The opinion
No. 60 September 9, 2014 479
IN THE OREGON TAX COURT
REGULAR DIVISION
John DUNZER,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant,
and
CLATSOP COUNTY ASSESSOR,
Defendant-Intervenor.
(TC 5200)
Plaintiff (taxpayer) appealed from a Magistrate Division decision as to real
market value (RMV) of property in Clatsop County. Taxpayer sought a lower
RMV than that determined by Defendant-Intervenor Clatsop County Assessor
(the county) and confirmed by the county board of property tax assessment.
Following trial, taxpayer’s valuation evidence was deemed credible but unpersua-
sive because taxpayer failed to provide support for the majority of his adjustment
values. At trial, the information in support of his adjustment values that tax-
payer attempted to provide the court was objected to as hearsay and ruled inad-
missible. Therefore even if taxpayer had successfully discredited the county’s val-
uation (which he did not) taxpayer would not have prevailed as he had failed to
provide evidence sufficient to convince the court that a lower RMV for the subject
property was warranted. Taxpayer’s appeal was therefore denied.
Trial was held by telephone on May 19, 2014.
John Dunzer, Plaintiff (taxpayer) argued the cause
pro se.
Heather L. Reynolds, Clatsop County Counsel, Astoria,
argued the cause for Defendant-Intervenor Clatsop County
Assessor (the county)
Decision for Defendant-Intervenor rendered on September 9,
2014.
HENRY C. BREITHAUPT, Judge.
I. INTRODUCTION
This matter is before the court following a trial held
by telephone on May 19, 2014. Plaintiff John Dunzer (tax-
payer) appeared pro se and requests a reduction in the real
480 Dunzer v. Dept. of Rev.
market value (RMV) of property identified as Account 14127
(subject property) for the 2012-13 tax year. Defendant-
Intervenor (the county), represented at trial by Clatsop
County Counsel Heather Reynolds, requests that the court
uphold the RMV determined by the board of property tax
appeals. Defendant Department of Revenue tendered its
defense of the case to the county.
II. FACTS
The subject property consists of a single-family res-
idence and 0.23-acre triangular-shaped lot in “the Cove”
neighborhood of Seaside, Oregon.
The subject property was built in 1994 and subse-
quently remodeled and improved. On the assessment date
the subject property featured four bedrooms, four and one-
half bathrooms,1 an attached finished garage,2 a central
vacuum system, a finished attic, and an elevator providing
access to all four floors.
Taxpayer appealed the 2012-13 tax year property
tax assessment for the subject property to the Magistrate
Division of the Oregon Tax Court. Dunzer v. Clatsop County
Assessor, TC-MD No 130276D, 2013 WL 6330893 (Dec 5,
2013). The magistrate found for the county. Id. Taxpayer
now appeals to the Regular Division.
At trial, the court granted the county’s pre-trial
Motion to Exclude Portions of Appraisal, and excluded
pages 25 to 28 and 33 to 35 of Plaintiff’s Exhibit 1 as
hearsay. Plaintiff’s Exhibit 2 was also excluded as hear-
say, except for pictures taxpayer took himself on pages
14 and 16. The court received in evidence an appraisal
report prepared by the county’s appraiser Michael Grant
(Grant).
1
Michael Grant testified that the subject property has three and one-half
bathrooms. Grant’s number is supported by an undated listing on page 27 of
Exhibit I-1, but contradicted by an undated listing on page 29 of that exhibit and
by taxpayer’s testimony. If Grant undercounted the number of bathrooms in his
appraisal, such error benefits taxpayer by resulting in lower adjustments to the
comparable properties.
2
Plaintiff describes the garage of the subject property as “detached” on page
9 of Exhibit 1, but describes the garage as “attached” on Exhibit 1 page 42, and
admits it is connected to the residence in page 8 of the same exhibit.
Cite as 21 OTR 479 (2014) 481
A. Taxpayer’s Position
Subject to the aforementioned exclusions, the court
received in evidence a document titled “Subject Property
Appraisal” prepared by taxpayer and purporting to support
taxpayer’s conclusion that the RMV of subject property is
$398,000. Taxpayer testified that he revised his adjustment
to $393,000 in response to information he learned from the
county’s appraisal. Taxpayer testified that he relied on the
Oregon Department of Revenue’s 2007 publication “The Sales
Comparison Approach to Value” (DOR Manual) to support
his RMV conclusion. Taxpayer’s comparable sales approach
considered two properties located on the same cul-de-sac
as the subject property. Comparable 1 sold for $400,000 on
October 31, 2012. Comparable 2 sold for $418,750 on April 5,
2012. The same properties were used as comparables in
Grant’s comparable sales approach.
Taxpayer adjusted the sale prices of the comparable
properties based on the criteria of lot features, home type,
construction quality, structural maintenance, building
area, covered porches, heating, number of bathrooms, eleva-
tor and central vacuum.
1. Lot Features
Taxpayer testified that he adjusted for “lot features”
because the only view of the nearby ocean from subject prop-
erty is from the roof, whereas in contrast, Comparable 1
enjoys a “direct ocean view” supporting a $5,000 negative
adjustment, and Comparable 2 enjoys an “expansive ocean
view” supporting a $15,000 negative adjustment. When
challenged in cross-examination to provide support for
those adjustment values, taxpayer testified that he relied
on studies found in Exhibit 2. Exhibit 2 was not admitted
into evidence; hence taxpayer’s adjustment values for lot fea-
tures are unsupported.
2. Home Type
Taxpayer testified that he made a $25,000 positive
adjustment for “home type” to Comparable 2 because, unlike
subject property and Comparable 1, it is a townhome with a
wall shared by an adjacent property. Taxpayer provided no
support for this adjustment value.
482 Dunzer v. Dept. of Rev.
3. Construction Quality
Taxpayer testified that he made a $15,000 nega-
tive adjustment for “construction quality” to Comparable 2
because, unlike subject property and Comparable 1, it was
built by a sophisticated owner and has numerous upgrades.
Taxpayer testified that he has been inside Comparable 2
numerous times, but did not provide any support as to how
the $15,000 adjustment value was determined.
4. Structural Maintenance
Taxpayer testified that he made a $35,000 nega-
tive adjustment to each comparable for structural mainte-
nance because “all of the deferred maintenance had been
eliminated” from those homes prior to being sold, whereas
the subject property continued to require similar mainte-
nance on the assessment date. When challenged in cross-
examination to provide support for those adjustment values,
taxpayer testified that he relied on his discussions with
contractors who performed the maintenance on the com-
parable properties, and pointed to the excluded Exhibit 2.
Information provided to taxpayer by contractors who are not
themselves before the court to testify is hearsay and as such
is not permissible evidence. As Exhibit 2 was not admitted
into evidence, taxpayer is without support for his structural
maintenance adjustment value.
5. Building Area
Taxpayer testified that the subject property is
larger in terms of “building area” than Comparable 1 and
that he made a $23,043 positive adjustment to that compa-
rable. Taxpayer testified that the subject property is larger
than Comparable 2 and that he made a $19,886 positive
adjustment to that comparable. Taxpayer calculated the dif-
ferences between the total cost per square foot of the subject
property and of each of the comparables using adjustment
values supported by tables in the DOR Manual.
6. Covered Porch
Taxpayer testified that Comparable 1 has a larger
covered porch than subject property and that he made a
$23,670 positive adjustment to Comparable 1 to account for
Cite as 21 OTR 479 (2014) 483
that difference. Taxpayer testified that Comparable 2 has
a larger covered porch than subject property and that he
made a $16,290 positive adjustment to Comparable 2 to
account for that difference. Taxpayer supported his covered
porch adjustment by testifying that he made his adjust-
ments using the values in the DOR Manual for covered
porch adjustments.
7. Heating
Taxpayer testified that improving the heating cov-
erage of his home to the same standard as the comparable
properties would require the installation of a new, larger-
capacity heating system. Taxpayer testified that the cost of
such a system would be $11,000 and that he has adjusted the
comparables negatively by that amount. When challenged in
cross-examination to provide support for the $11,000 adjust-
ment value, taxpayer testified that he relied on “contractor
costing information” which was contained in Exhibit 2 and
is not in the record. Accordingly, taxpayer’s $11,000 adjust-
ment for heating is without support.
8. Number of Bathrooms
Taxpayer testified that Comparable 1 has one less
bathroom than the subject property, and that he adjusted
Comparable 1 positively by $5,000 to account for this.
Comparable 2 and the subject property have the same num-
ber of bathrooms and taxpayer concluded no adjustment was
warranted for that comparable. When challenged to provide
support for the $5,000 adjustment value, taxpayer testified
that that value was “typically used in all of my appraisals,”
but taxpayer himself is not a certified appraiser and was not
qualified for purposes of the trial in this case as an expert in
real estate valuation. There are no other taxpayer apprais-
als in the record. Taxpayer’s $5,000 adjustment value for
number of bathrooms is without support.
9. Elevator and Central Vacuum
Taxpayer testified that the subject property has
an elevator, unlike either comparable, and that taxpayer
adjusted each comparable positively by $25,500 based on
what taxpayer paid to have his elevator installed. Taxpayer
484 Dunzer v. Dept. of Rev.
testified that the subject property and Comparable 1 have
identical central vacuum systems and no adjustment was nec-
essary, while Comparable 2 lacks a central vacuum system
and was adjusted positively by $1,500. However, taxpayer
adjusted both comparables positively by $27,000 for the cat-
egory of “elevator and central vacuum,” and thus incorrectly
adjusted Comparable 1 under the logic of his own approach.
During cross-examination, taxpayer supported his adjust-
ment value for the presence of an elevator by testifying that
he used the figure he believed that the subject property’s
elevator cost to install. Taxpayer did not substantiate this
figure. On cross-examination taxpayer testified that he did
not use the DOR Manual to determine his adjustment value
for the central vacuum system and offered no explanation as
to how he made his determination. Accordingly, taxpayer’s
adjustment values for both the elevator and central vacuum
are without support.
B. County’s Appraisal
Grant is a certified property appraiser for the county
and testified that he has performed numerous appraisals in
contested cases. In his appraisal, Grant considered the cost
approach, comparable sales approach and income approach,
and concluded that the income approach was not applica-
ble for valuing the subject property. Grant testified that the
highest and best use of the subject property is its current use
as a single-family home. Grant’s cost approach proceeded by
applying a 91.44 percent depreciation factor based on the
subject property’s original construction date to the values
found in the Department of Revenue’s 2005 Residential Cost
Factor Book. Grant’s cost approach supported a conclusion
that the RMV of the subject property was $565,000 as of the
assessment date.
In his comparable sales approach, Grant consid-
ered the same comparable properties as taxpayer. Grant
determined that for the year 2012 no adjustment for time
was warranted. Grant testified that the Department of
Revenue’s 2005 Residential Cost Factor book supported his
adjustments to the comparable properties to account for
their inferior square footage, the presence of an elevator and
interior vacuum system in subject property, and a number
Cite as 21 OTR 479 (2014) 485
of other inventory differences. Grant testified that the com-
parable sales approach was most indicative of the RMV and
that it supported the conclusion that the RMV of the subject
property was $529,588 on the assessment date.
III. ISSUE
The issue in this case is the RMV of the subject
property as of the assessment date of January 1, 2012.
IV. ANALYSIS
Real market value is defined as:
“[T]he 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).3 The RMV of real property is a question of
fact. As the party requesting affirmative relief in this pro-
ceeding, taxpayer bears the burden of proof on questions of
fact. ORS 305.427. To prevail in this appeal, taxpayer must
affirmatively prove that the requested RMV of $393,000 is
“more likely than not the value of the property.” Yarbrough v.
Dept. of Rev. (Yarbrough II), 21 OTR 40, 44 (2012).
Taxpayer has the burden of “proving his case by a
preponderance of the evidence,” which means “the greater
weight of evidence, the more convincing evidence.” Feves
v. Dept. of Revenue, 4 OTR 302, 312 (1971). This court has
stated that “it is not enough for a taxpayer to criticize a
county’s position. Taxpayers must provide competent evi-
dence of the RMV of their property.” Poddar v. Dept. of
Rev., 18 OTR 324, 332 (2005) (quoting Woods v. Dept. of
Rev., 16 OTR 56, 59 (2002)). “Competent evidence includes
appraisal reports and sales adjusted for time, location, size,
quality, and other distinguishing differences, and compe-
tent testimony from licensed professionals such as apprais-
ers, real estate agents and licensed brokers.” Yarbrough II,
21 OTR at 44.
Taxpayer provided the court with a document
styled as an appraisal and his own testimony in support. In
3
The court’s references to the Oregon Revised Statutes (ORS) are to 2011.
486 Dunzer v. Dept. of Rev.
contrast, the county provided the court with an appraisal
report and testimony from an appraiser qualified as an
expert. An appraiser’s role in a valuation dispute is “to
review and evaluate market data, and base conclusions on
such data.” McKee v. Dept. of Rev., 18 OTR 58, 64 (2004).
“Such a review of market data is the only way that the court
can reasonably choose between competing valuations for any
given parcel.” Yarbrough v. Dept. of Rev. (Yarbrough I), 20
OTR 400, 402 (2011). Both taxpayer and the county offer
competing valuations based on sales adjusted to be compa-
rable to subject property. The comparable sales indicator
of value is of primary importance in determining the out-
come of this case. Because of its importance, in a case such
as this one, “[p]ersonal conclusions with no basis in actual
market data are entitled to little or no weight.” McKee,
18 OTR at 64.
Taxpayer’s valuation was credible but unpersua-
sive. As described above, taxpayer failed to provide support
for the majority of his adjustment values. The information
in support of his adjustment value that taxpayer attempted
to provide the court was objected to as hearsay and ruled
inadmissible. Hearsay is defined as “a statement, other than
one made by the declarant while testifying at the trial or
hearing, offered in evidence to prove the truth of the matter
asserted.” ORS 40.450(3). A statement can either be “[a]n
oral or written assertion” or “[n]onverbal conduct of a per-
son, if intended as an assertion.” ORS 40.450(1). The pol-
icy underlying exclusion of hearsay is that hearsay deprives
the opposing party of the opportunity to confront the person
making the statement and to test the veracity and accuracy
of the statement by cross-examination. State v. Kendrick,
239 Or 512, 515, 398 P2d 471 (1965). Without evidence to
support taxpayer’s adjustments, the court regards these
adjustments as personal opinions and affords them very lit-
tle weight. See McKee, 18 OTR at 64. In this case, taxpayer’s
unsupported opinions are insufficiently persuasive to carry
his burden of proof.
Taxpayer made some criticisms of Grant’s appraisal.
Grant is a certified appraiser whose adjustments are made
based on the Department of Revenue 2005 Cost Factor Book.
The court finds Grant’s testimony to be both credible and
Cite as 21 OTR 479 (2014) 487
persuasive. Even if taxpayer successfully discredited Grant,
which he did not, taxpayer would not prevail where, as here,
he failed to provide evidence sufficient to convince the court
that a lower RMV for the subject property was warranted.
For the court to order a change to the RMV of the subject
property, taxpayer must persuade the court that the RMV
he is seeking is more likely than not the RMV of the subject
property. Taxpayer has not done so in this case.
V. CONCLUSION
Taxpayer has not borne the burden of proving his
proposed RMV for the property identified in the assessor’s
records as Account 14127. Now, therefore,
IT IS THE DECISION OF THIS COURT that tax-
payer’s appeal is denied.