The opinion
STATE OF MAINE SUPERIOR COURT
HANCOCK, SS. CIVIL ACTION
Docket Nos. AP-03- 15, 16
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Town of Castine,
Appellant
Mary K, Fitzsimmons,
Appellee
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Order on Appeal
Town of Castine,
Appellant
William R. Light, Jr. et al.,
Appellees
In each of these actions, pursuant to 36 M.R.S.A. § 844 and MR.Civ.P. 80B, the
Town of Castine appeals from separate decisions issued by the Hancock County
Commissioners granting abatements of the 2002 municipal property tax liabilities of the
appellees on their separate parcels of real estate located in Castine. Although these two
cases have not been formally consolidated on the appeals at bar, they raise the identical
dispositive issue, and the court addresses these appeals jointly. The record on these
appeals includes transcripts of the hearings relating to the appellees’ abatement
applications, held before the county commissioners on the same day. In their
presentations on this appeal, the parties have drawn on both hearing transcripts ina __
unified way. Further, at the second of the two hearings, the Town’s counsel
acknowledged that some of the evidence was common to both matters, see Light R. 12 at
p. 20, and it is apparent that the parties in the second case relied on the commissioners’
familiarity with the circumstances of the abatement issues, which had been developed at
the first hearing involving Mary Fitzsimmons’s case. Thus, with respect to the factual
development of these cases, where appropriate (particularly with respect to the historical
background of the assessment process), the court relies on portions of both transcripts
interchangeably. Further, the court has considered the remaining components of the
records on appeal and the parties’ written submissions.
The Town of Castine recently has conducted a comprehensive re-evaluation of
property value assessments in that municipality. The actual assessment work was
conducted by an outside certified appraiser, John Doan, who is affiliated with RJD
Appraisal. Doan himself has conducted appraisals in 30 municipalities. As partofhis.
work, Doan formulated opinions regarding the base acre valuation that would serve as the
starting point for assessing the value of individual parcels of property in a particular tax
district, which is designated by identifying groups of parcels with similar characteristics
in a geographical area. That base assessment reflects the value of a one acre lot. In
residential areas of relatively high density (that is, in areas where house lots tend to be
small), a calculation is applied to arrive at a base valuation that accounts for the first half-
acre of the parcel and, for waterfront lots, the first 100 feet of water frontage. That
calculation consists of multiplying one-half of the full acre value by its square root. (If
the full base acre valuation were simply divided by two in order to determine the value of
one-half acre, then the value of the one-half acre lot would be understated because the
value of a one-half acre parcel is greater than half the value of a full acre parcel. Thus, a
geometric rather than arithmetic reduction factor is used.) Then, this base value, which is
assigned to all parcels within a single tax district, is adjusted to account for factors that.
are unique to the individual parcel that is the subject of that assessment. These
adjustments take into consideration such circumstances, among others, as the actual size
of the lot in relation to the one-half acre standard, the actual amount of frontage in
relation to the 100 feet standard, and any limitations on the use of the property.
After Doan conducted his work as the assessing agent, he submitted his opinions
of value to the Town’s Board of Assessors, who are elected municipal officials but who
are not certified assessors. The members of the board accepted Doan’s recommendations
for the base acre valuations in each of the Town’s tax districts except for the district in
which the appellees’ parcels are located. There are seven or eight parcels altogether in
that district. Doan arrived at a base acre tax valuation of $500,000 for those parcels. The
Town’s Board of Assessors concluded that this base value was too low and increased it to
$650,000. Thus, the municipal tax liability of the appellees’ parcels was grounded on a
base valuation that was 30% greater than the amount recommended by the assessor’s
agent. In adjusting the base acre tax valuation recommended by the assessor’s agent, the
municipal assessors considered that value in relation to the base valuations associated
with the adjacent tax districts, and, in particular, the district that abuts the harbor, which
was given a base acre value of $800,000. Based largely on this consideration, the
assessors felt that the assessments of properties in the appellees’ tax district would be too
low if those assessments were predicated on the base value that Doan proposed. In
testifying about the nature of the valuation process, Doan noted that the appraisal process
is “subjective” and requires the use of the appraiser’s best judgment, particularly in the
absence of sales data.)
The appellees sought an abatement of the 2002 municipal property taxes assessed
against their parcels of land. See 36 M.R.S.A. § 843. The Town’s board denied those
requests for abatement. Because the Town does not have a board of assessment review, _
the appellees filed appeals of the board’s decisions to the Hancock County
Commissioners pursuant to section 844. As is noted above, on May 13, 2003, the
commissioners held separate hearings on the appellees’ abatement requests; the hearing
on Lights’ appeal was held immediately after the conclusion of the hearing on
Fitzsimmons’ appeal. The appellees’ fundamental position, of course, was that the
Town’s assessments of their property were too high. Their specific challenges, however,
were not directed to the base acre tax valuation analysis described above. Rather, they
’ Because of the absence of any recent sales involving the parcels in the appellees’ tax
district, there did not exist any sales-based information that the assessors could consider
in reaching an opinion of value.
emphasized specific features of their property that, they claimed, demonstrated the
Town’s assessment to be excessive. They also drew comparisons to adjoining or nearby
properties and argued that the assessed values of their Own properties were excessive in
relation to the assessments of the others. Despite the nature of the appellees’
presentations, in both hearings there was a full presentation of evidence regarding the
base acre valuation process, in which the commissioners showed a particular interest.2
After the May 13 hearings were closed, two of the three commissioners who were
present at those hearings presided at a public meeting held on June 13 (which, apparently,
was the next regularly scheduled meeting date for the commissioners), when they
engaged in open deliberations about the abatement appeals at issue here. (Even though
there were two separate public hearings on the appellees’ separate abatement appeals,
because those appeals raised some common issues, the commissioners engaged ina
single, consolidated deliberative enterprise.) During those deliberations, the participating
commissioners voiced their opinions that there was not a “reasonable” or “satisfactory”
basis for increasing the base acre valuation from $500,000, as Doan originally _
recommended to the Town’s Board of Assessors, to $650,000, as decided by the
municipal assessors. See Fitzsimmons R. 13 at pp. 23-24; see also id. at p. 27 (“no
justification” for that increase). A motion was made to approve a decision that the
correct valuation of the appellees’ properties rests on the base valuation originally
submitted by Doan. Id. at pp. 34-35. The two participating commissioners then signed
and issued two written decisions (one for each appeal) setting out identical underlying
findings and conclusions for each appeal: that the valuation of the subject parcel should
be in a specified amount, which the commissioners calculated on the basis of the base
acre valuations originally recommended by the assessor’s agent, and that “[in] addition
.. the reassignment, by the Castine Selectmen, of the basis for assessment from $500,000
to $650,000 [for the parcels in the appellees’ tax district]. ..was arbitrary and
discriminatory.” In the cases at bar, the Town appeals from the commissioners’
decisions.
* The Town does not contend here that the appellees have waived the argument on which
the commissioners ultimately rested their decision. Such an argument would fail in any
event because this issue is one that was fully addressed at the hearing, although the
appellees did not initiate that discussion at the hearing.
A taxpayer bears the burden of proving entitlement to an abatement of municipal
property taxes in one of three alternative ways: by establishing “’ that the property is
substantially overvalued, there was unjust discrimination, or that the assessment was
fraudulent.’” Ram’s Head Partners, LLC v. Town of Cape Elizabeth, 2003 ME 131, 834
A.2d 916. 919, quoting City of Biddeford v. Adams, 1999 ME 49, J 13, 727 A.2d 346,
349. In order to prove overvaluation in the first of these three ways, the taxpayer must
present evidence of just value that the board can then evaluate and then compare to the
assessed value. See City of Waterville v. Waterville Homes, Inc., 655 A.2d 365, 366-67
(Me. 1995). oe
Unjust discrimination, which is the second of the three ways that a taxpayer may
be entitled to an abatement, exists only if the tax assessor’s valuation methodology
“necessarily results in unequal apportionment” of a municipality’s real estate taxes,
which, by constitutional requirement, must be allocated according to the “just value” of
those assets. City of Biddeford, 1999 ME 49, { 14, 727 A.2d at 349; see ME. Const. art.
9, § 8. A tax assessment system can be established as unlawfully discriminatory in one of
two different ways: directly, that is, through proof that the methodolo gy “results in
unequal treatment,” or inferentially, that is, though proof of “a sufficient pattern of
arbitrary reductions below market value, even in the absence of evidence of an explicitly
discriminatory methodology.” Ram’s Head Partners, 2003 ME 131, ¥ 13, 834 A.2d at
920. A taxpayer is not required to present separate proof of just value to the tribunal to
support a claim of unlawful discrimination, because such a claim is based on a distinct
theory of harm than in a substantial overvaluation claim. City of Biddeford, | 999 ME 49,
{ 22, 727 A.2d at 351.
Because a municipality’s tax assessment is presumed to be valid, Ram’s Head
Partners, 2003 ME 131, 9, 834 A.2d at 919, the appellees bore the burden of
persuading, in this case, the county commissioners that they were entitled to an
abatement. Because the commissioners in fact ordered the abatements, they obviously
concluded that the appellees had sustained their burdens. On this appeal, this court
examines the decisions of the county commissioners to grant the abatements, rather than
the decisions of the Town to deny the abatement requests. Town of Vienna v. Kokernak,
612 A.2d 870, 872-73 (Me. 1992). This court must review the commissioners’ decisions
“for an abuse of discretion, error of law, or findings unsupported by substantial evidence
in the record.” Jd. at 872. If the commissioners’ decisions are supported by substantial
evidence in the case, the existence of evidence that also could have supported a contrary
decision does not vitiate the decisions actually reached. Id.
Here, the evidence presented to the commissioners in each of these abatement
appeals justified the commissioners’ conclusion that the subject parcels were
substantially overvalued. The commissioners entertained evidence that the Town
assessed the value of the Fitzsimmons property to be $412,066. This resulted from the
decision of the municipal assessors to increase the base acre valuation from $500,000 to
$650,000. Contrary to the Town’s arguments on appeal, the appellees did present some
evidence regarding their opinion of the fair value of their premises: Fitzsimmons stated
that in her view, her property was worth $280,000 (Fitzsimmons R. 13 at p. 6); and Light
testified that he thought his property was worth $188,415 (Light R. 12 at p. 6)?
More significantly, even without regard to the appellees’ specific opinions of
market value expressed to the commissioners, the commissioners were presented with
evidence that the Town’s assessors increased the opinions of value rendered by their
agent, by enhancing the base valuation factor recommended by that agent. The
commissioners also heard the assessor’s agent’s quantitative opinion of the base acre
valuation, namely, $500,000. This was sufficient to allow a: person to work through the
calculations — as the commissioners themselves did during their deliberations — to
determine what the final assessed value would have been if the assessors had adopted the
base acre valuation suggested to them. This evidence builds on the more generalized
testimony of the appellees that, in their view, the Town overvalued their land. Thus, this
case is distinguishable from one where the taxpayer’s evidence of overvaluation rests
solely on a methodological challenge to the assessed value as determined by the
municipality. See City of Waterville, 655 A.2d at 366. Rather, here, the commissioners
were persuaded that the assessors erred in rejecting the assessor’s agent proposed base
* Both Fitzsimmons and Light framed those opinions in terms of the figure they thought
should be adopted as assessed value. However, because assessed value, fair valie and ~~
market value all have the same meaning Quoddy Realty Corp. v. C ity of Eastport, 1998
ME 14, §{ the opinions offered by the appellees to the commissioners are tantamount to
the latter.
valuation for one tax district in the Town, although accepting the agent’s
recommendations for all of the other municipal tax districts. Indeed, the nature of the
evidence presented to the commissioners could be seen as more persuasive than a bald
but alternative suggestion of value. In the cases at bar, the hearing records include
evidence of the base acre valuation as proposed by Doan (whom the Town itself at least
implicitly acknowledges to be an expert, as shown by the Town’s decision to secure his
services and accept virtually all of his recommendations), the divergence of opinions
between Doan and the Town’s assessors, and the quantifiable variances between those
opinions.
The Town argues that the commissioners’ decisions means that the assessors
utterly will be bound by the recommendations of the agents whom they retained to assist
them in valuing taxable property within the municipality. This certainly is not the effect
of the commissioners’ decisions here. As the appellees correctly note, the evidence
presented to the commissioners in these abatement appeals would have warranted them in
deciding these matters favorably to the Town. However, in these particular cases, the
commissioners concluded that the assessor’ s agent’s opinion of the base acre valuation
for parcels in the appellees’ tax district was entitled to greater weight than the higher
valuations assigned by the assessors. The commissioners were not compelled to reach
this conclusion, but they did. The dispositive point in these appeals, however, is that the
commissioners were not compelled to reject the lower base acre valuation originally
proposed by the assessor’s agent.
The Town also argues that, notwithstanding the provisions of the commissioners’
written decisions, the transcript of their deliberations shows that they did not actually find -
that the Town’s assessments were the product of a discriminatory methodology. The
court need not and does not reach this issue, because, as is discussed above, the record
supports the commissioners’ decision based on the alternative basis of substantial
overvaluation.
The entry shall be:
For the foregoing reasons, the decisions of the Hancock County Commissioners to
grant the appellees’ 2002 municipal property tax abatement appeals are affirrned.
Dated: March 2, 2004
ow :
Justice, Maing Superior Court
WAN:
PaFRIS