ST. MARY'S BUILDING CORPORATION, Petitioner,
SARAH E. REDMAN, WARRICK COUNTY ASSESSOR, Respondent.
APPEAL FROM A FINAL DETERMINATION OF THE INDIANA BOARD OF TAX
ATTORNEYS FOR PETITIONER: ANDREW B. HOWK N. KENT SMITH HALL,
RENDER, KILLIAN, HEATH & LYMAN, P.C. Indianapolis, IN.
ATTORNEYS FOR RESPONDENT: CURTIS T. HILL, JR. ATTORNEY
GENERAL OF INDIANA JEFFERSON S. GARN WINSTON LIN REBECCA L.
McCLAIN PARVINDER K. NIJJAR DEPUTY ATTORNEYS GENERAL
ATTORNEYS FOR AMICI CURIAE ASSOCIATION OF INDIANA COUNTIES
and WARRICK COUNTY BOARD OF COMMISSIONERS: MARK E. GIAQUINTA
SARAH L. SCHREIBER HALLER & COLVIN, PC. Fort Wayne, IN.
Mary's Building Corporation ("Building
Corporation") has appealed the final determination of
the Indiana Board of Tax Review that denied its request for a
property tax exemption for the 2014 and 2015 tax years. Upon
review, the Court affirms the Indiana Board's final
AND PROCEDURAL HISTORY
Building Corporation, an Indiana non-profit corporation,
owns the Epworth Crossing medical building located in
Newburgh, Indiana. (See Cert. Admin. R. at 4385-86.)
The Building Corporation maintains that its sole corporate
member is St. Mary's Health, Inc., which owns and
operates a hospital in Evansville, Indiana ("the
Hospital"). (See Pet'r Br. at 6-8 (citing
Cert. Admin. R. at 4302, 4365).)
of both 2014 and 2015, the Building Corporation filed
applications for exemption with the Warrick County Property
Tax Assessment Board of Appeals ("PTABOA") seeking
a charitable purposes exemption, an educational purposes
exemption, and a religious purposes exemption for the
portions of Epworth Crossing (as well as the personal
property therein) that it leased to St. Mary's Breast
Center, LLC, St. Mary's Medical Group, LLC, and St.
Mary's Medical Center of Evansville, Inc. (See,
e.g., Cert. Admin. R. at 13-17, 121-25, 4286-88,
4529-31, 4537.) St. Mary's Breast Center used its leased
space to operate a breast imaging and therapy center, St.
Mary's Medical Group used its leased space to operate a
primary care physician's practice, and St. Mary's
Medical Center of Evansville used its leased space to operate
both an urgent care and an imaging and laboratory center.
(See Cert. Admin. R. at 4530, 4537.) The Building
Corporation's appeal documentation stated that
"[t]he services  offered within the[se] space[s are]
in furtherance of the charitable, religious, and educational
mission of each of the [tenants]. Services are offered at a
reduced cost or free of charge depending upon the
patient's ability to pay for the services." (Cert.
Admin. R. at 4530.)
PTABOA denied the exemption applications and the Building
Corporation subsequently pursued an appeal with the Indiana
Board. (See, e.g., Cert. Admin. R. at 1-3, 109-11.)
In its appeal documentation, the Building Corporation stated
it "delivers health care services in furtherance of its
charitable, religious, and educational mission and in
accordance with its charity care policy. [Thus, its] use of
the property meets with the requirements of I.C. 6-1.1-10-16,
including, in particular, subsection (h)[.]" (See,
e.g., Cert. Admin. R. at 1-3, 109-11.) Furthermore, the
Building Corporation indicated that it was a
"wholly-owned affiliate" of the Hospital and that
each of its three tenants was "owned and operated by
[the Hospital] as [one of its] departments . . . or as
separate wholly-owned, not-for-profit 501(c)(3)
entities." (Cert. Admin. R. at 4248, 4253, 4255-56.)
February 23, 2018, after reviewing the case on the
parties' motions for summary judgment and the stipulated
record, the Indiana Board denied the Building
Corporation's exemption applications. In its final
determination, the Indiana Board "concluded as a matter
of law" that Epworth Crossing was owned, occupied, and
used by the Hospital. (See Cert. Admin. R. at
5123-24 ¶ 8, 5147 ¶ 66.) Nonetheless, it found that
Epworth Crossing did not qualify for an exemption under
Indiana Code § 6-1.1-10- 16(h) because the Building
Corporation failed to show 1) how the operations at Epworth
Crossing actually supported the Hospital's inpatient
facility or 2) that the provision of charity care and
community benefits was the predominant use of Epworth
Crossing. (See Cert. Admin. R. at 5147-51
¶¶ 66-74.) Alternatively, the Indiana Board
concluded that Epworth Crossing did not
"independently" qualify for an exemption under
Indiana Code § 6-1.1-10-16(a) because it
"operate[d] on a fee-for-service basis, with an
indeterminate impact on the poor, uninsured, or underinsured.
There is no evidence that Epworth Crossing satisfies a
particular need in the community that would otherwise be
unmet or fall to the government." (Cert. Admin. R. at
5151 ¶ 75.) The Indiana Board arrived at this
conclusion, in part, because
[the Building Corporation's] brief offer[ed] a disjointed
parade of generalizations rather than a methodic explanation
of the charity provided . . . The Board notes that
"[c]onclusory statements do not constitute probative
evidence." . . . Overall, [the Building Corporation] did
little in its brief to sift through the evidence and present
a comprehensive, or even accurate, summation of the evidence.
(Cert. Admin. R. at 5132-33 ¶ 30 (citations omitted).)
(See also, e.g., Cert. Admin. R. at 5130
¶ 24 n.7; 5131 ¶ 26 n.9; 5135 ¶ 39 n.14;
5136-37 ¶¶ 43, 45 nn.17 & 18; 5138 ¶ 47
n.19 (all indicating instances in its final determination
where the Indiana Board admonished the Building Corporation
for citing to evidence that only "vaguely"
supported its propositions, not providing evidentiary support
at all, not walking the Indiana Board through its evidence
and analysis, an overall lack of attention to detail, and
carelessness in its briefing citation).
April 9, 2018, the Building Corporation initiated this
original tax appeal. After filing the appeal, the Building
Corporation abandoned its claims for both the educational
purposes exemption and the religious purposes exemption,
pursuing only its charitable purposes exemption claim.
(See Pet'r Br. at 15; Oral Argument Tr. at 3-5.)
On March 15, 2019, the Court conducted oral argument on the
matter. Additional facts will be supplied when necessary.
party seeking to overturn an Indiana Board final
determination bears the burden of demonstrating its
invalidity. Osolo Twp. Assessor v. Elkhart Maple Lane
Assocs., 789 N.E.2d 109, 111 (Ind. Tax Ct. 2003).
Consequently, the Building Corporation must demonstrate to
the Court that the Indiana Board's final determination is
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; contrary to constitutional right,
power, privilege, or immunity; in excess of or short of
statutory jurisdiction, authority, or limitations; without
observance of procedure required by law; or unsupported by
substantial or reliable evidence. Ind. Code § 33-26-6-
Indiana, all tangible property is subject to taxation. Ind.
Code § 6-1.1-2-1 (2014). Nevertheless, the Indiana
Constitution provides that the Legislature may exempt certain
categories of property from taxation. See Ind.
Const. art X, § 1. Pursuant to that grant of authority,
the Legislature enacted Indiana Code § 6-1.1-10-16,
which pertains to property used for, among other things,
"charitable purposes." See generally Ind.
Code § 6-1.1-10-16 (2014).
Code § 6-1.1-10-16(a)
Indiana Code § 6-1.1-10-16(a), "[a]ll or part of a
building is exempt from property taxation if it is owned,
occupied, and used [ ] for . . . charitable purposes."
I.C. § 6-1.1-10-16(a). This exemption also generally
extends to the land on which an exempt building is situated,
as well as the ...