2011 VT 122



Garbitelli v. Town of Brookfield (2011-020)
 
2011
VT 122
 
[Filed
04-Nov-2011]
 
NOTICE: 
This opinion is subject to motions for reargument under V.R.A.P. 40 as well as
formal revision before publication in the Vermont Reports.  Readers are
requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any
errors in order that corrections may be made before this opinion goes to press.
 
 

2011 VT 122

 

No. 2011-020

 

Michael
  Garbitelli


Supreme Court


 


 


 


On Appeal from


     v.


Superior Court, Orange Unit,


 


Civil
  Division


 


 


Town
  of Brookfield


September
  Term, 2011


 


 


 


 


Harold E. Eaton, Jr., J.


 

Neal D. Ferenc,
Moretown, for Plaintiff-Appellant.
 
Pamela Stafford, Randolph,
for Defendant-Appellee.
 
 
PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund
and Burgess, JJ.
 
 
¶ 1.          REIBER,
C.J.   Taxpayer appeals from a superior court judgment affirming
the Town of Brookfield Board of Abatement’s denial of his request for a tax abatement.  We affirm. 
¶ 2.          During the townwide reappraisal in 2007, taxpayer refused to allow the
listers to inspect his property, other than the foyer
and the basement.  His property was assessed at $1.6 million. 
Taxpayer then appealed from this assessment, and we affirmed, noting that
taxpayer had refused entry to the tax assessor and had therefore failed to
provide an adequate basis to demonstrate that the assessment was
erroneous.  Garbitelli v. Town of Brookfield, 2009 VT 109, 186 Vt. 648, 987 A.2d
327 (mem.).  Taxpayer later allowed entry
to the listers for 2009, which resulted in an
assessment of $957,000.  Taxpayer then moved for a tax abatement for the
years 2007 and 2008 under 24 V.S.A. § 1535(a)(4),
which authorizes an abatement in cases involving “a manifest error or a mistake
of the listers.”   The Board denied the
request, finding that there was no mistake attributable to the listers since they were denied entry and were forced to use
the best information available to them.  The Board also stated that
abatement procedures are not the appropriate vehicle for appealing property
valuations.
¶ 3.          Conducting a
Vermont Rule of Civil Procedure 75 review of the Board’s action, the superior
court affirmed.  The court noted that Rule 75 is “the modern equivalent”
of certiorari review and stated that such review is confined to questions of
law and does not require a de novo hearing.  The court then held that
taxpayer had failed to demonstrate an abuse of discretion by the Board. 
It explained that the abatement statute emphasizes that any error or mistake
must be attributable to the listers, and given that
it was taxpayer’s own conduct that resulted in the valuation, there was no
abuse of discretion by the Board.  The court also agreed with the Board
that abatement procedures are not meant to provide a second opportunity to
appeal property valuations.
¶ 4.          Taxpayer argues
that the superior court erred by: (1) conducting its review on the record,
rather than de novo; (2) concluding that the Board did not abuse its discretion
by holding there was no “manifest error or a mistake of the listers”;
and (3) stating that taxpayer cannot collaterally attack the 2007 and 2008
valuations via the abatement process.
¶ 5.         
We review questions of law, including the applicable legal standard applied by
the trial court, de novo.  In re K.M.M., 2011 VT 30, ¶ 14, ___ Vt.
___, 22 A.3d 423.  This case presents the opportunity to clarify the law
with regard to the scope of review of appeals from real property tax abatement
proceedings under Rule 75.  Rule 75 allows an appeal of any action or
failure to act by a state agency or subdivision that is not appealable under
Vermont Rule of Civil Procedure 74, “if such review is otherwise available by
law.”  Rule 74 applies when a statute specifically provides for
review.  Hunt v. Vill.
of Bristol, 159 Vt. 439, 439, 620 A.2d 1266, 1266
(1992).  Where legislation is silent as to review, an appeal may be taken
under Rule 75.  Id. at 440, 620 A.2d at 1266. 
The abatement statute does not explicitly provide for an appeal.  Thus,
here, Rule 75 applies.
¶ 6.          Rule 75 is, as the
superior court concluded, the “modern equivalent” of extraordinary relief, such
as certiorari.  In re Town of Bennington, 161 Vt.
573, 573-74, 641 A.2d 1331, 1332 (1993) (mem.). 
We have abolished common law writs and replaced them with Rules 74 and 75,
which are now the exclusive vehicles to challenge governmental action or
inaction.  See V.R.C.P. 81(b).  A court reviewing governmental action
is typically limited to review of questions of law.  Ketchum v. Town of
Dorset, 2011 VT 49, ¶¶ 14-15, ___ Vt. ___, 22 A.3d 500.  Review of
evidentiary questions is limited to “whether there is any competent evidence to
justify the adjudication.”  Id. ¶ 14 (quotation
omitted).  Applying this standard, review is normally limited to
answering legal questions raised by the factual record developed in the
administrative proceeding.  Id. ¶ 15. 

¶ 7.          Taxpayer contends
that our decision in Chapin Hill Estates, Inc. v. Town of Stowe, 131 Vt.
10, 298 A.2d 815 (1972), is controlling and required de novo review in the
trial court.  Taxpayer, however, reads too much into Chapin Hill. 
In that case, we held that “review in the nature of certiorari may not be
limited only to the facts as found in the record” and “the reviewing court is
not precluded from taking testimony.”  Id. at 13, 298 A.2d at 817.  The Court reasoned that Rule 75(d)
contemplates taking evidence by providing for de novo review or trial by jury,
but noted that new evidence is not required.  Id.  The
Reporter’s Notes state that Rule 75(d) “leaves to
specific statute or prior practice the questions whether review in a given case
is de novo and whether trial is to be to a jury.”  Neither statute nor
prior practice indicate that review in the present
case should have been de novo.  In fact, this Court has held that Rule 75
places the lower court in the position of an appellate court in reviewing
administrative agency decisions, which typically does not entitle plaintiffs to
de novo review.  Burroughs v. W. Windsor Bd. of Sch. Dirs.,
141 Vt. 234, 237, 446 A.2d 377, 379 (1982) (holding,
in review of school board renewal decisions under Rule 75, that “the
superior courts have jurisdiction in the nature of an
appellate court only” and plaintiff was therefore not entitled to de novo
review).
¶ 8.          Chapin Hill and
subsequent cases did recognize that where the record is inadequate, evidence
may be admitted to establish facts necessary for the trial court’s
review.  131 Vt. at 13, 298 A.2d at 817; State v.
Forte, 159 Vt. 550, 554-55, 624 A.2d 352, 355-56 (1993).  For
example, where a transcript from the administrative proceeding is unavailable
or incomplete, evidence may be admitted on an appeal taken under Rule 75. 
Forte, 159 Vt. at 555 n.2, 624 A.2d at 355 n.2. 
This is a very limited circumstance, however.  Indeed, Chapin Hill
merely held that “the reviewing court is not precluded from taking
testimony,” 131 Vt. at 13, 298 A.2d at 817 (emphasis added), which simply
indicates that the reviewing court is neither required to take testimony, nor
barred from taking testimony.  In other words, the court has discretion to
gather additional evidence through a de novo hearing or to conduct its review
on the record.
¶ 9.          Thus, where the reviewing court is faced with a question of
law and where the record is sufficient and complete, on-the-record review is
appropriate.  The reviewing court has discretion, however, to engage in a
de novo proceeding and take additional evidence.   See V.R.C.P. 75(d)
(allowing for trial by jury in some cases).  Further, we have held that
where an administrative agency makes its decision following a quasi-judicial
procedure in which the plaintiff “freely participate[s],” de novo review may be
inappropriate.  Ketchum, 2011
VT 49, ¶ 16 (looking at facts and circumstances of selectboard’s
decision, including plaintiffs’ involvement in quasi-judicial proceeding, to
determine if on-the-record review was appropriate).
¶ 10.     In this case, taxpayer
requested, attended, and participated in an abatement hearing in December
2009.  The Board then issued a written decision explaining its denial of
taxpayer’s request for abatement.  On appeal pursuant to Rule 75, the
trial court concluded that there were no factual disputes and, as such, there
was no need for additional evidence.  Indeed, taxpayer conceded at oral argument
in this Court that there were no disputed issues of fact and no additional
evidence that taxpayer wanted to enter into the record.  Therefore, the
trial court did not err in conducting an on-the-record review following
taxpayer’s complaint brought pursuant to Rule 75.
¶ 11.     Taxpayer’s second
argument is grounded in the language of the abatement statute, which provides
that the Board may abate “taxes in which there is manifest error or a mistake
of the listers.”  24 V.S.A. § 1535(a)(4).  The superior court
interpreted the statute to mean “any error or mistake must be attributable to
the listers” and concluded that error of the listers is required for abatement under the law. 
Taxpayer contends that a “manifest error” need not be attributable to the listers, but may exist independently, as here, as a result
of disparate tax assessments.  We agree with taxpayer’s interpretation of
the statute.
¶ 12.     When interpreting a
statute, we seek to discern and implement legislative intent.  Perry v. Med. Practice Bd., 169 Vt. 399, 406, 737 A.2d 900,
905 (1999).  In doing so, we may look to
“the words of the statute itself, the legislative history and circumstances
surrounding its enactment, and the legislative policy it was designed to implement.” 
Id.  Before the statute was amended to
its current form, it read:
[The board of abatement] may abate the
taxes of persons who have died insolvent, removed from the state, or are unable
to pay their taxes. [The board] may abate in whole or in part taxes in which there
is manifest error or taxes in which
there is a mistake of the listers.
 
24 V.S.A. § 1535 (1975).  Thus, the
pre-amendment provision allowing for abatement was in the disjunctive, meaning
“of the listers” did not modify “manifest
error.”  The statute did not require manifest error to be attributable to
the listers.  Rather, the statute permitted the
Board to abate taxes when there was either a manifest error, no matter
whose fault, or a mistake of the listers.  The
1976 amendments reorganized the statute by dividing it into subsections and
adding some separate grounds for abatement.  It appears that the
Legislature intended merely to streamline existing language by removing surplus
words in the clause providing for abatement where there is error or
mistake.  Thus, we hold that the trial court was incorrect in concluding
that a manifest error must be attributable to the listers.
¶ 13.     Although we agree with taxpayer’s interpretation
of the statute’s meaning, we reach the same result as the superior court. 
Taxpayer argues principally that the “extreme
disparity” between $1.6 million and $957,000 is an “obvious mistake” amounting
to manifest error.  We disagree.
¶ 14.     The language in the
statute is entirely permissive and allows the Board to abate taxes, but does
not require it to do so even if the taxpayer falls within one of the categories
allowing for abatement.  Applying the same standard as the superior
court, Tarrant v. Department of Taxes, 169 Vt. 189, 195, 733 A.2d 733,
738 (1999), we review the Board’s decision denying abatement for abuse of
discretion.  See Royalton Coll., Inc. v. State Bd. of Educ., 127
Vt. 436, 447-48, 251 A.2d 498, 506 (1969) (holding that “[d]iscretionary
rulings may be set aside only for abuse”).
¶ 15.     Both parties agree
that tax abatement is an equitable remedy.  Some courts have held as
much.  See William Raveis Real Estate, Inc.
v. Comm’r of Revenue Servs., 686 A.2d 519, 525
(Conn. App. Ct. 1996) (holding trial court did not abuse it discretion in refusing
to exercise equitable powers to abate taxes); Paras
v. City of Portsmouth, 335 A.2d 304, 307 (N.H. 1975) (noting that “property
tax abatement is an equitable remedy utilized to correct errors in property tax
levies”).  We conclude that tax abatement is an equitable remedy, and thus
the maxim that a party seeking an equitable remedy must come to court with
clean hands is fully applicable.  See Starr Farm Beach Campowners Ass’n v. Boylan, 174 Vt. 503, 506, 811 A.2d 155, 160 (2002)
(citing Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.,
324 U.S. 806 (1945)).  Equity
“denotes the spirit . . . of
fairness, justness, and right dealing.”  Id. at
506-07, 811 A.2d at 160 (quotation omitted).  A court has great
discretion to deny aid to the “unclean litigant” and can refuse to be “the abetter of iniquity.”  Precision
Instrument Mfg. Co., 324 U.S. at 814-15 (quotation omitted).  As such, the Board was entitled to weigh the equities and
take into account any bad conduct of taxpayer.  The Board found
that “[o]n numerous occasions” from 2006 through 2009, taxpayer refused to let
the listers enter his property.  Taxpayer
engaged in unfair and inequitable conduct by refusing the listers
reasonable access to the property.  The Board
properly considered taxpayer’s conduct, and we find no abuse of its discretion
in denying his abatement request on this ground.
¶ 16.     Taxpayer’s final
arguments are equally unpersuasive.  His argument that the Board and the
superior court confused tax abatement with an appeal of a tax assessment is
unsound because both bodies plainly analyzed the abatement
statute.  
¶ 17.    Taxpayer also
argues that the Board’s denial of tax abatement violates the
Proportional Contribution Clause of the Vermont Constitution, Vt.
Const., ch. I, art. 9, and the Fourteenth Amendment of the Federal
Constitution because taxpayer was forced to pay a disproportionate
share of the tax burden.  “To comply with the Proportional
Contribution Clause, a town must appraise its property at a uniform
rate.”  M.T. Assocs. v. Town of Randolph, 2005 VT 112,
¶ 13, 179 Vt. 81, 889 A.2d 740.  In the context of a direct
tax appeal, this means that “if a taxpayer demonstrates that the
property at issue is assessed at a higher percentage of fair market
value than comparable properties, the court must list the
taxpayer’s property at a corresponding value.” 
Id.  In contrast to the tax assessment process, in an abatement
action the Board is not constrained to value properties at fair market
value.  In fact, the whole point of tax abatement is to allow the
Board to abate taxes for reasons other than that the property was
assessed above fair market value.  Therefore, a proportional
contribution claim makes no sense in the context of an abatement
proceeding.  Certainly, a taxpayer may argue before the Board that
his assessment was so high as to constitute a “manifest error or
a mistake of the listers,” 24 V.S.A. § 1535(a)(4), but, as
noted above, the Board did not abuse its discretion in denying relief
on this basis in this case.
Affirmed. 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Chief Justice

 

