ATTORNEY FOR PETITIONER:                          ATTORNEYS FOR RESPONDENT:
PAUL M. JONES, JR.                                CURTIS T. HILL, JR.
PAUL JONES LAW, LLC                               ATTORNEY GENERAL OF INDIANA
Indianapolis, IN                                  WINSTON LIN
                                                  GREGORY P. GADSON
                                                  DEPUTY ATTORNEYS GENERAL
                                                  Indianapolis, IN

                                                  ATTORNEYS FOR AMICUS CURIAE:
                                                  MARILYN S. MEIGHEN
                                                  MARJORIE K. RICE
                                                  MONROE COUNTY BOARD OF
                                                  COMMISSIONERS
                                                  Bloomington, IN



                                IN THE
                                                                         FILED
                          INDIANA TAX COURT                          Sep 29 2017, 4:36 pm

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
CVS CORPORATION (#6698-02),                     )                         and Tax Court

                                                )
      Petitioner,                               )
                                                )
                     v.                         ) Cause No. 49T10-1607-TA-00020
                                                )
MONROE COUNTY ASSESSOR,                         )
                                                )
      Respondent.                               )


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

                                  FOR PUBLICATION
                                  September 29, 2017
WENTWORTH, J.

      CVS Corporation #6698-02 (“CVS”) challenges the Indiana Board of Tax Review’s

final determination valuing its real property for the 2011-2013 tax years. Upon review,

the Court affirms the Indiana Board’s final determination.
                        FACTS AND PROCEDURAL HISTORY

       The subject property is a 12,799 square-foot CVS store located on a 2.79 acre

parcel in Bloomington, Indiana.     (Cert. Admin. R. at 249-51.)      The Monroe County

Assessor valued the property at $2,476,200 for 2011, $2,354,700 for 2012, and

$2,374,900 for 2013. (Cert. Admin. R. at 249.) Believing these values to be too high,

CVS appealed the assessments to the Monroe County Property Tax Assessment Board

of Appeals (“PTABOA”). The PTABOA affirmed the assessments and CVS appealed to

the Indiana Board.

       The parties agreed to an expedited review procedure before the Indiana Board

based on stipulated evidence. (Cert. Admin. R. at 43-46.) See 52 IND. ADMIN. CODE 2-6-

3(b) (2016) (listing expedited review procedures). The stipulated evidence consisted of

the property record card, the 14th edition of The Appraisal of Real Estate, and the parties’

appraisal reports completed by certified appraisers in compliance with the Uniform

Standards of Professional Appraisal Practice. (Cert. Admin. R. at 48-49, 134-35, 256-

57.) CVS’s appraisal report applied the sales comparison, income, and cost approaches

to value the subject property at $1,810,000 for 2011, $1,830,000 for 2012, and

$1,940,000 for 2013. (Cert. Admin. R. at 174-75, 239-40.) The Assessor’s appraisal

report also used the sales comparison, income, and cost approaches to value the

property, but arrived at the higher assessed values of $2,470,000 for 2011, $2,510,000

for 2012, and $2,555,000 for 2013. (Cert. Admin. R. at 258, 381.)

       After submitting the stipulated evidence, CVS asked the Indiana Board to take

judicial notice of the records of two prior administrative proceedings involving the same




                                             2
parties and the same appraisers.1 (Cert. Admin. R. at 1329 n. 1.) Although the prior

administrative records involved two distinct CVS properties, each having its own property-

specific appraisal, CVS claimed that the testimony within those prior records would

demonstrate that in the current matter the CVS appraisal was generally more probative

than that of the Assessor. (See generally Cert. Admin. R. at 1329, 1332-48.)

       On June 15, 2016, the Indiana Board issued its final determination. It first denied

CVS’s request for judicial notice, stating that the prior administrative records were not part

of the stipulated evidence. (Cert. Admin. R. at 60 ¶ 6 n.4.) Then, after weighing the

evidence, the Indiana Board determined the property’s value by adopting the portions of

each appraisal report it found most reliable: the land values from CVS’s appraisal report

and the improvement values from the Assessor’s appraisal report. (Cert. Admin. R. at

76-82, 83-84 ¶¶ 78-79.) This resulted in a final value for the property of $2,332,295 for

2011, $2,361,749 for 2012, and $2,342,793 for 2013. (Cert. Admin. R. at 84 ¶ 79.)

       CVS initiated this original tax appeal on July 28, 2016. The Court heard the parties’

oral arguments on March 7, 2017. Additional facts will be supplied as necessary.

                                 STANDARD OF REVIEW

       The party seeking to overturn a final determination of the Indiana Board 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). CVS must therefore demonstrate that

the Indiana Board’s final determination is arbitrary, capricious, an abuse of discretion, or



1
  These administrative proceedings concerned CVS # 3195-02 and CVS # 6697-02, and were
each later appealed to this Court. See Monroe Cnty. Assessor v. SCP 2002 E19 LLC 6697, 77
N.E.3d 270 (Ind. Tax Ct. 2017) (concerning CVS # 6697-02), appeal filed (Ind. 2017); Monroe
Cnty. Assessor v. SCP 2007-C-26-002, LLC, 62 N.E.3d 478 (Ind. Tax Ct. 2016) (concerning CVS
# 3195-02), review denied.
                                              3
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) (2017).

                                          ANALYSIS

       On appeal, CVS asserts that the Indiana Board’s final determination should be

reversed for three reasons. First, it contends that the final determination is contrary to

law because the Indiana Board did not take judicial notice of two prior cases’

administrative records. (Pet’r Br. at 4-6.) Second, CVS claims that the final determination

is arbitrary and capricious because the Indiana Board did not rely on CVS’s income

approach. (See Pet’r Br. at 6-8; Pet’r Reply Br. at 2-4.) Third, CVS argues that the final

determination is not supported by substantial evidence because the evidence the Indiana

Board relied on was not credible.2 (Oral Arg. Tr. at 25-32.)

                                   I.      Contrary to Law

       CVS asserts that the law required the Indiana Board to take judicial notice of the

administrative records related to Monroe County Assessor v. SCP 2007-C-26-002, LLC,

62 N.E.3d 478 (Ind. Tax Ct. 2016), review denied (“CVS 1”), and Monroe County Assessor

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


2
  The Monroe County Board of Commissioners has argued as amicus curiae in support of the
Assessor that the Court’s previous decisions interpreting market value-in-use are incorrect, and
that the Indiana Board’s determination should be affirmed because it is a step away from those
decisions. (See Br. of Amicus Curiae Bd. of Comm’rs of the Cnty. of Monroe at 2-7.) The Court
stands by its previous decisions. See Howard Cnty. Assessor v. Kohl’s Indiana LP, 57 N.E.3d
913, 918-19 (Ind. Tax Ct. 2016) (stating that the Court agrees with prior jurisprudence governing
market value-in-use), review denied. If the Board of Commissioners wishes to change the market
value-in-use standard, its remedy is with the Legislature rather than this Court. See DeKalb Cnty.
Assessor v. Chavez, 48 N.E.3d 928, 931 (Ind. Tax Ct. 2016) (explaining that the Court applies
the law as written and that parties must ask the Legislature if they wish to change the law).
                                                4
(“CVS 2”), because they involved the same parties, the same issues, and the same

appraisers, and thus, should have controlled the outcome of the current case. (Pet’r Br.

at 4-6; Oral Arg. Tr. at 14.) CVS bases this claim on three authorities: (1) 52 Indiana

Administrative Code 2-7-4; (2) Indiana Rule of Evidence 201(b)(5); and (3) Horton v.

State, 51 N.E.3d 1154 (Ind. 2016). (Pet’r Br. at 4-5.) None of these authorities, however,

required the Indiana Board to take judicial notice.

       First, 52 Indiana Administrative Code 2-7-4 does not support CVS’s claim because

it provides only that the Indiana Board “may take official notice of . . . [t]he record of other

proceedings before [it,]” not that it must do so. 52 IND. ADMIN. CODE 2-7-4(a)(2) (2016)

(emphasis added). See W EBSTER'S THIRD NEW INT'L DICTIONARY 1396, 2085-86 (2002

ed.) (explaining that “may” is a discretionary term while “shall” is a mandatory one).

Second, Indiana Rule of Evidence 201 does not support CVS’s claim because it requires

a court to take judicial notice of court records when “a party requests it and the court is

supplied with the necessary information.” Ind. Evidence Rule 201(b)(5), (c)(2). Thus, this

Rule is not inherently applicable to an executive administrative agency such as the

Indiana Board.      See 52 IND. ADMIN. CODE 2-7-2(a)(2) (2016) (stating that “[t]he

administrative law judge shall regulate the course of the proceedings in . . . a manner

without recourse to the rules of evidence”). Finally, the Horton case is not authoritative

in these circumstances because it concerned whether judicially noticed documents must

be entered into the record, not whether a court must take judicial notice of a prior case’s

records. See Horton, 51 N.E.3d at 1155, 1160-63.

       While the Indiana Board had authority to take official notice of the records of other

proceedings before it, CVS has failed to support its contention that the Indiana Board was



                                               5
required to do so.      Therefore, the Court will not reverse the Indiana Board’s final

determination on this basis.

                              II.     Arbitrary and Capricious

         Next, CVS claims that the final determination is arbitrary and capricious because

the Indiana Board did not determine that the CVS appraisal’s income approach was the

most probative evidence of value like it had in CVS 1 and CVS 2. (Pet’r Br. at 6-7.) CVS,

however, has not identified any authority requiring the Indiana Board to reach identical

conclusions regarding the weight of evidence to those it reached in previous cases. (See

Pet’r Br. at 6-8; Pet’r Reply at 2-4; Oral Arg. Tr. at 15-18.)

         The Tax Court has long-held that “each assessment and each tax year stands

alone,” and the Indiana Board evaluates each property’s value based on its specific facts

and circumstances. See e.g., Fleet Supply, Inc. v. State Bd. of Tax Comm’rs, 747 N.E.2d

645, 650 (Ind. Tax Ct. 2001), review denied. Thus, “the Indiana Board is not bound to

reach the same conclusions regarding the persuasive value of an appraiser’s reports and

valuation methods for different tax years or different properties.” CVS Corp. v. Monroe

Cnty. Assessor, Cause No. 49T10-1605-TA-11, slip op. at 11 (Ind. Tax Ct. Sept. 29,

2017).

         A final determination is arbitrary and capricious when there is no basis in the record

that would lead a reasonable person to the same conclusion. See Dawkins v. State Bd.

of Tax Comm’rs, 659 N.E.2d 706, 709 (Ind. Tax Ct. 1995). Here, the record shows that

CVS appraisal’s income approach used both national and regional data to determine

market rents and capitalization rates. (Cert. Admin. R. at 218-38.) Its income analysis

adjusted lease rates for one of the comparable properties explaining that this adjustment



                                               6
was due to its superior location, but it did not explain why it did not make any adjustments

to the other comparable properties. (Cert. Admin. R. at 80 ¶¶ 66, 221-29.) Moreover, the

Indiana Board noted that CVS’s appraisal report did not explain how the national and

regional data it used related to the subject property. (Cert. Admin. R. at 80 ¶ 66, 80 ¶

68.) As a result, the Indiana Board determined that the CVS appraisal’s income approach

was not persuasive. (See Cert. Admin. R. at 81 ¶ 69, 82-83 ¶ 75.)

       Accordingly, the Indiana Board reasonably concluded that the CVS appraisal’s

income approach was not persuasive based on the lack of adequate explanations in its

analysis of the evidence. Cf. French Lick Twp. Tr. Assessor v. Kimball Int’l, Inc., 865

N.E.2d 732, 739 (Ind. Tax Ct. 2007) (explaining that a taxpayer is required to make the

Indiana Board understand its evidence for the evidence to be considered probative). The

Indiana Board’s determination was therefore neither arbitrary nor capricious.          See

Dawkins, 659 N.E.2d at 709.

                       III.   Substantial and Reliable Evidence

       Finally, CVS contends that the final determination is not supported by substantial

and reliable evidence. (Oral Arg. Tr. at 30.) The Tax Court may not reverse a final

determination that is supported by substantial and reliable evidence. Cf. I.C. § 33-26-6-

6(e)(5).   Furthermore, a final determination is supported by substantial and reliable

evidence if a reasonable person reviewing the entire record could find enough relevant

evidence to support it. See DeKalb Cnty. Assessor v. Chavez, 48 N.E.3d 928, 931-32

(Ind. Tax Ct. 2016).

       CVS claims that, based on the appraisals from CVS 1 and CVS 2, the value of the

CVS property at issue here should be comparably less than other Monroe County CVS



                                             7
stores. (See Oral Arg. Tr. at 27.) See also CVS 1, 62 N.E.3d at 480; CVS 2, 77 N.E.3d

at 272. Accordingly, CVS concludes that the Indiana Board’s values are not supported

by the evidence because they are roughly even with the values determined in CVS 1 and

CVS 2. (See Oral Arg. Tr. at 25-29.) See also CVS 1, 62 N.E.3d at 480; CVS 2, 77

N.E.3d at 271.

       The Indiana Board explained in its final determination, however, the reasons it

weighed the credibility of the evidence as it did.    In valuing the property, the Indiana

Board determined that both parties’ calculations under the cost approach were the most

reliable evidence of value because the parties’ other approaches lacked data relating

physically comparable properties to the local market. (See Cert. Admin. R. at 82-83 ¶

75.) It further determined that the Assessor’s improvement valuation was generally

reliable, whereas CVS itself acknowledged that parts of its improvement valuation – such

as its external obsolescence adjustment – were unreliable. (See Cert. Admin. R. at 66 ¶

26, 70 ¶¶ 36-38, 76 ¶ 53, 77 ¶ 54, 81 ¶¶ 70-71, 83-84 ¶ 78, 190.) Moreover, it determined

that CVS’s land valuation, which explained the adjustments made to the comparable

value of local properties to account for variations in buyer motivations, market conditions,

frontage, and lot size, was more probative than the Assessor’s land valuation that

contained several errors. (See Cert. Admin. R. at 65 ¶¶ 22-23, 77 ¶¶ 55-56, 83-84 ¶¶ 78-

79.)   Accordingly, the Indiana Board’s final determination is supported by substantial

evidence, and the Court cannot and will not reweigh the evidence on appeal. See Kildsig

v. Warrick Cnty. Assessor, 998 N.E.2d 764, 767 (Ind. Tax Ct. 2013) (explaining that the

Court may not reweigh the evidence that was presented to the Indiana Board).




                                             8
                                   CONCLUSION

     For the above stated reasons, the Indiana Board’s final determination in this matter

is AFFIRMED.




                                          9
