IN RE SPRINGFIELD SCHOOL DIST.

• Decision Date: 11 July 2005
• Citation: 879 A.2d 335
• Parties: Re: Appeal of SPRINGFIELD SCHOOL DISTRICT and Springfield Township from the decision of the Board of Assessment Appeals of Delaware County in connection with premises situated at 674 Baltimore Pike, Springfield Township, County of Delaware, Pennsylvania, owned by Ferraro Olds Cadillac, Inc. relating to the final real estate assessment assessed as of January 2002 for Folio No. 42-00-00477-00. Re: Appeal of Springfield School District and Springfield Township from the Decision of the Board of Assessment Appeals of Delaware County relating to the premises situated at 134 Baltimore Pike, Springfield Township, County of Delaware, Pennsylvania owned by Neil McGarry relating to the final real estate assessment assessed as of January 2002 for Folio No. 42-00-00435-00. Appeal of: Springfield School District and Springfield Township.
• Court: Pennsylvania Commonwealth Court

879 A.2d 335

Re: Appeal of SPRINGFIELD SCHOOL DISTRICT and Springfield Township from the decision of the Board of Assessment Appeals of Delaware County in connection with premises situated at 674 Baltimore Pike, Springfield Township, County of Delaware, Pennsylvania, owned by Ferraro Olds Cadillac, Inc. relating to the final real estate assessment assessed as of January -00-00477-00.

Re: Appeal of Springfield School District and Springfield Township from the Decision of the Board of Assessment Appeals of Delaware County relating to the premises situated at 134 Baltimore Pike, Springfield Township, County of Delaware, Pennsylvania owned by Neil McGarry relating to the final real estate assessment assessed as of January -00-00435-00.

Appeal of: Springfield School District and Springfield Township.

Commonwealth Court of Pennsylvania.

Argued June 9, 2005.

Decided July 11, 2005.

Mark A. Sereni and Gregory Gerson, Media, for appellants.

Joseph Patrick O'Brien, Media, for appellees, Ferraro Olds Cadillac, Inc. and Neil McGarry.

BEFORE: PELLEGRINI, Judge, SIMPSON, Judge, and McCLOSKEY, Senior Judge.

OPINION BY Judge SIMPSON.

In these consolidated appeals from real estate assessments, the Court of Common Pleas of Delaware County (trial court) declined the request of the Springfield School District and Springfield Township (collectively, Springfield)¹ to increase the assessed values of two commercial properties. A car dealership is located on one property, and a furniture store is located on the other.² As to the car dealership property, Springfield challenges the trial court's conclusion that expert witness testimony was of insufficient weight to sustain the burden of overcoming the prima facie validity of the assessment. As to the furniture store property, Springfield challenges the trial court's conclusion that the method by which it determined which assessments to appeal was discriminatory and resulted in non-uniform taxation, contrary to the Uniformity Clause of the Pennsylvania Constitution and the so-called equalization requirements of the Second Class A and Third Class County Assessment Law (Law).³

A county-wide property reassessment occurred in Delaware County which became effective in 2000. The car dealership property was assessed with a fair market value of $2,787,500. The furniture store property was assessed with a fair market value of $941,370.⁴

For the tax year 2002 and beyond, Springfield filed tax assessment appeals which included the subject properties. The Delaware County Board of Assessment Appeals (Board) denied the appeals, and Springfield appealed to the trial court.

At an extensive consolidated hearing, Springfield presented the expert testimony of Charles J. Falcone concerning the fair market value of each property. The owner of the car dealership presented no rebuttal expert testimony, although it presented assessment files for other properties. The landowners of the furniture store presented expert testimony, but the expert agreed that the fair market value of the furniture store property was in excess of the fair market value assigned by the County. However, both landowners challenged the way in which Springfield selected properties for tax assessment appeals, contending the process resulted in a lack of uniformity which violated the Uniformity Clause of the Pennsylvania Constitution.

An official with the Springfield School District testified about his process of reviewing properties for possible assessment appeal. By way of summary, he collected a sampling of both residential and commercial properties and compared the pre-county-wide assessment values and tax levels with the post-county-wide assessment values and tax levels. He concluded that residential assessments were reasonably accurate because there were not significant differences between the assessments before and after the county-wide reassessment.

His comparison showed some discrepancies in commercial properties, which he analyzed further. He identified commercial properties that had the largest percentage value decrease after reassessment and the largest decrease in amount of taxes after reassessment. Properties identified in this evaluation were referred to the solicitor and an appraiser for further evaluation. As a result of the evaluation process, almost all tax assessment appeals filed involved commercial properties.

Regarding the car dealership property, the trial court concluded that the testimony of Springfield's expert witness was of insufficient weight to sustain an appellant's burden of overcoming the prima facie validity of the assessment of the Board of Assessments. The trial court specifically found the expert testimony lacked credibility. Reproduced Record (R.R.) at 1148a. As to the furniture store property, the trial court noted "based upon the evidence presented by either expert, the value of the subject property was higher than that of its current assessment, thereby requiring a change in the assessment." R.R. at 1148a-49a. The trial court went on to consider the constitutional issue for this property.

Citing several cases dealing not with allegedly defective appeals but rather with allegedly defective assessments,⁵ the trial court reasoned that a taxpayer asserting a violation of the Uniformity Clause may show that it has a discriminatory effect. Also, where a taxing authority applies a different percentage to the value of a property, or determines the base value of the property in a non-uniform manner, the result can be characterized as being discriminatory. R.R. at 1149a-50a. The trial court concluded that the methodology used to select appeals "was arbitrary and capricious and ... had a discriminatory effect in that it focuses it[s] program of seeking tax assessment appeals almost entirely upon commercial properties." R.R. at 1151a. Therefore, the trial court concluded the policy violated the Uniformity Clause. The trial court ended its analysis at this point. Therefore, it did not find the fair market value or apply the appropriate ratio to the furniture store property.

In sum, the trial court denied both of the consolidated appeals. Timely appeal was taken to this Court by Springfield.⁶

I. Car Dealership Property

Springfield maintains the trial court erred by rejecting its unrebutted expert testimony. Springfield cites cases holding that "raw" assessments of other properties do not prove the fair market value of the assessed property in a tax assessment appeal.⁷ Also, Springfield relies on cases that provide that relevant, credible and unrebutted testimony must be given due weight and cannot be ignored by the trial court.⁸

The fact-finding role of the trial court in tax assessment appeals was explored at length by our Supreme Court in Green v. Schuylkill County Bd. of Assessment Appeals, 565 Pa. 185, 772 A.2d 419 (2001). As relevant here, the Court derived the parameters governing a trial court's determination of fair market value in a single-expert case. First, the trial court must base its findings on the evidence of record. Concomitantly, if the trial court is to depart from the only expert valuation in the record, the expert must have explained the bases of valuation opinion in detail sufficient for the trial court to evaluate the reasonableness of those bases. The weight to be given factors such as comparable sales is for the trial court to determine. Id. at 206-07, 772 A.2d at 432-33. Second, the trial court must state the basis and reasons for its decision. Where only one expert testified, the trial court's reasoning must be stated on the record so that the reviewing court may determine if the trial court's departure from the expert's valuation is warranted. Id. at 208, 772 A.2d at 433.

Here, the trial court received detailed, in-person testimony from Springfield's expert. The trial court found the testimony not credible and gave three reasons for rejecting it: a prior inconsistent opinion; use of properties which were not sufficiently comparable; and, an incorrect assumption about zoning. The trial court also noted the significant variance between the expert's opinion and the assessed values of numerous surrounding properties. This statement of reasons is well within the parameters set by our Supreme Court in Green.

In sum, Springfield's arguments lack merit. The trial court did not ignore the expert's testimony; rather, it rejected the opinion as lacking credibility. Moreover, the trial court's reference to assessments of surrounding properties was made for credibility purposes, not as substantive evidence of the fair market value of the car dealership property. We decline Springfield's invitation to reweigh the trial court's credibility determinations, and we affirm the trial court's order as it relates to this property.

II. Furniture Store Property

Relying heavily on this Court's recent decision in Vees v. Carbon County Bd. of Assessment Appeals, 867 A.2d 742 (Pa.Cmwlth.2005), Springfield and amicus curiae challenge the trial court's legal conclusion that the exercise of the right to appeal is discrimination. In addition, they challenge the sufficiency of the factual findings supporting the conclusion of deliberate, purposeful discrimination.

Although they do not challenge the constitutionality of any provision of the Law, the landowners argue that the discriminatory manner in which Springfield reached its decisions to appeal constituted de facto spot assessments in violation of the Uniformity Clause of the Pennsylvania Constitution and the so-called equalization provisions of the Law.⁹ Regarding the applicability of Vees, the Landowners argue that Vees was strictly limited to its facts. They also contend Vees is inapplicable because, unlike the current controversy, there was no finding of purposeful discrimination in that case.¹⁰ Article VIII, Section I of the Constitution of the Commonwealth of Pennsylvania provides: "All taxes shall be uniform, upon the same...