Shinkle v. Ashtabula County Board of Revision

[Cite as Shinkle v. Ashtabula Cty. Bd. of Revision, 135 Ohio St.3d 227, 2013-Ohio-397.]

SHINKLE, APPELLANT, v. ASHTABULA COUNTY

BOARD OF REVISION ET AL., APPELLEES.

[Cite as Shinkle v. Ashtabula Cty. Bd. of Revision, 135 Ohio St.3d 227,

2013-Ohio-397.]

Taxation—Real property—Valuation—Taxpayer has burden of proving value is

different from value assigned by county—R.C. 5715.19(D)—Requirement

that taxpayer state in complaint amount of overvaluation or

undervaluation “runs to the core of procedural efficiency” and is

therefore jurisdictional—Dismissal of complaint for failure to state

amount at issue was proper.

(No. 2012-0670—Submitted February 6, 2013—Decided February 13, 2013.)

APPEAL from the Board of Tax Appeals,

Nos. 2008-K-1756 through 2008-K-1761.

__________________

Per Curiam.

{¶ 1} This case concerns the 2007 tax-year valuation of six properties

owned by the appellant, Wesley A. Shinkle. On the merits, the Ashtabula County

Board of Revision (“BOR”) retained the auditor’s valuation for five parcels but

ordered a reduction for one. Shinkle appealed all six of the BOR decisions to the

Board of Tax Appeals (“BTA”), which issued its decision on March 20, 2012. In

the case of one of the six parcels, the BTA decided that the complaint’s failure to

state an actual dollar amount of value reduction was a jurisdictional defect, and it

remanded that cause to the BOR for dismissal. With respect to the other five

parcels, the BTA found that the evidence offered by Shinkle was insufficient to

find a value different from that determined by the BOR.

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{¶ 2} On appeal, Shinkle argues that the BTA erred with respect to both

the jurisdictional and the valuation issues. We disagree, and we therefore affirm.

Facts

Background

{¶ 3} Shinkle was the common owner of several parcels in the village of

Rock Creek in Ashtabula County for which he filed six valuation complaints on

March 31, 2008. The Jefferson Area Local School District Board of Education

(the “school board”), appellee, filed a countercomplaint seeking to retain the

auditor’s valuation on one of those properties. After holding a hearing on August

14, 2008, the BOR issued its decision in each case on August 26, 2008. Shinkle

appealed all six decisions to the BTA, which consolidated them for hearing and

decision. On September 30, 2011, the BTA held a hearing at which Shinkle and

his witnesses testified.

Shinkle’s Testimony

{¶ 4} 1. 3244 Lawton Avenue. Shinkle testified that this parcel was an

investment property, that about two-thirds of the lot was wetland, and that due to

land taken and raised for a road alteration, a “dike effect * * * floods the property

and has lowered the property value since I bought it.” He testified that the house

on the lot was in poor condition and that it had a shingle roof, 20-year-old siding,

bad landscaping, and an incomplete electric and plumbing installation. A barn on

the property was also in poor condition. Shinkle stated that although he had

originally paid $15,000 for the property in 1988, it was currently worth $8,500.

The auditor valued the property at $89,400.

{¶ 5} 2. 3250 Main St. This is a residential property. Shinkle described

his residence as a house built in the late 1800s with an unfinished interior and

collapsing stone foundation and concrete-block walls. An unremediated gasoline

spill affected this parcel. Shinkle had originally paid $35,000, and the auditor

assigned the property a value of $32,000, allocating $25,100 to the land and

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$6,900 to the building. Shinkle believed the property to have a “negative value or

a near negative value.”

{¶ 6} 3. 3252 Main St. For this “impound, storage, [and] trucking”

parcel, Shinkle stated that in addition to the gasoline spill, the property lacked a

sewer hookup. The auditor valued the property at $63,700 and Shinkle expressed

no opinion of its value either in his valuation complaint or at the BTA hearing.

{¶ 7} 4. High St. Lot. This 0.62-acre vacant lot adjacent to Shinkle’s

residence was valued by the auditor at $11,700. Shinkle testified that it was

topographically unsuited for construction and valued it at $1,200, in light of the

gasoline spill flowing downhill onto the lot.

{¶ 8} 5 and 6. 3259 Main St. and 3271 Main St. These parcels

included a gas station at 3259 Main valued by the auditor at $57,800 and the

adjacent 0.02-acre vacant lot valued at $5,100. Shinkle testified that the value of

both properties was $15,000 based on the poor condition of the building, a

problem involving the sewer, and a disputed easement. He also claimed that the

gas station was a spill site that drastically reduces the property’s marketability.

{¶ 9} Shinkle also testified regarding the unremediated gasoline spill. In

1989, Rock Creek village performed a survey that identified underground storage

tanks on two of the parcels at issue: the “impound, storage, [and] trucking”

property at 3252 Main Street and Shinkle’s residence at 3250 Main Street. The

village removed four of the five storage tanks as part of excavating and installing

the sewer. When the tanks were removed, a gasoline spill occurred that involved

at least a thousand gallons. Before the fuel spill, Shinkle had paid $35,000 for the

residence.

{¶ 10} The spill was never properly remediated, and Shinkle maintains

that the ongoing contamination reduces the value of his properties below what the

county determined. He referred to testimony of a BTA witness who testified that

the Ohio Bureau of Underground Storage Tank Regulations (“BUSTR”)

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maintained an “open site number” on the two properties as of the date of hearing

on September 30, 2011. This designation means that there was an unremediated

spill on the site. According to the witness, such a designation affords BUSTR the

authority to demand closure of the site and remediation, which makes the

properties nearly impossible to sell or lease. Shinkle testified that his attempts to

get the “open site” designation removed have been fruitless.

Exclusion of Expert Opinion

{¶ 11} In addition to offering his own testimony and opinions before both

the BOR and the BTA, Shinkle offered the testimony of Patrick H. Laughlin.

Laughlin was offered as an expert in “contamination remediation,” but his

testimony was received as fact testimony rather than expert opinion testimony.

Laughlin testified about the unremediated gasoline spill, its administrative

consequences, and its negative effect on the value of the properties.

{¶ 12} Shinkle also proffered written appraisal reports and the testimony

of Ronald Damon, who after questioning by the hearing examiner was deemed to

be a fact witness rather than an expert.

{¶ 13} The examiner also struck the written opinions of value that Shinkle

proffered as exhibits.

The BTA’s Decision

{¶ 14} Shinkle filed his valuation complaints on March 31, 2008. On

March 20, 2012, the BTA issued a single decision covering all six properties. The

BTA found that the failure to specify an amount of value in dispute constituted a

fatal jurisdictional defect as to Shinkle’s complaint on the impound, storage, and

trucking lot. Regarding Damon’s testimony, the BTA stated that “although

initially found to be competent to offer expert appraisal testimony, [Damon] was

later determined to lack the necessary qualifications to offer an opinion, and, even

if so qualified, [Damon] failed to adequately support the opinion expressed.”

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Shinkle v. Ashtabula Cty. Bd. of Revision, BTA Nos. 2008-K-1756 through 2008-

K-1761, 2012 WL 992339, *4 (Mar. 20, 2012).

{¶ 15} With respect to the BOR record and the evidence admitted at the

BTA hearing, the BTA determined that Shinkle had provided proof of certain

defects, but had failed to offer sufficient evidence of value different from that

found by the county. Because Shinkle “failed to meet his affirmative burden

assigned on appeal,” the BTA concluded that “there exists an insufficient basis

upon which to alter the auditor’s and BOR’s determinations” with respect to the

five remaining parcels at issue. Accordingly, the board ordered dismissal of the

case as to the impound and trucking lot and adopted the values determined by the

BOR as to the other parcels.

Analysis

1. The requirement that the complaint state the amount of value at issue

runs to the core of procedural efficiency and is jurisdictional

{¶ 16} A property owner dissatisfied with the value assigned to his

property by the county auditor may contest that valuation by filing a complaint

pursuant to R.C. 5715.19(A)(1). When the complaint claims at least $17,500 of

overvaluation or undervaluation, R.C. 5715.19(B) requires the county auditor to

give notice of the filing of the complaint to certain entities. That notification

triggers the period within which the notified entity (in this case the school board)

may file a countercomplaint and become a party to the proceedings. Finally, R.C.

5715.19(D) explicitly sets forth the mandate that makes the required notification

possible: “Each complaint shall state the amount of overvaluation,

undervaluation, discriminatory valuation, illegal valuation, or incorrect

classification or determination upon which the complaint is based.”

{¶ 17} We have held that “[a]n appeal, the right to which is conferred by

statute, can be perfected only in the mode prescribed by statute,” and the

“exercise of the right conferred is conditioned upon compliance with the

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accompanying mandatory requirements.” Zier v. Bur. of Unemp. Comp., 151

Ohio St. 123, 84 N.E.2d 746 (1949), paragraph one of the syllabus; 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, ¶ 17 (“we have consistently treated full

compliance with R.C. 5715.19 as an indispensible prerequisite for the exercise of

jurisdiction by a board of revision”); compare Knickerbocker Properties, Inc.

XLII v. Delaware Cty. Bd. of Revision, 119 Ohio St.3d 233, 2008-Ohio-3192, 893

N.E.2d 457, ¶ 10 (incorrect taxpayer address on valuation complaint filed by

board of education not a jurisdictional defect because the statute does not require

that complaint state address). The reference to “mandatory requirements” in the

Zier syllabus points to the importance of distinguishing mandatory from directory

requirements. See 2200 Carnegie, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 135

Ohio St.3d 284, 2012-Ohio-5691, 986 N.E.2d 919, ¶ 26. To draw that distinction,

the case law asks whether the requirement at issue “ ‘runs to the core of

procedural efficiency.’ ” Id. at ¶ 24, quoting Salem Med. Arts & Dev. Corp. v.

Columbiana Cty. Bd. of Revision, 80 Ohio St.3d 621, 623, 687 N.E.2d 746

(1998); see also Akron Std. Div. of Eagle-Picher Industries, Inc. v. Lindley, 11

Ohio St.3d 10, 12, 462 N.E.2d 419 (1984). If it does, the requirement is

mandatory, and compliance is a jurisdictional prerequisite to pursuing the

administrative case.

{¶ 18} The requirement to state the amount of value on which the

complaint is based plainly runs to the core of procedural efficiency under R.C.

5715.19. R.C. 5715.19(D) specifically requires that the amount of overvaluation

or undervaluation be stated, and compliance with that mandate permits the auditor

to determine whether to send out a notice under R.C. 5715.19(B). That notice in

turn affords interested persons the right to become a party by filing a

countercomplaint.

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{¶ 19} More generally, the case law has usually treated a statutory

requirement as mandatory and hence jurisdictional when the requirement is (1)

imposed on the appellant itself and (2) relates to the informative content of the

document by which the administrative proceeding is instigated. See Zier at 126-

127 (requirement that notice of appeal from denial of unemployment

compensation “set forth the decision appealed from” held to be jurisdictional),

citing and relying on Am. Restaurant & Lunch Co. v. Glander, 147 Ohio St. 147,

70 N.E.2d 93 (1946) (both the requirement that the tax commissioner’s

determination be attached to the notice of appeal to the BTA and the requirement

that the notice specify the errors complained of are jurisdictional prerequisites);

compare Stanjim Co. v. Mahoning Cty. Bd. of Revision, 38 Ohio St.2d 233, 313

N.E.2d 14 (1974) (dismissal required when complainant failed to set forth reasons

for requested reduction in value) with Nucorp, Inc. v. Montgomery Cty. Bd. of

Revision, 64 Ohio St.2d 20, 412 N.E.2d 947 (1980) (complainant’s failure to

deliver certain required additional information 45 days after filing the complaint

did not require dismissal). By the same token, R.C. 5715.19(D)’s requirement

that the complainant state the amount of value at issue is jurisdictional here.

{¶ 20} Shinkle argues that a document that he attached to the complaint,

which furnished reasons for changing the value, sufficed to “put the Board of

Education on notice here.” But supplying a reason to change the value does not

equate to stating the amount of the change requested. Moreover, the omission of

an amount means that the auditor could not know whether to notify the school

board. As a result, the attachment to the complaint does not establish compliance

with the requirement that the amount itself be stated.

{¶ 21} Even though the school board actually did file a countercomplaint

in this case, that fact alone does not relieve Shinkle of the jurisdictional

consequences of his omission. It is true that in Knickerbocker, 119 Ohio St.3d

233, 2008-Ohio-3192, 893 N.E.2d 457, actual notice to the board of education did

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cure the auditor’s failure to send notice to the correct address, but that was

because there was no statutory obligation on the complainant to supply and use

the proper address. Id. at ¶ 12. By contrast, the statute here explicitly requires the

complainant to state the amount of value he is putting at issue—and only the

complainant can supply that information.

{¶ 22} For all these reasons, the requirement to state the amount of value

runs to the core of procedural efficiency and is therefore jurisdictional. As a

result, Shinkle’s failure to specify an amount in the complaint means that the

complaint failed to invoke the BOR’s jurisdiction. The BTA correctly held that

the complaint for the “impound, storage, and trucking” parcel should be

dismissed.

2. The BTA acted reasonably and lawfully by holding Shinkle to the burden of

proving a value different from that found by the county

{¶ 23} “The fair market value of property for tax purposes is a question of

fact, the determination of which is primarily within the province of the taxing

authorities, and this court will not disturb a decision of the Board of Tax Appeals

with respect to such valuation unless it affirmatively appears from the record that

such decision is unreasonable or unlawful.” Cuyahoga Cty. Bd. of Revision v.

Fodor, 15 Ohio St.2d 52, 239 N.E.2d 25 (1968), syllabus. Although the BTA is

responsible for determining factual issues, we “ ‘will not hesitate to reverse a

BTA decision that is based on an incorrect legal conclusion.’ ” Satullo v. Wilkins,

111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14, quoting Gahanna-

Jefferson Local School Dist. Bd. of Edn. v. Zaino, 93 Ohio St.3d 231, 232, 754

N.E.2d 789 (2001).

{¶ 24} In this case the BTA held that Shinkle, with respect to each of the

properties at issue, failed to meet his burden of proving a value different from that

found by the county. In so holding, the BTA correctly noted that “ ‘[w]hen cases

are appealed from a board of revision to the BTA, the burden of proof is on the

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appellant, whether it be a taxpayer or a board of education, to prove its right to an

increase [in] or a decrease from the value determined by the board of revision.’ ”

Shinkle v. Ashtabula Cty. Bd. of Revision, BTA Nos. 2008-K-1756 through 2008-

K-1761, 2012 WL 992339, *3, quoting Columbus City School Dist. Bd. of Edn. v.

Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564, 566, 740 N.E.2d 276 (2001).

By its nature, that burden calls for the BTA appellant to “ ‘come forward and

demonstrate that the value it advocates is a correct value.’ ” Shinkle at *3,

quoting EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d

1, 2005-Ohio-3096, 829 N.E.2d 686, ¶ 6. The BTA then proceeded to identify the

central flaw in Shinkle’s case: Shinkle pointed to defects that would tend to

depress the value of his properties, but did not offer affirmative proof of a value

different from that found by the county. Shinkle at *4-5.

{¶ 25} First we must decide whether the BTA acted reasonably and

lawfully in excluding appraisal reports prepared by Ronald Damon and in

discounting his testimony as an opinion of value. With respect to evaluating the

credibility of witnesses, the BTA exercises its discretion as the finder of fact, and

our review is constrained by the principle that “[a]bsent a showing of an abuse of

discretion, the BTA’s determination as to the credibility of witnesses and the

weight to be given to their testimony will not be reversed by this court.” EOP-BP

Tower at ¶ 14. Under that standard, Shinkle has the burden of showing that the

BTA’s attitude is unreasonable, arbitrary, or unconscionable. LTC Properties,

Inc. v. Licking Cty. Bd. of Revision, 133 Ohio St.3d 111, 2012-Ohio-3930, 976

N.E.2d 852, ¶ 13.

{¶ 26} We conclude that Shinkle has shown no abuse of discretion.

Damon’s credentials fall short of those that ordinarily qualify a witness to express

an expert opinion of value. First, he was not shown to possess any special

professional qualifications, such as a certification from the Division of Real Estate

and Professional Licensing of the Ohio Department of Commerce or a designation

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from the Appraisal Institute. Second, his educational background does not as a

general matter dictate a finding that he possessed the relevant expertise. Third,

his actual testimony did not demonstrate either a firm grasp of appraisal concepts

generally or a properly focused application of appraisal methods in valuing

Shinkle’s properties. We emphasize that we are not holding that any particular

credential or factor is a legal prerequisite; we hold only that the BTA did not

abuse its discretion in deciding not to regard Damon as a valuation expert in this

case.

{¶ 27} Next, we turn to whether Shinkle presented evidence apart from

Damon’s opinions that compelled the BTA to reach a determination different

from the one that it made.1 The standards are set forth in Colonial Village, Ltd. v.

Washington Cty. Bd. of Revision, 123 Ohio St.3d 268, 2009-Ohio-4975, 915

N.E.2d 1196. “The first rule is that the party challenging the board of revision’s

decision at the BTA has the burden of proof to establish its proposed value as the

value of the property.” Id. at ¶ 23. As a general matter, “[e]vidence of needed

repairs, or the cost of needed repairs, while a factor in arriving at true value, will

not alone prove true value.” Throckmorton v. Hamilton Cty. Bd. of Revision, 75

Ohio St.3d 227, 228, 661 N.E.2d 1095 (1996). As the BTA correctly observed,

Shinkle’s evidence pointed to defects without establishing an actual value.

{¶ 28} Finally, under Colonial Village, we must also consider whether the

BTA had a duty to perform an independent valuation, given that the evidence

1. Shinkle claims a due process violation, asserting that his appeal was “doomed to failure”

because of a “system which arrives at contrived values and is determined to maintain them.” We

find, however, no deprivation of due process on the record before us. As for the assigned values

being contrived, Ohio law sets forth the requirements to be followed in assessing real property, see

R.C. Chapters 5713 and 5715 and Ohio Adm.Code Chapter 5703-25, and Shinkle has not rebutted

the presumption that the auditor and the BOR fulfilled these legal duties, see Colonial Village, 123

Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d 1196, ¶ 31. With respect to claiming a reduced

value, Shinkle received the process that was due: he had two hearings, one at the BOR and one at

the BTA, but failed both times to present reliable and probative evidence in support of a specific

assertion of value.

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might tend to negate the county’s valuation. Colonial Village at ¶ 24-25.

However, whether Shinkle’s evidence did or did not negate the county’s valuation

is moot, because even if it did, the record plainly lacks sufficient evidence to

permit the BTA to perform such a valuation of its own. Id. at ¶ 25; Vandalia-

Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 130 Ohio

St.3d 291, 2011-Ohio-5078, 958 N.E.2d 131, ¶ 24. For that reason, the proper

course of action is exactly the one followed by the BTA: revert to the value found

by the county. Id., citing Simmons v. Cuyahoga Cty. Bd. of Revision, 81 Ohio

St.3d 47, 49, 689 N.E.2d 22 (1998).

Conclusion

{¶ 29} For the foregoing reasons, the BTA properly ordered dismissal of

Shinkle’s appeal of the case involving the impound, storage, and trucking lot, and

it acted reasonably and lawfully in adopting the BOR’s valuation with respect to

the other parcels. We therefore affirm the decision of the BTA.

Decision affirmed.

O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,

FRENCH, and O’NEILL, JJ., concur.

__________________

Robert S. Wynn, for appellant.

Britton, Smith, Peters & Kalail Co., L.P.A., Karrie M. Kalail, Michael E.

Stinn, and Peter T. Zawadski, for appellee Jefferson Area Local School District

Board of Education.

______________________

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