1. real estate

Ohio Tax
Workshop K
Ohio Real Property
Tax Valuations – Isn’t
Everyone Contesting
Their Tax Value?
Thursday, January 27, 2011
3:00 p.m. to 4:00 p.m.
Biographical Information
Matthew E. Stamp, JD, LLM, Director, State & Local Tax Services
GBQ, 230 West Street, Suite 700, Columbus, OH 43215
mstamp@gbq.com
614.947.5302
Matt Stamp is the Director of State and Local Taxes for GBQ Partners providing state and local tax
services to clients in the manufacturing, contracting, retail, financial and services industries. Mr. Stamp
has significant experience managing state and local tax compliance issues, performing tax technical
research and assisting clients with transactional analysis, tax controversy and audits. His practice
focuses primarily on multistate sales/use tax, income and franchise tax, municipal income tax, personal
property tax, tax credits and economic development opportunities. Mr. Stamp also assists clients in the
analysis of real property tax valuations and developing strategies, where appropriate, to ensure real
estate is properly assessed.
Mr. Stamp has lectured on state and local tax topics for the Ohio Society of Certified Public Accountants
(OSCPA), Columbus Association of Tax Professionals (CATP), American Subcontractors of Ohio (ASA),
Construction Financial Management Association (CFMA – Central Ohio Chapter), President’s Advisory
Committee (PAC – Columbus and Cincinnati Chapters), Tax Executives Institute (TEI), Lorman
Educational Services and National Business Institute.
Mr. Stamp received his B.A. in Accounting from Mount Union College, and his Juris Doctorate and LLM in
Taxation from Capital University Law School.
Hilary J. Houston, Vorys, Sater, Seymour and Pease LLP
52 East Gay Street, Columbus, Ohio 43215
hjhouston@vorys.com
614.464.4968
Hilary J. Houston is an attorney in the Columbus office of the Vorys law firm where she advises clients
regarding state and local taxation, including real property tax valuation and dispute matters, personal
property tax issues, as well as sales and use tax planning, compliance and audit defense. Ms. Houston’s
practice has considerable focus on the certification of tax exempt facilities, real property tax exemptions
and Board of Revision complaints. Before joining Vorys, Ms. Houston was an attorney with the Ohio
Department of Taxation, where she administered the exempt facility program and reviewed real property
tax exemption applications. Ms. Houston was a speaker at the 18th and 19th Annual Ohio Tax
Conferences.
Ms. Houston received her J.D. from the Wake Forest University School of Law in 2003 and her B.S.B.A.
with distinction in accounting from the Ohio Northern University in 2000. She has been licensed to
practice law in the State of Ohio since 2003.
Kimbol B. Stroud, Deputy Auditor, Franklin County Board of Revision
373 S. High Street, 20th Floor, Columbus, Ohio 43215
kbstroud@franklincountyohio.gov
614.462.7341
Kimbol B. Stroud is a Deputy Auditor at the Franklin County Auditor’s office where he has represented the
Auditor on the county’s Board of Revision for over 12 years. The Board is comprised of representatives
from the Auditor’s office with those from two other offices: the County Commissioners and the County
Treasurer. This Administrative board primarily hears cases regarding challenges in the valuation of real
property as well as other types of cases concerning tax-related issues.
Before his employment at Franklin County, Mr. Stroud was an independent fee appraiser locally with Real
Property Analysts in Columbus, Ohio. Prior to that, he was a principal with Pinnacle Appraisal Services, a
real estate appraisal and consulting firm in Newport Beach, California. Mr. Stroud has been certified as a
real estate appraiser in Ohio, California and Arizona.
Mr. Stroud received a B.A. cum laude from Kenyon College in Gambier, Ohio and a M.A. from Case
Western Reserve University, where he had a teaching assistantship. He is currently an Associate
Member of the Appraisal Institute, a designated member of National Association of Realtors, a member of
the Ohio Association of Realtors, an appraiser-broker member of the Columbus Board of Realtors, and a
member of the International Association of Assessing Officers. He has also been qualified as an instructor
for continuing appraisal education by the Ohio Department of Commerce: Division of Real Estate.
Real Property Tax Valuations -
Isn’t Everyone Contesting Their Tax Value?
January 27, 2011
Presenters
Kimbol Stroud
Deputy Auditor
Franklin County Board of Revision
Matthew E. Stamp
Director, State and Local Tax Services
GBQ Partners
Hilary J. Houston, Esq.
Attorney
V
Vorys
Sater
S t Seymour
S
& Pease
P
Topics for Discussion
• General Overview
• Appraisal Process
• Valuation
• Appeals Process
• Real Property Analysis
• Jurisdiction
• Rules of Evidence
• Qualifying the Expert
• Common Mistakes
• Things to Keep in Mind
• Questions
General Overview
Your Annual Real Estate Tax Bill is based on several
factors, including:
ƒ
The appraised
pp
value of y
your real estate
ƒ
The tax rate in your School, City, Village or Township
ƒ
Applicable assessments (e.g.: Street, Lighting)
ƒ
Tax Relief Programs for which you qualify
General Overview
Your Property’s
p
y Value
General Overview
Property Tax Distribution - Tax Year 2009
PARCEL ID
ID: 010
010-002901-00
002901 00
***** *****
GENERAL
FCCS
ADAMH
MR & DD
PARKS
ZOO
SR OP
SCHOOL-COLUMBUS CITY SD
TOWNSHIP
JVS
CITY/VIL - CITY OF COLUMBUS
LIBR/OTH
TOTAL
NAME: MASHTEX OHIO LLC
TAX YEAR:
YEAR 2009
:
2,028.83
:
6,735.74
,
:
2,950.40
:
9,007.60
:
1,035.12
:
969.97
:
1 206 98
1,206.98
: 72,970.52
:
0.00
:
0.00
:
4,333.70
:
1,569.02
: -------------: 102,807.88
LEGAL
TAXABLE LAND:
TAXABLE BLDG:
TAXABLE TOTL:
ADJUSTED VAL:
CAUV LND TOT:
ORIG TAXABLE:
324,240
1,055,920
, ,
1,380,160
0
0
1,380,160
ORIGINAL RATE: 98.9100
REDUCT FACTOR: 0.246893
EFFECTVE RATE: 74.489830
: 6056-6100 CHANNINGWAY BL
: 4.726 ACRES
: R21 T12 S23 1/2S40
Appraisal Process
The Auditor is required by law to establish the Fair Market
Value for each parcel of real estate in the County
Appraisal Process
Property Values are adjusted every three (3) years
through the State-Mandated appraisal process
Appraisal Process
A full Reappraisal which includes on-site inspections
and review, is conducted every six (6) years
Appraisal Process
Three (3) years after a reappraisal, values are adjusted
based on a computerized sales ratio study
Appraisal Process
What is being appraised?
• Unencumbered Fee Simple Title
• As of a point in time:
• Assessment purposes – Always January 1
• Fee purposes – as of the date of inspection
Appraisal Process
Bundle of Rights (Sticks) or What is Fee Simple Title?
• Right to Use
• Right to Sell
• Right to Lease or Rent
• Right to Enter or Leave
• Right to Give Away
• Right to Not to Do Any of the Above
Appraisal Process
Fee Simple Title is subject only to:
• Taxation
• Eminent Domain (Taking for a Public Process
• Police Power (zoning, regulations for health & safety)
• Escheat (property reverts to state for non-payment of
taxes
Appraisal Process
Private Encumbrances (May not be taken into
consideration covenants, conditions and restrictions in
deeds)
• Mortgages
• Easements (except scenic)
• Liens and Judgments
• Other
Oth than
th
M
Market
k t Leases
L
Valuation
Three Traditional Approaches to Valuation
• Sales Comparison Approach (Market approach)
• Income Approach
• Cost Approach
Valuation
Sales Comparison Approach considers…
considers
• Sales of similar properties
• Adjustments made to comparable sales
• Most reliable for Residential
Valuation
Income Approach considers…
• Property’s POTENTIAL to generate income
• Vacancy & credit loss
• Expense of ownership
• Debt Service (Mortgage Payments)
• Return on the Owner’s Investment (Equity)
Valuation
Cost Approach considers….
considers
• Cost to acquire
q
land,, plus
p
• Cost to construct improvements, less depreciation and
obsolescence (physical, functional, external)
Appeals Process
Informal and Formal Appeals
Appeals Process
Informal Appeals
• Values as of January 1st each year
• Reappraisal & Update Years – Reviews held August and
September
• Annual New Construction values available for discussion
September 1st to Mid-November
Appeals Process
Formal Appeals
Board of Revision Case may be filed:
December Tax Billing
Thru
Following March 31st
Appeals Process
ORC §5715 – Boards of Revision
Tax Commissioner
• Supervise
p
Assessment Process
• Promulgate Rules
• Maximum level of Assessment = 35%
• Sales Ratio Studies
Appeals Process
Boards of Revision - Defined
The Board of Revision is a quasi-judicial administrative
hearing body engaged in the setting of a record which
May
y become the basis for a further appeal,
pp , therefore it
is a court of record rather than a court of law.
Appeals Process
Boards of Revision - Membership
• County Auditor – Secretary & Administrator
• County
y Treasurer
• President of the County Commission
(or their representatives)
• Exceptions:
• Summit County
• Cuyahoga
C
h
County
C
t
Appeals Process
Mandatory Meetings
• Organizational Meeting
• Second Monday in January
• Elect Chairperson
• Approval of Abstracts of Value
• Taxable Abstract
• CAUV Abstract
(Upon approval of the abstracts, jurisdiction for current year
valuations change from the Auditor to the BOR)
• Hearings
Appeals Process
Property Tax Distribution - Tax Year 2009
Taxable Land
324,240
Taxable Bldg:
1,055,920
Taxable Total:
1 380 160
1,380,160
Original Rate:
98.9100
Reduction
R
d ti
Factor:
Effective Rate:
0 246893
0.246893
74.489830
Appeals Process
BOR Notifications
• OWNERS MUST be notified if filing was made by Board
of Education
• BOARD OF EDUCATION MUST be notified if owner’s
requested reduction > $17,500 assessed
Real Property Analysis
True Value
• All real property is appraised at its “true
true value”
value
(Ohio Rev. Code § 5713.01)
• The best evidence of true value is a recent armslength sale transaction
Real Property Analysis
True Value
• True Value is defined as “the price at which property
should change
g hands on the open
p
market between a
willing buyer and a willing seller, neither being
under any compulsion to buy or to sell and both
having a knowledge of all the relevant facts
facts”
OAC §5703-25-5(A)(1)
• Case Law
•
Berea City School Dist. Bd. Of Edn. V. Cuyahoga
Cty Bd. Of Revision (2005), 106 Ohio St. 3d 269
Real Property Analysis
Considerations under Berea:
• Was the sale arm’s
arm s length?
•
Related party transactions
•
Sheriff’s
Sheriff
s sales
•
Economic coercion
Real Property Analysis
Considerations under Berea (continued):
• What was the timing of the sale?
•
What is considered recent? 1 year, 3 years?
•
Sale / Leaseback transactions
• Case Law
•
HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision
((2010),
), 124 Ohio St.3d 481
Real Property Analysis
Considerations under Berea (continued):
• What was the consideration for the sale?
•
Sale price indicated on conveyance fee
statement
•
Bulk sale transactions
•
Tangible
g
p
personal p
property
p y
•
Goodwill
Real Property Analysis
Considerations under Berea (continued):
• Case Law
•
FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin
Cty.
y Bd. of Revision,, ((2010)) 125 Ohio St. 3rd 485
•
St. Bernard Self-Storage,
g , L.L.C. v. Hamilton Cty.
y
Bd. of Revision, (2007) 115 Ohio St. 3rd 365
Real Property Analysis
If no sale transaction,
transaction true value is determined
using the following valuation concepts:
• Cost Approach
• Income Approach
• Comparable Sales Approach
• All three methods should be considered to determine
a single estimate of true value
Real Property Analysis
Cost Approach
• Estimate replacement or reproduction costs of
improvements;
p
• Deduct: Estimated physical depreciation /
obsolescence
• Add: Market value of land
• Assumes reproduction or replacement cost sets
upper limit of value as long as improvement
represents highest and best use of the land
((Principle
p of Substitution))
Real Property Analysis
Cost Approach
• Building permits – New Construction
•
Auditor / BOE utilize application amounts to
properly
p
p y account for changes
g in valuation
•
Does the amount include tangible property?
•
Does the amount p
properly
p y reflect highest
g
and
best use? (e.g. parking lot vs. developed land)
Real Property Analysis
Cost Approach
• Construction reports / Cost Segregation report
•
May assist with the identification of real versus
personal property for valuation purposes
• Construction-in-Progress
•
Dated p
pictures at lien date p
provide evidence of
value and percentage of completion
Real Property Analysis
Income Approach
• Gross income from rental / income producing
activities;
• Deduct: Normal operation expenses including
normal vacancies and credit losses. Operating
expenses should be reduced by real estate taxes.
• Multiply: Adjusted net income by market
capitalization rate (includes effective tax rate or tax
additur)
Real Property Analysis
Income Approach
• Capitalization rate should be determined from
market data
• Tax additur equals real property taxes currently
assessed, expressed as a percentage rate in terms
of current assessed value
• Long-term leases
•
Actual versus market rents
Real Property Analysis
Comparable Sales Approach
• True value is estimated on the basis of similar or
comparable
p
properties
p p
in the market area or similar
market areas
• Perform square footage and value per acre analysis
to compare valuation to similar properties and
auditor’s current valuation
• Related p
party,
y, owner-occupied,
p , manufacturing
g
facilities, etc.
Real Property Analysis
Recommendations:
• Obtain “valuation card” from County Auditor
• Review items and basis for valuation
• Determine estimate of true value (cost, sales, and
income methods)
• Calculate tax effect of possible decrease in valuation
Real Property Analysis
Additional Considerations:
• Possibility of tax increase
•
For non-residential cases,
cases BOE likely to file a
counter-complaint
• Current y
year of the appraisal
pp
cycle
y
• Cost benefit analysis
•
Before an appeal
pp
is filed,, should consider legal
g
fees, appraisal costs, expert testimony
Jurisdiction
:
The BOR may NOT be able to hear the case if:
• Th
The complaint
l i t iis nott filed
fil d ti
timely:
l
• March 31ST of the year following
the tax year at issue
• The Complaint does not list the CORRECT
owners and complainants names?
• Th
The C
Complaint
l i t iis nott completely
l t l fill
filled-out
d
t
• Property not identified
• Requested decrease NOT stated
• No reason stated justifying complaint
• The Complaintant’s registration with the Secretary of
State is not active, where the complainant is not an
individual
Jurisdiction
The BOR may not have Jurisdiction if the complaint was
signed by someone other than those individuals
set forth in R.C. 5715.19:
• Individual Owner
(A PERSON AS OPPOSED TO AN ENTITY)
• Attorney Licensed in Ohio
(OR TEMPORARILY ADMITTED TO PRACTICE FOR THIS CASE)
• IIndividual
di id l h
having
i
Fid
Fiduciary
i
Relationship
R l i
hi to the
h owner//
entity
(EXAMPLE: TRUSTEE, CORPORATE OFFICER, ETC.)
Jurisdiction
Case Law:
• Sharon Village Ltd. v. Licking Cty. Bd. of Revision
(1997), 78 Ohio St. 3d 479
• Dayton Supply & Tool Co., Inc. v. Montgomery Cty. Bd.
of Revision (2006), 111 Ohio St.3d 367
• Buckeye Foods v. Cuyahoga Cty. Bd. of Revision
(1997) Ohio
(1997),
Ohi St.3d.
St 3d 245
Jurisdiction
\
If multiple parcels are involved in a complaint:
• All MUST be in same Tax District
• MUST form a Single
g Economic Unit
• MUST have identical ownership
Jurisdiction
Only ONE FILING allowed per 3 years unless:
• SALE occurred after 1st lien date unless
the sale is considered in the earlier case
• LOSS in value due to casualty
• Substantial IMPROVEMENT added
• Change in OCCUPANCY of 15% or more between lien
dates
Rules of Evidence
• Boards of Revision and the Board of Tax Appeals
are not strictly bound by the Ohio Rules of Evidence
as are the courts
• Certain rules provide structure and guidance to assist
in properly weighting the evidence
Rules of Evidence
• HEARSAY – “A STATEMENT BY ONE PERSON AS TO
WHAT ANOTHER PERSON SAID OR THINKS.”
• Critical documents need first hand testimony
• Hearsay is only acceptable from an expert who has
relied on others information when preparing the
report of findings.
Rules of Evidence
Recent Arm
Arm’s
s Length Sale
• Purchase contract
• Deed
• Conveyance fee form
Case Law
Rules of Evidence
• Owner’s opinion of value
• Appraisal – presented by qualified expert appraiser
Qualifying the Expert
• VOIR DIRE - Getting the full resume of a new expert
into the record
• Quick Qualification of experts already known to you
Qualifying the Expert
Things to consider when qualifying or disqualifying a
witness who has been put forward as an expert
appraiser:
1. Is the appraiser
pp
certified or licensed in Ohio?
2. Years of experience in real estate field(s)?
3. Types of properties appraised?
4. Education?
5. Membership in professional organizations?
6 Fee structure for the subject assignment?
6.
*Must not be contingent on the outcome of the case.
Common Mistakes
• Incorrect Owner’s Name on the complaint
• Complaint filed by someone without standing
(i.e., a lessee)
• Arguing taxes instead of value at the BOR
• Tax bills of similar properties are irrelevant
• Presenting appraisal evidence at the BOR with
effective dates other than the tax lien date for the year
at issue
• Tax Year 2009 – Tax Lien Date: JAN. 1, 2009
Things to Keep in Mind
There are 88 different BORS throughout Ohio
• Each BOR has their own ideas regarding jurisdiction and
rules of evidence
• Each BOR has their own rules and procedures regarding
submission of evidence (i.e., appraisal reports) and
hearing procedures
Real Property Tax Valuations Isn’tt Everyone Contesting Their Tax Value?
Isn
QUESTIONS
YEAR OF SEXENNIAL REAPPRAISAL AND TRIENNIAL UPDATE
FOR OHIO'S 88 COUNTIES
2010-2015
2010
REAPPRAISAL
COUNTIES
2011
REAPPRAISAL
COUNTIES
2012
REAPPRAISAL
COUNTIES
2013
REAPPRAISAL
COUNTIES
ADAMS
COLUMBIANA
HANCOCK
HOCKING
HOLMES
LAWRENCE
MEIGS
MONROE
PAULDING
SCIOTO
TUSCARAWAS
WASHINGTON
AUGLAIZE
CLINTON
DARKE
DEFIANCE
DELAWARE
FRANKLIN
GALLIA
GEAUGA
HAMILTON
HARDIN
HARRISON
HENRY
JACKSON
LICKING
MAHONING
MERCER
MORROW
PERRY
PICKAWAY
PIKE
PREBLE
PUTNAM
RICHLAND
SENECA
SHELBY
TRUMBULL
VAN WERT
WOOD
BELMONT
BROWN
CRAWFORD
CUYAHOGA
ERIE
FAYETTE
HIGHLAND
HURON
JEFFERSON
LAKE
LORAIN
LUCAS
MORGAN
MUSKINGUM
OTTAWA
PORTAGE
STARK
WARREN
WILLIAMS
CARROLL
CHAMPAIGN
CLARK
FAIRFIELD
LOGAN
MARION
MEDINA
MIAMI
ROSS
UNION
WYANDOT
2010
UPDATE
COUNTIES
CARROLL
CHAMPAIGN
CLARK
FAIRFIELD
LOGAN
MARION
MEDINA
MIAMI
ROSS
UNION
WYANDOT
2011
UPDATE
COUNTIES
ASHLAND
ASHTABULA
ATHENS
BUTLER
CLERMONT
FULTON
GREENE
KNOX
MADISON
MONTGOMERY
NOBLE
SUMMIT
WAYNE
2012
UPDATE
COUNTIES
ALLEN
COSHOCTON
GUERNSEY
SANDUSKY
VINTON
2013
UPDATE
COUNTIES
ADAMS
COLUMBIANA
HANCOCK
HOCKING
HOLMES
LAWRENCE
MEIGS
MONROE
PAULDING
SCIOTO
TUSCARAWAS
WASHINGTON
2014
REAPPRAISAL
COUNTIES
ASHLAND
ASHTABULA
ATHENS
BUTLER
CLERMONT
FULTON
GREENE
KNOX
MADISON
MONTGOMERY
NOBLE
SUMMIT
WAYNE
2014
UPDATE
COUNTIES
AUGLAIZE
CLINTON
DARKE
DEFIANCE
DELAWARE
FRANKLIN
GALLIA
GEAUGA
HAMILTON
HARDIN
HARRISON
HENRY
JACKSON
LICKING
MAHONING
MERCER
MORROW
PERRY
PICKAWAY
PIKE
PREBLE
PUTNAM
RICHLAND
SENECA
SHELBY
TRUMBULL
VAN WERT
WOOD
2015
REAPPRAISAL
COUNTIES
ALLEN
COSHOCTON
GUERNSEY
SANDUSKY
VINTON
2015
UPDATE
COUNTIES
BELMONT
BROWN
CRAWFORD
CUYAHOGA
ERIE
FAYETTE
HIGHLAND
HURON
JEFFERSON
LAKE
LORAIN
LUCAS
MORGAN
MUSKINGUM
OTTAWA
PORTAGE
STARK
WARREN
WILLIAMS
[Cite as Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d
269, 2005-Ohio-4979.]
BEREA CITY SCHOOL DISTRICT BOARD OF EDUCATION, APPELLEE;
MANLAW INVESTMENT COMPANY, LTD., APPELLANT, v. CUYAHOGA COUNTY
BOARD OF REVISION ET AL., APPELLEES.
[Cite as Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision,
106 Ohio St.3d 269, 2005-Ohio-4979.]
Real-property taxation — Appraisal — R.C. 5713.03 — Price of recent arm’slength sale to be considered true value — Long-term lease at rate
unfavorable to owner — Ratner v. Stark Cty. Bd. of Revision overruled.
(No. 2003-2168 — Submitted May 10, 2005 — Decided October 5, 2005.)
APPEAL from the Board of Tax Appeals,
Nos. 2003-J-143, 2003-J-144, and 2003-J-1150.
__________________
O’DONNELL, J.
{¶ 1} The principal issue presented to this court concerns the proper
method for determining the taxable value of a 10.719-acre parcel of property
located at 17840 and 18000 Bagley Road in Middleburg Heights, a suburb of
Cleveland, Ohio.
{¶ 2} The property at issue contains two buildings: one, constructed in
1968 or 1969, contains approximately 113,000 square feet and houses a Kmart
store and an in-line store; the other, constructed in 1986, is a separately standing
3,454-square-foot Burger King restaurant.
{¶ 3} Further, the parcel is subject to two long-term leases. The first of
these, entered into on August 9, 1967, between the original owner and the Kmart
Corporation for an initial term ending in 1992, offered Kmart the option of
extending the lease for three additional five-year periods to May 1, 2007.
Kmart’s annual base rent is $205,806, or $1.82 per square foot, plus an overage
SUPREME COURT OF OHIO
rent of one percent of the gross sales. The second, entered into on July 1, 1985,
between Kmart and a Burger King franchisee, offers Burger King the option of
extending the sublease for four additional five-year periods to June 20, 2025.
{¶ 4} The record here reflects and the parties agree that in March 1996,
Manlaw Investment Company, Ltd. (“Manlaw”) purchased the property,
encumbered by the two leases, for $2,600,000.
After the Cuyahoga County
Auditor valued the property at the $2,600,000 sale price for tax year 1997, the
Berea City School District Board of Education (“BOE”) filed a complaint with the
Cuyahoga County Board of Revision (“BOR”) seeking to increase that valuation
to $5,500,000 based on its contention that the existing leases on the property do
not reflect current economic rental potential because they were entered into in
1967 and 1985 respectively.
In response, Manlaw filed a countercomplaint
requesting the BOR to maintain the auditor’s initial valuation based on the sale
price of the property. After its review, the BOR increased the property valuation
to $4,200,000, and both the BOE and Manlaw appealed that determination to the
Board of Tax Appeals (“BTA”).
{¶ 5} At a hearing before the BTA, Manlaw offered testimony from its
appraiser, Robert J. Weiler, who valued the property at $2,130,000 based on the
actual rent paid by Kmart; in contrast, the BOE presented its appraiser, Richard G.
Racek, who valued the property at $4,800,000 using economic or market rent as
the basis for his appraisal. Relying on Alliance Towers, Ltd. v. Stark Cty. Bd. of
Revision (1988), 37 Ohio St.3d 16, 523 N.E.2d 826, the BTA concluded that the
property must be valued as a fee-simple estate unencumbered by the Kmart and
Burger King leases. As a result, the BTA rejected Manlaw’s actual-rent approach
and valued the property at $4,800,000 based primarily on the BOE’s calculation
of the fair-market rental rate for comparable Cleveland-area properties.
{¶ 6} Manlaw then appealed to this court, asserting that the recent arm’slength sale between a willing seller and a willing buyer, i.e., the 1996 sale for
2
January Term, 2005
$2,600,000, constituted the true value of the property. Further, it claimed that the
BTA should not have relied on Alliance Towers and that the actual rent—rather
than the economic rent—should be the proper indicator of the property’s true
value. Conversely, the BOE contends that a recent arm’s-length sale is not
conclusive evidence of the true value of the property, arguing that Alliance
Towers demonstrates that the property should be valued as if it were
unencumbered and further asserting that because the leases on the property do not
reflect fair market value, the economic rent, rather than the actual rent, should be
used to calculate the property’s true value.
{¶ 7} We begin our analysis by reviewing R.C. 5713.03, which provides:
{¶ 8} “In determining the true value of any tract, lot, or parcel of real
estate under this section, if such tract, lot, or parcel has been the subject of an
arm’s length sale between a willing seller and a willing buyer within a reasonable
length of time, either before or after the tax lien date, the auditor shall consider
the sale price of such tract, lot, or parcel to be the true value for taxation
purposes.” (Emphasis added.)
{¶ 9} In State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1964), 175
Ohio St. 410, 412, 25 O.O.2d 432, 195 N.E.2d 908, we concluded: “The best
method of determining value, when such information is available, is an actual sale
of such property between one who is willing to sell but not compelled to do so
and one who is willing to buy but not compelled to do so. This, without question,
will usually determine the monetary value of the property.” (Citation omitted.)
See, also, Conalco Inc. v. Monroe Cty. Bd. of Revision (1977), 50 Ohio St.2d 129,
4 O.O.3d 309, 363 N.E.2d 722, paragraph one of the syllabus, in which this court
held: “The best evidence of the ‘true value in money’ of real property is an actual,
recent sale of the property in an arm’s-length transaction.”
{¶ 10} For more than 20 years, the law in this area had been well settled: a
recent arm’s-length sale of property evidenced its true value. However, in Ratner
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SUPREME COURT OF OHIO
v. Stark Cty. Bd. of Revision (1986), 23 Ohio St.3d 59, 61, 23 OBR 192, 491
N.E.2d 680 (Ratner I), this court changed that bright-line rule, concluding:
“Although the sale price is the ‘best evidence’ of true value of real property for
tax purposes, it is not the only evidence. A review of independent appraisals
evaluating the cash equivalency of the sale price is appropriate where it is shown
that the sale price does not reflect the true value.”
{¶ 11} In Ratner I, the property at issue, the Mellett Mall shopping center
in Canton, Ohio, sold for $12,540,500. Payment consisted of $500,000 cash, a
$6,000,000 note and assumption of $6,040,500 in debt. At the time, the Stark
County Auditor valued the property at $15,899,710. Although the BTA adjusted
the taxable value of the property to $12,530,000, the owner appealed, claiming
that it had paid a considerably lesser cash consideration. This court reversed and
held: “In determining true value for property, the board of revision and the BTA
must at least consider and review evidence presented by independent real estate
appraisers that adjusts the contract sale price to reflect both the price paid for real
estate and the price paid for favorable financing.” Ratner I, 23 Ohio St.3d at 62,
23 OBR 192, 491 N.E.2d 680.
{¶ 12} Ratner I and its follow-up case, Ratner v. Stark Cty. Bd. of
Revision (1988), 35 Ohio St.3d 26, 517 N.E.2d 915 (“Ratner II”), disregard both
the plain language of R.C. 5713.03 and this court’s precedent of “ ‘consistently
adher[ing] to the rule that “[t]he best evidence of the ‘true value in money’ of real
property is an actual, recent sale of the property in an arm’s-length transaction.” ’
” Ratner II, 35 Ohio St.3d at 30, 517 N.E.2d 915 (Locher, J., dissenting), quoting
Columbus Bd. of Edn. v. Fountain Square Assoc., Ltd. (1984), 9 Ohio St.3d 218,
219, 9 OBR 528, 459 N.E.2d 894, quoting Conalco, 50 Ohio St.2d 129, 4 O.O.3d
309, 363 N.E.2d 722, paragraph one of the syllabus.
{¶ 13} In accordance with the plain language of R.C. 5713.03 and our
decision in Fountain Square, today we overrule Ratner I and Ratner II to the
4
January Term, 2005
extent that they direct the board of revision and the BTA to “consider and review
evidence presented by independent real estate appraisers that adjusts the contract
sale price to reflect both the price paid for real estate and the price paid for
favorable financing,” Ratner I, 23 Ohio St.3d at 62, 23 OBR 192, 491 N.E.2d 680,
and hold that when the property has been the subject of a recent arm’s-length sale
between a willing seller and a willing buyer, the sale price of the property shall be
“the true value for taxation purposes.” R.C. 5713.03. Accordingly, because the
property at issue in this case had been recently sold in an arm’s-length transaction
for $2,600,000, the law requires that sale price to be the true value of that property
for the tax year 1997.
{¶ 14} While we recognize that several of our decisions have permitted
the BTA to consider market rental value of commercial real property as an
indicator of the true value of the property, none of those cases involved a recent
arm’s-length sale of the property between a willing seller and a willing buyer.
For instance, in Wynwood Apts., Inc. v. Cuyahoga Cty. Bd. of Revision (1979), 59
Ohio St.2d 34, 35, 13 O.O.3d 19, 391 N.E.2d 346, this court noted that “[t]here
was no recent arm’s-length transfer of the property to serve as ‘best evidence’ of
the true value in money which the board must rely upon under R.C. 5717.03 and
the case law of this court.” See, also, Alliance Towers, 37 Ohio St.3d 16, 523
N.E.2d 826; and Canton Towers, Ltd. v. Stark Cty. Bd. of Revision (1983), 3 Ohio
St.3d 4, 3 OBR 302, 444 N.E.2d 1027, each approving the use of “economic
rental value of commercial real property as an indicium of value for ad valorem
real property taxation purposes” where the property had not been sold in a recent
arm’s-length transaction between willing parties. Alliance Towers, 37 Ohio St.3d
at 22, 523 N.E.2d 826.
{¶ 15} Consequently, Wynwood Apts. and similar cases addressing
whether market rent or actual rent should be used in a property appraisal do not
apply to situations in which the property has been recently sold in an arm’s-length
5
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transaction. Indeed, as this court has often observed, “[a]ppraisals based upon
factors other than sales price are appropriate for use in determining value only
when no arm’s-length sale has taken place, or where it is shown that the sales
price is not reflective of the true value.” (Emphasis added; citations omitted.)
Columbus Bd. of Edn. v. Fountain Square Assoc., Ltd. (1984), 9 Ohio St.3d 218,
219, 9 OBR 528, 459 N.E.2d 894. See, also, N. Olmsted Bd. of Edn. v. Cuyahoga
Cty. Bd. of Revision (1990), 54 Ohio St.3d 98, 561 N.E.2d 915, in which we held
that “[i]n the absence of evidence of a recent arm’s-length sale between a willing
buyer under no compulsion to buy and a willing seller under no compulsion to
sell, the testimony of expert witnesses becomes necessary”; and Dublin Senior
Community Ltd. Partnership v. Franklin Cty. Bd. of Revision (1997), 80 Ohio
St.3d 455, 459, 687 N.E.2d 426, in which we held that “when an actual sale is not
available, ‘an appraisal becomes necessary,’ ” quoting Park Invest. Co., 175 Ohio
St. at 412, 25 O.O.2d 432, 195 N.E.2d 908.
{¶ 16} Since the property at issue here had been sold in a recent arm’slength transaction, we do not need to determine whether actual rent or market rent
should have been used in the property appraisal. Accordingly, the decision of the
BTA is reversed, and the matter is remanded to the BTA for further proceedings
consistent with this opinion and our instruction that pursuant to R.C. 5713.03, the
sale price in a recent arm’s-length transaction between a willing seller and a
willing buyer shall be considered the true value of the property for taxation
purposes.
Decision reversed
and cause remanded.
RESNICK, LUNDBERG STRATTON, O’CONNOR and LANZINGER, JJ., concur.
MOYER, C.J., and PFEIFER, J., concur in judgment only.
__________________
6
January Term, 2005
PFEIFER, J., concurring in judgment only.
{¶ 17} “Although the sale price is the ‘best evidence’ of true value of real
property for tax purposes, it is not the only evidence. A review of independent
appraisals based upon factors other than the sale price is appropriate where it is
shown that the sale price does not reflect true value. (Columbus Bd. of Edn. v.
Fountain Square Assoc., Ltd. (1984), 9 Ohio St.3d 218, 219 [9 OBR 528, 459
N.E.2d 894], construed.)” Ratner v. Stark Cty. Bd. of Revision (1986), 23 Ohio
St.3d 59, 23 OBR 192, 491 N.E.2d 680, syllabus.
{¶ 18} This standard has prevailed for almost 20 years. It is reasonable
and should not be overturned lightly. Ratner confirmed that a recent sale is the
best evidence of value. See R.C. 5713.03. That conclusion is reasonable, but it
ought not to be etched in stone, because many factors can affect the price a buyer
is willing to pay. See R.C. 5715.01. The second part of the Ratner standard
sensibly recognizes this unremarkable fact by requiring an independent appraisal
to establish a valuation different from a recent sales price.
{¶ 19} Quite simply, there is no reason to overturn Ratner or to embrace
unnecessarily rigid rules to govern valuation. As I wrote in Dublin-Sawmill
Properties v. Franklin Cty. Bd. of Revision (1993), 67 Ohio St.3d 575, 578, 621
N.E.2d 693 (Pfeifer, J., dissenting), “[b]lind reliance on purchase price to
determine fair market value of real estate is simplistic and naïve.” Further, strict
adherence to the standard advanced in the majority opinion might invite the
unscrupulous to attempt to lessen their tax burden with sham transactions.
{¶ 20} I am not unmindful of R.C. 5713.03, on which the majority
opinion so heavily relies. That provision, however, is not the only one in the
Revised Code that addresses real estate valuation. R.C. 5715.01 states, “The tax
commissioner shall direct and supervise the assessment for taxation of all real
property. The commissioner shall adopt, prescribe, and promulgate rules for the
determination of true value and taxable value of real property * * * . * * * The
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SUPREME COURT OF OHIO
rules shall provide that in determining the true value of lands or improvements
thereon for tax purposes, all facts and circumstances relating to the value of the
property, its availability for the purposes for which it is constructed or being used,
its obsolete character, if any, the income capacity of the property, if any, and any
other factor that tends to prove its true value shall be used.” The Ratner standard
reasonably balances the rigid approach of R.C. 5713.03 with the more nuanced
approach of R.C. 5715.01. Ratner should not be overruled.
{¶ 21} Despite my disagreement with the majority opinion, I concur in
judgment because the recent sale provides the best evidence of true value in this
case.
MOYER, C.J., concurs in the foregoing opinion.
_________________
Kadish, Hinkel & Weibel and Kevin M. Hinkel, for appellee Berea City
School District Board of Education.
Siegel, Siegel, Johnson & Jennings Co., L.P.A., Fred Siegel, and Annrita
S. Johnson, for appellant.
______________________
8
[Cite as HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 124 Ohio St.3d 481, 2010-Ohio-687.]
HIN, L.L.C., APPELLEE, v. CUYAHOGA COUNTY BOARD OF REVISION ET AL.,
APPELLEES; BEDFORD BOARD OF EDUCATION, APPELLANT.
[Cite as HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision,
124 Ohio St.3d 481, 2010-Ohio-687.]
Taxation — R.C. 5713.03 — When a property has been the subject of two arm’slength sales between a willing seller and a willing buyer within a
reasonable length of time either before or after the tax lien date, the sale
occurring closer in time to the tax lien date establishes the true value of
the property for taxation purposes — In determining the date a sale of
property occurs for the purpose of establishing the true value of property
pursuant to R.C. 5713.03, the auditor should use the date that the real
property conveyance fee statement is filed in the auditor’s office as the
sale date of the property.
(No. 2008-2408 — Submitted November 18, 2009 — Decided March 4, 2010.)
APPEAL from the Board of Tax Appeals, No. 2006-A-712.
__________________
SYLLABUS OF THE COURT
1.
When a property has been the subject of two arm’s-length sales between a
willing seller and a willing buyer within a reasonable length of time either
before or after the tax lien date, the sale occurring closer in time to the tax
lien date establishes the true value of the property for taxation purposes.
2.
In determining the date a sale of property occurs, only for purposes of
establishing the true value of property pursuant to R.C. 5713.03, the
auditor should use the date that the real property conveyance fee statement
is filed in the auditor’s office as the sale date of the property.
__________________
SUPREME COURT OF OHIO
O’DONNELL, J.
{¶ 1} In this case, two sales of the same property occurred within a few
months of the tax lien date, one prior and one subsequent to it, and we are called
upon to provide guidance as to which sale better represents the true value of the
property and to clarify when each sale occurred and what date the auditor should
use to determine true value. Specifically, we address whether the Board of Tax
Appeals (“BTA”) correctly determined the true value of the property, consisting
of 34.5784 acres improved with a 78,500-square-foot office building, located at
17500 Rockside Road in Bedford, Ohio, to be $4,790,000, the amount that the
BTA calculated that JBK Cuyahoga Holdings L.L.C. paid for it in December
2003, before the tax lien date, as opposed to $7,400,000, the amount that HIN,
L.L.C., paid for it in April 2004, several months after the tax lien date.
{¶ 2} R.C. 5713.03 provides that in determining the true value of a
parcel of real estate that has been the subject of an arm’s-length sale between a
willing seller and a willing buyer within a reasonable length of time either before
or after the tax lien date, the auditor shall consider the sale price to be the true
value for taxation purposes. Two specific issues are presented in this case: first,
when a property has been the subject of two transfers within a few months of the
tax lien date, which of the two sales should be used by the auditor to establish the
property’s true value, and second, whether the auditor should consider the date on
the purchase agreement, the date the deed was signed, the date of the closing, the
date the real property conveyance fee statement is filed in the auditor’s office, or
the date of recording the transfer of the property as the date of sale for taxation
purposes.
{¶ 3} For purposes of determining the true value of property according to
R.C. 5713.03, the auditor should use the date that the real property conveyance
fee statement is filed in the auditor’s office as the sale date of the property. In this
case, because the December 2003 sale occurred closer in time to the tax lien date
2
January Term, 2010
than the April 2004 sale, the BTA reasonably and lawfully determined the true
value of the property to be $4,790,000, and we therefore affirm that decision.
Facts and Procedural History
{¶ 4} Prior to September 8, 2003, Tops Markets, L.L.C. agreed to sell 36
acres, including the property at issue, to U.S. Bank for $4,900,000. Thereafter,
U.S. Bank agreed to assign its interest in the purchase contract to JBK Properties,
Inc.
At the end of September, Tops Markets and JBK Properties signed a
purchase and sale agreement at the agreed price of $4,900,000; JBK Properties
agreed to purchase the property contingent upon U.S. Bank’s agreement to lease it
and the bank’s ability to obtain various incentives from the city of Bedford. The
parties subsequently amended the agreement to require a closing on or before
December 30, 2003.
{¶ 5} On November 1, 2003, U.S. Bank agreed to a 15-year, four-month
lease of the property from JBK Cuyahoga Holdings L.L.C. ending on January 31,
2019, with an option to extend the lease for two additional five-year terms. The
lease provided that U.S. Bank would be responsible to pay the real estate taxes,
insurance, maintenance, and utilities for the property, but it also obligated JBK
Cuyahoga to make an upfront, lump-sum payment of $739,470 to the bank for
improvements to the premises and relocation expenses. U.S. Bank subsequently
agreed to pay more rent for the office building in exchange for JBK Cuyahoga’s
consent to terminate a separate lease for the warehouse on a 2.3911-acre parcel,
which JBK Cuyahoga had agreed to build.
{¶ 6} On December 24, 2003, Thomas M. Fitzgerald, an officer of Tops
Markets, signed deeds to the 34.5784-acre and 2.3911-acre parcels.
JBK
Cuyahoga presented the deeds and the real property conveyance fee statement to
the auditor on December 30, 2003, two days prior to the January 1, 2004 tax lien
date, and recorded the deeds the same day.
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SUPREME COURT OF OHIO
{¶ 7} Thereafter, in January 2004, in an unrelated situation, Scott
Revolinski, a broker with RFP Commercial, contacted JBK Cuyahoga on behalf
of HIN, L.L.C., a corporation interested in purchasing property with a triple net
lease1 to complete a likekind exchange pursuant to Section 1031, Title 26,
U.S.Code (“1031 Exchange”).2 On February 26, 2004, as amended on March 25,
2004, JBK Cuyahoga accepted an offer from HIN to purchase the 34.5784-acre
parcel for $7,400,000, and on April 1, 2004, JBK Cuyahoga accepted an offer
from HIN to purchase the 2.3911-acre parcel for $110,000. On April 29, 2004,
John Kuhn, principal of JBK Cuyahoga, signed deeds conveying both parcels to
HIN. The next day, HIN presented the deeds and the real property conveyance
fee statement to the auditor and recorded the deeds.
{¶ 8} The auditor of Cuyahoga County, Frank Russo, assessed the true
value of the 34.5784-acre parcel for tax year 2004 as $7,848,400. HIN objected
and filed an original complaint challenging the valuation of the property with the
Cuyahoga County Board of Revision.
Subsequently, the Bedford Board of
Education filed a counter-complaint seeking to retain the assessed value. After
considering the evidence, the Cuyahoga County Board of Revision found the true
value to be $7,848,400. HIN then appealed that decision to the BTA.
{¶ 9} The BTA found that two sales of the property had occurred. The
transfers in the first sale, to JBK Cuyahoga, were recorded on December 30,
1. “Under a triple net lease, the tenant is responsible for paying utilities, maintenance, real estate
taxes, and insurance.” Strongsville Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 112 Ohio St.3d
309, 2007-Ohio-6, 859 N.E.2d 540, ¶ 3, fn.1, citing The Appraisal of Real Estate (Appraisal
Institute, 12th Ed.2001) 477.
2. “ ‘The concept behind a 1031 exchange is that, when a property owner sells a property and
reinvests its proceeds into another property, any economic gain has not been realized in a way that
generates funds to pay any tax.’ Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision
(Jan. 13, 2009), BTA No. 2006-T-1804, at 7. Accordingly, the Internal Revenue Code defers the
taxation of any gain from the sale of the property in this situation. Id. at 6.” Worthington City
Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, 918
N.E.2d 972, ¶ 8.
4
January Term, 2010
2003, and in the second sale, to HIN, on April 30, 2004. HIN, L.L.C. v. Cuyahoga
Cty. Bd. of Revision (Nov. 18, 2008), BTA No. 2006-A-712, at 5. Because the
December 30, 2003, transfer occurred closer in time to January 1, 2004, the tax
lien date, the BTA considered it the better indicator of the true value of the
property for taxation purposes. Id. at 6. The BTA therefore ordered the auditor to
assess the true value of the property at $4,790,000, which reflected the $4,900,000
sale price minus $110,000 paid for the 2.3911-acre parcel in April 2004. Id. at 10,
fn. 4.
{¶ 10} The Bedford Board of Education appealed the BTA’s decision to
this court, contending first that the December 2003 sale price does not establish
the true value of the property because it does not reflect any property value
increase attributable to the long-term lease to U.S. Bank that encumbered the
property on the tax lien date. Second, Bedford argues that the BTA improperly
relied on the recording dates of the deeds, rather than the dates the parties actually
negotiated the sale prices, when it determined that the December 2003 sale
occurred closer in time to the tax lien date than the April 2004 sale; thus, Bedford
asserts that the “sale price which was closer in time to the tax lien date was the
sale in 2004.” Third, Bedford maintains that the BTA’s decision is internally
inconsistent because it relied on the December 2003 sale price to value the
34.5784-acre parcel but used the April 2004 sale price to value the 2.3911-acre
parcel. Lastly, Bedford claims that the BTA has jurisdiction to use the April 2004
sales price of $7,400,000 to determine the true value of the property for tax year
2005 pursuant to R.C. 5715.19(D), which relieves a party of the need to file a new
complaint for subsequent tax years until the original complaint is finally
determined.
{¶ 11} HIN urges that the December 2003 sale, being closer in time to the
tax lien date, provides a better indication of the property’s value as of the January
1, 2004 tax lien date. It further contends that neither the date that the buyer and
5
SUPREME COURT OF OHIO
seller agreed to the sale price nor the date that the parties executed the sales
contract should be used in determining whether the December 2003 or the April
2004 sale is closer in time to the tax lien date because a sale cannot be deemed to
have been completed until a closing occurs. HIN also maintains that this court
lacks jurisdiction to consider the value of the property for tax year 2005 because
that matter was not part of the notice of appeal and therefore is not properly
before the court.
{¶ 12} Thus, this court is called upon to decide whether the BTA correctly
determined that the December 2003 sale should be used to establish the true value
of the property as of January 1, 2004, the tax lien date.
Valuation of Real Property for Taxation Purposes
{¶ 13} Pursuant to R.C. 5717.04, this court reviews a decision of the BTA
to determine whether it is reasonable and lawful.
And as we indicated in
Strongsville Bd. of Edn. v. Wilkins, 108 Ohio St.3d 115, 2006-Ohio-248, 841
N.E.2d 303, ¶ 7, a decision of the BTA will be affirmed if it correctly applies the
law.
{¶ 14} R.C. 5713.03 sets forth how real estate is to be valued for tax
purposes: “In determining the true value of any tract, lot, or parcel of real estate
under this section, if such tract, lot, or parcel has been the subject of an arm’s
length sale between a willing seller and a willing buyer within a reasonable
length of time, either before or after the tax lien date, the auditor shall consider
the sale price of such tract, lot, or parcel to be the true value for taxation
purposes.” (Emphasis added.)
{¶ 15} In construing a statute, we must ascertain and give effect to the
intent of the legislature. Dircksen v. Greene Cty. Bd. of Revision, 109 Ohio St.3d
470, 2006-Ohio-2990, 849 N.E.2d 20, ¶ 16. Determining this intent requires the
court “to read words and phrases in context and construe them in accordance with
rules of grammar and common usage.” State ex rel. Russell v. Thornton, 111
6
January Term, 2010
Ohio St.3d 409, 2006-Ohio-5858, 856 N.E.2d 966, ¶ 11. When the statutory text
is unambiguous, we apply it as written. Dircksen at ¶ 17.
{¶ 16} R.C. 323.11 defines the tax lien date as the first day of January
annually. Accordingly, as this court stated in Freshwater v. Belmont County Bd.
of Revision (1997), 80 Ohio St.3d 26, 29-30, 684 N.E.2d 304, “the first day of
January of the tax year in question is the crucial valuation date for tax assessment
purposes.” In this case, January 1, 2004, is the relevant valuation date, and the
parties do not differ on this point.
{¶ 17} The statutory factors to be considered in determining the true value
of property for taxation purposes pursuant to R.C. 5713.03 are whether the
property has been the subject of an arm’s-length sale, whether that sale occurred
between a willing seller and a willing buyer, and whether that sale occurred
within a reasonable length of time either before or after the tax lien date.
{¶ 18} This court has construed R.C. 5713.03 in Berea City School Dist.
Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 2005-Ohio4979, 834 N.E.2d 782, and has held that “when the property has been the subject
of a recent arm’s-length sale between a willing seller and a willing buyer, the sale
price of the property shall be ‘the true value for taxation purposes.’ ” Id. at ¶ 13,
quoting R.C. 5713.03.
{¶ 19} While we continue to adhere to the principle of law enunciated in
Berea, that case is distinguishable from this case because Berea involved only one
sale, which occurred prior to the tax lien date, and our review there chiefly
concerned whether that sale had occurred within a reasonable length of time prior
to the tax lien date, such that the auditor should be required to consider the sale
price to be the true value of property for taxation purposes. Id. at ¶ 16. We
concluded that the auditor could not use other evidence of value to determine true
value when a sale had occurred within a reasonable length of time from the tax
lien date; therefore, the recency of the sale provided a basis for the auditor to use
7
SUPREME COURT OF OHIO
the sale price as the true value of the property. Id. at ¶ 13. However, this case
involves two sales, one occurring prior to the tax lien date and one occurring
subsequent to the tax lien date, and we are called upon to determine which sale
should be used as evidence of the true value.
{¶ 20} When a property has been the subject of two arm’s-length sales
between a willing seller and a willing buyer within a reasonable length of time
either before or after the tax lien date, the sale occurring closer in time to the tax
lien date establishes the true value of the property for taxation purposes. This
principle emanates from R.C. 5713.03, which presupposes that an arm’s-length
sale close in time to the tax lien date accurately indicates the value of property as
of that date. It follows that when a property has been the subject of two arm’slength sales between willing sellers and willing buyers, the sale occurring closer
in time to the tax lien date provides a more accurate indication of the true value of
the property as of the tax lien date than does a sale occurring more remotely in
time from that date.
{¶ 21} Bedford’s contention that the date on which the parties agreed to a
sale price is a better date to use for determining the proximity of a sale to the tax
lien date is not well taken. Legal title to real property transfers from the seller to
the buyer with the delivery and acceptance of an executed deed. See Wayne Bldg.
& Loan Co. of Wooster v. Yarborough (1967), 11 Ohio St.2d 195, 212, 40
O.O.2d 182, 228 N.E.2d 841; Kniebbe v. Wade (1954), 161 Ohio St. 294, 297, 53
O.O. 175, 118 N.E.2d 833; Baldwin v. Bank of Massilon (1853), 1 Ohio St. 141,
148. As this court long ago recognized in Churchill v. Little (1872), 23 Ohio St.
301, 307, an executory contract for the purchase of land “does not convey, or
purport to convey, or legally to incumber or affect any estate or interest in land.”
Further, in McCombs v. Howard (1868), 18 Ohio St. 422, 436, quoting 1 Hilliard,
The Law of Vendors and Purchasers of Real Property (1858) 9, this court
described it as settled that “as a general rule, the purchaser, under a contract for
8
January Term, 2010
the sale of land, before conveyance, has ‘neither a legal nor equitable right, as
against the seller, until he pay the purchase money.’ ” See also Coggshal v.
Marine Bank Co. (1900), 63 Ohio St. 88, 57 N.E. 1086, paragraphs one and two
of the syllabus (explaining that the buyer obtains an equitable estate in land, equal
to the amount of the purchase money paid, through the purchase agreement that
may ripen into a right to the conveyance of legal title according to the terms of the
contract, but the seller retains both legal title and a beneficial estate in the
property to the extent of the unpaid purchase money).
{¶ 22} Nor does entering into a contract to purchase real property
constitute a transfer for taxation purposes. Notably, this court in Victoria Plaza
Ltd. Liab. Co. v. Cuyahoga Cty. Bd. of Revision (1999), 86 Ohio St.3d 181, 182183, 712 N.E.2d 751, recognized that the holder of an equitable interest in real
property by virtue of a sales contract is not its legal owner and therefore lacks
standing to file a real-property-tax-valuation complaint. R.C. 323.41 provides
that “[e]ach person holding lands shall pay the tax assessed thereon each year * *
*” (emphasis added), and R.C. 319.20 directs the county auditor to transfer the
property into the buyer’s name on the tax list “on application and presentation of
title.” (Emphasis added.)
{¶ 23} R.C. 317.22 provides that “[n]o deed of absolute conveyance of
land * * * shall be recorded by the county recorder until * * * [t]he conveyance
presented to the recorder bears the stamp of the county auditor * * * [and s]uch
conveyance has been presented to the county auditor, and by the county auditor
indorsed ‘transferred’ or ‘transfer not necessary.’ ” Before the deed may be
endorsed by the auditor, however, R.C. 319.202 requires the new owner to submit
a real property conveyance fee statement to the auditor declaring the value of the
real property, and pursuant to R.C. 319.20, the auditor must transfer the parcel
into the new owner’s name on the tax list. The purpose of this statutory scheme is
9
SUPREME COURT OF OHIO
to provide the auditor the necessary information to determine the true value of
property based on a property sale in accordance with R.C. 5713.03.
{¶ 24} For this reason, in determining the date a sale of property occurs,
only for purposes of establishing the true value of property pursuant to R.C.
5713.03, the auditor should use the date that the real property conveyance fee
statement is filed in the auditor’s office as the sale date of the property.
{¶ 25} Here, the filing of the real property conveyance fee statement for
the December 2003 sale on December 30, 2003, occurred in closer proximity to
the tax lien date than the filing of the real property conveyance fee statement for
the April 2004 sale on April 30, 2004. Therefore, for purposes of establishing the
true value of the property in accordance with R.C. 5713.03, the auditor should use
the December 2003 sale price as the true value of the property for tax year 2004.
{¶ 26} Bedford’s position that the earlier sale does not reflect any
property value increase attributed to the long-term U.S. Bank lease is also not
well taken.
We recognize that the parties to sales factor the value of
encumbrances into the selling price of the property. We therefore assume that
both Tops Markets and JBK Cuyahoga considered the value of the long-term
lease when they agreed to the sale price, as both parties anticipated the subsequent
lease of the property to U.S. Bank. There is an expectation that when a willing
seller and a willing buyer agree to the selling price of property, they give due
consideration to the value of leases that encumber it as well as to its potential
rental or income-producing value. See Rhodes v. Hamilton Cty. Bd. of Revision,
117 Ohio St.3d 532, 2008-Ohio-1595, 885 N.E.2d 236, ¶ 3 (declining to adjust the
true value of property on the basis of a long-term lease encumbering it when the
property had been the subject of an arm’s-length sale).
{¶ 27} Moreover, the General Assembly has mandated that the auditor
consider the sale price to be the true value of the property for taxation purposes.
This section of the Revised Code contains no exception for the auditor to value
10
January Term, 2010
property encumbered by a lease any differently from unencumbered property.
Rather, the only considerations articulated in R.C. 5713.03 are whether the
property has been the subject of an arm’s-length sale between a willing seller and
a willing buyer within a reasonable length of time either before or after the tax
lien date, and we apply those considerations in this case.
{¶ 28} The record here supports the conclusion that an arm’s-length sale
occurred between a willing seller and a willing buyer in December 2003 and that
the higher sale price for the property obtained in April 2004 resulted from the
serendipity of HIN’s purchase, as HIN contemplated a 1031 exchange and
specifically sought a property with a triple net lease. Thus, the facts here are not
contrived nor do they suggest any effort by the parties to manipulate the sale to
derive a favorable tax result. These are two separate arm’s-length transactions,
and nothing in the record suggests otherwise.
{¶ 29} Finally, in accordance with Dayton-Montgomery Cty. Port Auth. v.
Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, 865
N.E.2d 22, ¶ 32, this court lacks jurisdiction to consider Bedford’s assertions that
(1) the BTA’s decision is internally inconsistent because it valued the 2.3911-acre
parcel using the April 2004 sale price of that parcel and (2) for tax year 2005, the
April 2004 sale price should be used to assess the true value of the property
because Bedford did not preserve these errors for appeal, as it failed to include
them specifically in the notice of appeal.
Conclusion
{¶ 30} When a property is the subject of two arm’s-length transactions
between a willing seller and a willing buyer within a reasonable time before or
after the tax lien date, the sale occurring closer in time to the tax lien date
establishes the true value of the property for taxation purposes. In determining
which sale occurred in closer proximity in time to the tax lien date, the auditor
should use the date the real property conveyance fee statement is filed in the
11
SUPREME COURT OF OHIO
auditor’s office as the sale date of the property. Here, the BTA determined that
the December 2003 sale occurred in closer proximity to the tax lien date than the
April 2004 sale and therefore established the true value of the property for tax
year 2004 as $4,790,000. Because that decision is reasonable and lawful, it is
affirmed.
Decision affirmed.
MOYER, C.J., and PFEIFER, O’CONNOR, LANZINGER, and CUPP, JJ., concur.
LUNDBERG STRATTON, J., concurs separately.
__________________
LUNDBERG STRATTON, J., concurring.
{¶ 31} While I appreciate that sometimes it is difficult to establish the
date of sale under R.C. 5713.03 for considering the true value for taxation
purposes, I am concerned that the majority implies that only the conveyance fee
date establishes the date of sale for purposes of evaluation by the auditor.
{¶ 32} I believe that using the date the conveyance fee statement is filed
to establish the date of sale is a useful point in assisting the auditor in determining
value.
However, such a rule should be a rebuttable presumption and an
evidentiary tool only. Language fixing the date of the sale does not appear in the
statute. The General Assembly did not establish the date of the conveyance fee as
the date of sale, and this court should not add such language to the statute. The
parties should be allowed to present evidence at hearings before a board of
revision and the Board of Tax Appeals to establish that the true date of sale is a
different point from the date of the filing of the conveyance fee.
{¶ 33} However, because the majority includes the following language in
its syllabus, “[t]he auditor should use the date that the real property conveyance
fee statement is filed in the auditor’s office as the sale date of the property,” I
believe that this language may be interpreted to permit the parties to submit
evidence of a different date of sale to rebut the conveyance date. Thus, I concur.
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January Term, 2010
CUPP, J., concurs in the foregoing opinion.
__________________
Siegel, Siegel, Johnson & Jennings Co., L.P.A., and Jay P. Siegel, for
appellee HIN, L.L.C.
Kolick & Kondzer, Thomas A. Kondzer, John P. Desimone, and Daniel J.
Kolick, for appellant.
______________________
13
[Cite as FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio St.3d
485, 2010-Ohio-1921.]
FIRSTCAL INDUSTRIAL 2 ACQUISITIONS, L.L.C., APPELLANT, v. FRANKLIN
COUNTY BOARD OF REVISION ET AL., APPELLEES.
[Cite as FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision,
125 Ohio St.3d 485, 2010-Ohio-1921.]
Taxation — Bulk sale — Allocation of lump-sum sales price to various parcels —
Burden of proof is on party challenging use of the property’s allocated
sale price for valuation — Decision affirmed.
(No. 2009-1505 — Submitted March 31, 2010 — Decided May 6, 2010.)
APPEAL from the Board of Tax Appeals, Nos. 2006-B-1789, 2006-B-1790,
2006-B-1791, and 2006-B-1792.
__________________
O’CONNOR, J.
{¶ 1} This is an appeal from a decision of the Board of Tax Appeals
(“BTA”) that found the value of four parcels of real property.1
Appellant,
FirstCal Industrial 2 Acquisitions, L.L.C., part of a real estate investment trust,
challenges the BTA’s determination, which adopted the Franklin County Board of
Revision’s (“BOR”) allocation of the bulk-sale price that FirstCal reported on its
conveyance-fee statement.
FirstCal contends that the BTA’s decision is
unreasonable and unlawful because the allocation performed by the BOR lacks a
reasonable factual basis and because the BOR and the BTA improperly placed the
burden of refuting the validity of that allocation on FirstCal. We disagree and
therefore affirm.
Relevant Background
1. One of the parcels is split into taxable and tax-abated portions but constitutes a single parcel.
See FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision (July 28, 2009), BTA
Nos. 2006-B-1789, 2006-B-1790, 2006-B-1791, and 2006-B-1792, 2009 WL 2360912, *7, fn. 3.
SUPREME COURT OF OHIO
{¶ 2} On March 24, 2006, the South-Western City Schools Board of
Education and the Hilliard City Schools Board of Education (collectively, the
“school boards”) filed five valuation complaints concerning five separate parcels
that were listed on a conveyance-fee statement filed by FirstCal Industrial 2
Acquisition, L.L.C., as grantee. The school boards contended that the value
assigned to the parcels for tax year 2005 should be proportionately increased in
light of the October 2005 bulk sale of the parcels.
{¶ 3} On the conveyance-fee statement, FirstCal reported a bulk-sale
price of $34,336,121 relating to the properties transferred that were located in
Franklin County. That price, according to the fee statement, pertained to six listed
parcels. The BTA made a specific finding that in spite of “some duplications
and/or errors in listing parcel numbers” on the deed and the fee statement, the sale
involved the five parcels challenged by the boards of education in their valuation
complaints.
FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of
Revision (July 28, 2009), BTA Nos. 2006-B-1789, 2006-B-1790, 2006-B-1791,
and 2006-B-1792, 2006 WL 2360912, *7, fn. 3. FirstCal did not contest that
finding in this court. 2
{¶ 4} Because the sale price reported on the conveyance-fee statement
exceeded the aggregate value of the parcels as determined by the auditor, the
school boards sought an allocated increase in value of the parcels at issue.3 In
their valuation complaints, the school boards computed a new value for each
2. At the BOR , FirstCal asserted that the valuation complaints were jurisdictionally defective
because multiple parcels that were located in different taxing districts were referenced on the same
complaint. The BTA resolved this issue against FirstCal, and on appeal, FirstCal does not contest
the jurisdiction of the administrative tribunals below. FirstCal Indus., 2009 WL 2360912, *3. We
do not discern any jurisdictional issue, given that the school boards filed separate complaints for
each parcel at issue.
3. The aggregate value assigned to all the parcels by the auditor was approximately $22,350,000
rather than the $34,336,121 sale price reported on the conveyance-fee statement.
2
January Term, 2010
parcel by (1) determining each parcel’s percentage of the aggregate value
assessed as to all parcels by the auditor and then (2) applying that percentage to
the $34,336,121 sale price.
{¶ 5} A hearing was held before the BOR on July 18, 2006. FirstCal
presented the testimony of William McVeigh, a property-tax manager first for the
seller, Duke Realty Ohio, and later for FirstCal. McVeigh was engaged to
analyze the property tax aspects of the sale for both buyers and sellers. He
testified that he had personal knowledge of “how things were negotiated and why
things were negotiated.”
{¶ 6} The bulk sale involved 72 industrial warehouse buildings in Ohio
that were transferred as part of the sale, and the buildings were located in various
counties, including Cuyahoga, Hamilton, and Franklin. Some vacant parcels were
also transferred as part of the deal. Motivation for the sale lay in the seller’s
decision to broadly divest Ohio industrial properties.
{¶ 7} The deal was negotiated as one price. Later, FirstCal allocated the
sale price to each county based on its own considerations. FirstCal’s goal was to
liquidate the properties within 12 months. The seller was merely cutting its
losses.
{¶ 8} Because real estate investment trusts were involved, no unitary
allocation had to be performed for federal tax purposes. The county-by-county
allocations reported on conveyance-fee statements were not separately negotiated
aspects of sale price.
{¶ 9} McVeigh stated generally that the arm’s-length character of some
real estate sales between real estate investment trusts can be questioned because
of the special motivations that the parties have in arriving at a sale price, such as
portfolio balancing to adhere to Securities and Exchange Commission
3
SUPREME COURT OF OHIO
requirements. But McVeigh did not assert that this case fell into that category.4
Moreover, McVeigh testified that some types of bulk-sale prices and allocations
pertain to property value more than others do – but he did not testify that the type
of allocation among the counties in this case was unrelated to property value.
{¶ 10} One of the five complaints that the school boards originally filed
was dismissed because the case was settled. The parties in that case stipulated
that the value was the sale price paid to FirstCal when it resold the property in
March 2006. The school boards allege – and FirstCal does not dispute – that the
sale price in that case was $3,200,000. That amount is lower than the $3,329,400
that would have been allocated to the property pursuant to the school boards’
proposal,5 but it is significantly higher than the value originally assigned by the
auditor, $2,400,028.
{¶ 11} The BOR decided to use the reported aggregate sale price and
adopted the proposed allocations for the four remaining properties.
FirstCal
appealed to the BTA, where the school boards sought discovery of documentation
relating to the bulk sale.
When FirstCal failed to comply and produced a
purported purchase agreement but not the other documents requested, it was
sanctioned.
4. We have acknowledged that the typical motivation of the seller and the buyer constitutes an
element in determining whether a transaction constitutes an arm’s-length sale. See AEI Net Lease
Income & Growth Fund v. Erie Cty. Bd. of Revision, 119 Ohio St.3d 563, 2008-Ohio-5203, 895
N.E.2d 830, ¶ 25. But FirstCal does not contest the arm’s-length character of the sale.
5. The school boards assert that the difference between the dollar amount that the school boards’
complaint would have allocated to that property ($3,329,400) and the actual selling price
($3,200,000) was further allocated among the four remaining properties in the present case.
FirstCal does not contest this assertion, and the amounts found by the BOR appear to be consistent
with it.
4
January Term, 2010
{¶ 12} At the BTA hearing, FirstCal relied on exhibits that included a
deed, the alleged purchase agreement,6 and the conveyance-fee statement. There
was no testimony at the BTA hearing.
{¶ 13} In its decision, the BTA discussed the case law and extracted the
principle that the “price garnered through a bulk sale is evidence which may be
used to value realty sold.” FirstCal, 2009 WL 2360912, *6. The BTA then
imposed the burden of proof on FirstCal as the appellant and as the opponent of
using the sale price. Because FirstCal did not discharge that burden, the BTA
affirmed the BOR’s valuation in accordance with the allocated sale price. Id.
Analysis
{¶ 14} R.C. 5713.03 states that the auditor “shall consider the sale price of
[any] tract, lot, or parcel to be the true value for taxation purposes” if the sale was
“an arm’s length sale” that occurred “within a reasonable length of time, either
before or after the tax lien date.” This case involves a bulk sale of real properties
located throughout Ohio that occurred in October 2005, about ten months after the
tax lien date at issue.7 FirstCal, as purchaser in the bulk-sale transaction, reported
an allocated portion of the total bulk-sale price as the sale price of those parcels
that were located in Franklin County.
{¶ 15} The use of the sale price in this case involved a two-step analysis.
First, the school boards urged that the aggregate sale price reported on the
conveyance-fee statement constituted the aggregate value of the Franklin County
parcels to which it pertained. Next, the school boards suggested – and the BOR
adopted – an allocation of the aggregate Franklin County sale price to the
individual Franklin County parcels.
6. The school boards renew their objection to the authenticity of the document, but none of the
specific content of that document appears to be material to the arguments raised by the parties. In
any event, resolving the case in the school boards’ favor renders the issue moot.
5
SUPREME COURT OF OHIO
{¶ 16} When a single parcel is the subject of a recent, arm’s-length sale,
the sale price “ ‘shall be “the true value for taxation purposes.” ’ ” Cummins
Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516,
2008-Ohio-1473, 885 N.E.2d 222, ¶ 13, quoting Berea City School Dist. Bd. of
Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 2005-Ohio-4979, 834
N.E.2d 782, ¶ 13, quoting R.C. 5713.03. We have also stated, however, that the
bulk sale differs from the situation in which a single parcel is the subject of a sale
because the issue of proper allocation stands between the stated sale price and its
character as reflecting the value of any one particular parcel. See generally St.
Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. of Revision, 115 Ohio St.3d
365, 2007-Ohio-5249, 875 N.E.2d 85, ¶ 15 (in a bulk-sale case, a “question arises
beyond the basic pronouncement of Berea: whether the proffered allocation of
bulk sale price to the particular parcel of real property is ‘proper,’ which is the
same as asking whether the amount allocated reflects the true value of the parcel
for tax purposes”).
{¶ 17} In the bulk-sale situation, two overarching principles control our
decisions. We articulated those principles in two successive iterations of the same
underlying case. In Conalco, Inc. v. Monroe Cty. Bd. of Revision (1977), 50 Ohio
St.2d 129, 4 O.O.3d 309, 363 N.E.2d 722, paragraph two of the syllabus, we
emphasized the importance of the sale price in the bulk-sale context, stating that
“the best evidence of ‘true value in money’ is the proper allocation of the lumpsum purchase price and not an appraisal ignoring the contemporaneous sale.”
{¶ 18} After Conalco had returned to the BTA twice and the BTA had
concluded that a probative allocation of the price could not be obtained, the court
held that the BTA “is not required, in every instance, and in all events, to accept
as the true value in money of real property, an allocation of a portion of a lump7. The purchase agreement proffered by FirstCal indicates that the bulk sale included properties
outside Ohio as well. That fact is not material to our decision of the case.
6
January Term, 2010
sum purchase price paid for a group of assets which included the property in
question.” Consol. Aluminum Corp. [formerly Conalco] v. Monroe Cty. Bd. of
Revision (1981), 66 Ohio St.2d 410, 414, 20 O.O.3d 357, 423 N.E.2d 75. Indeed,
when the BTA “finds [that] a proper allocation of the lump-sum purchase price to
the property in question is not possible,” the BTA “may consider all of the
evidence which is before it in determining the true value in money of the
property.” Id. at 415.
{¶ 19} FirstCal avers that the school boards had the burden of showing the
propriety of allocation at both levels.
{¶ 20} As noted, the present case presents two allocations of a total sale
price. First, FirstCal as purchaser allocated a portion of the overall bulk-sale price
to Franklin County in order to report that amount on the conveyance-fee
statement.
Second, the BOR allocated the Franklin County amount to the
individual Franklin County parcels.
We will address the propriety of each
allocation in turn.
FirstCal had the burden to show that its allocation
of total sale price to Franklin County did not reflect the
aggregate true value of the parcels in the county.
{¶ 21} When real property is sold, the new owner will record its deed in
order to secure its title to the property against other claimants. But a prerequisite
to recording is the endorsement of the deed by the county auditor. And before the
deed may be endorsed, R.C. 319.202 “requires the new owner to submit a real
property conveyance fee statement to the auditor declaring the value of the real
property,” after which the auditor must, pursuant to R.C. 319.20, “transfer the
parcel into the new owner’s name on the tax list.” HIN, L.L.C. v. Cuyahoga Cty.
Bd. of Revision, 124 Ohio St.3d 481, 2010-Ohio-687, 923 N.E.2d 1144, ¶ 23.
{¶ 22} In this case, FirstCal acceded to the ownership of the parcels at
issue by virtue of the October 2005 sale and, as new owner, submitted the
7
SUPREME COURT OF OHIO
conveyance-fee statement setting forth the aggregate the sale price, as allocated
by FirstCal itself, for the Franklin County properties. Because the BOR and the
auditor increased the value of the parcels through an allocation of the aggregate
sale price that FirstCal reported, and because the BOR and auditor did so in
response to the school boards’ claims, FirstCal demands that the county officials
or the school boards shoulder the burden of proving the propriety of the amount of
sale price that FirstCal itself allocated to Franklin County. We disagree.
{¶ 23} We have held that the “initial burden on a party presenting
evidence of a sale is not a heavy one, where the sale on its face appears to be
recent and at arm’s length.” Cummins Property Servs., 117 Ohio St.3d 516, 2008Ohio-1473, 885 N.E.2d 222, ¶ 41. Indeed, our cases acknowledge that the school
board, as the proponent of using a sale price to value real property, typically
makes a prima facie case when it presents a recent conveyance-fee statement
along with a deed to evidence the sale and the price. Olentangy Local Schools
Bd. of Edn. v. Delaware Cty. Bd. of Revision, 125 Ohio St.3d 103, 2010-Ohio1040, 926 N.E.2d 302, ¶ 14, citing Worthington City Schools Bd. of Edn. v.
Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, 918 N.E.2d
972, ¶ 28.
{¶ 24} Moreover, the basic documentation of a sale invokes a “rebuttable
presumption” that “the sale has met all the requirements that characterize true
value.” Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision
(1997), 78 Ohio St.3d 325, 327, 677 N.E.2d 1197.
{¶ 25} Accordingly, the burden lay on FirstCal in this case, as the
opponent of using the reported sale price, to demonstrate why it did not properly
reflect the aggregate true value of the parcels. FirstCal, as purchaser of the
property, performed the allocation to Franklin County in the first instance, and
FirstCal possesses the information necessary to demonstrate its proper
relationship to the value of the Franklin County parcels.
8
January Term, 2010
{¶ 26} Citing St. Bernard Self-Storage, 115 Ohio St.3d 365, 2007-Ohio5249, 875 N.E.2d 85, is unavailing. In St. Bernard Self-Storage, a real estate
contract for the purchase of a self-storage facility recited that about half the
contract price should be viewed as purchasing the goodwill of the established selfstorage business. Id. at ¶ 5. The BTA rejected the allocation and viewed the
entire sale price (minus a minor deduction attributable to personal property) as the
value of the real estate. Id. at ¶ 11. In affirming, we held that the recitation of the
allocation on the face of the contract did not raise a presumption in favor of
abiding by it. Id. at ¶ 21. Rather, the owner, as proponent of the allocation, bore
the burden of demonstrating the propriety of the allocation. Id. at ¶ 25. It failed
to do so.
{¶ 27} In St. Bernard Self-Storage, the owner and proponent of the
allocation of the sale price had to show “corroborating indicia” in support of the
allocation. Id., 115 Ohio St.3d 365, 2007-Ohio-5249, 875 N.E.2d 85, ¶ 17. But
must the school boards in the present case likewise demonstrate the propriety of
the allocation that was made on the conveyance-fee statement itself? We answer
the question in the negative because the allocation of the sale price on the
Franklin County conveyance-fee statement was performed by the opponent of
using the allocated sale price, FirstCal, as purchaser of the parcels within the
county.
{¶ 28} We have stated that an important purpose of the statutory scheme
is “to provide the auditor the necessary information to determine the true value of
property based on a property sale in accordance with R.C. 5713.03.” HIN, L.L.C.,
124 Ohio St.3d 481, 2010-Ohio-687, 923 N.E.2d 1144, ¶ 23. If the allocation that
FirstCal itself reported does not properly reflect the aggregate value of the
parcels, it is FirstCal’s burden to show that it does not. Indeed, FirstCal is in the
unique position of knowing how the allocation was made and is best able to
access the pertinent documentation.
9
SUPREME COURT OF OHIO
{¶ 29} Although FirstCal presented testimony on the subject to the BOR,
neither the BOR nor the BTA found that the testimony specifically impugned the
validity of relying on the aggregate sale price reported on the conveyance-fee
statement. In that regard, the BOR and the BTA, as finders of fact, did not
contravene any legal principle. Nor did they abuse their discretion in evaluating
the credibility of the evidence and determining the weight to accord to it. See
Meijer Stores Ltd. Partnership v. Franklin Cty. Bd. of Revision, 122 Ohio St.3d
447, 2009-Ohio-3479, 912 N.E.2d 560, ¶ 17 (court “ ‘ “will not reverse the BTA’s
determination on credibility of witnesses and weight given to their testimony
unless we find an abuse of * * * discretion, ’ ” quoting Strongsville Bd. of Edn. v.
Cuyahoga Cty. Bd. of Revision, 112 Ohio St.3d 309, 2007-Ohio-6, 859 N.E.2d
540, ¶ 15, quoting Natl. Church Residence v. Licking Cty. Bd. of Revision (1995),
73 Ohio St.3d 397, 398, 653 N.E.2d 240).
The pro rata allocation of the aggregate sale price based upon
each parcel’s proportionate share of the auditor’s original assessment
was a reasonable method of determining the value of the individual parcels.
{¶ 30} FirstCal also asserts that the BOR and the BTA lacked any
evidentiary basis for allocating the aggregate sale price for the Franklin County
parcels to the individual parcels. As discussed in the fact section, the allocation
assigned to each parcel a share of the aggregate Franklin County sale price in
proportion to that parcel’s percentage of the aggregate amount of value that the
auditor determined for all the parcels, plus an additional increment because the
parcel that was subject to a second sale sold for somewhat less than the amount
assigned to it.
FirstCal characterizes this allocation as a “desk appraisal
allocation” performed by the school boards’ attorneys and asserts that it gives “no
consideration for the age differences, locational differences etc. of the dissimilar
properties.” We disagree.
10
January Term, 2010
{¶ 31} The BOR and the BTA allocated in accordance with the relative
value of the parcels to their aggregate value in accordance with the auditor’s
original assessments. In St. Bernard Self-Storage, 115 Ohio St.3d 365, 2007Ohio-5249, 875 N.E.2d 85, we spoke of the need for “corroborating indicia” to
support an allocated sale price. Id., ¶ 17. The method used in this case presents
those indicia.
The auditor’s valuation presumptively accounted for the “age
differences” and the “locational differences” of the Franklin County parcels. See
Colonial Village, Ltd. v. Washington Cty. Bd. of Revision, 123 Ohio St.3d 268,
2009-Ohio-4975, 915 N.E.2d 1196, ¶ 31 (the auditor’s valuation constitutes
“default valuation,” the validity of which need not be separately proved).
Although not rising to the level of a presumptively correct valuation, pursuant to
Colonial Village, the auditor’s initial determination of value for a given tax year
possesses an increment of prima-facie probative force, and the percentages
derived from those valuations are “corroborating” in the absence of better
evidence. As a result, the proportion of each parcel’s assigned value to the
aggregate value of the parcels possesses the same increment of prima facie
probative force. FirstCal was free at the BOR and the BTA to rebut that probative
force by presenting its own contrary evidence. It did not do so.
The pro rata allocation of the aggregate sale price based on the
auditor’s original assessment was not unlawful.
{¶ 32} FirstCal also maintains that the allocation of aggregate value by the
BOR and the BTA violates the legal precepts of our case law. Specifically,
FirstCal maintains that the only situation in which the law permits a formulaic
allocation of a bulk-sale price is when the properties are fundamentally
“identical” units, as in Pingue v. Franklin Cty. Bd. of Revision (1999), 87 Ohio
St.3d 62, 63, 717 N.E. 2d 293. We disagree. Contrary to FirstCal’s suggestion,
we have never confronted the situation presented in this case, i.e., a percentage
allocation based on the auditor’s original assessments. In Corporate Exchange
11
SUPREME COURT OF OHIO
Bldgs. IV & V, L.P. v. Franklin Cty. Bd. of Revision (1998), 82 Ohio St.3d 297,
695 N.E.2d 743, the owner sought to reduce the value assigned to two officebuilding parcels by allocating the bulk purchase price for both parcels in
accordance with the relative square footage of rentable office space contained by
the respective buildings. Id. at 299. In affirming the BTA’s refusal to adopt that
allocation, we concluded that the BTA could reasonably and lawfully have found
that the owner had “failed to produce sufficient competent and probative evidence
to meet its burden of proof.”
Id. at 300.
Nothing in that pronouncement
precludes, as a matter of law, an allocation based on the relative value of parcels
pursuant to the auditor’s original assessments.
{¶ 33} FirstCal’s argument is anomalous in this regard. On one hand,
FirstCal embraces the auditor’s original valuations as the most probative evidence
of value, but FirstCal then disclaims the valuations’ significance as to the relative
value of the parcels to one another. Indeed, the sale of the one parcel tends to
support, not refute, the validity of the BOR’s allocation because the parcel fetched
a sale price almost $800,000 greater than the auditor’s original valuation while
falling only $129,500 short of the allocated figure that the school boards had
suggested for the parcel.
Plainly, the BOR’s allocation constituted a more
accurate determination of value than the auditor’s original valuation. Moreover,
the BOR’s decision to allocate the $129,500 among the other parcels could
reasonably be construed as a means of correcting any inaccuracy in the
percentages based on the auditor’s original valuation.
{¶ 34} As for Elsag-Bailey, Inc. v. Lake Cty. Bd. of Revision (1996), 74
Ohio St.3d 647, 660 N.E.2d 1184, and Consol. Aluminum Corp., 66 Ohio St.2d
410, 20 O.O.3d 357, 423 N.E.2d 75, both involved extensive testimony and
appraisal evidence that ultimately led to the rejection of the proffered allocation of
a bulk-sale price. Neither case stands for the proposition that the proponent of
allocating an aggregate sale price based on percentages derived from the auditor’s
12
January Term, 2010
original assessments must present additional evidence to support the propriety of
the allocation.
Conclusion
{¶ 35} For all the foregoing reasons, the BTA acted reasonably and
lawfully when it adopted the bulk-sale price as allocated by the BOR.
We
therefore affirm the decision of the BTA.
Decision affirmed.
PFEIFER, LUNDBERG STRATTON, O’DONNELL, LANZINGER, and CUPP, JJ.,
concur.
BROWN, C.J., not participating.
__________________
Wayne E. Petkovic, for appellant.
Rich & Gillis Law Group, L.L.C., and Mark H. Gillis, for appellees
Hilliard City School District Board of Education and South-Western City School
District Board of Education.
______________________
13
[Cite as St. Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. of Revision, 115 Ohio St.3d 365,
2007-Ohio-5249.]
ST. BERNARD SELF-STORAGE, L.L.C., APPELLANT, v. HAMILTON
COUNTY BOARD OF REVISION ET AL., APPELLEES.
[Cite as St. Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. of Revision, 115
Ohio St.3d 365, 2007-Ohio-5249.]
Taxation — Valuation of real property — Contractual allocation of portion of
purchase price to goodwill of associated business rejected.
(No. 2006-0884—Submitted May 23, 2007—Decided October 10, 2007.)
APPEAL from the Board of Tax Appeals, No. 2003-T-1532.
__________________
MOYER, C.J.
{¶ 1} In this case, the parties agree that the arm’s-length, negotiated
purchase of a self-storage facility is the basis for measuring the value of the real
property for the 2002 tax year. They disagree on whether the allocation in the
purchase contract of approximately half the purchase price to the goodwill of an
associated business should be subtracted from the price to yield the value of the
real estate.
The appellant, St. Bernard Self-Storage, L.L.C. (“St. Bernard”),
asserts that the contractual allocation to goodwill reflects a business value that
must be separated from the realty. The Board of Tax Appeals rejected that view,
finding that the amount allocated to goodwill constituted part of the value of the
realty. We conclude that the order of the Board of Tax Appeals is supported by
the record and consistent with the law, and we therefore affirm it.
I
{¶ 2} At issue are approximately 4.04 acres used for the operation of a
self-storage business that offers customers 352 non-climate-controlled storage
units of varying sizes, along with 63 outside spaces on a gravel lot that are used
primarily for the storage of automobiles, buses, boats, and similar items. The
interior units are housed in seven one-story metal buildings bolted to concrete
SUPREME COURT OF OHIO
slabs. A small additional building functions as an office. Customers pay a
monthly charge to store items at the facility.
{¶ 3} St. Bernard acquired the property from predecessors who had
improved the land and started the self-storage business. By agreement dated June
30, 2000, St. Bernard purchased the self-storage business assets. The purchase
agreement is a standard form for purchasing commercial real property. The
contract sets forth certain conditions to be fulfilled before closing, including the
consolidation of parcels and a subdivision that would create the parcel to be
transferred. The sellers also agreed to create easements over property not being
sold in order to furnish access to the purchased premises. During an interim
period, while the sellers worked to fulfill the conditions, the contract provided that
St. Bernard could take over management of the business.
{¶ 4} The contract purchase price is $1,950,000, prorated as follows:
“(a) Real Estate and Personal Property (other than Goodwill)—$1,000,000 and (b)
Goodwill—$950,000.”
The closing statement of the contract reiterates the
allocation with an additional breakout: $25,000 of the $1,000,000 is allocated to
personal property, while the remaining $975,000 is allocated to realty, and the
goodwill allocation remains at $950,000. Appellee board of revision and the
Board of Tax Appeals honored the allocation to personal property but regarded
the allocation to goodwill as constituting part of the value of the real property.
II
{¶ 5} At the Board of Tax Appeals hearing, James Olman, a ten percent
owner and the managing member of St. Bernard, testified that the allocation had
been fully negotiated and that it reflected his thinking about the merits of the
purchase. Olman specifically asserted that the goodwill figure of $950,000 had
been negotiated and reflected what he understood to be the “good relationship
with the community.”
2
January Term, 2007
{¶ 6} Also at the Board of Tax Appeals hearing, St. Bernard sought to
substantiate the separation of goodwill from the price of the real property through
the written reports and testimony of two expert witnesses. One expert, who was a
certified public accountant and a certified valuation analyst, prepared a report that
determined a business value—separate from the value of the realty—through a
direct capitalization method. The expert divided into a three-year average of
business earnings a capitalization rate of 22.5 percent, thereby generating an
estimated business value of $752,916. This figure is almost $200,000 lower than
the amount allocated to goodwill in the purchase contract.
{¶ 7} St. Bernard’s other expert, Jerry Fletcher, MAI, ASA, performed
an appraisal using fairly standard techniques to determine what he termed the
“value of the subject property fee simple real estate and business value,” which
amounted to $1,740,000. He then broke out the “real estate upon which real
estate taxes should be assessed,” which had a value of $1,120,000, and the “value
of the business portion of the property,” which he determined to be $620,000.
The $620,000 was more than $300,000 less than the amount allocated to goodwill
under the original purchase contract.
{¶ 8} The techniques Fletcher employed to separate independent
business value were admittedly unorthodox. He applied four approaches: (1) he
subtracted his cost figure from his total value figure and theorized that the
difference constituted business value independent of the realty, (2) he engaged in
a “Warehouse Rent Analysis,” which involved comparing the rent per square foot
for industrial warehouse space in the area with the rent per square foot for St.
Bernard’s property (in theory, the excess rent for the property reflected the value
of a retail business), (3) he developed a “Tax Ratio Analysis,” under which he
took the ratio of projected sales taxes to property taxes as an indicator of separate
business value (in theory, the sales taxes pertained to a separate value of a retail
business), and (4) he took the amount allocated to goodwill in the original
3
SUPREME COURT OF OHIO
purchase contract, placed it in a ratio to the total contract price, and applied this
ratio to his own estimation of total value to derive a separate value for the
business. In reconciling the four approaches, Fletcher emphasized the cost and
tax-ratio approaches and derived a percentage of “roughly” 35 percent of total
value as separate business value. This fixed the business value at $620,000.
{¶ 9} On cross-examination, Fletcher made a number of important
admissions: (1) that he himself had not previously used cost as a method of
separating real property value from business value in any case in which he had
testified, (2) that his warehouse-rent analysis and his sales-tax-ratio approach to
segregating business value were novelties, apparently without foundation in the
literature of appraisal, and (3) that though the business value he was identifying
was separable from the realty, the two were not separable “in saleable packages,”
i.e., the business value could not be sold independently of the real property.
{¶ 10} The county auditor also presented evidence at the Board of Tax
Appeals hearing. The county’s appraiser testified in support of his own valuation
report, which determined a value for the real property consistent with the sale
price absent any deduction for goodwill. A second expert, Norman Miller, Ph.D.,
the West Shell Professor of Real Estate and Finance in the University of
Cincinnati’s Finance Department, also testified, and his testimony is most directly
pertinent to the central issue before the court. From a theoretical standpoint, Dr.
Miller challenged the idea of separating business value from real property value in
the present context. Among other things, he cast doubt upon Fletcher’s cost
method of differentiating business value from real property value, stating that a
purchase price in excess of cost does not imply the existence of business value
because the purpose of buying income-producing property is to “beat the cost,” as
Dr. Miller put it. Dr. Miller also opined that goodwill would not exist separate
from real property value in the self-storage business, because such a business is
“homogenous” and it would make “no sense at all” to speak of goodwill.
4
January Term, 2007
{¶ 11} The Board of Tax Appeals issued its decision on April 28, 2006. It
first noted that because the board of revision had regarded the amount allocated to
goodwill as part of the value of the real property, the burden lay on St. Bernard to
persuade the Board of Tax Appeals that the contractual allocation to goodwill
should be accepted. On reviewing the evidence, the board found no support for
the allocation. Of particular importance in its analysis was the fact that “St.
Bernard’s business is to lease space,” an activity that “clearly appertains to the
real property and would be transferred to anyone who purchases the facility.”
This, along with Dr. Miller’s testimony concerning the way in which
“entrepreneurial profit” is regarded as a part of the value of real property, formed
the basis for the board’s conclusion that the value of the real property equaled the
sale price less the $25,000 of value assigned to tangible personal property.
{¶ 12} From this decision, St. Bernard appealed to this court.
III
{¶ 13} The parties first disagree on who should properly have borne the
burden of persuasion at the board of revision and at the Board of Tax Appeals.
While it is true that the party who challenges the board of revision decision before
the Board of Tax Appeals must shoulder a burden of persuasion, the question we
confront here is one more specifically tied to the circumstances of this case:
whether the proponent of a contractual allocation of value has the burden to show
the propriety of the allocation, or whether the opponent has the burden to show
that the allocation is not proper. St. Bernard contends that the presence of the
goodwill allocation in the purchase contract and the use of that allocation on the
conveyance-fee statement establish at least a prima facie validity for the
allocation. Under this view of the matter, the burden of rebuttal lay on the
auditor. The county auditor, by contrast, argues that the Board of Tax Appeals—
and presumably the board of revision as well—had no duty to accept an allocation
that appeared suspect or arbitrary on its face. For its part, as already noted, the
5
SUPREME COURT OF OHIO
Board of Tax Appeals simplified this question by emphasizing St. Bernard’s
burden of persuasion as an appellant who challenged the board of revision’s
decision.
{¶ 14} Our review of the case law causes us to conclude that the
proponent of an allocation of sale price bears an initial burden of showing the
propriety of the allocation. The starting point for our analysis is the settled
proposition that “the best evidence of ‘true value in money’ is the proper
allocation of the lump-sum purchase price and not an appraisal ignoring the
contemporaneous sale.” Conalco, Inc. v. Monroe Cty. Bd. of Revision (1977), 50
Ohio St.2d 129, 4 O.O.3d 309, 363 N.E.2d 722, paragraph two of the syllabus.
We believe this principle fully comports with our more recent holding in Berea
City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d
269, 2005-Ohio-4979, 834 N.E.2d 782, ¶ 13, that “when the property has been the
subject of a recent arm’s-length sale between a willing seller and a willing buyer,
the sale price of the property shall be ‘the true value for taxation purposes.’ ” Id.,
quoting R.C. 5713.03. As a result, we view the Conalco syllabus as effectuating
the Berea doctrine in the context of a bulk sale.
{¶ 15} Bulk sales do differ, however. Unlike a simpler transaction where
a single parcel of real property is sold individually, a bulk sale may involve the
sale of all the assets of a business, whereby a parcel of real property constitutes
one of many business assets sold at the same time for an aggregate sale price.
Alternatively, a bulk sale may consist of a sale of numerous real estate parcels at
an aggregate price as part of a single deal. In all such cases, a question arises
beyond the basic pronouncement of Berea: whether the proffered allocation of
bulk sale price to the particular parcel of real property is “proper,” which is the
same as asking whether the amount allocated reflects the true value of the parcel
for tax purposes.
6
January Term, 2007
{¶ 16} St. Bernard advocates the principle that an allocation presented on
the face of a purchase contract, if that contract and that allocation have been
negotiated between the parties, should automatically acquire the force of
presumptive—if not conclusive—validity. We disagree. While St. Bernard’s
suggested approach would be simple to apply, it is not appropriate, because there
may be various purposes in allocating a purchase price. Even in cases where
those purposes are fully legitimate, the amount allocated to a particular parcel
does not necessarily reflect the true value in money of the parcel. See Heimerl v.
Lindley (1980), 63 Ohio St.2d 309, 311, 17 O.O.3d 200, 408 N.E.2d 685.
{¶ 17} In bulk sale cases, we typically look for corroborating indicia to
ensure that the allocation reflects the true value of the property. Where attendant
evidence shows reason to doubt such a correspondence, we decline to use the
allocation to establish true value. In Heimerl, for example, the evidence showed
that an allocation of the purchase price of a business to certain personal property
on the company’s books was performed “for the sole purpose of reducing the
parties’ federal income tax liabilities” and accordingly was “not intended to
reflect the true value of the equipment component of the business.” Id. at 309310, 17 O.O.3d 200, 408 N.E.2d 685. Instead of using the new allocated book
value, the taxpayer continued using the previous cost-depreciation schedule in
preparing its personal property tax returns.
In Heimerl, we expressly
distinguished the issue of allocation from the situation in which the personal
property to be valued was the sole subject of the sale. Heimerl, 63 Ohio St.2d at
311, 17 O.O.3d 200, 408 N.E.2d 685, citing Grabler Mfg. Co. v. Kosydar (1975),
43 Ohio St.2d 75, 72 O.O.2d 42, 330 N.E.2d 924. In Heimerl, the value assigned
to the property “was an arbitrary apportionment of the whole for federal tax
purposes,” whereas in Grabler the “valuations were direct buy and sell prices of
the particular assets.” Heimerl, 63 Ohio St.2d at 312, 17 O.O.3d 200, 408 N.E.2d
685.
7
SUPREME COURT OF OHIO
{¶ 18} In the area of real property valuation, we have not hesitated to
authorize a departure from a recent sale price when a bulk sale price cannot
properly be allocated.1
In all of those cases, value was determined without
reference to a sale price because no convincing allocation of the sale price was
offered. Cf. Pingue v. Franklin Cty. Bd. of Revision (1999), 87 Ohio St.3d 62,
717 N.E.2d 293. Although the present case differs from those cases in that the
allocation is presented in the purchase contact itself, we hold that in the context of
valuing property for tax purposes, such an allocation is not to be taken as
indicative of the value of the real property at issue unless other indicia on the face
of the contract, the circumstances attending the allocation, or some other
independent evidence establishes the propriety of the allocation. It follows that
neither the board of revision nor the Board of Tax Appeals was obligated to
presume the validity of the allocation to goodwill.
IV
{¶ 19} We now turn to the question whether the Board of Tax Appeals
was justified when it concluded that the evidence in the record did not establish
the propriety of the contract allocation to goodwill.
In reviewing a board
decision, we determine whether that decision was “reasonable and lawful.” R.C.
5717.04. While we reverse when we find legal error, the board itself “ ‘is
responsible for determining factual issues and, if the record contains reliable and
probative support for these [Board of Tax Appeals] determinations,’ this court
will affirm them.” Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856
N.E.2d 954, ¶ 14, quoting Am. Natl. Can Co. v. Tracy (1995), 72 Ohio St.3d 150,
152, 648 N.E.2d 483.
1. Consol. Aluminum Corp. v. Monroe Cty. Bd. of Revision (1981), 66 Ohio St.2d 410, 20 O.O.3d
357, 423 N.E.2d 75; Elsag-Bailey, Inc. v. Lake Cty. Bd. of Revision (1996), 74 Ohio St.3d 647,
660 N.E.2d 1184; Corporate Exchange Bldgs. IV & V, L.P. v. Franklin Cty. Bd. of Revision
(1998), 82 Ohio St.3d 297, 695 N.E.2d 743.
8
January Term, 2007
{¶ 20} The most prominent piece of evidence before the board was the
contract itself. On its face, that contract was a contract for the sale and purchase
of real estate—the parties used the standard form for such a transaction, and the
contract not only referred to the parcel that was sold but conditioned closing on
the accomplishment of certain tasks by the sellers, all of which related to the real
property. The testimony of James Olman, a principal of St. Bernard, generally
confirmed the central importance of the real property to the transaction.
Moreover, the auditor and St. Bernard did not dispute whether the contract should
be used to determine the sale price, even though the parties did disagree on how to
use it. Under these circumstances, and given all the other evidence before it, the
board was fully justified in looking to the sale price under the contract as
determinative of the value of the real property pursuant to Berea.
{¶ 21} Accordingly, the board’s next task was to determine the propriety
of the allocations of sale price to personal property and to goodwill. It accepted
the allocation to personal property, which was not in dispute, based upon evidence
that a certain amount of personal property was transferred as part of the
transaction.
{¶ 22} With respect to the allocation at issue, the allocation to goodwill,
the board’s finding was reasonable and lawful given the record that it had before
it. Two factors have crucial significance in this regard.
{¶ 23} First, the board found that “St. Bernard’s business is to lease
space,” a finding fully supported by the record. The income generated by that
business derives from St. Bernard’s granting the right to use space, either
outdoors or within the buildings, and the definition of real property for tax
purposes encompasses “rights and privileges * * * appertaining” to the land and
improvements. R.C. 5701.02. As a matter of pure logic, rent revenue relates to
such rights and privileges and as a result constitutes a part of the value of real
property. Accord Dublin Senior Community L.P. v. Franklin Cty. Bd. of Revision
9
SUPREME COURT OF OHIO
(1997), 80 Ohio St.3d 455, 460, 687 N.E.2d 426 (when using an income approach
in valuing a senior care center, “rental for the apartments” was deemed to
constitute “real estate activity” that relates to the value of the real estate, not to a
separate business value).
{¶ 24} Second, the board stated that when an owner claims that business
value should be deducted, the issue is whether the value “is transferable with the
real property, or whether it is detached from real property and can either be
transferred independently or remain with the seller.” The board correctly found
no evidence in the record to support the existence of a business value that could
actually be severed from the real estate and be transferred or retained separately.
Indeed, we have previously noted that St. Bernard’s principal expert, Fletcher,
acknowledged that although he thought the business value he was identifying was
separable from the realty, the two were not separable “in saleable packages.”
Since St. Bernard failed to prove the existence of any business value separable
from the value of the real property, the allocation to goodwill simply did not
pertain to any such separable value. It follows that the board acted reasonably
and lawfully in disregarding that allocation.
{¶ 25} For the reasons stated, the decision of the Board of Tax Appeals is
affirmed.
Decision affirmed.
LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and CUPP,
JJ., concur.
PFEIFER, J., concurs in judgment only.
__________________
Barrett & Weber, C. Francis Barrett, and M. Michele Fleming, for
appellant.
Joseph T. Deters, Hamilton County Prosecuting Attorney, and Thomas J.
Scheve, Assistant Prosecuting Attorney, for appellee Hamilton County Auditor.
10
January Term, 2007
David C. DiMuzio, Inc., and David C. DiMuzio, for appellee St. Bernard
School District Board of Education.
Katz, Greenberger & Norton, L.L.P., Scott H. Kravetz, and Jeff J.
Greenberger, urging reversal for amicus curiae, Ohio Storage Owners’ Society,
Inc.
______________________
11
SHARON VILLAGE LIMITED, APPELLANT,
V.
LICKING COUNTY BOARD
OF
REVISION ET AL., APPELLEES.
DERBY DOWNS LIMITED, APPELLANT, V. LICKING COUNTY BOARD OF REVISION
ET AL., APPELLEES.
CHERRY LEE LIMITED
ET AL.
APPELLANTS,
V.
LICKING COUNTY BOARD
OF
REVISION ET AL., APPELLEES.
[Cite as Sharon Village Ltd. v. Licking Cty. Bd. of Revision (1997), ___ Ohio
St.3d ___.]
Unauthorized practice of law -- Preparation and filing of a complaint
with a board of revision constitute the practice of law.
The preparation and filing of a complaint with a board of revision on behalf of
a taxpayer constitute the practice of law.
(Nos. 95-2591, 95-2594 and 95-2596 -- Submitted February 19, 1997 --
Decided May 21, 1997.)
APPEALS from the Board of Tax Appeals, Nos. 94-M-1214, 94-M-1215,
94-M-1325 and 94-M-1326.
Appellants, Sharon Village Limited, Derby Downs Limited, Cherry Lee
Limited and Realty Development Corp. No. 3, are owned by Earl Shurtz.
Shurtz contacted Doug Parobek, president of Ambassador Research, Inc., to
determine whether the real estate property taxes could be reduced for tax year
1993. Consequently, Parobek prepared and filed complaints with the Licking
County Board of Revision (“BOR”) seeking reductions for each property. The
BOR, essentially, issued decisions of no change on appeal to the Board of Tax
Appeals (“BTA”), pursuant to motions to dismiss filed by the school board, the
BTA ruled that the BOR had lacked jurisdiction to hear the complaints because
Parobek, a nonattorney, had initiated the proceedings. The BTA dismissed the
appeals. The cases have been consolidated for appeal.
The cause is now before this court upon appeals as a matter of right.
__________
Todd W. Sleggs, for appellants.
Robert L. Becker, Licking County Prosecuting Attorney, and Pauline E.
O’Neill, Assistant Prosecuting Attorney, for appellees Licking County Board of
Revision and Auditor.
Teaford, Rich, Coffman & Wheeler and Karol Cassell Fox, for appellee
Newark City School District Board of Education.
2
Blaugrund, Gabel, Herbert & Mesirow, Steven A. Martin and
Christopher B. McNeil, urging reversal for amicus curiae, Ohio Society of
Certified Public Accountants.
Cassity Law Offices and Robin J. Levine, urging reversal for amici
curiae, Institute of Property Taxation and National Council of Property Tax
Consultants.
Jones, Day, Reavis & Pogue and David A. Kutik; Robert J. Fay; Buckley,
King & Bluso and John A. Hallbauer, urging affirmance for amicus curiae,
Cleveland Bar Association.
Ronald J. O’Brien, Franklin County Prosecuting Attorney, and James R.
Gorry, Assistant Prosecuting Attorney, urging affirmance for amici curiae,
Franklin County Auditor and Ohio County Auditors’ Association.
Eugene P. Whetzel, urging affirmance for amicus curiae, Ohio State Bar
Association.
__________
FRANCIS E. SWEENEY, SR., J.
In this case we are not asked to decide
whether a taxpayer may prepare and file a complaint with the BOR. Clearly,
3
such action is permissible. See R.C. 5715.13. Instead, the sole issue presented
to us is whether appellants’ agent, a nonlawyer, engaged in the unauthorized
practice of law when he prepared and filed the complaints with the BOR. For
the following reasons, we answer this question in the affirmative. Accordingly,
we affirm the BTA.
R.C. 4705.01 governs the practice of law in Ohio. It states:
“No person shall be permitted to practice as an attorney and counselor at
law, or to commence, conduct, or defend any action or proceeding in which he
is not a party concerned, either by using or subscribing his own name, or the
name of another person, unless he has been admitted to the bar by order of the
supreme court in compliance with its prescribed and published rules. ***”
According to Section 5, Article IV of the Ohio Constitution, the
regulation of the practice of law is vested exclusively in the Ohio Supreme
Court. Pursuant to this grant of authority, we have set forth a broad definition
of the “practice of law”:
“The practice of law is not limited to the conduct of cases in court. It
embraces the preparation of pleadings and other papers incident to actions and
4
special proceedings and the management of such actions and proceedings on
behalf of clients before judges and courts, and in addition conveyancing, the
preparation of legal instruments of all kinds, and in general all advice to clients
and all action taken for them in matters connected with the law.” Land Title
Abstract & Trust Co. v. Dworken (1934), 129 Ohio St. 23, 1 O.O. 313, 193
N.E.2d 650, paragraph one of the syllabus.
Recently, we reaffirmed this
holding in Cincinnati Bar Assn. v. Estep (1995), 74 Ohio St.3d 172, 657
N.E.2d 499.
In exploring the contours of our definition, the court in Special Master
Commrs. v. McCahan (C.P.1960), 83 Ohio Law Abs. 1, 14 O.O.2d 221, 167
N.E.2d 541, observed:
“It is clear that a licensed attorney in the practice of law generally
engages in three principal types of professional activity. These types are legal
advice and instructions to clients to inform them of their rights and obligations;
preparation for clients of documents and papers requiring knowledge of legal
principles which is not possessed by an ordinary laymen; and appearance for
clients before public tribunals, which possess the power and authority to
5
determine rights of life, liberty and property according to law, in order to assist
in the proper interpretation and enforcement of law.” Id. at 11, 14 O.O.2d at
229, 167 N.E.2d at 550.
To determine whether appellants’ agent engaged in the unauthorized
practice of law, we need to consider the procedure at the board of revision and
understand the purpose and impact of a complaint filed there. We turn now to
this task.
A board of revision is a quasi-judicial body. Swetland v. Evatt (1941),
139 Ohio St. 6, 37 N.E.2d 601, paragraph nine of the syllabus. To invoke its
jurisdiction, it is necessary to file a verified complaint pursuant to R.C. 5715.13
and R.C. 5715.19. As these requirements are jurisdictional, the failure to fully
and properly complete the complaint will result in dismissal of the action.
Stanjim Co. v. Mahoning Cty. Bd. of Revision (1974), 38 Ohio St.2d 233, 67
O.O.2d 296, 313 N.E.2d 14.
Further, R.C. 5715.19(A)(2) prohibits the filing of more than one board
of revision complaint within any triennial period unless the specific exceptions
apply. Therefore, if a complaint is improperly completed and dismissed, the
6
property owner has lost the right to challenge the value of that property for up
to three years, absent a specific change in circumstances.
If an attorney
improperly completed and filed a complaint, the client would have the ability to
assert a malpractice claim.
However, we are troubled by the very real
possibility that a property owner would be left with no recourse if a
nonattorney negligently prepared and filed the complaint.
Even if the
nonattorney agent carried malpractice coverage, the insurance carrier would
most likely deny the claim upon finding that it involved the practice of law.
Moreover, the complaint is filed for the purpose of initiating an
adversarial proceeding just as any other complaint does. A board of revision is
required by R.C. 5715.19 to give proper notice to property owners and boards
of education when a complaint is filed by other parties. Under R.C. 5715.11,
the board of revision hears and investigates all complaints. A board of revision
is also required to give adequate notice of hearing dates and times so that all
parties may participate.
The board of revision, composed of the county auditor, the county
treasurer, and the president of the board of county commissioners, is a deciding
7
tribunal. R.R.Z. Assoc. v. Cuyahoga Cty. Bd. of Revision (1988), 38 Ohio St.3d
198, 200, 527 N.E.2d 874, 876. At a board of revision hearing, the parties may
be given an opportunity to present evidence in the form of documents and
testimony, question and cross-examine witnesses, and make legal arguments in
support of their positions. A property owner failing to provide known and
available evidence is barred by R.C. 5715.19(G) from later presenting that
evidence on appeal absent a showing of good cause or an order by the BTA or
common pleas court, pursuant to R.C. 5717.01 or 5717.05. Persons testifying
before the board of revision must do so under oath, as in any court of law. R.C.
5715.10. If unusual legal issues are raised, the board may request briefs or
memoranda on those issues.
Pursuant to R.C. 5715.08, 5717.01 and 5717.05, the board of revision is
required to make and keep a record on each complaint and to certify a
transcript of the record of the proceedings and all evidence offered in
connection with any complaint appealed to either the BTA or the common
pleas court.
8
In addition, the initiating of a board of revision action places the
property owner at risk. For example, if an owner or nonattorney files for a
decrease and a board of education files a countercomplaint requesting an
increase, the property owner risks paying more in taxes. This is yet another
reason why these matters should be left to an attorney to handle.
In view of the above, we find this case easily fits within the broad
definition embraced in Dworken and explored in Special Master Commrs.
Parobek prepared legal documents, gave professional advice to his clients, and
in one instance, even appeared before the BOR on their behalf. Contrary to
appellants’ contention, this case is unlike Gustafson v. V.C. Taylor & Sons, Inc.
(1941), 138 Ohio St. 392, 20 O.O. 484, 35 N.E.2d 435, where this court
permitted real estate brokers to complete preprinted real estate contracts by
supplying simple, factual materials such as the date, price, name of the
purchaser, location of the property, date of giving possession, and duration of
the offer. The court concluded that these actions require ordinary intelligence
and not the skill of a lawyer.
9
We find that there are crucial differences between Gustafson and this
case. First, the forms that were filled out in Gustafson were not legally binding
until they were signed by the actual parties to the contract. Further, the real
estate forms did not begin a quasi-judicial proceeding that would establish a
record and place the owners at risk of having their taxes increased. Finally, the
real estate forms did not contain statutorily defined jurisdictional requirements
that, if not properly met, barred the rights of the owners to contest their
valuations.
Nor is Jemo Assoc., Inc. v. Lindley (1980), 64 Ohio St.2d 365, 18 O.O.3d
518, 415 N.E.2d 292, controlling. The question before the court in that case
involved a corporation’s notice of appeal to the BTA pursuant to R.C. 5717.02.
The court specifically stated that whether the agent who had signed the notice
had engaged in the unauthorized practice of law was irrelevant to the issue
before the court. Id. at 367, 18 O.O.3d at 519, 415 N.E.2d at 294, fn. 4.
We also reject appellants’ assertion that R.C. 5715.13 provides the
legislative authority for their position. R.C. 5715.13 states that a board of
revision may make no decrease in “any valuation complained of unless the
10
party affected thereby or his agent makes and files with the board a written
application therefor, verified by oath, showing the facts upon which it is
claimed such decrease should be made.” (Emphasis added.) We interpret the
term “agent” as used in R.C. 5715.13 to include the affected party’s attorney
and, in the case of a corporation, a regularly connected agent who is an attorney
authorized by the corporation and possessing sufficient knowledge to verify the
facts averred in the complaint.
Therefore, we hold that the preparation and filing of a complaint with a
board of revision on behalf of a taxpayer constitute the practice of law. As the
tax agent involved in these cases was not an attorney, his actions constitute the
unauthorized practice of law. Accordingly, we affirm the BTA.
Decisions affirmed.
MOYER, C.J., DOUGLAS, RESNICK, PFEIFER and LUNDBERG STRATTON, JJ.,
concur.
COOK, J., concurs in the syllabus and judgment only.
11
[Cite as Dayton Supply & Tool Co., Inc. v. Montgomery Cty. Bd. of Revision, 111 Ohio St.3d
367, 2006-Ohio-5852.]
DAYTON SUPPLY & TOOL COMPANY, INC., APPELLANT, v. MONTGOMERY
COUNTY BOARD OF REVISION ET AL., APPELLEES.
[Cite as Dayton Supply & Tool Co., Inc. v. Montgomery Cty. Bd. of Revision,
111 Ohio St.3d 367, 2006-Ohio-5852.]
Taxation – Complaints – Corporations – Unauthorized practice of law –
Corporate office does not engage in unauthorized practice of law by
preparing and filing complaint with county board of revision on behalf of
corporation within certain limits – Sharon Village v. Licking Cty. Bd. of
Revision distinguished.
(No. 2005-1464 — Submitted February 22, 2006 — Decided November 29,
2006.)
APPEAL from the Board of Tax Appeals, No. 2003-G-1851.
_________________
SYLLABUS OF THE COURT
Pursuant to R.C. 5715.19, a corporate officer does not engage in the unauthorized
practice of law by preparing and filing a complaint with a board of
revision, and by presenting the claimed value of the property before the
board of revision on behalf of his or her corporation, as long as the officer
does not make legal arguments, examine witnesses, or undertake any other
tasks that can be performed only by an attorney. (Sharon Village Ltd. v.
Licking Cty. Bd. of Revision (1997), 78 Ohio St.3d 479, 678 N.E.2d 932,
distinguished; Worthington City School Dist. Bd. of Edn. v. Franklin Cty.
Bd. of Revision (1999), 85 Ohio St.3d 156, 707 N.E.2d 499, limited.)
__________________
LUNDBERG STRATTON, J.
I. Introduction
SUPREME COURT OF OHIO
{¶ 1} The issue before us is whether a nonattorney corporate officer who
prepares and files a complaint with a board of revision on behalf of the
corporation engages in the unauthorized practice of law. Relying on our holding
in Sharon Village Ltd. v. Licking Cty. Bd. of Revision (1997), 78 Ohio St.3d 479,
678 N.E.2d 932, the Board of Tax Appeals (“BTA”) held that a corporate officer
for Dayton Supply & Tool Co., Inc. had engaged in the unauthorized practice of
law by preparing and filing a complaint with the board of revision on the
corporation’s behalf, and therefore, the board of revision lacked jurisdiction to
consider the complaint.
{¶ 2} The general rule is that a layperson cannot engage in the practice
of law. However, public-interest factors persuade us to hold that a corporate
officer does not engage in the unauthorized practice of law by preparing and filing
a complaint and presenting the claimed value of the property at a hearing before
the board of revision on behalf of his or her corporation, so long as the officer
does not make legal arguments, examine witnesses, or undertake other tasks that
can be performed only by an attorney. In the instant case, we find that the
corporate officer’s conduct falls within these boundaries.
Accordingly, we
reverse the decision of the BTA.
II. Facts
{¶ 3} Dwight Woessner is the owner and executive vice-president of
appellant, Dayton Supply & Tool Company, Inc., which owns a parking lot on
Monument Avenue, parcel No. R72-7-4-1. For tax year 2002, the Montgomery
County Auditor determined that the market value of this parcel was $786,140.
Woessner prepared and filed a valuation complaint with the Montgomery County
Board of Revision (“BOR”), alleging that the market value of the parking lot was
$103,860. The Dayton Board of Education filed a countercomplaint, alleging that
the county should maintain the auditor’s value of $786,140.
2
January Term, 2006
{¶ 4} Woessner appeared on behalf of Dayton Supply & Tool at the
hearing and testified that the market value of the property was $103,860, the
amount determined by the auditor for the previous tax year. Woessner did not
present any evidence, examine any witnesses, or make any legal arguments. The
board of education argued that the BOR should retain the auditor’s value of
$786,140. On October 31, 2003, the BOR issued a decision finding that the value
of the parcel was $786,140.
{¶ 5} Dayton Supply & Tool appealed to the Board of Tax Appeals
(“BTA”). The BTA remanded the case to the BOR with instructions to dismiss
the complaint and retain the auditor’s value because Woessner had engaged in the
unauthorized practice of law by preparing and filing the complaint with the BOR,
thereby depriving the BOR of jurisdiction to hear the complaint pursuant to
Sharon Village Ltd., 78 Ohio St.3d 479, 678 N.E.2d 932.
{¶ 6} This cause is now before the court upon an appeal of right.
III. Regulating the Practice of Law
{¶ 7} Under the Ohio Constitution, this court has “original jurisdiction”
regarding “[a]dmission to the practice of law, the discipline of persons so
admitted, and all other matters relating to the practice of law.”
Section
2(B)(1)(g), Article IV, Ohio Constitution. Thus, this court has the authority to
“prescribe rules governing practice and procedure in all courts of the state.”
Section 5(B), Article IV, Ohio Constitution. Pursuant to this authority, we have
adopted a rule prohibiting the unauthorized practice of law, which is defined as
“the rendering of legal services for another by any person not admitted to practice
in Ohio * * *.” Gov.Bar R. VII(2)(A). “The practice of law is not limited to the
conduct of cases in court. It embraces the preparation of pleadings and other
papers incident to actions and special proceedings and the management of such
actions and proceedings on behalf of clients before judges and courts, and in
addition conveyancing, the preparation of legal instruments of all kinds, and in
3
SUPREME COURT OF OHIO
general all advice to clients and all action taken for them in matters connected
with the law.” Land Title Abstract & Trust Co. v. Dworken (1934), 129 Ohio St.
23, 1 O.O. 313, 193 N.E. 650, at paragraph one of the syllabus. The premise
behind the rule prohibiting the unauthorized practice of law is that “limiting the
practice of law to licensed attorneys is generally necessary to protect the public
against incompetence, divided loyalties, and other attendant evils that are often
associated
with
unskilled
representation.”
Cleveland
Bar
Assn.
v.
CompManagement, Inc., 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181,
¶ 40.
{¶ 8} However, on occasion we have carved out narrow exceptions to
this rule and have permitted laypersons to undertake some activities in
administrative proceedings even though they may fall within the broad definition
of the practice of law. For example, in Henize v. Giles (1986), 22 Ohio St.3d 213,
22 OBR 364, 490 N.E.2d 585, we held that laypersons representing claimants
before the Unemployment Compensation Board of Review and the Bureau of
Employment Services do not engage in the unauthorized practice of law. In
Henize, we recognized that the two agencies are not bound by the Rules of
Evidence or Civil Procedure, and the hearings are informal. We also determined
that “attorneys are simply not required in most of these claim reviews” because
“in most instances, a formal presentation of legal argument is not needed.” Id. at
217, 22 OBR 364, 490 N.E.2d 585. We recognized that permitting nonattorneys
to present a case before these agencies is technically permitting the practice of
law, but we concluded that “[t]he finding is inescapable that because of the
character of the proceedings in light of the interest at stake, lay representation
does not pose a hazard to the public in this limited setting.” Id. at 219, 22 OBR
364, 490 N.E.2d 585.
{¶ 9} However, we cautioned that “[o]ur decision today does not reach
nor permit the rendering of legal advice regarding unemployment compensation
4
January Term, 2006
laws or board orders.
Rather, our narrow holding merely permits lay
representation of parties to assist in the preparation and presentation of their cause
in order to facilitate the hearing process.” Id.
{¶ 10} We further refined this exception in Cleveland Bar Assn. v.
CompManagement, 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181,
wherein nonlawyer members of an actuarial firm represented employers in
workers’ compensation claims heard by the Industrial Commission.
The
Cleveland Bar Association filed a complaint alleging that these representatives
were engaging in the unauthorized practice of law.
Specifically, the bar
association alleged that the representatives appeared at oral hearings; examined
witnesses; interpreted the law; interpreted the nature, weight, and credibility of
the evidence; and prepared, signed, and filed various legal documents. Id. at ¶ 23.
{¶ 11} We recognized that from its inception, one of the objectives of the
workers’ compensation system was to provide a remedy to injured workers
without requiring them to hire an attorney or file a lawsuit. Id. at ¶12, citing
Mabley & Carew Co. v. Lee (1934), 129 Ohio St. 69, 74-75, 1 O.O. 366, 193 N.E.
745.
Thus, lay representation has been an integral part of the workers’
compensation system from the beginning. To that end, the Industrial Commission
adopted Resolution R04-1-01, which permits laypersons to (1) investigate and
discuss the facts of a claim, (2) assist in the filing and administration of a claim
and file appeals, (3) attend hearings, (4) complete and submit various records and
reports regarding injured workers, (5) complete and submit records and reports
regarding job classifications, (6) complete and submit reports regarding
premiums, (7) file protests with the bureau, (8) prepare reports regarding status of
risks, and (9) advise employers and injured workers to seek legal representation.
Id. at ¶18-29.
5
SUPREME COURT OF OHIO
{¶ 12} However, the resolution also does not allow laypersons to (1)
examine or cross-examine witnesses, (2) cite or interpret the law, (3) make or give
legal interpretations regarding testimony, etc., (4) comment upon evidence
regarding its credibility, weight, etc., (5) provide legal advice, (6) give or render a
legal opinion, or (7) provide stand-alone representation for a fee. Id. at ¶ 30-36.
{¶ 13} We recognized in our previous holdings that within the workers’
compensation system, laypersons could not represent clients for a contingent fee,
advise clients of the legal ramifications of commission orders, or prepare a record.
CompManagement, 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181, ¶ 55.
Yet we found that these holdings do “not prohibit lay representation before the
Industrial Commission, but instead mark the outer boundaries of permissible lay
conduct.” Id. at ¶69. We further determined that “there are multiple interests to
consider in determining whether a particular legal activity is acceptably
performed by nonlawyers.
In this way, we can freely assume that all
representative conduct at the administrative level falls within the broad definition
of the practice of law, yet still authorize lay representatives to perform certain
functions in the administrative setting when the public interest so demands.” Id.
{¶ 14} In CompManagement, we were compelled by “public interest”
factors to permit lay representatives to participate in workers’ compensation
claims to the extent that their “representation” was consistent with the functions
outlined in the commission’s resolution. Id. at ¶ 70. We reasoned that allowing
such representation expedited the claims process and made it less expensive. Id.
at ¶ 44. Notably, we also recognized that “ ‘[i]n the vast majority of instances no
special skill is required in the preparation and presentation of [workers’
compensation] claims.’ ” Id. at ¶ 67, quoting Goodman v. Beall (1936), 130 Ohio
St. 427, 429, 5 O.O. 52, 200 N.E. 470.
{¶ 15} Other jurisdictions have also found that public-interest factors
favor permitting a layperson to engage in what may be defined as the practice of
6
January Term, 2006
law without crossing the limits into the unauthorized practice of law. See, e.g.,
Conway-Bogue Realty Invest. Co. v. Denver Bar Assn. (1957), 135 Colo. 398, 312
P.2d 998 (it is against the public interest to prohibit licensed real estate agents
from preparing instruments that technically fall within the definition of the
practice of law); In re Opinion No. 26 of Unauthorized Practice of Law Commt.
(1995), 139 N.J. 323, 340, 654 A.2d 1344 (“We have often found, despite the
clear involvement of the practice of law, that non-lawyers may participate in these
activities [real estate closings and settlements], basing our decisions on the public
interest in those cases in allowing parties to proceed without counsel”);
Unauthorized Practice of Law Commt. v. Dept. of Workers’ Comp. (R.I.1988),
543 A.2d 662, 666 (“We are of the opinion that the informal [workers’
compensation] hearings, together with lay representation, may well serve the
public interest”); Perkins v. CTX Mtge. Co. (1999), 137 Wash.2d 93, 102, 969
P.2d 93 (“Our underlying goal in unauthorized practice of law cases has always
been the promotion of the public interest. Consequently, we have prohibited only
those activities that involved the lay exercise of legal discretion because of the
potential for public harm”).
{¶ 16} In the instant case, public-interest factors persuade us that a
corporate officer should be permitted to file and prepare a complaint on the
corporation’s behalf and to present the claimed value of the property at the BOR
hearing subject to certain limitations.
IV. Proceedings before the BOR
{¶ 17} In holding that Woessner engaged in the unauthorized practice of
law, the BTA relied on Sharon Village. Accordingly, we begin our analysis by
examining that case. In Sharon Village, a nonattorney third-party agent prepared
and filed complaints on behalf of taxpayers with the Licking County Board of
Revision. The agent “prepared legal documents, gave professional advice to his
clients, and in one instance, even appeared before the BOR on their behalf.”
7
SUPREME COURT OF OHIO
Sharon Village, 78 Ohio St.3d at 482, 678 N.E.2d 932. We held that the agent
had engaged in the unauthorized practice of law, thereby depriving the BOR of
jurisdiction to consider the property owners’ complaints.
{¶ 18} At the time we decided Sharon Village, R.C. 5715.19(A)(1)(e)
provided that “[a]ny person owning taxable real property in the county or in a
taxing district with territory in the county * * * may file such a complaint * * *.”
142 Ohio Laws, Part III, 4589.
{¶ 19} Although the case was not discussed in the BTA’s opinion, we find
that Worthington City School Dist Bd. of Edn. v. Franklin Cty. Bd. of Revision
(1999), 85 Ohio St.3d 156, 707 N.E.2d 499, is also relevant to our analysis. In
Worthington City School Dist., nonattorney corporate officers prepared and filed
complaints on behalf of their corporations with the BOR. We held that the
corporate officers had engaged in the unauthorized practice of law. We relied in
part on Sharon Village. We also relied on the rule that “[a] corporate body cannot
act through its corporate officers rather than through an attorney at law to
maintain litigation on the corporation’s behalf.” Worthington City School Dist. at
158, 707 N.E.2d 499, citing Union Sav. Assn. v. Home Owners Aid, Inc. (1970),
23 Ohio St.2d 60, 52 O.O.2d 329, 262 N.E.2d 558.
{¶ 20} Subsequent to Sharon Village and Worthington City School Dist.,
the General Assembly amended R.C. 5715.19 to provide that if the “person”
owning the real property is a corporation, an officer of that corporation may file a
complaint on behalf of the corporation with the BOR. 147 Ohio Laws, Part III,
5373-5374.1 Because we are solely responsible for regulating the practice of law,
we are not compelled to accept this legislative amendment. Yet we are mindful
that all legislation is presumed constitutional and will not be struck down absent
1
Although the opinion in Worthington City School Dist. was issued one day after the effective
date of the amendment of R.C. 5715.19, that amendment was not in effect and was not considered
in arriving at the decision in Worthington City School Dist.
8
January Term, 2006
proof of its invalidity beyond a reasonable doubt. State v. Hayden, 96 Ohio St.3d
211, 2002-Ohio-4169, 773 N.E.2d 502, ¶ 7, citing State ex rel. Dickman v.
Defenbacher (1955), 164 Ohio St. 142, 57 O.O. 134, 128 N.E.2d 59, paragraph
one of the syllabus.
A. Sharon Village Distinguished
{¶ 21} In Sharon Village, 78 Ohio St.3d at 481, 678 N.E.2d 932, one of
our concerns in finding that the agent had engaged in the unauthorized practice of
law was that a taxpayer would have no recourse if the third-party agent
negligently prepared or filed the complaint. In Sharon Village, “the complaint
was filed by a company whose business was making a profit filing valuation
complaints, a sort of tax-valuation entrepreneur.” Worthington City School Dist.,
85 Ohio St.3d at 162, 707 N.E.2d 499 (Stratton, J., concurring in part and
dissenting in part). The practice of permitting representation by these third-party
agents, who have no “real relationship with the taxpayer,” is “potentially harmful
to taxpayers.” Fravel v. Stark Cty. Bd. of Revision (2000), 88 Ohio St.3d 574,
576, 728 N.E.2d 393 (Pfeifer, J., dissenting).
{¶ 22} Unlike the third-party agent in Sharon Village, corporate officers
have a fiduciary duty to the corporation. See Genesis Respiratory Servs., Inc. v.
Hall (1994), 99 Ohio App.3d 23, 28, 649 N.E.2d 1266. Thus, divided loyalties,
one of the evils attendant to the unauthorized practice of law, are not at issue
when a corporate officer is acting on behalf of his or her corporation.
CompManagement, 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181, ¶ 40.
{¶ 23} In Sharon Village, we were also concerned that preparing and
filing a complaint, and appearing before the BOR, require legal training possessed
only by an attorney. For example, we recognized that at a board of revision
hearing, “the parties may be given an opportunity to present evidence in the form
of documents and testimony, question and cross-examine witnesses, and make
legal arguments in support of their positions.” (Emphasis added.) Id. at 482, 678
9
SUPREME COURT OF OHIO
N.E.2d 932. And if unusual legal issues exist, the BOR might request that the
issues be briefed. Id. These activities would require the training and expertise of
an attorney.
{¶ 24} Yet not all BOR proceedings involve legal issues. Many times, the
only “issue before the boards of revision - the fair market value of real estate - is
not one which requires legal skill to resolve.” Cleveland Bar Assn. v. Middleton
(1994), 66 Ohio Misc.2d 9, 14, 642 N.E.2d 71. Further, the board of revision
proceedings “are not governed by the Rules of Evidence and typically the board
members are not attorneys.” Id. Thus, in many instances, formal legal training is
not required to prepare and file the complaint or appear before the BOR.
{¶ 25} In the instant case, Woessner, who prepared and filed the
complaint and appeared before the BOR, is an officer of the corporation that seeks
to have its property value reviewed. Further, the proceedings before the BOR did
not involve any legal issues, the examination of any witnesses, or any other matter
that requires an attorney. Thus, we find that Sharon Village is distinguishable
from the instant case to the extent that Sharon Village involved a third-party agent
and envisioned a courtlike hearing before the BOR that involved witnesses and
resolution of legal issues, while the case at bar involves a corporate officer and
does not involve consideration of any legal issues.
B. Worthington City School Dist. Limited
{¶ 26} We now must reexamine our decision in Worthington City School
Dist. As we noted above, Worthington City School Dist., 85 Ohio St.3d 156, 707
N.E.2d 499, relied in part on Sharon Village for the proposition that a nonattorney
cannot file a complaint on behalf of another with the BOR. Id. at 160-161, 707
N.E.2d 499. To the degree that we have now distinguished Sharon Village from
the instant case, we find that it no longer supports our holding in Worthington
City School Dist. that a corporate officer is always prohibited from filing a
complaint with the BOR.
10
January Term, 2006
{¶ 27} But our decision in Worthington City School Dist. also relied on
the rule that “ ‘[a] corporation cannot maintain litigation in propria persona, or
appear in court through an officer of the corporation or an appointed agent not
admitted to the practice of law.”’ Id. at 160, 707 N.E.2d 499, quoting Union Sav.
Assn., 23 Ohio St.2d at 62, 52 O.O.2d 329, 262 N.E.2d 558.
{¶ 28} However, recently we held that a corporate officer who prepares
and files a complaint and presents the claim in small-claims court does not engage
in the unauthorized practice of law so long as he or she does “not cross-examine
witnesses, argue, or otherwise act as an advocate.”
Cleveland Bar Assn. v.
Pearlman, 106 Ohio St.3d 136, 2005-Ohio-4107, 832 N.E.2d 1193, ¶ 24. In our
analysis, we recognized “the general rule that corporations may be represented
only by licensed attorneys” (the “corporate representation rule”). Id. at ¶ 26. In
holding that a corporate officer may prepare and file a complaint in small-claims
court, we created a narrow exception to the corporate representation rule in cases
“where no special legal skill is needed, and where proceedings are factual,
nonadversarial, and expected to move quickly.” Id. Although Pearlman involved
small-claims court, we nevertheless find its exception to the corporate
representation rule applicable in the instant case because the proceedings before
the BOR did not involve any issue that required any “special legal skill” to
resolve.
{¶ 29} We find that these circumstances call for us to limit our holding in
Worthington City School Dist. to the extent that it is no longer necessary for a
corporation to hire an attorney to file a complaint with the BOR unless legal
issues exist or arise in the case.
V. Public-Interest Factors
{¶ 30} We recognize that preparing and filing a complaint and
participating in BOR proceedings on behalf of another fall within the broad
definition of the practice of law. However, the amendment to R.C. 5715.19, our
11
SUPREME COURT OF OHIO
decision in Pearlman, and their effect on Sharon Village and Worthington City
School Dist. have, to a degree, altered the unauthorized-practice-of-law landscape.
We find that public-interest factors justify an exception to the rule in the instant
case. Specifically, corporate officers have a fiduciary duty to the corporation such
that accountability and loyalty are not an issue in permitting them to act on behalf
of the corporation. Further, assuming that no legal issues are involved or arise in
the case before the BOR, hiring an attorney is not necessary, a situation that
makes filing a complaint by a corporation more convenient and less expensive.
See Cultum v. Heritage House Realtors, Inc. (1985), 103 Wash.2d 623, 628-631,
694 P.2d 630
(authorizing laypersons to exercise some legal discretion by
allowing them to insert lawyer-drafted clauses into lawyer-drafted real estate
forms because of strong public interest in convenience and cost savings).
{¶ 31} Yet consistent with our public-interest exception cases, we temper
our holding with the admonition that a corporation must hire an attorney if any of
the proceedings before the BOR, including the preparation and filing of the
complaint, involve more than the factual issue of the value of the property, and
issues exist or arise that require an attorney to resolve.
{¶ 32} Thus, we hold that pursuant to R.C. 5715.19, a corporate officer
does not engage in the unauthorized practice of law by preparing and filing a
complaint with the board of revision and by presenting the claimed value of the
property before the board of revision on behalf of his or her corporation, as long
as the officer does not make legal arguments, examine witnesses, or undertake
any other tasks that can be performed only by an attorney.
VI. Conclusion
{¶ 33} In the instant case, Woessner was the corporate vice-president of
Dayton Supply & Tool. Moreover, he was the sole owner of the corporation.
Thus, we find that Woessner’s accountability to the corporation is not an issue.
12
January Term, 2006
{¶ 34} Woessner testified that the value of the property was $103,860.
However, he made no legal arguments and did not attempt to introduce any
evidence at the hearing. Further, neither Woessner nor the school board presented
any witnesses. Thus, the instant hearing did not address any legal issues, involve
questioning of witnesses, or otherwise require legal training or expertise.
Therefore, we hold that Woessner did not engage in the unauthorized practice of
law.
{¶ 35} Accordingly, we reverse the decision of the BTA and remand the
cause with instructions to consider Dayton Supply & Tool’s appeal.
Decision reversed
and cause remanded.
PFEIFER, O’CONNOR and LANZINGER, JJ., concur.
MOYER, C.J., RESNICK and O’DONNELL, JJ., dissent.
__________________
ALICE ROBIE RESNICK, J., dissenting.
{¶ 36} The relevant precedents are well reasoned and require this court to
hold that the actions undertaken in this case amount to the unauthorized practice
of law. Therefore, I would affirm the decision of the Board of Tax Appeals
(“BTA”) that the Montgomery County Board of Revision (“BOR”) did not have
jurisdiction to entertain the complaint and that it should be dismissed.
{¶ 37} Because the majority carves out an unwarranted exception to the
general rule forbidding the unauthorized practice of law, I dissent. Furthermore, I
believe that the majority’s method of analysis allows it to sidestep an important
separation-of-powers issue raised by this case.
I. Sharon Village and Related Cases
{¶ 38} As this court held in Sharon Village, Ltd. v. Licking Cty. Bd. of
Revision (1997), 78 Ohio St.3d 479, 678 N.E.2d 932, syllabus, “[t]he preparation
and filing of a complaint with a board of revision on behalf of a taxpayer
13
SUPREME COURT OF OHIO
constitute the practice of law.”
For various delineated reasons, the court
concluded that the preparation and filing of a property-valuation complaint under
R.C. 5715.13 and 5715.19 “should be left to an attorney to handle.” Id. at 482,
678 N.E.2d 932.
{¶ 39} The court has adhered to that view in several later decisions. See,
e.g., Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision (2001),
91 Ohio St.3d 308, 313-314, 744 N.E.2d 751 (explaining that a nonattorney may
prepare a property-valuation complaint for a corporation as long as the complaint
is reviewed and signed by an attorney and filed by the attorney or at his or her
direction); Fravel v. Stark Cty. Bd. of Revision (2000), 88 Ohio St.3d 574, 728
N.E.2d 393 (the nonattorney nephew of a taxpayer engaged in the unauthorized
practice of law when he prepared and filed a property-valuation complaint on the
taxpayer’s behalf); Lakeside Ave. Ltd. Partnership v. Cuyahoga Cty. Bd. of
Revision (1999), 85 Ohio St.3d 125, 707 N.E.2d 472 (a nonlawyer limited partner
engaged in the unauthorized practice of law when he prepared and filed a
property-valuation complaint challenging a county auditor’s valuation of property
owned by the partnership itself).
{¶ 40} In the post-Sharon Village case most like the present case
factually, the court explained that “an attorney, or the owner of the property, must
prepare and file the [property-valuation] complaint.” Worthington City School
Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision (1999), 85 Ohio St.3d 156, 160,
707 N.E.2d 499. In that case—as in this one—a nonlawyer corporate officer had
prepared, signed, and filed a property-valuation complaint on behalf of the
officer’s corporation that owned the property in question. This court held that the
BTA had correctly dismissed that complaint and another similar one, because the
complainant’s status as an officer of the corporation “d[id] not entitle him to
engage in the unauthorized practice of law.” Id.
14
January Term, 2006
{¶ 41} The court in Worthington City School Dist. was closely divided,
with three justices dissenting in part. According to the dissent in that case,
nonlawyer corporate officers should be permitted to prepare and file propertyvaluation complaints on behalf of their own corporations because those officers
“are as competent to file these documents as an individual taxpayer would be,”
and they “are directly accountable to the body they represent.” Id. at 164, 707
N.E.2d 499 (Stratton, J., dissenting).
Nevertheless, a majority of the court
rejected the dissenters’ reasoning.
II. R.C. 5715.19 Has Been Amended
{¶ 42} Less than two years after the court’s decision in Sharon Village,
the General Assembly voted to undo the impact of that decision and thereby
widen the pool of persons who may file a property-valuation complaint on behalf
of a property owner. As the title of the legislation explained, its purpose was to
“amend sections 5715.13 and 5715.19 of the Revised Code to clarify who may
file a complaint [challenging real-property assessments] with a county board of
revision.” 1998 Sub.H.B. No. 694, effective March 30, 1999, 147 Ohio Laws,
Part III, 5373. The bill became law without the signature of the governor, id. at
5378, and it gave some nonattorneys, including corporate officers, the authority to
file valuation complaints on behalf of property owners.
{¶ 43} The 1999 statutory changes remain in effect today, and R.C.
5715.19(A) now reads:
{¶ 44} “(1) * * * [A] complaint against any of the following
determinations for the current tax year shall be filed with the county
auditor on or before the thirty-first day of March of the ensuing tax year *
**:
{¶ 45} “* * *
{¶ 46} “(d) The determination of the total valuation * * * of any
parcel * * *.
15
SUPREME COURT OF OHIO
{¶ 47} “* * *
{¶ 48} “Any person owning taxable real property in the county * *
* [or] if the person is a * * * corporation, an officer * * * of that person *
* * may file such a complaint regarding any such determination affecting
any real property in the county * * * .”
{¶ 49} Although the court has considered this statutory change in two
recent tax cases, the court has not yet addressed the separation-of-powers question
at issue in this case. See Rubbermaid, Inc. v. Wayne Cty. Aud., 95 Ohio St.3d
358, 2002-Ohio-2338, 767 N.E.2d 1159, ¶ 9, and fn. 4 (holding that the 1999
statutory change cannot be applied retroactively to property-valuation complaints
filed before the change took effect and explaining that the resolution of that issue
eliminated the need for the court to consider whether the General Assembly
violated separation-of-powers principles “by enacting legislation infringing upon
this court’s power to regulate the practice of law”); Cincinnati School Dist. Bd. of
Edn. v. Hamilton Cty. Bd. of Revision (2001), 91 Ohio St.3d 308, 315, 744 N.E.2d
751 (holding that a property-valuation complaint had been properly signed by and
filed by or at the direction of an attorney and explaining that it was therefore
unnecessary for the court “to consider the constitutionality of that part of R.C.
5715.19 that purports to empower certain nonattorneys, including corporate
officers, to file valuation complaints on behalf of others”).
{¶ 50} The separation-of-powers issue that the court was able to skirt in
earlier cases is squarely presented in this case. (The BTA did not address the
question, but that board “is an administrative agency, a creature of statute, and is
without jurisdiction to determine the constitutional validity of a statute.”
Cleveland Gear Co. v. Limbach (1988), 35 Ohio St.3d 229, 520 N.E.2d 188,
paragraph one of the syllabus.) Under the court’s 1997 Sharon Village decision
and its progeny, the property-valuation complaint in this case was defective
because it was signed and filed by a nonattorney on behalf of a corporation.
16
January Term, 2006
Sharon Village, 78 Ohio St.3d 479, 678 N.E.2d 932.
Yet under the 1999
amendment to R.C. 5715.19, the complaint in this case was proper, because it was
filed in 2003 by “an officer” of a corporation “owning taxable real property in the
county.” R.C. 5715.19(A)(1).
III. Analysis
{¶ 51} To resolve whether the actions undertaken in this case amounted to
the unauthorized practice of law, the court should consider two questions. First,
does R.C. 5715.19 unconstitutionally infringe on separation-of-powers principles?
If it does not, then the statute controls, and no unauthorized practice occurred.
However, if the answer to the question is yes, and the statute is unconstitutional
and does not control, the second question is whether the court should continue to
follow the precedents established in Sharon Village and related cases.
{¶ 52} The majority proceeds directly to the second question, in the
process devaluing the relevant precedents to explain them away. In that way, the
majority avoids answering the first question, sidestepping the necessity of
considering whether current R.C. 5715.19 is unconstitutional on separation-ofpowers grounds. Although it is true that this court will ordinarily not determine
the constitutionality of a statute when a case can be resolved on nonconstitutional
grounds, the precedents should not so readily be minimized. Therefore, the
separation-of-powers issue must be addressed first.
A. Separation of Powers
{¶ 53} On the first question, the current version of R.C. 5715.19 is
unconstitutional because the General Assembly has—through the 1999 changes to
the statute—given nonattorneys the authority to perform an activity that this court
has described as the practice of law and has said must be “left to an attorney to
handle.” Sharon Village, 78 Ohio St.3d at 482, 678 N.E.2d 932.
{¶ 54} The separation-of-powers doctrine “implicitly arises from our
tripartite democratic form of government and recognizes that the executive,
17
SUPREME COURT OF OHIO
legislative, and judicial branches of our government have their own unique
powers and duties that are separate and apart from the others.” State v. Thompson
(2001), 92 Ohio St.3d 584, 586, 752 N.E.2d 276. The doctrine’s purpose “is to
create a system of checks and balances so that each branch maintains its integrity
and independence.” Id.
{¶ 55} Section 2(B)(1)(g), Article IV of the Ohio Constitution gives this
court “original jurisdiction” over “[a]dmission to the practice of law, the
discipline of persons so admitted, and all other matters relating to the practice of
law.” Both before and after that provision was adopted in 1968, this court has
staked out its exclusive authority to define the practice of law and to regulate
those who provide legal services. See, e.g., Disciplinary Counsel v. Alexicole,
Inc., 105 Ohio St.3d 52, 2004-Ohio-6901, 822 N.E.2d 348, ¶8 (“Section
2(B)(1)(g), Article IV of the Ohio Constitution confers on this court exclusive
jurisdiction over all matters related to the practice of law. * * * [A] corporation
cannot lawfully engage in the practice of law, and it cannot lawfully engage in the
practice of law through its officers who are not licensed to practice law”); Shimko
v. Lobe, 103 Ohio St.3d 59, 2004-Ohio-4202, 813 N.E.2d 669, ¶15 (“it has been
methodically and firmly established that the power and responsibility to admit and
discipline persons admitted to the practice of law, to promulgate and enforce
professional standards and rules of conduct, and to otherwise broadly regulate,
control, and define the procedure and practice of law in Ohio rest[ ] inherently,
originally, and exclusively in the Supreme Court of Ohio”); Judd v. City Trust &
Sav. Bank (1937), 133 Ohio St. 81, 85, 10 O.O. 95, 12 N.E.2d 288 (“In Ohio, the
power to regulate, control and define the practice of law reposes in the judicial
branch of the government”).
{¶ 56} Despite this court’s longstanding role in Ohio’s governmental
structure as the sole entity empowered to define the practice of law and to prevent
the unauthorized practice of that profession, the current version of R.C. 5715.19
18
January Term, 2006
reflects an express attempt by the General Assembly to allow nonattorneys to
perform an activity that this court has defined as the practice of law. The statute
is unconstitutional because it allows nonattorneys to file property-valuation
complaints on behalf of others despite this court’s holding that the “preparation
and filing of a complaint with a board of revision on behalf of a taxpayer
constitute the practice of law.” Sharon Village, 78 Ohio St.3d 479, 678 N.E.2d
932, syllabus.
{¶ 57} Both Ohio appellate courts that have examined the separation-ofpowers implications of R.C. 5715.19 have found the statute unconstitutional. See
C.R. Truman, L.P. v. Cuyahoga Cty. Bd. of Revision (July 27, 2000), 8th Dist. No.
76713, 2000 WL 1038184, *4 (“Amended R.C. 5715.19(A) * * * permits nonattorneys to engage in what has been uniformly recognized as the practice of
law”); Whitehall City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision,
10th Dist. Nos. 01AP-878 and 01AP-879, 2002-Ohio-1256, 2002 WL 416953, *4
(“the amended provisions of R.C. 5715.19, permitting a formerly unauthorized
person to practice law in certain circumstances, are unconstitutional”).
{¶ 58} It is true that the court’s “ability to invalidate legislation is a power
to be exercised only with great caution and in the clearest of cases,” and “laws are
entitled to a strong presumption of constitutionality.” Yajnik v. Akron Dept. of
Health, Hous. Div., 101 Ohio St.3d 106, 2004-Ohio-357, 802 N.E.2d 632, ¶16.
Yet the court has not hesitated to strike other legislative attempts to allow
nonattorneys to engage in conduct that the court has defined as the practice of
law. See, e.g., Cleveland Bar Assn. v. Picklo, 96 Ohio St.3d 195, 2002-Ohio3995, 772 N.E.2d 1187 (striking statutes that allowed nonattorneys to file
forcible-entry-and-detainer complaints in the municipal courts on behalf of
property owners).
{¶ 59} As one Ohio appellate court said many decades ago, the General
Assembly “has no power to authorize any person or corporation to practice law.
19
SUPREME COURT OF OHIO
That is solely and exclusively the function of the Supreme Court of Ohio.”
Dworken v. Guarantee Title & Trust Co. (1932), 12 Ohio Law Abs. 399, 400,
affirmed sub nom. Land Title Abstract & Trust Co. v. Dworken (1934), 129 Ohio
St. 23, 1 O.O. 313, 193 N.E.2d 650.
{¶ 60} The United States Supreme Court has stated, “One branch of the
government cannot encroach on the domain of another without danger. The
safety of our institutions depends in no small degree on a strict observance of this
salutary rule.” Union Pac. RR. Co. v. United States (1878), 99 U.S. 700, 718, 25
L.Ed. 496.
The separation-of-powers doctrine “is a prophylactic device,
establishing high walls and clear distinctions because low walls and vague
distinctions will not be judicially defensible in the heat of interbranch conflict.”
Plaut v. Spendthrift Farm, Inc. (1995), 514 U.S. 211, 239, 115 S.Ct. 1447, 131
L.Ed.2d 328.
{¶ 61} This court has clearly and consistently held since 1997 in Sharon
Village and in other later cases that a nonattorney may not prepare and file a
property-valuation complaint on behalf of another property owner.
Any
nonlawyer who flouts that requirement violates both Gov.Bar R. VII (regulating
the unauthorized practice of law) and R.C. 4705.07(A)(3) (barring nonattorneys
from “any act that is prohibited by the supreme court as being the unauthorized
practice of law”).
{¶ 62} By authorizing nonlawyers to perform an activity that the court has
defined as the practice of law, the General Assembly has tried to interfere in this
court’s performance of a duty that the Constitution has conferred exclusively on
the judicial branch. Like the two Ohio appellate courts that have examined the
question, this court should hold that R.C. 5715.19 is unconstitutional because it
violates separation-of-powers principles.
{¶ 63} Given that R.C. 5715.19 is unconstitutional, Sharon Village and its
progeny remain binding precedents, and under those decisions the property-
20
January Term, 2006
valuation complaint filed by a nonlawyer corporate officer of Dayton Supply &
Tool was defective because Dayton Supply & Tool—not the officer—was the
owner of the property in question.
B. Characterizing the Precedents
{¶ 64} Given the resolution of the first question, the second question to be
answered is whether this court should continue to follow its precedents. As stated
previously, the majority makes answering this second question the sole ground of
its analysis. Although the majority chooses to “distinguish” Sharon Village, 78
Ohio St.3d 479, 678 N.E.2d 932, and to “limit” Worthington City School Dist., 85
Ohio St.3d 156, 707 N.E.2d 499, it appears that the majority, in actuality,
distinguishes Sharon Village to the point of rewriting it, and then uses that
recasting as a basis to overrule Worthington City School Dist., regardless of the
terminology the majority employs. The majority adopts the view of the General
Assembly found within the amendment to R.C. 5715.19, which matches the view
of the dissent in Worthington City School Dist. Id. at 161-165, 707 N.E.2d 499.
In the process, the majority’s stated “limitation” of the decision in that case seems
highly questionable due to the similarity of its facts to those in this case.
Although the majority condones the preparation and filing of a complaint with a
board of revision and the presentation of the claimed value before that board by a
nonattorney corporate officer, this court in Worthington City School Dist.
explicitly defined as the practice of law precisely these actions of preparing and
filing a complaint with a board of revision on behalf of another.
{¶ 65} Sharon Village, Worthington City School Dist., and related cases
are certainly not outside the mainstream of this court’s decisions on practice-oflaw matters. See, e.g., Cleveland Bar Assn. v. Woodman, 98 Ohio St.3d 436,
2003-Ohio-1634, 786 N.E.2d 865 (nonattorney trustees of a nonprofit corporation
engaged in the unauthorized practice of law when they prepared, signed, and filed
administrative complaints with the Public Utilities Commission of Ohio on behalf
21
SUPREME COURT OF OHIO
of various governmental entities and officials); Land Title Abstract & Trust Co. v.
Dworken, 129 Ohio St. 23, 1 O.O. 313, 193 N.E. 650, paragraph one of the
syllabus (“The practice of law is not limited to the conduct of cases in court. It
embraces the preparation of pleadings and other papers incident to actions and
special proceedings and the management of such actions and proceedings on
behalf of clients”).
{¶ 66} This court has long been hesitant to allow corporate officers to act
on behalf of a corporation in legal or administrative proceedings. See Union Sav.
Assn. v. Home Owners Aid, Inc. (1970), 23 Ohio St.2d 60, 64, 52 O.O.2d 329, 262
N.E.2d 558 (“To allow a corporation to maintain litigation and appear in court
represented by corporate officers or agents only would lay open the gates to the
practice of law for entry to those corporate officers or agents who have not been
qualified to practice law and who are not amenable to the general discipline of the
court”).
{¶ 67} Dayton Supply & Tool has chosen to conduct its business
operations as a corporation. With that choice come certain advantages and also
certain limitations. One of those limitations is that, as a corporation, Dayton
Supply & Tool is generally unable to represent itself in legal proceedings, as
individuals can, but must hire an attorney. See, e.g., Union Sav. Assn., 23 Ohio
St.2d 60, 52 O.O.2d 329, 262 N.E.2d 558, syllabus (“A corporation cannot
maintain litigation in propria persona, or appear in court through an officer of the
corporation or an appointed agent not admitted to the practice of law”).
{¶ 68} The majority goes to great lengths to relieve Dayton Supply &
Tool of the obligation to engage an attorney when the company manifestly should
have done so due to its status as a corporation. There are no compelling reasons
to take that step. The majority’s rationale based on “public-interest factors”
underlying its conclusion is unconvincing. In particular, there is little connection
between the fact that a corporate officer has a fiduciary duty to the corporation
22
January Term, 2006
(and is accountable to that corporation) and the issue of whether this court should
open the door to a nonattorney corporate officer taking the actions involving the
complaint to the BOR that were taken in this case.
{¶ 69} In two very recent decisions, the court has allowed nonattorneys to
represent other persons in legal proceedings.
See Cleveland Bar Assn. v.
Pearlman, 106 Ohio St.3d 136, 2005-Ohio-4107, 832 N.E.2d 1193, fn. 3
(rejecting a constitutional challenge to a statute that allowed “any bona fide
officer or salaried employee” of a limited liability company to file claims and
appear on behalf of the company in small claims court); Cleveland Bar Assn. v.
CompManagement, Inc., 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181,
¶ 39 (allowing nonlawyers to appear and practice in a representative capacity
before the Industrial Commission and the Bureau of Workers’ Compensation and
explaining that “in certain limited settings, the public interest is better served by
authorizing laypersons to engage in conduct that might be viewed as the practice
of law”).
However, those two decisions are narrow, limited to the specific
situations presented in each, and of no precedential value to the instant case.
{¶ 70} Even though the majority does not term what it is doing as
“overruling” any precedents, that is what for all practical purposes is actually
occurring, especially as to Worthington City School Dist.
Consequently, a
legitimate question to ask is whether the majority is paying sufficient respect to
the principle of stare decisis. As the United States Supreme Court has said, stare
decisis is “the preferred course because it promotes the evenhanded, predictable,
and consistent development of legal principles, fosters reliance on judicial
decisions, and contributes to the actual and perceived integrity of the judicial
process.” Payne v. Tennessee (1991), 501 U.S. 808, 827, 111 S.Ct. 2597, 115
L.Ed.2d 720. Stare decisis is a principle that means little if it simply applies to
precedents with which the court agrees.
The majority overturns settled law
without a sufficiently valid justification for doing so.
23
SUPREME COURT OF OHIO
IV. Conclusion
{¶ 71} I disagree on two primary grounds with the majority’s
determination to carve out an exception for the circumstances of this case to the
Union Sav. Assn. principle that a corporation is required to engage an attorney to
handle its legal matters.
First, the relevant part of R.C. 5715.19 is
unconstitutional. Second, our precedents (particularly Worthington City School
Dist.) are fully applicable to this case and should be followed. Because the
decision of the BTA was reasonable and lawful, I would affirm that decision.
Accordingly, I dissent.
MOYER, C.J., and O’DONNELL, J., concur in the foregoing dissenting
opinion.
__________________
Coolidge, Wall, Womsley & Lombard and Merle F. Wilberding, for
appellant.
David C. DiMuzio, Inc. and David C. DiMuzio, for appellee Dayton
School District.
_______________________
24
1
Buckeye Foods, Appellant, v. Cuyahoga County Board of Revision et al.,
2
Appellees.
3
[Cite as Buckeye Foods v. Cuyahoga Cty. Bd. of Revision (1997), ____
4
Ohio St.3d _____.]
5
Taxation -- Real property valuation -- Party lacks standing to file a
6
complaint seeking a decrease in the value of property when it
7
has no legal or financial relationship with the subject property
8
that would qualify it as the real party in interest -- R.C.
9
5715.13, applied.
10
(Nos. 96-1577, 96-1578, 96-
11
1579 and 96-1580 -- Submitted January 14, 1997 -- Decided May 21,
12
1997.)
13
APPEALS from the Board of Tax Appeals, Nos. 94-T-317, 94-T-320,
14
15
94-T-321 and 94-T-318.
Buckeye Foods, appellant, was named as complainant in four separate
16
complaints filed with the Cuyahoga County Board of Revision (“BOR”),
17
appellee. Buckeye Foods did not own the property listed on the complaint,
18
fast food restaurants; Buckeye Foods, moreover, did not lease or operate
19
these restaurants. According to the affidavit of Michael A. Eanes, president
1
and shareholder of Buckeye Foods, Inc., Buckeye Foods is a name he allows
2
various corporations that he has an interest in to use in leasing and operating
3
these restaurants.
4
In case No. 96-1577, Buckeye Foods Limited Partnership Number
5
One is the property’s sublessee. In case No. 96-1578, Buckeye Foods-
6
Kinsman, Inc. is the property’s sublessee; in case No. 96-1579, Buckeye
7
Foods-Harvard, Inc. is the property’s sublessee; and in case No. 96-1580,
8
Buckeye Superior/Euclid, Inc. is the property’s lessee and franchisee.
9
10
The complaints also gave the address of Buckeye Foods, the
complainant, as:
11
“c/o Michael A. Eanes
12
Buckeye Foods, Inc.
13
P.O. Box 20297
14
Shaker Heights, OH 44120”
15
16
17
The BOR, after a hearing, affirmed the true values that the Cuyahoga
18
County Auditor, appellee, had placed on the properties. Buckeye Foods
19
appealed these decisions to the Board of Tax Appeals (“BTA”).
20
At the BTA, the Cleveland Board of Education (“Cleveland”),
21
appellee, which had filed counter-complaints, moved to dismiss the appeals.
2
1
Cleveland contended that Buckeye Foods was not an owner, a party affected
2
by the complaint, or an agent. Thus, reasoned Cleveland, Buckeye Foods
3
lacked standing to file the complaints. The BTA agreed with Cleveland.
4
The BTA concluded that Buckeye Foods is a fictitious name, since it
5
does not identify any particular legal entity having an interest in the
6
property. The BTA, even assuming that Buckeye Foods referred to Buckeye
7
Foods, Inc., rejected the argument that Buckeye Foods, Inc., had any
8
relationship to the subject properties. The BTA stated:
9
“*** Buckeye Foods is not an owner of the subject property, nor is it
10
a lessee or sublessee. Buckeye Foods has not demonstrated that it operates,
11
manages, or is responsible for the payment of tax for the subject property.
12
Finally, the record supports the conclusion that Buckeye Foods has no legal
13
or financial relationship with the subject property that would qualify it as
14
the real party in interest. Consequently, we find that Buckeye Foods lacks
15
standing to file a decrease complaint with the Board of Revision as it is not
16
a ‘party affected thereby or his agent.’ R.C. 5715.13; Middleton [v.
17
Cuyahoga Cty. Bd. of Revision (1996), 74 Ohio St.3d 226, 658 N.E. 2d
18
267].”
3
1
2
Consequently, the BTA dismissed the cases. Buckeye Foods
appealed these decisions to this court, and we consolidated the appeals.
3
These causes are now before this court upon appeals as of right.
4
Arter & Hadden and Karen H. Bauernschmidt, for appellant.
5
Armstrong, Mitchell & Damiani, Timothy J. Armstrong and Victor V.
6
7
Anselmo, for appellee Cleveland Board of Education.
Stephanie Tubbs Jones, Cuyahoga County Prosecuting Attorney, and
8
David Lambert, Assistant Prosecuting Attorney, for appellees Cuyahoga
9
County Board of Revision and Cuyahoga County Auditor.
10
Per Curiam. Buckeye Foods, first, claims that Cleveland waived the
11
standing issue by not raising it at the BOR, its first opportunity to challenge
12
Buckeye Foods’ status. Cleveland replies that standing is jurisdictional and
13
cannot be waived. We agree with Cleveland.
14
According to New Boston Coke Corp. v. Tyler (1987), 32 Ohio St.3d
15
216, 218, 513 N.E. 2d 302, 305, “*** the issue of standing, inasmuch as it is
16
jurisdictional in nature, may be raised at any time during the pendency of
17
the proceedings. See United States v. Storer Broadcasting Co. (1956), 351
18
U.S. 192, 197 [76 S.Ct. 763, 767, 100 L.Ed. 1081, 1088].”
4
1
These complaints were filed under R.C. 5715.19, which sets forth the
2
general complaint process, and R.C. 5715.13, which prevents a board of
3
revision from decreasing any valuation complained of unless filed by “the
4
party affected thereby or his agent.” Middleton v. Cuyahoga Cty. Bd. of
5
Revision (1996), 74 Ohio St.3d 226, 658 N.E. 2d 267. Complaints filed
6
under these statutes are jurisdictional. In Stanjim Co. v. Mahoning Cty. Bd.
7
of Revision (1974), 38 Ohio St.2d 233, 235, 67 O.O. 2d 296, 298, 313
8
N.E.2d 14, 16, we held, “full compliance with R.C. 5715.19 and 5715.13 is
9
necessary before a county board of revision is empowered to act on the
10
merits of a claim.” Accord N. Olmsted v. Cuyahoga Cty. Bd. of Revision
11
(1980), 62 Ohio St.2d 218, 220, 16 O.O. 3d 249, 250, 404 N.E. 2d 757, 759
12
(“We held [R.C. 5715.19] to be jurisdictional in Stanjim Co. v. Bd. of
13
Revision ***.”). Under this authority, Buckeye Foods’ standing to file
14
valuation complaints on these properties is jurisdictional, and Cleveland
15
could not waive its challenge to Buckeye Foods’ standing.
16
Turning to the standing question, Buckeye Foods primarily argues
17
that “Buckeye Foods” is a generic name that refers to all the various
18
corporations and entities in which Eanes had an interest. Thus, Buckeye
5
1
Foods claims, Eanes was the party affected thereby and could file the
2
complaints. Cleveland, of course, disagrees, as do we.
3
We agree with the BTA that Buckeye Foods is a fictitious name. R.C.
4
1329.01 defines “fictitious name” as “a name used in business or trade that
5
is fictitious and that the user has not registered or is not entitled to register
6
as a trade name ***.” R.C. 1329.10(B) prevents a person from commencing
7
or maintaining an action in a fictitious name until the person has registered
8
the name with the Secretary of State.
9
A person places himself in a precarious position when he operates
10
under a fictitious name. A person doing business under an unregistered,
11
fictitious name lacks the legal capacity to sue. GMS Mgt. Co. v. Axe (1982),
12
5 Ohio Misc. 2d 1, 8, 5 OBR 53, 61, 449 N.E. 2d 43, 51; Thomas v.
13
Columbus (1987), 39 Ohio App. 3d 53, 55-56, 528 N.E. 2d 1274, 1277.
14
15
16
17
In Queen City Valves, Inc. v. Peck (1954), 161 Ohio St. 579, 583-584,
53 O.O. 430, 432-433, 120 N.E.2d 310, 313, we said:
“This court has no disposition to be hypertechnical and to deny the
right of appeal on captious grounds but it cannot ignore statutory language
6
1
which demands that certain conditions be met to confer jurisdiction upon an
2
appellate tribunal.”
3
Because full compliance with R.C. 5715.13 is necessary and
4
jurisdictional, we require a complainant to be an entity that has legal
5
capacity. Buckeye Foods exists in the mind of Eanes. On the other hand,
6
Buckeye Foods Limited Partnership Number One, Buckeye Superior/Euclid,
7
Inc., Buckeye Foods-Kinsman, Inc., and Buckeye Foods-Harvard, Inc.,
8
which have legal relationships with the disputed properties, exist in the
9
records of the Secretary of State’s Office. These latter entities are real, but
10
Buckeye Foods is not. Since Buckeye Foods is fictitious, it cannot file a
11
complaint seeking a reduced valuation for real estate under R.C. 5715.13.
12
The complexity of names in these cases points out why a complainant
13
must have legal existence and be better identified than occurred here. In
14
these cases, each property in dispute had lessees, sublessees, franchisees,
15
franchisors, some with the words “Buckeye Foods” as part of their corporate
16
name, some that did not. The taxing authorities and other interested parties
17
are to have, by these statutes, the ability to discern who is complaining
18
about the value of real property.
7
1
Buckeye Foods also argues that Eanes is the real party in interest,
2
since he owns an interest in these corporations and is a franchisee for three
3
of the properties. We reject this contention. The complaint does not list
4
Eanes as the complainant; his name appears as the person in the care of
5
which the complainant’s mail is to be sent. According to Webster’s Third
6
New International Dictionary (1986) 338, the word “care” means
7
“CUSTODY: temporary charge -- used esp. in the phrase care of or in care
8
of on mail sent to a person through another person or other agency *** abbr.
9
c/o.” (Emphasis sic.) Since Eanes is the person to whom the mail for
10
11
Buckeye Foods is to be sent, he is not the complainant.
Accordingly, since Buckeye Foods is a fictitious name that has no
12
capacity to litigate these complaints, it is not the party affected by these
13
complaints. We, thus, affirm the BTA’s dismissal of the complaints.
14
Middleton v. Cuyahoga Cty. Bd. of Revision, supra.
15
16
17
18
Decisions affirmed.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK
and LUNDBERG STRATTON, JJ., concur.
PFEIFER and LUNDBERG STRATTON, JJ., concur separately.
8
1
LUNDBERG STRATTON, J., concurring. I concur with the majority;
2
however, I believe that these filings should not preclude the correct party or
3
parties from filing another complaint on the same properties within the same
4
triennium.
5
R.C. 5715.19(A)(2) provides:
6
“No person, board, or officer shall file a complaint against the
7
valuation or assessment of any parcel that appears on the tax list if it filed a
8
complaint against the valuation or assessment of that parcel for any prior tax
9
year in the same interim period * * *.”
10
I would not deem it a violation of R.C. 5715.19(A)(2) if the proper
11
parties attempted to file decrease complaints on the subject properties
12
because they would not be the same parties that filed the complaints that are
13
the subject of this appeal.
14
Because the complainant in these cases was fictitious and, thus,
15
lacked standing to file because it did not legally exist, the BOR had no
16
jurisdiction over the complaints filed. Unless the same party previously
17
filed a complaint on the property within a triennium, a dismissal for lack of
9
1
standing of a nonexistent complainant is a dismissal for reasons other than
2
on the merits. See Gammarino v. Hamilton Cty. Bd. of Revision (1994), 71
3
Ohio St.3d 388, 643 N.E. 2d 1143. Consequently, in the event the proper
4
party or the real party in interest files a complaint on these properties within
5
the same triennium as the complaints filed by fictitious party Buckeye
6
Foods, I would allow the filing of the complaints.
7
PFEIFER, J., concurs in the foregoing concurring opinion.
10
County
Adams
Allen
Auditor Address
Contact Info
David Gifford
Telephone: 937-544-2364
110 W. Main Street, #104
Fax: 937-544-1016
West Union, Ohio 45693
E-mail: adamscoaud@cinci.rr.com
Web Site: http://adamscountyauditor.org
Rhonda D. Eddy
Telephone: 419-228-3700 x 8794
301 N. Main Street
Fax: 419-222-2543
Lima, Ohio 45801
E-mail: reddy@allencountyohio.com
Web Site: http://www.allencountyohio.com/auditor
Ashland
Philip H. Leibolt
Telephone: 419-282-4324
142 W. Second Street
Fax: 419-281-5715
Ashland, Ohio 44805
E-mail: ashcoaud@zoominternet.net
Web Site: http://www.ashlandcoauditor.org
Ashtabula
Roger A. Corlett
Telephone: 440-576-3785
25 West Jefferson Street
Fax: 440-576-3797
Jefferson, Ohio 44047
E-mail: racorlett@ashtabulacounty.us
Web Site: http://www.ashtabulacountyauditor.org
Athens
Jill A. Thompson
Telephone: 740-592-3223
15 S. Court Street, #330
Fax: 740-594-3270
Athens, Ohio 45701
E-mail: jthompson@athenscountygovernment.com
Web Site: http://www.athenscountyauditor.org
Auglaize
Janet Schuler
Telephone: 419-739-6705
P.O. Box 34
Fax: 419-739-6706
Wapakoneta, Ohio 45895
E-mail: jschuler@auglaizecounty.org
Web Site: http://www.auglaizeauditor.ddti.net
County
Belmont
Auditor Address
Contact Info
Andrew L. Sutak
Telephone: 740-699-2130
101 W. Main Street
Fax: 740-699-2154
St. Clairsville, Ohio 43950
E-mail: auditor@belmontcountyohio.org
Web Site:
http://www.belmontcountyohio.org/auditor.htm
Brown
Butler
Doug Green
Telephone: 937-378-6398 / Toll-free 888-244-6420
County Administration Bldg.
Fax: 937-378-6038
800 Mt. Orab Pike
E-mail: dgreen@browncountyauditor.org
Georgetown, Ohio 45121
Web Site: http://www.browncountyauditor.org
Roger Reynolds
Telephone: 513-887-3154
130 High Street, 4th Floor
Fax: 513-785-5225
Hamilton, Ohio 45011
E-mail: reynoldsr@butlercountyohio.org
Web Site: http://www.butlercountyauditor.org
Carroll
E. Leroy VanHorne
Telephone: 330-627-2250
119 S. Lisbon Street, Suite 203
Fax: 330-627-7555
Carrollton, Ohio 44615
E-mail: carrollauditor@verizon.net
Web Site:
http://www.carrollcountyohio.net/auditor.html
Champaign
Karen T. Bailey
Telephone: 937-484-1600
1512 South U.S. Hwy 68, Suite B300
Fax: 937-484-1626
Urbana, Ohio 43078
E-mail: kbailey@co.champaign.oh.us
Web Site: http://www.co.champaign.oh.us/auditor
Clark
George A. Sodders
Telephone: 937-521-1867
31 N. Limestone Street
Fax: 937-328-4579
Springfield, Ohio 45502
E-mail: auditor@clarkcountyohio.gov
Web Site: http://www.clarkcountyauditor.org
County
Clermont
Auditor Address
Contact Info
Linda L. Fraley
Telephone: 513-732-7150
101 E. Main Street
Fax: 513-732-7226
Batavia, Ohio 45103
E-mail: lfraley@co.clermont.oh.us
Web Site: http://www.clermontauditor.org
Clinton
Wanda E. Armstrong
Telephone: 937-382-2250
46 S. South Street
Fax: 937-382-4090
Wilmington, Ohio 45177
E-mail: armstrongwe@clintoncountyohio.us
Web Site: http://co.clinton.oh.us/
Columbiana
Nancy Gause Milliken
Telephone: 330-424-9515
105 S. Market Street
Fax: 330-424-9745
Lisbon, Ohio 44432
E-mail: auditor@columbianacntyauditor.org
Web Site: http://www.columbianacntyauditor.org
Coshocton
Sandra K. Corder
Telephone: 740-622-1243
349 Main Street
Fax: 740-622-6931
Coshocton, Ohio 43812
E-mail: sandycorder@coshoctoncounty.net
Web Site: http://www.coshoctoncounty.net
Crawford
Robin Hildebrand
Telephone: 419-562-7941
112 E. Mansfield Street, Suite 105
Fax: 419-562-2139
Bucyrus, Ohio 44820
E-mail: robinh@crawford-co.org
Web Site: http://www.crawford-co.org
Cuyahoga
Dave Reines
Telephone: 216-443-7010
1219 Ontario Street, #300
Fax: 216-443-5090
Cleveland, Ohio 44113
E-mail: dreines@cuyahogacounty.us
Web Site: http://auditor.cuyahogacounty.us
County
Darke
Defiance
Delaware
Auditor Address
Contact Info
Carol Ginn
Telephone: 937-547-7310
504 S. Broadway
Fax: 937-547-2500
Courthouse
E-mail: carolginn@embarqmail.com
Greenville, Ohio 45331
Web Site: http://www.darkecountyrealestate.org
Marlene J. Goodwin
Telephone: 419-782-1926
221 Clinton Street
Fax: 419-784-2761
Defiance, Ohio 43512
Web Site: http://www.defiance-county.com
George Kaitsa
Telephone: 740-833-2900
140 N. Sandusky Street
Fax: 740-833-2899
Delaware, Ohio 43015
E-mail: auditor@co.delaware.oh.us
Web Site: http://www.co.delaware.oh.us/auditor
Erie
Thomas J. Paul
Telephone: 419-627-7746
247 Columbus Avenue, #210
Fax: 419-627-7740
Sandusky, Ohio 44870
E-mail: tpaul@eriecounty.oh.gov
Web Site: http://www.erie.iviewtaxmaps.com
Fairfield
Jon Slater
Telephone: 740-652-7020
210 E. Main Street
Fax: 740-687-6781
Lancaster, Ohio 43130
E-mail: jslater@co.fairfield.oh.us
Web Site: http://www.co.fairfield.oh.us
Fayette
Michael D. Smith
Telephone: 740-335-6461
133 S. Main Street, Suite 303
Fax: 740-333-3512
Washington C.H., Ohio 43160
E-mail: mike.smith@fayette-co-oh.com
Web Site:
http://fayettepropertymax.governmax.com
County
Franklin
Auditor Address
Contact Info
Clarence E. Mingo, II
Telephone: 614-525-3200
373 S. High Street, 21st Floor
Fax: 614-525-7384
Columbus, Ohio 43215
E-mail: cemingo@franklincountyohio.gov
Web Site: http://www.franklincountyauditor.com
Fulton
Gallia
Brett J. Kolb
Telephone: 419-337-9200
152 S. Fulton Street, Suite 165
Fax: 419-337-9298
Wauseon, Ohio 43567
Web Site: http://www.fultoncountyoh.com
Larry M. Betz
Telephone: 740-446-4612 xt 213
18 Locust Street
Fax: 740- 446-9666
Gallipolis, Ohio 45631
E-mail: gcaud@gallianet.net
Web Site: http://www.gallianet.net
Geauga
Frank J. Gliha
Telephone: 440-279-1600 x1602
231 Main Street
Fax: 440-279-2184
Chardon, Ohio 44024
E-mail: auditor@co.geauga.oh.us
Web Site: http://www.auditor.co.geauga.oh.us/
Greene
Luwanna A. Delaney
Telephone: 937-562-5065
69 Greene Street, #200
Fax: 937-562-5030
Xenia, Ohio 45385
E-mail: ldelaney@co.greene.oh.us
Web Site: http://www.co.greene.oh.us
Guernsey
Tony Brown
Telephone: 740-432-9241
627 Wheeling Avenue
Fax: 740-439-6265
Cambridge, Ohio 43725
E-mail: tbrown@guernseycounty.org
Web Site: http://www.guernseycountyauditor.org
Hamilton
Dusty Rhodes
Telephone: 513-946-4047
138 E. Court Street, #304A
Fax: 513-946-4043
Cincinnati, Ohio 45202
E-mail: dusty.rhodes@auditor.hamilton-co.org
Web Site: http://www.hcauditor.org
County
Hancock
Auditor Address
Contact Info
Charity A. Rauschenberg, CPA
Telephone: 419-424-7015
300 S. Main Street
Fax: 419-424-7825
Findlay, Ohio 45840
E-mail: hanauda@co.hancock.oh.us
Web Site: http://auditor.co.hancock.oh.us
Hardin
Michael T. Bacon
Telephone: 419-674-2239
One Courthouse Square, Suite 250
Fax: 419-674-4023
Kenton, Ohio 43326
E-mail: hcaudit@co.hardin.oh.us
Web Site: http://www.co.hardin.oh.us
Harrison
Henry
Patrick J. Moore
Telephone: 740-942-8861
100 W. Market Street
Fax: 740-942-8860
Cadiz, Ohio 43907
E-mail: hca34@verizon.net
Kevin F. Nye
Telephone: 419-592-1956
660 N. Perry Street
Fax: 419-592-4024
Napoleon, Ohio 43545
E-mail: auditor@henrycountyohio.com
Web Site: http://www.co.henry.oh.us
Highland
Hocking
Bill Fawley
Telephone: 937-393-1915
119 Governor Foraker Place
Fax: 937-393-3854
P.O. Box 822
E-mail: bfawley@co.highland.oh.us
Hillsboro, Ohio 45133
Web Site: http://www.co.highland.oh.us
Kenneth R. Wilson
Telephone: 740-385-2127
1 E. Main Street
Fax: 740-385-9888
Logan, Ohio 43138
E-mail: kwilson@co.hocking.oh.us
Web Site: http://www.co.hocking.oh.us
Holmes
Jackie McKee
Telephone: 330-674-1896
75 East Clinton, Suite 107
Fax: 330-674-9428
Millersburg, Ohio 44654
E-mail: jmckee@co.holmes.oh.us
Web Site: http://www.holmescountyauditor.org
County
Huron
Auditor Address
Contact Info
Roland Tkach
Telephone: 419-668-4304
12 E. Main Street, Suite 300
Fax: 419-663-6948
Norwalk, Ohio 44857
E-mail: roland_t@hmcltd.net
Web Site: http://www.huroncountyauditor.org
Jackson
Clyde Holdren
Telephone: 740-286-4231
226 E. Main Street, Suite 5
Fax: 740-286-6312
Jackson, Ohio 45640
E-mail: jacksoncoauditor@ohiohills.com
Web Site: http://www.jacksoncountyauditor.org/
Jefferson
Knox
Patrick J. Marshall
Telephone: 740-283-8511
301 Market Street
Fax: 740-283-8520
P.O. Box 159
E-mail: vickiew@jeffersoncountyoh.com
Steubenville, Ohio 43952
Web Site: http://www.jeffersoncountyoh.com
Jonette Curry
Telephone: 740-393-6750
117 E. High Street, Suite 120
Fax: 740-393-6806
Mount Vernon, Ohio 43050
E-mail: auditor@co.knox.oh.us
Web Site: http://www.knoxcountyauditor.org
Lake
Lawrence
Edward H. Zupancic
Telephone: 440-350-2532
105 Main Street
Fax: 440-350-2667
P.O. Box 490
E-mail: ezupancic@lakecountyohio.org
Painesville, Ohio 44077
Web Site: http://www.lakecountyohio.org/auditor
Ray T. Dutey
Telephone: 740-533-4308
111 S. Fourth Street
Fax: 740-533-4381
Ironton, Ohio 45638
E-mail: ckline.lawcoaud@ash.twcbc.com
Web Site: http://www.lawrencecountyauditor.org
County
Licking
Auditor Address
Contact Info
Terry Evans
Telephone: 740-670-5040
20 S. Second Street
Fax: 740-670-5046
Newark, Ohio 43055
E-mail: lcauditor@lcounty.com
Web Site: http://www.lcounty.com
Logan
Michael E. Yoder
Telephone: 937-599-7209
100 S. Madriver Street
Fax: 937-599-7216
Bellefontaine, Ohio 43311
E-mail: myoder@co.logan.oh.us
Web Site: http://www.co.logan.oh.us
Lorain
Mark R. Stewart
Telephone: 440-329-5202
226 Middle Avenue, 2nd Floor
Fax: 440-329-5223
Elyria, Ohio 44035
E-mail: auditor@loraincounty.com
Web Site: http://www.loraincounty.com/auditor
Lucas
Anita Lopez
Telephone: 419-213-4322
One Government Center, Suite 600
Fax: 419-213-4399
Toledo, Ohio 43604
E-mail: alopez@co.lucas.oh.us
Web Site: http://www.co.lucas.oh.us
Madison
Mahoning
Jim Williamson
Telephone: 740-852-9717
1 N. Main Street
Fax: 740-852-5752
P.O. Box 47
E-mail: auditor@co.madison.oh.us
London, Ohio 43140
Web Site: http://co.madison.oh.us/auditor
Michael V. Sciortino
Telephone: 330-740-2010
120 Market Street
Fax: 330-480-7571
Youngstown, Ohio 44503
E-mail: msciortino@mahoningcountyoh.gov
Web Site: http://www.mahoningcountyauditor.org/
County
Marion
Auditor Address
Contact Info
Joan Kasotis
Telephone: 740-223-4020
222 W. Center Street
Fax: 740-223-4029
Marion, Ohio 43302
E-mail: jkasotis@co.marion.oh.us
Web Site: http://www.co.marion.oh.us/auditor/
Medina
Michael E. Kovack
Telephone: 330-725-9754
144 N. Broadway Street
Fax: 330-725-9136
Medina, Ohio 44256
E-mail: auditor@medinacountyauditor.org
Web Site: http://www.medinacountyauditor.org
Meigs
Mary T. Byer-Hill
Telephone: 740-992-2698
100 E. Second Street, #201
Fax: 740-992-6289
Pomeroy, Ohio 45769
E-mail: meigsauditor@suddenlinkmail.com
Web Site: http://www.meigscountyauditor.org
Mercer
Mark R. Giesige
Telephone: 419-586-6402
101 N. Main Street, #105
Fax: 419-586-8089
Celina, Ohio 45822
E-mail: auditor@mercercountyohio.org
Web Site: http://www.mercercountyohio.org
Miami
Matthew W. Gearhardt
Telephone: 937-440-5925
201 W. Main Street
Fax: 937-440-3530
Troy, Ohio 45373
E-mail: auditor@co.miami.oh.us
Web Site: http://www.miamicountyauditor.org
Monroe
Pandora J. Neuhart
Telephone: 740-472-0873
101 N. Main Street, #22
Fax: 740-472-2523
Woodsfield, Ohio 43793
E-mail: monroecountyauditor@yahoo.com
Web Site: http://monroecountyauditor.org
County
Montgomery
Auditor Address
Contact Info
Karl L. Keith
Telephone: 937-225-6024
451 W. Third Street
Fax: 937-496-7690
Dayton, Ohio 45422
E-mail: auditor@mcohio.org
Web Site: http://www.mcauditor.org
Morgan
Gary D. Woodward
Telephone: 740-962-4475
155 E. Main Street, #217
Fax: 740-962-2014
McConnelsville, Ohio 43756
E-mail: gary.woodward@morgancounty-oh.gov
Web Site: http://www.morgancountyauditor.org/
Morrow
Mary M. Holtrey
Telephone: 419-946-4060
48 E. High Street, #7
Fax: 419-946-6713
Mt. Gilead, Ohio 43338
E-mail: 59auditr@bright.net
Web Site: http://auditor.co.morrow.oh.us
Muskingum
Debra J. Nye
Telephone: 740-455-7109
401 Main Street
Fax: 740-455-7182
Zanesville, Ohio 43701
E-mail: auditor@muskingumcounty.org
Web Site: http://www.muskingumcountyauditor.org
Noble
Ottawa
Alice L. Warner
Telephone: 740-732-4044
200 Courthouse
Fax: 740-732-5702
Caldwell, Ohio 43724
E-mail: noble-auditor@verizon.net
Jo Ellen Regal
Telephone: 419-734-6740
315 Madison Street
Fax: 419-734-6592
Port Clinton, Ohio 43452
E-mail: jregal@co.ottawa.oh.us
Web Site: http://www.ottawacountyauditor.org
County
Paulding
Auditor Address
Contact Info
Susan K. Simpson
Telephone: 419-399-8205
115 N. Williams Street
Fax: 419-399-5713
Paulding, Ohio 45879
E-mail: pcauditor@pauldingcounty-oh.com
Web Site: http://www.pauldingcountyauditor.com
Perry
Pickaway
Teresa L. Stevenson
Telephone: 740-342-2074
105 N. Main Street
Fax: 740-342-1627
P.O. Box 127
E-mail: auditorteresa@hotmail.com
New Lexington, Ohio 43764
Web Site: http://www.perrycountyauditor.us
Melissa A. Betz
Telephone: 740-474-4765
207 S. Court Street, #1
Fax: 740-474-4956
Circleville, Ohio 43113
E-mail: mbetz@pickaway.org
Ted L. Wheeler
Telephone: 740-947-4125
Pike County Government Center
Fax: 740-941-3123
230 Waverly Plaza, Suite 200
E-mail: teddywheeler@pike-co.org
Waverly, Ohio 45690
Web Site: http://www.pike-co.org
Janet Esposito
Telephone: 330-297-3565
449 S. Meridian Street
Fax: 330-297-4560
Ravenna, Ohio 44266
E-mail: jesposito@portageco.com
Web Site: http://pickaway.iviewauditor.com
Pike
Portage
Web Site: http://www.co.portage.oh.us
Preble
Putnam
Mindy S. Robbins
Telephone: 937-456-8148
101 E. Main Street
Fax: 937-456-8108
P.O. Box 361
E-mail: coauditor@prebco.org
Eaton, Ohio 45320
Web Site: http://www.preblecountyauditor.org
Robert Benroth
Telephone: 419-523-6686
245 E. Main Street, Suite 201
Fax: 419-523-6390
Ottawa, Ohio 45875
E-mail: putcoaud@bright.net
Patrick W. Dropsey
Telephone: 419-774-5504
50 Park Avenue, East
Fax: 419-774-2005
Mansfield, Ohio 44902
E-mail: pdropsey@richlandcountyoh.us
Stephen A. Neal
Telephone: 740-702-3080
2 N. Paint Street, Suite G
Fax: 740-772-6748
Chillicothe, Ohio 45601
E-mail: rossaud@bright.net
Web Site: http://www.co.putnam.oh.us
Richland
Web Site: http://www.richlandcountyauditor.org
Ross
Web Site: http://www.co.ross.oh.us/auditor
County
Sandusky
Auditor Address
Contact Info
William L. Farrell
Telephone: 419-334-6123
100 N. Park Avenue, Suite 228
Fax: 419-334-6139
Fremont, Ohio 43420
E-mail: farrell_bill@co.sandusky.oh.us
Web Site: http://www.sandusky-county.org
Scioto
David L. Green
Telephone: 740-355-8324
602 Seventh Street, #103
Fax: 740-355-8240
Portsmouth, Ohio 45662
E-mail: dgreen@sciotocounty.net
Web Site: http://www.sciotocountyauditor.org
Seneca
Julie A. Adkins
Telephone: 419-447-0692
109 S. Washington Street, Suite 2206
Fax: 419-448-5055
Tiffin, Ohio 44883
E-mail: jadkins@seneca-county.com
Web Site: http://www.senecacountyauditor.org
Shelby
Stark
Dennis York
Telephone: 937-498-7296
129 E. Court Street
Fax: 937-498-2255
3rd Floor, Annex Building
E-mail: dyork@shelbycountyauditors.com
Sidney, Ohio 45365
Web Site: http://co.shelby.oh.us/auditor
Kim Perez
Telephone: 330-451-7291
110 Central Plaza South, Suite 220
Fax: 330-451-7630
Canton, Ohio 44702
E-mail: KRPerez@co.stark.oh.us
John A. Donofrio
Telephone: 330-643-2632
The Ohio Building, Suite 400
Fax: 330-643-2622
175 S. Main Street
E-mail: jdonofrio@summitoh.net
Akron, Ohio 44308
Web Site: http://www.co.summit.oh.us/fiscaloffice
Adrian S. Biviano
Telephone: 330-675-2420
160 High Street
Fax: 330-675-2419
Warren, Ohio 44481
E-mail: adbivian@co.trumbull.oh.us
Web Site: http://www.auditor.co.stark.oh.us
Summit
Trumbull
Web Site: http://property.co.trumbull.oh.us/
Tuscarawas
Union
Larry Lindberg
Telephone: 330-365-3220
125 E. High Street
Fax: 330-365-3397
P.O. Box 545
E-mail: auditor@co.tuscarawas.oh.us
New Philadelphia, Ohio 44663
Web Site: http://www.co.tuscarawas.oh.us
Mary H. Snider
Telephone: 937-645-3003
233 W. 6th Street
Fax: 937-645-3057
Marysville, Ohio 43040
E-mail: auditor@co.union.oh.us
Nancy Dixon
Telephone: 419-238-0843
121 E. Main Street
Fax: 419-238-1111
Van Wert, Ohio 45891
E-mail: auditor@vanwertcounty.org
Web Site: http://www.co.union.oh.us/auditor
Van Wert
Web Site: http://www.co.vanwert.oh.us
County
Vinton
Auditor Address
Contact Info
Cindy Owings
Telephone: 740-596-4571 xt 231
100 E. Main Street
Fax: 740-596-2462
McArthur, Ohio 45651
E-mail: auditor@vintonco.com
Web Site: vintoncountyoh.gov
Warren
Nick Nelson
Telephone: 513-695-1235
406 Justice Drive
Fax: 513-695-2960
Lebanon, Ohio 45036
E-mail: nnelson@co.warren.oh.us
Web Site: http://www.co.warren.oh.us
Washington
William (Bill) McFarland
Telephone: 740-373-6623 xt 263
205 Putnam Street
Fax: 740-376-7424
Marietta, Ohio 45750
E-mail: bmcfarland@wcgov.org
Web Site: http://www.washingtoncountyauditor.us
Wayne
Jarra L. Underwood
Telephone: 330-287-5439
428 W. Liberty Street
Fax: 330-287-5436
Wooster, Ohio 44691
E-mail: jarra.underwood@co.wayne.oh.us
Deborah S. Nester
Telephone: 419-636-5639
One Courthouse Square
Fax: 419-636-8584
Bryan, Ohio 43506
E-mail: wmscoaud@bright.net
Michael Sibbersen
Telephone: 419-354-9150
One Courthouse Square
Fax: 419-354-9370
Bowling Green, Ohio 43402
E-mail: auditor@co.wood.oh.us
Web Site: http://www.waynecountyauditor.org
Williams
Web Site: http://www.co.williams.oh.us/auditor
Wood
Web Site: http://www.co.wood.oh.us/auditor
Wyandot
George W. "Bill" Kitzler
Telephone: 419-294-1531
109 S. Sandusky Avenue
Fax: 419-209-0408
Upper Sandusky, Ohio 43351
E-mail: auditor@co.wyandot.oh.us
Web Site: http://www.co.wyandot.oh.us/auditor