Warren C. & Tiina B. Smith v. Board of Assessors of the Town of Marion (April 25, 2005)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



WARREN C.& TIINA B. SMITH  	v.	   BOARD OF ASSESSORS OF
						   THE TOWN OF MARION

Docket No. F267636				   Promulgated:
							   April 25, 2005
						
This is an appeal filed under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65, from the refusal of the Marion Board of Assessors to abate taxes on real estate located in the Town of Marion, owned by and assessed to the appellants under G.L. c. 59, § 38, for fiscal year 2003.
Commissioner Egan heard the appeal and was joined in a decision for the appellee by Commissioners Scharaffa and Gorton.
	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.

	J. Walter Freiberg, III, Esq. for the appellants.
	Daniel F. Murray, Esq. for the appellee.



FINDINGS OF FACT AND REPORT
On January 1, 2002, Walter C. and Tiina B. Smith were the assessed owners of a parcel of real estate located at 125 Allens Point Road, in the town of Marion.  For fiscal year 2003, the Board of Assessors of Marion ("assessors") valued the property at $5,020,600 and assessed a tax, at the rate of $10.07 per one thousand, in the amount of $50,557.44.  The appellants paid the taxes due without incurring interest.  On Monday, February 3, 2003, the appellants timely filed an application for abatement with the assessors.  The appellants' application was denied on February 19, 2003, and on May 15, 2003, the appellants seasonably filed an appeal with the Appellate Tax Board ("Board").  On the basis of these facts, the Board found that it had jurisdiction to hear and decide the present appeal.
	The Town of Marion, located on Buzzard's Bay, with its protected harbor, excellent anchorage and marinas, sandy beaches, expansive vistas of the Elizabeth Islands and its limited waterfront land available for development, is a desirable community on the south coast of Massachusetts.  The subject property is located on Allen's Point, a peninsula which is formed by a strip of land with Sippican Harbor to the west and Blankinship's Cove to the east.  The property lies opposite the Marion town wharf, Tabor Academy, and a marina.  
The property is a 3.45-acre parcel of real estate improved with a single-family dwelling and a guesthouse.  To the rear of the guesthouse is a lap pool.  The lot has approximately 295 feet of frontage on the east shore of Sippican Harbor and 187 feet of frontage on Allen's Point Road, a private way.  The property is serviced by town water and a private septic system.
The topography of the property is rolling, beginning at sea level and sloping gradually upward with its highest elevation at twenty feet above sea level.  There is a moat around the house to intercept the water, which flows down toward the house from the higher elevation back yard.  To the rear of the property there is a six-foot high sea wall, made of stone and poured concrete.  Built into the wall is a 250-square foot, twelve-stall dressing room, which has a single light and water faucet per stall.  After the sea wall, the beach area averages about six feet in width at mid-tide.  Also to the rear of the property, near the center of the property line, is a wharf which extends west into Sippican Harbor.
Built circa 1903, the subject dwelling is a two-and-one-half-story, Tudor-style home with an attached three-car garage.  The house is not visible from Allen's Point Road and is built approximately 120 feet from the harbor.  The roof is gable-type covered with Spanish tiles and the siding is half-timbered with stucco panels.  There are copper gutters and downspouts along the roof line.  There is a full basement with entry through a door in the mud room.  The house has seven zones for its air-conditioning and heating, by gas, electric and oil. The house was built parallel to the water and one room deep so that every room has a view of the water.  The rear of the house, facing the harbor, is enhanced with multiple porches and terraces.
The home has a total of twenty-two rooms, with ten full-baths and one half-bath, with a total living area of approximately 13,404 square feet.  The first floor is divided into the following rooms: a game room; an office; a screened porch off the office; a center parlor; a dining room and morning room; a pantry; an eat-in-kitchen with a storage pantry; a family room; a weight/exercise room; and a mud room off the garage.  The second floor is divided into the following rooms:  a master bedroom with dressing rooms and an attached office; three children's bedrooms; five guest bedrooms; and a laundry room.  All but two of the bedrooms have their own bath.  The house has high ceiling heights on the first floor, an extensive amount of windows, and high quality plumbing fixtures and bath finishes.  
Located at the right rear of the property, nearer the street, is the guest house.  It is a single-story structure with two bedrooms, a kitchen, a living room, and three full-baths.  There is one fireplace.  The structure has central heat and air conditioning.  The roof is covered with Spanish tiles, and there is a full basement for storage.  Both the house and guesthouse are above-average quality construction and are well maintained.
The appellants purchased the property in October 1997 for $1,635,000.  Subsequently, between 1997 and 1999, the appellants remodeled the house, built a 1,600-square-foot single-story addition, and also a 900 square-foot, three-car attached garage with electric doors.  During the renovations all systems, including electrical, plumbing, HVAC, windows, walls, floors and ceilings were repaired or replaced.  The electrical was upgraded to a 400 amp, 3-phase system.  The remainder of the house was refurbished or renewed.  During this time, the appellants demolished the existing guesthouse and built a new one, and also added an in-ground pool.  The total cost for all renovations, including construction, was approximately $5,000,000.
	In support of their contention that the subject property was overvalued for fiscal year 2003, and also disproportionately assessed, the appellants offered the testimony and appraisal report of Mr. Bernard Giroux, a certified real estate appraiser.  Based on his education and experience, the Board qualified Mr. Giroux as an expert witness for purposes of real estate valuation.
	Mr. Giroux used the sales comparison methodology to value the subject property.  Primarily, he relied on three sales of properties that he deemed to be comparable to the subject property.  Sale number one, located at 106 Point Road, Marion, is a 1.62-acre parcel of waterfront property improved with a Ranch-type single-family dwelling with three bedrooms, two baths, and a finished area of 2,066 square feet.  The house was built in 1948 and most recently remodeled in 1985.  The current owners purchased the property on October 10, 2002, for $2,000,000.  Sale number two, located at 6 Moorings Road, Marion, is a 3.13 acre-parcel of waterfront property that sold on June 5, 2002, for $2,050,000.  The property is improved with a Gambrel-style dwelling with three bedrooms, two-and-a-half baths, and a total living area of 3,245 square feet.  The house was built in 1972 and remodeled in 1988.  Sale number three, located at 18 Ned's Point Road, Mattapoisett, is a 3.24-acre parcel of waterfront property improved with a Cape-style dwelling with five bedrooms, seven-and-a-half-baths, and a total living area of 9,539 square feet.  The house was built in 1907 and remodeled by the current owners in 2003.  The property sold on August 9, 2002, for $3,200,000.  Based on the properties' living area and sale prices, Mr. Giroux calculated per-square-foot sale values of $968.05, $631.74, and $335.46, respectively.  
Mr. Giroux then made adjustments for differences between his chosen comparables and the subject property.  In terms of lot area and waterfront, despite the subject property's larger waterfront footage, Mr. Giroux considered the chosen comparables superior to the subject property because they have better views and privacy.  The adjustments for this factor ranged from negative five to negative twenty-five percent.  For location, Mr. Giroux again considered the subject property to be inferior to the comparables because of the sharing of a semi-private driveway and its close proximity to commercial waterfront activity.  Moreover, Ram Island interrupts the subject property's view of Buzzard's Bay.  The adjustments made ranged from negative five to negative fifteen percent.  
Next, Mr. Giroux made an adjustment for size and superadequacy as it relates to the size of the subject property's dwelling, the existence of a guesthouse, the overall cost to maintain the subject property, and other factors relating to the subject property's considerably larger size.  Adjustments made ranged from negative twenty to negative forty-five percent.  Last, Mr. Giroux made an adjustment for the subject property's superior construction, which ranged from positive five to ten percent.  Noting that all three sales occurred within a year of the assessment date at issue, Mr. Giroux made no adjustment for timing.  In total, Mr. Giroux's adjustments calculated to negative seventy-five percent, negative sixty-percent and negative twenty-five percent, respectively.  
After adjustments, Mr. Giroux calculated adjusted per-square-foot values of $242.01, $252.70, and $251.60, respectively.  Applying these values to the subject property's 13,404 square feet of living space, main house only, Mr. Giroux calculated a range of fair market value for the subject property of $3,245,108.40 to $3,387,190.80.  Ultimately, he concluded that the subject property had a fair market value of $3,200,000 for fiscal year 2003.
Next, relying on sales number one and number two, and the properties' respective assessments for calendar year 2003, Mr. Giroux calculated an "assessment to sales ratio" of eighty-three percent.  Applying this percentage to his calculated fair market value for the subject property of $3.2 million, Mr. Giroux argued that for "assessment purposes" the subject property had a fair market value of only $2,656,000. 
Mr. Giroux also claimed to have reviewed assessments of six other properties on Allen's Point Road.  Mr. Giroux contended that the properties' assessment information showed that between fiscal year 2002 and 2003 the average increase in assessment for these properties was 42.48% compared to 79.96% increase for the subject property during the same period.  The appellants argued that this data prove that the subject property was disproportionately assessed in relation to other properties on Allen's Point Road.
	On cross-examination, Mr. Giroux acknowledged that having a dock generally enhances the value of a parcel of real estate.  However, despite that two of his so-called comparable properties do not have a dock, he made no adjustment to the properties' per-square-foot sale price.  Also, Mr. Giroux made no adjustment for the subject property's pool and the comparables' lack of one.  In addition, when calculating the subject property's fair market value, by applying the adjusted per-square-foot sale prices to the subject property's living area, Mr. Giroux admitted that he failed to include in his calculations the guesthouse's living area, approximately 1,700 square feet.  
In support of their assessment, the assessors offered into evidence the testimony of Donald Thornley.  Mr. Thornley is an employee of Vision Appraisal Technology, where he has worked since 1984 and is currently the project manager/senior commercial appraiser for the company's property revaluation business.  Mr. Thornley testified that Vision Appraisal was hired by the town of Marion to do its fiscal year 2003 property revaluation.  Mr. Thornley is not a certified Massachusetts real estate appraiser and, therefore, the Board did not qualify him as an expert witness in real estate valuation.  The Board did, however, allow into evidence Mr. Thornley's testimony and appraisal report to the extent they addressed the revaluation process adopted by the assessors.  
Mr. Thornley explained that to complete the revaluation, he first had to analyze sales of properties in the town within a given period of time.  This analysis was then used to derive the final assessment values, which were submitted to the Massachusetts Department of Revenue ("DOR") for certification.  He explained the DOR certification as an audit of Vision Appraisal's process designed to ensure that the values derived from the revaluation fairly approximated the properties' fair market value and also to identify disproportionate assessments.  As a result of the process, Mr. Thornley arrived at a fair cash value for each of the residential properties in Marion.  These values were then adopted and used by the assessors as the residential properties, including the subject property's, fiscal year 2003 assessments.
With respect to their claim of disproportionate assessment, the Board found that the appellants failed to satisfy the preliminary threshold of showing that the assessors employed a deliberate scheme of discriminatory or disproportionate assessment in Marion.  The Board found no evidence that the assessors deliberately discriminated against the appellant's property or in favor of certain classes of property.  The Board found that the assessors, by using the revaluation values certified by the Commissioner of Revenue for fiscal year 2003, made a reasonable effort to apply a uniform standard of valuation to all property.  
With respect to the appellants' claim of overvaluation, the Board found that the appellants' real estate valuation expert failed to sufficiently demonstrate the comparability of his selected properties and the subject property.  Notably, all of the cited properties had less land area than the subject property and all had significantly less square-footage than the subject property.  Mr. Giroux made adjustments for these differences and also for location and construction quality.  At a minimum, Mr. Giroux's adjustments calculated to negative twenty-five percent.  The Board found that the degree of adjustments necessary negated any finding of comparability.  In addition, Mr. Giroux did not include in his calculations adjustments for the guesthouse living area, the dock, and the in-ground pool.    His omission of the guest-house square footage significantly understated the subject property's square footage as a whole and hence its value.  
Accordingly, the Board found that the appellants' real estate valuation expert's analysis was flawed and unreliable and, therefore, was not sufficient to demonstrate that the subject property was overvalued for fiscal year 2003.  Further, the Board noted that since their purchase of the subject property in October 1997 for $1,635,000, the appellants completely renovated and remodeled the dwelling, demolished and re-constructed the guesthouse, and also added an in-ground pool, totaling approximately $5,000,000.
On the basis of these findings of fact, the Board issued a decision for the appellee.

OPINION
The assessors have the statutory and constitutional obligation to assess all real property at its full and fair cash value.  Part 2, C. one, section one, article 4, of the Constitution of the Commonwealth; Article 10 of the Declaration of Rights; G. L. c. 59, §§ 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 will agree if both of them are fully informed and under no compulsion.  Boston Gas Company v. Assessors of Boston, 334 Mass. 549, 566 (1956).
The Board is entitled to presume that the assessment is valid until the taxpayer sustains his burden of proving otherwise.   Schlaiker v. Board of Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  Accordingly, the burden of proof is upon the taxpayers to make out their right as a matter of law to an abatement of the tax.  Id.  The taxpayers must demonstrate that the assessed valuation of their property was improper.  See Foxborough Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 691 (1982).
If the taxpayer can demonstrate in an appeal to the Board that he has been the victim of a scheme of discriminatory, disproportionate assessment, he "may be granted an abatement . . . which will make . . . his assessment proportional to other assessments, on a basis which reaches results as close as is practicable to those which would have followed application by the assessors of the proper statutory principles."  Coomey, 367 Mass. at 836 (quoting Shoppers' World, Inc. v. Assessors of Framingham, 348 Mass. 366, 377-78 (1965)).  See also Brook Road Corporation v. Board of Assessors of Needham, 2001 ATB Adv. Sh. 648, 658 (Docket No. F240871, August 20, 2001); Gargano v. Assessors of Barnstable, 2003 ATB Adv. Sh. 501, 531-532 (Docket Nos. F250893, et al., September 10, 2003).  The burden of proof as to existence of a "scheme of discriminatory, disproportionate assessment" is on the taxpayer.   First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 559 (1971); see also Schlaiker, 365 Mass. at 245.  
"In order to obtain relief on the basis of disproportionate assessment, a taxpayer must show that there is an 'intentional policy or scheme of valuing properties or classes of properties at a lower percentage of fair cash value than the taxpayer's property.'"  Brown v. Assessors of Brookline, 43 Mass. App. Ct. 327, 332 (1997)(quoting Shoppers' World, 348 Mass. at 377).  If taxpayers successfully demonstrate improper assessment of such a number of properties to establish an inference that such a scheme exists, the burden of going forward to disprove such a scheme shifts to the assessors.  Shoppers' World, 348 Mass. at 377.  "The ultimate burden of persuasion, of course, will remain upon the taxpayer."  First National Stores, 358 Mass. at 562. 
In the present appeal, the Board found and ruled that the appellants failed to offer any evidence to demonstrate that the assessors engaged in an "intentional widespread scheme of discrimination" in Marion. Stilson v. Assessors of Gloucester, 385 Mass. 724, 727-28 (1982).  The finding of a widespread scheme would require far more data and analysis between classes of property than the minimal assessment information and analysis offered by the appellants. Accordingly, the Board ruled that the appellants had failed to meet their burden of showing that a deliberate scheme of disproportionate assessment existed in this appeal.  
Where assessments, even if wrong, are "consistent with honest mistake or oversight on the part of the assessors," as opposed to a "deliberate scheme of disproportionate assessment," no relief for disproportionate assessment is appropriate.  Brown v. Assessors of Brookline, 1996 ATB Adv. Sh. 1, 20 (Docket No. 145188, et al., February 9, 1996), aff'd, 43 Mass. App. Ct. 327 (1997)(quoting Stilson, 385 Mass. at 728).  The matter is more appropriately addressed by a claim of overvaluation.  Brown at 11.    
A taxpayer must prove that the assessed valuation of his or her property was improper.  See Foxboro Associates, 385 Mass. at 691.  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)). 
In this appeal, the Board found and ruled that the appellants did not present sufficient credible evidence to prove that the subject property was overvalued.  The Board found that the appellants' real estate valuation expert failed to demonstrate the comparability between his chosen properties and the subject property.  The total adjustments made for differences ranging from negative twenty-five percent to negative seventy-five percent.  The Board found that the degree of adjustments necessary negated any finding of comparability.  In addition, Mr. Giroux did not include in his calculations adjustments for the guesthouse living area, the dock, and the in-ground pool.  His omission of the guest-house square footage significantly understated the property's square footage as a whole and hence its value.  Accordingly, the Board found that the appellants' real estate valuation expert's sale-comparison methodology was flawed and, therefore, unreliable and did not demonstrate that the subject property was overvalued for fiscal year 2003.  Further, since the appellants purchased the property in 1997 for $1,635,000, the appellants completely renovated the dwelling, demolished and re-constructed the guesthouse, and also added an in-ground pool, all totaling approximately $5,000,000, bringing the appellants' total cost for the property to $6,635,000.  The Board found this to be further evidence to show that the subject property was properly valued for the fiscal year at issue. 
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. at 683; 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).   "The credibility of witnesses, the weight of evidence, the 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 found that the appellants had not met their burden of proving that the subject property was over-assessed for fiscal year 2003.  Therefore, the Board issued a decision for the appellee in this appeal.


    						THE APPELLATE TAX BOARD

					By:					_______
						Nancy T. Egan, Commissioner


A true copy,

Attest:			_____________
	   Asst. Clerk of the Board
					    

ATB 2005-219