Matteo Gallo v. Board of Assessors of the City of Everett (May 21, 2013)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

MATTEO GALLO				  v. 	  BOARD OF ASSESSORS OF 
  THE CITY OF EVERETT

Docket No. F307656 				       Promulgated:
								  May 21, 2013


	This is an appeal filed under the formal procedure, pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65, from the refusal of the Board of Assessors of the City of Everett (the "appellee" or the "assessors") to abate taxes on certain real estate in the City of Everett (the "subject property") owned by and assessed to Matteo Gallo (the "appellant"), under G.L. c. 59, §§ 11 and 38, for fiscal year 2010.
	Commissioner Mulhern heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose, and Chmielinski joined him in the decision 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.
	

	Matteo Gallo, pro se, for the appellant.

	Carl Surabian, assistant assessor, for the appellee.

FINDINGS OF FACT AND REPORT

Introduction and Jurisdiction

	On January 1, 2009, Matteo Gallo was the assessed owner of 5 Lawrence Street in Everett.  The subject property consists of about 0.196 acres of land improved with an approximately 12,834-square-foot, three-story, apartment building with an estimated rentable area of 8,525 square feet, plus a 4,278-square-foot basement.  The building was built around 1920, and it contains thirteen units of similar quality and construction.  Three of the units are three-room apartments, consisting of one bedroom, a kitchen and a living area, as well as one full bathroom.  Another three units are five-room apartments with three bedrooms, a kitchen and a living area, as well as one full bathroom.   The remaining seven units are two-bedroom apartments with a kitchen and a living area, as well as one full bathroom.  The exterior of the building is primarily brick with typical undistinguished features.  The subject property's property record card rates the kitchens and bathrooms as average. 
	For fiscal year 2010, the assessors valued the subject property at $1,005,200 and assessed a tax thereon, at the rate of $13.51 per $1,000, in the amount of $13,580.25.  In accordance with G.L. c. 59, § 57C, the appellant timely paid the tax due without incurring interest.  On January 27, 2010, in accordance with G.L. c. 59, § 59, the appellant timely filed an abatement application which the assessors denied on April 5, 2010.  On June 15, 2010, in accordance with G.L. c. 59,        §§ 64 and 65, the appellant seasonably filed his appeal of the denial with the Appellate Tax Board (the "Board").  On the basis of these facts, the Board found and ruled that it had jurisdiction over this appeal.
Merits
	For the fiscal year prior to the one at issue in this appeal, the Board issued a decision reducing the assessed value as abated by the assessors from $1,272,300 to a fair cash value of $1,140,000 as of January 1, 2008.  Because the assessment for fiscal year 2010 -- $1,005,200 -- was less than the $1,140,000 fair cash value which the Board found for the previous fiscal year, the Board found and ruled here that the assessors did not have the burden of going forward in the instant appeal to show that the assessment for fiscal year 2010 was warranted under G.L. c. 58A, § 12A.  Accordingly, the appellant had the burden of proving overvaluation, and he presented his case-in-chief first at the hearing of the instant appeal.
	The appellant's evidence consisted primarily of a comparable-assessment analysis.  In his analysis, he compared the assessments of seven other apartment buildings in Everett to the subject property.  One of these comparable properties -- 238 Chelsea Street -- contained twice the number of apartments that the subject property contained.  Another one of the comparable properties -- 174 Ferry Street -- contained significantly fewer apartments, while yet another comparable property contained considerably more apartments.  Of the remaining purportedly comparable properties, the Board noted that the appellant did not apply any adjustments to account for differences with the subject property, and even more fundamentally, the appellant appeared to use assessment data for fiscal year 2012, as opposed to the 2010 fiscal year at issue in this appeal.
	Other than the requisite jurisdictional documents and the subject property's property record card, the assessors offered little other evidence.  
	Based on this record and reasonable inferences drawn therefrom, the Board found that the appellant failed to prove that the subject property was overvalued for fiscal year 2010.  The Board found that the appellant did not establish comparability between his purportedly comparable properties and the subject property, did not properly analyze or use relevant assessment data in his comparable-assessment analysis, did not introduce or analyze any comparable-sales information, and did not attempt to value the subject income-producing property using an income-capitalization approach.  These failings, coupled with the lack of relevant evidence in the record as a whole, resulted in the Board finding that the appellant failed to meet his burden of proving that the assessment exceeded the subject property's fair cash value for fiscal year 2010.  Accordingly, the Board decided this appeal for the appellee.  

OPINION
"All property, real and personal, situated within the commonwealth . . . shall be subject to taxation." G.L. c. 59, § 2.  The assessors are required to assess real estate at its fair cash value determined as of the first day of January prior to each fiscal year.  G.L. c. 59, §§ 2A, 38, 52.  See Coomey v. Assessors of Sandwich, 367 Mass. 836, 837 (1975)(citations omitted).  Fair cash value is defined as the price on which a willing seller and a willing buyer in a free and open market 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).  
	The appellant has the burden of proving that the property has a lower value than that assessed. "'The burden of proof is upon the petitioner to make out its right as [a] matter of law to [an] abatement of the tax.'" Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974)(quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)). "[T]he [B]oard is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayer[] . . . prov[es] the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984)(quoting Schlaiker, 365 Mass. at 245).
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, 393 Mass. at 600 (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  In this appeal, the appellant attempted to demonstrate that the subject property was overvalued by introducing affirmative evidence of value.  
Real estate valuation experts, the Massachusetts courts, and this Board rely primarily upon three approaches to determine a property's fair cash value: income-capitalization, sales comparison, and depreciated reproduction or replacement cost.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  "The Board is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).  In this appeal, the appellant elected to use a comparable-assessment analysis to show that the subject property was overvalued.
General Laws Chapter 58A, § 12B provides in pertinent part that "at any hearing relative to the assessed fair cash valuation or classification of property, evidence as to fair cash valuation or classification of property at which assessors have assessed other property of a comparable nature or class shall be admissible." Id.  "The introduction of ample and substantial evidence in this regard may provide adequate support for abatement."  Chouinard v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-299, 307-308 (citing Garvey v. Assessors of West Newbury, Mass. ATB Findings of Fact and Reports 1995-129, 135-36; Swartz v. Assessors of Tisbury, Mass. ATB Findings of Fact and Reports 1993-271, 279-80); see Turner v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-309, 317-18.  The assessments in a comparable-assessment analysis, like the sale prices in a comparable-sales analysis, must also be adjusted to account for differences with the subject.  See Heitin v. Assessors of Sharon, Mass. ATB Findings of Fact and Reports 2002-323, 334 ("Further, the appellant did not adjust for differences between the comparable properties and the subject property in order to properly impute a value to the subject property using the assessed values of the comparables.").  "After researching and verifying transactional [or assessment] data and selecting the appropriate unit of comparison, the appraiser adjusts for any differences."  Appraisal Institute, The Appraisal of Real Estate 307 (13th ed., 2008).
In the present appeal, the appellant did provide some comparable-assessment data. He did not, however, provide comparable-sales or income-capitalization analyses. With respect to his comparable-assessment analysis, he not only failed to establish basic comparability, but he made no adjustments for fundamental differences between his comparable properties and the subject property, and he used assessment information from the wrong fiscal year.  Consequently, the Board found and ruled that the appellant's comparable-assessment methodology was without merit and any values derived from it would be unfounded.  The record was essentially devoid of any other evidence upon which the Board could rely to determine the fair cash value of the subject property for the fiscal year at issue.  

	Accordingly, the Board found and ruled that the appellant failed to meet his burden of proving that the subject property was overvalued for the fiscal year at issue.  The Board, therefore, decided this appeal for the appellee.

			      	   THE APPELLATE TAX BOARD


				    By: __________________________________
					   Thomas W. Hammond, Jr., Chairman

A true copy,

Attest: __________________________
	   Clerk of the Board

 While the Petition Under Formal Procedure, the jurisdictional documents, and other filings name "Matteo Gallo," individually, as the appellant, the relevant tax bill identifies "Matteo Gallo, Trustee of the Oceanview Nominee Trust" as the owner of the subject property.  For purposes of this appeal, and without objection from the parties, the Appellate Tax Board considered Matteo Gallo as the person aggrieved by the assessment of the real estate tax on the subject property.  See G.L. c. 59, § 59.     
 According to the subject property's property record card, the assessors had originally assessed the subject property at $1,326,300 for fiscal year 2009.
 G.L. c. 58A, § 12A, provides in pertinent part that:
If the owner of a parcel of real estate files an appeal of the assessed value of said parcel with the board for either of the next two fiscal years after a fiscal year for which the board has determined the fair cash value of said parcel and if the assessed value is greater than the fair cash value as determined by the board, the burden shall be upon the appellee to prove that the assessed value was warranted.

ATB 2013-343