Buckeye Terminals, L.L.C. v. Franklin Cnty. Bd. of Revision

• Decision Date: 21 September 2017
• Docket Number: No. 2016-0495,2016-0495
• Parties: Buckeye Terminals, L.L.C., Appellant, v. Franklin County Board of Revision et al., Appellees.
• Court: Ohio Supreme Court

152 Ohio St.3d 86

93 N.E.3d 914

2017 Ohio 7664

Buckeye Terminals, L.L.C., Appellant,

v.Franklin County Board of Revision et al., Appellees.

No. 2016-0495

Supreme Court of Ohio.

Submitted June 20, 2017

Decided September 21, 2017

Vorys, Sater, Seymour and Pease, L.L.P., Nicholas M.J. Ray, and Steven L. Smiseck, Columbus, for appellant.

Rich & Gillis Law Group, L.L.C., Mark Gillis, Dublin, and Kimberly G. Allison, for appellee Board of Education of the South–Western City School District.

French, J.{¶ 1} This appeal involves the valuation for tax years 2011 through 2013 of a 37–acre parcel of real property located in the city of Columbus. Appellant, Buckeye Terminals, L.L.C., appeals the decision of the Board of Tax Appeals ("BTA"), which adopted $8,492,910 as the property value. The BTA based its decision on the purchase price that Buckeye Terminals reported on a June 2011 conveyance-fee statement, despite Buckeye Terminals contention that the reported price did not accurately reflect the true value of the real property. We reverse the BTA's decision and remand the matter to the BTA.

Facts and procedural background

{¶ 2} Buckeye Terminals acquired the property at issue in June 2011 as part of a bulk-asset purchase that included 32 other facilities across several states for a total price of $166 million. The property is improved with eight buildings, along with 22 fuel-storage tanks and other tangible personal property located on the real property (collectively, the "Columbus facility"). A schedule attached to the purchase agreement states that the fair market value of the Columbus facility, including both equipment and real-property interests, was $13,981,000.

{¶ 3} In June 2011, Buckeye Terminals filed a conveyance-fee statement with the Franklin County auditor, reporting $8,492,911 as the purchase price of the real property located in Columbus, and recorded a quitclaim deed for the property. The Franklin County auditor valued the subject real property at $1,825,700 for tax year 2011.

{¶ 4} In February 2012, appellee Board of Education of the South–Western City School District ("BOE") filed a complaint with the Franklin County Board of Revision("BOR"), challenging the auditor's valuation and alleging that the June 2011 sale established a higher true value for the property. Based on the June 2011 deed and conveyance-fee statement, the BOE requested an increase of the property's value to $8,493,000.

{¶ 5} Shortly before the BOR held a hearing on the BOE's valuation complaint, Buckeye Terminals filed an amended deed and conveyance-fee statement, which altered Buckeye Terminals allocation of the bulk-purchase price to the Columbus real property from $8,492,911 to $1,921,084 "to correct purchase price erroneously noted on prior conveyance."

{¶ 6} At the BOR hearing in October 2014, the BOE offered no evidence other than the June 2011 conveyance-fee statement and deed in support of its complaint. Buckeye Terminals responded that the June 2011 conveyance-fee statement listed an incorrect sale price for the Columbus property because it erroneously included not just the value of the real estate but also the value of tangible personal property transferred as part of the Columbus facility. Buckeye Terminals submitted as evidence the amended conveyance-fee statement and deed and presented testimony from its property-tax manager, Flora Davis, and two employees of Ernst & Young, L.L.P.—Robert Stall and Mark Molepske—who were involved in Ernst & Young's allocation of the $166–million purchase price to the assets transferred in the June 2011 transaction.

{¶ 7} The BOR increased the value of the real property to $8,493,000 for tax years 2011, 2012, and 2013, but it retained the auditor's valuation of $1,825,700 for tax year 2014.

{¶ 8} Buckeye Terminals appealed the BOR's valuation increase for tax years 2011, 2012, and 2013 to the BTA. Buckeye Terminals again relied on the amended conveyance-fee statement and deed, but it also presented additional evidence to support the value reported on the amended conveyance-fee statement. Specifically, Louis J. Spisak III, a former employee of the Ohio Department of Taxation, and appraiser Ronald M. Eberly Jr. testified on Buckeye Terminals behalf.

{¶ 9} The BTA affirmed the BOR's valuation of the real property for tax years 2011, 2012, and 2013, based on the original conveyance-fee statement and deed.¹ BTA No. 2014–4958, 2016 Ohio Tax LEXIS 484, *20–21 (Mar. 7, 2016). This appeal followed.

Analysis

The BTA did not abuse its discretion by allowing supplementation of the transmitted record

{¶ 10} Before turning to the merits of this appeal, we first consider Buckeye Terminals argument that the BTA erred by allowing the BOE to supplement the record with the original conveyance-fee statement and deed, which were submitted to and considered by the BOR but which the BOR did not transmit as part of the record to the BTA. We reject that argument.

{¶ 11} R.C. 5715.08 requires a county board of revision to preserve all documentary evidence offered in relation to a valuation complaint, and R.C. 5717.01 requires the board of revision to certify to the BTA a transcript of its record and all evidence offered in connection with a complaint when a notice of appeal is filed. Here, the BOE submitted the original conveyance-fee statement and deed to the BOR. The documents were part of the record, and the BOR was required to preserve and transmit them to the BTA. Upon finding that the BOR failed to satisfy its statutory duties, the BTA properly allowed the BOE to supplement the transmitted record with copies of the original conveyance-fee statement and deed as part of the BTA's authority under R.C. 5717.01 to "make such investigation concerning the appeal as it deems proper." See Vandalia–Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision , 130 Ohio St.3d 291, 2011-Ohio-5078, 958 N.E.2d 131, ¶ 27, fn. 4. The BTA has discretion in admitting evidence, and unless the BTA abuses its discretion, we will affirm its decision. Orange City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision , 74 Ohio St.3d 415, 416–417, 659 N.E.2d 1223 (1996).

{¶ 12} We reject Buckeye Terminals argument that once the BTA hearing ended, the parties were bound by the record as it then existed. Contrary to Buckeye Terminals assertion, Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision , 90 Ohio St.3d 564, 740 N.E.2d 276 (2001), does not hold that a party may supplement the record only before the close of the BTA hearing, because there was no BTA hearing in that case, see id. at 566, 740 N.E.2d 276. And other cases that Buckeye Terminals cites are distinguishable because they involved attempts to introduce evidence that had not been submitted to the BOR.

In AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision , 118 Ohio St.3d 343, 2008-Ohio-2565, 889 N.E.2d 115, for example, we prohibited a party from introducing a document for the first time on appeal to this court, id. at ¶ 8, fn. 1 ; see also Margaret Realty Co. v. Cuyahoga Cty. Bd. of Revision , BTA No. 2014–1251, 2015 Ohio Tax LEXIS 2265, *3 (Apr. 28, 2015) (BTA rejected posthearing request to file supplemental evidence that had not been presented to the BOR). Those decisions do not address supplementation to remedy the BOR's failure to transmit a complete record of evidence. Buckeye Terminals also cites Stevenson v. Ottawa Cty. Bd. of Revision , BTA No. 2014–2857, 2015 Ohio Tax LEXIS 1334 (Mar. 5, 2015), which did involve the BOR's failure to transmit a complete record of evidence to the BTA, but in that case the parties waived a merit hearing before the BTA. Although the BTA stated that "it is the parties' duty to assure that the statutory transcript contains the evidence presented to the BOR," id. at *3, it also cited Columbus City School Dist. Bd. of Edn. at 566, 740 N.E.2d 276, which held that parties may not complain that a BOR transcript is incomplete if they waive the opportunity for a hearing before the BTA.

{¶ 13} We also reject Buckeye Terminals argument that the original conveyance-fee statement and deed were inadmissible because the BOE did not offer certified copies or otherwise authenticate those documents. Buckeye Terminals forfeited this argument by not objecting to the documents at the BOR. See Plain Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision , 130 Ohio St.3d 230, 2011-Ohio-3362, 957 N.E.2d 268, ¶ 20. Moreover, although Buckeye Terminals challenges the authenticity of the documents, it does not question their substance. But for additional file stamps, the rerecorded deed, upon which Buckeye Terminals relies, is identical to the original deed, and Buckeye Terminals readily acknowledges the only material fact about the original conveyance-fee statement—that it reported a sale price of $8,492,911. Under these circumstances, the BTA did not abuse its discretion by granting the BOE's motion to supplement the transmitted record with the original conveyance-fee statement and deed.

We will reverse a valuation decision only if it is unreasonable or unlawful

{¶ 14} In an appeal from a county board of revision's valuation decision, the BTA must determine the taxable value of the property at issue. R.C. 5717.03(B). The fair market value of property for tax purposes is a question of fact that is primarily within the province of the taxing authorities. Cuyahoga Cty. Bd. of Revision v. Fodor , 15 Ohio St.2d 52, 239 N.E.2d 25 (1968), syllabus. This court will not disturb a valuation decision of the BTA unless it affirmatively appears from the record that the decision is unreasonable or unlawful. Id . If we find that a BTA decision is unreasonable or unlawful, we may either reverse the decision or modify it and enter final judgment in accordance with that modification. R.C. 5717.04. We will not reverse the BTA's determination of evidentiary weight and credibility unless we conclude that the BTA abused its discretion. Bedford Bd....