State ex rel. Lorain v. Stewart

• Decision Date: 14 August 2008
• Docket Number: No. 2007-2289.,2007-2289.
• Parties: The STATE ex rel. CITY OF LORAIN et al. v. STEWART, Aud.
• Court: Ohio Supreme Court

893 N.E.2d 184

119 Ohio St.3d 222

2008-Ohio-4062

The STATE ex rel. CITY OF LORAIN et al. v. STEWART, Aud.

No. 2007-2289.

Supreme Court of Ohio.

Submitted July 31, 2008.

Decided August 14, 2008.

Vorys, Sater, Seymour and Pease, L.L.P., Alexandra T. Schimmer, Scott J. Ziance, Columbus, and Michael S. Gordon, Cleveland; and Mark R. Provenza, Lorain Law Director, for relators.

The Chandra Law Firm, L.L.C., Subodh Chandra, and Jaime Bouvier, Cleveland, for respondent.

Thomas P. Pappas, Columbus, urging denial of the writ for amicus curiae, County Auditors' Association of Ohio.

PER CURIAM.

{¶ 1} This is an original action for a writ of mandamus to compel a county auditor to place on the tax-exempt property list certain properties certified by a city housing officer as having been granted community-reinvestment-area tax exemptions. Because relators have established the requirements for the requested extraordinary relief, we grant the writ.

Creation of Community Reinvestment Areas

{¶ 2} Between 1980 and 1990, relator city of Lorain established five community reinvestment areas ("CRAs"). In 1985, Lorain passed an ordinance establishing Community Reinvestment Area No. 3 ("CRA 3"), and in 1989, Lorain passed an ordinance establishing Community Reinvestment Area No. 4 ("CRA 4"). Before 2006, the applicable ordinances for CRAs 3 and 4 provided for a "50% exemption of real estate or improvements for one (1) year" unless otherwise contractually agreed to under R.C. 3735.67.

{¶ 3} Lorain subsequently amended the CRA ordinances for the five CRAs, including CRAs 3 and 4, to delete the specified percentage and period of the tax exemption and to instead provide that "within the `Community Reinvestment Area' tax exemptions for improvements to real property described as in Section 3735.65 of the Ohio Revised Code will be granted to the applicant based on the written recommendation of the City Council Committee of Tax Incentives."

{¶ 4} A few months later, Lorain passed Ordinance No. 93-06, which provided that "the Community Reinvestment Area Program re-affirmed by Lorain City Council by Ordinance No. 220-05 for City of Lorain Community Reinvestment Areas 1, 2, 3, 4, and 5 * * *, which is part of the Community Reinvestment Area Program attached as Attachment `B,' Section 2-5, and fully incorporated as part of this ordinance respectively shall be in full force and effect." The text of the ordinance and the portions of an attachment incorporated therein did not contain a percentage and period for CRA tax exemptions, although unincorporated attachments included model CRA agreements specifying a 100 percent tax exemption for a maximum period of 15 years.

Certification of CRA Exemptions

{¶ 5} Between December 12, 2006, and July 19, 2007, the Lorain housing director determined that 355 properties in CRAs 3 and 4 met the requirements for CRA tax exemptions. The housing director forwarded the applications for exemptions and his certifications for some of the properties to respondent, Lorain County Auditor Mark R. Stewart, for placement on the county's tax-exempt property list. The housing director later resubmitted the certifications and submitted the remaining certifications for the properties to show the 100 percent percentage of each exemption and the exemption period of 15 years.

Auditor's Refusal to Place Properties on Tax-Exempt List

{¶ 6} The auditor refused to place the 355 properties in CRAs 3 and 4 on the tax-exempt property list. Instead, the auditor sent letters to the property owners stating that the properties would remain on the list of taxable property in Lorain County because the city's tax exemption was improper. In his letters, the auditor asserted that in exercising his authority under R.C. 5713.08 to ensure that the properties were exempted from taxation, he concluded that Lorain's CRA tax-exemption program was fatally flawed because:

{¶ 7} "The ordinance that the Lorain City Council amended and enacted fails to identify a term of years for the proposed tax exemption;

{¶ 8} "The ordinance that the Lorain City Council amended and enacted fails to identify a percentage of tax exemption to be applied to your tax bill;

{¶ 9} "The property listed on your application is not new construction, as required by law, and was already built, occupied and on the tax rolls before your application was made; and

{¶ 10} "Your application was submitted more than [a] year after original construction and improvements."

Action for Declaratory Relief

{¶ 11} The Lorain County Commissioners then filed a complaint in the Lorain County Court of Common Pleas for declaratory and injunctive relief. A month later, the county commissioners amended the complaint to name Lorain, the Lorain housing officer, and Lorain County Auditor Stewart, among others, as defendants. The commissioners sought a declaration that the city's CRA program is illegal as it applies to the tax-abatement applications in the CRAs.

Administrative Appeals

{¶ 12} Lorain and its housing officer also filed a notice of appeal to the common pleas court contesting Lorain County Auditor Stewart's refusal to list the properties certified by the housing officer as tax-exempt CRA properties. In addition, some of the property owners who had been granted CRA exemptions by the city filed administrative appeals from the auditor's decision.

{¶ 13} The Lorain County Court of Common Pleas consolidated the county commissioners' declaratory judgment action with the administrative appeals, and those cases remain pending.

Mandamus Case

{¶ 14} A couple months later, Lorain and its housing director filed this action for a writ of mandamus against the county auditor. In an amended complaint, relators, Lorain and Housing Officer Drake Hopewell, request a writ of mandamus to compel the auditor to place the properties certified by the city's housing officer as qualifying for CRA exemptions on the tax-exempt property list. After the auditor filed a motion to dismiss, we denied the motion and granted an alternative writ. State ex rel. Lorain v. Stewart, 117 Ohio St.3d 1474, 2008-Ohio-1841, 884 N.E.2d 1107.

{¶ 15} The parties have filed evidence, briefs, and requests for oral argument. In addition, the County Auditors' Association of Ohio has filed an amicus curiae brief in support of Stewart.

{¶ 16} This case is now before the court upon consideration of the parties' requests for oral argument and on the merits.

Requests for Oral Argument

{¶ 17} The parties request oral argument. "Oral argument is not required in an original action in this court; instead, oral argument is discretionary in these cases." State ex rel. Mun. Constr. Equip. Operators' Labor Council v. Cleveland, 114 Ohio St.3d 183, 2007-Ohio-3831, 870 N.E.2d 1174, ¶ 42. "Nevertheless, we have discretion to grant oral argument pursuant to S.Ct.Prac.R. IX(2)(A), and in exercising this discretion, we consider whether the case involves a matter of great public importance, complex issues of law or fact, a substantial constitutional issue, or a conflict among courts of appeals." State ex rel. Davis v. Pub. Emps. Retirement Bd., 111 Ohio St.3d 118, 2006-Ohio-5339, 855 N.E.2d 444, ¶ 15.

{¶ 18} First, the parties do not specify any of these reasons for oral argument. Relators claim only that "oral argument would be beneficial in allowing the parties to address the record and answer questions the Court may have regarding the legal issues presented in this case"; the auditor specifies no reasons in his request. See State ex rel. McGinty v. Cleveland City School Dist. Bd. of Edn. (1998), 81 Ohio St.3d 283, 286, 690 N.E.2d 1273 (request for oral argument denied for several reasons, including that no reason was given "why oral argument would be beneficial to a resolution" of the case).

{¶ 19} Second, the "parties' briefs and evidence are sufficient to resolve the issues raised in this case." State ex rel. Allen v. Warren Cty. Bd. of Elections, 115 Ohio St.3d 186, 2007-Ohio-4752, 874 N.E.2d 507, ¶ 21.

{¶ 20} Third, this case does not involve complex legal or factual issues or a conflict between courts of appeals, and any constitutional issues raised need not be addressed in the court's decision on the merits. State ex rel. Carr v. Akron, 112 Ohio St.3d 351, 2006-Ohio-6714, 859 N.E.2d 948, ¶ 57, quoting Smith v. Leis, 106 Ohio St.3d 309, 2005-Ohio-5125, 835 N.E.2d 5, ¶ 54 ("`courts decide constitutional issues only when absolutely necessary'").

{¶ 21} Fourth, while the parties claim that there is some public importance to this case, these concerns seem largely overstated, and as noted previously, the briefs are sufficient to resolve the case.

{¶ 22} Therefore, we deny the parties' requests for oral argument.

Mandamus — General Standard

{¶ 23} To be entitled to the requested writ of mandamus, Lorain and its housing director must establish a clear legal right to have the 355 properties certified as meeting the CRA exemption requirements placed on the county's exempt-property list, a clear legal duty on the part of Lorain County Auditor Stewart to place these properties on the exempt-property list, and the lack of an adequate remedy in the ordinary course of law. State ex rel. Gen. Motors Corp. v. Indus. Comm., 117 Ohio St.3d 480, 2008-Ohio-1593, 884 N.E.2d 1075, ¶ 9.

Community Reinvestment Areas

{¶ 24} This case involves tax exemptions under R.C. 3735.65 to 3735.70, which "are designed to allow municipalities and counties to identify areas as `community reinvestment areas.'" 1 Gotherman, Babbit, & Lang, Local Government Law-Municipal (2004) 881, Section 26:7.

{¶ 25} In Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino (2001), 93 Ohio St.3d 231, 232-233, 754 N.E.2d 789, we analyzed the CRA statutory scheme:

{¶ 26} "In R.C. 3735.65 et seq., the General Assembly has instituted a property tax incentive program that promotes the construction and remodeling of commercial, industrial, and residential structures in CRAs. Before...