On Appeal from Property Valuation and Review Division Michael Bernhardt, State Appraiser
Joseph A. DeBonis of DeBonis, Wright & Carris, P.C., Poultney, for Plaintiff-Appellant.
John C. Thrasher of Ceglowski & Thrasher, LLC, Rupert, for Defendant-Appellee.
PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.
¶ 1. Taxpayer, Vanderminden, a Family Limited Partnership, owns a contiguous piece of property located in the adjoining Towns of Poultney and Wells. This appeal concerns the portion of the property in the Town of Wells. The state appraiser affirmed the Town’s valuation of this parcel at $122, 000. On appeal, taxpayer argues that the state appraiser erred in: (1) failing to provide a sufficient explanation for the decision and accepting the Town’s valuation without sufficient supporting evidence; (2) assessing the Wells and Poultney properties as a single parcel and valuing the Wells portion as if its best use was for a seasonal dwelling; and (3) not accepting taxpayer’s evidence that the property is assessed above fair market value. We reverse and remand.
¶ 2. Taxpayer’s aggregate property is 1.49 acres with 715 feet of lake frontage on Lake St. Catherine. The property is improved with a seasonal camp, a garage, water, and a sewage system. All of the improvements are located on the Poultney portion. The Wells portion is.09 acres  including 125 feet of lake frontage. It is shown on the Town of Wells tax map as a roughly triangular small piece of land that sticks out into the lake. The maximum depth of the land is fifty feet, and it tapers to zero feet on each side as it crosses the town boundary.  Apparently, this piece is reachable by land only by proceeding over the Poultney portion of taxpayer’s land. 
¶ 3. For 2011, the Town of Wells assessed the Wells portion of the property at $130, 200. Taxpayer grieved that assessment, and the listers adjusted the value to $122, 000 to reflect that the overall property had 715 feet of lake frontage. Apparently, the Town’s land schedule assigns a per-foot value for lake frontage that decreases as the amount of overall lake frontage increases.  Following taxpayer’s appeal, the Board of Civil Authority affirmed the listers’ valuation. Taxpayer then appealed to the state appraiser.
¶ 4. At the hearing, three listers represented the Town. They put the listers’ card in evidence and explained that the parcel was assessed by using a per-foot value for lake frontage. One of the listers explained that this amount was then adjusted with a neighborhood multiplier of 2.5 and grade adjustment of 0.5. The amount was also adjusted to reflect the depth of the property. The printed part of the card said that that adjustment reflected an “effective depth” of fifty feet, but there is a handwritten addition that says depth “reduced to 30’ for value purpose.”  The Town did not, however, introduce the land schedule, identify the starting per foot land value, or reproduce the calculation that led to its ultimate result.
¶ 5. Taxpayer presented evidence from an expert, who testified that the Wells parcel would not meet state soil or setback requirements for a septic system. In a letter of opinion, the expert also stated that the property would not meet the state’s minimum setback requirements for the construction of a building that requires potable water and a wastewater disposal system. Taxpayer also introduced evidence of the sales of three properties in Poultney that had lake frontage as evidence of the fair market value of the Wells property. Taxpayer introduced the listers’ card for the Poultney portion of the property, and a calculation of the value of the Wells land as if it was located in Poultney. Taxpayer testified that in his opinion the highest and best use for the Wells portion of the property is as a parking lot and that its value is $30, 000.
¶ 6. The Town challenged the three sales in Poultney offered by taxpayer, arguing that the sales were not indicative of the fair market value of taxpayer’s land because the properties were in inferior neighborhoods and did not offer the same lake view. The Town also argued that the Wells portion could not be separated from the whole for assessment purposes, but should be valued as part of the larger parcel of land. The Town explained that it was not valuing the Wells portion as a separately developable piece of property but as additional lake frontage on a developed lot. The Town explained that certain attributes of the property were considered in the valuation but that there was no discount applied to the property for its failure to meet building or septic setback requirements.
¶ 7. The state appraiser conducted a site visit and issued a written decision. The appraiser rejected taxpayer’s assertion that the best use for the property was as a parking lot. From the site visit, the appraiser observed that the land has a deck and sitting area and concluded that the land had greater value than just as a parking lot since it supported the land in Wells. The appraiser did not accept the Poultney sales submitted by taxpayer as indicative of the fair market value of the Wells property, concluding that two sales from 2006 were outdated and that the remaining one did “not support the contention that the Subject has been assessed improperly.” The appraiser concluded that taxpayer had not met its burden of proving that the Town’s valuation was incorrect and affirmed the listed value of $122, 000. Taxpayer appealed that decision to this Court.
¶ 8. There are two aspects to this case: the procedural and the substantive. We begin with the procedural component. First, we summarize the shifting burdens that we have applied in many cases. When a taxpayer grieves an assessment to the state appraiser, there is a presumption that the Town’s assessment is valid. City of Barre v. Town of Orange, 152 Vt. 442, 444, 566 A.2d 951, 952 (1989). This is a bursting bubble presumption; if the taxpayer presents any evidence that his property was appraised above fair market value, then the presumption disappears, and “it is up to the town to introduce evidence that justifies its appraisal.” Adams v. Town of West Haven, 147 Vt. 618, 619-20, 523 A.2d 1244, 1245 (1987). Once the presumption disappears, the Town is required to show either “that it substantially complied with the relevant statutory and constitutional requirements” or that its valuation was supported by independent evidence of fair market value. Littlefield v. Town of Brighton, 151 Vt. 600, 602, 563 A.2d 998, 1000 (1989). The ultimate burden of persuading the court that the Town’s appraisal is incorrect “remains with the taxpayer.” Adams, 147 Vt. at 620 n.*, 523 A.2d at 1245 n.*.
¶ 9. On appeal, we accord deference to decisions of the state appraiser and “will set aside the state appraiser’s findings of fact only when clearly erroneous.” Barnett v. Town of Wolcott, 2009 VT 32, ¶ 5, 185 Vt. 627, 970 A.2d 1281 (mem.). Where the state appraiser’s valuation is supported by some evidence from the record, “the appellant bears the burden of demonstrating that the exercise of discretion was clearly ...