Sterling Management-Orchard Ridge Apartments v. STATE BD. OF TAX COM'RS
Decision Date | 26 June 2000 |
Docket Number | No. 49T10-9701-TA-41.,49T10-9701-TA-41. |
Citation | 730 N.E.2d 828 |
Parties | STERLING MANAGEMENT-ORCHARD RIDGE APARTMENTS, Petitioner, v. STATE BOARD OF TAX COMMISSIONERS, Respondent. |
Court | Indiana Tax Court |
Curtis J. Dickinson, Dickinson & Abel, David L. Pippen, Indianapolis, IN, Attorneys for Petitioner.
Karen M. Freeman-Wilson, Attorney General of Indiana, Ted J. Holaday, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.
Petitioner Sterling Management-Orchard Ridge Apartments (Sterling) appeals the final determination of the State Board of Tax Commissioners (State Board) denying Sterling's request to lower the assessed value of its property as of the March 1, 1993 assessment date. In this original tax appeal, Sterling presents the following issues for the Court's review:
I. Whether the State Board improperly assessed a retaining wall on the subject property;
II. Whether the State Board erroneously valued iron fencing on the subject property, where the State Board's regulations do not assign values to such fencing; and
III. Whether the State Board incorrectly assigned a grade of C plus one to Sterling's apartment complex.1
Sterling is a corporation with its principal place of business in Kosciusko County, Indiana. Sterling owns parcel number XXX-XXXXX-XX, upon which is located an apartment complex known as the Orchard Ridge Apartments. Local assessing officials valued the subject property's land and improvements at a total value of $897,670 for the March 1, 1993 assessment date. Sterling filed a Form 130 petition for review with the Kosciusko County Board of Review (BOR) on September 8, 1993, claiming that an incorrect grade of C plus one was assigned to the subject improvement. On June 17, 1994, the BOR affirmed the subject improvement's assigned grade.
Thereafter, on July 28, 1994, Sterling filed a Form 131 petition for review with the State Board. In the petition, Sterling stated that the subject improvement's grade was "excessive based on materials used for construction [and] should be C-2 [instead of] C + 1." (Def's Ex. A at 3.) The State Board held a hearing on the petition on November 28, 1995. In its final determination, dated November 22, 1996, the State Board lowered the subject property's total assessed value to $885,870. It did not alter the subject improvement's grade. Instead, the lowered assessment resulted from a change in the subject property's land classification and from a downward adjustment of iron fencing on the property.
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. The taxpayer bears the burden of demonstrating the invalidity of the State Board's final determination. See Clark v. State Bd. of Tax Comm'rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct.1998).
The Court will consider each of Sterling's issues in turn.
Sterling contends that the State Board improperly assessed a retaining wall on the subject property. According to Sterling, Mr. Gary Utt (Utt), the State Board's Hearing Officer in this matter, admitted that he could not identify a retaining wall on the property and would not have assigned a value to any retaining wall that may have been present. Sterling argues that, because Utt admitted that no value should be assigned to any retaining wall, the issue should be remanded to the State Board for a correction of error. Sterling essentially complains that the State Board's final determination on this issue was not supported by substantial evidence or, in the alternative, was arbitrary and capricious.
704 N.E.2d at 1119-20. A taxpayer's conclusory statements are not probative evidence. See id. at 1119.
"Yard improvements" are "improvements to the property that generally are detached from the principal building, and are recorded and priced separately." IND. ADMIN. CODE tit. 50, r. 2.1-4-3(g) (1992) ( ). Only those yard improvements that "add value to the property and that are not included in land improvements are included in the replacement cost schedule." Id., r. 2.1-4-3(g)(2) ( ). The State Board's regulations include values to calculate the replacement costs of yard improvements, including values for retaining walls. See id., r. 2.1-4-5 (1992) (Schedule G) (codified in present form at id., r. 2.2-12-5 (1996)). A retaining wall is a "wall designed primarily to withstand lateral pressures of earth or other filling or backing deposited behind it after construction." Id., r. 2.1-6-1 ( ). Retaining walls are "to be considered only if they add value as an improvement over and above the curing contribution considered in the site valuation." Id., r. 2.1-4-5. To prove that the State Board's assessment of the retaining wall was improper, Sterling was obligated to submit evidence of probative value to the State Board showing that the retaining wall in question was not present, was present but added no value as an improvement over and above the curing contribution considered in the site valuation2 or was present and had a value different from its assessed value.
The evidence presented at trial by Sterling was scant. The State Board's final determination, a copy of which was admitted into evidence as part of the State Board's transcript of proceedings, simply stated, "the retaining wall has been correctly identified and priced." (Def.'s Ex. A at 15.) Also admitted into evidence was a document titled "Assessment Review and Analysis," prepared by Mr. M. Drew Miller (Miller) of Landmark Appraisals, Inc. Under its "List of Contentions," this document asserted, "The cost for the retaining wall should be removed as it does not `add value as an improvement over and above the curing contribution considered in the site valuation', per Schedule G, Page 17[7]." (Def.'s Ex. B at 4.) During trial, the following exchange took place between Sterling's counsel and Utt:
The evidence presented does not prove that no retaining wall existed. Utt admitted that, at the time, he did not disagree with the value assigned to the retaining wall on the property record card. Moreover, he could not recall whether a retaining wall was present. These statements fall short of demonstrating that no retaining wall existed.
Furthermore, assuming the retaining wall was present, the testimony does not constitute probative evidence as to what value, if any, should have been assigned to it. The final statement by Utt is speculative at best. It is a conclusory observation that does not represent proof that the retaining wall had no value. Likewise, Miller's contention that the retaining wall adds no value to the subject improvement is conclusory.3 Miller's assertion lacks any factual basis whatsoever.
The statements offered by Sterling do not constitute probative evidence regarding either the existence or value of the retaining wall. Therefore, the State Board's duty to support its final determination with substantial evidence was never triggered. Moreover, Sterling's argument does not demonstrate that the State Board's final determination was arbitrary and capricious. The State Board's final determination as regards assessment of the retaining wall is AFFIRMED.
Sterling argues that the State Board's assessment of its iron fencing at thirty-two dollars per linear foot was erroneous, because the...
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