Court Opinion

ID: 9756508
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:31:26.643674+00
Date Added: 2024-06-11T07:28:24.169972
License: Public Domain

PELLEGRINI, Judge,
dissenting.
I respectfully dissent. Even though the property owner was the only party in this tax assessment case who presented expert real estate testimony as to the fair market value, the majority holds that the trial court can pick and choose among the factors used by the expert, reweigh them, and then arrive at its own independent opinion of value. I respectfully dissent because the majority’s holding is:
• contrary to numerous Supreme Court holdings that when the taxpayer’s real estate expert’s testimony is unrebutted, it must be accepted.
• by allowing the factfinder to pick and choose among the facts that are given by the unrebutted testimony of the expert, the Majority has imper-missibly transformed the factfin-der — in this case, the judge — into an expert because allowing him to weigh various factors in arriving at an overall opinion of value is the function of an expert, not the factfinder.
• All questions of valuation, even when unrefuted, must go to the factfinder.
This case involves whether the trial court could make its own independent valuation of the Greens’ property when it did not agree that other sales more comparable to their property could not be found or agree with the real estate expert’s opinion that certain sales were more comparable than others, even though the Board offered no testimony whatsoever.1 Specifi*1023cally, while it accepted the taxpayer’s expert testimony that the property was overvalued, the trial court went on to state that it found his testimony suspect that he was unable to find a comparable sale in excess of the market value of the subject property, and that the expert’s reasons for relying more on two comparables rather than on a third was not compelling. It implied that absent our holding in 841 Associates v. Board of Revision of Taxes, 674 A.2d 1209 (Pa.Cmwlth.1996), it would arrive at a different opinion of value. Reversing 841 Associates, the majority would allow the factfinder to make those adjustments. However, upon which evidence would the factfinder rely to determine that there are better comparable sales? Where would the factfinder get this evidence? Where would the factfinder get the expertise to determine that the real estate expert relied more heavily on some comparables than others?2
The principle that trial courts do not have the ability to find a different market value than that of the unrefuted expert is well established in Pennsylvania law. In Appeal of Kaemmerling, 282 Pa. 78, 83, 127 A. 439, 441 (1925), our Supreme Court stated:
In tax cases, like all others, courts must be guided by the evidence in determining what are proper valuations.’ Kemble’s Estate, 280 Pa. 441, 447, 124 A. 694, 696; Penna. Stave Co.’s Appeal, 236 Pa. 97, 84 A. 761. Where, on appeal, the landowner produces competent and credible testimony to show the real worth, and that the assessment is too high, and this is not met by additional proof on behalf of the county, which relies on the prima facie case made up by the introduction of the valuation fixed by the taxing authorities, the court should accept the uncontradicted evidence, and revise accordingly. Shannopin Coal Co. v. Greene County, 280 Pa. 4, 124 A. 266; Appeal of Penna. Co., Trustee (Pa.) 282 Pa. 69, 127 A. 441.
In Appeal of F.W. Woolworth Company, 426 Pa. 583, 235 A.2d 793 (1967), our Supreme Court again stated that a trial court could not adjust the opinion given by an unrebutted expert. In that case, the Board introduced the assessment of $1,493,730 and rested. The taxpayers called a real estate broker as an expert witness who testified that the market value of the property was $975,000. While the Board then called several of its employees as witnesses, none of their testimony went to the fair market value of the property. Even though the Board called no witnesses as to value, the trial court determined the assessment to be $1,313,700. Taxpayers appealed contending that absent finding their witness not credible, the value that its witness placed on the property had to be accepted. Our Supreme Court agreed, stating the following:
[T]he Board proceeded at its peril in not producing any testimony whatsoever to refute this expert opinion. In such a situation we have clearly held that the taxpayers’ evidence must be accepted. Deitch Company v. Board of Property *1024Assessment, 417 Pa. 213, 209 A.2d 397 (1965); McKnight Shopping Center, Inc. v. Board of Property Assessment, 417 Pa. 234, 209 A.2d 389 (1965); Borg-Warner Corp. v. Tax Review Board, 206 Pa.Super. 172, 213 A.2d 127 (1965). The court is not an expert appraiser; it can act only upon credible and competent evidence presented to it. Having found such evidence before it, the lower court here, consistent with the principles expressed in the above-cited opinions, could only consider the assessment of the Board to have been rebutted and must determine the fair market value to be $975,000. If the Board disagreed with this value, it was its responsibility to produce rebuttal testimony of similar character. Having not done so, it is in no position to complain. (Emphasis added,)
426 Pa. at 584, 235 A.2d at 794. Even though the trial court found taxpayers’ expert knowledgeable, contrary to the majority’s view that the Supreme Court reversed because the trial court did not reject the taxpayers’ expert, the trial court obviously found significant parts of his testimony not cogent, like the trial court did in this case, because it placed a value of $1,313,700 on the property rather than the $975,000 given by the expert. While the Supreme Court specifically commented on the taxpayers’ expert’s knowledge, that was not the reason that it ordered that the taxpayers’ expert’s opinion of value be accepted. The real reason the Supreme Court reversed was solely because the Board did not produce any rebuttal testimony. As such, it did not allow any adjustments to be made to the taxpayers’ expert’s valuation because of the major flaw the trial court had with taxpayers’ expert’s method of arriving at his valuation and did not allow the trial court’s valuation of $1,313,700 to stand. In effect, it held that where the taxpayer’s real estate expert’s testimony was unrebutted, the trial court had two options: accept the valuation or find the expert not credible.
That these were the only two options available was expressly stated in McKnight Shopping Center, Inc. v. Board of Property Assessment, 417 Pa. 234, 209 A.2d 389 (1965), where the trial court again rejected taxpayer’s uncontradicted testimony regarding the value of the shopping center. In holding that value had to be accepted, our Supreme Court stated:
First, as pointed out by appellant, the court’s reliance on the size factor in rejecting the testimony regarding the value of the smaller shopping center failed to recognize that many factors, of which size is but one, go into the determination of market value. “In determining market value many factors may be relevant.. .all the elements considered must be directed to determining the value of the property in the market, a determination which is not controlled by any single factor and which is ultimately made on the basis of competent testimony as to what the property is worth in the market at a fair sale...” While we do not view the testimony of appellant’s witness as completely satisfactory in explaining fully the factors applicable here, this testimony cannot be disregarded unless the lower court in the exercise of its discretion finds it incredible. (Emphasis added.)
Id. at 240, 209 A.2d at 392.
Without saying so, the majority in this case relies on Westinghouse Elec. Corp. v. Board of Property Assessment, Appeals and Review of Allegheny County, 539 Pa. 453, 652 A.2d 1306 (Pa.1995), to hold that those cases are inferentially overruled and that factfinders are allowed to pick and choose among the factors used by an unre-butted expert in arriving at his opinion of market value. Westinghouse, however, is not controlling because it does not involve a trial court’s ability to arrive at a different opinion of market value where there is unrebutted expert testimony, but only the trial court’s ability to choose a market value from the opinions of “dueling” experts by balancing those opinions in arriv*1025ing at a market value different from those offered by the experts. As Chief Justice Flaherty stated in the concurring part of his concurring and dissenting opinion in Westinghouse, there must be opposing experts for that weighing to take place:
The majority recognizes that the trial court did what judges are often forced to do: it found the experts on both sides to be credible and, in the proper exercise of the fact-finding function, selected values within the extremes represented by the credible evidence. Certainly, there is nothing arbitrary about setting the values near the midpoints of the range, as the trial court did in this case.
652 A.2d at 1816.
The reason that the Supreme Court mandates that unrebutted testimony must be accepted is because without these two opinions of value, there is nothing that the factfinder can use to triangulate its position. This casts the factfinder adrift in search of a value, causing it to become something that our Supreme Court says it cannot be - an expert appraiser. An expert, when giving a valuation, considers and adjusts a number of factors and approaches when arriving at a market value, but under the majority’s holding, the cogency of every factor used in any approach and how those approaches are synthesized is within the factfinder’s purview to accept or reject and come up with a new opinion of value, including recalculating the value up, down or around the value given by the unrebutted expert when there is no countervailing evidence or opinion of value.
The net effect of the majority’s holding is that anytime an expert gives an unre-butted opinion of value as to machinery and equipment and goods and services, the case has to go to the factfinder to pick and choose which elements it deems cogent and it can arrive at a new opinion of value. For example, in an eminent domain case where the property owner is the only party that submits real property evidence, the court must submit the case to the jury to arrive at its own opinion of value, even though there is no countervailing evidence for it to rely upon.
Because our Supreme Court has stated that when only one party presents expert testimony that it must either be totally accepted or totally rejected, I would affirm the trial court.
Judge FLAHERTY joins in this dissenting opinion.

. The Greens' 6,344 square-foot home was assessed with a fair market value of $612,580 after a countywide reassessment in 1997. After the assessment record was placed into evidence, the Greens presented the expert testimony of Anthony Matsell, who opined that the property had a fair market value of $360,-000. He stated that he relied primarily on the comparable sales method and specifically did not rely on the cost method because it was not a reliable indicator of the property's fair market value as the property was over-improved given its geographical location. He also stated that he did not use the income approach because that was an inappropriate means of valuing the property.
Regarding the comparable sales method, Matsell testified that he had difficulty in finding comparable sales to the Green property because of its size and location, and did not find any properties that sold at a price over $450,000. He further stated that he ultimately chose three comparable properties that ranged in size from 3,000 to 3,900 square feet and in price from $252,500 to $425,000, and based on those properties, valued the Greens' property at $360,000. The trial court relied on Matsell's unrebutted testimony specifically *1023stating that although it found it somewhat suspect, it did not completely lack credibility, and based on our holding in 841 Associates, was constrained to accept his valuation of the Greens' property.

. An expert real estate appraiser testifies as to value based upon an appraisal that "is an unbiased estimate of the nature, quality, value or utility of an interest in, or aspect of, identified real estate. An appraisal is based on selective research into appropriate market areas; assemblage of pertinent data; the application of appropriate analytical techniques; and the knowledge, experience, and professional judgment necessary to develop an appropriate solution to a problem.” American Institute of Real Estate Appraisers, The Appraisal of Real Estate 11 (8 th Ed.1983). In reaching a specific valuation of a particular piece of property, the real estate appraiser considers numerous factors including, but not limited to real estate markets; the property or building description, style and function; comparable sales; income capitalization; income estimates; direct capitalization; yield capitalization; comparable costs of building and value and accrued depreciation.