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Pepperman v. Town of Rangeley
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1999 ME 157
Docket: Fra-99-147
Submitted
on Briefs: October 14, 1999
Decided: November 1, 1999
Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.
WALTER L. PEPPERMAN II AND T. ANN PEPPERMAN
v.
TOWN OF RANGELEY
RUDMAN, J.
[¶1] Walter L. Pepperman II and T. Ann Pepperman appeal from a
judgment entered in the Superior Court (Franklin County, Marden, J.)
affirming the decision of the Rangeley Board of Assessment denying them an
additional abatement of the real property taxes assessed on their residential
property. The Peppermans contend that the Board of Assessment violated
the applicable governing law by failing to consider functional obsolescence as
a factor in determining the property's just value and, thus, the Board's
valuation was flawed. We disagree and affirm the judgment.
[¶2] The Peppermans first sought and were granted an abatement
from the assessor. They appealed from the assessor's decision reducing the
valuation of their property by $10,000 to a total of just over $300,000 to the
Board. Before the Board, the Peppermans primarily argued that the tax
assessor's failure to consider functional obsolescence resulted in an
overvaluation of their property. The issue of functional obsolescence
centered on the valuation of the oversized barn adjacent to the Peppermans'
residence. After testimony and argument which lasted almost three hours,
the Board denied the Peppermans further abatement.
[¶3] We review the Board's decision de novo to determine whether
it correctly applied the law of property valuation. See Nugent v. Town of
Camden, 1998 ME 92, ¶ 7, 710 A.2d 245, 247. No special deference is
accorded to the review conducted in the Superior Court on this matter.{1}
See Macaro v. Town of Windham, 468 A.2d 604, 605 (Me. 1983).
[¶4] The Peppermans' assertion that their assessment was illegal
due to the failure of the Board to consider functional obsolescence must be
rejected. The controlling statute requires the Board to "consider all
relevant factors, including . . . functional obsolescence . . . ." 36 M.R.S.A.
§ 701-A.{2} (emphasis added). Here, the record reflects that the Board
considered functional obsolescence and declined to apply it to the
Peppermans' detached barn. The Peppermans presented the Board
substantial evidence on functional obsolescence. The Board weighed the
evidence submitted on the issue, and made no allowance for functional
obsolescence in its determination of the just value of the Peppermans'
property. The Board did not violate section 701-A. The assessment was
legal.
The entry is:
Judgment affirmed.
For plaintiffs:
Walter L. & T. Ann Pepperman
P O Box 236
Oquossoc, ME 04964
Attorney for defendant:
Stephen E. F. Langsdorf, Esq.
Preti, Flaherty, Beliveau, Pachios & Halley, LLC
P O Box 1058
Augusta, ME 04332-1058
FOOTNOTES******************************** {1} . Both parties confused and
conflated the statutory mandate requiring Boards of Assessment to consider
functional obsolescence when assessing real property with the prohibition
on substantially overvaluing the assessed property. See 36 M.R.S.A. §
701-A (1990 & Supp. 1998); Sears, Roebuck & Co. v. City of Presque
Isle, 150 Me. 181, 188-189, 107 A.2d 475, 479 (1954). As the Sears, Roebuck
& Co. holding makes clear, these two grounds for overturning an assessment
are independent of each other; either one standing alone invalidates an
assessment. {2} . Section 701-A does not define the term "functional
obsolescence" in its text and no Maine case law has specifically addressed
the phrase's meaning. In dicta, we described one example of functional obsolescence:
"Because of the shopping center's dated architectural style, low energy
efficiency, and particular floor layout, it suffers from substantial functional
obsolescence." Town of Sanford v. J & N Sanford Trust, 1997 ME
97, ¶ 13, 694 A.2d 456, 457. This explanation of the term as relating
to a property's loss of value due to poor or disfavored design parallels
how the term has been defined in foreign jurisdictions. 'Functional obsolescence'
is the loss of value brought about by the failure or inability to deliver
full service. It includes any loss of value by reason of shortcomings or
undesirable features contained within the property itself. It is the loss
of utility and failure to function due to inadequacies of design and deficiencies
in the property. 98 N.Y. Jur. 2d Taxation and Assessment § 308 n.52
(1992) (citing Piazza v. Town Assessor of Porter, 228 N.Y.S.2d 397, 398
(N.Y. App. Div. 1962)).
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