Opinion ID: 1895024
Heading Depth: 1
Heading Rank: 2

Heading: Finding of Unjust Discrimination

Text: [¶ 13] Biddeford next argues there was insufficient evidence to support a finding of unjust discrimination for either the 1993 or 1995 assessment. A town's assessment is presumed valid and the taxpayer must prove it is manifestly wrong. See IBM Credit Corp. v. City of Bath, 665 A.2d 663, 664 (Me.1995). To show that an assessment was manifestly wrong, the taxpayer must prove that the property is substantially overvalued, there was unjust discrimination, or that the assessment was fraudulent. See Chase v. Town of Machiasport, 1998 ME 260, ¶ 12, 721 A.2d 636, 640. At the second hearing, the Board concluded the taxpayers failed to prove substantial overvaluation, but found they proved unjust discrimination in both the 1993 and 1995 tax assessments. [¶ 14] Article 9, section 8 of the Maine Constitution requires that [a]ll taxes upon real and personal estate ... shall be apportioned and assessed equally, according to the just value thereof. The assessment must represent the owner's equal portion of the burden of taxation. See Town of Sanford v. J & N Sanford Trust, 1997 ME 97, ¶ 13, 694 A.2d 456, 459. Taxpayers can prove discrimination only if they show that the assessor's system necessarily results in unequal apportionment. [3] See Moser v. Town of Phippsburg, 553 A.2d 1249, 1250 (Me.1989). [¶ 15] We conclude that there is sufficient evidence to support the Board's decision that there was unjust discrimination in the 1993 and 1995 assessments. The Board identified several factors that convinced it discrimination had occurred. [¶ 16] First, it considered the manner in which median lot size was determined. The acreage of the Rachel Carson Wildlife Preserve, a marshlands preserve bordering on Granite Point, was included in the calculation of the median lot size for Granite Point, but similar marshlands were not included in figuring the median lot size for Fortunes Rocks. The consultant who was hired by Biddeford to do the 1990 revaluation testified that if the Rachel Carson land had been omitted from the Granite Point lot size calculation, the median lot sizes of Granite Point and Fortunes Rocks would have been very close. One of the reasons given by Biddeford to justify its assertion that Granite Point was a more desirable neighborhood than Fortunes Rocks was the larger median lot size. The Board found that the method of determining that the median lot size in Granite Point was larger than Fortunes Rocks was arbitrary and places in question the process of establishment of coastal neighborhoods. [¶ 17] Second, the Board found that all of the coastal neighborhoods, except Hills Beach, were homogeneous. It concluded, therefore, that the downward adjustment in values that had been made for Fortunes Rocks also should have been made for Granite Point. The Board relied upon the testimony of a real estate agent that potential buyers will not pay a premium to live in Granite Point as opposed to Fortunes Rocks, and that the two areas had the same market history in the previous five years. When updating the 1993 assessments, Biddeford reduced the neighborhood factor by 12.5% for Fortunes Rocks but not for Granite Point. Biddeford used five sales in Fortunes Rocks to justify this reduction in its neighborhood factor, but refused to apply them to Granite Point. The Board noted that the decision to reduce the neighborhood factor based on the assessor's gut feel was arbitrary. [¶ 18] Third, the Board found that Biddeford changed the neighborhood code for Granite Point to that of Biddeford Pool and then used two sales in Biddeford Pool, one for more than assessed value and one for less, to justify denying a reduction in the assessments for Granite Point. Within a two year period thereafter it changed Granite Point back to a separate neighborhood code. This, the Board concluded, was arbitrary and indicative of changing numbers to suit a situation at the time it happens. [¶ 19] For these reasons, the Board found that Biddeford unjustly discriminated against the Granite Point taxpayers because they were treated differently than other taxpayers in Biddeford for the tax years 1993 and 1995. This conclusion was not erroneous and was supported by sufficient evidence. The record supports the conclusion that the taxpayers met their burden of proving that the Granite Point assessments were manifestly wrong because Biddeford's method necessarily discriminated against their neighborhood. [¶ 20] Biddeford alternatively challenges the finding of unjust discrimination by contending the taxpayers failed to present credible affirmative evidence of the just value of each property at issue. It points to the Board's conclusion that the taxpayers did not show substantial overvaluation for this very reason, and it asserts that the proof must be the same for unjust discrimination. [¶ 21] Biddeford is correct that the taxpayers presented no evidence as to the values of their individual properties. Instead, their expert appraiser performed an appraisal of fifteen Granite Point properties. The appraiser testified about the manner of choosing the fifteen sample properties and the methods he utilized in performing the appraisals, including inspecting all of the properties, obtaining tax data and maps, collecting and analyzing comparable sales data and applying a cost approach. After arriving at a fair market value for each of the fifteen sample properties and comparing that value with the assessed value, the appraiser's opinion was that the Granite Point properties were overassessed by an average of 20% for 1993 and 29% for 1995. Biddeford had already granted partial adjustment for tax year 1995 of 6.5%, [4] and, therefore, the appraiser concluded the properties were actually overassessed by 22.5% in 1995. The expert's opinion of the 20% overassessment for 1993 was confirmed when he did a study of actual sales in Granite Point from 1993 to 1995. That study revealed that the assessments of the nine sale properties during that time period averaged 120% of the sale price. [¶ 22] Biddeford contends that the Board could not make a finding of unjust discrimination without first finding overvaluation and cites City of Waterville v. Waterville Homes, Inc., 655 A.2d 365 (Me.1995) for this proposition. That case, however, does not involve unjust discrimination; there is nothing in the opinion indicating that the taxpayer attempted to show anything other than substantial overvaluation. That case stands for the proposition that in order to prove substantial overvaluation the taxpayer must present affirmative evidence of valuation and cannot rely on impeaching the assessor's conclusion of value. Id. at 366-67. In Moser, 553 A.2d at 1250, we held that unjust discrimination could be established by a showing that the assessment method would necessarily result in unequal apportionment, and when taxpayers make that showing they do not also have to demonstrate that the property is substantially overvalued. In fact, in this case the taxpayers have demonstrated that in the aggregate the Granite Point properties were overvalued, although they did not show individual property overvaluation. Where, as here, the revaluation was based on a discriminatory formula, the taxpayers need not demonstrate overvaluation of each individual property in order to prove unjust discrimination.