WHEELABRATOR BRIDGEPORT, L.P. v. CITY OF BRIDGEPORT; WHEELABRATOR BRIDGEPORT, L.P., ET AL. v. CITY OF BRIDGEPORT
SC 19288
Supreme Court of Connecticut
Argued September 17, 2015—officially released February 2, 2016
Rogers, C. J., and Palmer, Zarella, Eveleigh, Espinosa, Robinson and Vertefeuille, Js.
******************************************************
The “officially released” date that appears near the beginning of each opinion is the date the opinion will be published in the Connecticut Law Journal or the date it was released as a slip opinion. The operative date for the beginning of all time periods for filing postopinion motions and petitions for certification is the “officially released” date appearing in the opinion. In no event will any such motions be accepted before the “officially released” date.
All opinions are subject to modification and technical correction prior to official publication in the Connecticut Reports and Connecticut Appellate Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the Connecticut Law Journal and subsequently in the Connecticut Reports or Connecticut Appellate Reports, the latest print version is to be considered authoritative.
The syllabus and procedural history accompanying the opinion as it appears on the Commission on Official Legal Publications Electronic Bulletin Board Service and in the Connecticut Law Journal and bound volumes of official reports are copyrighted by the Secretary of the State, State of Connecticut, and may not be reproduced and distributed without the express written permission of the Commission on Official Legal Publications, Judicial Branch, State of Connecticut.
******************************************************
John B. Daukas, pro hac vice, with whom were Barry C. Hawkins and Michael K. Murray, for the appellants-appellees (plaintiffs).
Elliott B. Pollack, with whom was Tiffany K. Spinella, for the appellee-appellant (defendant).
Opinion
ZARELLA, J.
The record reveals the following procedural history and facts, some of which were found by the trial court and some of which are undisputed. The facility was built in the 1980s as a collaboration between the Connecticut Resources Recovery Authority (CRRA) and Wheelabrator. The facility burns municipal solid waste to generate electricity, which Wheelabrator sells to United Illuminating Company. In addition to income derived from the sale of electricity, Wheelabrator receives tip-
ping fees from municipalities in exchange for receiving municipal solid waste.
In order to take advantage of certain tax and bond opportunities that would not have been available if the facility had been owned by a private entity, CRRA took nominal title to the facility and leased it back to Wheelabrator. Pursuant to
The city conducted a citywide revaluation on October 1, 2008. As the result of this revaluation, the city listed the value of the property on the 2008 grand list as $401,624,570 and the value of Wheelabrator‘s personal property as $10,559,534. Wheelabrator appealed from the 2007 and 2008 valuations to the Board of Assessment Appeals of the City of Bridgeport (board), claiming that the valuations were excessive.5 The board denied the appeal. Wheelabrator then appealed from this denial to the trial court pursuant to
Thereafter, the city filed a motion to dismiss the appeal for lack of subject matter jurisdiction on the ground that Wheelabrator lacked standing. Specifically, the city contended, among other things, that Wheelabrator had alleged that Waste To Energy was the owner of the property that
to Wheelabrator, which subleased it to the United States Bank National Association and Mogavero, the owner trustees, who, in turn, subleased it back to Wheelabrator. In addition, Wheelabrator alleged that the United States Bank National Association and Mogavero, as owner trustees, had record title to the facility and, on behalf of Waste To Energy, which was the trust beneficiary and equitable owner of the facility, leased the facility to Wheelabrator. Wheelabrator also claimed that its standing to appeal pursuant to
On its 2010 grand list, the city again listed the value of the real property as $401,624,570, but it reassessed the value of Wheelabrator‘s personal property at $56,873,060. Wheelabrator appealed from this valuation to the board. At a hearing in this second appeal, the chairman of the board asked Wheelabrator if it had an appraisal report for the property. Wheelabrator had prepared a draft appraisal report for use in the first appeal, but, because the report was not yet subject to disclosure in that litigation under the trial court‘s discovery schedule, and because Wheelabrator believed that the report was privileged and confidential attorney work product, Wheelabrator declined to produce it. The board ultimately denied the second appeal, and Wheelabrator appealed from the board‘s denial to the trial court pursuant to
At the trial of the consolidated appeals, the city contended that the second appeal should be dismissed for lack of standing because (1) Wheelabrator failed to establish either that CRRA owned the land and that Wheelabrator was its lessee or that the United States Bank National Association and Mogavero, the owner trustees, owned the facility and that Wheelabrator was their lessee, (2) a lessee of personal property is not authorized to appeal pursuant to
Energy, was the owner of the property, and, therefore, Wheelabrator‘s complaint, “alleging that [Waste To Energy] was the owner and lessor of the subject property, failed to comply with §§ 12-117a and 12-119 [which allow] only an owner of property or a lessee of the owner who has agreed to pay the property tax and whose lease or notice of lease has been recorded [in] the city‘s land records to appeal from an assessor‘s valuation.”8 The court further concluded that
Turning to Wheelabrator‘s claim in the second appeal that the city had overvalued the property on the 2010 grand list, the trial court concluded that the proper appraisal method was the reproduction cost approach. The court further concluded that, under that approach, the value of the property for purposes of the 2010 grand list and subsequent years was $314,017,430. In addition, the court found that Wheelabrator had presented no evidence that the city had improperly valued Wheelabrator‘s personal property at $56,873,060 on the 2010 grand list. The court also noted that “the value of the facility under the cost approach does not include personal property since the cost valuation is not based [on] the valuation of a going concern.” Thus, the trial court concluded that the city could impose a separate tax on the personal property. This appeal and cross appeal followed. We address each of the parties’ claims in turn. Additional facts and procedural history will be set forth as necessary.
I
We first address Wheelabrator‘s claim that the trial court improperly granted the city‘s motion to dismiss the first appeal. We agree with Wheelabrator.
The following facts and procedural history are relevant to our resolution of this issue. As we indicated, the trial court
203 of the General Statutes, including the requirements of
We begin our analysis with the standard of review. “If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause. . . . A determination regarding a trial court‘s subject matter jurisdiction is a question of law. When . . . the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Burton v. Dominion Nuclear Connecticut, Inc., 300 Conn. 542, 550, 23 A.3d 1176 (2011).
Because it is dispositive, we first address Wheelabrator‘s claim that it had standing to appeal pursuant to
We conclude that this language clearly and unambiguously confers standing on Wheelabrator to appeal from a property tax assessment. First, the city does not dispute that Wheelabrator is a “lessee” as that term is used in
a “lessee” has a right to appeal “in the same manner as a purchaser of formerly tax-exempt property under section 12-81a, with the same effect as if a conveyance to a nonexempt purchaser had been placed on the land records on the date the property first ceases to be exempt pursuant to this section.”
We also reject the city‘s claim that a lessee of personal property does not have standing to appeal from the tax assessment of that property pursuant to
II
We next address Wheelabrator‘s claim that the trial court improperly determined the value of the property in the second appeal. Specifically, Wheelabrator contends that the trial court improperly rejected the discounted cash flow approach to valuing the property as a matter of law. We agree with Wheelabrator.
The record reveals the following additional facts and procedural history that are
projected income streams from sales of electricity and tipping fees for the useful life of the facility. Hazen then converted the value of that future income stream to present value to arrive at the value of the facility, a methodology that is known as the discounted cash flow approach. Hazen concluded that, under this approach, the fair market value of the property as of October 1, 2008, was $199,300,000.
Although Hazen and Joseph Kettell, another expert who testified for Wheelabrator, believed that the discounted cash flow approach was the best approach for appraising the property, they also made calculations pursuant to the replacement cost approach. Hazen testified that they applied this approach “as a check against other approaches to make sure that you‘re not way off in left field someplace.” Hazen and Kettell opined that the replacement cost of the facility as of the revaluation date of October 1, 2008, was $211,300,000. Reconciling this value with the $199,300,000 value based on the discounted cash flow approach, Wheelabrator‘s experts ultimately concluded that, as of October 1, 2008, the fair market value of the property was $201,700,000. Excluding tax exempt pollution control equipment valued at $10,857,310, the taxable value was $190,842,690.
The city‘s expert witness, Mark Pomykacz, also testified that he had relied primarily on the income approach to appraising the property and that he had relied on the cost approach only “[i]n a secondary fashion.” Pomykacz testified on cross-examination that he had relied primarily on the income approach because that “is the method that the market participants put the most weight on.” Similarly, in his written opinion, he stated that “in a deregulated market, the income approach should be utilized and given the greatest weight among the three approaches to value for electric generation facilities,” and that “the income approach provides the strongest indication of market value for the [f]acility, as of the valuation dates.” He explained that there are two main income approaches, namely, direct capitalization14 and the discounted cash flow analysis, and that he had used both of them to determine the value of the property. Pomykacz concluded that, as of October 1, 2008, the value of the property under the direct capitalization approach was $398,456,411 and its value under the discounted cash flow approach was $376,184,993, rounded down to $376,180,000.
Pomykacz also testified, however, that the cost approach to property appraisal is “especially informative” for special purpose
fully and reliably” but that “these conclusions were given less weight than the income approach conclusions.” Pomykacz concluded that, as of October 1, 2008, the value of the property under the reproduction cost approach was $362,027,000 and the value under the replacement cost approach was $402,753,000. After reconciling the various approaches, giving special weight to the discounted cash flow approach and subtracting the value of exempt pollution control equipment and nontaxable and tax exempt property, Pomykacz ultimately concluded that the taxable value of the property as of October 1, 2008, was $357,500,000.
The trial court ultimately concluded that “the reproduction cost approach is the only credible approach to use in this case in order to arrive at a [fair market value] of the subject property as of October 1, 2008.” Although the court acknowledged that both Wheelabrator‘s experts and Pomykacz had testified that the discounted cash flow approach was an appropriate method to value the property, the court concluded that this approach “lack[ed] credibility” because, among other reasons, (1) “if the [discounted cash flow]/going concern income approach16 process were credible, then two experienced and knowledgeable appraisers who are given the same basic facts and who use the same income approach would not be over $200,000,000 apart in their valuation of the subject property“;17 (footnote added); (2) “[t]he appraisers employed the going concern approach rather than directly valuing the real and personal property [that] are the subject of the [two] appeals,”18 and (3)
After rejecting the other valuation approaches for various reasons,21 the trial court concluded that “[t]he reproduction cost approach has credibility for purposes of valuing the subject.” The trial court then used Pomykacz’ historical cost figure of $241,949,000, which excluded developer‘s profit of 15 percent that Pomykacz had included in his calculations, multiplied this figure by Pomykacz’ “trend factor” of 2.08 percent, and applied Pomykacz’ 38 percent depreciation factor to arrive at a value of $312,017,430. Because the reproduc-tion cost approach did not include the value of the
land, the court then added the stipulated land value of $2,000,000, for a total taxable value of $314,017,430 as of October 1, 2008.22 Accordingly, the trial court concluded that, to the extent that the second appeal challenged the city‘s valuation of the real property on the 2010 grand list as $401,624,570, the appeal was sustained. Because Wheelabrator had presented no credible evidence that the city
After Wheelabrator filed the present appeal from the judgments of the trial court, this court ordered the trial court to articulate whether it had rejected the discounted cash flow approach as a method for valuing the subject property as a matter of law, or because it found the testimony of the parties’ experts not credible with respect to that approach. The trial court stated that it “did not reject the [discounted cash flow] approach as a method for valuing the subject property as a matter of law” but had “rejected the testimony of the parties’ experts because it found this testimony not to be credible with respect to this approach.”
Wheelabrator claims on appeal that, notwithstanding the trial court‘s contention to the contrary in its articulation, the court improperly rejected the discounted cash flow approach to valuing the property as a matter of law. We agree.
Resolving the issue of whether the trial court improperly rejected the discounted cash flow approach to valuing the property as a matter of law requires us to answer two questions. First, we must determine whether the trial court, in fact, rejected the approach as a matter of law. See, e.g., Redding Life Care, LLC v. Redding, 308 Conn. 87, 102, 61 A.3d 461 (2013) (“the starting point in any tax appeal taken from the Superior Court . . . is a determination as to whether the trial court reached its decision through [1] the exercise of its discretion in crediting evidence and expert witness testimony, or [2] as a matter of law“). Second, if we conclude that the trial court reached its determination as a matter of law, we must decide whether that determination was proper. The first question requires us to interpret the judgment of the trial court, which, itself, is a question of law. See Ottiano v. Shetucket Plumbing Supply Co., 61 Conn. App. 648, 651–52, 767 A.2d 128 (2001). “As an issue of law, [t]he interpretation of a judgment may involve the circumstances surrounding the making of the judgment. . . . The determinative factor is the intention of the court as gathered from all parts of the judgment . . . . Effect must be given to that which is clearly implied as well as to that which is expressed. . . . The construction of a judgment is a question of law for the court. . . . As a general rule, judgments
are to be construed in the same fashion as other written instruments. . . . The determinative factor is the intention of the court as gathered from all parts of the judgment. . . . The judgment should admit of a consistent construction as a whole. . . . To determine the meaning of a judgment, we must ascertain the intent of the court from the language used and, if necessary, the surrounding circumstances.” (Citations omitted; internal quotation marks omitted.) Id., 652.
We conclude for the following reasons that the trial court rejected the discounted cash flow approach23 to the valuation of
flow approach to valuing property for property tax assessment purposes. See footnote 18 of this opinion. The court‘s reference at that time to the pending appeal from its decision in Redding Life Care, LLC, supports the conclusion that the court was not concerned with specific flaws in the appraisers’ calculations but with the method itself.25
In Redding Life Care, LLC, we concluded that “there may be cases in which it is proper to value real estate by first valuing the going concern associated with the property, based on an income capitalization approach, and other cases in which it is not.” Id., 96 n.9. Although we did not directly address the issues of whether the specific discounted cash flow approach to valuing a going concern could be employed for property tax assessment purposes in an appropriate case or whether the general income approach may be employed to appraise property that does not have a rental market, we can perceive no reason why those approaches should be categorically barred. Indeed, in the present case, expert witnesses for both sides, whom the trial court characterized as “experienced and knowledgeable,” testified that the income approach, and, more specifically, the discounted cash flow approach, was the best method for valuing the property, because that
is the method that market participants would use to determine the price that they would pay for the property. We conclude, therefore, that the trial court improperly rejected the discounted cash flow approach to valuing the property for tax assessment purposes as a matter of law.
III
We next address Wheelabrator‘s claim that the trial court‘s valuation of the real and personal property on appeal effectively permitted the city to impose a double tax on the value of the personal property.28 Specifically,
Wheelabrator contends that the trial court incorrectly determined that Pomykacz’ appraisal pursuant to the reproduction cost approach—on which the trial court had based its valuation—did not include the value of the personal property and, therefore, that the city could impose a separate tax on the assessed value of the personal property. We conclude that, in light of our remand for a new trial, there is no need for this court to decide whether the trial court‘s valuation based on Pomykacz’ appraisal included the personal property, but the trial court on
The following facts and procedural history are relevant to our resolution of this claim. At trial, Wheelabrator contended that, because the personal property and the real property were subject to the same tax rate, it could combine the two types of property into a single asset for appraisal purposes. It further contended that, if the court disagreed with this contention, the court could subtract its experts’ valuation of the personal property at $54,546,583 from the total combined value of $201,700,000 to reach a real property value of $147,153,417.
Pomykacz testified that he believed that the total value of Wheelabrator‘s taxable property as of October 1, 2008, was $357,500,000 and that he was not asked to value the real and personal property separately. In addition, he stated in his written report that “[t]he overall value . . . considering the three general appraisal approaches [i.e., the cost approach, income approach and comparable sales approach] includes real property, personal property, intangibles, and taxable and nontaxable property.” Although it appears that Pomykacz deducted the value of working capital and business intangibles from the overall value to determine the total taxable value of the property in his written report, it does not appear that he deducted the value of personal property.
The trial court concluded that Pomykacz’ valuation pursuant to the reproduction cost approach did not include the value of personal property because “the cost valuation is not based [on] the valuation of a going concern.” The court further concluded that Wheelabrator had not presented any evidence that would undermine the city‘s valuation of the personal property at $56,873,060 on the 2010 grand list. Accordingly, the court concluded that the city could impose a separate tax on the personal property based on that value and rejected Wheelabrator‘s appeal from that valuation.
Whether the city‘s valuation of the real property on the 2010 grand list included the value of the personal property is a question of fact subject to review for clear error. See, e.g., Newbury Commons Ltd. Partnership
v. Stamford, 226 Conn. 92, 103, 626 A.2d 1292 (1993) (“[w]hether a property has been overvalued for tax assessment purposes is a question of fact for the trier“). “A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” (Internal quotation marks omitted.) State v. Maurice M., 303 Conn. 18, 51, 31 A.3d 1063 (2011).
We cannot conclude that the trial court‘s finding in the present case that the valuation of the personal property on the 2010 grand list at $56,873,060 was not excessive was clearly erroneous. Indeed, Wheelabrator does not seriously contend that it was. The fact that the city properly valued the personal property on the 2010 grand list does not mean, however, that Pomykacz’ appraisal of the property pursuant to the reproduction cost approach did not include the value of that personal property, and the city has pointed to no evidence that would support the trial court‘s finding to that effect. Nevertheless, because we have concluded that this case must be remanded to the trial court for a new trial on the value of the property, there is no need for us to decide whether the trial court‘s finding that Pomykacz’ appraisal pursuant to the reproduction
IV
Because it is likely to arise on remand, we next address Wheelabrator‘s claim that the trial court improperly excluded evidence of the city‘s wrongful conduct and discounted evidence of wrongful conduct that Wheelabrator did present. Wheelabrator contends that the trial court should have considered evidence that the city wrongfully (1) fabricated its valuation of the property, (2) assessed taxes on tax exempt pollution control equipment, (3) imposed an interest penalty, (4) imposed a double tax on personal property, and (5) punished Wheelabrator for refusing to produce its experts’ appraisal report at the hearing before the board in the administrative appeal from the assessment on the 2010 grand list. We conclude that, on remand, the trial court may properly consider evidence that the city engaged in wrongdoing for the purpose of determining whether Wheelabrator is entitled to interest on overpayments to the city.
The following additional facts are relevant to our resolution of this issue. In support of Wheelabrator‘s claim that the city fabricated its valuation of the property, Wheelabrator‘s plant manager, Vincent P. Langone, Jr., testified at trial that, after the legislature enacted
Wheelabrator also attempted to present evidence that, when the city revalued the property in 2008, the city‘s tax assessor, William O‘Brien, was aware that CRRA had obtained an appraisal that put the value of the property at $225 million. The trial court sustained the city‘s objection to the admission of the appraisal on relevance
In addition, Wheelabrator attempted to present evidence regarding the city‘s normal procedure for valuing commercial property for tax assessment purposes. That evidence would have shown that the city had hired an appraiser, Vision Government Solutions, Inc. (Vision), to value the city‘s taxable properties for purposes of the 2008 revaluation. The city provided Vision with field cards for each property. At that point, a Vision employee would go into the field, inspect the property and make any necessary changes on the card. Normally, the various values shown on the card will add up to the total appraised value. The city objected to this evidence on the ground that it was irrelevant with respect to how the revaluation was conducted and contended that the sole issue was whether Wheelabrator could establish that the fair market value of the property was less than the city‘s valuation. Wheelabrator contended that it was entitled to put on evidence that the city had wrongfully failed to assess the property based on its “true and present value.” The trial court sustained the city‘s objections, stating that “[t]he assessor is really not on trial. This whole issue that the court sees is the question of what‘s the fair market value of the subject property on the date of valuation.” Although the trial court allowed Wheelabrator to submit evidence that the numbers on the field card for the subject property for the 2008 revaluation did not add up to the total appraised parcel
value of $401,624,570,30 it sustained the city‘s objection to the admission of evidence showing that the city had told Vision that it would handle the valuation of the property and that the reason the figures on the field card for the property did not add up was because someone had overridden the computer system that generated the various amounts shown on the field cards. Wheelabrator contends that all of this evidence was relevant to show that the city fabricated the $401,624,570 valuation so that it could charge Wheelabrator $13 million per year in taxes and thereby cover its annual budget deficit.
In support of its claim that the city improperly had denied Wheelabrator‘s claim for an exemption for pollution control equipment valued at $10,559,534, Wheelabrator presented evidence that, in October, 2008, it filed a form seeking a tax exemption for certain pollution control equipment. The city denied the exemption and taxed Wheelabrator for the equipment for two years. Although the city ultimately acknowledged that the pollution control equipment was not taxable, it refused to refund the taxes that it already had collected.
In support of its claim that the city wrongfully had subjected the facility‘s personal property to double taxation on the 2010 grand list, Wheelabrator presented evidence that it had sent a letter to the city on October 30, 2009, stating that the value of the personal property should be deducted from the $401,624,570 property
In support of its claim that the city wrongfully had imposed an interest penalty, Wheelabrator presented evidence that the city sent the first property tax bill to CRRA on January 1, 2009. After Wheelabrator requested a copy of the bill, the city sent it a copy on February 4, 2009. Although Wheelabrator paid the bill within thirty days, as permitted under
In support of its claim that the city wrongfully had punished Wheelabrator for declining to produce its appraiser‘s report at the hearing before the board in Wheelabrator‘s administrative appeal from the assessment based on the 2010 grand list,32 Wheelabrator presented evidence that it declined to produce the report at that hearing because it believed that it was privileged work product. On April 26, 2011, the city sent a letter to Wheelabrator stating that, “[i]n accordance with [General Statutes §] 12-111 . . . and your failure to cooperate with the [b]oard by not giving us a copy of the appraisal you had done, you are hereby notified
that [the] new assessment on the 2010 [g]rand [l]ist has been changed [from $281,137,210] to $282,229,170.”33 Approximately two weeks later, the city sent Wheelabrator a second, similar letter directing it to disregard the first letter and indicating that the assessment was now $282,453,910. On July 5, 2011, Wheelabrator received a property tax bill showing that the assessed value of the property was now $285,278,449 and that the total tax due for 2011 was $11,308,437.72. In December, 2011, Wheelabrator received another bill showing that the assessed value of the property had been reduced to the original amount of $281,137,210, but the total tax due for 2011 was still $11,308,437.72.
We begin our analysis of Wheelabrator‘s claim with the standard of review. Whether the wrongfulness of the city‘s conduct is a proper consideration in a property tax appeal pursuant to
Pursuant to
In addition to relying on these statutes, Wheelabrator contends that, as a general rule, the trial court should award interest to a plaintiff when the defendant has wrongfully withheld money. Cf. Loomis Institute v. Windsor, 234 Conn. 169, 181, 661 A.2d 1001 (1995)
(“[w]e have construed [
We agree with Wheelabrator that the issue of the city‘s wrongdoing is a proper consideration in a property tax appeal pursuant to
In Sears, Roebuck & Co. v. Board of Tax Review, 241 Conn. 749, 766, 699 A.2d 81 (1997), this court held that, in a property tax appeal pursuant to
doing. We emphasize, however, that we express no opinion as to the admissibility of the specific evidence on this issue that the trial court excluded at the first trial, which may be inadmissible on relevancy or other grounds, or as to the relevance of the specific admitted evidence that, according to Wheelabrator, supported a finding of wrongdoing. We conclude only that evidence of wrongdoing is not irrelevant as a matter of law as to the issue of an award of interest.
V
We next address the city‘s claim on cross appeal that the trial court improperly denied its motion to dismiss the second appeal because Wheelabrator declined to provide the board with its draft appraisal at the April 4, 2011 hearing before the board on Wheelabrator‘s administrative appeal. The city notes that, pursuant to
The following facts and procedural history are relevant to our resolution of this claim. The board conducted a hearing on Wheelabrator‘s appeal from the city‘s valuation of the property on the 2010 grand list on April 4, 2011. At the beginning of the hearing, the chairman of the board, Richard DeParle, asked Wheelabrator‘s attorney to “furnish [it] . . . with all documentation which you believe supports your position that the real and personal property [at issue] . . . should be valued at the market value you state in your appeal. You can also furnish testimony to supplement this documentation.” Wheelabrator‘s attorney indicated that, among other documentation, he had a sworn affidavit from Robert H. Pedersen, Wheelabrator‘s regional comptroller, regarding the total value of the property. He also indicated that Pedersen, who was present, would be willing to testify as to his opinion of the value of the property and to answer the board‘s questions. DeParle then asked whether Wheelabrator‘s attorney ever had had the property appraised. When counsel indicated that he had obtained a draft appraisal of the property for use in the first appeal, DeParle asked whether he was prepared to provide the board a copy of the appraisal. Counsel responded that the appraisal report was subject to a discovery order in the pending first appeal, and that Wheelabrator did not want to produce it because it contained confidential information and it had not yet entered into a confidentiality agreement with the city. DeParle then stated that, “[w]ithout an outside appraisal done for us, there‘s not a lot more we can do with it,” and concluded the hearing.
We begin with the standard of review. As we previously indicated, “[i]f a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause. . . . A determination regarding a trial court‘s subject matter jurisdiction is a question of law. When . . . the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Burton v. Dominion Nuclear Connecticut, Inc., supra, 300 Conn. 550.
This court previously has rejected a claim that was identical to the city‘s claim in all relevant respects. In Morris v. New Haven, 77 Conn. 108, 58 A. 748 (1904), the plaintiff brought an action against the defendant, claiming that its assessment of her property was illegal. The defendant demurred to the plaintiff‘s claim on the ground that, after the plaintiff appealed to the “board of relief,” she had failed to appear before that board as required by the predecessor to
VI
Because it is likely to arise on remand, we next address the city‘s claim on cross appeal that the trial court improperly admitted the appraisal testimony of Wheelabrator‘s expert witnesses on the ground that they were not licensed real
The following additional facts and procedural history are relevant to our resolution of this issue. Before trial, the city filed two motions in limine to preclude the admission of Kettell‘s and Hazen‘s testimony and any appraisal report prepared by them. The city contended that Kettell and Hazen, by preparing an appraisal report for the property, had violated General Statutes (Rev. to 2011)
We begin our analysis with the standard of review. “The trial court has wide discretion in ruling on the qualification of expert witnesses and the admissibility of their opinions. . . . The court‘s decision is not to be disturbed unless [its] discretion has been abused or the error is clear and involves a misconception of the law. . . . Generally, expert testimony is admissible if (1) the witness has a special skill or knowledge directly applicable to a matter in issue, (2) that skill or knowledge is not common to the average person, and (3) the testimony would be helpful to the court or jury in considering the issues.” (Citations omitted; internal quotation marks omitted.) State v. Kemp, 199 Conn. 473, 476, 507 A.2d 1387 (1986), overruled in part on other grounds by State v. Guilbert, 306 Conn. 218, 49 A.3d 705 (2012).
We agree that a person who otherwise would be qualified as an expert witness to testify regarding the value of real property is not disqualified merely because the person is not a licensed real estate appraiser in this state. As we have explained, whether a person is qualified to testify as an expert witness in a judicial proceeding turns on whether the person has special skills and knowledge that will shed light on an issue that is beyond the ken of the ordinary juror or trial judge. See State v. Kemp, supra, 199 Conn. 476. The trial court is presumed to have the skills and experience to make this determination, as with any other expert witness, with the assistance of the parties in an adversarial process. See Blanchard v. Bridgeport, 190 Conn. 798, 808, 463 A.2d 553 (1983) (“[t]he qualifications of an expert presents a preliminary question for the trial judge“). Moreover, once the trial court has made that determination, the expert witness will be required to testify under oath to ensure that he or she testifies truthfully.
In contrast to the evidentiary and procedural rules governing expert testimony, the purpose of the statutory scheme governing the licensure of real estate appraisers is to protect members of the general public—who do not have the skills and experience of a trial judge to assess a person‘s competence to determine the value of real estate, and who do not have access to the tools of discovery and cross-examination under oath to assist them in making that assessment or in assessing the person‘s honesty—by requiring persons who wish to engage in the business of real estate appraisal first to establish their competence and honesty. See General Statutes (Rev. to 2011)
The city claims, however, that a person who does not have a license to appraise real estate cannot testify in court as an expert witness as to the valuation of real property because such conduct would subject the person to fines and imprisonment pursuant to
VII
Finally, because it may arise on remand, we address the city‘s claim that the trial court abused its discretion when it excluded developer‘s profit from its reproduction cost calculations in determining the value of the property. We disagree.
The following facts and procedural history are relevant to our resolution of this claim. In his appraisal report, Pomykacz explained that he was “provided with a copy of [an] [a]mendment . . . to the Solid Waste Disposal Agreement dated May 1, 1988. On page 7 of the [a]mendment, it can be seen that the aggregate historical cost basis of the [f]acility is $241,949,000. We then added 15 percent of the historical cost basis for developer‘s profit. Developer‘s profit is the profit that a developer expects to earn from the development of the project. Even a developer/owner who intends to continue to own and manage the property after construction has an expectation of some profit on the development of the property; otherwise [the] owner would simply purchase an existing property instead of going through the effort and risk of building a new one.”
The trial court concluded that “Pomykacz’ inclusion of a developer‘s profit of 15 [percent] of the historical cost lacks credibility. It is logical to assume that when the original facility was constructed, all costs, including a developer‘s profit, would have been included in the historical costs.” Accordingly, the trial court excluded the 15 percent developer‘s profit from its calculation of the value of the property using Pomykacz’ reproduction cost approach.
The trial court‘s valuation of a property in a property tax appeal is subject to review for abuse of discretion. See, e.g., Davis v. Westport, 61 Conn. App. 834, 842, 767 A.2d 1237 (2001) (once trial court has found that taxpayer is aggrieved, court has “broad discretionary power to grant appropriate relief“). Although the city has cited authority for the proposition that developer‘s profit is a proper element of cost
The judgment in the first appeal filed in 2009 is reversed and the case is remanded with direction to deny the city‘s motion to dismiss and for further proceedings in connection with that appeal; the portion of the judgment in the second appeal filed in 2011 sustaining that appeal on the ground that Wheelabrator was subject to an unlawful tax is affirmed; the portion of the judgment in the second appeal denying the appeal from the valuation of the personal property is affirmed; the portion of the judgment in the second appeal assigning a new valuation to the property is reversed, and the case is remanded for a new trial in the second appeal with respect to that valuation.
Notes
Hereinafter, all references to
“(b) No person who is not certified, licensed, limited licensed or provisionally licensed, as appropriate, by the commission as a real estate appraiser shall represent himself or herself as being so certified, licensed, limited licensed or provisionally licensed or use in connection with such person‘s name or place of business the term ‘real estate appraiser‘, ‘real estate appraisal‘, ‘certified appraiser‘, ‘certified appraisal‘, ‘residential appraiser‘, ‘residential appraisal‘, ‘limited licensed appraiser‘, ‘provisional appraiser’ or ‘provisional appraisal’ or any words, letters, abbreviations or insignia indicating or implying that such person is a certified, licensed, limited licensed or provisionally licensed, as appropriate, real estate appraiser in this state. Any person who violates the provisions of this subsection shall be fined not more than one thousand dollars or imprisoned not more than six months, or both.”
Hereinafter, all references to
General Statutes (Rev. to 2007)