Durham Ridge Invests., L.L.C. v. Lorain Cty. Bd. of Revision ( 2021 )

[Cite as Durham Ridge Invests., L.L.C. v. Lorain Cty. Bd. of Revision, 2021-Ohio-2454.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN )
DURHAM RIDGE INVESTMENTS, LLC. C.A. No. 20CA011615
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
LORAIN COUNTY BOARD OF COURT OF COMMON PLEAS
REVISION, et al. COUNTY OF LORAIN, OHIO
CASE No. 11CV173828
Appellees
DECISION AND JOURNAL ENTRY
Dated: July 19, 2021
HENSAL, Judge.
{¶1} Durham Ridge Investments, LLC (“Durham Ridge”) appeals a decision of the
Lorain County Court of Common Pleas that affirmed a decision of the Lorain County Board of
Revision (“the Board”). For the following reasons, this Court reverses.
I.
{¶2} Durham Ridge owns a number of parcels in Lagrange that collectively make up the
Grey Hawk golf course. For the year 2010, the Lorain County Auditor set the combined value of
the parcels at $4,658,600. Durham Ridge contested the valuation, arguing that it was $1,800,000
based on an appraisal that was completed in April 2010. Durham Ridge contends that it submitted
a copy of the appraisal at the review hearing. The Board of Revision, however, did not change the
valuation of the parcels, concluding that the auditor’s value was fair and equitable. Durham Ridge
appealed to the common pleas court. It affirmed the Board’s decision without accepting additional
evidence, finding that Durham Ridge did not submit the full appraisal at the hearing and concluding
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that Durham Ridge did not produce competent and credible evidence to support a decrease in the
value of the parcels. Durham Ridge has appealed, assigning three errors.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED BY DENYING APPELLANT’S MOTION TO
SUPPLEMENT THE RECORD WITH THE APPRAISAL REPORT
PRESENTED AT THE BOARD OF REVISION HEARING.
{¶3} In its first assignment of error, Durham Ridge argues that the trial court incorrectly
denied its motion to supplement the record with a copy of the full appraisal that it presented during
the hearing before the Board. According to Durham Ridge, although it submitted a complete copy
of the appraisal to the Board, the appraisal was not maintained as part of the record. Durham Ridge
also argues that the appraisal, prepared only a few months after the tax date, contains a thoughtful
analysis of the value of its parcels. It, therefore, argues that the common pleas court incorrectly
refused to allow it to supplement the record.
{¶4} Revised Code Section 5717.05 provides that a board of revision “shall certify to the
court a transcript of the record of the proceedings of said board pertaining to the original complaint
and all evidence offered in connection with that complaint.” In addressing a similar provision
under Section 5717.01 that applies to appeals to the Board of Tax Appeals, the Ohio Supreme
Court determined that, if “the BTA ascertains that evidence is missing, it should notify the parties
and exercise its statutory authority to investigate[.]” Arbors East RE, L.L.C. v. Franklin Cty. Bd.
of Revision, 153 Ohio St.3d 41, 2018-Ohio-1611, ¶ 18. In particular, “the BTA could have
convened a new hearing and invited the submission of the omitted evidence, issued an order to the
BOR, or both.” Id.3
{¶5} At the hearing before the Board, Durham Ridge’s managing member, Donald
Keehan, indicated that he had “a full appraisal that can be submitted.” After members of the Board
asked Mr. Keehan questions about the nature of the appraisal, a member asked him whether he
was “able to submit the full report[.]” Mr. Keehan replied that “[i]t’s right there.” The member
asked “[i]s that our copy” and Mr. Keehan replied “[i]t’s yours.” The member again asked whether
“[t]hat is our copy” and Mr. Keehan again replied “[y]es. That’s yours.” A Board member then
moved to take the matter under advisement, which was seconded and approved, ending Durham
Ridge’s presentation.
{¶6} The record that the Board transmitted to the common pleas court did not contain a
copy of the appraisal that Mr. Keehan offered at the hearing. Durham Ridge, therefore, moved to
supplement the record and attached the full appraisal to its motion. The common pleas court found
that Mr. Keehan had “offered several pages of an appraisal” at the hearing and that the “appraisal
was not offered into evidence in its entirety at the hearing[.]” The court also found that the report
was not authenticated by its author during the hearing. Concluding that Durham Ridge had failed
to offer the complete appraisal to the Board, the court next considered whether Durham Ridge had
good cause for failing to provide it. It determined that Durham Ridge had failed to show good
cause and, therefore, denied its motion to supplement the record.
{¶7} The trial court’s findings about what was submitted at the hearing are not supported
by the record. There is no indication in the transcript that Mr. Keehan offered only several pages
of the appraisal as opposed to the entire document. Mr. Keehan repeatedly stated at the hearing
that he had the “full appraisal” and never indicated that he had, or was offering, only part of it.
Although Mr. Keehan admitted that he had not made copies of the full appraisal because it was
116 pages, he offered the copy he did have to the Board, directing a member to it and telling the
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member repeatedly that it was “yours.” There are no statements by the Board indicating that it
refused to accept the document into the record. To the contrary, when the Board reconvened, it
noted that Mr. Keehan “submitted appraisal evidence” to which the “School Board objected[.]”
The Board did not sustain any objections, instead, it simply found “the evidence * * * insufficient.”
The written decision issued by the Board after the meeting also only provided that, “[a]fter due
consideration and review of the evidence presented,” the value of the parcels was fair and
equitable. The record transmitted from the Board also does not contain part of the appraisal. It
contains none of the appraisal.
{¶8} Under Section 5717.05, the Board had a duty to “certify to the court a transcript of
the record of the proceedings of said board pertaining to the original complaint and all evidence
offered in connection with that complaint.” Like in Arbors East RE, upon learning from Durham
Ridge that there was an appraisal offered at the hearing that had not been transmitted, the common
pleas court should have “[e]xercised its authority to supplement the record with the omitted
documents or with any other evidence [it] deem[ed] material to its determination.” 153 Ohio St.3d
41, 2018-Ohio-1611, at ¶ 18. Upon review of the record, we conclude that the court incorrectly
denied Durham Ridge’s motion to supplement the record. Durham Ridge’s first assignment of
error is sustained.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED BY REFUSING TO HOLD AN EVIDENTIARY
HEARING.
{¶9} In its second assignment of error, Durham Ridge argues that the common pleas
court should have conducted an evidentiary hearing. The Ohio Supreme Court has held that,
although Section “5717.05 requires more than a mere review of the decisions of the board of
revision, that review may be properly limited to a comprehensive consideration of existing
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evidence and, in the court’s discretion, to an examination of additional evidence.” Black v. Bd. of
Revision of Cuyahoga Cty., 16 Ohio St.3d 11, 14 (1985). Thus, while the section “contemplates a
decision de novo[,]” it does not “provide for an original action or trial de novo.” (Emphasis
omitted.) Id. The court has discretion, however, to conduct an evidentiary hearing. 7991
Columbus Pike, L.L.C. v. Delaware Cty. Bd. of Revision, 5th Dist. Delaware No. 16 CAH 03 0015,
2016-Ohio-5758, ¶ 28.
{¶10} Durham Ridge’s argument focuses on the trial court’s failure to consider the
appraisal it offered at the hearing before the Board. It argues that the common pleas court
mischaracterized the facts, finding that it only submitted a few pages of the appraisal report to the
Board instead of the full report. According to Durham Ridge, if the transcript was unclear to the
common pleas court about exactly what occurred before the Board, the court should have held an
evidentiary hearing to clarify the record.
{¶11} Considering this Court’s determination that the common pleas court should have
allowed Durham Ridge to supplement the record because the Board did not transmit the appraisal
that Durham Ridge offered at the hearing, Durham Ridge’s argument that the court should have
held a hearing about whether to consider the appraisal is moot. We, therefore, decline to address
Durham Ridge’s second assignment of error. App.R. 12(A)(1)(c).
ASSIGNMENT OF ERROR III
THE TRIAL COURT ERRED BY AFFIRMING THE BOARD OF REVISION’S
RULING UPHOLDING THE AUDITOR’S VALUATION OF THE
PROPERTIES.
{¶12} In its third assignment of error, Durham Ridge argues that it met its burden to
establish that the auditor’s valuation of its property was incorrect. Section 5715.05 provides that
“an appeal from the decision of a county board of revision may be taken directly to the court of
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common pleas * * *.” R.C. 5715.05. “The common pleas court has a ‘duty on appeal to
independently weigh and evaluate all evidence properly before it [and] * * * to make an
independent determination concerning the valuation of the property at issue.’” Valley v. the
Eagles, LLC v. Lorain Cty. Bd. of Revision, 9th Dist. Lorain No. 16CA010918, 2017-Ohio-362, ¶
7, quoting Black, 16 Ohio St.3d at 13. This Court reviews a trial court’s decision from a tax appeal
for an abuse of discretion. OM Harikrushn, LLC v. Cty. of Summit Bd. of Revision, 9th Dist.
Summit No. 28234, 2017-Ohio-1028, ¶ 7.
{¶13} Durham Ridge argues that it submitted a comprehensive appraisal report that
established that the auditor’s valuation was incorrect. According to Durham Ridge, because it was
able to negate the auditor’s value, the trial court should have undertaken an independent valuation
of the property. The Ohio Supreme Court has recognized that, if the evidence presented to a board
of revision contradicts the auditor’s determination in whole or in part, the board of tax appeals or
common pleas court may not simply retain the auditor’s valuation but must perform such a
valuation. Copley-Fairlawn City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 147
Ohio St.3d 503, 2016-Ohio-1485, ¶ 17. Durham Ridge also argues that the local school district
admitted in its counter complaint that the auditor’s valuation was too high.
{¶14} As previously noted, the common pleas court found that Durham Ridge did not
submit a complete appraisal to the Board. The court also found that the few pages that were
submitted were not authenticated by the appraiser and, therefore, could not be relied upon in
making a valuation decision.
{¶15} This Court has determined that the common pleas court should have allowed
Durham Ridge to supplement the record with the missing appraisal. Regarding the authenticity of
the appraisal, the common pleas court cited to Freshwater v. Belmont County Board of Revision,
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80 Ohio St.3d 26, 30 (1997). That case, however, did not involve a question as to the authenticity
of an appraisal. In fact, the appraiser in Freshwater testified as to the two written appraisals he
had prepared. Id. at 27.
{¶16} In Plain Local Schools Board of Education v. Franklin County Board of Revision,
130 Ohio St.3d 230, 2011-Ohio-3362, the Ohio Supreme Court concluded that it was not reversible
error for the board of tax appeals to consider an appraisal even though the appraiser did not testify.
Id. at ¶ 3. In Musto v. Lorain County Board of Revision, 148 Ohio St.3d 456, 2016-Ohio-8058,
however, the Supreme Court clarified that, although the board of tax appeals may consider such
evidence, it also has wide discretion to determine the weight of the evidence and may reject
appraisal evidence even if it has been presented by an expert. Id. at ¶ 39.
{¶17} As is clear from the common pleas court’s decision, it was considering only part of
the appraisal when it determined that the appraisal was of no value. On remand, the court should
reconsider what weight to give to the appraisal after reviewing its complete contents, consistent
with Musto. Considering the disposition of Durham Ridge’s first assignment of error, we conclude
its third assignment of error is premature, and it is overruled on that basis.
III.
{¶18} Durham Ridge’s first assignment of error is sustained. Its second assignment of
error is moot. Its third assignment of error is premature. The judgment of the Lorain County Court
of Common Pleas is reversed, and this matter is remanded for proceedings consistent with this
decision.
Judgment reversed,
and cause remanded.
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There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of
this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period
for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to
mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the
docket, pursuant to App.R. 30.
Costs taxed to Appellees.
JENNIFER HENSAL
FOR THE COURT
CALLAHAN, P. J.
TEODOSIO, J.
CONCUR.
APPEARANCES:
STEPHEN P. HANUDEL, Attorney at Law, for Appellant.
J. D. TOMLINSON, Prosecuting Attorney, and CARA M. FINNEGAN, Assistant Prosecuting
Attorney, for Appellee.
KARRIE KALAIL, Attorney at Law, for Appellee.