N. Canton City School Dist. Bd. of Edn. v. Stark Cty. Bd. of Revision (Slip Opinion)
152 Ohio St. 3d 292
| Ohio | 2018Background
- 36-unit North Canton apartment complex entered foreclosure; receiver appointed and bank secured a judgment. Sheriff’s sale failed to produce bidders.
- Receiver engaged Hendricks & Partners to market the property nationally; marketing omitted any mention of the failed sheriff’s sale.
- Receiver received multiple offers; LFG Properties submitted the highest offer of $1,200,000, was unaffiliated with the receiver/owner, and the court approved the sale as "commercially reasonable."
- LFG sought reduction of the 2012 tax valuation from $1,841,300 to $1,200,000 at the county Board of Revision (BOR); BOR found the sale arm’s-length and set value at $1,301,500 (sale price plus post-sale repairs).
- Board of Tax Appeals (BTA) reversed, treating the sale as a forced sale and reinstating the auditor’s valuation; LFG appealed to the Ohio Supreme Court.
Issues
| Issue | Plaintiff's Argument (LFG) | Defendant's Argument (School) | Held |
|---|---|---|---|
| Whether a foreclosure/receiver sale should be used as true value when evidence shows an arm’s-length transaction | Sale price ($1,200,000) is controlling because the sale was marketed, voluntary, open-market, and arm’s-length | Receiver sales are per se forced sales and therefore presumed not reflective of true value | The forced-sale presumption may be rebutted; uncontradicted evidence established an arm’s-length sale, so the $1,200,000 sale price must be used |
| Whether the BOR properly adjusted the sale price to add post‑sale repair costs (setting $1,301,500) | If not using raw sale price, BOR’s adjusted figure is an alternative; but statutory scheme requires use of an arm’s-length sale price without post‑sale upward adjustments | Adjusting for repairs yields a more accurate valuation | Court held statutory mandate requires using the sale price alone when an arm’s-length sale is proved; post‑sale repair costs cannot be added to the sale price |
Key Cases Cited
- Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, 141 Ohio St.3d 243 (2014) (forced-sale presumption exists but is rebuttable by arm’s-length evidence)
- Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269 (2005) (recent arm’s-length sale generally controls valuation)
- Walters v. Knox Cty. Bd. of Revision, 47 Ohio St.3d 23 (1989) (arm’s-length factors: voluntariness, open market, self-interest)
- Schwartz v. Cuyahoga Cty. Bd. of Revision, 143 Ohio St.3d 496 (2015) (remedy: when sale is arm’s-length, remand with instruction to use sale price)
- Plain Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 130 Ohio St.3d 230 (2011) (party may waive objection to judicially noticed documents by failing to object)