Title: N. Olmsted City School Dist. Bd. of Edn. v. Cleveland Mun. School Dist. Bd. of Edn.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as N. Olmsted City School Dist. Bd. of Edn. v. Cleveland Mun. School Dist. Bd. of Edn., 
108 Ohio St.3d 479, 2006-Ohio-1504.] 
 
 
BOARD OF EDUCATION OF THE NORTH OLMSTED CITY SCHOOL DISTRICT, 
APPELLANT, v. BOARD OF EDUCATION OF THE CLEVELAND MUNICIPAL 
SCHOOL DISTRICT, APPELLEE, ET AL. 
[Cite as N. Olmsted City School Dist. Bd. of Edn. v. Cleveland Mun. School 
Dist. Bd. of Edn., 108 Ohio St.3d 479, 2006-Ohio-1504.] 
Taxation  — Personal property – Revenue allocated to wrong school district due 
to mistake of taxpayer – Misdirected revenue not recoverable under 
unjust-enrichment theory. 
(No. 2005-0132 — Submitted October 25, 2005 — Decided April 12, 2006.) 
APPEAL from the Court of Appeals for Cuyahoga County,  
No. 84372, 2004-Ohio-6422. 
__________________ 
 
ALICE ROBIE RESNICK, J. 
{¶ 1} In this appeal, a portion of a school district’s personal property tax 
revenue was misdirected to another school district due to the mistake of a 
taxpayer.  The issue presented is whether a school district that fails to receive all 
of its revenue under its tax levy can proceed pursuant to a theory of unjust 
enrichment to recover from a school district that was credited with money it 
should not have received.  For the reasons that follow, we affirm the judgment of 
the court of appeals that unjust-enrichment recovery is unavailable. 
Facts 
{¶ 2} On June 30, 2003, appellant, the Board of Education of the North 
Olmsted City School District (“the North Olmsted Board” or “the North Olmsted 
School District”) filed a complaint in the Court of Common Pleas of Cuyahoga 
County against appellee, the Board of Education of the Cleveland Municipal 
School District (“the Cleveland Board” or “the Cleveland School District”).  The 
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North Olmsted Board sought to recover personal property tax money that it 
claimed was improperly credited to the Cleveland School District for tax years 
1997 and 1998, alleging that the money should have instead gone to the North 
Olmsted School District. 
{¶ 3} The key facts are not in dispute.  The money in question was 
distributed to the Cleveland School District because Circuit City Stores, Inc. filed 
incorrect intercounty personal property tax returns for tax years 1997, 1998, 1999, 
and 2000 erroneously stating that a Circuit City store located in the North 
Olmsted Board’s taxing district was located in the Cleveland Board’s taxing 
district.  As a result of the errors, the Cuyahoga County Auditor allocated 
personal property tax proceeds from the store to the Cleveland School District for 
the relevant tax years. 
{¶ 4} When the mistakes came to light, Circuit City was able to amend 
its personal property returns for tax years 1999 and 2000, and the county auditor 
redistributed the proceeds from the property for those tax years from the 
Cleveland School District to the North Olmsted School District.  However, the 
North Olmsted Board alleged in its complaint that “[p]ursuant to statute, Circuit 
City was unable to amend its annual inter-county personal property tax returns for 
tax years 1997 and 1998,” and that, therefore, the county auditor could not 
redistribute the proceeds for those tax years. 
{¶ 5} In its complaint, the North Olmsted Board sought recovery of 
$74,849 plus interest under a theory of unjust enrichment from the Cleveland 
Board for tax years 1997 and 1998.  The Cleveland School District and the North 
Olmsted School District levied personal property taxes at different rates for those 
tax years.  Therefore, the amount of recovery sought was not the amount of 
personal property taxes paid by Circuit City to the Cleveland School District for 
the tax years at issue, but the amount that Circuit City would have paid under the 
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North Olmsted School District’s levy for those tax years if Circuit City had 
reported the correct location of its store. 
{¶ 6} Both parties moved for summary judgment.  The trial court granted 
summary judgment to the North Olmsted Board for the full amount of recovery 
sought, stating that “[t]his case is on all fours” with Rocky River City School Dist. 
Bd. of Edn. v. Fairview Park City School Dist. Bd. of Edn. (1989), 63 Ohio 
App.3d 385, 579 N.E.2d 217, a decision of the Eight District Court of Appeals 
that the trial court described as “controlling precedent.” 
{¶ 7} The Eighth District Court of Appeals reversed the trial court’s 
ruling in favor of the North Olmsted Board on the issue of recovery, holding that 
the North Olmsted Board could not recover under principles of unjust enrichment 
in this situation.  In so doing, the court of appeals distinguished Rocky River, 
determining that even though that case involved similar facts, the fundamental 
question of whether recovery was available under a theory of unjust enrichment 
was not raised or decided in Rocky River. 
{¶ 8} The cause is now before this court pursuant to our acceptance of a 
discretionary appeal. 
Availability of Unjust-Enrichment Remedy 
{¶ 9} The central issue in this appeal is whether recovery under an 
unjust-enrichment theory is available as a remedy.  The North Olmsted Board 
argues that it is entitled to such a recovery because the equities of the situation 
favor its position.  It further argues that its action can be characterized as quasi-
contractual, so that the six-year statute of limitations for contracts not in writing 
should apply to its claim.  See R.C. 2305.07. 
{¶ 10} Were we writing on a clean slate, we might be inclined to agree.  
However, for the reasons detailed below, there are several substantial obstacles 
that lead us to reject the North Olmsted Board’s position.  We hold that unjust-
enrichment recovery is unavailable in this situation. 
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{¶ 11} As a starting point, we observe that the unfortunate misdirection of 
the personal property tax proceeds at issue was precipitated solely by the mistakes 
of the taxpayer, Circuit City, in filing incorrect tax returns for the years in 
question.  This situation came about through no fault of either party to this appeal. 
Lyme Twp. and Indian Hill 
{¶ 12} This court first encountered a similar situation many years ago.  In 
Lyme Twp. Bd. of Edn. v. Lyme Twp. Special School Dist. No. 1 Bd. of Edn. 
(1886), 44 Ohio St. 278, 7 N.E. 12, a special school district in Lyme Township in 
Huron County sought to recover taxes collected against property located within 
that special district after the county auditor had mistakenly recorded the property 
as being within the township’s regular school district, so that the regular school 
district received the taxes pursuant to its own levy.  In a very short opinion, this 
court held that the special district could not maintain an action to recover the tax 
money, because the taxes received by the other district “were not produced by any 
levy made by the board of the special district” and because there was no privity 
between the two boards.  Id. at 13, 7 N.E. 12. 
{¶ 13} This court decided another case with some similarities to the 
instant case in 1950.  The parties dispute the impact of that decision on this 
appeal.  In that case, Indian Hill v. Atkins (1950), 153 Ohio St. 562, 42 O.O. 35, 
93 N.E.2d 22, a taxpayer who lived in the village of Indian Hill filed tax returns 
for intangible personal property indicating that his place of residence was 
Cincinnati.  The Hamilton County Auditor accepted the taxpayer’s assertion that 
Cincinnati was the proper taxing district.  Consequently, Cincinnati received taxes 
paid by that taxpayer that Indian Hill should have received.  When Indian Hill 
sought restitution from Cincinnati, the trial court sustained Cincinnati’s demurrer 
and dismissed the cause, and the court of appeals affirmed. 
{¶ 14} This court reversed the judgment of the court of appeals, holding at 
paragraph three of the syllabus:  “Where the proceeds of [intangible] personal 
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property taxes collected from a taxpayer who resided in and was domiciled in one 
municipality are distributed to another municipality because of a mistaken belief 
that such taxpayer was a resident of the latter municipality, a cause of action may 
exist in favor of the first municipality against the second municipality for recovery 
of the proceeds so distributed.”  (Emphasis sic.) 
{¶ 15} Indian Hill differs from the instant case in at least one significant 
respect for our purposes.  In Indian Hill, the taxes that were incorrectly distributed 
were collected pursuant to a statewide tax levy and were not collected pursuant to 
the specific locally imposed levy of either of the municipalities involved.  On the 
other hand, in Lyme Twp., as in the instant case, the taxes sought to be recovered 
were collected pursuant to a specific locally imposed levy of a taxing district of a 
school system. 
Relevant Appellate Decisions 
{¶ 16} In addition to Lyme Twp. and Indian Hill, the parties’ arguments 
center on three court of appeals’ decisions handed down within the past two 
decades that were all based on facts virtually identical to the case we consider.  In 
each of those three cases, a school district sought to recover revenue that it should 
have received pursuant to its locally imposed levy that was misdirected to another 
school district due to the mistake of a taxpayer. 
{¶ 17} In Rocky River, 63 Ohio App.3d 385, 579 N.E.2d 217, the Eighth 
District Court of Appeals, basing part of its analysis on Indian Hill, affirmed the 
trial court’s decision allowing recovery against the school district that had 
mistakenly received the tax money.  However, even though the present case 
involves virtually identical facts and also originates in the Eighth District, the 
court of appeals in the present case found that Rocky River did not address the 
same legal question.  Furthermore, the Rocky River court did not even cite Lyme 
Twp. in its opinion, much less distinguish that case, further potentially weakening 
the value of the analysis in Rocky River as it pertains to this case. 
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{¶ 18} The second relevant court of appeals’ decision is Rolling Hills 
Local School Dist. Bd. of Edn. v. Cambridge City School Dist. Bd. of Edn. (Dec. 
9, 1992), Guernsey App. No. 92-CA-7, 1992 WL 397620.  In that case, the Fifth 
District Court of Appeals held that restitution was unavailable as a remedy to the 
school board seeking recovery, stating with little discussion that the trial court had 
correctly relied on Lyme Twp. to deny recovery of the misdirected money and 
appending a copy of Lyme Twp. to its opinion. 
{¶ 19} The third relevant court of appeals’ decision is Zupancic v. Carter 
Lumber Co., Franklin App. No. 01AP-1248, 2002-Ohio-3246, 2002 WL 1377932.  
In that case, the Tenth District Court of Appeals extensively examined the issue of 
whether unjust-enrichment recovery was available to the school district that had 
never received personal property tax revenue that had been distributed to another 
school district due to a mistake of the taxpayer.  In Zupancic, the Tenth District 
held that, as a matter of law, unjust-enrichment recovery was unavailable. 
{¶ 20} The North Olmsted Board relies on Indian Hill and Rocky River to 
support its argument that unjust-enrichment recovery should be available.  The 
Cleveland Board distinguishes those two cases and relies on Lyme Twp., Rolling 
Hills, and Zupancic to support the judgment of the court of appeals in this case.  
We find Zupancic to be particularly well reasoned and we agree with the 
substance of that opinion. 
Lyme Twp. Is the Controlling Precedent 
{¶ 21} The Tenth District in Zupancic v. Carter Lumber reached several 
essential conclusions leading to its ultimate holding that unjust-enrichment 
recovery was unavailable.  We specifically examine and adopt the following 
central explanations and conclusions. 
{¶ 22} Most important, we agree with the conclusion reached by the 
Zupancic court that Lyme Twp., rather than Indian Hill, is the proper precedent to 
apply to this situation.  After extensively reviewing those two decisions, the 
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7 
Zupancic court focused specifically on the portions of the Indian Hill opinion in 
which this court discussed Lyme Twp. 
{¶ 23} After recounting the facts of Lyme Twp., this court in Indian Hill 
observed that “the taxes received by the second board ‘were not produced by any 
levy made by the’ first board.”  Indian Hill, 153 Ohio St. at 567, 42 O.O. 35, 93 
N.E.2d 22, quoting Lyme Twp., 44 Ohio St. at 278, 7 N.E. 12.  For our purposes, 
the pivotal statement made by this court in Indian Hill was that “[i]f the taxes 
involved in the Lyme Township case were not produced by any levy made by the 
board seeking recovery on account thereof, it is difficult to see what right that 
board would have to the proceeds of such taxes.”  Indian Hill at 567-568, 42 O.O. 
35, 93 N.E.2d 22. 
{¶ 24} The Zupancic court’s conclusion on the effect of this and other 
statements in Indian Hill was that “it is clear that Indian Hill did not limit the 
holding in Lyme.  Indeed, the taxes at issue in Indian Hill were completely 
different from the taxes involved in Lyme.  The taxes in Indian Hill were 
intangible personal property taxes that had been levied by the General Assembly 
based on a standard tax rate.  They were not taxes levied locally by an individual 
school district with individual tax rates, such as in Lyme.  The matter in Indian 
Hill involved the distribution of such proceeds pursuant to the General Code at 
that time, which directed that such proceeds go to the municipality in which the 
taxpayer had residency.  Of course, Lyme involved the actual levying of taxes by 
local school districts.  Thus, the facts in Indian Hill are clearly distinguishable 
from the facts in Lyme and, accordingly, Lyme remains good law.”  Zupancic, 
2002-Ohio-3246, 2002 WL 1377932, at ¶ 23. 
{¶ 25} We agree with another conclusion reached in Zupancic and 
adopted by the court of appeals below in this case—that, even though Rocky River 
involved facts on point with those of this case, that decision did not address the 
issue raised here.  As the Zupancic court observed, “[t]he only issues the court of 
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appeals addressed in Rocky River were whether or not Fairview Park had an 
equitable defense to the unjust enrichment claim and which statute of limitations 
applied to such a claim.”  Zupancic, 2002-Ohio-3246, 2002 WL 1377932, at ¶ 26, 
citing Rocky River, 63 Ohio App.3d at 387-388, 579 N.E.2d 217. 
{¶ 26} As the Zupancic court further observed, “[t]he Rocky River court 
never mentioned the Lyme case and, therefore, did not address the distinguishing 
factors between Lyme and Indian Hill as we discussed previously.  Further, the 
court in Rocky River erred in stating that the matter before it did not involve the 
assessment of property for taxation or the levying of taxes.  * * *   
{¶ 27} “Indeed, that is exactly what was involved in Rocky River and what 
is involved in the case at bar.  Rocky River involved the assessment and levying of 
taxes, not the mere distribution of taxes, and Lyme, not Indian Hill, should have 
been applied.”  Zupancic, 2002-Ohio-3246, 2002 WL 1377932, at ¶ 28, 29. 
{¶ 28} As support for its reasoning that this matter does involve the 
assessment and levying of taxes, the court in Zupancic discussed this court’s 
decision in State ex rel. Rolling Hills Local School Dist. Bd. of Edn. v. Brown 
(1992), 63 Ohio St.3d 520, 521, 589 N.E.2d 1265, which was decided after Rocky 
River, and which clarified that assessing property for taxation “includes assigning 
parcels to taxing districts and recording them accordingly on the tax list.”  State 
ex rel. Rolling Hills at 521, 589 N.E.2d 1265.  We agree that State ex rel. Rolling 
Hills further weakens the reasoning employed in Rocky River. 
{¶ 29} Furthermore, we agree with the reasoning of the Fifth District in 
Rolling Hills, Guernsey App. No. 92-CA-7, 1992 WL 397620.  Although that 
case grew out of the same circumstances that gave rise to this court’s opinion in 
State ex rel. Rolling Hills, 63 Ohio St.3d 520, 589 N.E.2d 1265, different legal 
questions were involved in the two, with the case before this court involving an 
attempt to compel the county auditor to correct the mistaken tax list, and the case 
before the Fifth District involving the same issue as in Zupancic and in this 
January Term, 2006 
9 
case—an attempted recovery of the misdirected revenue based on a theory of 
unjust enrichment.  As did the courts of appeals in both Zupancic and in this case, 
the Fifth District in Rolling Hills properly recognized that Lyme Twp. is the 
controlling precedent in these circumstances. 
Should Lyme Twp. Be Overruled? 
{¶ 30} Having established that Lyme Twp. controls the result in this case, 
we next consider whether that decision should be overruled. 
{¶ 31} The Zupancic court made the following perceptive observation 
about the possible unfairness of the result it reached:  “We recognize that Lyme is 
over one hundred years old and is based on a very technical point—the fact that 
the complaining school district never actually levied the property at issue.  Of 
course, the reason the school district never actually levied the property at issue 
was that such property had mistakenly been assessed to the wrong taxing district. 
{¶ 32} “The result of such technical application seems harsh at first blush.  
* * * However, unless and until the Supreme Court determines otherwise, we are 
bound to follow Lyme.”  Id., 2002-Ohio-3246, 2002 WL 1377932, at ¶ 33-34. 
{¶ 33} The Zupancic court was fully aware of the equities of the situation 
before it, and Lyme Twp. was only one of the reasons the court felt compelled to 
find that no unjust-enrichment recovery was available.  The Zupancic court 
explained:  “[O]ur decision is partially based on the statutory scheme set forth by 
the General Assembly with regard to the way schools fund, levy and budget and 
the way taxes are assessed, levied and collected.  Such scheme, along with the 
precedent of Lyme, lead[s] us to conclude that appellee cannot maintain an unjust 
enrichment claim to recover the taxes already levied by appellant.  * * * 
{¶ 34} “Ohio’s statutory scheme for financing public education is 
complex.  At various stages in the process, the General Assembly has provided a 
right of review of certain determinations or actions.  However, there appears to be 
no statutory remedy provided to a school district for the exact situation arising in 
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the case at bar.  One could argue, then, that a common law remedy such as the one 
set forth here (unjust enrichment) should be available to remedy a perceived 
wrong.  Unfortunately, the answer is not so simple, especially given the Lyme 
precedent. 
{¶ 35} “The statutory scheme is such that allowing the remedy sought 
here would be counter to and would disrupt this complex process.  Indeed, * * * 
the statutory scheme does provide avenues for the correction of mistakes and sets 
forth a process that should help prevent the kind of mistake that occurred here.  
Given such complex process, the General Assembly could have specifically 
addressed the issue involved here had it so desired.  It did not, and this court 
would be remiss to fashion a remedy where the legislature could have but did 
not.”  Zupancic, 2002-Ohio-3246, 2002 WL 1377932, at ¶ 34-36. 
{¶ 36} The court in Zupancic, at ¶ 37-46, then embarked on an extensive 
consideration of a number of statutes on the assessment, levying, and payment of 
personal property taxes, the distribution of personal property tax proceeds to 
school districts, and the budget process for school districts.  Included in the 
court’s consideration were statutes within R.C. Chapter 5711, Chapter 319, and 
Chapter 5705.  We will not fully revisit that discussion here, other than to state 
that we view it as an accurate, if abbreviated, summary of a complex process.  
Although it can be problematical to consider particular statutes in isolation, we do 
take note of the following passage from Zupancic discussing R.C. 5711.25, a 
provision that appears to have significance in this case: 
{¶ 37} “On or before the second Monday of August annually, the tax 
commissioner shall transmit to the county auditor(s) the preliminary assessment 
certificates of taxpayers having taxable property in more than one county.  R.C. 
5711.25.  In essence, each preliminary assessment certificate becomes final on the 
second Monday of August of the second year after the certification of the 
preliminary assessment certificate.  Id.  Thus, it could be argued that under R.C. 
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11 
5711.25, an assessment, which includes the assigning of property to taxing 
districts, cannot be challenged beyond the date specified.”  Id. at ¶ 38. 
{¶ 38} At the end of its consideration of the many statutes potentially 
implicated, the court in Zupancic stated: 
{¶ 39} “The above gives merely a base understanding of the process by 
which a school district budgets and levies and receives taxes, and by which taxes 
are assessed and distributed.  It can be presumed from the system set forth above 
that a school district either knows or should know the sources of its revenue—
including sources that generate personal property taxes and the amounts thereof—
and budgets accordingly.  Again, the legislature has provided for the review of 
matters that may arise during this process, and some relate to the matter at hand.  
However, it does not appear that the statutory scheme provides a remedy for 
appellee at the stage in which appellee sought corrective action.  However, the 
statutory scheme does seem to provide adequate controls under which the 
situation here could have been prevented or corrected in a timely manner.”  Id., 
2002-Ohio-3246, 2002 WL 1377932, at ¶ 47. 
{¶ 40} We agree with the conclusion of the Zupancic court that the 
processes put in place by the General Assembly provide certain procedures for the 
correction of errors and that, therefore, no extrastatutory remedies are appropriate.  
While mindful of the fact that in many situations, as was possibly true here, it can 
be difficult to discover mistakes in time for them to be fully corrected within the 
statutory scheme, we decline to recognize the availability of the unjust-
enrichment remedy sought by the North Olmsted Board.  Accordingly, we decline 
to overrule Lyme Twp. and so adhere to its application to the case before us. 
{¶ 41} In this case, Circuit City was able to amend its returns for tax years 
1999 and 2000 according to statutory procedures, and the county auditor was able 
to redistribute the tax revenues from those years to the North Olmsted District.  
However, the parties appear to agree that the statutory procedures did not allow 
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redistribution for the tax years at issue (apparently due to R.C. 5711.25).  We 
determine that, given the remedies contained within the statutory scheme, it is not 
appropriate to provide an additional remedy through an unjust-enrichment 
recovery. 
{¶ 42} If the General Assembly wishes to provide additional remedies, 
that is its prerogative, but this is not a situation where extrastatutory remedies are 
appropriate, and we decline to recognize further avenues for recovery.  The 
current statutory procedures function as a limitation on the available remedies, so 
that R.C. 2305.07, the six-year statute of limitations for contracts not in writing, 
has no application to this situation. 
Conclusion 
{¶ 43} The Zupancic court, 2002-Ohio-3246, 2002 WL 1377932, at ¶ 48, 
aptly summarized why unjust-enrichment recovery was unavailable to the school 
district that had failed to receive its revenue in that case:  “Given the complex 
[statutory] process briefly described above, the review processes provided 
thereunder, the budgeting process and information provided during such, the 
constraints upon school districts in making appropriations once budgeting and 
levying [are] complete, and the Lyme precedent, we conclude that as a matter of 
law appellee may not recover, under a theory of unjust enrichment, the tax 
proceeds derived from a levy by appellant on personal property, already assessed 
by the county auditor, collected by the county treasurer and distributed to 
appellant, even though the personal property was mistakenly assessed to the 
wrong taxing district.” 
{¶ 44} We find that reasoning just as compelling as did the Zupancic 
court.  We affirm the judgment of the court of appeals. 
Judgment affirmed. 
 
MOYER, C.J., O’CONNOR and LANZINGER, JJ., concur. 
 
PFEIFER, LUNDBERG STRATTON and O’DONNELL, JJ., dissent. 
January Term, 2006 
13 
__________________ 
 
PFEIFER, J., dissenting. 
{¶ 45} The majority opinion begins by stating that “a portion of a school 
district’s personal property tax revenue was misdirected to another school district 
due to the mistake of a taxpayer,” and concludes by stating that “ ‘even though the 
personal property was mistakenly assessed to the wrong taxing district,’ ” we’re 
not going to do anything about it.  Quoting Zupancic v. Carter Lumber Co., 
Franklin App. No. 01AP-1248, 2002-Ohio-3246, 2002 WL 1377932, ¶48.  
Between the beginning and the conclusion is much fine legal writing.  
Unfortunately, all of that fine writing completely misses the point.  Instead of 
conflating legalistic legerdemain with analysis, the majority should bow to the 
obvious:  when a school district receives personal property tax revenue that 
should have gone to another district, it has been unjustly enriched and should give 
that revenue to the other district.  The majority’s long, winding path to a contrary, 
counterintuitive, and wrong conclusion is a glowing tribute to the insidiousness of 
precedent. 
{¶ 46} I would reverse Lyme Twp. Bd. of Edn. v. Lyme Twp. Special 
School Dist. No. 1 Bd. of Edn. (1886), 44 Ohio St. 278, 7 N.E. 12, which the 
majority opinion, quoting Zupancic at ¶33, characterizes as “ ‘over one hundred 
years old and * * * based on a very technical point’ ”; I would ignore Rolling 
Hills Local School Dist. Bd. of Edn. v. Cambridge City Dist. Bd. of Edn. (Dec. 9, 
1992), Guernsey App. No. 92-CA-7, 1992 WL 397620, and Zupancic, which are 
not binding on this court and which rely on Lyme Twp.; and I would reverse the 
judgment of the court of appeals. 
{¶ 47} Every third-grade schoolboy in Cleveland knows that if he finds 
money and knows who lost it, he should return it to the person who lost it.  That’s 
what the Cleveland Municipal School District should do.  Because Cleveland is 
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not going to do that, I believe that it should explain its immoral decisionmaking 
process to its students.  I dissent. 
__________________ 
 
LUNDBERG STRATTON, J., dissenting. 
{¶ 48} It is undisputed that due to Circuit City’s mistaken belief that it 
was located within the Cleveland Municipal School District, the North Olmsted 
schools were deprived of approximately $74,849 of tax revenue.  Nevertheless, 
the majority holds that North Olmsted may not recover any of these tax proceeds.  
I respectfully disagree. 
{¶ 49} North Olmsted filed a complaint seeking to recover the tax 
proceeds under a theory of unjust enrichment.  The majority holds that North 
Olmsted cannot recover based primarily on two points. 
{¶ 50} Relying upon Lyme Twp. Bd. of Edn. v. Lyme Twp. Special School 
Dist. No. 1 Bd. of Edn. (1886), 44 Ohio St. 278, 7 N.E. 12, the majority holds that 
North Olmsted cannot seek restitution, because North Olmsted cannot prove 
unjust enrichment.  Specifically, the majority finds that because the taxes in 
question were collected pursuant to a levy for the Cleveland schools, North 
Olmsted cannot prove that it conferred a benefit upon the Cleveland schools, an 
element of unjust enrichment.  The majority also reasons that “ ‘the process by 
which a school district budgets and levies and receives taxes, and by which taxes 
are assessed and distributed’ ” “ ‘does seem to provide adequate controls under 
which the situation here could have been prevented or corrected in a timely 
manner.’ ”  Quoting Zupancic v. Carter Lumber Co., Franklin App. No. 01AP-
1248, 2002-Ohio-3246, 2002 WL 1377932, ¶ 47. Thus, the majority determines 
that “it is not appropriate to provide an additional remedy through an unjust-
enrichment recovery.” 
{¶ 51} I believe that principles of equity dictate that North Olmsted can 
recover the tax proceeds from the Cleveland Municipal School District.  “To 
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15 
bring a cause within the jurisdiction of a court of equity, it is requisite that the 
primary right involved be an equitable right as distinguished from a legal right, or 
that the remedy at law as to the right involved is not full, adequate and complete.”  
State ex rel. Lien v. House (1944), 144 Ohio St. 238, 244, 29 O.O. 399, 58 N.E.2d 
675. 
{¶ 52} “Restitution, on the basis of unjust enrichment, is a common-law 
remedy designed to prevent one from retaining property to which he is not justly 
entitled.”  Keco Industries, Inc. v. Cincinnati & Suburban Bell Tel. Co.  (1957), 
166 Ohio St. 254, 256, 2 O.O.2d 85, 141 N.E.2d 465.  Restitution is also available 
as an equitable remedy.  Santos v. Ohio Bur. of Workers’ Comp., 101 Ohio St.3d 
74, 2004-Ohio-28, 801 N.E.2d 441, ¶13.  “ ‘[F]or restitution to lie in equity, the 
action generally must seek not to impose personal liability on the defendant, but 
to restore to the plaintiff particular funds or property in the defendant’s 
possession.’ ”  (Emphasis added.)  Id., quoting Great-West Life & Annuity Ins. 
Co. v. Knudson (2002), 534 U.S. 204, 214, 122 S.Ct. 708, 151 L.Ed.2d 635. 
{¶ 53} “Personal property used in business shall be listed and assessed in 
the taxing district in which such business is carried on.”  R.C. 5711.07.  Ohio’s 
tax code has no provision that permits a local school district to levy and collect 
personal property tax on business property outside its district.  Thus, the 
Cleveland Municipal School District had no authority to levy and collect the tax 
proceeds at issue here because the taxpayer’s property was not located within the 
Cleveland district.  Therefore, I would find that the tax proceeds at issue are more 
properly characterized as belonging to North Olmsted schools, irrespective of the 
fact that it was collected under the Cleveland levy.  In fact, I am at a loss to 
understand how the Cleveland district justifies its retention of the tax proceeds at 
issue, thereby forcing this needless litigation. 
{¶ 54} To find that the Cleveland schools were not unjustly enriched 
because the tax proceeds at issue were collected pursuant to the Cleveland school 
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district’s levy raises form over substance.  “It is a familiar maxim of equity that 
equity regards substance, not form.”  Stern v. Cuyahoga Cty. Bd. of Elections 
(1968), 14 Ohio St.2d 175, 188, 43 O.O.2d 286, 237 N.E.2d 313 (Taft, C.J., 
dissenting).  I would find that North Olmsted’s complaint merely seeks to restore 
tax proceeds to the entity to which they properly belong.  Accordingly, I would 
hold that North Olmsted is seeking an equitable rather than a legal remedy. 
{¶ 55} The majority also argues that the school-funding and budgeting 
process provides avenues for the correction of mistakes when tax proceeds are 
directed to the wrong district, as occurred herein.  Yet the majority fails to 
identify any such remedy or remedies to return wrongfully diverted tax proceeds 
to the proper school district.  Moreover, even if such remedies are available, it 
could be difficult to discover mistakes in time for them to be corrected in a timely 
manner, as the majority recognizes.  The majority also recognizes that “ ‘it does 
not appear that the statutory scheme provides a remedy for appellee at the stage in 
which appellee sought corrective action.’ ”  Quoting Zupancic, 2002-Ohio-3246, 
2002 WL 1377932,¶ 47.  Accordingly, I believe that the statutory school-funding 
and budgeting scheme fails to provide an adequate or complete remedy for the 
North Olmsted schools to recover the tax proceeds at issue. 
{¶ 56} This court has utilized its equitable powers when appropriate.  See 
State v. West (1993), 66 Ohio St.3d 508, 512, 613 N.E.2d 622.  “[A] court’s 
equitable powers may be invoked to provide the flexibility necessary to moderate 
unjust results.”  Barone v. Barone, Geauga App. No. 2004-G-2575, 2005-Ohio-
4479, 2005 WL 2077319, ¶ 17.  Pursuant to our equitable powers, and because 
North Olmsted has no adequate or complete remedy to secure the return of its tax 
proceeds though the school-funding or budgeting process, and because the 
remedy that North Olmsted seeks is equitable in nature, I would order the 
Cleveland Municipal School District to return the $74,849 in tax proceeds to the 
North Olmsted School District. 
January Term, 2006 
17 
{¶ 57} Funding Ohio’s schools is a difficult enough task without the 
additional problem of forcing a school district to relinquish tax proceeds 
mistakenly directed to another school district.  Therefore, I would call on the 
General Assembly to fashion a clear and adequate remedy to address this 
situation. 
{¶ 58} Therefore, I respectfully dissent. 
 
O’DONNELL, J., concurs in the foregoing dissenting opinion. 
__________________ 
 
Sylvester Summers Jr. Co., L.P.A., and Sylvester Summers Jr., for 
appellant. 
 
James H. Hewitt Co., L.P.A., and James H. Hewitt III, for appellee. 
______________________