The opinion
STATE OF MAINE SUPERIOR COURT
CIVIL ACTION .
KENNEBEC, ss. DOCKET NO. AP-01-13
SKS — KEN- [5[920R
NORTHEAST EMPIRE LIMITED
PARTNERSHIP #2,
Plaintiff /Petitioner
Vv. DECISION ON APPEAL
DONALD L. GARBRECHT
TOWN OF ASHLAND, LAW LIBRARY
Defendant/Respondent ‘MAY 10 2002
This matter comes before the court on appeal from the State Board of Property
Tax Review (Board), pursuant to M.R. Civ. P. 80C. The Board denied the appeal of oS
Northeast Empire Limited Partnership #2 (NELP) from a denial of property tax
abatement by the town of Ashland’s Board of Assessors (Town) for tax years 1997
and 1998. NELP owns 28 acres in Ashland on which it operates a commercial wood-
fired electric power generation facility. The Town valued the property at $39,218,400
for tax year 1997 and $25,000,000 for tax year 1998. NELP contends the property
should be valued at $2,000,000 for both years. The Board upheld the Town's decision
and this appeal followed.
Background
The electric power generation facility was constructed in 1993 as part of a
power purchasing agreement between NELP and Central Maine Power Company.
The plant cost approximately $60,000,000 to construct and was financed through
General Electric Credit Corporation (GECC). The plant produced power for the next
1
year and then Central Maine Power negotiated a stand-down agreement through
NELP and received payments from CMP in exchange for not producing power. In
1997, CMP negotiated a termination with NELP. After the termination agreement
was completed, the power purchasing agreement was purchased by another
company and the proceeds were used to pay off various obligations including the
financing received from GECC. After all these transactions had taken place, NELP
offered to purchase the physical plant from GECC. Based on what NELP
characterizes as an arm’s length transaction, a sale price of $2,000,000 was agreed
upon. In its appeal, NELP urges the court to consider the stand-down status of the
plant and the $2,000,000 sales price as proof that the assessed valuations for 1997 and
1998 were invalid and unreasonable.
Discussion
Before discussing the issues on appeal, the court must consider the Town’s
motion to strike Appendices A & B of NELP’s brief as not properly part of the record
on appeal. Specifically, the Town objects to excerpted testimony and incorporation
by reference of two documents previously filed by NELP. Rule 80C(f) dictates the
agency must provide the record on appeal. Counsel may not freely supplement the
record in a tax abatement appeal. However, upon closer examination, Appendix A
to the petitioner’s brief contains excerpts and summaries of testimony which is
provided in its entirety as part of the record, and Appendix B is a verbatim excerpt
from NELP’s brief to the Board (with the exception of the title which should be
stricken). Therefore, the town’s motion to strike is denied.
Moving to the issues on appeal, when a decision is appealed pursuant to M.R.
Civ. P. 80C, the court reviews the decision directly for abuse of discretion, errors of
law, or findings not supported by the evidence. Centamore Y. Dep't of Human
Services, 664 A.2d 369, 370 (Me. 1995). When a taxpayer challenges assessed
valuation, the taxpayer must overcome the presumption that the valuation is valid
by persuading the reviewing body that the assessor’s valuation was manifestly
wrong. Yusem v. Town of Raymond, 2001 ME 61, { 8, 769 A.2d 865, 869. In
abatement proceedings, the reviewing body undertakes an independent review of
value, only if the taxpayer makes his threshold showing that his assessment is
manifestly wrong. Id. { 8. To show manifest wrong, the taxpayer must demonstrate
(1) the judgment of the assessor was irrational or so unreasonable in light of the
circumstances that the property was substantially over-valued and an injustice
resulted; (2) there was unjust discrimination; or (3) the assessment was fraudulent,
dishonest or illegal. Id. J 9 (citing Muirgen Props., Inc. v. Town of Boothbay, 663
A.2d 55, 58 (Me. 1996). A taxpayer must do more than merely impeach the town’s
assessment methodology in order to meet the burden of proving the assessment was
manifestly wrong. The taxpayer must come forward with “credible, affirmative
evidence of just value.” Town of Southwest Harbor v. Harwood, 2000 ME 213, { 9,
763 A.2d 115, 118 (quoting City of Waterville v. Waterville Homes, Inc., 655 A.2d
365, 367 (Me. 1995)).
The judgment that a property’s assessed value is in excess of just value
requires a comparison between the local assessment and the version of value that
the petitioner asserts as the just one. If the petitioner for abatement fails to provide
the Board with evidence of just value that the Board deems credible, the Board has
no basis for comparing the local assessment with the petitioner’s version.
Waterville Homes, 655 A.2d at 367. Credibility determinations are “exclusively the
province of [factfinder] and will not be disturbed on appeal.” Sprague ‘Electric Co. v.
Maine Unemployment Comm., 544 A.2d 728, 732 (Me. 1988). If, but only if the
petitioner is able to convince the Board that the assessor’s valuation was manifestly
wrong, the Board is then required to make an independent determination of fair
market value considering all relevant evidence of just value. Quoddy Realty Corp.
v. City of Eastport, 1998 ME 14, J 5, 704 A.2d 407, 408.
The evolved and refined procedures set forth above makes good sense. A
taxpayer cannot prevail in his case before the Board simply by attacking the assessor
because that would simply show what is wrong rather than what is right. Therefore,
the taxpayer must not only prove that the assessor was wrong, but he must also
provide the Board with evidence which the Board can then take into consideration
along with the evidence the assessor offers to make an independent determination
of fair market value. However, the evidence presented by the taxpayer cannot be
just any evidence; it must be credible evidence. If the evidence presented is
incredible, then it cannot be used to make the independent determination and, by
extension, cannot be used to show that the assessor’s valuation was manifestly
wrong. If this were not the procedure, the Board could find itself not believing the
assessor, not believing the taxpayer, and without any useable tools or information
with which to make an independent determination of value.
In the present case, the Board never reached the point where it was required
to make its independent valuation. The Board conducted five days of hearings and
received voluminous exhibits. The Board then issued a 13-page decision, replete
with findings and analysis. In particular, the Board analyzed the evidence presented
by NELP and found it wanting in terms of credibility. The Board also notes certain
weakness in the assessor’s procedures, but concluded that it did not need to decide
whether the taxpayer had met the first prong of the test of determining the
assessment as manifestly wrong, because the taxpayer failed to meet the second
prong.
The Board did not merely make a conclusory finding that the taxpayer’s
evidence of value was not credible. The key witness for the taxpayer was a Mr.
Huck. The Board conducted a detailed appraisal of Huck’s appraisal -- including cost
approach, income approach, and sales comparison approach to valuation -- and
specifically stated why it found each of his conclusions lacking credibility.
To summarize, the Board’s decision to deny the petitions for abatement for
the tax years April 1, 1997 and April 1, 1998 was the result of its determination that
the taxpayer had failed to present credible evidence leading to a credible value for
the property, thus failing the second prong of the test set forth in Waterville Homes
to determine manifest wrong. This finding left the Board without the tools
necessary to make its own independent determination of just value and the
necessity to deny the abatement. The credibility of witnesses and evidence is pivotal
in determining whether an abatement petition will proceed, and these issues of
credibility are best left to the Board. This court finds no abuse of discretion, errors of
law or findings not supported by the evidence. The Board discharged its duties
appropriately under 36 M.RS.A. § 843 and the direction of the Law Court in
Waterville Homes.
NELP has also claimed that the Board counsel gave incorrect instructions as
to the legal standard, that the Board improperly considered intangibles in its
assessment and that the Board wrongfully admitted irrelevant evidence in violation
of M.R. Evid. 405. However, the court agrees with the Town that it is the Board’s
decision rather than Board counsel’s advice that is subject to review. Any weakness
in Board counsel’s advice might better be characterized as incomplete rather than
mistaken. It is the legal standard stated in the opinion which must be considered as
the basis for the Board’s decision rather than preliminary advice. The issue of
intangibles was already fully addressed in NELP’s motion in limine, which was
denied. Finally, the Board is not bound by the Maine Rules of Evidence and has the
discretion to exclude irrelevant evidence, but is not obligated to do so.
For the reasons stated above, the entry will be:
Respondent’s motion to strike is GRANTED with regards to the
title of Appendix B but is otherwise DENIED. The appeal is DENIED
and the decision of the State Board of Property Tax Review is
AFFIRMED. REMANDED to the State Board of Property Tax Review.
Dated: April i , 2002 TiS
S. Kirk Studstrup
Justice, Superior Court
Date Filed 3/1/01 Kennebec Docket No. AP01-13
County
Action __Pet4 thon for Review J. STUDSTRUP
Northeast Empire Limited Partnership #2 VS- Board of Property Tax & Town of Ashland
Plaintiff’s Attorney Defendant’s Attorney
Alfred C. Frawley, Esq. “Michelle M. Robert, AAG
Tracey G. Burton, Esq. 6 State House Station
P.O. Box 665 Augusta,Maine 04333-0006
Bath, Maine 04530 -Robert J. Crawford, Esq. (Ashland)
P.O. Box 9729
Portland, maine 04104
Date of
Entry
3/5/01 80C Petition for Review of Final Agency Action, filed. s/Frawley, Esq.
s/Burton, Esq. (filed 3/1/01)
Certificate of Service, filed. s/Frawley, Esq.
3/12/01 Entrance of Appearance, filed s/Crawford, Esq.
3/21/01 Motion to Extend Time Within Which to File Record, filed. s/Robert, AAG
3/26/01 MOTION TO EXTEND TIME, Marden, J.
Time enlarged to May 14, 2001.
Copies mailed to attys of record.
5/3/01 Motion to Extend Time Within Which to File Record, filed. s/Robert, AAG.
5/7/01 MOTION TO EXTEND TIME, Studstrup, J. (dated 5/4/01)
Time extended to 6/1/01.
Copies mailed to attys of record.
6/5/01 Certificate of Record, filed. s/Michaud, Sec. of Board.
Notice of briefing schedule mailed to attys of record.
7/5/01 Motion by Agreement for Enlargment of Time with incorporated memorandum
of law, filed. s/Burton, Esq.
Proposed Order, filed.
7/9/01 ORDER ON MOTION FOR ENLARGEMENT OF TIME, Studstrup, J.
Petitioner's motion for enlargement of time to file its 80C appeal brief to
August 1, 2001 is GRANTED.
Copies mailed to attys of record.
7/16/01 Amended Certificate of Record and Amended Summary of Contents, filed. s/
Barbara Michaud, Board Secretary.
7/20/01 Amended Certificate of Record, filed. s/Michaud, Sec.
7/25/01 Unopposed Motion for Leave to Exceed Page Limit with Incorporated Memo-
Memorandum of Law, filed. s/Frawley, Esq.
Proposed Order, filed.