Supportive Solutions, L.L.C. v. Elec. Classroom Tomorrow

• Decision Date: 12 June 2013
• Docket Number: No. 2012–0790.,2012–0790.
• Citation: 137 Ohio St.3d 23,997 N.E.2d 490
• Parties: SUPPORTIVE SOLUTIONS, L.L.C., Appellee, v. ELECTRONIC CLASSROOM OF TOMORROW, Appellant, et al.
• Court: Ohio Supreme Court

137 Ohio St.3d 23

997 N.E.2d 490

SUPPORTIVE SOLUTIONS, L.L.C., Appellee,

v.ELECTRONIC CLASSROOM OF TOMORROW, Appellant, et al.

No. 2012–0790.

Supreme Court of Ohio.

Submitted March 13, 2013.

Decided June 12, 2013.

Demer & Marniella, L.L.C., John A. Demer, and James A. Marniella, Berea; and Paul W. Flowers Co., L.P.A., and Paul W. Flowers, Cleveland, for appellant.

Davis & Young and Kurt D. Anderson, urging reversal for amicus curiae, Ohio Association of Civil Trial Attorneys.

FRENCH, J.

{¶ 1} In this appeal, we consider whether a trial court's decision denying a defendant leave to assert the defense of political-subdivision immunity via an amended answer is a final, appealable order. We hold that it is because the denial of a political subdivision's motion for leave to file an amended answer to assert the affirmative defense of political-subdivision immunity denies that political subdivision the benefit of the alleged immunity pursuant to R.C. 2744.02(C).

Facts and Procedural History

{¶ 2} We gave a detailed history of this case in State ex rel. Electronic Classroom of Tomorrow v. Cuyahoga Cty. Court of Common Pleas, 129 Ohio St.3d 30, 2011-Ohio-626, 950 N.E.2d 149 (“ECOT I ”). Here, we reiterate only those facts necessary to our discussion of the issue now on appeal.

{¶ 3} Appellant, Electronic Classroom of Tomorrow (“ECOT”), is an internet-based community school, established pursuant to R.C. Chapter 3314, and a “political subdivision” for purposes of the governmental-immunity provisions of R.C. Chapter 2744. ECOT I at ¶ 2, 26–27; R.C. 2744.01(F). ECOT and appellee, Supportive Solutions Training Academy, L.L.C. (“Supportive Solutions”), entered into a series of contracts for Supportive Solutions to supply supplemental educational services to eligible ECOT students during the 2007–2008 school year.

{¶ 4} In March 2008, Supportive Solutions sued ECOT in the Cuyahoga County Court of Common Pleas. Supportive Solutions' amended complaint asserted claims for breach of implied contract, misrepresentation, negligent misrepresentation, promissory estoppel, unjust enrichment, fraud and fraud in the inducement, respondeat superior, and defamation. ECOT filed an answer to Supportive Solutions' amended complaint, as well as counterclaims for breach of contract, misrepresentation, negligent misrepresentation, and fraud. ECOT did not raise the affirmative defense of political-subdivision immunity in its answer. Supportive Solutions subsequently filed a second amended complaint, adding Lucas County Educational Service Center as a defendant and adding a claim for tortious interference with business relations.¹ ECOT filed an answer to the second amended complaint, incorporating its earlier answer and counterclaims and denying all additional allegations, but, again, not raising political-subdivision immunity as an affirmative defense.

{¶ 5} In January 2010, ECOT filed a motion for partial summary judgment, arguing, in part, that it was entitled to political-subdivision immunity, pursuant to R.C. Chapter 2744, on many of Supportive Solutions' claims. ECOT also raised the issue of immunity in opposition to Supportive Solutions' motion for summary judgment. Supportive Solutions responded that ECOT waived any immunity defense by not raising it in its answer. ECOT then filed a motion for leave to file an amended answer raising political-subdivision immunity as an affirmative defense. The trial court summarily denied ECOT's motion for leave to amend its answer. The court granted summary judgment to ECOT on Supportive Solutions' claims of fraud and intentional misrepresentation, but denied ECOT summary judgment on the remaining claims.

{¶ 6} ECOT immediately appealed the trial court's denial of leave to file an amended answer. Meanwhile, despite ECOT's pending appeal, the trial court conducted a jury trial on Supportive Solutions' remaining claims, and the jury returned a verdict in favor of Supportive Solutions on claims of breach of express and implied contract and negligent misrepresentation. The trial court entered judgment against ECOT on the jury verdict in the amount of $1,206,400, awarded prejudgment interest, and denied ECOT's motion for judgment notwithstanding the verdict or for a new trial. ECOT thereafter filed a second appeal—from the judgment on the jury verdict and the trial court's denial of its posttrial motions. The Eighth District Court of Appeals dismissed ECOT's first appeal on July 30, 2010, for lack of a final, appealable order, but it subsequently reinstated that appeal and consolidated it with ECOT's second appeal.

{¶ 7} While its appeals were pending, ECOT filed an original action in this court for a writ of prohibition to prevent the trial court from enforcing its judgment and for a writ of mandamus requiring the trial court to vacate the allegedly invalid portion of its judgment and to stay execution of any surviving portion of the judgment without bond. We held that, whether or not the denial of ECOT's motion for leave to file an amended answer was a final, appealable order, ECOT's first appeal divested the trial court of jurisdiction to proceed with a trial of any claim that might be subject to that defense. ECOT I, 129 Ohio St.3d 30, 2011-Ohio-626, 950 N.E.2d 149, at ¶ 16. Accordingly, we issued a writ of prohibition, which precluded the trial court from enforcing those portions of its judgment that were subject to ECOT's appeal from the denial of its motion for leave to amend its answer, and a writ of mandamus, which ordered the trial court to vacate those portions of the judgment. Id. at ¶ 31. We also determined that ECOT was entitled to a writ of mandamus compelling the trial court to stay the surviving portion of its judgment without a bond. Id. at ¶ 30–31.

{¶ 8} Following our decision in ECOT I, the court of appeals dismissed ECOT's consolidated appeals. Supportive Solutions, L.L.C. v. Electronic Classroom of Tomorrow, 8th Dist. Nos. 95022 and 95287, 2012-Ohio-1185, 2012 WL 985838. It held that it lacked jurisdiction over ECOT's appeal from the judgments entered as a result of trial because this court had ordered the trial court to vacate those judgments. The court of appeals also addressed whether the denial of ECOT's motion for leave to file an amended answer was a final, appealable order. The court of appeals concluded that it was not, and the court dismissed ECOT's appeal from that order for lack of jurisdiction.

{¶ 9} This court accepted ECOT's discretionary appeal to consider the following proposition of law: “Any order that denies the benefit of an alleged immunity to a political subdivision is immediately appealable pursuant to R.C. § 2744.02(C), including the denial of a motion to amend the answer to include the defense.” 132 Ohio St.3d 1481, 2012-Ohio-3334, 971 N.E.2d 960.

Analysis

{¶ 10} An appellate court can review only final orders, and without a final order, an appellate court has no jurisdiction. Hubbell v. Xenia, 115 Ohio St.3d 77, 2007-Ohio-4839, 873 N.E.2d 878, ¶ 9, citingGen. Acc. Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St.3d 17, 20, 540 N.E.2d 266 (1989). Generally, an order denying leave to amend a pleading is not a final, appealable order. See Trotwood v. S. Cent. Constr., L.L.C., 192 Ohio App.3d 69, 2011-Ohio-237, 947 N.E.2d 1291, ¶ 54 (2d Dist.); Worthington v. Wells Fargo Bank Minnesota, N.A., 5th Dist. No. 10 CA 40, 2010-Ohio-4541, 2010 WL 3722628, ¶ 30–32.

{¶ 11} R.C. Chapter 2744, the Political Subdivision Tort Liability Act, sets forth a comprehensive statutory scheme for the tort liability of political subdivisions and their employees. It establishes a three-step analysis for determining whether a political subdivision is immune from liability, starting with a broad rule that a political subdivision is generally not liable in damages. Greene Cty. Agricultural Soc. v. Liming, 89 Ohio St.3d 551, 556–557, 733 N.E.2d 1141 (2000); R.C. 2744.02(A)(1). The purpose of R.C. Chapter 2744 is to preserve political subdivisions' fiscal integrity. Wilson v. Stark Cty. Dept. of Human Servs., 70 Ohio St.3d 450, 453, 639 N.E.2d 105 (1994). Consistent with that purpose, early resolution of the immunity issue may save the parties the time, effort, and expense of a trial and appeal. Hubbell at ¶ 25, quoting Burger v. Cleveland Hts., 87 Ohio St.3d 188, 199, 718 N.E.2d 912 (1999) (Lundberg Stratton, J., dissenting). Accordingly, R.C. 2744.02(C) provides, “An order that denies a political subdivision * * * the benefit of an alleged immunity from liability as provided in this chapter or any other provision of the law is a final order.” R.C. 2744.02(C) permits a political subdivision to appeal an order that denies it the benefit of an alleged immunity under R.C. Chapter 2744, even when the order makes no determination that there is no just cause for delay pursuant to Civ.R. 54(B). Sullivan v. Anderson Twp., 122 Ohio St.3d 83, 2009-Ohio-1971, 909 N.E.2d 88, syllabus.

{¶ 12} This court addressed the scope of R.C. 2744.02(C) in Hubbell, a homeowner's suit against the city of Xenia, arising out of a sewage backup. The court of appeals dismissed the city's appeal from the denial of its motion for summary judgment for lack of a final, appealable order, where the trial court found that questions of fact remained as to the city's entitlement to political-subdivision immunity. It reasoned that an order denies the benefit of an alleged immunity only when it fully resolves the immunity issue. This court disagreed with that reasoning and reversed. Hubbell, 115 Ohio St.3d 77, 2007-Ohio-4839, 873 N.E.2d 878.

{¶ 13} In accordance with established principles of statutory interpretation, we began our analysis in Hubbell by turning to the plain language of the statute to determine legislative intent. We stated that the General Assembly's use of the words “benefit” of an “alleged” immunity in R.C. 2744.02(C) illustrates that the statute is not limited to orders that finally resolve the...