Title: Delaney v. Testa

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Delaney v. Testa, Slip Opinion No. 2011-Ohio-550.] 
 
 
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. 2011-OHIO-550 
DELANEY, AUD., APPELLANT, v. TESTA, TAX COMMR., ET AL. APPELLEES. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Delaney v. Testa, Slip Opinion No. 2011-Ohio-550.] 
Taxation — Rejection of county auditor’s claim that her notice of appeal to the 
board of tax appeals was not required to set forth error with the specificity 
required by R.C. 5717.02. 
(No. 2010-0653 — Submitted February 2, 2011 — Decided February 15, 2011.) 
APPEAL from the Board of Tax Appeals, No. 2009-V-3139. 
__________________ 
Per Curiam. 
{¶ 1} In this personal-property-tax case, Greene County Auditor 
Luwanna Delaney appealed to the Board of Tax Appeals (“BTA”) from final 
assessment certificates issued by the tax commissioner against Waste 
Management of Ohio, Inc., pertaining to tax years 1998 and 1999.  The BTA 
dismissed the appeal for want of jurisdiction because it found that Delaney had 
not set forth any error in the notice of appeal with the specificity required by R.C. 
5717.02. 
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{¶ 2} On appeal to this court, Delaney does not contest the BTA’s 
determination that the notice of appeal lacked specificity under the usual standard 
derived from R.C. 5717.02 and articulated by the case law.  Instead, Delaney 
contends that in this situation, the usual specification requirement is either 
modified or superseded by the Due Process Clause of the Fourteenth Amendment 
to the United States Constitution and the due-course-of-law provision at Section 
16, Article I of the Ohio Constitution.  The auditor argues that because she was 
not a participant in the proceedings initiated by the taxpayer’s petition for 
reassessment, she had insufficient knowledge about the commissioner’s final 
determination to assign error with specificity.  To enforce the specification 
requirement with ordinary stringency, Delaney argues, would effectively deprive 
her of the right to appeal, a due-process violation. 
{¶ 3} As an initial matter, we hold that under the ordinary statutory 
standard, the BTA acted reasonably and lawfully in finding that Delaney’s notice 
of appeal failed to set forth any error of the commissioner with sufficient 
specificity.  It follows that unless Delaney can establish a constitutional basis for 
avoiding or relaxing the specification requirement, we must affirm the BTA’s 
decision dismissing the appeal. 
{¶ 4} As for Delaney’s primary contention that the specification 
requirement violates her right to due process, we note that a public official’s right 
to participate in tax-assessment proceedings exists not by constitutional right but 
by legislative grant.  As a result, Delaney is bound by the conditions the statutes 
impose on that grant—in this case, the specification requirement of R.C. 5717.02.  
Although the statutes prescribe complementary duties for the commissioner and 
the county auditors, and thereby contemplate a cooperative relationship between 
those officials, Delaney does not allege that she attempted to participate in the 
assessment at issue but was denied an opportunity to do so.  Absent a thwarted 
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attempt, Delaney lacks any substantive basis for claiming a violation of due 
process. 
{¶ 5} Delaney also argues that the assessment certificates constitute a 
taking of property of the citizens of Greene County without due process.  Because 
this alleged unconstitutional taking was not specified as error in the notice of 
appeal to the BTA, we have no jurisdiction over this claim. 
{¶ 6} Because we hold that the cited constitutional provisions did not 
release Delaney from the obligation to specify error in the notice of appeal to the 
BTA and because the BTA’s decision is otherwise reasonable and lawful, we 
affirm the BTA’s dismissal of the auditor’s appeal. 
I. Facts 
{¶ 7} Underlying the present appeal are final assessment certificates 
issued by the tax commissioner against Waste Management of Ohio, Inc., for the 
1998 and 1999 tax years.  Waste Management filed intercounty property tax 
returns for those years, and for each of those years, Waste Management reported 
ownership of personal property that it used in its business in several taxing 
districts of Greene County.  The tax commissioner amended the assessment and 
issued correction notices.  For both tax years 1998 and 1999, the commissioner 
added to the assessed value for taxing districts in Greene County.  In particular, 
the commissioner increased the value listed on Schedule 4 for the Bath 
Township/Fairborn City School District by $714,190 (1998) and $702,150 
(1999).1 
{¶ 8} On September 15, 2000, Waste Management filed its petition for 
reassessment contesting the tax commissioner’s amendments for tax year 1998, 
                                                 
1 Schedule 4 of the personal property tax return pertains to furniture and fixtures and—especially 
important here—to machinery and equipment that is not used in manufacturing. See 
www.tax.ohio.gov/documents/forms/personal_property/2001/TPP-Guidelines-2001.pdf  The listed 
value of the property is the value on which tax is assessed, which for most property in 1998 and 
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and subsequently filed its petition for reassessment for the 1999 tax year on 
October 12, 2001.  One of Waste Management’s two principal objections 
concerned the taxation of “vehicle add-on equipment.”  After further proceedings, 
the commissioner issued his final determinations in the cases on January 9, 2004. 
{¶ 9} The determinations reveal that the major source of dispute between 
the taxpayer and the commissioner lay in the applicability of the general personal 
property tax to certain equipment mounted on waste-disposal trucks owned and 
operated by Waste Management.  Registered motor vehicles are exempt from 
personal property tax, see R.C. 5701.03(A), and Waste Management apparently 
contended that the equipment was integrated with the trucks and was therefore 
exempt as part of a registered motor vehicle.  The commissioner opined that the 
equipment, although mounted on trucks, was taxable personal property used in 
business that was not part of the trucks themselves. 
{¶ 10} On January 14, 2005, the BTA granted an unopposed motion filed 
by Waste Management and entered an order staying the proceedings pending the 
BTA’s decision in Rumpke Waste, Inc. v. Wilkins, BTA No. 2004-P-477, and 
Rumpke Recycling, Inc. v. Wilkins, BTA Nos. 2004-P-478 and 2004-P-479.  
Waste Mgt. of Ohio, Inc. v. Wilkins (Jan. 14 2005), BTA Nos. 2004-V-252 and 
2004-V-253.  Grounds for the stay lay in the representation that the Rumpke cases 
“involve[d] the same principal issue regarding waste hauling trucks and whether 
said equipment [was] excluded from the definition of personal property under 
R.C. 5701.03(A).”  Id. 
{¶ 11} On March 30, 2007, the BTA issued a decision in one of the 
Rumpke cases.  Rumpke Waste, Inc. v. Wilkins (Mar. 30, 2007), BTA Nos. 2004-
K-477 and 2004-K-479.  In that decision, the BTA held that the test articulated by 
the court in Parisi Transp. Co. v. Wilkins, 102 Ohio St.3d 278, 2004-Ohio-2952, 
                                                                                                                                     
1999 was 25 percent of the true value of the property.  See former R.C. 5711.22(E); Am.Sub.H.B. 
No. 215, 147 Ohio Laws, Part I, 877, 1688-1691. 
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809 N.E.2d 1126 dictated that, in the context of Rumpke, the front forks and arms 
along with the hoist systems did not constitute part of the trucks, because they 
were used to load waste material onto the trucks.  Rumpke at 14.  By contrast, the 
packing blades, slide panels, and tailgate units were necessary in transporting the 
waste material and therefore qualified for exemption because they were 
components of the trucks under the Parisi test as applied by the BTA.  Id. 
{¶ 12} On June 15, 2007, the BTA issued an order lifting the stay in the 
Waste Management cases and setting them for hearing.  Waste Mgt., Inc. v. 
Wilkins (June 15, 2007), BTA Nos. 2004-V-252 and 2004-V-253.  On April 1, 
2008, the BTA issued an order granting the joint motion of the parties to remand 
the cases to the commissioner for further consideration. 
{¶ 13} On October 9, 2009, the commissioner issued the final assessment 
certificates for 1998 and 1999.2  Delaney’s notice of appeal includes two pages 
showing a reduction of the assessed value in the Bath Township/Fairborn City 
Schools taxing district of $89,660 (1998) and $289,800 (1999).  Postulating that 
the final assessment entitles Waste Management to refunds, the notice 
characterizes any refunds as “unreasonable and unwarranted,” and states that “the 
business is closed and nonexistent.”  The BTA found that these assertions did not 
specify error under R.C. 5717.02, and dismissed the auditor’s appeal.  Delaney 
timely appealed to this court. 
II. Analysis 
A. The auditor’s notice of appeal to the BTA failed to set forth error with the 
specificity required by R.C. 5717.02 
                                                 
2 As a result of comprehensive tax reform enacted in 2005, most general businesses such as Waste 
Management no longer filed returns or paid personal property taxes in tax year 2009.  See 
http://tax.ohio.gov/divisions/personal_property/index.stm  The General Assembly achieved that 
result by gradually reducing the listing percentage to zero over a four-year period. R.C. 
5711.22(G).  Neither in her notice of appeal nor in opposing the commissioner’s motion to dismiss 
has Delaney asserted that the phase-out creates a legal basis for challenging the final assessment of 
Waste Management’s personal property. 
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{¶ 14} In DeWeese v. Zaino, 100 Ohio St.3d 324, 2003-Ohio-6502, 800 
N.E.2d 1, we held that “[i]n order to invoke the jurisdiction of the BTA, the 
[county] auditors must comply with the requirements of R.C. 5717.02.”  Id., ¶ 19.  
Subsequently, in Brown v. Levin, 119 Ohio St.3d 335, 2008-Ohio-4081, 894 
N.E.2d 35, we canvassed the case law concerning R.C. 5717.02’s requirement 
that a taxpayer who appeals a final determination of the tax commissioner to the 
BTA “specify the errors therein complained of.”  Id. ¶ 17 - 19.  One principle 
established by the cases was that “the failure to set forth any error in the notice of 
appeal with the requisite specificity justifies the dismissal of the appeal by the 
BTA for want of jurisdiction.”  (Emphasis sic.)  Id. at ¶ 17.  Under that precept, 
the BTA ruled in the present case that the Greene county auditor had failed to 
specify any error and that her attempted appeal should therefore be dismissed. 
{¶ 15} In reviewing the BTA’s decision, we note the relevance of another 
principle established by the case law, as explained in Brown at ¶ 18:  the 
specification requirement is “stringent.”3  In the present case, the Greene County 
auditor faulted the final assessments issued by the tax commissioner by stating 
that “the refunders [sic] are unreasonable and unwarranted, and furthermore * * * 
the business is closed and nonexistent.”  We will analyze this statement as 
consisting of two separate, though not necessarily unrelated, assertions.  See Ohio 
Bell Tel. Co. v. Levin, 124 Ohio St.3d 211, 2009-Ohio-6189, 921 N.E.2d 212, ¶ 
21. 
                                                 
3 In her notice of appeal and her brief in this court, the auditor did not assign as error the BTA’s 
holding that under the statutory standard, the auditor’s notice of appeal to the BTA failed to 
specify error.  We nonetheless consider whether the BTA made a correct determination, because 
the issue concerns the BTA’s jurisdiction and therefore, derivatively, our own.  See Worthington 
City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, 
918 N.E.2d 972, ¶ 17; Meadows Dev., L.L.C. v. Champaign Cty. Bd. of Revision, 124 Ohio St.3d 
349, 2010-Ohio-249, 922 N.E.2d 209, ¶ 19, fn. 1.  Moreover, if we found error by the BTA in 
applying the statutory standard, we would not need to consider the auditor’s constitutional 
arguments.  See Belden v. Union Cent. Life Ins. Co. (1944), 143 Ohio St. 329, 28 O.O. 295, 55 
N.E.2d 629, paragraph seven of the syllabus (“Constitutional questions will not be decided until 
the necessity for such decision arises upon the record before the court”).  
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{¶ 16} First, the assertion that refunds that might have to be paid as a 
result of the amendment of a property-tax assessment are “unreasonable and 
unwarranted” plainly fails to specify error pursuant to R.C. 5717.02.  It falls 
squarely into the established category of notices in which the “errors set out are 
such as might be advanced in nearly any case and are not of a nature to call the 
attention of the board to those precise determinations of the Tax Commissioner 
with which appellant took issue.”  Queen City Valves, Inc. v. Peck (1954), 161 
Ohio St. 579, 583, 53 O.O. 430, 120 N.E.2d 310.  In Queen City Valves, the 
notice of appeal contained a list of errors:  the commissioner’s determination and 
assessment was “contrary to law,” “not sustained by the evidence,” “against the 
manifest weight of the evidence,” and “excessive.”  Id. at 580.  Just as those 
assertions failed to make clear the “precise determinations of the Tax 
Commissioner with which appellant took issue,” id. at 583, so too does the 
assignment of error in the present case that refunds are “unreasonable and 
unwarranted” fail to satisfy the requirement of specificity.  Accord Turner v. 
Levin, 124 Ohio St.3d 1233, 2010-Ohio-922, 924 N.E.2d 367, ¶ 2 (“the claim that 
a tribunal has misinterpreted a pleading, without more particularity, is too vague 
and general to give notice of what the appellant intends to argue”). 
{¶ 17} Turning to the second clause of the sole assignment of error, we 
note that at the same time that she filed her memorandum opposing the motion to 
dismiss at the BTA, Delaney also filed a “Correction to Notice of Appeal.”  That 
correction sought to remove the “closed and nonexistent” clause from the notice 
of appeal, a clear expression of the auditor’s intent to waive any argument that 
might relate to that clause.  Because Delaney has implicitly waived any argument 
relating to the clause, we need not consider its jurisdictional sufficiency. 
{¶ 18} Under all these circumstances, we conclude that the BTA acted 
reasonably and lawfully when it dismissed the notice of appeal on the ground that 
it failed to specify error. 
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B. A public official may not use the constitutional guarantee of due process to 
augment the powers and duties conferred on her by statute 
{¶ 19} Delaney advances as a primary argument that holding her to the 
statutory requirement of specifying error constituted a violation of due process.  
In other words, she seeks to be released from the specification requirement on the 
grounds that she had no opportunity to obtain the information necessary to specify 
error.  This argument fails for two reasons. 
{¶ 20} First, because Delaney acts in this case in her capacity as a public 
official rather than as an individual citizen, the scope of the due-process guarantee 
is limited.  The office of county auditor is the creation of Ohio law, and as a 
result, its powers and duties extend only so far as the statutes grant authority 
while being constrained by whatever limits the statutes impose.  A number of 
BTA cases make this point.  See Morgan Cty. Budget Comm. v. Bd. of Tax 
Appeals (1963), 175 Ohio St. 225, 24 O.O.2d 340, 193 N.E.2d 145, paragraphs 
three and four of the syllabus (“being a creature of statute,” the BTA “is limited to 
the powers conferred upon it by statute,” with the result that the BTA “has no 
power or authority to make a quasijudicial order directing a particular county 
budget commission to revise its budget”); Cleveland Gear Co. v. Limbach (1988), 
35 Ohio St.3d 229, 520 N.E.2d 188, paragraph one of the syllabus (being a 
creature of statute, the BTA “is without jurisdiction to determine the 
constitutional validity of a statute”); Steward v. Evatt (1944), 143 Ohio St. 547, 
28 O.O. 472, 56 N.E.2d 159, paragraphs one and two of the syllabus (being a 
creature of statute, the BTA is “limited to the powers with which it is thereby 
invested” and is “without power to extend the statutory period of thirty days 
within which an appeal may be made thereto from an order of the Tax 
Commissioner”).  For example, to the extent that the statutes permit the auditor to 
be sued in her official capacity, see, e.g., R.C. 2723.02 (requiring that county 
auditor be joined as defendant in action to enjoin levy of taxes), the Due Process 
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Clauses of the Fourteenth Amendment to the United States Constitution and 
Section 16, Article I of the Ohio Constitution may require proper service of 
process upon her. 
{¶ 21} But the constitutional protection that the auditor may claim in the 
exercise of her statutorily granted powers does not at all imply that she may use 
the due-process guarantee to augment those powers or to override the limitations 
imposed on her authority by statute.  See Avon Lake City School Dist. v. Limbach 
(1988), 35 Ohio St.3d 118, 122, 518 N.E.2d 1190 (where statute did not furnish a 
school district with the right to appeal a tax assessment that adversely affected the 
district, due process did not require that the school district be permitted to appeal 
the tax commissioner’s assessment, because the district “is a political subdivision 
created by the General Assembly and it may not assert any constitutional 
protections regarding due course of law or due process of law against the state, its 
creator”); Ross v. Adams Mills Rural School Dist. (1925), 113 Ohio St. 466, 480-
481, 149 N.E.2d 634 (school district could not invoke due process to bar 
consolidation with another school district inasmuch as “school districts and their 
property are creatures of the state which may be created and abolished at will by 
the Legislature”).  It follows that Delaney may not use due process in this case to 
escape the statutory requirement under R.C. 5717.02 that she specify the errors in 
the tax commissioner’s assessments that form the basis of an appeal to the BTA. 
{¶ 22} There is a second reason why Delaney’s due-process claim must 
fail.  The statutes permit county auditors to access information concerning taxable 
value within their jurisdictions.  R.C. 5711.01(F) defines “assessor” for purposes 
of personal property tax as “the tax commissioner and the county auditor as 
deputy of the commissioner,” and the returns filed pursuant to R.C. 5711.05 are 
processed by the “assessor” as indicated throughout R.C. Chapter 5711.  See, e.g., 
R.C. 5711.11, 5711.18 (auditor as deputy tax commissioner to investigate a claim 
of reduction from net book value), 5715.40 (requiring county auditors and other 
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officials to “perform the duties relating to the assessment of property for taxation 
or the levy or collections of taxes which the department of taxation directs”).  
Moreover, since April 9, 2003, R.C. 5703.21(C)(9) has explicitly authorized 
disclosure “to a county auditor” of “notices or documents concerning or affecting 
the taxable value of property in the county auditor’s county.”  Am.Sub.S.B. No. 
180, 149 Ohio Laws, Part II, 3648, 3678.  Yet neither Delaney’s notice of appeal 
nor her briefs state that she attempted but was denied the opportunity to 
participate and thereby obtain pertinent information.  Absent such an attempt, 
there can be no substantive basis for her due-process claim. 
C. The claim that the final assessment certificates perpetrate a taking of the 
property of Greene County citizens without due process is jurisdictionally barred 
{¶ 23} Delaney also argues that the final assessment certificates constitute 
a taking of property without due process.  This claim rests on the dubious 
contention that the citizens of Greene County can assert a constitutionally 
protected private-property interest in the public funds of the county.  But we are 
jurisdictionally barred from considering the merits of this claim because Delaney 
did not assert it in the notice of appeal to the BTA.  Newman v. Levin, 120 Ohio 
St.3d 127, 2008-Ohio-5202, 896 N.E.2d 995, ¶ 27 (because “the auditor never 
identified the issue of waste heat in his specifications of error to the BTA, * * * 
the BTA lacked jurisdiction to consider that issue,” and “[a]s a result, we are 
without jurisdiction to consider it”). 
III. Conclusion 
{¶ 24} Because the BTA acted reasonably and lawfully when it dismissed 
the county auditor’s appeal, we affirm the decision of the BTA. 
Decision affirmed. 
 
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL, 
LANZINGER, CUPP, and MCGEE BROWN, JJ., concur. 
__________________ 
January Term, 2011 
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Stephen K. Haller, Greene County Prosecuting Attorney, and Elizabeth 
Ellis and Susan L. Goldie, Assistant Prosecuting Attorneys, for appellant. 
 
R. Michael DeWine, Attorney General, and Barton A. Hubbard, Assistant 
Attorney General, for appellee Joseph W. Testa. 
 
Vorys, Sater, Seymour & Pease, L.L.P., Raymond D. Anderson, and 
Hilary J. Houston, for appellee Waste Management of Ohio, Inc. 
______________________