2021 UT App 4
THE UTAH COURT OF APPEALS
PATIENCE LLC,
Petitioner,
v.
SALT LAKE COUNTY BOARD OF EQUALIZATION AND
STATE TAX COMMISSION,
Respondents.
Opinion
No. 20190623‐CA
Filed January 14, 2021
Original Proceeding in this Court
Jaryl L. Rencher and Michael J. Collins, Attorneys
for Petitioner
Simarjit S. Gill, Timothy A. Bodily, and LaShel Shaw,
Attorneys for Respondent Salt Lake County
Board of Equalization
Sean D. Reyes, Laron J. Lind, and Stanford E. Purser,
Attorneys for Respondent State Tax Commission
JUDGE JILL M. POHLMAN authored this Opinion, in which
JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS concurred.
POHLMAN, Judge:
¶1 Patience LLC seeks review of a final decision of the State
Tax Commission denying Patience an adjustment of the fair
market valuation of its property. The Salt Lake County
Assessor’s Office (the County) valued the subject property at
$885,890. Patience appealed the County’s assessment, arguing
for a lower valuation based on the sales prices and valuations of
properties it believed were comparable. After a formal hearing,
the Commission sustained the original valuation. Upon review,
we decline to disturb the Commission’s decision.
Patience LLC v. Salt Lake County Board of Equalization
BACKGROUND
¶2 In 2017, a local law firm was in search of new downtown
office space after a recent downsize. In addition to needing less
space, the firm’s existing office lease was expiring, and a renewal
would mean an increase in rent.
¶3 A principal of the law firm hired a commercial real estate
agent to help the firm find a suitable property. According to the
agent, “there were not a lot of listings at the time . . . near
downtown that were suitable,” but the firm found one that met
its needs—the subject property located at 460–462 South 400 East
in Salt Lake City. On May 31, 2017, Patience, a related entity,
purchased the property for the law firm’s use. It paid $1,242,824.1
¶4 The property is 0.23 acres of land improved with a
building originally constructed as a residence in 1905. The
residence was subsequently converted to office space, a remodel
known as an “office conversion.” The County considered the
building to “be of good grade and in good condition.” County
records showed that it has 4,484 square feet above grade area,
1,394 square feet of office area finished in the basement, and 639
square feet of basement storage area. The finished office area on
the County’s records totaled 5,878 square feet.
¶5 With a lien date of January 1, 2017, the County valued the
property for tax purposes at $885,890. Unhappy with this
valuation, Patience appealed the assessment to the Salt Lake
County Board of Equalization (the Board). Patience submitted
sales data of four other properties that it deemed comparable
and argued for a valuation of $550,000. The Board was not
persuaded, finding that the properties Patience identified were
different “in size, location, year built and use type when
compared to the subject” property and “would require
1. The property had sold for $727,500 in 2011.
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Patience LLC v. Salt Lake County Board of Equalization
significant adjustments to” the sales data to draw any reliable
comparisons. The Board thus concluded that the evidence
Patience submitted was “insufficient to provide a sound
evidentiary basis for an alternative value” and sustained the
original valuation.
¶6 Patience appealed the Board’s determination to the
Commission, again arguing for a valuation of $550,000 and
offering two primary reasons why it believed the County’s
valuation of $885,890 was too high.
¶7 First, Patience contended that the County overvalued the
property based on a faulty assessment of its fair market value. In
addition to claiming that the County used the wrong square
footage, Patience urged the Commission to disregard the 2017
transaction in which it had paid $1.2 million for the property,
and it asked the Commission to instead rely on the sales data of
three other properties that it claimed were comparable. Patience
argued that its purchase price was artificially high because it
purchased the property under duress. Patience also argued that
the value of the property had been diminished by issues arising
out of the displacement of the homeless population from other
areas in the city as part of Operation Rio Grande.2 Finally,
Patience provided the sales data of three other properties in the
downtown area to support a lower market value for the subject
property. The sale prices of the other three properties were
substantially lower than the price Patience paid for the subject
property.
¶8 Second, Patience argued for an equalization adjustment to
the County’s valuation of the property, claiming that the
2. Operation Rio Grande was an effort launched in August 2017
to address homelessness in the Salt Lake City area. See
Operation Rio Grande, https://operationriogrande.utah.gov/ [https
://perma.cc/EM8W‐VBTK].
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Patience LLC v. Salt Lake County Board of Equalization
valuation deviated more than 5% from the assessed value of
comparable properties. Patience identified seven different
properties that it believed were comparable to the subject
property. Each assessed value of the other properties deviated
more than 5% from the subject property’s valuation.
¶9 At the hearing before the Commission, three witnesses
testified for Patience. The first, a commercial real estate agent
(Realtor), testified that she believed the seven properties
Patience identified in support of its equalization argument were
“sufficiently comparable” to the subject property. She also
opined that the County’s valuation of the subject property
“[s]eems to be very high.”
¶10 The second witness, a law firm employee, testified that
beginning about August 2017, employees “would come to work
in the morning and find individuals camping on their property
with tents or tarps and sleeping on the back porch of the
building.” She explained that they “started to see almost daily
problems with homeless individuals and their possessions on
the property.”
¶11 The third witness for Patience, the law firm’s office
manager, testified that the firm had to find new office space “in a
quick manner” because the firm’s rent was going to increase if it
renewed the lease in its prior location.
¶12 The Board, for its part, supported its position with the
expert testimony of a real estate appraiser (Appraiser).3
3. Patience complains that Appraiser was not qualified as an
expert. But Patience did not object to Appraiser’s qualifications
or to her providing expert opinion testimony before the
Commission. Thus, Patience has forfeited its objection to
Appraiser as an expert witness. See Decker Lake Ventures, LLC v.
Utah State Tax Comm’n, 2015 UT 66, ¶ 7 n.2, 356 P.3d 1243
(continued…)
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Patience LLC v. Salt Lake County Board of Equalization
Appraiser testified that the properties identified by Patience
were not truly comparable to the subject property. A few of the
properties were office conversions, which Appraiser explained
are assessed at a higher value because buyers are “attract[ed] to
older buildings,” “[t]hey tend to be more unique,” and they
“tend to be very well constructed.” The Board further argued
that the properties Patience identified were not comparable
because they were in poorer condition and of a lower grade than
the subject property.
¶13 The Board also offered nine comparison properties of its
own to rebut Patience’s contentions that the original valuation
was too high and that it should be equalized to a lower value.
The comparables the Board submitted had valuations “right in
line” with the property’s valuation. On cross‐examination,
Appraiser conceded that two of the Board’s comparables
contained inaccurate basement square footage but had accurate
above‐grade square footage.
¶14 After taking the matter under advisement, the
Commission issued a written decision sustaining the County’s
original valuation of $885,890. Ultimately, the Commission
found that the properties Patience identified were not “actually
comparable” to the subject property because they were either
“not in as good of condition,” “were considered to be of a lower
grade,” or were not office conversions. Additionally, the
Commission did not credit Patience’s claim that the subject
property’s purchase price exceeded its fair market value, stating
that “insufficient evidence of duress was offered to support the
argument that a law firm would pay twice the market value
(…continued)
(concluding that the taxpayer forfeited its right to challenge the
County’s characterization of its witness as an expert where the
taxpayer did not object to the witness’s proffered opinion
testimony below).
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Patience LLC v. Salt Lake County Board of Equalization
rather than enter into a new lease or find an office building to
purchase in a different location.” The Commission also noted
that the homeless activity on and around the property “appears
to be a post lien date issue” and thus could not affect the
assessment of fair market value from an earlier time.
¶15 Patience sought reconsideration of the Commission’s
decision, arguing that there was no support for its finding that
office conversion properties are valued at higher rates and that
Patience “provided much more accurate comparable properties”
than the Board provided. Patience also submitted “newly
discovered evidence” of seven other allegedly comparable
properties, all of which were office conversions.
¶16 The Commission denied Patience’s motion. The
Commission was unpersuaded by Patience’s arguments and
declined to consider the additional properties because Patience
“should have submitted [them] in the first place.”4
4. Patience refers to the seven additional properties in its
opening brief, and it relied on them in support of its argument
on review. This is improper. The Commission rejected the
evidence as untimely and Patience did not challenge that
determination in its opening brief. Pilcher v. State, 663 P.2d 450,
453 (Utah 1983) (“Matters not admitted in evidence before the
trier of fact will not be considered [on appeal].”). And while
Patience contends in its reply brief that the Commission “had a
duty to consider the comparables in the motion for
reconsideration,” this argument is both untimely and
unsupported by authority and reasoned analysis. See Brown v.
Glover, 2000 UT 89, ¶ 23, 16 P.3d 540 (“Generally, issues raised
by an appellant in the reply brief that were not presented in the
opening brief are considered waived and will not be considered
by the appellate court.”); Utah R. App. P. 24(a)(8) (“The
argument must explain, with reasoned analysis supported by
(continued…)
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Patience LLC v. Salt Lake County Board of Equalization
ISSUES AND STANDARDS OF REVIEW
¶17 On review, Patience largely repeats the arguments it
made before the Commission. First, Patience contends that the
Commission erred in sustaining the subject property’s assessed
value based on market value evidence. “The Commission’s
determination of the fair market value of real estate is a factual
question.” Mallinckrodt v. Salt Lake County, 1999 UT 66, ¶ 7, 983
P.2d 566. “We grant the Commission’s valuation deference and
affirm the valuation if there is substantial evidence to support it
and the Commission has applied correct standards.” Id.; see also
Utah Code Ann. § 59‐1‐610(1)(a) (LexisNexis 2018). “Moreover,
we conduct our review in light of the burdens the taxpayer
carries before the Commission, where the protesting taxpayer is
required not only to show substantial error or impropriety in the
assessment, but also to provide a sound evidentiary basis upon
which the Commission could adopt a lower valuation.” Utah Ry.
Co. v. Utah State Tax Comm’n, 2000 UT 49, ¶ 6, 5 P.3d 652 (cleaned
up).
¶18 Second, Patience contends that the Commission erred by
not adjusting the valuation of the property “to reflect a value
equalized with the assessed value of other comparable
properties.” This is a mixed determination, requiring “the
application of a legal standard to a unique set of facts.” Decker
Lake Ventures, LLC v. Utah State Tax Comm’n, 2015 UT 66, ¶ 15,
356 P.3d 1243. As such, the Commission’s determination “merits
substantial deference, as it is both fact‐intensive and unlikely to
result in the development of appellate precedent necessary to
guide parties in future cases.” Id. (cleaned up).
(…continued)
citations to legal authority and the record, why the party should
prevail on appeal.”).
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Patience LLC v. Salt Lake County Board of Equalization
ANALYSIS
I. Fair Market Value
¶19 “The Commission is required to value property at fair
market value.” Mallinckrodt v. Salt Lake County, 1999 UT 66, ¶ 8,
983 P.2d 566; see also Utah Code Ann. § 59‐2‐103(1) (LexisNexis
2018). Fair market value is “the amount at which property would
change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both
having reasonable knowledge of the relevant facts.” Utah Code
Ann. § 59‐2‐102(13) (LexisNexis Supp. 2016).
¶20 The County assessed the subject property’s fair market
value for tax purposes at $885,890. Patience contends that the
Commission erred in sustaining the County’s assessment,
claiming that the property’s $1.2 million purchase price, “or
anywhere near that level, does not represent [its] fair market
value.” Patience argues, based on the sales data for three other
properties, that the Commission instead should have adopted a
valuation of $651,908.78. We disagree.
¶21 First, we owe the Commission’s fair market valuation
deference, and Patience has not shown that there is a lack of
substantial evidence to support it. See Mallinckrodt, 1999 UT 66,
¶ 7. Before the Commission, Patience conceded that it purchased
the subject property in May 2017 for more than $1.2 million—
nearly $350,000 more than the assessed value. Still, it argued that
the Commission should not have given weight to that figure,
claiming that it does not accurately represent the property’s fair
market value.
¶22 Primarily, Patience argued that the purchase was made
under “emergency circumstances” and that it was “forced to
overpay nearly twice the fair market value of the property.” In
other words, Patience argued that the price it paid exceeded fair
market value by more than half a million dollars because it was
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Patience LLC v. Salt Lake County Board of Equalization
under compulsion to buy. We discern no error in the
Commission’s rejection of this claim.
¶23 The Commission found that while there was some
testimony that Patience “was highly motivated” to find a
property, there was “insufficient evidence of duress” to support
Patience’s argument that it, or its affiliated law firm, “would pay
twice the market value rather than enter into a new lease or find
an office building to purchase in a different location.” The record
supports this finding. The law firm’s office manager testified
that the firm had to find new office space “in a quick manner”
because its rent was going to increase, but she could not speak to
the terms of the lease or how much more the firm would have to
pay. Similarly, Realtor testified that there were not many
suitable listings, but she offered no support for Patience’s claim
that its options were so limited that it “was forced” to pay twice
the property’s fair market value. Further, Patience has shown no
error in the Commission’s determination that limited inventory
is a factor that increases a property’s fair market value, “causing
a willing buyer to pay more for location or style of property than
would be measurable by mere price per square foot or some
other nominal measure.”5
¶24 Next, Patience argued that the valuation was inflated
because the property was distressed due to the displacement of
the city’s homeless population. The Commission rejected this
argument because the issue “was not known or knowable on the
5. Below and on review, Patience does not distinguish between
itself and the law firm for purposes of describing this alleged
duress. And we have doubts about whether Patience, an entity
separate from the law firm, could establish duress based on the
needs of the law firm. But we need not resolve these doubts
because Patience has not shown sufficient evidence of duress by
either entity to support its claim that it overpaid for the
property.
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Patience LLC v. Salt Lake County Board of Equalization
lien date of January 1, 2017, or on the purchase date in May
2017,” and thus it could not affect the fair market valuation.
Again, Patience has not shown error in the Commission’s
finding. Patience concedes that Operation Rio Grande, which
caused the displacement, “was launched on August 14, 2017.”
And the law firm’s employee confirmed that when the firm first
moved in, she did not notice issues with the homeless
population, but that she “started noticing problems” only in the
“late summer, early fall 2017”—months after the valuation date.
Thus, the Commission did not err in finding that these issues
occurring months after the lien date did not affect its fair market
valuation.
¶25 Patience also argued that its three comparable sales
demonstrated that the County’s assessed value does not reflect
the subject property’s fair market value. Patience claims that the
Commission erred in not giving greater weight to these
properties, arguing that all three are commercial properties and
have similar square footage as the subject property. But in
making its argument, Patience overlooks the Commission’s
stated rationale for dismissing the properties as not truly
comparable. The Commission explained that one of the
properties was an office condominium, “which is very
dissimilar” to the office conversion property Patience owned.
And the two office conversion properties “were not in as good of
condition as the subject property.” Because Patience has not
engaged with the Commission’s reasoning, Patience has not
persuaded us that the Commission erred. See Bad Ass Coffee Co. of
Hawaii Inc. v. Royal Aloha Int’l LLC, 2020 UT App 122, ¶ 55, 473
P.3d 624 (rejecting an argument because the parties asserting
error “did not address the district court’s reasoning and explain
why it was wrong in their opening brief”).6
6. Patience also contends that the County’s fair market valuation
was inflated based on an alleged miscalculation of the property’s
(continued…)
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Patience LLC v. Salt Lake County Board of Equalization
¶26 Finally, Patience’s challenge to the Commission’s fair
market valuation also fails for the alternative reason that
Patience has not demonstrated that it provided a sound
evidentiary basis for the adoption of its lower valuation.
Fraughton v. Utah State Tax Comm’n, 2019 UT App 6, ¶ 16, 438
P.3d 961 (“In addition to showing that the Commission made an
error in arriving at the value of the Property, [the taxpayer] must
also provide a sound evidentiary basis for the Commission to
adopt a lower value.”). Before this court, Patience argues that the
Commission should have adopted a valuation of $651,908.78.
But Patience did not advocate for that valuation before the Board
or the Commission. Instead, Patience argued that the three
comparables it identified supported a fair market valuation of
$550,000.7 Having advocated for one valuation before the
(…continued)
square footage. Patience claims that the County “calculated the
property as 6,571 square feet, when it was purchased with
rentable square footage of 5,842 square feet.” Patience does not
cite any evidence in the record to support its claim about the
County’s calculation, and it is contrary to the Commission’s
findings that the finished office area on the County’s records
totaled 5,878 square feet. And while the Commission noted the
difference of 36 square feet between the two figures, it explained
that Patience’s evidence to support its calculation did not show
how the size was calculated. Under these circumstances,
Patience has not demonstrated that the difference in square
footage resulted in a “substantial error” in the County’s
valuation. See Utah Ry. Co. v. Utah State Tax Comm’n, 2000 UT 49,
¶ 6, 5 P.3d 652 (cleaned up).
7. In truth, Patience proposed that the Commission adopt a fair
market valuation of less than $500,000. However, the
Commission’s findings state that Patience “requested a
reduction to $550,000.” Because the Commission’s findings on
this point are unchallenged, we consider $550,000 to be the
(continued…)
20190623‐CA 11 2021 UT App 4
Patience LLC v. Salt Lake County Board of Equalization
Commission, Patience cannot demonstrate on review that the
Commission erred in not adopting an entirely different
valuation. Cf. Oseguera v. State, 2014 UT 31, ¶ 10, 332 P.3d 963
(“[A] party that makes an objection based on one ground does
not preserve any alternative grounds for objection for appeal.”).
¶27 In sum, we conclude that there was substantial evidence
to support the Commission’s fair market value determination.
The purchase price of the property and the comparable
properties the Board identified support the County’s original
assessment. Further, we discern no error in the Commission’s
rejection of Patience’s claims that it purchased the property
under duress and that the property’s fair market value was
negatively affected by the displacement of the city’s homeless
population. Patience’s challenge also fails because it did not
provide a sound evidentiary basis for the Commission to adopt a
lower valuation of $550,000.
II. Equalization
¶28 The Utah Constitution states that “all tangible property in
the State . . . shall be . . . taxed at a uniform and equal rate” in
proportion to its fair market value. Utah Const. art. XIII, § 2, cl. 1.
Consistent with this constitutional mandate, a property owner
may seek adjustment of a property tax evaluation if the
assessment “stands apart from a group of undervalued
comparable properties.” See Mountain Ranch Estates v. Utah State
Tax Comm’n, 2004 UT 86, ¶ 15, 100 P.3d 1206. This is a process
known as equalization.
¶29 The Commission must adjust a property valuation “to
reflect a value equalized with the assessed value of other
(…continued)
relevant figure and note that the difference is immaterial to our
decision.
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Patience LLC v. Salt Lake County Board of Equalization
comparable properties” if two conditions are met: (1) a taxpayer
raises the issue of equalization, and (2) “the commission
determines that the property that is the subject of the appeal
deviates in value plus or minus 5% from the assessed value of
comparable properties.” See Utah Code Ann. § 59‐2‐1006(5)
(LexisNexis 2018). A taxpayer seeking equalization bears the
burden of identifying comparable properties that deviate more
than 5% from the valuation of the property. See Mountain Ranch
Estates, 2004 UT 86, ¶ 10; see also First Nat’l Bank of Nephi v.
Christensen, 118 P. 778, 781 (Utah 1911) (“The burden to show the
inequality was on the [taxpayer].”).
¶30 Patience contends that the Commission erred in not
reducing its property tax valuation to $541,368.79 through
equalization. Patience argues that the Commission “erroneously
interpreted comparable properties to mean that any comparable
property . . . had to be an office conversion” and thus it
“completely ignored” the seven comparison properties Patience
identified with valuations that deviated by more than 5% from
the subject property’s assessed value. We are not persuaded.
¶31 Contrary to Patience’s claims, the Commission did not
categorically conclude that comparable properties had to be
office conversions, nor did it ignore the properties Patience
identified. True, the Commission noted that most of Patience’s
comparables were office buildings or office condominiums, not
office conversions. But that categorization was not dispositive.
The Commission evaluated the other properties and found that
they were not “actually comparable” because they all were in
poorer condition than the subject property and most were of a
relatively lower construction grade.
¶32 Further, we cannot fault the Commission for finding that
Patience’s properties were not comparable where the Board
rebutted the evidence by identifying other office conversion
properties in the same neighborhood as the subject property
with similar valuations. Appraiser testified that there is a
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Patience LLC v. Salt Lake County Board of Equalization
disparity between the value of office conversions and traditional
offices because there is an “attraction to older buildings,” which
“tend to be more unique,” “tend to be very well constructed,”
and will usually have a longer economic life remaining. And
Realtor agreed that office conversions are “different types of
buildings” than other office buildings and “probably sell for a
different price per square foot.”. Thus, the Commission accepted
the experts’ assertions that the classification of buildings affects
property valuations, and on that basis it determined that
Patience had not met its burden of demonstrating that the
subject property deviates in value by more than 5% from the
assessed value of comparable properties. This is a mixed
determination that merits substantial deference, and on this
record we decline to disturb the Commission’s determination.
See Decker Lake Ventures, LLC v. Utah State Tax Comm’n, 2015 UT
66, ¶ 15, 356 P.3d 1243.
CONCLUSION
¶33 The Commission did not err in affirming the assessed fair
market value of the subject property because Patience did not
show a substantial error in the valuation or provide a sound
evidentiary basis upon which the Commission could adopt its
lower valuation. Nor did the Commission err in rejecting
Patience’s request to reduce the subject property’s valuation
based on equalization based on its determination that Patience
did not identify comparable properties with assessed values that
deviated more than 5% from the subject property’s valuation.
We therefore decline to disturb the Commission’s decision.
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