Appeals from the Order of the Court of Common Pleas of Delaware County in case of Gulf Oil Corporation v. Delaware County Board of Assessment Appeals et al., No. 81-19355.
Henry T. Reath, with him, Robert B. Parks, Duane, Morris & Heckscher, for appellants/appellees, Gulf Oil Corporation.
Peter J. Nolan, with him, A. Leo Sereni, for appellees/appellants, Board of Assessment Appeals of Delaware County, Township of Darby, Southeast Delco School District.
Judges MacPhail and Barry, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Barry. Judge Williams, Jr., did not participate in the decision in this case. Concurring and Dissenting Opinion by Senior Judge Kalish.
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Appellant, Gulf Oil Corporation (Gulf), owns a ninety-seven acre crude oil tank farm in Darby Township, Delaware County. In 1982, the oil, which was received from ships, was placed in the tanks whose taxability is at issue. The oil contains water which must be removed for the refining process. When the water has been pumped, the oil is heated to control viscosity and agitated to standardize the mix for refining purposes. The oil is then delivered by pipeline under the Schuylkill River to a refinery in Philadelphia where it is processed.
Gulf appealed an initial $310,000.00 assessment of the storage tanks to the Delaware County Board of Assessment Appeals (Board) which dismissed the appeal. Gulf then appealed to the Court of Common Pleas of Delaware County where the issues were the excludability of these oil tanks from taxation, the applicable ratio of assessed value to fair market value, the fair market value of the taxable property and the assessment for the 1982 tax year. It was the trial court's view that the tanks were not subject to tax because of their direct role in the refining process. It concluded that the proper ratio was ten per cent and the fair market value of taxable property was $2,697,500.00 based on evidence presented by the taxing authorities. The trial court, therefore, assessed the subject taxable property at $269,750.00 for 1982. Before us Gulf appeals the ratio determination and the taxing authorities (Darby Township, Southeast Delco School District and the County of Delaware) and the Board cross-appeal the exclusion of the tanks from taxation.
Gulf alleges error because the trial court admitted a summary of a ratio study and testimony based on the summary which was, it contends, inadmissible hearsay evidence. This summary was produced on a single computer printout sheet. Mr. John Deitch, the Board
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Chairman, testified that the study was initiated at his direction (6/28/83, R. p. 101) and carried out by the Data Processing Department of the Board (6/28/83, R. p. 104). He testified that the study was based on 10,546 sales of real estate recorded in the Recorder of Deeds Office in Delaware County from July 1, 1980 to June 30, 1981 (6/28/83, R. p. 101), of which 3,701 sales were eliminated because they comprised sales that were not arm's length transactions (6/28/83, R. p. 106). Mr. Deitch further stated that this information was placed into the computers by employees of the Board (6/28/83, R. p. 106); he was, however, unable to verify the technique by which the employees eliminated certain sales nor could he vouch for the underlying data used to compute the summary (6/28/83, R. pp. 108-114). Mr. Deitch apparently did not personally analyze the sales (6/28/83, R. pp. 108-114) and was unable to produce the data which supported the conclusions of the summary (6/28/83, R. pp. 109-111). In our view, the trial court erred by admitting the summary and allowing Mr. Deitch to testify on this subject.
We held in Appeal of Chartiers Valley School District, 67 Pa. Commonwealth Ct. 121, 447 A.2d 317 (1982), dismissed in 500 Pa. 341, 456 A.2d 986 (1983), that the trial court properly excluded from evidence the results of computer studies which allegedly demonstrated a lower assessment to market value ratio because the taxpayers' witnesses were not personally familiar with the data used and could not guarantee the accuracy of the information filed or trustworthiness of the individuals responsible for placing the data into the computers. The situation is similar here. Mr. Deitch had no personal knowledge concerning the compilation of the data, did not participate in programming the information for the computers, and did not vouch for the employees who gathered the data or who
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fed it into the computers. We conclude, therefore, that the trial court erred by admitting this hearsay evidence.
We, moreover, note that the elimination of such a large number (over 35%) of the actual real estate sales transactions in the Board's ratio study deprived it of significant evidential value. Chartiers Valley. Although evidence of every recent sale need not be produced by a taxpayer in a taxing district, Deitch Co. v. Board of Property Assessment, 417 Pa. 213, 209 A.2d 397 (1965), he must produce a ...