[Cite as NDHMD, Inc. v. Cuyahoga Cty. Bd. of Revision, 2012-Ohio-5508.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 98004
NDHMD, INC. PLAINTIFF-APPELLANT
vs.
CUYAHOGA COUNTY BOARD OF REVISION, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: REVERSED
Administrative Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-757502
BEFORE: Celebrezze, J., Boyle, P.J., and E. Gallagher, J.
RELEASED AND JOURNALIZED: November 29, 2012 ATTORNEY FOR APPELLANT
John P. Malone, Jr. Malone Law, L.L.C. 614 W. Superior Avenue Suite 1150 Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEES
For Cuyahoga County Board of Revision
Timothy J. McGinty Cuyahoga County Prosecutor BY: Mark R. Greenfield Assistant Prosecuting Attorney The Justice Center 1200 Ontario Street Cleveland, Ohio 44113
For Cleveland Municipal School District Board of Education
James H. Hewitt, III Hewitt Law, L.L.C. The Groh Mansion 3043 Superior Avenue Cleveland, Ohio 44114 FRANK D. CELEBREZZE, JR., J.:
{¶1} NDHMD Inc., the appellant in this case, wishes us to reverse the decision of
the Cuyahoga County Board of Revision (the “Board of Revision”), which was affirmed
by the common pleas court, adopting a valuation of $444,720 for property NDHMD
purchased at an auction of forfeited lands. NDHMD argues that the best evidence of
value is the price of $1,500 it paid at the tax forfeiture auction, while the Cleveland
Municipal School District Board of Education (the “School Board”) argues that the prior
valuation of $963,300 should be maintained. Because the Board of Revision’s
jurisdiction to review the value of the property was not properly invoked, its decision
adjusting the value of the property must be reversed and the prior value reinstated.
I. Factual and Procedural History
{¶2} The owner of a large commercial property at 7275 Wentworth Avenue,
Cleveland, Ohio, failed to pay property taxes, and Cuyahoga County initiated tax
foreclosure proceedings on April 25, 2008. Foreclosure was granted on February 17,
2009. The property was offered for sale at judicial auction on May 4, 2009, and then
again on May 18, 2009. The property did not sell and an order of forfeiture was entered
on June 19, 2009. On June 22, 2009, the property was transferred to the state of Ohio.
{¶3} The property was offered for sale at public auction on March 24, 2010,
without minimum bid restrictions that existed in the earlier foreclosure auction sales. George Dietrich submitted the winning bid of $1,500 and tendered the purchase price in
full on March 30, 2010. The next day, NDHMD, through agent George Dietrich, filed a
complaint for valuation with the Board requesting a decrease in the value of the property
for the 2009 tax year. On April 16, 2010, an auditor’s tax deed was executed and
recorded four days later, conveying title from the state to NDHMD.
{¶4} The Board of Revision conducted a hearing on April 25, 2011, where the
School Board opposed NDHMD’s valuation request and argued that NDHMD did not
acquire the property in an arm’s-length transaction. NDHMD argued the property should
be valued at $1,500, while the School Board asserted that the value should remain at
$963,300. The Board of Revision reduced the value of the property to $444,720, and
NDHMD appealed to the common pleas court. That court upheld the Board of
Revision’s decision on January 25, 2012. NDHMD then appealed to this court arguing
three assignments of error.1 However, because the Board of Revision’s jurisdiction was
not properly invoked, its decision must be reversed.
II. Law and Analysis
{¶5} To properly invoke the jurisdiction of the Board of Revision, a valuation
complaint must be filed by
[a]ny person owning taxable real property in the county or in a taxing district with territory in the county, * * * if the person is a firm, company, association, partnership, limited liability company, or corporation, an officer, a salaried employee, a partner, or a member of that person.
A statement of the assignments of error is included in the appendix to this opinion. 1 R.C. 5715.19(A)(1)(f). This court has interpreted this language to apply to ownership at
the time the complaint is filed. Public Square Tower One v. Cuyahoga Cty. Bd. of
Revision, 34 Ohio App.3d 49, 52, 516 N.E.2d 1280 (8th Dist.1986).
{¶6} The Ohio Supreme Court has come to the same conclusion. Where a party
holds only an equitable interest at the time the complaint is filed, it does not have standing
to bring a complaint for valuation. Victoria Plaza, L.L.C. v. Cuyahoga Cty. Bd. of
Revision, 86 Ohio St.3d 181, 1999-Ohio-148, 712 N.E.2d 751. The court held that
“where the term ‘owner’ is employed with reference to land or buildings, it is commonly understood to mean the person who holds the legal title.” [Bloom v. Wides, 164 Ohio St. 138, 141, 128 N.E.2d 31 (1955)]. Moreover, in State ex rel. Multiplex, Inc. v. S. Euclid (1973), 36 Ohio St.2d 167, 169-170, * * * 304 N.E.2d 906, 907-908, the court, citing Bloom, ruled that a purchaser that had not yet taken title to real property was not the owner of the property. Consequently, to be the owner of real property, the person must hold legal title to the property, not simply an equitable interest in the property.
Id. at 183.
{¶7} The Board of Revision asserts, for the first time on appeal, that NDHMD
filed its complaint when it was not the legal owner of the property it sought to have
valued and incorrectly listed itself as the owner on the form used to file its complaint.
R.C. 5715.19 requires the complaint for valuation to state the owner of the property, and
failure to properly complete the form promulgated by the Ohio Tax Commissioner may
result in a jurisdictional defect. Public Square at 51, citing Stanjim Co. v. Mahoning Cty.
Bd. of Revision, 38 Ohio St.2d 233, 235, 313 N.E.2d 14 (1974); Griffith v. Cuyahoga Cty.
Bd. of Revision, 44 Ohio St.2d 225, 227, 339 N.E.2d 817 (1975). {¶8} While this court normally will not address arguments raised for the first time
on appeal, a jurisdictional defect such as the one before us here cannot be waived and
may be raised for the first time on appeal. State ex rel. Tubbs Jones v. Suster, 84 Ohio
St.3d 70, 75, 1998-Ohio-275, 701 N.E.2d 1002. This is because, “[i]f a court acts
without jurisdiction, then any proclamation by that court is void.” Id., citing Patton v.
Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988).
{¶9} Here, NDHMD indicated on the form used to file its complaint that it was the
owner of the property even though it had not received a deed for the property. NDHMD
possessed a certificate of tax sale at the time the complaint was filed, which operated as
an agreement to transfer title, not legal title. R.C. 5309.60; Victoria Plaza at 183; Ohio
Jurisprudence 3d, Taxation, 831.
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[Cite as NDHMD, Inc. v. Cuyahoga Cty. Bd. of Revision, 2012-Ohio-5508.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 98004
NDHMD, INC. PLAINTIFF-APPELLANT
vs.
CUYAHOGA COUNTY BOARD OF REVISION, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: REVERSED
Administrative Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-757502
BEFORE: Celebrezze, J., Boyle, P.J., and E. Gallagher, J.
RELEASED AND JOURNALIZED: November 29, 2012 ATTORNEY FOR APPELLANT
John P. Malone, Jr. Malone Law, L.L.C. 614 W. Superior Avenue Suite 1150 Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEES
For Cuyahoga County Board of Revision
Timothy J. McGinty Cuyahoga County Prosecutor BY: Mark R. Greenfield Assistant Prosecuting Attorney The Justice Center 1200 Ontario Street Cleveland, Ohio 44113
For Cleveland Municipal School District Board of Education
James H. Hewitt, III Hewitt Law, L.L.C. The Groh Mansion 3043 Superior Avenue Cleveland, Ohio 44114 FRANK D. CELEBREZZE, JR., J.:
{¶1} NDHMD Inc., the appellant in this case, wishes us to reverse the decision of
the Cuyahoga County Board of Revision (the “Board of Revision”), which was affirmed
by the common pleas court, adopting a valuation of $444,720 for property NDHMD
purchased at an auction of forfeited lands. NDHMD argues that the best evidence of
value is the price of $1,500 it paid at the tax forfeiture auction, while the Cleveland
Municipal School District Board of Education (the “School Board”) argues that the prior
valuation of $963,300 should be maintained. Because the Board of Revision’s
jurisdiction to review the value of the property was not properly invoked, its decision
adjusting the value of the property must be reversed and the prior value reinstated.
I. Factual and Procedural History
{¶2} The owner of a large commercial property at 7275 Wentworth Avenue,
Cleveland, Ohio, failed to pay property taxes, and Cuyahoga County initiated tax
foreclosure proceedings on April 25, 2008. Foreclosure was granted on February 17,
2009. The property was offered for sale at judicial auction on May 4, 2009, and then
again on May 18, 2009. The property did not sell and an order of forfeiture was entered
on June 19, 2009. On June 22, 2009, the property was transferred to the state of Ohio.
{¶3} The property was offered for sale at public auction on March 24, 2010,
without minimum bid restrictions that existed in the earlier foreclosure auction sales. George Dietrich submitted the winning bid of $1,500 and tendered the purchase price in
full on March 30, 2010. The next day, NDHMD, through agent George Dietrich, filed a
complaint for valuation with the Board requesting a decrease in the value of the property
for the 2009 tax year. On April 16, 2010, an auditor’s tax deed was executed and
recorded four days later, conveying title from the state to NDHMD.
{¶4} The Board of Revision conducted a hearing on April 25, 2011, where the
School Board opposed NDHMD’s valuation request and argued that NDHMD did not
acquire the property in an arm’s-length transaction. NDHMD argued the property should
be valued at $1,500, while the School Board asserted that the value should remain at
$963,300. The Board of Revision reduced the value of the property to $444,720, and
NDHMD appealed to the common pleas court. That court upheld the Board of
Revision’s decision on January 25, 2012. NDHMD then appealed to this court arguing
three assignments of error.1 However, because the Board of Revision’s jurisdiction was
not properly invoked, its decision must be reversed.
II. Law and Analysis
{¶5} To properly invoke the jurisdiction of the Board of Revision, a valuation
complaint must be filed by
[a]ny person owning taxable real property in the county or in a taxing district with territory in the county, * * * if the person is a firm, company, association, partnership, limited liability company, or corporation, an officer, a salaried employee, a partner, or a member of that person.
A statement of the assignments of error is included in the appendix to this opinion. 1 R.C. 5715.19(A)(1)(f). This court has interpreted this language to apply to ownership at
the time the complaint is filed. Public Square Tower One v. Cuyahoga Cty. Bd. of
Revision, 34 Ohio App.3d 49, 52, 516 N.E.2d 1280 (8th Dist.1986).
{¶6} The Ohio Supreme Court has come to the same conclusion. Where a party
holds only an equitable interest at the time the complaint is filed, it does not have standing
to bring a complaint for valuation. Victoria Plaza, L.L.C. v. Cuyahoga Cty. Bd. of
Revision, 86 Ohio St.3d 181, 1999-Ohio-148, 712 N.E.2d 751. The court held that
“where the term ‘owner’ is employed with reference to land or buildings, it is commonly understood to mean the person who holds the legal title.” [Bloom v. Wides, 164 Ohio St. 138, 141, 128 N.E.2d 31 (1955)]. Moreover, in State ex rel. Multiplex, Inc. v. S. Euclid (1973), 36 Ohio St.2d 167, 169-170, * * * 304 N.E.2d 906, 907-908, the court, citing Bloom, ruled that a purchaser that had not yet taken title to real property was not the owner of the property. Consequently, to be the owner of real property, the person must hold legal title to the property, not simply an equitable interest in the property.
Id. at 183.
{¶7} The Board of Revision asserts, for the first time on appeal, that NDHMD
filed its complaint when it was not the legal owner of the property it sought to have
valued and incorrectly listed itself as the owner on the form used to file its complaint.
R.C. 5715.19 requires the complaint for valuation to state the owner of the property, and
failure to properly complete the form promulgated by the Ohio Tax Commissioner may
result in a jurisdictional defect. Public Square at 51, citing Stanjim Co. v. Mahoning Cty.
Bd. of Revision, 38 Ohio St.2d 233, 235, 313 N.E.2d 14 (1974); Griffith v. Cuyahoga Cty.
Bd. of Revision, 44 Ohio St.2d 225, 227, 339 N.E.2d 817 (1975). {¶8} While this court normally will not address arguments raised for the first time
on appeal, a jurisdictional defect such as the one before us here cannot be waived and
may be raised for the first time on appeal. State ex rel. Tubbs Jones v. Suster, 84 Ohio
St.3d 70, 75, 1998-Ohio-275, 701 N.E.2d 1002. This is because, “[i]f a court acts
without jurisdiction, then any proclamation by that court is void.” Id., citing Patton v.
Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988).
{¶9} Here, NDHMD indicated on the form used to file its complaint that it was the
owner of the property even though it had not received a deed for the property. NDHMD
possessed a certificate of tax sale at the time the complaint was filed, which operated as
an agreement to transfer title, not legal title. R.C. 5309.60; Victoria Plaza at 183; Ohio
Jurisprudence 3d, Taxation, 831. NDHMD possessed an equitable interest, but not a
legal one in the property. Title is not passed until a conveyance occurs. That occurred
when a tax deed was generated and provided to the purchaser or registered with the
county recorder. R.C. 5309.60; Ohio Jurisprudence 3d, Taxation, 831. Here, the tax
deed was not executed until April 16, 2010, several days after NDHMD filed its
complaint for valuation.
{¶10} Therefore, at the time the complaint was filed, NDHMD was not the owner
of the property as contemplated by R.C. 5715.19. This statute requires the party filing a
valuation complaint to own the property or other taxable property in the district. Soc.
Natl. Bank v. Wood Cty. Bd. of Revision, 81 Ohio St.3d 401, 1998-Ohio-436, 692 N.E.2d
148; R.C. 5715.19 and 5715.13. NDHMD satisfies neither requirement. Accordingly, the Board of Revision did not have jurisdiction to entertain NDHMD’s complaint. The
Board of Revision, at oral arguments, indicated that NDHMD may file a new complaint
citing a change of ownership as grounds for filing successive complaints within the same
triannium.
III. Conclusion
{¶11} NDHMD was not the legal owner of the property at the time it filed its
complaint for valuation because it did not possess legal title. Payment of the purchase
price or execution of a contract for sale creates a beneficial interest in the property, but
not legal title. Legal title requires conveyance, generally evidenced by the furnishing of
a deed. Here, the only evidence is that the deed was executed on April 16, 2011, 15 days
after NDHMD filed its complaint for valuation. Therefore, the original valuation of
$963,300 must be reinstated by the Board of Revision.
{¶12} Judgment reversed.
It is ordered that appellees recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., JUDGE MARY J. BOYLE, P.J., and EILEEN A. GALLAGHER, J., CONCUR APPENDIX
Appellant’s assignments of error:
I. The Court of Common Pleas erred when it affirmed the valuation of the Cuyahoga County Board of Revision because the Board and the Court failed to find, based on the evidence of an arm’s length voluntary auction sale, the current value of Cuyahoga County permanent parcel #006-28-096 to be $1,500.00.
II. The Court of Common Pleas erred when it affirmed the valuation of the Cuyahoga County Board of Revision because the Board’s decision was not supported by the evidence.