ATTORNEY FOR PETITIONERS: ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
LINDA I. VILLEGAS
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
THOMAS AND PATRICIA E. GENUNG, )
v. ) Cause No. 49T10-9712-TA-199
DEPARTMENT OF LOCAL )
ORDER ON PETITIONERS MOTION FOR SUMMARY JUDGMENT
NOT FOR PUBLICATION
August 23, 2002
Thomas and Patricia E. Genung (the Genungs) appeal the State Board of Tax
Commissioners (State Board) final determination that assessed their property as of March 1,
1995. The matter is currently before the Court on Genungs motion for
summary judgment, in which they present the following issues for this Courts review:
Whether the State Board erred in assigning a grade of A+2 to the
Genungs house; and
Whether the State Boards failure to instruct the hearing officer of his duties,
in writing, constituted an error as a matter of law.
See footnote FACTS AND PROCEDURAL HISTORY
The Genungs house in Marion County was assessed at $174,940 as of March
1, 1995. The Pike Township Assessor assigned the house a grade of
After challenging the assessment at the local level, the Genungs filed a Form
131 Petition for Review of Assessment with the State Board on December 13,
1996. In its petition, the Genungs raised two issues:
The valuation method used to determine the assessed value of the subject property
is not uniform or at an equal rate and is not based upon
a just valuation. The Indiana Tax Court has ruled that the methodology
used by the State Tax Board is in violation of Article X, Section
I of the Indiana Constitution. We, therefore, request an assessment be made
in compliance with the Indiana Constitution.
Obsolescence factor needs to be applied to correct assessment inequities when compared to
(Petrs Complaint, at Ex. A.)
ANALYSIS AND OPINION
On April 28, 1997, the State Board held a hearing. On October
17, 1997, the State Board issued its final determination, upholding the Pike Township
Assessors assignment of a grade factor of A+2. The State Board also
determined that the Genungs did not present sufficient evidence to establish their entitlement
to an obsolescence adjustment.
On December 2, 1997, the Genungs initiated an original tax appeal. On
September 15, 1998, the Genungs filed a motion for summary judgment. The
Court heard oral arguments on the Genungs motion on December 3, 1998.
Additional facts will be supplied as needed.
Standard of Review
The Court gives great deference to the State Boards final determination when it
acted within the scope of its authority. Wetzel Enters., Inc. v. State
Bd. of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998).
Accordingly, this Court reverses final determinations of the State Board only when they
are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse of
discretion, or exceed statutory authority. Id.
The taxpayer bears the burden of demonstrating the invalidity of the State Boards
final determination and must do so by establishing a prima facie case that
the assessment is incorrect. Miller Structures, Inc. v. State Bd. of Tax
Commrs, 748 N.E.2d 943, 952 (Ind. Tax Ct. 2001) (stating that a taxpayer
must offer probative evidence concerning the alleged assessment error [in order to establish
a prima facie case]); Clark v. State Bd. of Tax Commrs, 694
N.E.2d 1230,1233 (Ind. Tax Ct. 1998). Once the taxpayer has established a prima
facie case, the burden shifts to the State Board to support its final
determination with substantial evidence. Miller Structures, 748 N.E.2d at 952. If,
however, the taxpayer fails to provide the State Board with probative evidence supporting
his position on the alleged assessment error, the State Boards duty to support
its final determination with substantial evidence is not triggered. Kemp v. State
Bd. of Tax Commrs, 726 N.E.2d 395, 400 (Ind. Tax Ct. 2000).
A taxpayers conclusory assertions that the State Boards assessment is erroneous do not
constitute probative evidence. Id.
Summary judgment is appropriate only where no genuine issues of material fact exist
and the moving party is entitled to judgment as a matter of law.
Ind. Trial Rule 56(C); Bulkmatic Transp. Co. v. Ind. Dept of State
Revenue, 691 N.E.2d 1371,1373 (Ind. Tax Ct. 1998). Nevertheless, [w]hen any party
has moved for summary judgment, the court may grant summary judgment for any
other party upon the issues raised by the motion although no motion for
summary judgment is filed by such party. Ind. Trial Rule 56(B).
The first issue is whether the State Board erred in assigning an A+2
to the Genungs house. The Genungs argue that the State Board
regulations governing grade lack ascertainable standards that would provide a basis for any
grade higher than an A, and to support their argument rely on this
Courts ruling in Garcia v. State Bd. of Tax Commrs, 694 N.E.2d 794,
798 (Ind. Tax Ct. 1998), revd by 766 N.E.2d 341 (Ind. 2002).
In Garcia, this Court held that because there was no ability to differentiate
between an A+10 or an A grade dwelling under the State Boards regulations,
it was compelled to find that the Sate Boards assessment . . .
[wa]s arbitrary and capricious. Garcia v. State Bd. of Tax Commrs,
694 N.E.2d 794, 798 (Ind. Tax Ct. 1998), revd by 766 N.E.2d 341
The Genungs argument, however, is without merit. Indeed, Indianas Supreme Court, in
reviewing this Courts opinion in Garcia, has held that the State Boards regulations
with respect to grades above an A are not arbitrary and capricious.
State Bd. of Tax Commrs v. Garcia, 766 N.E.2d 341, 349 (Ind. 2002).
Accordingly, the Genungs argument cannot succeed.
II. Written Instructions
The Genungs also assert that the State Boards failure to instruct the hearing
officer of his duties, in writing, constituted an error as a matter of
law. The Genungs contend that during discovery, they requested that the State
Board explain and produce any and all statutes, regulation sections, and formal and
informal rules controlling the conduct of the administrative hearings before the State Board.
(Petrs Mem. In Support of its Motion for Summary Judgment, at 6.)
The Genungs contend that the State Board did not produce anything.
If there were any irregularities in the hearing officers instructions, or in carrying
out his duties, they should have been challenged during the State Board hearing.
See Hoogenboom-Nofziger v. State Bd. of Tax Commrs, 715 N.E.2d 1018,
1022 (Ind. Tax Ct. 1999). Nevertheless, there is nothing in the record
to indicate that the Genungs challenged those irregularities at the administrative hearing.
The Genungs remained silent during the hearing and, by their silence, consented to
the hearing despite any possible irregularities. See id.
The Tax Court is bound by the evidence and issues raised at the
administrative level. State Bd. of Tax Commrs v. Gatling Gun Club, Inc.,
420 N.E.2d 1324, 1328 (Ind. Ct. App. 1981). When the Genungs failed
to raise an issue at the administrative level, the issue is waived and
may not be considered by the court. See id.
For the foregoing reasons, the Court DENIES the Genungs motion for summary judgment.
The Court now DIRECTS the parties to file status reports regarding trial
readiness on or before September 16, 2002.
So ORDERED this 23rd day of August, 2002.
Honorable Thomas G. Fisher
Judge, Indiana Tax Court
David L. Pippen
Attorney at Law
7164 Graham Road
Indianapolis, IN 46250
Attorney General of Indiana
By: Linda I. Villegas
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
The State Board of Tax Commissioners (State Board) was originally the Respondent
in this appeal. However, the legislature abolished the State Board as of
December 31, 2001. P.L. 198-2001, § 119(b)(2). Effective January 1, 2002,
the legislature created the Department of Local Government Finance (DLGF),
see Indiana Code
§ 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 66, and the Indiana
Board of Tax Review (Indiana Board). Ind. Code § 6-1.5-1-3 (West Supp.
2001)(eff. 1-1-02); P.L. 198-2001, § 95. Pursuant to Indiana Code § 6-1.5-5-8,
the DLGF is substituted for the State Board in appeals from final determinations
of the State Board that were issued before January 1, 2002. Ind.
Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 95. Nevertheless,
the law in effect prior to January 1, 2002 applies to these appeals.
Id. See also P.L. 198-2001, § 117. Although the DLGF
has been substituted as the Respondent, this Court will still reference the State
Board throughout this opinion.
The Genungs also argue that the State Board regulations in
effect at the time of its assessment were arbitrary because they lacked ascertainable
standards. The Genungs also assert that the State Board regulations do not
provide for a uniform or equal assessment as required by the Indiana Constitution.
See Petrs Mem. In Support of Summary Judgment at 7-9). Instead,
the Genungs contend that the only way to measure uniformity and equality in
assessment is through market value and, as a result, they submitted a portion
of the Report of the Indiana Fair Market Value Study at the administrative
hearing to show how inequitably their property
was assessed. (See Petrs Mem.
In Support of Summary Judgment, at Ex. 5).
In 1998, Indianas Supreme Court declared the State
Boards regulations governing the 1995 state-wide general reassessment unconstitutional. See State Bd.
of Tax Commrs v. Town of St. John, 702 N.E.2d 1034, 1043 (Ind.
1998) (stating the existing cost schedules . . . violate the Property Taxation
Clause of the Indiana Constitution). Nevertheless, the fact that the subject property
was assessed under unconstitutional regulations does not mean that the assessment will be
invalidated on that basis. Whitley Prods., Inc. v. State Bd. of Tax
Commrs, 704 N.E.2d 1113, 1121 (Ind. Tax Ct. 1998) (citations omitted), review denied.
Real property must still be assessed, and, until the new regulations are
in place, must be assessed under the present system. Id. See
also Town of St. John v. State Bd. of Tax Commrs, 729 N.E.2d
242, 246 & 250-51 (Ind. Tax Ct. 2000) (ordering that all real property
in Indiana shall be reassessed under new, constitutional regulations as of March 1,
2002 and providing that until then, real property tax assessments shall be made
in accordance with the current system). With respect to the Indiana Fair
Market Value Study, Public Law 63-1993 § 3(f) prohibits its use in the
review of an assessment.
The grade system is a key aspect of Indianas true
tax value system.
White Swan Realty v. State Bd. of Tax Commrs,
712 N.E.2d 555, 559 (Ind. Tax Ct. 1999). In general, every homes
materials, design, and workmanship are collectively assigned a grade from A (high) to
E (low), which represents a numeric multiplier that raises or lowers an improvements
assessed value. See Miller Structures, Inc. v. State Bd. of Tax Commrs,
748 N.E. 2d 943, 952 (Ind. Tax Ct. 2001). Grades above an
A are indicated by an A+1 through A+10. Ind. Admin. Code tit. 50,
r. 2.1-4-3(f) (1992).