W. Carrollton City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision (Slip Opinion)
150 Ohio St. 3d 215
Ohio2017Background
- Carmax purchased ~15 acres of vacant land in 2008 for $5,850,000; the BOE successfully had the 2008 auditor land valuation increased to that sale price in a prior BTA decision.
- Carmax built a used-car sales facility (about 45,435 sq. ft.) during 2008–2009 at an actual construction cost of $7,015,740.76.
- For the 2011 triennial update, the county auditor valued the combined parcels at $4,716,690 (land + replacement-cost new for improvements).
- The BOE sought to increase the 2011 valuation to reflect the 2008 land sale and Carmax’s actual construction costs; the BOR and BTA retained the auditor’s 2011 value.
- The BTA declined to treat the 2008 sale as controlling for 2011 (citing Akron City School Dist.), and it did not rely on Carmax’s actual construction costs to overturn the auditor’s valuation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2008 land sale price or owner’s actual construction costs negate the auditor’s 2011 valuation, requiring an independent valuation | 2008 sale price ($5,850,000) and $7M+ construction costs affirmatively negate the auditor’s 2011 value and justify raising the 2011 valuation | The 2008 sale is disqualified by intervening improvements and temporal remoteness; actual costs do not equal market value and need not supplant auditor cost schedules | Court held neither the 2008 sale nor actual costs affirmatively negate the auditor’s 2011 valuation; BTA properly retained the auditor’s value |
| Whether R.C. 5713.03 permits direct use of the 2008 sale for 2011 valuation when improvements were added after the sale | BOE urges use of sale price as controlling evidence of value | BOR/BTA assert statute bars use of sale price where improvements were added after the sale | Court held R.C. 5713.03(B) bars direct use of the 2008 sale because improvements were added before the 2011 lien date |
| Whether the BTA was required to perform an independent valuation once the BOE submitted sale and cost evidence | BOE contends submitted evidence should have triggered BTA’s duty to independently value | BTA and appellees argue evidence did not affirmatively undermine the auditor’s valuation, so no duty arose | Court held no duty to independently appraise because evidence did not negate the auditor’s valuation |
| Whether actual construction costs must be preferred over auditor cost schedules for cost approach valuation | BOE argues actual costs should control, especially for special-purpose property | Appellees argue cost schedules reflect market replacement cost; actual costs can overstate market value and need not be preferred | Court held actual costs do not automatically supplant auditor cost schedules; reliance on schedules is permissible and actual costs may not reflect market buying behavior |
Key Cases Cited
- Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 9 N.E.3d 1004 (court rejects presuming a sale older than 24 months as recent in reappraisal years)
- Colonial Village Ltd. v. Washington Cty. Bd. of Revision, 915 N.E.2d 1196 (standard for when submitted evidence must affirmatively negate auditor valuation)
- Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 865 N.E.2d 22 (cost approach analysis and relationship between actual costs and market replacement cost)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 885 N.E.2d 222 (recency rule includes factors that change with time affecting value)
- Rite Aid of Ohio, Inc. v. Washington Cty. Bd. of Revision, 54 N.E.3d 1177 (special-purpose property doctrine and current-use considerations)
- Dinner Bell Meats, Inc. v. Cuyahoga Cty. Bd. of Revision, 466 N.E.2d 909 (special-purpose property and use of cost approach with Marshall schedules)
- Meijer Stores Ltd. Partnership v. Franklin Cty. Bd. of Revision, 912 N.E.2d 560 (discussion of current use and market-value principles)