Gail Meka v. Board of Assessors of the City of Beverly (January 23, 2001)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


GAIL MEKA				v.		BOARD OF ASSESSORS
OF THE CITY OF 
BEVERLY

Docket No. F256957					Promulgated:
								January 23, 2001


	This is an appeal under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65, from the refusal of the appellee to abate taxes on certain real estate in the City of Beverly owned by and assessed to the appellant in fiscal year 2000.
	Commissioner Rose heard the appeal and was joined in the decision for the appellant by Chairman Burns and Commissioners Gorton and Egan. 
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.
Gail Meka, pro se, for the appellant.
John Heaphey, Assessor, for the appellee.

FINDINGS OF FACT AND REPORT
	On January 1, 1999, Gail Meka ("the appellant") was the assessed owner of a parcel of real estate located at 59 Lothrop Street, Beverly, Massachusetts ("subject property").  The appellant purchased the subject property in July 1997 for $745,000.  The property is an ocean-front lot of approximately 12,600 square feet improved with a five-bedroom, single-family residence which has a gross living area of 4,297 square feet.
	In fiscal year 2000, the Board of Assessors of the City of Beverly ("the assessors") valued the property at $698,400 and assessed a tax at the rate of $14.49 in the amount of $10,119.62.  The appellant timely paid the taxes due and timely filed an application for abatement on February 10, 2000.  The assessors denied the application on March 16, 2000 and on May 1, 2000, the appellant timely filed an appeal with the Appellate Tax Board ("Board").
	The appellant appeared before this Board on one other occasion seeking an abatement for fiscal year 1999.  In that appeal the assessors valued the subject property at $708,380 as of January 1, 1998.  Based on the evidence presented at a full hearing, the Board found that the property's fair cash value, as of January 1, 1998, was $645,000 and granted an abatement in the amount of $964.64.  (Decision dated March 10, 2000, docket number X288766).  	
Accordingly, because the present appeal involves one of the "next two fiscal years after a fiscal year for which the board has determined the fair cash value" of the subject property and because the assessed value of the subject property for fiscal year 2000 is greater than the value found by the board for fiscal year 1999, G.L. c. 58A, § 12A shifts the burden of persuasion to the assessors to prove that an increase in value is justified.
	Mr. John Heaphy, the city Assessor, testified on behalf of the assessors.  Mr. Heaphy noted that although some of the problems identified in the fiscal year 1999 appeal, such as water damage, coal burning fireplaces, traffic and proximity to a power plant, still existed in the fiscal year at issue, the appellant had made improvements to the property.  During 1997 and 1998, the appellant replaced carpeting and painted walls due to water damage, made roof repairs, removed wooden decks and replaced exterior French doors, among other things.  In support of their assessed value, the assessors offered a copy of the Appraisal Report prepared in August, 1997, in order for the appellant to obtain financing for purchase of the subject property, which valued the property at $760,000.
The assessors also offered into evidence an appraisal report prepared by Mr. Heaphy.  In his report, Mr. Heaphy concluded that the property's fair market value was $700,000.  Mr. Heaphy's determination was based on (1) review of the August 1997 Appraisal Report; (2) the quitclaim deed which noted the property's selling price of $745,000; and, (3) sales of properties he concluded were comparable to the subject property which occurred in August 1997 and April 1998. Lastly, Mr. Heaphy included in his report two building permits which were obtained for work to be done on the subject property. 
The Board found that there were many problems with Mr. Heaphy's report.  First, the August 1997 appraisal report on which he relied was issued a year and a half prior to the date of assessment.  Also, although the report which Mr. Heaphy prepared for the hearing of this appeal contained two properties offered as comparables, he failed to draw a comparison of these properties to the subject property.  The Board also found that Mr. Heaphy failed to make any adjustments for differences between the properties and how these adjustments would have impacted the subject property's fair market value.  Lastly, the building permits, which were obtained during 1999, had no bearing on the property's value as of January 1, 1999.  
Based on the evidence submitted, the Board found that the assessors' increase in value for fiscal year 2000, above the Board's determination for fiscal year 1999, was not justified.
The appellant, however, sought an even further reduction in value below the Board's determination in the 1999 appeal.  In her presentation to the Board, the appellant sited many problems which had existed at the time of the earlier appeal, such as water damage, coal burning fireplaces, heavy traffic and proximity to a power plant. All of these issues were presented at the earlier appeal and were taken into consideration by the Board in making its determination of fair market value for fiscal year 1999.  The appellant did not offer evidence that the problems were worsening or that any new problems had arisen which would lead to an additional reduction in value.  
In the present appeal, the appellant maintained that the property's fair market value was $450,000.  To support her position, the appellant submitted seven sales of properties which she deemed to be comparable to the subject property.  The Board, however, found that the appellant's evidence was unreliable.  First, the sale dates of the properties, more than half of which occurred between 1992 and 1996, were too remote from the date of assessment at issue in this appeal.  Second, the appellant failed to make any adjustments to reflect differences in the timing of sales, location, size or condition of the properties compared to the subject property to support her suggested fair market value.
The appellant also argued that her property was disproportionately assessed.  In support of her disproportionate argument, the appellant offered two self-prepared analyses comparing the sales prices and assessed values of various properties located in Beverly.  The first analysis was allegedly based on eleven sales which occurred during the time period 1990 through 1995 and which showed an average assessment to sales price ratio of 77.21%.  The second analysis, allegedly based on sales during 1999 and 2000, produced an average assessment to sales price ratio of 56.27%.  The appellant claimed that her analyses supported a disproportionate assessment theory.  
The Board found, however, that the appellant's analyses were flawed.  First, the appellant failed to offer any evidence that there existed a widespread and intentional scheme of disproportionate assessment.  The appellant also failed to offer into evidence copies of the deeds for any of the sales or any other evidence to demonstrate that the sales were arms'-length transactions.  The appellant failed to demonstrate that she made any time adjustments to the sales prices or that she made adjustments for any other factors including, size, location or condition.  Further, she failed to testify or otherwise demonstrate whether she included all single family homes sold in Beverly during a particular period or, if not, what criteria she used in selection of the sales included in her study or whether the sales she included represented a statistically significant sample of the Beverly market.  
Although the appellant computed different average assessment ratios, depending upon the analysis used, she did not testify which of these was the proper ratio to use in valuing her property.  As demonstrated by the appellant's own evidence, many of the properties were assessed above the so-called "average ratio".  
On the basis of the evidence and reasonable inferences drawn therefrom, the Board found that the assessors failed to meet their burden of proving that the increased value for fiscal year 2000 over the value found by the Board for fiscal year 1999 was justified.  The Board further found that the appellant failed to offer any persuasive, credible evidence that the fair cash value of her property for fiscal year 2000 was less than the value found by the Board for fiscal year 1999.  Accordingly, the Board found that the fair cash value of the subject property for fiscal year 2000 was $645,000 and therefore granted a partial abatement in the amount of $773.77.  

OPINION
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).  Generally, the assessors' valuation is presumed valid unless the taxpayer sustains his burden of proving otherwise.  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974). However, 
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 

G.L. c. 58A, § 12A.  In the present appeal, the assessment at issue falls within the two-year statutory period of § 12A.  Therefore the burden of persuasion must shift to the appellee to prove that the increased value is warranted.  See generally, Beal v. Assessors of Boston, 389 Mass. 648 (1983); Cressey Dockham & Co., Inc. v. Assessors of Andover, 11 Mass. App. Tax Bd. Rep. 41, 50 (1989); Ellis v. Assessors of Northborough, 3 Mass. App. Tax Bd. Rep. 152, 154-155 (1983).
	"Once a prior determination of the Board of the fair cash value of the same property has been placed in evidence [] the statute requires the appellee to produce evidence to 'satisfy the Board that the increased valuation was warranted.'"  Cressey Dockham at 50.     
In the present appeal, the assessors offered a minimal market approach to justify the assessed value of the property relying on two sales which occurred in the middle of 1997 and the early part of 1998.  Although the assessors deemed these properties to be comparable to the subject property, they did not provide any evidence to show that they had made adjustments to reflect differences including time, location and condition, in arriving at their determination of value.  See Ellis v. Assessors of Northborough, 3 Mass. App. Tax Bd. Rep. 152, 154 (1983)(the market data approach depends, for its validity, on sales of property adjudged to be comparable to the subject property with adjustments to reflect differences in timing, location, condition, and use.)
Based on the evidence presented, the Board found that the comparable sales offered by the assessors and the other evidence presented did not justify an increase in valuation of the subject property over the value found by the Board for fiscal year 1999.  Therefore, the Board found that the assessors did not meet their burden of proof under G.L. c. 58A, § 12A.
Although the assessors failed to meet their burden of proof under § 12A, the burden of persuasion on the issue of fair cash value remains on the taxpayer.  See Cressey Dockham at 50 ("neither [12A] nor the Board's ruling[s] shifts the burden of persuasion on the issue of fair cash value from the appellant.")  See also General Electric Co. v. Assessors of Lynn, 393 Mass. 591 (1984).  By introducing evidence of the Board's prior decision for fiscal year 1999, the appellant met her initial burden of production and shifted to the assessors the burden of producing evidence to justify the increase in value for fiscal year 2000.  See Cressey Dockham at 50.  Once the assessors concluded their presentation of evidence, the appellant could have rested and relied on the evidence of the Board's fiscal year 1999 decision to satisfy her burden of proving that her property's assessed value for fiscal year 2000 exceeded its fair cash value.  
The appellant, however, argued that the assessed value of her property for the fiscal year at issue in the present appeal, fiscal year 2000, was $195,000 less than the value found by the Board for the prior fiscal year.  To support its 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. 591, 600 (1984), quoting Conlon v. Assessors of Holliston, 389 Mass. 854, 855 (1983).  
In her testimony, the appellant explained that the subject property was plagued with many problems such as water damage, coal burning fireplaces, heavy traffic and proximity to a power plant.  All of these problems, however, were addressed by the Board in making its determination of fair market value for fiscal year 1999.  The appellant also offered comparable sales in an attempt to demonstrate that her property was overvalued.  The Board found, however, that her analyses were flawed.
The appellant also put forth a claim of disproportionate assessment.  "If the taxpayer can demonstrate in an appeal to the Board that he has been the victim of a scheme of discriminatory, disproportionate assessment, he 'may be granted an abatement'."  Gargano v. Assesors of Barnstable, 1999 ATB Adv. Sh. 237, 249 quoting Coomey v. Assessors of Sandwich, 367 Mass. 367 Mass. 836 (1975)[citation omitted].  The burden of poof as to the existence of a "scheme of discriminatory, disproportionate assessment" is on the taxpayer.  Gargano at 249, quoting First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 559 (1971).  "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. Assessors of Brookline, 43 Mass. App. Ct. 327, 332 (1997), quoting Shoppers' World, Inc. v. Assessors of Framingham, 358 Mass. 554, 562 (1971).
In support of her claim, the appellant offered into evidence two self-prepared analyses of sales which purportedly occurred in Beverly.  The first analysis was for alleged sales during the years 1990 through 1995 and produced an average assessment to sales price ratio of 77.21%.  The second analysis was based on alleged sales during the years 1998 through June 2000 and showed an average assessment to sales price ratio of 56.27.  The Board, however, found that the appellants' evidence was unsubstantiated and flawed.  
Most importantly, the appellant offered no evidence to establish or even raise an inference that the assessors engaged in an intentional scheme of disproportionate assessment.  In addition, the appellant failed to establish that her analyses included a sufficient number of sales to constitute a reliable analysis.  See e.g. Gargano at 250 (Board rejected analysis of 6 sales in time period where 950 sales occurred and thousands of assessments were made.)  The appellant did not explain how she chose the sales on which she relied, how many other sales were excluded from her analysis, or whether the sales she chose were representative of the Beverly market during the relevant time period.
Moreover, the appellant offered no copies of deeds or other confirmation demonstrating that these sales did in fact occur or that they were arms'-length transactions.  Also, the appellant failed to make any adjustments for differences such as time, size, location or condition.  Although the appellant generated what she believed were the proper ratios, her own analyses showed that many of the properties were assessed well above these percentages.
Accordingly, the Board found that the appellant failed to meet her burden of proving that there existed a deliberate scheme of disproportionate assessment.  The Board found that the evidence presented was insufficient to prove that the assessors engaged in an "intentional widespread scheme of discrimination."  Stillson v. Assessors of Gloucester, 385 Mass. 724, 727-28 (1982).    
The appellant did, however, meet her burden of proving overvaluation by introducing the Board's fiscal year 1999 decision.  Accordingly, the Board found that the fair cash value of the subject property for fiscal year 2000 was $645,000 and therefore granted a partial abatement in the amount of $773.77.
				     
					APPELLATE TAX BOARD



By:__________________________
   				   Abigail A. Burns, Chairman
						


A true copy,


Attest:					
 	    Clerk of the Board

 The subject property was assessed for $698,400.  The Board found that the fair cash value was $645,000.  Accordingly, the Board found that the assessors overvalued the property by $53,400.  The applicable tax rate was $14.49 per thousand dollars of value.

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