Westerville City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion)
146 Ohio St. 3d 412
| Ohio | 2016Background
- Three undeveloped residential lots near Hoover Reservoir in Franklin County were valued by the county auditor for tax year 2011; owners (Henry and the Chases) sought reductions before the Board of Revision (BOR).
- Appraiser Ralph Berger testified for the owners at the BOR, used recent (2009–2010) comparables, and the BOR adopted Berger’s lower valuations.
- Westerville City School District appealed to the Board of Tax Appeals (BTA); the district’s appraiser Thomas Sprout relied on a 2007 nearby sale (the Harker tract) plus other comparables and produced substantially higher values.
- At the BTA hearing owners introduced additional witnesses and evidence about regulatory changes (sewer/floodplain) potentially affecting developability; the BTA found Sprout more persuasive and adopted his valuations.
- Owners appealed to the Ohio Supreme Court arguing (inter alia) improper reliance on older comparables, inadequate adjustments for changed market and regulatory conditions, appraisal factual errors, and a uniform-taxation violation; the Supreme Court affirmed the BTA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May an appraiser rely on a sale more than 24 months before the tax‑lien date as a comparable? | Akron controls: sales >24 months before lien date can't be treated as presumptively recent and thus cannot override more recent reappraisal evidence. | Akron only governs whether a sale is presumed to be the subject property’s true value; an appraiser may still use older sales as comparables if properly adjusted. | Court: Appraisers may use older/comparable sales with appropriate adjustments; BTA did not err in crediting Sprout’s adjusted use of the 2007 sale. |
| Did appellant meet its burden given evidence of post‑sale regulatory changes (sewer/FEMA maps)? | School board failed to quantify how regulatory changes affected values, so burden not met. | Sprout’s adjustments and testimony addressed market; regulatory evidence did not show a required impact undermining his analysis. | Court: BTA reasonably found the regulatory evidence insufficient to rebut Sprout’s comparables and credited Sprout. |
| Are sales used as comparables entitled to the same rebuttable presumption of arm’s‑lengthness as a subject property sale? | Yes: any sale should be presumed arm’s‑length unless rebutted. | No: presumption applies to the subject property’s sale price; comparables require verification and adjustment. | Court: No presumption for comparables; verification with a party to the sale increases probative weight and BTA reasonably favored Sprout’s verified comparables. |
| Did alleged factual errors in Sprout’s appraisal (waterfront, utilities) render it incompetent? | Sprout misstated material facts, so appraisal is unreliable. | Sprout’s testimony clarified those points and he adjusted for utility differences; differences were not fatal. | Court: No material factual errors that undermined report; BTA reasonably credited Sprout. |
Key Cases Cited
- Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 139 Ohio St.3d 92 (2014) (sale >24 months before lien date is not presumptively recent when reappraisal occurred)
- RNG Properties, Ltd. v. Summit Cty. Bd. of Revision, 140 Ohio St.3d 455 (2014) (appellate court should not retry facts; defer to BTA credibility determinations)
- EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1 (2005) (BTA has wide discretion in weighing evidence and credibility)
- Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564 (2001) (burden on appellant to present competent, probative evidence for valuation change)
- Youngstown Sheet & Tube Co. v. Mahoning Cty. Bd. of Revision, 66 Ohio St.2d 398 (1981) (BTA may consider pre- and post-lien date factors affecting true value)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (2008) (appraisals are appropriate evidence of value when no subject sale controls)
- State ex rel. Park Invest. Co. v. Bd. of Tax Appeals, 175 Ohio St. 410 (1964) (sale price studies used in equalization; appraisals may be relied on when no determinative sale price exists)