Groveport Madison Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion)

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as

Groveport Madison Local Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, Slip Opinion No.

2017-Ohio-1428.]

NOTICE

This slip opinion is subject to formal revision before it is published in an

advance sheet of the Ohio Official Reports. Readers are requested to

promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65

South Front Street, Columbus, Ohio 43215, of any typographical or other

formal errors in the opinion, in order that corrections may be made before

the opinion is published.

SLIP OPINION NO. 2017-OHIO-1428

GROVEPORT MADISON LOCAL SCHOOLS BOARD OF EDUCATION, APPELLEE, v.

FRANKLIN COUNTY BOARD OF REVISION ET AL., APPELLEES; NSCO

INTERNATIONAL INVESTMENT, L.L.C., APPELLANT.

[Until this opinion appears in the Ohio Official Reports advance sheets, it

may be cited as Groveport Madison Local Schools Bd. of Edn. v. Franklin Cty.

Bd. of Revision, Slip Opinion No. 2017-Ohio-1428.]

BTA lacks jurisdiction to vacate a decision, even a void decision, after the time to

appeal that decision has passed—Sending copy of Board of Tax Appeals’

decision to property owner’s tax mailing address was reasonably

calculated to give notice of decision to owner—Board of Tax Appeals’

decision affirmed.

(No. 2015-0078—Submitted February 7, 2017—Decided April 20, 2017.)

APPEAL from the Board of Tax Appeals, No. 2011-K-3704.

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SUPREME COURT OF OHIO

Per Curiam.

{¶ 1} This case involves procedural irregularities following an appeal of the

valuation of an apartment complex. In March 2007, after a complaint by the

property owner, the Franklin County Board of Revision (“BOR”) reduced the

subject property’s tax-year-2005 value by $936,600. In October 2011—more than

four years later—appellee Groveport Madison Local Schools Board of Education

(“BOE”) appealed to the Board of Tax Appeals (“BTA”). The substantial delay

resulted from the BOR’s failure to certify its decision to the BOE. No party

opposed the appeal, and the BTA reinstated the auditor’s original valuation in May

2012.

{¶ 2} Meanwhile, appellant, NSCO International Investment, L.L.C.,

acquired the property in 2009—after the BOR decision but before the BTA appeal.

NSCO contends that it did not receive notice of the BTA appeal even though it

owned the property at the time the appeal was perfected. According to NSCO, it

first learned of the BTA proceedings in 2014—two years after the BTA decision—

when it was told it owed more than $112,000 for tax year 2005. In response, NSCO

asked the BTA to vacate its decision and schedule a new hearing because it had not

been given notice or an opportunity to be heard. The BTA’s decision denying

NSCO’s motion to vacate is at issue in this appeal.

Facts and Procedural History

{¶ 3} Columbus Properties, L.P., I, the former owner of the subject

property, filed a valuation complaint in March 2006 seeking to reduce the

property’s tax-year-2005 value from $3,150,000 to $1,800,000. The BOE filed a

countercomplaint to retain the auditor’s valuation. After a hearing, the BOR

lowered the value to $2,213,400. Although the BOR certified its decision to

Columbus Properties and to Columbus Properties’ successor in interest, Six

Ventures, Ltd., on March 1, 2007, it failed to send that notice to the BOE at the

time, as required by R.C. 5715.20. According to NSCO, when no appeal was filed

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within 30 days of the decision, a refund was issued to a prior owner and the case

was closed. NSCO acquired the property in November 2009.

{¶ 4} Although the record is not entirely clear, it appears that the BOE’s

counsel contacted the BOR in October 2011 inquiring about the status of the case.

According to the BOE, it first learned of the BOR’s March 2007 decision on

October 5, 2011, when its counsel received a copy of the decision by e-mail. The

BOE appealed to the BTA on October 28, 2011, citing its lack of notice and the

October 5 e-mail as the reason for its delay. The notice of appeal identified NSCO

as the owner and listed NSCO’s address as “Cooper State Bank, 5811 Sawmill Rd.,

Dublin, OH 43017.” According to the parties, Cooper State Bank held a mortgage

on the property and served as NSCO’s tax escrow agent. NSCO does not dispute

that it designated the Cooper State Bank address as its tax mailing address.

{¶ 5} Although the notice of appeal recognized NSCO as the owner, the

BOR made no effort to notify NSCO of the appeal. Instead, in November 2011,

the BOR sent written notice to the former property owner, Columbus Properties,

indicating that the matter had been appealed to the BTA. The notice purported to

comply with R.C. 5717.01 and was addressed to Columbus Properties in care of

attorney Carl Rechner.

{¶ 6} During the BTA proceedings, the BOE and the BTA, for the most

part, treated Columbus Properties as the sole party with an adverse interest in the

appeal, even though NSCO owned the property at the time. The first attempt to

notify NSCO of the ongoing appeal occurred when the BOE served its BTA merit

brief on NSCO on March 19, 2012. The BOE mailed its brief to NSCO in care of

Cooper State Bank at the Sawmill Road address. The body of the brief did not

mention NSCO and suggested that Columbus Properties still owned the property.

{¶ 7} The BTA issued its decision on May 22, 2012, finding that the BOE’s

appeal was timely and that the BOR’s decision decreasing the valuation of the

property was not supported by sufficient evidence. The BTA reinstated the

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SUPREME COURT OF OHIO

auditor’s valuation. The first page of the decision lists NSCO as an appellee, notes

that no one appeared on NSCO’s behalf, and indicates that the BTA sent a copy of

its decision to NSCO in care of Cooper State Bank at the Sawmill Road address.

{¶ 8} NSCO does not dispute that the BTA sent a copy of the decision to

the tax mailing address in May 2012. But it says that it did not receive a copy of

the decision in 2012 and that it was not aware of the decision until 2014, when it

learned of a tax obligation for tax year 2005, which, with penalty and interest,

exceeded $112,000. Around that time, the clerk of the BOR acknowledged in an

e-mail to NSCO that “our office never provided [NSCO] with a copy of [the BOE’s]

Notice of Appeal so [NSCO was] not aware any of this [i.e., the appeal] happened.”

{¶ 9} NSCO moved the BTA to vacate its decision, arguing that it is a

nullity because the BTA lacked jurisdiction. The BTA denied the motion to vacate,

and NSCO appealed.

Analysis

{¶ 10} NSCO presents three propositions of law arguing that it had a

statutory and constitutional right, as the current property owner, to be notified of

the BTA appeal. It argues that because it did not receive notice, the BTA did not

have jurisdiction to render a decision and its decision therefore must be vacated.

The BOE’s primary response is that we need not consider NSCO’s propositions of

law because the BTA lacked jurisdiction to vacate its decision. We agree with the

BOE.

The BTA lacks jurisdiction to vacate a decision—even a void decision—after the

time to appeal that decision has passed

{¶ 11} NSCO argues that the BTA had jurisdiction to vacate the 2012

decision because, if its propositions of law are correct, the decision was void ab

initio. NSCO argues, in essence, that the BTA never loses the ability to vacate a

decision it lacked jurisdiction to render. Our precedent instructs otherwise.

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January Term, 2017

{¶ 12} Significantly, an administrative tribunal like the BTA does not

possess the same powers as a court. “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.” Van DeRyt v. Van DeRyt, 6 Ohio St.2d 31, 36, 215 N.E.2d

698 (1966). Because a court’s power to vacate a void judgment is inherent, there

is no deadline for it to exercise that power. See id. A statutorily created

administrative tribunal like the BTA, in contrast, lacks inherent authority to vacate

a void decision in perpetuity. We have explained that, unlike courts, administrative

tribunals have authority to reconsider their decisions “only in very limited

circumstances.” Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of

Revision, 87 Ohio St.3d 363, 368, 721 N.E.2d 40 (2000). In Cincinnati School

Dist., we held that a board of revision does not have inherent power “to vacate a

decision, even a void decision, after the appeal time has run.” Id.

{¶ 13} The same principle applies to the BTA. In 1495 Jaeger, L.L.C. v.

Cuyahoga Cty. Bd. of Revision, 132 Ohio St.3d 222, 2012-Ohio-2680, 970 N.E.2d

949, we held that “the BTA loses jurisdiction to * * * vacate its decision * * * if the

appeal period expires without an appeal having been filed.” Id. at ¶ 15. See also

Natl. Tube Co. v. Ayres, 152 Ohio St. 255, 89 N.E.2d 129 (1949), paragraph one of

the syllabus (“The Board of Tax Appeals has control over its decisions until the

actual institution of an appeal or the expiration of the time for an appeal”).

{¶ 14} As explained below, the harshness of this rule is tempered by the fact

that the BTA’s failure to transmit a decision to a person entitled to notice under R.C.

5717.03(B) tolls that person’s appeal period, thereby permitting the BTA to grant a

timely motion to vacate. See MB W. Chester, L.L.C. v. Butler Cty. Bd. of Revision,

126 Ohio St.3d 430, 2010-Ohio-3781, 934 N.E.2d 928, ¶ 24. But the general rule—

that a statutorily created tribunal loses the power to vacate a void decision once the

time to appeal has passed—remains good law.

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SUPREME COURT OF OHIO

The BTA complied with R.C. 5717.03(B) by sending the decision

to NSCO’s tax mailing address

{¶ 15} R.C. 5717.04 requires a party to appeal a BTA decision within 30

days of its entry. In MB W. Chester, we explained that this period is tolled for a

person to whom the BTA did not give the notice required by R.C. 5717.03(B). Id.

at ¶ 24. R.C. 5717.03(B) provides:

In case of an appeal from a decision of a county board of revision,

* * * the board of tax appeals’ decision and the date when it was

filed with the secretary for journalization shall be sent by the board

to all persons who were parties to the appeal before the board, to the

person in whose name the property is listed, or sought to be listed,

if such person is not a party to the appeal, to the county auditor of

the county in which the property involved in the appeal is located,

and to the tax commissioner.

Because NSCO was “the person in whose name the property [was] listed” at the

time the BTA entered its decision, the BTA was required to send its decision to

NSCO. Under our holding in MB W. Chester, if the BTA failed to do so, then

NSCO’s appeal period never began and the BTA retained the power to vacate its

decision.

{¶ 16} The BOE contends that the BTA satisfied its duty by sending a copy

of its decision to NSCO’s tax mailing address. Although NSCO asserts that it did

not have actual notice of the decision until July 2014, it does not dispute that the

BTA sent the decision to “NSCO International Investment, LLC” at Cooper State

Bank’s address in May 2012 or that it designated that address as its tax mailing

address. And the BTA, in its decision denying NSCO’s motion to vacate,

represented that it had, in fact, sent the decision to the tax mailing address. The

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January Term, 2017

issue, therefore, is whether notice to the tax mailing address satisfied R.C.

5717.03(B).

{¶ 17} Because R.C. 5717.03(B) itself does not specify what address ought

to be used, “the constitutional due process principle supplies the rule: the owner

may be served at an address that is reasonably calculated to give notice to the

owner.” Knickerbocker Properties, Inc. XLII v. Delaware Cty. Bd. of Revision, 119

Ohio St.3d 233, 2008-Ohio-3192, 893 N.E.2d 457, ¶ 17. Service by the BTA to an

owner’s tax mailing address ordinarily will satisfy that standard, because the owner

designates that address to the auditor at the time of transfer (R.C. 319.20) and has

a duty to notify the county treasurer of any changes (R.C. 323.13). See also

Disciplinary Counsel v. Taylor, 120 Ohio St.3d 366, 2008-Ohio-6202, 899 N.E.2d

955, ¶ 13 (stating that the tax mailing address associated with a parcel of real

property “serve[s] to furnish county officials and the public with the designated

address at which the property owner or the owner’s agent would receive notice of

tax assessments and other related filings”). “In situations where a taxpayer supplies

officials with an address, it may be fairly presumed that the taxpayer can be reached

at such address.” In re Foreclosure of Liens for Delinquent Taxes, 62 Ohio St.2d

333, 337-338, 405 N.E.2d 1030 (1980).

{¶ 18} This general rule is not without exception. For example, when a

state actor responsible for providing a tax-related notice has actual knowledge of a

different, better address, notice to the tax mailing address would not be

“ ‘reasonably calculated’ to reach the taxpayer.” Id. at 338, quoting Mullane v.

Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865

(1950). Similarly, the state does not comply with due process when it sends notice

to a former owner’s tax address, Knickerbocker at ¶ 18, or when, after timely

learning that attempted certified service has failed, it fails to take further reasonable

steps to provide notice, Jones v. Flowers, 547 U.S. 220, 229-230, 126 S.Ct. 1708,

164 L.Ed.2d 415 (2006).

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SUPREME COURT OF OHIO

{¶ 19} But these exceptions do not apply to the BTA’s service of its

decision on NSCO. Unlike in Foreclosure of Liens, there is no evidence here that

the BTA had actual knowledge of a different address. And contrary to what NSCO

argues, no law required the BTA to search for another viable address when NSCO

already had provided an address for tax purposes. Although it may be true that the

address of NSCO’s statutory agent was available through the secretary of state,

R.C. 323.13 places the burden on the property owner to maintain an up-to-date tax

mailing address. See Cincinnati v. York Rite Bldg. Assn., 164 Ohio App.3d 591,

2005-Ohio-6771, 843 N.E.2d 250, ¶ 14 (1st Dist.). Imposing a burden on the BTA

to locate an alternative address would tend to reverse that statutory burden. And

under R.C. 1705.06(H)(1) and (J), service on a limited-liability company “may” be

obtained through service on its statutory agent or by “any other manner permitted

by law.” See Downey v. 610 Morrison Rd., L.L.C., 10th Dist. Franklin No. 07AP-

903, 2008-Ohio-3524, ¶ 41. Because a permissible service address was already

available and used, the BTA was not required to serve NSCO’s statutory agent.

{¶ 20} Nor is this case like Knickerbocker or Flowers, in which state actors

had reason to know that the addresses used were no longer valid or that service had

not been effected. There is no evidence here that the decision was returned as

undeliverable, and no evidence suggests that the BTA had a reasonable way of

knowing that the bank would not forward the decision to NSCO. Although NSCO

argues that “[t]he mortgage company is not an agent of the owner” and had no

“legal obligation to notify the owner of the BTA’s decision,” without evidence

concerning the contractual relationship between NSCO and Cooper State Bank, we

have no way of knowing whether these allegations are true. And more importantly,

even if they are true, there is no evidence that the BTA had that knowledge. Under

these circumstances, NSCO’s claim that it did not actually receive a copy of the

decision is of little import because “the constitutionality of a particular procedure

for notice is assessed ex ante, rather than post hoc.” Flowers at 231.

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January Term, 2017

The BTA lacked authority to vacate its decision

{¶ 21} Given the absence of actual notice to the BTA that NSCO’s tax

mailing address was invalid or that a different address should have been used, we

hold that the BTA’s notice was “reasonably calculated, under all the circumstances,

to apprise” NSCO of the May 22, 2012 decision under R.C. 5717.03(B). See

Mullane, 339 U.S. at 314, 70 S.Ct. 652, 94 L.Ed. 865. Because the BTA satisfied

R.C. 5717.03(B), the time to appeal ended 30 days after May 22, 2012. The BTA

lacked jurisdiction to vacate its decision after that time.

Conclusion

{¶ 22} We affirm the BTA’s denial of NSCO’s motion to vacate, although

for a different reason. Based on this conclusion, it is unnecessary for us to address

NSCO’s propositions of law.

Decision affirmed.

O’CONNOR, C.J., and KENNEDY, FRENCH, O’NEILL, FISCHER, and DEWINE,

JJ., concur.

O’DONNELL, J., dissents and would reverse the decision of the Board of Tax

Appeals.

_________________

Rich & Gillis Law Group, L.L.C., Mark Gillis, and Kimberly G. Allison,

for appellee Groveport Madison Local Schools Board of Education.

Vorys, Sater, Seymour & Pease, L.L.P., Nicholas M.J. Ray, and Steven L.

Smiseck, for appellant.

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