State Bd. of Tax Com'rs v. Stone City Plaza, Inc.

• Decision Date: 07 October 1974
• Docket Number: No. 1--1073A186,1--1073A186
• Citation: 317 N.E.2d 182,161 Ind.App. 627
• Parties: STATE BOARD OF TAX COMMISSIONERS, Appellant (Defendant Below), v. STONE CITY PLAZA, INC., Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 182

317 N.E.2d 182

161 Ind.App. 627

STATE BOARD OF TAX COMMISSIONERS, Appellant (Defendant Below), v. STONE CITY PLAZA, INC., Appellee (Plaintiff Below).

No. 1--1073A186.

Court of Appeals of Indiana, First District.

Oct. 7, 1974.

Theodore L. Sendak, Atty. Gen., John L. Hess, Deputy Atty. Gen., Indianapolis, for appellant.

Robert L. Mellen, Jr., Mellen & Mellen, Donald A. Erdmann, Bedford, Douglas J. Hill, Cadick, Burns, Duck & Neighbours, Indianapolis, for appellee.

LYBROOK, Judge.

Defendant-appellant State Board of Tax Commissioners (Board) appeals from a judgment remanding the real property assessment of plaintiff-appellee Stone City Plaza, Inc. (Stone City) to Board for reassessment.

The sole issue preserved for review is whether the trial court erred in refusing to permit Board's Hearing Officer to testify.

Stone City owned a shopping center which was assessed by the Lawrence County Board of Review at $296,470. Stone City appealed to Board, contending that the property should have been assessed at $215,000. An administrative hearing was conducted by Board's hearing officer, James McClary, and after receiving McClary's report, Board made its final assessment determination in the sum of $269,680. Seeking further review, Stone City appealed to the Lawrence Circuit Court. After trial the court concluded that Board's action was arbitrary and capricious, an abuse of discretion, not suuported by substantial evidence and was in excess of statutory authority. Board's ruling was set aside and the proceeding remanded to Board for the purpose of reassessment.

When reviewing the actions of an administrative agency it is incumbent upon the trial court to make findings of fact. Ind.Rules of Procedure, Trial Rule 52(A)(2). The trial court herein complied by making extensive findings which consisted chiefly of a comparison between the value of the improvements in Stone City and those of several other shopping centers in the Bedford vicinity. Pages Shopping Center, situated directly across the street from Stone City, was found to be very similar, yet its improvements were assessed at only $5.16 per square foot as compared with Stone City's assessment of $8.50 per square foot. Others compared included Bedford Shopping Plaza and Hunter Bowl, Inc., which the court found to be similarly constructed to Stone City. However, these shopping centers were assessed at only $3.50 and $3.56, respectively.

At trial, Board opened its defense by calling its hearing officer James McClary to the witness stand. However, before any testimony could be elicited, Stone City objected, chiefly on the grounds that McClary was neither a witness at Board's hearing nor could he act as both witness and judge at such hearing. A lengthy debate then ensued between counsel as to the competency of the hearing officer to testify. The court sustained Stone City's objection and excluded McClary's testimony. Board thereupon made an offer to prove, stating in substance that McClary's testimony would have described his investigation in the matter and would have supplied the facts and reasons supporting Board's decision.

In Department of Financial Institutions v. State Bank of Lizton (1969), 253 Ind. 172, 252 N.E.2d 248, our Supreme Court stated:

'It is to be noted that the trial court, in reviewing the administrative decision, cannot retry the facts 'de novo' and cannot come to its own conclusions as to the merits of the case by weighing the facts and evidence. We have held that even though the statute (as in the case of proceedings before the Public Service Commission) provides that the appeal shall be 'de novo,' constitutionally this is not correct. The court cannot hear the matter as a new action and weigh the evidence and determine the facts on the merits as an appeal from a Justice of the Peace court 'de novo,' which is purely a judicial proceeding. An administrative proceeding is not a pure judicial proceeding, but is a proceeding in either the executive or legislative branch of the government. The court's only right or scope of review is limited to a consideration of whether or not there is any substantial evidence to support the finding and order of the administrative body. A court may also determine whether or not the action constitutes an abuse of discretion and is arbitrary or capricious, as revealed by the uncontradicted facts.'

The limited scope of judicial review of an administrative proceeding has been more recently delineated in Uhlir v. Ritz (1970), 255 Ind. 342, 264 N.E.2d 312, wherein Justice Hunter said:

'In making such a determination under that statute we must look at the facts as were found by the agency. Thus,

'The court's only right or scope of review is limited to a consideration of whether or not there is any substantial evidence to support the finding and order of the administrative body.' Department of Financial Inst. v. State Bank of Lizton, supra, 252 N.E.2d at 250.

and if there is we may not disturb it.

In the case at hand a special statute on court review, § 9--3713, supra, was enacted. It states that a review 'de novo' of a license revocation may be secured. It is the term 'de novo' which must concern us. While in the usual sense of that phrase one might envisage a complete retrial of the issues involved, our constitutional relationship with the other branches of government precludes such a review. Our legislature is aware of our duty and its scope and we will not attach to its language the innuendo that it wishes our courts to exceed the bounds of proper re-examination. Even if such was clearly mandated, we could proceed only so far in such reviews as the dictates of constitutional law permit.

Thus, a court reviewing under a de novo statutory direction may, to a limited extent,...