IN THE MATTER OF DONALD E. AXINN COMPANIES, APPELLANT, v. THE BOARD OF ASSESSORS AND THE BOARD OF ASSESSMENT REVIEW OF THE COUNTY OF NASSAU, RESPONDENTS.
85 N.Y.2d 838, 647 N.E.2d 1350, 623 N.Y.S.2d 842 (1995).
4 No. 25 [1995 NY Int. 036]
February 16, 1995
Decided February 16, 1995
This memorandum is uncorrected and subject to revision before publication in the New York Reports.
Michael A. Ciaffa, for Appellant.
Leon Friedman, for Respondents.
The order of the Appellate Division should be reversed, with costs, and the judgment of Supreme Court reinstated.
Petitioner owns one acre of class 4 property in Oyster Bay, Nassau County. From 1977 until 1986, when all class 4 property was revalued and reassessed, petitioner's property was assessed at $64,750 (eight percent of the stated value of its land and building). In 1986, the property was valued at $1,377,300-- $1,000,000 for the land and $377,300 for the building, and the assessment set at $110,200. Petitioner filed a tax certiorari proceeding, alleging inequality and overassessment. The parties entered into a settlement stipulated to be for the tax years 1986 and 1987, reducing the assessment to $92,200 and $99,200, respectively.
As respondents concede, when the handwritten property record cards were transferred to the computer in 1986, petitioner's property was erroneously described as four acres. Based on this error, on August 23, 1990, petitioner sought a refund and recalculation for 1989 and 1990, which remained $99,200 with each acre valued at $250,000, for a total land value of $1,000,000. Respondent Board denied petitioner's demand on the ground that calculation of the tax owed for 1989 was based on the settlement stipulation, not the erroneous acreage. The Department of Assessment, however, corrected the acreage error and also changed petitioner's land value from $1,000,000 for four acres to $609,840 for the single acre, and applying the percentage to the stated value of petitioner's land and building calculated petitioner's 1990 assessment as $99,200.
In its ensuing article 78 proceeding, petitioner supported its claim of "error of essential fact" under RPTL 550(3)(c) by pointing to the property cards for 11 neighboring class 4 properties, all assessed in 1989 and 1990 at $250,000 per acre. Respondent introduced no evidence or argument to support the new stated valuation of $609,840 for petitioner's single acre. As the trial court concluded, the "various exhibits submitted by petitioner consisting of property cards of properties located in the general vicinity as the subject property (including four adjacent properties) clearly demonstrate[d] that petitioner is entitled to the relief that it seeks." The Appellate Division reversed, determining that because the tax was calculated on the stipulated settlement the acreage error was not considered in valuing the property. We now reverse.
The undisputed evidence, including the value of nearby properties, supported the trial court's conclusion that in this case the acreage error affected calculation of the assessment and the tax owed. We agree, further, with the trial court that reliance on the parties' stipulation was unavailing here, as petitioner's challenge was to years not previously settled.
Simons, J. (dissenting):
I would affirm.
The evidence in the record does not support a finding that an error in recording the acreage for petitioner's land for the years in question "resulted in an incorrect assessed valuation" and therefore constituted an "error in essential fact" warranting relief under Real Property Tax Law § 550(3)(c).
Petitioner is the owner of one acre of improved property in Oyster Bay. From 1977 until 1986 the property was correctly described in the handwritten records of the assessor and assessed at $64,750 (8% of full value). In 1986 the parcel and all similar property was revalued and reassessed. The new assessed value of petitioner's property was set at $110,200. Petitioner filed a tax certiorari proceeding which resulted in a negotiated settlement for 1986-1987 and 1987-1988 reducing the assessments for those years to $92,200 and $99,200 respectively. The reductions were attributed in the settlement and on the tax records to the assessed value of the improvements; the assessed value of the land remained constant. The property has been assessed at $99,200 ever since.
In 1986, the County's handwritten assessment records were transferred to computers and in the process petitioner's property, previously described as approximately one acre, was erroneously described as four acres. Petitioner first discovered the error in 1990 and demanded refunds for 1989-1990, 1990-1991, 1991-1992. The assessor corrected the error but denied any refund.
The majority agree with petitioner's contention that this error in acreage infected the valuation and resulted in the property being over-assessed. Accordingly, they hold petitioner is entitled to a reduction in the assessment and a refund of taxes paid on the erroneous assessment.
It is plaintiff's burden, if it is to prevail on this proceeding, to establish that the acreage indicated by the computer records was not only erroneous but that the error was considered by the assessor and "resulted in an incorrect assessed valuation" (RPTL § 550)[c]). Undeniably there was an error in the size of the land recorded in the computer but in my judgment petitioner has failed to prove that the error infected the assessor's judgment and caused an incorrect assessed valuation. Indeed, the inferences to be drawn from the evidence are the other way.
First, there is no evidence in the record that the existing assessment is unfair or unequal in relation to others or that it should be reduced because petitioner has been compelled to pay a disproportionate share of taxes. Yet the relief granted by the majority here will establish an assessment for the three years in question at $50,200, an amount far below any assessed value the property has enjoyed since at least 1977.
Second, the prior litigation addressed the assessment for the 1987 and 1988 tax years and thus the error appeared on the tax record at the time of the litigation and the June 1988 judgment settling the litigation. Because of this, one of two logical conclusions appears inescapable: (1) either the reassessment (and the ensuing settlement) was based on the correct land size on the handwritten card; or (2) if the 1986 reassessment was based on the incorrect computer record, the parties were aware of the error and - if they believed the assessors had relied on it - adjusted the assessment accordingly during the tax certiorari proceeding. Yet, there was no adjustment to the land values in the settlement and, more importantly, no evidence that the error played any part in the stipulated value contained in the settlement and carried forward for the years now in question. Nevertheless, petitioner now demands refunds for these three years, claiming the assessed value agreed upon is based on an essential error in fact. It seems obvious that if the error infected the assessment, this sophisticated petitioner, or the attorneys that represented it at that time, would have recognized that the one acre parcel was being assessed as if it were a four acre parcel and demanded a lower assessed land value at that time. Although the settlement and the correction of the records which followed produced inconsistencies in some of the values assigned to land or improvements in the area (a not uncommon result of tax litigation), it is manifest that the assessment agreed upon and carried forward by the assessors in following years reflects the judgment of the assessors of the value of the property as it actually exists and not a value based upon an error in the computer description of the size of the property.
I therefore dissent.
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Order reversed, with costs, and judgment of Supreme Court, Nassau County, reinstated in a memorandum. Chief Judge Kaye and Judges Bellacosa, Smith, Levine and Ciparick concur. Judge Simons dissents and votes to affirm in an opinion in which Judge Titone concurs.