By: Jeffrey M. Messina
Taxpayers appeal the trial court decision affirming the board of abatement’s (board) denial of their requests for tax abatement. SCOV does the three-step in-part dance: affirm, reverse, and remand.
For the periods of 2005 through 2011, taxpayers sought abatement of property taxes on many contiguous properties they owned, and they came before the abatement board on three separate occasions in their attempts. At first, the board denied the request, but later realized it didn't have a quorum. Whoops. At the second hearing, the board also nixed the request; however, because the board did not explain its reasons for the denials, the superior court sent it back to the board to provide written detail or hold a new curative hearing.
The third hearing is what brings us to SCOV today. Here, taxpayers requested abatement based on a statute that provides the board "may abate in whole or in part taxes, interest or collateral fees" where there was "manifest error or a mistake of the Listers." In support, taxpayers argued:
First, that the delinquent-tax collector erred in assessing interest and fees on the entire overdue tax bill after refusing to accept partial payment. Additionally, taxpayers took legal steps—on the advice of counsel— to legally change the property classification for the homestead property, and tried to pay the homestead built for that specific property. No go. The tax collector said money need be applied equally to all properties; they could not pick and choose.
Second, that the listers erroneously and without notice reclassified the property for several years resulting in inflated tax bills. Taxpayers argued that the land was under common ownership and contiguous, so it should have been classified as such.
Third, that the sewer bond payment was applied to each parcel rather than the one contiguous parcel, so they were overcharged.
And, fourth, because the properties were misclassified as individual, a .66-acre leach field was assessed just over $10K, rather than the $700 it should have been assessed, again resulting in overpayment.
As an aside, taxpayers state the two-acres tax exemption around the house was unavailable to them during the misclassification and they also presented evidence purporting to show the listers failed to equalize the property assessments and that in sum, was manifest error.
After the taxpayers presented their case, no other party— including the lister—presented evidence. The board, instead, entered executive session to deliberate. Taxpayers specifically requested the listers on theboard recuse themselves from voting— makes sense, of course, it is the listers accused of the mistake— but were told without them there was no quorum, so there could be no vote. The listers agreed to abstain from the vote, but they had to be present to make the quorum. Though they initially objected, taxpayers eventually caved to facilitate the vote.
A few days later, during a continued abatement hearing, the board issued its decision in this matter. The decision, issued in the minutes, addresses the issues in turn, and the corresponding explanations offered by the board:
First, did the Pownal delinquent tax collector err by refusing to accept Guntlow’s tax payment on its due date; then demanding interest and penalties? Nope, because the delinquent tax collector could not take a portion of payment towards one parcel on a tax bill, being in the hands of the attorney.
Second, did the Pownal listers err, when in 2005 they arbitrarily changed Guntlow’s contiguous property classification from one parcel to five individual parcels? Nope, it wasn’t proven by the appellant that the listers had erred.
Third, did the Pownal listers err, from 2005-2010, using the erroneous property classification individual which resulted in:
- additional sewer bond fees. . . since this is a municipal repayment based on a parcel not dwelling and the appellant not being treated equitably. The board says appellant is to be refunded the amount of $1,342.81.
- increased leach field property assessments, which the board reasons were addressed by the listers and had been adjusted at grievance in 2011
- elimination of the house site allocation allowance for the Guntlow property? The elimination of the house site is based on the income and is handled by the State.
Taxpayers appeal the decision to superior court under V.R.C.P. 75, which is an “on the record” appeal to superior. The trial court affirmed the board's decision. So, on to SCOV...
Taxpayers argue: (1) the listers’ participation in deliberations was improper (after all, the request for abatement was due to their "manifest error or mistake"); (2) the board improperly deliberated in executive session; and, (3) the board did not meet statutory guidelines because it failed to "state in detail in writing the reasons for its decision."
SCOV "is limited to answering legal questions raised by the factual record developed" when reviewing administrative agency decisions. On questions of fact, SCOV looks to the administrative record "to determine if there is any competent evidence to support the agency findings." Based on this criteria, SCOV finds:
First, after a bit of discussion about quorum requirements in the context of general authority and authority to act, SCOV punts. Because taxpayers withdrew their objection to the listers being present even if they did not vote, taxpayers waive any objection to lister participation in executive session. Therefore, SCOV "need not consider it." Punt.
Second, no harm, no foul. In this case, because the board could have "simply returned to deliberate privately" the term “executive session” used does not negate the action. As the High Court states, the "technical non-conformity with state law associated with the label applied to [the] deliberation is immaterial." Moving on . . .
Third . . . and now we reach a SCOV first! Apparently, anyway; and I have no reason to doubt it. SCOV says it has "not previously considered the level of detail required” by the statute. C’mon, let’s see what they come up with!
After a bit of here's-how-we-derive-the-authority history in comparison to similar statutes, SCOV focuses on the statute and in the express language that the board will "state in detail in writing the reasons for its decisions." In detail. In-deed. The court ultimately decides the board’s reasoning must "indicate to the parties, and to an appellate court, what was decided and upon what considerations."
With that in mind, let's get started…
One, taxpayer argues the delinquent-tax collector incorrectly declined to accept payment. Board answered "because the delinquent tax collector could not take a [partial] portion of payment (that’s my alliteration for the day) toward one parcel tax bill, being in the hands of the attorney." SCOV says the explanation provides the parties and the reviewing court "an understanding of the considerations that animated the board's decision on this question. It's good!
Two, taxpayers argue the listers improperly and without notice reclassified their property, and the Board answered "no, it was not proven by the appellant that the listers had erred." This is reminiscent of the liar liar, pants on fire kind of response, with the Court saying "it amounts to ‘you are wrong’ without explanation." As such, Taxpayers are left to wonder what was unpersuasive. SCOV says, “no good.”
Three, taxpayers argue they unwittingly paid for .66-acre leach field as if it was individual property and the board’s response was "the increased leach field property assessments were addressed by the listers and had been adjusted at the grievance" SCOV says "Yea" on the statement of decision, but gives a big "Nay" on explanation of reason. No good.
Four, taxpayer’s request for abatement on forgone house site allowance: board says "the elimination of the house site is based on the income and is handled by the state." Court states regardless of whether or not the law is correct, the decision informs taxpayer (and the reviewing court) of the underlying considerations. Therefore, it's good.
Taxpayers argue their properties were treated differently from others in town. The Board denied the claim, rationalizing "the same cost table/schedule were used to value the appellant's property is worth to the rest of the parcels in town." SCOV says, “Good answer!” because it provides a basis for "what would be a very deferential review."
In sum, it gets reversed and remanded to the trial court with instructions to send it back to the board of abatement for more-detailed explanation of the reasons for its denial of taxpayers’ request for abatement on the ground that the misclassification of their property over a course of years amounted to a manifest error or mistake, and in its request for abatement on the ground that the taxation of the .66-acre leach field from 2005 to 2010 as an individual property amounted to manifest error or mistake. Alternatively, the board may hold a new hearing on those two issues. The rest was affirmed. So be it.