Dublin City Schools Board of Education v. Franklin County Board of Revision
139 Ohio St. 3d 193
| Ohio | 2013Background
- East Bank Condominiums II built 28 units; as of Jan. 1, 2008 (tax-lien date) 21 units were unsold and variously unfinished. 3 units had been sold; 4 finished but unsold.
- Franklin County auditor assessed the 21 units at an aggregate $8,139,300 for 2008; East Bank challenged those values before the Board of Revision (BOR).
- East Bank presented appraiser Thomas Horner and managing partner George Babyak; BOR adopted East Bank’s appraisal valuing the 21 units at $3,100,000 (Horner used a "bulk discount" and adjustments for completion).
- Dublin City Schools (seeking to retain the auditor’s values) appealed to the Board of Tax Appeals (BTA) but presented no affirmative valuation evidence; BTA rejected Horner’s bulk-discount methodology and reinstated the auditor’s $8,139,300 aggregate valuation.
- The Ohio Supreme Court reviewed whether the BTA lawfully reinstated the auditor’s valuation when the only evidentiary record contradicted that valuation and the auditor’s methodology/evidence was not explained at the BTA.
Issues
| Issue | Plaintiff's Argument (East Bank) | Defendant's Argument (Dublin City Schools/Auditor) | Held |
|---|---|---|---|
| Burden of proof on appeal to BTA after BOR adopts taxpayer’s value | East Bank: once BOR adopted taxpayer’s valuation, burden shifted to school board to present evidence on appeal; board presented none. | School board: BTA may reject taxpayer’s evidence and revert to auditor when taxpayer’s evidence is unreliable. | Held: Burden shifts; when BOR adopts taxpayer value, the contesting party on appeal must present competent evidence to sustain auditor; here school board produced none, so BTA could not simply reinstate auditor where record negated auditor’s value. |
| Can BTA reinstate auditor’s valuation absent supporting evidence when taxpayer presented contrary evidence? | East Bank: No — precedent forbids reverting to auditor when record contains evidence negating auditor’s value and no evidence supports auditor. | School board: If taxpayer’s evidence is unreliable, BTA may revert to auditor as default. | Held: Court follows Dayton-Montgomery and Bedford — BTA may not simply reinstate auditor when taxpayer’s evidence negates auditor and no evidence supports auditor; BTA abused discretion here. |
| Validity of "bulk discount" (investment/bulk-sale approach) in tax valuation | East Bank: bulk-sale analysis appropriate because owner could only sell units as a block to an investor; supports lower value. | School board/BTA: bulk discount yields an investment value not true market (retail) value and is improper for tax appraisal. | Held: Majority did not decide the appropriateness of bulk discount (remedial ruling unnecessary because BTA failed to do independent valuation); concurring opinion (O’Connor, C.J.) would reject bulk-discount as inconsistent with tax valuation principles. |
| Effect of unfinished status and market downturn on valuation | East Bank: units were partially complete and market declined; appraisal accounted for completion percentages and market conditions — supports reduced value. | School board: challenged Horner’s specifics (e.g., comparables, cost-to-finish) but presented no affirmative contrary completion or market evidence. | Held: Court finds record contained evidence of completion percentages and market decline and that auditor’s valuation did not appear to reflect those factors; BTA unreasonably reinstated auditor rather than performing independent valuation; Court adopts East Bank’s $3,100,000 valuation as the only evidence of value in record. |
Key Cases Cited
- FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d 485, 929 N.E.2d 426 (2010) (auditor’s initial determination has prima-facie probative force but is not controlling when contrary evidence exists)
- Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 865 N.E.2d 22 (2007) (BTA may not revert to auditor when the only evidence in the record affirmatively contradicts auditor’s valuation)
- Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115 Ohio St.3d 449, 875 N.E.2d 913 (2007) (reaffirming rule against mechanically reinstating auditor where taxpayer presented contrary evidence)
- Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 130 Ohio St.3d 291, 958 N.E.2d 131 (2011) (BTA must independently determine value when record permits; otherwise may revert to auditor)
- Colonial Village, Ltd. v. Washington Cty. Bd. of Revision, 114 Ohio St.3d 493, 873 N.E.2d 298 (2007) (BTA must determine if record allows independent valuation; exception where record affirmatively negates auditor)
- Simmons v. Cuyahoga Cty. Bd. of Revision, 81 Ohio St.3d 47, 689 N.E.2d 22 (1998) (principles guiding when auditor’s value may be retained)
- Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564, 740 N.E.2d 276 (2001) (appellant to BTA must present competent and probative evidence to support its claimed value)