Alexander v. Town of Barton

• Decision Date: 09 June 1989
• Docket Number: No. 87-477,87-477
• Citation: 152 Vt. 148,565 A.2d 1294
• Court: Vermont Supreme Court
• Parties: Richard and Lorraine ALEXANDER v. TOWN OF BARTON.

Page 1294

565 A.2d 1294

152 Vt. 148

Richard and Lorraine ALEXANDER v. TOWN OF BARTON.

No. 87-477.

Supreme Court of Vermont.

June 9, 1989.

Motion for Reargument Denied July 19, 1989.

Gensburg Axelrod & Adler, St. Johnsbury, for plaintiffs-appellees.

May, Davies & Franco, Barton, for defendant-appellant.

Before ALLEN, C.J., and PECK, GIBSON, DOOLEY and MORSE, JJ.

DOOLEY, Justice.

The Town of Barton (Town) appeals from an adverse decision of the State Board of Appraisers (Board). The Board found that the Town's reappraisal method violates chapter I, article 9 of the Vermont Constitution. We reverse and remand.

I. Facts

Lorraine and Richard Alexander own a camp on the east shore of Crystal Lake in Barton. The Alexanders' property, along with all other vacation properties of six acres or less, was reappraised on April 1, 1987. No other classes of property were reappraised. The reappraisal resulted in increasing the listed value of the Alexanders' property to $19,200 from $15,200.

The Alexanders appealed the appraisal to the Board of Listers pursuant to 32 V.S.A. § 4221, but no change was made in the assessment. They then appealed to the Board of Civil Authority (BCA) pursuant to 32 V.S.A. § 4404(a). The BCA increased the appraisal made by the listers to $23,500 because it found that the listers did not use the proper depreciation factor. The Alexanders chose to appeal the BCA decision to the Director of the Division of Property Valuation and Review pursuant to 32 V.S.A. § 4461(a), who referred the appeal to a State Board of Appraisers assembled for the case. See 32 V.S.A. § 4465.

Before the Board, the Alexanders challenged the selective reappraisal, arguing that it violated chapter I, article 9 of the Vermont Constitution. They did not contend that their property was not listed at fair market value; in fact, they admitted this. In support of its valuation, the Town offered evidence of its "rolling reappraisal" method. Every two years (now every year), the Town receives a report from the State Tax Department showing the extent to which classes of property in the Town are being assessed at less than fair market value. Based on this report, the Town then reassesses the class of property determined to be the most in need--i.e., where on average the listed value of properties within the class is the lowest percentage of fair market value. For the tax year 1987, the class selected was "vacation (V-1)" for which the state study showed that listed values were in the aggregate only at 51.70% of fair market value. ^* For the following year, the class selected was "commercial" because the state study showed that such properties were in the aggregate listed at only 53.33% of fair market value.

The Board, pursuant to 32 V.S.A. §§ 4461(a) and 4467, heard the Alexanders' appeal and found that:

when a town reappraises some categories of property for a certain Grand List date and does not reappraise all other properties for the same date, it does not meet the requirement [of Vt. Const., ch. I, art. 9] that all property in a town be assessed at a uniform rate.

The Board concluded that:

it would be inappropriate to place [the Alexanders' property] in the Grand List in accordance with [32 V.S.A. § 4467] at a value corresponding to comparable properties as this would only continue the inequity between Subject and properties in other classification categories that were not reappraised as of April 1, 1987. Because this assessment was caused by an error in reappraisal procedure, the [Alexanders'] property should be set in the Grand List at the April 1, 1986 value as provided in [32 V.S.A. § 4404(c) ].

It is from this decision that the Town of Barton appeals.

II. Issues

The Town makes four arguments on appeal: (1) the Board lacked jurisdiction to rule on the constitutionality of the method used by the Town to reappraise property; (2) the Board erred in failing to dispose of this case before reaching the question of the constitutionality of the Town's appraisal methods; (3) the Board committed error in applying chapter 1, article 9 of the Vermont Constitution to this case; and (4) the Board did not have the authority to set the value of the Alexanders' property under 32 V.S.A. § 4404. Although we find that the Board's order goes beyond its authority under its governing statute, 32 V.S.A. § 4467, we reach the merits and conclude that the Town's appraisal procedure meets state and federal constitutional requirements.

III. The Board's Jurisdiction

The Town's argument that the Board lacks the power to adjudicate constitutional questions goes too far. Our recent case of Westover v. Village of Barton Electric Dept., 149 Vt. 356, 543 A.2d 698 (1988), holds that administrative agencies have no power to determine the constitutional validity of statutes. Id. at 359, 543 A.2d at 699. This case, however, and others like it, put the Board in the position of judging the constitutionality of a listing practice pursuant to a statute, 32 V.S.A. § 4467, that specifically requires the Board to "take into account" the applicable provisions of the United States and Vermont Constitution. Professor Davis notes that a

fundamental distinction must be recognized between constitutional applicability of legislation to particular facts and constitutionality of the legislation. When a tribunal passes upon constitutional applicability, it is carrying out the legislative intent, either express or implied or presumed. When a tribunal passes upon constitutionality of the legislation, the question is whether it shall take action which runs counter to the legislative intent. We commit to administrative agencies the power to determine constitutional applicability, but we do not commit to administrative agencies the power to determine constitutionality of legislation. Only the courts have authority to take action which runs counter to the expressed will of the legislative body.

3 K. Davis, Administrative Law Treatise § 20.04, at 74 (1958); see also K. Davis, 1982 Supplement to Administrative Law Treatise § 20.14, at 287 (1982) (agencies must often "locate the boundaries of statutory requirements by taking into account ideas based on constitutional limitations"). Here, the Legislature clearly intended that the Board would adjudicate constitutional questions in determining the validity of town appraisals.

Although it goes too far to say that the Board cannot adjudicate constitutional questions, there are specific statutory limits on the Board's power that restrict its ability to act in this case. A historical perspective is helpful to understanding those limits.

Prior to 1970, property tax appeals went to county boards of appraisers with limited powers. See V.S.1947, §§ 786-787. In a line of cases commencing with In re Town of Essex, 125 Vt. 170, 173, 212 A.2d 623, 627 (1965), this Court emphasized the narrowness of the power of the county boards. See also Town of Pawlet v. Witherspoon, 128 Vt. 120, 128-29, 259 A.2d 15, 20 (1969); In re Town of Mendon, 127 Vt. 502, 506, 253 A.2d 139, 141 (1969); In re Mallary, 127 Vt. 412, 418, 250 A.2d 837, 840-41 (1969). In re Town of Essex established the rule that the boards could look only at whether the property involved in the appeal was appraised at fair market value. Thus, it was not within the boards' jurisdiction to look at whether other properties in the town were appraised at less than fair market value. See 125 Vt. at 173, 212 A.2d at 627. The rule was stated in In re Mallary, 127 Vt. at 418, 250 A.2d at 840-41, as follows:

The appeal to the county board brings to them for consideration only the property of the taxpayer whose list is involved and described in the appeal.

[T]he question before the county board did not concern the question of the uniformity of property appraisals within the (Citations omitted.) The opinion did recognize that the board must consider and make comparisons with other similar property in the general area to determine the validity of the appraisal before it. Id. at 418, 250 A.2d at 841. In In re Town of Mendon, 127 Vt. at 506, 253 A.2d at 141, and Town of Pawlet v. Witherspoon, 128 Vt. at 128-29, 259 A.2d at 20, we reemphasized that the question of unequal taxation in a town could not be raised in tax appeals before the boards.

entire Town of Fairlee.... [W]hether there is uniformity in taxes or property appraisals as required by law is not a subject matter within the jurisdiction, or for the determination, of the county board of appraisers. Instead, it is for the courts to decide in appropriate proceedings.

It is apparent from the above line of cases that limitations in the tax appeal process imposed by this Court's decisions made the process unworkable. The problem in most of the cases was that towns were generally not appraising at fair market value. Thus, as was specifically held in In re Town of Mendon, the board could set a new fair market value but could not reduce it to reflect the actual listing percentages being used in the town. It was possible, if not likely, that a taxpayer who prevailed before the county board in establishing a desirable fair market value for the property would actually pay a higher tax because he would be listed at 100% of fair market value when other properties were listed at only a percentage of fair market value.

To respond at least in part to this deficiency in the property tax appeal process, the Legislature reformed it by adopting 32 V.S.A. § 4467. This statute provides:

Upon the appeal to the state board of appraisers or the court, the board or court shall proceed de novo and determine the correct valuation of the property as promptly as practicable. The state board or court shall take into account the requirements of law as to valuation, and the provisions of Chapter I, Article 9 of the Constitution of Vermont and the 14th Amendment to the Constitution of the United States. If the board or court finds that the listed value of the...