Today's case is a short one, but worth the short bit of your time it takes to read it.
In Borders-Self Storage & Rentals, LLC v. Ky. Transp. Cabinet, No. 2019-CA-000217 (July 2, 2020), the Kentucky Court of Appeals held that the assessed value of property for property tax purposes is admissible if the value was fixed by the property owner, and the condemnor offers it as an admission against interest. But if the landowner offers the same property tax assessed value, it is not admissible.
The Court of Appeals didn't make up this uneven rule, but was merely applying a long-standing rule in Kentucky, first adopted by the Kentucky Supreme Court in Culver v. Commonwealth, Department of Highways, 459 S.W.2d 595, 597-98 (Ky. 1970). And the Court of Appeals has to follow Supreme Court precedent.
After Borders upgraded the property, it commissioned an appraisal which, in accordance with the law, it submitted to the property tax assessor. That resulted in a higher tax assessed value. The DOT condemned, and Borders wanted the jury to hear the higher tax value, as evidence the property being condemned was worth more in its "before" condition. Borders pointed to the rule that a condemnor can introduce evidence of the tax assessed value if (as here) the value was "fixed by the owner." It is an admission against interest.
That same rule should be a two-way street, Borders argued. The Court of Appeals agreed with the logic but held that "we are compelled to conclude that the circuit court properly excluded evidence of assessed tax value sought to be introduced by Borders." Slip op. at 5. That darn Culver case!
Not content to go gentle into that good night, the Court of Appeals teed the issue up for further review:
While bound by Supreme Court precedent, we may, nonetheless, express our disagreement therewith. SCR 1:030(8)(a); Special Fund v. Francis, 708 S.W.2d 641, 642 (Ky. 1986). The exclusion of the assessed tax value of real property when offered into evidence by the landowner, as opposed to the Commonwealth, strikes us as fundamentally unfair and legally unsound. Herein, Borders submitted the appraised value of the real property to the PVA who reviewed and accepted the valuation. This appraised value became the tax assessment for the real property. The assessed tax value offered by Borders is directly relevant to the fair market value of its real property and should have been admitted into evidence. At minimum, it is evidence that a jury should be allowed to consider. Any challenge to the assessed tax value as not representing the fair market value of the real property should properly go to the weight of the evidence and not the admissibility thereof. We encourage the Supreme Court to reconsider its precedents holding otherwise.
Slip op. at 5-6 (footnote omitted).
Borders Self-Storage & Rentals, LLC v. Ky. Transp. Cabinet, No. 2019-CA-000217 (Ky. App. July 2, 2020)
