Burton v. Town of Salisbury

Annotate this Case

Burton v. Town of Salisbury (99-559); 173 Vt. 177; 790 A.2d 394

[21-Dec-2001]

NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.

Nos. 99-559, 99-560, & 99-561

Robert Burton Supreme Court

v. On Appeal from
Property Valuation and Review
Town of Salisbury Division

January Term, 2001
George McDonough

Town of Salisbury

David Sidoti

Town of Salisbury

Rexford E. Roberts, State Appraiser

John F. Evers and Kevin E. Brown of Langrock Sperry & Wool, LLP,
Middlebury, for Plaintiffs-Appellants.

Donald R. Powers of Powers, English, Carroll & Ritter, Ltd.,
Middlebury, for Defendant-Appellee.

PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

JOHNSON, J. Taxpayers appeal a decision by the state appraiser
ruling that he did not have authority to rule on the constitutionality of
an amendment to 32 V.S.A. § 4404(c), and that taxpayers are not entitled
to a refund of property taxes paid in the years 1992-1996. The amendment

imposed a retroactive change in § 4404(c) that voided a previous order of
this Court. We reverse because the legislature's enactment violates the
separation of powers mandated by the Vermont Constitution.

This case arose from a town-wide reappraisal of the Town of Salisbury
that took effect in the 1991 tax year. Taxpayers Robert Burton, George
McDonough, David Sidoti and forty other property owners located on Lake
Dunmore, in Salisbury, Vermont appealed the listed value of their property
to the Board of Civil Authority (BCA) pursuant to 32 V.S.A. § 4404. When
the BCA failed to comply with the procedures of § 4404(c), taxpayers took
their appeal to the State Board of Appraisers (Board). (FN1) In 1994, the
board found that the BCA did not comply with the time requirements of §
4404(c), which outlines specific deadlines for various stages of the
appeal. It also found that because taxpayers did not waive compliance
with § 4404(c), they were entitled to the rollback penalty. 32 V.S.A. §
4404(c) provided:

If the board does not substantially comply with the
requirements of this subsection and if the appeal is not
withdrawn . . . , the grand list of the appellant for the
year for which appeal is being made shall remain at the
amount set before the appealed change was made by the
listers; except, if there has been a complete reappraisal,
the grand list of the appellant shall be set at a value
which will produce a tax liability equal to the tax
liability for the preceding year.

Id. (emphasis added). Because taxpayers had not waived compliance with §
4404(c), the board applied the rollback penalty applicable under the
exception for complete reappraisals to the 1991 tax year and did not
proceed with a determination of the merits of taxpayers' appeal.

Taxpayers appealed the board's 1994 decision to this Court. In that
appeal, taxpayers claimed that they had a right to elect between the
rollback penalty in § 4404(c) and an appeal on the merits of the BCA's
valuation to the board. Principally, taxpayers argued that an appeal on
the merits might afford them a three year remedy under 32 V.S.A. § 4468.
That section provides that a determination by the board of the value of
the property, "shall become the basis for the grand list of the taxpayer
for the year in which the appeal is taken and, if the appraisal relates to
real property, for the two next ensuing years." Id.

The appeal of the 1991 appraisals was heard by a panel of three
justices in January 1996, and a final decision was issued by the panel in
March 1996. (FN2) The panel concluded that it need not reach taxpayers'
contention about the election of remedies. Rather, the Court distinguished
between two types of penalties within § 4404(c). The first, not
applicable in this case, provides for a one-year rollback in most
appraisal appeals. See 32 V.S.A. § 4404(c). The second, applicable here,
provides for a rollback when there has been a complete reappraisal but
does limit its duration to one year. See id. The Court interpreted this
latter provision of § 4404(c) to mean that there is no time limit for the
rollback penalty. The panel held that "[i]n this case there was a
complete, or town-wide, reappraisal; consequently, the exception in §
4404(c) applies, and there is no time limit to the rollback penalty.
Accordingly, the Town must act to alter the 1990 tax liability imposed
under § 4404(c)."

Shortly after the March 1996 decision was issued, a bill was
introduced in the Vermont House of Representatives entitled "An Act
Relating to Miscellaneous Tax Changes." Amid the voluminous and random
changes to various parts of the tax code, section 12 sought to amend 32
V.S.A. § 4404(c). The amendment added the language "for the year for which
appeal is being made"

to the description of the rollback penalty applicable when there has been a
complete reappraisal. 1995, No. 169 (Adj. Sess.), § 12. In other words,
the amendment reversed this Court's interpretation of § 4404(c) in the
1996 decision. The other relevant part of the House bill was section 27,
which specified that section 12 would apply retroactively to January 1,
1991. Id. § 27. Thus, as amended, § 4404(c) would have limited
taxpayers' 1991 appeal remedies to a single year. The bill passed the
General Assembly and was signed into law in May 1996.

While the 1991 appeal was working through the hearing process,
taxpayers filed another appeal, this time contesting their 1994
valuations, and raising the same issues as in the 1991 appeal. Again, the
BCA failed to comply with the procedural requirements of § 4404(c). As a
result of the identity of the issues, the Town and taxpayers agreed to a
stipulation that incorporated the BCA's record, including its findings and
conclusions from the 1991 appeal. The taxpayers then brought this appeal
to the next tier of review, which had become the state appraiser. In
September 1997, most of the other property owners who had appealed with
taxpayers settled the 1994 appeal with the Town. The Town and taxpayers,
however, were unable to reach an agreement. On appeal to the state
appraiser, the parties agreed that the issues in dispute could be settled
on summary judgment. The main issue before the appraiser was the effect
of Public Act No. 169 on taxpayers' claim for repayment of taxes from 1992
to 1996.

In November 1999, the state appraiser issued a decision in taxpayers'
1994 appeal. In that decision, the appraiser held that he did not have
authority to rule on the validity of Public Act No. 169, and thus he must
assume that the rollback penalty could apply for only one year. The
appraiser further ruled that because taxpayers did not appeal their
assessments in 1992 and 1993, he did not

have jurisdiction over those years. Finally, the appraiser declined to
reach the merits of taxpayers' 1994 appeal because the record on summary
judgment was insufficient to rule.

It is the decision of the state appraiser in 1999 that is now before
us. Taxpayers argue that the retroactive clause of the legislature's
amendment to § 4404(c) violates the separation of powers required by
Chapter II, Section 5 of the Vermont Constitution, as well as other state
and federal constitutional principles. Because, according to taxpayers,
limiting the rollback penalty to 1991 is unconstitutional, their tax
liability is governed by our 1996 three justice panel decision. They
contend that this Court's 1996 decision entitles them to repayment of taxes
paid in excess of the rollback amount of 1991 for the years 1992 to 1996,
and they were not required to file separate appeals for the years 1992,
1993, 1995 and 1996.

The Town counters that the retroactive element of the amended statute
is constitutional because it is justified by a rational legislative
purpose. The limitation on the rollback penalty is necessary to prevent
windfalls to taxpayers when the Town conducts a complete reappraisal.
Thus, the Town argues, the rollback penalty should apply only to the year
in which the appeal was filed, i.e. 1991. Additionally, the Town urges
this Court to overrule our decision in 1996 as inconsistent with earlier
precedent. Finally, according to the Town, because taxpayers did not file
subsequent appeals each year after 1991, their tax liability should remain
at the assessed values.

There are two provisions of the 1996 Act that affect the tax statute
at issue in this case. The first is § 12 that changes the relevant
language of § 4404(c) to clarify that the rollback penalty, even in the
event of a complete reappraisal, shall apply only for one year-the year in
which the appeal was filed. This legislative pronouncement expressly
contradicts our interpretation of the same statute in our 1996 panel
decision. Such an action, however, is entirely within the bounds of the
power of the

legislature. See Vt. Const. ch. II, § 6 (legislative power over revenue
bills); Barnes v. Hall, 55 Vt. 420, 421 (1883) (taxation and collection
are purely statutory powers). Our paramount goal in statutory
construction is to give effect to the legislature's intent. Burlington
Elec. Dep't v. Vt. Dep't of Taxes, 154 Vt. 332, 335, 576 A.2d 450, 452
(1990). If the legislature disagrees with our reading of its intent, it
is free to amend the statute to clarify the issue. Compare State v.
Madison, 163 Vt. 360, 658 A.2d 536 (1995) with 13 V.S.A. § 7555a(5). (FN3)

The second provision of the 1996 Act is more problematic. Section 27
of Public Law 169 (Adj. Sess. 1995) declared that the change to § 4404(c)
shall be applied retroactively to January 1, 1991. According to the
amended act, once the Town violated the procedures of § 4404(c) in the
1991 appeal, taxpayers would be entitled to a rollback penalty for one year
only. This provision, therefore, specifically undoes the effect of this
Court's interpretation of § 4404(c) as decided in our 1996 order. In
making § 12 of the act retroactive, the legislature implicitly reversed a
final judgment from this Court. Such legislation violates the
constitutional principle of separation of powers. See Vt. Const. art. II,
§ 5 ("The Legislative, Executive, and Judiciary departments, shall be
separate and distinct, so that neither exercise the powers properly
belonging to the others.").

This principle is well-rooted in our case law. In Bates v. Kimball, 2
D. Chip 77 (1824), we held unconstitutional a statute entitled "An Act for
the Relief of Isaac Kimball." In that statute, the legislature authorized
Kimball to enter an appeal of a judgment entered against him after the
statutory time limit had passed. The effect of the act was to "vacate or
annul an existing judgment between party and party," id. at 83, because it
ostensibly authorized an appeal from a final judgment

below where no appeal was proper. The Court held that the act treaded on
the province of the judiciary because the act, and not the courts,
determined whether or not to allow an appeal. Id. at 85-86. The
legislature does not have the power to grant appeals because "the
constitution has expressly forbidden the exercise, by one department, of
powers properly belonging to others." Id. at 86.

More recently, the United States Supreme Court addressed a situation
similar to the one at bar when addressing the constitutionality of §
27A(b) of the 1934 Securities and Exchange Act. Plaut v. Spendthrift
Farm, Inc., 514 U.S. 211 (1995). Section 27A(b) was passed in reaction to
the Court's decision in Lampf, Pleva, Limpkind, Prupis & Petigrow v.
Gilbertson, 501 U.S. 350 (1991), which imposed a limitations period on
actions commenced to address violations of § 10(b) of the 1934 Act.
Congress enacted § 27A(b) to permit reinstatement of those cases that had
been dismissed as untimely under Lampf, but that had been commenced before
Lampf was decided. The effect of § 27A(b) was to overrule the limitations
period imposed by Lampf for those cases that had already been dismissed on
those grounds. The Court held that "[b]y retroactively commanding the
federal courts to reopen final judgments, Congress has violated" the
separation of powers. Plaut, 514 U.S. at 219. The violation, in
principle, was similar to the one in Kimball. Congress had directly
interfered with final judgments of the judiciary by purporting to allow
judicial proceedings where the judiciary had ruled that none was proper.

The central flaw in the statutes at issue in both Plaut and Kimball is
that the enacting legislatures, either intentionally or not, undid final
judgments of the jurisdiction's highest court. In Plaut, the United
States Supreme Court emphasized the damage caused to the integrity of an
independent judiciary. "When retroactive legislation requires its own
application in a case already

finally adjudicated, it does no more and no less than 'reverse a
determination once made, in a particular case.' . . . Our decisions . . .
have uniformly provided fair warning that such an act exceeds the powers
of Congress." Plaut, 514 U.S. at 225 (quoting The Federalist No. 81, at
545 (J. Cooke ed. 1961)). In Kimball, this Court stressed the harm done
to the vested rights of the litigants in these situations. A statute is
void when it is "retrospective, virtually vacating the judgment, and
divesting the right acquired under it . . . . It is a settled principle
of the common law, that a statute shall not have a retrospective
operation, so as to take away a vested right." Kimball, 2 D. Chip. at 89.
In both cases, the holding was clear: the legislative branch may not
overturn final decisions of the judiciary with statutory enactments,
whether they are specific to an individual case (Kimball) or of general
effect (Plaut).

Section 27 of the 1996 Act in this case does the very same violence to
this underlying principle. Our panel decision of 1996 expressly held that
there was no time limit for the application of the rollback penalty for
taxpayers' 1991 appeal. Thus, at the time of that decision, taxpayers had
a vested right to a rollback penalty for excess taxes paid in 1991 and
they were entitled to continue that rollback until the Town remedied their
assessments. The legislature's attempt in § 27 to apply the one year
limit to the rollback penalty to taxpayers' 1991 appeal undoes a final
determination of this Court and divests taxpayers of a vested right.
Whether the 1996 panel decision was wrongly decided is immaterial. "The
issue here is not the validity or even the source of the legal rule that
produced the . . . judgments, but rather the immunity from legislative
abrogation of those judgments themselves." Plaut 514 U.S. at 230. The
1996 decision conclusively determined the rights of the parties for the
1991 appeal. The legislature, if it disagreed with our interpretation of §
4404(c), was entitled to clarify the statute in question, which it did.
The legislature, may not however, reach

backwards with that statute and undo the court decision that announced the
disfavored statutory interpretation. We hold, therefore, that § 27 of
Public Law No.169 violates the separation of powers required by Article
II, Section 5 of the Vermont Constitution.

Having determined that the retroactive provision of § 27 is
unconstitutional, we turn to the question of which years the taxpayers are
entitled to a refund. The 1996 decision held that the applicable rollback
penalty had no time limit and concluded that "the Town must act to alter
the 1990 tax liability imposed under § 4404(c)," which the Town did not do
until 1996. The taxpayers, therefore, argue that they are entitled to
this rollback for the years 1992 to 1996. The state appraiser, however,
held that the taxpayers were not entitled to a refund for the years 1992,
1993, 1995, and 1996 because they had not appealed their taxes for those
years. (FN4)

Indeed, to limit taxpayers' relief to those years in which they filed
an appeal would be consistent with the statutory scheme for grand list
appeals. Two methods for relief are envisioned by the statute. When a
taxpayer initiates an appeal, the BCA must address that appeal within
certain time limits. Those procedures are laid out in § 4404(c). If the
BCA does not comply with those procedures, then § 4404(c) also sets forth
the rollback penalty mechanism to ensure that the taxpayer pays tax based
on the previous year's valuation. At this point, because the taxpayer has
received relief, the tax appeal is dead. The taxpayer may then refile the
appeal in each subsequent year. Multi-year relief is appropriate only
under 32 V.S.A. § 4468. That section states that an appraisal fixed by
the state appraiser shall become the basis for tax for the year of the
appeal and the next two years. Id. The multi-year relief envisioned in §
4468 applies only once the tax appeal has made it all the way through the
appeal process and a decision has been reached on the merits. If, on the
merits, the state appraiser fixes an appraisal, only then is the taxpayer
entitled to the three-year remedy of § 4468.

Taxpayers' decision not to appeal in 1992, 1993, 1995 and 1996 seems
to have been based on their reliance on the position they took in the
original appeal of the Board's decision. Taxpayers argued then that they
should be able to choose between the rollback penalty, ending the appeal,
and a decision on the merits, yielding three year relief. Appealing as
they did in 1991 and 1994 indicates that taxpayers believed that
ultimately they could choose the multi-year remedy of § 4468 over the
limited rollback penalty. As the statutes indicate, the remedy is not a
choice for the taxpayers, but rather is determined by the procedural
posture of the appeal.

Nevertheless, the 1996 panel decision controls this case, and as such
the rollback penalty applicable to the 1991 appeal has no one year
limit. (FN5) To hold that taxpayers are not entitled to relief for those
years in which they did not renew their appeal would render our 1996
decision meaningless. In other words, under the state appraiser's view
that taxpayers were required to file an appeal each year, our 1996 holding
that the rollback provision has no time limit would have virtually no
effect. If taxpayers had to renew their appeal every year to get the
benefit of the rollback penalty, then the actual effect on taxpayers is no
different from the legislature's retroactive amendment, limiting the
rollback to one year. Limiting taxpayers' relief in our ruling today would
deprive taxpayers of the very vested rights granted to them by the 1996
decision that the legislature unconstitutionally took away. We cannot
hold the legislature's action unconstitutional, but give it effect
nonetheless. For 1992 and 1993, therefore, taxpayers are entitled to the
same rollback penalty they received in 1991.

Taxpayers did renew their appeal in 1994 and so failure to refile, by
itself, would not have barred taxpayers from receiving the rollback
penalty for that year. In 1994, however, unlike 1991,

the parties waived compliance with §4404(c). (FN6) Taxpayers made the
deliberate choice not to avail themselves of the rollback penalty and
instead sought to pursue the merits of the appeal. Taxpayers cannot pursue
both the merits of the appeal and retain an entitlement to the rollback
penalty. Such a posture would allow taxpayers to choose between the
rollback penalty and a merits determination - precisely the goal they
pursued in the 1991 tax appeal. Preserving this choice, taxpayers would
face no consequences from waiving compliance with § 4404(c). If they win
on the merits, then taxpayers would be taxed on a reduced value, and if
they lose on the merits, then they would still get the benefit of the
rollback penalty. The 1996 decision must be applied in concert with a
statutory scheme that contemplates two separate remedial options such that
when taxpayers initiated a new round of appeals and sought a determination
of their appeal on the merits, they could not do so from the comfort of
believing that they were already entitled to the rollback penalty. (FN7)
Therefore, taxpayers

are not entitled to any rollback penalty for 1994. What they are entitled
to is a hearing on the merits of their appeal and a determination of their
property value. The state appraiser did not reach the merits of the 1994
appeal because he found the record insufficient. Remand is appropriate so
that the parties can have a full hearing on the merits of taxpayers'
appeal.

Finally, as for the years 1995 and 1996, a merits hearing on the 1994
appeal will presumably lead to a determination of the value of the
property. At that point, "[t]he appraisal so fixed by the director or
court shall become the basis for the grand list of the taxpayer for the
year in which the appeal is taken and, if the appraisal relates to real
property, for the two next ensuing years." 32 V.S.A. § 4468. As
discussed above, taxpayers are not entitled to the rollback penalty once
they elected to go forward on the merits of the 1994 appeal. Thus, no
rollback penalty stemming from the 1991 appeal is appropriate for either
1995 or 1996 because of the intervening waiver of the rollback penalty in
1994.

Reversed and remanded for proceedings not inconsistent with this
decision.

FOR THE COURT:

_______________________________________
Associate Justice

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Footnotes

FN1. Prior to 1996, appeals from the BCA were decided by a three
person board. In 1996, the legislature replaced the board with a single
state appraiser. See 32 V.S.A. § 4465.

FN2. The full history of that decision is complicated, and irrelevant
to this appeal.

FN3. As 1 V.S.A. § 213 makes clear, however, the legislature may not
enact statutes that "affect a suit begun or pending at the time of their
passage."

FN4. The dissent claims that taxpayers are barred from relief for
1992, 1993, 1995, and 1996 because they failed to comply with the
objection requirement of 32 V.S.A. § 5292. The dissent, however, misreads
our precedent on the objection requirement of § 5292. In Hojaboom v. Town
of Swanton, 141 Vt. 43, 442 A.2d 1301 (1982), we held that § 5292 applies
only when a taxpayer questions the validity of a tax, not, as in this
case, the assessment of property. Hojaboom, 141 Vt. at 49, 442 A.2d at
1304. There the taxpayers challenged their property assessment and were
granted rollback relief pursuant to § 4404(c). We rejected the Town's
contention that the taxpayers were required to comply with § 5292. "The
plaintiffs . . . attacked the Board's findings as insufficient under 32
V.S.A. § 4404(c). Neither the validity of the tax nor the validity of the
actions of the listers or selectmen in assessing such tax were contested .
. . . Therefore the plaintiffs were not required to comply with the
filing procedure of § 5292(a)." 141 Vt. at 49-50, 442 A.2d at 1304. In
arguing that taxpayers in this case ought to have complied with § 5292,
the dissent fails to distinguish between rights and remedies and the
actions needed to preserve those rights and remedies. That taxpayers
appealed assessments that did not reflect the rollback penalty does not
change the fact that the case originated as an assessment case, not a
validity case. The remedy specified by § 4404(c), namely that the tax
amount would be based on previous liability rather than previous
assessment, does not alter the fundamental nature of the challenge.
Compliance with § 5292 stems from the nature of the right asserted, not
the ultimate remedy given. The mechanism for applying the rollback penalty
when there is town-wide reappraisal focuses on previous liability for
practical purposes - that method is the only one that will ensure that
taxpayers pay no more than the previous year.

FN5. The dissent is incorrect that this issue has already been
decided in Spears v. Town of Enosberg, 153 Vt. 259, 571 A.2d 604 (1989)
because that case involved a different part of the statute (§ 4404(c)),
and a different type of reappraisal. In Spears, the taxpayer was appealing
from the reappraisal of his property, not a town-wide reappraisal as in
this case. When the BCA failed to comply with 32 V.S.A. § 4404(c) in
Spears, the statute states that "the grand list of the [taxpayer] for the
year for which appeal is being made shall remain at the amount set before
the appealed change was made by the listers." 153 Vt. at 261, 571 A.2d at
605; 32 V.S.A. § 4404(c) (emphasis added). The statute, however,
continues: "except, if there has been a complete reappraisal, the grand
list of the [taxpayer] shall be set at a value which will produce a tax
liability equal to the tax liability for the proceeding year." 32 V.S.A.
§ 4404(c) (emphasis added). Thus, the interpretation in Spears limiting
relief to one year is entirely consistent with the plain language of that
part of the statute. The statute setting forth the remedy for a town-wide
reappraisal, however, contains no such limiting language. Spears,
therefore, cannot control this case.

FN6. The dissent distorts our holding in Villeneuve v. Town of
Cambridge, 148 Vt. 15, 527 A.2d 659 (1987). Contrary to the dissent's
assertion, Villeneuve did not establish that one cannot waive compliance
with § 4404(c) by "pursuing a statutory appeal through the BCA and state
board . . . in the same administrative proceeding." Post at 10. Rather,
Villeneuve merely held that in that particular case, the plaintiff did not
waive compliance with § 4404(c). 148 Vt. at 16, 527 A.2d at 660 ("There
was no waiver of that remedy in this matter.") (emphasis added). In that
case, the taxpayer was pursuing the rollback penalty through the hearing
before the Board of Appraisers, but on appeal to this Court, the taxpayer
requested a merits determination for the first time. In our opinion, we
cited the taxpayer's testimony before the Board as evidence that he had
been requesting the rollback penalty. Id. at 17, 527 A.2d at 660 (quoting
the taxpayer as saying: "So for that reason there [failure to comply with
§ 4404(c)], according to the statutes, my land should go back at the fair
market value of 1983."). Here, as the dissent acknowledges, taxpayers did
waive compliance with § 4404(c). There is no assertion that taxpayers are
attempting to waive their right to the rollback penalty for the first time
before this Court, as in Villeneuve.

FN7. We do not disagree with the dissent's interpretation of how the
remedial scheme of § 4404(c) ought to operate. The dissent, however,
refuses to acknowledge the import of our 1996 panel decision.
Notwithstanding our present interpretation of the statute, we cannot ignore
the mandate of the 1996 decision for these taxpayers. For better or for
worse, that decision held that there was no limit to the rollback relief
for taxpayers' 1991 appeal until the Town remedied their tax liability.
The dissent's position would deny taxpayers the relief to which they were
entitled by the decision.

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Dissenting

Nos. 99-559, 99-560, & 99-561

Robert Burton Supreme Court

v. On Appeal from
Property Valuation and Review
Town of Salisbury Division

January Term, 2001
George McDonough

Town of Salisbury

David Sidoti

Town of Salisbury

Rexford E. Roberts, State Appraiser

John F. Evers and Kevin E. Brown of Langrock Sperry & Wool, LLP,
Middlebury, for Plaintiffs-Appellants.

Donald R. Powers of Powers, English, Carroll & Ritter, Ltd.,
Middlebury, for Defendant-Appellee.

PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

DOOLEY, J., dissenting. I concur in the Court's decision that the
retroactive amendment to 32 V.S.A. § 4404(c) to deny these petitioners a
remedy is unconstitutional. I believe, however,

that taxpayers are not entitled to the relief they seek except for property
taxes assessed in 1994, the only year for which they appealed under the
statutory procedure. Accordingly, I disagree with the majority's mandate
and respectfully dissent. (FN1)

As an overview, I believe the majority opinion fails to distinguish
between the rights and remedies of taxpayers, on the one hand, and the
actions they must take to assert and preserve those rights and remedies,
on the other. I agree that taxpayers had the rights and remedies the
majority finds, but I believe they had to assert those rights, and seek
the appropriate remedies, for each year for which they were dissatisfied
with the listers' actions. Indeed, as discussed below, that is the
holding of Spears v. Town of Enosburg, 153 Vt. 259, 571 A.2d 604 (1989), a
decision that should control this case.

I have another disagreement with the majority's preservation holdings.
It holds that when taxpayers do preserve, by appealing in 1994, they lose
their rollback remedy. Again, this holding is contrary to a controlling
precedent, Villeneuve v. Town of Cambridge, 148 Vt. 15, 527 A.2d 659
1987). When coupled with the preservation holding above, the majority
opinion produces the perverse result that a taxpayer does not have to
preserve an objection to obtain a rollback remedy, but if the taxpayer
does preserve, the rollback remedy is lost.

At the outset, I think it critical to emphasize that the 1996 decision
of this Court dealt with property taxes for only the 1991 tax year because
that was the only year before the State Board of Appraisers below.
Although the decision discusses taxpayers' rights in future years, it does
not purport to adjudicate them. There is no indication that the record
reflected whether taxpayers had appealed in years after 1991. Thus, I can
not concur that a decision that taxpayers are denied relief for a year for
which they did not appeal renders our 1996 decision "meaningless," as the
majority asserts.

While I do not want to repeat all the facts, certain aspects of them
need to be highlighted. Following a reappraisal by the Town, taxpayers
received notification of an increased appraisal of their property in 1991.
They appealed to the listers, who in 1991 denied the appeal. They then
appealed to the BCA, which also denied their appeal in 1991, but its
decision was untimely. In October of 1991, they appealed to the State
Board of Appraisers.

The appeal apparently languished in the Board. In 1992, taxpayers
were assessed at the exact same value as in 1991. This time, however,
they registered no objection to the appraisal at any level. I recognize
that their inaction is understandable since they received no personal
notice of the appraisal because it was unchanged. See 32 V.S.A. §
4111(e). Having failed to appeal, however, they then failed to file an
objection when they received their tax bill, as required by 32 V.S.A. §
5292. The exact same situation arose in 1993, and taxpayers failed again
to object to the identical appraisal in that year.

Apparently, the Chair of the state Board indicated at a hearing in
early 1994 that failure to appeal would be considered a waiver, and
taxpayers again went through the appeal process with respect to the 1994
appraisal, again the identical appraisal to that in 1991. Despite the fact
the case

then moved to this Court, taxpayers failed to contest the appraisal in
1995; and did not do so again in 1996 even though the appraisal remained
the same despite our March 1996 decision.

The statutes provide for a very detailed appeal procedure that allows
the local taxing municipality two opportunities to correct any errors in
its determination of fair market value and resolves the dispute either in
a specialized administrative adjudication or in superior court with
ultimate appeal to this Court. While we have not addressed this issue
directly, I have no doubt that the Legislature intended that a taxpayer
exhaust all local remedies before seeking review in the courts or the
state Board. See Jordan v. State, 166 Vt. 509, 510, 702 A.2d 58, 59 (1997)
(requirement of exhaustion of administrative remedies is presumed);
Petition of D.A. Assocs., 150 Vt. 18, 20, 547 A.2d 1325, 1326 (1988)
(where administrative remedy is established by statute, it must be sought
and exhausted prior to court review); see also Spears, 153 Vt. at 262, 571 A.2d at 606 (burden is on taxpayer to challenge an unfavorable tax
assessment in each year; the statute requires that an appeal be taken
pursuant to 32 V.S.A. § 4404(a)). The whole point of these local remedies
is to enable the municipality to settle any dispute locally, if possible,
and to ensure fairness in assessments throughout the municipality.
Indeed, as the majority states "to limit taxpayer's relief to those years
in which they filed an appeal would be consistent with the statutory scheme
for grand list appeals."

The statutes also provide for a very specific objection requirement if
a taxpayer attacks the validity of an assessment. See 32 V.S.A. § 5292.
Although the filing of an objection is unnecessary when the issue is one
that can be appealed, see Hojaboom v. Town of Swanton, 141 Vt. 43, 49, 442 A.2d 1301, 1304 (1982), I believe it is necessary when the taxpayer claims
that an assessment is invalid because it does not reflect an applicable
rollback remedy. Moreover, under our 1996

decision interpreting 32 V.S.A. § 4404(c), the rollback is to the former
tax liability, and not to the former assessed property value. (FN2) Thus,
taxpayers are attacking the amount of their tax liability for 1992 and
1993, an attack that comes squarely within the objection requirement. The
statute requires that an objection be filed within two months of November
15th in each year.(FN3) Taxpayers failed to file an objection in this case.

There is no indication in the statutory scheme that a taxpayer need
only contest an appraisal issue in one year to preserve it forever.
Property tax appraisals have a duration of only one year. The listers
must come up with a new appraisal every year. They may choose to appraise
at the prior year's value, but that is an affirmative decision, not a
legal requirement. If the appraisal is redone each year, it is consistent
to require the taxpayer to challenge the assessment for each year that he
or she is dissatisfied with it.

This is not a technical requirement. These taxpayers were
dissatisfied with a reappraisal that occurred in 1991, but their grounds
are not necessarily operative in future years as property values change,
and often not proportionally throughout the municipality. It is entirely
possible that assessed valuation of taxpayers' property could exceed fair
market value in 1991, but not in 1992 and 1993. It is also possible that
rollback relief could be less advantageous to the taxpayer than an
assessment

at current fair market value. Moreover, the municipality is entitled to
notice of challenges that may reduce revenues because it must build a
budget on its best estimate of what resources are available.

Three other points are significant. First, we have already decided
this question in an earlier case. In Spears v. Town of Enosburg, the
taxpayer had obtained a rollback remedy for one tax year because the BCA
failed to comply with 32 V.S.A. § 4404(c) and sought the same remedy for
future years, essentially the relief sought by taxpayers here but in a
non-reappraisal case. We found the statute provided for only a one year
rollback. In response to the argument that one-year rollback was an
ineffective remedy, we responded that plaintiffs could not obtain a better
remedy, but not because of the limited duration of the rollback; instead
it was because of their own inaction in the following years:

In fact, the reappraisal became operative because of
plaintiffs' inaction. The burden is on the taxpayer to
challenge an unfavorable assessment in each tax year. 32
V.S.A. § 4404(a) states that a taxpayer must appeal by May
20th of the tax year for which the appeal is being taken.
Plaintiffs failed to do so, in any of the three years at
issue. The Town had no reason to reappraise the property
and notify the taxpayers during the pendency of the appeal,
since the listing was valid presumptively until the court
decided otherwise. See Adams v. Town of West Haven, 147 Vt.
618, 619, 523 A.2d 1244, 1245 (1987). Absent a timely
challenge by the taxpayers, the appraisal of $137,700 for
the tax years 1984, 1985 and 1986 must stand.

153 Vt. at 262, 571 A.2d at 606.

The point of the above analysis in Spears was that even if the
plaintiffs had prevailed in their multi-year rollback argument, they could
obtain no relief because they failed to appeal in the out years. Here,
plaintiffs won on their multi-year rollback argument, but must face the
additional

reason for denial of relief in Spears. Having failed to appeal, the
additional reason applies to them as well.

The majority's response that Spears is a non-reappraisal case, as I
acknowledge above, is entirely beside the point. We concluded in Spears
that taxpayer was not entitled to a multi-year rollback because it was not
a reappraisal case, exactly as the majority states, but added that even if
taxpayer had qualified for a multi-year rollback, he had waived it by
failing to appeal in the out years. The majority ignores the latter part
of the holding as if it does not exist.

Second, requiring preservation in the out years is consistent with the
nature of the remedy this Court found was required by § 4404(c) in the
1996 decision. We held that in the case of a town-wide reappraisal "there
is no time limit to the rollback penalty." Unlike the rollback remedy
applicable when a taxpayer obtains an assessed value from the state Board,
see 32 V.S.A. § 4468, this rollback remedy relates to the tax actually
paid on the property rather than its assessed valuation. I doubt the 1996
decision intended that taxpayers would pay the same amount of taxes
forever, despite large changes in municipal and school district
expenditures and in the fair market value of the property. Indeed, the
majority apparently agrees, stating that the rollback would continue "until
the Town remedied their assessments." (FN4) Taxpayers essentially concede
this point by not seeking

relief beyond 1996 even though the majority has described their on-going
rollback remedy as a "vested right." Moreover, the point of the 1996
decision is that it would make no difference to the taxpayers whether they
received rollback relief under 32 V.S.A. § 4468 or under § 4404(c), and §
4468 rollback relief does not apply if there is a town-wide reappraisal or
if a taxpayer's property is altered, changed or damaged.

If the 1996 decision had remained the law, I suspect there would have
been further litigation to define the nature of the rollback relief. It
would make no sense to allow taxpayers, without objection, to pay a tax
amount different from that imposed in 1990 and then seek a partial refund
years later arguing over the reach of the rollback remedy. That is exactly
what the majority has allowed here.

Third, although unstated, much of the majority's objection to
requiring preservation is that we are dealing with a case where the rules
were unpredictable when taxpayers chose to appeal, or not appeal, and the
result of requiring preservation is that the Town will prevail, at least in
part, albeit not for the reasons that they have argued they should
prevail. Certainly, the legislative appeal scheme would work far better
if we were not dealing with a State Board of Appraisers decision rendered
over three years after the listers set the appraised values in dispute and
an appeal to this Court heard and rendered sixteen months later.
Nevertheless, and specifically after Spear, it is not unreasonable to
expect the taxpayers, who were acting as a group and with counsel, to
somehow

register their objections to the Town's taxing actions in the years after
1991. They knew that they opposed these actions, and they could not rely
on the 1991 appeal to fully conclude the dispute between them and the
Town.

Finally, I disagree with the court's rationale for denying relief for
1994, 1995 and 1996, pending a new decision by the Board. On November 30,
1994, the parties agreed in connection with the appeal of the 1994
assessment to allow the BCA to make a decision based upon the record made
in the appeal of the 1991 tax decision, rather than going through a new
hearing that would involve the same evidence. They signed a stipulation
to that effect and waived compliance with § 4404 because they recognized
that this procedure was not authorized by the section, and its use might
give taxpayers a right to a rollback remedy. The BCA, acting on the
stipulation, issued a decision against taxpayers based on the 1991 record.
The stipulation is the waiver of defects in the BCA adjudication to which
the Board and the majority refer. All of this was done before this Court's
1996 decision.

Both the Board and the majority find that the 1994 stipulation is some
kind of waiver of rollback relief. I disagree. I think it is better
characterized as a red herring.

First, it is a distortion to call the stipulation a waiver of rollback
relief. The majority says taxpayers "made the deliberate choice not to
avail themselves of the rollback penalty and instead sought to pursue the
merits of the appeal" and concludes that if they "initiated a new round of
appeals and sought a determination of their appeal on the merits, they
could not do so from the comfort of believing they were already entitled
to a rollback penalty." Taxpayers appealed in 1994, two years before they
learned they had available an open ended rollback remedy, relief they never
asked for; they could not have acted on the "comfort" they had a rollback
remedy available. They never had a rollback penalty which they made "a
deliberate choice not to avail themselves of." They

stipulated to use of a noncomplying procedure in advance of the BCA
hearing. They entered into the stipulation only to be sure that use of
the noncomplying procedure did not trigger a § 4404(c) violation. Absent
the stipulation, the BCA would have heard the 1994 appeal under the
statutory requirements, and there would have been no entitlement to a
rollback penalty.

Second, a tax-year 1994 waiver would be irrelevant to taxpayers'
rights. Taxpayers are relying on the indefinite rollback remedy granted
by this Court in our 1996 decision for the tax-year 1991 violations of §
4404(c). Even under the majority's analysis, taxpayers never waived those
violations.

Related to that point, our law is clear that a waiver is "a voluntary
relinquishment of a known right." KPC Corp. v. Book Press, Inc., 161 Vt.
145, 148, 636 A.2d 325, 327 (1993). The majority holds that by agreeing
to a noncomplying procedure in 1994 taxpayers waived their right to
rollback relief created by this Court in 1996, relief they never
requested. I am perplexed how taxpayers by actions in 1994 can be held to
have waived a remedy known only two years later.

Finally, we held in Villeneuve v. Town of Cambridge that pursuing a
statutory appeal through the BCA and state Board does not constitute a
waiver of the right to pursue a rollback remedy for violations of §
4404(c) in the same administrative proceeding. 148 Vt. at 16, 527 A.2d at
660. The majority is creating an inconsistent waiver theory here.

The majority's response to this point is unpersuasive. The issues in
a state Board appeal are set forth in § 4467 and require the Board to set
taxpayer's property in the grand list at a corresponding value to the
listed value of comparable properties. Consistent with the role of the
Board, the taxpayer in Villeneuve asked for a determination of fair market
value both in the Board and in this Court, exactly as the taxpayers have
done in this case. Essentially, the majority is faulting

taxpayers for not saying in their state Board appeal that they also rely on
their rollback remedy created because of the violation of their rights for
tax-year 1991. They couldn't say that because they had no idea that they
had such a remedy when they appeared before the Board.

I would hold that taxpayers waived their right to obtain the rollback
relief in 1992, 1993, 1995 and 1996 by not preserving it. I would hold,
however, that they are entitled to rollback relief for 1994 because they
did preserve in that year. Accordingly, I dissent from the mandate.

_______________________________________
Associate Justice

----------------------------------------------------------------------------
Footnotes

FN1. I also question whether we have jurisdiction over this appeal.
The State Appraiser did not resolve all issues before him, leaving the
assessment for 1994, 1995 and 1996 to further hearings, and his order is,
therefore, not a final judgment. Further, the State Appraiser ruled that
since taxpayers appealed only for the year 1994, he did not have
jurisdiction over any other year. Since we are acting on an appeal from
the State Appraiser, our jurisdiction is similarly limited. Nevertheless,
given how long this controversy has been in litigation, I would use our
power under V.R.A.P. 2 to decide the appeal.

FN2. The applicable phrase in § 4404(c) - "shall be set at a value
which will produce a tax liability equal to the tax liability for the
preceding year" - can be implemented retroactively because we know the tax
rate. It cannot be implemented prospectively in the normal course because
the tax rate is not known when the assessed value is determined. Despite
the way the language is written, it is actually a rollback to the 1990 tax
liability, and not to a specific assessed value.

FN3. Although we do not have to reach this question, the majority
assumes without analysis that the three-year rollback remedy under 32
V.S.A. § 4468 is available even if the taxpayer does not appeal or
preserve an objection for the later years. I disagree with this assumption
and would hold that preservation is required even to obtain the second and
third year of rollback relief.

FN4. The majority describes the limit on the rollback remedy as
coming from a sentence of the 1996 decision stating: "Accordingly, the
Town must act to alter the 1990 tax liability imposed under § 4404(c)."
It states that the act described in the sentence did not occur until 1996.
I don't know what the sentence in the 1996 opinion means, but the Town did
nothing special in 1996 that it did not do in 1992; in both years it taxed
plaintiffs in an amount different from 1990. There is no ground to say
that the rollback ended in 1996.

In two sentences the State Appraiser attempted to describe the
limit of the rollback. He said that the "rollback penalty establishes a
taxpayer's liability until the town acts to alter the liability imposed
under section 4404(c)." Later in his opinions, he added that the rollback
penalty set the assessed value at that necessary to produce a tax
liability equal to that of 1990 "until the town acted to change it." I
find both equally cryptic. The Town set the assessed value in 1992 at a
level different from that calculated to achieve the same tax liability as
in 1990, and, thus, "acted to change it." Under the State Appraiser's
description of the limit of the rollback, I don't understand why it did
not end in one year.

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