Jakobovitch v. Cuyahoga Cnty. Bd. of Revision

Decision Date06 December 2017
Docket NumberNo. 2015–1431,2015–1431
Citation94 N.E.3d 519,2017 Ohio 8818,152 Ohio St.3d 187
Parties JAKOBOVITCH, Appellant, v. CUYAHOGA COUNTY BOARD OF REVISION et al., Appellees.
CourtOhio Supreme Court

J. Alex Morton, Cleveland, for appellant.

Michael C. O'Malley, Cuyahoga County Prosecuting Attorney, and Mark R. Greenfield, Assistant Prosecuting Attorney, for appellees Cuyahoga County Fiscal Officer and Cuyahoga County Board of Revision.

Brindza, McIntyre & Seed, L.L.P., Cleveland, and David A. Rose, for appellee Beachwood City School District Board of Education.

Per Curiam.

{¶ 1} In this real-property-valuation case, appellant, Galina Jakobovitch, filed a complaint seeking to reduce the valuation assigned to her property by the Cuyahoga County fiscal officer. The Cuyahoga County Board of Revision ("BOR") and the Board of Tax Appeals ("BTA") both retained the fiscal officer's valuation. Jakobovitch has appealed the BTA's decision, raising both value-related arguments and procedural arguments. Because Jakobovitch has not shown that the BTA acted unreasonably or unlawfully, we affirm.

FACTS AND PROCEDURAL BACKGROUND

{¶ 2} The subject property consists of a single-family dwelling located on a roughly .45–acre parcel in the city of Beachwood. For tax year 2013, Jakobovitch filed a complaint seeking to reduce the fiscal officer's valuation from $1,429,100 to $850,000. Appellee Beachwood City School District Board of Education ("the BOE") filed a countercomplaint, urging retention of the fiscal officer's valuation.

BOR proceedings

{¶ 3} At the BOR hearing, Jakobovitch furnished a list of purportedly comparable properties sold between 2010 and 2014. The list is difficult to interpret, but it appears to show home values ranging from $575,100 to $931,000. Jakobovitch did not testify about the houses on the list.

{¶ 4} Jakobovitch also presented a financing appraisal, which opined a value of $1,050,000 as of July 2010. The appraiser did not appear to testify.

{¶ 5} When asked why Jakobovitch had requested a valuation of $850,000, her counsel responded that the request was "just a prayer." Counsel also posited that there is a limited market for the subject property due to both the excessive size and the religious features of the house. No analysis was offered to quantify how these attributes affect the property's value.

{¶ 6} For its part, the BOE stated that the financing appraisal that Jakobovitch submitted should not be given weight because the appraisal did not value the property as of the 2013 tax-lien date, the appraiser did not appear to testify, and the comparables identified in the appraisal were not located near the subject property.

{¶ 7} The BOR retained the fiscal officer's valuation. The BOR's hearing notes indicate that the appraisal was "dated (3 years old)" and that there was a "lack of probative evidence" to justify a reduction.

BTA proceedings

{¶ 8} Jakobovitch appealed to the BTA. The BTA observed that Jakobovitch bore the burden to present competent and probative evidence of her proposed value, and it found that she failed to meet this burden. Specifically, the BTA refused to assign evidentiary value to Jakobovitch's appraisal or to her list of comparable sales. It also found that her averments regarding the installation of religious features on the property were insufficient to justify a reduction. Because the BTA found that Jakobovitch did not meet her burden, and because it found that the record did not contain enough evidence to permit an independent determination of value, it adopted the fiscal officer's valuation. Jakobovitch then filed this appeal.

STANDARD OF REVIEW

{¶ 9} We will affirm a BTA decision that is reasonable and lawful. Satullo v. Wilkins , 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14. Our review of the BTA's resolution of legal issues is de novo, but we will defer to the BTA's findings concerning the weight of the evidence if the record supports them. Lunn v. Lorain Cty. Bd. of Revision , 149 Ohio St.3d 137, 2016-Ohio-8075, 73 N.E.3d 486, ¶ 13.

DISCUSSION

{¶ 10} Jakobovitch raises eight propositions of law. We will address her value-related arguments first and her procedural arguments second.

Jakobovitch's value-related arguments

{¶ 11} An overarching theme running throughout Jakobovitch's brief, and one featured prominently in her third proposition of law, is that the BTA misapplied the standards governing her burden of proof. In her view, the BTA's departure from these standards caused it to disregard her evidence of value in favor of the fiscal officer's valuation.

{¶ 12} The burden-of-proof standards that apply in a real-property-valuation case are well settled, and we find no error in the BTA's application of these standards. "[T]he party challenging the board of revision's decision at the BTA has the burden of proof to establish its proposed value as the value of the property." Colonial Village, Ltd. v. Washington Cty. Bd. of Revision , 123 Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d 1196, ¶ 23 ; see also W. Industries, Inc. v. Hamilton Cty. Bd. of Revision , 170 Ohio St. 340, 342, 164 N.E.2d 741 (1960) ("The burden is on the taxpayer to prove his right to a deduction. He is not entitled to the deduction claimed merely because no evidence is adduced contra his claim"). To meet that burden, the appellant must furnish "competent and probative evidence" of the proposed value. EOP–BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision , 106 Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, ¶ 6. "[T]he board of revision (or auditor),"1 on the other hand, "bears no burden to offer proof of the accuracy of the appraisal on which the county initially relies, with the result that the BTA is justified in retaining the county's valuation of the property when an appellant fails to sustain its burden of proof at the BTA." Colonial Village at ¶ 23.

{¶ 13} It follows from the case law that Jakobovitch bore the burden of proof at the BTA to adduce competent and probative evidence of her proposed value. With this settled principle in mind, we now turn to her more specific arguments.

Jakobovitch's challenge to the BTA's treatment of her appraisal

{¶ 14} Jakobovitch argues in her seventh proposition of law that the BTA erred in disregarding her July 2010 financing appraisal. We confronted a similar argument under analogous circumstances in Musto v. Lorain Cty. Bd. of Revision , 148 Ohio St.3d 456, 2016-Ohio-8058, 71 N.E.3d 279, ¶ 40–42. There, the owner furnished an appraisal that opined a value as of almost three years prior to the tax-lien date. The appraisal had been performed for financing purposes, and the appraiser did not testify. The BTA refused to credit the appraisal, and we determined that the BTA's determination was reasonable. We find Musto applicable here.

{¶ 15} First, the appraisal submitted by Jakobovitch opined a value as of July 2010 and thus does not coincide with the 2013 tax-lien date. The vintage of an appraisal matters because " ‘the essence of an assessment is that it fixes the value based upon facts as they exist at a certain point in time.’ " Id. at ¶ 41, quoting Freshwater v. Belmont Cty. Bd. of Revision , 80 Ohio St.3d 26, 30, 684 N.E.2d 304 (1997). Second, Jakobovitch "did not introduce testimony alongside [her] appraisal to explain its application to the tax-lien date." Id. at ¶ 41. Lastly, the appraisal was performed for financing purposes. In the absence of supporting testimony, applying a financing appraisal in the tax-valuation setting can be problematic because it may not necessarily represent a " ‘complete and thorough evaluation of the property.’ " Id. at ¶ 42, quoting Metzler v. Pickaway Cty. Bd. of Revision , BTA No. 2004–R–481, 2005 WL 2911447, *3 (Oct. 21, 2005). It follows that the BTA did not err here in disregarding the appraisal.

{¶ 16} Jakobovitch asserts in her fifth proposition of law that the BTA created a bright-line rule that requires the property owner to adduce an appraisal to justify a reduction in value. However, as was true in Moskowitz v. Cuyahoga Cty. Bd. of Revision , 150 Ohio St.3d 69, 2017-Ohio-4002, 78 N.E.3d 870, ¶ 15, Jakobovitch confuses the BTA's finding that her nonappraisal evidence was not probative with an ironclad rule that an appraisal is necessary to justify a reduction in value. This argument is even less convincing here because Jakobovitch presented an appraisal to support her claim to a reduced value but the BTA determined that the appraisal was not reliable.

Jakobovitch's challenges to the fiscal officer's valuation and the computer-assisted mass-appraisal system

{¶ 17} In her fourth and sixth propositions of law, Jakobovitch questions an upward adjustment made by the fiscal officer and challenges the computer-assisted mass-appraisal ("CAMA") system used by Cuyahoga County. As to the first point, she adverts to the testimony of Joseph Toledo, Cuyahoga County's CAMA-system administrator. At the BTA hearing, Toledo testified that he preliminarily valued Jakobovitch's property at $1,100,000 based on the CAMA system but then explained that the fiscal officer overrode this preliminary value, upwardly adjusting it to $1,429,100 based on a field appraiser's finding.2 At oral argument, counsel for the fiscal officer and the BOR maintained that these two valuations were components of the same overall process of valuing the property. Jakobovitch maintains that the fiscal officer's unexplained adjustment warrants a remand so that the adjustment can be explained.

{¶ 18} Jakobovitch tethers her argument to Dayton–Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision , 113 Ohio St.3d 281, 2007-Ohio-1948, 865 N.E.2d 22. There, the auditor increased the valuation of a building by 60 percent through the application of an unexplained grade-factor adjustment. The county board of revision made modest adjustments to this valuation but largely upheld it. The BTA rejected the board of revision's adjustments, explaining that it could not...

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