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Parker v. Doe Run Co.

Court of Appeals of Missouri, Southern District

May 10, 2018

DOE RUN COMPANY, Respondent-Appellant.

          APPEAL FROM THE CIRCUIT COURT OF REYNOLDS COUNTY Honorable Sidney T. Pearson, III, Circuit Judge

          Before Rahmeyer, P.J., Bates, J., and Scott, J.

          PER CURIAM.

          Rick Parker, the Assessor for Reynolds County ("Assessor"), appeals from the findings of the State Tax Commission ("the Commission") regarding the valuation of real property in Reynolds County.[1] The Commission found that the fair market value on January 1, 2011, of a part of Taxpayer's real property in Reynolds County was $105, 600, 000 for property tax purposes. Assessor brings five points claiming the Commission erred in determining the fair market value of the real property at issue before the Commission. We disagree, but first, we must address procedural issues.

         Serious and unexcused deficiencies in all of Assessor's points warrant dismissal of this appeal. Assessor's disregard of Rule 84.04(d) seriously impedes our review of his complaints.[2]Although blessed with talented and experienced counsel, Assessor made no attempt to comply with Rule 84.04(d)(2) in any of his points; offered no excuse, explanation, or remedy when Taxpayer properly cited these failings in its brief; and seemed not to fathom this Court's requests for clarification during oral argument.

         "Failure to properly state the points relied on indicates a lack of understanding of the appellate function and process." Thummel v. King, 570 S.W.2d 679, 686 (Mo. banc 1978). Here, we do not evaluate evidence and make an original tax determination; rather, we consider assertions that the Commission erred so as to entitle Assessor to relief from the Commission's determination. See id. Thus, "[t]he requirement that the point relied on clearly state the contention on appeal is not simply a judicial word game or a matter of hypertechnicality on the part of appellate courts." Id.

         Rule 84.04(d) compliance is particularly critical "in a case such as this where the facts are complex." Id. Because Assessor's briefs do not adequately advise this Court of the contentions asserted or merit thereof, we face the dilemma of deciding this case (and possibly establishing future precedent) on the basis of inadequate briefing and advocacy. Id. "In addition to being inherently unfair to the other party to the appeal, it is unfair to parties in other cases awaiting disposition because it takes from them appellate time and resources which should be devoted to expeditious resolution of their appeals." Id.

         The violations here - every single point - are particularly egregious because Rule 84.04(d) includes specific point templates, so Assessor "simply ha[s] no excuse for failing to submit adequate points relied on." Scott v. King, 510 S.W.3d 887, 892 (Mo.App. E.D. 2017). "Insufficient points relied on preserve nothing for appellate review and constitute grounds for dismissal." Parker v. Action Contracting Corp., 100 S.W.3d 168, 171 (Mo.App. W.D. 2003).

         Assessor's serious and unexcused Rule 84.04(d) violations warrant dismissal. We decline to do so only because:

[t]his type of case is by its very nature impressed with a public interest; substantial business and private interests and investments are involved; and, this [C]ourt is reluctant to forgo its judicial function to decide the matter on the merits, because of a failure of counsel to obey the mandate of the Rule.

State ex rel. Oliver v. Pub. Serv. Comm'n, 542 S.W.2d 595, 597 (Mo.App. K.C.D. 1976).

         Yet this grants Assessor only a fleeting reprieve because each of his points ostensibly challenges the sufficiency or weight of the evidence.[3] No such challenge can succeed on appeal unless it substantially tracks the rubric first set out in Houston v. Crider, 317 S.W.3d 178, 186-87 (Mo.App. S.D. 2010), and followed in scores of reported opinions since.[4] Assessor disregards the format for asserting such complaints, which renders all such arguments analytically and persuasively worthless.[5] This means, in turn, that for this Court to grant any of Assessor's points, we would have to develop and support our own Houston argument in Assessor's favor, which "would thrust us into becoming an advocate on [Assessor's] behalf; a role we are prohibited from assuming." Id. at 189.

         The foregoing, of necessity, would end our inquiry in most cases. But again, this case "is by its very nature impressed with a public interest." Oliver, 542 S.W.2d at 597. For that reason alone, this Court has attempted to overcome Assessor's otherwise-fatal deficiencies, address each of his points on appeal below, and determine whether any could properly merit relief.

         Standard of Review

         We can grant Assessor relief only if the Commission's decision:

(1) is in violation of constitutional provisions; (2) is in excess of the statutory authority or jurisdiction of the agency; (3) is unsupported by competent and substantial evidence upon the whole record; (4) is, for any other reason, unauthorized by law; (5) is made upon unlawful procedure or without a fair trial; (6) is arbitrary, capricious or unreasonable; or (7) involves an abuse of discretion.

Bateman v. Rinehart, 391 S.W.3d 441, 444-45 (Mo. banc 2013) (quotation and citations omitted); see also section 536.140, RSMo Cum.Supp. 2005, and Mo. Const. art. V, section 18. This Court is hesitant to substitute its judgment for the Commission in matters of property tax assessment. Bateman, 391 S.W.3d at 445. "This Court will defer to the [Commission's] judgment regarding factual matters; however, the [Commission's] decision interpreting statutory law is reviewed de novo and will be upheld only when its decision is authorized by law and supported by competent and substantial evidence upon the record." Id.

         A county board of equalization's valuation is presumed correct; the presumption may be rebutted only if the taxpayer presents substantial and persuasive evidence that the valuation is erroneous. Snider v. Casino Aztar, 156 S.W.3d 341, 346 (Mo. banc 2005). The taxpayer has the burden to establish the value that should have been placed on the property. Id.[6] Determining the true value in money is an issue of fact for the Commission, Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo.App. E.D. 2008), but determining "[w]hether the appropriate standard of value and approach to valuation were properly applied under the particular facts and circumstances of the case is a question of law." Snider v. Casino Aztar, 156 S.W.3d at 346. While the Commission has some discretion in deciding which approach best estimates the value of a particular property, its choice of valuation approaches must comply with the law, and once the Commission decides to use a particular approach, it must apply that approach properly and consider all of the relevant factors. Id. at 348.

         Commission Findings

         Taxpayer is a mining company that owns, or leases from the federal Bureau of Land Management ("BLM") and other private persons, 39, 221 acres in Reynolds County that are identified as 234 separate parcels for ad valorem tax purposes.[7] The land is part of three separate mines - Brushy Creek Mine, Fletcher West Fork Mine and Sweetwater Mine.[8] The mineral lease payments under Taxpayer's leases are in the form of royalty payments. The royalty payments are 5% of net smelter returns. Net smelter returns are the net revenue from Taxpayer's sales of lead, zinc and copper concentrates. The parties agreed that the royalty payments are at market rate.

         The Commission determined an aggregate true value in money of $105, 600, 000 for the five parcels at issue in the proceedings before the Commission.[9] The Commission further found and concluded that mining properties are complex to value and may not lend themselves to the development of a single approach for valuing the property for ad valorem purposes. Specifically, the cost approach could not be used to value the property in its entirety because of the nature of mineral leases. Because of the unique nature of mines and quarries, which are seldom alike as they differ in ore, reserves, size, geology, depth, costs, and location, the sales comparison approach alone was not adequate. The Commission noted caution should be exercised when valuing mining property using the income approach as it may capture income earned from the personal property or intangibles.

         Both parties developed all three approaches to value; the parties developed those approaches differently. For example, Taxpayer developed a commercial property sales comparison approach to value the land and improvements but used the royalty income approach to value the mineral interest. Assessor utilized a unitary income approach to value all of the property belonging to Taxpayer. Assessor's income approach was based upon income generated by the production of the concentrates and therefore included income from the entire mining operation - real property, personal property and intangibles. The Commission found the most persuasive approach as to the improvements was Taxpayer's approach as it valued the improvements using the sales comparison approach and cost approach. Taxpayer properly classified the surface land owned by Taxpayer as commercial. Assessor's evidence as to the market value of land in Reynolds County of $700 per acre was substantial and persuasive. The market valuation of the land using Taxpayer's acreage figure was determined to be: $700 per acre times 20, 556.48 acres equals $14, 390, 000 (rounded).[10]

         Taxpayer's appraiser opined that the improvements had a value of $1, 272, 852 under the sales comparison approach and $1, 179, 890 under the cost approach. Assessor's appraiser countered that at least a portion of the improvements had a value of $13, 727, 912 under the cost approach.

         The Commission used Assessor's appraisal to review Taxpayer's appraisal and noted Taxpayer's appraiser did not include a valuation determination for all improvements in his appraisal. As the appraiser testified, many of the improvements would have been implicitly included in his valuation. Those improvements would have included roads to access buildings, etc. Some improvements such as tailing ponds and dams were not valued. According to Taxpayers' appraiser, the value of those improvements would have been negated by the remediation costs. There were improvements such as fixtures that were not valued and should have been included. Further, the appraiser should have included such items as the construction work in progress and presented a supportable position as to their market value, or stated why those item do not have a market value. These items were not maintenance of the improvements, but betterment in which the owner anticipated deriving a financial reward. Assessor's appraiser made a determination of value for the construction work in progress at each mine ($6, 058, 105, $7, 200, 258, and $3, 007, 691, or a total of $16, 266, 054). The Commission concluded Taxpayer failed to present evidence to refute the determinations made by Assessor.

         After review of the appraisal approaches and the evidence presented as to the improvement value as opined by Taxpayer's appraiser and the construction work in progress values as opined by Assessor's appraiser, the Commission determined ...

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