June Shillman, Trustee of RJS Home Trust v. Board of Assessors of the Town of Weston (February 22, 2006)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



JUNE SHILLMAN, TRUSTEE OF 	v.	BOARD ASSESSORS OF THE RJS HOME TRUST					TOWN OF WESTON


Docket Nos.:	F265897
			F265898
			F265899
			F267541
			F267542
			F267543   
			F274262
			F274263
			F274264		    Promulgated:
						    February 22, 2006


	These are appeals filed under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee Board of Assessors of the Town of Weston to abate taxes on certain real estate in the Town of Weston owned by and assessed to June Shillman, Trustee of the RJS Home Trust ("appellant") under G.L. c. 59, §§ 11 and 38 for fiscal years 2002 through 2004, inclusive.   
	Commissioner Gorton heard these appeals.  Chair Foley and Commissioners Scharaffa and Rose joined him in the decisions for the appellee.  

These findings of fact and report are made pursuant to the request of the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.  

	William E. Halmkin, Esq. and Jeffrey R. Burd, Esq. for the appellant.

	Ellen M. Hutchinson, Esq. for the appellee.




FINDINGS OF FACT AND REPORT


	On January 1, 2001, January 1, 2002, and January 1, 2003, appellant was the assessed owner of three parcels of real estate in the Town of Weston, situated at 77 Love Lane, 72 Love Lane, and 84 Love Lane (collectively, the "subject properties"). The parcel at 77 Love Lane has a land area of 2.16 acres and is improved with a single family home, which has a gross area of 13,088 square feet and a living area of 7,313 square feet. 72 Love Lane ("Lot 11") consists of vacant land with an area of 1.57 acres, which is directly across the street from the residence at 77 Love Lane. The parcel at 84 Love Lane ("Lot 9") adjacent to Lot 11 is also a vacant lot and covers an area of approximately five acres. 

The assessed values of the subject properties for the years at issue were as follows:

Location	FY 2002	FY 2003	FY 2004	
77 Love Lane	$3,941,200	$3,619,600	$3,794,300	
72 Love Lane	$1,130,000	$1,019,200	$1,144,600	
84 Love Lane	$1,300,200	$1,389,200	$1,514,600	


	On April 9, 2002, January 15, 2003, and January 13, 2004, the appellant filed applications for abatement for each of the subject properties, for fiscal years 2002, 2003, and 2004, respectively. By Notices dated May 23, 2002, addressing fiscal year 2002, the appellee granted abatements reducing the assessed value of 77 Love Lane to $3,642,400, reducing the assessed value of Lot 11 to $831,200, and reducing the assessed value of Lot 9 to $1,001,400. By Notices dated February 25, 2003, addressing fiscal year 2003, the appellee denied abatement with respect to each of the subject properties. By Notices dated April 15, 2004, addressing fiscal year 2004, the appellee denied abatement with respect to each of the subject properties.
	On August 9, 2002, May 6, 2003, and June 17, 2004, the appellant filed Petitions relating to each of the subject properties for fiscal years 2002, 2003, and 2004, respectively, initiating the instant appeals. On the basis of the foregoing facts the Appellate Tax Board ("Board") found that it had jurisdiction over these appeals.
	Appellant called two witnesses at trial: real estate appraiser Richard Dennis, an expert who offered an opinion of value confined in scope to the improved lot at 77 Love Lane and fiscal year 2002; and Dr. Robert Shillman, sole beneficiary of the RJS Home Trust. Mr. Dennis described the Town of Weston as a "premier" residential community in suburban Boston. Though the town has retained a "rural, beautiful setting" with little commercial activity, it has ready access to the Massachusetts Turnpike and Routes 30 and 20. Mr. Dennis described the neighborhood in which the subject properties are located as "very much an upscale residential neighborhood." However, Mr. Dennis offered no description of either the lot or the residence located at 77 Love Lane.
	Mr. Dennis stated his opinion that the "truly equitable assessed value" of the property at 77 Love Lane was $3,151,903. He submitted a report which was received in evidence. His methodology of determining "truly equitable assessed value" involved comparing the assessed value per-square-foot of living area of the home at 77 Love Lane with the average assessed values per-square-foot of living area of homes within multiple data sets. The first data set encompassed all single family residences in Weston with a minimum assessed value of $1,500,000 for fiscal year 2002. This grouping included two hundred thirty-three properties. The second data set was comprised of thirty properties selected from the first data set, which Mr. Dennis deemed to be in the "general area of 77 Love Lane." The third data set included single family homes assessed for more than $1,500,000, which Mr. Dennis considered to be in the "discreet [sic] area near 77 Love Lane."  This set included eighteen properties. From the third data set, Mr. Dennis further extracted seven properties, which he referred to as his "mansions" data set because it only included those properties "from the actual immediate streets of the subject's location," identified as "mansions" on their respective property record cards. Mr. Dennis relied on this notation on property record cards as the primary basis for the assertion that the properties in the "mansions" data set were comparable to the property at 77 Love Lane.
	Mr. Dennis computed an average assessed value per-square-foot of living area for the properties included in each of his data sets, attributing the full assessed value of each property under study to its residential living area. Applying this methodology, he gave an average assessed value of $433 per-square-foot of living area to the grouping of all properties town-wide with single family residences assessed in excess of $1,500,000. The thirty properties with single family residences assessed in excess of $1,500,000, said to be in the "general" area of 77 Love Lane, had an average assessed value of $402 per-square-foot of living area. The eighteen properties in the "discreet" area of 77 Love Lane had an average assessed value of $428 per-square-foot of living area. Finally, the seven "mansion" properties "from the actual immediate streets of the subject's location" had an average assessed value of $431 per-square-foot of living area.
	Mr. Dennis computed the assessed value per-square-foot of living area in the 77 Love Lane residence at $539, based on the pre-abatement assessed value of $3,941,400. He did not recalculate the assessed value per-square-foot of living area using the $3,642,400 valuation of 77 Love Lane the appellee defended at the trial. Mr. Dennis opined that the property at 77 Love Lane should "equitably" be valued at $431 per-square-foot of living area, the average assessed value per-square-foot of residential living area
he calculated for the properties included in the "mansions" data set. He thus arrived at his indicated value of $3,152,700 for 77 Love Lane by multiplying the average value per-square-foot of his "mansions" data set by the living area of the residence at 77 Love Lane, 7,313 square feet.
	Mr. Dennis did not give an indicated value for the subject property at 77 Love Lane for fiscal years 2003 or 2004. He theorized that the "equitable" assessed value for 77 Love Lane in fiscal year 2002 should be trended upward for fiscal years 2003 and 2004, on the basis of "that amount which is justified by the increment(s) used in the revaluation done by the Town … for the 'mansion' class of property in the subject's area of the Town." There was no evidence of what this increment was for the class of "mansion" properties for either fiscal year 2003 or 2004.
	Mr. Dennis described few particulars of the properties comprising his various data sets. He asserted that the single family residences in his "mansions" data set were, on the basis of that categorization, comparable to the residence at 77 Love Lane. Mr. Dennis did not attempt to investigate the characteristics relevant to the classification of a single family home as a "mansion." Furthermore, no adjustments were offered to account for
differences in land size, building size, year of construction, style of housing, view factors, or topography, between the property at 77 Love Lane and the purportedly comparable "mansions." While variables like gross area and land area contribute to the overall property value, Mr. Dennis failed to address their influence as possible justifications for differentials in the assessed values of properties compared to 77 Love Lane. 
Mr. Dennis supplied no evidence of sales of comparable properties. He admitted on cross-examination that his analysis did not constitute an appraisal consistent with generally accepted professional guidelines, or the Uniform Standards of Professional Appraisal Practice ("USPAP"). Mr. Dennis relied on data supplied by the appellant and her attorneys, and did not develop information gathered through his own independent research or investigation. 
	Dr. Shillman, sole beneficiary of the RJS Home Trust, was the only other witness to testify at the trial. He testified that he hired Mr. Dennis and brought these appeals because of the rate of increase in the assessed values of the subject properties on a year-to-year basis, and his perception that his mansion was being discriminated against in the assessment process. Dr. Shillman offered no information (nor was he competent to do so) about the rate of inflation in the Weston residential housing market during the relevant time period. 
Dr. Shillman gave his opinion that the vacant parcel, Lot 9, was not buildable. Lacking the expertise needed to make this determination, he cited conversations he had had with an engineer whom he had retained to examine the property. The engineer did not appear at trial; there was no other basis or corroboration offered for Dr. Shillman's opinion as to whether Lot 9 was buildable. 
Dr. Shillman's opinion of value for Lot 9, based on his assumption that it could not be built upon, was $98,600 for fiscal year 2002. However, if Lot 9 were deemed to be "potentially" buildable, he offered an opinion of value of $264,000 for that fiscal year. On the assumption that the lot could be built upon, he gave an opinion that Lot 9 was worth $1,172,000 for fiscal year 2003. There was no evidentiary basis for any of these assumptions.
Dr. Shillman gave no other opinions of value for Lot 9.  Dr. Shillman offered no opinion of value for the parcel at Lot 11 for any of the fiscal years at issue. He indicated that he understood Lot 11 to be buildable.
	Neither Mr. Dennis nor Dr. Shillman gave evidence which might show that Weston town officials had
intentionally embarked upon a scheme to undervalue any properties or class of properties, in relation to any of the subject properties. In fact, counsel for appellant disclaimed any effort to prove intentionality in the allegedly inequitable assessment of properties in the Town of Weston. 
Appellant did not offer into evidence the "equalized valuation" ("EQV") reports prepared by the Commissioner of Revenue, to show the assessment ratios reflecting a comparison of assessed values to market data from the Town of Weston. There was no evidence tending to show that any properties in Weston were being valued below their full and fair cash value, either intentionally or otherwise, for any of the years at issue. Accordingly, the Board finds the appellee Assessors did not intentionally undertake a scheme of disproportionate assessment.
Based on the foregoing, the Board found the expert opinion about the "truly equitable assessed value" for 77 Love Lane in fiscal year 2002 lacking in probative weight. The Board made no findings of what would constitute "truly equitable assessed value" for any of the subject properties, given its lack of jurisdiction to abate an assessment claimed to be inequitable but not illegal.
Dr. Shillman's opinions of value for Lot 9 were speculative and internally inconsistent. He lacked expertise sufficient to know whether or not that property was buildable, and relied on hearsay. His opinions were accordingly given no weight. There was no evidence suggesting any overvaluation of the parcel at Lot 11 for any of the years at issue.
There was no showing that there was a policy or scheme, either intentional or inadvertent, of valuing properties or classes of properties at a lower percentage of their fair cash value than the subject properties. There was no showing of a pattern of disparity between assessed values and fair market values in the Town of Weston. Moreover, there was no demonstrated discrimination against the class of properties constituting single family residences, against the sub-class of homes identified on their property record cards as "mansions," or against the subject properties specifically.
The appellant failed to carry her burden of proof as to any of the elements of a theory of disproportionate assessment, and did not show that any of the subject properties were overvalued for the periods at issue. The instant appeals were accordingly decided for the appellee.


OPINION
	Appellant has challenged the property tax assessments of the subject properties for three fiscal years, on a claim of disproportionate assessment. "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 property at a lower percentage' of fair cash value than the taxpayer's property." Brown v. Board of Assessors of Brookline, 43 Mass. App. Ct. 327, 328 (1997) ("Brown"), quoting Shoppers' World, Inc. v. Assessors of Framingham, 348 Mass. 366, 377 (1965) ("Shoppers' World").
	In Shoppers' World, a leading case on disproportionate assessment, the Supreme Judicial Court held that "[i]f the assessors have in fact adopted, either formally or informally, a practice or standard of valuation in which each dollar of land value is treated as being worth only forty-five cents, then, as a matter of common sense, a single property or group of properties to which the standard is not applied is overvalued." Id. at 369. The Court went on to describe the rationale for giving relief to a taxpayer whose property is being valued at a higher percentage of fair market value than are favored properties or classes of properties:
'The right of the taxpayer whose property alone is taxed at 100 per cent of its true value is to have his assessment reduced to the percentage of that value at which others are taxed even though this is a departure from the requirement of statute.  The conclusion is based on the principle that where it is impossible to secure both the standard of the true value, and the uniformity and equality required by law, the latter requirement is to be preferred as the just and ultimate purpose of the law.'

Id. at 373 (quoting Sioux City Bridge Co. v. Dakota County, Nebraska, 260 U.S. 441, 446 (1922)).  
The Supreme Judicial Court also discussed the evidence required for proof of disproportionate assessment: "[I]t is open to the taxpayer to prove the assessors' general policy and standards of assessment of other properties or classes of property in relation to full, fair cash value."   Shoppers' World, 348 Mass. at 377. The Court has held that "[a] taxpayer claiming disproportionate taxation bears the burden of proving that the assessors systematically assessed properties or a class of properties at a lower percentage of their fair cash value than the percentage applied to the taxpayer's property." Stilson v. Board of Assessors of Gloucester, 385 Mass. 724, 727 (1982) ("Stilson"), citing Shopper's World, 348 Mass. at 377.  
If a taxpayer makes a prima facie showing from which a scheme of disproportionate assessment can be inferred, "the assessors have the burden to show that there was no such scheme." Brown, 43 Mass. App. Ct. at 328. "The ultimate burden of persuasion, of course, will remain upon the taxpayer." First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 562 (1971). The taxpayer must also offer proof of scienter in the alleged policy or scheme. See Stilson, 385 Mass. at 728-29. "Where assessments, even if wrong, are 'consistent with honest mistake or oversight on the part of assessors' as opposed to a 'deliberate scheme of disproportionate assessment,' no relief for disproportionate assessment is appropriate." Gargano v. Board of Assessors of Barnstable, ATB Findings of Fact and Report 2003-1, 22 (citation omitted.) ("Gargano").
The Commissioner of Revenue, since the decision in Shoppers' World, has been mandated to conduct EQV valuation studies "to establish every two years 'a proposed equalized valuation which shall be the fair cash value of all property in such city or town subject to local taxation.'" Brown, 43 Mass. App. at 329, quoting G.L. c. 58, § 9. The Commissioner of Revenue also "must determine assessment ratios, which are a comparison of assessed values to the fair cash values of properties, derived primarily from a comparison of assessed values with selling prices." Id. at 329. See also Macioci v. Commissioner of Revenue, 386 Mass. 752, 756 n.8 (1982). The biennial EQV reports prepared by the Commissioner of Revenue "are admissible in evidence [before the Board] and the assessment ratios contained in the EQV reports are prima facie evidence of the ratios at which properties are assessed."  Brown, 43 Mass. App. Ct. at 329, citing G.L. c. 58, § 12 C. 
In Brown, the EQV reports showed that the Town of Brookline was assessing single family homes at 85% of fair cash value in 1984, and 71% in 1986. The Appeals Court found that "[w]ith respect to fiscal year 1987, where the 1986 assessment ratio was 0.71, the appellants have made a prima facie case of disproportionate assessment." Brown, 43 Mass. App. Ct. at 332. Yet there was no finding of "a deliberate scheme of disproportionate assessment," as is required for relief. Id. at 333 (Emphasis added.) The Court accordingly upheld the Board's decision in that case in favor of the town.
In the instant appeal, no attempt was made, using the relevant EQV reports or otherwise, to show that the Town of Weston was undervaluing any properties or class of properties in any of the fiscal years at issue.  Instead,   the appellant relied for proof of disproportionate assessment on Mr. Dennis' opinion that the property at 77 Love Lane was "inequitably" valued as compared to other "mansion" properties in fiscal year 2002. In forming this opinion, Mr. Dennis did not utilize the accepted definition of fair market value at Massachusetts law, see Boston Edison Co. v. Assessors of Watertown, 387 Mass. 298, 301 (1982) ("Boston Edison"), or adhere to any recognized appraisal methodology. Cf. General Electric Co, v. Board of Assessors of Lynn, 393 Mass. 591, 595 (1984) ("General Electric") (Board and experts typically consider "three valuation approaches.") He admitted that he had eschewed the standards set by the appraisal profession. See generally King's Daughters & Sons Home v. Board of Assessors of Wrentham, ATB Findings of Facts and Reports 2002-427, 465 (deviation from "explicit USPAP standards renders … report inherently suspect from the outset and lacking in probative value"). Indeed, it is difficult to discern what standards Mr. Dennis used in formulating his opinion. We know of no authority for the proposition that all properties improved with "mansions" in a given area should be assessed an equivalent amount per-square-foot of
living area, without regard to specific comparability factors. Finally, because Mr. Dennis' unsupported opinion of what constitutes "equitable" assessment is not probative of disproportionate assessment, the Board gives it no weight. See Gargano, ATB Findings of Fact and Report 2003-1, 22 (Expert's "estimate of value based on what she termed 'equitable assessment' or disproportionate assessment" struck from record.) See also Commissioner of Revenue v. Marr Scaffolding Co., 414 Mass. 489, 494 (1993) ("[T]he statute does not authorize an abatement of an inequitable tax assessment, but only an illegal (or excessive) one.")
Another fundamental failure of proof lay in the absence of evidence from which might be drawn an inference of an intentional scheme of disproportionate assessment. Appellant's counsel represented during the trial that an intentional scheme was not even alleged. As the Brown holding emphasizes, scienter is required for proof of disproportionate assessment. Brown, 43 Mass. App. Ct. at 332. 

To the extent appellant based her claim on a theory of overvaluation, its evidence was cursory at best. The Board utilizes "three valuation approaches, the replacement cost, market, and capitalization of income methods...." General Electric, 393 Mass. at 595. No valuation evidence consistent with these methodologies was proffered. 
The Board found Dr. Shillman's opinions of value for Lot 9 to be speculative, unfounded, and unreliable. He had no basis on the record for his assumption that Lot 9 was not buildable. He gave no opinion of value for Lot 11. Dr. Shillman's testimony offered little upon which the Board might rely for the requisite substantial evidence for a finding of value. The Board accordingly rejected Dr. Shillman's opinion evidence and gave it no weight. See Boston Edison, 387 Mass. at 307 ("[T]he weight to be given to opinion evidence, not shown to be based on legally incompetent foundations, is for the board.")(Emphasis added.) Given the absence of probative evidence "[i]t was proper for the board to presume that the valuation made by the assessors was valid." Schlaiker v. Board of Assessors of Great Barrington, 365 Mass. 243, 245 (1974).
For the foregoing reasons, the Board decided these appeals for the appellee.

APPELLATE TAX BOARD


				By:	___________________________________
					Anne T. Foley, Chair


					___________________________________
					Frank J. Scharaffa, Commissioner


					___________________________________
					Donald E. Gorton, III, Commissioner


					___________________________________
					Nancy T. Egan, Commissioner


					___________________________________
					James D. Rose, Commissioner



A true copy,



Attest:	____________________________
		Assistant Clerk of the Board

  While Mr. Dennis counted two hundred twenty-five properties within his first data set, he appears to have undercounted slightly. The correct number of properties was two hundred thirty-three.
   Appellant included a cryptic overvaluation argument for 84 Love Lane in her brief. However, appellant conceded at trial, through counsel, that the fair market value of her properties was "at least the assessed value." While Dr. Shillman offered various, conflicting opinions of value for Lot 9, his opinions lacked appropriate foundation and will not support a finding of value at variance with the assessed values.
 Counsel for the appellant at trial stressed that his theory was one of disproportionate or "inequitable" assessment. As counsel stated, "This case has nothing to do with fair market value."

ATB 2006-108