IN THE SUPREME COURT OF OHIO BRIEF OF APPELLEE CANNATA, JILL K. TRUSTEE

Transcription

1 . IN THE SUPREME COURT OF OHIO Cannata, Jill K. Trustee, CASE NO Appellant, vs. Cuyahoga County Board of Revision, the Cuyahoga County Fiscal Officer, Orange City School District Board of Education, and the Tax Commissioner of Ohio, Appeal from the Ohio Board of Tax Appeals BTA Case No Appellees. BRIEF OF APPELLEE CANNATA, JILL K. TRUSTEE J. Kieran Jennings ( ) Counsel of Record Jason Lindholm ( ) Deborah Papushak ( ) Siegel Jennings Co. LPA Commerce Park Drive, Suite 103 Cleveland, OH (216) (216) (fax) Counsel for Appellee Cannata, Jill K. Trustee Kevin Hinkel ( ) Rita Jarrett ( ) John P. Desimone ( ) Kadish, Hinkel & Weibel 1360 East Ninth Street, Suite 400 Cleveland, OH (216) (fax) Counsel for Appellant Orange City School District Board of Education -^--' ^; E-; ^ ;r,^^ : ^; 5 z `y' {, ^ f r,.. f ; G ^ ^.... ' S,.,, is. i,5 %i' ^.ig...c..% +^ '^'-,,;3(^ni^i'^f^ S a.il.^` ^-....:'S" ^:^ ^.^ _...,,,^.,»...^.^.,.,..f-,,..y..,.

2 Mark Greenfield ( ) Cuyahoga County Assistant Prosecutor 1200 Ontario Street 8th Floor Cleveland, OH (216) (216) (fax) Counsel for Appellants Mark Parks, Jr., Cuyahoga County Fiscal Officer and Cuyahoga County Board of Revision Richard Michael DeWine ( ) Ohio Attorney General 30 E. Broad Street, 17th Floor Columbus, OH (614) (614) (fax) Counsel for Appellee Joseph W. Testa, Tax Commissioner of Ohio

3 TABLE OF CONTENTS Description Table of Authorities Cited Statement of Facts Law and Argument Taxpayer's Proposition of Law No. 1 Page No. i THE BOARD OF TAX APPEALS SOUNDLY EXERCISED ITS DISCRETION AND ADOPTED THE VALUATION OF THE TAXPAYER'S EXPERT APPRAISER. Taxpayer's Proposition of Law No. 2 8 THE BOARD OF TAX APPEALS CORRECTLY CONCLUDED THAT THE 2009 VALUE DETERMINED SHOULD CARRY FORWARD TO TAX YEARS PROCEDURALLY VALID COMPLAINTS IN A TRIENNIAL CUT OFF THE CARRY FORWARD EFFECT OF THE FIRST COMPLAINT FOR WHICH VALUE IS DETERMINED IN THE TRIENNIAL. CONCLUSION CERTIFICATE OF SERVICE APPENDIX BOR decision dismissing 2011 Complaint A-1 A-1

4 TABLE OF AUTHORITIES Cases AERC Saw Mill Village, Inc. v. Franklin Cty. Bd. ofrevision, 2010-Ohio-4468, 127 Ohio St.3d 44, 936 N.E.2d 472 (Ohio 2010)... 8 APHotels ofillinois, Inc. v. Franklin Cty. Bd. ofrevision, 2008-Ohio-2565, 118 Ohio St.3d 343, 889 N.E.2d 115 (Ohio 2008)... 6 Apple Group Ltd. v. Medina County Board ofrevision, 2014-Ohio-2381, 139 Ohio St.3d 434, N.E.2d_(Ohio 2014)... 4, 10, 11 Cleveland Mun. School Dist. Bd. ofedn. v. Cuyahoga Cty. Bd. ofrevision, 105 Ohio St. 3d 404, 827 N.E. 2d 306, 2005-Ohio :... 9, 11 Colonial Village Ltd. v. Washington Cty. Bd. ofrevision, 2007-Ohio ,6 Elkem Metals Co., Ltd. Partnership v. Washington County Bd. of Revision, 1998-Ohio-601, 81 Ohio St.3d 683, 693 N.E.2d 276 (Ohio 1998)... 10,11 Fogg Akron, 124 Ohio St.3d 112, 2009-Ohio-6412, 919 N.E.2d ,11 Hilliard City Sch. Bd. of'educ. v. Franklin County Bd. ofrevision, 2014 Ohio Tax LEXIS 2023 (Ohio B.T.A., Mar. 31, 2014) Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. ofrevision, 2011-Ohio-2258, 128 Ohio St.3d 565, 949 N.E.2d 1(Ohio 2011)... 6 Statutes R.C R.C (A)(2)... 9, 10, 11 R.C (D)... $,, 10, 11 1.

5 IN THE SUPREME COURT OF OHIO Cannata, Jill K. Trustee, CASE NO Appellant, vs. Cuyahoga County Board of Revision, the Cuyahoga County Fiscal Officer, Orange City School District Board of Education, and the Tax Commissioner of Ohio, Appeal from the Ohio Board of Tax Appeals BTA Case No Appellees. BRIEF OF APPELLEE, CANNATA, JILL K. TRUSTEE STATEMENT OF FACTS This cause originated when Appellant, Jill K. Cannata, Trustee ("Taxpayer") filed a tax year 2009 complaint with the Cuyahoga County Board of Revision ("BOR") seeking a reduction in the valuation of her home for real estate tax. purposes. The Orange City School District Board of Education ("BOE") filed a counter complaint seeking to retain the Fiscal Officer's valuation for The property at issue is a single family residence located at Hillbrook Drive, Hunting Valley, Ohio, and identified as Cuyahoga County Permanent Parcel Number ("Subject Property"). For tax year 2009, the Fiscal Officer had valued the Subject Property at $858,600. The complaint and counter complaint were scheduled for hearing before the BOR on September 30, The Taxpayer and BOE were represented by counsel at the

6 hearing. The Taxpayer's counsel was her spouse and a resident of the Subject Property. 1 The Taxpayer submitted the appraisal report and testimony of Julian Vanni, GRI, CRA, who had appraised the property as of tax lien date and determined a value of $330,000. Counsel for the BOE submitted a list of unadjusted sales of properties in Hunting Valley. The BOR also obtained a report of comparable sales and placed it into the Statutory Transcript. Counsel for the BOE was present at the BOR hearing and had the opportunity to cross-examine Mr. Vanni. (Appellee's Supplement (hereafter "ASupp"), 20. The BOR issued its decision on January 19, 2011 retaining the Fiscal Officer's value for The Taxpayer appealed to the Ohio Board of Tax Appeals ("BTA") which scheduled the matter for hearing on November 15, Counsel for the Taxpayer, who appeared at the BTA hearing, submitted a copy of the Vanni appraisal submitted to the BOR. Taxpayer's counsel is also a resident of the Subject Property and was available for questioning by the BTA Hearing Examiner. No audio transcript from the BOR was available, although the Statutory Transcript was part of the BTA record, which included Mr. Vanni's appraisal (ASupp, 1-19). Neither counsel for the BOE nor the BOR appeared at the hearing before this Board. By the time of the BTA hearing, the Taxpayer had filed Complaints for tax years 2010 and 2011, the second and third years of the Cuyahoga County triennial beginning with Neither the 2010 nor 2011 complaint identified any circumstances on Line 14 of the complaint form to explain the nlultiple filing during the triennial. The Taxpayer's 2010 Complaint had been dismissed as an unlawful second filing on March 12, (Appellant's Supplement (hereafter "Supp"), Current counsel was not engaged until after the matter was pending in this Court. 2

7 7p) The 2011 complaint was ultimately dismissed for the same reason on February 25, Neither the County Appellees nor the BOE appeared at the BTA hearing. They submitted no evidence for consideration by the BTA and made no effort to obtain the testimony of Mr. Vanni for use at the BTA. No arguments of any kind were advanced before the BTA by either of the Appellants herein relative to the valuation of the subject property. The only action taken by either Appellant at the BTA was the BOE's filing of a motion requesting that the BTA refuse to carry forward the valuation determined for tax year 2009 to tax years 2010 and 2011, arguing that the carry forward was cut off by the jurisdictionally defective complaints filed for tax years 2010 and The BTA issued its Decision and Order on May 9, The BTA overruled the BOE's Motion to limit its decision to tax year The BTA found Mr. Vanni's value conclusions to be "reasonable and well-supported" and adopted his conclusion of value of $330,000 for the Subject Property. The BOE and County brought this appeal to the Ohio Supreme Court and have filed a Joint Brief asserting two propositions of law. This is the Brief of the Taxpayer. LAW AND ARGUMENT TAXPAYER'S PROPOSITION OF LAW NO. 1: THE BOARD OF TAX APPEALS SOUNDLY EXERCISED ITS DISCRETION AND ADOPTED THE VALUATION OF THE TAXPAYER'S EXPERT APPRAISER. Appellants frame the issue as follows: 2 The 2011 Complaint was dismissed on February 25, 2013 (Appendix, -A-1) after the BTA hearing in this matter and the dismissal is not part of the record. However, all parties agree that the Complaint was jur.isdictionally defective as an impermissible filing under R.C. 5715(A)(2).

8 "The issue presented to this Court is whether the BTA may summarily reverse a decision by the BOR and accept a party's evidence of value where this same evidence was rejected by the BOR and no new evidence was presented to the BTA." (Appellant's Brief, p. 4) Essentially, Appellants assert that the BOR determination must be accorded a presumption of validity and that the BTA has no discretion to re-evaluate the evidence submitted to the BOR. This proposition is unfounded and contrary to the expressions of this Court that hold that the BTA has an obligation to re-evaluate the evidence presented to the BOR. This Court recently articulated this obligation in Apple Group Ltd. v. Medina County Board ofrevision, 2014-Ohio-2381, 139 Ohio St.3d 434, N.E.2d (Ohio 2014), at 16: "... when the record contains evidence negating the auditor's valuation, the BTA must determine whether there is sufficient evidence to allow an independent valuation of the property. If there is sufficient evidence, the BTA must perform an independent valuation; if the evidence is not sufficient, the BTA may revert to the auditor's valuation." (citing from Colonial Village, Ltd. v. Washington Cty. Bd. ofrevision, 123 Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d 1196, 23-25) (Emphasis added.) "...[D]ecisions of boards of revision should not be accorded a presumption of validity. Columbus Bd. of Eda-a. v. Franklin Cty. Bd, ofrevision ( 1996), 76 Ohio St.3d 13, 15, 665 N.E.2d 1098; Springfield Local Bd. ofedn. v. Summit Cty. Bd. of Revision ( 1994), 68 Ohio St.3d 493, 494, 628 N.E.2d The BTA must 'independently weigh and evaluate all evidence properly before it' in order to 'make an independent determination concerning the valuation of the property at issue.' Columbus Bd. of Edn., 76 Ohio St.3d at 16, 665 N.E.2d 1098, quoting Black v. Cuyahoga Cty. Bd. ofrevision (1985), 16 Ohio St.3d 11, 13, 16 OBR 363,475 N.E.2d Colonial Village Ltd. v. Washington Cty. Bd. ofrevision, 2007-Ohio-4641, 114 Ohio St.3d 493, 873 N.E.2d 298 (Ohio 2007), 24. (Emphasis added.) The BTA may 4

9 not adopt the decision of the BOR unless its independent determination supports that result. vandalia-butler City Schools Bd. of Edn.. v. MontogomeYy Cty. Bd. of Revision, 2011-Ohio-5078, 130 Ohio St.3d 291, 958 N.E.2d 131 (Ohio 2011), T21. At the hearing before the BOR, the Taxpayer submitted the appraisal report and testimony of an expert appraiser, Julian Vanni, who opined a value of $330,000 for the Subject Property for tax year Mr. Vanni's appraisal report used the cost and sales comparison approach to value, which derived similar conclusions of value ($331,600 via the cost approach; $330,000 via the sales comparison approach) (ASupp,3 "-). He adopted the value via the sales cognparison approach as his final value based upon his opinion that "tlie sales conaparison analysis is the best indicator of value for residential property and best reflects the actions of the typical buyer and seller in the marketplace." (ASupp-3) In his sales comparison approach to value, Mr. Vanni considered sales of four comparable properties and identified adjustments in his report. (ASupp, 3-4) Although there was no audio hearing tape from the BOR to provide additional infonnation he may have provided concerning those adjustments, the adjustments are identified and quantified in his report. (ASupp-3-4) Appellant's reliance upon Board ofeducation of the Columbus City Schools v. Franklin Cty. Bd. ofrevision the Franklin Cty. Auditor, and Donwalter Investments, BTA No , 2013 Ohio Tax LEXIS 4767 (Oct. 2, 2013) is misplaced. In that case, the appraiser used an average of his comparable sales because he believed that adjustments to the sales considered were "difficult if not impossible." Id., p. 6. 5

10 Mr. Vanni's appraisal is "evidence negating the Fiscal Officer's valuation." The BTA reviewed the appraisal report of Mr Vanni and concluded that his value conclusions were "reasonable and well supported." BTA Decision and Order, p. 3. Appellants seek to establish a blanket rule that the BTA cannot adopt the opinion of an appraiser without hearing his testimony. This assertion is also without merit and has already been rejected by this Court. This Court has adopted evidence from an appraisal report where the appraiser has not testified. Hilliard City Schools Bd. ofedn. v. Franklin Cty. Bd. ofrevision, 2011-Ohio-2258, 128 Ohio St.3d 565, 949 N.E.2d 1(Ohio 2011), 27,34. Even without Mr. Vanni's testimony, the appraisal contains ample evidence for the BTA's use in conducting its independent evaluation. See, Colonial Village Ltd., supra, 24; AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. ofrevision, Ohio-2565, 118 Ohio St.3d 343, 889 N.E.2d 115 (Ohio 2008), Appellants make the unsupported statement that the appraisal of Mr. Vanni was evidence "for which no foundation was laid and to which no expert witness testified." (Appellant's Brief, p. 6). This statement is incorrect. W. Vanni's report and testimony were properly submitted to the BOR and supported and authenticated by the testimony of Mr. Vanni at the BOR. The BTA has the discretion to determine an appeal based upon the record established in the BOR. (R.C ) In this case, the BTA had the written Statutory Transcript from the BOR, which included Mr. Vanni's appraisal, and the Taxpayer's counsel (who is also the spouse of the owner and a resident at the Subject Property) available at the BTA hearing to make arguments and answer questions posed by the Hearing Examiner. Notably absent from the Joint Brief of the Appellants is any proof or even specific allegations of fault with the data, findings or conclusions of Mr. Vanni. Instead, 6

11 Appellants use the absence of the audio tape as an opportunity to insinuate that the appraiser did not make adjustments in his sales comparison approach to value. However, that insinuation is contradicted by the appraisal report which clearly identifies the quantitative adjustments made to each sale. They also insinuate that the BOR rejected the appraisal evidence because of a lack of adjustments to sales comparables even though the BOR did not articulate any basis for rejecting the appraisal evidence submitted in either its decision or hearing notes. (ASupp-20) Even if the BOR had articulated the basis for its rejection of Mr. Vanni's opinion of value, the BTA would still have been under a duty to independently review that appraisal evidence and reach its own conclusions as to its reliability. No evidence in support of the Fiscal Officer's value adopted by the BOR was provided by either the County Appellees or the BOE at the BTA hearing, nor did they subpoena Mr. Vanni to testify at the BTA hearing which they could have done had they had any evidentiary basis to support their insinuations with evidence. Furthermore, Appellants made no objection to the BTA proceeding to the merits without benefit of the BOR's audio tape. This Court has consistently held that the BTA has a responsibility to independently review the evidence submitted to the BOR and determine value. In the case at bar, the evidence is a straightforward appraisal of a residential property prepared and certified by a state-licensed appraiser who frequently appears before the BTA. It is complete and constitutes a body of evidence that the BTA can and must consider. The BTA soundly exercised its discretion in conducting an independent review of that appraisal and adopting the value it determined. 7

12 TAXPAYER'S PROPOSITION OF LAW NO. 2: THE BOARD OF TAX APPEALS CORRECTLY CONCLUDED THAT THE 2009 VALUE DETERMINED SHOULD CARRY FORWARD TO TAX YEARS 2010 and ONLY THE SUBSEQUENT FILING OF PROCEDURALLY VALID COMPLAINTS IN A TRIENNIAL CUT OFF THE CARRY FORWARD EFFECT OF THE FIRST COMPLAINT FOR WHICH VALUE IS DETERMINED IN THE TRIENNIAL. In this proposition of law, Appellants seek to overturn this Court's pronouncements that only the filing of a procedurally valid complaint will cut off the carry forward effect of a decision rendered determining the value of property for the first year of a triennium. R.C (D) provides: "(D) The determination of any such complaint shall relate back to the date when the lien for taxes or recoupment charges for the current year attached or the date as of which liability for such year was determined. Liability for taxes and recoupment charges for such year and each succeeding year until the complaint is finally determined and for any penalty and interest for nonpayment thereof within the time required by law shall be based upon the determination, valuation, or assessment as finally determined." The cited provision of R.C (D) is known as the "carry forward" provision of R.C (D). The complaint at issue in this appeal is a tax year 2009 complaint is the first year in a triennial period for Cuyahoga County. Under R.C (D), the valuation as finally determined in this appeal will carry forward for each succeeding year until "... the auditor is not under a separate statutory duty to adjust the value assigned to the property,... " or, "... the filing of a valid new complaint." AERC Saw Mill Village, Inc. v. Franklin Cty. Bd. ofrevi,sion, 2010-Ohio-4468, 127 Ohio St.3d 44, 936 N.E.2d 472 (Ohio 2010), 24, 31.

13 Under this analysis, the longest period that this 2009 complaint can have a carryforward effect is through tax year 2011 because tax year 2012 was the reappraisal year for Cuyahoga County. In this case, the Taxpayer filed complaints for tax years 2010 and 2011 which were jurisdictionally deficient complaints under R.C (A)(2) which provides: "No person, board, or officer shall file a complaint against the valuation or assessment of any parcel that appears on the tax list if it filed a complaint against the valuation or assessment of that parcel for any prior tax year in the same interim period, unless the person, board, or officer alleges that the valuation or assessment should be changed due to one or more of the following circumstances that occurred after the tax lien date for the tax year for which the prior complaint was filed and that the circumstances were not taken into consideration with respect to the prior complaint... The Complaints filed by the Taxpayer for 2010 and 2011 did not allege or provide proof of one of the circumstances enumerated by statute and were dismissed by the Board of Revision. Appellants assert that the filing of these jurisdictionally defective complaints cut off the carry-forward effect of the 2009 decision. In making this assertion, Appellants ignore this Court's pronouncements to the contrary. In Cleveland Mun. School Dist. Bd. o, f Edn. v. Cuyahoga Cty. Bd. of Revision, 105 Ohio St. 3d 404, 827 N.E. 2d 306, 2005-Ohio-2285 ("Royal"), this Court specifically held that the filing of jurisdictionally defective subsequent year complaints which were ultimately dismissed, did not affect the carrying forward of the first complaint. The facts in the Royal case were that a 1994 Complaint was "finally decided" by the BTA in In calendar year 2000, the Taxpayer filed tax year 1997 and 1998 Complaints. These complaints were jurisdictionally defective because they could only have been valid if filed in 1998 and 1999, respectively. The Board of Revision heard the jurisdictionally defective 1997 and 1998 complaints. On appeal to the Board of Tax Appeals, the Board of Revision's decision was reversed and the BTA ordered the 9

14 dismissal of 1997 and 1998 Complaints. Id., 23. This Court affirmed the BTA reversal and said that, despite the fact that the jurisdictionally defective 1997 and 1998 complaints were filed and dismissed, the 1994 decision still carried forward to 1997 and Id. Since the Royal case, this Court has consistently ruled that only the filing of a RroceduYally valid complaint will cut off the carry forward effect of the first complaint in a triennial period.... As Fogg's counsel explicitly acknowledged at oral argument, we have held that the filing of a" fresh complaint" -in this case, the filing of the current complaint specifically pertaining to tax year 2005-terminates the continuation of an earlier complaint, as long as the new complaint is procedurally valid., citing Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. ofrevision (1996), 74 Ohio St.3d 639, 643, 660 N.E.2d Fogg-Akron, 124 Ohio St.3d 112, 2009-Ohio-6412, 919 N.E.2d 730, 10. Most recently, in Apple Group Ltd., supra, this Court reiterated, i 30}...[W]e have held that the filing of a`fresh complaint' * * * terminates the continuation of an earlier complaint, as lona as the new complaint is procedurallv valid". (Emphasis added.) In most instances, including the case at bar, the BTA applies the rule as enunciated by this Court. See, Hilliard City Sch. Bd. ofeduc. v. Franklin County Bd. of Revision, 2014 Ohio Tax LEXIS 2023 (Ohio B.T.A., Mar. 31, 2014) Appellants have cited two cases in which the BTA erroneously determined that a procedurally deficient complaint cuts off the carry-forward effect of the first, valid complaint in the triennial. However, these cases, contrary to this Court's pronouncements, are not reliable authority. The BTA made the appropriate ruling in this case. Appellants also attempt to confuse the carry-forward provisions of R,C (D) with the second filing provisions of R.C (A)(2) by relying on Elkem Metals Co., Ltd. Partnership v. Washington Countv Bd, ofrevision, 1998-Ohio-601, 81 Ohio St.3d 683, 693 N.E.2d 276 (Ohio 1998). Elkem Metals construed R.C. 10

15 (A)(2). It did not construe R.C (D) and cannot be relied upon as authority for the interpretation of R.C (D). Elkem Metals and its progeny address the question of whether a subsequent complaint in a triennial is a permissible filing. They do not address the issue of the carry forward effect of the first complaint in a triennial. That issue was addressed by Royal, Fogg and Apple Group. The BTA correctly followed the law as enunciated by this Court. CONCLUSION Appellants are seeking a departure from established caselaw in both of their propositions of law in this appeal and have asserted no grounds to justify such departure. For all of the foregoing reasons, the Decision and Order of the BTA should be affirmed. Respectfully submitted, J. ' ran J` ings, ( ) Counsel of Record Ja on Lind m ( ) e `orah P pushak ( ) S^gel Jennings Co., LPA Commerce Park Drive, Suite 103 Cleveland, OH Tel: (216) Fax: (216) kjennings@siegeltax.com jlindholma siegeltax.com dpapushak@siegeltax.com Counsel for Appellee Cannata, Jill K. Trustee 11

16 CERTIFICATE OF SERVICE This is to certify that on this day of November, 2014, a copy of the foregoing Brief was sent via and regular U.S. mail, postage prepaid to: Kevin Hinkel Rita Jarrett Kadish, Hinkel & Weibel 1360 East Ninth Street, Suite 400 Cleveland, OH Mark Greenfield Cuyahoga County Assistant Prosecutor 1200 Ontario Street 8th Floor Cleveland, OH Michael DeWine Ohio Attorney General 30 E. Broad Street, 17tb Floor Columbus, OH

17 CUYAH^^^ ^^UNT^.' BOARD OF iisi+qn Coun ty Administration Building 1213 Ontario Street, Room 222 CleveIand, Ohio (216) / Ohio Relay Senice 711!(216) (fax) Fekrniary 25, 2013 C'.ama#a, Jill K. Trustee lillbrook Road Hundng Valley, Ohio Dear Complainant: Re: Complaint No, Counter C^mplaiilt No (Orange City Scboo3 District) Parcei 1~1o Jaurnal NTo. A Sk} eet complaint is dismissed for Iack ofjurisdiction puysuatitlo R.C. 5715,19(A)(2) (seconcl fiaing in a triennium without an exception selected in Secdon 14 of the Con^^laint). Research shuws that a decision was issued on January 19, fantler Journal92b-l 1for tax year ?78. 4 Z a: > ^ ^'^ c" ^p^ t^ r+, i 7p DMCI # ^ D F > ti tp ii v1 o C 0 ri A$ r.o! Wh r CD C^ 6 rxs Ya+ ^yy L+ ^' 0 r'.) r1l ^ 1^ ^.) i.j^iw 33+L Certified Mail Cc: Sam P. Cannata, Esq Kevin IvS.1-linlcel, Esq A-1