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Julia Realty, Ltd. v. Cuyahoga County Board of Revision

Supreme Court of Ohio

June 27, 2018

Julia Realty, Ltd., Appellant,
v.
Cuyahoga County Board of Revision et al., Appellees.

          Submitted April 10, 2018

          Appeal from the Board of Tax Appeals, Nos. 2015-657 and 2015-658.

          Jesse R. Mann, L.L.C., and Jesse R. Mann; and Aryeh I. Dori, for appellant.

          Michael C. O'Malley, Cuyahoga County Prosecuting Attorney, and Saundra Curtis-Patrick, Assistant Prosecuting Attorney, for appellees Cuyahoga County Board of Revision and Cuyahoga County Fiscal Officer.

          Brindza, McIntyre & Seed, L.L.P., and David H. Seed, for appellee Cleveland Municipal School District Board of Education.

          PER CURIAM.

         {¶ 1} This is a real-property tax case on appeal from the Board of Tax Appeals ("BTA"). Appellant, Julia Realty, Ltd., the property's owner, challenges the BTA's application of collateral estoppel to its continuing complaint for tax years 2013 and 2014.

         {¶ 2} In February 2013, Julia Realty purchased the property at issue through an auction sale for $367, 500. In its original complaint for tax year 2012 (a reappraisal year in Cuyahoga County), Julia Realty contended that the purchase price constituted the value of the property. Both appellee Cuyahoga County Board of Revision ("the BOR") and the BTA retained appellee Cuyahoga County fiscal officer's valuation of $1, 408, 700. In affirming the BOR's determination, the BTA relied on the then-recent decision of this court in Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, 141 Ohio St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086, and held that Julia Realty had not adequately demonstrated that the auction-sale price constituted the property's true value.

         {¶ 3} Julia Realty invoked the BOR's continuing-complaint jurisdiction for tax years 2013 and 2014 and presented additional evidence that the auction-sale price reflected the true value of the property. But appellee Cleveland Municipal School District Board of Education ("the BOE") argued that it was too late to present additional evidence regarding the nature of the sale, because Julia Realty was bound by the earlier determination for tax year 2012 that the sale was not at arm's length. The BOR agreed and retained the original value for tax years 2013 and 2014. On appeal, the BTA held that the doctrine of collateral estoppel applied, thereby barring Julia Realty from relitigating the arm's-length-sale issue on the continuing complaint. We hold that the BTA acted reasonably and lawfully in applying collateral estoppel, and we therefore affirm.

         I. Background

         {¶ 4} On April 1, 2013, Julia Realty filed a complaint challenging the 2012 reappraisal value determined by the fiscal officer, arguing that the purchase price of the property at an auction sale constituted its value. The BOE filed a countercomplaint. After conducting a hearing, the BOR decided to retain the fiscal officer's valuation, as the BOE had requested.

         {¶ 5} The BOR issued its decision on October 22, 2013, and Julia Realty appealed to the BTA on November 21, 2013. During the pendency of the BTA appeal, we issued our decision in Olentangy Local Schools, 141 Ohio St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086, in which we held that "R.C. 5713.04 establishes a presumption that a sale price from an auction is not evidence of a property's value" but the presumption "may be rebutted by evidence showing that the sale occurred at arm's length between typically motivated parties," id. at ¶ 40.

         {¶ 6} The BTA rendered its decision without holding a hearing; that decision was issued on February 2, 2015. BTA Nos. 2013-6048 and 2013-6049, 2015 WL 750599 (Feb. 2, 2015). Relying on Olentangy Local Schools, the BTA noted that the sale at issue involved an auction and that under Olentangy Local Schools, Julia Realty had the burden to show that the sale was at arm's length, which it failed to do. 2015 WL 750599 at *2. The BTA therefore affirmed the BOR's decision retaining the fiscal officer's original valuation.

         {¶ 7} Julia Realty did not appeal the BTA's decision, nor did it seek a rehearing with respect to the tax-year-2012 value. Instead, Julia Realty invoked the BOR's continuing-complaint jurisdiction for tax years 2013 and 2014 by sending request letters dated March 3 and 4, 2015, which were file-stamped as received on March 5 and 9, 2015. On May 13, 2015, the BOR held a hearing on the continuing complaint, at which Julia Realty presented the testimony of its principal regarding the circumstances of the sale plus some documentation regarding that transaction. The BOE argued that Julia Realty was precluded from relitigating the arm' s-length ...


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