[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Schwartz v. Cuyahoga Cty. Bd. of Revision, Slip Opinion No. 2015-Ohio-3431.]




                                        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. 2015-OHIO-3431
     SCHWARTZ, TRUSTEE, APPELLANT, v. CUYAHOGA COUNTY BOARD OF
                            REVISION ET AL., APPELLEES.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
   may be cited as Schwartz v. Cuyahoga Cty. Bd. of Revision, Slip Opinion
                                No. 2015-Ohio-3431.]
Taxation—Real-property valuation—Taxpayer-appellant’s burden of proof to
        establish entitlement to decrease in valuation—Sale price as best evidence
        of property’s value—Board of Tax Appeals’ decision reversed and cause
        remanded.
   (No. 2013-1955—Submitted January 13, 2015—Decided August 27, 2015.)
              APPEAL from the Board of Tax Appeals, No. 2013-608.
                             _______________________
        Per Curiam.
        {¶ 1} This case involves a dispute over the value of a two-family dwelling
in Cuyahoga County. Appellant, Fred P. Schwartz, purchased the property from
the Secretary of the United States Department of Housing and Urban
                               SUPREME COURT OF OHIO




Development (“HUD”) for $5,000 in October 2011. The county fiscal officer
valued the property at $126,800 for tax year 2011, and Schwartz sought a
reduction to $30,000.      The Cuyahoga County Board of Revision (“BOR”)
retained the fiscal officer’s valuation and the Board of Tax Appeals (“BTA”)
affirmed.
       {¶ 2} Schwartz appealed and now argues that the BTA acted unreasonably
and unlawfully by rejecting the 2011 sale price as the best evidence of the
property’s value, by assigning little weight to his comparable-sales data, and by
failing to require the county fiscal officer and the BOR (collectively, the “county
appellees”) to introduce evidence supporting their $126,800 valuation. He also
asserts a due-process claim.
       {¶ 3} For the reasons explained below, the BTA erred by rejecting the
2011 sale price as the best evidence of the property’s value. We therefore reverse
the BTA’s decision.
                                       FACTS
                                    The property
       {¶ 4} The property at issue is located at 3259 Desota Avenue in Cleveland
Heights, Ohio, and has been improved by a two-family dwelling.
       {¶ 5} Huntington National Bank acquired the property at a sheriff’s sale in
August 2010, and HUD assumed the property from Huntington in September
2010. Schwartz purchased the property from HUD for $5,000 on October 17,
2011, and holds it in trust for Vladimir Victor.
                         Valuation and BOR proceedings
       {¶ 6} In tax year 2011, the Cuyahoga County fiscal officer valued the
property at $126,800, and Schwartz filed a complaint seeking a decrease to
$30,000. No countercomplaint was filed.




                                          2
                               January Term, 2015




       {¶ 7} The BOR held a hearing on January 25, 2013. Schwartz did not
appear, but he was represented by counsel and presented testimony from Victor
about the property and the 2011 sale.
       {¶ 8} Victor testified that he had learned that the property was for sale
while caring for an adjacent home on Desota Avenue. The property was listed
with Sarver Realty, and a sale sign was posted in the yard for three years. Victor
made several attempts to purchase the property, but his offers were not accepted.
Later, Sarver Realty contacted Victor after a sale to another buyer fell through.
Sarver Realty told Victor that if he did not buy it, the property would be
demolished.
       {¶ 9} At the time of the hearing, Victor was renting out the property’s
lower suite for a three-month term, at a rate of $650 per month. He did not have
any other renters lined up. Victor testified that the city had sent notice of “a lot
of” housing-code violations, but had not sent formal notice of an intent to raze the
property.
       {¶ 10} Schwartz’s counsel submitted eight exhibits documenting other
sales on Desota Avenue between September 2008 and January 2013, many of
which had been sheriff’s sales or foreclosure sales. At the hearing, he challenged
the BOR to find a comparable with a higher sale price on that street.
       {¶ 11} On February 14, 2013, the BOR issued a decision retaining the
fiscal officer’s valuation. The BOR’s “Oral Hearing Worksheet and Journal
Entry” noted:


            No evidence received to substantiate claim that property is
            not inhabitable. BOR notes sale 10/17/11 from HUD. Not
            arms length. Sales submitted are bank & repo sales in comp
            sales report with no analysis as to how properties are
            comparable. Information is but raw sales data which BOR is




                                         3
                              SUPREME COURT OF OHIO




           left to speculate. Use of neighboring assessed value to sale
           price is not valid indicator of value.


                                     BTA proceedings
       {¶ 12} Schwartz appealed to the BTA under R.C. 5717.01, again
requesting a reduction to $30,000. He submitted a brief in support, but the fiscal
officer and BOR did not file briefs.
       {¶ 13} In his brief, 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.
       {¶ 14} Next, Schwartz argued that a market-data analysis supported a
valuation of $30,000. See Ohio Adm.Code 5703-25-05(G); 5703-25-11(C)(1).
He relied on the eight comparables that he had submitted to the BOR, as well as
new evidence of “Other Sales on Desota Avenue Closest in Time to 01/01/2011.”
For each allegedly comparable property, Schwartz provided the fiscal officer’s
2011 valuation. Ultimately, he asked, “is it realistic and fair to state that HUD
could have sold the property for $126,800 in such a depressed market?”
       {¶ 15} The BTA held a hearing on October 28, 2013. At the hearing,
Schwartz’s counsel explained that even though the property “was purchased for
$5,000 on October 17th, 2011,” Schwartz was “agreeable to a valuation of 30.
* * * So I think he’s being fair.”
       {¶ 16} The BTA affirmed.           In its decision, the BTA explained that
Schwartz had the burden to prove a value of $30,000. The BTA rejected the 2011
sale price as the best evidence of value, reasoning that a HUD sale does not
indicate market value. The BTA then observed that Schwartz’s information about
other properties was “nothing more than a list of raw sales data.” BTA No. 2013-




                                            4
                                     January Term, 2015




608, 2013 WL 6834186, *2 (Nov. 13, 2013). Therefore, the BTA stated, it was
“left to speculate as to how common differences, e.g., location, size, quality of
construction of improvements, nature of amenities, date of sale as opposed to tax
lien date, etc., may affect a valuation determination.” Id. Ultimately, the BTA
found “an insufficient basis upon which to alter the fiscal officer’s original
assessment of the property.” Id.
         {¶ 17} Schwartz appealed and asserts four propositions of law.1
                                           ANALYSIS
         {¶ 18} “A party seeking an increase or decrease in valuation bears the
burden of proof before a board of revision.” 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”; it is not enough to merely introduce evidence that
calls the board of revision’s valuation into question. Id.
         {¶ 19} This court reviews BTA decisions only to determine whether they
are “reasonable and lawful.” R.C. 5717.04. In doing so, 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. By contrast, 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.


1
 In their brief, the county appellees assert that Schwartz failed to serve the tax commissioner with
the notice of appeal, a jurisdictional defect under R.C. 5717.04. But Schwartz later produced
certified-mail information indicating that the commissioner had been timely served.




                                                 5
                                 SUPREME COURT OF OHIO




    The BTA erred by rejecting the 2011 HUD sale price as evidence of value
        {¶ 20} Schwartz’s first proposition of law asserts that the BTA acted
unreasonably and unlawfully by finding that the 2011 sale price for the property,
$5,000, was not the best evidence of value.2
       The 1851 Ohio Constitution did not implicitly nullify R.C. 5713.04’s
               restriction on using prices from an auction or forced sale
        {¶ 21} As an initial matter, Schwartz argues that the 1851 Ohio
Constitution implicitly nullified the statutory provision that states that “[t]he price
for which such real property would sell at auction or forced sale shall not be taken
as the criterion of its value.” R.C. 5713.04.
        {¶ 22} The General Assembly initially adopted a restriction on using
prices from auctions and forced sales as evidence of property value in 1846, in
language very similar to that of current R.C. 5713.04. See 44 Ohio Laws 91.
Five years later, Ohioans approved the 1851 Ohio Constitution. Article XII,
Section 2 of the 1851 Constitution required the General Assembly to pass laws
taxing real property “according to its true value in money.”3 50 Ohio Laws 3, 26.
Schwartz contends that “the adoption of Article XII, Section 2, elevating to
constitutional status the command that real property be taxed ‘according to its true
value in money’ by implication nullified the conflicting statutory language” about
not treating auction and forced sale prices as the criterion of value.
        {¶ 23} Repeal by implication, even by a constitutional provision, has long
been disfavored. See State ex rel. Evans v. Dudley, 1 Ohio St. 437, 441 (1853);
State ex rel. Stokes v. Probate Court of Cuyahoga Cty., 17 Ohio App.2d 247, 249-

2
 Although Schwartz did not seek a valuation of $5,000 before the BOR or the BTA (he requested a
reduction to $30,000), the BTA expressly found that the $5,000 HUD sale price was “not the best
evidence” of the property’s true value under R.C. 5713.04. 2013 WL 6834186, at *1, citing
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 (“Fenco”).
3
 Article XII, Section 2 has since been amended to require the legislature to enact laws taxing real
property “by uniform rule according to value.” See 1929 H.J.Res. No. 8, 113 Ohio Laws 790.




                                                6
                                  January Term, 2015




250, 246 N.E.2d 607 (8th Dist.1969). To determine whether a constitutional
provision implicitly repealed a statutory provision, this court considers whether
there is a clear “repugnancy between the provisions” and whether they are “so
contrary to each other that they cannot be reconciled.” Evans at 441. If the
General Assembly could have enacted the same law even after the adoption of the
later constitutional language, then the law “must be held constitutional.” State v.
Medbery, 7 Ohio St. 522, 528 (1857).          If not, then the law “must be held
unconstitutional and void.” Id.
       {¶ 24} Here, the statutory provision at issue is reconcilable with the 1851
constitutional requirement to tax property “according to its true value in money.”
The auction-and-forced-sale provision of R.C. 5713.04 codifies a general
presumption that a sale price from an auction or forced sale is not good evidence
of a property’s value because the underlying transaction was not voluntary and at
arm’s-length. See Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of
Revision, 141 Ohio St.3d 243, 2014-Ohio-4723, 20 N.E.3d 1086, ¶ 2. In other
words, the provision instructs assessors how to determine a property’s true value;
it does not tell them to tax a property sold at auction or in a forced sale for
anything other than its true value.
       {¶ 25} In short, the 1851 Ohio Constitution did not implicitly nullify the
auction-and-forced-sale provision of R.C. 5713.04.
           The BTA acted unreasonably by finding that this transaction
                       was not voluntary and at arm’s-length
       {¶ 26} Next, Schwartz argues that even if R.C. 5713.04 is constitutional,
the auction-and-forced-sale provision does not foreclose reliance on the 2011 sale
price as the best evidence of the property’s value.
       {¶ 27} 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. See Olentangy




                                          7
                            SUPREME COURT OF OHIO




Local Schools, 141 Ohio St.3d 243, 2014-Ohio-4723, 20 N.E.3d 1086, at ¶ 2;
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, ¶ 26 (“Fenco”).
        {¶ 28} This court regards HUD sales as “forced sales” for purposes of
R.C. 5713.04 because they are generally not indicative of value. Fenco at ¶ 21.
As we explained in Fenco,


          [HUD] serves as a “guarantor of loans which are made by a
          mortgage lending institution to a mortgagor property owner,”
          so that when the lending institution forecloses on the
          defaulting owner, the lender “obtains title to the property,
          often as a result of judicial sale,” after which the lender
          transfers title to HUD “for the amount of the Guarantee.”


Id. at ¶ 28, quoting Helfrich v. Licking Cty. Bd. of Revision, BTA No. 2007-N-
414, 2008 WL 3198139, *4 (July 29, 2008). HUD thus “obtains the property
‘under duress, and obviously seeks to divest itself of the property for at least the
amount of its guarantee.’ ” Fenco at ¶ 29, quoting Matic v. Mahoning Cty. Bd. of
Revision, BTA No. 1990-H-1114, 1992 WL 380954, *4 (Dec. 11, 1992). In short,
a sale of foreclosed property by HUD is generally regarded as a transaction that is
not a voluntary sale between typically motivated market participants. Fenco at
¶ 22.
        {¶ 29} As in Fenco, the sale in question here was a HUD sale. Here, HUD
guaranteed a loan by Huntington Bank to a previous owner of 3259 Desota
Avenue. The bank obtained title to the property at a sheriff’s sale in August 2010
(apparently after the owner defaulted), then transferred title to HUD.        After
approximately one year, HUD sold the property to Schwartz for $5,000. Under




                                         8
                                      January Term, 2015




Fenco, this $5,000 sale price is presumptively not evidence of the property’s
value.4
          {¶ 30} However, the 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. Schwartz also cited other sales
on Desota Avenue as proof that the market could not bear a higher sale price at
that time.
          {¶ 31} Under these circumstances, we hold 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. Accordingly, we find merit in Schwartz’s
first proposition of law and reverse the decision of the BTA.
                                          CONCLUSION
          {¶ 32} For the foregoing reasons, we reverse the decision of the BTA and
remand with instructions that the $5,000 sale price be used as the property’s value
for tax year 2011.
                                                                               Decision reversed
                                                                            and cause remanded.
          O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, and O’NEILL, JJ.,
concur.


4
 Schwartz argues that Fenco was wrongly decided. But his arguments for overturning that
decision are not compelling. Alternatively, he argues that Fenco does not apply to this case because
here the county appellees did not submit evidence supporting their valuation. But, as explained above,
the proponent of a sale price from a HUD foreclosure sale bears the burden to overcome a presumption
of involuntariness, not the other way around.




                                                  9
                            SUPREME COURT OF OHIO




       KENNEDY and FRENCH, JJ., dissent.
                          _________________________
       FRENCH, J., dissenting.
       {¶ 33} This case turns on whether the 2011 sale price of a property owned
by the United States Department of Housing and Urban Development (“HUD”) is
the best evidence of that property’s value for tax year 2011. The Board of Tax
Appeals (“BTA”) found that the sale in question was not the best evidence of
value. Because that determination was neither unlawful nor unreasonable on the
record before us, I would defer to the BTA’s judgment about both the nature of
the HUD sale and the value of the subject property. I therefore respectfully
dissent from the majority’s contrary holding.
       {¶ 34} This court has long recognized that a HUD sale price is
presumptively not evidence of a property’s value 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. However, a property owner can rebut this
presumption with evidence that a particular HUD sale was an arm’s-length
transaction between typically motivated parties. See Fenco at ¶ 26.
       {¶ 35} The per curiam opinion correctly identifies this legal standard, but
it fails to accord the required deference to the BTA’s determination that appellant,
Fred P. Schwartz, failed to rebut the Fenco presumption in this case. This court
must 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. We will “reverse BTA findings only when there is a total absence of
evidence to support a particular finding.” HealthSouth Corp. v. Testa, 132 Ohio
St.3d 55, 2012-Ohio-1871, 969 N.E.2d 232, ¶ 14. This deference is appropriate




                                        10
                                January Term, 2015




because the BTA has wide discretion in determining the weight of evidence
before it and the credibility of witnesses. Apple Group Ltd. v. Medina Cty. Bd. of
Revision, 139 Ohio St.3d 434, 2014-Ohio-2381, 12 N.E.3d 1188, ¶ 14.
         {¶ 36} Here, the BTA was responsible for deciding whether Schwartz met
his burden to prove that the HUD sale in question was an arm’s-length
transaction. In this regard, the BTA could consider evidence of whether the sale
was “voluntary, i.e., without compulsion or duress,” whether it “[took] place in an
open market,” and whether the parties to the transaction acted “in their own self-
interest.” Walters v. Knox Cty. Bd. of Revision, 47 Ohio St.3d 23, 25, 546 N.E.2d
932 (1989). At the BTA hearing, the only evidence Schwartz presented on this
issue was testimony from his representative, Vladimir Victor. The BTA had the
opportunity to evaluate Victor’s credibility and the weight of his testimony, and it
found that Schwartz failed to meet his burden to rebut the Fenco presumption.
Because it is not this court’s role to “sit either as a super BTA or as a trier of fact
de novo,” DAK, PLL v. Franklin Cty. Bd. of Revision, 105 Ohio St.3d 84, 2005-
Ohio-573, 822 N.E.2d 790, ¶ 16, and because the BTA’s finding is neither
unreasonable nor unlawful under R.C. 5717.04, I regard it as our duty to affirm it.
         {¶ 37} In light of this conclusion, it is necessary to briefly address
Schwartz’s remaining three propositions of law, which the per curiam opinion
does not reach.
         {¶ 38} In his second proposition of law, Schwartz argues that even if the
HUD sale was not the best evidence of value, the BTA acted unreasonably and
unlawfully by rejecting his evidence of comparable sales. As with the above
determination, I would defer to the BTA’s finding that these comparables were
not probative evidence of value because they amounted to “nothing more than a
list of raw sales data.” BTA No. 2013-608, 2013 WL 6834186, *2 (Nov. 13,
2013).




                                          11
                                SUPREME COURT OF OHIO




        {¶ 39} In his third proposition of law, Schwartz argues that the BTA
applied the incorrect burden of proof. According to Schwartz, once he presented
probative, competent evidence that the fiscal officer’s valuation was speculative
and inflated, the burden of proof shifted to the county to prove its valuation. But
Schwartz misunderstands his burden. As the appellant, Schwartz must introduce
evidence of a specific valuation.5 He is not entitled to a reduction simply by
presenting evidence that the fiscal officer’s valuation was too high.                     See
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).
        {¶ 40} Finally, Schwartz argues that the BTA “failed to act as a fair and
impartial tribunal” in light of the errors asserted in his first three propositions of
law. This due-process claim fails because Schwartz’s first three propositions of
law are unpersuasive and because, contrary to his claims, the BTA’s decision
adequately addressed his arguments.
        {¶ 41} For these reasons, I would affirm the decision of the BTA. I
therefore respectfully dissent.
        KENNEDY, J., concurs in the foregoing opinion.
                             _________________________
        J. Alex Morton, for appellant.
        Timothy J. McGinty, Cuyahoga County Prosecuting Attorney, and Reno J.
Oradini Jr., Assistant Prosecuting Attorney, for appellees.
                                  _________________




5
 Schwartz requested a valuation of $30,000, but he offered no explanation of how he arrived at
that value.




                                             12
