[Cite as State ex rel. Mansfield Motorsports Speedway, L.L.C., v. Dropsey, 2012-Ohio-968.]


                                        COURT OF APPEALS
                                     RICHLAND COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT



STATE OF OHIO, EX REL.                                      JUDGES:
MANSFIELD MOTORSPORTS                                       Hon. Patricia A. Delaney, P.J.
SPEEDWAY, LLC, ET AL.                                       Hon. Sheila G. Farmer, J.
                                                            Hon. Julie A. Edwards, J.
        Relators-Appellants

vs.

PATRICK W. DROPSEY,                                         Case No. 11CA65
RICHLAND COUNTY AUDITOR, ET AL.

        Respondents-Appellees                               OPINION



CHARACTER OF PROCEEDING:                                    Appeal from the Court of Common
                                                            Pleas, Case No. 11CV230D


JUDGMENT:                                                   Affirmed in Part



DATE OF JUDGMENT:                                           March 7, 2012



APPEARANCES:

For Relators-Appellants                                     For Respondents-Appellees

ROBERT A. FRANCO                                            STEVEN M. WILDERMUTH
1007 Lexington Avenue                                       38 South Park Street
Mansfield, OH 44907                                         Mansfield, OH 44902

                                                            RYAN P. O'ROURKE
                                                            DANIEL W. FAUSEY
                                                            30 East Broad Street, 25th Floor
                                                            Columbus, OH 43215
Richland County, Case No. 11CA65                                                         2

Farmer, J.

       {¶1}   From 2001 through 2004, appellant, Mansfield Motorsports Speedway,

LLC, made improvements to its real property, including improvements to an oval race

track and the building of grandstands, press boxes, concession stands, restrooms, etc.

       {¶2}   Upon completion of the project, appellee, the Richland County Auditor,

Patrick Dropsey, taxed the improvements as real property.        In September of 2009,

appellee, the Tax Commissioner of Ohio, Joseph Testa, assessed use tax on these

same improvements.

       {¶3}   In July of 2010, appellee Tax Commissioner filed a use tax lien against

appellant in the amount of $676,674.31.

       {¶4}   On September 28, 2010, the Richland County Treasurer filed a

foreclosure complaint against appellant (Case No. 10-CV-1287D) for non-payment of

real property taxes.

       {¶5}   On February 17, 2011, appellant filed a complaint for declaratory judgment

and mandamus given the conflicting tax assessments.          Appellees filed motions to

dismiss, claiming the trial court lacked jurisdiction as the assessment of real property

taxes and use taxes should have been appealed to the Board of Revision and the Board

of Tax Appeals, respectively. By judgment entry filed June 13, 2011, the trial court

dismissed the action, finding it lacked jurisdiction to hear the case, appellant failed to

state a claim upon which relief can be granted, appellant had or has adequate legal

remedies, and laches barred appellant's claims.

       {¶6}   Appellant filed an appeal and this matter is now before this court for

consideration. Assignments of error are as follows:
Richland County, Case No. 11CA65                                3


                                    I

      {¶7}   "THE TRIAL COURT ERRED IN CONCLUDING THAT IT LACKED

SUBJECT MATTER JURISDICTION."

                                   II

      {¶8}   "THE TRIAL COURT ERRED IN CONCLUDING THAT PLAINTIFF-

RELATOR-APPELLANTS FAILED TO STATE A CLAIM UPON WHICH RELIEF CAN

BE GRANTED."

                                   III

      {¶9}   "THE TRIAL COURT ERRED IN CONCLUDING THAT PLAINTIFF-

RELATOR-APPELLANTS' FAILURE TO EXHAUST STATUTORILY PRESCRIBED

ADMINISTRATIVE REMEDIES WAS A PREREQUISITE TO THE TRIAL COURT'S

JURISDICTION."

                                   IV

      {¶10} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER

PLAINTIFF-RELATOR-APPELLANTS HAD A PLAIN AND ADEQUATE REMEDY IN

THE ORDINARY COURSE OF THE LAW."

                                   V

      {¶11} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER

THE STATUTORILY PRESCRIBED ADMINISTRATIVE REMEDIES WERE EQUALLY

SERVICEABLE."
Richland County, Case No. 11CA65                                                      4


                                           VI

       {¶12} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER IT

HAD JURISDICTION UNDER O.R.C. § 2723.01 TO ENJOIN THE COLLECTION OF

THE ILLEGAL LEVY OR COLLECTION OF TAXES."

                                          VII

       {¶13} "THE TRIAL COURT ERRED BY FAILING TO CONSIDER WHETHER IT

HAD JURISDICTION TO DECIDE WHETHER THE ASSESSMENT OF TWO

DIFFERENT, MUTUALLY EXCLUSIVE TAXES WAS CONSTITUTIONAL."

                                          VIII

       {¶14} "THE TRIAL COURT ERRED BY CONCLUDING THAT THE BOARD OF

REVISION HAD THE AUTHORITY TO DETERMINE WHAT CONSTITUTES REAL

AND PERSONAL PROPERTY UNDER O.R.C. § 5715.19."

                                           IX

       {¶15} "THE TRIAL COURT ERRED BY CONCLUDING THAT LATCHES WAS A

BAR TO CLAIMS OF PLAINTIFF-RELATOR-APPELLANTS."

       {¶16} In order to address the assignments of error, it is necessary to review the

complaint filed in this case.    Appellant requested declaratory judgment, seeking a

declaration that the improvements in question constituted personal property subject to a

use tax. In the alternative, appellant sought a finding that the improvements were real

property not subject to a use tax.

       {¶17} Appellant also requested a writ of mandamus to order appellee Auditor to

reclassify the improvements as personal property and remove them from county real
Richland County, Case No. 11CA65                                                          5


estate tax rolls or in the alternative, order appellee Auditor to determine if the

improvements were real or personal property.

       {¶18} A constitutional challenge was not raised in the complaint. It was not

raised until appellant's reply brief to appellees' motion to dismiss and only as a

response to the failure to exhaust administrative remedies argument.

       {¶19} The relative facts are set forth by the trial court in its judgment entry filed

June 13, 2011 as follows:

       {¶20} "This case is a declaratory judgment action by a motorsports speedway

operator challenging the tax classification of the improvements made between 2001 and

2004, including installation and repair of a grandstand with private viewing boxes, a

ticket box office, concessions stand, restrooms, a flag stand, specialty safety fencing,

and repairs to the track surface. The plaintiff speedway operator asserts that the county

auditor had classified and taxed most of these property improvements as real property

as defined in Ohio Revised Code (R.C.) § 5701.02(A). The plaintiff speedway operator

further contends that the state tax commissioner has ruled that the same property is

business fixtures as defined in R.C. 5701.03(B). Business fixtures are tangible personal

property whose purchase is subject to use taxes - reportedly in excess of $485,000 with

penalties in this case.

       {¶21} "In other words, plaintiff contends that the same property has been

classified and taxed as both real property and personal property."

       {¶22} It is conceded that appellant did not challenge the 2004 determination of

appellee Auditor via R.C. 5715.19 nor did appellant pursue or challenge the 2009
Richland County, Case No. 11CA65                                                         6


determination of appellee Tax Commissioner that the improvements constituted

personal property.

       {¶23} With these uncontested facts, we will address the assignments of error.

                                          I, II, III

       {¶24} Appellant claims the trial court erred in granting appellees' motion to

dismiss the declaratory judgment action for lack of subject matter jurisdiction, failure to

state a claim upon which relief can be granted, and failure to exhaust administrative

remedies as a prerequisite to jurisdiction.

       {¶25} As stated supra, none of the statutory administrative procedures to

challenge the tax assessments were exhausted. In Dworning v. Euclid, 119 Ohio St.3d

83, 2008-Ohio-3318, ¶9, the Supreme Court of Ohio explained the following:

       {¶26} "It is a well-established principle of Ohio law that a party seeking relief

from an administrative decision must pursue available administrative remedies before

pursuing action in a court. Noernberg v. Brook Park (1980), 63 Ohio St.2d 26, 29, 17

O.O.3d 16, 406 N.E.2d 1095, citing State ex rel. Lieux v. Westlake (1951), 154 Ohio St.

412, 43 O.O. 343, 96 N.E.2d 414. We have stated, ' "Exhaustion is generally required

as a matter of preventing premature interference with agency processes, so that the

agency may function efficiently and so that it may have an opportunity to correct its own

errors, to afford the parties and the courts the benefit of its experience and expertise,

and to compile a record which is adequate for judicial review." Weinberger v. Salfi

(1975), 422 U.S. 749, 765, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522. The purpose of the

doctrine "***is to permit an administrative agency to apply its special expertise***in

developing a factual record without premature judicial intervention."      Southern Ohio
Richland County, Case No. 11CA65                                                            7

Coal Co. v. Donovan (C.A.6, 1985), 774 F.2d 693, 702. The judicial deference afforded

administrative agencies is to "***'prepare the way, if the litigation should take its ultimate

course, for a more informed and precise determination by the Court***.' "            Ricci v.

Chicago Mercantile Exchange (1973), 409 U.S. 289, 306, 93 S.Ct. 573, 582, 34 L.Ed.2d

525.' Nemazee v. Mt. Sinai Med. Ctr. (1990), 56 Ohio St.3d 109, 111-112, 564 N.E.2d

477."

        {¶27} In State ex rel. Albright v. Court of Common Pleas of Delaware County

(1991), 60 Ohio St.3d 40, 42, the Supreme Court of Ohio determined a declaratory

judgment action is not appropriate "where special statutory procedures would be

bypassed."

        {¶28} R.C. 5717.02 governs complaints involving tax assessments by the tax

commissioner and states the following in pertinent part:

        {¶29} "Except as otherwise provided by law, appeals from final determinations

by the tax commissioner of any preliminary, amended, or final tax assessments,

reassessments, valuations, determinations, findings, computations, or orders made by

the commissioner may be taken to the board of tax appeals by the taxpayer, by the

person to whom notice of the tax assessment, reassessment, valuation, determination,

finding, computation, or order by the commissioner is required by law to be given***.

        {¶30} "Such appeals shall be taken by the filing of a notice of appeal with the

board, and with the tax commissioner if the tax commissioner's action is the subject of

the appeal,***. The notice of appeal shall be filed within sixty days after service of the

notice of the tax assessment, reassessment, valuation, determination, finding,

computation, or order by the commissioner or redetermination by the director has been
Richland County, Case No. 11CA65                                                               8


given as provided in section 5703.37, 5709.64, 5709.66, or 5733.42 of the Revised

Code."

       {¶31} R.C. 5715.19 governs complaints involving tax assessments by the county

auditor. Subsection (A)(1) states the following in pertinent part:

       {¶32} "(1) Subject to division (A)(2) of this section, a complaint against any of the

following determinations for the current tax year shall be filed with the county auditor on

or before the thirty-first day of March of the ensuing tax year or the date of closing of the

collection for the first half of real and public utility property taxes for the current tax year,

whichever is later[.]***

       {¶33} "***The county auditor shall present to the county board of revision all

complaints filed with the auditor."

       {¶34} Appellant argues it is not within the purview of the county auditor/board of

revision to determine whether the improvements to be taxed are real or personal

property. However, in Polaris Amphitheater Concerts, Inc. vs. Delaware County Board

of Revision, 118 Ohio St.3d 330, 2008-Ohio-2454, ¶17, the Supreme Court of Ohio

found the determination was in fact within their power:

       {¶35} "Although the BTA's finding of total value was supported by the BOE's

appraisal, its allocation of value to land was not. The allocation of value between land

and improvements does not constitute an arbitrary exercise; it relates to the basic

method by which county auditors determine value.                   The Tax Commissioner's

administrative rules direct the county auditors to arrive at total value by separately

valuing the land and improvements.           See Ohio Adm.Code 5703–25–07(B).               The
Richland County, Case No. 11CA65                                                          9


commissioner also prescribes two different rules for land valuation and the valuation of

improvements. Ohio Adm.Code 5703–25–07(C), 5703–25–11, and 5703–25–12."

       {¶36} We therefore conclude a declaratory judgment action was not the

appropriate vehicle to challenge the determinations of appellee Auditor and appellee

Tax Commissioner on the taxation of the improvements.

       {¶37} Upon review, we conclude the trial court was correct in granting the

dismissal of the declaratory judgment action.

       {¶38} Assignments of Error I, II, and III are denied.

                                            IV, V

       {¶39} Appellant claims the trial court erred in granting appellees' motion to

dismiss the mandamus action.

       {¶40} In order to be entitled to the issuance of a writ of mandamus, appellant

must demonstrate 1) that appellant has a clear legal right to the relief prayed for; 2) that

respondents are under a clear legal duty to perform the acts; and 3) that appellant has

no plain and adequate remedy in the ordinary course of the law. State ex rel. Harris v.

Rhodes (1978), 54 Ohio St.2d 41, 42, citing State ex rel. National City Bank v. Board of

Education (1977), 52 Ohio St.2d 81. The function of a writ of mandamus is to compel

the performance of a present existing legal duty which is in default. State ex rel. Willis

v. Sheboy (1983), 6 Ohio St.3d 167. Mandamus contemplates the performance of an

act which is incumbent upon the respondent by clear legal order or statutory or

constitutional obligation to perform. Id.
Richland County, Case No. 11CA65                                                       10


      {¶41} Appellant requested a writ of mandamus to force appellee Auditor to

determine that the improvements were personal or in the alternative, to make a

determination on whether the improvements were real or personal.

      {¶42} As a result of appellant's failure to challenge the determination of the

improvements as real property, the property has been assessed since 2004 as real

property. Also, as a result of appellant's failure to challenge the 2009 determination of

the improvements as personal property, the improvements have been double taxed

since 2009 as both real and personal. Appellant is clearly the "architect of its own

demise."

      {¶43} Appellees readily admit the imposition of both taxes is not correct, but

argue because appellant failed to challenge either decision, it has given up its adequate

remedy at law. Appellant naturally decries that this is not a just imposition of taxes and

someone has to rectify the problem.

      {¶44} First, with each new tax bill from the county auditor, appellant can

challenge and bring the issue to the auditor's attention via the board of revision and

request a determination on the improvements' real nature. Therefore, going forward

since 2009, twice each year appellant has an adequate remedy at law.

      {¶45} What remains unsolved is the imposition of both taxes from 2009 to date.

The unchallenged determinations from 2004 to 2009 are proper tax assessments

because of appellant's failure to challenge them. Further, a foreclosure action by the

County Treasurer is pending and summary judgment has been granted to the treasurer

for back taxes.     Therefore, there is a clear avenue to contest appellee Tax
Richland County, Case No. 11CA65                                                        11


Commissioner's levy of personal property tax as invalid given the trial court's

determination of the validity of appellee Auditor's tax assessment.

       {¶46} Upon review, we find there exist adequate remedies at law to resolve the

issue; therefore, we find the trial court was correct in determining a writ of mandamus

did not lie.

       {¶47} Assignments of Error IV and V are denied.

                                        VI, VII, VIII

       {¶48} These assignments raise issues not presented as claims in the complaint.

First, appellant argues R.C. 2723.01 empowers the trial court to enjoin the illegal levy or

collection of taxes and secondly, appellant argues the assessment of both a personal

property tax and a real property tax is unconstitutional.

       {¶49} Appellant cannot raise new issues on appeal that were not raised in its

complaint. Gentile v. Ristas, 160 Ohio App.3d 765, 2005–Ohio–2197, ¶74; Budd v.

Kinkela, Franklin App. No. 01AP-1478, 2002-Ohio-4311, ¶17; State v. Awan (1986), 22

Ohio St.3d 120.

       {¶50} We find the Polaris case cited supra to be controlling. The Polaris court

has determined the county auditor may make the determination relative to real and

personal property pursuant to the administrative review of R.C. 5715.19.

       {¶51} Assignments of Error VI, VII, and VIII are denied.

                                             IX

       {¶52} Appellant claims the trial court erred in determining the doctrine of laches

barred its claims.
Richland County, Case No. 11CA65                                                 12


       {¶53} Based upon our decisions in Assignments of Error IV and V, there still

remain remedies available where laches may not lie.

       {¶54} Assignment of Error IX is granted.

       {¶55} The judgment of the Court of Common Pleas of Richland County, Ohio is

hereby affirmed in part.

By Farmer, J.

Delaney, P.J. concur and

Edwards, J. dissents.




                                           s/ Sheila G. Farmer_______________



                                           s/ Patricia A. Delaney_____________



                                           _______________________________

                                                       JUDGES

SGF/sg 112
Richland County, Case No. 11CA65                                                         13


EDWARDS, J., DISSENTING OPINION

       {¶56} I disagree with the majority’s determination that there is an adequate

remedy of law for appellant as to the imposition of both taxes from 2009 to date. The

majority states “…a foreclosure action by the County Treasurer is pending and

summary judgment has been granted to the treasurer for back taxes. Therefore, there is

a clear avenue to contest appellee Tax Commissioner’s levy of personal property tax as

invalid given the trial court’s determination of the validity of appellee Auditor’s tax

assessment.”

       {¶57} This “remedy” appears to place the trial court in the same position it was in

when asked to issue a declaratory judgment and writ of mandamus. It must determine

which assessment is correct or valid. Once again, the trial court will say, both are valid

because appellant failed to exhaust his administrative appeals of these tax decisions.

       {¶58} Therefore, I would reverse and remand this case to the trial court on the

issues of declaratory judgment and writ of mandamus as to the time periods when

double taxation has occurred.    While I agree that the appellant has failed to challenge

the tax assessments in a timely manner and that generally he should just have to

accept the consequences, this situation is different.
Richland County, Case No. 11CA65                                                 14



It is different because of the fundamental injustice of being taxed twice by the

government when one entity of government has determined that certain property should

be taxed as real estate and another entity of government has determined the property

should be taxed as personal property.




                                  ___________________________________
                                          Judge Julie A. Edwards
[Cite as State ex rel. Mansfield Motorsports Speedway, L.L.C., v. Dropsey, 2012-Ohio-968.]


              IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO

                                    FIFTH APPELLATE DISTRICT



STATE OF OHIO, EX REL.                                :
MANSFIELD MOTORSPORTS                                 :
SPEEDWAY, LLC, ET AL.                                 :
                                                      :
        Relators-Appellants                           :
                                                      :
-vs-                                                  :             JUDGMENT ENTRY
                                                      :
PATRICK W. DROPSEY,                                   :
RICHLAND COUNTY AUDITOR, ET AL.                       :
                                                      :
        Respondents-Appellees                         :             CASE NO. 11CA65




        For the reasons stated in our accompanying Memorandum-Opinion, the

judgment of the Court of Common Pleas of Richland County, Ohio is affirmed in part.

Costs to appellant.




                                                          s/ Sheila G. Farmer_______________



                                                          s/ Patricia A. Delaney_____________



                                                          _______________________________

                                                                         JUDGES
