Westerville City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion)
114 N.E.3d 162
| Ohio | 2018Background
- Property: a 388,669 sq. ft. single-tenant office building leased to J.P. Morgan Chase; sale transactions in 2010 and a November 2013 portfolio sale allocating $44,500,000 to the subject property.
- Tax context: Auditor valued the property at $35,500,000 for tax year 2013; Westerville City Schools BOE challenged and sought adoption of the November 2013 sale price ($44,500,000).
- Owner (GC Net Lease) submitted an appraisal opining a January 1, 2013 fee-simple (unencumbered) value of $24,800,000; BOE objected to the appraisal as inadmissible in light of the sale price.
- The BOR initially adopted the $44.5M sale price; procedural confusion produced a corrected letter, appeals to the BTA followed, and the BTA consolidated the matters.
- BTA applied pre–H.B. 487 precedent treating a recent arm’s-length sale price as controlling and refused to give the appraisal meaningful consideration; it adopted $44,500,000 as the value.
- Owner appealed to the Supreme Court of Ohio; the Supreme Court vacated the BTA decision and remanded for consideration of the appraisal alongside the sale price under R.C. 5713.03 as amended by H.B. 487.
Issues
| Issue | Plaintiff's Argument (BOE) | Defendant's Argument (GC Net Lease) | Held |
|---|---|---|---|
| Which version of R.C. 5713.03 governs tax year 2013 valuations? | Pre–H.B. 487 rule applies (sale price controlling). | H.B. 487 version applies to 2013 valuations. | H.B. 487 version applies. |
| Is a recent arm’s-length sale price conclusive, barring appraisal evidence unless the sale is impugned? | Yes—sale price is presumptively controlling unless recency/arm’s-length/voluntariness is rebutted. | No—H.B. 487 made the presumption rebuttable and allows consideration of appraisal evidence. | No; sale price is best evidence but rebuttable and appraisal evidence must be considered. |
| Must a party make a threshold showing to trigger consideration of appraisal evidence? | Yes—proponent must first impugn the sale. | No—statutory change removed that threshold; appraisal evidence is admissible without first impugning sale. | No threshold; tribunal must consider appraisal alongside sale price. |
| Remedy where BTA adopted sale price without properly considering appraisal evidence? | Affirm BTA (if relying on pre–H.B. 487 authority). | Vacate and remand so BTA considers appraisal and sale price together. | Vacate BTA decision and remand for further proceedings on the existing record. |
Key Cases Cited
- Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 83 N.E.3d 916 (Ohio 2017) (H.B. 487 applies to 2013 valuations; sale-price presumption is rebuttable)
- HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 138 Ohio St.3d 223, 5 N.E.3d 637 (Ohio 2014) (pre–H.B. 487 discussion that a recent arm’s-length sale should not be adjusted for encumbrances)
- Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 834 N.E.2d 782 (Ohio 2005) (treated voluntary recent arm’s-length sale as irrebuttable evidence of value)
- Ratner v. Stark Cty. Bd. of Revision, 23 Ohio St.3d 59, 491 N.E.2d 680 (Ohio 1986) (appraisal evidence admissible even when a sale price is offered)
- Conalco, Inc. v. Monroe Cty. Bd. of Revision, 50 Ohio St.2d 129, 363 N.E.2d 722 (Ohio 1977) (sale is best evidence of market value)
- Pingue v. Franklin Cty. Bd. of Revision, 87 Ohio St.3d 62, 717 N.E.2d 293 (Ohio 1999) (plurality opinion limiting consideration of appraisal where a qualifying sale is offered)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516, 885 N.E.2d 222 (Ohio 2008) (discussing sale-price evidence principles)