State ex rel. U.S. Bank Trust, NA v. Summit Cty. , 2021 Ohio 3189 ( 2021 )

[Cite as State ex rel. U.S. Bank Trust, NA v. Summit Cty., 2021-Ohio-3189.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
STATE OF OHIO EX REL. US BANK
TRUST, NATIONAL ASSOCIATION, AS C.A. No. 29889
TRUSTREE OF AMERICAN
HOMEOWNER PRESERVATION
TRUST SERIES 2014A 819 S. WABASH
ST., SUITE 606, CHICAGO, IL 60605
Relator
v. ORIGINAL ACTION IN
MANDAMUS
SUMMIT COUNTY, OHIO
Respondent
Dated: September 15, 2021
PER CURIAM.
{¶1} Relator, US Bank, has petitioned this Court for a writ of mandamus directed to
Respondent, Summit County, Ohio, seeking an order directing Summit County to begin
appropriation proceedings regarding property that was foreclosed upon in 2017. Summit County
moved to dismiss and US Bank responded in opposition. For the following reasons, this Court
grants the motion to dismiss.
{¶2} According to US Bank’s complaint, it owned a property located in Summit
County, Ohio. There is no dispute that there were taxes due and unpaid on this property. Summit
County’s Fiscal Officer commenced an expedited tax foreclosure case in the Summit County
Board of Revision to collect delinquent real estate taxes, totaling about $4,000, owed on the
property, valued at about $48,000.
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Requirements for a Writ of Mandamus and Motion to Dismiss
{¶3} “The United States and Ohio Constitutions guarantee that private property shall
not be taken for public use without just compensation.” (citations omitted) State ex rel. Gilbert
v. Cincinnati, 125 Ohio St.3d 385, 2010-Ohio-1473, ¶ 14. Mandamus serves as the appropriate
action to compel public authorities to institute appropriation proceedings where the property
owner has alleged an involuntary taking of private property. Id.{¶4} In this context, to be entitled to the writ of mandamus, US Bank must establish a
clear legal right to compel Summit County to commence appropriation proceedings, a
corresponding legal duty on the part of Summit County to institute that action, and the lack of an
adequate remedy for US Bank in the ordinary course of law. Id. at ¶ 15.
{¶5} Dismissal of a petition for writ of mandamus is appropriate only if it appears
beyond doubt from the complaint that the relator can prove no set of facts warranting relief, after
all factual allegations of the complaint are presumed true and all reasonable inferences are made
in the relator’s favor. See, e.g., State ex rel. Martin v. Russo, 160 Ohio St.3d 21, 2020-Ohio-829,
¶ 7.
Expedited Foreclosure Procedure
{¶6} Although we normally begin with a review of the facts in the complaint, the
import of those facts is tied directly to Ohio’s statutory expedited foreclosure scheme.
Accordingly, we begin with a brief overview of the statutory procedures before we turn to the
facts.
{¶7} R.C. 323.25 authorizes the county treasurer to enforce a tax lien by filing a suit,
just as a mortgage lien could be enforced. In the typical case, the property is sold at a public
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auction and the proceeds are used to cover the lien. If the proceeds from the sale exceed the
amount of the lien, those proceeds are paid to the former owner of the property.
{¶8} The General Assembly adopted an alternative, expedited, procedure for handling
tax foreclosures on abandoned property. R.C. 323.66. Instead of selling the property at a public
auction, it can be transferred to a land bank. R.C. 323.78(B). The transfer deems the liens
satisfied. Id. No taxes are collected and no funds are paid to the fiscal office as a result of this
transfer.
{¶9} This procedure is abbreviated, but it is not without protections for property
owners. For example, the Board of Revision must provide notice to the property owner. The
Board, on its own or upon motion of a party, may transfer a case from the Board of Revision to
a common pleas or municipal court with jurisdiction to handle any challenges to the foreclosure.
R.C. 323.691(A)(1); R.C. 323.70(B).
{¶10} Even after the Board’s foreclosure decision, the property owner has remedies.
R.C. 323.65(J). The owner may pay the outstanding amount due within 28 days to redeem the
property. The owner may also file an appeal in the court of common pleas. R.C. 323.79. In this
appeal, the owner may raise new issues that were not presented to the Board or Revision. Id.The Facts Alleged in the Complaint
{¶11} Turning to the facts alleged in the complaint, there is no dispute that the taxes
were delinquent on the property owned by US Bank that is the subject of this action. This
property was foreclosed upon in 2017 pursuant to the expedited process that allows for property
to be transferred to the land bank rather than sold at auction.
{¶12} The Board of Revision held a hearing on November 17, 2017. US Bank did not
appear at that hearing. Following the hearing, the Board entered an Adjudication of Foreclosure
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Direct Transfer. This adjudication ordered that US Bank’s right of redemption would be
extinguished after 28 days, as required by R.C. 323.78. It also provided for the direct transfer of
the property to the land bank at the expiration of the redemption period. US Bank did not appeal
this decision to the court of common pleas. R.C. 323.79.
{¶13} After 28 days had passed, in December 2017, the Board ordered the sheriff to
transfer the property to the land bank. It also ordered the sheriff to issue a deed to the land bank
for the property.
{¶14} The complaint alleges that the direct transfer of the property to the land bank
constituted a taking pursuant to the Ohio and United States Constitutions. It further alleges that,
by this transfer, Summit County deprived US Bank of its ownership of the property without
providing compensation for the value of the property, which exceeded the amount owed in taxes.
US Bank filed this action three years after the foreclosure process terminated to seek a writ of
mandamus to order Summit County to begin appropriation proceedings.
Summit County’s Motion to Dismiss and US Bank’s Response
{¶15} Summit County moved to dismiss. It argued, among other things, that US Bank
was not entitled to mandamus relief because it had an adequate remedy at law and that US Bank
was not entitled to relief because a taking cannot arise from the enforcement of tax laws.
{¶16} We conclude that US Bank had an adequate remedy at law, which is dispositive
of its claim for mandamus relief. Accordingly, we address only that argument.
Analysis
{¶17} As noted above, the property was sold through an expedited tax foreclosure
proceeding. R.C. 323.66. After the complaint was filed, the clerk served the complaint. Pursuant
to R.C. 323.69(B)(1), the clerk’s notice stated that the land would be sold at public auction or
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otherwise disposed of. The notice also provided that the land could be redeemed by paying the
total amount due at any time before the confirmation of sale or transfer of the land. Id.{¶18} The statutory scheme provides an opportunity for a property owner to answer the
complaint. R.C. 323.72(A)(1). In the answer, the owner may assert that the amount due has been
paid, challenge the amount due, raise issues regarding service, and challenge whether the
property is abandoned land. Id.{¶19} If the property is subject to foreclosure, it must be sold at a public auction or it
may be transferred to a land bank. R.C. 323.78(A). If the latter option is pursued, no sale takes
place, but the owner has a 28-day period to redeem the property. R.C. 323.78(A). If the property
is not redeemed, the Board of Revision shall transfer the property to the land bank. R.C.
323.78(B).
{¶20} The transfer to the land bank is free and clear of all liens. Id. The transfer is also
authorized even if the fair market value of the property exceeds the value of the liens, other
charges, and the costs of the action. Id.{¶21} Even though this foreclosure process is expedited, the statute still provides a right
to appeal. R.C. 323.79. An aggrieved party may file an appeal in the court of common pleas
within 14 days of the journalization of the transfer to the land bank. Id. This appeal is unique as
compared to other administrative appeals because it proceeds as an appeal de novo. Id. The
appeal may include issues raised in the proceedings before the Board of Revision as well as other
issues that are raised for the first time on appeal. Id.{¶22} Having outlined the procedural path the property traveled during the foreclosure
proceedings, we now consider the alternative remedies that were available to US Bank. The
complaint is silent about whether US Bank appeared in the foreclosure proceedings. The
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attachments to the complaint indicate that all parties were served and US Bank has not disputed
in the complaint that it was not properly served. In its response to Summit County’s motion to
dismiss, however, US Bank noted in passing that it “was not properly served with the summons
and complaint.” US Bank did not mention this in its complaint for mandamus relief, and it does
not mention it further or rely on it in its response to the motion to dismiss, so we do not consider
it in our analysis.
{¶23} US Bank has also not alleged in the complaint that it did not receive the required
notice of the foreclosure proceedings. Because US Bank failed to participate, it missed its
opportunity to move the Board of Revision to transfer the action to a common pleas or municipal
court for further proceedings. R.C. 323.70.
{¶24} After the foreclose was completed, US Bank also had the statutory right to appeal
the decision to the court of common pleas. But it did not. Had it appealed, it could have presented
arguments even though it had failed to appear and raise them during the foreclosure proceedings
before the Board of Revision.
{¶25} As just outlined, US Bank had several remedies available to it short of seeking a
writ of mandamus. Although those remedies are no longer available, that does not mean the
remedies are inadequate. State ex rel. Gaydosh v. Twinsburg, 93 Ohio St.3d 576, 579 (2001).
{¶26} Finally, we note that our conclusion is consistent with the recent decisions of the
Sixth and Eighth Districts in nearly identical cases. State ex rel. US Bank v. Lucas Cty., 6th Dist.
Lucas No. L-21-1087, ¶ 23 (Aug. 5, 2021); State ex rel. US Bank v. Cuyahoga Cty., 8th Dist.
Cuyahoga No. 110297, 2021-Ohio-2524, ¶ 33.
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Conclusion
{¶27} US Bank had plain and adequate remedies at law. Accordingly, it is not entitled
to the writ of mandamus. Summit County’s motion to dismiss is granted, and this case is
dismissed.
{¶28} Costs are taxed to US Bank. The clerk of courts is hereby directed to serve upon
all parties not in default notice of this judgment and its date of entry upon the journal. See Civ.R.
58.
LYNNE S. CALLAHAN
FOR THE COURT
HENSAL, J.
TEODOSIO, J.
CONCUR.
APPEARANCES:
MARC E. DANN and ANDREW M. ENGEL, Attorneys at Law, for Relator.
SHERRI BEVAN WALSH, Prosecuting Attorney, and REDINA M. VANVOROUS and
RAYMOND J. HARTSOUGH, Assistant Prosecuting Attorneys, for Respondent.