Ohio Retail II LL, L.L.C. v. Reynoldsburg City School Dist. Bd. of Edn.

[Cite as Ohio Retail II LL, L.L.C. v. Reynoldsburg City School Dist. Bd. of Edn., 2013-Ohio-5705.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
OH Retail II LL, LLC, :
Appellant-Appellee, :
v. : No. 13AP-230
(BTA No. 2011-L-600)
Franklin County Board of Revision et al., :
(REGULAR CALENDAR)
Appellees-Appellees, :
Reynoldsburg City School District :
Board of Education,
:
Appellee-Appellant.
:
D E C I S I O N
Rendered on December 24, 2013
Sleggs, Danzinger & Gill Co., LPA, and Todd W. Sleggs, for
OH Retail II LL, LLC.
Ronald B. Noga, for Reynoldsburg City School District Board
of Education.
APPEAL from Ohio Board of Tax Appeals
KLATT, P.J.
{¶ 1} Appellant, the Reynoldsburg City School District Board of Education
("Reynoldsburg Board"), appeals from a decision and order of the Ohio Board of Tax
Appeals in favor of appellee, Ohio Retail II LL, LLC ("Ohio Retail"). For the following
reasons, we affirm.
No. 13AP-230 2
{¶ 2} Ohio Retail owns two parcels of property in Reynoldsburg. The parcels are
assigned parcel numbers 060-008614 and 060-008675. For tax year 2007, the Franklin
County Auditor assessed parcel 060-008614 at a total true value of $2,825,000 and
parcel 060-008675 at a total true value of $715,000.
{¶ 3} The Reynoldsburg Board filed a sworn complaint with the Franklin County
Board of Revision requesting an increase in the parcels' values. In the complaint, the
Reynoldsburg Board stated that an increase was justified because Ohio Retail had
"obtained a new mortgage for an amount in excess of the Auditor's value suggesting that
the Auditor's value has been underestimated." Board of Revision transcript, Exhibit 1.
{¶ 4} The Reynoldsburg Board's complaint is actually a completed form, called a
DTE Form 1, created by the Ohio Department of Taxation. Item number 14 of the form
states, "If you have filed a prior complaint on this parcel since the last reappraisal or
update of the property values in the county, the reason for the valuation change requested
must be one of those below. Please check all that apply and explain on the attached sheet.
See R.C. 5715.19(A)(2) for a complete explanation." Id. The Reynoldsburg Board had
filed a complaint regarding the same parcels for the 2006 tax year, which would prohibit a
complaint for the 2007 tax year unless the board alleged one of the four reasons listed on
the complaint form. Of the four reasons listed, the Reynoldsburg Board chose "[a]
substantial improvement was added to the property." Id. Next to that reason the
Reynoldsburg Board added, in parentheses, the statement "may have occurred." Id.{¶ 5} The Board of Revision consolidated the complaint with a complaint for tax
year 2009 that the Reynoldsburg Board had filed regarding the same parcels. At the
hearing on the consolidated complaints, the attorneys for both the Reynoldsburg Board
and Ohio Retail stated that they believed that the Reynoldsburg Board had withdrawn the
complaint for tax year 2007. However, nothing in the record indicated that such a
withdrawal had occurred. The Board of Revision stated that it would look into the matter.
{¶ 6} In the meantime, the Reynoldsburg Board's attorney was caught
unprepared to present any evidence of the value of the parcels for the 2007 tax year. He
only offered to the Board of Revision a stipulation that the Reynoldsburg Board and Ohio
Retail had entered into to resolve the complaint over the parcels' value for the 2006 tax
year. The Reynoldsburg Board's attorney asserted that the Board of Revision could use
No. 13AP-230 3
the stipulation to determine the value of the parcels for the 2007 tax year, even though the
stipulation stated that the stipulated values were not to be carried forward.
{¶ 7} On February 11, 2011, the Board of Revision issued decisions on the subject
parcels for tax years 2007 and 2009. For tax year 2007, the Board of Revision increased
the value of parcel 060-008614 to $5,398,000 and parcel 060-008675 to $1,102,000.
Ohio Retail appealed the decisions for tax year 2007 to the Board of Tax Appeals.
{¶ 8} In relevant part, Ohio Retail contended on appeal that the Board of Revision
erred in not dismissing the Reynoldsburg Board's complaint for lack of jurisdiction. The
Board of Tax Appeals agreed, finding that the Reynoldsburg Board's failure to comply
with R.C. 5715.19(A)(2) deprived the Board of Revision of jurisdiction. The Board of Tax
Appeals remanded the matter to the Board of Revision with instructions to dismiss the
underlying complaint.
{¶ 9} The Reynoldsburg Board now appeals the Board of Tax Appeals' decision
and order, and it assigns the following errors:
Assignment of Error No. 1
THE BOARD OF TAX APPEALS ERRED AS A MATTER OF
LAW BY MISCONSTRUING THE STATUTORY
REQUIREMENT OF O.R.C. SECTION 5715.19(A)(2), IN
THAT THE COMPLAINT FILED BY APPELLANT BOARD
OF EDUCATION FOR THE REYNOLDSBURG CITY
SCHOOL DISTRICT WAS SUFFICIENT IN FORM AND
CONTENT TO VEST JURISDICTION IN THE BOARD OF
REVISION TO DETERMINE THE VALUE OF THE SUBJECT
PARCELS FOR TAX YEAR 2007[.]
Assignment of Error No. 2
THE BOARD OF TAX APPEALS ERRED AS A MATTER OF
LAW IN CONCLUDING THAT THE SUPREME COURT
CASE OF DEVELOPERS DIVERSIFIED LTD. V. CUYAHOGA
CTY. BD. OF REVISION (1998), 84 Ohio St.3d 32, ADDS
ADDITIONAL EVIDENTIARY REQUIREMENTS TO THE
STATUTORY REQUIREMENTS OF O.R.C. SECTION
5715.19(A)(2) IN ORDER TO INVOKE THE JURISDICTION
OF THE BOARD OF REVISION[.]
No. 13AP-230 4
Assignment of Error No. 3
ALL OF THE FOREGOING ERRORS RESULTED IN THE
BOARD OF TAX APPEALS ERRONEOUS CONCLUSION
THAT THE COMPLAINT FILED BY THE BOARD OF
EDUCATION OF THE REYNOLDSBURG CITY SCHOOL
DISTRICT FOR TAX YEAR 2007 FAILED TO INVOKE THE
JURISDICTION OF THE FRANKLIN COUNTY BOARD OF
REVISION FOR TAX YEAR 2007[.]
{¶ 10} By its first assignment of error, the Reynoldsburg Board argues that the
Board of Tax Appeals erred in finding that the Board of Revision lacked jurisdiction over
the complaint. We disagree.
{¶ 11} A challenge to the jurisdictional sufficiency of a valuation complaint raises a
question of law. Akron Centre Plaza Ltd. Liability Co. v. Summit Cty. Bd. of Revision,
128 Ohio St.3d 145, 2010-Ohio-5035, ¶ 10. Appellate courts review such a question under
the de novo standard. Groveport Madison Local Schools Bd. of Edn. v. Franklin Cty. Bd.
of Revision, __ Ohio St.3d __, 2013-Ohio-4627, ¶ 8; Sheldon Rd. Assoc., L.L.C. v.
Cuyahoga Cty. Bd. of Revision, 131 Ohio St.3d 201, 2012-Ohio-581, ¶ 10.
{¶ 12} When a statute requires a litigant to perform certain acts in order to invoke
the jurisdiction of an administrative tribunal, the performance of such acts usually
constitutes a prerequisite to the tribunal's jurisdiction. Knickerbocker Properties Inc.
XLII v. Delaware Cty. Bd. of Revision, 119 Ohio St.3d 233, 2008-Ohio-3192, ¶ 10. "R.C.
5715.19(A) 'establishes the jurisdictional gateway to obtaining review by the boards of
revision.' " Groveport Madison Local Schools Bd. of Edn. at ¶ 11, quoting Toledo Pub.
Schools Bd. of Edn. v. Lucas Cty. Bd. of Revision, 124 Ohio St.3d 490, 2010-Ohio-253,
¶ 10. Thus, "full compliance with R.C. 5715.19 is an indispensable prerequisite for the
exercise of jurisdiction by a board of revision." Worthington City Schools Bd. of Edn. v.
Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, ¶ 17.
{¶ 13} A complainant before a board of revision must affirmatively plead the
jurisdictional facts in its complaint. Marysville Exempted Village School Dist. Bd. of Edn.
v. Union Cty. Bd. of Revision, 136 Ohio St.3d 146, 2013-Ohio-3077, ¶ 11. The board of
revision examines those facts to determine whether the complaint meets the jurisdictional
requirements in R.C. 5715.19. Elkem Metals Co. Ltd. Partnership v. Washington Cty. Bd.
No. 13AP-230 5
of Revision, 81 Ohio St.3d 683, 686 (1998).1 If the complaint meets the jurisdictional
requirements, then the board of revision may proceed to consider the evidence and
determine the true value of the property. Id. If the complaint does not meet the
jurisdictional requirements, then the board of revision must dismiss it because it has not
invoked the board's power to consider and decide the merits. Id.{¶ 14} R.C. 5715.19(A)(2) provides:
No person, board, or officer shall file a complaint against the
valuation or assessment of any parcel that appears on the tax
list if it filed a complaint against the valuation or assessment
of that parcel for any prior tax year in the same interim
period, unless the person, board, or officer alleges that the
valuation or assessment should be changed due to one or
more of the following circumstances that occurred after the
tax lien date for the tax year for which the prior complaint was
filed and that the circumstances were not taken into
consideration with respect to the prior complaint:
(a) The property was sold in an arm's length transaction, as
described in section 5713.03 of the Revised Code;
(b) The property lost value due to some casualty;
(c) Substantial improvement was added to the property;
(d) An increase or decrease of at least fifteen per cent in the
property's occupancy has had a substantial economic impact
on the property.
Thus, in order to file a second complaint in the same interim period, a complainant must
allege one of the enumerated circumstances. Columbia Toledo Corp. v. Lucas Cty. Bd. of
Revision, 76 Ohio St.3d 361, 362-63 (1996). Failure to meet this requirement deprives a
board of revision of jurisdiction to hear the second complaint. Id. at 363.
{¶ 15} Here, the parties do not dispute that, in Franklin County, an "interim
period" occurred during tax years 2005 through 2007. The parties also do not dispute
that the Reynoldsburg Board filed a complaint challenging the value of the subject parcels
for the 2006 tax year. Consequently, for the Board of Revision to have jurisdiction over
1 The complaint must also meet the jurisdictional requirements of R.C. 5715.13. Id. As those
requirements are not at issue here, we do not discuss them.
No. 13AP-230 6
the complaint for the 2007 tax year, the Reynoldsburg Board had to allege in the
complaint the existence of one of the circumstances specified in R.C. 5715.19(A)(2).
{¶ 16} In its complaint, the Reynoldsburg Board checked the box next to "[a]
substantial improvement was added to the property." However, the Reynoldsburg Board
qualified that allegation by inserting next to it the words "may have occurred." By adding
"may have occurred," the Reynoldsburg Board negated the immediately preceding
allegation that a substantial improvement was added. Together, the Reynoldsburg
Board's inconsistent allegations indicate that it did not actually know whether or not a
substantial improvement was made.
{¶ 17} The Reynoldsburg Board points to a mortgage, which it allegedly attached
to the complaint, as proof that substantial improvements were made to the subject
parcels.2 The mortgage, however, does not satisfy the Reynoldsburg Board's burden
under R.C. 5715.19(A)(2). The Reynoldsburg Board must allege one of the circumstances
set forth in R.C. 5715.19(A)(2); it cannot merely refer to documents attached to its
complaint that contain information that establishes one of the circumstances. Columbia
Toledo Corp., 76 Ohio St.3d at 362-63. Moreover, a review of the mortgage reveals that it
says nothing about substantial improvements to the subject parcels.
{¶ 18} We conclude that the Reynoldsburg Board failed to allege in its complaint
that the valuation of the subject parcels should be changed due to substantial
improvements that occurred after the tax lien date for the tax year for which the prior
complaint was filed and that the substantial improvements were not taken into
consideration with respect to the prior complaint. The Board of Revision, therefore,
lacked jurisdiction over the Reynoldsburg Board's complaint. Accordingly, we overrule
the first assignment of error.
{¶ 19} Like the first assignment of error, the remaining assignments of error also
challenge the Board of Tax Appeals' decision that the Board of Revision lacked
jurisdiction. In resolving the first assignment of error, we have concluded that the
Reynoldsburg Board did not comply with R.C. 5715.19(A)(2), thus depriving the Board of
2 The record does not include the mortgage as an attachment to the complaint, but rather, as an exhibit
introduced during the hearing.
No. 13AP-230 7
Revision of jurisdiction. Therefore, our resolution of the first assignment of error moots
the remaining assignments of error.
{¶ 20} For the foregoing reasons, we overrule the first assignment of error, which
moots the second and third assignments of error. We affirm the decision and order of the
Board of Tax Appeals.
Order affirmed.
TYACK and CONNOR, JJ., concur.