Foreclosure of Liens for Delinquent Land Taxes v. Parcels of Land Encumbered With Delinquent Tax Liens

154 N.E.3d 494

2020 Ohio 2814

In the Matter of FORECLOSURE OF LIENS FOR DELINQUENT LAND TAXES By Action in Rem, Treasurer of Guernsey County, Ohio Appellant-Cross-Appellee

v.PARCELS OF LAND ENCUMBERED WITH DELINQUENT TAX LIENS (re: Jack Bonnell, et al) Appellee-Cross Appellant

Nos. 19CA00045

19CA00046

19CA00051

19CA00052

Court of Appeals of Ohio, Fifth District, Guernsey County.

DATE OF JUDGMENT ENTRY: May 5, 2020

OPINION

Gwin, J.,

{¶1} Appellant/cross-appellee James A. Caldwell, Treasurer of Guernsey County, Ohio, and appellee/cross-appellant Jack Bonnell appeal the November 14, 2019 judgment entry of the Guernsey County Court of Common Pleas.

Facts & Procedural History

{¶2} On September 22, 2017, appellant/cross-appellee James A. Caldwell, Treasurer of Guernsey County, Ohio ("Treasurer") filed two separate foreclosure complaints against appellee/cross-appellant Jack Bonnell ("Bonnell") with regards to two separate parcels of land, one located at 1159 Steubenville Avenue in Cambridge, Ohio, and the other located at 601 Foster Avenue in Cambridge, Ohio. The Treasurer avers in his complaint that delinquent land certificates were filed by the Auditor of Guernsey County on each parcel and the State of Ohio has the first and best lien on each property for delinquent and current real estate taxes and assessments. Bonnell filed an answer in each case on October 19, 2017.

{¶3} After obtaining leave of court, the Treasurer filed an amended complaint in each case on April 27, 2018. Bonnell filed answers to the amended complaints on June 13, 2018. Bonnell also filed a third-party complaint in each case against the City of Cambridge ("Cambridge"). Bonnell's third-party complaints aver a portion of the real estate taxes alleged to be due to the Treasurer are a result of liens placed upon the property by Cambridge and Cambridge failed to provide proper notice to Bonnell; thus, Cambridge had no authority to place the liens on the properties. Bonnell sought a declaratory judgment deleting the liens of Cambridge from the tax duplicate.

{¶4} The Treasurer filed a motion for summary judgment in each case on June 18, 2018. The Treasurer attached to the motions his own affidavit. Caldwell avers as follows: he is the Treasurer of Guernsey County; he has been in direct supervision of all payments received in respect to the taxes due on parcels 06-0005177.000 and 06-0006409.000; the records show the taxes are delinquent for parcel number 06-0005177.000 in the amount of $12,544.94 and parcel number 06-0006409.000 in the amount of $5,144.53, and have been delinquent for more than one year; the parcels have been listed on the delinquent tax parcel list; and demand for payment of said taxes has been made.

{¶5} Bonnell filed memoranda in opposition to the motions for summary judgment on July 3, 2018. Attached to each of the memorandums in opposition is the affidavit of Bonnell. Bonnell avers as follows: he disputes the amount of taxes that are claimed to be due and owing; a significant portion of the taxes alleged to be owed are the result of liens placed upon his properties by Cambridge; the documents from Cambridge do not indicate he was given notice regarding the liens placed on his properties for mowing; he attempted to pay his taxes but was advised the taxes would first be applied to the liens he believes were unlawfully placed upon his property without notice; he believes there is a genuine issue of material fact regarding the amount of taxes due and owing; and attorney fees should not be awarded because there is no statutory basis for such an award.

{¶6} The trial court denied the Treasurer's motion for summary judgment on November 28, 2018. On December 21, 2018, the Treasurer filed a motion to compel, asking the trial court to compel Bonnell to provide his tax returns. The Treasurer argued since the properties in question are rental properties, Bonnell's tax returns would show whether Bonnell used the taxes at issue as deductions. Bonnell filed a memorandum contra to the Treasurer's motion, arguing his tax returns are not relevant to these cases.

{¶7} Cambridge filed an answer to Bonnell's complaint on February 11, 2019. On February 28, 2019, the Treasurer and Cambridge filed joint motions for summary judgment, seeking a judgment against Bonnell as defendant and third-party plaintiff. Attached to the motion for summary judgment in each case is the affidavit of Caldwell that was filed previously with the Treasurer's first motion for summary judgment. Bonnell filed a memorandum contra to each of the motions for summary judgment on March 12, 2019. Attached is the affidavit of Bonnell that was previously filed with his first memorandum in opposition.

{¶8} The trial court issued a judgment entry on April 16, 2019 granting the Treasurer's motion for summary judgment, but denying Cambridge's motion for summary judgment.

{¶9} Bonnell filed a motion to redeem land on May 20, 2019, pursuant to R.C. 5721.25. The trial court granted Bonnell's motion to redeem on June 3, 2019 and ordered the Treasurer to notify the court the amount upon which Bonnell may redeem the property.

{¶10} On June 7, 2019, the Treasurer filed a notice of redemption amounts. The redemption amount for the Steubenville Avenue property totaled $14,611.08, including: $7,233.52 in real estate tax, $4,894.56 in penalty and interest, an $832 assessment, $428.28 in penalty and interest, $900 in expenses, and $322.72 in courts costs. The redemption amount for the Foster Avenue property totaled $6,864.93, including: $2,732.84 in real estate tax, $1,862.51 in penalty and interest, a $560.14 assessment, an additional $425.73 in penalty and interest, $900 in expenses, and $383.71 in court costs. The Treasurer filed a memorandum in support of the redemption amounts in each case.

{¶11} The trial court issued a judgment entry on June 28, 2019, stating the issue of the assessment and penalties of Cambridge would be determined at a trial in July of 2019. The trial court further stated that Bonnell objected to the imposition of separate court costs in each case and objected to the assessments for title search and related fees in the amount of $900 for each parcel. The trial court noted the Guernsey County Clerk of Courts requested foreclosure actions involving multiple tracts of real estate be separated by case number to make it easier for a title examiner and other court officials to determine which tract is being sold and which costs, expenses, and liens are associated with each parcel. The trial court ordered the redemption amount in each case to include court costs. The trial court's rationale for imposing court costs was the significant delay of Bonnell's payment of real estate taxes. The trial court additionally ordered the redemption amount in each case to include $900 of fees and expenses, and adopted by reference the rationale contained in the Treasurer's memorandum in support of the redemption amounts.

{¶12} After a status conference with the parties, the trial court issued an entry on July 30, 2019, stating Cambridge would be withdrawing their assessments, interest, and penalties and thus Bonnell's claim against Cambridge would be dismissed. Cambridge notified the trial court via letter that it sought to withdraw and dismiss their assessment, interest, and penalty on both the Steubenville and Foster Avenue properties.

{¶13} The trial court held an evidentiary hearing on Bonnell's motion to redeem on November 1, 2019.

{¶14} The trial court issued a judgment entry on November 6, 2019, stating it took testimony and exhibits on November 1, 2019 on Bonnell's motion to redeem. The trial court ordered the Treasurer to submit a breakdown separating the penalties and interest owed each year in the two cases. The Treasurer filed the breakdown on November 12, 2019. On the Steubenville Avenue property, the Treasurer listed the penalty amount and interest amount each year from 1997 to 2018, for a total of $1,108.88 in penalties and $4,110.72 in interest. On the Foster Avenue property, the Treasurer listed the penalty amount and interest amount each year from 2000 to 2018, for a total of $442.38 in penalties and $1,569.33 in interest.

{¶15} On November 14, 2019, the trial court issued a final judgment entry on Bonnell's motion to redeem. The trial court issued the following findings of fact: Bonnell is the owner of the real estate at 1159 Steubenville Avenue and 601 Foster Avenue, both in Cambridge, Ohio; Bonnell was previously sued by the Guernsey County Treasurer for the delinquent real estate taxes and assessments on some of the same property that is the subject matter of these actions and the case was resolved in August of 2001; the testimony of Bonnie Jones, Deputy Auditor for Guernsey County, was that Cambridge placed assessments on the Steubenville property in 2001, 2002, 2014, and 2016; Jones testified Cambridge placed assessments on the Foster Avenue property in 2002, 2004, 2010, and 2015; all payments to the County Treasurer must first be applied to outstanding assessments before being applied to the taxes at issue; Cambridge was made a party to this action via a third-party complaint filed by Bonnell; pursuant to an agreement reached on the evening of trial, Cambridge released all of the lien assessments, including any interest and penalty that may have accrued on the real estate; Cambridge did not produce any notice to Bonnell with regard to mowing assessments; Bonnell testified he is ready, willing, and able to pay the real estate taxes owed on the properties, but did not believe he should be required to pay any assessments, interest, or penalties in the matter; Bonnell was placed in a legal quandary by the assessments being placed on the property for which he contests; for Bonnell to wait approximately 15 years before raising these issues is not acceptable; the issue before the court is a motion to redeem pursuant to R.C. 5721.25, and the court may determine an appropriate amount to redeem...