Case Title: Gahanna-Jefferson Pub. Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision

Citation: 2000-Ohio-216

Docket Number: 19991582 and 19991583

State: ohio

Court: Ohio Supreme Court

Date: 2000-08-16T00:00:00Z

Document:
[Cite as Gahanna-Jefferson Pub. Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 89 Ohio 
St.3d 450, 2000-Ohio-216.] 
 
 
 
GAHANNA-JEFFERSON PUBLIC SCHOOLS BOARD OF EDUCATION, APPELLANT, v. 
FRANKLIN COUNTY BOARD OF REVISION ET AL., APPELLEES. 
DUBLIN CITY SCHOOLS BOARD OF EDUCATION, APPELLANT, v. FRANKLIN COUNTY 
BOARD OF REVISION ET AL., APPELLEES. 
[Cite as Gahanna-Jefferson Pub. Schools Bd. of Edn. v. Franklin Cty. Bd. of 
Revision (2000), 89 Ohio St.3d 450.] 
Taxation — Real property valuation of two-hundred-sixty-four unit and two-
hundred-eighty unit apartment complexes — Transfer of property from 
dissolving partnership to sole remaining partner — Transfer of property 
from subsidiary corporation to parent corporation — No consideration 
paid upon transfer — Transactions not considered as a sale of property for 
valuation purposes. 
(Nos. 99-1582 and 99-1583 — Submitted July 6, 2000 — Decided August 16, 
2000.) 
APPEALS from the Board of Tax Appeals, Nos. 97-A-336 and 97-A-337. 
 
In case No. 99-1582, appellant, Gahanna-Jefferson Public Schools Board of 
Education (“BOE”), filed a valuation complaint against real property owned by 
Associated Estates Realty Corporation (“Associated”) for tax year 1995.  The 
property contains a two-hundred-sixty-four unit apartment complex known as the 
 
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Residence at Christopher Wren.  The BOE alleged in its complaint that the 
property should be valued at $15,650,000. The auditor had valued the property at 
$12,717,000.  At a hearing before the Franklin County Board of Revision 
(“BOR”), the counsel representing the BOE stated that she had been informed by 
an appraiser that the property had transferred for a price of $15,650,000.  The BOE 
presented no witnesses; however, it did introduce a copy of a deed transferring the 
real property from Christopher Wren Apartments Limited Partnership (“Wren”) to 
Associated, and a copy of an application to exempt the transfer from the real 
property conveyance fee.  The affidavit accompanying the exemption application 
claimed the transfer was exempt because the Wren partnership was dissolving and 
distributing all of its assets to Associated, its sole remaining partner, and that no 
cash would be paid upon the transfer.  The BOR, nevertheless, ratified the 
auditor’s value. 
 
The BOE filed an appeal with the Board of Tax Appeals (“BTA”).  At the 
hearing before the BTA, the BOE again presented no witnesses.  However, it did 
introduce into evidence three documents that it had obtained through discovery: (1) 
the Purchase Agreement between the Wren partners and Associated; (2) the 
Settlement Statement on a United States Department of Housing and Urban 
Development (“HUD”) form describing Associated as the borrower and the 
 
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partners of Wren as the seller; and (3) the Agreement of Limited Partnership for 
Wren. 
 
The Purchase Agreement between the Wren partners and Associated 
provided that the partners agreed to sell all of their “right, title, estate and interest” 
to their partnership interests to Associated for the “Purchase Price” of $15,500,000. 
 
The Settlement Statement set forth a contract sale price of $15,500,000.  
Associated presented no witnesses or evidence to the BTA.  The BTA determined 
that because the BOE presented no witnesses, it was “unable to definitively 
determine the terms of the sale in question from the face of the documents 
themselves, and, consequently, assign value to the subject property based upon 
such sale.”  The BTA found that the BOE had not met its burden of coming 
forward with evidence to support its value.  Therefore, the BTA determined that 
the value should remain the same as that determined by the auditor and the BOR. 
 
In case No. 99-1583, appellant, Dublin City Schools Board of Education 
(“BOE”), filed a real property valuation complaint against real property owned by 
Associated for tax year 1995, containing a two-hundred-eighty unit apartment 
complex known as Heathermoor Apartments.  The BOE alleged in its complaint 
that the property should be valued at $10,700,000.  The auditor had valued the 
property at $9,500,000. 
 
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At a hearing before the BOR, counsel representing the BOE stated that she 
had been informed by an appraiser that the property had transferred for a price in 
the range of $10,500,000 to $10,700,000.  The BOE presented no witnesses, but it 
did present a copy of the deed transferring the property from Heathermoore, Inc. to 
Associated along with a copy of an application to exempt the transfer from the real 
property conveyance fee.  The application to exempt the transfer claimed that the 
transfer was by a subsidiary corporation to a parent corporation “for no 
consideration, nominal consideration, or in sole consideration of the cancellation or 
surrender of the subsidiary’s stock.”  The BOR again ratified the auditor’s value. 
 
The BOE filed an appeal with the BTA.  At the hearing before the BTA, the 
BOE presented no witnesses; however, it did introduce three documents into 
evidence: (1) the Purchase Agreement between the partners of the Newkam 
Partnership (“Newkam”) and Associated; (2) the HUD form Settlement Agreement 
between Associated as borrower and Newkam as seller; and (3) the First Amended 
Partnership Agreement for Newkam. 
 
The Purchase Agreement between the Newkam partners and Associated 
provided that the partners agreed to sell all of their “right, title, estate and interest” 
to the partnership interests to Associated for a “Purchase Price” of $10,700,000. 
 
The Settlement Statement set forth a contract sale price of $10,700,000. 
Associated presented no witnesses or evidence to the BTA.  The BTA determined 
 
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that the BOE did not meet its burden of coming forward with evidence to support 
its suggested value.  Therefore, the BTA determined that the value should remain 
the same as that determined by the auditor and the BOR. 
 
These causes are now before this court upon appeals as of right. 
__________________ 
 
Teaford, Rich, Crites & Wesp, Jeffrey A. Rich and James R. Gorry, for 
appellant in case Nos. 99-1582 and 99-1583. 
 
Ronald J. O’Brien, Franklin County Prosecuting Attorney, and Matthew H. 
Chafin, Assistant Prosecuting Attorney, for appellees Franklin County Board of 
Revision and Franklin County Auditor in case Nos. 99-1582 and 99-1583. 
 
Fred Siegel Co., L.P.A., and Annrita S. Johnson, for appellee Associated 
Estates Realty Corporation in case Nos. 99-1582 and 99-1583. 
__________________ 
 
Per Curiam.  These cases were consolidated for hearing and sua sponte are 
consolidated for decision. 
 
The essence of the BOE’s appeal in both cases is that the transactions in 
question should be considered as a sale of real property for valuation purposes.  
We disagree. 
 
We must first determine what was sold by Wren and Newkam or the 
partners thereof and purchased by Associated.  There is no evidence in either of 
 
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these cases that either partnership sold real property to Associated separate from 
the partnership interests.  If the partnership, as distinguished from the partners, sold 
real property to Associated, there should be evidence of a deed transferring title 
from the partnership to Associated for a consideration; however, no such evidence 
is in the record. 
 
Looking in more detail at case No. 99-1582, the Settlement Statement 
introduced into evidence by the BOE states the name of the sellers as the “Partners 
of Christopher Wren Apartments Limited Partnership.”  Any notion that 
Associated paid consideration for the transfer of the real property title to the Wren 
property is nullified by the affidavit attached to the application for exemption from 
the conveyance fee.  The affidavit states that the real property is being distributed 
to Associated as the sole remaining partner of the Wren partnership and that “[n]o 
cash or other consideration will be paid upon the transfer.”  To be the sole 
remaining partner of Wren, Associated had to have purchased the Wren 
partnership interest, as opposed to the real property.  Thus, if there was a sale it 
was the sale of the Wren partnership interests to Associated not the sale of real 
property.  There is no evidence of any transfer of a deed for the real property for a 
consideration from Wren to Associated in the record. 
 
Next, the exemption application in case No. 99-1583 for the Heathermoor 
property contains a statement that the transfer is from a subsidiary to a parent “for 
 
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no consideration, nominal consideration, or in sole consideration of the 
cancellation or surrender of the subsidiary’s stock.”  The grantor of the deed is 
identified as Heathermoor, Inc.  There is one or more missing steps in the chain of 
title.  The Settlement Statement used in the Newkam transaction identifies the 
seller as the Newkam partnership and the buyer as Associated, but there is no 
evidence of any real property transferred by deed from Newkam to Associated.  
The deed in the record for which the application for exemption was filed shows a 
transfer from Heathermoor, Inc. to Associated.  However, there is nothing in the 
record to indicate from whom Heathermoor, Inc. received its title, or if it paid any 
consideration for the transfer.  Here, again, if there was a transfer of real property 
by deed for a consideration from Newkam to Associated, there is no evidence of 
such transfer in the record. 
 
Any sale of a partnership interest between the Wren or Newkam partnerships 
and Associated was the sale of personal property. R.C. 1782.39 defines an interest 
in a limited partnership as personal property.  Likewise, R.C. 1775.25 defines an 
interest in a general partnership as personal property.  Therefore, if Associated 
purchased a partnership interest in either the Wren limited or Newkam general 
partnership, its purchase was the purchase of personal property. 
 
Because the sale of the partnership interests would be the sale of personal 
property, not real property, R.C. 5713.03 would not be, as contended by the BOE, 
 
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applicable to the sale.  R.C. 5713.03 is only applicable “[i]n determining the true 
value of * * * real estate * * * [that] has been the subject of an arm’s length sale 
between a willing seller and a willing buyer within a reasonable length of time.”  
(Emphasis added.)  There is no evidence in either case of a sale of real property for 
a consideration. 
 
In a similar case, Salem Med. Arts & Dev. Corp. v. Columbiana Cty.  Bd. of 
Revision (1998), 82 Ohio St.3d 193, 195, 694 N.E.2d 1324, 1326-1327, this court 
considered the sale of the stock of a corporation whose only asset was real 
property.  The contention made by Salem was that since the property was the 
corporation’s only asset, the purchase of all the stock was the functional equivalent 
of a purchase on the open market of the real estate itself, thereby establishing the 
property’s value.  We rejected Salem’s contention, holding that the sale price of all 
the shares of the stock of a company does not establish the value of the company’s 
real property.  The opinion set forth that other evidence such as an appraisal or 
expert accounting testimony would be necessary to prove the value of the real 
property separate from the value of the company itself. 
 
Under Salem the sale of the partnership interests here did not determine the 
value of the real estate owned by the partnership.  However, as we declared in 
Salem, other evidence can be used to prove the value of the real property separate 
from the partnership interests. 
 
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As the appellant before the BTA, the BOE had the burden to present 
evidence to prove that the true value that it asserted for the real property was 
correct.  Cleveland Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (1994), 68 Ohio 
St.3d 336, 337, 626 N.E.2d 933, 934.  The property owner and the county, as 
appellees, were not required to present any evidence. Westhaven, Inc. v. Wood Cty. 
Bd. of Revision (1998), 81 Ohio St.3d 67, 70, 689 N.E.2d 38, 41. 
 
In this case no appraisal or expert accounting testimony was presented to 
establish the value of the real property separate from the value of the partnership 
itself.  And in addition, there is no evidence in the record to show that there was 
any transfer of real property for a consideration.  The BOE did not present 
evidence of value for the real property. 
 
Accordingly, we find that the decisions of the BTA in case Nos. 99-1582 
and 99-1583 are reasonable and lawful, and they are affirmed. 
Decision in case No. 99-1582 affirmed. 
Decision in case No. 99-1583 affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and 
LUNDBERG STRATTON, JJ., concur.