[Cite as Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188, 2013-Ohio-3028.]




         SAPINA ET AL., APPELLANTS, v. CUYAHOGA COUNTY BOARD OF
                             REVISION ET AL., APPELLEES.
     [Cite as Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188,
                                    2013-Ohio-3028.]
Taxation—Valuation of real property—Recent sale including unallocated
        personal property—Procedure when record demonstrates that value being
        appealed is wrong—Independent valuation by Board of Tax Appeals.
       (No. 2012-0883—Submitted May 7, 2013—Decided July 16, 2013.)
   APPEAL from the Board of Tax Appeals, Nos. 2009-K-667 and 2009-K-816.
                                ____________________
        Per Curiam.
        {¶ 1} In this real-property-valuation case, the taxpayers, Ivica and
Katarina Sapina, acquired a two-story building in 2006, with two storefronts
below and two residential apartments upstairs. The real property was sold to them
as part of the same contract by which they acquired a business on the first floor of
the building. Thus, the asset purchase included personal property (restaurant
equipment plus a covenant not to compete) as well as the realty.
        {¶ 2} For tax year 2007, the auditor used the entire aggregate purchase
price, $325,000, as the property value, even though that official had previously
determined the value for 2006 to be only $116,700. The Sapinas sought an
allocation of the purchase price to reduce the value of the realty, and the
Cuyahoga County Board of Revision (“BOR”) reduced the value to $175,000.
Both the owners and the Euclid City School District Board of Education (“school
board”) appealed to the BTA, which held a hearing and issued a decision
reinstating the $325,000 aggregate sale price as the value of the property.
                            SUPREME COURT OF OHIO




       {¶ 3} The Sapinas have appealed to this court, and we conclude that the
adoption of the full sale price is unreasonable and unlawful.       We therefore
exercise our authority pursuant to R.C. 5717.04 to order that the value be
modified to $160,000, an allocation supported by the mortgage loan secured by
the real property.
                                      Facts
                                A. Background
       {¶ 4} On December 1, 2005, Ivica and Katarina Sapina entered into a
purchase agreement under which the Sapinas acquired real property plus a
carryout restaurant. The real property consisted of a lot improved with a two-
story building in Euclid, Ohio. On the ground floor were two business spaces,
one of which was occupied by a carryout restaurant that the Sapinas acquired as
part of the deal. The other first-floor commercial space was vacant. Upstairs
were two residential apartments let to tenants. The sale was consummated in
February 2006.
       {¶ 5} The purchase agreement set a contract price of $325,000 for all of
the assets transferred under the agreement. Appended to the agreement is a list of
personal property acquired as part of the carryout business, which includes such
items as a walk-in cooler, two freezers, and metal tables for food preparation.
The purchase agreement also contains a two-year covenant not to compete by the
seller. But the agreement sets forth no allocation of the aggregate purchase price
to individual assets.
                        B. Proceedings before the BOR
       {¶ 6} Although the original updated valuation for tax years 2006 and
2007 had been $116,700, the school board obtained an increase to the full
aggregate sale price of $325,000 for tax year 2006, which the auditor then carried
forward to tax year 2007. On January 7, 2008, the Sapinas filed a valuation
complaint seeking a reduction to $125,000 for the 2007 tax year. The school




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board filed a countercomplaint, seeking retention of the full purchase price as the
value of the realty.
        {¶ 7} On February 11, 2009, the BOR held a hearing at which Katarina
Sapina appeared and testified. She also presented a written appraisal (but not
testimony) of Donald Durrah, which found a value of $120,000 as of January 27,
2009 (the tax-lien date was more than two years earlier, January 1, 2007). Durrah
performed a valuation under all three approaches and, placing the greatest weight
on income capitalization, reconciled to a value of $120,000 as of January 27,
2009.
        {¶ 8} Sapina presented additional documents at the BOR. First, she
introduced a mortgage dated February 24, 2006, which the Sapinas had given to
their credit union in conjunction with the asset purchase. The loan amount was
$160,000 of the $325,000 purchase price. Second, she presented correspondence
showing the Sapinas’ attempts to amend the purchase agreement by allocating
$160,000 to the realty and $165,000 to the personal property—although tendered
to the sellers, the amendment was never signed. Ms. Sapina testified that there
was no down payment, given the role of the credit union as mortgagee of the
Sapinas’ house.
        {¶ 9} Delegates at the BOR requested that Ms. Sapina do research and
work up a set of values for the used items of personal property listed on the
appendix to the purchase agreement, and she complied. According to Sapina’s
workup, the tangible personal property associated with the carryout business had a
value of about $38,172.60.
        {¶ 10} Apparently based on Sapina’s workup, a review of the appraisal,
and other evidence in the record, the BOR itself allocated $150,000 to personal
property and treated the remainder, $175,000, as the value of the realty. But the
exact method by which the BOR reached that number is obscure; the BTA could
not replicate the computation, and neither can we.



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                         C. Proceedings before the BTA
       {¶ 11} The BTA held a hearing at which the school board did not appear.
Ms. Sapina again appeared and testified. She also presented the written appraisal
report and testimony of Richard Linhart. Linhart performed an analysis under the
income and sales comparison approaches to valuation and arrived, after
reconciling the results of those two approaches, at a value of $100,000 as of
January 1, 2007. Linhart’s sole mention of the 2006 asset purchase was in a brief,
one-paragraph section devoted to the history of the property: Linhart noted that
the property was “transferred for $325,000” to the Sapinas, that the “sale of
$325,000 include [sic] the business and personal property ie; [sic] restaurant
equipment,” and that “[t]he sale is currently under protest by the owners due to
the inclusion of personal property with the real estate.” The appraisal otherwise
ignores the 2006 sale as a basis for determining the value of the realty as of
January 1, 2007.
       {¶ 12} At the BTA hearing, Linhart offered his opinion as to using the
$325,000 sale price as a basis for valuing the property: “After looking at the
Purchase Agreement I noticed all the personalty that was involved, including
fixtures, and goodwill, and the noncompete clause, which all is value—has value
to the subject business, not the real estate.”      Asked whether he thought the
$325,000 sale price was “excessive for the property” that he had been hired to
appraise, Linhart said, “For the real estate, yes, sir.” Asked whether he relied on
the sale price in preparing his appraisal, Linhart testified, “Not at all.” Later, the
hearing examiner asked Linhart what materials he had reviewed in conjunction
with the 2006 sale, and Linhart answered that he had reviewed the data in the
county’s database, and the sales contract itself. Linhart did not, however, review
the conveyance-fee statement.
       {¶ 13} By mail, the school board submitted a copy of the conveyance-fee
statement to the BTA prior to the hearing. The document shows $325,000 being




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reported as consideration for the real property, while indicating that $160,000 was
paid subject to a mortgage.
        {¶ 14} In its decision, the BTA cited the legal precepts that favor the use
of a recent, arm’s-length sale price over an appraisal and noted that although the
Sapinas had reported the entire $325,000 sale price as consideration paid for the
realty, they now sought to prove that the reported amount was inaccurate. Sapina
v. Cuyahoga Cty. Bd. of Revision, BTA Nos. 2009-K-667 and 2009-K-816, 2012
WL 1494009, *4 (Apr. 24, 2012). On the basis of the cited case law, the BTA
declined to accept the Linhart appraisal value. As for allocating the purchase
price, the BTA “[did] not question Ms. Sapina’s veracity or that items of personal
property may have also been acquired as part of the sale,” but nonetheless found
that “the evidence offered is insufficient to ‘unequivocally establish a basis for
allocating a portion of the sale price to the personal property that was
transferred.’ ” Id., quoting Olentangy Local Schools Bd. of Edn. v. Delaware Cty.
Bd. of Revision, 125 Ohio St.3d 103, 2010-Ohio-1040, 926 N.E.2d 302, ¶ 23. The
BTA also noted that the BOR had reduced the property value to $175,000, but
stated that it was “unable to discern upon what evidence the BOR relied in doing
so or replicate its finding of value.”     Id. The BTA therefore felt constrained to
reinstate the entire purchase price of $325,000 as the property value for tax year
2007.
                                         Analysis
        {¶ 15} “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 Board of Tax Appeals
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. But although the BTA
is responsible for determining factual issues, we “ ‘will not hesitate to reverse a



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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, 93 Ohio St.3d 231, 232, 754
N.E.2d 789 (2001). Pursuant to R.C. 5717.04, the statute that creates the remedy
of appeal to this court from decisions of the BTA, we may either reverse a
decision of the BTA or modify it if we find that the decision is unreasonable or
unlawful.
       {¶ 16} The present case confronts us with the issue whether the BTA
acted reasonably and lawfully when it adopted the entire 2006 sale price,
$325,000, as the value of the Sapinas’ property.         The primary alternative
advanced by the Sapinas was an appraisal of the real property that ignored the
2006 sale price and reached an opinion that the value was $100,000 on the tax-
lien date. The issue presents a mixed question of law and fact, which makes it
necessary to consider it within the legal framework developed in the case law for
bulk-sale cases.
            A. The BTA applied the wrong standard in evaluating the
            evidence concerning allocation of the aggregate sale price
       {¶ 17} The BTA declined to make an allocation of the purchase price on
the grounds that the record did not “unequivocally establish” the propriety of such
an allocation. The BTA derived that standard from Olentangy Local Schools, 125
Ohio St.3d 103, 2010-Ohio-1040, 926 N.E.2d 302, ¶ 23. But as the cited passage
from the decision shows, the property owner in Olentangy argued for an
allocation to personal property before the court, but had not advanced that
argument before the BTA. Id. at ¶ 24. Thus, Olentangy Local Schools involved
the application, on appeal, of a plain-error standard: because the owner had
waived allocation, only plain error could be corrected on appeal. 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, ¶ 20-21.




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                               January Term, 2013




       {¶ 18} By stark contrast, the Sapinas have consistently argued for
allocation. Accordingly, the applicable standard is whether the record contains
“corroborating indicia” or “best available evidence” that supports an allocation of
the aggregate purchase price. 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, ¶ 17 (“In
bulk-sale cases, we typically look for corroborating indicia to ensure that the
allocation reflects the true value of the property”); 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, ¶ 18, 27 (using “best available evidence” in the form of a bank appraisal
of personal property to determine allocation of asset purchase price to the
personal property).
       {¶ 19} Applying the more relaxed standard—that a proposed allocation
need only be “corroborated”—makes the proper inquiry a very different one.
     B. Using the entire aggregate sale price to value the realty was error
        1. Under the case law, an allocation of the aggregate sale price is
                  preferred to an appraisal that ignores the sale
                      a. Using sale price to determine value
       {¶ 20} At the time at issue in this case, former R.C. 5713.03 stated that
when “determining the true value of any tract, lot, or parcel of real estate,” the
county auditor in his role as tax assessor “shall consider the sale price of such
tract, lot, or parcel to be the true value for taxation purposes” if the sale was an
“arm’s length” one that had occurred “within a reasonable time, either before or
after the tax lien date.” (Emphasis added.) 1983 Am.Sub.H.B. No. 260, 140 Ohio
Laws, Part II, 2722. The court has construed this provision as a legislative
mandate that a recent arm’s-length sale price be used as the criterion of the
property’s value unless the opponent of using the sale price can mount a
successful challenge to the arm’s-length character or the recency of the sale. See
Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d



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516, 2008-Ohio-1473, 885 N.E.2d 222, ¶ 13, citing Berea City School Dist. Bd. of
Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 2005-Ohio-4979, 834
N.E.2d 782. That mandate entails the rejection of appraisal evidence of the value
of the property whenever a recent, arm’s-length sale price has been offered as
evidence of value. Id. 1
         {¶ 21} Dovetailing with the Berea line of cases is the case law addressing
the situation in which real property is transferred as part of a larger sale that
includes assets other than the parcel at issue—a situation that the court has
referred to as a “bulk sale” in a nontechnical sense.2 In the bulk-sale area, the
court has adhered to “two overarching principles.” 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, ¶ 17. First, the “ ‘best evidence of “true value in money” is the
proper allocation of the lump-sum purchase price and not an appraisal ignoring
the contemporaneous sale.’ ” Id., quoting Conalco, Inc. v. Monroe Cty. Bd. of



1. In their reply brief and at oral argument, the Sapinas argued that the court should apply the
version of R.C. 5713.03 as amended by Am.Sub.H.B. No. 487, effective September 10, 2012, as
itself amended by Am.Sub.H.B. No. 510, effective March 27, 2013. H.B. 487 amended R.C.
5713.03 to state that the auditor “may” use the arm’s-length sale price, rather than stating that the
auditor “shall” do so. On the one hand, this is a belated argument that would usually be barred by
not having been timely raised. However, the legislation is brand new, so the argument could not
have been raised earlier. In any event, we find that the amendment is inconsequential in this case.
If H.B. 487 and H.B. 510 constitute a clarification of prior law, we are justified in applying the
case law under former R.C. 5713.03 without according the new statute any great significance.
Alternatively, amended R.C. 5713.03 may have substantively changed the law—but if that is so,
the case law establishes that we must apply the substantive tax law that was in effect during the tax
year at issue—i.e., tax year 2007. See Giant Tiger Drugs, Inc. v. Kosydar, 43 Ohio St.2d 103,
107-108, 330 N.E.2d 917 (1975) (applying sales-tax exemption law in effect during the audit
period—i.e., the period when the transactions occurred that were subject to taxation—and
declining to apply a later amendment to the exemption); Akron Home Med. Servs., Inc. v. Lindley,
25 Ohio St.3d 107, 110, 495 N.E.2d 417 (1986) (same).

2. There is some reason to think that the Sapinas might have overpaid in the aggregate for the
assets. That issue would ultimately concern the arm’s-length character of the sale, which calls for
a seller and buyer who act with “ ‘knowledge of all the relevant facts.’ ” See Worthington City
Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 129 Ohio St.3d 3, 2011-Ohio-2316, 949
N.E.2d 986, ¶ 22, fn. 2, quoting Ohio Adm.Code 5703-25-05(A)(1) and (2). But because the




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Revision, 50 Ohio St.2d 129, 363 N.E.2d 722 (1977), paragraph two of the
syllabus. In this context, the court has said that “[t]he crucial issue that arises in
proposing the use of an allocated sale price is the propriety of the allocation for
tax-valuation purposes.” (Emphasis sic.) Bedford Bd. of Edn. v. Cuyahoga Cty.
Bd. of Revision, 132 Ohio St.3d 371, 2012-Ohio-2844, 972 N.E.2d 559, ¶ 20.
Accordingly, a proposed allocation of purchase price must typically be supported
by “ ‘corroborating indicia’ ” that establish the propriety of the allocation. Id.,
quoting 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, ¶ 15-19.
        {¶ 22} The second of the two overarching principles is that “ ‘the BTA is
not required, in every instance, and in all events, to accept as the true value in
money of real property, an allocation of a portion of a lump-sum purchase price
paid for a group of assets which included the property in question.’ ” FirstCal,
¶ 18, quoting Consol. Aluminum Corp. v. Monroe Cty. Bd. of Revision, 66 Ohio
St.2d 410, 414, 423 N.E.2d 75 (1981). In a situation in which the propriety of the
allocation has not been shown, the BTA must choose between two alternatives.
Either the BTA uses the entire purchase price as the criterion of value for the
property or the BTA disregards the purchase price and looks at other evidence of
value (such as an appraisal of the parcel at issue). Compare St. Bernard Self-
Storage, 115 Ohio St.3d 365, 2007-Ohio-5249, 875 N.E.2d 85 (entire purchase
price in excess of $25,000 allocation to personal property held to constitute the
value of the property), with Consol. Aluminum, 66 Ohio St.2d at 414, 423 N.E.2d
75.
        {¶ 23} This second course of action is not appropriate in this case.
Consol. Aluminum involved a sale of an entire business division with numerous
assets, consisting of real and personal property, the latter both tangible and

Sapinas have never contended that they did not properly inform themselves and therefore overpaid
for the assets, we do not address the issue. Id.




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intangible, located both in and outside Ohio. The court accepted the BTA’s
finding that because of “complexities of the sale,” it was “not possible to make an
allocation of a portion of a lump-sum purchase price paid for Olin’s entire
aluminum division to the Hannibal property.” Consol. Aluminum at 414. No such
complexities have been found to exist in this case, which is much more
straightforward.
     b. The BTA’s duty is to (i) weigh evidence and (ii) determine value
       {¶ 24} In the present case, the auditor used the aggregate sale price to set
the value for the property for tax year 2007, and the BOR ordered a reduction
whose basis was obscure. The case law provides guidance as to how the BTA
should act when a board of revision decision has been appealed.
       {¶ 25} One principle of general importance is that the BTA has the duty,
in a real-property-valuation case, to “ ‘ “independently weigh and evaluate all
evidence properly before it” ’ in arriving at its own decision.” 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, quoting 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, 76
Ohio St.3d 13, 15, 665 N.E.2d 1098 (1996).
       {¶ 26} The “first rule” in an appeal from the board of revision is that “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, citing Dayton-Montgomery Cty. Port Auth. v.
Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, 865
N.E.2d 22, ¶ 15. Here, both the Sapinas and the school board appealed from the
reduced valuation determined by the BOR; the Sapinas shouldered the burden of




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showing a lower value, while the school board relied on the sale information to
assert the propriety of using the sale price.
          {¶ 27} A special situation is presented when the record as developed
“negates the validity of the county’s valuation of the property.” Colonial Village,
¶ 24. In that situation, the BTA acquires “the legal duty * * * to determine
whether the record as developed by the parties contain[s] sufficient evidence to
permit an independent valuation of the property” by the BTA. Id. at ¶ 25. If the
record contains such evidence, the BTA should perform an independent valuation.
Id.
          {¶ 28} Finally, when performing an independent valuation, the BTA is not
bound by the values advocated by the parties—indeed, the statutory language
calls for the BTA on appeal from the BOR to “determine the taxable value of the
property.” R.C. 5717.03(B). The same language in R.C. 5717.05 has been
construed by this court, in the context of an appeal from the board of revision to
the common pleas court:        the taxpayer’s valuation complaint “places neither
minimum nor maximum limitations on the court’s determination of value, and
there are none save the judicial requirement that the determination be supported
by the evidence.” Jones & Laughlin Steel Corp. v. Lucas Cty. Bd. of Revision, 40
Ohio St.2d 61, 63, 320 N.E.2d 658 (1974), cited with approval in Cleveland Elec.
Illum. Co. v. Lake Cty. Bd. of Revision, 80 Ohio St.3d 591, 596, 687 N.E.2d 723
(1998).
      2. The appraisal the Sapinas offered at the BTA ignores the 2006 sale price
          {¶ 29} The Sapinas attempted to show an allocation by presenting an
appraisal of the real property itself as of the tax-lien date, January 1, 2007. That
appraisal determined the value to be $100,000. For three reasons, the BTA acted
properly in rejecting the appraisal as definitive evidence of value.
          {¶ 30} First, allowing the appraisal as the principal or sole means of
allocating the aggregate purchase price violates the precept that an appraisal of



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realty should not substitute for the arm’s-length sale price. More typically, an
allocation of sale price is proper when the value of personal property has been
determined and subtracted from the aggregate price, thereby leaving the
remainder of the sale price as the value of the realty. See Hilliard City Schools,
128 Ohio St.3d 565, 2011-Ohio-2258, 949 N.E.2d 1.
       {¶ 31} Second, $100,000 seems an unduly low valuation in light of the
entire record. The auditor originally valued the property at $116,700 for tax year
2006, before applying the 2006 asset-purchase price to 2007; the credit union was
willing to use the realty as collateral for a $160,000 loan; and the appraisal
presented at the BOR determined that the value was $120,000 in January 2009.
       {¶ 32} Third, assigning only $100,000 to the property means that more
than two-thirds of the $325,000 aggregate price—$225,000—reflects the value of
tangible and intangible personal property, which the record does not support and
which seems implausible.
       {¶ 33} For all these reasons, the BTA correctly declined to rely on the
Linhart appraisal.
           3. The BTA correctly rejected the BOR’s reduced valuation
       {¶ 34} Once the Linhart appraisal was ruled out, the BTA was left to
choose between (i) reverting to the auditor’s valuation, which used the entire
aggregate sale price to value the realty, (ii) adopting the BOR’s reduced valuation,
and (iii) performing an independent valuation based on the record.
       {¶ 35} The BTA correctly ruled out using the BOR’s reduced value,
because it could not replicate it. This court has emphatically held that the BTA’s
independent duty to weigh evidence precludes a presumption of validity of the
BOR’s valuation. Vandalia-Butler City Schools, 130 Ohio St.3d 291, 2011-Ohio-
5078, 958 N.E.2d 131, ¶ 13.




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       4. The record negated the auditor’s use of the aggregate sale price,
             while also furnishing a basis for independent valuation
       {¶ 36} The record also strongly negates using the entire $325,000 asset-
purchase price as the value of the realty. Just as the Linhart appraisal opinion of
$100,000 seems low, $325,000 appears well above all other indications of value
in the record, and the sale did manifestly include personal-property assets that had
some value. Thus, the BTA’s decision to revert to the aggregate sale price is
unreasonable and unlawful under the circumstances.
       {¶ 37} Although the Sapinas have understandably aimed to obtain the
lower values found by their appraisers—$120,000 in the Durrah appraisal
presented to the BOR and $100,000 in the Linhart appraisal presented to the
BTA—they have created a record that demonstrates an allocated value that is
higher: $160,000. Namely, the loan secured by the mortgage was a $160,000
loan, meaning that the lender viewed the property as having sufficient value to
serve as collateral for that loan amount, and the Sapinas were apparently not
required to make a downpayment. The propriety of using this figure as the
allocated value of the real property satisfies the standard of “corroborating
indicia,” and the breakout of the $160,000 amount secured by the mortgage is
reflected both on the conveyance-fee statement and in the mortgage instrument
presented as an exhibit before the BOR.
       {¶ 38} We have previously had occasion to order a modified allocation of
purchase price under analogous circumstances. In Hilliard City Schools, 128
Ohio St.3d 565, 2011-Ohio-2258, 949 N.E.2d 1, a motel was purchased as an
ongoing business. Accordingly, the assets involved in the purchase included (1)
the real property itself, (2) the personal-property furnishings of the motel rooms,
which fall into the category of “furniture, fixtures & equipment” (“FF&E”), (3)
certain more transient inventory items, and (4) an alleged transfer of the right to
use the hotel-chain name and logo. The aggregate purchase price was $3,600,000.



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        {¶ 39} In Hilliard, the BTA had authorized an allocation to FF&E from
the aggregate sale price of an entire motel as a going concern. The BTA relied on
a year-end financial statement to sustain an $800,000 allocation to the FF&E. In
reviewing the BTA’s decision, we determined that because the basis for the
financial statement was unexplained and because it was prepared long after the
purchase, the BTA’s reliance on it was unreasonable and unlawful. That was
particularly true, given that a bank appraisal contemporaneous to the purchase
attached a value of $280,000 to the FF&E.
        {¶ 40} On appeal, we concluded that “the $280,000 figure in the appraisal
report constitutes the best available evidence for the value of the FF&E,”
emphasizing that “the issue before us is what value the parties attached to the
personal property in connection with the sale of the hotel as a going concern.” Id.
at ¶ 27. We noted that “the December 2004 appraisal presents an estimation of
value apparently relied upon by [the purchaser’s] lender” and that at the time of
sale it was “within the contemplation of the parties.” Id.
        {¶ 41} Similarly, as to the property at issue here, the negotiation of the
credit-union loan and the closing of the entire purchase agreement occurred in the
time frame December 2005 through February 2006. The loan amounts were
within the contemplation of the parties and furnish corroboration for an allocation
to realty that seems plausible within the entire context of the transaction. That
plausibility becomes more compelling in the present context, where the totality of
the evidence strongly militates against adopting the entire aggregate sale price as
the value of the realty.
                                    Conclusion
        {¶ 42} For the foregoing reasons, the BTA properly rejected the BOR’s
reduction of value but acted unreasonably and unlawfully by reverting to the
entire aggregate sale price as the value of the realty. Pursuant to R.C. 5717.04,




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we therefore order that the value of the property for tax year 2007 be modified to
$160,000.
                                                           Judgment accordingly.
       O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,
FRENCH, and O’NEILL, JJ., concur.
                            ____________________
       Siegel Jennings Co., L.P.A., Victor Anselmo, J. Kieran Jennings, and
Jason P. Lindholm, for appellant.
       Britton, Smith, Peters & Kalail Co., L.P.A., Karrie M. Kalail, and Michael
E. Stinn, for appellee Euclid City School District Board of Education.
       Timothy J. McGinty, Cuyahoga County Prosecuting Attorney, and
Saundra Curtis-Patrick, Assistant Prosecuting Attorney, for appellees Cuyahoga
County Board of Revision and Cuyahoga County Fiscal Officer.
                          ________________________




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