Knodel v. Board of County Com'rs of Pennington County, s. 12117

CourtSupreme Court of South Dakota
Citation269 N.W.2d 386
Docket Number12250 and 12251,Nos. 12117,s. 12117
PartiesEd KNODEL, John McMahon, Julian Cheney, Don Carstensen, Dean Schell, Lillian Horton, Don Thorsen, et al., Respondents, v. The BOARD OF COUNTY COMMISSIONERS OF PENNINGTON COUNTY, South Dakota, both in its regular capacity as a Board of Commissioners and in its capacity as Pennington County Board of Equalization, together with Helen Daughenbaugh, in her capacity as Pennington County Auditor, Appellants. John McMAHON, Julian Cheney, Don Carstensen, Dean Schell, Lillian Horton, Donald Thorsen, et al., Appellants, v. The BOARD OF COUNTY COMMISSIONERS OF PENNINGTON COUNTY, South Dakota, both in its regular capacity as a Board of Commissioners and in its capacity as Pennington County Board of Equalization, together with Helen Daughenbaugh, in her capacity as Pennington County Auditor, Cross-Appellants.
Decision Date10 August 1978

Charles Rick, Johnson, of Johnson, Johnson & Eklund, Gregory, for the Rural Taxpayers, respondents in No. 12117 and appellants in No. 12250.

Gordon Verne Goodsell and James H. Wilson, of Wilson, Olson & Goodsell, Rapid City, for Pennington County, appellants in No. 12117 and cross-appellants in No. 12251.

ANDERST, Circuit Judge.

This matter comes before us as a consolidated appeal from two separate judgments entered by the trial court on a 1975 tax appeal and a 1976 tax appeal. For purpose of clarity, the Board of Commissioners of Pennington County, South Dakota, both in its regular capacity as Board of Commissioners and in its capacity as Pennington County Board of Equalization, together with Helen Daughenbaugh, in her capacity as Pennington County Auditor, appellants in the 1975 tax appeal, and respondents and cross-appellants in the 1976 tax appeal, will be referred to hereafter as "County." Ed Knodel, et al., respondents in the 1975 tax appeal, and John McMahon, et al., appellants and cross-respondents in the 1976 tax appeal will be referred to as "Rural Taxpayers."

On July 16, 1975, approximately 326 taxpayers (Rural Taxpayers) of Pennington County, all members of the Rural Pennington County Tax Association, filed a petition to appeal the decision of the Board of County Commissioners of Pennington County acting as the Pennington County Board of Equalization (County) challenging the validity and the amount of the assessment upon their agricultural property and structures in Pennington County. Trial to the court was held on June of 1976; the judge rendered a memorandum decision in September 1976; and Findings of Fact, Conclusions of Law and Judgment were entered on October 7, 1976. On August 2, 1976, substantially the same group of taxpayers filed a petition for appeal to the circuit court challenging the 1976 assessment of their property. Findings of Fact, Conclusions of Law and Judgment were entered in that appeal on April 11, 1977. Timely appeals were perfected from both judgments. The parties stipulated the appeals to this court be consolidated for briefing and argument, the last brief being filed with this court on February 27, 1978.

In September of 1973, the County contracted with the Jacobs Company, Inc., an appraisal and property tax consulting company, to provide technical advice and assistance to the County in connection with the valuation of all assessable real property located in Pennington County. The 1975 and 1976 assessments were carried out under the direction of the Pennington County Director of Equalization with the assistance of the Jacobs Company.

The director of equalization and the Jacobs Company developed a method of appraising agricultural real property. An index was compiled rating all of the various types of agricultural land in the county according to the capability of the land to produce agricultural products. Soil, terrain and topographical conditions of the property; present market value; the character of the area and place where the property was located; and other agricultural factors were considered.

Agricultural land was initially divided into two divisions, crop land and range land. The various types of land within each division were indexed according to their respective productivity. The two indexes, the crop land index and the range land index, were reconciled to a single index showing the respective productivity of all types or classes of agricultural land in the county. After compiling the single index showing the relative productivity of all classes of agricultural property in the county, eight sales were selected and studied to determine a ratio of price to productivity. The completed average for all sales was then applied to the various productivity ratings to determine per acre value for each class of property.

Soil conservation service soil survey maps, photographs, land stat imagery and topographical maps were used to classify each parcel of agricultural land in the county. The land was then personally viewed by the director of equalization, after which he valued each parcel according to the value of the classes of land within the parcel.

Rather than introduce evidence relative to all 326 appeals, the parties entered into a stipulation whereby the Rural Taxpayers were to submit the testimony of certain designated taxpayers on the issues and this testimony was to be considered as being representative of the other taxpayers who participated in the appeal. It was in compliance with the foregoing stipulation that nine taxpayers gave complete testimony relative to how the assessment affected them, with two or three additional taxpayers giving some testimony toward the end of the Rural Taxpayers case.

The trial judge in the 1975 tax appeal held that the assessment formula used by the director of equalization to reassess all the agricultural property in the county was erroneous and failed to comply with the applicable South Dakota assessment statutes, SDCL 10-6-33. The trial judge further found the formula failed to properly consider a number of the requirements of the assessment statutes; it was based on an inadequate number of land sales which were not properly adjusted for other elements affecting them; it disregarded actual use being made of land by farmers and ranchers; it placed an improper emphasis upon land sales; it disregarded the capacity of the range land to carry and raise livestock; and it included erroneous adjustment factors with the result that all of the agricultural land involved in the appeals were excessively valued for tax purposes. The court from these findings concluded the assessments to be unlawful and void and ordered the director of equalization to conduct a new assessment following guidelines set down by the court.

For the 1976 tax appeal, the parties stipulated that if a trial were to be had, the same testimony would be given by both sides as was given in the 1975 tax appeal. The parties also agreed the 1976 assessment had been conducted by the same identical method that the 1975 assessment had been conducted. The Rural Taxpayers further argued the amendment made to SDCL 10-6-33.1, which became effective July 1, 1975, eliminated comparative sales as a factor in...

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