Cleveland Elec. Illuminating Co. v. Lake County Bd. of Revision

• Decision Date: 07 January 1998
• Docket Number: Nos. 96-38,s. 96-38
• Citation: 80 Ohio St.3d 591,687 N.E.2d 723
• Parties: CLEVELAND ELECTRIC ILLUMINATING COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. (Two Cases) DUQUESNE LIGHT COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. TOLEDO EDISON COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. PENNSYLVANIA POWER COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. OHIO EDISON COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. to 96-43.
• Court: Ohio Supreme Court

Page 591

80 Ohio St.3d 591

687 N.E.2d 723

CLEVELAND ELECTRIC ILLUMINATING COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees. (Two Cases)

DUQUESNE LIGHT COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees.

TOLEDO EDISON COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees.

PENNSYLVANIA POWER COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees.

OHIO EDISON COMPANY, Appellant, v. LAKE COUNTY BOARD OF REVISION et al., Appellees.

Nos. 96-38 to 96-43.

Supreme Court of Ohio.

Submitted March 19, 1997.

Decided Jan. 07, 1998.

Charles E. Coulson, Lake County Prosecuting Attorney, and Michael P. Brown, Assistant Prosecuting Attorney, for appellees Lake County Auditor and Lake County Board of Revision.

George R. Hicks, Jr., Independence; Squire, Sanders & Dempsey, Robin G. Weaver, Bebe A. Fairchild, Cleveland, and Ted B. Clevenger, Columbus, for appellants Toledo Edison Company, Cleveland Electric Illuminating Company, Pennsylvania Power Company, Duquesne Light Company, and Ohio Edison Company.

Wayne E. Petkovic, Columbus, for appellees Perry Local Schools Board of Education and Willoughby Eastlake Board of Education.

PFEIFER, Justice.

We find that the appellants in these cases substantially complied with the requirements of R.C. 5715.13 and 5715.19 in seeking a decrease in the valuation of their property, and we therefore overrule the determinations of the Board of Tax Appeals.

The BTA based its decision against CEI on Stanjim Co. v. Mahoning Cty. Bd. of Revision (1974), 38 Ohio St.2d 233, 236, 67 O.O.2d 296, 298, 313 N.E.2d 14, 16, wherein this court found that the DTE 1 form in use at that time was "clearly designed to elicit information required by R.C. 5715.19 and 5715.13," and that a complaint lacking certain information required by the form is insufficient to confer jurisdiction on a county board of revision.

In Stanjim, the taxpayer had left a large portion of the form, entitled "Pertinent Facts," completely blank. That portion of the form was designed to elicit the information required by R.C. 5715.13, which reads:

"The county board of revision shall not decrease any valuation complained of unless the party affected thereby or his agent makes and files with the board a written application therefor, verified by oath, showing the facts upon which it is claimed such decrease should be made."

Instead of providing information, the Stanjim taxpayers had typewritten, "All other pertinent data substantiating this complaint of over valuation will be presented at requested hearing." The BOR in Stanjim dismissed the complaints because they did not comply with the requirements for filing, and that decision was affirmed by the BTA and this court.

But forms have changed. A review of the current DTE Form 1 (Exhibit A) shows that the primary difference between the current form and the complaint form used in Stanjim is that the Pertinent Facts section contained in the Stanjim form (Exhibit B) has been dropped. The Tax Commissioner apparently has determined that the information contained in the Pertinent Facts section of the Stanjim form is no longer required. One possible explanation for dropping the Pertinent Facts section is the amendment in 1965 of R.C. 5713.03, which requires the auditors to adopt and use a real property record. 131 Ohio Laws 1329. Although R.C. 5713.03 was amended prior to the Stanjim case (decided in 1974) it was not until December 1973 that the Tax Commissioner amended rule BTA-5-05 (now Ohio Adm.Code 5705-3-05) to specify the type of data that was to be kept on the property record.

The data kept on the property record card includes such information as the size of the parcel, utilities, building details, the date and price of any transfers, and rental income. Today, if the auditor complies with the property record card requirements, most of the relevant data requested by the Pertinent Facts section of the Stanjim form is now recorded on the property record card in his or her possession.

In addition, the second page of the current DTE Form 1 sets forth that if the property owner is seeking a decrease for income-producing, commercial, or industrial property, he must submit additional information "no later than at the time of the hearing," relating to physical data for the property, income data for rental property, and other data such as zoning and a floor plan.

Stanjim hinged on the taxpayer's failure to fill out the "Pertinent Facts" portion of the DTE 1 form. That section is missing from the current form, and only a few questions remain that are similar to those on the Stanjim form. Question 9, for instance, asks whether the property had been sold in the last three years, and Question 10 asks for a copy of the listing agreement. Question 11 asks for the dates and amounts of capital improvements over the prior three years. CEI responded to each of those questions.

The BTA found CEI to be in noncompliance with R.C. 5715.13 due to its response to Question 8, which requires the complainant to state that "the increase or decrease in taxable value requested is justified for the following reasons." CEI's response to that question was "To be determined."

No specific, verifiable information is requested in Question 8. It seeks not so much fact as opinion or theory. In this case, appellants fully answered the factual questions that remained from the Stanjim form; much of the other information sought by the Stanjim form is now contained in the property record held by the auditor.

We find that Question 8 of the DTE 1 form used in this case does not elicit information required by R.C. 5715.13. The Stanjim court characterized the data requirements of R.C. 5715.13 and 5715.19 as "minimal." Stanjim, 38 Ohio St.2d at 236, 67 O.O.2d at 299, 313 N.E.2d at 16. Question 8 does not seek data, it seeks an argument. As such, it seeks much more than the minimal amount of information required by the Stanjim form. We find that R.C. 5715.13 does not require a response to Question 8 on the DTE 1 form used in this case.

The BTA also found that CEI did not meet jurisdictional requirements of R.C. 5715.19(D), which requires a complaint to state "the amount of overvaluation, undervaluation, discriminatory valuation, illegal valuation, or incorrect classification or determination upon which the complaint is based."

Question 7 of the DTE 1 form concerns valuation. Part (A) of that question requests the complainant's opinion of true value (fair market value) of the property. CEI responded "unknown at present." Question 7(B) requests the complainant's opinion of total taxable value, which is simply thirty-five percent of true value. Having answered "unknown" as to part A, CEI left Question 7(B) blank. Question 7(C) asks for the current total taxable value, and CEI responded with figures ranging from $75,500 to $49,725,180. Question 7(D) asks for the "increase or decrease in total taxable value sought." In their complaint, CEI asked for a "decrease of at least $50,000."

CEI's responses to Question 7 were somewhat vague, but were not a complete omission. For example, by demanding a decrease of at least $50,000 in total taxable value, and given the property's current taxable value (thirty-five percent of true value) of $49,725,150 (parcel No. 05A-888-0-00-100-0), CEI opines that the taxable value of the property is no more than $49,675,180. Since the taxable value is thirty-five percent of true value, CEI's opinion of the maximum true value of the property therefore would be $141,929,086. Thus, save a few simple mathematic computations, CEI's opinion of true value was contained in its complaint. The question remains, however, whether giving a "ceiling" figure is enough to satisfy the requirements of R.C. 5715.19(D).

There is no requirement that the value of the property, as determined by the board of revision, must match the opinion of value set forth in the complaint. In Jones & Laughlin Steel Corp. v. Lucas Cty. Bd. of Revision (1974), 40 Ohio St.2d 61, 69 O.O.2d 353, 320 N.E.2d 658, this court considered whether in an appeal to a court of common pleas (in lieu of an appeal to the BTA) from a decision of the board of revision, the court could find a value which was lower than that claimed by the taxpayer in its complaint filed with the board of revision. The argument raised in Jones & Laughlin was that by setting a value in the complaint filed with the board of revision, the taxpayer made an admission that the real estate in question had the value stated in the complaint. This court rejected that argument and stated that in determining value the complaint "places neither minimum nor maximum limitations on the court's determination of value, and there are none save the judicial requirement that the determination be supported by the evidence." Id. at 63, 69 O.O.2d at 354, 320 N.E.2d at 660.

Thus, since a taxpayer is not bound to his opinion of value in the complaint, a ceiling value fits within the requirements of R.C. 5715.19(D). Our only remaining concern is whether a ceiling figure upsets the procedural efficiency of the tax appeal process.

In Akron Std. Div. v. Lindley (1984), 11 Ohio St.3d 10, 11 OBR 9, 462 N.E.2d 419, this court enunciated a "core of procedural efficiency" standard regarding substantial compliance with a tax statute as it related to the requirements of a reassessment petition. In Akron Standard, this court held that lack of a statutorily mandated verified signature was not a basis for dismissing a reassessment petition:

"The lack of a verified signature in a reassessment petition does not prevent the attachment of jurisdiction by an otherwise satisfactory filing, since substantial compliance with the requirements of the statute has taken place. The verification requirement is to be distinguished from the requirement that a notice of appeal be filed within thirty days of assessment, and also from the requirement...