Laurence F. Whittemore, III v. Westerly Tax Assessor
2016 R.I. LEXIS 91
| R.I. | 2016Background
- Laurence and Kathleen Whittemore purchased 5 Manatuck Ave (Watch Hill, Westerly) in June 2008 for $7.1M; bank appraisals later valued it ~ $6.5–6.9M.
- Westerly conducted a townwide revaluation effective December 31, 2009 and assessed the property at $5,976,600 (later adjusted to $5,905,000); same amount carried for 2010–2011.
- The Whittemores filed appeals for 2009–2011; the board denied each and they petitioned Superior Court to reduce assessments. 2011 appeal timing dispute was reserved for post-trial briefing.
- At bench trial both sides offered expert testimony about comparable-sales problems in the high-end Watch Hill market and about a ~6% annual market decline after the 2008 crash.
- The trial justice rejected the parties’ comparable-sales evidence as unreliable, found the assessor’s use of outlier sales arbitrary, adopted a 6% decline methodology, reduced the 2009 assessment to $4,945,246 and carried that value through 2010–2011, and declined to dismiss any petition despite late-filed annual returns.
- On appeal the Town challenged (1) the trial justice’s rejection of expert valuations and use of her own market-trend methodology and (2) the refusal to dismiss the 2011 petition for failure to timely file the statutorily required account.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether taxpayers met burden to prove fair market value after court rejected plaintiffs’ expert appraisal | Whittemore: burden is satisfied by all admissible evidence; court may weigh experts and other evidence and determine value | Thompson: once plaintiffs’ expert was rejected they failed to prove value and the court should have dismissed | Held: Court may credit parts of the record and other evidence; plaintiffs met burden—assessor’s valuation rebutted and lower value supported by record |
| Whether trial justice erred by rejecting comparable-sales method and applying a 6% market-decline adjustment (i.e., court’s methodology) | Whittemore: comparable sales unreliable in this high-end, post-2008 market; court may adopt another reasonable method supported by evidence | Thompson: experts only testified to comparable-sales approach; court improperly fashioned its own valuation method | Held: Comparable-sales were ‘‘no longer probative’’ here; record supported applying 6% decline (testimony from both parties) and the court’s methodology was permissible |
| Whether town properly used 2008 bank appraisals and outlier sales to justify assessment | Whittemore: bank appraisals relied on inappropriate comparables and target numbers; assessor acted arbitrarily using outliers | Thompson: bank appraisals and assessor’s mass-appraisal model supported the assessment; outliers were appropriately handled | Held: Trial justice reasonably rejected those appraisals and concluded assessor used outlier sales arbitrarily; assessment was excessive |
| Whether 2011 petition should be dismissed for failure to timely file an annual sworn account where assessor’s appeal forms lacked statutory language | Whittemore: forms failed to include statutorily required language, which misled taxpayers and estops town from asserting the defense | Thompson: required statutory language was provided across town forms; taxpayers had actual notice so defense should not be barred | Held: Court of Appeals finds statutory-form requirement directory (not mandatory) and no legislative remedy provided; trial justice erred — 2011 petition should have been dismissed for untimely account |
Key Cases Cited
- Granoff Realty II, Ltd. P’ship v. Rossi, 823 A.2d 296 (R.I. 2003) (deference to trial justice’s factual findings in tax appeals)
- Ferland Corp. v. Bouchard, 626 A.2d 210 (R.I. 1993) (trial court may not accept expert valuation then apply an unsupported depreciation adjustment)
- Sweet v. Town of West Warwick, 844 A.2d 94 (R.I. 2004) (comparable-sales preferred; court may deviate when comparables are not probative)
- Rock Ridge Ltd. v. Assessor of Taxes, 667 A.2d 778 (R.I. 1995) (failure to file account is condition precedent; notice requirements discussed)
- GSM Industrial, Inc. v. Grinnell Fire Prot. Sys. Co., 47 A.3d 264 (R.I. 2012) (distinguishing mandatory vs. directory statutory language where statute prescribes explicit remedy)
- Harvard Pilgrim Health Care v. Gelati, 865 A.2d 1028 (R.I. 2004) (taxpayer’s burden includes proving property’s fair market value)