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Mueller v. Treanor

Supreme Court of Wyoming

November 29, 2018

KATHY TREANOR, in her official capacity as Washakie County Assessor, Appellee (Respondent).

          Appeal from the District Court of Washakie County The Honorable Robert E. Skar, Judge

          Representing Appellant: David M. Clark, Greear Clark King, P.C., Worland, Wyoming.

          Representing Appellee: Tyler J. Garrett, Hathaway & Kunz, LLP, Cheyenne, Wyoming.

          Before DAVIS, C.J., and BURKE [*] , FOX, KAUTZ, and BOOMGAARDEN, JJ.


         [¶1] Appellants, Helmut J. Mueller Limited Partnership (Mueller); Josef Matuschka; Chicago Properties, Limited Partnership (Chicago Properties); Jerome P. Glunz; and John P. Glunz challenged the Washakie County Assessor's (Assessor) 2014 notices of assessment, which classified Taxpayers' four properties as either residential or vacant residential for tax purposes. The appellants (collectively, "Taxpayers") argue their properties qualify for classification as agricultural lands. The Washakie County Board of Equalization (county board) agreed with Taxpayers and reversed the Assessor's valuations. However, the Wyoming State Board of Equalization (state board) reversed the county board's decision, and the district court affirmed the state board's decision. We affirm the district court's order.


         [¶2] This case presents a single issue, which the Assessor accurately described:

Was the county board's decision unsupported by substantial evidence when it determined that the Taxpayers satisfied the fourth requirement for attaining agricultural land status under Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(IV)?


         [¶3] Taxpayers separately own four parcels of land, each around 160 acres in size, in Washakie County, Wyoming.[1] In March 2014, the Assessor issued notices of assessment for Taxpayers' properties. As had been done since Taxpayers purchased their properties, the assessments classified the Glunz, Matuschka, and Mueller parcels as "residential vacant" and the Chicago Properties parcel as "residential". Taxpayers appealed their respective assessments to the county board, arguing each property should be classified as agricultural land. Along with their notices of appeal, Taxpayers submitted signed affidavits to verify their properties met the four statutory requirements for classification as agricultural land.[2] See Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(I)-(IV) (Lexis Nexis 2013). In response, the Assessor wrote to Taxpayers requesting financial records to support the affidavits and allow the Assessor to review the reclassification requests prior to the county board's hearing.[3] Taxpayers did not respond to the request and, instead, waited to provide documentation in their prehearing disclosures. Consequently, the Assessor did not reclassify the properties and the parties proceeded to hearing.

         [¶4] Taxpayers called two witnesses at the hearing. First, Mr. Bryan O'Donnell testified that he leased and grazed cattle on Chicago Properties' parcel. Mr. O'Donnell's lease was new, however, and did not take effect until after the notice of assessment. Taxpayers next called Mr. Mike Reilly, the president of the board of directors of the Otter Creek Grazing Association (Otter Creek). Otter Creek leased the four parcels for grazing prior to and through the assessment period.[4] The leases required Otter Creek to pay $8 per acre per year and to maintain fencing (a total of $1, 280 per year for each 160-acre parcel). Mr. Reilly testified, however, that Otter Creek paid $14 per acre per year, and in turn Taxpayers paid Otter Creek around $6 per acre for fence maintenance. He emphasized that Otter Creek paid Taxpayers by the acre, not by AUM.[5]

         [¶5] Regarding Otter Creek's revenue and activities, Mr. Reilly testified that the association generated more than $1, 000 in annual revenue from selling bulls and from selling forage to its members and to non-members. He stated that Otter Creek generally earned more than $1, 000 in annual revenue from each of Taxpayers' properties, but he did not provide any details supporting this statement. Mr. Reilly stated the association used "common sense" in determining the number of cattle to graze on Taxpayers' properties and did not overuse the properties each year so it could graze the properties again the following year. He testified that Taxpayers' properties were "well utilized" and Otter Creek generally used each property to the extent of its productive capacity. Mr. Reilly did not provide any details about Otter Creek's specific use of each property.

         [¶6] The Assessor also testified at the county board's hearing, stating that once Taxpayers provided her with their grazing leases, she considered whether Taxpayers' properties qualified as agricultural land by relying on a method applied in the state board decision, In re Richard & Glenda Hlavnicka from a Valuation Decision of the Fremont County Assessor 2005 Property Valuation, Docket No. 2006-87, 2006 WL 3327972 (Wyo. Bd. of Equalization Sept. 7, 2006). Based on her understanding of that case, the Assessor evaluated Taxpayers' properties through a hypothetical calculation by supposing the lands were agricultural, applying the required agricultural valuation procedures under the Department of Revenue's (Department) rules and 2014 Agricultural Land Valuation Study, and then comparing the results of those calculations to Taxpayers' grazing lease revenue. She offered into evidence the worksheets she prepared for each property and testified that, in each case, Taxpayers' revenues were far below the properties' expected production values under the Department's study.[6] She testified that she had applied the same method when considering similar requests to reclassify properties as agricultural land.

         [¶7] Taxpayers challenged the Assessor's calculations and proposed their own, slightly different, comparison in a demonstrative exhibit. Taxpayers did not enter that exhibit into evidence or present a witness to testify about Taxpayers' method and calculations. Instead, Taxpayers' attorney used the demonstrative exhibit in his arguments to the board and when cross-examining the Assessor. In response to the questioning, the Assessor asserted the calculations in the exhibit were incorrect.

         [¶8] Following the hearing, the county board reversed the Assessor's valuations, concluding Taxpayers had demonstrated, by a preponderance of the evidence, that their properties met the four requirements under Wyo. Stat. Ann. § 39-13-103(b)(x)(B) to be taxed as agricultural land. The Assessor timely appealed to the state board. The state board affirmed the county board's conclusions on the first three statutory requirements, but it reversed the county board's order due to a lack of substantial evidence to support the county board's determination that Taxpayers met their burden on the ...

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