Society Hill at Merrimack Condominium Ass'n v. Town of Merrimack, 93-426

• Decision Date: 28 December 1994
• Docket Number: No. 93-426,93-426
• Citation: 651 A.2d 928,139 N.H. 253
• Parties: SOCIETY HILL AT MERRIMACK CONDOMINIUM ASSOCIATION and another, v. TOWN OF MERRIMACK.
• Court: New Hampshire Supreme Court

Page 928

651 A.2d 928

139 N.H. 253

SOCIETY HILL AT MERRIMACK CONDOMINIUM ASSOCIATION and another, v. TOWN OF MERRIMACK.

No. 93-426.

Supreme Court of New Hampshire.

Dec. 28, 1994.

Wenger & Cronin, P.C., Bedford (Peter D. Wenger, on the brief and orally), for plaintiffs.

Bossie, Kelly, Hodes & Buckley, P.A., Manchester (Laurence E. Kelly and J. Mark Cranford on the brief, and Mr. Cranford orally), for defendant.

THAYER, Justice.

The plaintiffs, Society Hill at Merrimack Condominium Association and 254 unit owners, appeal the decision of the Superior Court (Murphy, J.) denying an abatement of the property taxes imposed by the defendant, the Town of Merrimack (town). We affirm.

The plaintiffs petitioned the town for an abatement of taxes assessed as of April 1, 1991, on 254 condominium units at the community known as Society Hill at Merrimack. The town denied the plaintiffs' request for an abatement. The plaintiffs then filed a petition for abatement of taxes in superior court pursuant to RSA 76:17 (Supp.1993), and a hearing was held on April 20, 1993. At the hearing, the plaintiffs introduced evidence through an expert witness regarding the appropriate valuation for the subject properties. The expert's appraisals were based in part on a comparison of Society Hill units sold at a "market auction" conducted by the condominium developer during May 1991. The market auction consisted of an intensive advertising campaign followed by a minimum bid, no reserve auction. On April 29, 1993, the court denied the petition for abatement because the plaintiffs failed to demonstrate that their properties were assessed disproportionately higher than other properties in Merrimack.

We will not disturb the trial court's decision absent an abuse of discretion or a finding that the decision is unsupported by the evidence or erroneous as a matter of law. In re Kearsarge Regional School Dist., 138 N.H. 211, 214, 636 A.2d 1033, 1035 (1994); In re Tracy M., 137 N.H. 119, 125, 624 A.2d 963, 966 (1993).

"To succeed in being granted an abatement of taxes, the plaintiff[s] [have] the burden of proving by a preponderance of the evidence that [they are] paying more than [their] proportional share of taxes." City of Manchester v. Town of Auburn, 125 N.H. 147, 154, 480 A.2d 60, 65 (1984). The plaintiffs must show that "[their] assessment was disproportionately higher in relation to [their] true value than was the case as to other property in the [town]." Appeal of Lakeshore Estates, 130 N.H. 504, 505, 543 A.2d 412, 413 (1988).

In this case, the trial court found that the plaintiffs failed to establish the fair market value of the subject properties, and therefore failed to demonstrate that the subject properties were assessed disproportionately higher than other properties in Merrimack. The trial court based its decision in part on its finding that the sale prices of the property sold through the market auction, relied on by the plaintiffs to establish the value of their own properties, did not constitute fair market value. The plaintiffs challenge this finding.

The trial court relied on this court's definition of fair market value as "the price which in all probability would have been arrived at by fair negotiations between an owner willing to sell and a purchaser desiring to buy, taking into account all considerations that fairly might be brought forward and reasonably given substantial weight in such bargaining." Opinion of the Justices, 131 N.H. 504, 510, 555 A.2d 1095, 1099 (1989) (quotation and citation omitted). The plaintiffs argue that the trial court erred in applying that definition because: (1) alternative definitions were possible; and (2) the definition was improper for tax abatement cases because it was developed in eminent domain cases. The plaintiffs correctly note that there are alternative definitions of fair market value that might have been used by the trial court, see, e.g., Appeal of Lakeshore Estates, 130 N.H. at 508, 543 A.2d at 415; see also Black's Law Dictionary 597 (6th ed. 1990), but they incorrectly conclude that the trial court's choice of this, as opposed to some other formulation, resulted in reversible error. The fact that the definition was developed in an eminent domain case does not invalidate the trial court's use of it in this setting. Determination of fair market value is an issue of fact, and we will not disturb a finding by a trial court unless it is clearly erroneous or unsupported by the evidence. City of Manchester, 125 N.H. at 154, 480 A.2d at 65. The issue is whether the trial court could have correctly concluded that the sale prices that resulted from the market auction were not indicative of the actual value of the subject properties. We have recognized numerous factors that a court should consider when determining whether sale price is an indication of fair market value, including whether the sale was an arm's length transaction, whether additional incentives were offered, whether unusual duress existed against either the buyer or seller, and whether some relationship existed between the buyer and seller that would influence the sale price. See, e.g., Appeal of Lakeshore Estates, 130 N.H. at 508, 543 A.2d at 415; Rollsworth Tri-City Trust v. City of Somersworth, 126 N.H. 333, 335-36, 493 A.2d 462, 464 (1985); Berthiaume v. City of Nashua, 118 N.H. 646, 648, 392 A.2d 143, 144-45 (1978). Ample evidence supports the trial court's finding that the market auction prices were not indicative of the fair market values of the properties sold. For example, there were no negotiations between the buyer and...