Kennett Consol. Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals
| Decision Date | 28 February 2020 |
| Docket Number | No. 253 C.D. 2019,253 C.D. 2019 |
| Citation | 228 A.3d 29 |
| Parties | KENNETT CONSOLIDATED SCHOOL DISTRICT v. CHESTER COUNTY BOARD OF ASSESSMENT APPEALS, Chester County, PA Appeal of: Property Owner Autozone Development Corp. |
| Court | Pennsylvania Commonwealth Court |
Ryan J. Kammerer, Pittsburgh, for Appellant.
Scot R. Withers, West Chester, for Appellee Kennett Consolidated School District.
Anthony M. Brichta, West Chester, for Appellee Chester County Board of Assessment Appeals.
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE ELLEN CEISLER, Judge
OPINION BY JUDGE McCULLOUGH
Autozone Development Corporation (Taxpayer) appeals from the February 4, 2019 decision of the Court of Common Pleas of Chester County (trial court) that determined, following a nonjury trial, the fair market value and property assessment of Taxpayer's property for the years 2018 and 2019. In particular, Taxpayer challenges the trial court's November 9, 2018 denial of its motion to quash Kennett Consolidated School District's (District)1 assessment appeal of its property located within Chester County (Property). Upon review, we affirm.
The background facts of this case are undisputed.2 This case's origins lie in assessment appeals filed by District. By grant of statutory authority, a school district, under Section 8855 of the Consolidated County Assessment Law, has "the right to appeal any assessment within its jurisdiction in the same manner, subject to the same procedure and with like effect as if the appeal were taken by a taxable person with respect to the assessment." 53 Pa.C.S. § 8855.3 District exercised its authority to do so, beginning with three emails sent in July of 2017.
The first email was sent on July 24, 2017, from District to Reeves Lukens, III (Lukens), requesting a review of all property assessments within the taxing district with recommendations for possible appeals to file against assessed properties. (Reproduced Record (R.R.) at 92a.) This email explicitly stated "[p]lease do not limit your review to any particular class of properties in the [taxing district], but review all classes of properties including commercial, residential, and otherwise. " Id. (emphasis added). On July 26, 2017, Lukens identified 13 properties he described as having "a high probability of being underassessed by more than [$1 million] of market value." (R.R. at 93a.) Subsequently, on August 1, 2017, District identified 12 property assessments from which it decided to appeal. (R.R. at 94a.)
The assessment appeals were filed and a hearing was held on October 10, 2017. On October 20, 2017, the Chester County Board of Assessment Appeals (Board of Assessment) determined that the then-current assessment of Taxpayer's Property located at 965 West Cypress Street, New Garden Township, Tax Parcel ID No. 60-02-0044.0000, would remain valued at $536,960.00. (R.R. at 14a-16a.) On November 17, 2017, District appealed the decision to the trial court. (R.R. at 17a-22a.)
In its appeal, District claimed that the Property's value was less than the fair market value, the assessment was inconsistent with similarly situated properties, and the assessment did not reflect actual market value. Id. On December 24, 2017, Taxpayer filed an answer and new matter, denying the allegations of the appeal and claiming that the assessment was contrary to the law and Constitution of this Commonwealth. (R.R. at 23a-28a.) On May 2, 2018, Taxpayer requested a stay of the valuation phase until the issue of uniformity under the Pennsylvania Constitution could be determined by the trial court. (Original Record (O.R.) at Item No. 7.) The following day, Taxpayer filed a motion for leave of court to take discovery. (R.R. at 36a-52a.) On June 30, 2018, the motion to take discovery was granted and the motion for the stay was denied. (R.R. at 53a.)
On October 30, 2018, Taxpayer filed a motion to quash the assessment appeal arguing that it was unconstitutional under the Uniformity Clause of the Pennsylvania Constitution, Pa. Const. art. VIII, § 1. (R.R. at 54a-96a.) Attached as exhibits to the motion were the emails between District and Lukens. Id. District filed an answer in opposition on November 8, 2018. (R.R. at 97a-105a.)
A trial was held on November 9, 2018. (R.R. at 106a.) There, the trial court considered Taxpayer's motion to quash the appeal.4 (R.R. at 108a.) Taxpayer did not present any additional evidence or testimony in support of the motion other than the attached exhibits. (R.R. at 109a.) In support of the motion, Taxpayer alleged that Lukens' recommendation to appeal the assessment of properties that were underassessed by $1 million was unconstitutional. (R.R. at 109a-117a.) The trial court denied the motion. Id. The trial court explained that Taxpayer's arguments were not supported by the evidence and that the recommendations were not discriminatory, but were simply properties that were underassessed by more than $1 million. Id. Additionally, the trial court reasoned that the evidence presented did not comport with its reading of Valley Forge Towers Apartments N, LP v. Upper Merion Area School District , 640 Pa. 489, 163 A.3d 962 (2017). (R.R. at 117a-18a.)
Following trial, on February 4, 2019, the trial court issued its decision upholding the fair market value and resulting assessment of the Property. (O.R. at Item No. 17.) The trial court found that in 2018, the fair market value of the Property was $1,850,000.00 and the assessed value was $980,500.00, while the 2019 fair market value was again $1,850,000.00 and the assessed value was $949,050.00. Id. On February 26, 2019, Taxpayer appealed to this Court. (O.R. at Item No. 18.) On May 23, 2019, the trial court issued an opinion in support of its decision.5 (O.R. at Item No. 20.) Instantly, Taxpayer only challenges the denial of the motion to quash.
Citing Valley Forge , the trial court explained that Taxpayer's motion was based on the contention that District's scheme and practice in selecting properties for tax assessment appeals was not constitutionally uniform. (Trial court op. at 3.) The trial court explained that under Valley Forge , 163 A.3d at 978, a taxing authority cannot implement a program appealing only assessments of a sub-classification of properties according to property type, e.g. , commercial, single-family residential, or industrial. (Trial court op. at 4.) The trial court recognized that District had a legitimate interest in maximizing revenue, but maintained that it was subject to scrutiny under the Uniformity Clause. Id. Yet, the trial court explained the two interests do not necessarily conflict and found that the evidence presented did not bring District's practices within Valley Forge's prohibition against appeal policies that make classifications based on property type and residency status. Id. The trial court reasoned that Taxpayer did not show District had an established policy and that District requested a review of all tax assessments within District and recommendations on the most underassessed properties. Id. The trial court recognized that all properties suggested were commercial ones but, in its view, that fact alone did not "ipso facto " demonstrate a violation of the Uniformity Clause. (Trial court op. at 5.) Lastly, the trial court explained that the disparity was most likely attributable to District's request to appeal only assessments that would be worth the cost of the appeal. Id. Taxpayer appealed to this Court on February 26, 2019.
On appeal,6 Taxpayer raises three issues: (1) whether District violated public policy and applicable law by failing to enact any policy for the selection of assessment appeals; (2) whether District violated the requirements of the Uniformity Clause by adopting a monetary threshold for determining whether to file an assessment appeal which exclusively targeted properties with an actual market value of more than $1 million; and (3) whether District violated the requirements of the Uniformity Clause by implementing an assessment appeal selection scheme that systematically subjected commercial properties to disparate treatment.7
We first address the contention that District's selection process violated the Uniformity Clause of the Pennsylvania Constitution, Pa. Const. art. VIII, § 1. Taxpayer maintains that District violated the Uniformity Clause in two ways: (1) by appealing the assessments of only commercial properties, and (2) setting a monetary threshold targeting properties underassessed by $1 million.
Taxpayer first argues that Valley Forge stands for the proposition that taxing authorities cannot treat different property sub-classifications in a disparate manner. Taxpayer notes that in Valley Forge , the school district appealed only commercial properties and our Supreme Court found that practice to be unconstitutional. Taxpayer maintains that the Uniformity Clause can be violated in practice and without a formal policy in place. It also argues that under Valley Forge , all real estate constitutes a single class entitled to uniform treatment and similarly situated taxpayers should not be treated differently by taxing authorities. It explains that all property within a taxing district is a single class and cannot be subject to different, intentional, or systematic sub-classification. Specifically, Taxpayer points to the language in Valley Forge that "it follows that a taxing authority is not permitted to implement a program of only appealing the assessments of one sub-classification of properties, where that sub-classification is drawn according to property type––that is, its use as commercial, apartment complex, single-family residential, industrial, or the like." 163 A.3d at 978. Based on the foregoing, Taxpayer argues that the appeals of commercial properties in the present case are unconstitutional.
Taxpayer maintains that the monetary value of property can never be made a...
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