Barbara O. Christie, Trustee of the Barbara O. Christie Trust v. U.S. Trust Bank of America Private Wealth Management as Trustee of the James Julian Christie Trust U/A (2013)

MEMORANDUM OF DECISION

In this partition action regarding real property located at 486 Horse Hill Road in the Town of Westbrook, Connecticut, the Trusts, through their representatives appeared for trial on October 29, 2013.   Each trust holds a one-half undivided interest in the site.   The parties stipulated to all of the relevant facts alleged in the complaint with the exception of the value of the real property.   Each has also agreed upon a partition by private sale, subject to the court's finding of fair market value.   The Plaintiff is to purchase the Defendant's one-half interest.   From the facts before it, the court finds that such a conclusion to this litigation is equitable and approves it.   As set forth in detail below, the court determines the fair market value of the property to be Six Hundred and Seventy–Five Thousand ($675,000.00) Dollars.

DISCUSSION

A. Right to partition by sale

Connecticut case law and the partition statue, Connecticut General Statutes § 52–495 et seq., clearly recognize the right of owners of property in a partition action to request a partition by sale.  “Since our law has for many years presumed that a partition in kind would be in the best interests of the owners, the burden is on the party requesting a partition by sale to demonstrate that such a sale would better promote the owners' interests.”   Delfino v. Vealencis, 181 Conn. 533, 538, 436 A.2d 27 (1980).  “Section 52–500 vests with the court the discretion to order a sale at the request of any of the interested parties;  it does not require a request by all of those parties.”  (Internal quotation marks omitted.)  Rissolo v. Betts Island Oyster Farms, LLC, 117 Conn.App. 344, 352, 979 A.2d 534 (2009).   And as noted above, in this case, both parties have requested it.   Further, “a partition action requires that the court balance the equities between the parties.”   Id., 353.  “It is the interests of all of the tenants in common that the court must consider;  ․ and not merely the economic gain of one tenant, or a group of tenants.”  (Citations omitted.)  Delfino v. Vealencis, supra, 181 Conn. 543.   At present, the beneficiary of the Plaintiff Trust resides in the dwelling located on the premises and the Defendant Trust is prepared to sell its interest in the property.   It argues that it has a fiduciary obligation to secure market value of its beneficiaries.   A sale from one trust to the other accomplishes each trust's objectives.   And having balanced those equities, the court concludes that the requested private sale is an equitable outcome and approves it.

1. Valuation

(a) Plaintiff's Appraiser

And so the one remaining area of dispute in this case is the fair market value of this property.   The property on 486 Horse Hill Road in Westbrook consists of approximately ninety acres of land ¹ with one dwelling, an uncompleted cottage and a garage located close to Horse Hill Road. Each of the parties secured the services of an appraiser and each appraiser testified at trial.   Each chose a markedly different approach and methodology to valuation of this property.   Plaintiff's appraiser, Jeffrey R. Gibson, concluded, after examining six other comparable properties, that the site had a market value of Three Hundred and Seventeen ($317,000.00) Thousand Dollars.   He determined that market value was what the home could be sold for, without regard to any other potential uses of the property other than its present use as a single-family home.   He did not evaluate the excess acreage for development potential.   He concluded the overall condition of the home was fair, with deferred maintenance.   He considered comparable sales of like-kind property, attempting to locate recent sales of properties with some excess acreage and homes in similar condition to the subject property.   Because of the unusual size of the parcel in question, the comparables he chose required considerable adjustment beyond what is required for a home on a standard building lot in the zone in which the property is located.   He gave an excess acreage value of One Thousand ($1,000) Dollars per acre.   He did note in his appraisal report that because of the required adjustments for size, condition and acreage, the adjustments “exceed the desired parameters.” ²  Those standard limits are twenty-five (25%) percent or less and none of the comparables he was able to locate were at that percentage rate.   He stated he was unable to appraise the development potential of this parcel as he was not a commercial appraiser.   He noted on cross examination he had no knowledge of any restrictions on the land that would prohibit development.

(b) Defendant's Appraiser

Defendant's appraiser, Marc P. Nadeau, determined the fair market value from properties he considered comparable to the subject real estate to be Six Hundred and Seventy–Five ($675,000) Dollars.   He did not view his task as appraising the property as a single-family residence with excess acreage.   In his opinion, the structures on the property did not contribute a great deal of value to the parcel.   They are close to the road, dated and only in fair condition.   The cottage is unfinished.   He concluded that most purchasers would demolish the structures.   Rather, in his opinion, the unique character of the site lay in the size of the parcel, its extensive fifteen hundred (1,500) feet of frontage on Horse Hill Road, its location one mile distant from Interstate–95 and the nature of the land itself.   The land, he noted, was rich in vegetation, had good drainage and was generally uplands in the first half of the parcel away from the road.   All these, he noted, are characteristics consistent with development quality.   And the parcel is the single largest in the area with development potential.

In preparation of his report, Mr. Nadeau met with the Town Engineer, reviewed the soil maps, plotted the wetlands on the parcel, located in the center of the property, and walked the parcel.   He noted the presence of ledge on the eastern rear edge of the parcel.   He reviewed a survey map and the town regulations for the zone and for potential development.   He concluded that the parcel generally could be developed.   The comparable sales he chose, different from those of Mr. Gibson, were all parcels which had development potential, some already approved and permitted, but most not.   He, too, needed to make adjustments outside of the twenty five (25%) percent range, but noted for an appraisal for development potential, a limit was not required, as it was not a “bank” appraisal, such as the one Mr. Gibson performed.   He had also prepared a chart of comparative values per acre of such sites in the past three years and found acreage generally of large parcels in the area that had sold in the past three years to be valued for an average at Eight Thousand Eight Hundred ($8,800.00) Dollars per acre.³  He, too, knew of no restrictions on the potential development of the parcel, given its unique site characteristics.

(c) Fair Market Value

With such widely divergent property values, the real issue under the circumstances of this case is how is fair market value to be determined?

“A property's highest and best use is commonly accepted by real estate appraisers as the starting point for the analysis of its true and actual value ․ [U]nder the general rule of property valuation, fair [market] value, of necessity, regardless of the method of valuation, takes into account the highest and best [use] of the land ․ A property's highest and best use is commonly defined as the use that will most likely produce the highest market value, greatest financial return, or the most profit from the use of a particular piece of real estate.”  (Citations omitted;  internal quotation marks omitted.)  United Technologies Corp. v. East Windsor, 262 Conn. 11, 25, 807 A.2d 955 (2002).

When determining the highest and best use of property, a court must consider whether there is a “reasonable probability” that the property could be put to that use.  Northeast Ct. Economic Alliance, Inc. v. ATC Partnership, 272 Conn. 14, 25, 861 A.2d 473 (2004);  cf. (in valuing land to be partitioned, “[a] judge can properly consider the uses to which the property might be applied or to which it is reasonably adapted”).   Similarly, when the feasibility of a proposed highest and best use of property is dependent on obtaining some action from a land use agency, if that action “is reasonably probable and not merely a remote or speculative possibility, the probability may properly be considered in the determination of the fair value of the property.”  (Internal quotation marks omitted.)  Greene v. Burns, 221 Conn. 736, 745, 607 A.2d 402 (1992).   See also Eisenberg v. Tuchman, 94 Conn.App. 364 (2006).

The court concludes that fair market value of the Horse Hill Road property is its highest and best use;  that of a residential development.   Neither appraiser knew of any reason the parcel could not be developed.   Nor could either point to any restrictions in the zoning regulations or other regulations which would prohibit such development.   The court concludes from such testimony and the evidence before it, that there is a reasonable probability, therefore, that the site can be so developed.   This is based on the credible evidence concerning the favorable characteristics of the site, its wetlands, in addition to the limited presence of ledge, as well as the zoning and wetlands requirements of the Town of Westbrook generally.

The court is persuaded that a reasonable estimate of the parcel's fair market value is Six Hundred and Seventy Five Thousand ($675,000.00) Dollars as an undeveloped parcel of land with potential for residential development and so finds.   The site's present market value is hereby established.   A private sale is therefore ordered that the Plaintiff pay to the Defendant one-half of the established market value of 486 Horse Hill Road, Westbrook, Connecticut within a reasonable time.

BY THE COURT

Barbara M. Quinn, Judge

FOOTNOTES

FN1. The two appraisers testified as to their differing conclusions as to the full acreage of the property as somewhere between eighty-eight acres as listed on the assessor's card to ninety-three and one-half (93.5) acres based on a survey of the subject property.   See Plaintiff's exhibit 1, Appraisal Report of Jeffrey A. Gibson, and Defendant's Exhibit A, Appraisal Report of Marc P. Nadeau..  FN1. The two appraisers testified as to their differing conclusions as to the full acreage of the property as somewhere between eighty-eight acres as listed on the assessor's card to ninety-three and one-half (93.5) acres based on a survey of the subject property.   See Plaintiff's exhibit 1, Appraisal Report of Jeffrey A. Gibson, and Defendant's Exhibit A, Appraisal Report of Marc P. Nadeau.

FN2. Plaintiff's Exhibit 1, supra..  FN2. Plaintiff's Exhibit 1, supra.

FN3. Defendant's Exhibit B, Chart of Area Residential Land Sales..  FN3. Defendant's Exhibit B, Chart of Area Residential Land Sales.

Quinn, Barbara M., J.