Nicholson v. LoanMax, L.L.C. , 105 N.E.3d 489 ( 2018 )

[Cite as Nicholson v. LoanMax, L.L.C., 2018-Ohio-375.]
STATE OF OHIO, BELMONT COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
KELLY NICHOLSON )
)
PLAINTIFF-APPELLEE )
) CASE NO. 16 BE 0057
VS. )
) OPINION
LOANMAX, LLC., et al. )
)
DEFENDANTS-APPELLANTS )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas, of Belmont County, Ohio
Case No. 15-CV-304
JUDGMENT: Reversed.
APPEARANCES:
For Plaintiff-Appellee Attorney Eric Chaffin
Attorney Patrick Booth
615 Iron City Drive
Pittsburgh, Pennsylvania 15205
For Defendants-Appellants Attorney James Lyons, Jr.
Attorney Kenneth Calderone
3737 Embassy Parkway, Suite 100
Akron, Ohio 44333
JUDGES:
Hon. Mary DeGenaro
Hon. Gene Donofrio
Hon. Carol Ann Robb
Dated: January 26, 2018
[Cite as Nicholson v. LoanMax, L.L.C., 2018-Ohio-375.]
DeGENARO, J.
{¶1} Defendants-Appellants, Judith Steele and Bellaire Board of Education,
appeal the decision of the Belmont County Court of Common Pleas denying their
motion for summary judgment. On appeal, Bellaire Board of Education and Steele
argue there were no genuine issues of fact regarding their statutory immunity and
were entitled to judgment in their favor as a matter of law. As they are immune from
liability, the judgment of the trial court is reversed, and judgment is entered in their
favor.
Facts and Procedural History
{¶2} Plaintiff-Appellee, Kelly Nicholson, filed a complaint against Loanmax,
LLC, Drummond Financial Services, LLC, Select Management Resources LLC, and
the Bellaire Board of Education. Nicholson alleged that on September 17, 2014, she
was exiting a school bus owned by BOE and was injured when she stepped off the
bus and into a pothole in a parking lot owned and maintained by all named
defendants.
{¶3} BOE answered Nicholson’s complaint, denied the allegations and
asserted various affirmative defenses, including statutory immunity. Drummond
Financial Services, LLC, dba Loanmax and Select Management Resources, LLC,
filed an answer. Nicholson later filed an amended complaint naming the bus driver
Judith Steele, and TERA, II, LLC as additional defendants.
{¶4} BOE and Steele moved for summary judgment on the basis of statutory
immunity pursuant to R.C. §2744.01. The remaining defendants moved for summary
judgment on the basis of the "open and obvious doctrine." Nicholson responded in
opposition on September 16, 2016. All motions were overruled, and the concept of
open and notorious remained a factual determination for the jury.
Summary Judgment
{¶5} In their sole assignment of error, Steele and BOE assert:
The trial court erred by not granting Appellant’s Motion for Summary
Judgment on the Basis of Immunity.
-2-
{¶6} An appellate court reviews a trial court's summary judgment decision de
novo. Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio-4948,
874 N.E.2d 1155, ¶ 5. A motion is properly granted if the court, viewing the evidence
in a light most favorable to the party against whom the motion is made, determines
that: 1) there are no genuine issues as to any material facts; 2) the movant is entitled
to judgment as a matter of law; and 3) the evidence is such that reasonable minds
can come to but one conclusion, which is adverse to the opposing party. Civ.R.
56(C); Byrd v. Smith, 110 Ohio St.3d 24, 2006-Ohio-3455, 850 N.E.2d 47, ¶ 10.
{¶7} An order denying a motion for summary judgment is generally not a
final, appealable order. State ex rel. Overmeyer v. Walinski, 8 Ohio St.2d 23, 222
N.E.2d 312. However, R.C. 2744.02(C) provides “[a]n order that denies a political
subdivision or an employee of a political subdivision the benefit of an alleged
immunity from liability as provided in this chapter or any other provision of the law is a
final order.” "Thus, R.C. 2744.02(C) grants appellate courts jurisdiction to review the
denial of a motion for summary judgment based upon immunity." Gates v.
Leonbruno, 2016-Ohio-5627, 70 N.E.3d 1110, ¶ 29 (8th Dist.)
{¶8} Political subdivisions are generally not liable in damages for injury,
death or loss to person or property by any act or omission. R.C. 2744.02(A)(1) “The
Political Subdivision Tort Liability Act, as codified in R.C. Chapter 2744, requires a
three-tiered analysis to determine whether a political subdivision should be allocated
immunity from civil liability.” Hubbard v. Canton City Bd. of Edn., 97 Ohio St.3d 451,
2002-Ohio-6718, 780 N.E.2d 543, ¶ 10, citing Cater v. Cleveland, 83 Ohio St.3d 24,
28, 1998-Ohio-421, 697 N.E.2d 610.
{¶9} A three-tiered analysis is used when evaluating immunity:
Under the first tier, R.C. 2744.02(A)(1) sets out the general rule that
political subdivisions are not liable in damages. [Green Cty. Agricultural
Soc. v. Liming, 89 Ohio St.3d 551, 556–57, 733 N.E.2d 1141 (2000) ]
Under the second tier, the court must determine whether any of the
exceptions to immunity set out in R.C. 2744.02(B) apply. Id. at 557, 733
-3-
N.E.2d 1141. Finally, under the third tier, if the court finds that any of
R.C. 2744.02(B)'s exceptions apply, it must consider R.C. 2744.03,
which provides defenses and immunities to liability. Id.
Roberts v. Switzerland of Ohio Local School Dist., 2014-Ohio-78, 7 N.E.3d 526, ¶ 17
(7th Dist.).
{¶10} “Immunity is a doctrine that provides a complete defense to a tort
action. By asserting an immunity defense, the defendant does not allege that there
was no negligence. The defendant is asserting that it is protected from liability for
negligence by reason of R.C. Chapter 2744.” Rondy v. Richland Newhope Industries,
Inc., 2016-Ohio-118, 57 N.E.3d 369, ¶ 27 (5th Dist). In the present matter, both
parties agree that the first tier is met. As such, BOE and Steele are presumptively
immune from liability under R.C. 2744.02(A)(1) and are entitled to immunity unless
one of the exceptions in R.C. 2744.02(B) applies.
{¶11} BOE and Steele argue none of the exceptions apply. Nicholson
contends that three apply to reinstate liability. Each will be discussed in turn.
Negligent Operation of Motor Vehicle
{¶12} R.C. 2744.02(B)(1) provides:
Subject to sections 2744.03 and 2744.05 of the Revised Code, a
political subdivision is liable in damages in a civil action for injury,
death, or loss to person or property allegedly caused by an act or
omission of the political subdivision or of any of its employees in
connection with a governmental or proprietary function, as follows:
(1) Except as otherwise provided in this division, political
subdivisions are liable for injury, death, or loss to person or property
caused by the negligent operation of any motor vehicle by their
employees when the employees are engaged within the scope of their
employment and authority.
-4-
{¶13} Nicholson argues that R.C. 2744.02(B)(1) reinstates BOE and Steele's
liability as Steele failed to adhere to the applicable Ohio "safety regulations, school
policies and local rules." The parties agree that the bus was fully stopped at the time
of the incident. In Miller v. Van Wert Cty. Bd. of Mental Retardation & Dev.
Disabilities, 3d. Dist. No. 15-08-11, 2009-Ohio-5082, ¶ 18, the Third District stated:
"Analyzing the meaning of “operation” under R.C. 2744.02(B)(1), the
Ohio Supreme Court noted that the General Assembly's definition of
“operate” found in R.C. 4511.01(HHH) “sheds light on the meaning of
‘operation’ in R.C. 2744.02(B)(1).” [Doe v. Marlington Local School Bd.
of Edn., 122 Ohio St.3d 12, 2009–Ohio–1360, 907 N.E. 2d 706, ¶ 24.]
The Court also noted that the definition of “operate” found in R.C.
4511.01(HHH) was “generally consistent with the interpretation courts
have given to “operation” under R.C. 2744.02(B)(1).” Id. at ¶ 25, 907
N.E.2d 706. The Court went on to state: “[w]e conclude that the
exception to immunity in R.C. 2744.02(B)(1) for the negligent operation
of a motor vehicle pertains only to negligence in driving or otherwise
causing the motor vehicle to be moved.” Id. at ¶ 26, 907 N.E.2d 706.
{¶14} Here, the school bus was parked and at a full and complete stop at the
time Nicholson exited and stepped down into the pothole. Nicholson attempts to
distinguish Marlington, as relied upon in Miller, by citing to Swain v. Cleveland Metro.
School Dist. 8th Dist. No. 94553, 2010-Ohio-4498, which held that the negligent
operation exception reinstated municipal liability. However, the Swain Court noted the
inapplicability of Marlington to the facts contained in that case:
Marlington is easily distinguishable from the case at bar. Marlington
involved the sexual assault between different students. The case at bar
involves the negligent operation of a motor vehicle in driving or
otherwise causing the vehicle to be moved in relation to the conduct of
-5-
the bus driver and her duties.
In contrast to the sexual assault between a special needs student in
Marlington, the conduct in the case at bar involves an entirely different
situation. The bus driver in the case at bar, while sitting in the driver's
seat and while the engine was running, declined to inspect the bus and
then drove the bus away from the proper bus stop.
Swain, ¶ 11-12.
{¶15} Nicholson further cites to Doe v. Dayton City School Board of
Education, 137 Ohio App.3d 166, 738 N.E.2d 390 (2d.Dist.1999), and Groves v.
Dayton Public Schools, 132 Ohio App.3d 566, 725 N.E.2d 734 (2d. Dist.1999).
However, we find Doe and Groves unpersuasive and distinguishable as in both cases
the vehicle was not being operated at the time of the plaintiff's injuries. The rationale
in Marlington, Miller and Swain is more persuasive.
{¶16} As there was no actual operation of the school bus in the present
matter, R.C. 2744.02(B)(1) does not reinstate BOE and Steele's liability.
Failure to Repair Public Roads
{¶17} R.C. 2744.02(B)(3) provides:
Subject to sections 2744.03 and 2744.05 of the Revised Code, a
political subdivision is liable in damages in a civil action for injury,
death, or loss to person or property allegedly caused by an act or
omission of the political subdivision or of any of its employees in
connection with a governmental or proprietary function, as follows:
(3) Except as otherwise provided in section 3746.24 of the Revised
Code, political subdivisions are liable for injury, death, or loss to
person or property caused by their negligent failure to keep public
roads in repair and other negligent failure to remove obstructions
from public roads, except that it is a full defense to that liability,
-6-
when a bridge within a municipal corporation is involved, that the
municipal corporation does not have the responsibility for
maintaining or inspecting the bridge.
{¶18} Nicholson was injured in a parking lot owned by TERA II and leased to
Drummond Financial who was responsible for maintaining the premises pursuant to
the terms of the lease. Loan Max is a dba for Drummond. BOE had a legal easement
since 1982 for use of the parking lot. Nicholson argues that the easement required
BOE to maintain the parking lot in a reasonably safe condition. This is a distinction
without a difference. A parking lot is not a public road.
The General Assembly defined what areas constitute a public road and
what areas do not: “Public roads means public roads, highways,
streets, avenues, alleys, and bridges within a political subdivision.
‘Public roads' does not include berms, shoulders, rights-of-way, or
traffic control devices unless the traffic control devices are mandated by
the Ohio manual of uniform traffic control devices.” R.C. 2744.01(H).
The Ninth District held that in the context of an ongoing repair or
maintenance project, a public road is “the area under the control of the
political subdivision, subject to the ongoing repair work, and open to
travel by the public.” 2014-Ohio-3529, 17 N.E.3d 639, at ¶ 11. The court
did so without consideration of the areas the General Assembly
statutorily excluded from the definition of public road. The result was an
expansion of the definition to include “area[s] under the control of the
political subdivision”—in direct contravention of the General Assembly.
See Montgomery Cty. Bd. of Commrs., 28 Ohio St.3d at 175, 503
N.E.2d 167.
Because a definition was provided by the General Assembly, R.C.
2744.01(H) is the exclusive definition of public road for purposes of
-7-
determining sovereign immunity from all claims that allege a negligent
failure to maintain.
Baker v. Wayne County, et al., 147 Ohio St.3d 51, 2016-Ohio-1566, 60 N.E.3d 1214,
¶ 16-18.
{¶19} As parking lots were not included within the statutory definition of public
roads, R.C. 2744.02(B)(3) does not reinstate BOE and Steele's liability.
Physical Defect
{¶20} R.C. 2744.02(B)(4) provides:
Subject to sections 2744.03 and 2744.05 of the Revised Code, a
political subdivision is liable in damages in a civil action for injury,
death, or loss to person or property allegedly caused by an act or
omission of the political subdivision or of any of its employees in
connection with a governmental or proprietary function, as follows:
Except as otherwise provided in section 3746.24 of the Revised Code,
political subdivisions are liable for injury, death, or loss to person or
property that is caused by the negligence of their employees and that
occurs within or on the grounds of, and is due to physical defects within
or on the grounds of, buildings that are used in connection with the
performance of a governmental function, including, but not limited to,
office buildings and courthouses, but not including jails, places of
juvenile detention, workhouses, or any other detention facility, as
defined in section 2921.01 of the Revised Code.
{¶21} Regarding R.C. 2744.02:
R.C. 2744.02(B) was amended on April 9, 2003. The 2003 amendment
to R.C. 2744.02(B)(4) added the language “and is due to physical
defects within or on the grounds of” after “that is caused by the
-8-
negligence of their employees and that occurs within or on the grounds
of.” Other than this addition, the statute remained the same. The statute
was changed to limit liability for negligence that is due to physical
defects within or on the grounds that are used in connection with a
governmental function. Aratari v. Leetonia Exempt Village School Dist.,
7th Dist. No. 06–CO–11, 2007-Ohio-1567, 2007 WL 969402, ¶ 30.
Roberts v. Switzerland of Ohio Local School Dist., 2014-Ohio-78, 7 N.E.3d 526, ¶ 20
(7th Dist).
{¶22} R.C. 2744.02(B)(4) requires proof of two elements for the exception to
apply: a negligent act and a physical defect within or on the grounds of the political
subdivision. DeMartino v. Poland Loc. School Dist., 7th Dist. No. 10 MA 19, 2011-
Ohio-1466, ¶ 34. “R.C. 2744.02(B)(4) requires the injuries at issue to be caused both
by a political-subdivision employee's negligence and a physical defect on the
grounds.” Parmertor v. Chardon Local Schools, 2016-Ohio-761, 47 N.E.3d 942, ¶ 16
(11th Dist.).
{¶23} The phrase physical defect is not statutorily defined. The Sixth District
defined physical defect as “a perceivable imperfection that diminishes the worth or
utility of the object at issue.” Hamrick v. Bryan City School Dist., 6th Dist. No. WM–
10–014, 2011-Ohio-2572, ¶ 28. Here Nicholson alleges the physical defect that
caused or contributed to her injury was the pothole. Bellaire responds that the
easement operated as it was intended to do.
{¶24} Nicholson vacillates between what constitutes the negligent act: the
board’s failure to repair the pothole pursuant to the terms of the easement or Steele’s
operation of the bus itself, which is not an action as the bus was fully stopped and
parked.
{¶25} Construed in a light most favorable to the Nicholson as the non-moving
party, the exceptions to sovereign immunity Nicholson asserts reinstates liability do
not. As Steele and BOE are entitled to statutory immunity, the trial court erred in
denying their motion for summary judgment. Accordingly, the judgment of the trial
-9-
court is reversed and summary judgment is granted in favor of Steele and BOE.
Donofrio, J., dissents in part, concurs in part; see dissenting in part, concurring in part
opinion.
Robb, P. J., concurs.
- 10 -
DONOFRIO, J., dissenting in part, concurring in part.
{¶26} I respectfully dissent from that part of the majority opinion that
determines that the exception to immunity set out in R.C. 2744.02(B)(1) does not
apply to the Board of Education (BOE). Instead, I would find that the R.C.
2744.02(B)(1) exception does apply to reinstate liability as to the BOE. I also
respectfully concur in judgment only with that part of the majority opinion that
determines that Steele is entitled to immunity. I too would find that Steele is entitled
to immunity, but for the reason that R.C. 2744.03(A)(6) establishes her immunity.
{¶27} Whether a political subdivision is entitled to immunity is analyzed using
a three-tiered process. Greene Cty. Agricultural Soc. v. Liming, 89 Ohio St.3d 551,
556, 733 N.E.2d 1141 (2000). Under the first tier, R.C. 2744.02(A)(1) sets out the
general rule that political subdivisions are not liable in damages. Id. at 556–557.
Under the second tier, the court must determine whether any of the exceptions to
immunity set out in R.C. 2744.02(B) apply. Id. at 557. Finally, under the third tier, if
the court finds that any of R.C. 2744.02(B)'s exceptions apply, it must consider R.C.
2744.03, which provides defenses and immunities to liability. Id.
{¶28} Under the first tier, the BOE has immunity and is not liable for damages.
{¶29} Under the second tier, we must examine whether any exceptions to
immunity apply. R.C. 2744.02(B) sets out five specific exceptions to immunity. I
would find that R.C. 2744.02(B)(1) applies to the BOE. It provides:
(B) Subject to sections 2744.03 and 2744.05 of the Revised Code, a
political subdivision is liable in damages in a civil action for injury,
death, or loss to person or property allegedly caused by an act or
omission of the political subdivision or of any of its employees in
connection with a governmental or proprietary function, as follows:
(1) Except as otherwise provided in this division, political subdivisions
are liable for injury, death, or loss to person or property caused by the
negligent operation of any motor vehicle by their employees when the
employees are engaged within the scope of their employment and
- 11 -
authority.
R.C. 2744.02(B)(1).
{¶30} In this case, Steele was operating the school bus within the scope of
her employment when she drove the bus on top of the pothole. The phrase
“operation of any motor vehicle” is not defined in R.C. Chapter 2744. The Second
District found that phrase “capable of encompassing more than the mere act of
driving the vehicle involved.” Groves v. Dayton Pub. Schools, 132 Ohio App.3d 566,
569, 725 N.E.2d 734 (2d Dist.1999).
{¶31} The majority relies on the reasoning set out in Doe v. Marlington Local
School Dist. Bd. of Edn., 122 Ohio St.3d 12, 2009-Ohio-1360, 907 N.E.2d 706, and
Miller v. Van Wert Cty. Bd. of Mental Retardation & Dev. Disabilities, 3d Dist. No. 15-
08-11, 2009-Ohio-5082. Neither of these cases, however, define “operation of a
motor vehicle” to not include the action of driving a vehicle over a hazard and parking
it there. Instead, both of those cases stand for the proposition that the supervision of
students on a bus is not included in the definition of “operation of a motor vehicle.”
{¶32} In Marlington, 2009-Ohio-1360, the Ohio Supreme Court was
specifically faced with “whether a school bus driver's supervision of the conduct of
children passengers on a school bus amounts to operation of a motor vehicle within
the statutory exception to political subdivision immunity under R.C. 2744.02(B)(1)”
when a student was allegedly sexually assaulted while on the school bus. Id. at ¶ 9.
The Court concluded:
the exception to immunity in R.C. 2744.02(B)(1) for the negligent
operation of a motor vehicle pertains only to negligence in driving or
otherwise causing the vehicle to be moved. The language of R.C.
2744.02(B)(1) is not so expansive that it includes supervising the
conduct of student passengers, as alleged in this case.
Id. at 26.
- 12 -
{¶33} In Miller, 2009-Ohio-5082, the claim alleged the bus driver detained an
incompetent student on the bus for five hours. The Third District relied on the Ohio
Supreme Court’s decision in Marlington, in finding that “negligent supervision of
passengers is not ‘negligent operation of any motor vehicle’ under R.C.
2744.02(B)(1).” Id. at ¶ 19.
{¶34} In both Marlington and Miller, the issue was whether the bus driver’s
supervision of the students on the bus was contained within the definition of
“operation of a motor vehicle.” This is not the issue in the case at bar. Thus, I would
find these cases inapplicable.
{¶35} The majority also relies on Swain v. Cleveland Metro. School Dist., 8th
Dist. No. 94553, 2010-Ohio-4498. In Swain, a mother sought to hold the school
district liable for the actions of a bus driver who failed to discover that her five-year-
old child had fallen asleep on the bus on the way home from school and failed to
drop her off at her bus stop. The Eighth District distinguished the case from
Marlington finding:
[i]n contrast to the sexual assault between a special needs student in
Marlington, the conduct in the case at bar involves an entirely different
situation. The bus driver in the case at bar, while sitting in the driver's
seat and while the engine was running, declined to inspect the bus and
then drove the bus away from the proper bus stop.
(Emphasis sic.); Id. at ¶ 12. Thus, if anything, Swain supports a finding that Steele’s
action of driving over a pothole and parking the bus on top of pothole fall within the
definition of “operation of a motor vehicle.”
{¶36} I would find that the injury here occurred due to Steele’s alleged
negligent operation of the school bus, i.e., the action of driving the bus over a large
pothole and parking it there. Thus, I would find that the R.C. 2744.02(B)(1) exception
to immunity applies to the BOE.
{¶37} In finding that an exception to immunity applies, I would then move on
- 13 -
to the third tier of the immunity analysis, which is to consider whether there exists a
defense or immunity to liability under R.C. 2744.03.
{¶38} R.C. 2744.03(A) lists five particular defenses or immunities that a
political subdivision may assert to establish non-liability: (1) the employee involved
was engaged in the performance of a judicial, quasi-judicial, prosecutorial, legislative,
or quasi-legislative function; (2) the employee’s conduct, other than negligent
conduct, was required by law or authorized by law; (3) the action or failure to act by
the employee that gave rise to the claim of liability was within the employee’s
discretion with respect to policy-making, planning, or enforcement powers; (4) the
action or failure to act by the political subdivision or employee resulted in injury to a
person who had been convicted of or pleaded guilty to a criminal offense and who
was serving any portion of the person's sentence by performing community service
work for or in the political subdivision; and (5) the injury resulted from the exercise of
judgment or discretion in determining whether to acquire, or how to use, equipment,
supplies, materials, personnel, facilities, and other resources. None of these
defenses apply here.
{¶39} Thus, I would find that the BOE was not entitled to immunity.
{¶40} While I would find that the BOE is not entitled to immunity based on the
alleged negligence by Steele, I would still find that Steele is entitled to immunity. The
reason for the difference being that under the third tier of the immunity analysis, R.C.
2744.03(A)(6) provides for broader immunity for employees:
(6) In addition to any immunity or defense referred to in division (A)(7)
of this section and in circumstances not covered by that division or
sections 3314.07 and 3746.24 of the Revised Code, the employee is
immune from liability unless one of the following applies:
(a) The employee's acts or omissions were manifestly outside the
scope of the employee's employment or official responsibilities;
(b) The employee's acts or omissions were with malicious purpose, in
bad faith, or in a wanton or reckless manner;
- 14 -
(c) Civil liability is expressly imposed upon the employee by a section of
the Revised Code. * * *.
{¶41} In this case, there is no allegation that Steele was acting outside of the
scope of her employment as a bus driver. Moreover, Steele’s actions of driving over,
and ultimately parking on top of, a large pothole may constitute negligence. But
these actions were not undertaken with malice, bad faith, or in a wanton and reckless
manner. Finally, there is no allegation that the Revised Code expressly imposes civil
liability on Steele.
{¶42} In conclusion, for the reasons stated above, I would find that the R.C.
2744.02(B)(1) exception to immunity applies to reinstate liability as to the BOE and
that no defenses to immunity apply to the BOE. Therefore, I respectfully dissent from
that part of the majority opinion holding that the R.C. 2744.02(B)(1) exception to
immunity does not apply to the BOE and that the BOE is entitled to immunity.
Moreover, I would find that Steele is entitled to immunity based on R.C.
2744.03(A)(6), which the majority does not discuss. Therefore, I concur in judgment
only with that part of the majority opinion that determines that Steele is entitled to
immunity.