Lycan v. City of Cleveland

• Decision Date: 09 February 2016
• Docket Number: No. 2014–0358.,2014–0358.
• Citation: 51 N.E.3d 593,146 Ohio St.3d 29
• Parties: LYCAN et al., Appellees, v. The CITY OF CLEVELAND, Appellant.
• Court: Ohio Supreme Court

146 Ohio St.3d 29

51 N.E.3d 593

LYCAN et al., Appellees

v.The CITY OF CLEVELAND, Appellant.

No. 2014–0358.

Supreme Court of Ohio.

Submitted March 11, 2015.

Decided Feb. 9, 2016.

Bashein & Bashein Co., L.P.A., and W. Craig Bashein ; Paul W. Flowers Co., L.P.A., Paul W. Flowers, and Justin D. Care ; and The Dickson Firm, L.L.C., and Blake A. Dickson, Cleveland, for appellees.

Barbara A. Langhenry, Cleveland Director of Law, and Gary S. Singletary, Assistant Director of Law, for appellant.

Mayle, Ray & Mayle, L.L.C., Andrew R. Mayle, Fremont, Jeremiah S. Ray, Lakewood, and Ronald J. Mayle, Fremont; and Murray & Murray Co., L.P.A., and John T. Murray, Sandusky, urging affirmance for amici curiae Bradley L. Walker and Sam Jodka.

Michael K. Allen & Associates and Joshua Adam Engel ; Markovits, Stock & DeMarco, L.L.C., and Paul M. De Marco, Cincinnati; and Rittgers & Rittgers and Charles H. Rittgers, Lebanon, urging affirmance for amicus curiae Michael K. Allen.

Frost Brown Todd, L.L.C., Philip K. Hartmann, Stephen J. Smith, and Yazan S. Ashrawi ; and Ohio Municipal League and John Gotherman, Columbus, urging reversal for amicus curiae Ohio Municipal League.

Adam W. Loukx, Toledo Director of Law, and Eileen Granata, Toledo, urging reversal for city of Toledo.

Bricker & Eckler, L.L.P., Quintin F. Lindsmith, James P. Schuck, and Sommer L. Sheely, Columbus, urging reversal for amicus curiae Redflex Traffic Systems, Inc.

Baker & Hostetler, L.L.P., Gregory V. Mersol, and Chris Bator, Cleveland, urging reversal for amicus curiae Xerox State & Local Solutions, Inc.

Mannion & Gray Co., L.P.A., Cleveland, Judd R. Uhl, and Katherine L. Kennedy, urging reversal for village of Elmwood Place.

FRENCH, J.

{¶ 1} This interlocutory appeal arises in a class action challenging the city of Cleveland's collection of fines for traffic violations captured by its automated cameras. Defendant-appellant, the city of Cleveland, appeals the decision of the Eighth District Court of Appeals, which affirmed the trial court's class-certification order and the appointment of plaintiffs-appellees, Janine Lycan, Thomas Pavlish, Jeanne Task, Lindsey Charna, Ken Fogle, and John T. Murphy, as named plaintiffs. Because Cleveland has raised no arguments regarding class certification here, we affirm the Eighth District's judgment in that respect.

{¶ 2} Cleveland also appeals the Eighth District's ruling, based on the doctrine of res judicata, that appellees' failure to appeal their traffic violations through Cleveland's administrative process did not bar them from pursuing equitable and declaratory relief in the trial court. We hold, however, that the Eighth District erred in addressing res judicata because the trial court did not decide that question in its class-certification order. In the absence of a final, appealable order from the trial court addressing res judicata, the Eighth District improperly ruled on that issue in the first instance. We therefore vacate in part the judgment of the Eighth District regarding the preclusive effect of Cleveland's administrative process, and we remand this matter to the trial court for further proceedings.

FACTS AND PROCEDURAL HISTORY

Overview of Cleveland's use of automated traffic cameras

{¶ 3} Cleveland Codified Ordinances (“CCO”) 413.031 authorizes the use of automated traffic cameras in Cleveland to photograph red-light and speeding violations. The automated-camera system generates a ticket that is reviewed by a Cleveland police officer and then sent by first-class mail or personal service to the vehicle's owner. CCO 413.031(h).

{¶ 4} The ordinance imposes a $100 fine for red-light violations, a $100 fine for speeding violations up to 24 miles per hour over the speed limit, a $200 fine for speeding violations 25 miles per hour or more over the speed limit, and a $200 fine for any speed violation in a school or construction zone. CCO 413.031(o ). These civil fines do not constitute criminal penalties and do not result in the assessment of driver-suspension points. CCO 413.031(i).

{¶ 5} The recipient of a notice of liability must either pay the fine within 20 days from the date of the ticket's mailing, CCO 413.031(o ), or file a notice of appeal and request an administrative hearing within 21 days from the date listed on the ticket, CCO 413.031(k). The ordinance provides: “The failure to give notice of appeal or pay the civil penalty within this time period shall constitute a waiver of the right to contest the ticket and shall be considered an admission.” Id. The city assesses late penalties if the fine is not paid within 20 days. CCO 413.031(o ).

{¶ 6} The ordinance 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.” Cleveland Ordinance No. 1284–05 (July 20, 2005). In Dickson & Campbell, L.L.C. v. Cleveland, 181 Ohio App.3d 238, 2009-Ohio-738, 908 N.E.2d 964, ¶ 50 (8th Dist.), the Eighth District concluded, based on the plain meaning of “vehicle owner,” that former CCO 413.031 did not impose liability on vehicle lessees. Cleveland 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).

Plaintiffs' class-action lawsuit

{¶ 7} 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.

{¶ 8} 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.

{¶ 9} 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.

{¶ 10} 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”)

{¶ 11} 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.

{¶ 12} 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

{¶ 13} 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.

{¶ 14} 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 ...