Newbury Commons Ltd. Partnership v. City of Stamford

• Decision Date: 22 June 1993
• Docket Number: No. 14579,14579
• Court: Connecticut Supreme Court
• Parties: NEWBURY COMMONS LIMITED PARTNERSHIP v. CITY OF STAMFORD.

Page 1292

626 A.2d 1292

226 Conn. 92

NEWBURY COMMONS LIMITED PARTNERSHIP v. CITY OF STAMFORD.

No. 14579.

Supreme Court of Connecticut.

Argued Feb. 8, 1993.

Decided June 22, 1993.

Alice L. Perry, Asst. Corp. Counsel, with whom, on the brief, was Daniel M. McCabe, Corp. Counsel, for appellant (defendant).

Michael J. Cacace, with whom was Paul T. Tusch, Stamford, for appellee (plaintiff).

Before CALLAHAN, BORDEN, BERDON, NORCOTT and KATZ, JJ.

NORCOTT, Associate Justice.

The principal issue in this appeal is whether the trial court improperly reduced an assessment on the plaintiff's real property by adopting an appraisal methodology that was invalid as a matter of law. The plaintiff, Newbury Commons Limited Partnership, brought an action against the defendant, the city of Stamford, pursuant to General Statutes (Rev. to 1989) § 12-118, ¹ requesting a reduction of the assessment on its real property for the tax years 1987, 1988, 1989 and 1990. The trial court found that the assessment of the plaintiff's property was excessive and reduced the assessed value to the amount reflected in the appraisal report of the plaintiff's expert. ² 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). We affirm.

The following facts are undisputed. The plaintiff is the owner of a twin tower building located in Stamford consisting of 260 rental apartment units and approximately 10,000 square feet of commercial space with a health club. Construction of the building was completed in 1986, and the last revaluation of real property in Stamford at the time relevant to this appeal occurred on October 1, 1981. ³ Therefore, the tax assessment for the years 1987 through 1990 required that an assessed value of the property as of October 1, 1981, be established.

Pursuant to the provisions of General Statutes § 12-53a, ⁴ the defendant's assessor established a fair market value for the property of $23,463,610, which resulted in an assessment of $16,424,530 for the 1987 list. ⁵ This assessment was increased for 1988 and 1989 due to further improvements to the building. The plaintiff appealed to the Stamford board of tax review for a reduction of the assessments, and to the trial court after the board affirmed the assessments.

At trial, the court heard testimony from three expert witnesses regarding the 1981 value of the property: Frank Kirwin, the defendant's assessor; George Derderian, an independent appraiser retained by the defendant; and Ronald Glendinning, the plaintiff's appraiser. All of the experts agreed as to generally accepted appraisal techniques. No one had appraised the property through the use of comparable properties, however, because no comparables were available. Each expert used a different methodology for establishing a 1981 fair market value for the property, ⁶ and each arrived at a different corresponding value for assessment purposes: Kirwin assessed the property at $16,424,530; Derderian's assessment was $15,050,000 and Glendinning's assessed value was $5,810,000.

The trial court concluded that the assessments on plaintiff's property for the years 1987 through 1990 were excessive and inequitable and that the defendant had failed to follow General Statutes § 12-63b ⁷ because its assessor had relied on only a cost method to establish an assessment value. The trial court also concluded that the assessment values proffered by Kirwin and Derderian were questionable because each had used an appraisal method that the court considered inappropriate for the determination of the 1981 assessed value. ⁸ The court further stated that "[t]he appraisal report and the testimony submitted by the plaintiff's expert, Ronald Glendinning, was a thorough, accurate and credible piece of work and testimony.... The conclusions of Mr. Glendinning as to a 1981 fair market value of $8,300,000.00 and a 1981 assessment of [$5,810,000.00] are accepted by this court." The court then ordered that the plaintiff's assessment be reduced to $5,810,000 for the years in question, and that the plaintiff be granted a tax credit for all overpayment of taxes on previous assessments.

The defendant claims on appeal that the trial court improperly reduced the assessment on the plaintiff's property to the value determined by the plaintiff's expert. The defendant argues that the appraisal methodology employed by the plaintiff's expert effectively granted an interim revaluation of the property and therefore should have been rejected by the trial court as a matter of law. ⁹ Many of the defendant's arguments regarding this methodology are essentially factual, and recount the evidence and arguments presented at trial. The defendant also recounts at length the testimony of its own appraisers and argues that the trial court arbitrarily rejected this testimony. It is not the province of this court to retry the facts. Robert Lawrence Associates, Inc. v. Del Vecchio, 178 Conn 1, 13, 420 A.2d 1142 (1979). We, therefore, address the defendant's claim as: (1) whether the trial court improperly accepted the appraisal of the plaintiff's expert to establish value because that appraisal was invalid as a matter of law; and (2) whether, based on the evidence presented at trial, the trial court's finding that the defendant's assessment was excessive was clearly erroneous.

I

The defendant claims that the appraisal method employed by the plaintiff's expert, Glendinning, in effect granted the plaintiff an interim revaluation by taking account of the economic downturn of the late 1980s. Therefore, the defendant claims, the plaintiff's appraisal violated the equalization requirement of General Statutes § 12-62 ¹⁰ and should have been rejected by the trial court as a matter of law. ¹¹

It is well established that "[i]n a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony." Kimberly-Clark Corporation v. Dubno, 204 Conn. 137, 153, 527 A.2d 679 (1987). The credibility and the weight of expert testimony is judged by the same standard, and the trial court "is privileged to adopt whatever testimony he reasonably believes to be credible." (Internal quotation marks omitted.) Transportation Plaza Associates v. Powers, 203 Conn. 364, 378, 525 A.2d 68 (1987). On appeal, we do not retry the facts or pass on the credibility of witnesses. Nor'easter Group, Inc. v. Colossale Concrete, Inc., 207 Conn. 468, 473, 542 A.2d 692 (1988).

The trial court was presented with conflicting testimony as to the value of the property, and concluded that the report and testimony of the plaintiff's expert was the most credible. In any assessment case in which the trial court is confronted with conflicting appraisal methods, it is a proper function of the court to give credence to one expert over the other. Connecticut Coke Co. v. New Haven, 169 Conn. 663, 666, 364 A.2d 178 (1975). The conclusions reached by the trial court must stand "unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law." (Internal quotation marks omitted.) Hartford v. Tucker, 15 Conn.App. 513, 517-18, 545 A.2d 584, cert. denied, 209 Conn. 807, 548 A.2d 444 (1988). We will not disturb the trial court's adoption of the plaintiff's valuation of the property, therefore, unless the appraisal was legally invalid.

At trial, the plaintiff's expert explained that he had used a discounted cash flow method to obtain the fair market value of the property for 1991. Despite the defendant's contention to the contrary, the 1991 valuation was only a "starting point" to a determination of a 1981 assessment value. ¹² The discounted cash flow method is an accepted method for determining the present value of real property. The Appraisal of Real Estate (10th Ed.1992) pp. 420-21; Dictionary of Real Estate Appraisal (2d Ed.1984) p. 94.

The plaintiff's expert then testified that, to obtain an assessed value for 1981, he employed an average ratio of sale price to assessments to trend back the 1991 value to 1981. ¹³ The defendant argues that this method of appraisal is impermissible because it effectively gives the plaintiff an interim revaluation because the average ratio accounts for market conditions during the applicable time period, which in this case was from 1981 to 1991. We have previously recognized, however, that the use of an average ratio of sales to assessments is acceptable to establish the unfairness of an assessment and to provide a remedy once a finding of an inequitable and excessive assessment has been made. Uniroyal, Inc. v. Board of Tax Review, 182 Conn. 619, 626, 438 A.2d 782 (1981); Kays, Inc. v. Board of Tax Review, 170 Conn. 477, 481, 365 A.2d 1207 (1976); Lerner Shops, Inc. v. Waterbury, 151 Conn. 79, 90, 193 A.2d 472 (1963).

In Uniroyal, Inc. v. Board of Tax Review, supra, 182 Conn. at 626, 438 A.2d 782, we noted that "use of the average ratio approach is not a supplement to fair valuation as mandated by [General Statutes § 12-64]...." We acknowledged, however, that where a claim is made that an assessor had failed to establish a fair valuation, "[t]he average ratio technique is useful both as evidence of, and as a remedy to cure, a failure of the assessing authority to follow equitable procedures or the statutory requirements, or to correct its clear error." Id., at 630-31 n. 7, 438 A.2d 782. It was therefore proper for the trial court to consider the assessment of the plaintiff's expert as evidence that the defendant's assessment did not reflect a fair valuation as required by statute and to adopt that assessment as its own finding of the true and actual value of the property once it had found the defendant's assessment to be inequitable and excessive. ¹⁴ We also conclude that the assessment of the...