[Cite as Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 130
Ohio St.3d 291, 2011-Ohio-5078.]




  VANDALIA-BUTLER CITY SCHOOLS BOARD OF EDUCATION, APPELLANT, v.
       MONTGOMERY COUNTY BOARD OF REVISION ET AL., APPELLEES.
 [Cite as Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of
                 Revision, 130 Ohio St.3d 291, 2011-Ohio-5078.]
Taxation—Real-property valuation—Board of Tax Appeals erred in deferring to
        Board of Revision’s decision to order the value reduction, rather than
        relying on its own independent valuation of the evidence as required by
        law—Decision of Board of Tax Appeals vacated, and cause remanded.
    (No. 2009-1763—Submitted August 8, 2011—Decided October 5, 2011.)
            APPEAL from the Board of Tax Appeals, No. 2007-M-1022.
                                __________________
        Per Curiam.
        {¶ 1} In this appeal the Vandalia-Butler City Schools Board of
Education (“school board”) challenges a decision of the Board of Tax Appeals
(“BTA”) in which the BTA affirmed and adopted the Montgomery County Board
of Revision’s (“BOR’s”) reduced valuation of a hotel. The school board contends
that the BTA erred by according deference to the BOR’s decision rather than
relying on its own independent weighing of the evidence.
        {¶ 2} We agree with the school board. We therefore vacate the BTA’s
decision and remand so that the BTA can determine whether there is sufficient
evidence to permit it to perform an independent valuation of the property.
                                         Facts
        {¶ 3} The property at issue consists of 1.8210 acres improved with a
32,060-square-foot hotel. The auditor assigned a true value of $2,096,320 for tax
year 2006. The owner, Bajarangi Corporation, filed a complaint against valuation
on March 28, 2007, seeking a reduction of true value to $1,468,000. The school
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board filed a countercomplaint seeking to retain the auditor’s valuation. Prior to
the BOR hearing, Ratilal Patel, who identified himself as the owner and president
of Bajarangi, submitted a letter dated March 9, 2007, setting forth general
contentions in support of the complaint and attaching an “[a]ppraisal report as of
2007.”
         {¶ 4} On August 2, 2007, the BOR held a hearing on the complaint. The
record of that hearing consists of terse handwritten notes, which indicate that the
owner presented an appraisal that certified an opinion of $1,488,000 “exclusive of
FFE (i.e., the furniture, fixtures, and equipment).”1 Patel appeared on behalf of
the owner to present the appraisal and to offer testimony. According to the
handwritten notes, Patel testified that “[h]otel performance [was] going down
every year” and that the subject property had incurred “exorbitant expenses.” The
hearing notes assert that the property is “[c]urrently listed @ 1.5 million” and
indicate that Patel would be “happy to sell @ 1.3 million.” In June 2007, a
prospective buyer offered $1.4 million, but the offer was contingent on $150,000
of improvements, and the deal fell through. The property was purchased in 2002
for $1.9 million, an allegedly fair price at that time. Occupancy was said to be
approximately 35 percent.
         {¶ 5} The notes reflect that the school board objected to the appraisal
report as hearsay “because the appraiser wasn’t here to question.” The notes then
state that “P&L” (presumably profit and loss) documentation is contained in the
appraisal report and that the occupancy rate was 46 percent “[w]hen purchased.”
         {¶ 6} The BOR’s September 7, 2007 decision is documented by the
hearing notes. The BOR decided to assign a value of $1,499,080 to the property,

1. A board of revision must “take full minutes of all evidence given before the board, and it may
cause the same to be taken in shorthand and extended in typewritten form.” R.C. 5715.08. When
a board of revision elects to preserve the hearing in the form of minutes without preparing a
transcription or maintaining an audio record of the proceedings, that decision potentially affects
the ability of the BTA to evaluate the evidence presented to the board of revision, since the BTA
will have a mere summary rather than the actual testimony in its full extent.




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“per CLT review & recommendation.” At oral argument, counsel for the county
explained that “CLT” refers to the appraisal firm used by the county in valuing
real property. The notes do not reflect any ruling on the school board’s objection
to the appraisal.
        {¶ 7} On one page of the property-record card, handwritten numbers
appear that are apparently intended to substitute for the printed numbers used in
determining value under the income approach. Specifically, the “ECO ADJ”
figure of 84 percent under “EST ECONOMIC INCOME” was crossed out and
changed to 75.8 percent, while the 100 percent “ECO ADJ” figure under
“VACANCY AND CREDIT LOSS” was changed to 20 percent. Finally, under
“OPERATING/DEPARTMENTAL EXPENSES,” the “ECO ADJ” figure is
changed from 100 percent to 90 percent. There are no such handwritten notations
on the separate page that reflects the ultimate determination of value according to
the income approach.
        {¶ 8} The school board appealed to the BTA, and the BOR certified a
record that did not include the appraisal report referred to in the hearing notes.
On December 19, 2008, the BTA held a hearing at which only the school board
appeared. At that hearing, counsel for the school board argued that “there was
insufficient evidence to support the reduction in value.” The school board also
filed a brief at the BTA, renewing its claim of insufficient evidence and
expressing its concern that “even though the BOR excluded the appraisal from the
record, the BOR’s notes indicate that it still relied upon the report in reducing the
value of the subject property.”      The brief additionally pointed out that the
taxpayer had informed the BOR that the appraisal report valued the property “as
of” 2007 rather than as of the tax-lien date, January 1, 2006.
        {¶ 9} On September 1, 2009, the BTA issued its decision. The BTA
canvassed the sparse evidence in the record. The board noted the handwritten
notations on the property-record card and stated that the “modifications reduce the



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annualized potential gross rent and ‘ECO’ adjustments, apparently consistent with
the testimony presented at the BOR hearing.” Vandalia-Butler City Schools Bd.
of Edn. v. Montgomery Cty. Bd. of Revision (Sept. 1, 2009), BTA No. 2007-M-
1022, at 3, 5. The BTA then noted that the school board “presented no evidence
contradicting the loss of income suffered by the property or the adjustments made
by the BOR.” Id. at 5. After reviewing case law, the BTA articulated the issue as
whether there was sufficient evidence to support the BOR’s reduction in value.
Id. at 7.
        {¶ 10} As for the evidence itself, the BTA stated, “[W]e would find little
evidentiary support for the BOR’s value herein.” Id. at 6.          The board then
characterized the record as containing “limited evidence to support the valuation
adopted by the BOR” and described that evidence as being of a type previously
rejected by the board. Id. at 7. In spite of these deficiencies in the evidence, the
BTA ultimately adopted the BOR’s valuation. The stated grounds for doing so
were twofold. First, the “BOR saw fit to reduce the subject’s valuation, while not
to the value opined by the property owner, but to a value lower than that which
the auditor had determined.” Id. Second, “the auditor must have conceded to the
reduced valuation for the subject, since there is no indication in the record that the
auditor attempted to defend and/or maintain the auditor’s original valuation.” Id.
        {¶ 11} The school board has appealed, and we now vacate and remand.
                                      Analysis
        {¶ 12} The BTA is responsible for determining factual issues, but we
“ ‘will not hesitate to reverse a BTA decision that is based on an incorrect legal
conclusion.’ ” Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856
N.E.2d 954, ¶ 14, quoting Gahanna-Jefferson Local School Dist. Bd. of Edn. v.
Zaino (2001), 93 Ohio St.3d 231, 232, 754 N.E.2d 789. In the present case, the
school board asserts that the BTA erred by presuming the validity of the BOR’s
value determination rather than independently weighing the evidence to arrive at




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its decision. In response, the county contends that because evidence presented to
the BOR tended to negate the validity of the auditor’s determination, the BTA
could not revert to that valuation without contravening the holding of Dayton-
Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d
281, 2007-Ohio-1948, 865 N.E.2d 22 (“Dayton”).            The dispute in this case
therefore presents us with a claim of legal error by the school board as appellant
and a claim by the county that legal principles dictated the decision that the BTA
reached.
        I. The BTA erred by deferring to the BOR’s determination rather than
                relying on its independent evaluation of the evidence.
         {¶ 13} We agree with the school board that the BTA failed to discharge its
duty to base its decision on an independent weighing of the evidence. It is well
settled that when the BTA reviews a board-of-revision decision based upon the
record developed before that tribunal, the BTA has the duty to “ ‘independently
weigh and evaluate all evidence properly before it’ ” in arriving at its own
decision. 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, ¶ 17, quoting Columbus Bd. of
Edn. v. Franklin Cty. Bd. of Revision (1996), 76 Ohio St.3d 13, 15, 665 N.E.2d
1098 (BTA must reach its “own independent judgment based on its weighing of
the evidence contained in [the BOR] transcript”). Equally well established is the
proposition that “decisions of boards of revision should not be accorded a
presumption of validity.”      Colonial Village, Ltd. v. Washington Cty. Bd. of
Revision, 114 Ohio St.3d 493, 2007-Ohio-4641, 873 N.E.2d 298, ¶ 23, citing
Columbus Bd. of Edn. at 15 and Springfield Local Bd. of Edn. v. Summit Cty. Bd.
of Revision (1994), 68 Ohio St.3d 493, 494, 628 N.E.2d 1365.              Read in
conjunction, these two principles foreclose the approach taken by the BTA in this
case.




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         {¶ 14} Quite simply, the BTA’s crucial error in this case lay in its
exclusive reliance on the BOR’s evaluation of the evidence rather than its own.
The property owner, Bajarangi Corporation, sought a reduction in value and
presented oral testimony by Patel and an appraisal report at the BOR hearing.
The BTA’s evaluation of this evidence was decidedly negative: the board stated,
“[W]e would find little evidentiary support for the BOR’s value herein,” BTA No.
2007-M-1022 at 6, characterized the record as containing “limited evidence to
support the valuation adopted by the BOR,” and pronounced the evidence to be
of a type that the board had previously rejected. Id. at 7. In deciding to retain the
value found by the BOR, the BTA placed sole reliance on the bare fact that “the
BOR saw fit to reduce the subject’s valuation, while not to the value opined by
the property owner, but to a value lower than that which the auditor had
determined,” along with the lack of any “indication in the record that the auditor
attempted to defend and/or maintain the auditor’s original valuation.” Id. at 7. 2
In other words, even though the BTA itself was unpersuaded by the evidence, it
adopted the BOR’s reduction of value on the grounds that the BOR was
persuaded. That constitutes the very deference that the case law prohibits.
         {¶ 15} Moreover, although Bajarangi Corporation presented not only
Patel’s testimony but also an appraisal report, the report was objected to, and the
BOR did not include it in the certified record to the BTA. Nonetheless, the BOR
may have used it in arriving at its determination of the value of the property—an
option not open to the BTA, which did not have the appraisal report before it. In
addition to the fact that the BTA did not have before it a piece of evidence that


2. The BTA fails to explain why it believes that the auditor’s action or inaction in relation to the
adoption of a new value is important. The record does not disclose whether the auditor or his
delegate voted in favor of reducing the value of the property at issue, but that vote is not
necessarily material. The school board (not the auditor) instigated the appeal to the BTA, and the
BTA’s duty was to determine the value of the property based on the evidence. A vote by the
auditor to depart from his initial valuation would not by itself establish that the initial valuation
was wrong or that the reduced value was correct.




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may have been crucial to the BOR’s value determination, the BTA also erred by
adopting the BOR’s valuation without addressing the hearsay objection.
        {¶ 16} Finally, it is not insignificant that the BOR noted its reliance on
“CLT review & recommendation.” The county has explained that CLT is the
“appraisal firm that assists the county auditor in setting property values.” To the
extent that the appraisal firm presented new evidence to the BOR, the BTA did
not have the evidence itself before it, only a reference to it.
        {¶ 17} In opposing the school board’s argument, the county auditor and
the BOR contend that the BTA “did perform its obligation to weigh and evaluate
the evidence before the BOR, and did not merely presume that the BOR’s
decision was valid simply because the auditor failed to object to the decrease in
value.” While it is certainly true that the BTA discussed the evidence, we agree
with the school board that the BTA ultimately did not reach a conclusion
concerning the value of the property based on its own review of the evidence.
        {¶ 18} Indeed, we find the county’s interpretation of the BTA decision
incompatible not only with the words actually set forth in that decision, but also
with the absence of any specific explanation of how the value of $1,499,080 is
supported by the evidence. The BOR itself did not offer such an explanation, and
the BTA’s own failure to supply one demonstrates the high degree to which it
simply deferred to the BOR.
        {¶ 19} In sum, the BTA erred by deferring to the BOR’s decision to order
the value reduction, rather than relying on its own independent evaluation of the
evidence as required by case law.
     II. Case law requires the BTA to determine whether the record contains
               sufficient evidence to allow an independent valuation.
        {¶ 20} The county argues that the BTA acted reasonably and lawfully in
determining that “sufficient” evidence supported the BOR’s valuation, with the
result that the BTA was bound by the determination of the BOR. This argument



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rests upon the BTA’s own misreading of the case law. Specifically, the BTA
cited our decision in Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115
Ohio St.3d 449, 2007-Ohio-5237, 875 N.E.2d 913, for the principle that the
presence of “sufficient” evidence at the BOR required the BTA to defer to the
BOR’s valuation. BTA No. 2007-M-1022 at 7.
       {¶ 21} The BTA was mistaken, and the county’s argument has no merit.
It is true that the absence of sufficient evidence requires the BTA to reverse a
reduction or increase ordered by a board of revision. See Columbus City School
Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision (2001), 90 Ohio St.3d 564, 566-
567, 740 N.E.2d 276. But it does not follow that the presence of a particular
quantum of evidence requires the BTA to adopt the BOR’s valuation. The BTA’s
duty, as previously discussed, is to reach its “own independent judgment based on
its weighing of the evidence contained in the [board of revision] transcript.”
Columbus Bd. of Edn., 76 Ohio St.3d at 15, 665 N.E.2d 1098. Put differently, the
evidence for adopting the BOR’s valuation could be “sufficient” for purposes of
the BTA’s review if and only if the BTA independently concluded that the
evidence supports the very value found by the BOR. Here the language of the
BTA’s decision makes clear that the BTA reached no such independent
conclusion.
       {¶ 22} We must return this case to the BTA so that the BTA can apply the
analysis we articulated in Colonial Village, 123 Ohio St.3d 268, 2009-Ohio-4975,
915 N.E.2d 1196. In Colonial Village, we explained the larger framework of the
BTA’s duty when a valuation case has been appealed from a board of revision.
       {¶ 23} Contrary to the BTA’s decision and the county’s argument, our
earlier decision in Bedford Bd. of Edn., 115 Ohio St.3d 449, 2007-Ohio-5237, 875
N.E.2d 913, must be construed and applied within that framework. In Bedford,
the majority stated that the BTA erred “in reinstating the auditor’s determination
of value when the taxpayer had presented sufficient evidence to the BOR to




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justify the reduction the BOR ordered.” Id. at ¶ 15. The county defends the
BTA’s reading of Bedford and emphasizes the Bedford court’s heavy reliance on
Dayton, 113 Ohio St.3d 281, 2007-Ohio-1948, 865 N.E.2d 22. At oral argument,
the county’s counsel asserted that the evidence presented to the BOR foreclosed
reverting to the auditor’s original valuation because it tended to negate that
valuation.
         {¶ 24} Our decision in Colonial Village, 123 Ohio St.3d 268, 2009-Ohio-
4975, 915 N.E.2d 1196, shows that the BTA and the county are mistaken. Even if
some evidence tends to negate the auditor’s original valuation, it is proper to
revert to that valuation when the BTA finds that the owner has not proved a lower
value and there is otherwise “no evidence from which the BTA can independently
determine value.” (Emphasis added.) Simmons v. Cuyahoga Cty. Bd. of Revision
(1998), 81 Ohio St.3d 47, 49, 689 N.E.2d 22. In Simmons, this court held that
when a board of revision retained the auditor’s valuation and the BTA rejected the
owner’s evidence of a lower value, the BTA could properly “approve the board of
revision’s valuation, without the board of revision’s presenting any evidence.”3
In Dayton, we expressly distinguished Simmons and found that the record before
us did contain sufficient evidence to permit the BTA to perform an independent
valuation. Dayton at ¶ 15-16.




3. Our discussion also leads us to reject the county’s contention that the school board had the
burden to prove the validity of the auditor’s valuation at the BTA. While it is true that the party
that appeals to the BTA in a valuation case typically does bear the burden of showing a different
value, see Colonial Village, 123 Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d 1196, ¶ 23, the
school board’s appeal in this case rested upon a claim of legal error. In prosecuting such a claim,
the appellant’s burden is to show the presence of reversible error, and proof of a new value may
not be necessary when the appeal seeks a return to the auditor’s valuation. Id. at ¶ 31 (county does
not “acquire the burden of proving the general accuracy of the appraisals on which [it] initially
relied”); accord FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio
St.3d 485, 2010-Ohio-1921, 929 N.E.2d 426, ¶ 31, citing Colonial Village at ¶ 31 (auditor’s initial
determination of value for a given tax year “possesses an increment of prima-facie probative
force”).




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        {¶ 25} The Bedford court came to the same conclusion.                    Indeed, the
disagreement between the majority and the dissent in Bedford centered on
whether there was sufficient evidence to permit an independent valuation that
would justify a reduction. Bedford, ¶ 15 (majority concludes that “the taxpayer
had presented sufficient evidence to the BOR to justify the reduction the BOR
ordered”) and ¶ 18 (Moyer, C.J., dissenting) (“unlike in Dayton, there was no
evidence before the Board of Tax Appeals that permitted an independent
determination of value,” and that deficiency in the evidence “justifie[d] the Board
of Tax Appeals’ reversion to the auditor’s determination of value”).
        {¶ 26} In the present case, it follows that once the BTA had determined
that the record contained evidence tending to negate the county’s original
valuation, the BTA’s duty was to “determine whether the record as developed by
the parties contain[s] sufficient evidence to permit an independent valuation of the
property.” Colonial Village, 123 Ohio St.3d 268, 2009-Ohio-4975, 915 N.E.2d
1196, ¶ 25. When there is sufficient evidence to permit the BTA to perform an
independent valuation—as in Dayton and Bedford—the BTA must do so. Id. But
when there is not sufficient evidence to permit an independent valuation, the BTA
may properly revert to the county’s original determination of value, as in
Simmons.
        {¶ 27} The BTA erred by failing to determine whether sufficient evidence
existed to permit an independent valuation of the property. To be sure, the BTA’s
discussion of the evidence indicates the board’s dissatisfaction with the state of
the record. Indeed, the complete absence of the proffered appraisal report and any
analysis performed by CLT does leave gaps in the evidence before the BTA. But
the existence of those gaps does not relieve the BTA from the obligation to
independently weigh the evidence. 4

4. The BTA noted that the BOR has the duty to preserve the evidence presented to it pursuant to
R.C. 5715.08 and that the BOR should have certified the appraisal report as part of the record




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                                          Conclusion
         {¶ 28} The BTA unlawfully accorded a presumption of validity to the
BOR’s determination of value. We therefore vacate the BTA’s decision and
remand for the BTA to conduct further proceedings in accordance with the
foregoing opinion.
                                                                               Decision vacated
                                                                          and cause remanded.
         O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.
                                    __________________
         Rich & Gillis Law Group, L.L.C., Mark H. Gillis, and Karol Fox, for
appellant.
         Mathias H. Heck Jr., Montgomery County Prosecuting Attorney, and
Laura G. Mariani, Assistant Prosecuting Attorney, for appellees Montgomery
County Board of Revision and Montgomery County Auditor.
                                 ______________________




pursuant to R.C. 5717.01. Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of
Revision (Sept. 1, 2009), BTA No. 2007-M-1022, at 3-4, fn. 2. We agree. In particular, R.C.
5717.01 expressly requires that the BOR certify “all evidence offered in connection” with the
valuation complaint. The criterion for inclusion is that the evidence was offered, not admitted, and
that is significant given the de novo review at the BTA. Failure to certify the entire evidentiary
record may prejudice the interest of the proponents of omitted items, and therefore, boards of
revision should take care to comply with the statutory duty to certify the entire record. On
remand, the BTA will confront the question whether to order that the appraisal report be certified
by the BOR pursuant to R.C. 5717.01, along with the issue whether the appraisal ought to be
considered at all in light of the hearsay objection.




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