Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
02/16/2018 01:09 AM CST




                                                        - 834 -
                                  Nebraska Supreme Court A dvance Sheets
                                          298 Nebraska R eports
                                        CAIN v. CUSTER CTY. BD. OF EQUAL.
                                                 Cite as 298 Neb. 834




                          Donald V. Cain, Jr., appellant, v. Custer County
                                 Board of Equalization, appellee.
                                                   ___ N.W.2d ___

                                        Filed February 2, 2018.   No. S-17-370.

                1.	 Taxation: Judgments: Appeal and Error. An appellate court reviews
                     Nebraska Tax Equalization and Review Commission decisions for errors
                     appearing on the record.
                2.	 ____: ____: ____. When reviewing a Nebraska Tax Equalization and
                     Review Commission judgment for errors appearing on the record, the
                     inquiry is whether the decision conforms to the law, is supported by com-
                     petent evidence, and is neither arbitrary, capricious, nor unreasonable.
                3.	 Administrative Law. An administrative agency’s decision is arbitrary
                     when it is made in disregard of the facts or circumstances without some
                     basis which would lead a reasonable person to the same conclusion.
                 4.	 ____. Administrative agency action taken in disregard of the agency’s
                     own substantive rules is arbitrary and capricious.
                5.	 Taxation: Appeal and Error. Questions of law arising during appel-
                     late review of Tax Equalization and Review Commission decisions are
                     reviewed de novo.
                6.	 Constitutional Law: Due Process. The determination of whether
                     the procedures afforded to an individual comport with constitutional
                     requirements for procedural due process presents a question of law.
                7.	 Administrative Law: Statutes. The meaning and interpretation of stat-
                     utes and regulations are questions of law.
                8.	 Due Process. Due process principles protect individuals from arbitrary
                     deprivation of life, liberty, or property without due process of law.
                9.	 Administrative Law: Due Process. A party appearing in an adjudica-
                     tion hearing before an agency or tribunal is entitled to due process pro-
                     tections similar to those given to litigants in a judicial proceeding.
               10.	 Due Process: Notice. Due process does not guarantee an individual
                     any particular form of state procedure. Instead, the requirements of due
                                      - 835 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

       process are satisfied if a person has reasonable notice and an oppor-
       tunity to be heard appropriate to the nature of the proceeding and the
       character of the rights which might be affected by it.
11.	   Taxation. An owner is not deprived of his property without due proc­
       ess of law by means of taxation if he has an opportunity to question
       its validity or amount of such tax or assessment in some stage of the
       proceedings, either before that amount is finally determined or in a sub-
       sequent proceeding for its collection.
12.	   Judges: Evidence. Generally, a successor judge may not make a deci-
       sion based on conflicting evidence that a predecessor judge heard.
13.	   Trial: Judges: Due Process: Witnesses. Due process entitles a liti-
       gant to have all the evidence submitted to a single judge who can see
       the witnesses testify and, thus, weigh their testimony and judge their
       credibility.
14.	   Due Process. Oral argument is not an essential element of due process.
15.	   Trial: Judges: Due Process: Waiver. A party has a due process right
       that a successor or substitute judge may not render a judgment for a
       predecessor judge who conducted the trial, but the party may waive this
       right and agree to have a successor judge decide the case.
16.	   Taxation: Valuation: Presumptions: Evidence. A presumption exists
       that a county board of equalization has faithfully performed its official
       duties in making a property tax assessment and has acted upon suffi-
       cient competent evidence to justify its action. The presumption disap-
       pears when competent evidence to the contrary is presented. Once the
       presumption is rebutted, whether the valuation assessed is reasonable
       becomes a question of fact based on all of the evidence.
17.	   Taxation: Valuation: Proof. The burden of showing a property tax
       valuation to be unreasonable rests upon the taxpayer.
18.	   ____: ____: ____. The taxpayer’s burden to show a property tax valu-
       ation to be unreasonable is not met by showing a mere difference of
       opinion. Rather, the taxpayer must establish the valuation placed upon
       the property when compared with valuations placed on other similar
       property is grossly excessive and is a result of arbitrary or unreasonable
       action and not just a mere error in judgment.
19.	   Taxation: Notice: Proof. When the Tax Equalization and Review
       Commission hears a property tax protest under Neb. Rev. Stat.
       § 77-1507.01 (Reissue 2009) and performs the factfinding functions
       that a county board of equalization would have if the county had timely
       provided notice to the taxpayer, the taxpayer’s burden of persuasion is
       by a preponderance of the evidence.
20.	   Evidence: Words and Phrases. Competent evidence is evidence that is
       admissible and tends to establish a fact in issue.
                                   - 836 -
             Nebraska Supreme Court A dvance Sheets
                     298 Nebraska R eports
                   CAIN v. CUSTER CTY. BD. OF EQUAL.
                            Cite as 298 Neb. 834

21.	 Property: Valuation: Witnesses. A resident owner who is familiar with
     his or her property and knows its worth is permitted to testify as to its
     value without further foundation.
22.	 Taxation: Valuation: Evidence. When an independent appraiser
     using professionally approved methods of mass appraisal certifies that
     an appraisal was performed according to professional standards, the
     appraisal is considered competent evidence under Nebraska law.
23.	 Taxation: Valuation. In tax valuation cases, actual value is largely a
     matter of opinion and without a precise yardstick for determination with
     complete accuracy.
24.	 Evidence: Presumptions. A presumption may take the place of evi-
     dence unless and until evidence appears to overcome or rebut it, and
     when evidence sufficient in quality appears to rebut it, the presumption
     disappears and thereafter the determination of the issues depends upon
     the evidence.
25.	 ____: ____. A presumption is not evidence and should never be placed
     in the scale to be weighed as evidence.
26.	 Administrative Law. If an agency rule is but an aid to help the agency
     in its decision, then the rule is not binding upon the agency unless the
     rule confers a procedural benefit upon a party.

  Appeal from the Tax Equalization and Review Commission.
Reversed and remanded with directions.
   David A. Domina, of Domina Law Group, P.C., L.L.O.,
for appellant.
  Steven R. Bowers, Custer County Attorney, and Glenn A.
Clark for appellee.
   Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
   Funke, J.
   Donald V. Cain, Jr., appeals an order of the Tax Equalization
and Review Commission (TERC) affirming the decision of the
Custer County assessor (Assessor) regarding the 2012 taxable
value of his agricultural property. Because we find error on
the record, we reverse the TERC’s order and remand the cause
with directions to sustain Cain’s property valuation protests
for the 2012 tax year.
                                    - 837 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

                        I. BACKGROUND
   Cain owns property in Custer County southwest of Broken
Bow, Nebraska. The subject property encompasses 10 con-
tiguous parcels totaling 1,093.93 acres of agricultural land
exclusively used for cattle production and grazing. The land
consists of rolling hills with Valentine sand and native grass.
About 756 acres of the property is irrigated native grass upon
which Cain grazes cattle. In 2006, Cain improved this portion
of his land with center pivot irrigation systems to enhance
livestock grazing. Cain does not cultivate row crops on the
subject property.
   In 2012, the Assessor increased the total assessed value of
Cain’s property from $734,968 to $1,834,925. This represented
nearly a 250-percent property tax increase from the prior year,
without improvements being made to the property during that
time. This sharp increase was largely due to the Assessor’s
decision to change the classification of irrigated grassland for
purposes of valuation. From 2006 to 2012, the Assessor had
used a Nebraska Department of Revenue formula to adjust
the value of irrigated native grassland. In 2012, the Assessor
reclassified irrigated grassland by uniformly classifying all irri-
gated land as irrigated cropland, whether the land is used for
“cultivated row crops, small grains, seeded hay, forage crops,
or grasses.”1
   Cain protested. Because Cain had not been provided timely
notice of the increased assessments, he was not afforded an
evidentiary hearing for his protests before the Custer County
Board of Equalization. Pursuant to Neb. Rev. Stat. § 77-1507.01
(Reissue 2009), Cain directly petitioned the TERC to deter-
mine the actual value of each parcel. The TERC consolidated
Cain’s protests and afforded him a hearing on his petitions. A
divided panel of two TERC commissioners, Nancy J. Salmon
and Thomas D. Freimuth, affirmed the Assessor’s increased
valuations of Cain’s property for 2012.

 1	
      See 350 Neb. Admin. Code, ch. 14, § 002.21B (2009).
                                     - 838 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

   Following an appeal, in Cain v. Custer Cty. Bd. of Equal.
(Cain I),2 we found plain error and reversed, and remanded.
We found the TERC’s role according to the procedure pro-
vided under § 77-1507.01 was to “‘determine the actual value
or special value of real property for that year.’”3 We found
the TERC’s decision to determine Cain’s protests using the
clear and convincing evidence standard provided under Neb.
Rev. Stat. § 77-5016(9) (Cum. Supp. 2016) was erroneous,
because such standard applied in “‘all appeals’” before the
TERC.4 However, the TERC’s role was not to conduct an
appellate review but to perform an initial review of Cain’s
challenges to the increased assessments. We held the TERC’s
decision erroneously increased the taxpayer’s burden of proof
in a proceeding under § 77-1507.01. We remanded the cause
with instructions for the TERC to reconsider the matter on
the record using the preponderance of the evidence stan-
dard applicable to initial protests before a county board of
equalization.
   Freimuth resigned as a TERC commissioner in September
2015, so upon remand, the matter was assigned to another
commissioner, Robert W. Hotz. Cain moved for a new hearing
on the merits and an opportunity to present supplemental evi-
dence and argue the case under the preponderance of the evi-
dence standard. He also filed a notice of constitutional issues
in which he requested the TERC to vacate the Assessor’s valu-
ations of his property and determine that the statutes he chal-
lenged were unconstitutional. The TERC denied both requests,
determining that it had no authority to do anything other than
follow this court’s instructions on remand.
   Both Hotz and Salmon reviewed the full record and, without
an additional hearing, considered Cain’s protests. The TERC
issued a new order which reversed in part the Assessor’s

 2	
      Cain v. Custer Cty. Bd. of Equal., 291 Neb. 730, 868 N.W.2d 334 (2015).
 3	
      Id. at 745, 868 N.W.2d at 346.
 4	
      Id. at 748, 868 N.W.2d at 347.
                                    - 839 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

determination with respect to three parcels of Cain’s land,
because, due to clerical errors, these parcels had been incor-
rectly assessed as including water wells. For the remaining
seven parcels, the TERC accepted the Assessor’s reasoning and
affirmed the Assessor’s 2012 valuations of Cain’s property.
The TERC’s order stated, “[TERC] finds that the presumptions
in favor of the initial valuations by the . . . Assessor have not
been rebutted by a preponderance of the evidence . . . .”
   Cain timely appeals.
                II. ASSIGNMENTS OF ERROR
   Cain assigns, restated, that the TERC erred by (1) failing to
conduct a hearing following remand which permitted him argu-
ment under the correct standard of review, (2) failing to hear
constitutional claims and decide those issues, (3) rendering a
decision not supported by sufficient evidence, (4) failing to
follow remand instructions, (5) making errors of law; and (6)
violating Cain’s constitutional rights by failing to classify his
property in a uniform and proportionate manner.
                III. STANDARD OF REVIEW
   [1-5] We review decisions of the TERC for error appearing
on the record of the commission.5 When reviewing a TERC
judgment for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable.6 An administrative agency’s decision is arbi-
trary when it is made in disregard of the facts or circum-
stances without some basis which would lead a reasonable
person to the same conclusion.7 Administrative agency action

 5	
      Neb. Rev. Stat. § 77-5019(5) (Cum. Supp. 2016); Burdess v. Washington
      Cty. Bd. of Equal., ante p. 166, 903 N.W.2d 35 (2017).
 6	
      See County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 296 Neb.
      501, 894 N.W.2d 308 (2017).
 7	
      Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802
      (2008).
                                     - 840 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                      CAIN v. CUSTER CTY. BD. OF EQUAL.
                               Cite as 298 Neb. 834

taken in disregard of the agency’s own substantive rules is
also arbitrary and capricious.8 Questions of law arising dur-
ing appellate review of the TERC’s decisions are reviewed
de novo.9
   [6,7] The determination of whether the procedures afforded
to an individual comport with constitutional requirements for
procedural due process presents a question of law.10 The mean-
ing and interpretation of statutes and regulations are questions
of law.11
                       IV. ANALYSIS
   We first address whether Cain’s due process rights were
violated. We then address whether the TERC erred in affirm-
ing the Assessor’s valuation of Cain’s property for the 2012
tax year.
                    1. No Due Process R ight
                        to Oral A rgument
   Cain assigns that the TERC violated his due process rights
by not permitting him to argue how the preponderance of the
evidence standard of proof applied to the adduced evidence.
   [8-11] Due process principles protect individuals from arbi-
trary deprivation of life, liberty, or property without due process
of law.12 A party appearing in an adjudication hearing before
an agency or tribunal is entitled to due process protections
similar to those given to litigants in a judicial proceeding.13

 8	
      Blakely v. Lancaster County, 284 Neb. 659, 825 N.W.2d 149 (2012).
 9	
      Brenner, supra note 7.
10	
      In re Interest of Carmelo G., 296 Neb. 805, 896 N.W.2d 902 (2017); State
      v. McCurry, 296 Neb. 40, 891 N.W.2d 663 (2017).
11	
      State v. Jasa, 297 Neb. 822, 901 N.W.2d 315 (2017).
12	
      Bryan M. v. Anne B., 292 Neb. 725, 874 N.W.2d 824 (2016).
13	
      See, Crown Products Co. v. City of Ralston, 253 Neb. 1, 567 N.W.2d
      294 (1997); Geringer v. City of Omaha, 237 Neb. 928, 468 N.W.2d 372
      (1991); Krusemark v. Thurston County Bd. of Equal., 10 Neb. App. 35,
      624 N.W.2d 328 (2001).
                                     - 841 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

Due proc­ ess does not guarantee an individual any particu-
lar form of state procedure. Instead, the requirements of due
process are satisfied if a person has reasonable notice and an
opportunity to be heard appropriate to the nature of the pro-
ceeding and the character of the rights which might be affected
by it.14 This court has stated that an owner is not deprived of
his property without due process of law by means of taxation if
he has an opportunity to question its validity or the amount of
such tax or assessment at some stage of the proceedings, either
before that amount is finally determined or in a subsequent
proceeding for its collection.15
   In Cain’s petition for review, he argued that because, after
remand, only one of the commissioners assigned to decide
Cain’s protests was present at the evidentiary hearing, the
TERC failed to decide the matter by a quorum, as required
under Neb. Rev. Stat. § 77-5005(2) (Cum. Supp. 2016). Cain
argued this procedure violated his due process rights under
Neb. Rev. Stat. §§ 77-5003(1) and 77-5015 (Cum. Supp.
2016).
   [12,13] In Liljestrand v. Dell Enters.,16 we found a work-
ers’ compensation claimant’s due process rights were violated
where the original trial judge retired during an appeal and, on
remand, the case was assigned to a new judge who reviewed
the record and issued an order without an evidentiary hearing.
In reversing, and remanding for a new trial, we agreed with
the general rule that a successor judge may not make a deci-
sion based on conflicting evidence that a predecessor judge
heard.17 We stated that “‘due process entitles a litigant to have
all the evidence submitted to a single judge who can see the

14	
      In re Interest of S.J., 283 Neb. 507, 810 N.W.2d 720 (2012); Slansky v.
      Nebraska State Patrol, 268 Neb. 360, 685 N.W.2d 335 (2004).
15	
      Farmers Co-op Assn. v. Boone County, 213 Neb. 763, 332 N.W.2d 32
      (1983).
16	
      Liljestrand v. Dell Enters., 287 Neb. 242, 842 N.W.2d 575 (2014).
17	
      Id.
                                   - 842 -
             Nebraska Supreme Court A dvance Sheets
                     298 Nebraska R eports
                   CAIN v. CUSTER CTY. BD. OF EQUAL.
                            Cite as 298 Neb. 834

witnesses testify and, thus, weigh their testimony and judge
their credibility.’”18 We noted the issue for determination was
the nature and extent of the claimant’s permanent disability,
which we found involved evaluating the credibility of the
witnesses, and that the successor judge had no opportunity to
assess credibility before deciding the case.
   At oral argument in this appeal, Cain conceded he had not
assigned as error the TERC’s refusal to hear additional evi-
dence. Cain did not request a new evidentiary hearing before
Hotz, the successor commissioner. Cain noted our instructions
on remand were limited to reconsideration on the record using
the preponderance of the evidence standard (though we could
not have predicted one of the two commissioners who heard the
evidence would resign). Instead, Cain argued he was entitled to
argue how the standard of proof applied to the evidence. Here,
Cain asserts only the right to make a legal argument pertaining
to an already existing record.
   [14,15] We have not recognized oral argument as a free-
standing procedural due process right.19 Oral argument may
be desirable but it is not indispensable, nor is it an essential
element of due process.20 The due process right protected in
Liljestrand, that a successor or substitute judge may not render
a judgment for a predecessor judge who conducted the trial,
is primarily based on the need for the ruling judge to consider
credibility where the evidence is in conflict.21 A party may

18	
    Id. at 248, 842 N.W.2d at 580 (quoting Smith v. Freeman, 232 Ill. 2d 218,
    902 N.E.2d 1069, 327 Ill. Dec. 683 (2009)).
19	
    Ready Mix, Inc. v. Nebraska Railroads, 181 Neb. 697, 150 N.W.2d 275
    (1967).
20	
    See State v. Smith, 199 Neb. 368, 259 N.W.2d 16 (1977).
21	
    Liljestrand, supra note 16. See, also, State ex rel. Bonner v. McSwine, 14
    Neb. App. 486, 709 N.W.2d 691 (2006); Newman v. Rehr, 10 Neb. App.
    356, 630 N.W.2d 19 (2001), affirmed on other grounds 263 Neb. 111,
    638 N.W.2d 863 (2002); In re Marriage of Seyler, 559 N.W.2d 7 (Iowa
    1997).
                                     - 843 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                      CAIN v. CUSTER CTY. BD. OF EQUAL.
                               Cite as 298 Neb. 834

waive this right and agree to have a successor judge decide
the case.22
   We find, by asserting only the right to make a legal argu-
ment to the decisionmaker regarding the controlling standard
of evidence and by failing to request relief in the form of a new
evidentiary hearing before the TERC, that Cain waived the due
process rights applicable in Liljestrand. Cain’s argument that
he was entitled to argue the case following remand is without
merit. Cain’s due process rights were not violated.
                  2. TERC Erred in A ffirming
                      Assessor’s Valuations
   Cain argues the TERC erred in affirming the Assessor’s
valuations of his property for the 2012 tax year.
   Under Neb. Rev. Stat. § 77-201(1) (Reissue 2009), all real
property, unless expressly exempt, is subject to taxation and
is to be valued at its actual value. As we noted in Burdess
v. Washington Cty. Bd. of Equal.,23 the Legislature has made
agricultural and horticultural land a separate and distinct class
of property for purposes of property taxation. While most real
property is valued for taxation purposes at 100 percent of its
actual value, which is “the market value of real property in the
ordinary course of trade,”24 the Legislature has determined that
agricultural and horticultural land shall be valued at 75 percent
of its value.25
   In Bartlett v. Dawes Cty. Bd. of Equal.,26 we reviewed the
statutory scheme used to value agricultural land:

22	
      Smith, supra note 18; In re Marriage of Seyler, supra note 21. See Louis
      v. Nebraska Dept. of Corr. Servs., 12 Neb. App. 944, 687 N.W.2d 438
      (2004).
23	
      Burdess, supra note 5.
24	
      Neb. Rev. Stat. § 77-112 (Reissue 2009).
25	
      See § 77-201(2).
26	
      Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954, 962, 613 N.W.2d 810,
      817 (2000).
                                   - 844 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

         Agricultural land constitutes a separate and distinct
      class of property for purposes of property taxation.[27]
      Neb. Const. art. VIII requires uniform and proportion-
      ate assessment within the class of agricultural land.
      Agricultural land is then divided into “categories” such as
      irrigated cropland, dry cropland, and grassland.[28] These
      categories are further divided into subclasses based on
      soil classification.[29]
This court, in Bartlett, rejected the assessor’s use of market
areas employed in the case as violative of the statutory scheme
set out by the Legislature. The evidence indicated that the
market areas established by the assessor were not based on
soil classification, but, instead, were based on assessment-to-
sales ratios. Because the subclasses of agricultural land had to
be based on soil classification, not upon where the land was
located, we determined that the market areas did not constitute
subclasses of agricultural land as defined by our statutes.
   After our decision in Bartlett, the Legislature enacted Neb.
Rev. Stat. § 77-103.01 (Reissue 2009),30 which set forth that
a class or subclass based on market characteristics shall be
based on characteristics that affect the actual value in a dif-
ferent manner than it affects the actual value of properties
not within the market characteristic class or subclass. The
factors to consider now include parcel use, parcel type, loca-
tion, geographic characteristics, zoning, city size, parcel size,
and market characteristics appropriate for the valuation of
such land.
   The Nebraska Court of Appeals, in Vanderheiden v. Cedar
Cty. Bd. of Equal.,31 found market areas based upon an

27	
      See Neb. Rev. Stat. § 77-1359 (Cum. Supp. 2016).
28	
      See Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2016).
29	
      See id.
30	
      See Vanderheiden v. Cedar Cty. Bd. of Equal., 16 Neb. App. 578, 746
      N.W.2d 717 (2008).
31	
      Vanderheiden, supra note 30.
                                      - 845 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                      CAIN v. CUSTER CTY. BD. OF EQUAL.
                               Cite as 298 Neb. 834

e­ xamination of the land for soil types, productivity, availability
 of water, relation to market distribution points, land use, geog-
 raphy, and sales history were in accordance with § 77-103.01.
    Under § 77-112, actual value of real property for purposes
 of taxation may be determined using professionally accepted
 mass appraisal methods, including, but not limited to, (1)
 the sales comparison approach, taking into account factors
 such as location, zoning, and current functional use; (2) the
 income approach; and (3) the cost approach. This statute does
 not require use of all the specified factors, but requires use of
 applicable statutory factors, individually or in combination, to
 determine actual value of real estate for tax purposes.32
    As set forth in Neb. Rev. Stat. § 77-1507.01 (Reissue 2009),
 “[a]ny person otherwise having a right to appeal may petition
 the [TERC] to determine the actual value or special value of
 real property for that year . . . .”
    [16-19] In initial protests before the TERC, the valuation
 by the assessor is presumed to be correct, and the burden of
 proof rests upon the taxpayer to rebut this presumption and to
 prove that an assessment is excessive.33 A presumption exists
 that a county board of equalization has faithfully performed
 its official duties in making an assessment and has acted
 upon sufficient competent evidence to justify its actions.34
 The presumption disappears when competent evidence to
 the contrary is presented.35 Once the presumption is rebut-
 ted, whether the valuation assessed is reasonable becomes a
 question of fact based on all of the evidence, with the burden

32	
      US Ecology v. Boyd Cty. Bd. of Equal., 256 Neb. 7, 588 N.W.2d 575
      (1999).
33	
      Cain I, supra note 2.
34	
      See, § 77-5016(9); JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal.,
      285 Neb. 120, 825 N.W.2d 447 (2013); Brenner, supra note 7 (citing Ideal
      Basic Indus. v. Nuckolls Cty. Bd. of Equal., 231 Neb. 653, 437 N.W.2d 501
      (1989)).
35	
      JQH La Vista Conf. Ctr., supra note 34.
                                     - 846 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

of proof resting on the taxpayer.36 The taxpayer’s burden to
show the valuation to be unreasonable is not met by show-
ing a mere difference of opinion.37 Rather, the taxpayer
must establish the valuation placed upon the property when
compared with valuations placed on other similar property
is grossly excessive and is a result of arbitrary or unreason-
able action and not just a mere error in judgment.38 When
the TERC hears a property tax protest under § 77-1507.01
and performs the factfinding functions that a county board
of equalization would have if the county had timely provided
notice to the taxpayer, the taxpayer’s burden of persuasion is
by a preponderance of the evidence.39
   Thus, the ultimate issue of fact in this case is the actual
value of Cain’s subject property in 2012.
                           (a) Evidence
   For the purpose of property tax assessments, the Assessor
developed five market areas based on her record of property
sales, soil type, availability of water, and topography, but not
based on land use. Cain’s property is located in market area
1, the highest valued land in the county, and has been valued
as part of that market area for some time. Within each market
area, the Assessor categorized agricultural property into sub-
classes of irrigated cropland, grassland, and dryland, which
were designated as “A,” “G,” and “D,” respectively. Property
in each category was further classified by soil capability. A
rating from “1” to “4” was given to each parcel, with “1”
representing soil with the highest productivity rating and “4”
representing the lowest quality soil. Under this framework, for
example, category “4A” was irrigated cropland with poor soil

36	
      See id.
37	
      See id. (citing Bumgarner v. County of Valley, 208 Neb. 361, 303 N.W.2d
      307 (1981)).
38	
      See id.
39	
      See Cain I, supra note 2.
                             - 847 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                CAIN v. CUSTER CTY. BD. OF EQUAL.
                         Cite as 298 Neb. 834

and category “4G” was grassland with poor soil. But property
classified as “4A” or “4G” was valued differently depending
upon the market area in which it was located.
   Market areas 1, 2, and 3 are most relevant. Market area
1 primarily comprised the lower southeastern portion of the
county, which contained soil suitable for crop production.
Market area 1 contains most of the farm activity in the county
and contains land with silt loam and flat row crop production.
Market area 2, characterized as the Sandhills region, primarily
comprised the northwestern and northern parts of the county.
Market area 3 was a transitional area between market areas 1
and 2.
   In 2012, the Assessor designated the nonirrigated portions
of Cain’s property as grassland and valued such land between
$495 and $505 per acre, depending on soil capability. The
Assessor classified the irrigated portions of Cain’s property
as irrigated cropland, or “A.” This meant Cain’s irrigated land
was valued between a range of “1A” and “4A,” or between
$2,100 and $2,930 per acre in market area 1. The Assessor
placed almost 600 acres of Cain’s land into the “4A” category,
poor quality irrigated cropland valued at $2,100 per acre. The
same category was valued per acre at $450 in market area 2
and $870 in market area 3. The remaining 100-plus irrigated
acres were valued between $2,105 and $2,930.
   At the evidentiary hearing, Cain adduced evidence that the
Assessor inequitably classified the irrigated portions of his
land, because the valuations did not take into consideration
that his property was not comparable to irrigated cropland in
terms of soil type, topography, and land use. Cain irrigated
only native grasses. In 2006, he drilled two wells for pivot
irrigation to combat dust from a feedlot south of his property.
In all, his property had three wells and seven irrigation pivots.
He testified he used irrigation conservatively to avoid erosion.
Cain submitted affidavits stating his opinion that the taxable
value of his property for the 2012 year was $778,625, or an
average of $711.77 per acre.
                               - 848 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                 CAIN v. CUSTER CTY. BD. OF EQUAL.
                          Cite as 298 Neb. 834

   Cain and his expert witness, Cyril Thoene, both testified the
best and most productive use of Cain’s property was for cattle
grazing and not for row crop production, because the soil was
mostly Valentine sand. Thoene presented a county soil map
which showed that a band of Valentine sand ran southeast from
the Sandhills region to an area just south of Broken Bow, where
Cain’s property was located. The land containing Valentine
sand is fragile with little fertility. The land has slopes, is highly
erodible, and overall is not suitable for farming.
   In 2010, Thoene, a certified general appraiser, appraised
Cain’s property and determined that approximately 95 per-
cent of the soil was rolling Valentine sand with steep slopes.
He testified that Valentine soils are some of the poorer land
that one could farm. He opined that Cain’s property was most
comparable to property in market area 2, the lowest valued
agricultural land in the county. He stated that but for the pres-
ence of irrigation systems, Cain’s property would be identical
to the Sandhills grassland found in market area 2. Because of
its proximity to Broken Bow, however, Thoene believed the
property should be valued between the 2012 values for “4A”
property in market area 2 ($450 per acre) and market area 3
($870 per acre).
   In completing his appraisal report, Thoene considered
each of the three appraisal methods—the sales comparison
approach, the income approach, and the cost approach—and
determined a value estimate based upon the Uniform Standards
of Professional Appraisal Practice. Thoene said that the unique-
ness of Cain’s irrigated grassland made it difficult to find com-
parable sales. He kept records of every sale in the county and
had not seen any recent sales of irrigated grassland in Custer
County. But he found comparable sales in 2010 outside the
county where the property owner had installed pivot irrigation
but used the land for livestock grazing. Thoene determined
that those properties sold for about one-quarter to one-third
of the selling price for average- to high-quality irrigated
cropland. Thoene stated these market findings supported his
                             - 849 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                CAIN v. CUSTER CTY. BD. OF EQUAL.
                         Cite as 298 Neb. 834

opinion that Cain’s property should be valued between $450
and $870 per acre.
   The Assessor explained how she classified Cain’s prop-
erty. She testified that even though Cain’s property contained
Valentine sand, the property was not equivalent to property
in market area 2, because Cain’s soil had “a little loam in it.”
She determined this by using a Department of Revenue soil
chart not offered into evidence. She explained her valuations
accounted for soil types through market sales and the soil capa-
bility subclassifications.
   The Assessor admitted that Cain’s property was valuated the
same as other irrigated cropland in market area 1, regardless
of its topography and whether it was suitable for crop produc-
tion. She conceded that Cain’s property had poor quality soil
and that if irrigation systems were not present on the land, his
property would be classified as grassland and valued between
$495 to $510 per acre.
   The Assessor explained her property valuations were based
upon state statutes and Department of Revenue rules and
regulations and that she lacked authority to make adjust-
ments for irrigated grassland. She relied upon the Department
of Revenue’s regulation, 350 Neb. Admin. Code, ch. 14,
§ 002.21B, which defines irrigated cropland as all land where
irrigation is used, whether for “cultivated row crops, small
grains, seeded hay, forage crops, or grasses.” She admitted,
however, that from 2006 to 2012, she used a formula to adjust
the value of irrigated grassland. She said both the county and
the Department of Revenue were aware of her practice to
adjust valuations for irrigated grassland. She conceded that the
Department of Revenue did not require her to discontinue mak-
ing adjustments for irrigated grassland.
   In response to a question posed by Freimuth, the Assessor
admitted the actual value of Cain’s property could be some-
where between the value of property in market areas 2 and 3:
         Q Do you agree with . . . Thoene’s position that it’s
      somewhere between Market Area 2 and Market Area 3,
                                   - 850 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

         somewhere between 450 and 870? If you were to say,
         from a (indiscernible) standpoint or similarity standpoint,
         would you agree with . . . Thoene that it’s somewhere
         between 450 and 870, Market Area 2, Market Area 3
         valuation?
            A It could possibly be. I would more soon use a for-
         mula because there’s going to be other irrigated grass. It’s
         just not one person that this would envelop.

                          (b) Resolution
   [20-22] Competent evidence is evidence that is admissible
and tends to establish a fact in issue.40 A resident owner who
is familiar with his or her property and knows its worth is
permitted to testify as to its value without further founda-
tion; this principle rests upon the owner’s familiarity with the
property’s characteristics, its actual and potential uses, and
the owner’s experience in dealing with it.41 When an indepen-
dent appraiser using professionally approved methods of mass
appraisal certifies that an appraisal was performed according to
professional standards, the appraisal is considered competent
evidence under Nebraska law.42
   The burden of persuasion imposed on Cain is not met by
showing a mere difference of opinion unless it is established
by a preponderance or greater weight of the evidence that the
valuation placed upon the property when compared with valua-
tions placed on other similar property is grossly excessive and
is the result of a systematic exercise of intentional will or fail-
ure of plain duty, and not mere errors of judgment.43 Beginning
with a presumption that the Assessor faithfully performed her

40	
      TJ 2010 Corp. v. Dawson Cty. Bd. of Equal., 22 Neb. App. 989, 866
      N.W.2d 93 (2015).
41	
      Darnall Ranch v. Banner Cty. Bd. of Equal., 276 Neb. 296, 753 N.W.2d
      819 (2008); Brenner, supra note 7.
42	
      JQH La Vista Conf. Ctr., supra note 34.
43	
      See, Cain I, supra note 2; JQH La Vista Conf. Ctr., supra note 34.
                                     - 851 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                      CAIN v. CUSTER CTY. BD. OF EQUAL.
                               Cite as 298 Neb. 834

official duties in making an assessment and acted upon suf-
ficient competent evidence, we must determine in the instant
case if there is competent evidence to the contrary such that the
presumption disappeared.
   We determine that the TERC erred in disregarding Cain’s
testimony that, in his opinion, the subject property had an
actual value of approximately $711.77 per acre. This testimony
constituted competent evidence under the rule that an owner
who is familiar with his property and knows its worth is per-
mitted to testify as to its value.
   We also determine that the TERC erred in disregarding the
testimony of Thoene, whose expertise as a real estate appraiser
was demonstrated by the evidence. Thoene testified that he
used the sales comparison approach to determine his estimated
value of between $450 and $870 per acre. His appraisal report,
which was received into evidence, indicated that Thoene uti-
lized all three mass appraisal methods and that those methods
support his estimated value. His appraisal was therefore com-
petent evidence which was entitled to weight in determining
the actual value of the subject property.
   [23] We have recognized that in tax valuation cases, actual
value is largely a matter of opinion and without a precise yard-
stick for determination with complete accuracy.44
   [24,25] The record shows the TERC used an erroneous evi-
dentiary standard in determining Cain’s protests. The TERC
found that “the presumptions in favor of the initial valuations
by the County Assessor have not been rebutted by a prepon-
derance of the evidence.” However, as we have previously
held, the presumption of validity afforded to the Assessor’s
valuation disappears once competent evidence to the contrary
is presented.45 A presumption may take the place of evidence

44	
      Brenner, supra note 7.
45	
      See, JQH La Vista Conf. Ctr., supra note 34; Brenner, supra note 7; TJ
      2010 Corp., supra note 39; Zabawa v. Douglas Cty. Bd. of Equal., 17 Neb.
      App. 221, 757 N.W.2d 522 (2008).
                                      - 852 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                      CAIN v. CUSTER CTY. BD. OF EQUAL.
                               Cite as 298 Neb. 834

unless and until evidence appears to overcome or rebut it, and
when evidence sufficient in quality appears to rebut it, the
presumption disappears and thereafter the determination of the
issues depends upon the evidence.46 A presumption is not evi-
dence and should never be placed in the scale to be weighed as
evidence.47 And, once the presumption of validity disappears,
the taxpayer bears the burden of showing the county’s valua-
tion is unreasonable.48
   The opinions of Cain and Thoene that the actual value of
the subject property was approximately 60 percent lower than
the 2012 valuation determined by the Assessor constituted
competent evidence which caused the presumption of validity
afforded to the Assessor’s valuation to disappear. Therefore,
the reasonableness of the Assessor’s valuation was a question
of fact based upon all the evidence presented, and Cain had the
burden of showing such valuation to be unreasonable.
   Most of Cain’s and Thoene’s testimony about the unique
qualities and value of Cain’s land was unrefuted, except for the
Assessor’s competing position that all irrigated property must
be valued as irrigated cropland.
   The regulation the Assessor relied on states: “Irrigated
Cropland includes all land where irrigation is used, whether for
cultivated row crops, small grains, seeded hay, forage crops,
or grasses.”49 This definition of “[i]rrigated [c]ropland” is a
subdefinition of “[c]ropland.”50 The purpose of this definition
“is to establish guidelines for the assessment of agricultural
land.”51 This type of agency rule is merely an aid, and not a

46	
      See, First Nat. Bank in Kearney v. Bunn, 195 Neb. 829, 241 N.W.2d 127
      (1976); In re Estate of Drake, 150 Neb. 568, 35 N.W.2d 417 (1948).
47	
      Bohmont v. Moore, 138 Neb. 784, 295 N.W. 419 (1940).
48	
      See id.
49	
      350 Neb. Admin. Code, ch. 14, § 002.21B.
50	
      Id., § 002.21.
51	
      Id., § 001.01 (emphasis supplied). See Neb. Rev. Stat. § 77-1330(1) (Cum.
      Supp. 2016).
                                  - 853 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                    CAIN v. CUSTER CTY. BD. OF EQUAL.
                             Cite as 298 Neb. 834

command. If an agency rule is but an aid to help the agency in
its decision, then the rule is not binding upon the agency unless
the rule confers a procedural benefit upon a party.52 The defi-
nitional guideline of “[i]rrigated [c]ropland”53 here provides no
procedural benefit and therefore is not mandatory.
   The Assessor admitted she was not instructed to utilize this
regulation and that she had not adhered to it from 2006 to
2012. Thus, the Assessor’s premise about a legal requirement
for uniform classification of irrigated land is not persuasive.54
In truth, under §§ 77-103.01, 77-112, and 77-1363, asses-
sors are not limited to a single method of determining the
actual value of property for tax purposes. Rather, assessors are
charged with a duty to consider a wide range of relevant fac-
tors in order to arrive at a proper assessment which does not
exceed actual value.
   Based on our review of the record, we find Cain proved by
the greater weight of the evidence that his irrigated grassland
property was not comparable to the vast majority of the high
quality farming land within market area 1 and was more com-
parable to valuations placed on other similar property in mar-
ket areas 2 and 3, as well as Cain’s own nonirrigated property.
As a result, we find the TERC erred by failing to find Cain
carried his burden to prove by a preponderance of the evidence
that the Assessor’s value of his irrigated grassland property
for the 2012 tax year was grossly excessive and the result of
arbitrary or unreasonable action.
                 3. R emaining Assignments
                          of Error
  Because we have determined that the TERC’s order should
be reversed, we do not address Cain’s remaining assignments

52	
      See Schmidt v. State, 255 Neb. 551, 586 N.W.2d 148 (1998).
53	
      See 350 Neb. Admin. Code, ch. 14, § 002.21B.
54	
      See Beynon Farm Products v. Bd. of Equalization, 213 Neb. 815, 331
      N.W.2d 531 (1983).
                                    - 854 -
               Nebraska Supreme Court A dvance Sheets
                       298 Nebraska R eports
                     CAIN v. CUSTER CTY. BD. OF EQUAL.
                              Cite as 298 Neb. 834

of error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and con­
troversy before it.55
                       V. CONCLUSION
   We conclude that Cain has shown by a preponderance of
the evidence that the valuation of the property at issue for the
tax year 2012 is $870 per acre, for a total of $951,719.10. We
remand the matter to the TERC with directions that it direct
the Assessor to set the valuation of the property at such amount
for the tax year 2012, upon which amount taxes for such year
shall be determined and paid.
                     R eversed and remanded with directions.
   Wright, J., not participating in the decision.

55	
      Estermann v. Bose, 296 Neb. 228, 892 N.W.2d 857 (2017).
