PETITIONERS APPEARING PRO SE:                        ATTORNEY FOR RESPONDENTS:
LEE and SALLY PETERS                                 DAVID F. TRUITT
Carmel, IN                                           Attorney at Law
                                                     Lebanon, IN



                                   IN THE
                            IN DIANA TAX COURT

LEE and SALLY PETERS,                            )
                                                 )
       Petitioners,                              )
                                                 )
                       v.                        )     Cause No. 49T10-1207-TA-42
                                                 )
LISA GAROFFOLO, BOONE COUNTY                     )
ASSESSOR, and the INDIANA BOARD                  )
OF TAX REVIEW,                                   )
                                                 )                May 14 2015, 3:17 pm
       Respondents.                              )


                      ON APPEAL FROM A FINAL DETERMINATION OF
                          THE INDIANA BOARD OF TAX REVIEW

                                   FOR PUBLICATION
                                     May 14, 2015

FISHER, Senior Judge

      This case examines whether the Indiana Board of Tax Review erred in upholding

the 2010 real property assessment of Lee and Sally Peters (the Petitioners).         Upon

review, the Court finds that the Indiana Board did not err.

                            FACTS AND PROCEDURAL HISTORY

      The Petitioners own real property on Main Street in Zionsville, Indiana.           The

property consists of a 2,852 square foot office building situated on a 0.16 acre lot. (See

Cert. Admin. R. at 65-66.)
      For the 2009 tax year, the Petitioners' property was assessed at $306,400. (See

Cert. Admin. R. at 63.) For the 2010 tax year, however, the assessment increased to

$430,900. (See Cert. Admin. R. at 63.)

      By letter dated January 18, 2010, the Petitioners challenged their 2010

assessment with the Boone County Property Tax Assessment Board of Appeals

(PTABOA).    (See Cert. Admin. R. at 6.) The PTABOA reduced the assessment to

$420,000. (See Cert. Admin. R. at 73-75.) The Petitioners then filed an appeal with the

Indiana Board.

      The Indiana Board conducted an administrative hearing in the matter on March

14, 2012. On June 8, 2012, the Indiana Board issued a final determination in which it

found that the Petitioners failed to meet their burden of proving that the 2010

assessment was incorrect. (See Cert. Admin. R. at 19 1l1l 170), 18.) Consequently, the

Indiana Board upheld the $420,000 assessment.

      The Petitioners filed an original tax appeal on July 23, 2012. The Court heard

oral arguments on June 27, 2013. Additional facts will be supplied as necessary.

                                         LAW

      Under Indiana's assessment system, real property is assessed on the basis of its

"market value-in-use."     2002    REAL PROPERTY ASSESSMENT MANUAL            (Manual)

(incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2 (2002 Supp.)) at 2. As this

Court has previously explained, a property's market value-in-use is, in most instances,

equivalent to its fair market value.   See,   ~'   Millennium Real Estate Inv., LLC v.

Benton Cnty. Assessor, 979 N.E.2d 192, 196 (Ind. Tax Ct. 2012), review denied.

Nonetheless, "[i]n markets in which sales are not representative of utilities, either




                                              2
because the utility derived is higher than indicated sale prices, or in markets where

owners are motivated by non-market factors such as the maintenance of a farming

lifestyle even in the face of a higher use value for some other purpose, [market value-in-

use] will not equal value in exchange." Manual at 2.

       Three generally accepted appraisal techniques may be used to calculate a

property's market value-in-use. See id. at 3. Specifically:

         [t]he first approach, known as the cost approach, estimates the value
         of the land as if vacant and then adds the depreciated cost new of
         the improvements to arrive at a total estimate of value. The second
         approach, known as the sales comparison approach, estimates the
         total value of the property directly by comparing it to similar, or
         comparable, properties that have sold in the market. The third
         approach, known as the income approach, is used for income
         producing properties that are typically rented.       It converts an
         estimate of income, or rent, the property is expected to produce into
         value through a mathematical process known as capitalization.

~(emphases       omitted). Indiana recognizes, however, that because "assessing officials

are faced with the responsibility of valuing all properties within their jurisdictions . . .

[they] often times do not have the data or time to apply all three approaches to each

property."   ~     Accordingly, the primary method for Indiana assessing officials to

determine a property's market value-in-use is the cost approach. See id. To that end,

Indiana has promulgated a series of guidelines that explain in detail how property is to

be valued under this approach. See REAL PROPERTY ASSESSMENT GUIDELINES FOR 2002

- VERSION A (Guidelines), Bks. 1 and 2.           Under these guidelines, an assessor

determines the market value-in-use of non-agricultural land by applying the previously

determined base rates that are set forth in the township/county's land order. 1        See

generally Guidelines, Bk. 1, Ch. 2. See also IND. CODE§ 6-1.1-4-13.6 (2009) (amended

1
   The base rates reflect the recent sales prices of similar land. See REAL PROPERTY
ASSESSMENT GUIDELINES FOR 2002 - VERSION A (Guidelines), Bk. 1, Ch. 2.


                                             3
2010). The guidelines also provide the cost tables for the assessor to use when valuing

improvements. Guidelines, Bk. 2, Ch. 6, Apps. D-G.

       When an assessor assesses land and improvements pursuant to the guidelines,

her assessment is presumed accurate. Manual at 5.           See also Indianapolis Racquet

Club, Inc. v. Marion Cnty. Assessor, 15 N.E.3d 150, 153 (Ind. Tax Ct. 2014).            That

presumption may be rebutted, however, with other market-based evidence           (~,   sales

data, appraisals, or other information compiled in accordance with generally accepted

appraisal principles) that indicates that the assessment is not an accurate reflection of

the property's market value-in-use. See Manual at 5.

                                 STANDARD OF REVIEW

       The party seeking to overturn an Indiana Board final determination bears the

burden of demonstrating its invalidity.     Osolo Twp. Assessor v. Elkhart Maple Lane

Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003). Accordingly, the Petitioners must

demonstrate to the Court that the Indiana Board's final determination is arbitrary,

capricious, an abuse of discretion, contrary to law, or unsupported by substantial or

reliable evidence. See IND. CODE§ 33-26-6-6(e)(1 ), (5) (2015).

                                       DISCUSSION

       The Petitioners present two issues on appeal. First, they claim that the Indiana

Board erred in determining that they, and not the Assessor, bore the burden of proof at

the administrative hearing. (See,   ~,    Pet'rs' Br. at 1 1J1J 1-2.) Second, they claim that

the Indiana Board erred in determining that the evidence before it did not establish that

their property was overvalued. (See, M.:_, Pet'rs' Br. at 11J1J 3-6.)




                                              4
                                               I.

       Indiana Code § 6-1.1-15-17.2 contains what is commonly referred to as "the

burden-shifting rule." See Orange Cnty. Assessor v. Stout, 996 N.E.2d 871, 873 (Ind.

Tax Ct. 2013).     The statute provides that if the assessment of the same property

increases by more than 5% from one year to the next, the assessor bears the burden of

proving that the assessment is correct.       IND. CODE§ 6-1.1-15-17.2 (2012) (amended

2014). Compare     with~'     IND. CODE§ 6-1.1-15-1 (m) (2012) (indicating that otherwise,

the taxpayer bears the burden of demonstrating that the assessment is incorrect).

       There is no question in this case that the Petitioners' assessment increased by

more than 5% from 2009 to 2010. Accordingly, under the plain terms of Indiana Code §

6-1.1-15-17.2, the Assessor bore the burden of proving at the Indiana Board hearing

that the assessment increase was proper.            See Indiana Dep't of State Revenue v.

Horizon Bancorp, 644 N.E.2d 870, 872 (Ind. 1994) (stating that an unambiguous statute

must be read to "mean what it plainly expresses, and its plain and obvious meaning

may not be enlarged or restricted" (citations omitted)). The Indiana Board's conclusion

that the Petitioners bore the burden of proof at its hearing is therefore erroneous. 2


2 The Indiana Board held that the Petitioners bore the burden of proof because the property the
Assessor assessed in 2010 was not the same property she assessed in 2009. (See Cert.
Admin. R. at 16 1J 16.) This holding not only ignores the fact that the Petitioners have always
owned the same 0.16 acres of land but that the Assessor never created a new parcel
identification number when she incorporated the "new" property into their assessment. (See
Cert. Admin. R. at 65; Oral Arg. Tr. at 28.) Moreover, the Indiana Board's holding creates an
inconsistent or absurd result when examined against another burden shifting statute. See. ~.
DeKalb Cnty. E. Cmty. Sch. Dist. v. Deo't of Local Gov't Fin., 930 N.E.2d 1257, 1260 (Ind. Tax
Ct. 2010) (explaining that when determining what the legislature intended in enacting a statute,
the Court will read the statute logically so as to prevent unjust or absurd results); Lake Cnty.
Assessor v. Amoco Sulfur Recovery Corp., 930 N.E.2d 1248, 1254-55 (Ind. Tax Ct. 2010)
(explaining that the Court will attempt to harmonize statutes that are in pari materia), review
denied.      Indeed, under that other statute, when an assessor changes the underlying
characteristics of a property, she bears the burden of proving that the resulting assessment is
valid. See.~. IND. CODE§ 6-1.1-4-4.4 (2012).


                                               5
Nonetheless, as will be discussed in the next section of this opinion, the Indiana Board's

error does not necessitate a reversal of its final determination.

                                             11.

       The Petitioners also argue on appeal that the Indiana Board erred when it

determined that the evidence before it did not establish that their property was

overvalued in 2010.     To determine whether this argument has merit, the Court will

examine the administrative record in its entirety to determine whether a reasonable

person could find enough relevant evidence to support the Indiana Board's decision.

See.   ~'   Dawkins v. State Bd. of Tax Comm'rs, 659 N.E.2d 706, 709 (Ind. Tax Ct.

1995) (explaining that an Indiana Board final determination is arbitrary or capricious

"when it is without some basis which would lead a reasonable person to the same

conclusion" (citation omitted)); Kildsig v. Warren Cnty. Assessor, 998 N.E.2d 764, 767

(Ind. Tax Ct. 2013) (explaining that an Indiana Board final determination is unsupported

by substantial or reliable evidence when a reasonable person cannot find enough

relevant evidence in the administrative record to support the decision).

       The administrative record in this case reveals that during the Indiana Board

hearing, the Assessor explained that the 2010 increase in the Petitioners' assessment

was attributable solely to the fact that in 2009, she assessed only half of their land.

(See.~,     Cert. Admin. R. at 7, 65, 80, 111, 116-17.) To correct her mistake, the

Assessor simply added the unassessed .08 acre of land to the Petitioners' property

record card and then, using the base rate that had been applied in the original

assessment, doubled the land's value. (See Cert. Admin. R. at 65, 80 (indicating that

that base rate had been applied at least as far back as 2007).) As additional support for




                                             6
her assessment, the Assessor submitted a spreadsheet with the sales data for four

purportedly comparable commercial properties that sold in Zionsville Village in 2008 and

2009. 3    (See Cert. Admin. R. at 68, 109.)         The Assessor explained that while the

Petitioners' property was assessed at only $151.08 per square foot, the data from these

four sales indicated that comparable properties had been sold at a much higher average

of $225.41 per square foot. (See Cert. Admin. R. at 65-66, 68, 110.)4

          In their presentation to the Indiana Board, the Petitioners admitted that they

owned the previously unassessed land in question. (See Cert. Admin. R. at 48-49, 93.)

Still, they asserted that accounting for the additional .08 acres of land in their

assessment should not have affected their property's overall value because in

Zionsville, the size of a lot is irrelevant to value of the overall property. (See,    ~,    Cert.

Admin. R. at 93-95, 115.) The Petitioners also claimed that the best use of their land

was to bulldoze the improvement because it had no value, as it was not ADA-compliant

and its heating system was "soon to go belly up[.]" (See.          ~,    Cert. Admin. R. at 93-

95.)      Finally, they argued that "when you take the value of the land and add a

hypothetical value of the building ... that's not [a measure of the] market" because

3
   Actually, the Assessor provided the sales data on 17 commercial property sales in Zionsville
Village between 2005 and 2010. (See Cert. Adm in. R. at 68.) The Assessor pointed out,
however, that of those 17 sales, only the four in 2008 and 2009 were relevant to the Petitioners'
2010 assessment. (See Cert. Admin. R. at 68, 109-10.) See also 50 IND. ADMIN. CODE 21-3-3
(2010) (see http://www.in.gov/legislative.iac/) (indicating that "[f]or assessment years occurring
March 1, 2007, and thereafter, the local assessing official shall use sales of properties occurring
the two (2) calendar years preceding the relevant assessment date") (repealed eff. April 8,
2010).

4
   The Assessor also presented information regarding 2004 and 2005 vacant land sales and
standard lot sizes in Zionsville Village. (See Cert. Admin. R. at 67.) The Court need not
consider this evidence on appeal, however, because (1) the Assessor previously indicated that
sales data prior to 2008 was irrelevant to the Petitioners' assessment; (2) the Assessor never
relied on, or even discussed, this information in her evidentiary presentation; and (3) the Indiana
Board never relied on this information in making its final determination. See supra note 3. (See
also Cert. Admin. R. at 10-20, 82-120.)


                                                7
when valuing property, the Assessor should value land or improvements, not both.

(See.~,    Cert. Admin. R. at 93-95, 115.)

       As evidentiary support for their argument, the Petitioners presented                a

spreadsheet with the sales data for 12 purportedly comparable commercial properties

that sold in Zionsville Village between 2009 and 2011. (See Cert. Admin. R. at 54.) For

nine of those sales, they simply used the sales data from the Assessor's spreadsheet,

but made certain adjustments to that data to account for "mistakes" they believe she

made. (Compare Cert. Admin. R. at 54, 68 with 96-99.) The Petitioners added their

own data for the three other sales of commercial properties that occurred in Zionsville

Village in 2010 and 2011. (See Cert. Admin. R. at 54, 100-02.) The Petitioners then

explained that in both re-calculating and using a non-linear logarithmic curve fit to graph

the "average" and the "average of the averages" of those 12 sales, they arrived at a per

square foot value of $125. (Cert. Admin. R. at 55-56, 102-03.) (See also Cert. Admin.

R. at 113-14 (arguing that the Assessor did not understand how to calculate "an

average" and that "weighted averages" should be used).) The Petitioners subsequently

refined their list of comparable sales down to five to account for building size, and again,

in calculating and using a non-linear logarithmic curve fit to graph the "average" and the

"average of the averages" of those 5 sales, they arrived at a per square foot value of

$128. (Cert. Admin. R. at 56, 103.) Finally, they "did the same drill" with the corrected

data from all 17 of the Assessor's sales and arrived at a per square foot value of $135.

(See Cert. Admin. R. at 57-58, 104.)       Based on these per square foot values, the

Petitioners claimed that their property's assessment should be between $360,000 and




                                             8
$405,000. (See Cert. Admin. R. at 103-04.)5

       Given these evidentiary presentations, the Court cannot say the Indiana Board

erred when it determined that the evidence before it did not establish that the subject

property was overvalued for 2010. The Assessor's explanation as to why and how she

increased the assessment was, at first blush, sufficient to demonstrate that the increase

in the assessment was proper. See Manual at 5; Indianapolis Racquet Club, 15 N.E.3d

at 153 (providing that when an assessor makes an assessment using the guidelines,

that assessment is presumed accurate); Damon Corp. v. Indiana State Bd. of Tax

Comm'rs, 738 N.E.2d 1102, 1106 (Ind. Tax Ct. 2000) (explaining that in order to prevail,

the party that bears the burden of proof in a property tax appeal must present a prima

facie case, which is a case in which the evidence is '"sufficient to establish a given fact
                                                           111
and which if not contradicted will remain sufficient             (emphasis added and citation

omitted)). As a result, the burden of production (i.e., the burden to go forward with the




5
   During the Indiana Board hearing, the Petitioners also presented a document that valued their
property with the following income approach: "$21,756.99 Income capped at .08 yields
$271,956[;] at .06 yields $362,617." (See Cert. Admin. R. at 50.) (See also Cert. Admin. R. at
100-01 (explaining that in calculating their income figure, the Petitioners deducted property
taxes and mortgage payments as expenses).) The Indiana Board rejected this income
approach because it did not comport with generally accepted appraisal principles. (See
generally Cert. Admin. R. at 17-181J1J 17(d)-(f).) During oral argument, however, the Petitioners
complained that the Indiana Board spent too much time in its final determination discrediting
their income approach because they never intended that it be used as evidence of value in the
first place. (See Oral Arg. Tr. at 8.)



                                               9
evidence) shifted from the Assessor to the Petitioners. 6

       As previously indicated, the Petitioners relied primarily on the Assessor's sales

data in making their evidentiary presentation.        Nonetheless, the administrative record

reveals that neither the Assessor, in offering that evidence, nor the Petitioners, in using

that evidence, provided the Indiana Board with any explanation as to how the properties

from which that data was culled were comparable to the subject property and how any

differences between the properties affected their market values-in-use.              (See Cert.

Admin. R. at 54-58, 68, 82-120.) This data, therefore, supported neither the Assessor's

assessment nor the Petitioners' claim. See,         ~'   Long v. Wayne Twp. Assessor, 821

N.E.2d 466, 471 (Ind. Tax Ct. 2005) (explaining that to establish comparability, the

proponent of the evidence must explain to the Indiana Board the characteristics of the

subject property, how those characteristics relate to those of the purportedly

comparable properties, and how any differences between the properties affect their

market values-in-use), review denied. The evidence submitted by the Petitioners with

respect to the three other sales also suffer from the same infirmity. (See Cert. Admin.

R. at 54-58, 82-120.)       Consequently, the Petitioners failed to shift the burden of

production back on the Assessor and the Assessor's prima facie case therefore stands.




6
   The term "burden of proof' incorporates both the burden of persuasion and the burden of
production. See Porter Mem'I Hosp. v. Malak, 484 N.E.2d 54, 58 (Ind. Ct. App. 1985), trans.
denied. The burden of persuasion is "[a] party's duty to convince the fact-finder to view the
facts in a way that favors that party." BLACK'S LAW DICTIONARY 223 (9th ed. 2009). The burden
of production, however, is "[a] party's duty to introduce enough evidence on an issue to have the
issue decided by the fact-finder, rather than decided against [it] in a peremptory ruling[.]" lit.
While the burden of persuasion never shifts, the burden of production may shift between parties
during the course of litigation. See, §.JL., Peabody Coal Co. v. Ralston, 578 N.E.2d 751, 753-54
(Ind. Ct. App. 1991 ).



                                               10
                             CONCLUSION

For the foregoing reasons, the Indiana Board's final determination is AFFIRMED.




                                   11
