State ex rel. Berg Equipment Corp. v. Town of Spencer Board of Review

Citations: 53 Wis. 2d 233; 191 N.W.2d 892; 1971 Wisc. LEXIS 953Docket: No. 224

Court: Wisconsin Supreme Court; December 2, 1971; Wisconsin; State Supreme Court

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Heffernan, J. details the operations and assessments of The Berg Equipment Corporation, which manufactures barn-cleaning equipment in Spencer, Marathon County, and has additional subsidiaries and a sales outlet in Canada. In 1969, the corporation's assessments included $295,000 for inventory, $167,500 for machinery, $6,800 for furniture and fixtures, $255,000 for Plant No. 1, and $530,000 for Plant No. 2. The corporation does not contest the machinery and furniture assessments but argues that its work-in-process inventory should be capped at $150,000, and the total valuation of both plants should not exceed $693,000.

The 1968 assessments for similar properties were significantly higher, with inventory at $755,000 and combined plant valuations totaling $1,104,000. The 1968 assessments were reviewed by the circuit court without further appeal. The corporation operates on a fiscal year ending September 30 and does not maintain a perpetual inventory, making it difficult to track inventory accurately, as noted by its president, Vernon R. Berg.

The corporation asserts that some manufactured stock is held for retail sale and is therefore not taxable, a claim not disputed by tax authorities. However, the authorities argue that the corporation did not adequately demonstrate what portion of its work-in-process inventory was exempt. On May 1, 1969, assessors visited the property but did not conduct a physical inventory count. They requested bookkeeping records from the corporation, but the information provided was deemed insufficient. A "Manufacturers’ Statement of Property" submitted by the corporation estimated the book value at $295,596.69, noting that $150,000 was assessable in Spencer, while the remainder was claimed as exempt. The corporation acknowledged a lack of written records to support this exemption and did not provide an itemized statement despite requests from assessors.

Berg and Herman met on November 13, 1969, where Herman sought details on claimed exempt personal property but did not receive an itemization. During a subsequent meeting on December 10, 1969, Berg contended that assessors agreed to the valuations he claimed. On December 11, assessor Rindfleisch confirmed in a letter that the assessments were entered as discussed. However, evidence presented at the board of review indicated that this agreement was tentative, contingent upon Berg providing additional information to substantiate his figures. Between December 10 and 17, the assessors determined that Berg's records were incomplete and informed him on December 17 that the exemption could not be permitted. Berg's corporation filed an objection per sec. 70.47 (7) a. Stats, and Berg, as president, waived statutory notice at the hearing on December 22, where his testimony added little to the case. He claimed a $150,000 value for nonexempt property based on a May 1 inventory, but assessors maintained that no evidence was provided to identify exempt property. The board of review offered Berg an opportunity to submit further records, but the additional information was not provided. The corporation's primary argument hinged on an alleged agreement with assessors to accept Berg's figures. However, the board of review's testimony indicated the agreement was conditional on further evidence. The court concluded that any such agreement would lack validity, as the assessor is mandated by sec. 70.34, Stats. to determine personal property value at “true cash value,” independently of taxpayer negotiations. The record affirmed that the gross cash value was accurately assessed, and the corporation failed to meet its burden of proof, as required by sec. 70.47 (7) Stats, which states that objections must be supported by evidence presented to the board. The assessment roll is considered prima facie evidence of correct valuation, which can only be challenged if the taxpayer presents sufficient proof. The assessors conducted site visits to evaluate both real estate and personal property accurately.

The inspection of personal property was deemed sufficient under the statute "as far as practicable," although Berg admitted that maintaining an accurate inventory was challenging. The assessor could not definitively identify which equipment was exempt, relying instead on Berg's assertions. According to Sec. 70.111 (10) b 3, Stats., a sworn statement detailing the exempt inventory's quantity, value, and location as of May 1 was required, but Berg only provided a total valuation of $295,596.69 without itemization. There was no evidence presented to support exemptions for finished products, although the town did not contest this. The assessment of personal property was found valid and prima facie correct, as the Berg Equipment Corporation failed to substantiate its claims or provide necessary records. The assessors personally viewed the real property as mandated by Sec. 70.32, Stats., with historical valuations noted: Plant No. 1 was valued at $464,000 in 1968 and $255,000 in 1969, while Plant No. 2 was assessed at $640,000 in 1968 and $530,000 in 1969. The significant reductions in 1969 assessments lacked evidence of a diminished market value, indicating Berg relied on depreciated book values rather than market values. Assertions made by Berg were deemed mere opinions without factual support, aligning with precedent that such opinions do not nullify an assessor's valuation. An objection to another appraisal was dismissed as there was no evidence it influenced the assessor or board of review. Lastly, allegations of bias against the board were found unsubstantiated, with evidence indicating that the Berg Equipment Corporation received a fair hearing and opportunities to present its case.

A board of review member's status as a taxpayer does not legally disqualify them from serving. The legislature intended for the board to consist of town officers in the public interest. Judicial review standards established in State ex rel. Boostrom v. Board of Review affirm that boards of review have quasi-judicial duties, and courts may only intervene if the boards act in bad faith or exceed their authority. Courts will uphold a board's decisions unless there is evidence of arbitrary or dishonest actions. The assessor's property valuation is presumed correct and binding unless disproven, which the taxpayer failed to do in this case. Consequently, the court affirmed the judgment.