ANSWER BRIEF OF BOARD OF ASSESSMENT APPEALS

Transcription

1 COURT OF APPEALS STATE OF COLORADO 2 E. 14th Avenue Denver, CO Board of Assessment Appeals Docket Number: P eti tioner-appellan t: WILLIAM L. COYLE, DATE FILED: January 3, :09 AM FILING ID: C9F908F4B6FBF CASE NUMBER: 2013CA907 COURT USE ONLY Case No.: 13CA907 v. Respondent-Appellee: DOUGLAS COUNTY BOARD OF EQUALIZATION; DOUGLAS COUNTY ASSESSOR'S OFFICE; TERI COX, as Douglas County Assessor, and VIRIGINA WOOD, as an employee of said Assessor's Office, Appellee: BOARD OF ASSESSMENT APPEALS. JOHN W. SUTHERS, Attorney General JENNY CAMPOS*, Assistant Attorney General Ralph L. Carr Colorado Judicial Center 1300 Broadway, 6th Floor Denver, Colorado jenny.campos@state.co. us Registration Number: *Counsel of Record ANSWER BRIEF OF BOARD OF ASSESSMENT APPEALS

2 CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with all requirements of C.A.R. 28 and C.A.R. 32, including all formatting requirements set forth in these rules. Specifically, the undersigned certifies that: The brief complies with C.A.R. 28(g). It contains 5653 words. The brief complies with C.A.R. 28(k). For the party responding to the issue: It contains, under a separate heading, a statement of whether such party agrees with the opponent's statements concerning the standard of review and preservation for appeal, and if not, why not. I acknowledge that my brief may be stricken if it fails to comply with any of the requirements of C.A.R. 28 and C.A.R. 32. Is I Jenny E. Campos Original signature on fi e a Colorado Attorney Ge e l 1 s Office

3 TABLE OF CONTENTS PAGE STATEMENT OF THE ISSUES STATEMENT OF THE CASE I. NATURE OF THE CASE, COURSE OF PROCEEDINGS, AND DISPOSITION IN THE COURT BELOW II. RELEVANT FACTS SUMMARY OF THE ARGUMENTS... 8 ARGUMENTS... 9 I. THE BAA PROPERLY DENIED COYLE'S CHALLENGE TO THE CLASSIFICATION AND VALUATION OF HIS PROPERTY... 9 A. STANDARD OF REVIEW AND PRESERVATION OF THE ISSUE B. LAW AND ANALYSIS THE BAA PROPERLY UPHELD THE RESIDENTIAL CLASSIFICATION OF COYLE'S PROPERTY THE ISSUE OF WHETHER THE PROPERTY COULD QUALIFY FOR AGRICULTURAL CLASSIFICATION UNDER THE WATER PERMIT SECTION OF (1.6)(a) WAS NOT PRESENTED AND ARGUED AT THE BAA HEARING, OR RULED UPON BY THE BAA. AS SUCH, IT WAS NOT PRESERVED FOR APPELLATE REVIEW AND SHOULD NOT BE CONSIDERED BY THIS COURT... 17

4 TABLE OF CONTENTS PAGE 3. THE BAA PROPERLY DENIED COYLE'S CHALLENGE TO THE ASSESSED VALUE OF HIS PROPERTY II. THE BAA AFFORDED COYLE DUE PROCESS IN THE HEARING BEFORE IT A. STANDARD OF REVIEW AND PRESERVATION OF THE ISSUE B. LAW AND ANALYSIS CONCLUSION ii

5 TABLE OF AUTHORITIES PAGE CASES Board of Assessment Appeals v. E.E. Sonnenberg & Sons, Inc., 797 P.2d 27 (Colo. 1990) Board of Assessment Appeals v. Sampson, 105 P.3d 198 (Colo. 2005)... 10, 19, 20 Burns v. Board of Assessment Appeals, 820 P.2d 1175 (Colo. App. 1991) C.A. Staack v. Board of County Commissioners, 802 P.2d 1191 (Colo. App. 1990) City of Longmont v. Henry-Hobbs, 50 P.3d 906 (Colo. 2002) Colorado & Utah Coal Co. v. Rorex, 149 Colo. 502, 369 P.2d 796 (1962) Colorado Motor Vehicle Dealer Licensing Board v. Northglenn Dodge, 972 P.2d 707 (Colo. App. 1998) Debalco Enterprises, Inc. v. Industrial Claim Appeals Office, 32 P.3d 621 (Colo. App. 2001) Dee Enterprises v. Industrial Claim Appeals Office, 89 P.3d 430 (Colo. App. 2003) Douglas County Board of Equalization v. Clarke, 921 P.2d 717 (Colo. 1996) Electric Power Research Institute, Inc. v. Denver, 737 P.2d 822 (Colo. 1987)... 22, 23, 25 El Paso Board of Equalization v. Craddock, 850 P.2d 702 (Colo. 1993)

6 TABLE OF AUTHORITIES Envirotest System v. Colorado Department of Revenue, PAGE 109 P.3d 142 (Colo. 2005) Farny v. Board of Equalization, 985 P.2d 106 (Colo. App. 1999) Golden Gate Development Co. v. Gilpin County Board of Equalization, 848 P.2d 355 (Colo. 1993) Gyurman v. Weld County Board of Equalization, 851 P.2d 307 (Colo. App. 1993) Hannock v. State, 758 P.2d 1372 (Colo. 1988) Hepp v. Boulder County Assessor, 113 P.3d 1268 (Colo. App. 2005)... 10, 12 Home Depot USA, Inc. v. Pueblo County Board of Commissioners, 50 P.3d 916 (Colo. App. 2002)... 9 McPeck v. Colorado Department of Social Services, 919 P.2d 942 (Colo. App. 1996) Mountain States Tel. & Tel. Co. v. Department of Labor & Employment, 184 Colo. 334, 520 P.2d 586 (1974) OPEX Communications, Inc. v. Property Tax Administrator, 166 P.3d 225 (Colo. App. 2007)....'10, 13 People in Interest of B. G., 91 P.3d 443 (Colo. App. 2004) Resolution Trust Corp. v. Board of County Commissioners, 860 P.2d 1383 (Colo. App. 1993) lv

7 TABLE OF AUTHORITIES PAGE Scott v. City of Englewood, 672 P.2d 225 (Colo. App. 1983)... 27, 29 ShabaZZ v. State Compensation Insurance Authority, 799 P.2d 399 (Colo. App. 1990) Sigma Chi Fraternity v. Regents of University of Colorado, 258 F.Supp. 515 (D. Colo. 1966) South Cherry Venture v. Arapahoe County Board of Equalization, 817 P.2d 583 (Colo. App. 1991)...: Ward v. Industrial Commission, 699 P.2d 960 (Colo. 1985) CONSTITUTION AND STATUTES Colo. Const. art. X, 3(1)(a) Colo. Const. art. X, 20(8)(c) , (4), C.R.S. (2013) (7), C.R.S. (2013) (7), C.R.S. (2013) (1.6)(a), C.R.S. (2013) (1.6)(a)(I), C.R.S. (2013) (1.6)(a)(I)(A), C.R.S. (2013) (1.6)(a)(IV), C.R.S. (2013)... 17, (3.5), C.R.S. (2013)... 11, (5), C.R.S. (2013) (5)(a), C.R.S. (2013)... 20, (8)(a)(I), C.R.S. (2013) , C.R.S. (2013) v

8 TABLE OF AUTHORITIES PAGE , C_.R.S. (2013)..., , C.R.S. (2013) (1), C.R.S. (2013)...; OTHER AUTHORITIES Assessor's Reference Library Vol. 3: Land Valuation Manual , 13 Assessor's Reference Library Vol. 3: Land Valuation Manual Vl

9 STATEMENT OF THE ISSUES I. Whether the Board of Assessment Appeals properly affirmed the County's classification and valuation of the property for tax purposes. Ill. Whether the Board of Assessment Appeals afforded due process during the hearing before it. STATEMENT OF THE CASE I. Nature of the case, course of proceedings, and disposition in the court below. This appeal challenges the Board of Assessment Appeals' final order, which affirmed the residential classification of the subject property and the assessed value of that property for tax purposes (Electronic Record 13CA0907, Document 18, p. 3). The taxpayer argues that his property should have received agricultural classification, rather than residential classification, and that the assessed value was too high (Opening Brief, pp. 5-7). In July 2010, the Douglas County Assessor ("Assessor") informed the taxpayer, William L. Coyle, that it had reclassified his property from agricultural to residential for ad valorem property tax purposes (R. at Document 15, p. 3). The residential designation would go into effect for the 2011 tax year (R. at Document 19, p. 34). Based on the 1

10 residential classification, the Assessor determined that the market value of the property for the 2011 tax year was $530, (R. at Document 14, p. 30). The subject property is a free-standing, singlefamily residence that sits on roughly 35 acres of land (R. at Document 14, p. 30). The house is occupied by Coyle's daughter (R. at Document 19, p. 63). Arguing that his property was used as a tree farm, and thus entitled to agricultural designation, Coyle appealed both the residential classification and the valuation of the property to the Douglas County Board of Equalization ("BOE") (R. at Document 3). In a November 2, 2011 decision, the BOE affirmed both the classification of the property as residential and the value of the property at $530, (R. at Document 3, p. 4). On November 30, 2011, Coyle appealed to the Board of Assessment Appeals ("BAA") for review of the BOE's decision (R. at Document 3, p. 1; Document 4, p. 1). The BAA held a hearing on March 11, 2013, at which Coyle appeared prose (R. at Document 18, p. 1). Both sides presented witnesses, admitted evidence, and provided argument (R. at Document 19). At the hearing, Coyle requested a value 2

11 of $127, for his property, while the BOE presented a value of $530, based on the residential classification (R. at Document 18, p. 1). Ultimately, the BAA concluded that Coyle "failed to present sufficient probative evidence and testimony to show that the subject property was incorrectly classified and valued for tax year 2011." (R. at Document 18, p. 3). The BAA determined that Coyle "failed to supply evidence in support of ongoing tree farming during the appropriate time period," which may have warranted an agricultural rather than residential classification of the property for tax purposes (R. at Document 18, p. 3). The BAA further concluded that the Assessor "properly applied the appropriate methodology for valuing residential property." (R. at Document 18, p. 3). Therefore, the BAA entered a final order on April5, 2013, denying Coyle's challenge to the residential classification of his property, and denying his request that the BAA reduce the value of the property to $127,500 (R. at Document.18, pp. 3-4). Coyle now appeals the BAA's order to this Court. 3

12 II. Relevant facts. The subject property is located at 7800 Crowfoot Valley Road in Parker, Colorado (R. at Document 18, p. 1). The property consists of nearly 35 acres of land and a 1,116 square-foot ranch-style residence, constructed in 1907 (R. at Document 14, p. 30). The house has been remodeled multiple times, most recently in 2001 (R. at Document 14, p. 30). An area of trees planted in rows covers five acres of the southeast portion of the property (R. at Document 18, p. 1). The property sits on the outskirts of Parker, Colorado (R. at Document 14, p. 20). The general neighborhood surrounding it consists of older tract homes, multifamily condos and townhomes, and commercial properties (R. at Document 14, p. 20). The location provides easy access to major highways nearby, as well as the Denver Tech Center, the Park Meadows Mall, and the Castle Rock Outlet Mall (R. at Document 14, p. 20). At the hearing before the BAA, Coyle testified about his use of the property, but offered no expert testimony regarding classification or valuation (R. at Document 19, pp ). 4

13 Coyle stated that in the late 1980s, he cultivated the farm by planting trees, and installing an irrigation system (R. at Document 19, p. 18). He also stated that, since then, he had harvested the property a number of times, and planted new trees in place of those harvested (R. at Document 19, p. 18). During the hearing, Coyle testified that although tree sales had slowed since 2008 because of the economic downturn, he continues to sell trees that.he grows on the property (R. at Document 19, p. 19). Coyle attempted to introduce "additional exhibits" at the beginning of the hearing (R. at Document 19, p. 3). The BOE objected because the late offer would violate its right to notice and an opportunity to review additional evidence before the hearing (R. at Document 19, p. 4). The BAA explained to Coyle that it requires "information to be submitted to the Board and to the [other party] within an allocated number of days before the hearing." (R. at Document 19, p. 4). The BAA did not admit the additional evidence because Coyle did not even attempt to send it to the BOE before the hearing (R. at Document 19, pp. 6-7). Coyle then requested a continuance so that he could provide this evidence to the BOE, which 5

14 the BAA denied because the hearing had already begun (R. at Document 19, pp. 5-6). The BAA admitted all five of Coyle's exhibits that he properly offered in advance of the hearing (R. at Document 19, p. 13). Mter Coyle testified about his use of the property, the BOE called Virginia Wood, a certified licensed appraiser who works for the Assessor, to testify about her classification assessment of the property (R. at Document 19, p. 29). At the time of the hearing, Ms. Wood had been licensed for approximately 17 years (R. at Document 19, p. 30). She testified about her investigation into whether the property should qualify as a tree farm, which included physical inspections, reviewing aerial photos, and discussing the matter with other appraisers in her office (R. at Document 19, p. 30). On May 5, 2010, she inspected the property, and found no evidence of grazing, no evidence of recent digging or spading, and no evidence of recent tree harvesting (R. at Document 19, p. 31). She saw trees growing in rows, some of which were dead (R. at Document 19, p. 31). On July 1, 2010, the Assessor notified Coyle that it would remove his property's agricultural classification for tax purposes (R. at Document 15, p. 32). Later that 6

15 week, Coyle contacted the Assessor's office, and objected to the change (R. at Document 19, p. 31). Mter this conversation, Ms. Wood conducted another agricultural inspection of the property on August 26, 2010, when, again, she found no evidence of farming activity (R. at Document 19, pp ). The Assessor sent a second notice to Coyle on November 11, 2010, informing him that his property no longer qualified for an agricultural designation for the 2011 tax year, and that he would receive a Notice ofvalue no later than May 1, 2011 (R. at Document 15, p. 47). Jerry McLeland, a certified licensed appraiser who also works for the Assessor's office, then testified about his value assessment of the property (R. at Document 19, p. 68). The BAA admitted his summary appraisal report into evidence at the hearing (R. at Document 14). To determine the property tax value of the property, Mr. McLeland analyzed the market for similar properties that had recently sold (R. at Document 14, p. 19). He then quantified the differences between the recent sales and the subject property, and made adjustments to the sales, which helped him arrive at a value for the subject property (R. at Document 14, p. 19). Nine sales were reviewed for comparability to the 7

16 subject and, of those, three sales were analyzed, with a range of adjusted values from a high of $537,779 to a low of $378,734 (R. at Document 14, p. 30). SUMMARY OF THE ARGUMENTS Coyle did not meet his burden of proof that the Assessor's classification and valuation of his property were incorrect. The BAA properly denied Coyle's challenge to the residential classification placed on his land. The property no longer qualified for agricultural classification because it was not being used as a farm at the time of assessment. The BAA also properly denied Coyle's challenge to the assessed value of his home, which was based on the statutorily required market approach to determine the value of residential properties for tax purposes. The market value of the residence was determined by an experienced appraiser's investigation and comparable sales report. The classification and valuation approved by the BAA were based on competent and substantial evidence. Further, the BAA afforded Coyle due process in the hearing before it. Coyle received written notice of the hearing, and the chance to submit documentary evidence and witness lists in advance. At the 8

17 hearing, Coyle testified and cross-examined witnesses. The BAA admitted all of his exhibits which he submitted in advance of the hearing. Coyle was not prejudiced by any of the alleged "procedural irregularities" that he claims occurred at the B~ hearing. Thus, the BAA afforded Coyle a full and fair opportunity to be heard. ARGUMENTS I. The BAA properly denied Coyle's challenge to the classification and valuation of his property. Coyle argues that the BAA erred in affirming the classification of his property as residential. More specifically, he argues that the property qualifies for agricultural classification because he has always used it as a tree farm. Coyle also claims that the BAA erred in upholding the assessed value of his property because the assessment was not based on comparable properties. These arguments fail. A. Standard of review and preservation of the issue. The BAA agrees in part with the standard of review set forth by Coyle (Opening Brief, pp. 2-4). This Court reviews decisions of the BAA according to (7), C.R.S. (2013). Home Depot USA, Inc. v. Pueblo County Bd. of Comm'rs, 50 P.3d 916, 920 (Colo. App. 2002). As such, the evaluation of 9

18 the credibility of witnesses and the weight, probative value, and sufficiency of the evidence is solely within the fact-finding province of the BAA, for purposes of an appeal of a BAA decision. OPEX Communications, Inc. v. Property Tax Administrator, 166 P.3d 225, 229 (Colo. App. 2007). A reviewing court may not set aside a decision of the BAA unless there is no supporting competent evidence. Golden Gate Dev. Co. v. Gilpin County Bd. of Equaliz., 848 P.2d 355, 360 (Colo. 1993). Issues of law are reviewed de novo. City of Longmont v. Henry Hobbs, 50 P.3d 906, 908 (Colo. 2002). The taxpayer bears the burden of proof to show any qualifying farming uses of land in support of a claim for agricultural classification. Hepp v. Boulder County Assessor, 113 P.3d 1268, 1270 (Colo. App. 2005). The protesting taxpayer also bears the burden to prove that the assessor's valuation is incorrect. Bd. of Assessment Appeals v. Sampson, 105 P.3d 198, 204 (Colo. 2005). The determination of whether the burden of proof has been met is a question of fact to be determined by the BAA based upon all evidence presented. Gyurman v. Weld County Bd. of Equaliz., 851 P.2d 307, 310 (Colo. App. 1993). The issues of the property's value and classification based on agricultural 10

19 use were presented and argued at the BAA hearing, and ruled upon by the BAA (R. at Document 19). As such, they are preserved for appellate rev1ew. B. Law and analysis. 1. The BAA properly upheld the residential classification of Coyle's property. Pursuant to (1.6)(a)(I), C.R.S. (2013), "agricultural land," as relevant here, is defined for property tax purposes as a parcel of land "that was used the previous two years and presently is used as a farm." The statute defines a "farm" as "land which is used to produce agricultural products that originate from the land's productivity for the primary purpose of obtaining a monetary profit." (3.5), C.R.S. (2013). The Assessor's Reference Library ("ARL") states that "tree farms should generally receive agricultural land designation if they plant and grow trees in the soil, cultivate and fertilize the trees, and harvest and sell the trees on a regular basis." 3 Assessor's Land Valuation Manual, The ARL is binding on assessors and is entitled to judicial deference. El Paso Bd. of Equaliz. v. Craddock, 850 P.2d 702, (Colo. 1993). 11

20 The primary factor to be considered in determining the proper classification is the actual use of the property on the relevant assessment date. Farny v. Bd. of Equaliz., 985 P.2d 106, 109 (Colo. App. 1999). The taxpayer's subjective intent regarding the use of his land is not relevant for such purposes. Hepp, 113 P.3d at Whether a party's use of his property constitutes agricultural use is primarily a factual question. Douglas County Bd. of Equaliz. v. Clarke, 921 P.2d 717, 721 fn.6 (Colo. 1996). To determine the proper classification in the present case, the BAA considered, among other evidence, several undated photos, purportedly taken in 2010; an invoice from a fence company dated January 28, 2012; a pasture lease agreement dated December 15, 2011; copies of four checks made payable to various individuals with March and April 2011 dates; an invoice for wire mesh and labor dated March 31, 2011; and two invoices for tree sales, dated March 16, 2010 (R. at Document 18, p. 2). The invoices for tree sales suggest that Coyle sold approximately two dozen trees (R. at Document 9, p. 1). However, tree sales are only one factor of many (including planting, growing, cultivating, fertilizing, harvesting, selling) that an assessor must 12

21 consider in determining whether a property qualifies as a tree farm. See 3 Assessor's Land Valuation Manual, 5.29, above. And, the BAA, as the finder of fact, is not bound to accept as dispositive even the uncontroverted evidence of a single party and may properly consider any reasonable inferences and circumstances tending to weaken or discredit such evidence. OPEX, 166 P.3d at 229. Further, many of these exhibits that Coyle provided were either undated, or irrelevant to the time period in question (R. at Document 19, p. 35). The BAA also considered and weighed Coyle's testimony at the hearing before it (R. at Document 18, pp. 1-2). During the hearing, Coyle testified that harvesting and planting on his property had "experienced a slowdown since the downturn of the economy in 2008" and that "sales dropped" significantly (R. at Document 19, pp. 19, 25). However, he did not provide a specific figure- either in monetary terms or in volume- of trees sold in the year that he received notice of the reclassification of his property (R. at Document 19, p 25). Coyle stated that "I would have to do an audit or... total everything up to give you an exact figure..." (R. at Document 19, p. 25). Coyle also testified that digging up trees is, understandably, seasonal and "not a day-to-day 13

22 activity." (R. at Document 19, pp ). However, he failed to offer any further evidence, such as specific or recent dates that he may have harvested or planted new trees (R. at Document 19, pp ). The BAA seemed to give considerable weight to Coyle's testimony that planting and harvesting of trees had slowed since 2008 (R. at Document 18, p. 2). During the hearing, Coyle expressed hope that improvement in the economy would allow him to get back to planting and harvesting his trees. He stated, "the predictions are that [the economy is] picking up and improving, and we're hopeful that it is, but it would be financially not the wisest thing to do to have replanted trees when there was no demand and we had a huge supply of them already." (R. at Document 19, p. 27). However, an owner's intentions for future use of his land may not be considered in classifying the property as "agricultural land." C.A. Staack v. Bd. of County Comm'rs, 802 P.2d 1191, 1193 (Colo. App. 1990). Ms. Wood testified at the hearing that her "drive-by inspections from 2004 through 2010 showed no activity occurring on the subject property. Physical inspections from 2010 confirmed no evidence of 14

23 agricultural use or changes." (R. at Document 19, p. 46). She also returned to the property to inspect it on January 3, 2011, and saw "no new areas of trees being dug up or planted." (R. at Document 19, p. 46). Her investigation included physical inspections, reviewing aerial photographs, and discussing the property with colleagues who regularly drove by the property (R. at Document 19, p. 30). Ms. Wood's dated photos admitted into evidence by the BAA revealed "no change in the tree pattern which might support [a finding of] maintenance, cultivation and harvesting of trees during that time; instead the pattern of trees was stagnant between 2006 and 2010." (R. at Document 18, p. 2). Evidence of "inputs to the lands, e.g. fertilizer, pesticides or other cultivation activities" may have served as "indicators the land is being used as a farm as defined by (3.5), C.R.S." 3 Assessor's Land Valuation Manual, at However, for the relevant three-year period (2009, 2010, and 2011), Coyle did not provide the Assessor with any receipts for having purchased seedlings to be planted (R. at Document 19, pp ). He did not provide any evidence or documentation of purchasing fertilizer (R. at Document 19, pp ). 15

24 He did not provide any evidence of water inputs (R. at Document 19, pp ). He did not provide any evidence that during this three-year period he planted new trees to replace whatever trees he might"have sold (R. at Document 19, pp ). During the various inspections Ms. Wood conducted, she did not see any evidence of the trees having been cultivated or tended (R. at Document 19, pp ). Despite Coyle's insistence to the contrary, the Assessor concluded, and the BAA agreed, that his "property has not been operated as a tree farm for many years." (R. at Document 18, p. 3). If conflicting evidence is presented in an administrative hearing, the credibility of witnesses and weight to be given their testimony are committed to the fact-finding discretion of the agency. Burns u. Bd. of Assessment Appeals, 820 P.2d 1175, 1177 (Colo. App. 1991). The BAA, in resolving the conflicting evidence of the property's current use, implicitly found Ms. Wood's testimony to be more credible. On this record, Coyle failed to meet his burden to show qualifying farming use of his land in support of a claim for agricultural classification. Because the BAA's nonagricultural classification of 16

25 Coyle's parcel for the 2010 tax year is supported by the evidentiary record, its ruling should not be disturbed on review. 2. The issue of whether the property could qualify for agricultural classification under the water permit of (1.6)(a) was not presented and argued at the BAA hearing, or ruled upon by the BAA. As such, it was not preserved for appellate review and should not be considered by this Court. For the first time, Coyle now argues that his property also qualifies for agricultural classification under the water permit category of (1.6)(a)(IV), C.R.S. (2013) (Opening Brief, p. 12). However, arguments not raised in administrative proceedings are not preserved for appellate review. Debalco Enters., Inc. v. Indus. Claim Appeals Office, 32 P.3d 621, 624 (Colo. App. 2001). This issue was not presented to, or considered by, the BAA. Therefore, it was not properly preserved for review by this Court. Under 39-l-102(1.6)(a)(IV), property may qualify for agricultural classification if the owner of the land has "a final permit to appropriated groundwater" that is not used for residential purposes, but for agricultural production on the land. Coyle argues for the first time to this Court that he "obtained a permit to appropriate groundwater 17

26 through the use of a well to irrigate the trees" on his property (Opening Brief, p 12). While he did mention a well on his property, there was no evidence or discussion of a permit at the BAA hearing (R. at Document 19, pp ). The entire discussion of residential versus agricultural classification had to do with the "use" of the property under (1.6)(a)(I)(A), not with permits for appropriated groundwater under (1.6)(a)(IV). Judicial review of administrative agency action is limited to the record before the agency. Hannock v. State, 758 P.2d 1372, 1376 (Colo. 1988). Because there is no evidence in the record to support agricultural classification based on a "final permit," and because the issue was not properly preserved, this Court should not consider the claim now. 3. The BAA properly denied Coyle's challenge to the assessed value of his property. The Colorado Constitution, article X, section 3(1)(a) requires that valuations for assessment be based on appraisals by assessing officers. See also , C.R.S. (2013). Once the assessor determines the actual value of the property and issues a Notice of Valuation, a taxpayer has the right to protest the assessor's valuation , C.R.S. (2013). If the assessor denies a taxpayer's protest, the taxpayer 18

27 may petition the county BOE , C.R.S. (2013). A taxpayer dissatisfied with a BOE decision denying a petition may appeal the valuation set by the assessor to either the BAA or the district court of the county for a trial de novo (1), C.R.S. (2013). The basic framework for ad valorem taxation of real and personal property depends on a calculation of the "actual value" of the property to be taxed. Sampson, 105 P.3d at 203. "Actual value" is synonymous with market value. Id. Market value has been described as "what a willing buyer would pay a willing seller under normal economic conditions." Id. Section (5) requires an assessor to give appropriate consideration to the cost, market, and income approaches in determining the actual value of the real property (5), C.R.S. (2013). It is well-established that if the nature of the property rules it out, inapplicable approaches to value need not be considered or documented. Resolution Trust Corp. v. Bd. of County Comm 'rs, 860 P.2d 1383, 1386 (Colo. App. 1993). Under the Colorado Constitution and state statute, an assessor must consider only the "market value" approach when valuing residential properties for ad valorem purposes. Colo. Const. art. X, 19

28 20(8)(c); (5)(a), C.R.S. (2013) ("... The actual value of residential real property shall be determined solely by consideration of the market value approach to appraisal."). An assessor's ascertainment of the value of property for taxation is presumed to be correct. Colo. & Utah Coal Co. v. Rorex, 149 Colo. 502, 369 P.2d 796 (1962). A protesting taxpayer must prove that the assessor's valuation is incorrect by a preponderance of the evidence. Sampson, 105 P.3d at 204. In the present case, Mr. McLeland considered only the market approach because he was valuing a residential property. "The subject property's actual use as of the effective date of the appraisal (June 30, 2010) and the property tax assessment date (January 1, 2011) was a single family improved residence." (R. at Document 14, p.18). Use of the market approach requires a representative body of sales sufficient to set a pattern, and appraisals must consider the degree of comparability of sales, including similarities and dissimilarities among properties that are compared for assessment purposes (8)(a)(I), C.R.S. (2013). 20

29 Mr. McLeland concluded that the market value of the subject property as of January 1, 2011 was $530,893 (R. at Document 14, p. 30). The assigned value is supported by the comparable sales analysis performed by Mr. McLeland (R. at Document 14). The comparable sales used by the Assessor are verified sales from the relevant period (R. at Document 14). Mr. McLeland made appropriate adjustments to establish an opinion of market value using commonly recognized appraisal practice procedures and the Assessor's Reference Library guidelines (R. at Document 14). The BAA heard all the evidence presented, weighed that evidence, and was within its purview to decide that the Assessor's valuation was correct. II. The BAA afforded Coyle due process in the hearing before it. Coyle argues that the BAA denied his right to due process during the hearing before it. More specifically, he argues that the BAA's decision to not admit his "additional evidence" and to admit evidence to which he objected violated his constitutional rights. He also claims that the BAA erred when it limited the testimony to a market approach 21

30 rather than an "income approach" to value the property. These arguments fail. A. Standard of review and preservation of the issue. The test as to whether a party is afforded procedural due process is "fundamental fairness" in light of the total circumstances. Sigma Chi Fraternity v. Regents of Univ. of Colo., 258 F. Supp. 515, 528 (D. Colo. 1966). Fundamental fairness embodies adequate notice and an opportunity to be heard. Mountain States Tel. & Tel. Co. v. Dept. of Labor & Emp., 184 Colo. 334, 338, 520 P.2d 586, 588 (1974). This question is properly raised for the first time on appeal. See Dee Enterprises v. Industrial Claim Appeals Office, 89 P.3d 430, 432 (Colo. App. 2003). B. Law and analysis. The essential principles of due process apply to administrative hearings. Electric Power Research Institute, Inc. v. Denver, 737 P.2d 822, 828 (Colo. 1987). However, no particular or specific procedure is mandated by due process considerations so long as the basic elements of opportunity for a hearing and judicial review are present. Id. Moreover, there is no infringement of due process rights unless a party 22

31 has been prejudiced by the procedure to which he objects. Id. Due process is satisfied when a party is provided with notice and the opportunity to be heard. Ward v. Industrial Com., 699 P.2d 960, 968 (Colo. 1985). First, Coyle claims that the BAA violated his due process rights during the hearing when it refused to admit "additional evidence" that Coyle brought with him to the hearing, and when it denied his request for a continuance so that the parties could review that evidence (Opening Brief, pp ). At the beginning of the hearing Coyle explained that he brought additional evidence because he "skimmed through [the BOE's] packet initially, but went through it thoroughly yesterday." (R. at Document 19, p. 5). He also admitted that he did not attempt to send the additional evidence to the BOE any time before the hearing because he "got it together today," that is, the day of the hearing (R. at Document 19, pp. 6-7). Coyle stated that the evidence consisted of "additional pictures and, you know, simple things that I really don't see a problem with." (R. at Document 19, p. 5). The BOE objected because it would not be able to adequately review any additional evidence while the 23

32 hearing was in progress (R. at Document 19, p. 4). The BAA denied Coyle's request for a continuance to submit the additional evidence because he did not make any effort to get the information to the concerned parties before the hearing (R. at Document 19, p. 7). The BAA also explained to Coyle that the Board typically does not grant such continuances once a hearing has already begun (R. at Document 19, p. 6). Section (4) gives authority to the BAA to rule upon offers of proof and receive evidence (4), C.R.S. (2013); ShabaZZ v. State Compensation Ins. Auth., 799 P.2d 399, 405 (Colo. App. 1990) (hearing officer has discretion to determine evidentiary matters); Envirotest Sys. v. Colo. Dep't of Revenue, 109 P.3d 142, 145 (Colo. 2005) (hearing officer has authority to regulate course of the hearing). The BAA was well within its authority to not admit evidence that Coyle compiled the day of the hearing (R. at Document 19, pp. 6-7). Furthermore, Coyle has not alleged any prejudice due to the BAA's decision not to admit additional evidence and not to allow a continuance (Opening Brief, p. 15).. 24

33 Coyle also argued that the BOE provided its evidence to him one day late (R. at Document 19, pp. 4-6). BAA procedures typically require parties to submit information to the BAA and to other parties ten business days before the hearing (R. at Document 7; R. at Document 19, p. 5). At the hearing, the BAA asked Coyle twice if he was harmed by allegedly receiving the BOE's information one day late (R. at Document 19, pp. 4-6). He did not articulate any harm (R. at Document 19, pp. 5-6). Even now on appeal, Coyle has not alleged any prejudice due to receiving the BOE's documents one day late (Opening Brief, p. 15). In the absence of a showing that a delay in administrative adjudication resulted in some prejudice, such as by interfering with a party's capacity to prepare or present its case, delay tantamount to a denial of due process cannot be presumed. Electric Power,.737 P.2d at 828. Additionally, Coyle claims a due process violation based on the BAA's admission of evidence over his relevancy objection at the hearing (Opening Brief, pp ). Coyle produced five of the eight exhibits admitted into evidence (R. at Document 19, p. 13). Then, Coyle objected to the admission of certain evidence that the BOE offered, but those 25

34 objections were overruled, and the evidence was admitted (R. at Document 19, p. 13). Generally, those conducting administrative hearings need not comply strictly with the rules of evidence. Colo. Motor Vehicle Dealer Licensing Bd. v. Northglenn Dodge, 972 P.2d 707, 713 (Colo. App. 1998). The standard to be applied is whether the evidence possesses probative value commonly accepted by reasonable and prudent persons in the conduct of their affairs (7), C.R.S. (2013); McPeck v. Colo. Dep't. of Social Services, 919 P.2d 942, 945 (Colo. App. 1996). Here, the BAA explained that it thought the evidence Coyle objected to could be relevant to determine farming activities (R. at Document 19, p. 13). The record indicates that Coyle was provided these exhibits in advance of the BAA hearing and that, at the hearing, he was afforded a full opportunity to cross-examine witnesses as to the contents of the documents. Implying partiality on the part of the BAA, Coyle suggests that the admission of this evidence is "[a]nother example of the deck being stacked against Coyle" (Opening Brief, p. 15). However, the mere fact that the BAA admitted evidence that Coyle objected to is insufficient to 26

35 raise an implication of partiality on the part of the BAA. See Scott v. City of Englewood, 672 P.2d 225, 227 (Colo. App. 1983) ("there is a presumption of integrity, honesty and impartiality in favor of those serving in quasi-judicial capacities."). Unfavorable rulings are insufficient to establish bias. People in Interest of S. G., 91 P.3d 443, (Colo. App. 2004). Coyle objected to certain evidence as irrelevant and overly prejudicial at the hearing, but on appeal, Coyle has not alleged any prejudice from the admission of the documents. Finally, Coyle claims that the BAA denied his right to due process because it did not allow him to argue an "income approach" to determine the value of the property for tax purposes (R. at Document 19, p 16). At the hearing, Coyle began to testify about rental income from the house for 2011, when tenants and then his daughter lived in the house (R. at Document 19, p. 63). The BAA explained to Coyle that this type of "income approach" is not the correct approach to determine the tax value of residential or agricultural property (R. at Document 19, p. 65). The income approach is a common method for calculating the value of commercial properties, especially apartment buildings, office 27

36 buildings, and shopping centers. Bd. of Assessment Appeals v. E.E. Sonnenberg & Sons, Inc., 797 P.2d 27, fn. 8 (Colo. 1990). By statute, the value of agricultural land is based on the earning or productive capacity of the land over a period of time, capitalized at a rate of 13 percent (5)(a), C.R.S. (2013). And, the actual value ofresidential property is determined solely through the "market approach." Id. Therefore, the nature of the property rules out consideration of the income approach. See So. Cherry Venture v. Arapahoe County Bd. of Equaliz., 817 P.2d 583, 587 (Colo. App. 1991). Coyle did not present any evidence or testimony about the value of the house using the market approach (R. at Document 19, p. 67). He did not testify about the value of the land in terms of the "earning or productive capacity" either. (R. at Document 19, p. 67). Again implying partiality on the part of the BAA, Coyle asserts that "The BAA was predetermined to affirm the reclassification of the Property as residential" because it did not allow testimony on a straight income approach (Opening Brief, p. 16). However, the fact that the BAA did not admit evidence of an irrelevant approach to valuation is insufficient to raise an implication of partiality on the part of the Board. 28

37 See Scott, 672 P.2d at 227. Once again, although Coyle clearly disagrees with the BAA's decisions regarding the admission of evidence, he has not alleged any actual prejudice. In the hearing before the BAA, Coyle received adequate notice of opposing claims, a reasonable opportunity to prepare and meet them in an orderly hearing, and a fair and impartial decision. CONCLUSION For the foregoing reasons and authorities, the BAA respectfully requests that this Court affirm its order. JOHN W. SUTHERS Attorney General Is I Jenny E. Campos Original signature on e Colorado Attorney General's Office JENNY E. CAMPOS, * Assistant Attorney General State Services Section Attorneys for the Board of Assessment Appeals *Counsel of Record 29

38 CERTIFICATE OF SERVICE This is to certify that I have duly served the within ANSWER BRIEF OF BOARD OF ASSESSMENT APPEALS upon all parties herein electronically via ICCES or by depositing copies of same in the United States mail, postage prepaid, at Denver, Colorado, this Srd day of January, 2014, addressed as follows: Margaret R. Pflueger Campbell Killin Brittan and Ray, LLC 270 St. Paul Street, Suite 270 Denver, CO Kelly Dunnaway Meredith P. Van Horn Douglas County Attorney's Office 100 3rd Street Castle Rock, CO Is I Susan Gowan ~-- Original signature on file at the Colorado Attorney General's Office 30