In re Henry Cty. Regional Water & Sewer Dist.

[Cite as In re Henry Cty. Regional Water & Sewer Dist., 2020-Ohio-4341.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HENRY COUNTY
IN RE:
CASE NO. 7-20-03
THE HENRY COUNTY REGIONAL
WATER AND SEWER DISTRICT
OPINION
[CITY OF NAPOLEON - APPELLANT]
Appeal from Henry County Common Pleas Court
Trial Court No. 02CV097
Judgment Reversed and Cause Remanded
Date of Decision: September 8, 2020
APPEARANCES:
Teresa L. Grigsby for Appellant
Carl C. Ireland for Appellee
Case No. 7-20-03
ZIMMERMAN, J.
{¶1} Appellant, the City of Napoleon (“Napoleon”), appeals the December
26, 2019 judgment of the Henry County Court of Common Pleas granting the
petition of the petitioner/appellee, the Henry County Regional Water and Sewer
District (“HCRWSD”). For the reasons that follow, we reverse the decision of the
trial court with instructions to dismiss the petition.
{¶2} This case stems from the intended merger of the HCRWSD with the
Northwestern Water and Sewer District (“NWWSD”). The facts relevant to this
appeal are as follows. On July 19, 2002, the Board of County Commissioners of
Henry County petitioned the Henry County Court of Common Pleas for the
organization of a regional water and sewer district as provided by R.C. Chapter
6119. (Doc. No. 1). On July 19, 2002, the trial court issued a preliminary order
establishing the HCRWSD. (Doc. No. 2). After a final hearing, the trial court issued
a final order on January 9, 2003 declaring the HCRWSD a finally and completely
organized political subdivision and approving its plan of operation. (Doc. Nos. 6,
13).
{¶3} On December 9, 1991, the Wood County Commissioners, along with
various townships, villages, and cities situated in Wood County, petitioned the
Wood County Court of Common Pleas for the organization of a regional water and
sewer district as provided by R.C. Chapter 6119. (Doc. No. 15). See also
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Northwood v. Wood Cty. Regional Water & Sewer Dist., 6th Dist. Wood No. WD-
97-010, 1998 WL 46390, *2 (Jan. 30, 1998), rev’d, 86 Ohio St. 3d 92 (1999). The
Wood County Court of Common Pleas established the Wood County Regional
Water and Sewer District (“WCRWSD”) on May 18, 1992, and approved its plan
of operation on September 28, 1993. (Id.); Id. On July 11, 2000, the WCRWSD
petitioned the Wood County Court of Common Pleas to amend the original petition
to change the name of the water and sewer district from the WCRWSD to the
NWWSD, which the court granted on October 2, 2000. (Doc No. 15).
{¶4} On September 4 2019, the HCRWSD Board of Trustees adopted a
resolution “consenting to the merger of the [HCRWSD] with and into the
[NWWSD], authorizing the execution and delivery of an agreement and plan of
merger, authorizing the preparation and filing of a petition for modification of the
district, and authorizing and approving other matters in connection therewith.”
(Doc. No. 15, Ex. G). The NWWSD Board of Trustees adopted a similar resolution
on September 26, 2019. (Doc. No. 15, Ex. H).
{¶5} In accordance with the resolutions adopted by the respective boards of
trustees, the HCRWSD and the NWWSD executed an agreement and plan of merger
on September 26, 2019. (Doc. No. 15, Ex. J2).
{¶6} Further, based on the resolution of the NWWSD Board of Trustees and
the agreement and plan of merger, the NWWSD filed a petition in the Wood County
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Court of Common Pleas on October 31, 2019 requesting an order permitting it to
increase or add to its purposes or to amend its petition. (See Doc. No. 22). Similarly,
on November 5, 2019, the HCRWSD petitioned the Henry County Court of
Common Pleas to approve “the merger of the [NWWSD] and the [HCRWSD]” and
to modify “the manner of selection and the number of the members of the Board of
Trustees of the surviving entity * * * .” (Doc. No. 15). In its petition, the HCRWSD
also requested that the trial court consolidate the Henry County case with the Wood
County case in the Wood County Court of Common Pleas. (Id.). (See also Doc.
Nos. 20, 21). In response, the Henry County Court of Common Pleas scheduled a
hearing on the HCRWSD’s petition for December 12, 2019. (Doc. No. 17).
{¶7} On December 5, 2019, Napoleon filed a motion to continue the
December 12, 2019 hearing; an objection under R.C. 6119.051 to the HCRWSD’s
petition; and (as an alternative) a motion to intervene in the case “for purposes of
submitting its complaint for injunctive relief, declaratory judgment, and other relief
due to [Napoleon’s] interest in and objection to the proposed agreement and plan of
merger that is the subject of this action.”1 (Doc. No. 22).
{¶8} On December 10, 2019, the HCRWSD filed a memorandum in
opposition to Napoleon’s motion to continue the December 12, 2019 hearing. (Doc.
No. 23). After denying Napoleon’s motion to continue the December 12, 2019
1
Napoleon filed a complaint against the HCRWSD in another case. (Doc. No. 28).
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hearing, the Henry County Court of Common Pleas proceeded to a hearing on the
HCRWSD’s petition during which the trial court permitted Napoleon to present
evidence relative to its objections to the HCRWSD’s petition.2 (See Doc. Nos. 26,
34, 38).
{¶9} On December 26, 2019, the Henry County Court of Common Pleas
granted the HCRWSD’s “petition for merger of the [NWWSD] and the
[HCRWSD]”; granted “an Order Modifying the manner of selection and the number
of trustees of the new entity, [NWWSD] as contained in the resolutions approved
by the respective Boards of Trustees”; and denied Napoleon’s motion to intervene.
(Doc. No. 33). That same day, the trial court granted the HCRWSD’s motion to
consolidate the case with the Wood County case, ordering that the cases be
consolidated in the Wood County Court of Common Pleas. (Doc. No. 33).
{¶10} On January 23, 2020, Napoleon filed its notice of appeal, and raises
six assignments of error for our review. (Doc. No. 35). In conjunction with its brief,
the HCRWSD filed a motion to dismiss the appeal.
Assignment of Error No. I
HCRWSD filed a modification petition under R.C. 6119.051
which had the practical effect of extinguishing its existence,
dissolving its Board, eliminating local representation, and ceding
all of its operations and assets to NWWSD. That statute requires
2
Subsequent to the December 12, 2019 hearing, on December 20, 2019, Napoleon filed a “supplemental
objection” to the HCRWSD’s petition. (Doc. No. 28). On December 23, 2019, the HCRWSD filed
memoranda in opposition to Napoleon’s “supplemental” objection to its petition and motion to intervene in
the case. (Doc. Nos. 30, 31).
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that a petition for abandonment or surrender of the purposes of
a water district, or amendment to the petition which approved it,
be dismissed if trial court does not find the proposed action to be
conducive to the public health, safety, convenience or welfare, and
would not adversely affect the continued operation of the district.
The trial court erred when it did not apply and analyze the
standard of review set forth in 6119.051 to any aspect of the
modification petition filed by Appellee HCRWSD except Board
composition. Instead, it reviewed all other aspects of the
modification petition as a merger under R.C. 6119.06(Y) for
which it incorrectly concluded no judicial oversight was necessary
appropriate. The trial court compounded its error by entering an
order approving the "petition for merger" contained in the
modification plan - after determining it would not evaluate or
analyze the merger plan other than changes to Board composition
under R.C. 6119.051.
Assignment of Error No. II
Statutes must be read in pari materia. The trial court erred in not
evaluating the interplay between R.C. 6119.051 and R.C.
6119.06(Y). Specifically, it erred in finding R.C. 6119.051 does not
constitute a mechanism by which the City of Napoleon could
object to the merger plan set forth in the modification petition,
and instead by concluding that R.C. 6119.06(Y) divested the
Court of judicial oversight of a modification petition which
involves a merger of two water districts.
Assignment of Error No. III
The trial court erred in concluding that the only issue for
consideration under R.C. 6119.051 on HCRWSD's modification
petition was the impact of the merger plan on Board composition.
It compounded that error by issuing an order which approved
changes to NWWSD Board—an entity over which it lacked
jurisdiction—and not issuing an order related to the
abandonment of the HSR WSD Board.
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Assignment of Error No. IV
The trial court committed plain error when it entered an order
approving the modification of the manner of selection and
addition to the number of trustees of NWWSD because the Henry
County Common Pleas Court lacked jurisdiction over NWWSD's
modification petition pending in Wood County Common Pleas
Court.
Assignment of Error No. V
The evidence at the hearing on the modification petition did not
support a finding that approval of the petition which resulted in
the elimination of the HCRWSD Board that was composed
entirely of Henry County citizens, and the creation of a NWWSD
Board in which Henry County citizens have 10% representation
was consistent with public health, safety, convenience or welfare.
Assignment of Error No. VI
The trial court erred, abused its discretion, and deprived the City
of a fundamentally fair proceeding by: (a) moving forward with a
hearing on the modification petition 6 days after the City's
objection was filed; (b) denying the City's request for
continuation of the hearing; (c) depriving the City of an
opportunity to engage in limited discovery from HCRWSD
related to the modification petition, where HCRWSD had refused
to respond to the City's previous records requests; (d) allowing an
attorney for a biased, non-party to present evidence and examine
witnesses at the hearing; (e) requiring supplementation of the
hearing record 7 days after the hearing without reasonable
opportunity for discovery on the petition or the several objections
submitted related to the petition; and (f) failing to conduct a
hearing on the objections filed by third parties.
{¶11} In its assignments of error, Napoleon argues that the trial court erred
by granting the HCRWSD’s petition. However, before we address the merits of
Napoleon’s arguments, we must address a threshold jurisdictional issue.
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{¶12} R.C. Chapter 6119, which applies to water and sewer districts,
provides the procedure under which regional water and sewer districts may be
organized by local governments. See Ayersville Water & Sewer Dist. v. Geiger, 3d
Dist. Defiance No. 4-11-19, 2012-Ohio-2689, ¶ 27; Brunswick v. Brunswick Hills
Twp. Bd. Trustees, 81 Ohio App. 3d 252, 254 (9th Dist.1992), citing R.C. 6119.01.
See also Northeast Ohio Regional Sewer Dist. v. Bath Twp., 144 Ohio St. 3d 387,
2015-Ohio-3705, ¶ 9 (noting that water and sewer districts organized under R.C.
Chapter 6119 are “creature[s] of statute”). The process is initiated when “one or
more municipal corporations, one or more counties, or one or more townships, or
by any combination of them, after having been authorized by the legislative
authority of the political subdivision” files a petition (as described in the statute) in
“the court of common pleas of one of the counties all or part of which lies within
the proposed district.” R.C. 6119.02(A). After a final hearing,
if it appears that the proposed district is necessary, that it and the plan
for the operation of the district are conducive to the public health,
safety, convenience, and welfare, and that the plan for the operation
of the district is economical, feasible, fair, and reasonable, the court,
after disposing of all objections as justice and equity require and by
its findings, entered of record, shall declare the district finally and
completely organized and to be, or to be empowered to continue as, a
political subdivision.
R.C. 6119.04(D). See In re Erie-Huron Cty. Rural Water Auth. (N. Ohio Rural
Water), 6th Dist. Huron No. H-04-039, 2005-Ohio-4881, ¶ 10.
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{¶13} Following the creation of a district, R.C. 6119.06 prescribes the rights,
powers, and duties of the district. As relevant to this case, R.C. 6119.06 provides:
Upon the declaration of the court of common pleas organizing the
regional water and sewer district pursuant to section 6119.04 of the
Revised Code and upon the qualifying of its board of trustees and the
election of a president and a secretary, said district shall exercise in
its own name all the rights, powers, and duties vested in it by Chapter
6119. of the Revised Code, and, subject to such reservations,
limitations and qualifications as are set forth in this chapter, such
district may:
***
(Y) Merge or combine with any other regional water and sewer district
into a single district, * * * provided two-thirds of the members of each
of the boards consent to such merger or combination. Such merger or
combination shall become legally effective unless, prior to the
ninetieth day following the later of the consents, qualified electors
residing in either district equal in number to a majority of the qualified
electors voting at the last general election in such district file with the
secretary of the board of trustees of their regional water and sewer
district a petition of remonstrance against such merger or
combination.
(Emphasis added.) R.C. 6119.06(Y).
{¶14} Furthermore, when a change to its original petition is necessary, R.C.
6119.051 permits a district to petition the court of common pleas to effectuate that
change. That statute provides as follows:
At any time after the creation of a water and sewer district, the district,
after action by its board of trustees, may file a petition in the court of
common pleas requesting the order of such court permitting the
district to:
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(A) Increase or add to its purposes heretofore approved by the court
so long only as its purposes are those described in section 6119.01 of
the Revised Code, or
(B) Abandon or surrender any purpose heretofore approved by the
court, or
(C) Amend any provision of the petition filed pursuant to section
6119.02 of the Revised Code.
Upon the filing of petition pursuant to this section the court shall set
a date for hearing and the clerk of the court shall give notice thereof
by publication once each week for four consecutive weeks in a
newspaper having a general circulation in each of the counties, in
whole or in part, within the district. Any person or any political
subdivision residing or lying within an area affected by the operation
of the district, on or before the date set for hearing, may file an
objection to the granting of the petition. Upon hearing, if it appears
that the request of the petition is conducive to the public health, safety,
convenience or welfare and will not if granted adversely affect the
continued operation of the district, the court shall grant the prayer of
the petition. Otherwise, it shall dismiss the petition.
(Emphasis added.) R.C. 6119.051. See In re Erie-Huron Cty. Rural Water Auth. at
¶ 12.
{¶15} Here, the HCRWSD was finally and completely organized as a
political subdivision on January 9, 2003 after the Henry County Court of Common
Pleas approved its petition for organization filed under R.C. Chapter 6119.
Thereafter, on September 4, 2019, the HCRWSD Board of Trustees adopted a
resolution consenting “to the merger of the [HCRWSD] with and into the
[NWWSD] in accordance with [R.C. 6119.06(Y)]”; (2) authorizing “the execution
and delivery of an agreement and plan of merger between the [HCRWSD] and the
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[NWWSD]; and (3) authorizing “the preparation and filing of a petition for
modification of the [HCRWSD] in accordance with [R.C. 6119.051(B)] in order to
surrender its approved purposes.” (Emphasis added.) (Doc. No. 15, Ex. G).
{¶16} On September 26, 2019, the NWWSD Board of Trustees adopted a
similar resolution in which it (1) consented to “the execution and delivery of an
agreement and plan of merger by and between the NWWSD and the HCRWSD” in
accordance with R.C. 6119.06(Y); (2) authorized the “execution and delivery of an
agreement and plan of merger by and between the NWWSD and the HCRWSD; and
authorized “the preparation and filing of a petition for modification of the NWWSD
in accordance with [R.C. 6119.051(A) or (C)] in order to expand the scope of its
service area and to provide for related changes in governance and related matters in
accordance with the approved purposes of the NWWSD.” (Doc. No. 15, Ex. H).
{¶17} Subsequent to the resolutions adopted by the respective boards of
trustees, the HCRWSD and the NWWSD executed the agreement and plan of
merger. (Doc. No. 15, Ex. J2). Importantly, and relevant to this case, the agreement
and plan of merger specified as follows:
5.3. Petitions for Modifications of the Districts. The Districts shall
cooperate to cause the filing by NWWSD and HCRWSD, as
applicable, in accordance with [R.C. 6119.051], one or more petitions
for modification of each of the Districts’ original petitions for
creation, for the purposes of, among other things, (a) modifying the
boundaries of NWWSD to include the boundaries of HCRWSD, (b)
adding a member to the Board of Trustees of NWWSD (the tenth
board member) to be appointed by the Board of County
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Commissioners of Henry County, Ohio, which member shall
represent the Board of County Commissioners of Henry County, as
well as all other municipalities and townships within Henry County
that are currently part of HCRWSD other than the Village of McClure,
(c) providing that the Village of McClure will receive voting
privileges consistent with the other current member municipalities of
NWWSD, (d) providing that any additional municipalities and/or
townships in Henry County requesting to be part of NWWSD must do
so by petition and will receive voting privileges consistent with the
other current member municipalities and townships, respectively, of
NWWSD, unless otherwise agreed to by NWWSD and such
municipalities and/or townships at a future date, and (e) abandoning
the purposes of HCRWSD as approved in its original petition for
creation.
(Underline sic.); (Italics added.) (Id. at 12).
{¶18} Notwithstanding the resolution adopted by the HCRWSD Board of
Trustees, the HCRWSD petitioned the Henry County Court of Common Pleas on
November 5, 2019 to approve “the merger of the [NWWSD] and the [HCRWSD]”
and to permit it to amend its petition by modifying “the manner of selection and the
number of the members of the Board of Trustees of the surviving entity * * * .”
(Doc. No. 15). Stated another way, the HCRWSD sought judicial approval of the
districts’ decision to merge under R.C. 6119.06(Y) and judicial permission to amend
its petition under R.C. 6119.051(C) despite the resolution of HCRWSD Board of
Trustees (as well as the agreement and plan of merger) necessitating that any
petition for change filed by the HCRWSD to be filed under R.C. 6119.051(B). After
hearing Napoleon’s objections to the petition filed by the HCRWSD, the trial court
granted the requested relief in the HCRWSD’s petition.
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{¶19} “As creatures of statute, sewer districts ‘have no more authority than
that conferred upon them by the statute, or what is clearly implied therefrom.’”
Northeast Ohio Regional Sewer Dist., 144 Ohio St. 3d 387, 2015-Ohio-3705, at ¶ 41
(Kennedy, J., dissenting), quoting Hall v. Lakeview Local School Dist. Bd. of Edn.,
63 Ohio St. 3d 380, 383 (1992). R.C. 6119.06 describes the rights, powers, and
duties of a finally and completely organized water and sewer district, including the
ability to merge with another regional water and sewer district. See, e.g.,
Northwood, 1998 WL 46390, at *11 (noting that water and sewer districts are vested
with the rights enumerated in R.C. 6119.06), rev’d on other grounds, 86 Ohio St. 3d
92 (1999). Mergers of water and sewer districts under R.C. 6119.06(Y) do not
require judicial approval. Indeed, the plain language of the statute states that, when
“two-thirds of the members of each of the boards consent to [a] merger or
combination,” the “merger or combination shall become legally effective unless” a
petition of remonstrance is filed in accordance with the statute. R.C. 6119.06(Y).
Further, the statute provides that the water and sewer district may “[e]xercise the
powers of the district without obtaining the consent of any other political
subdivision * * * .” R.C. 6119.06(Z).
{¶20} Moreover, the decision to merge with another regional water and
sewer district is not equivalent to the steps necessary to effectuate a merger. Rather,
the method for judicially effectuating any change to the petition of a water and sewer
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district is found in R.C. 6119.051. R.C. 6119.051 permits a water and sewer
district—after action by its board of trustees—to file a petition with the court of
common pleas to request an order permitting it to do any of the following: (1)
increase or add to its purposes; (2) abandon or surrender any purposes; or (3) amend
any provision of its petition. See, e.g., Glouster v. Trimble Twp. Waste Water
Treatment Dist., 112 Ohio App. 3d 392, 396 (4th Dist.1996) (noting that “R.C.
6119.051 provides very specific procedures on petitioning for change”).
{¶21} Upon our review, we conclude that the petition filed by the HCRWSD
in this case sought relief beyond what is required by statute and sought relief outside
of what was specifically authorized by the HCRWSD Board of Trustees. That is,
judicial approval of the HCRWSD’s decision to merge with the NWWSD under
R.C. 6119.06(Y) is unnecessary.
{¶22} Certainly, the objections raised by Napoleon relative to the
HCRWSD’s decision to merge with the NWWSD under R.C. 6119.06(Y) should
have been challenged through the mechanism provided by the statute—a petition of
remonstrance. “[A] petition of remonstrance when duly filed makes ineffectual the
action of the board of trustees.” Myers v. Trustees of Southwest Regional Water
Dist., 12th Dist. Butler No. CA98-07-146, 1999 WL 225124, *4 (Apr. 19, 1999),
citing Cty. Bd. of Edn. of Putnam Cty. v. Bd. of Edn. of Hartsburg Rural Special
School Dist. of Putnam Cty., 112 Ohio St. 108, 110 (1925). In this case, there is no
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evidence in the record that a petition of remonstrance was filed in accordance with
the statute. Compare id. (noting that a petition of remonstrance is the appropriate
remedy to “make[] ineffectual the action of [a] board of trustees” but that no party
“availed himself of [that] remedy” in the case). Therefore, the merger was legally
effective 90 days after the later of the districts to consent to the merger—that is, the
merger of the HCRWSD and the NWWSD was legally effective 90 days after the
NWWSD Board of Trustees consented to the merger on September 26, 2019.
{¶23} Furthermore, the HCRWSD was without authority to file a petition for
change under R.C. 6119.051(C) requesting an order permitting it to amend its
purposes. Here, the HCRWSD Board of Trustees adopted a resolution authorizing
the HCRWSD to file a petition for change under R.C. 6119.051(B) requesting an
order permitting it to abandon or surrender its purposes. Accordingly, as a creature
of statute, the HCRWSD was authorized only to file a petition for change under
R.C. 6119.051(B) requesting an order permitting it to abandon or surrender its
purposes. In other words, the HCRWSD was not authorized to petition the Henry
County Court of Common Pleas for an order authorizing it to amend its petition by
modifying the manner of selection and the number of the members of the board of
trustees of the surviving entity. Accordingly, when faced with a petition seeking an
order permitting the district to take action other than the action specifically
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authorized by resolution of the district’s board of trustees, the trial court should have
dismissed the petition.
{¶24} Also before this court is a motion to dismiss filed by the HCRWSD.
In its motion to dismiss, the HCRWSD contends that this court is without
jurisdiction to consider the merits of Napoleon’s arguments as a result of
consolidation of the cases in the Wood County Court of Common Pleas. In sum,
the HCRWSD argues that a decision of this tribunal reversing the decision of the
Henry County Court of Common Pleas would also overturn the congruent decision
of the Wood County Court of Common Pleas granting the relief requested by the
NWWSD in its petition filed on October 31, 2019. We disagree.
{¶25} Action by the Henry County Court of Common Pleas and the Wood
County Court of Common Pleas on appropriately filed petitions requesting an order
to change the petition of the district (that is subject to each tribunal’s jurisdiction as
provided by R.C. 6119.03) are independent determinations. As we previously
stated, mergers of water and sewer districts under R.C. 6119.06(Y) do not require
judicial approval. Accordingly, the districts should have filed a petition for change
(as authorized by the respective board of trustees) in the Henry County Court of
Common Pleas and Wood County Court of Common Pleas, respectively.
Specifically, (as we determined in this appeal) the HCRWSD Board of Trustees
adopted a resolution authorizing the HCRWSD to file a petition for change under
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R.C. 6119.051(B) requesting an order permitting it to abandon or surrender its
purposes. Likewise, the NWWSD Board of Trustees adopted a resolution
authorizing the NWWSD to file a petition for change under R.C. 6119.051(A) or
(C) “in order to expand the scope of its service area and to provide for related
changes in governance and related matters in accordance with the approved
purposes of the NWWSD.” (Doc. No. 15, Ex. H). Importantly, the relief requested
by the HCRWSD and the NWWSD in the respective court of common pleas is
personal to the petition establishing each district. Thus, the specific relief sought
by the HCRWSD in the Henry County Court of Common Pleas and the specific
relief sought by the NWWSD in the Wood County Court of Common Pleas is not
dependent on action by either tribunal. Therefore, the HCRWSD’s motion to
dismiss is denied.
{¶26} For these reasons, we conclude the HCRWSD’s petition seeking
judicial approval of the HCRWSD’s decision to merge with the NWWSD and
seeking judicial approval of its request to amend its petition under R.C. 6119.051(C)
was not properly before the trial court and should have been dismissed. See
Crenshaw v. State of Ohio Lucas Cty., 6th Dist. Lucas No. L-97-1440, 1998 WL
336930, *2 (May 22, 1998); R.C. 6119.051. Under App.R. 12(A)(1)(a) we have the
authority to “affirm, modify, or reverse” a judgment of a trial court. Accordingly,
because the trial court should have dismissed the petition, we must reverse the
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decision of the trial court and remand the cause to the trial court with instructions to
dismiss the petition.
{¶27} Therefore, we sustain Napoleon’s assignments of error to the limited
extent discussed above and overrule them in all other respects.
{¶28} Having found error, we reverse the judgment of the trial court and
remand the matter with instructions to dismiss the petition.
Judgment Reversed and
Cause Remanded
SHAW, P.J. and PRESTON, J., concur.
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