ATTORNEY FOR PETITIONER:               ATTORNEYS FOR RESPONDENT:
PAUL M. JONES, JR.                     CURTIS T. HILL, JR.
PAUL JONES LAW, LLC                    ATTORNEY GENERAL OF INDIANA
Greenwood, IN                          KELLY S. EARLS
                                       ZACHARY D. PRICE
                                       WINSTON LIN
                                       ALEKSANDRINA P. PRATT
                                       DEPUTY ATTORNEYS GENERAL
                                       Indianapolis, IN
_____________________________________________________________________
                                                                           FILED
                              IN THE                                  Dec 09 2019, 3:59 pm


                        INDIANA TAX COURT                                  CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
_____________________________________________________________________       and Tax Court



CVS CORPORATION,                          )
                                          )
     Petitioner,                          )
                                          )
                 v.                       ) Cause No. 18T-TA-00018
                                          )
CATHY SEARCY, in her official capacity as )
ELKHART COUNTY ASSESSOR,                  )
                                          )
     Respondent.                          )
______________________________________________________________________

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

                                 FOR PUBLICATION
                                  December 9, 2019

WENTWORTH, J.

      On May 25, 2018, the Indiana Board of Tax Review issued a final determination

valuing a CVS store in Elkhart, Indiana for purposes of the 2012 through 2015

assessments. CVS has challenged that final determination, but the Court affirms.

                       FACTS AND PROCEDURAL HISTORY

      The property at issue in this case is the CVS store located at 104 West Hively
Avenue in Elkhart, Indiana. (See Cert. Admin. R. at 1, 63.) The store, constructed in

2004, is approximately 10,880 square feet and sits on 1.26 acres of land. (Cert. Admin.

R. at 75.)

       The Elkhart County Property Tax Assessment Board of Appeals (“PTABOA”)

valued the subject property for the 2012 through 2015 assessments as follows:

$1,030,600; $1,090,700; $1,118,200; and $1,106,200. (See Cert. Admin. R. at 1-2, 10-

11, 28-29.) Believing those values to be too high, CVS timely filed appeals with the

Indiana Board.   The Indiana Board conducted one administrative hearing on all of

CVS’s appeals in May of 2017.

       During the hearing, certified appraisers for both CVS and the Assessor presented

Appraisal Reports in conformance with the Uniform Standards of Professional Appraisal

Practice (“USPAP”) that valued the subject property for each of the assessment years.

(See Cert. Admin. R. at 63-206, 255-531.) CVS’s appraiser, Sara Coers, employed all

three approaches to value the property (i.e., the sales comparison, income, and cost

approaches), reconciling her results into a final value of $800,000 for 2012; $840,000

for 2013; $850,000 for 2014; and $890,000 for 2015. (See Cert. Admin. R. at 64, 198-

99, 1132-33.) In arriving at these final values, Coers gave the most weight to her sales

comparison and income approaches. (See Cert. Admin. R. at 75-77, 199, 1132-33.)

       The Assessor’s appraiser, J. David Hall, also employed all three approaches,

reconciling his results into a final value of $1,790,000 for 2012; $1,800,000 for 2013;

$1,810,000 for 2014; and $1,820,000 for 2015. (See Cert. Admin. R. at 257, 440, 1438-

39.)   In arriving at his final values, Hall gave equal weight to each of the three

approaches. (See Cert. Admin. R. at 440, 1439.)




                                           2
     On May 25, 2018, the Indiana Board issued its final determination in the matter.

In its final determination, the Indiana Board found that the sales comparison and income

approaches presented in both Appraisal Reports contained so many flaws that they

were unpersuasive, if not completely unreliable. (See, e.g., Cert. Admin. R. at 1012 ¶

96.) The Indiana Board then examined the cost approaches provided in each Appraisal

Report, and after finding both probative, it ultimately found Coers’s approach more

persuasive than Hall’s. (See Cert. Admin. R. at 988 ¶¶ 18-19, 995-96 ¶¶ 39-42, 1001 ¶

56, 1002-03 ¶ 62, 1007-08 ¶¶ 75-79, 1010 ¶¶ 86-87, 1012 ¶ 97.) Nonetheless, the

Indiana Board found the portion of her cost approach that accounted for the presence of

external obsolescence “entirely unsupported.” (Compare Cert. Admin. R. at 131-40,

766-67, 773 (indicating why Coers believed the subject property suffered from external

obsolescence and how she quantified it) with Cert. Admin. R. at 996 ¶ 42 n.6, 1007 ¶

78, 1012 ¶ 98 (indicating why the Indiana Board did not find her rationale persuasive).)

Consequently, the Indiana Board modified Coers’s cost approach by removing the

negative adjustment she made to account for the presence of external obsolescence

and assigned the following values to the subject property:       $1,222,805 for 2012;

$1,226,743 for 2013; $1,246,096 for 2014; and $1,211,040 for 2015. (Cert. Admin. R.

at 1012 ¶ 98 n.10.)

      CVS initiated an original tax appeal on July 6, 2018. The Court heard the parties’

oral arguments on May 23, 2019. Additional facts will be supplied as necessary.

                               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




                                           3
Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003). Accordingly, CVS must demonstrate

to the Court that the Indiana Board’s final determination in this matter is arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to

constitutional right, power, privilege, or immunity; in excess of or short of statutory

jurisdiction, authority, or limitations; without observance of procedure required by law; or

unsupported by substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5)

(2019).

                                   LAW & ANALYSIS

                                             I.

       CVS first argues that the Indiana Board’s final determination is contrary to law

because it is not based on evidence in the administrative record. Specifically, CVS

explains that pursuant to Indiana Code § 6-1.1-15-4(j), the Indiana Board must base its

final determination exclusively on the evidence contained within the administrative

record. (See, e.g., Oral Arg. Tr. at 3, 20-21, 28.) See also IND. CODE § 6-1.1-15-4(j)

(2018) (stating that the Indiana Board’s final determination “must include separately

stated findings of fact . . . [that are] based exclusively upon the evidence on the record

in the proceeding and on matters officially noticed in the proceeding”). CVS claims that

because neither Coers nor Hall gave primary weight to their cost approaches when

advocating their values, the Indiana Board could not do so when it assigned a value to

the property in its final determination.   (See, e.g., Oral Arg. Tr. at 5-7 (stating that

“evidence from both sides says that the cost approach should not be given the sole

weight or the most weight, and [yet] the [Indiana] Board, on its own, decide[d] to do

[just] that”), 11-12 (contending that because the Indiana Board did not mirror the weight




                                             4
given by either of the appraisers, it acted outside of the evidence).) (But see Pet’r Br. at

15, 17 (claiming that this action by the Indiana Board was also unsupported by the

evidence).)

       CVS is correct that the Indiana Board is required to adopt a value based

exclusively on evidence in the administrative record, but in doing so, it is not bound to

adopt the same weight afforded to the evidence the appraisers did in their Appraisal

Reports. Indeed, to find otherwise would not only make it impossible for the Indiana

Board to carry out its duties as the trier of fact, but also would be contrary to its familiar,

ubiquitous practice prescribed by statute.          See I.C. § 6-1.1-15-4(p) (authorizing the

Indiana Board “as trier of fact, to review the probative value of an appraisal report”).

See also Madison Cty. Assessor v. Sedd Realty Co., 125 N.E.3d 676, 680 (Ind. Tax Ct.

2019) (providing that “the Indiana Board is required to ‘determine the relevance and

weight to be assigned to evidence’ before it” (quoting 52 IND. ADMIN. CODE 2-7-2(c)

(2017))); Marion Cty. Assessor v. Washington Square Mall, LLC, 46 N.E.3d 1, 11-12

(Ind. Tax Ct. 2015) (indicating that when there is an error or a flaw in an appraisal, the

Indiana Board need not find that the entire appraisal is invalid; rather, the Indiana Board

can still rely on the parts of the appraisal it determines are probative).

       The Indiana Board did not act contrary to law when it adopted its valuation of the

subject property based solely on the cost approach. Accordingly, the Court will not

reverse the Indiana Board’s final determination on this basis.

                                              II.

       Next, CVS argues that the Indiana Board’s final determination is not supported

by substantial or reliable evidence because there is no evidence in the administrative




                                              5
record that Coers’s cost approach – without her deduction for external obsolescence –

properly reflects the subject property’s market value-in-use. Specifically, CVS maintains

that once the Indiana Board determined that Coers’s cost approach was more

persuasive, it simply could not ignore the substantial unrebutted evidence that was part

and parcel of her overall calculation, i.e., adjusting for external obsolescence. (See,

e.g., Oral Arg. Tr. at 12-15; Pet’r Br. at 15-16.)

       Under the substantial evidence standard, this Court reviews the administrative

record to determine whether, when viewed as a whole, it provides a reasonably sound

basis of evidentiary support for the Indiana Board’s decision. Switzerland Cty. Assessor

v. Belterra Resort Indiana, LLC, 101 N.E.3d 895, 904 (Ind. Tax Ct. 2018), review

denied. See also Starke Cty. Assessor v. Porter-Starke Servs., Inc., 88 N.E.3d 814,

820 (Ind. Tax Ct. 2017) (defining substantial evidence as “more than a scintilla[;]” it is

such relevant evidence as a reasonable mind might accept as adequate to support a

conclusion). Because the substantial evidence standard is a highly deferential one, the

Court will uphold the Indiana Board’s final determination unless CVS can show that

there is not enough relevant evidence in the administrative record to support the Indiana

Board’s finding. See Belterra Resort, 101 N.E.3d at 904.

       During the Indiana Board hearing, Coers testified in vague generalities that the

subject property suffered from external obsolescence “because there is stagnant

population growth, lower median household incomes and oversupply retail resulting in

high availabilities, weak absorption and a limited amount of new construction. This is

overall a softer area of Elkhart with a softer market that has less demand for retail.”

(Cert. Admin. R. at 1093.) (See also Cert. Admin. R. at 94, 1103, 1140-41 (alluding to




                                               6
the negative impact of unemployment within the area’s RV manufacturing industry on

median household incomes, population growth, and overall demand for retail space).)

In contrast, Hall supported his opinion that the subject property did not suffer from

external obsolescence with evidence that the local area actually grew in population,

employment, and gross domestic product during the years at issue. (See Cert. Admin.

R. at 277-86, 361, 368, 375, 382, 1778-82.) Furthermore, Hall impeached Coers’s

credibility on this point by highlighting her contradictions: stating the market was in

decline for purposes of justifying the presence of external obsolescence on the one

hand while adjusting the sales in her sales comparison approach upward to account for

“market conditions” on the other. (See Cert. Admin. R. at 1784-85.)

       Given these opposing evidentiary presentations, the Indiana Board was required

to weigh them and determine which one it found more persuasive. See I.C. § 6-1.1-15-

4(p); Sedd Realty Co., 125 N.E.3d at 680. The Indiana Board did just that and found in

favor of Hall.   (See Cert. Admin. R. at 996 ¶ 42 n.6, 1007 ¶ 78, 1012 ¶ 98.)             A

reasonable mind could do the same. See Porter-Starke Servs., 88 N.E.3d at 820.

       In actuality, CVS’s claim merely asks the Court to reweigh the evidence that was

presented to the Indiana Board in its favor. The Court cannot reweigh the evidence

absent a showing that the Indiana Board has abused its discretion. See Stinson v.

Trimas Fasteners, Inc., 923 N.E.2d 496, 498-99 (Ind. Tax Ct. 2010). See also Monroe

Cty. Assessor v. SCP 2002 E19 LLC 6697, 77 N.E.3d 270, 273 (Ind. Tax Ct. 2017)

(explaining that the Indiana Board abuses its discretion when it either misinterprets the

law or when its final determination is clearly against the logic and effect of the facts and

circumstances before it), review denied.




                                             7
       Here, CVS merely argues for the superiority of Coers’s evidence, stating that she

“provided a well-supported analysis for her position in [her] Appraisal [Report] and in her

testimony. While Hall differed in opinion[,] . . . Coers fully and sufficiently explained

her[s.]” (See Pet’r Br. at 13, 15-16 (asserting that her opinion was valid because once

she made the adjustment to account for the external obsolescence, her cost approach

valuation was within the range offered by her income and sales comparison approaches

to value).) Accordingly, CVS’s argument does not identify evidence that the Indiana

Board’s final determination is against the logic and effect of the facts and circumstances

of the case, and therefore cannot rise to the level of an abuse of discretion. Moreover,

based on its review of the evidence in the administrative record, the Court finds that

substantial and reliable evidence supports the Indiana Board’s determination that the

subject property did not suffer from external obsolescence.1 The Court will therefore not

reverse the Indiana Board’s final determination on this basis.

                                               III.

       Finally, CVS argues that the Indiana Board’s final determination constitutes an

abuse of discretion because the Indiana Board chose to act as a board of appraisers

and calculate its own values for the subject property rather than rely on the expert

testimony and appraisals that were presented to it.           (See Pet’r Br. at 21.)      Stated

differently, “[t]he Indiana Board’s role is [solely] to review the evidence in the record and


1
  CVS has also argued that by removing Coers’s external obsolescence adjustment from the
cost approach, the Indiana Board acted contrary to law because it failed to value the subject
property in accordance with Indiana’s market value-in-use standard. (See Pet’r Br. at 10-14
(explaining that Indiana’s property tax system is a market-based system and the only means of
tying a value calculated under the cost approach to the market is to make an adjustment for
external obsolescence).) Given that the evidence in the administrative record supports the
Indiana Board’s conclusion that the subject property did not suffer from obsolescence in the first
place, the Court need not address this argument.


                                                8
determine which expert is more persuasive and compelling, not to step into the shoes of

an appraiser and develop, or in this case, calculate, its own values.” (Pet’r Br. at 18.)

       CVS’s argument is nothing more than a repackaging of its first two claims. Given

that the Court has already found that the Indiana Board’s actions in this case were

within its statutory authority and were neither contrary to law nor unsupported by

substantial evidence, CVS has not demonstrated an abuse of discretion. See SCP, 77

N.E.3d at 273.

                                      CONCLUSION

       CVS has not demonstrated to the Court that the Indiana Board’s final

determination is contrary to law, unsupported by substantial evidence, or constitutes an

abuse of discretion. Accordingly, the Indiana Board’s final determination in this matter

is AFFIRMED.




                                             9
