Slewett & Farber v. Board of Assessors

• Decision Date: 21 January 1981
• Citation: 435 N.Y.S.2d 313,78 A.D.2d 403
• Court: New York Supreme Court — Appellate Division
• Parties: In the Matter of SLEWETT & FARBER, Petitioners-Respondents-Appellants, v. The BOARD OF ASSESSORS and the Board of Assessment Review of the County of Nassau, Respondents-Appellants-Respondents. Attorney-General of the State of New York, Intervenor-Appellant-Respondent.

Page 313

435 N.Y.S.2d 313

78 A.D.2d 403

In the Matter of SLEWETT & FARBER, Petitioners-Respondents-Appellants, v.The BOARD OF ASSESSORS and the Board of Assessment Review of the County of Nassau, Respondents-Appellants-RespondentsAttorney-General of the State of New YorkIntervenor-Appellant-Respondent.

Supreme Court, Appellate Division, Second Department.

Jan. 21, 1981.

Edward G. McCabe, County Atty., Mineola(Joshua A. Elkin, Deputy County Atty., Mineola, of counsel), for respondents-appellants-respondents.

Koeppel, Sommer, Lesnick & Martone, P. C., Mineola (Bernard Sommer, Adolph Koeppel, Irving I. Lesnick, Tracie P. Peddy and Ann Del Casino, Mineola, of counsel), for petitioners-respondents-appellants.

Robert Abrams, Atty. Gen., New York City, pro se(John M. Farrar, Robert Schonfeld and George D. Zuckerman, Asst. Attys.Gen., New York City, of counsel; Beth Turtz, New York City, on the brief), for intervenor-appellant-respondent.

Allen G. Schwartz, Corp.Counsel, New York City(Edith I. Spivack, Reed G. Schneider and Jay M. Herman, New York City, of counsel), for City of New York, amicus curiae.

Bleakley Platt Schmidt & Fritz, P. C., White Plains (Frederick J. Martin and Hugh D. Fyfe, White Plains, of counsel), for Rego Properties Corp. & Citizens Tax Council, Inc., amici curiae.

Before LAZER, J. P., and MANGANO, COHALAN and O'CONNOR, JJ.

LAZER, Justice Presiding.

At principal issue on these cross appeals are the validity and effect of certain legislative enactments which retroactively altered the means and standards by which aggrieved taxpayers could establish inequality of assessed valuations of real property.The underlying controversy involves the rates at which real property in Nassau County was assessed for the years 1965/66 through 1977/78; the appellate questions pertain, however, to the constitutionality of laws which would nullify petitioners' judicial success in establishing those rates as identical to the equalization rates fixed for Nassau County by the State Board of Equalization and Assessment.

The petitioners, who own a large commercial parcel, have instituted proceedings to review its assessment, alleging that for the years in issue their property was assessed at a higher ratio to fair market value than other property in the county.In moving for partial summary judgment fixing the ratio to fair market value at which property in Nassau County was assessed for those years, the petitioners relied upon the rates established in the case of 860 Executive Towers v. Board of Assessors of County of Nassau (84 Misc.2d 525, 377 N.Y.S.2d 863, affd.53 A.D.2d 463, 385 N.Y.S.2d 604, affd. sub nom.Pierre Pellaton Apts. v. Board of Assessors of County of Nassau, 43 N.Y.2d 769, 401 N.Y.S.2d 1013, 372 N.E.2d 801, on the opn. at the Appellate Division) for the tax years 1965/66 through 1973/74 which for the years 1970/71 through 1973/74 clearly were based upon the State equalization ratios and upon the applicable equalization rates for the remaining years under review.In February, 1978, when the motion was made, the use of equalization rates to prove ratio of assessment was provided for in subdivision 3 of section 720 of the Real Property Tax Law.Special Term granted petitioners' motion and fixed each year's ratio at the percentage reflected in 860 for the earlier years and the appropriate equalization rates for the years following those decided in 860.The county now asserts that if collateral estoppel principles bind it to the same equalization ratios in the numerous other pending inequality proceedings covering the same years, the financial consequences of the summary judgment order will be disastrously severe.Following Special Term's grant of partial summary judgment, the 1978 and 1979 Legislatures enacted or amended a number of laws resulting in significant alterations or restrictions both prospectively and retroactively, in the methods of proving inequality.Subsequent to the enactment of the 1978legislation but prior to the 1979legislation, Special Term granted the county renewal of the motion and declared the 1978 changes unconstitutional while holding as well that the county was in conformity with certain provisions of the new legislation which deferred the necessity of compliance with the requirement for full value reassessment.These cross appeals ensued.

With the issue of constitutionality of the laws adopted in both years in principal focus, the Attorney-General has intervened to defend the enactments and the City of New York has obtained amicus curiae status for the same purpose.Rego Properties Corp. and the Citizens Tax Council, Inc. have been granted amicus curiae status to support petitioners' claims of unconstitutionality.Under the circumstances, the legislative and judicial history leading to the current dispute comprise a vital backdrop to its resolution.

THE INEQUALITY CONCEPT AND ITS PROOF

In an inequality case, it is the taxpayer's contention that property in the taxing district generally is assessed at less than its full value for tax purposes and that the parcel under review has been assessed at full value or at a greater percentage of its full value than properties in the district generally (People ex rel. Yaras v. Kinnaw, 303 N.Y. 223, 101 N.E.2d 474)."For example, a specific claim might be that a subject property was assessed at 35% of its full value while other properties on the roll were assessed at only 30% of full value.If true, the petitioning taxpayer would be paying more than his due share of the aggregate tax"(860 Executive Towers v. Board of Assessors of County of Nassau, 53 A.D.2d 463, 466, 385 N.Y.S.2d 604(HOPKINS, J.), supra ).To succeed, therefore, the taxpayer must prove not only the ratio at which property in the tax district generally has been assessed, but that his own parcel was assessed at a higher ratio.

Under former section 293 of the Tax Law(L.1909, ch. 62, as amd.), the predecessor of the currently pertinent Real Property Tax Law provisions, the mandated method of proof compelled the petitioner and the assessing authorities to establish ratio by selecting a number of parcels from the assessment roll and proving their full value at trial.Once full value was determined, the total of the assessed values of the properties selected would be divided by the total of their full values to obtain the actual overall ratio of assessed value to true market value in the taxing district (seePeople ex rel. Hagy v. Lewis, 280 N.Y. 184, 20 N.E.2d 386).Disagreement as to which parcels were to be used was resolved by the trial court's selection of an equal number from each list submitted by the parties.Either litigant could supplement the select parcel system by offering evidence of the assessment ratio of parcels actually sold within the district during the periods under review.

In 1949, the State Board of Equalization and Assessment(SBEA) was created (seeL.1949, ch. 346) to establish the true ratios at which property was being assessed in all taxing districts and thus to equalize tax burdens between districts which were assessed at differing proportions to true value.The established rates also served to provide a basis for the distribution of State aid based on the assessed valuations (seeL.1949, ch. 346, § 1).Under relevant sections of the Real Property Tax Law, the SBEA is required to establish equalization rates for each city, town and village (Real Property Tax Law, § 1202;see, also, Real Property Tax Law, § 1250 et seq.), as well as for each county in the State(Real Property Tax Law, § 1214), and to sample the ratio of assessments in all cities, towns and villages in the State at least once every five years (Real Property Tax Law, § 1200).The rates themselves are arrived at by examination of sales and other data from the assessing units and the application of various formulae to the information obtained.In 1951 an effort to broaden the type of evidence admissible in an inequality trial by permitting the introduction of equalization rates was rejected in People ex rel. Yaras v. Kinnaw, 303 N.Y. 224, 101 N.E.2d 474, supra.The Yaras court(p. 228, 101 N.E.2d 474) decided that as far as inequality litigation was concerned, equalization rates "not only were entitled to no weight at all, but in truth were inadmissible under section 293 of the Tax Law."Although the court concluded that use of such rates would be misleading since they did not purport to reflect the ratio of assessments to value within the tax district itself, it noted (p. 233, 101 N.E.2d 474) that evidence of actual sales was entitled to "substantial weight" in proving inequality.The advent of scientifically devised random sampling ultimately became the basis for the introduction of actual sales by use of a statistical methodology with potential probative value (seeMatter of Mid-Island Shopping Plaza v. Podeyn, 25 Misc.2d 972, 204 N.Y.S.2d 11, affd.14 A.D.2d 571, 218 N.Y.S.2d 249, affd.10 N.Y.2d 966, 224 N.Y.S.2d 283, 180 N.E.2d 63) if properly utilized (cf.Matter Tilsac Corp. v. Assessor of Town of Huntington, 55 Misc.2d 431, 285 N.Y.S.2d 533, affd.41 A.D.2d 604, 340 N.Y.S.2d 548, mot. for. lv. to. app. den. 32 N.Y.2d 611, 344 N.Y.S.2d 1027, 298 N.E.2d 124).Nevertheless, as late as 1955, the select parcel method was still considered probative by the Court of Appeals, particularly if the sample parcels represented a fair cross-section of the situation in the tax district (seeMatter of Wolf v. Assessors of Town of Hanover, 308 N.Y. 416, 126 N.E.2d 537).

In 1961the Legislature attempted to liberalize the means of proving inequality by amending subdivision 3 of section 720 of the Real Property Tax Law(the successor to Tax Law, former § 293) to permit either party to introduce the State equalization rate established for the assessment roll for the year under review (seeL.1961, ch. 942).The Court of Appeals remained unimpressed, however, and in...