Background
High Mill Holdings, LLC, and Stone Crossing SNF & ALF Holding, LLC, sought to record deeds transferring Stark County real estate to other limited liability companies. They claimed the transfers were exempt from Ohio’s conveyance fees because the transferors and transferees had common ownership and no consideration was paid. Although an assistant county prosecutor initially advised that the submitted proof supported an exemption, Auditor Angela Kinsey declined to endorse the deeds as exempt.
To move the transactions forward, the companies paid a combined $35,467.36 in conveyance fees and marked their DTE-100 forms “under protest.” They later sued Kinsey for conversion and replevin. The Stark County Court of Common Pleas dismissed the action with prejudice under Civ.R. 12(B)(6), concluding that R.C. 2723.01 through 2723.05 supplied the exclusive procedure for recovering the payments and that the companies had not given the notice required by R.C. 2723.03.
The Court’s Holding
The Fifth District affirmed. It held that Ohio’s statutory tax-recovery procedure was the companies’ exclusive remedy for recovering allegedly unlawful conveyance fees, precluding their conversion and replevin claims. Under controlling Ohio precedent, R.C. 2723.03 requires strict compliance: when paying, a taxpayer must file a written protest specifying the claimed illegality and provide notice of an intention to sue under R.C. 2723.01 through 2723.05. A notation that payment was made “under protest” did not satisfy those requirements because it neither explained the alleged illegality nor communicated an intent to sue.
The appellate court also rejected the companies’ procedural arguments. The trial court resolved a legal issue from the amended complaint rather than improperly relying on evidence outside the pleadings. Liberal construction could not supply the missing statutory allegations, and further amendment would have been futile because the required contemporaneous notice had never been given. The court declined to conduct a summary-judgment analysis because the trial court had dismissed the case under Civ.R. 12(B)(6).
Key Takeaways
- R.C. 2723.01 through 2723.05 provide the exclusive means to recover allegedly unlawful conveyance fees already paid to an Ohio taxing authority.
- R.C. 2723.03 requires strict, contemporaneous compliance with both the written-protest requirement and the requirement to give notice of an intention to sue.
- Simply writing “under protest” on a payment form does not specify the claimed illegality or provide the required notice of intent to sue.
Why It Matters
Taxpayers disputing Ohio taxes or assessments cannot preserve a refund claim through a generalized protest alone. At the time of payment, they must satisfy every element of R.C. 2723.03, including identifying the alleged illegality and expressly notifying the collecting officer of an intent to sue under the statutory scheme.
The decision also underscores that common-law claims cannot circumvent Ohio’s exclusive tax-refund procedure. A later pleading amendment cannot cure the failure to provide notice that the statute required contemporaneously with payment.