HARVARD PILGRIM HEALTH CARE v. Rossi

• Decision Date: 06 May 2004
• Docket Number: No. 2003-170-Appeal.,2003-170-Appeal.
• Citation: 847 A.2d 286
• Parties: HARVARD PILGRIM HEALTH CARE OF NEW ENGLAND, INC. v. Thomas ROSSI, in his capacity as Tax Assessor of the City of Providence.
• Court: Rhode Island Supreme Court

847 A.2d 286

HARVARD PILGRIM HEALTH CARE OF NEW ENGLAND, INC. v. Thomas ROSSI, in his capacity as Tax Assessor of the City of Providence.

No. 2003-170-Appeal.

Supreme Court of Rhode Island.

May 6, 2004.

Richard J. Welch, for Plaintiff.

Caroline Cole Cornwell, Providence, for Defendant.

Present: WILLIAMS, C.J., FLANDERS, GOLDBERG, FLAHERTY, and SUTTELL, JJ.

OPINION

PER CURIAM.

The City of Providence (the city or defendant) appeals from a Superior Court judgment awarding Harvard Pilgrim Health Care (Harvard Pilgrim or plaintiff) $484,907.46, plus $93,580.49 in interest and costs, for overassessing taxes on its ratable, tangible personal property for tax year 2000. This case came before the Supreme Court for oral argument pursuant to an order directing the parties to show cause why the issues raised on appeal should not summarily be decided. After hearing the arguments of counsel and examining the record and the memoranda filed by the parties, we are of the opinion that cause has not been shown, and we affirm the judgment entered in the Superior Court.

Facts and Travel

After unsuccessfully appealing assessments to the Providence Board of Tax Assessment Review, Harvard Pilgrim filed four separate actions in Superior Court alleging that the city valued its ratable personal property for tax years 1997, 1998, 1999, and 2000, respectively, in excess of fair market value in violation of G.L.1956 § 44-5-12. The four actions were consolidated for trial and heard before a trial justice without the intervention of a jury. After several days of hearings and the submission of post-trial memoranda, the trial justice found in favor of the city for three of the years, and held in favor of Harvard Pilgrim for tax year 2000. Judgment was entered on March 26, 2003, and the city timely appealed.

For tax year 2000, the city valued Harvard Pilgrim's ratable, tangible property at $9,183,600, and assessed $770,136.70 in taxes, which Harvard Pilgrim paid in four quarterly installments. Harvard Pilgrim, however, asserted that this valuation exceeded fair market value in violation of § 44-5-12(a), which provides in pertinent part:

"All property subject to taxation shall be assessed at its full and fair cash value or at a uniform percentage of its value, not to exceed one hundred percent (100%), to be determined by the assessors in each town or city * * *."

Harvard Pilgrim proffered evidence at trial that the fair market value of its tangible personal property as of December 31, 1999, was $3,401,225, and therefore the correct tax amount for tax year 2000 was $285,229.24. Harvard Pilgrim thus sought a tax rebate of $484,907.46.

Thomas Rossi (Rossi), the named defendant in his capacity as the city's then-tax assessor, testified that the formula the city used to establish `fair market value for items of tangible personal property was "acquisition cost minus depreciation." He further testified that his office used the information supplied by the taxpayer on the annual return and applied various depreciation schedules for furniture and equipment, computers, and leasehold improvements. The city conceded at trial that its acquisition cost minus depreciation approach may not reflect precise fair market value; nevertheless, the city argued, it treats taxpayers uniformly and its methodology is the best approximation of fair market value that can be ascertained while achieving that uniformity.

The trial justice held that although the city's formula for determining fair market value was not, in and of itself, an illegal method of tax assessment, the city's valuation of Harvard Pilgrim's tangible personal property for tax year 2000 did not properly reflect the fair market value of Harvard Pilgrim's ratable assets. The trial justice found in favor of Harvard Pilgrim for tax year 2000 and entered judgment of $484,907.46, together with interest and costs.

Three months after the close of the evidence, but before the trial justice issued his written decision, the city filed a motion for judgment on partial findings pursuant to Rule 52(c) of the Superior Court Rules of Civil Procedure, alleging that Harvard Pilgrim's failure to file a "true and exact account" precluded judicial review as a matter of law. Without specifically addressing the city's Rule 52(c) argument, the trial justice denied the motion, opining that it was an integral part of his analysis and subsumed in his decision.

Jurisdiction of the Superior Court

On appeal, the city argues first that the annual account Harvard Pilgrim filed on January 31, 2000, was insufficient under §§ 44-5-15 and 44-5-16 to vest the Superior Court with jurisdiction. The city asserts that Harvard Pilgrim's submitted account was not a "full and exact account and valuation" of its property and, therefore, that Harvard Pilgrim failed to satisfy a condition precedent to judicial review.

It is well established that the Superior Court has subject-matter jurisdiction to hear tax abatement claims. Granoff Realty II Limited Partnership v. Rossi, 833 A.2d 354, 358 (R.I.2003) (per curiam) (Granoff Realty). To invoke the court's jurisdiction properly, however, the petitioner must satisfy the statutory preconditions as set forth in § 44-5-16. Granoff Realty, 833 A.2d at 358. We have determined that the timely filing of an adequate account and the notarization of the account are both conditions precedent that must be met to invoke the jurisdiction of the court. Wickes Asset Management, Inc. v. Dupuis, 679 A.2d 314, 318 (R.I. 1996).

It is firmly established that when a defendant fails to plead at trial that a plaintiff did not file an adequate account pursuant to § 44-5-15, "such a failure could constitute waiver of that defense on appeal." Granoff Realty, 833 A.2d at 359 (citing Chase v. Bouchard, 671 A.2d 794, 796 (R.I.1996)). "[L]ike any condition precedent, it must be pleaded and must be called to the attention of the trial justice prior to trial and in accordance with Rule 9(c) of the Superior Court Rules of Civil Procedure." Granoff Realty, 833 A.2d at 359 (quoting Chase, 671 A.2d at 796). In this case, the city did not raise the argument asserting an inadequate account until three months after the hearing, when it filed a motion to amend its answer to include it as an affirmative defense and also filed a Rule 52(c) motion asserting the failure of Harvard Pilgrim to meet its statutory obligations. The trial justice granted the motion to amend, noting that Harvard Pilgrim had not filed an objection.

Although Harvard Pilgrim did object to the timeliness of the city's Rule 52(c) motion before the trial justice gave his decision, it has not raised a similar argument on appeal. We will proceed, therefore, to address the merits of the city's contention that Harvard Pilgrim failed to satisfy the statutory requirement of filing a "true and exact" account.

The Sufficiency of Harvard Pilgrim's Annual Account

Because the essential facts are not in dispute, the issue before us is solely one of statutory construction. This Court reviews questions of statutory interpretation de novo. State v. Fritz, 801 A.2d 679, 682 (R.I.2002) (citing Rhode Island Depositors Economic Protection Corp. v. Bowen Court Associates, 763 A.2d 1005, 1007 (RI. 2001)). When the language of a statute is clear and unambiguous, we must enforce the statute as written by giving the words of the statute their plain and ordinary meaning. In re Chaselle S., 798 A.2d 892, 894 (R.I.2002) (per curiam) (citing Cummings v. Shorey, 761 A.2d 680, 684 (R.I. 2000)). When a statute is ambiguous, however, we must apply the rules of statutory construction and examine the statute in its entirety to determine the intent and purpose of the Legislature. Direct Action for Rights and Equality v. Gannon, 819 A.2d 651, 659 (R.I.2003).

Section 44-5-15 provides that an account must include:

"a true and exact account of all the ratable estate owned or possessed by that person or body, describing and specifying the value of every parcel of the real and personal estate, together with the additional information that may be prescribed by the assessors relative to the ratable estate as may be contained in any corporation * * * tax return * * *." (Emphases added.)

Section 44-5-16(a) provides in pertinent part:

"Every person bringing in any account shall make oath before some notary public * * * that the account by that person exhibited contains, to the best of his or her knowledge and belief, a true and full account and valuation of all the ratable estate owned or possessed by him or her; and whoever neglects or refuses to bring in the account, if overtaxed, shall have no remedy therefor, except * * *."

Here, the account submitted by Harvard Pilgrim consisted of a four-page "Annual Return" form furnished by the city, along with a detailed computer printout entitled "Net Book Value Report" appended to the form. The printout consists of an itemized list of tangible personal property, including acquisition cost, year of acquisition, and depreciation amount. Our inquiry is to determine whether this account satisfied the statutory requirement.

The city argues that strict compliance with the statute is required. This Court has required strict compliance for two separate, clear, and unambiguous directives of the statute: that an account be submitted and that the account be notarized. See Granoff Realty, 833 A.2d at 358 (holding that "[n]othing in [§ 44-5-16] confers authority upon the judiciary to ignore the statutory requirement that the list be accompanied by either a personal oath or a written appointment"). In the case at hand, the city does not question that Harvard Pilgrim submitted a notarized account; rather, its only contention is that it was not a "true and exact account" in conformance with § 44-5-15.

This Court has determined that the legislative intent is to require such sufficiency in the description of the personal property as to be of assistance to the...