Matthew Clifford, Esq., an outstanding condemnation and tax cert lawyer, was enough to send a recent Putnam County Supreme Court decision, LAK 3, LLC v Board of Assessors, et ano of Town of Carmel, Index No. 501685/2019 Filed 02/14/2022.
The case involved a tax reduction petition to reduce the assessment on 41 Averill Drive, a single-family residence near Lake Mahopac. In 2017, the property had an assessed value of $1,011,000. In 2018, the assessment was increased to $2,816,500. In 2019, that assessed value was increased to $2,934,000. The Petitioner retained an independent appraiser to value the subject property by the comparable sales, or market approach. So far, it sounds like a normal tax reduction case, right?
Here is where the case goes screwy. Just when you think you have seen it all, something like LAK 3 LLC comes along. The Town of Carmel did not retain an appraiser rather it chose to go to war with just the Town Assessor. All he did was to testify how the Town established an assessment by employing a reassessment model prepared by a Massachusetts firm.
The Assessor was allowed to testify as to factual matters but not as to value as he was not offered as an expert witness and did not submit an appraisal report. 19 NYCRR 1106, et. seq.
Here, we may properly ask, “Why didn’t the Court grant Petitioner’s Motion in Limine?” I don’t have the answer to that. It certainly was a waste of judicial economy for the court to ignore the fundamental requirement to a tax certiorari case.
The Town also had an appraiser who was a Town employee who reports to the Assessor. How can anyone claim that he was impartial, objective and independent without an accommodation of personal interests.
Well, the Court didn’t think so either.
The Court stated, throughout his testimony in this proceeding, Mr. Paleo was less than candid with the Court, a factor which bears on his credibility. Mr. Paleo was confronted on cross-examination with prior appraisals used in SCAR proceedings. May of the appraisals were close in time to his report but contained remarkably different opinions of value. The SCAR proceeding, in connection with Mr. Paleo’s comparable properties are discussed, infra. In some instances, the contrasting opinions are dated within a week of each other. The glaring contradictions were matched by the poor quality of the work, including inconsistent data such as varying amounts of lake frontage, inconsistent adjustments and other deficiencies. While a SCAR analysis might lack the depth of a formal appraisal, there is no excuse for inaccurate or inconsistent information certified to be true and accurate. Mr. Paleo’s testimony reflected a lack of concern for accuracy as well as an attempt to evade unpleasant conclusions. The Court stated that it would be justified in striking his report and testimony based on his conduct and false representations in this proceeding. However, such action would be unduly harmful to Respondents’ position. Although the report and testimony are entitled to a little weight, Respondents will get the benefit thereof, such as it is. Why? I ask. If the Town knowingly violated the rule requiring an independent appraisal, why should it not be sanctioned by striking its case.
Here are some more comments by the Judge. Mr. Paleo’s appraisal has significant weaknesses that affect his conclusions. Repeated factual errors as well as inconsistent measurements and adjustments compromise and weaken his opinions of value, which are not helped by the disdain and derision expressed in his testimony for those with whom he disagrees. Naturally, there are issue on which appraisers may differ, and factors they may weigh differently, but the issues here are more serious. Appraisers’ failures to establish the facts on which opinions rest prevent meaningful consideration of conflicting opinions.
And, by the way, Petitioner won. Someone should send a memo to the Judge that brevity is the soul of the law, it didn’t take 36 pages to decide this case.