Board of Assessment Appeals v. Sampson

• Decision Date: 10 January 2005
• Docket Number: No. 03SC451.,03SC451.
• Citation: 105 P.3d 198
• Parties: BOARD OF ASSESSMENT APPEALS, Petitioner, v. Richard F. SAMPSON and Teller County Board of Equalization, Respondents.
• Court: Colorado Supreme Court

105 P.3d 198

BOARD OF ASSESSMENT APPEALS, Petitioner, v. Richard F. SAMPSON and Teller County Board of Equalization, Respondents.

No. 03SC451.

Supreme Court of Colorado.

January 10, 2005.

As Modified on Denial of Rehearing January 31, 2005.

Ken Salazar, Attorney General, John D. Baird, First Assistant Attorney General, Lisa R. Brenner, Assistant Attorney General, Denver, for Petitioner.

Sparks Willson Borges Brandt & Johnson, P.C., Stephen A. Hess, Colorado Springs, for Respondents.

MARTINEZ, Justice.

We granted certiorari in this real property tax case to determine whether the court of appeals assigned the appropriate burden of proof to a taxpayer in a proceeding before the Colorado Board of Assessment Appeals ("BAA"). Sampson v. Teller County Bd. of Equalization, 80 P.3d 861, 862 (Colo.App.2003). In Sampson, the court of appeals held that the burden of proof in the BAA proceedings is on the taxpayer to establish "an appropriate basis under the market approach for his claims for an alternative reduced valuation of the subject property for the 2001 tax year." 80 P.3d at 862. Because the court of appeals' holding departs from established precedent that a taxpayer must only prove an assessment is incorrect to prevail at a BAA proceeding, we reverse and remand with directions.

I. Facts and Proceedings

Taxpayer, Richard F. Sampson, owns a mobile home and the ten-acre parcel of real property on which it sits in Teller County, Colorado. The mobile home is a 1971 double-wide manufactured home consisting of approximately 1,104 square feet, three bedrooms, and one-and-one-half bathrooms. The home sits on a non-permanent cinder block foundation.

In August 2001, the Teller County Assessor's office issued a Notice of Valuation for Sampson's property indicating a market value of $93,951.00. Sampson did not protest this initial valuation.

After this notice was sent, there were additional mobile home sales in Teller County to provide further sales analyses in the valuation process of mobile home properties. On this basis, the Board of Equalization ("BOE") ordered the Teller County Assessor ("assessor") to perform new valuations for assessment of mobile homes. The assessor revalued Sampson's mobile home and fixed the market value of Sampson's property at $137,919.00.

Sampson protested this revised valuation to the BOE, which affirmed. Sampson then appealed to the BAA, challenging the BOE's decision to uphold the revised valuation and seeking to reinstate the initial $93,951.00 valuation previously assigned to the property.

At the BAA hearing, Sampson appeared pro se via telephone conference call. Sampson maintained the property had been overvalued because the home does not have a permanent foundation and is located on a privately maintained road while the comparable sales used by the BOE were of newer mobile homes on permanent foundations located approximately 25 miles away. He did not, however, introduce evidence of comparable sales of property.

The BAA concluded Sampson "presented sufficient probative evidence and testimony to prove that the subject property was incorrectly valued for the tax year 2001." It explained that: (1) There exists a basis for the differences in value for mobile homes situated on permanent foundations; mobile homes situated on permanent foundations can obtain favorable financing in the market place; (2) the comparable sales presented by the BOE did not accurately compare to Sampson's property; (3) the BOE did not present evidence establishing that older mobile homes not situated on a permanent foundation, like Sampson's, appreciated to the same level as the comparables it used; (4) it disagreed with the comparable sales and adjustment calculations presented by the BOE; and (5) the assessor's office did not address all factors affecting the valuations for mobiles homes of Sampson's type in this area.

The BAA ordered the BOE to reduce the 2001 actual value of Sampson's property to the amount of the initial valuation, $93,951.00, with $63,553.00 allocated to land and $30,398.00 allocated to improvements.

Teller County appealed. In a published opinion, the court of appeals reversed. The court of appeals noted that, although the BOE's valuation was no longer presumptively correct in light of article X, section 20 of the Colorado Constitution, (the Taxpayer's Bill of Rights, or "TABOR"), the taxpayer nevertheless had the burden of proof. The court of appeals held the taxpayer had the burden of proof in the BAA proceeding to establish an appropriate basis for an alternative reduced valuation of the subject property under the applicable statutory scheme. Sampson, 80 P.3d at 862.

Applying this burden of proof, the court held the BAA erred in reducing the subject property's valuation to $93,951.00. Id. Specifically, it concluded that, because the BAA rejected all valuation evidence presented, there existed no competent evidence to support the valuation and, accordingly, the taxpayer failed to meet his burden of providing an appropriate basis for a reduced valuation. Id.

The BAA appealed. We granted certiorari to review the court of appeals' holding.

II. Analysis

The parties do not dispute that a taxpayer challenging an assessment has the burden of proof at a BAA proceeding. See Rule 14(a), 8 C.C.R. 1301-1 (1997). The statutes regulating appeals of valuations by county assessors do not, however, address the taxpayer's specific standard required to meet the burden of proof at the BAA proceeding.

The BAA argues a taxpayer protesting an assessment in a BAA proceeding only has the burden to prove by a preponderance of the evidence that the assessment of the taxpayer's property is incorrect and need not prove an alternative valuation. We agree.

We first review the statutory scheme regulating taxpayer proceedings and the valuation of mobile homes. We then turn to the taxpayer's burden of proof and conclude a taxpayer must only prove, by a preponderance of the evidence, that an assessment is incorrect to prevail at a BAA proceeding. Finally, we determine that article X, section 20, of the Colorado Constitution does not affect this burden of proof.

A. Statutory Scheme

1. Taxpayer Protest Procedures

Article X, section 3(1)(a), of the Colorado Constitution requires that valuations for assessment be based on appraisals by assessing officers. See also § 39-5-104, C.R.S. (2004). Once the assessor determines the actual value of the property and issues a Notice of Valuation, a taxpayer has the right to protest the assessor's valuation. § 39-5-122, C.R.S. (2004). If the assessor denies a taxpayer's protest, the taxpayer may petition the county BOE. § 39-8-106, C.R.S. (2004).

The BOE hears and considers all testimony and exhibits produced by the parties "with no presumption in favor of any pending valuation." See § 39-8-107(1), C.R.S. (2004). The BOE has the authority to "raise, lower, or adjust any valuation for assessment appearing in the assessment roll." § 39-8-102(1), C.R.S. (2004); see Arapahoe County Bd. of Equalization v. Podoll, 935 P.2d 14, 16 (Colo.1997). This authority includes the power to order the county tax assessor to revalue all properties within a municipality based on a recognized disparity in land values between the municipality and surrounding properties. Gilpin County Bd. of Equalization v. Russell, 941 P.2d 257, 262 (Colo.1997).

The assessor must make available, at least two days prior to the hearing, all data used to support the assessor's valuation on taxpayer request. See § 39-8-107(3), C.R.S. (2004); Russell, 941 P.2d at 262. Either the tax assessor or the assessor's representative must be present at the BOE hearing and produce evidence regarding the protested valuation. See § 39-8-107(1); Russell, 941 P.2d at 262.

A taxpayer dissatisfied with a BOE decision denying a petition in whole or in part may submit the case to arbitration, see 39-8-108.5, C.R.S. (2004), or appeal the valuation set by the assessor or the adjusted BOE valuation to either the BAA or the district court of the county for a trial de novo. See § 39-8-108(1), C.R.S. (2004). Both the taxpayer and the assessor are parties to the district court or BAA proceeding and have the right to present evidence. See § 39-8-107(1); Russell, 941 P.2d at 263.

The BAA is comprised of three members. All members of the BAA must be experienced in property valuation and taxation and be registered, licensed, or certificated pursuant to sections 12-61-700 to -718, C.R.S. (2004), which govern real estate appraisers. § 39-2-123, C.R.S. (2004). Likewise, Rules 2.1 to 2.4, 4 C.C.R. 725-2 (2003), of the Rules of the Colorado Board of Real Estate Appraisers set forth the requirements for registration, licensure or certification as a real estate appraiser. These rules require real estate appraisal education programs emphasizing basic appraisal principles and procedures. See id. The education must cover a variety of topics, including legal considerations in appraisal, economic principles, real estate markets and analysis, the valuation process, property description, and the sales comparison approach. See id.

The BAA or district court can review the BOE's decision de novo. Russell, 941 P.2d at 261; § 39-8-108(1). The BAA may not impose a valuation on the property in excess of that set by the BOE. § 39-8-108(5)(a), C.R.S. (2004). With the exception of the cap placed by the BOE on subsequent valuation, the de novo proceeding before the BAA or district court "is commonly understood as a new trial of an entire controversy." Russell, 941 P.2d at 263 (internal quotation and citation omitted). Thus, any evidence that was or could have been presented in the BOE proceeding may be presented to the BAA for a new and separate determination. Id.

2. Valuation of Mobile Homes

A mobile, or "manufactured" home is: "a preconstructed building unit ... without motive power designed and commonly used for residential occupancy by persons in either...