David E. Wickles, Jr. & Miguel A. Wickles v. Board of Assessors of the Town of Hatfield (March 13, 2013)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


DAVID E. WICKLES, JR. &  	  v.      BOARD OF ASSESSORS OF 
MIGUEL A. WICKLES				   	THE TOWN OF HATFIELD

Docket No. F312283	 	    	      	Promulgated:
							 	March 13, 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 Town of Hatfield ("appellee" or "assessors") to abate a tax on certain real estate located in the Town of Hatfield owned by and assessed to David E. Wickles, Jr. and Miguel A. Wickles ("appellants") under G.L. c. 59, § 11 and 38, for fiscal year 2011 ("fiscal year at issue").
	Commissioner Mulhern heard this appeal. Chairman Hammond and Commissioners Scharaffa, Rose, and Chmielinski joined him in the corrected decision for the appellants.
	These findings of fact and report, promulgated simultaneously with the corrected decision, are made pursuant to the appellants' request under G.L. c. 58A, § 13 and 831 CMR 1.32.
	
	David E. Wickles, Jr. and Miguel A. Wickles, pro se, for the appellants.

	David J. Martel, Esq. for the appellee.
FINDINGS OF FACT AND REPORT
On January 1, 2010, the assessment date for the fiscal year at issue, the appellants were the assessed owners of a parcel of real estate located at 159 Prospect Street in the Town of Hatfield (the "subject property").  The subject property's parcel contains approximately 1.56 acres of land and is improved with a Colonial-style, single-family dwelling that was built in 2008.  The dwelling contains a finished living area of 3,527 square feet and a total of eight rooms, including four bedrooms, as well as two full bathrooms and one half bathroom.  Interior finishes include drywall and ceramic-tile and hardwood floors.  The dwelling's exterior is vinyl siding, and it has an asphalt-shingled roof.  The foundation is concrete, and the basement is unfinished.  The dwelling is heated by a forced-hot-water heating system which is fueled by gas, and there is also a central air-conditioning system.  Additional features of the dwelling include a gas fireplace, a rear deck, a covered deck on the second story, and an extended, three-car, heated, attached garage.
The subject property is located in an area of single-family homes and undeveloped land, except for the town landfill which is located across the street and an adjacent large, above-ground storage tank.
For fiscal year 2011, the assessors valued the subject property at $813,100 and assessed a tax thereon, at the rate of $10.84 per thousand, in the total amount of $8,814.00, which the appellants timely paid without incurring interest.  On January 20, 2011, in accordance with G.L. c. 59, § 59, the appellants timely filed an abatement application with the assessors.  On March 30, 2011, the assessors granted the appellants a partial abatement in the amount of $38,600, reducing the subject property's assessed value to $774,500.  Not satisfied with the amount of the abatement, the appellants seasonably filed an appeal with the Appellate Tax Board (the "Board") on June 6, 2011.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal.
In support of their argument that the subject property was overvalued for the fiscal year at issue, the appellants relied primarily on the testimony and summary appraisal report of Kathleen A. Borawski, a certified residential real estate appraiser whom the Board qualified as an expert in real estate valuation.  The appellants also offered into evidence a history of the subject property and several documents which provided the Board with some further background.      
 

Ms. Barowksi's appraisal report employed a comparable-sales analysis that cited three purportedly comparable properties in Hatfield.   According to her report and testimony, comparable number one, located at 65 Bridge Street, is a 2.3-acre parcel improved with a Colonial-style dwelling built circa 2005.  The dwelling has a total of ten rooms, including four bedrooms and also two full bathrooms and one half bathroom, with a total living area of 3,994 square feet.  The basement is unfinished.  Additional amenities include front and rear porches, an in-ground pool, and a three-car, attached garage.  This property sold on October 23, 2009 for $615,000.
Comparable number two, located at 12 Scotland Road, is a 1.1-acre parcel improved with a Colonial-style dwelling that was built in 2004.  The dwelling has a total of nine rooms, including four bedrooms, as well as two full bathrooms and one half bathroom, with a total living area of 2,492 square feet. Additional amenities include a partially finished basement, a fireplace, a screened porch, and a two-car, attached garage.  This property sold on August 24, 2009 for $467,000.
Finally, comparable number three, which is located at 25 South Street, is a 3-acre parcel improved with an eleven-year-old, Colonial-style dwelling with a total living area of 2,586 square feet.  The dwelling has both front and rear decks and also a two-car, attached garage.  As of the date of the appraisal report this property was on the market and listed for sale at $495,000.
Ms. Barowski made no time adjustments because, in her opinion, the market was stable since the comparable properties' sale dates were only two and four months prior to the relevant date of assessment.  She did, however, make adjustments to her chosen comparables for various factors including differences in the lot sizes, number of bathrooms, total living areas, garage spaces, porches, fireplaces and the presence of an in-ground pool.  Her total adjustments ranged from negative $26,345 to positive $50,225.  After taking these factors into consideration, Ms. Barowski arrived at adjusted sale prices for comparables number one and number two of $588,655 and $517,225, respectively, and an adjusted listing sale price for comparable number three of $537,935.  Ultimately, Ms. Barowski arrived at an indicated value for the subject property of $540,000 as of the relevant date of assessment. 
The assessors presented their case-in-chief through the testimony of assessor Christopher Smith and the introduction of several exhibits, including the requisite jurisdictional documents, a written critique of Ms. Barowski's appraisal report, and a sales-comparison analysis of six Colonial-style properties that sold during the period January 23, 2008 through October 23, 2009.  These properties ranged in size from 0.40 to 4.07 acres, with finished living areas that ranged from 1,764 to 4,515 square feet.  The purportedly comparable properties' sale prices ranged from $298,500 to $615,000.  The assessors made total adjustments that ranged from $128,700 to $515,100, resulting in an indicated value of the subject property of $798,500.  
The assessors also criticized Ms. Barowski's use of the sale at 65 Bridge Street, maintaining that it might not have been an arms-length transaction because the seller and buyer were close friends.  The assessors, however, failed to offer any evidence to support this allegation.  Moreover, the assessors included this sale in their own comparable-sales analysis.  
Further, with the exception of the assessors' comparable sales located at 65 Bridge Street and 12 Scotland Road, on which the appellants also relied, the adjustments made to the assessors' remaining sales exceeded 100% of their respective sale prices.  The Board found that the necessity for such large gross adjustments strongly suggested that these purportedly comparable properties were simply not comparable to the subject property.  Accordingly, the Board found that the value indicated by the assessors' comparable-sales analysis was of limited value for determining the fair cash value of the subject property for the fiscal year at issue.
 On the basis of the evidence presented, the Board found that the appellants met their burden of proving that the subject property was overvalued for the fiscal year at issue. The Board found that the best evidence of the subject property's fair market value as of January 1, 2010, were the two sales offered by both parties, particularly the October 23, 2009 sale of 65 Bridge Street.  The Board found that the properties' grade and quality were similar to the subject property and made adjustments for differences in date of construction, amenities, lot sizes, and finished living areas.  
Relying on these subsidiary findings, the Board ultimately determined that the fair cash value of the subject property for the fiscal year at issue was $625,000. The Board therefore issued a decision for the appellants in this appeal and granted an abatement of $1,669.20.

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.  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 subject property has a lower fair market value than the value 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, 393 Mass. at 600 (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 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 2007-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd, 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-sales properties' sale prices. See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082 (and the cases cited therein); Appraisal Institute, The Appraisal of Real Estate 430 (13th ed. 2008) ("After researching and verifying transactional data and selecting the appropriate unit of comparison, the appraiser adjusts for any differences.")
In the present appeal, the appellants' real estate valuation expert relied primarily on two sales that occurred in Hatfield four and two months prior to the relevant date of assessment, both of which the assessors also used.  In her analysis, Ms. Barowski made adjustments to account for differences between the subject property and her purportedly comparable properties, to arrive at an indicated value for the subject property of $540,000.  
In contrast, with the exception of the two sales which the appellants also used, the assessors' purportedly comparable properties required adjustments in excess of 100% of their sale prices, thus demonstrating that the majority of the assessors' chosen properties lacked comparability with the subject property.  "[E]xcessive adjustments 'raise serious questions regarding initial comparability.'"  The May Department Store Co. v. Assessors of Newton, Mass. ATB Findings of Fact and Reports 2009-153, 191 (quoting The Trustee of the Charles Cotesworth Pinckney Trust v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-621, 630-31).  
Based on all of the evidence, the Board found that the best evidence of the subject property's fair market value were the two sales offered by the appellant, which the assessors also used.  The Board further found that there was insufficient evidence to suggest that the sale of 65 Bridge Street was not at arms-length.  The mere allegation that it "may" have been a sale between friends was not enough to demonstrate compulsion, duress, or special circumstances.  "Evidence of the price at which comparable property has been sold is admissible unless there is compulsion on the seller or on the buyer or special circumstances that show that the sale was not made in a free market."  The Westward Group v. Assessors of Revere, 391 Mass. 1012, 1013 (1984).  The Supreme Judicial Court has "given a narrow definition to the 'compulsion' that requires exclusion of evidence of a sale."  Id.  "The burden [is] on the city to show that evidence of the sale should be disregarded by coming forward with evidence demonstrating that the sale was not the product of free bargaining."  Id. (citing Epstein v. Boston Housing Auth., 317 Mass. 297, 300 (1944).  The assessors failed to do that here and, in fact, used the same sale in their analysis.
Based on the evidence of record, the Board found that the fair market value of the subject property for the fiscal year at issue was $625,000.  Thus, the Board found and ruled that the appellants met their burden of proving that the subject property's fair market value was lower than the assessed value for the fiscal year at issue.
The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 196, 110 (1971).  The fair cash value of property cannot be proven with "mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment."  Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of evidence, and inferences to be drawn from the evidence are matters for the [B]oard."   Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).

Accordingly, the Board decided this appeal for the appellants and in its Corrected Decision granted abatement in the amount of $1,669.20.

					    THE APPELLATE TAX BOARD


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


A true copy,


Attest: ____________________________
	   Clerk of the Board

 A Community Preservation Act ("CPA") surcharge was also assessed in the amount of $231.90.
 In their comparable-sales analysis, the assessors erroneously listed the finished living area of 65 Bridge Street as 4,515 square feet.  Thus, had the assessors used the correct finished living area of 3,994 square feet, the assessors' total adjustments, and corresponding adjusted value for 65 Bridge Street, would have been lower than reported. 
 The sum includes a CPA surcharge of $48.62.

ATB 2013-197