Clackamas County Assessor v. Parker Development NW

IN THE OREGON TAX COURT

MAGISTRATE DIVISION

Property Tax

CLACKAMAS COUNTY ASSESSOR, )

)

Plaintiff, ) TC-MD 120165C

)

v. )

)

PARKER DEVELOPMENT NW INC., )

)

Defendant. ) DECISION

Plaintiff Clackamas County Assessor filed a Complaint with this court seeking an

increase in the real market value (RMV) of certain real property identified in the assessor‟s

records as Account 05004830 for the 2011-12 tax year. The court held an uncontested trial by

telephone December 3, 2012, following the court‟s issuance of an Order on September 24, 2012,

denying Plaintiff‟s Motion for Default because, although Defendant failed to timely respond to

Plaintiff‟s Complaint, Plaintiff‟s Complaint lacked the necessary competent evidence to carry the

requisite burden of proof. The court‟s June 15, 2012, and its September 24, 2012, Orders are

incorporated herein by reference. Plaintiff was represented at the December 3, 2012, trial by

Matt Healy (Healy), Senior Appraiser, Clackamas County Assessor‟s office.

Plaintiff‟s Exhibit 1 was admitted into evidence at trial.

I. STATEMENT OF FACTS

The subject property is a vacant 0.45 acre undeveloped residential homesite lot in an

exclusive gated community in West Linn, located within a 24 lot subdivision known as Le

Chevalier. (Ptf‟s Ex 1 at 4.) Lots in that subdivision are between approximately one-half acre

and one and one-half acres in size. (Id.) Twenty of the 24 lots in that subdivision have been

developed. (Id.) The remaining four are vacant; one of four vacant lots was listed for sale at the

time of trial. (Id.)

DECISION TC-MD 120165C 1

The owner of the subject property, Defendant Parker Development NW Inc., appealed the

RMV of the land to the Clackamas County Board of Property Tax Appeals (Board) and the

Board issued an order on or about March 1, 2012, reducing the RMV from $451,202 to

$235,000. (Ptf‟s Compl at 2.) In its Complaint, Plaintiff requested an increase in the RMV to

the $451,202 value originally placed on the property by the assessor‟s office prior to the Board‟s

reduction. (Id. at 1.)

Plaintiff, by and through its representative Healy, submitted a 19-page summary appraisal

report with a written narrative description of the subject property, photographs of the subject,

comparables used in Plaintiff‟s appraisal, various maps showing the relevant portion of the

subdivision plat drawing, an aerial view of the subject subdivision, a sales comparison grid, and

a fairly detailed two page narrative explaining adjustments Plaintiff made to its comparables.

(Ptf‟s Ex 1.) Healy, who has 11-plus years of appraisal experience with the Clackamas County

Assessor‟s office (April 2001 – December 2012) and eight years of experience as an independent

fee appraiser, concluded that the “sales comparison approach is considered the only reliable

indicator of the subject‟s market value and indicates a market value for the subject of $400,000

as of 1/1/2011.” (Id. at 18-19.)

At trial, Healy testified that he had essentially two comparables, one of which (#2) is

located adjacent to the subject property, and the other (# 1) located on the same block about

seven lots away from the subject property. (See also Ptf‟s Ex 1 at 8-10.) Healy‟s comparable

number one sold in March 2010 for $460,000. (Id. at 10.) Healy made adjustments for

differences in size, topography, and view, and, with net adjustments of $23,538 (negative),

arrived at an adjusted sale price for that property of $436,462. (Id.) Healy‟s comparable number

three is the same property as his comparable number one, but represents a “current” listing for

that property of $600,000. Healy applied a negative ten percent adjustment ($60,000) to the list

DECISION TC-MD 120165C 2

price because he felt that represented the upper end of the value range for that property, and a

positive 11 percent adjustment ($66,000) to account for changes in market conditions, for a net

market adjustment of minus $6,000. (Id.) Healy testified, and his report reflects, that his

comparable sale number two, which is located immediately adjacent to the subject property,

“was given the most weight as it is located next to the subject and required fewer adjustments.”

(Id. at 13.) Healy‟s adjusted sale price for comparable number two is $399,154. (Id. at 10.)

Healy concluded that the sales of comparables one and two, and the current listing of comparable

number one (set out as comparable #3 in his appraisal) “supports a value estimate for the subject

of $400,000.” (Id. at 10, 13.)

II. ANALYSIS

RMV is defined by statute as “the amount in cash that could reasonably be expected to be

paid by an informed buyer to an informed seller, each acting without compulsion in an arm‟s-

length transaction occurring as of the assessment date for the tax year.” ORS 308.205(1).1 The

assessment date for the 2011-12 tax year was January 1, 2011. See generally ORS 308.007.

Plaintiff bears the burden of proof which, by statute, is a “preponderance” of the

evidence. ORS 305.427. This court has previously stated that a preponderance of the evidence

means “the greater weight of evidence, the more convincing evidence.” Yarborough v.

Department of Revenue, TC 5075, WL 4094875 *3 (Sept 18, 2012) (citing Feves v. Dept. of

Revenue, 4 OTR 302, 312 (1971)).

Plaintiff complied with the applicable administrative rule, which requires that

consideration be given to the three approaches to value (income, cost, and sales comparison),

though they need not all be used. OAR 150-308.205-(A)(2)(a); see also Allen v. Dept. of Rev.,

1

The court‟s references to the Oregon Revised Statutes (ORS) are to 2009.

DECISION TC-MD 120165C 3

17 OTR 248, 252 (2003); Gangle v. Dept. of Rev., 13 OTR 343, 345 (1995). Ultimately,

Plaintiff concluded that the sales comparison approach was the only reliable indicator of value

for the subject; Healy concluded that the cost approach was inapplicable because there are no

improvements to the land, and the income approach was inapplicable because “vacant residential

land is generally not leased or used to generate income.” (Ptf‟s Ex 1 at 11, 18); See Pacific

Power & Light Co. v. Dept. of Revenue., 286 Or 529, 533, 596 P2d 912 (1979) (ruling that

“whether in any given assessment one [valuation] approach should be used exclusive of the

others or is preferable to another or to a combination of approaches is a question of fact to be

determined by the court upon the record”).

“Under the sales comparison approach, the value of a property is derived by „comparing

the subject property with similar properties, called comparable sales.‟ That comparison is based

on many factors, and adjustments are made for any differences between the comparable sales and

the subject property so that the appraiser can derive a value for the subject property.” Magno v.

Dept. of Rev., 19 OTR 51, 58 (2006) (citations omitted); see also OAR 150-308.250-(A)(2)(c)

(“In utilizing the sales comparison approach only actual market transactions of property

comparable to the subject, or adjusted to be comparable, will be used.”).

The court finds that Plaintiff presented persuasive evidence that the RMV of the subject

property, as of January 1, 2011, was $400,000. Plaintiff‟s comparables are in the same

neighborhood as the subject and were adjusted for differences between those sales and the

subject property. Because this was an uncontested trial following motion for default, no

evidence was presented by or on behalf of the property owner. The greater weight of the

evidence before the court supports an increase in RMV to $400,000. This number deviates from

the $451,202 RMV pleaded in the Complaint, but the legislature has given the court the

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DECISION TC-MD 120165C 4

authority “to determine the real market value or correct valuation on the basis of the evidence

before the court, without regard to the values pleaded by the parties.” ORS 305.412.

III. CONCLUSION

The court concludes that, for the 2011-12 tax year, the real market value of the subject

property, Account 05004830, should be increased from $235,000 to $400,000. Now, therefore,

IT IS THE DECISION OF THIS COURT that Plaintiff‟s Motion for Default is denied.

IT IS THE FURTHER DECISION OF THIS COURT that Plaintiff‟s appeal is granted in

part, with the real market value of property identified as Account 05004830 increased to

$400,000 for the 2011-12 tax year, as set forth above.

Dated this day of December 2012.

DAN ROBINSON

MAGISTRATE

If you want to appeal this Decision, file a Complaint in the Regular Division of

the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;

or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.

Your Complaint must be submitted within 60 days after the date of the Decision

or this Decision becomes final and cannot be changed.

This document was signed by Magistrate Dan Robinson on December 7, 2012.

The Court filed and entered this document on December 7, 2012.

DECISION TC-MD 120165C 5