Weissenberger v. Chester Cnty. Bd. of Assessment Appeals

• Citation: 62 A.3d 501
• Parties: Guntram WEISSENBERGER d/b/a Black Hawk Circle Apartments v. CHESTER COUNTY BOARD OF ASSESSMENT APPEALS and Downingtown Area School District. Appeal of: Downingtown Area School District.
• Decision Date: 08 March 2013
• Court: Commonwealth Court of Pennsylvania

62 A.3d 501

Guntram WEISSENBERGER d/b/a Black Hawk Circle Apartments

v. CHESTER COUNTY BOARD OF ASSESSMENT APPEALS and Downingtown Area School District.Appeal of: Downingtown Area School District.

Commonwealth Court of Pennsylvania.

Argued Dec. 12, 2012.

Decided March 8, 2013.

Mark P. Thompson and Scot R. Withers, West Chester, for appellant.

Charles G. Miller and Donald T. Petrosa, Media, for appellees Guntram Weissenberger and Black Hawk Circle Apartments.

Jeffrey R. Sommer, West Chester, for appellee Chester County Board of Assessment Appeals.

BEFORE: PELLEGRINI, President Judge, and LEADBETTER, Judge, and SIMPSON, Judge, and LEAVITT, Judge, and BROBSON, Judge.

OPINION BY Judge SIMPSON.

In these tax assessment appeals raising as-applied constitutional challenges, Downingtown Area School District (School District) appeals the decision of the Court of Common Pleas of Chester County (trial court) which reversed an increase in the assessed value of two parcels based on a determination that the School District intentionally and selectively exercised its right to appeal, thereby violating the taxpayer's entitlement to uniform treatment. More particularly, the trial court sustained the appeals of Guntram Weissenberger d/b/a Black Hawk Circle Apartments (Taxpayer) from decisions of the Chester County Board of Assessment Appeals (Board) which increased the assessed value of two parcels on which an apartment complex is located. Applying existing case law, we reverse, thereby reinstating the increased assessed values found by the Board.

Background

Taxpayer owns an apartment complex situated on two parcels of property located in the School District. One parcel is six-and-one-half acres in size and is improved with seven buildings containing 108 apartments. The other parcel is three-and-one-half acres, and is improved with seven buildings containing ninety-three apartment units. For tax year 2003, the larger parcel had an assessed value of $3,174,040, and the smaller parcel was assessed at $2,937,810.

The School District participates in an organization known as the Chester County School District Managers. That organization hired a real estate appraisal firm, Cole, Lynch, to review the market values and assessments for all apartment complexes in Chester County for the 2004 tax year. Cole, Lynch generated a report that identified apartment complexes that were potentially under-assessed in the County. According to the report, five of the potentially under-assessed apartment properties (a total of six tax parcels) were in the School District. Reproduced Record (R.R.) at 62a. Coyle, Lynch recommended that an assessment appeal be taken by School District only with respect to the two tax parcels owned by Taxpayer. Id.¹ Based upon the potential for increased tax revenues, the School District asserts it made a “business decision” to accept the recommendation and appeal Taxpayer's assessments. The School District did not take any other assessment appeal that year—commercial, residential or otherwise.

School District's Appeal to Board

Following a hearing, the Board increased the fair market value of each parcel by approximately $1 million (specifically, a total of $2,128,050). The resulting increased assessments represented approximately an additional $53,000 in annual tax revenue for the School District.

Taxpayer's Appeal to the Trial Court

Taxpayer appealed the increased 2004 assessments, contending in part that the increased assessments were unconstitutional and that the School District's method for selecting properties subject to appeal was arbitrary and capricious. Taxpayer did not challenge the increased fair market value of the properties or the assessment ratio applied. The trial court consolidated the two appeals.

After a prolonged period of quiescence, the parties filed cross-motions for summary judgment. While the trial court recognized the School District's statutory right to appeal, it concluded that the method used by the School District to select the properties subject to appeal was unconstitutional. The court stated: “Here, the School District chose to challenge the assessment of only one apartment complex despite evidence that other complexes were also under-assessed. This intentional, selective application of the School District's right to appeal violated [Taxpayer's] entitlement to uniform treatment under the law.” Trial Ct., Slip Op. at 8. The court relied on Tredyffrin–Easttown School District v. Valley Forge Music Fair, Inc., 156 Pa.Cmwlth. 178, 627 A.2d 814 (1993), to support its decision. The trial court granted Taxpayer's motion for partial summary judgment. This appeal by the School District followed.²

Contentions

On appeal, the School District contends that the trial court erred in concluding that the process it employed in appealing the assessments rendered the increased assessments unconstitutional. In support, it notes our case law recognizing that school districts have a statutory right to appeal an assessment in the same manner, subject to the same procedures and limitations, as individual property owners. It specifically notes that in In re Springfield School District, 879 A.2d 335, 341 (Pa.Cmwlth.2005), this Court stated that the statutory provision granting the right of appeal “contains no limits on the process by which school districts decide to appeal.... [T] he Law places no restrictions on the ‘methodology’ employed by a school district or by an individual property owner in determining whether to appeal.” Looking to our case law, the School District maintains that an assessment appeal by a taxing entity lacking the power to revise assessment rolls, reassess property or determine assessment ratios, does not constitute deliberate, purposeful discrimination or result in an impermissible spot reassessment.

The School District further maintains that its failure to challenge the assessments of the other apartment complexes is not dispositive: the statutory provision granting the right of appeal does not require a taxing entity to appeal all properties believed to be under-assessed. Moreover, while not engaging in an equal protection analysis, it notes that the other properties identified as possibly under-assessed in the Coyle, Lynch report were only marginally under-assessed compared to Taxpayer's properties.

In response, Taxpayer argues that the School District's exercise of its statutory right to appeal an assessment must be exercised within constitutional constraints. It notes that Springfield and its progeny recognize only that an assessment appeal in and of itself is not discriminatory; those cases do not address when an appeal may violate principles of uniformity and equal protection. According to Taxpayer, the facial validity of the process does not shield governmental action from constitutionalscrutiny. Taxpayer maintains that the School District's method of selecting properties and the subject appeal demonstrate an intentional, selective, discriminatory application of the right of appeal—apartment properties were targeted as a class and the Black Hawk complex was treated differently than other properties in that sub-class—it was the only property subject to an assessment appeal in the entire County, despite evidence that other apartment complexes were under-assessed as well.

Discussion

Taxpayer challenges the application of the statutory right of a taxing district to appeal any assessment within its jurisdiction, under the circumstances of this case. Constitutional challenges are of two kinds: they either assail the statute on its face, or as applied in a particular case. Lehman v. Pa. State Police, 576 Pa. 365, 839 A.2d 265 (2003). “[A]n as-applied attack ... does not contend that a law is unconstitutional as written but that its application to a particular person under particular circumstances deprived that person of a constitutional right.” United States v. Mitchell, 652 F.3d 387, 405 (3d Cir.2011) (quoting United States v. Marcavage, 609 F.3d 264, 273 (3d Cir.2010)); see also Commonwealth v. Brown, 26 A.3d 485 (Pa.Super.2011).

A taxpayer alleging that the administration of a tax violates uniformity principles ³ must demonstrate “deliberate, purposeful discrimination in the application of the tax before constitutional safeguards are violated.” In re Penn–Delco Sch. Distr., 903 A.2d 600, 605 (Pa.Cmwlth.2006). We assume without deciding that an appeal by a taxing district from an assessment constitutes the application or enforcement of a tax, so as to implicate uniformity principles. See Vees v. Carbon Cnty. Bd. of Assessment Appeals, 867 A.2d 742 (Pa.Cmwlth.2005) ( en banc ).

“When a taxpayer believes that he has been subjected to unequal taxation ... he generally must demonstrate that: (1) the enactment results in some form of classification; and (2) such classification is unreasonable and not rationally related to any legitimate state purpose.” Clifton v. Allegheny Cnty., 600 Pa. 662, 685, 969 A.2d 1197, 1211 (2009) (citing Wilson Partners L.P. v. Bd. of Fin. & Revenue, 558 Pa. 462, 737 A.2d 1215 (1999)). In the absence of classifications that are “suspect” or “sensitive,” or that implicate fundamental or important rights, classifications are subject to the deferential rational basis test. Id. at 686, 969 A.2d at 1211 n. 19 (citing Commonwealth v. Albert, 563 Pa. 133, 758 A.2d 1149 (2000)).

Significantly, Taxpayer does not contest that its properties were under-assessed, and it does not dispute the increased value assigned to its properties. Instead, it advances the contention that the under-assessment, through which it pays comparatively less of the cost of local government, enjoys constitutional protection from School District's appeal. Not only does this position lack a common-sense allure, but it also lacks factual and legal support.

Factually, Taxpayer's properties were the only potentially under-assessed properties recommended by an outside consultantfor appeal...