Swanek v. Dept. of Rev.

116 July 22, 2022 No. 6

IN THE OREGON TAX COURT

REGULAR DIVISION

Cathy J. SWANEK,

Plaintiff,

v.

DEPARTMENT OF REVENUE,

State of Oregon,

Defendant,

and

LANE COUNTY ASSESSOR

Defendant-Intervenor,

(TC 5423)

In this property tax case, Plaintiff sought a reduction in the real market

value (RMV) of her properties due to periodic shooting occurring on neighboring

federal land. Plaintiff separately asked the court to create a new class of special

assessment. The Lane County Assessor (assessor) presented an appraisal con-

cluding that Plaintiff’s property was worth more than the current RMV on the

tax rolls. Taxpayers seeking a value reduction below the RMV on the tax roll

bear the burden of proof and therefore must provide competent evidence, such

as appraisal reports and testimony by licensed professionals. ORS 305.427. The

court concluded that the assessor carried her burden of proving a value nigher

than that shown on the roll, and that Plaintiff did not carry her burden of proving

any reduction. The court also concluded that only the legislature is authorized

to create a new class of property for assessment purposes. The court therefore

held ordered that the RMV on the roll be increased to value the assessor proved

at trial.

Trial was held February 1, 2022, in the courtroom of the

Oregon Tax Court, Salem.

Cathy J. Swanek argued the cause pro se.

Sebastian Tapia, Lane County Counsel, Eugene, argued

the cause for Defendant-Intervenor Lane County Assessor.

Decision rendered July 22, 2022.

ROBERT T. MANICKE, Judge.

I. INTRODUCTION

On appeal from the Magistrate Division, Plaintiff

brings this property tax matter concerning her two contig-

uous parcels of property in rural Lane County, identified

as Accounts 1205754 (Lot 1202) and 1446879 (Lot 1203).

Cite as 25 OTR 116 (2022) 117

Defendant Department of Revenue (department) initially

was the sole defendant by operation of ORS 305.501(1). The

Lane County Assessor (assessor) intervened as a defendant

early in the case, and the department tendered defense to

the assessor and did not participate in trial.

Plaintiff’s complaint is generally styled as an appeal

of the property tax assessment of the property for tax year

2019-20. Plaintiff asks the court to reduce the property’s

real market value to account for frequent target shooting on

neighboring land owned by the federal government which,

among other things, resulted in the shooting and wounding

of her son on her property in 2019. However, Plaintiff seeks

relief beyond a reduction in real market value. Plaintiff also

asks the court to consider her property for any applicable

exemption or special assessment programs for which the

frequent target shooting could make her property eligible,

including “act of God” relief. Finally, she asks the court to

exercise its equitable powers, either to simply reduce the

value of her property or to create a new class of special

assessment that she describes as a “residence safety zone.”

The assessor asks the court to increase the real

market value, from the amount determined by the Board of

Property Tax Appeals order from which Plaintiff appealed,

to an amount conforming to the evidence presented at trial.

II. FACTS

Lot 1202 is a 4.6-acre parcel that is improved by a

residence. The residence is 3,540 square feet and includes

four bedrooms and four and a half bathrooms and has an

attached three-car garage. Lot 1203 is a 37.18-acre parcel

improved by a 2,407-square-foot residence, which consists of

two bedrooms, one and a half bathrooms, with an attached

garage and unfinished storage space.1 The lots share a

four-acre pond that is fed by Bear Creek. Both parcels are

bounded by a federal Bureau of Land Management (BLM)

access road to the north. Lot 1203 is bounded by federally

owned and managed land to the west and private timber

land to the south. Lot 1202 is zoned for rural residential use.

1

Plaintiff apparently disputes this characterization, stating that “[a]ppraiser

claims Lot 1203 has 8 garages worth $15,000 each. * * * [T]he building has always

been listed as an agriculture building. We have never used it for cars.”

118 Swanek v. Dept. of Rev.

Lot 1203 is zoned for Impacted Forest Land and is steeply

sloped and forested.

For Lot 1202, the Assessor initially determined a real

market value of $1,001,755, that was subsequently reduced to

$800,000 by the Lane County Board of Property Tax Appeals

(BOPTA); its maximum assessed value is $429,828. For Lot

1203, the Assessor initially determined a real market value

of $1,072,497, that was subsequently reduced to $847,264

by the BOPTA; its maximum assessed value is $331,425.

Plaintiff appeals from a Magistrate Division decision sus-

taining the values determined by the BOPTA.

A. Plaintiff’s Evidence

At trial, Plaintiff testified that her use of the prop-

erty is significantly curtailed by the shooting that occurs on

the neighboring BLM-managed land to the west. She testi-

fied that her son was shot and almost killed by a stray bullet

originating from the BLM land in July 2019. In support of

her testimony, Plaintiff submitted a police report document-

ing the shooting of her son. The police report states that “[o]n

7-29-2019 I was advised that Swanek had been struck by a

bullet while working on his families [sic] property off Lake

Forest Drive on 07-27-19 at about 1700 hours.” The report

goes on to describe the officer’s observations including seeing

an area near a spur road with spent shell casings and broken

bottles with no backstop or other barrier to prevent bullets

from traveling to the valley below.

Plaintiff testified that at times the shooting is loud

enough for her to hear the bullets hitting metal nearby.

Plaintiff submitted numerous letters she had written to

BLM officials and elected local and federal representatives

attempting to address the shooting onto the property and

proposing that a “Residence Safety Zone” be established

around private residences abutting BLM land. Plaintiff also

submitted BLM and Oregon Target Shooting regulations,

which she testified are inadequate and are not being appro-

priately enforced. Plaintiff asserted that she cannot use the

property to produce income because of the liability resulting

from the shooting onto the land.2

2

Plaintiff testified that she had to shut down her horse stabling operation

due to the shooting and that she was unable to proceed with her plans to establish

Cite as 25 OTR 116 (2022) 119

Plaintiff identified other conditions affecting the

value of the property: noise and garbage caused by traffic on

the access road to the north, damage caused by beavers that

chew through pipes and electrical lines on the property, and

issues with flooding and erosion. Plaintiff stated that she

has spent $23,000 dredging and hauling silt build-up from

the pond on the property to prevent flooding. Plaintiff tes-

tified that the dredging operation must be performed once

a decade at her expense. Plaintiff asserted that the prop-

erty lacks a well; as a result, she spent $11,000 to develop a

spring that runs dry in the summer, and she incurred the

additional expense of tanking in potable water. Plaintiff

identified other conditions typical on rural property such as

issues with cell service, electricity outages, and snow.

Plaintiff did not submit an appraisal report or ask

the court to find any specific value. She testified that she

could not find a real estate appraiser who would prepare

an appraisal with a negative adjustment for the recur-

ring target shooting problem. In her post-trial brief, she

expressed frustration that “Lane County refused to provide

an appraiser able to consider and value our two issues.”

B. The Assessor’s Evidence of Value

The assessor’s witness, a registered appraiser with

more than 10 years’ experience who is employed by the

assessor, prepared an appraisal report for each tax lot and

testified regarding her report at trial. The appraiser testi-

fied that the highest and best use is the current use—in the

case of both lots, as residential property. She considered the

income, cost, and comparable sales approaches to value. OAR

150-308-0240(2)(a). She testified that the income approach

was considered but not “developed” because there is no mar-

ket for rentals for this type of custom-built rural residential

property. The appraiser prepared a cost approach analysis

and determined a value indicator of $991,992 for Lot 1202

and $1,029,657 for Lot 1203.3 She gave the cost approach

little weight because the relatively low sample size within

a riding academy for handicapped children and set up a bed and breakfast on

the property.

3

At trial, the assessor’s appraiser identified some corrections to the table on

concerning comparable land sales used in their cost approach. These changes do

not alter her conclusion of value under that approach.

120 Swanek v. Dept. of Rev.

the rural area makes estimating depreciation difficult. The

appraiser testified that the sales-comparison approach is

considered the most reliable method valuing residential

property. After considering three comparable sales for each

tax lot, she made adjustments where data were available to

do so. She then weighted the comparable properties to reach

her sales comparison indicator of value. The appraiser ulti-

mately concluded to a value under the sales comparison and

cost approaches of $1,000,000 for Lot 1202 and $1,040,000

for Lot 1203. Commenting on Plaintiff’s testimony, the

appraiser testified that the pond should be considered an

“amenity” for fire safety reasons, and that in her experience,

bordering on BLM-managed land generally is considered an

amenity and is advertised accordingly.

III. ISSUES

A. What is the real market value of Lots 1202 and 1203 for

tax year 2019-20?

B. May the court grant any of the other forms of relief

Plaintiff seeks?

IV. ANALYSIS

A. Real Market Value

This court has jurisdiction to determine the real

market value of property in a property tax dispute. See ORS

305.412.4 Real market value, for purposes of property tax

assessment, is defined as follows:

“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.”

ORS 308.205(1). The real market value of property is deter-

mined as of the January 1 assessment date preceding the

tax year, which commences July 1. ORS 308.210(1); ORS

308.007(1)(b). The value of property is ultimately a question

of fact. Chart Development Corp. v. Dept. of Rev., 16 OTR 9,

11 (2001). As Plaintiff acknowledged in her complaint, the

4

The court’s references to the Oregon Revised Statutes (ORS) are to the 2017

edition.

Cite as 25 OTR 116 (2022) 121

party seeking affirmative relief has the burden of proof.

ORS 305.427. This means that Plaintiff bears the burden of

showing that the real market value of the property should be

lower than the value concluded by the BOPTA. Likewise, an

assessor seeking an increase above the BOPTA value bears

the same burden to prove that the value should be increased

over its current value. The court “has the responsibility of

making an original, independent, and de novo determina-

tion of value.” Chart Development Corp., 16 OTR at 11 (citing

Mid Oil Co. v. Dept. of Rev., 297 Or 583, 588, 686 P2d 1020

(1984). To do so, the court must apply the law of evidence to

the facts presented by each party.

1. Plaintiff’s evidence

Oregon courts have generally held that an owner

is entitled to testify regarding the value of property. Leaper

v. Dept. of Rev., 19 OTR 388, 393 (2008); Freitag v. Dept. of

Rev., 19 OTR 37, 45 n 8 (2006); Dept. of Transportation v. El

Dorado Properties, 157 Or App 624, 971 P2d 481 (1998). Here,

Plaintiff testified regarding a variety of conditions that could

negatively affect value. However, Plaintiff failed to present

evidence that would enable the court to estimate an appro-

priate value reduction. Most of her testimony amounted to a

critique of the assessor’s appraisal report, but Plaintiff pre-

sented no appraisal report supporting her position. As this

court has stated, “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.” Woods v. Dept. of Rev.,

16 OTR 56, 59 (2002) (citing King v. Dept. of Rev., 12 OTR

491 (1993)). “Competent evidence includes appraisal reports

and sales adjusted for time, location, size, quality, and other

distinguishing differences, and competent testimony from

licensed professionals such as appraisers, real estate agents

and licensed brokers.” Yarbrough v. Dept. of Rev., 21 OTR

40, 44, (2012). Without such evidence, the court is unable to

grant Plaintiff any relief. The court finds that Plaintiff has

not carried her burden to prove a reduction in the property’s

real market value.

2. The assessor’s evidence

The assessor presented an appraisal report and tes-

timony from a qualified appraiser in support of its requested

122 Swanek v. Dept. of Rev.

values. The assessor’s appraisal report considered all three

approaches to value, as the department’s rules require.

See OAR 150-308-0240(2)(a). The assessor’s appraiser was

available to testify regarding the report she prepared and

explained her rationale for relying primarily on the sales-

comparison approach and explained her adjustments and

methodology. Plaintiff raised concerns regarding the impact

of the shooting and various conditions on the property but

failed to rebut the assessor’s appraisal report with persua-

sive evidence of her own.

3. Conclusion as to value

Plaintiff claims that the county “does not acknowl-

edge that shooting from Lane County and BLM controlled

forestland and the BLM public access road running through

our property negatively affects the use/enjoyment and abil-

ity to generate necessary income from such property.” The

county BOPTA, an informal tribunal that is not required

to apply evidentiary rules, reduced the aggregate real

market value of the two lots by approximately 20 percent.

Dissatisfied, Plaintiff appealed and knowingly took on the

burden of proving to what degree the shooting or other fac-

tors affected the value, and what value the property actu-

ally has. Plaintiff has not carried this burden. Her attempt

to find fault with the assessor for not directing her to an

appraiser during this litigation is unavailing. In the absence

of countervailing evidence, the court finds that the asses-

sor’s appraisal is the best evidence of value.

B. Other Relief Requested

Plaintiff otherwise seeks relief that neither the

Lane County Assessor, the Oregon Department of Revenue,

nor any court is authorized to provide. Plaintiff did not argue

at trial the position stated in her complaint that the shoot-

ing activity constitutes an “act of God” that would justify

an abatement of tax under ORS 308.425 or a reduction in

maximum assessed value under ORS 308.146. Had she done

so, her claim would have suffered from the same absence of

specific evidence of value reduction that caused her claim for

a reduction in real market value to fail. Plaintiff has identi-

fied no other existing exemption or special assessment law

Cite as 25 OTR 116 (2022) 123

that would reduce her tax burden, nor is the court aware of

one. See ORS 307; ORS 308A; ORS 321.257 to 321.390.

As for Plaintiff’s request for general equitable relief

or for adoption of a new exemption or special assessment

program such as a “residence safety zone,” the people of

the state, through the Oregon Constitution, have entrusted

only the legislature with authority to create new classifica-

tions that deviate from the existing property tax laws. See

Or Const, Art IX, § 1 (“The Legislative Assembly shall, and

the people through the initiative may, provide by law uni-

form rules of assessment and taxation. All taxes shall be

levied and collected under general laws operating uniformly

throughout the State”) (emphasis added). Neither local gov-

ernments nor state administrative agencies may do so on

their own. See also State ex rel. Pierce v. Slusher, 119 Or

141, 152-53, 248 P 358 (1926) (the power of taxation “is a

legislative power that cannot be exercised by the * * * judi-

cial branch of government”). The court understands that

Plaintiff is primarily concerned with stopping the shooting

onto her property. Although the court is sympathetic to the

wounding of Plaintiff’s son, the court’s power to offer redress

is limited to adjudicating property values by applying the

rules of evidence and procedure, and otherwise address-

ing matters arising under the “tax laws of this state.” ORS

305.412(1); ORS 305.410.

V. CONCLUSION

Now, therefore,

IT IS THE OPINION OF THIS COURT that

Plaintiff’s appeal must be denied; and

IT IS THE OPINION OF THIS COURT that, for tax

year 2019-20, the real market value of Account 1205754 (Lot

1202) is $1,000,000 and the real market value of Account

1446879 (Lot 1203) is $1,040,000. Counsel for Defendant-

Intervenor is directed to submit an appropriate form of

judgment.