Banker's Choice, L.L.C. v. Cincinnati Zoning Bd. of Appeals , 2019 Ohio 4854 ( 2019 )

[Cite as Banker's Choice, L.L.C. v. Cincinnati Zoning Bd. of Appeals, 2019-Ohio-4854.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
BANKER’S CHOICE, LLC, : APPEAL NO. C-180578
TRIAL NO. A-1501964
and :
STOUGH DEVELOPMENT : O P I N I O N.
CORPORATION,
:
Plaintiffs-Appellees,
:
vs.
:
ZONING BOARD OF APPEALS OF
THE CITY OF CINCINNATI, :
and :
CITY OF CINCINNATI, :
Defendants-Appellants. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Reversed and Cause Remanded
Date of Judgment Entry on Appeal: November 27, 2019
Barrett & Weber and C. Francis Barrett, for Plaintiffs-Appellees,
Paula Boggs Muething, City Solicitor, Marion E. Haynes, III, Assistant City
Solicitor, and Kevin M. Tidd, Senior Assistant City Solicitor, for Defendants-
Appellants.
OHIO FIRST DISTRICT COURT OF APPEALS
Z A Y A S , Presiding Judge.
{¶1} This is the second appeal by defendants-appellants Zoning Board of
Appeals for the city of Cincinnati and the city of Cincinnati (collectively, “the ZBA”).
The ZBA now argues that the trial court did not follow this court’s remand
instructions set forth in Banker’s Choice, LLC v. Zoning Bd. of Appeals of City of
Cincinnati, 2018-Ohio-3030, 106 N.E.3d 1271 (1st Dist.) (“Banker’s Choice I”). For
the following reasons, we agree.
Facts and Procedural History
{¶2} Plaintiffs-appellees Banker’s Choice, LLC, and Stough Development
Corporation (collectively, “Banker’s Choice”) are Cincinnati property developers that
own a deteriorated property known as the Davis Furniture Building located at 1119-
1123 Main Street. As discussed in Banker’s Choice I, Banker’s Choice purchased the
Davis Furniture Building at a sheriff’s sale for $125,000 “to alleviate the ‘eyesore’ * *
* the building had become and to protect the economic well-being of their property
across the street.” Banker’s Choice I at ¶ 2.
{¶3} After the purchase, Banker’s Choice sought to demolish the building.
Under the Cincinnati zoning code, Banker’s Choice was required to seek a certificate
of appropriateness for demolition from the Historic Conservation Board. See
Cincinnati Municipal Code 1435-01-C and 1435-09-01. After holding three hearings
and reviewing extensive records submitted as part of their application, the Historic
Conservation Board denied Banker’s Choice’s request for a certificate.
{¶4} Banker’s Choice appealed to the Zoning Board of Appeals for the city
of Cincinnati (“Zoning Board”), which affirmed the Historic Conservation Board’s
determination. “The Zoning Board concluded that the preponderance of the
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OHIO FIRST DISTRICT COURT OF APPEALS
substantial, reliable, and probative evidence confirmed that Banker’s Choice had
failed to demonstrate that it would be deprived of ‘all economically viable use[s] of
the property * * * without approval’ of the certificate of appropriateness for
demolition.” Banker’s Choice I at ¶ 5. Banker’s Choice then appealed to the
Hamilton County Common Pleas Court, where the case was referred to a magistrate.
The parties presented additional evidence before the magistrate, who subsequently
vacated the decision of the Zoning Board and approved Banker’s Choice’s certificate
of appropriateness for demolition.
{¶5} The magistrate held that the Historic Conservation Board violated
Banker’s Choice’s due-process rights, “that the Davis Furniture Building was not a
‘historical asset’ or a ‘historic structure’ as those terms are defined in the municipal
code, and that three offers to purchase the building [from Banker’s Choice] were
‘illusory’ and ‘not bona fide offers.’ ” Banker’s Choice I at ¶ 6. The magistrate also
held the permissive standard by which the Historic Conservation Board may issue a
certificate of appropriateness for demolition “unconstitutional and contrary to Ohio
law.” Id. The magistrate found that Banker’s Choice had proven that it was not
economically viable to rehabilitate the Davis Furniture Building and ordered the
Historic Conservation Board to issue a certificate of appropriateness for its
demolition.
{¶6} The ZBA timely objected to the magistrate’s decision, and the trial
court held oral argument on those objections. Disagreeing with the magistrate’s
findings, the trial court concluded that Banker’s Choice was not prejudiced by the
administrative proceedings before the Historic Conservation Board, “that the Davis
Furniture Building was ‘part of a group of buildings that may be deemed to be of an
historically significant area and era,’ and that ‘at least one and perhaps all three’
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OHIO FIRST DISTRICT COURT OF APPEALS
offers to purchase the property were made ‘in good faith.’ ” Banker’s Choice I at ¶ 7.
The trial court did “not question nor decide the constitutionality of the [city]
ordinances that find the [Davis Furniture] Building to be historic assets.”
Additionally, “the trial court treated the ‘fact that no one purchased the building’ as
‘substantial evidence that any real or perceived economic hardship * * * was not
relieved’ by the purchase offers.” Id. The trial court also denied the ZBA’s request
for an injunction under R.C. 713.13. Ultimately, the trial court overruled the ZBA’s
objections, agreed in part with the magistrate’s conclusions, and ordered the
issuance of a certificate of appropriateness for the demolition.
{¶7} The ZBA then appealed to this court, arguing that the trial court erred
in vacating the decision of the Zoning Board and ordering the issuance of a certificate
of appropriateness for demolition. The ZBA argued, in part, that the trial court failed
to apply the requisite three-factor “economic hardship” test under Cincinnati
Municipal Code 1435-09-2(b) before ordering the approval of the certificate.
{¶8} Pursuant to Cincinnati Municipal Code 1435-09-2, the Zoning Board
may approve or approve with conditions an application for a Certificate of
Appropriateness when it finds either:
(a) That the property owner has demonstrated by credible evidence
that the proposal substantially conforms to the applicable conservation
guidelines; or
(b) That the property owner has demonstrated by credible evidence
that the property owner will suffer economic hardship if the certificate
of appropriateness is not approved.
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OHIO FIRST DISTRICT COURT OF APPEALS
Cincinnati Municipal Code 1435-09-2. In determining whether the property owner
has demonstrated an economic hardship, the Historic Conservation Board must
consider all of the following three factors:
(i) Will all economically viable use of the property be deprived without
approval of a Certificate of Appropriateness;
(ii) Will the reasonable investment-backed expectations of the
property owner be maintained without approval of a Certificate of
Appropriateness; and
(iii) Whether the economic hardship was created or exacerbated by the
property owner.
Id.
{¶9} Upon reviewing the trial court’s decision, this court agreed in part with
the ZBA. This court held that the trial court did not evaluate all three factors of the
three-factor economic hardship test prior to ordering the issuance of a certificate of
appropriateness for demolition. We found that the trial court improperly focused on
Banker’s Choice’s inability to sell the Davis Furniture Building, rather than “continue
on and to determine whether Banker’s Choice had been denied all economically
viable use of the Davis Furniture Building, whether it could have maintained its
reasonable investment-backed expectations, and whether it had created or
exacerbated its own economic hardship.” Banker’s Choice I at ¶ 15.
{¶10} This court determined that part of the problem stemmed from the trial
court’s rejection of factual findings that underpinned the magistrate’s decision. Id. at
¶ 17. For instance, the trial court rejected the magistrate’s finding that none of the
three offers to purchase the Davis Furniture Building from Banker’s Choice were
bona fide offers. But the magistrate’s determination on these offers-to-purchase
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OHIO FIRST DISTRICT COURT OF APPEALS
directly affected its analysis of the first “economic hardship” factor—whether
Banker’s Choice would be deprived of all economically viable use of the property. (It
found that because none of the offers were legitimate, the Davis Furniture Building
essentially could not be sold for sufficient compensation, and thus Banker’s Choice
would be deprived of economically viable use of the property.) So, while the trial
court later adopted the magistrate’s decision, its conflicting findings made it
impossible for this court to “read together” the magistrate’s decision and the trial
court’s judgment to determine whether the trial court correctly applied the law. Id.
{¶11} On remand, the trial court was instructed to apply “the proper
standard consistent with law and this opinion.” Id. at ¶ 20. The trial court instead
undertook to rerule on the ZBA’s objections to the magistrate’s decision. In a brief
subsequent entry, the trial court overruled all of the objections to the magistrate’s
decision and simply adopted the magistrate’s decision in its entirety—including all of
the factual and legal findings, some of which were previously rejected.
{¶12} The ZBA now appeals, asserting four assignments of error.
Legal Analysis
{¶13} In its first assignment of error, the ZBA argues that the trial court
violated the law-of-the-case doctrine when it adopted the magistrate’s decision in its
entirety. The ZBA contends that the adopted decision contains irreconcilable legal
findings that ultimately contradict the remand instructions from this court in
Banker’s Choice I. Banker’s Choice maintains that the trial court did follow the
mandate of this court on remand. Based upon the record before us, we agree with
the ZBA.
{¶14} The “law of the case” doctrine “provides that the decision of a
reviewing court in a case remains the law of that case on the legal questions involved
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OHIO FIRST DISTRICT COURT OF APPEALS
for all subsequent proceedings in the case at both the trial and reviewing levels.”
(Internal citations omitted.) Nolan v. Nolan, 11 Ohio St. 3d 1, 3, 462 N.E.2d 410
(1984). This doctrine is a rule of practice that “functions to compel trial courts to
follow the mandates of reviewing courts.” Id. Therefore, on remand, when the trial
court is presented with the same facts and issues involved in a prior appeal, it “is
bound to adhere to the appellate court’s determination of the applicable law.” Id.
“[T]he trial court is without authority to extend or vary the mandate given.” Id.,
citing Briggs v. Pennsylvania RR. Co., 334 U.S. 304, 68 S. Ct. 1039, 92 L. Ed. 1403
(1948).
{¶15} Here, the only basis for remand was the issue of whether Banker’s
Choice demonstrated by credible evidence that it will suffer economic hardship—
under the three-factor “economic hardship” test—if the certificate of appropriateness
for demolition of the Davis Furniture Building is not approved. No other legal issues
were remanded for the trial court to decide. That portion of the trial court’s
judgment denying the ZBA’s request for an injunction was affirmed. However,
rather than heed this instruction to address a limited issue on remand, the trial court
chose to adopt the magistrate’s decision in its entirety. Effectively, the trial court
vacated its previous judgment, including all of the factual and legal findings that
differed from the magistrate’s decision which had been upheld in Banker’s Choice I.
The trial court’s judgment now holds, inter alia, that the ZBA violated Banker’s
Choice’s due-process rights and that part of the Cincinnati zoning code is
unconstitutional.
{¶16} “[A]bsent extraordinary circumstances, such as an intervening
decision by [the Ohio Supreme Court], an inferior court has no discretion to
disregard the mandate of a superior court in a prior appeal in the same case.” Nolan,
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OHIO FIRST DISTRICT COURT OF APPEALS
11 Ohio St. 3d at 5, 462 N.E.2d 410. There were no extraordinary circumstances
present in this case. Consequently, the trial court did not have discretion to decline
to perform the “economic hardship” analysis. Furthermore, it did not have the
discretion to extend the mandate given by this court in adopting legal holdings from
the magistrate’s decision that it had previously rejected.
{¶17} “Upon remand from an appellate court, the lower court is required to
proceed from the point at which the error occurred.” (Internal quotations omitted.)
State ex rel. Douglas v. Burlew, 106 Ohio St. 3d 180, 2005-Ohio-4382, 833 N.E.2d
293, ¶ 11. Accordingly, the trial court should have started its analysis at the
application of the three-factor “economic hardship” test to the facts of this case. It
should not have proceeded to rerule on objections to the magistrate’s decision. The
trial court was not instructed to “start over” on remand. The remand simply
required the trial court to examine and apply the three-factor test.
{¶18} The trial court failed to follow the mandate of this court on remand,
and in doing so violated the law-of-the-case doctrine. This was error.
{¶19} The ZBA’s first assignment of error is sustained. Because the first
assignment of error is dispositive of this appeal, we decline to address the second,
third, and fourth assignments of error.
Conclusion
{¶20} The trial court’s judgment is reversed, and the cause is remanded for
further proceedings not inconsistent with this opinion. On remand, the trial court
must apply the three-factor “economic hardship” test under Cincinnati Municipal
Code 1435-09-2(b) to its factual findings and decide whether Banker’s Choice
demonstrated by credible evidence that it will suffer economic hardship if the
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OHIO FIRST DISTRICT COURT OF APPEALS
certificate of appropriateness for demolition of the Davis Furniture Building is not
approved.
Judgment accordingly.
MYERS and CROUSE, JJ., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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