Ireland v. Town of Wethersfield

BERDON, J.,

with whom MCDONALD, J., joins, dissenting. Although the majority correctly states that the principal issue in this case is the taxpayer’s burden of proof, and that the decisions of this court pertaining to that burden are at best confusing, it leaves this issue for another day.1 In my view, because the issue affects *563169 towns and other taxing districts of the state of Connecticut, and real property owners throughout the state, we have an obligation to decide this issue at this time.2 Accordingly, I strongly urge that this issue be addressed at this time by an en banc court. I am bewildered by the majority’s refusal to do so.

I

The majority not only avoids the issue with respect to the taxpayer’s burden of proof, but also causes more confusion. As best as I can determine, the majority adopts, at least for this case, the following for a tax appeal brought pursuant to General Statutes § 12-117a: The taxpayer has the burden of demonstrating “an overvaluation of his property” and “[a] taxpayer who carries his burden of establishing overvaluation is entitled to plenary judicial relief,” (emphasis added) but a taxpayer “who fails to carry this burden has no right to complain if the trial court accords controlling weight to the assessor’s valuation of his property.” Even if we assume that this is the standard, whatever it means, the majority then ignores the undisputed facts of this case.

When John Dagata, the defendant’s assessor, testified in the trial court, he conceded on cross-examination that the plaintiff’s property was overvalued and he acknowledged that the true and actual value of the *564plaintiffs property should be reduced from $906,000 to $769,000. Based upon this concession, the court reduced the assessed value from $634,000 to $538,300, which was 70 percent of the true and actual value. Notwithstanding this admission, and the standard purportedly applied in this case, the majority concludes that the plaintiff had failed to meet his initial burden of establishing an overvaluation of his property. That is simply wrong because of the concession of the defendant’s assessor. In my view, the plaintiff met his burden and, therefore, he was entitled to a de novo determination of the value of the property.

There was no evidence before the trial court to support the defendant’s assessment.3 Dagata, the only wit*565ness that testified for the defendant, was unable to substantiate the valuation of the plaintiffs prop*566erty.4 Therefore, the trial court improperly relied on the defendant’s assessment and a new trial is required.

Furthermore, the defendant’s actions in this case require reversal of the trial court’s decision. The Appellate Court recited the relevant facts with respect to this issue. The property “was purchased in the 1960s and in 1980, the plaintiff obtained subdivision approval for *567twelve building lots, with the restriction that he would not convey any lots until all public improvements were made to the sátisfaction of the town. In addition to his application to the planning and zoning commission, the plaintiff applied to the inland wetlands and watercourses commission for permission to conduct work on wetlands located on the eight acres. His application for a wetlands permit was granted, and, pursuant to it, he installed storm sewers and sanitary sewer lines, filled in wetlands and conveyed title to roads and open space wetlands to the town. In September, 1990, and thereafter, the building inspector refused to issue a building permit on the ground that the permit issued by the wetlands commission in 1980 had expired. The plaintiffs second application for a wetlands permit was also denied in October, 1990. On May 4, 1991, the town informed the plaintiff by letter that the town did not recognize the 1980 wetlands permit as valid. In a separate suit, brought by the plaintiff against the town, and decided on September 24,1993, another trial court held that the unilateral invalidation of the wetlands permit in 1990 by the town was invalid and that the permit of the wetlands commission issued in 1980 continued in full force and effect.” Ireland v. Wethersfield, 41 Conn. App. 421, 423, 676 A.2d 422 (1996). The defendant’s decennial revaluation as of October 1, 1989, was predicated upon the plaintiff being able to subdivide the property into twelve residential building lots. Although the plaintiff did not attempt to obtain his building permit until 1990, he “testified that he had been told by the town’s head building inspector in the summer of 1989 that he did not have an approved wetlands permit.” Id., 424.

The defendant cannot have it both ways. Between 1989 and 1993, its building inspector took the position that the plaintiff was unable to subdivide because the plaintiffs wetlands permit had expired. During that *568same period of time, the defendant’s ássessor assessed the property on the basis that it could be subdivided for residential lots, which resulted in a higher valuation. Only after the plaintiff incurred legal expenses by bringing a separate action against the defendant was this matter resolved approximately four years later. During that period of time, the plaintiff did not have use of his property as a residential subdivision. Based upon these facts, equity requires that we affirm the judgment of the Appellate Court and order a new trial.

II

Furthermore, the majority’s decision sets our recent case of Carol Management Corp. v. Board of Tax Review, 228 Conn. 23, 633 A.2d 1368 (1993), on its head. In Carol Management Corp., we unanimously agreed that “[w]hile we have recognized that proper deference should be accorded to the assessor’s valuation . . . no deference to the assessor’s valuation [is] warranted when neither the assessor nor the appraiser who valued the property during the revaluation testifies at trial.” (Emphasis added; internal quotation marks omitted.) Id., 36. That makes eminent sense because the taxpayer is unable to cross-examine the person who appraised the property without his or her being present. In Carol Management Corp., “neither the assessor nor the person who appraised the plaintiffs property . . . testified before the trial court.The only evidence pointed to by the [town] concerning the methodology employed in the assessment is the assessor’s card and the previously recorded testimony of [the assessor] .... [That assessor] testified that it appeared from the assessor’s card that a cost of replacement approach had been used to value the plaintiffs property. He stated that he had no way of knowing, however, whether other approaches had even been considered.” (Emphasis added.) Id., 37. In light of that, we held that “[i]n the absence of any evidence on why the assessor used the cost of replace*569ment approach to value the plaintiffs property and how the values in the assessment were calculated, deference to the assessor’s valuation was not required.” (Emphasis added.) Id.

In this case, the assessor for the defendant, Dagata, did testify, but he testified that he did not appraise the plaintiffs property. The appraisal of the plaintiffs property was done for the defendant by a private firm, Sabor Systems, Inc. Before the trial court, Dagata testified that a comparable sales approach was used to value the property and gave Sabor Systems, Inc.’s opinion to support the defendant’s valuation. Nevertheless, Dagata was unable to identify a single comparable property sale upon which the valuation was based.5 Also, the defendant did not introduce the appraisal report into evidence. Ireland v. Wethersfield, supra, 41 Conn. App. 427 n.4. Surely, the court should not have given deference to the assessor’s valuation, under Carol Management Corp., when the assessor could not substantiate the valuation of the taxpayer’s property. Because the trial court improperly deferred to the defendant’s assessment, our decision in Carol Management Corp. requires the reversal of the judgment in this case. See also Stamford Apartments Co. v. Stamford, 203 Conn. 586, 589, 525 A.2d 1327 (1987) (“In this case ... no deference to the assessor’s valuation was warranted. The record indicates that the appraiser employed by the [town’s] assessor for purposes of the . . . valuation arrived at that valuation by a cost of replacement method. Neither the assessor, nor the appraiser who valued the property ... on the cost of replacement method testified at the trial.”). Although this is the first issue raised in the plaintiffs brief, for some reason the majority ignores it. I cannot condone the short shrift that the majority has given to the plaintiffs argument, *570an argument that undermines the foundation of the trial court’s finding of valuation.

I would affirm the judgment of the Appellate Court reversing the trial court’s judgment and remanding the case for a new trial for the reasons set forth herein.

Accordingly, I dissent.

See footnote 5 of the majority opinion. I could not agree more with the majority that we are in a state of confusion regarding a taxpayer’s burden of proof in tax appeals. We have been all over the lot with respect to the standards in General Statutes § 12-117a [formerly § 12-118] tax appeal cases. See, e.g., Xerox Corp. v. Board of Tax Review, 240 Conn. 192, 204, 690 A.2d 389 (1997) (“taxpayer bears the burden of establishing that the assessor has overassessed its property [but] . . . [t]he trier of fact must arrive at his [or her] own conclusions” [citations omitted; internal quotation marks omitted]); Newbury Commons Ltd. Partnership v. Stamford, 226 Conn. 92, 104, 626 A.2d 1292 (1993) (“Mere overvaluation is sufficient to justify redress under General Statutes § 12-118, and the court is not limited to a review of whether an assessment has been unreasonable or discriminatory or has resulted in substantial overvaluation. . . . [T]he [trial] court tries the matter de novo and the ultimate question is the ascertainment of the true . . . value,” without reference to any sort of deference to the assessor’s valuation. [Internal quotation marks omitted.]); Stamford Apartments Co. v. Stamford, 203 Conn. 586, 589, 525 A.2d 1327 (1987) (§ 12-118 tax appeal, but citing and quoting language from General Statutes § 12-119 cases, and indicating that “[the taxpayer’s] burden ... is a difficult one. . . . The law contemplates that a wide discretion is to be accorded to assessors, and unless their action is discriminatory or so unreasonable that property is substantially overvalued and thus injustice and illegality result, their opinion and judgment should control in the determination of value for taxation purposes. . . . [Nevertheless, although] we have recognized that proper deference should be accorded to the assessor’s valuation, we have never characterized such deference as a presumption in favor of the validity . . . .” [Citations omitted; emphasis added; internal quotation marks omitted.]); O’Brien v. Board of Tax Review, 169 Conn. 129, 130-31, 362 A.2d 914 (1975) (stating, as in Newbury Commons Ltd. Parinership, that “[m]ere overvaluation is sufficient to justify redress under § 12-118, and the court is not limited to a review of whether an assessment has been unreasonable or discriminatory or has resulted in substantial overvaluation. . . . [T]he court tries the matter *563de novo and the ultimate question is the ascertainment of the true and actual value of the applicant’s property.” [Citations omitted.]). The confusion in these cases is due in part to the intermingling of § 12-118 and § 12-119 standards. There is a substantial difference in the standard that a trial court must apply in a § 12-118 tax appeal versus the standard that must be applied in a § 12-119 tax appeal. See Second Stone Ridge Cooperative Corp. v. Bridgeport, 220 Conn. 335, 339-40, 597 A.2d 326 (1991) (comparing and contrasting standards for tax appeals under two different statutes).

Furthermore, with respect to fairness to the plaintiff, the standard should be clarified in this case. If, for example, we should adopt a “de novo” standard — that is, with no deference; see Newbury Commons Ltd. Partnership v. Stamford, supra, 226 Conn. 92; even the majority would be required to concede that this case must be remanded for a new trial.

“Here, there were many comparable land sales cited as a group by the assessor, but no sale was cited to substantiate the valuation of the plaintiffs property by the assessor. . . . The plaintiff in the present case could not show that the factors involved in the ‘broad comparable sales approach’ led to an excessive tax because no factors, except a general view that land values were rising, were described or enumerated in the assessor’s testimony.” Ireland v. Wethersfield, 41 Conn. App. 421, 426-27, 676 A.2d 422 (1996).

“ ‘Excerpts from the cross-examination of the defendant’s assessor follow:

“ ‘Q. Mr. Dagata, can you identify for this court one comparable that you relied upon in making this judgment?

“ ‘A. No, I can’t identify one. It takes a long explanation.

“ ‘Q. Okay. That’s fine. That’s what I kind of thought the result would be. Now, you indicated there was an increase in value in properties in 1985. You also testified you heard the testimony this morning of [Eric Sjostrom, the plaintiffs appraiser] that that market peaked in 1988. Do you agree with that?

“ ‘A. No.

“ ‘Q. And when do you think the market peaked?

“ ‘A. I did a month-by-mdnth study of all the sales in Wethersfield from the period of early 1988 through early 1990, and it peaked in March of 1989, to be exact.

' “ ‘Q. So it was going down when we get to October of 1989.

“ ‘A. It was pretty flat that summer. It just started the downward trend in the latter part near October of 1989, that’s correct.

“ ‘Q. And in those — in your experience, in looking at undeveloped land, when did that peak?

“ ‘A. I would say about the same time.

*565“ ‘Q. Do you have any records that would inform the court of that, that you’ve maintained, and you personally have indicated?

* * *

“ ‘A. . . . The valuation of the — base valuation of land in Wethersfield has remained pretty constant right through, you know, to September of 1990. And there are still residential subdivisions being built in Wethersfield.’

“The only other testimony of the [defendant’s] assessor as to the value of building lots in terms of comparables was as follows: ‘I’ve looked at each parcel as an individual parcel, whether or not [the plaintiff] owned all of them or anybody else owned all of them. They’re each individual parcels. We had lot sales in Wethersfield in that time period, even in lesser neighborhoods in excess of $130,000 each, and going up to $190,000 for a one-half acre lot in Wethersfield at [that] point in time.’

“On redirect examination, the defendant’s assessor testified as follows:

“ 'Q. Mr. Dagata, among the three recognized methods of appraisal, what method did you employ in evaluating Ireland Estates [the plaintiff’s real property] as of October, 1989?

“ ‘A. In a broad sense, we use the comparable sales approach.

“ ‘Q. All right. In what period did you look at for comparables?

“ ‘A. 1987, right up until mid 1989.

“ ‘Q. All right. And did you look at individual lot sales?

“ ‘A. Yes.

“ ‘Q. Did you do that because you were appraising individual lots?

“ ‘A. Yes.

“ ‘Q. If you can look, Mr. Dagata, at plaintiffs exhibit C, which, I believe, is in front of you, what’s the range of sizes of the lots that make up Ireland Esiates?

“ ‘A. Okay. They’re not indicated on here, but to the best of my recollection, they average around one-half acre, plus or minus, most of them plus. That would be on — I can give it to you exactly, because they’re on the property records.

“ ‘Q. Take a look at those, and I don’t need the exact for each one, but if you can give us an idea as to the size of these parcels.

“ ‘A. Okay. It looks like a range of one-half acre to eight tenths of an acre, some of them at, sixty-five hundredths and some of them at three quarters of an acre.

“ ‘Q. Now, Mr. Dagata, in your review of comparables and for purposes of evaluating Ireland Estates and other properties, how many land sales did you review for the period that you’ve described of lots in the one half an acre to eight, tenths of an acre range?’

“The plaintiff objected to this question and the defendant's eliciting of any further testimony from the assessor as to specific comparables. The defendant then withdrew the question.” Id., 427-28 n.5.

“The court, in sustaining the plaintiffs objection to any further testimony of the defendant’s assessor on redirect examination to expand on his statement on cross-examination that he could not identify one comparable in making his judgment as to value, noted as follows:

“ ‘The Court: The purpose of this hearing is to afford the court with enough information to make some determination on the value of the property as of October 1, 1989. And I’ve heard some testimony. I’m not prepared to review what I have heard until I’ve heal’d all of the evidence, and have had an opportunity to hear argument of counsel. But this case presents a substantial problem for the court. And being able to analyze and to determine what the factors are that go into making up the value of this case. You’re technically correct, [Robert Heagney, the plaintiffs counsel], that, from our strict procedural rules, that we have a direct examination, and then the cross-examination, and the redirect limited to the area of the cross. And the witness did not go into the comparables on direct examination. And, I gather, [Kerry Callahan, the defendant’s counsel] is now seeking to have him go into those comparables. It seems that comparables, whether they come in from the plaintiffs appraiser, or the defendant’s appraiser, are certainly factors for the court to consider. But we do have certain rules and procedure[s]. So if you raise as an objection, I will sustain the objection.”

“ ‘Mr. Callahan: Well, Your Honor, if I may be heard on the objection.

“ ‘The Court: Yes.

“ ‘Mr. Callahan: Well, I think what happened on direct is I did ask Mr. Dagata how these properties were evaluated. On cross, Mr. Heagney attacked the way in which Mr. Dagata valued the properties. What I am attempting to do now is, you know, discuss that issue. As an offer of proof, you know, Mr. Heagney attempted to cast the shadow of a doubt over Mr. Dagata’s evaluation, because he couldn’t name the comparables. What I’m trying to demonstrate to Your Honor, as the finder of facts, as an offer of proof, what he did.

“ ‘The Court: Well, but I do recall, at least on the direct examination, the witness did not go into the comparables. And my memory doesn’t serve me that well, but it seems to me that there were — in the reevaluation, that wasn’t necessarily the assessor that did the field work, and I’m not sure that — well, he did not testify to specific comparables, and now it’s coming out ....’” (Emphasis added.) Ireland v. Wethersfield, supra, 41 Conn. App. 429 n.6.

See footnote 3 of this opinion.