CABOT III-OH1M02, L.L.C. v. Franklin Cty. Bd. of Revision
2013 Ohio 5301
Ohio Ct. App.2013Background
- Appellant CABOT III-OH1M02, LLC appealed the taxable valuation assigned by the Franklin County Auditor for tax year 2010 for a single 9.431-acre tract in a Community Reinvestment Area (CRA) that was administratively split into a taxable portion (-80 suffix, paved land) and a tax-abated portion (-90 suffix, warehouse).
- Auditor assessed aggregate true value $7,672,500 and taxable value $2,685,630; CABOT alleged the property sold on March 24, 2011 for $4,550,000 and sought values reflecting that sale (aggregate true value $4,550,000 and allocated taxable values accordingly).
- At the Board of Revision (BOR) hearing CABOT presented evidence of the $4,550,000 arm’s-length sale but presented no appraisal or expert testimony on how to allocate that sale value between the taxable and tax-abated portions.
- The BOR accepted the sale price as the property’s true value but allocated the entire reduction in value to the tax‑abated portion, leaving CABOT’s taxable portion unchanged and yielding no tax savings to CABOT.
- CABOT appealed to the Franklin County Court of Common Pleas, which affirmed the BOR’s allocation; the Board of Education argued the appeal should be dismissed for defective service but did not cross‑appeal that procedural ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellant was an "aggrieved party" to invoke review | CABOT: BOR allocation produced no tax relief, so CABOT is aggrieved | BOE/Auditor: procedural and allocation defenses; BOR decisions stand | Court addressed merits; statement that CABOT "appears not aggrieved" was harmless and merits reviewed; assignment overruled |
| Whether BOR decisions are entitled to a presumption of validity | CABOT: BOR findings not entitled to presumption per Vandalia-Butler | BOR/Common Pleas: BOR action presumed valid absent proof of lack of good faith/sound judgment | Court: BOR action assumed valid only to the extent Cleveland Bd. of Edn. allows; CABOT still bore burden to prove allocation error; assignment overruled |
| Proper method to allocate a bulk sale price between taxable and tax‑abated portions | CABOT: pro rata allocation based on auditor’s prior assessments (FirstCal approach) | BOR/Auditor: single parcel split for accounting in CRA; reductions tied to abated improvements first | Court: FirstCal applies to unrelated bulk parcels; here one parcel with CRA split—BOR reasonably allocated reduction to abated portion; assignment overruled |
| Whether common pleas court failed to independently determine allocation | CABOT: trial court did not independently reallocate or rely on auditor’s allocation | Common Pleas: court reviewed record, noted lack of evidence disputing auditor land value, and applied independent judgment | Court: common pleas court considered record and independently concluded BOR’s allocation reasonable; assignment overruled |
Key Cases Cited
- Cleveland Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 68 Ohio St.3d 336 (1994) (BOR action presumed valid absent evidence of lack of good faith or unsound judgment)
- FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d 485 (2010) (pro rata allocation of a bulk sale among unrelated, noncontiguous parcels can be reasonable)
- Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281 (2007) (taxpayer bears burden to prove entitlement to reduction in valuation)
- Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564 (2001) (appellant bears burden to prove right to reduction or increase in board’s valuation)
- Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 130 Ohio St.3d 291 (2011) (addresses standards for reviewing BOR decisions)
- Alliance Towers Ltd. v. Stark Cty. Bd. of Revision, 37 Ohio St.3d 16 (1988) (discusses presumption of validity of BOR action when no evidence of bad faith or unsound judgment)