Infinite Vision USA, L.L.C. v. Duke Energy Ohio, Inc.

[Cite as Infinite Vision USA, L.L.C. v. Duke Energy Ohio, Inc., 2021-Ohio-1986.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
WARREN COUNTY
INFINITE VISION USA, LLC, :
Appellant, : CASE NO. CA2020-01-005
: OPINION
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:
DUKE ENERGY, INC., :
Appellee. :
CIVIL APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS
Case No. 19CV92600
Lindhorst & Dreidame Co., LPA, Bradley D. McPeek, 312 Walnut Street, Suite 3100,
Cincinnati, Ohio 45202, for appellant
Duke Energy Office of General Counsel, James E. McLean, 139 E. 4th Street, M/C 1212-
M, Cincinnati, Ohio 45202, for appellee
S. POWELL, J.
{¶ 1} Appellant, Infinite Vision USA, LLC ("Infinite Vision"), appeals the decision of
the Warren County Court of Common Pleas granting the Civ.R. 12(B)(1) motion to dismiss
filed by appellee, Duke Energy Ohio, Inc. ("Duke Energy"), upon the trial court finding it
lacked subject-matter jurisdiction to proceed. Infinite Vision also appeals the trial court's
decision overruling its motion for discovery, as well as its request for an evidentiary hearing,
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before granting Duke Energy's motion to dismiss. For the reasons outlined below, we
reverse the trial court's decision granting Duke Energy's Civ.R. 12(B)(1) motion to dismiss
and remand this matter to the trial court for further proceedings.
Infinite Vision's Complaint
{¶ 2} On September 12, 2019, Infinite Vision filed a complaint against Duke Energy,
an electric distribution utility doing business in Ohio, alleging claims of breach of express
and implied contract, promissory estoppel, negligent misrepresentation, and unjust
enrichment. Infinite Vision's claims are based on the following factual allegations.
{¶ 3} Infinite Vison is a small, minority owned energy services company that started
in 2012. As an energy services company, Infinite Vision provides energy consulting and
contracting services to its customers. As part of this business, Infinite Vison will analyze a
customer's energy consumption, create an energy savings plan to improve that customer's
energy efficiency, and implement that energy savings plan by providing the labor,
equipment, and materials necessary to the customer.
{¶ 4} Since its inception, Infinite Vision has participated in Duke Energy's energy
efficiency program known as the "Super $avers Program" as a "trade ally" of Duke Energy.
The Super $avers Program, a program that Duke Energy refers to as the "Smart$aver
Incentive Program," provides Duke Energy's eligible nonresidential customers the
opportunity to lessen their energy costs and contribute to a cleaner environment through
the installation of high-efficient equipment in their facilities. The Super $avers Program
defines a "trade" ally" as "any third party who promotes the sale and/or installation of the
high-efficiency equipment" for the eligible nonresidential customers of Duke Energy.
{¶ 5} Trade allies, like Infinite Vision, perform the work and provide the equipment
necessary to achieve the goal of the Super $avers Program, i.e., lower energy costs for
Duke Energy's eligible nonresidential customers. Duke Energy benefits from the Super
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$avers Program and the energy efficiency created from the work done by its trade allies
through better grid reliability and lower greenhouse gas emissions. Trade allies are paid
for their work through either (1) direct payments from Duke Energy's eligible nonresidential
customers or (2) via rebates and other incentives paid directly from Duke Energy.
{¶ 6} According to Infinite Vision, the rebates and incentives Duke Energy offers to
its trade allies are crucial to the Super $aver Program's success given their impact of
reducing the cost of energy efficiency. Also according to Infinite Vision, Duke Energy's
trade allies depend on these rebates and incentives, as well as accurate and timely
information from Duke Energy about these rebates and incentives, when its trade allies are
pricing and bidding on jobs through the Super $avers Program.
{¶ 7} In October of 2017, Infinite Vision entered into a contract with Vantiv, LLC
("Vantiv") to provide Vantiv with certain labor and materials necessary to replace older light
fixtures in Vantiv's facilities. This included the installation of a number of high efficiency 2x4
LED light panels. Infinite Vision alleges that it was to be paid $387,126 for its work under
this contract: $117,126 from Vantiv with the remaining $270,000 from Duke Energy.
{¶ 8} In February of 2018, Infinite Vision finished its work at Vantiv's facilities. After
its work was finished, Infinite Vision submitted a payment application to Duke Energy. Duke
Energy responded and paid Infinite Vision $135,000, half of what Infinite Vision believed it
was owed. Upon receiving Duke Energy's payment, Infinite Vision contacted Duke Energy
and demanded it pay the remaining $135,000 that Infinite Vision believed it was still owed.
Duke Energy refused Infinite Vision's demand by claiming the rebate amount for the
equipment Infinite Vision had installed in Vantiv's facilities had been reduced by 50% by the
Public Utilities Commission of Ohio ("PUCO") through an order that PUCO had issued on
September 27, 2017.
{¶ 9} Despite this, Infinite Vision again demanded Duke Energy pay the additional
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$135,000 that it believed it was owed. Duke Energy again refused. Infinite Vision then filed
the instant lawsuit against Duke Energy specifically alleging that Duke Energy had
breached its "contractual duties" and "other obligations" it owed to Infinite Vision to advise
it of the "substantial reductions" in Duke Energy's rebate amounts, thereby subjecting Duke
Energy to liability for breach of express and implied contract, promissory estoppel, negligent
misrepresentation, and unjust enrichment.
Duke Energy's Motion to Dismiss
{¶ 10} On October 10, 2019, Duke Energy filed a Civ.R. 12(B)(1) motion to dismiss
for lack of subject-matter jurisdiction. In support of its motion, Duke Energy alleged that
PUCO had exclusive jurisdiction over this matter pursuant to R.C. 4905.26. "R.C. 4905.26
confers exclusive jurisdiction on PUCO to determine whether any 'service rendered' by a
public utility or any 'practice affecting or relating to any service furnished by a public utility,
or in connection with such service' is in any respect unjust, unreasonable, or in violation of
law." Pro Se Commercial Properties v. Illum. Co., 8th Dist. Cuyahoga No. 92961, 2010-
Ohio-516, ¶ 9. Specifically, as provided by R.C. 4905.26:
Upon complaint in writing against any public utility by any
person, firm, or corporation, or upon the initiative or complaint
of the public utilities commission, that any rate, fare, charge, toll,
rental, schedule, classification, or service, or any joint rate, fare,
charge, toll, rental, schedule, classification, or service rendered,
charged, demanded, exacted, or proposed to be rendered,
charged, demanded, or exacted, is in any respect unjust,
unreasonable, unjustly discriminatory, unjustly preferential, or in
violation of law, or that any regulation, measurement, or practice
affecting or relating to any service furnished by the public utility,
or in connection with such service, is, or will be, in any respect
unreasonable, unjust, insufficient, unjustly discriminatory, or
unjustly preferential, or that any service is, or will be, inadequate
or cannot be obtained, and, upon complaint of a public utility as
to any matter affecting its own product or service, if it appears
that reasonable grounds for complaint are stated, the
commission shall fix a time for hearing and shall notify
complainants and the public utility thereof.
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Therefore, "where PUCO has jurisdiction as provided by this statute, that jurisdiction is
exclusive and reviewable only by the Supreme Court of Ohio." Jones v. Ohio Edison Co.,
11th Dist. Ashtabula No. 2014-A-0015, 2014-Ohio-5466, ¶ 9, citing State ex rel. N. Ohio
Tel. Co. v. Winter, 23 Ohio St.2d 6 (1970).
{¶ 11} Attached to Duke Energy's motion to dismiss was PUCO's September 27,
2017 order mandating Duke Energy reduce the energy efficiency incentives paid out from
the Super $avers Program. Referring to that order, Duke Energy alleged that Infinite Vision
had used an "outdated application" when it requested a rebate payment "at the higher rate
that existed" before PUCO issued its September 27, 2017 order for the work it completed
at Vantiv's facilities in February of 2018. Therefore, according to Duke Energy, this case
falls within PUCO's exclusive jurisdiction because (1) PUCO's administrative expertise is
required to resolve this dispute since Infinite Vision's claims involve Duke Energy's
procedures for administering its Super $avers Program in accordance with PUCO's
September 27, 2017 order, and because (2) Duke Energy's reduced rebate payments
issued to its trade allies after PUCO issued its September 27, 2017 order, as well as the
notification of PUCO's September 27, 2017 order to its trade allies, is a practice normally
authorized by Duke Energy as part of its Super $avers Program.
Trial Court's Decision to Grant Duke Energy's Motion to Dismiss
{¶ 12} On January 8, 2020, the trial court issued a decision granting Duke Energy's
Civ.R. 12(B)(1) motion to dismiss. In so holding, the trial court stated, "PUCO has exclusive
jurisdiction over matters involving public utilities, including rates and charges,
classifications, and service, the Court finds that PUCO has exclusive jurisdiction over this
matter and this Court does not have subject-matter jurisdiction in this case." As noted by
the trial court, this is because:
The allegations in this case, include that [Duke Energy]
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breached its contract with [Infinite Vision] when it failed to
properly notify [Infinite Vision] of a change in the amount of
rebates offered under the Duke Energy Smart $aver Program.
[Duke Energy's] Smart $aver Program is governed by PUCO.
PUCO further governs the rebates that make the basis for
[Infinite Vision's] claims and in fact, the rebate reduction that is
the basis of [Infinite Vision's] complaint was ordered by PUCO.
Therefore, the Court finds that PUCO's administrative expertise
is necessary to decide this claim and the acts complained of are
practices normally authorized by [Duke Energy as part of the
Smart $aver Program mandated by PUCO].1
Appeal and Assignments of Error
{¶ 13} Infinite Vision now appeals the trial court's decision granting Duke Energy's
Civ.R. 12(B)(1) motion to dismiss, raising the following two assignments of error for review.
{¶ 14} Assignment of Error No. 1:
{¶ 15} THE TRIAL COURT ERRED WHEN IT SUSTAINED THE APPELLEE DUKE
ENERGY OHIO, INC.'S MOTION TO DISMISS FOR LACK OF SUBJECT-MATTER
JURISDICTION.
{¶ 16} Assignment of Error No. 2:
{¶ 17} THE TRIAL COURT ERRED WHEN IT OVERRULED THE APPELLANT
INFINITE VISION USA, LLC'S MOTION FOR DISCOVERY AND A HEARING.
{¶ 18} In its first assignment of error, Infinite Vision argues the trial court erred by
granting Duke Energy's Civ.R. 12(B)(1) motion to dismiss for lack of subject-matter
jurisdiction. In its second assignment of error, Infinite Vision argues the trial court erred
when it denied its motion for discovery, as well as its request for an evidentiary hearing on
the issue of PUCO's exclusive subject-matter jurisdiction. Finding merit to Infinite Vision's
second assignment of error, we reverse the trial court's decision granting Duke Energy's
1 We note that the trial court's decision stated that "the acts complained of are practices normally authorized
by PUCO," rather than Duke Energy. Given the trial court's holding, we find the trial court's reference to
PUCO instead of Duke Energy within that sentence was a clerical error.
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Civ.R. 12(B)(1) motion to dismiss and remand this matter to the trial court for further
proceedings.
Civ.R. 12(B)(1) Motion to Dismiss for Lack of Subject-Matter Jurisdiction
{¶ 19} "A trial court must grant a Civ.R. 12(B)(1) motion to dismiss for lack of subject-
matter jurisdiction if the complaint fails to raise a cause of action cognizable by the forum."
Miller v. Ohio State Highway Patrol, 12th Dist. Fayette No. CA2019-08-017, 2020-Ohio-
3231, ¶ 17, citing State ex rel. Bush v. Spurlock, 42 Ohio St.3d 77, 80 (1989). This review
involves a determination of whether the plaintiff has alleged any cause of action for which
the trial court has authority to decide. Ferreri v. Millford Exempted Village School Dist. Bd.
of Edn., 12th Dist. Clermont Nos. CA2007-04-044 and CA2007-04-050, 2008-Ohio-4314, ¶
12; Bla-Con Industries, Inc. v. Miami Univ., 12th Dist. Butler No. CA2006-06-127, 2007-
Ohio-785, ¶ 7 ("[t]his [review] involves a determination of whether the complaint raised any
cause of action cognizable by the forum in which it was filed").
{¶ 20} The trial court is not confined to the allegations raised in the complaint when
ruling on such a motion and may consider material pertinent to that inquiry without
converting the motion into one for summary judgment. McGuffey v. LensCrafters, Inc., 141
Ohio App.3d 44, 50 (12th Dist.2001), citing Southgate Development Corp. v. Columbia Gas
Corp., 48 Ohio St.2d 211 (1976), paragraph one of the syllabus; and Shockey v. Fouty, 106
Ohio App.3d 420, 424 (4th Dist.1995). This court conducts a de novo review of a trial court's
decision on a Civ.R. 12(B)(1) motion to dismiss for lack of subject-matter jurisdiction.
McKenzie v. Meijer, Inc., 12th Dist. Clermont No. CA2016-09-061, 2017-Ohio-1495, ¶ 10.
PUCO's Exclusive Jurisdiction Under R.C. 4905.26
{¶ 21} "PUCO has exclusive jurisdiction over most matters concerning public
utilities." Allstate Ins. Co. v. Cleveland Elec. Illum. Co., 119 Ohio St.3d 301, 2008-Ohio-
3917, ¶ 5. This includes matters such as rates and charges, classifications, and service.
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Pac. Indem. Co. v. Deems, 10th Dist. Franklin No. 19AP-349, 2020-Ohio-250, ¶ 9. Trial
courts, however, "retain limited subject-matter jurisdiction over a matter that is pure
common-law tort or contract action involving utilities that are regulated by the PUCO." Flex
Technologies v. Am. Elec. Power Co., Inc., 5th Dist. Tuscarawas 2015 AP 01 0004, 2015-
Ohio-3456, ¶ 10, citing State ex rel. Illuminating Company v. Cuyahoga County Court of
Common Pleas, 97 Ohio St.3d 69, 2002-Ohio-5312. That is to say, "[t]he broad jurisdiction
of PUCO over service-related matters does not affect 'the basic jurisdiction of the court of
common pleas * * * in other areas of possible claims against utilities, including pure tort and
contract claims.'" Corrigan v. Illum. Co., 122 Ohio St.3d 265, 2009-Ohio-2524, ¶ 9, quoting
State ex rel. Ohio Edison Co. v. Shaker, 68 Ohio St.3d 209, 211 (1994). Therefore, in
reviewing the trial court's decision to grant Duke Energy's motion to dismiss, we must
determine whether the claims Infinite Vision raises in its complaint are within PUCO's
exclusive jurisdiction or whether its claims are pure tort and contract claims that do not
require a consideration of statutes and regulations administered and enforced by PUCO.
{¶ 22} The Ohio Supreme Court has adopted a two-part test to apply when
determining whether PUCO has exclusive jurisdiction: "(1) whether the PUCO's
administrative expertise is required to resolve the issue in dispute, and (2) whether the act
complained of constitutes a practice normally authorized by the utility." Mosley v. Dayton
Power & Light Co., 2d Dist. Montgomery No. 27301, 2017-Ohio-985, ¶ 10, citing Allstate
Ins., 2008-Ohio-3917 at ¶ 11-13. "If the answer to both questions is in the affirmative, the
claim is within PUCO's exclusive jurisdiction." Saks v. E. Ohio Gas Co., 8th Dist. Cuyahoga
No. 97770, 2012-Ohio-2637, ¶ 12. However, "[i]f the answer to either question is 'No,' the
claim is not within the PUCO's exclusive jurisdiction." DiFranco v. FirstEnergy Corp., 134
Ohio St.3d 144, 2012-Ohio-5445, ¶ 28. Merely casting the allegations in the complaint to
sound in tort or in contract is not sufficient to confer jurisdiction upon the trial court. Higgins
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v. Columbia Gas of Ohio, Inc., 136 Ohio App.3d 198, 202 (7th Dist.2000). The trial court
must instead "look to the substance of the allegations in the complaint to determine the
proper jurisdiction." Jones, 2014-Ohio-5466 at ¶ 11. This is because "[t]he PUCO is not a
court and has no power to ascertain and determine legal rights and liabilities." DiFranco at
¶ 20, citing State ex rel. Dayton Power & Light Co. v. Riley, 53 Ohio St.2d 168, 170 (1978);
and New Bremen v. Pub. Util. Comm., 103 Ohio St. 23, 30-31 (1921).
Analysis
{¶ 23} Given the record properly before this court, we find the trial court acted too
hastily by granting Duke Energy's Civ.R. 12(B)(1) motion to dismiss without first allowing
discovery to be conducted. This is because, as the record now stands, there is very little
evidence to conclusively establish whether PUCO has exclusive jurisdiction over this case
and the allegations raised by Infinite Vision within its complaint. We find this to be
particularly true as it relates to the first part of the Ohio Supreme Court's two-part test as
set forth above, i.e., whether PUCO's administrative expertise is actually required to resolve
this dispute. That is to say nothing of whether the acts Infinite Vision complains within its
complaint truly constitutes a practice (or practices) normally authorized by Duke Energy.
{¶ 24} For instance, despite the trial court's findings, we still believe there are
questions as to whether PUCO's administrative expertise is necessary to resolve the issue
of whether Duke Energy breached its contract with Infinite Vision when it failed to properly
notify Infinite Vision of the change in the amount of rebates offered under Duke Energy's
Smart $aver Program. As the record now stands, this appears to be a dispute that would
need little, if any, of PUCO's administrative expertise. More discovery is necessary to make
a conclusive determination, however. The same is true as it relates to whether the acts
underlying Infinite Vision's claims of promissory estoppel, negligent misrepresentation, and
unjust enrichment are truly practices normally engaged in by Duke Energy. These are just
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some of the many questions left unresolved given the scant record presented to this court
on appeal.
{¶ 25} In light of the foregoing, because we find the record needs to be more fully
developed before it can be conclusively determined whether PUCO has exclusive
jurisdiction over this case, we reverse the trial court's decision granting Duke Energy's
Civ.R. 12(B)(1) motion to dismiss for lack of subject-matter jurisdiction and remand this
matter to the trial court for further proceedings. Upon remand, such proceedings shall
include, but need not be limited to, allowing the parties to engage in discovery. Following
discovery, and if deemed necessary by the trial court, these proceedings may also include
the trial court holding an evidentiary hearing on the question of PUCO's exclusive
jurisdiction over this case under R.C. 4905.26. Accordingly, based on the reasons outlined
above, and upon finding merit to Infinite Vision's second assignment of error only, Infinite
Vision's second assignment of error is sustained and Infinite Vision's first assignment
alleging the trial court erred by granting Duke Energy's Civ.R. 12(B)(1) motion to dismiss is
overruled as moot.
{¶ 26} Judgment reversed and remanded for further proceedings.
PIPER, P.J., and HENDRICKSON, J., concur.
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