Opinion
Civil Action AP-16-0037
04-20-2018
TIBOR KORMENDY and IBOLYA KORMENDY, Plaintiffs, v. TOWN OF KENNEBUNK et al., [1] Defendants,
MEMORANDUM OF DECISION AND ORDER
WAYNE R. DOUGLAS JUSTICE
Tibor and Ibolya Kormendy filed this Rule 80B action seeking review of the Kennebunk Board of Assessment Review's ("Board") November 4, 2016 denial of their tax abatement appeal for the April 1, 2015 assessment date. During the pendency of this appeal plaintiffs also sought judicial review of Board actions on tax abatement requests pertaining to the same property in other years. For the reasons that follow, the court grants the appeal, in part, with respect to the November 4, 2016 denial and remands to the Board for further proceedings; and denies all other requests because they are untimely and the court lacks jurisdiction to hear them.
Background
Plaintiffs own a single-family residence located at 17 Tideview Terrace in the River Bend Woods Subdivision on the Mousam River in Kennebunk, Maine. It is identified as Lot 4 on Tax Map 70 (the "Property"). (Def. Supp. R. 44-45.) Plaintiffs contend that the topography of the Property mandates a lower assessment.
The Town submitted "Defendants' Supplemental Rule 80B Record" (cited herein as "Def. Supp. R.") to complete the record before the court and remedy deficiencies in the record filed by plaintiffs. See Footnote 4, infra.
Plaintiffs first filed an application for tax abatement in the winter of 2015-2016 with the Town Assessor. (Def. Supp. R. 77.) The Assessor denied the application by letter on April 20, 2016. (Def. Supp. R, 77.) Plaintiffs appealed this decision to the Board on June 14 of the same year, seeking a reduction in the assessed value of the Property from $372,800 to $264,121. (Def. Supp. R. 2, 78, 85.) Plaintiffs included an appraisal done by Priority Appraisal USA, LLC that valued the Property at $375,000 as of August 24, 2012. (Def. Supp. R. 8-24.)
Hearing on plaintiffs' appeal was originally scheduled for August 2, 2016 but the Board sought to continue the hearing because its secretary and other staff were on medical leave. (Def. Supp. R. 26.) Mr, Kormendy consented to extend the time for a hearing until September 30, 2016. (Def. Supp. R. 28-29.) Mr. Kormendy inquired by email on September 9, 2016 "if the postponed hearing could be now scheduled?" (Def, Supp. R. 29). The Board secretary notified Mr. Kormendy by email on September 20, 2016 to inform him that a hearing had been re-scheduled for October 18, 2016; and the town believes he apparently responded on September 27, 2017 that he was "not available" to attend a meeting on that date. (Def. Supp. R. 82.) He had also emailed a revised application to the Board the previous day "for our pending B.A.R. process." (Def, Supp. R. 30-35.) The Board scheduled a hearing for November 1, 2016. (Def. Supp. R, 82.) Notice of the November lat hearing date was sent to Kormendy on September 29, 2016. (Def. Supp. R. 36-41.)
Mr. Kormendy disputes this characterization. At the November 1, 2016 hearing he stated: "[I] said it was not acceptable, because it was past the deadline. . . . [T]hey have to follow the rules." (Def. Supp. R. 82.)
Plaintiffs did not respond to this notice. (Def. Supp. R. 82.) Instead, they filed the instant action for governmental review on October 12, 2016, providing a copy of the appeal to the Town Clerk. Id. By an October 26, 2016 email, Mr. Kormendy notified the Board that he believed the Board lacked jurisdiction over his abatement appeal. (Def. Supp. R. 43.) The Board responded to this email on October 27, 2016, stating that it retained jurisdiction and that the hearing was still scheduled for November 1, 2016. Id.
The Board went forward with the November 1, 2016 hearing. (R. 82.) Mr. Kormendy appeared, presented a copy of a revised application, objected to the Board conducting the hearing, and then left because he "did not want to jeopardize his court action." (Def. Supp, R. 76-80, 82-84.) The Board reviewed the written submissions from plaintiffs and the Town Assessor as well as hear oral testimony from the Assessor. (Def. Supp. R. 44-75, 85-89.)
The Assessor testified about recent sales and listings supporting the value of the Property as assessed. (Def. Supp. R. 88.) He addressed plaintiffs' argument regarding the topography of the Property and testified that in dealing with small properties abutting waterways it is the site location that gives the land value and not its slope towards the water. Id. He testified that the appraisal performed by Priority Appraisal USA, LLC valuing the Property at $375,000 was in line with the Property's $372,800 assessment. Id. The Assessor testified about the Town's assessment process, explaining use of the town-wide revaluation performed for the April 1, 2003 assessment date as the basis for the Town's current assessments and the changes that resulted from a re-designation of river-front property. (Def. Supp. R, 44, 87) The change resulted in an increase of the assessed value of plaintiffs' Property from $341,400 to $372,800 for the April 1, 2013 assessment date, (Def. Supp. R. 44-48, 87.)
From April 1, 2003 until April 1, 2013, the Property was classified as Site Index "8." (Def. Supp, R. 44.) The Index was changed to "R" after a review of recent sales and after several inquiries brought to the Assessor's attention that some of the properties abutting the Mousam River were not properly classified as an "R, " (Def. Supp. R. 44, 50-51, 88.) Plaintiffs' Property was one of the approximately 25 properties that had their Site Index adjusted to "R" for the April 1, 2013 assessment date. (Def. Supp. R. 44, 87-88.) All residential properties on the Lower Mousam and Kennebunk Rivers now have this Site Index. (Def. Supp, R. 52.)
Following deliberations, the Board voted unanimously to deny plaintiffs' appeal and adopt its written decision. (Def. Supp. R. 90.) The decision outlines the basis for the Board's conclusion that plaintiffs failed to prove a substantial overvaluation or that the Property was subjected to unjust discrimination, (Def. Supp. R, 90.} The Board found the Assessor's testimony credible and refused to find error in the assessment of the Property. (Def. Supp. R. 90.)
Plaintiffs filed their brief and the record with the court on November 14, 2016, The Town objected to the record as submitted by plaintiffs and subsequently filed the supplemental record noted above and its opposing memorandum.
The Town objected to the record submitted by plaintiffs as deficient under Rule 80B on numerous grounds, including: (i) omission of evidence considered by the Board: (ii) omission of other content required by Rule 80B, including the Board's November 4, 2016 decision at issue in this appeal; (iii) inclusion of material not considered by the Board, or that had been altered; and (iv) no attempt to secure agreement on the filed record as required. See generally M.R. Civ. P. 80B(e). In light of the disposition of the appeal, however, this issue is moot.
Plaintiffs have made numerous filings with the court, including: a motion for a trial of the facts, a motion for reimbursement for extra costs of service of process, a motion for writ or injunction, a motion to vacate a 2013 tax increase, a motion to order defendant to answer interrogatories, and a motion to suspend processing, all of which were the subject of earlier court orders in the case. Plaintiffs also filed a motion for leave to amend pleadings, which the court granted on July 5, 2017. See Order on Pending Motions & Amended Briefing Schedule at 2.) The issues raised by the amended pleading are addressed in section 2, below.
Discussion
1. November 1, 2016 Hearing
When a board of assessment review "fails to give written notice of its decision within 60 days of the date the application is filed, unless the applicant agrees in writing to further delay, the application is deemed denied and the applicant may appeal to Superior Court as if there had been a written denial." 36 M.R.S.A. § 843(1) (emphasis added). Once an appeal is filed with this court, "the authority of the tribunal to modify its decisions [is terminated] unless the court remands the matter to the tribunal for its further action, thereby reviving its authority." Gagne v. Lewiston, 281 A.2d 579, 583 (Me. 1971). 3 Harvey, Maine Civil Practice, § 80B.2 p.437 (2011 ed.) See also Eastern Maine Medical Center v. Health Care Finance Comm'n, 601 A.2d 99, 101 (Me. 1992); Portland Sand & Gravel, Inc. v. Town of Gray, 663 A.2d 41, 43 (Me. 1995); York Hosp. v. HBS, 2008 ME 165, ¶¶ 33-34, 959 A.2d 67.
The plain language of section 843(1) requires a written agreement to delay a hearing beyond the "deemed denied" date. Here, plaintiffs did not agree "in writing" to delay the hearing beyond September 30, 2016. Even if Mr. Kormendy informed the Board that he was not able to attend an October 18th hearing unilaterally scheduled by the Board (which he denies), that did not constitute a written agreement consenting to a continued hearing. His submission of a revised application on September 26th likewise does not, in itself, constitute an express, written agreement to a hearing beyond September 30 th.
The Town contends that plaintiffs implicitly agreed to the November 1st hearing, and at oral argument referenced Law Court precedent upholding the principle that a property tax review board does not lose jurisdiction if it acts beyond the 60-day "deemed denied" date and the taxpayer has not agreed in writing but rather has implicitly agreed to the review. Close examination of the Law Court precedent as well as the record in this case, however, lead the court to conclude that plaintiffs did not implicitly agree to the November 1st hearing.
Although the Law Court has not addressed this precise issue, it has decided two cases involving jurisdictional arguments baaed on "deemed denied" dates under related tax abatement statutes. Both cases are distinguishable from the instant case.
In Vienna v. Kokemak, 612 A.2d 670 [Me. 1992), 37 taxpayers who owned lake-front property appealed the town assessor's denial of their abatement requests to the county commissioners, who under 36 M.R.S. § 844 conduct de now reviews of abatement determinations by assessors in towns that do not have a local board of assessment review. In Vienna, the county commissioners conducted a full hearing with the consent and participation of the taxpayers; determined that the properties had been over-assessed; and granted increased abatements. Their decision, however, was issued beyond the 60-day statutory period. The Law Court rejected the town's argument on appeal that the commissioners lost jurisdiction simply because they failed to issue their final decision prior to the 60-day "deemed denied" date in section 844.
In International Woolen Co, v. Town. of Sanford, 2003 ME 80, plaintiff appealed the town assessor's denial of its abatement application to the town board of assessment review, and then appealed that board's "deemed denial* to the State Board of Property Tax Review, a legislatively-established, intermediate appellate tribunal that conducts a de nouo review of board of assessment review decisions in cases involving nonresidential properties and other high-value properties. See 36 M.R.S. § 843(1-A). The Law Court rejected the town's argument that the taxpayer's appeal from the initial assessor's decision was late, and thus deprived the State Board of jurisdiction to hear the appeal, because the operative date triggering the appeal period was not the "deemed denied" date but rather a later date expressly provided in the assessor's written decision. Id. at ¶15.
Thus, neither of the above cases involve the same situation as is presented here; and the record in the instant case does not establish that plaintiffs implicitly agreed to the November 1st hearing. Notwithstanding their submission of a revised application on September 26th, plaintiffs filed an appeal to this court on October 12th and emailed the Board on October 26, 2017 to indicate that the Board no longer had jurisdiction. Mr. Kormendy appeared at the November 1st hearing to express the same position. The court concludes that plaintiffs did not agree, explicitly or implicitly, to the November 1sthearing; the Board lacked jurisdiction to conduct the hearing on that date; and the November 4th decision based on that hearing is void.
This does not mean that the Superior Court should act in lieu of the Board and hold a de novo hearing, as Mr. Kormendy now urges. See Rome & Carmel Forest Corp. v. Town of Rome, No. CV-95-188, 1996 Me. Super. LEXIS 11 (Jan. 9, 1996} (Alexander, J.). The Rome & Carmel Forest Corp. case addressed this very question, and this court finds its rationale persuasive. Justice Alexander held that the Superior Court did not have such authority because it:
"would essentially be substituted as the tax policy maker for local government. Such an interpretation would raise serious issues under Article III of the Maine Constitution. Local governmental agencies, first the town, then the County Commissioners, have original jurisdiction to hear and decide tax abatement appeal issues. The judicial function which the Superior Court performs is to review the determinations so made on an appellate basis, not to intervene and substitute its judgment in de novo hearing and decision making. The 'deemed denied' statutes, 36 M.R.S.A. §§ 842 and 844(1), do not require a contrary reading. They need not be interpreted to raises [sic] Article III issues by suggesting that if a hearing is not accorded at both levels, then the locality's original jurisdiction and tax policy making authority passes to the Superior Court.Id. at *4. Thus, the matter was remanded to the board to develop a proper record and come to a decision. Id. at *4-5, citing Sanbom v. Town of Eliot, 425 A.2d 629 (Me. 1981); Harvey, Field, McKusick & Wroth, Maine Civil Practice, § 80B.4a p.574 (1981 Supp.)
Both parties argue for different reasons that the court should nonetheless entertain this appeal on the merits. Plaintiffs emphasize that they were not accorded due process since they did not have a full opportunity to present evidence and cross-examine witnesses who testified for the Town. Moreover, they do not believe they will receive a fair hearing before the Board. For its part, the Town points out that the Board actually conducted a full hearing and there is an adequate record upon which the court can review this matter; and it notes that Plaintiffs voluntarily absented themselves from the hearing.
Unlike the State Board of Property Tax Review under section 843(1-A) or the county commissioners in section 844, this court does not act to review these issues in a de novo capacity. Plaintiffs will have the opportunity to raise all relevant and appropriate issues before the Board, present their evidence, and, if warranted, appeal to this court in due course. Moreover, there is no basis in the record before the court to support Plaintiffs' subjective concerns about the forum. As for the Town's position, since the Board lacked jurisdiction to conduct the November 1, 2016 hearing, it is void.
2. Board Actions Relating to Other Years
Through their May 26, 2017 motion for leave to amend the complaint, plaintiffs requested that the court review "subsequent actions" of the Board related to this appeal and to tax assessments on their property in other years. In light of the liberal policy towards amendment requests in M.R. Civ. P. 15 and because it was difficult to determine from the pleading itself precisely what additional relief plaintiffs were requesting, the court granted the motion to amend with the understanding that "the issues will be sorted out in the briefing and argument of this appeal." Order on Pending Motions 8c Amended Briefing Schedule at 2. It is now apparent that plaintiffs seek judicial review of Board actions concerning abatement requests based on the assessment dates of April 1, 2014 and April 1, 2016, as well as the Board's handling of an appeal from a decision of the Board of Selectmen relating to their "2013 to present" assessments. The Town argues that these additional challenges are untimely. (Def, Br. 8, )
Pursuant to 30-A M.R.S. § 2691(3)(G) and Rule 80B, a complaint for governmental review must be filed within 45 days of the date of the vote on a board of assessment review's original decision. 30-A M.R.S.A. § 2691(3)(G); M.R. Civ. P. 80B(b), In situations where a board entertains a motion for reconsideration, the appeal "must be made within 15 days after the decision on reconsideration . . . ." 30-A M.R.S.A. § 2691(3)(F). These statutory time limits are jurisdictional; if an appeal is untimely, the court lacks jurisdiction to hear it. Paul v. Town of Liberty, 2016 ME 173, ¶ 17, 151 A.3d 924; Davric Me, Corp. v. Bangor Historic Track, Inc., 2000 ME 102, ¶ 11, 751 A.2d 1024. All of the additional appeals or requests for judicial review are untimely under these standards and the court is without jurisdiction to entertain them.
First, on June 9, 2015 the Board denied plaintiffs' abatement request based on the April 1, 2014 assessment date. (Def. Supp. R. 96-106.} Plaintiffs' request to review this decision of the Board through their June 1, 2017 motion to amend was effectively Tiled over two years after this decision. This request was untimely.
Second, on April 4, 2017 the Board issued its decision on plaintiffs' abatement request based on the April 1, 2016 assessment date. (Def. Supp, R. 140-167.) Plaintiffs requested reconsideration on April 25, 2017. On May 9, 2017 the Board voted to deny plaintiffs' motion to reconsider, and on May 11th sent a notice of this decision to the plaintiffs. (Def. Supp. R. 168-175.) Plaintiffs' motion to amend requesting review of this denial was filed on June 1, 2017-beyond both the 45-day appeal period from the date of the original decision and the 15-day appeal period from the date reconsideration was denied. This request, too, was untimely.
Third, Plaintiffs filed an application under 36 M, R, S. § 841(1) with municipal officers (Town selectmen) alleging errors and irregularities in the Property's assessment for the years "2013 to present." The application was initially denied on December 13, 2016 and then subsequently presented to the Board, which denied it on January 31, 2017, (Def. Supp. R. 124-133.) Plaintiffs requested reconsideration. The Board scheduled a meeting for March 14, 2017 to address the request. (Def. Supp. R. 134.) Due to a snow storm the meeting was cancelled. (Def. Supp. R. 135.) Before the Board could meet to hear the request, the statutory period for reconsideration expired. See 30-A M.R.S. § 2961(3)(F). On March 20, 2017, the Board informed plaintiffs of its inability to reconsider its decision. (Def. Supp. R. 137-138.) Plaintiffs did not seek review of the Board's action until June 1, 2017 when the motion to amend was filed. This request, therefore, was also untimely.
Because the motion to amend was filed beyond these appeal periods and the claims brought therein raise entirely new issues that do not relate back to the particular claim in plaintiffs original complaint, they are untimely and the court lacks jurisdiction to review them. See Richardson v. Inhabitants of Kittery, No. CV-86-335, 1969 Me, Super. LEXIS 193, *3-5 (Sept. 13, 1969) fin this case the plaintiffs' 1987 application to the Board was unrelated to their pending complaint. The 1987 Board ruling was not a modification of the 1986 decision triggered by a remand of the original complaint") The amended claims did not relate back and were subject to the time requirements of Rule BOB, depriving the court of jurisdiction, Conclusion and Order
Because the; Hoard lacked jurisdiction to conduct the November 1, 201.6 hearing, plaintiffs' appeal is granted in part and the matter is remanded to the Hoard for hearing on plaintiffs' requested abatement with respect to the April 1, 2015 assessment date. Plaintiffs' requests for judicial review of the other Board actions are untimely and therefore denied, Accordingly, the entry shall be: "Appeal granted in part Kenncbunk Board of Assessment Review's November 4, 2016 decision vacated. Remand for further proceedings consistent herewith. All other requests for judicial review dismissed for lack of jurisdiction, "
The clerk may incorporate this Memorandum of Decision and Order on the docket by reference pursuant to M, R. Civ. P. 79(a).
SO ORDERED.