Hannibal Dev., L.L.C. v. Monroe Water Sys.

[Cite as Hannibal Dev., L.L.C. v. Monroe Water Sys., 2021-Ohio-2338.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
MONROE COUNTY
HANNIBAL DEVELOPMENT, LLC
Plaintiff-Appellant,
v.
MONROE WATER SYSTEMS, et al.,
Defendants-Appellees.
OPINION AND JUDGMENT ENTRY
Case No. 20 MO 0016
Civil Appeal from the
Court of Common Pleas of Monroe County, Ohio
Case No. 2018-224
BEFORE:
Cheryl L. Waite, Gene Donofrio, David A. D’Apolito, Judges.
JUDGMENT:
Reversed and Remanded.
Atty. Randolph L. Snow and Atty. James M. Wherley, Jr., Black, McCuskey, Souers &
Arbaugh, 220 Market Ave. S., Suite 1000, Canton, Ohio 44702, for Plaintiff-Appellant
Hannibal Development, LLC.
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Atty. Thomas D. White, Atty. Matthew A. Kearney, and Atty. Katherine M.K. Kimble,
White Law Office, Co., 5989 County Road 77, Millersburg, Ohio 44654, for Defendant-
Appellee Monroe Water Systems
Atty. James L. Peters, Monroe County Prosecuting Attorney, 101 North Main St., Rm. 15,
Woodsfield, Ohio 43793, for Defendants-Appellees Monroe County Treasurer and
Monroe County Auditor.
Dated: June 28, 2021
WAITE, J.
{¶1} Appellant Hannibal Development, LLC (“Hannibal”) appeals an August 31,
2020 Monroe County Court of Common Pleas decision to grant summary judgment in
favor of Appellee Monroe Water Systems (“Monroe Water”). Hannibal argues that the
trial court erroneously denied its motion for partial summary judgment where the
uncontested facts demonstrate that Monroe Water violated its own rules and regulations
governing the contract between the parties. Hannibal also argues that R.C. 6119.06(D)
permits a party to file a contract or tort claim against a water district in the trial court and
that party is not required to exhaust administrative remedies for such claims. For the
reasons provided, Hannibal’s argument regarding R.C. 6119.06(D) has merit. The denial
of Hannibal’s motion for summary judgment does not constitute a final appealable order,
but summary judgment was not warranted, regardless. Accordingly, the judgment of the
trial court is reversed and remanded for a trial.
Factual and Procedural History
{¶2} This is the second time this matter has been before us. See Hannibal Dev.,
LLC v. Monroe Water Systems, 7th Dist. Monroe No. 18 MO 0023, 2019-Ohio-3697.
(“Hannibal I”). In Hannibal I, we reviewed whether the trial court properly dismissed the
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matter after Monroe Water filed a Civ.R. 12(B)(6) motion to dismiss the complaint. The
facts of that case are as follows:
In July of 2014, Hannibal purchased the former Ormet manufacturing facility
(“Ormet”) which is located in Monroe County. Ormet was not in use at the
time of the purchase nor at any time during Hannibal’s ownership. At the
time of purchase, Hannibal informed Monroe Water that it had purchased
Ormet and that any bills should be sent to Hannibal. Apparently, Monroe
Water suggested that Hannibal pay $5,000 per month until a usage history
could be determined.
Monroe Water did not send Hannibal a bill until nearly a year later, and
Hannibal did not make any payments during that time. This bill sent on May
29, 2015 by Monroe Water was in the amount of $87,302.24. This bill stated
that late fees of $8,730.22 would be added if payment was not timely
received. The late fee would raise the total amount to $96,032.46.
According to Hannibal, Monroe Water failed to return phone calls regarding
this bill. At some point, Hannibal was informed that the amount was due in
full and that partial payments would not be accepted. Sometime thereafter,
Hannibal discovered and repaired an underground leak that was apparently
responsible for the high usage.
Initially, Hannibal did not pay the bill and disputed the amount. Monroe
Water transferred the balance to the county auditor, who transferred it to
the county treasurer. The treasurer placed a lien on the Ormet property in
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the amount of $228,436.60. It is unclear which portion of this amount
derived from usage and which is the result of late fees. Hannibal paid the
amount in full to satisfy the lien, but continued to dispute the amount owed.
Hannibal subsequently sold the Ormet property after the lien was removed.
On June 13, 2018, Hannibal filed a complaint against Monroe Water,
Monroe County Auditor, Monroe County Treasurer, and John Does 1-5.
The first count of the complaint raised a claim to recover funds paid. This
claim is based on an argument that Monroe Water failed to determine the
actual amount of usage through reading the meter and failed to provide a
quarterly bill to Hannibal, in violation of R.C. 743.04. The complaint also
raises alternate theories of breach of implied contract to monitor usage and
issue bills in the event that Title 7 of the Revised Code does not apply. The
second count of the complaint raises unjust enrichment. The third count
requests declaratory judgment to establish that Hannibal did not owe the
amount paid. This claim, presumably focusing on the late fees, requests
that these fees be returned to Hannibal.
On August 8, 2018, Monroe Water filed a Civ.R. 12(B)(6) motion to dismiss
the complaint in its entirety. Monroe Water argued that Hannibal’s first
count is based on Chapter 7 of the Ohio Revised Code, which does not
apply to an independent political subdivision. Because they contended the
second and third counts were predicated on the first, Monroe Water argued
that they must also be dismissed.
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On September 27, 2018, the trial court granted Monroe Water’s motion.
The trial court reasoned that Chapter 7 of the Ohio Revised Code does not
apply to a political subdivision pursuant to Chapter 6119. The court decided
that Hannibal’s second and third counts could not succeed without
establishing the Chapter 7 claim. The court did not specifically address
Hannibal’s implied contract claim. It is from this judgment entry that
Hannibal timely appeals.
Hannibal I, at ¶ 2-7
{¶3} We held that the trial court improperly dismissed Hannibal’s contract claims,
as those claims could not be resolved by reviewing the complaint, alone. Id. at ¶ 20. On
remand, the trial court initially issued a judgment entry indicating that the first count of the
complaint remained dismissed. Hannibal filed an uncontested motion to correct the entry
which the trial court granted. As such, the following claims were before the trial court: (1)
breach of implied contract to monitor usage and issue bills (2) unjust enrichment, and (3)
declaratory judgment to establish that Hannibal did not owe the amount paid.
{¶4} On November 18, 2019, Hannibal filed a partial motion for default judgment.
Hannibal argued that fifty-five days had passed since the trial court’s judgment entry and
Monroe Water had failed to file an answer to the complaint. Monroe Water responded
and informed the court that it had admittedly held the mistaken belief that it was not
required to answer the complaint while the appeal was pending, and asserted that lead
counsel had been traveling and then became ill once the appellate process had ended.
Monroe Water filed a motion for leave to file an answer instanter. The trial court granted
Monroe Water’s motion and allowed it to file an answer.
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{¶5} Shortly thereafter, the Monroe County Auditor filed a motion for summary
judgment, arguing that it was not a party to the contract and no longer had possession of
the money in question because it had immediately transferred to Monroe Water. As such,
the auditor asserted that it was merely a “middle man” to the transaction. The trial court
granted the auditor’s motion. Hannibal does not contest that decision, here. Thus, the
auditor is not a party to this appeal.
{¶6} On April 30, 2020, the parties filed competing motions for summary
judgment. In its judgment entry, the trial court denied Hannibal’s partial motion for
summary judgment, finding that genuine issues of material fact existed as to the
agreement between the parties. In the same judgment entry, the court granted Monroe
Water’s motion for summary judgment based on its determination that Hannibal failed to
exhaust its administrative remedies. It is from this entry that Hannibal timely appeals.
{¶7} For ease of understanding, Hannibal’s two assignments of error will be
addressed out of order.
Summary Judgment
{¶8} An appellate court conducts a de novo review of a trial court's decision to
grant summary judgment, using the same standards as the trial court set forth in Civ.R.
56(C). Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).
{¶9} Before summary judgment can be granted, the trial court must determine
that: (1) no genuine issue as to any material fact remains to be litigated, (2) the moving
party is entitled to judgment as a matter of law, (3) it appears from the evidence that
reasonable minds can come to but one conclusion, and viewing the evidence most
favorably in favor of the party against whom the motion for summary judgment is made,
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the conclusion is adverse to that party. Temple v. Wean United, Inc., 50 Ohio St.2d 317,
327, 364 N.E.2d 267 (1977). Whether a fact is “material” depends on the substantive law
of the claim being litigated. Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App.3d 598,
603, 662 N.E.2d 1088 (8th Dist.1995).
{¶10} “[T]he moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record which demonstrate
the absence of a genuine issue of fact on a material element of the nonmoving party's
claim.” (Emphasis deleted.) Dresher v. Burt, 75 Ohio St.3d 280, 296, 662 N.E.2d 264(1996). If the moving party carries its burden, the nonmoving party has a reciprocal
burden of setting forth specific facts showing that there is a genuine issue for trial. Id. at
293, 662 N.E.2d 264. In other words, when presented with a properly supported motion
for summary judgment, the nonmoving party must produce some evidence to suggest
that a reasonable factfinder could rule in that party's favor. Brewer v. Cleveland Bd. of
Edn., 122 Ohio App.3d 378, 386, 701 N.E.2d 1023 (8th Dist.1997).
{¶11} The evidentiary materials to support a motion for summary judgment are
listed in Civ.R. 56(C) and include the pleadings, depositions, answers to interrogatories,
written admissions, affidavits, transcripts of evidence, and written stipulations of fact that
have been filed in the case. In resolving the motion, the court views the evidence in a
light most favorable to the nonmoving party. Temple, 50 Ohio St.2d at 327, 364 N.E.2d
267.
ASSIGNMENT OF ERROR NO. 2
Hannibal was not required to exhaust administrative procedures prior to
bringing this lawsuit.
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{¶12} Hannibal contends that it is not required to exhaust administrative remedies
prior to filing a contract action because R.C. 6119.06(D) expressly provides the right to
file a contract or tort claim against a water district in common pleas court. That statute
does not require the exhaustion of any administrative remedies. Even if we disagree,
Hannibal argues that R.C. 6119.06(D) must be read in conjunction with R.C.
5715.19(A)(1)(d) in order to avoid conflict. In accordance with statutory construction,
effect must be given to both statutes. Thus, Hannibal argues R.C. 6119.06(D) applies to
claims rooted in contract or tort law whereas R.C. 5715.19(A)(1)(d) applies to issues
involving the valuation and assessment of real property. In the alternative, even if it was
required to exhaust any administrative remedies, Hannibal argues that such efforts would
be futile given Monroe Water’s refusal to communicate. Hannibal urges that it had only
twenty-one days to pay a bill that rose to almost six figures, thus was limited in its options.
{¶13} Hannibal also maintains that there were no administrative remedies
available to pursue. Monroe Water admitted in an interrogatory that no formal
administrative process exists in the event of a dispute. While Monroe Water’s rules and
regulations state that a customer “may” file a complaint, Hannibal argues that the word
“may” suggests that such filing is not mandatory. Hannibal notes that Monroe Water’s
rules and regulations do not actually provide an appeal process, as the proceedings are
not quasi-judicial in nature and do not provide basic protections such as notice and the
opportunity to be heard. Hannibal also asserts that it was not required to specifically pay
the amount owed “under protest.”
{¶14} Monroe Water responds that Hannibal had three administrative remedies
available: (1) filing a Rule V complaint, (2) filing a complaint with the Board of Revision
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against the Auditor pursuant to R.C. 5715.19, and (3) filing an appeal after filing a
complaint with the Ohio Board of Tax Appeals pursuant to R.C. 5717.01, R.C. 5717.03,
R.C. 5717.04, and R.C. 5717.05. Monroe Water claims that this matter involves a tax
assessment issue rather than a traditional water bill dispute, thus the Board of Revision
and Tax Appeals Board would have jurisdiction. Even if R.C. 6119.06(D) provides a
remedy, Monroe Water argues that Hannibal was still required to exhaust available
administrative remedies before resorting to the courts.
{¶15} R.C. 6119.06(D) provides that a water district may:
Sue and plead in its own name; be sued and impleaded in its own name
with respect to its contracts or torts of its members, employees, or agents
acting within the scope of their employment, or to enforce its obligations and
covenants made under sections 6119.09, 6119.12, and 6119.14 of the
Revised Code. Any such actions against the district shall be brought in the
court of common pleas of the county in which the principal office of the
district is located, or in the court of common pleas of the county in which the
cause of action arose, and all summonses, exceptions, and notices of every
kind shall be served on the district by leaving a copy thereof at the principal
office with the person in charge thereof or with the secretary of the district.
{¶16} The language of R.C. 6119.06(D) provides that a water district such as
Monroe Water can be sued for contract or tort claims in common pleas court. Despite
Monroe Water’s argument, there is no express requirement within the statute requiring
the exhaustion of any administrative remedies prior to filing such a complaint. R.C.
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6119.06(D) has not been the subject of many appellate decisions, and those that exist
and cite to this statute contain facts and issues not present, here. Thus, we have little
outside guidance as to the application of this statute.
{¶17} We have previously recognized that a water district may be sued in its name
with respect to contract claims. The City of East Liverpool v. Buckeye Water District,
2012-Ohio-2821, 972 N.E.2d 1090 (7th Dist.), ¶ 48, citing R.C. 6119.06(D). Mauldin v.
Youngstown Water Dept., 2019-Ohio-5065, 150 N.E.3d 433 (7th Dist.). Notably, in
Buckeye, the plaintiff does not appear to have utilized any administrative remedies prior
to filing a complaint in the common pleas court. However, we note that the specific issue
in both Buckeye and Mauldin involves an immunity analysis, thus these cases are not
directly on point. See Buckeye, supra; Mauldin v. Youngstown Water, Dept., 7th Dist. No.
19 MA 0010, 2019-Ohio-5065, 150 N.E.3d 433.
{¶18} Based on our review of this matter, however, it is readily apparent that none
of the “remedies” listed by the trial court are applicable, here. First, the trial court referred
to the filing of a Rule V complaint. The trial court is making reference to a section found
in Monroe Water’s rules and regulations. According to Rule V, “[b]ills which the user
believes to be incorrect may be paid under protest and appealed to the next meeting of
the Trustees of the District. The Trustees shall hear the Complaint and take such action
as may be necessary.” (Exh. 6.)
{¶19} We begin by again noting that there is no language in R.C. 6119.06(D)
allowing a water district to add a prerequisite, such as an administrative remedy, prior to
filing a complaint in the trial court. Regardless, as Monroe Water conceded at oral
argument, the “remedy” mentioned in Rule V does not provide any essential aspect of
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due process, as it does not afford proper notice, an opportunity to be “heard” in a legal
sense, or an explicit process to further appeal. Instead, Rule V appears to be a
discretionary process that a customer may choose to exercise in the event of a dispute in
the hope that the district’s trustees may agree with the user. If they do not, no further
process is anticipated or provided.
{¶20} As to the trial court’s determination that Hannibal was, alternatively,
required to file a complaint with the Board of Revision and subsequently file an appeal
with the BTA, neither of those entities have jurisdiction over this matter. The Board of
Revision is “a statutorily created board tasked with hearing ‘complaints relating to the
valuation or assessment of real property as the same appears upon the tax duplicate of
the then current year.’ ’’ Hess Ohio Dev., LLC, v. Belmont County Board of Revision, 7th
Dist. Belmont Nos. 19 BE 0029, 19 BE 0030, 19 BE 0031, 2020-Ohio-4729, ¶ 18, citing
R.C. 5715.11. “County boards of revision are creatures of statute and, as a consequence,
are limited to the powers conferred upon them by statute.” Id. at ¶ 34, citing Cincinnati
School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 87 Ohio St.3d 363, 368, 721
N.E.2d 40 (2000). “The authority granted to a board of revision by R.C. 5715.01 is to
‘hear complaints and revise assessments of real property for taxation.’ ’’ Id.{¶21} In Hess, we held that a dispute over the ownership rights in real property
was not within the jurisdiction of the Board of Revision, as the dispute did not challenge
the auditor’s calculation of the value or tax assessment of the property. Id. at ¶ 45. The
proper procedure in such a case was to file a quiet title action. Id.
{¶22} Monroe Water argues that because the amount of the disputed water bill
was placed as a lien on the property in the instant case, somehow this lien creates
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jurisdiction in the Board of Revision. There is no legal or factual support for this theory.
While the lien was certainly being assessed, the current dispute does not involve any
question of the property’s value for tax assessment purposes. Regardless, Hannibal
satisfied the lien prior to filing the complaint in this case. The proceeds were transferred
immediately from the auditor, who operated simply as a “middle man” in this matter to
pass through the funds to Monroe Water. This matter does not, then, involve the
“valuation or assessment of real property.”
{¶23} Monroe Water heavily relies on Hamilton v. Mansfield Motorsports
Speedway, L.L.C., 5th Dist. Richland No. 11 CA 103, 2012-Ohio-2446. However,
Hamilton is readily distinguishable, as that case involved a tax assessment made by the
tax commissioner which did place the issue within the purview of the Board of Revision.
Id. at ¶ 38. Here, the issue involves neither a tax nor an action taken by the tax
commissioner. Instead, it involves an overdue water bill that has been satisfied. Thus,
Hamilton provides no guidance on the issue at bar.
{¶24} In summation, R.C. 6119.06(D) applies to this contract claim asserted
against a water district. R.C. 6119.06(D) does not provide that a party must look for, and
exhaust, any administrative remedy. The statute does not provide a water district with
the ability to create an obstacle that must be utilized before a complaint can be filed.
Assuming arguendo that it did, Monroe Water admitted it provides no other appropriate
administrative procedure for appeal of a water bill. There are no other appropriate
administrative remedies available to Hannibal in this matter, either. Accordingly,
Hannibal’s second assignment of error has merit and is sustained.
ASSIGNMENT OF ERROR NO. 1
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Partial summary judgment should have been granted in favor of Hannibal
because Monroe Water violated its own rules and regulations by failing to
issue invoices monthly to Hannibal
{¶25} Hannibal contends that Monroe Water’s own rules and regulations require
it to send monthly bills no later than the fifteenth day of the month and additionally requires
the bill to be paid within ten days or the service will be disconnected. Hannibal asserts
that it purchased and took possession of the facility in July of 2014, so the first bill should
have been received in August of 2014. However, it did not receive a bill until May 29,
2015, nearly a year later. Hannibal asserts that all of Monroe Water’s other customers,
including the previous owner of the facility, received monthly bills. Consequently,
Hannibal asserts that the record establishes that Monroe Water breached the contract
between the parties and so, summary judgment in favor of Hannibal was appropriate.
{¶26} In response, Monroe Water argues that there are at least three issues of
material fact: (1) whether the parties reached an agreement as to the minimum payment,
(2) whether Monroe Water breached the contract, and (3) whether Paul Liu was acting as
an agent for Hannibal when he allegedly agreed to pay $5,000 per month until a rate
could be established.
{¶27} “An order denying a motion for summary judgment is generally not a final
appealable order.” Davis v. Brown Local School District, 2019-Ohio-246, 131 N.E.3d 431(7th Dist). An appellate court may only address the denial if a statutory exemption exists
or if the matter turns on undisputed facts and purely legal questions. Crum v. Yoder, 7th
Dist. Monroe No. 20 MO 0005, 2020-Ohio-5046, ¶ 34; Seoane-Vazquez v. Rosenberg,
10th Dist. Franklin No. 19AP-16, 2019-Ohio-4997, ¶ 20.
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{¶28} Here, as the trial court stated in its entry, genuine material facts are clearly
contested. First, Monroe Water claims that the parties reached an agreement where
Hannibal agreed to pay $5,000 per month until a water rate could be established based
on usage. Hannibal disputes that it entered into such an agreement. As the record
demonstrates that Monroe Water apparently actually charged Hannibal $15,000 per
month and not $5,000, it is apparent that there are genuine issues as to the existence of
any agreement.
{¶29} Also at issue is the effect such an agreement would have on Monroe
Water’s rules and regulations. James Murray of Monroe Water conceded in his
deposition that the parties did not discuss whether a monthly bill would be invoiced when
they entered into this “agreement.” (1/17/20 Murray Depo., p. 40.) He conceded that
“customers pay the same rate unless otherwise changed by the Board.” (1/17/20 Murry
Depo., p. 31.) Murray also conceded that Hannibal was not invoiced or sent a shut-off
notice, despite the fact that Monroe Water knew Hannibal had not been paying $5,000
per month. (1/17/20 Murry Depo., p. 104.) He admitted that he was unaware of another
situation where a customer did not receive a bill. (1/17/20 Murry Depo., p. 109.)
However, it is unclear whether the water department’s rules and regulations constitute a
contract or whether Monroe’s above described actions amount to a breach of contract.
Still at issue is whether Monroe Water and Hannibal reached an agreement to modify the
rules and regulations. If so, it remains to be determined if such modification is permitted
by the rules and regulations.
{¶30} Many facts remain in dispute in this case. And while denial of a motion for
summary judgment is not final and appealable, because genuine issues of material fact
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remain and those issues cannot be resolved solely as a matter of the application of law,
the trial court was correct in deciding to deny partial summary judgment, here. As such,
Hannibal’s first assignment of error is without merit and is overruled.
Conclusion
{¶31} Hannibal argues that Monroe Water violated its own rules and regulations
which govern the contract between the parties. Hannibal contends that R.C. 6119.06(D)
permits a party to file a contract or tort claim against a water district in the trial court, and
that it is not required to first exhaust any administrative remedies. For the reasons
provided, Hannibal’s argument regarding R.C. 6119.06(D) has merit and the trial court’s
decision to grant Monroe Water summary judgment was error. However, Hannibal’s
argument regarding the trial court’s denial of its motion for summary judgment has no
merit. While denial of summary judgment is not a final, appealable order, the trial court
was correct in denying summary judgment to Hannibal. Accordingly, the trial court is
reversed and the matter is remanded for a trial.
Donofrio, P.J., concurs.
D’Apolito, J., concurs.
Case No. 20 MO 0016
[Cite as Hannibal Dev., L.L.C. v. Monroe Water Sys., 2021-Ohio-2338.]
For the reasons stated in the Opinion rendered herein, Appellant’s first assignment
of error is overruled and its second assignment is sustained. It is the final judgment and
order of this Court that the judgment of the Court of Common Pleas of Monroe County,
Ohio, is reversed. We hereby remand this matter to the trial court for further proceedings
according to law and consistent with this Court’s Opinion. Costs to be taxed against the
Appellee.
A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.
JUDGE CHERYL L. WAITE
JUDGE GENE DONOFRIO
JUDGE DAVID A. D’APOLITO
NOTICE TO COUNSEL
This document constitutes a final judgment entry.