Appraisals were “hearsay” and could not, standing alone, support reduction in home’s assessed value. In Thiry v. Dearborn County Assessor, Pet. No. 15-020-10-1-5-0001 (May 17, 2012) [Small Claims Docket], the Indiana Board considered the assessor’s objection to the admission of the homeowners’ two appraisals as “hearsay.” Indiana Rule of Evidence 801(c) defines “hearsay” as a “statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Hearsay can be either oral or written statements. (Page 3, ¶ 14.) By rule, hearsay evidence “may be admitted.” Id. (quoting 52 IAC 3-1-5(b) (emphasis added)). It “may form the basis for a determination,” but “if the evidence is properly objected to and does not fall within a recognized exception to the hearsay rule, the resulting [assessment appeal] determination may not be based solely upon the hearsay evidence.” Id. The Board observed that the word “may” is “discretionary, not mandatory” and that the Board “can permit hearsay evidence to be entered in the record, but it is not required to allow it.” (Page 4, ¶ 14.)
The appraisals were hearsay, the Board concluded. (Page 4, ¶ 16.) The Board admitted them into evidence “subject to the limitations in the Board’s procedural rules.” Id. The valuation date for the first appraisal was April 19, 2010 – less than two months after the March 1st assessment date. The appraisal concluded to a value of $353,000, which was lower than the $388,500 assessed value but higher than the $324,000 requested by the owner. While the appraisal “might support” a reduction in value, there was “no non-hearsay evidence in this record that supports a valuation of $353,000.” (Page 5, ¶ 20(c).) The appraisal thus stood alone and could not support a reduction of the home’s assessed value. See id.
The Board did not consider the second appraisal, which valued the property at $357,410 as of February 24, 2012 – almost two years after the assessment date at issue.
The Board further observed that the home’s 2007 purchase price of $376,000 was not helpful, because “[n]othing in the record establishes how that price relates to value as of [the valuation date,] March 1, 2010.” (Page 5, ¶ 20(d).) For a sale to be a reliable indicator of market value, the buyer and seller must be typically motivated, well informed and acting in their own best interests. (Page 5, ¶ 20(d) n.1) (citing the Indiana Assessment Manual, at 10.) The record failed to show that the owners’ purchase price was a “reliable indication of the market value in this case.” Id.
And one owner’s conclusory testimony that the home should be valued at $324,000 was not probative evidence supporting a reduction in value. (Page 5, ¶ 20(e).)
Because the owners produced no substantial evidence, the assessor’s duty to support the contested assessment with his own substantial evidence was not triggered. (Page 5, ¶ 21.)
Board’s final determination reverses ALJ’s decisions to admit evidence not provided to Assessor five days before hearing in small claims case; Appraisal was hearsay and could not be sole basis for property’s reduced value. Kropp v. Porter County Assessor, Pet. 64-013-11-1-5-00010 (Jan. 18, 2013) (March 1, 2011 assessment) [Small Claims Docket]. Assessor did not request the Taxpayers’ evidence in advance of the hearing, but Taxpayers had requested the Assessors. Assessor objected to two exhibits that had not been produced before the hearing. The ALJ admitted the exhibits. The Board reversed, citing 52 IAC 3-1-5(d), which states, “If requested…by any party, the parties shall provide to all other parties copies of any documentary evidence….” (Page 4, ¶ 13(c) n.1) (emphasis in original). The Board noted, however, that the failure to admit the exhibits had no bearing on its ultimate determination. Id.
The Board also found that Taxpayers’ appraisal of the property was hearsay and was the “foundation of the [Taxpayers'] entire case.” (Page 6, ¶ 15(d).) Because they failed to present any “non-hearsay” evidence of the property’s value, Taxpayers failed to make a prima facie case that the property’s assessment should be reduced. Id.
Assessor’s view of relevance was “much too narrow”; hearsay evidence admitted but could not support a reduction standing alone. Taylor v. Dearborn County Assessor, Pet. No. 15-013-11-1-5-00181 (Jan. 29, 2013) (March 1, 2011 assessment) [Small Claims Docket]. In this appeal of a condominium’s assessment, Assessor objected on relevancy grounds to the owner’s evidence of (1) a construction and purchase agreement for another condo in the subdivision, (2) an appraisal for the subject property dated Jan. 9, 2012 (after the assessment date), and (3) the appraiser’s qualification as a Certified Residential Appraiser. The first two items could have “some relevance” to the owner’s claim for a lower assessment “depending on the balance of the evidence and arguments.” (Page 4, ¶¶ 12, 13.) The appraiser’s qualifications are “clearly relevant to his qualifications and directly related to the credibility of his appraisal of the subject property.” (Page 4, ¶ 14.) The Board denied the objections, observing: “Any purported relevance problems with these exhibits go more to weight than to admissibility.” (Page 4, ¶ 15.) The Assessor’s “view of relevance to this case is much too narrow.” (Page 4, ¶ 11.)
The Assessor also objected that this evidence was hearsay. The Indiana Board agreed. (Page 5, ¶ 19.) The “biggest problem” with hearsay evidence is the absence of any meaningful opportunity to cross-examine the author of the statement. (Page 5, ¶ 18.) The Board explained:
The lack of opportunity to ask . . . anybody . . . about their Construction and Purchase Agreement has a serious negative impact on the credibility and probative value of that document [in] determining an accurate valuation for the subject property. Similarly, the lack of opportunity to ask [the appraiser] questions about his qualifications and his appraisal also has a serious negative impact on the credibility and weight of his opinion [of value].
Id. The evidence was admitted, but the Board noted that its determination “may not be based solely on hearsay evidence.” (Page 5, ¶ 19.)
Board excludes Assessor’s comparable sales report intended as a “rebuttal exhibit” and not produced in advance of hearing. Shult Properties, LLC v. St. Joseph County Assessor, Pet. No. 71-018-07-1-5-01992 (Dec. 10, 2012) (March 1, 2007 assessment). Assessor admitted that she did not provide a copy of her comparable sales report in advance of the hearing, although the Board’s rules require a pre-hearing exchange. See 52 IAC 2-7-1. The Assessor asserted that the report was a “rebuttal exhibit,” so she did not have to produce it before the hearing. The Board disagreed, observing that the Assessor’s report was “prepared to support the property’s assessed value” and was her “sole valuation evidence.” (Page 4, ¶ 11.) Thus, it was intended to support the Assessor’s case in chief and should have been exchanged five business days before the hearing. Because the property owner was prejudiced by Assessor’s failure to exchange the document, the Board refused to admit the report into evidence. Id.
Property record cards with handwritten notes and exhibits not presented at PTABOA hearing allowed. Wolfe v. Miami County Assessor, Pet. No. 52-017-09-1-5-00028 (Dec. 28, 2012) (March 1, 2009 assessment). Reasoning that the Homeowner’s concerns went to the weight of the evidence and not its admissibility, the Board overruled the objection that the Assessor’s property record cards (which included handwritten notes from a website) were “unreliable and irrelevant in establishing the value of a property.” (Page 7, ¶ 13 n.4.)
Homeowner also objected to two exhibits because the information was not presented at the PTABOA hearing. Indiana Code § 6-1.1-15-4(m) allows a party to introduce evidence that is “otherwise proper and admissible” regardless of whether it was previously introduced at a PTABOA hearing. The objection was therefore overruled. (Page 7, ¶ 13 n.5.)
Evidence of the assessment of neighboring property allowed over relevancy objection. Ralser v. St. Joseph County Assessor, Pet. No. 71-003-08-1-5-00385 (Dec. 31, 2012) (March 1, 2008 assessment) [Small Claims Docket]. Assessor’s counsel objected on relevancy grounds to homeowner’s question regarding the assessment of a neighboring property. The Board overruled the objection, noting that effective July 1, 2012, Ind. Code § 6-1.1-15-18 “states that to determine market value-in-use, a taxpayer or assessing official may present assessments of comparable properties.”
Board admits email by Owner over Assessor’s “tardy” hearsay objection. Fiene v. Brown County Assessor, Pet. Nos. 07-003-06-1-5-00001 et al. (Jan. 14, 2013) (March 1, 2006 – 2010 assessment dates) [Small Claims docket]. Property was a single family residence and a barn on a parcel of 96.14 acres in Freetown. Owner, through his tax representative, argued that the land should be assessed at the agriculture rate for each year and an 80% negative influence factor should be applied because the land is heavily wooded. The tax representative introduced an email from Owner explaining facts about the property and its use. When introduced, the Assessor initially had no objection to Owner’s exhibits, including the email. The exhibits were admitted. But the Assessor objected to the exhibit and the taxpayer representative’s paraphrasing of it approximately ten minutes later. The email was “clearly hearsay” and the Owner did not show it came within a recognized exception to the hearsay rule. (Pages 6-7, ¶ 14.) Despite the objection, the hearsay evidence may be admitted. (Page 7, ¶ 14.) The Board allowed the email over the Assessor’s “tardy” objection. (Page 7, ¶ 15.) In so doing, the Board noted that Owner’s “comments were not under oath and he was not subject to cross examination.” Id.
The Assessor’s late objection did “complicate” the Board’s analysis. (Page 9, ¶ 19(h).) No substantial evidence in the record contradicted the email (and if there had been, the email “almost certainly would have had less weight”). Id. The Assessor made no effort to disprove any of the statements in the email. The facts about the property presented by both sides were “entirely consistent.” The Board concluded: “Even though it is hearsay, under these circumstances the Board will not entirely disregard the statements in the email.” Id. (emphasis in original).
Appraisal of different property went to weight of testimony. Schilling Brothers Lumber and Supply Company v. Lake County Assessor, Pet. Nos. 45-035-06-1-3-00001 to -00010 (Jan. 24, 2013) (March 1, 2006 assessment). The owner of a commercial lumber company offered an appraisal of a different property to show that the subject property was over-assessed. The Assessor’s objection to this appraisal was overruled, because it “goes to the weight of the evidence rather than its admissibility.” (Page 3, ¶ 5 n.3.)
Case “stretches to the limits how far” Indiana Board will go to interpret an objection. Orear v. Dearborn County Assessor, Petition Nos. 15-020-11-1-5-00584 and -585 (Feb. 7, 2013) (March 1, 2011 assessment) [Small Claims Docket]. The Assessor objected to Homeowners’ appraisal, but he did not identify the objection as based on “hearsay.” Rather, he lamented, “Whoever conducted the appraisal is not here to testify to the truth of it” and objected to it “based on foundation.” (Page 3, ¶ 12.) The Board noted the word “hearsay” was not used, but found that “it seems to be the main reason” for the objection. The Board agreed the appraisal was hearsay. (Page 4, ¶ 19.) It admitted the appraisal subject to the limits of the Board’s procedural rules, i.e. the final determination can’t be based entirely on the appraisal. (Page 4, ¶ 19.) The Board was not happy with the lack of specificity in the objection. It warned that the case “stretches the limits of how far the Board will go in interpreting the basis for an objection” and cautioned that the Assessor (who was represented by counsel) “should have been more specific . . . and timely in making the objection.” (Page 4, ¶ 15 n.1.)
Both parties fail to timely exchange exhibits; because neither party was prejudiced by the error, the exhibits were admitted. Goshen Hospital Association v. LaGrange County Assessor, Pet. No. 44-014-10-2-8-00001 (Feb. 7, 2013) (March 1, 2010 assessment). In the property tax exemption appeal, both parties objected to exhibits that were not provided at least five business days before the hearing, as required by the Board’s rules. See 52 IAC 2-7-1. While summaries of witnesses’ testimony are no longer required by the rules, copies of documentary evidence must still be provided.
The Association’s exhibits could have been excluded. But the Assessor had three business days and six total days (due to a weekend and holiday) to view the material, and the Association attempted to comply with the rule by submitting the evidence by email and regular mail. The Board further noted, “This situated can be distinguished from cases in which a party waits until the day of the hearing to provide evidence to the opposing party.” (Page 4, ¶ 12.) Here, the Assessor had “ample time” to review the exhibits, which were not extensive. Id.
The Assessor, in turn, committed a “far more serious violation” by not providing her exhibits before the hearing. (Page 4, ¶ 13.) She made “no effort whatsoever” to comply with the rules. (Pages 4-5, ¶ 13.) However, there was no testimony at the hearing about the exhibits, so the Association suffered no actual harm or prejudice. Id. Both parties’ exhibits were allowed. (Page 5, ¶ 14.)
“Incomplete” appraisal admitted into evidence; Board may take judicial notice of its own decisions. Lake County Trust #5812 v. Lake County Assessor, Pet. Nos. 45-023-08-1-4-00001 and Pet. Nos. 45-023-09-1-4-00001 (Feb. 12, 2013) (March 1, 2008 and 2009 assessments) [Small Claims Docket]. In this appeal of an apartment building’s assessed value, the Assessor objected to the Trust’s appraisal because a complete copy of the report had not been exchanged before the hearing. The Trust had emailed a copy to the Assessor’s hearing officer, but her copy was missing approximately 1 ½ inches of material from the top and bottom of the report. The Trust attempted to email a complete copy, but the hearing officer claimed she never received it. Addresses of comparable properties in the sales approach were missing, as was some of the appraiser’s analysis from the income approach. The Assessor made no effort to bring the issue to the Board’s attention before the hearing, and the hearing officer did not ask for a continuance to review the complete appraisal. Moreover, she presented no impeachment evidence relating to the income approach to value and did not prepare her own income approach analysis. Consequently, the Board overruled the objection to the appraisal. (Page 7, ¶ 16.)
The hearing officer also sought to exclude the Trust’s copy of an Indiana Board final determination. The Board overruled this objection as well, noting that it “may take notice of its own decisions.” (Page 7, ¶ 16) (citing Ind. Evidence Rule 201(b)).