2013 JAN 2, S Pm 1^- 44

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1 IN THE SUPREME COURT STATE OF OHIO F1(. E 0/f?ECEIVI" 0 ^'^ARII <<:`^ T^AX A.>T FA[,S 2013 JAN 2, S Pm 1^- 44 APPEAL FROM THE BOARD OF TAX APPEALS. BOARD OF EDUCATION OF THE : SUPREME COURT CASE ^ NUMBER: ^ 5 HUBER HEIGHTS CITY SCHOOLS, : AND TAX COMMISSIONER OF THE STATE OF OHIO, APPELLEES, V. MONTGOMERY COUNTY BOARD OF REVISION, the MONTGOMERY COUNTY AUDITOR, BOARD OF TAX APPEALS CASE NUMBER 2010-K-2855 (REAL PROPERTY TAX) and BEF REIT, INC., APPELLANTS. NOTICE OF APPEAL Kelley A. Gorry COUNSEL OF RECORD Rich & Gillis Law Group, LLC 6400 Riverside Drive, Suite D Dublin, Ohio (614) (614) FAX Andrew M. Ferris, Esq. ( ) COUNSEL OF RECORD Baker & Hostetler, LLP 65 East State Street, Suite 2100 Columbus, Ohio (614) (614) FAX ATTORNEY FOR THE APPELLEE, BOARD OF EDUCATION OF THE HUBER HEIGHTS CITY SCHOOLS ATTORNEY FOR APPELLANT, BEF REIT, INC. JAN CLtRK 0f COURT R^^E COUR1 OF(

2 Mathias H. Heck, Jr. Montgomery County Prosecuting Attorney Laura G. Mariani, Assistant Prosecuting Attorney 301 West Third Street P.O. Box 972 Dayton, Ohio (419) (419) FAX ATTORNEYS FOR APPELLANTS, MONTGOMERY COUNTY BOARD OF REVISION AND THE MONTGOMERY COUNTY AUDITOR Mike Dewine, Esq. Ohio. Attorney General James A. Rhodes State Office Tower 30 East Broad Street, 14th Floor Columbus, Ohio (614) (614) FAX ATTORNEY FOR APPELLEE, TAX COMMISSIONER OF THE STATE OF OHIO

3 IN THE SUPREME COURT STATE OF OHIO APPEAL FROM THE BOARD OF TAX APPEALS BOARD OF EDUCATION OF THE HUBER HEIGHTS CITY SCHOOLS, AND TAX COMMISSIONER OF THE STATE OF OHIO, SUPREME COURT CASE NUMBER: APPELLEES, V. MONTGOMERY COUNTY BOARD OF REVISION, the MONTGOMERY COUNTY AUDITOR, and V. BEF REIT, INC., BOARD OF TAX APPEALS CASE NUMBER 2010-K-2855 (REAL PROPERTY TAX) NOTICE OF APPEAL TO THE SUPREME COURT OF OHIO PURSUANT TO SECTION OHIO REVISED CODE APPELLANTS. The Appellant, BEF REIT, LLC by and through counsel, hereby gives notice of its appeal to the Supreme Court of The State of Ohio, from a Decision and Order of the Ohio Board of Tax Appeals, rendered on the 28th day of December, 2012, a copy of which is attached hereto as "Exhibit A" and which is incorporated herein as through fully rewritten in this Notice of Appeal.

4 The Errors complained of are attached hereto as "Exhibit B," which is incorporated herein by reference Respectfully submitted, Andrew M. Ferris, Esq. ( ) COUNSEL OF RECORD Baker & Hostetler LLP 65 East State Street, Suite 2100 Columbus, Ohio (614) (614) FAX ATTORNEY FOR APPELLANT, BEF REIT, LLC

5 CERTIFICATE OF SERVICE This is to certify that a copy of the foregoing NOTICE OF APPEAL was mailed via Certified United States Mail, postage prepaid, to Kelley A. Gorry, Esq. Rich & Gillis Law Group, LLC, 6400 Riverside Drive, Suite D, Dublin, Ohio 43017, Attorney for Appellee Board of Education of the Huber Heights City Schools, Mathias K. Heck, Jr. Montgomery County Prosecuting Attorney, Laura G.1Vlariani, Assistant Prosecuting Attorney, 301 West Third Street, P.O. Box 972, Dayton, Ohio 45422, Attorneys for Appellees Montgomery County Board of Revision and Montgomery County Auditor, and Mike Dewine, Esq., Attorney General State of Ohio, James A. Rhodes State Office Tower, 30 East Broad Street, 14 th Floor, Columbus, Ohio 43215, Attorney for Appellee Tax Commissioner of the State of Ohio, this 25th day of January ^^^r^`^^- x Andrew M. Ferris ( )

6 EXHIBIT A OHIO BOARD OF TAX APPEALS Board of Education of the Huber Heights City Schools, vs. Appellant, CASE NO K-2855 (REAL PROPERTY TAX) DECISION AND ORDER Montgomery County Board of Revision, the Montgomeiy County Auditor, and BEF REIT, Inc., APPEARANCES: Entered Appellees. For the Appellant - Kelley A. Goriy Rich & Gillis Law Group, LLC 6400 Riverside Dr., Suite D Dublin, Ohio For the County - Mathias H. Heck, Jr. Appellees Montgomeiy County Prosecuting Attortiey Laura G. Mariani Assistant Prosecuting Attorney 301 West Tliird Street P.O. Box 972 Dayton, Ohio For the Appeltee - Baker & Hostetler, LLP Property Owner Andrew M. Ferris Capitol Square, Suite East State Sti eet Columbus, Ohio DEC Ms. Margulies, Mr.. Johrendt, and Mr. `][Tilliamson- concur. Appellant filed the present appeal in order to challenge a decision of the Montgomery County Board of Revision ("BOR") in which a reduction was effected to the subject property, i.e., parcel number P , from the value originally established by the Montgome?y County Auditor ("auditor") for ad valorem tax purposes for tax year The parties waived hearing before this board, electing to inste.ad submit the matter upon the existing

7 record and their written argument, such argument having only been timely filed by appellant. We therefore proceed to consider this matter upon appellant's notice of appeal, its brief, and the transcript certified by the BOR pursuant to R.C For tax year 2009, the auditor assessed the subject property, improved as a restaurant, as follows: Land Building Total 'TRUE VALUE $481, $926,920 TAXABLE VALUE Land $168,410 Building $ Total $324,420 These proceedings were initiated by the appellee property owner, BEF REIT, Inc., through the filing of its complaint with the BOR in which it requested that the subject's total true value be reduced to $855,000 for the stated reason that the "[a]uditors [sic] value exceeds fair market value." Appellant filed a countercomplaint seeking retention of the auditor's assessed value. At the hearing convened before the BOR, only Lee H. Neushafer appeared and testified on behalf of the property owner,' indicating he had performed a"valuation analysis" of the property. His efforts suggested a value of $700,000,z predicated upon a sales comparison analysis, i.e., $674,000, and income capitalization analysis, i.e., $725,000. During cross-examination, Neushafer admitted not having inspected any of the properties to which the subject was compared, instead reviewing them exclusively through the Internet, and that the adjustments he 1 Appellant objected to Neushafer's presentation, asserting it was prohibited because he is not an attorney, an appraiser, or a member/officer of the property owner. Neushafer responded, acknowledging he is not a eertified appraiser, but noting he is a member of the International Association of Assessing Officers and a Certified Assessment Evaluator. 2 The BOR permitted the amendment of the complaint to comport with Neushafer's opinion. See, generally, Jones & Laughlin Steel Corp. rt>. Lucas Cty. Bd of Revision (1974), 40 Ohio St.2d 61, 63 (holding that a complaint filed with a county board of revision "places neither minimum nor maximum limitations on the court's determination of value, and there are none save the judicial requirement that the determination be supported by the evidence."); Cleveland Elec. Ilium. Co. v. Lake Cty. Bd of Revision (1998), 80 Ohio St.3d 591, 595 ("There is no requirement 2

8 effected, ranging up to 55%, were significant. Appellant offered no evidence of value, instead relying upon its counsel's critique of Neushafer's presentation. Thereafter, the BOR adjusted the subject's total value as follows: Land Buildiiig Total TRUE VALUE $481, $786,890 TAXABLE VALUE Land $168,410 Building Total $324,410 Appellant then filed the present appeal, asserting the BOR erred when it reduced the subject's value as the record lacks competent and probative evidence upon which to effect such adjustment? In appeals such as the present one, where parties waive the presentation of evidence on appeal, this board is obligated to independently review the record developed before a county board of revision. In Colutnbass Bd of Edn, v. Fi-anklin Cly. Bd of Revision (1996), 76 Ohio St.3d 13, the court emphasized the nature of the examination and analysis to be conducted, admonishing that our decision must not sirnply constitute a "rubber stamp" of a board of revision's decision: "The parties herein apparently waived presentation of fiuther evidence and agreed that only the evidence presented to the BOR was to be considered by the BTA. The situation faced by the BTA in this case is analogous to that faced by the cominon pleas court in Black v. Cuyahoga Cty. Bd. of Revision (1985), 16 Ohio St.3d 11 ***. The court in Black had before it an appeal from a board of revision under R.C , the alternative appeal provision to R.C The only evidence before the common pleas court was the pootnote contd. that the value of the property, as deteirnined by the board of revision, must match the opinion of value set forth in the complaint."). 3 Through its brief, appellant makes reference to notations/inaterials withui the transcript, suggesting that the adjustment in value may have been effected as a clerical error by the auditor, which is permissible under prescribed circumstances that are not present in this instance. See, generally, Sheldori Rd. Assoc., L.L.C. v. Caryahoga Cty. Bd of Revision, 131 Ohio St.3d 201, 2012-Ohio-581. It appears from the decision letter from whieh the present appeal was taken that it was the BOR, not the auditor, which effected the change in the subject's value, and given the par-ties' election to waive hearing, we will not engage in conjecture regarding the possible bases for such adjustment. Cf. Lakota Local School Dist. Bd of Edn, v. Butler Cty. Bd of Revision, 108 Ohio St.3d 310, 2006-Ohio

9 statutory transcript from the board of revision. We stated in Black that the common pleas court was not required to hold an evidentiary hearing or a trial de novo, but that the common pleas court `has a duty on appeal to independently weigh and evaluate all evidence properly before -it. The court is then required to make an independent determination concerning the valuation of the property at issue. The court's review of the evidence should be thorough and comprehensive, and should ensure that its final determination is more than a mere rubber stamping of the board of revision's determination.' Id. at ***. Our conclusion in Black was that R.C `contemplates a decision de novo.' (Emphasis sic.).id at 14 ***. "The duty of both the BTA and the common pleas court upon an appeal is to 'determine the taxable value of the property.' See R.C and We find that the BTA in this case is required to meet the standard enunciated in Black. Thus, if the only evidence before the BTA is the statutory transcript from the board of revision, the BTA must make its own independent judgment based on its weighing of the evidence contained in that transcript." Id, at 15. (Parallel citations omitted.) The court has reaffirmed the preceding directive, conunenting in Vandalia-Butler City School Dist. Bd of Edn. v. Montgomery Cty. Bd of Revision, 130 Ohio St.3d 291, Ohio-5078: "It is well settled that when the BTA reviews a board-of-revision decision based upon the record developed before that tribunal, the BTA. has the duty to "`independently weigh and evaluate all evidence properly before it"' in arriving at its own decision. Hilliard City Schools Bd of Edn. v. Franklin Ct,y. Bd of Revision, 128 Ohio St.3d 565, 2011-Ohio-2258, *** 17, quoting Columbus Bd. of Edn. v. Franklin Cty. Bd. ofrevision (1996), 76 Ohio St.3d 13, 15, * * * (BTA must reach its `own independent judgment based on its weighing of the evidence contained in [the BOR] transcript'). Equally well established is the proposition that `decisions of boards of revision should not be accorded a presunaption of validity.' Colonial Village, Ltd. v. Washington Cty. Bd. of Revision, 114 Ohio St.3d 493, 2007-Ohio-4641, *** 123, citing Columbus Bd. ofedn. at 15 and Springfield Local Bd of Edn. v. Summit Cty. Bd. of Revision (1994), 68 Ohio St.3d 493, 494, ***. 4

10 "Quite simply, the BTA's crucial error in this case lay in its exclusive reliance on the BOR's evaluation of the evidence rather than its own. " * In other words, even though the BTA itself was unpersuaded by the evidence, it adopted the BOR's reduction of value on the grounds that tlie BOR was persuaded. That constitutes the very deference that the case law prohibits." Id. at It is fundamental that an appellant before this board has an affirmative burden to prove the value claimed. See, e.g., Coltcmbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision (2001), 90 Ohio St.3d 564, 566 ("When cases are appealed from a board of revision to the BTA, the burden of proof is on the appellant, whether it be a taxpayer or a board of education, to prove its right to an increase [in] or decrease from the value determined by the board of revision."); EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1, 2005-Ohio In this instance, appellant did not present any evidence of value, choosing instead to rely upon its argument that the BOR committed reversible error in effecting a reduction in the subject's value apparently based upon the evidence submitted by the property owner. Clearly, appellant is entitled to adopt such an approach, see, e.g., Ifandalia-Butler City School Dist. Bd. of Edn. v. Montgomety Cty. Bd. of Revision, 106 Ohio St.3d 157, 2005-Ohio-4385, Vandalia-Butler City School Dist. Bd of Edn., supra, 130 Ohio St.3d 291, 2011-Ohio-5078, since a party is not entitled.to its claimed value merely because no evidence is adduced in opposition. W. Industries, Inc. v. Hamilton Cty. Bd. ofrevision (1960), 170 Ohio St. 340, 342. Typically, the "best evidence" of a property's value is the amount for which it transfers between two unrelated parties near tax lien date. See, e.g., Berea City School Dist. Bd. ofedn. v. Cuyahoga Cty. Bd. ofrevision, 106 Ohio St.3d 269, 2005-Ohio See, also, R.C However, as the Supreme Court has pointed out, "such information is not usually available, and thus an appraisal becomes necessary." State ex rel. Park Invest. Co. v. Bd. of.tax 5

11 Appeals (1964), 175 Ohio St. 410, 412. The subject property has not been recently sold and therefore it is expected that a parly will submit an appraisal by a qualified individual supportive of the "value claimed. See LTC Properties, Inc. v. Licking Cty. Bd, of Revision, Slip Opinion No Ohio-3930, 28 ("A11 property owners and their counsel know that they have a heavy burden to overcome when challenging a valuation. *** [I]f a corporate entity wants to challenge a valuation, it should send a certified appraiser or other qualified expert, not an employee, however experienced. It is well known that the only nonexperts competent to testify as to valuation are owners. Finally, the best way to challenge a valuation is with a proper appraisal, which was not submitted in this case." ). While a"valuation analysis" was offered on the property owner's behalf, we do not find it to be sufficiently supported or probative of value. Neushafer admitted not having undertaken those minimal steps fundamental to rendering an opinion of value. See, generally, Fi eslzwater v. Belmont Cty. Bd ofrevision (1997), 80 Ohio St.3d 26, 30 ("An expert's opinion of value in a tax valuation case is of little help to the trier of fact if the expert does not explain the basis for the opinion."). For example, with regard to his failure to review and effectively evaluate the properties to which the subject was compared, we have previously expressed criticism: 4 While appellant challenged Neushafer's ability to testify regarding the subject's value, we cannot necessarily conclude he would be incapable of expressing an opinion. See, generally, Olnzsted Falls Village Assn. v. Cuyahoga Cty. Bd of Revision (1996), 75 Ohio St.3d 552; Hampton Knolls Partnership v. Summit Cty. Bd of Revision (July 19, 1996), BTA No T-1269, unreported. Nevertheless, we consider it appropriate to refer to Tlie Appraisal of Real Esta.te ( 13" Ed. 2008), at 8, which recognizes a variety of professionals may be knowledgeable about appraisals, but "they are rarely trained appraisers. "- Continuing, this treatise states that "[i]n the United States licensed and certified real estate appraisers meet educational, experience, and testing requirements set by the state and can perform appraisals in the jurisdiction covered by their licenses or certifications. *** The types of properties that an individual can appraise depend on the type of license or certification that he or she holds. Licensed and certified real estate appraisers are required to meet continuing education requirements and must adhere to the Uniform Standards of Professional Appraisal Practice (USPAP) or risk disciplinary action, including possible loss of license. The Appraisal Institate and other professional organizations also create additional standards and ethical requirements for their members. These requirements are 6

12 "In order to effectively determine what reasonably constitutes `market' data for a particular property, it is essential to first have a thorough understanding of the one being appraised: `The importance of property inspection should not be underestimated. Much of the primary data an appraiser collects comes from the inspection process. Comparison of the subject and comparables is crucial for the sales coinparison and income capitalization approaches, and estimating building costs in the cost approach is impossible without an accurate inventory of the building components in the subject. In addition, comparison of the quality and condition of building components can be essential in inaking adjustments.' The Appraisal of Real Estate (12a' Ed. 2001), at 223." Ritnax, Inc. v. Cuyahoga Bd of Revision (Jan. 4, 2008), BTA No K-962, unreported, at 10. In reviewing the record, we find the BOR's determination to reduce the subject's value to be unsupported by competent and probative evidence. Under these circumstances, we are mindful of the court's pronouncement in Vandalia-Butler City School Dist. Bd. of Edn., supra, 106 Ohio St.3d 157, 2005-Ohio-4385: "ln the absence of probative evidence supporting the reduction in value ordered by the board of revision, and in light of the problems identified by the BTA with the even lower value proposed by the Tiunberlake appraiser, the BTA's conclusion that the county auditor's original valuation should be reinstated was not unreasonable. `In the absence of probative evidence of a lower value,' a county board of revision and the BTA `are justified in fixing the value at the amount assessed by the county auditor.' Salem Med. Arts & Dev, Corp. v. Colurnbiana Cty. Bd of Revision (1998), 82 Ohio St.3d 193, 195 ***. The BTA's decision to reject the board of revision's valuation and reinstate the auditor's original finding is supported by the evidence, and the BTA did not abuse its discretion in reaching that conclusion." Id. at 12. The court reiterated this holding in Yandalia-Butler City School Dist. Bd of Edn., supra, 130 Ohio St.3d 291, 2011-Ohio-5078, when it stated: "Even if some evidence tends to negate the auditor's original valuation, it is proper to revert to that valuation when the BTA fmds Footnote contd. intended to provide even higher protection of the public set-ued. by these proiessioreals " Id. at 8-9. (Footnote omitted.) 7

13 } that the owner has not proved a lower value and there is otherwise `no evidence from which the BTA can independently determine value.' (Emphasis added.) Simmons v. Cuyahoga Cty. Bd of Revision (1998), 81 Ohio St.3d 47, 49, Id. at 124. Accordingly, given the existing record, it is the decision of this board that the auditor's original valuation of the subject property as of January 1, 2009 must be, and hereby is, reinstated as set forth below: Land Building Total TRUE VALUE $481, $926,920 TAXABLE VALUE Land $168,410 Building $ Total $324,420 It is the order of this board that the Montgomery County Auditor list and assess the subject property in conformity with the decision as announced herein. I hereby certify the foregoing to be a true and complete copy of the action taken by the Board of Tax Appeals of the State of Ohio and entered upon its jouznal this day, with respect to the capfiorie"ci'x#^atter. ^!; AF.Vamn ter,board Secretary 8

14 EXHIBIT "B" ASSIGNMENT OF ERRORS ASSIGNMENT OF ERROR NO. 1: The Board of Tax Appeals' Decision and Order rejecting the unrebutted evidence of the property owner is unreasonable and unlawful. ASSIGNMENT OF ERROR NO. 2: The Board of Tax Appeals' Decision and Order rejecting the testimony of the property owners valuation expert is unreasonable, unlawful and arbitrary and fails to consider the scope and extent of the comparable sales and income method analysis presented. ASSIGNMENT OF ERROR NO. 3: The Board of Tax Appeals' Decision and Order is unreasonable and unlawful because the Board of Education failed to provide any evidence as to the fair market value of the property as of the tax lien date. ASSIGNMENT OF ERROR NO. 4: The Board of Tax Appeals' Decision and Order is unreasonable, unlawful and arbitrary because it ignores the competent and probative evidence provided by the property owner's valuation expert concerning the fair market value of the property as of the tax lien date. ASSIGNMENT OF ERROR NO. 5: The Board of Tax Appeals' vague and incomplete analysis and weighing of the evidence in the record divests the Ohio Supreme Court of the ability to review this case on appeal and as a result violates the property owner's right to due process and equal protection under the United States and Ohio Constitutions. ASSIGNMENT OF ERROR NO. 6: The Board of Tax Appeals' Decision and Order violates Article XII, Section 2 of the Ohio Constitution which requires that property must be taxed by uniform rule according to value.