| ICSC Legal Database - Cases | Monday, February 22, 1999 05:01 PM |
| Citation: |
| Appeal of Net Realty Holding Trust, 128 N.H. 795, 519 A.2d 313 (1986). |
| Issue: |
| Whether a court's determination of the fair market value of property in an earlier tax abatement proceeding is |
| conclusive in a later proceeding as to the value of the property for that year? |
| Facts: |
| Plaintiff taxpayer purchased in 1974 a strip shopping center and three separate commercial buildings located on |
| nineteen acres of land for $2,025,000.00. In earlier proceedings the plaintiff received tax abatements for the |
| years 1980 and 1981 based on the Superior Court's determination that the fair market value of the property was |
| $1,661,854.00 in 1980 and $1,783,403.00 in 1981. The defendant Board of Tax and Land Appeals employed an |
| independent firm to do a general reappraisal throughout the city, which resulted in a valuation of the property at |
| $2,643,300.00 for the 1982 tax year. The plaintiff disputed that figure, and when the Board refused to abate the |
| resulting tax, the plaintiff appealed. |
| Holding: |
| Affirmed. In a later proceeding in which the value of property may be in issue, the judgment in an earlier tax |
| appeal does not conclusively establish the value of that property at the earlier date, even as between the parties |
| to the earlier appeal. Collateral estoppel does not apply because any earlier finding of value in a tax abatement |
| case is not a finding on a matter in issue, but rather on a matter merely in evidence, i.e., fair market value, as to |
| which there is no issue preclusion under the traditional concept of collateral estoppel. Fair and proportionate |
| taxation can be achieved only through a constant process of correction and adjustment of assessments. This |
| defeated if errors could be perpetuated indefinitely by investing a given valuation of property with preclusive effect |
| for the future. Earlier valuations should be accorded only such persuasive force as they deserve. The Court |
| further ruled that the Board properly rejected the valuation testimony of the plaintiff's expert, who based his |
| appraisal on the capitalization of income method. Although the Court recognized that the capitalization of |
| income is an accepted approach to real estate valuation, it found that the Board had adequate grounds to reject |
| the expert's conclusions because he: (1) failed to present any evidence of comparable rentals to substantiate |
| his claim that the taxpayer's rental income represented market levels; and (2) applied a capitalization factor that |
| depreciated the land as well as the improvements constructed on the land. Thus, the plaintiff failed to prove that |
| the city's assessment of his-property for 1982 was disproportionate. |
| Classification 1: |
| Taxation |
| 00135 - Legal Update - Winter 1986 |
|
