Tax Court affirms business center’s voluntary withdrawal of property tax appeal

An objection to an Indianapolis business center’s voluntary withdrawal of its property tax appeal was not improperly overruled, the Indiana Tax Court ruled Monday.

After more than two years of administrative appeal, Stutz Business Center LLC filed a notice of withdrawal of property tax appeals it had filed for the 2012 through 2014 assessment years. Stutz owned four parcels of land located in downtown Indianapolis during that time and had been assigned a total assessed value of the property at $3.7 million for 2012, $3.8 million for 2013 and $3.5 million for 2014.

Stutz appealed the assessments to the Marion County Property Tax Assessment Board of Appeals, but eventually transitioned the appeals to the Indiana Board of Tax Review after the local board took no action.

After several months of back and forth, the Indiana Board ordered the parties to appear for a telephonic pre-hearing conference in September 2018. On the day of the pre-hearing conference, Stutz filed its withdrawal notice.

The Marion County assessor objected, arguing Stutz cited no authority to support its right to voluntarily withdraw its appeals, and that the assessor had “already incurred ‘substantial expense’ due to the time, effort, and research necessary to obtain evidence from [Stutz].” The assessor also claimed he would be prejudiced by the withdrawal because the evidence supported an increase in Stutz’s assessments, and “the time to increase the 2012 to 2014 assessments outside of the appeals process had already lapsed.”

But the board ultimately dismissed Stutz’s appeals, finding the assessor did not show he incurred a substantial expense because he “point[ed] to activities, such as conducting discovery, that are typically involved in preparing for a hearing,” did not quantify any of the associated expenses, and did not provide evidence to show he retained an expert. Additionally, the board found no evidence of a substantial expense because the proceedings were not at an advanced stage and the assessor’s claims of legal prejudice were unavailing because he had not raised a counterclaim.

Then on appeal before the Indiana Tax Court, the assessor argued on appeal the board’s final determination constituted an abuse of discretion and must be reversed. But the Tax Court affirmed the board’s final determination in Marion County Assessor v. Stutz Business Center, LLC, 18T-TA-26.

First, the Tax Court declined to reverse the determination on the grounds that the board erroneously found the assessor had not incurred a substantial expense by creating a rule mandating that two evidentiary hearings be held before a voluntary dismissal could be successfully defeated.

“Furthermore, the facts support the Indiana Board’s conclusion that the Assessor did not incur a substantial expense because they show that he spent little time on the 2½ year old administrative appeal,” wrote Judge Martha Blood Wentworth. “…In addition, the fact that the Assessor engaged in a discovery dispute over no more than a 2½ month period also fails to indicate he incurred a substantial expense when more extensive and truly protracted discovery has not precluded the voluntary dismissal of an action.”

The Tax Court also found the assessor provided no relevant evidence, authority or persuasive argument to indicate why judicially noticed attorney fees would constitute a “substantial expense.”

It likewise denied to assessor’s claims that the board’s final determination must be reversed because it arbitrarily created a new rule, in contravention of its own procedural rules and Joyce Sportswear Co. v. State Bd. of Tax Comm’rs, 684 N.E.2d 1189 (Ind. Tax Ct. 1997), by requiring the filing of mandatory counterclaims to defeat a notice of withdrawal. The Tax Court found that by dismissing Stutz’s appeals, the board effectively determined the dismissal would not impair the assessor’s substantive or vested rights that might have been raised had he filed a counterclaim.

The Tax Court therefore affirmed, finding the board’s final determination did not constitute an abuse of discretion because it comports with the law and is supported by substantial evidence, and because Stutz’s voluntary withdrawal of its appeals did not violate the purpose of Indiana Trial Rule 41(A)(1)(a).