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Fraughton v. Utah State Tax Commission

Court of Appeals of Utah

January 10, 2019

Edward J. Fraughton, Petitioner,
v.
Utah State Tax Commission and Board of Equalization of Salt Lake County, Respondents.

          Original Proceeding in this Court

          Edwin S. Wall, Attorney for Petitioner

          Bradley C. Johnson, Attorney for Respondent Board of Equalization of Salt Lake County

          Judge David N. Mortensen authored this Opinion, in which Judges Kate Appleby and Ryan M. Harris concurred.

          OPINION

          MORTENSEN, JUDGE

         ¶1 In 2015, Edward J. Fraughton challenged the assessed value on his residence, claiming that promises made in 1973 by unidentified persons from South Jordan City (the City) were key to determining the correct value. Fraughton's challenge was, in large part, successful, resulting in just a three percent difference in the assessed value from Fraughton's claimed value. But Fraughton refused to stipulate to the new assessed value and appealed to the Utah State Tax Commission (the Commission). Fraughton now seeks review of the Commission's final decision that Fraughton had neither shown an error in the assessment nor provided a sound evidentiary basis for a lower residential property value. We are unpersuaded by Fraughton's arguments and decline to disturb the decision of the Commission.

         BACKGROUND

         ¶2 Edward Fraughton purchased an abandoned brick church in the City in 1973. Fraughton, an artist, planned to preserve the historic building and the 2.41 acres of land on which it sat (the Property) for use as his workshop and as a residence for his family.

         ¶3 For the 2015 tax year, the Property was assessed at $1, 163, 780. In September 2015, Fraughton appealed that assessment to the Salt Lake County Board of Equalization (the Board), arguing that the fair market value of the Property was $704, 480. In a March 2016 hearing, the Board reduced the assessed value to $947, 000 based on evidence submitted by the Salt Lake County Assessor. The Board noted that Fraughton had not "provided evidence to establish a value." Fraughton then appealed the Board's decision to the Commission.

         ¶4 At the Commission hearing in April 2017, Fraughton did not provide comparable sales values, an appraisal, or any other evidence of the Property's value. Instead, he argued that the fair market value of the Property should be based on a "reasonable adjustment" to the purchase price instead of "speculative" market value. In contrast, the Commission based its conclusion on a report submitted by an appraiser for Salt Lake County. The appraiser, relying primarily on comparable land sales, valued 1.48 acres of the Property at $8.65 per square foot and .93 acres of the Property at $4.11 per square-foot, for a total value of $724, 155 in land. The appraiser noted that nearly all of the value consisted of the land, with the building valued at only $1, 500, for a total rounded value of $725, 700 for the Property.

         ¶5 The Salt Lake County appraiser also stated that the county assessor's office contacted Fraughton and offered to stipulate to a value of $725, 700 for the Property. Fraughton had requested an assessed value of $704, 480 from the Board in August 2015, but in October 2015, he declined to stipulate to Salt Lake County's adjusted lower value. These two values differ by $21, 200, or about three percent.

         ¶6 The Commission also received evidence at the hearing, in the form of a letter from the City, that the Property was zoned- current as of October 2015-as RM or "Residential Multi-Family" by the City, and it had been in that zoning category since at least 1987. Allowed uses in RM zoning include various residential dwellings, community and public safety services, worship, public utilities, and daycare. Fraughton testified that the Property was indeed zoned RM, but he contended that this designation meant "Rural Mix," which allowed "a mix of agricultural and residential uses as well as an art studio." He further contended that the City had agreed to this special zoning designation when he purchased the property in 1973.[1]

         ¶7 After considering the evidence presented, the Commission set the fair market value of the Property at $725, 700. The Commission limited its decision to determining the Property's value and did not ...


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