Ameigh v. Baycliffs Corp.

• Decision Date: 06 February 1998
• Docket Number: No. 96-1209,96-1209
• Parties: AMEIGH et al., Appellants, v. BAYCLIFFS CORPORATION et al., Appellees.
• Court: Ohio Supreme Court

Page 247

81 Ohio St.3d 247

690 N.E.2d 872

AMEIGH et al., Appellants, v. BAYCLIFFS CORPORATION et al., Appellees.

No. 96-1209.

Supreme Court of Ohio.

Submitted Oct. 21, 1997.

Decided Feb. 6, 1998.

Connelly, Soutar & Jackson, Steven R. Smith and Janine T. Avila, Toledo; Wilber & Wilber and George C. Wilber, Clinton, for appellants.

Kelley, McCann & Livingstone, John D. Brown and Robert A. Brindza, Cleveland; Meyer, Kocher, Leoffler & Wargo and John A. Kocher, Port Clinton, for appellees.

MOYER, Chief Justice.

This civil action presents two issues. We must first determine whether the court of appeals was correct in its holding that the property owners' cause of action was barred by the doctrine of res judicata. We must also examine the court of appeals' holding that the trial court was without jurisdiction to consider the declaratory judgment action brought by the property owners because the property owners failed to exhaust their administrative remedies prior to filing suit. Our analysis of the law and record causes us to conclude that the cause of action brought by the property owners is not barred by the doctrine of res judicata. Moreover, our recent holding in Jones v. Chagrin Falls (1997), 77 Ohio St.3d 456, 674 N.E.2d 1388, determined that failure to exhaust administrative remedies is not a jurisdictional bar to a declaratory judgment action. Id. at syllabus. Accordingly, we reverse the judgment of the court of appeals.

We have observed that in order for res judicata to apply, a valid, final judgment must have been rendered upon the merits and an identity of parties or their privies must exist. Whitehead v. Gen. Tel. Co. (1969), 20 Ohio St.2d 108, 49 O.O.2d 435, 254 N.E.2d 10, paragraph one of the syllabus, modified in part on other grounds in Grava v. Parkman Twp. (1995), 73 Ohio St.3d 379, 382, 653 N.E.2d 226, 229. Res judicata also applies where an issue is litigated that has been "actually and necessarily litigated and determined in a prior action." Krahn v. Kinney (1989), 43 Ohio St.3d 103, 107, 538 N.E.2d 1058, 1062. The property owners contend that the doctrine of res judicata is not applicable to the two administrative appeals that were brought prior to this action. We agree.

In the first administrative appeal brought by the trustees against Baycliffs, the trial judge found that the trustees lacked authority to revoke the zoning permit. It is apparent from the entry that the trial judge simply found that the trustees had no power to revoke the permit on the stated grounds. Where a reviewing tribunal reverses the judgment of a lower tribunal on the grounds that the lower tribunal had no jurisdiction to act, the judgment of the reviewing tribunal is not a judgment on the merits and is not res judicata as to a future cause of action seeking adjudication upon the merits. Gibson v. Summers Constr. Co. (1955), 163 Ohio St. 220, 229, 56 O.O. 223, 226, 126 N.E.2d 326, 331. Similarly, the determination by the trial judge was merely procedural in nature, and was not a valid, final judgment on the claim that the proposed construction was not a permitted use.

In the second administrative appeal, the trial court determined that the trustees' decision to again revoke the zoning permit was "illegal, arbitrary, capricious, unreasonable and unsupported by the preponderance of substantial, reliable and probative evidence on the whole record." Similar to the entry issued in the first administrative appeal, the journal entry does not discuss the issue of whether Baycliffs' proposed use of the land would violate township zoning regulations.

The entry does state that the zoning permit is a "valid and enforceable zoning permit allowing construction of 100 docks in the designated area." However, this language must be examined within the context of the issues that were litigated. According to the evidence presented by Baycliffs, the suit was brought to challenge the trustees' revocation of the permit on the trustees' claim that the permit had been issued based upon a false statement. Despite the above language, Baycliffs has not shown that any issue other than the alleged false statement was actually litigated. An issue must be actually and necessarily litigated for res judicata to apply to that issue in a later proceeding. Whitehead, supra, 20 Ohio St.2d at 112, 49 O.O.2d at 437, 254 N.E.2d at 13. In addition, while the trial court stated in the entry that the permit was valid, there is no application of the township zoning regulations to the proposed use of the land or citation to the regulations or other relevant authority. Therefore, the entry cannot be reasonably viewed as an order that determined the legality of Baycliffs' proposed use of the land under the zoning regulations of the township.

Therefore, we cannot sanction the application of res judicata here. Where the judgment of a court is not dispositive on issues which a party later seeks to litigate, res judicata is not applicable. State ex rel. Brookpark Entertainment, Inc. v. Cuyahoga Cty. Bd. of Elections (1991), 60 Ohio St.3d 44, 47, 573 N.E.2d 596, 599-600. This is true even if the prior court decision has discussed the issues that are the subject of the current litigation. Id.

Therefore, we hold that the property owners are not barred by res judicata from maintaining an action for declaratory judgment pursuant to R.C. 519.24. There is no reasonable basis to support the conclusion that the issue of whether the proposed use of the land would violate the township regulations was actually litigated or decided in the two prior administrative appeals. Thus, the issue of whether the property owners were parties or were in privity with parties to the prior administrative actions is of no importance.

The court of appeals also determined in its holding in favor of Baycliffs that the trial court was without jurisdiction to entertain the declaratory judgment action brought by the property owners because the property owners had failed to exhaust their administrative remedies prior to filing suit. Subsequent to the decision of the court of appeals in this case, we have held that failure to exhaust administrative remedies is not a jurisdictional bar to a declaratory judgment action. Jones v. Chagrin Falls (1997), 77 Ohio St.3d 456, 674 N.E.2d 1388, syllabus. The Declaratory Judgment Act allows courts of common pleas to "declare rights, status, and other legal relations whether or not further relief is or could be claimed." R.C. 2721.02. Inasmuch as the property owners seek injunctive relief here, R.C. 2727.02 et seq. grants courts of common pleas the authority to grant such relief. Accordingly, the trial court properly had subject matter jurisdiction to hear and decide this case upon its merits. See Morrison v. Steiner (1972), 32 Ohio St.2d 86, 61 O.O.2d 335, 290 N.E.2d 841, paragraph one of the syllabus. Therefore, the portion of the court of appeals' opinion on this issue, whether it is merely dicta or is in fact dispositive of the case, is incorrect.

In its analysis of whether the property owners were entitled to seek injunctive relief under R.C. 519.24, the court of appeals stated that "it is undisputed that Baycliffs has a valid zoning certificate that permits the corporation to construct the one hundred docks."

That statement is simply incorrect. In this appeal, the trial court specifically ruled that Baycliffs' proposed use of the land would violate the township zoning regulations. Indeed, the question of whether the proposed docks are a proper use of land pursuant to the township zoning resolution is the central dispute in this litigation. At the time of Baycliffs' appeal to the court of appeals, Baycliffs did not have a valid permit.

Further, we hold that the prior two administrative appeals did not divest the trial court of jurisdiction to consider whether the property owners were entitled to injunctive relief under R.C. 519.24. The court of appeals stated that the trial court lacked jurisdiction because the "zoning certificate was determined to be valid, not once, but twice, by the same court in which appellees now seek injunctive relief." For the reasons stated earlier, the prior administrative appeals have no effect on the jurisdiction of the trial court to entertain this action.

The issue of whether Baycliffs' proposed use of the property would violate the township zoning regulations was properly before the court of appeals. The trial court ruled that Baycliffs' proposed use of the property would violate the township zoning ordinance and granted summary judgment for the property owners, expressly observing that the "zoning code's definition of a marina specifically excludes 'docks or moorings appurtenant to a private residence and used only by the occupant of that residence and his paying guests.' " The trial court further stated that the "defendant's slips are launching and docking facilities in a most fundamental sense" and that "docking facilities are not permitted in an R-3 district." Finally, the trial court analyzed whether the boat slips would be permitted as an accessory use in the R-3 district, and addressed the issue of whether the property owners would be especially damaged by the proposed use of the property. This decision by the trial court must be reviewed by the court of appeals upon our remand.

For the foregoing reasons, the judgment of the court of appeals is reversed, and the cause is remanded to the court of appeals for further proceedings consistent with this opinion.

Judgment reversed and cause remanded.

DOUGLAS, REECE, FRANCIS E. SWEENEY, Sr. and PFEIFER, JJ., concur.

COOK and LUNDBERG STRATTON, JJ., dissent.

JOHN W. REECE, J., of the Ninth Appellate District, sitting for RESNICK, J.

LUNDBERG STRATTON, Justice, dissenting.

Because I believe that the two judgments from the administrative appeals are res judicata, I respectfully dissent and would affirm the court of appeals.

A final judgment on the...