                            STATE OF WEST VIRGINIA

                          SUPREME COURT OF APPEALS



BRG Associates, LLC,                                                             FILED
Petitioner Below, Petitioner                                                February 17, 2017
                                                                               RORY L. PERRY II, CLERK
vs) No. 16-0338 (Berkeley County 15-AA-8)                                    SUPREME COURT OF APPEALS
                                                                                 OF WEST VIRGINIA

Larry Hess, Assessor of
Berkeley County, West Virginia,
Respondent Below, Respondent


                               MEMORANDUM DECISION
        Petitioner BRG Associates, LLC, by counsel Floyd M. Sayre, III, appeals the order of the
Circuit Court of Berkeley County, entered March 3, 2016, that denied petitioner’s appeal of the
ad valorem property taxes assessed against its commercial rental properties. Respondent Larry
Hess, the Assessor of Berkeley County, filed a response and a supplemental appendix in support
of the circuit court’s order by counsel Norwood Bentley III.

        This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the relevant standards of review, the parties’ briefs in
both appeals, and the record on appeal, the Court finds that a memorandum decision under Rule
21 of the Rules of Appellate Procedure is appropriate.

       In March of 2012, petitioner purchased two office buildings (the “subject properties”)
located at 300 Foxcroft Avenue and 400 Foxcroft Avenue in Martinsburg, West Virginia. A
January 17, 2012, appraisal (the “2012 appraisal”) valued the properties together at $4,035,000.
The appraisal was based on the income approach to valuation and the following five
“comparable” sales:

       (1) Sale in Hagerstown, Maryland on June 2, 2011; (2) Sale in Frederick,
       Maryland, on February 1, 2011; (3) Sale in Martinsburg, Berkeley County, West
       Virginia, on February 24, 2009; (4) Sale in Baker Heights area of Berkeley
       County, West Virginia, on November 29, 2007; and [] (5) Sale on Edwin Miller,
       Blvd., in Martinsburg, Berkeley County, West Virginia, on October 10, 2007.

        In the 2012 appraisal, the appraiser opined as follows:

       [T]here have been only a limited number of modern office facilities sold in the
       greater Martinsburg area over the past few years. However, this moderate activity
       is not due to a lack of demand, but to a lack of properties being offered for sale.


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       It is important to note that this is a relatively rural marketplace where definitive
       comparable data is often limited requiring date or distant data and substantial
       judgement [sic] in some cases.

        Three years after the sale of the subject properties, respondent valued them for Tax Year
2015 using the cost method of valuation. Respondent valued 300 Foxcroft at $3,145,800; and
400 Foxcroft at $2,516,400. The total appraised value of the two properties was $5,662,200,
which is $1,627,000 more than the $4,035,000 value provided in the 2012 appraisal. Petitioner
petitioned the Berkeley County Commission, sitting as the Board of Equalization and Review
(the “BER”), for a review of the assessments.

        At a February 17, 2015, hearing before the BER, petitioner argued that the subject
properties should have been appraised using the income approach, instead of the cost approach
employed by respondent. Petitioner further argued that respondent should have used the
information in the 2012 appraisal along with published capitalization rates, such as those found
on RealtyRates.com and pwc.com, to determine the value of the properties. Petitioner averred
that if respondent had employed the income approach, the value of 300 Foxcroft would have
been $2,016,000, as opposed to respondent’s $3,145,800 valuation, and the value of 400
Foxcroft would have been $1,497,400, as opposed to respondent’s $2,516,400 valuation.

       On February 26, 2015, the BER upheld respondent’s valuation of the subject properties
on the ground that respondent’s use of the cost approach was appropriate because the use of the
income or market approach was “not supported by the evidence.”

        Petitioner appealed the BER’s order to the circuit court. Following a December 16, 2015,
hearing on the matter, the circuit court, by order entered March 3, 2016, denied petitioner’s
appeal on the ground that it failed to present clear and convincing evidence that respondent’s
valuation of the subject properties was erroneous.

       Petitioner now appeals the circuit court’s order. We review such appeals under the
following standards:

              “‘“‘An assessment made by a board of review and equalization and
       approved by the circuit court will not be reversed when supported by substantial
       evidence unless plainly wrong.’ Syl. pt. 1, West Penn Power Co. v. Board of
       Review and Equalization [of Brooke County], 112 W.Va. 442, 164 S.E. 862
       (1932).” Syl. pt. 3, Western Pocahontas Properties, Ltd. v. County Comm’n of
       Wetzel County, 189 W.Va. 322, 431 S.E.2d 661 (1993).' Syl. pt. 4, In re Petition
       of Maple Meadow Mining Co. for Relief from Real Property Assessment For the
       Tax Year 1992, 191 W.Va. 519, 446 S.E.2d 912 (1994).” Syllabus point 3, In re
       Tax Assessment of Foster Foundation’s Woodlands Retirement Community, 223
       W.Va. 14, 672 S.E.2d 150 (2008).

Syl. Pt. 1, Stone Brooke Ltd. P’ship v. Sisinni, 224 W.Va. 691, 688 S.E.2d 300 (2009). We have
also said,



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        “[a]s a general rule, there is a presumption that valuations for taxation purposes
       fixed by an assessor are correct. . . . The burden is on the taxpayer challenging the
       assessment to demonstrate by clear and convincing evidence that the tax
       assessment is erroneous.” Syllabus point 2, in part, Western Pocahontas
       Properties, Ltd. v. County Commission of Wetzel County, 189 W.Va. 322, 431
       S.E.2d 661 [1993].

Id. at 693, 688 S.E.2d at 302, Syl. Pt. 5.

        Petitioner’s sole assignment of error on appeal is that the circuit court erred in affirming
the BER’s decision because that decision violated the equal and uniform taxation mandate of the
West Virginia Constitution and the Equal Protection Clause of the United States Constitution.
Specifically, petitioner argues that respondent failed to meaningfully consider each of the three
methods of valuation in violation of W.Va. Code R. § 110-1P-3.2.1. That regulation provides
that “[i]n determining an estimate of fair market value, the Tax Commission shall consider and
use where applicable, three (3) generally accepted approaches to value: (A) cost, (B) income, and
(C) market.” Petitioner argues that it is well established that the best measure of a commercial
rental property’s value is the income method.1 Petitioner therefore concludes that respondent’s
use of the cost approach to value the subject properties was an error of law.

       With regard to the appraisal of real property for tax purposes, we have said,

              [T]here are three general approaches to establishing the fair market value
       of real estate. These three techniques in the hands of an expert appraiser are
       designed to provide some estimation of the fair market value of real estate:

               1. In the cost approach, value is estimated as the current cost of
               reproducing or replacing the improvements . . . minus the loss in
               value from depreciation, plus land value.

               2. In the sales comparison [or market] approach, value is indicated
               by recent sales of comparable properties in the market.

               3. In the income capitalization approach, value is indicated by a
               property’s earning power, based on the capitalization of income.

       The cost approach to valuation generally consists of the calculation of a
       depreciated replacement cost for improvements on the land, plus the value of the
       land, as evidence of market value. The comparable sales or “market” approach
       involves, “essentially, an evaluation of similar pieces of property in the general
       area and the prices paid for each.” And the income approach is typically used
       where the condemned real estate itself generates future income “which can be
       capitalized to give some fair indication of what an investor would pay for the
       privilege of receiving that income over some foreseeable period of time.”
       1
        Petitioner supports this claim by citing to cases from Minnesota, New Jersey, and
Pennsylvania.
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W.Va. Dep’t of Transp., Div. of Highways v. W. Pocahontas Props., L.P., 236 W.Va. 50, 66, 777
S.E.2d 619, 635 (2015) (emphasis in original).

        At the February 17, 2015, hearing before the BER, John Streett, an employee in
respondent’s office, testified that respondent considered all three statutory approaches to the
valuation of the subject properties (cost, income, and market), but was forced to use the cost
approach because respondent had insufficient information to use the income or market approach.

        With regard to the market approach, Mr. Streett testified there was only one similar
property for sale during the relevant timeframe and that a single sale was insufficient to establish
the market. With regard to the income approach, Mr. Streett testified that respondent had
insufficient information with which to develop the capitalization rate necessary to calculate the
income value of the subject properties. By way of explanation, Mr. Streett cited to W.Va. Code
R. § 110-1P-3.2.1.2. which provides that,

       [a] property’s present worth is directly related to its ability to produce an income
       over the life of the property. The selection of an overall capitalization rate shall be
       derived from current market data by dividing the annual net income by the
       current selling price of comparable properties. The present fair market value of
       the property shall then be determined by dividing the annual economic rent by the
       capitalization rate.

(Emphasis added.) Mr. Streett testified that, pursuant to W.Va. Code R. § 110-1P-3.2.1.2.,
respondent could not use the market information from the 2012 appraisal to derive a
capitalization rate because it listed sales between 2007 and 2011 which were “far out of our time
frame” and, consequently, not “current market data.” Mr. Streett further testified that the sales in
the 2012 appraisal were also physically “far out of our jurisdiction” and that there was no way to
know how the capitalization rates used in the 2012 appraisal were derived.

        “When possible, the Tax Commissioner should use the most accurate form of appraisal,
but because of the difficulty in obtaining necessary data from the taxpayer, or due to the lack of
comparable commercial or industrial properties, the choice between alternative appraisal
methods may be limited.” W.Va. Code R. § 110-1P-3.2.2.a. Moreover, “[a]n assessor need not
perform a useless act of considering an appraisal method where the assessor does not have
sufficient data to perform that appraisal method.” Lee Trace, LLC v. Raynes, 232 W.Va. 183,
193, 751 S.E.2d 703, 713 (2013).

        At the February 17, 2015, hearing before the BER, Mr. Streett provided substantial
evidence on the record explaining respondent’s reasons for employing the cost method of
valuation and rejecting the income or market methods. In light of that testimony, both the BER
and the circuit court found that the substantial evidence in the record showed that respondent’s
valuations of the subject properties using the cost method were not plainly wrong. We concur
with that conclusion and find that petitioner failed to meet his substantial burden below of
showing error with regard to the method by which respondent evaluated the subject properties.



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       As for petitioner’s overarching claim—that in denying petitioner’s appeal of the BER’s
decision, the circuit court violated the equal and uniform taxation mandate of the West Virginia
Constitution and the Equal Protection Clause of the United States—we find that petitioner
wholly fails to address that issue, in any fashion, in his brief to this Court. We have oft said,

       “‘[a] skeletal “argument,” really nothing more than an assertion, does not preserve
       a claim. . . . Judges are not like pigs, hunting for truffles buried in briefs.’”
       (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991)). Furthermore,
       this Court has adhered to the rule that “[a]lthough we liberally construe briefs in
       determining issues presented for review, issues. . . . mentioned only in passing but
       are not supported with pertinent authority, are not considered on appeal.” State v.
       LaRock, 196 W.Va. 294, 302, 470 S.E.2d 613, 621 (1996).

State v. Kaufman, 227 W.Va. 537, 555 n. 39, 711 S.E.2d 607, 625 n. 39 (2011).
Therefore, we will not consider this issue further.

       Accordingly, we affirm the circuit court’s March 3, 2016, order.

                                                                                   Affirmed.

ISSUED: February 17, 2017

CONCURRED IN BY:

Chief Justice Allen H. Loughry II
Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Elizabeth D. Walker




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