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Petrin v. Town of Scarborough

Superior Court of Maine, Cumberland

December 1, 2017

DONALD PETRIN et als., Plaintiffs/Appellants
v.
TOWN OF SCARBOROUGH, Defendant/Appellee KENYON BOLTON, III et als., Plaintiffs/Appellants
v.
TOWN OF SCARBOROUGH, Defendant/Appellee ANGELL FAMILY 2012 PROUTS NECK TRUST et als., Plaintiffs/Appellants
v.
TOWN OF SCARBOROUGH, Defendant/Appellee

          Attorney for Petrin Appellants: John Shumadine, Esq.

          Attorney for Bolton Appellants: William Dale, Esq.

          Attorneys for Angell Family Appellants: Kris J. Eimicke, Esq. Jonathan Block, Esq.

          Attorney for Appellee: Michael A. Hodgins, Esq.

          ORDER AND JUDGMENT

          A. M. Horton, Justice.

         These three cases present appeals by Plaintiff property taxpayers ["the Taxpayers"] pursuant to M.R. Civ. P. 80B and 36 M.R.S. § 843(1) from decisions of the Town of Scarborough Board of Assessment Review ["the Board"]] on the Taxpayers' applications to the Town of Scarborough for property tax abatements.

         Background

         This is the second time the Taxpayers have appealed from the Board's decisions on their abatement requests. Their first appeals were heard in the Business and Consumer Court initially and then in the Supreme Judicial Court of Maine, sitting as the Law Court. See Petrin v. Town of Scarborough, 2015 Me. Super. LEXIS 37 (Docket No. BCD-AP-14-03), vacated and remanded in part, 2016 ME 136, 147 A.3d 842; Angell Family 2012 Prouts Neck Trust v. Town of Scarborough, Me. Bus. & Consumer Ct, Docket No. CV-14-59, vacated and remanded in part, 2016 ME 152, 149 A.3d271.

         The Law Court rejected the Taxpayers' appeals on most of the grounds they advanced, but upheld the appeals as they related to the program of the Town of Scarborough ["the Town"]] for assessing separate but abutting parcels held in common ownership. The program is described as follows:

         "The abutting property program allows a taxpayer who owns multiple abutting lots to elect to have the separate lots assessed as a single unit. The abutting property program results in a lower valuation of the two lots than if they were assessed independently of each other." Angell Family 2012 Prouts Neck Trust v. Town of Scarborough, 2016 ME 152, ¶16, 149 A.3d 271 (internal ellipses omitted). "This necessarily means that those who do not own abutting lots are subjected to taxes that are not imposed on owners of lots that happen to be abutting." Petrin v. Town of Scarborough, 2016 ME 136, ¶ 31, 147 A.3d 842.

         The Law Court concluded that the Town's abutting property program "necessarily results in an unequal apportionment of the tax burden, " Angell, 2016 ME 152 at ¶21, and violates the Taxpayers' right to equal protection. Petrin, 2016 ME 136 at ¶¶31-32. Accordingly, the Law Court remanded the Taxpayers' appeals to the Business and Consumer Court, with directions that the appeals be remanded to the Board for "further proceedings to address the inequality in tax treatment affecting the Taxpayers because of the abutting property program." Petrin v. Town of Scarborough, 2016 ME 136 at ¶32, 147 A.3d 842. The Business and Consumer Court remanded the appeals to the Board without retaining jurisdiction.

         The Board convened a further hearing on the appeals on three days in March and April 2017, taking evidence and argument. See AR 386-711 (transcripts of hearings).[1]

         Prior to the first hearing date, counsel for the Taxpayers and the Town submitted position statements to the Board. AR 121-26, 300-09.

         The Taxpayers in their statement asked for a 99% reduction in the assessed value of their land (but not assessed value of the improvements on their land), based on what they claimed to be the extent of the improper assessment of undeveloped abutting lots under the abutting property program. AR 126. The Town's statement advised that Maine law calls for the Board to award for "such reasonable abatement as the board thinks proper, " AR 301, quoting36 M.R.S. § 843(1), and suggested that "the maximum remedy is to return the entire program's benefit-dollar for dollar- to the complaining Taxpayers." AR 309.

         With the agreement of both the Taxpayers and the Town, the Board decided to expand the scope of the hearing beyond the 2012-13 property tax year that was addressed in the Business and Consumer Court and Law Court decisions. Some but not all of the Taxpayers applied for abatements during the next three tax years as well. See Board Decision at 1 & n.l, AR 742. Accordingly, the Board took evidence on what property tax abatements the Taxpayers should be granted for the 2013-14, 2014-15 and 2015-16 tax years as well as for the 2012-13 tax year. Id. The abutting property program was discontinued in 2016 after the Law Court decisions had issued. See id.

         The Administrative Record includes numerous exhibits and data concerning the effects of the abutting property program on the tax base as a whole, on the abutting lot owners who benefited from the program, and on the Taxpayers:

• The number of the abutting lot owners who benefited from the abutting property program varied by tax year. The Town calculates that there were 37 abutting lots assessed at below-market rates during the 2012-13 tax year, but 18 of those were assessed at full value as of 2014, leaving only 19 abutting lots still under-assessed as of 2016. AR 300.
• After the Law Court decision issued in 2016, the Town revalued all of the unimproved abutting lots, with most increasing in assessed value. AR 408-10. Those that did not see a significant increase in assessed value were unbuildable or lacking in access. AR 406-08.
• According to the Town's calculations, the unimproved abutting lots in the program were assessed in the 2012-13 tax year at more than 82% below their market value.[2] See table at Tab 8, AR 293-94.
• However, the total land portion of the assessment for those the Taxpayers (meaning the assessment for both abutting lots owned by each taxpayer) reflected a much lower discount off market value-the total land assessment for those the Taxpayers was at a discount averaging 31.48% off market value for the 2012-13 tax year. See table at Tab 9, AR 295-99. The difference in the size of the discount is due to the fact that the improved lots abutting the ...

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