Angell Family 2012 Prouts Neck Trust v. Town of Scarborough

• Decision Date: 16 February 2015
• Docket Number: Docket No. BCD-CV-14-59
• Parties: ANGELL FAMILY 2012 PROUTS NECK TRUST et als., Plaintiffs-Appellants, v. TOWN OF SCARBOROUGH et al., Defendants-Appellees KENYON C. BOLTON, III, et als., Plaintiffs-Appellants, v. TOWN OF SCARBOROUGH et al. Defendants-Appellants
• Court: Maine Superior Court

ANGELL FAMILY 2012 PROUTS NECK TRUST et als., Plaintiffs-Appellants, v. TOWN OF SCARBOROUGH et al., Defendants-AppelleesKENYON C. BOLTON, III, et als., Plaintiffs-Appellants, v. TOWN OF SCARBOROUGH et al. Defendants-Appellants

Docket No. BCD-CV-14-59

Superior Court of Maine

Entered: February 18, 2015

February 16, 2015

STATE OF MAINE

Cumberland, ss.

BUSINESS AND CONSUMER COURT

DECISION AND JUDGMENT

Pursuant to M.R. Civ. P. 80B, the Appellants in these consolidated cases¹ appeal the decision of the Town of Scarborough Board of Assessment Review ("Board"), denying Appellants' requests for tax abatements, following the Town's 2012 partial property tax revaluation of some, but not all, waterfront and water-influenced properties in Scarborough.

Appellants in their Joint Rule 80B Brief argue the Board's decision must be reversed for four reasons:

1) The Assessor selectively targeted waterfront property in three neighborhoods for a substantial increase in valuation, while allowing waterfront property in asimilarly situated neighborhood (Piper Shores) to avoid any increase in valuation.

2) The Assessor arbitrarily exempted certain waterfront properties from the increase in valuation.

3) The Assessor gave huge tax breaks to "excess land" properties, impermissible under Maine law.

4) The Assessor's increase in valuation at Prouts Neck was based on unqualified sales.

Appellants' Joint Rule 80B Brief at 5.

For the reasons set forth below, the court affirms the Board's decision, denies the appeal, and grants judgment to the Appellees.

I. FACTUAL BACKGROUND

Appellant taxpayers own properties on or near the Atlantic Ocean, in the Prouts Neck neighborhood of Scarborough. (R. 2.) In 2012, after analyzing sales data, Scarborough Assessor Paul Lesperance increased the assessment of properties in the Prouts Neck neighborhood by 14.3 percent. (R. 647-50.) The assessed value of other properties in the Town of Scarborough decreased or remained the same. Before 2012, the last town-wide revaluation took place in 2005. (R. 588.) Appellants appealed the increased assessments on their properties to the Board, which consolidated the appeals, held hearings, and unanimously denied the appeals. (R. 6.)

II. STANDARDS OF REVIEW

1. Rule 80B

In a Rule 80B appeal, the Superior Court reviews the findings made by the municipal decision maker to determine whether those findings were based upon an "erroneous interpretation of the law" or based upon conclusions of fact not "supported by substantial evidence on the record as a whole." Bruk v. Town of Georgetown, 436 A.2d 894, 897 (Me. 1981)."Substantial evidence is evidence that a reasonable mind would accept as sufficient to support a conclusion." York v. Town of Ogunquit, 2001 ME 53, ¶ 6, 769 A.2d 172 (quoting Sproul v. Town of Boothbay Harbor, 2000 ME 30, ¶ 6, 746 A.2d 368). "The Court must affirm the decision of the [Board] unless that decision was unlawful, arbitrary, capricious, or unreasonable." Driscoll v. Gheewalla, 441 A.2d 1025, 1026 (Me. 1982). Procedural unfairness is reversible error and a "decision can be 'arbitrary and capricious' if it was not the product of the requisite processes." Hopkins v. Dep't of Human Servs., 2002 ME 129, ¶ 12, 802 A.2d 999 (citations omitted). "That the record contains evidence inconsistent with the result, or that inconsistent conclusions could be drawn from the evidence, does not render the [Board's] findings invalid if a reasonable mind might accept the relevant evidence as adequate to support the [Board's] conclusion." Town of Vienna v. Kokernak, 612 A.2d 870, 872 (Me. 1992). The party seeking to overturn the decision bears the burden of persuasion on appeal. Town of Sw. Harbor v. Harwood, 2000 ME 213, ¶ 6, 763 A.2d 115 (citing Sawyer Envtl. Recovery Facilities, Inc. v. Town of Hampden, 2000 ME 179, ¶ 13, 760 A.2d 257).

2. Municipal Tax Assessments

With respect to judicial review of municipal tax assessments specifically, a court presumes tax assessments are valid. Ram's Head Partners, LLC v. Town of Cape Elizabeth, 2003 ME 131, ¶ 9, 834 A.2d 916. "A taxpayer who seeks a tax abatement must prove that the assessed valuation is 'manifestly wrong.'" Terfloth v. Town of Scarborough, 2014 ME 57, ¶ 12, 90 A.3d 1131. A taxpayer can prove an assessment is manifestly wrong by showing:

1) the judgment of the assessor was irrational or so unreasonable in light of the circumstances that the property was substantially overvalued and an injustice resulted;

2) there was unjust discrimination; or

3) the assessment was fraudulent, dishonest, or illegal.

Yusem v. Town of Raymond, 2001 ME 61, ¶ 9, 769 A.2d 865.

"The constitutional requirement [for tax assessments] is the seasonable attainment of a rough equality in tax treatment of similarly situated property owners."² Ram's Head Partners, LLC v. Town of Cape Elizabeth, 2003 ME 131, ¶ 10, 834 A.2d 916. "Neither the constitution nor the statutes expect that a Board of Assessors could make an assessment with all values so exact that no 'expert' could disagree with them." Sears, Roebuck & Co. v. Inhabitants of City of Presque Isle, 150 Me. 181, 189, 107 A.2d 475, 480 (1954). Appellants in this case contend that the Town's assessment was manifestly wrong in that it unjustly discriminated against owners of waterfront and water-influenced properties. As mentioned above, the court will vacate the Board's decision denying tax abatement "only if the record compels a contrary conclusion to the exclusion of any other inference." Terfloth v. Town of Scarborough, 2014 ME 57, 13, 90 A.3d 1131.

"Taxpayers can prove discrimination only if they show that the assessor's system necessarily results in unequal apportionment." Ram's Head, 2003 ME 131, ¶ 10, 834 A.2d 916 (citing City of Biddeford v. Adams, 1999 ME 49, ¶ 14, 727 A.2d 346.) "The undervaluation of one set of similarly situated properties can support a finding of unjust discrimination, even when there is no undervaluation of the general mass of property." Id. ¶ 11. On the other hand, "some specific instances here and there" of undervaluation, "[s]poradic differences in valuations," or "mere errors of judgment on the part of the assessors" do not necessarily establish unjust discrimination. Id. (citing Kittery Elec. Light Co., 219 A.2d 728, 740 (Me. 1966); Sunday Lake Iron Co. v. Township of Wakefield, 247 U.S. 350, 353 (1918) ("[M]ere errors ofjudgment by officials will not support a claim of discrimination. There must be something more-something which in effect amounts to an intentional violation of the essential principle of practical uniformity.").

Because the Board concluded that the Appellants failed to meet their burden of proof, this Court will vacate the Board's decision denying tax abatement "only if the record compels a contrary conclusion to the exclusion of any other inference." Terfloth, 2014 ME 57, ¶ 1S, 90 A.Sd 1131.

III. DISCUSSION

The legal backdrop for the analysis was summarized by the Law Court in Weekley v. Town of Scarborough:

The Maine Constitution requires that "[a]ll taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof." Me. Const. art. IX, § 8. "Just value" means market value. Alfred J. Sweet, Inc. v. City of Auburn, 134 Me. 28, 31, 180 A. 803 (1935). "The sale price of property is evidence of market value, which is used in determining property value for tax assessment purposes." Wesson v. Town of Bremen, 667 A.2d 596, 599 n. 5 (Me. 1995). See also Shawmut Inn v. Town of Kennebunkport, 428 A.2d 384, 394-95 (Me. 1981) ("market value" is "the price a willing buyer would pay a willing seller at a fair public sale ... in a free and open market."); Arnold v. Maine State Highway Comm'n, 283 A.2d 655, 658 (Me. 1971) ("evidence of what the property sold for in a bona fide sale is most significant.") (citation omitted).

676 A.2d 932, 934 (Me. 1996).

In these consolidated cases, the Appellants argue that, if the Town's partial revaluation of 2012 was to focus on water-influenced properties,³ the Piper Shores neighborhood should have been revalued. They also argue that certain Prouts Neck properties should have been included in the revaluation rather than exempted, and that the increase for Prouts Neck was based on old sales that should not have been considered. In addition, they contend that the Town's "excess land" program is discriminatory.

A threshold question raised in these cases as well as in Petrin v. Town of Scarborough, another case before this court challenging the same revaluation, brought by property owners in the other water-influenced neighborhoods included in the revaluation, is whether the revaluation's focus on waterfront and water-influenced properties unjustly discriminated against the owners of waterfront and water-influenced residential properties generally.

That issue is discussed at length in the court's decision of this date in Petrin, but also merits some discussion here, given that it is raised in several of the Appellants' arguments in this case.

1. Whether the Assessor's Decision to Focus the Revaluation on Water-Influenced Properties and to Exclude Interior Properties Unjustly Discriminated Against Owners of the Revalued Properties

By statute, municipalities are required to maintain property assessments within a range of assessment ratios (ratio of assessed value to market value)—a minimum of 70% and a maximum of 110%. See 36 M.R.S. § .327(1). Thus, ongoing review and adjustment of assessments are necessary to assure that appropriate assessment ratios and, ultimately, equal apportionment of the overall tax burden, are maintained.

The Law Court has noted that, although "[t]ownwide revaluations are perhaps the best method of maintaining equal apportionment of the tax burden . . . assessors are not precluded from undertaking adjustments designed to maintain equal distribution of the tax burden in the time period between townwide revaluations." Moser v. Town of...