Opinion ID: 1966660
Heading Depth: 1
Heading Rank: 3

Heading: Harvard Pilgrim's Annual Filings

Text: Harvard Pilgrim timely filed its annual account filings with the city assessor for 1997-1999. Along with the city's form discussed above, Harvard Pilgrim provided a detailed net book value report listing approximately 9,000 assets, their date of purchase, and depreciation. On May 14, 1997, however, Moses notified the city assessors that Harvard Pilgrim had inaccurately reported its tangible personal property, and filed an amended return. In the amended return, Moses explained that Harvard Pilgrim had included assets that had been disposed in its report. The amended return also contended that labor, freight, and installation costs had been included improperly in Harvard Pilgrim's original filing. Based on these inaccuracies, Moses hired Norman Levy & Associates, an inventory specialist company, to help Harvard Pilgrim identify and appraise its assets. McEachern, an appraiser with Norman Levy & Associates, was in charge of the Harvard Pilgrim appraisal project. McEachern subsequently completed an appraisal report, dated August 12, 1998. The appraisal purported to identify each asset and assign a fair market value based on comparable sales of similar personal property. The report included retroactive valuations of Harvard Pilgrim's property covering the 1997 and 1998 taxes (assessed as of December 31, 1996, and December 31, 1997, respectively). McEachern's appraisal resulted in figures that were significantly lower than the city had used for 1997 and 1998: $2,210,725 and $1,842,070, respectively  considerably below the city's original valuations of $5,849,100 and $6,570,700 for the same years. When reviewing his report at trial, McEachern testified that his professional experience as an appraiser enabled him to look at an asset, and if appropriate, reasonably estimate its value as far back as two and a half years prior to inspection. Asked how he could do so, McEachern responded: Sir, I'm an appraiser. My experience tells me that when I'm looking at a property today, given reasonable assumptions, I can estimate its condition in 1997, December 31, 1997. Further pressed on cross-examination, McEachern could not reconcile how new property acquisitions reported at approximately $6 million during the three-year period between 1995 and 1998 ended up with an appraised value of $1.2 million. McEachern also testified to errors in Harvard Pilgrim's reporting; line items in Harvard Pilgrim's net book value records included some non-assessable items, such as software and deleted items that no longer were on site. The city asserted that McEachern's August 1998 appraisal report was inadmissible because its valuation methodology was not included in Harvard Pilgrim's 1997 and 1998 filings. They asserted that the report was not submitted until Harvard Pilgrim's appeal to the Board of Tax Assessment Review for its 2000 taxes  well after the statutory March 15th account filing deadlines. The trial justice admitted the report into evidence over the city's objection. Harvard Pilgrim's final witness was Jeffrey Lieberman (Lieberman), the project director in charge of managing Harvard Pilgrim's liquidation. Lieberman confirmed the figures used as the basis for McEachern's 1998 appraisal report. Lieberman also reviewed Harvard Pilgrim's adjusted property valuations. Lieberman explained that Harvard Pilgrim's adjusted fair market values relied on the McEachern report as well as various other adjustments. C