C.J. Betters v. Beaver County ~ Appeal of: Beaver County , 200 A.3d 1044 ( 2018 )


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  •          IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    Charles J. Betters, Bet-Tech          :
    International, Inc., C.J. Betters     :
    Corporation, C.J. Betters Real        :
    Estate Corporation, Betters Real      :
    Estate Holdings, L.P., Barclay Hills  :
    Builders, LLC., Village               :
    Shops I, L.P., Village Shops II, L.P.,:
    Aliquippa Tin Mill, L.P., Midland L.P.,
    :
    Brodhead North Associates, L.P.       :
    :
    v.                  : No. 152 C.D. 2018
    : Argued: October 16, 2018
    Beaver County and Tony Amadio,        :
    Daniel C. Camp III, and Sandie Egley, :
    Beaver County Commissioners, and      :
    Kevin J. McIlwain, Chief Assessor     :
    :
    Green Township Board of Supervisors, :
    Hopewell Township Board of            :
    Commissioners, and Potter Township :
    Board of Supervisors                  :
    :
    Appeal of: Beaver County and Tony     :
    Amadio, Daniel C. Camp III and        :
    Sandie Egley, Beaver County           :
    Commissioners, and Kevin J. McIlwain, :
    Chief Assessor                        :
    BEFORE:     HONORABLE ROBERT SIMPSON, Judge
    HONORABLE MICHAEL H. WOJCIK, Judge
    HONORABLE JAMES GARDNER COLINS, Senior Judge
    OPINION
    BY JUDGE WOJCIK                                    FILED: December 18, 2018
    Beaver County, Beaver County Commissioners Tony Amadio, Daniel
    C. Camp III, and Sandie Egley, and Chief Assessor Kevin J. McIlwain (collectively,
    the County) appeal from an order of the Court of Common Pleas of Beaver County
    (trial court) that determined that the County’s base-year method of property
    valuation violated the Uniformity Clause of Article VIII, Section 1 of the
    Pennsylvania Constitution and the Consolidated County Assessment Law
    (Assessment Law)1 and mandated the County to complete a countywide
    reassessment by 2020. The County asks whether the trial court erred by refusing to
    exclude objected-to expert testimony and in determining that Taxpayers2 were
    entitled to relief despite the fact that they did not introduce any evidence that they
    have suffered a specific harm to their particular properties. Discerning no error, we
    affirm.
    I. Background
    In December 2015, Taxpayers filed a complaint in mandamus to
    compel the County to perform a countywide reassessment pursuant to Section
    8801(b)(1)(i) of the Assessment Law, 53 Pa. C.S. §8801(b)(1)(i).                      Taxpayers
    alleged, inter alia, that the last countywide assessment was in 1982, and that the
    County has been applying insufficient and outdated methods for valuing properties,
    which are grossly inequitable and non-uniform. According to Taxpayers, the 1982
    base year was so long ago that the values are not logically related to the present; all
    new construction since 1982 is assessed at the 1982 values; and the County’s
    assessment of properties at 50% of their market value is not uniform throughout the
    County. Taxpayers further asserted that the County’s base-year system does not
    1
    53 Pa. C.S. §§8801-8868.
    2
    Taxpayers are Charles J. Betters, Bet-Tech, International, Inc., C.J. Betters Corporation,
    C.J. Betters Real Estate Corporation, Betters Real Estate Holdings, L.P., Barclay Hills Builders,
    LLC., Village Shops I, L.P., Village Shops II, L.P., Aliquippa Tin Mill, L.P., Midland L.P., and
    Brodhead North Associates, L.P. They are various entities that own parcels of real property
    throughout the County.
    2
    have a method to equalize the assessed values of property that have been subject to
    assessment appeals and the assessments of properties to their predetermined ratios.
    They alleged that the base-year system effectively freezes some assessments at their
    predetermined ratios yet permits properties subject to recent reassessment appeals to
    be valued at 100% of their current market values with the mandatory application of
    the common level ratio. Based on the foregoing, Taxpayers averred that the County
    was in violation of the Uniformity Clause of the Pennsylvania Constitution and the
    Assessment Law. Taxpayers requested the trial court to order the County to exercise
    its authority to undertake a countywide reassessment.
    In response, the County and Intervenors3 filed preliminary objections,
    which the trial court denied. The County and Intervenors filed answers to the
    complaint. Thereafter, Taxpayers served the County with requests for admissions
    to which the County responded.
    The trial court held a nonjury trial, during the course of which
    Taxpayers offered the testimony of expert witnesses, Joseph Nardone and Robert
    Denne, and their reports. Nardone testified that he was on the team that conducted
    the last countywide reassessment in Beaver County in 1982, which is still the base
    year used in assessing property. Nardone testified that he assembled a four-man
    team, including himself, Denne, Daniel Anderson and Michael Suley, to analyze and
    proffer an opinion regarding the uniformity of the County’s system of property tax
    assessment. Nardone served as a project manager. Anderson extracted data from
    the County’s Computer Assisted Mass Appraisal (CAMA) system. Suley compiled
    sales data from the Multiple Listing Service (MLS), more specifically, the West
    3
    Intervenors are the Green Township Board of Supervisors, Hopewell Township Board of
    Commissioners and Potter Township Board of Supervisors. They have chosen not to participate
    in this appeal.
    3
    Penn Multi-list. Thereafter, Denne performed calculations on the data compiled by
    Anderson and Suley. Based on this data, Denne opined that the County has a
    coefficient of dispersion (COD) of 34.5% and that the system of tax assessment
    employed by the County was not uniform.
    The County and Intervenors objected to Denne’s conclusions arguing
    that they were hearsay because neither Anderson nor Suley testified, and that a
    proper foundation for Denne’s testimony had not been laid. Reproduced Record
    (R.R.) at 160a-61a. However, the trial court overruled their objections, stating:
    The [County] and the Interveners [sic] all had received the
    report [of Denne] in advance, they knew the identity of
    those individuals who collect[ed] the data, and if there’s a
    witness that’s not going to be here, then that witness’s
    absence is not only attributed to the [Taxpayers], it’s going
    to be attributed to any available party who [sic] could’ve
    called that witness to the stand.
    R.R. at 161a. The trial court stated it would entertain motions to continue the hearing
    so that the County could bring in the necessary witnesses, which the County
    declined. R.R. at 171a.
    At the close of the hearing, the County and Intervenors each moved for
    a nonsuit, pursuant to Pa. R.C.P. No. 230.1, on the basis that: Taxpayers did not lay
    a proper foundation for Denne’s testimony; Taxpayers did not introduce any
    evidence relating to their specific properties; and, mandamus relief is not available.
    The trial court denied their motions. Ultimately, on December 28, 2017, the trial
    court issued a 28-page opinion and order declaring that the base-year method of
    valuation employed by Beaver County violates the Uniformity Clause and the
    Assessment Law because it does not reflect, uniformly and accurately, the proper
    assessed values of the 96,000 tax parcels in the County. The trial court directed the
    4
    County to conduct a countywide reassessment by June 15, 2020. From this decision,
    the County filed the instant appeal.
    II. Issues
    In this appeal,4 the County contends that the trial court erred by
    admitting Denne’s testimony over lack of proper foundation and hearsay objections.
    In addition, it asserts that the trial court erred by determining that Taxpayers were
    entitled to relief despite the fact that they did not introduce any evidence that they
    have suffered a specific harm to their particular properties as a result of the County
    not doing a countywide reassessment since 1982.
    III. Discussion
    A. Evidence
    The County claims that the trial court erred by admitting Denne’s
    testimony into evidence over the objections of the County and Intervenors because
    the facts upon which Denne relied were not articulated or made part of the record.
    Pursuant to Rule 705 of the Pennsylvania Rules of Evidence, the salient facts relied
    upon as the basis of the expert opinion must be in the record so that the factfinder
    may evaluate the opinion. Rule 705 differs from the federal rules of evidence, which
    do not require the expert to disclose facts upon which an opinion is based prior to
    expressing the opinion. Instead, the cross-examiner bears the burden of probing the
    basis of the opinion. Such is not the case under Pennsylvania’s evidentiary rules.
    Here, Denne performed calculations on sales data provided by Suley. However,
    Taxpayers did not present the testimony of Suley or offer the sales data relied upon
    4
    In tax assessment appeals, our review is limited to determining whether the trial court
    abused its discretion, committed an error of law, or made findings unsupported by substantial
    evidence. Fasnacht v. Board of Property Assessment Appeals of Schuylkill County, 
    156 A.3d 365
    ,
    368 (Pa. Cmwlth. 2017).
    5
    by Denne. Moreover, Nardone and Denne both testified that Suley did not merely
    report sales data, but “weeded out all non ‘arms-length transactions’” prior to
    delivering the data to Denne. Appellants’ Brief at 11. The County asserts that it is
    unclear which sales were excluded or how the data was compiled or manipulated.
    In overruling their objections, the trial court inferred that if the County wanted the
    facts upon which Denne’s opinions were based to be made part of the record, the
    County could have subpoenaed witnesses, i.e., Anderson and Suley, to testify. See
    R.R. at 171a. However, it was not the County’s burden under Pennsylvania’s Rules
    of Evidence to probe the basis of the expert opinion.
    Rule 705 of the Pennsylvania Rules of Evidence states: “if an expert
    states an opinion the expert must state the facts or data upon which the opinion is
    based.” Pa.R.E. 705. The Comment to Rule 705 provides that the rule differs
    significantly from its federal counterpart, F.R.E. 705, which does not require an
    expert witness to disclose the facts upon which an opinion is based prior to
    expressing the opinion; instead the cross-examiner bears the burden of probing the
    basis for the opinion. Pa.R.E. 705, Comment. Pennsylvania does not follow the
    Federal Rule. See id.; see also Kozak v. Struth, 
    531 A.2d 420
    , 423 (Pa. 1987)
    (declining to adopt F.R.E. 705, the Court reasoned that “requiring the proponent of
    an expert opinion to clarify for the jury the assumptions upon which the opinion is
    based avoids planting in the juror’s mind a general statement likely to remain with
    him in the jury room when the disputed details are lost”). Kozak requires disclosure
    of the facts used by the expert in forming an opinion. 531 A.2d at 423. The required
    disclosure can be made by simply stating the facts or data upon which the opinion is
    based. See Packel and Poulin, Pennsylvania Rules of Evidence, §705-1 at 769 (4th
    ed. 2013).
    6
    Moreover, Rule 703 provides:
    An expert may base an opinion on facts or data in the case
    that the expert has been made aware of or personally
    observed. If experts in the particular field would
    reasonably rely on those kinds of facts or data in forming
    an opinion on the subject, they need not be admissible for
    the opinion to be admitted.
    The Comment to Rule 703 recognizes that the first two sentences of the rule are
    identical to its federal counterpart, F.R.E. 703. Pa.R.E. 703, Comment. However,
    It does not include the third sentence of the Federal Rule
    that provides that the facts and data that are the bases for
    the expert’s opinion are not admissible unless their
    probative value substantially outweighs their prejudicial
    effect. This is inconsistent with Pennsylvania law which
    requires that facts and data that are the bases for the
    expert’s opinion must be disclosed to the trier of fact. See
    [Pa.R.E.] 705.
    [Pa.R.E.] 703 requires that the facts or data upon which an
    expert witness bases an opinion be “of a type reasonably
    relied upon by experts in the particular field . . . ” Whether
    the facts or data satisfy this requirement is a preliminary
    question to be determined by the trial court under
    [Pa.R.E.] 104(a). . . .
    When an expert testifies about the underlying facts and
    data that support the expert’s opinion and the evidence
    would be otherwise inadmissible, the trial judge upon
    request must, or on the judge’s own initiative may, instruct
    the jury to consider the facts and data only to explain the
    basis for the expert’s opinion, and not as substantive
    evidence.
    An expert witness cannot be a mere conduit for the opinion
    of another. An expert witness may not relate the opinion
    of a non-testifying expert unless the witness has
    reasonably relied upon it in forming the witness’s own
    opinion. See, e.g., Foster v. McKeesport Hospital, [394
    
    7 A.2d 1031
     (Pa. Super. 1978)]; Allen v. Kaplan, [
    653 A.2d 1249
     (Pa. Super. 1995)].
    
    Id.
    In Commonwealth v. Thomas, 
    282 A.2d 693
    , 698 (Pa. 1971), the
    Supreme Court permitted an exception to the rule allowing experts to rely upon
    reports of others not in evidence, i.e., inadmissible hearsay, provided the reports
    were of the type customarily relied on by the expert in the field in forming opinions.
    Although Thomas was limited to medical opinions, the exception has been expanded
    in non-medical opinion cases. See, e.g., Commonwealth v. Bowser, 
    624 A.2d 125
    (Pa. Super. 1993) (state trooper’s reliance upon hearsay evidence from local car
    dealerships regarding book sizes and weights of cars involved in accident for
    purposes of computing their relative speeds at impact did not render the trooper’s
    opinion testimony regarding reconstruction of the accident inadmissible);
    Steinhauer v. Wilson, 
    485 A.2d 477
    , 479 (Pa. Super. 1984) (expert’s testimony
    concerning cost of repairing alleged defects in house properly admitted where
    estimates expert gave were his own, even though they might have been reached in
    part by reliance upon hearsay figures provided by various subcontractors whom he
    had consulted). The proponent must establish that the facts or data forming the bases
    for the opinion are the type reasonably relied upon by experts in the particular field.
    Kimberly Clark Corp. v. Workers’ Compensation Appeal Board (Bullard), 
    790 A.2d 1072
    , 1076 (Pa. Cmwlth. 2001).
    In addition, Rule 104 provides: “The court must decide any preliminary
    question about whether a witness is qualified, a privilege exists, or evidence is
    admissible. In so deciding, the court is not bound by evidence rules, except those
    on privilege.” Pa.R.E. 104 (emphasis added). The Rule is premised on the notion
    that “the law of evidence is a ‘child of the jury system’ and that the rules of evidence
    8
    need not be applied when the judge is the fact finder. The theory is that the judge
    should be empowered to hear any relevant evidence to resolve questions of
    admissibility.” Pa.R.E. 104, Comment (citing Commonwealth v. Raab, 
    934 A.2d 695
     (Pa. 2007)) (emphasis added). A court’s decision to admit evidence does not
    preclude the parties from offering evidence relevant to the weight or credibility of
    the evidence. See Pa.R.E. 104(e).
    Here, the trial court conducted a nonjury trial. Denne and Nardone
    testified that utilizing the MLS is in accord with the International Association of
    Assessing Officers (IAAO) standards. R.R. at 133a, 146a; see Clifton v. Allegheny
    County, 
    969 A.2d 1197
    , 1233 (Pa. 2009) (recognizing wide acceptance of the IAAO
    standards for evaluating the adequacy of an assessment). Denne testified that the
    IAAO established standards in the 1990s for judgments to be made on assessment
    of real property for tax purposes. R.R. at 154a-55a.
    Nardone testified that he assembled a team with the objective of
    gathering information about sale prices and assessment values in order to evaluate,
    under the IAAO standards, uniformity in assessment. R.R. at 117a. Nardone tasked
    Anderson to extract both assessment and sales data from the County’s CAMA
    system. However, Nardone testified that the sales data from the County’s system
    was outdated and unavailable so the sales data was obtained from the MLS. R.R. at
    129a-33a, 146a. According to Nardone, the accepted practice of obtaining data from
    the MLS was customary, if not preferred, and within the IAAO standards. R.R. at
    133a, 146a. Nardone discussed the challenges the team faced with data retrieval and
    explained in detail how the team matched the parcel identification numbers from the
    MLS sales data to the parcel identification numbers in the County’s assessment data.
    R.R. at 135a-37a.
    9
    Nardone further testified that Suley extracted the sales data from the
    MLS. R.R. at 118a, 142a. According to Nardone, Suley utilized “valid arm’s length
    sales transactions” from the MLS to correlate with the master file of County records
    prepared by Anderson. R.R. at 142a; Supplemental Reproduced Record (S.R.R.) at
    19a. Denne testified that Suley pulled actual sales transactions rather than houses
    simply listed for sale. R.R. at 198a, 201a. Denne testified that, while the MLS is
    not foolproof, he based his opinion on over 4,500 records. R.R. at 198a, 201a.
    Denne reviewed sales records from 2014 through 2017, explaining that the “the more
    sales you have, . . . the more reliability you have in the statistics your [sic]
    calculating as they may apply to the population.” R.R. at 202a.
    Denne admitted that he refined the sales data from 6,500 properties to
    4,500 properties because some of the data could not be matched to the County
    records. R.R. at 201a. Denne testified he adhered to “the trimming rules that are
    recited in the report and promulgated by [the] IAAO in terms of discarding sales that
    fall outside the bounds of 1 1/2 interquartile ranges from the median ratio.” R.R. at
    202a.
    Upon review, Taxpayers disclosed the facts upon which Denne based
    his opinion. Taxpayers established that the MLS was an accepted resource of sales
    data sanctioned by the IAAO to assist assessment experts in formulating opinions.
    Although some of the testimony was based on hearsay evidence, such was
    permissible under Rule 104 in the context of ruling on the admissibility of Denne’s
    opinions. The County offers no basis upon which to conclude that the data gathered
    and relied upon by Denne was unreliable. Although Suley and Anderson, the team
    members tasked with gathering sales and assessment data, did not testify, Nardone
    and Denne testified regarding the contents of the data assembled that formed the
    10
    bases of Denne’s expert opinion. The County was in possession of the reports
    prepared by both Nardone and Denne (S.R.R. at 15a-46a), and fully aware of the
    data relied upon, yet chose not to subpoena Suley or Anderson to testify or present
    any evidence to refute the testimony of Denne. In response to the County’s
    evidentiary objections, the trial court afforded the County the opportunity to
    continue the hearing to call additional witnesses, which it declined. R.R. at 171a.
    Thus, the trial court did not err or abuse its discretion by admitting Denne’s
    testimony over the County’s and Intervenors’ objections.
    B. Nonsuit
    Next, the County claims that the trial court erred by denying the
    County’s motions for nonsuit where Taxpayers failed to introduce any evidence of
    a harm or damage personal to them. According to the County, the taxpayer is only
    entitled to relief under the Uniformity Clause if it can show its property is assessed
    at a higher percentage of fair market value than other properties. Such was not
    shown here.     In fact, Taxpayers’ expert admitted he did not know if any of
    Taxpayers’ properties were part of the data he analyzed in forming his conclusion.
    The Uniformity Clause of Article VIII, Section 1 of the Pennsylvania
    Constitution provides “all taxes shall be uniform, upon the same class of subjects,
    within the territorial limits of the authority levying the tax, and shall be levied and
    collected under general laws.”      Pa. Const. art. VIII, §1.     The “Pennsylvania
    Constitution requires that property valuations be based, as nearly as practicable, on
    the relative value of each property to market value.” Clifton, 969 A.2d at 1213-14;
    accord Downingtown Area School District v. Chester County Board of Assessment
    Appeals, 
    913 A.2d 194
    , 199 (Pa. 2006).
    11
    Our Supreme Court has held that, when a taxpayer presents a
    Uniformity Clause challenge to a county’s method of valuation, “the taxpayer must
    demonstrate a lack of uniformity in assessments, whether the result of a single,
    isolated misassessment of his own property or the result of a statutory scheme of
    valuation causing mass misassessment.” Clifton, 969 A.2d at 1213 (emphasis
    added). In Clifton, the Supreme Court interpreted the Uniformity Clause as requiring
    all real property to be treated as a single class entitled to uniform treatment. Id.
    The County relies on In re: Sullivan, 
    37 A.3d 1250
     (Pa. Cmwlth. 2012),
    Garret Group, L.P. v. County of Schuylkill, 
    667 A.2d 255
     (Pa. Cmwlth. 1995), and
    Smith v. Carbon County Board of Assessment, 
    10 A.3d 393
     (Pa. Cmwlth. 2010), as
    requiring a taxpayer to prove that its property has been treated differently than other
    property owners. However, in these cases, the taxpayers were challenging their
    individual assessments and offered proof regarding the lack of uniformity as it
    pertained to their properties as compared to similar properties. The taxpayers in
    those cases were not challenging the statutory scheme.
    In contrast, Taxpayers here filed a mandamus action challenging the
    entire statutory scheme of valuation, not their individual assessments, as violative of
    the Uniformity Clause and Assessment Law.                 They have asserted mass
    misassessment in the County.
    Mandamus is appropriate if it is instituted to compel official
    performance of a duty and where there is a legal right in the plaintiff and
    corresponding duty in the defendant. Beattie v. Allegheny County, 
    907 A.2d 519
    ,
    524 (Pa. 2006). In Beattie, the Supreme Court set forth a two-part test required to
    be met in order to invoke a trial court’s equitable jurisdiction. First, the taxpayer
    must “raise a substantial constitutional issue.” 907 A.2d at 524. Second, the
    12
    taxpayer must “lack an adequate remedy through the administrative appeal process.”
    Id. at 524-25. “[W]here relying solely on the statutory appeal mechanism would
    result in a ‘multiplicity of duplicative lawsuits and, in contrast, an action in equity
    would provide a tidy global resolution,’ the legal remedy should be deemed
    inadequate.” Id. at 527 (quoting Kowenhoven v. Allegheny County, 
    901 A.2d 1003
    ,
    1008 (Pa. 2006)); accord Clifton, 969 A.2d at 1227 (observing the individual appeals
    process is inadequate to address claims of pervasive inequities). In Clifton, the
    Supreme Court endorsed the exercise of equity jurisdiction to entertain the plaintiffs’
    as-applied uniformity challenge to an assessment statute. Clifton, 969 A.2d at 1209
    n.17; see Valley Forge Towers Apartments N, LP v. Upper Merion Area School
    District, 
    163 A.3d 962
    , 970 (Pa. 2017).
    In support of their mandamus action, Taxpayers demonstrated a lack of
    uniformity in assessments based on a sampling of 4,500 properties sold between
    2014 and 2017. Having challenged the system as a whole, Taxpayers did not pursue
    multiple, duplicative lawsuits based upon individual property tax assessment
    appeals. See Beattie, 907 A.2d at 527. Consequently, evidence of a harm or damage
    personal to them was not required. See Clifton. Thus, the trial court did not err or
    abuse its discretion by denying the County’s and Intervenors’ motions for nonsuit
    on this basis.
    IV. Conclusion
    Upon review, the trial court did not err or abuse its discretion by
    admitting Denne’s testimony or denying nonsuit. Accordingly, we affirm.
    MICHAEL H. WOJCIK, Judge
    13
    IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    Charles J. Betters, Bet-Tech          :
    International, Inc., C.J. Betters     :
    Corporation, C.J. Betters Real        :
    Estate Corporation, Betters Real      :
    Estate Holdings, L.P., Barclay Hills  :
    Builders, LLC., Village               :
    Shops I, L.P., Village Shops II, L.P.,:
    Aliquippa Tin Mill, L.P., Midland L.P.,
    :
    Brodhead North Associates, L.P.       :
    :
    v.                  : No. 152 C.D. 2018
    :
    Beaver County and Tony Amadio,        :
    Daniel C. Camp III, and Sandie Egley, :
    Beaver County Commissioners, and      :
    Kevin J. McIlwain, Chief Assessor     :
    :
    Green Township Board of Supervisors, :
    Hopewell Township Board of            :
    Commissioners, and Potter Township :
    Board of Supervisors                  :
    :
    Appeal of: Beaver County and Tony     :
    Amadio, Daniel C. Camp III and        :
    Sandie Egley, Beaver County           :
    Commissioners, and Kevin J. McIlwain, :
    Chief Assessor                        :
    ORDER
    AND NOW, this 18th day of December, 2018, the order of the Court of
    Common Pleas of Beaver County, dated December 28, 2017, is AFFIRMED.
    __________________________________
    MICHAEL H. WOJCIK, Judge