RNG Properties, Ltd. v. Summit Cty. Bd. of Revision (Slip Opinion)
140 Ohio St. 3d 455
| Ohio | 2014Background
- RNG Properties owned multiple Akron-area industrial parcels and sold a warehousing business in 2010 as a bulk transaction for a contract price (adjusted) of $14,825,000, with a contractual allocation of $8,425,000 to Marvo Drive real estate and $1,400,000 to Home Avenue real estate (total real-estate allocation $9,825,000).
- For tax year 2008 RNG challenged Summit County valuations for seven parcels (separate complaints for 1779 Marvo, 1738 Marvo, 995 Home Ave., and a withdrawn Palmetto complaint); owner valuations were presented at the BOR via written owner opinions and an affidavit but no live testimony.
- The BOR denied RNG’s reductions for lack of probative evidence; RNG appealed to the BTA and supplemented the record with portions of the 2010 Asset Purchase Agreement (APA), a HUD settlement statement, and deeds reflecting the APA allocation.
- The BTA declined to adopt the contractual allocation, finding the APA and related documents ambiguous or inconsistent about which specific parcels were included (some parcels in the APA/deeds were not at issue; some at-issue parcels were not clearly included), and that the allocation lacked supporting reasoning or testimonial authentication.
- RNG sought on appeal to (1) have the BTA treat the APA allocation as dispositive value evidence; (2) require a further prorated allocation among individual parcels using auditor percentages; and (3) argued a constitutional uniformity violation if the allocation were not used. The Supreme Court affirmed the BTA.
Issues
| Issue | Plaintiff's Argument (RNG) | Defendant's Argument | Held |
|---|---|---|---|
| Whether the BTA must accept a contractual allocation from a post-BOR bulk sale as the parcels’ taxable values | The APA’s allocation of the lump-sum sale is recent, arm’s-length, and is the best evidence of true market value | The allocation is unsupported, ambiguous as to which parcels were included, and lacks testimony or reasoned basis for parcel-level allocation | Court: BTA reasonably rejected allocation as insufficiently supported and ambiguous; affirmed |
| Whether a second-tier allocation (prorating the APA allocation among parcels by auditor percentages) should have been applied | Court should divide the APA amounts among individual parcels using each parcel’s percentage of auditor aggregate value (FirstCal method) | That method was not argued or evidenced before the BTA; auditor valuations for some non‑party parcels relied upon were not in the record | Court: Waived and unsupported; BTA not required to perform or adopt that allocation |
| Whether supplemental conveyance‑fee statements submitted to this Court (but not presented below) can be considered | RNG submitted conveyance-fee statements to bolster the allocation evidence | Appellees object and rules limit appellate consideration to the record presented to the BTA | Court: Supplemental conveyance statements not part of the record and will be disregarded |
| Whether BTA’s refusal to use the allocation violated constitutional uniformity (Article XII, §2) | Not using the recent sale allocation produces unequal taxation; constitutional infirmity | Argument lacks specific legal development and factual showing; effectively waived | Court: Constitutional claim effectively waived; merits not addressed |
Key Cases Cited
- Conalco, Inc. v. Monroe Cty. Bd. of Revision, 50 Ohio St.2d 129 (1977) (preferability of proper allocation of lump-sum purchase price as best evidence of true value)
- Consol. Aluminum Corp. v. Monroe Cty. Bd. of Revision, 66 Ohio St.2d 410 (1981) (BTA not required to accept an allocation when a proper allocation to the property is not possible)
- FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d 485 (2010) (approving prorating lump-sum allocations among parcels by auditor percentage under appropriate record support)
- St. Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. of Revision, 115 Ohio St.3d 365 (2007) (burden on owner to prove propriety of an allocated bulk-sale price)
- EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1 (2005) (appellate review does not substitute court as super factfinder; BTA factual determinations will be upheld if supported)
- Hardy v. Delaware Cty. Bd. of Revision, 106 Ohio St.3d 359 (2005) (BTA may reject documents whose significance is unsupported by testimony)