Zabawa v. Douglas Cty. Bd. of Equal.

M ichael R. Z abawa , appellant, v.
D ouglas county boaRD of
equaliZation, appellee .
757 N.W.2d 522
Filed November 18, 2008. 	No. A-08-069.
1. Taxation: Judgments: Appeal and Error. Decisions rendered by the Tax
Equalization and Review Commission shall be reviewed by an appellate court for
errors appearing on the record of the commission.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appear-
ing on the record, an appellate court’s inquiry is whether the decision conforms
to the law, is supported by competent evidence, and is neither arbitrary, capri-
cious, nor unreasonable.
3. Taxation: Appeal and Error. Questions of law arising during appellate review
of Tax Equalization and Review Commission decisions are reviewed de novo on
the record.
4. Taxation: Valuation: Presumptions: Proof. To rebut the presumption that
a board of equalization properly performed its official duties, the burden of	he burden of
persuasion imposed on the complaining taxpayer is not met by showing a mere
difference of opinion unless it is established by clear and convincing evidence
that the valuation placed upon his property when compared with valuations
placed upon other similar property is grossly excessive and is the result of a
systematic exercise of intentional will or failure of plain duty.
5. Constitutional Law: Taxation: Valuation. Neb. Const. art. ����, �� 1, provides	Neb. Const. art. ����, �� 1, provides
that taxes shall be levied by valuation uniformly and proportionately upon all
real property.
6. Taxation: Valuation. Neb. Rev. Stat. �� 77-1501 (Cum. Supp. 2006) mandates
that the county board of equalization shall fairly and impartially equalize the
values of all items of real property in the county so that all real property is
assessed uniformly and proportionately.
7. Taxation: Valuation: Words and Phrases. Equalization is the process of ensur-
ing that all taxable property is placed on the assessment rolls at a uniform per-
centage of its actual value.
8. Taxation: Valuation. �f a taxpayer’s property is assessed in excess of the value at
which others are taxed, then the taxpayer has a right to relief.
9. Taxation: Valuation: Counties. Neb. Rev. Stat. �� 77-1502.01 (Reissue 2003)
reposes broad power in a county board of equalization to carry out its duty
to equalize.
Appeal from the Tax Equalization and Review Commission.
Reversed and remanded with directions.
Richard L. Anderson and John M. Prososki, of Croker,
Huck, 	Kasher, 	DeWitt, Anderson 	& 	Gonderinger, 	L.L.C.,
for appellant.
zAbAWA v. DouGLAS CTy. bD. oF EQuAL. 	221
Cite as 17 Neb. App. 221
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:14 AM CST

Donald W. Kleine, Douglas County Attorney, and Thomas S.
barrett for appellee.
inboDy, Chief Judge, and MooRe and cassel, Judges.
cassel, Judge.
�NTRoDuCT�oN
Michael R. zabawa appeals the order of the Nebraska Tax
Equalization and Review Commission (TERC) which upheld
the decision of the Douglas County board of Equalization
(the board) denying his property tax protest. Despite finding
zabawa’s property “highly comparable” to one afforded a sub-
stantial reduction in value through the protest process, TERC
concluded that the board had no duty to equalize the valuations
of comparable properties where both valuations were protested.
This resulted in zabawa’s property’s being taxed at market
value even though TERC determined the comparable property
was taxed at only 75.8 percent of market value. We find both a
constitutional and a statutory duty to equalize such valuations.
We therefore reverse, and remand with directions to reduce
zabawa’s value accordingly.
bACKGRouND
zabawa owns the property at issue, 668 Dillon Drive, which
is located in omaha, Douglas County, Nebraska. �t includes a
one-story, brick, ranch-style house that was built in 1963 and
has 2,871 square feet. The house has four bedrooms and three
bathrooms and sits on a .35-acre lot. �t also has an attached
garage and a partially finished basement. The Douglas County
assessor valued the property at $396,000 in 2006. The property
was previously valued at $263,800 in 2005.
zabawa filed a protest of the 2006 valuation with the board.
A referee then recommended that the property’s valuation be
reduced to $360,000 because he believed that zabawa’s house,
assessed at $137.94 per square foot, was most similar to a com-
parable property that had been assessed at $113.97 per square
foot. Subsequently, the referee coordinator recommended that
the original valuation stand and noted that zabawa’s property
value was in line with that of 676 Dillon Drive, a neighboring
property valued at $133 per square foot and $363,100 total.
The board adopted this recommendation.
222 	17 NEbRASKA APPELLATE REPoRTS

During the same period, the owner of 676 Dillon Drive
protested the valuation of his property with the board. A dif-
ferent referee heard his initial protest. zabawa testified that he
and the owner of 676 Dillon Drive both made the same argu-
ment—that the property valuation should be decreased because
the property on the other side of zabawa, 660 Dillon Drive,
was comparable and because there had been a sanitary sewer
backup in 2004 in that area. The taxable value of 676 Dillon
Drive was reduced to a “reconciled” value of $275,000, but the
“market” value was $362,547.
zabawa then appealed the board’s decision to TERC. on
December 3, 2007, TERC heard zabawa’s appeal. zabawa
introduced evidence regarding the comparability of 660 Dillon
Drive and 676 Dillon Drive, the comparability of 11 other
properties in the neighborhood, and the differing valuations of
his property and 676 Dillon Drive subsequent to similar valua-
tion protests. TERC upheld the board’s valuation. However,
in doing so, TERC also determined that zabawa’s property
and 676 Dillon Drive were “highly comparable” and noted
that the board had ultimately assessed the similar properties
at “greatly disparate taxable values.” TERC noted that the
“reconciled” postprotest value of 676 Dillon Drive was 75.8
percent of its total listed market value in the county records.
TERC also considered “whether the . . . board has a duty to
review and reconcile the results in all protests” and determined
that the board had no such duty. TERC also found that the
valuation of zabawa’s property was not the result of “inten-
tional ill will.”
zabawa timely appeals.
ASS�GNMENTS oF ERRoR
zabawa alleges 13 assignments of error, which we restate
and consolidate as follows: First, zabawa alleges that TERC
used an incorrect standard to review the board’s decision.
zabawa also asserts that TERC applied the standard of review
improperly. Finally, zabawa alleges that TERC improperly
upheld the board’s decision when it found that the subject
property and 676 Dillon Drive were “highly comparable” but
had “greatly disparate taxable values.”
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STANDARD oF RE��EW
[1-3] Decisions rendered by TERC shall be reviewed by an
appellate court for errors appearing on the record of the com-
mission. Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275,
753 N.W.2d 802 (2008). When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether
the decision conforms to the law, is supported by competent
evidence, and is neither arbitrary, capricious, nor unreasonable.
Id. Questions of law arising during appellate review of TERC
decisions are reviewed de novo on the record. Id.
ANALyS�S
Standard of Review.
[4] zabawa asserts that TERC used an incorrect standard of
review in deciding his case. under Neb. Rev. Stat. �� 77-5016(8)
(Supp. 2007), TERC’s standard of review in an appeal from the
board is as follows:
�n all appeals, excepting those arising under section
77-1606, if the appellant presents no evidence to show
that the order, decision, determination, or action appealed
from is incorrect, the commission shall deny the appeal.
�f the appellant presents any evidence to show that the
order, decision, determination, or action appealed from is
incorrect, such order, decision, determination, or action
shall be affirmed unless evidence is adduced establish-
ing that the order, decision, determination, or action was
unreasonable or arbitrary.
The Nebraska Supreme Court has construed this statutory stan-
dard of review to mean that
“[t]here is a presumption that a board of equalization
has faithfully performed its official duties in making
an assessment and has acted upon sufficient competent
evidence to justify its action. That presumption remains
until there is competent evidence to the contrary presented,
and the presumption disappears when there is competent
evidence adduced on appeal to the contrary. From that
point forward, the reasonableness of the valuation fixed
by the board of equalization becomes one of fact based
upon all the evidence presented. The burden of showing
224 	17 NEbRASKA APPELLATE REPoRTS

such valuation to be unreasonable rests upon the taxpayer
on appeal from the action of the board.”
Brenner, 276 Neb. at 283-84, 753 N.W.2d at 811 (quoting Ideal
Basic Indus. v. Nuckolls Cty. Bd. of Equal., 231 Neb. 653,
437 N.W.2d 501 (1989)). The court further explained that to	The court further explained that to
rebut the presumption that the board of equalization properly
performed its official duties,
“the burden of persuasion imposed on the complaining
taxpayer is not met by showing a mere difference of
opinion unless it is established by clear and convinc-
ing evidence that the valuation placed upon his property
when compared with valuations placed upon other similar
property is grossly excessive and is the result of a sys-
tematic exercise of intentional will or failure of plain
duty . . . .”
Brenner, 	276 	Neb. 	at 	284, 	753 	N.W.2d 	at 	812 	(quoting
Bumgarner v. County of Valley, 208 Neb. 361, 303 N.W.2d
307 (1981)).
For the most part, TERC’s decision set forth this standard of
review in the correct language. However, in the analysis portion
of TERC’s decision, it erred when it changed the words “inten-
tional will” to “intentional ill will.” Webster’s Encyclopedic
unabridged Dictionary of the English Language 711 (1989)
defines “ill will” as a “hostile feeling; antipathy; enmity.” The
taxpayer does not have to show that the board’s actions were
the result of its antipathy or a hostile feeling toward the tax-
payer—a showing of intentional error suffices. We agree that
the board did not intentionally commit the error, but this does
not end the analysis. Where the taxpayer succeeds in establish-
ing that the board’s valuation is grossly excessive to that of
comparable properties, the standard of review contemplates
two reasons sufficient to rebut the statutory presumption favor-
ing the board’s decision. Systematic exercise of intentional
will constitutes one reason, but the standard also specifies fail-
ure of plain duty as an equally sufficient basis.
Plain Duty.
zabawa argues that TERC defined the “plain duty” portion
of the standard of review incorrectly. TERC concluded that the
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board had no plain duty to equalize the disparate valuations of
comparable real properties provided that the differences were
the result of separate valuation protests. We disagree. Nebraska
law requires that comparable properties be valued similarly
and does not provide an exception merely because both owners
exercised their right to contest the valuations.
before turning to a discussion of the controlling law, we
observe that TERC found zabawa’s property and 676 Dillon
Drive to be highly comparable. �n the instant appeal, zabawa
relies on this determination, which finds substantial support
in the evidence. The properties were constructed at about the
same time—1963 and 1961, respectively. They are roughly the
same size—2,871 square feet compared to 2,728 square feet.
both were one-story, ranch-style homes constructed from simi-
lar materials. The Douglas County assessor rated both proper-
ties as being of “good” quality. From 1994 to 2005, zabawa’s
property had been valued at 107 to 110 percent of the taxable
value of 676 Dillon Drive. While the finished portion of the
basement of 676 Dillon Drive was 400 square feet larger than
zabawa’s basement, this would suggest a lower rather than
a higher valuation for the zabawa property. The assessor’s
records do differentiate the “condition” of the properties—
rating zabawa’s property as “good” condition while 676 Dillon
Drive was “average.” However, neither party suggests that
this difference undermines TERC’s finding of comparability.
There was no evidence in the record that suggested that either
property had undergone significant changes tending to affect
property values. zabawa testified that subsequent to purchas-
ing the property in 1998, he had only maintained its condition.
zabawa had repainted the wood portion of the exterior of the
house, replaced carpet, done some minor interior painting,
and replaced a backwater device. Despite all these similarities
between the two properties, after the tax protests were con-
cluded in 2006, zabawa’s property was valued at 144 percent
of the taxable value of 676 Dillon Drive.
[5,6] TERC’s conclusion that these comparable properties
need not be valued similarly directly contradicts Nebraska
law. The Nebraska Constitution provides that “[t]axes shall
be levied by valuation uniformly and proportionately upon all
226 	17 NEbRASKA APPELLATE REPoRTS

real property . . . .” Neb. Const. art. ����, �� 1. Neb. Rev. Stat.
�� 77-1501 (Cum. Supp. 2006) mandates that “[t]he county
board of equalization shall fairly and impartially equalize the
values of all items of real property in the county so that all real
property is assessed uniformly and proportionately.”
[7,8] Equalization is the process of ensuring that all tax-
able property is placed on the assessment rolls at a uniform
percentage of its actual value. Scribante v. Douglas Cty. Bd. of
Equal., 8 Neb. App. 25, 588 N.W.2d 190 (1999). �f a taxpayer’s
property is assessed in excess of the value at which others are
taxed, then the taxpayer has a right to relief. Cabela’s, Inc. v.
Cheyenne Cty. Bd. of Equal., 8 Neb. App. 582, 597 N.W.2d
623 (1999).
Even if the properties were not comparable, the board
could not value zabawa’s real property at its market value but
value 676 Dillon Drive at 75.8 percent of its market value. �n
Chief Indus. v. Hamilton Cty. Bd. of Equal., 228 Neb. 275,
422 N.W.2d 324 (1988), the taxpayer rebutted the presumption
that the county board of equalization’s decision was correct
by showing that the assessor had undervalued other land in
the county by 43 to 53 percent but had valued the taxpayer’s
dissimilar land at its full value. The court explained that “[t]he
right of a taxpayer whose property alone is taxed at 100 per-
cent of its true value is to have its assessment reduced to the
percentage of that value at which others are taxed.” Id. at 286,
422 N.W.2d at 331. See, also, Konicek v. Board of Equalization,
212 Neb. 648, 324 N.W.2d 815 (1982).
Nebraska law also makes it clear that when properties are
comparable to the extent that zabawa’s property was com-
parable with 676 Dillon Drive, the board has the plain duty
to value them similarly. The board’s failure to do so is suffi-
cient to rebut the presumption that its decision was correct. �n
Scribante, supra, a real property owner rebutted the presump-
tion that the county board of equalization was correct when
all parties agreed that the subject property was comparable to
a property which had a much lower per-square-foot valuation.
�n Scribante, the subject property was valued at $162.02 per
square foot and the comparable property was valued at $88.14
per square foot.
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because TERC found that zabawa’s property was highly
comparable to 676 Dillon Drive, and because TERC found that
the properties had “greatly disparate taxable values,” TERC
was incorrect to conclude that zabawa had not rebutted the
presumption that the board’s decision was correct. The board
had the plain duty under �� 77-1501 to value these comparable
properties at similar amounts. by adjudicating tax protests in
greatly disparate amounts—676 Dillon Drive at 75.8 percent
of its market value and zabawa’s comparable property at full
market value—the board failed to fulfill its “plain duty” to
equalize property valuations. zabawa rebutted the presumption
that the board’s decision was correct.
[9] TERC stated that the board had no duty to equalize
in this context, because Nebraska statutes do not expressly
provide for a procedure to rectify dissimilar protest results
for comparable real properties. We disagree. Section 77-1501
implements the constitutional mandate to value all real prop-
erty uniformly and proportionately. Moreover, Neb. Rev. Stat.
�� 77-1502.01 (Reissue 2003) reposes broad power in the board
to carry out its duty to equalize.
The county board of equalization, after considering all
papers relating to the protest and the findings and recom-
mendations of the referee, may make the order recom-
mended by the referee or any other order in the judgment
of the board of equalization required by the findings of
the referee, or may hear additional testimony, or may set
aside such findings and hear the protest anew.
Id. Thus, the statutes empower the board to carry out its duty
to equalize property tax values as required by �� 77-1501 and
provide the means to do so. The ultimate responsibility to
equalize valuations rests upon the board, and it cannot avoid
this duty by using the power to appoint referees.
Section 	77-5016(8) 	then 	required 	TERC 	to 	determine
whether the valuation of zabawa’s property was unreasonable
and arbitrary. To set the valuation of similarly situated property,
i.e., comparables, at materially different levels, i.e., value per
square foot, is by definition unreasonable and arbitrary, under
the Nebraska Constitution. Scribante v. Douglas Cty. Bd. of
Equal., 8 Neb. App. 25, 588 N.W.2d 190 (1999). We note that
228 	17 NEbRASKA APPELLATE REPoRTS

TERC ultimately valued zabawa’s property at its full market
value but found that 676 Dillon Drive was “highly comparable”
and valued at 75.8 percent of its market value. As a matter of
law, the board’s valuation of zabawa’s property was unreason-
able and arbitrary because it assigned substantially different
values to comparable properties. Thus, TERC erred in failing
to reduce the taxable value of zabawa’s property.
Pursuant to Chief Indus. v. Hamilton Cty. Bd. of Equal., 228
Neb. 275, 422 N.W.2d 324 (1988), zabawa is entitled to have
his property taxed at the same percentage of market value as
are other properties. Therefore, zabawa is entitled to relief as
a matter of law. zabawa requested a valuation of $290,000
before TERC. �n this case, zabawa is entitled to have his prop-
erty taxed at the same rate as 676 Dillon Drive, or 75.8 percent
of market value. Thus, in order to value zabawa’s property at
a rate that is not unreasonable or arbitrary, TERC must reduce
the tax valuation of zabawa’s property to $300,168.
CoNCLuS�oN
We conclude that TERC incorrectly applied the standard of
review. We reverse TERC’s determination that zabawa failed
to overcome the presumption that the board faithfully per-
formed its official duties. �n light of TERC’s factual findings
that zabawa’s property was “highly comparable” to the other
property and that the properties had ultimately been assessed at
“greatly disparate taxable values,” we determine as a matter of
law that the board failed to perform a plain duty when it failed
to equalize zabawa’s property valuation and that its valuation
of zabawa’s property was unreasonable and arbitrary. We find
that zabawa is entitled to relief as a matter of law and remand
this matter to TERC with directions to reduce the tax valuation
of zabawa’s property to $300,168.
R eveRseD anD ReManDeD with DiRections.
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Cite as 17 Neb. App. 221