Seacoastonline. com brings the dispatch that the New Hampshire Supreme Court has affirmed without oral arguments a Rockingham County jury award of $130,000 to the owners of a bicycle shop named “Papa Wheelies,” as against the condemnor/city’s contention that it should have been $18,500. Why the big spread? As far as we can figure out from the newspaper report, the lower figure was in line with evidence of value the State Board of Tax Appeals used to value the subject property for tax purposes. See Elizabeth Dinah, Supreme Court Upholds $130 K Award for Papa Wheelies, Seacoastonline.com, October 9, 2013 — click here.
This is a problem on which the courts are split. Some allow evidence of tax valuation when the tax valuation figure was contended for by the owner, and its admission into evidence can be justified as an admission against interest. Others disagree because the purpose of valuation in these two types of cases is very different. It is proper (and indeed required in some states) that the fair market value awarded in eminent domain must be the highest price the owner could obtain in the market in a voluntary, arm’s length transaction. On the other hand, in valuation for tax purposes, the owner is free to contend for the lowest justifiable value — there is nothing wrong with that. After all, remember that value is a matter of opinion, not fact. Also, in tax valuation, if the valuers get it wrong, the property can be reassessed, whereas in eminent domain the judgment is final and there is no going back to redo it (unless there has been a prejudicial error of law) which is another story.
The taking in the Papa Wheelies case was of two temporary easements for new water and sewer lines, plus a permanent easement for two sewer lines.