Piepho v. Franklin Cty. Bd. of Revision ( 2014 )


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  • [Cite as Piepho v. Franklin Cty. Bd. of Revision, 2014-Ohio-2908.]
    IN THE COURT OF APPEALS OF OHIO
    TENTH APPELLATE DISTRICT
    Marilyn A. Piepho,                                   :
    Appellant-Appellant,                :
    No. 13AP-818
    v.                                                   :                  (B.T.A. No. 2013-W-343)
    Franklin County Board of Revision et al.,            :               (ACCELERATED CALENDAR)
    Appellees-Appellees.                :
    D E C I S I O N
    Rendered on June 30, 2014
    Marilyn A. Piepho, pro se.
    APPEAL from the Board of Tax Appeals of Ohio
    O'GRADY, J.
    {¶ 1} Appellant-appellant, Marilyn A. Piepho, appeals from a decision and order
    of the Board of Tax Appeals of Ohio ("BTA") determining the taxable value of certain real
    property for the tax years 2010, 2011, and 2012. Because we conclude the BTA's decision
    was not unreasonable or unlawful, we affirm.
    I. FACTUAL AND PROCEDURAL BACKGROUND
    {¶ 2} Appellant owns a condominium in Westerville. For tax year 2010, the
    county auditor determined the true value of appellant's property was $72,500. Appellant
    filed a complaint arguing the value was actually $35,475. Appellee-appellee, the Franklin
    County Board of Revision ("BOR"), conducted a hearing and supplemented appellant's
    evidence with a comparative market analysis. Then, the BOR voted to reduce the true
    value of appellant's property to $58,000 for tax years 2010, 2011, and 2012. Appellant
    filed an appeal with the BTA, and, after a hearing, the BTA found appellant did not
    provide competent and probative evidence to support her opinion of value. The BTA also
    No. 13AP-818                                                                      2
    found insufficient evidence to support the BOR's reduction in value to $58,000 and
    reinstated the value the county auditor originally assessed.
    II. ASSIGNMENTS OF ERROR
    {¶ 3} Appellant appeals and provides the following as her statement of
    assignments of error for our review:
    Statement of Assignments of Error
    Mistakes:
    1) Per The BTA decision: "With nothing more than a list of
    raw sales data…)" * * * This is not accurate since I presented a
    full page detailed sale record of each property as well as a
    spreadsheet delineating the likenesses and differences of the
    units.
    2) Per The BTA decision: "We must be able to discern the
    similarity of such properties to the one under consideration
    and what adjustments, if any, are warranted to account for
    perceived differences." * * * Since there were no market sales
    of 2-bedroom, 2-story, on slab units like mine in 2010, 2011 or
    2012, I supplied the closest comparables (sales) in the
    complex. I disclosed the 50+% more living space in these as
    well as notable capital improvements not present in my unit.
    Even though these bigger and more improved units repeatedly
    sold for much less than my smaller unit's Franklin County
    valuation, this appears to have been ignored by The BTA.
    3) per BTA decision: "… reliability of such sales i.e that they
    are actual arms length transactions …" * * * The information
    indicates that the sales were not to sons, daughters, parents,
    etc., but were listed as sales to market buyers clearly showing
    what people would pay. Basic economic standards hold that
    the true value of an item is what the market will pay no matter
    what "you think it is worth". A value opinion is not true if the
    market does not support it.
    4) Per The BTA decision: "… appellant argued that the county
    auditor unfairly assessed the subject property compared to the
    assessed value of neighboring properties… valuations are not
    sales…" * * * As clearly shown by my spreadsheet, I compared
    assessed property values in 3 condo complexes to
    demonstrate the inconsistency of valuing rental property
    higher than resident occupied property. This was because I
    had been told that rental property was assessed higher than
    non-rental property. This is in essence another income tax,
    but is not applied consistently.
    No. 13AP-818                                                                               3
    Failed to consider evidence:
    [5)] Per The BTA decision: "… how common differences e.g.-
    location, size, quality of, construction of improvements,
    nature of amenities," * * * In a condominium there are many
    more similarities than differences since: - all units are in the
    same location/area/neighborhood - all units are of a few
    identical size choices and floor plans - all units were built by
    the same builder with the same quality of construction, and
    built at the same time - construction of improvements can
    only be within the original building structure - the nature of
    amenities is of course identical for all units in the complex
    (party house, pool, tennis, etc.)
    Due to the vast similarities, comparables in a condominium
    complex are especially valid and should not be discounted.
    [6)] Per The BTA decision: "… net income…" (as related to
    value) * * * The net income approach was not properly
    considered. The record from The BOR to The BTA only
    considered gross income with no interest or inquiry in net
    income. There was also no consideration in the "no income
    times" such as when the unit was empty when this all began.
    This was the document left out in the records sent to the
    Appeals Court from the BTA, which was later stipulated as
    part of the record. The other aspect in the record is the
    inconsistent application of valuation based on income as
    shown by the evidence not only in this complex but also 2
    other nearby condo complexes.
    (Sic passim.)
    III. DISCUSSION
    {¶ 4} An appellate court reviews decisions of the BTA to determine whether they
    are reasonable and lawful. Gesler v. Worthington Income Tax Bd. of Appeals, 138 Ohio
    St.3d 76, 2013-Ohio-4986, ¶ 10; see Columbus City Schools Bd. of Edn. v. Franklin Cty.
    Bd. of Revision, 10th Dist. No. 12AP-682, 2013-Ohio-4504, ¶ 8, citing HIN, L.L.C. v.
    Cuyahoga Cty. Bd. of Revision, 
    124 Ohio St. 3d 481
    , 2010-Ohio-687, ¶ 13. The " 'fair
    market value of property for tax purposes is a question of fact, the determination of which
    is primarily within the province of the taxing authorities' " and an appellate court will not
    disturb a decision of the BTA " 'unless it affirmatively appears from the record that such
    decision is unreasonable or unlawful.' " Hilliard City Schools Bd. of Edn. v. Franklin Cty.
    Bd. of Revision, 
    139 Ohio St. 3d 1
    , 2014-Ohio-853, ¶ 48, quoting EOP-BP Tower, L.L.C. v.
    No. 13AP-818                                                                              4
    Cuyahoga Cty. Bd. of Revision, 
    106 Ohio St. 3d 1
    , 2005-Ohio-3096, ¶ 17, quoting
    Cuyahoga Cty. Bd. of Revision v. Fodor, 
    15 Ohio St. 2d 52
    (1968), syllabus.
    {¶ 5} "The BTA's findings of fact are to be affirmed if supported by reliable and
    probative evidence, and the BTA's determination of the credibility of witnesses and its
    weighing of the evidence are subject to a highly deferential abuse-of-discretion review on
    appeal." Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 129 Ohio
    St.3d 3, 2011-Ohio-2316, ¶ 18, citing Olentangy Local Schools Bd. of Edn. v. Delaware
    Cty. Bd. of Revision, 
    125 Ohio St. 3d 103
    , 2010-Ohio-1040, ¶ 15, and Satullo v. Wilkins, 
    111 Ohio St. 3d 399
    , 2006-Ohio-5856, ¶ 14; Wingates L.L.C. v. South-Western City Schools
    Bd. of Edn., 10th Dist. No. 10AP-846, 2011-Ohio-2372. However, we will reverse a BTA
    decision if the decision is based on an incorrect legal conclusion. The Chapel v. Testa, 
    129 Ohio St. 3d 21
    , 2011-Ohio-545, ¶ 9; see also Satullo at ¶ 14, and Gahanna-Jefferson Local
    School Dist. Bd. of Edn. v. Zaino, 
    93 Ohio St. 3d 231
    , 232 (2001).
    {¶ 6} When a taxpayer challenges the auditor's valuation of property before the
    BOR, the taxpayer has the burden to prove entitlement to a reduction in value. See
    CABOT III-OH1M02, L.L.C. v. Franklin Cty. Bd. of Revision, 10th Dist. No. 13AP-232,
    2013-Ohio-5301, ¶ 27, citing Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty.
    Bd. of Revision, 
    113 Ohio St. 3d 281
    , 2007-Ohio-1948, ¶ 15. In an appeal to the BTA, the
    party challenging the BOR's decision has the burden of proof to establish the party's
    proposed value as the value of the property. Sapina v. Cuyahoga Cty. Bd. of Revision,
    
    136 Ohio St. 3d 188
    , 2013-Ohio-3028, ¶ 26, see also Colonial Village Ltd. v. Washington
    Cty. Bd. of Revision, 
    123 Ohio St. 3d 268
    , 2009-Ohio-4975, ¶ 23. "To prevail on appeal,
    the appellant must present competent and probative evidence supporting the value the
    appellant asserts." CABOT III-OH1M02 at ¶ 26, citing Bd. of Edn. of the Dublin City
    Schools v. Franklin Cty. Bd. of Revision, ___ Ohio St.3d ___, 2013-Ohio-4543, ¶ 14.
    {¶ 7} Here, appellant's statement of assignments of error is more akin to a list of
    arguments. Appellant does not contend or cite any legal authority for the position that the
    BTA's decision was unlawful. Instead, she suggests the BTA's decision was unreasonable
    for reasons we elaborate on below.
    {¶ 8} In its decision, the BTA noted appellant mainly relied on sales data from
    other units in her condo development to support her opinion of value. Appellant argued,
    in 2010 four other condos in her development sold for an average of $53,750. The four
    No. 13AP-818                                                                             5
    sold condos had 2 bedrooms, 1.5 to 2 bathrooms, and finished basements. In contrast,
    appellant's condo had 2 bedrooms, 1.5 bathrooms, and no basement. Appellant argued
    the value of her condo should be 66 percent of the average sales price of the four sold
    condos, i.e., $35,475. Appellant believed this value increased slightly after the BOR
    hearing based on the sales of two additional condos in her development in 2012. These
    two condos had 2 bedrooms, 1.5 bathrooms, unfinished basements, and an average sales
    price of $49,950. Appellant made a "rough educated guess" that her condo's value should
    be 85 percent of $49,950, or $42,457, to account for the unfinished basement space the
    two sold condos had which her condo did not. (Tr. 11.) Appellant submitted a one-page
    sheet of information for each of the six sold condos.
    {¶ 9} The BTA acknowledged appraisers commonly rely on comparable sales data
    to develop an opinion of value for residential properties. However, the BTA had to be
    satisfied the sales resulted from arm's-length transactions and needed to be able to
    discern the similarity of the sold properties to appellant's property and what adjustments,
    if any, were warranted to account for perceived differences. The BTA stated: " 'With
    nothing more than a list of raw sales data, a trier of fact is left to speculate as to how
    common differences, e.g., location, size, quality of construction of improvements, nature
    of amenities, date of sale as opposed to tax lien date, etc., may affect a value
    determination.' Speca v. Montgomery Cty. Bd. of Revision (Mar. 25, 2008), BTA
    No. 2006-K-2144, unreported." (Footnote deleted.) (Decision and Order, 2-3.)
    {¶ 10} Appellant contends she proved the sales of the other condos in her
    development resulted from arm's-length transactions. However, it appears the BTA only
    discussed arm's-length transactions as part of a general discussion on information it
    needed about sales to effectively use them for valuation purposes. The BTA did not
    specifically state it was unsatisfied the sales at issue were arm's-length transactions.
    Rather, the BTA's decision implies it did not find appellant's comparable sales evidence
    helpful because appellant did not provide enough information for the BTA to compare
    appellant's condo to the sold condos. Additionally, the BTA was unpersuaded by
    appellant's calculations of using an average price per square foot based on the sale of
    prices of dissimilar neighboring condominiums.
    {¶ 11} Next, appellant contends she presented competent, probative evidence from
    which the BTA could compare the sold condos to her condo and that she used a common
    No. 13AP-818                                                                               6
    sense, widely-accepted approach to valuation. Appellant argues she submitted
    information on the sold condos most comparable to her own. Specifically, she provided a
    one-page sheet of information for each sold condo along with a spreadsheet comparing
    those condos to her condo. Appellant argues the BTA ignored the fact that bigger, more
    improved condos, e.g., condos with full, finished basements, repeatedly sold for much less
    than her smaller condo.
    {¶ 12} Appellant did provide the BTA with some information comparing the sold
    condos to her own, e.g., the number of bedrooms and bathrooms and existence of full,
    finished basements. However, as the BTA's decision suggests, it is logical that factors
    beyond square footage and number of rooms, such as the location of the condos within
    the development, might have a meaningful impact on value. Therefore, we cannot say the
    BTA acted unreasonably in finding appellant's evidence insufficient to support her
    opinion of value. See, e.g., Kaiser v. Franklin Cty. Auditor, 10th Dist. No. 10AP-909,
    2012-Ohio-820, ¶ 18-19 (finding BOR and common pleas court did not have to rely on
    taxpayer's proposed comparable sales which did not account for meaningful differences
    between properties).
    {¶ 13} Next, appellant suggests the comparable sales data she provided is
    particularly probative because condos within a particular development generally share a
    number of characteristics. Specifically, she argues the following: (1) all units in a condo
    development are in the same location or neighborhood, (2) condo developments only
    offer a few options in terms of unit size and floor plan, (3) all units are built by the same
    builder, at the same time, and with the same quality of construction, (4) any
    improvements to an individual unit must be made within the original building structure,
    and (5) all units have the same amenities, e.g., access to a pool and tennis courts.
    {¶ 14} Although condos within a development may share a number of
    characteristics, the BTA had no obligation to assume other factors (e.g., the location of
    condos within a development) have no impact on value.
    {¶ 15} In its decision, the BTA also rejected appellant's contention that the county
    auditor unfairly assessed her property as evidenced by the assessed values of neighboring
    properties.   Appellant claims someone at the county auditor's office told her rental
    properties, like her condo, were valued higher than non-rental properties. Appellant
    contends this practice is not applied consistently as evidenced by a spreadsheet she
    No. 13AP-818                                                                               7
    prepared which compares the valuations of rental units to non-rental units in three condo
    developments, including her own. Appellant complains valuing rental property higher
    than non-rental property amounts to an income tax.
    {¶ 16} The record contains no evidence as to how the county auditor actually
    determined the value of appellant's property or the value of the properties on appellant's
    spreadsheet. See Colonial Village Ltd. at ¶ 23, citing Dayton-Montgomery Cty. Port Auth.
    at ¶ 15 ("[T]he board of revision (or auditor) bears no burden to offer proof of the accuracy
    of the appraisal on which the county initially relies, with the result that the BTA is
    justified in retaining the county's valuation of the property when an appellant fails to
    sustain its burden of proof at the BTA."). Additionally, as the BTA pointed out, the fact
    that two parcels have different values, without more, does not prove the tax authorities
    valued the properties in a different manner. WJJK Investments, Inc. v. Licking Cty. Bd. of
    Revision, 
    76 Ohio St. 3d 29
    , 31 (1996). Thus, the BTA correctly rejected appellant's
    argument that the county auditor unfairly assessed her property based on her evidence
    regarding valuation of neighboring properties.
    {¶ 17} Next, appellant contends the BTA failed to properly consider the "net
    income approach" to valuation. In its decision, the BTA mentioned methods of real
    property valuation listed in Ohio Adm.Code 5703-25-07. Under the income approach,
    "value is estimated by capitalizing the net income after expenses, including normal
    vacancies and credit losses." Ohio Adm.Code 5703-25-07(D)(2). Appellant complains the
    BTA considered her gross income but not her net income or times when the unit was
    empty. In addition, she again points to her spreadsheet on inconsistent valuation of rental
    versus non-rental properties in condo developments.
    {¶ 18} However, the BTA never made any findings about the net income approach,
    presumably for the following reasons. Appellant did not advocate for a specific valuation
    of her property under the net income approach. Additionally, given the lack of evidence as
    to what method the county auditor used to determine the value of appellant's property,
    any evidence of appellant's income and expenses as a landlord would not discredit the
    county auditor's valuation. Therefore, we reject appellant's contention that the BTA failed
    to properly consider the net income approach.
    {¶ 19} The BTA's decision to reject appellant's evidence in this case was not
    unreasonable or unlawful. Therefore, we find no error in the BTA's conclusion that
    No. 13AP-818                                                                             8
    appellant failed to prove the county auditor's determination of value did not accurately
    reflect true value.
    {¶ 20} Appellant does not specifically challenge the BTA's decision to reject the
    BOR's revised valuation of $58,000. Regardless, we find no error in this decision. The
    BTA rejected the BOR's decision because it was based on "unadjusted comparable sales
    data" that failed to account for differences between appellant's property and the claimed
    comparable properties. (Decision and Order, 4.) The sales data the BTA refers to appears
    to be the BOR's comparative market analysis, which contains information about sales of
    condos in appellant's development. Although the evidence the BOR relied on could have
    rationally supported its reduction in the value of appellant's condominium, we must
    remain mindful that our standard of review for the BTA's determination of the credibility
    of witnesses and its weighing of the evidence is an abuse of discretion. Like the evidence
    appellant provided, the BOR's market analysis does not contain information like the
    location of the condos within a development. Thus, the BTA did not have to rely on the
    market analysis for the same reasons it did not have to rely on appellant's comparable
    sales evidence.
    {¶ 21} In the absence of probative evidence supporting the reduction in value
    ordered by the BOR, the BTA's decision to reinstate the county auditor's original valuation
    was not unreasonable. Vandalia-Butler City School Dist. Bd. of Edn. v. Montgomery Cty.
    Bd. of Revision, 
    106 Ohio St. 3d 1
    57, 2005-Ohio-4385, ¶ 12.
    IV. CONCLUSION
    {¶ 22} Accordingly, we overrule the assignments of error and affirm the decision of
    the Board of Tax Appeals of Ohio.
    Judgment affirmed.
    BROWN and DORRIAN, JJ., concur.