Ei;:,, ED. C Lf;; RG^ ^F 0 0 s, RT ^^^REUIL-0J^^^^^^ 01'r OHIO IN THE SUPREME COURT OF OHIO APPLE GROUP LTD., CASE NO

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^j ^ L. ^ +i:1 ^^G '^'^vff(^ ^. IN THE SUPREME COURT OF OHIO APPLE GROUP LTD., CASE NO vs- Appellant, Appeal from the Ohio Board of Tax Appeals MEDINA COUNTY BOARD OF REVISION, MEDINA COUNTY AUDITOR AND JOSEPH W. TESTA, TAX COMMISSIONER OF 0I-I1O, Board of Tax Appeals Case No K-2101 Appellees. APPENDIX TO APPELLANT APPLE GROUP LTD.'S MERIT BRIEF Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernsch.midt # Stephen M. Nowak # KAREN H. BAUERNSCHMIDT CO., LPA 1370 West 6^' Street, Suite 200 Cleveland, Ohio T: (216) / F: (216) com Attorneys for Appellant Apple Group Ltd. Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH T: (614) / F: (614) Tax Commissioner of Ohio Ei;:,, ED David J. Folk (Counsel o.frecord) Medina County Assistant Prosecutor 72 Public Square Medina, OI-i T: (330) / F: (330) dfolk tvznedi:naco.org Attorneys for Appellees Medina County Board of Revision and County Auditor JON 1 V. 2013J$ CLE'R K +.,^`s F ^^' ^i`.^ I, ^^T ^%6i f'4g Ef3f 00,UI R3 OF 01 ff, 3,f C Lf;; RG^ ^F 0 0 s, RT ^^^REUIL-0J^^^^^^ 01'r OHIO APPENDIX (Separately Numbered) The date-stamped notice of appeal to the Supreme Court....1 The Medina County Board of Revision decisions...... The Board of Tax Appeals decision Statutes....,...30 Certificatc of Service ...37 iii IN THE SUPREME COURT OF OHIO APPLE GROUP LTD., CASE NO. Appellant, Appeal from the Ohio Board of Tax Appeals MEDINA COUNTY BOARD OF REVISION, MEDINA COUNTY AUDITOR AND JOSEPH W TESTA, TAX COMMISSIONER OF OHIO, Board of Tax Appeals Case No K Appelfees. NOTICE OF APPEAL Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # KAREN H. BAUERNSCHMIDT CO., LPA 1370 West 6th Street, Suite 200 Cleveland, Ohio T: (216) I F: (216) Attorneys for Appellant Apple Group Ltd David J. Folk (Counsel of Record) Medina County Assistant Prosecutor 72 Public Square Medina, OH T: (330) / F: (330) Attorneys for Appellees Medina County Board of Revision and County Auditor Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH T: (614) i F: (614) Tax Commissioner of Ohio ^L[.Ry, O'^ ^ONi.. ^P. M E. 0 0 U RT Q -vs- -1- NOTICE OF APPEAL OF APPELLANTS Appellant Apple Group Ltd. hereby gives notice of its appeal as of right under R.C to the Supreme Court of Ohio from a Decision and Order of the Board of Tax Appeals, journalized in Case No K-2101 on December 28, A true copy of the Decision and Order of the Board being appealed is attached hereto as Exhibit A and incorporated herein by reference. Appellant complain of the following errors in the Decision and Order of the Board of Tax Appeals: 1: The decision of the Board of Tax Appeals is unreasonable and unlawful since it is inconsistent with the BTA's holding and factional analysis in a companion appeal in Apple Group Ltd. vs. Medina County Board of Revision, et al., (December 28, 2012) BTA Case No, 2009-K : The Board of Tax Appeals erred in rejecting the Property Owner's appraisal evidence as a result the decision is unreasonable and unlawful. 3: The Board of Tax Appeals' decision is unreasonable and unlawful for the reason that the Board of Tax Appeals disregarded the Property Owner's expert witness' testimony from the abbreviated hearing before Board of Tax Appeals. 4: The decision of the Board of Tax Appeals was unreasonable and unlawful since it failed to consider intervening facts personally verified by the Property Owner's appraiser, which impacted the value of the property. 5: The Board of Tax Appeals erred in determining that the Appellant failed to present competent and probative evidence of value for the tax years at issue, as a result of the Board of Tax Appeals' decision is unreasonable and unlawful. 6: The Board of Tax Appeals' failure to recognize the downturn in the economy and resulting reduction in values since 2008, is contrary to the evidence in the record. 7: The Board of Tax Appeals erred when it failed to recognize that the sales data in the Racek appraisal report clearly demonstrated a decline in the value of residential sublots. 8: The Board of Tax Appeals erred in determining that two sublot sales that occurred in July of 2007 (18 months prior to tax lien date) and August of 2008 (5 months prior to tax lien date) are the best evidence of value for tax year 2009 and disregarded more recent sublot sales from August 2009 (8 months after tax lien date) and December 2009 (12 months tax lien date). -2- 9: The Board of Tax Appeals erred when it failed to determine a separate value for tax year 2009, where the sales data closest to this tax lien date demonstrated that the Auditor's 2009 value was incorrect, as a result the decision is unreasonable and unlawful. 10: The Board of Tax Appeals erred in not determining a value for tax year 2010 since the 2008 tax complaint was a continuing complaint under R.C : The Board of Tax Appeals erred in their assumptions of the nature of nearby subdivisions, which resulted in the failure to consider sublot sales from nearby subdivisions that were owned and developed by the same developer as the subject property. 12: The Board of Tax Appeals' decision made assumptions of the strength of competing subdivisions that were not based upon evidence in the record. 13: The Board of Tax Appeals' decision and order is not supported by the record and therefore is unreasonable and unlawful. 14: The decision of the Board of Tax Appeals is unreasonable and unlawful since the findings of fact and conclusions of law are against the manifest weight of the evidence. 15: The Board of Tax Appeals' decision violates the Property Owner's right to due process under the Ohio and U.S. Constitution and as a result is unreasonable and unlawful. 16: The Board of Tax Appeals' decision violates the Property Owner's right to equal protection under the law and is therefore unreasonable and unlawful. Appellant requests that the Court reverse the unreasonable and unlawfu! decision of the Board of Tax Appeals and remand the matter to the Board of Tax Appeals to issue an Order for the Board of Tax Appeals to determine a value consistent with the Richard G. Racek, Jr., MAI's appraisal. Respectfully submitted, Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M, Nowak # Richard A. Morehouse # Attorneys for Appellant -3- PROOF OF SERVICE i hereby certify that a copy of this Notice of Appeal was sent this 24th day of January, 2013 by certified mail, return receipt requested to: David J. Folk Medina County Assistant Prosecutor 72 Public Square Medina, OH Aftorney for Appellees Medina County Board of Revision and Medina County Auditor Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH Tax Commissioner of Ohio Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # Attorneys for Appellant -4- OHIO BOARD OF TAX APPEALS Appic Group Ltd., CASE NO K-2101 Appellant, (REAL PROPERTY T AX ) vs. DECISION AND ORDER Medina County Board of Revision and Medina Coutity Auditor, APPEARANCES: Appellees. For the Appellant - Karen H. Bauernschinidt Co., LPA Property Owner Karen H. Bauemchmidt 1370 West 6`h Street, Suite 200 Cleve,and, Ohio For the County - Dean Hofman Appellees Medina County Prosecuting Attorney David J. Folk Assistatrt Prosecutinc, Attorney 72 Public Square Medina, Ohio Entered ^^^ 2 ti 202 Ms. Margulies, Mr. Johrendt, and Mr. Wil'iiamson concur. Through its appeal, appellant challenges decisions issued by the Medina County Board of I'^evision ( `BC3R ) involvin^ the valuation of a nu^.nber of individual parcels for ad valorem tax purposes for tax year This matter is considered upon appellant's notice of appeal, the transcript certified by the BOR pursuant to R.C , arid the record of this board's hearing. The subject parcels, consisting of 13 unimproved lots, are located in a 57-11ot residcmtial development l;nown as the Trophy Club subdivision in Medina rf'own5hip betavcen the cities of Medina and Brunswick, Ohio. For tax year 2008, the auditor assessed the subject parcels as follows: EXNlBIT A _ ^ _ I Parcel Nos, 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , y 26-06B , 26-06B , and 26-06B Land Building I'otal TRUE VALUE $105,000 0 $105,000 T_A.XABT E iralue Land $36,750 Building. 0 Total $36,750 Pursuant to R.C (A), appellant filed a complaint with the BOR requesting that the true and taxable values of the parcels be reduced to $65,000 and 22,750, respectively. During the BOR's hearing, Sandy Simich, identified in other proceedings as one of appellant's owners, testified that the parcels in question coanprzsed phase three, the least desirable phase of the residential developnzent, consisting of opezi meadow lots as compared with wooded lots or ones on a ravine. She went on to explain that as the economy took a downturn, sales decreased from their high, circa $125,000 to $129,000, in phases one and two in Simich testified that the only sale occzarrizig in 2007 was sub-lot 55 which sold in July for $105,000, that no parcels from phase three sold in 2008, azid that another sale was pending as of the BOR's hearing in August 2009 for $73,000. Siinich requested that the BOR reduce the parcels' true values to $65,000, anticipatii3g the iernaininb lots vrould be sold to one potential ptirchaser. The BOR. subseqiiently issued decisions retaining the atiditor's values aiid from these decisions, appellant filed the present appeal, basing its ` value claims upon the written appraisal and testirriony of Richard G: Racek, Jr.; MIA,I. When cases are appealed from a board of xevision to the BTA, tlie btirden of proof is on the appellant, `vhether it be ataxpayer or a board of edittation, to prove its right to an increase [in] or decrease from the value deterrnined by the board of revision. Columbzis City School Dist. I3cl: of Edn. v, Franklin Cty. I3d. of Revision (2001), 90 Ohio St.3d 564, 566..? _6 `I'ypically, the best evidence of a property's ^,^alue isthe aliiouirt for which it has transferred bet-ween two unrelated parties near tax lien date. See, e.g,, Berea City Scliool Dist. I3d, of Edn. v. Cuyahoga Cty. Bd. of Rcvision, 106 Ohio St.3d 269, 2005-C0hio See, also, R.C t-lowever, as is the case in the present appeal, such information is not usually available, and thusan appraisal becomes necessary. State ex r-e1. Park Invest. Co. v. I3d.of Tax Appeats (1964), 175 Ohio St. 410, 412. Since the lots in issue have not recently transferred, appellant heeded the court's adnlonition, and offered into evidence the testiznony and written appraisal prepared by Racek for not only the tax year originally coir,pluiried of, i.e., 2008, but also tax years 2009 and FZacek described the declining condition of the residential real estate market and the impact it has had upon sales of undeveloped lots within the Trophy Club subdivision. Referring to a study tracking housing starts,' Racek testified: [I]n Medina County, you'll notice that the - the housing starts in 2005 Nvere approxiinately 1,214 units. That has declined substantially to about 501 units in It's hopefully well known that the housing -- the housing construction and housing market, as a whole, started tc decline far before the coi-uilercial and industrial market started to decline in late 2008, early So by the time we got to 2008, the effective date of this analysis, the hoi.rsing market was already in a - iri a large decline. In 2005, there «as a h.igh of 74 permits pulled in the township. f'hat's declined to about 14 permits in 2008, which would be a decline of about 81 percent HR. at i lie docurrient to vvliicl3 Racek made s-efez-ence discloses that tlew liousing in Medina Countytivas 1,214 in 2005, 903 in 2006, 691 ir^ 2007, and 501 in See I:x. i, at In developing his opinion of value, Racek relied exclusively upon the sales comparison approach, focusirig on eight sales within the same subdivision as the subject parcels and seven sales of parcels in subdivisions in close geographic proximity to the development in question which he considered substantially similar to the Trophy Club subdivision: Sale SaleP- 1 Sale #2 Sale #3 Sale #4 Sale 95 Sale #6 Sale #r7 Sale #8 Sale #9 Sale 4 10 Sale #11 Sale #12 Sale#13 Sale #14 Sale 4'15 Location Trophy Club Trophy Club Trophy Club 'frophy Club 'I'rophy Club Trophy Club Trophy Club Trophy Club Tamarind Meadows Tamarind Meadows Morning Star Morning Star Morning Star Canterbury Farm Canterbury Farm Date of Sale 7/26/07 8/27/08 8/14/09 12/30/09 4/8f'10 9/7/10 12/8/ 1 i 12/27/11 8/25/08 12/29/08 2/25/08 6/1? /08 11/18/08 12/8/08 12/5/08 Sale Price $105,000 $110,000 $73,500 $75,000 $82,000 $70,000 $67,500 $59,000 $77,000 $84,500 $92,000 $90,000 $85,000 $81,500 $81,500 Based upon the foregoing sales, Racek ultimately reasoned as follows: After reviewing the actual sales which occurred within the Trophy Club Stibdivision as well as comparing them to recent sales of similarly sized sublots in competing subdivisi.ons, it is estimated that the market value of individual sublots would be say $85,000 as of January 1, Given the decline in property values which occurred after tax lien date, it is further estimated that the individual sublots could support a market vaiue of say $75,000 per lots as of January 1, 2009 and January 1, 2010. Ex. 1 at 29. Although the county appellees presented no additional evidence of value, electing to rely upon counsel's cross-examination of appellant's expert, they argued that 4 -^- anpellan't's evidence actually supports the auditor's assessed values, citin^ tc) the sales with the 1'rophSj Club subdivision occurring nearer the tax lien dates. We a^ree. In EOP-BP Towel', L. L. C. v. Cuy ahcga Cty. Bd. of Revision, 106 Qhio St.3d 1, 2005-C)hio-3096, the Supreme Court made the foilowing observation: When real-property valuation cases a.re appealed from a board of revision to the BTA, the burder^ is on the appellant to prove his or her right to ari increase or decrease in the value determined by the board of revision. Cleveland Bd, ofedn. v. Cuyalzoga Cty. I3cl. of Revision ( 1994), 68 Ohio St.3d 336, ***. In order to meet that burden, the appellant must come forward and demonstrate that the value it advocates is a correct value. Once competent and probative evidence of value is presented by the appellant, the appellee who opposes that valuation has the oppozfz.inity to challencye it ti-nrough crossexamination or by evidence of another value. Snf-ingfield Local.Bd of Edn. v. Sr.arnmit Cty. Bd. of Revision (1994), 68 Ohio St.3d 493, ***. The appellee also has a choice to do nothing. However, the appeliant is not entitled to the valuation claimed merely because no evidence is adduced opposinc, that claim. W. Industt ies,.inc. v. Hamilton Cty. Bcl of Revision (1960), 170 Ohio St. 340, 342, Id. at W-6. While appellazit's appraiser testified regardin^ a general decline in the residential real estate market, as well as a downturn in the constrliction of new homes from 2005 throuq-h 2008, his sales data sugaests that sales within the subject subdivision did not begin to reflect lesser trazisfer amourlts until third quarter Although sales data in other subdivisions reflect lower sales prices earlier than the Trophy Club subdivision, this may speak to the stren;th of that particular residential community, Sales occurring nearest tax years 2008 and 2009 in the Trophy Club subdivision, i.e., Jul^r 26, 2007 sale for $105,000 and August 27, 2008 sale f.^.^r $110,000, are consistent with a1icl supportive of the auditor's valuation of 5-9- $105,000.' Cf. IID Dev. v. Cuyahoga Cty. Bd. of 1Zevision (3uly 17, 2012), BTA Nos , et al.; unreported appeal pending Sup. Ct. No Accordingly, we conclude appellant has failed to meet its affirmative biarden on appeal.3 Where the BTA rejects the evidence presented to it as not being competent and probative, or not credible; and there is no evidence from which the BTA. can gndependently determine value, it itiay approve the board of revision's valuation, without the board of revision's presenting any evidence. isimnlon.s v. Cuyahoga Cty. Bd. of Revision (1998), 81 Ohio St.3d 47; 49. We therefore fnd the vaiues of the subject parcels, i,e,, parcel numbers 26-06B , 26-06B , 26-06B , 26-06B-11=054, 26-06B , 26-06B , , 26-06B , 26-06B , 26-06B ; 26-06B , , and 26-06B ; to be as follows: RUE VAI.,Ur, Land Buildinc, 0 Total $105,000 It^XABLE VALUE Land $36,750 Building 0 Total ^36;750 It is therefore the order of this board that the Medina County Auditor list and assess the subject properties in conformity with the decision as announced herein. 2 While Simich testified before the BOR that the quality of parcels diffcred during the various phases of developrnent of the Trophy Club subdivision, appellant's expert highlighted no such di stinction. 3 Appellant had requested that this board render value deterrninations for tax years 2008, 2009, and the first two years beizl; the lattet`portion of a sexenaial reappraisal conducted in Medina County, while 2010 is the first year of the subsequent triennial update. See; generally, R.C, (B), , and In our decision, ^ve have found appeilant's evidence insufficient to support the requested a.djustments for tat years 2008 and As for tax year 2010; the transcript eertified bytlie BOR doe I s not contain information for that tax year, one in which the auditor would have establisheditew values. See, generally, 4ERC Saw Mi11 Village, Iric. v. Franklin Ctt?. T.3ci. of Revision, 127 Ohio St.3c1 44, 20I0-Ohio-4468, ^119. Under the circumstances presented herein, to the extent appellant challenges values ascribed for tax year 2010, we coiiclude the better course is to direct it to first present its evidence of value to the t3oit, Id. at T a- I hereby certify the f'oreyjoing to be a true and complete copy of the action taken by the Board of Tax Appeals of the State of Ohio and entered upon its jounzal t[iis day, with respect to the captioried matter. Sally F. Var, Meter, Board Secretary THE SUPREME COURT OF OHIO APPLE GROUP LTD., CASE NO. Appellant, Appeal from the Ohio Board of Tax Appeals MEDINA COUNTY BOARD OF REVISION, MEDINA COUNTY AUDITOR AND JOSEPH W TESTA, TAX COMMISSIONER OF OHIO, Board of Tax Appeals Case No K Appellees. PROOF OF FILING TO THE CLERK OF THE SUPREME COURT OF OHIO: Pursuant to R.C , Appellant Apple Group Ltd. hereby certify that a copy of the Notice of Appeal, Praecipe and Demand for Filing Certified Transcript of Record Pursuant to R.C was filed with the Supreme Court on January 25, 2013 and was filed with the Board of Tax Appeals on January 25, Karen H, Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # Attorneys for Appellant -vs- -12- PROOF OF SERVICE I hereby certify that a copy of this Proof of Pifing was sent this 24^' day of January, 2013 by certified maif, return receipt requested to: David J. Folk Medina County Assistant Prosecutor 72 Public Square Medina, OH Attorney for Appelleos Medina County Board of Revision and Medina County Auditor Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH Tax Commissioner of Ohio Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # Attorneys for Appellant -13- PROOF OF SERMlCE I hereby certify that a copy of the foregoing Appellant's Demand for Filing Certified Transcript of Record Pursuant to R.C was sent this 24 th day of January, 2013 by certified mail, return receipt requested, to: David J. Folk Medina County Assistant Prosecutor 72 Public Square Medina, OH Attorney for Appe9lees Medina County Board of Revision and Medina County Auditor Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad S
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