Court Opinion

ID: 2977225
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:04:49.182475+00
Date Added: 2024-06-11T11:21:36.626233
License: Public Domain

PETITIONER APPEARING PRO SE:           ATTORNEY FOR RESPONDENT:
ROBERT J. KUCHLER, TRUSTEE             MARILYN S. MEIGHEN
Long Beach, IN                         ATTORNEY AT LAW
                                       Carmel, IN
_____________________________________________________________________

                                IN THE
                          INDIANA TAX COURT
_____________________________________________________________________
                                                                  Sep 18 2015, 3:02 pm
RJK TRUST/                                   )
ROBERT J. KUCHLER, TRUSTEE,                  )
                                             )
      Petitioner,                            )
                                             )
                     v.                      ) Cause No. 45T10-1304-TA-00050
                                             )
LAPORTE COUNTY ASSESSOR,                     )
                                             )
      Respondent.                            )

                    ON APPEAL FROM A FINAL DETERMINATION OF
                        THE INDIANA BOARD OF TAX REVIEW

                                 FOR PUBLICATION
                                SEPTEMBER 18, 2015

WENTWORTH, J.

      RJK Trust, Robert J. Kuchler, Trustee, appeals the final determination of the

Indiana Board of Tax Review that increased its 2006 real property assessment from

$630,500 to $800,000 based on an independent appraisal the Assessor provided to

RJK Trust for the first time at the administrative hearing.   The Court reverses the

Indiana Board’s final determination.

                          FACTS AND PROCEDURAL HISTORY

      RJK Trust owns a single-family residential home in Long Beach, Indiana. The

Michigan Township Assessor determined the assessed value of the property to be
$630,500 ($421,600 for land and $208,900 for improvements) as of the March 1, 2006,

assessment date.

      Believing the value to be too high, RJK Trust filed an appeal with the LaPorte

County Property Tax Assessment Board of Appeals (PTABOA). On May 11, 2011, the

PTABOA denied RJK Trust’s appeal. RJK Trust subsequently filed an appeal with the

Indiana Board, electing to have the case heard pursuant to the Indiana Board’s small

claims procedures.

      The Indiana Board held a hearing on December 19, 2012. The Indiana Board

determined that the Assessor bore the burden of proving that RJK Trust’s 2006

assessment was correct. (Cert. Admin. R. at 20 ¶ 14.) See also IND. CODE § 6-1.1-15-

17.2 (2012) (amended 2014).        During the hearing, the Assessor submitted an

independent appraisal report that valued RJK Trust’s property at $800,000 based on the

sales data of three comparable properties. (See Cert. Admin. R. at 144-61.)        The

Appraiser, however, did not testify. (See Cert. Admin. R. at 163-269.) In rebuttal, RJK

Trust presented testimony and other evidence, including among other things, PTABOA

hearing minutes, property record cards, and a portion of the Real Property Assessment

Guidelines in support of its claims. (See, e.g., Cert. Admin. R. at 86-93, 113-21, 129-

39.) On March 11, 2013, the Indiana Board issued its final determination, finding that

the Assessor’s appraisal reflected the subject property’s market value-in-use as of

March 1, 2006. (See Cert. Admin. R. at 23 ¶ 16.)

      On April 23, 2013, RJK Trust initiated this original tax appeal.      The Court

conducted oral argument on December 2, 2013. Additional facts will be supplied when

necessary.

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                                      STANDARD OF REVIEW

       This Court gives great deference to final determinations of the Indiana Board

when it acts within the scope of its authority. Tipton Cnty. Health Care Found., Inc. v.

Tipton Cnty. Assessor, 961 N.E.2d 1048, 1050 (Ind. Tax Ct. 2012). Indeed, the Court

will reverse a final determination of the Indiana Board only if it is:

               (1) arbitrary, capricious, an abuse of discretion, or otherwise
                   not in accordance with law;

               (2) contrary to constitutional right, power, privilege, or
                   immunity;

               (3) in excess of statutory jurisdiction, authority, or limitations,
                   or short of statutory jurisdiction, authority, or limitations;

               (4) without observance of procedure required by law; or

               (5) unsupported by substantial or reliable evidence.

IND. CODE § 33-26-6-6(e)(1)-(5) (2015).

                                         DISCUSSION

       On appeal, RJK Trust contends, among other things, that “the assessor utilized

an appraisal report that was never previously produced[.]”1              (See V. Pet. Judicial

Review Final Determination Indiana Board ¶ 15; Pet’r Br. at 2.) The Indiana Board’s

regulations governing small claims procedures require that

               (d) [i]f requested not later than ten (10) business days prior
               to hearing by any party, the parties shall provide to all other
               parties copies of any documentary evidence . . . to be

1  RJK Trust also argues on appeal that the Assessor’s independent appraisal report did not
provide probative evidence of the subject property’s value because: 1) it was for the wrong
year; 2) it did not comply with the Uniform Standards of Professional Appraisal Practice
(USPAP); 3) it conflicted with the property’s details as delineated on the property record card; 4)
it was an incomplete restricted use appraisal; and 5) it contained several errors and
inconsistencies. (See Pet’r Br. at 4-12.) The Court will not address these claims, however,
given the disposition of the case on other grounds.

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              presented at the hearing at least five (5) business days
              before the small claim hearing.

                                           *****

              (f) Failure to comply with subsection (d) may serve as
              grounds to exclude evidence or testimony that has not been
              timely provided.

52 IND. ADMIN. CODE 3-1-5(d), (f) (2012) (see http://www.in.gov/legislative/iac/)

(emphasis added). Moreover, the Indiana Board’s small claims procedures limit each

party to twenty minutes to present their respective cases. See 52 IND. ADMIN. CODE 3-1-

8(a) (2012) (see http://www.in.gov/legislative/iac/).

       The administrative record in this case reveals that on two separate occasions,

RJK Trust sent written requests to the Assessor seeking copies of documents pertaining

to the appeal of its 2006 assessment. (See Cert. Admin. R. at 140-143.) On June 20,

2011, RJK Trust first sent a written request to the Assessor “[i]n order to be properly

prepared for the IBTR hearing” that asked for, among other things, all

              worksheets, meeting agendas, meeting notes, meeting
              minutes, staff worksheets, consultant’s work papers,
              consultant reports, recommendations made to the County
              Assessor, and all of the County Assessor’s files regarding
              this matter, including the Assessor’s approval of the changes
              in land values and the DLGF’s written approval of the
              Michigan Township’s sales ratio study.

(See Cert. Admin. R. at 140.) On November 26, 2012, RJK Trust made a second

written request seeking the documents requested, but not yet provided to him, as well

as any documents “which have been created and/or discovered since June 24, 2011.”

(See Cert. Admin. R. at 142.) Despite these requests, the Assessor admitted upon

questioning by RJK Trust, that he never provided a copy of the appraisal report to RJK

Trust prior to the hearing. (See Cert. Admin. R. at 180.)

                                             4
       The Indiana Board’s regulations governing small claims cases are designed to

promote the informal and efficient resolution of cases. See 52 IND. ADMIN. CODE 3-1-

1(b) (2012) (see http://www.in.gov/legislative/iac/); 52 I.A.C. 3-1-5(d). As a result, a

party electing small claims treatment opts out of the full menu of discovery options

generally available in favor of more limited discovery. Compare 52 IND. ADMIN. CODE 2-

7-1 (2012) (see http://www.in.gov/legislative/iac/) with 52 I.A.C. 3-1-5(d). Regardless of

this more limited discovery, the Indiana Board’s small claims regulations require, upon

request, pre-hearing disclosure to uphold the fundamental tenet of our judicial system

that neither party be subjected to a trial by ambush. See 52 I.A.C. 3-1-5(d). See also

Brandenburg Indus. Serv. Co. v. Indiana Dep’t of State Revenue, 26 N.E.3d 147, 152

(Ind. Tax Ct. 2015) (explaining that the purpose of pre-trial discovery is to allow the free

exchange of information and to permit each party to prepare without concerns of being

surprised at trial).

       Here, however, a trial by ambush is exactly what happened. RJK Trust never

received a copy of the appraisal report until the day of the hearing. (See Cert. Admin.

R. at 180.)     As a result, RJK Trust had no opportunity to adequately prepare any

rebuttal to the evidence in the appraisal report in advance of the hearing or in the twenty

minutes it had to present its case. Moreover, in its closing remarks, RJK Trust asked

the Indiana Board not to “follow” the appraisal report because, among other things, it did

not receive a copy before the hearing. (See Cert. Admin. R. at 267.) Accordingly, RJK

                                             5
Trust’s failure to object to the admission of the appraisal report2 does not waive its

ability to claim that the Indiana Board erred by not requiring the Assessor to produce

evidence five days before the hearing and then not addressing whether or not it would

exercise its discretion to exclude the evidence. See 52 I.A.C. 3-1-5(d), (f); see also

Coombes v. Washington Twp. Assessor, 901 N.E.2d 1180, 1182 (Ind. Tax Ct. 2009)

(explaining that “[p]rocedural due process requires that a taxpayer be provided with

notice and a meaningful opportunity to be heard before a tax liability is finally fixed”)

(citation omitted).

       The Indiana Board’s final determination failed to analyze or even address

whether it would or would not exclude the Assessor’s appraisal report under 52 I.A.C 3-

1-5(f) because he failed to comply with the mandate in 52 I.A.C. 3-1-4(d). Accordingly,

the Indiana Board abused its discretion by making a determination that is clearly

contrary to the logic and effect of the facts and the law because it is based on evidence

tainted by the evils of unfair surprise.       See Hubler Realty Co. v. Hendricks Cnty.

Assessor, 938 N.E.2d 311, 315 n.5 (Ind. Tax Ct. 2010) (explaining that an abuse of

discretion occurs if the Indiana Board’s decision is clearly against the logic and effect of

the facts and circumstances before it or when it misinterprets the law).

                                        CONCLUSION

        For the reasons stated above, the Court REVERSES the Indiana Board’s final

2  Near the end of the administrative hearing, the Administrative Law Judge asked RJK Trust
whether it objected to the admission of the appraisal report. (See Cert. Admin. R. at 257.) RJK
Trust did not object. (See Cert. Admin. R. at 257.) As a result of RJK Trust failing to object to
the admission of the appraisal report as hearsay, the Indiana Board is permitted to base its
finding, as it has done, solely on this hearsay evidence. See 52 IND. ADMIN. CODE 3-1-5(b)
(2012) (see http://www.in.gov/legislative/iac/).

                                               6
determination and REMANDS to the Indiana Board to hold a new hearing consistent

with this decision.

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