WITTENBERG LUTHERAN VILL. v. PROPERTY TAX

• Decision Date: 24 January 2003
• Docket Number: No. 45T10-0202-TA-24.,45T10-0202-TA-24.
• Citation: 782 N.E.2d 483
• Parties: WITTENBERG LUTHERAN VILLAGE ENDOWMENT CORPORATION, Petitioner, v. LAKE COUNTY PROPERTY TAX ASSESSMENT BOARD OF APPEALS, Respondent.
• Court: Indiana Tax Court

782 N.E.2d 483

WITTENBERG LUTHERAN VILLAGE ENDOWMENT CORPORATION, Petitioner, v. LAKE COUNTY PROPERTY TAX ASSESSMENT BOARD OF APPEALS, Respondent.

No. 45T10-0202-TA-24.

Tax Court of Indiana.

January 24, 2003.

Robert A. Anderson, Krieg Devault Galvin, Hammond, IN, Attorney for Petitioner.

Paul S. Ward, Attorney at Law, Indianapolis, IN, Attorney for Respondent.

ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

FISHER, J.

Wittenberg Lutheran Village Endowment Corporation ("Wittenberg") appeals the final determination of the Indiana Board of Tax Review ("Indiana Board") denying it a property tax exemption for the 1999 tax year. The matter is before the Court on the parties' cross-motions for summary judgment. The sole issue for this Court to decide is whether the portion of Wittenberg's retirement community known as the "Villas" qualifies for a charitable exemption under Indiana Code § 6-1.1-10-16.

FACTS AND PROCEDURAL HISTORY

Wittenberg is an Indiana not-for-profit corporation affiliated with the Lutheran Church.¹ It owns and operates Wittenberg Lutheran Village ("Village"), an integrated retirement community in Crown Point, Indiana. The Village includes a nursing home,² an assisted living facility,³ a chapel, and eighteen buildings, each containing four residential units. Collectively, these eighteen buildings are known as the "Villas."

The Villas cater to independent, active seniors who are at least sixty years old.⁴ In addition to providing the amenities found in traditional apartment living,⁵ the Villas offer many unique and special services to its residents. For instance, each apartment is equipped with safety features (such as bathroom grab bars) and is wheelchair accessible. All units are built on a crawl-space foundation, providing less stress on elderly bones and joints than slab foundations.

Chaplaincy and worship services are available to all Villa residents.⁶ Villa residents may participate in a wide range of free planned group activities and have free access to exercise equipment within the Village. They may use the Village mini-bus for regularly scheduled shopping, planned group outings, and health-related appointments at nearby medical facilities. In addition, Villa residents may volunteer in the assisted living facility or the nursing home.

For an additional fee, Villa residents may dine in the central dining room of the nursing home or the assisted living facility. Regularly scheduled housekeeping is also available for an additional fee. If needed, a resident may purchase assistance with daily activities such as bathing, dressing, grooming, feeding, as well as administering medication. The Village has a medical director who will see residents of the Villas for scheduled appointments. Independently certified physical therapists, as well as dentists and podiatrists, also schedule regular on-site office hours. The Villa residents can contact the round-the-clock nursing staff at the nursing home for any medical emergencies.

Pursuant to an agreement with Wittenberg (Villa Agreement), a resident may purchase a right of occupancy in a Villa unit for a three, five, seven or fifteen-year term, paying both a monthly Resident's Fee (which is prepaid through an advance deposit) and a Service Fee (which may be drawn against that deposit).⁷ Title in the unit does not transfer to the resident, but is always maintained by Wittenberg. Accordingly, at the end of the occupancy term, residents may either leave the unit or enter into a new agreement with Wittenberg.

If in the event a resident leaves the Villas prior to the expiration of its occupancy term, the Resident's Fee is, for the most part, refundable. Furthermore, the Villa Agreement provides:

It is the declared policy of the HOME that the RESIDENT will not be terminated solely by reason of the financial inability of the RESIDENT to pay the monthly fee, if the RESIDENT has applied for and established facts which justify special financial consideration and dispensation, and if such application can be granted without impairing the ability of HOME to operate on a sound financial basis and maintain the HOME for other residents. Further, the RESIDENT agrees not to impair his or her ability to meet financial obligations here-under by transferring assets after securing occupancy, without the consent of the home other than to meet ordinary and customary living expenses.

(Cert. Admin. R. at 8-9.) Residents of the Villas have priority, subject to availability, to be moved to the assisted living or nursing home facilities within the community should the need arise.

Prior to 1999, the Village (in its entirety) was exempt from Indiana's property tax pursuant to the charitable exemption of Indiana Code § 6-1.1-10-16. On December 5, 2000, however, the Lake County Property Tax Assessment Board of Appeals ("PTABOA") issued a notice to Wittenberg revoking the portion of the exemption as it applied to the Villas for the 1999 tax year.⁸ Wittenberg subsequently sought review of the PTABOA's revocation with the State Board of Tax Commissioners (State Board). After an administrative hearing, the Indiana Board⁹ issued a final determination upholding the PTABOA's revocation of the Villas' exemption.

On February 27, 2002, Wittenberg timely filed an original tax appeal, naming the PTABOA as Respondent.¹⁰ On August 14, 2002, the PTABOA filed a motion for summary judgment. On August 15, 2002, Wittenberg filed its motion for summary judgment. The Court held a hearing on both motions on November 14, 2002. Additional facts will be supplied as necessary.

STANDARD OF REVIEW

This Court gives great deference to final determinations of the Indiana Board when it acts within the scope of its authority. Miller Village Prop. Co., LLP v. Indiana Bd. of Tax Review, 779 N.E.2d 986, 988 (Ind. Tax Ct.2002). Consequently, the Court will reverse a final determination of the Indiana Board only if it is:

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(2) contrary to constitutional right, power, privilege, or immunity;

(3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory jurisdiction, authority, or limitations;

(4) without observance of procedure required by law; or

(5) unsupported by substantial or reliable evidence.

IND.CODE § 33-3-5-14.8(e)(1)-(5) (Supp. 2001).¹¹

Summary judgment is proper only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. See Ind. Trial Rule 56(C). See also Dana Corp. v. State Bd. of Tax Comm'rs, 694 N.E.2d 1244, 1246 (Ind. Tax Ct.1998). Cross motions for summary judgment do not alter this standard. Salin Bancshares v. Indiana Dep't of State Revenue, 744 N.E.2d 588, 591 (Ind. Tax Ct.2000).

DISCUSSION AND ANALYSIS

While all tangible property in Indiana is generally subject to taxation, see IND.CODE § 6-1.1-2-1, the legislature has provided that "[a]ll or part of a building is exempt from property taxation if it is owned, occupied, and used ... for educational, literary, scientific, religious, or charitable purposes." IND.CODE § 6-1.1-10-16(a). See also IND. CONST. art. X, § 1 (enabling the legislature to grant such an exemption.) At issue in this case is whether the Villas are owned, occupied, and used for a charitable purpose and therefore exempt from property tax under Indiana Code § 6-1.1-10-16(a).

The PTABOA's position is that because the Villas do not cater to the ill or infirm, they are nothing more than a traditional apartment complex. Consequently, it asserts that the Indiana Board did not abuse its discretion in denying the Villas a property tax exemption when it held

[t]he property is used as a normal residence, pure and simple. The occupants may avail themselves of certain amenities that make their lives more pleasant, but the Board cannot find a meaningful difference between the benefit the Villa residents receive and the benefit that any other neighborhood association or private community may provide its residents who have selected to live there based on the comforts afforded them by the organizational structure.

[ ] Residents of the Villas are by definition not in need. They are necessarily financially sound and physically well or else they would not be allowed to enter the agreements with [Wittenberg], and could be asked to leave should that physical or financial status change.

(Cert. Admin. R. at 87-88.)

Wittenberg, on the other hand, explains that the Village is designed to "provide a suitable environment for elderly persons where they may have peace, care and security in a Christian atmosphere." (Pet'r Br. at 3 (internal citation omitted).) In turn, because seniors require different types of care at different stages of their later years, the Village offers a "continuum of care" to meet those varying needs. "The Villas ... provide one element of [that] continuum of care" in that its residents "have a variety of services available to them ... that are not available to individual elderly persons residing in their own homes. Transportation, social interaction, housekeeping, on-sight medical care and housing ... are a few of the more important benefits[.]" (Pet'r Br. at 9-11.) The provision of these benefits, Wittenberg argues, constitutes a charitable purpose. Wittenberg is correct.

Nearly seven years ago, this Court interpreted the meaning of "charitable purpose" in a case with a fact pattern very similar to this one: Raintree Friends Housing, Inc. v. Indiana Department of State Revenue, 667 N.E.2d 810 (Ind. Tax Ct.1996). In Raintree, the taxpayers, owners of several assisted living/congregate support facilities in Indiana, were entitled to a charitable exemption from Indiana's gross income tax, sales tax, and food and beverage tax. The Court, in reviewing the facts of that case, stated:

In addition to providing the amenities found in traditional apartment living, the Retirement Homes

...