Mirko Blesich v. Lake County Assessor

PETITIONER APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
MIRKO BLESICH GREGORY F. ZOELLER
St. John, IN ATTORNEY GENERAL OF INDIANA
ANDREW T. GREIN
JESSICA R. GASTINEAU
DEPUTY ATTORNEYS GENERAL
Indianapolis, IN
______________________________________________________________________
IN THE
INDIANA TAX COURT
______________________________________________________________________
Dec 30 2015, 1:00 pm
MIRKO BLESICH, )
)
Petitioner, )
)
v. ) Cause No. 49T10-1411-TA-00067
)
LAKE COUNTY ASSESSOR, )
)
Respondent. )
ON APPEAL FROM A FINAL DETERMINATION
OF THE INDIANA BOARD OF TAX REVIEW
____
FOR PUBLICATION
December 30, 2015
FISHER, Senior Judge
Mirko Blesich challenges the final determination of the Indiana Board of Tax
Review that valued his real property at $205,000 for the 2010 tax year. While Blesich
raises several issues on appeal, the Court consolidates and restates them as: whether
the Indiana Board’s final determination was improper. The Court affirms the Indiana
Board.
FACTS AND PROCEDURAL HISTORY
Blesich owns residential real property in Schererville, Indiana. In 2010, the St.
John Township Assessor assigned that property an assessed value of $229,300
($41,700 for land and $187,600 for improvements). The Township Assessor and
Blesich subsequently attempted to reach an agreement regarding the value of the
property, but they could not resolve their differences.
Thereafter, Blesich filed an appeal with the Lake County Property Tax
Assessment Board of Appeals (“PTABOA”). On April 24, 2013, the PTABOA issued a
Notification of Final Assessment Determination that reduced Blesich’s 2010 assessment
to $205,000. Still not satisfied, Blesich appealed to the Indiana Board in May of 2013,
electing to litigate his appeal under the Indiana Board’s small claims rules.
On June 9, 2014, the Indiana Board conducted a hearing during which Blesich
presented an Appraisal that valued his property at $181,000 as of October 1, 2010.
(See Cert. Admin. R. at 37-45.) Blesich also presented a letter, dated April 24, 2012,
that documented the Township Assessor’s previous offer to reduce Blesich’s 2010
assessment to $193,700 (hereinafter, “the Settlement Letter”).1 (See Cert. Admin. R. at
36.) Blesich asserted that the totality of this evidence established that his 2010
assessment should be either $181,000 or $193,700. (See Cert. Admin. R. at 80, 90-
91.)
In response, the Lake County Assessor2 (“County Assessor”) claimed that the
Appraisal should be disregarded, asserting that it was inadmissible hearsay because
the appraiser was not available for cross-examination and that it lacked probative value
because it contained several “questionable” adjustments. (See Cert. Admin. R. at 81,
1
Blesich presented a second letter to the Indiana Board that concerned his 2009 assessment
only. (See Cert. Admin. R. at 35.)
2
Indiana Code § 6-1.1-15-3(b) required the County Assessor to defend the PTABOA’s
valuation of Blesich’s property. See IND. CODE § 6-1.1-15-3(b) (2014).
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83.) The County Assessor also asserted that the Settlement Letter was not relevant
because, among other things, it concerned negotiations to which he was not a party.
(See Cert. Admin. R. at 90-91.) Finally, the County Assessor claimed that the
PTABOA’s valuation should be upheld because the sales data for several comparable
properties indicated that the $205,000 valuation was “more than fair.” (See Cert.
Admin. R. at 51-57, 82-84.)
On October 15, 2014, the Indiana Board issued a final determination, finding that
the Appraisal was admissible hearsay evidence that was “arguably probative” of the
subject property’s value. (See Cert. Admin. R. at 15-16 ¶¶ 10-11, 18-19 ¶ 19(b).)
Nonetheless, the Indiana Board explained that the Appraisal could not be the sole basis
for a reduction of Blesich’s assessment because the County Assessor had properly
raised the hearsay objection without exception. (See Cert. Admin. R. at 18-19 ¶ 19(b).)
The Indiana Board also found that the Settlement Letter lacked probative value under
Indiana law. (See Cert. Admin. R. at 18-19 ¶ 19(c) (citing Dep’t of Local Gov’t Fin. v.
Commonwealth Edison Co. of Ind., 820 N.E.2d 1222, 1227-28 (Ind. 2005)).) The
Indiana Board therefore concluded that Blesich had not made a prima facie case for any
additional reduction to his 2010 assessment. (See Cert. Admin. R. at 19 ¶ 20.)
On November 24, 2014, Blesich initiated this original tax appeal. The Court
heard oral argument on September 16, 2015. 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. Osolo Twp. Assessor v. Elkhart Maple Lane
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Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003). 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. See
IND. CODE § 33-26-6-6(e)(1)-(5) (2015).
ANALYSIS
Blesich claims that the Indiana Board’s final determination must be reversed
because it erred in rejecting not only the Appraisal, but also the Settlement Letter. (See
Pet’r Br. Real Estate Tax Appeal (“Pet’r Br.”) at 2.) Blesich also contends that the
Indiana Board’s final determination is improper given its delay in conducting the
administrative hearing and issuing the final determination.3 (See Pet’r Br. at 3.)
The Appraisal
Blesich claims that the Indiana Board erred in disregarding the Appraisal
because: 1) it was not hearsay; 2) the Township Assessor told him to get an appraisal;
3) the Appraisal was prepared by an independent third party; and 4) the Appraisal’s
valuation data overlapped with the County Assessor’s sales data. (See Pet’r Br. at 2;
Pet’r Resp. Resp’t Br. Real Estate Tax Appeal (“Pet’r Reply Br.”) at 2-4; Oral Arg. Tr. at
3-5, 7-9, 16, 22.) Consequently, Blesich maintains that the Indiana Board should have
reduced his 2010 assessment to $181,000. The Court, however, must disagree.
The certified administrative record reveals that Blesich entered the Appraisal,
which was prepared by Thomas J. Serratore, into evidence to prove that his property
3
Blesich also claims that the Indiana Board’s final determination is improper because it should
have disregarded the Assessor’s sales data evidence. (See Pet’r Br. Real Estate Tax Appeal
(“Pet’r Br.”) at 2.) The Court, however, need not address this claim to resolve the case.
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was worth only $181,000 for the 2010 tax year. (See Cert. Admin. R. at 44-45, 80.) Mr.
Serratore was not present at the Indiana Board hearing to testify in support of the
Appraisal. (See Cert. Admin. R. at 32, 59-60, 81.) Therefore, the Appraisal was
hearsay. See Ind. Evidence Rule 801(a)-(c) (providing that hearsay is a person’s
written assertion that: “(1) is not made by [the person] while testifying at trial or hearing;
and (2) is offered in evidence to prove the truth of the matter asserted”).
Blesich litigated this matter under the Indiana Board’s small claims rules and the
County Assessor did not object. (See Cert. Admin. R. at 59.) These rules provide that
“[h]earsay evidence, as defined by the Indiana Rules of Evidence (Rule 801), may be
admitted[, and i]f the hearsay evidence is not objected to, [it] may form the basis for [the
Indiana Board’s final] determination.” 52 IND. ADMIN. CODE 3-1-5(b) (2013) (see
http://www.in.gov/legislative/iac/). They go on to provide, however, that the Indiana
Board’s final determination cannot be based solely upon hearsay evidence when it is
properly objected to and does not fall within a recognized exception to the hearsay rule.
See 52 I.A.C. 3-1-5(b).
The County Assessor properly objected to the Appraisal. (See Cert. Admin. R. at
81.) Blesich has not provided nor has this Court found an applicable hearsay exception.
See generally, e.g., Ind. Evidence Rule 803. Accordingly, the Court must find that the
Indiana Board did not err in disregarding the Appraisal.
The Settlement Letter
Next, Blesich claims that the Indiana Board’s rejection of the Settlement Letter
was improper. (See Pet’r Br. at 2; Pet’r Reply Br. at 4.) The Court disagrees.
When Blesich initiated his administrative appeal, Indiana Code § 6-1.1-15-1
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required the Township Assessor to attempt to meet with Blesich informally to resolve as
many issues as possible. See IND. CODE § 6-1.1-15-1(b)(h) (2013) (amended 2015).
The statute further provided that if the matter was not resolved during the informal
meeting, the Township Assessor was to prepare a document that identified the areas of
disagreement and forward the document to the PTABOA. See I.C. § 6-1.1-15-1(2), (j).
Here, that document (i.e., the Settlement Letter), in relevant part, states:
In analyzing sales of comparable properties and the [A]ppraisal
submitted, I feel a change should be made.
Tax year Assessment
2010 pay 2011 $193,700
2011 pay 2012 $185,800
Please indicate in the proper space below if you are in agreement
with our decision or if you wish to continue your appeal before the
PTABOA.
(Cert. Admin. R. at 36.) Blesich indicated that he wished to continue his appeal before
the PTABOA. (See Cert. Admin. R. at 36.)
Blesich argues that the Indiana Board erred in rejecting the Settlement Letter
because it is evidence that his property’s value should be no more than $193,700. (See
Pet’r Br. at 2.) Indiana’s Rules of Evidence, however, prohibit the use of settlement
terms and settlement negotiations to prove either the liability for or the invalidity of a
claim or its amount. See Commonwealth Edison, 820 N.E.2d at 1227. See also
BLACK’S LAW DICTIONARY 1496 (9th ed.) (defining a “settlement” as “an agreement
ending a dispute or lawsuit”). Indeed, Rule 408 provides that
[e]vidence of the following is not admissible on behalf of any party
. . . to prove . . . the validity or amount of a disputed claim . . . :
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(1) furnishing, promising, or offering, or accepting, promising
to accept, or offering to accept a valuable consideration
in order to compromise the claim; and
(2) conduct or a statement made during compromise
negotiations about the claim.
Ind. Evidence Rule 408.
While the Indiana Board’s small claims rules indicate that certain evidentiary
procedures will be relaxed, their prohibition against the use of offers of settlement is
enforced. See 52 I.A.C. 3-1-5(a)(2). Consequently, the Court finds that the Indiana
Board did not err in rejecting the Settlement Letter as evidence supporting Blesich’s
requested valuation.
The Indiana Board’s Hearing
Finally, Blesich has requested that the Court vacate the Indiana Board’s final
determination and reduce his 2010 assessment to $181,000 because the Indiana Board
was dilatory in conducting its administrative hearing and issuing a final determination.
(See Pet’r Br. at 3; Pet’r Reply Br. at 4-5.) The Court, however, cannot grant Blesich’s
request.
When Blesich appealed from the PTABOA, Indiana Code § 6-1.1-15-4 provided
that the Indiana Board was to hold a hearing on his appeal within 9 months (unless it
was a reassessment year, which it was not). See IND. CODE § 6-1.1-15-4(e)-(f) (2013)
(amended 2014). The statute further provided that, absent an extension, the Indiana
Board was to issue its final determination on that appeal within 90 days of its hearing.
See I.C. § 6-1.1-15-4(g). If the Indiana Board failed to issue a final determination within
the 90 days, Blesich could continue to wait for the Indiana Board to make a final
determination or he could petition for judicial review under Indiana Code § 6-1.1-15-5.
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See I.C. § 6-1.1-15-4(i).
While there is no dispute that the Indiana Board failed to hold its hearing on
Blesich’s appeal within the period prescribed under Indiana Code § 6-1.1-15-4, the
statute does not provide him a remedy.4 See generally I.C. § 6-1.1-15-4. Moreover,
when the Indiana Board failed to issue its final determination within 90 days of its June
2014 hearing, Blesich availed himself of the remedy provided by statute: he waited for
the Indiana Board to make a final determination instead of filing a petition for review with
this Court. See I.C. § 6-1.1-15-4(i). (See also Cert. Admin. R. at 27-28 (indicating that
Blesich filed an original tax appeal in November 2014).) Blesich, therefore, has not
shown that he has been prejudiced by the Indiana Board’s delays. Accordingly, the
Court finds against Blesich on this issue as well.
CONCLUSION
For all of the above-stated reasons, the final determination of the Indiana Board
is AFFIRMED.
4
Nevertheless, Blesich sent a letter to the Indiana Board regarding the delayed hearing and the
Indiana Board promptly set the matter for hearing. (See Cert. Admin. R. at 10-13.)
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