Indiana State Bd. of Tax Com'rs v. Pappas

• Decision Date: 30 October 1973
• Docket Number: No. 2--972A55,2--972A55
• Citation: 302 N.E.2d 858,158 Ind.App. 327
• Parties: INDIANA STATE BOARD OF TAX COMMISSIONERS, Joseph D. Geeslin, Chairman, Defendant-Appellant, v. Peter A. PAPPAS and Gertrude R. Pappas, Plaintiffs-Appellees.
• Court: Indiana Appellate Court

Page 858

302 N.E.2d 858

158 Ind.App. 327

INDIANA STATE BOARD OF TAX COMMISSIONERS, Joseph D. Geeslin Chairman, Defendant-Appellant, v. Peter A. PAPPAS and Gertrude R. Pappas, Plaintiffs-Appellees.

No. 2--972A55.

Court of Appeals of Indiana, Third District.

Oct. 30, 1973.

Theodore L. Sendak, Atty. Gen., Merle B. Rose, Deputy Atty. Gen., Indianapolis, for defendant-appellant

Peter A. Pappas, pro se.

SHARP, Judge.

This case is concerned with the tax assessment of the Appellees' residence located in the Town of Meridian Hills effective March 1, 1969. The Township Assessor fixed said assessment at a total of $16,210.00 (representing one third of true cash value). Thereafter Appellees petitioned the Marion County Board of Review to reduce said assessment and said Board of Review fixed said assessment at $14,780.00. Thereafter on April 20, 1970 Appellees filed a petition to the Indiana State Board of Tax Commissioners for review of assessment. After hearing the Appellant Board fixed said assessment at $14,780.00 on November 9, 1970. On November 13, 1970 Appellees filed what they denominated 'Appeal from Final Determination of the State Board of Tax Commissioners' in the trial court. Issues were closed by an answer in denial by Appellant. In addition the Appellant asserted in its answer:

'In response to Plaintiffs' prayer for relief Defendants would say that said prayer asks for relief in excess of the power of the Court to grant in that pursuant to Burns § 64--1004 (IC 1971, 6--1--31--4) this Court can, upon a determination adverse to Defendants, only remand this case to the State Board of Tax Commissioners for further proceedings in accordance with law.'

The Appellant Board filed a 'Transcript of Proceedings' and the trial court heard additional evidence after which the trial court entered the following findings and conclusions:

'FINDINGS OF FACT

1. The Plaintiffs, Peter A. and Gertrude R. Pappas are owners of certain real property in the County of Marion, State of Indiana, and more particularly described as follows:

'Lots 16 and 17 in Stout's Meridian Hills Addition, an Addition to the City of Indianapolis, now in the Town of Meridian Hills, Marion County, Indiana, as per plat thereof, recorded in Plat Book 24, Page 345, in the office of the Recorder of Marion County, Indiana.'

2. The Defendant, State Board of Tax Commissioners, is an agency of the State of Indiana with the duty among other things, of hearing appeals by property owners from final determinations by the county boards of review.

3. The Plaintiffs appealed from the Marion County Board of Review requesting that the State Board of Tax Commissioners review the assessed valuation of its property as determined by said Board of Review.

4. The Marion County Board determined that Plaintiffs' land should be assessed at $3,500.00 and its improvements at $11,280.00. This determination represented a reduction over that determined by the township assessor.

5. The State Board of Tax Commissioners on review of Plaintiffs' assessed valuation determined that said valuation as determined by the Marion County Board of Review was substantially correct and therefore should be affirmed.

6. Clarence L. Crow, Hearing Officer for State Board of Tax Commission, after meeting with and hearing arguments of Plaintiffs, personally viewing the property of the Plaintiffs and the neighborhood in which Plaintiffs' property is located, recommended that the Determination of the Marion County Board of Review be sustained. By its order of November 9, 1970, the State Board of Tax Commissioners accepted said recommendation.

7. Within thirty (30) days from the date of the State Board of Tax Commissioners' 8. At all times herein concerned, Regulation No. 17, the Indiana Real Property Appraisal Manual was in effect and was the regulation duly adopted by the State Board of Tax Commissioners as the standard to be applied state-wide in valuing real property for ad valorem property taxes.

final determination, the Plaintiffs filed a timely appeal to the Superior Court No. 6 of [158 Ind.App. 330] Marion County requesting a judicial review of said Board's determination.

9. Said Regulation was the standard applied by the State Board of Tax Commissioners in reviewing the correctness of Plaintiffs' assessment, and that using that standard the house located on Plaintiffs' property is a class 'B' residential property, and therefore assessed value of the improvements based on Regulation No. 17 of the Indiana Real Property Appraisal Manual is $6,835.00.

10. Clarence L. Crow testified that classification was a judgment factor and Plaintiffs' home could be a Class 'B' house. The grade and CDU factor are judgment factors involved in valuing an improvement. Russell B. Hottle (Hottel) testified that fair market value of land and house was $30,000.00, and Louis Cohen testified using Regulation No. 17 that the assessed value of land and improvements was approximately $10,000.00.

11. Plaintiffs presented sufficient evidence which tended to show that Regulation No. 17 had been improperly applied to Plaintiffs' property.

CONCLUSIONS OF LAW

1. Pursuant to Burns' 64--1004, the Court finds that it has jurisdiction over the subject matter and the persons herein involved.

2. The standard used by the State Board of Tax Commissioners in assessing and reviewing Plaintiffs' real property on appeal was duly adopted and promulgated Regulation No. 17, the Indiana Real Property Appraisal Manual, but the Board should have used grade 'B' classification as well as fair market value in determining value of Plaintiffs' improvements.

3. The Court finds upon weighing the evidence heard against the administrative standard employed that the action of the State Board of Tax Commissioners was arbitrary, capricious or unlawful.

4. The Court further finds that the assessed value of Plaintiffs' land and improvements is $10,335.00.

5. The law is with the Plaintiffs.'

The Appellant asserts error that the trial court admitted evidence at the trial which was not admitted before the Board and relies on Uhlir v. Ritz, 255 Ind. 342, 264 N.E.2d 312 (1970) where Justice Hunter, speaking for our Supreme Court, said:

'To assure that the administrative process does not exceed the bounds of justice the courts have been required to exercise a certain review power. But, because we must be ever aware that we operate within a tri-partite system of government, courts must carefully police the scope of their review so that they do not intrude into the area of valid administrative discretion. While it does not apply in bail bond license cases (Department of Insurance of Indiana v. Hendrickson (1964), 245 Ind. 117, 196 N.E.2d 574), the Administrative Adjudication and Court Review Act, Ind.Ann.Stat. § 64--3001 et seq. (1961 Repl., 1970 Supp.), passed in part to provide a method of court review of certain other administrative actions, shows the legislature's awareness of our proper field of activity. Under this act the line demarking an unconstitutional intrusion into the legislative sphere has been properly drawn just beyond a ruling that an administrative act was capricious, arbitrary, an abuse of discretion, in excess of statutory authority or unsupported by substantial evidence. We may make such a ruling if the facts of a case warrant it but we may not interfere with acts by an administrative body which are within the allowable scope of responsible discretion. Department of Financial Institutions v. State Bank of Lizton (1969), 253 Ind. 172, 252 N.E.2d 248; City of Evansville v. Nelson (1964), 245 Ind. 430, 199 N.E.2d 703.

In making such a determination under that statute we must look at the facts as they were found by the agency. Thus,

'The court's only right or scope of review is limited to a consideration of whether or not there is any substantial evidence to support the finding and order of the administrative body.' Department of Financial Institutions v. State Bank of Lizton, supra, 252 N.E.2d at 250.

and if there is we may not disturb it.

'Thus a court reviewing under a denovo statutory discretion may, to a limited extent, weigh the evidence supporting a finding of fact by an administrative agency. Public Service Commission of Indiana v. City of Indianapolis (1956), 235 Ind. 70, 131 N.E.2d 308. But, it may negate that finding only if, based upon the evidence as a whole, the finding of fact was

(1) arbitrary,

(2) capricious,

(3) an abuse of discretion,

(4) unsupported by substantial evidence, or

(5) in excess of statutory authority.

Having, in a de novo review, found the facts to be properly determined by the administrative body, the reviewing court then proceeds to, by applying the same standard, determine if the order, in light of those facts, was proper. City of Evansville v. Nelson, supra.

The review de novo, then, has two stages, (1) a determination of the propriety of the fact-finding and (2) a determination of the propriety of the administrative order made in light of the properly found facts, and the same standard is used in both steps.

(citing findings of the reviewing court)

'By these declarations, the court committed itself to the proposition that its function had been, in effect, to determine the issues on its own, giving no deference to the hearing findings. By reviewing and weighing the evidence anew, without granting weight to the findings of the hearing commission, the court in effect made a nullity of the administrative fact finding efforts. This was error; the court was not to determine if in its judgment the finding was reasonable, but, rather, it was to determine if the findings of fact were capricious, arbitrary, an abuse of discretion, in excess of statutory authority or unsupported by substantial evidence.

In making its decision the court was entitled to hear and weigh the evidence against a standard of administrative discretion validly employed, but it could not simply substitute its judgment for that of the...