Eric P. Limont, Trustee, K&E Realty Trust v. Board of Assessors of the Town of Marshfield (November 25, 2013)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


ERIC P. LIMONT, TRUSTEE	    v.         BOARD OF ASSESSORS OF
K&E REALTY TRUST					    THE TOWN OF MARSHFIELD

Docket No. F312382			         Promulgated:
							    November 25, 2013


	This is an appeal 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 Marshfield ("assessors" or "appellee") to abate taxes on certain real estate in the Town of Marshfield owned by and assessed to Eric P. Limont, Trustee ("appellant") under G.L. c. 59, §§ 11 and 38 for fiscal year 2011 ("fiscal year at issue").
	Commissioner Chmielinski heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose and Mulhern joined him in a 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.

	Francis L. Colpoys, Jr., Esq. for the appellant.
	Elizabeth Bates, assessor, for the appellee.


			FINDINGS OF FACT AND REPORT

On the basis of the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2010, Eric P. Lamont, Trustee of the K & E Realty Trust ("appellant") was the assessed owner of a parcel of real estate located at 892 Summer Street in Marshfield ("subject property").  For fiscal year 2011, the assessors valued the subject property at $3,369,100 and assessed a tax thereon, at the rate of $11.29 per thousand, in the amount of $38,037.14.  
On December 28, 2010, the Marshfield Collector of Taxes mailed the town's actual fiscal year 2011 tax bills.  In accordance with G.L. c. 59, § 57C, the appellant timely paid the tax assessed without incurring interest.  On January 31, 2011, in accordance with G.L. c. 59, § 59, the appellant timely filed an Application for Abatement with the assessors, which the assessors denied on April 25, 2011.  On June 9, 2011, the appellant seasonably filed his appeal with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal. 
The subject property consists of a gated, 13.5-acre waterfront parcel improved with a two-story, single-family dwelling constructed in 2002.  The subject dwelling contains a total of nine rooms, including four bedrooms, and also four full bathrooms and one half bathroom, with a total living area of 9,098 square feet.  There is a three-car detached stone garage with guest quarters located above the garage, with an additional 1,500 square feet of living area, for a total finished living area of 10,598 square feet.   The subject dwelling has a forced hot-air heating system fueled by gas and central air conditioning.  Additional amenities include a partially-finished basement, a patio, three fireplaces, an in-ground pool, a pool house, and a dock. The interior walls are, for the most part, solid wood.  The subject property is a "castle-like" structure with a stone exterior and a gable-style, wood-shingle roof.  The property record card rated the dwelling as in "excellent" condition with a grade of "AA Superb." 
The subject property is located in North Marshfield and sits on a rise above the North River.   Summer Street is a tree-lined street in an older section of town with an eclectic collection of homes, including similar "estate-type" residences, as well as more modest homes built in the 17th century.  The subject property has approximately 70 feet of frontage on Summer Street and the dwelling is set back so that it is not visible from the street.  The assessors identified the subject property's neighborhood as "RFO", a code for "riverfront very good."   
For the fiscal year prior to the one at issue in this appeal, the Board issued a decision reducing the subject property's assessed value, as abated by the assessors, from $3,651,600 to a fair cash value of $3,439,800.  Because the assessment for the fiscal year at issue -- $3,369,100 -- was less than the $3,439,800 fair cash value which the Board found for the previous fiscal year, the Board found and ruled in the present appeal that the assessors did not have the burden of going forward to show that the assessment for fiscal year 2011 was warranted under G.L. c. 58A, § 12A.  Accordingly, the appellant had the burden of proving overvaluation in the instant appeal.
In support of his claim that the subject property was overvalued for the fiscal year at issue, the appellant offered his own testimony and the testimony of Janet Koelsch, a real estate broker with more than thirty years of experience in the sale of "high-end" homes in the south shore real estate markets, including Marshfield.  The appellant also offered into evidence several exhibits including:  the Board's fiscal year 2010 decision concerning the subject property; the property record cards, quitclaim deeds and the Board's fiscal year 2011 decisions concerning 922 Summer Street; the property record card, the Multiple Listing Service ("MLS") listing sheet, and the quitclaim deed for 1233 Union Street; and, the property record card for 12 Hunter Drive. 
The appellant and Ms. Koelsch maintained that the "perfect super comparable," and therefore the best evidence of the subject property's fair cash value for the fiscal year at issue, is the sale of 922 Summer Street, located adjacent to the subject property.  This sale involved two separate but abutting parcels with a total lot size of 16.07 acres.  Lot 1 is a non-waterfront parcel containing 5.07 acres of land improved with a wood-frame, single-family dwelling containing eight rooms, including three bedrooms as well as three full bathrooms and two half bathrooms, and also a two-room bungalow-style guest house including one bedroom and one bathroom, with a combined total living area of 9,279 square feet.  The property record card rated the dwellings as in "very good" condition with a grade of "Superb."  Lot 2 is an 11.00-acre waterfront parcel with no improvements.  The two lots were sold together on March 2, 2010 for $2,700,000.  On April 23, 2012, the Board issued decisions for the appellant finding that the parcels' fiscal year 2011 fair cash values were $2,000,000 and $700,000, respectively.  See Julie Tweed v. Assessors of Marshfield, Docket No. F310936, April 23, 2012; Julie Tweed v. Assessors of Marshfield, Docket No. F310937, April 23, 2012.     
The property located at 1233 Union Street is a 10.17-acre waterfront parcel of land improved with a single-family dwelling with a finished living area of 9,218 square feet.  The dwelling is approximately twenty years older than the subject property and has a wood exterior with an asphalt-shingle roof.  The interior walls are drywall and the flooring is a mix of hardwood and carpeting.  The assessors rated the dwelling as in "A+ Excellent" overall condition, compared to the subject property's "AA Superb."  This property sold for $2,337,000 on November 27, 2009, and was assessed at $2,227,500 for the fiscal year at issue. 
Finally, the appellant offered into evidence the property record card for 12 Hunter Drive.  This is an 11.9-acre parcel improved with a Cape-style, single-family dwelling with a finished living area of 7,333 square feet. The dwelling has a wood exterior and the interior walls are drywall.  The assessors rated the subject property's overall condition as "Good."  For fiscal year 2011, the property was assessed at $2,183,000.
Based on the evidence submitted, the appellant argued that the subject property should be assessed at no more than $2,700,000, the sale price of the adjacent property located at 922 Summer Street.
In support of their assessment, the assessors offered the testimony of Elizabeth Bates, the town's assessor/appraiser.  Ms. Bates testified that the subject property is a stone mansion located on a rise overlooking the North River and is perhaps "the finest residence in Marshfield."  The assessors also offered into evidence several exhibits, including the requisite jurisdictional documentation, the subject property's property record card and photographs of the subject property.  The assessors also submitted the property record cards for five properties including: 1233 Union Street, which was also cited by the appellant; 375A Union Street; 1355 Union Street; 525 Summer Street; and 938 Summer Street.  With the exception of 1233 Union Street, the only waterfront property is 938 Summer Street, an 11-acre parcel improved with a Colonial-style dwelling and also a detached pool/guest house.  Both structures have clapboard exterior and a wood-shingle roof, with a total combined living area of 6,352 square feet.  For fiscal year 2011, 938 Summer Street was assessed for $1,982,800.  
With respect to the appellant's comparable sale located at 922 Summer Street, Ms. Bates testified that this sale is not indicative of the subject property's fair cash value for several reasons:  although the appellant categorized this as one sale transaction, it actually involved two buildable lots; the improved lot is identified by the assessors as a "multi-house" property and they assigned a use code different from the one they used for the subject property; the improvements on lot 1 have a wood exterior compared to the subject property's majestic stone construction; the improved lot is not waterfront and there is no dock.  Ms. Bates further testified that according to Marshfield's Board of Health, lot 1's septic system failed at the time of sale, which would require an easement on lot 2 as a condition to the Town's variance to rebuild the septic system.  Finally, Ms. Bates testified that the seller's divorce in June 2009 suggested that the seller was under compulsion to liquidate and therefore the assessors "coded out" the sale of 922 Summer Street as a non-arm's-length transaction. 
Moreover, Ms. Bates testified that the subject property's fiscal year 2011 assessment, which is less than the Board's determination of fair cash value for fiscal year 2010, is consistent with the 2.21% average decrease for single-family residences in Marshfield for the same time period.
Based on all of the evidence of record, and to the extent it is a finding of fact, the Board found that the appellant failed to prove that the subject property was overvalued for the fiscal year at issue.  The Board found that the sale of the adjacent property located at 922 Summer Street is distinguishable for several reasons, including: the improved lot is not waterfront; there is no dock; and the wood-shingled exterior of the dwellings is inferior compared to the subject property's majestic stone construction.  The Board also found that at the time of the sale, 922 Summer Street's septic system needed to be replaced, which would require additional monetary expenditures, thereby increasing the total cost of the property.  The Board further agreed with the assessors that the circumstances surrounding the sale suggested that the seller was under compulsion, which the appellant did not rebut with evidence establishing that the sale was at arms-length.  Finally, the appellant failed to make any adjustments to account for differences between his purportedly comparable properties, including 922 Summer Street, and the subject property.  Absent such adjustments, no meaningful comparison of these properties with the subject property could be made and, therefore, the appellant's evidence lacked persuasive value.  Moreover, the Board found that the assessors' comparable assessments supported the subject property's fiscal year 2011 assessment. 
On this basis, the Board found that the appellant failed to meet his burden of proving that the subject property was overvalued for the fiscal year at issue.   Accordingly, the Board issued a decision for the appellee in this appeal.
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 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 [his] 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)).  In the present appeal, the appellant attempted to demonstrate that the subject property was overvalued by offering affirmative evidence of value.  Specifically, the appellant relied on two comparable sales and two comparable assessments to show that the subject property was overvalued for the fiscal year at issue.
Recent sales of comparable properties in the market may "furnish strong evidence of market value[.]"  Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 682 (1982); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981); First National Stores, Inc. v. Assessors of Somerville, 385 Mass. 554, 560 (1971).  Additionally, evidence of the assessed values of comparable properties may provide probative evidence of fair cash value. See G.L. c. 58A, § 12B; John Alden Sands v. Assessors of Bourne, Mass. ATB Findings of Fact and Reports 2007-1098, 1106-07 (citing Chouinard v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-299, 307-308). "Adjustments must be made to both assessed values and sales data to account for differences between the subject property and the properties offered for comparison."  Doherty v. Assessors of Lee, Mass. ATB Findings of Fact and Reports 2013-174, 181 (citing Lareau v. Assessors of Norwell, Mass. ATB Findings of Fact and Reports 2010-879, 889-90 ("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.")(citation omitted)). 
In the present appeal, the appellant relied primarily on the sale of the adjacent property located at 922 Summer Street.  The Board, however, found that this sale was distinguishable from the subject property for several reasons: the residential lot is not waterfront; there is no dock; the wood-shingled exterior of the dwellings is inferior compared to the subject property's majestic stone construction; and, the purportedly comparable property's failed septic system, which would require a Town variance and incur additional expenses.  Moreover, the Board agreed with the assessors that the previously described circumstances surrounding this sale suggested that the seller was under compulsion and that this was a non-arm's-length transaction.  The appellant offered no evidence to rebut that suggestion.  '"The burden of proving that the price was fixed by fair bargaining or bidding, and not some form of compulsion . . . , is on the party offering the price.'" Wayland Business Center Holdings, LLC and GRM Properties II, LLC v. Assessors of Wayland, Mass. ATB Findings of Fact and Reports 2005-557, 593-94 (quoting Epstein v. Boston Housing Authority, 317 Mass. 297, 300 (1944)). 
The Board further found that because the appellant failed to make any adjustments to his comparable sale and comparable assessment properties despite their differences from the subject property, the appellant's evidence lacked persuasive value and the Board was not able to make a determination that the subject property's assessment exceeded its fair cash value.  See Pleasant Street Realty Trust v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 2013-960-970-71 (citing Lupacchino v. Assessors of Southborough, Mass. ATB Findings of Fact and Reports 2008-1253, 1269 ("[W]ithout appropriate adjustments . . . the assessed values of [comparable] properties [do] not provide reliable indicator[s] of the subject's fair cash value.")); see also Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 402, aff'd, 73 Mass. App. Ct. 1107 (2008).
On the basis of the evidence of record, 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.  Accordingly, the Board issued a decision for the appellee.

					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 $1,107.24.
 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 2013-1140