GA LITIGATION ALERT – GEORGIA COURT ALLOWS EXPERT WITNESS IN PROPERTY TAX CASE
Everybody understands that, when their property gets appraised, there’s always the chance that it will be appraised for much more or less than originally thought. If you’re selling your home, an increase in your property value is a good thing. However, when you’re paying property taxes, an unexpected and significant increase is very unwelcome.
This is exactly what happened to the petitioner in White Horse Partners LLLP v Monroe County Board of Assessors. White Horse Partners, LLLP, along with Loblolly Investments, LLLP jointly owned a 250-acre tract of land in Monroe County, Georgia. The land was mostly timberland, devoted to the commercial production of timber. In 2007, their land had been appraised at $309,175. In 2008, the County hired a third-party appraisal company to reassess the value of 23 separate large tracts of land in Monroe County.
The 2008 appraisal listed an increased value of White Horse Partners’ property of $834,900. On appeal, this amount was reduced to $626,200. This was an increase of more than twice the original value. Of course, with this increase in property value, White Horse’s taxes on the land more than doubled. As a result, White Horse and Loblolly filed an appeal.
The first two appeals filed by the petitioners were unsuccessful. In the most recent appeal, there was actually a jury trial held to determine the issue of valuation of the petitioner’s land. Specifically, the appeal was directed at the value of the timber on the White Horse’s land, along with the valuation method used by the Board and their third-party appraiser.
The trial court affirmed the lower court’s findings and held that the valuation method used by the Board was valid and that the petitioner’s property assessment of $626,200 was accurate. The petitioner appealed the decision to the Court of Appeals in Georgia.
What Were the Issues Raised by the Petitioner?
One can understand that White Horse was more than a little frustrated when their 2008 tax assessment came in at more than three (3) times its current value. They were able to get the amount reduced slightly on appeal, but it was still coming at more than twice its previous value.
On appeal, the petitioner argued that the trial court had erred in allowing the Board’s expert witness to rely on hearsay evidence. They also claimed that the expert’s valuation of their standing timber was too speculative to be trusted by the County.
The petitioner argued that the hearsay evidence relied on by the Board’s expert witness should not have been allowed. This same evidence had indeed been excluded by the court since it constituted hearsay. Furthermore, the petitioner argued that using comparable sales prices to appraise their 250-acre property was unfair.
The Appellate Court was able to easily dismiss the petitioner’s first argument regarding hearsay. Apparently, the petitioner was citing the old Code of Evidence in Georgia. Under the old code, petitioner was correct – an expert witness was not allowed to rely on hearsay evidence when testifying. However, the new Code of Evidence became effective on January 1, 2013, prior to the White Horse trial. Therefore, the Court would rely on the new rules as opposed to those cited by petitioner.
Under the Revised Code of Evidence, an expert witness can rely on hearsay evidence as long as there was no harm in allowing the witness to do so. The Court ruled that an expert witness is qualified as an expert, and cites reliable evidence, their testimony will be allowed. Here, the report relied upon by the Board’s expert was not admitted into evidence. However, the Court found that the expert’s testimony – as a whole – relied on cumulative facts and evidence submitted throughout the course of the trial and, therefore, not in violation of the hearsay rule.
Petitioner also argued that the expert’s testimony should not have been allowed because he was not able to specifically recall the property values of the 23 different properties used to determine the value of White Horse’s property. Basically, the appraisal company used a sales comparative approach in ascertaining the new value of petitioner’s land.
The method used was to take the total sales value, minus the value of the timber on the land. This new value would reflect the adjusted sales price. The appraiser used this adjusted sales price in their comparative analysis. The petitioner claimed that this process was not reliable. The Court disagreed.
The Court found that the appraiser’s method of valuation was reasonable and not speculative. They also found that the fact that the expert couldn’t remember the exact value of all of the comparable properties did not make his entire testimony inadmissible. The court found that the expert’s reliance on a report that was deemed at hearsay was harmless error. Relying on DeGolyer v Green Tree Servicing, the Court found that it is harmless error to admit hearsay when “it is cumulative of legally admissible evidence showing the same facts.”
Property Owners Need to Be Prepared for Surprise Assessments
What the White Horse Partners, LLLP case shows us is that Georgia is going to systematically uphold increased tax assessments unless the property owner can show an egregious harm. The fact that this case was appealed three times demonstrates the frustration felt by the petitioner. And, while it seems like a tax assessment that increases by two or three-fold is patently unfair, the courts in Georgia will allow it.
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To read DeGolyer v Green Tree Servicing, read here
Read the entire White Horse Partners, LLLP decision here
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