless the court adequately explains its reasoning. Eden Prairie Mall, 797 N.W.2d at 194. We concluded that when the tax court rejects the testimony of both appraisers, that court must “indicate one way or another the basis for its calculation[s]” and must provide “an adequate explanation and factual support in the record” for its conclusions. Id. at 196 n. 5.¹

In this case, relators' appraiser testified that the subject property had a market value of $16,600,000 on January 2, 2007; $16,300,000 on January 2, 2008; and $13,800,000 on January 2, 2009. The County's appraiser concluded that the market value of the property was $23,900,000 for 2007; $25,000,000 for 2008; and $21,000,000 for 2009. In its post-trial brief the County argued for valuations higher than the testimony of either party's appraiser using assumptions and values that the County asserted were more “appropriate” or “reasonable” than the assumptions relied upon by the parties' appraisers. The tax court adopted, verbatim, the market values proposed by the...