Court of Appeals of Ohio, Eighth District, Cuyahoga
WOODS COVE III, L.L.C. PLAINTIFF -APPELLEE
AMERICAN GUARANTEED MANAGEMENT CO., L.L.C., ET AL. DEFENDANTS-APPELLANTS
Appeal from the Cuyahoga County Court of Common Pleas Case
Nos. CV-14-836666, CV-15-839377
ATTORNEYS FOR APPELLANTS Joseph Bancsi Michael F. Westerhaus
ATTORNEYS FOR APPELLEE David T. Brady Austin B. Barnes, III
Suzanne M. Godenswager Brian Steven Gozelanczyk Manbir S.
Sandhu Andrew M. Tomko Sandhu Law Group, L.L.C.
Cuyahoga County Treasurer Awatef Assad Cuyahoga County Law
Department Assistant Director of Law Michael C. O'Malley
Cuyahoga County Prosecutor By: Michael A. Kenny Gregory B.
Rowinski Assistant County Prosecutors
BEFORE: Keough, J., McCormack, P.J., and Blackmon, J.
JOURNAL ENTRY AND OPINION
KATHLEEN ANN KEOUGH, JUDGE
In these consolidated appeals, defendants-appellants Nick
Papadelis ("Papadelis") and American Guaranteed
Management Co., L.L.C. ("American Guaranteed")
(collectively, "appellants") appeal from the trial
court's judgments adopting the magistrate's decisions
that granted summary judgment in favor of plaintiff-appellee
Woods Cove III, L.L.C. ("Woods Cove") and denied
appellants' motions for summary judgment. For the reasons
that follow, we affirm.
This case concerns tax certificates purchased by Woods Cove
from the Cuyahoga County Treasurer and the ensuing
Ohio's tax certificate legislation, R.C. 5721.30 through
5721.43, allows a county government to sell tax certificates
to private investors. A tax certificate entitles the
certificate holder to the first lien on the real property.
R.C. 5721.32. A property owner can redeem the certificate and
remove the lien by paying the certificate holder the purchase
price plus interest, penalties, and costs. R.C. 5721.38. If
the property owner fails to redeem the certificates, the tax
certificate holder may initiate foreclosure proceedings on
the real property after complying with certain statutory
Woods Cove II L.L.C. v. Am. Guaranteed Mgmt. Co.,
L.L.C, 8th Dist. Cuyahoga No. 103652, 2016-Ohio-3177,
American Guaranteed owed property taxes on property located
on Torwood Court in Cleveland, and Papadelis owed property
taxes on property located on Orchard Boulevard in Parma
Heights. Woods Cove purchased tax certificates representing
the tax liens on the properties from the county treasurer.
When Papadelis and American Guaranteed failed to redeem the
certificates, Woods Cove filed foreclosure actions pursuant
to R.C. Chapter 5721. The cases were assigned to the same
trial court judge.
Papadelis and American Guaranteed filed identical answers to
the complaints, and both asserted a counterclaim seeking a
declaratory judgment that Ohio's tax certificate
legislation is unconstitutional.
Woods Cove subsequently filed identical motions for summary
judgment in both cases. In its motions, Woods Cove asserted
that there were no genuine issues of material fact that (1)
it was the holder of the tax certificates, (2) the amount and
nonpayment of the taxes as shown on the tax certificates was
presumptively valid, (3) it had not received any payment on
the assessments referred to in the tax certificates, (4) it
had filed a notice of intent to foreclose with the county
treasurer, and (5) the treasurer had certified that the
properties had not been redeemed. Accordingly, Woods Cove
argued that it was entitled to judgment as a matter of law.
In their identical motions for summary judgment and responses
to Woods Cove's motion, Papadelis and American Guaranteed
did not dispute Woods Cove's arguments regarding their
liability on the tax certificates, or the amount and validity
of the taxes, assessments, charges, penalties, and interest
due and unpaid. Instead, they argued they were entitled to
summary judgment on their counterclaims that Ohio's tax
certificate legislation is unconstitutional.
Papadelis and American Guaranteed argued that the tax
certificate legislation violates the equal protection
requirements of the United States and Ohio Constitutions
because the statute treats similarly situated property owners
(i.e., those on the delinquent land list) differently by
allowing the treasurer to arbitrarily select which tax
certificates will be sold, thereby requiring the property
owners chosen for tax certificate foreclosure to pay ...