State ex rel. Nudo Holdings, LLC v. Bd. of Review for Kenosha

Citation952 N.W.2d 816,2020 WI App 78,395 Wis.2d 261
Decision Date25 November 2020
Docket NumberAppeal No. 2019AP1618
Parties STATE of Wisconsin EX REL. NUDO HOLDINGS, LLC, Petitioner-Appellant, v. BOARD OF REVIEW FOR the CITY OF KENOSHA, Respondent-Respondent.
CourtCourt of Appeals of Wisconsin

On behalf of the petitioner-appellant, the cause was submitted on the briefs of Anthony Nudo of Guttormsen, Terry & Nudo, LLC, of Kenosha.

On behalf of the respondent-respondent, the cause was submitted on the brief of Robert I. DuMez of Alia, Dumez & McTernan, S.C., of Kenosha.

Before Neubauer, C.J., Reilly, P.J., and Davis, J.

DAVIS, J.

¶1 The question before us in this tax assessment case is whether vacant land slated for residential development, on which the landowner made minimal efforts to farm naturally growing crops, was correctly classified as residential, rather than agricultural. Nudo Holdings, LLC (Nudo) appeals from a trial court order affirming the decision of the Board of Review for the City of Kenosha (the Board). The Board decision, in turn, upheld the city assessor's classification of Nudo's property as residential. We conclude that the Board correctly applied Wisconsin law on property classification for tax assessment purposes. We further conclude that there was sufficient evidence supporting the Board's determination that the land was properly classified as residential. Accordingly, we affirm.

BACKGROUND

¶2 In September 2017, Nudo paid $100,000 for an 8.9 acre parcel of land in the City of Kenosha. The parcel was tax-exempt at the time of purchase but was later assessed at $10,000 per acre, having been classified as residential for 2018 tax purposes. Nudo objected to the assessment, arguing that the parcel should have been classified as agricultural because that was its primary use. See WIS. STAT. § 70.32(2)(c) 1g (2017-18)1 (the assessor shall classify as agricultural land "that is devoted primarily to agricultural use").

¶3 The Board held a hearing on the matter and sustained the assessment, finding that the parcel was properly classified as residential and not agricultural. Nudo brought this action, challenging the Board's determination by way of certiorari review. The trial court reversed, concluding that the Board had incorrectly required the parcel to have a "business purpose" in order to qualify as agricultural land, contrary to the supreme court's recent decision in State ex rel. Peter Ogden Family Trust of 2008 v. Board of Review , 2019 WI 23, ¶32, 385 Wis. 2d 676, 923 N.W.2d 837 (land does not need to be farmed for a "business purpose" in order to be classified as "agricultural land" for property tax purposes). The court remanded to the Board to reconsider Nudo's appeal in light of Ogden . On remand, the Board took into account testimony and other evidence from both Board proceedings, which are as follows.

¶4 Anthony Nudo testified as owner of Petitioner-Appellant Nudo (to avoid confusion, we refer to the witness as "Mr. Nudo"). Mr. Nudo purchased the property "[t]o eventually develop it" into subdivided residential lots. At the time of assessment, however, the parcel remained in an "unimproved" state, with "no habitable structures ... sewer or water [on] the property." Mr. Nudo testified that residential construction would be "impossible" without "substantial public improvements."

¶5 Mr. Nudo explained that even though the long-term goal was residential development, the property's current use was agricultural. According to Mr. Nudo, "Nudo Farms" (as he labeled it) contained "a significant walnut grove." He did not plant the walnut trees—they were there when he purchased the property. To protect the trees, however, Mr. Nudo did purchase and plant a "windbreak packet" of small trees. In addition to the walnut trees, "Christmas trees [were] growing scattered at the site." Mr. Nudo testified that he had cut and maintained trails to connect and provide access to the Christmas trees and walnut grove. Aside from these actions, Mr. Nudo did not point to any agricultural practices taking place on the property. For example, he stated that the trees were not planted in rows and that there was "not much" tilling; he did not describe any fertilization, pruning, soil management, pest control, or other actions to enhance growth or yield. Mr. Nudo further admitted that he had not harvested any Christmas tree timber and had not commercially harvested any walnuts. He and his wife did harvest some walnuts on their own; however, Mr. Nudo provided few details on this point.2 He gave the harvested walnuts to his mother, who passed them out as gifts to her hairdressing clients.

¶6 Mr. Nudo testified that Nudo Farms was registered by the State of Wisconsin as "livestock premises" and was licensed by the City of Kenosha for the keeping of up to twenty-five chickens. Mr. Nudo, however, only "stored" chickens on the property once, temporarily, while his cousin was cleaning out their coop—and in any case, this was sometime after 2017, the relevant tax assessment period. He also obtained permits from Kenosha County to harvest Christmas trees and other timber on the property. According to Mr. Nudo, these facts, taken together, showed that the parcel should be classified as agricultural, not residential, land.

¶7 Peter Krystowiak, the city assessor, also testified. Krystowiak acknowledged that Nudo's property was located in an A-2 Agricultural Land Holding District, but he explained that "the key determination" for classification is "[a]ctual use of the property ... not location, zoning or other factors." In any case, the A-2 designation "is really more of a holding zoning" for "parcels that have come in from [neighboring towns and villages] ... until a plan is in place for that parcel." Nudo's property, in fact, was located within the "St. Peters Neighborhood Plan," meaning that the city had slated the location for single-family residential development, in line with Nudo's goals. As Krystowiak noted:

Mr. Nudo is looking to pursue having up to 18 lots on this parcel, 18 residential lots. That is allowable. As long as he follows all the ordinances, as long as he does everything that needs to be done here, according to the neighborhood plan, the city would really have no way to stop him. This neighborhood plan is as good as zoning.

Therefore, Krystowiak classified the property as "residential," based on its likely future use.

¶8 Krystowiak next explained why, in his opinion, the land was not "devoted primarily to agricultural use." He pointed out that land classified as agricultural "shall typically bear physical evidence of agricultural use, such as furrows, crops, fencing or livestock." See WIS. ADMIN. CODE § TAX 18.06(1) (July 2018). Krystowiak testified that he did not see any such "physical evidence," or any other indication that the land was being farmed. What he did see on the property were "a few paths" cutting through "extremely heavy underbrush on a majority of this parcel":

From the sidewalk, this parcel, if you get more than ten to 15 feet off the sidewalk, this is a parcel that brushes up above your knees. So I mean, you could get—literally, I think you could get lost in this nine acres in the city. It's—it's heavy—really heavy.

There was also no evidence of a harvest and "no evidence of livestock being allowed or able to roam free." In short, Krystowiak characterized the parcel as a "raw piece of land," stating, "I don't see any effort, any action, any plan in terms of agricultural.

This is a piece of land that has some things growing on it. " (Emphasis added.)

¶9 Krystowiak further testified that despite his request under the administrative code, Nudo did not provide any additional information, such as the yield of walnuts harvested, that might indicate agricultural use. See WIS. ADMIN. CODE § TAX 18.06(1) ("If physical evidence of agricultural use is not sufficient to determine agricultural use, the assessor may request ... such information as necessary to determine if the land is devoted primarily to agricultural use."). Specifically, Krystowiak received no information regarding his request for: (1) "a profit and loss statement and/or tax records ... which documents agricultural activities, the harvesting of trees and nuts at the parcel"; (2) "[a]ny documentation that substantiates the harvesting of black walnuts and Christmas trees in [20]17"; (3) "[a]ny evidence of keeping livestock on the parcel"; (4) "[a]ny evidence of furrows, crops or fencing"; and (5) "[a]ny evidence of agronomic practices defined in the Property Assessment Manual." Krystowiak stated that he did not request this information to verify a commercial or business purpose to Nudo's farming, but rather, because he wanted to "establish whether there was cultivation, whether there was a harvest, whether there was a yield." After remand to the Board, Krystowiak again clarified, "The lack of a business purpose was not the reason why this parcel was denied ag[ricultural] use.... This parcel was denied ag[ricultural] use because it did not fit the statutory definitions of what ag[ricultural] land [and] ag[ricultural] use ... are."

¶10 After considering all of the evidence, the Board sustained the assessment. Addressing the trial court's prior concern about the effect of Ogden , the Board explicitly stated that its decision was not based on any "business purpose" requirement but on the fact that the land's use was residential, not agricultural. This time on certiorari review, the trial court affirmed the Board's decision, concluding that the Board "had sufficient basis to affirm the assessor's valuation based on the evidence presented." Nudo appeals from that order.

DISCUSSION
Standard of Review and Relevant Law Applicable to Real Property Assessment

¶11 A brief background of relevant assessment principles will be helpful before we consider Nudo's appeal and the standards governing it. The tax assessor shall annually assess all property according to ...

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2 cases
  • State ex rel. Nudo Holdings, LLC v. Bd. of Review for City of Kenosha
    • United States
    • United States State Supreme Court of Wisconsin
    • April 12, 2022
    ...of appeals affirmed the Board's determination. State ex rel. Nudo Holdings, LLC v. Bd. of Rev, for City of Kenosha, 2020 WI.App. 78, ¶1, 395 Wis.2d 261, 952 N.W.2d 816. We granted Nudo's petition for review. II. DISCUSSION A. Challenging the Classification of Real Property ¶8 Property asses......
  • State ex rel. Nudo Holdings, LLC v. Bd. of Review for Kenosha
    • United States
    • United States State Supreme Court of Wisconsin
    • April 12, 2022
    ...by a vote of 4 to 1. Both the circuit court and court of appeals affirmed the Board's determination. State ex rel. Nudo Holdings, LLC v. Bd. of Rev. for City of Kenosha, 2020 WI App 78, ¶1, 395 Wis. 2d 261, 952 N.W.2d 816. We granted Nudo's petition for review.II. DISCUSSIONA. Challenging t......

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