Tuesday, May 13, 2025
State of Ohio v. Jeremy Reed, Case No. 2024-0522
Fifth District Court of Appeals (Fairfield County)
Cheryl Durig, executor of the estate of Thomas Morar v. City of Youngstown, Case No. 2024-0534
Seventh District Court of Appeals (Mahoning County)
State of Ohio v. Nicholas Musarra, Case Nos. 2024-0540 and 2024-0541
Eighth District Court of Appeals (Cuyahoga County)
Claugus Family Farm LP v. Patricia Harris, tax commissioner of Ohio, Case No. 2024-0895
Ohio Board of Tax Appeals
Should Separate Trials Be Conducted for Man Charged With Raping Four Children?
State of Ohio v. Jeremy Reed, Case No. 2024-0522
Fifth District Court of Appeals (Fairfield County)
ISSUES:
- Did a trial court abuse its discretion by allowing a man to be jointly tried for sexual offenses against four minors for alleged acts that took place years apart?
- Must all full-time judges in an appellate court district vote on a request for an entire court review of a three-judge panel decision?
BACKGROUND:
In 2022, Jeremy Reed was indicted on 22 counts of sexually related crimes involving four victims, all minors at the time of the offenses. The acts occurred over several years, and in each case, Reed was in a romantic relationship with each victim’s mother or grandmother.
The first girl, identified as “T.S.,” reported she was 9 years old when Reed began to sexually assault her. Reed lived with the girl’s mother at the time and T.S. stated the abuse continued until she turned 15. The second and third girls, “G.K.” and “L.K.,” lived with Reed after he began dating their mother, who he eventually married. G.K. stated that Reed would take her on camping trips where he would sexually assault her. She said the abuse took place between the time she was 8 and 11 years old. L.K. reported she was 6 or 7 years old when Reed began to abuse her. The last girl was “A.M.,” who said she was 7 when Reed assaulted her. Reed was dating A.M.’s grandmother at the time. A.M. reported that, in one instance, she crawled into bed to sleep between her grandmother and Reed. Her grandmother witnessed Reed reaching out to rub A.M.’s upper thigh.
Accused Seeks Separate Trials
Reed asked the Fairfield County Common Pleas Court to sever the charges and order separate trials for each victim. The Fairfield County Prosecutor’s Office opposed the motion, providing the judge with a detailed account of each claim by the girls, and arguing that Reed wouldn’t be prejudiced if the charges were tried all at one time. The trial court denied the request for separate trials.
Reed pleaded no contest to two counts of rape and two counts of gross sexual imposition. He was sentenced to 28 to 33 years in prison and designated as a Tier III sex offender. Reed appealed his convictions to the Fifth District Court of Appeals based on the denial of his request for separate trials.
In a 2-1 decision, a three-judge panel of the Fifth District reversed the trial court’s decision and vacated his convictions. The prosecutor requested that all six judges on the Fifth District conduct an en banc review. The three judges who considered the appeal denied the request, with no other Fifth District judges signing the order to deny the en banc review.
The prosecutor appealed the case to the Supreme Court of Ohio, which agreed to consider two distinct issues: whether the trial court wrongly declined to grant separate trials, and whether the six appeals court judges needed to vote on whether to conduct an en banc review.
Joint Trial Appropriate, Prosecutor States
The Ohio Rules of Criminal Procedure permit one trial for the commission of two or more offenses when the charges are based on two or more acts constituting parts of a common scheme or plan, or are part of a course of conduct, the prosecutor explains. Conducting one trial for Reed was appropriate because his crimes involved girls of a similar age when the offenses occurred, and the sexual abuse perpetrated on each girl was similar, the prosecutor asserts. Additionally, Reed gained a father figure role in each instance by dating or marrying the girls’ mother or grandmother, the prosecutor notes, and each of the acts took place at night, in bed. This demonstrated a course of conduct over two decades, the prosecutor maintains.
Under a separate procedural rule, Reed could seek separate trials, but he had to meet a “heavy” burden of explaining how a joint trial would unfairly prejudice him, the prosecutor notes. However, Reed provided only a “boilerplate” motion to the trial court without specific details as to how he would be harmed, and Reed summarily stated, “prejudice seems clear.”
At the center of Reed’s argument is that the testimony of the four girls at a joint trial would serve as “other acts” evidence, with the story of one girl’s interactions with Reed bolstering the stories of the others, the prosecutor explains. Under court rules, “other acts” evidence can only be used for certain purposes but not to prove that Reed’s past acts mean he committed the act for which he is charged. The prosecutor argues the Fifth District wrongly agreed with Reed’s belief that having all the girls testify in one trial would be highly prejudicial. The appeals court also rejected the idea that the trial judge’s stated intention to instruct the jury on the proper use of the girls’ testimony would be effective. The appeals court concluded that hearing from all the girls at one trial would likely lead a jury to consider each girl's testimony as proof that Reed committed all of the charged offenses, the office notes
The prosecutor notes that Reed sought separate trials before his trial began. The prosecutor argues that the theories on whether the girls’ testimony would harm his case were speculation. The office asserts that Reed denied the acts happened. Had the trial started, and Reed attacked the credibility of the girls as they testified, then the “other act” evidence could be admitted into a trial to rebut the claims that the girls were lying, the prosecutor maintains.
The prosecutor explains that in every trial, the evidence against the accused is prejudicial, meaning it is harmful to the accused’s case. The rule only prevents introducing evidence that is “unfairly prejudicial,” and Reed hasn’t explained how he would be unfairly harmed, the prosecutor argues. If the trials were separate, and Reed argued at each trial that the girls were lying, then the state could have the other girls testify in each of the trials to rebut his claims, the prosecutor asserts. The prosecutor notes the procedural rules also allow for the testimony of the other girls if it is “simple and direct.” The trial court found the testimony would be simple and direct, only involving each child’s own interactions with Reed, the prosecutor maintains. All testimony would be admissible at a joint trial or at separate trials, the prosecutor concludes.
Full Appeals Court Should Consider Case, Prosecutor Argues
The prosecutor contends the Fifth District panel ruling in Reed’s case contradicted a prior ruling from the Fifth District. When there is a conflict among rulings by an appellate district, a party can ask for an en banc review. An en banc review allows all the judges of the appellate district who have not recused themselves or been disqualified from the case to address the conflicting decisions. The prosecutor notes the Ohio Rules of Appellate Procedure require a “majority” of the judges to consider whether to have the full court review a case. To reach a majority, the rule implies that all eligible judges in the district get to vote on the matter. Because there are six judges in the Fifth District, four judges would have to vote on the case. In this case, only the three judges who considered the original appeal voted, and they decided against having a full court review. The prosecutor argues the vote violated the rules and all six judges should vote to consider the case.
Separate Trials Necessary, Accused Maintains
Child sex cases are inherently filled with emotion and shocking evidence, Reed explains, leading to the unavoidable consequence that juries will be affected by the testimony. He argues it is inconceivable to believe a jury wouldn’t be impacted if prior unrelated accusations from unrelated alleged victims were made. The rules call for separate trials when the danger of unfair prejudice is extreme, and he argues it would be in this case.
Reed maintains the prosecution provided detailed allegations to the trial court of all claims made by the girls. His motion to the court to sever the trials didn’t need to repeat the details but only point out the legal flaws in the prosecutor’s insistence that the charges should be considered together at one trial. Reed maintains no exception in the rules would allow the other acts evidence to be used against him. The testimony’s only purpose would be for an improper use, claiming that his acts with one victim proved he committed the same acts against the others. He argues there was no course of conduct, and each allegation involved different victims at different times and in different places. The only common thread is himself, which isn’t enough to connect the cases for a joint trial, Reed asserts.
The evidence from one victim would bolster the evidence of the others and would compromise the requirement that the prosecution prove each offense beyond a reasonable doubt, Reed maintains. He argues that to prove a common scheme, the prosecutor must prove that each crime was committed in preparation for the other crimes. No evidence presented at the pretrial stage suggested the prosecutor could prove that Reed acted with a common scheme, he argues. When claiming a common scheme, other acts evidence can only be introduced to prove the perpetrator’s identity, Reed notes. However, identity isn’t an issue in this case, Reed argues. The issue is whether the acts occurred, he maintains, and other acts evidence isn’t permitted.
Reed argues the prosecution also contradicts itself by arguing the other acts evidence could be admitted at a joint trial to prove a common scheme while also claiming the girls’ testimony is simple and direct. Simple and direct evidence would indicate the testimony is unique to each alleged victim, he maintains. The evidence can’t be both unique to each victim and also be used to show a common scheme where evidence is intertwined and related, he argues. The prosecutor’s arguments demonstrate an attempt to draw broad conclusions to support the credibility of each alleged victim, Reed asserts, which is why a joint trial would be unfair.
Full Appellate Court Vote Not Required, Accused Argues
Citing the Court’s 2013 State v. Forrest decision, Reed asserts that all the sitting judges in an appeals district need not vote on a decision to conduct an en banc review. He maintains that court rules give the appeals courts discretion on how they want to address the issue. If the state wants to change the rules, it should present a proposal to the Commission on the Rules of Practice and Procedure and follow the traditional rule-making process, he concludes.
Friend of the Court Briefs Submitted
An amicus curiae brief supporting the prosecutor’s position was submitted by the Ohio Prosecuting Attorneys Association. The Ohio Attorney General’s Office also filed an amicus brief supporting the prosecutor and will share oral argument time with the prosecutor.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing the State of Ohio from the Fairfield County Prosecutor’s Office: Sarah Hill, sarah.hill@fairfieldcountyohio.gov
Representing Jeremy Reed: Stephen Palmer, spalmer@palmerlegaldefense.com
Representing the Ohio Attorney General’s Office: T. Elliot Gaiser, thomas.gaiser@ohioago.gov
Did City Wait Too Long To Claim Immunity in Fallen Tree Lawsuit?
Cheryl Durig, executor of the estate of Thomas Morar v. City of Youngstown, Case No. 2024-0534
Seventh District Court of Appeals (Mahoning County)
ISSUES:
- When a civil lawsuit complaint claims negligence by a political subdivision, does an answer asserting the complaint fails to state a claim upon which relief can be granted serve as notice that the political subdivision is seeking immunity?
- Did a city wait too long to request to amend its answer to a civil lawsuit when it made the request more than two years after the suit was filed?
BACKGROUND:
In June 2017, Thomas Morar was seriously injured when a tree fell on him while riding a bicycle in Youngstown. Nearly two years later, he died as a result of the injuries. In June 2019, Cheryl Durig, the executor of Morar’s estate, filed a wrongful death lawsuit and made other claims against the city and five unnamed city employees, alleging they “negligently, recklessly, or wantonly failed to give warning of or remediate the hazardous condition of the tree.”
The city filed a response in August 2019, asserting the complaint failed to state a claim upon which relief can be granted. The city did not argue it was immune from the lawsuit. Four months later, in December 2019, the judge assigned to hear the case recused himself. No activity occurred in the case until February 2021, nearly 13 months later, when a visiting judge was assigned. The judge set a schedule, which included a deadline to file substantive motions by October 2021 and a November 2021 deadline to oppose any motions. The judge also set a January 2022 trial date for the case.
Durig filed for summary judgment on the date the motions were due. Youngstown didn’t reply by the stated November 2021 deadline. In December 2021, lawyers for Youngstown requested permission from the judge to oppose summary judgment. Youngstown responded with a motion to oppose summary judgment and made its own motion for summary judgment. The motion indicated the city was claiming immunity from liability under R.C. Chapter 2744.
Durig asked the trial judge to reject Youngstown’s motion, arguing the city was claiming statutory immunity for the first time in two and a half years. She argued the city had waived immunity and should have raised the issue when it first answered the complaint in 2019. The trial judge agreed and ruled that Youngstown waited too long to raise the issue and waived it. Two months later, Youngstown asked the judge for “leave,” or permission, to amend its answer and included the immunity claim. The city noted a private law firm was representing the city in the case and argued that Durig’s case wouldn’t be harmed by the delay in considering the amended complaint.
The trial court again rejected the city’s request. Youngstown appealed the decision to the Seventh District Court of Appeals, arguing the trial judge abused his discretion by not allowing the city to amend its answer. In a 2-1 decision, the Seventh District affirmed the trial court’s decision.
Youngstown appealed to the Supreme Court of Ohio, which agreed to hear the case.
Initial Response Sufficient To Claim Immunity, City Asserts
Youngstown explains there are conflicting opinions among appeals courts in cases against political subdivisions where the response to a civil lawsuit states only that the complaint fails to state a claim upon which relief can be granted. The answer is commonly given in many civil lawsuits and takes on a particular meaning when suing a political subdivision, the city claims.
Citing decisions by the Eighth and Twelfth Districts, Youngstown maintains that when it is discernible from the wording of the complaint that the political subdivision is being sued for negligence, then responding that the plaintiff fails to state a claim upon which relief can be granted preserves the city’s right to argue immunity later. The city argues the failure to state a claim is the “functional equivalent” of arguing immunity.
The city argues the two varying responses are necessary because of an issue regarding the burden of proof. Failure to state a claim for which relief can be granted challenges the sufficiency of the plaintiff’s evidence, the city notes. Durig’s claims didn’t contain a theory that would allow her to win a lawsuit because the city has immunity, the city asserts. The city notes that anyone attempting to sue a political subdivision is on notice that state law grants immunity to cities. By replying with this argument, the city asserts that by law and with no additional proof on its part, Durig’s case would fail if it went to trial.
On the other hand, immunity is an affirmative defense. An affirmative defense, the city explains, admits that the political subdivision is at fault but allows the city to offer a justification for why it isn’t liable for the damages. The city argues it shouldn’t have to raise that defense in response to the initial complaint. The city maintains it put Durig on notice immediately that immunity would be an issue and that it could raise the defense more specifically at any time before or during a trial.
The city also notes that because the trial judge believed the city waived the immunity defense by not raising it earlier, he abused his discretion when he refused to allow the city to amend the answer. The city argues a judge should grant the request unless there is proof the city caused an undue delay by waiting to amend the complaint or the change is unfairly prejudicial to Durig. The city notes most of the delay occurred during the COVID-19 pandemic and most of the time lapse occurred while the case was awaiting the appointment of a new judge. The city wasn’t responsible for the bulk of the delay, it argues. Also, based on the allegations made by Durig, it should have been obvious to her that the city would raise the defense of immunity, Youngtown maintains. Adding the claim before trial wouldn’t unfairly harm her case because she was already prepared to argue that the city’s actions didn’t entitle it to immunity, the city asserts.
City Waited Too Long To Claim Immunity, Executor States
Youngstown isn’t the first political subdivision found to have waived immunity by waiting too long to raise it, Durig maintains, and the lower courts correctly applied case law to reject the city’s claim. The pleading process required the city to raise the issue, and there is no way, from the wording of her complaint, that the city could assume it was immune from the suit, she asserts.
Durig argues that plaintiffs are entitled to know the defenses a political subdivision will raise in a lawsuit, and the procedural rules allow for political subdivisions to claim immunity early on in the pretrial process. Youngstown failed to raise the issue until it was too late, she asserts. Affirmative defenses, such as immunity, are waived unless raised in a pleading, Durig notes. Failure to state a claim for which relief can be granted is a broad and general response, she explains. Durig argues she couldn’t be expected to know the city intended to raise immunity as a defense as dozens of defenses can be raised later after an initial answer of a failure to state a claim.
The cases the city cites in its defense concern the ability of a political subdivision to actively try to claim immunity early in the process. This typically happens when a government body seeks a motion to dismiss the case after it has been filed but before trial. Youngstown didn’t seek dismissal and missed the deadline to respond to the summary judgment motion in the months before the trial. It was only 32 days before trial that it first made the claim, During states.
Durig also notes her complaint argued the city acted “recklessly, or wantonly” when it failed to maintain the tree after being alerted about its condition. That put the city on notice that Durig was contesting its defense of immunity and was expecting the city to argue more than it was immune from liability. In other cases where the complaint simply argues negligence, it might be sufficient to answer with a failure to state a claim, but not in her case, During asserts. She also contends the judge rightly considered the issue to be waived, and her case would have been unfairly harmed if the judge had allowed the claim to be made just a month before the trial began.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing the City of Youngstown: Emily Anglewicz, eanglewicz@ralaw.com
Representing Cheryl During, executor of the estate of Thomas Morar: Ilan Wexler, iwexler@aspands.com
Can Trial Courts Acquit Defendants if State Failed To Prove Proper Venue?
State of Ohio v. Nicholas Musarra, Case Nos. 2024-0540 and 2024-0541
Eighth District Court of Appeals (Cuyahoga County)
ISSUES:
- Is it proper for an Ohio court to grant an acquittal when finding that the state failed to establish venue?
- Is an acquittal under Rule 29(A) of the Ohio Rules of Criminal Procedure and based on a lack of venue a final verdict?
BACKGROUND:
Nicholas Musarra was indicted by a Cuyahoga County grand jury on two counts of rape and one count of sexual battery. Musarra lived in Cleveland and worked at Nora’s Public House in Willoughby, which is in Lake County. A coworker, identified as Jane Doe, said Musarra, she, and other coworkers were drinking after work one night in August 2020. She said Musarra offered her a ride home but instead took her to his Cleveland residence and sexually assaulted her.
In November 2023, Musarra’s trial began in Cuyahoga County Common Pleas Court. The jury was selected, and the Cuyahoga County Prosecutor’s Office presented its case and evidence. Musarra then made a motion for an acquittal based on venue, arguing the prosecutor didn’t prove the offenses happened in Cuyahoga County. After reviewing case law and the evidence, the trial court acquitted Musarra pursuant to Rule 29(A) of the Ohio Rules of Criminal Procedure. Rule 29(A) states that a court shall enter a judgment of acquittal if the evidence is insufficient to sustain a conviction on the offenses.
The prosecutor appealed the acquittal to the Eighth District Court of Appeals in two ways – as the state’s right in specific circumstances and by requesting permission, or leave, from the Eighth District to file the appeal. Musarra countered that the trial court decision was a “final verdict,” which the state wasn’t permitted to appeal. In March 2024, the Eighth District without issuing an opinion declined to hear either appeal.
The prosecutor appealed both decisions to the Supreme Court of Ohio, which agreed to review the issues. The Supreme Court consolidated the cases and briefing.
Venue Doesn’t Need To Be Proven and Acquittal Can Be Appealed, State Contends
The prosecutor maintains that venue refers to where a trial must be located. The U.S. Constitution states, “The Trial of all Crimes … shall be by Jury; and such Trial shall be held in the State where said Crimes shall have been committed.” Ohio addresses venue in a statute. According to R.C. 2901.12(A), criminal trials “shall be held in a court having jurisdiction of the subject matter, and, … in the territory of which the offense or any element of the offense was committed.”
The prosecutor contends that the trial court in this case incorrectly ruled that venue is a fact the state must prove. Musarra’s challenge to venue based on Criminal Rule 29(A) is wrong, because the rule involves the sufficiency of the evidence, not the trial location, the prosecutor maintains. Although the elements of a charged offense must be proven by the state with evidence, the place where the alleged offense was committed isn’t an element and doesn’t have to be proven, the prosecutor asserts.
The prosecutor also argues a defendant should be required to raise an objection regarding venue before a trial begins, just as a defendant would do if requesting a change in venue. If there are indications from later testimony at trial that the venue is in the wrong county, then the proper remedy is a mistrial and transfer of the case to the correct venue, the prosecutor contends.
When a court acquits under Rule 29(A), the acquittal suggests that double jeopardy protections are implicated, barring a retrial, the prosecutor notes. However, the prosecutor argues, the double jeopardy protection against a second prosecution isn’t implicated when there is a venue-based error. A court finding regarding venue isn’t a decision on the defendant’s guilt or innocence, the prosecutor maintains – asserting that the position is supported by the U.S. Supreme Court decision in Smith v. United States (2023). In the case, the U.S. Supreme Court considered whether a court’s venue ruling in response to a motion to acquit prohibited retrial because of double jeopardy. The argument was rejected.
The prosecutor’s brief also discusses when the state is allowed to appeal decisions in criminal cases. R.C. 2945.67 states:
“A prosecuting attorney … may appeal as a matter of right any decision of a trial court in a criminal case … which decision grants a motion to dismiss all or any part of an indictment, complaint, or information, … and may appeal by leave of court to which the appeal is taken any other decision, except the final verdict, of the trial court in a criminal case.”
According to the statute, final verdicts cannot be appealed. The prosecutor argues, though, that when a trial court acquits based on venue, the acquittal isn’t a final verdict. Final verdicts are the formal and unanimous decision of the jury on the factual issues in the matter, the prosecutor maintains. The prosecutor contends that a trial court decision on venue isn’t the same – it’s a court judgment, not a verdict in the case.
The prosecutor acknowledges, however, that the Supreme Court of Ohio ruled in State v. Hampton (2012) that a “court order purporting to acquit a defendant due to the state’s failure to establish venue is a ‘final verdict,’” as used in R.C. 2945.67. The prosecutor argues that Hampton was wrongly decided and should be overruled.
When Venue Not Proven, Acquittal Is Proper and Can’t Be Appealed, Accused Argues
Musarra responds that while Smith ruled that proof of venue isn’t an essential element of a crime under the U.S. Constitution and federal law, Ohio is different. In Hampton, the Supreme Court of Ohio based its decision on the Ohio Constitution and the Revised Code. The Court ruled that to uphold a conviction for a crime, evidence of proper venue must be presented. The decision further found that retrials in cases where venue wasn’t proven aren’t allowed, Musarra maintains. Whether a retrial is permitted under the double jeopardy clause in the U.S. Constitution is irrelevant, he asserts.
He argues that Hampton was decided correctly. Besides relying on the Ohio Constitution, the Court cited precedent from a 1983 decision and a 1947 ruling to support its conclusion. The Court in Hampton wrote:
“Over a century of well-established jurisprudence clearly mandates that a motion for judgment of acquittal must be granted when the evidence is insufficient for reasonable minds to find that venue is proper. … a judgment of acquittal may be entered when the state has failed at trial to prove the venue of the offense as alleged in the indictment.”
Musarra also examines the prosecutor’s ability to appeal the trial court decision based on R.C. 2945.67. The law lists specific circumstances where the prosecutor has a right to appeal. Musarra contends that a motion made based on Rule 29 is not listed in the statute so the prosecutor had no right to appeal. A Rule 29 acquittal isn’t akin to a motion to dismiss an indictment, as the prosecutor seems to argue, Musarra maintains. Dismissing an indictment occurs when there are defects in the allegations, he argues. A Rule 29 acquittal is different, turning on the failure of proof at trial, he states.
He also argues the Court has ruled in cases involving the statute that a prosecutor cannot appeal final verdicts either as an appeal of right or by requesting leave to file an appeal. First, a Rule 29 acquittal is a final verdict, and the state cannot appeal a final verdict, Musarra asserts. Second, he maintains that Hampton found that neither avenue of appeal is available when there is an acquittal based on lack of evidence proving venue. The Eighth District had no jurisdiction and couldn’t consider the state’s appeals, Musarra reasons.
Additional Briefs Support County Prosecutor’s Arguments
An amicus curiae brief supporting the Cuyahoga County prosecutor’s position was submitted by the Ohio Attorney General’s Office. The office will also participate in the oral argument, sharing the time allotted to the county prosecutor.
The Ohio Prosecuting Attorneys Association filed an amicus brief also supporting the prosecutor.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2024-0540 and 2024-0541).
Contacts
Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Daniel Van, dvan@prosecutor.cuyahogacounty.us
Representing Nicholas Musarra: John Martin, jmartin@cuyahogacounty.us
Representing the Ohio Attorney General’s Office: T. Elliot Gaiser, thomas.gaiser@ohioago.gov
Did SUV Qualify for Tax Exemption for Use in Timber Business?
Claugus Family Farm LP v. Patricia Harris, tax commissioner of Ohio, Case No. 2024-0895
Ohio Board of Tax Appeals
ISSUES:
- Was a sports utility vehicle purchased for use directly and primarily in the business of farming timber?
- Did the taxpayer satisfy the burden of proof required for an exemption from the sales and use tax for the SUV purchase?
BACKGROUND:
Claugus Family Farm is located in Center and Green townships in Monroe County. The property spans 1,100 acres across rugged terrain in the Appalachian Mountains. Within the property, forests fill 900 acres. The farm operates a business harvesting and selling commercial timber. Bruce Claugus is the managing general partner.
In September 2018, Claugus purchased a Mercedes-Benz SUV for $111,997. The farm didn’t pay sales tax on the purchase. The farm claimed the purchase was exempt because the vehicle would be directly used in the farming business. In February 2019, the state Department of Taxation sent a notice to Claugus that the farm owed $9,461 in taxes, interest, and penalties on the SUV purchase. Claugus petitioned for a reassessment. In March 2020, the department determined the SUV wasn’t exempt from tax because Claugus didn’t establish that the vehicle was directly and primarily used for farming.
To qualify for the exemption, the person using the vehicle must be engaged in farming as a business, the vehicle must be used directly for farming activities, and the farming activities must be the vehicle’s primary use.
Claugus appealed to the Board of Tax Appeals (BTA), which held a hearing in March 2022. In May 2024, the BTA upheld the department’s decision.
Claugus appealed to the Supreme Court of Ohio, which must hear this type of case.
SUV Ideally Suited for Farm Terrain and Work, Farm Argues
Claugus states that timber farming involves processes to monitor, identify, locate, and treat or remove parasites, diseases, and invasive species affecting the timber. The work also involves salvaging damaged timber and harvesting mature timber.
The BTA pointed to the farm’s lack of sales or income since 2011. However, the farm contends that it qualifies as a business. To be a business, the farm must be engaged in activities that have “the object of gain, benefit, or advantage.” Claugus notes “profit” isn’t in the language. As part of a long-term strategy, the farm explains that it is addressing invasive species with the goal of supporting sustainable growth and regrowth of high value trees over time. Trees take decades to grow before the timber can be harvested, the farm explains. It argues the BTA disregarded the fundamental nature of the timber industry and penalized the farm for its long-term strategy to harvest timber in a sustainable and ecologically responsible manner.
Claugus maintains that 95% of the SUV use is for timber operations. The farm terrain has steep inclines and waterways that make many areas difficult to access by foot. To remove invasive species, employees and contractors must use axes, chainsaws, other heavy equipment, and herbicides throughout the forests. The SUV is “necessary and uniquely suited” to reach the remote and rugged areas, the farm’s brief argues. A Jeep Wrangler couldn’t accommodate the equipment and materials, and a Chevrolet Silverado wasn’t able to handle the terrain, the brief states. Claugus argues the Mercedes-Benz SUV has the capabilities needed for hauling tools and equipment throughout the farm, for pulling heavy equipment to harvest the timber, and for maneuvering across the rugged terrain and waterways at the farm.
Timber Farm Not Currently in Business, Tax Commissioner Maintains
The tax commissioner counters that Claugus isn’t currently engaged in an active business of harvesting and selling timber. The commissioner notes that Claugus hasn’t reported sales, labor expenses, or income since 2011, and it hasn’t harvested timber since 2008. The farm hasn’t been actively in the business of farming timber for more than 15 years, the commissioner argues.
The commissioner also contends that the SUV isn’t directly used for timber farming. The work involves hauling people and items to parts of the farm where people exit the vehicle to monitor, identify, and mark trees; treat trees with herbicides; wood-chip fallen trees; mow grass; and maintain and fix equipment. However, the BTA and the Supreme Court have concluded that transporting equipment and people don’t qualify as direct farming activities, the tax commissioner maintains.
The testimony of Bruce Claugus that 95% of the vehicle’s use is devoted to farming also wasn’t persuasive, the tax commissioner argues. The commissioner notes that he offered no documentary evidence for the claim. That type of evidence is crucial in this case because the SUV could easily be used to drive on public roads, and for recreational or other purposes, the tax commissioner states. Claugus didn’t prove that the SUV was used primarily for timber farming in order to support the tax exemption, the tax commissioner concludes.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Claugus Family Farm LP: Damion Clifford, dclifford@arnlaw.com
Representing Patricia Harris, tax commissioner of Ohio, from the Ohio Attorney General’s Office: Raina Nahra Boulos, raina.nahraboulos@ohioago.gov
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