Lycan v. City of Cleveland

Decision Date29 August 2019
Docket Number107737,Nos. 107700,s. 107700
Citation142 N.E.3d 210,2019 Ohio 3510
Parties Janine LYCAN, et al., Plaintiffs-Appellees/Cross-Appellants, v. CITY OF CLEVELAND, et al., Defendants-Appellants/Cross-Appellees.
CourtOhio Court of Appeals

JOURNAL ENTRY AND OPINION

MARY EILEEN KILBANE, A.J.:

{¶ 1} In this consolidated appeal, both the plaintiffs-appellees/cross-appellants, Janine Lycan, et al. (the "class") and defendant-appellant/cross-appellee, the city of Cleveland (the "City"), appeal the trial court's decision awarding final judgment to the class in the amount of $4,121,185.89 and denying the class's request to award an additional amount of $1,841,563.51 as the time-value of the funds that were wrongfully withheld.1 For the reasons set forth below, we affirm.

{¶ 2} The instant appeal has had a long procedural history spanning over ten years and arises from the City's use of automated traffic cameras. Cleveland Codified Ordinances ("CCO") 413.031 imposes liability on the "owner of a vehicle" committing a red-light or speeding offense. CCO 413.031(b) and (c). The ordinance formerly defined "vehicle owner" as "the person or entity identified by the Ohio Bureau of Motor Vehicles, or registered with any other State vehicle registration office, as the registered owner of a vehicle." Former CCO 4310.031(p)(3).

{¶ 3} In Dickson & Campbell, L.L.C. v. Cleveland , 181 Ohio App.3d 238, 2009-Ohio-738, 908 N.E.2d 964, ¶ 50 (8th Dist.), this court concluded, based on the plain meaning of "vehicle owner," that former CCO 413.031 did not impose liability on vehicle lessees. In light of Dickson & Campbell , the City subsequently amended CCO 413.031, effective March 11, 2009. The ordinance now states that a "vehicle owner" includes the "lessee" of a leased or rented vehicle. CCO 413.031(p)(4).

{¶ 4} The underlying class action is a result of this court's ruling in Dickson & Campbell . The facts and procedural history, after the filing of the class action, can be found in the City's appeal to the Ohio Supreme Court in Lycan v. Cleveland , 146 Ohio St.3d 29, 2016-Ohio-422, 51 N.E.3d 593 (" Lycan III "):

Plaintiffs' class-action lawsuit
After the Dickson & Campbell decision was announced, Lycan filed a class-action complaint on February 26, 2009, in Cuyahoga County Court of Common Pleas challenging Cleveland's imposition of fines against vehicle lessees under former CCO 413.031. An amended class-action complaint, filed on May 28, 2009, added Pavlish, Task, Charna, Fogle, and Murphy as named plaintiffs. The amended complaint alleged that each of the plaintiffs received a notice of liability from Cleveland stating that an automated traffic camera had identified the vehicle described and pictured in the notice as the vehicle being driven during the commission of a red-light or speeding offense. Plaintiffs alleged that they had leased the vehicles identified in the notices of liability but were never the vehicles' registered owners.
Instead of filing a notice of appeal and requesting a hearing to challenge their tickets, Lycan, Pavlish, Charna, and Fogle paid the $100 fine. Murphy received five notices of liability and paid a reduced amount for one ticket; Cleveland agreed to accept this as payment in full for all five tickets. Task received notices of liability for two separate speeding violations. Task did not pay the fines for either ticket and subsequently received a demand for payment of $320 in fines and penalties.
In their complaint, plaintiffs contended that Cleveland had no authority under the former version of CCO 413.031 to collect fines from plaintiffs as vehicle lessees. As relief, plaintiffs sought the following: (1) disgorgement, under an unjust-enrichment theory, of fines paid to the city, (2) an injunction preventing Cleveland from enforcing the ordinance against vehicle lessees, and (3) declaratory relief. Plaintiffs also filed a motion for class certification.
On November 24, 2009, the trial court granted Cleveland's motion for judgment on the pleadings, finding that plaintiffs had waived the right to pursue judicial remedies by paying their fines and failing to appeal their citations as permitted by CCO 413.0319(k). In the same order, the trial court denied plaintiffs' class-certification motion.
Plaintiffs' appeal to the Eighth District ("Lycan I")
Plaintiffs appealed to the Eighth District Court of Appeals. The appeals court affirmed the trial court's judgment dismissing plaintiffs' claim for injunctive relief, finding that an injunction would serve no purpose because the offending ordinance has since been repealed. Lycan v. Cleveland , 8th Dist. Cuyahoga No. 94353, 2010-Ohio-6021 [2010 WL 5075520], ¶ 9 (" Lycan I "). But the appeals court reversed the trial court's dismissal of plaintiffs' claims for restitution and declaratory relief. Id. at ¶ 8, 10. The court found that plaintiffs' failure to challenge the fines before payment did not necessarily foreclose plaintiffs from proving a set of facts under which it would be unjust for Cleveland to retain the paid fines. Id. at ¶ 8. The appeals court also reversed the denial of plaintiffs' class-certification motion and remanded for further proceedings on that question. Id. at ¶ 11.
This court declined jurisdiction over Cleveland's discretionary appeal. 128 Ohio St.3d 1501, 2011-Ohio-2420, 947 N.E.2d 683.
Remand to the trial court
On remand, and after completion of discovery, the trial court addressed the parties' competing motions for summary judgment on plaintiffs' unjust-enrichment claim. In support of its motion, Cleveland argued that the administrative process provided an adequate remedy to those receiving civil notices of liability and that the doctrine of res judicata therefore precluded review of the class's unjust-enrichment claim. More specifically, Cleveland argued that its notices of liability, combined with the opportunity to participate in the administrative-appeals process, constituted quasi-judicial administrative proceedings from which the preclusive effect of res judicata arose.
In an order dated February 8, 2013, the trial court granted partial summary judgment for plaintiffs. The court's entry consisted of two lines. The first line stated that plaintiffs' "[motion] for partial summary judgment * * * filed 7/25/2012, is granted." The second line of the order set a hearing date on plaintiffs' motion for class certification and appointment of class counsel. The order contained no other findings of law or fact. Cleveland did not seek interlocutory review of this order by or before the March 11, 2013 appeal deadline. See Ohio App.R. 4(A) (providing that a notice of appeal must be filed within 30 days of a judgment entry).
The trial court held a class-certification hearing on February 19, 2013. Cleveland did not assert res judicata in its memorandum opposing class certification or at the class-certification hearing. On February 26, 2013, the court granted class certification and found that plaintiffs met the seven requirements of Civ.R. 23. The court certified the following class: "All persons and entities who were not a ‘vehicle owners’ under CCO 413.031, but were issued a notice of citation and/or [assessed] a fine under that ordinance, prior to [M]arch 11, 2009, by/or on behalf of Defendant, City of Cleveland." The class-certification order contains no discussion of res judicata.
Cleveland's appeal to the Eighth District ("Lycan II")
On March 27, 2013, pursuant to R.C. 2505.02(B)(5), which allows immediate appeal of a class-certification order, Cleveland appealed the February 26, 2013 order to the Eighth District. Cleveland's first assignment of error addressed the February 26, 2013 class-certification order and raised two arguments: that plaintiffs failed to meet the requirements of Civ.R. 23 and that res judicata precluded class relief. Cleveland's second assignment of error alluded to the February 8, 2013 partial-summary-judgment order. However, Cleveland did not address the summary-judgment order in its brief.
From the outset, the court distinguished the two orders and noted that the February 8, 2013 partial summary judgment was "not yet appealable" and was "not addressed in the substance of [Cleveland]'s brief." Lycan v. Cleveland , 8th Dist. Cuyahoga No. 99698, 2014-Ohio-203, 6 N.E.3d 91, ¶ 12 (" Lycan II "). The court therefore limited its review to the class-certification order: "the issues raised on appeal pertain to whether the Civ.R. 23(A) class action requirements were met and whether the action is barred by res judicata." Id.
The court began with the latter question and considered whether plaintiffs' failure to appeal their traffic citations through Cleveland's administrative procedure precluded their class action. The doctrine of res judicata, as the court noted, provides that " ‘a valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action.’ " Id. at ¶ 15, quoting Grava v. Parkman Twp. , 73 Ohio St.3d 379, 653 N.E.2d 226 (1995), syllabus. The court concluded that plaintiffs' failure to pursue administrative relief did not bar plaintiffs' class action "because there was never an actual ‘judgment’ rendered by a court, or administrative tribunal, of competent jurisdiction." Id. Moreover, the court noted, even if an administrative decision had been rendered, Cleveland's parking-violations bureau could not have decided plaintiffs' claims for unjust enrichment and declaratory judgment. Id. The court declined to follow the "expansive view of res judicata" set forth in Carroll v. Cleveland , 522 Fed.Appx. 299 (6th Cir.2013), and Foor v. Cleveland , N.D.Ohio No. 1:12 CV 1754, 2013 U.S. Dist. LEXIS 115552, 2013 WL 4427432 (Aug. 15, 2013). Id. at ¶ 14. The court concluded that "fairness and justice would not support the application of res judicata in this case." Id. at ¶ 19. The court then
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