FROM AN ORDER OF THE CIRCUIT COURT FOR WAUKESHA COUNTY, NO.
2017CV1899 WILLIAM DOMINA, JUDGE.
Reilly, P.J., Gundrum and Hagedorn, JJ.
Hanning Regency LLC asserts that the Town of Brookfield Board
of Review improperly disregarded the statutory standard for
real property valuations when it sustained an assessor's
valuations that were nearly twice the amount of a recent
arm's-length purchase of two properties. We agree and
reverse the circuit court's decision to deny
Hanning's certiorari challenge and remand for further
For tax assessment purposes real property valuations are
governed by Wis.Stat. § 70.32(1) (2017-18),
Real property shall be valued by the assessor in the manner
specified in the Wisconsin property assessment manual
provided under [Wis. Stat. §] 73.03(2a) from actual view
or from the best information that the assessor can
practicably obtain, at the full value which could ordinarily
be obtained therefor at private sale. In determining the
value, the assessor shall consider recent arm's-length
sales of the property to be assessed if according to
professionally acceptable appraisal practices those sales
conform to recent arm's-length sales of reasonably
comparable property; recent arm's-length sales of
reasonably comparable property; and all factors that,
according to professionally acceptable appraisal practices,
affect the value of the property to be assessed.
The statute's second sentence is a codification of an
assessment hierarchy that was developed under common law.
See State ex rel. Campbell v. Township of Delavan,
210 Wis.2d 239, 256-57 & n.5, 565 N.W.2d 209 (Ct. App.
1997) (citing State ex rel. Markarian v. City of
Cudahy, 45 Wis.2d 683, 686, 173 N.W.2d 627 (1970)).
Often cited for its articulation in Markarian, the
hierarchy broadly recognizes that a property's "full
value" is best determined with consideration of three
sources-or "tiers"-of information: an
arm's-length sale of the subject property, recent
arm's-length sales of reasonably comparable properties,
and all other factors that collectively have a bearing on the
property's value. Metropolitan Assocs. v. City of
Milwaukee, 2018 WI 4, ¶¶31-34, 379 Wis.2d 141,
905 N.W.2d 784 (citing Markarian, 45 Wis.2d at 686).
Simply reading the statute might lead one to think that
assessors should gather all three tiers of information,
consider them, and then make a determination. As explained
further below, the assessor and Board here thought precisely
that. But our cases are clear-and we are bound to follow
them-this "consider everything together" approach
is not the law. Instead, the hierarchy's three tiers must
be considered in order. You do not get to tier two if tier
one information is available, and you do not get to tier
three if tier two (or tier one) information is available.
See Metropolitan Assocs., 379 Wis.2d 141,
¶¶31-34; Great Lakes Quick Lube, LP v. City of
Milwaukee, 2011 WI.App. 7, ¶¶17-18, 331 Wis.2d
137, 794 N.W.2d 510 (2010). Failure to follow this hierarchy
structure "constitutes an error of law."
Campbell, 210 Wis.2d at 259. And that is what
In August 2016, Hanning purchased two commercial office
buildings for a combined price of $875, 000. In 2017, the
Town of Brookfield reassessed the properties for tax
purposes, concluding that their respective values were $884,
600 and $768, 500, or a combined total of $1, 653, 100.
Hanning objected to the valuations, and the Board held a
hearing. At the conclusion of the hearing, the Board
sustained the assessor's valuations, finding that Hanning
had not overcome the presumption of correctness accorded to
the assessor. Wis.Stat. § 70.47(8)(i). Hanning now
appeals from the dismissal of its certiorari challenge to
On appeal from a certiorari order, we review the decision of
the Board to determine whether (1) it kept within its
jurisdiction; (2) it proceeded on a correct theory of law;
(3) its action was arbitrary, oppressive, or unreasonable and
represented its will and not its judgment; and (4) the
evidence was such that it might reasonably make the order or
determination in question. Sausen v. Town of Black Creek
Bd. of Review, 2014 WI 9, ¶6, 352 Wis.2d 576, 843
Hanning asserts that the Board disregarded the hierarchy
under Wis.Stat. § 70.32(1) by sustaining the
assessor's valuations based on his use of an
income-approach methodology-a tier three
consideration-notwithstanding its conclusion that the
properties were purchased at arm's length.
While the hearing transcript is not a model of clarity, our
best reading of the proceedings below leads us to conclude
that both the assessor and the Board failed to adhere to the
statutory hierarchy in the assessment of Hanning's
At the hearing, the property owner spoke about the details of
Hanning's purchase, as well as his belief that the sale
constituted an arm's-length transaction. The owner
proposed alternative valuations of the properties that,
combined, matched the purchase price of $875, 000.
Then the assessor spoke in support of his assessments, noting
first that the purchase price was considered and the sale
appeared to be at arm's length. Even so, he stated that
he did not "necessarily have to accept that sale as an
absolute in the assessment of a property" because
"sales have a range and … one sale does not make
a market." Consistent with that theory, the assessor
proceeded to explain that he found no recent sales of
comparable properties and used income and expense ...