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Walgreen Eastern Co., Inc. v. Town of West Hartford

Supreme Court of Connecticut

July 24, 2018

WALGREEN EASTERN COMPANY, INC.
v.
TOWN OF WEST HARTFORD

          Argued October 19, 2017

         Procedural History

         Appeal from the decision of the defendant's board of assessment appeals upholding the town assessor's valuation of certain of the plaintiff's real property, brought to the Superior Court in the judicial district of Hartford and transferred to the judicial district of New Britain, where the case was tried to the court, Schuman, J.; judgment for the defendant in part and for the plaintiff in part, from which the plaintiff appealed. Affirmed.

          Elliott B. Pollack, with whom, on the brief, was Tiffany K. Spinella, for the appellant (plaintiff).

          Patrick G. Alair, corporation counsel, for the appellee (defendant).

          Kari L. Olson and Proloy K. Das filed a brief for the Connecticut Conference of Municipalities as amicus curiae.

          Palmer, Robinson, D'Auria, Prescott and Mullins, Js. [*]

          OPINION

          MULLINS, J.

         The plaintiff, Walgreen Eastern Company, Inc., appeals from the judgment of the trial court denying, in part, its appeal from the decision of the Board of Assessment Appeals (board) of the defendant, the town of West Hartford (town). The trial court concluded that the plaintiff had established aggrievement under General Statutes § 12-117a[1] because the town overvalued its property. The court then found a new valuation for the subject property and ordered the town to provide the plaintiff with the appropriate reimbursement or credit for any overpayment plus interest. In addition, the trial court also determined that the town's assessment was not manifestly excessive under General Statutes § 12-119.[2]

         In the present appeal, the plaintiff claims that, although the trial court correctly determined that the plaintiff had established aggrievement by showing that the town's valuation of the property was excessive, it incorrectly (1) determined the true and actual value of the subject property, and (2) concluded that the town's valuation of the subject property was not manifestly excessive. We disagree and, accordingly, affirm the judgment of the trial court.

         The following relevant facts and procedural history are set forth in the trial court's memorandum of decision. ‘‘The subject property is a 1.45 acre improved parcel located [at] 940 South Quaker Lane in the town. The property abuts another parcel to the south, with which it was once merged, near the intersection of South Quaker Lane, which is to the west, and New Britain Avenue, which is to the south, in the Elmwood section of the town.

         ‘‘The improvement on the subject property is a 12, 805 square foot building originally constructed in 1949 as a movie theater. In 2003, a developer, Nixon Plainville, LLC, purchased the subject property and the adjoining property to the south for $2, 500, 000, formally subdivided them, and began to convert the building on the subject property into a Walgreens pharmacy. In appraisal terms, the property was of the ‘build to suit' type.

         ‘‘The developer entered into a ‘triple net' or ‘NNN' lease with the plaintiff under which the plaintiff was responsible for the payment of all insurance, maintenance, and property tax expenses. The lease commenced in December, 2004, but the pharmacy did not open until 2006. The lease runs for seventy-five years, but the plaintiff can terminate it after twenty-five years and every five years thereafter. The rent is fixed at $430, 000 per year for the term of the lease plus a small percentage of the gross sales. This rate converts to $33.58 per square foot.

         ‘‘In 2006, the developer sold the subject property to Maple West Hartford, LLC, which has been described as an investor, for $6, 718, 750. There have been no further sales of the property.

         ‘‘The pharmacy now has parking space for approximately [seventy-five] cars. Some of the parking space is shared with Webster Bank, which occupies the property to the south. There is no drive-up service window for the pharmacy. Although the pharmacy is not on the exact corner of South Quaker Lane and New Britain Avenue, it is near the corner. There is a full, two-way auto[mobile] access from and to South Quaker Lane. From New Britain Avenue, cars going westbound can make a right turn into a driveway, marked by a Wal-greens sign, that goes behind the bank on the corner and into the [plaintiff's] parking lot.

         ‘‘The pharmacy is visible from the road from all directions except westbound. The westbound view from New Britain Avenue is blocked by the bank and a tree. The intersection of South Quaker Lane and New Britain Avenue has high traffic volume and has a traffic light.''

         In accordance with the town's statutory obligation; see General Statutes § 12-62 (b) (1);[3] the assessor conducted a town wide revaluation of all real estate for the grand list of October 1, 2011, and determined that the subject property had a fair market value of $5, 020, 000 and an assessment value of $3, 514, 000. The plaintiff challenged the valuation and appealed to the board pursuant to General Statutes § 12-111 (a). The board upheld the assessor's valuation, and the plaintiff appealed to the Superior Court pursuant to §§ 12-117a and 12-119.

         In its appeal to the Superior Court, the plaintiff's complaint contained two separate counts. In count one, the plaintiff alleged, pursuant to § 12-117a, that it was aggrieved by the actions of the board because the assessor's valuation of the property exceeded 70 percent of its true and actual value on the assessment date. In count two, the plaintiff alleged, pursuant to § 12-119, that the valuation was ‘‘manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of the property.'' The plaintiff thus sought a reduction in the amount of the tax and the valuation on which it had been based.

         At trial, the plaintiff presented the testimony of two appraisers, Anthony Barna and Richard Michaud, who both valued the property at $3 million. The town presented the testimony of two appraisers: John Leary, who performed the revaluation for the town, and Christopher Kerin, who valued the property at $4, 900, 000. The trial court credited Kerin's testimony and determined that the true and actual value of the property was $4, 900, 000.[4] As a result, the court concluded that the assessor had overvalued the property by assigning it a true and actual value of $5, 020, 000. Accordingly, because the true and actual value was less than the value assigned by the assessor, the court found that the plaintiff had satisfied its burden of proving aggrievement, and, therefore, the court found in favor of the plaintiff on count one. Addressing count two, the trial court found that the plaintiff had not met its burden of establishing that the assessment was manifestly excessive under § 12-119. The court then rendered judgment in favor of the plaintiff on its § 12-117a count and in favor of the town on the plaintiff's § 12-119 count. The plaintiff appealed.[5]

         I

         In its appeal from the § 12-117a count, the plaintiff claims that, although the trial court correctly concluded that it had established aggrievement by proving that the assessor had overvalued its property, the relief awarded was insufficient because the trial court improperly determined the true and actual value of the subject property. Specifically, the plaintiff alleges that the trial court improperly (1) applied General Statutes § 12-63b (b), (2) valued the leased fee interest, rather than the fee simple interest, and (3) selected too narrow a highest and best use for the property.[6] We disagree.

         We begin with the principles governing municipal tax appeals. ‘‘Section 12-117a, which allows taxpayers to appeal the decisions of municipal boards of [assessment appeals] to the Superior Court, provide[s] a method by which an owner of property may directly call in question the valuation placed by assessors upon his property. . . . In a § 12-117a appeal, the trial court performs a two step function. The burden, in the first instance, is upon the plaintiff to show that he has, in fact, been aggrieved by the action of the board in that his property has been overassessed. . . . In this regard, [m]ere overvaluation is sufficient to justify redress under [§ 12-117a], and the court is not limited to a review of whether an assessment has been unreasonable or discriminatory or has resulted in substantial overvaluation. . . . Whether a property has been overvalued for tax assessment purposes is a question of fact for the trier. . . . The trier arrives at his own conclusions as to the value of land by weighing the opinion of the appraisers, the claims of the parties in light of all the circumstances in evidence bearing on value, and his own general knowledge of the elements going to establish value including his own view of the property. . . .

         ‘‘Only after the court determines that the taxpayer has met his burden of proving that the assessor's valuation was excessive and that the refusal of the board of [assessment appeals] to alter the assessment was improper, however, may the court then proceed to the second step in a § 12-117a appeal and exercise its equitable power to grant such relief as to justice and equity appertains . . . . If a taxpayer is found to be aggrieved by the decision of the board of [assessment appeals], the court tries the matter de novo and the ultimate question is the ascertainment of the true and actual value of the applicant's property.'' (Citations omitted; internal quotation marks omitted.) Konover v. West Hartford, 242 Conn. 727, 734-35, 699 A.2d 158 (1997).

         In the present case, the trial court found that the plaintiff met its burden of proving that the assessor's valuation was excessive and that the board's refusal to alter the assessment was improper. The court then proceeded to the second step in the § 12-117a claim, namely, determining the appropriate relief based on the true and actual value of the applicant's property. The plaintiff now challenges the trial court's judgment on the ground that the trial court's finding regarding the true and actual value of the subject property was excessive.

         ‘‘In a tax appeal taken from the trial court to the Appellate Court or to this court, the question of overvaluation usually is a factual one subject to the clearly erroneous standard of review. . . . Under this deferential standard, [w]e do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached. Rather, we focus on the conclusion of the trial court, as well as the method by which it arrived at that conclusion, to determine whether it is legally correct and factually supported. . . . Additionally, [i]t is well established that [i]n a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony. . . . The credibility and the weight of expert testimony is judged by the same standard, and the trial court is privileged to adopt whatever testimony [it] reasonably believes to be credible. . . . On appeal, we do not retry the facts or pass on the credibility of witnesses. . . . Simply put, a trial court is afforded wide discretion in making factual findings and may properly render judgment for a town based solely upon its finding that the method of valuation espoused by a taxpayer's appraiser is unpersuasive. . . .

         ‘‘Conversely, we review de novo a trial court's decision of law. [W]hen a tax appeal . . . raises a claim that challenges the propriety of a particular appraisal method in light of a generally applicable rule of law, our review of the trial court's determination whether to apply the rule is plenary. . . . To be sure, if the trial court rejects a method of appraisal because it determined that the appraiser's calculations were incorrect or based on a flawed formula in that case, or because it determined that an appraisal method was inappropriate for the particular piece of property, that decision is reviewed under the abuse of discretion standard. . . . Only when the trial court rejects a method of appraisal as a matter of law will we exercise plenary review. . . .

         ‘‘Thus, the starting point in any tax appeal taken from the Superior Court, including the present appeal, 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.'' (Citations omitted; emphasis omitted; footnote omitted; internal quotation marks omitted.) Redding Life Care, LLC v. Redding, 308 Conn. 87, 100-102, 61 A.3d 461 (2013).

         A

         The plaintiff first claims that the trial court did not properly apply § 12-63b (b)[7] in valuing the subject property because the court considered the actual rental income under the lease (contract rent) in calculating the true and actual value of the property. Specifically, the plaintiff argues that the trial court improperly rejected the appraisals submitted by the plaintiff's appraisers because they did not include consideration of the contract rent. The plaintiff asserts that the language of§ 12-63b (b) does not mandate that the assessor consider contract rents, and that contract rent in the present case was not relevant to establish the true and actual value of the subject property in 2011 because the lease had been negotiated in 2003. Furthermore, the plaintiff asserts that the trial court's reliance on First Bethel Associates v. Bethel, 231 Conn. 731, 651 A.2d 1279 (1995), is misplaced because the holding of First Bethel Associates subsequently was modified or overturned. We reject the plaintiff's claim regarding the application of § 12-63b (b).

         ‘‘[W]hen a tax appeal, like the present one, raises a claim that challenges the propriety of a particular appraisal method in light of a generally applicable rule of law, our review of the trial court's determination whether to apply the rule is plenary. See Sheridan v. Killingly, 278 Conn. 252, 260, 897 A.2d 90 (2006) (applying plenary review to claim that trial court improperly rejected assessor's attribution of value of leasehold interest to lessor's property); see also Torres v. Waterbury, 249 Conn. 110, 118, 733 A.2d 817 (1999) (legal ...


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