2021 ME 23
Me.2021Background
- Expera Old Town purchased a Maine pulp mill in December 2014 out of bankruptcy for $10.5 million; it intended to convert the mill to softwood pulp but later shut it down and sold it for scrap in January 2016 for $2.5 million.
- The City’s assessor initially valued the mill at about $51 million for 2014; MR Valuation later reported fair market values of $19,560,000 (2014) and $30,860,000 (2015); the City adopted adjusted assessments of $16,963,112 (2014) and $25,354,400 (2015).
- Expera Old Town sought abatements and presented a Duff & Phelps appraisal valuing the mill at $10.5 million (2014) and $10 million (2015); the Board in 2017 largely credited the City’s valuations and found Expera had not shown the assessments were manifestly wrong.
- The Superior Court vacated the Board’s 2017 decision, concluding the Board failed to give "real weight" to the 2014 bankruptcy sale and the 2016 liquidation sale (citing Terfloth), and remanded for reconsideration.
- On remand the Board (in 2019) treated the 2014 sale as arm’s-length and ultimately set values at $10.5 million for both tax years; the City appealed, and the Maine Supreme Judicial Court reviewed the Board’s original 2017 decision as the operative fact-finding.
- The Court held the record did not compel the conclusion that the assessments were manifestly wrong, vacated the Superior Court’s judgment, and remanded with instructions to affirm the Board’s 2017 decision.
Issues
| Issue | Expera's Argument | City's Argument | Held |
|---|---|---|---|
| Whether the Board erred by failing to give the 2014 bankruptcy sale and 2016 liquidation sale "real weight" | Board failed to find or give effect to arm’s-length sales; Terfloth requires giving recent sales strong weight | Sales were not reliable indicators of fair market value because of bankruptcy/forced sale conditions, truncated marketing, limited due diligence, inclusion of non-asset items, and market change | Court: Board’s 2017 findings adequately explained why the sales did not reflect fair market value; no error to reject them as controlling |
| Whether Expera met its initial burden to show the assessments were "manifestly wrong" | The 2014 and 2016 sale prices demonstrate substantial overvaluation and injustice | Record does not compel that conclusion; Board permissibly resolved factual disputes in City’s favor | Court: Expera failed to meet its burden; record does not compel a contrary conclusion |
| Whether the Board’s findings were inadequate for judicial review (Terfloth claim about explicit arm’s-length findings) | Board did not explicitly find whether sales were arm’s-length and thus misapplied Terfloth | Board made adequate explicit and implicit findings about sale circumstances and market change; implicit findings suffice where record supports them | Court: Implicit and explicit findings in 2017 decision were adequate; Terfloth distinguished on facts |
| Which decision is the operative record for appellate review and standard of review | (argues Board erred on remand focus) | Operative decision is the Board’s original 2017 decision; appellate review looks to that decision for abuse of discretion, error of law, or lack of substantial evidence | Court: Reviews the 2017 Board decision; vacated Superior Court and instructed affirmance of Board’s 2017 findings |
Key Cases Cited
- Terfloth v. Town of Scarborough, 90 A.3d 1131 (Me. 2014) (recent sale may control value if arm’s-length and under normal market conditions)
- Shawmut Inn v. Town of Kennebunkport, 428 A.2d 384 (Me. 1981) (sale price may be unreliable if sale not made in open market or between willing buyer and seller)
- Town of Southwest Harbor v. Harwood, 763 A.2d 115 (Me. 2000) (describes Board’s two-part role and standard for abatement proceedings)
- McCullough v. Town of Sanford, 687 A.2d 629 (Me. 1996) (Board may resolve competing valuation evidence and accept some parts while rejecting others)
- Arnold v. Maine State Highway Comm’n, 283 A.2d 655 (Me. 1971) (sales under economic pressure may not reflect fair market value)
- Weekley v. Town of Scarborough, 676 A.2d 932 (Me. 1996) (discusses taxpayer’s burden to show manifest error in assessment)
- Great N. Nekoosa Corp. v. State Tax Assessor, 522 A.2d 1316 (Me. 1987) (addresses standard for showing assessed valuation is manifestly wrong)