[Cite as Gupta v. Lucas Cty. Bd. of Revision , 2021-Ohio-332.]

IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT LUCAS COUNTY

Umeshkumar Gupta Court of Appeals No. L-20-1106 Appellant Board of Tax Appeals No. 2019-905

v. Lucas County Board of Revision DECISION AND JUDGMENT Appellee Decided: February 5, 2021

* * * * * Bertrand R. Puligandla, for appellant. Julia R. Bates, Lucas County Prosecuting Attorney, John A. Borell and Elaine B. Szuch, Assistant Prosecuting Attorneys, for appellee.

* * * * * ZMUDA, P.J.

I. Introduction {¶ 1} In this property tax appeal, appellant, Umeshkumar Gupta, appea ls the judgment of the Ohio Board of Tax Appeals, assessing a true val ue of $546,000 to appellant’s real property. Finding no error in the proceedings below, we affirm.2. A. Facts and Procedural Background {¶ 2} On March 28, 2019, appellant filed a complaint with appellee, t he Lucas County Board of Revision, challenging the valuation of his real property located at 5661 Mallard Pointe Lane, Sylvania, Lucas County, Ohio (the “subject property”). At the time the complaint was filed, the subject property was valued at $52 8,300. Appellant noted in his complaint that he purchased the subject property on March 3 0, 2018, for a sale price of $546,000. Based on his allegation that most of the comparab le properties in Sylvania Township were valued at 75 percent of their sale price, appella nt requested a reduction in the assessed value of the subject property to $425,000. {¶ 3} A hearing on appellant’s complaint was held on June 4, 2019. T he following day, appellee issued its decision denying appellant’s request for a reduction in the assessed value of the subject property. Thereafter, appell ant filed a timely notice of appeal with the Ohio Board of Tax Appeals (“BTA”), and a hearin g on the appeal was held on November 13, 2019. Appellant was the only witness to t estify at the hearing. {¶ 4} During his testimony, appellant acknowledged that he had purcha sed the newly constructed subject property on March 30, 2018, at a cost of $546,000. Nonetheless, appellant argued that the sale price should be dis regarded for purposes of property valuation, because he purchased the subject property w hile under duress. Rather than look to the recent sale price to determine the subject pro perty’s value, appellant urged the BTA to consider his evidence of sales of comparable p roperties and to apply the same ratio of true value to sales price that was applied to those comparable properties.3. {¶ 5} During his testimony, appellant stated that he moved from Adria n, Michigan, into a condominium located approximately two miles fr om the subject property in September 2016. At the time, appellant only intend ed to live in the condominium for three to six months. Meanwhile, appellant was “desperately looking for a house,” and “had to make a quick decision as the school y ear was approaching.” {¶ 6} Appellant hired the services of a real estate agent, and looked at several properties over the ensuing months. In October 2017, appellant found a property that suited him, and proceeded to make an offer to purchase the prop erty, which was rejected after another potential purchaser outbid appellant. According to appellant, “the family was pretty upset about [being outbid]. As a matter of fact, I can remember that for at least three or four weeks I was pretty lost because I had this pressure from the family. * * * We wanted to provide a good house for our kids. So I was pretty devastated. To

me it was almost like the end of the world.” {¶ 7} After being outbid in October 2017, appellant decided to place an offer on the subject property, which was listed for sale at a price of $ 559,900 and out of his price range. He originally offered to purchase the subject property for $520,000. Following negotiations, appellant and the seller agreed to a purchase pri ce of $555,000, and both parties executed a purchase agreement reflecting that price, co ntingent upon appellant securing conventional financing. The purchase agreement was ad mitted into evidence at the BTA hearing.4. {¶ 8} Under the terms of the purchase agreement, closing was to occur on or before January 16, 2018. Appellant paid $3,000 in earnest mone y, plus a non-refundable deposit of $35,000 to the seller in order to guarantee payment for additional work on the basement of the subject property that was to be completed by se ller prior to closing. Appellant testified that the seller insisted upon the deposit b ecause he “wanted us ‘knee deep’ in the transaction so we did not walk away.” {¶ 9} On December 13, 2017, First Federal Bank approved a loan to be used by appellant to purchase the subject property. Six days later, an appraisal was performed in connection with the loan. An excerpt of the appraisal report t hat was prepared by the appraiser, which was entered into evidence at the BTA hearing, indicated the appraiser’s determination that the subject property’s value was $540,000. During the appraisal, the appraiser found that the square footage of the home was 300 squ are feet smaller than advertised, which led to a valuation that was lower than the pu rchase price agreed upon by appellant. {¶ 10} After receiving the appraisal report, appellant contacted the s eller and requested a modification to the terms of the purchase agreement , namely a reduction in the purchase price. Appellant and the seller ultimately orally agreed to change the purchase price to $540,000, at which time appellant provided th e seller with his $35,000 deposit. {¶ 11} Within a few days of modifying the purchase price, the seller c ontacted appellant and requested to close on the sale of the subject pro perty on January 5, 2018,5. eleven days prior to the date of closing set forth in the purch ase agreement. Appellant testified that the seller had not completed the remaining work on the basement at this time. Appellant rejected the seller’s request to close early a nd, according to appellant, the seller informed him that “the deal is ended.” Appellant st ated that the seller “thought [$540,000] was not economically feasible for him at that point in time.” {¶ 12} Reportedly overwhelmed by the stress of the situation, appellan t checked into the emergency room on December 25, 2017, where he remained under observation for four hours. One week later, appellant and seller resumed n egotiations regarding the sale of the subject property, which culminated in the execution of a second purchase agreement on January 11, 2018. During the negotiations, appell ant agreed to increase the purchase price to $550,000 and forego some of the features that were supposed to be added to the house under the original agreement. Appellant the n decided to further eliminate certain costs, which brought the purchase price down to $546,000. {¶ 13} Regarding his negotiation and eventual execution of the second purchase agreement, appellant testified that he “felt [he] had no choice because we were slowly getting sucked into the deal deeper and deeper and deeper, and we were just not given any choice.” Appellant went on to explain that he was afraid t hat the seller would

withdraw from the transaction and he would “lose the deal.” Th erefore, appellant agreed to move forward under the seller’s proposed terms. As to the e ffect these negotiations had on his state of mind at the time, appellant stated that “it was emotionally very tormenting trying to deal with a full-time job, kids at home, l iving in the condo the past6. three to six months, all these breaches of the contract one aft er another, all the compromises one after another. I had no choice.” {¶ 14} Later in the hearing, appellant introduced a spreadsheet printo ut containing 12 properties, 6 of which appellant argued were comparable to t he subject property. The spreadsheet includes several pieces of information including th e true values assigned to each property by the Lucas County Auditor. Appellant testified that he assembled the spreadsheet using information he retrieved from the Lucas Count y Auditor’s website. The six properties identified by appellant as comparable were e ach within four miles of the subject property, and four of them were sold in arm’s-lengt h transactions within one year of appellant’s purchase of the subject property. {¶ 15} Appellant testified that the sale prices of the properties he a lleged were comparable to the subject property ranged from $506,282.70 to $ 520,528.75. Moreover, appellant determined that the true values on the comparable pro perties averaged 79 percent of the sale prices. By contrast, appellant noted that the true value assigned to the subject property was 97 percent of the sale price. Thus, appel lant requested that the BTA determine that the true value of the subject property should be reduced to 79 percent of the purchase price, or $431,340. {¶ 16} Following the BTA hearing, on May 28, 2020, the BTA issued its decision on appellant’s request for a reduction in the true value of the subject property. The BTA rejected appellant’s argument that his “pressing family obligat ions and difficulties” amounted to compulsion or duress, and instead found that appell ant voluntarily purchased7. the subject property in an arm’s-length transaction that establ ished the appropriate measure of the property’s true value. Therefore, the BTA concl uded that appellant’s purchase price, $546,000, constitutes the true value of the sub ject property. Moreover, the BTA rejected appellant’s argument of the subject property’s true value based upon the comparable properties contained in appellant’s spreadsheet, after concluding that the properties selected by appellant were not comparable because th ey varied “by age, date of sale, and square footage, and number of bedrooms, bathrooms, an d floors. No adjustments were made to account for differences with the home sitused on the subject property.” {¶ 17} Following the BTA’s issuance of its decision, appellant filed h is timely notice of appeal with this court. The matter was placed on our accelerated calendar, and

is now decisional. B. Assignments of Error {¶ 18} On appeal, appellant assigns the following errors for our revie w: I. The Board’s decision is unreasonable and/or unlawful becaus e the cases it relied upon to find no actual compulsion are inapplica ble to this

case. II. The Board’s decision is unreasonable and/or unlawful becau se it does not analyze whether actual compulsion existed under the “d istortionof-the-negotiation process” standard.8. III. The facts of this case demonstrate that the normal operat ion of the negotiation process was extremely distorted and caused actu al compulsion. Therefore, the Board’s decision is unreasonable an d/or

unlawful. IV. The Board’s ruling that Gupta’s comparable-sales data were cherry-picked and unadjusted was unreasonable and/or unlawful. {¶ 19} As appellant’s assignments of error are interrelated, we will a ddress them simultaneously. II. Analysis

A. Standard of Review {¶ 20} Appellant appealed appellee’s determination of the subject prop erty’s value to the BTA. Thus, it was appellant’s burden to prove that he w as entitled to a decrease in the value of the subject property that was determined by appell ee. Shinkle v. Ashtabula Cty. Bd. Of Revision , 135 Ohio St.3d 227, 2013-Ohio-397, 985 N.E.2d 1243, ¶ 24. In meeting his burden, appellant is required to “‘come forward and demonstrate that the

value it advocates is a correct value.’” Id. , quoting EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision , 106 Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, ¶ 6. The B TA has “wide discretion to determine the weight given to evidence and the credibility of

witnesses before it.” Witt Co. v. Hamilton Cty. Bd. of Revision , 61 Ohio St.3d 155, 573 N.E.2d 661 (1991).9. {¶ 21} In reviewing decisions of the BTA that are appealed to this cou rt, we are guided by the following language set forth by the Ohio Supreme Court in its decision in Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision , 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004: The true value of property is a “question of fact, the determin ation of which is primarily within the province of the taxing authorities,” an d accordingly, we “will not disturb a decision of the Board of Tax Appeals wit h respect to such valuation unless it affirmatively appears from the record that such

decision is unreasonable or unlawful.” Cuyahoga Cty. Bd. of Revision v.

Fodor , 15 Ohio St.2d 52, 239 N.E.2d 25 (1968), syllabus.

Id. at ¶ 9. B. The BTA’s valuation of the subject property was not unreasonable or unlawful. {¶ 22} In each of the four assignments of error in appellant’s brief t o this court, appellant argues that the BTA’s valuation of the subject proper ty was unreasonable or

unlawful. {¶ 23} Under the Ohio Constitution, “[l]and and improvements thereon s hall be taxed by uniform rule according to value.” Ohio Constitution, Article XII, Section 2. Likewise, R.C. 5713.01(B) requires county auditors to appraise real property “at its true value in money.”10. {¶ 24} R.C. 5713.03 governs how the true value of real property is det ermined. In relevant part, R.C. 5713.03 provides: In determining the true value of any tract, lot, or parcel of r eal estate under this section, if such tract, lot, or parcel has been the subjec t of an arm’s length sale between a willing seller and a willing buyer within a reasonable length of time, either before or after the tax lien date, the a uditor may consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes. {¶ 25} Construing the foregoing statutory language, the Tenth District identified “two rebuttable presumptions applied in valuation cases.” Gallick v. Franklin Cty. Bd. of

Revision , 2018-Ohio-818, 108 N.E.3d 237, ¶ 28. The first presumption i s that the sales price of a recent arm’s-length transaction “‘[meets] all the re quirements that characterize

true value.’” Id ., quoting Cincinnati Sch. Dist. Bd. of Edn. v. Hamilton Cty. Bd. of

Revision , 78 Ohio St.3d 325, 327, 677 N.E.2d 1197 (1997). Secondly, th e Tenth District indicated that the above-quoted statutory language creates a re buttable presumption that “‘[t]he best evidence of the “true value of money” of real prop erty is an actual, recent sale of the property in an arm’s-length transaction.’” Id. , quoting Conalco, Inc. v. Monroe Cty. Bd. of Revision , 50 Ohio St.2d 129, 363 N.E.2d 722 (1977), paragraph one of the syllabus; accord Mann v. Cuyahoga Cty. Bd. of Revision , 152 Ohio St.3d 197, 2017-Ohio-8820, 94 N.E.3d 529, ¶ 12 (clarifying that “a price f rom a recent arm’s-length11. sale is not conclusive evidence of a property’s value but it ne vertheless ‘constitute[s] the best evidence of the property’s value’”). {¶ 26} In its decision in Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision , 150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916, the Ohio Supreme Court recognized the two rebuttable presumptions set forth above, and indicated that “the proponent of a sale is not required, as an initial matter, to affirmatively demonstrat e with extrinsic evidence that a sale price reflects the value of the unencumbered fee-simple estate.” Id. at ¶ 32. Rather, once the proponent of the sale price valuation provides “basic documentation of the sale,” the property owner has “the burden of going forward with rebuttal evidence showing that the price [does] not, in fact, reflect the propert y’s true value.” Id. , citing

Cincinnati School Dist. at 327-328. To satisfy this burden, the opposing party may present evidence showing that the sale was not at arm’s length or not recent to the tax lien

date. Huber Heights City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision , 152 Ohio St.3d 182, 2017-Ohio-8819, 94 N.E.3d 515, ¶ 11. Where the opposing party fails to demonstrate a reason to disregard the sale price as an indicato r of value, then the sale price is the best evidence of the property’s true value. Lunn v. Lorain Cty. Bd. of

Revision , 149 Ohio St.3d 137, 2016-Ohio-8075, 73 N.E.3d 486, ¶ 18. {¶ 27} During the proceedings that took place before appellee and the BTA in this case, the purchase agreement evidencing appellant’s recent purc hase of the subject property for $546,000 was introduced into evidence without obje ction from appellant. Thus, appellant had the burden of going forward with evidence t o demonstrate that the12. sale was not at arm’s length or was not a recent sale. Because the parties do not dispute that the sale was recent enough to trigger the rebuttable presu mption that the sale price constitutes the subject property’s true value, the issue in thi s appeal is whether appellant’s evidence demonstrated that the sale was not at arm’s length. {¶ 28} In Walters v. Knox Cty. Bd. of Revision , 47 Ohio St.3d 23, 546 N.E.2d 932 (1989), syllabus, the Ohio Supreme Court held that “[a]n arm’s- length sale is characterized by these elements: it is voluntary, i.e., withou t compulsion or duress; it generally takes place in an open market; and the parties act in their own self-interest.” The parties to the transaction at issue here were acting in the ir own self-interest, and the transaction took place in an open market. Appellant does not d ispute those elements. Instead, appellant contends that his purchase of the subject pr operty was involuntary because it was the result of compulsion or duress. {¶ 29} During the BTA hearing, appellant testified that he felt like h e had no option other than purchasing the subject property once he enter ed into the first purchase agreement. Appellant’s pressured situation was brought about b y his family being upset that they were outbid on the first property they attempted to p urchase after moving to Ohio from Adrian, Michigan. The situation was made worse by th e fact that appellant’s children were in high school and he did not want them to finish their high school education while living in a condominium. Appellant testified t hat he was “pretty devastated” by the situation, and indicated that he felt like i t was “almost like the end of the world.” Additionally, appellant testified that the seller intentionally applied pressure13. by forcing appellant to make a large nonrefundable deposit that would put appellant “knee deep” in the transaction. {¶ 30} In its decision, the BTA noted its consideration of appellant’s testimony and documentary evidence on the issue of compulsion and duress, and concluded that appellant was under “pressing family obligations and difficulti es” during the negotiation process. Nonetheless, the BTA determined that appellant failed to prove that his purchase decision was the product of compulsion or duress suffi cient to vitiate the arm’s-length nature of the transaction. {¶ 31} Having reviewed the record evidence in its entirety, we cannot affirmatively conclude that the BTA’s decision is unreasonable or unlawful. While appellant’s stress level was obviously high during the negotiat ions that led to his purchase of the subject property, most of that stress was broug ht on by his own circumstances, not by pressure from the seller. Moreover, appe llant was in no way compelled to agree to the terms proposed by the seller. Indeed , the seller even attempted to terminate the agreement at one point, yet appellant persiste d with negotiations that culminated in the execution of the second purchase agreement at a lesser price than that agreed upon in the initial purchase agreement. While it is tru e that seller required appellant to make a sizable nonrefundable deposit before agreei ng to appellant’s terms, this requirement was reasonable in light of the additional work the seller was facing prior to closing on the sale of the subject property, and appellant w as free to walk away from the deal if he viewed the deposit as oppressive. In short, the evidence presented by14. appellant supports the BTA’s determination that appellant’s pur chase of the subject property was voluntary, and not a result of compulsion or dures s. {¶ 32} In his assignments of error, appellant contends that the BTA er roneously valued the subject property in accordance with the rebuttable p resumption that his purchase price represents the true value of the subject propert y. Appellant contends in his first assignment of error that the BTA relied upon distingu ishable cases to find that no compulsion exists here. However, as noted above, the BTA did n ot rely upon cases in order to find no compulsion. Rather, it looked to the evidence presented by appellant, and determined that no compulsion existed based upon that evide nce. Thus, there is no merit to appellant’s argument, and we find his first assignment of error not well-taken. {¶ 33} In his second assignment of error, appellant contends that the BTA’s

decision was unreasonable and/or unlawful because it failed to account for the seller’s distortion of the negotiation process. Relatedly, in his third assignment of error, appellant argues that the seller’s distortion of the negotiation process caused actual compulsion in this case, thereby rebutting the presumption that the sale pric e of the subject property is the property’s true value. While acknowledging that he was mot ivated to purchase the subject property by his “urgent desire to obtain a home,” appel lant asserts that it was seller’s conduct during negotiations, not his sense of urgency brought about by family pressures, that compelled him to purchase the subject property. According to appellant, the BTA “failed to examine whether the normal operations of the negotiations process were distorted, thereby causing actual compulsion.”15. {¶ 34} Our review of the BTA’s decision reveals that the BTA explicitl y considered appellant’s compulsion argument in light of the evid ence presented at the hearing. In its decision, the BTA found appellant’s “issues wi th the [seller] to be equally unpersuasive” as it related to appellant’s compulsion argument. The BTA noted that the purchase price of the subject property was modified several tim es to meet the parties’ requirements. The BTA also looked to email exchanges between a ppellant and the seller, which were submitted by appellant at the hearing, and found tha t appellant presented as a “capable negotiator and willing to reject the [seller’s] demand s when he believed it was appropriate.” We have reviewed these emails, and we too find t hat they belie appellant’s assertion that he was a hostage to the transaction because of s eller’s conduct. {¶ 35} In light of the foregoing, it is clear that the BTA did, in fac t, consider and reject appellant’s argument that the seller’s conduct distorted the negotiation process and compelled appellant to purchase the subject property. Therefor e, we find no merit to appellant’s contention, under his second assignment of error, t hat the issue was not addressed by the BTA. Further, we find that the BTA’s rejectio n of appellant’s compulsion argument was not unreasonable or unlawful, as the ev idence on which it relied to reach its conclusion supports the finding that appell ant’s purchase of the subject property was not compelled by the seller. Accordingly, we find appellant’s second and third assignments of error not well-taken. {¶ 36} In his fourth assignment of error, appellant argues that the BT A’s rejection of the comparable sales data he introduced into evidence at the hearing was unreasonable16. and/or unlawful. In its decision, the BTA found that the compa rable properties selected by appellant varied from the subject property on a number of ma terial characteristics including age of the property, the date of sale, the properties ’ square footage, and the number of bedrooms, bathrooms, and floors. Because appellant f ailed to adjust for all of these variables, opting instead to simply compare the propertie s by their price per square foot, the BTA concluded that the comparable sales data provided by appellant did not rebut the presumption that the sale price of the subject proper ty was the best indicator of

its true value. {¶ 37} Upon consideration of the sales comparison evidence submitted b y appellant, we cannot say that the BTA improperly rejected appel lant’s proposed value for the subject property under the sale comparison approach. As no ted by the BTA, the sales prices relied upon by appellant did not fully account for the d ifferences between the allegedly comparable properties and the subject property. Appe llant insists that his price per square foot figure adequately accounted for these differenc es, but we fail to see how such a calculation fully accounts for variables such as age of property, date of sale, number of bedrooms, number of bathrooms, or number of floors. At best, the price per square foot adjustment may account for differences in the overa ll size of the properties. Therefore, we do not find that the BTA’s rejection of the true value proposed by appellant under the sales comparison approach was unreasonable or unlawful. {¶ 38} Accordingly, appellant’s fourth assignment of error is not well -taken.17. III. Conclusion {¶ 39} In light of the foregoing, the judgment of the Ohio Board of Ta x Appeals is affirmed. The costs of this appeal are assessed to appellant u nder App.R. 24.

Judgment affirmed.

A certified copy of this entry shall constitute the mandate pur suant to App.R. 27. See also 6th Dist.Loc.App.R. 4.

Mark L. Pietrykowski, J. ________________________

_______ JUDGE Christine E. Mayle, J.

_______________________________ Gene A. Zmuda, P.J. JUDGE CONCUR.

_______________________________ JUDGE

This decision is subject to further editing by the Supreme Cour t of Ohio’s Reporter of Decisions. Parties interested in viewing th e final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/.