Lunn v. Lorain Cty. Bd. of Revision (Slip Opinion)
73 N.E.3d 486
Ohio2016Background
- Betty L. Lunn purchased a single-family Elyria residence in Feb. 2011 for $22,000 and disputed the Lorain County auditor’s $85,170 2012 valuation for tax purposes.
- Lunn submitted documentary evidence of the $22,000 sale to the Board of Revision (BOR) but did not appear at the BOR hearing; the BOR retained the auditor’s value as it found her evidence insufficient.
- Lunn appealed to the Board of Tax Appeals (BTA), which—without Lunn’s attendance—reversed and set true value at $22,000 because the sale was recent and uncontested.
- The county presented evidence to this court showing the seller was a REMIC that had acquired the property at a sheriff’s sale for $33,000 in Jan. 2011 and sold to Lunn one month later for $22,000; the REMIC was insolvent and subject to federal tax constraints limiting its conduct as owner.
- The Supreme Court of Ohio held (majority) that Lunn met the initial, light burden to invoke a presumption that a recent sale was arm’s length, but the county rebutted that presumption by proving the sale was a forced post-foreclosure REMIC sale under R.C. 5713.04; because Lunn offered no evidence to overcome the resultant presumption against the sale’s indicativeness of true value, the BTA’s decision was reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a taxpayer who does not appear at the BOR hearing can meet initial burden to invoke presumption that a recent sale is arm’s-length | Lunn: documentary evidence of a Feb. 2011 $22,000 arm’s-length sale suffices even without personal attendance | County: absence at BOR prevented authentication and cross-examination; evidence insufficient to trigger presumption | Held: Lunn met the light initial burden; BTA reasonably presumed sale arm’s-length because documents were submitted and unchallenged |
| Whether a REMIC’s post-foreclosure sale is a forced sale under R.C. 5713.04 | Lunn: sale was recent and uncontested; thus indicative of value | County: REMIC’s federal tax constraints and insolvency created atypical pressure to sell, making the sale forced and not indicative of true market value | Held: REMIC sale was a forced sale; county rebutted the presumption that the sale indicated true value |
| Burden after a forced-sale showing | Lunn: the sale should be accepted absent direct evidence it wasn’t arm’s-length | County: once forced sale is shown, taxpayer must prove sale nevertheless reflects true market value | Held: After forced-sale showing, burden shifts to taxpayer to prove sale reflects true value; Lunn failed to meet that heavier burden |
| Proper remedy for BTA’s valuation | Lunn: BTA correctly set value at sale price $22,000 | County: BTA erred; reinstate BOR valuation (auditor’s appraisal) | Held: Reversed BTA; reinstated BOR/auditor valuation because taxpayer failed to overcome presumption against forced-sale indicativeness |
Key Cases Cited
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516, 2008-Ohio-1473, 885 N.E.2d 222 (explains light initial burden to invoke sale-price presumption)
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 78 Ohio St.3d 325, 677 N.E.2d 1197 (recognizes rebuttable presumption that submitted sale price met true-value requirements)
- Schwartz v. Cuyahoga Cty. Bd. of Revision, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223 (post-foreclosure sale by HUD generally treated as forced sale not indicative of value)
- Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, 141 Ohio St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086 (taxpayer bears heavier burden to prove forced sale nevertheless reflects true value)
- Walters v. Knox Cty. Bd. of Revision, 47 Ohio St.3d 23, 546 N.E.2d 932 (definition and elements of arm’s-length sale)
- Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 134 Ohio St.3d 529, 2012-Ohio-5680, 983 N.E.2d 1285 (atypical seller pressures negate arm’s-length character)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, 918 N.E.2d 972 (examples where minimal documentary evidence sufficed to invoke sale-price presumption)
- Snavely v. Erie Cty. Bd. of Revision, 78 Ohio St.3d 500, 678 N.E.2d 1373 (party may choose not to appear at BOR and rely on documentary evidence)
- Orange City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 74 Ohio St.3d 415, 659 N.E.2d 1223 (evidentiary rules relaxed in administrative tax proceedings)