Copley-Fairlawn City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision (Slip Opinion)
147 Ohio St. 3d 503
| Ohio | 2016Background
- Team Rentals, LLC owned a three-parcel, two-story office building in Summit County assessed at $1,362,930 for tax year 2012; owner sought reduction to $1,125,000.
- Owner submitted a Huntington Bank-commissioned appraisal (opining $1,125,000 as of June 14, 2011) and the owner (Klimczak) testified about falling rents, vacancies, and refinancing hardships; the appraiser did not testify.
- Summit County Board of Revision (BOR) adopted the appraisal-based $1,125,000 valuation for the combined parcels.
- Copley-Fairlawn City School District (appellant to the BTA) challenged the reduction before the Board of Tax Appeals (BTA); the BTA reversed the BOR and reinstated the auditor’s original valuation, finding the appraisal incompetent (no appraiser testimony, refinance purpose, and June 2011 "as-of" date).
- Ohio Supreme Court granted review and examined whether reverting to the auditor’s valuation was proper when the owner’s evidence negated that valuation and whether the appraisal/applicant evidence could support an independent valuation.
Issues
| Issue | Team Rentals' Argument | BOE's Argument | Held |
|---|---|---|---|
| Whether BTA may revert to auditor’s valuation when owner’s evidence before BOR contradicts auditor | Owner: BOR reliance on bank appraisal and owner testimony negated auditor’s valuation and supported reduced value | BOE: Appraisal unreliable (no appraiser testimony; prepared for refinancing; dated before lien date) — thus auditor’s value should be reinstated | When owner’s evidence negates auditor’s valuation, BTA may not simply revert to auditor; BTA must determine a new value from the record or take additional evidence on remand |
| Competence/use of a bank appraisal offered without appraiser testimony | Owner: Appraisal plus testimony about its origin, use, and certification provides indicia of reliability and usable data for valuation | BOE: Appraisal inadmissible/unreliable absent appraiser testimony and because it was for lending and dated before lien date | Appraisal opinion cannot be adopted directly for a different lien date, but the report’s data and analysis (with owner testimony about origin/use) are competent evidence and may inform an independent valuation |
| Whether BOR’s unqualified adoption of the appraisal opinion was proper | Owner: BOR properly relied on appraisal and testimony to reduce value | BOE: BOR erred; appraisal unreliable | BOR’s unqualified reliance on the appraisal’s expressed opinion of value (as of a prior date) was legal error; BTA cannot merely affirm that determination |
| Remedy and next step | Owner: Uphold BOR reduction | BOE: Reinstate auditor’s valuation | Reverse BTA; remand to BTA to perform an independent valuation based on the record and, at BTA’s discretion, receive additional evidence |
Key Cases Cited
- Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281 (recognizing that BTA may not revert to auditor where owner’s evidence contradicts auditor)
- Colonial Village, Ltd. v. Washington Cty. Bd. of Revision, 123 Ohio St.3d 268 (describing narrow exception when owner’s evidence eclipses auditor’s value)
- Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 193 (BTA must determine taxable value when record clearly negates auditor’s valuation)
- Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115 Ohio St.3d 449 (Bedford rule: BOR’s adopted new value shifts burden to board of education on appeal)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248 (BOR’s adoption of new owner-based value prevents board of education from relying on auditor as default)
- Freshwater v. Belmont Cty. Bd. of Revision, 80 Ohio St.3d 26 (opinion of value must reflect facts as of the lien date)
- AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision, 118 Ohio St.3d 343 (BTA may use appraisal components dated earlier for later lien-year valuation when direct opinion is inapplicable)
- Plain Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 130 Ohio St.3d 230 (written bank appraisal can be considered without appraiser testimony when indicia of reliability exist)
- Meijer Stores Ltd. Partnership v. Franklin Cty. Bd. of Revision, 122 Ohio St.3d 447 (appraisal industry labels like "leased fee" vs. "fee simple" do not change Ohio law’s valuation interest)