Tuohy v. Town of Groton

          Argued November 16, 2018

         Procedural History

         Appeal from tax assessments relating to certain residential property owned by the plaintiffs, brought to the Superior Court in the judicial district of New London, and transferred to the judicial district of New Britain, where the court, Cohn, J., granted the plaintiffs' motion for class certification; thereafter, the case was transferred to the judicial district of Hartford and tried to the court, Moll, J.; judgment for the defendants, from which the plaintiffs appealed. Affirmed.

          Linda L. Morkan, with whom was John F.X. Peloso, Jr., for the appellants (plaintiffs).

          Eileen Duggan, for the appellees (defendants).

          Robinson, C. J., and Palmer, McDonald, D'Auria, Mullins, Kahn and Ecker, Js. ^[*]

          OPINION

          ROBINSON, C.J.

         In this appeal, we consider whether a municipality's assessor may apply a uniform adjustment factor to a neighborhood's appraised property values during the mass appraisal process for the revaluation of real property pursuant to General Statutes § 12-62 (b), ^[1] as a direct equalization measure in order to ensure that neighborhood is not undertaxed relative to others in the municipality. The plaintiffs, John P. Tuohy and numerous other owners of real property located in the Groton Long Point neighborhood, ^[2] brought this class action tax appeal pursuant to General Statutes § 12-119^[3] against the defendants, the town of Groton (town) and Mary Gardner, its assessor, challenging the assessed value of their properties following the revaluation conducted by the town for its October 1, 2011 grand list (2011 revaluation). The plaintiffs now appeal^[4] from the judgment in favor of the defendants, rendered after a trial to the court, upholding the legality of those assessments. On appeal, the plaintiffs claim that the trial court incorrectly determined that their assessments were not manifestly excessive because the defendants violated § 12-62 and numerous provisions of the Regulations of Connecticut State Agencies (regulations) promulgated by the state Office of Policy and Management (OPM); see Regs., Conn. State Agencies § 12-62i-1 et seq.; when they applied a flat, undifferentiated adjustment factor that increased the assessed value of all properties in Groton Long Point by 35 percent without individualized consideration of the unique characteristics of each property. We conclude that the defendants properly applied an adjustment factor as a direct equalization measure in connection with an assessment to sales ratio study conducted pursuant to various standards promulgated by the International Association of Assessing Officers (international association) in order to ensure that Groton Long Point bore its fair share of the town's municipal tax burden relative to the town's other neighborhoods. Accordingly, we affirm the judgment of the trial court.

         The record reveals the following facts, as comprehensively found by the trial court, Moll, J., ^[5] and procedural history. ‘‘The plaintiffs are residential property owners in the Groton Long Point . . . neighborhood^[6] of [the town], who, on behalf of themselves and the certified class, ^[7] are challenging the [2011 revaluation]. [Groton Long Point] is a planned community and comprises approximately 600 properties. When someone owns property in [Groton Long Point], he or she pays into an association and has rights to use certain amenities within the community, including the beach, docks, piers, and association buildings, which include, among other things, a restaurant. In addition, parking in [Groton Long Point] requires a permit.

         ‘‘The 2011 revaluation was a mass appraisal, defined as ‘the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing. Methodology that is acceptable shall include, but is not limited to, automated valuation models, adaptive estimation procedure, multiple regression analysis, statistical analysis and other generally accepted techniques . . . .' Regs., Conn. State Agencies § 12-62i-1 (10). The 2011 revaluation was overseen by . . . Gardner . . . whose position as the town assessor began in June, 2011. Gardner first worked in the town's assessor office in 1986; she became a certified assessor in 1989. The 2011 revaluation was the first revaluation that Gardner conducted as an assessor.

         ‘‘To assist it with the 2011 revaluation, the town hired Tyler Technologies (Tyler), a mass appraisal vendor certified by the state to do revaluations. [See General Statutes § 12-62 (e)]. The project supervisor from Tyler with respect to the 2011 revaluation was Debra Christy . . . who also is certified to do revaluations. Christy has been employed with Tyler, although not continuously, since 1980 and has been involved with revaluations in the state of Connecticut since around 1997. Christy had some responsibility in the 2006 revaluation of Groton but was not the manager. In the 2011 revaluation, Christy was responsible for the analysis for the residential property class.

         ‘‘The 2011 revaluation commenced in earnest in April, 2010, at which time Gardner was the assistant assessor for the town. In April, 2010, the town issued a press release informing the public that a revaluation would be underway and that data collectors would be going door to door to measure the exteriors of all properties and to attempt interior inspection, if allowed. Tyler conducted its data collection using data from the 2006 revaluation and updating it. Because the 2011 revaluation was a full measure revaluation, Tyler [employees] knocked on every door and did an exterior measurement of every property. To the extent access to the interior was not granted, Tyler sent the property owner a callback letter to inquire whether the owner would make a scheduled appointment for an interior inspection. Tyler then prepared and distributed data mailers for each property; such data mailers reflected the property's physical characteristics that would be used in the revaluation. Property owners were asked to contact Tyler if any information required correction. Any changes resulting from the data mailer process were inputted into the Computer Assisted Mass. Appraisal (CAMA) software system, which the town uses for its revaluations to generate property values. CAMA is certified by the state of Connecticut and is an example of an ‘automated valuation model,' as that phrase is used in § 12-62i-1 (10) [of the regulations], which sets forth the definition of ‘[m]ass appraisal.' In CAMA, with respect to each property, a value is assigned to the land, ^[8] and a value is assigned to any improvements or structures using the cost approach (i.e., the cost of replacement with an adjustment for depreciation). The improvements value comprises a dwelling value and an outbuilding value. One arrives at total value by adding land value and improvements value.

         ‘‘Tyler then performed a prereview, which involved producing all of the property record cards that were in the system and having a certified field person go out to each property to conduct what Tyler called a ‘windshield prereview check' to ensure that the information on the cards was accurate.

         ‘‘After all data were collected and corrected during the eighteen-month period following the initial press release, Tyler engaged in preliminary ratio testing, which required compiling a validated sales set (i.e., sales involving actual warranty deeds) using a two year lookback period because of the number of sales.^[9] With respect to [Groton Long Point], the sales set contained eighteen validated, arm's-length transactions. Tyler compared the median of the sales identified for each neighborhood against the median for the total value for the neighborhood. A 1:1 ratio, meaning the medians are equal, would be considered ideal. Tyler performed preliminary ratio testing for each of the thirteen neighborhoods within the town.^[10] The same process was followed in 2006.

         ‘‘On October 31 and November 1, 2011, Christy conducted four computer runs to create values for the [Groton Long Point] residential properties using the CAMA software. The 2006 revaluation had used an adjustment factor of 1.2 (i.e., a 20 percent increase in value) in setting the improvement values of the [Groton Long Point] properties. Those adjustments were already reflected in the CAMA database that Christy used in conducting her analyses. Because an adjustment factor of 1.2 was used in 2006 with respect to [Groton Long Point] improvement values, Christy used that adjustment factor as a starting point. Application of an adjustment factor of 1.2 yielded a median assessment to sales ratio (ASR)^[11] of 88.31 percent for [Groton Long Point]. Christy found this ratio to be outside an acceptable range because it fell under 90 percent.^[12] In this regard, Tyler and the town deemed [Groton Long Point] to be an outlier. Specifically, in reaching this conclusion, Christy relied on the [international association's]^[13] principle that, when looking at the level of assessment, if market value is 100 percent, the [median] ASR should be plus or minus 10 percent around market value. Applying an adjustment factor of 1.4 yielded a median ASR of 95.08 percent. Applying an adjustment factor of 1.4 with a waterfront adjustment yielded a median ASR of 97.56 percent. Finally, application of an adjustment factor of 1.35 yielded a median ASR of 92.03 percent.

         ‘‘Tyler and the town concluded that applying an adjustment factor of 1.35 to the dwelling values within [Groton Long Point] was appropriate and necessary to reach fair market value. Christy reasoned that other variables, including a coefficient of dispersion, fell within a preferred range to reach uniformity. [Tyler did not physically reinspect any of the Groton Long Point properties prior to applying the 1.35 adjustment factor.]^[14]

         ‘‘Christy conducted sales ratio studies with respect to each of the other twelve neighborhoods. Using a 1.0 factor, each neighborhood's median ASR landed above 90 percent (and below 100 percent market value). For each of the other neighborhoods, the resulting median ASRs were as follows:

1010-Center Groton 91.80 percent

1020-City of Groton 92.99 percent

1021-City of Groton-Eastern 96.43 percent

1030-Poquonock Bridge 96.28 percent

1040-Mystic 94.10 percent

1041-Mystic Village 94.37 percent

1050-Noank 95.08 percent

1051-Noank Village 94.69 percent

1060-Old Mystic 96.46 percent

1061-Old Mystic-River Road 95.14 percent

1080-West Pleasant Valley 95.73 ...