Great Atlantic & Pacific Tea Co., Inc. v. Kiernan, 42 N.Y.2d 904 (1977)
The valuation of assessed property is a question of fact, and determinations of value affirmed by the Appellate Division will be upheld unless there is an error of law or a lack of evidentiary support, even where statistical data like nationwide percentage lease rates are given controlling significance.
Summary
Great Atlantic & Pacific Tea Co. (A&P) challenged the property tax assessment of its property. The case reached the New York Court of Appeals after the lower courts affirmed the assessment based largely on A&P’s expert’s valuation method, which utilized nationwide abstracts of percentage lease rates. The Court of Appeals affirmed, holding that the valuation was supported by evidence and that the use of such data, even with controlling significance, did not constitute an error of law, especially given the trial court’s rejection of the taxing authority’s comparable evidence. This case clarifies that industry-accepted statistical data can be a valid basis for property valuation, even if it plays a significant role in the final assessment.
Facts
The Great Atlantic & Pacific Tea Co. (A&P) challenged the property tax assessment of its property.
A&P’s expert appraiser used a method that incorporated nationwide abstracts of percentage lease rates to calculate income for valuation purposes.
The expert testified that this statistical data was widely relied upon in the shopping center trade.
The trial court rejected the comparable evidence introduced by the taxing authority.
Procedural History
The case originated in a lower court (Special Term) where the initial valuation was determined.
The Appellate Division affirmed the Special Term’s determination of value.
The case was then appealed to the New York Court of Appeals.
The Court of Appeals affirmed the Appellate Division’s order.
Issue(s)
Whether the Appellate Division erred as a matter of law in affirming a property valuation based primarily on nationwide abstracts of percentage lease rates, when such data was given controlling significance.
Holding
Yes, because the valuation of assessed property is essentially a question of fact, and the determination was supported by evidence widely relied upon in the shopping center trade. The fact that the data was given controlling significance does not establish an error of law, especially where the trial court rejected the taxing authority’s evidence.
Court’s Reasoning
The Court of Appeals emphasized that property valuation is primarily a factual determination. It cited Grant Co. v. Srogi, 52 NY2d 496, 510, stating that valuations affirmed by the Appellate Division must be upheld unless there is an error of law or a lack of evidentiary support.
The court found that Special Term’s determination was supported by the record, as it relied on A&P’s expert’s appraisal method, which used nationwide percentage lease rates. The expert testified that this data is widely used in the shopping center industry.
The Court referenced Matter of Woolworth Co. v Commissioner of Taxation & Assessment of City of Plattsburgh, 45 Misc 2d 701, noting that such data may be considered in determining value.
The court addressed the argument that the data was given “controlling significance,” stating that this alone does not establish an error of law. This was particularly true because the trial court had rejected the comparable evidence presented by the taxing authority, offering “articulated and acceptable reasons” for doing so.
The decision underscores the importance of factual findings in property valuation cases and the deference given to lower court decisions when supported by evidence and free from legal errors. This case provides precedent for using industry-standard statistical data in property valuation, even when such data plays a significant role in the final assessment.