North Royalton City School District Board of Education v. Cuyahoga County Board of Revision
129 Ohio St. 3d 172
| Ohio | 2011Background
- Riser Foods challenged the BTA’s $450,000 true value for 2005 based on a December 2005 sale, despite an auditor’s $73,700 value.
- The sale price arose from a December 1998 ground lease with a buy-out option, culminating in a December 2005 transfer of ownership.
- The ground lease provided for a buy-out price of $400,000 in years 1–5 and $450,000 in years 6–10, plus a year-10 option if not exercised.
- The BTA relied on the conveyance-fee statement showing a $450,000 consideration as the sale price and thus as the value criterion under RC 5713.03.
- Riser argued the sale was not recent or arm’s-length, and thus not probative of value; BOR rejected this, and the BTA adopted the sale price.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2005 sale price was a recent, arm’s-length sale under RC 5713.03 | Riser: sale not recent or arm’s-length; related parties; seven-year gap | Riser failed to rebut recency/arm’s-length; sale price valid | Yes; sale is recent and arm’s-length |
| Who bears the burden at the BTA on whether the sale price is probative of value | Riser: burden should shift to board to show probative value | Burden remains on the party opposing the sale price (Riser) | Burden on Riser; sale price presumed probative unless rebutted |
| Whether a long horizon between contract and transfer negates arm’s-length character | Riser: seven-year gap undermines arm’s-length nature | Recency focused on sale transfer date, not negotiation date; not dispositive of open-market dynamics | Not dispositive; sale within a reasonable time after lien date remains probative |
| Whether lack of open-market elements negates arm’s-length nature | Riser: related-party/duress concerns negate arm’s-length | Open-market absence does not automatically negate arm’s-length; self-interest and market factors still relevant | Open-market absence does not defeat arm’s-length where parties act in their own self-interest |
| Whether related-party status invalidates the sale as value under RC 5713.03 | Riser: Caniglias (landlord) and Riser (tenant) are related; price not fair-market | No demonstrated related-party control; no proof the price isn’t fair-market value | Waived/insufficient proof of related-party impact; price sustained |
Key Cases Cited
- Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision, 121 Ohio St.3d 175 (2009) (prescribes recency/arm’s-length framework; sale closest to lien date governs value)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (2008) (reaffirmed presumption of sale price as value; rebuttal allowed)
- FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d 485 (2010) (conveyance documentation creates prima facie value; rebuttable)
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 127 Ohio St.3d 63 (2010) (conveyance-fee statements basis for value; rebuttal possible)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27 (2009) (BTA may rely on conveyance documents as prima facie value)
- HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 124 Ohio St.3d 481 (2010) (defining sale date under RC 5713.03 as conveyance-fee filing date)
- Shiloh Automotive, Inc. v. Levin, 117 Ohio St.3d 4 (2008) (related-party transfers require evidence beyond purchase price to prove true value)
- Strongsville Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 112 Ohio St.3d 309 (2007) (arm’s-length requires voluntary, self-interested parties; market factors matter)