New England Power Co. v. Town of Barnet

• Decision Date: 05 October 1976
• Docket Number: No. 6-76,6-76
• Citation: 367 A.2d 1363,134 Vt. 498
• Court: Vermont Supreme Court
• Parties: NEW ENGLAND POWER COMPANY v. TOWN OF BARNET.

Page 1363

367 A.2d 1363

134 Vt. 498

NEW ENGLAND POWER COMPANY v. TOWN OF BARNET.

No. 6-76.

Supreme Court of Vermont.

Oct. 5, 1976.

Motion for Reargument Denied Nov. 4, 1976.

Paterson, Gibson, Noble & Brownell, Montpelier, for plaintiff.

Frederick M. Reed, Williston, for defendant.

Before BARNEY, C. J., and SMITH, DALEY, LARROW and BILLINGS, JJ.

DALEY, Justice.

This case involves an appeal by the Town of Barnet from findings of fact, conclusions and judgment rendered by the Caledonia Superior Court with respect to the valuation of property within the town owned by New England Power Company (NEPCO). A cross-appeal was taken by NEPCO challenging the lower court's findings and conclusions as to the lack of comparable property within the town and the court's order listing NEPCO's property at fifty per cent of fair market value. The nature and extent of the property which is the subject of this appeal may be ascertained by reference to an earlier opinion of this Court involving the same parties and property. Town of Barnet v. New England Power Co., 130 Vt. 407, 408, 296 A.2d 228 (1972).

In 1969, the Town of Barnet undertook a general reappraisal of the properties within its boundaries, as a result of which the appraisal of the NEPCO property was substantially increased. The present controversy between these parties relates to the proper valuation of this property for the years 1969 through 1973. The appraised value of the property for the years in question was as follows: 1969-$5,122,078; 1970-$7,500,000; 1971-$6,605,800; 1972-$6,579,800; and 1973-$6,579,800. The challenge by NEPCO of the 1969 valuation was the subject of an earlier appeal, Town of Barnet v. New England Power Co., supra, in which we remanded the case to the Commissioner of Taxes. The parties by stipulation agreed that the 1969 valuation was to be consolidated with the valuation for the years 1970-1973 for hearing and determination by the Caledonia Superior Court. De novo hearings were held by that court in accordance with 32 V.S.A. § 4467.

After numerous days of testimony and the introduction of many exhibits, the court found that the fair market value of the total NEPCO property located in Barnet and Monroe, New Hampshire (this property is located on the Connecticut River, with major portions of the facilities being located in the Town of Monroe, New Hampshire) was, for all years in question, $17,500,000. The court ultimately found that the fair market value of NEPCO's taxable property in Barnet was as follows: 1969- $4,217,500; 1970-$4,200,000; 1971-$4,182,500; 1972-$4,112,500; and 1973-$3,955,000. Neither of the parties challenges the correctness of the court's findings with respect to the percentage of the NEPCO property located in Barnet. It also found that there were no other properties in the town comparable to NEPCO's property and was therefore unable to find that the listed value of the NEPCO property at fifty per cent of fair market value would not correspond to the listed value of comparable properties within the town.

The town on appeal argues that the superior court failed to make proper findings with respect to fair market value, that it erred in permitting a company officer to testify as to fair market value, that its motions for directed verdict should have been granted, and that the court improperly refused to reopen the case to allow it to present evidence tending to impeach the testimony of one of NEPCO's experts. In its cross-appeal, NEPCO contends that the lower court erred in ruling that there were no properties within the town comparable to the NEPCO property and that it also erroneously refused to list NEPCO's property at a value corresponding to the listed value of other properties in the community.

With respect to the town's contention that the superior court failed to expressly and specifically set forth the criteria and factors it employed in determining the fair market value of the property, we note upon examination of the record that the findings below, while both painstaking and extensive, are largely mere recitals of the testimony given. As we held in Krupp v. Krupp, 126 Vt. 511, 514, 236 A.2d 653 (1967), such recitals, because they do not indicate the credence placed upon the testimony by the trial court or the extent to which the testimony influenced the court's decision, do not measure up to the requisite standard.

The lower court findings indicate that the town's expert witness on fair market value, Mr. Blackburn, based his determination of fair market value upon a capitalization of income approach, with numerous calculations, assumptions, factors and estimates being included in his equation. It also found that NEPCO's rebuttal expert witness, Mr. Rose, set forth numerous adjustments, eleven in number, which in his opinion should have been included in the Blackburn formula. On the basis of the testimony of these two expert witnesses, the court concluded that 'Blackburn omitted some necessary factors in his calculation, but that Rose's adjustments were excessive'. It then found that 'Based on the evidence presented, it is the Court's best judgment that the fair market value of the Plaintiff's property in the Towns of Barnet, Vermont and Monroe, New Hampshire for each of the years under review was $17,500,000.'

In arriving at this ultimate conclusion, the court did not specify which of Mr. Blackburn's factors it discounted or which of Mr. Rose's adjustments it considered. There is also no indication as to whether or not it gave any consideration to NEPCO's testimony that the fair market value of the property was within a range of ten per cent below to ten per cent above net book value. The court may have had a basis for arriving at its fair market figure, but the findings of fact do not disclose it. As made, its findings of value are open to the suggestion made by the town that the court relied solely upon net book value, which, as we stated in our earlier opinion, is not a controlling factor. Town of Barnet v. New England Power Co., supra, 130 Vt. at 413, 296 A.2d 228.

'The purpose of findings is to make a clear statement to the parties, and to this Court, if appeal is taken, of what was decided and how the decision was reached.' Wells v. Village of Orleans, Inc., 132 Vt. 216, 221, 315 A.2d 463, 466 (1974); Dearborn National Casualty Co. v. Consumers Petroleum Co., 164 F.2d 332 (7th Cir. 1947); R. Field, V. McKusick & L. Wroth, Main Civil Procedure §§ 52.1 52.6 (1959). Such is the purpose of V.R.C.P. 52(a). If it were not the purpose, the preliminary notice of decision contemplated by the rule would be sufficient. Indeed, purported findings which merely recite testimony and give a decision within its range, if believed, are no more than a bare notice of decision. Parties complying with the rule are entitled to more, as a matter of law, than would be afforded by a general verdict in a jury trial. Even in a jury trial, special verdicts or interrogatories, properly submitted, can control a general verdict. V.R.C.P. 49. Findings serve the same purpose. They indicate how the ultimate conclusion is arrived at, and remove from that ultimate conclusion any suspicion that it is only a guess. Where, as here, no indication is given of the method of appraisal used by the lower court, and the weight given to value factors disclosed by the evidence, that purpose is not met.

Before proceeding to the claims of error raised by the cross-appeal, we will take this opportunity to discuss certain other issues raised in the town's brief. The first question relates to fair market value and the methods of determining such value where specific purpose, or so-called unique property is involved. The town by its motions to dismiss, for directed verdict and new trial, as well as by objections to evidence introduced by NEPCO, focused upon the methods utilized by the company to prove fair market value. Particular attention was directed to NEPCO's use of net book value (original cost less depreciation) and the failure of NEPCO to present testimony as to the price a willing seller would agree to in an arms-length transaction. Testimony by a company official reflected his belief that single purpose property such as a public utility is rarely bought and sold in the market. This witness offered his expert opinion that fair market value lay within a range of ten per cent below to ten per cent above the net book value of the company property. Our review of the record convinces us that NEPCO presented other evidence in addition to this opinion testimony bearing upon value which could have been utilized by the court in its determination of fair market value. The failure of the witness to take into consideration the price a seller would agree to sell the property for does not warrant the striking of his opinion testimony regarding the price a purchaser would pay for the property at a given time.

This type of testimony is admissible as evidence of fair market value to aid the trier of fact in arriving at its ultimate determination of value. The opinions of well informed persons based upon the purposes for which the property is suited are to be considered in arriving at fair market value. The weight to be given such testimony is, of course, for the court. Public Service Co. v. New Hampton, 101 N.H. 142, 136 A.2d 591, 595 (1957).

NEPCO strongly contends in its brief that original cost less depreciation is an important, if not controlling, factor in determining fair market value. We previously held, with respect to this same property, that this is not a controlling factor as a matter of law. Town of Barnet v. New England Power Co., supra. Such a method was approved for valuation of water rights involved in a rate-making case. Latourneau v. Citizens Utilities Co., 125 Vt. 38, 43, 209 A.2d 307 (1965). But the purpose of valuation in a rate case is vastly different from that in a tax case. Town of Barnet v. New England Power Co., ...