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Tuesday, June 4, 2013

Crown Communication, Inc./Crown Castle GT Company, LLC v. Richard A. Levin [Joseph W. Testa], Tax Commissioner of Ohio, Case no. 2012-0780
Appeal from order of State Board of Tax Appeals

State of Ohio v. Henry Allen Holdcroft, Case nos. 2012-1325 and 2012-1441
Third District Court of Appeals (Wyandot County)

Board of Education of the Dublin City Schools v. Franklin County Board of Revision, the Franklin County Auditor, and East Bank Condominiums II, LLC, Case no. 2012-1432
Appeal from order of State Board of Tax Appeals

Cincinnati Bar Association v. Robert F. Alsfelder, Jr., Case no. 2013-0223


Taxpayer Argues Missed Appeal Deadline Should be Waived Because Tax Commissioner Sent Wrong Filing Instructions

Seeks Reversal Of Order Denying Reassessment Based on Missed Filing Deadline

Crown Communication, Inc./Crown Castle GT Company, LLC v. Richard A. Levin [Joseph W. Testa], Tax Commissioner of Ohio, Case no. 2012-0780
Appeal from order of State Board of Tax Appeals

ISSUE: When the State Tax Commissioner provides a property owner with incorrect instructions for filing an appeal of the commissioner’s final  assessment of the owner’s property, and the taxpayer timely complies with the commissioner’s erroneous instructions, does the commissioner’s error toll (stop the running of) the statutory time limit within which the taxpayer must file its notice of appeal with the Board of Tax Appeals until the taxpayer is provided with correct filing instructions?   

BACKGROUND: Crown Castle GT and Crown Communications Inc. (Crown) owns and operates wireless communication towers located in Ohio. 

After Crown filed its 2006 Ohio property tax return, the Ohio Department of Taxation advised  the company that it was disputing the taxable value Crown had stated for some of its towers. Following an audit that wasn’t completed until April 2008, the tax commissioner notified Crown that he had established a preliminary valuation of their property that was higher than Crown believed was supported by generally accepted valuation standards in the wireless communications industry. Although it disagreed with the commissioner’s amended preliminary valuation, to avoid potential financial penalties Crown paid its 2006 tax in August 2008 at the rate set by the commissioner while awaiting receipt of a certificate of final valuation.

In May 2009 Crown and its tax agent, Carmen Ospina, received an official notice of final assessment for the 2006 tax year. The notice instructed Crown that if it wished to appeal the commissioner’s assessment, it must follow appeal procedures set forth in a separate instruction sheet that was enclosed. Although a final assessment by the tax commissioner must be appealed to the State Board of Tax Appeals (BTA) within 60 days, Ospina subsequently produced a copy of the instructions that she swore were enclosed with Crown’s May 22, 2009 notice incorrectly instructing Crown to send its notice of appeal to the commissioner, rather than to the BTA, within 60 days.

Pursuant to those instructions, Ospina prepared and sent a notice of appeal to the tax commissioner’s office.  That notice was stamped as received by the commissioner 11 days before the expiration of the appeal period.  Neither Crown nor Ospina were notified prior to the expiration of the appeal period that the notice of appeal had been directed to the wrong office. In September 2009, after the expiration of the 60-day appeal period, the commissioner’s office notified Crown and Ospina that it could not process Crown’s appeal of the final assessment for 2006 because only the BTA had jurisdiction to hear appeals of a final assessment. 

Crown attempted to file a delayed appeal with the BTA, asserting that it had missed the 60-day filing deadline because it relied to its detriment on the erroneous instructions provided by the commissioner.  The commissioner moved the BTA to affirm his final assessment of Crown’s property and dismiss Crown’s appeal as untimely. The BTA granted the commissioner’s motion to affirm his valuation, holding that it lacked jurisdiction to consider Crown’s appeal because it had not been timely filed.

Crown has exercised its right to appeal the BTA’s action to the Supreme Court.

Attorneys for Crown argue that the 60-day statutory time limit for appealing a final property assessment by the tax commissioner does not begin to run until the commissioner has complied with his legal requirements under R.C. 5703.51(D) to 1) send a copy of the assessment to the taxpayer, and 2) “provide to the taxpayer a written description of the steps required to perfect an appeal to the board of tax appeals.” Because the instructions provided to Crown in this case did not describe how to “perfect an appeal to the BTA,” but instead erroneously directed Crown to send its appeal notice to the commissioner, they assert, the commissioner’s assessment was not “final” and therefore the 60-day period for filing an appeal of a final order to the BTA did not run until Crown was finally advised in September 2009 of the correct manner of perfecting an appeal. Because Crown’s appeal was filed with the BTA within 60 days after that date, they contend, it was submitted within the statutory deadline and the BTA erred in dismissing it as untimely.

Attorneys for the tax commissioner respond that in its pleadings to the BTA Crown did not assert that the commissioner had failed to comply with R.C. 5703.51(D), or raise any other argument based on a statute or case law, but merely asked the board to waive the 60-day filing deadline based on an assertion that the alleged incorrect filing  instructions made rejection of Crown’s appeal “unjust.”  They contend that the scope of the court’s review of tax appeal cases must be limited to arguments presented to and addressed by the BTA, and urge the court not to decide this case based on an issue that was not considered by the tax board and is being advanced by Crown for the first time in its current appeal.

Contacts
Representing Crown Castle GT Co. LLC and Crown Communications Inc.: Steven A. Dimengo, 330.376.5300

Representing State Tax Commissioner Joseph W. Testa: Barton A. Hubbard, 614.466.5967

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Court Asked to Clarify Resentencing Authority In Cases Where Mandatory Postrelease Control Was Omitted

When Offender Has Completed Prison Term For Qualifying Offense, But Not Entire Sentence

State of Ohio v. Henry Allen Holdcroft, Case nos. 2012-1325 and 2012-1441
Third District Court of Appeals (Wyandot County)

ISSUE: When a criminal offender is convicted of multiple offenses that were charged in a single indictment, and the trial court fails to include in his sentence for one of those offenses a term of postrelease control that is required by law, does the trial court retain jurisdiction to resentence the offender to impose the omitted term of postrelease control after the offender has completed the prison term for the offense requiring postrelease control, if resentencing takes place before the offender finishes serving the additional prison time imposed for his other convictions?

BACKGROUND: In September 1999, Henry Holdcroft of Wyandot County was convicted of a first- degree felony count of aggravated arson and a third-degree felony count of arson.  Both offenses were charged in the same indictment. The trial court sentenced him to a 10-year prison term for the aggravated arson conviction and  an additional five-year prison sentence for the arson charge “to be served consecutive to” the 10-year sentence.  When it pronounced sentence in the case, the trial court noted that Holdcroft would be subject to post-release control after serving his prison terms, but did not specifically impose a five-year term of postrelease control that was mandatory for his first-degree felony conviction.

In December 2009, after Holdcroft had served all of the 10-year sentence for his aggravated arson conviction but while he remained in prison serving the sentence for his other conviction, the state filed a motion asking the trial court to conduct a resentencing hearing for the purpose of imposing the mandatory five-year term of postrelease control that it had failed to impose in 1999. In January 2010, over Holdcroft’s objection, the court conducted a new sentencing hearing at which it reimposed the same consecutive prison terms as before and added a mandatory five-year term of post-release control for the aggravated arson conviction and an optional three-year term of post-release control based on Holdcroft’s  third-degree felony conviction.

Holdcroft appealed the resentencing order to the Third District Court of Appeals, citing several recent decisions in which the Ohio Supreme Court has held that a trial court lacks jurisdiction to resentence a criminal offender to impose an omitted term of postrelease control after the defendant has completed his term of imprisonment. In a 2-1 decision, the Third District affirmed the trial court’s resentencing order.  In its opinion, the appellate majority held that the Supreme Court cases cited by Holdcroft were distinguishable from his case, because in those cases the defendant had completed the entire prison sentence imposed on him at trial prior to being resentenced, while Holdcroft had not yet completed the aggregate sentence for all of the crimes charged in his indictment, and therefore remained subject to the trial court’s jurisdiction for purposes of resentencing.

The Third District subsequently certified that its holding in this case was in conflict with State v. Dresser, a 2009 decision of the Eighth District Court of Appeals  addressing the same legal issue. The Supreme Court agreed to review the case to resolve the conflict between appellate districts.

Attorneys for Holdcroft assert that this court’s decisions in Hernandez v. Kelly (2006), State v. Bezak (2007), State v. Simpkins (2008) and State v. Bloomer (2009) have held that a defendant may not be resentenced to impose post-release control after completing the “sentence” imposed for his underlying offense,  and in those decisions the court has indicated that the term “sentence” in Ohio’s criminal sentencing statutes refers to the sanction or group of sanctions that a court imposes on a defendant for a specific criminal offense

They point to the Ohio Supreme Court’s 2006 decision in State v. Saxon, in which they say the court expressly rejected the federal concept of a “sentencing package” in cases involving multiple charges and convictions, and held that Ohio’s felony sentencing scheme “makes no provision for grouping offenses together and imposing a single ‘lump’ sentence for multiple felonies.”  They assert that, pursuant to Saxon,  the statutory requirement of a five-year term of post-release control in this case was predicated on Holdcroft’s conviction for the specific first-degree felony of aggravated arson, and pursuant to Hernandez and the other decisions cited above, the trial court’s jurisdiction to resentence Holdcroft for his aggravated arson conviction expired when Holdcroft completed the 10-year prison term imposed for that offense.

Attorneys for the state urge the court to affirm the reasoning of the Third District that in criminal cases involving multiple convictions and prison terms arising from a single indictment, a trial court retains jurisdiction to correct an error in its sentencing order until the defendant has completed serving the total term of imprisonment recorded in the court’s journal entry for all of the counts contained in that indictment. 

They point out that a defendant convicted and sentenced for multiple offenses does not become subject to the terms and conditions of a post-release control order, or become potentially liable to punishment for violating such an order, until he has completed his entire term of imprisonment.  They assert that, as a matter of sound public policy, if the purpose of advising offenders at sentencing that they will be subject to post-release control is to ensure that they are aware of that condition and do not inadvertently violate that control upon their release from custody, then it is both logical and consistent with the intent of the legislature to allow trial courts to correct the omission of a post-release control notification at trial by conducting a new sentencing hearing at any time prior to the defendant’s release from prison, irrespective of the order in which his sentences for individual offenses are being served.

Contacts
Representing Henry Holdcroft: Kristopher A. Haines, 614.466.5394

Representing the state and Wyandot County prosecutor’s office: Jonathan K. Miller, 419.294.5878

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Central Ohio Condo Developer Challenges Tax Appeals Board Valuation of Unfinished Units

Argues School District Failed to Meet Burden of Proof That Valuation

Board of Education of the Dublin City Schools v. Franklin County Board of Revision, the Franklin County Auditor, and East Bank Condominiums II, LLC, Case no. 2012-1432
Appeal from order of State Board of Tax Appeals

ISSUE:  Did the State Board of Tax Appeals abuse its discretion or act unreasonably or unlawfully when it rejected the tax valuation of an unfinished condominium development adopted by the Franklin County Board of Revision (BOR) and reinstated the county auditor’s initial valuation of that property despite the fact that the party appealing the BOR’s valuation presented no evidence to show that the BOR’s valuation was inaccurate or that the auditor’s valuation more closely reflected the true value of the property?

BACKGROUND:  In 2008 the Franklin County Auditor notified the owners of East Bank Condominiums II,  a residential development in northwest Columbus consisting of 28 units in a single four-story building,  that he had estimated the market value of 21 unfinished units in the building for the 2008 tax year at $8.1 million.

East Bank exercised its right to contest the auditor’s valuation before the Franklin County Board of Revision (BOR).  The Dublin City School District Board of Education, a primary beneficiary of property taxes generated by the complex, opposed East Bank’s appeal. In proceedings before the BOR, East Bank presented testimony by an expert appraiser, Tom Horner.  Horner testified that in light of a depressed local and statewide market for condominiums,  and the fact that 17 of the unfinished units were only 50 percent completed, the true market value of those units in their present condition would be the price another developer would pay to purchase all 21 units in a single ‘bulk sale.’ Based on the additional per-unit expense a purchaser would have to incur to complete the unfinished units, and the reduced per-unit price a bulk purchaser would offer compared to individual retail buyers of finished units, Horner estimated the market value of the unfinished units as of the tax lien date of January 1, 2008 as $3.1 million.

The school board did not present evidence before the BOR challenging the accuracy of Horner’s appraisal or supporting the auditor’s valuation. Finding the evidence presented by East Bank to be credible and competent,  the BOR adopted Horner’s appraised value of $3.1 million as the true value of the unfinished units for the 2008 tax year.

The school board appealed the BOR’s action to the State Board of Tax Appeals (BTA).  During the BTA’s proceedings, Dublin Schools did not present an alternative appraisal asserting a true value of the property that was different from the BOR valuation or evidence supporting the auditor’s original valuation.  Instead, the school board urged the BTA to follow its holding in a 2010 case, M/I Homes of Cincinnati v. Warrant County Board of Revision, in which the BTA rejected a property owner’s proposed discounted valuation for 18 undeveloped lots within a residential subdivision that was based on a reduced per-lot price a buyer would theoretically pay if it purchased all 18 lots in a bulk sale.

The BTA vacated the BOR’s valuation of the East Bank property and reinstated the auditor’s original valuation of $8.1 million. In its decision, the BTA stated that it  found no basis in this case to depart from its position in M/I rejecting a discounted valuation of multiple properties based on a bulk sale. The BTA also found that because East Bank had failed to provide the BTA with data supporting the alleged costs of “finishing out” its half-finished units, the BOR’s reduced per-unit valuation based on those costs was not reliable, and therefore the BTA’s only option was to reinstate the auditor’s valuation.

East Bank has exercised its right to appeal the BTA’s ruling to the Supreme Court.

Attorneys for East Bank argue that the BTA acted unreasonably and contrary to law by vacating the  BOR’s  evidence-based valuation of East Bank’s property in the absence of any evidence produced by the school board in favor of an alternative valuation or in support of the auditor’s valuation.  They contend that in doing so the BTA violated the well-established rule that once a county Board of Revision has adopted a valuation of property, the party challenging that valuation before the BTA – in this case Dublin City Schools – bears the burden of showing by evidence that the BOR’s valuation is inaccurate and that another valuation more accurately reflects the property’s true market value.
In this case they assert, the BTA effectively reversed the burden of proof by requiring East Bank to “prove” that  the expert testimony relied upon by the BOR was valid, when it should have required the school board to produce probative evidence that the BOR’s valuation was wrong. 

With regard to the BTA’s reliance on its prior ruling in M/I, they point out that in that case: 1) M/I was the party appealing a BOR valuation to the BTA, and therefore bore the burden of proving that it’s proposed bulk sale valuation was valid, whereas in this case the BOR adopted East Bank’s bulk sale valuation as the true value of the property, and the school board provided no evidence to contradict it; and 2) There was no evidence in the M/I case record to support M/I’s claim that it was likely to dispose of 18 separate vacant lots in an M/I subdivision through a bulk sale to another developer, whereas there was evidence in the record of this case showing that East Bank had actively explored the bulk sale of its unfinished units to other developers, and had received at least one offer that was very close to the $3.1 million bulk sale valuation adopted by the BOR.

Attorneys for Dublin City Schools urge the court to affirm the BTA’s judgment reinstating  the auditor’s original valuation of the East Bank development because the Horner appraisal of that  property relied upon by the Franklin County BOR used valuation methodologies, including a discounted bulk sale estimate, that are used by lending institutions in calculating the “investment value” of multi-unit developments, but are not methods for establishing a property tax valuation.

The school board asserts that the BTA correctly found that the $3.1 million bulk sale valuation adopted by the BOR significantly understated the actual value of the property because it ignored the fact that East Bank’s business plan during and after 2008 was to build out and sell the unfinished units in its building to individual purchasers or small investors at retail market prices, a finding which they say has been borne out by the actual history of the development over the ensuing years.

Contacts
Representing Dublin City Schools: Mark Gillis, 614.228.5822

Representing East Bank Condominiums II: Marion H. Little, 614.365.4113

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Attorney Discipline

Cincinnati Bar Association v. Robert F. Alsfelder, Jr., Case no. 2013-0223

The Board Of Commissioners on Grievances and Discipline has recommended that the law license of Cincinnati attorney Robert F. Alsfelder Jr. be indefinitely suspended for failing to comply with a subpoena for business records, refusing to authorize the release of his federal and state tax returns, and otherwise failing to cooperate with a Cincinnati Bar Association investigation of alleged professional misconduct by Alsfelder in his dealings with a client’s dry cleaning business between 2004 and 2008.

Alsfelder, whose license has been under suspension since September 2011 for failing to comply with a Supreme Court order requiring him to produce records subpoenaed by the disciplinary board, has filed objections to the board’s findings and recommended sanction.  In those objections, Alsfelder points out that the hearing panel that reviewed his alleged misconduct in dealing with his client found that the bar association had failed to prove any of the disciplinary rule violations set forth in its complaint by clear and convincing evidence.    

He argues that he declined to authorize the release of his tax returns because they contain personal and private information unrelated to the disciplinary complaint, and because the returns would not shed light on his financial dealings with his client since amounts he received from that client were combined with income from other business sources. Alsfelder also asserts that the suspension of his law license since September 2011 constitutes a penalty the court has already imposed for his lack of cooperation, and an additional indefinite suspension for that same misconduct would be disproportionate to the sanctions imposed in similar cases where no ethical violations other than failure to cooperate were found.

The Cincinnati Bar Association has also filed objections to the disciplinary board’s findings and recommended sanction.  The bar’s attorneys argue that the board erred in finding that the evidence presented at Alsfelder’s hearing  was insufficient to show that he  violated disciplinary rules by writing  more than $141,000 worth of checks to himself from his client’s business checking account without making any accounting to the client for those payments, and by failing to include amounts he received from that client in the gross income Alsfelder reported in his 2004 and 2009 tax returns.

The bar association also points out that Alsfelder’s license was previously suspended for misconduct in 2004, with that suspension stayed on the condition that he make restitution of $30,000 to a client, and cites several cases in which attorneys with a prior history of misconduct who refuse to cooperate with a subsequent disciplinary investigation have been permanently disbarred.

Contacts
Representing the Cincinnati Bar Association: Michael Foley, 513.381.9200

Robert S. Alsfelder Jr, pro se, 513.673.8224

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.