Scott and Dawn Hagedorn v MDOR

BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN,
Appellants,
V.
STATE OF MONTANA,
DEPARTMENT OF REVENUE,
Respondent.
AUG 19 2026
CASE : PT-2026-11 '0^302 '
FINDINGS OF FACT,
CONCLUSIONS OF LAW, ORDER,
AND OPPORTUNITY FOR
JUDICIAL REVIEW
STATEMENT OF THE CASE
This is an appeal of a final decision by the Madison County Tax Appeal Board
(CTAB) denying Scott and Dawn Hagedom (Taxpayers) a reduction in value on the
subject property with an assigned geocode of 25-0784-29-1-01-02-0000, located near
Twin Bridges, Montana (Subject Property). The Taxpayers appealed that outcome to
the Montana Tax Appeal Board (MTAB) on Febmary 19, 2026. Appeals PT-2026-5,
PT-2026-10, and PT-2026-11 involve the same Taxpayers and were heard on the same
record. This decision only addresses PT-2026-11. However, the Board took judicial
notice of foundational information related to all three cases for judicial efficiency. The
Board affirms the CTAB's determination.
ISSUE TO BE DECIDED
Whether the CTAB enred in denying the Taxpayers' request for a value reduction
on the Subject Property.
EXHIBIT LIST
The following evidence was submitted at the hearing:
Taxpayer Exhibits:
1. Withdrawn;
2. Withdrawn;
3. CTAB Hearing Determination - PT-2026-10 and PT-2026-11;
4. Multi-Parcel Exclusion and Ignored Comparable Sales;
5. Land Model Inequality - PT-2026-10 and PT-2026-11;
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORNv. STATE OF MONTANA, DEPARTMENT OF REVENUE
6. Overvaluation Evidence Package - PT-2026-10 and PT-2026-11;
7. CTAB Attachments - PT-2026-10 and PT-2026-11;
8. Nearby Comparable Sales - Rochester Road and Rochester Basin;
9. Department Supplemental Discovery - Refused Requests and
Contradictions;
10. Department Supplemental Discovery Response Email, dated May 7,
2026;
11. Photograph of Department Document Production Box;
12. Withheld Communications and Privilege Logs;
13. Bob Finstad - Undisclosed Department Participant;
14. Mark Wood - Department's Appraiser; and
15. Aerial Maps of Comparable Properties.
DOR Exhibits:
A. Land Model;
B. AB-26 Determination Letter; and
C. Property Record Card.
PROCEDURAL HISTORY
The Department of Revenue (Department) initially valued the Subject Property
at $43,861 for the 2025-2026 appraisal cycle. Ex. B. The Taxpayers filed an AB-26
Request for Informal Classification and Appraisal Review with the Department, and the
Department issued a Form AB-26 Determination Letter on November 26, 2025, raising
the value of the Subject Property from $43,861 to $50,790. Id. The Taxpayers appealed
the Department's determination to CTAB on December 23, 2025. MTAB Dkt. 3. The
CTAB hearing was held on January 16, 2026, and the CTAB's decision denying the
Taxpayers' requested reduction was sent to the parties on January 16, 2026. MTAB Dkt.
3; MTAB Hr 'g Tr. 171:22-23. The Taxpayers appealed to MTAB on February 1 9,2026,
per Mont. Code Ann. § 15-2-301, requesting a total value of $27,500. MTAB Dkt. 1.
The MTAB hearing was conducted in Helena on May 21, 2026, at which the following
were present:
a. Dawn Hagedom, Taxpayer; and
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DA WN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
b. Dave Burleigh, Department Counsel; Michele Peterson-Cook,
Department Counsel; Kandy Fleurisma, Paralegal; Tina Oliver, Area
Manager; and Katelyn Thomton, Modeler.
The record includes all materials submitted to CTAB, a recording of the CTAB
hearing, all materials submitted to MTAB with the appeal, additional exhibits submitted
by the parties prior to and at the MTAB hearing, and a transcript of the MTAB hearing.
FINDINGS OF FACT
1. To whatever extent the following findings of fact may be constmed as
conclusions of law, they are incorporated accordingly.
2. The Subject Property is a vacant parcel owned by Scott and Dawn Hagedom.
Ex. C. The Subject Property has no situs address and is located in Section 29,
Township 02 South, Range 07 West near Twin Bridges, Montana. Id. The
Subject Property is also identified by its assigned geocode 25-0784-29-1-01-
02-0000. Id. The Subject Property is 11.796 acres in total size and contains no
improvements. Id.
3. The Department initially appraised the Subject Property's total value at
$43,861 for the 2025-2026 appraisal cycle. Ex. B. During the AB-26 infonnal
review, the Department conducted an off-site record review because the
Taxpayers did not consent to photographs being taken of the Subject Property.
Ex. B; MTAB Dkt. 3. As a result of the off-site record review, the Department
raised the Subject Property's total value to $50,790 due to changing the Subject
Property's land type from non-qualified agricultural land to residential property
and removing improvements to an adjacent parcel which were incorrectly listed
as belonging to the Subject Property. Ex. B. The Taxpayers appealed the
Department's valuation to CTAB and the CTAB denied the Taxpayers' request
for a value reduction and upheld the Department's value at the January 16,
2026, hearing. A4TAB Dkt. 3; MTAB Hr'g Tr. 171:22-23. The Taxpayers
appealed to MTAB on February 19, 2026, and asserted that the total value of
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORNv. STATE OF MONTANA, DEPARTMENT OF REVENUE
the Subject Property should be $27,500. MTAB Dkt. 1. The Department
maintains that the correct value for the Subject Property is $50,790. MTAB
Hr'gTr. 192:23.
4. Ms. Hagedom testified on cross-examination that she has worked in real estate
and has previously conducted market analysis for clients. MTAB Hr 'g Tr.
179:12-13. Ms. Hagedom also stated that she has prior experience appraising
properties. Id. However, Ms. Hagedom acknowledged that she is not a fee
appraiser. MTAB Hr 'g Tr. 176:16-21.
5. Ms. Hagedom asserted that the Department has withheld large amounts of non-
privileged communications. MTAB Hr'g Tr. 24:8-25:6. Ms. Hagedom argued
that the withheld communications cannot all be privileged stating, "So are we
supposed to believe that that's the only time they ever talked about our
property between two staff members that weren't legal counsel?" MTAB Hr'g
Tr. 24:8-14. Ms. Hagedom also stated, "It seems to me like there's a lot of
withheld staff to staff communications, but how would I know?" Id.
6. Ms. Hagedom testified that the two Department employees. Bob Finstad and
Mark Wood, were undisclosed participants in the review process and notice of
their participation was improperly withheld during the discovery process. Ex.
13, 14; MTABHr'gTr. 25:7-27:2.
7. Ms. Hagedom argues that the Department raising the total value of the Subject
Property from $23,162 in 2024 to $50,790 in 2025 within a single reappraisal
cycle is excessive. MTAB Hr'g Tr. 172:15-17, 174:13-18. Ms. Hagedom noted
that the Department's value represents a 119% increase for the Subject
Property. MTAB Hr 'g Tr. 172:15-17, 174:13-18. Ms. Hagedom contends that
the Department incorrectly used the cost approach rather than the sales
comparison approach to value the Subject Property. MTAB Hr 'g Tr. 173:1-5.
Ms. Hagedom stated that her argument is based on the Department's provided
appraisal methodology, which describes the sales-comparison approach as the
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
Department's primary land-valuation method and preferred method for
residential property. Ex. 6; MTAB Hr'g Tr. 175:6-8.
8. Ms. Hagedom asserts that the Department improperly relied upon subdivision
lots as comparable properties in its land model to determine the value of the
Subject Property. Ex. 6; MTAB Hr'g Tr. 173:10-24. Ms. Hagedorn stated that
the per-acre sale prices of the subdivision lots range between $10,000 and
$15,000 and are not comparable to the Subject Property. Id. Ms. Hagedom
further stated that the sales used by the Department in its land model are
located too far away from the Subject Property to be comparable and properties
closer in proximity were improperly excluded. Ex. 6; MTAB Hr 'g Tr. 173:5-
174:3. Ms. Hagedom argued that the land model used by the Department to
value the Subject Property is structurally flawed and is causing the same
inequitable valuation increase to be attributed to all parcels within the model.
Ex. 6; MTABHr'g Tr. 173:5-24.
9. Ms. Hagedom provided a list of six nearby sales to the Department which she
contends are more comparable to the Subject Property than the sales used by
the Department. Ex. 8; MTAB Hr'g Tr. 111:16-25. Five of the six Taxpayer-
provided sales occurred before the January 1, 2024, lien date, and one occurred
after. Ex. 8; MTAB Hr'g Tr. 111:16-23. Ms. Hagedom calculated an average
price of $2,191 per acre for the five pre-lien-date sales. Ex. 8; MTAB Hr'g Tr.
111:16-23. Including the post-lien-date sale, the calculated average is $2,366
per acre. Ex. 8; MTAB Hr'g Tr. 111:16-23. The Department included one of
Ms. Hagedom's provided sales in the land model but excluded the remaining
sales because two involved multi-parcel sales, two exceeded the Department's
acreage limit, and one occurred after the lien date. MTAB Hr'g Tr. 111:24-
112:2, 146:4-20, 147:17-148:3. Ms. Hagedom stated that the Taxpayers'
requested value of $27,500 for the Subject Property equates to approximately
$2,331 per acre, which is within the range of every nearby comparable sale.
MTABHr'gTr. 175:9-11.
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DA WN HAGEDORN v. STA TE OF MONTANA, DEPARTMENT OF REVENUE
10. On cross-examination, Ms. Hagedorn acknowledged that large agricultural
parcels differ from tract land and non-qualified agricultural land. MTAB Hr'g
Tr. 178:19-24. Ms. Hagedom further acknowledged that large agricultural
parcels should not be used to value tract land and non-agricultural land. Id. Ms.
Hagedom agreed that property values are based on use, location, and market
behavior. MTAB Hr 'g Tr. 179:15-23.
11. Department Area Manager, Tina Oliver, testified that the Department used a
multiplicative land model to value the Subject Property. Ex. A; MTAB Hr 'g Tr.
53:6-15. The Subject Property is included in Department neighborhood
225.001, which encompasses the Rochester Road area. Ex. A. Within the land
model, Rochester Road properties receive Category 1 pricing based on two
sales from that area. Ex. A; MTAB Hr'g Tr. 53:6-15. Category 1 establishes a
one-acre base value of approximately $17,585, which is 41% of the model's
$42,471 standard base rate. Ex. A; MTAB Hr'g Tr. 53:6-15. The model's base
size is one acre, and the standard base rate represents the modeled value for one
uninfluenced acre. Ex. A; MTAB Hr'g Tr. 53:6-20, 182:6-183:3. Ms. Oliver
explained that the Department utilizes influences and category pricing to
account for differences in parcel characteristics. MTAB Hr'g Tr. 185:23-25.
Ms. Oliver confirmed that the 41% influence factor for the Category 1 land
type is based on the location and amenities available to the Subject Property,
which is supported by market data. MTAB Hr 'g Tr. 186:1-7.
12. Ms. Oliver testified that the formula for the multiplicative land model the
Department used is Y = B(X / K)M, where Y is the market value, B is the
applicable base rate, X is the Subject Property size, K is the model's base size,
and M is the incremental rate. Ex. A; MTAB Hr'g Tr. 136:23-137:21. The
Category 1 base rate is $17,585, the Subject Property's size is 11.796 acres, the
land model's base size is 1 acre, and the incremental rate for the land model is
0.43. Ex. A, C; MTAB Hr'g Tr. 182:9-25. Ms. Oliver testified that inputting
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
these values into the formula produces an appraised value of $50,790 for the
Subject Property. Ex. C; MTABHr'g Tr. 182:9-25.
13. Ms. Oliver explained that the incremental rate adjusts value based on the
additional acres beyond the first base acre. MTAB Hr'g Tr. 140:4-7. Moreover,
Ms. Oliver stated that the 41% influence factor indicates that the Category 1
land type's base rate is 41% of the land model's base rate. Ex. A; MTAB Hr'g
Tr. 138:19-24.
14. Ms. Oliver testified that during the AB-26 infomial review, former Department
Appraiser, Mark Wood, changed the land type of the Subject Property from
non-qualified agricultural land to residential property and moved improvements
that were incorrectly attributed to the Subject Property to the neighboring
parcel based on real-time GPS positioning. Ex. B, C; MTAB Hr'g Tr. 183:17-
22. Ms. Oliver explained that during the AB-26 review, it was determined that
based on ownership, the Subject Property is not contiguous with the
neighboring parcel. Ex. B, C; MTAB Hr'g Tr. 183:17-184:10. Ms. Oliver stated
that non-qualified agricultural land consists of parcels between 20 and 160
acres in total size and the Subject Property being deemed non-contiguous to its
neighboring parcel places the Subject Property below the threshold, resulting in
the change to residential property. Ex. B, C; MTAB Hr 'g Tr. 183:17-184:10.
15. Ms. Oliver testified on cross-examination that only one of Ms. Hagedom's six
proposed comparable sales was included in the land model. MTAB Hr 'g Tr.
147:24-148:3. The Best Shot property sold for $39,900 in June 2022,and was
time-adjusted to the January 1, 2024, lien date. MTAB Hr'g Tr. 147:24-148:3.
Ms. Oliver testified that the Taxpayers' five remaining provided sales do not
qualify as comparables to the Subject Property for various reasons. MTAB Hr'g
Tr. 146:10-11. Two of the sales exceeded 25 acres in size and parcels greater
than 25 acres are not used in the Department's land models according to policy.
Ex. 6, Ex. 8; MTAB Hr'g Tr. 147:19-24, 183:4-12. Two other sales were
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
excluded due to being multi-parcel transactions. Ex. 6, Ex. 8; MTAB Hr'g Tr.
146:13-147:10. The Department excluded those sales because the parcels were
conveyed together under one warranty deed and realty transfer certificate,
preventing the Department from being able to determine the value attributable
to each parcel. Ex. 6, Ex. 8; MTAB Hr'g Tr. 146:13-147:10. The remaining sale
occurred after the January 1, 2024, lien date and was therefore not included in
the Department's land model for the 2025-2026 appraisal cycle. Ex. 6, Ex. 8;
MTABHr'gTr. 149:4-8.
16. Ms. Oliver stated that the Department has not received an agricultural
application from the Taxpayers for the Subject Property. MTAB Hr 'g Tr.
184:22-23. Ms. Oliver testified that if two parcels are contiguous, under the
same ownership, and at least one of the parcels is over 20 acres, the properties
would both be categorized as non-qualified agriculhiral land. MTAB Hr 'g Tr.
185:10-19.
17. Ms. Oliver testified that for the 2025-2026 tax cycle, the Subject Property was
valued using the cost approach due to its status as vacant land. Ex. 6, C; MTAB
Hr'g Tr. 188:13-15. The Department used sales from Silver Star, Jefferson
Acres, Box L, Jefferson River Ranches, and Rural Twin in the land model used
to value the Subject Property. Ex. A; MTAB Hr 'g Tr. 189:14-15. Ms. Oliver
testified that the Subject Property's land value increased due to new sales that
were incorporated into the land model and older sales being removed based on
their time of sale from the lien date. Ex. A; MTAB Hr 'g Tr. 191:13-192:4.
18. Ms. Oliver testified on cross-examination that the sales in the land model are
comparable to the Subject Property because they have a direct impact on the
Rochester area market. MTAB Hr 'g Tr. 150:8-17. Ms. Oliver further testified
that the Department needs sales to create the land model and the sales in the
Rochester Road area act as the foundation needed to create the influenced base
rate. Id.
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
19. Ms. Oliver testified that Mark Wood performed the Subject Property's AB-26
informal review but is no longer employed by the Department. Ex. B; MTAB
Hr'gTr. 49:18-50:2.
20. Ms. Oliver testified that Bob Finstad is employed by the Montana State
Infonnation Technology Services Division, and his only involvement with the
informal review was to verify when pictures would be removed from the
Department's internal systems pursuant to the Taxpayers' request. MTAB Hr'g
Tr. 51:11-16.
21. Department Modeler, Katelyn Thomton, testified that the Department uses the
cost approach for all vacant land. MTAB Hr'g Tr. 155:24. Ms. Thomton
clarified that while the cost approach is the stated method used to value the
Subject Property, land models determine land value by comparing sales similar
to market modeling. MTAB Hr'g Tr. 158:8-12. Ms. Thomton stated that it is
the Department's general practice to exclude multi-sale properties and
properties over 25 acres from the land model. MTAB Hr'g Tr. 156:6-18.
22. Ms. Thornton testified that the Department utilizes multiple statistical checks to
ensure the accuracy of its land models, including the coefficient of dispersion
(COD), coefficient of variation (COV), R-squared value, and t-stat. Ex. A;
MTAB Hr'g Tr. 91:6-12. The COD is based on the average absolute deviation
of the data and a COD between five and fifteen percent indicates good
appraisal uniformity, meaning that there are no major outliers skewing the data.
Ex. A; MTAB Hr'g Tr. 91:18-24. The COV is based on the ratio of the standard
deviation from the mean and a COV of less than twenty is preferred. Ex. A;
MTAB Hr'g Tr. 92:1-17. The R-squared value indicates how well a regression
model fits the data and a value closer to 1.00 is preferred. Ex. A; MTAB Hr'g
Tr. 92:1-17. The t-stat is a ratio that conveys whether the difference between
two sample means occurred by chance and a t-stat higher than two or lower
than negative two is preferred. Ex. A; MTAB Hr'g Tr. 92:1-17. For the Subject
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
Property's land model, the COD is 9.27, the COV is 12.81, the R-squared value
is 0.96, and the t-stat is -7.33, all of which are within the desired range and
indicate a reliable and accurate land model. Ex. A; MTAB Hr 'g Tr. 91:20-93:3.
Ms. Thomton stated that the t-stat of-7.33 indicates that the Subject Property's
Rochester Road area differs from the model's baseline statistically, and that the
difference is unlikely to have occurred by chance. MTAB Hr'g Tr. 196: 1-5.
JURISDICTION AND STANDARD OF REVIEW
23. The Montana Tax Appeal Board is an independent agency not affiliated with
the Montana Department of Revenue. Mont. Const., Art. VIII § 7; Mont. Code
Ann. § 15-2-101. The Taxpayers filed a timely appeal of the Department's
decision to the MTAB. Therefore, this Board maintains jurisdiction to hear and
decide this matter. Mont. Code Ann. §15-2-301.
24. When reviewing a county tax appeal board decision under Mont. Code Ann. §
15-2-301, MTAB acts as a quasi-appellate body with authority to supplement
the record and is limited to issues properly preserved for appellate review.
0 'Brien v. Mont. Dep 't of Revenue, 2026 MT 132, ^72.
25. The Board's order is final and binding upon all parties unless changed by
judicial review. Mont. Code Ann. § 15-2-301(6).
CONCLUSIONS OF LAW
26. To whatever extent the following conclusions of law may be construed as
findings of fact, they are incorporated accordingly.
27. "Alltaxable property must be appraised at 100% of its market value...." Mont.
Code Ann. § 15-8-111.
28. "[1]n connection with any appeal under [Mont. Code Ann. § 15-2-301], the
Montana board is not bound by common law and statutory rules of evidence or
10

y
BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA. DEPARTMENT OF REVENUE
rules of discovery and may affirm, reverse, or modify any decision. To the
extent that this section is in conflict with the Montana Administrative
Procedure Act, this section supersedes that act." Mont. Code Ann. § 15-2-
301(5).
29. DOR is entitled toa "presumption of correctness if its decisions are pursuant to
an administrative rule or regulation, and the rule or regulation is not arbitrary,
capricious or otherwise unlawful." Burlington N., 169 Mont. at 214, 545 P.2d
at 1090. However, DOR cannot rely entirely on the presumption in its favor
and must present a modicum of evidence showing the propriety of their action.
Western Air Lines v. Michunovich, 149 Mont. 347, 353, 428 P.2d 3, 7 (1967).
30. The Taxpayer bears the burden of proving the error of DOR'S decision.
Farmers Union Cent. Exch. v. Dep't of Revenue, 272 Mont. 471, 476, 901 P.2d
561, 564 (1995); Western Air Lines, 149 Mont. at 353, 428 P.2d at 7.
31. '"Assessment formulations' by [the Montana Tax Appeal Board] should be
upheld unless there is a clear showing of an abuse of discretion." Peretti v.
Dep't of Revenue, 2016 MT 105, ^ 15, 383 Mont. 340, 344, 372 P.3d447, 450
(citing 0 'Neill v. Dep 't of Revenue, 2002 MT 130, ^ 23, 310 Mont. 148, 155,
49 P.3d 43, 47); see Northwest Land & Dev. v. State Tax Appeal Bd., 203
Mont. 313, 317, 661 P.2d 44, 47 (1983).
32. "When faced with a problem of statutory construction great deference must be
shown to the interpretation given the statute by the officers or agency charged
with its administration." Dep 't of Revenue v. Puget Sound Power & Light Co.,
179 Mont. 255, 262, 587 P.2d 1282, 1286 (1978) (citing Udall v. Tollman, 380
U.S. 1,16(1965)).
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DA WN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
33. "[T] ax statutes are to be strictly constmed against the taxing authority and in
favor of the taxpayer." Western Energy Co. v. Dep 't of Revenue, 1999 MT 289,
^ 10, 297 Mont. 55, 58, 990 P.2d 767, 769.
34. The Legislature intended the Department to utilize a number of different
approaches or combination of approaches, including the income approach,
sales comparison approach, and cost less depreciation approach, depending on
the market where the appraisals take place, when it assesses property and
estimates market value. Albrightv. State, 281 Mont. 196, 208-09, 933 P.2d
815, 823 (1997).
DISCUSSION
35. The Taxpayers argue that the Subject Property's appraised value of $50,790 for
the 2025-2026 appraisal cycle is excessive and assert that a value of $27,500 is
more accurately reflects its market value. The Taxpayers allege a number of
deficiencies in the Department's valuation of the Subject Property. The
Taxpayers argue that the Department improperly used the cost approach rather
than the sales comparison approach to value the Subject Property, excluded
relevant nearby sales from the land model, utilized incomparable subdivision
lots in the land model, and did not adjust sales in the land model for factors
such as access disparity and distance from the Subject Property.
36. The Department maintains that the correct appraised value for the Subject
Property is $50,790 and the appraisal conforms to industry standards. The
Department contends that the cost approach was the correct valuation method
to use when valuing the Subject Property due to it being vacant land. The
Department explained that the Taxpayers' proposed comparable properties
were excluded because they involved multi-parcel sales, sold after the lien date,
or exceeded the Department's acreage limit. Lastly, the Department defends the
sales contained in the land model and argues that the sales were properly
adjusted and reflect accurate market value.
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DA WN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
37. We first address the Taxpayers' dispute regarding the Department's valuation
method. The Subject Property contains no improvements and is classified as
vacant land, facts which neither party disputes. The Department previously had
improvements listed as belonging to the Subject Property, but upon GPS
review, determined that they belonged to an adjacent parcel and removed them
from the Subject Property's record card. Although the parcel falls within the
Department's residential classification, it does not contain a residence or other
residential improvements. The infonnation provided by the Department to the
Taxpayers states that, for residential property, "The sales comparison approach
is the preferred valuation method." The same document also states, "In addition
to vacant land, the cost approach is used for parcels with non-typical
circumstances and when there are insufficient sales data and reliable market
models cannot be developed state-wide by the department." This language is
not permissive but instead requires that vacant land be valued using the cost
approach. Ms. Thornton clarified, however, that land models are developed
from verified land sales. Ms. Thomton described the model as technically
employing a sales-comparison methodology because it uses sales to estimate
raw land values, even though the Department's system values vacant land
under the cost approach. Accordingly, while the cost approach designation is
potentially misleading, it does not establish that the Department applied an
improper valuation methodology. We therefore find that the Department did
not err by valuing the Subject Property using the cost approach.
38. Next, the Taxpayers argue that the Department improperly excluded relevant
comparable properties from its land model. Ms. Hagedorn presented six
proposed comparable properties that are closer in proximity to the Subject
Property and that she argues are more comparable than the sales used by the
Department. The average per acre value of the six proposed comparable
properties is $2,366, which is significantly less than the Subject Property's
average per acre value of $4,306. Ms. Hagedom contends that including her
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
proposed comparable sales in the land model would result in a more accurate
market value for the Subject Property.
39. Ms. Oliver addressed the Taxpayers' proposed comparable properties during
cross-examination and explained the various reasons why five of the properties
were excluded from the land model. Ms. Oliver stated that two of the proposed
comparable properties, referred to as Big Rock Mine Sur and Independence
Mine Sur, were excluded due to being multi-parcel sales. The Department
excludes multi-parcel sales from its land models because the amount of value
that should be apportioned to each parcel cannot be accurately determined. The
New Year's Gift and Giltrap Subdivision Lot 4B properties were excluded
from the land model for being too large. Ms. Oliver testified that Department
procedure prevents properties greater than 25 acres in total size from being
included in land models, and the two proposed comparable properties are 49.89
and 90.13 acres, respectively. The final proposed comparable property that was
excluded from the land model, referred to as Carrie B Sur, was not included
because it sold on July 30, 2024, months after the lien date of January 1, 2024.
Ms. Oliver stated that the Taxpayers' proposed comparable property referred to
as Best Shot was included in the Department's land model. The property sold
on June 27, 2022, requiring the Department to time trend the value to match the
lien date of January 1, 2024, resulting in its sale price of $39,900 being
adjusted to $46,206. The Board finds that Ms. Oliver gave credible testimony
explaining why five of the proposed comparable properties were excluded from
the land model, and that the Department correctly followed appraisal procedure
in determining which properties to include in the land model.
40. Lastly, the Taxpayers argue that the Department failed to adjust sales used in
the land model for differences in access, utilities, and distance from the Subject
Property. Taxpayers also challenge the model's use of subdivision lots located
closer to Twin Bridges in valuing the Subject Property. While subdivision lots
were included in the land model, they were used to determine the base rate of
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BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
the land model. The base rate for the Subject Property's Category 1 land type
did not incorporate subdivision lots and was instead determined using two sales
which were also located in the Rochester Road area. The Category 1 land type
used to value the Subject Property has a 41% influence factor, meaning the
properties in that land type are valued at 41% of the base rate. Ms. Oliver
explained that the Department utilizes influences and category pricing to
account for the different characteristics of a parcel. Ms. Oliver confinned that
the 41% influence factor for the Category 1 land type is based on the market
data reflecting the location and amenities available to the Subject Property.
Applying the Category 1 influence factor resulted in a reduction in value that
the Board believes accurately accounts for the disparity between the Subject
Property and other properties contained within the land model.
41. Ultimately, the Taxpayers have not overcome the burden of proving that the
Department made an error in valuing the Subject Property. The record before
the Board indicates that the Department followed proper mass appraisal
procedure in valuing the Subject Property. The Department appropriately
valued the vacant Subject Property using verified vacant-land sales and making
adjustments for location and parcel size. Additionally, the Department followed
procedure in excluding multi-parcel sales, sales of property over 25 acres, and
sales that occurred after the lien date from the land model. The Department also
accounted for differences between the Subject Property and other properties
within the land model by applying an influence factor that took into account
location and differences in amenities. Therefore, the Board upholds the
Department's value.
42. The Taxpayers also made two discovery-related claims. First, Taxpayers allege
that the Department improperly withheld portions ofnon-privileged
communications. Second, Taxpayers argue that the participation of two
Department employees. Bob Finstad and Mark Wood, was not properly
disclosed.
15

BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DA WN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
43. Regarding the first discovery-related claim, Ms. Hagedorn testified that the
Department supplied only one written internal communication and alleges that
numerous pages of non-privileged communications were withheld. Ms.
Hagedom argued that the withheld communications could not all be privileged,
stating, "So are we supposed to believe that that's the only time they ever
talked about our property between two staff members that weren't legal
counsel?" Ms. Hagedorn also stated, "It seems to me like there's a lot of
withheld staff to staff communications, but how would I know?"
44. The Department maintains that all non-privileged communications were
disclosed. In its supplemental responses, the Department explained that the
privilege log contains 150 pages that were provided but partially redacted, and
652 pages of completely withheld communications. The Department clarified
that all withheld communications were between Department staff and legal
staff, and in all instances the legal staff were communicating in anticipation of
litigation. The Department stated that in each case, the privilege claims
constitute either attomey-client privilege or work-product privilege.
Department Counsel also emphasized that it is extremely inefficient to have
written documentation for every communication, and most conversations
happen informally face-to-face.
45. The Taxpayers have not provided evidence supporting their contention that the
Department withheld non-privileged communications beyond their belief that
such withholdings occurred. In comparison, the Department provided sufficient
explanation for the withheld materials and explained why the communications
constitute attomey-client or work-product privilege. Therefore, the Board does
not believe the Taxpayers have shown that the Department improperly withheld
non-privileged communications.
46. Regarding the second discovery-related claim. Taxpayers argue that Mr.
Finstad's participation was improperly withheld from the Department's initial
discovery responses and was only disclosed in the Department's supplemental
16

BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORNv. STATE OF MONTANA, DEPARTMENT OF REVENUE
discovery responses. Taxpayers also contend that Mr. Wood was improperly
omitted from the Department's initial discovery responses and was only
referred to as a "former staff member." The Department maintains that its
discovery responses were properly responsive to the Taxpayers' specific
information requests.
.95
47. The Board does not find any error in the Department's discovery responses. As
the Department noted in its supplemental response email, the Taxpayers' first
interrogatory asked the Department to identify "each person at the Department"
who has knowledge or was involved in the appraisal process. The phrase "at
the Department" makes the request specific to current employees and is
narrower in scope than a request broadly asking for the name of any person
who had knowledge or was involved in the appraisal process, for example. Ms.
Oliver testified that Mr. Wood left the Department on January 16, 2026. As Mr.
Wood was no longer employed by the Department at the time the discovery
request was made, he would not fit the description, and his omission was not
improper.
48. The Board also does not find any error in the disclosure of Mr. Finstad.
Taxpayers take issue with the fact that Mr. Finstad's involvement was not
disclosed in the Department's initial discovery responses and was only
disclosed later in the Department's supplemental responses. The Taxpayers'
initial discovery requests asked for, among other things, the name of each
person at the Department who "had any involvement in, knowledge of, or
responsibility for the assessment, appraisal, valuation, audit, review, appeal
processing, or any other action taken with respect to the Subject Property or the
Taxpayers during the tax years at issue." Ms. Oliver testified that Mr. Finstad is
employed by the Technology Services Division and did not assist with the
appraisal or processing of the Subject Property in any way. Instead, Mr.
Finstad's involvement was limited to verifying whether photographs could be
deleted from the Department's records. Prior to the CTAB hearing, the
17

BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
Taxpayers made multiple requests to have "all past photographs of our property
(both real and personal) be completely purged from your systems and
databases." Department stated that Mr. Finstad's involvement was considered
to be fielding Counsel a generalized technological question which would not
make him responsive to the discovery request as it was written. Mr. Finstad
was later named in the Department's supplemental responses after the
Taxpayers requested the name of every sender and recipient contained within
the Department's privilege log, which Department Counsel determined
included Mr. Finstad.
49. Based on the testimony before the Board, it appears that Mr. Finstad's
involvement was limited to answering a specific technological question related
to computer systems utilized by the Department. The Board heard credible
testimony that Mr. Finstad did not participate in or influence the Taxpayers'
assessment or appeal, making his exclusion from the initial discovery responses
reasonable. While the technological question answered by Mr. Finstad
stemmed from the Taxpayers' request to have their properties' photographs
removed, it was not specific to the Taxpayers or the Subject Property but was
instead a general question regarding the capabilities of the Department's
systems. Therefore, Mr. Finstad's initial nondisclosure was not improper.
18

BEFORE THE MONTANA TAX APPEAL BOARD
SCOTT AND DAWN HAGEDORN v. STATE OF MONTANA, DEPARTMENT OF REVENUE
ORDER
50. The CTAB's determination is affirmed, and the Department's value of $50,790
is upheld.
Dated this 19th day of August 2026.
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Travis Brown, Chairman
Adam Millinoff, Member
ChristopKer Muf^hy^^ember
Notice: You are entitled to judicial review of this Order by filing a petition in district
court within 60 days of the service of this Order. The Department of Revenue shall
promptly notify this Board of any judicial review to facilitate the timely transmission
of the record to the reviewing court. Mont. Code Ann. §15-2-303(2).
19

BEFORE THE MONTANA TAX APPEAL BOARD
Certificate of Service
I certify that I caused a tme and correct copy of the foregoing Findings of Fact,
Conclusions of Law, Order, and Opportunity for Judicial Revie-w to be sent by email
and United States Mail via Print & Mail Services Bureau of the State of Montana on
August 19, 2026, to:
Scott and Dawn Hagedom
P.O. Box 577
Twin Bridges, Montana 59754
sold(%hagedomauction.com
Dave Burleigh
Michele Peterson-Cook
State of Montana, Department of Revenue
Legal Services Office
P.O. Box 7701
Helena, Montana 59604-7701
David.burleigh@mt.gov
Heather Thurs
Madison County Tax Appeal Board
P.O. Box 278
Virginia City, Montana 59755
Paula Gilbert
State of Montana, Department of Revenue
Property Assessment Division
P.O. Box 8018
Helena, Montana 59604-8108
^>fadisoh Ambro^ riall\
Legal Administrative
20