2009 Ohio 1651 | Ohio Ct. App. | 2009
{¶ 2} Middletown Management owns and operates the Hampton Inn in Fairfield, *2 Ohio. Appellant stated that she is part of a class which includes "all other unnamed or yet unknown number of individuals and/or corporations which purchased lodging at the Hampton Inn, as a paying guest from 1999 through the date of filing th[e] complaint" who were supposedly overcharged nonexistent room taxes. Appellant's complaint alleged that she stayed at the Hampton Inn in August of 2002 where she was charged room taxes which exceeded the taxes allowable by law. In particular, appellant asserted that Middletown Management has been charging their customers excessive sales and excise taxes in the amount of 12 percent since 1999. According to appellant, the maximum amounts Middletown Management could have charged were 5.5 percent from 1999 to September 30, 2003, and 8.5 percent from October 1, 2003 to the present.1 Appellant's complaint further claimed that Middletown Management has been converting the difference between the tax amounts they charged their guests, and the tax amounts required by law.
{¶ 3} Middletown Management moved to dismiss pursuant to Civ. R. 12(B)(6) arguing appellant failed to state a claim upon which relief could be granted.2 Oral argument was heard on the matter, and the trial court granted the motion to dismiss. Appellant now appeals the trial court's decision by raising one assignment of error. *3
{¶ 4} "THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF-APPELLANT'S CLAIMS AGAINST DEFENDANT-APPELLEE FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO CIVIL RULE 12(B)(6) BECAUSE THE IMPROPER TAX COLLECTION CLAIMS WERE PROPERLY ASSERTED AGAINST THE DEFENDANT-APPELLEE; PLAINTIFF-APPELLANT ASSERTED A PROPER CLAIM UNDER THE OHIO CONSUMER SALES PRACTICES ACT; AND PLAINTIFF-APPELLANT'S FRAUD CLAIM WAS STATED WITH SUFFICIENT PARTICULARITY."
{¶ 5} "A motion to dismiss for failure to state a claim upon which relief can be granted * * * tests the sufficiency of the complaint."State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs. (1992),
{¶ 6} "In order for a complaint to be dismissed under Civ. R. 12(B)(6) * * *, it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to relief." Cincinnati v.Berretta U.S.A. Corp.,
{¶ 7} "An order granting a Civ. R. 12(B)(6) motion to dismiss is subject to de novo review." Perrysburg Twp. v. Rossford,
{¶ 8} Appellant argues that the trial court was incorrect in granting Middletown Management's Civ. R. 12(B)(6) motion. Within this single assignment of error appellant raises three sub-issues. The first of these issues is her argument that she properly asserted claims against Middletown Management rather than the purported taxing agencies.
{¶ 9} In its decision the motion to dismiss, the trial court found that Middletown Management was not the proper party in a suit to obtain a refund for the nonexistent taxes. Instead, the trial court found that the proper parties were taxing entities, in whose names the taxes were collected. In reaching this decision, the trial court primarily relied on two cases: Parker v. Giant Eagle, Inc., Mahoning App. No. 01 C.A. 174, 2002-Ohio-5212; and Bergmoser v. Smart Document Solutions,L.L.C. (N.D.Ohio Feb. 22, 2007), Case No. 1:05CV2882,
{¶ 10} Appellant argues that both Parker and Bergmoser dealt with consumers requesting refunds of overcharged and wrongfully assessed "state" taxes, whereas the "taxes" collected by the Hampton Inn were excise in nature rather than sales taxes, thus making any laws and cases regarding state tax refunds inapplicable. In addition, appellant claims she is not seeking a refund of illegally collected taxes, but is instead bringing claims of fraud and a violation of R.C. Chapter
{¶ 11} We are unaware of any cases that have dealt with this particular issue directly, but we are guided, as was the trial court, by past decisions involving refund claims for taxes improperly collected or assessed.
{¶ 12} In Decor Carpet Mills, Inc. v. Lindley (1980),
{¶ 13} The Second Appellate District, in Barker Furnace Co. v.Lindley (June 2, 1981), Montgomery App. No. 6813,
{¶ 14} In Parker v. Giant Eagle, Inc., 2002-Ohio-5212, a customer filed suit against a grocery store claiming it had overcharged her state sales tax on her groceries; however, her case was dismissed by the trial court for failure to state a claim on which relief could be *6 granted. Id. at ¶ 1, 6. On appeal, the Seventh Appellate District held that the plaintiff should have filed her suit against the state of Ohio, in the Ohio Court of Claims, as it would ultimately be the state's treasury that would be affected if her claim was successful. Id. at ¶ 29-30. The Parker court stated that the grocery store was under a duty to remit the taxes to the state, and even if the store had failed to remit them, the state still had a "right to receive th[e] funds." Id. at ¶ 29. The court pointed out that if the plaintiff was successful in her suit against the grocery store, it would in fact hinder or preclude the state's rights to the funds collected. Id. In essence, Parker suggests that a party must file against the taxing entity, rather than the vendor, as the refund should come from the state's treasury, whether or not the taxes were actually remitted to the state. Id. at ¶ 29-30.
{¶ 15} In City of Findlay v. Hotels.Com, L.P. (N.D.Ohio 2006),
{¶ 16} Finally in Bergmoser,
{¶ 17} While we agree with appellant to the extent that most of the prior case law deals with state tax refunds, and the tax at issue in this case would clearly be considered an excise tax, we believe the rationale espoused by these cases is sound. Therefore, when a consumer seeks a refund of taxes, even where they are nonexistent taxes, the consumer must apply to the taxing entity for a refund. SeeParker, 2002-Ohio-5212 at ¶ 29-30; Bergmoser,
{¶ 18} Even though Butler County and Fairfield were not collecting excise taxes for lodging at the time of appellant's stay, and presumably have never collected them from Middletown Management, at least until they each enacted taxing legislation, they are entitled to those funds since they were collected by the Hampton Inn as trustee for Butler County and Fairfield. See Decor,
{¶ 19} While appellant argues Middletown Management will "escape liability" if we affirm the trial court's dismissal, we can only point out that any excise taxes collected by the Hampton Inn were collected for the benefit of Butler County and Fairfield and belong wholly and solely to them. Therefore, Middletown Management cannot escape liability for the collection because both the county and the city can lay claim to the money that was collected in their names.
{¶ 20} After a careful review of the legislation for Butler County (Resolution Nos. 03-8-1314 and 03-9-1542) and Fairfield (Codified Ordinances Chapter 187), we have been unable to locate an analogous procedure to that contained within Ohio Adm. Code
{¶ 21} Based on these prior decisions, which dealt with what we believe to be *9 substantially similar issues, we find that Middletown Management is not a proper party, in this particular suit, to reclaim the money appellant paid to the Hampton Inn for nonexistent county and city excise taxes. Therefore, the trial court correctly dismissed appellant's claim against Middletown Management.
{¶ 22} The second sub-issue is that appellant's claims against Middletown Management are based on the OCSPA rather than any "tax" laws. Appellant argues that the purpose of the OCSPA is to protect consumers against unfair, deceptive and unconscionable acts. As such, the OCSPA applies to her claim because collecting additional charges from consumers in the form of nonexistent taxes is a deceptive and unconscionable act which was allegedly perpetrated by Middletown Management.
{¶ 23} "The [O]CSPA is a remedial statute designed to compensate for traditional consumer remedies." Burdge v. Kerasotes Showplace Theatres,L.L.C., Butler App. No. CA2006-02-023,
{¶ 24} Here again, we feel compelled to follow the logic suggested by the district court in Bergmoser when it dismissed the plaintiffs' OCSPA claim. In particular, the court stated, "if defendant wrongfully assessed and collected sales tax, plaintiffs' proper remedy is to file an application with the tax commissioner." Bergmoser,
{¶ 25} We also observe, as did the Findlay court, that appellant's complaint is also defective, as a purported class action, because she failed to plead the requirements of a *10
class action pursuant to R.C.
{¶ 26} Therefore, because appellant's claim falls outside the scope of the OCSPA, and because appellant failed to specifically plead a class action pursuant to the requirements of R.C.
{¶ 27} In her third sub-issue, appellant argues that her fraud claim was pled with sufficient particularity to survive dismissal. Appellant also argues that the trial court erred in requiring documentation of her stay as part of her fraud pleading thereby deviating from a Civ. R. 12(B)(6) standard of review.
{¶ 28} While Civ. R. 9(B) requires that the circumstances constituting fraud be pled with particularity, we need not determine whether appellant properly pled her claim for fraud as we have already established that appellant's proper remedy, for any collection of improper taxes, is filing an application for a refund from the taxing entity. See, e.g., Bergmoser,
{¶ 29} In conclusion, for the reasons stated above, the trial court properly dismissed appellant's claims against Middletown Management, because appellant's sole cause of action and remedy is to obtain a refund from the taxing entity. Appellant's assignment of error is hereby overruled.
{¶ 30} Judgment affirmed. *11
WALSH and RINGLAND, JJ., concur.
{¶ b} Although the 12 percent amounts charged were purportedly for state, county, and local taxes, Butler County only began exacting a three percent hotel excise tax on October 1, 2003 and the city of Fairfield, Ohio has only just added a transient lodging tax of three percent by passing Chapter 187 of Fairfield's Codified Ordinances on April 9, 2007.