ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
PHILLIP D. NORMAN STEVE CARTER
COSTAS & NORMAN ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
PETER ZAKUTANSKY and
MARY JANE ZAKUTANSKY, )
v. ) Cause No. 45T10-9812-TA-186
STATE BOARD OF TAX COMMISSIONERS, )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
August 28, 2001
Peter and Mary Jane Zakutansky appeal the final determination of the State Board
of Tax Commissioners (State Board) assessing their residential land as of the March
1, 1989 assessment date. The Zakutanskys present the following issues, which the Court
Whether the State Boards assessment of the Zakutanskys property at $350 per front
foot was correct; and
Whether the State Board applied the correct depth factor to the Zakutanskys real
property by using the 150 feet depth table. FACTS AND PROCEDURAL HISTORY
The Zakutanskys own residential land and improvements in Porter County, Indiana. The
subject property is located at 14 Cedar Trial, Portage, Indiana. This places
the property in Ogden Dunes, a residential area located on the shores of
In accordance with Indiana Code § 6-1.1-4-13.6 (1989), the Porter County Land Valuation
Commission and the State Board promulgated a Land Order for use in the
1989 general reassessment and subsequent years. Under that order, the land values
in Ogden Dunes varied from $100 to $900 per front foot. Consistent
with the Land Order, the Zakutanskys land was assessed at $350 per front
foot for 1989.
On July 25, 1990, the Zakutanskys filed a Petition for Review of Assessment
(Form 131) with the State Board claiming, in part, that the land values
were not uniform and equal when compared to other assessments in Ogden Dunes
and that an incorrect depth factor was applied. After a hearing, the
State Board denied the Zakutanskys appeal. The Zakutanskys subsequently appealed to this
Court, and on February 13, 1998, this Court ordered the petition remanded to
the State Board. This Court held that the State Board acted in
an arbitrary and capricious manner when it relied exclusively on the Land Order
and refused to consider the value of comparable properties located within the Zakutanskys
neighborhood. Zakutansky v. State Bd. of Tax Commrs, 691 N.E.2d 1365, 1370-71
(Ind. Tax Ct. 1998).
On September 9, 1998, the State Board conducted its remand hearing. On
October 21, 1998, the State Board issued its final determination, upholding its initial
ruling of $350 per front foot for the Zakutanskys property and its depth
factor determination of 150 feet. The Zakutanskys filed an original appeal to
this Court, and this Court held a trial and an oral argument.
Additional facts will be supplied where necessary.
ANALYSIS AND OPINION
Standard of Review
This Court gives final determinations of the State Board great deference when the
State Board acts within the scope of its authority. Louis D. Realty
Corp. v. State Bd. of Tax Commrs, 743 N.E.2d 379, 382 (Ind. Tax
Ct. 2001), review denied. 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.
In addition, a taxpayer challenging the validity of the State Boards final determination
bears the burden of demonstrating the invalidity of the final determination.
Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1233 (Ind.
Tax Ct. 1998). The taxpayer must present a prima facie case, i.e.,
a case in which the evidence is sufficient to establish a given fact
and which if not contradicted will remain sufficient. GTE North Inc.
v. State Bd. of Tax Commrs, 634 N.E.2d 882, 887 (Ind. Tax Ct.
1994) (citations and internal quotation marks omitted). To establish a prima facie
case, the taxpayer must offer probative evidence concerning the alleged error. King
Indus. v. State Bd. of Tax Commrs, 699 N.E.2d 338, 343 (Ind. Tax
Ct. 1998); Whitley Prods., Inc. v. State Bd. of Tax Commrs, 704 N.E.2d
1113, 1119 (Ind. Tax Ct. 1998), review denied. Once the taxpayer carries
the burden of establishing a prima facie case, the burden shifts to the
State Board to rebut the taxpayers evidence and justify its decision with substantial
evidence. Clark, 694 N.E.2d at 1233. To carry its burden, the
State Board must do more than merely assert that it assessed the property
correctly. Loveless Const. Co. v. State Bd. of Tax Commrs, 695 N.E.2d
1045, 1049 (Ind. Tax Ct. 1998), review denied. Instead, the State Board
must offer an authoritative explanation of its decision to rebut the taxpayers prima
facie showing. Id.
I. Front Foot Value
The first issue is whether the State Boards assessment of the Zakutanskys property
at $350 per front foot was correct. The Zakutanskys contend that the
State Board breached its duty to ensure that the Zakutanskys property was assessed
in an equal and uniform manner with similarly situated properties.
The Zakutanskys property is located in the third row of houses from Lake
Michigan. The Zakutanskys assert that the property does not have a view
of Lake Michigan or the Chicago skyline. The property was assessed at
a rate of $350 per front foot. Peter Zakutansky introduced into evidence
at trial a list of properties in Ogden Dunes to demonstrate that the
assessment of the Zakutanskys property was not equal and uniform with similarly situated
properties. The following facts are uncontroverted: (1) Duncan and Sue Hines own
a property located at 29 Diana Road in Ogden Dunes, which is situated
in the third row from Lake Michigan. The Hines property does not
have a view of Lake Michigan or the Chicago skyline. The Hines
property was assessed at the value of $125 per front foot. (Petr
Ex. 2.); (2) Alan and Nancy Johnson own a property located at
15 Diana Road in Ogden Dunes, which is situated in the fourth row
from Lake Michigan. The Johnsons property does not enjoy a view of
Lake Michigan or the Chicago skyline. The Johnsons property was assessed at
the rate of $100 per front foot. (Petr Ex. 2.); and (3)
Robert and Juliann McDevitt own a property located at 25 Diana Road Ogden
Dunes, which is situated immediately next to the Hines property, and in the
fourth row from Lake Michigan. The property does not enjoy a view
of Lake Michigan or the Chicago skyline. The McDevitts property was assessed
at the rate of $100 per front foot. (Petr Ex. 2.)
The Zakutanskys bear the burden of presenting a prima facie case that their
property was not assessed in an equal and uniform manner. Clark, 694
N.E.2d at 1233. Peter Zakutansky testified that the subject property is similar to
the properties owned by Hines, Johnson, and McDevitt. Given the similarities of
the subject property and the other properties that were submitted into evidence, the
Zakutanskys have presented a prima facie case that a disparity may exist in
assessments for comparable properties in Ogden Dunes.
In presenting a prima facie case, the Zakutanskys placed the burden of going
forward on the State Board to show that its determination was supported by
substantial evidence. Id. The State Board contends that the properties submitted
by the Zakutanskys are not truly comparable. They presented the following evidence:
The subject property sits high on a hill. (Respt Ex. 4);
(Trial Tr. at 34.) The property is located in the third row
of homes from the lake, but lots in the second row of homes
steeply slope to Shore Drive, thus not threatening to obstruct the Zakutanskys view.
(Respt Ex. 4); (Respt Br. at 10.) The main section of
the property is level. (Respt Ex. 4); (Respt Br. at 10.)
A lake view is possible, and the only obstruction to his lake view
is the trees. (Respt Ex. 4); (Trial Tr. at 42-43.)
The Zakutanskys argue that the town ordinance prohibits them from cutting down the
trees. However, the hearing officer testified that he saw the lake from the
Zakutanskys yard when he was standing between the side of the house and
the row of trees where the hill goes down quite steeply to the
neighboring house behind the Zakutanskys house. (Trial Tr. at 43-44.) In
addition, the State Board noted that the front of the property faces Juniper
Park, which adds another attractive characteristic. (Respt Br. at 10); (Trial Tr.
at 46, 48.)
The hearing officer inspected the properties submitted by the Zakutanskys as well as
an additional twenty-six properties. (Respt Ex. 4); (Trial Tr. at 28.)
In contrast to the subject property, the hearing officer noted that the Hines
and Johnsons properties are level to the road, which affords no opportunity at
all to see the lake because of the hill that is in front
of it. (Trial Tr. at 42-43.) Moreover, the State Board pointed
out that the desirable lots in Ogden Dunes are lake lots, lots with
a view, and lots located high on hills. (Respt Br. at 10.)
The State Board noted that many of the other properties that are physically
close to the subject property and possess similar characteristics are valued at the
same rate or higher than the subject rate. (Respt Br. at 10);
(Trial Tr. at 51.)
The State Board dealt with the Zakutanskys evidence in a meaningful manner.
Based upon the above evidence, the State Board showed material distinctions between the
subject property and other properties submitted by the Zakutanskys. It is clear
to this Court that the State Board presented substantial evidence to support its
determination of assessing the subject property at $350 per front foot. Therefore,
the Court AFFIRMS the final determination of the State Board on this issue.
II. Depth Factor Determination
The second issue is whether the State Board applied the correct depth factor
to the Zakutanskys property by using the 150 feet depth table. The
Zakutanskys contend that the State Board erred in determining that the 150 feet
depth table should be applied to their property. Instead, they maintain that
the proper depth chart should be 175 feet, which would result in the
application of a 1.02 depth factor instead of the 1.10 depth factor by
using the 150 feet lot depth table. They argue that the predominant
lot depth of their neighborhood is approximately 179 feet. (Trial Tr. at
19-21.) They arrived at this figure by taking the average of lot
depths on their block. Specifically, they added together the depth of twenty-one
lots surrounding their property on Block C and then divided the sum by
the number of lots. (Petr Ex. 1); (Trial Tr. at 19-21.)
The State Board contends that the methodology used by the Zakutanskys to determine
the depth factor is incorrect. First, the State Board argues that the
area under consideration for determining the depth factor of the subject property should
be the town of Ogden Dunes. The hearing officer testified that Ogden
Dunes itself was an isolated community and that the whole area was considered
to be one neighborhood. (Trial Tr. at 38, 56.) Secondly, the
State Board maintains that predominant lot depth is the one that occurs most
often in an area, though it could be the one that occurs in
only ten percent of the lots in the entire area, especially in a
situation like in Ogden Dunes where most lots are unique in shape.
(Trial Tr. at 57-58.) The hearing officer relied on the Porter County
Land Valuation Order in computing the depth table to be applied to the
Zakutanskys property. (Respt Br. at 12.) However, he also testified that
he observed that the 150 feet depth recurred more often than any other
one even in the immediate area of a several block radius of the
Zakutanskys property. (Trial Tr. at 58.)
A depth factor refers to the factor used to adjust the front foot
base rate to account for depth variations from the norm. See Ind.
Admin. Code tit. 50, r. 2.1-2-1 (1992) (codified in present form at id.
r. 2.2-4-8 (1996)). Depth charts should be selected by determining the predominant
lot depth of the area under consideration. Id. In this case,
the parties dispute the meanings of predominant and area under consideration.
Administrative rules are subject to the same rules of construction as statutes.
Poracky v. State Bd. of Tax Commrs, 635 N.E.2d 235, 236 (Ind.
Tax Ct. 1994). In construing a statute, this Courts foremost goal is
to determine and effectuate legislative intent. State ex rel. Camden v. Gibson
Circuit Court, 640 N.E.2d 696, 700 (Ind. 1994). Furthermore, Indiana law is
clear that a court may construe and interpret a statute only if it
is ambiguous. Shoup Buses, Inc. v. Dept of State Revenue, 635 N.E.2d
1165, 1167-68 (Ind. Tax Ct. 1994). The Indiana Supreme Court consistently has
held that there is no need to apply the rules of statutory construction
when a statute is unambiguous. Mitchell v. State, 659 N.E.2d 112, 114-15
(Ind. 1995). A clear and unambiguous statute must be read to mean
what it plainly expresses, and its plain and obvious meaning may not be
enlarged or restricted. Department of State Revenue v. Horizon Bancorp, 644 N.E.2d
870, 872 (Ind. 1994). The words and phrases of such a statute
shall be taken in their plain, ordinary, and usual sense. State Bd.
of Tax Commrs v. Jewell Grain Co., 556 N.E.2d 920, 921 (Ind. 1990);
Ind. Code Ann. § 1-1-4-1(1) (West Supp.1997).
In this case, there is no ambiguity as to the meaning of predominant.
The plain, ordinary, and usual sense of predominant is prevailing all others
in numbers, frequency, distribution. Websters Third New International Dictionary 1786, 671 (1981)
(quoting definition from dominant as a synonym of predominant). Following this definition,
the predominant lot depth should not be an average figure of all lots
in the area under consideration, but instead, one that occurs more often than
others. Therefore, the State Board is correct in its interpretation of predominant.
As to the area under consideration, the State Boards definition is too broad
when it takes the entire town of Ogden Dunes into account to determine
the predominant lot depth. However, an area should not be limited to
one block as the Zakutanskys did. The hearing officer himself testified that
an area or neighborhood is going to be governed upon the characteristics within
it and the economic effects that it would have. (Trial Tr. at
38-39.) Peter Zakutansky noted that Ogden Dunes consisted of between 600 and
650 houses which have different qualities and characteristics. (Trial Tr. at 62.)
In fact, the actual county land order shows that Ogden Dunes is
divided into individual subdivisions and has price ranges within those subdivisions. (Trial
Tr. at 38.) By pointing out this fact, this Court is not
suggesting that the area under consideration should be limited to a given subdivision.
On the contrary, this Court has consistently emphasized the importance of considering
the value of surrounding properties in the same neighborhood when conducting assessments.
Vonnegut v. State Bd. Of Tax Commrs, 672 N.E.2d 87, 90 (Ind. Tax
Ct. 1996). While the land values of a particular subdivision should inform
the value of a given property, they must also be viewed within the
context of the larger neighborhood. Id. It is the same with
respect to the determination of the predominant lot depth in the area under
consideration, because the determination of depth factor is part of property value assessment
This issue is REMANDED to the State Board for a determination of the
predominant lot depth in the area under consideration and which depth factor is
applicable. The Zakutanskys are reminded that on remand they have the burden
to produce probative evidence concerning the area and predominant depth, and the State
Board is to deal with any evidence in a meaningful manner and, if
necessary, to support its decision with substantial evidence. See Clark, 694 N.E.2d
For the reasons stated, this Court
the State Boards final determination on
the issue of front foot value. However, this Court REVERSES and REMANDS
the issue of the depth factor determination to the State Board for further
consideration consistent with this opinion.