Michael & Lisa Duval v. Board of Assessors of the City of Holyoke (June 1, 2009)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

MICHAEL & LISA DUVAL	   	v.  	BOARD OF ASSESSORS OF 
THE CITY OF HOLYOKE


Docket No. F297721			    	Promulgated:
							June 1, 2009

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 appellee to abate taxes on real estate located in the City of Holyoke, owned by and assessed to the appellants under G.L. c. 59, §§ 11 and 38, for fiscal year 2008.  
Commissioner Mulhern heard the appeal.  Chairman Hammond and Commissioners Scharaffa, Egan and Rose joined him in the decision for the appellants. 
	These findings of fact and report are made pursuant to a request by the appellants under G.L. c. 58A, § 13 and 831 CMR 1.32.
	Michael Duval, pro se, for the appellants.
	Anthony Dulude, assessor, and Deborah Brunelle, assessor, for the appellee.



FINDINGS OF FACT AND REPORT
On January 1, 2007, Michael & Lisa Duval (the "appellants") were the assessed owners of a 2.91-acre parcel of real estate located at 15 Deer Run in the City of Holyoke ("subject property").  The lot is improved with a single-family, Colonial-style dwelling, which contains approximately 4,324 square feet of finished living area.  The dwelling was constructed in 2006 and has a total of nine rooms, including four bedrooms, plus three full bathrooms, and two fireplaces.  There is also a three-car attached garage and three open porches.  The dwelling is located in a small subdivision of similar-style homes.
For fiscal year 2008, the Board of Assessors of Holyoke ("assessors") originally valued the subject property at $724,800 and assessed a tax at the rate of $13.75 per thousand in the total amount of $9,966.00.  In accordance with G.L. c. 59, § 57C, the appellants paid the tax due without incurring interest.  On January 25, 2008, in accordance with G.L. c. 59, § 59, the appellants timely filed an Application for Abatement with the assessors.  The assessors denied the abatement application on April 7, 2008.  Subsequently, the assessors reconsidered the appellants' abatement application and granted two abatements totaling $91,000, reducing the assessed value to $632,900. On May 7, 2008, the appellants seasonably filed an appeal with the Appellate Tax Board ("Board").  On the basis of these facts, the Board found and ruled that the Board had jurisdiction to hear and decide this appeal.
The appellants argued that the subject property was overvalued for fiscal year 2008.  The appellants presented their case through the testimony and appraisal report of Dennis Ward, a certified real estate appraiser.  Based on Mr. Ward's certification, education and experience, the Board qualified him as an expert in the field of real estate valuation.  Mr. Ward used the sales-comparison methodology to value the subject property.  He primarily relied on three sales of properties that he deemed to be comparable to the subject property.  
Sale number one is located at 8 Deer Run, the same street as the subject property.  The property consists of a 2.37-acre parcel improved with a two-year old, contemporary-style, single-family dwelling with four bedrooms, two full bathrooms and one half-bathroom, and a finished living area of 3,595 square feet.  The property sold on May 17, 2006 for $590,000.  
Sale number two, located at 42 Cedar Woods Glen, West Springfield, is a 1.05-acre parcel that sold on June 30, 2006 for $608,000.  The property is improved with a six-year old, Colonial-style, single-family dwelling with three bedrooms and also four-and-one-half baths, and a total living area of 3,977 square feet.  
Finally, sale number three, located at 15 Harvest Moon Lane, Westfield, is a 0.5-acre parcel improved with a newly constructed, contemporary-style dwelling with four bedrooms, three-and-one-half bathrooms, and a total living area of 6,287 square feet.  The property sold on August 30, 2006 for $618,375. 
Mr. Ward made adjustments for differences between his chosen comparables and the subject property. Comparable sale number one was adjusted downward to reflect its better view. Comparable sale number two and number three were adjusted upward due to their smaller lot size.  All three sales were adjusted downward to account for the comparable sales' better condition.  Next, all sales were adjusted to account for differences in the number of bathrooms and also the total living area.  Finally, comparable sale number two was adjusted downward to account for its finished basement, and all sales were adjusted to reflect the number of fireplaces and also the number of porches.  Despite the fact that comparable sales number two and number three are located in West Springfield and Westfield, respectively, Mr. Ward made no adjustments for location.
Mr. Ward's sales-comparison analysis yielded adjusted sale prices of $594,700, $605,200 and $572,775, respectively.  Based on this analysis, Mr. Ward's final opinion of the fair cash value of the subject property for fiscal year 2008 was $595,000.
The assessors presented their case-in-chief through the testimony of Anthony Dulude, an assessor for Holyoke.  The assessors also offered into evidence the requisite jurisdictional documentation, the subject property's property record card, and a listing sheet highlighting four property sales.  The cited properties ranged in size from 1.28 acres to 7.92 acres with finished living areas that ranged from 3,116 square feet to 3,433 square feet.  The sale prices ranged from $555,000 to $675,000.  
Testimony revealed that the assessors' comparable sales number one, number two and number four are located on the other side of the city where older, turn-of-the-century, industrialist mansions were built.  These purportedly comparable properties were built in the early 1900's.  Further, comparable sale number four, located at 160 Mountainview Drive, contains 7.92 acres with a "fabulous barn on the property."  Reportedly, this sale was a cash transaction and was exposed to the market for only one day.  Despite these differences and issues, the assessors made no adjustments to the comparable properties' sale prices.  
The assessors' comparable sale number three, located at 8 Deer Run, was also relied on by the appellants' real estate valuation expert.  During his testimony, Mr. Dulude asked Mr. Ward how he arrived at his location adjustment for this sale.  Mr. Ward responded that he had spoken with the buyers of the land at 8 Deer Run who had constructed the home on the site.  The buyers stated that they had paid a $10,000 premium above the market price of lots within the subdivision because of their lot's view of Mount Tom.  Accordingly, Mr. Ward made a negative adjustment of $10,000 in his sales-comparison analysis to account for this factor.  After hearing Mr. Ward's explanation and reviewing his appraisal report, Mr. Dulude agreed with Mr. Ward's adjustment to 8 Deer Run and with his opinion of value for the subject property of $595,000. 
Based on the evidence presented, and to the extent it is a finding of fact, the Board found that the appellants met their burden of proving that the subject property was overvalued for fiscal year 2008.  After reviewing Mr. Ward's appraisal report, the Board determined that no weight should be given to comparable sales number two and number three due to their location outside of Holyoke and Mr. Ward's failure to make any adjustments to account for this factor.  Similarly, the Board determined that the assessors' sales number one, number two and number four should be given limited weight due to their location in a unique, historic section of Holyoke and the assessors' failure to make any adjustment for this fact.
The Board further determined that the sale located at 8 Deer Run, in the same subdivision as the subject property and relied on by both the appellants' expert and the assessors, provided the best evidence of the subject property's fair market value.  The Board further found that the appellants' real estate valuation expert offered a logical and well-supported basis for adjusting the sale price of 8 Deer Run, which supported his overall opinion of the subject property's fair market value.  Moreover, at the hearing of this appeal, the assessors agreed with Mr. Ward that the fair market value of the subject property was $595,000.
On this basis, the Board found that the fair cash value of the subject property for fiscal year 2008 was $595,000.  Accordingly, the Board issued a decision for theappellants and granted an abatement in the amount of $521.13.    
OPINION
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 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 appellants have 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 board is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayers . . . prov[e] 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 Co., 393 Mass. at 600 (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  
Generally, real estate valuation experts, Massachusetts courts, and this Board rely upon three approaches to determine the fair cash value of property: income capitalization; sales comparison; and cost reproduction.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  "The [B]oard is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).  
"[S]ales of property usually furnish strong evidence of market value, provided they are arm's-length transactions and thus fairly represent what a buyer has been willing to pay for the property to a willing seller."  Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 682 (1982).  Sales of comparable realty in the same geographic area and within a reasonable time of the assessment date generally 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 v. Assessors of West Tisbury, 73 Mass. App. Ct. 1107 (2008)).  When comparable sales are used, however, allowances must be made for various factors which would otherwise cause disparities in the comparable property's sale prices. See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082.  "Adjustments for differences in the elements of comparison are made to the price of each comparable property . . . . The magnitude of the adjustment made for each element of comparison depends on how much that characteristic of the comparable property differs from the subject property."  Appraisal Institute, the Appraisal of Real Estate 322 (13th ed., 2008).
In the present appeal, the appellants' real estate valuation expert offered into evidence a sales-comparison analysis.  In his analysis, the appellants' real estate valuation expert relied on three comparable sales.  The Board, however, found that two of the properties were not comparable to the subject property due to their locations.  The Board found that the remaining sale, located at 8 Deer Run, in the same subdivision as the subject property, was the best evidence of value and was relied on by both parties.  The Board further found that in his analysis, the appellants' real estate valuation expert made logical and supportable adjustments for differences between the subject property and this comparable property.  In contrast, the assessors did not make any adjustments to their chosen comparables, but after hearing the appellants' real estate valuation expert's testimony regarding 8 Deer Run, agreed with his adjustment and his estimate of the subject property's fair cash value for fiscal year 2008.
In reaching its opinion of fair cash value, the Board was not required to believe the testimony of any particular witness or to adopt any particular method of valuation that a witness suggested.  Rather, the Board could accept those portions of the evidence that the Board determined had more convincing weight.  Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 473 (1981); Board of Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 701-702 (1972).

On this basis, the Board found and ruled that the fair cash value of the subject property for fiscal year 2008 was $595,000 and, therefore, decided this appeal for the appellants and granted an abatement in the amount of $521.13.

						APPELLATE TAX BOARD

					By:				______	
					   Thomas W. Hammond, Chairman



A true copy,



Attest:	______		_____
	    Clerk of the Board

	ATB 2009-608