              IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Dockside Associates/Pier 30, L.P.          :
                                           :
                    v.                     :
                                           :
City of Philadelphia, Board of             :
Revision of Taxes                          :
                                           :
Appeal of: Dockside Associates/            :   No. 2258 C.D. 2014
Pier 30, L.P. and Peter DePaul             :   Argued: October 5, 2015


BEFORE:      HONORABLE BERNARD L. McGINLEY, Judge
             HONORABLE MARY HANNAH LEAVITT, Judge1
             HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge


OPINION NOT REPORTED


MEMORANDUM OPINION
BY JUDGE McGINLEY                              FILED: January 15, 2016

                 BACKGROUND & PROCEDURAL HISTORY
             Dockside Associates/Pier 30, L.P. (Dockside) is the record owner of a
property located at 717 South Christopher Columbus Boulevard, Philadelphia,
Pennsylvania 19147. The property is located in a CMX-3 mixed-use district and
zoned accordingly. A sixteen story building was constructed on the property. The
building contains 242 residential units, one (1) commercial unit and three (3)
stories used as a private parking garage. See November 3, 2014, Findings of Fact
and Conclusions of Law of the Court of Common Pleas of Philadelphia (Trial


      1
          This case was assigned to the opinion writer before January 4, 2016, when Judge
Leavitt became President Judge.
Court Findings) at 1, Reproduced Record (R.R.) at 6a2; see also Trial Court
Opinion at 2, R.R. at 15a; see generally Declaration of Condominium of Dockside
Condominiums, 1-40, R.R. at 634a-678a.


               Construction of the building was completed in September 2002, and
the Dockside Condominium Association was formed April 4, 2006. On March 26,
2006, Dockside filed a declaration of condominium, which converted and
subdivided the residential units into a condominium project. Notes of Testimony
(N.T.), August 11, 2014, at 22-24, R.R. at 90a; Declaration of Condominium of
Dockside Condominiums, 1-40, R.R. at 634a-678a.
               .
               Beginning in 2007, the Office of Property Assessment (OPA) in the
City of Philadelphia (Philadelphia) assessed a separate market value for each of the
residential units.3 Trial Court Opinion at 3, R.R. at 16a. As a consequence of
those assessed market values of each of the residential units for tax purposes,
Dockside filed separate tax assessment appeals with OPA for each of the 153 units
(152 residential units and the 1 commercial unit) still owned by Dockside after the
2007 assessments.4 Trial Court Opinion at 1, 3, R.R. at 14a, 16a.

       2
          The Reproduced Record in this matter consists of six (6) volumes (denoted as Volumes
I-VI) and one (1) volume of a Supplemental Reproduced Record. The Reproduced Record
volumes are numbered seriatim 1a-1606a. The Supplemental Reproduced Record is numbered
1b-255b. Volume references were omitted.
        3
          The tax assessments on condominiums in the building began in 2007, the first tax year
after the filing of the declaration of condominium in 2006.
        4
           Ninety (90) residential units were sold by Dockside prior to OPA assessing each
residential unit in 2007. Three (3) additional units were sold by Dockside (residential units 610,
715 and 802) before the March 25, 2013 appeal by Dockside to the Trial Court. However,
Dockside never discontinued the four (4) appeals for the additional units sold. Consequently,
Dockside only owned 149 of the units at the time this matter progressed to the Trial Court, not
the 152 (residential) units reflected in Dockside’s initial filings.



                                                2
             The property was inspected for Philadelphia by A. R. Hughes and
Associates (Hughes) on January 11, 2013, with an effective valuation date for each
of the residential units at the property as of December 31, 2013. Philadelphia’s
appraisal report listed a separate value for each of the 152 residential units at issue.
Those residential units were assessed using a sales comparison approach (Sales
Comparison) and highest-and-best-use of the residential unit analyses, wherein it
was noted that the highest-and-best-use of each residential unit was to sell the
residential units on the open market for residential owner-occupants. In addition,
Philadelphia assessed the fair market value of the commercial unit at $4,524,600.
See November 3, 2014 Order of the Trial Court, R.R. at 1a; see also N.T., August
11, 2014, at 17, R.R. at 89a.


             On February 7, 2013, Harvey M. Levin (Levin), hired by Dockside,
used a “fractured condominium”5 model and an income capitalization approach to
value (Income Capitalization) and produced a summary appraisal report for
Dockside noting an implied market value for assessment purposes for the 2013
taxable year of $20,549.868.           However, he appraised the property’s value
collectively at $14,965,000. Keystone Appraisal Company, Summary Appraisal
Report of Harvey M. Levin, February 7, 2013; R.R. at 1106a.


             Following Levin’s appraisal report (for $14,965,000), Dockside filed
a separate appeal with the Philadelphia Board of Revision of Taxes (Board) for

      5
        The Dictionary of Real Estate Appraisal defines a fractured condominium as:
      A residential condominium development or conversion project in which many units
      remain unsold; often a distressed property previously offered for sale as individual
      condominium units where the remaining units are remarketed as rental units and then
      sold as an apartment project. Sometimes the remaining units are sold in bulk at a
      discount. Appraisal Institute, The Dictionary of Real Estate Appraisal, 78 (5th ed. 2010).



                                              3
each residential unit and challenged the assessed market value from OPA.
Following public hearings on February 21, 2013, the Board reviewed the evidence
presented and on February 27, 2013, denied Dockside’s proposed reductions to the
2013 assessed market values of the residential units.


              Dockside thereafter appealed the Board’s decision to the Trial Court,
which heard argument and testimony over the course of four days in August 2014.6
On November 3, 2014, the Trial Court (Trial Court Opinion) denied Dockside’s
appeal and upheld the assessed fair market values of the residential units using the
Sales Comparison approach as provided by Philadelphia.7 Trial Court Opinion at
8; R.R. at 13a.


              This appeal followed.

                                         ISSUES

              Before this Court, Dockside essentially argued8: 1) that the Trial Court
improperly gave deference to Philadelphia’s opinion of value instead of conducting
a de novo review; 2) that the Trial Court used the improper taxation approach in
assessing the residential units; and 3) that the Trial Court erred by prohibiting
Dockside from using the prior appraisals of Philadelphia’s expert for impeachment



       6
         Testimony was heard on August 11, 2014, August 12, 2014, August 15, 2014, and
August 25, 2014.
       7
         Since none of the parties involved presented any values for the commercial unit, the
Trial Court ordered that its value remained as originally assessed by the OPA.
       8
          This Court’s scope of review in a tax assessment appeal is whether the trial court
abused its discretion, committed an error of law, or whether its decision is supported by
substantial evidence. Cedarbrook Realty, Inc. v. Cheltenham Twp., 611 A.2d 335, 340 (Pa.
Cmwlth. 1992).



                                             4
purposes wherein he made inconsistent statements in those prior appraisals
regarding the proper method for appraising the property.


                                De Novo Review
            Dockside identified that the Trial Court was charged with arriving at
the fair market value of the residential units based upon “competent, credible and
relevant evidence.” Craftmaster Manufacturing, Inc. v. Bradford County Board of
Assessment Appeals, 903 A.2d 620, 625 (Pa. Cmwlth. 2006). Dockside noted that
where a taxpayer’s evidence “is relevant, credible and un-rebutted, the court must
give it due weight and cannot ignore it in determining a property’s fair market
value.” Koppel Steel Corporation v. Board of Assessment Appeals of Beaver
County, 849 A.2d 303, 307 (Pa. Cmwlth. 2004). If the taxing authority presented
rebuttal evidence, “the court must determine the weight to be given all the
evidence.” Koppel, 849 A.2d at 307.


            In the current controversy, Dockside argued that the Trial Court
offered “no meaningful analysis” regarding its decision to accept Hughes’ expert
opinion and reject Levin’s expert testimony. Dockside argued that the Trial Court
applied a de facto presumption that Philadelphia’s valuation of the residential
units, based upon the Sales Comparison approach, was correct simply because “it
was utilized by [Philadelphia] and is consistent with [Philadelphia’s] usual
procedures.” Dockside’s Brief at 22.


            Thus, Dockside argued that Philadelphia first had to establish a prima
facie case by entering the official assessment record into evidence. The burden
then shifted to Dockside to present “sufficient competent, credible and relevant



                                        5
evident of the fair market value of the property of the property to overcome the
prima facie case.” Koppel, 849 A.2d at 307.


               Dockside asserted that the Trial Court erred in finding that the Sales
Comparison approach was appropriate simply because that was the approach that
Philadelphia “always uses” to evaluate residential condominium units, irrespective
of whether the condominium project was distressed or fractured. See Dockside’s
Brief at 28.


               Dockside argued that the Trial Court abused its discretion in this
controversy because it reached a conclusion which “overrides or misapplies the
law, or [because] the judgment exercised [was] manifestly unreasonable, or the
result of partiality, prejudice, bias or ill-will.” Middletown Township v. Lands of
Stone, 939 A.2d 331, 335 n.3 (Pa. 2007) (regarding eminent domain of a family
farm for recreational purposes).


               Concomitantly, regarding the admission or exclusion of evidence,
Philadelphia asserts that Pennsylvania courts have long held:
               [t]hese matters are within the sound discretion of the trial court,
               and [the court on appeal] may reverse only upon a showing of
               abuse of discretion or error of law. An abuse of discretion may
               not be found merely because an appellate court might have
               reached a different conclusion, but requires a result of manifest
               unreasonableness, or partiality, prejudice, bias, or ill-will, or
               such lack of support so as to be clearly erroneous. In addition,
               to constitute reversible error, an evidentiary ruling must not
               only be erroneous, but also harmful or prejudicial to the
               complaining party.




                                            6
Zuk v. Zuk, 55 A.3d 102, 112 (Pa. Super. 2012) (citation omitted); see also
Expressway 95 Business Center, L.P. v. Bucks County Board of Assessment, 921
A.2d 70, 76 (Pa. Cmwlth. 2007) (citation omitted) (when performing a de novo
review, the trial court as fact-finder maintains exclusive province concerning the
credibility of witnesses and the weight afforded the evidence); Appeal of Cynwyd
Investments, 679 A.2d 304, 309 (Pa. Cmwlth. 1996) petition for allowance of
appeal denied, 685 A.2d 549 (Pa. 1996); Willow Valley Manor, Inc. v. Lancaster
County Board of Assessment Appeals, 810 A.2d 720, 724 (Pa. Cmwlth. 2002)
(trial court's findings are entitled to great deference and will not be disturbed
absent clear error).


             In the current controversy, the Trial Court’s opinion discussed
Philadelphia and Dockside’s evidence presented at trial in detail:
             Testimony presented established that the OPA assesses
             condominium units based on a sales comparison approach. N.T.
             8/11/14 at 22-23; 33. A condominium unit is considered a
             separate property with a separate tax identification number, and
             regardless of how many condominium units a single owner
             possesses, each is assessed with its own fair market value. N.T.
             8/11/14 at 24. The [residential units] have been assessed as
             single units since 2007. N.T. 8/11/14 at 25. The OPA relies
             upon comparable sales in determining the market values of
             individual units. N.T. 8/11/14 at 33. The 2013 assessed value
             had a predetermined ratio of 32% …. N.T. 8/11/14 at 26.
             Dockside objected to the fact that the OPA assessor had not
             personally visited the Dockside Condominiums, but had only
             driven by them. N.T. 8/11/14 at 36-38.

                    Dockside presented testimony that in 2006 and 2007, it
             had sold sixty-one (61) condominium units. N.T. 8/11/14 at 50.
             However, beginning in 2008 until the present day, it has sold
             forty-two (42) condominium units, on average six (6) units per
             year. N.T. 8/11/14 50. In total, it has sold one hundred and


                                         7
three (103) units out of a total of two hundred and forty-two
(242) units. N.T. 8/11/14 at 53. Six (6) of those sales were in
2013 and several were for significantly more money than
Dockside's proposed market values. N.T. 8/11/14 at 93. For
example, Unit 1020, allocated a market value $118,138 by
Dockside's method, sold on May 6, 2013 for $625,462. N.T.
8/12/14 73-74, 77.

Levin testified for Dockside that the instant case was “the first
fractured condominium that has been appraised in this part of
the country.” N.T. 8/11/14 at 107. Using an [Income
Capitalization] approach, Levin examined the history of the
property, operating statements, typical leases, floor plans, etc.
N.T. 8/11/14 at 116-119.             He utilized the [Income
Capitalization] approach due to the “nature, character, and
history of Dockside;" this involves looking at the gross income
attributed to the building and conducting appropriate expenses to
arrive at the net operating income, finding the capitalization rate,
and dividing income by rate to yield an indication market value.
N.T. 8/11/14 at 120, 136. Levin valued the Dockside units as
“one property, a fractured condominium, with the value
indicated by sales ...[and] the contribution that each made to
operating the income of the entire building." N.T. 8/11/14 at
127.

Levin concluded that the net operating income was
$1,964,00.00. N.T. 8/11/14 at 140. He used an overall
capitalization rate of 113/4. N.T. 8/11/14 at 141. Thus, he
concluded that the fair market value of the unsold units was
$14,965,000 for the taxable year 2013 and $17,500,000 for the
taxable year 2014. N.T. 8/11/14 at 141-142. Levin averred that,
in a fractured condominium, there are “no sales" and therefore
no comparables. N.T. 8/11/14 at 150. Levin averred that
Dockside would be “stuck” with the unsold units for a very long
time, and that it could take as long as twenty (20) years to
achieve a sellout of all units. N.T. 8/12/14at 82-83.

[In rebuttal, Philadelphia presented] the expert testimony of
John Rush (Rush), a certified real estate appraiser, who came to

                              8
the conclusion that the opinions of value expressed by Levin
were not credible, based upon his reading of the report; his
experience; and his general knowledge of the real estate market.
N.T. 8/15/14 at 15, 17. Rush testified that [Philadelphia] uses
the Sales Comparison approach, which is an “evaluation
technique wherein the appraiser collects data concerning the
sales comparable properties, makes adjustments to that data
said [sic] for the differences between comparable sales and [the
residential units]. After the adjustment process has been
completed, the data should point to what the value of the estate
should be. N.T. 8/15/14 at 20. This is a common method for
appraising units. N.T. 8/15/14 at 15.

Rush, who had performed valuations of fractured condominium
units, expressed concerns over Levin's lack of presentation of
market data, i.e. comparable property rents being received from
the marketplace, discussion and analysis of vacancy rates
comparable to the marketplace and analysis and discussion of
operating expenses based upon that of similar properties. N.T.,
8/15/14 at 24. Rush stated that even with the [I]ncome
[C]apitalization method, the overall capitalization rate should
be derived from the market for a market value opinion. N.T.
8/15/14 at 24. Rush opined that normally, in such a case, to
remain consistent with the valuation technique, the appraiser
would have collected and performed an analysis for the rest of
comparable properties in the area. N.T. 8/15/14 at 31-32.
Additionally, Rush testified that the report was inaccurate with
regard to its vacancy projection because in his practice of
appraising multifamily dwellings, the general market vacancy
was nowhere near twenty (20) percent. N.T. 8/11/14 at 46. He
recommended that [Philadelphia] not rely upon the Levin
appraisal as an indication of value. N.T. 8/15/14 at 62.

Albert R. Hughes, III (“Hughes''), real estate appraiser, [also]
testified for [Philadelphia] that each [residential] unit, upon
creation, is assigned an individual tax identification number.
N.T. 8/15/14 at 104. Each [residential] unit is considered a
separate property saleable unto itself. N.T. 8/15/14 at 104.
Hughes appraised one hundred fifty-two (152) [residential

                            9
            units] in the Dockside building as individual [residential] units
            and completed an appraisal report. N.T. 8/15/14 at 105.
            Hughes defined market value as "the price which the purchaser,
            willing but not obliged to buy, would pay an owner, willing but
            not obliged to sell, taking into consideration all uses to which
            the property is adapted and might in reason be applied.” N.T.
            8/15/14 at 109. In performing the appraisal, Hughes used sales
            as well as resales in several local condominium projects along
            the Philadelphia waterfront. N.T. 8/15/14 at 125-128. Hughes
            determined the highest and best use of the [residential] units
            was residential occupancy and future sales to the end user, and
            to come to this conclusion he considered: legal permissibility;
            physical possibility; financial feasibility; and maximum
            productivity. N.T. 8/15/14 at 130-131.

            Hughes also testified that a number of other residential [] units,
            including Society Hill Towers and Pier Three Condominiums,
            are within a mile of Dockside; [that] the South Street overpass
            is quite close to Dockside, as well as grocery stores and
            shopping between one and one quarter miles from the
            propert[y]. N.T. 8/15/14 112-113, 126-128.

            In a surrebuttal, John Hosey ("Hosey'') testified for Dockside
            that he found Rush's report inaccurate as to the assessment of
            fractured condominiums because apartment building sales are
            irrelevant to a fractured condominium analysis. N.T. 8/25/14 at
            15-16, 24. Hosey felt that Levin's report was as complete as
            possible. (Emphasis added.) N.T. 8/25/14 at 16.

            Where the taxpayer's testimony is relevant, credible and un-rebutted,
the court must give it due weight and cannot ignore it in determining a property's
fair market value. Koppel, 849 A.2d at 307 (citations omitted). However, where
the taxing authority presents rebuttal evidence, the court must determine the weight
to be given all the evidence. Koppel, 849 A.2d at 307.




                                        10
            In the current controversy, it is evident that Dockside presented
relevant and credible testimony in support of its position. Thereafter, Philadelphia
presented rebuttal evidence, which was also weighed by the Trial Court. The trial
court, as fact-finder, maintained exclusive province concerning the credibility of
witnesses and the weight afforded that evidence. Zuk v. Zuk, 55 A.3d at 112.


            As cited above, the Trial Court thoroughly reviewed the evidence
presented by both parties, clearly evaluated it in great length in its opinion, and
thereby removed all doubt in this Court’s mind that it overrode or misapplied the
law, or exercised manifestly unreasonable judgment, resulting in partiality,
prejudice, bias or ill-will. Middletown Township v. Lands of Stone, 939 A.2d 331,
335 n.3 (Pa. 2007).    The Trial Court arrived at the fair market value of the
residential units based upon a de novo review of the competent, credible and
relevant evidence. See Craftmaster, 903 A.2d at 625; Koppel, 849 A.2d at 307.


                               Taxation Approach
            Dockside next argued that the Trial Court erred when it adopted the
Sales Comparison appraisal method for taxation purposes of the residential units
advocated by Philadelphia rather than the Income Capitalization appraisal method
for taxation purposes utilized by Dockside’s expert witness.


            Dockside asserted that the Income Capitalization appraisal method
was the approach to take to assess the residential units for purposes of taxation.
Dockside noted that Income Capitalization is “[a] set of procedures through which
an appraiser derives a value indication for an income-producing property by
converting its anticipated benefits (cash flows and reversion) into property value.”
The Dictionary of Real Estate Appraisal, 143 (4th ed. 2002).     Dockside asserted

                                        11
that in determining fair market value of the residential units, it is well-settled that
value assigned to those units must be based upon the particular facts and
circumstances of the subject property as well as relevant market conditions. See
Mack Trucks, Inc. v. Lehigh County Board of Assessment Appeals, 692 A.2d 661,
663 (Pa. Cmwlth. 1997).


              Dockside further asserted that the concept of a fractured condominium
was well-recognized in the real estate appraisal industry. Dockside argued that the
fractured condominium analysis applied by its expert, Levin, was not a separate
approach to real estate valuation, but simply part of a particular factual context
that supported application of the familiar Income Capitalization appraisal method,
which has been applied by Pennsylvania courts in tax assessment cases, where the
highest-and-best-use of property was as income producing property.9


              Dockside argued that they presented unrebutted evidence that the
property that encompassed the residential units in issue was a distressed or
fractured condominium project. Dockside asserted that none of the witnesses who
testified argued that the concept of a fractured condominium project was not
recognized by real estate appraisers or disagreed that Dockside met the definition
of a fractured condominium.            Dockside further asserted that they presented

       9
         See, e.g., In re Appeal of Marple Springfield Center., Inc., 607 A.2d 708 (Pa. 1992)
(upholding utilization of income capitalization approach to determine value of shopping center
with long-term, restrictive lease); In re Appeal of V.V.P. Partnership, 647 A.2d 990 (Pa. Cmwlth.
1994) (upholding utilization of income capitalization approach to determine value of tennis
club); Cedarbrook Realty, Inc. v. Cheltenham Twp., 611 A.2d 335, 345 (Pa. Cmwlth. 1992)
(remanding so that trial court could give greater weight to income capitalization approach to
value unique residential property development). See also 1198 Butler Street Associates v. Board
of Assessment Appeals, County of Northampton, 946 A.2d 1131, 1140 (Pa. Cmwlth. 2008) (“A
court must consider the economic realties [sic] associated with property when assessing its fair
market value.”).



                                               12
substantial evidence that the highest-and-best-use for the units was as a fractured
condominium.10


               Further, Dockside argued that the requirement in Section 3105 of the
Uniform Condominium Act11 (UCA) that each residential (condominium) unit
must be valued in isolation, rather than as part of an “integrated economic unit”, is
not a hard-and-fast rule. Dockside’s Brief at 43. Dockside asserted that it was
perfectly appropriate for an appraiser to recognize the market forces of supply and
demand, which were impacted by the number of total residential units owned by an
individual in assessing the value of each unit. Dockside’s Brief, at 43-44. Thus,
Dockside asserted that its appraisal did not ignore the UCA, but rather, recognized
the economic reality that Dockside’s ownership of the residential units in a
fractured condominium project depresses the value of each residential unit.
Koppel, 849 A.2d 303; see also Dockside’s Brief p. 44.


               In Koppel, the taxpayer owned 211 separate parcels of contiguous real
estate in Beaver County, Pennsylvania. The taxpayer’s expert assessed those

       10
           The residential units should be offered for bulk sale or the continuation as residential
rental units, which will yield the highest net return. N.T., August 11, 2014, at 123, 134-136,
R.R. at 115a, 118a.
        11
           68 Pa .C.S. §§3101-3414.
        Section 3105 of the UCA states, in pertinent part:
             (a) Title. -- Except as provided in subsection (b), each unit together with its
             common element interest constitutes for all purposes a separate parcel of real
             estate.
            (b) Taxation and assessment. -- If there is a unit owner other than a declarant,
             each unit together with its common element interest . . . shall be separately
             taxed and assessed . . . ; otherwise, the real estate comprising the
             condominium may be taxed and assessed in any manner provided by law.
68 Pa.C.S. § 3105.




                                               13
parcels as an “integrated economic unit”. The trial court in Koppel rejected that
valuation and accepted the valuation of the taxing authority’s expert on the basis
that he had assigned a value to each individual parcel. In reversing the trial court’s
order, this Court found that “the trial court erred in rejecting the valuation of [the
taxpayer’s] appraiser on ground that the appraiser considered the eleven parcels as
an integrated economic unit.” Koppel, 849 A.2d at 305.


             Thus, Dockside argued that by the same reasoning in the current
controversy, it is clear that an accurate appraisal of each residential unit can - and
should - consider the total number of units owned by Dockside in a single
fractured condominium project in determining the value of each residential unit.


             Conversely, Philadelphia argued that the Sales Comparison approach
was the best way to show the highest-and-best-use for each individual residential
unit. N.T., August 15, 2014, at 131-132, R.R. at 200a; Philadelphia’s Brief, at 44.
Philadelphia argued that in tax assessment appeals, a trial court must
“independently determine the fair market value of the parcel on the basis of the
competent, credible and relevant evidence presented by the parties.” Green v.
Schuylkill County Board of Assessment Appeals, 772 A.2d 419, 426 (Pa. 2001)
(quoting Westinghouse Electric Corp. v. Board of Property Assessment, 652 A.2d
1306 (Pa. 1995)) (citations omitted).     Philadelphia argued that for real estate
assessment purposes, residential (condominium) units are to be valued as separate
and distinct properties and not as a single property.          Cunius v. Board of
Assessment Appeals of Chester County, 976 A.2d 635 (Pa. Cmwlth. 2009); see
also Philadelphia’s Brief, p. 17.




                                         14
               In Cunius, a father and son (the Cuniuses) owned an apartment
building as tenants in common. Cunius, 976 A.2d at 636. The Cuniuses converted
and divided the building. Cunius, 976 A.2d at 636. Unit 1 consisted of forty-four
(44) apartments and was exclusively owned by the father. Cunius, 976 A.2d at
636. Unit 2 consisted of twenty-four (24) apartments and was exclusively owned
by the son. Cunius, 976 A.2d at 636. After the declaration of the condominium
was filed, the local assessment board assigned individual tax parcel numbers to
Units 1 and 2 and assessed them separately, resulting in a higher aggregate value
than when the properties were legally defined as an “apartment building”. Cunius,
976 A.2d at 636. The Cuniuses appealed the two assessments.                       At trial the
Cuniuses presented evidence demonstrating that the building was not physically
changed in any manner and that the declaration of condominium represented only a
change in the form of ownership.            Cunius, 976 A.2d at 636.             The Cuniuses
asserted, inter alia, that “the tax authority should have apportioned the prior
assessment […] between each [U]nit based upon its percentage of ownership of the
total property.” Cunius, 976 A.2d at 636 n. 5 and 641.


               In response to the Cuniuses’ arguments, this Court stated that the
procedure “is illogical and contrary to the Assessment Law.”12 Furthermore, it
could “discern no logical basis for interpreting the [UCA] to require the assessment
board to assign a new tax parcel number and tax assessment to each [residential]
condominium unit but prohibit the determination of actual or current market
value.” Cunius, 976 A.2d at 641.




      12
           Act of June 26, 1931, P.L. 1379, as amended, 72 P.S. §§ 5342–5350k.



                                              15
              In the current controversy, Philadelphia further argued that at least
fourteen (14) other jurisdictions have enacted the UCA in their states.13
Philadelphia asserted that at least three (3) courts in other UCA states have
addressed the UCA’s tax provision and each has interpreted that provision to
require a residential (condominium) unit, regardless of ownership, to be treated
separately from all other units in the condominium project.14

              Philadelphia asserted that this Court previously held that the Trial
Court’s duty in an assessment appeal is to weigh the conflicting expert testimony
and determine a value based upon credibility determinations. The trial court has
the discretion to decide which of the methods of valuation is the most appropriate
and applicable to the given property.           Church Street Associates v. County of
Clinton Board of Assessment Appeals, 959 A.2d 490, 495 (Pa. Cmwlth. 2008)
(citing Willow Valley Manor, Inc. v. Lancaster County Board of Assessment, 810
A.2d 720, 722-23 (Pa. Cmwlth. 2002).


              Philadelphia also called this Court’s attention to the fact that “the
Trial Court’s resolution of the conflicts within the two experts’ testimony, as well
as the weight assigned respectively thereto and the credibility determinations

       13
          See Ala. Code § 35-8A-105; Ariz. Rev. Stat. Ann. § 33-1204; Ky. Rev. Stat. Ann. §
381.9109; La. Rev. Stat. Ann. § 9:1121.105; Me. Rev. Stat. tit. 33, § 1601-105; Minn. Stat. Ann.
§ 515.22; Mo. Ann. Stat. § 448.1-105; Neb. Rev. Stat. § 76-829; N.H. Rev. Stat. Ann. § 356-B:4;
N.M. Stat. Ann. § 47-7A-5; N.C. Gen. Stat. Ann. § 47C-1-105; Wash. Rev. Code Ann. §
64.34.040; Tenn. Code Ann. § 66-27-205; Tex. Prop. Code Ann. § 82.005; R.I. Gen. Laws Ann.
§ 34-36.1-1.05. Philadelphia’s Brief, p. 20.
       14
          Arizona, Maine and Rhode Island. See E.C. Garcia & Company, Inc. v. Arizona State
Department of Revenue, 875 P.2d 169, 176 (Az. App. 1993); Crystal Point Joint Venture v.
Arizona Department of Revenue, 932 P.2d 1367, 1371-72 (Az. Ct. App. 1997); Quiland, Inc. v.
Wells Sanitary District, 905 A.2d 806, 812-13 (Me. 2006); See Inn Group Associates v. Booth,
593 A.2d 49, 52 (R.I. 1991); see also, Philadelphia’s Brief, p. 20, n. 8.



                                              16
thereof, control on appeal.” Church Street Associates, 959 A.2d at 495 (citations
omitted).

               Philadelphia noted that significant evidence was provided in the
record to support its expert’s conclusions in that the expert provided dates, sales
prices, size and location for the 25 residential units that were, in fact, sold since
2010 within the condominium project as a whole. N.T., August 15, 2014, at 133,
R.R. at 201a; see also Philadelphia’s Brief, at 44. Philadelphia further noted that at
trial, its expert utilized “hundreds” of other comparable sales from competitive
condominium projects to support his opinion of market value. Appraisal Report on
152 Condominium Units at the Residences at Dockside at 42-62, R.R. at 1356a-
1376a; see also Philadelphia’s Brief, at 44.

               Finally, Philadelphia argued that Pennsylvania’s Constitution states,
in pertinent part, that “all taxes shall be uniform, upon the same class of subjects,
within the territorial limits of the authority levying the tax . . .”15 and requires “that
a taxpayer should pay no more or no less than his proportionate share of the cost of
government.” Hromisin v. Board of Assessment, 719 A.2d 815, 818 (Pa. 1998)
(quoting Deitch Company v. Board of Property Assessment, 209 A.2d 397, 401
(Pa. 1965)). This principle requires that taxpayers pay their proportionate share
based on the same ratio of assessed value to market value. Clifton v. Allegheny
County, 969 A.2d 1197, 1214 (Pa. 2009) (citing Downingtown Area School Dist.
v. Chester County Board of Assessment Appeals, 913 A.2d 194, 199 (Pa. 2006)).




      15
           PA. CONST. Art. VIII, § 1.



                                           17
            Consequently, Philadelphia asserted that this method ensures that both
large property owners and small property owners pay property taxes upon the same
ratio. Delaware, L. & W. R. County’s Tax Assessment, 73 A. 429 (Pa. 1909).


            At the outset of examination of the arguments of both parties, this
Court examines its holding in Koppel. As this Court noted:


      [t]he taxing authority first presents its assessment record into
      evidence, making out a prima facie case for the validity of the
      assessment. The burden shifts to the taxpayer to present sufficient
      competent, credible and relevant evidence of the fair market value of
      the property to overcome the prima facie case for the validity of the
      assessment. If the taxpayer does so, the taxing authority can no longer
      rely solely on the assessment record in the face of countervailing
      evidence unless it is willing to run the risk of having the taxpayer's
      proof believed by the court. Where the taxpayer's testimony is
      relevant, credible and un-rebutted, the court must give it due weight
      and cannot ignore it in determining a property's fair market value.
      Where the taxing authority [thereafter] presents rebuttal evidence, the
      court must determine the weight to be given all the evidence.

Koppel, 849 A.2d at 307; see also Deitch Company v. Board of Property
Assessment, Appeals and Review of Allegheny County, 209 A.2d 397 (Pa. 1965).


            This Court reversed the trial court in Koppel, holding that “the trial
court erred in rejecting the valuation of [the taxpayer’s] appraiser on the ground
that the appraiser considered the eleven [11] parcels as an integrated economic
unit.” Koppel, 849 A.2d at 305. In other words, the taxpayer presented sufficient,
competent, credible and relevant evidence to overcome the taxing authority's prima
facie case. Then, after the trial court denied the taxing authority's motion to
dismiss the tax assessment appeal, the taxing authority presented expert valuation



                                        18
testimony in rebuttal. Faced with the conflicting evidence, the trial court was
required to weigh the evidence in order to determine the fair market value of the
taxpayer’s eleven parcels.


              Although the trial court in Koppel held that the expert testimony of
the taxpayer was not credible, the trial court did not question the personal veracity
of the expert witness but rather, rejected the testimony based on an improper legal
assumption. Hence, the trial court failed to weigh the conflicting evidence. These
circumstances make this Court’s holding in Koppel distinguishable from the
current controversy.16


              In the matter at hand, the Trial Court observed that “the issue before
the [Trial] Court is a narrow one: which method of calculation was correct.” Trial
Court Opinion at 8; R.R. at 21a. The Trial Court noted that “Dockside presented
exhaustive testimony … [but] they [sic] offered no real authority regarding the
appropriateness of a ‘fractured condominium’ and income capitalization approach
as opposed to [Philadelphia’s] method, utilizing a [S]ales [C]omparison
approach….” Trial Court Opinion at 8; R.R. at 21a.


              The Trial Court continued and noted:
       Dockside argued that there were no comparable sales because
       Dockside is isolated; however, [Philadelphia] presented testimony that
       comparable properties, including the Society Hill Towers, were not
       far away; additionally, Hughes testified that the South Street overpass

       16
          See also Mack Trucks, Inc., 692 A.2d 661 (in determining fair market value, it is well-
settled that value must be based upon the particular facts and circumstances of the subject
property and relevant market conditions).




                                               19
       is quite close, as well as grocery stores and shopping between one and
       one quarter miles from the properties. N. T. 8/15/14 at 112-113, 126-
       128.
Trial Court Opinion at 9; R.R. at 22a.


             In further evaluating the evidence, the Trial Court stated that
“[u]ltimately, Dockside could not provide authority as to why this [Trial] Court
should ignore the [UCA, which also defined] each [residential unit] as a separate
parcel to be taxed and assessed separately….Additionally, following direct
examination of … Levin and rebuttal testimony from … Rush, this [Trial] Court
did not find Dockside’s expert assessment evidence reliable or credible.” Trial
Court Opinion at 9; R.R. at 22a.


             Thus, examination by this Court of the particular facts and
circumstances of the current controversy, clearly evidenced that the Trial Court did
weigh, at length, the facts and conflicting evidence when it made its determination.
This Court’s holding in Koppel is distinguishable.


             This Court is mindful that a trial court must determine the fair market
value of a property on the basis of the competent, credible and relevant evidence
presented by the parties. Green, 772 A.2d 419. This Court is also cognizant of the
fact that a trial court’s resolution of the conflict of opinions by various experts, the
weight assigned respectively thereto, and the credibility determinations thereof,
control on appeal. Church Street Associates, 959 A.2d 490.


             Therefore, in furtherance of this review, and keeping in mind the
holdings of Green and Church Street Associates, as well as being mindful that the
trial court has the discretion to decide which of the methods of valuation is the

                                          20
most appropriate and applicable to the given property,17 Philadelphia clearly
presented significant evidence in the form of dates, sales prices, sizes and locations
for the twenty-five (25) residential units that were sold within this property as a
whole since 2010, that supported its expert’s opinion of market value.


                In addition, as identified by Philadelphia, at least fourteen (14) other
jurisdictions have enacted the UCA in their states and three (3) courts in other
UCA states have addressed the UCA’s tax provision, with each interpreting that
tax provision to require a residential (condominium) unit, regardless of ownership,
to be treated separately from all other units in the condominium project.


                Thus, while Dockside may have believed and asserted that its
ownership of the residential units was within a fractured condominium project,
which therefore depressed the value of each residential unit within that project,
Dockside neither provided credible evidence, or authority as to why neither the
Trial Court or this Court should ignore the UCA, which defines each residential
unit as a separate parcel to be taxed and assessed separately.18


                So, being mindful that the Trial Court had the discretion to decide
which of the methods of valuation was the most appropriate and applicable to the
given property as long as it was based upon the competent, credible and relevant
evidence presented by the parties, and being cognizant of the fact that a trial
court’s resolution of the conflict of opinions by various experts, the weight

      17
           Church Street Associates, 959 A.2d 490.
      18
           See also Trial Court Opinion at 7.




                                                21
assigned respectively thereto, and the credibility determinations thereof, controls
on appeal as long as the court provided meaningful analysis of the evidence. The
Trial Court's findings are entitled to great deference and will not be disturbed
absent clear error. Consequently, this Court finds that the Trial Court did not err
when it chose the Sales Comparison taxation approach it did when it assessed the
value of each condominium separately.


                           Exclusion of Prior Appraisals
             Dockside also argued that the Trial Court erred when it prohibited
Dockside from including the prior appraisals of the property created by Hughes for
other clients in the certified record and prohibited Dockside from using them to
impeach Hughes.


             Dockside asserted that Hughes, the expert for Philadelphia, appraised
the property for another client, wherein Dockside asserted that Hughes offered “a
far different spin, characterizing Dockside’s neighborhood as an ‘island’…that
‘would never be allowed today’.” Dockside’s Brief at 54, n.9; see also Dockside’s
Reply Brief at 12-16.


             Dockside further asserted that Hughes’ prior appraisals were not
offered to establish the value of the residential units, but rather to demonstrate that
statements that were made by Hughes to support his valuation were directly
inconsistent with statements that he made previously about the property.
Dockside’s Reply Brief at 13.


             In support, Dockside argued that Pennsylvania Rule of Evidence
613(a) permitted the impeachment of a witness’s credibility through the use of a

                                          22
prior inconsistent statement made by that witness.19 Thus, argued Dockside, that
“it is hornbook law” that a witness’s credibility may be impeached by prior
inconsistent statements. Leaphart v. Whiting Corporation, 564 A.2d 165, 172 (Pa.
Super. 1989); see also Dockside’s Brief at 49. Dockside further argued that “[a]
party may impeach the credibility of an adverse witness by introducing evidence
that the witness has made one or more statements inconsistent with his trial
testimony.” Commonwealth v. Bailey, 469 A.2d 604 (Pa. Super. 1983).


              In response, Philadelphia argued that Hughes’ prior appraisals did not
value the individual residential units of the property for real estate tax purposes.
Rather, Hughes created those appraisals under different circumstances, for
evaluation of the entire building, and were created for mortgage purposes.
Dockside Brief at 48.20 Philadelphia asserted that the prior appraisals did not
provide values for the residential units. Consequently, they were not relevant in
the matter under review.


              Philadelphia further argued that Hughes appraised 152 residential
units for real estate tax purposes in accordance with the UCA for their market
value. Whereas, Hughes’ prior appraisals valued the property, as a whole, for
liquidation purposes in the event that the bank was required to foreclose.



       19
           Pa. Rule of Evidence 613(a) provides in pertinent part:
               (a) Witness’s Prior Inconsistent Statement to Impeach. A witness
        may be examined concerning a prior inconsistent statement made by the witness to
impeach the witness’s credibility.
        20
           Hughes’ prior appraisals were created to “evaluat[e] the project,” or the financial
feasibility of “the property.” R.R. at 260a, N.T. August 21, 2114, at 16; R.R. at 100a, N.T.,
August 11, 2014, at 64.



                                             23
               A party may impeach a witness’s credibility on cross-examination
through previous statements inconsistent with those made at trial. Bailey, 469
A.2d 604. Further, the trial court is vested with authority to “limit the scope and
extent of cross-examination.”           Pittsburgh-Des Moines Steel Co., Inc. v
McLaughlin, 466 A.2d 1092, 1097 (Pa. Cmwlth. 1983).


               This Court agrees with Dockside’s assertion that in order for prior
inconsistent statements to suffice as impeachment evidence, those dissimilarities
“must be substantial enough to cast doubt on a witness’s testimony” Bailey, 469
A.2d at 611.


               This Court also agrees with Dockside’s argument that the only reason
offered by the Trial Court in its opinion for its decision to exclude Hughes’
potential impeachment was because the prior appraisals were not relevant as they
were “not made for a tax assessment.” Trial Court Opinion at 10.


               “[A] trial court has exclusive province over all matters of credibility ...
and its findings will not be disturbed if they are supported by substantial evidence
in the record.”      Aetna Life Insurance Co. v. Montgomery County Board of
Assessment. Appeals, 111 A.3d 267, 279 (Pa. Cmwlth. 2015) (citation omitted).
This Court is reminded of Dockside’s earlier assertion in support of their Taxation
Approach argument -- in determining fair market value of the residential units, it is
well-settled that value assigned to those units must be based upon the particular
facts and circumstances of the subject property. See Mack Trucks, Inc., 692 A.2d
661, 663; see also Dockside’s Brief at 31. (Emphasis added.)




                                            24
             This Court agrees with Dockside’s assertion that the “only reason
offered” by the Trial Court in its opinion when it excluded Hughes’ prior
appraisals from impeachment evidence was because they were “not made for a tax
assessment”. Unfortunately for Dockside, this Court finds no error in the Trial
Court’s reasoning.


             However, those Trial Court findings will not be disturbed if they are
supported by substantial evidence in the record. The Trial Court’s words regarding
Hughes’ prior appraisals -- that the appraisals were “not made for a tax
assessment” were enough. Those few words, that precise reason, was reason
enough to exclude Hughes’ prior appraisals. For dissimilarities must not only cast
doubt on a witness’s testimony, but those dissimilarities must relate to the same
concept or issue. Put another way, assertions must be based upon the particular
facts and circumstances of the subject property. See Mack Trucks, Inc., 692 A.2d
661, 663; see also Dockside’s Brief at 31. Here, the statements made by Hughes,
in his previous appraisals, relate to a different concept and addresses a different
issue and were properly excluded by the Trial Court.


             For reasons heretofore set forth in the Court’s opinion Philadelphia’s
Application For Relief To Suppress In Part Dockside’s Brief And For Reasonable
Attorney’s Fees is denied.


             This Court affirms the decision of the Trial Court.

                                                ____________________________
                                                BERNARD L. McGINLEY, Judge

Judge Covey did not participate in the decision in this case.


                                         25
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Dockside Associates/Pier 30, L.P.        :
                                         :
                   v.                    :
                                         :
City of Philadelphia, Board of           :
Revision of Taxes                        :
                                         :
Appeal of: Dockside Associates/          :   No. 2258 C.D. 2014
Pier 30, L.P. and Peter DePaul           :


                                    ORDER

                   AND NOW, this 15th day of January, 2016, and pursuant to the
reasons heretofore set forth in our Opinion in the above-captioned matter,
Philadelphia’s Application For Relief To Suppress In Part Dockside’s Brief And
For Reasonable Attorney’s Fees in the above-captioned matter is denied.

                   Further, the order of the Court of Common Pleas of
Philadelphia in the above-captioned matter is affirmed.




                                              _____________________________
                                              BERNARD L. McGINLEY, Judge
