Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision (Slip Opinion)
141 Ohio St. 3d 243
| Ohio | 2014Background
- Property: single-family home in Powell, Ohio (parcel No. 319-342-01-015-000) sold after foreclosure; Countrywide acquired it in Oct 2007 and listed it on MLS in Feb 2008.
- Sale: Countrywide conducted a public auction on Nov 17, 2008; highest bid $414,750 by David Abraham, closing Dec 17, 2008; buyer transferred property to TaDa Investments, LLC.
- Administrative valuations and proceedings: Delaware County auditor valued the property at $826,100 for tax year 2009; TaDa sought reduction to the sale price before the Board of Revision (BOR); BOR reduced value to $414,750.
- Appeal: Olentangy Local Schools appealed to the Board of Tax Appeals (BTA), arguing auction/foreclosure sales are not evidence of value under R.C. 5713.04 and former R.C. 5713.03; BTA affirmed BOR, finding the auction was a voluntary arm’s-length sale.
- Supreme Court holding: Affirmed the BTA. Court held R.C. 5713.04 creates a presumption that auction (or forced-sale) prices are not arm’s-length, but that presumption can be rebutted by evidence showing the specific auction was voluntary and arm’s-length; here the record supported that finding.
Issues
| Issue | Plaintiff's Argument (Olentangy) | Defendant's Argument (TaDa) | Held |
|---|---|---|---|
| Whether R.C. 5713.04 categorically bars use of an auction sale price as evidence of value | Auction prices (including voluntary auctions) are categorically excluded by R.C. 5713.04 | Auction prices can be evidence of value when the sale was voluntary and arm’s-length | R.C. 5713.04 presumes auction/forced-sale prices are not arm’s-length but does not categorically bar their use; presumption can be rebutted |
| Whether R.C. 5713.04 applies to consummated auction sales | Auction language refers to hypothetical prices and therefore does not apply to consummated sales | R.C. 5713.04 applies to consummated transactions, including auctions | R.C. 5713.04 applies to consummated auction and forced-sales (consistent with precedent) |
| Which party bears the burden to show an auction sale is arm’s-length | BTA should require proponent of sale price to prove voluntariness and arm’s-length character | Once an auction sale is shown on its face, opponent bears burden to rebut (but auction/forced-sale flips typical burdens) | Where transaction is an auction/forced sale, opponent need only show the sale was an auction/forced sale; then proponent must prove it was voluntary and arm’s-length |
| Whether the 2008 auction sale here was voluntary and arm’s-length | The sale was not typically motivated and was a bank/foreclosure-related auction, so cannot be relied on | The auction was publicly advertised, had multiple bidders, prior MLS listing, and seller retained right to accept/reject — indicia of an arm’s-length sale | The BTA’s factual finding that the auction was voluntary and arm’s-length is supported by reliable, probative evidence and is affirmed |
Key Cases Cited
- Cummins Prop. Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (recent sale presumption and rebuttable presumption of arm’s-length)
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision (Fenco), 127 Ohio St.3d 63 (R.C. 5713.04 presumption that forced/foreclosure sales are not arm’s-length)
- Walters v. Knox Cty. Bd. of Revision, 47 Ohio St.3d 23 (factors for arm’s-length: voluntary, open market, self-interest)
- Satullo v. Wilkins, 111 Ohio St.3d 399 (deference to BTA factual findings)