Miller v. City of Monona

• Decision Date: 31 January 2013
• Docket Number: No. 2012AP1105.,2012AP1105.
• Citation: 827 N.W.2d 930,2013 WI App 30,346 Wis.2d 281
• Parties: Stephanie MILLER, James Stellhorn and Harlan LLC, Petitioners–Appellants, v. CITY OF MONONA and City of Monona Board of Review, Respondents–Respondents.
• Court: Wisconsin Court of Appeals

346 Wis.2d 281

827 N.W.2d 930

2013 WI App 30

Stephanie MILLER, James Stellhorn and Harlan LLC, Petitioners–Appellants,

v.CITY OF MONONA and City of Monona Board of Review, Respondents–Respondents.

No. 2012AP1105.

Court of Appeals of Wisconsin.

Jan. 31, 2013.

OPINION TEXT STARTS HEREAppeal from an order of the circuit court for Dane County: John W. Markson, Judge. Affirmed.

Before HIGGINBOTHAM, BLANCHARD and KLOPPENBURG, JJ.¶ 1BLANCHARD, J.

Stephanie Miller, James Stellhorn, and Harlan, LLC, appeal an order of the circuit court denying certiorari relief and affirming 2010 and 2011 property tax assessments on two adjacent parcels of unimproved property that they own.¹ The property owners argue that the City of Monona's Board of Review erred in affirming the City assessor's classification of the property for each year as residential use, rejecting the property owners' argument for an agricultural use classification. The agricultural classification results in lower assessments. We conclude that the Board's decisions as to each year are not unreasonable and have a rational basis, because they are based on credible evidence that the property was not used primarily to cultivate crops in 2009 and 2010. Accordingly we affirm.

BACKGROUND

¶ 2 We skip over prior proceedings not directly relevant to this appeal, and begin our summary with the meeting of the City of Monona Board of Review held on August 18, 2011. At this meeting, the Board took evidence and addressed the property owners' objections to classification of the property as residential use for assessment years 2010 and 2011.

¶ 3 To establish context for what follows, we briefly address the time frames that apply to the assessment classifications at issue. The general rule is that an assessment for purposes of levying a real property tax is made “as of the close of January 1 of each year,” so that the particular dates at issue here are January 1, 2010, and January 1, 2011. SeeWis. Stat. § 70.10.² However, as one would expect in the agricultural context, the focus for assessments shifts to activity that occurred during the production season of the year preceding January 1 of the assessment year.³ Thus, the question before the Board was whether the property at issue was in agricultural use for crop production seasons during 2009 and 2010.

¶ 4 Miller was the only property owner to testify before the Board. No person who claimed to have cultivated crops on the property testified.

¶ 5 Miller testified that the property owners paid a total of approximately $810,000 for the property. Together the two parcels cover approximately one-half acre fronting on Lake Monona.

¶ 6 Miller testified that, after removing the only improvements on the property, the owners encountered problems in “trying to build some condominiums” on the property. Miller testified that the owners then decided to derive rent from the vacant land by leasing it out to tenants to grow crops.

¶ 7 For this purpose, the owners entered into three leases with tenants between August 2009 and the time of the Board's hearing. These leases were intended to allow a series of tenants to grow crops on the property, generating rent for the property owners totaling $100 per year per lease. More specifically, Miller testified that:

• Miller and Stellhorn entered into a lease for the period August 1, 2009, to July 31, 2010, with the first tenant, who had a part-time job doing something unrelated. The lease allowed the first tenant, in exchange for the payment of $200 (later reduced to $100), to grow garlic and “winter wheat” on the property. Miller testified that the first tenant “had some difficulties, and I don't know how productive his crops were.”

• Miller and Harlan entered into a lease with a second tenant that overlapped with the first lease, this time for the period December 1, 2009, to December 30, 2010.⁴ The second lease allowed the second tenant, a student, to grow “[m]ostly pumpkins and Indian corn” on the property in exchange for $100. Miller testified that the second tenant did eventually grow crops on the property, although in 2009 the second tenant did no planting, but merely turned over soil with a rototiller in preparation for planting that occurred in 2010.

• Miller and Stellhorn entered into a lease with a third tenant, for a term that had not yet expired at the time of the hearing, namely, January 1, 2011, to December 31, 2011. The third tenant was a farmer from Oregon, Wisconsin, who was allowed, in exchange for $100, to grow a variety of crops.

Miller testified that, consistent with the intent behind the three leases, the three tenants used the property predominantly for the growing of crops.

¶ 8 At the same time, however, Miller testified that she did not know and did not attempt to estimate the volume of the yields of any crop harvested by any tenant. She also testified that she did not know and did not attempt to estimate how much profit any of the tenants made from crops grown on the property, or what any tenant did with any crops grown on the property.

¶ 9 The City assessor, Jim Danielson, testified, in part, that there was no evidence that the tenants harvested crops “for actual farm purpose[s].” As to the nature and volume of any harvests, Danielson testified, “we have no idea what was even on [the property], what was even taken [from the property], and how much was even on [the property].”

¶ 10 More specifically, Danielson testified that he visited the property on July 7, 2011, and at that time observed “very limited” plant growth, and that even this limited growth resembled “brush,” as opposed to crops, causing him to draw the conclusion that “a majority” of the property was not being used for agricultural purposes. Danielson further testified that an employee of his company reported in 2009, after the employee visited the property, that there were signs of only “sporadic crops” being grown at that time. Along these same lines, the Board had before it an affidavit submitted by Danielson averring that, as of 2010, the property was “observed to have a small garden ... with various vegetables.... The garden was the size of approximately one-quarter of the area” of the property. Danielson reaffirmed in testimony at the hearing that this is what his employee had reported as of 2010.⁵

¶ 11 In voting 4–0 to sustain both assessments based on the residential classification, members of the Board made observations that included the following. Although he did not vote, Chair Robert Larsen commented that “the quality of the evidence” that the owners had offered at the hearing “in support of the actual farming activities” claimed was “meager indeed.... For all we know these were the personal gardens of the gardeners, which clearly would not qualify as agricultural purposes.” Board member James Hoelzel referred to the owners' evidence as “nebulous.”

¶ 12 After the owners filed petitions for judicial review of the assessments under Wis. Stat. § 70.47(13), the circuit court issued a decision and order affirming the Board's decisions as to each assessment year, denying certiorari relief, and quashing the attached writ.

DISCUSSION

¶ 13 On appeal, the owners argue that the assessor's classification decisions are not entitled to the presumption of correctness, the Board did not hear any credible evidence supporting its determinations, and the Board's decisions were arbitrary and capricious. After first setting forth the standards of review and the statutory and regulatory language at issue, we explain why we conclude that each of these three arguments is without merit.

Standards of Review

¶ 14 In a certiorari action under Wis. Stat. § 70.47(13), such as this, we review the Board's decision independently, but benefit from the analysis of the circuit court. State ex. rel. Stupar River LLC v. Town of Linwood Portage Cty. Bd. of Review, 2011 WI 82, ¶ 16, 336 Wis.2d 562, 800 N.W.2d 468. “[W]e look for ‘any error in the proceedings of the board which renders the assessment or the proceedings void.’ ” Id. (quoting § 70.47(13)). However, this review is “ ‘strictly limited’ ” to the determination of “whether the Board's actions were: (1) within its jurisdiction; (2) according to law; (3) arbitrary, oppressive or unreasonable and represented its will and not its judgment; and (4) supported by evidence such that the Board might reasonably make the order or determination in question.” Id. (citations omitted).

¶ 15 Turning to the standard to be applied by the Board to a challenge to an assessment, this court has summarized the law as follows:

A challenger to a property tax assumption has an uphill battle; the assessor's valuation is presumed to be correct. The challenger can only overcome the presumption by showing that the assessment is not supported by substantial evidence or the assessor's methods do not comport with statutory and administrative code requirements. If the challenger overcomes the presumption of correctness, the question we must answer is “whether credible evidence was presented to the board that may in any reasonable view support the board's determination.”

Anic v. Board of Review, 2008 WI App 71, ¶ 10, 311 Wis.2d 701, 751 N.W.2d 870 (citations omitted); see alsoWis. Stat. § 70.47(8)(i) (“The board shall presume that the assessor's valuation is correct. That presumption may be rebutted by a sufficient showing by the objector that the valuation is incorrect.”).

Agricultural Use Classification Defined

¶ 16 Pursuant to Wis. Stat. § 70.32(2)(a), assessors “shall” classify properties “on the basis of use” into one of seven categories (or the additional category, “other”). These uses include a “residential” classification and an “agricultural” classification.

¶ 17 The following are pertinent definitions contained within Wis. Stat. § 70.32(2)(c):

1g. “Agricultural land” means land, exclusive of buildings and improvements and the land necessary for their location and convenience, that is devoted primarily to agricultural...