Title: Barrett/Canfield, LLC v. City of Rutland

State: vermont

Issuer: Vermont Supreme Court

Document:

Barrett/Canfield, LLC v. City of Rutland (98-475); 171 Vt. 196; 762 A.2d 823

[Filed 01-Sep-2000]

  NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
  40 as well as formal revision  before publication in the Vermont Reports. 
  Readers are requested to notify the Reporter of Decisions,  Vermont Supreme
  Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
  order that  corrections may be made before this opinion goes to press.

                                 No. 98-475

Barrett/Canfield, LLC	                         Supreme Court

                                                 On Appeal from
     v.		                                 Rutland Superior Court

City of Rutland	                                 May Term, 2000

Richard W. Norton, J.

John M. Ruggiero of Ruggiero Associates, Rutland, for Plaintiff-Appellant.

Christopher P. Sullivan, City Attorney, and Henry C. Brislin, Assistant City 
  Attorney, Rutland, for Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       JOHNSON, J.     Taxpayer Barrett/Canfield, LLC, appeals a decision on
  the tax assessment of  its property in the City of Rutland.  The property
  was formerly owned by Tambrands, Inc., and  consisted of 27.75 acres
  including a 217,000 square-foot industrial building.  On May 30, 1997, 
  taxpayer purchased 9.7 acres including the industrial building for
  $1,763,650.  The City subsequently  assessed the value of taxpayer's
  property at $4,598,000.  The trial court found that, because the  property
  was not adequately exposed to the market, the sale price was not a reliable
  indicator of fair  market value and set the assessment value at $4,000,000. 
  On appeal, taxpayer argues that because  the purchase was between a willing
  buyer and willing seller, was made in good faith, and was 

 

  contemporaneous with the assessment date, it should be dispositive of the
  fair market value.  We  agree and reverse.

       For months preceding the events of this case, local newspapers had
  reported that Tambrands  was considering closing its Rutland manufacturing
  plant.  In September 1996, taxpayer read in the  local newspaper that
  Tambrands had finally decided to close the plant.  Taxpayer contacted a
  real  estate broker, who inquired of Tambrands whether the plant was for
  sale.  These inquiries resulted in  an initial purchase and sale agreement
  for the property on October 18, 1996, for $2,000,000.  After  nine months
  of negotiations, the agreement was amended to reflect a subdivision of the
  property with  taxpayer taking only 9.7 acres, including the building. 
  This agreement was executed on May 30,  1997, for a sale price of
  $1,763,650.  It is undisputed that the sale was made in good faith between 
  two corporations at arms-length.

       The City of Rutland initially assessed the property as of April 7,
  1997, at a value of  $4,598,000.  Taxpayer appealed to the Board of Civil
  Authority which reduced the assessment to  $4,346,800.  Taxpayer next
  appealed to the Rutland Superior Court.

       At trial, both parties presented testimony as to the estimated fair
  market value of the property.  Taxpayer presented evidence of the purchase
  price as well as an independent appraisal  commissioned by the mortgage
  provider.  This appraisal estimated fair market value at $1,900,000, 
  utilizing both the income capitalization approach and the sales comparison
  approach.  This figure is  notably close to the sale price.  The City of
  Rutland presented the results of an appraisal that it had  commissioned
  which estimated fair market value at $4,000,000, utilizing the cost
  approach, the  capitalization approach, and the sales comparison approach. 
  After a hearing on the merits, the trial  court found that the sale price
  was not indicative of the fair market value because the property was  not
  actively 

 

  marketed.  

       The issue before us is whether market exposure is a necessary element
  in establishing a bona  fide sale.  This question is one of law.  Our
  review of conclusions of law is nondeferential and  plenary.  See Thompson
  v. Dewey's South Royalton, Inc., 169 Vt. 274, 276,