Chief Industries, Inc. v. Hamilton County Bd. of Equalization, 86-059

• Citation: 422 N.W.2d 324,228 Neb. 275
• Decision Date: 21 April 1988
• Docket Number: No. 86-059,86-059
• Parties: CHIEF INDUSTRIES, INC., Appellee, v. HAMILTON COUNTY BOARD OF EQUALIZATION, Appellant.
• Court: Supreme Court of Nebraska

Page 324

422 N.W.2d 324

228 Neb. 275

CHIEF INDUSTRIES, INC., Appellee, v. HAMILTON COUNTY BOARD OF EQUALIZATION, Appellant.

No. 86-059.

Supreme Court of Nebraska.

April 21, 1988.

Syllabus by the Court

1. Taxation: Appeal and Error. An appeal from a judgment of the district court concerning action by a county board of equalization is heard as in equity and reviewed de novo.

2. Taxation: Valuation. A taxpayer may question the assessed value (actual value) of the taxpayer's real estate, the lack of proportionate and uniform valuation of the property, or both issues, in a proceeding before a board of equalization.

3. Taxation: Valuation: Appeal and Error. Neb.Rev.Stat. § 77-1511 (Reissue 1986) restricts a taxpayer's appeal to a consideration of questions raised before the board of equalization, and the court is without power to adjudicate any other factual question or issue in the taxpayer's appeal.

4. Taxation: Valuation: Appeal and Error. A mere change in the level of the economic relief sought is not such a change of a factual question or issue as to be prohibited by Neb.Rev.Stat. § 77-1511 (Reissue 1986).

5. Pretrial Procedure: Appeal and Error. Trial courts have broad discretion with respect to sanctions involving discovery procedures, and their rulings thereon will not be reversed in the absence of an abuse of discretion.

6. Constitutional Law: Taxation: Valuation. The Nebraska Constitution requires that taxes must be levied by valuation uniformly and proportionately on all tangible property except motor vehicles.

7. Taxation: Valuation. Neb.Rev.Stat. § 77-201 (Reissue 1986) requires that all property be taxed at actual value.

8. Taxation: Valuation: Proof. The taxpayer has the burden of proving that the value of the taxpayer's property has not been fairly and proportionately equalized with all other property.

9. Taxation: Valuation: Proof: Presumptions. There is a presumption that a board of equalization has faithfully performed its official duties in making an assessment, which presumption remains until there is competent evidence to the contrary. Such presumption disappears when there is competent evidence on appeal to the contrary. From that point on the reasonableness of the valuation fixed by the board of equalization becomes an issue of fact based upon the evidence, with the burden of showing such valuation to be unreasonable resting on the appellant.

10. Taxation: Valuation. A taxpayer is entitled to have its property assessed uniformly and proportionately with other property in the county, even though the result may be that it is assessed at less than actual value.

Michael J. Owens, Hamilton Co. Atty., for appellant.

Norman H. Wright of Fraser, Stryker, Veach, Vaughn, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appellee.

BOSLAUGH, CAPORALE, and GRANT, JJ., and RIST and CLARK, District judges.

CLARK, District Judge.

This is an action on appeal from a finding of the Hamilton County Board of Equalization (hereinafter board), regarding the 1984 real property tax assessment of the taxpayer, Chief Industries, Inc. (hereinafter Chief). Chief owns and operates a trailer-manufacturing facility consisting of seven buildings located in Hamilton County near the city of Aurora. For tax year 1984, the Hamilton County assessor found the actual value of Chief's property to be $1,608,125. Chief appealed to the board on the bases that the valuation was set too high and that it was not equalized with other real property in Hamilton County, particularly agricultural land. The board affirmed the assessor's action, and Chief appealed to the district court.

Although Chief's appeal was premised on both theories presented to the board, at trial Chief conceded that its property was assessed at actual value and based its argument only on the issue of failure of the assessor to equalize the assessment with those on agricultural land in Hamilton County. Initially, at the board level, Chief sought a reduction to $1,206,093, i.e., a 25-percent reduction. However, after introduction of evidence at the district court trial, Chief was granted leave to amend its prayer to request a reduction of actual value to not greater than $737,808. The board cross-appealed to the district court, seeking an increase in the assessor's valuation.

At trial the district court determined that the actual value of Chief's property as of January 1, 1984, was $1,608,125, as determined by the assessor. The district court further found that the board had systematically valued agricultural land in Hamilton County at 50 percent of its actual value for taxation purposes and that the valuation of Chief's property must be equalized with the values of other real property in Hamilton County. The district court accordingly ordered that the valuation of Chief's property for 1984 be set at $804,062, and found that all taxes levied and/or collected on assessed values exceeding that figure were illegally levied and collected, were a denial of equal protection, and were ordered refunded.

On appeal, the board makes five assignments of error, which may be summarized as follows: (1) The court erred in allowing Chief to amend its petition at trial to reflect a request for a reduction in valuation of its property to an amount less than that originally stated in its protest filed before the board of equalization; (2) the court erred in allowing Chief to present evidence (a study conducted by William Fischer) which Chief had failed to disclose to the board in pretrial discovery; and (3) the court erred in finding that the board had failed to equalize the valuation of Hamilton County property and in reducing the assessment of Chief's property to 50 percent of its actual value.

We first note that an appeal from the district court concerning action by a county board of equalization is heard as in equity and reviewed de novo. Kearney Convention Center v. Board of Equal., 216 Neb. 292, 344 N.W.2d 620 (1984); Fremont Plaza v. Dodge County Bd. of Equal., 225 Neb. 303, 405 N.W.2d 555 (1987). A taxpayer may question the assessed value (actual value) of its real estate, the lack of proportionate and uniform valuation of the property, or both issues, in a proceeding before a board of equalization. Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d 366 (1987); Fremont Plaza v. Dodge County Bd. of Equal., supra.

"Neb.Rev.Stat. § 77-1511 (Reissue 1986) restricts a taxpayer's appeal to a consideration of questions raised before the board of equalization, and the court is without power to adjudicate any other factual question or issue in the taxpayer's appeal." (Emphasis supplied.) (Syllabus of the court.) Gordman Properties Co. v. Board of Equal., supra.

The board cites Nebraska Telephone Co. v. Hall County, 75 Neb. 405 106 N.W. 471 (1906), in support of its claim that Chief should not have been allowed to amend the dollar amount of relief sought. In that case, the taxpayer argued excessive valuation to the board based on capitalization of gross receipts. In the district court, the taxpayer argued that the use of pole value multipliers was erroneous because the pole count was incorrect. We held that the latter issue was not raised before the board and could not be raised in district court. Other cases have used a similar rationale. See Reichenbach Land & Loan Co. v. Butler County, 105 Neb. 209, 179 N.W. 1015 (1920), where the taxpayer failed to argue before the board but argued in district court that the value of bank stock and shares was not assessable at all. See, also, Reimers v. Merrick County, 82 Neb. 639, 118 N.W. 113 (1908), where the taxpayer argued before the board that the property in question was acquired after the assessment date, and in district court argued that the assessment statute was unconstitutional. Also, in Gordman Properties, supra, the taxpayer had consolidated appeals for the years 1983 and 1984. In the 1983 hearing, the issue before the board was based solely on the excessiveness of the assessment, but on appeal the taxpayer added the allegation that the value of its property had not been proportionately equalized with all other property. We held that this latter issue had not been presented to the board and therefore could not be considered on appeal. The distinction, though, is that in these cases there was a different issue presented before the court than was presented to the board. In the instant case, the issues presented in district court were the same as presented to the board, i.e., the alleged overvaluation of Chief's property and the failure of the assessor to equalize the value of Chief's property with other real property in Hamilton County. There was no change of issues, merely a change in the level of economic relief sought. The board's contention in this regard is without merit.

In regard to the board's assignment of error relating to admission of evidence not disclosed in pretrial discovery, it is noted that the trial court, after first sustaining the objection, conducted an evidentiary hearing in this regard. This hearing disclosed considerable confusion between counsel as to whether Fischer's data had been made available to the board. Following this hearing, the court reversed its ruling and allowed the evidence to be introduced. An offer of continuance of trial was declined by the board. Trial courts have broad discretion with respect to sanctions involving discovery procedures. Priest v. McConnell, 219 Neb. 328, 363 N.W.2d 173 (1985); Cardenas v. Peterson Bean Co., 180 Neb. 605, 144 N.W.2d 154 (1966). We cannot say the trial court abused its discretion in allowing this evidence to be admitted. Further, it would appear from the record that when the exhibit was reoffered, the board withdrew its objection. The board, therefore, cannot now be heard to complain of error in this regard.

At trial, Evelyn Zehr, the assessor for Hamilton County, was called as a witness for Chief. She testified that...