ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
See footnote STEVE CARTER
Attorney at Law ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
JOHN O. MOSS, III TED J. HOLADAY
LEAGRE CHANDLER & MILLARD DEPUTY ATTORNEY GENERAL
Indianapolis, IN Indianapolis, IN
INDIANA TAX COURT
STANLEY TALESNICK and )
v. ) Cause No. 49T10-9810-TA-127
STATE BOARD OF TAX COMMISSIONERS, )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
October 1, 2001
The Petitioner, Stanley Talesnick, appeals the final determination of the State Board of
Tax Commissioners (State Board) establishing the assessed value of his land and improvements
as of March 1, 1989. Talesnick moved for summary judgment and presented
several issues, which the Court restates as:
Whether the State Board properly applied a base rate value of $4,000 per
acre for any acreage beyond the first acre on Talesnicks property; and
Whether the State Board properly refused to apply a negative influence factor for
the water flowage easement on Talesnicks property.
See footnote FACTS AND PROCEDURAL HISTORY
For the reasons stated below, the Court GRANTS Talesnicks motion for summary judgment
and DENIES the State Boards cross motion for summary judgment. Accordingly, the
State Boards determination is REVERSED and this case REMANDED to the State Board
for further proceedings consistent with this opinion.
Talesnicks real property consists of 2.717 acres of land and is located in
Eagle Ridge subdivision along Eagle Creek Reservoir in Marion County. Eagle Ridge
does not have the infrastructure city water, sewers, fire hydrants, or city
maintained streets that other subdivisions surrounding the reservoir possess.
includes a water flowage easement that encumbers thirty-seven percent of his land.
In accordance with Indiana Code § 6-1.1-4-13.6, the Marion 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 base rate values
in Talesnicks subdivision ranged between $90,000 to $110,000 for the first acre and
between $2,000 to $4,000 for each additional acre.
The township assessor valued
all of Talesnicks acres at the highest values under the land order and
did not apply a negative influence factor to his land. The assessor
valued Talesnicks 2.717 acres at $116,910 and valued the improvements at $194,100, and
the Marion County Board of Review sustained these values.
On October 18, 1990, Talesnick filed a Form 131 Petition with the State
Board claiming, in part, that the base rate valuation for his acreage should
be reduced and that a negative influence factor should have been applied to
his property to account for the water flowage easement. After a hearing,
the State Board denied Talesnicks petition and increased the assessed value of his
Talesnick subsequently appealed to this Court. On March 20, 1998, this Court
ordered the petition remanded to the State Board because Talesnick had made a
prima facie case that his land was incorrectly valued and because the State
Board had failed to support its determination with substantial evidence. Talesnick v.
State Bd. of Tax Commrs, 693 N.E.2d 657, 661-62 (Ind. Tax Ct. 1998).
In regard to the base rate value, this Court found that the
State Boards reasoning that Talesnicks land should be valued at $110,000 merely because
it was on the water had failed to rebut Talesnicks prima facie case
that his property should not be valued as highly as land on the
water in the surrounding subdivisions. Id. at 660-61. In regard to
the negative influence factor, this Court found that Talesnick had presented evidence, including
testimony and maps, that showed that the water flowage easement encroached on Talesnicks
land to a greater extent than it did on the other property surrounding
the reservoir. Id. at 661. This Court rejected the State Boards
argument that the land order specifically accounted for the easement on Talesnicks land
and remanded the issue for the State Board to determine whether [Talesnicks] land
is encumbered by the easement to an extent such that application of a
negative influence factor is warranted. Id.
On July 21, 1998, the State Board conducted its remand hearing. On
September 14, 1998, the State Board issued its final determination. The State
Board found that county officials had failed to rebut Talesnicks prima facie evidence
that the base rate values were incorrect. Therefore, the State Board reduced
Talesnicks base rate value for his first acre from $110,000 to $90,000.
The State Board refused to reduce the value for the additional acres valued
at $4,000 because it found that Talesnick had waived the issue and that
this Courts remand order only required that it determine whether Talesnicks land was
incorrectly valued at $110,000 per acre. (State Bd. Tr., Ex. E at
9-10.) The State Board also refused to apply a negative influence factor
to Talesnicks property because it concluded that the water flowage easement did not
negatively affect the value of Talesnicks property anymore than it affected the value
of other waterfront property in the same subdivision.
Talesnick filed this original tax appeal on October 15, 1998. On May
18, 1999, Talesnick filed a motion for summary judgment. On June 18,
1999, the State Board filed its response opposing the summary judgment motion and
asked the Court to enter summary judgment in its favor.
Court heard oral arguments on summary judgment and took the matter under advisement.
Additional facts will be supplied as needed.
ANALYSIS AND OPINION
Standard of Review
The Court gives great deference to the State Boards final determinations when the
State Board acts 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 those decisions 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.
Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1233 (Ind.
Tax Ct. 1998). Summary judgment is proper only when no genuine issues
of material fact exist and the moving party is entitled to judgment as
a matter of law. See Ind. Trial Rule 56(C). See also
W. H. Paige & Co. v. State Bd. of Tax Comm'rs, 732 N.E.2d
269, 270 (Ind. Tax Ct. 2000). Cross motions for summary judgment
do not alter this standard. W. H. Paige, 732 N.E.2d at 270.
I. Base Rate Value
Talesnick asserts that the base rate value for his additional 1.717 acres should
be reduced from $4,000 to $2,000 per acre. Talesnick argues that after
this Court found that he had made a prima facie showing that his
property was incorrectly assessed, the State Board failed to rebut his evidence on
remand. (Petr Summary Judgment Br. at 8-9.) At the remand hearing,
Talesnick presented evidence, via an affidavit from Bradford West (a builder and land
developer), that his property value was reduced by $10,000 because of the lack
a sewer, by $5,000 by the lack of city water, and by five
percent because of the limited accessibility to the subdivision. (Petr Ex. I
The State Board acknowledges that this Court remanded the base rate issue for
Talesnicks first acre to the State Board to support with substantial evidence but
argues that this Courts remand order did not include the additional acreage.
(Respt Summary Judgment Br. at 7.) The State Board further argues that
it had already dealt with Talesnicks evidence regarding the lack of infrastructure in
his subdivision when it reduced Talesnicks base rate value for his first acre
by $20,000 and that this absence of city water, sewers, fire hydrants, and
city maintained streets does not impact his additional acres because Talesnick does not
have a house on those acres. (Respt Summary Judgment Br. at 7-8;
Trial Tr. at 29-30.)
In its prior opinion, this Court noted that Talesnicks land was assessed at
$110,000 for the first acre and $4,000 for the additional acres and that
although the Court referred to only the first acres $110,000 value, the Courts
reasoning applie[d] to valuation of the entire parcel. Talesnick, 693 N.E.2d at
658 n. 4 (emphasis added). Therefore, this Courts remand order did require
the State Board to support its final determination on the additional acreage issue
with substantial evidence. Accordingly, the Court REMANDS this issue to the State
Board for further consideration.
II. Negative Influence Factor
Talesnick contends that the State Board erroneously declined to apply a negative influence
factor to his land to account for the water flowage easement. (Petr
Summary Judgment Br. at 10-11.) While the State Board admits that a
water flowage easement exists on Talesnicks property, it argues that Talesnick failed to
make a prima facie showing that that the value of his lot was
more adversely affected than any of the other properties around the reservoir that
had an easement. (Respt Summary Judgment Br. at 9-10.)
An influence factor refers to a condition peculiar to the land that dictates
an adjustment, either positive or negative, to the extended value to account for
variations from the norm. Ind. Admin. Code tit. 50, r.
2.1-2-1(g) (1988) (codified in present form at id., r. 2.2-4-10(a)(9) (2001)). To
apply an influence factor, an assessor must identify the deviations from the norm
in the property. White Swan Realty v. State Bd. of Tax Commrs,
712 N.E.2d 555, 562 (Ind. Tax Ct. 1999), review denied. These deviations
are then expressed as a percentage that represents the composite effect of the
factor that influences the value. Id.; 50 IAC 2.1-2-1(g). The use
of influence factors are appropriate for making adjustments to the value of land
that is encumbered by an easement. Talesnick, 693 N.E.2d at 660 (citing
Poracky v. State Bd. of Tax Commrs, 635 N.E.2d 235, 238 (Ind. Tax
At the prior trial, this Court found that Talesnick had made a prima
facie case by presenting evidence that his water flowage easement encumbers more of
[his] property than it does [his] neighbors and that the easement encroaches on
[his] land to a greater extent than it does the other land surrounding
the reservoir. Talesnick, 693 N.E.2d at 660-61. At the remand hearing,
Talesnick provided evidence, including testimony and maps, showing that: (1) properties around
the reservoir are subject to a water flowage easement; (2) the area subject
to the water easement on these properties varied; (3) the water flowage easement
was determined by how much of the parcel of land was at or
below 815 feet above sea level; (4) thirty-seven percent of his land is
at or below 815 above sea level; (5) his easement encumbered thirty-seven
percent of his property; (6) the easement prohibits him from constructing any kind
of permanent improvement on that thirty-seven percent of his land; (7) because of
the easement, his homesite had to sit back at a greater distance from
the waters edge; and (8) the limitations associated with the easement entitled him
to a twenty to twenty-five percent negative influence factor as compared to a
similar property not subject to such limitations. (Petr Exs. C, D, F
at 3-4, I at 3-4.)
At the time of Talesnicks hearing, there was no guidance from the courts
or from the State Board on how to quantify a negative influence factor.
Because this Court has since provided such guidance, this Court REMANDS this
issue to the State Board for further consideration in light of Phelps Dodge
v. State Bd. of Tax Commrs, 705 N.E.2d 1099, 1106 (Ind. Tax Ct.
1999), review denied. In Phelps Dodge, this Court explained how a taxpayer
may quantify an influence factor that affects his property. The Court stated
that because influence factors reflect a deviation from the market based range of
values assigned to the property through the Land Order[,] influence factors can be
quantified by using market data in order to effectively reflect the actual deviation
from the market value assigned a piece of property through the Land Order.
Phelps Dodge, 705 N.E.2d at 1106. Talesnick is reminded that on
remand he has the burden to produce probative evidence that would support an
application of a negative influence factor and a quantification of that influence factor.
See footnote Thereafter, the State Board is to deal with any evidence
in a meaningful manner and, if necessary, to support its decision with substantial
See Inland Steel Co. v. State Bd. of Tax Commrs, 739
N.E.2d 201, 234 (Ind. Tax Ct. 2000), review denied.
For the aforementioned reasons, this Court GRANTS Talesnicks motion for summary judgment and
DENIES the State Boards cross motion for summary judgment.
Accordingly, the State
Boards determination is REVERSED and this case REMANDED to the State Board for
further proceedings consistent with this opinion.
Stanley Talesnick is the attorney as well as the petitioner
in this matter.
Footnote: Claudia Talesnick died while this case was pending; therefore, Stanley Talesnick is
now the sole petitioner. (Trial Tr. at 4.)
Footnote: Talesnick also claimed that the State Board erroneously increased the
square footage measurement of his basement even though the parties stipulated that the
correct measurement was 3,080 square feet. (Petr Summary Judgment Br. at 11-12;
see also Petr Ex. F at 4.) The State Board has stipulated
that it does not oppose the granting of summary judgment on the basement
measurement issue. (Respt Summary Judgment Br. at 1, 2 n. 1; Trial
Tr. at 9.) Accordingly, this Court GRANTS summary judgment on this issue
in favor of Talesnick and REMANDS this issue to the State Board to
apply the correct measurement to the basement.
These subdivisions include Bay Colony, Green Braes, and Traders Cove.
Footnote: Under the land order, the base rate in the Bay Colony,
Green Braes, and Traders Cove subdivisions also ranged between
$90,000 to $110,000 for
the first acre. (Petr Exs. E, F at 1.)
Footnote: Pursuant to Indiana Trial Rule 56(B), the Court treats the State
as a cross-motion for summary judgment. Salin Bancshares, Inc. v. Indiana Dept
of State Revenue, 744 N.E.2d 588, 591 n.6 (Ind. Tax Ct. 2000).
Petitioner is also reminded that a mere opinion
or conclusion does not constitute probative evidence.
Inland Steel Co. v. State
Bd. of Tax Commrs, 739 N.E.2d 201, 211 (Ind. Tax Ct. 2000),
review denied; see also Wirth v. State Bd. of Tax Commrs, 613 N.E.2d
874, 878 (Ind. Tax Ct. 1993) (finding experts opinion as to application of
negative influence factor, without additional evidence, to be insufficient to overcome State Boards
In addition to granting summary judgment in its favor, Talesnick
asks this Court to: (1) find the State Board in contempt for
failing to follow this Courts previous instructions on remand; (2) order the State
Board to pay attorneys fees of $7,500; and (3) retain jurisdiction of this
case to ensure the State Boards compliance with the Courts order on remand.
(Petr Summary Judgment Br. at 15; Trial Tr. at 24-26.) This
Court declines to do so. However, if the State Board fails to
follow this Courts instructions on remand, Talesnick may appeal to this Court from
the State Boards final determination, and the Court will consider his motions for
contempt and attorneys fees at that time.