Scheub v. STATE BD. OF TAX COM'RS

• Decision Date: 22 September 1999
• Docket Number: No. 49T10-9509-SC-00107.,49T10-9509-SC-00107.
• Citation: 716 N.E.2d 638
• Parties: Gerry J. SCHEUB, Petitioner, v. STATE BOARD OF TAX COMMISSIONERS, Respondent.
• Court: Indiana Tax Court

716 N.E.2d 638

Gerry J. SCHEUB, Petitioner, v. STATE BOARD OF TAX COMMISSIONERS, Respondent.

No. 49T10-9509-SC-00107.

Tax Court of Indiana.

September 22, 1999.

Crystal Bauer, Richard F. James, James, James & Manning, P.C., Dyer, IN, Attorneys for Petitioner.

Jeffrey A. Modisett, Attorney General of Indiana, Marilyn S. Meighen, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.

FISHER, J.

The Petitioner, Gerry J. Scheub (Scheub), appeals the final determination of the State Board of Tax Commissioners (State Board) assigning a 35% physical depreciation to Scheub's home following a 1992 interim reassessment of his property. In this original tax appeal, Scheub disputes the State Board's decision to lower his assigned level of physical depreciation from 45% to 35% and challenges the validity of the township assessor's interim reassessment.

ISSUES

I. Whether the Court has subject matter jurisdiction to decide the validity of the interim reassessment.

II. Whether the interim reassessment of Scheub's property is void because the Lake County Board of Review never ordered the St. John Township Assessor to perform the reassessment, in violation of IND. CODE ANN. § 6-1.1-13-8 (West 1989) (amended 1997);

III. Whether the interim reassessment is void because the township assessor failed to send Scheub notice that his property was to be reassessed pursuant to IND.CODE ANN. § 6-1.1-9-1 (West 1989) (amended 1993 & 1997); and

IV. Whether the State Board lacked authority to reassess Scheub's property under either IND.CODE ANN. § 6-1.1-14-10 (West 1989) or IND.CODE ANN. § 6-1.1-15-4 (West 1989) (amended 1993, 1995 & 1997).¹

FACTS AND PROCEDURAL HISTORY

Scheub owns residential real estate in St. John Township, Lake County, Indiana. The property was reassessed in 1989 as part of the general, state-wide reassessment and was reassessed in 1991. See IND.CODE ANN. § 6-1.1-4-4 (West 1989) (amended 1997). On August 4, 1991, St. John Township Assessor Terry A. Barczak (Barczak) requested that the Lake County Board of Review (BOR) issue an order for the reassessment of township property. On August 12, 1991, the BOR voted to authorize Barczak to "re-evaluate" all land and improvements within the township.² Barczak subsequently conducted an interim reassessment of township property. The effective date of the interim reassessment was March 1, 1992.

Barczak fixed the assessed value of Scheub's property at $14,430 ($1,830 for land and $12,600 for improvements). Scheub filed a Form 130 Petition for Review of Assessment with the BOR on December 1, 1992. On November 18, 1993, the BOR issued its assessment determination, making no changes in the assessed value of Scheub's property. Scheub filed a Form 131 Petition for Review of Assessment with the State Board on December 15, 1993. In the petition, Scheub alleged, among other things, that Barczak never received an order from the BOR to reassess township property under section 6-1.1-13-8, that Barczak failed to provide notice of the interim reassessment under section 6-1.1-9-1, and that the State Board improperly declined to increase the assigned value of physical depreciation on his home from 45% to 60%. On June 30, 1994, the State Board issued notice to Scheub that a hearing on his petition was scheduled for July 14, 1994. On August 11, 1995, the State Board issued a final assessment determination. In its decision, the State Board declined to address the validity of the interim reassessment.³ The State Board did conclude that the home's average condition rating combined with an average neighborhood rating generated a physical depreciation of 35%. See IND. ADMIN. CODE tit. 50, r. 2.2-7-12 (1996).

Scheub commenced this original tax appeal on September 22, 1995. The Court conducted a trial on July 26, 1996. Following the parties' submissions of proposed findings of fact, conclusions of law and supporting briefs, the Court heard oral argument in this matter on March 21, 1997. Additional facts will be supplied as necessary.

ANALYSIS AND OPINION

Standard of Review

This Court gives the final determinations of the State Board great deference when the State Board acts within the scope of its authority. See Wetzel Enters., Inc. v. State Bd. of Tax Comm'rs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct.1998). Accordingly, this Court reverses final determinations of the State Board only when those decisions are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse of discretion, or exceed statutory authority. See id. Scheub bears the burden of demonstrating that the State Board's final determination is invalid. See Clark v. State Bd. of Tax Comm'rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct.1998).

Discussion

I

As a preliminary issue, the State Board incorrectly contends that this Court lacks subject matter jurisdiction to declare the interim assessment void. The Indiana Tax Court has exclusive jurisdiction over any case, such as the present one, which arises under state tax laws and which is an initial appeal from the State Board. See IND.CODE ANN. § 33-3-5-2 (West 1996). In deciding property tax matters, the Court has the authority to determine whether local officials or boards properly followed statutory procedures. See, e.g., Dalton Foundries v. State Bd. of Tax Comm'rs, 653 N.E.2d 548, 552 (Ind. Tax Ct.1995) (concluding that statutes require county auditors to forward every Form RRS-1 to the proper township assessor, regardless of whether the form was filed in a timely or untimely manner).

In asserting its challenge to the Court's subject matter jurisdiction, the State Board may be attempting to argue that Scheub represents only himself in the present case and not a class of township real property owners. To the extent that this is the State Board's position, the Court notes that Scheub is not pursuing a class action; he did not bring this original tax appeal as a representative of township taxpayers pursuant to Ind. Trial Rule 23. See McCart v. Chief Executive Officer in Charge, Indep. Fed. Credit Union, 652 N.E.2d 80, 82-83 (Ind.Ct.App.1995) (describing two-step procedure for determining propriety of class action certification), trans. denied; Independence Hill Conservancy Dist. v. Sterley, 666 N.E.2d 978, 981 (Ind.Ct.App.1996) (observing that, without a properly defined class, a class action cannot be maintained). Therefore, any relief afforded Scheub in this matter cannot serve as a remedy for other taxpayers in St. John Township.

II

Scheub challenges the validity of the interim reassessment. He contends that the BOR violated the provisions of section 6-1.1-13-8, which in relevant part states, "If the [county] board finds that the aggregate assessment of a township is too high or too low or that it is generally so unequal as to render it impracticable to equalize the aggregate assessment, the board may set aside the assessment of the township and order a new assessment." Because the BOR made no such finding, Scheub argues, the interim reassessment is void.

Scheub incorrectly asserts that the interim reassessment itself is void for lack of the required finding. Section 6-1.1-13-8 does not grant the BOR authority to conduct a reassessment. Cf. Matonovich v. State Bd. of Tax Comm'rs, 705 N.E.2d 1093, 1098 (Ind. Tax Ct.1999) (holding that State Board does not have authority under IND.CODE ANN. § 6-1.1-4-9 (West 1989) to conduct reassessment of county property and therefore does not have authority to hire contractors to do so on its behalf). Rather, under the statute, the BOR may only set aside a township assessment and order a new assessment. See IND.CODE ANN. § 6-1.1-13-8 (West 1989) (amended 1997); see also State Bd. of Tax Comm'rs v. Stanley, 123 Ind.App. 64, 105 N.E.2d 830, 832 (1952) (under a previous version of the statute, "the only power vested in [county board] ... was to set aside the assessment of the whole county and order a new assessment with instructions to the assessors ...."), opinion on denial of reh'g, 123 Ind.App. 64, 106 N.E.2d 812, opinion on denial of trans., 231 Ind. 338, 108 N.E.2d 624.

A finding as to the township's aggregate assessment was a condition precedent to any action by the BOR setting aside the prior assessment and ordering a new assessment. According to the BOR's minutes from the August 12 meeting, Board Member Tony Zaleski moved "to authorize the St. John Township Assessor to re-evaluate all land and improvements within the township pursuant to the written request of [Barczak]. This motion was seconded by [Board Member] Tom Devine, and the [BOR] voted in favor of said motion 4-0." (Pet'r Ex. 5). Thus, no finding was ever made and the prior assessment was never set aside. Because the requisite finding was not made, the BOR could not order the township's interim reassessment under section 6-1.1-13-8. Thus, the BOR's August 12 vote ordering (or "authorizing") the interim reassessment was invalid. However, a determination that the BOR's order was invalid does not dictate a finding that the interim reassessment was likewise invalid, because Barczak had authority to independently reassess Scheub's property under section 6-1.1-9-1.

III

Scheub also maintains that the interim assessment was invalid because Barczak failed to give him proper notice of the proposed increase in assessment pursuant to section 6-1.1-9-1. Section 6-1.1-9-1 provides that the township assessor, if she "believes that any taxable tangible property has been omitted from, or undervalued on, the assessment rolls or the tax duplicate ... [,] shall give written notice... to the taxpayer of the intention of the official ... to increase" the property's assessment. Id. (emphasis added). In addition, the statute affords the taxpayer an opportunity to appear before the township assessor to show "good cause why the proposed action should not be taken...." Id. Under this section, Barczak had authority to increase Scheub's individual assessment...