Piotrowski BK #5643, LLC v. Shelby Cnty. Assessor, Cause No. 21T-TA-00004

Docket NºCause No. 21T-TA-00004
Citation177 N.E.3d 127
Case DateSeptember 16, 2021
CourtTax Court of Indiana

177 N.E.3d 127

PIOTROWSKI BK #5643, LLC, Petitioner,
v.
SHELBY COUNTY ASSESSOR, Respondent.

Cause No. 21T-TA-00004

Tax Court of Indiana.

September 16, 2021


ATTORNEY FOR PETITIONER: MELISSA G. MICHIE, TAX CONSULTANTS, INC., Columbus, IN

ATTORNEYS FOR RESPONDENT: MARILYN S. MEIGHEN, ATTORNEY AT LAW, Carmel, IN, BRIAN A. CUSIMANO, ATTORNEY AT LAW, Indianapolis, IN, AYN KATHERINE ENGLE, ATTORNEY AT LAW, Indianapolis, IN

WENTWORTH, J.

Piotrowski BK #5643, LLC (Piotrowski) challenges the Indiana Board of Tax Review's final determination valuing its real property for the 2019 tax year. Upon review, the Court affirms the Indiana Board's final determination.

FACTS AND PROCEDURAL HISTORY

Piotrowski owns a fast-food restaurant in Shelbyville, Indiana. (See Cert. Admin. R. at 65.) The restaurant was constructed in 1987. (See Cert. Admin. R. at 66.)

In 2016, Piotrowski spent approximately $300,000 renovating the restaurant and

177 N.E.3d 130

constructing a detached masonry wall on its property. (See Cert. Admin. R. at 59, 65-66.) The Shelby County Assessor subsequently increased the assessment of Piotrowski's improvements, effective for the 2017 tax year, from $466,700 to $623,200.1 (See Cert. Admin. R. at 65.) For the 2018 tax year, the Assessor again increased the assessed value of Piotrowski's improvements, from $623,200 to $652,800. (See Cert. Admin. R. at 65.) Piotrowski did not appeal either of those assessment increases. (See Cert. Admin. R. at 65.)

In 2019, however, Piotrowski initiated an appeal challenging the assessment of its restaurant building only.2 (See Cert. Admin. R. at 6.) The Shelby County Property Tax Assessment Board of Appeals denied the appeal, and Piotrowski sought review with the Indiana Board. (See Cert. Admin. R. at 1 - 5.) The Indiana Board held a telephonic hearing on the matter on October 1, 2020. (Cert. Admin. R. at 13.)

During the Indiana Board hearing, Piotrowski argued that its building was over-assessed because the Assessor failed to properly apply the depreciation tables contained in Indiana's Assessment Guidelines. (See Cert. Admin. R. at 120-25.) More specifically, Piotrowski explained that under those Guidelines, its building – which was 32 years old and in average condition – would have received an 80% physical depreciation adjustment. (See Cert. Admin. R. at 122-24.) Instead, Piotrowski continued, the Assessor gave a mere 10% physical depreciation adjustment as the result of adjusting the building's actual age to an effective age of 3 years to account for the impact of the 2016 renovations. (See Cert. Admin. R. at 66, 120, 123-24.) Piotrowski argued that the Guidelines permit this effective age adjustment only when square footage is added to a building's original footprint. (But see Cert. Admin. R. at 122-24 (indicating that no square footage was added to the restaurant's footprint during the renovation).)

In response, the Assessor asserted that the application of the Guidelines’ depreciation schedules advocated by Piotrowski would not have accurately reflected the restaurant building's market value-in-use. (See Cert. Admin. R. at 128-30.) The Assessor explained that Piotrowski's extensive renovation of the building effectively rendered it a brand-new building, thereby increasing the structure's life expectancy and decreasing the amount of physical depreciation that it actually suffered. (See Cert. Admin. R. at 129-30, 134.) Moreover, the Assessor maintained that the Guidelines afforded her the discretion to compute an effective age for the restaurant building, which impacted the amount of physical depreciation applied in determining the property's market value-in-use. (See Cert. Admin. R. at 129-30, 134.)

On December 30, 2020, the Indiana Board issued a final determination upholding the assessment. (See Cert. Admin. R. at 105-13.) In its final determination, the Indiana Board explained that because Piotrowski bore the burden of proof in its case, Tax Court precedent required it to do more than attack the methodology used to determine its assessment. (See Cert. Admin. R. at 111 ¶ 18(c) (citing Eckerling v. Wayne Twp. Assessor, 841 N.E.2d 674 (Ind. Tax Ct. 2006) ; P/A Builders & Developers, LLC v. Jennings Cnty. Assessor, 842 N.E.2d 899 (Ind. Tax Ct. 2006) ).) Rather, Piotrowski was required to present

177 N.E.3d 131

market-based evidence to demonstrate that the assessment did not accurately reflect its building's market value-in-use. (See Cert. Admin. R. at 111-12 ¶ 18(c).) Because it presented no market-based evidence, the Indiana Board found that Piotrowski failed to make a prima facie case that its property was over-assessed. (Cert. Admin. R. at 111-12 ¶¶ 18-19.)

Piotrowski initiated this original tax appeal on February 11, 2021. The Court conducted an oral argument on August 5, 2021. Additional facts will be supplied when necessary.

STANDARD OF REVIEW

The party seeking to overturn an Indiana Board final determination bears the burden of demonstrating its invalidity. Osolo Twp. Assessor v. Elkhart Maple Lane Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003). Thus, to prevail in its appeal, Piotrowski must demonstrate to the Court that the Indiana Board's final determination is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege or immunity; in excess of or short of statutory jurisdiction, authority, or limitations; without observance of the procedure required by law; or unsupported by substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5) (2021).

LAW

Since 2002, Indiana has assessed real property on the basis of its market value-in-use. See generally IND. CODE § 6-1.1-31-6(c), (e) - (f) (2021) ; 2002 REAL PROPERTY ASSESSMENT MANUAL (2004 Reprint) ("2002 Manual") at 2 (incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2 (2002 Supp.) (repealed 2010)); 2011 REAL PROPERTY ASSESSMENT MANUAL ("2011 Manual") at 2 (incorporated by reference at 50 IND. ADMIN. CODE 2.4-1-2 (2011) ); 2021 REAL PROPERTY ASSESSMENT MANUAL ("2021 Manual") at 2 (incorporated by reference at 50 IND. ADMIN. CODE 2.4-1-2 (2020) ). To determine a property's market value-in-use, Indiana assessors may use any of the three standard appraisal approaches for valuing property (i.e., the cost approach, the sales comparison approach, and the income approach). See 2002 Manual at 3-4; 2011 Manual at 2; 2021 Manual at 2. A property's market value-in-use is, in most instances, its market value. See, e.g., Howard Cnty. Assessor v. Kohl's Indiana LP, 57 N.E.3d 913, 917 (Ind. Tax Ct. 2016), review denied; Millennium Real Est. Inv., LLC v. Assessor, Benton Cnty., 979 N.E.2d 192, 196 (Ind. Tax Ct. 2012), review denied.

Recognizing that the cost approach is the prevalent method for valuing property by assessing officials, the Department of Local Government Finance ("DLGF") promulgated Indiana's Assessment Guidelines. See generally IND. CODE § 6-1.1-4-26 (2021) ; REAL PROPERTY ASSESSMENT GUIDELINES FOR 2002 – Version A, Books 1 and 2 (incorporated by reference at 50 I.A.C. 2.3-1-2); REAL PROPERTY ASSESSMENT GUIDELINES FOR 2011 (incorporated by reference at 50 I.A.C. 2.4-1-2 (2011) ); REAL PROPERTY ASSESSMENT GUIDELINES FOR 2021 (incorporated by reference...

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1 practice notes
  • Phipps v. State, Court of Appeals Case No. 21A-CR-587
    • United States
    • Indiana Court of Appeals of Indiana
    • October 7, 2021
    ...argues the evidence was insufficient to show that he had contact with minors. We agree. The word "contact" does not clearly apply to [177 N.E.3d 127 Phipps's behavior as alleged. See Hunter v. State , 883 N.E.2d 1161, 1164 (Ind. 2008).[15] As our Supreme Court observed in Hunter , " ‘contac......
1 cases
  • Phipps v. State, Court of Appeals Case No. 21A-CR-587
    • United States
    • Indiana Court of Appeals of Indiana
    • October 7, 2021
    ...argues the evidence was insufficient to show that he had contact with minors. We agree. The word "contact" does not clearly apply to [177 N.E.3d 127 Phipps's behavior as alleged. See Hunter v. State , 883 N.E.2d 1161, 1164 (Ind. 2008).[15] As our Supreme Court observed in Hunter , " ‘contac......

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