Appeal of Net Realty Holding Trust, 86-009

• Decision Date: 08 December 1986
• Docket Number: No. 86-009,86-009
• Citation: 519 A.2d 313,128 N.H. 795
• Parties: Appeal of NET REALTY HOLDING TRUST (New Hampshire Board of Tax and Land Appeals).
• Court: New Hampshire Supreme Court

Page 313

519 A.2d 313

128 N.H. 795

Appeal of NET REALTY HOLDING TRUST (New Hampshire Board of Tax and Land Appeals).

No. 86-009.

Supreme Court of New Hampshire.

Dec. 8, 1986.

Wiggin & Nourie, Manchester (Edward L. Cross, Jr., on the brief and orally), for plaintiff.

Shaheen, Cappiello, Stein & Gordon P.A., Dover (Dorothy M. Bickford on the brief and orally), for defendant, the City of Somersworth.

SOUTER, Justice.

The plaintiff taxpayer brings this appeal under RSA 541:6 and RSA 76:16-a, V (Supp.1986) from an order of the New Hampshire Board of Tax and Land Appeals denying an abatement of tax on a Somersworth shopping center for the tax year 1982. The taxpayer claims that the board committed five errors: in failing to accord adequate significance to a judgment of the superior court requiring abatements of taxes on the same property for the two prior years; in failing to assign adequate weight to the income method of valuation; in erroneously rejecting the taxpayer's appraisal evidence prepared in reliance upon that method; in ruling against the weight of the evidence; and in failing to support its decision with adequate findings of fact. We find no merit in these assignments of error and affirm.

The property in question comprises a strip-type shopping center and three separate commercial buildings situated on nineteen acres of land, all of which the taxpayer bought in 1974 for $2,025,000. In response to earlier petitions under RSA 76:17 (Supp.1986) seeking abatements of taxes for the tax years 1980 and 1981, the superior court ordered relief after finding that the fair market value of the property was $1,661,854 in 1980, and $1,783,403 in 1981. While that proceeding was pending, the defendant employed an independent firm to do a general reappraisal throughout the city, which resulted in a valuation of the property at $2,643,300 for the tax year 1982. The taxpayer disputed this figure, and when the city assessors refused to abate the resulting tax under RSA 76:16, the taxpayer sought relief, not from the superior court under RSA 76:17 (Supp.1986) as in the earlier cases, but from the board of tax and land appeals under RSA 76:16-a (Supp.1986).

Because of the general reappraisal, the parties stipulated that property in Somersworth for the tax year 1982 was appraised at one hundred percent of fair market value. Therefore, in order to obtain relief on the ground that its property was assessed "at a higher percentage of fair market value than the percentage at which property [was] generally assessed in the [city]," Appeal of Town of Sunapee, 126 N.H. 214, 217, 489 A.2d 153, 155 (1985), the taxpayer had the burden to prove that the city's valuation exceeded fair market value.

In its effort to carry this burden, the taxpayer presented the testimony of an expert appraiser who had valued the property using the capitalization of income method. The board also had before it four other appraisal reports, two of them likewise based upon the income method, and two reflecting the cost approach to valuation.

The board first denied relief by an order that was later vacated by this court because the board had purported to act without a quorum. Appeal of Net Realty Holding Trust, 127 N.H. 276, 497 A.2d 865 (1985). On remand, a quorum of the board considered the case on the original record, see Appeal of Seacoast Anti-Pollution League, 125 N.H. 708, 716, 490 A.2d 1329, 1335-36 (1984); RSA 541-A:19 (Supp.1986), and when the board again ruled against the taxpayer, this appeal followed.

As its first issue, the taxpayer claims that the board erred in its treatment of the legal significance of the superior court judgment ordering partial abatements for the two prior tax years, 1980 and 1981. Although the board received the record of the superior court's judgment into evidence and likewise admitted the master's report on which the judgment was based, the board stated in its opinion that it "determined not to give ... great weight [to the earlier decision] due to errors in the court's calculations and methodology." While the taxpayer believes that such treatment of the earlier judgment and findings was somehow mistaken, the taxpayer's several attempts to formulate its position suggest how elusive the exact nature of the supposed error really is.

To begin with, we find no plausible ground even to allege error when we consider the argument of the taxpayer's counsel before the board. There, counsel first argued that "the prior findings of the Superior Court certainly deserve to be considered ... with respect to the issue of the appropriate fair market value to be applied to this property." This, as we read the record, is exactly what the board did.

The taxpayer suggests a second formulation of the issue when it argues in its brief that the board's decision "has the effect of increasing the fair market value of the subject property in one year's time by almost one million dollars, even though no additions, alterations or improvements were made to the property ... [,] a result ... at odds with both common sense and economic reality." This statement will not do, however. No one pretends that there was any such increase in market value from April 1, 1981, to April 1, 1982. The board simply decided that the superior court's valuations for the earlier years were wrong and that the taxpayer had not proven that the city's assessment of its property for 1982 was disproportionate.

The taxpayer states a third position when it argues in its brief that "the board erred when it ruled that it was not bound by the ... superior court's finding as to the value of the ... property in 1980 and 1981," a position which the taxpayer raised when its counsel argued before the board that it would be "improper" to "relitigate" the superior court's decision. As we understand this argument, the taxpayer means to assert two related propositions: first, that each party to the superior court's earlier determinations of fair market value for 1980 and 1981 must accept those determinations as conclusive for those respective years; and second, that in a later proceeding the value for 1982 could be found to differ from the value in 1981 only to the extent that the evidence established intervening changes in the factors that determine such value. Because it may be assumed that no evidence in this case justified finding an $859,897 increase in value, it would follow from this argument that the city's 1982 assessment was disproportionate.

By the first proposition the taxpayer seeks to apply the principle of collateral estoppel to bar the defendant from relitigating in a later proceeding a fact that the defendant actually litigated in the earlier action. See Caouette v. Town of New Ipswich 125 N.H. 547, 554, 484 A.2d 1106, 1111-12 (1984). By the second proposition, however, the taxpayer would carry the traditional collateral estoppel rule one step further, to bar a fact finder in a later proceeding from reaching a conclusion inconsistent with a relevant evidentiary fact as determined in the earlier proceeding. In urging us to adopt these legal propositions, however, the taxpayer runs up against Appeal of Public Service Co. of New Hampshire, 120 N.H. 830, 424 A.2d 197 (1980). There we held that in a later proceeding in which the value of property may be in issue, the judgment in an earlier tax appeal does not conclusively establish the value of that property at the earlier date, even as between the parties to the earlier appeal. Id. at 832, 424 A.2d at 198.

While the taxpayer has not overlooked Public Service, it attempts to distinguish the case on the ground that the earlier proceeding considered in that case had determined only that the earlier year's assessment was not disproportionate, whereas the earlier proceeding considered in the present case did find disproportionality, which it predicated on a specific finding of fair market value. The taxpayer thus argues that the earlier proceeding in Public Service raised no estoppel or preclusion bearing on the issue of value because it never determined specifically what the value of the property was. In this case the superior court did reach a specific finding of value which, the taxpayer submits, should be given preclusive effect to the extent of its later relevance. See Lethin v. Dept. of Revenue, 278 Or. 201, 205-06, 563 P.2d 687, 689-90 (1977).

The distinction is foreclosed, however, by the reasoning in Public Service. This court did not hold that there was no later preclusion because there had been no earlier specific finding; it held there was no preclusion because any earlier finding of value in a tax abatement case is not a finding on a matter in issue, i.e., disproportionality, but rather on a matter merely in evidence, e.g., fair market value, as to which there is no issue preclusion under the traditional concept of collateral estoppel. Public Service, supra at 833, 424 A.2d at 199. This reasoning was underscored by the court's reliance on Winnipiseogee, etc., Co. v. Laconia, 74 N.H. 82, 85, 65 A. 378, 380 (1906), where a finding of specific value in an earlier tax abatement proceeding was held to lack any conclusive force as between the same parties in an abatement proceeding covering a later year. The taxpayer can not prevail on this issue, therefore, unless we overrule Public Service, which we are not about to do.

We are aware, to be sure, of the criticism that has been directed to the distinction between matters in issue and matters in evidence, for purposes of applying the rule of collateral estoppel. See Restatement (Second) of Judgments § 27, comment j at 260-61 (1982). The taxpayer has not argued that we should discard this distinction, however. And even if we were to abandon it, we would continue to follow the rule that a determination of value under an earlier abatement petition does not bind the parties even as to the value in the earlier year, in a later abatement proceeding as to a...