[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Kohl’s Illinois, Inc. v. Marion Cty. Bd. of Revision, Slip Opinion No. 2018-Ohio-4461.]




                                        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. 2018-OHIO-4461
  KOHL’S ILLINOIS, INC., ET AL., APPELLEES, v. MARION COUNTY BOARD OF
                           REVISION ET AL., APPELLANTS.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
    may be cited as Kohl’s Illinois, Inc. v. Marion Cty. Bd. of Revision, Slip
                           Opinion No. 2018-Ohio-4461.]
Taxation—Real-property valuation—Collateral estoppel—Law of the case—BTA
        properly applied collateral estoppel—Decision affirmed.
(No. 2017-0161—Submitted September 11, 2018—Decided November 6, 2018.)
              APPEAL from the Board of Tax Appeals, No. 2016-138.
                               ____________________
        Per Curiam.
        {¶ 1} This property-tax appeal brings the tax-year-2010 complaint filed by
appellee Kohl’s Illinois, Inc., before us for a second time. See Kohl’s Illinois, Inc. v.
Marion Cty. Bd. of Revision, 140 Ohio St.3d 522, 2014-Ohio-4353, 20 N.E.3d 711
(“Kohl’s I”). In this appeal, appellants Marion County Board of Revision (“BOR”)
and the River Valley Local School District Board of Education (“school board”)
                             SUPREME COURT OF OHIO




appeal a decision of the Board of Tax Appeals (“BTA”) that was issued after our
remand in Kohl’s I. They contend that the BTA should have enforced a recorded
covenant that purports to prohibit Kohl’s, the property owner, from contesting the
Marion County auditor’s valuations of the property.
        {¶ 2} In the decision on appeal, the BTA held that it had already decided not
to enforce the covenant in an October 2015 decision that it issued after we remanded
the case in Kohl’s I. Because the October 2015 decision was not appealed, the BTA
concluded that the BOR and the school board were barred by res judicata and
collateral estoppel from seeking enforcement of the covenant. The BOR and the
school board argue that the BTA did not actually decide the covenant issue
previously.
        {¶ 3} We disagree, and we therefore affirm the BTA’s decision.
                                  I. Background
        {¶ 4} In Kohl’s I, we reviewed a BTA decision affirming the BOR’s
dismissal of a valuation complaint filed by Kohl’s for tax year 2010. The BTA agreed
with the BOR that the complaint was jurisdictionally barred by the covenant. That
covenant, which originated in a tax-increment-financing (“TIF”) agreement, stated
that the property owner could not file a complaint against an increased valuation of
the property during the effective years of the TIF agreement. Kohl’s allegedly
became bound by the covenant when it acquired the property from an entity that was
a party to the TIF agreement. Kohl’s I, 140 Ohio St.3d 522, 2014-Ohio-4353, 20
N.E.3d 711, at ¶ 7.
        {¶ 5} In Kohl’s I, we held that the covenant was not a jurisdictional bar but
might be a valid defense to the property owner’s valuation complaint. We then
vacated and remanded the case with instructions that the BTA afford the beneficiaries
of the covenant (the county commissioners and the school board) the opportunity to
establish the binding validity of the covenant as a defense against the complaint. Id.
at ¶ 32, 38.




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                                January Term, 2018




       {¶ 6} After remand, the BTA consolidated the tax-year-2010 case with a later
appeal in which Kohl’s had challenged the property’s valuation for 2013. On
October 15, 2015, the BTA issued a decision addressing both the 2010 and 2013
valuation complaints. BTA Nos. 2011-2747 and 2014-3897, 2015 WL 10985205
(Oct. 15, 2015). In that decision, the BTA determined that no sufficient argument
for enforcing the covenant had been advanced. Id. at *5. The BTA then ordered two
separate dispositions for the two tax years at issue. As for tax year 2010, the BTA
remanded the matter to the BOR to determine value. Id. Regarding tax year 2013,
the BTA adopted an appraisal valuation that reduced the property’s value. Id. at *6.
No appeal was taken from the October 2015 decision.
       {¶ 7} On remand at the BOR, Kohl’s introduced an appraisal report and
testimony in support of a reduced value of $3,925,000 for tax year 2010. When the
BOR retained the auditor’s valuation of $5,090,370, Kohl’s appealed to the BTA.
On January 5, 2017, the BTA held that the covenant issue was barred by res judicata
and collateral estoppel. The BTA then adopted the appraisal valuation of $3,925,000
for the property.
       {¶ 8} The BOR and the school board have appealed to this court from the
BTA’s 2017 decision, asserting the covenant claim but not contesting the merits of
the valuation reduction for tax year 2010.
                                    II. Analysis
       {¶ 9} Citing Superior’s Brand Meats, Inc. v. Lindley, 62 Ohio St.2d 133,
403 N.E.2d 996 (1980), the BTA denied reconsideration of the covenant issue on
grounds of res judicata and collateral estoppel. As we stated in Superior’s Brand
Meats, the importance of finality in administrative proceedings justifies applying
collateral estoppel in the context of BTA decisions when the elements for doing so
have been satisfied. Id. at syllabus. In the BTA context, collateral estoppel bars
relitigation of an issue when “the parties have had an ample opportunity to litigate
the issues involved in the proceeding.” Id.




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       {¶ 10} In challenging the BTA’s decision, the BOR and the school board do
not contend that the covenant issue is somehow not the same issue addressed in the
October 2015 decision, nor do they dispute that the identical parties were before
the BTA when it issued that decision. Instead, the appellants contend that the
covenant issue was not “actually determined” in the October 2015 decision. To
support this point, the county relies on the tentative language that was part of the
BTA’s discussion in the October 2015 decision: “Since the county appellees have
failed to provide this board with any pertinent legal authority, we are unable to make
a determination as to whether the no-contest covenant is binding and enforceable
upon Kohl’s.” 2015 WL 10985205 at *5.
       {¶ 11} Although this statement, if taken in isolation, could be viewed as not
deciding whether the no-contest covenant was enforceable against Kohl’s, the
statement must be read in its context. The sentence is situated in the middle of the
following paragraph, which we quote in full:


               Upon careful examination of the record before this board,
       the county appellees have failed to satisfy their burden on remand
       as set forth by the Supreme Court to show that the “no-contest
       covenant is valid and binding under contract law or real-covenant
       law.” Kohl’s [I, 140 Ohio St.3d 522, 2014-Ohio-4353, 20 N.E.3d
       711,] at ¶ 29. Indeed, the county appellees failed to provide any
       statutory basis for applying the covenant to Kohl’s and failed to
       demonstrate that the no-contest covenant qualifies as a covenant that
       runs with the land under pertinent case law. In fact, it bears noting
       that the county appellees do not cite to any legal authority for
       applying the no-contest covenant to Kohl’s or to prove the covenant
       qualifies as one that runs with the land. Since the county appellees
       have failed to provide this board with any pertinent legal authority,




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                                 January Term, 2018




       we are unable to make a determination as to whether the no-contest
       covenant is binding and enforceable upon Kohl’s. Because the
       Supreme Court’s [sic] found that “the TIF agreement is not a
       jurisdictional restriction,” [id. at ¶ 1] and based upon the record
       before this board, we hereby vacate the BOR’s dismissal of the
       underlying tax year 2010 complaint and remand this matter to the
       BOR with instructions to conduct further proceedings to determine
       the value of the subject property for tax year 2010.


2015 WL 10985205 at *5.
       {¶ 12} The context of the entire paragraph shows that the BTA made a
finding that the proponents of applying the covenant failed to prove that they were
entitled to its enforcement.
       {¶ 13} The appellants additionally contend that because the BTA did not
actually decide the covenant issue, that issue was still an open question and
unappealable at that time.       But as discussed above, the BTA did make a
determination and in doing so made its October 2015 decision final and appealable
on that point. That is so because the BTA’s refusal to enforce the covenant was an
order that “affect[ed] a substantial right,” R.C. 2505.02(B)(2), i.e., the alleged right
to enforce the covenant, which was irretrievably lost when the BTA ordered the
BOR to proceed to determine the property’s value for 2010 and the county did not
appeal. See Southside Community Dev. Corp. v. Levin, 116 Ohio St.3d 1209, 2007-
Ohio-6665, 878 N.E.2d 1048, ¶ 5.
       {¶ 14} Despite this straightforward reasoning, the county asserts that the
BTA, through its October 2015 decision, “maintained jurisdiction to vacate or
modify its * * * decision.” Under this theory, the BTA’s remand of the case for a
determination of value for tax-year 2010 made the determination of the covenant




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issue interlocutory and unappealable as to that tax year, leaving open a later
resolution in a second appeal.
       {¶ 15} But the October 2015 decision makes no statement about retaining
jurisdiction, and any such assertion by the BTA would be contrary to the general
proposition that a remand order constitutes a relinquishment of jurisdiction over the
case. See Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 144
Ohio St.3d 128, 2015-Ohio-4304, 41 N.E.3d 396, ¶ 31.
       {¶ 16} Also significant is the fact that the BTA’s remand order did not call
for the BOR to reconsider whether to enforce the covenant. Instead, the BTA itself
decided the covenant issue against enforcement and instructed the BOR to
determine the property’s value.         The BTA thereby merged its covenant
determination into the remand order, with the result that the October 2015 decision
barred the BOR from addressing the covenant issue again. Id. at ¶ 37 (law-of-the-
case doctrine jurisdictionally barred the lower tribunal from acting contrary to the
ruling of the superior tribunal). It follows that the BOR on remand had no option to
enforce the covenant and that during the second appeal to the BTA from the BOR,
there was no open issue regarding the covenant.
       {¶ 17} Contrary to the assertions of the BOR and the school board, the BTA
in its January 2017 decision confronted an attempt to relitigate the BTA’s October
2015 decision against enforcement of the covenant. The BTA correctly applied
collateral estoppel to preclude that attempt.
                                  III. Conclusion
       {¶ 18} For the foregoing reasons, the BTA properly applied collateral
estoppel, and the appellants do not contest the reduced valuation on the merits. We
therefore affirm the decision of the BTA.
                                                                 Decision affirmed.
       O’CONNOR, C.J., and O’DONNELL, KENNEDY, FRENCH, FISCHER, DEWINE,
and DEGENARO, JJ., concur.




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                               January Term, 2018




                              _________________
       Vorys, Sater, Seymour & Pease, L.L.P., Karen H. Bauernschmidt, Nicholas
Ray, and Heather M. Lutz, for appellee Kohl’s Illinois, Inc.
       Raymond A. Grogan Jr., Marion County Prosecuting Attorney, and Matt
Frericks and   David Stamolis, Assistant Prosecuting Attorneys, for appellant
Marion County Board of Revision.
       Mazanec, Raskin & Ryder Co., L.P.A., Stacy V. Pollock, Douglas P.
Holthus, and Frank H. Scialdone, for appellant River Valley Local School District
Board of Education.
                              _________________




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