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Eitan Sobel and Vered Sobel v. City of Rutland

October 12, 2012


On Appeal from Superior Court, Rutland Unit, Civil Division March Term, 2012 Mary Miles Teachout, J.

The opinion of the court was delivered by: Burgess, J.

Sobel v. City of Rutland (2011-436)

2012 VT 84

Supreme Court

PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.

¶ 1. Plaintiffs, Doctors Eitan and Vered Sobel, owners of a medical office building in Rutland, appeal the superior court's grant of summary judgment for defendant, City of Rutland. Plaintiffs sued the City for damages, claiming the City Tax Assessor (the Assessor) was negligent in providing allegedly inaccurate property tax estimates on the proposed, but not yet built, office. Plaintiffs also sought to enjoin the City from enforcing the tax assessment on the office building ultimately constructed. On appeal, they argue that the court erred in concluding that their negligence claim was barred by municipal immunity and that they failed to establish equitable estoppel against the City. We affirm.

¶ 2. The undisputed facts may be summarized as follows. In October 2008, plaintiffs bought a residential property with the goal of establishing a medical practice on the lot. Soon thereafter they contacted the Assessor by telephone when, as they characterized it, "nothing was concrete" and they were "trying to start playing with plans." Plaintiffs followed up on this telephone conversation with a series of emails. According to plaintiffs, they approached the Assessor strictly in his official capacity,althoughthey knew he was not obligated tooffer tax estimates.

¶ 3. In the first email to the Assessor in December 2008, plaintiffs advised of a plan to construct a 6000-square-foot building, but were also considering whether the building should be one or two stories tall. In the same email, plaintiffs indicated that they needed "to know in advance whether to go ahead and to build the second floor [and] hop[e] for 'better times.' " Plaintiffs asked for a tax estimate for both a one and two story building.

¶ 4. The Assessor replied to this first email as follows:

I ran some different scenarios with the information you supplied. Without the submission of detailed plans this is at best a very vague estimate. That said, I considered a brick exterior building comprised of . . . 6000 square feet of unfinished area on the second floor. . . . The present land value comprising .72 acres is 47,200 and that would be the value as of April 1, 2009 assuming the building is not in place at that time. If the building was in progress of being built as of that date the assessment would reflect the value in place [on] that date. Upon completion, a very cursory estimate would be $772,700 land included. Using the present tax rate, the annual property tax would be $21,400. I must advise you that these calculations are done per your request without having detailed plans with which to work. Accordingly these estimates could change. Once the building is complete and the assessment is established you will be granted all rights to appeal said value. (emphases added).

The Assessor's reply also included a separate section estimating the "approximate value of 6000 square feet one story to be about $371,500 land included," but noting that this was "an estimate without any plans to go by."

¶ 5. In February 2009, plaintiffs wrote another email, which in pertinent part advised that they were "reconsidering the idea of building the office," and were considering the option of renting or building a smaller office. Without attaching any plans, plaintiffs asked for the estimated value of a one floor, 4500-square-foot building. The Assessor replied with an estimate of $243,000 for the building plus $47,200 for the land. Next, plaintiffs asked for the yearly tax for this kind of building, the Assessor responded that, under the then current tax rate, the annual tax would be about $8050. Plaintiffs later explained they understood the estimates were "non-binding," but "assum[ed] it could be 10 percent more, 10 percent less."

¶ 6. Plaintiffs applied for a building permit in July, estimating the cost of improvements to be $700,000. With the permit in hand, plaintiffs provided TD Bank with building plans, and in November the bank issued a mortgage on the property in the amount of $490,000 to finance construction. The existing structure was demolished and construction on the new building was completed before April 1, 2010. The final cost of construction was approximately $700,000.

¶ 7. The Assessor examines new construction on April 1 of each year, andinspected and assessed plaintiffs' property at $649,100, with $96,500 reflecting the value of the land and $552,600 reflecting the value of the new building. On June 26, 2010, the Assessor received an email from plaintiffs stating that they were "surprised to receive your l[e]tter of appraisal valuing the building as $649,100" because it was "2¼ times more than [the] original estimate." Plaintiffs protested that,while they understood the Assessor could not "provide a final appraisal until the building ...

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