Lutheran Social Servs. of Cent. Ohio Village Hous., Inc. v. Franklin Cty. Bd. of Revision (Slip Opinion)
150 Ohio St. 3d 125
| Ohio | 2017Background
- Two subsidized elderly apartment complexes in Franklin County (Village Place: 44 units; Stratford Place: 46 units) challenged the county auditor’s 2008 valuations.
- Owner (Lutheran Social Services) submitted appraisals by Donald Miller using income and sales-comparison approaches, producing significantly lower values than the auditor’s figures.
- The Franklin County Board of Revision (BOR) rejected the owner’s appraisals and adopted the auditor’s values; the owner appealed to the Board of Tax Appeals (BTA).
- At the BTA hearing the Board of Education (BOE) presented Thomas Sprout, who critiqued Miller’s comparables and capitalization rates; Lutheran Services did not object to Sprout’s testimony.
- The BTA issued a brief decision adopting Miller’s appraisals as probative but did not address Sprout’s contrary testimony; additionally, the BOR’s audio record for the Stratford Place hearing was blank/missing.
- The Supreme Court of Ohio vacated the BTA decision and remanded, holding the BTA must consider conflicting evidence and must address the missing BOR record for Stratford Place.
Issues
| Issue | Plaintiff's Argument (BOE) | Defendant's Argument (Lutheran Services) | Held |
|---|---|---|---|
| Whether BTA must address conflicting contrary evidence before adopting owner’s appraisal | BTA must consider and weigh Sprout’s critique and explicitly address contrary evidence | BTA may adopt appraisals as probative; owner relied on Miller’s appraisal and testimony | BTA erred by adopting appraisals without explicitly addressing Sprout’s contrary testimony; remand required |
| Whether Miller’s appraisals are legally unprobatative due to poor comparables | Appraisals lack probative value as matter of law because comparables differ in age/amenities | Appraisals comply with law (used market rent/expenses); credibility and weight are BTA’s province | Court declined to rule appraisals non-probative as a matter of law; BTA may still adopt them after addressing criticisms |
| Whether BTA could adopt Stratford Place appraisal absent BOR hearing record | Missing BOR hearing record undermines reliability; BTA must not adopt rejected appraisal without the record | Owner implicitly relied on the submitted appraisal record | BTA erred: must use statutory authority to obtain missing BOR record or otherwise develop evidence before adopting appraisal |
| Scope of appellate review over BTA factual determinations | BOE urges de novo rejection of appraisals | Owner urges deference to BTA factfinding | Court affirms deference to BTA for credibility/weight but requires sufficient explanation to permit appellate review |
Key Cases Cited
- HealthSouth Corp. v. Levin, 121 Ohio St.3d 282 (BTA must discuss evidence sufficiently to permit appellate review)
- Howard v. Cuyahoga Cty. Bd. of Revision, 37 Ohio St.3d 195 (appellate court needs to know which facts BTA selected)
- Sears, Roebuck & Co. v. Franklin Cty. Bd. of Revision, 144 Ohio St.3d 421 (distinguishing mere contentions from conflicting evidence)
- Cannata v. Cuyahoga Cty. Bd. of Revision, 147 Ohio St.3d 129 (BTA must address missing BOR record when adopting an appraisal BOR rejected)
- Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188 (value determination is fact question for taxing authorities)
- EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1 (weighing appraisals is BTA’s statutory job)
- Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 212 (example of appraisal invalid as matter of law)
- Delhi Estates, Ltd. v. Hamilton Cty. Bd. of Revision, 68 Ohio St.3d 192 (use market rents/expenses for subsidized housing valuations)