In re Board of Tax Appeals, 082619 IDSCCI, 46191
|Opinion Judge:||MOELLER, JUSTICE|
|Party Name:||In Re: Board of Tax Appeals, Appeal No. 16-A-1079. v. SSI FOOD SERVICES, INC., Respondent-Appellant-Cross Respondent. BRIAN STENDER, Canyon County Assessor, Petitioner-Respondent-Cross Appellant,|
|Attorney:||Pickens, Cozakos, PA, Boise, for Appellant-Cross Respondent. Terri Pickens Manweiler argued. Canyon County Prosecutor's Office, Caldwell, for Respondent-Cross Appellant. Bradford D. Goodsell argued.|
|Judge Panel:||Chief Justice BURDICK, and Justices BRODY, BEVAN and STEGNER CONCUR.|
|Case Date:||August 26, 2019|
|Court:||Supreme Court of Idaho|
Appeal from the District Court of the Third Judicial District of the State of Idaho, Canyon County. Gene A. Petty, District Judge.
The order of the district court is affirmed.
Pickens, Cozakos, PA, Boise, for Appellant-Cross Respondent. Terri Pickens Manweiler argued.
Canyon County Prosecutor's Office, Caldwell, for Respondent-Cross Appellant. Bradford D. Goodsell argued.
NATURE OF THE CASE
SSI Food Services Inc. (SSI) appeals from the district court's decision rejecting the Board of Tax Appeal's (BTA) 2016 assessed value of SSI's food processing facility in favor of the Canyon County Assessor's (Canyon County) significantly higher valuation. On appeal, SSI contends that the district court erred when it modified the BTA's valuation because: (1) Canyon County did not meet its burden of proving that the BTA's valuation was erroneous; (2) the modified valuation is not supported by substantial and competent evidence; and (3) the conclusions of law contained in the district court's findings of fact and conclusions of law are inadequate. SSI also appeals from the district court's decision to allow Canyon County's expert to testify on rebuttal. Canyon County cross-appeals the district court's decision that SSI was not obligated to pay penalties and interest on the unpaid amount of property taxes. For the reasons stated below, we affirm the district court's decision in all respects.
II. FACTS AND PROCEDURAL BACKGROUND
In 2013, SSI purchased a food processing plant in Wilder, Idaho, which continues to operate as a meat processing facility. The plant is located on three contiguous parcels of land in Canyon County. The subject parcel (the property) consists of 24.69 acres of land and contains several large commercial buildings.
In 2016, Canyon County assessed the property for tax purposes at $18, 286, 630, consisting of $538, 830 for the land and $17, 747, 800 for the improvements.1 SSI appealed the decision to the Canyon County Board of Equalization (BOE). SSI initially claimed the property had a market value of $11, 000, 000. The BOE upheld Canyon County's valuation of $18, 286, 630. SSI appealed the decision to the BTA.
In the meantime, both Canyon County and SSI hired experts to appraise the property. Michael Cowan appraised the property for Canyon County and Paul Hyde appraised the property for SSI. Cowan initially claimed the property had a market value of $23, 000, 000 and Hyde claimed the property had a market value of $6, 500, 000.2
After a hearing, the BTA held that SSI satisfied its burden of proving that the assessed value of $18, 286, 630 was erroneous; however, the BTA did not find adequate support for Hyde's claimed value of only $6, 500, 000. The BTA then reduced the value to $10, 000, 000 without further explanation. Canyon County filed a petition for reconsideration and rehearing. The BTA summarily denied the petition. As a result of the reduced valuation, the Canyon County Treasurer adjusted the amount of taxes owed to reflect the $10, 000, 000 valuation.
On May 25, 2017, Canyon County filed a petition for judicial review of the BTA's decision. Trial was set to commence on March 20, 2018. Prior to trial, Cowan revised his appraisal report twice.3 Hyde reviewed Cowan's first revised appraisal. In response, Canyon County hired J. Philip Cook to review Hyde's appraisal report, to bolster Cowan's appraisal report, and to provide his own opinion of value if necessary.4 In his initial appraisal review, Cook reserved the "[r]ight to supplement [his] report after inspection and to address any 'additional relevant information' that comes to light prior to trial." On January 15, 2018, Cook was granted access to inspect the property and later revised his appraisal accordingly.
The parties stipulated to a discovery schedule, agreeing that the disclosure deadline for rebuttal experts was ninety days prior to trial, or December 20, 2017. Canyon County disclosed Cook as a rebuttal expert on December 20, 2017. SSI sought to exclude the testimony and report of Cook, arguing that "[t]he testimony and opinions were not timely disclosed pursuant to the Court's Scheduling Order and the Stipulation." The district court denied SSI's motion.
At trial, Canyon County called Cowan during its case-in-chief, while SSI called three witnesses: Hyde, Dave Kubosumi (SSI's engineering manager), and David Smith (SSI's tax expert). During its rebuttal, Canyon County called Cook. SSI renewed its motion to exclude Cook as an expert. The court denied SSI's motion, but limited Cook's testimony "to why he believes the opinion of Mr. Hyde is incorrect." Cook was not allowed to "[g]o into Hyde's criticism of Cook's report" or bolster Cowan's report. The court also allowed Cook to express his own opinion of value. On May 2, 2018, the district court entered its Findings of Fact and Conclusions of Law, holding that Canyon County "[m]et its burden to show that the value of the property exceeds $10, 000, 000. The conclusion of the Board of Tax Appeals was erroneous. The market value of the property on January 1, 2016 was, for ad valorem purposes, $17, 000, 000."
As a result of the district court's increased valuation, Canyon County sought additional taxes in the amount of $97, 770.12 and interest and penalties in the amount of $18, 119.27. SSI objected to the penalties and interest. At the hearing on the matter, Canyon County argued that it should be entitled to interest on the underpayment of taxes during the pendency of the appeal to the district court. SSI argued that it did not owe interest and penalties because "[it] paid all taxes when due." The district court entered its Judgment on June 21, 2018, ordering SSI to pay additional property taxes totaling $97, 770.12, with no added interest or penalties.
III. STANDARD OF REVIEW
"Whenever any taxpayer, assessor, the state tax commission or any other party appearing before the board of tax appeals is aggrieved by a decision of the board of tax appeals or a decision on a motion for rehearing, an appeal may be taken to the district court . . . ." I.C. § 63-3812. "In a challenge to the assessor's valuation of the property, 'the value of property for purposes of taxation as determined by the assessor is presumed to be correct . . . .'" Merris v. Ada Cty., 100 Idaho 59, 64, 593 P.2d 394, 399 (1979) (quoting Appeals of Sears, Roebuck & Co., 74 Idaho 39, 46, 256 P.2d 526, 530 (1953)).
Appeals "shall be heard and determined by the court without a jury in a trial de novo on the issues in the same manner as though it were an original proceeding in that court." I.C. § 63-3812(c). We have defined trial de novo to mean "a trying of the matter anew-the same as if it had never been heard before." Canyon Cty. Bd. of Equalization v. Amalgamated Sugar Co., LLC, 143 Idaho 58, 61, 137 P.3d 445, 448 (2006) (quoting Gilbert v. Moore, 108 Idaho 165, 168, 697 P.2d 1179, 1182 (1985)).
"The burden of proof shall fall upon the party seeking affirmative relief to establish that the decision made by the board of tax appeals is erroneous. A preponderance of the evidence shall suffice to sustain the burden of proof." I.C. § 63-3812(c). "Factual determinations are not erroneous when they are supported by competent and substantial evidence even though conflicting evidence exists." Greenfield Village Apartments, L.P. v. Ada Cty., 130 Idaho 207, 209, 938 P.2d 1245, 1247 (1997). "Evidence is regarded as substantial if a reasonable trier of fact would accept it and rely upon it in determining whether a disputed point of fact has been proven." The Senator, Inc. v. Ada Cty., Bd. of Equalization, 138 Idaho 566, 574, 67 P.3d 45, 53 (2003). "Therefore, this Court's inquiry is limited to whether the district court's decision, based on the testimony and evidence received and not objected to [as incompetent], was clearly erroneous." PacifiCorp v. Idaho State Tax Comm'n, 153 Idaho 759, 768, 291 P.3d 442, 451 (2012).
"This Court exercises free review over the district court's conclusions of law to determine whether the court correctly stated the applicable law and whether the legal conclusions are sustained by the facts found." Id. at 767, 291 P.3d at 450 (quoting Kennedy v. Schneider, 151 Idaho 440, 442, 259 P.3d 586, 588 (2011)). This Court also exercises free review over the construction and application of a statute. Amalgamated Sugar Co., LLC, 143 Idaho at 60, 137 P.3d at 447.
"The standard of review of a trial court's decision regarding the admission of evidence in rebuttal is one of deference to...
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