City of Cincinnati v. City of Harrison, APPEAL NO. C-130195

• Decision Date: 30 June 2014
• Docket Number: APPEAL NO. C-130195,TRIAL NO. A-0900755
• Parties: CITY OF CINCINNATI, OHIO, Plaintiff-Appellee, v. CITY OF HARRISON, OHIO, Defendant-Appellant, and BOARD OF COUNTY COMMISSIONERS OF HAMILTON COUNTY, OHIO, Defendant.
• Court: Ohio Court of Appeals

2014 Ohio 2844

CITY OF CINCINNATI, OHIO, Plaintiff-Appellee, v. CITY OF HARRISON, OHIO, Defendant-Appellant,andBOARD OF COUNTY COMMISSIONERS OF HAMILTON COUNTY, OHIO, Defendant.

APPEAL NO. C-130195

TRIAL NO. A-0900755

COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

Date of Judgment Entry on Appeal: June 30, 2014

OPINION

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause Remanded

Terrance Nestor, Interim City Solicitor, and Frost Brown Todd LLC, Stephen N. Haughey, Matthew C. Blickensderfer and Christopher S. Habel, for Plaintiff-Appellee,

Schroeder, Maundrell, Barbiere & Powers, Lawrence E. Barbiere and Michael E. Maundrell, for Defendant-Appellant.

Please note: this case has been removed from the accelerated calendar.

CUNNINGHAM, Judge.

{¶1} Defendant-appellant, the city of Harrison, Ohio, appeals from the trial court's summary judgment entry denying it the benefit of immunity from suit by the plaintiff-appellee, the city of Cincinnati. Cincinnati sought declaratory and injunctive relief to prevent Harrison from providing water service to customers in disputed areas of western Hamilton County, Ohio. Because sovereign immunity under R.C. Chapter 2744 is not a defense to claims seeking injunctive relief, we affirm the trial court's entry of summary judgment, in part. But because the trial court erred in denying Harrison the protections of the sovereign immunity statutes when it awarded money damages for lost revenues and attorney fees, we reverse the trial court's judgment, in part. Because the other portions of the trial court's summary-judgment entry that Harrison seeks review of are not otherwise final, we cannot reach any conclusion on the merits of these other arguments.

{¶2} Harrison's sole assignment of error is overruled in part and sustained in part. Because Harrison was not immune under R.C. Chapter 2744 from the injunctive and declaratory relief ordered by the trial court, we affirm that portion of the trial court's March 27, 2012 judgment. But since Harrison was immune from the damages awarded under claims sounding in intentional tort, and from the attorney-fees award, we reverse that portion of the trial court's judgment

Cincinnati and Harrison Compete for Water Customers

{¶3} We summarized the background of this dispute in our 2010 decision affirming the trial court's denial of Cincinnati's motion for a temporary restraining order:

The Greater Cincinnati Water Works (GCWW) is a department of Cincinnati that provides water to the city and a majority ofHamilton County. Pursuant to [the 1987] contract with [the] Board of Commissioners of Hamilton County, Ohio, GCWW began to develop a project called "Water West." The project was designed to provide for the water needs of much of the western portion of Hamilton County. GCWW expended a great deal of capital during the implementation of the project, constructing water mains and lines throughout the area. Assumptions were made, based upon projected usage and other factors, that justified the expenditure and development.

Harrison was offered an opportunity to receive water service from GCWW by purchasing water wholesale from GCWW, but Harrison declined. Instead, Harrison decided to provide water to its own citizens. Additionally, Harrison planned to provide water to two additional areas: an area that had been annexed by Harrison and another area of Harrison Township that had not. These two areas were within the area that GCWW had planned to serve as part of Water West. In fact, GCWW had already begun construction of its own water mains in the two areas.

When Cincinnati learned that Harrison had begun the process of spending public funds to install water mains and to otherwise prepare to provide competing service, Cincinnati filed suit.

Cincinnati v. Harrison, 1st Dist. Hamilton No. C-090702, 201o-Ohio-3430, ¶ 2-4. The additional "disputed areas" included portions of Crosby Township and northern Harrison Township including some areas annexed by Harrison.

Cincinnati's Amended Complaint

{¶4} In February 2011, Cincinnati filed an amended complaint raising seven claims for relief. Six of the counts alleged intentional conduct by Harrison. In count one, Cincinnati alleged that Harrison's encroachment into the disputed areas had violated Cincinnati's exclusive right to provide service in those areas. In enacting R.C. Chapter 6103, Cincinnati argued, the General Assembly had authorized the county and Cincinnati to enter into intergovernmental agreements for public water systems. See R.C. 715.02 and 6103.02. Pursuant to those agreements, Cincinnati could "exercise any power, perform any function, or render any service, on behalf of" the county. R.C. 307.15.

{¶5} Cincinnati contended that those functions included the ability to enforce its exclusive rights under its 1987 contract with the county. Section 3 of the contract provided that the county

will not furnish or contract with others to furnish during the term of this contract, water to anyone within [the disputed areas], except where [Cincinnati] is incapable of doing so * * *. [And that the county] shall take no action, nor in any manner aid or assist others in taking any action * * * to effect the construction or operation of any public water system in the [County Water Area or in the supplemental Area] or to secure a source of water supply for any other customers in [those areas].

{¶6} Section 17 also stated that Cincinnati "is authorized to enforce in the [disputed areas] all ordinances, laws, standards, specifications, rules and regulations now or hereafter lawfully in effect in Cincinnati and/or the [County Water Area, the area outside of Cincinnati consisting of the certain unincorporated territory ofHamilton County]." Cincinnati alleged that the disputed areas are within the supplemental County Water Area covered under the contract.

{¶7} In count two, Cincinnati alleged that Harrison's official legislative acts authorizing encroachment had unlawfully impaired the county contract. In count five, it alleged that Harrison had deliberately waited while Cincinnati and the county spent tens of millions of dollars to develop infrastructure to serve the disputed areas and only then had engaged in a "line laying contest" with Cincinnati in violation of the doctrines of waiver, laches, and equitable estoppel. In count seven, Cincinnati asserted that Harrison had tortiously interfered with the 1987 county contract and its amendments.

{¶8} Cincinnati sought declaratory and injunctive relief. It sought to enjoin Harrison from taking further steps to encroach into the disputed areas, interfere with Cincinnati's ability to pay its existing debts used for improvements, or impair Cincinnati's ability to operate under the Water West plan. It also sought a declaration that the 1987 contract and its amendments precluded Harrison from extending its water system into the disputed area. Cincinnati's prayer for relief included an award of monetary damages, attorney fees, costs, and any other relief to which it was entitled.

{¶9} Harrison answered Cincinnati's petition and raised, inter alia, the defense that it was immune from Cincinnati's claims under R.C. Chapter 2744, the Ohio sovereign-immunity statute.

{¶10} In September 2011, the trial court granted Cincinnati's motion to bifurcate from this case the issues raised in counts three and four of the amended complaint, alleging that Harrison's encroachment into the disputed areas was an unlawful regulatory taking. In April 2012, Cincinnati voluntarily dismissed the Board of County Commissioners without prejudice under Civ.R. 41(A). Count six of theamended complaint had alleged that the county had breached the Water Area Contract with Cincinnati.

{¶11} By mid-2012, the parties had amassed copious amounts of material in support of their positions, including deposition testimony and numerous documents from consulting engineers; Cincinnati, county, and Harrison officials; and GCWW employees. The documentary evidence included emails, letters between city and county officials, and engineering diagrams of the disputed areas.

{¶12} In July 2012, Harrison moved for summary judgment, asserting that Cincinnati did not have exclusive authority to provide water to the disputed areas, that Cincinnati lacked the standing to enforce its claims, that Cincinnati had acted in conformity with Harrison's contention that Cincinnati lacked exclusive authority, and that in the absence of exclusive authority for either municipality to serve water to the disputed areas, Harrison was entitled to "equal dignity" to provide water service. Harrison also expressly argued that it was entitled to judgment as a matter of law on its defense of sovereign immunity. Cincinnati filed a cross-motion for summary judgment on the remaining counts of its amended complaint: counts one, two, five, and seven.

{¶13} In acknowledgement of the complex issues to be resolved, and with the consent of the parties, the trial court received testimony from two "clarifying" expert witnesses—one from each side—before ruling on the motions. See Loukinas v. Roto-Rooter Servs. Co., 167 Ohio App.3d 559, 2006-Ohio-3172, 855 N.E.2d 1272, ¶ 22 (1st Dist.) (a trial court may consider evidence other than that specified in Civ.R. 56 when there has been no objection to its use).

The Trial Court's Summary-Judgment Decisions

{¶14} On March 1, 2013, in a five-page written decision and judgment entry, the trial court granted Cincinnati's cross-motion for summary judgment. While thecourt's judgment failed to mention Harrison's sovereign-immunity defense, we conclude that the trial court denied it, as it overruled Harrison's motion for summary judgment. The court also made specific "hold[ings]" regarding the four counts of the amended complaint on which Cincinnati had moved for summary judgment:

1. Regarding Count One [alleging a violation of state law],

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