Russell L. Seelig v. Board of Assessors of the Town of Springfield (April 8, 2005)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



RUSSELL L. SEELIG			v.	BOARD OF ASSESSORS OF 
THE CITY OF SPRINGFIELD


Docket Nos. F262986 (FY 2002)
		  F267117 (FY 2003)	     Promulgated:
April 8, 2005



	These are appeals under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate real estate taxes assessed under      G.L. c. 59, §§ 11 and 38 for fiscal years 2002 and 2003.  
	Commissioner Egan heard these appeals and, pursuant to G.L. c. 58A, § 1A and 831 CMR 1.20, issued single-member decisions for the appellant.  
	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.

	Russell L. Seelig, pro se, for the appellant.

	Melvyn Altman, Esq. for the appellee.  


FINDINGS OF FACT AND REPORT
	On January 1, 2001 and January 1, 2002, Joan M. Seelig was the assessed owner of a parcel of real estate located at 38 Oxford Street in the City of Springfield.  The property is situated in the Forest Park Historic District, which is a well-established residentially zoned area containing older houses.  The property's 8,859-square-foot parcel is level and improved with a two-story, 2,333-square-foot, Tudor Colonial-style dwelling with a stucco exterior.  There is also a detached two-car garage located at the rear of the lot.  The driveway is shared with 30 Oxford Street.  The house was built in 1912, and it contains four bedrooms, one half and two full bathrooms, a full unfinished basement, a partially finished attic, which is not included in the square footage, a front screen porch, a patio, and a fireplace in the living room.  Both the interior and exterior of the house were in average condition as of January 1, 2001 and in better than average condition as of January 1, 2002.  Part of the dwelling was refurbished in early 2001, including the master bathroom
and roof. A stair elevator, oil furnace, and two oil tanks were also added in 2001.  City sewer and water services are provided to the property, as are electric, cable, and telephone utilities.  
For fiscal year 2002, the Board of Assessors of Springfield ("assessors") valued the property at $175,000 and assessed a tax, at the rate of $19.88 per thousand, in the amount of $3,479.00.  For fiscal year 2003, the assessors valued the property at $195,500 and assessed a tax, at a rate of $19.41 per thousand, in the amount of $3,794.66.    
	On January 14, 2002, Springfield's Collector of Taxes sent out the city's fiscal year 2002 actual real estate tax notices.  In accordance with G.L. c. 59, § 57C, the appellant paid the tax without incurring interest.  On January 25, 2002, the appellant timely filed his application for abatement with the assessors.  The appellant's application was deemed denied on April 25, 2002, and, on April 30, 2002, the appellant seasonably filed his petition appealing the deemed denial with the Appellate Tax Board ("Board").  On the basis of these facts, Commissioner Egan found that the Board had
jurisdiction to hear and decide the fiscal year 2002 appeal. 
   	On December 31, 2002, Springfield's Collector of Taxes sent out the city's fiscal year 2003 actual real estate tax notices.  In accordance with G.L. c. 59, § 57C, the appellant paid the tax without incurring interest.  On January 8, 2003, the appellant timely filed his application for abatement with the assessors.  On April 6, 2003, the assessors denied the appellant's application, and, on April 28, 2003, the appellant seasonably filed his petition appealing the assessors' denial with the Board.  On the basis of these facts, Commissioner Egan found that the Board had jurisdiction to hear and decide the fiscal year 2003 appeal.    
	Prior to these two appeals, the appellant successfully appealed the subject property's fiscal year 2001 assessment.  In that appeal, the Board issued a single-member decision finding that the fair cash value of the property was $135,000 as of January 1, 2000.  Accordingly, pursuant to G.L. c. 58A, § 12A, Commissioner Egan ruled that the assessors had the burden of going forward to show that the assessments were warranted for the fiscal years at issue in these appeals. 
	 The assessors attempted to demonstrate, through the testimony and reports of their real estate valuation expert, Cornelius Begley, that the increases in the assessments on the subject property from fiscal year 2001 to fiscal years 2002 and 2003 were, at least partially, warranted. Mr. Begley prepared two comparable sales analyses -- one for fiscal year 2002 and another for fiscal year 2003.  Both analyses contained three properties located within the historic district and no more than 0.15 miles from the subject property.  While Mr. Begley testified that he had inspected the subject property on two separate occasions, he admitted that he had not inspected any of his comparable properties, relying instead on information contained in the Multi-Listing Service ("MLS") reports and views of the exterior.   
	The three properties that he used in his fiscal year 2002 comparable sales analysis were 26 Greenleaf Street,
207 Forest Park Avenue, and 27 Greenleaf Street.  These properties had sold in 2000 or early 2001 for $167,000, $155,100, and $185,000, respectively.  After adjusting these sales for such factors as time, site, size, condition, location, systems, and amenities, Mr. Begley determined that the adjusted indicated value for the subject property as of January 1, 2001 was $159,000, $16,000 below its $175,000 assessment.  He also testified that, during the relevant time period, property values increased approximately 0.5 percent per month or six percent per year.     
	The three properties that Mr. Begley used in his fiscal year 2003 analysis were 41 Garfield Street, 146 Sumner Street, and, once again, 27 Greenleaf Street.  The Garfield Street and Greenleaf Street properties sold in 2001 for $183,900 and $185,000, respectively. The Sumner Street property sold in May 2002 for $179,000.  After adjusting these sales for the same factors that he used in his fiscal year 2002 analysis, Mr. Begley determined that the adjusted indicated value for the subject property as of January 1, 2002 was $179,000, $16,500 below its $195,500 assessment.  
	In his attempt to demonstrate that the subject property was overvalued, Mr. Seelig primarily focused on the assessors' purported failure to properly grade the property.  According to the property record card, the subject property was assigned a construction grade of "A" in 1981 and that grade remained unchanged through the instant assessment dates.  Using the same Cole, Layer and Trumble Company specifications for grading, which the assessors used for assessing the property as of January 1, 2001 and 2002, Mr. Seelig demonstrated that, during the relevant time period, the property's characteristics more closely resembled the specifications associated with a construction grade of "C."  
Mr. Seelig also showed that the property did not have many of the characteristics associated with a construction grade of "A," such as: drainpipes, insulation, hardwood flooring, copper flashings, two-by-eight rafters, copper plumbing, concrete footings, a four-inch basement floor on gravel, and significantly more than minimal electrical outlets.  In addition, he demonstrated that the subject property's interior finish, electrical wiring, and heating system were typical of grade "C" construction and that several rooms were in need of repair.  Even the remodeled bathroom contained merely standard, as opposed to custom or upscale, fixtures.      
Mr. Seelig also introduced four comparable sales for fiscal year 2002 -- 90 Fairfield Street, 114 Marengo Park, 115 Forest Park Avenue, and 8 Riverview Terrace.  All of these comparable properties sold in 2000 for less than $40 per square foot, contrasted with the subject's assessed value for fiscal year 2002 approaching $75 per square foot.  The comparable properties' unadjusted sale prices were $124,500, $127,500, $129,900, and $135,500, respectively.  For fiscal year 2003, Mr. Seelig introduced another six reasonably comparable properties located within the historic district.  Their unadjusted sale prices ranged from $36.00 to $64.00 per square foot, contrasted with the subject's assessed value for fiscal year 2003 of over $83.00 per square foot.
Using the Cole, Layer, and Trumble Company grading system along with his comparables, Mr. Seelig opined that the value of the subject property for fiscal year 2002 was $175,000 if graded "A," $155,500 if graded "B," and $138,000 if graded "C."  For fiscal year 2003, he opined that the values were $195,500 if graded "A," $176,000 if graded "B," and $148,700 if graded "C."  
On the basis of all of the evidence, Commissioner Egan found that the assessors failed to prove that the significant increases in their assessments from fiscal year 2001 to fiscal years 2002 and 2003 were warranted.  Commissioner Egan also found that the appellant proved that the subject property was overvalued for the fiscal years at issue.  The evidence amply demonstrated that a reasonable construction grade for the property was closer to a grade of "C" than to an "A" for fiscal year 2002 and closer to a grade of "C+" than an "A" for fiscal year 2003, after considering the improvements to the property in 2001.  Commissioner Egan further found that the appellant's comparable sales data supported significantly lower fair cash values than the assessments.  Even the assessors' real estate valuation expert suggested fair cash values $16,000 or more below the assessments for both of the fiscal years at issue.  Commissioner Egan also found that the assessors' real estate valuation expert's comparable sales data supported values closer to those suggested by the appellant and his analyses.  Finally, Commissioner Egan credited Mr. Begley's testimony regarding the increasing value of residential property in Springfield during the relevant time period, which was further substantiated by the appellant's analyses.  
On the basis of these subsidiary findings, Commissioner Egan found that the fair cash value of the subject property as of January 1, 2001 and January 1, 2002 was $143,100 and $152,000, respectively.  Based primarily on comparable sales data, a re-grading of the property, and appreciation from the previous fiscal year, Commissioner Egan found that, for fiscal year 2002, the property had increased in value over the $135,000 fair cash value finding for fiscal year 2001, but not to the extent of the assessment.  Similarly, and because of the improvements to the property in 2001, Commissioner Egan found that the property had further increased in value from fiscal year 2002 to fiscal year 2003, by approximately $9,000 over the $143,100 value that she found for fiscal year 2002.  
Accordingly, Commissioner Egan decided these appeals for the appellant and granted abatements in the amounts of $634.17 for fiscal year 2002 and $844.34 for fiscal year 2003.         

OPINION
The assessors are required to assess all real property at its full and fair cash value. G.L. c. 59, § 28; Coomey v. Assessors of Sandwich, 367 Mass. 836, 837 (1975). 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 matter of law to 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).  
If, however, within the immediately preceding two fiscal years, the Board has determined the fair cash value of the subject property and the assessments at issue exceed the Board's prior determination then, pursuant to G.L. c. 58A, § 12A, "the burden shall be upon the [assessors] to prove that the assessed value was warranted."  Commissioner Egan ruled in these appeals that, after the appellant introduced into evidence the Board's decision for fiscal year 2001, the burden of going forward to justify the increase in the assessments from fiscal year 2001 to fiscal years 2002 and 2003 was on the assessors.  See generally Beal v. Assessors of Boston, 389 Mass. 648 (1983); Cressy Dockham & Co., Inc. v. Assessors of Andover, 11 Mass. App. Tax Bd. Rep. 41, 50 (1989) ("Once a prior determination of the Board of the fair cash value of the same property [for one of the prior two fiscal years] has been placed in evidence, [] the statute requires the [assessors] to produce evidence to 'satisfy the Board that the increased valuation was warranted.'"); Ellis v. Assessors of Northborough, 3  Mass. App. Tax Bd. Rep. 152, 154-55 (1983).  Notwithstanding this shift in the burden of production, the burden of persuasion on the issue of fair cash value still remained on the appellant.  See Johnson v. Assessors of Lunenburg, 14 Mass. App. Tax Bd. Rep. 39, 43 (1992); Cressey Dockham, 11 Mass. App. Tax Bd. Rep. at 50.  
Using a comparable sales analysis, the assessors' real estate valuation expert attempted to prove that significant increases in the assessments from fiscal year 2001 to fiscal years 2002 and 2003 were warranted.  Commissioner Egan found, however, that while an increase in each fiscal year's assessment was appropriate, the fiscal year 2002 and 2003 assessments were excessive.  Based on his comparable sales data, even the assessors' expert suggested lowering the fiscal year 2002 and 2003 assessments by at least $16,000 each.  Commissioner Egan found that the assessors' expert's comparable sales data suggested lowering the assessments to values closer to those suggested by the appellant and his analyses.    
Commissioner Egan also found that the appellant proved that the subject property was overvalued for the fiscal years at issue.  The evidence amply demonstrated that a reasonable construction grade for the property was closer to a grade of "C" than an "A" for fiscal year 2002 and closer to a grade of "C+" than an "A" for fiscal year 2003, after considering the improvements to the property in 2001.  Commissioner Egan further found that the appellant's comparable sales data supported significantly lower fair cash values than the assessments.  Lastly, Commissioner Egan credited Mr. Begley's testimony regarding the increasing value of residential property in Springfield during the relevant time period, which was substantiated by the appellant's analyses.  
Based primarily on comparable sales data, a re-grading of the property, and appreciation from the previous fiscal year, Commissioner Egan found that, for fiscal year 2002, the property had increased in value over the $135,000 fair cash value finding for fiscal year 2001, to $143,100.
Similarly, and because of the improvements to the property in 2001, Commissioner Egan found that the property had further increased in value from fiscal year 2002 to fiscal year 2003 to $152,000.  
To support his claim of overvaluation, 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. at 600 (quoting Conlon v. Assessors of Holliston, 389 Mass. 854, 855 (1983)).  Commissioner Egan ruled that the appellant demonstrated overvaluation here by both exposing flaws in the assessors' grading of the property and by introducing affirmative evidence proving the property's fair cash value.  
In reaching her opinion of fair cash value in these appeals, Commissioner Egan was not required to believe the testimony of any particular witness or to adopt any particular method of valuation that an expert witness suggested.  Rather, she could accept those portions of the evidence that she determined had more convincing weight.  Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 473 (1981); Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 701-02 (1972).  In evaluating the evidence before her, Commissioner Egan selected among the various elements of value and formed her own independent judgment of fair cash value.  General Electric v. Assessors of Lynn, 393 Mass. at 605; North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984).
Commissioner Egan need not specify the exact manner in which she arrived at her valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 106, 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 Consolidated Gas Co., 309 Mass. 60, 72 (1942).  "The credibility of witnesses, the weight of evidence, and inferences to be drawn from the evidence are matters for [Commissioner Egan]."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).




In the present appeals, Commissioner Egan ruled that the appellant met his burden of proving that the subject property was overvalued for both of the fiscal years at issue.  Commissioner Egan found that the values of the subject property for fiscal years 2002 and 2003 were $143,100 and $152,000, respectively, and, therefore, decided these appeals for the appellant. 
 
						  APPELLATE TAX BOARD


					  By:____________________________
						 Nancy T. Egan, Commissioner



A true copy:



Attest:____________________________
	  Assistant Clerk of the Board

 At all relevant times, Russell L. Seelig was also an owner of the subject property and, in accordance with G.L. c. 59, § 59, had standing to bring these appeals.
 The Board's single-member decision in the fiscal year 2001 appeal was admitted into evidence in these appeals.  
 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 2005-153