6800 Avery Rd., L.L.C. v. Franklin Cty. Bd. of Revision , 107 N.E.3d 220 ( 2018 )

[Cite as 6800 Avery Rd., L.L.C. v. Franklin Cty. Bd. of Revision, 2018-Ohio-822.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
6800 Avery Road, LLC, :
Appellant-Appellant, :
No. 17AP-363
v. : (C.P.C. No. 13CV-13168)
Franklin County Board of Revision et al., : (REGULAR CALENDAR)
Appellees-Appellees. :
D E C I S I O N
Rendered on March 6, 2018
On brief: Kaltenbach Vargo, LLC, and James G. Vargo, for
appellant. Argued: James G. Vargo.
On brief: Rich & Gillis Law Group, Mark. H. Gillis, and
Richelle L. Thoburn, for appellee Board of Education of the
Dublin City School District. Argued: Richelle L. Thoburn.
APPEAL from the Franklin County Court of Common Pleas
SADLER, J.
{¶ 1} Appellant-appellant, 6800 Avery Road, LLC, appeals from a judgment of the
Franklin County Court of Common Pleas in favor of appellees-appellees, Franklin County
Board of Revision ("BOR"), Franklin County Auditor ("auditor"), and the Board of
Education of the Dublin City School District ("school district"). For the reasons that follow,
we affirm.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} On February 11, 2011, appellant, by and through its principals, Edward Polina
and Richard Coleman, purchased the real property at issue in this case for $250,000 at a
sheriff's sale. For the year 2010, the auditor assigned a fair market value for the property
No. 17AP-363 2
of $491,800. On March 31, 2011, appellant filed a complaint with the BOR, pursuant to
R.C. 5715.19(A), challenging the auditor's valuation and seeking a reduction in the fair
market value to $101,004.65 for the 2010 tax year. The school district filed a
countercomplaint seeking to retain the auditor's value.
{¶ 3} The BOR conducted an evidentiary hearing on the complaint on October 30,
2016. Polina appeared at the hearing with counsel, and he testified as to the description of
the property and the method he used to determine the value of his property. Polina
described the property as a one acre, undeveloped residential lot that abuts a roundabout.
He stated the other three corner lots that make up the property surrounding the
roundabout are zoned commercial. According to Polina, the reason appellant purchased
the property is as follows:
And so the logic was to get it rezoned and put an office building
to put my company in. And what had happened, I -- evidently
years ago I think a Speedway gas station was trying to get it
rezoned to put a gas station. So the homeowner's association
rallied and did everything they could to stop that.
And ever since then, they've had the same taste in their mouth
that they want to keep anything commercial off of that corner.
And they think that it's good for a home to be built there. So
that's why it's currently zoned residential and that's why it has
not changed.
(Oct. 30, 2013 Tr. at 10.)
{¶ 4} Polina stated appellant has made no effort to market the property, preferring
to hold on to it until the abutting property owners changed their minds about rezoning.
With respect to appellant's estimate of fair market value, Polina testified he compared the
auditor's tax valuations for several surrounding residential properties to appellant's
undeveloped parcel and calculated a fair market value per square foot for each property.
Polina's counsel explained to the BOR appellant's method of valuation as follows:
And currently the appraised value of the land, according to the
County records, is 491,800. [B]ased off of the County records
of -- of land that's close to it, adjacent to it, that's also zoned
residential.
And what we did, we -- we broke down, you know, the value.
We looked at the acreage value. * * * There's nothing on this,
No. 17AP-363 3
it's undeveloped, there's no house on this land. And what we
looked at was what is compare -- what are the comparable land
costs of other properties in that area.
And what we see is the subject property is currently valued at,
according to the Auditor's records, at $6.82 per square foot,
while the surrounding land that -- that are -- that's residential
is valued anywhere from $1.09 to a high of 1.81, which is
actually a church property, per square foot.
So we feel that there's significant overvaluation right now by
the County.
(Oct. 30, 2013 Tr. at 4-5.)
{¶ 5} Over the school board's objection, appellant submitted the auditor's public
record showing the tax valuation of each of the properties surrounding appellant's parcel
and the square footage of each of those parcels. Appellant also submitted a chart comparing
the value per square foot for these six properties to the assessed value of his property per
square foot. Counsel for the school board cross-examined Polina, but the school board did
not present any other evidence at the hearing.
{¶ 6} The BOR announced its decision to deny appellant's request for a reduction
in value at a meeting held on November 1, 2013. Member Kimbol Stroud explained BOR's
decision to deny appellant's request as follows:
[W]e were presented testimony from the -- the owner of the
property regarding some of the physical attributes of the
property as well as zoning issues.
We were also presented a number of tax comparables which we
are rejecting as evidence of value due to WJJK Investments
versus Licking County BOR, Ohio -- Ohio Supreme Court. We
were not presented an appraisal report so we really,
unfortunately, you know -- we didn't have a -- a -- the sale of
the property we do not consider arm's length because it was a -
- a court-ordered sale, so we really have no competent
probative evidence of value on which to base the requested
reduction in value.
(Nov. 1, 2013 Tr. at 13-14.)
{¶ 7} The BOR issued a written decision memorializing its determination on
November 8, 2013. Appellant elected to appeal the BOR's decision to the Franklin County
No. 17AP-363 4
Court of Common Pleas under R.C. 5717.05. The trial court heard the appeal on the BOR's
record and the arguments of counsel. On April 25, 2017, the trial court issued a decision
adopting the auditor's valuation of appellant's property for the tax years 2010, 2011, and
2012.
{¶ 8} Appellant timely appealed to this court from the decision of the trial court.
II. ASSIGNMENT OF ERROR
{¶ 9} Appellant asserts a single assignment of error as follows:
The Trial Court acted unreasonably and unconscionably and
therefore abused its discretion by affirming the November 8,
2013 Decision of the Franklin County Board of Revision.
III. STANDARD OF REVIEW
{¶ 10} This court, in Kaiser v. Franklin Cty. Aud. & Franklin Cty. Bd. of Revision,
10th Dist. No. 10AP-909, 2012-Ohio-820, set out our standard of review in R.C. 5717.05
appeals as follows:
A party may appeal a decision of a county board of revision to
the court of common pleas under R.C. 5717.05 as an alternative
to an appeal to the Ohio Board of Tax Appeal pursuant to R.C.
5717.01. An appeal under R.C. 5717.05, while requiring more
than a mere review of the decision of the board of revision by
the court of common pleas, is properly limited to a
comprehensive consideration of the existing evidence and, at
the court's discretion, to an examination of additional evidence.
R.C. 5717.05; Black v. Bd. of Revision of Cuyahoga Cty., 16
Ohio St.3d 11, 14, 16 Ohio B. 363, 475 N.E.2d 1264 (1985). The
court of common pleas should consider the evidence heard by
the board of revision, any additional evidence heard at the
court's discretion, and apply its independent judgment to
determine the taxable value of the subject property. Id. R.C.
5717.05 thus does not mandate a trial de novo. Selig v. Bd. of
Revision, Mahoning Cty., 12 Ohio App.2d 157, 165, 231 N.E.2d
479 (7th Dist.1967). Upon further appeal to this court, our
review is limited to a determination of whether the court of
common pleas abused its discretion in determining the matter.
We will accordingly not reverse the court of common pleas'
judgment unless it is unreasonable, arbitrary or
unconscionable. Tall Pines Holdings, Ltd. v. Testa, 10 Dist. No
04AP-372, 2005-Ohio-2963, ¶ 19.
No. 17AP-363 5
Id. at ¶ 9. See also CABOT III-OH1M02, LLC v. Franklin Cty. Bd. of Revision, 10th Dist.
No. 13AP-232, 2013-Ohio-5301.
IV. LEGAL ANALYSIS
{¶ 11} When a taxpayer challenges the auditor's valuation of property before the
BOR, the taxpayer has the burden to prove entitlement to a reduction in value. Piepho v.
Franklin Cty. Bd. of Revision, 10th Dist. No. 13AP-818, 2014-Ohio-2908, ¶ 6, citing CABOT
III-OH1M02 at ¶ 27, citing Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd.
of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, ¶ 15. "When a party appeals a board of
revision's decision, the appellant, whether a taxpayer or a board of education, bears the
burden of proving its right to a reduction or increase in the board of revision's
determination of value." CABOT III-OH1M02 at ¶ 26, citing Bd. of Edn. of the Dublin City
Schools v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 193, 2013-Ohio-4543, ¶ 15, citing
Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564,
566 (2001). "To prevail on appeal, the appellant must present competent and probative
evidence supporting the value the appellant asserts." CABOT III-OH1M02 at ¶ 26, citing
Dublin City Schools at ¶ 15. See also WJJK Invests., Inc. v. Licking Cty. Bd. of Revision, 76
Ohio St.3d 29, 31 (1996).
{¶ 12} "Because 'the board of revision (or auditor) bears no burden to offer proof of
the accuracy of the appraisal on which the county initially relies [the common pleas court]
is justified in retaining the county's valuation of the property when an appellant fails to
sustain its burden of proof.' " Kaiser at ¶ 20, quoting Colonial Village Ltd. v. Washington
Cty. Bd. of Revision, 123 Ohio St.3d 268, 2009-Ohio-4975, ¶ 23. "As a result, the taxpayer's
failure to sustain a burden of persuasion will justify approving the board of revision's
valuation of the property even where no evidence is adduced in support of the validity of
the auditor's valuation." Kaiser at ¶ 20, citing Simmons v. Cuyahoga Cty. Bd. of Revision,
81 Ohio St.3d 47, 48 (1998).
{¶ 13} Pursuant to Article XII, Section 2 of the Ohio Constitution, "[l]and and
improvements thereon shall be taxed by a uniform rule according to value." "The Ohio
legislature and Supreme Court have construed 'value' to mean 'true value.' " Sears Roebuck
& Co. v. Franklin Cty. Bd. of Revision, 10th Dist. No. 90AP-472 (Dec. 20, 1990).
Accordingly, "[c]ounty auditors are charged with assessing the 'true value' of real property."
No. 17AP-363 6
Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 212, 2014-
Ohio-1940, ¶ 25, citing R.C. 5713.01(B). Ohio Adm.Code 5703-25-05(A)(1) defines "true
value" as "[t]he fair market value or current market value of property and is the price at
which property should change hands on the open market between a willing buyer and a
willing seller, neither being under any compulsion to buy or to sell and both having a
knowledge of all the relevant facts."
{¶ 14} Ohio Adm.Code 5703-25-11(C) states that "[l]and may be valued by four
principal methods [but that] [t]he preferred method is the market data or comparative
process requiring the collection and analysis of actual arms-length sales and other market
information on comparable sites made within a reasonable time of the date of the appraisal
with adjustments for variations. This method should be used except in unusual
circumstances."1 In addition to the methods of valuation authorized by the Ohio Revised
Code and Ohio Administrative Code, case law has adopted the owner-opinion rule as an
accepted method of valuing real property. In Worthington City Schools Bd. of Edn. v.
Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248, 2014-Ohio-3620, the Supreme Court of
Ohio addressed the application of the "owner-opinion" rule in proceedings to determine
the tax valuation of real property. The court made the following observations about the
rule:
Ordinarily, testimony as to property value is not competent and
admissible unless it is the professional opinion of an expert.
See Tokles & Son, Inc. v. Midwestern Indem. Co., 65 Ohio St.3d
621, 605 N.E.2d 936 (1992), paragraph one of the syllabus ("It
is a general rule of evidence that before one may testify as to his
opinion on the value of property, one must qualify as an
expert"). But equally well recognized is the exception allowing
an owner "to testify concerning the value of his property
without being qualified as an expert, because he is presumed to
be familiar with it from having purchased or dealt with it." Id.,paragraph two of the syllabus.
1Other methods set forth in the administrative code include: the allocation method in which the land value is
estimated by subtracting the value of the improvements from a known sale price; the land residual method
estimates land value by capitalizing the residual income imputable to land as derived from actual or
hypothetical new improvements assuming highest and best use; and the development method used in valuing
land ready for development by estimating value as fully developed and subtracting the development,
administrative, and entrepreneurial costs. Ohio Adm.Code 5703-25-11(C).
No. 17AP-363 7
Indeed, "Ohio law has long recognized that an owner of either
real or personal property is, by virtue of such ownership,
competent to testify as to the market value of the property."
Smith v. Padgett, 32 Ohio St.3d 344, 347, 513 N.E.2d 737(1987). Grounds for this "owner-opinion rule" lie in the
assumption that the owner " 'possess[es] sufficient
acquaintanceship with [the property] to estimate the value of
the property, and [the owner's] estimate is therefore received
although his knowledge on the subject is not such as would
qualify him to testify if he were not the owner.' " (Emphasis
added in Smith.) Id., quoting 22 Corpus Juris, Evidence,
Section 685, at 586-587 (1920). The court has recognized the
validity of the owner-opinion rule in the context of valuing
realty for tax purposes. Amsdell v. Cuyahoga Cty. Bd. of
Revision, 69 Ohio St.3d 572, 574, 1994-Ohio-314, 635 N.E.2d
11 (1994); WJJK Investments, Inc. v. Licking Cty. Bd. of
Revision, 76 Ohio St.3d 29, 32, 1996-Ohio-437, 665 N.E.2d 1111(1996); Valigore v. Cuyahoga Cty. Bd. of Revision, 105 Ohio
St.3d 302, 2005-Ohio-1733, 825 N.E.2d 604, ¶ 5. Important in
the owner-opinion rule, however, is that the owner qualifies
primarily as a fact witness giving information about his or her
own property; usually the owner may not testify about
comparable properties, because that testimony would be
hearsay. See Raymond v. Raymond, 10th Dist. Franklin No.
11AP-363, 2011-Ohio-6173, ¶ 19-20.
(Emphasis sic.) Id. at ¶ 18-19.
{¶ 15} With regard to appellant's evidence, counsel for the school board objected to
appellant's method of determining fair market value arguing that "tax comparables are not
probative evidence of the subject property's fair market value." (Oct. 30, 2013 Tr. at 6.)
The BOR rejected appellant's contention that comparing the auditor's assessed values of
surrounding properties to the auditor's valuation of appellant's parcel yielded probative
evidence of fair market value. The BOR cited the Supreme Court's decision in WJJK
Invests. as authority for its ruling.
{¶ 16} In WJJK Invests., the taxpayer challenged a decision of the Board of Tax
Appeals ("BTA"), which affirmed the valuation assessed by the county auditor on its 24.43-
acre mobile home park. The only witness for the taxpayer at the BTA hearing was the
president of the closely held corporation that owned the park, who presented evidence that
other mobile home parks were assessed at lower values. The Supreme Court held the
No. 17AP-363 8
taxpayer failed to show the BTA abused its discretion in assessing the property's true value.
In rejecting the taxpayer's claim that the auditor valued its property in an entirely different
manner than the comparable properties, the court stated "[a] review of the auditor's
property record cards shows that the same assessment ratio was used for all the properties.
Merely showing that two parcels of property have different values without more does not
establish that the tax authorities valued the properties in a different manner." Id. at 31.
{¶ 17} Similarly, in Piepho, the taxpayer filed a complaint with the BOR seeking a
reduction in the assessed value of her condominium from $72,500 to $34,473. The BOR
voted to reduce the true value of appellant's property to $58,000 for tax years 2010, 2011,
and 2012. Appellant filed an appeal with the BTA. The BTA found appellant did not provide
competent and probative evidence to support her opinion of value, and there was
insufficient evidence to support the BOR's reduction in value. Accordingly, the BTA
reinstated the county auditor's value.
{¶ 18} On appeal to this court, appellant argued the BTA erred when it rejected her
evidence comparing the auditor's valuation of her condominium to the auditor's valuation
of condominiums in neighboring complexes. This court found "the BTA correctly rejected
appellant's argument that the county auditor unfairly assessed her property based on her
evidence regarding valuation of neighboring properties." Id. at ¶ 16. In adopting the
auditor's original valuation of the property, this court explained that because the record
contained no evidence as to how the county auditor actually determined the value of the
taxpayer's property or the value of the comparable properties provided by the taxpayer, the
taxpayer's evidence did not support her claim that the county auditor unfairly assessed her
property. Id. The Piepho court cited WJJK Invests. stating "the fact that two parcels have
different values, without more, does not prove the tax authorities valued the properties in
a different manner." Piepho at ¶ 16.
{¶ 19} Here, appellant's chart and Polina's testimony simply compared the auditor's
valuation of six surrounding properties, on a per square-foot basis, with the auditor's
valuation of appellant's parcel. Though Polina explained the owners built homes on five of
the six comparable properties and appellant's property is vacant, Polina did not provide
details regarding the physical description and characteristics of the comparable parcels
other than to point out appellant's parcel was located on the roundabout and the other
No. 17AP-363 9
properties were not.2 Nor did appellant provide the BOR with any information regarding
the auditor's method of valuation for the properties in question. Appellant did not present
the BOR with an appraisal of appellant's property or any recent sales data for comparable
parcels in the area. On this record, appellant's evidence is insufficient to establish the
requested reduction in the auditor's value. Piepho; WJJK Invests.
{¶ 20} Appellant relies on a case from the Eleventh District Court of Appeals in
support of its contention that comparable tax values can be used to support a reduction in
the auditor's valuation. In Kister v. Ashtabula Cty. Bd. of Revision, 11th Dist. No. 2007-A-
0050, 2007-Ohio-6943, the owner of three parcels of vacant land sought review of the
BOR's valuation in the BTA. At the BTA hearing, the owner offered comparative sales and
tax valuations on two nearby properties to support his position. The BOR offered no
evidence in rebuttal. The BTA did not give any weight to the owner's evidence of value and
affirmed the BOR valuation. In reversing the BTA, the court noted that due to his
ownership of the property, the owner was competent to present his opinion of value, and
he provided a detailed explanation to support his valuation position.
{¶ 21} Appellant argues that Kister requires us to reverse the trial court in this case.
The school board contends that Kister is distinguishable on its facts. We agree with the
school board.
{¶ 22} In Kister, the owner presented the BTA with comparative sales and tax
valuations on two nearby properties, along with a detailed explanation to support his
valuation, including testimony regarding the zoning requirements of the lots, his personal
experience in purchasing another corner lot in the area, and the specific issues affecting
property values in the area. On appeal, the Kister court acknowledged the Supreme Court's
holding in WJJK Invests. that " ' "[m]erely showing that two parcels of property have
different values (or in this case roughly the same values) without more does not establish
that the tax authorities valued the properties in a different (same) manner." ' " Kister at
¶ 30, quoting Sherman v. Bd. of Tax Appeals, 8th Dist. No. 75971 (Mar. 9, 2000), quoting
WJJK Invests. at ¶ 31. In distinguishing WJJK Invests., the Kister court noted the owner
2One of the comparable properties is listed on the auditor's property record as "Exempt * * * Churches, Public
Worship." (Ex. filed Feb. 12, 2014.)
No. 17AP-363 10
"clearly used more than just the auditor's records to establish values." Id. at ¶ 31. The
Eleventh District Court of Appeals in Kister also concluded the credentials of the owner
qualified him as an expert in real estate appraisal, even though the owner was not a licensed
appraiser. The owner in Kister testified that "as a real estate developer, he is qualified as
an expert in the area of real estate appraisal [because] most of the appraisers in the county
call him for values; he manages two hundred tenants; he is more qualified than most
appraisers; and he has been buying and developing land since 1963." Id. at ¶ 27.
{¶ 23} Here, appellant supported its opinion of value with a comparison of the
auditor's valuation of adjacent properties only, with no supporting sales data. Appellant
did not attempt to qualify Polina as an expert in property value and has not argued that
Polina so qualifies. Thus, even if we were to agree that a comparison of the auditor's
valuation of surrounding properties is probative of the fair market value of a particular
parcel when combined with other relevant evidence of value, including recent sales data
and the owner's expert opinion regarding fair market value, appellant presented no such
additional evidence in this case. Thus, the facts in Kister are materially different from the
facts in this case. Kister does not, therefore, support appellant's contention the trial court
abused its discretion in determining the taxable value of the subject property.
{¶ 24} Moreover, to the extent appellant argues that Polina's testimony constitutes
competent and probative evidence of value under the owner-opinion rule, we note Polina's
testimony regarding the value of appellant's parcel was vague and inconsistent. When a
BOR member asked Polina why appellant did not have the property appraised, he
responded that "[w]hen we bought it for $250,000, we figured that was fair market value."
(Oct. 30, 2013 Tr. at 10.) Polina also testified "[t]here's been resistance from the Post Road
Civic Association to rezone it as a commercial lot, which really makes the property
worthless other than putting a house there." (Oct. 30, 2013 Tr. at 7.) He later opined "if
* * * it did get rezoned commercial, then you might have a valid argument as far as the
pricing of it. But as of right now, a -- a one-acre residential lot, that's a pretty high valuation,
I believe." (Oct. 30, 2013 Tr. at 11.) As noted above, appellant advocated a reduction in
No. 17AP-363 11
value to $101,004.65 for the 2010 tax year based on appellant's comparison of the auditor's
tax values for surrounding properties.3
{¶ 25} R.C. 5713.04 specifically states "[t]he price for which * * * real property would
sell at auction or forced sale shall not be taken as the criterion of its value." The Supreme
Court has held, pursuant to R.C. 5713.04, a forced sale of real property, such as a sheriff's
sale, is not probative evidence of true value. Olentangy Local Schools Bd. of Edn. v.
Delaware Cty. Bd. of Revision, 141 Ohio St.3d 243, 2014-Ohio-4723, ¶ 33, citing Dublin
Senior Community, L.P. v. Franklin Cty. Bd. of Revision, 80 Ohio St.3d 455 (1997).
Accordingly, the price appellant paid for the property in 2011 is not probative of the current
fair market value of the property. Polina acknowledged appellant has not attempted to
market the property or construct a residence, preferring to wait for the local community to
change their view on zoning.
{¶ 26} This court has recognized under the owner-opinion rule, an owner who is
sufficiently acquainted with the property is competent to express an opinion of fair market
value. Polina's testimony at the BOR proceeding, however, is too indefinite and uncertain
to qualify as an owner opinion of current fair market value. See, e.g., Olentangy Local
Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, __ Ohio St.3d __, 2017-Ohio-8843,
¶ 19 (owner-opinion rule did not apply where owner "did not expressly state a personal
opinion of value and spoke only generally about his perceptions of prevailing office-market
conditions"); Brecksville-Broadview Hts. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision,
8th Dist. No. 103015, 2016-Ohio-3166, ¶ 29 (co-owner's testimony as to the maximum
amount his company would bid on the property at auction does not qualify as an owner
opinion of value). "To prevail on appeal, the appellant must present competent and
probative evidence supporting the value the appellant asserts." CABOT III-OH1M02 at
¶ 26, citing Dublin City Schools, 2013-Ohio-4543, at ¶ 15. Because appellant failed to
produce competent and probative evidence in support of appellant's request for a reduction
in the auditor's value, we find it was neither unreasonable nor unconscionable for the trial
court to retain the auditor's value for appellant's property. Accordingly, we hold the trial
3 Though appellant's complaint alleges that "[i]n the past three years, properties in that area have decreased
in value over 40%," appellant did not present evidence at the BOR hearing in support of that allegation.
(Mar. 31, 2011 Compl. Against the Valuation of Real Property at 1.)
No. 17AP-363 12
court did not abuse its discretion when it determined the taxable value of appellant's
property. Appellant's assignment of error is overruled.
V. CONCLUSION
{¶ 27} Having overruled appellant's sole assignment of error, we affirm the
judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
LUPER SCHUSTER and HORTON, JJ., concur.
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