Elizabeth A. Sullivan v. Board of Assessors of the Town of Hingham (May 1, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


ELIZABETH A. SULLIVAN       v.        BOARD OF ASSESSORS OF                              
						        THE TOWN OF HINGHAM

 
Docket No. F278941				   Promulgated:
		  		   			   May 1, 2008

	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 appellee Board of Assessors of the Town of Hingham ("appellee" or "assessors") to abate taxes on real estate located in the Town of Hingham, owned by and assessed to appellant Elizabeth A. Sullivan ("appellant") under G.L. c. 59, §§ 11 and 38, for fiscal year 2005.
Commissioner Gorton heard this appeal. With Commissioner Gorton materially participating in the deliberations of this appeal, Chairman Hammond and Commissioners Scharaffa, Egan, Rose, and Mulhern joined in the decision for the appellee.
These findings of fact and report are made on the Appellate Tax Board's ("Board's") own motion under G.L. c. 58A, § 13 and 831 CMR 1.32 and are promulgated simultaneously with its decision.

Alan McKenna, Esq., for the appellant.
Lane Partridge, assessor, for the appellee.

FINDINGS OF FACT AND REPORT
	On January 1, 2004, appellant was the assessed owner of a parcel of real estate located at 4 Button Cove Road in the Town of Hingham. The parcel has a land area of 1.41 acres and is improved with a Nantucket-style dwelling. The property has 143 feet of frontage on a cove opening onto Hingham Harbor, although appellant testified that a drainage easement covers 13 feet of that frontage.
	The actual tax bill for the subject property was sent on December 30, 2004. Taxes due were timely paid without incurring interest. Appellant filed an Application for Abatement on January 31, 2005. The application was denied by a vote of the assessors on May 2, 2005. Appellant timely filed a Petition Under Formal Procedure with the Board on July 15, 2005, commencing the instant appeal. The foregoing facts establish the Board's jurisdiction over this appeal.
	The assessed value of the subject property for fiscal year 2005 was $2,995,400. Of that total, the property record card states a building value of $765,900 and a land value of $2,229,500. The one-and-three-quarters story structure is situated on a concrete foundation with exterior walls consisting of wood shingles. The total finished area is 4273 square feet. The property record card lists 1994 as the year built, and 1997 as the effective year built. There are four bedrooms, four-and-one-half bathrooms, three fireplaces, a porch, and an attached garage. Heat is by hot water fueled by oil. The condition is rated as good. According to the property record card, there is a detached structure on the property, with an effective year built of 1999.
	Ms. Sullivan's principal complaint related to the portion of the assessed value assigned to the subject land at $2,229,500. She compared the assessed value of her plot to the assessed land values of four other waterfront properties, all of which had docks, unlike the subject property. She argued that the other waterfront properties, which varied in size between 0.92 acres and 1.69 acres, were assessed at less per acre than her 1.41 acre parcel for fiscal year 2005. According to Exhibit 5 offered by Ms. Sullivan, the 1.65 acre parcel at 9 Steamboat Lane was assessed at $1,288,909 per acre, with an assessed land value of $2,126,700. The 1.69 acre parcel at 11 Steamboat Lane was assessed at $1,260,710 per acre, with an assessed land value of $2,130,600. The 0.92 acre parcel at 2 Steamboat Lane was assessed at $1,506,739 per acre, with an assessed land value of $1,386,200. The 1.43 acre parcel at 2 Button Cove Road was assessed at $1,114,615 per acre, with an assessed land value of $1,593,900. Finally, the 0.98 acre parcel at 14 Seal Cove Road was assessed at $1,446,020 per acre, with an assessed land value of $1,417,100. No comparison was attempted between the improvements on the subject property and the improvements on the other properties cited.
Ms. Sullivan introduced property record cards for only three of the properties, the land values of which were reflected on Exhibit 5. These property record cards applied to fiscal year 2006, not the year at issue, fiscal year 2005. She also offered a satellite image of the Hingham waterfront area obtained from the Internet using the "Windows Live Local" service. The image reflects that the subject property is situated on a small cove, while the properties proposed for comparison have direct frontage on Hingham harbor. She indicated the extent of water frontage for only one of the comparison properties: 14 Seal Cove Road had 180 feet of frontage on the water, according to Exhibit 5.
The assessors offered a series of images of the subject property. The pictures showed the front of house, the panoramic landscaped back lawn with a commanding view of the water, and the detached building. The assessors also supplied information on properties sold in Hingham, which were proposed for comparison to the subject property. The information included photographs, property record cards, and deeds of sale.
The property at 21 Martin's Cove Road sold for $2,850,088 on August 29, 2003. The property had a land area of 1.711 acres and was improved with a Cape Cod-style dwelling built in 1950 with 2,427 square feet of living area. The structure was in "very good" condition, had two bathrooms, and an attached 2-car garage. 
The property at 2 Steamboat Lane (to which the appellant also drew a comparison) sold on August 20, 2004 for $2,600,000. The lot was 0.92 acres and steeply sloped. The contemporary-styled dwelling was built in 2000 and had 5,264 square feet of living area, with three full bathrooms, and two half-bathrooms. The three-bedroom residence was rated as "excellent" in condition and had an attached two-car garage. The assessors pointed to the proximity of the parcel to a four-lane highway as an adverse influence on value.
The property at 14 Seal Cove Road sold for $2,225,000 on August 17, 2005. A contemporary-styled dwelling with 3,948 square feet in living area improved the 0.982 acre parcel. The structure was built in 1952, was in "good" condition, and had nine rooms, three-and-one-half bathrooms and an attached 2-car garage. The effective year built is given on the property record card as 1981. Like the subject property, the waterfront property at 14 Seal Cove Road, was situated on a cove opening onto Hingham Harbor.
Finally, the property at 21 Bel Air Road sold on October 27, 2005 for $4,700,000. With a land area of 0.894 acres, the property was improved with a Garrison-style dwelling with 4,125 square feet of living area. Built in 1905, the dwelling at 21 Bel Air Road had an effective year built of 1980, according to the property record card. The condition is given as "very good." The property record card indicates the residence has six bedrooms, four-and-one-half baths, an "in ground" swimming pool, and a 2-car attached garage. The property is located on Hingham Bay and has a view of the Boston skyline. 
With the exception of the sale of 21 Martin's Cove Road, all of the transactions relied upon by the assessors occurred after the valuation date of January 1, 2004. No adjustments were made to account for differences in market conditions on the dates of sale, location, physical characteristics, living area, amenities, and other relevant factors bearing on value. The assessors offered no indicated value for the subject property derived from the assertedly comparable sales transactions.  
On the basis of the foregoing, and relying on the hearing officer as to matters of witness credibility, the Board found and ruled that appellant failed to prove that the subject property had a fair cash value less than the assessed value as of January 1, 2004. Appellant's evidence of assessed land values for other properties fell short of supplying the information the Board would need to find basic comparability. Apart from waterfront locations in Hingham, it is not clear what "fundamental similarities" existed between the subject property and the proposed comparison properties. Moreover, appellant made no attempt to adjust for differences between the physical characteristics of the subject parcel as opposed to those of the parcels of land proposed for comparison. 

Appellant's presentation did not take into consideration the contribution of the improvements to the overall values of the properties she discussed. Yet she pointed to improvements (i.e. docks) on the proposed comparison properties to argue that the parcels were superior to the subject. Overvaluation was not persuasively shown by a methodology which merely contrasted assessed land values per acre, without regard to specific comparability factors of the relevant properties. 
While the assessors offered evidence of sales of other properties in Hingham, they failed to adjust sales prices to account for differences between the comparison properties and the subject property or to adjust for the time of sale. Further, the assessors did not offer an indicated value for the subject property derived from the referenced market transactions. 
However, the burden of proving a fair cash value for the subject property lower than the assessed value fell on the appellant, and she did not carry this burden. Accordingly, this appeal was decided for the appellee.


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 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 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, 363 Mass. at 245).
	Real estate valuation experts, the courts, and this Board generally utilize three principal methods to arrive at fair cash value: the cost approach, income capitalization, and comparable sales analysis. See Correia v New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978). "In valuing owner-occupied residential property, this Board has tended to rely on the comparable sales or market approach to value."  See Carney v. Assessors of Plymouth, Mass. ATB Findings of Facts and Reports 2008-443, 2008-450. "Evidence of the sale prices of 'reasonably comparable property' is the next best evidence to the sale of the property in question." Lattuca v. Robsham, 442 Mass. 205, 216 (2004)(Citation omitted.) Required are "'fundamental similarities'" between the subject property and the comparison properties. See Lattuca, 442 Mass. at 216. (Citation omitted.)
"The appellant bears the burden of 'establishing the comparability of … properties [used for comparison] to the subject propert[ies].'" Wood v. Assessors of Fall River, Mass. ATB Findings of Fact and Report 2008-213, 2008-225. (Citation omitted.) Moreover, "[w]hen comparable sales are used, allowances must be made for various factors which would otherwise cause disparity in the comparable prices." Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1998-1082.  See also New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 470 (1981) ("Once basic comparability is established, it is then necessary to make adjustments for the differences, looking primarily to the relative quality of the properties, to develop a market indicator of value.") 
"At any hearing relative to the assessed fair cash valuation … of property, evidence as to the fair cash valuation … at which assessors have assessed other property of a comparable nature … shall be admissible." G.L. c. 58A, § 12B. "The admissibility under G.L. c. 58A, § 12B, of evidence of assessments imposed on other property claimed to be comparable in nature to the subject property is largely a matter within the discretion of the board." Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 703 (1972). Other properties the assessed values of which are relied upon must be comparable to the subject property in order to be probative of fair cash value. See id. "Moreover, reliable comparable sales data will ordinarily trump comparable assessment information for purposes of finding a property's fair cash value." Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 2007-403.
"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 that single assessment is excessive.'" Finigan v. Assessors of Belmont, Mass. ATB Findings of Fact and Reports 2004-533, 2004-542, quoting Massachusetts General Hospital v. Belmont, 238 Mass. 396, 403 (1921). "[A] taxpayer does not conclusively establish a right to an abatement merely by showing that his land is overvalued. 'The tax on a parcel of land and the building thereon is one tax … although for statistical purposes they may be valued separately.'" Hinds v. Assessors of Manchester-by-the-Sea, Mass. ATB Findings of Fact and Reports 2006-771, 2006-778, quoting Assessors of Brookline v. Prudential Insurance Co., 310 Mass. 300, 317 (1941). 
In the instant case, appellant's evidence was limited to the land values as assessed of several other improved properties in Hingham, broken down on a per-acre basis. No showing was made to establish that the parcels were comparable in terms of such features as topography or water frontage. Nor were adjustments made for the differences in lot sizes. Moreover, appellant failed to consider the contribution to overall value made by improvements, although all of the comparison properties appeared to have structures on them and the dwelling represented an appreciable portion of overall value of the subject property. The appellant's evidence "challenging the value of the land component of the subject assessment" failed on this record to demonstrate "that the overall assessment of the subject property exceeded its fair cash value as of the relevant assessment date." See Hinds, Mass. ATB Findings of Fact and Reports at 2006-779. 
The assessors offered evidence of sales, but failed to make appropriate adjustments in order to arrive at an indication of the value of the subject property from the respective sales prices. All but one of the assertedly comparable sales occurred well after the relevant valuation date, yet no time adjustments were proposed. The assessors' market evidence did not independently support a finding of fair cash value for the subject property.
"A finding of fair cash value by the Board requires factual support in substantial evidence." Carney v. Assessors of Plymouth, Mass. ATB Findings of Fact and Reports at 2008-454, citing General Electric, 393 Mass. at 610. "Substantial evidence is 'such evidence as a reasonable mind might accept as adequate to support a conclusion.'" RCN-BecoCom, LLC v. Commissioner of Revenue, 443 Mass. 198, 204 (2005). (Citation omitted.) "[T]he fair cash value of property 'could not be proved with mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment.'" Montaup Electric Co. v. Assessors of Whitman, 390 Mass. 847, 854 (1984), quoting Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 72 (1941). "The credibility of witnesses, the weight of the evidence, and inferences that reasonably may be drawn from the evidence are matters for the board." General Mills, Inc. v. Commissioner of Revenue, 440 Mass. 154, 161 (2003).
Appellant failed to carry her burden of showing that the fair cash value of the subject property was lower than that assessed as of January 1, 2004. The Board decided this appeal for the appellee. 

                   APPELLATE TAX BOARD


				 By:	___________________________________
					Thomas W. Hammond, Jr., Chairman



A true copy,


Attest: ____________________________
	       Clerk of the Board

 On September 11, 2006, Commissioner Gorton was sworn as a temporary member of the Appellate Tax Board pursuant to G.L. c. 58A, § 1, his status as a member of the Board having terminated on that date with the appointment and qualification of his successor. See G.L. c. 30, § 8. This appointment was renewed for an additional year commencing September 11, 2007. Commissioner Gorton's material participation in the deliberation of this appeal included, inter alia, drafting and distributing proposed Findings and giving a detailed report on the evidence and his observations as to witness credibility. He also made oral presentations of his recommendations to the Board members. 
 Because the assessors failed to act on the application within three months of its filing, the application was deemed denied by operation of law on April 30, 2005. See Deysher v. Assessors of Concord, Mass. ATB Findings of Fact and Reports 2007-1367, 2007-1368, n. 1, citing G.L. c. 58A, § 6 and G.L. c. 4, § 7.
 In addition to failing to prove that the land component of the assessed value was excessive, appellant did not demonstrate that the overall value assigned to the land and the improvements exceeded fair cash value.
 Appellant failed to offer property record cards to substantiate all of the assessment information in Exhibit 5.

ATB 2008-521