State EX. REL. NORTHERN Ohio CHAPTER of Assoc.D BUILDERS v. BARBERTON City Sch. Dist. Bd. of Educ.

• Decision Date: 28 April 2010
• Docket Number: No. 24898.,24898.
• Citation: 935 N.E.2d 861,2010 Ohio 1826,188 Ohio App.3d 395
• Parties: STATE EX. REL. NORTHERN OHIO CHAPTER OF ASSOCIATED BUILDERS & CONTRACTORS, INC. et al., Appellants, v. BARBERTON CITY SCHOOL DISTRICT BOARD OF EDUCATION et al., Appellees.
• Court: Ohio Court of Appeals

188 Ohio App.3d 395

935 N.E.2d 861

2010 Ohio 1826

STATE EX. REL. NORTHERN OHIO CHAPTER OF ASSOCIATED BUILDERS & CONTRACTORS, INC. et al., Appellants,

v.BARBERTON CITY SCHOOL DISTRICT BOARD OF EDUCATION et al., Appellees.

No. 24898.

Court of Appeals of Ohio,Ninth District, Summit County.

Decided April 28, 2010.

COPYRIGHT MATERIAL OMITTED.

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Alan G. Ross, Nick A. Nykulak, and Ryan T. Neumeyer, Cleveland, for appellants.

Tamzin Kelly O'Neil and Patrick S. Vrobel, Akron, for appellees Barberton City School District Board of Education.

Richard Cordray, Attorney General, and William C. Becker, Jon C. Walden, and James E. Rock, Assistant Attorneys General, for appellee Ohio School Facilities Commission.

WHITMORE, Judge.

{¶ 1} Plaintiff-appellants, Associated Builders & Contractors, Inc. (“ABC”), Fechko Excavating, Inc. (“Fechko”), Dan Villers, and Jason Antill, appeal from the judgment of the Summit County Court of Common Pleas, dismissing for lack of standing. This court affirms.

I

{¶ 2} In 2008, voters in the city of Barberton passed a 5.2 mill levy to aid the Barberton City School District in building a new middle school. The Barberton Middle School Construction Project (“the project”) is estimated to cost approximately $30 million and is scheduled to be completed in several phases. In addition to the use of levy money from Barberton taxpayers, the project is also being funded by the Ohio School Facilities Commission (“the OSFC”), a state agency created by the Ohio legislature to administer and fund school-construction projects.

{¶ 3} In March 2009, the Barberton City School District Board of Education sought bids for the first phase of the construction, known as the Early Site Work (“ESW”). In its request for proposals, the board specified that all bids were to include prevailing-wage-rate requirements as set forth in R.C. Chapter 4115. Eligible bids were to be submitted to the board by no later than March 25, 2009. Fechko, who is a member of the Northern Ohio Chapter of ABC, timely submitted a bid, incorporating into its bid the required prevailing-wage rates for Summit County. ABC, a national trade association composed of merit shop construction associates and contractors throughout the country, aids its members in addressing issues that are of concern industrywide.

{¶ 4} On or about April 1, 2009, the board awarded the ESW contract to Mr. Excavator. On April 3, 2009, Fechko and ABC (collectively, “bidders”), along with Barberton residents Dan Villers and Jason Antill (collectively, “taxpayers”), filed a verified complaint seeking to permanently enjoin the board and the OSFC from applying Ohio's prevailing-wage requirement to the ESW project. Their complaint also sought a declaration that the bidding requirements and subsequent contracts imposing a prevailing-wage requirement were an abuse of the board's discretion and unlawful. Simultaneously, they filed motions seeking a preliminary injunction, temporary restraining order, and expedited discovery. The trial court held a hearing, at which the magistrate denied the motions for a temporary restraining order and for expedited discovery and set the preliminary injunction and declaratory judgment for hearing on April 15, 2009.

{¶ 5} On April 8, 2009, the board entered into a written contract with Mr. Excavator for completion of the ESW project. On April 13, 2009, the board filed a motion to dismiss the complaint of the bidders and taxpayers under Civ.R. 12(B)(7) based on a failure to join an indispensable party pursuant to Civ.R. 19, namely the OSFC. In response, the bidders and taxpayers filed an amended verified complaint naming the OSFC and Mr. Excavator as defendants, in addition to the board. In May, the magistrate held a pretrial hearing at which he established a discovery schedule and set a trial date for mid-August.

{¶ 6} On May 28, 2009, the board filed a motion to dismiss under Civ.R. 12(B)(1) and (B)(6), arguing that the bidders and taxpayers lacked standing to bring their complaint and that they had failed to state a claim that would entitle them to relief. On that same day, the OSFC also filed a motion to dismiss arguing the same. Mr. Excavator likewise filed a motion to dismiss on June 17, 2009. The bidders and taxpayers opposed the foregoing motions, and the parties proceeded with discovery.

{¶ 7} In early July, the bidders and taxpayers requested leave to file a second amended verified complaint based on information they learned in their discovery depositions. The board, the OSFC, and Mr. Excavator opposed the request for leave, arguing that there were dispositive motions pending before the court and that the second amended verified complaint presented claims that were not yet ripe, as they dealt with future phases of the project for which bids had not yet been requested or bid requirements issued.

{¶ 8} On July 31, 2009, the trial court granted the motions to dismiss filed by the board, the OSFC, and Mr. Excavator. In doing so, it concluded that the bidders and taxpayers lacked standing and had failed to state a claim under Civ.R. 12(B)(6). The trial court also denied the bidders and taxpayers' motion to amend their second verified complaint. The bidders and taxpayers timely appealed and sought a stay of the trial court's decision as well as an injunction. This court denied the motion for stay and request for injunction, and the bidders and taxpayers appealed the denial to the Ohio Supreme Court. In the interim, the board and the OSFC filed a motion to dismiss the appeal as moot, arguing that the ESW project had been completed. The bidders and taxpayers opposed the motion to dismiss, and this court subsequently denied it. On September 21, 2009, the Ohio Supreme Court denied the bidders and taxpayers' motion for stay and request for injunctive relief.

II First Assignment of Error

The trial court erred in dismissing the amended verified complaint and holding that none of the plaintiffs had standing to bring this action under Civ.R. 12(B)(1).

{¶ 9} In their first assignment of error, the bidders and taxpayers argue that the trial court erred in concluding that they lacked standing to pursue the causes of action set forth in their complaint. We disagree.

[1] [2] [3] [4] [5] {¶ 10} “The issue of standing is a threshold test that, once met, permits a court to determine the merits of the questions presented.” Hicks v. Meadows, 9th Dist. No. 21245, 2003-Ohio-1473, 2003 WL 1524555, at ¶ 7. “A person has standing to sue only if he or she can demonstrate injury in fact, which requires showing that he or she has suffered or will suffer a specific, judicially redressible injury as a result of the challenged action.” Fair Hous. Advocates Assn., Inc. v. Chance, 9th Dist. No. 07CA0016, 2008-Ohio-2603, 2008 WL 2229530, at ¶ 5. “Lack of standing challenges the capacity of a party to bring an action, not the subject matter jurisdiction of the court.” State ex rel. Jones v. Suster (1998), 84 Ohio St.3d 70, 77, 701 N.E.2d 1002. Accordingly, a motion to dismiss for lack of standing is properly brought pursuant to Civ.R. 12(B)(6) for failure to state a claim upon which relief can be granted. Brown v. Columbus City Schools Bd. of Edn., 10th Dist. No. 08AP-1067, 2009-Ohio-3230, 2009 WL 1911904, at ¶ 4. See also Kiraly v. Francis A. Bonanno, Inc. (Oct. 29, 1997), 9th Dist. No. 18250, 1997 WL 775685, at *1. Because standing presents this court with a question of law, we review the matter de novo. Zagrans v. Elek, 9th Dist. No. 08CA009472, 2009-Ohio-2942, 2009 WL 1743203, at ¶ 7.

The Bidders and Taxpayers' Amended Verified Complaint

[6] {¶ 11} In their amended verified complaint, the bidders and taxpayers challenge the use of prevailing wages as a bidding requirement and contractual term for work on the ESW project. Ohio's prevailing-wage law, as set forth in R.C. Chapter 4115, “require[s] contractors and subcontractors for public improvement projects to pay laborers and mechanics the so-called prevailing wage in the locality where the project is to be performed.” Northwestern Ohio Bldg. & Constr. Trades Council v. Ottawa Cty. Improvement Corp., 122 Ohio St.3d 283, 2009-Ohio-2957, 910 N.E.2d 1025, at ¶ 14, quoting J.A. Croson Co. v. J.A. Guy, Inc. (1998), 81 Ohio St.3d 346, 349, 691 N.E.2d 655. The Ohio Department of Commerce is charged with enforcing the prevailing-wage law. See generally, R.C. 4115.10, 4155.13, and 4115.16. The statute, however, specifically identifies several exceptions to the prevailing-wage law, including “[p]ublic improvements undertaken by, or under contract for, the board of education of any school district.” R.C. 4115.04(B)(3). Consequently, school boards are not required to pay prevailing wages when entering into a public-improvement project, such as the construction of a middle school. See R.C. 4115.03(C) (defining “public improvement” to include “all buildings * * * constructed by a public authority” which would include a school board under the definition of “public authority,” set forth in R.C. 4115.03(A)).

{¶ 12} In their amended verified complaint, the bidders and taxpayers allege that the “prevailing wage requirement included by the Board in the bid specifications for [the project] that are to be made part of the contract for the [ESW] renders the contract illegal * * * as the Board exceeded its authority under the law resulting in a misappropriation and misuse of public funds.” Therefore, they allege that “the Board exceeded its authority under the law resulting in a misappropriation and misuse of public funds” and “entered into an illegal contract and/or exceeded its authority * * * by mandating compliance with Ohio's Prevailing Wage Law on the Project.” Additionally, the taxpayers and bidders maintain that “the OSFC does not require, nor can it require, the application of Ohio's Prevailing Wage Law to the Project.”

{¶ 13} The trial court concluded that the bidders and...