State of Wisconsin ex rel. The Peter Ogden Family Trust of 2008 and The Therese A. Mahoney-Ogden Family Trust of 2008, Petitioners-Appellants,
Board of Review for the Town of Delafield, Respondent-Respondent.
from an order of the circuit court for Waukesha County, Cir.
Ct. No. 2016CV1707 KATHRYN W. FOSTER, Judge. Reversed and
cause remanded with directions.
Neubauer, C.J., Gundrum and Hagedorn, JJ.
The Peter Ogden Family Trust of 2008 and The Therese A.
Mahoney-Ogden Family Trust of 2008 (collectively "the
Trust") filed this action for certiorari review of a
decision of the Board of Review for the Town of Delafield
sustaining the 2016 property tax assessment of the
Trust's real property. The Trust argues the Board failed
to act according to law when it sustained the assessment,
which was based upon the assessor's change in the
classification of the property from agricultural and
agricultural forest to residential. Specifically, the Trust
claims the classification change was erroneous because it was
based upon the assessor's and the Board's mistaken
legal belief that in order for land to qualify as
agricultural land, crops grown on the property must be grown
for a business purpose. Because we agree that both the
assessor's change of the classification to residential
and the Board's sustainment of that change were based
upon the erroneous legal belief that a business purpose was
necessary for an agricultural classification, we reverse and
remand this matter to the circuit court.
In April 2003, Peter Ogden and Theresa Mahoney-Ogden
purchased the land at issue in this case. At the time, the
land was classified as residential for property tax purposes,
and it remained so classified until 2012, when the assessor
changed the classification to agricultural and agricultural
forest based upon pine trees, apple trees, and hay the Ogdens
planted on the property. In 2016, the assessor reclassified
the property as residential after concluding that it failed
to qualify for the agricultural and agricultural forest
classifications. If the property had remained classified as
agricultural and agricultural forest, it would have been
valued at $17, 100, whereas it was valued at $886, 000 when
reclassified as residential-resulting in a significant
difference in property tax owed.
The Trust objected to the 2016 property tax assessment,
challenging the reclassification of the property to
residential. The Board of Review held an evidentiary hearing.
After hearing testimony and receiving exhibits, two members
of the Board voted to sustain the residential
reclassification and related tax assessment and two members
voted to not sustain. Because the vote was tied, the
assessor's reclassification of the property and the
assessment were sustained. The Trust sought certiorari review
and the circuit court upheld the Board's decision. The
On certiorari, we review the actions of the Board, not the
circuit court. Fee v. Board of Review of Florence,
2003 WI.App. 17, ¶11, 259 Wis.2d 868, 657 N.W.2d 112
(2002). Our review is limited to whether the Board (1) kept
within its jurisdiction; (2) acted according to law; (3)
acted arbitrarily, oppressively, or unreasonably; and (4)
supported its decision with substantial evidence.
Whitecaps Homes, Inc. v. Kenosha Cty. Bd. of Review,
212 Wis.2d 714, 720, 569 N.W.2d 714 (Ct. App. 1997). At issue
in this case is whether the Board acted according to law,
which is a question of law we review de novo. Lloyd v.
Board of Review of Stoughton, 179 Wis.2d 33, 36, 505
N.W.2d 465 (Ct. App. 1993). Resolving this question requires
us to interpret our statutes and administrative rules, which
are also matters of law we review independently. State v.
Jensen, 2010 WI 38, ¶8, 324 Wis.2d 586, 782 N.W.2d
415 (statutory interpretation); Orion Flight Servs. v.
Basler Flight Serv., 2006 WI 51, ¶18, 290 Wis.2d
421, 714 N.W.2d 130 (administrative rule interpretation).
Because we agree with the Trust that the Board failed to act
according to law in sustaining the reclassification, and thus
the assessment, of the property, we reverse.
When a taxpayer appeals an assessor's valuation to a
board of review, the board presumes the valuation is correct;
however, this presumption may be rebutted by a proper showing
by the taxpayer that it is incorrect. Anic v. Board of
Review of Wilson, 2008 WI.App. 71, ¶10, 311 Wis.2d
701, 751 N.W.2d 870; see also W . S . §
70.47(8)(i) (2015-16). The presumption of is tat
correctness, however, "presuppose[s] the method of
evaluation is in accordance with the statutes."
State ex. rel. Markarian v. City of Cudahy, 45
Wis.2d 683, 686, 173 N.W.2d 627 (1970). "Errors of law
should be corrected by the court on certiorari and the
failure to make an assessment on the statutory basis is an
error of law." Id. If we "find upon the
undisputed evidence before the board that the assessment has
not been fixed upon the statutory basis, the assessment
should be set aside." State ex. rel. Boostrom v.
Board of Review of Linn, 42 Wis.2d 149, 156, 166 N.W.2d
184 (1969); see also State v. Town of Mosel, 32
Wis.2d 253, 262-63, 145 N.W.2d 129 (1966) (determining that
an assessment "was not made on the statutory basis"
in part because "the board of review drew the
unwarranted conclusion that the assessors had proceeded
according to the methods permissible under the
"[L]and … that is devoted primarily to
agricultural use" is "[a]gricultural land, "
Wis.Stat. § 70.32(2)(c)1g., and such land "must be
classified as agricultural, " Fee, 259 Wis.2d
868, ¶12. See also Wis. Admin. Code § Tax
18.06(1) (June 2015) ("An assessor shall
classify as agricultural land devoted primarily to
agricultural use." (emphasis added)). "Agricultural
use" "means agricultural use as defined by the
department of revenue by rule and includes the
growing of short rotation woody crops, including
poplars and willows, using agronomic practices."
Wis.Stat. § 70.32(2)(c)1i. (emphasis added). Wisconsin
Admin. Code § Tax 18.05(1) (June 2015), a Department of
Revenue rule, defines "agricultural use" as
(a) Activities included in subsector 111
Crop Production, set forth in the North American Industry
Classification System (NAICS), United States, 1997, published
by the executive officer of the president, U.S. officer of
management and budget[ or]
(c) Growing Christmas trees or
ginseng. (Emphasis added.)
"included in subsector 111 Crop Production, "
include the "growing" of apples and hay.
See North American Industry Classification System
(NAICS), United States, 1997, published by the office of the
President, U.S. Office of Management and Budget, subsector
111 Crop Production. Of great import to this case, the plain
language of the statute and rule refers to
"growing" the relevant crops-here apples, hay, and
Christmas trees-not marketing, selling, or profiting from
The Board acknowledges in passing the key "growing"
language, stating that the Board "does not dispute that
pursuant to these statutes and rules, the growing of
alfalfa hay, Christmas trees, or apples may constitute an
'agricultural use.'" (Emphasis added.)
Subsequently, however, the Board reasserts its position that
land cannot be "devoted primarily to agricultural
use" without "minimal sales, " "valid
economic activity, " and crops being "marketed for
sale." The Board cites to no statute, administrative
rule, or case law in support of this position. We are not
surprised because, as indicated above, according to the plain
language of the relevant statute and administrative rule, the
Board's position is not the law.
Based upon the above-identified statutory and regulatory
provisions, we conclude that to qualify for the agricultural
classification, it is sufficient that the land be devoted
primarily to growing qualifying crops, whether or
not those crops are grown for a business purpose. And,
consistent with our case law and Wis. Admin. Code § Tax
18.06(1) (June 2015), if the land is thus devoted primarily
to agricultural use, it must be classified as agricultural.
On appeal, the Trust maintains that the Board failed to act
in accordance with the law because the assessor's
reclassification of the property to residential and the
Board's sustainment of that reclassification were based
on the assessor's and the Board's erroneous legal
belief that to qualify for the agricultural classification,
the land must be farmed for a business purpose. The Board
disputes this, asserting that "[i]t is clear the
assessor did not impose a 'business' standard on the
[Trust] when evaluating the extent of use of the
property." Review of the transcript of the Board
hearing, however, reveals that it is "clear" that
the property was reclassified as residential based upon the
assessor's and the Board's erroneous belief that the
land did not qualify for the agricultural classification
because the crops at issue were not being grown for a
As part of his testimony before the Board, Peter Ogden read a
memo from his legal counsel's office which indicated that
for agricultural classification the property needed to be
producing crops for a business purpose. Ogden testified
to planting and growing pine and apple trees on the property
with the intent of eventually selling the pines as Christmas
trees and selling the apples produced by his
"orchard." He also testified to the "hay
field" he and Lloyd Williams, a local farmer, seeded and
harvested on the property, as well as a contractual
arrangement he had with Williams related to this. Ogden
explained that the apple trees were on the smaller of the two
lots, comprising "at best" an acre of the 4.6 acre
lot, and the hay field and "Christmas tree farm"
were on the larger 7.76 acre lot. Ogden indicated he harvests
"three plus acres" of hay on the latter lot and the
"Christmas tree farm" comprises "four to five
Responding to questioning from the assessor as to whether he
had "filed a Schedule F, profit or loss from farming,
" Ogden indicated he had not. Billy Cooley, one of the
two Board members who voted to sustain the assessor's
residential reclassification, also asked Ogden: "You did
not file a Schedule F, which I am assuming is farm-inaudible.
It was not brought up by your accountant or anything;
correct?" Ogden responded: "To my knowledge I am
not required to file a Schedule F." Larry Krause, the
other Board member who voted to sustain the reclassification
to residential, asked Ogden if Williams leased the hay
acreage from him.
Counsel for the Board asked Ogden: "What is your
business plan?" Ogden explained his plan of selling
apples once the orchard had sufficiently matured, cutting the
hay for Williams to use until Ogden "g[o]t cattle"
as he explained was his future intent, and having individuals
cut their own Christmas trees for a price and "then in
the spring, we would replant where that stump is." When
asked by counsel how he planned to advertise and market the
Christmas trees and apples, Ogden discussed possible
strategies. When asked by counsel "[w]hat kind of
revenue" he expected, Ogden indicated he
"hoped" he would "get somewhere between $65
and $75 a tree" for Christmas trees and approximately
"$2.99 a pound" for the apples. Counsel continued