Dublin School Dist. Bd. of Edn. v. Limbach

• Decision Date: 11 May 1994
• Docket Number: No. 92-1497,92-1497
• Citation: 69 Ohio St.3d 255,631 N.E.2d 604
• Parties: , 90 Ed. Law Rep. 777 BOARD OF EDUCATION OF THE CITY OF DUBLIN SCHOOL DISTRICT, Appellant and Cross-Appellee, v. LIMBACH, Tax Commr., Appellee; Friendship Village of Dublin, Ohio, Inc., Appellee and Cross-Appellant.
• Court: Ohio Supreme Court

Page 255

69 Ohio St.3d 255

631 N.E.2d 604, 90 Ed. Law Rep. 777

BOARD OF EDUCATION OF THE CITY OF DUBLIN SCHOOL DISTRICT, Appellant and Cross-Appellee, v. LIMBACH, Tax Commr., Appellee; Friendship Village of Dublin, Ohio, Inc., Appellee and Cross-Appellant.

No. 92-1497.

Supreme Court of Ohio.

Submitted Jan. 4, 1994.

Decided May 11, 1994.

Teaford, Rich, Coffman & Wheeler and Jeffrey A. Rich, Columbus, for appellant and cross-appellee.

Vorys, Sater, Seymour & Pease, Raymond D. Anderson and Tony C. Merry, Columbus, for appellee and cross-appellant.

Lee I. Fisher, Atty. Gen., Richard C. Farrin and Janyce C. Katz, Asst. Attys. Gen., for appellee.

PER CURIAM.

Ultimately, the issue is whether the BTA's decision is unreasonable or unlawful. Subsumed within that issue is whether the subject property is entitled to tax exemption as property "used * * * as hospital facilities" under former R.C. 140.08.

The school board first contends that the BTA erred in relying on collateral estoppel to conclude that the bond validation proceeding determined that Village is a "hospital facility" as defined in R.C. 140.01(E) because the school board was not a party to, was not served with notice of, and did not participate in, the bond validation proceeding, and because the tax exemption issue was not decided in that action.

Ancillary to this issue, the school board on appeal contends that some parts of the subject property are used for private residential purposes under former R.C. 140.08, and not as hospital facilities, and that the commissioner should have split-listed the property under R.C. 5713.04. ²

The BTA's decision, that the school board is estopped from questioning whether the subject property was exempt hospital facilities, is unreasonable and unlawful. Accordingly, it is not necessary to decide the further issues of the school board's challenge of the constitutionality of former R.C. 140.08, or the claim by Village on cross-appeal that the school board lacked standing to raise constitutional questions.

The BTA found that the issue of whether the Friendship Village complex qualified as a hospital facility was an issue to be determined by the common pleas court, and that the court had decided the complex was a hospital facility, even though it partially served residential purposes. Additionally, the BTA found the question of split-listing was likewise determinable in common pleas court, and that if the school board wanted to raise an argument about how that court's decision might have an impact on property tax exemption, it should have pursued the argument in that forum.

Collateral estoppel does not apply in the instant appeal. In Am. Soc. for Metals v. Limbach (1991), 59 Ohio St.3d 38, 39, 569 N.E.2d 1065, 1066, we set forth the basic requirements for collateral estoppel: "(1) an administrative proceeding of a judicial nature, (2) an identity of the parties, and (3) an identity of the issues." See, also, Hooven & Allison Co. v. Lindley (1983), 4 Ohio St.3d 169, 4 OBR 410, 447 N.E.2d 1295.

The 1981 common pleas court proceeding satisfies the first requirement. However, there is a failure to meet the other requirements. The school board was not named as a party, nor did it participate in that action. The issues involved in the two proceedings were not identical. The question in the 1981 common pleas court action was not whether, as here in tax year 1986, the property was tax exempt but, rather, whether the revenue bonds issued to refinance the construction of the complex were valid.

The common pleas court held, in the bond validation proceeding, that the property to be financed with the proceeds of said bonds qualified as a hospital facility under R.C. 140.01. The common pleas court, thus, validated the bonds. There is no suggestion that the common pleas court attempted to decide the issue of real property tax exemption, or that it had, or believed it had, authority to do so.

Collateral estoppel does not bar the school board from litigating, as it has attempted to do, the issue of whether the subject property, or some portion of it, was exempt as hospital facilities under R.C. 140.01(E).

As to the dispositive issue herein, the test for exemption under former R.C. 140.08 is whether property is (1) owned by a "public hospital agency" as...