Concord Columbus, L.P. v. Testa

Concord Columbus, L.P. ("Concord Columbus") is the owner of certain real property located at 35 West Spring Street, Columbus, Ohio. The property is the site of the Courtyard by Marriott Hotel, which was purchased by Concord Columbus in 1992 for $1, 400,000. Following substantial renovations, the hotel ultimately opened for business in April 1994. The dispute before us concerns the valuation, for tax purposes, of the property during the renovation period.

Ohio Adm. Code 5705-3-02 (G) sets forth the procedure by which the county auditor is to determine the valuation of a building undergoing construction. Improvements or additions made to such property after January 1st of any year are valued for the first time in the following tax year. Accordingly, since the renovations here occurred over a period overlapping several tax years, the Franklin County Auditor ("auditor") conducted annual inspections and reappraisals based upon the increased value of the property.

For tax year 1993, the auditor assessed the value of the property at $2,600,000. To challenge this valuation, Concord Columbus filed a complaint before the Franklin County Board of Revision ("BOR"), seeking a decrease in the assessed value. In turn, the Board of Education of the Columbus City School District ("Board of Education") filed a counter-complaint seeking an increase. The BOR ultimately decreased the assessed value to $1, 400,000, a determination which was not appealed.

For tax year 1994, the auditor assessed the property's value at $3,472,600. Both Concord Columbus and the Board of Education again filed complaints challenging this assessment. While the 1994 complaints were still pending, the auditor reassessed the property, pursuant to R.C. 5713.01, to reflect a "finished value" of $3,560,000 for tax year 1995. NO party filed a separate complaint to challenge the 1995 valuation.

On April 5, 1996, the BOR issued its decision regarding the 1994 tax year, again devaluing the assessed value of the property. The assessed value for 1994 was $2,580,000. On the same date, the BOR also rendered a determination revising the auditor's appraised "finished value" to $5,510,000 for the 1995 tax year. Since no party had filed a separate complaint to challenge the auditor's 1995 valuation, the BOR apparently based its jurisdiction to render the determination upon the "carryover" provisions of R.C. 5715.19 (D). Essentially, the BOR deemed the 1994 complaints to be "continuing" complaints so that it had authority to review the 1995 determination.

Concord Columbus appealed the BOR's 1995 valuation to the Franklin County Court of Common Pleas, arguing that the BOR lacked statutory jurisdiction to determine the value of the property for tax year 1995 because no complaint had been filed to trigger review of the auditor's valuation for that year.

The trial court ultimately agreed, finding that the 1994 complaints were not valid complaints upon which the BOR could render a determination for the 1995 tax year. The trial court held that a valid new appraisal rendered by the auditor pursuant to his statutory duties under R.C. 5713.01, which requires the auditor to reappraise property when the auditor "finds that the true or taxable values thereof have changed," terminates the carryover jurisdiction granted to the BOR under R.C. 5715.19 (D).

The Board of Education and the auditor ("appellants") have jointly appealed, assigning a single error for our consideration:

"The common pleas court erred in holding that the complaints filed by the property owner and Board of Education with the Franklin County Board of Revision for tax year 1994 were not valid complaints for tax year 1995 under R.C. 5715.19 (D)."

In order to determine whether the "continuing" complaint or "carryover" provision of R.C. 5715.19 (D) vested the BOR with jurisdiction to determine the property's valuation for 1995, it is necessary to consider the interplay among various statutory provisions.

Preliminarily, we note that there is scant authority upon which to rely in resolution of this issue. Concord Columbus, and ultimately the court of common pleas, cited case law from the Supreme Court of Ohio that we do not find to be directly on point. See Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty.Bd. of Revision (1996), 74 Ohio St. 3d 639, 660 N.E.2d 1179;Oberlin Manor, Ltd. v. Lorain Cty. Bd. of Revision (1994), 69 Ohio St. 3d 1, 629 N.E.2d 1361; and Wolf v. Cuyahoga Cty. Bd. ofRevision (1984), 11 Ohio St. 3d 205, 11 OBR 523, 465 N.E.2d 50.

[1] R.C. 5715.19 (C) generally requires the BOR to render its decision on a complaint within ninety days of the filing of the complaint. However, the latter portion of R.C. 5715.19 (D), upon which appellants rely, provides a procedural mechanism for "continuing" complaints as follows:

"* * * If a complaint filed under this section for the current year is not determined by the board within the timeprescribed for such determination, the complaint and anyproceedings in relation thereto shall be continued by the boardas a valid complaint for any ensuing year until suchcomplaint is finally determined by the board or upon any appeal from a decision of the board. In such case, the originalcomplaint shall continue in effect without further filing by the original taxpayer, his assignee, or any other person or entity authorized to file a complaint under this section." (Emphasis added.)

R.C. 5715.19 (A)(2) prohibits the filing of a second complaint by the same party in an "interim" period unless there is a change of circumstances. That provision reads:

"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 * * *

"(a) The property was sold in an arm's length transaction * * *;

"(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 percent in the property's occupancy has had a substantial economic impact on the property."

The "interim period" to which the above provision refers is a three-year appraisal cycle or "triennium." The court of common pleas held that a conflict existed between the continuing-complaint provision and the provisions of R.C. 5715.19 (A)(2) prohibiting anyone from filing more than one complaint on the same property during any triennium.

Appellants make a distinction between the carryover or "continuing" complaint provisions set forth above and the carryover "value" provisions set forth in the first two sentences of R.C. 5715.19 (D), which read:

"The determination of any such complaint shall relate back to the date when the lien for taxes or recoupment charges for the current year attached or the date as of which liability for such year was determined. Liability for taxes and recoupment charges for such year and each succeeding year until the complaint is finally determined and for any penalty and interest for nonpayment * * * shall be based upon the * * * valuation * * * as finally determined."

The carryover-value provisions essentially determine whether a prior valuation must be applied to an ensuing tax year. As noted by appellants, the carryover"value" provisions were the focus of the Supreme Court of Ohio decisions cited above.

Appellants argue that there is no conflict between the continuing-complaint provision, one which is merely procedural, and R.C. 5715.19 (A)(2) because the latter does not apply when the county auditor has actually changed the value of the property; if the county auditor changes the value, the property owner can always file a complaint against that changed value, irrespective of any limitations or restrictions found in R.C. 5715.19 (A)(2). Appellants' interpretation of the above statutory language is that a pending complaint continues over to the ensuing tax year when a valid complaint can be filedbecause the auditor changed the value for the ensuing year. Conversely, had the auditor not changed the valuation for 1995 over 1994, then a new complaint for 1995 could be filed only under one of the exceptions set forth in R.C. 5715.19 (A)(2). We find that interpretation to be sound.

We construe the foregoing statutes to mean that although any party could have filed another complaint for tax year 1995, no party was required to do so in order for the BOR to have jurisdiction to address the 1995 valuation. In our view, the continuing-complaint provision is merely a procedural device which ought to be given the effect of its plain intention. While a prior complaint is still pending before the BOR, the parties are not required to keep filing additional complaints in order for the BOR to retain jurisdiction for the ensuing years within the same triennium.

The assignment of error is sustained.

Notwithstanding our holding that the BOR retained jurisdiction to address the 1995 valuation, the record before us indicates that the parties were given no notice of the BOR's intention to address the issue; accordingly, the parties had no opportunity to present evidence regarding the valuation. Therefore, we remand the case to the court of common pleas with instructions to remand the case to the BOR to receive pertinent evidence and render a determination thereon.

Having sustained the assignment of error, we reverse the judgment of the trial court and remand the cause to the court of common pleas for further proceedings consistent with this opinion.

Judgment reversed and cause remanded.

DESHLER, J., concurs.

CLOSE, J., dissents.