Wilmington City School Dist. Bd. of Edn. v. Clinton Cty. Bd. of Commrs., CA99-12-037.

• Decision Date: 05 June 2000
• Docket Number: No. CA99-12-037.,CA99-12-037.
• Citation: 141 Ohio App.3d 232,750 NE 2d 1141
• Parties: WILMINGTON CITY SCHOOL DISTRICT BOARD OF EDUCATION, Appellant, v. BOARD OF COMMISSIONERS OF CLINTON COUNTY et al., Appellees.
• Court: Ohio Court of Appeals

141 Ohio App.3d 232

750 NE 2d 1141

WILMINGTON CITY SCHOOL DISTRICT BOARD OF EDUCATION, Appellant, v. BOARD OF COMMISSIONERS OF CLINTON COUNTY et al., Appellees.^*

No. CA99-12-037.

Court of Appeals of Ohio, Twelfth District, Clinton County.

Decided June 5, 2000.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Means, Bichimer, Burkholder & Baker Co., L.P.A., and Robert M. Morrow, for appellant.

William E. Peelle, Clinton County Prosecuting Attorney, and Thayne D. Gray, Assistant Prosecuting Attorney, Wilmington, for appellees, Clinton County Board of Commissioners et al.

Daniel J. Buckley, Carol Mahaffey and Mary C. Henkel, for appellee, ABX Air, Inc.

Roger J. Makley and Dina M. Cary, for appellee, Miller-Valentine Partners, Ltd.

COPYRIGHT MATERIAL OMITTED

WILLIAM W. YOUNG, Judge.

Plaintiff-appellant, the Wilmington City School District Board of Education ("School Board"), appeals the decision of the Clinton County Court of Common Pleas dismissing its complaint for declaratory relief against defendants-appellees, Clinton County Board of Commissioners ("Commissioners"), Ken Schaublin, County Housing Officer, Wanda E. Armstrong, County Auditor, Joyce A. Atley, County Treasurer, Miller-Valentine Partners, Inc. ("Miller-Valentine"), and ABX Air, Inc. ("ABX Air").

On April 21, 1988, the Commissioners adopted Resolution No. 88-216, establishing a community reinvestment area ("CRA") pursuant to R.C. 3735.65 et seq. The CRA was located in an unincorporated area of Clinton County outside the city of Wilmington, but within the Wilmington City School District. Owners of property within the CRA could apply for seven-year exemptions from real property taxes. The county housing officer was responsible for approving tax exemptions.

In October 1992, ABX Air petitioned the city of Wilmington to annex 47.876 acres of the land located in the CRA. On October 14, 1992, the Wilmington City Council ("City Council") approved the application for annexation. On January 7, 1993, the City Council adopted Ordinance No. 3379, completing the annexation of the CRA property. On August 5, 1993, the City Council adopted the CRA as a municipal CRA in Resolution No. 1111. The county housing officer was responsible for approving applications for exemptions within the annexed CRA.

On October 23, 1992, immediately after the City Council approved the application for annexation, Miller-Valentine applied for two tax exemptions. The county housing officer approved the tax exemptions that same day. Following the passage of Ordinance No. 3379, ABX Air and Miller-Valentine continued to apply for tax exemptions, all of which were granted. In both cases, the School Board allegedly was not notified of or given the opportunity to comment upon the applications pursuant to former R.C. 5709.83.¹

On July 10, 1998, the School Board filed a complaint seeking a declaratory judgment that failure to follow former R.C. 5709.83 invalidated the granted tax exemptions. The school board also sought an order directing Armstrong, as County Auditor, to add the value of the contested properties to the tax rolls, and assess and collect the taxes that would have been levied if no tax exemptions had been granted. The School Board further sought a declaration stating that county officials had no jurisdiction to grant tax exemptions within the annexed CRA. ABX Air and Miller-Valentine were named defendants because they own the subject properties.

Appellees timely answered. ABX Air and Miller-Valentine also moved to dismiss the complaint, contending that the School Board did not have standing to bring the suit. On April 26, 1999, the trial court overruled the motions to dismiss.

ABX Air requested that the trial court reconsider its decision. On July 23, 1999, the trial court filed a second decision, finding that the school district lacked standing to challenge tax exemptions granted before July 22, 1994, when R.C. 5709.83 was amended by Am.Sub.S.B. No. 19. The trial court found that the pre-S.B. 19 statutory scheme did not grant the School Board a vested right upon which it could base a declaratory judgment action.

ABX Air requested that the trial court reconsider its second decision. On October 8, 1999, the trial court filed a third decision, finding that the School Board lacked standing to challenge any of the contested tax exemptions. The trial court found that S.B. 19, Section 3, precluded the School Board from having any vested right upon which it could base a suit. A final appealable judgment entry was filed on November 18, 1999. The School Board appeals, raising a single assignment of error:

"The trial court committed error in dismissing this action on the grounds that the Wilmington City School District Board of Education lacks standing to bring this action for declaratory relief."

In its assignment of error, the School Board contends that the trial court erred by finding that the School Board did not have standing to challenge appellees' alleged failure to comply with former R.C. 5709.83. The School Board also seeks to argue the merits of its declaratory judgment action. As the trial court addressed only the issue of standing in its decisions, we limit our discussion to that issue.

To dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Civ.R. 12(B)(6), "it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery." O'Brien v. Univ. Community Tenants Union, Inc. (1975), 42 Ohio St.2d 242, 71 O.O.2d 223, 327 N.E.2d 753, syllabus. A complaint should not be dismissed merely because the factual allegations contained in the complaint do not support the legal theory on which the plaintiff relies. The court must examine the complaint to determine if the allegations provide for relief on any possible theory. Fahnbulleh v. Strahan (1995), 73 Ohio St.3d 666, 667, 653 N.E.2d 1186, 1187-1188. The court must presume that all factual allegations in the complaint are true and construe all inferences that may be reasonably drawn therefrom in favor of the nonmoving party. Bridges v. Natl. Eng. & Contracting Co. (1990), 49 Ohio St.3d 108, 112, 551 N.E.2d 163, 167-168.

Declaratory judgment actions may be brought pursuant to R.C. 2721.03:

"Subject to division (B) of section 2721.02 of the Revised Code, any person interested under a deed, will, written contract, or other writing constituting a contract or any person whose rights, status, or other legal relations are affected by a constitutional provision, statute, rule as defined in section 119.01 of the Revised Code, municipal ordinance, township resolution, contract, or franchise may have determined any question of construction or validity arising under the instrument, constitutional provision, statute, rule, ordinance, resolution, contract, or franchise and obtain a declaration of rights, status, or other legal relations under it." (Emphasis added.)

"Person" is defined in R.C. 2721.01:

"As used in this chapter, `person' means any person, partnership, joint-stock company, unincorporated association, society, municipal corporation, or other corporation."

The status of a board of education as a "person" or party capable of bringing suit under R.C. 2721.03 was discussed in Bright Local School Dist. Bd. of Edn. v. Hillsboro School Dist. Bd. of Edn. (1997), 122 Ohio App.3d 546, 702 N.E.2d 449, wherein the court ultimately concluded that "a board of education is a `person' for purposes of R.C. Chapter 2721 and is authorized to bring a declaratory judgment action." Id. at 552, 702 N.E.2d at 453. That court reviewed the quasi-municipal corporate nature of boards of education, see Brown v. Monroeville Bd. of Edn. (1969), 20 Ohio St.2d 68, 49 O.O.2d 347, 253 N.E.2d 767, and R.C. 3313.17, which provides in part that boards of education are "bodies politic and corporate, and, as such, capable of suing and being sued." Bright Local School Dist., 122 Ohio App.3d at 551-552, 702 N.E.2d at 453.

Having determined that, in general, the School Board is empowered to bring a declaratory judgment action, we consider whether the School Board has standing to challenge the tax exemptions granted within the CRA. Standing depends upon whether the challenging party has a "`"personal stake in the outcome of the controversy."'" Middletown v. Ferguson (1987), 25 Ohio St.3d 71, 75, 25 OBR 125, 129, 495 N.E.2d 380, 384, certiorari denied in Sticklen v. Middletown (1987), 479 U.S. 1034, 107 S.Ct. 883, 93 L.Ed.2d 837, quoting Sierra Club v. Morton (1972), 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636. This ensures that "`the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.'" Id. at 732, 92 S.Ct. at 1364, 31 L.Ed.2d at 641.

A party has standing where the party demonstrates an injury in fact. An injury in fact requires a showing that the party has suffered or will suffer a specific injury, that the injury is traceable to the challenged action, and that it is likely that the injury will be redressed by a favorable decision. Eng. Technicians Assn. v. Ohio Dept. of Transp. (1991), 72 Ohio App.3d 106, 110-111, 593 N.E.2d 472, 474-475, jurisdictional motion overruled (1991), 61 Ohio St.3d 1412, 574 N.E.2d 1076. In the context of the instant case, the School Board has standing to challenge the granted tax exemptions only if boards of education are given a right to participate in the application approval process by former R.C. 5709.83.

Appellees contend that the School Board may not attack the failure to provide notice of the applications because former R.C. 5907.83 does not give boards of education a right to participate in the application process. In essence, appellees assert that the statute is merely directory, and a violation of the statute does not give rise to a cause of action. The School Board contends otherwise, arguing that R.C. 5709.83 is a mandatory st...