In re Tax Assessment of Woodlands

• Decision Date: 05 November 2008
• Docket Number: No. 33891.,33891.
• Citation: 672 S.E.2d 150
• Court: West Virginia Supreme Court
• Parties: In re: TAX ASSESSMENT OF FOSTER FOUNDATION'S WOODLANDS RETIREMENT COMMUNITY.

672 S.E.2d 150

In re: TAX ASSESSMENT OF FOSTER FOUNDATION'S WOODLANDS RETIREMENT COMMUNITY.

No. 33891.

Supreme Court of Appeals of West Virginia.

Submitted: September 3, 2008.

Decided: November 5, 2008.

Dissenting Opinion of Justice Benjamin January 9, 2009.

Syllabus by the Court

1. "This Court reviews the circuit court's final order and ultimate disposition under an abuse of discretion standard. We review challenges to findings of fact under a clearly erroneous standard; conclusions of law are reviewed de novo." Syllabus point 4, Burgess v. Porterfield, 196 W.Va. 178, 469 S.E.2d 114 (1996).

2. "Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review." Syllabus point 1, Appalachian Power Co. v. State Tax Department of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995).

3. "`"An assessment made by a board of review and equalization and approved by the circuit court will not be reversed when supported by substantial evidence unless plainly wrong." Syl. pt. 1, West Penn Power Co. v. Board of Review and Equalization, 112 W.Va. 442, 164 S.E. 862 (1932).' Syl. pt. 3, Western Pocahontas Properties, Ltd. v. County Comm'n of Wetzel County, 189 W.Va. 322, 431 S.E.2d 661 (1993)." Syl. pt. 4, In re Petition of Maple Meadow Mining Co. for Relief from Real Property Assessment For the Tax Year 1992, 191 W.Va. 519, 446 S.E.2d 912 (1994).

4. W. Va.Code § 11-3-24 (1979) (Repl. Vol.2008), which establishes the procedure by which a county commission sits as a board of equalization and review and decides taxpayers' challenges to their property tax assessments, is facially constitutional.

5. A taxpayer challenging an assessor's tax assessment must prove by clear and convincing evidence that such tax assessment is erroneous. To the extent our prior decisions in Killen v. Logan County Commission, 170 W.Va. 602, 295 S.E.2d 689 (1982), and Eastern American Energy Corp. v. Thorn, 189 W.Va. 75, 428 S.E.2d 56. 189 W.Va. 75, 428 S.E.2d 56 (1993) (per curiam), are inconsistent with this holding, they are expressly overruled.

6. Requiring a taxpayer challenging a property tax assessment in accordance with W. Va.Code § 11-3-24 (1979) (Repl.Vol.2008) to prove by clear and convincing evidence that the assessor's assessment is erroneous does not violate the constitutional due process protections provided by section one of the Fourteenth Amendment to the United States Constitution or by section ten of Article III of the West Virginia Constitution.

7. "Title 110, Series 1P of the West Virginia Code of State Rules confers upon the State Tax Commissioner discretion in choosing and applying the most accurate method of appraising commercial and industrial properties. The exercise of such discretion will not be disturbed upon judicial review absent a showing of abuse of discretion." Syllabus point 5, In re Tax Assessment Against American Bituminous Power Partners, L.P., 208 W.Va. 250, 539 S.E.2d 757 (2000).

Daniel J. Konrad, Chad D. Camper, Huddleston Bolen LLP, Huntington, for the Appellant.

William T. Watson, Huntington, for the Appellee.

DAVIS, Justice.¹

The appellant herein and petitioner below, the Foster Foundation (hereinafter "the Foundation"), appeals an order entered September 6, 2007, by the Circuit Court of Cabell County. In that order, the circuit court affirmed the decision of the appellee herein and respondent below, the Cabell County Commission (hereinafter "the County Commission" or "the Commission") sitting as the Board of Equalization and Review (hereinafter "the Board"), which had assigned an assessed value to the Foster Foundation's Woodlands Retirement Community (hereinafter "the Woodlands") of $29,759,000.00 for the 2007 tax year. On appeal to this Court, the Foundation contends that the procedure for challenging tax assessments and the burden of proof imposed upon taxpayers violate due process and that neither the Board nor the circuit court properly considered the unique nature of the Woodlands as a tax-exempt corporation in obtaining its assessed value. Upon a review of the parties' arguments, the record designated for appellate consideration, and the pertinent authorities, we affirm the decision of the Cabell County Circuit Court.

I. FACTUAL AND PROCEDURAL HISTORY

The Foster Foundation is a § 501(c)(3)² non-profit organization that has been in existence since 1922.³ Operated by the Foundation, the Woodlands Retirement Community is described by the Foundation as a "home for the aged not conducted for private profit." The Woodlands facilities accommodate approximately 300 residents and provide such housing in the form of independent living facilities, assisted living facilities, and nursing home facilities. All residents of the Woodlands are assured of continued housing for the remainder of their life at the Woodlands regardless of their ability to pay.⁴ The Woodlands property is comprised of approximately 93 acres of real property and numerous buildings⁵ with a combined square footage of roughly 331,993 square feet.

The instant controversy began when the Foster Foundation received a letter dated January 2, 2007, from the Cabell County Assessor's Office notifying it of the assessed value for the Woodlands for the 2007 tax year in the amount of $38,137,300.00. On January 31, 2007, the Foundation filed an "Application for Review of Property Assessment" with the Cabell County Commission challenging the amount of this assessment; a hearing was set for February 9, 2007, before the Cabell County Commission sitting as the Board of Equalization and Review.⁶ Prior to the February 9, 2007, hearing, the Assessor reduced the assessed value of the Woodlands to $31,190,000.00 because, as the Assessor claimed, a modifier had erroneously been applied to obtain the original assessed value for this property.

At the Board's February 9, 2007, hearing, the Foster Foundation presented expert testimony by Robert K. Withers, a certified general real estate appraiser.⁷ Mr. Withers provided a written appraisal report and testified that, in his opinion, the fair market value⁸ of the Woodlands is $14,900,000.00. The Assessor provided evidence through the testimony of its employee, Brian Daniels, who is certified but not licensed⁹ as a real estate appraiser. Mr. Daniels testified as to the methods he had employed in arriving at the assessed value and the properties he had considered as comparable to the Woodlands. Following the hearing, the Commission, sitting as the Board, by order entered February 22, 2007, further reduced the assessed value of the Woodlands to $29,759,000.00.

The Foster Foundation then appealed the Commission's adverse ruling to the Circuit Court of Cabell County. The circuit court held a hearing, and, by order entered September 6, 2007, affirmed the Commission's decision, concluding that "the Plaintiff [Foster Foundation] failed to prove by clear and convincing evidence that the Assessor erroneously valued its property. Accordingly, the determination of value by the Assessor must stand[,] and the relief requested by the taxpayer must be denied." From the circuit court's adverse ruling, the Foster Foundation now appeals to this Court.

II. STANDARD OF REVIEW

In this case, the Foster Foundation requests this Court to review the circuit court's ruling adopting the Board's revised assessment of the value of the Foundation's Woodlands property and raises issues regarding the constitutionality of the taxpayer appeals process and questioning the correctness of the assessed value of its property. Generally, a multifaceted standard of review is applicable to decisions of a circuit court: "This Court reviews the circuit court's final order and ultimate disposition under an abuse of discretion standard. We review challenges to findings of fact under a clearly erroneous standard; conclusions of law are reviewed de novo." Syl. pt. 4, Burgess v. Porterfield, 196 W.Va. 178, 469 S.E.2d 114 (1996). Accord Syl. pt. 2, Walker v. West Virginia Ethics Comm'n, 201 W.Va. 108, 492 S.E.2d 167 (1997) ("In reviewing challenges to the findings and conclusions of the circuit court, we apply a two-prong deferential standard of review. We review the final order and the ultimate disposition under an abuse of discretion standard, and we review the circuit court's underlying factual findings under a clearly erroneous standard. Questions of law are subject to a de novo review.").

With respect to the questions of law raised by the Foundation concerning the constitutionality of the governing statutes, we employ a de novo standard of review: "[i]nterpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review." Syl. pt. 1, Appalachian Power Co. v. State Tax Dep't of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995). Accord Syl. pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995) ("Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.").¹⁰

Finally, we utilize a plainly wrong standard to review the Foundation's assignment of error challenging the assessed value of its property:

"`[a]n assessment made by a board of review and equalization and approved by the circuit court will not be reversed when supported by substantial evidence unless plainly wrong.' Syl. pt. 1, West Penn Power Co. v. Board of Review and Equalization, 112 W.Va. 442, 164 S.E. 862 (1932)." Syl. pt. 3, Western Pocahontas Properties, Ltd. v. County Comm'n of Wetzel County, 189 W.Va. 322, 431 S.E.2d 661 (1993).

Syl. pt. 4, In re Petition of Maple Meadow Mining Co. for Relief from Real Prop. Assessment For the Tax Year 1992, 191 W.Va. 519, 446 S.E.2d 912 (1994). But see In re Tax Assessment Against Am. Bituminous Power Partners, L.P., 208 W.Va. 250, 255, 539 S.E.2d 757, 762 (2000) ("[J]udicial review of a decision of a board of...