Bonstores Realty One, LLC v. City of Wauwatosa

• Citation: 351 Wis.2d 439,2013 WI App 131,839 N.W.2d 893
• Decision Date: 08 October 2013
• Docket Number: No. 2012AP1754.,2012AP1754.
• Parties: BONSTORES REALTY ONE, LLC, Plaintiff–Appellant, v. CITY OF WAUWATOSA, Defendant–Respondent.
• Court: Court of Appeals of Wisconsin

351 Wis.2d 439

839 N.W.2d 893

2013 WI App 131

BONSTORES REALTY ONE, LLC, Plaintiff–Appellant,

v.CITY OF WAUWATOSA, Defendant–Respondent.

No. 2012AP1754.

Court of Appeals of Wisconsin.

Submitted on Briefs Apr. 2, 2013.

Opinion Filed Oct. 8, 2013.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Matthew J. Fleming of Murphy Desmond S.C. of Madison.

On behalf of the defendant-respondent, the cause was submitted on the brief of Ryan G. Braithwaite of Crivello Carlson, S.C. of Milwaukee and Amy R. Seibel of Seibel Law Offices LLC of Mequon.

Before FINE, KESSLER and BRENNAN, JJ.

KESSLER, J.

¶ 1 Bonstores Realty One, LLC, (Bonstores) appeals an order of the circuit court which dismissed Bonstores's complaint against the City of Wauwatosa (the City). Bonstores alleged that the City's property tax assessment on Bonstores's real property was incorrect. The circuit court, in a cogent and thoughtful decision, concluded that Bonstores failed to overcome the statutory presumption that the City correctly assessed Bonstores's property in 2009 and 2010. For the reasons below, we affirm.

BACKGROUND

¶ 2 Bonstores is the owner of the Boston Store department store, located at Mayfair Mall, in the City of Wauwatosa. Bonstores acquired this store in March 2006 as a result of its parent company's purchase of a large number of stores throughout the United States from Saks, Inc. (Saks). The purchase of all of the properties totaled over one billion dollars. In tax year 2009, the City assessed the subject property at $25,593,300. Bonstores appealed to the City of Wauwatosa Board of Review, contending that the property's fair market value, as of January 1, 2009, was $11,000,000. The Board upheld the City's assessment. In December 2009, the City issued Bonstores a real property tax bill.

¶ 3 Pursuant to Wis. Stat. § 74.37 (2009–10),¹ Bonstores brought an action in the Milwaukee County Circuit Court, arguing that the City's 2009 and 2010 tax assessments were excessive. During a trial to the court, Bonstores and the City both presented expert witnesses who testified about their respective valuation methodologies and their opinions as to the fair market value of the property. Bonstores's expert, Michael Kelly, testified that in his opinion the fair market value of the Boston Store property was $11,000,000. The City's expert, Mark Kenney, testified that in his opinion the fair market value of that property was $27,600,000. The court essentially rejected the values of both experts when it concluded that Bonstores failed to overcome by “significant contrary evidence” the statutory presumption that the subject property had been justly and equitably assessed at $25,593,300, which the court found “represents [the] fair market value of the subject on January 1st of 2009.” This appeal follows.

DISCUSSION

¶ 4 On appeal, Bonstores argues that: (1) the circuit court erred by concluding that Bonstores failed to overcome the presumption that the City's assessment was correct; (2) the circuit court erroneously relied on information pertaining to the 2006 acquisition of the subject property, appraisal statements and reports from the firm Cushman and Wakefield, a real estate transfer return, and an appraisal from the firm Ernst & Young; and (3) no evidence supports the circuit court's negative findings regarding Kelly's testimony as to comparable properties. Additional facts will be discussed as relevant to the discussion.

Standard of Review.

¶ 5 Bonstores argues that “[t]he substantial evidence test is the appropriate standard to apply to a challenger's evidence to determine whether the presumption of accuracy [of the assessment] is overcome.” However, Bonstores is mistaken. When considering an excessive assessment claim, the circuit court need not defer to any determination made at a previous proceeding before the board of review. Allright Props., Inc. v. City of Milwaukee, 2009 WI App 46, ¶ 12, 317 Wis.2d 228, 767 N.W.2d 567. Instead, the court must accord the assessor's assessment a presumption of correctness. Id. The presumption of correctness does not apply, though, if the challenging party presents “significant contrary evidence[,]” or shows that the assessment “does not apply the principles in the Property Assessment Manual.” Adams Outdoor Adver., Ltd. v. City of Madison, 2006 WI 104, ¶¶ 25, 56, 294 Wis.2d 441, 717 N.W.2d 803.

¶ 6 On appeal, we defer to the circuit court's findings of fact when resolving conflicting evidence. Allright Props., Inc., 317 Wis.2d 228, ¶ 13, 767 N.W.2d 567. We will not upset the court's factual findings, including findings involving the credibility of witnesses, unless they are clearly erroneous. SeeWis. Stat. § 805.17(2); Lessor v. Wangelin, 221 Wis.2d 659, 665–66, 586 N.W.2d 1 (Ct.App.1998). In particular, it is within the province of the factfinder to determine the weight and credibility of expert witnesses' opinions. Bloomer Housing Ltd. P'ship v. City of Bloomer, 2002 WI App 252, ¶ 12, 257 Wis.2d 883, 653 N.W.2d 309. Conversely, application of the law to the facts presents a question of law which we review de novo.Allright Props., Inc., 317 Wis.2d 228, ¶ 13, 767 N.W.2d 567. Thus, we independently review whether a valuation complied with the statutes and the Wisconsin Property Assessment Manual. See id.

The Presumption is not “overcome” just because contrary evidence (even “substantial” contrary evidence) is presented.

¶ 7 Wisconsin Stat. § 70.49(1) requires a municipal assessor to attach a particular affidavit to the completed assessment role when she reports her conclusions of assessed values. Thereafter each assessment “shall, in all actions and proceedings involving such values, be presumptive evidence that all such properties have been justly and equitably assessed.” Wis. Stat. § 70.49(2).

¶ 8 Wisconsin Stat. § 903.01 describes, generally, how presumptions are handled in civil cases. The statute provides:

Presumptions in general. Except as provided by statute, a presumption recognized at common law or created by statute, including statutory provisions that certain basic facts are prima facie evidence of other facts, imposes on the party relying on the presumption the burden of proving the basic facts, but once the basic facts are found to exist the presumption imposes on the party against whom it is directed the burden of proving that the nonexistence of the presumed fact is more probable than its existence.

The 1974 Judicial Committee Notes explaining the statute's adoption explain why Wisconsin rejected the approach to presumptions which Bonstores advocates:

The Model Code of Evidence (1942) ... adopted the “bursting bubble” theory of presumptions ... under which a presumption vanishes upon the introduction of evidence which would support a finding of the nonexistence of the presumed fact....

Under the Model Code, the jury was not to learn of the presumption for it was a tool exclusively used by the judge. Its procedural effect was to shift the burden of producing evidence (not persuasion) of the nonexistence of the presumed fact to the party against whom the presumption operates.... When the presumed fact was essential, the judge determined whether that burden had been met upon motions for nonsuit or directed verdict.

The Uniform Rules of Evidence (1953) ... accepted ... with respect to presumptions derived from facts which have probative value as evidence of the existence of the presumed fact (presumptions “based upon logic” or “grounded upon reasonable inference”). The burden of persuasion as well as the burden of producing evidence was shifted, and although rebutting evidence had been produced, the inference from the presumption survived and was sufficient to support a jury verdict, and the jury was to be instructed with respect to the presumption and told that it shall stand until met by evidence of equal weight....

[Wisconsin Stat. § ]903.01 accords to presumptions based on policy the same effect as those based upon logic or reasonable inference by shifting the burden of persuasion as well as the burden of producing evidence. The section effectuates a major change in Wisconsin law.

....

The Model Code adopted the ... view that inconsistent presumptions cancelled each other. Because the Uniform Rules shift the burden of persuasion with respect to some presumptions, but not others, it was necessary to promulgate Uniform Rule 15 dealing with inconsistent presumptions. Because presumptions under s. 903.01 would have equal procedural effect in civil cases, and under s. 903.03 would have equal procedural effect in criminal cases, there is no provision in these sections for the treatment of inconsistent presumptions. Should inconsistent presumptions be established in a case, the weight of the evidence establishing the facts upon which the presumptions are premised is for the trier of the fact and not to be dealt with by the judge in the discharge of his function with respect to the law.

¶ 9 Once the presumed fact (the assessed value) is established, Wis. Stat. § 903.01 shifts the burden of producing evidence to the opponent of the presumed fact—here to Bonstores—to produce evidence that it is more probable than not that the assessed value is not correct. The presumption (that the City assessed value is correct) does not disappear simply because contrary evidence exists. Although the burden of producing evidence shifts, the burden of persuasion never leaves the proponent of the presumption. Professor Daniel D. Blinka explains:

[Wisconsin Stat.] § 903.01 provides that the party relying on the presumption ... has the burden of proving the basic facts. As used in the rule, the term “burden” refers unambiguously to both the burden of production and the burden of persuasion. Satisfying the burden of production allows the proponent to put the presumption before the trier of fact for consideration. The presumption is not operative, however, unless the proponent convinces the...