[Cite as State ex rel. Mansfield Motorsports Speedway, L.L.C., v. Dropsey, 2012-Ohio-968.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
STATE OF OHIO, EX REL. JUDGES:
MANSFIELD MOTORSPORTS Hon. Patricia A. Delaney, P.J.
SPEEDWAY, LLC, ET AL. Hon. Sheila G. Farmer, J.
Hon. Julie A. Edwards, J.
Relators-Appellants
vs.
PATRICK W. DROPSEY, Case No. 11CA65
RICHLAND COUNTY AUDITOR, ET AL.
Respondents-Appellees OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common
Pleas, Case No. 11CV230D
JUDGMENT: Affirmed in Part
DATE OF JUDGMENT: March 7, 2012
APPEARANCES:
For Relators-Appellants For Respondents-Appellees
ROBERT A. FRANCO STEVEN M. WILDERMUTH
1007 Lexington Avenue 38 South Park Street
Mansfield, OH 44907 Mansfield, OH 44902
RYAN P. O'ROURKE
DANIEL W. FAUSEY
30 East Broad Street, 25th Floor
Columbus, OH 43215
Richland County, Case No. 11CA65 2
Farmer, J.
{¶1} From 2001 through 2004, appellant, Mansfield Motorsports Speedway,
LLC, made improvements to its real property, including improvements to an oval race
track and the building of grandstands, press boxes, concession stands, restrooms, etc.
{¶2} Upon completion of the project, appellee, the Richland County Auditor,
Patrick Dropsey, taxed the improvements as real property. In September of 2009,
appellee, the Tax Commissioner of Ohio, Joseph Testa, assessed use tax on these
same improvements.
{¶3} In July of 2010, appellee Tax Commissioner filed a use tax lien against
appellant in the amount of $676,674.31.
{¶4} On September 28, 2010, the Richland County Treasurer filed a
foreclosure complaint against appellant (Case No. 10-CV-1287D) for non-payment of
real property taxes.
{¶5} On February 17, 2011, appellant filed a complaint for declaratory judgment
and mandamus given the conflicting tax assessments. Appellees filed motions to
dismiss, claiming the trial court lacked jurisdiction as the assessment of real property
taxes and use taxes should have been appealed to the Board of Revision and the Board
of Tax Appeals, respectively. By judgment entry filed June 13, 2011, the trial court
dismissed the action, finding it lacked jurisdiction to hear the case, appellant failed to
state a claim upon which relief can be granted, appellant had or has adequate legal
remedies, and laches barred appellant's claims.
{¶6} Appellant filed an appeal and this matter is now before this court for
consideration. Assignments of error are as follows:
Richland County, Case No. 11CA65 3
I
{¶7} "THE TRIAL COURT ERRED IN CONCLUDING THAT IT LACKED
SUBJECT MATTER JURISDICTION."
II
{¶8} "THE TRIAL COURT ERRED IN CONCLUDING THAT PLAINTIFF-
RELATOR-APPELLANTS FAILED TO STATE A CLAIM UPON WHICH RELIEF CAN
BE GRANTED."
III
{¶9} "THE TRIAL COURT ERRED IN CONCLUDING THAT PLAINTIFF-
RELATOR-APPELLANTS' FAILURE TO EXHAUST STATUTORILY PRESCRIBED
ADMINISTRATIVE REMEDIES WAS A PREREQUISITE TO THE TRIAL COURT'S
JURISDICTION."
IV
{¶10} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER
PLAINTIFF-RELATOR-APPELLANTS HAD A PLAIN AND ADEQUATE REMEDY IN
THE ORDINARY COURSE OF THE LAW."
V
{¶11} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER
THE STATUTORILY PRESCRIBED ADMINISTRATIVE REMEDIES WERE EQUALLY
SERVICEABLE."
Richland County, Case No. 11CA65 4
VI
{¶12} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER IT
HAD JURISDICTION UNDER O.R.C. § 2723.01 TO ENJOIN THE COLLECTION OF
THE ILLEGAL LEVY OR COLLECTION OF TAXES."
VII
{¶13} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER IT
HAD JURISDICTION TO DECIDE WHETHER THE ASSESSMENT OF TWO
DIFFERENT, MUTUALLY EXCLUSIVE TAXES WAS CONSTITUTIONAL."
VIII
{¶14} "THE TRIAL COURT ERRED BY CONCLUDING THAT THE BOARD OF
REVISION HAD THE AUTHORITY TO DETERMINE WHAT CONSTITUTES REAL
AND PERSONAL PROPERTY UNDER O.R.C. § 5715.19."
IX
{¶15} "THE TRIAL COURT ERRED BY CONCLUDING THAT LATCHES WAS A
BAR TO CLAIMS OF PLAINTIFF-RELATOR-APPELLANTS."
{¶16} In order to address the assignments of error, it is necessary to review the
complaint filed in this case. Appellant requested declaratory judgment, seeking a
declaration that the improvements in question constituted personal property subject to a
use tax. In the alternative, appellant sought a finding that the improvements were real
property not subject to a use tax.
{¶17} Appellant also requested a writ of mandamus to order appellee Auditor to
reclassify the improvements as personal property and remove them from county real
Richland County, Case No. 11CA65 5
estate tax rolls or in the alternative, order appellee Auditor to determine if the
improvements were real or personal property.
{¶18} A constitutional challenge was not raised in the complaint. It was not
raised until appellant's reply brief to appellees' motion to dismiss and only as a
response to the failure to exhaust administrative remedies argument.
{¶19} The relative facts are set forth by the trial court in its judgment entry filed
June 13, 2011 as follows:
{¶20} "This case is a declaratory judgment action by a motorsports speedway
operator challenging the tax classification of the improvements made between 2001 and
2004, including installation and repair of a grandstand with private viewing boxes, a
ticket box office, concessions stand, restrooms, a flag stand, specialty safety fencing,
and repairs to the track surface. The plaintiff speedway operator asserts that the county
auditor had classified and taxed most of these property improvements as real property
as defined in Ohio Revised Code (R.C.) § 5701.02(A). The plaintiff speedway operator
further contends that the state tax commissioner has ruled that the same property is
business fixtures as defined in R.C. 5701.03(B). Business fixtures are tangible personal
property whose purchase is subject to use taxes - reportedly in excess of $485,000 with
penalties in this case.
{¶21} "In other words, plaintiff contends that the same property has been
classified and taxed as both real property and personal property."
{¶22} It is conceded that appellant did not challenge the 2004 determination of
appellee Auditor via R.C. 5715.19 nor did appellant pursue or challenge the 2009
Richland County, Case No. 11CA65 6
determination of appellee Tax Commissioner that the improvements constituted
personal property.
{¶23} With these uncontested facts, we will address the assignments of error.
I, II, III
{¶24} Appellant claims the trial court erred in granting appellees' motion to
dismiss the declaratory judgment action for lack of subject matter jurisdiction, failure to
state a claim upon which relief can be granted, and failure to exhaust administrative
remedies as a prerequisite to jurisdiction.
{¶25} As stated supra, none of the statutory administrative procedures to
challenge the tax assessments were exhausted. In Dworning v. Euclid, 119 Ohio St.3d
83, 2008-Ohio-3318, ¶9, the Supreme Court of Ohio explained the following:
{¶26} "It is a well-established principle of Ohio law that a party seeking relief
from an administrative decision must pursue available administrative remedies before
pursuing action in a court. Noernberg v. Brook Park (1980), 63 Ohio St.2d 26, 29, 17
O.O.3d 16, 406 N.E.2d 1095, citing State ex rel. Lieux v. Westlake (1951), 154 Ohio St.
412, 43 O.O. 343, 96 N.E.2d 414. We have stated, ' "Exhaustion is generally required
as a matter of preventing premature interference with agency processes, so that the
agency may function efficiently and so that it may have an opportunity to correct its own
errors, to afford the parties and the courts the benefit of its experience and expertise,
and to compile a record which is adequate for judicial review." Weinberger v. Salfi
(1975), 422 U.S. 749, 765, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522. The purpose of the
doctrine "***is to permit an administrative agency to apply its special expertise***in
developing a factual record without premature judicial intervention." Southern Ohio
Richland County, Case No. 11CA65 7
Coal Co. v. Donovan (C.A.6, 1985), 774 F.2d 693, 702. The judicial deference afforded
administrative agencies is to "***'prepare the way, if the litigation should take its ultimate
course, for a more informed and precise determination by the Court***.' " Ricci v.
Chicago Mercantile Exchange (1973), 409 U.S. 289, 306, 93 S.Ct. 573, 582, 34 L.Ed.2d
525.' Nemazee v. Mt. Sinai Med. Ctr. (1990), 56 Ohio St.3d 109, 111-112, 564 N.E.2d
477."
{¶27} In State ex rel. Albright v. Court of Common Pleas of Delaware County
(1991), 60 Ohio St.3d 40, 42, the Supreme Court of Ohio determined a declaratory
judgment action is not appropriate "where special statutory procedures would be
bypassed."
{¶28} R.C. 5717.02 governs complaints involving tax assessments by the tax
commissioner and states the following in pertinent part:
{¶29} "Except as otherwise provided by law, appeals from final determinations
by the tax commissioner of any preliminary, amended, or final tax assessments,
reassessments, valuations, determinations, findings, computations, or orders made by
the commissioner may be taken to the board of tax appeals by the taxpayer, by the
person to whom notice of the tax assessment, reassessment, valuation, determination,
finding, computation, or order by the commissioner is required by law to be given***.
{¶30} "Such appeals shall be taken by the filing of a notice of appeal with the
board, and with the tax commissioner if the tax commissioner's action is the subject of
the appeal,***. The notice of appeal shall be filed within sixty days after service of the
notice of the tax assessment, reassessment, valuation, determination, finding,
computation, or order by the commissioner or redetermination by the director has been
Richland County, Case No. 11CA65 8
given as provided in section 5703.37, 5709.64, 5709.66, or 5733.42 of the Revised
Code."
{¶31} R.C. 5715.19 governs complaints involving tax assessments by the county
auditor. Subsection (A)(1) states the following in pertinent part:
{¶32} "(1) Subject to division (A)(2) of this section, a complaint against any of the
following determinations for the current tax year shall be filed with the county auditor on
or before the thirty-first day of March of the ensuing tax year or the date of closing of the
collection for the first half of real and public utility property taxes for the current tax year,
whichever is later[.]***
{¶33} "***The county auditor shall present to the county board of revision all
complaints filed with the auditor."
{¶34} Appellant argues it is not within the purview of the county auditor/board of
revision to determine whether the improvements to be taxed are real or personal
property. However, in Polaris Amphitheater Concerts, Inc. vs. Delaware County Board
of Revision, 118 Ohio St.3d 330, 2008-Ohio-2454, ¶17, the Supreme Court of Ohio
found the determination was in fact within their power:
{¶35} "Although the BTA's finding of total value was supported by the BOE's
appraisal, its allocation of value to land was not. The allocation of value between land
and improvements does not constitute an arbitrary exercise; it relates to the basic
method by which county auditors determine value. The Tax Commissioner's
administrative rules direct the county auditors to arrive at total value by separately
valuing the land and improvements. See Ohio Adm.Code 5703–25–07(B). The
Richland County, Case No. 11CA65 9
commissioner also prescribes two different rules for land valuation and the valuation of
improvements. Ohio Adm.Code 5703–25–07(C), 5703–25–11, and 5703–25–12."
{¶36} We therefore conclude a declaratory judgment action was not the
appropriate vehicle to challenge the determinations of appellee Auditor and appellee
Tax Commissioner on the taxation of the improvements.
{¶37} Upon review, we conclude the trial court was correct in granting the
dismissal of the declaratory judgment action.
{¶38} Assignments of Error I, II, and III are denied.
IV, V
{¶39} Appellant claims the trial court erred in granting appellees' motion to
dismiss the mandamus action.
{¶40} In order to be entitled to the issuance of a writ of mandamus, appellant
must demonstrate 1) that appellant has a clear legal right to the relief prayed for; 2) that
respondents are under a clear legal duty to perform the acts; and 3) that appellant has
no plain and adequate remedy in the ordinary course of the law. State ex rel. Harris v.
Rhodes (1978), 54 Ohio St.2d 41, 42, citing State ex rel. National City Bank v. Board of
Education (1977), 52 Ohio St.2d 81. The function of a writ of mandamus is to compel
the performance of a present existing legal duty which is in default. State ex rel. Willis
v. Sheboy (1983), 6 Ohio St.3d 167. Mandamus contemplates the performance of an
act which is incumbent upon the respondent by clear legal order or statutory or
constitutional obligation to perform. Id.
Richland County, Case No. 11CA65 10
{¶41} Appellant requested a writ of mandamus to force appellee Auditor to
determine that the improvements were personal or in the alternative, to make a
determination on whether the improvements were real or personal.
{¶42} As a result of appellant's failure to challenge the determination of the
improvements as real property, the property has been assessed since 2004 as real
property. Also, as a result of appellant's failure to challenge the 2009 determination of
the improvements as personal property, the improvements have been double taxed
since 2009 as both real and personal. Appellant is clearly the "architect of its own
demise."
{¶43} Appellees readily admit the imposition of both taxes is not correct, but
argue because appellant failed to challenge either decision, it has given up its adequate
remedy at law. Appellant naturally decries that this is not a just imposition of taxes and
someone has to rectify the problem.
{¶44} First, with each new tax bill from the county auditor, appellant can
challenge and bring the issue to the auditor's attention via the board of revision and
request a determination on the improvements' real nature. Therefore, going forward
since 2009, twice each year appellant has an adequate remedy at law.
{¶45} What remains unsolved is the imposition of both taxes from 2009 to date.
The unchallenged determinations from 2004 to 2009 are proper tax assessments
because of appellant's failure to challenge them. Further, a foreclosure action by the
County Treasurer is pending and summary judgment has been granted to the treasurer
for back taxes. Therefore, there is a clear avenue to contest appellee Tax
Richland County, Case No. 11CA65 11
Commissioner's levy of personal property tax as invalid given the trial court's
determination of the validity of appellee Auditor's tax assessment.
{¶46} Upon review, we find there exist adequate remedies at law to resolve the
issue; therefore, we find the trial court was correct in determining a writ of mandamus
did not lie.
{¶47} Assignments of Error IV and V are denied.
VI, VII, VIII
{¶48} These assignments raise issues not presented as claims in the complaint.
First, appellant argues R.C. 2723.01 empowers the trial court to enjoin the illegal levy or
collection of taxes and secondly, appellant argues the assessment of both a personal
property tax and a real property tax is unconstitutional.
{¶49} Appellant cannot raise new issues on appeal that were not raised in its
complaint. Gentile v. Ristas, 160 Ohio App.3d 765, 2005–Ohio–2197, ¶74; Budd v.
Kinkela, Franklin App. No. 01AP-1478, 2002-Ohio-4311, ¶17; State v. Awan (1986), 22
Ohio St.3d 120.
{¶50} We find the Polaris case cited supra to be controlling. The Polaris court
has determined the county auditor may make the determination relative to real and
personal property pursuant to the administrative review of R.C. 5715.19.
{¶51} Assignments of Error VI, VII, and VIII are denied.
IX
{¶52} Appellant claims the trial court erred in determining the doctrine of laches
barred its claims.
Richland County, Case No. 11CA65 12
{¶53} Based upon our decisions in Assignments of Error IV and V, there still
remain remedies available where laches may not lie.
{¶54} Assignment of Error IX is granted.
{¶55} The judgment of the Court of Common Pleas of Richland County, Ohio is
hereby affirmed in part.
By Farmer, J.
Delaney, P.J. concur and
Edwards, J. dissents.
s/ Sheila G. Farmer_______________
s/ Patricia A. Delaney_____________
_______________________________
JUDGES
SGF/sg 112
Richland County, Case No. 11CA65 13
EDWARDS, J., DISSENTING OPINION
{¶56} I disagree with the majority’s determination that there is an adequate
remedy of law for appellant as to the imposition of both taxes from 2009 to date. The
majority states “…a foreclosure action by the County Treasurer is pending and
summary judgment has been granted to the treasurer for back taxes. Therefore, there is
a clear avenue to contest appellee Tax Commissioner’s levy of personal property tax as
invalid given the trial court’s determination of the validity of appellee Auditor’s tax
assessment.”
{¶57} This “remedy” appears to place the trial court in the same position it was in
when asked to issue a declaratory judgment and writ of mandamus. It must determine
which assessment is correct or valid. Once again, the trial court will say, both are valid
because appellant failed to exhaust his administrative appeals of these tax decisions.
{¶58} Therefore, I would reverse and remand this case to the trial court on the
issues of declaratory judgment and writ of mandamus as to the time periods when
double taxation has occurred. While I agree that the appellant has failed to challenge
the tax assessments in a timely manner and that generally he should just have to
accept the consequences, this situation is different.
Richland County, Case No. 11CA65 14
It is different because of the fundamental injustice of being taxed twice by the
government when one entity of government has determined that certain property should
be taxed as real estate and another entity of government has determined the property
should be taxed as personal property.
___________________________________
Judge Julie A. Edwards
[Cite as State ex rel. Mansfield Motorsports Speedway, L.L.C., v. Dropsey, 2012-Ohio-968.]
IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
STATE OF OHIO, EX REL. :
MANSFIELD MOTORSPORTS :
SPEEDWAY, LLC, ET AL. :
:
Relators-Appellants :
:
-vs- : JUDGMENT ENTRY
:
PATRICK W. DROPSEY, :
RICHLAND COUNTY AUDITOR, ET AL. :
:
Respondents-Appellees : CASE NO. 11CA65
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Richland County, Ohio is affirmed in part.
Costs to appellant.
s/ Sheila G. Farmer_______________
s/ Patricia A. Delaney_____________
_______________________________
JUDGES