Athena Providence Place v. Elyse M. Pare, in her capacity as Tax Assessor for the City of Providence ( 2021 )

November 10, 2021
Supreme Court
Athena Providence Place et al. :
v. : No. 2019-247-Appeal.
(PC 15-5520)
Elyse M. Pare, in her capacity as :
Tax Assessor for the City of
Providence, et al.
Athena Providence Place et al. :
v. : No. 2019-248-Appeal.
(PC 16-729)
Elyse M. Pare, in her capacity as :
Tax Assessor for the City of
Providence, et al.
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested
to notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at Tel. 222-
3258 or Email opinionanalyst@courts.ri.gov of any
typographical or other formal errors in order that corrections may
be made before the opinion is published.
Supreme Court
Athena Providence Place et al. :
v. : No. 2019-247-Appeal.
(PC 15-5520)
Elyse M. Pare, in her capacity as Tax :
Assessor for the City of Providence,
et al.
Athena Providence Place et al. :
v. : No. 2019-248-Appeal.
(PC 16-729)
Elyse M. Pare, in her capacity as Tax :
Assessor for the City of Providence,
et al.
Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.
OPINION
Justice Lynch Prata, for the Court. In these consolidated appeals, the
respondent, Elyse M. Pare, in her capacity as the tax assessor for the City of
Providence (the city), appeals from two judgments of the Superior Court entered in
favor of the petitioners, a group of ninety-four taxpayers who challenged the city’s
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tax assessments on their properties for tax years 2014 and 2015.1 For the reasons
stated herein, we reverse the judgments of the Superior Court and remand the cases
to the Superior Court for entry of judgments consistent with this opinion.
Facts and Travel
These appeals involve the assessed valuations of certain condominium units
located in the city in the development known as The 903 (the property or The 903).
The 903 consists of 330 dwelling units, as well as parking and storage-space
condominium units. Prior to the 2014 tax year, the property was subject to an
amended tax stabilization agreement (the TSA). The TSA provided for agreed
assessed values for the property and stabilized tax payments for tax years 2004
through 2013.
In 2012 the city performed a statutorily mandated citywide assessment update
of property values (the 2012 valuation). 2 The 2012 valuation included updating the
assessed value for the property, even though the TSA provided for stabilized tax
payments for the property through tax year 2013. The city notified petitioners of the
1
Given the fact that the list of names of the individual petitioners is lengthy and is
already a part of the record in this case, we will not recite it here. Also, in addition
to the city, the other named respondents in the petition for relief from assessment are
the members of the Providence Board of Tax Assessment Review, in their official
capacities.
2
The 2012 valuation was performed pursuant to G.L. 1956 § 44-5-11.5(4), requiring
municipalities to conduct an update of real property every three years from the date
of the last revaluation.
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2012 valuation process and informed them that taxpayers wishing to challenge the
revaluation assessments could request an informal hearing. The petitioners availed
themselves of this opportunity, contending that the 2012 valuation assessments were
too high. After this hearing, the city notified petitioners that it was affirming the
2012 valuation assessments without change. Despite the newly established values
for the property set by the 2012 valuation, the city taxed the property for tax year
2013 based on the stabilized amount set forth in the TSA.
Upon expiration of the TSA on December 31, 2013, the city revalued and
reassessed each unit of The 903 (the 2013 revaluation). The 2013 revaluation was
not based on physical changes in the condition of the property. The 2013 revaluation
assessed The 903 units at approximately 30 percent higher than the 2012 valuation.
The city issued property tax bills to petitioners in June 2014 and June 2015 based
upon the assessed property values set forth in the 2013 revaluation. No new notices
of reassessment were sent, and the 2014 and 2015 tax bills were the only notice that
petitioners received of the 2013 revaluation.
The petitioners filed two petitions in the Superior Court, on December 18,
2015, and February 18, 2016, seeking relief from the increased assessed values set
forth in the 2013 revaluation for tax years 2014 and 2015, respectively. 3 The matters
3
It is undisputed that petitioners complied with relevant statutes for filing of an
account and payment of taxes pending an appeal, and exhausted all administrative
remedies for tax years 2014 and 2015.
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were consolidated in the Superior Court. The parties agreed to submit the matter to
the trial justice for a decision on the merits based upon stipulated facts, written
submissions, and documentary evidence, including affidavits and deposition
testimony.
The trial justice issued a written decision on April 25, 2019, finding that the
2013 revaluation was selective, arbitrary, and discriminatory. Accordingly, the trial
justice ruled that the 2013 revaluation was illegal and invalid, and he ordered that
the tax bills for tax years 2014 and 2015 “shall be revised based on the 2012
Revaluation.” Judgments were entered in favor of petitioners in excess of $1.5
million, including prejudgment interest and statutory postjudgment interest pursuant
to G.L. 1956 § 9-21-10.
The city timely appealed the judgments to this Court and moved in the
Superior Court for a stay pending appeal. The trial justice granted the city’s motion,
and enforcement was stayed pending appeal.
Standard of Review
This Court accords “great deference to the findings of fact of a trial justice
sitting without a jury, and will disturb such findings only when the justice
misconceives or overlooks material evidence or otherwise is clearly wrong.”
Whittemore v. Thompson, 139 A.3d 530, 540 (R.I. 2016) (quoting Granoff Realty II,
Limited Partnership v. Rossi, 823 A.2d 296, 298 (R.I. 2003)). “A judgment in a
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nonjury case will be reversed on appeal when it can be shown that the trial justice
misapplied the law[.]” E.W. Burman, Inc. v. Bradford Dyeing Association, Inc., 220
A.3d 745, 753 (R.I. 2019) (quoting Cote v. Aiello, 148 A.3d 537, 544 (R.I. 2016)).
However, “[t]his Court reviews questions of statutory interpretation de novo.”
Balmuth v. Dolce for Town of Portsmouth, 182 A.3d 576, 580 (R.I. 2018). If a statute
is clear and unambiguous, “we ‘must interpret the statute literally and must give the
words of the statute their plain and ordinary meanings.’” Id. (quoting Whittemore,
139 A.3d at 540).
Discussion
On appeal, the city contends that the trial justice improperly weighed the
evidence and erred as a matter of law in finding that the 2013 revaluation was illegal,
invalid, selective, arbitrary, and discriminatory.
General Laws 1956 § 44-5-1 “vests in cities and towns the power to tax”
ratable property. Balmuth, 182 A.3d at 580. The tax is apportioned based on the
assessed valuations of the ratable property on December 31 of each year, as
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determined by the city or town tax assessor. Section 44-5-1.4 In order “to provide
more reliable and up-to-date property values in each of the cities and towns[,]” § 44-
5-11.5(1), the General Assembly has mandated that municipalities conduct a
revaluation every nine years, and an update every three years.5 Section 44-5-11.5(4).
However, “[a]ny property that is either exempt from the local property tax * * * or
pays a city or town an amount in lieu of taxes is not required to have its values
updated[.]” Section 44-5-11.6(e).
This Court has recognized that “[b]ecause revaluations must be carried out in
an acceptable and orderly manner, selective assessments are generally held unlawful
as discriminatory against the complaining taxpayer.” Capital Properties, Inc. v.
State, 749 A.2d 1069, 1084 (R.I. 1999) (quoting Picerne v. DiPrete, 428 A.2d 1074,
1077 (R.I. 1981)). Selective assessments occur when the municipality singles out
4
Although § 44-5-1 provides that property taxes shall be based upon the assessed
valuations determined “as of December 31 in each year[,]” this Court has recognized
that other sections contained within chapter 5 of title 44 of the general laws refer to
the assessed values of property “as of December 31 in the year of the last update or
revaluation[.]” Balmuth v. Dolce for Town of Portsmouth, 182 A.3d 576, 578 (R.I.
2018). When previously faced with this ambiguous statutory language, we
concluded that there was a “lack of clear legislative intent” and ultimately held that
taxpayers are not “locked in” to the fair market value of their properties as of the last
update or revaluation, but rather could challenge assessed values using the fair
market values of the properties annually as of December 31. Id. at 578, 586.
5
A full revaluation involves a physical inspection of each property in the
municipality. Daniel A. Curran, Property Tax Assessment in the New Era, 55 R.I.
Bar J. 13, 14 (2007). A statistical update is a mathematical evaluation, which
involves “the analyses of sales in the various municipal neighborhoods.” Id.-6-
“one taxpayer or a small group of taxpayers for revaluation or for first-time
assessment when similar property is not assessed for any tax liability.” Picerne, 428
A.2d at 1077.
Here, the 2012 valuation was a citywide reassessment update which
determined “100% of fair market value” of properties as of December 31, 2012.
While the city updated the property’s values during the 2012 valuation, as of
December 31, 2012, the property was subject to the TSA and petitioners made
“[s]tabilized [t]ax [p]ayments * * * to the [c]ity in lieu of all other real property and
personal property taxes[.]” See G.L. 1956 § 44-3-9(a)(1) (exempting from taxation
property subject to “a stabilized amount of taxes to be paid on account of the
property, notwithstanding the valuation of the property or the rate of tax”).
Accordingly, The 903 was not a property subject to taxation at its fair market value
as of December 31, 2012.
However, upon expiration of the TSA on December 31, 2013, the property
became subject to taxation based on the fair market assessed value. See §§ 44-5-1;
44-5-12(a). Because the TSA expired in the middle of the revaluation cycle, the city
performed the 2013 revaluation, which assessed the fair market value of the property
as of December 31, 2013. See § 44-5-1 (setting the date of assessment “as of
December 31 in each year”). The city based the 2014 and 2015 tax bills on the
assessed value from the 2013 revaluation.
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The 2013 revaluation can be deemed to be selective only if the property was
subjected to revaluation and similar properties were not. See Picerne, 428 A.2d at
1077 (stating that cases alleging selective assessments “are characterized by the
singling out * * * of taxpayers for revaluation * * * when similar property is not
assessed”). The trial justice “found no evidence in the record submitted that any
other properties were revalued as of December 31, 2013.” This finding
misconceives and overlooks material evidence. The only evidence in the record as
to whether other properties were revalued upon the expiration of a tax stabilization
agreement is the testimony of staff members of the city tax assessor’s office. The
city’s deputy tax assessor testified that “every year the assessor will point out what
properties * * * need to be looked at. The tax stabilization was an agreement that
was * * * brought to the office’s attention that was expiring, so * * * the office
needed to review properties.”
Specifically, the deputy assessor at the time of the 2013 revaluation testified
that, if a property changes “from a stabilized property to a non-stabilized property,
there’s a change in classification” that would prompt a revaluation. She pointed out
that any other property whose “tax stabilizations might have expired that year”
would have been subject to revaluation as of December 31, 2013. Although she
could not specifically recall what other properties were revalued, she believed there
“were a couple.”
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Likewise, the tax assessor for the city at the time of the 2013 revaluation
testified that the office would normally revalue and reassess properties upon the
expiration of a tax stabilization agreement in the middle of a revaluation cycle.
Although the tax assessor at the time could not himself positively identify other
properties where this happened, he testified at his deposition held on April 11, 2017,
that the office was “doing one now[,]” and “[t]here were several.”
We discern nothing in the record offered by petitioners to rebut the testimony
of the tax assessor’s office. Indeed, petitioners bear the burden to prove, by a
preponderance of the evidence, that the 2013 revaluation was selective.6 See Willow
Street Associates LLP v. Board of Tax Assessment Review, 798 A.2d 896, 899-900
(R.I. 2002) (“Tax assessors are entitled to a presumption that they have performed
their official acts properly until the contrary is proven.”) (brackets omitted) (quoting
Ferland Corp. v. Bouchard, 626 A.2d 210, 215 (R.I. 1993)); Narragansett Electric
Company v. Carbone, 898 A.2d 87, 99 (R.I. 2006) (articulating the plaintiff’s burden
of proof of a preponderance of the evidence for “most civil cases”). The petitioners
failed to present any evidence that similar properties in the city were not subjected
to revaluation, and there is no evidence in the record that the property was singled
6
In fact, petitioners neither alleged in their petitions nor argued in their filings before
the Superior Court that the 2013 revaluation was selective.
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out for revaluation. 7 See Picerne, 428 A.2d at 1075, 1078 (finding a reassessment
selective and discriminatory where a city’s mayor directed the collection of
additional tax revenue through updated assessments, only apartment buildings
containing six or more units were reassessed, and the new assessment formula
“produced just enough income to meet the city’s projected revenue needs”).
Therefore, we conclude that the record before us establishes that the city’s normal
practice is to revalue and reassess properties upon expiration of a tax stabilization
agreement.
In addition, we hold that the trial justice’s conclusion that the 2013 revaluation
was discriminatory is clearly erroneous. In his decision, the trial justice found that
“[t]he 2013 Revaluation was discriminatory because all the procedural and
substantive benefits of a revaluation afforded to all the [c]ity’s taxpayers were not
afforded the [p]etitioners in the 2013 Revaluation.” Certainly, taxpayers are
afforded certain notice requirements under our state’s scheme for local taxation.
However, our review of the record reveals that the city met the statutory notice
requirements for the 2013 revaluation.
7
The trial justice’s decision indicates that the court was provided “with a copy of
the [c]ity’s certified tax rolls[.]” Unfortunately, the record before this Court includes
only a summary of the property assessments and total taxes for the city; specific
parcel-level data is only reflected for The 903. Thus, the record does not include the
city’s certified tax rolls as referenced by the trial justice. Accordingly, we cannot
discern whether the city increased the assessed values of any other properties from
tax year 2013 to tax year 2014.
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First, § 44-5-15 requires the municipality to post prior notice of the assessment
in public places and advertise the assessment in a newspaper of statewide circulation.
See, e.g., Balmuth, 182 A.3d at 581 (“Before assessing any valuations * * * the tax
assessors of all the cities and towns must comply with the notice provisions set forth
in § 44-5-15.”). Second, the municipality must notify the taxpayer of the amount to
be taxed, pursuant to G.L. 1956 § 44-7-7. Here, the record reflects that the city
complied in publishing a notice of assessment for tax years 2014 and 2015;
petitioners did not dispute the sufficiency of these notices. In addition, the city sent
petitioners bills for tax years 2014 and 2015 informing them of the tax amounts. The
petitioners admitted that the city sent tax bills to the taxpayer-owners of The 903 for
tax years 2014 and 2015. Thus, because the city complied with the statutory notice
provisions, we conclude that the trial justice clearly erred when he found that
petitioners were denied “all the procedural and substantive benefits of a
revaluation[.]”
The petitioners enjoyed the benefit of the TSA and made stabilized tax
payments to the city for ten years. Upon the expiration of the TSA, the city was
entitled, and indeed required, to tax the property at its full and fair cash value,
provided that the city complied with the requisite statutory notice requirements for
assessment and the 2013 revaluation was not selective. There is not a scintilla of
evidence in the record before this Court to suggest that the city singled out the
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property for revaluation. The petitioners presented no evidence that other properties
whose tax stabilization agreements expired in mid-cycle were not revalued upon
expiration of the agreements. It was the petitioners’ burden to prove that the 2013
revaluation was selective, and the trial justice overlooked and misconceived material
evidence, and was otherwise clearly wrong, when he found that they met this burden.
Conclusion
For the foregoing reasons, we reverse the judgments of the Superior Court.
The records in this case are remanded to the Superior Court with instructions to enter
judgments in favor of the city on the petitions for relief from assessment.
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STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903
OPINION COVER SHEET
Athena Providence Place et al. v. Elyse M. Pare, in
her capacity as Tax Assessor for the City of
Providence, et al.
Title of Case
Athena Providence Place et al. v. Elyse M. Pare, in
her capacity as Tax Assessor for the City of
Providence, et al.
No. 2019-247-Appeal.
(PC 15-5520)
Case Number
No. 2019-248-Appeal.
(PC 16-729)
Date Opinion Filed November 10, 2021
Suttell, C.J., Goldberg, Robinson, Lynch Prata, and
Justices
Long, JJ.
Written By Associate Justice Erin Lynch Prata
Source of Appeal Providence County Superior Court
Judicial Officer from Lower Court Associate Justice Richard A. Licht
For Petitioners:
Michael T. Eskey, Esq.
For Respondents:
Attorney(s) on Appeal
Jillian H. Barker, Esq.
Lisa Fries, Esq.
Nicholas P. Poulos, Esq.
SU-CMS-02A (revised June 2020)