Case Title: Olmsted Falls Village Assn. v. Cuyahoga Cty. Bd. of Revision

Citation: 1996-Ohio-456

Docket Number: 19950839

State: ohio

Court: Ohio Supreme Court

Date: 1996-06-05T00:00:00Z

Document:
Olmsted Falls Village Association, Appellant, v. Cuyahoga County Board 
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of Revision; Olmsted Falls Board of Education, Appellee. 
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[Cite as Olmsted Falls Village Assn. v. Cuyahoga Cty. Bd. of Revision 
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(1996), _____ Ohio St.3d ______.] 
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Taxation -- Valuation of apartment complex -- Board of Tax Appeals’ 
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decision reversed and remanded when it is based on 
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evidence that did not value the property as of the tax lien date. 
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(No. 95-839 -- Submitted December 14, 1995 -- Decided June 5, 
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1996.) 
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Appeal from the Board of Tax Appeals, No. 93-X-998. 
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The Olmsted Falls Village Association, appellant, complained to the 
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Cuyahoga County Board of Revision (“BOR”), (“association”), about the 
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true value of its apartment complex as of January 1, 1991.  It sought to 
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decrease the value of this complex from $2,432,914 to $1,870,000.  The 
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Olmsted Falls Board of Education (“BOE”), appellee, filed a counter-
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complaint seeking to increase the value of this property to $2,480,000. 
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The property at issue is a 5.468-acre parcel of land containing five 
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two-story, frame apartment buildings, built in 1971.  Each building contains 
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sixteen suites for a total of eighty suites.  This total number of suites divides 
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into forty one-bedroom apartments, twenty two-bedroom apartments, and 
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twenty three-bedroom apartments.  Each apartment unit has central air-
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conditioning, a forced-air, gas furnace, and a thirty-gallon, hot water tank.  
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Each building contains a laundry room with one washer and one dryer.  The 
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complex includes an in-ground swimming pool with pool building and 
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associated land improvements and landscaping, and several service 
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buildings. 
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The BOR, after hearing, retained the true value determined by the 
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auditor, and the Association appealed to the Board of Tax Appeals (“BTA”). 
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The Association presented the testimony of Wesley Baker, a real 
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estate appraisal expert, to the BTA.  He testified that the true value of the 
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property was $1,950,000 as of January 1, 1991.  The BOE presented the 
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expert real estate appraisal testimony of Sam D. Canitia, who testified that 
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the true value of the property was $2,476,000.  In testifying about 
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supporting data for selecting a capitalization rate, Canitia engaged in the 
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following colloquy with counsel for the Association: 
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“Q.  Did you have a quarterly report for the last quarter of 1990? 
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“A.  Yes, ma’am. 
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 “Q.  You also had a quarterly report for the first quarter of 1991; is 
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that correct? 
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“A.  Yes, ma’am. 
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“Q.  Wouldn’t those reports be more reflective of the market as of 
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January 1st, 1991? 
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“A.  We’ve got a nomenclature problem here.  1/1/91 is a reflective 
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date, and that’s a tax lien date, it’s not a date of valuation.  The date of 
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valuation is for the year -- the activity of the year 1991.  I would not look 
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into ‘90 at all, I would look into the year of ‘91.   
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“So I could not answer your question if you’re talking about 1990 
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because that’s not part of my appraisal.   
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“Q.  I believe the taxes became a lien on January 1st, 1991 and the 
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auditor determined value as of January 1st, 1991.   
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“A.  As a reflective date, not as a date certain.   
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“Q.  That is your opinion.   
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“A.  We got a problem here, I don’t know whether we are going to 
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cure it, but I can indicate to you that there is a problem with respect to 1991 
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as against the year 1991, tax lien date ‘91 and date of valuation ‘91. 
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“Q.  You on your first page of your appraisal report say ‘As of 
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January 1, 1991.’ 
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“A.  That’s a reflective date.  It reflects the activity for the year 
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1991.” 
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The BTA valued the property based on Canitia’s opinion.  
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Consequently, it determined the true value of the property to be $2,476,000 
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as of January 1, 1991. 
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This cause is before this court upon an appeal as of right. 
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Fred Siegel Co., L.P.A., and Annrita S. Johnson, for appellant. 
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Kolick & Kondzer, Daniel J. Kolick and John P. Desimone, for 
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appellee. 
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Per Curiam.  We reverse the BTA’s decision and remand this matter 
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to the BTA because the BTA based its decision on evidence that did not 
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value the property as of the tax lien date.   
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R.C. 5715.19(A)(1)(d) authorizes a property owner to file complaints 
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with a board of revision against determinations made by the county auditor 
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concerning the true value of the owner’s property.  According to R.C. 
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5715.19(D), “[t]he determination of any such complaint shall relate back to 
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the date when the lien for taxes * * * for the current year attached * * *.”  
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The lien for taxes for each year attaches on the first day of January.  R.C. 
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323.11. 
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To emphasize the importance of this date, R.C. 5715.01, which 
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authorizes the Tax Commissioner to direct and supervise the assessment of 
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real property for taxation, including adopting rules to that end, states: 
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“The commissioner shall neither adopt nor enforce any rule that 
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requires true value for any tax year to be any value other than the true value 
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in money on the tax lien date of such tax year * * *.” 
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The BTA valued the property according to Canitia’s opinion of value.  
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However, Canitia did not value the property as of any certain date.  
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According to his testimony, he valued the property as of the entire year.  To 
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him, the tax lien date was a reflective date, not the valuation date.  Thus, the 
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evidence on which the BTA relied for its ultimate decision is unlawful.  SFZ 
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Transp., Inc. v. Limbach (1993), 66 Ohio St.3d 602, 613 N.E. 2d 1037. 
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We emphasize that the BTA “* * * may consider pre- and post-tax 
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lien date factors that affect the true value of the taxpayer’s property on the 
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tax lien date.”  Youngstown Sheet & Tube Co. v. Mahoning Cty. Bd. of 
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Revision (1981), 66 Ohio St.2d 398, 20 O.O. 3d 349, 422 N.E. 2d 846, 
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paragraph two of the syllabus.  However, the BTA must base its decision on 
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an opinion of true value that expresses a value for the property as of the tax 
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lien date of the year in question. 
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We also stress that the BTA decides the factual matters in these cases, 
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Wolf v. Cuyahoga Cty. Bd. of Revision (1984), 11 Ohio St.3d 205, 207, 11 
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OBR 523, 524, 465 N.E. 2d 50, 52, and that “[w]e will not overrule BTA 
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findings of fact that are based upon sufficient probative evidence.”  R.R.Z. 
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Assoc. v. Cuyahoga Cty. Bd. of Revision (1988), 38 Ohio St.3d 198, 201, 
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527 N.E. 2d 874, 877. 
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We turn now to some other specific claims of error presented by the 
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Association.  First, the Association claims that the BTA erred when it did 
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not employ the actual income and expenses for the property.  In Webb Corp. 
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v. Lucas Cty. Bd. of Revision (1995), 72 Ohio St.3d 36, 647 N.E. 2d 162, we 
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held that an appraiser may employ actual income as reduced by actual 
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expenses if both amounts conform to the market.  We did not require such 
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use.  Moreover, we did not, in Villa Park Ltd. v. Clark Cty. Bd. of Revision 
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(1994), 68 Ohio St.3d 215, 625 N.E. 2d 613, reject the use of a pro forma 
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expense rate.  Instead, we required the BTA to make factual findings, 
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supported by the record, of the appropriate market rents and expenses to be 
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used in the income approach to value.   Id. at 218, 625 N.E. 2d at 615.  
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Furthermore, we did not require the BTA to deduct a reserve for 
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replacement in Freshwater v. Belmont Cty. Bd. of Revision (1991), 58 Ohio 
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St.3d 140, 568 N.E. 2d 1215, as claimed by the Association.  In that case, 
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the BTA refused to consider such a deduction, but we reversed and 
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remanded the matter for the BTA to reconsider the components included in 
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and the deductibility of reserves for replacement.  We ruled that such an 
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expense category was a proper element in an income approach analysis.  We 
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did not require the deduction of a reserve for replacement.  In this case, we 
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note, neither appraiser proposed a reserve for replacement.  Thus, the record 
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does not support such a reserve deduction. 
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In summary, as to these latter claims, “[w]e decline to bind the BTA 
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to a particular method of valuation because the imposition of rigid 
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methodological strictures would necessarily impinge upon the BTA’s wide 
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discretion to weigh evidence and assess the credibility of witnesses.”  
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Youngstown Sheet & Tube Co. v. Mahoning Cty. Bd. of Revision, supra, 66 
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Ohio St. 2d at 402, 20 O.O. 3d at 352, 422 N.E. 2d at 849. 
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Finally, the Association claims that Canitia is not qualified to testify, 
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since he has not obtained a certificate under R.C. Chapter 4763, the chapter 
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governing real estate appraisers.  However, R.C. 4763.13(F) states: 
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“Nothing this in this chapter shall preclude a person who is not 
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licensed or certified under this chapter from appraising real estate for 
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compensation.” 
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Thus, Canitia may testify about the true value of real estate if the BTA 
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decides he is qualified. 
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Accordingly, we reverse the BTA’s decision because it is based on an 
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opinion of true value that did not value the property as of the tax lien date.  
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We remand the cause to the BTA to revalue the property. 
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Decision reversed 
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and cause remanded. 
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MOYER, C.J., F.E. SWEENEY, PFEIFER and COOK, JJ., concur. 
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DOUGLAS and RESNICK, JJ., dissent. 
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WRIGHT, J., not participating. 
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DOUGLAS, J., dissenting.      The semantical argument made by the 
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majority does not change, in any way, the true value of the property in 
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question as of tax lien date.  Once again, a majority of the court is invading 
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the province of the BTA.  I would affirm the decision of the BTA. 
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RESNICK, J., concurs in the foregoing dissenting opinion. 
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