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Sid Wurzburg, Spirit Lake, pro se appellant.
Barry McHugh, Kootenai County Prosecuting Attorney; John A. Cafferty, Civil Deputy Prosecuting Attorney, Coeur d'Alene, for respondent. John A. Cafferty argued.
GUTIERREZ, Chief Judge.
Sid Wurzburg, co-owner of a vacant lakefront parcel, appeals from the district court's order affirming valuations of the property determined by the Kootenai County Assessor. Wurzburg primarily asserts that the district court erred by holding Wurzburg to the wrong burden of proof and by finding that the assessor's method of valuation was appropriate to reflect the market value of the property. For the reasons set forth below, we affirm in part, reverse in part, and remand the case for entry of an amended order.
FACTS AND PROCEDURE
Wurzburg owns a one-eighteenth property interest in a vacant waterfront parcel adjacent to Spirit Lake in Kootenai County, Idaho. In 2010, the Kootenai County Assessor valued the property at $226,110 ($224,640 for the land and $1,470 for the improvements) if it was a buildable parcel. Wurzburg agrees that amount is the appropriate valuation if the parcel was buildable. It is undisputed, however, that the parcel is not buildable, meaning it is not currently or readily suitable to support a residence owing to the facts that no sewer is available and no onsite drain field for a septic tank is possible because of the parcel's proximity to Spirit Lake. As a nonbuildable property, it is subject to a reduction in value, or discount rate, from the buildable value assessment. The conflict between Wurzburg and Kootenai County arose because Wurzburg believes the reduction of value of the property should have been greater than the reduction applied by the county assessor. Wurzburg contends the value of the property should have been reduced by 66 2/3% for a value in 2010 of $76,350. Kootenai County reduced the value of the property by 50% for a value in 2010 of $113,790. Wurzburg appealed the county assessor's 2010 valuation to the Kootenai County Board of Equalization (BOE), which upheld the assessor's determination. Wurzburg again appealed, and the Board of Tax Appeals (BTA) affirmed.
While the appeal was pending before the BTA, Kootenai County issued 2011 property valuations. The assessor determined the parcel's value in 2011 was $96,912, again applying a 50% reduction in value for lack of buildability. Wurzburg appealed the county
assessor's 2011 valuation. He again agreed with the assessed value were the parcel buildable, but argued the value should be fixed at $63,648, applying the 66 2/3% reduction. The BOE upheld the assessor's 2011 valuation after conducting a hearing.
Thereafter, Wurzburg appealed both the 2010 and 2011 valuations to the district court. The appeals were consolidated. After a de novo trial, held pursuant to Idaho Code § 63-3812, the district court affirmed both tax year valuations. It issued amended findings of fact, conclusions of law, and an order from which Wurzburg timely appeals. The primary issues Wurzburg presents on appeal are the burden of proof to which the district court held Wurzburg and the method of determining the appropriate reduction in valuation used by the Kootenai County Assessor. Additionally, Wurzburg challenges the use of a matched pair analysis to support the 50% reduction, asserts the district court erred in finding property values, and asserts the district court erred by applying Idaho Code § 63-3813 and freezing the property value for the subsequent year.
A. Standard of Review
Where the district court conducts a trial de novo pursuant to Idaho Code § 63-3812(c) in an appeal from a BTA decision, this Court defers to the district court's findings of facts that are supported by substantial evidence, but exercises free review over the district court's conclusions of law. Kimbrough v. Idaho Bd. of Tax Appeals, 150 Idaho 417, 419-20, 247 P.3d 644, 646-47 (2011); Canyon Cnty. Bd. of Equalization v. Amalgamated Sugar Co., LLC, 143 Idaho 58, 60, 137 P.3d 445, 447 (2006). The interpretation of a statute is a question of law over which we exercise free review. Kimbrough, 150 Idaho at 420, 247 P.3d at 647.
B. Burden of proof
Wurzburg argues the district court erred in determining the burden of proof applicable in this case by applying the clear and convincing evidence standard set forth in Kimbrough, 150 Idaho at 421-22, 247 P.3d at 648-49. Wurzburg challenges the district's court's presumption that the assessor's valuations are correct and, in accordance with Kimbrough, could only be overcome by showing it was " manifestly excessive, fraudulent or oppressive; or arbitrary, capricious, and erroneous resulting in discrimination against the taxpayer." Id. Wurzburg asserts the clear and convincing evidence standard in Kimbrough is the standard of proof for appellate review, but the applicable burden of proof at trial before the district court is the preponderance of the evidence test, pursuant to Idaho Code §§ 63-511(4) and 63-3812(c). Wurzburg challenges all findings of fact and conclusions of law drawn under the misapplied burden of proof.
Kootenai County asserts that, in looking at the language in the district court's order in context, the district court found that Wurzburg did not meet the lower preponderance of the evidence test. Although Kootenai County concedes that the district court recited a hybrid burden of proof, comingling the preponderance of the evidence test with the standard in Kimbrough, the County asserts the error is harmless when considering the order as a whole and how the district court applied the burden of proof.
Idaho Code § 63-511(4), governing appeals from a county board of equalization, provides in relevant part:
In any appeal taken to the board of tax appeals or the district court pursuant to this section, the burden of proof shall fall upon the party seeking affirmative relief to establish that the valuation from which the appeal is taken is erroneous, or that the board of equalization erred in its decision
regarding a claim that certain property is exempt from taxation, the value thereof, or any other relief sought before the board of equalization. A preponderance of the evidence shall suffice to sustain the burden of proof. The burden of proof shall fall upon the party seeking affirmative relief and the burden of going forward with the evidence shall shift as in other civil litigation.
(Emphasis added.) Similarly, Idaho Code § 63-3812(c) puts forward a taxpayer's burden of proof on ...