Foreclosure Liens for Delinquent Taxes by Action in Rem v. Parcels for Mineral Rights Taxes Encumbered with Delinquent Tax Liens
| Decision Date | 16 November 2020 |
| Docket Number | Case No. 2020CA0005 |
| Citation | 2020 Ohio 5311 |
| Parties | IN THE MATTER OF THE FORECLOSURE OF LIENS FOR DELINQUENT TAXES BY ACTION IN REM, JANETTE DONAKER, COSHOCTON COUNTY TREASURER Plaintiff-Appellee v. PARCELS FOR MINERAL RIGHTS TAXES ENCUMBERED WITH DELINQUENT TAX LIENS AND DIVERSIFIED OIL AND GAS LLC NKA DIVERSIFIED PRODUCTION LLC Defendants-Appellants |
| Court | Ohio Court of Appeals |
OPINION
For Plaintiff-Appellee:
JASON GIVEN
COSHOCTON COUNTY PROSECUTOR
JAMES R. SKELTON
309 Main Street
Coshocton, Ohio 43812
For Defendant-Appellant:
NICHOLAS M.J. RAY
MITCHELL A. TOBIAS
52 East Gay St.
P.O. Box 1008
Columbus, OH 43216-1008
{¶1} Defendant-Appellant Diversified Oil and Gas, LLC nka Diversified Production LLC appeals the May 29, 2020 judgment entry of the Coshocton County Court of Common Pleas.
{¶2} On March 5, 2020, Plaintiff-Appellee Coshocton County Treasurer filed an in rem action to foreclose on tax liens against two mineral rights parcels pursuant to R.C. 5721.18. The complaint alleged the last known owners of the parcels were the Peabody Coal Co. and R & F Coal. The judicial certificate of title stated the title to the real estate was vested in the Adams Mills Coal Company, Oxford Oil Company, and Sentry Royalty Company. Coshocton County served copies of the in rem foreclosure complaint on the interest holders.
{¶3} On March 9, 2020, the Governor of the State of Ohio issued Executive Order 2020-01D and declared a state of emergency in Ohio in response to COVID-19. On March 27, 2020, H.B. 197 immediately tolled, retroactively to March 9, 2020, all statutorily established statutes of limitations, time limitations, and deadlines in the Ohio Revised Code and Administrative Code until the expiration of Executive Order 2020-01D or July 30, 2020, whichever came sooner. On March 27, 2020, the Ohio Supreme Court issued an Administrative Order to work in conjunction with H.B. 197 that tolled the time requirements established by all Supreme Court-promulgated rules.
{¶4} Although it was not served with the complaint, Defendant-Appellant Diversified Oil and Gas, LLC nka Diversified Production LLC filed an answer on April 3, 2020. It alleged it was the owner of the mineral rights parcels at issue in the complaint and submitted a Limited Warranty Mineral Deed demonstrating its interest. Diversified denied the taxes were owing because the parcels were incorrectly valued and/or clerical errors.
{¶5} On April 14, 2020, Coshocton County filed a Motion for Summary Judgment on its in rem foreclosure complaint. It argued there was no genuine issue of material fact that the property taxes on the mineral rights parcels were delinquent. Coshocton County argued Diversified as the interest holder was not entitled to file a responsive pleading because it was not a party to the action. In an in rem foreclosure proceeding, the two mineral rights parcels were the defendants. If Diversified contested the valuation of the mineral rights parcels, Diversified was required to raise the issue with the Board of Revision and it had not brought a claim to the Board of Revision. Attached to its motion for summary judgment, Coshocton County submitted the affidavit of the Treasurer reflecting the taxes were delinquent for the two parcels in the total amount of $254,593.65.
{¶6} Diversified filed a Civ.R. 56(F) motion on May 11, 2020. In its motion, it sought additional time to conduct discovery on the material facts of the basis and amounts of the claimed tax delinquencies. In support of its motion, Diversified attached the affidavit of its Senior Vice President. It first countered Coshocton County's argument that it was not entitled to file a responsive pleading stating that pursuant to R.C. 5721.18(B)(2)(a), any person claiming an interest in any parcel described in the complaint could file an answer and assert defenses or objections to the foreclosure. It next argued the tax foreclosure amounts sought by Coshocton County were incorrect either by clerical error and/or an incorrect valuation. Diversified was conducting a parallel proceeding with the Board of Revision and the Coshocton County Auditor to address the valuation. Diversified further argued an extension of time to respond to the motion for summary judgment was appropriate considering the state of emergency within the State of Ohio and resulting Executive and Administrative Orders tolling time limitations.
{¶7} Coshocton County did not respond to the Civ.R. 56(F) motion.
{¶8} On May 29, 2020, the trial court issued its judgment entry simultaneously denying Diversified's Civ.R. 56(F) motion and granting Coshocton County's motion for summary judgment. Diversified did not have the opportunity to file a response to the motion for summary judgment before the trial court ruled. In its judgment entry, the trial court found there was no genuine issue of material fact that property taxes were delinquent for the two mineral rights parcels in the total amount of $254,593.65. It next found that Diversified had not filed a complaint with the Board of Revision challenging the valuation of the mineral rights parcels within the time frame allowed by R.C. 5715.19. By challenging the in rem foreclosure, the trial court found that Diversified was using the tax foreclosure proceeding as a second opportunity for relief, which it was not entitled to as a matter of law.
{¶9} It is from this judgment Diversified now appeals.
{¶10} Diversified raises two Assignments of Error:
{¶11} "I. THE TRIAL COURT ERRED IN DENYING APPELLANT'S UNOPPOSED MOTION FOR A CIVIL RULE 56(F) ORDER FOR A CONTINUANCE TO PERMIT DISCOVERY TO BE HAD IN RESPONSE TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT.
{¶12}
I. & II. Civ.R. 56(F) and Summary Judgment
{¶13} Diversified argues in its first Assignment of Error the trial court abused its discretion when it denied its Civ.R. 56(F) motion for additional time for discovery. It argues in its second Assignment of Error that if the trial court abused its discretion in denying the Civ.R. 56(F) motion, the May 29, 2020 judgment entry granting summary judgment in favor of Coshocton County was premature. We agree.
{¶14} We first review the statutory requirements for bringing and responding to a tax foreclosure proceeding. Pursuant to R.C. 5721.18, Coshocton County initiated the tax foreclosure proceedings against the two parcels of mineral rights. R.C. 5721.18 states that the county prosecuting attorney, upon the delivery to the prosecutor by the county auditor of a delinquent land tax certificate containing minerals or rights to minerals, "may institute a foreclosure proceeding in the name of the county treasurer, in any court with jurisdiction, to foreclose the lien of the state against such minerals or rights to minerals, unless the taxes, assessments, charges, penalties, and interest are paid prior to the time the complaint is filed * * *." A tax foreclosure action is an action in rem and not in personam. Leonard v. Pilkington, 10th Dist. Franklin No. 14AP-650, 2015-Ohio-1432, 2015 WL 1641392, ¶ 14. Thus, the foreclosure operates on the land itself and not on the title of the one in whose name the property is listed for taxation. Id. In this case, Coshocton County sent notice of the in rem foreclosure proceeding to the last known owners, according to the Judicial Certificate of Title, lienholders, or persons with an interest in the parcels named in the foreclosure proceeding. The Judicial Certificate of Title did not list Diversified as an owner or person of interest in the mineral rights parcels.
{¶15} Pursuant to 5721.18(B)(2)(a), Diversified filed an answer identifying its ownership in the mineral rights and denied that the amounts claimed were properly due and owing, alleged a clerical error had occurred, and reserved the right to assert additional affirmative defenses after discovery.
{¶16} Eleven days after Diversified filed its answer, Coshocton County filed a motion for summary judgment arguing it was entitled to judgment as a matter of law on its complaint in foreclosure because there was no genuine issue of material fact that taxes in the amount of $83,675.84 and $170,917.81 were due and owing on the two mineral parcels. In response to the motion for summary judgment, Diversified filed a motion for Civ.R. 56(F), asking for a continuance on the motion for summary judgment to conduct discovery.
{¶17} Civ.R. 56(F) provides:
(F) When affidavits unavailable Should it appear from the affidavits of a party opposing the motion for summary judgment that the party cannot for sufficient reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or discovery to be had or may make such other order as is just.
{¶18} Civ.R. 56(F) provides the remedy for a party who seeks a continuance on a motion for summary judgment in order to conduct discovery relevant to the motion. TPI Asset Mgt., L.L.C. v. Baxter, 5th...
To continue reading
Request your trial