Berkeley County Council v. Government Properties Income Trust LLC

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

September 2022 Term FILED
_______________
November 10, 2022
No. 20-1019 released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
_______________ SUPREME COURT OF APPEALS
OF WEST VIRGINIA

BERKELEY COUNTY COUNCIL,
Defendant Below,
Petitioner,

v.

GOVERNMENT PROPERTIES INCOME TRUST LLC,
Plaintiff Below,
Respondent.
____________________________________________________________

AND
_______________

No. 20-1022
_______________

BERKELEY COUNTY COUNCIL,
Defendant Below,
Petitioner,

v.

MARTINSBURG IRS OC, LLC,
Plaintiff Below,
Respondent.
____________________________________________________________

Appeal from the Circuit Court of Berkeley County
The Honorable Laura V. Faircloth, Judge
Civil Action Nos. CC-02-2019-AA-7 and CC-02-2019-AA-8

REVERSED AND REMANDED
____________________________________________________________
 Submitted: September 27, 2022
Filed: November 10, 2022

Jeffrey T. Mauzy, Esquire Eric Hulett, Esquire
Anthony J. Delligatti, Esquire Christopher M. Hunter, Esquire
Martinsburg, West Virginia Jackson Kelly PLLC
Counsel for Petitioners Charleston, West Virginia

AND

Edward F. Hirshberg, Esquire
Ryan Law Firm, PLLC
Pittsburgh, Pennsylvania
Counsel for Respondent

Joshua A. Cottle, Esquire
Kimberly S. Croyle, Esquire
Howard E. Seufer, Jr.
Bowles Rice LLP
Charleston, West Virginia
Counsel for Amicus Curiae Board of
Education of the County of Berkeley

JUSTICE ARMSTEAD delivered the Opinion of the Court.
 SYLLABUS BY THE COURT

1. “‘It is a general rule that valuations for taxation purposes fixed by an

assessing officer are presumed to be correct. The burden of showing an assessment to be

erroneous is, of course, upon the taxpayer, and proof of such fact must be clear.’ Syl. Pt.

7, In re Tax Assessments Against Pocahontas Land Co., 172 W.Va. 53, 303 S.E.2d 691

(1983).” Syl. Pt. 1, Musick v. University Park at Evansdale, LLC, 241 W. Va. 194, 820

S.E.2d 901 (2018).

2. “Arbitrary or unjust action by an assessor in fixing the value of land

must be shown by clear and cogent proof in order that the complaining taxpayer may be

given relief from an allegedly excessive valuation.” Syl. Pt. 2, Bankers Pocahontas Coal

Co. v. County Court of McDowell County., 135 W. Va. 174, 62 S.E.2d 801

(1950), overruled on other grounds by In re Kanawha Val. Bank, 144 W. Va. 346, 109

S.E.2d 649 (1959).

3. “‘A taxpayer challenging an assessor’s tax assessment must prove by

clear and convincing evidence that such assessment is erroneous.’ Syllabus Point 5, in

part, In re: Tax Assessment of Foster Foundation’s Woodlands Retirement

Community, 223 W.Va. 14, 672 S.E.2d 150 (2008).” Syl. Pt. 10, Mountain America, LLC

v. Huffman, 224 W. Va. 669, 687 S.E.2d 768, 772 (2009).

i
 4. A party defending an assessment before a Board of Assessment

Appeals is the appropriate party, and thus a necessary party, to an appeal of such

assessment to the circuit court.

5. “Title 110, Series 1P of the West Virginia Code of State Rules confers

upon the State Tax Commissioner 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 Assessment Against American Bituminous Power Partners, L.P., 208 W. Va.

250, 539 S.E.2d 757 (2000).

ii
ARMSTEAD, Justice:

In these two consolidated appeals, The Berkeley County Council

(“Petitioner”) appeals the judgments of the Circuit Court of Berkeley County that reversed

the orders issued by Petitioner while sitting as the Berkeley County Board of Assessment

Appeals (“Board”). 1 These orders arose from appeals of the ad valorem assessments of

properties owned by Government Properties Income Trust LLC (“Government

Properties”) and Martinsburg IRS OC, LLC (“Martinsburg IRS OC”) (collectively,

“Taxpayers”) as determined by the Berkeley County Assessor (“Assessor”) for the 2019

tax year. 2 Petitioner appealed both rulings of the circuit court to this Court, raising six total

issues across both appeals. 3 In our review, we believe these issues encompass two

1
The Legislature has repealed the provisions establishing Boards of
Assessment Appeals. See 2021 W. Va. Acts, c.261, eff. July 1, 2022. We cite to the 2010
version of West Virginia Code § 11-3-24b throughout this opinion as this provision governs
these consolidated appeals.

Under the 2010 version of the statute, county commissions/councils are
statutorily required to sit as Boards of Assessment Appeals. See W. Va. Code § 11-3-
24b(a).

As discussed in more detail below, the Berkeley County Assessor was not
2

named as a party to the appeal from the Board to the circuit court.
3
The specific issues raised in the appeals were, in 20-1019: 1) The Circuit
Court erred in reducing the Berkeley County Assessor’s assessment, because the property
owner failed to join an indispensable party, the Berkeley County Assessor, who assessment
was contested. 2) The Circuit Court erred by reversing the Board of Assessment Appeals,
by finding the Assessment erroneous, when it was not, adopting the taxpayer’s appraisal,
that violated West Virginia law. Likewise, in 20-1022, the issues raised were: 1) The
Circuit Court abused its discretion by reducing the Berkeley County Assessor’s
Assessment without joining the Berkeley County Assessor, whose assessment is contested.
(continued . . .)

1
overarching questions, which are: 1) whether the Assessor was an indispensable party to

the actions and should have been named in the Taxpayers’ appeals to the circuit court; and,

2) whether the circuit court erred in determining the assessments as affirmed by the Board

were invalid. 4 Although these two appeals deal with different pieces of property, owned

by two different entities, the same issues are common to both appeals. Thus, we

consolidated these two matters and placed them on the docket for oral argument under Rule

19 of the West Virginia Rules of Appellate Procedure.

After review of the trial transcript and evidence, the briefs and arguments of

the parties, and all other matters of record, we find that the circuit court erred in reversing

the Board and reverse and remand for further proceedings consistent with this opinion. 5

2) The Circuit Court abused its discretion by a) applying wrong standard of review, b)
applying the wrong standard of proof, and c) by finding that the Board of Assessment
Appeals erred by not finding that the Assessor violated the law for choosing the cost
approach to valuation. 3) The Circuit Court erred when it made the erroneous finding of
fact that the Assessor did not take into account all types of depreciation in its appraisal,
because the property record card indicates that depreciation was applied. 4) The Circuit
Court abused its discretion by adopting the “retrospective leased fee” appraisal conducted
by Martinsburg IRS, O.C. LLC’s hired appraiser that failed to comply with West Virginia
law for valuing commercial property for ad valorem tax purposes.
4
We would note that the Legislature has repealed the provisions of West
Virginia Code § 11-3-25, which contained the process for appeals of Board decisions to
circuit court applicable to this appeal. See 2021 W. Va. Acts, c.261, eff. July 1, 2022. This
repeal has no impact upon this matter. Thus, we cite to the 2014 version of this code section
throughout this opinion.
5
The Court would like to acknowledge the arguments presented in both
appeals by the amicus curiae, The Board of Education of the County of Berkeley.
2
 I. FACTUAL AND PROCEDURAL BACKGROUND

Because of differences in the properties at issue, we will separately set out

the facts relating to each.

A. Government Properties Property

The Government Properties property is located at 882 TJ Jackson Drive in

Falling Waters, West Virginia, contains 4.42 acres, and is comprised of a commercial

building containing 37,605 square feet of interior space, which includes a 30,875 square

foot computer room/data center. The Assessor assessed the fair market value of this

property for the 2019 tax year to be $4,212,200.00, with an assessed value of

$2,527,320.00. The Assessor based its valuation upon the cost approach to value, 6 the

methodology of which was explained before the Board by John Streett, commercial

appraiser for the Assessor:

Legislative Rule 110 1P was considered and utilized for the
2019 tax year. The legislative rule enumerates a number of
elements that shall be considered when doing a commercial
appraisal. The majority of those elements are located within

6
There are three approaches to value that may be considered in valuing real
estate – cost, income capitalization, and sales comparison. See The Appraisal Institute,
The Appraisal of Real Estate 36-37 (15th ed. 2020). All of these approaches to value are
contemplated by the regulations adopted by the West Virginia State Tax Department for
appraising commercial and industrial real property. See 110 W. Va. C.S.R. § 1P-3.2.1
(2013). We will discuss these approaches in more detail below. All citations to 110 West
Virginia Code of State Regulations § 1P are to the 2013 version.

3
 IAS on a property record card.[ 7] However, some of the
elements are found on the tax map, where others are found on
the Certificate of Transfer and Sales Form received from the
County Clerk’s office.

Additionally, Streett also considered obsolescence in making his appraisal, stating,

“functional obsolescence and external obsolescence … were taken into consideration.

Based upon the definition of functional obsolescence and economic obsolescence, our

office did not believe that any adjustments were needed other than normal depreciation on

improvement.” 8 Thus, after considering the applicability of obsolescence, Streett rejected

its application. Further, due to a lack of available data, Streett was unable to develop either

the income approach or the comparative sales approach in performing his appraisal,

ultimately settling on utilizing the cost approach:

It is the opinion of the Assessor’s Office that there were no
valid sales directly comparable to the subject property. Income
approach was also considered, letters were mailed to those
properties that were coded 353 office buildings asking for
income and expense information. The one office building that
was listed as a valid sale by this office was not returned to this
office. Hence, our office was not able to develop a
calculazation [sic] rate. And since the subject property has a
(inaudible), there would be no income (inaudible) for this
property for the current tax year, so consequently all three
approaches to value were considered. The cost approach was
chosen to be used for the 2019 tax year.

“IAS” is the Integrated Assessment System managed by the Tax
7

Commissioner. It will be discussed in more detail below.

In developing the cost approach to valuation, the Assessor must “consider
8

three (3) types of depreciation: physical depreciation, functional obsolescence, and
economic obsolescence.” 110 W. Va. C.S.R. § 1P-3.2.1.1.
4
 Government Properties appealed the assessment to the Board which held a

hearing on the appeal. At that hearing, Government Properties offered an appraisal,

completed by Paul Griffith, which reconciled fair market value for the 2019 tax year at

$900,000.00, with an assessed value of $540,000.00. Griffith’s appraisal was based upon

a reconciliation of the cost and comparative sales approaches to value which used two West

Virginia properties – one in Berkeley County and the other in Monongalia County, and two

out-of-state properties – one in Allentown, Pennsylvania and the other in Baltimore,

Maryland. The Baltimore property was ultimately not considered due to its location in the

Baltimore market. Griffith concluded that there was significant functional obsolescence 9

in this building which reduced the value of the subject property by $2,150,000.00. Based

upon that determination, Griffith maintained that only 6,000 square feet of the 37,605

square foot building had any value because the rest of the building was functionally

obsolete for the purposes of assessment. 10

9
The Appraisal of Real Estate provides that functional obsolescence is
“when ongoing change, caused by technological advances or economic and aesthetic
trends, renders building layouts and features obsolete to the extent that value is impaired.”
The Appraisal Institute, The Appraisal of Real Estate 232. Functional obsolescence is
classified as a depreciation adjustment in the West Virginia State Tax Department’s
regulations that the Assessor must “consider.” See 110 W. Va. C.S.R. §§ 1P-3.2.1.1 and
3.5.
10
It must be noted, however, that the appraisal offered by Government
Properties concurred with the Assessor’s conclusion regarding obsolescence. “[B]ased on
inspection and consideration of this current and/or future use, there does not appear to be
any significant items of functional obsolescence.”
5
 The Board found the Assessor’s assessment to be valid. In so doing, the

Board highlighted the discrepancies between the two appraisals:

Part of the differences result from the character of the
two analyses. The Assessor is required to perform a mass
appraisal of properties. Unlike the Taxpayer, it did not perform
an individual bank-type appraisal. Where the Taxpayer
considered only the 3.40 acres, valued at $480,000, the
Assessor correctly assessed the property as 4.42 acres, valued
at $1,095,000. The improvements are valued by the Assessor
at $3,117,200. The Taxpayer, on the other hand, values the
improvements at only $508,635. This surprisingly low
appraisal value results from a $2,790,840 physical depreciation
and a $2,150,000 functional obsolescence. The Taxpayer
argues that of the 37,605 square feet it asserts comprises the
building, only 6,000 square feet is functional, while 31,605
square feet are surplus space which should not be a part of the
assessed property value. In addition, despite the Taxpayer’s
decision not to utilize the Income Approach to value the
property, the appraisal adds $495,407 to the replacement costs
of site and building improvements as “Entrepreneurial Profit”.

Thus, there is a wide disparity between the two
appraisals. On the one hand, the Taxpayer’s appraisal results
in an assessed value for 2019 Tax Year purposes of $593,181,
while the Assessor’s appraisal results in an assessment of
$2,527,320 for purposes of determining the tax liability for Tax
Year 2019.[ 11]

From this discussion, the Board concluded:

While a mere recounting of methodology and results set
forth in the Taxpayer’s appraisal and excellent argument that
such methodology and results are logical and make good sense
are, indeed, helpful in giving the Board an understanding of the
Taxpayer’s position, those things do not meet the high burden
of “clear and convincing” evidence that the Assessor’s
methodology and resulting assessment is erroneous. The

11
The assessed values calculated in the parties’ appraisals are based upon
sixty percent of the fair market value, which percentage is provided for in Article X,
Section 1b of the West Virginia Constitution and West Virginia Code § 11-3-1(a) (2014).
6
 Taxpayer’s presentation, especially with regard to the
extraordinary functional obsolescence, was lacking in
evidentiary justification and was more conclusory than
supportive.

On the other hand, the Assessor’s presentation was
cogent, comprehensive and persuasive. The Taxpayer failed to
rebut the Assessor’s findings or make any effective
undermining of the methodology used or the assessment
determination resulting.

Government Properties appealed the Board’s determination to the circuit

court, which reversed the Board. The circuit court’s order adopted Government Properties’

proposed findings of fact and conclusions of law, adopting in total the appraisal offered by

Government Properties and rejecting the cost approach valuation established by the

Assessor. The circuit court found that the Government Properties appraisal was superior

to the Assessor’s appraisal, holding:

Here, the Appraisal and [Government Properties’]
testimony related thereto presents an extremely in-depth and
detailed analysis of the Property, the factors listed in the Rules,
and the market value of the Property as of July 1, 2018[,] by
development of both the cost and comparable sales approach.
The analysis and data presented by the comparable sale
approach is particularly important to the determination of the
true and actual value for the Property in this case and properties
involved in all tax assessment appeal cases, and its substantial
impact on the determination of a Property’s market value is
clearly stated in Rules section 3.1.1. [W. Va. C.S.R.] § 110-1P-
3.1.1 (when determining market value, “primary consideration
shall be given to the trends of price paid for like or similar
property in the area of locality in which the property is
situated[.”])

….

7
 As discussed in detail above, the Appraisal and
testimony related thereto are more than adequate to meet the
burden of ‘clear and convincing evidence’ to show that the
Assessor’s methodology and resulting Assessment is
erroneous. The evidence presented to the Board regarding the
Property’s functional obsolesce as considered in the
Appraisal’s cost approach was more than sufficiently
supported by evidence related to the sale of numerous
comparable properties. In fact, it was supported by evidence
which the West Virginia Supreme Court considers to be the
best evidence available in an assessment: the sale price paid for
the Property involved in this case at a sale occurring less than
three months before the Hearing date. This evidence is goes
[sic] far beyond the ‘clear and convincing’ standard, and the
appraisal consideration thereof to develop the Property’s
functional obsolescence factor offering the Board valid,
substantial and more than enough justification for the
Appraisal’s cost approach valuation conclusion. Contrary to
the Board’s creative, albeit misleading and unsupported,
description of the Appraisal’s functional obsolescence
presentation and evidentiary worth, the Appraisal presents a
logical and detailed analysis by clear and convincing evidence
sufficient to meet the burden of proof imposed on [Government
Properties] showing that the Assessor’s methodology and
resulting Assessment are erroneous. Accordingly, the Board’s
determination that [Government Properties] failed to meet its
burden of proof by is erroneous.

B. Martinsburg IRS OC Property

The Martinsburg IRS OC property is located at 295 Murrall Drive in

Kearneysville, West Virginia, has a total acreage of 24.59 acres and contains multiple

buildings encompassing a total of 122,475 square feet. The property includes an on-site

backup power-plant, space to house computer hard drives, and a dedicated chiller plant to

cool the computer room space.

8
 Based upon its cost-based appraisal, the Assessor determined fair market

value of this property for the 2019 tax year to be $26,940,000.00, with an assessed value

of $16,164,120.00. 12 Once again, John Streett, the Assessor’s commercial appraiser,

testified before the Board regarding the methodology used to arrive at this valuation. He

stated that the Assessor’s Office attempted to obtain data to develop the income approach

and market capitalization rate but was unsuccessful. Describing this effort, Streett stated,

“we considered the income approach, letters were mailed to valid commercial sales asking

for income expense information. The income expense questionnaire of the one valid sale

of an office building was not returned to this office so that a capitalization rate could be

developed for office field use.” Further, Streett testified that to determine an overall market

capitalization rate, the Legislative Rule requires “dividing the annual net income level by

the current selling price of comparable properties.” Because the requested data was not

returned to the Assessor’s office, it was impossible for Streett to make this calculation.

Streett further testified that the methodology ultimately followed by the Assessor, which

utilized the cost approach, was in compliance with the law:

In regards to the Assessor’s Office values on this
property, Legislative Rule 110 1P was considered and utilized
for the 2019 tax year. That legislative rule enumerates a
number of elements that shall be considered when doing a
commercial appraisal. The majority of those elements are
located within the IAS on a property record card, which is the
Integrated Assessment System on the property record card.

12
The assessed value represents sixty percent of the fair market value, which
percentage is provided for in Article X, Section 1b of the West Virginia Constitution and
West Virginia Code § 11-3-1(a) (2014).

9
 ….

All three approaches to value were considered by the
Berkeley County Assessor’s Office, West Virginia Legislative
Rule 110 1P 3.2.1 states, in determining an estimate of fair
market value, the tax commissioner shall consider and use
where applicable three accepted approaches of value, the cost,
the income and the market approach. The cost approach was
considered for the 2019 tax year, is was [sic] the interior
functional and economic obsolescence were taken into
consideration. Based upon the definition of functional
obsolescence and economic obsolescence, the Berkeley
County Assessor’s Office does not believe that any
adjustments are needed other than the normal depreciation on
the improvement.

Martinsburg IRS OC appealed this assessment to the Board. At a hearing

before the Board, Martinsburg IRS OC offered its own appraisal, completed by Michael

Miller, which found fair market value of this property for the 2019 tax year to be

$7,240,000.00, with an assessed value of $4,344,000.00. Miller’s appraisal developed a

hybrid income and sales comparison approach to value, in contrast to the Assessor’s

methodology.

The Board found in favor of the Assessor’s methodology and valuation

stating, “[t]he leased fee valuation urged on the Board by the Taxpayer is not the fee simple

valuation required of our Assessor.” 13 Further, the Board found:

Additionally, on its face, the taxpayer’s appraisal says its purpose is to
13

“develop an opinion of the Retrospective Market Value of the subject property’s leased fee
interest.”

10
 The major difference in the two assessments, however,
derive from the Assessor’s utilization of the Cost Approach to
value and the Taxpayer’s use of the Income Approach with the
Sales Comparison Approach used as its check for
reconciliation purposes. The testimony of Mr. Streett noted
that the West Virginia Legislature has written into the law a
prescription for determining the selection of a capitalization
rate in utilization of the Income Approach used by the
Taxpayer’s appraisal. Rather than follow W.Va. C.S.R. § 110-
1P-3.2.1.2, which provides, in pertinent part, that, “The
selection of an overall capitalization rate shall be derived from
current available market data by dividing annual net income by
the current selling price of comparable properties. The present
fair market value of the property shall then be determined by
dividing the annual economic rent by the capitalization rate,[”]
the Taxpayer’s appraisal indicates that four different
techniques were used in development of their overall
capitalization rate: (1) Comparable Sales; (2) Competitive
Market; (3) Investor Surveys; and, (4) Band of Investment
Technique. These techniques, certainly, are appropriate for the
more common bank appraisals but, the Assessor is mandated
to follow the Legislative Rule in determining a capitalization
rate to employ in the Income Approach to value. The data
needed to comply with the prescriptive Legislative Rule was
not available to the Assessor, as Mr. Streett testified. Nor, in
the case of the Sales Comparison Approach, also, utilized by
the Taxpayer, were there sufficient comparative sales available
within the Berkeley County jurisdiction as required by the
Rules to make the meaningful sales comparisons for an
appraisal. Lacking such data, the Supreme Court of Appeals of
West Virginia has opined that the Assessor is not required to
spend time and effort developing an approach to value which
does not comply with the Rules.

….

The Taxpayer failed to rebut the Assessor’s findings or
to effectively undermine the Assessor’s use of the Cost
Approach to value the property other than to generally indicate
that the Cost Approach was not an appropriate approach in this
case and to offer the Board the alternative Income Approach.
And, while the Board is troubled that a building valued at $30
million in 2005, the strongest sellers’ market prior to the 2008

11
 recession, is, fourteen years later, appraised by the Assessor at
$26,940,200, only $3 million less, without clear and
convincing evidence that the Assessor’s Cost Approach
assessment is erroneous, the Board must affirm such
assessment.

Martinsburg IRS OC appealed the Board’s determination to the circuit court,

which reversed the Board by order dated November 23, 2020. The circuit court fully

adopted Martinsburg IRS OC’s proposed findings of fact and conclusions of law. 14

Importantly, the circuit court order states:

Here, the Appraisal and [Martinsburg IRS OC’s]
testimony related thereto presents an extremely in-depth and
detailed analysis of the Property, the factors listed in the Rules,
and the market value of the Property as of July 1, 2018[,] by
development of both the income and comparable sales
approach. The analysis and data presented by the comparable
sale approach is particularly important to the determination of
the true and actual value for the Property in this case and
properties involved in all tax assessment appeal cases, and its
substantial impact on the determination of a Property’s market
value is clearly stated in section 3.1.1 of the Rules. [W. Va.
C.S.R.] § 110-1P-3.1.1 (when determining market value,
“primary consideration shall be given to the trends of price paid
for like or similar property in the area of locality in which the
property is situated.[”])

….

As discussed in detail above, the Appraisal and testimony
related thereto are more than adequate to prove by clear and
convincing evidence that the Assessment for the Property is not
accurate. This evidence presented to the Board goes far beyond
a general indication “that the Cost Approach was not
appropriate” and develops two approaches to value offering the
Board much more than simply “the alternative Income

The circuit court’s conclusions in both the Government Properties case and
14

the Martinsburg IRS OC case, which are quoted in this opinion, are nearly identical.
12
 Approach.” To the contrary, it presents a logical and detailed
analysis by clear and convincing evidence sufficient to show
the Assessment for the Property is not accurate. Accordingly,
the Board’s determination that Petitioner failed to meet its
burden of proof is erroneous.

App. 433.

Based upon the circuit court’s findings in both cases, Petitioner appealed.

We consolidated these matters as they share common issues of law and fact and set them

for argument under Rule 19 of the West Virginia Rules of Appellate Procedure.

II. STANDARD OF REVIEW

We are guided by the following standard of review for proceedings under

West Virginia Code § 11-3-25 (2014):

“‘It is a general rule that valuations for taxation
purposes fixed by an assessing officer are presumed to be
correct. The burden of showing an assessment to be erroneous
is, of course, upon the taxpayer, and proof of such fact must be
clear.’ Syl. Pt. 7, In re Tax Assessments Against
Pocahontas Land Co., 172 W.Va. 53, 303 S.E.2d 691 (1983).”

Syl. Pt. 1, Musick v. Univ. Park at Evansdale, LLC, 241 W. Va. 194, 820 S.E.2d 901 (2018).

“Upon receiving an adverse determination before the county
commission, a taxpayer has a statutory right to judicial review
before the circuit court.” W. Va. Code § 11-3-25 (1967).

Judicial review of a decision of a board of equalization
and review regarding a challenged tax-assessment valuation is
limited to roughly the same scope permitted under the West
Virginia Administrative Procedures Act. As we have
explained, review before the circuit court is confined to
determining whether the challenged property valuation is
supported by substantial evidence, or otherwise in
contravention of any regulation, statute, or constitutional

13
 provision. Therefore, “our review of a circuit court’s ruling in
proceedings under § 11-3-25 is de novo.”

Musick, 241 W. Va. at 199, 820 S.E.2d at 906 (internal footnotes omitted). 15 As noted,

the Taxpayer carries a heavy burden in challenging assessments. “Arbitrary or unjust

action by an assessor in fixing the value of land must be shown by clear and cogent proof

in order that the complaining taxpayer may be given relief from an allegedly excessive

valuation.” Syl. Pt. 2, Bankers Pocahontas Coal Co. v. Cnty. Ct. of McDowell Cnty., 135

W. Va. 174, 62 S.E.2d 801 (1950), overruled on other grounds by In re Kanawha Val.

Bank, 144 W. Va. 346, 109 S.E.2d 649 (1959). “‘A taxpayer challenging an assessor’s tax

assessment must prove by clear and convincing evidence that such assessment is

erroneous.’ Syllabus Point 5, in part, In re: Tax Assessment of Foster Foundation’s

Woodlands Retirement Community, 223 W.Va. 14, 672 S.E.2d 150 (2008).” Syl. Pt. 10,

Mountain Am., LLC v. Huffman, 224 W. Va. 669, 687 S.E.2d 768, 772 (2009).

III. ANALYSIS

Mindful of our standard of review, we now discuss the two primary issues

raised in this appeal.

15
As we discuss below, the procedure for appealing from a Board of
Assessment Appeals decision is the same as the procedure for appealing a Board of
Equalization and Review determination. See, W. Va. Code § 11-3-24b & 11-3-25. Many
of the cases discussed in this opinion are from appeals of Board of Equalization and Review
decisions.

14
A. Proper Party to Appeal from Board

Petitioner argues that in its appeal to the circuit court from the Board, both

Taxpayers failed to name the Assessor as a party to their appeals. Specifically, Petitioner

avers that the Assessor is the only entity that can grant relief, that the Board, who was the

only named party to the appeal to circuit court, could not actually change the assessments

at issue, and that the Assessor should have had the opportunity to defend its assessments

in the proceeding.

The Taxpayers respond that no statute requires the Assessor be named as a

party to an appeal from a Board to circuit court. The Taxpayers correctly note this Court

has issued numerous opinions wherein county Assessors were not parties to this type of

proceeding and the county commission/council was named instead. 16 In fact, we note that

16
See, e.g., Bayer MaterialScience, LLC v. State Tax
Commissioner, 223 W.Va. 38, 672 S.E.2d 174 (Kanawha
County Commission appeared as party); In re: Tax Assessment
of Foster Foundation’s Woodlands Retirement
Community, 223 W.Va. 14, 672 S.E.2d 150 (Cabell County
Commission appeared as party); Central Realty Co. v. Board
of Equalization and Review of Cabell County, 110 W.Va. 437,
158 S.E. 537 (1931); Gilbert v. County Court of Wyoming
County, 121 W.Va. 647, 5 S.E.2d 808 (1939); In re
Stonestreet, 147 W.Va. 719, 131 S.E.2d 52 (1963) (defendants
were Commissioners of the County Court of Calhoun
County); Tug Valley Recovery Center, Inc. v. Mingo County
Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979) (“The
respondents are elected members of the Mingo County
Commission, and in this capacity, sat as a Board of
Equalization and Review during the month of February
(continued . . .)

15
 1978”); The Great A & P Tea Co., Inc. v. J. Carney Davis,
Assessor of Marion County, West Virginia, and Marion County
Board of Review and Equalization, 167 W.Va. 53, 278 S.E.2d
352 (1981); Allegheny Pittsburgh Coal Co. v. County
Commission of Webster County, West Virginia and East
Kentucky Energy Corp. v. County Commission of Webster
County, West Virginia, 488 U.S. 336, 109 S.Ct. 633, 102
L.Ed.2d 688 (1989); Eastern American Energy Corporation v.
Robert W. Thorn, Assessor of Wirt County, and C. Richard
Boice, Commissioner of the County Commission of Wirt
County, Paul Bumgarner, Commissioner of the County
Commission of Wirt County, and Harry Matheny,
Commissioner of the County Commission of Wirt County, in
their Capacities as County Commissioners and in Their
Capacities as Members of the County Board of Equalization
and Review, 189 W.Va. 75, 428 S.E.2d 56 (1993); Western
Pocahontas Properties, Ltd. v. County Commission of Wetzel
County, 189 W.Va. 322, 431 S.E.2d 661 (1993); In re Elk
Sewell Coal, 189 W.Va. 3, 427 S.E.2d 238 (“Ernest V. Morton,
Jr., Pros. Atty., Webster Springs”, attorney for Webster County
Commission); Rawl Sales & Processing Co. v. County
Commission of Mingo County, 191 W.Va. 127, 443 S.E.2d 595
(1994); In re the Petition of Maple Meadow Mining Company
for Relief from Real Property Assessment for the Tax Year
1992, 191 W.Va. 519, 446 S.E.2d 912 (1994) (“Carl W. Roop,
Canterbury, Poling & Roop, Beckley, for Raleigh County
Commission”); Bookman v. Hampshire County
Commission, 193 W.Va. 255, 455 S.E.2d 814 (1995); In re the
1994 Assessments of the Property of Massimo A. Righini,
Marilou M. Righini, J. David Magistrelli and Diane
Magistrelli, 197 W.Va. 166, 475 S.E.2d 166 (1996) (“Richard
G. Gay, Berkley Springs, for Morgan County
Commission”); In re Tax Assessment Against American
Bituminous Power Partners, L.P., 208 W.Va. 250, 539 S.E.2d
757 (2000) (“Frances C. Whiteman, Esq., Whiteman, Burdette
& Radman, PLLC, Fairmont, West Virginia” is listed as
“Attorney for Appellant Marion County Commission”).

Mountain Am., 224 W. Va. at 684 n.19, 687 S.E.2d at 783 n.19. See also Xenia Hotels &
Resorts, Inc. v. Kanawha Cnty. Bd. of Commissioners, No. 20-0068, 2021 WL 1100388
(continued . . .)

16
we have stated, “County commissions have often been made parties to these types of

appeals. Indeed, County Commissions have made numerous appearances in these types of

appeals before this Court.” Mountain Am., 224 W. Va. at 683, 687 S.E.2d at 782. Even

so, some cases before this Court have named the Assessor as a party. 17 Still others have

named the tax commissioner. 18 Consequently, we have found no case in our research in

(W. Va. Mar. 23, 2021) (memorandum decision); Tabb v. Jefferson Cnty. Comm’n, No.
17-0095, 2018 WL 1444286 (W. Va. Mar. 23, 2018) (memorandum decision); Palley v.
Tucker Cnty. Comm’n, No. 16-0403, 2017 WL 1423166 (W. Va. Apr. 21, 2017)
(memorandum decision); Palley v. Tucker Cnty. Comm’n, No. 14-0686, 2015 WL 3458348
(W. Va. Jan. 30, 2015) (memorandum decision); In re Tax Assessment of Foster Found.’s
Woodlands Ret. Cmty., 223 W. Va. 14, 672 S.E.2d 150 (2008) (Cabell County Commission
sitting as Board appeared).
17
See Musick, 241 W. Va. at 194, 820 S.E.2d at 901 (Musick was
Monongalia County Assessor); Rhoe v. Hess, No. 15-1038, 2016 WL 6819046 (W. Va.
Nov. 18, 2016) (memorandum decision) (Hess was Berkeley County Assessor. The
Berkeley County Council was also named as a party); Univ. Park at Evansdale, LLC v.
Musick, 238 W. Va. 106, 792 S.E.2d 605 (2016) (Musick was Monongalia County
Assessor); United Hosp. Ctr., Inc. v. Romano, 233 W. Va. 313, 758 S.E.2d 240 (2014)
(Romano was Harrison County Assessor); Wright v. Banks, 232 W. Va. 602, 753 S.E.2d
100 (2013) (Banks was Jefferson County Assessor); Pope Properties/Charleston Ltd. Liab.
Co. v. Robinson, 230 W. Va. 382, 738 S.E.2d 546 (2013) (Robinson was Kanawha County
Assessor); Shenandoah Sales & Serv., Inc. v. Assessor of Jefferson Cnty., 228 W. Va. 762,
724 S.E.2d 733 (2012); Stone Brooke Ltd. P’ship v. Sisinni, 224 W. Va. 691, 688 S.E.2d
300 (2009) (multiple Assessors are named as parties); Tax Assessment Against Purple
Turtle, LLC v. Gooden, 223 W. Va. 755, 679 S.E.2d 587, (2009) (Gooden was Berkeley
County Assessor); New Vrindaban Cmty., Inc. v. Rose, 187 W. Va. 410, 419 S.E.2d 478
(1992) (Marshall County Assessor named as party); In re Tax Assessments Against
Pocahontas Land Co., 172 W. Va. 53, 303 S.E.2d 691 (1983) (Assessor appeared in appeal
by counsel); Great A & P Tea Co. v. Davis, 167 W. Va. 53, 278 S.E.2d 352 (1981) (Davis
was Assessor of Marion County).

See Settimi v. Irby, No. 21-0046, 2022 WL 292317 (W. Va. Feb. 1, 2022)
18

(memorandum decision); United Hosp. Ctr., 233 W. Va. 313, 758 S.E.2d 240 (Tax
Commissioner named as party); New Vrindaban, 187 W. Va. 410, 419 S.E.2d 478 (Tax
Commissioner named as party).

17
which a party has squarely placed before this Court the question of whether an Assessor is

a necessary party to an appeal from a Board of Assessment Appeals decision. 19

19
In each county, under the prior enactment, a Board would sit annually to
hear property valuation disputes between taxpayers and the Assessor. See W. Va. Code §
11-3-24b (As noted above, this code section has been repealed. This discussion relates to
the statutory framework applicable to these appeals.). The Berkeley County Council is
statutorily required to sit as the Board. Id. Following a decision of the Board, appeals
may be taken to the circuit court, “[a]ny party to the hearing may appeal the order of the
board in the manner provided in section twenty-five of this article for appealing an order
of the board of equalization and review.” W. Va. Code § 11-3-24b(g) (emphasis added).
Such appeals shall be heard in the circuit court “of the county in which the property books
are made out. . . .” W. Va. Code § 11-3-25(a). Notice of such appeals must be given to
“the prosecuting attorney of the county, whose duty it shall be to attend to the interests of
the state, county and district in the matter, and the prosecuting attorney shall give at least
five days notice of hearing to the Tax Commissioner.” Id. “The right of appeal from any
assessment by the . . . Board of Assessment Appeals as provided in this section may be
taken either by the applicant or by the state, and in the case of the applicant, by his or her
attorney, or in the case of the state, by is prosecuting attorney or other attorney representing
the Tax Commissioner.” W. Va. Code § 11-3-25(b) (emphasis added). “The state or the
aggrieved taxpayer may appeal a question of valuation to the Supreme Court of Appeals if
the assessed value of the property is $50,000 or more, and either party may appeal a
question of classification or taxability.” W. Va. Code § 11-3-25(d) (emphasis added).

Additionally, we have previously held that the provisions of West Virginia
Code § 11-3-25 we are discussing here and those which allow for appeals from county
commission/council determinations contained in West Virginia Code § 58-3-4 (1923) must
be read in pari materia. See In re Stonestreet, 147 W. Va. 719, 726, 131 S.E.2d 52, 56
(1963). Thus, we also look to West Virginia Code § 58-3-4 for guidance as to who must
be named in appeals from county commissions/councils to circuit courts. That code section
provides, in pertinent part:

In any case in which an appeal lies under section one of
this article on behalf of a party to a controversy in a county
court, such party may present to the circuit court of the county
in which the judgment, order or proceeding complained of was
rendered, made or had, or in the vacation of such court, to the
judge of such court, the petition of such party for an appeal.

W. Va. Code § 58-3-4 (1923) (emphasis added).

18
 In a similar matter relating to assessments, we have previously held that

county commissions/councils are not proper parties to appeals taken under a prior

enactment regarding assessment appeals:

A county court is not a party to an appeal taken under
section 7, c. 36, Acts 1891, for reassessment of lands by a
landowner, from the decision of a county court refusing to
reduce the valuation of his land made by a commissioner under
said act, and cannot maintain a writ of error from this court to
the decision of a circuit court upon such appeal.

Syl. Pt. 1, Mackin v. Taylor Cnty. Ct., 38 W. Va. 338, 18 S.E. 632 (1893). In Mackin, we

found that “[t]he case before the lower courts was not a suit. The county court was not a

party. The state and the taxpayer were the only parties, in any sense.” Id., 38 W. Va. 338,

350, 18 S.E. 632, 636. Additionally, the text of Chapter 36, section 7 of the Acts of 1891

examined in Mackin provided:

The right of appeal from [an order correcting the assessments]
made by the county court shall lie to the circuit court, and may
be taken either by the applicant or the state . . . the party
desiring to take such appeal shall have the evidence taken at
the hearing of the application certified by the county court.
…
[A]ny order or judgment made upon such application shall
show that the prosecuting attorney was present and defended
the interest of the state.

1891 W. Va. Acts, c. 36 § 7, eff. Feb. 21, 1891.

Based upon the similar language in the 1891 enactment to that contained in

the statutes at issue in this appeal, we conclude that the process for an assessment appeal

to circuit court as it existed when we decided Mackin is substantially similar to the modern

19
process. However, as we also noted above, there is a long history since Mackin of county

commissions/councils being named as parties in these cases. Nonetheless, it is the Assessor

who maintains the land books of a county, initially determines the value of the assessments,

and presumably defends his or her assessments before Board. Therefore, the Assessor

should likewise be named as a party to an appeal regarding the assessments. The Board,

on the other hand, is the deliberative body whose decision is being appealed. Accordingly,

in order to clarify what has developed into an inconsistent practice in such appeals, in which

assessors are named in some appeals and county commissions or councils, serving as the

assessment appeal Board, being named in others, we now hold that a party defending an

assessment before a Board of Assessment Appeals is the appropriate party, and thus a

necessary party, to an appeal of such assessment to the circuit court.

In the case at bar, however, there is no evidence in the record that indicates

that Petitioner raised before the circuit court the issue of whether the Assessor was an

indispensable party to the proceeding filed in circuit court. As we have previously stated:

This Court’s general rule is that nonjurisdictional
questions not raised at the circuit court level will not be
considered to the first time on appeal. Whitlow v. Bd. of Educ.
of Kanawha County, 190 W.Va. 223, 226, 438 S.E.2d 15, 18
(1993).

The rationale behind this rule is that when an issue has
not been raised below, the facts underlying that issue will
not have been developed in such a way so that a
disposition can be made on appeal. Moreover, we
consider the element of fairness. When a case has
proceeded to its ultimate resolution below, it is
manifestly unfair for a party to raise new issues on

20
 appeal. Finally, there is also a need to have the issue
refined, developed, and adjudicated by the trial court, so
that we may have the benefit of its wisdom.

Id. at 226, 438 S.E.2d at 18.

State v. Jessie, 225 W. Va. 21, 27, 689 S.E.2d 21, 27 (2009).

During oral argument, counsel for the Petitioner argued that the issue was

jurisdictional and, thus not waived. However, the jurisdictional issue raised for the first

time at oral argument is one of personal jurisdiction, rather than one of subject matter

jurisdiction. There is no question this Court (and the circuit court) had jurisdiction over

the subject matter. In such cases, this Court has said, “‘[j]urisdiction of the person may be

conferred by consent, ... jurisdiction of the subject-matter of litigation must exist as a matter

of law.’ State ex rel. Hammond v. Worrell, 144 W.Va. 83, 90, 106 S.E.2d 521, 525

(1958), overruled on other grounds as stated in Patterson v. Patterson, 167 W.Va. 1, 277

S.E.2d 709 (1981).” Ellithorp v. Ellithorp, 212 W. Va. 484, 490, 575 S.E.2d 94, 100

(2002). Accordingly, by not raising the issue before the circuit court, Petitioner consented

to its jurisdiction, thereby waiving any objection to the Assessor not being named as a party

to this action.

B. Validity of Assessments

Beginning our discussion of the assessments made by the Assessor, we first

state the provisions of our Constitution applicable to ad valorem property taxes provide

that, “taxation shall be equal and uniform throughout the state, and all property, both real

21
and personal, shall be taxed in proportion to its value to be ascertained as directed by

law,” W.Va. CONST. art. X, § 1. However, under Article X, Section 1b of our Constitution,

the assessed value of such property is capped at 60% of its value, less than its true and

actual value. See, W. Va. CONST. art. X, §1b; See also Kline v. McCloud, 174 W. Va.

369, 377, 326 S.E.2d 715, 724 (1984) (“assessed values, which are recognized

under Section 1b of Article X are less than true and actual values.”). Flowing from that

Constitutional mandate, our Legislature has codified the definition of “true and actual

value:”

“Value”, “market value” and “true and actual value” shall have
the same meaning and shall mean the price at or for which a
particular parcel or species of property would sell if it were
sold to a willing buyer by a willing seller in an arm’s length
transaction without either the buyer or the seller being under
any compulsion to buy or sell.

W. Va. Code § 11-1A-3(i) (1986).

Further, to ensure that taxation is “equal and uniform throughout the state,”

our Legislature directs county assessors to “appraise all real and personal property in their

jurisdiction at fair market value … utilize[ing] the procedures and methodologies

established by the Property Valuation Training and Procedures Commission and the

22
valuation system established by the Tax Commissioner.” W. Va. Code § 11-1C-7(a)

(2017). 20

When valuing real property, assessors are directed to “consider and use

where applicable, three (3) generally accepted approaches to value: (A) cost, (B) income,

and (C) market.” 110 W. Va. C.S.R. 1P-3.2.1. Guidance regarding each of these methods

is contained in the regulations:

3.2.1.1. Cost approach. - To determine fair market value under
this approach, replacement cost of the improvements is
reduced by the amount of accrued depreciation and added to an
estimated land value. In applying the cost approach, the Tax
Commissioner shall consider three (3) types of depreciation:
physical depreciation, functional obsolescence, and economic
obsolescence.

3.2.1.2. Income approach. - A property’s present worth is
directly related to its ability to produce an income over the life

20
Assessment data is collected by county assessors and shared with the tax
commissioner. See W. Va. Code § 11-1A-12 (1991). This information is gathered and
placed into a computer database:
All county assessors in West Virginia perform
Computer-Assisted Mass Appraisal (“CAMA”) and input data
collected during their assessment functions into a statewide
Integrated Assessment System (“IAS”) maintained and
administered by the Tax Commissioner. The Tax
Commissioner has access to the information in the IAS (and
therefore the CAMA files) for purposes of supervision,
auditing, and oversight; however, only the county assessors
can input or change the data therein.

Hurlbert v. Matkovich, 233 W. Va. 583, 587, 760 S.E.2d 152, 156 (2014). Thus,
information gathered by assessors through CAMA is inputted into IAS. IAS fulfills the
duty imposed upon the tax commissioner to “devise and cause to be established a statewide
electronic data processing system network, to facilitate administration of the ad valorem
property tax on real and personal property, through the timely sharing of property tax
information among county assessors and the tax commissioner.” W. Va. Code § 11-1A-
21 (1983).
23
 of the property. The selection of an overall capitalization rate
shall be derived from current available market data by dividing
annual net income by the current selling price of comparable
properties. The present fair market value of the property shall
then be determined by dividing the annual economic rent by
the capitalization rate.

3.2.1.3. Market approach. - The Tax Commissioner shall apply
the market approach by considering the selling prices of
comparable properties.

110 W. Va. C.S.R. § 1P-3.2.1.1-3.2.1.3. “Where the cost approach to assessments is

concerned, the assessor must ‘consider’ three types of depreciation: physical deterioration,

functional obsolescence, and economic obsolescence.” Lee Trace, LLC v. Berkeley Cnty.

Council, No. 16-0239, 2017 WL 1535075, at *6 (W. Va. Apr. 28, 2017) (memorandum

decision). Interpreting this requirement, we have stated it

[D]oes not require the Tax Commissioner to make any
adjustment to the valuations made regarding property because
of physical deterioration, functional obsolescence and
economic obsolescence. Rather, all that is required of the Tax
Commissioner in applying the cost approach to valuation is
that the Tax Commissioner will think about or contemplate
three types of depreciation: physical deterioration, functional
obsolescence, and economic obsolescence.

Century Aluminum of W. Virginia, Inc. v. Jackson Cnty. Comm’n, 229 W. Va. 215, 224-

25, 728 S.E.2d 99, 108-09 (2012) (citations omitted). This regulation confers broad

discretion to the Assessor:

Title 110, Series 1P of the West Virginia Code of State
Rules confers upon the State Tax Commissioner 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.

24
Syl. Pt. 5, In re Assessment Against American Bituminous Power Partners, L.P., 208 W.

Va. 250, 539 S.E.2d 757 (2000).

The Assessor ultimately developed the cost approach to determine value of

the Taxpayers’ properties. In preparing the assessments, the Assessor sought and was

unable to obtain necessary data to develop either the income or market approaches. “When

possible, the Tax Commissioner should use the most accurate form of appraisal, but

because of the difficulty in obtaining necessary data from the taxpayer, or due to the lack

of comparable commercial properties or industrial properties, the choice between

alternative appraisal methods may be limited.” 110 W. Va. C.S.R. 1P-3.2.2.a. In such

cases, this Court has previously concluded that “[a]n 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, LLC v. Raynes, 232 W. Va. 183, 193, 751

S.E.2d 703, 713 (2013). In Lee Trace, the Assessor testified “that she could not develop a

capitalization rate to do an income approach” because she did not have the data necessary

to make the calculation. Id., 232 W. Va. at 193, 751 S.E.2d at 713.

In the matter before us, the Assessor’s commercial appraiser testified before

the Board that he did not have enough data to develop either the income approach or the

sales comparison approach. The Assessor then sent out questionnaires to attempt to collect

the necessary data. This effort did not generate the data needed to consider either the

income or the sales comparison approaches. Thus, because of this lack of data, the

25
Assessor developed the only approach available to him – the cost approach to value. In so

doing, he was required to “consider” physical deterioration, functional obsolescence and

economic obsolescence. It is clear from the record that the Assessor, through its

commercial appraiser, Mr. Streett, considered such factors. With regard to the Government

Properties case, Mr. Streett, the Assessor’s commercial appraiser, testified that “functional

obsolescence and external obsolescence … were taken into consideration. Based upon the

definition of functional obsolescence and economic obsolescence, our office did not

believe that any adjustments were needed other than normal depreciation on

improvement.” Similarly, in the Martinsburg IRS OC case, Streett stated, “[b]ased upon

the definition of functional obsolescence and economic obsolescence, the Berkeley County

Assessor’s Office does not believe that any adjustments are needed other than the normal

depreciation on the improvement.” While the Assessor was required to consider

obsolescence, there is no requirement that the Assessor apply such factors in the same

manner that the Taxpayers’ appraisers urge.

Our law demands that assessments are presumed correct and the

Taxpayers clearly did not meet their burden before the circuit court to show their

assessments were erroneous. We have previously found, in Stone Brooke Ltd. P’ship v.

Sisinni, 224 W. Va. 691, 688 S.E.2d 300 (2009), that appraisals developed using the cost

approach, when supported by substantial evidence, should be upheld: “[I]t is clear that the

Assessors’ appraisals, all of which were conducted pursuant to the cost approach, were

supported by substantial evidence and, thus, that the ad valorem tax assessments based

26
upon such appraisals were not plainly wrong.” Id., 224 W. Va. at 701, 688 S.E.2d at 310.

The Taxpayers merely offered an alternative value for the properties in question, using

opposing methodologies not applied by, and perhaps unavailable to the Assessor. While

the Taxpayers certainly had the right to propose their alternative method of assessing the

property, such alternative recommendation is insufficient to prove that the Assessor’s

valuations were not supported by substantial evidence or were otherwise in contravention

of any regulation, statute, or constitutional provision. Thus, the circuit court erred in

reversing the decision of the Board.

IV. CONCLUSION

For the foregoing reasons, we reverse and remand these matters to the circuit

court to issue an order affirming the Board.

Reversed and remanded.

27