Am. Tax Funding L.L.C. v. Miamisburg , 2011 Ohio 4161 ( 2011 )

[Cite as Am. Tax Funding L.L.C. v. Miamisburg, 2011-Ohio-4161.]
IN THE COURT OF APPEALS OF MONTGOMERY COUNTY, OHIO
AMERICAN TAX FUNDING, LLC., :
et al.
Plaintiff-Appellants : C.A. CASE NO. 24494
vs. : T.C. CASE NO. 10CV5710
CITY OF MIAMISBURG, ET AL :
Defendant-Appellees :
. . . . . . . . .
O P I N I O N
Rendered on the 19th day of August, 2011.
. . . . . . . . .
David S. Anthony, Atty. Reg. No. 0074431; John N. Zomoida, Jr.,
Atty. Reg. No. 0072742, 1000 West Wallings Rd, Suite A, Broadview
Heights, OH 44147
Attorney for Plaintiff-Appellants
Robert J. Surdyk; Kevin A. Lantz, 1 Prestige Place, Suite 700,
Miamisburg, OH 45342
Attorney for Defendant-Appellee
J. Joseph Walsh, 201 East Sixth Street, Dayton, OH 45402
Attorney for Third Party Defendant-Appellee, Michael J. King
. . . . . . . . .
GRADY, P.J.:
{¶ 1} This is an appeal from a final order granting a Civ.R.
12(C) motion for judgment on the pleadings in an action brought
pursuant to 42 U.S.C. §1983, the federal “civil rights” statute.
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{¶ 2} R.C. 5126.32 authorizes the county treasurer to sell
certificates of tax liens at public auction, and to thereafter
record the sales in the tax certificate register.
{¶ 3} R.C. 715.26(B) authorizes municipalities to provide for
the removal or repair of unsafe or structurally defective
buildings, and further provides that at least thirty days prior
to the removal or repair “the municipal corporation . . . shall
give notice of its intention with respect to such removal or repair
to the holders of legal or equitable liens of record upon the real
property on which such building is located and to the owners of
record of such property.”
{¶ 4} The underlying action was commenced on July 16, 2010,
by American Tax Funding, LLC (“ATF”) and ATFH Real Property, LLC
(“ATFH”) against the City of Miamisburg. (“Miamisburg”). The
Plaintiffs’ complaint alleged that ATF purchased tax certificates
of liens on real property located at 747 East Sycamore Street in
Miamisburg, Ohio, on three separate dates: November 21, 2005;
October 26, 2006; and September 28, 2007.
{¶ 5} The complaint further alleged that ATF filed a
complaint in foreclosure on its liens on May 12, 2008, and
thereafter assigned its interest to ATFH, which acquired title
to the property by a Sheriff’s Deed recorded on May 14, 2010.
{¶ 6} The complaint further alleged that “[b]etween November
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21, 2005 and May 24, 2010, the City of Miamisburg, Ohio . . . caused
the structure upon the Property to be demolished, but the City
did not provide ATF and/or ATFH with at least thirty days notice
of its intention to remove the structure as required by R.C.
715.26(B).”
{¶ 7} The complaint further alleged that the failure of notice
“violated the due process rights of ATF and/or ATFH as guaranteed
by the Fourteenth Amendment of the United States Constitution and
Section 10, Article I of the Ohio Constitution.”
{¶ 8} Finally, the complaint alleged that demolition of the
structure “caused the value of the Property be reduced by $41,000,”
and the plaintiffs prayed for a judgment in that amount as well
as associated legal and equitable relief.
{¶ 9} Miamisburg filed a responsive pleading on August 11,
2010. Miamisburg admitted “that, on or about January 8, 2008,
it caused a structure located on the property at 747 East Sycamore
Street, Miamisburg, Montgomery County, Ohio, to be demolished.”
Miamisburg denied the remaining allegations of the complaint for
lack of knowledge or as untrue. Miamisburg also pled seventeen
affirmative defenses, the last of those being that “Plaintiffs’
claims are barred by the applicable statute of limitations.”
{¶ 10} On August 31, 2010, Miamisburg filed a Civ.R. 12(C)
motion for a judgment on the pleadings. The motion presented two
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grounds for relief.
{¶ 11} Miamisburg first argued that money damages are
unavailable for the constitutional due process violations alleged
except pursuant to 42 U.S.C. §1983, and that Plaintiffs failed
to plead that claim for relief; and, more specifically, that
Plaintiffs’ complaint failed to allege that Miamisburg had acted
under color of law, an essential element of a 42 U.S.C. §1983 claim.
{¶ 12} Second, Miamisburg argued that, even assuming that the
civil rights claim was properly pled, the action Plaintiffs
commenced was untimely filed. Per Nadra v. Mbah, 119 Ohio St.3d
305, 2008-Ohio-3918, the two-year statute of limitations for
personal injury actions, R.C. 2305.10, governs 42 U.S.C. §1983actions filed in the courts of Ohio. Because Miamisburg had
demolished the house on January 8, 2008, the Plaintiffs’ action
then accrued. Therefore, the action Plaintiffs commenced on July
10, 2010, more than two years thereafter, was not timely filed.
{¶ 13} Plaintiffs filed a memorandum contra Miamisburg’s
motion. Plaintiffs argued, among other things, that there is an
issue of fact concerning when their action accrued. Plaintiffs
contended that even if the demolition occurred on January 8, 2008,
they were then unaware of that fact. Plaintiffs argued that their
action accrued only later, when they discovered that the building
had been demolished. Plaintiffs relied on Ormiston v. Nelson
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(1997), 117 F.3d 69, which held that 42 U.S.C. §1983 actions “based
upon medical or psychiatric confinement, like other section 1983
claims, accrue when the plaintiff ‘knows or has reason to know
of the injury which is the basis of his action.’ Id., at p. 70.
{¶ 14} Miamisburg responded that the discovery rule is
unavailing to Plaintiffs’ claims. Miamisburg attached to its
submission certified copies of five postal receipts returned in
the foreclosure action Plaintiffs filed. The receipts are marked
as Exhibits B through F. The receipts indicate that service of
process Plaintiffs had five times attempted on the defendant in
the foreclosure action at “747 Sycamore Street, Miamisburg, Ohio,
45342,” were returned without service, each indicating, “No Such
Number/Street.” The return receipts were filed in the foreclosure
action as early as May 20, 2008, and as late as June 30, 2008.
Miamisburg asked the court to take judicial notice of the five
Exhibits, and to find that, even if the discovery rule applies,
Plaintiffs’ action on their 42 U.S.C §1983 commenced to run on
May 20, 2008. On that basis, the action they commenced on July
10, 2010, more than two years later was likewise untimely.
{¶ 15} The trial court overruled Miamisburg’s motion for
judgment on the pleadings. Miamisburg moved for reconsideration.
Plaintiffs opposed the motion for reconsideration, and also moved
to amend their complaint to correct any alleged defect in pleading
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their 42 U.S.C. §1983 claim. The trial court granted Miamisburg’s
motion for reconsideration. The court allowed the parties until
December 14, 201 to file supplemental memoranda on the statue of
limitations issue and on Plaintiffs’ motion to amend their
complaint.
{¶ 16} Miamisburg filed a supplemental memorandum on December
14, 2010. Plaintiffs filed none. On January 19, 2011, the trial
court granted Miamisburg’s motion for judgment on the pleadings.
The court agreed with Plaintiffs that the discovery rule applies
to Miamisburg’s statute of limitations claim. However, after
taking judicial notice of Exhibits B through F attached to
Miamisburg’s prior submission, the court found “that Plaintiff
should have known of the injury, i.e. the demolition of which they
received no notice on June 30, 2008 at the very latest. Plaintiffs
waited to file the present action until July 16, 2010, more than
two years after June 30, 2008. Accordingly, this court holds that
Plaintiffs’ section 1983 claim is barred by the applicable statute
of limitations.” (Dkt. 29, p. 5).
{¶ 17} Plaintiffs filed a notice of appeal on February 18, 2011
from the trial court’s final order of January 19, 2011.
ASSIGNMENT OF ERROR
{¶ 18} “THE TRIAL COURT ERRED IN GRANTING DEFENDANT-APPELLEE’S
MOTION FOR JUDGMENT ON THE PLEADINGS.
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{¶ 19} “A. THE TRIAL COURT ERRED BY GOING BEYOND THE FOUR
CORNERS OF THE PLEADINGS IN SUPPORT OF ITS DECISION TO GRANT
DEFENDANT-APPELLEES’S MOTION FOR JUDGMENT ON THE PLEADINGS.
{¶ 20} “B. THE TRIAL COURT ERRED BY DECIDING A QUESTION OF
MATERIAL FACT IN SUPPORT OF ITS DECISION TO GRANT
DEFENDANT-APPELLEE’S MOTION FOR JUDGMENT ON THE PLEADINGS.”
{¶ 21} Civ.R. 12(C) provides: “After the pleadings are closed
but within such time as not to delay the trial, any party may move
for judgment on the pleadings.”
{¶ 22} Unlike a motion to dismiss filed pursuant to Civ.R.
12(B), which is limited to claims for relief in the pleadings,
a motion to dismiss filed pursuant to Civ.R. 12(C) is directed
to all the pleadings, including any defensive pleadings. “[T]his
means all the pleadings, as well as any material incorporated
therein or attached thereto as exhibits.” Klein/Darling,
Baldwin’s Ohio Civil Practice, §12:10. However, “determination
of the motion for judgment on the pleadings is restricted solely
to the allegations in the pleadings.” Peterson v. Teodosio (1973),
34 Ohio St.2d 161. Further, “. . . Civ.R. 12(C) requires a
determination that no material factual issues exist and that the
movant is entitled to judgment as a matter of law.” State ex rel.
Midwest Pride v. Pontious (1996), 75 Ohio St. 3d 565, 570.
{¶ 23} Civ.R. 7(A) provides that the pleadings include the
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complaint and answer. Civ.R. 7(B) distinguishes a motion from
a pleading, and states that a motion is “[a]n application to the
court for an order.”
{¶ 24} Miamisburg pleaded a statute of limitations affirmative
defense in its answer. That matter was therefore available as
grounds for the Civ.R. 12(C) motion Miamisburg filed. In ruling
on the motion, the trial court expressly relied on the copies of
postal return receipts that Miamisburg submitted as Exhibits B
through F attached to its memorandum in reply to the “discovery
rule” argument that Plaintiffs made in opposition to Miamisburg’s
Civ.R. 12(C) motion. Miamisburg’s Civ.R. 12(C) motion and the
memoranda that followed were not pleadings. Therefore, the trial
court erred when it relied on the Exhibits in determining
Miamisburg’s Civ.R. 12(C) motion.
{¶ 25} Miamisburg argues that Plaintiffs waived the error
because they failed to object to or move to strike the Exhibits.
Miamisburg had asked the court to take judicial notice of the
Exhibits as copies of documents in the records of the clerk of
court, and the court apparently did that. Miamisburg relies on
State ex rel. Neff v. Corrigan (1996), 75 Ohio St.3d 12, which
suggests that a court may take judicial notice of appropriate
matters in considering a Civ.R. 12(B)(6) motion to dismiss for
failure to state claim upon which relief may be granted without
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having to convert it to a motion for summary judgment.
{¶ 26} We agree that Plaintiffs waived the trial court’s error
in taking judicial notice of the Exhibits on which Miamisburg
relied. We also agree that a court may take judicial notice of
its own records. However, whether the matter for which those
records were considered is “appropriate” depends on the purpose
for which they were considered. That implicates Plaintiff’s
second contention: that a genuine issue of material fact remains
to be determined regarding their “discovery” argument.
{¶ 27} Even though the applicable limitations period in state
law determines the statute of limitations period for 42 U.S.C.
§1983 actions, “federal law governs the determination of the
accrual date (that is, the date the statute of limitations begins
to run) for purposes of the statute of limitations in a section
1983 action.” Ormiston v. Nelson, at p. 71. Application of the
discovery rule may be appropriate in those actions. Id. The
statute of limitations begins to run “when the plaintiff knows
or has reason to know of the injury which is the basis of his action.”
Singleton v. City of New York (1980), 632 F.2d 185, 191.
{¶ 28} The pleadings do not support a finding that Plaintiffs
knew of their injury on January 8, 2008, the date on which Miamisburg
alleges it demolished the building on Plaintiff’s property.
Neither does the record demonstrate when Plaintiffs first learned
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that the building had been demolished. Nevertheless, if
Plaintiffs by the exercise of reasonable diligence should have
known of their injury on a date more than two years before they
commenced their action, Miamisburg was entitled to a judgment of
dismissal on the Civ.R. 12(C) motion it filed. O’Stricker v. Jim
Walter Corp. (1983), 4 Ohio St.3d 84.
{¶ 29} The discovery rule requires that two factors be
discovered before the two-year limitations period in R.C. 2305.10
begins to run: first, a plaintiff must know or reasonably should
have known that he has been injured; second, a plaintiff must know
or reasonably should know that his injury was proximately caused
by the conduct of defendant. Viock v. Stowe-Woodward Company
(1983), 13 Ohio App.3d 7. The statute of limitations does not
begin to run until both prongs are satisfied. Norgard v. Brush
Wellman, Inc., 95 Ohio St.3d 165, 2002-Ohio-2007, at ¶9. In that
case the Supreme Court explained:
{¶ 30} “Since the rule’s adoption, the court has reiterated
that discovery of an injury alone is insufficient to start the
statute of limitations running if at that time there is no
indication of wrongful conduct of the defendant. Moreover, the
court has been careful to note that the discovery rule must be
specially tailored to the particular context to which it is to
be applied. Browning v. Burt (1993), 66 Ohio St.3d 544, 559, 613
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N.E.2d 993.” Id., at ¶10.
{¶ 31} In the determination of a Civ.R. 12(C) motion, the
nonmoving party is entitled to have all of the material allegations
in the pleading, with all reasonable inferences to be drawn
therefrom, construed in his favor as true. State ex rel. Midwest
Pride IV, Inc. v. Pontious. On that basis, reasonable minds could
conclude that the postal return receipts that were filed in the
foreclosure action Plaintiffs commenced should have put them on
notice that the building on their property may no longer exist.
However, reasonable minds could also conclude that the Plaintiffs
would not thereby also have known that their injury was proximately
caused by Miamisburg’s demolition of the building, the foundation
of the wrongful conduct Plaintiff’s complaint alleges. Therefore,
the trial court erred when it granted Miamisburg’s Civ.R. 12(C)
motion and dismissed Plaintiff’s 42 U.S.C. §1983 action.
{¶ 32} Plaintiff-Appellant’s assignment of error is sustained.
The judgment from which the appeal was taken will be reversed,
and the matter will be remanded for further proceedings, consistent
with our opinion.
FAIN, J. And HALL, J., concur.
Copies mailed to:
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David S. Anthony, Esq.
John N. Zomoida, Jr., Esq.
Robert J. Surdyk, Esq.
Kevin A. Lantz, Esq.
J. Joseph Walsh, Esq.
Hon. Connie S. Price