ATTORNEYS FOR PETITIONER: ATTORNEY FOR RESPONDENT:
MARILYN S. MEIGHEN PAUL M. JONES, JR.
ATTORNEY AT LAW PAUL JONES LAW, LLC
Carmel, IN Indianapolis, IN
BRIAN A. CUSIMANO
ATTORNEY AT LAW FILED
Indianapolis, IN May 25 2017, 3:18 pm
CLERK
Indiana Supreme Court
Court of Appeals
IN THE and Tax Court
INDIANA TAX COURT
MONROE COUNTY ASSESSOR, )
)
Petitioner, )
)
v. ) Cause No. 49T10-1512-TA-00032
)
SCP 2002 E19 LLC 6697, )
a/k/a CVS 6697-02, )
)
Respondent. )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA BOARD OF TAX REVIEW
FOR PUBLICATION
May 25, 2017
WENTWORTH, J.
The Monroe County Assessor challenges the Indiana Board of Tax Review’s final
determination establishing the assessed value of SCP 2002 E19 LLC 6697’s, a/k/a CVS
6697-02, (“CVS”) real property for the 2007 through 2013 tax years (the “years at issue”).
Upon review, the Court affirms.
FACTS AND PROCEDURAL HISTORY
The property at issue is a 10,800 square foot CVS store that sits on 1.97 acres of
land in Bloomington, Indiana. (Cert. Admin. R. at 1634-35.) For each of the years at
issue, the Assessor valued the subject property as follows: $3,043,100 (2007);
$3,037,700 (2008); $3,059,100 (2009); $2,995,100 (2010); $3,007,300 (2011);
$3,021,800 (2012); and $2,978,300 (2013). (Cert. Admin. R. at 129.) Believing these
values to be too high, CVS appealed each assessment to the Monroe County Property
Tax Assessment Board of Appeals (PTABOA). The PTABOA affirmed the assessments,
and CVS subsequently filed appeals with the Indiana Board. The Indiana Board
consolidated the appeals and conducted an administrative hearing in November of 2014.
At the administrative hearing, both parties presented appraisal reports done by
certified appraisers according to the Uniform Standards of Professional Appraisal Practice
(USPAP) for each of the years at issue. (See Cert. Admin. R. at 235-445, 1638-1888.)
CVS’s appraisal report (the “Coers Report”) stated that the cost approach was not
applicable because it would not be considered by market participants and there was
inadequate data to develop a valid estimate of value using this approach. (Cert. Admin.
R. at 410-11.) Therefore, the Coers Report relied solely on the sales-comparison and
income approaches, based on a combination of national, regional, and local data, in
valuing the subject property at $2,040,000 in 2007; $1,990,000 in 2008; $1,970,000 in
2009; $1,750,000 in 2010; $1,840,000 in 2011; $1,860,000 in 2012; and $2,010,000 in
2013. (Cert. Admin. R. at 328-411, 415-16.)
In contrast, the Assessor’s value calculations in its appraisal report (the “Johnson
Report”) used all three approaches, based on local data, to value the subject property.
2
(Cert. Admin. R. at 1807-08.) The Johnson Report concluded that the cost and income
approaches were the most reliable approaches for valuing the subject property, and it
relied on them more heavily for its reconciled values of $2,900,000 in 2007; $2,900,000
in 2008; $3,000,000 in 2009; $3,000,000 in 2010; $3,000,000 in 2011; $3,100,000 in
2012; and $3,100,000 in 2013. (See Cert. Admin. R. at 1807-09.)
The Assessor also presented a report prepared by another certified appraiser that
reviewed the Coers Report (the “Tillema Review”). (Cert. Admin. R. at 1901-1938.) The
Tillema Review was based on the assumption that the Coers Report used an incorrect
interpretation of the market value-in-use standard.1 (Cert. Admin. R. at 1904, 1907, 1913,
1930-31.) Moreover, it specifically stated that the Coers Report was flawed because 1)
the cost approach was not applied despite being the most reliable means of valuing the
subject property and 2) the sales-comparison and income approaches used non-
comparable properties (i.e., vacant properties and “general retail” instead of “ongoing
national retail pharmacy” properties). (Cert. Admin. R. at 1904-05, 1907, 1909-13, 1917,
1919, 1921, 1923-25, 1927-28.)
On November 10, 2015, the Indiana Board issued its final determination, finding
that the Coers Report’s valuation of the subject property under the income approach was
the best evidence of its market value-in-use. (Cert. Admin. R. at 178 ¶¶ 119-20.) Thus,
the Indiana Board found that the subject property’s value was $2,237,402 in 2007,
1
The Real Property Assessment Manual defines a property’s market value-in-use as the value
“of a property for its current use, as reflected by the utility received by the owner or by a similar
user, from the property.” 2011 REAL PROPERTY ASSESSMENT MANUAL at 2 (incorporated by
reference at 50 IND. ADMIN. CODE 2.4–1–2(c) (2011)); see also Howard Cnty. Assessor v. Kohl’s
Ind. LP, 57 N.E.3d 913, 917 (Ind. Tax Ct. 2016), review denied.
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$2,178,733 in 2008, $2,165,088 in 2009, $1,850,000 in 2010, $1,980,000 in 2011,
$1,980,000 in 2012, and $2,180,000 in 2013. (Cert. Admin. R. at 179 ¶ 121.)
The Assessor initiated this original tax appeal on December 22, 2015. The Court
heard the parties’ oral arguments on October 31, 2016. 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). Accordingly, the Assessor 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) (2017).
ANALYSIS
On appeal, the Assessor contends that the Indiana Board’s final determination
must be reversed because it is “random, not supported by substantial evidence, and lacks
a coherent/rational basis for the values reached.” (Pet’r Br. at 1-2.) In support, the
Assessor makes numerous claims that the Court consolidates and restates as 1) whether
the final determination is contrary to law because it applies the wrong standard for market
value-in-use, and 2) whether the Coers Report provides substantial and reliable evidence
of the subject property’s market value-in-use because it does not rely on local data.
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I. Contrary to Law
The Assessor first claims that the Indiana Board’s final determination is contrary
to law because it did not value the subject property in accordance with Indiana’s market
value-in-use standard. (Pet’r Br. at 2.) The Assessor argues that in relying upon the
Coers Report, the Indiana Board applied this Court’s previous decisions that have
interpreted the market value-in-use standard erroneously as fair market value. (See Oral
Arg. Tr. at 8, 16, 22-23, 29.) In support, the Assessor states that the addition of Indiana
Code §§ 6-1.1-4-432 and -443 shows that the Legislature intended the Court to interpret
the market value-in-use standard differently. (See Pet’r Br. at 1-2, 7; Pet’r Reply at 1-2.)
In a recent case regarding another CVS store in a different location, but involving
the same litigants, attorneys, and issues, the Court rejected this same argument. See
Monroe Cnty. Assessor v. SCP 2007-C-26-002, LLC, 62 N.E.3d 478, 481 n.1 (Ind. Tax
Ct. 2016) (upholding the Court’s interpretation of the market value-in-use standard and
finding that Indiana Code §§ 6-1.1-4-43 and -44 did not change that standard), review
denied. Thus, the Court incorporates its analysis and conclusions in that case here and
will not address the argument anew.
2
Indiana Code § 6-1.1-4-43 applied only to assessments made during the 2014 and 2015
assessment years. See IND. CODE § 6-1.1-4-43(a)(1) (2014) (repealed 2016). Accordingly, it
does not apply to the years at issue here.
3Indiana Code § 6-1.1-4-44 was enacted in 2014 and expressly applied to all assessment appeals
pending before the PTABOA or the Indiana Board at that time, including this matter. See IND.
CODE § 6-1.1-4-44(a)(2) (2014) (repealed 2016). This statute limited the comparable properties
that could be used to determine the market value-in-use of commercial, non-income producing
real properties and sale leaseback properties by prohibiting appraisers from using property that
had been vacant for a year or more. See I.C. § 6-1.1-4-44(a), (d)(1). The Coers Report’s sales-
comparison approach used vacant properties that were prohibited by Indiana Code § 6-1.1-4-
44(d)(1), and thus the Indiana Board gave it no weight. (Cert. Admin. R. at 171-72 ¶¶ 96-98.)
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II. Unsupported by Substantial or Reliable Evidence
The Assessor further asserts that the Indiana Board’s final determination is not
supported by substantial or reliable evidence because in its income approach the Coers
Report relied too heavily on properties that were not located in Monroe County, and its
explanations were inadequate, inconsistent, and conclusory. (Pet’r Br. at 13-17.) The
Assessor further argues that the Indiana Board should not have relied on the Coers
Report’s income approach at all because its values were so close to those determined
under its sales-comparison approach, which the Indiana Board had rejected for including
properties inconsistent with Indiana Code § 6-1.1-4-44(d)(1). (Pet’r Br. at 15-17.)
A final determination is supported by substantial evidence if the record contains
more than a scintilla of evidence in support of the decision and a reasonable person
viewing the entire record could find enough relevant evidence to support the Indiana
Board’s determination. DeKalb Cnty. Assessor v. Chavez, 48 N.E.3d 928, 931-32 (Ind.
Tax Ct. 2016). The evidence shows that the Coers Report adjusted the comparable
properties used in its income approach to reflect their differences from the subject
property and that it provided thorough explanations of the methodologies it employed.
(Cert. Admin. R. at 172-73 ¶¶ 100-102; see also, e.g., Cert. Admin. R. at 327-48
(explaining the income approach methodologies).) The Assessor asks the Court,
however, to find that this supporting evidence is not persuasive, which is tantamount to
asking the Court to reweigh the evidence. This Court will not reweigh the evidence absent
an abuse of discretion by the Indiana Board. Hubler Realty Co. v. Hendricks Cnty.
Assessor, 938 N.E.2d 311, 315 (Ind. Tax Ct. 2010). “An abuse of discretion may occur if
the Indiana Board’s decision is clearly against the logic and effect of the facts and
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circumstances before it, or if the Indiana Board misinterprets the law.” Id. at 315 n.5
(internal citations omitted). Here, the Assessor has not identified evidence that
demonstrates that the Indiana Board’s final determination is against the logic and effect
of the facts and circumstances in this matter. Consequently, the Court finds that there is
substantial and reliable evidence that supports the Indiana Board’s decision and that it
did not abuse its discretion.
CONCLUSION
For the above stated reasons, the Indiana Board’s final determination in this matter
is AFFIRMED.
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Monroe County Assessor v. SCP 2002 E19 LLC 6697, a/k/a CVS 6697-02
Combined Opinion