Philbin v. Town of St. George

                                ENTRY ORDER

                      SUPREME COURT DOCKET NO. 90-217

                            DECEMBER TERM, 1990


Paul and Carol Philbin            }          APPEALED FROM:
                                  }
                                  }
     v.                           }          Property Valuation and
                                  }          Review Division
                                  }
Town of St. George                }
                                  }          DOCKET NO. Chittenden 1986-6


             In the above entitled cause the Clerk will enter:

    Taxpayers appeal from a decision of the State Board of Appraisers
(Board) applying an equalization ratio of 71% to their home in St. George,
which was calculated by averaging the equalization ratios of the taxpayers'
property and one other property which the Board determined to be comparable
within the meaning of 32 V.S.A. { 4467.  We reverse and remand.

     Taxpayers argue that in establishing an equalization ratio the Board
could not limit the class of properties it would consider to those that
would be "comparable" for purposes of establishing initial fair market
value, that is, homes generally similar in such factors as size, age,
description, condition, use, income and expenses, and surroundings.  Though
{ 4467 uses the word "comparable," and that word is the touchstone to
initial fair market valuation (FN1), for purposes of establishing a correct
equalization ratio "comparable" properties include all properties within the
class of property to which the subject property belongs.  See Alexander v.
Town of Barton, 152 Vt. 148, 156, 565 A.2d 1294, 1299 (1989).

     The Board in the present case claims to have used two "comparable"
properties to establish its equalization ratio, but in fact one of those
"comparables" was taxpayer's property.  Even if the Board had relied on two
independent properties it considered "comparable" to that of taxpayers, the
record reflects that the Board rejected nine other properties within the
same class as that of taxpayers, solely on grounds that none of the nine was
"comparable" to the subject property under criteria appropriate for initial
fair market valuation.  The illogic of using "valuation comparability"
criteria as the predicate for selecting "comparable properties within the
town" under { 4467 was succinctly stated in Bowen v. Town of Burke, 153 Vt.
131, 134-35, 569 A.2d 452, 454 (1989) (Dooley, J., concurring):

            The problem is that [initial valuation] comparability
          has nothing to do with equalization.  If, for example,
          we determine that steep, wooded lots are not
          "comparable" to flat, meadow lots, that does not mean
          that it is acceptable to assess one kind of lot at 40%
          of fair market value and the other at 60% of fair market
          value.

As used in { 4467, "comparable properties within the town" means properties
of the same general class as the subject properties, even if the properties
within the set selected for equalization analysis would not meet the initial
valuation comparability criteria on the basis of factors like building size,
age, description, condition, use, income and expenses, and surroundings.

     In this case the Board unduly narrowed the class of comparable
properties which it considered for equalization purposes, leaving "little
likelihood that the average of the ratios of the properties is equal or
close to the average of all ratios or the average of the ratios for
properties within the class."  Id. at 136, 569 A.2d  at 454.  The case must
therefore be remanded for additional consideration of an appropriate
equalization ratio under { 4467.  We do not dictate how that task should be
undertaken.  As the court stated in McKnight Shopping Center, Inc. v. Board
of Property Assessment, 417 Pa. 234, 241-42, 209 A.2d 389, 393 (1965), "[i]n
considering whether or not a particular assessment is lacking in
uniformity, however, a property owner, the taxing authority and the courts
may rely on any relevant evidence."  Thus, the description of the class, the
determination of which properties fit that class, or the use of other
evidence where the Board concludes that it lacks evidence of a statistically
representative sample under { 4467 are all matters that are within the sound
discretion of the Board.  See Sondergeld v. Town of Hubbardton, 150 Vt. 565,
571, 556 A.2d 64, 68 (1988).

     Taxpayers also argue that the Board committed what they characterize as
a mathematical error in calculating the sales price of the property which
the Board found to be comparable for equalization purposes.  Since the
matter is being returned to the Board, taxpayers' argument on this point
should be directed to the Board.

     Reversed and remanded.


                                   BY THE COURT:




                                   Frederic W. Allen, Chief Justice

[ ]  Publish
                                   John A. Dooley, Associate Justice
[ ]  Do not Publish

                                   James L. Morse, Associate Justice


                                   Denise R. Johnson, Associate Justice



FN1.    See, e.g., Kruse v. Town of Westford, 145 Vt. 368, 373, 488 A.2d 770, 773 (1985) (citation omitted), where we said:
	[T]he town can prevail before the Board by substan-
	tiating its appraisal with independent evidence relative
	to the fair market value of the subject property and the
	listed value of comparable property.  In this case the
	town compared the plaintiff's property to the one neigh-
	boring property offered by plaintiff as comparable. The
	town's expert testified that the comparable property was
	smaller and, unlike plaintiff's, was without a garage or
	fireplace.  Thus, the town offered the type of evidence
	which, under the law, could be used to substantiate its
	assessment.

It is clear that in determining initial valuations, a "comparable" property
is one that is generally similar to the subject property in such factors as
size, age, description, condition, use, income and expenses, and
surroundings.