[Cite as Brecksville-Broadview Hts. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 2016-Ohio-3166.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 103015
BRECKSVILLE-BROADVIEW HEIGHTS BOARD OF EDUCATION, ET AL. APPELLEES
vs.
CUYAHOGA COUNTY BOARD OF REVISION, ET AL.
APPELLEES
[Appeal By: TMMC OHIO, L.L.C.]
JUDGMENT: AFFIRMED
Administrative Appeal from the Ohio Board of Tax Appeals Case No. 2014–986
BEFORE: E.A. Gallagher, J., Keough, P.J. and McCormack, J. RELEASED AND JOURNALIZED: May 26, 2016 ATTORNEYS FOR APPELLANT
William J. Day Joseph A. Balbier 9100 South Hills Blvd., Suite 325 Broadview Heights, Ohio 44147
ATTORNEY FOR APPELLEE BRECKSVILLE-BROADVIEW HEIGHTS BOARD OF EDUCATION
William E. Blackie III Fisher & Phillips LLP 9150 South Hills Blvd., Suite 300 Broadview Heights, Ohio 44147
ATTORNEYS FOR APPELLEE CUYAHOGA COUNTY BOARD OF REVISION
Timothy J. McGinty Cuyahoga County Prosecutor BY: Reno J. Oradini Assistant Prosecuting Attorney The Justice Center, 8th Floor 1200 Ontario Street Cleveland, Ohio 44113
ATTORNEY FOR APPELLEE OHIO TAX COMMISSIONER
Mike DeWine Ohio Attorney General 30 East Broad Street Columbus, Ohio 43215 EILEEN A. GALLAGHER, J.:
{¶1} Appellant TMMC Ohio, L.L.C. (“TMMC”) appeals from a decision of the
Board of Tax Appeals reversing the Cuyahoga County Board of Revision’s (“BOR”)
valuation, for tax purposes, of a parcel of vacant commercial property owned by TMMC
and reinstating the higher valuation of the property assessed by the Cuyahoga County
Fiscal Officer (the “Fiscal Officer”). For the reasons that follow, we affirm the decision
of the Ohio Board of Tax Appeals (“BTA”).
Factual and Procedural Background
{¶2} In February 2013, TMMC filed a complaint against the valuation of a 4.65
acre parcel of vacant commercial land located at 6250 Broadview Road, Broadview
Heights, in Cuyahoga County (the “subject property”), seeking a reduction in the valuation
of the property for tax year 2012. The Fiscal Officer had assigned a total value of
$729,200 to the subject property. TMMC had been the highest bidder for the property at
a public, absolute auction1 held in March 2012 and sought a reduction in the property’s
total true value for tax purposes to $368,500, the price it paid for the property in May
2012. Appellee, the Brecksville-Broadview Heights Board of Education (“Board of
Education”), filed a counter-complaint seeking to maintain the Fiscal Officer’s valuation
1 An absolute auction is an auction where the sale is awarded to the highest bidder; there is no reserve that sets a minimum required bid for the item to be sold. of the property, asserting that “[r]ecent record sales, economic evidence and other
evidence that will be presented at hearing” supported the Fiscal Officer’s valuation.
{¶3} In February 2014, the BOR held a hearing on the complaint and
counter-complaint. At the hearing, Anthony Ciocca, one of the members of TMMC, 2
testified regarding TMMC’s purchase of the subject property. He testified that he learned
the property was to be sold at auction when he saw a sign posted on the property,
approximately six months prior to the March 2012 auction date. The sign, a copy of
which was introduced at the hearing, indicated that the property was being “OFFERED
ABSOLUTE, REGARDLESS OF PRICE!” Ciocca stated that the sign referenced a
website, which provided additional information regarding the sale. Ciocca testified that
the auction was held at the Holiday Inn on Rockside Road in Independence, Ohio, that the
subject property was one of several properties for sale at the auction; and that there was “a
room full of people” bidding on the subject property. He indicated that TMMC’s winning
bid for the property was $335,000 and that there was a 10% fee assessed, resulting in a
total purchase price of $368,500.
{¶4} In support of TMMC’s request for a reduction in the valuation of the subject
property, Ciocca submitted copies of the following documents related to TMMC’s
purchase of the property: a “purchaser’s statement” referencing the $368,500 purchase
price executed by Guardian Title & Guaranty Agency, Inc. (“Guardian Title”) and TMMC,
a statement of conditions of acceptance of escrow executed by Guardian Title (but not
Ciocca indicated that the other members of TMMC were his brothers, Matt and Mike Ciocca. 2 TMMC or the seller, Landspan Corp. (“Landspan”)), a limited warranty deed for the
property from Landspan to TMMC and a letter from Guardian Title to TMMC dated June
18, 2012, referencing the limited warranty deed and a title insurance policy.3 TMMC also
submitted several lists comparing the tax valuations of what Ciocca claimed were similar
neighboring properties, including several properties that had been sold at auction in 2011.
The BOR rejected Ciocca’s property comparisons, indicating, at the hearing, that the
neighboring properties’ tax values and the sales of other properties at auction did not
constitute probative evidence of the tax value of the subject property.
{¶5} With respect to what TMMC planned to do with the subject property, Ciocca
claimed that TMMC “had some plans to build something on [the property],” but was
concerned that, based on the current tax valuation of the property, if it developed the
property, the taxes on the property would increase to such a level that “you’re not going to
be competitive.” He stated that “we have some opportunity here” but “we need to soften
things up for me in order to make it.” He further explained, “right now I feel if we could
have the taxes where we purchased it, we could take the handcuffs off, * * * get it where it
needs to be * * * more competitive” and “make something there successful.”
{¶6} In response to questions by the BOR and cross-examination by the Board of
Education, Ciocca stated that he knew very little about the subject property or the
3 At the conclusion of the hearing, the BOR requested that TMMC submit copies of the purchase agreement and closing statement for the purchase of the property to the BOR. Although TMMC later claimed that the “purchaser’s statement” was the closing statement, there is nothing in the record that indicates that any purchase agreement was submitted. circumstances surrounding the offer of sale of the property. He testified that he had no
relationship with Landspan, the prior owner of the property, nor with the auctioneer of the
property. Ciocca indicated that he did not know why the property was being sold at
auction and that, other than to walk the property and to confirm no back taxes were owed
on the property, he did not know “anything about the property” and did no research on the
property prior to bidding on it at auction. Ciocca speculated that the prior owners, who he
claimed had owned the property since 1974, had “had their taxes quite significantly
increased [in 2007] because of the boom in the economy which * * * we know is no longer
there” and that “they didn’t want to hold the property any longer” due to the increased tax
burden. Ciocca stated that “[w]e liked the property for what it looked like,” that ‘[i]t
looked like a beautiful piece of land” and that that was TMMC’s “only concern” in
bidding on the property.
{¶7} The Board of Education did not present any evidence at the hearing. It simply
cross-examined Ciocca regarding his lack of knowledge of the circumstances that led to
the sale of the property at an absolute auction.
{¶8} In February 2014, the BOR granted TMMC’s request for a reduction in
valuation, reducing the total true value of the property to $368,500. In its oral hearing
worksheet and journal entry, the BOR indicated: “Complaintant [sic] provided testimony
and evidence that indicates 2012 sales was arms [sic] length.” Accordingly, the BOR
“revised [the] market value to [the] sales price” of the subject property. {¶9} The Board of Education filed an appeal with the BTA, arguing that the
purchase price of the property at auction did not provide a legal basis for reducing the
Fiscal Officer’s valuation of the property. The parties waived a hearing and agreed that
the appeal would be decided based on the statutory transcript and the parties’ briefs.
{¶10} On April 13, 2014, the BTA issued its decision, reversing the BOR and
reinstating the Fiscal Officer’s original valuation. The BTA concluded that there was
“insufficient evidence” to demonstrate that the May 2012 auction sale was an arm’s-length
transaction and that the BOR’s reliance on the auction sale price as the basis for its
determination of the true value of the subject property for tax year 2012 was, therefore,
“improper.” The BTA further held that “in the absence of a qualifying sale, [TMMC] was
required, but failed, to provide a competent appraisal of the subject property, attested to by
a qualified expert, for the tax lien date in issue” and that “the remaining evidence in the
record * * * is not competent or probative of the subject [property]’s value.” TMMC
appealed the decision of the BTA, raising the following assignment of error for review:
The Board of Tax Appeals (“BTA”) erred by setting the subject property’s true value at $729,200, and its taxable value at $255,220 (BTA Decision and Order, 20140986) in spite of the Cuyahoga County Board of Revision (“BOR”) Decision relying upon competent evidence in reaching its decision.
Law and Analysis
{¶11} TMMC argues that the BTA erred in concluding that the May 2012 auction
sale of the subject property was not an arm’s-length transaction. It asserts that the auction
sale price was “credible, competent and probative evidence” of the value of the subject property and that the BTA should have “accepted” that evidence of the property’s value
“over the [Fiscal Officer’s] valuation of the property.” We disagree.
{¶12} This court reviews a decision of the BTA to determine only whether it is
“reasonable and lawful.” R.C. 5717.04; Bd. of Edn. of the Warrensville Hts. City School
Dist. v. Cuyahoga Cty. Bd. of Revision, 145 Ohio St.3d 115, 2016-Ohio-78, 47 N.E.3d
144, ¶ 16; Gides v. Cuyahoga Cty. Bd. of Revision, 8th Dist. Cuyahoga No. 102649,
2015-Ohio-4385, ¶ 5. In conducting such a review, we defer to the factual findings of the
BTA so long as they are supported by “reliable and probative evidence in the record.” Bd.
of Edn. of the Warrensville Hts. City School Dist. at ¶ 16, citing Satullo v. Wilkins, 111
Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14; Weiler v. Cuyahoga Cty. Bd. of
Revision, 8th Dist. Cuyahoga No. 101822, 2015-Ohio-1383, ¶ 8. Any legal
determinations by the BTA are, however, subject to a de novo review. Olentangy Local
Schools Bd. of Edn. v. Del. Cty. Bd. of Revision, 141 Ohio St.3d 243, 2014-Ohio-4723, 23
N.E.3d 1086, ¶ 21, citing Crown Communication, Inc. v. Testa, 136 Ohio St.3d 209,
2013-Ohio-3126, 992 N.E.2d 1135, ¶ 16; see also Bd. of Edn. of the Warrensville Hts. City
School Dist. at ¶ 16. “The party seeking the change in value bears the burden of
demonstrating a valuation different from the currently assessed value.” Weiler at ¶ 8,
citing Bd. of Edn. of the Columbus City School Dist. v. Franklin Cty. Bd. of Revision, 90
Ohio St.3d 564, 566, 740 N.E.2d 276 (1991).
{¶13} Decisions of boards of revision are “‘not * * * accorded a presumption of
validity.’” Vandalia-Butler City School Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 130 Ohio St.3d 291, 2011-Ohio-5078, 958 N.E.2d 131, ¶ 13, quoting Colonial Village,
Ltd. v. Washington Cty. Bd. of Revision, 114 Ohio St.3d 493, 2007-Ohio-4641, 873 N.E.2d
298, ¶ 23; see also Bd. of Edn. of the Vandalia-Butler City School Dist. v. Montgomery
Cty. Bd. of Revision, 106 Ohio St.3d 157, 2005-Ohio-4385, 833 N.E.2d 271, ¶ 10 (“‘[A]
determination of the true value of real property by a board of revision * * * is not
presumptively valid.’”), quoting Amsdell v. Cuyahoga Cty. Bd. of Revision, 69 Ohio St.3d
572, 574, 635 N.E.2d 11 (1994). Where, as here, the statutory transcript is the only
evidence before the BTA, the BTA must “make its own independent judgment based on its
weighing of the evidence contained in the transcript.” Columbus Bd. of Edn. v. Franklin
Cty. Bd. of Revision, 76 Ohio St.3d 13, 15, 665 N.E.2d 1098 (1996). Thus, the issue
before this court is whether the BTA acted reasonably and lawfully when it concluded that
there was insufficient evidence that the May 2012 auction sale was an arm’s-length
transaction and, on that basis, (1) reversed the BOR’s decision adopting the May 2012
auction sale price as the property’s value and (2) reinstated the Fiscal Officer’s original
valuation of the property.
{¶14} The “best evidence of true value” of real property is generally considered to
be the actual sale price of the property in a recent arm’s-length transaction, i.e.,“the price
arrived at by a willing purchaser and willing seller.” Meyer v. Cuyahoga Cty. Bd. of
Revision, 58 Ohio St.2d 328, 333, 390 N.E.2d 796 (1979); Gides v. Cuyahoga Cty. Bd. of
Revision, 8th Dist. Cuyahoga No. 100830, 2014-Ohio-4086, ¶ 13. As applied to the tax year at issue, former R.C. 5713.03,4 which sets forth how real property is to be valued for
tax purposes, stated, in relevant part:
In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot, or parcel has been the subject 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 auditor shall consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes. * * *
Am.Sub.H.B. No. 260, 140 Ohio Laws, Part II, 2665, 2772.
{¶15} R.C. 5713.04, however, expressly provides that “[t]he price for which * * *
real property would sell at auction or forced sale shall not be taken as the criterion of its
value.” The Ohio Supreme Court has interpreted R.C. 5713.04 as “establish[ing] a
presumption that a sale price from an auction is not evidence of a property’s value.”
Olentangy, 141 Ohio St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086, at ¶ 40. However, the
presumption “may be rebutted by evidence showing that the [auction] sale occurred at
arm’s length between typically motivated parties.” Id. at ¶ 2, 40 (R.C. 5713.04 “requires
the taxing authorities to presume that an auction sale price is not a voluntary, arm’s-length
transaction” but “[t]hat presumption may be rebutted * * * by evidence that a particular
See Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188, 2013-Ohio-3028, 992 4
N.E.2d 1117, ¶ 20, fn. 1 (courts must “apply the substantive tax law that was in effect during the tax year at issue”); see also Olentangy Local Schools Bd. of Edn. v. Del. Cty. Bd. of Revision, 2015-Ohio-2070, 34 N.E.3d 150, ¶ 28-39 (5th Dist.) (concluding that the H.B. 260 version of R.C. 5713.03 applied to property valuation for tax year 2012). R.C. 5713.03 was amended and now provides, in relevant part: “In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot, or parcel has been the subject 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 [fiscal officer] may consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes.” (Emphasis added.) sale was in fact voluntary and did occur at arm’s length.”); see also Schwartz v. Cuyahoga
Cty. Bd. of Revision, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223, ¶ 27. R.C.
5713.04 applies regardless of whether the auction is a “voluntary auction” or an
“involuntary auction,” i.e., a “forced sale.” Olentangy at ¶ 27, 29-30. “[I]n spite of R.C.
5713.04’s proscription,” when all the elements of an arm’s-length transaction are present,
“‘the sale prices of parcels sold at auction are nevertheless the best evidence of [their]
value.’” Id. at ¶ 39, quoting Concept Invest. Group L.L.C. v. Franklin Cty. Bd. of
Revision, BTA No. 2005-T-1267, 2006 Ohio Tax LEXIS 1482, *3 (Nov. 17, 2006).
{¶16} The party opposing the use of an auction sale price as evidence of a
property’s value “has a very light burden to establish that a transaction was on its face an
auction or a forced sale.” Olentangy at ¶ 43. “Once that threshold is crossed,” then the
proponent of the auction sale price as evidence of the property’s value “bears the burden to
prove that the sale was nevertheless an arm’s-length transaction between typically
motivated parties.” Id. In this case, it was undisputed that the subject property was sold
at an absolute auction. Thus, the Board of Education met its burden of establishing that
the May 2012 sale was an auction sale. Accordingly, a presumption arose that the May
2012 auction sale price was not evidence of the value of the subject property. The burden
then shifted to TMMC to prove that the May 2012 auction sale was an “arm’s-length
transaction between typically motivated parties.” Id.
{¶17} An arm’s-length transaction is one that “‘encompasses bidding and
negotiation in the open market between a ready, willing and able buyer, and a ready, willing and able seller, both being mentally competent, and neither acting under
coercion.’” NDHMD, Inc. v. Cuyahoga Cty. Bd. of Revision, 8th Dist. Cuyahoga Nos.
101207 and 101300, 2015-Ohio-174, ¶ 24, quoting Walters v. Knox Cty. Bd. of Revision,
47 Ohio St.3d 23, 25, 546 N.E.2d 932 (1989). “A ‘typically motivated’ transaction is one
in which the buyer and seller are ‘pursuing their own financial interests.’” NDHMD at ¶
25, quoting Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio
St.3d 1, 2014-Ohio-853, 9 N.E.3d 920, ¶ 31, citing AEI Net Lease Income & Growth Fund
v. Erie Cty. Bd. of Revision, 119 Ohio St.3d 563, 2008-Ohio-5203, 895 N.E.2d 830, ¶ 25.
{¶18} In determining whether a transaction occurred at arm’s length, the Ohio
Supreme Court has identified three “relevant” factors: (1) “whether the sale was
‘voluntary; i.e., without compulsion or duress,’” (2) “whether the sale ‘[took] place in an
open market,’” and (3) “whether the buyer and seller ‘act[ed] in their own self interest.’”
Olentangy at ¶ 47, quoting Walters at 25.
{¶19} TMMC argues that the auction sale of the subject property was an
arms-length transaction because (1) the property was generally advertised on the open
market by means of a large sign that had been prominently placed on the property that
was located near a busy intersection for more than six months; (2) the property was sold at
a public auction along with several other properties; (3) “a room full of people” bid on
the subject property; (4) there was no prior relationship between TMMC and the seller or
auctioneer; and (5) there were no back taxes owed on the property. {¶20} TMMC claims that the facts in this case are “nearly identical” to those in
Olentangy — in which the Ohio Supreme Court upheld the BTA’s finding that a public
auction sale was voluntary and occurred at arm’s length — and that this court should,
therefore, “uphold the BOR’s decision, just as the Court in Olentangy upheld the BTA’s
decision in favor of the taxpayer.” In Olentangy, the taxpayer filed a complaint with the
Delaware County BOR, seeking a reduction in the valuation of a parcel of real property
that the Delaware County auditor had valued at $826,100 for tax year 2009 to the
property’s December 2008 auction sale price, $414,750. Olentangy, 141 Ohio St.3d 243,
2014-Ohio-4723, 23 N.E.3d 1086, at ¶ 6, 8-9. A division or affiliate of Countrywide
Homes Loans (“Countrywide”) had acquired the subject property, which included a
single-family home, for $450,000 at a sheriff’s sale pursuant to foreclosure in October
2007. Id. at ¶ 5. Several months later, Countrywide listed the property on the multiple
listing service for a price of $479,000 and later reduced the price to $448,900. Id. When
the property did not sell, Countrywide arranged for an auction of the property. Id. at ¶
5-6. Abraham was the highest bidder and purchased the property at auction for $414,750.
Id. at ¶ 6. After closing, he transferred the property to TaDa, a real estate holding
company owned by Abraham and his wife. Id. at ¶ 7. At the hearing before the BOR,
Abraham, who had no prior relationship with Countrywide or the auctioneer, testified that
he had learned about the auction through advertisements on the internet and in newspapers
several weeks before the auction date. Id. at ¶ 11. He testified that 75 to 85 people
attended the auction in person and another 50 people participated online and that several people bid on the property before he offered his last and highest bid of $414,750. Id. at ¶
12. Countrywide, which had retained the right to reject the highest bid, accepted
Abraham’s bid and the closing occurred in December 2008. Id. at ¶ 12. After the
hearing TaDa submitted a copy of the property’s original MLS listing, the settlement
contract between Abraham and Countrywide that confirmed Countrywide’s authority to
reject Abraham’s bid and a real estate purchase addendum, which stated that Countrywide
had acquired the property through foreclosure. Id. at ¶ 14. The Board of Education
cross-examined Abraham but did not present its own witnesses at the hearing. Id. at ¶ 13.
{¶21} The BOR issued a decision reducing the 2009 tax year valuation to $414,750.
Id. at ¶ 15. The Board of Education appealed, and the BTA affirmed, concluding, based
on the record before it, that all elements of an arm’s-length transaction were present for the
2008 sale and that the sale price at auction was, therefore, the “best evidence of [the]
property’s value.” Id. at ¶ 19. The Ohio Supreme Court affirmed the decision of the
BTA, reasoning as follows:
On this record, the BTA could reasonably have concluded that Countrywide acted under duress and was not a typically motivated seller. But the record also contains sufficient evidence to support the BTA’s contrary conclusion. As a result, we must defer to the BTA’s finding that this particular auction sale was voluntary and occurred at arm’s length. See Satullo, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, at ¶ 14.
Olentangy at ¶ 52. Thus, in Olentangy, the court determined — based on the evidence
presented in that case — that the BTA could have reasonably concluded that the taxpayer
had proven that that the 2008 auction sale was an arm’s-length transaction, thereby
rebutting the presumption that the auction sale price was not evidence of a property’s value, and or that the taxpayer had failed to rebut the presumption, i.e., that the auction
sale was not an arm’s-length transaction. Because the BTA determined that the sale was
an arm’s-length transaction, and its decision on this factual issue was entitled to deference
by the court, the court affirmed the BTA’s’ decision.
{¶22} Ciocca’s testimony demonstrates (1) that the auction sale in this case had
certain “open-market elements,” e.g., the auction was public, several people bid on the
subject property and TMMC had no ties to the seller or auctioneer, see Olentangy, 141
Ohio St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086, at ¶ 51, citing N. Royalton School Dist.
Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 129 Ohio St.3d 172, 2011-Ohio-3092, 950
N.E.2d 955, ¶ 30, (2) that the sale was voluntary as to TMMC and (3) that TMMC acted in
its own self interest in purchasing the property. However, in this case — unlike in
Olentangy — there is very limited information in the record regarding the seller, the
circumstances that led to the sale of the subject property or the seller’s motivation in
selling the subject property. Ciocca testified that he knew nothing about the seller. The
only evidence in the record regarding the seller or the circumstances under which the seller
sold the subject property is: (1) the identity of the seller; (2) Ciocca’s testimony that the
seller had owned the property since 1974 and that no back taxes were owed on the
property at the time of the sale; and (3) that the property was offered for sale at auction
“ABSOLUTE, REGARDLESS OF PRICE,” i.e., with no minimum bid. Although Ciocca
claimed the parties entered into a purchase agreement, the purchase agreement is not part
of the record. There is no information as to why the seller sold the property at an absolute auction or whether the sale was “voluntary” or under “compulsion or duress” from the
seller’s perspective.
{¶23} R.C. 5713.04 “‘codifies the basic proposition that a sale must be voluntary
from the standpoint of both seller and buyer in order to qualify as an arm’s-length
transaction.’” (Emphasis added.) Bd. of Edn. of the Warrensville Hts. City School Dist.,
145 Ohio St.3d 115, 2016-Ohio-78, 47 N.E.3d 144, at ¶ 18, quoting Cincinnati School
Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 127 Ohio St.3d 63, 2010-Ohio-4907,
936 N.E.2d 489, ¶ 19. Where, as here, a property is sold at “absolute auction,” such that
the seller is required to sell to the highest bidder, without a minimum bid, and where there
is no indication that the seller had a right to refuse to sell or accept a bid, it does not appear
that the seller is “typically motivated” such that it can be said that sale was an arm’s-length
transaction — at least in the absence of other evidence or information demonstrating the
seller’s motivation for such a sale. See, e.g., Camaglia v. Cuyahoga Cty. Bd. of Revision,
BTA No. 2015-90, 2015 Ohio Tax LEXIS 4092, *3 (Nov. 17, 2015). Accordingly, on
this record, we find that that the BTA acted reasonably and lawfully in concluding that
TMMC presented insufficient evidence to rebut the presumption that the May 2012
auction sale was not an arm’s-length transaction and that the auction sale price, therefore,
could not be properly considered as evidence of the property’s value under R.C. 5713.04.
{¶24} TMMC argues that the “Bedford rule” controls the result in this case and that
under the Bedford rule, once TMMC “presented testimony [from Ciocca] on what TMMC
paid for the property and his opinion of the property’s value,” that value “should have been accepted over the [Fiscal Officer’s] valuation of the property.” TMMC also argues that
because it “presented evidence on the value of the property” “negating the auditor’s
valuation” and the Board of Education did not offer any evidence of the property’s actual
value, the BTA was required to perform an “independent valuation” of the taxable value of
the property and could not simply adopt the Fiscal Officer’s original valuation of the
property. Once again, we disagree.
{¶25} As the Ohio Supreme Court explained in Columbus City Schools Bd. of Edn.
v. Franklin Cty. Bd. of Revision, 144 Ohio St.3d 324, 2015-Ohio-3633, 43 N.E.3d 387,
the Bedford rule * * * states that the BTA may not, at the request of a board of education, reinstate the auditor’s valuation when a BOR rejected that valuation based on competent evidence. Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248, 2014-Ohio-3620, 17 N.E.3d 537, ¶ 38-41, citing Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115 Ohio St.3d 449, 2007-Ohio-5237, 875 N.E.2d 913. The BTA can override the Bedford rule and reinstate the auditor’s valuation when the BOR’s decision to reject the auditor’s valuation is completely unsupported in the record, see Worthington City Schools at ¶ 38, citing Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564, 567, 740 N.E.2d 276 (2001), or when the party challenging the BOR’s action presents evidence that the auditor’s valuation is more accurate than the BOR’s.
Columbus City Schools Bd. of Edn. at ¶ 44.
{¶26} Thus, the “Bedford rule” applies only where a party presents competent
evidence of a valuation different than the value assessed by the Fiscal Officer that the
BOR relies upon in establishing a new property valuation. See, e.g., Worthington City
Schools Bd. of Edn. at ¶ 32, 35, 38 (“[I]f a board of revision makes a valuation change that
is completely unsupported in the record, the BTA may not affirm or adopt it. * * * [T]he Bedford rule addresses circumstances in which the board of revision relies on specific and
plausible evidence to reach a valuation different from that originally found by the
auditor.”). TMMC presented no such evidence in this case.
{¶27} As set forth above, with respect to the evidence TMMC presented regarding
the auction sale price, the BTA concluded, following its independent review of the
statutory transcript, that TMMC had failed to prove that the May 2012 auction sale was an
arm’s-length transaction by typically motivated parties and thus had failed to rebut the
presumption under R.C. 5713.04 that the May 2012 auction sale price was not evidence of
the property’s value. As such, the May 2012 auction sale was not competent evidence of
the property’s value under R.C. 5713.04 and could not be relied upon in determining the
total true value of the property.
{¶28} Aside from the evidence of the May 2012 auction sale of the subject
property, the only other “evidence” TMMC submitted at the hearing were comparison lists
of tax values for several neighboring properties it claimed were similar to the subject
property. The BOR concluded at the hearing that this information was not competent,
probative evidence of the tax value of the subject property and, therefore, did not rely on it
in valuing the property. The BTA reached a similar conclusion. TMMC does not claim
that the BOR or BTA erred in reaching this conclusion.
{¶29} Although TMMC asserts that Ciocca also “presented testimony” at the
hearing regarding “his opinion of the property’s value” and that the BOR relied on this
“competent evidence” in determining the value of the property, Ciocca did not, in fact, offer any owner opinion testimony at the hearing. Rather, he testified only as to the
amount TMMC paid for the property at auction — $335,000 plus a 10% fee — and the
maximum it would have been willing to pay for the property at the auction — i.e. that
$375,000 “was going to be where we were going to stop.” Ciocca explained that these
numbers were not based on TMMC’s (or his) opinion of what the property was worth, but
rather, were based on the fact that “the three of us decided $125,000 apiece was
significant” and that they were planning on paying cash for the property and “didn’t want
to put ourselves at risk.” Ciocca admitted that, at the time of the auction, he “didn’t know
anything about the property” other than that it was vacant, that there were no back taxes
owed on the property and that it “looked like a beautiful piece of land.” See Worthington
City Schools Bd. of Edn., 140 Ohio St.3d 248, 2014-Ohio-3620, 17 N.E.3d 537, at ¶ 19
(discussing the “owner-opinion rule” and noting that it is based on the assumption that the
owner “‘possess[es] sufficient acquaintanceship with [the property]’” to estimate its
value); quoting Smith v. Padgett, 32 Ohio St.3d 344, 347, 513 N.E.2d 737 (1987).
{¶30} Here, there is no evidence in the record upon which the BTA could have
undertaken an independent assessment of the value of the subject property. “In the
absence of probative evidence of a lower value,” the BTA is “justified in fixing the value
at the amount assessed by the county [fiscal officer].” Salem Med. Arts & Dev. Corp. v.
Columbiana Cty Bd. of Revision, 82 Ohio St.3d 193, 195, 694 N.E.2d 1324 (1998);
Vandalia-Butler City School Dist. Bd. of Edn., 106 Ohio St.3d 157, 2005-Ohio-4385, 833
N.E.2d 271, at ¶ 12. {¶31} Based on a thorough review of the record, we find that the BTA acted
reasonably and lawfully in reversing the decision of the BOR and reinstating the
valuation of the subject property assessed by the Fiscal Officer. Accordingly, we
overrule TMMC’s assignment of error.
{¶32} Judgment affirmed.
It is ordered that appellee recover from appellant the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Board of Tax
Appeals to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
_____________________________________________ EILEEN A. GALLAGHER, JUDGE
KATHLEEN ANN KEOUGH, P.J., and TIM McCORMACK, J., CONCUR