Warrensville Hts. City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (Slip Opinion)
152 Ohio St. 3d 277
| Ohio | 2017Background
- Subject property: Thistledown Racetrack (128 acres, one-mile track, grandstand, barns) in Cuyahoga County.
- Magna Entertainment sold Thistledown via a bankruptcy-supervised auction in 2010; Harrah’s was the successful bidder for a $43,000,000 package that included real property and numerous nonreal assets and required a racing-license transfer.
- In Warrensville Hts. City School Dist. I, the Ohio Supreme Court held the 2010 sale was a court-supervised/forced sale and not an arm’s-length transaction, and affirmed the BTA’s reliance on David Sangree’s appraisal (2010 value $13.8M).
- For tax year 2012, Sangree appraised the property at $16.3M; the county fiscal officer initially valued it at $38,049,500. The BOR adopted Sangree’s $16.3M figure; the school board appealed to the BTA.
- The BTA affirmed, again rejecting the 2010 sale as reflective of true value and finding Sangree’s 2012 appraisal reasonable. The school board appealed to the Supreme Court.
- The Court affirmed: collateral estoppel bars relitigation of the arm’s-length status of the 2010 sale; the BTA reasonably relied on the Sangree appraisal for 2012 valuation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the July 2010 sale is a recent arm’s-length transaction controlling 2012 tax value | Sale was an arm’s-length/recent transaction; sale price should determine 2012 value | 2010 sale was court-supervised/forced and not arm’s-length; cannot establish true value | Collateral estoppel from earlier decision bars relitigation; sale is not arm’s-length |
| Whether the 2010 sale, even if not arm’s-length, establishes a minimum (distressed-sale) value | Distressed-sale status should set a floor at or near the $43M sale price | No authority supporting evidentiary value for a non-arm’s-length sale; no proof justifying a higher value | Rejected — argument duplicates prior claim to use sale price and is barred |
| Whether the BTA erred by improperly allocating purchase price between real and personal property | Harrah’s failed to allocate purchase price to personal property, inflating real-property value | BTA rejected using the sale price at all, so allocation issue is not reached | Rejected — BTA did not rely on sale price and properly accepted the appraisal |
| Whether the BTA’s adoption of Sangree’s 2012 appraisal was unreasonable or unlawful | School board argues appraisal undervalues property relative to sale | Harrah’s and BTA maintain appraisal is competent and probative | Held: BTA reasonably and lawfully relied on Sangree’s appraisal ($16.3M) for 2012 |
Key Cases Cited
- Warrensville Hts. City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 145 Ohio St.3d 115 (Ohio 2016) (held the 2010 sale was a forced sale and not arm’s-length; BTA’s reliance on Sangree appraisal for 2010 value upheld)
- Olmsted Falls Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 122 Ohio St.3d 134 (Ohio 2009) (discusses collateral estoppel across successive tax years for discrete common issues)
- Whitehead v. Gen. Tel. Co., 20 Ohio St.2d 108 (Ohio 1969) (defines collateral estoppel as barring relitigation of issues actually and necessarily litigated)
- HealthSouth Corp. v. Testa, 132 Ohio St.3d 55 (Ohio 2012) (permits sua sponte application of preclusion doctrines to promote finality)
- FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d 485 (Ohio 2010) (discusses allocation issues between total sale price and value of a specific parcel)
- Superior’s Brand Meats, Inc. v. Lindley, 62 Ohio St.2d 133 (Ohio 1980) (preclusion promotes finality and judicial economy)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (U.S. 1979) (addresses public-policy considerations in preclusion doctrine)