author: Per Curiam.

text:
    NAVISTAR, INC., Appellant, v. TESTA, Tax Commr., Appellee.
    No. 2015-2055
    Supreme Court of Ohio.
    Submitted February 13, 2018 Decided May 16, 2018
    Maryann B. Gall ; and Vorys, Sater, Seymour & Pease, L.L.P., Anthony L. Ehler, and Steven L. Smiseck, Columbus, for appellant.
    Michael DeWine, Attorney General, and Barton A. Hubbard, Assistant Attorney General, for appellee.
   Per Curiam.

{¶ 1} This case involves the commercial-activity-tax ("CAT") credit prescribed by R.C. 5751.53, and it comes before us for a second time, following our remand in Navistar, Inc. v. Testa , 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509 (" Navistar I "). In Navistar I , we concluded that the Board of Tax Appeals ("BTA") had "ignored the testimony of Navistar's experts, an omission that ma[de] the BTA's decision unreasonable and unlawful." Id. at ¶ 7. We vacated the decision of the BTA and remanded the cause with the instruction that the BTA "determine, based on a consideration of all the evidence in accordance with [ Navistar I ], whether the valuation allowance originally reported on Navistar's Amortizable Amount Report was or was not in compliance with GAAP" (generally accepted accounting principles). Id. at ¶ 40. In its decision on remand, the BTA again upheld the tax commissioner's reduction of Navistar's CAT credit to zero, and Navistar has appealed for the second time.

{¶ 2} In Navistar I , we noted that Navistar referred to the CAT credit as part of a "grand bargain" under which Ohio franchise-tax payers such as Navistar would support the enactment of the CAT and would receive a credit that allowed them to "retain[ ] some portion of the value of their Ohio deferred-tax assets such as NOLs" (net operating losses), which would otherwise be lost when the CAT replaced the former Ohio corporation franchise tax. Id. at ¶ 10. The CAT credit consists of "a portion of the Ohio-apportioned NOLs on [the company's] books at the end of [the company's] 2004 fiscal year, which, when adjusted, furnished a total amount of credit that could be used to reduce CAT liabilities over a period of up to 20 years." Id. at ¶ 11. Under R.C. 5751.53(A)(9) and (B), this potential credit is referred to as the "amortizable amount." Navistar I at ¶ 12. One feature of the amortizable amount that was significant in Navistar I and is significant in the present appeal is that in determining the amortizable amount, the NOLs are reduced by a percentage called the valuation allowance, which is an "adjustment dictated by accounting principles that is made on the books from year to year to reflect the likelihood that the company will realize the tax benefit of the NOLs," id.

{¶ 3} The factual and procedural background set forth in Navistar I is also relevant here. Navistar timely filed its Amortizable Amount Report, and in that report, it applied a valuation allowance of 62.4 percent; the total amortizable amount reported was $27,048,726. Id. at ¶ 15-17. But the letter to the tax department that accompanied the Amortizable Amount Report stated that Navistar was undergoing a "restatement examination of its financial statements for the years 2002, 2003, 2004, and 2005," that "changes [would] occur to the 2002, 2003, and 2004 financial statements as part of [the] examination," and that such changes would impact the report. Id. at ¶ 20. In December 2007, a "massive restatement" of the financials for the earlier years was noted in Navistar's annual Form 10-K filed with the Securities and Exchange Commission. As noted in Navistar's Form 10-K, in light of the changes to the underlying financial statements, the restatement of the financials increased the applicable valuation allowance to 100 percent. Navistar I at ¶ 17. The tax commissioner adopted the 100 percent valuation allowance in his final determination, which effectively eliminated Navistar's entire CAT credit, id. at ¶ 18, and the BTA affirmed the tax commissioner's determination. Navistar appealed the BTA's decision, and in Navistar I , we clarified the applicable legal principles and, as mentioned above, we remanded the cause to the BTA for a full consideration of the evidence. Navistar now contends that the BTA failed to properly carry out our instructions on remand. For the reasons set forth below, we disagree.

The BTA's decision on remand

{¶ 4} In its decision on remand, the BTA took as its starting point the Form 8-K that Navistar filed with the Securities and Exchange Commission on April 6, 2006, which states that "the company's previously issued audited financial statements and the independent auditor's reports thereon for the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002 should no longer be relied upon because of errors in such financial statements." The BTA noted that that filing occurred "more than 75 days before [Navistar filed] the June 2006 amortization report with the Tax Commissioner" and that therefore the Amortizable Amount Report itself was filed in the context of Navistar's own admission that the financial statements that undergirded the reported amortizable amount were unreliable. BTA No. 2010-575, 2015 Ohio Tax LEXIS 4158, *7 (Nov. 30, 2015).

{¶ 5} The BTA found that Navistar's experts, Douglas Pinney and Beth Savage, "reviewed limited information, i.e., not all of Navistar's underlying books and records," and that the testimony of both "reflects only the perception that each valuation allowance, as reported initially and upon restatement, was properly based upon Navistar's books and records, as they existed at the time of each report's submission ." (Emphasis sic.) Id. at *8. The BTA drew the conclusion that "the valuation allowance set forth in the June 2006 report could not have complied with GAAP, because the historical financial information upon which that valuation was based, was unreliable and inaccurate, i.e., not GAAP compliant." Id. at *9.

The meaning of the term "books and records"

{¶ 6} Before we consider Navistar's objections to the BTA's findings and its conclusion, we must clarify the term "books and records" as it is used in the BTA's decision. As Pinney, one of Navistar's experts, explained, "[f]inancial statements are derived from the books and records of a company, but the financial statements contain * * * footnote disclosures and other information that is typically not recorded in books and records." Navistar's other expert witness, Savage, testified that "[b]ooks and records would include everything that a company has and maintains to track their transactions." When asked whether "books and records include financial statements," she replied that "it's more accurate to state that the books and records * * * are used to prepare the financial statements."

{¶ 7} Addressing the same subject, the tax commissioner's expert, Ray Stephens, stated that "the books are used to prepare the financial statements and include the financial statements and the records or other qualifying information that are used to prepare the financial statements." Although Stephens testified that from an accounting standpoint, the term "books and records" includes the valuation allowance, because that information is used to prepare the financial statement, the term broadly includes what Pinney characterized as "raw data" or "underlying data." And Pinney articulated the important point that the underlying data "needs to be processed to be useful."

{¶ 8} The foregoing discussion demonstrates why it is important that we first recognize the different ways in which the term "books and records" is used. The term is sometimes used to mean the financial statements and high-level-accounting documents associated directly with preparing the financial statements, and it is sometimes used to mean the "raw data" that forms the factual foundation upon which the high-level-accounting documents and the financial statements are based. Using Pinney's terminology, we will refer to the former types of books and records as the "processed data" and we will refer to the latter types as the "raw data."

{¶ 9} The BTA uses the term "books and records" in both ways. First, the BTA refers to "underlying books and records," which the expert witnesses did not review, 2015 Ohio Tax LEXIS 4158 at *8. This refers to the raw data upon which the processed data, including the financial statements, are based.

{¶ 10} Second, the BTA refers to the books and records as they "existed at the time of each [Form 10-K's] submission." (Emphasis deleted.) Id. Here, the BTA is referring primarily to the processed data, which differed at the two points in time because of the restatement of the financials for the fiscal year ending October 31, 2004.

{¶ 11} Likewise, in stating its conclusion that the original valuation allowance was not GAAP compliant, the BTA uses the phrase "historical financial information upon which [the original] valuation [allowance] was based." Id. at *9. Here, the BTA is again referring to the processed data, which were shown by the restatement of financials to be "unreliable and inaccurate." Id.

{¶ 12} The record indisputably supports the BTA's finding that in important respects, the processed data upon which the original valuation allowance was determined were in error. When it filed its Form 8-K in 2006, Navistar proclaimed its financials for 2004 to be unreliable. In 2007, Navistar submitted its long-delayed Form 10-K for 2005, which for the first time "reflect[ed] restated consolidated financial statements for the years ended October 31, 2003 and 2004." The restated financials for those years significantly modified the reported income, expenses, and liabilities that form the basis for projecting whether deferred tax assets could actually be used; for fiscal year 2004, the restatement indicates that the originally reported $311 million net income was incorrect and that the company actually had suffered a $35 million loss.

{¶ 13} Supporting the BTA's conclusion that the original valuation allowance was not GAAP compliant are Navistar's own statements in its Form 10-K. In that form, Navistar relies on Financial Accounting Standards No. 109 for the proposition that "an important factor in determining whether a deferred tax asset will be realized is whether there has been sufficient taxable income in recent years ." (Emphasis added.) And in conjunction with that proposition, Navistar's Form 10-K states that Navistar "reassessed [its] need for a valuation allowance and determined that [it had not applied Financial Accounting Standards] No. 109 properly and that a full valuation allowance should be established for net U.S. and Canadian deferred tax assets based on the weight of positive and negative evidence, particularly our recent history of operating losses." The BTA acted within its discretion in attaching weight to the pronouncements set forth in Navistar's filings with the Securities and Exchange Commission. See HealthSouth Corp. v. Testa , 132 Ohio St.3d 55, 2012-Ohio-1871, 969 N.E.2d 232, ¶ 20 ("filings at the Securities and Exchange Commission possess indicia of reliability because they are generated during the course of business for business purposes and involve the assembling of data from business-record sources by persons who have a business duty to assemble such data").

{¶ 14} Of course, even though the processed data were corrected, the underlying raw data remained the same and were in existence at all relevant times. That point was elicited from Pinney on cross-examination. When confronted with the difference between the $76 million valuation allowance originally reported for 2004 and the $2 billion valuation allowance reported in connection with the restated financial statements for 2004, Pinney testified that both valuation allowances were reasonable "at different points in time." The examination proceeded as follows:

Q: But it's for the same period, you would agree?
A: The-Because the assessment was made at a different point in time, that's why I'm stating it that way.
Q: And it's based upon both-or, based upon information that was in existence as of the fiscal year ending in 2004, correct?
A: Well, not the subsequent period's income and losses. That was not in existence as of * * * 10-31-2004.
Q: I'm * * * talking about information that was utilized to determine the restatement amounts and-as compared to the originally filed amounts.
A: Well, not all of-as I-as I stated, not all of the information, including the changed circumstances that is described elsewhere in the restated financial statement, that-that was not available as of the date the original assessment was made.
Q: The underlying data for it was available?
A: Yes .

(Emphasis added.) The reference to the "underlying data" in this testimony is, of course, a reference to what we are calling the raw data.

{¶ 15} Expressed in terms of the distinction that we have drawn, the BTA concluded that the original valuation allowance was not GAAP compliant, given that the processed data on which the original valuation allowance was based were defective in certain respects that were material to the calculation of the original valuation allowance. And the essence of the BTA's findings with regard to the testimony of Navistar's experts is that (1) they opined that the valuation allowance was GAAP reasonable in light of the original processed data available to those who formulated the original valuation, (2) they did not testify that the original valuation allowance was reasonable under the processed data after restatement , and (3) they based their opinions on their review of the processed data and did not themselves review the raw data .

The BTA's findings are supported by reliable and probative evidence, and its conclusion is reasonable and lawful

{¶ 16} Against this backdrop, we are now able to evaluate Navistar's objections to the BTA's findings and its conclusion. In doing so, we are mindful that we remanded the cause on a question of fact-whether Navistar's "original valuation allowance was in compliance with GAAP," Navistar I , 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509, at ¶ 7. Accordingly, "[w]e must affirm the BTA's findings of fact if they are supported by reliable and probative evidence," and with respect to "the BTA's determination of the credibility of witnesses and its weighing of the evidence," we perform a highly deferential "abuse-of-discretion review on appeal." HealthSouth Corp. , 132 Ohio St.3d 55, 2012-Ohio-1871, 969 N.E.2d 232, at ¶ 10.

{¶ 17} First, Navistar maintains that the BTA erred in rejecting Pinney's and Savage's conclusions based on the fact that they had not reviewed all of Navistar's relevant books and records. As Navistar asserts, Pinney's and Savage's review of Navistar's processed data was extensive-and arguably, with respect to processed data, Pinney's review was comprehensive in that he had reviewed what Navistar's auditors relied on when calculating the original valuation allowance. But that does not controvert the BTA's finding that he and Savage did not review the raw data . Accordingly, Navistar's argument in this regard does not impugn the BTA's decision.

{¶ 18} Second, Navistar advances a legal argument as to why the BTA's reasoning is faulty. Navistar asserts that under Navistar I , the BTA "could not use future events to decide whether the 2004 [valuation allowance] was GAAP compliant when it was made." At oral argument, counsel for Navistar stated, "This court, we believe, has said, you do not look at the restatement financials."

{¶ 19} This claim of legal error must be considered in light of what we decided in Navistar I. During the first appeal, Navistar argued that "the tax commissioner lacked any authority to adjust the valuation allowance based on the restatement of financial statements that occurred after the June 2006 deadline for filing the Amortizable Amount Report." See Navistar I , 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509, at ¶ 33. We disagreed with this argument. Id. at ¶ 34. Indeed, the essential basis for our remanding the cause lay in the possibility that the restated financials, along with the concomitant changed valuation allowance, might indeed establish that the original valuation allowance was not GAAP compliant-but in making the determination whether it was or was not GAAP compliant on remand, the BTA needed to take cognizance of the expert testimony that had been offered by Navistar.

{¶ 20} Now the BTA has done so. It found that Navistar's experts did not opine that the original valuation allowance could be deemed GAAP compliant based on the restated (corrected) financials . And it has concluded that the evidence before it establishes that the original valuation allowance was not GAAP compliant. Because the very purpose of our remand in Navistar I was for the BTA to determine whether the original valuation allowance was unreasonable in light of all the evidence in the record, including the restated financials, we reject Navistar's claim of legal error.

{¶ 21} Third, although the BTA's decision does not explicitly rely on the testimony of the tax commissioner's expert, Stephens, Navistar draws the inference that the BTA tacitly did so. And indeed, Stephens's testimony does support the BTA's conclusion because Stephens opined, based on his own accounting expertise, that in light of the restated financials, the amortizable amount should be reduced to zero because the later valuation allowance was 100 percent. On cross-examination, Stephens testified that the 100 percent valuation allowance as determined by the auditor in connection with Navistar's restated financials was the correct valuation allowance under GAAP. Stephens also expressed his opinion that the original valuation allowance was not GAAP compliant, based on Navistar's own Form 10-K statement to that effect.

{¶ 22} Navistar contends that in Navistar I , we "disagreed" with Stephens's testimony. Quoting Navistar I , 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509, at ¶ 25, Navistar asserts that we stated that Stephens "inappropriately 'based his opinion concerning the GAAP-compliance of the initial valuation allowance on Navistar's supposed admission that it was not in compliance with GAAP.' "

{¶ 23} But Navistar misquotes our decision. We stated that Stephens had based his opinion on various things, including "his accounting knowledge." Id. And while we described the connection between Stephens's opinion and the admission set forth in Navistar's Form 10-K, we never stated that that connection was in any way "inappropriate."

{¶ 24} Equally misguided is Navistar's allegation that the BTA was "hypocritical" in relying on Stephens's testimony when it had rejected that of Pinney and Savage based on their having failed to review all of Navistar's books and records. Navistar alleges that this was hypocritical because Pinney and Savage had reviewed more processed data than Stephens had. In fact, although he did not review as much processed data, Stephens did review the reported financial statements and notes, and his opinion regarding GAAP compliance reflects the application of his own expertise to the matter. The BTA was entitled to accord whatever weight to that opinion that it deemed appropriate.

{¶ 25} Navistar additionally argues that Stephens's opinion testimony is "irreparably damaged" by the fact that Stephens also took into consideration the complaint filed by Navistar against its former accountants in Illinois. Namely, Navistar characterizes any reliance by Stephens on the Illinois complaint as "impermissible" in light of our holding in Navistar I that the tax commissioner had waived his objection to the BTA's having ruled that statements in the complaint would not be considered as admissions by Navistar. 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509, at ¶ 37-39.

{¶ 26} This argument is without merit. As we noted in Navistar I , the hearing examiner "admitted the complaint as evidence but rejected the tax commissioner's argument that it constituted admissions against interest or statements by a party opponent," and the hearing examiner "limited the tax commissioner's use of the complaint in examining witnesses." Id. at ¶ 37. We construed this as a "ruling that precluded the use of the Illinois complaint as an admission." Id. at ¶ 38. Under Evid.R. 703, an expert may rely on facts "perceived by the expert or admitted in evidence at the hearing ." (Emphasis added.) Although the BTA ruled that the complaint would not itself be construed as an admission, the complaint was admitted into evidence. As a result, Stephens could properly rely on it under the evidentiary rules, which provide guidance at the BTA but are not controlling. See Plain Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision , 130 Ohio St.3d 230, 2011-Ohio-3362, 957 N.E.2d 268, ¶ 20.

{¶ 27} Fourth, Navistar argues that in reviewing the expert and lay testimony of Navistar's witnesses, the BTA should have come across evidence establishing that the restated financials were based not only on raw data in existence at the time Navistar filed its Amortizable Amount Report but also on information that became available only after the report was filed. For example, Navistar argues, although the raw data were available at all relevant times, the restated financials for fiscal year 2004 that Navistar submitted to the Securities and Exchange Commission in 2007 incorporated insight from later accounting periods when Navistar had concluded that it had a 100 percent valuation allowance.

{¶ 28} We discern no reversible error in this regard. For one thing, Pinney testified-as previously discussed-that the "underlying data" was in fact in existence at the relevant times. Additionally, the pronouncements by Navistar in its Form 10-K and Stephens's testimony furnish a sufficient basis for the BTA's conclusion, even if some factors were considered in the restated financials that were not in existence at the time the Amortizable Amount Report was filed-quite simply, the BTA could reasonably have concluded, based on the exercise of its discretion as the finder of fact, that the influence of such other factors was inconsequential.

{¶ 29} Also unavailing is Navistar's contention that the subsequent history of Navistar's actually realizing the value of net operating losses that accrued in earlier years establishes the propriety of the original partial valuation allowance for fiscal year 2004 as opposed to the later total valuation allowance. To accept this contention would violate the precept that we articulated in Navistar I : the tax commissioner may adjust the amortizable amount on audit but only to cure an inaccuracy or correct an error in the report of the amortizable amount. Id. at ¶ 34. The issue before the BTA was the reasonableness of the valuation allowance in light of the corrected financial statements with respect to the fiscal year ending in 2004, and events that occurred in subsequent years cannot retroactively justify a lesser valuation allowance if that lesser valuation allowance was unwarranted in light of the information properly considered in determining the valuation allowance for fiscal year 2004.

Conclusion

{¶ 30} In Navistar I , we held that the BTA's "ignor[ing] the testimony of Navistar's experts" was an omission that "ma[de] the BTA's decision unreasonable and unlawful." 143 Ohio St.3d 460, 2015-Ohio-3283, 39 N.E.3d 509, at ¶ 7. In its decision on remand, the BTA explained why Navistar's expert testimony did not demonstrate that the original valuation allowance was GAAP compliant. Thus, the BTA carried out our instruction on remand, and because its decision is reasonable and lawful, we affirm it.

Decision affirmed.

O'Connor, C.J., and O'Donnell, French, DeWine, and DeGenaro, JJ., concur.

Kennedy and Fischer, JJ., dissent.


source: Caselaw Access Project

license: Public Domain

text:
    SCHUTZ, Appellant, v. CUYAHOGA COUNTY BOARD OF REVISION et al., Appellees.
    No. 2015-0288
    Supreme Court of Ohio.
    Submitted January 23, 2018 Decided April 25, 2018
    J. Alex Morton, Cleveland, for appellant.
    Timothy J. McGinty, Cuyahoga County Prosecuting Attorney, and Mark R. Greenfield, Assistant Prosecuting Attorney, for appellees Cuyahoga County Board of Revision and Cuyahoga County Fiscal Officer.
   Per Curiam.

{¶ 1} This case involves residential property located on Berkeley Road in Cleveland Heights and owned by appellant, Alex Schutz. He challenged the tax-year-2012 valuation of the property by appellee Cuyahoga County fiscal officer. Appellee Cuyahoga County Board of Revision ("BOR") rejected his claim, retaining the fiscal officer's valuation, and the Board of Tax Appeals ("BTA") affirmed. In his appeal here, Schutz contends that the BTA misplaced the burden of proof and did not give proper consideration to the evidence he presented in support of his claim. We affirm the BTA's decision.

Facts and Procedural History

{¶ 2} For tax year 2012, a reappraisal year in Cuyahoga County, the fiscal officer valued the subject property at $104,100. In his valuation complaint, Schutz asked the BOR to decrease the valuation to $40,000.

{¶ 3} At the BOR hearing, Schutz presented evidence showing that he had purchased the property from a bank in January 2009 for $14,300. He testified that the property had been the subject of multiple housing-code violations and was in "fair" condition on the January 1, 2012 tax-lien date. He said that his requested valuation of $40,000 represented the sum of the purchase price and the cost of the improvements he had made to the property as of the tax-lien date. To further support his claim, Schutz presented evidence showing that, in 2010, a bank denied his request for a loan in the amount of $56,000. The bank had refused the request, in part on the grounds that Schutz lacked sufficient equity in the property. Schutz also testified that he had unsuccessfully listed the property for sale, with an asking price around $70,000. The BOR retained the fiscal officer's valuation, and Schutz appealed to the BTA.

{¶ 4} At the BTA, Schutz presented evidence showing that he and the fiscal officer had stipulated to a value of $14,300 for tax years 2009 and 2010. He also presented lists of purported sale prices of other properties in the neighborhood since January 2009. One document states that "[t]he median sale price of homes on Berkeley Rd. west of Taylor Rd. since 2009 is $33,500." Schutz did not explain what sources he used to create these documents, and he did not make adjustments to relate the purported sale prices to the subject property. For their part, the fiscal officer and the BOR (collectively, "the county") did not present any evidence in support of the $104,100 valuation.

{¶ 5} The BTA rejected Schutz's claim, finding that his January 2009 purchase of the property was not a reliable indicator of value because it was "too remote" from the January 2012 tax-lien date. BTA No. 2013-6566, 2015 WL 402106, *2 (Jan. 20, 2015). The BTA concluded, "In the absence of [a] qualifying sale[ ], * * * [Schutz] was required, but failed, to provide [a] competent appraisal[ ] of the parcel[ ], attested to by a qualified expert, for the tax lien date in issue. As such, we are constrained to conclude that [Schutz] has failed to satisfy his evidentiary burden * * *." Id. The BTA did not address Schutz's remaining evidence. Schutz appealed to this court.

Analysis

Standard of review

{¶ 6} We must affirm the BTA's decision if it is "reasonable and lawful." R.C. 5717.04. "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 [BTA] 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. We review legal issues de novo. Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision , 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, ¶ 11.

{¶ 7} This case presents both factual and legal questions. The BTA assigned no weight to Schutz's January 2009 purchase because it found that the sale was not recent in relation to the tax-lien date. We defer to that finding because it is supported by the record. See Olmsted Falls Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision , 122 Ohio St.3d 134, 2009-Ohio-2461, 909 N.E.2d 597, ¶ 27. But because the BTA did not address Schutz's other evidence, it made no factual findings concerning that evidence to which we can defer. The primary question regarding that evidence, therefore, is one of legal sufficiency, which we review de novo. See Emerson v. Erie Cty. Bd. of Revision , 149 Ohio St.3d 148, 2017-Ohio-865, 73 N.E.3d 496, ¶ 13.

The burden of proof

{¶ 8} In his second proposition of law, Schutz argues that the BTA misplaced the burden of proof by not requiring the county to demonstrate the validity of the fiscal officer's valuation. This proposition is in opposition to our well-settled precedent.

{¶ 9} In a valuation case, "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." Colonial Village, Ltd. v. Washington Cty. Bd. of Revision , 123 Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d 1196, ¶ 23. To meet that burden, the challenging party "must come forward and demonstrate that the value it advocates is a correct value." 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. When the challenging party fails to carry this burden at the BTA, a county "bears no burden to offer proof of the accuracy of the appraisal on which [it] initially relies." Colonial Village at ¶ 23. In that case, "the BTA is justified in retaining the county's valuation of the property." Id. ; see also Moskowitz v. Cuyahoga Cty. Bd. of Revision , 150 Ohio St.3d 69, 2017-Ohio-4002, 78 N.E.3d 870, ¶ 9.

{¶ 10} The county, therefore, needed to present evidence supporting the fiscal officer's valuation only if Schutz first carried his burden by presenting evidence of a different value for the property.

The absence of an expert appraisal

{¶ 11} In his first proposition of law, Schutz argues that the BTA incorrectly faulted him for not submitting an expert appraisal. In support of this claim, he points to the BTA's reliance on State ex rel. Park Invest. Co. v. Bd. of Tax Appeals , 175 Ohio St. 410, 412, 195 N.E.2d 908 (1964), in which we stated that "an appraisal becomes necessary" when evidence of a qualifying sale is not available. Schutz contends that the BTA applied an incorrect legal standard by stating that he "was required, but failed, to provide [a] competent appraisal[ ] of the parcel[ ], attested to by a qualified expert, for the tax lien date in issue," 2015 WL 402106 at *2.

{¶ 12} Contrary to the implication of the BTA's decision in this case, we have not applied Park Invest. Co. to require an expert appraisal whenever a complainant has not demonstrated a recent arm's-length sale. We have recognized, for example, that a nonexpert owner's opinion of value may support a valuation decision. See Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision , 140 Ohio St.3d 248, 2014-Ohio-3620, 17 N.E.3d 537, ¶ 19. And even apart from a distinct opinion of value offered by an owner, a taxpayer may trigger the BTA's duty to adjust a valuation by documenting the purchase price of land and the cost of improvements. See Amsdell v. Cuyahoga Cty. Bd. of Revision , 69 Ohio St.3d 572, 574-575, 635 N.E.2d 11 (1994). Schutz, therefore, correctly argues that the BTA should not have faulted him simply because he did not provide an appraisal "attested to by a qualified expert." The BTA should have addressed in its decision whether Schutz's other evidence satisfied his burden of proof.

{¶ 13} When the BTA misapplies the law and fails to fully address the evidence before it, it may be appropriate for this court to remand the matter for the BTA to properly carry out its role as fact-finder. See Colonial Village, Ltd. v. Washington Cty. Bd. of Revision , 114 Ohio St.3d 493, 2007-Ohio-4641, 873 N.E.2d 298, ¶ 22-25. But as discussed below, the evidence the BTA failed to address in this case would not be legally sufficient to allow the BTA to perform an independent valuation of the property, much less to definitively prove Schutz's proposed value. For this reason, the BTA's decision retaining the fiscal officer's valuation was reasonable and lawful, and a remand of the case to the BTA is unnecessary. See Shinkle v. Ashtabula Cty. Bd. of Revision , 135 Ohio St.3d 227, 2013-Ohio-397, 985 N.E.2d 1243, ¶ 27-28.

Schutz's evidence

{¶ 14} In his third proposition of law, Schutz argues that the BTA failed to consider his evidence that, he says, proves that the property's tax-year-2012 value was $40,000. The evidence Schutz points to relates to (1) his failed effort to sell the property for around $70,000, (2) sales of other properties in the same neighborhood, (3) the condition of the subject property as of the tax-lien date, and (4) his January 2009 purchase of the property for $14,300. In his reply brief, Schutz also argues that he, as the owner of the property, opined a value of $40,000 and that that opinion must be given weight under the owner-opinion rule. See Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision , 152 Ohio St.3d 331, 2017-Ohio-8843, 96 N.E.3d 228, ¶ 18 ("Under the owner-opinion rule, an owner of real property is competent to testify about the market value of the property, even if he or she is not qualified as an expert"). None of this evidence proves that the property should have been valued at $40,000.

{¶ 15} First, the BTA did not act unreasonably or unlawfully in refusing to consider Schutz's testimony that he received no offers when he tried to sell the property for around $70,000. Schutz provided scant detail concerning his listing of the property. But more importantly, even if it had been substantiated, his claim does not tend to show that the property was worth $40,000 on the tax-lien date. Therefore, we hold that Schutz's testimony about his attempt to sell the property was legally insufficient to prove a different value. See also Gupta v. Cuyahoga Cty. Bd. of Revision , 79 Ohio St.3d 397, 399-400, 683 N.E.2d 1076 (1997) (stating that BTA "was not required to assign any weight" to testimony about unaccepted offers to purchase subject property).

{¶ 16} Second, the BTA's failure to address the sales data Schutz submitted also was neither unreasonable nor unlawful. This evidence merely reported sale prices of nearby properties since January 2009 and stated the conclusion that "[t]he median sale price of homes on Berkeley Rd. west of Taylor Rd. since 2009 is $33,500." Schutz offered nothing to confirm that the sales actually occurred, and he made no adjustments to relate the purported sale prices to the subject property. We have considered similar sales data as evidence corroborating that a sale was at arm's length. See Schwartz v. Cuyahoga Cty. Bd. of Revision , 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223, ¶ 30. But Schutz did not offer the data here for that purpose; instead, he relies on it as affirmative proof that his property was worth $40,000 in 2012. Because the data does not demonstrate that value, we hold that it is legally insufficient to satisfy Schutz's burden of proof.

{¶ 17} Third, Schutz testified concerning the "fair" condition of the property on the tax-lien date and supported his testimony with documentation of multiple housing-code violations. This evidence, standing alone, does not prove that the property's value was $40,000. See Throckmorton v. Hamilton Cty. Bd. of Revision , 75 Ohio St.3d 227, 228, 661 N.E.2d 1095 (1996) ("Evidence of needed repairs, or the cost of needed repairs, while a factor in arriving at true value, will not alone prove true value"). Without affirmative evidence of the property's value or specific analysis of how the property's condition affected its value, any evidence of defects in the property is inconsequential. The BTA did not act unreasonably or unlawfully in disregarding this evidence.

{¶ 18} Finally, the BTA reasonably and lawfully determined that Schutz's 2009 purchase was not probative of the property's value because it was too remote from the January 1, 2012 tax-lien date. "[A] sale that occurred more than 24 months before the lien date and that is reflected in the property record maintained by the county auditor or fiscal officer should not be presumed to be recent when a different value has been determined for that lien date as part of the six-year reappraisal."

Akron City School Dist. , 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, at ¶ 26. Because Schutz could not benefit from a presumption of recency, he was required to "come forward with evidence showing that market conditions or the character of the property has not changed between the sale date and the lien date." Id. The BTA's determination that Schutz did not satisfy his burden is a factual finding to which we must defer.

{¶ 19} This conclusion also justifies rejection of Schutz's purported owner-opinion of value. Even if his testimony could be construed as an opinion of value, it is clear that he derived that opinion by adding the 2009 purchase price to the total of the expenditures he supposedly made for improvements to the property. Because the BTA properly rejected the sale price as evidence of value, the sale price was not a proper foundation for Schutz's opinion of value.

{¶ 20} On the whole, Schutz argues, the evidence he presented suggests that the property's 2012 value was not $104,100 and was more likely $40,000. But as the complainant and the appellant at the BTA, his burden was to prove that "the value [he] advocates is a correct value." EOP-BP Tower , 106 Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, at ¶ 6. Because the evidence he presented, when considered individually or collectively, does not demonstrate a value of $40,000, the BTA acted reasonably and lawfully in retaining the fiscal officer's valuation.

Cumulative error

{¶ 21} In his fourth proposition of law, Schutz contends that the BTA violated his right to due process by failing to act as an impartial tribunal. In support, he refers to the "cumulative result of the errors set forth in" his first three propositions of law. Because Schutz's individual claims of error lack merit, this claim also fails. See Moskowitz , 150 Ohio St.3d 69, 2017-Ohio-4002, 78 N.E.3d 870, at ¶ 16.

Decision affirmed.

O'Connor, C.J., and O'Donnell, Kennedy, French, Fischer, and DeWine, JJ., concur.

DeGenaro, J., not participating.

      Schutz also asks us to take judicial notice of certain facts, including additional facts related to the sales of nearby properties. But in doing so, Schutz invites us to abdicate our appellate role and to consider information that was not before the BTA. The rule allowing courts to take judicial notice of certain facts is not "an exception to the rule that evidence must be timely offered in a judicial proceeding." AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision , 118 Ohio St.3d 343, 2008-Ohio-2565, 889 N.E.2d 115, ¶ 8, fn. 1. Because Schutz did not present this evidence in the proceedings below, we disregard it in this appeal.


text:
    The STATE EX REL. GARRETT v. COSTINE, Judge.
    No. 2017-0801
    Supreme Court of Ohio.
    Submitted November 21, 2017 Decided April 26, 2018
    Erik L. Smith, for relator.
    Daniel P. Fry, Belmont County Prosecuting Attorney, and David K. Liberati, Assistant Prosecuting Attorney, for respondent.
   Per Curiam.

{¶ 1} This original action involves an interstate adoption dispute between the grandmother and aunt of a minor child. Relator, Tamalie Garrett, seeks a writ of prohibition against respondent, Belmont County Probate Judge J. Mark Costine, to require him to vacate an order granting the adoption petition filed by Tamalie's daughter, Elizabeth Garrett. Because Judge Costine patently and unambiguously lacked jurisdiction over the adoption petition, we grant the writ and order Judge Costine to vacate the adoption decree entered in Belmont County Probate Court case No. 16 AD 23.

Background

{¶ 2} Tamalie's granddaughter, G.G., was born on June 29, 2011, in West Virginia to Amanda Garrett.

The West Virginia litigation

{¶ 3} In December 2011, the Family Court of Hancock County, West Virginia, entered an agreed order of guardianship. The order designated Elizabeth Garrett, Amanda's sister, as G.G.'s legal guardian, see W.Va.Code Ann. 44-10-1 et seq., and awarded Tamalie visitation with G.G. on a weekly basis and annually on Christmas Day and the day after Christmas.

{¶ 4} In the summer of 2012, Elizabeth and G.G. moved to Ohio. There is no indication that Tamalie ever sought to register the visitation order in Ohio. Four years later, on July 26, 2016, Tamalie filed a petition in the West Virginia family court to modify the 2011 visitation order. The next month she filed a petition to hold Elizabeth in contempt for violating the 2011 visitation order. Elizabeth and Tamalie entered mediation, and on October 21, 2016, they advised the West Virginia court that they had reached an agreement with regard to the parenting and visitation issues involved in the case.

{¶ 5} In April 2017, based on the developments detailed below, the West Virginia court dismissed Tamalie's petition for contempt without prejudice.

The Ohio litigation

{¶ 6} Unbeknownst to Tamalie, on October 19, 2016, while the petitions to modify visitation and for contempt were pending in West Virginia, Elizabeth filed a petition to adopt G.G. in Belmont County Probate Court. The parties stipulate that at some point before the filing of the adoption petition, Amanda, the biological mother, "executed a permanent surrender agreement regarding" G.G. and that the Belmont County Probate Court never notified Tamalie or the West Virginia court that the adoption petition had been filed.

{¶ 7} On December 15, 2016, Judge Costine issued a final decree of adoption in case No. 16 AD 23, granting Elizabeth's adoption petition. The Ohio court sent a copy of the adoption decree to the West Virginia court, which then mailed it to Tamalie along with a notice indicating that unless she was successful in getting the adoption decree set aside or modified in some way, the West Virginia court would dismiss her petition for contempt. Tamalie filed motions in case No. 16 AD 23 for relief from judgment and to intervene. Judge Costine scheduled a hearing on Tamalie's motions, but before the hearing date, he entered an order staying the case pending resolution of this original action.

{¶ 8} On June 13, 2017, Tamalie filed a complaint for writs of prohibition and mandamus in this court. On July 12, 2017, we granted Judge Costine's motion to dismiss the mandamus claim but granted an alternative writ of prohibition. 149 Ohio St.3d 1470, 2017-Ohio-5799, 77 N.E.3d 993. Tamalie submitted evidence, including a set of stipulations, and the case has been fully briefed.

Legal Analysis

{¶ 9} A writ of prohibition is an extraordinary remedy that is granted in limited circumstances "with great caution and restraint." State ex rel. Corn v. Russo , 90 Ohio St.3d 551, 554, 740 N.E.2d 265 (2001). Tamalie is entitled to the writ only upon a showing that (1) Judge Costine is about to exercise or has exercised judicial power, (2) his exercise of that power is unauthorized by law, and (3) denying the writ would result in injury for which no other adequate remedy exists in the ordinary course of the law. State ex rel. Elder v. Camplese , 144 Ohio St.3d 89, 2015-Ohio-3628, 40 N.E.3d 1138, ¶ 13. Tamalie need not establish the lack of an adequate remedy at law if Judge Costine's lack of jurisdiction was "patent and unambiguous." State ex rel. Vanni v. McMonagle , 137 Ohio St.3d 568, 2013-Ohio-5187, 2 N.E.3d 243, ¶ 6.

{¶ 10} The Parental Kidnapping Prevention Act ("PKPA"), 28 U.S.C. 1738A, "mandate[s] that states afford full faith and credit to valid child custody orders of another state." Justis v. Justis , 81 Ohio St.3d 312, 315, 691 N.E.2d 264 (1998). As such, the PKPA "addresses questions of jurisdiction in cases involving interstate custody and visitation disputes." In re R.M. , 7th Dist. Mahoning No. 07 MA 232, 2009-Ohio-3252, 2009 WL 1914376, ¶ 46 ; see State ex rel. Morenz v. Kerr , 104 Ohio St.3d 148, 2004-Ohio-6208, 818 N.E.2d 1162, ¶ 16. "[T]he PKPA prevents a second state from modifying an initial state's order except in carefully circumscribed situations." Meade v. Meade , 812 F.2d 1473, 1476 (4th Cir.1987).

{¶ 11} In Ohio, probate courts are vested with "original and exclusive jurisdiction over adoption proceedings." In re Adoption of Pushcar , 110 Ohio St.3d 332, 2006-Ohio-4572, 853 N.E.2d 647, ¶ 9. However, we have held that "an Ohio court patently and unambiguously lacks jurisdiction to proceed in a child-custody case commenced when a child-custody case is already pending in a court of another state and that court is exercising jurisdiction consistently with the [PKPA] and the state's version of the Uniform Child Custody Jurisdiction Act ('UCCJA')." Morenz at ¶ 1 ; see generally State ex rel. Seaton v. Holmes , 100 Ohio St.3d 265, 2003-Ohio-5897, 798 N.E.2d 375. Most jurisdictions, including Ohio and West Virginia, have replaced their versions of the former UCCJA with versions of the Uniform Child Custody Jurisdiction and Enforcement Act ("UCCJEA"). See Rosen v. Celebrezze , 117 Ohio St.3d 241, 2008-Ohio-853, 883 N.E.2d 420, ¶ 20-22.

{¶ 12} The PKPA requires "every State [to] enforce according to its terms * * * any custody determination or visitation determination made consistently with the provisions of this section by a court of another State." 28 U.S.C. 1738A(a). As used in the PKPA, " 'visitation determination' means a judgment, decree, or other order of a court providing for the visitation of a child, and includes permanent and temporary orders and initial orders and modifications." 28 U.S.C. 1738A(b)(9). Therefore, the PKPA applies to the initial order granting visitation to Tamalie.

{¶ 13} In addition, the West Virginia order establishing guardianship and granting Tamalie visitation was "made consistently" with the PKPA for purposes of 28 U.S.C. 1738A(a). A court's visitation determination is "consistent" with the PKPA if (1) the court had jurisdiction under its own state laws to make the determination and (2) the state "is the home State of the child on the date of the commencement of the proceeding * * * and a contestant continues to live in" the state. 28 U.S.C. 1738A(c)(1) and (2)(A). The state law applicable to the West Virginia guardianship-and-visitation proceeding is the UCCJEA, W.Va.Code Ann. 48-20-101 et seq. The UCCJEA applies to all child-custody proceedings, which, as defined by the act, include proceedings "in which legal custody, physical custody, or visitation with respect to a child is an issue." W.Va.Code Ann. 48-20-102(d). In 2011, when the West Virginia guardianship-and-visitation proceeding commenced, both G.G. and Tamalie lived in West Virginia, and G.G. had lived there since birth. See 28 U.S.C. 1738A(b)(4) (defining "home State" as "the State in which, immediately preceding the time involved, the child lived with his parents, a parent, or a person acting as parent, for at least six consecutive months, and in the case of a child less than six months old, the State in which the child lived from birth with any of such persons").

{¶ 14} Under 28 U.S.C. 1738A(d), the PKPA sets forth a federal standard for exclusive continuing jurisdiction over a prior custody or visitation order. Under that provision, West Virginia's jurisdiction would be exclusive and continuing at the time Elizabeth invoked the jurisdiction of the Ohio probate court as long as (1) West Virginia still had jurisdiction as a matter of state law and (2) West Virginia "remain[ed] the residence of the child or of any contestant ." (Emphasis added.) As used in the PKPA, " 'contestant' means a person, including a parent or grandparent, who claims a right to custody or visitation of a child." 28 U.S.C. 1738A(b)(2).

{¶ 15} The second requirement for continuing jurisdiction under the PKPA is easily met, because Tamalie (a contestant) still resides in West Virginia. To satisfy the first requirement of 28 U.S.C. 1738A(d), West Virginia must still have jurisdiction over that state's proceedings regarding G.G. as a matter of state law, the UCCJEA. Under West Virginia's version of the UCCJEA, it retains exclusive and continuing jurisdiction until a West Virginia court "or a court of another state determines that the child, the child's parents and any person acting as a parent do not presently reside in this state." (Emphasis added.) W.Va.Code Ann. 48-20-202(a). Unlike the broader definition in the PKPA, continuing jurisdiction under this statute takes into account only the residency of the child, the parents, and a person acting as a parent.

{¶ 16} The dispositive consideration is thus whether either court made a determination that the relevant persons no longer resided in West Virginia. Clearly, the West Virginia court made no such determination, as it was actively exercising continuing jurisdiction over the proceedings regarding G.G. when it was informed of the adoption decree. Further, the record in this case contains no evidence to show that Judge Costine determined that G.G., her biological mother, Amanda (there is no evidence identifying a putative father), and Elizabeth did not "presently reside" in West Virginia for purposes of W.Va.Code Ann. 48-20-202(a). Indeed, the record contains evidence showing that Amanda actually lived in West Virginia when Elizabeth invoked the jurisdiction of the Ohio court. Therefore, there is no evidence that Judge Costine made the requisite findings to undermine West Virginia's exclusive continuing jurisdiction.

{¶ 17} Under the PKPA, an Ohio court could not modify the West Virginia visitation order unless the West Virginia court "no longer ha[d] jurisdiction to modify such [visitation] determination or [had] declined to exercise jurisdiction to modify such determination." 28 U.S.C. 1738A(h). Tamalie has established that West Virginia still had jurisdiction over the initial visitation determination and had the requisite continuing jurisdiction to modify that order. A "modification" within the meaning of the PKPA is "a custody or visitation determination which modifies, replaces, supersedes, or otherwise is made subsequent to, a prior custody or visitation determination concerning the same child, whether made by the same court or not." 28 U.S.C. 1738A(b)(5). Therefore, Judge Costine's granting of Elizabeth's petition for adoption was a "modification" of the West Virginia order in violation of 28 U.S.C. 1738A(h).

{¶ 18} At the time Elizabeth commenced the Ohio adoption proceeding, Tamalie's petition to modify the visitation order was already pending in West Virginia. In fact, Elizabeth was actively involved in the West Virginia case when she filed for adoption in Ohio without informing the West Virginia court or Tamalie of the filing. In enacting the PKPA, "Congress explicitly specified [that] one of the chief purposes of the PKPA is to 'avoid jurisdictional competition and conflict between State courts.' " Thompson v. Thompson , 484 U.S. 174, 177, 108 S.Ct. 513, 98 L.Ed.2d 512 (1988), quoting Pub.L. No. 96-611, 94 Stat. 3569, section 7(c)(5), note following 28 U.S.C. 1738A (Dec. 28, 1980). This goal is further suggested in 28 U.S.C. 1738A(e), which states that "[b]efore a child custody or visitation determination is made, reasonable notice and opportunity to be heard shall be given to the contestants * * *." (Emphasis added.) But here no attempt was made to comply with this provision of the PKPA, further defeating the goals implicit in the act.

{¶ 19} Tamalie has satisfied her burden of demonstrating that Judge Costine patently and unambiguously lacked jurisdiction over the adoption proceedings. West Virginia had exclusive continuing jurisdiction under its version of the UCCJEA and therefore was consistently exercising jurisdiction over Tamalie's petitions to modify visitation and for contempt when Judge Costine improperly exercised jurisdiction over the adoption petition. Judge Costine thus failed to give full faith and credit to a valid visitation determination of another state in violation of the provisions of the PKPA.

Conclusion

{¶ 20} Judge Costine patently and unambiguously lacked jurisdiction to grant Elizabeth's petition to adopt G.G. We therefore grant Tamalie's request for a writ of prohibition and order Judge Costine to vacate the adoption decree and cease exercising jurisdiction over those proceedings.

Writ granted.

O'Connor, C.J., and O'Donnell, Kennedy, French, Fischer, and DeWine, JJ., concur.

DeGenaro, J., not participating.


text:
    LONE STAR STEAKHOUSE & SALOON OF OHIO, INC., Appellant, v. FRANKLIN COUNTY BOARD OF REVISION et al., Appellees.
    No. 2016-0145
    Supreme Court of Ohio.
    Submitted January 23, 2018 Decided April 26, 2018
    The Gibbs Firm, L.P.A., Ryan J. Gibbs, Cincinnati, and Geoffrey N. Byrne, for appellant.
    Rich & Gillis Law Group, L.L.C., Mark H. Gillis, and Karol C. Fox, Dublin, for appellee Board of Education of the South-Western City School District.
   Per Curiam.

{¶ 1} In this real-property-valuation case involving tax year 2012, appellant, Lone Star Steakhouse & Saloon of Ohio, Inc. ("Lone Star"), sought a reduction in the valuation of a property it once owned based on the property's sale price. Appellee Franklin County Board of Revision ("the BOR") rejected the sale price as the criterion of value and instead retained the county auditor's valuation. On appeal, the Board of Tax Appeals ("BTA") adopted the BOR's valuation, finding that the sale was too remote in relation to the tax-lien date. We conclude that the BTA misapplied our precedent in determining that the sale was too remote. We accordingly reverse the BTA's decision and remand the case with instructions that the BTA use the sale price to value the property for tax year 2012. FACTS AND PROCEDURAL BACKGROUND

{¶ 2} The subject property consists of a 5,344-square-foot restaurant located on a 1.71-acre parcel. For tax year 2012, the Franklin County auditor valued the property at $1,250,000. Lone Star filed a complaint seeking a reduction of this valuation to $750,000, and appellee Board of Education of the South-Western City School District ("the BOE") responded with a countercomplaint urging retention of the auditor's valuation.

BOR proceedings

{¶ 3} At the BOR hearing, Lone Star's counsel presented three documents in support of the complaint. First, he presented a warranty deed memorializing a transfer of the property from Lone Star to J.M. Mendez, Inc. The deed's effective date is listed as December 31, 2013, but stamps marked on the deed by the auditor's and recorder's offices are dated January 21, 2014. Second, he presented a conveyance-fee statement listing the consideration as $700,000. The statement was signed on behalf of J.M. Mendez, Inc., on December 31, 2013, but it bears an auditor's stamp of January 21, 2014. Third, he presented an escrow-trust-disbursement statement showing a purchase price of $700,000 and a disbursement date of December 31, 2013. After furnishing these three documents, Lone Star's counsel insisted that the property should be valued based on the sale price of $700,000. Lone Star's counsel did not call any witnesses to testify on its behalf.

{¶ 4} In response to questioning from the BOE, Lone Star's counsel stated that he did not represent Lone Star during the sale of the property and did not have personal knowledge about how the property had been marketed or sold. The BOE then argued that the BOR should not rely on the sale price, because no one with personal knowledge about the sale had appeared to testify.

{¶ 5} The BOR retained the county auditor's valuation of $1,250,000. The BOR remarked during its deliberations that Lone Star's evidence did not justify a reduction, because no witness had appeared to testify about the sale.

BTA proceedings

{¶ 6} Lone Star appealed to the BTA but waived its appearance at the hearing. The BOE appeared but did not present evidence; instead, it argued that the BTA should disregard Lone Star's evidence because no one with personal knowledge of the sale had appeared before the BOR to testify. The BOE also asserted that the sale was too remote in relation to the tax-lien date to justify a finding of recency.

{¶ 7} The BTA regarded the sale as taking effect on January 21, 2014, slightly more than 24 months after the January 1, 2012 tax-lien date, and it agreed with the BOE that the sale price should not be used to value the property, because the sale was too remote from the tax-lien date. Relying on Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision , 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, the BTA found dispositive Lone Star's failure to present evidence showing that either market conditions or the property's character had remained the same between the sale date and the tax-lien date. The BTA did not explicitly address whether the sale was conducted at arm's length.

{¶ 8} The BTA ultimately adopted the BOR's valuation of $1,250,000 because in its view, there was no other evidence that would allow an independent valuation to be performed. Lone Star then filed this appeal.

STANDARD OF REVIEW

{¶ 9} We will affirm a BTA decision that is reasonable and lawful. Satullo v. Wilkins , 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14. We apply de novo review to the BTA's resolution of legal issues, but we will defer to the BTA's findings concerning the weight of the evidence if there is record support for them. Lunn v. Lorain Cty. Bd. of Revision , 149 Ohio St.3d 137, 2016-Ohio-8075, 73 N.E.3d 486, ¶ 13.

DISCUSSION

The sale took effect more than 24 months after the tax-lien date

{¶ 10} We begin by addressing Lone Star's third proposition of law, which requires us to determine the effective date of the subject property's sale for real-property-valuation purposes. Relying on general property-law principles, Lone Star maintains that the sale occurred on the effective date of the deed-December 31, 2013-which would make the sale slightly less than 24 months removed from the January 1, 2012 tax-lien date. On the other hand, the BOE argues (and the BTA found) that the sale became effective when the conveyance-fee statement was filed in the county auditor's office-January 21, 2014-which would make the sale slightly more than 24 months removed from the tax-lien date.

{¶ 11} The guidepost for resolving this question is HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision , 124 Ohio St.3d 481, 2010-Ohio-687, 923 N.E.2d 1144, in which we held that the effective date of a sale for real-property-valuation purposes is the date the conveyance-fee statement is filed in the county auditor's office, id. at ¶ 24. Applying that holding here, January 21, 2014, is the effective date of the sale because that is when the conveyance-fee statement was filed in the auditor's office. Given our holding in HIN , there is no merit to Lone Star's reliance on general property-law principles in asserting that the sale occurred on the deed's effective date.

The BTA erred in rejecting the sale as too remote

{¶ 12} In its first proposition of law, Lone Star asserts that because it presented facially qualifying evidence of a sale, the BOE had a burden to present rebuttal evidence showing that the sale should not be used as the criterion of value. Because the BOE did not present such evidence, Lone Star reasons, the BTA erred in concluding that the sale was too remote. Lone Star's second proposition of law contends that the BTA misread our decision in Akron , 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, as requiring the proponent of a sale price to provide additional evidence showing that the sale is recent when it postdates the tax-lien date by more than 24 months. These two propositions interrelate and will be addressed together.

{¶ 13} Because Lone Star's appeal hinges on the use of a sale price to value the property, a familiar set of principles comes into play. Under former R.C. 5713.03, Am.Sub.H.B. No. 260, 140 Ohio Laws, Part II, 2665, 2722, which applies to tax year 2012, the proponent of a sale price must show that the sale was both "recent to the tax-lien date and arm's length in nature." Utt v. Lorain Cty. Bd. of Revision , 150 Ohio St.3d 119, 2016-Ohio-8402, 79 N.E.3d 536, ¶ 9 (applying former R.C. 5717.03 to tax year 2012). This showing may be made by, for example, furnishing a deed and a conveyance-fee statement. See Dauch v. Erie Cty. Bd. of Revision , 149 Ohio St.3d 691, 2017-Ohio-1412, 77 N.E.3d 943, ¶ 17, citing 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, ¶ 28. After such a showing is made, a rebuttable presumption arises that regards the sale as characteristic of true value. Id. at ¶ 16-17. Thereafter, it falls to the opponent on rebuttal to show that the sale was either not recent or not at arm's length. Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision , 117 Ohio St.3d 516, 2008-Ohio-1473, 885 N.E.2d 222, ¶ 13.

{¶ 14} Here, Lone Star submitted certified copies of the deed, the conveyance-fee statement, and the disbursement statement. Under the case law, we would ordinarily conclude that this quantum of evidence triggered the rebuttable presumption that Lone Star's sale met all the requirements that characterize true value. Dauch at ¶ 17. But our analysis cannot end here, because the BTA, in reliance on Akron , viewed as fatal Lone Star's failure to present evidence showing that either market conditions or the character of the property had remained the same between the sale date and the tax-lien date.

{¶ 15} Akron involved a sale that predated the tax-lien date of a reappraisal year by 29 months. The property owners argued that the presumption of recency did not apply on those facts, and we agreed:

We hold that a sale that occurred more than 24 months before the lien date and that is reflected in the property record maintained by the county auditor or fiscal officer should not be presumed to be recent when a different value has been determined for that lien date as part of the six-year reappraisal. Instead, the proponent of the sale price as the value should come forward with evidence showing that market conditions or the character of the property has not changed between the sale date and lien date.

139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, at ¶ 26. In the absence of such a rule, we observed, "the fiscal officer's duty to conduct an accurate reappraisal every six years would be impaired by sales too remote to be relevant." Id. at ¶ 27.

{¶ 16} In this case, the BTA began by correctly citing Cummins , 117 Ohio St.3d 516, 2008-Ohio-1473, 885 N.E.2d 222, at ¶ 35, for the proposition that the recency inquiry must account for more than just temporal proximity. But then the BTA remarked: "Nevertheless, as a sale becomes more distant in time from a tax lien date, 'the proponent of the sale price as the value should come forward with evidence showing that market conditions or the character of the property has not changed between the sale date and lien date.' " BTA No. 2015-423, 2015 Ohio Tax LEXIS 4411, *5-6 (Dec. 30, 2015), quoting Akron at ¶ 26. Following this remark, the BTA tersely concluded that the sale of the subject property was too remote from the tax-lien date. Both sides agree that the BTA's ruling in effect establishes a per se rule requiring the proponent of a sale price to prove recency by presenting additional evidence whenever a sale postdates the tax-lien date by more than 24 months.

{¶ 17} The BTA's analysis rests on a misreading of our holding in Akron . Specifically, the BTA excised the holding's first sentence, replaced it with general language of its own, and then linked that general language with the holding's second sentence. The BTA thereby suggested that the presumption of recency does not attach to a sale that postdates the tax-lien date by more than 24 months. But that is not what we held in Akron . By its express terms, Akron applies when the sale occurs more than 24 months before the tax-lien date of a reappraisal year and is reflected in the property record. Akron at ¶ 26. When those facts are present and the county auditor determines a different value in the reappraisal, the sale does not enjoy a presumption of recency. Id. Here, in contrast, Lone Star's sale occurred after the tax lien-date, and for that reason alone, Akron should not have controlled the BTA's analysis.

{¶ 18} It might be argued that Akron's 24-month rule should be understood to extend the 24-month period in each direction from the tax-lien date. But Justice Kennedy's concurring opinion in Akron suggests that it would be a mistake to apply the decision that way. As she explained, Akron's 24-month rule reflects that an "earlier sale was already taken into account, but found not to be probative because of a perceived change in the market." 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, at ¶ 43 (Kennedy, J., concurring). Continuing, she noted that when a sale postdates the tax-lien date of a reappraisal year, the 24-month rule may not apply because that sale could not have been accounted for by the reappraisal. "Arguably, a later sale constitutes brand new evidence that might call for reconsidering the question of value for the past year." Id.

{¶ 19} Guided by that logic, we conclude that a facially qualifying sale, like the one presented by Lone Star here, still enjoys a presumption of recency even when it postdates the tax-lien date by more than 24 months. We thus reverse the BTA's contrary conclusion that Lone Star was required to present additional evidence showing that either market conditions or the character of the property had remained the same between the sale date and the tax-lien date. It follows that when the proponent of a sale price furnishes facially qualifying evidence of the sale, as Lone Star did here, it becomes the opponent's burden on rebuttal to disprove the sale's presumptive recency. Here, the BOE presented no such rebuttal evidence, and the presumption therefore remains intact.

A remand to consider additional evidence is unnecessary

{¶ 20} At oral argument, the BOE asserted for the first time in this case that if this court does not endorse the BTA's analysis, then the case should be remanded to permit the BOE to present evidence showing that the sale was not characteristic of true value. This argument rests on the premise that a departure from the BTA's reasoning would mark a change in preexisting law. Given the argument's belated nature, we find that it has been forfeited. See State v. Roberts , 150 Ohio St.3d 47, 2017-Ohio-2998, 78 N.E.3d 851, ¶ 85.

{¶ 21} Were we to reach the BOE's argument, we would not find it persuasive. The bright-line rule that we articulated in Akron constitutes a limited exception to the general rule that a facially qualifying sale enjoys a presumption of recency. That Akron itself was a departure and a clarification is made evident by our ordering a remand in that case for the presentation of additional evidence. 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004, at ¶ 28-29. Our decision today, in contrast, adheres to rules of law that find expression in a burden-shifting framework that by now has become commonplace. Moreover, the BOE's implication that it abstained from making an evidentiary presentation in reliance on BTA precedent applying Akron , which at the time consisted of a single case with a roughly six-month vintage, carries little weight.

CONCLUSION

{¶ 22} For the foregoing reasons, we reverse the BTA's decision and remand the case with instructions that the BTA use the sale price to value the property for tax year 2012.

Decision reversed and cause remanded.

O'Connor, C.J., and O'Donnell, Kennedy, Fischer, and DeWine, JJ., concur.

French, J., concurs in judgment only.

DeGenaro, J., not participating.

      The BOE raises a familiar, and by now discredited, set of arguments urging us not to conclude that Lone Star triggered the presumption that its sale occurred at arm's length. It attacks Lone Star for failing to present a witness to testify about the circumstances giving rise to the sale, and it avers that because it lacks access to evidence that could prove whether a sale was transacted at arm's length, it was incumbent on Lone Star as a party to the sale to furnish a witness to describe the underlying circumstances of the sale. But "a taxpayer-complainant does not need to appear at the board-of-revision hearing to satisfy his initial burden." Dauch , 149 Ohio St.3d 691, 2017-Ohio-1412, 77 N.E.3d 943, at ¶ 17. And the BOE is not "powerless" to rebut the presumption that a sale occurred at arm's length. Id. at ¶ 21 (noting discovery tools that a litigant may avail itself of in a real-property-valuation proceeding). At bottom, then, it was the BOE's burden to present rebuttal evidence to disprove the arm's-length nature of the sale. Id. at ¶ 23. The BOE furnished no such evidence, and we therefore conclude that the presumption remains intact with respect to this element.

      The BTA issued Margaret Realty Co. v. Cuyahoga Cty. Bd. of Revision , BTA No. 2014-1251, 2015 WL 1966810, on April 28, 2015, and the BTA held its hearing in this case on November 4, 2015. The other two BTA decisions cited by the BOE were issued after that hearing. See 1033 Brentnell, L.L.C. v. Franklin Cty. Bd. of Revision , BTA No. 2015-667, 2016 WL 2933383 (Feb. 18, 2016); Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision , BTA No. 2014-3918, 2015 WL 10936019 (Dec. 3, 2015).


text:
    ARBORS EAST RE, L.L.C., Appellant, v. FRANKLIN COUNTY BOARD OF REVISION et al., Appellees.
    No. 2015-1410
    Supreme Court of Ohio.
    Submitted December 5, 2017 Decided April 26, 2018
    Wayne E. Petkovic, for appellant.
    Rich & Gillis Law Group, L.L.C., Mark H. Gillis, and Karol C. Fox, Dublin, for appellee Columbus City Schools Board of Education.
   Per Curiam.

{¶ 1} At issue is the 2011 value, with carryover to 2012 and 2013, of a nursing home that was purchased by its former lessee in April 2011. The parties dispute whether and to what extent the sale price, $7,490,000, ought to have been allocated to assets other than the real estate. The Franklin County Board of Revision ("BOR") ordered a reduction in value to $7,202,900 after making a small deduction for furniture, fixtures, and equipment ("FF&E") (i.e., tangible personal property). On appeal, the Board of Tax Appeals ("BTA") reinstated the entire sale price as the value of the real estate. Arbors East has appealed, asserting that the BTA improperly failed to make allocations in accordance with the appraisal report it submitted below. Because we find that the BTA neglected to exercise its statutory authority to obtain a complete record, and because it predicated its decision in part on legal errors, we vacate the BTA's decision and remand the case for further proceedings consistent with this opinion.

I. Course of proceedings

{¶ 2} The county auditor valued the subject property for tax year 2011, a reappraisal year in Franklin County, at $4,000,000. Appellee Columbus City Schools Board of Education ("the BOE") filed a valuation complaint seeking an increase to the full sale price of $7,490,000; thereafter, Arbors East filed a separate original complaint seeking a reduced valuation of $3,500,000.

{¶ 3} At the consolidated BOR hearing, the BOE relied on the conveyance-fee statement, which showed the entire sale price of $7,490,000 allocated to the realty. Also in evidence was a Purchase and Sale Agreement relating to the sale, and a deed. Arbors East presented an appraisal report and testimony from Samuel D. Koon, a member of the Appraisal Institute.

{¶ 4} Whether to use the sale price is not in dispute; the controversy lies in whether and how to allocate that sale price among assets. Koon noted that on the 2011 tax-lien date, Nationwide Health Properties, Inc., owned the property but that Arbors East purchased it on April 5, 2011. Koon testified before the BOR that he had investigated the transfer and determined that the sale was "an arms-length transaction of a going concern." He specifically testified,"That is what the property-owner contact told us, is that this was a transfer of a going concern." According to Koon, the components of the transfer were the real property, the FF&E, and the business goodwill, "mingled together" to constitute a going concern.

{¶ 5} Koon compared recent sales of comparable nursing homes to arrive at a going-concern value of the subject property as of the January 1, 2011 tax-lien date equal to the April 2011 sale price. Thereafter, he allocated that value on the understanding that the present sale, like the sales of the comparable properties, constituted a sale of all the assets of the nursing-home business, including licenses, FF&E, and goodwill. Using cost schedules and market-extraction techniques, Koon determined the portions of the total sale price of the subject property allocable to FF&E ($300,000), certificate of need ($1,800,000), and business value ($750,000-about 10 percent of the sale price). The residual amount, Koon's "real estate value," of $4,640,000 constituted about 62 percent of the total sale price, which correlated well with his comparable transactions, in which the realty constituted on average 52.8 percent of the total sale price.

{¶ 6} Toward the end of the BOR hearing, the BOR examined William McVeigh, the property-tax manager for Extendicare, the parent company of Arbors East and the ultimate owner/operator of the facility. McVeigh, who is also tax manager for numerous other nursing homes in Ohio, testified that the sale of a nursing home typically, as in this case, involves the sale of the "operator's lease" with all the attendant licenses necessary to operate the nursing home-a "realty plus" transaction. McVeigh further testified that under prior law, the documentation of such sales was drafted to reflect real estate without other assets because real-estate investment trusts "weren't allowed to * * * call [their holdings] anything but real estate."

{¶ 7} The Purchase and Sale Agreement refers to the property transferred as the "Leased Property" as defined in the lease between Arbors East and the seller, but the lease was never placed into evidence. Arbors East submitted to the BOR amendments to the lease after the hearing, but the BOR did not include them in the record certified to the BTA. The BOR did include a settlement statement in the record, a one-page document indicating a "total consideration" of $7,490,000. Conspicuously absent from the record is any evidence of an allocation of the sale price to multiple assets that was contemporaneous with the sale; indeed, both Koon and McVeigh testified that no contemporaneous allocation had been performed.

{¶ 8} At the BOR hearing, the BOE objected to the BOR's consideration of Koon's appraisal report on the grounds that there had been a recent, arm's-length sale of the subject property. The BOE also objected, on hearsay grounds, to Koon's testimony that he had been told that the April 2011 sale was of a going concern.

{¶ 9} On October 14, 2014, the BOR convened to determine the subject property's value. The auditor's delegate stated that "the panel wants to make it clear for the record that * * * the price paid for this property as recorded was the price paid for the going concern." In arriving at that conclusion, the BOR relied on "additional documentation that was requested and received from the property owner, all but the original lease agreement, which [it] did not receive." The auditor's delegate stated that the additional documentation included the lease amendments and a "Schedule D-1 analysis of property, plant, and equipment, which was part of [Arbors East's] federal-tax-filing materials." Relying on the Schedule D-1, which "conforms with Mr. Koon's appraisal report," the BOR made a deduction of $287,100-that being the "net book value as reported to the IRS" of certain personal property.

{¶ 10} After the deduction, the adjusted sale price indicated that the real-estate value was $7,202,900, and the BOR adopted that amount as the property value for tax years 2011, 2012, and 2013. The treasurer's delegate noted that Arbors East "did not really prove * * * any other deductions were warranted," inasmuch as the record did not contain an allocation contemporaneous with the sale and Koon's allocation was performed "well after the sale." The delegate also alluded to the existence of a contemporaneous appraisal (not in the record), but because "it was also based on the going-concern value," he was unsure "how it would support breaking out those other elements to the sale other than" the FF&E that the BOR deducted from the sale price.

{¶ 11} When Arbors East appealed to the BTA, neither side offered additional evidence. After the parties briefed the case, the BTA issued its decision, which noted that the BOR had received additional documents from Arbors East after the hearing-namely, the lease amendments and the federal tax filing-and that although the BOR relied on at least one of the documents, the documents were not included in the record certified by the BOR to the BTA. BTA Nos. 2014-4527 and 2014-4607, 2015 Ohio Tax LEXIS 3201, *4 (July 30, 2015).

{¶ 12} The BTA determined that the $7,490,000 sale price should be regarded as the best evidence of value. Noting the property owner's burden to demonstrate that its allocation of the sale price is proper in order to obtain a reduction from the sale price, the BTA held that Arbors East had not satisfied that burden inasmuch as (1) "all documentation submitted to the county auditor reflects a value for realty only" and (2) there was no contemporaneous allocation of the sale price. Id. at *10. The BTA found itself "unable to verify which items other than the real property described in the sale documents in fact transferred or the portion of the overall purchase price attributable to those items." Id. at *11. Moreover, the BTA rejected any allocation to goodwill because "the Supreme Court [of Ohio] has found [goodwill] is not an asset separable from the realty." Id . at *11-12. Accordingly, the BTA adopted the total sale price of $7,490,000 as the property value for tax years 2011, 2012, and 2013.

II. Standard of review

{¶ 13} Our review of a legal issue is de novo, not deferential. Akron Centre Plaza, L.L.C. v. Summit Cty. Bd. of Revision , 128 Ohio St.3d 145, 2010-Ohio-5035, 942 N.E.2d 1054, ¶ 10. But if we determine that there was no legal error, we review the BTA's decision concerning the weighing of appraisal evidence under a highly deferential abuse-of-discretion standard. See 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, ¶ 9, 14. Our discernment of multiple legal errors in this appeal leads us to remand this case to the BTA for additional fact-finding.

III. Analysis

A. The BTA did not find that the sale involved only real estate but did reject any allocation

{¶ 14} The BTA rejected any allocation of the April 2011 sale price to assets other than realty because it was "unable to verify which items other than the real property described in the sale documents in fact transferred or the portion of the overall purchase price attributable to those items." 2015 Ohio Tax LEXIS 3201 at *11. Notably absent in the BTA's decision is any finding that the sale involved a transfer of real estate only. Although the BTA observed that "all documentation submitted to the county auditor reflects a value for realty only," id . at *10, referring to the deed and the conveyance-fee statement, the BTA did not extend that finding to the totality of the evidence, including the record developed before the BOR.

{¶ 15} Nor is it surprising that the BTA stopped short of determining that the April 2011 sale price in fact reflected the transfer of merely real estate: the BOR had specifically determined based on the entire record before it that the sale price was "the price paid for the going concern," and it had ordered a deduction for FF&E based on documentation that was not included in the record certified to the BTA.

B. The BTA's authority to investigate should be employed to obtain a complete record in order to avoid prejudice to the parties

{¶ 16} This case implicates the principles used to determine how real estate is valued when it is transferred in a single transaction together with other property. When applied to such "bulk sales," the familiar precept that "[t]he best evidence of the 'true value in money' of real property is an actual, recent sale of the property in an arm's-length transaction" has a corollary: the principle that the law favors a "proper allocation of [a] lump-sum purchase price" over "an appraisal ignoring the contemporaneous sale." Conalco, Inc. v. Monroe Cty. Bd. of Revision , 50 Ohio St.2d 129, 363 N.E.2d 722 (1977), paragraphs one and two of the syllabus. That this fundamental principle applies here is undisputed; the only question is the propriety of the allocation presented by the owner. And Koon's appraisal was offered for the purpose of showing that the sale price reflected the transfer of a going concern, with a view to demonstrating a proper allocation.

{¶ 17} Under these circumstances, it is essential that the BTA confront the issue of the propriety of an allocation of the sale price by consulting all of the evidence that has been submitted to the BOR, in addition to any evidence submitted at the BTA hearing. R.C. 5717.01 requires the county boards of revision to transmit to the BTA "all evidence offered in connection" with a valuation complaint, and we have admonished that county boards of revision should regard this as their legal duty. Knickerbocker Properties, Inc. XLII v. Delaware Cty. Bd. of Revision , 119 Ohio St.3d 233, 2008-Ohio-3192, 893 N.E.2d 457, ¶ 4, fn. 1. We have also found plain error when the BTA adopts an appraisal's valuation after a board of revision has failed to certify potentially material portions of the record on which it relied, or may have relied, in rejecting the appraisal. Cannata v. Cuyahoga Cty. Bd. of Revision , 147 Ohio St.3d 129, 2016-Ohio-1094, 62 N.E.3d 144, ¶ 19. Additionally, the BTA's duty to perform its independent evaluation of all the pertinent evidence is well established. 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, ¶ 13 ; see, e.g. , Columbus Bd. of Edn. v. Franklin Cty. Bd. of Revision , 76 Ohio St.3d 13, 16, 665 N.E.2d 1098 (1996).

{¶ 18} Here, the property owner obtained a partial reduction at the BOR based on evidence that the BOR failed to transmit to the BTA. This evidence apparently assisted in persuading the BOR both that the sale of the property was a going-concern sale and that there was a sufficient basis for allocating a portion of the sale price to FF&E. It is true that Arbors East did not avail itself of its opportunity at the BTA hearing to make sure that the record was complete. But like the board of education in Cannata , Arbors East here could reasonably rely on the BOR's statutory duty to transmit all evidence submitted to it. When the BTA ascertains that evidence is missing, it should notify the parties and exercise its statutory authority to investigate pursuant to R.C. 5717.01. See Cannata at ¶ 21. Here, the BTA could have convened a new hearing and invited the submission of the omitted evidence, issued an order to the BOR, or both. On remand, the BTA should exercise its authority to supplement the record with the omitted documents or with any other evidence the BTA deems material to its determination.

C. When the record permits, the business value of a nursing home or congregate-care facility should be separated from its real-estate value

{¶ 19} The case law clearly establishes that a sale of a congregate-care facility is a sale of the facility's real-estate and business activities. Dublin Senior Community Ltd. Partnership v. Franklin Cty. Bd. of Revision , 80 Ohio St.3d 455, 460, 687 N.E.2d 426 (1997). Such facilities charge residents for providing care and services, which is a general business activity, and charge rent, which is a real-estate activity. Id. "In a valuation of only the real estate, the two activities must be kept separate." Id. ; accord Health Care REIT, Inc. v. Cuyahoga Cty. Bd. of Revision , 140 Ohio St.3d 30, 2014-Ohio-2574, 14 N.E.3d 1009, ¶ 41-42 (lead opinion); LTC Properties, Inc. v. Licking Cty. Bd. of Revision , 133 Ohio St.3d 111, 2012-Ohio-3930, 976 N.E.2d 852, ¶ 21.

{¶ 20} Viewing the present appeal against the backdrop of this case law leads us to conclude that the BTA erred by holding as a matter of law that any allocation to goodwill is improper. The decision the BTA relied on, Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision , 128 Ohio St.3d 565, 2011-Ohio-2258, 949 N.E.2d 1, is inapposite, as is St. Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. of Revision , 115 Ohio St.3d 365, 2007-Ohio-5249, 875 N.E.2d 85, the decision Hilliard City Schools itself relies on.

{¶ 21} While both cases concerned the proper allocation of a sale price, Hilliard City Schools involved the sale of a hotel and St. Bernard Self-Storage involved the sale of a self-storage facility. The BTA's finding in Hilliard City Schools that most of the income was derived from room rentals led us to observe that the goodwill associated with the hotel facility was presumably not "a separable asset that is distinct from the realty." Hilliard City Schools at ¶ 33. In so stating, we cited St. Bernard Self-Storage , in which the BTA found that the business of leasing storage space and the income generated from that business meant that a "business value" associated with the storage facility could not be severed from the realty or transferred separately, St. Bernard Self-Storage at ¶ 24-25. Both of those cases involved businesses that derived profit by permitting others to use real estate. Neither of those decisions speaks to the materially different circumstance of the sale of a nursing home, with its business value that is separable from real-estate value. The BTA therefore erred by regarding those decisions as controlling here.

D. The case law does not prohibit an allocation of sale price merely because there is no documentation of an allocation contemporaneous with the sale

{¶ 22} The BTA in this case laid great weight on the absence of a contemporaneous allocation of the sale price to the assets sold. It is true that the case law attaches importance, when allocating the sale price among various bulk-sale assets, to "corroborating indicia" or the "best available evidence" that is associated with matters contemplated by the parties at the time of sale. Sapina v. Cuyahoga Cty. Bd. of Revision , 136 Ohio St.3d 188, 2013-Ohio-3028, 992 N.E.2d 1117, ¶ 18, 37, 41 (mortgage loan secured by the real property was within the contemplation of the parties and constituted corroborating evidence that supported an allocation to the real estate); Hilliard City Schools at ¶ 26-27 (allocation to personal property set forth in lender's contemporaneous appraisal was evidence of the "value the parties attached to the personal property in connection with the sale of the hotel as a going concern" and accordingly furnished corroborating evidence); accord W.S. Tyler Co. v. Lake Cty. Bd. of Revision , 57 Ohio St.3d 47, 49, 565 N.E.2d 826 (1991) (fact that allocation was negotiated by the parties militated in favor of affirming reliance on that allocation).

{¶ 23} On the other hand, we have stated that "negotiation of the allocation itself is neither a necessary nor a sufficient condition for concluding that the allocation reflects the value of the constituent properties." Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision , 132 Ohio St.3d 371, 2012-Ohio-2844, 972 N.E.2d 559, ¶ 26. Most significantly, we recently found an abuse of discretion by the BTA when it failed to consider after-the-fact appraisal evidence offered to demonstrate that the original allocation set forth on the conveyance-fee statement did not reflect the true value of the real-estate component of the sale. Buckeye Terminals, L.L.C. v. Franklin Cty. Bd. of Revision , 152 Ohio St.3d 86, 2017-Ohio-7664, 93 N.E.3d 914, ¶ 35. Here as well, appraisal testimony was offered to show that the original report of the total sale price on the conveyance-fee statement did not reflect the property value. And the appraisal here is particularly incisive, given that its examination of the market involves not merely a valuation of the real-estate component but also a justification for viewing the total sale price as consisting of realty and nonrealty components.

E. On remand, the BTA shall determine whether-and if so, what portion of-the sale price should be allocated to assets other than real estate

{¶ 24} Our determination that the BTA's decision is marred by legal error requires that we vacate the decision and remand the case for further proceedings.

On remand, the BTA will confront three tasks. First, the BTA will need to exercise its authority to obtain a complete record for deciding the case, as we have previously discussed. Second, the BTA must determine whether there is adequate support in the record to find that any of the consideration paid by Arbors East was for assets other than real estate. Third, if the record supports the conclusion that the sale was a "bulk sale" in the relevant sense, the BTA will need to determine the proper allocation of the sale price.

IV. Conclusion

{¶ 25} For the foregoing reasons, we vacate the decision of the BTA and remand the case for further proceedings consistent with this opinion.

Decision vacated and cause remanded.

O'Connor, C.J., and O'Donnell, Kennedy, French, Fischer, and DeWine, JJ., concur.

DeGenaro, J., not participating.

      Koon stated that the "Leased Property" referred to in the purchase contract was limited to the real estate, but the purchase contract does refer to a bill of sale for the conveyance of "Landlord Personal Property" to Arbors East in conjunction with the sale.