Stewart v. Woods Cove II, L.L.C.
99 N.E.3d 956
| Ohio Ct. App. | 2017Background
- Plaintiffs (Stewart, Brazil, Patton) filed a second amended class complaint challenging Cuyahoga County Treasurer's sale of tax lien certificates to private investor Woods Cove under R.C. Chapter 5721.
- Plaintiffs allege sales occurred under exclusive purchase agreements (2012–2014) and attached the agreements and certificates to the complaint.
- Allegations include racial disparate impact in parcel selection, unconstitutional takings and unlawful delegation, delegation of notice to private purchasers, excessive interest/fees in repayment agreements, and violations of federal and state consumer/credit statutes.
- Defendants moved to dismiss chiefly on ripeness/justiciability grounds and raised multiple alternative defenses (failure to join/state AG, lack of private causes of action under state constitution, insufficient statutory/standing allegations). The trial court granted dismissal as premature because no foreclosures had yet been filed.
- The appellate majority reversed, holding the complaint pleaded justiciable controversies and that the trial court improperly considered facts outside the pleadings; the case was remanded. A judge dissented, arguing multiple independent deficiencies supported dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness / Justiciability | Sale of tax certificates is a final act making claims ripe; injunction/declaratory relief appropriate now | Claims are speculative until forfeiture/foreclosure occurs; dismissal appropriate | Reversed trial court: allegations could state a justiciable controversy; dismissal as premature was error and court improperly considered extraneous facts |
| Takings claim | Sale of certificates effects a taking warranting immediate relief | No final government decision; owners can avoid forfeiture; must exhaust state compensation procedures | Dissent: takings claim unripe per Williamson; majority did not decide merits but found ripeness dismissal premature |
| Impermissible delegation | Statute vests plenary discretion in Treasurer and purchasers, amounting to unlawful delegation | Statute sets limits and execution authority is permissible; plaintiffs pleaded only legal conclusions | Dissent: delegation claim inadequately pleaded; statute confines Treasurer's authority; trial court correctly dismissed on that basis (majority remanded) |
| Statutory/standing claims (OCSPA, OCRA, TILA, §1983, mandamus, competitive bidding) | Various statutory and constitutional causes of action and class claims; damages alleged | Defendants: lack of standing, statutory exemptions, not state actors for §1983, TILA/OCSPA inapplicable to tax-payment plans, mandamus disguised request for injunctive relief | Dissent: these claims fail on pleading/standing/substantive grounds; majority did not evaluate merits and remanded for further proceedings |
Key Cases Cited
- Arnott v. Arnott, 132 Ohio St.3d 401, 972 N.E.2d 586 (Ohio 2012) (standard for reviewing dismissal of declaratory judgment as non-justiciable)
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 814 N.E.2d 44 (Ohio 2004) (de novo review of Civ.R. 12(B)(6))
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (Ohio 1975) (12(B)(6) standard; plaintiff must show set of facts entitling relief)
- State ex rel. Barclays Bank PLC v. Hamilton Cty. Court of Common Pleas, 74 Ohio St.3d 535, 660 N.E.2d 458 (Ohio 1996) (definition of justiciable matter/actual controversy)
- Tuleta v. Med. Mut. of Ohio, 6 N.E.3d 106 (Ohio Ct. App. 2014) (pleading must allege operative facts, not bare legal conclusions)
- Williamson Cty. Regional Planning Comm. v. Hamilton Bank, 473 U.S. 172 (U.S. 1985) (takings claims are unripe until government makes a final decision and state compensation procedures are exhausted)