Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision

[This opinion has been published in Ohio Official Reports at 87 Ohio St.3d 363.]

CINCINNATI SCHOOL DISTRICT BOARD OF EDUCATION, APPELLANT, v.

HAMILTON COUNTY BOARD OF REVISION ET AL., APPELLEES.

[Cite as Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision,

2000-Ohio-452.]

Taxation–Real property valuation–Board of revision does not have authority to

vacate a void decision after the appeal time has expired.

(No. 99-82–Submitted June 23, 1999–Decided January 5, 2000.)

APPEAL from the Board of Tax Appeals, No. 98-J-481.

__________________

{¶ 1} On March 27, 1996, appellee Candlewood, Ltd. received title to the

real property at issue in a two-step transaction. In step one, the property was

transferred from Andrew J. Green, trustee, to Steven R. Smith, trustee. The

conveyance fee statement filed with the Green-Smith transaction set forth a total

consideration of $1,250,000. On the same day, in step two, the property was

transferred from Steven R. Smith, trustee, to Candlewood. Candlewood filed a

statement claiming that the transfer to it was exempt from the real property

conveyance fee.

{¶ 2} On April 18, 1996, Candlewood recorded a mortgage on its property

to Anthony M. Sansalone, trustee, in the amount of $55,000. When the mortgage

to Sansalone was recorded, a conveyance fee form erroneously was filed with the

auditor’s office showing a transfer from Candlewood to Sansalone for a

consideration of $55,000.

{¶ 3} On March 26, 1997, the Cincinnati School District Board of

Education (“BOE”) filed a valuation complaint for tax year 1996 seeking to

increase the valuation for the property from $816,000 to $1,250,000, based on the

March 27, 1996 sale price. The complaint form was filled out showing Sansalone

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as the owner of the property. Notice of the filing of the complaint was sent to

Sansalone by the Hamilton County Board of Revision (“BOR”) on March 31, 1997.

Notice of the hearing set for July 2, 1997, was also sent to Sansalone. No notices

were sent to Candlewood by the BOR.

{¶ 4} No one appeared at the BOR’s July 2, 1997 hearing representing

either Sansalone or Candlewood. At the July 2, 1997 hearing, the BOR approved

the increase in valuation requested by the BOE. Notice of the increased valuation

was apparently sent to Sansalone on August 18, 1997, as evidenced by a certified

mail receipt signed on his behalf on August 20, 1997, that refers to the case number

and a July 2, 1997 date. No copy of the August 18, 1997 decision of the BOR is

contained in the record; however, the record does include a letter, dated February

25, 1998, addressed to Sansalone from the BOR that purports to be a final notice of

its action increasing the valuation. Nothing further concerning this letter appears

in the record. Because the parties discuss only the August 18, 1997 decision, we

will do likewise.

{¶ 5} A representative of the auditor’s office said that she became aware of

the problem concerning ownership on March 5, 1998, and faxed information to

Candlewood. Further investigation by the auditor’s office revealed that the 1996

and 1997 tax bills had been mailed to Candlewood. On March 16, 1998, a notice

was mailed to Candlewood stating that a complaint had been filed against its

property for tax year 1996. In response to the notice, Candlewood filed a

countercomplaint asking that the 1996 complaint be dismissed and alleging that the

true value of the property was $816,000. Candlewood also filed a motion with the

BOR requesting that it dismiss the BOE’s complaint and vacate its prior order.

{¶ 6} A hearing was held by the BOR on April 30, 1998. Candlewood was

represented at the hearing and a witness testified on its behalf concerning valuation

of the property. At a meeting on May 15, 1998, the BOR voted to overturn its prior

decision and to reinstate the prior valuation of $816,000. On June 1, 1998, the BOR

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sent letters to the parties giving them notice of its decision. The BOE filed a timely

notice of appeal with the Board of Tax Appeals (“BTA”).

{¶ 7} The BOE filed a motion with the BTA to vacate the decision of the

BOR for lack of jurisdiction. The BTA denied the BOE’s motion and dismissed

the appeal, finding that the BOR did not have jurisdiction to render its initial order

on August 18, 1997, increasing the property value, and ordered the auditor to list

and assess the property for tax year 1996 consistent with the BTA’s decision.

__________________

Wood & Lamping, L.L.P., and David C. DiMuzio, for appellant, Cincinnati

School District Board of Education.

Keating, Muething & Klekamp, P.L.L., Kenneth P. Kreider and Dwight A.

Packard II, for appellee Candlewood, Ltd.

__________________

Per Curiam.

{¶ 8} The BOE contends that the BTA had no authority to set aside the

BOR’s order of August 18, 1997. We agree.

{¶ 9} A timely complaint against the valuation of the property was filed by

the BOE seeking an increase in taxable value of $151,900 for tax year 1996. R.C.

5715.19(B) provides that when a complaint is filed by someone other than the

owner and the amount of the stated undervaluation is at least $17,500 the auditor is

to give notice of the complaint to the property owner. R.C. 5715.19(B) further

provides that within thirty days after receiving the notice the property owner may

file a complaint objecting to the claim of undervaluation and be made a party to the

action. R.C. 5715.19(C) also provides that the board of revision shall notify the

property owner at least ten days prior to a hearing of its time and place. In addition

to the notice requirements of R.C. 5715.19, R.C. 5715.12 provides that the board

of revision shall not increase any valuation without giving notice to the person in

whose name the property affected is listed and affording him or her the opportunity

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to be heard. Finally, when the board of revision renders its decision, R.C. 5715.20

requires that it give notice of its action by certified mail to the person in whose

name the property is listed.

{¶ 10} In this case, none of the required notices listed above was given to

Candlewood in a timely fashion either before the hearing on July 2, 1997, or the

decision of August 18, 1997.

{¶ 11} The BOE contends that the BOR’s actions were proper because the

BOE’s complaint named as property owner, and notices were given to, the person

listed as owner on the auditor’s records. A review of the various provisions of R.C.

Chapter 5715 shows that different terms are used to describe the person to whom

the required notice is to be given. R.C. 5715.19 requires notice to the “property

owner”; R.C. 5715.12 requires notice to be given “to the person in whose name the

property affected * * * is listed”; R.C. 5715.20 requires notice to “the person in

whose name the property is listed.”

{¶ 12} In State ex rel. Rolling Hills Local School Dist. Bd. of Edn. v. Brown

(1992), 63 Ohio St.3d 520, 521, 589 N.E.2d 1265, 1266, we stated, “The auditor

prepares the tax list pursuant to R.C. 319.28. On the tax list, he records, inter alia,

all the parcels in the county, the names of their owners, and the taxing district in

which each parcel is located.” R.C. 319.20 describes how the auditor shall transfer

ownership of land on the tax list: “[T]he county auditor shall transfer any land * *

* charged with taxes on the tax list, from the name in which it stands into the name

of the owner, when rendered necessary by a conveyance

* * *.” See, also, R.C. 323.17. Clearly, the auditor’s tax list is to contain the name

of the owners. It is presumed that the auditor does his or her job correctly and that

the tax list contains the correct names of the owners of the property. However, as

demonstrated by the facts in this case, when a complainant filing a complaint for

valuation of real property relies upon the auditor’s tax list he or she does so at his

or her peril. If the auditor’s tax list is not correct and a complainant files a complaint

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listing an incorrect name, then the notices given by the board of revision will be

given to the wrong persons, the notice requirement of R.C. Chapter 5715 will not

be met, and the actual owner will not receive any of the required notices.

{¶ 13} The giving of notice to a person who is incorrectly listed on the

auditor’s tax list as the owner does not meet the notice requirements of R.C. Chapter

5715. In Columbus Apartments Assoc. v. Franklin Cty. Bd. of Revision (1981), 67

Ohio St.2d 85, 89-90, 21 O.O.3d 54, 57, 423 N.E.2d 147, 150, we stated, “In that it

is the owner’s, not the school board’s, property which is the subject of the complaint

and evaluation proceeding before a board of revision, the owner is an indispensable

party to that proceeding.”

{¶ 14} The consequences of not giving notice to an indispensable party, like

the actual owner, were set forth in Lincoln Tavern, Inc. v. Snader (1956), 165 Ohio

St. 61, 64, 59 O.O. 74, 75-76, 133 N.E.2d 606, 610, where we stated, “It is

axiomatic that for a court to acquire jurisdiction there must be a proper service of

summons or an entry of appearance, and a judgment rendered without proper

service or entry of appearance is a nullity and void.” Without the required notices

being given to Candlewood, the BOR acquired no jurisdiction.

{¶ 15} Because the notices required by R.C. Chapter 5715 were not given

to Candlewood prior to the BOR’s July 2, 1997 hearing and after its August 18,

1997 decision, and no voluntary appearance was made by Candlewood, the BOR’s

August 18, 1997 decision is a nullity and void as regards Candlewood. As one

Texas appellate court so aptly stated concerning a void judgment, “[i]t is good

nowhere and bad everywhere.” Dews v. Floyd (Tex.Civ.App.1967), 413 S.W.2d

800, 804.

{¶ 16} Almost a year after the original complaint had been filed the BOR

discovered that no notices had been sent to Candlewood. In an attempt to remedy

the lack of notice, the BOR sent a letter to Candlewood on March 16, 1998,

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notifying it that a complaint had been filed by the BOE. On April 7, 1998, the BOR

notified Candlewood that a hearing was to be held on April 30, 1998.

{¶ 17} A review of the relevant statute shows that neither of the notices sent

to Candlewood by the BOR was timely. R.C. 5715.19 requires that the notice of

the filing of the complaint was to have been sent to Candlewood by April 30, 1997.

No notice of the filing of the BOR complaint was sent to Candlewood until March

16, 1998. In addition, Candlewood was never notified of the original BOR hearing

on July 2, 1997. No notice of any hearing was sent to Candlewood until April 7,

1998.

{¶ 18} R.C. 5715.20 provides that any decision of the BOR rendered on a

complaint filed under R.C. 5715.19 is to be sent to the person in whose name the

property is listed. The notice of the result of the July 2, 1997 hearing was sent out

August 18, 1997, but no copy was sent to Candlewood.

{¶ 19} R.C. 5717.01 and 5717.05 permit an appeal of a board of revision

decision to be taken either to the BTA or common pleas court within thirty days.

No appeal of the BOR’s August 18, 1997 decision was filed within thirty days.

This case presents the question whether a board of revision can vacate a void

decision after the time for appeal of the decision has expired.

{¶ 20} When it eventually was informed of the BOR’s 1997 decision,

Candlewood filed a countercomplaint on April 14, 1998, requesting that the

complaint filed by the BOE be dismissed for lack of jurisdiction. In addition

Candlewood also filed a motion requesting the BOR to dismiss the BOE complaint

and to vacate its prior order. The BOR granted Candlewood’s requests and vacated

its August 18, 1997 decision and reinstated the prior valuation.

{¶ 21} A board of revision is a creature of statute and is limited to the

powers conferred upon it by statute. Morgan Cty. Budget Comm. v. Bd. of Tax

Appeals (1963), 175 Ohio St. 225, 24 O.O.2d 340, 193 N.E.2d 145, paragraph three

of the syllabus. Steward v. Evatt (1944), 143 Ohio St. 547, 28 O.O. 472, 56 N.E.2d

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159, paragraph one of the syllabus. The authority granted to a board of revision by

R.C. 5715.01 is to “hear complaints and revise assessments of real property for

taxation.” We know of no statutory authority for a board of revision to vacate a

void decision after the appeal time has expired. Having no statutory authority to

vacate void decisions after the expiration of the appeal time, does a board of

revision have nonstatutory authority to vacate a void decision after the appeal time

has expired?

{¶ 22} In Patton v. Diemer (1988), 35 Ohio St.3d 68, 518 N.E.2d 941, the

defendant, using Civ.R. 60(B), sought to vacate a judgment that was void ab initio.

The plaintiff contended that the defendant had failed to demonstrate any of the

grounds for relief prescribed by Civ.R. 60(B). We held that the court could vacate

the judgment, stating, “The authority to vacate a void judgment is not derived from

Civ.R. 60(B) but rather constitutes an inherent power possessed by Ohio courts.”

Paragraph four of the syllabus. See, also, Staff Notes to Civ.R. 60(B). In Van

DeRyt v. Van DeRyt (1966), 6 Ohio St.2d 31, 36, 35 O.O.2d 42, 45, 215 N.E.2d

698, 704, we stated, “A court has an inherent power to vacate a void judgment

because such an order simply recognizes the fact that the judgment was always a

nullity.” The term “inherent power” used in the two preceding cases is defined in

Black’s Law Dictionary (6 Ed.1990) 782 as “[a]n authority possessed without its

being derived from another. A right, ability, or faculty of doing a thing, without

receiving that right, ability, or faculty from another.”

{¶ 23} While we have recognized the inherent power of courts to vacate

void judgments, we have recognized the inherent power of administrative boards

to reconsider their decisions only in very limited circumstances. In Hal Artz

Lincoln-Mercury, Inc. v. Ford Motor Co. (1986), 28 Ohio St.3d 20, 28 OBR 83,

502 N.E.2d 590, paragraph three of the syllabus, we held that prior to the actual

institution of an appeal or expiration of the time for appeal, administrative agencies

generally “have inherent authority to reconsider their own decisions since the power

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to decide in the first instance carries with it the power to reconsider.” See, also,

Natl. Tube Co. v. Ayres (1949), 152 Ohio St. 255, 262, 40 O.O. 312, 315, 89 N.E.2d

129, 133; Tims v. Holland Furnace Co. (1950), 152 Ohio St. 469, 40 O.O. 487, 90

N.E.2d 376; State ex rel. Borsuk v. Cleveland (1972), 28 Ohio St.2d 224, 57 O.O.2d

464, 277 N.E.2d 419. Although the BOR may have had the inherent power to

reconsider its August 18, 1997 decision before the appeal time expired, the BOR

decision vacating the August 18, 1997 decision under consideration here came after

the appeal time for the August 18, 1997 decision had expired. We find no inherent

power for a board of revision to vacate a decision, even a void decision, after the

appeal time has run. If a board of revision were to review its prior decision after

the appeal time had expired, the board would in effect be acting as a reviewing

court for its own prior decision. Only the BTA and the common pleas courts have

been granted authority under R.C. 5717.01 and 5717.05 to review board of revision

decisions, and even they can review decisions only where the appeals have been

filed in a timely manner.

{¶ 24} While the BTA had jurisdiction to review the BOR’s June 1, 1998

decision, it had no jurisdiction to review the BOR’s August 18, 1997 decision

because the thirty-day appeal time for the August 18, 1997 decision had expired.

Thus, the only issue that could be considered by the BTA was whether in its June

1, 1998 decision the BOR had authority to vacate its order of August 18, 1997. For

the reasons set forth above we find that neither the BOR nor the BTA had authority

to consider the BOR’s decision of August 18, 1997. Therefore, the BOE’s motion

to vacate the BOR’s order of June 1, 1998, should have been granted.

{¶ 25} We express no opinion on the BOE’s contention that the proper relief

for Candlewood is under R.C. 2723.01.

{¶ 26} Accordingly, for all the foregoing reasons, we find that the decision

of the BTA is unreasonable and unlawful, and it is reversed.

Decision reversed.

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MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and PFEIFER, JJ., concur.

COOK, J., concurs separately.

LUNDBERG STRATTON, J., dissents.

__________________

Cook, J., concurring.

{¶ 27} I concur with the majority’s conclusion that the failure to provide the

required notices to Candlewood deprived the BOR of jurisdiction to make its

original decision increasing the valuation of Candlewood’s property. These

procedural failures rendered the BOR’s original August 18, 1997 valuation increase

a nullity. The dissent believes that under Hal Artz Lincoln-Mercury, Inc. v. Ford

Motor Co. (1986), 28 Ohio St.3d 20, 28 OBR 83, 502 N.E.2d 590, the BOR retained

jurisdiction to set aside or reconsider this valuation since the time for appealing that

order had been tolled due to the agency’s failure to notify Candlewood of its

decision. I agree with the majority, however, that since the BOR is a creature of

statute, its authority to reconsider its decisions is limited to the powers conferred

upon it by statute. And no authority existed under R.C. Title 57 for the BOR’s

action in this case.

__________________

LUNDBERG STRATTON, J., dissenting.

{¶ 28} The majority admits that the failure to notify Candlewood of the

valuation hearing deprived the BOR of jurisdiction to consider the complaint filed

by the Cincinnati Board of Education. As a result, the majority finds that the

decision of the BOR, increasing the value of Candlewood’s property, is a nullity.

The majority recognizes that the BOR has authority to reconsider its decisions.

However, the majority then determines that the BOR had no authority to vacate this

decision, even if void, because the appeal time had run. In support of its holding,

the majority cites Hal Artz Lincoln-Mercury, Inc. v. Ford Motor Co. (1986), 28

Ohio St.3d 20, 28 OBR 83, 502 N.E.2d 590, which held:

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“Generally, administrative agencies have inherent authority to reconsider

their own decisions since the power to decide in the first instance carries with it the

power to reconsider. The agencies retain jurisdiction to set aside or otherwise

reconsider their decisions until the actual institution of a court appeal or until

expiration of the time for appeal * * *.” Id. at paragraph three of the syllabus.

{¶ 29} I disagree with the majority’s holding for the following reasons. In

an August 18, 1997, decision, the BOR increased the value of Candlewood’s

property. Candlewood had no notice of the August 18, 1997 decision until March

1998. Shortly thereafter, Candlewood filed its motion to vacate, which ultimately

persuaded the BOR to vacate its decision.

{¶ 30} The time period for appeal of an agency decision does not commence

where the agency fails to notify the appellant of its decision. Slone v. Ohio Bd. of

Embalmers & Funeral Directors (1995), 107 Ohio App.3d 628, 669 N.E.2d 288.

Failure of notice of a decision justifies tolling the appeal time. See State ex rel.

Hughes v. Celeste (1993), 67 Ohio St.3d 429, 619 N.E.2d 412.

{¶ 31} Since Candlewood never received notice of the August 18, 1997

decision of the BOR until March 1998, I believe that appeal time for that decision

should have been tolled until at least March 1998, the date that Candlewood

received notice of the decision. Thus, I believe that, even under Hal Artz Lincoln-

Mercury, the BOR retained the authority to vacate its August 18, 1997 decision

because the appeal time had not run, but rather had been tolled until the proceedings

were revisited by the BOR pursuant to Candlewood’s motion to vacate, which

ultimately led the BOR to decide to vacate its decision. Hal Artz Lincoln-Mercury,

paragraph six of the syllabus.

{¶ 32} Second, in addition to the tolling argument, I believe that the BOR

had the authority to vacate its decision regardless of whether the appeal time had

run or an appeal had been taken. Although I generally agree that Hal Artz Lincoln-

Mercury dictates that expiration of the appeal time or the filing of a notice of appeal

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terminates an agency’s jurisdiction to reconsider its decision, I believe that it does

not apply in this case. In State ex rel. B & C Machine Co. v. Indus. Comm. (1992),

65 Ohio St.3d 538, 605 N.E.2d 372, this court addressed a workers’ compensation

appeal. As a threshold matter, the court had to determine whether the filing of a

notice of appeal with the court of common pleas divested the Industrial

Commission of jurisdiction to reconsider its order. This court found that the issue

appealed to the court of common pleas came within the exclusive jurisdiction of

the Industrial Commission. Because the issue was not appealable, the court

determined that the appeal was a nullity, and thus the notice of appeal did not divest

the Industrial Commission of jurisdiction to reconsider its decision. Id. at 541, 605

N.E.2d at 375.

{¶ 33} As the majority recognizes, the decision of the BOR that increased

the value of Candlewood’s property is a “nullity and void” because Candlewood

was never notified of the action or the hearing that led to it. Applying the rationale

of B & C Machine Co., I would find that, because the August 18, 1997 order of the

BOR was a nullity, the commencement of an appeal or the running of the appeal

time should not divest the BOR of jurisdiction to vacate the order. I believe that

this reasoning comports with common sense because in reality there is no valid

decision to appeal. After all, vacating a void decision is merely a recognition that

the decision was always a nullity. Van DeRyt v. Van DeRyt (1966), 6 Ohio St.2d

31, 36, 35 O.O.2d 42, 45, 215 N.E.2d 698, 704.

{¶ 34} For all the aforementioned reasons, I would affirm the decision of

the BOR to vacate its August 18, 1997 decision increasing the value of

Candlewood’s property. Therefore, I dissent.

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