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Fiske v. Town of Westerly Board of Assessment Review

Superior Court of Rhode Island

June 21, 2017


         Washington County Superior Court

          For Plaintiff: Kelly M. Fracassa, Esq. John J. Kupa, Esq.

          For Defendant: John C. Levanti, Esq. Matthew T. Oliverio, Esq.


          K. RODGERS, J.

         This matter returns to the Superior Court on three consolidated appeals from decisions of the Town of Westerly's Board of Assessment Review (the Board). The Appellant, Marsha Fiske (Appellant), owns real estate in the Town of Westerly (the Town) that is classified as farmland pursuant to the Rhode Island Farm, Forest and Open Space (FFOS) Act, codified at G.L. 1956 §§ 44-27-1 et seq. (the Act). The thrust of Appellant's various appeals to this Court challenge the tax assessment attributed to the portion of her real estate that is not designated as farmland.

         As discussed in a prior decision of this Court, Fiske v. Town of Westerly Board of Tax Assessment, No. WC 2006-0246, 2009 WL 3552788 (R.I. Super. Oct. 28, 2009) (Thompson, J.) (Fiske I), as well as herein, this Court has jurisdiction over this matter pursuant to § 44-27-6. For the reasons that follow, this Court modifies the Board's decisions on two of the three appeals and remands the third appeal to the Board for further proceedings consistent with this Decision.



         Appellant purchased the subject property in 2002, which is located at 55 Watch Hill Road and designated as Tax Assessor's Plat 127, Lot 2. The lot consists of approximately 435, 000 square feet, or roughly ten acres, that fronts Watch Hill Road to the east and is bordered on the west by the Pawcatuck River.

         The property contains a three-story residence originally built in 1790 which has been renovated as recently as 2005; the residence measures approximately 5000 square feet. With the exception of a six-by-fourteen foot kitchen expansion with no corresponding foundation underneath, the original footprint of the residence has remained unchanged. The residence lies roughly 300 to 400 feet inland from the Pawcatuck River and is separated from the water by a heavy stand of trees and a large section of grassland. The heavy tree stand limits views of the river from the residence in the spring, summer and fall months due to foliage.

         From 2002 to 2005, Appellant and her husband Eric Fiske (Mr. Fiske or, together with Appellant, the Fiskes) undertook certain interior and exterior renovations to the house, including replacing siding, windows, doors, roofing materials and decking, at a cost of approximately $400, 000. See Tr. 8-10, 146, Dec. 17, 2009. A swimming pool was constructed on the property in 2004 in the general vicinity of the residence. There is a detached garage and a small outbuilding located on the property.

         The shoreline of Appellant's property along the Pawcatuck River is rocky and provides limited recreational value. The water in that area of the Pawcatuck River is shallow and of poor quality, thus prohibiting fishing, bathing and other recreational activities such as shellfishing. The shoreline is rocky and sloped, restricting access to the water. However, Appellant owns a dock on the shore at the southern tip of the property, which is approximately 800 to 1000 feet from the residence, allowing access to deep sea commercial fishing. No recreational fishing takes place off the dock. The dock is shared with a neighbor who has an easement right to its use.

         Farming activity occurs on the property, including pasturing sheep, maintaining an apiary for honey bees, harvesting lumber, and growing a stand of Christmas trees. See Tr. 24, 26-27, 58, Dec. 17, 2009.

         Since June 2, 2004, the property has been designated by the Department of Environmental Management (DEM) as farmland under the FFOS Act. In accordance with § 44-27-3(c)(1), the Town thereafter classified Appellant's property as farmland for the 2004 tax year, effectively reducing the tax on 9.32 acres of the Appellant's 9.92 acres of property. The issues before this Court do not involve the designation of Appellant's property as farmland, but rather the amount of the tax assessments in various calendar years applied to the remainder of Appellant's property.


         Travel of the Case


         The 2004 Assessment

         As of December 31, 2003, Charles E. Vacca (Vacca), Westerly's Tax Assessor, assessed the total property value at $2, 212, 300, valuing the land at $1, 513, 900 and the buildings at $698, 400. For tax year 2004, [1] based upon the FFOS classification, Vacca adjusted the property assessment. Specifically, a 30, 000 square foot area around the house was carved out pursuant to DEM regulations implementing the Act's requirement that a "house site" be designated and valued separately from the farmland.[2] Vacca valued the 30, 000 square foot house site at $1, 225, 800, retained the $698, 400 assessment for the buildings, and valued the remaining 9.32 acres of farmland at $3300, for a total assessment of $1, 927, 500. The building valuation was determined by an adjusted replacement cost base rate of between $154.19 and $192.76 per square foot. According to Vacca, Appellant received a tax valuation benefit of $284, 800 for tax year 2004 by classifying the property as farmland under the FFOS Act.

         Appellant appealed the 2004 assessment of the house site and buildings, first to Vacca on October 27, 2005, and then to the Board on December 29, 2005, arguing that the house site and the buildings were taxed disproportionately compared to neighboring properties. Vacca refused to make any change to the 2004 assessment. When the Fiskes appeared in front of the Board, they were unrepresented by counsel and submitted several documents to support their appeal, including the tax cards of thirteen properties that the Fiskes believed were comparable sites, letters of correspondence between the Fiskes and the Town's tax personnel, and maps showing the location of all other FFOS properties in Westerly. Each of the other FFOS properties identified by the Fiskes had building assessments based on an $84 per square foot unadjusted replacement cost base rate.

         On February 16, 2006, the Board issued its decision, fixing the value of Appellant's house site at $1, 001, 400[3] and the value of the buildings at $716, 100. See Fiske I, at *1.


         Fiske I

         Unsatisfied with the Board's February 16, 2006 decision, on April 19, 2006, Appellant filed an appeal to this Court, Thompson, J. presiding. See Complaint, Fiske v. Town of Westerly Board of Tax Assessment, No. WC 2006-0246.

         The parties requested and were permitted to supplement the record on appeal to this Court.[4] Appellant filed a formal appraisal by Raymond Lueder (Lueder), who offered an assessment of a 49, 199 square foot undeveloped lot to serve as the house site. Fiske I, at *2. Lueder's appraisal reviewed five comparable sales that all fell within a range of $230, 000 to $310, 000, including one comparable sale of a property "with a distant or limited water view and because it was located relative (sic) far away from the beaches." Id. Lueder ultimately concluded, after making adjustments for location, view, access to public utilities, etc., that the proper appraisal for the Appellant's 49, 199 square foot house site was $275, 000. Id.

         In response, the Board submitted materials including a "Statement of Fact" which purported to represent the facts and rationales upon which Vacca relied in making his determination. Id. Vacca explained in the "Statement of Fact" that he interpreted the law to require "'the assessor to assess the base lot[5] at a fair and full cash value, excluding land used for farming purposes, . . . [and] to recognize that the amenities of the base lot still exist; extensive water views and access to the river for boating and bathing.'" Id. (quoting Statement of Fact at 1). Vacca further stated that he "did not define a [house site] 'by a metes and bounds description . . . but rather by its inherent rights similar to all other waterfront properties. The open space designation does not preclude the owner from enjoying the extensive water views, access to deep water for bathing and boating, or the privacy that nearly ten acres affords.'" Id. (citing Statement of Fact at 2). Vacca offered that he valued Appellant's house site using the same guidelines as another FFOS-designated, waterfront property located at 7 Niantic Avenue, to which he assigned the base lot in excess of $7, 500, 000. Id. The Board also asserted that Appellant had incorrectly brought the appeal under the FFOS appellate procedure of § 44-27-6, when it should have been brought under § 44-5-26, the general tax appeal statute, because the Appellant only challenged the house-site portion of the assessment and not the propriety of the assessment of the 9.32 acres of farmland.



         As a threshold matter, the Court determined that Appellant's appeal from the Board's February 16, 2006 decision was properly brought pursuant § 44-27-6, which provides for a ninety-day appeal period under the FFOS Act, and rejected the Board's argument that the appeal was required to be filed within thirty days under § 44-5-26(b).[6] Fiske I, at *5. The Fiske I Court ruled as follows:

"Were the Court to accept the Appellee's interpretation of § 44-27-6 as allowing appeals of a joint assessment only as to the FFOS portion of the assessment, the result would be a procedural quagmire. Appellants seeking to challenge a single assessment would be required to file two separate appeals, one within thirty days of the board's decision, and a second within ninety days. These appeals would then proceed, one based on the de novo trial type hearing provided for in § 44-5-29 ("the petition is subject to all provisions of law as to time for pleading, assignment day, and all other incidents applicable to an action at law originally commenced in the superior court"), including even the possibility of a jury under § 44-5-30. Meanwhile, the twin appeal would proceed through the Superior Court under the traditional judicial review standard applicable to administrative appeals and limited to the evidence contained in the record under § 44-27-6. However, it is only through the legal fiction created by the FFOS that the farmland exists independently from the house-site, for all other purposes, the farmland and the house-site are one parcel. By acquiring an FFOS designation, a homeowner forfeits the right to develop the FFOS designated land; and the owner cannot sell the house-site without the farmland or vice-versa. Although the farmland and the house-site may be assessed separately, the lot nevertheless remains one legally recognized parcel. Further, a twin appeal procedure requires the owner of one parcel of land to potentially bear the burden and expense associated with appealing two tax assessments. Requiring an owner to proceed with two separate tax appeals from the assessment of one parcel places an undue burden on the owner, and the Court will not ascribe such a nonsensical intent to our General Assembly. When construing statutes, this Court will not interpret statutory schemes in such a manner as to reach an absurd result. See Peck v. Jonathan Michael Bldrs., Inc., 940 A.2d 640, 643 (R.I. 2008)." Id. at * 4.

         The Court concluded that when property which includes "both FFOS and non-FFOS designations is assessed simultaneously, appeals seeking to challenge that assessment are properly brought under § 44-27-6." Id. at *5.


         Sufficiency of Evidence

         The Court in Fiske I additionally found that the Board failed to present the Court with competent evidence to establish the procedures and methodology upon which Vacca made his decision, and that the Statement of Fact merely contained "general statements of the law governing tax assessors coupled with general principles of assessment." Id. at *6. On the other hand, this Court held that Appellant presented substantial evidence upon which her requested relief could be granted, including numerous tax cards of properties she believed to be comparable, maps and charts of the locations of those properties, and substantial evidence that her property was assessed far in excess of those properties. Id. at *7.


         Directive on Remand

         Finally, after engaging in a lengthy analysis of the FFOS Act and tax assessments, see id. at *7-10, the Court held in Fiske I that Vacca and the Board made an error of law when they ignored the FFOS classification of the land surrounding the house site. The Court concluded that the Board's approach entirely contradicted the purposes and language of the Act, which was to provide lower tax assessments in order to encourage the preservation of farm, forest and open space lands. Id. at *10. Thus, the Court ordered the case to be remanded to the Board to determine a new assessment with specific directions that the Board may not categorize the house site as waterfront property, that it "may consider the property's sweeping water views, " and that "the best manner to conceive of the Fiskes' ownership of the farmland with river frontage is as an easement for water access." Id. at *11.


         Hearing and Decision on Remand

         The Board held a hearing on remand on December 17, 2009, at which Mr. Fiske again testified on behalf of Appellant. Mr. Fiske presented a list summarizing the assessed land values of twelve 30, 000 square foot house sites along Watch Hill Road, ranging from $101, 400 to $210, 600 as of 2003. (WC 2010-0305 Appellant's App. at 67.) On the issue of the buildings assessment, Mr. Fiske submitted a document summarizing adjusted building base rates for eleven neighboring waterfront properties ranging from $101.61 to $132.95 per square foot. (WC 2010-0305 Appellant's App. at 77.) Mr. Fiske also presented his homeowner's insurance policy in effect from May 5, 2003 to May 5, 2004, which set a guaranteed house replacement cost at $583, 918 with a replacement value estimated at $139.03 per square foot. (WC 2010-0305 Appellant's App. at 71.)

         With regard to the house site assessment, Appellant presented the testimony and report of a local real estate broker and appraiser, Stephen O. McAndrew (McAndrew). McAndrew's appraisal determined the value of a 30, 000 square foot house site on Appellant's property in 2003 was $285, 000, based upon three comparable sales in 2003 with corresponding adjustments as noted. (WC 2010-0305 Appellant's App. at 108.) McAndrew's appraisal took into consideration the Court's directive in Fiske I that the house site was to be considered as an interior rather than a waterfront site, but also incorporated the property's waterfront-like attributes; namely, its waterview and dock access. He visited the property and testified that "[i]t certainly has a view, but this is not an expansive view by any stretch of the imagination." Tr. 100, Dec. 17, 2009. McAndrew reviewed the April 2003 sale of a property located at 43 Watch Hill Road that had many similar qualities to that of the Appellant's property. The property at 43 Watch Hill Road has a water view, water access via a right-of-way to Mastuxet Cove on the Pawcatuck River where the owners keep a boat, and is situated a few hundred feet northeast of the Appellant's property. Vacca had assessed a 30, 000 square foot house site at 43 Watch Hill Road at only $183, 600. Id. at 102. Appellant's house site was assessed far in excess of each of the comparable sites identified by McAndrew and in excess of the 30, 000 square foot house site at 43 Watch Hill Road.

         McAndrew also considered other properties in the area, testifying that many of them contained strips of land granting access to docks, each of which granted "access far superior to the subject's access" and "views that are far superior." Id. at 103. While not using these properties as "comparable sales" because they were not the subject of a recent sales transaction, McAndrew commented that the assessments of each demonstrated that water view and water access via these strips of land add between 8% and 14% to the value of the land. He concluded that it was reasonable, then, that Appellant's house site assessment would reflect a 10% increase in value based upon the water view and dock access. By comparison, his appraisal of $285, 000 for Appellant's house site far exceeds a 10% increase in value from the $183, 000 house site assessment at 43 Watch Hill Road. Id. at 102-104.

         Vacca submitted his own appraisal that expressly rejected the directive on remand to consider the property as not being waterfront but as having "an easement for water access." See Fiske I, at *11. Vacca again decided to determine the assessment based on the highest and best use of the entire property, calculating the market value of the 30, 000 square foot house site to be $998, 000 as of 2003. In his appraisal, Vacca noted that he considered the use as a residential home surrounded by farmland, but that the property could be marketed as waterfront property "with an inground pool, detached garage, deep water dock, spectacular views, and water access." (WC 2010-0305 Appellant's App. at 141.) Vacca went on to remark that, considering the best use of the property, a potential buyer could remove the property from the FFOS program and further subdivide the property into additional building lots. Specifically, Vacca considered that "[t]he subject's inclusion in the [FFOS] Program in no way diminishes the appeal of the property to the market for buyers of waterfront homes and the related boating, bathing, and view amenities." Id. Vacca utilized five sales from January 1, 2001 to July 30, 2004, and the corresponding assessments of the 30, 000 square foot house sites on each, to conclude that Appellant's house site is valued at between $960, 000 and $1, 195, 000." (WC 2010-0305 Appellant's App. at 152.) Additionally, he relied upon five properties on Watch Hill Road, and the corresponding assessments of the 30, 000 square foot house sites on each, to fine tune his assessment of Appellant's house site at $998, 000. (WC 2010-0305 Appellant's App. at 152-53.)

         Vacca testified before the Board that he did not think the Legislators intended to draw a 30, 000 square foot lot that did not encompass things that might have fallen within the farmland. Tr. 65-66, Dec. 17, 2009. He rejected the notion that, as Tax Assessor, he was required to draw circles or squares in a piece of property to identify what is included in a 30, 000 square foot house site. Id. Finally, when asked whether he appraised the property as having an easement for water access, Vacca responded, "I would not have appraised it as an easement. They own the property . . . [the Fiskes] have every right to use their property as they see fit. They can remove that property from Farm, Forest and Open Space in a heartbeat." Id. at 142-144.

         In December of 2009, members of the Board viewed the property themselves, determining that the property's water views were powerful and that the water views remained "significant" even in other months of the year. See Mins. of Board Meeting at 2, Mar. 17, 2010; Appellant's App. at 155. The Board thereafter concluded that Vacca's assessment was reasonable and upheld the assessment. Appellant was notified of the Board's decision in a letter dated March 19, 2010. Appellant appealed the decision to this Court on May 7, 2010. (WC 2010-0305.)


         The 2006 Assessment

         Appellant also appealed the $2, 195, 200 assessment as of December 31, 2006, which included a house site assessment of $1, 448, 000. The Board heard that appeal on November 7, 2007, prior to ...

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