Salvatore A. Olivieri v. Board of Assessors of the Town of Egremont (March 27, 2009)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


SALVATORE A. OLIVIERI		v.	   BOARD OF ASSESSORS OF 
   THE TOWN OF EGREMONT

Docket No. F298675				   Promulgated:
							   March 27, 2009


	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 appellee to further abate taxes on real estate located in the Town of Egremont owned by and assessed to the appellant under G.L. c. 59, §§ 11 and 38, for fiscal year 2008.
	Commissioner Rose ("Presiding Commissioner") heard the appeal and issued a single-member decision, under       G.L. c. 58A, § 1A and 831 CMR 1.20, for the appellant.  Upon further review, the Presiding Commissioner issued a revised single-member decision for the appellant, which is promulgated herewith.  
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Salvatore A. Olivieri, pro se, for the appellant.
	Harald M. Scheid, regional tax assessor, for the appellee.



FINDINGS OF FACT AND REPORT
	On January 1, 2007, Salvatore Olivieri, Trustee of the Salvatore Olivieri Revocable Trust ("appellant") was the assessed owner of a parcel of real estate located at       7 Second Street, in the Town of Egremont ("subject property").  For fiscal year 2008, the Board of Assessors of Egremont ("assessors") valued the subject property at $344,900 and assessed a tax thereon, at a rate of $5.82 per $1,000, in the amount of $2,007.32.  On or about March 30, 2008, Egremont's Collector of Taxes sent out the town's actual real estate tax bills.  In accordance with G.L. c. 59, § 57C, the appellant timely paid the tax assessed on the subject property without incurring interest.
	On April 15, 2008, in accordance with G.L. c. 59,     § 59, the appellant filed an Application for Abatement with the assessors.  On June 13, 2008, the assessors granted a partial abatement and lowered the assessed value of the subject property by $20,800 to $324,100.  Not content with this reduction, on September 11, 2008, the appellant sought more by seasonably filing his Petition Under Formal Procedure with the Appellate Tax Board ("Board").  On this basis, the Presiding Commissioner found and ruled that the Board had jurisdiction over this appeal.
	The subject property is located in a waterfront neighborhood situated around Prospect Lake but is one block from the water.  The subject property's parcel contains approximately 0.60 acres and is improved with a single-family Cape Cod style house, which was built in 1970 of log construction.  The two main floors of the residence contain approximately 1,224 square feet of living space, including three bedrooms, as well as two full bathrooms and one half bathroom.  The basement also contains 816 square feet of finished space.  There are no fireplaces or hearths.  
	The appellant challenged the assessment on four grounds arguing that: (1) Egremont property values were down generally from previous years; (2) the subject property was overvalued compared to the assessments of purportedly comparable Egremont properties; (3) the assessors made mistakes or errors in their assessment methodology; and (4) homes of log construction have lower values than otherwise comparable homes that are built with more traditional materials.  To prove these assertions, the appellant introduced: a clean copy and marked-up version of Egremont's Cost Valuation Report for the subject property, which contains cost reproduction information; numerous photographs of the subject property and purportedly comparable properties; an invoice for certain materials; a copy of Egremont's Cost Table Report, which the assessors use to help value improvements; a copy of Egremont's Effective Age Table and Depreciation Table Report, which the assessors also use to help value improvements; several property record cards of purportedly comparable properties, as well as the subject property; and a copy of Egremont's Cost Program Summary, which contains keys to the codes that the assessors use on the town's property record cards, cost valuation reports, and other related documents.  The appellant also testified and attempted to demonstrate using the subject property's property record card and cost valuation report that the assessors had erroneously included values for fireplaces and hearths in their assessed value for the subject property.  The appellant additionally testified that the assessors did not properly account for the subject property's log construction or electric heat. 
	In support of the assessment, as abated, the assessors submitted a "Valuation Defense Summary" that contained comparable-sales and comparable-assessment analyses and copies of numerous supporting documents.  The comparable-sales analysis included five purportedly comparable properties, but only one of them was a Cape Cod style dwelling; the others were ranch, contemporary or bungalow styles.  In addition, one of the purportedly comparable properties was a larger waterfront property, while the other four had parcels that were 2½-times to almost 18-times larger than the subject property's parcel.  The assessors applied gross adjustments ranging from 29% to 44% to account for the many differences between the purportedly comparable properties and the subject property. The assessors did not consider or make any adjustments in their comparable-assessment analysis.  In addition, the assessors did not provide the Presiding Commissioner with a map or plan depicting the relative locations of any of the purportedly comparable properties compared to the subject property's location.  Harald Scheid, the regional tax assessor for the town and others in the region, testified that the assessors already had taken the subject property's log construction into account when they granted the partial abatement.  He also credibly stated that generally property values in Egremont during the relevant time period had not declined to any significant degree.  
	After considering all of the evidence, the Presiding Commissioner found that the appellant met his burden of proving that the subject property was overvalued for fiscal year 2008.  The Presiding Commissioner found that the assessors had erroneously included values for fireplaces and hearths in developing an assessed value for the subject property and had failed to properly account for the subject property's electric heat.  The Presiding Commissioner also found that the property located at 3 Second Street was reasonably comparable to the subject property and the data and assessment information related to this property, which the appellant introduced, supported an abatement for the subject property.  
The Presiding Commissioner further found that the assessors' comparable-sales and comparable-assessment analyses were flawed and unreliable because with the former, the assessors used properties that were not comparable to the subject property and with the latter, they failed to consider or make any adjustments to value for obvious differences between their chosen properties and the subject property.  The range of the gross adjustments that the assessors applied in their comparable-sales analysis was between 29% and 44%.  In the Presiding Commissioner's opinion, even these sizeable adjustment totals were considerably understated.  
In addition, the Presiding Commissioner found that the assessors did not demonstrate that their purportedly comparable properties were in the same, or even a similar, geographic area as the subject property.  The Presiding Commissioner did find, however, that the assessors had accounted for the subject property's log construction when they granted the partial abatement.  Accordingly, to account for the presence of only electric heat and to account for the assessors' errors in including values attributable to fireplaces and hearths in their assessment, as abated, the Presiding Commissioner reduced the assessment, as abated, by $14,100 to $310,000.  
	On this basis, the Presiding Commissioner decided this appeal for the appellant and issued a revised decision, simultaneously with the promulgation of these Findings of Fact and Report, granting a real estate tax abatement in the amount of $82.06.  

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 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 [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 [Presiding Commissioner] is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayer[] . . . prov[es] 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)). Actual sales generally "furnish strong evidence of market value, provided they are arm's-length transactions and thus fairly represent what a buyer has been willing to pay for the property to a willing seller."  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, 358 Mass. 554, 560 (1971).  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.  See McCabe v. Chelsea, 265 Mass. 494, 496 (1929).  "A major premise of the sales comparison approach is that an opinion of the market value of a property can be supported by studying the market's reaction to comparable and competitive properties."  Appraisal Institute, The Appraisal of Real estate 297 (13th ed., 2008).  
When comparable sales are used, however, allowance must be made for various factors which would otherwise cause disparities in the comparable 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."   The Appraisal of real estate at 322.  If the amount of gross adjustments applied to each purportedly comparable property is substantial, the logical conclusion is that these properties are simply not comparable to the subject property.  See The May Dept. Store Co. v. Assessors of Newton, Mass. ATB Findings of Fact and Reports 2009-153, 191 ("[T]he Board questioned the comparability of some of [the real estate valuation expert's] purportedly comparable properties to the subject property because of the amount of the gross adjustments that [he] made to them.");         The Trustee of the Charles Cotesworth Pinckney Trust v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-621, 630-31 (noting that significant adjustments "raise serious questions regarding initial comparability"); see also The Appraisal of real estate at 312-13. 
General Laws c. 58A, § 12B provides in pertinent part that "at any hearing relative to the assessed fair cash valuation or classification of property, evidence as to fair cash valuation or classification of property at which assessors have assessed other property of a comparable nature or class shall be admissible."  The introduction of such evidence may provide adequate support for either the granting or denial of an abatement.  Chouinard v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-299, 307-308 (citing Garvey v. Assessors of West Newbury, Mass. ATB Findings of Fact and Reports 1995-129, 135-36;    Swartz v. Assessors of Tisbury, Mass. ATB Findings of Fact and Reports 1993-271, 279-80); see also Turner v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-309, 317-18.  Purportedly comparable properties used in a comparable-assessment analysis must be adjusted, just like those used in a comparable-sales analysis, for differences with the subject property.  See Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 402 ("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."), aff'd, Mass. App. Ct. No. 07-P-1024, Memorandum and Order under Rule 1:28 (November 28, 2008);    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."). 
In this appeal, the Presiding Commissioner found and ruled that the appellant met his burden of demonstrating that the subject property was overvalued for fiscal year 2008 by showing that the assessors had erroneously included values for fireplaces and hearths in their assessment, as abated, and had not appropriately considered and adjusted downward for the subject property's electric heat.  Assessment data and information regarding the property located at 3 Second Street, which the Presiding Commissioner found to be reasonably comparable to the subject property, further supported the appellant's contention that the assessed value of the subject property, as abated, should be further reduced.  
The Presiding Commissioner found and ruled that for numerous reasons the assessors' comparable-sales and comparable-assessment analyses were flawed and unreliable.  In the former analysis, the assessors used properties that the Presiding Commissioner found were not comparable to the subject property.  In the latter analysis, the assessors failed to adjust the values associated with the properties for obvious differences with the subject property.  The Presiding Commissioner, therefore, did not rely on either analysis.  The Presiding Commissioner did find, however, that the assessors had previously accounted for the subject property's log construction when they granted the partial abatement.  See generally Lussier v. Assessors of Douglas, Mass. ATB Findings of Fact and Reports 2006-635.  On this basis, the Presiding Commissioner determined that the subject property's assessment, as abated, should be reduced further by $14,100 to $310,000.  
"The [B]oard [is] not required to believe the testimony of any particular witness but [may] accept such portions of the evidence as appear to have the more convincing weight. Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of evidence, and 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).  "The market value of the property c[an] not be proved with mathematical certainty and must ultimately rest in the realm of opinion, estimate, and judgment . . . .  The [B]oard [may] select the various elements of value as shown by the record and from them form . . . its own independent judgment."   Boston Consol. Gas Co., 309 Mass. at 72 (citations omitted).  See also North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984); New Boston Garden Corp., 383 Mass. at 473; Jordan Marsh Co. v. Assessors of Malden, 359 Mass. 106, 110 (1971).  "The [B]oard is not required to specify the exact manner [through] which its [fair cash value] was arrived at."  Id.  Based on the evidence presented in this appeal, the Presiding Commissioner selected the most credible and probative evidence and exercised his independent judgment in finding and ruling that the subject property was overvalued by the assessors for the fiscal year at issue.  

On this basis, the Presiding Commissioner found and ruled that the fair cash value of the subject property for fiscal year 2008 was $310,000, and he, therefore, decided this appeal for the appellant and granted a real estate tax abatement in the amount of $82.06.  A revised decision is promulgated simultaneously with the issuance of these Findings of Fact and Report.  

  					   APPELLATE TAX BOARD

				  
    By:			          	____
				     James D. Rose, Commissioner 


A true copy,



Attest:					_______
       Clerk of the Board

 On the Petition Under Formal Procedure initiating this appeal, Salvatore A. Olivieri mistakenly named himself in his individual capacity as the appellant instead of naming himself "as trustee."  The documents attached to and made a part of this petition clearly indicate, however, that in bringing this appeal, Mr. Olivieri was acting in his role as trustee of the Salvatore Olivieri Revocable Trust.  Accordingly, the Appellate Tax Board treated the petition as having been brought by Salvatore Olivieri, as trustee of the Salvatore Olivieri Revocable Trust and considered him, in his trustee capacity, as the appellant.  The Board of Assessors of Egremont did not object.  To prevent confusion, the caption remains.  
 For assessing purposes, the subject property's parcel identification number is map 13, parcel 725.  Its street address was incorrectly recorded on the petition and original decision in this appeal as "223 Egremont Plain Road," the appellant's mailing address.  Again, the documents attached to and made a part of the petition clearly indicate that in bringing this appeal, Mr. Olivieri intended to and, in fact, did challenge the assessment, as abated, on "7 Second Street."  Throughout this appeal, the assessors defended their assessment, as abated, on "7 Second Street."    Accordingly, the Appellate Tax Board treated the petition as having been brought for "7 Second Street." The reason for the revised decision is to properly identify the subject property as "7 Second Street" on the decision.    
 Because the fiscal year 2008 annual real estate tax assessed on the subject property was not greater than $3,000, timely payment was not a prerequisite to the Board's jurisdiction.  G.L. c. 59, §§ 64 and 65.  

ATB 2008-232