| Matter of Gordon v Town of Esopus |
| 2009 NY Slip Op 01381 [59 AD3d 896] |
| February 26, 2009 |
| Appellate Division, Third Department |
| In the Matter of Richard E. Gordon et al., Respondents, v Town ofEsopus et al., Appellants. (And Three Other Related Proceedings.) |
—[*1] Van de Water & Van de Water, Poughkeepsie (David D. Hagstrom of counsel), forrespondents.
Stein, J. Appeal from a judgment of the Supreme Court (O'Connor, J.), entered March 26,2008 in Ulster County, which granted petitioners' applications, in four proceedings pursuant toRPTL article 7, to challenge the tax assessments on certain real property owned by petitioners.
Petitioners own approximately 108 acres of land in the Town of Esopus, Ulster County,which includes ponds, streams, 2,200 feet of Hudson River frontage and scenic views of theriver. In 1978, the Department of Environmental Conservation (hereinafter DEC) certified 104acres of the land as a tract of privately owned forest land eligible for a tax exemption pursuant toRPTL 480-a.[FN1]Respondent Assessor of the Town of Esopus approved petitioners' initial [*2]application for exemption. Thereafter, petitioners have annuallyfiled with DEC a certified commitment to continue forest crop production in accordance withRPTL 480-a and, for approximately 25 years, the tract has continually been accorded an 80%exemption from taxation (see RPTL 480-a [4] [a]).
Petitioners commenced these four proceedings pursuant to RPTL article 7 to challenge theassessments of the parcel on the tax rolls for years 2002, 2003, 2004 and 2005, contending thatsuch assessments were, among other things, unequal and excessive. Petitioners then moved forpartial summary judgment pursuant to CPLR 3212 to establish, as a matter of law, that theproperty should be valued as forest land under RPTL 480-a, that the property should have a"912" assessment classification[FN2]and that, when valuing the property using the comparable sales approach, comparables should belimited to land that is certified as exempt forest land under RPTL 480-a. Supreme Court grantedpetitioners' motion in all respects and this Court affirmed the court's judgment in part, butreversed the finding that only other similarly classified properties could be used as comparablesin valuing petitioners' land (31 AD3d 981 [2006]).
Following a nonjury trial, Supreme Court found that petitioners had established that theirproperty was overvalued by respondents for the years in question. The court adopted the valuescalculated by petitioners' appraiser and directed respondents to issue refunds accordingly.Respondents now appeal.
We reverse. Initially, we note that " 'a property valuation by the tax assessor ispresumptively valid' " (Matter ofEckerd Corp. v Semon, 35 AD3d 931, 932 [2006], quoting Matter of FMC Corp.[Peroxygen Chems. Div.] v Unmack, 92 NY2d 179, 187 [1998]; see Matter of Corvetti v Winchell, 51AD3d 47, 49 [2008]; Matter ofGibson v Gleason, 20 AD3d 623, 625 [2005], lv denied 5 NY3d 713 [2005];Matter of State of New York v Town of Hardenburgh, 273 AD2d 769, 771 [2000]). Onlywhen a petitioner challenging the assessment comes forward with substantial evidence to thecontrary does the presumption disappear (see Matter of FMC Corp. [Peroxygen Chems. Div.]v Unmack, 92 NY2d at 187; Matter of Eckerd Corp. v Semon, 35 AD3d at 932). Thepetitioner must then demonstrate by a preponderance of the evidence that the subject propertyhas been overvalued (see Matter of FMC Corp. [Peroxygen Chems. Div.] v Unmack, 92NY2d at 188; Matter of Eckerd Corp. v Semon, 35 AD3d at 932; Matter of City ofTroy v Town of Pittstown, 306 AD2d 718, 720 [2003], lv denied 1 NY3d 505[2003]).
Here, Supreme Court correctly determined that petitioners, through their submitted appraisal,rebutted the presumption of validity that attached to the assessments (see Matter of NiagaraMohawk Power Corp. v Assessor of Town of Geddes, 92 NY2d 192, 196 [1998]; Matterof FMC Corp. [Peroxygen Chems. Div.] v Unmack, 92 NY2d at 188; Matter of Corvettiv Winchell, 51 AD3d at 49; Matter of Eckerd Corp. v Semon, 35 AD3d at 933;Matter of Gibson v [*3]Gleason, 20 AD3d at 625).However, upon our review of " 'the entire record, including evidence of claimed deficiencies inthe assessment' " (Matter of City of Troy v Town of Pittstown, 306 AD2d at 720, quotingMatter of FMC Corp. [Peroxygen Chems. Div.] v Unmack, 92 NY2d at 188), we findSupreme Court's determination that petitioners met their burden of proving overvaluation to beagainst the weight of the evidence (see Matter of Eckerd Corp. v Semon, 35 AD3d at932).
Significantly, petitioners argued that their property should be appraised in comparison tosimilar tracts of managed forest land with exemptions under RPTL 480-a; therefore, theirappraiser used as comparables only sales of properties with that designation. Accordingly,whereas all of the comparables used by respondents' appraiser were located in Ulster Countynear the subject property, had similar topography and views and were equally accessible to theHudson River and the State Thruway, only two of petitioners' 17 "comparable" sales werelocated in Ulster County and none was located adjacent to the Hudson River. Moreover,petitioners' appraiser admitted to failing to adjust for the location of his comparables.
We note that "[t]he goal in tax assessment cases is to arrive at a fair market value" (31 AD3dat 982). "By its very definition, a comparable sale need not be identical to the subject property. . . [but] need only be sufficiently similar to serve as a guide to the market value ofthe [subject] complex, notwithstanding differences between these comparables and the [subject]property" (Matter of Eckerd Corp. v Semon, 35 AD3d at 933-934 [internal quotationmarks and citations omitted]; accord Matter of General Elec. Co. v Town of Salina, 69NY2d 730, 732 [1986]; see 31 AD3d at 982; Matter of City of Troy v Town ofPittstown, 306 AD2d at 721-722). Thus, notwithstanding our prior affirmance of that part ofSupreme Court's judgment holding that the subject property should be valued as forest land, wealso held that "whether any parcel qualifies for a private forest exemption is an issue distinctfrom the fair market value of that parcel" (31 AD3d at 982), and expressly rejected petitioners'argument that only exempt properties could be used as comparables.[FN3]
By limiting the comparables used to properties with an RPTL 480-a exemption, petitioners'appraiser eliminated from consideration other properties in closer proximity to the subjectproperty and with more similar physical characteristics (including several utilized byrespondents' appraiser). Nor, in valuing the 108-acre parcel, did petitioners' appraiser make adistinction regarding the value of the portion of the property that is not managed forest land. Weare also unpersuaded by petitioners' argument that, in enacting RPTL 480-a, the Legislatureintended to both encourage a lower assessment of eligible properties and exempt 80% of theassessed value from taxation. To the contrary, after reviewing the legislative history andrecognizing that exemptions from tax are to be narrowly construed (see generally Matter ofAldrich v Murphy, 42 AD2d 385, 388 [1973], lv denied 34 NY2d 516 [1974]), weconclude that petitioners' approach to valuation—which results in an appraised value thatis substantially lower than the assessed value—would be inconsistent, generally, with theLegislature's intent to provide owners with an incentive for continuing forest crop productionand, in particular, with the [*4]penalty provisions of RPTL 480-a(7).[FN4]Therefore, in our view, petitioners' appraisal was insufficient to demonstrate by a preponderanceof the evidence that the property was overvalued (see Matter of FMC Corp. [PeroxygenChems. Div.] v Unmack, 92 NY2d at 188), even when the deficiencies of respondents'appraisal are considered.
Peters, J.P. and Rose, J., concur.
Lahtinen, J. (dissenting). Our review of the record leads us to conclude that Supreme Court'sdetermination that petitioners met their burden of proving overvaluation was supported by theweight of the evidence and, therefore, we respectfully dissent.
As Supreme Court correctly observed, the fundamental issue was whether to value thesubject property on the basis of its current use—managed forest land—or as vacantland, which would allow the property to be valued at its highest and best use. Petitioners'appraisal valued the property as managed forest land and contained 17 comparable sales ofmanaged forest land located throughout the Hudson River Valley corridor. Respondents'appraisal was based upon the highest and best use of the property as vacant land and containedfive comparable sales of Ulster County building sites for high-end homes with river views. Noneof the five comparables was designated as managed forest land.
Supported by our earlier decision (31 AD3d 981 [2006]) affirming that the subject propertyis entitled to the managed forest land classification, Supreme Court credited the testimony ofpetitioners' appraiser, which established by a preponderance of the evidence his conclusion thatthe property's valuation was to be based upon its current use as managed forest land. Forpurposes of tax assessment, "[v]alue is determined by assessing the condition of the propertyaccording to its state on the taxable status date, without regard to future potentialities orpossibilities, and may not be assessed on the basis of some use contemplated in the future"(Matter of Adirondack Mtn. Reserve v Board of Assessors of Town of N. Hudson, 99AD2d 600, 601 [1984], affd 64 NY2d 727 [1984]). From our review of the record, wecannot conclude that Supreme Court based its decision on an erroneous legal theory, evidentiaryruling or by improperly weighing the evidence before it (see Matter of General Elec. Co. v Assessor of Town of Rotterdam, 54AD3d 469, 472 [2008], lv denied 11 NY3d 711 [2008]; Matter of City of Troy vTown of Pittstown, 306 AD2d 718, 720 [2003], lv denied 1 NY3d 505 [2003]), andwe would affirm the judgment.
Kavanagh, J., concurs. Ordered that the judgment is reversed, on the facts, without costs, andpetitions dismissed.
Footnote 1: The other four acres consist of atwo-acre pond and another two acres upon which is situated a Quonset hut used for occasionalliving quarters—and serviced by electric, gas and telephone—a garage, a well and aseptic system. As such, that portion of the property is undisputedly not forest land and does notqualify for an exemption under RPTL 480-a.
Footnote 2: This refers to the New YorkState Office of Real Property Services Assessor's Manual which sets forth property typeclassification and ownership codes. Code 912 includes property consisting of forest land entitledto an exemption pursuant to RPTL 480-a. Respondent Town of Esopus had previously classifiedthe property on the tax assessment role as undeveloped residential vacant land under propertycode "312."
Footnote 3: For example, property classifiedas code 910 includes nonexempt forest land.
Footnote 4: As applicable here, thisprovision imposes a penalty for discontinuance of the use of the property as managed forest land,which is based on the amount of taxes that would have been levied but for the exemption for upto 10 years. Thus, by minimizing the value of the property, the amount of the penalty iscorrespondingly reduced.