Saturday, January 23, 2016

Part and Parcel

Rasmussen v. Fairhaven, 2016 VT 1

By Andrew Delaney

How many parts make a whole? 

Mr. Rasmussen owns three separately deeded but connected lots in Fairhaven. The opinion uses the word “contiguous,” likely because that’s what the applicable statute uses, but that word’s too fancy for my blood—and it means the same thing as connected. One lot has a main house and the other two lots each have a rental house.

In 2014, the town listers assessed Mr. Rasmussen’s property at $585,000. He appealed to the Board of Civil Authority (BCA). He wouldn’t let the BCA members inspect the main house, so the BCA considered the appeal withdrawn because the applicable statute says if a taxpayer refuses inspection, then the appeal is considered withdrawn.

So Mr. Rasmussen appealed to the Property Valuation and Review Division, and the case was assigned to a property tax hearing officer.

At the hearing, Mr. Rasmussen argued that the BCA had screwed up because he’d only appealed a portion of the assessment—the improvements to the two rental houses. The town responded with an it’s-all-one-parcel argument, noting that the property was taxed at the residential rate as a result.

The hearing officer found that the town had assessed the value properly, and that by refusing to allow the BCA members to inspect the main house, Mr. Rasmussen had effectively withdrawn his appeal. Basically, the statute says “property” and three connected parcels constitute one “property” in this case. The director of the Property Valuation and Review Division approved the decision, and Mr. Rasmussen appealed.

On appeal, he argues that he’s entitled to appeal a portion of the assessment and that there’s a difference between “parcel” and “property”—more specifically, the only “property” assessments being challenged are the two rental lots. He maintains his right to refuse unreasonable searches and that he can’t waive a third party’s right to refuse such a search. He also argues that without notice or warning to him, the hearing focused on a technical issue, not whether his property was properly assessed. He opines that the hearing officer coached and assisted the town rep throughout the hearing. Finally, he argues that the hearing officer should’ve considered materials he submitted by email after the hearing.

The SCOV is having none of it. The SCOV explains that the decision “will be deemed presumptively correct,” and findings are conclusive if supported by the evidence. Judging just by the standard of review, Mr. Rasmussen is not going to have an easy go of it.

The SCOV begins with the grand-list-compilation process. “Property,” the SCOV explains, “is broader than the term ‘parcel,’ and it includes real and personal property subject to assessment and taxation.” All connected (or “contiguous” if you want to sound all lawyerly about it) pieces of property under common ownership make up a parcel; all parcels go on the grand list; and all parcels make up property presumably. Your mileage may vary.

The grand list is based on fair market value. This means the “highest and best” use of the entire parcel. In other words, the listers have to look at the whole parcel to determine the value. “Only after reviewing the entire parcel can the BCA or the state appraiser determine if it should be valued as a single lot, or whether it should be valued in some other way.” The statute only allows appeals of the whole shebang—not the constituent parts making up the parcel.

So here, with the appeal, the BCA needs to be able to look at the whole parcel and assess it. The SCOV reasons that the use of the word “property” in the statute doesn’t support Mr. Rasmussen’s contention that it means each separately deeded piece of property because of the statutory scheme. “The use of the term ‘property’ here plainly refers to a ‘parcel’ because ‘parcels,’ and not their component parts, are what must be included in the grand list.” The SCOV concludes that nothing in the statute lets a taxpayer pick and choose what part of the parcel he wants to appeal.

And if a taxpayer refuses to allow inspection, the appeal is deemed withdrawn. That’s what happened here. Mr. Rasmussen didn’t want the BCA in the main house. He said as much at the appeal hearing. The SCOV also dismisses Mr. Rasmussen’s BCA-inspection-is-an-unreasonable-search pitch out of hand.

The SCOV doesn’t see any irregularities in the rest of it. As to Mr. Rasmussen’s assertion that he was blindsided by the inspection-refusal issue, the SCOV notes that’s actually what he appealed from. Because there was no finding by the BCA—the BCA considering the appeal withdrawn—there was no valuation for the hearing officer to conduct a de novo review upon.

As far as the emails, the SCOV reasons that there was no error and even if there was, it wouldn’t change the result. Regarding Mr. Rasmussen’s the-hearing-officer-helped-the-town-rep-to-Mr.-Rasmussen’s-detriment argument, the SCOV concludes that it’s not supported by the record.

And so the SCOV affirms. My bad poetry moral of this story? If you wanna win, you gotta let the BCA in.