Big Foot Stores v. Franklin Tp. Assessor
| Decision Date | 09 December 2009 |
| Docket Number | No. 49T10-0712-TA-76.,No. 49T10-0712-TA-77.,No. 49T10-0712-TA-75.,No. 49T10-0712-TA-74.,49T10-0712-TA-74.,49T10-0712-TA-75.,49T10-0712-TA-76.,49T10-0712-TA-77. |
| Citation | 919 N.E.2d 621 |
| Parties | BIG FOOT STORES LLC, Petitioner, v. FRANKLIN TOWNSHIP ASSESSOR, Mill Township Assessor, Pleasant Township Assessor, and Grant County Assessor, Respondents. |
| Court | Indiana Tax Court |
Timothy J. Vrana, Timothy J. Vrana LLC, Columbus, IN, Attorney for Petitioner.
Gregory F. Zoeller, Attorney General of Indiana, Andrew W. Swain, Chief Counsel, Tax Section, Jennifer E. Gauger, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.
Jon B. Laramore, Brent A. Auberry, Baker & Daniels LLP, Indianapolis, IN, Attorneys for Amicus Curiae, F/C Michigan City Development, LLC.
Big Foot Stores LLC (Big Foot) appeals from the Indiana Board of Tax Review's (Indiana Board) final determinations which upheld the 2003 interim assessments of its property by the Franklin Township Assessor, the Mill Township Assessor, the Pleasant Township Assessor, and the Grant County Assessor (hereinafter, "the Assessors").1 While Big Foot presents two issues for review, the Court consolidates and restates them as: whether the Indiana Board erred in upholding Big Foot's 2003 interim assessments.
During the 2003 tax year, Big Foot owned three convenience stores (with gasoline stations) and one office building in Grant County, Indiana. Two of the convenience stores were located in Marion (Franklin and Pleasant Townships); the other convenience store and the office building were located in Gas City (Mill Township).
On or about December 5, 2005, the Assessors issued "Notices of Assessment By Assessing Officer" (Form 113s) for the 2003 tax year. The Form 113s provided that Big Foot's properties were reassessed because the properties' sales disclosure forms caused the Assessors to believe that these properties were undervalued.2 (See Cert. Admin. R74 at 71; Cert. Admin. R75 at 69; Cert. Admin. R76 at 73; Cert. Admin. R77 at 74 (footnote added).)
On January 13, 2006, Big Foot filed four Petitions for Review (Form 130s) with the Grant County Property Tax Assessment Board of Appeals (the PTABOA), alleging that the 2003 interim assessments were not uniform and equal. Accordingly, Big Foot requested that the properties' 2002 assessments be reinstated. On June 19, 2006, the PTABOA denied each of Big Foot's Form 130s.
On July 17, 2006, Big Foot filed four Petitions for Review (Form 131s) with the Indiana Board. On July 26, 2007, the Indiana Board held a joint hearing on the matter. Big Foot once again requested that its 2002 assessments be reinstated because it believed that the interim assessments were not only not uniform or equal, but unauthorized as well. On October 25, 2007, the Indiana Board issued its final determinations upholding the interim assessments in their entirety. More specifically, the Indiana Board determined that the Assessors' interim assessments were authorized under Indiana Code § 6-1.1-9-13 and then concluded that because Big Foot failed to present any probative evidence as to the actual market values-in-use of its properties, the Assessors' interim assessments should be upheld. (See Cert. Admin. R74 at 27-30 ¶ 13; Cert. Admin. R75 at 24-28 ¶ 14; Cert. Admin. R76 at 27-30 ¶ 14; Cert. Admin. R77 at 27-30 ¶ 14 (footnote added).)
On December 5, 2007, Big Foot initiated four original tax appeals. On January 23, 2008, the parties moved to have the appeals consolidated pursuant to Indiana Appellate Rule 38(B); the Court subsequently granted their motion.4 The Court heard the parties' oral arguments on November 21, 2008. Additional facts will be supplied as necessary.
When this Court reviews a final determination of the Indiana Board it is limited to determining whether it is:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(2) contrary to constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory jurisdiction, authority, or limitations;
(4) without observance of procedure required by law; or
(5) unsupported by substantial or reliable evidence.
IND.CODE ANN. § 33-26-6-6(e)(1)-(5) (West 2009). The party seeking to overturn the Indiana Board's final determination bears the burden of proving its invalidity. Osolo Twp. Assessor v. Elkhart Maple Lane Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct.2003).
On appeal, Big Foot asserts that the Indiana Board erred in upholding the 2003 interim assessments of its real property for two reasons. First, Big Foot asserts that interim assessments may be made only when there has been a change to the property that increases or decreases its value. (See Pet'r Br. at 6-16.) Alternatively, Big Foot asserts that its interim assessments were improper because they were essentially the result of "sales chasing," "selective reappraisals," or "spot assessments."5 (See Pet'r Br. at 16-21 (footnote added).) The Court will address these claims in turn. Authority to reassess in the interim
Big Foot contends that the interim assessments of its property were improper, as neither the physical state nor the actual use of the properties changed since their 2002 assessments. (See Pet'r Br. 6, 16.) As a result, Big Foot claims that its properties' 2002 assessed values should have been carried forward to the 2003 tax year. (See Pet'r Br. at 16.) In contrast, the Assessors maintain that the interim assessments were authorized under Indiana Code § 6-1.1-9-1, given that the sales disclosure forms had caused them to believe that the properties were undervalued. (See Resp'ts Br. at 5-7; Oral Argument Tr. at 20-23.) The Court agrees with the Assessors.
On May 14, 2009, this Court issued a decision in which it explained that Indiana's overhauled property tax assessment system recognized (albeit, implicitly) that market trends could affect the value of real property. See Charwood LLC v. Bartholomew County Assessor, 906 N.E.2d 946, 951 (Ind. Tax Ct.2009). Accordingly, the Court held that a local assessing official's interim assessments were authorized under Indiana Code § 6-1.1-9-1, despite the fact that none of the properties had experienced physical changes or changes in use. See id. at 949-51. The holding of that case is equally applicable in this case. The Court therefore finds that the Indiana Board did not err when it determined that the Assessors' interim assessments were authorized under Indiana Code § 6-1.1-9-1.
Next, Big Foot contends that the Indiana Board erred in upholding these interim assessments, as the Assessors "admitted" that they were actually "spot assessments:" the Assessors agreed that while there were approximately 40-50 convenience stores throughout Grant County in 2003, Big Foot's stores were the only ones to be reassessed because they had been sold. (See Pet'r Br. at 20-21 (citations omitted).) In turn, Big Foot maintains that these "spot assessments" should be rejected because the assessing community generally recognizes that engaging in such "`practice[s] is unprofessional in that it breeds inequities and, unless adjusted for, renders sales ratio studies invalid.'"6 (Pet'r Br. at 16-17 (quoting INTERNATIONAL ASSOCIATION OF ASSESSING OFFICERS, MASS APPRAISAL OF REAL PROPERTY 396, 397 (1999) (footnote added)).) Accordingly, Big Foot asks that the Indiana Board's final determinations be reversed and that its 2002 assessments be reinstated.
The Assessors, on the other hand, assert that Big Foot has not demonstrated that it is entitled to the relief it seeks. Indeed, while the Assessors agree that spot assessments are highly disfavored within the assessing community and this State, they assert that they did not selectively reassess Big Foot's property. (See Oral Argument Tr. at 22-24.) Rather, claim the Assessors, they adjusted Big Foot's assessments as a result of Big Foot's filing of its 2003 assessment appeals, a risk that Big Foot opened itself up to, given the fact that the sales disclosure forms plainly showed that Big Foot's property was undervalued.7 (See, e.g., Cert. Admin. R74 at 185, 189-90; Oral Argument Tr. at 22-24 (footnote added).) In any event, the Assessors argue that to the extent Big Foot has merely attacked their methodologies and not offered any probative evidence (such as a sale ratio study or a market value-in-use appraisal) which would have demonstrated that their interim assessments either lacked uniformity or did not reflect the properties' actual market values-in-use, the Indiana Board's final determinations were proper. (See Resp'ts Br. at 12-16.)
Whether the interim assessments of two recently sold classes of property (i.e., convenience stores and office buildings) may be upheld when unsold properties of the same classifications and within the same taxing jurisdiction were not reassessed is one of first impression in Indiana. The Court, however, saves its analysis of that issue for another day, as the case at bar can be resolved on other grounds.8
During the administrative hearing, the Assessors presented both testimonial and documentary evidence which established that the properties' 2003 assessed values were, for the most part, equivalent to their 2002/2003 sale prices as recorded on the sales disclosure forms, less the value of the personal property transferred in conjunction with the sales.9 (See Cert. Admin. R74 at 93-95, 172-84; Cert. Admin. R75 at 90-91; Cert. Admin. R76 at 99-101; Cert. Admin. R77 at 100-02 (footnote added).) This Court has previously explained that evidence of a property's market value-in-use must reflect the property's value as of the appropriate valuation date. See, e.g., O'Donnell v. Dep't of Local Gov't Fin., 854 N.E.2d 90, 95 (Ind. Tax Ct.2006); Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471-72 (Ind. Tax Ct.2005), review denied. The appropriate valuation date for the 2003 tax year...
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