2015 Ohio 174
Ohio Ct. App.2015Background
- NDHMD, Inc. filed a valuation complaint for tax year 2011 seeking a reduction in value of a dilapidated Cleveland property under RO 5715.19.
- Property had previously been subject to a 2009 valuation; NDHMD lacked standing in the prior filing and the BOR lacked jurisdiction.
- Property was sold at public auditor auction in 2010 for $1,500 via NDHMD agent Dietrich; multiple bidders participated and no tax lien forced sale.
- School District argued the 2011 sale was not arm’s-length; trial court held it was arm’s-length and used $1,500 as value.
- BOR and School Board appealed; the issue centered on whether the 2011 filing was authorized and whether sale price is proper value.
- Court of appeals affirmed the trial court, holding the 2011 filing was proper under 5715.19(A)(2) and sale price evidence supported value.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2011 filing is barred under 5715.19(A)(2). | NDHMD: 2009 filing barred but standing nullified prior; arm’s-length sale exception applies. | Appellants: 5715.19(A)(2) bars second filing unless exception met; prior filing considered. | The 2011 filing permitted; arm’s-length sale exception satisfied. |
| Whether the auditor’s sale price is evidence of fair market value. | NDHMD: sale was arm’s-length and best evidence of value under 5713.03. | Appellants: auction sale price not conclusive; must show arm’s-length under Elkem and Olentangy. | Sale was arm’s-length; price $1,500 is evidence of value. |
| Whether prior deficient 2009 filing negates consideration of arm’s-length nature. | NDHMD: prior lack of jurisdiction cannot preclude arm’s-length finding in 2011. | Appellants: 2009 proceeding considered; or should at least bar subsequent filing. | Prior lack of jurisdiction did not prevent 2011 finding; arm’s-length determination valid. |
| Whether NDHMD’s 2011 filing complied with arm’s-length requirements under 5713.03. | NDHMD: sale qualifies as voluntary, open market, self-interested parties. | Appellants: must rebut presumption of involuntariness; sale must be arm’s-length. | Record supports arm’s-length, voluntary sale; value properly based on sale price. |
Key Cases Cited
- Walters v. Knox Cty. Bd. of Revision, 47 Ohio St.3d 23 (1989) (arm’s-length factors: voluntary, open market, self-interest)
- Cincinnati Schools Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 127 Ohio St.3d 63 (2010) (typical market participants; open-market sale factors)
- Elkem Metals Co., Ltd. Partnership v. Washington Cty. Bd. of Revision, 81 Ohio St.3d 683 (1998) (prior filing deemed 'filed' for purposes of 5715.19(A)(2) despite jurisdictional defects)
- Developers Diversified v. Cuyahoga Cty. Bd. of Revision, 84 Ohio St.3d 32 (1998) (second filing restrictions; need enumerated exceptions)
- Health Care Reit, Inc. v. Cuyahoga Cty. Bd. of Revision, 140 Ohio St.3d 30 (2014) (arm’s-length sale as best evidence of value when recent and voluntary)
- Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269 (2005) (precedent on best evidence of value; sale as evidence of value)
- Cummins Property Servs., L.L.P. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (2008) (recency and arm’s-length elements must be genuine)