Carol Management Corp. v. Board of Tax Review of Town of Greenwich

• Decision Date: 23 November 1993
• Docket Number: No. 14726,14726
• Citation: 633 A.2d 1368,228 Conn. 23
• Court: Connecticut Supreme Court
• Parties: CAROL MANAGEMENT CORPORATION v. BOARD OF TAX REVIEW OF the TOWN OF GREENWICH.

Page 1368

633 A.2d 1368

228 Conn. 23

CAROL MANAGEMENT CORPORATION v. BOARD OF TAX REVIEW OF the TOWN OF GREENWICH.

No. 14726.

Supreme Court of Connecticut.

Argued Sept. 30.

Decided Nov. 23, 1993.

Eugene F. McLaughlin, Jr., Asst. Town Atty., for appellant (defendant).

John Wayne Fox, Stamford, for appellee (plaintiff).

Before PETERS, C.J., and CALLAHAN, BERDON, KATZ and PALMER, JJ.

KATZ, Associate Justice.

The principal issues in this tax appeal are: (1) whether the appeal by the plaintiff, Carol Management Corporation, from the decision of the defendant, the Greenwich board of tax review, pursuant to General Statutes (Rev. to 1987) § 12-118 ¹ is collaterally estopped by an earlier action brought by the plaintiff pursuant to General Statutes § 12-119; ² and (2) whether the trial court incorrectly determined, contrary to the decision of the defendant, that the plaintiff's property had been overvalued by the tax assessor of the town of Greenwich. We answer both of these questions in the negative and affirm the judgment of the trial court.

The following facts are undisputed. The plaintiff's property, located at 25 West Elm Street in Greenwich, is a six-story brick apartment building containing fifty-three units of living space and garage space for thirteen vehicles. On October 1, 1979, in connection with a decennial revaluation mandated by General Statutes (Rev. to 1979) § 12-62, ³ the Greenwich tax assessor determined that the fair market value of the property was $3,296,300. This translated into an assessed value of $2,307,410 ($742,000 for the land and $1,565,410 for the building). ⁴

In 1983, the plaintiff ⁵ filed a two count complaint in the Superior Court challenging the assessment. In the first count, the plaintiff sought relief under § 12-118 from its 1979, 1980 and 1981 tax assessments. In the second count, the plaintiff claimed, pursuant to § 12-119, that the assessments were "manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of such property...." The trial court, Hon. Raymond J. Devlin, state trial referee, rendered judgment for the defendant on both counts. As to the first count, the court found that the plaintiff had not challenged the assessment before the defendant pursuant to General Statutes § 12-111. ⁶ Because a party may only appeal under § 12-118 from the action of a board of tax review, and the plaintiff's claim had never come before the defendant, the court rendered judgment for the defendant. With regard to the second count, the court found that the plaintiff had not met its burden of proof under § 12-119 and rendered judgment for the defendant on the merits. ⁷

In 1985, the plaintiff appealed the 1984 assessment of its property to the defendant pursuant to § 12-111. The defendant refused to grant relief. The plaintiff then filed a complaint in the Superior Court pursuant to § 12-118 challenging the defendant's denial of relief. In 1986, the plaintiff amended its complaint to include a challenge to the 1985 and 1986 assessments of its property, and to add a second count directly challenging the assessments of its property pursuant to § 12-119. ⁸ The defendant answered the complaint and raised the special defense of res judicata.

In an October 12, 1988 motion for summary judgment, the defendant claimed that the 1984 decision by Judge Devlin on the § 12-119 claim precluded the plaintiff's § 12-118 appeal under principles of collateral estoppel. On January 6, 1989, the court, Ryan, J., rejected the defendant's collateral estoppel argument because of the "distinction in the standard of review between § 12-118 and § 12-119." The court therefore denied the defendant's motion for summary judgment as to the first count of the plaintiff's complaint. ⁹ The defendant subsequently amended its answer to assert collateral estoppel as a special defense to the plaintiff's § 12-118 appeal.

After trial, the court, Lewis, J., rendered judgment for the plaintiff on its § 12-118 appeal. In its November 13, 1992 memorandum of decision, the trial court also rejected the defendant's collateral estoppel defense because of "the vast difference between § [12-118] appeals and § [12-119] law suits." ¹⁰ In addressing the merits of the plaintiff's claim, the court found that there was no reasonable probability that the plaintiff's building would be converted to condominium use, and concluded, therefore, contrary to the claim of the defendant's appraiser, that the highest and best use of the plaintiff's property was its actual use as rental apartments. The court also found that the comparable sales method, the preferred method for valuing rental property under General Statutes § 12-63b, ¹¹ was the proper method of appraisal. The court accepted the opinion of the plaintiff's appraiser that the fair market value ¹² of the property was $2,400,000, rather than $3,296,300. The plaintiff's appraiser arrived at this figure by comparing the plaintiff's property with three similar apartment houses that were sold in 1981. ¹³ The court rejected the claim of the defendant's appraiser that the capitalization of income approach was the most appropriate method of valuation. The court held that the plaintiff was entitled to a refund or credit for any excess payments made to the town of Greenwich for the 1984 and subsequent tax years.

The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). The defendant claims that: (1) the plaintiff's § 12-118 appeal should have been barred because Judge Devlin's 1984 decision pursuant to § 12-119 "collaterally encompassed the criteria for determining fair market value under § 12-118"; (2) the trial court improperly rejected the cost of replacement approach used by the Greenwich tax assessor to value the plaintiff's property; (3) the trial court incorrectly determined that conversion to condominiums was not the highest and best use of the plaintiff's property; and (4) the trial court's reliance on the report and testimony of the plaintiff's appraiser was clearly erroneous because that evidence conflicted with testimony given by the same appraiser in an earlier case. We reject all of these claims.

I

Because the defendant's collateral estoppel claim, if valid, would dispose of this appeal, we consider it first. The defendant claims that the trial court incorrectly determined that the plaintiff's appeal under § 12-118 was not collaterally estopped by Judge Devlin's earlier judgment under § 12-119. We disagree.

In Second Stone Ridge Cooperative Corp. v. Bridgeport, 220 Conn. 335, 339-40, 597 A.2d 326 (1991), we distinguished appeals brought pursuant to §§ 12-111 and 12-118 from direct actions brought pursuant to § 12-119. Sections 12-111 and 12-118 " 'provide a method by which an owner of property may directly call in question the valuation placed by assessors upon his property by an appeal to the board of [tax review for] relief, and from it to the courts.... These statutes limit to a short period the time within which the property owner can seek relief under them, and the purpose of this is undoubtedly to prevent delays in the ultimate determination of the amounts a municipality can collect as taxes.' " Cohn v. Hartford, 130 Conn. 699, 702, 37 A.2d 237 (1944).

"On the other hand, § 12-119 allows a taxpayer one year to bring a claim that the tax was imposed by a town that had no authority to tax the subject property, or that the assessment was 'manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of [the real] property....' (Emphasis added.) Our case law makes clear that a claim that an assessment is 'excessive' is not enough to support an action under this statute. Instead, § 12-119 requires an allegation that something more than mere valuation is at issue. It is this element that distinguishes § 12-119 from its more frequently invoked companion, § 12-118." Second Stone Ridge Cooperative Corp. v. Bridgeport, supra; see also Wilson v. Kelley, 224 Conn. 110, 118, 617 A.2d 433 (1992).

The defendant acknowledges the distinctions between the two statutes and concedes that Judge Devlin in the 1984 case dismissed the plaintiff's § 12-118 appeal without reaching its merits. The defendant nevertheless argues that in deciding the merits of the plaintiff's § 12-119 claim, Judge Devlin did not limit his consideration to whether the assessment was manifestly excessive or arrived at in disregard of the statutory provisions governing property valuation; rather, he employed the standard of review applicable to § 12-118 appeals and considered whether the plaintiff's property had been substantially overvalued. Specifically, the defendant asserts that Judge Devlin's comments on the "wide variance in the appraisal figure[s] submitted," and on his power to accept so much of the testimony of the appraisal experts as he found reasonable, indicate that he was considering issues beyond what is required for a § 12-119 claim. According to the defendant, these comments, coupled with citations to cases decided under § 12-118, demonstrate that Judge Devlin did not narrowly confine his consideration to whether there was misfeasance or nonfeasance by the taxing authority, or whether the assessment was arbitrary or so excessive or discriminatory as to demonstrate a disregard of duty by the assessors. The defendant claims that in deciding whether the assessment was manifestly excessive, Judge Devlin applied the rule of valuation from § 12-63, which applies to § 12-118 appeals as well as § 12-119 actions, and determined whether the assessment reflected the fair market value of the property. The defendant accordingly asserts that because Judge Devlin, in resolving the § 12-119 claim, incidentally...