Erroll G. Williams, Assessor of Orleans Parish v. Louisiana Tax Commision and Val C. Cupit

ERROLL G. WILLIAMS, * NO. 2023-CA-0079
ASSESSOR OF ORLEANS
PARISH *
COURT OF APPEAL
VERSUS *
FOURTH CIRCUIT
LOUISIANA TAX *
COMMISSION AND VAL C. STATE OF LOUISIANA
CUPIT *******

APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2021-03092, DIVISION “M”
Honorable Paulette R. Irons, Judge
******
Judge Daniel L. Dysart
******
(Court composed of Judge Daniel L. Dysart, Judge Paula A. Brown, Judge Karen
K. Herman)

Suzanne Haik Terrell
Mitchell Hasenkampf
HANGARTNER RYDBERG & TERRELL, LLC
701 Poydras Street
Suite 310
New Orleans, LA 70139

COUNSEL FOR PLAINTIFF/APPELLANT

Franklin “Drew” Hoffmann
Jordan S. Varnado
FAIRCLOTH MELTON SOBEK & BASH, LLC
9026 Jefferson Highway
Suite 200
Baton Rouge, LA 70809

COUNSEL FOR DEFENDANT/APPELLEE, The Louisiana Tax
Commission

Charles Emile Bruneau, Jr.
ATTORNEY AT LAW
6979 Argonne Blvd.
New Orleans, LA 70124-4026

COUNSEL FOR DEFENDANT/APPELLEE, Val C. Cupit

AFFIRMED

NOVEMBER 28, 2023

DLD This appeal involves a dispute regarding an assessment of property by the
PAB
KKH Orleans Parish Assessor, Erroll Williams. The subject property is a vacant lot

located in the Lakeview neighborhood of New Orleans on General Diaz Street.

The taxpayer who owns the lot, Val C. Cupit, also owns and lives in the house on

the property next door. Her house and the house on the subject property were both

destroyed in Hurricane Katrina in 2005. Ms. Cupit chose to rebuild her home but

her neighbor did not. Ms. Cupit bought the adjacent lot in 2016 after the dwelling

formerly located there was demolished by the previous owner.

For the tax year 2020, the Assessor valued the subject property at $152,500,

an increase from the $109,800 assessment of the previous year. Ms. Cupit

(hereinafter referred to as “the taxpayer”) protested the valuation to the Orleans

Parish Board of Review (“the Board of Review”). The Board of Review upheld

the Assessor’s valuation and the taxpayer then protested the valuation to the

Louisiana Tax Commission (“the Commission”), requesting that the valuation be

lowered to $110,000. Following an administrative trial, the Commission found

that the subject property had been inequitably assessed as compared with similarly

situated comparable properties, reasoning that “a fair and equitable assessment

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must take into account the varying conditions of Lakeview’s streets and the fact

that the subject property consists of merely greenspace.” The Commission also

noted that “the Assessor offered no explanation or justification for his

valuation/assessment of the subject property.” The Commission reduced the

valuation of the property to $110,000. Judicial review of that ruling was not

sought.

For the tax year 2021, the Assessor again valued the property at $152,500.

The taxpayer protested to the Board of Review, which reduced the valuation to

$110,000 in accordance with the Commission’s valuation from the previous year.

The Assessor filed a protest with the Commission challenging the Board of

Review’s reduction. Following an administrative hearing, the Commission

affirmed the decision of the Board of Review in favor of the taxpayer.

In the Commission’s reasons for so ruling, it noted that evidence presented

by the taxpayer included testimony that the subject lot essentially acts as a

retention pond and is used as greenspace only, which differed from surrounding

comparable properties that are residential. Testimony was also presented on behalf

of the taxpayer to establish that the vacant lot is surrounded by streets that are in

very poor condition. The Commission also considered evidence presented by the

Assessor in support of his position that no reduction in value is warranted given the

size of the subject land and the overall market of similarly situated properties. The

Commission also considered evidence of an independent appraisal by a staff

appraiser for the Commission, which appraisal determined a higher fair market

value than that determined by the Assessor. After evaluating the credibility of the

witnesses, along with testimony, documents and exhibits presented at the hearing,

the Commission adopted and reaffirmed its reasoning for its decision for the tax

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year 2020, and noted that the evidence and testimony presented by the taxpayer

supported a significantly lower value than that determined by the Assessor.

The Assessor filed a request for rehearing of the Commission’s ruling. In

denying this request, the Commission stated that the Assessor failed to submit

sufficient evidence to contradict the Commission’s determination and ruling for the

2020 tax year. In response to the Assessor’s argument that the Commission’s

ruling is “clearly contrary to the legal mandate to assess properties uniformly,” the

Commission noted that “[n]either the Louisiana Constitution nor Revised Statutes

mandate that all land, regardless of location, size, use, and the like, be valued at a

‘uniform’ price per square foot with[in] a neighborhood or any other geographic

area.” While stating that Assessors are constitutionally required to assess property

at fair market value, the Commission noted that not all land is equal in value. The

Commission stated that because it is charged with reviewing the correctness of the

subject assessment, it is not bound by the Assessor’s determination of a “uniform”

price per square foot of land within a certain neighborhood or any other geographic

area.

Following the denial of the Assessor’s request for rehearing, the Assessor

filed a petition for judicial review in Civil District Court challenging the

Commission’s decision. At the conclusion of the hearing on the petition for

judicial review, the trial court ruled in favor of the Commission and stated the

following reasons for her ruling:

I think that the appellant [Assessor] has failed to demonstrate
that the Tax Commission was arbitrary or capricious in its decision. I
think that the appellant [failed] to present the Commission with
acceptable evidence and also failed to adjust the valuation based on
the different stakes of each lot and their surroundings. I am not here
to rehear this case. I am supposed to look at what was presented. I
think that the Tax Commission’s decision is affirmed.

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By judgment dated October 21, 2022, the trial court affirmed the decision of

the Commission and dismissed the Assessor’s petition with prejudice. This appeal

by the Assessor followed.

On appeal, the Assessor sets forth four assignments of error:

1) The trial court erred by concluding that La. R.S. 47:2323 [listing
criteria for determining fair market value of property] does not apply
to the Commission;

2) The trial court erred in its application of the Administrative
Procedures Act in limiting its review of the administrative record to
an arbitrary and capricious standard;

3) The trial court erred in its review of the administrative record in
concluding the Assessor failed to demonstrate that the Commission
was arbitrary or capricious in its decision; and

4) The trial court erred in its review of the administrative record in
concluding that the Assessor failed to present the Commission with
acceptable evidence supporting his original valuation.

The Assessor summarizes the issues presented for review in this appeal as

follows:

1) Whether the Commission may reduce an assessment for equitable
purposes rather than a determination of fair market value;

2) Whether the Commission may depart from the definition of fair
market value in La. R.S 47:2321 and the criteria for determining
fair market value in La. R.S. 47:2323(C) in overturning an
assessment; and

3) Whether the Commission’s decision departing from a
determination of fair market value consistent with La. R.S.
47:2321 and 47:2323 should be overturned pursuant to La. R.S.
49:978.1(G) for being:

a. Arbitrary and capricious;

b. An abuse of discretion;

c. In excess of the statutory authority of the agency; and/or

d. Not supported by a preponderance of the evidence

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The Assessor contends that the Commission departed from the definition of

fair market value and the criteria for determining the same in overturning the

assessment reached by the Assessor. The Assessor argues that the Commission

does not have the discretion to reduce an assessment for equitable purposes rather

than make a determination of fair market value, and that fair market value must be

determined pursuant to La. R.S. 47:2321 and 47:2323. According to the Assessor,

the Commission’s ruling contains substantial legal error and therefore is not

entitled to a deferential standard of review.

Louisiana Constitution Article VII, section 18(D) provides, in pertinent part:

Each assessor shall determine the fair market value of all property
subject to taxation within his respective parish or district except public
service properties, which shall be valued at fair market value by the
Louisiana Tax Commission or its successor. . . . Fair market value and
use value of property shall be determined in accordance with criteria
which shall be established by law and which shall apply uniformly
throughout the state.

Louisiana Constitution Article VII, section 18(E) provides:

The correctness of assessments by the assessor shall be subject to
review first by the parish governing authority, then by the Louisiana
Tax Commission or its successor, and finally by the courts, all in
accordance with procedures established by law.

“Fair market value” is defined in La. R.S. 47:2321 as follows:

Fair market value is the price for property which would be agreed
upon between a willing and informed buyer and a willing and
informed seller under usual and ordinary circumstances; it shall be the
highest price estimated in terms of money which property will bring if
exposed for sale on the open market with reasonable time allowed to
find a purchaser who is buying with knowledge of all the uses and
purposes to which the property is best adapted and for which it can be
legally used.

La. R.S. 47:2323 states, in pertinent part:

A. The criteria for determining fair market value shall apply uniformly
throughout the state. Uniform guidelines, procedures and rules and
regulations as are necessary to implement said criteria shall be

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adopted by the Louisiana Tax Commission only after public hearings
held pursuant to the Administrative Procedure Act.1

B. Each assessor shall follow the uniform guidelines, procedures, and
rules and regulations in determining the fair market value of all
property subject to taxation within his respective parish or district.
Any manual or manuals used by an assessor shall be subject to
approval by the Louisiana Tax Commission or its successor agency.

C. Criteria.

The fair market value of real and personal property shall be
determined by the following generally recognized appraisal
procedures: the market approach, the cost approach, and/or the
income approach.

(1) In utilizing the market approach, the assessor shall use an
appraisal technique in which the market value estimate is
predicated upon prices paid in actual market transactions and
current listings.

(2) In utilizing the cost approach, the assessor shall use a
method in which the value of a property is derived by
estimating the replacement or reproduction cost of the
improvements; deducting therefrom the estimated depreciation;
and then adding the market value of the land, if any.

(3) In utilizing the income approach, the assessor shall use an
appraisal technique in which the anticipated net income is
capitalized to indicate the capital amount of the investment
which produces the net income.

The Louisiana Supreme Court clarified the Commission’s role and authority

in the assessment process in Williams v. Opportunity Homes Ltd. P’Ship, 2017-

0955 (La. 3/13/18), 240 So.3d 161, as follows:

The responsibility of the Commission as the supervisory state agency
over parish tax assessors is clear. See also La. R.S. 47:1957(A) (“All
taxable property in the state, except public service properties, shall be
assessed by the several assessors. The assessors shall be responsible,
under the supervision of the tax commission, for listing and
assessing all property within their respective parishes, except such
property as is subject to direct assessment by the tax commission . . .
.”) (emphasis added); La. R.S. 47:1990 (“The tax commission may

1 La. R.S. 49:950 et seq.

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change or correct any and all assessments of property for the purpose
of taxation, in order to make the assessments conform to the true and
correct valuation . . . .”); Palmer v. Louisiana Forestry Commission,
97-0244 (La. 10/21/97), 701 So.2d 1300, 1303 (“When the legislature
has declared its will and fixed a ‘primary standard,’ agencies such as
the Commissions in the case sub judice have the power to ‘fill up the
details.’ ”).

Williams, 2017-0955, p. 5, 240 So.3d at 165, n. 3 (alteration in original).

In Axiall, LLC v. Assumption Par. Bd. of Rev., 2018-0542 (La. App. 1 Cir.

12/30/19), 302 So.3d 1136, the First Circuit stated:

When reviewing a final decision of an agency, the district court
functions as an appellate court. 201 St. Charles Place, LLC, [v.
Louisiana Tax Commission, unpub. 16-0510, p. 6 (La.App. 1 Cir.
2/17/17), 2017 WL 658752 at *3; EOP New Orleans, L.L.C. v.
Louisiana Tax Comm'n, 01-2966 (La.App. 1 Cir. 8/14/02), 831 So.2d
1005, 1008, writ denied[,] 02-2395 (La. 11/27/02), 831 So.2d 286. An
aggrieved party may obtain review of any final judgment of the
district court by appeal to the appropriate court of appeal. See LSA-
R.S. 49:965. On review of the district court’s judgment, no deference
is owed by the court of appeal to factual findings or legal conclusions
of the district court, just as no deference is owed by the Louisiana
Supreme Court to factual findings or legal conclusions of a court of
appeal. EOP New Orleans, L.L.C., 831 So.2d at 1008. The reviewing
court shall make its own determination and conclusions of fact by a
preponderance of the evidence, based upon its own evaluation of the
record reviewed in its entirety upon judicial review. Williams [v.
Opportunity Homes Limited Partnership, 17-0955 (La. 3/13/18)] 240
So.3d at 166. Consequently, this court will conduct its own
independent review of the record in accordance with the standards
provided in LSA-R.S. 49:964G.

Axiall, LLC, 2018-0542, pp. 7-8, 302 So.3d at 1142.

In D90 Energy, LLC v. Jefferson Davis Par. Bd. of Rev., 2020-00200 (La.

10/1/20), 341 So.3d 492, the Louisiana Supreme Court stated:

The scope of judicial review of agency adjudications is governed by
Louisiana Revised Statutes 49:964(F) and (G). Section (F) confines
that review to the administrative record established before the
Commission. Williams v. Opportunity Homes Limited Partnership,
17-0955 (La. 3/13/18), 240 So. 3d 161. Thus, the Assessor’s argument
that his valuations are entitled to deferential review is misplaced, as

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the law provides for judicial review of the administrative record
established before the Commission and of the final determinations
made by the Commission. Section (G) sets forth the standard for
judicial review:

The court may affirm the decision of the agency or remand the case
for further proceedings. The court may reverse or modify the decision
if substantial rights of the appellant have been prejudiced because the
administrative findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion; or

(6) Not supported and sustainable by a preponderance of evidence as
determined by the reviewing court. In the application of this rule, the
court shall make its own determination and conclusions of fact by a
preponderance of evidence based upon its own evaluation of the
record reviewed in its entirety upon judicial review. In the application
of the rule, where the agency has the opportunity to judge the
credibility of witnesses by first-hand observation of demeanor on the
witness stand and the reviewing court does not, due regard shall be
given to the agency's determination of credibility issues.

D90 Energy, LLC, 2020-00200, pp. 8-9, 341 So.3d at 498-499.

In determining the fair market value of the subject property in this matter,

the Assessor utilized the market approach, which is described in La. R.S.

47:2323(C)(1) as using “an appraisal technique in which the market value estimate

is predicated upon prices paid in actual market transactions and current listings.”

The Assessor presented evidence to the Commission of appraisals of properties

that the Assessor determined to be comparable to the subject lot. The taxpayer

presented evidence to the Commission of other factors specific to this property,

which the taxpayer alleged justified a lower assessed value than that determined by

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the Assessor. This information provided by the taxpayer included evidence that

this lot has only been used as greenspace and for water retention since the taxpayer

purchased it in 2016. Additionally, the taxpayer provided evidence of the

deplorable condition of the streets near this vacant lot.

The above-stated provisions of the Louisiana Constitution and Louisiana

Revised Statutes establish a process by which an Assessor determines the fair

market value of property subject to taxation, and the correctness of that assessment

is subject to review first by the parish governing authority, then by the

Commission or its successor, and finally by the courts. Given the Commission’s

established supervisory authority over the Assessor and, in this case, the Board of

Review, we conclude that it was within the Commission’s authority to consider the

evidence presented by the taxpayer that was specific to the property at issue in

addition to the evidence presented by the Assessor and the Commission in

determining the correctness of the assessment reached by the Assessor.

The Assessor also argues that the Commission’s ruling in favor of the

taxpayer herein should be overturned pursuant to La. R.S. 49:978.1(G) for being

arbitrary or capricious, an abuse of discretion, in excess of the statutory authority

of the agency, and/or not supported by a preponderance of the evidence. As stated

above, we find that the Commission did not exceed its authority in considering

evidence presented by the taxpayer in addition to the Assessor’s evidence

regarding his determination of fair market value of this subject property.

The Assessor contends that he presented competent evidence to support his

valuation of the property. The Assessor does not dispute that the current use of the

taxpayer’s property is for greenspace. However, the Assessor contends that a fair

market value determination must take into account “all of the uses and purposes to

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which the property is adapted and for which it can be legally used,” citing La. R.S.

47:2321.

The record also shows that the taxpayer presented competent evidence to

support a lower valuation of her property than that determined by the market

approach utilized by the Assessor. Specifically, the taxpayer presented evidence as

to features of her property that distinguish it from properties found to be

comparable by the Assessor. The taxpayer argues that by valuing all raw land in

Lakeview at the same price per square foot, the Assessor inequitably valued her

property by failing to take into account the varying condition of streets in

Lakeview and the usage of the lot as greenspace rather than a lot for sale/building

purposes.

In ruling in favor of the taxpayer, the Commission noted that it “evaluated

the credibility of the witnesses through the Commission’s first-hand observation of

their demeanor while testifying, and this decision is based upon those observations,

the testimony given, and the documents and exhibits provided during the hearing.”

As for the Assessor’s argument that the trial court improperly limited the review of

the administrative record to an arbitrary or capricious standard, we note that the

Assessor is referring to statements made by the trial court that are not in the

judgment being reviewed. “[R]easons for judgment do not form part of the

judgment, and appellate courts review judgments, not reasons for judgment.”

Wooley v. Lucksinger, 2009-0571, p. 77 (La. 4/1/11), 61 So.3d 507, 572, (first

citing Bellard v. American Cent. Ins. Co., 2007-1335, p. 25 (La. 4/18/08), 980

So.2d 654, 671; and then citing Greater New Orleans Expressway Commission v.

Olivier, 2002-2795, p. 3 (La. 11/18/03), 860 So.2d 22, 24).

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Considering the entirety of the record, the credibility determinations made

by the Commission and the applicable law, we find no merit in the Assessor’s

argument that the Commission’s ruling should be reversed. Considering the

factors for judicial review of an administrative agency’s adjudications set forth in

La. R.S. 49:964(G), we find that the Commission’s ruling was supported by a

preponderance of the evidence, and was not arbitrary nor capricious, an abuse of

discretion, in violation of constitutional or statutory provisions, in excess of the

statutory authority of the agency, made upon unlawful procedure nor affected by

other error of law. Accordingly, we affirm the trial court’s judgment upholding the

Commission’s decision in favor of the taxpayer.

AFFIRMED

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