Rid-All Exterminating Corp. v. Cuyahoga Metro. Hous. Auth. , 2012 Ohio 5074 ( 2012 )

[Cite as Rid-All Exterminating Corp. v. Cuyahoga Metro. Hous. Auth., 2012-Ohio-5074.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98174
RID-ALL EXTERMINATING CORP., ET AL.
PLAINTIFFS-APPELLEES
vs.
CUYAHOGA METROPOLITAN HOUSING
AUTHORITY
DEFENDANT-APPELLANT
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-774506
BEFORE: Stewart, P.J., Sweeney, J., and Rocco, J.
RELEASED AND JOURNALIZED: November 1, 2012
ATTORNEYS FOR APPELLANT
Kathryn M. Miley
Ernest L. Wilkerson, Jr.
Wilkerson & Associates Co., LPA
1422 Euclid Avenue, Suite 248
Cleveland, OH 44115
ATTORNEY FOR APPELLEE
Ann S. Vaughn
6140 West Creek Road, Suite 204
Independence, OH 44131
MELODY J. STEWART, P.J.:
{¶1} Plaintiff-appellee Rid-All Exterminating Corporation filed this action against
defendant-appellant Cuyahoga Metropolitan Housing Authority (“CMHA”), asserting
claims for breach of contract, promissory estoppel, defamation, fraud, and disparate
treatment. CMHA sought dismissal of all but the contract claim on grounds that it was
immune to suit. The court denied the motion to dismiss without opinion. This appeal is
taken pursuant to R.C. 2744.02(C) and the sole assignment of error is that the court erred
by denying the motion to dismiss.
I
{¶2} We use a de novo standard of review for motions to dismiss filed pursuant to
Civ.R. 12(B)(6), Greeley v. Miami Valley Maintenance Contrs., Inc., 49 Ohio St.3d 228,
551 N.E.2d 981 (1990), and accept all factual allegations of the complaint as true and
draw all reasonable inferences in favor of the nonmoving party. Byrd v. Faber, 57 Ohio
St.3d 56, 565 N.E.2d 584 (1991). A motion to dismiss for failure to state a claim upon
which relief can be granted can only be granted when it appears beyond doubt from the
complaint that the plaintiff can prove no set of facts entitling it to relief. LeRoy v. Allen,
Yurasek & Merklin, 114 Ohio St.3d 323, 2007-Ohio-3608, 872 N.E.2d 254, ¶ 14.
{¶3} There is a three-tiered analysis to determine whether a political subdivision is
entitled to immunity from civil liability pursuant to R.C. Chapter 2744. Hubbard v.
Canton City School Bd. of Edn., 97 Ohio St.3d 451, 2002-Ohio-6718, 780 N.E.2d 54, ¶
10. We first determine whether the entity claiming immunity is a political subdivision
and whether the alleged harm occurred in connection with a governmental or a propriety
function. If the political subdivision is entitled to immunity, we next consider whether
the plaintiff has shown that there are any exceptions to immunity under R.C. 2744.02(B).
If there are exceptions to immunity, we then consider whether the political subdivision
can assert one of the defenses to liability under R.C. 2744.03. Cater v. Cleveland, 83
Ohio St.3d 24, 28, 1998-Ohio-421, 697 N.E.2d 610.
II
{¶4} It is undisputed that CMHA is a political subdivision. R.C. 2744.01(F).
Although Rid-All contends that the function of contracting with exterminating companies
to perform extermination services is a proprietary function, the Ohio Supreme Court has
held that the “operation” of a public housing authority is the performance of a
governmental function. Moore v. Lorain Metro. Hous. Auth., 121 Ohio St.3d 455,
2009-Ohio-1250, 905 N.E.2d 606, syllabus. Day-to-day maintenance of public housing
facilities, including the extermination of insects or pests, relates to the “operation” of a
housing facility and so constitutes a governmental function that qualifies for immunity
under R.C. 2744.02(A)(1).
{¶5} In Hortman v. Miamisburg, 110 Ohio St.3d 194, 199, 2006-Ohio-4251, 852
N.E.2d 716, the syllabus states: “The doctrines of equitable estoppel and promissory
estoppel are inapplicable against a political subdivision when the political subdivision is
engaged in a governmental function.” Having found that the employment of
extermination services falls within the operation of a public housing authority as a
governmental function, Hortman makes the city immune to any claim of promissory
estoppel. CMHA was entitled to immunity on the promissory estoppel claim contained
in the second count of the complaint and the court erred by refusing to dismiss that claim.
III
{¶6} In the third count of its complaint, Rid-All alleged that CMHA defamed
Rid-All’s reputation by maligning it in emails sent to CMHA residents. Rid-All did not,
however, provide the substance of the alleged defamatory statements.
{¶7} As previously noted, a public housing authority’s use of extermination
services relates to a governmental function. None of the exceptions to governmental
immunity apply to defamation claims stemming from the performance of a governmental
function, regardless of whether the defamation is alleged to be intentional or negligent.
See Hubbard v. Cleveland Metro. School Dist. Bd. of Edn., 195 Ohio App.3d 708,
2011-Ohio-5398, 961 N.E.2d 722 (8th Dist.); Price v. Austintown Local School Dist. Bd.
of Edn., 178 Ohio App.3d 256, 2008-Ohio-4514, 897 N.E.2d 700, ¶ 32 (7th Dist.). The
court erred by refusing to dismiss the defamation claim contained in the third count of the
complaint because CMHA was immune.
IV
{¶8} The fraud claim contained in the fourth count of the complaint alleged that
CMHA failed to provide Rid-All with “monthly periodicals” that would detail how much
of its yearly contract amount was expended and how much it had available under each
contract, thus allowing CMHA to “shortchange” it on the contract price.
{¶9} The court erred by denying CMHA’s motion to dismiss the fraud claim
because “there are no exceptions to immunity for the intentional tort[ ] of fraud * * *.”
Wilson v. Stark Cty. Dept. of Human Servs., 70 Ohio St.3d 450, 452, 1994-Ohio-394, 639
N.E.2d 105 (1994); see also Charles Gruenspan Co., LPA v. Thompson, 8th Dist. No.
80748, 2003-Ohio-3641, ¶ 48 (“As a general principle, political subdivisions are not
liable in damages unless a specific exception to that immunity exists. This applies
particularly to intentional tort claims of fraud and intentional infliction of emotional
distress.”).
{¶10} Rid-All’s citation to Sampson v. Cuyahoga Metro. Hous. Auth., 188 Ohio
App.3d 250, 2010-Ohio-3415, 935 N.E.2d 98, aff’d, 131 Ohio St.3d 418, 2012-Ohio-570,
966 N.E.2d 247, as authority for the proposition that an exception exists to immunity for
fraud claims is not on point. Sampson addressed the issue whether R.C. 2744.09(B),
containing exceptions to political subdivision immunity from tort liability, applies in a
civil action for damages filed by an employee who alleges that his political subdivision
employer committed an intentional tort against him and engaged in negligent conduct.
Rid-All was not a CMHA employee, so the law set forth in Sampson does not apply.
V
{¶11} The fifth count of the complaint sets forth two claims of disparate treatment:
(1) that CMHA intentionally refused to provide Rid-All with an accounting of shortages
paid for services and (2) that as a minority business enterprise, it was entitled to be paid
on a 15-day-net period as opposed to other contractors who were paid on a 30-day-net
period, and that CMHA’s failure to pay within the 15-day period meant that nonminority
business enterprises “received systematically better treatment” than Rid-All received.
{¶12} Ordinarily, political subdivisions lose their immunity from “[c]ivil claims
based upon alleged violations of the constitution or statutes of the United States, except
that the provisions of section 2744.07 of the Revised Code shall apply to such claims or
related civil actions.” R.C. 2744.09(E). Rid-All’s claim of “disparate treatment” is that
its status as a minority business enterprise “is a motivating factor in [CMHA’s] treatment
toward [Rid-All].” Nowhere in the complaint does Rid-All state what statutes or
constitutional provisions were allegedly violated by CMHA. On this basis alone, Rid-All
cannot invoke R.C. 2744.09(E) and CMHA’s immunity remains intact.
{¶13} Rid-All argues on appeal that its reference to “disparate treatment” was an
attempt to claim that CMHA engaged in racial discrimination under the Equal Protection
Clause to the Fourteenth Amendment to the United States Constitution. The Equal
Protection Clause requires that all similarly situated individuals be treated in a similar
manner. Discount Cellular, Inc. v. Pub. Util. Comm. of Ohio, 112 Ohio St.3d 360,
2007-Ohio-53, 859 N.E.2d 957, at ¶ 31, citing McCrone v. Bank One Corp., 107 Ohio
St.3d 272, 2005-Ohio-6505, 839 N.E.2d 1, at ¶ 6.
{¶14} Rid-All did not allege that it was similarly situated to other exterminating
contractors working for CMHA. To the contrary, it alleged that as a minority business
enterprise it was entitled to be treated more favorably than other contractors and should
have been paid within 15 days of submitting its invoices instead of the 30 days used for
nonminority business enterprises. This is not a discrimination claim based on unequal
treatment. It is a contract claim based upon CMHA’s alleged promise to pay minority
business enterprise invoices more quickly than invoices submitted by nonminority
business enterprises.
{¶15} It follows that the exception to immunity set forth in R.C. 2744.09(E) does
not apply. The court erred by failing to dismiss the fifth count of the complaint.
VI
{¶16} In conclusion, we find that the court erred by denying CMHA’s motion to
dismiss counts two through five of the complaint because CMHA was entitled to
immunity on those claims and there were no exceptions to immunity. The assigned error
is sustained.
{¶17} This cause is reversed and remanded for proceedings consistent with this
opinion.
It is ordered that appellant recover of appellee its costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the Cuyahoga County Court of
Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
MELODY J. STEWART, PRESIDING JUDGE
JAMES J. SWEENEY, J., and
KENNETH A. ROCCO, J., CONCUR