Submitted on Briefs: oral argument: September 15, 2017
OF A DECISION OF THE COURT OF APPEALS Reported at 373 Wis.2d
310, 895 N.W.2d 104 (2017 - Unpublished)
of Appeal Court Circuit county Milwaukee Jeffrey A. Conen and
Dennis P. Moroney Judge
the plaintiff-appellant-petitioner, there were briefs filed
by Alan Marcuvitz, Nicholas J. Boerke, and Von Briesen &
Roper, S.C., Milwaukee. There was an oral argument by
Nicholas J. Boerke and Alan Marcuvitz.
the defendant-respondent, there was a brief filed by Grant F.
Langley, city attorney, and Allison N. Flanagan, assistant
city attorney. There was an oral argument by Allison N.
amicus curiae brief was filed on behalf of League of
Wisconsin Municipalities by Claire Silverman and League of
Wisconsin Municipalities, Madison.
BRADLEY, J. and KELLY, J. (coauthor) dissent (opinion filed).
WALSH BRADLEY, J.
The petitioner, Metropolitan Associates (Metropolitan), seeks
review of an unpublished court of appeals decision affirming
the circuit court's determination, which in turn affirmed
the City of Milwaukee's (the City) tax assessment of
property owned by Metropolitan. Metropolitan contends that the
court of appeals erred in concluding that the City complied
with Wis.Stat. § 70.32(1) (2013-14) in its assessment
of Metropolitan's property.
Specifically, Metropolitan argues that the City contravened
Wis.Stat. § 70.32(1) because it failed to utilize the
"best information" available when it relied on mass
appraisal, and not single-property appraisal, in determining
the value of Metropolitan's property. Metropolitan
additionally asks this court to reject the findings of the
circuit court regarding the reliability of the competing
assessment evidence and the weight and credibility the
circuit court attributed to that evidence. Ultimately, it
argues that the application of the presumption of correctness
to the City's assessment based on a mass appraisal
constitutes an error of law.
We conclude that the City's assessment of
Metropolitan's property complied with Wis.Stat. §
70.32(1). The City permissibly utilized mass appraisal for
its initial assessment and appropriately defended its initial
assessment with single property appraisals demonstrating that
the assessment was not excessive.
Next, we decline Metropolitan's request to upset the
circuit court's findings of fact. As the court of appeals
aptly stated, "[i]n asking us to reject the court's
judgment as to the weight and credibility of the competing
assessment evidence, Metropolitan effectively asks us to
substitute our judgment for the circuit court's regarding
the credibility of witnesses and the relative weights to
assign to various pieces of the evidence at trial, neither of
which we can do."
We conclude that the circuit court's findings of fact
regarding the reliability of the respective appraisals are
not clearly erroneous. Because the circuit court's
findings are sufficient to support its determination
regardless of whether the presumption of correctness was
employed, we need not address whether the presumption of
correctness attached to the assessment based on the initial
Accordingly, we affirm the decision of the court of appeals.
The facts presented arise from the City's assessments of
seven properties owned by Metropolitan for the tax years
2008-2013. Metropolitan objected that the assessments were
excessive, initially appealing to the City's Board of
Assessors and Board of Review. The Board of Assessors and
Board of Review both upheld the assessments. Metropolitan
then brought an excessive assessment action in the circuit
Both parties agreed to present evidence on only one of the
seven Metropolitan properties, the Southgate Apartments, and
to focus exclusively on the tax years 2008-2011. They further
agreed that the resolution of the Southgate Apartments
assessment would control the resolution of Metropolitan's
challenges to the other six properties' assessments.
The Southgate Apartments were initially assessed by the City
using a "mass appraisal" technique. At trial, the
City assessor, Peter Weissenfluh, testified that "[m]ass
appraisal is a technique used by probably the majority of
assessment jurisdictions in the nation. It is a process
whereby an assessor values entire groups of property using
systematic techniques and allowing for statistical
Mass. appraisal stands in contrast to single property
appraisal. Weissenfluh testified that single property
appraisal "is looking at the individual properties and
determining the full fair market value of that individual
property with more detail and more . . . individual analysis
. . . ."
Single property appraisals are conducted by what Weissenfluh
described as a "three-tier valuation technique."
The three "tiers" of analysis provide a hierarchy
of what constitutes the best evidence of fair market value.
Pursuant to a "tier 1" analysis, the best evidence
of value is a recent sale of the subject property.
Weissenfluh explained that there were no recent sales of the
Southgate Apartments. Because no tier 1 evidence was
available, he then moved to a "tier 2" analysis,
also known as a "sales comparison" approach.
A tier 2 analysis examines any sales of reasonably comparable
property. Under this approach, as Weissenfluh testified, an
assessor "surveys the market to determine comparable
sales. In that process many sources are used." The
assessor then selects comparable properties relying on such
factors as location and use, adjusting the sale price based
on particular physical characteristics of the properties.
Weissenfluh testified that he completed a tier 2 analysis to
assess the Southgate Apartments. Through this analysis, he
ultimately arrived at a value higher than that produced with
the initial mass appraisal.
If there is no information from which to conduct either a
tier 1 or tier 2 analysis, the assessor moves to a "tier
3" analysis. A tier 3 analysis takes into account other
characteristics of the property, such as the amount of income
it generates and the cost to maintain it.
Weissenfluh conducted a tier 3 income analysis "to
confirm that the sales comparison approach made sense."
He further testified that his income analysis validated the
results of the sales comparison analysis, confirming that the
initial mass appraisal was not excessive.
Metropolitan responded by presenting the testimony of its
appraiser, Lawrence Nicholson. He also conducted both tier 2
and tier 3 analyses of the Southgate Apartments. Nicholson
concluded, contrary to Weissenfluh's determination, that
the Southgate Apartments had a value lower than that
reflected in the City's initial mass appraisal.
After a two-day bench trial, the circuit court rendered a
written decision affirming the City's initial
assessments. The circuit court determined first that the City
complied with Wis.Stat. § 70.32(1) and the Wisconsin
Property Assessment Manual (the Manual) by conducting a mass
appraisal of the Southgate Apartments.
Second, the circuit court found that the City's tier 2
and 3 valuations were "more reliable" than
Metropolitan's. Specifically, the circuit court
determined that "[t]he City's sales comparison
approach is more reliable than Metropolitan's
approach" because Metropolitan made "adjustments
based solely on the properties' net operating
income." In so doing, Metropolitan "conflate[d]
the sales comparison and income approaches."
Further, the circuit court found that "[t]he City's
income approach was more reliable than Metropolitan's
approach." The City's income approach correctly
adjusted for Metropolitan's expense ratio, which was
"markedly higher than the expense ratios for similar
properties in the market." As the circuit court
highlighted, "[t]he market trend is to maintain a lower
expense ratio, and the City's income approach accounted
On appeal, Metropolitan argued that the circuit court erred
in concluding that Metropolitan failed to rebut the
presumption of correctness to which City assessments are
entitled. Specifically, it asserted that (1) the City's
initial assessments were invalid as a matter of law because
the City assessor used the mass appraisal method and not the
three-tier technique; (2) the City assessor's tier 2 and
3 assessments were conducted in a manner contrary to
Wisconsin assessment law in that the City assessor ignored
the individual economic characteristics of the Southgate
Apartments property; and (3) the circuit court erred in its
determination that the City assessor's methods were more
reliable than those of Metropolitan's assessor.
The court of appeals rejected Metropolitan's arguments.
It concluded that the Wisconsin Property Assessment Manual
explicitly encourages assessors to use mass appraisal.
Metro. Assocs. v. City of Milwaukee, No. 2016AP21,
unpublished slip op., ¶20 (Wis. Ct. App. Dec. 8, 2016).
Next, it determined that the City assessor's sales
comparison and income analyses were conducted in accordance
with Wisconsin law. Id., ¶33. Finally, it
opined that the circuit court's determination regarding
the reliability of each assessor's methods was a
credibility determination that the court of appeals would not
upset on appeal. Id., ¶35.
In this case we are asked to review a tax assessment made in
an action for refund of excess property taxes paid pursuant
to Wis.Stat. § 74.37(3)(d). An action under § 74.37
is a new trial, not a certiorari action. Trailwood
Ventures, LLC v. Vill. of Kronenwetter, 2009 WI.App. 18,
¶6, 315 Wis.2d 791, 762 N.W.2d 841');">762 N.W.2d 841. Accordingly, we
review the circuit court's determination, not that of the
assessor or Board of Review. Id.
In review, we interpret and apply Wis.Stat. § 70.32 to
determine whether the appraisal at issue followed the
statutory directives. Regency W. Apartments LLC v. City
of Racine, 2016 WI 99, ¶22, 372 Wis.2d 282, 888
N.W.2d 611. Statutory interpretation and application present
questions of law that this court reviews independently of the
determinations rendered by the circuit court and court of
We do, however, defer to a circuit court's findings of
fact. Royster-Clark, Inc. v. Olsen's Mill, Inc.,
2006 WI 46, ¶11, 290 Wis.2d 264, 271, 714 N.W.2d 530,
534 (citation omitted). Factual findings made by the circuit
court will not be disturbed unless they are clearly
erroneous. Emp'rs Ins. of Wausau v. Jackson, 190
Wis.2d 597, 613, 527 N.W.2d 681 (1995) . It is within the
province of the factfinder to determine the weight and
credibility of expert witnesses' opinions. Bonstores
Realty One, LLC v. City of Wauwatosa, 2013 WI.App. 131,
¶6, 351 Wis.2d 439, 839 N.W.2d 893 (citation omitted).
Metropolitan argues first that the City's assessments do
not comply with Wis.Stat. § 70.32(1), which provides in
Real property shall be valued by the assessor in the manner
specified in the Wisconsin property assessment manual
provided under s. 73.03(2a) from actual view or from the best
information that the assessor can practicably obtain . . .
Metropolitan contends that the City did not use the
"best information" available when it relied on mass
appraisal rather than single property appraisal. The argument
centers on the meaning of "best information that the
assessor can practicably obtain."
In its initial briefing,  Metropolitan asserts that the
"best information" on which to base an assessment
is not that which informs a mass appraisal, but instead is
information underlying a single property appraisal pursuant
to the three tiers of analysis under State ex rel.
Markarian v. City of Cudahy, 45 Wis.2d 683, 173 N.W.2d
627 (1970) .
Wisconsin Stat. § 70.32(1) explicitly directs that
property be assessed "in the manner specified in the
Wisconsin property assessment manual." The Manual
provides that "[c]ommercial property can be valued by
either single property or mass appraisal techniques." 1
Wisconsin Property Assessment Manual (2009) at
"Mass appraisal is the systematic appraisal of groups of
properties, as of a given date, using standardized procedures
and statistical testing." 1 Wisconsin Property
Assessment Manual at 7-32. The Manual provides for assessors
utilizing mass appraisal in initial assessments: "Mass
appraisal is the underlying principle that Wisconsin
assessors should be using to value properties in their
respective jurisdictions." Id.
Mass. appraisal stands in contrast to single property
appraisal, which is the valuation of a single particular
property as of a given date. Id. A single property
appraisal focuses on the unique characteristics of the
subject property within the strictures of the methodology set
forth in Markarian, 45 Wis.2d 683.
In Markarian, we addressed a landowner's
challenge to the City of Cudahy's assessment of his
property. 45 Wis.2d at 684. We interpreted Wis.Stat. §
70.32 (1) to set forth a hierarchical valuation
methodology for single-property appraisal. Id. at
686. The text of the statute lists three sources of
information in a specific order, with the court in
Markarian clarifying this order as indicative of the
quality of the information each source provides. Id.
This methodology has been further described in the courts as
providing for three "tiers" of analysis. See,
e.g., Allright Props., Inc. v. City of
Milwaukee, 2009 WI.App. 46, ¶¶20-30, 317
Wis.2d 228, 767 N.W.2d 567.
The best information of a property's fair market value is
an arm's-length sale of the subject property.
Markarian, 45 Wis.2d at 686; Regency W.,
372 Wis.2d 282, ¶27. Examination of a recent
arm's-length sale is known as a "tier 1"
analysis. Allright Props., 317 Wis.2d 228, ¶21.
If there is no recent sale of the subject property, the
appraiser moves to tier 2, examining recent, arm's-length
sales of reasonably comparable properties (the "sales
comparison approach") . Markarian, 45 Wis.2d at
686; Allright Props., 317 Wis.2d 228, ¶22.
When both tier 1 and tier 2 are unavailable, an assessor then
moves to tier 3. See Allright Props., 317 Wis.2d
228, ¶29. Under tier 3, an assessor "may consider
'all the factors collectively which have a bearing on
value of the property in order to determine its fair market
value.'" Adams Outdoor Advert., Ltd., v. City of
Madison, 2006 WI 104, ¶35, 294 Wis.2d 441, 717
N.W.2d 803 (quoting Markarian, 45 Wis.2d at 686) .
These factors include "cost, depreciation, replacement
value, income, industrial conditions, location and occupancy,
sales of like property, book value, amount of insurance
carried, value asserted in a prospectus and appraisals
produced by the owner." State ex rel. Mitchell Aero,
Inc. v. Bd. of Review of City of Milwaukee, 74 Wis.2d
268, 278, 246 N.W.2d 521');">246 N.W.2d 521 (1976) (citations omitted). Both the
income approach, which seeks to capture the amount of income
the property will generate over its useful life, and the cost
approach, which seeks to measure the cost to replace the
property, fit under the umbrella of tier 3 analysis.
Adams Outdoor Advert., 294 Wis.2d 441, ¶35.
Metropolitan's argument that the "best
information" must necessarily be the information
underlying a single property appraisal and not a mass
appraisal is unpersuasive for two reasons. First, property
must be assessed "in the manner specified in the
Wisconsin property assessment manual." Wis.Stat. §
70.32(1) . It allows assessors to conduct mass appraisal. 1
Wisconsin Property Assessment Manual at 7-32. Second,
Metropolitan's argument does not give full effect to the
word "practicably" in § 70.32(1).
The Manual outlines the division of labor between mass
appraisal and single property appraisal, demonstrating when
the use of each method is appropriate:
The assessor needs skills in both mass appraisal and single
property appraisal. Mass. appraisal skills for producing
initial values, whether during a reappraisal year or not, and
single property appraisal skills to defend specific property
values or to value special-purpose properties that do not
lend themselves to mass appraisal techniques.
1 Wisconsin Property Assessment Manual at 7-32.
Metropolitan acknowledged in its reply brief and at oral
argument that mass appraisal is appropriate in certain
circumstances. Namely, Metropolitan recognized that at the
initial assessment stage, mass appraisal may comprise the
best information for all properties being assessed en masse.
The Manual makes clear that mass appraisal is accepted at the
initial assessment stage. It likewise sets forth when a
single property appraisal is warranted. A single-property
appraisal is necessary (1) after the initial mass appraisal
has been challenged by the taxpayer or (2) if the property
being valued is a "special-purpose" property that
does not lend itself well to mass appraisal. See 1
Wisconsin Property Assessment Manual at 7-32. The express
language of the Manual indicates that mass appraisal is a
proper method of valuation in all other circumstances.
Requiring a single property appraisal after a taxpayer
challenges an assessment does not mean that the value of the
property must be set in accordance with the single property
appraisal. Indeed, this could not be the case when the
subsequent single property appraisal is higher than the
initial mass appraisal. In Trailwood Ventures, the
court of appeals determined that Wis.Stat. §§ 74.37
and 74.39 do not permit the court to impose a
greater tax burden than the one the taxpayer challenges. 315
Wis.2d 791, ¶10.
The question on appeal in a Wis.Stat. § 74.37 action is
not whether the initial assessment was incorrect, but whether
it was excessive. Accordingly, Weissenfluh testified at trial
Q: And you're not asking that the assessment be changed
to the sales comparison approach value, correct?
A: No. The assessment cannot be changed at this level. All
I'm showing is that my work supports the original
assessment and I conclude, therefore, that the assessment as
made was not excessive.
value reflected in the initial mass appraisal can thus
constitute the value of the property for tax assessment