Stone Brooke Ltd. Partnership v. Sisinni

Decision Date24 September 2009
Docket NumberNo. 34863.,No. 34424.,No. 34423.,34423.,34424.,34863.
Citation688 S.E.2d 300
CourtWest Virginia Supreme Court
PartiesSTONE BROOKE LIMITED PARTNERSHIP, Petitioner Below, Appellant, v. Phyllis SISINNI, as Assessor of Brooke County, and Virgil T. Helton, West Virginia Tax Commissioner, Respondents Below, Appellees. and Heathermoor Limited Partnership, Petitioner Below, Appellant, v. Joseph Alongi, as Assessor of Hancock County, and Virgil T. Helton, West Virginia Tax Commissioner, Respondents Below, Appellees. and Pine Haven Limited Partnership; The Hamlets Limited Partnership; and The Parks Limited Partnership (Parkview LP), Petitioners Below, Appellees, v. The Honorable Ottie Adkins, Assessor of Cabell County, and The County Commission of Cabell County, Respondents Below, Appellants.

Syllabus by the Court

1. "`"`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 [of Brooke County], 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)." Syllabus point 3, In re Tax Assessment of Foster Foundation's Woodlands Retirement Community, 223 W.Va. 14, 672 S.E.2d 150 (2008).

2. "In a case involving the assessment of property for taxation purposes, which does not involve the violation of a statute governing the assessment of property, or a violation of a constitutional provision, or in which a question of the constitutionality of a statute is not involved, this Court will not set aside or disturb an assessment made by an assessor or the county court, acting as a board of equalization and review, where the assessment is supported by substantial evidence." Syllabus point 2, In re Tax Assessments Against the Southern Land Co., 143 W.Va. 152, 100 S.E.2d 555 (1957), overruled on other grounds by In re the Assessment of Shares of Stock of the Kanawha Valley Bank, 144 W.Va. 346, 109 S.E.2d 649 (1959).

3. "In all cases, it is incumbent upon the circuit court, as it is upon the county commission and the assessor, to set the assessed value of all parcels of land at the amount established by the State Tax Commissioner. W. Va.Code § 18-9A-11." Syllabus point 5, Tug Valley Recovery Center, Inc. v. Mingo County Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979).

4. "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).

5. "As a general rule, there is a presumption that valuations for taxation purposes fixed by an assessor are correct.... The burden is on the taxpayer challenging the assessment to demonstrate by clear and convincing evidence that the tax assessment is erroneous." Syllabus point 2, in part, Western Pocahontas Properties, Ltd. v. County Commission of Wetzel County, 189 W.Va. 322, 431 S.E.2d 661 (1993).

6. "A taxpayer challenging an assessor's tax assessment must prove by clear and convincing evidence that such tax assessment is erroneous." Syllabus point 5, in part, In re Tax Assessment of Foster Foundation's Woodlands Retirement Community, 223 W.Va. 14, 672 S.E.2d 150 (2008).

7. When a circuit court reviews an appraisal of commercial real property made for ad valorem taxation purposes, the court shall, in its final order, make findings of fact and conclusions of law addressing the assessing officer's consideration of the required appraisal factors set forth in W. Va.C.S.R. §§ 110-1P-2.1.1 to 2.1.4 (1991).

Amy M. Smith, Steptoe & Johnson PLLC, Clarksburg, WV, Karen E. Kahle, Steptoe & Johnson PLLC, Wheeling, WV, J.A. Curia, III, Steptoe & Johnson PLLC, Charleston, WV, for Appellants, Stone Brooke Limited Partnership and Heathermoor Limited Partnership.

William T. Watson, William T. Watson, L.C., Huntington, WV, for Appellants, Ottie Adkins, Assessor of Cabell County, and the Cabell County Commission.

Darrell V. McGraw, Jr., Attorney General, Katherine A. Schultz, Senior Deputy Attorney General, Charleston, WV, for Appellees, Phyllis Sisinni, as Assessor of Brooke County; Joseph Alongi, as Assessor of Hancock County; and Virgil T. Helton, West Virginia State Tax Commissioner.

Herschel H. Rose, III, Steven R. Broadwater, Rose Law Office, Charleston, WV, for Appellees, Pine Haven Limited Partnership; The Hamlets Limited Partnership; and The Parks Limited Partnership (Parkview LP).

DAVIS, Justice.

Two of the appellants herein and petitioners below, Stone Brooke Limited Partnership and Heathermoor Limited Partnership, appeal from orders entered January 28, 2008, by the Circuit Courts of Brooke and Hancock Counties. By those orders, the circuit courts upheld the respective Assessor's valuation, for ad valorem taxation purposes, of rent-restricted apartment buildings. The additional appellants herein and respondents below, the Honorable Ottie Adkins, Assessor of Cabell County, and the County Commission of Cabell County, appeal from an order entered November 12, 2008, by the Circuit Court of Cabell County. By that order, the circuit court did not uphold the Assessor's valuation, for ad valorem taxation purposes, of rent-restricted apartment buildings. The common issues raised by each of these three consolidated appeals concern the proper method of valuing real property participating in the Low Income Housing Tax Credit Program.

Upon a review of the parties' arguments, the records presented for appellate consideration, and the pertinent authorities, we conclude that certain errors were made by each of the circuit courts from which appeals have been taken in this case. Accordingly, we affirm, in part, that portion of the orders entered by the Brooke County Circuit Court, in Case Number 34423, and the Hancock County Circuit Court, in Case Number 34424, upholding the Assessors' selection of the cost approach as the most accurate method of appraising the Stone Brooke and Heathermoor properties. However, we reverse, in part, the orders entered by the Brooke County Circuit Court and the Hancock County Circuit Court insofar as they did not specifically address whether the Assessors had analyzed each factor required to be considered in the appraisal of commercial real property set forth in W. Va.C.S.R. §§ 110-1P-2.1.1 to 2.1.4 (1991), and we remand these cases for further proceedings to permit the circuit courts to review the correctness of the Assessors' valuations through the application of these criteria to the Stone Brooke and Heathermoor properties.

Furthermore, we reverse the order entered by the Circuit Court of Cabell County, in Case Number 34863, because (1) the Assessor presented substantial evidence to support his selection of the cost approach as the most accurate method of appraising the Pine Haven, The Hamlets, and The Parks properties and (2) the circuit court's order did not specifically address whether the Assessor had analyzed each factor required to be considered in the appraisal of commercial real property set forth in W. Va.C.S.R. §§ 110-1P-2.1.1 to 2.1.4 (1991). Accordingly, we remand this case for further proceedings to permit the circuit court to reinstate the Assessor's cost approach appraisals and to review the correctness of the Assessor's valuations through the application of these criteria to the Pine Haven, The Hamlets, and The Parks properties.

I. FACTUAL AND PROCEDURAL HISTORY

Each of the Taxpayers who is before the Court in this consolidated proceeding owns and operates multi-unit apartment buildings that participate in the Low Income Housing Tax Credit Program. Through this program, investors receive tax credits to facilitate the construction of low income residential rental housing, and, in exchange for such credits, the resulting apartments are rented to low income individuals at restricted rates that are substantially lower than the market rents charged for comparable, unrestricted apartments. See generally 26 U.S.C. § 42 (2004).

During the proceedings below, the circuit court appeals of Stone Brooke and Heathermoor were consolidated for hearing purposes, but the respective circuit courts each issued a final order to resolve the individual Taxpayer's appeals; accordingly, each of these appeals was assigned a different case number on appeal to this Court. By contrast, the circuit court appeals of Pine Haven, The Hamlets, and The Parks were consolidated for hearing and decisional purposes in the Circuit Court of Cabell County, and the court entered a single order resolving all of the Taxpayers' appeals; therefore, one case number was assigned to these consolidated cases on appeal to this Court.

A. Case Number 34423Stone Brooke

In Case Number 34423, the appellant herein and petitioner below, Stone Brooke Limited Partnership (hereinafter "Stone Brooke"), challenged its ad valorem property tax assessments for tax year 2006. The Assessor of Brooke County, Phyllis Sisinni (hereinafter "Brooke County Assessor"), used the cost approach1 to value Stone Brooke's property at $1,784,100.00. After Stone Brooke challenged this assessment, the Brooke County Assessor asked the State Tax Commissioner (hereinafter "the Commissioner")2 to value the property. The Commissioner employed an income approach and valued Stone Brooke's property at $1,971,000.00; this valuation relied upon the actual, restricted rents charged by Stone...

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