IN THE COMMONWEALTH COURT OF PENNSYLVANIA

East Stroudsburg Area School District : : v. : No. 529 C.D. 2018
: ARGUED: September 9, 2019 Dallan Acquisitions, LLC, Monroe : County Board of Assessment : Revision, Monroe County and Middle : Smithfield Township, Marshalls : Creek Group, LLC : : Appeal of: Marshalls Creek Group, : LLC :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ELLEN CEISLER, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE CEISLER FILED: October 17, 2019

Appellant , Marshalls Creek Group, LLC (Taxpayer), successor in interest to Dallan Acquisitions, LLC (Dallan) , 1 appeal s from the order of the Court of Common
Pleas of Monroe Count y (trial court) 2 dated February 20, 2018, as modified by the order of March 13, 2018. Taxpayer filed a motion to quash a tax assessment appeal filed by Appellee, the East Stroudsburg Area School District (School District) ,

1 The caption in this case also lists the Monroe County Board of Assessment Revision (Board), Monroe County (County), and Middle Smithfield Township (Township) as partie s. The Board has filed a notice of non

- participation. The record does not refl ect any participation by the County or the Township.

2 The Honorable Arthur L. Zulick presided.2

pertaining to real property orig inally owned by Dallan and subsequently sold to Taxpayer . The trial court denied the motion to quash and later granted Taxpayer’ s motion to certify that order for immediate appeal. After thorough review, we affirm the trial court’s order

. I. Background

A. Selection of Properties for Assessment Appeals
A related tax assessment appeal matter was argued before this Court the same day as this case

. See E

. Stroudsburg Area Sch

. Dist

. v. Meadow Lake Plaza, LLC ( Pa. Cmwlth. , No. 371 C.D. 2018 , filed October 1 7 , 2019 ) ( Meadow Lake II ) . Our opinion in Meadow Lake II contains a more detailed recitation of the general background of the School District’s decision to appeal a number of tax assessments on real properties located in the School District. 3
Relevant here, the School District retained a consultant, Keystone Realty Advisors, LLC (Keystone) to identify properties in the School District that potentially were sufficiently under

- assessed that each would generate at least $10,000 per year in additional real property taxes ($10,000 threshold) in the event of a successful assessment appeal. Reproduced Record (R.R.) at 7a, 168a, 1161a

62a

. The School District did not provide any criteria to Keystone for selection of properties , other than the $10,000 threshold

. R.R. at 7a

. The School District chose the $10,000 threshold based on its conclusion that appeals with smaller potential tax revenue gains would not be cost

- effective to pursue. R.R. at 7a, 169a, 1164a

- 67a

.

3 The School District is entitled to pursue assessment appeals to the same extent as a property owner: “ A taxing district shall have the right to appeal any a ssessment within its jurisdiction in the same manner, subject to the same procedure and with like effect as if the appeal were taken by a taxable person with respect to the assessment . . . .” 53 Pa.C.S. § 8855.3

Applying the $10,000 threshold as instructed by the School District, Keystone identified and recommended a number of properties for assessment appeals. Of significance here, based on the $10,000 threshold, all of the properties Keystone identified and recommended for assessment appeals by the Schoo l District were commercial income

- generating properties

. R.R. at 1164a

- 65a

. After reviewing each of Keystone’s recommendations, R.R. at 1170a

- 77a, t he School District pursued assessment appeals concerning all of the properties identified by Keystone. R.R. at 168a, 1172a

- 73a . The School District did not pursue assessment appeals of any properties other than those identified and recommended by Keystone. R.R. at 1172a

- 73a. Thus, all of the School District’s assessment appeals related to commercial prop erties. R.R. at 7a

.

B. Assessment Appeal Regarding the Property Taxpayer is the current owner of a shopping center (Property) in Middle Smithfield Township, Monroe County , located in the School District

. The Property was among a number of real propertie s in the School District identified by Keystone as meeting the $10,000 threshold and recommended for assessment appeals. 4 T he
School District filed an assessment appeal with the Monroe County Board of Assessment Revision (Board) concerning the Property fo r the 2016 tax year. The Board denied the appeal, and the School District filed a petition for review in the
trial court. While the School District’s assessment appeal concerning the Property was pending, Taxpayer bought the Property from Dallan. Taxpay er filed a motion to

4 The Property is currently assessed as hav ing a fair market value of $4,347,759. Based on the C ounty’s established predetermined ratio of 25%, the Property’s current assessed valuation is $1,086,940. R.R. at 7a

. Taxpayer purchased the Property from Dallan in 2016 for $23,650,000. R.R. at 6a

.4

quash the assessment appeal

. Taxpayer contended the School District’s application of the $10,000 threshold and the resulting selection of only commercial properties for assessment appeals violated the tax uniformity requirement of the Pennsylvania
Constitution ( U niformity C lause)

. 5 Further, Taxpayer a sserted the School District deliberately avoided assessment appeals against residential properties for political

reasons. 6 After discovery and a hearing, 7 the trial court denied Taxpayer ’ s motion to quash the School District’s assessment appeal concerning the Property. The trial court based its factual findings on the evidence presented by the parties. The trial court found the evidence did not show the School District intended to appeal only commercial property assessments. R.R. at 8a

. The trial court also rejected, as contrary to the evidence, Taxpayer’ s contention that the School District intentionally
avoided assessment appeals concerning residential properties in order to avoid angering voters. Id. The trial court then applied the same legal ana lysis as in its decision in East Stroudsburg Area School District v. MNA Stroud Realty LLC (No. 8354 CV 2015, filed Jan. 30, 2018) ( Meadow Lake I ) , affirmed by Meadow Lake II

. R.R. at 8a

.

5 “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.” Pa. Const. art. VIII, § 1.

6 Taxpayer also alleged the School District engaged in a practice of projecting large budget deficits, while maintaining a large surplus balance, in order to increase taxes. T axpayer do es not assert this argument on appeal to this Court.

7 The trial court allowed the parties to address the motion to quash at the start of trial on the merits, and then held a separate hearing on the motion several months there after. R.R. at 5a

6a

.5

Based on that analysis, the trial court concluded the $10,000 threshold did not violate
the U niformity C lause

. Id

. Taxpayer filed a motion requesting certif ication from the trial court for an immediate appeal of its interlocutory order denying Taxpaye r’s motion to quash

. The trial court granted the motion and amended its prior order pursuant to
P ennsylvania Rule of Appellate Procedure 341(c)

. T his appeal by Taxpayer
followed. II. Issues on Appeal On appeal, 8 Taxpayer raise s both legal and factual arguments. Taxpayer
insist s the School District’s assessment appeals targeting only commercial properties
violated the U niformity C lause , under our Supreme Court’s recent decision in Valley Forge Towers Apartments N, LP v. Upper Merion Area School District , 163 A.3d 962 (Pa. 2017). In a related sub

- argument, Taxpayer contend s the trial court’s analysis also applied an incorrect legal standard in its uniformity analysis, contrary

to the holding of Valley Forge

. Factually, Taxpaye r assert s the evidence in the record supports its position
rather than that of the School District

. Taxpayer maintain s the trial court failed to apply Taxpayer’s purportedly unrebutted and uncontested evidence, as well as alleged admissions by the School District. Taxpayer contend s the School District failed to prove that it ever adopted an assessment appeal program or that it implemented the $10,000 threshold evenly among all types of properties. Taxpayer
further maintain s the trial court erred in relyi ng on the testimony of the School

8 This Court’s review of the trial court’s decision in a property tax assessm ent appeal is limited to a determination of whether the trial court abused its discretion, committed an error of law, or made findings of fact not supported by substantial evidence. Maula v. Northampton Cty. Div. of Assessment , 149 A.3d 442 (Pa. Cmwlth. 2 016) ( en banc ).6

District’s chief financial officer (CFO). T axpayer also contends the trial court improperly relied on evidence outside the record.
III. Discussion
A. Taxpayer’ s Legal Arguments
In In re Appeal of Springfield School Distr ict , 101 A.3d 835 (Pa. Cmwlth. 2014), overruled in part on other grounds by Valley Forge , this Court considered a tax assessment appeal raising a similar issue to that presented in the instant appeal.
The school district in Springfield chose to appeal ass essments where there was an estimated potential tax revenue gain of $9,000 to $11,000 per year

– notably comparable to the $10,000 threshold here. Like the $10,000 threshold applied by
the School District , the monetary threshold applied in Springfield res ulted in assessment appeals affecting commercial properties. However, this Court held that such a result did not warrant a conclusion that the selection of properties for assessment appeal s based on a monetary threshold violated the U niformity C lause

. In Springfield , as in this case, the school district asserted it filed a n assessment appeal against the property at issue based solely on the application of the monetary threshold, not on the propert y’s commercial status. W e reasoned , however, that even

a decision to target only commercial properties for assessment appeals would not
have create d an impermissibly non

- uniform subclass of taxpayers or properties. Subsequently, in Valley Forge , a group of taxpayers challenged a school district’s decision to a ppeal assessments of commercial properties but not residential properties. The school district focused solely on commercial properties, based on a general perception that their values were usually higher than the values of residential properties, and furt her, a concern that appeals of assessments on residential properties would be politically unpopular. Our Supreme Court agreed with the7

taxpayers that such discrimination between property classifications created impermissible subclasses that violated the U niformity C lause . The Court also
overruled Springfield to the extent that this Court had approved selections of properties for assessment appeals based on their commercial or residential character. Specifically, the Court held that “ a taxing authority is not permitted to implement a program of only appealing the assessments of one sub

- classification of properties,
where that sub

- classification is drawn according to property type

– that is, its use as commercial, apartment complex, single

- family residenti al, industrial, or the
like. ” 9 Valley Forge , 163 A.3d at 978 (emphasis added)

. Of significance here, however, our Supreme Court in Valley Forge expressly
noted that unlike a selection based on the commercial or residential character of a property, a taxing district’s choice to pursue assessment appeals based solely on financial criteria would not necessarily offend the U niformity C lause : Our disa pproval of Springfield ’ s interpretation of this Court ’ s precedent should not be equated to disagreement with the result it reached. In Springfield , the property owners challenged a school district ’ s policy of using of a monetary threshold to decide which properties to appeal.

. . . They did not allege a scheme involving disparate treatment of property sub

- classification s drawn according to property type or the status of its owner as a resident or non

- resident of the taxing district.
Valley Forge , 163 A.3 d at 975 n.13. Further, the Court took pains to observe “ that nothing in [the Valley Forge ] opinion should be construed as suggesting that the use of a monetary threshold

– such as the one challenged in Springfield

– or some other
selection criteria woul d violate the U niformity C lause if it were implemented

9 The school district in Valley Forge had a specific multi

- year assessment appeal plan that would have targeted apartment complexes in one tax year, shopping centers in another, offices in still another, and so on

.8

without regard to the type of property in question or the residency status of its

owner. ” Id. at 979.
In Meadow Lake I , the trial court concluded that our holding in Springfield
and our Supreme Court’s reasoning in the quoted portions of Valley Forge supported the School District’s position that the $10,000 threshold is constitutional. We agreed
in Meadow Lake II

. Here, the trial court cited and relied on its legal analysis in
Meado w Lake I and reached the same conclusion. Consistent with our holding in
Meadow Lake II

, w e discern no error in that conclusion. Contrary to Taxpayer’ s argument, we find nothing in our Supreme Court’s analysis in Valley Forge that precludes application o f a reasonable monetary threshold for assessment appeals, based on an estimate of the minimum potential revenue gain that will make a tax assessment appeal cost

- effective. Indeed, a taxing district’s selection of a property for an assessment appeal that f ailed to take into account whether the appeal was likely to be cost

- effective might be fiscally irresponsible. Taxpayer also argue s the trial court required evidence of wrongful conduct by the School District, and thus improperly applied a rational basis analysis in concluding that the $10,000 threshold was consistent with the U niformity C lause. Cf. Valley Forge (rejecting rational basis analysis as the standard in assessment uniformity cases). We discern no merit in this argument. The trial court prope rly
relied on applicable precedents, Valley Forge and Springfield

. Both decisions support the premise that selecting properties for assessment appeals based on financial criteria alone, without regard to property type, does not violate the
U niformity C lause.9

We agree with the trial court that Valley Forge and Springfield support the School District’s position that the $10,000 threshold does not violate the U niformity
C lause.
B. Taxpayer’ s Factual Arguments The trial court was the finder of fact in this case. As such, it maintained exclusive province over the credibility of witnesses and the weight of the evidence.
In re Penn

- Delco Sch. Dist. , 903 A.2d 600 (Pa. Cmwlth. 2006). The trial court was
free to be lieve all, some, or none of the evidence presented, to make all credibility determinations, and to resolve all conflicts in the evidence. Boro Constr., Inc. v. Ridley Sch. Dist. , 992 A.2d 208 (Pa. Cmwlth. 2010). Notably, the trial court was not required to accept even unrebutted evidence from Taxpayer’ s expert

. Green v. Schuylkill Cty

. Bd. of Assessment Appeals , 772 A.2d 419 (Pa. 2001). This Court is prohibited from making contrary credibility determinations or reweighing the evidence. Penn

- Delco . We are bound by the findings of the trial court that have adequate support in the record, so long as those findings do not reflect capricious disregard of competent and credible evidence. Leon E. Wintermyer, Inc. v. Workers’ Comp. Appeal Bd. (Marlowe) , 812 A .2d 478 (Pa. 2002). Capricious disregard occurs only when the fact

- finder deliberately ignores relevant, competent
evidence. Id

. Here, the trial court obviously credited testimony that the School District CFO concluded the $10,000 threshold was the mini mum potential gain that would make an assessment appeal cost

- effective for any property. R.R. at 7a, 169a, 1164a

- 67a

. 10

10 Notably, Taxpayer’ s cou nsel expressly conceded, “When you look at the School District’s minutes, it becomes clear that what happens is their consultants provide recommendations, admittedly , based on potential appeals that would result in the highest revenue. They submit that to the [School] Board for c onsideration.” R.R. at 1103a (emphasis added)

.10

The trial court evidently credited testimony that the School District relied on Keystone to identify properties meeting the $10,000 thr eshold , R.R. at 1178a, 1180a ; that Keystone was instructed to search for any and all properties meeting that
threshold , R.R. at 1162a

- 63a ; and that the School District would have filed assessment appeals relating to residential properties as well as commer cial properties, had Keystone identified any residential properties as meeting the $10,000
threshold. R.R. at 1162a

- 63a

. That testimony constituted substantial evidence supporting the trial court’s factual findings. Taxpayer’ s factual arguments to the c ontrary are not persuasive

. 11 For example, Taxpayer aver s that the School District admitted, on the record, to the
material facts averred in Taxpayer’s motion to quash . Brief for Appellant at 7. Actually, t he School District specifically denied that it engaged in disparate treatment of subclasses of real property, R.R. at 1062a; that it “has an illegal and systematic practice” regarding assessment appeals, R.R. at 1063a; that it avoided assessment appeals against residential properties for political rea sons, R.R. at 1066a , 1069a ; that it targeted properties for assessment appeals in a non

- uniform manner or without considering uniformity and fairness in taxation , R.R. at 1068a , 1070a ; and that it “concentrated its appeal solely on a subclass of highly

- ass essed commercial property,” R.R. at 1068a

. Contrary to Taxpayer’ s insistence, the record demonstrates Taxpayer’s evidence was both contested and contradicted by the School District. Taxpayer

11 Taxpayer’ s recitation of facts in its principal brief consists largely of argument advocating Taxpayer’ s own version of the facts. We remind counsel for Taxpayer that the Rules of Appellate Procedure expressly require exclusion of all argument from the statement of facts: “The statement of the case shall not contain any argument. It is the responsibility of appellant to present in the statement of the case a balanced presentation of the history of the proceedings and the respective contentions of the parties.” Pa. R.A.P. 2117(b).11

point s to testimony by its tax uniformity expert, Reaves C. Luk ens, III (Lukens), that
there were approximately 20 commercial properties and 10 residential properties within the School District that fit the $10,000 threshold, but which were not the subjects of assessment appeals. R.R. at 1180a.
Lukens conceded he did not independently confirm the property type of any of the properties he listed in his report; he simply accepted the property type code in the database he reviewed. R.R. at 1117a. Further, when asked whether his method of analysis was similar to that used by Keystone or other consultants to identify
under

- assessed properties, Lukens could only say he “suspect[ed]” it was similar.
R.R. at 1141a. On cross

- examination, he acknowledged he did not investigate the actual market value of any of the propert ies he identified; he merely used each property’s sale price as “a stand

- in” for market value. R.R. at 1120a. However, he admitted that he never even reviewed the property deeds. Id. Further, he stated that as an appraiser, “I would not use a sale pric e and turn that into my opinion of market
value.” Id. Nonetheless, he testified immediately thereafter that he was “accepting sale prices as a reasonable indication of market value . . . [a]nd usually they’re a pretty good proxy for market value.” Id. Asked whether he could guarantee that a property was under

- assessed, based solely on deed price, Lukens responded, “I would be reluctant to guarantee anything. This is raw data that got processed. I’m

a one

- trick pony. I don’t want to put my license on the line doing an appraisal.” Id. at 1122a. Thus, Lukens’s expert opinion cannot reasonably be deemed either
uncontested or uncontradicted. Moreover, it was not unequivocal. Taxpayer also argue s the trial court erroneously relied on facts and reasoning
from its decision in Meadow Lake I , “ without reference to most of the evidence of this record.” Brief for Appellant at 8. Contrary to Taxpayer’ s representation, the12

trial court never mentioned a single fact from Meadow Lake I ; it merely note d

– accurately

– that the two cases were similar. More importantly, the trial court did

not rely on any facts from Meadow Lake I

. As for reference s to th is case’s record, Taxpayer cite s no authority requiring a finder of fact to provide record citations for its findings. In any event, a s set forth above, the record contain s substantial evidence to support the trial court’s findings. Taxpayer’ s assertion of facts allegedly supporting an inference of a political motive on the part of the School District is likewise without merit. Taxpayer
contend s a school board member asked whether the properties being recommended for appeal were commercial or residential, and t he School District’s CFO responded
that “ all the properties identified by th e School District’s consultant were commercial, which he found impressive.” Brief for Appellant at 11. This is a gross
mischaracterization of the cited school board minutes, which actually stated the School District’s CFO and Solicitor “were impressed wi th the amount of work Keystone Realty did and time they [ sic ] spent.” R.R. at 190a (emphasis added)

. Taxpayer assert s t he School District “agreed” that it “neglected” to appeal the assessments of 20 commercial properties and 10 residential properties that met the $10,000 threshold. Brief for Appellant at 13. During t he cited discussion among
the court and counsel for bot h parties , t he School District’s counsel conceded that
Lukens testi

fied to that effect on behalf of Taxpayer. However, c ounsel for the School District also stated, “I don’t believe Mr. Lukens has provided a basis for a finding that these are properties th at meet [the $10,000] threshold.” R.R. at 1180a. Taxpayer contend s t he trial court “ordered the School District to respond to [Taxpayer’ s ] expert reports by producing the School District’s own expert reports” but “[t]he School D istrict never produced a r ebuttal expert report.” Brief for13

Appellant at 14. T his assertion by Taxpayer mischaracteriz es the trial court’s
directive. The trial court never ordered the School District to file an expert report; it merely imposed a filing deadline for any such repo rt the School District might
decide to submit. See id

. Taxpayer cite s no authority for its implicit argument that the trial court was required to accept Taxpayer’s expert report as credible in the absence of an opposing report. Indeed, that is not the l aw. As explained above, the trial court, as the finder of fact, was free to reject any evidence, including expert
evidence and unrebutted evidence. Notably, Taxpayer’ s counsel acknowledged th e question of whether the
School District deliberately avoid ed assessment appeals concerning residential properties was a credibility issue

. R.R. at 1082a. The record contains substantial
evidence support ing the trial court’s finding s of fact that the School District did not act with a political motive in selecting properties for assessment appeals, and did not set out with the intent to file assessment appeals solely against commercial properties. See R.R. at 8a

. We will not disturb those findings on appeal.
IV. Conclusion Based on the foregoing discussion, we a ffirm the trial court’s order denying Taxpayer’ s motion to quash the School District’s assessment appeal.

__________________________________ ELLEN CEISLER , J udgeIN THE COMMONWEALTH COURT OF PENNSYLVANIA

East Stroudsburg Area School District : : v. : No. 529 C.D. 2018
: Dallan Acquisitions, LLC, Monroe : County Board of Assessment : Revision, Monroe County and M iddle : Smithfield Township, Marshalls : Creek Group, LLC : : Appeal of: Marshalls Creek Group, : LLC :

O R D E R

AND NOW, this 17 th day of October, 20 19, the February 20, 2018 order of the Court of Common Pleas of Monroe County is AFFIRMED.

__________________________________ ELLEN CEISLER , J udge