Case Title: AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision

Citation: 2008-Ohio-2565

Docket Number: 20070478

State: ohio

Court: Ohio Supreme Court

Date: 2008-06-03T00:00:00Z

Document:
[Cite as AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision, 118 Ohio St.3d 343, 2008-
Ohio-2565.] 
 
 
AP HOTELS OF ILLINOIS, INC., APPELLEE, v. FRANKLIN COUNTY BOARD OF 
REVISION ET AL., APPELLEES; BOARD OF EDUCATION OF CANAL WINCHESTER 
LOCAL SCHOOL DISTRICT, APPELLANT. 
[Cite as AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision, 118 Ohio 
St.3d 343, 2008-Ohio-2565.] 
Real property taxation – Appraisal report – Significance of date as of which 
appraiser certifies a valuation – Duty of BTA to perform independent 
valuation. 
(No. 2007-0478 — Submitted May 21, 2008 — Decided June 3, 2008.) 
APPEAL from the Board of Tax Appeals, No. 2004-K-349. 
____________________ 
 
Per Curiam. 
{¶ 1} The Board of Education of the Canal Winchester Local School 
District (“BOE”) appeals from a decision of the Board of Tax Appeals (“BTA”), 
in which the BTA adopted a reduced valuation of an Amerihost motel property.  
The BTA predicated the reduction on the report and testimony of an expert 
appraiser that the owner, AP Hotels of Illinois, Inc., presented to the BTA.  On 
appeal, the BOE contends that the BTA erred by adopting a valuation that the 
appraiser had certified as of January 1, 2003, as the value of the property on 
January 1, 2002.  In support of the BTA’s decision, the property owner relies on 
oral testimony of the appraiser tying the value stated in the appraisal report to the 
January 1, 2002 lien date. 
{¶ 2} Although we agree with the BOE that the opinion of value as of 
January 1, 2003, did not constitute an expert’s certification of value for tax year 
2002, we find that the BTA performed an independent valuation based on a record 
that contained sufficient evidence to support its conclusion.  We therefore affirm. 
SUPREME COURT OF OHIO 
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I 
{¶ 3} For tax year 2002, the auditor valued the 1.791-acre property at 
$2,300,800.  In its complaint to the Franklin County Board of Revision (“BOR”), 
AP Hotels sought a reduction of value to $1,500,000.  At the BOR hearing, AP 
Hotels presented no appraisal, but relied upon evidence of declining demand and 
increased competition, along with a study of comparable motel sales, as factors 
indicating a lower value of the property as of January 1, 2002.  The BOR retained 
the auditor’s value, and AP Hotels appealed to the BTA. 
{¶ 4} At the BTA hearing, AP Hotels presented the oral testimony and 
the appraisal report of Samuel Koon.  Koon had prepared an appraisal report 
using the cost, comparative-sales, and income methods to determine a value as of 
January 1, 2003.  AP Hotels offered the report to establish a value for the property 
for tax year 2002, although the lien date for tax year 2002 was one year before the 
date on the appraisal itself. 
{¶ 5} Koon testified concerning the general situation of motel properties 
after the terrorist attacks on September 11, 2001.  He also gave the following 
testimony in a colloquy with the property owner’s counsel:  
{¶ 6} “Q: 
If you were asked, would your opinion be higher or lower 
with regard to January 1, 2002 or January 1, 2003?  What would be your answer? 
{¶ 7} “A: 
I think the number would be the same.” 
{¶ 8} The BTA first cited Olmsted Falls Village Assn. v. Cuyahoga Cty. 
Bd. of Revision (1996), 75 Ohio St.3d 552, 664 N.E.2d 922, and Freshwater v. 
Belmont Cty. Bd. of Revision (1997), 80 Ohio St.3d 26, 684 N.E.2d 304, for the 
proposition that a finding of value must be premised on evidence relevant to the 
tax lien date.  The BTA framed the issue before it as follows:  “[W]e must * * * 
review the information contained within Koon’s appraisal and determine whether 
there exists sufficient corroborating information to support his testimony offered 
at hearing that his written opinion for tax lien date 2003 is equally applicable to a 
January Term, 2008 
3 
tax lien date one year earlier.”  To make that determination, the BTA reviewed the 
appraisal report’s application of valuation methods – cost, sales comparison, and 
income – and found them credible.  Finally, the BTA reiterated that Koon had 
“testified that his written opinion of value would not have changed had it been 
expressed for January 1, 2002,” and faulted the BOE for making only “general 
assertions” that did not “substantiate its assertion that Koon’s analysis was 
unreliable.”1  AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision (Feb. 16, 
2007), B.T.A. No. 2004-K-349 at 13.  The BTA accordingly adopted the value 
found by Koon as the value of the property as of January 1, 2002. 
II 
{¶ 9} The BOE asserts that the BTA committed reversible error by 
relying on an appraisal that did not value the property as of the lien date of tax 
year 2002.  In Olmsted Falls Village Assn., 75 Ohio St.3d 552, 664 N.E.2d 922, 
we rejected the BTA’s reliance on an appraisal because the appraiser did not tie 
his opinion of value to the tax lien date.  We held that “the BTA must base its 
decision on an opinion of true value that expresses a value for the property as of 
the tax lien date of the year in question.”  (Emphasis added.)  Id. at 555. 
{¶ 10} This proposition regarding the timing of valuation applies directly 
to the present case.  Here the expert appraiser, Samuel D. Koon, prepared an 
appraisal report using the cost, comparative-sales, and income methods to 
determine a value as of January 1, 2003.  AP Hotels then introduced that report to 
establish a value for the property as of January 1, 2002, the lien date for tax year 
2002. 
                                                 
1.  The BOE includes in its supplement an illegible copy of what it claims is a conveyance fee 
statement evidencing a sale of the property in May 2006.  Not only did the BOE not introduce this 
document into evidence at the BTA, the document presumably did not even exist until some 11 
months after the close of the June 2005 BTA hearing.  The BOE urges that we take judicial notice 
of this document, but judicial notice does not furnish litigants an exception to the rule that 
evidence must be timely offered in a judicial proceeding.  We decline to consider the document, 
and we order that it be stricken from the record of this appeal. 
SUPREME COURT OF OHIO 
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{¶ 11} In the other case noted by the BTA, Freshwater v. Belmont Cty. 
Bd. of Revision, 80 Ohio St.3d 26, 684 N.E.2d 304, the owner presented two 
appraisal reports and testimony of the appraiser.  The reports stated values as of 
two different dates from the tax lien date at issue, which was January 1, 1994.  
The first stated a value as of December 30, 1991, and the second a value as of 
April 5, 1996.  The appraiser averaged the two appraisals to estimate the value on 
the lien date.  The BTA rejected that approach, and we affirmed, noting that the 
“essence of an assessment is that it fixes the value based upon facts as they exist 
at a certain point in time” and that averaging did not constitute a determination of 
value as of the lien date.  Id. at 30. 
{¶ 12} On its face, this case presents a potential pitfall in light of the 
precepts of Olmsted Falls and Freshwater:  the BTA could have erroneously used 
the determination of value in the appraisal report as an expert opinion for the 
earlier year in light of the oral testimony at the hearing – even though the value 
was not certified by the appraiser as to the earlier lien date.  In appraising real 
property generally, the appraiser certifies the opinion and the report.  “Whether 
the certification is included as part of the introduction or presented on a separate, 
signed page, certification is important because it establishes the appraiser’s 
position, thereby protecting both the appraiser’s integrity and the validity of the 
appraisal.”  Appraisal Institute, Appraisal of Real Estate (12th Ed.2001) 616.  
Through the certification process, the appraiser takes responsibility for the 
opinions and conclusions set forth in the report. 
{¶ 13} To rely on the appraisal report as constituting an expert opinion of 
value for the 2002 tax year would constitute error.  Koon’s oral testimony at the 
BTA hearing falls short of constituting a certification that the value set forth in the 
report constitutes the value of the property as of the earlier lien date.  Simply 
comparing the testimonial words with the certification language in the written 
report compels this conclusion.  In the report, Koon signed the statement that 
January Term, 2008 
5 
“[t]he reported analyses, opinions, and conclusions are limited only by the 
reported assumptions and limiting conditions, and are my personal, impartial, 
unbiased professional analyses, opinions, and conclusions.”  Those were Koon’s 
written words when he assigned a value of $1,600,000 to the property as of 
January 1, 2003.  By contrast, on the issue of the value as of January 1, 2002, 
Koon said, “I think the number would be the same.”  The latter statement does not 
functionally equate to the former and does not constitute a sufficient certification 
of an opinion of value. 
{¶ 14} A careful reading of the BTA’s decision convinces us, however, 
that the BTA did not commit the error described in the foregoing paragraph.  The 
BTA’s citation of Olmsted Falls and Freshwater shows that it realized it had to 
avoid treating the appraisal report for tax year 2003 as a certified value for tax 
year 2002.  Instead, the BTA viewed the testimony and the report together as 
evidence of value as of January 1, 2002, and on the basis of that evidence the 
BTA concluded that the value of the property as of that date was $1,600,000.  As 
detailed in the next section, we find no legal error in the BTA’s analysis or 
conclusion. 
III 
{¶ 15} Because there was no express certification of value for the 2002 
lien date before it, the BTA faced a two-step task that our cases have prescribed.  
The BTA undertook to review the record to determine (1) whether it contained 
sufficient evidence to enable the BTA to perform an independent determination of 
value, and, if so, (2) what the value was.  Dayton-Montgomery Cty. Port Auth. v. 
Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, 865 
N.E.2d 22, ¶ 23 and 24.  If the record had contained insufficient evidence to 
enable the BTA to perform an independent valuation, the proper course of action 
would have been to revert to the BOR’s determination.  Id. at ¶ 15, citing 
SUPREME COURT OF OHIO 
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Simmons v. Cuyahoga Cty. Bd. of Revision (1998), 81 Ohio St.3d 47, 48-49, 689 
N.E.2d 22. 
{¶ 16} We conclude that the BTA properly conceived and carried out its 
duty.  The appraisal report set forth extensive discussion of comparable sales, the 
property’s income and expenses, and the nature of the motel market that was 
pertinent to January 1, 2002, as well as January 1, 2003.  Although the appraiser 
did not certify his ultimate opinion of value as of the 2002 tax lien date, his 
certification that the “statements of fact contained in this report are true and 
accurate” did permit the BTA to use the factual information set forth in the report.  
Moreover, AP Hotels had submitted similar and additional supportive information 
to the BOR. 
{¶ 17} This factual information in the appraisal report and the additional 
evidence before the BOR constituted an adequate basis for determining value.  
The evidence also corroborated Koon’s hearing testimony that in the period 
immediately after the September 11 terrorist attacks the demand for motel rooms 
decreased.  Additionally, the geographic area surrounding the property had an 
oversupply of motel rooms.  Finally, Koon’s own statement that the value as of 
January 1, 2002, would not have been higher or lower than the value on January 
1, 2003, furnished an increment of evidence in support of that allegation, and the 
BTA found that the other evidence supported that statement. 
{¶ 18} Under these circumstances, it would have been error for the BTA 
to revert to the auditor’s valuation of $2,300,800.  Colonial Village Ltd. v. 
Washington Cty. Bd. of Revision, 114 Ohio St.3d 493, 2007-Ohio-4641, 873 
N.E.2d 298, ¶ 19.  Instead, the BTA performed an independent valuation based on 
the evidence in the record, and we defer to the factual conclusion that it reached.  
See Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 
14 (the “ ‘BTA is responsible for determining factual issues and, if the record 
contains reliable and probative support for these BTA determinations,’ the court 
January Term, 2008 
7 
will affirm them”), quoting Am. Natl. Can Co. v. Tracy (1995), 72 Ohio St.3d 
150, 152, 648 N.E.2d 483.  Nor do we find – contrary to the BOE’s assertions – 
any abuse of discretion in the BTA’s determination of the credibility and weight 
accorded to the evidence before it.  See Strongsville Bd. of Edn. v. Cuyahoga Cty. 
Bd. of Revision, 112 Ohio St.3d 309, 2007-Ohio-6, 859 N.E.2d 540, ¶ 15 (the 
court “ ‘will not reverse the BTA’s determination on credibility of witnesses and 
weight given to their testimony unless we find an abuse of * * * discretion’ ”), 
quoting Natl. Church Residence v. Licking Cty. Bd. of Revision (1995), 73 Ohio 
St.3d 397, 398, 653 N.E.2d 240. 
{¶ 19} Given the evidence before it, the BTA acted reasonably and 
lawfully when it adopted a reduced valuation for the motel property.  We 
therefore affirm. 
Decision affirmed. 
 
MOYER, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, LANZINGER, and CUPP, JJ., concur. 
____________________ 
 
Wayne E. Petkovic, for appellee AP Hotels of Illinois, Inc. 
 
Martin Hughes & Associates, Martin J. Hughes III, and Jackie Lynn 
Hager, for appellant. 
______________________