Opinion
No. 90-3583.
Decided February 25, 1991.
Lee I. Fisher, Attorney General, and David A. Reams, Special Counsel, for the state.
McKenny, Ernsberger Grude Co., L.P.A., and David G. Grude, for defendants.
The state of Ohio has sued defendants, Toledo Sports Enterprises, Inc. and its sole shareholder, Thomas Stults, to recover delinquent taxes owed by Terrance Forgette, the former owner of property which they purchased at a sheriff's sale. Defendants filed a Civ.R. 12(B)(6) motion to dismiss contending that the plaintiff is barred from claiming any interest in the property in question by an order of Judge Richard W. Knepper dated April 12, 1990 in Kest v. Forgette (Apr. 10, 1990), Lucas C.P. No. 88-2810, unreported.
The state argues that defendants have not cited any Ohio decision which holds that a sheriff's sale purchaser is not liable as a successor for taxes due, but defendants rely on two cases. The first, State v. Standard Oil Co. (1974), 39 Ohio St.2d 41, 68 O.O.2d 24, 313 N.E.2d 838, involved an assumption of assets ownership under a security agreement, but the second case, 104, Inc. v. Liquor Control Comm. (1967), 13 Ohio Misc. 75, 42 O.O.2d 127, 233 N.E.2d 622, is more helpful. In 104, Inc. the court found that in a receivership a business purchaser who buys property becomes a successor of the receiver, rather than of the former business owner, and is therefore not liable for the former owner's unpaid taxes. Id. at 76-78, 42 O.O.2d at 128-130, 233 N.E.2d at 623-625.
To analogize, in a sheriff's sale, i.e., a judicial sale, the court is the real vendor. See, e.g., In re United Toledo Co. (C.A. 6, 1945), 152 F.2d 210, 211. Thus, defendants in the instant case purchased the property from the court, rather than from Forgette. As successors of the court they are not liable for the delinquent taxes of Forgette under R.C. 5739.14, the statute which usually imposes liability for taxes after the sale of the business.
Even more importantly, the state was a party to the earlier foreclosure action on this property against Forgette where this court held:
"The Court further finds that all the former liens of the State of Ohio, Department of Taxation, have been released of record, and therefore, the State of Ohio, Department of Taxation, is forever barred from claiming any interest in the property which is the subject of this action or the sale proceeds thereof." (Emphasis added.) Kest v. Forgette, supra, at 2.
Pursuant to the doctrine of res judicata, the state is specifically barred in this action by Judge Knepper's order in the former lawsuit.
A motion to dismiss for failure to state a claim under Civ.R. 12(B)(6) is to be granted only if from the allegations of the complaint it appears that no set of facts could be established by evidence which would entitle plaintiff to the relief requested. O'Brien v. Univ. Community Tenants Union (1975), 42 Ohio St.2d 242, 71 O.O.2d 223, 327 N.E.2d 753. This is the exact situation here.
Pursuant to Judge Knepper's order in Kest, this court finds that the state of Ohio, Department of Taxation, has no claim to any interest in the property purchased by defendants. Accordingly, defendants' motion to dismiss must be granted.
Motion granted.