Evidence

Confessions – Corroboration – Confrontation – Inadmissible Expert Reports

State v. Thomas, 2023 WI 9 (filed Feb. 21, 2023)

HOLDINGS: 1) Sufficient evidence corroborated the defendant’s confession. 2) The state’s use of an inadmissible report from an expert was harmless error.

SUMMARY: The defendant was convicted for the sexual assault and murder of his wife. In a published decision, the court of appeals affirmed the conviction. See 2021 WI App 55.

The supreme court also affirmed, albeit in two different opinions that addressed separate issues. First, a majority opinion authored by Justice Roggensack held that sufficient evidence corroborated the defendant’s “confession” to various aspects of the crimes, especially the sexual assault charge. The case law requires only that “some” evidence support the charge independent of the confession; the state need not corroborate all elements of the crime. In this situation, for example, a neighbor overheard the victim’s screams (see ¶ 21).

A second issue was the state’s use of an inadmissible DNA report when cross-examining a defense expert. The DNA report was inadmissible testimonial hearsay under the Sixth Amendment confrontation right because it was prepared for trial and the report’s author did not testify. Four justices concurred in an opinion authored by Justice Dallet that the state’s cross-examination and closing argument had used the DNA report for its truth, contrary to the confrontation right.

Relying on Hemphill v. New York, 142 S. Ct. 681 (2022), six justices also found that the DNA report could not be used to correct any “misleading impressions” fostered by the defense expert. In the end, though, seven justices agreed that any error was harmless.

Taxation

Property Tax Assessments – Sales Comparison Approach – Presumption of Correctness of Assessor’s Valuation

Lowe’s Home Ctrs. LLC v. City of Delavan, 2023 WI 8 (filed Feb. 16, 2023)

HOLDINGS: 1) The property tax assessments in this case were properly afforded a statutory presumption of correctness. 2) The plaintiff did not present significant contrary evidence sufficient to overcome the presumption of correctness.

SUMMARY: Lowe’s Home Centers LLC (Lowe’s) challenged the 2016 and 2017 tax assessments on its store in Delavan. It sought a waiver of its hearing before the city’s board of review. The board granted the waiver, thereby disallowing the challenge. After the claim by Lowe’s was disallowed, Lowe’s filed this action under Wis. Stat. section 74.37(3)(d), asserting that the assessments of its property for the years in question were excessive and seeking to recover the excess taxes paid. After a bench trial, the circuit court upheld the city’s assessments.

The court of appeals affirmed the circuit court in an unpublished per curiam decision. In a majority opinion authored by Justice A.W. Bradley, the supreme court affirmed the court of appeals.

Lowe’s argued that the city’s assessments should not have received the presumption of correctness provided for in Wis. Stat. section 70.49(2) because they were conducted in violation of the dictates of the Wisconsin Property Assessment Manual (the Manual). Lowe’s further contended that the big-box retail locations about which it presented data to the court are comparable to the subject property and thus should have been considered in the city’s assessments.

The majority rejected the argument made by Lowe’s that the city’s assessments should not have received the statutory presumption of correctness because they were not conducted according to the Manual. The majority said that Wis. Stat. section 70.49(2) is clear that the presumption of correctness attaches at the filing of the assessment by the assessor along with a required affidavit (see ¶ 35). The court determined that the assessments in this case were properly afforded a presumption of correctness (see ¶ 4).

The next issue was whether Lowe’s provided significant contrary evidence that was sufficient to overcome the presumption of correctness. The supreme court concluded that Lowe’s failed to do so.

Using the sales comparison approach to determine the fair market value of the Lowe’s property, the Lowe’s expert compared the Lowe’s property to six other recently sold big-box properties. However, all six were vacant at the time of sale (see ¶ 41). Two of the vacant properties were “dark,” meaning that they were vacant beyond the normal period for that commercial real estate marketplace (see ¶ 46). Three other vacant properties that the Lowe’s expert relied on for making comparisons were distressed properties under receivership at the time of sale.

The Manual provides that assessors “should avoid using sales of improved properties that are vacant (‘dark’) or distressed as comparable sales unless the subject property is similarly dark or distressed” (¶ 44). The Manual also counsels against the use of properties in receivership as comparable (see ¶ 58). In contrast to the Lowe’s expert, the city’s expert used comparable properties that were not dark or distressed; all were occupied at the time of sale (see ¶ 66).

The circuit court determined that the evidence presented by Lowe’s was significantly less credible than that presented by the city with regard to the value to be attached to the Lowe’s property for the tax years in question (see ¶ 19). Giving deference to the circuit court’s factual findings, including its credibility determinations, the supreme court held that Lowe’s did not provide significant contrary evidence that was sufficient to overcome the presumption that the assessments of the Lowe’s property were correct (see ¶ 74).

The supreme court did not read the Manual to strictly prohibit the use of vacant properties as comparable to occupied properties. It interpreted the Manual’s“should avoid” language to mean that “the comparability of vacant properties to occupied properties exists along a continuum depending upon how long the property has been vacant as compared to the normal exposure time for a property of that type in the same geographic area. We emphasize that the Manual urges assessors to use caution in utilizing such comparables, as the economics underlying a vacancy may be indicative of a meaningful difference in the circumstances of the properties” (¶ 71).

Justice R.G. Bradley filed a concurring opinion that was joined in by Justice Roggensack.

Sales Tax – Exemptions – Leases – Aircraft Parts

Citation Partners LLC v. Wisconsin Dep’t of Revenue, 2023 WI 16 (filed March 1, 2023)

HOLDING: Engine-maintenance and repair costs that an aircraft’s owner included in the hourly rates charged to aircraft lessees are subject to sales tax and do not fall within a tax exemption for aircraft parts and maintenance.

SUMMARY: Citation Partners owned an aircraft that it leased to third parties. A contract obligated Citation to handle repairs and maintenance for the lessees. A “side agreement” specified the lease’s financial terms, including the costs for repair and maintenance, which were substantially similar to the charges Citation paid to its vendors.

In 2013, the Wisconsin Legislature added the sale of aircraft parts and maintenance to the list of tax-exempt activities. Citation then stopped collecting sales tax on the repairs and maintenance charged to the lessees. In 2017, the Wisconsin Department of Revenue notified Citation that it owed unpaid sales taxes for the aircraft repairs and maintenance.

The Tax Appeals Commission denied Citation’s appeal. The circuit court reversed the commission but, in a published decision, the court of appeals reversed the circuit court. See 2021 WI App 86.

The supreme court affirmed the court of appeals in a majority opinion authored by Justice Dallet. The majority reviewed the commission’s decision, not the circuit court’s (see ¶ 8). Citation argued “that since the plain language of both exemptions covers the costs of aircraft repairs and engine maintenance, then ‘the reimbursement payments that Citation Partners receives from the Lessees are exempt from sales tax’” (¶ 13).

The majority disagreed. “Simply put, Citation Partners does not sell its Lessees ‘parts used to modify or repair aircraft,’ or ‘repair, service, … and maintenance of any aircraft.’ … It leases its aircraft to the Lessees. And as explained previously, the statutes already make clear that the total amount of consideration paid on an aircraft lease is taxable without any deduction for the Lessor’s costs.… When Citation Partners (or the Lessees for that matter) buy aircraft repairs or engine maintenance directly, those transactions are tax-exempt. But when Citation Partners passes those costs along to its customers as part of the total amount of consideration in a lease, that transaction is taxable” (¶ 14).

The majority also rejected Citation’s contention that it only serves as the lessees’ “agent” when it repairs and maintains the aircraft. The pertinent contract language indicated that Citation, as the aircraft’s owner, “is the one in charge of repairs and engine maintenance, and that the Lessees do not control” how Citation fulfills its duties (¶ 21).

Justice Roggensack dissented, joined by Chief Justice Ziegler and Justice R.G. Bradley. The dissent focused on statutory interpretation and “plain meaning” methodology (¶ 23).

» Cite this article: 96 Wis. Law. 52-53 (April 2023).