The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
LINDA WITHERRITE, )
)
Plaintiff, ) TC-MD 200078R
)
v. )
)
UMATILLA COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appealed a Real Property Order from the Umatilla County Board of Property
Tax Appeals (BOPTA), dated March 6, 2020, for the 2019-20 tax year. A telephone trial was
held jointly on August 12, 2020, with Garton and Associates Realtors, LLC v. Umatilla County
Assessor, TC-MD 20077R. Linda Witherrite (Witherrite) appeared and testified on her own
behalf. Kalvin Garton (Garton) and Shane Garton also testified on behalf of Plaintiff. Douglas
Olsen, Umatilla County Counsel, appeared on behalf of Defendant. Clint Markle testified on
behalf of Defendant. Plaintiff’s Exhibits 1 to 41, 45 to 51 and rebuttal Exhibits 43 to 44 were
received into evidence without objection. Defendant’s Exhibits A and B were received into
evidence without objection.
I. STATEMENT OF FACTS
The subject property is a one-story office building, approximately 60 years old, with a
main floor consisting of 3,910 square feet on a 4,791-square-foot lot. The subject property
(account 111386) is one half of a building; the other half is a separate tax lot and is identified in
the Garton appeal. Defendant’s 2019-20 tax roll value for the subject property was $133,650.
That value was reduced by BOPTA to $80,960. Plaintiff requests the court reduce the value to
$45,000.
DECISION TC-MD 200078R 1
Garton testified he is retired as an accredited land consultant, was formally a fee
appraiser for 18 years, and is currently a real estate agent. Garton listed the subject property and
placed it on the Multiple Listing Service (MLS) in April 2018 for $135,000. (Ex 11.) Garton
testified that after more than a year he only received a single offer, for the both sides of the
building, for $82,500. The owner of the building signed a counteroffer for $85,000. (Ex 27.)
Garton testified that the sale did not go through because the potential buyer was concerned about
the cost of adding sidewalks. Garton testified that the property was in a probate proceeding and
the attorney fees in that case were getting “too high.” Witherrite saw the property listing
advertisement, contacted Garton, and purchased the subject property for $45,000 cash, in
November 2019. She testified that she had no prior relationship to Garton or to the owners of the
property.
In October 2018 the City of Pendleton filed an affidavit for an administrative inspection
warrant for premises at 611-615 SE Emigrant Avenue, Pendleton. The affidavit alleged the
property was being used for multi-person residential occupancy, which was not an allowed use
of the building. (Ex A at 30-31.) In October 2018, the city received a court approved
Administrative Inspection Warrant. (Ex A at 33.) Garton met with city officials in October 2018
in his capacity as realtor and property manager, and advised them he was planning on putting 15
apartments into the building, but was told that the property would need permits and substantial
modification for that use. (Ex A at 34-35.) In October 2019, the city inspected the building at
601, 603 and 605 SE Emigrant Avenue, and found residential use in violation of city and state
codes. (Ex A at 39.) In late 2019, the city brought charges against Garton for unlawful use of
the subject property. (Ex A at 45-47.)
Garton testified that the highest and best use of the subject property is as multi-family
DECISION TC-MD 200078R 2
residential units. He estimated it would cost $250,000 to add sidewalks, $50,000 to $60,000 to
add sprinklers, plus other improvements, totaling approximately $400,000. Garton
acknowledged that if used as a commercial property the owner would not have to put in
sidewalks.
Garton selected 20 comparable sales of commercial properties for his analysis.
Comparable 1 is the Garton property which sold in November 2019 also for $45,000. Garton
adjustments netted zero change. Comparables 2 to 20 were commercial sites in the vicinity of
the subject property, which Garton adjusted for square footage of the building(s) and lots,
condition, and traffic count.1 Garton testified that it was obvious that a higher traffic count
would result in a greater property value and used his experience and intuition to determine those
adjustments.
II. ANALYSIS
The issue before the court is the real market value of the subject property for the 2019-20
tax year. “Real market value is the standard used throughout the ad valorem statutes except for
special assessments.” Richardson v. Clackamas County Assessor, TC–MD 020869D, WL
21263620 at *2 (Or Tax M Div Mar 26, 2003) (internal quotation marks omitted). Real market
value is defined in ORS 308.205(1)2, which states:
“Real market value of all property, real and personal, means 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.”
The real market value of property “shall be determined by methods and procedures in accordance
1
A detailed description of each of the comparables is not provided for the reasons set forth in the analysis
section.
2
References to the Oregon Revised Statutes (ORS) are to 2017.
DECISION TC-MD 200078R 3
with rules adopted by the Department of Revenue[.]” ORS 308.205(2). “The court looks for
arm’s length sale transactions of property similar in size, quality, age and location” to the subject
property. Richardson, WL 21263620 at *3. “In utilizing the sales comparison approach only
actual market transactions of property comparable to the subject, or adjusted to be comparable,
will be used. All transactions utilized in the sales comparison approach must be verified to
ensure they reflect arm’s-length market transactions. When nontypical market conditions of sale
are involved in a transaction (duress, death, foreclosures, interrelated corporations, or persons,
etc.) the transaction will not be used in the sales comparison approach unless market-based
adjustments can be made for the nontypical market condition.” OAR 150–308–0240(2)(c).
Plaintiff bears the burden of proof and must establish her case by a preponderance of the
evidence. ORS 305.427. “[I]t is not enough for a taxpayer to criticize a county’s position.
Taxpayers must provide competent evidence of the [real market value] of their property.”
Woods v. Dept. of Rev., 16 OTR 56, 59 (2002). “[I]f the evidence is inconclusive or
unpersuasive, the taxpayer will have failed to meet his burden of proof * * *.” Reed v. Dept. of
Rev., 310 Or. 260, 265, 798 P.2d 235 (1990). The assessment date for the 2019-20 tax year is
January 1, 2019. ORS 308.007; ORS 308.210.
A. Plaintiff’s and Garton’s purchases
Before analyzing Plaintiff’s numerous comparable sales, the court considers whether the
recent purchases by Garton and Witherrite represented arm’s length transactions. “If the sale is a
recent, voluntary, arm’s length transaction between a buyer and seller, both of whom are
knowledgeable and willing, then the sales price, while certainly not conclusive, is very
persuasive of the market value.” Kem v. Dept. of Rev., 267 Or. 111, 114, 514 P.2d 1335 (1973)
(citations omitted).
DECISION TC-MD 200078R 4
The two factors in favor of a finding that the sale of the subject property represented an
arm’s length transaction, is the length of time the property was on the market, and Plaintiff’s
independence in locating and purchasing it. Plaintiff asserts that the recent purchase of the
subject property and the purchase by Garton represented arm’s length transactions and are
indicative of its real market value because the properties were on the open market for more than
555 days and they paid more than the most recent failed offer. However, that may be offset by
the fact the property was listed for $135,000, whereas Plaintiff’s purchase was for one-third of
that listed price. The factors indicating the sale was not an arm’s length transaction are: 1) the
owners are out of state and the property was in probate with Garton testifying that mounting
attorney’s fees were a motivating factor in quickly selling the property; 2) Garton was acting as
the property manager and as the real estate agent; 3) Garton was being prosecuted for the way
the property was being used; and 4) Garton loaned or invested money in the adjacent property
and deducted those sums from the sales price. There is no indication that Garton or Witherrite
had any improper motive related to the sale. But, objectively, the facts weigh decidedly against a
finding that the purchase of the subject property represented an arm’s length transaction. Thus,
the court cannot rely upon that sale in determining the real market value of the subject property.3
Witherrite’s purchase of the subject property was contemporaneous with Garton’s. She
persuasively testified that she saw the real estate advertising independently and had no previous
3
Taxpayers often misunderstand the concept of “arm’s length transaction” as an indication of integrity,
honesty, or intent. Taxpayers often interpret a finding that sale of a property does not represent an arm’s length
transaction as an accusation of fraud or even criminal activity. Garton demonstrated that misunderstanding in a
letter to Defendant where he stated: “I was terribly offended at the tax appeal hearing when your employee said that
you did NOT consider this to be an arm’s length deal. [Witherrite] and I actually paid the estate $7,500 more for
this property than any other offers over the 555 days that the property was on the market though the Realtor’s
Multiple Listing Service.” (Ex 30.) The court does not infer that Garton or Witherrite did anything wrong.
DECISION TC-MD 200078R 5
connections with the property or Garton. Yet, the analysis of the seller’s side of the transaction
is still a problem. Objectively the sellers were facing continuing legal fees in the probate estate
and potential administrative or even criminal action pertaining to the property. Garton was both
agent and an investor in the property. Under these facts the court cannot rely on Witherrite’s
purchase as an arm’s length transaction.
B. Highest and best use of the property
“ ‘Highest and best use’ means the reasonably probable use of vacant land or an
improved property that is legally permissible, physically possible, financially feasible, and
maximally productive, which results in the highest real market value.” OAR 150-308-
0240(1)(e). “Determining highest and best use for the unit of property is necessary for
establishing real market value.” OAR 150-308-0240(1)(i).
Garton testified that the highest and best use of the subject property would be as a
boarding house.4 He indicated that the need in the community for low-cost housing was the
primary factor in his opinion. However, Garton acknowledged that the city would not allow the
subject property to be used as a boarding house in its present condition, indeed, he estimated it
would cost about $400,000 to make the necessary changes, including adding sidewalks and
sprinklers. Garton’s selection of highest and best use was not legally permissible as determined
by the city and his own admission, and considering the improvements required to convert the
property were five times the roll value, that use was not financially feasible. When Garton
selected properties as comparables and made adjustments, he appears to have used a highest and
best use value as a boarding house. Repeatedly during his testimony, Garton asserted that
4
This testimony was primarily about the Garton property. Garton’s testimony was sparse as to the highest
and best use of the Witherrite property. While Garton testified that the Witherrite property was purchased for a
thrift shop, the comparables selected do not match that as the highest and best use.
DECISION TC-MD 200078R 6
sidewalks were an important element to the comparable properties that he selected and the
adjustments he made. Garton’s error in highest and best use selection skews his entire analysis.
Defendant opined the highest and best use of the property was as a commercial building.
Accordingly, no sidewalks or sprinkler system would be necessary. Based on the pictures of the
subject property, the comparables, and the properties’ history, the court agrees that the highest
and best use of the subject property is commercial — as an office building or retail.
C. Plaintiff’s comparable sales
Plaintiff presented twenty comparable sales adjusted for factors, such as square footage,
condition, and traffic count. Comparable 1 is the Garton property. As explained above, the court
does not view the sale as an arm’s length transaction, and thus this sale should not be considered.
Most of the comparables presented by Garton have unusually large adjustments. An extreme
example of this is comparable 13, whose $440,000 sales price is adjusted downward for square
footage and traffic count by $450,000 and then adjusted upward for condition by $200,000.
Selecting properties necessitating adjustments this large, means they are not good comparable
properties for establishing the real market value as the court has traditionally done. And while
this comparable is extreme, the others in the group have adjustments so large, that they are
unusable. Additionally, Garton adjusted for traffic count that he testified were based on his own
intuition/guesses. While this court has considered traffic count adjustments in the past — they
must be evidence based. Garton’s testimony clearly demonstrated his knowledge of the market
transactions in the area around the subject property, nevertheless, the court cannot reply upon his
guesses for making traffic count adjustments.
Garton’s comparable 4 appears to be commercial building of some type, but he offered
scant other information. He presented a printout from the MLS showing a quit claim deed dated
DECISION TC-MD 200078R 7
March 2018, for about half the price it sold in December 2016. No evidence was produced to
verify the sale or explain why this was a quit claim instead of a general warranty deed.
Comparable property 11 was a sale concluded more than one year after the assessment date
without a time adjustment and was sold by an out of state probate estate. No further information
about that sale or adjustments was provided. Neither of these sales assist the court in
determining a real market value for the subject property. The court finds that Plaintiff has failed
to meet its burden of proof for the court to order a change in the real market value of the subject
property. Defendant’s Answer requests the court to sustain the BOPTA decision. Thus, it is
unnecessary to analyze their evidence of value.
III. CONCLUSION
After careful consideration, the court concludes that Plaintiff has failed to meet her
burden of persuasion. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal is denied
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 this Decision
or this Decision cannot be changed. TCR-MD 19 B.
Some appeal deadlines were extended in response to the Covid-19 emergency.
Additional information is available at https://www.courts.oregon.gov/courts/tax
This document was signed by Magistrate Richard Davis and entered on
September 15, 2021.
DECISION TC-MD 200078R 8