The opinion
212 April 1, 2016 No. 23
23
Ellison II v. Clackamas County Assessor April22
1, OTR
2016
IN THE OREGON TAX COURT
REGULAR DIVISION
Barbara ELLISON,
Plaintiff,
v.
CLACKAMAS COUNTY ASSESSOR
and Department of Revenue,
Defendants.
(TC 5177)
Following the substantive decision in this matter, Plaintiff (taxpayer) submit-
ted an application for an award of attorney fees and costs. Defendant Department
of Revenue (the department) argued that because taxpayer did not prevail on her
claim for relief, the statutory basis for an award of fees and costs did not exist.
The department offered no authority for its position. Granting taxpayer’s appli-
cation, the court ruled that although a weakness in taxpayer’s appraisal was
a basis for the court not finding for taxpayer on her claim, the evidence of tax-
payer’s appraiser and his experience with the precise type of property in question
was of material benefit to the court and was a basis for rejecting the positions and
counterclaim of the county and the department in its entirety. In that capacity,
pursuant to the statute, the court had found “in favor of the taxpayer” with a
result that an award of attorney fees and costs was appropriate.
Submitted on Plaintiff’s Statement for Attorney Fees and
Costs for Plaintiff.
Jack L. Orchard, Jr., Ball Janik LLP, Portland, filed the
statement for Plaintiff (taxpayer).
Daniel Paul, Assistant Attorney General, Department of
Justice, Salem, filed the response for Defendant Department
of Revenue (the department).
Decision for Plaintiff rendered April 1, 2016.
HENRY C. BREITHAUPT, Judge.
This matter is before the court on the application
by Plaintiff (taxpayer) for an award of fees and costs in con-
nection with the proceedings in the Regular Division in this
matter.
The basis of taxpayer’s application is ORS 305.490
and ORS 305.790.1 Defendant Department of Revenue (the
1
The court’s references to the Oregon Revised Statutes (ORS) are to 2015.
Cite as 22 OTR 212 (2016) 213
department) asserts that in this case no award is allowed
under the statutes. The department acknowledges that tax-
payer successfully defended against the counterclaim of
Defendant Clackamas County Assessor (the county) and the
department. However, because taxpayer did not prevail on
its claim for relief, the department argues that the statutory
basis for an award of fees and costs does not exist.
The department offers no authority for its position.
Not even so much as an analysis of the text, context and leg-
islative history of the statutory provisions is given. The stat-
ute contains no basis for the position of the department, as
it permits an award of fees in a property tax matter where
the “court finds in favor of the taxpayer.” Here, on the claims
of the department and county, the court did find in favor of
taxpayer. Those claims were stated as counterclaims, but
even if they had been only assertions by the department and
county of correct value, the outcome of the case would jus-
tify an award of fees and costs—for the simple reason that
in rejecting the arguments of Defendants, the court would
have found “in favor of the taxpayer.”
The position of the department as to the construc-
tion of ORS 305.490 ignores the fact that the legislature
provided, in ORS 305.412, that the court has jurisdiction to
determine correct value. That context is one showing that
the legislature must have understood that important value
disputes could well be based on appraisal positions taken
by the department, whether or not stated as counterclaims.
Once taken by the department, the costs of defense are as
much within the scope of ORS 305.419 as those incurred in
defending against what may be stated to be a counterclaim.
In this case exception value was at issue. The out-
come of the case would burden or benefit a party for a sig-
nificant period of time, if not perpetually. The stakes were
high and the county and department made them extremely
high by arguing for a value approximately twice the amount
of the conclusion of the county board of property tax appeals
(BOPTA). The court accepts the argument of taxpayer
that an appeal of the decision in the Magistrate Division
was necessary to protect against what appeared to be, and
turned out to be, a persistent position of the county that
214 Ellison II v. Clackamas County Assessor
the property had been grossly undervalued by BOPTA. The
court also finds that, but for the massive counterclaim by
Defendants, it is much more likely than not that a settle-
ment on a value between taxpayer’s position and the BOPTA
finding would have been achieved. Whether a settlement
somewhere above taxpayer’s position was possible cannot
be determined. However, the persistence of Defendants in
arguing for a value over twice that of BOPTA suggests that
settlement would not have been possible.
The theory of the county and department was
that this property was “especial property.” The court is of
the opinion that the department rule in this regard, to the
extent it departs from the constitutional definition of real
market value, is invalid. The department asserted at trial
and in its closing brief that the rule does not depart from the
constitutional test.
The law in Oregon is that value is to be value in
exchange, not value in use or value to a particular taxpayer.
The position of the county departed completely from this
fundamental starting point. Attempting to use the notion of
especial property, which the appraiser for the county could
not explain or justify, that appraiser essentially argued
that the value of the property must be equal to the amount
taxpayer spent to build it. This position was rejected in the
opinion issued by this court.
The court finds that the position of the county
and department in this matter was objectively unreason-
able. Further, the persistence with which the position was
advanced left taxpayer with no alternative but to expend
significant amounts to defend against the position taken by
Defendants in the case. Persistence may not be bad faith or
malicious, but it is willful.
An award of fees and expenses in this matter is
needed to deter the type of claims made by Defendants and
then so inadequately supported.
The department also challenges the amount of
fees and costs claimed by taxpayer. The court accepts the
amounts claimed, noting that a reduction in total attorney
fees was made to apportion between taxpayer’s claim and
Cite as 22 OTR 212 (2016) 215
the defense against the counterclaims. Further, the court
accepts the application for fees of taxpayer’s appraiser.
Although a weakness in that appraisal was a basis for the
court not finding for taxpayer on her claim, the evidence of
the appraiser and his experience with the precise type of
property in question was of material benefit to the court and
was a basis for rejecting the position of the department in its
entirety.
The application is granted in its entirety. Counsel
for taxpayer is directed to submit an appropriate form of
supplemental judgment. Now, therefore,
IT IS ORDERED that Plaintiff’s application for
attorney fees and costs is granted.