Forbes v. Town of Southwest Harbor
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 9
Docket:	Han-00-341	
Argue:		December 13, 2000
Decided:	January 16, 2001

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.

PETER FORBES

v.

TOWN OF SOUTHWEST HARBOR

RUDMAN, J.

	[¶1]  Peter Forbes appeals from a judgment entered in Superior
Court (Hancock County, Mead, C.J.), vacating the decision of the Southwest
Harbor Board of Assessment Review, which granted Forbes a 17% tax
abatement on property located on Greenings Island in Southwest Harbor.
The Town contends the court's judgment should be affirmed for numerous
reasons, including:  (1) the Board lacked jurisdiction to reconsider the
abatement because it failed to reconsider the abatement within 30 days as
required by 30-A M.R.S.A. § 2691(3)(F); (2) reconsideration was improper
because the stated basis for reconsideration was insufficient to satisfy the
requirements of the Town Ordinance; (3) the Board improperly assumed
Forbes's burden of proof and substituted its judgment for that of the
assessor; (4) the Board improperly considered evidence outside the record;
and (5) the Board incorrectly granted Forbes a partial abatement.   Forbes
argues that the Board's decision to grant the abatement was supported by
substantial record evidence.  We disagree with the Town's contentions.  For
the same reasons we stated in Town of Southwest Harbor v. Harwood, 2000
ME 213, --- A.2d ---, another Greenings Island abatement action involving
one of the issues encountered in this case, we agree with Forbes and vacate
the judgment of the Superior Court.

I.  BACKGROUND

	[¶2]  This appeal arises from the 1997 property tax assessment
conducted by the Town of Southwest Harbor of 14 Greenings Island
properties, one of which belongs to Peter Forbes.  Forbes purchased his
8.72-acre property-which included a three-story, shingle-style cottage{1}-in
1981 for $120,000.  The property is located at the northern tip of the
island in an area known as Sand Point and is encumbered by several
easements, including a conservation easement that places numerous
restrictions on the use of the property.     
	[¶3]  An assessment of the fair market value of the land on Greenings
Island has been difficult because, for many years, ownership of such land has
passed down to family members from generation to generation for nominal
consideration.   Southwest Harbor Assessor Thomas Edwards testified that
there had not been a fair market value sale since 1899.   Two sales of
properties on Greenings Island took place in 1995 and 1996, however,
prompting the Town to reassess the Island properties in 1997.{2}    As part of
this reassessment, Forbes's property was revalued at $932,600 ($698,800
for the land and $233,800 for the building) for the 1997 tax year, about a
49% increase over the prior year.{3}  Forbes sought an abatement from the
Town and was denied.  He appealed the denial to the Board.    
	[¶4]  After two hearings, the Board issued a decision on
February 9, 1999, affirming the assessment made by the Town.  Forbes filed
a timely motion to reconsider.  On February 10, 1999, the Board voted to
reconsider Forbes's appeal but tabled the reconsideration until May 11,
1999.  Forbes appealed the Board's initial denial to the Superior Court in
order to preserve his right to appeal and to protect his position with
respect to the 30-day time limit imposed by 30-A M.R.S.A. § 2691(3)(F).{4} 
The Superior Court (Hancock County, Kravchuk, C.J.) remanded, upon
Forbes's motion, the matter back to the Board for reconsideration.  
	[¶5]  On reconsideration, the Board vacated its decision and granted
Forbes a 17% abatement in a decision dated June 8, 1999.   On appeal by
the Town, the Superior Court did not reach the arguments put forth by the
parties, concluding on the merits that "[t]he Board made an error of law and
abused its discretion by creating a new formula for appraisal, unsupported by
any evidence in the record."   Pursuant to M.R. Civ. P. 59(e), Forbes filed a
motion asking the court to alter or amend its prior order.   The court
denied Forbes motion.   This appeal followed.

II.  DISCUSSION

	[¶6]  When the Superior Court acts as an intermediate appellate
court, we directly review the operative decision of the municipality, which
in this case is the Board.  Stewart v. Town of Sedgwick, 2000 ME 157, ¶ 4,
757 A.2d 773, 775 (citation omitted).  We review the Board's decision for an
abuse of discretion, error of law, or findings unsupported by substantial
evidence in the record.  Wesson v. Bremen, 667 A.2d 596, 598 (Me. 1995)
(citations omitted).   Substantial evidence exists when a reasonable mind
would rely on that evidence as sufficient support for a conclusion; the
possibility of drawing two inconsistent conclusions does not render the
evidence insubstantial.  Adelman v. Town of Baldwin, 2000 ME 91, ¶ 12,
750 A.2d 577, 583 (citations omitted).  We will not substitute our own
judgment for that of the Board.  Id.  To vacate the Board's findings, the
Town must demonstrate that no competent evidence supports the Board's
conclusions.  Id.

A.  No Violation of Town Ordinance.

	[¶7]  We review the Board's decision to reconsider a case for an
abuse of discretion.  See Camps Newfound/Owatonna, Inc. v. Town of
Harrison, 604 A.2d 908, 910 (Me. 1992).  The Town argues that "the bases
for reconsideration contained within Plaintiff's . . . request, do not factually
justify reconsideration under the provision of Article XI(B)" of the Town's
ordinance.   Section XI(B) of the Ordinance provides:

B.	Reconsideration should be for one of the following
reasons:

	1. The record contains significant factual errors due
to fraud or mistake, regarding facts upon which
the decision was based; or

	2.The Board misinterpreted the Ordinance, followed
improper procedures, or acted beyond its
jurisdiction.

Southwest Harbor, Me., Code § XI(B) (May 1992) (emphasis added).    The
Town argues that the two reasons delineated in Section IX(B) form the sole
bases for any reconsideration the Board takes.  Because neither of the stated
reasons was the basis of Forbes's motion to reconsider, the Town contends
that the Board's reconsideration of Forbes's case contravenes the ordinance.   
	[¶8]  Section XI(B) states that the reconsideration should be for one
of the delineated reasons.  We stated in a recent case that the use of the
term "should" is permissive.  See Adelman, ¶ 23, 750 A.2d at 585.   The
Town's interpretation, however, requires mandatory language, such as
"must" or "shall," neither of which is used in the provision at issue.  See id. 
Consequently, the Board is not strictly limited to the reasons stated in
Section XI(B) when determining whether to reconsider a case.

B.  No Consideration of Extraneous Evidence.

	[¶9]  Alternatively, the Town argues that the Board's purpose for
granting the reconsideration was improper because it was based on "new
evidence in the [prior] Harwood [proceeding,] which . . . is not part of the
record in this case."  Forbes contends that the Board's decision to
reconsider his case stemmed, not from the Harwood proceeding, but from
its realization that the Board's earlier decision was based on the mistaken
belief that Forbes's 1996 assessed value was not in evidence, preventing it
from making calculations to determine whether there was indeed an
overassessment.
	[¶10]  Although the record evidence shows that the Board
considered the prior Harwood proceeding as a possible factor for granting
the reconsideration, the Board ultimately did not rely on evidence
presented in the Harwood case.  The Board's final basis for granting Forbes a
reconsideration was the realization that it had not adequately sorted through
the evidence Forbes presented in the earlier deliberations and that Forbes
had, indeed, presented evidence relating to the 1996 assessment figures. 
The Board's decision to reconsider, therefore, was not improper, and the
Board did not abuse its discretion.
 
C.  30-Day Time Limit Does Not Apply.

	[¶11]  The Town argues that, because the Board neither complied
with Section XI(A){5} of the ordinance nor with 30-A M.R.S.A. § 2691(3)(F), it
lacked jurisdiction-even with a remand order by the Superior Court-to
reconsider the matter.  The Town argues, therefore, that the Board's
original decision denying the abatement must be reinstated.   Forbes
concedes that the Board did not comply with the time limit prescribed by
the statute and ordinance at issue.  Nevertheless, Forbes contends that
§ 2691(3)(F){6} was designed to protect taxpayers appealing from adverse
Board decisions and that rewarding the Town for the noncompliance of its
own Board would lead to illogical and unjust results.  Forbes also argues that
he had no control over the board members' schedules and should not be
penalized by the Board's noncompliance with the statute. 
	[¶12]  To understand the purpose of § 2691(3)(F), an examination of
the legislative history is helpful.  See L.D. 1198, Maine Municipal Association
Testimony (115th Legis. 1991).  In support of the amendments proposed by
L.D. 1198, Maine Municipal Association Representative Pat Finnigan
testified, in pertinent part:

[Subsections F and G] clarify the time periods for the board
to reconsider its actions or for people to appeal decisions of
the board to court.  Currently the board may reconsider its
action with[in] 30 days of making its decision; there is no
limit on when the board must reach a decision on its
reconsideration.  This causes a problem for the appellants if
they wish to appeal the board's decision to the Superior
Court because they only have 30 days from the time of the
original decision to appeal to the court.  Therefore, in order
to protect their claim in court, the claimants must
simultaneously seek reconsideration by the board and also
file their appeal with the court.

To remedy this, Sub-section F requires the board to
reconsider its previous action and also reach a decision
within 30 days of the original decision.  Sub-section G
expands the time frame for people to appeal the decision
from 30 days to 45 days.  This gives the appellants time to
find out if the board is going to find in their favor upon
reconsideration, before they decide if they need to appeal
the decision from 30 days to 45 days.  This gives the
appellants time to find out if the board is going to find in
their favor upon reconsideration, before they decide if they
need to appeal the decision to the Court.  The bill provide[s]
an extra two weeks (after the final reconsideration) to file an
appeal with the court.

Id.  (underscore in original; italics added for emphasis).  The plain language
and legislative history demonstrate that § 2691(3)(F) pertains to the Board
and delineate the Board's, not Forbes's, obligations.  Penalizing Forbes for
the failure of the Town's own Board to comply with the 30-day time limit
would lead to unjust results.
    
D.  No Consideration of Evidence Not in Record.

	[¶13]  The Town argues that a reading of the reconsideration
deliberations will show that Forbes's counsel "made what amounts to an
opening argument arguing his case not upon the facts presented in this
case, but by reference to what the Board may have heard in another case."
The Town further contends that the Board improperly adopted information
from the Harwood proceeding, which in turn adopted as evidence the
purchase by Jarvis Newman, another Greenings Island property owner, of
two parcels of land in September of 1996.  In so doing, the Town argues the
Board improperly assumed Forbes's burden of proof. 
	[¶14]  5 M.R.S.A. § 9059(4) provides  that "[a]ll material, including
records, reports and documents in the possession of the agency, of which it
desires to avail itself as evidence in making a decision, shall be offered and
made a part of the record and no other factual information or evidence shall
be considered in rendering a decision." 5 M.R.S.A. § 9059(4) (1989). An
agency, including the present Board, cannot use information that is not of
record.   City of Biddeford v. Adams, 1999 ME 49, ¶ 10, 727 A.2d 346, 349. 
"The purpose of this rule is to give a party the opportunity to explain
adverse evidence." Id. (citation omitted).   To the extent that an agency
relies on information obtained outside of the record and the proceedings, it
has acted improperly.  Id.; see also Public Utilities Comm'n v. Cole's
Express, 153 Me. 487, 501, 138 A.2d 466, 472-73 (Me. 1958) (finding PUC
erred in basing its finding upon evidence or purported knowledge not made
a part of the record).    
	[¶15]  In City of Calais v. Calais Water & Power Co., 157 Me. 467, 174
A.2d 36 (Me. 1961), however, we held that a board may use adjudications in
other proceedings to dispose of issues in the proceeding before it if the
board first introduces, as evidence, the prior proceeding and makes it part
of the record in the present proceeding.  City of Calais v. Calais Water &
Power Co., 157 Me. 467, 474, 174 A.2d 36, 39-40 (Me. 1961) (stating, "[i]n
reaching its conclusion not to separate the properties in Calais from those
across the boundary line in New Brunswick, the Commission said that the
contention of the City upon the point had been disposed of in prior
proceedings.  Evidence of these prior proceedings was not introduced as
evidence and made a part of the record. . . . We [have] ruled . . . that
administrative bodies have no right to exercise adjudicatory or quasi judicial
functions on the basis of evidence not before it").   
	[¶16]  Except for the sale figures that were introduced at the earlier
hearing, the Harwood case was not introduced as evidence in Forbes's
proceeding.  To the extent that the Board relied on the prior Harwood
proceedings in its disposition of Forbes's case, therefore, it would have been
an improper consideration of information extraneous to the Forbes case, and
the Board's decision on reconsideration would be null and void.   However,
the Board did not rely on extraneous evidence.
	[¶17]  The record evidence shows that Forbes's attorney presented
new evidence-the Newman purchase and assessment figures-and
mentioned the Harwood proceeding only tangentially in explaining the
Newman purchase price and its importance to Forbes's proceeding.  The
Town had an opportunity to explain and dispute the Newman evidence and,
in fact, did so at length.   Similarly, the record establishes that the focus of
the Board was on the Newman evidence, which was properly offered in
evidence by Forbes's counsel at the start of the proceeding.   Contrary to the
Town's assertions, therefore, the Board did not improperly consider
evidence that was not in the record, nor did it relieve Forbes of his burden
of proof. 
E. There is Sufficient Record Evidence to Support Board's Decision.
	[¶18]  The Town argues that the record is completely devoid of
evidence to support the Board's determination on reconsideration that the
Forbes property was overassessed.  Contrary to the Town's assertions and for
the same reasons stated in Harwood, we conclude that, based on a review of
the entire record, there is substantial evidence to support the Board's
conclusions that Forbes's property was substantially overvalued as of April 1,
1997.  See Harwood, 2000 ME 213, --- A.2d --- .
	The entry is:

Judgment of the Superior Court vacated. 
Remanded to the Superior Court with
instructions to affirm the decision of the
Board of Assessment Review.Attorney for plaintiff:

William H. Dale, Esq., (orally)
Jensen Baird Gardner & Henry
P O Box 4510
Portland, ME 04112

Attorney for defendant:

John L. Carver, Esq., (orally)
Carver, Kimball & Baiungo
10 Church Street
Belfast, ME 04915

FOOTNOTES******************************** {1} . The cottage was built in 1895 and is dubbed the "white elephant" by the Forbes family. Before he bought it, Forbes testified that the property had been on the market for over three years. One abutting neighbor was given an option to buy the property but declined to exercise the option. This neighbor and the other prospective buyers viewed the cottage as a "white elephant." Consequently, Forbes argued that the cottage, rather than enhancing the value of the property, was a "sale-killer." Over the course of several tax appeals, the town agreed to reassess the house from $300,000 in 1996 to $233,800. Forbes testified that the $233,800 figure "has been used by the town through two subsequent tax assessors." {2} . In June 1995, Peter Harwood bought a 19.3-acre parcel for $520,000. The assessed value of the property was $400,200. This property abuts a 9.78-acre parcel Harwood bought in April 1981. Harwood also appealed to the Board and received an abatement, which-like Forbes's case-was then vacated by the Superior Court. See Town of Southwest Harbor v. Harwood, 2000 ME 213, ¶ 2, --- A.2d ---. Harwood appealed, we vacated the court's judgment, and upheld the decision of the Board. Id. In September 1996, Jarvis Newman purchased two parcels on the island for $730,000, roughly 21% more than the assessed value. For the purposes of determining fair market value, Forbes and the Board have combined Newman's purchase of the two lots as one lump purchase. The Town, however, contends the Newman transaction constitutes two separate sales, including a 5.25-acre lot for $501,000 and a 4.59-acre lot for $229,000. In April 1997, six months after the purchase of the property, the Town assessed Newman's property at $883,200, a 21% increase from the sale price. {3} . In 1996, Forbes's property was assessed at $625,300 ($325,000 for the land and $300,000 for the building). To get the 49% figure, therefore, the following mathematical equation was used: 932,600/625,300 = 1.491444068 --> 1.49 (rounded off)-->49% increase. {4} . 30-A M.R.S.A. § 2691(3)(F) provides: The board may reconsider any decision reached under this section within 30 days of its prior decision. A vote to reconsider and the action taken on that reconsideration must occur and be completed within 30 days of the date of the vote on the original decision. The board may conduct additional hearings and receive additional evidence and testimony as provided in this subsection. 30-A M.R.S.A. § 2691(3)(F) (1996). {5} . Section XI(A) provides: A. The Board may reconsider any decision. The Board must decide to reconsider any decision, notify all interested parties and make any change is [sic] its original decision within 30 days of the date of the vote on the original decision. A meeting to decide whether to reconsider shall be called by the Chairperson in accordance with Section VI of this Ordinance. The Board may conduct additional hearings and receive additional evidence and testimony. Southwest Harbor, Me., Code § XI(A) (May 1992). {6} . Forbes did not respond to the Town's assertions with respect to Section XI(A), presumably because the wording of Section XI(A) is similar to § 2691(3)(F). Because the language of the provisions at issue are similar, our legal analyses for § 2691(F)(3) applies to Section XI (A) of the Town's Ordinance.