2009 Ct. Sup. 12101
No. FST CV 08 4013963 SConnecticut Superior Court Judicial District of Stamford-Norwalk at Stamford
July 16, 2009
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (109.00)
TAGGART D. ADAMS, SUPERIOR COURT JUDGE.
I. Factual Background
The plaintiff has appealed the 2007 municipal tax assessment on its property located in downtown Stamford claiming that the assessed value of the property is excessive. The first count of the appeal is based on General Statutes § 12-117a which broadly permits any person claiming to be aggrieved by the action of a municipal board of assessment appeals to appeal the action. The second count of the appeal is based on General Statutes § 12-119 which allows appeals of assessments where the tax on property “was computed on an assessment which, under all the circumstances, was manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of such property . . .”
The City of Stamford (Stamford) has moved for summary judgment dismissing the second count of the appeal. The plaintiff opposes the motion.
The property in question is a parcel of land known as Canterbury Green, 201 Broad Street, Parcel ID number 003-6718. Complaint, First Count, ¶ 1. The leasehold interest in the property, on October 1, 2007 was owned by the plaintiff, 201 Broad Street Owners, LLC which purchased it around August 2, 2007 for a total price of $120 million. Id.;
Affidavit of Francis Kirwin, City of Stamford Assessor, ¶ 4. In 2007, Stamford performed a city-wide revaluation of property as of October 1, 2007 and assessed the interest owned by the plaintiff at $125,992,614. Kirwin Aff. ¶ 3, 5. The assessed value, at 70% of full value, was $88,194,830. Complaint ¶ 2.
II. Standard of Review
The Practice Book § 17-49 provides that summary judgment shall be CT Page 12102 rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. “In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.” Appleton v. Board of Education, 254 Conn. 205, 209 (2000). Summary judgment “is appropriate only if a fair and reasonable person could conclude only one way.” Miller v. United Technologies Corp., 233 Conn. 732, 751 (1985). “The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitles him to judgment as a matter of law.” Appleton v. Board of Education, supra, 254 Conn. 209. “A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.” (Internal quotation marks omitted.) United Oil Co. v. Urban Development Commission, 158 Conn. 364, 379 (1969). The trial court, in the context of summary judgment motion, may not decide issues of material fact, but only determine whether such genuine issues exist. Nolan v. Borkowski, 206 Conn. 495, 500 (1998).
“Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact [question] . . . a party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue. It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.” Maffucci v. Royal Park Ltd. Partnership, 243 Conn. 552, 554
(1998). “[T]he party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.” Appleton v. Board of Education, supra, 254 Conn. 209.
The Connecticut Supreme Court discussed the purpose and elements of General Statutes § 12-119 in Second Stone Ridge Cooperative Corporation v. Bridgeport, 220 Conn. 335 (1991). The statute allows a taxpayer one year to bring a claim that the tax was imposed when the town had no authority to tax the subject property, or that the assessment was “manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining” real property value. Id., 339-40. (Emphasis added by Second Stone Ridge court.) See also Pauker v. Roig, 232 Conn. 335, 340-42 (1995) (emphasizing the two requirements of Section 12-119). In this connection “something more than mere valuation is at issue.” Second Stone Ridge, supra, 220 Conn. 340. The plaintiff must show “there was misfeasance or nonfeasance by the taxing authorities, or that the assessment was arbitrary or so excessive CT Page 12103 or discriminatory as in itself to show a disregard of duty on their part.” Id., 341 [quoting Mead v. Greenwich, 131 Conn. 273, 275 (1944)].
Only if the plaintiff is able to meet this exacting test by establishing that the action of the assessors would result in illegality can the plaintiff prevail under § 12-119. The focus of § 12-119 is whether the assessment is `illegal.’ Cohn v. Hartford, 130 Conn. 699, 703 (1944).
Second Stone Ridge Cooperative Corporation v. Bridgeport, supra, 341.
A. Manifestly Excessive Assessment.
As set out in Second Stone Ridge, to establish a claim under Section 12-119, the plaintiff must prove that an assessment was both “manifestly excessive” and in disregard of some statutory command. The court will turn first to the manifestly excessive requirement.
Stamford contends that the valuation, and therefore the tax assessment, of plaintiff’s property was not manifestly excessive because according to the Assessor Kirwan’s affidavit, the valuation was strikingly close to the actual purchase price paid by the plaintiff two months prior to the valuation date of October 1, 2007. According to the affidavit, the assessor’s valuation was 5.0% higher than the purchase price paid by the plaintiff.
Connecticut statutes provide that municipalities shall assess real property at seventy percent of true and actual value. General Statutes §12-62a(b). For the property in question in this case, true and actual value is statutorily defined as “fair market value,” not including the value obtained at forced or auction sales. General Statutes § 12-63. Fair market value has been defined as “the value that would be fixed in fair negotiations between a desirous buyer and a willing seller, neither under any undue compulsion to make a deal.” Uniroyal, Inc. v. Board of Tax Review, 174 Conn. 380, 390 (1978) [quoting New Haven Water Co. v. Board of Tax Review, 166 Conn. 232, 236 (1974)]. It has also been described as the price a willing seller would pay a willing buyer based on the highest and best possible use of the land assuming there is a market for such use. Carol Management Corp. v. Board of Tax Review, 228 Conn. 23, 34
(1993) [citing Mazzola v. Commissioner of Transportation, 175 Conn. 576, 581, 582 (1978)].
The Connecticut Supreme Court has recognized that using the sales price in sales of comparable properties is an approved method of ascertaining CT Page 12104 fair market value. Melillo v. New Haven, 249 Conn. 138, 150 n. 22 (1999). In Uniroyal, Inc. v. Board of Tax Review, supra, 174 Conn. 385-86
that court noted that fair market value is “best ascertained” by reference to market sales, although when such sales are not available, other methods can be used.
In his affidavit Assessor Kirwin stated reasons for arriving at a property valuation close to the stated transaction price paid two months before the valuation date:
Although other valuation methods may need to be considered in valuing property, an arms-length sale of property, close in time to the revaluation date (here, just under two months), is especially persuasive evidence of the actual fair market value of property (or at least establishes a floor on value, since there usually is no way to know if a seller was under some form of financial duress to sell or sell quickly). I recognize that special financing arrangements could result in an increase in stated purchase price above fair market value (especially, below market rate financing), but I am unaware of any such circumstance with respect to this property, and I am unaware of any claim by the owner that special financing somehow inflated the purchase price.
This was not an isolated sale of a single property (which might be discounted as an aberration); according to the Stamford Land Records, there were a number of transfers of legal interests in office buildings recorded on August 2, 2007 (comprising all of Volume 9098 on the Stamford Land Records), with a total transaction value of approximately $850,000,000, involving six legally-distinct purchasers (One Stamford Plaza Owner; Three Stamford Plaza Owner; Four Stamford Plaza Owner; 177 Broad Street Owner; 201 Broad Street Owner (leasehold interest — cost data obtained from owner’s recitation in appeal to Board of Assessment Appeals); 300 Atlantic Street Owner). Although the valuation of the parcels involved in each of these transactions is under appeal, the amounts paid for the `other’ properties tend to confirm the City’s valuation of this property. To the extent that these transfers appear to have been part of a single transaction for a CT Page 12105 total price of about $850,000,000, there may be some minor variations as to allocations of value among the properties, but the payment of such a large sum would seem to eliminate any possibility of the transaction being characterized as rash or irrational.
Kirwin Aff. ¶ 6, 7.
In sum, Stamford argues that the existence of the arms-length purchase and sale transaction in early August 2007 is relevant and persuasive evidence — the ultimate comparative sale in Stamford’s view — as to fair market value as of October 1, 2007, and that there are reasons, as set forth in Kirwin’s affidavit, to support a conclusion that the transaction price was closely related to fair market value.
The plaintiff’s opposition to summary judgment on the “manifestly excessive” issue is twofold: (1) that the issue of what is manifestly excessive is a question of fact that simply cannot be resolved on a motion for summary judgment and (2) Stamford has failed to identify what method of valuation was employed, making it impossible to determine whether the correct method was used and whether the method was used properly.
Plaintiff argues that the price of its purchase of the property by itself is not sufficient to establish the fair market value of the property, citing O’Brien v. Board of Tax Review, 169 Conn. 129, 136 (1975) and Thaw v. Town of Fairfield, 132 Conn. 173, 176-77 (1945). This court does not necessarily disagree with that proposition but notes that bot Thaw and O’Brien also state that such evidence is certainly competent evidence of true and actual value.
Plaintiff’s contention that summary judgment may not be granted when Stamford has not identified what method of valuation was used precludes summary judgment is largely, if not entirely, based on the case of Ganim v. Town of Monroe, Superior Court, judicial district of Fairfield at Bridgeport, CV 93 305126 (March 15, 1994, Fuller J.). It is not persuasive. In Ganim, Judge Fuller held that “without concrete information as to which assessment method was applied for each property, the plaintiff cannot effectively oppose the summary judgment by introducing countervailing evidence . . .” While it is not apparent in Ganim what types of property were involved, the fact remains that the Kirwin affidavit makes it quite clear that the valuation of the property in this case was largely based on its recent sale price, and not on any other method such as replacement cost or income capitalization. The plaintiff, however, chose not to submit any evidentiary facts by affidavit or CT Page 12106 otherwise, to establish that the method was improper, and moreover, did not make a showing pursuant to Practice Book § 17-47 that additional facts were required but unavailable. Furthermore, whether an incorrect valuation method was employed, is not a claim giving rise to a cause of action under Section 12-119. Breezy Knoll Association v. Town of Morris, 286 Conn. 766, 778 n. 20 (2008).
The court further determines that there are no unresolved material questions of fact as to whether the assessment was manifestly excessive. The plaintiff has not provided an evidentiary foundation to demonstrate that there is a genuine issue of fact. That is not to say the 2007 assessment was correct in all respects, but the plaintiff must show more than just a potential valuation error. “Manifestly” is an adverb that means something is shown plainly, clearly, or is obvious, readily perceived, or evident. Webster’s New World College Dictionary (4th ed., 2007); Webster’s Ninth New Collegiate Dictionary (1988). In this case the plaintiff has provided no evidence through other sales, through income calculations or otherwise that the 2007 valuation of the parcel in question was so wide of the mark as to be clearly or obviously excessive. The plaintiff had ample opportunity to provide facts or data, if they existed, to at least raise the issue of whether the valuation was manifestly excessive to a genuine issue of fact. It chose not to do so. It even declined to follow up on Kirwin’s statement that special financing arrangements might artificially inflate a price. Therefore, the only evidence available is that the valuation is slightly above the recent transaction price. In this court’s view that is not manifestly excessive.
This court interprets Section 12-119, and the Connecticut Supreme Court cases discussing that statute, to require both a manifestly excessive assessment and some degree of illegality. Therefore, the court’s conclusion that the valuation in question is not manifestly excessive is determinative of the summary judgment motion. However, perhaps in an abundance of caution, the court will also consider the illegality issue which has been fully briefed and argued.
The plaintiff taxpayer alleges in the second count of its complaint that the assessment of its property was “manifestly excessive and could not have been arrived at except by disregarding the statutes, including without limitation Conn. Gen. Stat. § 12-63d.” That statute reads in full:
The assessor in any municipality may not, with respect CT Page 12107 to any parcel of real property in the assessment list for any assessment year, make a change in the assessed value of such parcel, as compared to the immediately preceding assessment list, solely on the basis of the sale price of such parcel in any sale or transfer of such parcel.
Both parties agree, as does the Connecticut Supreme Court, that the above statute was enacted in response to a decision of the Connecticut Supreme Court in 84 Century Limited Partnership v. Board of Tax Review of Rocky Hill, 207 Conn. 250 (1988) holding that local assessors had the power to adjust real estate assessments between town-wide reevaluations when a sale of the property showed that the property had greatly increased in value in relation to other properties in town. Id, 263. Se DeSena v. Waterbury, 249 Conn. 63, 84 (1999).
However, the parties disagree as to the meaning of the statute and its import to this case. The plaintiff contends that the restrictions of Section 12-63d prohibit a municipal assessor from using the sale price of the subject property as the basis for revaluating a property in any assessment year, including a year in which there is a town-wide or city-wide revaluation. To the plaintiff, Stamford’s use of the price of a purchase and sale transaction involving the subject property two months before the assessment valuation date of October 1, 2007 was illegal. The plaintiff argues there is no language in Section 12-63d restricting its prohibitions to non-revaluation years.
In contrast, Stamford argues that Section 12-63d prohibits an assessor from revaluing a property solely when there is a sale of the property and there is no city-wide revaluation. It. contends that when there is a city-wide revaluation undertaken all, or nearly all, property valuations are changed and it is well accepted that in most cases sales prices of the property or comparable sales are routinely and appropriately used to ascertain fair market value. The City points out that fair market value is defined by the courts as the price paid by a willing buyer to a willing seller. The City also cites Judge Aronson’s decision in A/C Chatfield Limited Partnership v. West Hartford, Superior Court, judicial district of Hartford, CV 94 0538038 (October 11, 1996) [18 Conn. L. Rptr. 435] in support of its position that Section 12-63d
only disallows changes in valuation based on sales in assessment years that are not revaluation years.
Both arguments have merit and are well articulated. This court however, is persuaded that Stamford did not violate Section 12-63d
because the revaluation of the plaintiff’s property in 2007 was not based CT Page 12108 solely on the fact that the property was sold, but because 2007 was a revaluation year for all properties in Stamford. In other words, the court interprets Section 12-63d as prohibiting a revaluation when the sole basis for revaluation of a piece of property is its sale. That is not the case here. The property’s value may well have been largely based on the sale earlier in 2007, but the fact that it was subject to revaluation was the result of the City’s decision to revalue city-wide in 2007.
Furthermore, while the plaintiff seems to contend that there was some nefarious reason to conduct a city-wide revaluation in 2007 after a revaluation was conducted in 2006 there are no facts submitted to support this inference, and it is not illegal, and no one contends it is, to conduct revaluations in consecutive years.
For the reasons set forth herein the motion for summary judgment dismissing the second count is granted.
The ten parcels; include the two parcels owned by 177 Broad Street which make up one economic unit. Similarly, four parcels (each subject to an appeal) owned by One Stamford Plaza make up one economic unit. The other four parcels are each owned by separate owners. Because the ten appeals raise the same issue, and the summary judgment motions and objections thereto are substantively identical, the memorandum of decision in this case and the remaining nine other cases will be the same except for the case caption, the parcel identification numbers and parcel’s assessed value.
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