Austin v. Warrensville Hts.

[Cite as Austin v. Warrensville Hts., 2021-Ohio-1950.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JAMES AUSTIN, ET AL., :
Plaintiffs-Appellants, :
No. 109791
v. :
CITY OF WARRENSVILLE
HEIGHTS, ET AL., :
Defendants-Appellees. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: June 10, 2021
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-19-916635
Appearances:
Forbes, Fields & Associates Co., L.P.A., Darrell A. Fields,
and John M. Sayers, for appellants.
Mazanec, Raskin & Ryder Co., L.P.A., James A. Climer,
Frank H. Scialdone, and Amily A. Imbrogno; Teresa
Metcalf Beasley, City Law Director, for appellee City of
Warrensville Heights.
LARRY A. JONES, SR., P.J.:
Plaintiffs-appellants James and Denise Austin (“the Austins”)
appeal from the trial court’s judgment granting defendant-appellee city of
Warrensville Heights’ (“Warrensville Heights”) motion for judgment on the
pleadings. For the reasons that follow, we affirm.
Factual and Procedural History
The Austins initiated this action in June 2019; the case revolved
around their purchase of real estate on Dandridge Drive in Warrensville Heights.
The Austins alleged that they purchased the property unaware that it was subject
to a special tax assessment in the amount of $34,829.27 for a public improvement.
Specifically, an employee of the city’s building department represented to
Barristers of Ohio, L.L.C., the title agency involved in the transaction, that the
property was not subject to any special assessments. In addition to the city of
Warrensville Heights, the other named defendants were the sellers of the property,
Swarup and Nutan Mukherjee, and the title company, Barristers of Ohio, L.L.C.
This appeal relates to the transaction as it pertained to Warrensville Heights,
against which the plaintiffs brought a claim for negligent misrepresentation; it
does not implicate the other defendants.
Warrensville Heights filed an answer to the Austins’ complaint and
also a motion for judgment on the pleadings that the Austins opposed. In its
motion, the city contended it was entitled to judgment on the pleadings on the
grounds of (1) immunity under R.C. 2744.02; (2) the Austins’ inability to establish
the elements of negligent misrepresentation; and (3) its lack of a duty owed to the
Austins. The trial court granted the city’s motion for judgment on the pleadings,
and after seeking and obtaining Civ.R. 54 certification that there is “no just reason
for delay,” the Austins appealed and set forth the following three assignments of
error for our review:
I. The trial court erred in finding that appellee city of Warrensville
Heights was immune from liability, when the court granted
appellee city of Warrensville Heights’s motion for judgment on the
pleadings.
II. The trial court erred in finding that appellants James and Denise
Austin could not establish their claim for negligent
misrepresentation, when the court granted appellee city of
Warrensville Heights’s motion for judgment on the pleadings.
III. The trial court erred in finding that appellee city of Warrensville
Heights did not owe a duty of care to appellants James and Denise
Austin, when it granted appellee city of Warrensville Heights’s
motion for judgment on the pleadings.
Law and Analysis
Motion for Judgment on the Pleadings
Civ.R. 12(C) allows any party to move for judgment on the pleadings
after the time for pleading has closed. Motions under Civ.R. 12(C) “are specifically
for resolving questions of law,” and a court may consider both the complaint and
answer when resolving such a motion. State ex rel. Midwest Pride IV, Inc. v.
Pontious, 75 Ohio St.3d 565, 570, 664 N.E.2d 931 (1996), citing Peterson v.
Teodosio, 34 Ohio St.2d 161, 166, 297 N.E.2d 113 (1973). “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 doubt, that the plaintiff could prove
no set of facts in support of his [or her] claim that would entitle him [or her] to
relief.” Pontious at id., citing Lin v. Gatehouse Constr. Co., 84 Ohio App.3d 96, 99,
616 N.E.2d 519 (8th Dist.1992).
Because an appeal of a decision granting a motion for judgment on
the pleadings under Civ.R. 12(C) raises only questions of law, the standard for
appellate review is de novo. Rayess v. Educational Comm. for Foreign Med.
Graduates, 134 Ohio St.3d 509, 2012-Ohio-5676, 983 N.E.2d 1267, ¶ 18, citing
Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44,
¶ 5.
R.C. Chapter 2744
The Austins’ first assignment of error challenges the trial court’s
finding that Warrensville Heights was immune from liability.
To determine whether a political subdivision enjoys immunity under
the Political Subdivision Tort Liability Act, as codified in R.C. Chapter 2744, we
employ the three-tiered analysis set forth in Colbert v. Cleveland, 99 Ohio St.3d
215, 2003-Ohio-3319, 790 N.E.2d 781.
“The first tier is the general rule that a political subdivision is
immune from liability incurred in performing either a governmental function or
proprietary function. R.C. 2744.02(A)(1). However, that immunity is not absolute.
R.C. 2744.02(B).” Colbert at ¶ 7, citing Greene Cty. Agricultural Soc. v. Liming,
89 Ohio St.3d 551, 556-557, 733 N.E.2d 1141 (2000), and Cater v. Cleveland, 83
Ohio St.3d 24, 28, 697 N.E.2d 610 (1998).
“The second tier of the analysis requires a court to determine
whether any of the five exceptions to immunity listed in R.C. 2744.02(B) apply to
expose the political subdivision to liability.” Colbert at ¶ 8, citing Cater at id. The
exceptions under R.C. 2744.02(B) are (1) the negligent operation of a motor
vehicle by an employee, R.C. 2744.02(B)(1), (2) the negligent performance of
proprietary functions, R.C. 2744.02(B)(2), (3) the negligent failure to keep public
roads open and in repair, R.C. 2744.02(B)(3), (4) the negligence of employees
occurring within or on the grounds of, and due to physical defects within or on the
grounds of, certain buildings used in connection with the performance of
governmental functions, R.C. 2744.02(B)(4), or (5) express imposition of liability
by statute, R.C. 2744.02(B)(5).
If any of the exceptions to immunity in R.C. 2744.02(B) do apply and
no defense to that section protects the political subdivision from
liability, * * * the third tier of the analysis requires a court to
determine whether any of the defenses in R.C. 2744.03 apply, thereby
providing the political subdivision a defense against liability.
Colbert at ¶ 9.
It is undisputed that the city of Warrensville Heights is a political
subdivision and therefore enjoys blanket immunity under the first Colbert tier. We
next consider the crux of this appeal ─ whether an exception to immunity under
R.C. 2744.02(B) applies. The Austins contend that the exception under R.C.
2744.02(B)(2) ─ the negligent performance of proprietary functions ─ applies.
Under that exception, with certain limitations, “political subdivisions are liable for
injury, death, or loss to person or property caused by the negligent performance of
acts by their employees with respect to proprietary functions of the political
subdivisions.” R.C. 2744.02(B)(2).
The Austins contend that the disclosure of whether property is
subject to special assessments is a proprietary function. On the other hand,
Warrensville Heights maintains that it is a governmental function.
R.C. 2744.01 provides lists of specific functions that are considered
governmental and proprietary functions. R.C. 2744.01(C)(2) (list of governmental
functions); R.C. 2744.01(G)(2) (list of proprietary functions). That statute also
contains general definitions for governmental functions and proprietary functions
so that if a function is not enumerated in either list, it can be determined whether
such function is governmental or proprietary. R.C. 2744.01(C)(1) (general
definition of governmental function); R.C. 2744.01(G)(1) (general definition of
proprietary function).
It has been noted that the simple difference between the definitions
for proprietary and governmental functions in R.C. 2744.01(C)(1) and (G)(1) is that
proprietary functions include activities customarily performed by
nongovernmental persons whereas governmental functions are activities that are
not customarily engaged in by nongovernmental persons. See Foland v.
Englewood, 2d Dist. Montgomery No. 22940, 2010-Ohio-1905, ¶ 49. In
determining whether a function is customarily engaged in by nongovernmental
persons, the central consideration is the specific activity, not the general activity.
Greene Cty. Agricultural Soc. v. Liming, 89 Ohio St.3d 551, 560, 733 N.E.2d 1141(2000).
According to the Austins, the information (or lack thereof) given by
the city’s building department was in execution of a proprietary function; they rely,
in part, on Liming in support of their contention. In Liming, an agricultural
society, a governmental entity that operated a hog contest at the county fair,
brought action against a contestant in the contest based on violation of the rules of
the contest. The contestant filed a counterclaim against the society, and the Ohio
Supreme Court considered whether the operation of the contest was a
governmental or proprietary function.
The court held that the “conducting of a livestock competition at a
county fair by a county agricultural society is a proprietary function pursuant to
R.C. Chapter 2744.” Id. at 561. It reasoned as follows:
It is apparent to us that even though conducting a county fair may be
an activity not customarily engaged in by nongovernmental persons,
conducting a livestock competition is an activity customarily engaged
in by nongovernmental persons. Any organization, whether private or
public, can hold a competition of this type. The consideration that
many such competitions are conducted within county fairs cannot
change the fact that there is nothing inherently governmental about
them. In this situation, educational value alone is not enough to
convert what otherwise would not be a governmental function into
something that is a governmental function. We see no reason to
distinguish a livestock competition at a county fair from any other
similar competition, such as a livestock competition held elsewhere
than at a county fair, or a dog or cat show, or an art show, or a chili
cook-off, or a beauty pageant, or a car show.
Id. at 560.
We find Liming distinguishable from this case. Here, the activity
was a governmental employee of the city’s building department providing
information that was clearly maintained by the building department. Whereas, in
Liming, the activity was conducting a hog competition. We are not persuaded by
the Austins’ contention that persons other than governmental employees also
disclose whether property is subject to special assessments and, therefore, that
makes it a proprietary function. This court has previously held that,
“R.C. 2744.01(C) does not exclude from the definition of
governmental functions those functions sometimes performed by
private entities for political subdivisions. In fact, many of the
specifically enumerated governmental functions set forth in R.C.
2744.01(C)(1) are commonly performed by private entities for
political subdivisions * * *.”
Lyons v. Teamhealth Midwest Cleveland, 8th Dist. Cuyahoga No. 96336, 2011-
Ohio-5501, ¶ 46, quoting McCloud v. Nimmer, 72 Ohio App.3d 533, 595 N.E.2d
492 (8th Dist.1991).
Thus, a political subdivision may use independent contractors to
perform a governmental function without transforming the activity involved into a
proprietary function. See, e.g., Craycraft v. Simmons, 2d Dist. Montgomery No.
24313, 2011-Ohio-3273. In Craycraft, the plaintiff asserted that the provision of
school security was a proprietary function because independent contractors
sometimes perform the job. The Second Appellate District rejected the assertion,
stating:
We do not dispute that a school may choose to contract with a private
company to provide security. But this does not negate the fact that
the nature of the work involved, providing security for public school
students on school grounds, is a governmental function. [Plaintiff’s]
argument fails to recognize that a political subdivision may use
independent contractors to perform a governmental function. See,
e.g., Howell v. Canton, [9th Dist.] Stark App. No. 2007CA00035,
2008-Ohio-5558 (involving an independent contractor hired to
perform a governmental function). [Plaintiff] cites nothing to
establish that doing so transforms the activity involved from a
governmental function into a proprietary function.
Craycraft at ¶ 22.
Similarly, here, just because other, nongovernmental persons may
also disclose the existence of a special assessment does not automatically make it a
proprietary function. We agree with the trial court’s finding in this case that “the
city’s operation of a building department is a governmental function.” Trial court’s
Memorandum of Opinion and Order, January 13, 2020, ¶ 7, citing Skiles v.
Bellevue Dev. Corp., 6th Dist. Sandusky No. S-07-015, 2008-Ohio-78, ¶ 51. We
find that the city’s employee who provided the subject information did so in his or
her capacity as a governmental employee. Thus, the Austins failed to establish the
second-tier of immunity under Cater; that is, that an exception to immunity listed
in R.C. 2744.02(B) applied.
In light of the above, the first assignment of error is overruled.
Supplying False Information in a Transaction in which Supplier has a
Pecuniary Interest
For their second assignment of error, the Austins contend that the
trial court erred in finding that they could not establish a claim for negligent
misrepresentation.
The elements of negligent misrepresentation are (1) one who, in the
course of his or her business, profession, or employment, or in any other
transaction in which he or she has a pecuniary interest; (2) supplies false
information for the guidance of others in their business transactions; (3) is subject
to liability for pecuniary loss caused to them by their justifiable reliance upon the
information; and (4) if he or she fails to exercise reasonable care or competence in
obtaining or communicating the information. Delman v. Cleveland Hts., 41 Ohio
St.3d 1, 4, 534 N.E.2d 835 (1989). The Austins specifically challenge the trial
court’s finding that the city did not have a pecuniary interest in the special
assessment.
Initially, we note that the city’s building department is not in the
business of advising or rendering opinions to its citizens or potential citizens.
Rather, a municipality’s building department’s interest is generally in enforcing
building codes to maintain the housing stock and for the purpose of ensuring a
healthful, safe, and sanitary environment for the municipality’s occupants. See
State ex rel. Eaton v. Price, 168 Ohio St. 123, 151 N.E.2d 523 (1958).
In regard to the pecuniary interest component of a negligent
misrepresentation claim, we find that the Austins’ claim failed as a matter of law.
It is true that the city received the money from the assessment, but the city has no
pecuniary interest in and of itself in providing information regarding assessments.
“The foundation of special assessments for public improvements, is the special
benefit derived by the owners of property, over and above the rest of the
community.” Wewell v. Cincinnati, 45 Ohio St. 407, 424, 15 N.E. 196 (1887); see
also Adams v. Toledo, 6th Dist. Lucas No. L-80-034, 1980 Ohio App. LEXIS 12396(Dec. 5, 1980) (homeowners must demonstrate by clear and convincing evidence
that their property did not benefit from special assessment for public
improvement). Thus, it is presumed that the pecuniary interest inured to the
subject homeowners, including the Austins, and not to the city.
At the trial court level, the Austins relied on Patel v. Univ. of Toledo,
10th Dist. Franklin No. 16AP-78, 2017-Ohio-7132, for the proposition that the city
of Warrensville Heights had a pecuniary interest in providing information about
the special assessment. We find Patel distinguishable from this case.
In Patel, the plaintiff enrolled in the University of Toledo’s graduate
Bachelor of Science in nursing to doctor of nursing program (“BSN-DNP
program”) in August 2012. Id. at ¶ 2. At the time, the BSN-DNP program was
new, unaccredited, and the plaintiff was one of three students in the inaugural
class.
The plaintiff was concerned about the lack of accreditation, and on
the first day of classes, she asked the dean of the college of nursing when the BSN-
DNP program would be accredited. According to the plaintiff, the dean answered
“unequivocally” that the BSN-DNP program would be accredited before the first
student graduated from the program. Id. at ¶ 3. Another student in the inaugural
class stated she heard the plaintiff’s question and the dean’s response. The
plaintiff claimed that if it was not possible to graduate from an accredited program,
she was prepared to leave the university that first day and enroll in a different
accredited program. The dean testified, however, that he would have “never” told
the plaintiff that the BSN-DNP program would be accredited before the first
student graduated because he knew what those standards were and the statement
“would not [have been] true.” Id.
In January 2014, the plaintiff contacted her graduate nursing
advisor to determine whether she could change her plan of study and graduate in
August 2015. The plaintiff wanted to work in a residency program that began in
September or October 2015. Her advisor consulted with the nursing program
director and they indicated the plaintiff could change her course of study and
graduate in August 2015 if she took classes during the summer.
Soon after, the plaintiff learned that the university’s BSN-DNP
program would not be accredited by August 2015. The plaintiff sought to transfer
to the university’s master-in-nursing program, which was accredited, but the
nursing program director informed her that was not possible.
Meanwhile, the dean of the nursing school expected the BSN-DNP
program to be accredited in May 2016. If the university’s application for
accreditation was approved, the accreditation would have related back to the date
of the site visit, which occurred in fall 2015. Thus, the faculty advised the plaintiff
to graduate in December 2015 to have a possibility of graduating from an
accredited program. If a student does not graduate from an accredited program,
the student is ineligible to take the national certification examination resulting in
licensure, and in Ohio, cannot work as an advanced practice nurse. Id. at ¶ 5.
The plaintiff withdrew from the university in fall 2014, enrolled in
another university’s DNP program, and graduated in December 2015. The plaintiff
thereafter filed a complaint against the University of Toledo and the dean of the
nursing school alleging negligent misrepresentation, among other claims. The
defendants moved for summary judgment and the court of claims granted it. On
appeal, the Tenth Appellate District found that the plaintiff did present a genuine
issue of material fact regarding whether the University of Toledo (but not the dean)
had a pecuniary interest since the university had an interest in the students
remaining in the BSN-DNP program and for the program to expand.
The within case is distinguishable from Patel. The pecuniary
interest the university had in the plaintiff was patently obvious, inured directly to
the university, and was used to induce the student to remain in the school’s
program. Here, however, as mentioned, special assessments such as the one at
issue in this case, are generally directed to the benefit of the citizens rather than
the municipality, and the city did not “induce” the Austins to purchase the property
with the economic benefit in mind the same way the university induced the
plaintiff in Patel to remain in its program.
In light of the above, the second assignment of error is overruled.
Duty
For their final assignment of error, the Austins contend that the trial
court erred in finding that the city did not owe a duty to them.
The trial court stated that there was a requirement that the plaintiffs
had to have a “special relationship” with the city and cited to a federal district court
opinion from the Southern District of Ohio, Lesniak v. Mission Essential
Personnel, LLC, S.D.Ohio No. 2:12-cv-1041, 2013 U.S. Dist. LEXIS 161704 (Nov.
13, 2013). The city also contends that such a special relationship must exist and
cites federal cases in support of same.1 Thus, where negligent misrepresentation
claims have been recognized, the courts have emphasized the existence of a duty to
provide accurate information to the plaintiff that goes beyond the common-law
duty to exercise reasonable care to prevent foreseeable harm. See, e.g., Haddon
View Invest. Co. v. Coopers & Lybrand, 70 Ohio St.2d 154, 156-157, 436 N.E.2d
212 (1982); Delman, 41 Ohio St.3d at 4, 534 N.E.2d 835; McCarthy, Lebit, Crystal
& Haiman Co., L.P.A. v. First Union Mgt., Inc., 87 Ohio App.3d 613, 630-633, 622
N.E.2d 1093 (8th Dist.1993).
1See Doe v. SexSearch.com, 502 F.Supp.2d 719 (N.D.Ohio 2007); Ziegler v. Findlay
Indus., 464 F.Supp.2d 733 (N.D.Ohio 2006); Cuyahoga Metro. Hous. Auth. v. 10-8
Sys., Inc., No. 1:05 CV 0980, 2006 WL 543103 (N.D.Ohio 2006); and Picker Internatl.,
Inc. v. Mayo Found., 6 F.Supp.2d 685 (N.D.Ohio 1998).
“In negligent-misrepresentation claims, the scope of the special duty
and the scope of the permissible recovery will vary on a case-by-case basis.”
Universal Contracting Corp. v. Aug, 1st Dist. Hamilton No. C-030719, 2004-Ohio-
7133, ¶ 16. Where the relationship between the plaintiff and the party negligently
providing information is fiduciary-like, the information provider owes a higher
duty of care, even to those parties not in privity with it. See, e.g, Haddon View
Invest. Co., 70 Ohio St.2d 154, 156, 436 N.E.2d 212.
In this case, there was no fiduciary-like relationship between the
Austins and the city of Warrensville Hts. Moreover, the Austin’s complaint failed
to even allege any actionable duty that the city owed to them. Count 1 of the
complaint pertained to the city and alleged that the city negligently misrepresented
that the subject property was not subject to the assessment, but did not even
contain the word “duty” in any of the allegations. See Complaint, ¶ 1-13 (pertaining
to claim against the city of Warrensville Heights).
Thus, we agree with the trial court’s finding that the Austins
“provide no evidence of a ‘legal relationship’ between the parties, nor do they cite
to any statute or common law in order to establish the City’s duty and its breach,”
and that their “conclusory statements” cannot withstand the city’s motion for
judgment on the pleadings. Trial court’s Memorandum of Opinion and Order,
January 13, 2020, ¶ 14, 15.
The third assignment of error is overruled.
Because the city was entitled to immunity under R.C. Chapter 2744,
the trial court properly granted its motion for judgment on the pleadings. Even if
the city had not been entitled to immunity, the trial court properly found that the
Austins failed as a matter of law to establish the elements for a negligent
misrepresentation claim.
Judgment affirmed.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court 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.
LARRY A. JONES, SR., PRESIDING JUDGE
KATHLEEN ANN KEOUGH, J., and
EMANUELLA D. GROVES, J., CONCUR