The opinion
[Cite as Gides v. Cuyahoga Cty. Bd. of Revision, 2014-Ohio-4086.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 100830
MARY T. GIDES
PLAINTIFF-APPELLANT
vs.
CUYAHOGA COUNTY BOARD
OF REVISION, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Administrative Appeal from the
Ohio Board of Tax Appeals
Case Nos. 2013-865 and 2013-879
BEFORE: Celebrezze, P.J., Rocco, J., and Kilbane, J.
RELEASED AND JOURNALIZED: September 18, 2014
ATTORNEY FOR APPELLANT
David M. Lynch
David M. Lynch, Attorney at Law
333 Babbitt Road
Suite 333
Euclid, Ohio 44123
ATTORNEYS FOR APPELLEES
For Cuyahoga County Board of Revision
Timothy J. McGinty
Cuyahoga County Prosecutor
BY: Reno J. Oradini
Assistant Prosecuting Attorney
The Justice Center
1200 Ontario Street
Cleveland, Ohio 44113
For Euclid City School District Board of Education
Paul J. Deegan
Karrie M. Kalail
Sarah E. Kutscher
Britton, Smith, Peters & Kalail Co., L.P.A.
3 Summit Park Drive
Suite 400
Cleveland, Ohio 44131
FRANK D. CELEBREZZE, JR., P.J.:
{¶1} Appellant, Mary T. Gides, appeals the decision of the Ohio Board of Tax
Appeals (“BTA”), which affirmed the decision of the Cuyahoga County Board of
Revision (“BOR”) denying a change in value for an apartment building she owned.
Gides claims that the BTA erred by not according her evidence of value due weight or
rejecting the evidence. After a thorough review of the record and law, we affirm.
I. Factual and Procedural History
{¶2} Gides owned a multi-unit apartment building located at 19970 Euclid
Avenue, Euclid, Ohio, for a number of years. She believed the assessed value of the
building for real estate tax purposes was higher than the actual value given the condition
of the property and the rents she received. On March 30, 2012, she filed a complaint
against the valuation for the 2011 tax year with the BOR. The property was valued at
$225,800 by Cuyahoga County, and Gides sought a reduction in value to $80,000. The
Board of Education of the Euclid City School District (“Board of Education”) filed a
counter-complaint seeking to maintain the currently assessed value.
{¶3} The BOR conducted a hearing on March 19, 2013, which was attended by
Gides, her attorney, an attorney for the Board of Education, and a witness for Gides.
Gides submitted photographs that showed the deteriorating condition of the apartment
building. She also offered tax returns from 2007 through 2010 documenting income
derived from the building as well as a spreadsheet of rents for an unspecified period of
time. The BOR’s decision indicates that no evidence was introduced to establish that
the rents she received were comparable to rents received for similar properties, termed
market rental rates. The BOR also determined that Gides failed to state a capitalization
rate in determining the value of the building using an income-based appraisal. The BOR
determined that Gides had not met her burden of demonstrating that the assessed value
was inaccurate. It therefore affirmed the value of $225,800 in a decision issued April 1,
2013. The BOR indicated, “[t]his decision was based on either; [sic] insufficient
evidence, evidence didn’t support a value change, testimony didn’t support opinion of
value, taxpayer and or witnesses could not be cross-examined.”
{¶4} Gides appealed the decision to the BTA on April 19, 2013. She filed a brief
in support on December 3, 2013. Appearance before the BTA was waived by the
parties, and the BTA determined the issues on the briefs and the administrative record
before it, along with a supplement to the record Gides filed with her brief. The BTA
issued a four-page opinion on December 5, 2013, upholding the decision of the BOR.
The BTA determined that the method of valuation used by Gides could not be relied on.
Gides’s use of an income valuation method to arrive at a fair market value for the
property did not include evidence that the rents received were comparable to market rents.
Further, the BTA determined that Gides did not apply a capitalization rate to the
purported net operating income to derive a value for the property. Finally, the BTA
addressed the photographs submitted by Gides, which documented the decrepit condition
of the building. The BTA found that there was no supporting testimony documenting
how the condition of the building affected its value. Without such testimony, it is mere
speculation as to how any defect in the building affected its value. The BTA determined
that “there exists an insufficient basis upon which to alter the fiscal officer’s original
assessment of the property and the [BOR’s] confirmation thereof.”
{¶5} Gides appealed the BTA’s determination to this court, assigning one error for
review:
I. The Board of Tax Appeals committed error in not accepting as evidence
of value as reflected by the condition of the property along with the rents
received.
II. Law and Analysis
A. Jurisdiction
{¶6} Before addressing the merits of the instant appeal, appellees, the Board of
Education, the Cuyahoga County Fiscal Officer, and the BOR, argue that this court lacks
jurisdiction because Gides did not name the tax commissioner as a party to the appeal.
{¶7} R.C. 5717.04 gives a party the right to appeal the decision of the BTA to the
Ohio Supreme Court or the appellate court in the appropriate jurisdiction. It states, “the
proceeding to obtain a reversal, vacation, or modification of a decision of the board of tax
appeals shall be by appeal to the supreme court or the court of appeals for the county in
which the property taxed is situated or in which the taxpayer resides.” The statute goes
on to impose several requirements necessary to perfect an appeal. One such requirement
states that “[i]n all such appeals the tax commissioner or all persons to whom the decision
of the board appealed from is required by such section to be sent, other than the appellant,
shall be made appellees.” Former R.C. 5717.04. Appellees point out that the tax
commissioner was not named as an appellee in the present action, and therefore, this court
lacks jurisdiction.
{¶8} “[W]hen the right to appeal is conferred by statute, an appeal can be perfected
only in the manner prescribed by the applicable statute.” Welsh Dev. Co. v. Warren, 128
Ohio St.3d 471, 2011-Ohio-1604, 946 N.E.2d 215, ¶ 14. These requirements are
jurisdictional in nature, and a failure to fulfill any one will require this court to dismiss
the appeal. A.K.J., Inc. v. Wilkins, 8th Dist. Cuyahoga No. 94594, 2011-Ohio-99.
{¶9} The Ohio Supreme Court has mandated strict compliance with these rules in
order to perfect an appeal. A. Schulman, Inc. v. Wilkins, 112 Ohio St.3d 1208,
2006-Ohio-6677, 859 N.E.2d 553. However, the court has further explained these
requirements and limited jurisdictional prerequisites to those that “run to the core of
procedural efficiency.” Akron Std. Div. of Eagle-Picher Indus., Inc. v. Lindley, 11 Ohio
St.3d 10, 12, 462 N.E.2d 419 (1984). In order to comply with the service requirements
of R.C. 5717.04, the court held, “[r]eading R.C. 5717.03 with former R.C. 5717.04: an
appellant must join as an appellee and serve the appeal on (i) all parties to the BTA
appeal (other than the appellant itself), (ii) the owner if the owner was not a party, (iii) the
county auditor, and (iv) the tax commissioner.” Mason City School Dist. Bd. of Edn. v.
Warren Cty. Bd. of Revision, 138 Ohio St.3d 153, 2014-Ohio-104, 4 N.E.3d 1027, ¶ 16.
But the court recognized that the failure to name the tax commissioner as an appellee was
not fatal:
In Olympic Steel [Inc. v. Cuyahoga Cty. Bd. of Revision, 110 Ohio St.3d
1242, 2006-Ohio-4091, 852 N.E.2d 178], we held that the “appellant’s
failure in this case to comply with its statutory obligation to serve the notice
of appeal on the Tax Commissioner in the prescribed manner deprives this
court of jurisdiction to consider the appeal.” After Olympic Steel, the
court held that the service must be initiated within the time for filing an
appeal. Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of
Revision, 111 Ohio St.3d 1219, 2006-Ohio-5601, 857 N.E.2d 145, ¶ 2.
We have also held that identifying a party as an appellee in the notice of
appeal is not a jurisdictional requirement; it is jurisdictionally sufficient if
the party is served. HK New Plan Exchange Property Owner II, L.L.C v.
Hamilton Cty. Bd. of Revision, 121 Ohio St.3d 1224, 2009-Ohio-1110, 903
N.E.2d 643, ¶ 2.
Id. at ¶ 17.
{¶10} In the present case, Gides indicated in the certificate of service attached to
her notice of appeal that, while she did not name the tax commissioner as an appellee, she
did serve the commissioner via certified mail. Based on Mason City, it is adequate to
serve the commissioner to invoke the jurisdiction of the court. However, appellees
claim that the address Gides used for service was not the proper address for the tax
commissioner. Appellees point to a state of Ohio website that lists a different address
for certified mail for the tax commissioner. However, there is no evidence of the proper
address at the time the notice of appeal was filed. Appellees failed to file a motion to
dismiss where such issues could have been properly examined and the record
supplemented. Therefore, the only evidence before this court is a certificate professing
that the tax commissioner was properly served. Based on the above case law and the
facts of this case, this court has jurisdiction to entertain the merits of the present appeal.
B. Valuation
{¶11} Gides argues that the BTA erred when it did not accept her evidence of
value and reduce the appraised value of the property accordingly.
{¶12} “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 * * *.”
Cuyahoga Cty. Bd. of Revision v. Fodor, 15 Ohio St.2d 52, 239 N.E.2d 25 (1968), at the
syllabus. An appellate court reviews a decision of the BTA to determine whether it is
reasonable and lawful. R.C. 5717.04; HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision,
124 Ohio St.3d 481, 2010-Ohio-687, 923 N.E.2d 1144, ¶ 13. Therefore, this court will
defer to the BTA’s determinations of factual issues where those decisions are supported
in the record by reliable and probative evidence. Strongsville Bd. of Edn. v. Wilkins, 108
Ohio St.3d 115, 2006-Ohio-248, 841 N.E.2d 303, ¶ 7. The burden of demonstrating a
valuation different from the current assessed value rests solely on the party seeking a
change in value. Bd. of Edn. of the Columbus City School Dist. v. Franklin Cty. Bd. of
Revision, 90 Ohio St.3d 564, 566, 740 N.E.2d 276 (2001). In the absence of supporting
evidence, the valuation adduced by the taxing authority will be maintained.
{¶13} The best evidence of value is a recent, arm’s-length sale — the price arrived
at by a willing purchaser and willing seller. But “in the absence of a current sale of
property, true value in money may be determined by appraisal, utilizing the market
approach to value [sales-comparison approach], the income approach or the cost
approach.” Springfield Local Bd. of Edn. v. Summit Cty. Bd. of Revision, 68 Ohio St.3d
493, 494, 628 N.E.2d 1365 (1994). See also Ohio Adm.Code 5703-25-07. These
recognized methods of estimating the value of real property have been described as
follows:
(1) the income-capitalization approach * * * focuses on a property’s
capacity to generate income for the owner, (2) the sales-comparison
approach * * * focuses on the prices of comparable properties that have
changed hands recently, and (3) the cost approach * * * focuses on the cost
of replacing the improvements on the property.
Cambridge Commons Ltd. Partnership v. Guernsey Cty. Bd. of Revision, 106 Ohio St.3d
27, 2005-Ohio-3558, 830 N.E.2d 1147, ¶ 6. The Ohio Administrative Code further
describes the process of evaluating valuation based on the income approach:
The value is estimated by capitalizing the net income after expenses,
including normal vacancies and credit losses. While the contract rental or
lease of a given property is to be considered the current economic rent
should be given weight. Expenses should be examined for extraordinary
items. In making appraisals by the income approach for tax purposes in
Ohio provision for expenses for real property taxes should be made by
calculating the effective tax rate in the given tax district as defined in
paragraph (E) of rule 5703-25-05 of the Administrative Code, and adding
the result to the basic interest and capitalization rate[.] Interest and
capitalization rates should be determined from market data allowing for
current returns on mortgages and equities. The income approach should be
used for any type of property where rental income or income attributed to
the real property is a major factor in determining value. The value should
consider both the value of the leased fee and the leasehold.
Ohio Adm.Code 5703-25-07.
{¶14} As the BOR and the BTA pointed out in their decisions, Gides did not
perform a proper income-capitalization appraisal in arriving at her proposed value of
$80,000. No capitalization rate was set forth and no evidence was adduced to support
that her rental rates were similar to market rates.
{¶15} This case is distinguishable from others where the record contained
adequate information for the BTA to undertake an independent assessment of value.
See, e.g., Colonial Village, Ltd. v. Washington Cty. Bd. of Revision, 114 Ohio St.3d 493,
2007-Ohio-4641, 873 N.E.2d 298. There, the Ohio Supreme Court held that
the record in this case contains sufficient evidence to trigger the BTA’s duty
to undertake an independent valuation of the property. Our cases that
address subsidized housing emphasize the propriety of an income approach
calculated with “due regard for market rent and current returns on
mortgages and equities.” Alliance Towers [Ltd. v. Stark Cty. Bd. of
Revision], 37 Ohio St.3d 16, 523 N.E.2d 826, paragraph two of the syllabus.
The record contains ample information for the BTA to “determine the
taxable value of the property.” See R.C. 5717.03.
Id. at ¶ 24.
{¶16} Here, Gides did not provide the necessary evidence for the BTA to arrive at
an accurate valuation. Her single-page, sparsely populated spreadsheet offered in
support of her proposed value of $80,000 stated she received $47,101 in rents for an
unspecified period of time. It then listed subtractions for various general categories of
expenses and arrived at a generated income for an unspecified period of time of
$3,158.20. This does not offer sufficient data to arrive at a proper valuation using the
income capitalization method, and Gides did not offer any alternate methods of valuation.
“‘In the absence of probative evidence of a lower value,’ a county board of revision and
the BTA ‘are justified in fixing the value at the amount assessed by the county auditor.’”
Cambridge Commons Ltd. Partnership, 106 Ohio St.3d 27, 2005-Ohio-3558, 830 N.E.2d
1147, at ¶ 13, quoting Salem Med. Arts & Dev. Corp. v. Columbiana Cty. Bd. of Revision,
82 Ohio St.3d 193, 195, 694 N.E.2d 1324 (1998).
{¶17} The photographs Gides submitted are similarly deficient. Without
testimony to establish how the defects represented in the photographs affect value, there
is no basis to determine that the value of the property is less than that currently assessed.
See Throckmorton v. Hamilton Cty. Bd. of Revision, 75 Ohio St.3d 227, 661 N.E.2d 1095
(1996).
III. Conclusion
{¶18} The BTA did accept the evidence Gides submitted, but that evidence was
inadequate to support her claimed value of $80,000. The inadequacies were correctly
identified by the BTA, and it properly affirmed the decision of the BOR.
{¶19} Judgment affirmed.
It is ordered that appellees recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the Ohio Board of Tax Appeals to
carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., PRESIDING JUDGE
KENNETH A. ROCCO, J., and
MARY EILEEN KILBANE, J., CONCUR