Modic v. Akron , 2014 Ohio 4190 ( 2014 )

[Cite as Modic v. Akron, 2014-Ohio-4190.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
LARRY MODIC C.A. No. 27041
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
CITY OF AKRON COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellee CASE No. CV 2013-01-0615
DECISION AND JOURNAL ENTRY
Dated: September 24, 2014
HENSAL, Presiding Judge.
{¶1} Larry Modic appeals a judgment of the Summit County Court of Common Pleas
that granted the City of Akron’s motion for summary judgment. For the following reasons, this
Court dismisses the appeal.
I.
{¶2} In May 2012, Mr. Modic bought a house in Akron, Ohio. At the time of the sale,
he did not know that the City’s Department of Health had issued a number of repair orders to the
previous owner. A few weeks after the sale, Mr. Modic received notice that the Housing
Appeals Board was considering ordering his house to be demolished. Mr. Modic twice
persuaded the Board to grant him an extension of time for repairs, but, after he failed to appear at
the Board’s September 2012 meeting, it ordered his house razed.
{¶3} Mr. Modic received notice of the Board’s decision and did not appeal it. Instead,
in January 2013, he filed a complaint seeking a declaration that he had not been properly served
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with a list of violations, that the Department of Public Service does not have authority to enforce
orders issued by the Department of Health, that the Department of Neighborhood Assistance
does not have authority to enforce orders issued by the Department of Health, and that only the
Department of Health has authority to condemn private homes for sanitary or structural reasons.
He also requested that the court prohibit the City from enforcing its demolition order and enjoin
the Departments of Public Service and Neighborhood Assistance from enforcing the Akron
Housing Code.
{¶4} The trial court initially stayed the demolition order, but it vacated its order a few
days later, and the City demolished the house. The City later moved for summary judgment on
Mr. Modic’s claims, arguing they were moot, lacked merit, and were barred by res judicata. It
also argued that Mr. Modic did not have standing to bring them. The trial court granted the
City’s motion over Mr. Modic’s opposition, concluding that his claims were barred for failure to
exhaust administrative remedies. Mr. Modic has appealed, assigning two errors, which this
Court has combined for ease of consideration.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED WHEN IT DETERMINED THAT THIS CASE
WAS BARRED BY THE REQUIREMENT OF EXHAUSTION OF
ADMINISTRATIVE REMEDIES AND GRANTED SUMMARY JUDGMENT
TO THE CITY OF AKRON ON THAT BASIS.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED WHEN IT DETERMINED THAT THIS CASE
WAS BARRED BY RES JUDICATA AND GRANTED SUMMARY
JUDGMENT TO THE CITY OF AKRON ON THAT BASIS.
{¶5} This Court is obligated to raise questions related to our jurisdiction sua sponte.
Whitaker-Merrell Co. v. Geupel Constr. Co., Inc., 29 Ohio St.2d 184, 186 (1972). This Court
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has jurisdiction to hear appeals only from final judgments and appealable orders. Ohio
Constitution, Article IV, Section 3(B)(2); R.C. 2501.02. In the absence of a final judgment or
appealable order, this Court must dismiss the appeal for lack of subject matter jurisdiction. Lava
Landscaping, Inc. v. Rayco Mfg., Inc., 9th Dist. Medina No. 2930-M, 2000 WL 109108, *1 (Jan.
26, 2000).
{¶6} Revised Code Section 2721.02(A) addresses declaratory judgment actions and
states, in relevant part, that
courts of record may declare rights, status, and other legal relations whether or not
further relief is or could be claimed. * * * The declaration may be either
affirmative or negative in form and effect. The declaration has the effect of a
final judgment or decree.
“[I]n the context of a declaratory judgment action, merely entering judgment in favor of one
party, without further elaboration, does not constitute a final judgment sufficient to give this
Court jurisdiction over an appeal.” Koprivec v. Rails-to-Trails of Wayne Cty., 9th Dist. Wayne
No. 13CA0004, 2014-Ohio-2230, ¶ 9, quoting Peavy v. Thompson, 9th Dist. Summit No. 25440,
2011-Ohio-1902, ¶ 10. “The court’s judgment entry must expressly declare the parties’
respective rights and obligations.” Id. See also Bowers v. Craven, 9th Dist. Summit No. 25717,
2012-Ohio-332, ¶ 11-12; Miller Lakes Community Servs. Assn., Inc. v. Schmitt, 9th Dist. Wayne
No. 09CA0076, 2011-Ohio-1295, ¶ 15-16. The fact that a court grants summary judgment to the
defendant does not mean that it “was declaring the negative of all of the [Plaintiff’s] sought
declarations * * *.” Gargasz v. Lorain Cty., 9th Dist. Lorain No. 12CA010215, 2013-Ohio-
1218, ¶ 8. Rather, Section 2721.02(A) specifically provides that a “declaration has the effect of a
final judgment or decree[ ],” which is “either affirmative or negative in form[.]”
{¶7} When entering a final judgment pursuant to a complaint for declaratory judgment,
the trial court is required to expressly state the rights and responsibilities of the parties involved
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as to the matters at issue. Gargasz at ¶ 11, citing R.C. 2721.02(A); Peavy at ¶ 10. The trial
court’s entry in this case does not meet that requirement. It, therefore, is not a final judgment.
Accordingly, in light of this Court’s precedent, we lack jurisdiction over this appeal.1
III.
{¶8} Because the trial court’s judgment is not final, this Court lacks jurisdiction over
Mr. Modic’s attempted appeal. The appeal is dismissed.
Appeal dismissed.
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.
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We disagree with the approach taken by the dissent because its analysis presumes that
Mr. Modic had standing to file a declaratory-judgment action in the common pleas court.
Although the City challenged Mr. Modic’s standing in the trial court, the court did not address
that issue in its decision. See Kincaid v. Erie Ins. Co., 128 Ohio St.3d 322, 2010-Ohio-6036, ¶ 9
(“Standing is a preliminary inquiry that must be made before a court may consider the merits of a
legal claim.”). This Court will not consider the issue of standing in the first instance when it was
raised before the trial court. See Kurtock v. Cleveland Bd. of Zoning Appeals, 8th Dist.
Cuyahoga No. 100266, 2014-Ohio-1836, ¶ 9; Riverside v. State, 190 Ohio App.3d 765, 2010-
Ohio-5868, ¶ 58 (10th Dist.). Moreover, questions regarding this Court’s jurisdiction must be
resolved before this Court can address issues concerning the merits of an appeal. State v. Davis,
10th Dist. Franklin No. 08AP-679, 2009-Ohio-1666, ¶ 7; Smith v. Quigg, 5th Dist. Fairfield Nos.
05-CA-61, 05-CA-62, 05-CA-79, 2006-Ohio-1670, ¶ 10; Giovanetti v. Ohio State Dental Bd., 66
Ohio App.3d 381, 382 (11th Dist.1990).
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Costs taxed to Appellant.
JENNIFER HENSAL
FOR THE COURT
MOORE, J.
CONCURS.
CARR, J.
DISSENTING.
{¶9} A trial court may either dismiss an action for lack of a justiciable issue or may
rule on the substantive merits of the action, in both cases rendering a final, appealable judgment.
The confusion in this case lies in the trial court’s attempt to do both at the same time. It has
conflated or blended the two types of dispositions. That is not to say that it has rendered a
nonfinal judgment, only that it has committed error.
{¶10} Although attempting to reach the substantive merits of the case, the trial court
disposed of the underlying action upon finding that Mr. Modic’s claims were barred for failure to
exhaust administrative remedies, effectively concluding that the claims were not justiciable. The
trial court has authority to dismiss an action for any reason raised by the parties which implicates
justiciability. Moreover, because there were no justiciable claims, the trial court was not
required to declare the rights and obligations of the parties in order to issue a final, appealable
order. As a general rule, “[w]hen a trial court enters judgment in a declaratory judgment action,
the order must declare all of the parties’ rights and obligations in order to constitute a final,
appealable order. Indeed, even if the [trial] court determines the plaintiff is wrong, * * * the
court must declare the appropriate rights.” (Internal quotations and citations omitted) No-Burn,
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Inc. v. Murati, 9th Dist. Summit No. 24577, 2009-Ohio-6951, ¶ 11. However, “[f]or purposes of
a declaratory judgment action, a ‘justiciable issue’ requires the existence of a legal interest or
right, and a ‘controversy’ exists where there is a genuine dispute between parties with adverse
legal interests.” Chafin v. Ohio Adult Parole Auth., 10th Dist. Franklin No. 13AP-646, 2014-
Ohio-1192, ¶ 14 (affirming Civ.R. 12(B)(6) dismissal of plaintiff’s declaratory judgment action);
ProgressOhio.org, Inc. v. JobsOhio, 139 Ohio St.3d 520, 2014-Ohio-2382 (affirming dismissing
of a complaint for declaratory judgment where there was no justiciable issue before the court as
the plaintiffs lacked standing to sue). Accordingly, where there is no justiciable controversy
before the court, the trial court may not declare any rights or obligations of the parties when
disposing of the case.
{¶11} The City of Akron moved for summary judgment on three bases, arguing that Mr.
Modic’s claims were barred by the doctrine of res judicata, that they were moot, and that they
lacked merit. The City argued in regard to res judicata that Mr. Modic had failed to appeal the
decision of the Housing Appeals Board pursuant to R.C. 2506.01, so that his instant claims were
therefore barred as they could have been raised on appeal. While seeking a resolution on the
merits that would preclude further litigation of the underlying issues, the City’s argument that
Mr. Modic was required to first raise those issues before the Housing Appeals Board necessarily
implicated exhaustion issues. Accordingly, the trial court reasonably construed the City’s res
judicata argument as one raising the failure to exhaust administrative remedies. In this way, the
trial court construed an argument as to preclusive effect giving rise to finality as one implicating
ripeness giving rise to premature judicial intervention. See Prairie Twp. Bd. of Trustees v. Hay,
10th Dist. Franklin No. 01AP-1198, 2002-Ohio-4765, ¶ 25-26 (distinguishing the doctrines of
res judicata and failure to exhaust administrative remedies, the former precluding relitigation of
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claims, i.e., a doctrine recognizing finality; and the latter precluding premature judicial
intervention, i.e., a “doctrine of judicial abstention.”).
{¶12} Effectively, the trial court concluded that the controversy was not justiciable at
that time, rather than that the matter was conclusively determined. The doctrine of exhaustion,
by its nature therefore, recognizes that the matter is not yet in a procedural posture which allows
consideration by the court. Unlike the doctrine of res judicata, it does not foreclose future
judicial consideration. Accordingly, the doctrine of exhaustion does not dispose of the
underlying merits of a claim. Therefore, the proper disposition of a case where the plaintiff has
failed to exhaust administrative remedies is to dismiss the action, rather than to enter judgment in
favor of the defendant. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51 (1938)
(recognizing the “long-settled rule of judicial administration that no one is entitled to judicial
relief for a supposed or threatened injury until the prescribed administrative remedy has been
exhausted.”); Waliga v. Coventry Twp., 9th Dist. No. 22015, 2004-Ohio-5683, ¶ 11-17. But see
Pappas & Assocs. Agency, Inc. v. State Auto. Mut. Ins. Co., 9th Dist. No. 18458, 1998 WL
15605 (Jan. 7, 1998) (affirming an award of summary judgment on the basis of the plaintiff’s
failure to exhaust administrative remedies). Moreover, in the case of a declaratory judgment
action, the trial court may not declare the parties’ rights and obligations where the court
dismisses the action for failure to exhaust administrative remedies. State ex rel. Teamsters Local
Union 436 v. Cuyahoga Cty. Bd. of Commrs., 132 Ohio St.3d 47, 2012-Ohio-1861, ¶ 19 (“Where
a party fails to exhaust available administrative remedies, allowing declaratory relief would serve
only to circumvent an adverse decision of an administrative agency and to bypass the legislative
scheme.”).
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{¶13} Because the trial court disposed of the declaratory judgment complaint by
concluding that Mr. Modic had failed to exhaust his administrative remedies, I would conclude
that this Court has jurisdiction to consider the merits of the appeal. Upon consideration, I would
reverse.
{¶14} I would reverse the trial court’s judgment on three grounds. First, the doctrine of
failure to exhaust administrative remedies constitutes “an affirmative defense that may be waived
if not timely asserted and maintained.” Jones v. Chagrin Falls, 77 Ohio St.3d 456 (1997),
syllabus. In this case, the City did not argue the defense in its motion for summary judgment.
Instead, the trial court improperly misconstrued the City’s res judicata argument as an exhaustion
argument, and erroneously granted summary judgment on grounds waived, or at a minimum not
advanced, by the City.
{¶15} Second, where the trial court finds that the plaintiff has failed to exhaust
administrative remedies, the proper disposition is not an award of summary judgment in the
defendant’s favor. The City understood this. Had the City raised the affirmative defense of
failure to exhaust and the trial court found merit in that defense, it should have dismissed the
claims without prejudice, rather than granted judgment in the City’s favor.
{¶16} Third, the Ohio Supreme Court has long held that “failure to exhaust
administrative remedies is not a necessary prerequisite to an action challenging the
constitutionality of a statute, ordinance, or administrative rule.” Jones, 77 Ohio St.3d at 460.
Given that Mr. Modic sought declarations as to the validity of the order issuance and
enforcement scheme, as well as injunctions prohibiting enforcement of the alleged invalid orders,
any attempt to seek administrative relief would have been fruitless. I believe that he properly
sought relief from the common pleas court via a declaratory judgment/injunction action.
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{¶17} Under these circumstances, I believe that the trial court’s judgment must be
reversed and the cause remanded for further proceedings.
APPEARANCES:
WARNER MENDENHALL, Attorney at Law, for Appellant.
CLAIR E. DICKINSON and JOHN P. HICKEY, Attorneys at Law, for Appellee.
CHERI B. CUNNINGHAM, Law Director, and JOHN YORK, Assistant Law Director, for
Appellee.