Rokakis v. W. Res. Leasing Co. , 2011 Ohio 1926 ( 2011 )

[Cite as Rokakis v. W. Res. Leasing Co., 2011-Ohio-1926.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 95058
JAMES ROKAKIS,
TREASURER OF CUYAHOGA COUNTY
PLAINTIFF-APPELLEE
vs.
WESTERN RESERVE LEASING CO., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case Nos. CV-660808 and CV-681162
BEFORE: Jones, J., Blackmon, P.J., and Keough, J.
RELEASED AND JOURNALIZED: April 21, 2011
ATTORNEY FOR APPELLANT
Daniel M. Roth
1359 Fox Run Drive
Suite 105
Willoughby, Ohio 44094
ATTORNEYS FOR APPELLEE
William D. Mason
Cuyahoga County Prosecutor
BY: Adam D. Jutte
Anthony Giunta
Michael A. Kenny, Jr.
Colleen Majeski
Judith Miles
Gregory B. Rowinski
Assistant Prosecuting Attorneys
The Justice Center, 8 Floor
ht
1200 Ontario Street
Cleveland, Ohio 44113
LARRY A. JONES, J.:
{¶ 1} Defendant-appellant, Western Reserve Leasing Company appeals from the April
2010 trial court judgment wherein the trial court overruled Western Reserve’s objections to the
magistrate’s decision, adopted the magistrate’s decision, and ordered foreclosure of the subject
property on Caine Avenue in Cleveland. We affirm.
I. Procedural History and Facts
{¶ 2} In May 2008, plaintiff-appellee, James Rokakis, Cuyahoga County Treasurer,
initiated this tax foreclosure action against Western Reserve. Two other foreclosure actions
filed by the treasurer against Western Reserve concerning contiguous parcels on Caine Avenue
were consolidated with this case. The tax that had been certified was based on unpaid water
bills for the parcels.
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{¶ 3} In December 2008, Rokakis filed an amended complaint, and in February 2009,
Western Reserve answered the amended complaint and requested a trial by jury. At a
February 2009 hearing, the magistrate questioned the identity and legal status of the record
titleholder. As a result of the hearing, Rokakis filed a second amended complaint, adding
Lillian Roth and her unknown spouse as new party defendants.
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In 2005, Western Reserve sued the city of Cleveland and the Northeast Ohio Regional Sewer
District (“NEORSD”) relative to the same water bills. The claims against NEORSD were dismissed
because of Western Reserve’s failure to exhaust its administrative remedies. Western Reserve
voluntarily dismissed its remaining claims. W. Res. Leasing Co. v. Rokakis, Cuyahoga County
Common Pleas Case No. CV-564582.
{¶ 4} Another hearing was held in April 2009. At the hearing, Western Reserve’s
counsel accepted service of the second amended complaint for Lillian Roth. Defense counsel
also challenged the foreclosure proceeding on the ground that the certification as a tax of the
unpaid water bills constituted an unconstitutional taking of property without due process of law.
The trial court granted Western Reserve until May 27, 2009 to brief the issue.
{¶ 5} On May 27, Western Reserve filed its brief. The trial court found Western
Reserve’s brief unacceptable “journalism or discursive diatribe,” rather than legal argument.
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In a June 2009 entry, the court granted Western Reserve until August 10, 2009 to “present a
legal basis for challenge of the certified delinquency.” The court warned that “failure to
submit meaningful, substantiated legal argument will result in the case proceeding to decision.”
Western Reserve did not file a brief, and in November 2009, the magistrate issued a decision
finding that a decree of foreclosure should issue. In December 2009, the trial court vacated
the magistrate’s decision, however, because of defense counsel’s “insistence that there is a
violation of due process in this foreclosure proceeding.”
{¶ 6} A hearing was held on February 25, 2010. The following day, February 26, the
magistrate found that the taxes and other charges were due and payable and that a decree of
foreclosure should issue. The magistrate’s decision was filed on March 1, 2010, and on
2
Western Reserve’s brief acknowledged that its previous claims against the NEORSD in 2005
based on the same water bills at issue here were dismissed because of its failure to exhaust it
administrative remedies. It cited an exposé by the Cleveland Plain Dealer about billing practices at
the city’s division of water in support of its constitutional challenge.
March 10, 2010, Western Reserve filed objections. The trial court overruled the objections,
adopted the magistrate’s decision, and ordered a decree of foreclosure. Western Reserve now
appeals, assigning the following errors for our review:
“[I.] The trial court erred by denying Defendant [its] constitutional right to a trial
by jury as set forth in Section 1.05 of the Ohio Constitution. Defendant had
properly demanded [its] right to a trial by jury in the Answer filed in the matter
below.
“[II.] The trial court erred by denying Defendant [its] constitutional right to due
process of law by generally failing to conduct the proceedings below in
accordance with the Ohio Civil Rules and further failing to conduct the
proceedings below in accordance with R.C. 323.25.
“[III.] The trial court erred by denying Defendant [its] ability to defend against
Plaintiff’s claims by offering evidence tending to refute them, specifically
testimony from officials at the Cleveland Division of Water relative to the water
and sewer bill for a portion of the subject real property which had been
converted into a tax.
“[IV.] The trial court erred in the procedure followed by the trial court at the
February 25, 2010, hearing that resulted in the final judgment violated due
process, the Ohio Civil Rules and R.C. 323.25.
“[V.] The trial court erred by not sustaining Defendant’s objections to the
Magistrate’s Decision that was entered on March 1, 2010.”
II. Law and Analysis
A. Right to a Jury Trial
{¶ 7} In its first assignment of error, Western Reserve contends that the trial court
denied it of its constitutionally guaranteed right to a jury trial. We disagree.
{¶ 8} In support of its contention, Western Reserve cites Section 1, Article V, Ohio
Constitution, which provides in part that “[t]he right of trial by jury shall be inviolate * * *.”
This right has not been extended, however, to all civil actions. In particular, it is well
established that parties to an equitable action are not entitled to a jury trial as a matter of right.
City Loan & Sav. Co. v. Howard (1984), 16 Ohio App.3d 185, 475 N.E.2d 154, paragraph
two of syllabus. A foreclosure action is equitable in nature and may be heard by a court. Id. at
186. As the Ohio Supreme court stated in Alsdorf v. Reed (1888), 45 Ohio St. 653, 17 N.E.
73:
“Where, in such action, the prayer is for an ordinary decree of foreclosure and
order of sale, the action is one for relief other than money only; and, although an
issue of fact may be joined on a plea by the garnishee * * *, neither party is
entitled to demand a jury for the trial of the issue, and either may appeal from a
final judgment rendered against him in the action.” Id. at paragraph two of the
syllabus.
{¶ 9} An exception to the general rule that a party is not entitled to a jury trial in
foreclosure actions applies when there is a claim for a personal judgment against a party. See
Sec. Fed. Sav. & Loan of Iowa v. King (Aug. 25, 1983), Cuyahoga App. Nos. 44864 and
45071; Grapes v. Barbour (1898), 58 Ohio St. 669, 675, 49 N.E. 306. There was no claim in
this case for a personal judgment against Western Reserve or Lillian Roth; therefore, they were
not entitled to a jury trial.
{¶ 10} In light of the above, the first assignment of error is overruled.
B. Due Process
{¶ 11} For its second assigned error, Western Reserve contends that it was denied due
process of law because the trial court did not follow the procedures for a tax foreclosure action
under R.C. 323.25. Western Reserve contends in this assignment that there was no evidence
offered, either through a trial or summary judgment exercise, to support the final judgment.
Western Reserve claims that it was prepared to present testimony at the hearing that was
scheduled for February 25, 2010, but the magistrate “changed her mind and sandbagged the
parties instead.”
{¶ 12} R.C. 323.25, governing the enforcement of tax liens, provides that foreclosures
based on tax liens proceed in the same way mortgage liens are foreclosed on. Loc.R. 24 of
the Court of Common Pleas of Cuyahoga County, General Division, governs foreclosure, quiet
title, and partition actions, and states that “[j]udges reserve the discretion to set case
management orders and rules of procedure.”
{¶ 13} The record in this case shows that the court wished to resolve this matter on the
written documentation before it. The court afforded Western Reserve two opportunities to
pursue its constitutional challenge. First, in April 2009, the court granted Western Reserve
until May 27 to file a brief on its constitutional challenge. Western Reserve filed a brief, but
the trial court found it unacceptable. Thus, the court granted Western Reserve a second
opportunity to file a brief. In a June 2009 entry, the court specifically informed Western
Reserve that “[f]ailure to submit meaningful, substantiated legal argument will result in the case
proceeding to decision.” (Emphasis added.) Western Reserve failed to file a brief.
{¶ 14} Moreover, even after the magistrate issued a decision in November 2009, the
trial court vacated the decision and held another hearing because of Western Reserve’s
“insistence that there is a violation of due process.” After “review of the argument and
submission of the parties,” the magistrate found that foreclosure should issue.
{¶ 15} On this record, we do not find that the judgment was “entered out of the blue * *
* [with] no legal basis whatsoever,” as Western Reserve contends. The court was afforded
discretion to set orders and the rules of procedure. See Loc.R. 24 of the Court of Common
Pleas of Cuyahoga County, General Division. The court did not abuse that discretion.
Accordingly, the second assignment of error is overruled.
C. Overruling Objections to the Magistrate’s Decision
{¶ 16} Western Reserve’s final three assignments of error relate to the trial court
overruling its objections to the magistrate’s decision and adopting the magistrate’s decision as
the court’s final judgment.
{¶ 17} Civ.R. 53(D)(4)(d) provides that “[i]f one or more objections to a magistrate’s
decision are timely filed, the court shall rule on those objections. In ruling on objections, the
court shall undertake an independent review as to the objected matters to ascertain that the
magistrate has properly determined the factual issues and appropriately applied the law.”
Since this provision requires a de novo review, the trial court may not merely “rubber stamp”
the magistrate’s decision. Knauer v. Keener (2001), 143 Ohio App.3d 789, 793, 758 N.E.2d
1234; Roach v. Roach (1992), 79 Ohio App.3d 194, 207, 607 N.E.2d 35. “Thus, ‘[t]he trial
court should not adopt challenged [magistrate’s] findings of fact unless the trial court fully
agrees with them-that is, the trial court, in weighing the evidence itself and fully substituting its
judgment for that of the [magistrate], independently reaches the same conclusion.’” McCarty
v. Hayner, Jackson App. No. 08CA8, 2009-Ohio-4540, ¶17, quoting DeSantis v. Soller (1990),
70 Ohio App.3d 226, 233, 590 N.E.2d 886.
{¶ 18} An appellate court presumes that the trial court conducted an independent review
of the magistrate’s decision unless the appellant affirmatively shows that the trial court failed to
conduct such an independent analysis. McCarty at ¶18, citing Hartt v. Munobe, 67 Ohio
St.3d 3, 7, 1993-Ohio-177, 615 N.E.2d 617. In addition, the fact that the trial court adopted
the magistrate’s decision in no way shows that the trial court did not exercise independent
judgment. State ex rel. Scioto Cty. Child Support Enforcement Agency v. Adams (July 23,
1999), Scioto App. No. 98CA2617.
{¶ 19} Within these assignments of error, Western Reserve contends that the trial court
erred in overruling its objections because it did not afford Western Reserve the opportunity to
challenge the water bills and there was no evidence to support the treasurer’s claim for taxes
due. We disagree.
{¶ 20} In regard to Western Reserve’s claim that it was not afforded an opportunity to
challenge the water bills, the record shows that Western Reserve failed to exhaust its
administrative remedies, which would have allowed for such challenge. Specifically, the
NEORSD has rules of procedure under which a ratepayer may challenge billings. After
exhausting those procedures, a ratepayer can appeal to the common pleas court under R.C.
Chapter 2506 if the ratepayer is not satisfied with NEORSD’s determination. The exhaustion
of administrative remedies doctrine requires that where an administrative remedy is available,
relief must be sought by exhausting the remedy before a court will act. Nemazee v. Mt. Sinai
Med. Ctr. (1990), Ohio St.3d 109, 564 N.E.2d 477, syllabus. Western Reserve did not avail
itself of the administrative process and, therefore, the trial court did not need to address its
claims of sewer use and charges.
{¶ 21} In regard to Western Reserve’s claim of lack of evidence to support the taxes
due, we review R.C. 743.04 governing the assessment and collection of water rents. That
section provides in pertinent part as follows:
“When water rents or charges are not paid when due, the director or other
official or body may do either or both of the following:
“(A) Certify them, together with any penalties, to the county auditor. The
county auditor shall place the certified amount on the real property tax list and
duplicate against the property served by the connection if he also receives from
the director or other official or body additional certification that the unpaid rents
or charges have arisen pursuant to a service contract made directly with an
owner who occupies the property served.
“The amount placed on the tax list and duplicate shall be a lien on the property
served from the date placed on the list and duplicate and shall be collected in the
same manner as other taxes * * *.
“(B) Collect them by actions at law, in the name of the city from an owner,
tenant, or other person who is liable to pay the rents or charges.”
{¶ 22} Western Reserve contends that “there is absolutely no evidence * * * of any kind
to support Plaintiff’s claim for taxes due.” But the certificate of delinquency filed by the
auditor with the prosecuting attorney is prima facie evidence of the amount and validity of the
taxes and of their nonpayment. See Geauga Cty. Treasurer v. Pauer (June 30, 1993), Geauga
App. Nos. 92-G-1722 and 92-G-1724.
{¶ 23} Further, as previously discussed, we are likewise not persuaded by Western
Reserve’s contention that the judgment was “entered out of blue.” In June 2009, Western
Reserve was put on notice that the trial court was ready to proceed to “decision.” A hearing
was held on February 25, 2010. Western Reserve has not filed a transcript or recording from
the hearing. Apparent from the magistrate’s filing of February 26, the day after the hearing,
3
and other documentation in the record, is the following. On February 13, 2010, defendant
Lillian Roth passed away. At the February 25 hearing, the parties and the court discussed
service of the second amended complaint on the heirs of Lillian Roth. Western Reserve’s
counsel indicated that he would provide the names and addresses of the heirs to plaintiff’s
counsel, which he did that same day, via email, and plaintiff’s counsel informed the court.
{¶ 24} The next day, February 26, the magistrate sent an email to counsel stating that
she was “caught in a fog of unthinking at the hearing yesterday when she ordered 45 days leave
to join the heirs of Lillian Roth.” In a filing issued that same day, the magistrate explained
that “despite the parties planned exchange of contact information for the heirs of Lillian Roth
their notification of pending proceedings is not determinative of the outcome of this matter.”
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In its objections to the magistrate’s decision, Western Reserve stated that a court reporter was
not present for the hearing, but that a “record of proceedings was made with an electronic recording
The magistrate found, “upon review of the argument and submission of the parties,” that
foreclosure of the property should issue. Thus, the “fog of unthinking” that Western Reserve
references relates only to the issue of the necessity of Lillian Roth’s heirs as parties to the
action.
{¶ 25} In sum, Western Reserve has not demonstrated that the magistrate improperly
determined the factual issues or the law. Further, Western Reserve has not demonstrated that
the trial court failed to conduct an independent analysis in adopting the magistrate’s decision.
Accordingly, Western Reserve’s third, fourth, and fifth assignments of error are overruled.
Judgment affirmed.
It is ordered that appellee recover of appellant its costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga
County Court of Common Pleas 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.
LARRY A. JONES, JUDGE
PATRICIA A. BLACKMON, P.J., and
KATHLEEN ANN KEOUGH, J., CONCUR
device.” No transcription of any recording is before this court, however.