Lakeview Country Club, Inc. v. State Bd. of Tax Com'rs

Decision Date22 January 1991
Docket NumberNo. 18T05-8910-TA-00042,18T05-8910-TA-00042
CourtIndiana Tax Court

William V. Hughes, Beasley, Gilkison, Retherford, Buckles & Clark, Muncie, for petitioner.

Linley E. Pearson, Atty. Gen. by Marilyn S. Meighen, Deputy Atty. Gen., Indianapolis, for respondent.

FISHER, Judge.

This matter comes before the court on Lakeview Country Club, Inc.'s (Lakeview) motion for summary judgment and the Indiana State Board of Tax Commissioners' (State Board) cross motion for summary judgment.


Lakeview is an Indiana corporation with its principal place of business located in Delaware County, Indiana. Since 1967, Lakeview has been a golf course. In 1979, however, Lakeview's land and improvements were allegedly assessed at lower values than other golf courses. Since that time, Lakeview has neither changed the use of the property nor has the property been rezoned.

In August of 1985, the township assessor and another individual made an unannounced visit to Lakeview, preceded by no written notice, to reassess Lakeview's property. On August 23, 1985, the township assessor issued Form 11 notices of assessment on Lakeview's property for the years 1982, 1983, 1984, and 1985, which valued the property at $97,830. Thereafter, the township assessor filed a petition to correct his reassessment 1 for 1982 and 1983, reinstating the $23,260 value assessed in 1979 for 1982 and 1983 and leaving the assessed value of $97,830 for 1984 and 1985.

On September 13, 1985, Lakeview filed Form 130, a petition for review of assessment, with the county board of review (county board) for 1984 and 1985, alleging that the assessment was erroneous because it was "out of line with other courses," and that the property's true cash value was $140,000 with an assessed value of $46,000.

On May 19, 1986, the county board sent Lakeview Form 114, a notice of hearing, which was held on June 4, 1986. On June 27, 1986, the county board issued Form 115, a notice of assessment, which determined the assessed value of Lakeview's property to be $97,830 "[b]ecause: ... [t]he assessment of the Union Township Assessor was determined to be without error." The county board then applied the assessed value of $97,830 to 1986. Lakeview then filed Form 131, a petition for review of the 1984, 1985 and 1986 assessments. In the petition, Lakeview contended the following:

1. The proposed reassessment by the Assessor of Union Township, Delaware County, Indiana, is illegal in that none of the procedures for interim reassessments under Indiana law were followed.

2. The purported reassessment value far exceeds the true cash value of the real property purported to be so assessed.

(a) The Assessor of Union Township, Delaware County, Indiana, failed to properly apply the applicable standards of real property appraisal for real property of this kind.

(b) The purported true cash value is not just, uniform or equal with real property of like kind in Delaware County, Indiana.

The true cash value of the above described property is $69,780.00 and should be assessed at $23,260, being 33 1/3% of true cash value.

On January 16, 1987, the State Board issued Form 225, a notice of hearing on Lakeview's petition, which hearing was held on February 9, 1987. In May of 1987, a hearing officer visited Lakeview's property and assessed the property at a value of $95,930. In conducting the assessment, the hearing officer filled out a new property record card with new figures, although the figures found by the township assessor did appear on the new card.

On September 11, 1989, the State Board issued its final assessment determination, stating:

The assessment of the property listed on this petition was changed due to incorrect classification of the use of land, incorrect measurements of improvements, and the March 1, 1984 assessment increase against Lake County [sic] Club is set aside, as the procedures in IC The March 1, 1986 assessment by the Delaware County Board of Review is set aside. The Taxpayer did not seek relief for the March 1, 1986 assessment nor was a notice of assessment issued by an assessing official for March 1, 1986. The assessment determination by the State Tax Board will carry forward from 1985 until the new reassessment unless changes occur during the interim.

6-1.1-9 were not followed by the Union Township Assessor.

(Emphasis added.)

Lakeview seeks to set aside the State Board's reassessment as applied to 1985 and 1986. Lakeview does not contend that the State Board's assessed value is erroneous or that it is not applicable for 1987 and thereafter.

Lakeview contends the action taken by the township assessor and the county board of review was illegal; the State Board's change of the assessed value for 1985 and 1986 was illegal because the State Board did not give Lakeview notice of its final determination within 3 years from 1985 and 1986; the State Board's final assessment determination for 1985 and 1986 exceeds the authority granted to it by law; and the State Board's final assessment is arbitrary and capricious.

Conversely, the State Board contends in its motion for summary judgment that the assessing officials erroneously assessed the golf course as farmland in 1979. 2 The State Board admits the township assessor's 1984 assessment was improper because he failed to give notice pursuant to IC 6-1.1-9; however, the State Board now contends that the county board properly increased the value under IC 6-1.1-13 or IC 6-1.1-9 for 1985.


Since the State Board set aside the township assessor's and the county board's actions pertaining to March 1, 1984 and March 1, 1986, no issue is presented for those years except as the 1985 assessment carries forward to 1986. Therefore, the only issue before the court is whether the State Board properly applied its assessment to 1985 and 1986.


The parties agree and the court finds that no genuine issue as to any material facts remain. The issues before the court concern the application of IC 6-1.1-13, IC 6-1.1-14, IC 6-1.1-9 and IC 6-1.1-15 to the admitted facts. See Faris Mailing, Inc. v. Indiana Dep't of Revenue (1990), Ind.Tax, 557 N.E.2d 713, 715.

The court's review is limited to determining whether the State Board's determination "is supported by substantial evidence, is an abuse of discretion, is arbitrary or capricious, or is in excess of the State Board's statutory authority." Hatcher v. State Bd. of Tax Comm'rs (1990), Ind.Tax, 561 N.E.2d 852, 853 (citing Bailey Seed Farms, Inc. v. State Bd. of Tax Comm'rs (1989), Ind.Tax, 542 N.E.2d 1389, 1391).

To ascertain the years to which the State Board's assessment applies, the authority under which the State Board conducted its assessment must be determined. The authority to assess property is granted to the State Board in two statutes, IC 6-1.1-15-4 and IC 6-1.1-14-10.

IC 6-1.1-15-4 provides in pertinent part:

(a) After receiving a petition for review which is filed under section 3 of this chapter, the state board of tax commissioners shall conduct a hearing at its earliest opportunity. In addition, the state board may assess the property in question, correcting any errors which may have been made.

(Emphasis added.)

IC 6-1.1-14-10 gives the State Board the authority to

at any time review the assessment or reassessment of any tangible property and may reassess the property. However any change in an assessment is subject to the requirements and limitations prescribed in section 11 of this chapter.

Section 11 provides:

The state board of tax commissioners shall give notice by mail to a taxpayer whose assessment is to be reviewed under section 10 of this chapter. The notice shall state the time, place, and object of a hearing on the assessment.... After the hearing, the state board of tax commissioners shall assess the property in question and mail a certified notice of its final determination to the appropriate county auditor. In addition, the board shall notify the taxpayer by mail of its final determination. However, an assessment or reassessment may not be made under this section unless notice of the board's final determination is given to the taxpayer within the same time period prescribed, in section 3 or section 4 of IC 1971, 6-1.1-9, for giving an assessment adjustment notice.

IC 6-1.1-14-11 (emphasis added).

IC 6-1.1-9-4, which applies to the assessment of real property, provides in pertinent part:

(a) Real property may be assessed, or its assessed value increased, for a prior year under this chapter only if the notice required by section 1 of this chapter is given within three (3) years after the assessment date for that prior year.

Under IC 6-1.1-15-4, there is no express time limitation placed upon the State Board's authority, other than the years of the petition the State Board is reviewing. 3 Conversely, the State Board's authority to review and reassess under IC 6-1.1-14-10 is expressly limited by IC 6-1.1-9-4.

In order for the State Board to correct any errors which may have been made in an assessment when reviewing a petition filed under IC 6-1.1-15-4, there must first be an assessment containing errors to correct. For an assessment to contain errors, a valid assessment must exist. If the State Board's authority under IC 6-1.1-15-4 were interpreted to extend beyond correcting errors of a previously conducted valid assessment, the State Board could have the ability to apply its new reassessment to the years contained in a petition reviewed, even though a valid assessment previously had never been conducted by any official. This would allow the State Board to apply its own reassessment to a period beyond the limits of IC 6-1.1-14-10. See Park 100 Dev. Co. v. Indiana Dep't of Revenue (1981), Ind., 429 N.E.2d 220, 222-23.

A valid assessment can be made if the assessing officials have the authority to assess. State...

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