Monroe County Assessor v. Kooshtard Property I, LLC , 2015 Ind. Tax LEXIS 32 ( 2015 )

ATTORNEY FOR PETITIONER: ATTORNEY FOR RESPONDENT:
MARILYN S. MEIGHEN TIMOTHY J. VRANA
ATTORNEY AT LAW TIMOTHY J. VRANA LLC
Carmel, IN Columbus, IN
_____________________________________________________________________
IN THE
INDIANA TAX COURT
_____________________________________________________________________
Jul 02 2015, 2:16 pm
MONROE COUNTY ASSESSOR, )
)
Petitioner, )
)
v. ) Cause No. 49T10-1211-TA-00071
)
KOOSHTARD PROPERTY I, LLC, )
)
Respondent. )
______________________________________________________________________
ON APPEAL FROM THE FINAL DETERMINATION
OF THE INDIANA BOARD OF TAX REVIEW
FOR PUBLICATION
July 2, 2015
FISHER, Senior Judge
This case examines whether the Indiana Board of Tax Review erred in reducing
Kooshtard Property I, LLC’s land assessments for the 2008, 2009, and 2011 tax years
(the years at issue).1 The Court finds no error.
FACTS AND PROCEDURAL HISTORY
Kooshtard owns a three-acre parcel of land in Bloomington, Indiana on which it
operates a gas station and convenience store. During the years at issue, the Monroe
1
In a decision issued concurrently with this one, the Court has affirmed the Indiana Board’s
final determination that reduced Kooshtard’s land assessment from $1,200,000 to $1,050,000
for the 2010 tax year. See Kooshtard Prop. I, LLC v. Monroe Cnty. Assessor, No. 49T10-1404-
TA-00015 (Ind. Tax Ct. July 2, 2015).
County Assessor assigned Kooshtard’s land an assessed value of $1,200,000.
Kooshtard appealed the land assessments first with the Monroe County Property
Tax Assessment Board of Appeals and then with the Indiana Board. On August 16,
2012, the Indiana Board conducted a hearing during which Kooshtard presented,
among other things, a Summary Appraisal Report (Appraisal), completed in
conformance with the Uniform Standards of Professional Appraisal Practice (USPAP).2
(See Cert. Admin. R. at 108-160.) The Appraisal valued the land at $300,000 as of
March 1, 2006, based on the adjusted sales prices of four comparable properties.3
(See Cert. Admin. R. at 150-52.)
In response, the Assessor claimed that the Appraisal lacked probative value for
several reasons. For example, the Assessor pointed out that its March 1, 2006
valuation date was not the proper valuation date for any of the years at issue.4 (See
Cert. Admin. R. at 230-31.) In addition, the Assessor claimed the Appraisal’s “extreme”
adjustments to the sales prices of the comparable properties indicated that those
properties were not comparable to Kooshtard’s land at all. (See Cert. Admin. R. at 235-
36, 245-47, 254-55.) The Assessor also claimed that even if the properties were
comparable, the Appraisal was flawed because it did not contain the calculations
2
Belinda Graber, an Indiana certified general appraiser, and Christopher Graber, an Indiana
licensed appraiser trainee, prepared the Appraisal, but neither appeared at the Indiana Board
hearing. (See Cert. Admin. R. at 108, 213-17.)
3
The Appraisal adjusted the sales prices of the comparable properties to account for
differences in their size, utility, and topography from Kooshtard’s land. (See Cert. Admin. R. at
150-51.)
4
The relevant valuation dates for Kooshtard’s assessments were: January 1, 2007 for 2008,
January 1, 2008 for 2009, and March 1, 2011 for 2011. See 50 IND. ADMIN. CODE 21-3-3(a)-(b)
(2008) (repealed 2010) (see http://www.in.gov/legislative/iac/); 50 IND. ADMIN. CODE 27-5-2(c)
(2011) (see http://www.in.gov/legislative/iac/); 2011 REAL PROPERTY ASSESSMENT MANUAL
(Manual) (incorporated by reference at 50 IND. ADMIN. CODE 2.4-1-2 (2011) (see
http://www.in.gov/legislative/iac/)) at 7.
2
regarding, and the evidence to support, any of the “extreme” adjustments. (See Cert.
Admin. R. at 233-36, 247-51.) Finally, the Assessor asked the Indiana Board to uphold
her assessments because each was supported by certain sales data. (See Cert.
Admin. R. at 265-73, 293.)
On October 19, 2012, the Indiana Board issued a final determination in which it
found that despite certain flaws, the Appraisal provided the best indication of the value
of Kooshtard’s land. (See Cert. Admin. R. at 55-62 ¶¶ 30-47.) Accordingly, the Indiana
Board reduced Kooshtard’s land assessment from $1.2 million to $300,000 for each of
the years at issue.
On November 7, 2012, the Assessor initiated this original tax appeal. The Court
heard oral argument on June 7, 2013. Additional facts will be supplied as necessary.
STANDARD OF REVIEW
The party seeking to overturn an Indiana Board final determination bears the
burden of demonstrating its invalidity. Hubler Realty Co. v. Hendricks Cnty. Assessor,
938 N.E.2d 311, 313 (Ind. Tax Ct. 2010). The Court will reverse a final determination if
it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law; contrary to constitutional right, power, privilege, or immunity; in excess of or short
of statutory jurisdiction, authority, or limitations; without observance of the procedure
required by law; or unsupported by substantial or reliable evidence. IND. CODE § 33-26-
6-6(e)(1)-(5) (2015).
ANALYSIS
On appeal, the Assessor asks the Court to reverse the Indiana Board’s final
determination that reduced Kooshtard’s land assessments to $300,000 for two reasons.
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First, the Assessor contends that the Indiana Board failed to conduct an impartial review
of the record evidence. Second, the Assessor claims that the Indiana Board’s final
determination is arbitrary, capricious, and not supported by substantial or reliable
evidence.
I.
The Assessor claims that the Indiana Board’s final determination must be
reversed because the Indiana Board failed to conduct an impartial review of the record
evidence. (See Pet’r Br. at 5-9.) The Assessor contends that while the Indiana Board
acknowledged that Kooshtard’s Appraisal contained several flaws, it nonetheless
“engaged in an illogical analysis [] and committed error” by using the Assessor’s
evidence to “boost up” the Appraisal. (Pet’r Br. at 6-7.) In other words, the Assessor
argues that the Indiana Board determined the probative value of the parties’ evidentiary
presentations based on who prepared the evidence (i.e., an appraiser versus an
assessor) rather than its quality.5 (See Pet’r Br. at 5-8; Pet’r Reply Br. at 1-2; Oral Arg.
Tr. at 16-21.)
In its final determination, the Indiana Board explained that while it was “troubled”
by certain aspects of the Appraisal, it still provided the best indication of the value of
Kooshtard’s land for several reasons. (See, e.g., Cert. Admin. R. at 56-57 ¶ 33.) For
instance, the Indiana Board explained that although the Appraisal did not relate the
land’s appraised value to any of the valuation dates for the years at issue, other
evidence presented to it sufficiently linked the March 1, 2006 date to the relevant
5
The Assessor also contends that the Indiana Board’s pattern of giving more weight to an
appraiser’s work product and discounting a non-appraiser’s work product is evident from a
comparison to one of its other decisions. (See Pet’r Br. at 9-11.) The Court, however, need not
engage in such a comparison to resolve the matter at hand.
4
valuation dates. (See Cert. Admin. R. at 57-59 ¶¶ 35-38 (explaining that Kooshtard’s
property record cards that showed the Assessor never changed the $1.2 million land
assessment between 2006 and 2011, coupled with the Assessor’s claim regarding the
stability of land values, provided the necessary link).) Moreover, the Indiana Board
explained that while the Appraisal did not contain evidence to support its adjustments to
the comparable properties, the Assessor had not presented any evidence to rebut that
those adjustments were actually incorrect. (See Cert. Admin. R. at 56-57 ¶¶ 32-34.)
Finally, the Indiana Board found the Assessor’s sales data did not support her
assessments because she failed to relate the sales to the relevant valuation dates, and
she failed to establish that the properties were comparable to Kooshtard’s land. (See
Cert. Admin. R. at 59-62 ¶¶ 41-46.)
The Indiana Board’s final determination reveals, therefore, that it acted as an
impartial adjudicator because it reviewed and weighed the quality of both parties’
evidentiary presentations. Thus, to the extent the Indiana Board found Kooshtard’s
evidence best reflected the value of its land, this Court will not substitute its judgment
for that of the Indiana Board simply because the Assessor disagrees with the Indiana
Board’s decision. See Freudenberg-NOK Gen. P’ship v. State Bd. of Tax Comm’rs, 715
N.E.2d 1026, 1030 (Ind. Tax Ct. 1999) (explaining that the Court cannot reweigh the
evidence contained within the administrative record), review denied. Consequently, the
Assessor has not demonstrated that the Indiana Board’s final determination must be
reversed on this basis.
II.
The Assessor also contends that the Indiana Board’s final determination should
5
be reversed because it is arbitrary, capricious, and unsupported by substantial or
reliable evidence. (Oral Arg. Tr. at 14-15.) More specifically, the Assessor claims that
the Indiana Board improperly used her evidence regarding the stability of land values
against her (i.e., to render the Appraisal probative and her sales data from the same
period non-probative). (See Pet’r Br. at 7-8; Oral Arg. Tr. at 24-26.)
During the Indiana Board hearing, the Assessor claimed that between 2001 and
2012 the value of land was relatively stable. (See Cert. Admin. R. at 270-73, 293.) To
support that claim, the Assessor presented two sales disclosure forms that showed that
a comparable property along with its improvements sold for about $875,000 in 2001,
and then for $850,000 in 2012 after the improvements were removed. (See Cert.
Admin. R. at 182-88, 270-72.) The Assessor argued that Kooshtard’s total
assessments of $1,517,100 in 2008, $1,524,500 in 2009, and $1,570,000 in 2011 were
therefore correct given that the subject property sold for slightly over $1,644,000 in 2001
and a comparable property sold for $1,550,000 in 2005. (See Cert. Admin. R. at 102-
07, 172-81, 263-71, 292-93.)
In its final determination, however, the Indiana Board rejected the Assessor’s
claim that land values were stable for the entire 2001 through 2012 period because
Kooshtard’s property record cards indicated that the Assessor actually changed the land
assessments “dramatically” between 2002 and 2006. (See Cert. Admin. R. at 59-60 ¶¶
41-42; 102-07 (providing that Kooshtard’s land assessments ranged from $29,100 to
$1,200,000).) Moreover, the Indiana Board explained that the Assessor’s other sales
data lacked probative value because she failed to establish that the properties were
comparable to Kooshtard’s land. (See Cert. Admin. R. at 60-62 ¶¶ 43, 45-46.)
6
A final determination of the Indiana Board is arbitrary and capricious when it is
without some basis which would lead a reasonable person to the same conclusion as
the Indiana Board. See Dawkins v. State Bd. of Tax Comm’rs, 659 N.E.2d 706, 709
(Ind. Tax Ct. 1995). Similarly, a final determination of the Indiana Board is not
supported by substantial or reliable evidence when a reasonable person, after reviewing
the administrative record in its entirety, cannot find enough relevant evidence to support
the Indiana Board’s decision. See Amax Inc. v. State Bd. of Tax Comm’rs, 552 N.E.2d
850, 852 (Ind. Tax Ct. 1990). In this case, the administrative record reveals that the
Indiana Board’s finding regarding the instability of land values between 2001 and 2012
was based on the fact that other record evidence corroborated that finding, not simply
favoritism for an appraiser’s work product as the Assessor has alleged. (See, e.g., Pet’r
Reply Br. at 1.) Accordingly, the Court declines to find that the Indiana Board’s final
determination was arbitrary, capricious, or unsupported by substantial or reliable
evidence.
CONCLUSION
For all the foregoing reasons, the Court AFFIRMS the Indiana Board’s final
determination in all respects.
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