Appeal from Circuit Cour of Adams County No. 98MR66 Honorable Dennis K. Cashman, Judge Presiding.
The opinion of the court was delivered by: Justice Steigmann
Plaintiffs Ruth Peacock, Pierce Farms, Inc. (Pierce Farms), Stephen Acres, Inc. (Stephen Acres), Courtney Stephens, Margaret Stephens, Raymond Lippert, and General Bank Trust (General Bank) appealed their property tax assessments to the Illinois Property Tax Appeal Board (Board). The Board consolidated plaintiffs' appeals for hearing purposes. In July 1998, the Board granted partial relief to Stephen Acres and General Bank but otherwise denied plaintiffs' appeals.
Later in July 1998, plaintiffs filed a complaint in the circuit court, seeking administrative review of the Board's decision, and in addition to the Board, named as defendants the following parties: Max Coffey, as Chairman of the Board; the County of Adams, in and for the State of Illinois; the Adams County Board of Review (Review Board); the Board of Education of Community Unit School District No. 3, Adams County, Illinois; the Board of Education of Community Unit School District No. 337, Counties of Hancock, Adams, and Schuyler, Illinois; and the Board of Education of Community Unit School District No. 4, Counties of Adams and Hancock, Illinois.
In November 1999, the circuit court dismissed plaintiffs' complaint, pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 1998)). Plaintiffs appealed, and this court reversed and remanded. Peacock v. Property Tax Appeal Board, No. 4-00-0162 (November 30, 2000) (unpublished order under Supreme Court Rule 23).
On remand, following hearings in March and June 2002, the circuit court reviewed the Board's decisions and affirmed them.
Plaintiffs appeal, arguing that the circuit court's judgment was against the manifest weight of the evidence. We affirm in part, reverse in part, and remand with directions.
This consolidated case involves the following property tax appeals: (1) Courtney and Margaret appealed the property taxes on their home in Golden (the Stephens home) for the years 1987 through 1997; (2) Stephen Acres appealed the assessments for improvements on its farm property (the Stephen Acres farm) for the years 1987 through 1997; (3) Peacock appealed the property taxes on her home in Quincy (the Peacock home) for the years 1987 through 1990; (4) Pierce Farms appealed the assessments for improvements on its farm property (the Pierce farm) for the years 1991 and 1992; (5) General Bank appealed the assessments for improvements on its three properties (the Bank properties) for the years 1986 through 1990; and (6) Lippert appealed the property taxes on the Bank properties for 1985, the year in which he owned them (collectively, the subject properties). Specifically, plaintiffs alleged that (1) their properties and improvements thereon were not assessed at the same percentage proportion to fair cash value as other properties in Adams County; and (2) the farm outbuildings on plaintiffs' properties were not assessed on the basis of their current use contribution to the productivity of the farms, as is required under section 10-140 of the Property Tax Code (35 ILCS 200/10-140 (West 1998)).
In May 1998, a Board hearing officer conducted a hearing on plaintiffs' consolidated cases. Because the parties are familiar with the evidence presented at the May 1998 hearing, we review it only to the extent necessary to put plaintiffs' arguments in context.
A. Assessment Ratio Evidence
William Cornwell testified that he had been a licensed real estate broker since 1963 and was an experienced appraiser. Cornwell appraised all of the subject properties and the properties that he described as "comparables." The comparables had been chosen by Courtney.
Evidence showed that Courtney used the comparables to create a document entitled "Appellants' Assessment Ratio Studies," which was admitted into evidence. Courtney's study covered the years 1985 through 1997 and included between 9 and 19 comparables for each year. The study showed the fair market value of the comparables for each year based on either Cornwell's appraisals or a recent sale of the property if one was available. The study also showed the assessed valuations for each of the comparables. Under a column titled "ratio," the study purported to show the percentage of fair market value at which each property was assessed. The study also showed an average percentage for all of the comparables.
Courtney testified as follows regarding how he chose the comparables used in his study: "I just went through the records of the assessor's office and chose them based on the figures I found there." He acknowledged that he did not randomly select the comparables, but chose specific properties. Courtney's only criteria for selecting a property to be used as a comparable was that it had been assessed low. He did not consider whether the properties to be used as comparables were similar to the subject properties.
According to Courtney's study, the ratio of assessment to estimated market value of the comparables for the relevant time period averaged from 7.88% to 18.22%. For the same time period, the ratio of assessment to estimated market value of the subject properties ranged from 32.21% to 77.50%. (Pursuant to section 9-145 of the Property Tax Code, property shall be assessed at 33 1/3% of its fair cash value. 35 ILCS 200/9-145 (West 2000).)
Georgene Zimmerman testified that she had been the Adams County supervisor of assessments since 1990 and the deputy supervisor of assessments for many years before that. Zimmerman created her own assessment ratio study by taking all "usable sales" that took place in the multi-township assessment district of Houston and Northeast Townships and comparing the sales prices to the properties' assessed values. "Usable sales" were those that were arm's length, and were not executor's deeds, quitclaim deeds, splits, or farmland sales. Zimmerman summarized her data in a manner similar to that used by Courtney. Her chart included some of Courtney's comparables in addition to others; she used all of the available sales for the given year. Zimmerman did not choose only the highest sales.
Zimmerman further testified that on Courtney's 1997 chart, in three instances, the sale price used was for a 1997 sale of a residence, but the assessment for that year was for a lot only. Thus, the numbers showed a low percentage ratio assessment. In a separate instance, the assessment did not reflect what was actually sold due to a split of existing parcels. In another instance, one of Courtney's comparables was a "10-30" assessment, which reflects an assessment rate temporarily granted to a developer until a lot is sold or developed. Such assessments are "special" and not based on fair market value.
B. Evidence on the Valuation of Farm Outbuildings
Cornwell testified that he appraised the farm outbuildings on the subject properties by determining the value of their contribution to farm productivity. He determined the value of farm buildings to farm productivity based on his experience and his observations of the subject properties. He described his relevant experience as follows: He was raised on a farm and had owned farms. After he went into the real estate business, he acquired and operated several farms that had farm outbuildings. Cornwell said he ascertained the value of the properties merely by looking at them and deciding what they were worth based on his experience.
Dennis Grimm testified that he had been a licensed real estate broker in Illinois since 1976, and Quincy's deputy tax assessor since 1978. Grimm explained how he appraised the farm buildings on the Stephen Acres farm as follows: "Well, having not a lot of experience in that sort of thing, what I did was I drew on the experience of others that are in that business, local appraisers, once again, local [r]ealtors that are in the Golden area that are familiar with farming and that property." He also talked to local lenders that do a large amount of farm lending.
Grimm further testified that when he appraised the farm outbuildings on the subject properties, he did so by determining the replacement cost of the building and subtracting appropriate depreciation in accordance with the requirements of the Illinois Real Property Appraisal Manual (Appraisal Manual). When asked whether he valued the farm outbuildings based upon their current ...