ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
JOSEPH D. GEESLIN, JR. STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
LINDA I. VILLEGAS
DEPUTY ATTORNEY GENERAL
IN THE INDIANA TAX COURT _____________________________________________________________________
PHOENIX MUTUAL, ) ) Petitioner, ) ) v. ) Cause No. 49T10-9806-TA-67 ) DEPARTMENT OF LOCAL ) GOVERNMENT FINANCE See footnote, )
Whether the State Board erred in assigning a grade of B+2 to the
2. Grade factor of improvements should be B grade not B+2.
(Stip. Ex. 2.) The State Board held a hearing on December 9,
1997. In its final determination of May 6, 1998, the State Board
made no change to the Petitioners assessment.
The Petitioner filed an original tax appeal with this Court on June 19, 1998. See footnote The Court conducted trial on November 4, 1999. The Court heard oral argument on November 6, 2000. Additional facts will be supplied as necessary.
(Stip. Ex. 2 at 5)(emphasis added). While not phrased as succinctly as
it could have been, the issue nonetheless evidences Petitioners belief that a portion
of its land should be classified as something other than primary or secondary.
Thus, the issue was raised in the Petitioners 131 petition. Furthermore,
the record indicates that after the State Board hearing, the State Boards hearing
officer requested that Petitioner provide [a] site plan showing land classification breakdown and
how it [should be] calculated or determined. (Stip. Ex. 14.) As
a result, the Petitioner submitted a detailed calculation of what it believed the
proper land classifications to be, as well as how it derived those calculations.
(Stip. Ex. 20 at 3.)
Having reviewed the record, the Court determines that it was in error for the State Board to refuse to consider the Petitioners land classification issue on the grounds that it was never raised prior to trial. Accordingly, the issue is REMANDED to the Indiana Board See footnote for consideration.
(Petr Proposed Findings of Fact and Conclusions of Law at 2-3 (internal citations
omitted).) The Court finds, however, that the Petitioner did not make a
prima facie case that the assigned grade of B+2 was improper.
Under Indianas true tax value system, improvements are assigned various grades based on their materials, design, and workmanship; the grades represent multipliers that are applied to the base reproduction cost of an improvement. Ind. Admin. Code tit. 50, r. 2.2-10-3; Whitley Prods., Inc. v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1116 (Ind. Tax Ct. 1998), review denied. The selection of which grade should be applied to an improvement calls for a subjective judgment and is committed to the discretion of the assessor. Mahan v. State Bd. of Tax Commrs, 622 N.E.2d 1058, 1064 (Ind. Tax Ct. 1993). Thus, in determining grade, the assessor is to distinguish all significant variations in [an improvements] quality and design. Ind. Admin. Code tit. 50, r. 2.2-10-3(a). The State Boards regulations define the different characteristics that help assessors differentiate between grades. For instance, B grade buildings are architecturally attractive and constructed with good quality materials and workmanship. These buildings have a high quality interior finish with abundant built-in features, very good lighting and plumbing fixtures, and a custom heating and air conditioning system. Ind. Admin. Code tit. 50, r. 2.2-10-3(a)(2). On the other hand, A grade buildings have an outstanding architectural style and design and are constructed with the finest quality materials and workmanship. These buildings have a superior quality interior finish with extensive built-in features, high grade lighting and plumbing fixtures, and a deluxe heating system and air conditioning system. Ind. Admin. Code tit. 50, r. 2.2-10-3(a)(1). See footnote
When contesting a grade assigned to an improvement, a taxpayer must offer probative evidence concerning the alleged assessment error. Whitley Prods., 704 N.E.2d at 1119. A taxpayers conclusory statements concerning the grading of a subject improvement, however, do not constitute probative evidence. Id. Likewise, mere references to photographs or State Board regulations, without explanation, do not qualify as probative evidence for purposes of grading issues. Heart City Chrysler v. State Board of Tax Commrs, 714 N.E.2d 329, 333 (Ind. Tax Ct. 1999). In the event that a taxpayer fails to provide the State Board with probative evidence supporting its position on a grade issue, the State Boards duty to support its final determination with substantial evidence is not triggered. Whitley Prods., 704 N.E.2d at 1119.
In examining the evidence presented to the State Board at the Petitioners administrative hearing, the Court determines that the Petitioner has not met its burden of proof. For instance, at the administrative hearing, the Petitioner submitted a State Board final determination on the same property indicating that, for the 1991 assessment, the improvement had been assigned a grade of B+1. (Stip. Ex. 6.) No explanation was given as to how this determination relates to the 1995 assessment. (See Stip. Ex. 22.) Consequently, this evidence does not establish a prima facie case that the improvement should be assigned a grade of B for the 1995 assessment. See footnote
In addition, the Petitioner submitted a copy of 50 I.A.C. 2.2-10-3 (the State Board regulation defining grades and their application). No supporting explanation, however, was provided. See footnote As stated earlier, mere references to State Board regulations, without explanation, do not qualify as probative evidence for purposes of grading issues. Heart City Chrysler v. State Board of Tax Commrs, 714 N.E.2d 329, 333 (Ind. Tax Ct. 1999).
Finally, Mr. George Spenos, the tax consultant who represented the Petitioner at the administrative hearing, was called to testify at trial. However, his testimony was nothing more than broad, conclusory statements that the improvements grade should be a B:
Q: What in your opinion should be the grade for [this] building?
A: Well, my opinion it should be a B grade.
Q: And how did you determine that?
A: By visual inspection of the property, and looking at the grade
factor classifications in the manual itself.
A: Outside the atrium area, its all C grade.
A: The exterior of the building . . . [i]n my
opinion would be a B grade.
(Trial Tr. at 74-75.) Later:
Q: Mr. Spenos, youve rendered quite a few opinions here today, havent you?
A: I wouldnt call them opinions, no.
Q: You dont recall him asking in your opinion that the 
building should be a B grade?
(Trial Tr. at 79.)
Testimonial statements that something should be a B grade or that something should be a C grade are nothing more than conclusions. Conclusory statements do not qualify as probative evidence. Whitley Prods., 704 N.E.2d at 1119. Because the Petitioner has failed to provide the State Board with probative evidence to support its position on grade, the State Boards duty to support its final determination with substantial evidence is not triggered. See id. As a result, the State Boards determination of a B+2 grade is AFFIRMED.
Plus or minus two (+/- 2) indicates that the grade falls halfway between
the assigned grade classification and the grade immediately above or below it.
For example, a grade of C+2 indicates that the quality and design grade
classification is estimated to fall halfway between C and B or average to
good construction. . . .
Plus or minus one (+/- 1) indicates that the grade falls slightly above
or below the assigned grade classification, or at a point approximately twenty-five percent
(25%) of the interval between the assigned grade classification and the grade immediately
above or below it. For example, a grade of C+1 indicates that
the quality and design grade classification is estimated to be slightly better than
average or approximately halfway between a C grade and a C+2 grade.