Convention Headquarters Hotels, LLC v. Marion Cnty. Assessor
| Decision Date | 05 August 2021 |
| Docket Number | Cause No. 19T-TA-00021 |
| Citation | 175 N.E.3d 1212 |
| Parties | CONVENTION HEADQUARTERS HOTELS, LLC, Petitioner, v. MARION COUNTY ASSESSOR, Respondent. |
| Court | Indiana Tax Court |
ATTORNEYS FOR PETITIONER: BENJAMIN A. BLAIR, DAVID A. SUESS, DANIEL R. ROY, FAEGRE DRINKER BIDDLE & REATH LLP, Indianapolis, IN
ATTORNEYS FOR RESPONDENT: JESSICA R. GASTINEAU , SPECIAL COUNSEL - TAX LITIGATION, ANNE C. HARRIGAN, CHIEF LITIGATION COUNSEL, OFFICE OF CORPORATION COUNSEL, Indianapolis, IN, RAYMOND J. BIEDERMAN, SEAN P. BURKE, HAMISH S. COHEN, MATTINGLY BURKE COHEN & BIEDERMAN LLP, Indianapolis, IN
ORDER ON THE PARTIES’ MOTIONS FOR PARTIAL SUMMARY JUDGMENT
Convention Headquarters Hotels, LLC ("Convention HQ") has filed a direct appeal challenging the 2010 assessment of its real property. The matter is currently before the Court on the parties’ motions for partial summary judgment. Upon review, the Court denies both motions.
The following facts are not in dispute.1 Convention HQ owns a 4.382-acre parcel of land in the central business district of Indianapolis (the "CBD"), Marion County, Indiana. (See Pet'r Pet. ¶¶ 6, 15; Resp't Ans. at 1.) On May 29, 2008, Convention HQ broke ground on the hotel that came to be known as the JW Marriott Indianapolis. (See Pet'r Pet. ¶¶ 15-16; Resp't Ans. at 1.)
In March of 2010, the hotel building was under construction and only partially-complete. (See Pet'r Pet. ¶ 18; Resp't Ans. at 1.) For purposes of the 2010 assessment, therefore, the Assessor used a "percentage complete" factor to value the partially-complete improvements (i.e., the hotel building and enclosed skyway) at $71,716,700, and he assigned an assessed value of $15,270,400 to the 4.382-acres of land. (See Pet'r Pet. ¶¶ 20-21; Resp't Ans. at 1; Pet'r Ex. 3 at 3.) Additional facts will be supplied as necessary.
In October of 2010, Convention HQ received notice of its 2010 assessment. (See Pet'r Pet. ¶ 20.) The following month, Convention HQ protested its assessment. (Pet'r Pet. ¶ 22; Resp't Ex. R-1 at 1.) More than six years later, after the Marion County Property Tax Assessment Board of Appeals failed to act on its protest, Convention HQ sought review with the Indiana Board of Tax Review pursuant to Indiana Code § 6-1.1-15-1(o). (See Pet'r Pet. ¶¶ 23-24; Resp't Ans. at 1.)
After approximately eleven months, the Indiana Board still had not issued its final determination. See Convention Headquarters Hotels, LLC v. Marion Cnty. Assessor (CHH I ), 119 N.E.3d 245, 246-47 (Ind. Tax Ct. 2019). As a result, Convention HQ tried to transition its appeal to this Court on two separate occasions, claiming each time that the Court had the authority to hear the appeal under Indiana Code § 6-1.1-15-5(g) because the maximum time had elapsed within which the Indiana Board was required to issue its final determination. See id.; Convention Headquarters Hotels, LLC v. Marion Cnty. Assessor (CHH II ), 126 N.E.3d 80, 81-82 (Ind. Tax Ct. 2019). The Court, however, determined that it could not hear either one of Convention HQ's appeals because they were prematurely filed. CHH I, 119 N.E.3d at 248-50 ; CHH II, 126 N.E.3d at 83-84. On June 28, 2019, after the maximum time had actually elapsed, Convention HQ initiated this appeal. See, e.g., Convention Headquarters Hotels, LLC v. Marion Cnty. Assessor (CHH III ), 132 N.E.3d 77, 80 (Ind. Tax Ct. 2019) ().
In its appeal, Convention HQ has alleged that the 2010 assessment of its partially-complete hotel violated the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the United States Constitution, its civil rights pursuant to 42 U.S.C. § 1983 (the "1983 Claim"), and the Property Taxation and Equal Privileges and Immunities Clauses of the Indiana Constitution. (Pet'r Pet. ¶¶ 25-90.) Convention HQ has also alleged that its land assessment contravened Indiana's market value-in-use standard. (Pet'r Pet. ¶¶ 91-96.)
In response, the Assessor has denied that the material allegations in Convention HQ's petition were true and has filed a counterclaim seeking to increase Convention HQ's 2010 assessment. (Resp't Ans. at 1-2.) Subsequently, the Court bifurcated the parties’ claims, staying all proceedings on their valuation claims until the constitutional claims were fully resolved. (Order Dec. 3, 2019.)
On June 17, 2020, Convention HQ moved for partial summary judgment on its federal and state constitutional claims. (See Pet'r Mot. Partial Summ. J. ¶ 3.) That same day, the Assessor moved for partial summary judgment on the Indiana constitutional claims and the 1983 Claim.2 (See Resp't Br. Supp. Mot. Partial Summ. J. ("Resp't Br.") at 4-16.) On September 10, 2020, the Court held a hearing on the parties’ motions.
The Tax Court reviews direct appeals initiated pursuant to Indiana Code § 6-1.1-15-5(g) de novo. IND. CODE § 6-1.1-15-5(g) (2021). Accordingly, the Court is not bound by either the evidence that was presented or the issues that were raised during the administrative proceedings. See CHH III, 132 N.E.3d at 81, 84.
The Court will grant a motion for summary judgment only when the designated evidence demonstrates that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). "A fact is ‘material’ if its resolution would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is required to resolve the parties’ differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences." Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).
All real property in Indiana is subject to assessment and taxation on the statutorily prescribed assessment date. See IND. CODE §§ 6-1.1-2-1, -1.5(a) (2021). This applies to all improvements to real property, including those that are only partially-complete as of the assessment date. See, e.g., Jones v. Jefferson Cnty. Assessor, 51 N.E.3d 461, 463 (Ind. Tax Ct. 2016) ().
The parties’ counter-motions for partial summary judgment implicate five separate state and federal claims. When, as here, the Court is faced with competing motions for summary judgment, it will consider the motions separately, construing all properly asserted facts and reasonable inferences drawn from the facts in favor of the non-moving party in each instance. See Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind. 2013). Accordingly, the Court will address the parties’ counter-motions in turn.
In its motion for partial summary judgment, Convention HQ alleges that the Assessor violated its rights to equal protection and due process guaranteed under the Fourteenth Amendment of the United States Constitution as well as its rights under the Privileges and Immunities Clause and the Property Taxation Clause of the Indiana Constitution. (Pet'r Br. Supp. Mot. Partial Summ. J. ("Pet'r Br.") at 19-53.) Central to each of its four claims is Convention HQ's assertion that from at least 2006 through 2019, the Assessor has pursued a practice, custom, or policy of selectively assessing certain partially-complete commercial buildings, including its own, while not assessing other partially-complete commercial buildings until they were fully constructed. (See Pet'r Br. at 1, 19-20, 28, 30-38, 49-52; Hr'g Tr. at 8-9, 17-18, 36.) As support, Convention HQ designated evidence that compared the Assessor's treatment of partially-complete commercial buildings throughout Marion County during at least one assessment year from 2006 through 2019. (See, e.g., Pet'r Br. at 2-18 (citing, e.g., Pet'r Ex. 3 at 3, 7, 13-14, 18-19).)
Convention HQ claims the Assessor treated its partially-complete hotel differently than he treated similarly situated properties, violating its rights under the Equal Protection Clause of the Fourteenth Amendment that states "[n]o State shall ... deny to any person within its jurisdiction the equal protection of the laws." (See Pet'r Br. at 20-33.) See also U.S. CONST . amend. XIV, § 1. This clause " ‘protects the individual from state action which selects him out for discriminatory treatment by subjecting him to taxes not imposed on others of the same class.’ " Allegheny Pittsburgh Coal Co. v. County Comm'n of Webster Cnty., W. Va., 488 U.S. 336, 345, 109 S.Ct. 633, 102 L.Ed.2d 688 (1989) (citation omitted). "All equal protection claims, regardless of the size of the disadvantaged class, are based on the principle that, under ‘like circumstances and conditions,’ people must be treated alike, unless there is a rational reason for treating them differently." LaBella Winnetka, Inc. v. Vill. of Winnetka, 628 F.3d 937, 941-42 (7th Cir. 2010) (citation omitted). Therefore, to prevail on its claim that the Assessor violated its constitutionally guaranteed right to equal treatment, Convention HQ must show that the Assessor (1) intentionally treated it differently than others similarly situated and (2) had no rational basis for the difference in that treatment. See id. at 942.
Convention HQ claims that the Assessor treated it differently than other similarly situated taxpayers by assessing its partially-complete hotel (as well as a few other similarly situated properties), but not assessing the rest of the similarly situated properties. (See, e.g., Pet'r Br. at 28.) As the summary judgment movant, Convention HQ has the initial evidentiary burden to show there is no genuine issue of material fact that the Assessor did not assess similarly situated properties for assessment dates from 2006 through 2019. See Hughley, 15 N.E.3d at 1003 () (citation omitted).
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