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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
IN THE MATTER OF: APPEAL OF SHIRLEY W. MURRAY from the decision
of the Durham County Board of Equalization and Review concerning
the valuation and taxation of certain personal property for tax
Filed: 17 October 2006
1. Appeal and Error--preservation of issues--waiver
The North Carolina Property Tax Commission did not err by denying respondent county's
motion to dismiss based on an alleged failure of the taxpayer to carry his burden of showing that
the county employed an arbitrary or illegal method of valuation and that the value substantially
exceeded the true value in money of the property, because after the denial of its motion, the
county presented its own evidence to the Commission and therefore waived its right to appeal the
denial of a motion to dismiss.
2. Taxation-_valuation--findings of fact
A whole record review revealed that the North Carolina Property Tax Commission did
not err by its findings of fact that the value of taxpayer's personal property manufactured home
was $18,920 as of 1 January 2003 and that the county appraised the home for 2003 as $34,440
under the same methods as if the property was real property, because: (1) the taxpayer's
testimony as to the value of the home was reasonably accepted by the Commission, and thus, was
supported by competent, material, and substantial evidence; and (2) as to the method of appraisal,
the deputy assessor for the county provided substantial evidence showing the county appraised
the home under the same methods as if the home was real property.
3. Taxation--manufactured homes_-valuation of personal property
The North Carolina Property Tax Commission did not err by its conclusion of law that
respondent county employed an arbitrary or illegal method of valuation and that the valuation of
taxpayer's personal property manufactured home substantially exceeded the true value of the
home, because: (1) the county valued personal property using the same method as it valued real
property; (2) the county's schedule of values made no distinction between real and personal
property manufactured homes; (3) values were assessed without express consideration of the
personal property elements outlined in N.C.G.S. § 105-317.1; and (4) the county's appraisal
method failed to culminate in the true value of the taxpayer's home when substantial evidence
showed that it revealed a ninety percent appreciation resulting in a $36,043 appraisal, less than
$2,000 under the original purchase price.
Appeal by respondent from judgment entered 25 May 2005 by the
North Carolina Property Tax Commission, sitting as the State Board
of Equalization and Review. Heard in the Court of Appeals 21
No brief filed for petitioner-appellee.
Office of the Durham County Attorney, by Lucy Chavis,
Assistant County Attorney, for respondent-appellant.
MARTIN, Chief Judge.
Durham County appeals the decision of the North Carolina
Property Tax Commission reducing the assessed value of Shirley W.
Murray's (taxpayer's) manufactured home. Taxpayer's residential
manufactured home was situated on leased land, and therefore was
classified as personal property and not real property. The
Commission found Durham County to have arbitrarily or illegally
appraised taxpayer's home as if it were real property and that the
value assigned the home substantially exceeded its true value. The
Commission reduced the appraised value of the manufactured home
from $36,043 to $18,920. For the reasons which follow, we affirm
the Commission's final decision.
In 1996, taxpayer purchased his Redman manufactured home for
$38,000. After purchase, the home sat on cinder blocks with a
brick skirt surrounding the base. The wheels, axle and hitch were
removed. Taxpayer did not own the land on which the home was
located, but instead rented the land from his ex-wife and son. In
the years following the purchase of the home, taxpayer paid his
property taxes to Durham County, and each year the assessed value
of his home decreased. In 2002, Durham County appraised his home
and assessed its value at $18,920.
In July 2003, N.C. Gen. Stat. § 105-273(13) was amended to
expressly define differences between real property and tangible
personal property as it pertained to manufactured homes. Inresponse to this statutory change, as well as a memorandum of
suggestions from the North Carolina Department of Revenue, Durham
County began assessing real and personal property manufactured
homes under the same valuation methods and procedures. In 2003,
Durham County appraised taxpayer's home and assessed its value at
Taxpayer appealed the appraisal to the Durham County Board of
Equalization and Review. The County Board increased the valuation
of taxpayer's home to $36,043. Taxpayer appealed to the North
Carolina Property Tax Commission (Commission), sitting as the
State Board of Equalization and Review. The Commission heard
testimony from taxpayer and the Deputy Assessor for Durham County,
Jay Miller. The Commission determined that Durham County employed
an arbitrary or illegal method of appraisal as to taxpayer's home.
The Commission also found Durham County's valuation of taxpayer's
home to substantially exceed its true value. Accordingly, the
valuation was reduced to $18,920. Durham County appealed.
For this Court to reverse the Commission's decision, appellant
must show that the Commission's findings were:
(1) In violation of constitutional provisions;
(2) In excess of statutory authority or
jurisdiction of the Commission; or
(3) Made upon unlawful proceedings; or
(4) Affected by other errors of law; or
(5) Unsupported by competent, material and
substantial evidence in view of the entire
record as submitted; or
(6) Arbitrary or capricious.
N.C. Gen. Stat. § 105-345.2(b) (2005). Questions of law receive
de novo review, while issues such as sufficiency of the evidence to
support the Commission's decision are reviewed under the whole-
record test. In re Greens of Pine Glen Ltd., 356 N.C. 642, 647,
576 S.E.2d 316, 319 (2003) (citing N.C. Gen. Stat. § 105-345.2(b)).
In evaluating whether the record supports the Commission's
decision, this Court must evaluate whether the decision is
supported by substantial evidence, and if it is, the decision
cannot be overturned. In re Appeal of Interstate Income Fund I,
126 N.C. App. 162, 165, 484 S.E.2d 450, 452 (1997) (citing In re
Appeal of Perry-Griffin Found., 108 N.C. App. 383, 394, 424 S.E.2d
212, 218 (1993)). Substantial evidence is such relevant evidence
as a reasonable mind might accept as adequate to support a
conclusion. State ex rel. Comm'r of Ins. v. N.C. Fire Ins. Rating
Bureau, 292 N.C. 70, 80, 231 S.E.2d 882, 888 (1977). Under the
whole record test, this Court may not substitute its judgment
for that of the agency when two reasonable conflicting results
could be reached. In re Southview Presbyterian Church, 62 N.C.
App. 45, 47, 302 S.E.2d 298, 299 (1983).
Since ad valorem tax assessments are presumed correct, the
taxpayer has the burden, before the Commission, of showing the
assessment was erroneous. In re McElwee, 304 N.C. 68, 75, 283
S.E.2d 115, 120 (1981). To rebut this presumption, the taxpayer
must produce competent, material and substantial evidence showing
the county tax supervisor used either an arbitrary method of
valuation or an illegal method of valuation. In re Appeal of AMP,Inc., 287 N.C. 547, 563, 215 S.E.2d 752, 762 (1975). In addition,
the arbitrary or illegal valuation must have substantially exceeded
the true value of the property. Id.
 Durham County first contends the trial court erred in
failing to grant its motion to dismiss. Specifically, Durham
County argues that taxpayer failed to carry his burden of showing
that the county employed an arbitrary or illegal method of
valuation and that the value substantially exceeded the true value
in money of the property. After the denial of its motion, however,
Durham County presented its own evidence to the Commission, and
therefore waive[d] its right to appeal the denial of a motion to
dismiss. In re N. Wilkesboro Speedway, Inc., 158 N.C. App. 669,
677, 582 S.E.2d 39, 44 (2003) (applying the waiver rule to motions
to dismiss in administrative proceedings as sound trial management
after finding no contrary provision under the North Carolina
 Next, Durham County challenges the evidence supporting two
of the Commission's findings of fact. Durham County argues there
was no substantial evidence showing that the value of taxpayer's
home was $18,920 as of 1 January 2003 and that the county
appraised the home under the same methods as if the property was
real property. The Commission's 'findings of fact are conclusive
if, upon review of the whole record, they are supported by
competent, material, and substantial evidence.' In re Appeal ofLee Memory Gardens, Inc., 110 N.C. App. 541, 545, 430 S.E.2d 451,
453 (1993)(quoting In re Humana Hosp. Corp. v. N.C. Dep't of Human
Res., 81 N.C. App. 628, 633, 345 S.E.2d 235, 238 (1986)). We find
competent, material and substantial evidence exists supporting the
As to the value of the home, taxpayer testified at the hearing
that his 2002 tax bill appraised the home at 18,000 and some:
MR. MURRAY: ...
In ... 2002, the last tax bill I got was
$18,000 and some, which it was appraised at at
that time. ...
MR. YOUNG: Excuse me, Mr. Murray. Would you
tell me one more time? You said that in 2002,
the tax bill was $18,000?
MR. MURRAY: $18,000 and some for Durham
Shortly after this exchange, the Commission again asked
taxpayer the appraised value of his home for 2002:
MR. YOUNG: Just to make sure I'm following
you, if you don't mind, Mr. Murray. You're
telling me that on _ telling us, the
Commission, that your 2002 tax bill was
$18,000, and then you told us that the 2003
tax bill was $36,000?
MR. MURRAY: That's right.
It is the role of the Commission to determine the weight and
sufficiency of the evidence and the credibility of the witnesses,
to draw inferences from the facts, and to appraise conflicting and
circumstantial evidence. In re McElwee, 304 N.C. at 87, 283
S.E.2d at 126-27. Taxpayer's testimony was reasonably accepted by
the Commission. The Commission's finding as to the value of thehome on 1 January 2003 was therefore supported by competent,
material and substantial evidence.
As to the method of appraisal, the Deputy Assessor for Durham
County, Jay Miller (Miller), provided substantial evidence
showing that Durham County appraised the home under the same
methods as if the home was real property. Miller created the
schedule of values for manufactured homes in Durham County. He
testified that in 2003, Durham County reappraised all 943 personal
property manufactured homes with the same schedule of values in
place for appraising real property manufactured homes since 2001.
Miller further acknowledged that the county's schedule of values
were used to appraise personal property manufactured homes in the
same manner as real property manufactured homes.
MR. RAYNOR: Yeah, if I have a Redman
manufactured home on my own lot sitting on a
nice, permanent foundation, it was already
valued at 38,000. And before the law changed,
if I had one, like the Taxpayer does, it was
valued at 18,000, and the day after the law
changed, you just pushed his up to 38,000,
didn't you? ... [Y]ou could have said, you
know, These $38,000 manufactured homes that
we're valuing as real property really ought to
be valued at 28,000. But you didn't; you
just pushed all the ones that you were valuing
as personal property and just pushed them up
to what you were valuing the ones that were
WITNESS: I used the schedule of values to
MR. RAYNOR: Well, who created the schedule of
WITNESS: I did.
Examining the whole record, the Commission's finding that
Durham County appraised taxpayer's manufactured home under the same
method as it appraised real property manufactured homes was
supported by competent, material and substantial evidence.
 Under its final assignments of error, Durham County
challenges the Commission's conclusions of law. The Commission
concluded that Durham County employed an arbitrary or illegal
method of valuation and found that the valuation substantially
exceeded the true value of the home. Insofar as the conclusions of
law involve statutory interpretation, we apply a de novo
In re Appeal of Lee Memory Gardens
, 110 N.C. App. at 545, 430
S.E.2d at 453. The remaining conclusions of law are final if
supported by competent, material and substantial evidence. In re
Appeal of Parsons
, 123 N.C. App. 32, 40, 472 S.E.2d 182, 187 (1996)
(citing In re Appeal of Lee Memory Gardens
, 110 N.C. App. at 545,
430 S.E.2d at 453).
All manufactured home appraisals occurring on or after 1 July
2003 are subject to the amended statutory guidelines outlining the
differences between a manufactured home affixed to land owned by
the owner of the home, and a manufactured home on land leased from
someone else. N.C. Gen. Stat. § 105-273(13) (2005). The former is
considered real property, but the latter is considered personal
property, unless the lease extends for a primary term of at least
20 years and expressly provides for disposition of the manufactured
home at the end of the lease. Id
. Our General Statutes specifically set forth different
valuation methods for real and personal property. The appraisal of
real property is governed by N.C.G.S. § 105-317, making it the duty
of the assessor to use a uniform schedule of values, standards, and
rules. N.C. Gen. Stat. § 105-317(b)-(c) (2005). In contrast, the
appraisal of personal property is governed by N.C.G.S. § 105-317.1,
and provides specific elements for consideration. Those elements
are sale price of similar property, replacement cost, age, physical
condition, and remaining life of the property, productivity and
economic utility, effect of obsolescence, and any other factor that
may affect the value of the property. N.C. Gen. Stat. § 105-
Under N.C.G.S. § 105-283, real and personal property should be
appraised at its true value in money. N.C. Gen. Stat. § 105-283
(2005). True value is defined as the market value or the price
estimated in terms of money at which the property would change
hands between a willing and financially able buyer and a willing
seller. N.C. Gen. Stat. § 105-283; see also In re Bermuda Run
, 145 N.C. App. 672, 677, 551 S.E.2d 541, 544 (2001).
N.C.G.S. § 105-284 requires both real and personal property taxes
to be levied uniformly. Neither provision, however, requires
uniformity between real and personal property in comparison to each
other. Further, no provision allows for the appraisal of personal
property under a real property schedule of values. Miller, Durham
County's witness, admitted as much while testifying.
CHAIRMAN WHEELER: ... [T]here's no law in this
state that I know of that allows you to go tothe schedule of values to value something that
you determine to be personal property. Is
WITNESS: That's correct.
Durham County's appraisal method was arbitrary or illegal
because, as found by the Commission, the county valued personal
property using the same method as it valued real property. Durham
County's Schedule of Values made no distinction between real and
personal property manufactured homes. In addition, values were
assessed without express consideration of the personal property
elements outlined under N.C.G.S. § 105-317.1. Miller indicated
that the schedule of values was not designed to appraise personal
CHAIRMAN WHEELER: Is there anywhere in Durham
County's Schedule of Values that tells you how
to appraise personal property?
Further, an appraisal method is illegal when it fails to
result in true value property appraisals. In re Southern Railway
, 313 N.C. 177, 181, 328 S.E.2d 235, 239 (1985). Durham
County's appraisal method failed to culminate in the true value
of the taxpayer's home. In neglecting to distinguish between real
and personal property manufactured homes, Durham County's appraisal
methods risk this same failure to produce the true value of all
personal property manufactured homes.
Turning to the appraisal at issue, taxpayer produced
competent, material and substantial evidence that showed the
county's valuation substantially exceeded the true value of hishome. Taxpayer testified to the discrepancy between the 2002 and
2003 appraisal amounts. Ignoring years of previous depreciation,
the home was assessed at more than a ninety percent appreciation in
value. Substantial evidence within the record supports the
Commission's finding that a ninety percent appreciation resulting
in a $36,043 appraisal, less than $2,000 under the original
purchase price, does not reflect the home's true value. Again,
the Commission is charged with weighing the sufficiency of the
evidence and credibility of the witnesses. Our review of the whole
record shows substantial evidence in support of the Commission's
decision. Durham County's assignments of error are without merit.
Judges HUNTER and McCULLOUGH concur.
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