Paul T. Sullivan v. Board of Assessors of the City of Amesbury (June 5, 2012)

COMMONWEALTH OF MASSACHUSETTS

		      APPELLATE TAX BOARD


PAUL T. SULLIVAN		v.	   BOARD OF ASSESSORS OF  
 							   THE CITY OF AMESBURY			   
Docket No.  F308508				   Promulgated:
		 					   June 5, 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 appellee, Board of Assessors of the City of Amesbury (the "assessors" or "appellee"), to abate taxes on certain real estate located in the City of Amesbury, owned by and assessed to Paul T. Sullivan (the "appellant") under G.L. c. 59, §§ 11 and 38, for fiscal year 2010.
	Chairman Hammond heard the appeal.  Commissioners Scharaffa, Egan, Rose, and Mulhern joined him in a decision for the appellee. 
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. 
 
	Paul T. Sullivan, pro se, for the appellant.
	Mary T. Marino, Chief Assessor, for the appellee.

FINDINGS OF FACT AND REPORT
On the basis of the 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, 2009, the relevant date of valuation and assessment for the fiscal year at issue, Paul T. Sullivan was the assessed owner of a parcel of real estate located at 271 Main Street in the City of Amesbury (the "subject property").  The subject property's parcel contains approximately 1.47 acres of land and is improved with what has been described as a rare example in Amesbury of a one-story Federalist-style, single-family dwelling built circa 1832.  A single-story, attached, side ell on the dwelling's southern side contains an entry sheltered by a one-story porch.  The dwelling contains a finished living area of about 1,725 square feet, and there are a total of seven rooms, including two bedrooms, as well as two full bathrooms.  The interior floors are linoleum, tile, hardwood or pine, and the walls and ceilings are sheetrock or plaster.  The exterior of the dwelling is clapboard, and it has an asphalt-shingled gable roof.  The foundation is granite, and the basement is unfinished.  The dwelling is heated by a forced-hot-water heating system which is fueled by gas.  The town provides water and sewer service, and all of the usual utilities are available at the subject property.  For amenities and additional features, the dwelling has two interior end fireplaces, flush eaves, an entablature above the main entry's transom, 9-over-6 sash windows, and several skylights.  According to the property record card entered into evidence, the dwelling is in "average" condition.  
The subject property's parcel consists of a one-acre primary site coupled with approximately 0.47-acres of excess land.  The property record card describes the subject property's parcel as being situated above street level and "rolling."  The subject property is located in Amesbury's Ferry District which consists of the area bounded by the Merrimack and Powwow Rivers, Haverhill Road, and the area east of Bailey's Pond.  This section was one of Amesbury's earliest settlements, dating from the seventeenth century, with the densest settlement occurring closest to the confluence of the two rivers, near the subject property's location.  The property record card describes the subject property as being located in an "urban" neighborhood.  
For fiscal year 2010, the assessors valued the subject property at $316,200 and assessed a real estate tax thereon, at the rate of $17.77 per thousand, in the amount of $5,618.89.  The subject property's dwelling component was valued at $158,600, while its parcel component was valued at $157,600.  On December 31, 2009, Amesbury's Collector of Taxes sent out the town's actual real estate tax bills for fiscal year 2010.  In accordance with     G.L. c. 59, § 57C, the appellant paid the tax due without incurring interest.  On February 1, 2010, in accordance with G.L. c. 59, § 59, the appellant timely filed his Application for Abatement with the assessors, which they then denied on April 8, 2010.  The appellant seasonably filed an appeal with the Board on July 7, 2010.  
Subsequently, on April 7, 2011, six days before the hearing of this appeal, the assessors offered to enter into a written settlement agreement with the appellant to lower the assessed value of the subject property for fiscal year 2010.  The appellant agreed to accept the assessors' offer but only if his right was reserved to contest before the Board the effect on value of the "Historical" designation that the assessors had placed on the subject property.  The assessors refused to accept the appellant's counteroffer, and the original assessment remained intact.  
On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal. 
The appellant presented his case challenging the assessment through his testimony and the introduction of numerous exhibits, including copies of the subject property's property record card, copies of two letters from the Amesbury Historical Society and one from the Massachusetts Historical Society, copies of several emails, copies of property record cards of other properties in Amesbury, various print-outs, and a compilation of assessments for other properties in town with "Historical" designations and for local Cape Cod-style properties without a "Historical" designation.  
In support of the assessment, the assessors presented the testimony of the city's Chief Assessor, Mary T. Marino, and numerous exhibits of their own, including the requisite jurisdictional documents, a copy of the proposed settlement letter from the assessors to the appellant, a copy of an index from the Amesbury Historical Survey, copies of property record cards for various Victorian homes in Amesbury, a copy of a Massachusetts Historical Commission document listing the subject property, a copy of National Register Criteria, a summary and itemization by style and assessment of sales of real property in Amesbury between 2007 and 2009, and a copy of Amesbury's By-Laws.   
Mr. Sullivan's principal argument for abatement was that the assessors had improperly designated the subject property as "Historical"; he also claimed that the assessors had failed to properly account for the subject property's inferior condition and certain deficiencies.  Mr. Sullivan asserted that the subject property should have been designated and assessed as a basic Cape Cod-style property with further adjustments to account for its inferior condition.  Using data from fiscal year 2006 and 2008, Mr. Sullivan determined that the base rate for assessing basic Cape Cod-style properties in Amesbury was about 0.85 of the base rate for assessing properties with a "Historical" designation.  He, therefore, maintained that the portion of the assessment allocated to the subject property's dwelling should be decreased by 15%, thereby reducing the subject property's overall assessed value by $21,800, from $316,200 to $294,400.  
Mr. Sullivan maintained that the $294,400 value should be further reduced to $277,687 to reflect the subject
property's inferior condition.  Other than the settlement offer, however, there was a paucity of information in the record relating to the subject property's purported inferior condition and possible defects and their effect, if any, on the subject property's assessed value.  
Mr. Sullivan also contended that the assessors should not have relied on the index from the Amesbury Historical Survey for classifying his property as "Historical" because the index was incomplete and not meant to be used for assessing purposes, and because the assessors applied the designation inconsistently.  Mr. Sullivan did not perform or submit comparable-sales or comparable-assessments analyses.
In defense of the assessment, the assessors explained that the sales data in Amesbury from prior years indicated that older homes located in more historic areas or homes of historical significance were selling at a significantly higher price than their assessed values, which had been established using base rates that reflected more traditional or basic home-style designations.  These historically significant or older homes were also selling at a higher sales price than their newer equivalent-style or -sized homes.  As a result and with the approval of the Department of Revenue ("DOR"), the assessors instituted in the mid-2000's a "Historical" designation, with a slightly increased base rate, to account for this phenomenon.  DOR's "Notification of Certification" for the relevant time period states that: "the statistical analysis of arms-length residential sales indicates compliance with the Commissioner's standards for certification.  In addition, the Bureau [of Local Assessment]'s review of a representative sample of parcels . . . indicates a consistent application of the valuation methodologies employed for these classes of property throughout the community."  The assessors also emphasized that, notwithstanding the application of the "Historical" designation and a higher base rate, the assessed value assigned to the subject property was supported by comparable-sales data.  They introduced and explained a comparable-sales summary and itemization that demonstrated the higher sale prices achieved by "Historical" homes like the subject property.                          
On the basis of all the evidence, the Board found that the appellant failed to meet his burden of proving that the subject property was overvalued for the fiscal year at issue.  The appellant did not show that the "Historical" designation that the assessors had placed on his property had caused them to overvalue it for the fiscal year at issue.  Rather, the assessors demonstrated through sales and assessment data and analyses that the subject property's assessed value did not exceed its fair cash value.  The appellant, on the other hand, did not provide the Board with comparable-sales or comparable-assessments analyses to support his contention of over-valuation; he simply relied primarily on what he perceived to be a misclassification.  Even assuming, for argument's sake, that the subject property was misclassified, the appellant never established that the existing assessment exceeded the subject property's fair cash value for the fiscal year at issue.  The assessors' evidence and data indicated that, regardless of classification, the subject property was valued appropriately.  
In addition, the appellant did not provide the Board with sufficient competent evidence to support his contention that the subject assessment was excessive because it did not adequately account for the condition of the subject property.  The only evidence of the subject property's inferior condition was the assessors' settlement offer.  The Board declined to give weight to this offer for a number of reasons.  First, as a matter of public policy, settlement evidence is typically excluded so that litigants are encouraged to settle their disputes.  See Zucco v. Kane, 439 Mass. 503, 507 (2003)(excluding settlement evidence in order "to encourage settlements by limiting collateral consequences of a decision to compromise."); see also Mark S. Broden and Michael Avery, Handbook of Massachusetts Evidence 181 (8th Edition 2007)("[A] party's offer to compromise or acceptance of a settlement is not admissible to prove the validity or invalidity (or the amount) of the claim."); Marchand v. Murray, 27 Mass. App. Ct. 611, 615 (1989) ("[I]t is well settled that offers of settlement are inadmissible to establish liability).  Moreover, settlement offers are rightly excluded because such offers may be made even where a party believes it has no actual liability, in order to avoid the expense of litigation.  See id. ("[A] party's willingness to compromise a dispute . . . may simply reflect a desire to avoid litigation."); see also Dahms v. Cognex Corp., 455 Mass. 190, 198-99 (2009).  
The appellant here neglected to provide virtually any other substantiation for his claim that the subject property's assessment did not account for the subject property's inferior condition and deficiencies.  As such, the Board did not have sufficient evidence to find that the purported inferior condition and deficiencies caused the subject property's assessed value to exceed its fair cash value for the fiscal year at issue.        
Based on all of the evidence and its subsidiary findings of fact, the Board ultimately found that the appellant failed to meet his burden of proving that the subject property was overvalued for the fiscal year at issue.

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).  Generally, real estate valuation experts and the Massachusetts courts rely upon three approaches to determine the fair cash value of property: income capitalization, sales comparison, and cost reproduction. Correia v. New Bedford Redevelopment, 375 Mass. 360, 362 (1978).  "The board is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).   
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 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, 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)).  In the present appeal, the appellant attempted to show that the assessors' valuation methodology was flawed because they designated the subject property's dwelling as "Historical" instead of as a simple Cape Cod-style home.  The Board found, however, that the assessors adequately substantiated the validity of their methodology for the fiscal year at issue.  They demonstrated that older homes located in historic neighborhoods or historically significant properties had higher sale prices than their otherwise equivalent but newer properties.  Furthermore, the Board found that the appellant failed to prove that the subject property's assessment should be lowered to account for its purported inferior condition and deficiencies. 
Timely sales and assessments of comparable realty in the same geographic area generally contain probative evidence for determining the value of the property at issue.  Graham  v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd, 73 Mass. App. Ct. 1107 (2008). "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."  New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 470 (1981).  In the present appeal, the appellant did not provide the Board with comparable-sales or comparable-assessment analyses.  Instead, he relied almost solely on his assertion that the subject property should not have been classified as "Historical."  The Board found, however, that the assessors demonstrated that this designation was an acceptable one to use during the relevant time period, and, at any rate, the assessors' comparable-sales and comparable-assessments analyses supported the assessment.  
"The board [is] not required to believe the testimony of any particular witness but it [can] accept such portions of the evidence as appear to have the more convincing weight.  Assessors of Quincy v. Boston Consolidated 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 board."   Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).  
On the basis of all of the evidence and its subsidiary findings and rulings, the Board ultimately found and ruled that the appellant failed to meet his burden of proving that the subject property was overvalued for fiscal year 2010.  Accordingly, the Board decided this appeal for the appellee.   	    		    
APPELLATE TAX BOARD
				
By:				______	undefinedundefined_______
				    Thomas W. Hammond, Jr., Chairman
A true copy,

Attest:	__________		_____
	  Clerk of the Board

 The dwelling is also described as a 1-1/2 story "antique Cape," a form of architecture favored and built by common persons among the first New England colonists to provide basic shelter with few embellishments.
 There is some evidence that some or all these windows were replaced at some unknown time.
 Using Mr. Sullivan's suggested percentage reductions, the Board calculated a proposed value of $292,410 to reflect a basic Cape Cod-style designation further reduced to $275,801 to account for the purportedly inferior condition. 

ATB 2012-714


ATB 2012-714