Barrow v. Vill. of New Miami

104 N.E.3d 814

2018 Ohio 217

Doreen BARROW, et al., Plaintiffs–Appellees,

v.VILLAGE OF NEW MIAMI, et al., Defendants–Appellants.

NO. CA2017–03–031

Court of Appeals of Ohio, Twelfth District, Butler County.

January 22, 2018

Engel & Martin, LLC, Joshua A. Engel, 4660 Duke Drive, Suite 101, Mason, Ohio 45040, for plaintiff-appellee, Doreen Barrow

Rittgers & Rittgers, Charles H. Rittgers, 12 East Warren Street, Lebanon, Ohio 45036, for plaintiff-appellee, Michelle Johnson

Michael K. Allen & Associates, LLC, Michael K. Allen, 810 Sycamore Street, 5th Floor, Cincinnati, Ohio 45202, for plaintiff-appellee, Don Muirheid

Markovits, Stock & DeMarco, LLC, Paul M. DeMarco, 3825 Edwards Road, Suite 650, Cincinnati, Ohio 45209, for plaintiff-appellee, Diane Woods

Rendigs, Fry, Kiely & Dennis, LLP, Felix J. Gora and James J. Englert, 600 Vine Street, Suite 2650, Cincinnati, Ohio 45202, for defendant-appellant, Village of New Miami

Rendigs, Fry, Kiely & Dennis, LLP, Anthony G. Raluy, 500 West Jefferson Street, Suite 1515, Louisville, Kentucky 40202, for defendant-appellant, Village of New Miami

OPINION

M. POWELL, J.

{¶ 1} Defendant-appellant, the village of New Miami, Ohio ("New Miami"), appeals a decision of the Butler County Court of Common Pleas denying its motion for summary judgment seeking governmental immunity pursuant to R.C. Chapter 2744. This interlocutory appeal is limited to the issue of whether the trial court erred in denying New Miami sovereign immunity under R.C. Chapter 2744.

{¶ 2} New Miami operates a civil enforcement program to deter motorists from exceeding the speed limit at several village street intersections. The Automated Speed Enforcement Program was instituted in July 2012 with the adoption of Ordinance 1917 (hereinafter "ASEP"). If a vehicle exceeds the posted speed limit, a camera photographs the license plate and the registered owner of the vehicle receives a Notice of Liability in the mail. Pursuant to the Notice of Liability, motorists may pay the penalty, thus waiving the right to a hearing. Alternatively, motorists may request a hearing within 30 days from the date of the violation. A motorist may file an administrative appeal from the result of the hearing to the Butler County Common Pleas Court pursuant to R.C. 2506.01. Motorists who neglect to pay the penalty are subject to a late fee and are referred to a collection agency, and the judgment against them is reported to credit reporting agencies.

{¶ 3} New Miami entered into a contract with Maryland Optotraffic, LLC, to operate the program. Pursuant to the contract, the penalties are paid directly to Optotraffic which retains 40 percent of the penalties as compensation for its services in administering the program; the remaining 60 percent of the penalties is forwarded to New Miami. Since the program's inception in 2012, over three million dollars have been collected, with New Miami receiving $1,839,914.14 and Optotraffic retaining $1,226,609.41.

{¶ 4} Doreen Barrow and other similarly situated individuals ("Plaintiffs") are all motorists who were sent Notices of Liability. Some of the Plaintiffs paid the penalty and some did not. In 2013, Plaintiffs collectively filed suit against New Miami challenging ASEP and seeking class action certification. Count 1 sought a declaration that ASEP improperly divested the municipal court of jurisdiction over traffic violations in contravention of the Ohio Constitution. Count 2 sought a declaration that ASEP violated Plaintiffs' due process rights. Count 3 prayed for injunctive relief prohibiting continued enforcement of ASEP. Finally, Count 4 sought equitable restitution of any penalties, fees, or charges ("penalties") paid by Plaintiffs pursuant to ASEP, on the ground that retention of the penalties would unjustly enrich New Miami.

{¶ 5} In March 2014, the trial court granted partial summary judgment to Plaintiffs on Counts 1, 2, and 3 and denied New Miami's motion for summary judgment. The trial court found that ASEP unlawfully divested the municipal court of jurisdiction and violated the Ohio Constitution's guarantee of "due course of law."¹ The trial court granted an injunction against continued enforcement of ASEP. Subsequently, Plaintiffs moved for summary judgment regarding their unjust enrichment/restitution claim. The trial court certified a class comprised of all persons who had received Notices of Liability under ASEP.

{¶ 6} New Miami appealed the class action certification decision. On December 30, 2014, we reversed and remanded for the trial court to clarify its Civ.R. 23 findings in support of certification. Barrow v. New Miami , 12th Dist. Butler No. CA2014-04-092, 2014-Ohio-5743, 2014 WL 7390202 (" Barrow I "). On remand, the trial court articulated its rationale, made the requisite findings, and certified the class. New Miami once again appealed. On February 1, 2016, we affirmed the trial court's class certification. Barrow v. New Miami , 2016-Ohio-340, 58 N.E.3d 532 (" Barrow II ").

{¶ 7} Subsequently, the parties renewed their motions for summary judgment regarding Plaintiffs' unjust enrichment/restitution claim in Count 4. New Miami argued it was immune from liability pursuant to the political subdivision immunity of R.C. Chapter 2744. On February 8, 2017, the trial court granted Plaintiffs' motion for summary judgment and denied New Miami's cross motion for summary judgment, finding that New Miami was not entitled to sovereign immunity under R.C. Chapter 2744 because Plaintiffs' unjust enrichment/restitution claim was an equitable claim, not a legal claim. Specifically, the trial court found that Plaintiffs were neither seeking to impose personal liability on New Miami nor money damages from the village. Rather, Plaintiffs were seeking "the restoration, refund, or return" of the penalties they were forced to pay pursuant to the unconstitutional ordinance, that were wrongfully collected by New Miami, and that were in New Miami's possession. As such, the trial court ruled, Plaintiffs' suit to correct the unjust enrichment of New Miami was a suit brought in equity.

{¶ 8} New Miami now appeals, raising one assignment of error:

{¶ 9} THE TRIAL COURT ERRED IN DENYING DEFENDANT–APPELLANT'S CLAIM FOR SOVEREIGN IMMUNITY, GRANTING SUMMARY JUDGMENT TO PLAINTIFFS–APPELLEES AND DENYING SUMMARY JUDGMENT TO DEFENDANT[–]APPELLANT ON PLAINTIFFS' CLAIM FOR UNJUST ENRICHMENT.

{¶ 10} This court reviews summary judgment decisions denying governmental immunity de novo. Kirk Bros. Co. v. Trucraft Constr., L.L.C. , 2017-Ohio-7281, 97 N.E.3d 27, ¶ 13. We review the trial court's judgment independently and without deference to its determination and use the same standard in our review that the trial court should have employed. Id.

{¶ 11} New Miami generally argues it is immune from liability under R.C. Chapter 2744 because its operation of ASEP is a governmental function and there is no unjust enrichment exception to sovereign immunity. New Miami further argues that Count 4 of Plaintiffs' complaint is in fact a legal claim for money damages seeking to impose personal liability on the village for deprivation of due process, disguised as an equitable restitution claim in an effort to avoid the immunity granted to political subdivisions in the performance of governmental functions.

{¶ 12} Count 2 alleged that ASEP violates the Ohio Constitution's guarantee of "due course of law" found in Article I, Section 16 of the Constitution. As stated earlier, the trial court previously granted summary judgment to Plaintiffs upon this due course of law claim. In Count 4, Plaintiffs sought equitable restitution of any penalties they paid pursuant to ASEP on the ground that to allow New Miami to retain the funds wrongfully collected pursuant to an unconstitutional ordinance would unjustly enrich the village.

{¶ 13} Unjust enrichment occurs when "a person has and retains money or benefits which in justice and in equity belong to another." Johnson v. Microsoft Corp. , 106 Ohio St.3d 278, 2005-Ohio-4985, 834 N.E.2d 791, ¶ 20. The purpose of an unjust enrichment claim is not to compensate the plaintiff for loss or damage suffered by the plaintiff, but to enable the plaintiff to recover the benefit he has conferred on the defendant under circumstances in which it would be unjust to allow the defendant to retain it. Id. at ¶ 21. Restitution is the remedy for the unjust enrichment of one party at the expense of another. Santos v. Ohio Bur. of Workers' Comp. , 101 Ohio St.3d 74, 2004-Ohio-28, 801 N.E.2d 441, ¶ 11. To prevail on a claim for unjust enrichment, a plaintiff must demonstrate that: (1) he conferred a benefit upon the defendant, (2) the defendant had knowledge of the benefit, and (3) the defendant retained the benefit under circumstances where it would be unjust to do so without payment. RG Long & Assocs., Inc. v. Kiley , 12th Dist. Warren No. CA2014-10-129, 2015-Ohio-2467, 2015 WL 3824365, ¶ 14.

{¶ 14} R.C. Chapter 2744 provides a three-tiered analysis to determine whether a political subdivision enjoys immunity. The first tier of the analysis provides a general grant of immunity: "[A] political subdivision is not liable in damages in a civil action for injury, death, or loss to person or property allegedly caused by any act or omission of the political subdivision * * * in connection with a governmental or proprietary function." R.C. 2744.02(A)(1). Once immunity is established, the second tier of the analysis carves out certain exceptions to immunity which re-establish the liability of a political subdivision in certain delineated situations. R.C. 2744.02(B). Finally, if any exception applies to re-impose liability, the third tier of the analysis focuses on whether any of the defenses contained in R.C. 2744.03 apply to reinstate immunity. See Cincinnati v. Harrison , 1st Dist. Hamilton No. C-130195, 2014-Ohio-2844, 2014 WL 2957946.

{¶ 15} In support of its argument it is immune from liability, New Miami asserts its operation of ASEP is a...