                             STATE OF WEST VIRGINIA

                           SUPREME COURT OF APPEALS


Lee Trace, LLC,
                                                                                     FILED
Petitioner Below, Petitioner                                                   November 20, 2015
                                                                                RORY L. PERRY II, CLERK
                                                                              SUPREME COURT OF APPEALS
vs) No. 14-0962 (Berkeley County 11-AA-2 and 14-AA-1)                             OF WEST VIRGINIA



Larry Hess, as Assessor for Berkeley County, West Virginia,

Berkeley County Council as Board of Review and Equalization,

And Berkeley County Council,

Respondents Below, Respondents



                               MEMORANDUM DECISION
       Petitioner Lee Trace, LLC, by counsel Thomas Moore Lawson and Kristopher R.
McClennan, appeals the final order of the Circuit Court of Berkeley County (Business Court
Division) entered on August 29, 2014, denying the petition for appeal from a decision of the
Berkeley County Board of Review and Equalization. Respondent Assessor appears by counsel
Michael D. Thompson. Respondents Berkeley County Council and Berkeley County Council as
the Board of Review and Equalization appear 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 standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the order of the circuit court is appropriate under
Rule 21 of the Rules of Appellate Procedure.

        In this case, we are revisited by issues connected with the 2010 real estate assessment
(“the 2010 assessment”) first encountered by the Court in Lee Trace LLC v. Raynes, 232 W.Va.
183, 751 S.E.2d 703 (2013). We will not herein repeat the history related in that opinion; the
principal point from Lee Trace LLC relevant to this appeal is that petitioner did not receive
statutorily or constitutionally sufficient notice of its right to appeal its 2010 assessment,
necessitating remand to the Circuit Court of Berkeley County “for further proceedings consistent
with [our] Opinion.” On remand, the circuit court ordered that the petitioner’s appeal of the 2010
assessment be heard by the following session of the county commission sitting as the board of
review and equalization.

        Petitioner filed a petition for writ of prohibition with this Court, seeking to preclude the
circuit court’s remand order on the ground that failure to provide sufficient notice of the
assessment and appeal rights prior to the 2010 board’s adjournment sine die rendered the
assessment void for jurisdictional defect. This Court refused the petition. Thereafter, the Board
of Review and Equalization conducted a hearing on February 5, 2014. At the conclusion of that

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hearing, the 2014 Board of Equalization and Review affirmed the 2010 assessment in the amount
of $7,895,530, representing sixty percent of the county assessor’s determination of the true value
of petitioner’s apartment complex. Petitioner appealed the decision of the Board of Equalization
and Review to the circuit court, which consolidated that appeal with petitioner’s other pending
tax assessment appeals related to the same property, and transferred the resulting matter to the
business court division. The business court division entered an order related only to the 2010
assessment on August 29, 2014, affirming the ruling of the Board of Review and Equalization.
This appeal followed.

        On appeal, petitioner asserts seven assignments of error. It argues that the business court
division erred in: (1) not voiding the 2010 property tax assessment inasmuch as this Court found
that petitioner’s due process rights had been violated; (2) affirming respondents’ “correction” of
the 2010 assessment; (3) finding that the assessor considered the required depreciation factors in
the 2010 assessment; (4) excusing the assessor’s failure to consider income information in the
2010 assessment; (5) making factual findings that were contrary to undisputed evidence in the
certified record; (6) applying “an effectively irrebuttable presumption of correctness and a
practically impossible burden of proof;” and (7) finding that the assessor equalized the 2010
assessment though the assessor “admitted it had not been equalized and [petitioner] was forced to
pay 18% of its gross income in real property taxes compared to owners of similar properties who
paid at most 7%.” As we explained in Lee Trace LLC v. Raynes,

       “‘This Court reviews the circuit court’s final order and ultimate disposition under
       an abuse of discretion standard. We review challenges to findings of fact under a
       clearly erroneous standard; conclusions of law are reviewed de novo.’ Syllabus
       point 4, Burgess v. Porterfield, 196 W.Va. 178, 469 S.E.2d 114 (1996).” Syllabus
       Point 1, Foster Found., 223 W.Va. 14, 672 S.E.2d 150 (2008). This Court has
       repeatedly recognized that

               “‘[a]n 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.’ Syllabus Point 1,
               West Penn Power Co. v. Board of Review and Equalization, 112
               W.Va. 442, 164 S.E. 862 (1932) (other internal citations omitted).”
               “Syllabus Point 3, In re: Tax Assessment of Foster Foundation’s
               Woodlands Retirement Community, 223 W.Va. 14, 672 S.E.2d 150
               (2008).”

       Syllabus Point 2, Mountain America LLC v. Huffman, 224 W.Va. 669, 687 S.E.2d
       768 [(2009)].

In light of the principles explained above, we proceed to consider petitioner’s several
assignments of error.

       We begin with petitioner’s first assignment of error, wherein it argues that the business
court division erred by not voiding the 2010 assessment for jurisdictional defect based on this
Court’s finding that petitioner’s due process rights were violated because it received insufficient

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notice of its right to appeal the 2010 assessment. As the business court division explained, “[t]he
proper remedy for reversible due process procedural defects in the administrative proceedings is
to remand the case to the appropriate tribunal with directions to order the administrative
institution to remedy the defect.” Syl. Pt. 3, White v. Barill, 210 W.Va. 320, 321, 557 S.E.2d 374,
375 (2001). This is precisely the remedy effected by the circuit court in remanding the matter to
the session of the Board of Review and Equalization following the entry of the circuit court’s
remand order. We thus find no error.

        In petitioner’s second assignment of error, it argues that the “correction” of the 2010
assessment was unlawful, and the business court division therefore erred in affirming it. The crux
of petitioner’s argument in this regard is that it was denied equal protection of the law because its
2010 assessment was considered by the 2014 Board of Equalization of Review, though other
property tax owners had their challenges to their own 2010 assessments considered by the 2010
Board of Equalization and Review, which had ceased to exist by the time petitioner’s challenge
was considered. The 2014 Board of Equalization and Review, petitioner argues, had no
jurisdiction with regard to the 2010 assessment. We disagree for the reasons that we reject
petitioner’s first assignment of error, as set forth above. Furthermore, we agree with Respondent
Assessor that article 10, section 1 of the West Virginia Constitution commands that “taxation
shall be equal and uniform throughout the state, and all property, both real and personal, shall be
taxed in proportion to its value to be ascertained as directed by law.” (Emphasis supplied.) Under
the circumstances presented herein, the voiding of the tax assessment would be contrary to law.

        We turn now to petitioner’s third assignment of error, in which it argues that the circuit
court erred in finding that the assessor adequately referred to the requisite depreciation factors
when completing the 2010 assessment. In utilizing the cost approach to assessments, as the
assessor did here, one must “consider” three types of depreciation: physical deterioration,
functional obsolescence, and economic obsolescence. See W.Va. C.S.R. § 110–1P–2.2.1.1.
Interpreting this rule, we have clarified that it “does not require . . . any adjustment to the
valuations made regarding property because of physical deterioration, functional obsolescence
and economic obsolescence. . . . Rather, all that is required . . . in applying the cost approach
valuation is that [one] will think about or contemplate [the] three types of depreciation. . . .”
Century Aluminum of W.Va., Inc. v. Jackson Cty. Comm’n, 229 W. Va. 215, 224-25, 728 S.E.2d
99, 108-09 (2012). As the circuit court noted, the deputy assessor who testified before the Board
of Review and Equalization explained that the computer-assisted mass appraisal system includes
fields to account for the requisite manners of depreciation. The business court division correctly
found that the system fields “are not direct evidence of the consideration of [the] three forms of
depreciation, [but] in conjunction with the presumption of correctness[1], the evidence before the
[Board of Review and Equalization] is sufficient to sustain the assessment on this issue.”
(Footnote added.) There is no clear and convincing evidence that the assessor failed to consider

       1
          “‘As 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.’” Syl. Pt. 2,
in part, W. Pocahontas Props., Ltd. v. Cnty. Comm’n of Wetzel Cty., 189 W.Va. 322, 431 S.E.2d
661 (1993).” Syl. Pt. 2, Century Aluminum of W.Va., Inc, 229 W.Va. at 216, 728 S.E.2d at 100.


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physical depreciation or functional or economic obsolescence, and we find no error in this
regard.

        Petitioner further argues, in its fourth assignment of error, that the circuit court erred in
“excusing the assessor’s failure to consider income information.” We have explained that “[t]he
selection and application of the cost, income or market data approach, as appropriate in the
valuation of commercial property, are within the discretion of the assessor.” Pope
Props./Charleston Liab. Co. v. Robinson, 230 W.Va. 382, 387, 738 S.E.2d 546, 551 (2013)
citing Stone Brooke Ltd. P’ship v. Sisinni, 224 W.Va. 691, 701, 688 S.E.2d 300, 310 (2009). In
that regard, we recently held that

       “Title 110, series 1P of the West Virginia Code of State Rules confers . . . .
       discretion in choosing and applying the most accurate method of appraising
       commercial and industrial properties. The exercise of such discretion will not be
       disturbed upon judicial review absent a showing of abuse of discretion.” Syl. pt.
       5, In re: Tax Assessment Against American Bituminous Power Partners, 208
       W.Va. 250, 539 S.E.2d 757 (2000).

Syl. Pt. 5, Pope Props., 230 W. Va. at 382, 738 S.E.2d at 547. On this matter, we agree with the
business court division that the use of the income method of appraisal was not required, and the
assessor exercised the appropriate discretion in utilizing the cost approach, particularly because
there was no comparable sale of property in Berkeley County during the relevant period that the
assessor could have used to develop the capitalization rate necessary for that approach.2

       Petitioner’s fifth assignment of error charges that the circuit court made factual findings
contradicting the evidence on the record. First, it argues that the business court division

       2
           As we plainly explained when this matter was first before us:

               Here, the circuit court properly concluded that an 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 did not
       deliver all of its 2010 expense and income information to the Board until mid-
       February of 2011. Additionally, the data was not available for the Assessor to
       develop a “cap rate” used in the calculation due to the lack of any comparable
       sales in Berkeley County for the period in question. Thus, the Assessor’s choice
       was limited. See also Bayer MaterialScience, LLC v. State Tax Comm’r, 223
       W.Va. 38, 54, 672 S.E.2d 174, 190 (2008) (rejecting taxpayers’ request to apply
       particular appraisal method where taxpayers had not provided data necessary to
       apply that appraisal method because taxpayers’ corporate financial structure did
       not produce that type of data). Accordingly, we find that the circuit court did not
       commit error in ruling that the Assessor’s choice of the cost approach was within
       her discretion under the plain language of the legislative rules and the authority of
       this Court.

Lee Trace, LLC, 232 W. Va. at 193, 751 S.E.2d at 713.
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erroneously found that the assessor considered the requisite depreciation factors. As explained
above, we disagree. Second, petitioner argues that the business court division erroneously found
that income data it provided was not reliable or relevant. However, the business court division
clarified that petitioner did not even begin receiving rental income until late in 2008, and that
petitioner’s expert witness “advocates considering what rent the property could produce if fully
occupied. Yet, the [r]ule requires rent that has been produced in the next preceding three years.”
We agree that the subject data was not reliable and, as explained above, the assessor was not
required to consider it. Third, petitioner argues that the business court division erroneously found
that it failed to present evidence of comparable sales. Any evidence produced by petitioner’s
expert witness and purporting to show a comparable sale involved a sale that originated outside
of West Virginia. Petitioner’s argument on this point is made in a single sentence, and it offers
no authority requiring an assessor to look outside state borders to obtain evidence of comparable
sales. We agree with respondents that “[i]n determining appraised value, primary consideration
shall be given to the trends of price paid for like or similar property in the area or locality in
which the property is situated.” W.Va. C.S.R. § 110-1P-3.1.1 (emphasis supplied). Fourth,
petitioner argues that the business court division erroneously found that the appraisal submitted
by its expert witness was incorrectly dated. We agree with the business court division on this
point, as well, inasmuch as the appraisal report clearly states the date “July 1, 2010,” on its face.
We note, however, that the business court simply adjusted the weight of the evidence, noting that
“it appear[ed] possible that in certain ways [the expert witness] may have relied upon 2010 data,
in error.” Accordingly, we find no error in the business court division’s findings of fact.

        We turn to petitioner’s sixth assignment of error, wherein it argues that the circuit court
erred by applying “an effectively irrebuttable presumption of correctness and a practically
impossible burden of proof” on the matter of the assessor’s consideration of the depreciation
factors. Petitioner’s argument on this matter includes no supporting legal citation. Having
thoroughly reviewed the order of the business court division and the standards under which the
business court division conducted its review, as further described above, we find no error in this
regard.

        Finally, we consider petitioner’s seventh assignment of error, in which it argues that the
circuit court erred “in finding that the assessor equalized the 2010 assessment when the assessor
admitted it had not been equalized,” causing petitioner to pay a significantly higher percentage of
its gross income in property taxes than other similarly-situated Berkeley County taxpayers. As all
respondents noted, violation of the Equal Protection Clause of the Fourteenth Amendment to the
United States Constitution requires “[i]ntentional, systematic undervaluation by state officials of
other taxable property in the same class[,]” and occasional errors of law or mistake in judgment
are not alone sufficient to implicate the clause. Allegheny Pittsburgh Coal Co. v. Cty. Comm’n of
Webster Cty., W.Va., 488 U.S. 336, 343 (1989). Furthermore, this Court has announced that
“‘The Equal and uniform clause of Section 1 of Article X of the West Virginia Constitution,
requires a taxpayer whose property is assessed at true and actual value to show more than the
fact that other property is valued at less than true and actual value. To obtain relief, he must
prove that the under valuation was intentional and systematic.’ Syllabus Point 1, Kline v.
McCloud, 174 W.Va. 369, 326 S.E.2d 715 (1984).” Syl. Pt. 11, Mountain Am., LLC v. Huffman,




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224 W. Va. 669, 687 S.E.2d 768, 772 (2009)(emphasis supplied).3 There is no evidence of
intentional and systematic under valuation of other properties in the record on appeal.

       For the foregoing reasons, we affirm.

                                                                                         Affirmed.

ISSUED: November 20, 2015

CONCURRED IN BY:

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




       3
         Petitioner argues that Kline and Mountain America do not apply in this context because
its property was assessed at more than its true and actual value. We find that this distinction does
not affect the application of standard announced in those cases to the matter now before us.
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