Paul B. Cocchi d/b/a Hick-O-Rock Farm v. Board of Assessors of the Town of Ludlow (September 28, 2010)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


PAUL B.COCCHI d/b/a 	  v.      BOARD OF ASSESSORS OF
HICK-O-ROCK FARM				THE TOWN OF LUDLOW

Docket No. F301789

PAUL B. COCCHI             v. 	BOARD OF ASSESSORS OF 
		THE TOWN OF LUDLOW
Docket No. F301790
				   			Promulgated:
							September 28, 2010
							

These are appeals under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate taxes on certain personal and real property in the Town of Ludlow owned by and assessed to the appellant, under G.L. c. 59, §§ 11 and 18, for fiscal year 2009 ("fiscal year at issue").  
	Commissioner Rose ("Presiding Commissioner") heard these appeals, and, in accordance with G.L. c. 58A, § 1A and 831 CMR 1.20, issued single-member decisions for the appellee.  
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Paul B. Cocchi, pro se, for the appellant.
	David J. Martel, Esq. for the appellee.
FINDINGS OF FACT AND REPORT
I.   Docket Number F301789

On January 1, 2008, appellant Paul B. Cocchi d/b/a Hick-o-Rock Farm ("Mr. Cocchi" or "appellant") owned certain personal property located at 312 Miller Street in Ludlow ("subject personal property").  In accordance with G.L. c. 59, § 29, the appellant timely filed a Form of List for fiscal year 2009 listing the subject personal property.  The Board of Assessors of Ludlow ("assessors" or "appellee") valued the subject property at $22,720 and assessed a tax thereon, at the rate of $14.96 per $1,000, in the amount of $324.44.  The appellant paid the tax due on February 2, 2009. The appellant timely filed an Application for Abatement with the assessors on February 2, 2009.  On March 10, 2009, the assessors denied the appellant's Application for Abatement and on June 10, 2009, the appellant seasonably appealed the denial to the
Appellate Tax Board ("Board"). On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction to hear and decide this appeal.
	The subject personal property consisted of a backhoe.  The appellant asserted that the value of the backhoe was approximately $7,800, rather than its assessed value of $22,720, and further argued that, under G.L. c. 59, § 8A, ("§ 8A") the backhoe was subject to an excise tax at the rate of $5.00 per $1,000, not a personal property tax at the rate of $14.96 per $1,000.
	The Board has dealt with the assessment of the appellant's backhoe in previous appeals.   See Paul Cocchi d/b/a Hickory Rock Farm v. Assessors of Ludlow, Mass. ATB Findings of Fact and Reports 2006-680 ("Cocchi I"). Cocchi I involved, among other things, the valuation of the appellant's backhoe for fiscal year 2004.  The Board found in that appeal that the fair cash value of the backhoe was $38,637.  The Board reached its finding of value in Cocchi I by taking the $53,000 purchase price of the backhoe and applying a 10% annual depreciation factor. More recently, in Paul Cocchi d/b/a Hick-o-Rock Farm v. Assessors of Ludlow, Mass. ATB Findings of Fact and Reports 2007-1379 ("Cocchi II"), which involved the valuation of the appellant's backhoe for fiscal year 2005, the Board applied the same depreciation factor to its finding of value for the backhoe in Cocchi I and found that the value of the appellant's backhoe for fiscal year 2005 was $34,773.  The Board took judicial notice of its findings in Cocchi I and Cocchi II in the present appeal.  
	As he did in Cocchi I and Cocchi II, the appellant asserted in the present appeal that because he was engaged in farming at Hick-o-Rock Farm, the backhoe should be valued and taxed under § 8A at $5.00 per thousand dollars of value, instead of G.L. c. 59, § 38 ("§ 38"), under which property is taxed at the town's applicable property tax rate of $14.96 per thousand dollars of value.  The Presiding Commissioner found in this appeal, as the Board did in previous appeals, that the appellant failed to prove that he was "engaged principally in agriculture" (emphasis added) as required by § 8A, because the appellant did not introduce sufficient evidence of the extent to which he was engaged in agriculture.  
Mr. Cocchi did not provide a detailed account of the amount of time or resources that he committed to agriculture as compared to other business activities.  Both Cocchi I and Cocchi II involved the taxation of equipment used by Mr. Cocchi in connection with his tree business, "Paul's Tree Service."  Paul Cocchi d/b/a Hickory Rock Farm, Mass. ATB Findings of Fact and Reports 2006-680 at 687; Paul Cocchi d/b/a Hick-o-Rock Farm, Mass. ATB Findings of Fact and Reports 2007-1379 at 1385.  In those appeals, the Board found and ruled that Mr. Cocchi was a "tree surgeon."  There was uncontroverted testimony in the present appeal that Mr. Cocchi continued to operate his tree business during the fiscal year at issue. Mr. Cocchi did not even claim, let alone prove, that he devoted the majority of his time to Hick-o-Rock Farm rather than his tree business.  The only evidence offered by Mr. Cocchi in support of his argument was a series of checks, totaling just over $2,000, made out to "Hick-o-Rock Farm" for the purchase of cord wood.  Given the amount of money involved, the Presiding Commissioner found that the checks did not lend themselves to the inference that farming was Mr. Cocchi's principal pursuit.  Mr. Cocchi failed in the present appeal to prove that agriculture, as opposed to his tree business or other ventures, was his principal pursuit, as required by § 8A.  The Presiding Commissioner found that Mr. Cocchi failed to establish that his backhoe was entitled to be taxed under the provisions of § 8A, and therefore, found that it was proper for the assessors to value and tax the backhoe under § 38.  
Regarding the valuation of the backhoe, the appellant alleged that its fair cash value was approximately $7,800.  However, he offered no evidence to support, or even to explain, how he arrived at that valuation.  On the basis of all of the evidence, and in accordance with the depreciation factors used by the Board in Cocchi I and Cocchi II, the Presiding Commissioner found that the fair cash value of the backhoe was $22,814.57, which was more than its assessed value of $22,720.  Accordingly, the Presiding Commissioner found that the appellant failed to establish his right to an abatement, and issued a decision for the appellee in Docket Number F301789.  

II.  Docket No. F301790 

On January 1, 2008, the appellant was the assessed owner of a 6.55-acre parcel of land improved with a single-family Cape Cod-style dwelling located at 312 Miller Street in Ludlow ("subject real property"). For the fiscal year at issue, the assessors valued the subject real property at $205,600 and assessed a tax thereon, at the rate of $14.28 per thousand, in the total amount of $2,935.97. The appellant timely paid the tax due without incurring interest. The appellant timely filed an Application for Abatement with the assessors on February 2, 2009. The Application for Abatement was denied by vote of the assessors on March 10, 2009. The appellant timely filed an appeal with the Board on June 10, 2009.  On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction to hear and decide this appeal.
	The Cape-Cod-style dwelling situated on the subject real property contains 1,420 square feet of finished living area, including four bedrooms. The exterior of the dwelling is brick with an asphalt-shingled, gabled roof.  Interior finishes include hardwood floors and plaster walls.  The dwelling also has an 80-square-foot porch, a 216-square-foot patio, a 270-square-foot wood deck, and a detached two-car garage.  
	The appellant contended that the subject real property was overvalued because water run-off from a nearby subdivision built in 1997 has caused much of the subject real property to become wetland.  The appellant introduced pictures, maps, and various items of correspondence in support of this assertion.  Among those items of correspondence is a letter from an environmental consultant who had been retained by the appellant to perform an evaluation of the subject real property.  Also among the items of correspondence is a letter dated March 15, 2005 from Dwane Coffey, District Conservationist, which states that the National Wetlands Inventory Forested Wetlands map showed no wetlands on the subject real property.  
The appellant also contended that the assessed value of the subject real property exceeded its fair cash value because of the deterioration of the dwelling, including a cracked foundation, damaged chimney, and rotted wood on the porch and deck.   Photographs of the porch, deck and chimney were introduced into evidence by the appellant.  Mr. Cocchi's opinion of fair cash value for the subject real property was $150,000.  
	In support of the assessment, the assessors introduced a sales-comparison analysis of three properties in Ludlow.  The three comparable-sales properties all featured single-family Cape-Cod-style dwellings, like the dwelling on the subject real property.  The dwellings on the three comparable-sales properties were constructed around the same time as the dwelling on the subject real property.  
The assessors' comparable number one was 55 Lehigh Street, which is 1.61 miles from the subject real property. It consists of an 8,184-square-foot lot improved with a Cape-Cod-style dwelling which has 1,322 square feet of finished living space, including two bedrooms. Comparable number one also features a 120-square-foot patio, a 126-square-foot enclosed porch, an unfinished basement and a detached one-car garage. Comparable number one sold on September 4, 2007 for $200,000.
	The assessors' comparable number two was 37 Lakeview Avenue, which is 1.88 miles from the subject real property. Comparable number two consists of a 5,000-square-foot lot improved with a Cape-Cod-style dwelling which has 1,170 square feet of finished living area, including four bedrooms. It also has a partially-finished basement, a 160-square-foot enclosed porch, and a one-car detached garage.  Comparable number two sold on March 5, 2007 for $195,000.
	The assessors' comparable number three was 84 Yale Street, which is 1.78 miles from the subject real property. Comparable number three consists of a 10,000-square-foot lot improved with a Cape-Cod-style dwelling which has 1,154 square feet of finished living area, including three bedrooms. It also has an unfinished basement, a 156-square-foot open porch, and a two-car detached garage.  Comparable number three sold on July 27, 2007 for $181,000.
The Presiding Commissioner found that the assessors' sales-comparison analysis involved properties substantially similar to the subject real property.  All three properties were improved with Cape-Cod-style dwellings similar in size and age to the dwelling on the subject real property.  They were each located less than two miles from the subject real property and each sold in reasonably close proximity to the relevant date of assessment.  The Presiding Commissioner therefore found that the assessors' sales-comparison analysis provided probative and reliable evidence of the fair cash value of the subject real property.   
The assessors' three comparable-sales properties sold for between $181,000 and $200,000, slightly less than the assessed value of the subject real property, which was $205,600.  However, the subject real property had a vastly larger lot than the three comparable-sales properties, and the Presiding Commissioner found that this fact warranted a higher fair cash value.  The Presiding Commissioner therefore found that the assessors' sales-comparison analysis provided reliable evidence that the assessed value of the subject real property did not exceed its fair cash value.  
In contrast, the evidence offered by the appellant failed to establish that the fair cash value of the subject real property was less than its assessed value.  The appellant's primary contention was that the subject real property was overvalued because of the presence of wetlands.  However, the Presiding Commissioner found that the evidence was inconclusive as to whether there are wetlands on the subject real property.  Moreover, it appears from the record that the assessors accounted for that possibility in valuing the subject real property.  The assessors valued all but one of the subject real property's 6.55 acres as rear or excess acreage and made an additional 25% reduction to the value of the 5.55 excess acres, valuing those acres in the total amount of only $13,070.  The Presiding Commissioner found that, to the extent the subject real property suffered from water drainage issues, the assessors accounted for this fact in setting the assessment.  
Similarly, although the appellant introduced photographs showing the deterioration of the dwelling's porch, deck, and chimney, he failed to detail the impact of the condition of the dwelling on its fair cash value or to prove that the assessors did not take the condition of the dwelling into consideration in valuing the subject real property.  The property record cards entered into evidence for the assessors' three comparable-sales properties showed that the dwellings on those properties were constructed during the same time period as the dwelling on the subject real property and they were given condition factors similar to the condition factors used by the assessors for the subject real property.  The appellant failed to persuade the Presiding Commissioner that the assessors did not adequately account for the condition of the subject real property in valuing it, nor did he otherwise prove that its fair cash value was less than its assessed value.  
In conclusion, the Presiding Commissioner found that the appellant failed to establish his right to an abatement, and, accordingly, the Presiding Commissioner issued a decision for the appellee in Docket No. F301790.  


OPINION
I.	Taxation of the Subject Personal Property
Generally, assessors are required to assess real and personal property subject to taxation at its fair cash value and apply the applicable tax rate for their municipality to determine the tax due and payable on such property.  G.L. c. 59, § 38.  However, G.L. c. 59, § 8A provides an exception to the general rule of § 38 for the taxation of "farm machinery and equipment" used by any person "engaged principally in agriculture."  Section 8A provides that such machinery and equipment shall be assessed at the rate of "five dollars per one thousand dollars of valuation, as determined by the commissioner of revenue."  
The appellant asserted that his backhoe should be valued and taxed under the more favorable provisions of § 8A, instead of § 38, because it was used at Hick-o-Rock Farm.  The Presiding Commissioner found and ruled, however, that the appellant did not introduce sufficient evidence to support a finding that he was "engaged principally in agriculture," as required by § 8A (emphasis added).   There was uncontroverted evidence that, in addition to Hick-o-Rock Farm, Mr. Cocchi runs a business called Paul's Tree Service.  In the present appeal, Mr. Cocchi did not introduce sufficient evidence to establish that his principal pursuit was farming, rather than his tree business or other ventures.  The appellant introduced a series of checks made out to Hick-o-Rock Farm for the purchase of cord wood.  However, the checks totaled approximately $2,000, a sum of money which did not persuade the Presiding Commissioner that Mr. Cocchi was "engaged principally in agriculture." G.L. c. 59, § 8A.  Accordingly, the Presiding Commissioner found and ruled that the appellant did not establish the appropriateness of valuing and taxing the backhoe under § 8A, and, therefore, concluded that it was proper for the assessors to value and tax it under § 38.  
With respect to the valuation of the backhoe, the appellant asserted that its fair cash value was $7,800.   However, he offered no evidence to support that value.  Based on the evidence presented, and in accordance with the methodology used by the Board to value the backhoe in Cocchi I and Cocchi II, the Presiding Commissioner found that the fair cash value of the backhoe was $22,814.57, which was more than its assessed value of $22,720.  The appellant therefore failed to demonstrate that the fair cash value of the backhoe was less than its assessed value, and accordingly, failed to prove his right to an abatement.  The Presiding Commissioner therefore issued a decision for the appellee in Docket No. F301789.  
 
II.	Valuation of the Subject Real Property
The assessors are required to assess real estate at its fair cash value.  G.L. c. 59, § 38.  Fair cash value is defined as the price on which a willing seller and a willing buyer will agree if both of them are fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).  
In appeals before this Board, a taxpayer "‛may present persuasive evidence of overvaluation either by exposing flaws or errors in the assessors' method of valuation, or by introducing affirmative evidence of value which undermines the assessors' valuation.'"  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 600 (1984) (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)). Sales of comparable realty in the same geographic area and within a reasonable time of the assessment date often contain probative evidence for determining the value of the property at issue.  Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2008-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd, Graham, 73 Mass. App. Ct. 1107 (2008).   The evidence introduced by the appellant with respect to the valuation of the subject real property included documents, photographs and his own testimony regarding the existence of possible wetlands on the subject real property as well as damage to the dwelling's exterior, including its porch, deck and chimney.  The Presiding Commissioner found and ruled that this evidence regarding the subject real property's condition did not constitute "affirmative evidence of value," nor was it evidence which revealed "flaws or errors" in the assessors' method of valuation.  General Electric Co., 393 Mass. at 600.  
The appellant contended that the fair cash value of the subject real property was negatively impacted by the existence of wetlands on the subject real property.  The assessors valued as excess or rear acreage all but one of the subject real property's 6.55 acres.  They further reduced the value of the excess 5.55 acres by 25%, valuing them in the total amount of $13,070.  The record was inconclusive as to whether there are wetlands on the subject real property; moreover, to the extent there are such wetlands, there was no evidence suggesting that the assessors did not take this issue into consideration in valuing the subject real property.  Accordingly, the Presiding Commissioner did not find the appellant's argument to be persuasive.  
Further, there was no evidence indicating that the assessors failed to take into consideration the condition of the dwelling when valuing the subject real property.  The subject real property was valued commensurately with other, similar properties in close proximity to it, as evidenced by the assessors' sales-comparison analysis involving three other properties in Ludlow. The assessors' comparable-sales properties were Cape-Cod-style dwellings similar in style, size and age to the dwelling on the subject real property. The three comparable-sales properties sold reasonably close in time to the relevant date of assessment for between $181,000 and $200,000, slightly less than the assessed value of the subject real property, which was $205,600.  However, the subject real property has a much larger lot size than the comparables, which the Presiding Commissioner found warranted its higher valuation.  
In conclusion, the Presiding Commissioner found and ruled that the evidence offered by the appellant did not demonstrate that the fair cash value of the subject real property was less than its assessed value. The Presiding Commissioner further found and ruled that the assessors' sales-comparison analysis provided reliable evidence that the assessed value of the subject property did not exceed its fair cash value.  Based on the foregoing, the Presiding Commissioner found and ruled that the appellant failed to meet his burden of establishing his right to an abatement.  Accordingly, the Presiding Commissioner issued a decision for the appellee in Docket No. F301790.  

			   CONCLUSION
	On the basis of all of the evidence, the Presiding Commissioner found and ruled that the appellant failed to meet his burden of proving his right to an abatement, and accordingly, issued decisions for the appellee in these appeals.  

		                 THE APPELLATE TAX BOARD


  By: ___________________________________
  James D. Rose, Commissioner



A true copy,


Attest: _________________________________
         Clerk of the Board

 The Board notes that although the tax was due on February 2, 2009 and the appellant paid the tax on that date, the assessors nevertheless charged an additional $7.95 of interest to the appellant. Regardless of whether interest was in fact owed, the appellant's payment of the tax on his personal property prior to filing this appeal preserves the Board's jurisdiction, notwithstanding the incurring of interest.  See G.L. 59, § 64 (requiring payment of at least one-half of the tax on personal property prior to filing an appeal).  
 The petition was received by the Board via mail on June 11, 2009.  However, because the envelope was postmarked by the United States Postal Service on June 10, 2009, the appellant's appeal was deemed filed on that date, and, therefore, it was timely filed.  See G.L. c. 58A, § 7 and G.L. c. 59, § 64.
   G.L. c. 59, § 8A provides, in pertinent part:
Any person . . . engaged principally in agriculture, who owns farm machinery and equipment . . . shall annually, on or before March first, make a return on oath to the assessors of the town where such machinery or equipment . . . are located, setting forth the make, age, model, if any, and purchase price of such machinery and equipment . . . . If the assessors are satisfied of the truth of the return they shall assess such machinery and equipment . . . at the rate of five dollars per one thousand dollars of valuation, as determined by the commissioner of revenue, of such machinery and equipment . . . and such persons shall be otherwise exempt from taxation on these classes of property under this chapter.  

 The appellant purchased the backhoe in 1999.  
 See footnote two.  

ATB 2010-861