Subpoena Ohio Municipal Tax

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					                              OHIO BOARD OF TAX APPEALS

Cleveland Municipal School District                  )
Board of Education,                                  )           CASE NOS. 2005-Z-1745
                                                     )                     2006-Z-44
                Appellant/Appellee,                  )
                                                     )
          and                                        )           (REAL PROPERTY TAX)
                                                     )
Water Streets Associates Ltd. (A                     )                      ORDER
Limited Part.),1                                     )
                                                     )         (Denying Motion to Quash and
                Appellee/Appellant,                  )          Motion for Protective Order)
                                                     )
          vs.                                        )
                                                     )
Cuyahoga County Board of Revision and                )
Cuyahoga County Auditor,                             )
                                                     )
                Appellees.                           )
APPEARANCES:

                       For the Bd. of Edn.          -    Brindza McIntyre & Seed LLP
                                                         David H. Seed
                                                         1111 Superior Avenue, Suite 1025
                                                         Cleveland, Ohio 44114

                       For the Property Owner       -    Karen H. Bauernschmidt Co., LPA
                                                         Karen H. Bauernschmidt
                                                         1370 West 6th Street, Suite 200
                                                         Cleveland, Ohio 44113

                       For the County
                       Appellees                    -    William D. Mason
                                                         Cuyahoga County Prosecuting Attorney
                                                         Timothy J. Kollin
                                                         Assistant Prosecuting Attorney
                                                         1200 Ontario Street, 8th Floor
                                                         Cleveland, Ohio 44113

                       For Republic Bank            -    Timothy A. Pirtle
                                                         Attorney At Law
                                                         2929 Kenny Road, Suite 160
                                                         Columbus, Ohio 43221
1
  Throughout the record, this entity is identified interchangeably as Water Streets Associates Ltd. (A
Limited Part.) and Water Street Associates Ltd. (A Limited Part.).
                Entered March 7, 2008

                This cause and matter originally came on to be considered by the Board

of Tax Appeals upon a motion to quash subpoena, or in the alternative, motion for

protective order filed by the property owner Water Streets Associates Ltd. (“Water

Streets”). On April 19, 2007,2 the appellant board of education issued a subpoena to

Republic Bank to appear at a deposition and to produce a “copy of any appraisal,

valuation, analysis or document regarding valuation of the subject property for a date

of valuation between January 1, 2002 and January 1, 2007.” In its subpoena, the board

of education indicated that Republic Bank entered into a mortgage with 1033 Water

Street, LLC (“1033 Water”), a subsequent owner of the subject property, on or about

December 27, 2005. In addition to the motion filed by the property owner, Republic

Bank filed a motion to quash subpoena, or in the alternative, motion for protective

order. The board of education filed reply briefs to both motions.3




2
   The board of education initially issued a subpoena to Republic Bank on February 22, 2007 which
admittedly contained clerical errors. On March 9, 2007, the property owner filed its motion to quash
the subpoena, or in the alternative, motion for a protective order, and argued therein that such clerical
errors were grounds for quashing the subpoena. Thereafter, on April 19, 2007, the board of education
reissued the subpoena to Republic Bank correcting the clerical errors. Thus, the issue of the clerical
errors raised by the property owner in its motion has been resolved.
3
                                                                    s
   The board of education filed a reply brief to the property owner’ motion to quash the subpoena, or
in the alternative, motion for a protective order and the board of education argued therein that the
property owner was not the proper party to object to the subpoena but rather only the party or person
commanded to produce, Republic Bank, had the authority to object citing Cleveland Municipal School
Dist. v. Cuyahoga Cty. Bd. of Revision (Interim Order, July 18, 2004), BTA No. 2003-R-1903,
unreported. This issue has been resolved by the motion to quash the subpoena, or in the alternative,
motion for a protective order filed by Republic Bank. Thus, the arguments raised by Republic Bank in
its motion will be addressed herein.


                                                   2
              Republic Bank argued in its motion and brief in support thereof, inter

alia, that:

              “The requested information contained in the subpoena is
              considered privileged and protected by the new property
              owner as well as Republic Bank. Republic Bank has a
              confidentiality policy relating to its relationship with the
              non-party new owner and under Ohio Civ. R. 45(C)(3)(b)
              can not be the subject of subpoena. The information and
              documents requested by the BOE in its subpoena to
              Republic Bank constitutes fact or opinion not prepared by
              any party in anticipation of litigation or preparation of trial
              pursuant to Ohio Civ. R. 45(C)(3)(b). Based upon Ohio
              Civ. R. 45(C)(3)(b) and (c), this Board must quash the
                    s
              BOE’ subpoena issued to Republic Bank.” Republic
              Bank Brief at 4.

              Civ.R. 45(C)(3) provides as follows:

              “On timely motion, the court from which the subpoena was
              issued shall quash or modify the subpoena, or order
              appearance or production only under specified conditions,
              if the subpoena does any of the following:

              “(a) Fails to allow reasonable time to comply;

              “(b) Requires disclosure of privileged or otherwise
              protected matter and no exception or waiver applies;

              “(c) Requires disclosure of a fact known or opinion held by
              an expert not retained or specially employed by any party
              in anticipation of litigation or preparation for trial as
              described by Civ.R. 26(B)(4), if the fact or opinion does
              not describe specific events or occurrences in dispute and
              results from study by that expert that was not made at the
              request of any party;

              “(d) Subjects a person to undue burden.”

              Because it was unclear from the record precisely what information or

documentation Republic Bank had in its possession that would require protection


                                            3
pursuant to Civ.R. 45(C)(3), this board scheduled a hearing to be held on January 31,

2008 for the sole purpose of determining whether Republic Bank had in its possession

any information or documentation that was responsive to the subpoena and required

protection under Ohio Civ.R. 45(C)(3). Republic Bank and the board of education, by

way of letters dated January 28, 2008 and January 30, 2008, respectively, waived their

right to appear at such hearing and present evidence to this board.

                Having provided Republic Bank with the opportunity to present

evidence to this board regarding the information or documentation Republic Bank has

in its possession that would require protection pursuant to Civ.R. 45(C)(3) and

Republic Bank having failed to appear at such hearing and present any such evidence,

this board finds no basis for granting the motion to quash the subpoena pursuant to

Civ.R. 45(C)(3).

                In addition to Republic Bank arguing that the subpoena should be

quashed based on Civ.R. 45(C)(3), Republic Bank argues in its motion and brief in

                                            s
support thereof that the board of education’ subpoena should be quashed since it was

issued to a non-party, Republic Bank, and it seeks documents executed by a non-party,

1033 Water, the subsequent owner of the subject property.4 Republic Bank also

argues that the subpoena should be quashed as it seeks confidential information which

is subject to the terms of a confidentiality agreement prohibiting the release of such


4
                                                               s
  While there seems to be a suggestion that a subsequent owner’ interest in the subject property is too
far removed from the valuation issues presented in this appeal, such owner is not necessarily a
disinterested party. See R.C. 5717.03, 5717.04 and Columbus City School Dist. Bd. of Edn. v.
Franklin Cty. Bd. of Revision, 114 Ohio St.3d 1224, 2007-Ohio-4007.



                                                  4
information. Finally, Republic Bank argues that the subpoena should be quashed as it

is overly broad and places an undue burden on Republic Bank. In the alternative,

Republic Bank argues that a protective order be issued pursuant to Ohio Adm. Code

                                                                  s
5717-1-11, Civ.R. 26, and R.C. 1333.61 through R.C. 1333.69, Ohio’ Uniform Trade

Secrets Act, providing for the protection of the confidentiality of certain proprietary

and trade secret information.

             Republic Bank correctly points out that the subpoena was issued to a

non-party and seeks documents executed by a non-party. Neither Republic Bank nor

1033 Water is a party to the instant appeal. Both the property owner, Water Streets,

and Republic Bank represent in their respective motions that on January 5, 2006, the

property owner caused to be filed a Deed in Lieu of Foreclosure and Satisfaction of

Mortgage (Quit Claim) to GLFG Acquisition Ltd. as nominee for Great Lakes

Financial Group Limited Partnership which thereafter filed a quit claim to 1033 Water.

On or about December 27, 2005, 1033 Water entered into a mortgage with Republic

Bank in relation to the subject property. Through its subpoena, the board of education

is seeking any appraisal, valuation, analysis or document regarding valuation of the

subject property for a date of valuation between January 1, 2002 and January 1, 2007.

                                                   s
             As this board considers Republic Bank’ position, this board is mindful

of its pronouncements in South Euclid-Lyndhurst City School District Bd. of Edn. v.

Cuyahoga Cty. Bd. of Revision (Interim Order, Mar. 15, 2002), BTA Nos. 2001-A-

439, 2001-A-454, unreported, wherein this board determined that Civ.R. 35(C) clearly

provides for the participation of persons who are not parties to an action in discovery


                                           5
matters. It was noted in such order that Civ.R. 26 sets forth the general provisions

governing discovery and provides in part:

                “(B) Scope of discovery. Unless ordered by the court in
                accordance with these rules, the scope of discovery is as
                follows:

                “(1) In general. Parties may obtain discovery regarding
                any matter, not privileged, which is relevant to the subject
                matter involved in the pending action, whether it relates to
                the claim or defense of the party seeking discovery or to
                the claim or defense of any other party, including the
                existence, description, nature, custody, condition and
                location of any books, documents, or other tangible things
                and the identity and location of persons having knowledge
                of any discoverable matter. It is not ground for objection
                that the information sought will be inadmissible at the trial
                if the information sought appears reasonably calculated to
                lead to the discovery of admissible evidence.”

                Clearly, Civ.R. 26(B)(1) allows for broad discovery. While discoverable

material is restricted to relevant evidence in a particular case, irrelevancy is

determined only under Civ.R. 26(B)(1) when the information sought will not

reasonably lead to the discovery of admissible evidence.5                  Tschantz v. Ferguson

(1994), 97 Ohio App.3d 693. As all of the foregoing rules of civil procedure are

considered, this board finds no basis upon which to quash the subpoena in question, as

the only information sought, documents, including any appraisal reports or other

5
  This board acknowledges that the information which the board of education is seeking may be for
purposes other than the tax valuation of the subject property as of the tax lien date at issue, i.e.,
January 1, 2003. The appraisal and related valuation documents being sought by the board of
education appear to be dated in December 2005 or January 2006, the time frame of the mortgage
extended by Republic Bank to 1033 Water. While this board has been disinclined to rely on such
evidence for purposes of determining the taxable value of real property, the information being sought
by the board of education nevertheless appears to be reasonably calculated to lead to the discovery of
admissible evidence. See Civ.R. 26(B)(1) and Freshwater v. Belmont Cty. Bd. of Revision (1997), 80
Ohio St.3d 26.


                                                  6
related information on the subject property, may clearly provide relevant information

concerning the value of the subject property. See South Euclid, supra.

              Republic Bank argues that appraisal information in connection with a

mortgage executed nearly three years after the tax lien date at issue herein, January 1,

2003, does not relate to the value of the subject property as of tax lien date. The board

                    s
finds Republic Bank’ claim, that the request is not relevant to the appeal and does not

constitute a reasonable time frame relevant to the valuation date, to be unpersuasive.

The board also does not find the request to be overly broad, as it is limited to the

property which is the subject of the instant appeal. Cleveland Municipal School Dist.

Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (Interim Order, Aug. 18, 2005), BTA

No. 2005-M-91, unreported.

              Republic Bank claims that the subpoena should be quashed since it seeks

information which is subject to the terms of a confidentiality agreement between

Republic Bank and 1033 Water purportedly prohibiting the release of such

information. The mere existence of a confidentiality agreement, however, does not

allow information that is otherwise discoverable to circumvent the general rules of

discovery. Furthermore, the confidentiality agreement is arguably not properly part of

the record to be considered by this board since Republic Bank failed to appear at the

hearing and, thus, failed to introduce the confidentiality agreement into evidence. See

Columbus Bd. of Edn. v. Franklin Cty. Bd. of Revision (1996), 76 Ohio St.3d 13.

              The information sought by the board of education has been held to be

discoverable by this board on numerous occasions. See Bd. of Edn. for the Orange


                                           7
City School District v. Cuyahoga Cty. Bd. of Revision (Interim Order, Jan. 14, 2005),

BTA Nos. 2004-A-738-748, unreported; Cleveland Municipal School District Bd. of

Edn. v. Cuyahoga Cty. Bd. of Revision (Interim Order, June 18, 2004), BTA No. 2003-

R-1903, unreported; South Euclid, supra. There is nothing in the record currently

before the board to distinguish the instant facts from those previously considered

where discovery was permitted. Accordingly, based upon the foregoing, Republic

     s
Bank’ motion to quash the subpoena must be denied.

              Further, concerning the consideration of a motion for protective order

filed with this board, Ohio Adm. Code 5717-1-11 provides:

              “(D) Upon the motion of a         party and for good cause
              shown, the board may issue a      protective order restricting
              discovery of a trade secret or    other confidential research,
              development or commercial         information.” (Emphasis
              added.)

Similarly, Civ.R. 26 provides for the issuance of a protective order as follows:

              “(C) Protective orders. Upon motion by any party or by
              the person from whom discovery is sought, and for good
              cause shown, the court in which the action is pending may
              make any order that justice requires to protect a party or
              person from annoyance, embarrassment, oppression, or
              undue burden or expense, including one or more of the
              following: (1) that the discovery not be had; (2) that the
              discovery may be had only on specified terms and
              conditions, including a designation of the time or place; (3)
              that the discovery may be had only by a method of
              discovery other than that selected by the party seeking
              discovery; (4) that certain matters not be inquired into or
              that the scope of the discovery be limited to certain
              matters; (5) that discovery be conducted with no one
              present except persons designated by the court; (6) that a
              deposition after being sealed be opened only by order of
              the court; (7) that a trade secret or other confidential


                                            8
              research, development, or commercial information not be
              disclosed or be disclosed only in a designated way; (8) that
              the parties simultaneously file specified documents or
              information enclosed in sealed envelopes to be opened as
              directed by the court.” (Emphasis added.)

              Ohio Adm. Code 5717-1-11(D) and Civ.R. 26(C) require that a person

requesting a protective order demonstrate “good cause” for the issuance of the order.

It appears that Republic Bank seeks such order for the “assured confidentiality of

              s                                  s
Republic Bank’ and the succeeding property owner’ confidential proprietary

information as protected trade secret.” Having done no more than allege, in general

terms, that the requested information is confidential proprietary information, Republic

Bank has failed to demonstrate “good cause” as required by Ohio Adm. Code 5717-1-

11(D) and Civ.R. 26(C). As the court in Koval v. Gen. Motors Corp. (C.P. 1990), 62

Ohio Misc.2d 694 recognized, the interests of a party seeking to keep its commercial

information confidential must be carefully weighed against the interests of the public

in maintaining open forums. R.C. 149.43. While it is acknowledged that there may

exist circumstances in which a protective order is properly issued by this board to limit

                                  s
the general disclosure of a party’ commercial information, see, e.g., State ex rel.

Seballos v. Sch. Emp. Retirement Sys. (1994), 70 Ohio St.3d 667, the bare allegation

made by Republic Bank does not warrant such a result.

              Further, it is clear that the board of education has only requested

information as it relates to the subject property, which is discoverable, as discussed

herein. Presumingly, the only information that will be provided by Republic Bank will

be that which has been requested and listed in the subpoena, i.e., information relating


                                           9
                                             s
to the subject property. Thus, Republic Bank’ motion for protective order must also

be denied.

                   Having denied the motion to quash the subpoena and the motion for

protective order herein, Republic Bank is hereby ordered to comply with the subpoena

issued by the board of education within 21 days of the date of issuance of this order.

ohiosearchkeybta




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