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Non-Attorney Corporate Officer’s Filing of Tax Valuation Appeal is Not Unauthorized Practice of Law
2005-1464. Dayton Supply & Tool Co., Inc. v. Montgomery Cty. Bd. of Revision, 2006-Ohio-5852.
Board of Tax Appeals, No. 2003-G-1851. Decision reversed and cause remanded.
Pfeifer, Lundberg Stratton, O'Connor and Lanzinger, JJ., concur.
Moyer, C.J., Resnick and O'Donnell, JJ., dissent.
Opinion: http://www.supremecourtofohio.gov/rod/newpdf/0/2006/2006-Ohio-5852.pdf
(Nov. 29, 2006) The Supreme Court of Ohio today ruled that a corporate officer may prepare and file a complaint with a board of revision without engaging in the unauthorized practices of law, as long as the officer does not make legal arguments, examine witnesses or undertake any other tasks that can be performed only by an attorney.
The 4-3 decision, authored by Justice Evelyn Lundberg Stratton, overturned a finding by the Ohio Board of Tax Appeals and remanded the case for further proceedings. The BTA had dismissed a corporate taxpayer's petition for revaluation of a parking lot it owned in Dayton on the grounds that the original complaint was invalid because it had been improperly filed by a non-lawyer engaging in the unauthorized practice of law. The Court's decision today orders the Board of Tax Appeals to hear the underlying appeal of the property valuation.
In February 2003 a non-lawyer officer of the Dayton Supply & Tool Company (DST) signed and filed with the Montgomery County Board of Revision a complaint disputing the county auditor's 2002 revaluation of a parking lot owned by the company from a prior appraised value of $104,000 to $786,000. The revaluation was based on the lot's immediate proximity to a new downtown baseball stadium. As a major beneficiary of local property taxes, the Dayton School District Board of Education (BOE) filed a counter complaint urging the board of revision to reject DST's claims and affirm the county auditor's increased valuation. The board of revision dismissed DST's complaint and ruled in favor of the school board's complaint, retaining the county auditor's revised valuation.
DST appealed the board of revision's ruling to the State Board of Tax Appeals (BTA). Following a hearing and a review of written pleadings submitted by the parties, the BTA ruled that the board of revision had no jurisdiction to accept or consider DST's complaint based on its finding that, under a 1997 Supreme Court decision, Sharon Village Ltd. v. Licking County Board of Revision, the DST complaint was not validly submitted because it was filed by a non-attorney. The BTA went on to rule that, because DST's complaint was void for lack of proper jurisdiction, the board of revision should also have simply dismissed the BOE's counter complaint rather than ruling on it.
DST exercised its right to appeal the BTA's ruling to the Supreme Court.
In Sharon Village Ltd. the Court ruled that: (1) the preparation and filing with a county board of revision of a complaint seeking a change in the tax valuation of real property owned by another person constituted the practice of law, and (2) therefore such complaints were only validly submitted for consideration by a board of revision if they were signed and filed by the property owner personally or by a licensed attorney.
In the aftermath of the Sharon Village decision, the General Assembly enacted legislation (H.B. 694, effective March 1999) that expressly authorized certain non-attorneys to file tax valuation complaints on behalf of others. One provision of H.B. 694 specifically authorized the filing of a complaint regarding the tax valuation of property owned by a business firm or corporation by any “officer, salaried employee, partner or member” of the owning corporation or firm.
In 2002, the Supreme Court considered a challenge to portions of H.B. 694 in Rubbermaid, Inc. v. Wayne County Auditor. Because the Supreme Court based its ruling on the statute violating a constitutional prohibition against retroactive legislation, the Court declined to address the separation of powers issue.
In today's decision, the Court again declined to rule on the separation of powers issue. Justice Stratton wrote: “Because we are solely responsible for regulating the practice of law, we are not compelled to accept this legislative amendment. Yet we are mindful that all legislation is presumed constitutional and will not be struck down absent proof of its invalidity beyond a reasonable doubt.”
“…[P]ublic-interest factors persuade us to hold that a corporate officer does not engage in the unauthorized practice of law by preparing and filing a complaint and presenting the claimed value of the property at a hearing before the board of revision on behalf of his or her corporation, so long as the officer does not make legal arguments, examine witnesses, or undertake other tasks that can be performed only by an attorney,” Stratton wrote for the majority. Corporate officers have a fiduciary duty to the corporation which provides for accountability. In addition, public interest favored the convenience and cost-savings factors, the Court ruled.
The Court distinguished the facts in this case from those in the Sharon Village decision, including the fact that Sharon Village did not involve a corporate officer representing his company and that the actual services performed in the Sharon Village case were more extensive and legal in nature. In addition, the Court today examined another case, Worthington City Schools v Franklin Co. Board of Revision, that was decided after Sharon Village and based on similar reasoning that virtually any representation before a board of revision constitutes unauthorized law practice.
Justice Stratton wrote that today's decision “limit[s] our holding in Worthington City School Dist. to the extent that it is no longer necessary for a corporation to hire an attorney to file a complaint with the BOR unless legal issues exist or arise in the case.”
The majority pointed to a number of other instances in the workers' compensation area that the Court has created limited exceptions to the prohibitions on the unauthorized practice of law in the interest of facilitating administrative proceedings. Justice Stratton also noted that, in Cleveland Bar Assn. v. Pearlman, the Court has recently approved of a corporate officer filing in small claims court under similar restrictions.
Justice Stratton's opinion was joined by Justices Paul E. Pfeifer, Maureen O'Connor and Judith Ann Lanzinger.
Justice Alice Robie Resnick entered a dissent in which she argued that the Court should not modify or deviate from the holdings in Sharon Village and Worthington City School Dist. Her dissent was joined by Chief Justice Thomas J. Moyer and Justice Terrence O'Donnell.
“The relevant precedents are well reasoned and require this court to hold that the actions undertaken in this case amount to the unauthorized practice of law,” Justice Resnick wrote. “Because the majority carves out an unwarranted exception to the general rule forbidding the unauthorized practice of law, I dissent.”
Justice Resnick went on to criticize the majority's failure to decide the issue of the statute's constitutionality.
“I believe that the majority's method of analysis allows it to sidestep an important separation-of-powers issue raised by this case,” Justice Resnick wrote.
Contacts
Merle F. Wilberding, 937.223.8177, for
Dayton Supply & Tool Company.
David C. DiMuzio, 513.621.2888, for Dayton School District Board of Education.
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