[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Diley Ridge Med. Ctr. v. Fairfield Cty. Bd. of Revision, Slip Opinion No. 2014-Ohio-5030.]




                                        NOTICE
     This slip opinion is subject to formal revision before it is published in
     an advance sheet of the Ohio Official Reports. Readers are requested
     to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
     65 South Front Street, Columbus, Ohio 43215, of any typographical or
     other formal errors in the opinion, in order that corrections may be
     made before the opinion is published.

                         SLIP OPINION NO. 2014-OHIO-5030
   DILEY RIDGE MEDICAL CENTER, APPELLEE; CANAL WINCHESTER MOB,
    L.L.C., APPELLANT, v. FAIRFIELD COUNTY BOARD OF REVISION ET AL.,
                                      APPELLEES.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
     may be cited as Diley Ridge Med. Ctr. v. Fairfield Cty. Bd. of Revision,
                         Slip Opinion No. 2014-Ohio-5030.]
Taxation—Real property—When Board of Tax Appeals raises issue of
        complainant’s standing to file valuation complaint sua sponte, it should
        afford the complainant the opportunity to assert and prove its basis for
        standing.
    (No. 2013-1432—Submitted July 8, 2014—Decided November 18, 2014.)
             APPEAL from the Board of Tax Appeals, No. 2012-L-429.
                               ____________________
        Per Curiam.
        {¶ 1} This real-property-valuation case concerns the tax-year-2010
valuation of a medical office building. The complaint was filed by appellant,
Canal Winchester MOB, L.L.C. (“MOB”), which identified itself on the
complaint as “ground lessee” of the property. After appellee Fairfield County
Board of Revision (“BOR”) retained the auditor’s valuation, MOB, together with
                                SUPREME COURT OF OHIO




the record owner of the property at issue, Diley Ridge Medical Center, appealed
to the Board of Tax Appeals (“BTA”). At no time was the issue of MOB’s
standing to file the complaint raised before the issuance of the BTA’s decision.
        {¶ 2} In its decision, the BTA held that MOB had not had standing to file
the complaint and remanded the cause with instructions that the complaint be
dismissed for lack of jurisdiction. On appeal from that decision, MOB contends
that the BTA acted unreasonably or unlawfully by raising the standing issue sua
sponte, by not affording it the opportunity to demonstrate standing, and by finding
that there was no standing when MOB in fact owns the building (although Diley
Ridge Medical Center owns the land).
        {¶ 3} We hold that under the authority of Groveport Madison Local
Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 137 Ohio St.3d 266, 2013-
Ohio-4627, 998 N.E.2d 1132, the BTA should have afforded MOB the
opportunity to prove its standing. We therefore vacate the BTA’s decision and
remand the cause for further proceedings as indicated below.
                                FACTUAL BACKGROUND
        {¶ 4} On March 30, 2011, MOB filed a complaint seeking a reduction in
the valuation of the property at issue for tax year 2010. At issue is a medical
office building with an auditor’s valuation for tax year 2010 of $217,740 for the
land and $7,703,850 for the building. The complaint identified “Diley Ridge
Medical Center” as the owner, “Canal Winchester MOB L.L.C.” as “complainant
if not owner,” and attorney Bruce Burkholder as “complainant’s agent,” and in the
space to indicate the “complainant’s relationship to property if not owner,” the
response was “ground lessee.”1            The reason for the requested $1,561,560
reduction in taxable value was that the “[p]roperty was still under construction as


1
 There is no indication of a lease or of separation of ownership between land and improvements
on the property record card.




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                                   January Term, 2014




of January 1, 2010 and as such, the value as listed on the tax bill is in excess of
the value of the real property as of January 1, 2010.”
        {¶ 5} The BOR convened a hearing on October 17, 2011. Attorney Kerry
Boyle represented MOB and presented the testimony of two MOB employees and
exhibits that demonstrated the actual costs incurred as of the tax-lien dates for
2010 and 2011.        The company’s treasurer testified that MOB contracted to
construct the building on the parcel at issue during 2009, that the building was
still under construction on January 1, 2010, and that its cost value on the 2010 lien
date was $3.46 million. As of January 1, 2011, the cost value was $5.67 million,
according to the treasurer’s testimony. No issue of standing or jurisdiction was
raised at the hearing.
        {¶ 6} By decision dated January 18, 2012, the BOR retained the auditor’s
valuation of the property. Both Diley Ridge Medical Center2 and MOB appealed
to the BTA. Before that tribunal, the parties waived a hearing. Diley Ridge
Medical Center and MOB, both appellants before the BTA, filed a merit brief on
June 25, 2013. No responding brief was filed.
        {¶ 7} On August 8, 2013, the BTA issued its decision, which observed,
“Upon a review of the record, it appears that the instant appeal is from a decision
that the BOR did not have jurisdiction to make.” BTA No. 2012-L-429, 2013 WL
4508929, *1 (Aug. 8, 2013). Citing case law holding that only the owner, not a
lessee, may file a complaint pursuant to R.C. 5715.19(A)(1), the BTA held that
“as a lessee, Canal Winchester MOB LLC did not have standing to file the
underlying complaint.” Id., *2. Accordingly, the BTA remanded the cause to the
BOR with the instruction that the complaint be dismissed for lack of jurisdiction.
        {¶ 8} MOB appealed to this court.


2
 Diley Ridge Medical Center, as record owner of the property at issue, received notice of the
BOR’s decision under R.C. 5715.20, and it exercised its right to appeal it pursuant to R.C.
5717.01.




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                             SUPREME COURT OF OHIO




                              STANDARD OF REVIEW
       {¶ 9} We review BTA decisions to determine whether they are reasonable
and lawful. R.C. 5717.04; Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-
5856, 856 N.E.2d 954, ¶ 14, citing Columbus City School Dist. Bd. of Edn. v.
Zaino, 90 Ohio St.3d 496, 497, 739 N.E.2d 783 (2001). Although we defer to the
BTA with respect to its determination of factual issues, we “ ‘will not hesitate to
reverse a BTA decision that is based on an incorrect legal conclusion.’ ” Id.,
quoting Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino, 93 Ohio
St.3d 231, 232, 754 N.E.2d 789 (2001).
       {¶ 10} The present case confronts us with a question of law because it
involves the issue of the BTA’s jurisdiction, which turns on the proper application
of the enabling statutes. See 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.
Accordingly, our standard of review in this appeal is de novo, not deferential. Id.
        THE RECORD DOES NOT ESTABLISH THAT MOB HAD STANDING
                          TO MAINTAIN ITS COMPLAINT

              1. Statutory standing is a jurisdictional prerequisite in
                              administrative appeals
       {¶ 11} Under its first assignment of error, MOB contends that its standing
is not jurisdictional and that the standing issue was waived. But that argument
ignores the longstanding doctrine that “ ‘[s]tanding is jurisdictional in
administrative appeals “where parties must meet strict standing requirements in
order to satisfy the threshold requirement for the administrative tribunal to obtain
jurisdiction.” ’ ” Groveport Madison, 137 Ohio St.3d 266, 2013-Ohio-4627, 998
N.E.2d 1132, ¶ 25, quoting Victoria Plaza Ltd. Liab. Co. v. Cuyahoga Cty. Bd. of
Revision, 86 Ohio St.3d 181, 183, 712 N.E.2d 751 (1999), quoting State ex rel.
Tubbs Jones v. Suster, 84 Ohio St.3d 70, 77, 701 N.E.2d 1002 (1998), fn. 4. The




                                         4
                               January Term, 2014




case law leaves no doubt that the standing requirements incorporated into R.C.
5715.19(A)(1) run to the jurisdiction of the boards of revision. Id.
       {¶ 12} Nor does MOB’s claim of substantial compliance have merit under
these circumstances. The complaint in this case unequivocally identifies MOB as
complainant, not Diley Ridge Medical Center. By contrast, the complaint in
Groveport Madison identified the Messmore Trust as owner while leaving blank
the line for “complainant if not owner.” Groveport Madison at ¶ 2. Under those
circumstances, the trust had identified itself as the complainant even though it
later became known that the trust was not in fact the owner. Given that the trust
was clearly the complainant, it was afforded the opportunity to demonstrate the
basis for its standing during the course of the proceedings. Id. at ¶ 31. Under the
reasoning of Groveport Madison, standing in this case depends upon MOB’s
relationship to the property as complainant; Diley Ridge Medical Center’s status
is irrelevant. Additionally, MOB’s citation to Cleveland Elec. Illum. Co. v. Lake
Cty. Bd. of Revision, 80 Ohio St.3d 591, 687 N.E.2d 723 (1998), is unavailing
because that case did not involve the requirement that the complainant
demonstrate its standing.
        2. The record does not demonstrate that MOB owned the building
       {¶ 13} R.C. 5715.19(A)(1) authorizes the filing of a valuation complaint
by “[a]ny person owning taxable real property in the county” in which the
property at issue is located. This includes, of course, the owner of the property at
issue in this case. But that owner is Diley Ridge Medical Center, not MOB. We
have held that a long-term lessee has no statutory authority to maintain a
valuation complaint. Victoria Plaza; accord Soc. Natl. Bank v. Wood Cty. Bd. of
Revision, 81 Ohio St.3d 401, 403, 692 N.E.2d 148 (1998); see also Village
Condominiums Owners Assn. v. Montgomery Cty. Bd. of Revision, 106 Ohio St.3d
223, 2005-Ohio-4631, 833 N.E.2d 1230, ¶ 7 (“to establish standing, [the
complainant] must first demonstrate that it is a person owning taxable real




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                              SUPREME COURT OF OHIO




property in [the relevant county]”). Moreover, the statute furnishes no basis for
concluding that the existence of a contractual obligation to pay property taxes
confers standing on a party who is not the owner.
        {¶ 14} MOB argues that by identifying itself as ground lessee in the
complaint, it established its standing as owner of the improvements. Under this
theory, Diley Ridge Medical Center owns the land, and MOB leases the land but
owns the improvements. Real property subject to taxation includes land and the
buildings on the land, see R.C. 5701.02(A), and as owner of the building but not
the land, MOB would have standing to maintain the complaint under the plain
language of R.C. 5715.19(A)(1). The BTA has had occasion to so hold. Volibar
Realty Co. v. Cuyahoga Cty. Bd. of Revision, BTA Nos. 2003-T-633, 2003-T-648,
and 2003-T-649, 2006 WL 77717, *4 (“For purposes of R.C. 5715.19, Volibar is
an ‘owner’ of the subject property because it is the legal titleholder of all
improvements to the land”).
        {¶ 15} Although it is unusual, it is by no means unheard of that the
ownership of land be separated from the ownership of buildings on the land. See
Visicon, Inc. v. Tracy, 83 Ohio St.3d 211, 212, 699 N.E.2d 89 (1998) (lease
provided that title to hotel built by private entity on public land “shall be in the
Lessee”); Rickenbacker Port Auth. v. Limbach, 64 Ohio St.3d 628, 629, 597
N.E.2d 494 (1992) (lease of land owned by port authority to private developer
provided that during the term of the lease, title to the improvement was in the
private lessee, but that such title reverted to the port authority at expiration of the
lease). Notably, however, the records in Visicon and Rickenbacker contained
documentation of the ownership interest in the improvements—consisting, in both
cases, of a term in the lease of the land.
        {¶ 16} By contrast, MOB has not furnished any evidentiary basis for
asserting that it holds title to the improvements other than its identification of
itself, by its agent under oath, as “ground lessee” in the original complaint.




                                             6
                               January Term, 2014




Although MOB’s treasurer testified that MOB constructed the building at the site,
he did not testify as to a separation of ownership. And the complaint’s reference
to MOB’s status as ground lessee falls short both of asserting and establishing the
ownership of the building, given that the property record card indicates that Diley
Ridge Medical Center is the owner and does not indicate a separation of land from
buildings.
       {¶ 17} Once challenged by the BTA’s sua sponte consideration of the
jurisdictional sufficiency of the complaint, MOB acquired the burden of proving
its standing as part of proving the BOR’s jurisdiction over the complaint. See
Groveport Madison, 137 Ohio St.3d 266, 2013-Ohio-4627, 998 N.E.2d 1132,
¶ 29; accord L.J. Smith, Inc. v. Harrison Cty. Bd. of Revision, 140 Ohio St.3d 114,
2014-Ohio-2872, 16 N.E.3d 573, ¶ 18, citing Marysville Exempted Village School
Dist. Bd. of Edn. v. Union Cty. Bd. of Revision, 136 Ohio St.3d 146, 2013-Ohio-
3077, 991 N.E.2d 1134, ¶ 10. On the current record, jurisdiction has not been
established. If all MOB contended were its status as “lessee,” the BTA’s decision
would be correct.
  THE BTA OUGHT TO HAVE AFFORDED MOB THE OPPORTUNITY TO PLEAD
                           AND PROVE ITS STANDING

       {¶ 18} In ordering dismissal, however, the BTA acted prematurely. The
case law places the burden on the proponent of jurisdiction but does so “when the
jurisdiction of an administrative tribunal such as the BOR is challenged.” L.J.
Smith, Inc., ¶ 18. In this case, no challenge was lodged against the BOR’s
jurisdiction until the BTA on its own motion examined the issue.
        1. The BTA had authority to consider the jurisdictional validity of the
                                  complaint sua sponte
       {¶ 19} At its broadest, MOB’s argument suggests that the BTA lacked any
authority to raise the jurisdictional issue sua sponte. We reject this contention.
As a general matter, jurisdictional issues not flagged by the parties may, and




                                         7
                             SUPREME COURT OF OHIO




sometimes must, be raised by the reviewing tribunal sua sponte. Fox v. Eaton
Corp., 48 Ohio St.2d 236, 238, 358 N.E.2d 536 (1976), overruled on other
grounds, Manning v. Ohio State Library Bd., 62 Ohio St.3d 24, 577 N.E.2d 650
(1991); Chef Italiano Corp. v. Kent State Univ., 44 Ohio St.3d 86, 87, 541 N.E.2d
64 (1989).
       {¶ 20} Moreover, we have explicitly framed the board-of-revision
proceeding as a two-step process involving an initial, jurisdictional inquiry:


               As part of [the board of revision’s statutorily defined]
       jurisdiction to hear and rule on complaints, a board of revision
       must undertake a two-step analysis. First, the board of revision
       must examine the complaint to determine whether it meets the
       jurisdictional requirements set forth by the statutes. Second, if the
       complaint meets the jurisdictional requirements, then the board of
       revision is empowered to proceed to consider the evidence and
       determine the value of the property.


Elkem Metals Co., Ltd. Partnership v. Washington Cty. Bd. of Revision, 81 Ohio
St.3d 683, 686, 693 N.E.2d 276 (1998).
       {¶ 21} Additionally, we have held that the administrative tax tribunals
have authority to dismiss for lack of jurisdiction in situations where the tribunal
raised the issue on its own motion. Stanjim Co. v. Mahoning Cty. Bd. of Revision,
38 Ohio St.2d 233, 234, 313 N.E.2d 14 (1974); Gammarino v. Hamilton Cty. Bd.
of Revision, 71 Ohio St.3d 388, 643 N.E.2d 1143 (1994). We see no reason why
the BTA’s authority—and duty—to consider its own jurisdiction, which derives
from that of the boards of revision, should be any less than that possessed by the
boards of revision themselves. Indeed, it is a settled practice for the BTA to order
dismissal by the board of revision, even if the latter has issued a merit decision,




                                          8
                               January Term, 2014




where the record shows that the complaint ought to have been dismissed. See,
e.g., Sharon Village Ltd. v. Licking Cty. Bd. of Revision, 78 Ohio St.3d 479, 678
N.E.2d 932 (1997); Shinkle v. Ashtabula Cty. Bd. of Revision, 135 Ohio St.3d
227, 2013-Ohio-397, 985 N.E.2d 1243, ¶ 3, 14-15, 29 (affirming the BTA’s
ordering dismissal of one of several complaints that had been ruled on
substantively by the board of revision).
      2. When the BTA considers the complainant’s standing on its own motion, it
                should afford the complainant an opportunity to be heard
        {¶ 22} Once it had raised the issue of standing on its own motion, the
BTA treated MOB as being bound by the basis for standing asserted on the face
of the complaint. Taking MOB’s asserted status as “lessee” at face value, the
BTA held that MOB had no standing under the case law.
        {¶ 23} Although MOB contests the BTA’s decision by contending that by
using the term “ground lessee” in its complaint, it implied that it owned the
building, the point is not well supported and is ultimately immaterial.        In
Groveport Madison, we specifically considered and rejected the proposition that a
complaint must on its face assert the complainant’s actual basis for standing. 137
Ohio St.3d 266, 2013-Ohio-4627, 998 N.E.2d 1132, ¶ 30-32.            Instead, we
remanded the cause so that the BTA could consider proof offered by the
complainant of a basis for standing that had not been asserted in the complaint.
Id.
        {¶ 24} Under Groveport Madison, MOB ought to have been accorded the
opportunity both to assert and to prove the basis for its standing to maintain the
complaint. Procedurally, the BTA could have issued a show-cause or similar
order that would have called for briefing and the submission of proof.
Accordingly, we vacate the BTA’s decision and remand the cause for further
proceedings.




                                           9
                            SUPREME COURT OF OHIO




       {¶ 25} On remand, the BTA shall first redetermine whether MOB had
standing to maintain the complaint, affording MOB the opportunity to assert and
prove one or more bases for standing. If the BTA determines that there was no
standing, the BTA shall remand the cause to the BOR with instructions that the
complaint be dismissed. If the BTA determines that MOB did have standing, the
BTA shall consider MOB’s appeal on the merits.
                                  CONCLUSION
       {¶ 26} For the foregoing reasons, we vacate the BTA’s decision and
remand the cause for further proceedings as described in this opinion.
                                                                 Decision vacated
                                                             and cause remanded.
       O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,
FRENCH, and O’NEILL, JJ., concur.
                       ____________________________
       Frost Brown Todd, L.L.C., and Eugene L. Hollins; and Isaac Wiles
Burkholder & Teetor, L.L.C., Michael L. Close, and Dale D. Cook, for appellant.
       Gregg Marx, Fairfield County Prosecuting Attorney, and Jason M. Dolin,
Assistant Prosecuting Attorney, for appellees.
                            ____________________




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