First Nat. Bank v. Bernalillo County Valuation Protest Bd., 2671

Citation560 P.2d 174,1977 NMCA 5,90 N.M. 110
Decision Date18 January 1977
Docket NumberNo. 2671,2671
PartiesPetition of FIRST NATIONAL BANK, Mrs. Helen Baures, John Marron, Tijeras Place Imp. Co., William C. Stein, Albert L. Matthew, Cale L. Karson, Jr., and Kay Karson, and Scanvest I Ltd., Appellants, v. BERNALILLO COUNTY VALUATION PROTEST BOARD, Appellee.
CourtCourt of Appeals of New Mexico

Bernard L. Robinson, Bernard L. Robinson, P.A., Joseph T. Sprague, Stribling, Sprague & Sprague, P.A., Albuquerque, for appellants.

Vance Mauney, Albuquerque, Toney Anaya, Atty. Gen., Santa Fe, John C. Cook, Asst. Atty. Gen., for appellee.


SUTIN, Judge.

This is an appeal from orders entered by the Bernalillo County Valuation Protest Board. The protest was heard by only two members of the board and the order entered was signed by the chairman of the board. This was not in compliance with the law that a majority of the board attend the hearing. Petition of Kinscherff, 89 N.M. 669, 556 P.2d 355 (Ct.App.1976). The orders are void for lack of jurisdiction. We reverse.

This appeal demands additional guidelines for taxpayers and the board.

A. The county assessor has an alternative method of valuation.

The county assessor has a duty to follow a statutory method of valuation as provided in § 72--29--5(B), N.M.S.A.1953 (Repl. Vol. 10, pt. 2, 1975 Supp.). San Pedro South Group v. Bernalillo County Valuation Protest Board, 558 P.2d 53 (Ct.App.1976).

In their protest and at the hearing, taxpayers relied on the 'income method' in determining the valuation of their property for taxation purposes. The assessor had used the 'cost methods of valuation.' Both methods are set forth in the alternative in § 72--29--5(B). It provides that if market value cannot be determined due to the lack of comparable sales, 'then its value shall be determined using an income method or cost methods of valuation.' (Emphasis added).

'It is Taxpayers' position that the meaning of the quoted phrase is that 'an income method' will be used unless it also is inapplicable; then, if an income method cannot be used, 'cost methods' will be used. Taxpayers do not read the phrase to mean that either an income method or cost methods may be used at the Assessor's discretion. If that were the intent of the Legislature, the phrase would have been written in such manner.' We disagree.

The word 'or' as used in a statute is a matter of first impression in New Mexico.

In construing a statute, we must give the word 'or' its ordinary meaning, Mobile America, Inc. v. Sandoval County Commission, 85 N.M. 794, 518 P.2d 774 (1974), unless a different intent is clearly indicated. Winston v. New Mexico State Police Board, 80 N.M. 310, 454 P.2d 967 (1969).

It is agreed that the legislature did give priority to the first method of valuation, a valuation determined by sales of comparable property. It did not do so with reference to the succeeding methods. If the legislature intended to give priority to the second method, the 'income method,' over the third method, the 'cost method,' for any reason, it would have phrased the statute in language similar to the priority established in the first method of valuation.

Ordinarily, the word 'or' as used in a statute is given a disjunctive meaning unless the context and the main purpose of all the words demand otherwise. Eastern Mass. St. Ry. Co. v. Massachusetts Bay T. Auth., 350 Mass. 340, 214 N.E.2d 889 (1966). 'There is nothing to indicate that the word 'or' was used in the statute in other than its ordinary meaning, indicating an alternative such as 'either one or another." United States Fidelity & Guar. Co. v. Security F. & I. Co., 248 S.C. 307, 149 S.E.2d 647, 650 (1966); People v. Smith, 44 Cal.2d 77, 279 P.2d 33 (1955); Council Plaza Redevelopment Corp. v. Duffey, 439 S.W.2d 526 (Mo. 1969); State v. Sawtooth Men's Club, 59 Idaho 616, 85 P.2d 695 (1938); State v. Kress, 105 N.J.Super. 514, 253 A.2d 481 (1969); Wood v. Paulus, 524 S.W.2d 749 (Tex.Civ.App.1975); Central Standard Life Insurance Company v. Davis, 10 Ill.App.2d 245, 134 N.E.2d 653 (1956).

The word 'or' designates alternatives or separate categories. Its ordinary meaning should be followed unless it renders the statute doubtful or uncertain. It does not. The statutory language is clear and unambiguous.

In the instant case, the statute did not give taxpayers the right to determine the method of valuation. It gave the county assessor the right to use either the 'income method or cost methods of valuation.' (Emphasis added).

B. Taxpayer is entitled to a fair hearing.

On cases appealed to this Court, we find that hearings are two-pronged affairs which constitute confusion confounded. Taxpayer usually proceeds pro se to prove the merits of his protest by a method of valuation that he chooses which is usually different from that used by the assessor. The assessor usually produces no evidence on the taxpayer's method and relies on his own method of valuation. This problem must be resolved.

The right to a fair hearing presupposes that the taxpayer has been informed, prior to the hearing, of the method of valuation used by the county assessor. Otherwise, he cannot be expected to intelligently protest an assessment made.

(1) Taxpayer is entitled to notice from the assessor.

Section 72--31--24(B)(3) provides that taxpayer's petition of protest filed with the county assessor shall:

(3) state why the property owner believes the value . . . is incorrect and what he believes the correct value . . . to be; . . .

At the time the protest is filed, taxpayer does not know the method of valuation used by the assessor. No provision is made for notification of the assessor's method of valuation. As a result, taxpayer is unable to state why he believes the value is incorrect, or taxpayer states a method of valuation different from that used by the assessor. We believe the legislature should amend the 'Property Tax Code,' §§ 72--28--1, et seq., to give notice to the taxpayer of the method of valuation used by the assessor, and require the assessor to furnish taxpayer a copy of the appraisal made.

Nevertheless, taxpayer has the right to discover the method of valuation used. In Matter of Protest of Miller, 88 N.M. 492, 495, 542 P.2d 1182, 1185 (Ct.App.1975), we held that taxpayer has 'a right to discovery similar in scope to that granted by Rules 26 to 37 of the Rules of Civil Procedure (§§ 21--1--1(26) to 21--1--1(37), N.M.S.A.1953 (Repl. Vol. 4, 1970)).'

By this discovery process, taxpayer can obtain all information on the method of valuation used by the assessor.

(2) As an alternative, taxpayer is entitled to assistance from the board.

A protest board is a quasi-judicial body. It has a duty to see that a fair hearing is held. A taxpayer, with or without the assistance of counsel, is entitled to know the method of valuation used by the assessor, as well as the techniques of appraisal made to warrant the valuation. At the time taxpayer is given notice of a hearing on the merits, the board should give taxpayer notice that the method of valuation used, and the appraisal made, are available in its office for inspection. If it desires, it can send this information to taxpayer along with the notice of the hearing on the merits.

(3) As another alternative, separate hearings can be held.

A two step process is necessary: (1) the selection of a proper method of valuation and (2) a hearing before the board on the merits.

Where a dispute arises between the assessor's and the taxpayer's methods of valuation, the statute makes no provision for a solution of this dispute.

At a hearing before the board on the selection of a method of valuation, taxpayer shall present competent evidence to create an issue of fact and request the board to determine the proper method of valuation. When a proper method of valuation has been determined, a final hearing can later be held to decide the merits of the protest. If the assessor's method of valuation is not selected by the board, the assessor shall revalue the property based upon the method selected. If the method selected is contested on appeal, we can decide which method was proper under the facts of the particular case.

C. Accepted appraisal techniques shall be used by county assessor, and by taxpayer to overcome presumption of correctness of assessor's valuation.

Section 72--29--5(B) provides:

In using any of the methods of valuation authorized by this subsection the valuation authority shall apply generally accepted appraisal techniques.

On the matter of the application of 'generally accepted appraisal techniques' by the county assessor, he uses the current New Mexico State Manual. Section 72--28--7. We have no way of knowing whether this manual is a 'generally accepted appraisal technique.' If necessary, taxpayer has a duty to dispute this fact by expert testimony.

The value of property determined by the county assessor is presumed to be correct. Section 72--31--6. This presumption can be overcome by taxpayer showing that the assessor did not follow the statutory provisions of the Act or by presenting evidence tending to dispute the factual correctness of the valuation. McConnell v. State ex rel. Bureau of Revenue, 83 N.M. 386, 492 P.2d 1003 (Ct.App.1971). Taxpayer can show that the assessor failed to determine valuation by any statutory method, San Pedro South Group, supra, or present evidence of value based on generally accepted appraisal techniques that tend to dispute the factual correctness of the method of valuation used by the baord. Peterson Prop., Etc. v. Valencia Cty. Val. Protests Bd., 89 N.M. 239, 549 P.2d 1074 (Ct.App.1976).

When a taxpayer overcomes the presumption of the correctness of the assessor's method of valuation, the burden shifts to the assessor to prove that his method of valuation utilized a 'generally accepted appraisal technique.' The board shall then determine the merits of the protest.

In the instant case, taxpayers did not overcome the presumption...

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