Steven & Patricia Astorino v. Board of Assessors of the Town of Norfolk (May 8, 2014)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD


STEVEN & PATRICIA ASTORINO     v.    BOARD OF ASSESSORS 	
            OF THE TOWN OF NORFOLK

Docket No. F315026	 	   	       Promulgated:
							  May 8, 2014

 
	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 Norfolk ("assessors" or "appellee"), to abate taxes on certain real estate located in the Town of Norfolk owned by and assessed to Steven and Patricia Astorino ("appellants") under G.L. c. 59, §§ 11 and 38 for fiscal year 2012 ("fiscal year at issue").
	Commissioner Chmielinski heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose and Mulhern joined him in the decision for the appellants.
 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.

Steven and Patricia Astorino, pro se, for the appellants.

John Neas, assistant assessor for the appellee.  
FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact. 
On January 1, 2011, the relevant assessment date for the fiscal year at issue, the appellants were the assessed owners of an 11.41-acre parcel of land with a 1.25-acre prime site improved with a single-family residence identified on the assessors' Map 2 as Block 6, Lot 52 and with an address of 8½ Mill River Road in Norfolk ("subject property").  The appellee valued the subject property at $939,800 and assessed a tax thereon, at the rate of $16.47 per $1,000, in the total amount of $15,478.51.  The appellants paid the tax without incurring interest.  On January 4, 2012, the appellants filed an abatement application with the assessors, which the assessors granted in part on March 7, 2012, reducing the subject property's assessed value to $916,800.  Not satisfied with this reduction, the appellants seasonably filed their Petition Under Formal Procedure with the Board on March 29, 2012.  On the basis of the preceding facts, the Board found and ruled that it had jurisdiction over the instant appeal.
The subject property is improved with a single-family, custom-built, two-and-one-half story, Colonial-style residence that was built in 2005 ("subject home").  The subject home has a wood-frame construction and a fiberglass gable hip-style roof.  According to the property record card on file with the appellee, the subject home contains 4,306 square feet of living area and is comprised of 9 rooms, including 4 bedrooms, as well as three full bathrooms and one half bathroom.  The first floor of the subject home has hardwood flooring throughout and includes: a two-story entry foyer; living room; dining room; study; a modern-styled kitchen with granite countertops, center island, built-in desk and stainless steel appliances; breakfast area; family room with brick fireplace; a half bathroom with pedestal sink; and a mud room.    
The second floor has carpeting throughout and includes: a master bedroom suite with a vaulted ceiling, walk-in closet and a master bathroom with double vanity sink, shower, and a Jacuzzi tub; three additional bedrooms; two additional bathrooms with single and double vanity sinks; a balcony area; a loft/sitting area with four skylights; and a laundry room.  The bathrooms are listed on the property record card as modern, and the bathroom floors are tiled.  
The subject home also includes: a 1,120-square foot basement with 912 square feet of finished living area that features a playroom, an exercise room and a bathroom; an attached three-car garage; an open finished porch; a 600-square-foot patio; a 408-square-foot deck; and a fireplace.  The subject home is heated by forced hot air fueled by gas and also includes central air conditioning.  The subject home is set back from the street and is stately looking with multiple peaks and three dormers on the third floor.  The appellee rated the subject home in very good condition.   
The subject property is located in the far-most western section of Norfolk near Route 495.  The subject property is in a neighborhood that includes other single-family residences that are smaller and located closer to the street than the subject home.  The appellants purchased the subject property on March 18, 2011 for $785,000.  They finished the subject home's basement in September of 2011 for a cost of approximately $7,300.
The appellants' case-in-chief consisted of the testimony of appellant, Steven Astorino, and the submission of documents.  Mr. Astorino first explained the history of the appellants' purchase of the subject property.  He testified that the subject property had been listed for sale for approximately one year, with an original asking price of $999,000.  The appellants introduced a computer printout downloaded from the internet website, Zillow.com, to demonstrate that, over the course of the year, the subject property's asking price had been reduced a number of times.  It was first reduced to $949,000 after about two and one-half months on the market, then down to $924,900 after another two months, then the listing was removed for about four months until it was relisted at $800,000.  The appellants negotiated the sale price down to $785,000.  The sale date was March 18, 2011, about two and one-half months after the relevant assessment date.  
The appellants next introduced a chart that they had prepared, which listed 33 purportedly comparable properties located in Norfolk with assessed values ranging from $860,000 to $1,071,000.  Mr. Astorino introduced the chart to contend that, on average, purportedly comparable properties' assessments had fallen by an average of 6.1% between fiscal years 2010 and 2011 and by another 2.1% between fiscal years 2011 and 2012.  Mr. Astorino then contended that a 6.1% reduction should be applied to the subject property's fiscal year 2010 assessed value of $955,000 and another 2.1% reduction therefrom to produce a fair market value of $877,888 for the fiscal year at issue.
Mr. Astorino next testified that the appellants disagreed with the property record card's "C Factor" listing of 1.0 for the subject property's main site and its excess land.  The appellants contended that the subject property's land factor should be reduced by 10% for the subject property being below street grade, and by an additional 10% for an electrical-line easement traversing the rear of the subject property, for a total 20% land reduction.  The appellants submitted a copy of the deed for the subject property, which recited an "Electrical Line Easement" upon the subject property.  The appellants claim that the 20% reduction should be applied to the entire 11.41-acre site and would thus result in a $69,000 reduction in the subject property's assessed value.  The appellants pointed to the "Residential Field Review Guidelines - Norfolk Land Valuations" to support their contentions that below-street-grade location and the presence of easements warrant adjustments of 10% each.  
The appellants submitted into evidence three appraisals performed for the appellants' mortgage company   as support for the $785,000 sale price being the fair market value of the subject property.  Two of the appraisals were performed by Thomas Shaheen and the third was performed by Shane P. Barlow.  However, neither appraiser was presented as a witness at the hearing of this appeal.  Therefore, the Board limited the appraisals' admissibility and allowed into evidence only the undisputed factual descriptions contained in the reports.  The Board excluded the appraisers' opinions of value and the adjustments upon which they based their opinions, because they lacked adequate foundation, were unsubstantiated hearsay, and the authors were not present at the hearing and available for cross-examination by the assessors or for questioning by the Board.  Consequently, the Board was not able to determine the basis for the appraisers' adjustments and conclusions, including their opinions of the subject property's fair cash value.  On this basis, the Board afforded virtually no weight to the appraisal reports.  
The Board did, however, review the appraisals for their descriptions of the subject property, including the pictures of the subject home's interior.  The Board found that the interior was neat and modern, but not overly luxurious.  The bank appraisals also describe the subject property's parcel as being an irregular shape.
Mr. Astorino testified that, when he had viewed the subject property in contemplation of a purchase, he noted that the sellers had already moved and that there was no furniture aside from a kitchen table remaining at the subject house.  He further testified that Assistant Assessor John Neas told Mrs. Astorino that the seller had received relocation money from his employer.  Mr. Astorino testified that he took these factors into consideration in negotiating a favorable price and inclusion of appliances into the sale of the subject property.
Mr. Astorino next referred to his purportedly comparable property, 120 Myrtle Street, located 1.7 miles away from the subject.  As described in a document printed from the Visions Appraisal ("Visions") website that the appellants offered into evidence, this 13.8-acre property is improved with a single-family, Colonial-style home containing 5,213 square feet of living area and comprised of 14 rooms, including six bedrooms, as well as five full bathrooms and one half bathroom.  Amenities include a new, modern kitchen with granite countertops and stainless steel appliances, new bathrooms, stone and ceramic tile flooring in the kitchen and bathrooms, hardwood flooring throughout the first-floor living space, and wall-to-wall carpeting throughout the second floor living space.  Other features include skylights, cathedral ceilings, custom-built cabinets and closets, an attached two-car garage and a detached 8-car garage with loft.  The purportedly comparable home was built in 1994.  
According to the market history listed on the Visions website printout and the two bank appraisals submitted by the appellants, 120 Myrtle Street was first listed in April of 2010 for an asking price of $999,999.  The asking price changed several times, and the property was taken off the market for a period of time.  As of July of 2012, the property was relisted for an asking price of $799,900, and thus had experienced a market exposure of over two years and a price reduction of over $200,000.  
The appellee presented its case-in-chief through the testimony of John Neas, Assistant Assessor and the submissions of a valuation exhibit prepared by Mr. Neas, the property record cards for two purportedly comparable properties, and the requisite jurisdictional documents.  Mr. Neas testified that, in his opinion, the sale of the subject property to the appellants was not an arm's-length sale.  First, Mr. Neas testified that he had spoken to the sellers' broker, Ellen Rayho, who, according to Mr. Neas, told him that she was "selling the property at any price," because the seller had received a generous relocation package from his employer.  In addition, the seller had already vacated the subject property at the time that the appellants negotiated the sale.  
Mr. Neas further testified that the subject property's sale price of $785,000 was less than the outstanding mortgage of $901,000 on the subject property.  Because the sale proceeds were not sufficient to pay off the mortgage, the sale of the subject property to the appellants was a "short sale," and the appellee thus did not consider the sale price to be a reliable indicator of the subject property's fair market value.  
Mr. Neas next testified that the conventional 10% reductions each for below-grade topography and easement issues, listed in the Town's evaluation guidelines, are both discretionary and not automatically applied in all instances.  Mr. Neas further claimed that, because the subject property's electrical-line easement ran in the rear of the subject property and did not enter from the street, the 10% adjustment did not apply.  Mr. Neas' valuation exhibit, however, refers to the fact that the subject property's topography is mostly below street grade.  
Mr. Neas then testified to the positive features of the subject property, including the custom-built balconies, loft and high-grade kitchen features.  Mr. Neas also noted that the gross living area was really 4,306 square feet, not 4,100 square feet as reported on the appellants' bank appraisals.  Mr. Neas did not, however, address the facts that the subject property was irregularly shaped and located below street grade.  The Board found both of these features to be present and to influence the subject property's value.
For his valuation analysis, Mr. Neas relied on five purportedly comparable properties in Norfolk.  His analysis is summarized in the tables below.
Property address	Subject	Sale #1
7 Chatham Road	Adj.	Sale #2
30 Noon Hill Avenue	Adj.	Sale #3
5 Audubon Trail	Adj.		Sale date 
price		7/2010
$740,000		10/2010
$761,000		6/2012
$825,000			Lot size	11.41 acre	1.26 acre	$50,000	1.28 acre	$50,000	1.19 acre	$50,000		Condition	Very good	Very good		Good	$50,000	Very good			Rooms/Bedrooms/
Bathrooms	9-4-3.5	8-4-4	($5,000)	8-4-3.5		9-4-3.5			Living Area	4,306	3,968	$33,800	2,702	$160,400	3,692	$61,400		Basement	Finished	Unfinished	$50,000	Finished		Finished			Porch/Patio/
Deck/Pool	Wood deck/ patio	Porch		Inground pool	($10,000)	Wood deck			Fireplace	One	One		Two	($5,000)	One			Total Adj.			$128,800		$245,400		$111,400		Adjusted Sale Price		$868,800		$1,006,400		$936,400			
Property Address	Subject	Sale #4
29 Stop River Road	Adj.	Sale #5
48 Berkshire Street	Adj.	
Sale date
price		8/2011
$825,000		5/2009
$950,000		
Lot size	11.41 acre	2.121 acres	$50,000	1.1 acres	$50,000	
Condition	Very good	Good	$50,000	Very good		
Rooms/bedrooms/
Bathrooms	9-4-3.5	11-5-3.5.5	($5,000)	11-5-4.5	($10,000)	
Living area	4,306	4,198	$10,800	4,909	($60,300)	
Basement	Finished	Finished		Finished		
Porch/patio/deck/
Pool	Wood deck/
patio	Inground Pool	($10,000)	Wood deck		
Fireplace	One	Two	($5,000)	One		
Total adj.			$90,800		($20,300)	
Adjusted Sale Price		$915,800		$929,700		

After adjustments, Mr. Neas' purportedly comparable properties yielded adjusted sale prices ranging from approximately $870,000 to approximately $1,000,000.  Based on his analysis, Mr. Neas selected a market value of $925,000 for the subject property, which was more than the subject assessment as abated by the assessors.  Mr. Neas thus concluded that no abatement was warranted.
The Board's Valuation Findings
The Board first noted that, considering the market history of the subject property as well as 120 Myrtle Street, larger homes on larger lots in Norfolk were languishing on the market during the relevant time period.  Both of these properties experienced significant decreases in asking price but remained on the market for significant time periods.
However, the Board also found that the sale of the subject property to the appellants at $785,000 was not an accurate indication of its fair market value.  The Board found Mr. Neas' testimony regarding the circumstances surrounding the sale, including the sellers' new job and relocation package, to be credible and to indicate that the seller was less concerned with getting the highest price that he could from a willing buyer, but instead was in a rush to complete the sale.  The Board further found that the circumstances of a short sale, that the sellers had already moved out and that the appellants were able to negotiate a favorable sale price plus inclusion of appliances were further indications of compulsion on the part of the sellers.
The Board next looked to comparable sales.  The Board found that the two most comparable properties listed in the bank appraisals submitted by the appellants, as well as relied upon by Mr. Neas in his valuation analysis, were 7 Chatham Road and 29 Stop River Road.  The Board was unable to consider the hearsay adjustments and opinions of value in the bank appraisals.  However, the Board did consider Mr. Neas' adjustments to these properties and found that many of these adjustments were excessive.  After correcting for Mr. Neas' high adjustments, the Board found that an indicated value within the range of $850,000 to $875,000 was an appropriate average adjusted-sale price for these two sales.  Based on the subject property's market history, the fact that its land was irregularly shaped with a below-street-grade topography, and the existence of an electrical easement, the Board found that $850,000, the value at the low end of this range, was the fair market value of the subject property for the fiscal year at issue.  
On the basis of its findings, the Board granted an abatement of $1,100.20 plus a corresponding portion of the CPA surcharge for a total abatement of $1,133.20.


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 appellants have 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 [his] 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 taxpayers . . . prov[e] 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, taxpayers "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)).  
In the present appeal, the appellants contended that the subject property was overvalued.  They first argued that the fair market value was the price that they paid about two and one-half months after the relevant assessment date.  Usually, the actual sale of the subject property itself is "ʽvery strong evidence of fair market value, for [it] represent[s] what a buyer has been willing to pay to a seller for [the property under appeal].'"  New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981) (quoting First Nat'l Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).  See also Kane v. Assessors of Topsfield, Mass. ATB Findings of Fact and Reports 2000-409, 411 (finding that a sale of the subject property three months before the relevant assessment date was the best evidence of the subject's fair cash value absent any evidence of compulsion). 
However, when there is evidence of compulsion, the sale of the subject is not the best indication of fair market value.  The Board has previously found that the sale of a subject property by a highly-motivated seller did not qualify as an arm's-length sale and thus should be excluded from a comparable-sales analysis.  Bolduc v. Assessors of Norfolk, Mass. ATB Findings of Fact and Reports 2012-1163, 1172 (finding that relocation assistance provided by the seller's employer, together with the need of the seller to relocate for employment purposes, "provided [the seller] with motivation to accept less than fair market value for the subject property.").  In the instant appeal, the Board considered the facts that the seller had received a relocation package and had already moved from the subject property and that the appellants had negotiated a very favorable sale price plus the inclusion of appliances to indicate that the seller was highly motivated.  Further evidence of compulsion was the fact that the sale of the subject property was a short sale.  See Glowacki v. Assessors of Upton, Mass. ATB Findings of Fact and Reports 2013-685, 694 ("Like foreclosure sales, these circumstances [of a short sale] suggest compulsion and should not be considered absent rebuttal of that suggestion, which was absent in these appeals.") (citing DSM Realty, Inc. v. Assessors of Andover, 391 Mass. 1014 (1984)).  The Board thus did not consider the sale of the subject property to the appellants to be a reliable indicator of the subject property's fair market value.  
The appellants next presented three appraisal reports, which each included a sales-comparison valuation analysis of the subject property.  However, the authors of these appraisals did not testify at the hearing and were thus unavailable for cross-examination by the appellee or for questioning by the Board.  The Board therefore considered these appraisal reports to be unsubstantiated hearsay.  Ward Brothers Realty Trust v. Assessors of Hingham, Mass. ATB Findings of Fact and Reports 2012-515, 525 (rejecting opinion of value contained in an appraisal report as hearsay where author of the report did not testify at hearing).  See also, Turner v. Assessors of Lunenberg, Mass. ATB Findings of Fact and Reports 2012-912, 917 ("The Board found and ruled that while undisputed factual information contained in the appraisals was admissible, the appraisers' opinion of value and the adjustments upon which their opinions were based were not.").  Accordingly, the Board ruled that the appraisal reports were not reliable evidence of the fair cash value of the subject property. 
Next, the appellants submitted evidence of a purportedly comparable property -- 120 Myrtle Street.  Evidence of the assessed values of comparable properties may provide probative evidence of fair cash value.  G.L. c . 58A, § 12B.  "The introduction of such evidence may provide adequate support for either the granting or denial of an abatement." John Alden Sands, et al. v. Assessors of Bourne, Mass. ATB Findings of Fact and Reports 2007-1098, 1106-07, (citing Chouinard v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-299, 307-308).   However, the appellants' market-value evidence for this purportedly comparable property consisted of a property listing.  Listing prices do not constitute persuasive evidence of value.  Id. at 2007-1103 ("[L]isting prices of unsold properties . . . are not reliable indicators of the fair cash value of a property.").   
However, while the Board did not rely on the dollar amount of the listing, the Board did find the market history of 120 Myrtle Street, a 5,213-gross-living-area home sitting on a 13.8-acre lot in Norfolk, to be relevant for the analysis of the fair market value of the subject property, which was also a large home sitting on a large site.  Of particular relevance was the fact that, like the subject property, 120 Myrtle Street lingered on the market and also experienced a significant $200,000 asking-price reduction during its long market exposure time.
The Board further found that the comparable sales relied upon by the appellee to support the subject assessment, specifically the sales of 7 Chatham Road and 29 Stop River Road, actually supported an abatement instead. The Board was not persuaded by Mr. Neas' adjustments, finding that they were overall too high.  The Board instead, applying its own corrected adjustments, found that these two comparable properties supported an adjusted-sale value in the range of $850,000 to $875,000.  Given the market history of the subject property and of 120 Myrtle Street, as well as the Board's findings that the subject property was irregularly shaped, located below street grade and was encumbered by an electrical easement, the Board selected the lowest-range value and found and ruled that $850,000 was the fair market value of the subject property.
The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 196, 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 Consol. Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of evidence, and the inferences to be drawn from the evidence are matters for the board."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).
Based on the evidence presented in this appeal, and the reasonable inferences drawn therefrom, the Board found and ruled that the fair cash value of the subject property for the fiscal year at issue was $850,000, which was less than the subject property's assessment as abated by the appellee.  
Accordingly, the Board entered a decision for the appellants in this appeal and granted an abatement in the amount of $1,100.20 plus a corresponding portion of the CPA surcharge for a total abatement of $1,133.20.

					   THE APPELLATE TAX BOARD


				    By: ____________________________ ____
					   Thomas W. Hammond, Jr., Chairman






A true copy,


Attest:	________________________
		   Clerk of the Board

 This amount does not include the Community Preservation Act ("CPA") surcharge of $414.95.

ATB 2014-251