     [Cite as Hersh v. Cuyahoga Cty. Bd. of Revision, 2020-Ohio-3596.]

                           COURT OF APPEALS OF OHIO

                         EIGHTH APPELLATE DISTRICT
                            COUNTY OF CUYAHOGA

SHELBY HERSH,                                        :

     Plaintiff-Appellant,                            :
                                                                         No. 109035
     v.                                              :

CUYAHOGA COUNTY BOARD OF                             :
REVISION, ET AL.,
                                                     :
     Defendants-Appellees.


                            JOURNAL ENTRY AND OPINION

             JUDGMENT: AFFIRMED
             RELEASED AND JOURNALIZED: July 2, 2020


               Administrative Appeal from the Board of Tax Appeals
                               Case No. 2018-1129


                                        Appearances:

             Sleggs, Danzinger & Gill Co., L.P.A., Steven R. Gill, and
             Todd W. Sleggs, for appellant.

             Michael C. O’Malley, Cuyahoga County Prosecuting
             Attorney, and Reno J. Oradini, Jr., Assistant Prosecuting
             Attorney, for appellees.


MICHELLE J. SHEEHAN, J.:

               Plaintiff-appellant property owner Shelby Hersh (“Hersh”) appeals

from a decision of the Board of Tax Appeals (“BTA”) that affirmed the Cuyahoga
County Board of Revision’s (“BOR”) valuation of residential property for the 2017

tax year. Finding the BTA’s decision was reasonable and lawful, we affirm.

                    I. Procedural History and Substantive Facts

               Hersh owns residential property located on Sheldon Road in

Lyndhurst, Ohio. He purchased the property from the secretary of the United

States Department of Housing and Urban Development (“HUD”) in March 2017.

The county’s fiscal officer valued Hersh’s property at $83,000 for the 2017 tax

year.    Thereafter, Hersh filed a complaint against the valuation, seeking a

reduction of the property value to $70,400.

               On July 25, 2018, the BOR held a hearing. Hersh did not appear.

Rather, his counsel argued on his behalf and presented the following information:

listing information, including a photo of the property; HUD settlement statement

showing the purchase price of $70,400; a conveyance fee statement showing the

purchase price of $70,400; and a sale verification questionnaire that included a

statement that the property was listed with a real estate agent. At the hearing,

Hersh’s counsel stated that “both the seller and the buyer had brokers * * * at the

property. The buyer was represented by Murwood Real Estate [and t]he seller,

JBS Realty.”

               Thereafter, the BOR retained the fiscal officer’s valuation, finding as

follows:

        Sale referenced in support of value was a HUD sale and not
        considered arm’s length. No other evidence was provided to show
      the sale price was indicative of value. BOR research indicates
      current market value is supported by the market. No change.

              Hersh then appealed the BOR’s decision to the BTA, and the BTA

affirmed the BOR. The BTA stated in its decision that it decided the case on the

notice of appeal, the fiscal officer’s statutory transcript, and the parties’ written

argument. In affirming the BOR’s decision, the BTA found that the sale at issue

was a HUD sale, a HUD sale is generally not an arm’s-length sale, and Hersh failed

to rebut the presumption that the HUD sale of his property was not an arm’s-

length transaction.    The BTA additionally found “no conclusive evidence the

property was openly and systematically marketed” and Hersh failed to provide

“market data to show no higher price could be obtained.” And although the BTA

agreed with Hersh that the sale price was “not far from the fiscal officer’s value,” it

found this fact irrelevant to the question of whether Hersh rebutted the

presumption that HUD sales are not arm’s-length transactions.

              Hersh now appeals the BTA’s decision in three interrelated

assignments of error, which we address together: (1) the BTA decision and order is

unreasonable and unlawful because it adds additional requirements to proving a

sale that does not exist in the statute and case law; (2) the BTA decision and order

is unreasonable and unlawful because the unrebutted evidence in the record

showed that the property was marketed by the seller prior to the sale and both

parties to the sale were represented by brokers; and (3) the BTA decision and order

applies a strict reading of Schwartz v. Cuyahoga Cty. Bd. of Revision, 143 Ohio
St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223, over the more recent decision in

Dauch v. Erie Cty. Bd. of Revision, 149 Ohio St.3d 691, 2017-Ohio-1412, 77 N.E.3d

943.

                                II. Law and Analysis

                Hersh contends that the BTA’s decision was unreasonable and

unlawful because the evidence shows that the property had been marketed prior to

the sale and the BTA improperly imposed an additional requirement that the

property be marketed for a “significant period.” Hersh also seemingly argues that

the facts in Schwartz support his argument, yet the board should have applied the

reasoning provided in Dauch.

                “‘A party seeking an increase or decrease in valuation bears the

burden of proof before a board of revision.’” Schwartz v. Cuyahoga Cty. Bd. of

Revision, 8th Dist. Cuyahoga No. 106659, 2018-Ohio-4712, ¶ 21, quoting Snavely

v. Erie Cty. Bd. of Revision, 78 Ohio St.3d 500, 503, 678 N.E.2d 1373 (1997).

Likewise, “[w]hen cases are appealed from a board of revision to the BTA, the

burden of proof is on the appellant * * * to prove its right to an increase [in] or

decrease from the value determined by the board of revision.” Columbus City

School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 90 Ohio St.3d 564, 566,

740 N.E.2d 276 (2001).       To meet that burden, the appellant “must present

competent and probative evidence to make its case.” Id. It is therefore not enough

to merely introduce evidence that calls the board of revision’s valuation into

question. Id.
             We review BTA decisions only to determine whether they are

“reasonable and lawful.” R.C. 5717.04. In so doing, we defer to the BTA’s factual

findings, including determinations of property value, as long as they are supported

by reliable and probative evidence in the record. Satullo v. Wilkins, 111 Ohio St.3d

399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14. But we review the BTA’s legal

determinations de novo. Crown Communication, Inc. v. Testa, 136 Ohio St.3d

209, 2013-Ohio-3126, 992 N.E.2d 1135, ¶ 16.

              Hersh claims that the March 2017 sale of the Sheldon Road property

evidences the correct value of the property. A recent arm’s-length transaction

generally constitutes the best evidence of a property’s value. Terraza 8, L.L.C. v.

Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916,

¶ 31-32.   HUD sales, however, are presumed not to be arm’s length under

R.C. 5713.04. See Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of

Revision, 127 Ohio St.3d 63, 2010-Ohio-4907, 936 N.E.2d 489, ¶ 21-26 (“Fenco”);

Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, 141 Ohio

St.3d 243, 2014-Ohio-4723, 23 N.E.3d 1086, ¶ 2. “Under R.C. 5713.04, the price

from an auction or forced sale is presumptively not evidence of a property’s value,

absent proof that the transaction occurred at arm’s length between typically

motivated parties.” Schwartz, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d

1223, at ¶ 27. And the Ohio Supreme Court considers HUD sales as “forced sales”

for purposes of R.C. 5713.04 “because they are generally not indicative of value.”

Id. at ¶ 28. A taxpayer can therefore rebut the presumption by providing evidence
that the transaction occurred at arm’s length between “typically motivated parties.”

Id. at ¶ 27.

               Here, Hersh claims he rebutted the presumption that the sale was

not an arm’s-length transaction by providing the following: a statement that the

property was marketed by the seller and both parties were represented by brokers,

a copy of the listing, a copy of settlement statement, and a copy of the verification

questionnaire that shows there were no conditions of sale. In support, he cites to

the Ohio Supreme Court in Schwartz.

               In Schwartz, the property owner appealed to the BTA, requesting a

reduction in the value of the property. Schwartz contended that the 2011 sale of

the property for $5,000 was a voluntary, arm’s-length transaction in that the

property was publicly advertised as part of HUD’s “inventory of foreclosed

properties,” Schwartz was the high bidder, and he did not have a special

relationship with HUD. Schwartz at ¶ 13. In support, he presented the testimony

of a representative, Vladimir Victor, for whom Schwartz held the property in trust.

               Victor testified that he had learned that the property was for sale

while he was caring for an adjacent home on the same street as the property at

issue. The property was listed with a realty company, and a sale sign was posted in

the yard for three years. Victor testified that he made several attempts to purchase

the property, but his offers were not accepted. Later, according to Victor, the realty

company contacted Victor after a sale to another buyer fell through.           Victor

testified that the realty company told Victor that if he did not buy it, the property
would be demolished. Schwartz, 143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d

1223, at ¶ 8.

                On appeal, the Ohio Supreme Court found that the property owner

rebutted the presumption that the HUD sale was not an arm’s-length transaction,

stating as follows:

      [T]he record indicates that Schwartz successfully rebutted this
      presumption with evidence that the 2011 sale was voluntary and at
      arm’s length. The property was on the market for three years
      (including one year after the property was transferred to HUD).
      Victor testified that a for-sale sign was posted at the property and he
      made several offers to buy it. The owner rejected Victor’s offers and,
      indeed, was planning to sell to a different prospective buyer. When
      that sale fell through, the owner contacted Victor and advised him
      that the property would be razed unless he wanted to buy it.
      Schwartz also cited other sales on [the same street as the subject
      property] as proof that the market could not bear a higher sale price
      at that time.

Id. at ¶ 30. The court therefore found under the above circumstances that the BTA

acted unreasonably when it found that the property’s 2011 sale price was not the

best evidence of its tax year 2011 value. Id. at ¶ 31.

                Unlike in Schwartz, however, Hersh failed to provide any testimony

from a person with firsthand knowledge of the HUD sale in March 2017, which

may have rebutted the presumption that such sale was a forced sale. In Schwartz,

the property owner’s representative testified about the facts and circumstances of

the HUD sale and the condition of the property. Hersh did not testify at the BOR’s

hearing, nor did he provide the testimony of any individual possessing firsthand

knowledge of the sale. Rather, his counsel argued for a reduction in value and
presented documents that purportedly represented the property’s purchase price

of $70,400, including listing information and a settlement statement. The record

contains no evidence that counsel had firsthand knowledge of the sale or the

documents he presented.      And statements of counsel are not evidence.        See

Corporate Exchange Bldgs. IV & V, Ltd. Partnership v. Franklin Cty. Bd. of

Revision, 82 Ohio St.3d 297, 299, 695 N.E.2d 743 (1998). See also Hardy v.

Delaware Cty. Bd. of Revision, 106 Ohio St.3d 359, 2005-Ohio-5319, 835 N.E.2d

348, ¶ 14 (discussing adverse consequences that may result from a party’s failure to

present witness testimony before the board and electing instead to rely upon

documentary exhibits discussed by counsel).

              Moreover, the Multiple Listing Service listing for the property from

the HUD sale is “unreliable hearsay.” See, e.g., Dellick v. Eaton Corp., 7th Dist

Mahoning No. 03-MA-246, 2005-Ohio-566, ¶ 25. And finally, unlike in Schwartz,

143 Ohio St.3d 496, 2015-Ohio-3431, 39 N.E.3d 1223, Hersh failed to provide

evidence or market data to show that no higher price could be obtained.

             Hersh encourages this court to apply the Supreme Court’s reasoning

in Dauch, 149 Ohio St.3d 691, 2017-Ohio-1412, 77 N.E.3d 943.         In Dauch, the

Supreme Court held that (1) the BTA properly considered conveyance fee

statements that were included in the statutory transcripts; and (2) the taxpayer,

who sought to decrease the valuation of the properties based on the prices he paid

for them, met his initial burden of showing that the purchases were made at arm’s

length through conveyance-fee statements, the property-record cards, and other
documents without having to appear at the BOR’s hearing. Id. at ¶ 19. Dauch,

however, did not concern a HUD sale. And as previously discussed, HUD sales are

forced sales, and unlike regular sales, they are presumptively not arm’s-length

transactions in which HUD “obtains the property ‘under duress, and obviously

seeks to divest itself of the property for at least the amount of its guarantee.’”

Fenco, 127 Ohio St.3d 63, 2010-Ohio-4907, 936 N.E.2d 489, at ¶ 29, quoting Matic

v. Mahoning Cty. Bd. of Revision, BTA No. 1990-H-1114, 1992 Ohio Tax LEXIS

1544, 4 (Dec. 11, 1992). Therefore, Dauch does not apply here.

              Hersh also contends that the BTA improperly imposed an additional

requirement that a property owner demonstrate the property was marketed for a

“significant period.” In support, Hersh, taking the statement out of context, cites

to the BTA’s decision stating that “[Hersh] does not claim that this property was on

the market for any significant period.”   We do not find the BTA was placing an

additional burden upon Hersh, but rather, the BTA was distinguishing the facts

presented in Schwartz in response to Hersh’s argument that his case can be

likened to the Schwartz case. In comparing the cases, the BTA stated that while

the property in Schwartz had been on the market for three years, Hersh does not

make the same claim.

              In light of the above, we find Hersh failed to rebut the presumption

that the sale of the Sheldon Road property was not an arm’s-length transaction,

and the BTA did not improperly impose additional requirements that the property
be marketed for a significant period of time. We therefore find the BTA’s decision

was reasonable and lawful.

              Hersh’s assignments of error are overruled.

              Judgment affirmed.

      It is ordered that appellees recover of appellant costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to said court to carry this

judgment into execution.

      A certified copy of this entry shall constitute the mandate pursuant to Rule

27 of the Rules of Appellate Procedure.



____________________________
MICHELLE J. SHEEHAN, JUDGE

KATHLEEN ANN KEOUGH, P.J., and
MARY EILEEN KILBANE, J., CONCUR
