Court of Appeals of Ohio, Eleventh District, Lake
Appeals from the Ohio Board of Tax Appeals. Case Nos.
2016-1023, 2016-1024, 2016-1025, & 2016-1026.
E Petkovic, (For Appellee Wickliffe City Schools Board of
Charles E Coulson, Lake County Prosecutor, and Eric A.
Condon, Assistant Prosecutor, Lake County Administration
Building, (For Appellee Lake County Board of Revision).
V. Anselmo, James Kieran Jennings, III, and Cecilia Ji-Yun
Hyun, Siegel Jennings Co., LPA, (For Appellant).
TIMOTHY P. CANNON, J.
Appellant, Lubrizol Corporation ("Lubrizol"),
appeals from the decision and order of the Ohio Board of Tax
Appeals, reversing the decisions of the Lake County Board of
Revision regarding the valuation of real property owned by
Lubrizol in Wickliffe, Ohio, for purposes of assessing
property taxes. Four parcels of property are the subject of
this matter: 29-A-004-0-00-0005-0 ("Parcel 1");
29-A-002-W-00-005-0 ("Parcel 2");
29-A-002-S-00-011-0 ("Parcel 3"); and
29-A-002-S-00-010-0 ("Parcel 4"). The decision and
order of the Board of Tax Appeals is affirmed.
The four parcels of property were assessed, for tax year
2015, at $82, 100.00; $171, 070.00; $188, 650.00; and $122,
780.00. On March 28, 2016, appellee, Wickliffe City Schools
Board of Education, filed separate complaints with the Board
of Revision seeking increases in the valuations to $200,
000.00; $360, 000.00; $550, 000.00; and $565, 000.00. In each
of the complaints, the Board of Education asserted the
requested change in value was justified due to the amounts of
recent arm's-length sales.
No counter-complaint was filed; however, counsel for and a
representative of Lubrizol appeared at the Board of Revision
At the hearings, the Board of Education submitted deeds and
conveyance fee statements reflecting the recent transfer of
each parcel. For Parcel 1, the documentation reflected a
transfer from William Sopko & Sons Co., Inc. to Lubrizol
for $200, 000.00 on December 1, 2015. For Parcel 2, the
documentation reflected a transfer from EK North Creek, LLC
to Lubrizol for $360, 000.00 on December 21, 2015. For Parcel
3, the documentation reflected a transfer from Terrence P.
Chubb to Lubrizol for $550, 000.00 on October 26, 2015. For
Parcel 4, the documentation reflected a transfer from Mario
Raguz to Lubrizol for $565, 000.00 on December 21, 2015.
Counsel for Lubrizol stated it was not challenging the
recentness or arm's-length nature of any of these
transactions. Rather, Lubrizol argued that using recent
arm's-length sales to determine value is discretionary
under R.C. 5713.03 and that the transactions do not reflect
the best evidence of valuation because the corporation was
motivated to purchase the properties by a self-imposed
"civic duty" to create "green space" for
the city. Lubrizol also advanced an argument that relying on
the recent sale prices would violate the uniformity clause of
the Ohio Constitution: in other words, it argued, "by
utilizing these atypically motivated sales, the assessment on
these properties will be hundreds of percentages higher than
other like type assessed properties."
Mark Sutherland, Lubrizol's corporate vice president in
charge of global communications and global affairs, testified
that Parcel 1 was the only parcel listed for sale at the time
of purchase; no appraisals were performed to determine
purchase prices; no restrictions relating to the
corporation's alleged intent to create "green
space" are currently contained in any of the deeds; and
no substantial improvements have been made to any of the
parcels since the time of purchase. Mr. Sutherland further
testified that Lubrizol was willing to "pay a
premium" price for the parcels; purchase prices were
negotiated on a case-by-case basis by a broker openly
representing Lubrizol; and there was no compelling need to
acquire the parcels within a certain time frame.
The Board of Revision issued decisions on June 23, 2016,
maintaining the initial assessed valuation of each parcel. In
each decision it stated: "The complainant bears the
burden of proving that the requested valuation is the true
value of the subject property. That burden was not
sufficiently proven at the hearing. Therefore, it is the
decision of the Lake County Board of Revision that the value
of the above-referenced property will not be changed."
The Board of Education appealed these decisions to the Board
of Tax Appeals on July 20, 2016, and the appeals were
consolidated for review. The parties jointly waived a hearing
and submitted written arguments. The Board of Education
maintained their initial argument that the arm's-length
transactions constitute the best evidence of valuation for
the purposes of assessing property taxes. Lubrizol contended
those sales are unreliable indications of value because they
were not generally exposed to the open market and because the
parties were not typically-motivated market participants in
that they did not act in their own self-interest.
The Board of Tax Appeals issued a decision and order on
September 27, 2017, in which it rejected Lubrizol's
argument that the sale prices are unreliable because they
were not exposed to the open market. It further found
Lubrizol's contention that the parties were not typically
motivated and did not act in their own self-interest was
without merit due to lack of evidence. To the contrary, the
Board of Tax Appeals found, "a close review of the
record reveals that this was simply a situation where a