JOHN P. TUOHY ET AL.
v.
TOWN OF GROTON ET AL.
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 ...