State ex rel. Maher v. Akron , 2018 Ohio 4310 ( 2018 )

[Cite as State ex rel. Maher v. Akron, 2018-Ohio-4310.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
STATE OF OHIO, ex rel. C.A. No. 28761
PATRICIA MAHER, et al.
Appellants
APPEAL FROM JUDGMENT
v. ENTERED IN THE
COURT OF COMMON PLEAS
THE CITY OF AKRON, OHIO COUNTY OF SUMMIT, OHIO
CASE No. CV-2016-04-2039
Appellee
DECISION AND JOURNAL ENTRY
Dated: October 24, 2018
CALLAHAN, Judge.
{¶1} Patricia Maher, Rebecca Johnson, and Eugene and Kimberly Cherry
(“Appellants”)1 appeal from a decision of the Summit County Common Pleas Court that granted
judgment on the pleadings to the City of Akron (“the City”). This Court affirms.
I.
{¶2} In 2016, Ms. Maher and Ms. Johnson filed a complaint against the City listing
causes of action for (1) inverse condemnation, (2) breach of contract, and (3) fraud in the
inducement. They later filed an amended complaint adding Margaret Graham, Dena Mayhorn,
Eugene and Kimberly Cherry, and Richard and Beryl Curling as plaintiffs. Because the trial
court granted judgment on the pleadings, this Court accepts the facts contained in the amended
complaint as true. See Pinkerton v. Thompson, 174 Ohio App.3d 229, 2007-Ohio-6546, ¶ 18 (9th
1
Margaret Graham, Dena Mayhorn, and Richard and Beryl Curling were also plaintiffs below,
but have not appealed.
2
Dist.) (when reviewing a motion for judgment on the pleadings, the factual allegations in the
complaint are presumed true).
{¶3} In 2004, the City had filed the “‘Hickory Corridor/Cascade Locks Urban Renewal
Area Eligibility Report and Urban Renewal Plan’” (“the Hickory Corridor Plan”). The City also
had plans to construct a tunnel for handling sewer overflows during heavy rains and snow melts.
Appellants bought their respective properties within the Hickory Corridor Plan area in 2008. In
2013, the City held a neighborhood meeting during which it informed the residents of the
Hickory Corridor Plan area about the tunnel project. In 2015, the City passed legislation
requesting proposals for construction of the tunnel project. The City established a perimeter zone
within the Hickory Corridor Plan area and acquired the properties within that zone that it
determined would be impacted by the tunnel project. Appellants’ properties were not within that
zone.
{¶4} Construction of the tunnel included the removal of trees and vegetation and the
use of bright lights at night. In addition, there was excessive noise and vibrations from the
construction activity that rocked Ms. Maher’s property. The Ohio and Erie Canal Towpath was
relocated and now runs past Appellants’ homes. Appellants claim that the City changed the
nature of the Hickory Corridor Plan area, caused their property values to be diminished, and
diminished their quiet enjoyment of their properties.
{¶5} The City answered, filed a counterclaim against Ms. Johnson for breach of
contract, and moved for judgment on the pleadings on all of Appellants’ claims. The trial court
granted the City’s motion for judgment on the pleadings. The court certified that there was no
just reason to delay an appeal of its order. It further stayed the City’s counterclaim against Ms.
Johnson pending appeal.
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{¶6} Appellants raise two assignments of error.
II.
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ERRED IN DETERMINING THAT APPELLANTS
FAILED TO ALLEGE A VALID REGULATORY TAKINGS CLAIM UNDER
THE U.S. AND OHIO CONSTITUTIONS AND THEREBY HOLDING THAT
APPELLANTS’ CLAIM FOR INVERSE CONDEMNATION FAILS TO
STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED.
{¶7} In their first assignment of error, Appellants argue that the trial court erred in
granting judgment on the pleadings in regard to their inverse condemnation claim. This Court
disagrees.
{¶8} “This Court applies a de novo standard of review when reviewing a trial court’s
ruling on a motion for judgment on the pleadings.” Cashland Fin. Servs., Inc. v. Hoyt, 9th Dist.
Lorain No. 12CA010232, 2013-Ohio-3663, ¶ 7. Such a motion is “akin to a delayed motion to
dismiss for failure to state a claim.” Id. However, a motion for judgment on the pleadings is
“‘specifically for resolving questions of law.’” Whaley v. Franklin Cty. Bd. of Commrs., 92 Ohio
St.3d 574, 581 (2001), quoting State ex rel. Midwest Pride IV, Inc. v. Pontious, 75 Ohio St.3d
565, 570 (1996). “Under Civ.R. 12(C), dismissal is appropriate where a court (1) construes the
material allegations in the complaint, with all reasonable inferences to be drawn therefrom, in
favor of the nonmoving party as true, and (2) finds beyond a doubt, that the plaintiff can prove
no set of facts in support of his claim that would entitle him to relief.” Pontious at 570. In
deciding a motion for judgment on the pleadings, this Court reviews only the “material
allegations in the pleadings,” Hoyt at ¶ 7, and any attachments thereto. See Padula v. Wagner,
9th Dist. Summit No. 27509, 2015-Ohio-2374, ¶ 13; Civ.R. 10(C).
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{¶9} “‘Mandamus is the appropriate action to compel public authorities to institute
appropriation proceedings where an involuntary taking of private property is alleged.’” State ex
rel. Gilbert v. Cincinnati, 125 Ohio St.3d 385, 2010-Ohio-1473, ¶ 14, quoting State ex rel.
Shemo v. Mayfield Hts., 95 Ohio St.3d 59, 63 (2002). Inverse condemnation is “‘a cause of
action against the government to recover the value of property taken by the government without
formal exercise of the power of eminent domain.’” State ex rel. Doner v. Zody, 130 Ohio St.3d
446, 2011-Ohio-6117, ¶ 62, quoting Moden v. United States, 404 F.3d 1335, 1342
(Fed.Cir.2005). To be entitled to a writ of mandamus for inverse condemnation, an owner “must
establish a clear legal right to compel the city to commence appropriation, a corresponding legal
duty on the part of the city to institute that action, and the lack of an adequate remedy * * * in the
ordinary course of law.” Gilbert at ¶ 15.
{¶10} The Ohio Constitution requires a property owner be compensated when “private
property shall be taken for public use.” Ohio Constitution, Article I, Section 19. “‘Two main
theories exist for establishing a taking, one based on land-use or zoning regulations and the
other, on physical invasions by the government.’” State ex rel. Lillis v. Cty. of Summit, 9th Dist.
Summit No. 28307, 2017-Ohio-1539, ¶ 14, quoting State ex rel. River City Capital v. Bd. of Cty.
Commrs., 12th Dist. Clermont No. CA2010-07-051, 2011-Ohio-4039, ¶ 25. Further, a regulatory
taking can be either a total or partial deprivation of the economically beneficial use of the
property. See State ex rel. R.T.G., Inc. v. State, 98 Ohio St.3d 1, 2002-Ohio-6716, ¶ 35, 37.
Here, Appellants concede that there has not been a physical taking of their property. Instead,
Appellants claim that they pled facts asserting a partial regulatory taking.
{¶11} A finding of a partial regulatory taking requires the application of the standard set
forth in Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978). State ex rel. Shelly
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Materials v. Clark Cty. Bd. of Commrs., 115 Ohio St.3d 337, 2007-Ohio-5022, ¶ 18. Courts
perform an “ad hoc, factual inquiry” of
the following three factors to determine whether a regulatory taking occurred in
cases in which there is no physical invasion, and the regulation deprives the
property of less than 100 percent of its economically viable use: (1) the economic
impact of the regulation on the claimant, (2) the extent to which the regulation has
interfered with distinct investment-backed expectations, and (3) the character of
the governmental action.
Id. at ¶ 19, citing Penn Cent. at 124. Implicit in a regulatory taking action is the existence of a
governmental regulation of private property. See Shelly Materials at ¶ 17; State ex rel. Duncan
v. Village of Middlefield, 11th Dist. Lake No. 2005-L-140, 2008-Ohio-1891, ¶ 40.
{¶12} Appellants argue that “[t]he very act of planning, adopting legislation authorizing
the construction of the Tunnel Project and proceeding with the construction * * * constitute the
regulatory action upon which [they] base their inverse condemnation claims.” The City argues
that Appellants failed to allege that the City adopted an ordinance or regulation that sought to
regulate how Appellants used their property.
{¶13} “[R]egulation” is defined as “[t]he act or process of controlling by rule or
restriction” or “[a] rule or order, having legal force.” Black’s Law Dictionary 1311 (8th
Ed.1999). Thus, governmental regulation involves actions by a governmental entity taken
pursuant to a rule or legislation. “In a proper ‘regulatory taking’ action, the crux of the
landowner’s claim is that the municipality’s enforcement of a valid law or regulation has harmed
the value of his land by restricting the manner in which the land can be used.” Duncan at ¶ 40.
Appellants’ amended complaint fails to identify the legislation that the City was enforcing or
acting pursuant to when it built the tunnel. Instead, Appellants merely alleged that the City was
“planning” the construction of the tunnel.
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{¶14} Appellants’ argument that the City “adopt[ed] legislation authorizing the
construction of the Tunnel Project” is contrary to the allegations contained in the amended
complaint. Instead, Appellants pled that “[o]n March 2, 2015[,] Akron City Council passed
legislation permitting a request for proposals to be issued from companies to build the Tunnel
Project, a large combined sewer overflow tunnel[.]” This was the only allegation in the amended
complaint alluding to a governmental regulation. Based upon Appellants’ description of the
legislation in the amended complaint, there is no explicit allegation or reasonable inference that
this legislation authorized the construction of the tunnel and regulated Appellants’ land use in
any manner. Accordingly, this material allegation regarding the existence of a governmental
regulation of land fails to support a partial regulatory taking in this matter. Further, Appellants
did not plead that any other legislation regulated Appellants’ land use in any way. Because
Appellants have failed to plead a governmental regulation impacting their land use in this case, it
is unnecessary to further examine whether Appellants sufficiently pled the Penn Central factors
for a partial regulatory taking in an inverse condemnation claim.
{¶15} Accepting the material allegations as true and making all reasonable inferences in
favor of Appellants, this Court concludes that Appellants could prove no set of facts in support
of their inverse condemnation claim based upon a partial regulatory taking that would entitle
them to relief. Accordingly, the trial court did not err in granting the City’s motion for judgment
on the pleadings.
{¶16} The first assignment of error is overruled.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN HOLDING THAT APPELLANTS EACH
FAILED TO ALLEGE A VALID BREACH OF CONTRACT UNDER OHIO
LAW.
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{¶17} In their second assignment of error, Appellants argue that the trial court erred in
granting judgment on the pleadings in regard to their breach of contract claim. This Court
disagrees.
{¶18} As pertinent to our review of this assignment of error, the applicable standard of
review for a motion for judgment on the pleadings is set forth under the first assignment of error.
“To prove a breach of contract claim[,] a plaintiff must demonstrate by a preponderance of the
evidence that: (1) a contract existed, (2) the plaintiff fulfilled [her] obligations, (3) the defendant
failed to fulfill its obligations, and (4) damages resulted from this failure.” (Quotation marks and
citations omitted.) Hoyt, 2013-Ohio-3663, at ¶ 8.
{¶19} Inherent in every contract is a duty of good faith and fair dealing by each of the
parties in performing and enforcing the contract. Krukrubo v. Fifth Third Bank, 10th Dist.
Franklin No. 07AP-270, 2007-Ohio-7007, ¶ 18, quoting Restatement of Law 2d, Contracts
(1981), Section 205. Allegations of a breach of duty of good faith and fair dealing are subsumed
into a breach of contract claim. Krukrubo at ¶ 19. Thus, “there is no independent cause of action
for breach of the implied duty of good faith and fair dealing apart from the breach of the
underlying contract.” Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15,
¶ 44; Padula, 2015-Ohio-2374, at ¶ 53.
{¶20} Appellants pled that they each entered into a contract to acquire their respective
lots from the City. Appellants also asserted that they relied upon the terms and conditions
contained in the recorded Hickory Corridor Plan when deciding to purchase their lots from the
City. Appellants alleged that the City knew at the time they entered into their contracts that the
tunnel project would be located in the Hickory Corridor, but failed to disclose this information to
Appellants resulting in damages. Appellants argued that they pled facts establishing that the City
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breached the contracts by 1) “with[olding] material information that induced each Resident to
acquire property within the Hickory Corridor Plan[,]” 2) “proceeding with the Tunnel Project[,]”
and 3) “not adhering to the Hickory Corridor Plan.”
{¶21} Attached to the amended complaint were copies of the real estate sales
agreements and the amendment to the real estate sales agreements entered into by Ms. Maher and
Ms. Johnson with the City. As for the Cherrys, their real estate sales agreement was not attached
to the amended complaint and instead they included an explanation in the amended complaint
that the City was in possession of their contract. See Civ.R. 10(D)(1). Because the Cherrys
complied with Civ.R. 10(D)(1), the absence of their contract with the complaint is not fatal. See
Krause v. Case W. Res. Univ., 8th Dist. Cuyahoga No. 70526, 1996 Ohio App. LEXIS 5771, *13
(Dec. 19, 1996). Nonetheless, the Cherrys must still allege facts giving rise to a breach of
contract.
{¶22} The only contracts identified by Appellants were their respective real estate sales
agreements and amendment to the real estate sales agreements with the City which provided for
the sale of vacant parcels by quitclaim deed. Despite identifying these contracts, Appellants
failed to identify any specific term in those contracts that was breached by the City.
{¶23} Instead, Appellants’ alleged that the City’s acts and omissions were contrary to
the Hickory Corridor Plan. Yet, Appellants did not allege in their amended complaint that the
Hickory Corridor Plan was a separate contract between them and the City. The Appellants only
alleged that they relied upon the Hickory Corridor Plan in deciding to purchase their respective
lots and that the City acted “contrary to the express terms and conditions upon which the Hickory
Corridor [Plan was] enacted.” Those allegations, however, do not state a breach of contract claim
arising from the real estate sales agreements because of the application of the “Entire
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Agreement” clause. This clause stated that “This Agreement is the complete understanding of
the parties. Any promise or condition not contained in this Agreement is not binding on the
parties.” Because the Hickory Corridor Plan was not one of the terms in the real estate sales
agreements, that document could not serve as the basis for the breach of contract.
{¶24} Contrary to the allegations in the amended complaint and the real estate sales
agreements, Appellants argue on appeal that the terms of the Hickory Corridor Plan were
incorporated into their real estate sales agreements by virtue of the City recording it and listing
Appellants’ properties as being within the Hickory Corridor Plan area. This Court, however, will
not consider this argument as it is being raised for the first time on appeal. JPMorgan Chase
Bank, Natl. Assn. v. Burden, 9th Dist. Summit No. 27104, 2014-Ohio-2746, ¶ 12. Additionally,
this argument will not be considered because Appellants failed to cite any legal authority in
support of their argument. See Harris v. Nome, 9th Dist. Summit No. 21071, 2002-Ohio-6994, ¶
15; App.R. 12(A)(2); App.R. 16(A)(7).
{¶25} Appellants contend on appeal that their “breach of contract claim arises out of the
City’s breach of the covenant of good faith and fair dealing that is implied in each contract.”
(Emphasis deleted.) Contrary to Appellants’ position, their breach of contract claim cannot be
based solely upon a breach of the duty of good faith and fair dealing. While the duty of good
faith and fair dealing is integral to a contract, “there is no violation of th[is] implied duty unless
there is a breach of a specific obligation imposed by the contract.” Lucarell, 152 Ohio St.3d 453,
2018-Ohio-15, ¶ 43. See Krukrubo, 2007-Ohio-7007, ¶ 19. “[A] claim for breach of contract
subsumes the accompanying claim for breach of the duty of good faith and fair dealing. [When a
plaintiff’s] complaint fails to state a claim for breach of contract, it also fails to state a claim for
breach of the duty of good faith and fair dealing.” Krukrubo at ¶ 19. See Lucarell at ¶ 47;
10
Firelands Regional Med. Ctr. v. Jeavons, 6th Dist. Erie No. E-07-068, 2008-Ohio-5031, ¶ 28. As
addressed above, Appellants have failed to identify any specific term in the real estate sales
agreements that the City breached. Accordingly, Appellants’ allegations that the City breached
its duty of good faith and fair dealing cannot support a breach of contract claim.
{¶26} Lastly, Appellants argue that Ms. Johnson pled an additional breach of contract
based upon her allegations that the City conditioned the issuance of a building permit upon her
execution of a release of any claims she had against the City. Ms. Johnson, however, did not
present this argument to the trial court, and it is therefore forfeited on appeal. Burden at ¶ 12.
{¶27} Thus, taking all of the allegations in the amended complaint and the attachments
as true, and making all reasonable inferences in Appellants’ favor, this Court concludes that
Appellants could prove no set of facts that would entitle them to relief on their breach of contract
claim. Accordingly, the trial court did not err in granting the City’s motion for judgment on the
pleadings.
{¶28} The second assignment of error is overruled.
III.
{¶29} The assignments of error are overruled and the judgment of the Summit County
Common Pleas Court is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
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Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellants.
LYNNE S. CALLAHAN
FOR THE COURT
SCHAFER, P. J.
CONCURS.
CARR, J.
DISSENTING.
{¶30} In accepting all material allegations in the complaint as true and making every
reasonable inference in favor of the nonmoving party, I cannot agree that judgment on the
pleadings was properly granted. I respectfully dissent.
APPEARANCES:
JOHN F. MYERS, Attorney at Law, for Appellants.
EVE V. BELFANCE, Director of Law, and BRIAN D. BREMER and JOHN CHRISTOPHER
REECE, Assistant Directors of Law, for Appellee.
RONALD S. KOPP, STEPHEN W. FUNK and JESSICA A. LOPEZ, Attorneys at Law, for
Appellee.