Lenart v. Lindley

• Decision Date: 30 January 1980
• Docket Number: 79-292 and 79-295,Nos. 79-291,s. 79-291
• Citation: 61 Ohio St.2d 110,399 N.E.2d 1222,15 O.O.3d 152
• Parties: , 15 O.O.3d 152 LENART, Appellee, v. LINDLEY, Tax Commr., Appellant. CASERTA, Appellee, v. LINDLEY, Tax Commr., Appellant. TIDRICK, Appellee, v. LINDLEY, Tax Commr., Appellant.
• Court: Ohio Supreme Court

Page 110

61 Ohio St.2d 110

399 N.E.2d 1222, 15 O.O.3d 152

LENART, Appellee, v. LINDLEY, Tax Commr., Appellant.

CASERTA, Appellee, v. LINDLEY, Tax Commr., Appellant.

TIDRICK, Appellee, v. LINDLEY, Tax Commr., Appellant.

Nos. 79-291, 79-292 and 79-295.

Supreme Court of Ohio.

Jan. 30, 1980.

These appeals arise from a consolidated decision of the Board of Tax Appeals (BTA) wherein the board reversed sales tax assessments levied by appellant herein, the Tax Commissioner, against appellees, Kay Lenart, William M. Caserta, and Glenn R. Tidrick. The appeals were heard before this court on the same day and, because they involve common issues of fact and law, are consolidated for disposition.

In cases Nos. 79-291 and 79-292, Lenart and Caserta were informed by notice of tax assessment that they were personally liable, under the authority of R.C. 5739.33, for unpaid sales taxes, penalties, and delinquency charges. This liability allegedly resulted from the failure of American Airmotive, Inc. (Airmotive), the corporation with which appellees were associated, to remit sales taxes to the state of Ohio. Subsequent to a hearing on these assessments, appellant concluded that Caserta was subject to liability for unpaid sales taxes during the period from March 12, 1970, to July 6, 1973. Caserta had held the position of Vice-President for Airmotive from March of 1970 until his resignation from that office in July or August of 1973. Appellant's entry noted further that Lenart's liability also arose under the provisions of R.C. 5739.33, and involved unpaid sales taxes occurring from March 12, 1970, to October 26, 1972, and from May 20, 1973, to July 15, 1973. The record demonstrates that Lenart served as the Secretary-Treasurer of Airmotive in 1970 and 1971, and then as Secretary of the corporation from 1971 until July of 1973.

Appellees filed substantially identical notices of appeal with the BTA, challenging the determination of appellant and specifying, inter alia, that they were not personally liable for the sales tax assessments because all corporate "sales tax return filings and payments were current" prior to their resignations as corporate officers. When appellees' causes came before the BTA for disposition, appellant objected to the admission of evidence relative to whether appellees' responsibilities as corporate officers placed them within the purview of R.C. 5739.33, contending that appellees' failure to raise that issue in their notices of appeal, as required the R.C. 5717.02, rendered the BTA without jurisdiction to consider it. Citing Abex v. Kosydar (1973), 35 Ohio St.2d 13, 298 N.E.2d 584, the BTA overruled appellant's objection. The BTA reversed appellant's orders, finding that appellees' corporate responsibilities were insufficient to render them personally liable for the assessments in question.

In case No. 79-295, appellant issued three sales tax assessments against appellee, Glenn Tidrick, wherein Tidrick was held personally liable, pursuant to R.C. 5739.33, for unremitted sales taxes, penalties, and delinquencies owed by Airmotive and occurring between October 26, 1972, and December 5, 1974. Subsequent to a hearing held before appellant, Tidrick's liability was upheld on the basis of his involvement as a corporate employee and officer.

The record demonstrates that Tidrick was initially employed by Airmotive in May of 1972 as an accountant. In November he was appointed Treasurer of the corporation, an office which he held until April of 1973. On July 19, 1974, he was appointed Vice-President and Treasurer of Airmotive and was elected to the corporation's Board of Directors. On December 5, 1974, Tidrick resigned his offices with the corporation, but remained as an employee. In March of 1975, the corporation went into receivership.

Tidrick appealed to the BTA from appellant's orders, alleging that appellant erred in finding him liable for the corporation's unpaid sales taxes because he at no time had the control of, supervision over, or responsibility for, filing sales tax returns or making the payments, within the meaning of R.C. 5739.33 or Weiss v. Porterfield (1971), 27 Ohio St.2d 117, 271 N.E.2d 792. The BTA found that Tidrick did not come within R.C. 5739.33 and reversed the assessments levied by appellant.

These causes are now before this court upon appeals as a matter of right.

Coyner & McSwain and William T. McSwain, Columbus, for appellees Lenart and Caserta.

Alexander, Ebinger, Holschuh, Fisher & McAlister and J. Stephen Van Heyde, Columbus, for appellee Tidrick.

William J. Brown, Atty. Gen., and John C., Duffy, Jr., Asst. Atty. Gen., for appellant.

I.

PER CURIAM.

In cases Nos. 79-291 and 79-292, appellant challenges the jurisdiction of the BTA to absolve Lenart and Caserta from liability. Appellant argues that the decision of the BTA is grounded solely upon an alleged error of the Tax Commissioner which appellees did not specifically raise in their notices of appeal. Therefore, appellant contends the BTA exceeded its statutory authority under R.C. 5717.02. Lenart and Caserta argue that a notice of appeal filed under R.C. 5717.02 should be sufficient to confer jurisdiction upon the BTA if both the board and the commissioner are apprised of the issues to be decided during the proceedings. Cited in support of this assertion are Queen City Valves v. Peck (1954), 161 Ohio St. 579, 120 N.E.2d 310; Abex v. Kosydar (1973), 35 Ohio St.2d 13, 298 N.E.2d 584; and Gochneaur v. Kosydar (1976), 46 Ohio St.2d 59, 346 N.E.2d 320.

The provisions of R.C. 5717.02 confer upon the BTA authority to review final determinations of the Tax Commissioner. The statute provides, in applicable part:

" * * * The notice of (such) appeal shall set forth, or have attached thereto * * * a true copy of the notice sent by such commissioner to the taxpayer of the final determination complained of, and shall also specify the errors therein complained of." (Emphasis added.)

In their notices of appeal, Lenart and Caserta specified as grounds for the reversal of the orders of the Tax Commissioner the following propositions of error:

"(3)a. * * * (Lenart and Caserta) resigned as * * * (corporate officers) of American Airmotive, Inc., in August, 1973. At that time, all sales tax return filings and payments were current. Therefore * * * (Lenart and Caserta have) no personal liability under Ohio Revised Code Section 5739.33.

"b. Assessments are made against items purchased for resale, clearly not taxable under Chapter 5739 Ohio Revised Code.

"c. Said assessment covers periods of time after * * * (Lenart and Caserta) had resigned from American Airmotive and * * * (were) thereby relieved of any further personal liability.

"d. Said assessment is so vague as to be impossible of interpretation. * * * (Lenart and Caserta) cannot determine from the assessment what transactions are being assessed. Collection of amounts allegedly owed based upon such information would be a violation of Due Process of Law as guaranteed by the Constitution of the United States of America."

The supplemental notices of appeal stated, in part:

"4. In addition to the errors complained of in the original Notice of Appeal, appellee finds additional error to wit:

"A. The Commissioner erred in finding * * * (Lenart and Caserta) liable since the assessment is barred by the statute of limitations.

"B. The Commissioner erred in that said assessment was made without a proper audit of the books and records.

"C. The Commissioner erred in determining Ohio Revised Code Section 5739.33 applied to * * * (Lenart and Caserta) such application is unconstitutional, denying * * * (Lenart and Caserta) due process of law in violation of the United States Constitution."

The question presented is whether the aforementioned notices of appeal are sufficient, within the meaning of R.C. 5717.02, to confer jurisdiction upon the BTA to render the decision from which these appeals are taken.

In considering this question of specificity in the past, this court has held that R.C. 5717.02 is a jurisdictional enactment and that adherence to the conditions and procedure set forth in the statute is essential. E. g., American Restaurant & Lunch Co. v. Glander (1946), 147 Ohio St. 147, 70 N.E.2d 93; Kent Provision Co. v. Peck (1953), 159 Ohio St. 84, 110 N.E.2d 776; Queen City Valves v. Peck, supra (161 Ohio St. 579, 120 N.E.2d 310); Ladas v. Peck (1954), 162 Ohio St. 159, 122 N.E.2d 12; Painesville v. Lake County Budget Comm. (1978), 56 Ohio St.2d 282, 383 N.E.2d 896; Hafner & Sons v. Lindley (1979), 58 Ohio St.2d 130, 388 N.E.2d 1240.

The BTA's determination was predicated upon its finding that Lenart and Caserta were not corporate officers who controlled, or were charged with the responsibility of, filing sales tax returns and making tax payments, and therefore were not personally liable for the assessments within the meaning of R.C. 5739.33 and our decision in Weiss v. Porterfield (1971), 27 Ohio St.2d 117, 271 N.E.2d 792. However, a perusal of the notices of appeal does not demonstrate an assignment of error which specifically alleges this as a basis upon which appellant's decision should be reversed. The only reference in the notices of appeal to corporate positions is in paragraphs 3a and c, wherein appellees aver that at the time they resigned as corporate officers all sales taxes had been fully paid by the corporation. In our view, these statements were insufficient, under R.C. 5717.02, to confer jurisdiction upon the BTA to resolve the separate and dissimilar question of whether appellees were in control of, or were responsible for, the preparation and payment of the sales taxes under assessment.

Lenart and Caserta contend that this conclusion contravenes the cases of Queen City Valves v. Peck, supra; Abex Corp. v. Kosydar, supra (35 Ohio St.2d 13, 298 N.E.2d 584), and Gochneaur v. Kosydar, supra (46 Ohio St.2d 59, 346 N.E.2d 320). However, in both Queen City Valves...