Small town wins big tax case

Court sides with town in dispute between Brookline and log home builder

BROOKLINE — The house at 1062 Grassy Brook Road isn't visible to passersby.

But it is a big property in every sense of the word: 9,880 square feet of living space on a 292 acre spread that includes two covered bridges. A real estate listing trumpets the Montana log home as a “secret escape into the wild” with “million-dollar views.”

The property also has loomed large in town affairs, as Brookline officials and the home's builder engaged in a prolonged, expensive tax fight that went to the Vermont Supreme Court three times.

Now, the long-running dispute appears to have finally ended.

A panel of three Supreme Court justices sided with Brookline in an entry order issued July 13, rejecting former property owner Michael Cornish's argument that the town had arbitrarily and erroneously valued his home at more than $2 million.

For a town of 530 people with an annual budget of less than $350,000, it's a significant victory that validates the assessment methods used by Brookline and other locales.

End of a long legal fight

“It's been quite a battle ... but we did the best we could, and we finally got the decision we wanted,” Brattleboro-based attorney Laurie Rowell, who represented Brookline in the case, told Selectboard members at a recent meeting.

Cornish - who recently lost the home to foreclosure - said he doesn't understand the court's decision but doesn't expect to initiate any further legal action against the town. “I'm done,” he said in a brief interview. “I'm moving on with my life.”

The home in question was finished in 2007, and the cost of construction has been estimated at $3 million to $4 million based on testimony in the court case. Court documents and online property listings tout features including a 4,526-square-foot basement and 3,000 square feet of exterior decks; the property also includes two covered bridges, a stream and a pond.

The home's value for tax purposes fluctuated significantly. The town's initial valuation of just under $2 million rose to roughly $3.5 million in 2009, then stayed at that level for several years, court documents say.

Given that there wasn't any precedent for assessing such a large home in Brookline, officials used a Computer Assisted Mass Assessment program to help set a valuation of $3.56 million in 2012.

“The town viewed the property as unique and determined that there were no comparable properties in the town,” Supreme Court justices recounted in a narrative of the case.

Cornish appealed the 2012 value, and Brookline's listers knocked the value down to $2.19 million after applying “modifiers for physical, functional and economic depreciation.” But Cornish kept pushing, taking his case to the town's Board of Civil Authority - which promptly bumped the valuation back up to $3.5 million.

Cornish sought to prove that his property was worth just $1.5 million, documents show.

Eventually, the case went to a state hearing officer, who sided with the listers' previous valuation of $2.19 million. After some adjustments, the property went on Brookline's grand list at just under $2.1 million.

Quality-rating questions

Cornish's main concern was the town's insertion of a quality rating factor of 10 in the computer-assisted assessment system. That's a relatively high number, given that the next-highest quality rating in town was a 4.5.

Supreme Court documents in 2014 show Cornish arguing that “the town intentionally manipulated that quality factor to arrive at its preconceived notion of what the assessed value of the house should be.”

Justices at that time didn't buy that argument, saying Cornish “has not shown that he is paying a disproportionate amount of the town tax burden.” But the justices twice remanded the case for further findings because they wanted clarification of inconsistencies in the state hearing officer's decision.

The officer's latest decision, issued in December 2015, further buttressed his support for Brookline's appraisal methods given that “the overall appeal and magnitude of the house was unlike any other property in town,” court documents say.

Cornish again objected, but Supreme Court Justices John Dooley, Marilyn Skoglund, and Harold Eaton rebuffed him in their new entry order. The justices wrote that the hearing officer's conclusion in the Cornish case is “supported by evidence in the record” and “was not arbitrary.”

“Taxpayer's disagreement with the hearing officer's conclusion does not demonstrate error,” the justices added.

Cornish labeled the decision “a hard one to figure out” given the lack of new evidence for the justices to consider in their latest decision. He also objected to the concept of his former home being labeled “unique” and thus assigned a much higher value, saying that's a “violation of the whole principle of the [taxation] system.”

'Each case is different'

But Cornish had no advice for other owners of large properties in Vermont.

“I guess each case is different, and everybody has their own situation,” he said. “You've got to let the court decide.”

In addition to the Supreme Court case, Cornish's property was subject to another recent legal proceeding: People's United Bank foreclosed and now is listed as the owner of the home.

Brookline officials are expecting that the bank, unlike Cornish, will meet the property's tax obligations. At the current assessment, the annual tax bill for 1062 Grassy Brook Road is $41,186 - a number that could have been more than $10,000 lower if Cornish had his way.

The property's value accounts for about 3 percent of the town's total grand list.

But for Brookline, the battle was about more than money. Town Clerk Guy Tanza, while declining to comment directly on the Cornish case, said local officials have to stand up for the integrity of their appraisal process.

“The bottom line is, the grand list is based on honest appraisals, and [listers] do the best they can,” Tanza said.

The town's attorney seconded that sentiment.

“I think it's the right thing to do,” Rowell said of Brookline's defense against Cornish's appeals. “It's preposterous, what he was asking for. You have to defend the grand list.”

“I think it made perfect sense to answer the appeal,” she added. “It's not a good idea to have a case brought before the Supreme Court and not defend yourself.”

The town's defense didn't come without a cost, as Brookline spent about $53,000 on the Cornish case - money officials don't expect to get back. While some legal actions allow for recovery of attorney's fees, “this isn't one of those cases,” Rowell told the Selectboard.

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