Jones v. Chagrin Falls

• Decision Date: 19 February 1997
• Docket Number: No. 95-1458,95-1458
• Citation: 674 N.E.2d 1388,77 Ohio St.3d 456
• Parties: JONES, Appellant, v. VILLAGE OF CHAGRIN FALLS, Appellee.
• Court: Ohio Supreme Court

Page 456

77 Ohio St.3d 456

674 N.E.2d 1388

JONES, Appellant, v. VILLAGE OF CHAGRIN FALLS, Appellee.

No. 95-1458.

Supreme Court of Ohio.

Submitted Sept. 24, 1996.

Decided Feb. 19, 1997.

SYLLABUS BY THE COURT

The doctrine of failure to exhaust administrative remedies is not a jurisdictional defect to a declaratory judgment action; it is an affirmative defense that may be waived if not timely asserted and maintained. (Driscoll v. Austintown Assoc. [1975], 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, clarified and followed.)

Appellant David R. Jones is the owner of real property located in the village of Chagrin Falls and situated within the village's Office District zone. In June 1993, Jones granted National City Bank ("NCB") an option to purchase and develop the property. NCB, in turn, approached Chagrin Falls' Chief Administrative Officer, Robert McKay, with a plan to develop the property for use as a branch bank.

McKay informed NCB that under his interpretation, the zoning laws precluded use of property in the Office District as a branch bank. Though Chagrin Falls Zoning Code 1135.02 permits use of Office District land as a "financial office," McKay determined that a branch bank did not qualify as a financial office and was not a permitted use in the Office District.

The matter was placed on the agenda for the October 4, 1993 meeting of the Chagrin Falls Board of Zoning Appeals ("BZA"). At the meeting, after presentation of NCB's position by its counsel, the BZA concluded that there was a distinction between a financial office and a branch bank and voted to affirm McKay's interpretation of the village's zoning ordinances.

At its next regular meeting, the Chagrin Falls Village Council considered and affirmed the BZA ruling. NCB was represented at the meeting by counsel who spoke on its behalf prior to council's vote adopting an ordinance approving the action of the BZA.

Appellant Jones was not present and did not participate in any of the aforementioned proceedings.

NCB did not pursue an appeal of the village's determination.

Following the decision of the village council, Jones, who had not sought a use variance from the village, filed an action under R.C. Chapter 2721 in the Cuyahoga County Court of Common Pleas seeking a declaration that a bank is a financial office under the Chagrin Falls Zoning Code. In its answer, Chagrin Falls raised as defenses both failure to exhaust administrative remedies and lack of subject matter jurisdiction. It did not, however, argue these defenses to the trial court either in response to Jones's motion for summary judgment or in its own summary judgment motion. ¹

The trial court granted summary judgment to Jones, holding that, as a matter of law, a bank is a financial office and therefore a permitted use in the Office District. The village timely appealed the decision to the Cuyahoga County Court of Appeals.

The only issues briefed and argued to the court of appeals concerned the interpretation of the village zoning code and the trial court determination that a branch bank is a financial office. At oral argument, however, the court raised the issue of subject matter jurisdiction sua sponte and requested supplemental briefs addressing the question. Upon consideration of the briefs, the court of appeals reversed and vacated the judgment of the trial court, holding that the trial court lacked subject matter jurisdiction to consider the action due to Jones's failure to exhaust administrative remedies. Jones filed a notice of appeal and we accepted jurisdiction.

Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A., Sheldon Berns and Benjamin J. Ockner, Cleveland, for appellant.

Joseph W. Diemert, Jr., Chagrin Falls Director of Law, and Laura J. Gentilcore, Assistant Director of Law, Mayfield Heights, for appellee.

MOYER, Chief Justice.

The issue presented in this case is whether failure to exhaust administrative remedies is a jurisdictional defect, or an affirmative defense that may be waived. The issue is of central importance under the facts of this case because Chagrin Falls did not raise the defense on summary judgment and therefore must be held to have waived it if the defect is not jurisdictional. For the reasons that follow, we reaffirm our established precedent that failure to exhaust administrative remedies is a waivable affirmative defense, and we therefore reverse the judgment of the court of appeals.

Ohio's Declaratory Judgment Act sets out in R.C. 2721.02 the types of cases appropriate to declaratory judgment actions before courts of record. Civ.R. 57 specifies that declaratory judgment is not precluded, where appropriate, by "[t]he existence of another appropriate adequate remedy."

R.C. 2721.02 provides:

"Courts of record may declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding is open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect. Such declaration has the effect of a final judgment or decree."

R.C. 2721.03 provides in part:

"Any person interested under a deed, will, written contract, or other writing constituting a contract, or whose rights, status, or other legal relations are affected by a constitutional provision, statute, rule as defined in section 119.01 of the Revised Code, municipal ordinance, township resolution, contract, or franchise, may have determined any question of construction or validity arising under such instrument, constitutional provision, statute, rule, ordinance, resolution, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder."

Civ.R. 57 provides:

"The procedure for obtaining a declaratory judgment pursuant to Sections 2721.01 to 2721.15, inclusive, of the Revised Code, shall be in accordance with these rules. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. * * *"

Nothing in R.C. Chapter 2721 exempts zoning ordinances from the subject matter jurisdiction of courts of common pleas to decide declaratory judgment actions. Nor have we found any other statutory language depriving the trial court of jurisdiction in this case. Therefore, if the court of common pleas lacked jurisdiction in this case, as the court of appeals held, the legal underpinnings for such a holding must be found in the case law.

The village directs our attention to several of our own cases and urges us to rely on them to uphold the determination of the court of appeals that the doctrine of failure to exhaust administrative remedies is a jurisdictional defect depriving the trial court of the power to hear and decide the question before it. We do not agree. Indeed, neither our case law nor that of other jurisdictions supports so sweeping a response to the issue before us.

In Driscoll v. Austintown Assoc. (1975), 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, Driscoll and others sought to collaterally attack, on grounds of failure to exhaust administrative remedies, a two-year-old declaratory judgment holding that a zoning ordinance prohibiting certain landowners from constructing multifamily housing units on their property was unconstitutional. We upheld the validity of the declaratory judgment stating: "Failure to exhaust administrative remedies is not a jurisdictional defect, and such a failure will not justify a collateral attack on an otherwise valid and final judgment. Failure to exhaust administrative remedies is an affirmative defense which must be timely asserted in an action or it is waived. Civ.R. 8(C) and 12(H)." Id. at 276, 71 O.O.2d at 254, 328 N.E.2d at 403-404.

The village of Chagrin Falls correctly observes that the issue in Driscoll was whether a zoning ordinance was constitutional; this case presents no constitutional issue. The village also emphasizes that this court has in the past treated constitutional questions differently from those of simple statutory interpretation when considering the propriety of declaratory judgment actions. See, e.g., Fairview Gen. Hosp. v. Fletcher (1992), 63 Ohio St.3d 146, 586 N.E.2d 80. For these reasons, the village argues, we should distinguish between Driscoll and the present case in determining the applicability of the Driscoll holding.

In Gannon v. Perk (1976), 46 Ohio St.2d 301, 75 O.O.2d 358, 348 N.E.2d 342, however, we applied the same reasoning to a case in which no constitutional question was raised. Gannon involved a declaratory judgment action brought by Cleveland's police and fire fighters seeking a declaration that the mayor was without power under the city charter to place them on layoff. We held that failure to exhaust administrative remedies was not a jurisdictional defect, nor did it preclude the common pleas court from hearing the action, despite the absence of a constitutional question. We simply repeated the above-quoted language from Driscoll and added: "The record before this court does not disclose timely assertion by the appellants of the affirmative defense of failure to exhaust administrative remedies. Therefore, pursuant to Driscoll, that defense is no longer available to appellants." Gannon v. Perk, 46 Ohio St.2d at 310, 75 O.O.2d at 363, 348 N.E.2d at 348.

In contrast to these unequivocal statements of Ohio law, we have found no Ohio Supreme Court precedent supporting the court of appeals' conclusion that failure to exhaust administrative remedies is a jurisdictional defect.

Whether a constitutional question is raised such that exhaustion of administrative remedies should not be required is an inquiry wholly separate from the affirmative-defense-versus-jurisdictional-defect issue posed by the present case. We have long held that failure to exhaust administrative remedies is not a necessary prerequisite to an action challenging the constitutionality of a...