594 N.E.2d 42 | Ohio Ct. App. | 1991
Plaintiffs-appellants, Richard L. and Katherine Couchot, instituted this action in the Franklin County Court of Common Pleas against defendants-appellees, the State Lottery Commission; Ohio Department of Taxation; Mary Ellen Withrow, in her official capacity as the Treasurer of the state of Ohio; and the state of Ohio. Along with a claim for reimbursement of taxes collected and damages for breach of contract, appellants' complaint sought declaratory and injunctive relief concerning the constitutionality of certain provisions of R.C. Chapters 5747 and 3770, which subject out-of-state lottery winners to Ohio income tax withholding.
Appellee lottery commission responded to appellants' complaint with a motion to dismiss predicated on Civ.R. 12(B)(1), contending that the action was one for money damages and that jurisdiction was exclusively vested in the Court of Claims. The trial court sustained the lottery commission's motion to dismiss concluding that it had no subject matter jurisdiction.
Appellants appeal and raise the following assignments of error:
"Assignment of Error No. 1:
"The court of common pleas erred in finding that plaintiffs' amended complaint, which sought a declaratory judgment, a permanent injunction, and a recovery of taxes pursuant to Chapter 2723, Ohio Revised Code, asserted a claim for monetary damages which could only be commenced in the Court of Claims of Ohio, and in dismissing plaintiffs' action for lack of subject matter jurisdiction.
"Assignment of Error No. 2:
"Assuming, arguendo, that plaintiffs' amended complaint set forth a claim for monetary damages which could only be commenced in the Court of Claims, the court of common pleas erred in dismissing the entire action and in not retaining and exercising jurisdiction over those claims set forth in the amended complaint over which it had jurisdiction."
On March 2, 1988, appellants, residents of Kentucky, purchased a Super Lotto ticket. In the drawing held that evening, appellants' ticket was selected as the only winner of a $21,000,000 jackpot. At the time, Ohio law did not provide for assessment of income tax on lottery winnings of non-residents.
Shortly thereafter, appellants and the lottery commission exchanged documents establishing a payment schedule, whereby appellants would receive *373
payments of $1,050,000 per year, less $210,000 in federal taxes, for the next twenty years. Appellants received their 1988 and 1989 payments without incident. However, effective January 1, 1990, R.C.
Appellants paid the tax under protest and filed suit challenging the constitutionality of amended R.C.
Appellants' assignments of error are interrelated and will be discussed together. The issue presented is whether the court of common pleas had subject matter jurisdiction over any part of the alleged claims. Appellants argue that R.C.
"Courts of common pleas may enjoin the illegal levy or collection of taxes and assessments and entertain actions to recover them when collected, without regard to the amount thereof, but no recovery shall be had unless the action is brought within one year after the taxes or assessments are collected."
Appellees successfully argued to the trial court that, since appellants' complaint contained a breach of contract claim, it was actually a suit for monetary damages against an agency of the state and, hence, must be commenced in the Court of Claims pursuant to R.C.
"(A)(1) The state hereby waives its immunity from liability and consents to be sued, and have its liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicable to suits between private parties, except that the determination of liability is subject to the limitations set forth in this chapter and, in the case of state universities or colleges, in section
It is appellees' contention that we should affirm the trial court. They advance two arguments in support. First, appellees argue that this is strictly a breach of contract action that must be brought in the Court of Claims. *374
Secondly, appellees argue that R.C.
Appellants' complaint, in addition to alleging a breach of contract by the lottery commission, asserts that R.C.
In 1975, with the passage of the Court of Claims Act, Ohio waived sovereign immunity and consented to be sued in the newly established Court of Claims. However, to the extent that the state had already consented to suit, the Court of Claims Act does not apply. The state had consented to be sued for the illegal collection of taxes prior to the Court of Claims Act, since R.C.
R.C.
As the Supreme Court held in Racing Commission, supra, at syllabus:
"An action for injunctive relief may be brought against the state, as defined in R.C.
Therefore, the court of common pleas did have subject matter jurisdiction, at least to the degree that it may rule on the constitutionality of R.C.
Appellees also argue that R.C.
"No injunction shall issue suspending or staying any order, determination, or direction of the department of taxation, or any action of the treasurer of state or attorney general required by law to be taken in pursuance of any *375 such order, determination, or direction. This section does not affect any right or defense in any action to collect any tax or penalty."
It is important to note that the basis for appellants' action is a challenge of an enactment of the General Assembly and not a directive of a state agency. Since the tax has already been paid, the trial court's action would not operate directly as a stay.
Appellees cite a line of cases commencing with Torbet v.Kilgore (1966),
While the decision to issue a declaratory judgment is within the sound discretion of the trial court, a determination of jurisdiction is not discretionary. Subject matter jurisdiction either lies or it does not. There is no discretion involved in deciding whether the court has subject matter jurisdiction. It is premature for us to rule on the merits of claims made pursuant to R.C.
To the extent that the trial court had jurisdiction over appellants' claim for declaratory and injunctive relief and a refund of taxes paid, the trial court's judgment is reversed. In light of a ruling on the issues thereunder, the court should then consider what relief it has jurisdiction to render.
Appellants' assignments of error are sustained. The judgment of the trial court is reversed and the case is remanded for further proceedings consistent with this opinion.
Judgment reversedand cause remanded.
STRAUSBAUGH and WHITESIDE, JJ., concur. *376