Opinion
No. 28271
08-23-2019
Carolyn RICE, as Treasurer of Montgomery County, Ohio, Plaintiff-Appellee v. ISLAMIC CENTER OF PEACE, INC., et al., Defendant-Appellant
MATHIAS H. HECK, JR., by MICHELE D. PHIPPS, Atty. Reg. No. 0069829, Assistant Prosecuting Attorney, Montgomery County Prosecutor's Office, Appellate Division, Montgomery County Courts Building, 301 West Third Street, Dayton, Ohio 45422, Attorney for Plaintiff-Appellee. WORRELL A. REID, Atty. Reg. No. 0059620, 6718 Loop Road, #2, Dayton, Ohio 45459, Attorney for Defendant-Appellant.
MATHIAS H. HECK, JR., by MICHELE D. PHIPPS, Atty. Reg. No. 0069829, Assistant Prosecuting Attorney, Montgomery County Prosecutor's Office, Appellate Division, Montgomery County Courts Building, 301 West Third Street, Dayton, Ohio 45422, Attorney for Plaintiff-Appellee.
WORRELL A. REID, Atty. Reg. No. 0059620, 6718 Loop Road, #2, Dayton, Ohio 45459, Attorney for Defendant-Appellant.
OPINION
TUCKER, J.
{¶ 1} Defendant-appellant, the Islamic Center of Peace (the "Center"), appeals from the trial court's final order of January 14, 2019, in which the court entered summary judgment in favor of Plaintiff-appellee, the Treasurer of Montgomery County (the "Treasurer"), and issued a decree of foreclosure against parcels of real property owned by the Center. Raising three assignments of error, the Center argues that the trial court's judgment should be reversed because the foreclosure proceedings violated its right to due process; because its real property was not encumbered by a valid tax debt; and because the court, in effect, resolved genuinely disputed questions of material fact, contrary to the mandate of Civ.R. 56. For the following reasons, we find that the Center's arguments lack merit, and therefore, the trial court's judgment of January 14, 2019, is affirmed.
I. Facts and Procedural History
{¶ 2} This case apparently began with the submission of an application pursuant to the Treasurer's "Depositor Foreclosure Program." See Appellant's Brief iv-vii; Appellee's Brief 4-5. As the Center describes the program, "a private [person] pays a deposit to the [Montgomery] [C]ounty [T]reasurer to cover the filing fees, attorney fees, court costs, and other expenses" associated with foreclosure proceedings to "induce the [T]reasurer to [commence] a tax foreclosure action" against one or more parcels of real property, designated by the depositor, for which property taxes are delinquent. See Appellant's Brief iv. The Treasurer only indirectly acknowledges the existence of the program and declines to offer any insight into its functioning or to cite the authority under which it has been established. Appellee's Brief 1-13.
The Depositor Foreclosure Program resembles the provisions of R.C. 5721.30 -5721.43, under which third parties may purchase tax liens and, if the taxes remain unpaid thereafter, submit requests to county treasurers to initiate tax foreclosures. In this case, at least, the foreclosure does not appear to have been initiated at the request of a party who purchased a lien against the Center's property.
{¶ 3} On August 22, 2017, the Treasurer filed a complaint for foreclosure alleging that the Center had defaulted on its obligation to pay property taxes assessed against its real property located near the intersection of North Keowee Street and East Helena Street in Dayton—specifically, Parcel Nos. R72 05706 0023, R72 05706 0024, R72 05706 0033, R72 05706 0034 and R72 05706 0044. See Complaint ¶ 1-2, Aug. 22, 2017. The complaint made no reference to the Depositor Foreclosure Program.
The Montgomery County Auditor's website has no record of Parcel No. R72 05706 0034.
{¶ 4} Along with its answer to the complaint, the Center asserted counterclaims for violation of the uniformity clause in "Article I[I], § 26 of [t]he Ohio Constitution"; for violation of its right to due process; and for retroactive abatement of its property taxes. Answer of Islamic Center of Peace 3-4, Oct. 30, 2017. The trial court dismissed the counterclaims, on the Treasurer's motion, in a decision entered on January 18, 2018.
Citations to the Center's answer and counterclaim refer to pages of the document, rather than to paragraphs.
For reasons not apparent from the docket, the trial court signed and filed a second copy of the same decision, though with slightly different formatting, on January 22, 2018.
{¶ 5} On February 12, 2018, the Treasurer moved for summary judgment on the complaint. The trial court sustained the motion in its decision of March 14, 2018, and on May 4, 2018, the court filed an entry of final judgment.
{¶ 6} Within hours of the filing of the judgment entry, the Center filed a notice of appeal to this court. In Rice v. Islamic Ctr. of Peace, Inc. , 2d Dist. Montgomery No. 27986, 2018-Ohio-5162, 2018 WL 6721686, we found that the trial court's judgment entry had not resolved the amounts and priority of all liens against the Center's property, so we dismissed the appeal on December 21, 2018, for want of a final, appealable order. The trial court then filed an amended entry of final judgment on January 14, 2019, in which it accounted for the previously unresolved issues. On January 22, 2019, the Center timely filed its notice of appeal in the instant case.
II. Analysis
{¶ 7} For its first assignment of error, the Center contends that:
THE AMENDED FINAL JUDGMENT ENTRY, GRANTING SUMMARY JUDGMENT, AND FORECLOSING ON APPELLANT'S PROPERTY, VIOLATED APPELLANT'S CONSTITUTIONALLY PROTECTED RIGHTS BECAUSE THE APPELLEE INSTITUTED THE FORECLOSURE PROCEEDING AFTER BEING PAID TO DO SO BY A PRIVATE INDIVIDUAL.
{¶ 8} The Center argues that because "the decision to initiate [foreclosure] proceedings was made by, or on the behalf of, a private citizen, it can only be classified as illicit, arbitrary state action" in violation of the Center's right to due process. See Appellant's Brief 1. As well, the Center argues that by "giving a private party the power to induce [the Treasurer] to file a tax foreclosure action," the Depositor Foreclosure Program itself is a violation of Article II, Section 26, Ohio Constitution, which requires the "uniform operation" of all laws "of a general nature" throughout the state. See id. at 4.
{¶ 9} Embodied in the Fifth and Fourteenth Amendments to the U.S. Constitution, and in Article I, Section 16, Ohio Constitution, the right to due process is fundamentally "the opportunity to be heard ‘at a meaningful time and in a meaningful manner.’ " Mathews v. Eldridge , 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), quoting Armstrong v. Manzo , 380 U.S. 545, 552, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965) ; Direct Plumbing Supply Co. v. City of Dayton , 138 Ohio St. 540, 544, 38 N.E.2d 70 (1941). Unlike " ‘some legal rules, [due process] is not a technical conception with a fixed content unrelated to time, place and circumstances.’ " Mathews at 334, 96 S.Ct. 893, quoting Cafeteria Workers v. McElroy , 367 U.S. 886, 895, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961). Instead, due process is a " ‘flexible [concept] and calls [only] for such procedural protection as [a given] situation demands.’ " Id. , quoting Morrissey v. Brewer , 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). Identification of the precise requirements of procedural due process for a specific set of circumstances generally requires consideration of the following three factors:
First, the private interest that will be affected by * * * official action; second, the risk of an erroneous deprivation of [that private] interest through the [official] procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and [third], the [g]overnment's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement[s] would entail.
(Citation omitted.) Id. at 335, 96 S.Ct. 893 ; see also Shirokey v. Marth , 63 Ohio St.3d 113, 120, 585 N.E.2d 407 (1992), citing Mathews at 335, 96 S.Ct. 893.
{¶ 10} Here, the Center offers no challenge, whether premised on due process or any other grounds, to the regularity of the foreclosure proceedings themselves. Appellant's Brief 1-3. The Center instead challenges the Treasurer's decision to commence foreclosure proceedings specifically against its property, as opposed to the "hundreds of [other] parcels for which [property] taxes" are in arrears. Id. at 2. In other words, the Center argues that its right to due process was violated by the Treasurer's exercise of discretion. See id. at 1-3.
{¶ 11} Every year, "[o]n or before the fifteenth day of February," the treasurer of each county in the state "shall settle with the county auditor for all taxes and assessments that the treasurer has collected on the general duplicate of real and public utility property at the time of making the settlement," and "[o]n or before the tenth day of August," the treasurer must further "settle with the auditor for [any such] taxes and assessments [that were] not included in the preceding February settlement." R.C. 321.24(A) and (C). Immediately "after each settlement required by [ R.C. 321.24(C) ]," the "county auditor shall compile, * * *, a list [in] duplicate of all delinquent lands in the * * * county." R.C. 5721.011. The "original list shall be kept in the office of the auditor, and the duplicate shall be certified and delivered to the county treasurer within [30] days." See id. In the event that "taxes charged against an entry on the tax duplicate, or any part of those taxes, are not paid within [60] days after delivery of the delinquent land duplicate to the county treasurer * * *, the county treasurer shall enforce the [state's] lien for the taxes by civil action [seeking] the sale of [the] premises [identified in the duplicate] in the same way [that] mortgage liens are enforced * * *." R.C. 323.25.
{¶ 12} At first glance, the combined provisions of R.C. 321.24, 323.25 and 5721.011 appear to imply that 60 days "after [receiving] delivery of the delinquent land duplicate" from the county auditor, the county treasurer has a non-discretionary obligation to pursue a foreclosure action against any property for which taxes remain unpaid, in whole or in part. The provisions of R.C. 321.24, 323.25 and 5721.011, however, must be construed in pari materia with the provisions of R.C. 5721.13, 5721.18 and 5721.31 - 5721.33.
{¶ 13} Under R.C. 5721.13(A), "[o]ne year after certification of a delinquent land list, the county auditor shall make in duplicate a certificate, to be known as a delinquent land tax certificate, of each delinquent tract of land, * * *, upon which the taxes, assessments, charges, interest, and penalties have not been paid." These certificates "shall be signed by the auditor or [by the auditor's] deputy, and the original [copies] shall be filed with the [county] prosecuting attorney." Id. Upon receipt of a delinquent land tax certificate, the county prosecuting attorney "shall institute a foreclosure proceeding * * * in the name of the county treasurer to foreclose the [state's] lien" on the tract identified in the certificate, "unless a foreclosure * * * action has been or will be instituted under [R.C.] 323.25, * * * 323.65 to 323.79, or * * * 5721.14." (Emphasis added.) R.C. 5721.18(A).
A county auditor may "compile in duplicate a master list," in "lieu of making a separate * * * certificate * * * for each delinquent tract, lot, or part of [a] lot." R.C. 5721.13(C).
R.C. 323.65 -323.79 and 5721.14 relate to tax foreclosures against abandoned or unoccupied land. See R.C. 323.65(A), 323.65(F) and 5721.01(A).
{¶ 14} Although R.C. 323.25 seems to suggest, when read in isolation, that a county treasurer must initiate foreclosure proceedings against every delinquent parcel for which taxes have not been paid within two months of the county auditor's certification of the "delinquent land duplicate," the provisions of R.C. 5721.18(A) prohibit the county prosecutor from pursuing foreclosure against any parcel on which the county treasurer plans to foreclose under R.C. 323.25 but has not initiated proceedings, even 12 months after certification of the duplicate. The county treasurer, then, must have some discretion over the filing of tax foreclosure actions; the foregoing limitation on the county prosecutor's duty to initiate foreclosures would otherwise be unnecessary.
{¶ 15} With respect to the county auditor's duty to prepare delinquent land tax certificates, R.C. 5721.13(B)(2) states that if "the auditor determines that the delinquent taxes, assessments, charges, interest, and penalties levied against [a] tract of land exceed its fair market value, [the auditor] shall include a statement of that fact * * * in the delinquent vacant land tax certificate" for the tract. This requirement would serve little or no purpose were the county treasurer affirmatively obligated to pursue foreclosure in every instance of tax delinquency. Furthermore, upon receipt of the "duplicate of the delinquent land list compiled under [R.C.] 5721.011," the county treasurer "may select" delinquent land tax certificates, corresponding to properties on the delinquent land list, to be sold at public auction or, "in the treasurer's discretion," to be sold to a specific purchaser on negotiated terms. See R.C. 5721.31 - 5721.33.
{¶ 16} In the case at hand, then, the Treasurer had the discretion to foreclose on the Center's property as a result of unpaid property taxes. The Center argues that the Treasurer's decision is subject to strict scrutiny as a violation of its right to due process, though the Center itself bears the threshold obligation to establish that the Treasurer's decision to initiate foreclosure proceedings was actuated by constitutionally impermissible motives. See, e.g. , Wade v. United States , 504 U.S. 181, 185-186, 112 S.Ct. 1840, 118 L.Ed.2d 524 (1992) (reviewing exercise of prosecutorial discretion); Wayte v. United States , 470 U.S. 598, 607-609, 105 S.Ct. 1524, 84 L.Ed.2d 547 (1985) (reviewing exercise of prosecutorial discretion "according to ordinary equal protection standards"); United States v. Gaytan , 226 Fed.Appx. 519, 521-522 (6th Cir.2007) (reviewing exercise of prosecutorial discretion); Cooper State Bank v. City of Columbus , 10th Dist. Franklin Nos. 14AP-414, 2015-Ohio-2533, 2015 WL 3917588, ¶ 26-30 (reviewing claim that administrative agency denied application for zoning variance as the result of "bias"). Apart from the speculation presented in its brief, the Center's only attempt to establish that the Treasurer acted for improper reasons came in the form of an affidavit attached as Exhibit "A" to its memorandum in opposition to the Treasurer's motion for summary judgment. See Appellant's Brief 2-3 (espousing "the view" that "a private [person] paid [the] Treasurer * * * to initiate foreclosure proceedings, perhaps based upon race, color, creed, religion, and or [sic], national origin).
{¶ 17} Ismail Gula, "an Officer of the Islamic Center [o]f Peace, Inc.," averred in the affidavit, among other things, that he "believes that the Islamic Center [o]f Peace, Inc., and [its] lands, were target[ed] on account of [its] religion, [its] presence in the community" and the "value of [its] lands." Affidavit of Ismail Gula ¶ 2 and 8, Feb. 22, 2018. As well, Gula refers to Case No. 2016 CV 06075, in which the Treasurer previously sought to foreclose on property owned by the Center, albeit property other than that at issue in this case; he avers to his further belief that the Treasurer filed the instant complaint "in retaliation for [the Center's assertion of] affirmative defenses" and "counterclaims * * * in Case No. 2016 CV 06075." Id. at ¶ 9.
{¶ 18} Gula's personal belief, standing alone, is not evidence that the Treasurer decided to initiate foreclosure proceedings for constitutionally impermissible reasons, and Montgomery C.P. No. 2016 CV 06075 was dismissed by the Treasurer after the Center paid the taxes alleged to be due. Moreover, Gula himself refers to an entirely appropriate motive for the filing of the complaint in this case: "the value of [the Center's] lands." Gula Affidavit at ¶ 8. The Treasurer would collect no tax revenue through the foreclosure and sale of the Center's property, if the property were worth less than the amount of the tax delinquency. Compare with R.C. 5721.13(B)(2), 5721.14 and 5721.18.
{¶ 19} Before the trial court in this case, the Center raised the violation of its right to due process as an affirmative defense to the Treasurer's complaint, and in response to the Treasurer's motion for summary judgment, the Center bore the burden to present evidence, of the types listed in Civ.R. 56(C), in support of its affirmative defenses. See JPMorgan Chase Bank, N.A. v. Parker , 2d Dist. Miami No. 2014-CA-17, 2014-Ohio-5806, 2014 WL 7463142, ¶ 17-18. The Center thus had the opportunity to introduce evidence into the record to support its allegation that the Treasurer had improper motives for initiating foreclosure proceedings. Other than Gula's affidavit, the Center produced no such evidence, and we are limited to the resulting record.
{¶ 20} Additionally, the Center argues that the Treasurer's decision violated Article II, Section 26, Ohio Constitution, which states: "All laws, of a general nature, shall have a uniform operation throughout the State; nor, shall any act, except such as relates to public schools, be passed, to take effect upon the approval of any other authority than the General Assembly, except, as provided in this constitution." Appellant's Brief 3-4. The Center offers no analysis and provides no citation to authority in support of its argument. Id.
{¶ 21} We concur with the trial court's conclusion that the Treasurer's decision to initiate foreclosure proceedings did not violate the uniformity clause of the Ohio Constitution, regardless of whether the decision was prompted by the submission of an application to the Depositor Foreclosure Program. The uniformity clause "prohibits arbitrary geographic distinctions," but even so, the execution of laws "of a general nature" need not be strictly uniform throughout the state. See, e.g. , City of E. Liverpool v. Columbiana Cty. Budget Comm. , 114 Ohio St.3d 133, 2007-Ohio-3759, 870 N.E.2d 705, ¶ 1, 6-15. Considering a uniformity challenge to R.C. 5727.15(C), the Ohio Supreme Court held that a "statute [which] achieves a legitimate governmental purpose and operates equally on all persons or entities included within its provisions shall be deemed constitutional," notwithstanding that a "classification" system within the statute "causes disparate results." State ex rel. Zupancic v. Limbach , 58 Ohio St.3d 130, 568 N.E.2d 1206 (1991), paragraph one of the syllabus.
{¶ 22} The Center argues, in effect, that the Treasurer violated the uniformity clause simply by failing to file foreclosure actions against every delinquent parcel of real property within Montgomery County, yet the Revised Code allows county treasurers to exercise at least some discretion regarding the use of foreclosure actions to collect outstanding property taxes. For instance, a county treasurer would presumably be "achiev[ing] a legitimate governmental purpose" by filing foreclosure actions against only those parcels likely to be sold at prices greater than the corresponding tax debts. We find accordingly that the Treasurer's foreclosure on the Center's property did not violate Article II, Section 26, Ohio Constitution. The Center's first assignment of error is overruled. {¶ 23} For its second assignment of error, the Center contends that:
THE AMENDED FINAL JUDGMENT ENTRY, GRANTING SUMMARY JUDGMENT, AND FORECLOSING ON APPELLANT'S PROPERTY, WAS CONTRARY TO LAW AND AN ABUSE OF DISCRETION BECAUSE THE APPELLANT IS AN OHIO NONPROFIT CORPORATION WHOSE LANDS ARE EXEMPT FROM REAL ESTATE TAXES AS A MATTER OF LAW.
{¶ 24} The Center argues that its property should have been deemed exempt from taxation under R.C. 5709.12 and 5709.121 because it is a nonprofit corporation. Appellant's Brief 4-5. According to the Center, "the premises being foreclosed on herein are actually exempt [from property taxation] pursuant to R.C. 5709.12 and 5709.121," and "[t]hese statutes do not require a formal classification [sic] from the [Treasurer] in order to take advantage of the exemption." Id.
{¶ 25} Although R.C. 5709.12 might seem to create an automatic exemption from taxation, the provisions of the statute are not necessarily self-executing, nor is the property specifically at issue in this case automatically exempt from taxation solely on the basis that the Center is a nonprofit corporation. See, e.g. , R.C. 5709.12(B) - (E) and 5715.27 ; ShadoArt Prods., Inc. v. Testa , 146 Ohio St.3d 263, 2016-Ohio-511, 55 N.E.3d 1065, ¶ 1-3 and 27-29 ; Board of Edn. of Canfield Local School Dist. v. Olenick , 45 Ohio St.2d 300, 306-307, 345 N.E.2d 66 (1976) ; Sightless Children Club v. Montgomery Cty. Bd. of Revision , 2d Dist. Montgomery No. 25480, 2013-Ohio-3282, 2013 WL 3936382, ¶ 1-4 and 12-19 ; Northeast Ohio Regional Sewer Dist. v. Limbach , 72 Ohio App.3d 540, 543-544, 595 N.E.2d 496 (8th Dist.1991). The trial court found, and we agree, that the Center did not offer evidence demonstrating that it had been granted tax-exempt status. Mr. Gula averred in his affidavit that the Center was a "nonprofit corporation," but as we have observed, the Center's property was not automatically exempted from taxation as a result. Gula Affidavit ¶ 2. The Center's second assignment of error is overruled.
{¶ 26} For its third assignment of error, the Center contends that:
THE AMENDED FINAL JUDGMENT ENTRY, GRANTING SUMMARY JUDGMENT, AND FORECLOSING ON APPELLANT'S PROPERTY, WAS CONTRARY TO LAW BECAUSE THERE WERE GENUINE ISSUES OF MATERIAL FACT AS [sic] THE VALIDITY OF CERTAIN LIENS, AND AS TO THE AMOUNT OF THE JUDGMENT.
{¶ 27} Finally, the Center argues that the Treasurer failed to prove that the state's lien was the "first and best lien" against the property identified in the Treasurer's complaint. Appellant's Brief 5. The Center bases this argument on "roughly 10 * * * [t]ax [c]ertificates" in the name of American Tax Funding, LLC, which ostensibly represented liens against the Center's property. Id. ; see also R.C. 5721.31 - 5721.33.
{¶ 28} The Treasurer alleged in Paragraph 7 of the instant complaint that "American Tax Funding, LLC," might have had an interest in the property at issue "by virtue of [its claim for foreclosure in] Case No. 2008 CV 09938." The complaint in Montgomery C.P. No. 2008 CV 09938 refers to tax certificates purchased from the Treasurer that were associated with delinquent taxes for Parcel Nos. R72 05706 0023, R72 05706 0024, R72 05706 0033 and R72 05706 0044. In Paragraph 2 of the instant complaint, the Treasurer alleged that taxes were delinquent for all of these parcels. {¶ 29} Pursuant to R.C. 5721.30(Q), 5721.32(A) and 5721.33(A)(2), tax certificates expire no more than six years after the date on which they are issued, and the copies of the tax certificates attached as unlabelled exhibits to the Center's brief were issued on or before September 29, 2008. The Treasurer filed the instant complaint on August 22, 2017. Furthermore, American Tax Funding, LLC was served with notice of the complaint but failed to answer or otherwise respond, meaning that any interest it might have had has been extinguished by default.
{¶ 30} As an afterthought, the Center claims that the trial court's amended entry of final judgment is not a final, appealable order. The amended entry of final judgment, however, addresses all of the issues that we found, in our opinion in Islamic Ctr. of Peace , 2d Dist. Montgomery No. 27986, 2018-Ohio-5162, had not been addressed in the trial court's original entry of final judgment. The Center's third assignment of error is overruled.
III. Conclusion
{¶ 31} We find that none of the Center's arguments has merit. The Treasurer did not violate the Center's right to due process or Article II, Section 26, Ohio Constitution by initiating tax foreclosure proceedings against the Center's property, and the Center itself did not present sufficient evidence to establish that its property was exempt from taxation. In addition, we find that the trial court's amended entry of final judgment was a final, appealable order. Therefore, the trial court's final judgment of January 14, 2019, is affirmed.
WELBAUM, P.J. and FROELICH, J., concur.