Title: Ceccarelli v. Levin

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Ceccarelli v. Levin, Slip Opinion No. 2010-Ohio-5681.] 
 
 
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. 2010-OHIO-5681 
CECCARELLI, APPELLANT, v. LEVIN, TAX COMMR., APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Ceccarelli v. Levin, Slip Opinion No. 2010-Ohio-5681.] 
Taxation — Motor-fuel tax — R.C. 5735.12 — Four-year limit on assessments 
applicable to assessments on individuals liable as responsible parties 
under R.C. 5735.35. 
(No. 2009-2217 — Submitted October 13, 2010 — Decided November 24, 2010.) 
APPEAL from the Board of Tax Appeals, No. 2007-V-391. 
__________________ 
Per Curiam. 
{¶ 1} This is an appeal from a decision of the Board of Tax Appeals 
(“BTA”) that affirmed an assessment against the appellant, Jack Ceccarelli, of 
motor-fuel-tax liabilities reported but not fully paid for April, May, June, and 
August 2000.  Ceccarelli was assessed not as a motor-fuel dealer himself, but 
rather as a “responsible party” by virtue of his status as owner and president of 
Restructure Petroleum Marketing Services, Inc. (“RPMS”).  RPMS itself had 
previously been assessed for the unpaid taxes, which amounted to $396,565.16.  
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The tax commissioner found that Ceccarelli was a responsible party who was 
liable to pay the amount assessed against the corporation because he was the 
indirect owner and the president of RPMS. 
{¶ 2} Before the BTA, Ceccarelli did not contest his status as a 
responsible party under the statute, but instead asserted that the assessment was 
barred because it was issued after the statutory four-year limitation period had 
expired.  The tax commissioner argued that the limitation statute in question, R.C. 
5735.12, applies to assessments issued against motor-fuel dealers, but not to 
assessments issued against “responsible parties” who were their officers or 
employees.  The BTA agreed with the commissioner’s position and affirmed the 
assessment against Ceccarelli. 
{¶ 3} On appeal, Ceccarelli again contends that the four-year limitation 
also  applies to assessments against employees or officers of motor-fuel dealers 
who qualify as responsible parties.  We agree, and we therefore reverse the 
decision of the BTA. 
Facts 
{¶ 4} Underlying the assessment against Ceccarelli in this case are four 
assessments previously issued against RPMS pertaining to motor-fuel taxes 
reported but not fully paid for April, May, June, and August 2000.  Jack 
Ceccarelli was identified as corporate president of RPMS on filings with the 
office of the Ohio secretary of state and in correspondence with the Ohio 
Department of Taxation.  The four months of unpaid taxes amounted to 
$396,565.16, finally totaling $665,797 after assessment of interest and penalties. 
{¶ 5} RPMS had belatedly filed motor-fuel-tax returns for April, May, 
June, and August 2000 on July 7, December 19, September 18, and December 11, 
2000, respectively.  The commissioner issued his assessment against Ceccarelli as 
a responsible party on February 24, 2005 – more than four years after the tax 
reports had been filed. 
January Term, 2010 
3 
 
{¶ 6} The record is sparse, but Ceccarelli has not disputed the 
commissioner’s findings of fact.  The commissioner found that Ceccarelli was not 
only president of RPMS, but also “100% owner of Restructure, Inc., who owned 
100% of RPMS.”  The final determination also relied on filings and 
correspondence signed by Ceccarelli to establish that he “had the authority to 
exercise control of the corporation’s fiscal responsibilities,” a criterion for 
responsible-party liability under R.C. 5735.35(A). 
Analysis 
{¶ 7} The third paragraph of R.C. 5735.12(A) states:  “No assessment 
shall be made against any motor fuel dealer for taxes imposed by this chapter 
more than four years after the date on which the report on which the assessment 
was based was due or was filed, whichever is later.  This section does not bar an 
assessment against any motor fuel dealer who fails to file a report required by 
section 5735.06 of the Revised Code, or who files a fraudulent motor fuel tax 
report.”  Thus, when motor-fuel-tax reports have been filed late, the four-year 
limitation period runs from the time of filing.  It is undisputed in the present case 
that the commissioner issued the assessment against Ceccarelli more than four 
years after the filing of the underlying corporate motor-fuel-tax reports. 
{¶ 8} The question is whether the four-year time limitation set forth at 
R.C. 5735.12(A) applies to assessments against employees or officers of motor-
fuel dealers who qualify as responsible parties pursuant to R.C. 5735.35.  R.C. 
5735.35(B) provides that the “sum due for the liability [of responsible parties] 
may be collected by assessment in the manner provided in sections 5735.12 and 
5735.121 of the Revised Code.”  The BTA affirmed the commissioner’s 
assessment, holding that the four-year limitation does not apply to responsible-
party assessments.  Ceccarelli asserts that the “manner” of assessment against him 
as a responsible party incorporates the four-year limitation on assessment against 
motor-fuel dealers.  This question of statutory construction presents an issue of 
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law that we determine de novo on appeal.  State v. Consilio, 114 Ohio St.3d 295, 
2007-Ohio-4163, 871 N.E.3d 1167, ¶ 8. 
R.C. 5735.35(A)(2) provides that motor-fuel-tax liabilities of responsible parties 
be assessed “in the manner” of assessments issued against motor-fuel dealers, 
and the manner of assessment includes the four-year limitation in R.C. 
5735.12(A) 
{¶ 9} In Bowshier v. Limbach (1990), 52 Ohio St.3d 140, 556 N.E.2d 
463, we considered whether an assessment of sales tax against a responsible 
corporate officer was barred by the four-year limitation on sales-tax assessments 
set forth at R.C. 5739.16(A).  That section explicitly imposed the time limit on 
assessments “issued against a vendor or consumer,” and because of that restrictive 
language we held that the limitation did not apply to assessments against 
responsible parties, who were neither vendors nor consumers under the sales-tax 
law.  The commissioner regards Bowshier as dispositive here. 
{¶ 10} As an initial matter, the commissioner points to the fact that the 
third paragraph of R.C. 5735.12(A) limits the prohibition against assessments to 
assessments issued against “any motor fuel dealer.”  Similarly, in Bowshier, R.C. 
5739.16(A)’s limitation restricted assessments against vendors and consumers – 
not against responsible parties who were assessed when the primary obligors 
failed to discharge their legal duties. 
{¶ 11} But this argument overlooks a crucial distinction between the 
motor-fuel-tax statutes and the sales-tax law.  R.C. 5735.12(A) both authorizes 
motor-fuel-tax assessments and imposes the four-year limitation on assessments 
against motor-fuel dealers.  By contrast, the statute of limitation for sales-tax 
assessments is set forth in R.C. 5739.16, which is an entirely different section 
from the section that authorizes the tax commissioner to make assessments (R.C. 
5739.13). 
January Term, 2010 
5 
 
{¶ 12} The distinction is significant because the respective code sections 
that address responsible-party liability provide that assessments against 
responsible parties should be made “in the manner provided” in the section that 
authorizes the making of assessments.  R.C. 5739.33 (sales tax); R.C. 5735.35 
(motor-fuel tax).  As a result, the language of R.C. 5739.33 incorporates the sales-
tax assessment provisions at R.C. 5739.13, but does not incorporate the four-year 
limitation at R.C. 5739.16.  By contrast, R.C. 5739.35 does incorporate the time 
limitation because the limitation is set forth in R.C. 5735.12. 
{¶ 13} To be sure, the commissioner can argue that the “manner” of 
making assessments does not encompass the timing of those assessments but that 
argument is unavailing.  “Manner” means “a mode of procedure or way of 
acting.”  Merriam-Webster’s Collegiate Dictionary (11th Ed.2006) 756.  While 
time limitations may in some contexts be distinguished from other aspects of a 
“mode of procedure,” we see no justification for regarding the time for making an 
assessment as any less a part of the statutorily prescribed procedure in this 
context.  Quite simply, R.C. 5735.12 sets forth a mode of procedure for 
assessment that includes the four-year limitation, and R.C. 5735.35 incorporates 
that mode of procedure (including the time limitation) by reference. 
The commissioner’s exclusive focus on R.C. 5735.12(A) is not justified, because it 
would accord no significance  to the language of R.C. 5735.35(A)(2) 
{¶ 14} The commissioner also argues that because R.C. 5735.12(A) itself 
authorizes assessments against responsible parties, there is no need or justification 
for an incorporation by reference of the time limitation by virtue of R.C. 5735(B).  
Under the tax commissioner’s reading of the statutes, the proper method of 
determining the scope of the four-year limitation on assessments is to construe the 
assessment and time-limitation provisions within the four corners of R.C. 
5735.12(A). 
{¶ 15} The second paragraph of R.C. 5735.12(A) states as follows: 
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{¶ 16} “If any person required by this chapter to file reports and pay the 
taxes, interest, or additional charge levied by this chapter fails to file the report, 
files an incomplete or incorrect report, or fails to remit the full amount of the tax, 
interest, or additional charge due for the period covered by the report, the 
commissioner may make an assessment against the person based upon any 
information in the commissioner’s possession.”  (Emphasis added.) 
{¶ 17} The third paragraph then sets forth the time limitation: 
{¶ 18} “No assessment shall be made against any motor fuel dealer for 
taxes imposed by this chapter more than four years after the date on which the 
report on which the assessment was based was due or was filed, whichever is 
later.”  (Emphasis added.) 
{¶ 19} The commissioner relies on the contrast between the broad 
language authorizing assessments against “any person” with liabilities under the 
motor-fuel-tax law and the third paragraph’s reference to “motor fuel dealers”:  
under this reading, the contrasting language means that the four-year limitation 
should not be viewed as incorporated into the manner for making assessments 
against responsible parties. 
{¶ 20} We disagree.  To adopt the commissioner’s proposed reading 
would violate the precept that we “should construe statutes to give effect to all the 
enacted language.”  Church of God in N. Ohio v. Levin, 124 Ohio St.3d 36, 2009-
Ohio-5939, 918 N.E.2d 981, ¶ 30, citing State ex rel. Bohan v. Indus. Comm. 
(1946), 147 Ohio St. 249, 251, 34 O.O. 151, 70 N.E.2d 888 (courts should “ 
‘accord meaning to each word of a leglislative [sic] enactment if it is reasonably 
possible to do so’”).  Namely, the commissioner’s construction of the statutes 
would make a nullity out of R.C. 5735.35(A)(2)’s mandate that assessments 
against responsible parties be made “in the manner provided in sections 5735.12 
and 5735.121 of the Revised Code.” 
January Term, 2010 
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{¶ 21} Although we acknowledge that the contrasting language of the 
second and third paragraphs of R.C. 5735.12(A) may imply that some persons 
who are subject to being assessed do not enjoy the benefit of the four-year time 
limitation,1 we reject the contention that the employees, officers, or trustees of a 
motor-fuel dealer fall within that category.  Because assessments against 
employees, officers, or trustees of a motor-fuel dealer must be made “in the 
manner provided in” R.C. 5735.12, and because that section imposes the four-
year time limit on assessments against the motor-fuel dealer itself, we hold that 
assessments against a motor-fuel dealer’s employees, officers, or trustees as 
responsible parties are also subject to the four-year limitation period.  As a result, 
the assessment against Ceccarelli in this case was time-barred. 
{¶ 22} Finally, we address the commissioner’s contention that any “doubt 
concerning the reasonableness and lawfulness of the Commissioner’s and the 
BTA’s interpretation of R.C. 5735.12(A)” should be “resolved against Mr. 
Ceccarelli’s statute of limitation claim.”  This argument is premised on the 
doctrine that a statute of limitations does not restrain the state unless the restraint 
is expressly provided for in the statute.  See State ex rel. Springfield City School 
Dist. Bd. of Edn. v. Gibson (1935), 130 Ohio St. 318, 320-321, 4 O.O. 352, 199 
N.E. 185 (holding that although the state is immune from statutes of limitation 
and such immunity “can only be waived by express provision to that effect within 
the statute,” the state’s immunity does not extend to a political subdivision); 
Seeley v. Thomas (1877), 31 Ohio St. 301, 308 (laches does not run against the 
state); State ex rel. Parrot v. State Bd. of Public Works (1881), 36 Ohio St. 409, 
                                                 
1.  The motor-fuel-tax statutes authorize assessments against some persons who may not 
themselves qualify either as motor-fuel dealers or as responsible-party employees, officers, or 
trustees of a motor-fuel dealer.  See, e.g., R.C. 5735.064(C), 5735.101, 5735.123, and 5735.124.  
Because the present case involves an assessment against a corporate officer of a motor-fuel dealer, 
we need not and do not address the applicability of the four-year limitation to assessments against 
any person who is assessed on some basis other than his or her status as an employee, officer, or 
trustee of a motor-fuel dealer.   
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414 (statute providing for payment of interest with late payment did not apply to 
state); Heddleston v. Hendricks (1895), 52 Ohio St. 460, 465, 40 N.E. 408 (no 
adverse possession against the state).  Unlike the cases cited, however, the present 
case involves an explicit limitation on state authority, i.e., the power to issue tax 
assessments.  By contrast, the cited cases hold only that a general statute that 
binds private litigants does not bind the state absent express language to that 
effect.  The cases are inapposite, and the doctrine they articulate does not apply to 
the four-year limitation at issue. 
Conclusion 
{¶ 23} Because the BTA acted unlawfully when it upheld the assessment 
of unpaid motor-fuel taxes against Ceccarelli, we reverse the decision of the BTA. 
Decision reversed. 
 
BROWN, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, LANZINGER, and CUPP, JJ., concur. 
__________________ 
 
Carlile, Patchen & Murphy, L.L.P., Leon Friedberg, and Robert T. Castor, 
for appellant. 
 
Richard Cordray, Attorney General, and Barton A. Hubbard and Sophia 
Hussain, Assistant Attorneys General, for appellee. 
______________________