In Re: Appeal of Haven at Atwater Village LLC ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Appeal of Haven at Atwater :
Village LLC from the decision of the :
Chester County Board of Assessment :
Appeals, Municipality of East Whiteland :
Township, Chester County, PA for the :
Tax Year 2017 :
:
Tax Parcel No. 42-02-0008.03.A0 :
:
Appeal of: Haven at : No. 1185 C.D. 2020
Atwater Village, LLC : Argued: December 16, 2021
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge1
HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: January 14, 2022
Haven at Atwater Village, LLC (Haven) appeals from an order of the
Court of Common Pleas of Chester County (trial court) rejecting Haven’s tax
assessment appeal. Upon review, we affirm the trial court’s order.
I. Background
This matter is an appeal from a tax assessment for an apartment
complex on real property owned by Haven in East Whiteland Township, Chester
1
This matter was assigned to the panel before January 3, 2022, when President Judge
Emerita Leavitt became a senior judge on the Court.
County (Property). Reproduced Record (RR) at 6a. The parties stipulated to the fair
market value (FMV) of the Property for each of the pertinent tax years, as well as to
the common level ratio (CLR)2 established by the State Tax Equalization Board
(STEB)3 for each year. RR at 9a. The sole issue raised by Haven is its assertion that
the tax assessment ratio for the Property lacks uniformity with other apartment
complex properties in Chester County, in violation of the Pennsylvania Constitution
provision known as the Uniformity Clause.4 Id. at 6a n.1.
Before the trial court, the Chester County Board of Assessment Appeals
(Board) submitted evidence of its assessment of the Property. RR at 26a-29a &
2
The common level ratio (CLR) is the ratio of a property’s assessed value to its current
fair market value (FMV). Section 102 of The General County Assessment Law, Act of May 22,
1933, P.L. 853, as amended, added by the Act of December 28, 1955, P.L. 917, 72 P.S. § 5020-
102; Appeal of Sullivan, 37 A.3d 1250, 1258 (Pa. Cmwlth. 2012). The CLR “is an accepted
calculation of the common level existing in the [taxing] district and the standard against which the
taxpayer’s assessment ratio should be measured for uniformity purposes.” Sullivan, 37 A.3d at
1255. As our Supreme Court has observed, “‘the CLR is a useful tool for a taxpayer to demonstrate
that his property has been over-assessed, as it allows him to compare the assessed-to-market value
ratio of his property to the average ratio throughout the district.’” Id. at 1255-56 (quoting Clifton
v. Allegheny Cnty., 969 A.2d 1197, 1216 (Pa. 2009)).
3
The State Tax Equalization Board (STEB) calculates each county’s CLR pursuant to the
Act of June 27, 1996, P.L. 403, as amended, added by the Act of April 18, 2013, P.L. 4, 71 P.S.
§§ 1709.1500-1709.1521, referred to as the State Tax Equalization Board Law. GM Berkshire
Hills LLC v. Berks Cnty. Bd. of Assessment, 257 A.3d 822, 825 (Pa. Cmwlth. 2021). “The CLR is
calculated on an annual basis by [the] STEB for each county using data from all arms’ length sales
transactions during the relevant period, supplemented by independent appraisal data and other
relevant information.” Smith v. Carbon Cnty. Bd. of Assessment Appeals, 10 A.3d 393, 399 n.8
(Pa. Cmwlth. 2010) (citing Clifton; Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of
Assessment Appeals, 913 A.2d 194 (Pa. 2006) (Downingtown I)). “Under normal economic
conditions, the CLR will decrease each year, reflecting ongoing inflation and an appreciation in
real estate values.” Smith, 10 A.3d at 399 n.8 (citing Clifton, 969 A.2d at 1216 (quoting
Downingtown I, 913 A.2d at 203)).
4
Article VIII, section 1 of the Pennsylvania Constitution, entitled “Uniformity of
Taxation,” provides: “All taxes shall be uniform, upon the same class of subjects, within the
territorial limits of the authority levying the tax, and shall be levied and collected under general
laws.” PA. CONST. art. VIII, § 1.
2
417a-68a. The Board also offered evidence of the applicable CLRs in Chester
County for the tax years at issue, which were 53.0% for tax years 2017 and 2018,
53.1% for tax year 2019, 49.3% for tax year 2020, and 47.0% for tax year 2021. RR
at 30a-31a.
Haven submitted fact evidence concerning a total of 14 apartment
complexes in Chester County that were sold in the 5 years preceding the assessment
of the Property, positing that the selling prices constituted the FMVs of those
properties for tax assessment purposes. RR at 109a. Based on the tax assessment
amounts for those properties, Haven’s witness then used the sales price of each such
property as its FMV to calculate a purported effective tax ratio for that property. Id.
Haven asserted that among the sample properties, the highest ratio was 60.05%, the
lowest was 21.86%, the average was 37.78%, and the median was 36.89%. Id. at
110a. Haven contended the average assessment ratio of the samples was lower than
the CLR and, thus, lower than the ratio assessed for the Property. Accordingly,
Haven contended it was entitled to a tax assessment ratio for the Property consistent
with the average ratio applicable to the sample properties as calculated by its witness.
Id.
After the trial concluded, the trial court upheld the assessments for the
Property as calculated for the stipulated FMVs under the CLR as set by the STEB.
RR at 6a-7a. The trial court held that Haven was entitled to an assessment that was
in uniformity with all properties in Chester County generally, not with other
apartment complexes. Id. at 6a n.1 (“all property within a taxing district is a single
class and, as such, may not be treated in a disparate manner”) (citing Kennett Consol.
Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 228 A.3d 29, 36 (Pa. Cmwlth.
2020), appeal dismissed, 259 A.3d 890 (Pa. 2021)) & 10a (“‘all property in a taxing
3
district is a single class, and, as a consequence, the Uniformity Clause does not
permit the government, including taxing authorities, to treat different property sub-
classifications in a disparate manner’”) (quoting Valley Forge Towers Apts. N., LP
v. Upper Merion Area Sch. Dist., 163 A.3d 962, 975 (Pa. 2017)).
The trial court concluded further that, assuming the relevance of
assessments of comparable apartment complexes in determining the countywide
assessment ratio, Haven had failed to prove the Property’s assessment was not in
uniformity with those of the other apartment complexes in Chester County. RR at
6a n.1. In its opinion pursuant to Pa.R.A.P. 1925(a) following Haven’s appeal to
this Court, the trial court explained that it found the sample properties chosen as
comparable by Haven were “far too skimpy” in number to give rise to an inference
that all comparable apartment complexes in Chester County were assessed at lower
ratios to their FMVs than the Property. Id. at 12a. While careful to point out that it
was not implying, much less imposing, a requirement that Haven provide evidence
of the ratio for every apartment complex in Chester County, the trial court
nonetheless opined that “a far larger sample of those assessments would have had to
be provided” than Haven submitted here.5 Id. In the trial court’s view, Haven should
have at least provided evidence concerning “a sufficient number of the apartment
complexes in the county such as to be statistically significant,” but failed to do so.
Id. at 13a. Ultimately, therefore, the trial court concluded that “the number of
properties presented compared to all of the apartment complexes in the county was
insufficient to permit us to draw the inference for which Haven argues.” Id.
5Testimony at trial indicated Haven’s witness looked at 14 of 189 apartment complexes in
the county, those being properties sold within 5 years of the assessment date of the Property. RR
at 109a.
4
Haven then appealed to this Court.6
II. Issue
On appeal, although Haven lists several issues for review, they are all
part of a single overarching argument. Haven contends the trial court erred by
rejecting unrebutted evidence concerning the assessment ratio applied to comparable
properties in the county. Haven offered fact testimony that, based on sales price,
apartment complexes sold in Chester County in the three years preceding Haven’s
purchase of the Property were assessed on average at a lower ratio than the Property.
Haven reasons that the trial court was required to accept that evidence as dispositive
of Haven’s assessment appeal. Haven characterizes the trial court’s decision as a
refusal to consider unrebutted, relevant, credible evidence.
III. Discussion
As Haven acknowledges, a property assessment is normally calculated
by applying the countywide CLR to the property’s FMV. See Deitch Co. v. Bd. of
Prop. Assessment, 209 A.2d 397, 403 (Pa. 1965), superseded in part on other
grounds as stated in Hess v. Montgomery Cnty. Bd. of Assessment Appeals, 461 A.2d
333 (Pa. Cmwlth. 1983); Hromisin v. Bd. of Assessment Appeals, 719 A.2d 815, 818
(Pa. Cmwlth. 1998). However, Haven posits that the trial court erroneously treated
that calculation as automatic and refused to consider Haven’s relevant evidence that
6
“This court’s review is limited to determining whether the trial court abused its discretion,
committed an error of law, or rendered a decision unsupported by the evidence.” Downingtown
Area Sch. Dist. v. Chester County Bd. of Assessment Appeals, 131 A.3d 152, 156 n.4 (Pa. Cmwlth.
2015) (Downingtown II) (citing Walnut-Twelve Assocs. v. Bd. of Revision of Taxes, 570 A.2d 619,
622 (Pa. Cmwlth. 1990)).
5
similar properties in the County were, on average, taxed at a lower ratio than the
Property. We discern no merit in this argument.
Our Supreme Court “has consistently interpreted the uniformity
requirement of the Pennsylvania Constitution as requiring all real estate to be treated
as a single class entitled to uniform treatment.” Clifton v. Allegheny Cnty., 969 A.2d
1197, 1212 (Pa. 2009) (citing Westinghouse Elec. Corp. v. Bd. of Prop. Assessment,
Appeals & Rev., 652 A.2d 1306, 1314 (Pa. 1995); Keebler Co. v. Bd. of Revision of
Taxes, 436 A.2d 583, 584 (Pa. 1981); Deitch, 209 A.2d at 402; McKnight Shopping
Ctr., Inc. v. Bd. of Prop. Assessment, Appeals, & Rev., 209 A.2d 389, 392 (Pa.
1965)). Nonetheless,
in [Downingtown Area School District v. Chester County
Board of Assessment Appeals, 913 A.2d 194 (Pa. 2006)
(Downingtown I)], [our Supreme Court] stated that the
general uniformity requirement does not eliminate “any
opportunity or need to consider meaningful sub-
classifications as a component of the overall evaluation of
uniform treatment in the application of the taxation
scheme.” Id. In so stating, however, [the] Court was
primarily concerned with overall uniformity, and [the
Court] reaffirmed “the prevailing requirement that
similarly situated taxpayers should not be deliberately
treated differently by taxing authorities.” Id. at 201.
Clifton, 969 A.2d at 1213.
Relying on Valley Forge Towers, Clifton, and Downingtown I, Haven
asserts that where a taxpayer offers unrebutted, relevant, and credible evidence that
a tax assessment fails to comply with uniformity requirements, a court is required to
grant relief. This is a correct statement of the law, as far as it goes. See, e.g., Valley
Forge Towers, 163 A.3d at 973 (“regardless of the CLR as calculated by the STEB,
property owners may nonetheless be entitled to relief in a judicial or quasi-judicial
6
proceeding if they can show their parcels are over-assessed as compared to other,
comparable properties”). However, it did not require the trial court to grant relief in
this instance.
As this Court has explained, a tax assessment appeal includes shifting
burdens of proof:
In a tax assessment appeal, the trial court proceeds de
novo. Murtagh v. [Cnty.] of Berks, 715 A.2d 548, 552 (Pa.
Cmwlth. 1998). Once the taxing authority admits its
assessment into the record, it has made out a prima facie
case; then the burden shifts to the party challenging the
assessment to present sufficient, competent, and credible
evidence to overcome the prima facie case. Deitch . . . ,
209 A.2d [at] 402 . . . .
Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 131 A.3d
152, 156 (Pa. Cmwlth. 2015) (Downingtown II); see also In re Appeal of Brooks
Bldg., 137 A.2d 273, 275 (Pa. 1958). “When a taxpayer fails to refute the presumed
uniformity of a predetermined ratio by presenting credible, relevant and competent
evidence to the contrary, the assessment of the taxing body must prevail.” Fosko v.
Bd. of Assessment Appeals, 646 A.2d 1275, 1279 (Pa. Cmwlth. 1994) (citing Appeal
of Chartiers Valley Sch. Dist., 447 A.2d 317 (Pa. Cmwlth. 1982), appeal dismissed,
456 A.2d 986 (Pa. 1983)).
Here, Chester County met its burden and set forth a prima facie case by
placing in evidence its assessment of the Property. See RR at 26a-29a & 417a-68a;
Downingtown II, 131 A.3d at 156. The ultimate burden of proof then shifted to
Haven to demonstrate entitlement to tax relief. Downingtown II, 131 A.3d at 156.
We agree with Haven that the Township offered no evidence to rebut
the testimony of Haven’s fact witness concerning the sales prices of other apartment
7
complexes in Chester County during the three years before the sale of the Property.
Similarly, there was no evidence to rebut Haven’s calculation of the tax ratio that
resulted from using the sales price of each apartment complex as its FMV. However,
although Haven implies that it was automatically entitled to relief because the
Township failed to offer rebuttal evidence, that is not an accurate statement of the
law. A taxing district may choose not to present rebuttal evidence, although it does
so at the risk that the factfinder will be persuaded by the taxpayer’s evidence. See
Deitch, 209 A.2d at 402 (“The taxing authority cannot . . . rely solely on its
assessment record in the face of countervailing evidence unless it is willing to run
the risk of having the owner’s proof believed by the court.”) (emphasis added). Thus,
because Haven bore the ultimate burden of proof, the absence of rebuttal evidence
was not dispositive. The trial court could still reject Haven’s evidence.
We also agree with Haven that it was entitled to offer evidence of the
ratios applied to comparable properties in Chester County; moreover, the sales prices
of such properties during a reasonable period preceding the tax years at issue were
relevant in determining the effective tax ratios applied to those properties as
compared to the tax ratio assessed against the Property. See Valley Forge Towers,
163 A.3d at 974 (“The observation that these types of proofs are relevant was
intended to maintain the longstanding protection of taxpayers from high assessment
ratios as compared with those of comparable properties, and to promote harmony
with equal protection principles . . . .”).
Contrary to Haven’s argument, however, evidence of disparate tax
assessments in a small subset of properties does not automatically entitle a taxpayer
to relief. As our Supreme Court explained in Valley Forge Towers:
8
The observation that these types of proofs are relevant was
intended to maintain the longstanding protection of
taxpayers from high assessment ratios as compared with
those of comparable properties, and to promote harmony
with the equal protection principles, not as a means of
empowering the government to systematically engage in
disparate treatment of subclassifications of property.
Id. at 974.
It is true that, as this Court stated in Baechtold v. Monroe County Board
of Assessment Appeals, 804 A.2d 713 (Pa. Cmwlth. 2002), producing evidence of
the FMVs of similar properties and the related tax assessments is “one method a
taxpayer could follow to show lack of uniformity.” Id. at 717 (citing McKnight
Shopping Ctr.; Brooks Bldg.). Nonetheless, the success of such a method in
satisfying a taxpayer’s burden of proof necessarily depends on the factual
sufficiency of the taxpayer’s evidence concerning the FMVs of the other properties,7
their similarity to the property at issue, and the statistical significance of the samples
chosen for comparison. See, e.g., Clifton, 969 A.2d at 1214 (“in uniformity
litigation, the aggrieved taxpayer must first establish the various valuations at issue,
and then demonstrate how the disparate ratios of assessed-to-market value violate
the uniformity requirement”). Thus, although relevant, evidence of the tax ratios
applied to comparable properties in the area, based solely on the sales prices of those
properties, did not automatically sustain Haven’s burden of proving entitlement to a
reassessment.
7
For example, fact evidence of the sales prices of recently transferred properties did not
necessarily suffice to prove those properties’ FMVs. Haven chose not to offer expert testimony
from an appraiser relating to various methods of estimating FMV including cost, income, and sales
methods, all of which should be considered in a proper appraisal of FMV. See Downingtown II,
131 A.3d at 156 (citing Willow Valley Manor, Inc. v. Lancaster Cnty. Bd. of Assessment Appeals,
810 A.2d 720, 273 (Pa. Cmwlth. 2002)).
9
Ultimately, the key to uniformity of taxes in any taxing district is the
districtwide average ratio. Hromisin, 719 A.2d at 819. Thus, the oft-repeated rule
is that a taxpayer is not entitled to taxation at the lowest ratio to which it can point
as applied to a comparable property, without proving that ratio to be the districtwide
average. See, e.g., Smith v. Carbon Cnty. Bd. of Assessment Appeals, 10 A.3d 393,
403 (Pa. Cmwlth. 2010); Deitch, 209 A.2d at 401 (citing In re Rick Appeal, 167 A.2d
261 (Pa. 1961)); see also Baechtold, 804 A.2d at 717 (“where the taxpayer contends
that application of the predetermined ratio yields an assessed value that is out of
proportion with the amounts paid generally in the district, the taxpayer’s remedy is
to seek to have the STEB ratio applied”). Any other rule would exacerbate, rather
than lessen, any overall lack of uniformity among assessments in the taxing district.
Appeal of Sullivan, 37 A.3d 1250, 1256 (Pa. Cmwlth. 2012) (quoting Smith, 10 A.3d
at 405).
Haven mistakenly asserts that the trial court failed to consider Haven’s
evidence. To the contrary, the trial court did consider that evidence; it just did not
find Haven’s evidence persuasive. Haven conflates the relevance of its evidence
with the persuasiveness of that evidence and, similarly, conflates the trial court’s
rejection of that evidence as unpersuasive with rejection of it as irrelevant. The trial
court did not hold that Haven’s evidence was irrelevant, but that it was insufficient.8
Although Haven contends the trial court made no finding that the evidence was not
credible, the trial court’s opinion clearly and expressly stated that the court found
Haven’s evidence included too small a sampling of properties to carry its burden of
8
Contrary to Haven’s assertion, the trial court did not apply the same reasoning here that
our Supreme Court rejected in Downingtown I, 913 A.2d at 198, in which the trial court deemed
evidence of the FMVs of selected comparable properties irrelevant in a tax assessment appeal.
10
proof. RR at 12a-13a (Haven failed to present evidence concerning a “statistically
significant” number of apartment complexes; “the number of properties presented
compared to all of the apartment complexes in the county was insufficient to permit
us to draw the inference for which Haven argues”); see Downingtown II, 131 A.3d
at 157 (“‘[A] taxpayer is entitled only to have his assessment conform with the
common level existing in the district, not with a small sample of properties being
taxed at a lower than average level.’”) (quoting Smith, 10 A.3d at 407); Hromisin,
719 A.2d at 819-20 (flaw in taxpayers’ analysis was “obvious” where their witness
“relied upon only a handful of ‘comparable’ properties” in the same development
and ignored the rest of the county).
As the finder of fact, the trial court had exclusive province to
determine the credibility and weight of the evidence. Sullivan, 37 A.3d at 1256(citing Chartiers Valley Indus. & Commercial Dev. Auth. v. Allegheny Cnty., 963
A.2d 587, 593 (Pa. Cmwlth. 2008)). “This Court is prohibited from making contrary
credibility determinations or reweighing the evidence in order to reach an opposite
result.” Sullivan, 37 A.3d at 1256. Consequently, on appeal, we will not disturb the
trial court’s determination that Haven’s evidence here was insufficient.
IV. Conclusion
Based on the foregoing discussion, the trial court’s order is affirmed.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Appeal of Haven at Atwater :
Village LLC from the decision of the :
Chester County Board of Assessment :
Appeals, Municipality of East Whiteland :
Township, Chester County, PA for the :
Tax Year 2017 :
:
Tax Parcel No. 42-02-0008.03.A0 :
:
Appeal of: Haven at : No. 1185 C.D. 2020
Atwater Village, LLC :
ORDER
AND NOW, this 14th day of January, 2022, the order of the Court of
Common Pleas of Chester County is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge