In re Cain, S-14-764.

• Decision Date: 28 August 2015
• Docket Number: No. S-14-764.,S-14-764.
• Parties: DONALD V. CAIN, JR., APPELLANT, v. CUSTER COUNTY BOARD OF EQUALIZATION, APPELLEE.
• Court: Nebraska Supreme Court

291 Neb. 730

DONALD V. CAIN, JR., APPELLANT, v. CUSTER COUNTY BOARD OF EQUALIZATION, APPELLEE.

No. S-14-764.

SUPREME COURT OF NEBRASKA

August 28, 2015

1. Taxation: Judgments: Appeal and Error. Appellate courts review decisions rendered by the Tax Equalization and Review Commission for errors appearing on the record.

2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, an appellate court's inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

3. Taxation: Appeal and Error. Questions of law arising during appellate review of Tax Equalization and Review Commission decisions are reviewed de novo on the record.

4. Jurisdiction. A question of jurisdiction is a question of law.

5. Appeal and Error. Although an appellate court ordinarily considers only those errors assigned and discussed in the briefs, the appellate court may, at its option, notice plain error.

6. ___. Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process.

7. Jurisdiction: Appeal and Error. Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.

8. Statutes: Appeal and Error. An appellate court will not read into a statute a meaning that is not there.

9. Appeal and Error. An alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error to be considered by an appellate court.

10. Taxation: Statutes: Appeal and Error. The meaning of a statute is a question of law, and a reviewing court is obligated to reachits conclusions independent of the determination made by the Tax Equalization and Review Commission.

11. Statutes: Legislature: Presumptions. The Legislature is presumed to know the general condition surrounding the subject matter of a legislative enactment, and it is presumed to know and contemplate the legal effect that accompanies the language it employs to make effective the legislation.

12. Constitutional Law: Rules of the Supreme Court: Notice: Statutes: Appeal and Error. Strict compliance with Neb. Ct. R. App. P. § 2-109(E) (rev. 2014) is required in order for an appellate court to consider a challenge to the constitutionality of a statute.

13. Taxation: Valuation: Presumptions: Proof. In protests before a county board of equalization, the valuation by the assessor is presumed to be correct. The burden of proof rests upon the taxpayer to rebut this presumption and to prove that an assessment is excessive.

14. Counties: Evidence. The standard generally applicable in proceedings before county boards, including monetary disputes, is a preponderance, or greater weight, of the evidence.

15. Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.

Appeal from the Tax Equalization and Review Commission. Reversed and remanded.

Patrick M. Heng and Lindsay E. Pedersen, of Waite, McWha & Heng, and Steven P. Vinton, of Bacon & Vinton, L.L.C., for appellant.

Steven R. Bowers, Custer County Attorney, and Glenn A. Clark for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.

WRIGHT, J.

I. NATURE OF CASE

In 2012, the Custer County assessor (Assessor) increased the assessed value of property owned by Donald V. Cain, Jr., from $734,968 to $1,834,925. Cain challenged this valuation increase by filing petitions with the Tax Equalizationand Review Commission (TERC) pursuant to Neb. Rev. Stat. § 77-1507.01 (Reissue 2009). A divided panel of two TERC commissioners affirmed the Assessor's increased valuations for 2012, and Cain appeals. Because we find plain error in the standard of review applied by TERC to Cain's petitions, we reverse the order of TERC which affirmed the Assessor's valuations and remand the cause for reconsideration on the record using the preponderance, or greater weight, of the evidence standard applicable to protests before a county board of equalization.

II. SCOPE OF REVIEW

[1,2] Appellate courts review decisions rendered by TERC for errors appearing on the record. Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750 (2013). When reviewing a judgment for errors appearing on the record, an appellate court's inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. Id.

[3,4] Questions of law arising during appellate review of TERC decisions are reviewed de novo on the record. Id. A question of jurisdiction is a question of law. Sherman T. v. Karyn N., 286 Neb. 468, 837 N.W.2d 746 (2013).

[5,6] Although an appellate court ordinarily considers only those errors assigned and discussed in the briefs, the appellate court may, at its option, notice plain error. Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012). Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process. Id.

III. FACTS

Cain owns 10 contiguous parcels of land in Custer County, Nebraska, which total over 1,093 acres. Approximately 70 percent of the property, or 756 acres, is irrigated "native grass" upon which Cain grazes cattle. The remainder of the property is nonirrigated grassland.

In 2012, as the result of a change in the way the Assessor classified irrigated grassland for purposes of valuation, there was a dramatic increase in the assessed value of the irrigated portions of Cain's property. The manner in which the Assessor classified and valued the nonirrigated portions of his property did not change. Almost entirely due to the change in valuation of the irrigated grassland, the total assessed value of the parcels increased from $734,968 to $1,834,925.

In situations such as this, where there is a change in the assessed value of real property, Neb. Rev. Stat. § 77-1315(2) (Supp. 2011) requires the county assessor to send notice to the property owners on or before June 1. But in the instant case, for reasons that are not clear from the record, Cain never received such notice. He did not learn of the change in assessed values until November 2012, when he contacted the Assessor.

By the time Cain learned of the change in assessed values, the deadline to file protests with the county board of equalization pursuant to Neb. Rev. Stat. § 77-1502(1) (Cum. Supp. 2014) had passed. Consequently, he sought to challenge the valuation increases pursuant to § 77-1507.01. This statute provides that "on or before December 31," a person may petition TERC "to determine the actual value or special value of real property . . . if a failure to give notice prevented timely filing of a protest or appeal provided for in sections 77-1501 to 77-1510."

On December 28, 2012, Cain petitioned TERC to determine the actual value of each parcel pursuant to § 77-1507.01. He alleged that he had not received the notices of valuation increase required by § 77-1315(2) and that he would have filed valuation protests with regard to each parcel if he had received the required notices. He claimed that the actual value of the parcels was $778,625 and asked TERC to hold a hearing to determine the actual value of his property for tax year 2012.

TERC held two separate hearings on Cain's petitions. On each occasion, the hearing was held before commissionersNancy J. Salmon and Thomas D. Freimuth. At the time of these hearings, TERC had three commissioners, and two commissioners constituted a quorum to transact business. See Neb. Rev. Stat. §§ 77-5003(1) and 77-5005(2) (Cum. Supp. 2014).

The first hearing was a "show cause hearing" to determine if TERC had jurisdiction over Cain's petitions. The jurisdictional question was whether Cain was entitled to file his petitions pursuant to § 77-1507.01. TERC determined (1) that Cain had "provided sufficient evidence that the . . . Assessor failed to provide proper notice as required by . . . section 77-1315"; (2) that "this failure prevented [Cain] from timely filing protests by June 30, 2012, under . . . section 77-1502"; and (3) that Cain "had until December 31, 2012, to file appeals with [TERC] concerning his tax valuations under . . . section 77-1507.01." Therefore, TERC concluded that it had jurisdiction to consider Cain's petitions.

At a hearing on the merits, Salmon and Freimuth heard evidence that for purposes of valuation, the Assessor has divided Custer County into five "market areas" based on her analysis of real estate markets and recent sales. Market area 1 covers the majority of Custer County and is the market area with the highest average sale price. Within each market area, property is classified according to a use category (irrigated, dryland, grassland, canyon, Sandhills-type land, "frequently flooded," and waste) and a soil type (a numeric value between 1 and 4, with 1 representing the highest quality). For each market area, there is a standard value per acre for property of the same use and soil type.

Cain's property is located within market area 1 and has been valued as part of that market area for some time. In terms of use category, for tax year 2012, the Assessor classified the non-irrigated portions of Cain's property (approximately 337 acres) as grassland and valued them between $495 and $505 per acre, depending on soil type. The Assessor classified the irrigated parts of his property (approximately 756 acres) as irrigatedland. Almost 600 of these irrigated acres were valued at $2,100 per acre, because they were determined to have type "4A" soil, which is the poorest quality. The remaining irrigated acres were valued between $2,105 and $2,930 per acre, depending on soil type.

Cain...