Case Title: Rural Health Collaborative of S. Ohio, Inc. v. Testa

Citation: 2016-Ohio-508

Docket Number: 2014-0963

State: ohio

Court: Ohio Supreme Court

Date: 2016-02-16T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Rural Health Collaborative of S. Ohio, Inc. v. Testa, Slip Opinion No. 2016-Ohio-508.] 
 
 
 
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. 2016-OHIO-508 
RURAL HEALTH COLLABORATIVE OF SOUTHERN OHIO, INC., APPELLEE, v. 
TESTA, TAX COMMR., APPELLANT. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Rural Health Collaborative of S. Ohio, Inc. v. Testa,  
Slip Opinion No. 2016-Ohio-508.] 
Taxation—Charitable-use exemption of real property from taxation—Board of Tax 
Appeals’ finding that property owner qualified as charitable institution was 
reasonable and lawful—Board’s grant of exemption under R.C. 
5709.121(A) was premature in absence of full analysis of claim under R.C. 
5709.121(A)(1)—Grant of exemption vacated and cause remanded for 
further proceedings. 
(No. 2014-0963—Submitted November 17, 2015—Decided February 16, 2016.) 
APPEAL from the Board of Tax Appeals, No. 2012-3421. 
____________________ 
 
 
SUPREME COURT OF OHIO 
 
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Per Curiam. 
{¶ 1} This is an appeal by the tax commissioner from a decision of the 
Board of Tax Appeals (“BTA”), which granted a charitable-use exemption to a 
facility in Adams County that provides dialysis services.  The property is owned by 
appellee, Rural Health Collaborative of Southern Ohio, Inc. (“Rural Health”), and 
operated under lease by Dialysis Clinic, Inc.  Rural Health applied for the 
exemption, which the tax commissioner denied, relying primarily on this court’s 
holding in Dialysis Clinic, Inc. v. Levin, 127 Ohio St.3d 215, 2010-Ohio-5071, 938 
N.E.2d 329.  The BTA reversed, concluding that the property qualified under R.C. 
5709.121(A)(2) because Rural Health itself qualified as a charitable institution. 
{¶ 2} On appeal, the tax commissioner argues both that Rural Health does 
not qualify as a charitable institution and that the Dialysis Clinic decision precludes 
exemption under the standards set forth in R.C. 5709.121.  We conclude that the 
BTA’s finding that Rural Health is a charitable institution is both reasonable and 
lawful, and we therefore affirm the finding.  But we hold that the BTA’s grant of 
exemption under R.C. 5709.121 was premature, because the BTA did not fully 
analyze the claim under R.C. 5709.121(A)(1).  We therefore vacate the BTA’s grant 
of exemption, and we remand for further proceedings consistent with this opinion. 
FACTUAL BACKGROUND 
The property at issue 
{¶ 3} The property at issue is two acres, improved with a one-story brick 
building, located in the Ohio Valley Local School District in Seaman in Adams 
County.  The land was donated, and the building was constructed with funds that 
Rural Health received through a federal grant. 
The owner:  Rural Health Collaborative of Southern Ohio, Inc. 
{¶ 4} At the time it was formed in 2001, Rural Health had four directors.  
The members were three nonprofit county hospitals for Adams, Brown, and 
Highland counties—Brown later withdrew when it became a for-profit hospital—
January Term, 2016 
 
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plus a nonprofit organization that provides physicians to underserved areas 
throughout Ohio.  Rural Health’s purposes focus on promoting health-care 
initiatives in southern Ohio.  Rural Health has no staff; its directors and the staff of 
the members carry out Rural Health’s activities. 
{¶ 5} Rural Health’s directors discuss medical needs in the region from the 
perspective of the member institutions and apply for grants to supply services 
without charge.  Grant-funded programs that Rural Health has conducted include a 
tobacco-cessation program, a women-and-children-uninsured program focusing on 
pregnancy care, a diabetic-education program, and a managed-care grant used to 
assess the impact of managed care on providers.  Blood drives are another activity 
organized by Rural Health.  As of the time of the BTA hearing, none of the grant-
supported programs was still being implemented. 
{¶ 6} One need identified early by the board of directors was for more 
convenient dialysis services than the member institutions were able to provide.  In 
particular, reducing travel times was important because patients feel increasingly 
ill on their way to dialysis treatments, which they must undergo every two to three 
days.  Also, the treatments, which last three to four hours, leave patients feeling 
exhausted. 
{¶ 7} To address this need, Rural Health resolved to establish a dialysis 
clinic; it received the donation of land, obtained a grant to construct the building, 
and identified Dialysis Clinic, Inc. (“DCI”), as the provider of dialysis services to 
operate the clinic. 
The lease agreement 
{¶ 8} Rural Health and DCI entered into a contract entitled “commercial 
lease agreement” on August 30, 2005.  The agreement assigned maintenance and 
repair duties to Rural Health as landlord, required that utility payments be made by 
DCI as tenant, and created a mutual liability-insurance obligation.  The original 
lease term ran for five years beginning July 1, 2005; an addendum provided for a 
SUPREME COURT OF OHIO 
 
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new five-year term running from 2010 to 2015.  The rent was initially set for three 
years at $53,556 annually, payable in monthly installments.  In the fourth year, the 
annual rent increased to $71,412, with subsequent increases at three-year intervals 
based on the Consumer Price Index.  In 2012, however, the parties adjusted the 
lease to postpone rent escalations after DCI incurred operating losses at the site. 
The evidence regarding the charitable nature of DCI and the property use 
{¶ 9} According to DCI’s indigency policy, the dialysis treatments it 
provides are “not a charity or gift to patients.  DCI retains all rights to refuse to 
admit and treat a patient who has no ability to pay.”  But the testimony presented 
at the BTA hearing establishes a larger context for understanding this provision. 
{¶ 10} DCI’s general counsel testified that for Medicare patients, federal 
regulations generally required DCI to demand and seek to collect the 20 percent 
portion that is the patient’s responsibility.  He added that federal statutes 
specifically prohibit DCI from waiving the co-insurance. 
{¶ 11} In light of the strict Medicare regulations, DCI’s indigency policy 
was designed to avoid putting the patient through the collection process.  The 
administrator of the Seaman clinic testified that Medicare would “allow us to write 
those [unpaid amounts] off” under one of two circumstances:  if the clinic “[went] 
through a reasonable collection process,” or if, alternatively, the clinic made “a fair 
determination” that the patient was unable to pay. 
{¶ 12} When asked about the anticharity language of the indigency policy, 
DCI’s general counsel explained that the point of the language was to convey that 
DCI could not provide Medicare patients with charity “in th[e] traditional sense”—
i.e., it could not simply accept Medicare payment and waive copays.  Reserving the 
right to refuse treatment is “part of [DCI’s] financial stewardship,” in that DCI must 
“make it clear that we may have to have some analysis for each patient.”  The policy 
thereby serves in part as a means by which the facility is able to procure the patient’s 
cooperation in certifying his or her need. 
January Term, 2016 
 
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{¶ 13} DCI’s general counsel also testified that the indigency policy 
reached beyond the Medicare patients because “there’s so many concepts in 
Medicare that talk about nondiscrimination between payor sources * * * [that] we 
decided that it was only fair” to apply the policy “to any patient that has a patient 
responsibility balance and that might need assistance.”  DCI encourages uninsured 
patients to apply for Medicaid; they typically qualify, at least for certain periods of 
time.  When asked whether “DCI limit[s] services to patients for which [it is] fully 
compensated for those services,” the general counsel answered:  “No.” 
{¶ 14} Similarly, when asked whether he was aware of any instance where 
a patient had been refused service for the inability to pay for treatment, DCI’s clinic 
administrator, answered:  “No.”  He later reiterated:  “At neither clinic, neither at 
Seaman nor Portsmouth, we’ve never turned a patient away due to inability to pay.”  
The administrator elaborated that that was part of DCI’s mission and corporate 
culture:  “I’ve worked in health care for over 25 years and I’ve worked with 
hospitals and other health care organizations, * * * and I’ve never seen a company 
that walks the talk as far as providing services for all patients as DCI has.” 
{¶ 15} Testimony and documentation show that in each fiscal year from 
2006 until the BTA hearing, operations at the Seaman clinic experienced a loss 
because expenses exceeded the revenues generated by the dialysis treatments. 
PROCEDURAL HISTORY 
{¶ 16} Rural Health filed its exemption application on October 13, 2006, 
and the tax commissioner issued a final determination on June 20, 2012.  Relying 
on Dialysis Clinic, Inc. v. Levin, 127 Ohio St.3d 215, 2010-Ohio-5071, 938 N.E.2d 
329, the commissioner denied the exemption based on the reservation of the right 
to refuse treatment for inability to pay set forth in DCI’s indigency policy.  Rural 
Health appealed to the BTA, which held a hearing on February 4 and March 6, 
2014, at which Rural Health presented the testimony of six witnesses and numerous 
exhibits. 
SUPREME COURT OF OHIO 
 
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{¶ 17} The BTA issued its decision on May 8, 2014.  It conducted its 
analysis under R.C. 5709.121(A)(2), which deems property to be used exclusively 
for charitable purposes if it is owned by a charitable institution and made available 
under the institution’s direction and control in furtherance of or incidental to the 
institution’s charitable purposes, and not with a view to profit.  After discussing the 
Dialysis Clinic case, the BTA found that in contrast to the earlier case, “the focus 
in this matter is whether [Rural Health] is a charitable institution, not DCI.”  BTA 
No. 2012-3421, 2014 WL 2809179, *3 (May 8, 2014).  The BTA therefore found 
that Rural Health qualified as a charitable institution.  Id. 
{¶ 18} The BTA then turned to the question whether the subject property is 
“made available under the direction or control of such institution * * * for use in 
furtherance of or incidental to its charitable * * * purposes and not with a view to 
profit.”  R.C. 5709.121(A)(2).  From Cincinnati Community Kollel v. Testa, 135 
Ohio St.3d 219, 2013-Ohio-396, 985 N.E.2d 1236, the BTA extracted the principle 
that “ ‘the focus of the inquiry should be on the relationship between the actual use 
of the property and the purpose of the institution.’ ”  2014 WL 2809179 at *3, 
quoting Cincinnati Community Kollel at ¶ 28 (concerning question “whether an 
educational institution uses its property in furtherance of or incidental to its 
educational purposes” within the meaning of R.C. 5709.121(A)(2)).  Applying that 
principle to this case, the BTA concluded that the Seaman clinic was operated in 
furtherance of charitable purposes.  No separate analysis was performed as to 
whether Rural Health exercised direction or control over the use of the property.  
Finally, the BTA determined that the property was not used with a view to profit 
and therefore granted the exemption pursuant to 5709.121(A)(2).  Id. at *4-5. 
THE TAX COMMISSIONER’S PROPOSITIONS OF LAW 
{¶ 19} In his appeal from the BTA’s decision, the tax commissioner 
presents the following three propositions of law: 
 
January Term, 2016 
 
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1. Under Dialysis Clinic v. Levin, real property is not entitled to 
charitable exemption where it is used by a non-charitable 
institution such as Dialysis Clinic, Inc. to provide non-charitable 
dialysis care pursuant to an indigence policy that discriminates 
against those who cannot pay. 
2. A property owner is not a charitable institution and exemption 
is defeated under R.C. 5709.121 where the owner’s only 
longstanding activity is leasing property to a health care provider 
and the owner does not itself provide health care services. 
3. To qualify leased property for charitable exemption pursuant to 
R.C. 5709.121, the property must be leased to and from a 
“charitable institution” in accordance with division (A)(1) of 
R.C. 5709.121, not the mutually exclusive division (A)(2).  
Further, leased property qualifies for charitable exemption only 
if it satisfies a strict standard for “exclusive charitable use.” 
 
ANALYSIS 
{¶ 20} R.C. 5709.12(B) states that “[r]eal * * * property * * * belonging to 
institutions that is used exclusively for charitable purposes shall be exempt from 
taxation.”  Traditionally, qualifying for the charitable-use exemption required the 
property owner to be using the property for the designated purposes—i.e., no matter 
how charitable the use otherwise appeared to be, a lease would destroy the 
possibility of obtaining the exemption, because the user of the property under the 
lease would not be the owner.  See First Baptist Church of Milford, Inc. v. Wilkins, 
110 Ohio St.3d 496, 2006-Ohio-4966, 854 N.E.2d 494, ¶ 12, citing Lincoln Mem. 
Hosp., Inc. v. Warren, 13 Ohio St.2d 109, 110, 235 N.E.2d 129 (1968). 
{¶ 21} Against that background, the General Assembly enacted R.C. 
5709.121 in 1969.  Am.Sub.H.B. No. 817, 133 Ohio Laws, Part III, 2646-2647.  In 
SUPREME COURT OF OHIO 
 
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his concurring opinion in White Cross Hosp. Assn. v. Bd. of Tax Appeals, 38 Ohio 
St.2d 199, 203, 311 N.E.2d 862 (1974), Justice Stern pronounced his oft-cited view 
that “the overall purpose of R.C. 5709.121 is to declare that the ownership and use 
of property need not coincide for that property to be tax exempt.”  That this appeal 
involves leased property is not in dispute; accordingly, the path to a charitable-use 
exemption (if there is one) lies through R.C. 5709.121.  It is also a point of 
distinction from Dialysis Clinic, 127 Ohio St.3d 215, 2010-Ohio-5071, 938 N.E.2d 
329, on which the tax commissioner relies:  there was no lease in Dialysis Clinic.  
See id. at ¶ 4. 
{¶ 22} R.C. 5709.121 allows for two possible avenues to a charitable-use 
exemption in this case: 
 
(A) 
Real property * * * belonging to a charitable * * * 
institution * * * shall be considered as used exclusively for 
charitable * * * purposes by such institution * * * if it meets one of 
the following requirements: 
(1) 
It is used by such institution * * * or by one or more 
other such institutions * * * under a lease, sublease, or other 
contractual arrangement: 
(a) 
 * * * 
(b) 
  For * * * charitable * * * purposes. 
(2) 
  It is made available under the direction or control of 
such institution * * * for use in furtherance of or incidental to its 
charitable * * * purposes and not with the view to profit. 
 
 
 
January Term, 2016 
 
9
The BTA did not abuse its discretion in determining that Rural Health qualifies as 
a charitable institution 
{¶ 23} In support of his second proposition of law, the tax commissioner 
challenges the BTA’s finding that Rural Health qualifies as a charitable institution.  
The determination whether a property owner qualifies as a charitable institution 
under R.C. 5709.121 requires examination of the “core activity” of the institution 
and determining whether that activity qualifies as charitable for property-tax 
purposes.  Dialysis Clinic, 127 Ohio St.3d 215, 2010-Ohio-5071, 938 N.E.2d 329, 
at ¶ 28-30 (rejecting the contention that the tax-exempt status of the applicant under 
Section 501(c)(3) of the Internal Revenue Code automatically established its 
character as a charitable institution for property-tax purposes); see also OCLC 
Online Computer Library Ctr., Inc. v. Kinney, 11 Ohio St.3d 198, 201, 464 N.E.2d 
572 (1984). 
{¶ 24} Also pertinent in this context is the standard of review that we apply 
to the determinations of the BTA.  Although we have not explicitly so stated, we 
have in past decisions treated whether an applicant qualifies as a charitable 
institution as primarily an issue of fact, the determination of which lies within the 
province of the taxing authorities and thus merits our deference.  See Dialysis Clinic 
at ¶ 31-35 (affirming BTA’s determination of charitable status based on its being 
“reasonable and lawful”); Northeast Ohio Psych. Inst. v. Levin, 121 Ohio St.3d 292, 
2009-Ohio-583, 903 N.E.2d 1188, ¶ 20 (same); OCLC (same).  We approach the 
BTA’s determination at issue here in the same spirit of deference.  See EOP-BP 
Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1, 2005-Ohio-
3096, 829 N.E.2d 686, ¶ 9, 14 (BTA’s weighing of evidence and determination of 
credibility of witnesses reviewed under abuse-of-discretion standard). 
{¶ 25} Here the record shows that Rural Health is an organization serving 
as an instrumentality of three nonprofit institutions in the region.  The BTA noted 
the circumstances of Rural Health’s formation and its work in obtaining grants for 
SUPREME COURT OF OHIO 
 
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tobacco-cessation funding, pregnancy care and education, diabetes prevention and 
education, and managed-care planning, along with community-care initiatives such 
as blood drives.  BTA No. 2012-3421, 2014 WL 2809179, at *3.  The BTA viewed 
the construction and leasing of the dialysis clinic within the context of that larger 
body of activities, and we conclude that its determination in this regard is both 
reasonable and lawful. 
{¶ 26} Seeking reversal of the BTA’s finding, the tax commissioner asserts 
as controlling our decision in Northeast Ohio, in which we affirmed the BTA’s 
denial of exemption based on its determination that Northeast Ohio Psychiatric 
Institute, the lessor of a building to a charitable provider of psychiatric services, 
could not qualify as a charitable institution.  In that case, the record demonstrated 
that Northeast Ohio was landlord to both for-profit and charitable lessees and 
provided staffing services to the lessees as well.  Northeast Ohio Psychiatric 
Institute v. Wilkins, BTA No. 2005-M-1683, 2007 WL 4463267, *4 (Dec. 14, 
2007).  Based on the entire record before it, the BTA found that although Northeast 
Ohio was a nonprofit corporation, its “activities are more akin to commercial, 
income-producing activities.”  Id.  On appeal, we rejected Northeast Ohio’s 
argument that it qualified as a charitable institution as to its lease with the provider.  
We insisted that the standard for Northeast Ohio’s qualification for the exemption 
was “based on the range of its own activities” rather than those of a single one of 
its lessees for whose premises it sought a split-listed exemption.  (Emphasis sic.)  
Northeast Ohio, 121 Ohio St.3d 292, 2009-Ohio-583, 903 N.E.2d 1188, at ¶ 14, 
citing OCLC, 11 Ohio St.3d at 201, 464 N.E.2d 572. 
{¶ 27} As is evident from the foregoing discussion, Northeast Ohio does 
not militate against Rural Health’s qualifying as a charitable institution in this case.  
The facts of Northeast Ohio differ from those here.  In this case, the BTA did 
consider the “range of [Rural Health’s] own activities” and concluded that the entity 
did qualify as a charitable institution. 
January Term, 2016 
 
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{¶ 28} The tax commissioner attacks on several other factual grounds the 
BTA’s finding that Rural Health is a charitable institution within the meaning of 
R.C. 5709.121.  But the commissioner fails to show that the BTA abused its fact-
finding discretion.  Specifically: 
 Whereas the BTA looked at a range of activities facilitated by Rural 
Health that were “made available to the community at large without 
charge,” BTA No. 2012-3421, 2014 WL 2809179, at *3, the 
commissioner asserts that leasing to DCI is Rural Health’s “core 
activity.”  We see no reason to disturb the BTA’s determination of Rural 
Health’s core activities. 
 The commissioner emphasizes that the DCI lease is a market-rate lease.  
But unlike the property owner in Northeast Ohio, which engaged in 
leasing and staffing services that generated revenue, see id. at ¶ 15, 
Rural Health was found to engage in a range of charitable activities.  
The fact that the DCI lease generates revenue for Rural Health does not 
by itself destroy Rural Heath’s status as a charitable institution.  See Girl 
Scouts-Great Trail Council v. Levin, 113 Ohio St.3d 24, 2007-Ohio-
972, 862 N.E.2d 493, ¶ 17; Community Health Professionals, Inc. v. 
Levin, 113 Ohio St.3d 432, 2007-Ohio-2336, 866 N.E.2d 478, ¶ 23. 
 The commissioner points out that Rural Health has no employees of its 
own and that it uses the employees of its member institutions.  We are 
not persuaded, however, that as a matter of law this factor undermines 
the finding that Rural Health qualifies as a charitable institution. 
 The commissioner notes that various activities coordinated by Rural 
Health at meetings or in communications are actually conducted by the 
member hospitals.  But determining whether the coordination itself 
SUPREME COURT OF OHIO 
 
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constitutes an activity is a factual determination within the province of 
the BTA. 
Rural Health does not exercise “direction and control” within the meaning of 
R.C. 5709.121(A)(2) 
{¶ 29} In support of his third proposition of law, the tax commissioner 
argues that R.C. 5709.121(A)(1) applies to the exclusion of R.C. 5709.121(A)(2).  
The commissioner offers two forms of this argument.  First, the commissioner 
contends that only division (A)(1) applies in this case because it expressly refers to 
those situations in which there is an actual lease.  In the alternative, the 
commissioner contends that the existence of DCI’s lease and other circumstances 
preclude the finding that Rural Health exercises “direction and control” over the 
use of the property, which is an element that division (A)(2) explicitly requires. 
{¶ 30} Our review of the case law leads us to reject the first form of the tax 
commissioner’s argument.  As Rural Health points out, we have acknowledged that 
lease-like contractual arrangements can constitute one way that property is “made 
available” under division (A)(2).  See Case W. Res. Univ. v. Wilkins, 105 Ohio St.3d 
276, 2005-Ohio-1649, 825 N.E.2d 146, ¶ 30 (memorandum of understanding 
between university and fraternity by which the latter had “exclusive use” of a house 
to supply residence to fraternity members satisfied the “made available” element of 
division (A)(2)); Community Health Professionals at ¶ 19-20 (tax commissioner 
conceded that property leased by one affiliated nonprofit to the other affiliates was 
made available “under direction or control” of the lessor).  While he points to 
reasons why these cases do not definitively establish the point, the tax 
commissioner cannot avoid his longstanding acceptance of leasing situations as 
satisfying the “made available” standard.  See also Humane Soc. Found. of Hancock 
Cty. v. Tracy, BTA No. 98-J-884, 1999 Ohio Tax LEXIS 1552, 4 (Oct. 15, 1999) 
(charitable entity leasing kennel to other charitable entity concededly satisfied the 
“made available under direction and control” requirement of division (A)(2)). 
January Term, 2016 
 
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{¶ 31} On the other hand, our review of the record and the BTA decision 
persuade us that the alternative form of the argument raised in support of the tax 
commissioner’s third proposition of law is correct.  Ordinarily, by granting 
exclusive possessory rights to the lessee, a lease will defeat a claim that the 
lessor/owner is exercising “direction and control” over activities on the premises, 
an explicit condition for R.C. 5709.121(A)(2) to apply.  On this record, there is no 
indication that Rural Health exercises any authority over the provision of dialysis 
services; DCI is in that business and conducts that operation on the premises. 
{¶ 32} In purporting to apply R.C. 5709.121(A)(2), the BTA skipped over 
the “direction and control” requirement completely, plunging ahead to consider 
whether the provision of dialysis was “in furtherance of or incidental to” Rural 
Health’s purposes.  Given the absence of any evidence that could support a finding 
of direction and control by Rural Health, the BTA erred in granting the exemption 
under the authority of R.C. 5709.121(A)(2). 
On remand, the BTA should complete the analysis under R.C. 5709.121(A)(1) 
{¶ 33} Reversing the grant of exemption based on R.C. 5709.121(A)(2) 
does not mean, however, that we must conclude that the exemption claim should 
be denied.  That ruling would be premature because the BTA did not fully consider 
the claim under R.C. 5709.121(A)(1). 
{¶ 34} Under division (A)(1), there are two remaining and closely related 
elements to be considered on remand:  whether DCI as lessee can qualify as a 
charitable institution, since both parties to a lease must so qualify under division 
(A)(1), and whether DCI’s provision of services on site qualifies as charitable.  On 
remand, the BTA should consider both of these elements using the standard for 
exemption set forth in Vick v. Cleveland Mem. Med. Found., 2 Ohio St.2d 30, 206 
N.E.2d 2 (1965), paragraph two of the syllabus—i.e., whether DCI is “providing 
services to those in need, without regard to race, creed, color or ability to pay.” 
SUPREME COURT OF OHIO 
 
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{¶ 35} To be sure, the tax commissioner contends in support of his first 
proposition of law that our decision in Dialysis Clinic, 127 Ohio St.3d 215, 2010-
Ohio-5071, 938 N.E.2d 329, bars a finding in Rural Health’s favor.  We now turn 
to that contention. 
Our decision in Dialysis Clinic is not controlling precedent here 
{¶ 36} The tax commissioner contends that Rural Health cannot prevail 
when R.C. 5709.121(A)(1) is applied in this case, because this court previously 
determined in Dialysis Clinic that DCI does not qualify as a charitable institution.  
The commissioner notes that in Dialysis Clinic, this court quoted and relied in part 
on the language of the same indigency policy in its decision affirming the BTA’s 
denial of the exemption.  Id. at ¶ 34-35.  Under the tax commissioner’s theory, 
Dialysis Clinic is controlling precedent, particularly on the question whether DCI 
qualifies as a charitable institution.  We conclude that the commissioner’s claim of 
controlling precedent is mistaken. 
{¶ 37} As an initial point, the tax commissioner explicitly disclaims 
reliance on collateral estoppel.  It follows that whatever the merits of a claim of 
collateral estoppel here, that claim has been waived. 
{¶ 38} Instead, the tax commissioner appears to invoke the doctrine of stare 
decisis, according to which courts follow “controlling precedent, thus creating 
stability and predictability in our legal system.”  Westfield Ins. Co. v. Galatis, 100 
Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, ¶ 1.  But stare decisis typically 
applies to principles of law, not findings of fact.  State v. Bethel, 10th Dist. Franklin 
No. 07AP-810, 2008-Ohio-2697, ¶ 26 (“Stare decisis has two aspects: (1) that in 
the absence of overriding considerations courts will adhere to its [sic] own 
previously announced principles of law; and (2) that courts are bound by and must 
follow decisions of a reviewing court that has decided the same issue”); Terrell v. 
Williams, 10th Dist. Franklin No. 79AP-16, 1979 WL 209087, *2 (May 24, 1979) 
January Term, 2016 
 
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(stare decisis is “based upon following controlling legal principals [sic] from former 
judgments,” and is “not applicable where the prior case decided factual matters”). 
{¶ 39} In Dialysis Clinic, the BTA had determined as a matter of fact that 
DCI did not constitute a charitable institution, and this court affirmed because that 
finding was reasonable, lawful, and supported by evidence.  Id. at ¶ 30 (“we must 
determine whether the BTA acted reasonably and lawfully when it found the DCI 
did not qualify as a charitable institution”), ¶ 34 (“We are not persuaded * * * that 
[other evidence indicating charitable purpose] required the BTA to find that DCI 
satisfied the nondiscrimination requirement, given that DCI’s own policy statement 
explicitly reserved the right to refuse to treat indigent patients”). 
{¶ 40} Because this court’s ruling in Dialysis Clinic merely affirmed the 
BTA’s finding of fact, the BTA was free to evaluate the evidence in the present 
case and make a fresh determination whether DCI could qualify as a charitable 
institution for purposes of 5709.121(A)(1).  Stare decisis did not bind the BTA to 
the conclusion that it had drawn in the earlier case, in which it was presented with 
a different record developed by a different exemption applicant. 
CONCLUSION 
{¶ 41} For the foregoing reasons, we affirm the BTA’s finding that Rural 
Health qualified as a charitable institution under R.C. 5709.121(A), but we reverse 
the BTA’s finding that the property qualified for a charitable-use exemption under 
R.C. 5709.121(A)(2).  Additionally, we vacate the BTA’s decision and remand for 
consideration whether the property qualifies under the remaining criteria of R.C. 
5709.121(A)(1). 
Judgment accordingly. 
O’CONNOR, C.J., and PFEIFER, LANZINGER, FRENCH, and O’NEILL, JJ., 
concur. 
O’DONNELL and KENNEDY, JJ., dissent. 
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SUPREME COURT OF OHIO 
 
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O’DONNELL, J., dissenting. 
{¶ 42} Respectfully, I dissent. 
{¶ 43} In my view, our decision in Dialysis Clinic, Inc. v. Levin, 127 Ohio 
St.3d 215, 2010-Ohio-5071, 938 N.E.2d 329, is a controlling precedent as argued 
by the tax commissioner, and on that basis I would reverse the decision of the BTA. 
KENNEDY, J., concurs in the foregoing opinion. 
_________________ 
 
Bricker & Eckler, L.L.P., and Mark A. Engel, for appellee. 
 
Michael DeWine, Attorney General, and David D. Ebersole and Barton A. 
Hubbard, Assistant Attorneys General, for appellant. 
_________________