Jemo Associates, Inc. v. Lindley

Per Curiam. R. C. 5703.02(D) authorizes the board to “[a]dopt***rules relating to the procedure of the board in hearing appeals***.” Pursuant to this authority, the board adopted Ohio Adm. Code 5717-1-08, which, in relevant part, provides: “(C) Signing; in general.***A notice of appeal of a corporation*** shall be executed by an officer thereof or an attorney at law.” There is no dispute that the notice of appeal herein was signed by appellant’s accountant, and thus not signed by an officer of appellant or an attorney as mandated by Ohio Adm. Code 5717-1-08(C). The board dismissed appellant’s appeal because it determined that appellant’s failure to comply with Ohio Adm. Code 5717-1-08(C) rendered the board jurisdic-tionally incompetent under R. C. 5717.02 to consider appellant’s appeal. The commissioner herein, in effect, asks that we affirm this dismissal either (1) by sustaining the board’s jurisdictional determination; or alternatively (2) by ruling that appellant’s failure to comply with Ohio Adm. Code 5717-1-08(C) js itself sufficient to justify this dismissal. For reasons set forth, we reject both arguments. R. C. 5717.02, in part, provides: “Appeals from final determinations by the tax commissioner* * *may be taken to the board of tax appeals by the taxpayer***.” (Emphasis added.) The commissioner argues that the board properly dismissed this appeal for lack of jurisdiction because this appeal was not taken “by the taxpayer” within the meaning of R. C. 5717.02. In this connection, the commissioner argues that Ohio Adm. Code 5717-1-08(C) defines the exclusive conditions under which a corporation’s notice of appeal to the board is “by the taxpayer” for jurisdictional purposes. We disagree. Ohio Adm. Code 5717-1-08(C) was adopted [367] under the authority of R. C. 5703.02(D) which authorizes the board to make rules relating to its procedure in hearing appeals. Therefore, while Ohio Adm. Code 5717-1-08(C) is indeed presumptively binding on us as respects board procedure, see, e.g., State, ex rel. Kildow, v. Indus. Comm. (1934), 128 Ohio St. 573, 580; Zangerle v. Evatt (1942), 139 Ohio St. 563, 572-574,1 it is not binding on us as respects board jurisdiction because the General Assembly has not vested the board with any authority to define its jurisdiction. Of course, we must nevertheless give due regard to the board’s interpretation of its jurisdictional mandate.2 As an interpretation of R. C. 5717.02, Ohio Adm. Code 5717-1-08(C) is simply not persuasive. A corporation’s notice of appeal must necessarily be signed by an agent. Nothing in R. C. 5717.02 suggests that the General Assembly intended that an appeal by a corporation be jurisdictionally sufficient only where the agent of the corporation who signs its notice of appeal is either an officer thereof or an attorney.3 Indeed, under agency law, the authority of any purported agent to act on behalf of a principal is ordinarily a question of fact. See, generally, 3 Ohio Jurisprudence 3d, 34-36, Agency, Section 19. [368] There is thus no merit to an interpretation of R. C. 5717.02 which, for jurisdictional purposes, conclusively presumes that a corporate officer or an attorney is always competent to sign á corporation’s notice of appeal but that any other corporate agent is never competent.4 Therefore, we hold that R. C. 5717.02 does not require that a corporation’s notice of appeal to the board be signed by a corporate officer or an attorney. Alternatively, the commissioner argues that appellant’s failure to comply with Ohio Adm. Code 5717-1-08(C) is itself sufficient to justify the board’s dismissal of appellant’s appeal. As a procedural rule adopted under the authority of R. C. 5703.02(D), Ohio Adm. Code 5717-1-08(C) has the force and effect of law unless, inter alia, it is unreasonable. See State, ex rel. Kildow, v. Indus. Comm., supra; Zangerle v. Evatt, supra. See, also, fn. 1, supra. The commissioner contends that the corporate signature requirement of Ohio Adm. Code 5717-1-08(C) is reasonable because (1) it improves the clarity of the assignments of error, which must be included in the notice of appeal under R. C. 5717.02, by assuring that an experienced professional has reviewed the notice of appeal; and (2) it inhibits a corporation from needlessly burdening the board’s docket without having firmly decided to proceed to the merits. Since nothing in the record conflicts with these contentions, we hold that the requirement of Ohio Adm. Code 5717-1-08(C) that a corporation’s notice of appeal to the board be signed by a corporate officer or an attorney is a valid exercise of the board’s authority under R. C. 5703.02(D) to adopt rules relating to its procedure in hearing appeals. One must distinguish, however, between the reasonableness of the signature requirement of Ohio Adm. Code 5717-1-08(C) and the reasonableness of the board’s method of enforcing it. The commissioner argues that dismissal must [369] automatically follow from a corporation’s failure to comply with this signature requirement without regard to the circumstances underlying such failure. Since a notice of appeal to the board must be filed within 30 days of the commissioner’s final determination, the commissioner’s position in effect is that the mere failure of a corporation to comply with the signature requirement of Ohio Adm. Code 5717-1-08(C) is sufficient grounds for it to lose its right to appeal. We reject the commissioner’s argument. Sanctions short of dismissal ordinarily will assure compliance with this signature requirement, without unnecessarily forfeiting a corporation’s right to appeal. Indeed, the commissioner presumably would not argue that the mere failure of a corporate officer’s or attorney’s signature to appear on a subsequently filed document, as required by another procedural rule of the board,5 is sufficient to justify dismissal without regard to the underlying circumstances. The fact that the deficient document happens to be the initial step in the appeal (i.e., the notice of appeal) does not make automatic dismissal any more justified. Therefore, we hold that the mere failure of a corporation to comply with the signature requirement of Ohio Adm. Code 5717-1-08(C) is insufficient to justify dismissal of its appeal to the board without regard to the circumstances underlying such failure. For the foregoing reasons, the decision of the Board of Tax Appeals being unreasonable and unlawful is reversed and the cause remanded for further proceedings. Decision reversed and cause remanded. W. Brown, P. Brown and Sweeney JJ., concur. Holmes, J., concurs in the judgment. Celebrezze, C. J., Locher and Dowd, JJ., dissent. Footnotes [1] As respects board procedure, Ohio Adm. Code 5717-1-08(0) is thus a “legislative rule.” A legislative rule is a rule adopted by an agency pursuant to a grant of specific legislative authority. Generally, such a rule has the force and effect of law, and is thus binding on a court, if it is withip the agency’s rule-making authority, issued pursuant to proper procedure and reasonable as a matter of due process. See 2 Davis, Administrative Law Treatise (2 Ed.), 36-37, Section 7:8. [2] As respects the jurisdiction of the board, Ohio Adm. Code 5717-1-08(0) is thus an “interpretative rule.” An interpretative rule is a rule issued by an agency without specific legislative authority to make such a rule. Generally, it is issued to guide agency staff and regulated parties as to how the agency will interpret its statutory mandate in the absence of an authoritative construction by a court. When challenged, such an interpretative rule is not binding on a court, but will be given some weight depending upon the circumstances (e.g., where the rule deals with a matter within the agency’s expertise; where the rule is of long standing; or where the General Assembly has reenacted a statute with full knowledge of an interpretative rule). Ibid. [3] R. C. 5717.02 specifies (1) with whom the notice of appeal must be filed (the board and either the Tax Commissioner or Commissioner of Tax Equalization); (2) by when the notice of appeal must be filed (within 30 days of final determination); (3) the method of filing the notice of appeal (in person or by certified mail); and (4) the contents of the notice of appeal (copy of commissioner’s notice of final determination and errors therein complained of). However, R. C. 5717.02 places no limitation upon which corporate agents must sign the notice of appeal. [4] The commissioner also attempts to distinguish between attorneys and other agents on the ground that pursuant to R. C. 4705.01 only licensed attorneys (1) can commence an “action or proceeding” on behalf of another; and (2) are entitled to practice before the board “without further qualification or license.” However, R. C. 4705.01 is irrelevant to the jurisdictional issue before us since it has no bearing upon whether any particular attorney has the authority to represent any particular corporate taxpayer. [5] Ohio Adm. Code 5717-1-11, in part, provides: “(A)***A document filed by a corporation shall be signed by the attorney representing the same or by an officer of the corporation. * * * ”