Reybold Venture Group V-A, LLC v. New Castle County Office of Assessment ( 2018 )

IN THE SUPERIOR COURT FOR THE STATE OF DELAWARE
REYBOLD VENTURE GROUP V-A, LLC
Appellant,
V.
C.A. NO. N17A-09-005 DCS
NEW CASTLE COUNTY OFFICE OF
ASSESSMENT & NEW CASTLE
COUNTY BOARD OF ASSESSMENT
REVIEW
Appellees.
Submitted: March 1, 2018
Decided: June 27, 2018
Upon Appealfrom the New Castle Coum‘y Board of ASSesSment _
REMANDED.
OPINION
Michael J. Issacs, Esquire, Attorney for Appellant.
Wali W. Rushdan, II, Esquire, Attorney for Appellant.
Adam Singer, Esquire, Attorney for Appellees.
STREETT, J.
Introduction
On appeal from the New Castle County Board of Assessment Review (the
“Board”), Reybold Venture Group V-A, LLC (“Appellant” or “Reybold”) asserts
that its lack of access to the appraisal data of the New Castle County Offlce of
Assessment (“County”) prior to a Board hearing and the Board’s decision not to
grant Reybold’s mid-hearing request for a continuance violated Reybold’s right to
due process.
The County and the Board contend that Appellant had no right to pre-hearing
discovery and had sufficient time to review the County’s appraisal data during a
brief hearing recess.
The Court finds that, under the totality of the circumstances, Appellant was
denied due process.
Factual and Procedural Historv
Between 2011-2017, Appellant constructed St. Andrews Addition, a 118
rental townhouse community in the Bear area of New Castle County.
In 2013, the County sent a notice of increased tax assessments Appellant
thought that the assessment was too high and compared the tax assessments of St.
Andrews Addition to St. Andrews, a nearby subdivision of 327 rental townhomes,
which was also constructed by Appellant between 2001-2005. Appellant believed
that there was an unjustified difference between the tax assessments of St. Andrews
Addition and St. Andrews (as much as a 50% increase in assessment) which
appeared to be the product of a significant overvaluation.
In 2014, Appellant appealed the tax assessments of 35 of the St. Andrews
Addition townhomes.l Appellant and the County negotiated the matter for more
than three years (2014-2017).2 During that time, Appellant disclosed its data to the
County and asked for the County’s data. The County refused to provide the County’s
appraisal data. An agreement was eventually reached concerning the land
assessments, however, there was no agreement reached concerning the assessment
of the structures. The structure assessment disparity was negotiated until
approximately 30 days prior to the Board hearing.
The Board hearing (“Hearing”) was held on July 20, 2017. The Hearing
started later than the appointed time because the Board considered and adopted an
amendment to its procedural rules immediately prior to the Hearing.3 The
l Record (“R.”) at 1047.
2 July 20, 2017 Hearing Transcript (“Tr.”) at 15 (“More importantly, we’ve had a dialogue over
almost four years of this issue, and there has been correspondence to this . . .”).
3 Tr. at 2 (“Good morning again. Continuation of the Board of Assessment Review today. At 9:00
o’clock we had a short business meeting to review some rules changes”).
amendment created an appellant’s right to obtain pre-hearing appraisal data from the
County upon request.4
At the Hearing, Jerome S. Heisler, Jr. testified for Reybold. Georgianna
Trietley testified for the County. Mr. Heisler, the managing member of Reybold,
compared the tax assessments of the St. Andrews Addition to the tax assessments of
St. Andrews.5 Mr. Heisler acknowledged that the tax assessments of St. Andrews
Addition should be higher than the tax assessments for St. Andrews (because the
newer townhomes are larger) but opined that the 50% difference in assessment
4 The new Board rule, provided, in pertinent part:
Upon receipt of a notice of hearing, an appellant may request that
Assessment disclose each exhibit that it intends to present in its
case-in-chief in support of the assessment. Upon receipt of the
appellant’s request for disclosure, [the County] shall make one copy
of each exhibit available to the appellant at the New Castle County
Government Center, during regular business hours, no fewer than 7
(seven) business days prior to the hearing.
Board Rules of Procedure Art. VIII, § 8.
The Court will not directly address the new rule in this decision.
5 Mr. Heisler stated:
And my document is basically taking the existing assessed values,
which are the most accurate way to determine whether you have
proper assessments for similar properties, in my opinion, and then
using that statistical database, 329 units.
You can see from this line, this is the St. Andrews pool of data. This
is [St. Andrews Addition] up here. There’s a step function
difference It shifts up. So that’s how we knew there was something
going on. And this is just for assessed structures.
Tr. at 25-26.
between the two subdivisions was too high.6 Mr. Heisler also noted that “[w]e know
the person who did the original assessments was let go from the County”7 and “[a]s
part of [] dialogue [with the County] l learned that, one, there was a new assessor
out there and she was later let go from the County because of inaccuracies in her
assessment.”8
Georgiana Trietley, a licensed assessor for the County 9, was the County’s
witness. Ms. Trietley testified that the County’s appraisal data was comprised of
“county records, public records, recorder of deeds, [and] our own data for the
properties that were comparable.”lo She stated that although St. Andrews Addition
was rental property, it should be assessed by using 1983 sales comparables [instead
of rentals] because the base year for tax assessments is July l, 1983. Ms. Trietley
created a table with the data based on the comparable properties and that table was
6 Tr. at 29 (“We actually, what happened was the square footage of the units in [St. Andrews
Addition] are larger, so we should have a larger valuation [than St. Andrews]. I don’t disagree with
you . . . [i]t shouldn’t be a step 50 percent higher, and that’s what we were getting”).
7 Tr. at 27.
8 Tr. at 15.
9 Tr. at 61.
10 Tr. at 62.
put into evidence as Exhibit 2. Two other exhibits were also admitted into
evidence.ll
Ms. Trietley explained her methodology and that the appraisal data presented
at the Hearing had been compiled shortly before the Hearing-- “within the past 30
days” (of the Hearing).12 She further testified that she selected (with difficulty)13
five comparable 1983 sales of residential homes in the Bear, Delaware area,14
adjusted the square footage of the selected comparable properties to the square
footage of the St. Andrews Addition, and then applied the comparable property price
per square foot to the square footage of the disputed St. Andrews Addition
structures 15
ll Exhibit l was a compilation of the 35 property dockets on appeal. Tr. at 2.; Exhibit lA was a
comparable sales sheet with the cost per square foot of each unit based on the building itself, not
including land. Tr. at 61; Ms. Trietley’s exhibits included the pictures of the comparable sales
properties and the comparison between the comparable sales properties and the St. Andrews
Addition structures R. at 1052-60.
12 Tr. at 82.
13 Tr. at 64 (“[I]t was very difficult to find comparable sales of that type of unit”).
14 Tr. at 85 (“The comparables that I selected were all from the neighborhood that [St. Andrews
Addition] is in. So as opposed to going to Pike Creek to find that three-story, lower-car garage,
and having that, you know, be so far away, I select -- I elected to stay within the Bear area.”).
15 See R. at 1052-60; Ms. Trietley explained:
It’s the cost per square foot of that adjusted value. Okay? The first
line is the net adjustment, the second line is the adjusted sale price,
and then in the gray areas it’s the percentage of adjustment and the
cost per square foot. So I used that, you know, that range to apply to
the adjustments I was making to the cost per - to the square foot of
the building because the land had already been taken care of.
5
Ms. Trietley acknowledged that the square footage upon which the County
based its original assessments [and on which Appellant appealed to the Board] was
incorrect. She stated that “[someone] [] went out and re-measured all of the parcels,
you know, all of the St. Andrews Addition buildings, so that you know, some of
them did have bad measurements, so they’ve been corrected, and my new assessed
value sheet have the corrected square footage that we currently have.”16 She also
conceded that the tenant appeal of the recently selected comparables was different
from the tenant appeal of the townhomes at St. Andrews Addition.17
The Board then took a brief recess to make copies of the County’s exhibits.18
Appellant remarked that it would like to review the exhibits during the recess
Appellant was allowed to review the exhibits After the recess, the County continued
its direct examination of Ms. Trietely.
On cross-examination, Ms. Trietley acknowledged that “she was concerned
that St. Andrews [was] not assessed high enough”19 and that the difference in
Tr. at 65.
16 Tr. at 74-75.
17 Tr. at 77. Ms. Trietley stated that she also considered the amenities and curb appeal. She testified
that “we used a cost approach, so we’re looking at cost approach and market approach for a
semblance of what we feel the assessed values should be.”
18 Tr. at 72 (The Chairman stated, “Can we take a five-minute recess while we're waiting for those
[copies]”).
19 Tr. at 83.
assessments between St. Andrews and St. Andrews Addition was the result of “the
divergence in the types of buildings from the 1,200-square-foot to the 2,500-square-
foot. And that, you know, and in a tenant-appeal situation, St. Andrews is, you
know, 15 years old, and [St. Andrews Addition] is only, is newer, less than five years
old.”20
Mr. Heisler then testified as Appellant’s rebuttal witness Mr. Heisler
challenged the County’s choices of comparable properties21 He explained that St.
Andrews Addition and St. Andrews have comparable amenities because the larger
St. Andrews units “have finished basements some of them, decks, similar to the ones
- - with patios undemeath, similar to the ones we have in [St. Andrews Addition].
So there is comparability”22 and he proffered Appellant’s calculation of the square
footage of the St. Andrews Addition structures Mr. Heisler also commented that he
had not seen the County’s data exhibits until the Board Hearing recess23 and that the
County’s calculation of the square footage of the St. Andrews Addition structures
20 Tr. at 86-87.
21 Tr. at 96-97 (“. . .it’s really disconcerting when I look at these pictures, when I look at everything,
how we’re going about trying to say [that the selected five 1983 property sales and the St. Andrews
Addition structures] are comparable”).
22 Tr. at 92.
23 Tr. at 92.
was inaccurate.24 Mr. Heisler also expressed frustration with the County’s
methodology.25
Mr. Heisler then asked for a continuance so that he could address the
exhibits26 The Chairman of the Board appreciated Appellant’s need to study the
presented data, including the changes to it, but denied the request.27 The Chairman
said, “I believe that there is enough of a reasonable cause that’s been made by the
County to offer the [A]ppellant some improvements [lower assessments] from what
were the assessed values before you came here.’728
24 Specifically, Mr. Heisler stated:
And [the square footage of the St. Andrews Addition structures
have] been rounded one way or another. That may not mean very
much, but for me that’s concerning because when you start talking
a couple hundred units or a hundred units, rounding 70 here and 50
here adds up to a lot of dollars after a while.
Tr. at 65.
25 Tr. at 99 (“[T]enant appeal is an interesting thing, but it has to be tenant appeal back in 1983,
not tenant appeal today. And that’s very frustrating because I don’t see how you adjusted for tenant
appeal in 1983 dollars, and you haven’t here”).
26 Tr. at 96 (“If we want to have a transparent process, one that’s deliberative, one that has sunshine
in it, and l believe in sunshine, I would like to ask for a continuance so I can respond to this
exhibit”).
27 Tr. at 105 (“And I appreciate what you say about, you know, having opportunity to study data,
but I believe there’s enough of a reasonable cause that’s been made by the County to offer the
appellant some improvements from what were the assessed values before you came in here . . .”).
28 Tr. at 106 (The Chairman stated, “I mean, I think you can go right down the list, Joe [another
Board member], and you can see that [the assessments are] lower”).
After Mr. Heisler challenged the County’s calculations, Ms. Trietley admitted
to the Chairman that her data was internally flawed and asked for an opportunity to
“run [the numbers] again.
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MR. HEISLER:
MS. TRIETLEY:
UNIDENTIFIED SPEAKER:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
THE CHAIRMAN:
MS. TRIETLEY:
29 Tr. at 104.
30 Tr. at 102-04 (emphasis added).
So you had 88,300 represented the final value of land and
building.
Correct.
Okay. And then you have a new building value of 73,800.
Correct.
And if you subtract that from the 88,300_
No. You have to look at the final value or the building value.
The building value previously was 80,600.
Right. And now you’re at 73,800.
Now we’re at 73,800.
So how do you get a difference of minus $14,500?
Because you have to add in the land.
Okay. But when you add in the land, isn’t that new value
$81,500?
Yes.
If you compare 81,500 to 88,300, which was the land and the
building, how do you get $14,500?
My excel didn’t do that right because they-88,3 00
And I’m looking at that being the case in all of them.
It is. It’s a formula error.
l think that, yeah the difference would be that_88,300_
6,800
Yeah. 6,700.
It would be 6,800.
Right.
It’s 81,500 against 88, 300.
Right. It’s 6,700.
6,800.
6,800.
Right. So this_
Column is wrong.30
The Board then acknowledged that the County’s witness had presented
incorrect information
THE CHAIRMAN: This column is wrong. So when we were talking about the
benefit to the appellant was almost $186,000, that’s not true.
MS. TRIETLEY: We can_I can go back and try to run it again. Yeah.
THE CHAIRMAN: I’m not trying to change everything. You know, this is a
document that’s going into the record, and that column is not
accurate.31
The Chairman then struck the inaccurate portion of Ms. Trietley’s data from
the record.32 The Board considered the revised reassessment and unanimously
accepted the newly announced assessed values, which were lower (and based on
different data), than the assessed values that Appellant first challenged
On August 10, 2017, the Board issued its formal Opinion. The Opinion
explained that the comparable sales approach utilized by the County was a
“recognized method of valuation,”33 that the comparable sales properties that the
County used in support of its valuation were all within two miles of St. Andrews
31 Tr. at 104 (emphasis added).
32 Tr. at 105 (“So 1 want to note for the record that New Castle County Exhibit 2, the final column
called ‘Difference’ really should be stricken because that is not accurate data, both pages”).
33 Rawle at 1046.
10
Addition,34 and that the Court has historically supported the comparable sales
method and rejected the comparable assessments method.?’5
On September 15, 2017, Appellant filed its Notice of Appeal of the Board’s
decision.
Parties’ Contentions
On December 29, 2017, Appellant filed its Opening Brief. Appellant asserts
that the Board violated Appellant’s right to due process when it denied Appellant’s
request for pre-hearing discovery and denied Appellant’s request, during the
Hearing, for a continuance in order to have sufficient time to review the County’s
newly revealed appraisal data which resulted in an assessment lower than the
appealed assessment.36
Specifically, Appellant contends that “[c]onsidering the important nature of
this appraisal data, disclosing the appraisal data on the same date of the Hearing
failed to provide Appellant the proper notice to which it [was] entitled”37 and that
“Appellant explicitly requested [the County’s appraisal data] on several occasions
34 Rawle at 1045 (“All of the comparable properties are within two miles of the [S]ubject Properties”).
35 Rawle at 1045 citing Jones v. New Castle County Board ofAssessment Review, 1987 WL 12442
(Del. Super. June 5, 1987).
36 Op. Br. at 12.
37 Op. Br. at 12.
11
between fall 2013 and the Hearing, but the County refused to provide this
information to the Appellant.”38 Appellant also asserts that the continuance denial
unfairly prejudiced Appellant and was somewhat ironic in light of the Board’s
amendment of a procedural rule, moments before the Hearing, which recognized the
importance of informed and germane appeals39
Appellant argues that the denial of a continuance was unfair because
Appellant had little basis upon which to challenge the County’s new revised
reassessments that only became known after Appellant’s witness had testified
Appellant asks the Court to remand this matter because “[t]his denial prohibited
Appellant from having a fair opportunity to analyze and rebut the County’s appraisal
data in advance of the Hearing.”40 Appellant further claims that “[t]he County’s last
minute introduction of their appraisal data on the same day of the Hearing materially
prejudiced Appellant’s ability to properly analyze and rebut the same.”41
On February 6, 2018, Appellees filed their Answering Brief. Appellees argue
that the absence of formal discovery in administrative proceedings does not violate
38 Op. Br. at 5.
39 Op. Br. at 12.
40 Op. Br. at 16; See also Tr. at 27 (Mr. Heisler stated, “So that’s why when I was here for the
meeting, I asked to see their data pool, whatever the six pieces or twenty pieces of sales they used
because we have pockets of poverty along Route 40. We have pockets of nice neighborhoods”).
41 op. Br. at 13.
12
due process,42 “[n]othing precluded [Appellant] from conducting its own research of
comparable properties that were sold and presenting that evidence to the Board in
its case in chief,”43 and “[Appellant] [] failed to show how a continuance would have
changed the outcome.”44
On February 27, 2018, Appellant filed its Reply in Further Support of Its
Opening Brief. Appellant asserted that allowing Appellant to view the County’s
appraisal data during a brief recess “hardly cured the prejudice that Reybold faced
by having to confront this data for the first time at the [H]earing.”45
Standard of Review
This Court’s authority to review appeals from the Board is governed by 9 Del.
C. § 8312(0), which provides that “[t]he decision of [the Board] shall be prima facie
correct and the burden of proof shall be on the appellant to show that such body
acted contrary to law, fraudulently, arbitrarily or capriciously.”46 The Appellant
42 Ans. Br. at 15.
43 Ans. Br. at 16.
44 Ans. Br. at 16.
43 Reply Br. at 4 (“These appraisals can take weeks, and sometimes months to put together. The
validity of the appraisal is based on the validity of the adjustments Without the benefit of having
a real opportunity to study the underlying property data that went into the appraisal, you cannot
fairly ask questions about it”).
46 O’Neill v. Ba'. OfAssessmentReview, 1986 WL 14018, at *1 (Del. Super. Nov. 21, 1986).
13
faces “a substantial evidential burden” before both the Board and this Court.47 At a
hearing before the Board, there is a presumption of accuracy in favor of the County’s
assessment.48 That presumption can only be overcome by competent evidence
sufficient to show a substantial overvaluation.49 On appeal to this Court from the
Board, “[t]he reviewing court is not to reverse if it finds that the Board relied in part
on incompetent evidence but only if the Board’s findings are clearly wrong and its
conclusions not the product of an orderly and logical deductive process.”50 The
Board’s decision not to grant Appellant’s request for a continuance is reviewed
under an abuse of discretion standard.31 This Court may remand a matter back to
47 Seaford Associates, L.P. v. Ba'. of Assessment Review, 539 A.2d 1045, 1047 (Del. 1988).
48 Fitzsimmons v. McCorkle, 214 A.2d 334, 337 (1965) (“On an appeal from an assessment,
a prima facie case of accuracy is made by the assessment record. The burden of presenting
evidence to meet the prima facie case and to rebut the presumption rests upon the property
owner” .
49 Tatten Partners, L.P. v. New Castle Cty. Bd. of Assessment Review, 642 A.2d 1251, 1256 (Del.
Super. 1993), ajj"d sub nom. New Castle Cly. v. Tatten Partners, L.P., 647 A.2d 382 (Del. 1994)
(“The burden of presenting evidence to meet the prima facie case and to rebut the presumption
rests upon the property owner. To fulfill the purpose, the owner's evidence must not only be
competent; it must be sufficient to show a substantial overvaluation.”); See also Delaware Racing
Ass'n v. McMahon, 340 A.2d 837, 840 (Del. 1975).
30 Brana'ywine Innkeepers, L.L.C. v. Ba'. of Assessment Review, 2005 WL 1952879, at *3 (Del.
Super. June 3, 2005).
31 In re Gresick, 1988 WL 116411, at *8 (Del. Super. Nov. 2, 1988) (finding in a Board of
Consumer Affair’s case that “The Board’s action was discretionary and it must be reversed only if
the Board abused its discretion in denying the recess”).
14
the Board “to clarify issues of fact or to make findings consistent with the Court’s
decision.”32
Discussion
Appellant asserts that it was denied its right to due process because the Board
refused to provide pre-hearing discovery and declined to grant Appellant’s mid-
Hearing request for a continuance in order for Appellant to sufficiently evaluate the
County’s changing and inaccurate appraisal data (particularly since the County
denied Appellant’s request for the County’s appraisal data prior to the Hearing). A
determination on this issue is fact-specific.33
Concerning the continuance request made during the Hearing after the County
presented its witness and exhibits, Mr. Heisler stated that “I would actually like time
to respond to the exhibit . . . l think this is sort of a shotgun approach if this is the
only time I get on something this major. I would like time to respond to this because
l think it’s important to the overall process”54 However, the Board denied the
request and offered as its reason that the revised reassessments were “some
32 9 Del. C. § 8312(0) states in pertinent part: “The Court may affirm, reverse or modify the
decision of such body and the decision of the Court shall be final. The Court at its discretion may
also remand the matter to the board to clarify issues of fact or to make findings consistent with the
Court's decision.”
33 Fairwina's Shopping Ctr., Inc. v. Ba'. Oan'justment, 1993 WL 258801, at *6 (Del. Super. June
4, 1993) (“Ultimately, of course, each such case turns on its own particular facts”).
34 Tr. at 96.
15
improvement” (lower than the original County assessments that Appellant
appealed).53 The Board did not address Appellant’s concern about the process.36
Based on the totality of the circumstances the Court finds that the Board’s
decision to deny a continuance was an abuse of discretion. Appellant was prejudiced
by the Board’s denial. In O’Neill v. Board of Assessment Revz`ew,37 this Court held
that a proceeding before the Board was “fundamentally unfair” when the County
presented proposed reassessed property valuation figures at a hearing where the
appellant contended that such evidence “constituted surprise” and “deprived [] her
[of her] right to effectively cross-examine and present evidence.”58 Upon a finding
that the Board relied on figures that were not introduced into evidence or made
available to the Appellant prior to the hearing in O ’Neill, the Court remanded for a
new administrative hearing.39
33 Tr. at 105 (“And l appreciate what you say about, you know, having opportunity to study data,
but I believe there’s enough of a reasonable cause that’s been made by the County to offer the
appellant some improvements from what were the assessed values before you came in here . . .”).
36 Tr. at 34. (“I would like to know how the county is doing their assessment”).
37 O’Neill at *1.
58 1a at *1.
39 The 0 ’Neill Court found:
. . . [t]he figures relied upon by the Board were not formally
introduced into evidence nor made available to O'Neill prior to the
hearing. As such this Court finds that the proceeding before the
Board was fundamentally unfair in that O'Neill was deprived of her
right to effectively cross-examine and present evidence.
Ia’.
16
Here, although Appellant learned of the figures and revised figures during the
Hearing, Appellant did not have an opportunity to meaningfully review or challenge
the County’s reassessments and/or the revised reassessments Despite Reybold’s
negotiations concerning pre-hearing assessments with the County for almost four
years, the County did not present those pre-hearing assessments during the
Hearing.60 During the Hearing, the County’s witness conceded that the assessed
values that were used during negotiations and formed the basis of Appellant’s appeal
were incorrect because they were based on inaccurate square-footage measurements
of the St. Andrews Addition structures.61 The County, instead, presented
reassessments and then as the Hearing progressed, revised those reassessments As
such, the County proffered two new and different assessments during the Hearing.
Appellant’s presentation of its case at the Hearing focused on pre-Hearing
assessments put forth by the County during negotiations Appellant was not
611 Although Reybold and the County had been in the midst of tax assessment negotiations for
nearly three years, the County had just prepared its proffered appraisal data 30 days prior to the
Hearing. Tr. at 82 (Q: “Ms. Trietley, when did you prepare Exhibit lA?” A: “Within the past 30
days, say”).
61 Ms. Trietley stated:
Larry (unintelligible), who kind of started on this project for looking
at the discrepancies between [St. Andrews and St. Andrews
Addition], went out and remeasured all of the parcels, you know, all
of the buildings, so that, you know, some of them did have bad
measurements, so they've been corrected, and my use new assessed
value sheet have the corrected square footage that we currently have
[sic].
Tr. at 74-75.
17
informed of the County’s new figures or any basis for the new figures until after
Appellant had presented its case, rested, and the County presented its witness
Appellant only had a brief period of time during the copying break to review and
consider the County’s post-negotiation figures which were revealed at the Hearing
(and had been compiled only approximately 30 days prior to the Hearing).
Furthermore, this was not the County’s final version. The County’s figures
continued to change during the Hearing and were again revised after cross-
examination and rebuttal. Moreover, the record does not reflect that Appellant had
an opportunity to challenge the inaccurate revised reassessment figures that had been
proffered after the recess
There were protracted pre-Hearing negotiations, the County abandoned its
pre-Hearing figures, and the County presented reassessments at the Hearing after
those negotiations The County did not present a firm, accurate, or unchanging
assessment Additionally, the County’s witness wanted to go over the numbers
again. 62 As such, the Court finds that the Board abused its discretion when it
declined to grant the continuance
62 Tr. at 104. The Board also ignored the County’s witness’ uncertainty about the reassessment.
Ms. Trietley said, “We can. .. I can go back and try to run it again. . .” The Chairman responded,
“I’m not trying to change everything You know, this is a document that’s going into the record,
and that column is not accurate.”
18
Appellant appeared at the Hearing for the purpose of challenging the original
assessments Appellant was not aware of newly revised assessments or the changing
nature of the revised assessment until after the County’s witness testified. Due
process requires that an appellant have notice of the subject matter of the
proceedings63 and due process is violated when “notice [] fail[s] to inform, and this
lack of information [] prejudice[s] the party’ s ability to defend against the charges.”64
Although Appellant obviously knew the generalized nature of the subject matter (tax
assessments of St. Andrews Addition rental townhomes), Appellant did not have
notice that the County had been negotiating with incorrect assessment amounts
Additionally, Appellant did not have notice of the inaccurate reassessments that were
proffered at the Hearing, the basis for the reassessments, or the inaccurate revised
reassessments
Because Appellant appealed to the Board, the County reexamined its data and
determined that the pre-Hearing assessments were wrong. Appellant was prejudiced
at the Hearing because the new inaccurate reassessments and new inaccurate revised
reassessments hampered Appellant’s ability to knowingly challenge the County’s
new valuations, meaningfully cross examine the County’s witness, or present
63 Purnell v. Dep’t of lns., 2017 WL 3980539, at *7 (Del. Super. Sept. 7, 2017) (“Due
process requires [only] that the notice inform the party of the time, place, and date of the hearing
and the subject matter of the proceedings.”) (interiial citations omitted).
34 Gresick at *6 (internal citations omitted).
19
responsive evidence. While Appellant presented evidence of comparable
assessments (and did not use any of the three established methods of assessment
when it presented its direct case),63 a continuance would have given Appellant the
opportunity to thoroughly review the new data,66 challenge the County’s clerical
errors, 67 more thoroughly cross-examine the County’s witness, and, arguably, rebut
the County’s selection of comparable homes, calculations of square footage, photos
of curb appeal, comparable amenities, etc.
Furthermore, in view of the differing variations of the square-foot
measurements that were presented at the Hearing by both parties, the square footage
measurements of St. Andrews Addition townhouses appeared to be of significant
importance to both presentations68 Here, square footage evidence included the
63 See Dep ’t ofFin v. Teachers lns. & Annuity Ass ’n, 669 A.2d 100, 102 (Del. 1995) (“The three
principal valuation approaches used in determining the fair market value of real estate are:
comparable sales (or market), income capitalization, and reproduction cost.”); Tr. at 109 ([Board
Member]: “But, you know, I just, that’s one of the reasons why we don’t use assessments in how
other properties are assessed, because like you said, it could have been a clerical error. . .”).
66 Tr. at 109.
67 Tr. 102-04 (Although the County utilized one of the three valuation approaches, the County’s
presentation contained clerical errors).
68 Ms. Trietley stated:
It’s the cost per square foot of that adjusted value. Okay? The first
line is the net adjustment, the second line is the adjusted sale price,
and then in the gray areas it’s the percentage of adjustment and the
cost per square foot. So I used that, you know, that range to apply to
the adjustments l was making to the cost per - to the square foot of
the building because the land had already been taken care of.
Tr. at 65.
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testimony by Mr. Heisler that a County assessor had previously been “let go” for
calculating inaccurate square footage,69 the testimony and concession by Ms.
Trietley that the County’s original square footage measurements of St. Andrews
Addition were wrong,70 and Mr. Heisler’s rebuttal testimony that the newly
presented square footage measurements were still inaccurate.71 Refusing to grant a
continuance denied Appellant the opportunity to meaningfully challenge whether
the new valuations were also substantial overvaluations.
Moreover, prejudice exists even though there was a brief recess, Appellant
engaged in cross examination of the County’s witness (before and after the brief
recess), and the ultimate assessed amounts were lower than the amounts originally
assessed.72
The Board’s decision to declare a brief recess for the purpose of making
copies did not provide an opportunity for Appellant to meaningfully review the data,
While Appellant, arguably, had the opportunity to review the reassessment figures
69 Tr. at 15.
76 Tr. at 74-75.
71 Tr. at 92; Tr. at 110 (Board Member: “l'll just say on your point of the square footage, you're
[(Appellant)] definitely right that there is only one accurate square footage number. Once you
bring that point forward to us, that does raise the question are you assessed correctly”).
72 Tr. at 109 (Board Member: “[T]hey’re actually offering you lower than the average of the five
comparables in their offer. So I’m willing to go with what the County has presented . .”).
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presented before the recess, Appellant had no opportunity to review or ascertain the
County’s bases for figures relied upon after the recess Similarly, the denial of a
continuance prevented Appellant from meaningful cross-examination of the
witness’ post-recess testimony concerning revisions and concessions of inaccuracy.
Additionally, the continuance deprived Appellant of due process despite the
fact that the Board’s decision was an “improvement” from the assessed values prior
to the hearing.73 The Board’s refusal to continue the Hearing seemingly focused on
the reassessment amounts rather than Appellant’s right to due process despite the
Board’s recognition that due process includes an informed challenge to an
assessment (as indicated by its adoption of a pre-hearing discovery rule that took
place immediately prior to the Hearing).
”74 and, as
The County did not clearly set forth its basis for the “improvement
such, the record does not reflect that the lower assessment was the product of a fair
appraisal process.73 Moreover, Appellant was deprived of a hearing process that
would have provided an opportunity to challenge the improvement and, arguably,
obtain a greater “improvement” (an even lower assessment).
73 See O ’Neill at *2 (deciding to remand where the County’s reassessed figures were lower than
those provided to O’Neill at the prior informal hearing).
74 Tr. ar 105.
73 See generally Delaware RacingAss'n, 340 A.2d 837, 844 (“It is incumbent upon the government
in the exercise of its taxing authority to ensure the utmost fairness in the appraisal process”).
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Appellant also argues in this appeal that its due process rights were violated
because the County did not produce the County’s appraisal data prior to the Hearing
(particularly since the Board’s discovery rules were revised immediately prior to
Appellant’s Hearing to provide for pre-hearing discovery). 76 ln light of the Court’s
ruling that the Board’s denial of Appellant’s continuance request during the Hearing
violated due process, the Court need not address Appellant’s pre-hearing discovery
issue as grounds for remand and whether the new discovery rule can be retroactively
applied.77
76 Appellant expressed clear concern not only for how the County’s process and methodology
would affect him in this case, but also the importance of understanding the methodology for the
future:
[M]y concern is_and I’m not doubting anybody’s integrity. That’s
not what it’s about. lt’s about how accurate is the data and how it
was generated l can’t see that. l can’t question that. l want to
question that, not in a negative way, but l want to understand what
it is. So one of my requests today, no matter what the outcome is, is
that I get to see that data. This is a big number to me. And I still have
[80] more units coming online, so l would like to know how the
County is doing their assessment
Tr. at 34.
77 As early as 1995, this Court recommended that the “Board exercise its authority [] to amend the
Board’s Rules to include a provision for some limited pre-hearing discovery” for an appellant-
landowner. 1001 Jejj%rson Plaza P ’ship v. Dep ’t ofFin., 1995 WL 717610, at *4 (Del. Super. Nov.
8, 1995) rev ’a' on other grounds (At that time, the Court did not have the authority to remand an
appeal back to the New Castle County Board of Assessment), 1001 Jejj‘erson Plaza P ’ship v. Dep ’t
of Fin., 695 A.2d 50. The Court concluded:
No question exists as to the enormous burden that an
appellant/property owner suffers in the midst of appeals to both the
Board and Superior Court. The appellant/property owner is first
required to rebut a presumption in favor of the County’s assessment
and then a presumption in favor of the Board’s decision. Coupled
witli this stacked deck is the Board’s requirement that the property
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Here, Appellant requested a continuance and the County’s witness requested
a do-over. Both sides were concerned that something was wrong with this particular
proceeding The figures literally did not add up. While it is understandable that the
Board would like to proceed as expeditiously as possible, under the circumstances
set forth in the record, their requests for due process were not unreasonable or
unwarranted In view of the fact that negotiations to reach a partial resolution
(regarding the land) spanned almost four years, a continuance to determine a reliable
assessment regarding the structures would not have unduly delayed closure.
Conclusion
Accordingly, based on the totality of the circumstances, this matter is hereby
REMANDED to the Board consistent with this decision.
IT IS SO ORDERED.
Diane Clarke Streett, Judge
owner produce, well in advance of the hearing, all of the evidence
upon which the property owner intends to rely. The property owner,
however, receives nothing from the County in advance of the
hearing. The property owner has no advance opportunity to review
the County’s evidence or prepare for cross-examination
At a minimum, the County should provide all documents and
information utilized in support of the assessment along with any
other materials required to interpret or otherwise decipher those
documents (internal citations omitted). ' ' ' 1
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