Emerson v. Erie Cty. Bd. of Revision (Slip Opinion)
149 Ohio St. 3d 148
| Ohio | 2017Background
- Two adjoining Erie County parcels (total 1.9353 acres) were bought by Mueller Electric Employee Pension Fund in 2006 for $310,000 and sold to David Emerson in September 2009 for $180,000.
- The seller/trustee was Emerson’s brother, Scott Emerson; sale occurred while Scott acted as trustee for the pension fund.
- A July 2009 certified appraisal (by a state-certified general appraiser) valued the parcels at $170,000 and was used to negotiate the $180,000 sale; the appraisal noted access and development problems.
- County auditor valued the parcels at $328,270 for tax year 2011; Emerson contested the valuation at the BOR and then at the Board of Tax Appeals (BTA).
- At the BTA the county introduced an appraisal valuing the property at $283,000 as of January 1, 2011; the BTA nonetheless found the 2009 sale price controlling and set value at $180,000.
- The Supreme Court of Ohio affirmed the BTA, holding a contemporaneous certified appraisal can establish that a related-party sale reflected fair market value and that the county waived a recency challenge by not raising it before the BTA.
Issues
| Issue | Plaintiff's Argument (Emerson) | Defendant's Argument (County) | Held |
|---|---|---|---|
| Whether the 2009 sale between related parties was arm’s-length and thus its price must be treated as true value | The certified July 2009 appraisal contemporaneous to the sale shows the $180,000 price reflected fair market value | Sale was between related parties (brothers/trustee) so not arm’s-length; appraisal insufficient to prove separate, market-motivated interests | Held for Emerson: a contemporaneous certified appraisal can affirmatively demonstrate that a related-party sale reflected fair market value; BTA reasonably relied on the appraisal and sale price |
| Whether the September 2009 sale was sufficiently recent to the Jan 1, 2011 tax-lien date | The sale (15 months before lien date) is within a reasonable time and supported by contemporaneous appraisal | County offered a later appraisal arguing changed circumstances made the 2009 sale non- controlling | Held for Emerson: temporal proximity ordinarily suffices and county waived any recency challenge by not raising it before the BTA |
| Whether the BTA had to expressly address the county’s later appraisal (Hoffman) | BTA could accept the controlling sale price once it found the sale recent and arm’s-length; no need to reweigh alternative appraisal that would contradict Berea rule | BTA failed to consider Hoffman appraisal; remand required to address all evidence | Held for Emerson: Once sale is treated as controlling under Berea, alternative appraisal cannot be used to depart from that sale price; no remand required |
Key Cases Cited
- Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269 (2005) (recent arm’s-length sale price is true value for taxation)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (2008) (recency can be rebutted by evidence of changed circumstances)
- N. Royalton City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 129 Ohio St.3d 172 (2011) (related-party sale may qualify if proponent affirmatively demonstrates price reflects fair market value)
- Dublin Senior Community Ltd. Partnership v. Franklin Cty. Bd. of Revision, 80 Ohio St.3d 455 (1997) (BTA must state basis for accepting or rejecting competing appraisals)