Jemo Associates, Inc. v. Lindley

• Decision Date: 30 December 1980
• Docket Number: No. 80-476,80-476
• Citation: 18 O.O.3d 518,415 N.E.2d 292,64 Ohio St.2d 365
• Parties: , 18 O.O.3d 518 JEMO ASSOCIATES, INC., Appellant, v. LINDLEY, Tax Commr., Appellee.
• Court: Ohio Supreme Court

Page 365

64 Ohio St.2d 365

415 N.E.2d 292, 18 O.O.3d 518

JEMO ASSOCIATES, INC., Appellant, v. LINDLEY, Tax Commr., Appellee.

No. 80-476.

Supreme Court of Ohio.

Dec. 30, 1980.

Michael D. Saad Co., L.P.A., Michael D. Saad and James A. Saad, Columbus, for appellant.

William J. Brown, Atty. Gen., and Mark A. Engel, Columbus, for appellee.

PER CURIAM.

R.C. 5703.02(D) authorizes the board to "(a)dopt * * * rules relating to the procedure of the board in hearing appeals * * *." Pursuant to this authority, the board adopted Ohio Adm.Code 5717-1-08, which, in relevant part, provides:

"(C) Signing; in general. * * * A notice of appeal of a corporation * * * shall be executed by an officer thereof or an attorney at law."

There is no dispute that the notice of appeal herein was signed by appellant's accountant, and thus not signed by an officer of appellant or an attorney as mandated by Ohio Adm.Code 5717-1-08(C). The board dismissed appellant's appeal because it determined that appellant's failure to comply with Ohio Adm.Code 5717-1-08(C) rendered the board jurisdictionally incompetent under R.C. 5717.02 to consider appellant's appeal. The commissioner herein, in effect, asks that we affirm this dismissal either (1) by sustaining the board's jurisdictional determination; or alternatively (2) by ruling that appellant's failure to comply with Ohio Adm.Code 5717-1-08(C) is itself sufficient to justify this dismissal. For reasons set forth, we reject both arguments.

R.C. 5717.02, in part, provides:

"Appeals from final determinations by the tax commissioner * * * may be taken to the board of tax appeals by the taxpayer * * *." (Emphasis added.)

The commissioner argues that the board properly dismissed this appeal for lack of jurisdiction because this appeal was not taken "by the taxpayer" within the meaning of R.C. 5717.02. In this connection, the commissioner argues that Ohio Adm.Code 5717-08(C) defines the exclusive conditions under which a corporation's notice of appeal to the board is "by the taxpayer" for jurisdictional purposes.

We disagree. Ohio Adm.Code 5717-1-08(C) was adopted under the authority of R.C. 5703.02(D) which authorizes the board to make rules relating to its procedure in hearing appeals. Therefore, while Ohio Adm.Code 5717-1-08(C) is indeed presumptively binding on us as respects board procedure, see, e. g., State, ex rel. Kildow, v. Indus. Comm. (1934), 128 Ohio St. 573, 580, 192 N.E. 873; Zangerle v. Evatt (1942), 139 Ohio St. 563, 572-574, 41 N.E.2d 369, ¹ it is not binding on us as respects board jurisdiction because the General Assembly has not vested the board with any authority to define its jurisdiction. Of course, we must nevertheless give due regard to the board's interpretation of its jurisdictional mandate. ²

As an interpretation of R.C. 5717.02, Ohio Adm.Code 5717-1-08(C) is simply not persuasive. A corporation's notice of appeal must necessarily be signed by an agent. Nothing in R.C. 5717.02 suggests that the General Assembly intended that an appeal by a corporation be jurisdictionally sufficient only where the agent of the corporation who signs its notice of appeal is either an officer thereof or an attorney. ³ Indeed, under agency law, the authority of any purported agent to act on behalf of a principal is ordinarily a question of fact. See, generally, 3 Ohio Jurisprudence 3d, 34-36, Agency, Section 19. There is thus no merit to an interpretation of R.C. 5717.02 which, for jurisdictional purposes, conclusively presumes that a corporate officer or an attorney is always competent to sign a corporation's notice of appeal but that any other corporate agent is never competent. ⁴ Therefore, we hold that R.C. 5717.02 does not require that a corporation's notice of appeal to the board be signed by a corporate officer or an attorney.

Alternatively, the commissioner argues that appellant's failure to comply with Ohio Adm.Code 5717-1-08(C) is itself sufficient to justify the board's dismissal of appellant's appeal.

As a procedural rule adopted under the authority of R.C. 5703.02(D), Ohio Adm.Code 5717-1-08(C) has the force and effect of law unless, inter alia, it is unreasonable. See State, ex rel. Kildow, v. Indus. Comm., supra; Zangerle v. Evatt, supra. See, also, fn. 1, supra.

The commissioner contends that the corporate signature requirement of Ohio Adm.Code 5717-1-08(C) is reasonable because (1) it improves the clarity of the assignments of error, which must be included in the notice of appeal under R.C. 5717.02, by assuring that an experienced professional has reviewed the notice of appeal; and (2) it inhibits a corporation from needlessly burdening the board's docket without having firmly decided to proceed to the merits. Since nothing in the record conflicts with these contentions, we hold that the requirement of Ohio Adm.Code 5717-1-08(C) that a corporation's notice of appeal to the board be signed by a corporate officer or an attorney is a valid exercise of the board's authority under R.C. 5703.02(D) to adopt rules relating to its procedure in hearing appeals.

One must distinguish, however, between the reasonableness of the signature requirement of Ohio Adm.Code 5717-1-08(C) and the reasonableness of the board's method of enforcing it. The commissioner argues that dismissal must automatically follow from a corporation's failure to comply with this signature requirement without regard to the circumstances underlying such failure. Since a notice of appeal to the board must be filed within 30 days of the commissioner's final determination, the commissioner's position in effect is that the mere failure of a corporation to comply with the signature requirement of Ohio Adm.Code 5717-1-08(C) is sufficient grounds for it to lose its right to appeal.

We reject the commissioner's argument. Sanctions short of dismissal ordinarily will assure compliance with this signature requirement, without unnecessarily forfeiting a corporation's right to appeal. Indeed, the commissioner presumably would not argue that the mere failure of a corporate officer's or attorney's signature to appear on a subsequently filed document, as required by another procedural rule of the board, ⁵ is sufficient to justify dismissal without regard to the underlying circumstances. The fact that the deficient document happens to be the initial step in the appeal (i. e., the notice of appeal) does not make automatic dismissal any more justified. Therefore, we hold that the mere failure of a corporation to comply with the signature requirement of Ohio Adm.Code 5717-1-08(C) is insufficient to justify dismissal of its appeal to the board without regard to the circumstances underlying such failure.

For the foregoing reasons, the decision of the Board of Tax Appeals being unreasonable and unlawful is reversed and the cause remanded for further proceedings.

Decision reversed and cause remanded.

WILLIAM B. BROWN, PAUL W. BROWN and SWEENEY, JJ., concur.

HOLMES, J., concurs in the judgment.

CELEBREZZE, C. J., and LOCHER and DOWD, JJ., dissent.

CELEBREZZE, Chief Justice, dissenting.

I must respectfully dissent from the majority decision in this case for two reasons. Initially I submit that the signature requirement of Ohio Adm.Code 5717-1-08(C) is a reasonable requirement. Secondly, a layman/accountant who prepares notices of appeal from rulings of the Tax Commissioner is, in my estimation, engaging in the unauthorized practice of law.

As this court stated in Kroger Grocery & Baking Co. v. Glander (1948), 149 Ohio St. 120, 125, 77 N.E.2d 921:

"This rule, like those of other administrative agencies, issued pursuant to statutory authority, has the force and effect of law unless it is unreasonable or is in clear conflict with statutory enactment governing the same subject matter. State, ex rel. Kildow, v. Industrial Commission (1934), 128 Ohio St. 573, 580 (192 N.E. 873)."

Thus, unless the rule is unreasonable or statutorily infirm, it would be appropriate for a reviewing court to defer to the board's expression of what it perceives to be the most effective way to manage its various responsibilities.

A notice of appeal from a decision of the Tax Commissioner must enumerate, in definite and specific terms, the precise legal errors asserted by the taxpayer. See Gochneaur v. Kosydar (1976), 46 Ohio St.2d 59, 346 N.E.2d 320; Queen City Valves, Inc., v. Peck (1954), 161 Ohio St. 579, 120 N.E.2d 310. Ohio Adm.Code 5717-1-08(F)(2) provides:

"The notice of appeal shall set forth in clear and concise fashion all matters required by the section of the Revised Code pursuant to which the appeal is taken. Where the appeal is from a county board of revision, the appropriate department of tax equalization (DTE) form shall be used."

Clearly, the notice of appeal requires the taxpayer to articulate the legal justification for an appeal. In order to make an informed decision to appeal to the Board of Tax Appeals, a taxpayer must be thoroughly familiar with the Revised Code and be able to analyze the manner that reviewing courts at all levels of the state judiciary have construed the tax statutes.

Any evaluation of the reasonableness of a rule must take into account the purposes it is designed to serve. Ohio Adm.Code 5717-1-08(C) is designed to ensure that all appeals by a corporation are properly authorized by a responsible agent, i. e., an attorney, who is in a position to commit the corporation to the appeals process. Compliance with Ohio Adm.Code 5717-1-08(C) also essentially guarantees that the assignments of error will be carefully reviewed and clearly drafted, thus expediting consideration of the taxpayer's appeal.

In view of the foregoing goals, the attainment of which Ohio Adm.Code 5717-1-08(C) facilitates, I conclude that it is a reasonable rule and one that should be upheld on this appeal. It is my firm conviction that, absent clear constitutional or statutory grounds or other compelling circumstances, a...