Cannata v. Cuyahoga Cnty. Bd. of Revision
| Decision Date | 22 March 2016 |
| Docket Number | No. 2014–0957.,2014–0957. |
| Parties | CANNATA, Trustee, Appellee, v. CUYAHOGA COUNTY BOARD OF REVISION et al., Appellants. |
| Court | Ohio Supreme Court |
Siegel Jennings Co., L.P.A., J. Kieran Jennings, Cleveland, Jason Lindholm, Columbus, and Deborah Papushak, for appellee.
Timothy J. McGinty, Cuyahoga County Prosecuting Attorney, and Mark R. Greenfield, Assistant Prosecuting Attorney, for appellants Cuyahoga County Fiscal Officer and Cuyahoga County Board of Revision.
Kadish, Hinkel & Weibel, Kevin M. Hinkel, Rita M. Jarrett, Cleveland, and John P. Desimone, Lakewood, for appellant Orange City School District Board of Education.
{¶ 1} This real-property-valuation case concerns the proper valuation for tax year 2009—and potentially 2010 and 2011 also—of a residential property in Cuyahoga County. The property owner, appellee, Jill Cannata, trustee, presented an appraisal report along with the testimony of the appraiser before appellant Cuyahoga County Board of Revision (“BOR”), and the appraiser was subject both to direct and cross-examination. The BOR rejected the appraisal and retained the valuation that had been determined by appellant county fiscal officer, and the property owner appealed to the Board of Tax Appeals (“BTA”). When the BOR certified the record of the proceedings to the BTA, it failed to include the audio recording of the oral testimony before the BOR. The BTA reviewed the record, incomplete as it was, and concluded that the appraisal report constituted the best evidence of the property's value.
{¶ 2} On appeal, appellant Orange City School District Board of Education (“BOE”) and the two county appellants contend that the BTA acted unreasonably or unlawfully by adopting the appraisal given the absence of the recorded testimony from the record. As to the BOR and the fiscal officer, we reject the claim. The county officials had the duty to maintain and transmit the entire record, and having breached that duty, they are not entitled to claim an error that arises from that very breach.
{¶ 3} The BOE as appellant also challenges the adoption of the appraisal. Although the BOE arguably waived its objection to the new value for 2009, the BTA's adoption of the appraisal valuation, given the absence of potentially important evidence that ought to have been part of the record, constitutes plain error. At the same time, the property owner should not be deprived of the right to challenge the auditor's valuation and have her appraisal considered for whatever weight may properly be accorded to it. We therefore vacate the BTA's decision and remand with the instruction that the BTA conduct further proceedings with a view to performing an independent valuation of the property.
{¶ 4} At issue is a three-bedroom, three-bath residential house with an attached four-car garage and 4,173 square feet of living space located in Hunting Valley in Cuyahoga County. The lot is large: 218,118 square feet, or a little over 5 acres. The fiscal officer valued the land at $447,000 and the building at $411,600, for a total property value of $858,600 for tax year 2009.
{¶ 5} The owner filed the complaint seeking a reduction from $858,600 to $325,000, after which the BOE filed a countercomplaint seeking retention of the fiscal officer's valuation. At the hearing before the BOR, the property owner presented an appraisal opining a value of $330,000, based on a comparable-sale analysis and cost analysis—primarily the former.
The BOR's worksheet reflects (1) the appearance by the BOE's attorney, (2) the submission of the written appraisal report of Julian Vanni as an exhibit, and (3) the presence of Vanni as a witness before the BOR at the hearing. But the BOR failed to certify the audio recording of the hearing with the record to the BTA (the “audio of hearing” was listed on the index of the BOR transcript but was marked “not available”).
{¶ 6} At the BOR, the BOE presented evidence of its own in the form of printouts from the fiscal officer's website of properties sold in the area, which were summarized on a grid. Twelve of the properties were improved residential properties; eight were vacant land. The average price of the improved properties was $285.59 per square foot, a figure that, when applied to the living area of the subject property, would yield a sale price of $1,191,767. This contrasts with the $330,000 valuation in the appraisal, which calculated to $79 per square foot.
{¶ 7} The BOR retained the fiscal officer's valuation, and the owner appealed to the BTA. The BOE filed a motion to limit the exercise of the BTA's jurisdiction to the 2009 tax year on the grounds that the owner had filed new complaints for 2010 and 2011. The owner filed a memorandum opposing that limitation.
{¶ 8} At the BTA hearing, counsel for the owner made the sole appearance, and he presented once again the written appraisal report that was presented below. He also argued against the motion to limit jurisdiction to the 2009 tax year. No briefs were filed at the BTA.
{¶ 9} On May 9, 2014, the BTA issued a decision in which it overruled the motion to limit jurisdiction and adopted the appraiser's valuation of the property, thereby reducing the value to $330,000 for tax year 2009. BTA No. 2011–120, 2014 Ohio Tax LEXIS 2939 (May 9, 2014). In its footnotes, the BTA noted that the record did not contain the audio recording of the BOR hearing, and it admonished the BOR for not complying with its statutory duty to transmit the entire record. Id. at 1, fn. 1. The BTA did not explicitly extend its finding of value to the later tax years.
{¶ 10} The county fiscal officer and the BOR filed a notice of appeal in this court; the BOE filed a separate appeal and moved to supplement the record with the briefs on the motion it had filed at the BTA. We granted the motion to supplement.
{¶ 11} On appeal, the county and the BOE advance two propositions of law:
.
{¶ 12} The first proposition of law claims that the BTA had a legal duty to avoid adopting the appraisal valuation because the audio recording of the examination and cross-examination of the appraiser was not certified as part of the record. We find that this argument is barred as to the county fiscal officer and the BOR.
{¶ 13} When an appeal has been prosecuted to the BTA from the BOR, R.C. 5717.01
specifically requires the BOR to “certify to the board of tax appeals a transcript of the record of the proceedings of the county board of revision pertaining to the original complaint, and all evidence offered in connection therewith.” By statute, the fiscal officer is the secretary of the BOR, specifically charged with “keep[ing] an accurate record of the proceedings of the board” and with “perform[ing] such other duties as are incidental to the position.” R.C. 5715.09.
{¶ 14} Here, the fiscal officer and the BOR defaulted on their statutory obligation to supply a record of “all evidence offered” below. Yet they ask for reversal of the BTA's decision on the grounds that the audio recording that they failed to preserve and transmit as part of the record was necessary to the BTA's consideration and adoption of the appraisal. In effect, they argue that the BTA could not depart from the value found by the BOR because the BOR failed to transmit the record in its entirety. We decline to entertain this claim because the county is seeking to take advantage of its neglect of its duty to transmit the audio of the hearing to the BTA. We therefore reject the claim of error as advanced by the county appellants.
{¶ 15} The BOE also advances the first proposition of law here, contending that the BTA could not rely on the written appraisal report, because the audio of hearing was marked as “not available” on the index to the BOR transcript. The argument rests on the obvious potential significance of the examination and cross-examination of the owner's appraiser in determining the probative value of the appraisal report.
{¶ 16} As the BOE argues, “only the BOR had the benefit of having the appraiser appear before it and only the BOR had the ability to hear his testimony and question the appraiser first hand.” The BOE also argues that once the BOR rejected the appraisal, the BTA ought not to have adopted it “without the benefit of hearing the appraiser's testimony and without the ability to examine [the appraiser],” based “only [on] assurances from the Owner's spouse that [the appraiser] did make adjustments.”1 In opposition, the owner argues that the appraisal report contains adjustments to the comparables in the report itself, that it constitutes evidence of value, and that the BTA properly exercised its duty of evaluating and finding value based on the evidence that was in the record before it.
{¶ 17} In essence, this dispute involves competing claims of unfairness. On the one hand, the property owner thinks that it would be unfair to lose the benefit of the BTA's adoption of her appraisal merely because the BOR failed to certify the entire record to the BTA. On the other hand, the BOE thinks that it was unfair for the...
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