New Winchester Gardens, Ltd. v. Franklin County Bd. of Revision

• Decision Date: 08 October 1997
• Docket Number: No. 96-1755,96-1755
• Citation: 684 N.E.2d 312,80 Ohio St.3d 36
• Parties: NEW WINCHESTER GARDENS, LTD., Appellant, v. FRANKLIN COUNTY BOARD OF REVISION et al., Appellees.
• Court: Ohio Supreme Court

Page 36

80 Ohio St.3d 36

684 N.E.2d 312

NEW WINCHESTER GARDENS, LTD., Appellant, v. FRANKLIN COUNTY BOARD OF REVISION et al., Appellees.

No. 96-1755.

Supreme Court of Ohio.

Submitted Feb. 25, 1997.

Decided Oct. 8, 1997.

Todd W. Sleggs, Cleveland, for appellant.

Ronald J. O'Brien, Franklin County Prosecuting Attorney, James R. Gorry and Matthew Chafin, Assistant County Prosecutors, for appellees Franklin County Board of Revision and Franklin County Auditor.

Teaford, Rich & Wheeler and Jeffrey A. Rich, Columbus, for appellee Groveport Madison Local Schools Board of Education.

PER CURIAM.

New Winchester's first argument is that the BTA erred in its application of the doctrine of res judicata to preclude certain evidence in this matter. We disagree.

The relevant portion of the BTA decision states:

"This Board and the Court of Appeals, based upon the probative evidence and record before them determined that the 1984 sale constituted an arm's-length sale, and that the sale price was the market value of such property at the time of that sale, as well as specifically applicable to the tax year 1986. Those ultimate fact and legal determinations are now applicable and conclusively binding upon the parties and this Board in this tax year 1987 case, under the established legal doctrine of res judicata."

Based on this determination, the BTA refused to consider additional evidence which went to the issue of whether the 1984 sale was an arm's-length transaction.

The concept of res judicata was explained in Grava v. Parkman Twp. (1995), 73 Ohio St.3d 379, 381, 653 N.E.2d 226, 228, as involving "both claim preclusion (historically called estoppel by judgment in Ohio) and issue preclusion (traditionally known as collateral estoppel)." This case involves collateral estoppel. In Superior's Brand Meats, Inc. v. Lindley (1980), 62 Ohio St.2d 133, 16 O.O.3d 150, 403 N.E.2d 996, we confirmed that the doctrine of collateral estoppel may under appropriate circumstances be applied to decisions of the BTA.

The purpose of collateral estoppel is to preclude "the relitigation, in a second action, of an issue that has been actually and necessarily litigated and determined in a prior action which was based on a different cause of action." (Emphasis sic.) Whitehead v. Gen. Tel. Co. (1969), 20 Ohio St.2d 108, 112, 49 O.O.2d 435, 437, 254 N.E.2d 10, 13.

While this case involves the same parties and the same property as involved in the 1986 case, it concerns a different tax year and therefore is a different cause of action. Std. Oil Co. v. Zangerle (1943), 141 Ohio St. 505, 26 O.O. 82, 49 N.E.2d 406.

In Thompson v. Wing (1994), 70 Ohio St.3d 176, 183, 637 N.E.2d 917, 923, we stated that collateral estoppel was applicable when the fact or issue "(1) was actually and directly litigated in the prior action, (2) was passed upon and determined by a court of competent jurisdiction, and (3) when the party against whom collateral estoppel is asserted was a party in privity with a party to the prior action." See, also, Goodson v. McDonough Power Equip., Inc. (1983), 2 Ohio St.3d 193, 2 OBR 732, 443 N.E.2d 978.

With the foregoing background we turn to a consideration of the hearing before the BTA for tax year 1986. New Winchester, as the appellant before the BTA, bore the burden of proving its right to a reduction in value. R.R.Z. Assoc v. Cuyahoga Cty. Bd. of Revision (1988), 38 Ohio St.3d 198, 527 N.E.2d 874. A major problem faced by New Winchester in meeting its burden was to overcome the concept that "[t]he best evidence of 'true value in money' of real property is an actual, recent sale of the property in an arm's-length transaction." Conalco, Inc. v. Monroe Cty. Bd. of Revision (1977), 50 Ohio St.2d 129, 4 O.O.3d 309, 363 N.E.2d 722, paragraph one of the syllabus. One of the ways New Winchester attempted to overcome evidence of the 1984 sale was to show that the sale was not an arm's-length transaction. If New Winchester could prove that the sale was not an arm's-length sale, then it would have been appropriate for the BTA to review independent appraisals based upon factors other than the price to show that the 1984 sale price did not reflect true value. Ratner v. Stark Cty. Bd. of Revision (1986), 23 Ohio St.3d 59, 23 OBR 192, 491 N.E.2d 680, syllabus.

At the BTA hearing, for tax year 1986, New Winchester introduced the testimony of appraiser John Garvin. In addition to his appraisal testimony, Garvin, over objection, testified to details concerning the 1984 sales transaction. However, in its final decision, the BTA rejected Garvin's testimony as hearsay because he had no personal knowledge of the sale, and the sale documents were not introduced. Garvin's testimony before the BTA was described by the Franklin County Court of Appeals as follows:

"The gist of the disputed testimony is that the property transfer was not an arm's-length transaction, but, rather a resyndication. * * * " New Winchester Gardens v. Franklin Cty. Bd. of Revision (Sept. 28, 1989), Franklin App. Nos. 89AP-72 and 89AP-73, unreported, 1989 WL 112349.

A review of the BTA's decision for tax year 1986 and the relevant criteria in Thompson for the application of res judicata show that the criteria required to invoke collateral estoppel are present in this case as to the arm's-length nature of the 1984 sale. The parties involved in the litigation are the same parties that were involved in the litigation for the 1986 tax year. Both the BTA and the Franklin County Court of Appeals determined that New Winchester raised the issue of whether the 1984 sale was an arm's-length sale for the 1986 tax year. The fact that New Winchester's evidence failed to prove that the 1984 sale was not an arm's-length transaction is of no consequence. The important fact is that the issue was raised and decided in the prior case. Heiser v. Woodruff (1946), 327 U.S. 726, 66 S.Ct. 853, 90 L.Ed. 970.

New Winchester's second argument is that R.C. 5715.19(G) is not applicable in this case. We agree.

In its opinion, the BTA stated two reasons for excluding Haynes's testimony under R.C. 5715.19(G). The first reason was that the information presented by Haynes was not presented to the BTA or the board of revision in the 1986 case. The second reason was that that information was not offered to the board of revision in the present case. Neither of these reasons is valid.

R.C. 5715.19(G) provides in part:

"A complainant shall provide to the board of revision all information or evidence within his knowledge or possession that affects the real property that is the subject of his complaint. A complainant who fails to provide such information or evidence is precluded from introducing it on appeal to the board of tax appeals * * * except that the board of tax appeals * * * may admit and consider the evidence if the complainant shows good cause for his failure to provide the information or evidence to the board of revision."

The word "complainant" is not defined in R.C. 5715.19(G). Black's Law Dictionary (6 Ed.1990) 285, defines a "complainant" as "[o]ne who applies to the courts for legal redress by filing complaint." The reference to a "complainant" in R.C. 5715.19(G) clearly refers to the entity that filed the complaint in question with a board of revision.

The BTA's contention that R.C. 5715.19(G) precluded Haynes's testimony at the BTA hearing because it was not presented to the BOR is not correct. A review of the record in this case discloses that the only complaints filed with the BOR were filed by the BOE. No countercomplaints were filed by New Winchester. Thus, New Winchester was not a complainant before...