State Ex Rel. Arcadia Acres v. Ohio Department of Job & Family Services , 123 Ohio St. 3d 54 ( 2009 )

[Cite as State ex rel. Arcadia Acres v. Ohio Dept. of Job & Family Servs., 123 Ohio St. 3d 54,
2009-Ohio-4176.]
THE STATE EX REL. ARCADIA ACRES ET AL., APPELLANTS, v. OHIO
DEPARTMENT OF JOB & FAMILY SERVICES ET AL., APPELLEES.
[Cite as State ex rel. Arcadia Acres v. Ohio Dept. of Job & Family Servs.,
123 Ohio St. 3d 54, 2009-Ohio-4176.]
Res judicata — Mandamus barred by prior declaratory-judgment action —
Dismissal of prior action had been upheld on appeal on grounds of failure
to state a claim for which relief could be granted — Appellate procedure
— Notice of appeal — Failure to attach copy of journal entry as required
by S.Ct.Prac.R. II(2)(B)(2) not jurisdictional flaw.
(No. 2009-0051 — Submitted May 19, 2009 — Decided August 26, 2009.)
APPEAL from the Court of Appeals for Franklin County, No. 08AP-229,
2008-Ohio-6127.
__________________
Per Curiam.
{¶ 1} Appellants, Arcadia Acres and Spring Meadows Care Center (the
“nursing homes”), appeal as of right from a decision of the court of appeals. In
that decision, the court dismissed the nursing homes’ original action for
mandamus relief on the grounds that the mandamus claim was barred by res
judicata. Specifically, the nursing homes had previously brought a declaratory-
judgment action for the same relief against the Ohio Department of Job and
Family Services (“ODJFS”), but that action was dismissed. Of particular
importance was the reason for dismissal: although the trial court originally
dismissed the declaratory-judgment case for lack of jurisdiction, the court of
appeals later predicated the dismissal on a failure to state a claim.
SUPREME COURT OF OHIO
{¶ 2} Before this court, the nursing homes argue that the court of appeals
unfairly and unlawfully applied the doctrine of res judicata when it dismissed the
mandamus complaint. We disagree, and we therefore affirm.
Facts
{¶ 3} Because this case raises an issue of res judicata, we will need to
refer to two cases: the present case and the previous case that bars the present
case. We will refer to the previous case as “the declaratory-judgment case” or
“the declaratory-judgment appeal,” and we will refer to the present case as “the
mandamus case.”
Declaratory-judgment Case
{¶ 4} On March 7, 2006, the nursing homes filed their “complaint for
declaratory relief” in the Franklin County Court of Common Pleas. By decision
dated June 22, 2006, that court dismissed the complaint on the grounds that an
action for declaratory judgment was not a proper procedural vehicle for the claim
advanced by the nursing homes. Applying the Tenth District’s decisions in
Morning View Care Ctr.–Fulton v. Ohio Dept. of Job & Family Servs., 158 Ohio
App.3d 689, 2004-Ohio-5436, 821 N.E.2d 1046, and Ohio Academy of Nursing
Homes v. Ohio Dept. of Job & Family Servs., 164 Ohio App. 3d 808, 2005-Ohio-
6888, 844 N.E.2d 384, the trial court found that an action for mandamus relief
constituted the sole vehicle for the nursing homes’ claims inasmuch as the nursing
homes sought to challenge a discretionary decision from which there was no right
of administrative appeal.1 In dismissing, the trial court specifically concluded
that it “lack[ed] subject matter jurisdiction to hear plaintiffs’ claims” for
declaratory judgment. The nursing homes appealed.
1. Subsequently, this court adopted the Tenth District’s reasoning in syllabus when it affirmed the
appellate court’s decision in the latter case. Ohio Academy of Nursing Homes v. Ohio Dept. of Job
& Family Servs., 114 Ohio St. 3d 14, 2007-Ohio-2620, 867 N.E.2d 400, syllabus (“When a state
agency’s decision is discretionary and by statute not subject to appeal, an action in mandamus is
the sole avenue of relief available to a party challenging an agency’s decision”).
2
January Term, 2009
{¶ 5} On December 20, 2007, the Tenth District affirmed the dismissal.
Arcadia Acres v. Ohio Dept. of Job & Family Servs., Franklin App. No. 06AP-
738, 2007-Ohio-6853. The Tenth District agreed that mandamus constituted the
sole procedural vehicle given the nature of the nursing homes’ claim. Arcadia
Acres, ¶ 8–10. But the appellate court upheld the dismissal on a different basis
from that relied upon by the trial court: the Tenth District held that dismissal was
proper because the declaratory judgment complaint “failed to state a viable claim
for relief,” and the court of appeals specifically declined to adopt the theory that
the trial court had lacked subject-matter jurisdiction. Id., ¶ 10.
{¶ 6} Additionally, the Tenth District declined to remand the case for the
purpose of allowing the nursing homes to amend their complaint. The Tenth
District noted that the nursing homes had “filed their complaint over three months
after this court held that mandamus was the only vehicle for relief” in the Ohio
Academy of Nursing Homes case but that “appellants neither pled mandamus in
their complaint nor requested leave to amend their complaint to assert
mandamus.” Id., 2007-Ohio-6853, ¶ 11. The appellate court stated its view that
the trial court’s final judgment invoked res judicata as a bar to any remedy that
the nursing homes could have demanded but did not demand in their action and
that the failure to plead mandamus at the trial court level “precludes us from
remanding this matter to the trial court so that appellants can assert a new claim.”
Id. Instead of remanding, the Tenth District simply affirmed the dismissal of the
declaratory-judgment case (albeit for failure to state a claim rather than on the
jurisdictional ground).
{¶ 7} After the court of appeals issued its decision, ODJFS moved for
reconsideration. In that motion, ODJFS apparently asked the Tenth District to
change the grounds for dismissal from failure to state a claim to lack of
jurisdiction. The nursing homes opposed that motion, and the court of appeals
denied the motion on February 5, 2008.
3
SUPREME COURT OF OHIO
Mandamus Case
{¶ 8} On March 21, 2008, the nursing homes filed their “Petition for
Peremptory and/or Alternative Writ of Mandamus” in the court of appeals, and
ODJFS moved to dismiss. Except for pleading the claim in mandamus instead of
as an action for declaratory judgment, the complaint is substantially the same as
that in the previous case. For example, both complain of the reimbursement rates
set by ODJFS for fiscal year 2005, and both invoke R.C. 5111.21(A) as entitling
the nursing homes to higher rates as to that year.
{¶ 9} The Tenth District referred the complaint to a magistrate, who
recommended dismissal on the grounds that the dismissal of the previous case
constituted a full res judicata defense to the present case. The nursing homes filed
objections, arguing that res judicata did not bar the present case. On November
25, 2008, the Tenth District issued its decision: the court of appeals disagreed
with the nursing homes, overruled the objections, and dismissed the case. The
matter is now before us on the nursing homes’ appeal as of right.
Analysis
Defect in the notice of appeal: not jurisdictional
{¶ 10} At the threshold of the merits of this case lies a potential
procedural obstacle. As noted, this case constitutes an appeal as of right in an
original action brought in the Tenth District Court of Appeals. S.Ct.Prac.R.
II(2)(B)(2) states that in such appeals, the “appellant shall attach to the notice of
appeal a date-stamped copy of the court of appeals judgment entry that is being
appealed. For purposes of this rule, a date-stamped copy of the court of appeals
judgment entry shall mean a copy bearing the file stamp of the clerk of the court
of appeals and reflecting the date the court of appeals filed its judgment entry for
journalization with its clerk under App.R. 22(E).” The rule goes on to indicate
that the opinion of the appellate court may be attached when the opinion “serves
as [the] judgment entry.”
4
January Term, 2009
{¶ 11} In this case, the Tenth District issued two documents in deciding
the case: an opinion and a judgment entry. The nursing homes attached a date-
stamped copy of the opinion rather than the judgment entry to the notice of
appeal. Accordingly, the nursing homes violated the rule, and the question arises
whether that violation is jurisdictional: if it is jurisdictional, the appeal must be
dismissed; if not, the appeal may proceed.
{¶ 12} We hold that the defect does not deprive the court of jurisdiction.
The pertinent legal principle is set forth at App.R. 3(A): other than a failure to
timely file the notice of appeal, a procedural defect “does not affect the validity of
the appeal, but is ground only for such action as the court of appeals deems
appropriate, which may include dismissal of the appeal.” Accord Woods v. Civ.
Serv. Comm. (1984), 7 Ohio App. 3d 304, 306, 7 OBR 387, 455 N.E.2d 709
(naming wrong party as appellee in contravention of R.C. 2505.05 was not a
jurisdictional defect inasmuch as appeal requirements should be “liberally
construed so as not to deny an appeal on technical grounds”). Of critical
importance is the fact that the defect in the present case does not involve an
administrative appeal: administrative appeals are authorized by statutes that set
forth the conditions for the exercise of judicial authority, and those conditions call
for strict compliance. See, e.g., Polaris Amphitheater Concerts, Inc. v. Delaware
Cty. Bd. of Revision, 118 Ohio St. 3d 330, 2008-Ohio-2454, 889 N.E.2d 103, ¶ 13,
14. By contrast, the application of the court rule in the present case does not
implicate jurisdictional limitations.
{¶ 13} In so holding, we do not minimize every litigant’s duty to comply
with the practice rules of this court. In a given case, noncompliance could
significantly impair the procedural efficiency of the appeal and cause prejudice to
other parties that would justify sanctions. In the present case, however, we do not
see prejudice to a party or any procedural disruption, nor has ODJFS requested
5
SUPREME COURT OF OHIO
any sanction for violation of the rule.2 Accordingly, we proceed to consider the
merits of the appeal.
Because the ground for dismissing the declaratory-judgment case was failure to
state a claim, res judicata barred the present case
{¶ 14} Civ.R. 41(B) states the policy of the law with regard to involuntary
dismissals: only dismissals on jurisdictional grounds — either lack of subject-
matter jurisdiction or lack of personal jurisdiction over the defendant — raise a
presumption of no prejudice to reasserting the same claim through a second
complaint. Civ.R. 41(B)(4). Other involuntary dismissals constitute
“adjudication[s] on the merits” unless the dismissal order specifies the contrary.
{¶ 15} It follows that a dismissal grounded on a complaint’s “failure to
state a claim upon which relief can be granted” constitutes a judgment that is an
“adjudication on the merits.” As a result, res judicata bars refiling the claim. See
Hughes v. Calabrese, 95 Ohio St. 3d 334, 2002-Ohio-2217, 767 N.E.2d 725, ¶ 9,
12, 13 (this court’s earlier dismissal of a prohibition complaint barred a
successive complaint brought in an appellate court). Because the appellate court’s
dismissal of the previous action invokes res judicata, it “ ‘ “bars all subsequent
actions based upon any claim arising out of the transaction or occurrence that was
the subject matter of the previous action.” ’ ” Id. at ¶ 12, quoting Kelm v. Kelm
(2001), 92 Ohio St. 3d 223, 227, 749 N.E.2d 299, quoting Grava v. Parkman Twp.
(1995), 73 Ohio St. 3d 379, 653 N.E.2d 226, syllabus. Accordingly, the Tenth
District acted correctly when it dismissed the instant case.
{¶ 16} Against these basic precepts, the nursing homes first suggest that
an element of unfairness haunts the present case. In various ways, the nursing
2. The staff notes regarding S.Ct.Prac.R. II(2)(B)(2) state that the purpose of the rule is to avoid
confusion as to which document – the opinion or the judgment entry – begins the running of the
appeal period. See Staff Commentary to S.Ct.Prac.R. II: July 1, 2004 amendment, 101 Ohio
St.3d XCIII. In this case the judgment entry was filed one day after the opinion, and the notice of
appeal was timely filed as to either date.
6
January Term, 2009
homes maintain that confusion clouded the proper cause of action to plead as a
vehicle for asserting their claim. But our decision in Grava, 73 Ohio St. 3d 379,
653 N.E.2d 226, answers those contentions. In that case, we rejected an
unfairness argument by observing that the litigant “had a full and fair opportunity
to present his case.” Id. at 383.
{¶ 17} Likewise, the nursing homes had a full and fair opportunity to
plead mandamus when they brought the declaratory-judgment case. At the time
the nursing homes filed the declaratory-judgment complaint, no fewer than two
decisions from the court of appeals had held that mandamus, not declaratory
judgment, constituted the proper cause of action in such a case. Morning View
Care Ctr.–Fulton v. Ohio Dept. of Job & Family Servs., 158 Ohio App. 3d 689,
2004-Ohio-5436, 821 N.E.2d 1046, ¶ 17, and Ohio Academy of Nursing Homes v.
Ohio Dept. of Job & Family Servs., 164 Ohio App. 3d 808, 2005-Ohio-6888, 844
N.E.2d 384, ¶ 11. To be sure, this court’s affirmance of the Tenth District’s legal
ruling on this point in Ohio Academy of Nursing Homes, 114 Ohio St. 3d 14,
2007-Ohio-2620, 867 N.E.2d 400, syllabus, was issued after the filing of the
declaratory-judgment complaint. But nothing prevented the nursing homes from
adopting the cautious approach of pleading two alternative causes of action.
Res judicata bars the review of alleged legal errors in the dismissal of the
declaratory-judgment case
{¶ 18} The gravamen of the nursing homes’ argument is that the court of
appeals erred in the previous case. The alleged errors are twofold: the dismissal
in the declaratory-judgment case should have been jurisdictional, and the court of
appeals in the declaratory-judgment case should have remanded to permit a new
complaint to be filed. Because these alleged errors occurred in the previous case,
each is barred by res judicata. Quite simply, the means for remedying those errors
lay in appeal in the earlier case, not through a collateral filing. Cf. Ohio Pyro,
Inc. v. Ohio Dept. of Commerce, 115 Ohio St. 3d 375, 2007-Ohio-5024, 875
7
SUPREME COURT OF OHIO
N.E.2d 550, ¶ 34 (acknowledging that “[r]es judicata principles can apply to
prevent parties and those in privity with them from modifying or collaterally
attacking a previous judgment”).
{¶ 19} The nursing homes now advance an additional argument: because
the trial court in the declaratory-judgment case allegedly lacked jurisdiction, the
court of appeals in the declaratory-judgment case had no jurisdiction to dismiss on
any substantive basis. But res judicata applies with equal force to the
jurisdictional issue because the nursing homes were parties in the declaratory-
judgment case and because the court of appeals in that case specifically
determined that the trial court did possess jurisdiction even though the complaint
failed to state a claim. See Citicasters Co. v. Stop 26–Riverbend, Inc., 147 Ohio
App.3d 531, 2002-Ohio-2286, 771 N.E.2d 317, ¶ 33, quoting Squires v. Squires
(1983), 12 Ohio App. 3d 138, 141, 12 OBR 460, 468 N.E.2d 73 (“ ‘once [a]
jurisdictional issue has been fully litigated and determined by a court that has
authority to pass upon the issues, said determination is res judicata in a collateral
action and can only be attacked directly by appeal’ ”), cited with approval in
Smith v. Bradshaw, 109 Ohio St. 3d 50, 2006-Ohio-1829, 845 N.E.2d 516, ¶ 15.
{¶ 20} The nursing homes also contend that the court of appeals erred in
its application of the law-of-the-case doctrine below. We disagree. In the
discussion of the doctrine, the appellate court did nothing more than recognize
that its decision in the declaratory-judgment case superseded the trial court
decision as to any point where the two decisions were incompatible. There is no
error in that conclusion.
Judgment affirmed.
MOYER, C.J., and LUNDBERG STRATTON, O’CONNOR, O’DONNELL, and
CUPP, JJ., concur.
PFEIFER and LANZINGER, JJ., concur in judgment only.
__________________
8
January Term, 2009
Geoffrey E. Webster and J. Randall Richards, for appellants.
Richard Cordray, Attorney General, and Rebecca L. Thomas, Senior
Assistant Attorney General, for appellee.
______________________
9