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-69 ) DEPARTMENT OF LOCAL ) GOVERNMENT FINANCE See footnote, )
Whether the State Board erred in assigning a grade of B+1 to the
2. Grade factor should be B-2 not B+1.
(Stip. Ex. 1 at 5.) The State Board held a hearing on
December 9, 1997. In its final determination of May 6, 1998, the
State Board declined to adjust 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). This Court held that the issue
sufficiently evidenced Petitioners belief that a portion of its land should be classified
as something other than primary or secondary. Phoenix Mutual v. Dept of
Local Govt Fin., Cause No. 49T10-9806-TA-67, slip op. at 5 (Ind. Tax Ct.
July 19, 2002). Thus, the issue was deemed raised in the Petitioners
Form 131, and it was erroneous for the State Board to not consider
the issue. Id.
Here, however, there is no evidence that the Petitioner sought to have its land classification reevaluated. The Petitioner merely stated:
Primary base rate should be $200,000 not $250,000 with secondary
land valued at $140,000 per acre not $175,000 per acre.
(Stip. Ex. 1 at 5.) There is no mention of residual land
or implication that the land should be reclassified. Furthermore, as the administrative
record indicates, the issue of land classification was never discussed at the hearing,
nor did the State Board hearing officer request [a] site plan showing land
classification breakdown and how it [should be] calculated or determined as it did
in the companion case. (Cf. Stip. Ex. 13 and Stip. Ex. 14.)
Consequently, the Court determines that the issue of land classification was not
raised prior to trial, and therefore the State Board acted properly when it
did not reevaluate the lands classification. As a result, the Court AFFIRMS
the State Boards final determination on this issue.
A grade of B[+1] means that the building grade falls [somewhere] between a
B grade and an A grade or [has some] A grade characteristics as
[well as] B grade characteristics. . . . The [State Board] hearing
officer made no findings that there were any A grade characteristics in the
(See Petr Proposed Findings of Fact and Conclusions of Law at 3 (internal
citations omitted).) Again, the Court finds that the Petitioner did not make
a prima facie case that the assigned grade was improper. See Phoenix
Mutual v. Dept of Local Govt Fin., Cause No. 49T10-9806-TA-67, slip op. at
6 (Ind. Tax Ct. July 19, 2002).
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 all distinguish 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 initial burden of proof. For instance, at the administrative hearing, the Petitioner submitted no evidence whatsoever on comparable properties and their assigned grades for 1995. Instead, the Petitioner submitted a State Board final determination on the same property indicating that, for the 1990 assessment, the improvement had been assigned a grade of B. (Stip. Ex. 5.) All this establishes is Petitioners conclusion that because the improvement was graded a B in 1990, it should now be graded a B-2. No explanation was given as to how this determination relates to the 1995 assessment. (See Stip. Ex. 21.) Consequently, this evidence does not establish a prima facie case that the improvement should be assigned a grade of B-2 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 (who presented Petitioners grade argument 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-2. For instance:
Q: Did you determine what value the  building should be?
Q: And what is that[?]
A: I would consider that building a B minus 2.
Q: And how did you determine it was B minus 2?
A: By the construction quality and design of the building itself.
A: Not a one.
Q: Are there C grade features in the  building?
Q: Are there more C than B in your opinion . .
A: I would say its equal.
(Trial Tr. at 77-78.) Later:
Q: Mr. Spenos, youve rendered quite a few opinions here today, havent you?
A: I wouldnt call them opinions, no.
A: Yeah, okay. I understand.
(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 therefore not triggered. See id. The State Boards determination of a B+1 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.