FRED P. SCHWARTZ, TRUSTEE v. CUYAHOGA COUNTY BOARD OF REVISION, ET AL.
No. 106659
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
November 21, 2018
2018-Ohio-4712
JOURNAL ENTRY AND OPINION
FRED P. SCHWARTZ, TRUSTEE PLAINTIFF-APPELLANT vs. CUYAHOGA COUNTY BOARD OF REVISION, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: AFFIRMED
Administrative Appeal from the Board of Tax Appeals Case No. 2017-433
BEFORE: Boyle, P.J., Blackmon, J., and Jones, J.
RELEASED AND JOURNALIZED: November 21, 2018
J. Alex Morton 5247 Wilson Mills Road, Suite 334 Richmond Heights, Ohio 44143
ATTORNEYS FOR APPELLEES
For Cuyahoga County Board of Revision and Cuyahoga County Fiscal Officer
Michael C. O’Malley Cuyahoga County Prosecutor BY: Mark R. Greenfield Assistant County Prosecutor 1200 Ontario Street, 8th Floor Cleveland, Ohio 44113
For Ohio Tax Commissioner
Mike DeWine Ohio Attorney General BY: Christine Mesirow Assistant Attorney General 30 E. Broad Street, 14th Floor Columbus, Ohio 43215
MARY J. BOYLE, P.J.:
{¶1} Appellant, Fred Schwartz, Trustee, appeals from a decision of the Ohio Board of Tax Appeals (“BTA”) affirming the decision of the Cuyahoga County Board of Revision (“BOR”) that the “true value” of Schwartz’s property for the 2015 tax year was $107,900. It is from this judgment that Schwartz now appeals, raising three assignments of error for our review:
- The BTA order and decision is unreasonable and unlawful because it does not address Schwartz’s claim that the BOR erred by not ordering the Fiscal Officer’s
Computer Assisted Mass Appraisal (CAMA) Systems Administrator to appear at the BOR hearing on Schwartz’s complaint against valuation, to be examined by Schwartz concerning the basis for Fiscal Officer’s determination that the true value of Schwartz’s property was $107,900 for the 2015 tax year. - The BTA order and decision is unreasonable or unlawful because BTA unlawfully allocated the burden of proof, specifically the burden of production of evidence, to the property taxpayer, after he made a prima-facie case for value reduction to $5,000.
- The BTA order and decision is unreasonable and unlawful because the BTA found to be irrelevant Schwartz’s evidence concerning the invalidity of the Fiscal Officer’s CAMA methodology.
{¶2} After review, we find no merit to Schwartz’s assigned errors and affirm the decision of the BTA.
I. Procedural History and Factual Background
{¶3} In 2011, Schwartz purchased property in Cleveland Heights from the secretary of the United States Department of Housing and Urban Development (“HUD”) for $5,000. The Cuyahoga County fiscal officer valued the property at $126,800 for 2011 tax year. Schwartz filed a complaint with the Cuyahoga County Board of Revision (“BOR”), seeking a reduction of value to $30,000. The BOR retained the fiscal officer’s valuation and the BTA affirmed. Schwartz appealed the BTA’s decision to the Ohio Supreme Court. See Schwartz v. Cuyahoga Cty. Bd. of Revision, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223. The Supreme Court reversed the BTA’s decision, stating, “Under these circumstances, we hold that the BTA acted unreasonably when it found that the property’s 2011 sale price was not the best evidence of its tax year 2011 value.” Id. at ¶ 31. The Supreme Court reversed BTA’s decision and “remand[ed] with instructions that the $5,000 sale price be used as the property’s value for tax year 2011.” Id. at ¶ 32.
{¶5} In 2015, however, the Cuyahoga County fiscal officer valued the property at $107,900 for tax purposes. Schwartz again filed a complaint with the BOR, arguing that the value of the property should be $5,000.
{¶6} Before the BOR hearing took place, Schwartz moved the BOR for an “Order Calling Persons to Appear for Hearing,” requesting the BOR “call” Joe Toledo, systems administrator of computer-assisted mass appraisal (“CAMA”) for the county fiscal office appraisal department, to appear and testify at the hearing regarding the methodology used to determine the value of the property. The BOR denied Schwartz’s motion.
{¶7} The BOR held a hearing on Schwartz’s complaint in February 2017. Schwartz’s counsel argued that the property should be valued at $5,000 because that is what Schwartz purchased it for in October 2011. In support of his argument, Schwartz submitted a copy of the Supreme Court’s decision in Schwartz, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223. Schwartz’s counsel also submitted a settlement agreement between Schwartz and the county where the parties agreed to value the property at $12,500 for the 2012, 2013, and 2014 tax years. The BOR found the following: “Property owner was represented by counsel. 2011 sale was too remote from tax lien. No evidence regarding condition or valuation techniques used was provided to the Board. No change.” Schwartz appealed this decision to the BTA.
{¶8} The BTA hearing took place in June 2017. At the hearing, Schwartz’s attorney informed the hearing officer that Schwartz intended to rely on his submitted brief and
In his prehearing brief to the BTA, Schwartz argued that the BOR violated his due process rights when it failed to compel Joe Toledo to testify at the BOR hearing. He asserted that by doing so, the BOR denied his “right to confront by cross-examination” the fiscal officer’s determination of value. Schwartz further argued that his due process rights were violated because he was denied the right to “a fair and impartial BOR tribunal” because the BOR was biased in favor of the county.
{¶9} The BTA upheld the BOR’s determination. In its “Decision and Order,” the BTA found that the 2011 sale price “was not a reliable indicator of the subject property’s value because it was too remote from the tax lien date.” The BTA further noted that,
the property owner failed to come forward with any evidence that demonstrates whether market conditions remained stagnant, or were otherwise in equilibrium, during the approximately fifty-one months between the sale date in October 2011 and tax lien date on January 1, 2015 such that the subject sale would be reflective of the subject property’s value for tax year 2015.
{¶10} The BTA also found that a list of “unadjusted comparable sales data” from properties on the same street as the subject property was not probative. It noted that “[w]ith nothing more than a list of raw sales data, a trier of fact is left to speculate as to how common differences, e.g., location, size, quality of construction of improvements, nature of amenities, date of sale as opposed to tax lien date, etc, may affect a valuation determination.” The BTA explained that Schwartz made “no effort” to “equalize the alleged comparable properties with the subject property.”
{¶11} With respect to Schwartz’s argument that the BOR was biased in favor of the county fiscal officer, the BTA found that Schwartz did not submit any evidence “to demonstrate that either the fiscal officer or the BOR acted improperly.” The BTA further explained that
{¶12} The BTA further noted that the “statutory transcript” contained a number of documents “for which neither the property owner nor the county appellees have provided any explanation.” Therefore, the BTA found that these documents were not relevant to the determination of the subject property’s value.
{¶13} Based upon its review of the record, the BTA found that the property’s “true value” for tax purposes was $107,900 for the 2015 tax year. It is from this judgment that Schwartz now appeals.
II. Standard of Review
{¶14}
{¶15}
If upon hearing and consideration of such record and evidence the court decides that the decision of the board appealed from is reasonable and lawful it shall affirm the same, but if the court decides that such decision of the board is
unreasonable or unlawful, the court shall reverse and vacate the decision or modify it and enter final judgment in accordance with such modification.
{¶16} The Ohio Supreme Court has also explained that when reviewing an appeal from a BTA decision:
“The true value of property is a ‘question of fact, the determination of which is primarily within the province of the taxing authorities’ and accordingly we ‘will not disturb a decision of the Board of Tax Appeals with respect to such valuation unless it affirmatively appears from the record that such decision is unreasonable or unlawful.’”
Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, ¶ 9, quoting Cuyahoga Cty. Bd. of Revision v. Fodor, 15 Ohio St.2d 52, 239 N.E.2d 25 (1968).
{¶17} Thus, this court reviews BTA decisions only to determine whether they are “reasonable and lawful.”
{¶18} We will address Schwartz’s assigned errors out of order for ease of discussion.
III. Burden of Proof
{¶19} In his second assignment of error, Schwartz maintains that the BTA “unlawfully allocated the burden of proof” to him. We disagree.
{¶20} When an issue concerning the true value of real property for taxation purposes is presented to the BTA, the value set by a board of revision is not presumptively correct. Cambridge Arms, Ltd. v. Hamilton Cty. Bd. of Revision, 69 Ohio St.3d 337, 338, 632 N.E.2d 496 (1994). In a hearing before the BTA, however, the taxpayer is obliged to prove his right to a reduction in value. Springfield Local Bd. of Edn. v. Summit Cty. Bd. of Revision, 68 Ohio St.3d 493, 495, 628 N.E.2d 1365 (1994), citing Mentor Exempted Village Bd. of Edn. v. Lake Cty. Bd. of Revision, 37 Ohio St.3d 318, 526 N.E.2d 64 (1988).
{¶21} “A party seeking an increase or decrease in valuation bears the burden of proof before a board of revision.” Snavely v. Erie Cty. Bd. of Revision, 78 Ohio St.3d 500, 503, 678 N.E.2d 1373 (1997). Similarly, “[w]hen cases are appealed from a board of revision to the BTA, the burden of proof is on the appellant * * * to prove its right to an increase [in] or decrease from the value determined by the board of revision.” Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564, 566, 740 N.E.2d 276 (2001). To meet that burden, the appellant “must present competent and probative evidence to make its case.” Id. It is not enough to merely introduce evidence that calls the board of revision’s valuation into question. Id.
{¶22} As a public official, the fiscal officer is presumed to carry out his statutorily prescribed duties in good faith and in the exercise of good judgment, absent a showing to the contrary. See Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, 865 N.E.2d 22, ¶ 13.
{¶23} In this case, the BTA found that Schwartz failed to present any evidence of the property’s 2015 value. Citing a number of cases, the BTA determined that the 2011 transfer of the subject property was too remote from the tax lien date of January 1, 2015. Notably, Schwartz does not challenge this finding of fact or the BTA’s law supporting it.
{¶24} The BTA further found that Schwartz’s list of “raw sales data” of surrounding properties, with nothing more, did not support Schwartz’s argument that his property should
For example, if by some chance a nearby property was valued at $1 million for tax purposes and sold for $950,000, the county could not rely on that sales price alone to demonstrate Carr’s property was worth $950,000. Such a position would defy logic. The same concept, however, must equally be applied to the homeowner. Carr cannot cherry-pick lower-valued nearby homes and use those predictably lower sales prices to justify a valuation of her property. There has to be some parity, or some method of establishing parity, between the properties before sales prices have any meaning.
{¶25} Schwartz also asks this court to take judicial notice of the list of home sales that occurred on the same street as the subject property near the tax lien date of January 1, 2015. But just as the BTA did, we decline to do so. We note, however, that even if we agreed to take judicial notice of these sales, they would not help Schwartz’s case in any way for all of the reasons previously set forth by the BTA and this court in Carr.
{¶26} Schwartz further argues that he made a prima facie case that the value of the property is $5,000 based on the Supreme Court’s decision in Schwartz, 143 Ohio St.3d 496, 2015-Ohio-3431, which held that the value of the property was $5,000 because that was the purchase price in October 2011. Schwartz maintains that because he met his burden of production on his prima facie case, the burden then shifted to the county fiscal officer to “produce evidence that the value of the property was $107,900.”
[T]he case law unequivocally refutes Moskowitz’s burden-shifting theory. In W. Industries, Inc. v. Hamilton Cty. Bd. of Revision, 170 Ohio St. 340, 342, 164 N.E.2d 741 (1960), we stated that “[t]he burden is on the taxpayer to prove his right to a deduction” and that he is “not entitled to the deduction claimed merely because no evidence is adduced contra his claim.” Numerous later cases develop this principle. See Zindle v. Summit Cty. Bd. of Revision, 44 Ohio St.3d 202, 203, 542 N.E.2d 650 (1989) (based on taxpayers’ presentation, both the board of revision and the BTA reduced the true value of the property, and the court “defer[red] to the BTA’s determination that the [owners had] not presented sufficient evidence to prove that a greater reduction [was] warranted”); Westlake Med. Investors, L.P. v. Cuyahoga Cty. Bd. of Revision, 74 Ohio St.3d 547, 549, 660 N.E.2d 467 (1996) (“the BTA may approve a board of revision’s value if the taxpayer does not prove a right to a reduction in value”). See also EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, ¶ 6 (In order to meet its burden of proof at the BTA, “the appellant must come forward and demonstrate that the value it advocates is a correct value” [Emphasis added]); Amsdell v. Cuyahoga Cty. Bd. of Revision, 69 Ohio St.3d 572, 574, 1994 Ohio 314, 635 N.E.2d 11 (1994) (endorsing the BTA’s declaration that a taxpayer “may successfully challenge a determination of a Board of Revision only where the taxpayer produces competent and probative evidence to establish the correct value of the subject property”).
Because of Moskowitz’s failure to demonstrate a value below $60,000 — the value found by the BOR — the BTA reasonably and lawfully retained the BOR’s value under these circumstances.
{¶28} Schwartz acknowledges the holding in Ohio Supreme Court’s decision in Moskowitz. In fact, Schwartz’s counsel in the present appeal informs this court that he “is familiar with the Moskowitz decision because he was Moskowitz’s attorney in that case and presented the case to the Ohio Supreme Court.” Schwartz’s counsel states that “[t]he Moskowitz decision is * * * bad law, designed to promote the political agenda of the Moskowitz court to maximize government tax revenue at the expense of the taxpayer.” Schwartz’s counsel continues to criticize several justices on the Ohio Supreme Court. This court, however, will not entertain these arguments.
{¶29} Schwartz further cites to several cases that he claims supports his burden-shifting argument. A cursory review of these cases, however, establishes that they do not support Schwartz’s argument.
{¶30} Schwartz also argues that the BTA “seems to be advancing a political agenda.” He asserts that the BTA misstates the law over and over again and submits that “the BTA’s law is bad law, fake law in current terms, and like fake news is best understood as based upon someone’s political agenda, in this case the BTA political agenda to maximize government tax revenue at the expense of the taxpayer.”
{¶31} After review, however, we find that Schwartz, not the BTA, is disingenuous. For example, Schwartz maintains that the BTA incorrectly relies on Fairlawn Assoc. Ltd. v. Summit Cty. Bd. of Revision, 9th Dist. Summit No. 22238, 2005-Ohio-1951. He states, “[t]he BTA fabricated the holding of Fairlawn [Assoc.] to suit its purpose of shielding the government
{¶32} After reviewing the record before us, we find that the BTA’s decision was reasonable and lawful. We therefore overrule Schwartz’s second assignment of error.
IV. Evidentiary and Constitutional Issues
{¶33} In his first assignment of error, Schwartz argues that the BTA unlawfully avoided its duty because it failed to address his constitutional argument that he was denied due process of law when the BOR denied his motion to compel Joe Toledo, systems administrator of CAMA for the county fiscal office appraisal department, to testify regarding the methodology used to
{¶34} Although it is not entirely clear what Schwartz is arguing, he cites to Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Schwartz submitted a copy of the title page of this opinion and the syllabus to the BTA and specifically circled the third paragraph of the syllabus, which states:
A pre-termination evidentiary hearing is necessary to provide the welfare recipient with procedural due process. * * * Such hearing need not take the form of a judicial or quasi-judicial trial, but the recipient must be provided with timely and adequate notice detailing the reasons for termination, and an effective opportunity to defend by confronting adverse witnesses and by presenting his own arguments and evidence orally before the decision maker.
{¶35} Schwartz, however, was not denied notice or an opportunity to defend. In fact, he received an opportunity to defend at an evidentiary hearing before the BOR and the BTA, and he failed to present any evidence to establish the 2015 value of the property.2 Schwartz could have presented his own testimony regarding the value of the property or an expert appraiser’s testimony. He offered nothing but weak arguments and unrelated and unauthenticated documents (the Ohio Supreme Court opinion regarding the 2011 value of the property, the stipulated value between him and the county for the years 2012 through 2014, and a transcript from a county employee regarding another property altogether).
{¶36} To the extent that he argues that he was denied his due process rights because the BOR refused to compel Joe Toledo, administrator of the county’s CAMA system, to testify, we disagree. First, the county is not required to defend its valuation of a property. Jakobovitch, 152 Ohio St.3d 187, 2017-Ohio-8818, 94 N.E.3d 519, at ¶ 12. Further, Schwartz could have properly subpoenaed Toledo to appear before the BTA.
Upon written request of any party or by action of the board through a member, the secretary or its attorney examiners, subpoenas may be issued to compel the attendance of witnesses and the production of books, accounts, papers, records, documents, and testimony. If any party desires the issuance of subpoenas in order to compel the attendance of witnesses or the production of documents at a scheduled merit or motion hearing or deposition, the request shall be submitted to the board.
Under Ohio Adm.Code 5717-1-14(E), however, the subpoena must be served “at least twenty-one days prior to the hearing or deposition at which they are to appear.” Here, Schwartz served the subpoena on Toledo eight days before the hearing. The county moved to quash it, which the BTA granted.
{¶37} Schwartz further argues that the BTA erred when it refused to address his constitutional arguments because it did not believe it had the authority to do so. We agree with Schwartz that the BTA could have addressed this argument because he was not asserting that a statute was unconstitutional. Nonetheless, Schwartz was not harmed by this error because his due process rights were not violated.
{¶38} Finally, in his third assignment of error, Schwartz asks this court to review the documents that he submitted to the BOR and the BTA and that are part of the statutory record on appeal. In addition to the Ohio Supreme Court’s decision in Schwartz, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223, Schwartz also filed electronic documents that consisted of (1) a settlement agreement with the county that the property would be valued at $12,500 for the 2012, 2013, and 2014 tax years, (2) what he claimed to be “evidence discrediting the
We further note that several of the documents relating to the county’s methodology are not even from his case. Moreover, we agree with the BTA that these documents are not relevant to the 2015 value of Schwartz’s property.
{¶39} Accordingly, Schwartz’s first and third assignments of error are overruled.
{¶40} After considering Schwartz’s arguments and the record before us, we find that the BTA’s decision was “reasonable and lawful,” and therefore, we must affirm.
{¶41} Judgment affirmed.
It is ordered that appellees recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the Board of Tax Appeals to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MARY J. BOYLE, PRESIDING JUDGE
PATRICIA ANN BLACKMON, J., and LARRY A. JONES, SR., J., CONCUR