James & Cornelia Iredell v. Board of Assessors of the Town of Mattapoisett (February 24, 2012)

                                                                               COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


JAMES & CORNELIA IREDELL	   v.     BOARD OF ASSESSORS OF
THE TOWN OF MATTAPOISETT

Docket No. F303820 				Promulgated:
							February 24, 2012


	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 Mattapoisett ("assessors" or "appellee"), to abate taxes on real estate owned by and assessed to James and Cornelia Iredell ("appellants") under G.L. c. 59, §§ 11 and 38, for fiscal year 2009 ("fiscal year at issue").
	Commissioner Mulhern heard this appeal. Chairman Hammond and Commissioners Scharaffa, Rose and Chmielinski joined him in the decision for the appellee.
These findings of fact and report are made on the motion of the Appellate Tax Board ("Board") pursuant to G.L. c. 58A, § 13 and 831 CMR 1.32, and are issued simultaneously with the Board's Decision in this appeal.

Patricia A. McArdle, Esq. for the appellant.
Donald Fleming, Esq., assessor, for the appellee.
FINDINGS OF FACT AND REPORT
INTRODUCTION
For the fiscal year at issue, the assessors dramatically increased values of waterfront and water-view land in the Town of Mattapoisett relative to values for the prior fiscal year. In certain cases, land values more than doubled over fiscal year 2008 values, resulting in substantially increased property tax burdens on the owners of such land.
Following the issuance of assessments reflecting the increases, numerous appeals were filed with the assessors and, subsequently, the Board.  Many of the appeals were filed by one attorney who, in turn, retained a single appraisal firm to prepare an appraisal report for each property and testify at the hearing of each appeal.  
 Given the volume of the appeals, similarities among the properties, common representation of the appellants, and valuation by a single appraiser employing substantially the same valuation analysis, the Board, with the consent of the parties, consolidated the appeals brought by the referenced attorney, which were divided for hearing by location. Commissioner Mulhern heard appeals relating to properties on Pease Point and Commissioner Rose heard appeals of properties in the Crescent Beach area. 
II. JURISDICTION AND FACTS 	
Based on the testimony and exhibits entered into evidence at the hearing of this appeal, the Board made the following findings of fact.
	On January 1, 2008, the appellants were the assessed owners of an improved parcel of real estate located at    20 Avenue A in the Pease Point section of Mattapoisett ("subject property").  The subject property consists of a 5,000 square-foot parcel improved with a two-story, single-family home. The home has 1,816 square feet of finished living area, comprised of seven rooms, including four bedrooms, as well as two full bathrooms. The subject property also features a wooden deck. The property is located in a private neighborhood and offers ocean views.  
For the fiscal year at issue, the assessors valued the subject property at $743,900 and assessed a tax thereon at the rate of $9.48 per thousand, in the total amount of $7,113.21.  The assessors valued the land component of the subject assessment at $580,300 and the improvements at $163,600.  
The appellants timely paid the taxes due without incurring interest and, in accordance with G.L. c. 59,     § 59, timely filed an abatement application with the assessors, which was denied on April 29, 2009. The appellants seasonably filed a Petition Under Formal Procedure with the Board on July 16, 2009.  On the basis of the foregoing, the Board found and ruled that it had jurisdiction to hear and decide this appeal.
	The appellants argued that the subject property was significantly overvalued for the fiscal year at issue, disputing only the value placed on the land component of the contested assessment. In support of their argument, the appellants offered the testimony of Ms. Lori Carroll-Melker, a certified residential real estate appraiser. 
	Ms. Carroll-Melker testified that she had several years of real estate appraisal experience in Southeastern Massachusetts, including Cape Cod, the Islands, and in particular, Mattapoisett. Ms. Carroll-Melker testified that she had been engaged by the appellants' attorney to appraise only the land portion of the subject property and did not consider or incorporate the value of the property's improvements in her opinion of value.  She also acknowledged that her name did not appear on the appraisal report to which she referred in her testimony. She maintained, however, that the absence of her signature was an oversight, and that she had participated in all facets of the report's preparation with her mother, Ms. Carol A. Carroll, who had signed the appraisal and served as principal of the Carroll Appraisal Company. On the basis of Ms. Carroll-Melker's testimony regarding her participation in the preparation of the appraisal report, which the Board found credible, the Board allowed the report to be entered into evidence.
	Ms. Carroll-Melker described the steps taken to appraise the subject property. Having concluded that a comparable-sales analysis was the appropriate methodology to appraise the subject property, Ms. Carroll-Melker and Ms. Carroll (together, "the appraisers") drove by the subject property, reviewed public documents, and searched multiple listing service data for land parcels they deemed comparable to the property. The appraisers also reviewed maps, including those providing aerial views such as the images available on the Google Earth and Bing websites. Having identified comparable land data, the appraisers drove by the selected properties. On the basis of this review, they identified five sales on which they based their valuation of the subject property. The appraisers described the properties as follows: 
1. 3 Pigwacket Lane, Mattapoisett, is a  1.5-acre property with "limited or no water views" that was sold on January 30, 2008 for $300,000. 

2. 5 Nokomis Road, Marion, Massachusetts, is 0.13-acre property with an "inferior view and location" that was sold on March 29, 2009, for $225,000.
 
3. 20 Oliver Street, Mattapoisett, is a 0.46-acre property also with an "inferior view and location" that was sold on January 24, 2007 for $274,000.
  
4.	44 Pico Beach Road, Mattapoisett, is a 0.25-acre waterfront property "in an inferior neighborhood" that was sold on February 28, 2008 for $335,000

5.	2 David Street, Mattapoisett, is a property with "water views and water access," 0.28-acre in size, that was sold on June 9, 2008 for $590,000.

The appraisers made adjustments to these sales to derive an indicated value of $350,000 for the land component of the subject property for the fiscal year at issue. The Board, however, found the appraisers' valuation methodology wanting in several respects and, ultimately, lacking the credible data necessary to establish the fair cash value of the subject property for the fiscal year at issue.  
	As acknowledged by Ms. Carroll-Melker, the appraisers made adjustments to the properties chosen for comparison to the subject property's parcel to derive the indicated value of the subject parcel for the fiscal year at issue. The appraisers, however, described the purportedly comparable properties only in very general terms, and failed to specify the nature or magnitude of the adjustments made to the sales prices of the properties including, but not limited to, adjustments made for location, sale date, parcel size, topography, views and encumbrances. Thus, the Board had no means to discern whether the appraisers' adjustments were appropriate or, in turn, the indicated value of the subject parcel was justified.
	Further, Ms. Carroll-Melker testified that all the appraisers' purportedly comparable properties were "land sales," with the exception of one, which she stated was improved with a small damaged house that had to be razed.  Property record cards submitted by the assessors indicated, however, that three of the four "land sales" were in fact sales of improved properties. The Board found that this disparity, which was not explained by Ms. Carroll-Melker, impaired the credibility of her testimony. It also left unanswered whether or how the appraisers extracted the land values of the properties from their overall sales prices. Without this information, the Board had no means to determine if the appraisers' methodology was valid. 
The appraisers also provided little substantive response to the assessors' assertion that the sales of four of their five chosen properties had been "coded out" because Mattapoisett and Marion had concluded that the sales were not arm's-length transactions. Ms. Carroll-Melker confirmed that neither she nor Ms. Carroll had communicated with the parties to any of the sales during the preparation of the appraisal report to confirm that the sales had been at arm's-length. Further, she provided only her own, largely unsubstantiated opinion to counter the assessors' assertion that the sales did not qualify as arm's-length transactions. Under these circumstances, the Board could not conclude that the sales provided credible probative evidence of the subject property's fair cash value.
Finally, notwithstanding Ms. Carroll-Melker's testimony to the contrary, the property at 5 Nokomis Road is located not in Mattapoisett, but in the town of Marion. Neither Ms. Carroll-Melker nor the appraisal report provided a foundation to establish that properties outside Mattapoisett were comparable to the subject property. 	 
In sum, the Board found that various and significant flaws in the appraisers' valuation methodology compelled the conclusion that the appraisers provided scant credible evidence of the subject property's land value and therefore could not be relied upon to estimate that value or, in turn, the subject property's value for the fiscal year at issue. 
For their part, the assessors offered the testimony of Mattapoisett assessor Robert Cole. Mr. Cole submitted purportedly comparable sales that he stated the assessors used in their valuation analysis to derive the fair cash value of the subject property's parcel. Mr. Cole did not, however, specify the precise means by which the sales were incorporated into the town's analysis or the various elements of its valuation methodology. Consequently, the Board could not determine if that methodology supported the contested assessment.
Having considered all of the evidence, the Board found and ruled that the appellants failed to provide sufficient probative credible evidence of the subject property's land value for the fiscal year at issue. They therefore failed to demonstrate that the property's assessed value exceeded its fair cash value. Further, although the Board could not endorse the assessors' valuation methodology, the evidence presented did not support a finding of overvaluation. 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 in a free and open market will agree if both are fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass 549, 566 (1956).
The taxpayer 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 [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 taxpayer[] sustained the burden of proving the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).
In appeals before the 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." Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983).
In the present appeal, the appellants sought to demonstrate that the subject property's parcel was overvalued and, therefore, that the property's overall assessed value was excessive. The Board, however, found that the appellants failed to present sufficient probative credible evidence to demonstrate that the subject property was overvalued.
Generally, real estate valuation experts, the Massachusetts courts, and this Board rely upon three approaches to determine the fair cash value of property: income capitalization; sales comparison; and cost reproduction.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  
 "[A]ctual sales of property generally furnish strong evidence of market value, provided they are arm's-length transactions." Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 682 (1982).  "Sales of comparable realty in the same geographic area and within a reasonable time of the assessment date contain credible data and information for determining the value of the property at issue."  Giard v. Assessors of Colrain, Mass. ATB Findings of Fact and Reports 2009-115, 123 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)). Properties are "comparable" to the subject property when they share "fundamental similarities" with the subject property, including similar age, location, size and date of sale.  Lattuca v. Robsham, 442 Mass. 205, 216 (2004). When offering sales, the taxpayer "bears the burden of 'establishing the comparability of . . . properties [used for comparison] to the subject property.'" Wood v. Assessors of Fall River, Mass. ATB Findings of Fact and Reports 2008-213, 225.
When comparable sales are used, allowances must be made for various factors which would otherwise cause disparities in the comparable property's sale prices. See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082.  "Adjustments for differences in the elements of comparison are made to the price of each comparable property . . . . The magnitude of the adjustment made for each element of comparison depends on how much that characteristic of the comparable property differs from the subject property."  Appraisal Institute, the Appraisal of Real Estate 322 (13th ed., 2008).
While the Board would have sanctioned a properly executed comparable-sales analysis to value the subject property, the Board found that the appraisers' methodology was fatally flawed. 
	Although the appraisers made adjustments to their sale properties to estimate the value of the subject property's parcel, they described the properties only in general terms, and did not specify the nature or magnitude of their adjustments. The Board, therefore, could not determine if the appraisers' adjustments were warranted or, in turn, if their indicated vale for the subject parcel was justified.
Moreover, the evidence presented cast substantial doubt on whether the appraisers' chosen sales qualified as arm's-length transactions. This doubt was not effectively addressed by the appraisers, undermining an assertion that the sales were properly included in the appraisers' comparable-sales analysis. See DSM Realty, Inc. v. Assessors of Andover, 391 Mass. 1014 (1984). Similarly, the appraisers failed to demonstrate that the property at      5 Nokomis Road in Marion was comparable to the subject property and should have been included in their analysis. 
	Finally, the appraisers mischaracterized three of their chosen sales transactions as "land sales," impairing the credibility of Ms. Carroll-Melker's testimony and leaving unanswered whether or how the appraisers extracted the land values of the properties from their overall sales prices. Without this information, the Board had no means to determine if the appraisers' methodology was valid. 
In sum, the Board found that the various and significant flaws in the appraisers' valuation methodology inexorably led to its conclusion that the appraisers provided scant credible evidence of the subject parcel's fair cash value. This evidence could not be relied upon to estimate the parcel's value for the fiscal year at issue.   
A taxpayer does not establish the right to an abatement merely by showing that either the land or a building is overvalued; he must demonstrate that the overall assessment overstated the fair cash value of the subject property.  See Anderson v. Assessors of Barnstable, Mass. ATB Findings of Fact and Reports 1999-596, 601. "In abatement proceedings, 'the question is whether the assessment for the parcel of real estate, including both the land and the structures thereon, is excessive.  The component parts, on which that single assessment is laid, are each open to inquiry and revision by the appellate tribunal in reaching the conclusion whether the single assessment is excessive.'"  Id. at 1999-601-02 (quoting Massachusetts General Hospital v. Belmont, 238 Mass. 396, 403 (1921)). Having concluded that the appellants failed to demonstrate that the subject property's land was overvalued, and given that the appellants disputed only that portion of the assessment, the Board found and ruled that the appellants failed to sustain their burden of demonstrating that the subject property's overall assessed value exceeded its fair cash value for the fiscal year at issue. Accordingly, the Board issued a decision for the appellee in this appeal.  
 			      THE APPELLATE TAX BOARD
  
   By:	_____	   ________________	       Thomas W. Hammond, Jr., Chairman 
A true copy,

Attest:				_____undefinedundefinedundefinedundefined______
	      Clerk of the Board

 This sum includes a Community Preservation Act surcharge of $61.04.

  The Board noted the appraisers' failure to inspect either the subject property or their sale properties on foot, which would have afforded a significantly better means to observe a parcel's physical attributes and make relevant comparisons.
 Ms. Carroll-Melker and the appraisal report to which she referred stated that the parcel size of this property is 1.5 acres. However, a property record card submitted by the assessors, which the Board found more probative than the appraisers' unsubstantiated statements, indicated that the parcel is 0.75 acres. All else being equal, this smaller parcel size weighs in favor of a higher indicated value for the subject parcel than that derived by the appraisers.
  Ms. Carroll-Melker initially testified that this property is located in Mattapoisett, as the appraisal report also indicated. During cross-examination, however, Ms. Carroll-Melker acknowledged that the property is located in Marion.
 Although Ms. Carroll-Melker did not specify which property was improved, the Board inferred from the evidence that it was the property located at 5 Nokomis Road in Marion, as the property record card for 5 Nokomis Road reflects improvements of nominal value and a dwelling that suffered fire damage and was demolished.   
 The assessors' assertion was supported by submission of property record cards for each of the properties in question containing notations indicating that the properties had been "coded out," as well as uncontroverted testimony presented by the assessors confirming the accuracy of the notations.

ATB 2012-206