Remington Clean Fill LLC v. Milford Exempted Vill. Sch. Bd. of Educ.
| Decision Date | 25 October 2021 |
| Docket Number | NO. CA2020-12-074,CA2020-12-074 |
| Citation | 179 N.E.3d 665 |
| Parties | REMINGTON CLEAN FILL LLC, Appellant, v. MILFORD EXEMPTED VILLAGE SCHOOLS BOARD OF EDUCATION, et al., Appellees. |
| Court | Ohio Court of Appeals |
Aronoff, Rosen & Hunt LPA, and Edward P. Akin and Richard A. Paolo, Cincinnati, for appellant.
David C. DiMuzio, Inc., and David C. DiMuzio and Matthew C. DiMuzio, for appellee, Milford Exempted Village Schools Board of Education.
Mark J. Tekulve, Clermont County Prosecutor, and Jason A. Fountain, Assistant Prosecuting Attorney, for appellees, Clermont County Board of Revision and Clermont County Auditor.
Dave Yost, Ohio Attorney General, for appellee, Ohio Tax Commissioner.
{¶ 1} Appellant, Remington Clean Fill LLC ("Remington"), appeals a decision of the Board of Tax Appeals ("BTA") which adopted $2,184,004 as the property value for tax year 2018 for two adjoining parcels located in Loveland, Ohio (the "Property").
{¶ 2} The Clermont County Auditor valued the Property at $690,900 for tax year 2018. On April 9, 2018, the Property was transferred twice as part of a sale including real property and personalty for a single purchase price – a type of sale commonly known as "bulk sale." See Buckeye Terminals, L.L.C. v. Franklin Cty. Bd. of Revision , 152 Ohio St.3d 86, 2017-Ohio-7664, 93 N.E.3d 914. In the first sale, McDump, LLC ("McDump"), sold the Property to Decker Building Group LLC ("Decker Building") for a total purchase price of $2,184,000. The conveyance-fee statement allocated $1,684,000 of the purchase price toward real property and $500,000 toward personalty. In the second sale, Decker Building sold the Property to Remington for a total purchase price of $2,500,000. The conveyance-fee statement allocated $900,000 of the purchase price toward real property and $1,600,000 toward personalty. Decker Building and Remington are both owned by Jeffrey Decker.
{¶ 3} Milford Exempted Village School District Board of Education ("school board") subsequently filed an increase complaint with the Clermont County Board of Revision ("BOR"), challenging the auditor's valuation and requesting that the true value of the Property be increased to $1,684,000, based upon the conveyance-fee statement of the first sale.
{¶ 4} At the BOR hearing, the school board argued that the first sale should be adopted as evidence of the Property's true value because the second sale was not an arm's length transaction as Jeffrey Decker owned both Decker Building and Remington and signed for both companies on the closing statement. Remington argued that the Property included stockpiles of gravel and dirt, equipment, and inventory, which are personalty and should be valued according to the conveyance-fee statement of the second sale. Remington presented the testimony of Jeffrey Decker ("Jeffrey") and Chase Decker ("Chase"), Jeffrey's son and co-owner of Remington (the father and son will be collectively referred to as the Deckers).
{¶ 5} Jeffrey testified that the Property was bought specifically for its stockpiles of dirt and gravel, equipment, and inventory. Jeffrey testified that McDump refused to allocate more than $500,000 of the $2,184,000 purchase price to personalty, and advised it had a second buyer on standby if Decker Building declined the terms of the transaction. Decker Building proceeded with the first sale using McDump's allocation and, based upon legal advice, corrected the allocation with the second sale. Jeffrey opined that McDump's allocation was driven by "capital gains or income tax."
{¶ 6} During Jeffrey's testimony, counsel for the school board referred to the addendum included in the closing statement for the second sale. The addendum itemizes, quantifies, and values the personalty included in the sale as follows:
Jeffrey could not remember who prepared the addendum, stated they worked with attorneys, and testified, "we did a competitor analysis based on what material was selling for in the general market."
{¶ 7} The school board's counsel inquired of Jeffrey concerning the $1,000,000 valuation for dirt. Jeffrey advised, "I've been developing for 30 years, I know what dirt costs." Jeffrey testified that the $1,000,000 allocation toward dirt was actually a third of its value according to industry standards and that every listed item of personalty was in fact undervalued. No other documentation was provided regarding the valuation of the personalty.
{¶ 8} Chase also testified concerning the valuation of the various personalty items enumerated in the addendum. Chase testified that he and Jeffrey had been in the business for 15 years and 30 years, respectively, and were "experts on dirt moving equipment." Chase stated that the amount of dirt on the Property was conservatively estimated to be 200,000 yards and that the $1,000,000 allocation toward the dirt was actually undervalued.1 Chase stated that the values listed on the addendum for the dirt ($1,000,000), the blacktop grindings ($200,000), and the mixed gravel ($200,000) were conservative estimates of sales prices his company received for those materials (the dirt, blacktop grindings, and mixed gravel will be collectively referred to as the "Materials"). Chase testified that the value for the other items listed in the addendum, to wit, the cranes, earthmovers, scrap metal, dump truck, sandblaster, and arc welder, were determined based upon Internet research and third parties’ opinions (these other items listed in the addendum will be collectively referred to as the "Equipment"). The third parties consulted by the Deckers were not identified and none of them testified.
{¶ 9} Theresa Mahon, a commercial appraiser for the auditor's office, testified that she has been engaged in commercial appraising for 30 years, with certifications in Ohio, Kentucky, and Indiana. Mahon testified that she did not know which sale was truly an arm's length transaction, that she did not have the expertise to say whether the personalty allocation in the second sale was reasonable, and that the personalty allocation in the second sale had "more support than what I see on the first sale." Mahon asserted that she had reviewed the auditor's $690,900 valuation of the Property to confirm that "we have the right acreage, * * * the right adjustments on there for the configuration and these types of things that we value land according to." Based upon the foregoing, Mahon advocated for the retention of the auditor's valuation.
{¶ 10} The BOR retained the auditor's $690,900 valuation, and the school board appealed to the BTA. At the BTA, the parties waived a hearing and presented their arguments through briefs, relying upon the BOR record. The record included the conveyance-fee statement for each sale, closing statements for both sales, and the closing statement addendum of the second sale. The school board argued that the first sale was the only arm's length transaction; there was no evidence to support the first sale's $500,000 allocation toward personalty; and Remington specifically stated that the first sale's personalty allocation did not reflect the value of the personalty. Accordingly, the school board argued that the total purchase price of $2,184,000 of the first sale should be adopted as the true value of the Property.
{¶ 11} The BTA issued its decision on November 30, 2020. It noted that a recent, arm's length sale constitutes the best evidence of a property's value. It defined an arm's length sale as one that is voluntary, i.e., without compulsion or duress, and that takes place in an open market in which the parties to the sale act in their own self-interest. The BTA found that the second sale between Decker Building and Remington was not an arm's length sale because it was a transaction "from one of Mr. Decker's companies to another solely for tax purposes." The BTA further rejected Remington's evidence of its personalty valuation in the second sale. The BTA found that Remington "supplied no confirmable evidence about what resources it used to value the property, e.g., internet websites," that the third parties’ opinions as to valuation was hearsay, and that Chase, the sole witness regarding valuation, was not an appraiser.
{¶ 12} By contrast, the BTA found that the first sale between McDump and Decker Building was an arm's length transaction because it occurred in an open market with multiple bidders and Decker Building was not under economic duress. Nonetheless, the BTA found that the $500,000 allocation toward personalty was not supported because Accordingly, the BTA valued the Property at the full purchase price of $2,184,004, thereby allocating $0 of the purchase price to personalty.
{¶ 13} Remington now appeals, raising three assignments of error. For ease of discussion, we will address the assignments of error out of order.
{¶ 14} "In an appeal from a county board of revision's valuation decision, the BTA must determine the taxable value of the property at issue." Buckeye , 152 Ohio St.3d 86, 2017-Ohio-7664, 93 N.E.3d 914 at ¶ 14. The fair market value of property for tax purposes is a question of fact that is primarily within the province of the taxing...
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