Southern Bell Tel. & Tel. Co. v. Dade County

Decision Date10 January 1973
Docket NumberNo. 39772,39772
Citation275 So.2d 4
PartiesSOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a New York corporation, Petitioner, v. COUNTY OF DADE, a political subdivision, et al., Respondents.
CourtFlorida Supreme Court

John H. Wahl, Jr., of Walton, Lantaff, Schroeder, Carson & Wahl, Miami, William H. Adams, III of Mahoney, Hadlow, Chambers & Adams, Nathan H. Wilson, Jacksonville and John A. Boykin, Jr., Atlanta, Ga., for petitioner.

Stuart Simon, Dade County Atty., and Robert A. Ginsburg, Asst. County Atty., for respondents.

Robert L. Shevin, Atty. Gen. and Winifred L. Wentworth, Asst. Atty. Gen., for the State of Florida; Rivers H. Buford, Jr., Charles E. Miner, Jr. and Gene T. Sellers, Counsel, State of Florida Board of Education, Tallahassee, for the State of Florida.

Benjamin K. Phipps, for the Tax Assessors Assn. of Florida, as amici curiae.

PER CURIAM.

By petition for certiorari, we have for review a decision of the District Court of Appeal, Third District (234 So.2d 135) on grounds of conflict with both prior decisions of this Court and different District Courts of Appeal of this State on the same points of law. Fla.Const., Art. V, § 4, F.S.A. Kelly v. Threlkeld, Fla.App.1966, 193 So.2d 7. Florida Moss Products Co. v. City of Leesburg, (1927) 93 Fla. 656, 112 So. 572; Walter v. Schuler, Fla.1965, 176 So.2d 81; City of Tampa v. Colgan, (1935) 121 Fla. 218, 163 So. 577; Burns v. Butscher, Fla.1966, 187 So.2d 594; Dickinson v. Geraci, Fla.App.1966, 190 So.2d 368; Camp Phosphate Co. v. Allen, (1919) 77 Fla. 341, 81 So. 503; Dade County v. Salter, Fla.1967, 194 So.2d 587.

Petitioner sought relief from the 1967 assessment of its tangible personal property in Dade County, alleging that its property was assessed at a substantially higher percentage of market value than that which the tax assessor had systematically assessed the property of other taxpayers. Petitioner contended that (1) although its property was assessed at full market value, the assessor had generally assessed real property at a ratio of approximately 80% Of its market value, and (2) the assessor's systematic use of net book value to assess tangible personal property resulted in the personal property of other taxpayers being assessed at a level substantially lower than that of the petitioner's property.

Respondents admitted the petitioner's property had been assessed at its full market value thereby reducing the basic issue for trial to the proof and effect of other property in the county being assessed at a lower level.

In a very lengthy opinion detailing the testimony and exhibits received, the trial judge denied petitioner's requested relief. On appeal, the District Court quoted extensively from the judgment, added its own language and affirmed denial of relief. See Foley v. Weaver Drugs, Inc., Fla.1965, 177 So.2d 221.

To prove the assessment level of real property in the county, petitioner introducted evidence of three assessment sales ratio studies.

First, assessment sales ratio studies were described by two expert witnesses, Weil and Ekeblad, 1 which established that an assessment sales ratio study is a scientific comparison of the assessments of properties with the sales prices of a statistically reliable sample of properties that are actually sold in the taxing jurisdiction. These experts confirmed that sales ratio studies give as objective measure of the level of assessment as can possibly be obtained, that they are widely used in other states, and that the generally accepted method of conducting them is outlined in a Guide for Assessment-Sales Ratio Studies published by the National Association of Tax Administrators. The sales used for their review, covering July 1, 1966, to June 30, 1967, were conducted under their instruction and supervision. pervision. The transactions (totaling 5,559) considered in this study were selected by using a random sampling procedure (every seventh sale listed on the public records), wherein the sales price of each selected property was determined from the documentary stamps on the recorded deed. The amount of the assessment was determined from the tax roll. This information was noted on a separate card prepared for each transaction, together with a notation indicating whether the transaction fell into one or more of 23 special categories such as sheriff's sales, sales by fiduciaries and the like. Transactions which fell in these later categories were disqualified for consideration because it could not be assumed that they were arm's length transactions, thereby casting doubt on use of the sales price as evidence of the market value of the property transferred. Of the 5,550 transactions originally selected, 2,714 were thus disqualified.

The ratio of the assessment to the sales price for each of the 2,845 remaining transactions was then computed and noted on the card for that transaction. The cards were then arranged in ascending order of ratios, and the number of ratios in each range of five percentage points was recorded. The results were furnished to the expert witnesses who made the calculations determining the median level of assessment. They established that this study was conducted according to generally accepted principles for conducting sales ratio studies and specifically that it conformed in all significant respects to the procedure outlined in the Guide for Assessment Sales Ratio Studies.

The experts' actual experience in other states demonstrated that in such a study documentary stamps were reliable evidence of sales prices. Dr. Weil's studies disclosed that understamping was as prevalent as overstamping and that with the relatively large number of transactions utilized in sales ratio studies, any inaccuracies that creep in tend to offset one another with the result that studies based on documentary stamps are quite reliable.

Dr. Ekeblad, who made the statistical computations, demonstrated that in 1967 the best single estimate of the median level of assessment of all real properties was 81.37% Of market value, with only 99 chances in 100 that the median level of assessment was no lower than 80.58% Or higher than 82.17%.

Second, the next sales ratio study introduced by petitioner covered all Dade County sales transactions handled from July 1, 1966, to June 30, 1967, by the Keyes Company, one of the largest real estate firms in Florida. This study included only transactions in which a sales commission had been paid by one of the parties to Keyes. Therefore, there was no doubt that all of them involved actual sales price. Documentary stamps were not relied on to determine sales prices in this study. The prices were determined from the records of Keyes. As in the first study the tax roll was examined, the actual sales prices were compared with the assessments and a ratio of the sales price to the assessment of each property was computed. The resulting ratios were analyzed by the same process used in the Weil-Ekeblad study and disclosed a median assessment ratio of 82.01%. The similarity in the results of this study with those of the Weil-Ekeblad study supported the conclusions given by Weil and Ekeblad that a detailed investigation of each and every sale of record was unnecessary.

The Third, and final study introduced was made by the U.S. Bureau of Census, which considered sales of non-farm residential properties for the last six months of 1966. This study disclosed a median ratio of 83.2%.

Even though the three studies used samples selected in different ways, they reached remarkably similar results, ranging from a low of 81.37% To a high of 83.2%, with a variation of only 1.83%.

To show that the tangible personal property of other taxpayers had been assessed at a substantially lower level than the level at which petitioner's property was assessed, petitioner established (1) that the assessor had generally assessed personal property at its book value, (2) that under regulations of the Florida Public Service Commission and the Federal Communications Commission, petitioner is required to include in the cost of its property for accounting purposes certain items not generally capitalized by unregulated taxpayers, and (3) petitioner is required to use the straight line method of taking depreciation while other taxpayers may use various kinds of accelerated depreciation. On this point petitioner established that if other taxpayers Were taking advantage of the accounting options available to them the book value of their property would range from 21% To 61% Lower than the book value of similar property owned by petitioner. However, petitioner was unable to establish the extent to which other taxpayers actually were taking advantage of these options.

Respondents did not offer any evidence that sales ratio studies of the type introduced by petitioner are not a reliable and reasonable means of determining the assessment level in a taxing jurisdiction or that the studies introduced by petitioner had not been conducted according to generally accepted standards for conducting sales ratio studies, or that real property in the county was assessed at a level higher than the level disclosed by the studies. Instead, respondents opined that sales price is only one of the eight (formerly seven) factors which must be considered under Section 193.011 (formerly 193.021) Fla.Stat., F.S.A. in arriving at just valuation of property. They further opined that even if the price at which real property is sold is good evidence of its market value, that price may not be inferred from documentary stamps. They contended finally that the court should not accept a sales ratio study as reliable unless an investigation of each transaction is made to determine the sales price, whether the transaction was in fact at arm's length and, if so, whether the parties were fully informed when they agreed on the price.

Confronted with the foregoing, the Circuit Court...

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