Buckeye Hospitality Dupont, LLC v. O'Day
| Decision Date | 28 February 2020 |
| Docket Number | Case No. 19T-TA-00011 |
| Citation | 144 N.E.3d 850 |
| Parties | BUCKEYE HOSPITALITY DUPONT, LLC, nka Sandpiper Fort Wayne LLC, Petitioner, v. Stacey O'DAY, in her official capacity as Allen County Assessor, Respondent. |
| Court | Indiana Tax Court |
ATTORNEY FOR PETITIONER: PAUL M. JONES, JR., PAUL JONES LAW, LLC, Greenwood, IN
ATTORNEYS FOR RESPONDENT: MARK E. GIAQUINTA, SARAH L. SCHREIBER, HALLER & COLVIN, PC, Fort Wayne, IN
Indiana's property tax cap statutes provide taxpayers with credits against their Indiana property tax liabilities. See, e.g., IND. CODE § 6-1.1-20.6-7.5 (2020). The amount of the credit depends on, among other things, a property's classification (e.g., homestead, residential, agricultural, or nonresidential) and its overall gross assessed value. See I.C. § 6-1.1-20.6-7.5. Buckeye Hospitality Dupont, LLC n/k/a Sandpiper Fort Wayne, LLC's ("Buckeye") claims that the Indiana Board erred in upholding the classification of its real property as nonresidential and applying the 3% tax cap credit for the 2013 through 2016 tax years (the "years at issue"). Upon review, the Court affirms the Indiana Board's final determination.
During the years at issue, Buckeye owned a four-story building that contained 124 private rooms and was situated on approximately two acres of land in Fort Wayne, Indiana.1 (See Cert. Admin. R. at 73, 77-82, 669-80, 717 ¶ 5.) Each room had an independent entrance from either the building's exterior or its interior public hallways and contained a private bathroom, nightstand, dresser, and color television with cable service. (See Cert. Admin. R. at 73, 717 ¶ 5.) Each room also contained a dining table with two chairs and a kitchenette with a full-sized refrigerator/freezer, two-burner stovetop, and microwave oven. (See Cert. Admin. R. at 73, 717 ¶ 5.)
Individuals stayed at Buckeye's property for varying lengths of time. (See Cert. Admin. R. at 73, 668, 717 ¶ 6.) Buckeye did not require any guests to sign a lease to stay at its property. (See Cert. Admin. R. 668, 717 ¶ 6.) Most guests stayed for fewer than 30 days, but some stayed for 30 days or more ("long-term guests") during the years at issue. (See Cert. Admin. R. at 73-74, 668, 717 ¶ 6.) Buckeye did not reserve specific rooms or any of the property's public areas for the exclusive use of its long-term guests. (See Cert. Admin. R. at 74, 668, 717 ¶ 6.) Accordingly, all of Buckeye's guests had equal access to the property's amenities, including wi-fi, laundry facilities, and the parking lot. (See Cert. Admin. R. at 74, 668, 717 ¶ 6.)
The Allen County Assessor assigned Buckeye's property a gross assessed value of $1,725,800 for 2013, $1,784,000 for 2014, $1,872,000 for 2015, and $1,965,000 for 2016. (See Cert. Admin. R. at 77-82, 669-80.) The Assessor classified the property as nonresidential property and applied the 3% tax cap credit to Buckeye's overall gross assessed value for each of those years. (See Cert. Admin. R. at 77-82, 668-81.)
Believing the Assessor erred in classifying all of its property as nonresidential, Buckeye filed "Petitions for Correction of Error" ("Forms 133") with the Allen County Auditor for the 2013 tax year on May 12, 2017, and for the 2014 through 2016 tax years on July 17, 2017. (See, e.g., Cert. Admin. R. at 1, 6, 12, 18.) Buckeye claimed that the portion of its property annually occupied by long-term guests should have been classified as residential property and assigned the 2% tax cap credit for the years at issue. (See, e.g., Cert. Admin. R. at 7, 74 ().) By the end of September 2017, the Auditor, the Assessor, and the Allen County Property Tax Assessment Board of Appeals had denied all of Buckeye's Forms 133. (See e.g., Cert. Admin. R. at 3, 8, 14, 20.) As a result, Buckeye sought review by the Indiana Board on October 23, 2017. (See e.g., Cert. Admin. R. at 4, 9, 15, 21.) The parties subsequently agreed that the Indiana Board could resolve the matter by means of summary judgment without an administrative hearing. (See Cert. Admin. R. at 52-54.)
On April 16, 2018, the parties filed cross-motions for summary judgment, supporting briefs, and designations of evidence. (See, e.g., Cert. Admin. R. at 55-57, 665-82.) Buckeye claimed, among other things, that it was entitled to judgment as a matter of law because the Indiana Board relied on the definition of the term "dwelling unit" that it had misinterpreted in a previous, related case. (See, e.g., Cert. Admin. R. at 61-63 (citing, e.g., Buckeye Hosp. Dupont, LLC v. Allen Cty. Assessor, Pet. No. 02-072-09-3-4-01319 (Ind. Bd. Tax Review Nov. 22, 2016)).)
The Assessor, on the other hand, asserted that she was entitled to judgment as a matter of law because Buckeye's claims were barred by the Indiana Board's prior ruling under the doctrines of administrative res judicata and stare decisis. (See Cert. Admin. R. at 659-60.) The Assessor also claimed that she should prevail as a matter of law because hotels were expressly excluded from the amended definition of "residential property." (See Cert. Admin. R. at 661-62.)
On March 11, 2019, the Indiana Board denied Buckeye's motion for summary judgment, explaining that its property was not "residential property" because: 1) it provided temporary accommodation as a hotel despite the fact that some guests chose to stay 30 days or longer; and 2) hotels were excluded by statute from the definition of "residential property" for purposes of Indiana's property tax caps. (See Cert. Admin. R. at 720-21 ¶ 14, 724 ¶ 27.) The Indiana Board declined to address the Assessor's administrative res judicata and stare decisis claims. (See Cert. Admin. R. at 719-20 ¶ 11.)
On April 24, 2019, Buckeye initiated this original tax appeal. Once fully briefed, the Court took the case under advisement on November 6, 2019. Additional facts will be supplied as necessary.
The party seeking to overturn an Indiana Board final determination bears the burden of demonstrating its invalidity. Hubler Realty Co. v. Hendricks Cty. Assessor, 938 N.E.2d 311, 313 (Ind. Tax Ct. 2010). Accordingly, Buckeye must demonstrate to the Court that the Indiana Board's final determination is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law; contrary to constitutional right, power, privilege, or immunity; in excess of or short of statutory jurisdiction, authority, or limitations; without observance of the procedure required by law; or unsupported by substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5) (2020).
Indiana Code § 6-1.1-20.6 governs the computation and allocation of Indiana's property tax cap credits. See generally IND. CODE §§ 6-1.1-20.6-0.3 to -13 (2020) (the "Tax Cap Statutes"). In 2013, Indiana Code § 6-1.1-20.6-4 defined "residential property," for purposes of the Tax Cap Statutes, as:
IND. CODE § 6-1.1-20.6-4 (2013) (amended 2014) (the "Residential Property Statute"). In turn, "nonresidential property" was defined as real property that was 1) not a homestead or residential property and that 2) consisted of a building, any other land improvement, and the land under the footprint of the building or improvement. See IND. CODE § 6-1.1-20.6-2.5(1) (2013).
Effective in 2014, however, the Legislature amended the definition of "residential property." See P.L. 166-2014, § 4 (eff. Jan. 1, 2014). The amendment added, among other things, the following sentence to the end of the statute: "The term ["residential property"] does not include real property that consists of a commercial hotel, motel, inn, tourist camp, or tourist cabin." Id.
On appeal, Buckeye contends that the Indiana Board's final determination must be reversed because it wrongly concluded that none of Buckeye's property was "residential property" within the meaning of the Residential Property Statute. (See generally Pet'r Br. at 4-11.) The Assessor, on the other hand, contends that Buckeye's claims are barred by the doctrine of administrative res judicata or, alternatively, that the Indiana Board's final determination should be upheld because it is consistent with the law. (See generally Resp't Br. at 8-19.)
As a threshold matter, the Assessor contends that the doctrine of administrative res judicata barred Buckeye's claims before the Indiana Board as a matter of law. (See Resp't Br. at 18-19.) More specifically, the Assessor contends that because the Indiana Board determined in its prior administrative proceeding that Buckeye's property was not "residential property," Buckeye should have been barred from relitigating that issue in the Indiana Board proceeding now under review. (See Resp't Br. at 18-19.)
The doctrine of administrative res judicata has been recognized in federal contexts by the United States Supreme Court:
When an administrative agency is acting in a judicial capacity and resolved disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.
United States v. Utah Const. & Min. Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966) (citations omitted and emphasis added). This doctrine has been applied in Indiana administrative contexts as well. See, e.g., Weiss v. Indiana Family & Soc....
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