TLC Health Care Servs., LLC v. Ohio Dep't of Job & Family Servs.

• Decision Date: 21 December 2017
• Docket Number: No. 17AP–182,No. 17AP–181,17AP–181
• Citation: 2017 Ohio 9198,102 N.E.3d 589
• Court: Ohio Court of Appeals
• Parties: TLC HEALTH CARE SERVICES, LLC, Plaintiff–Appellant, v. OHIO DEPARTMENT OF JOB & FAMILY SERVICES et al., Defendants–Appellees. Medcorp, Inc. and Medcorp E.M.S. South, LLC, Plaintiffs–Appellants, v. Ohio Department of Job & Family Services et al., Defendants–Appellees.

102 N.E.3d 589

2017 Ohio 9198

TLC HEALTH CARE SERVICES, LLC, Plaintiff–Appellant,

v.OHIO DEPARTMENT OF JOB & FAMILY SERVICES et al., Defendants–Appellees.

Medcorp, Inc. and Medcorp E.M.S. South, LLC, Plaintiffs–Appellants,

v.Ohio Department of Job & Family Services et al., Defendants–Appellees.

No. 17AP–181

No. 17AP–182

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered on December 21, 2017

On brief: Barkan & Robon, Ltd., and R. Ethan Davis, Maumee, for appellant TLC Health Care Services, LLC.

On brief: Webster & Associates Co., LPA, Geoffrey E. Webster, and Bryan M. Pritikin, Columbus, for appellants Medcorp, Inc. and Medcorp E.M.S. South, LLC. Argued: Geoffrey E. Webster.

On brief: Michael DeWine, Attorney General, and Rebecca L. Thomas, for appellees. Argued: Rebecca L. Thomas.

DECISION

SADLER, J.

{¶ 1} Plaintiffs-appellants, TLC Health Care Services, LLC ("TLC") and Medcorp, Inc. and Medcorp E.M.S. South, LLC¹ ("Medcorp") (collectively "appellants"), appeal from a judgment of the Franklin County Court of Common Pleas dismissing their claims against defendants-appellees, Ohio Department of Job and Family Services ("ODJFS") and Helen E. Jones–Kelley, Director of ODJFS (collectively "appellees"), for lack of subject-matter jurisdiction. For the reasons that follow, we affirm.

I. FACTS AND PROCEDURAL HISTORY

{¶ 2} At all relevant times, appellants engaged in the business of providing both emergency and non-emergency ambulance services and emergency and non-emergency ambulette services (wheelchair van) for patients enrolled in the Ohio Medicaid program administered by appellees. In order for appellants to conduct such business, appellees required appellants to obtain Medicaid certification and to execute provider agreements setting forth the terms of service, including the rate of reimbursement for covered services provided. Ohio Adm.Code 5160–1–17.2 defines the provider agreement, in relevant part, as follows:

A provider agreement is a contract between the Ohio department of job and family services (ODJFS) And a provider of medicaid covered services. By signing this agreement the provider agrees to comply with the terms of the provider agreement, Revised Code, Administrative Code, and federal statutes and rules.

{¶ 3} Ohio Adm.Code 5160–1–60 sets forth the Medicaid payments providers are to receive for covered services, in relevant part, as follows:

(A) The medicaid payment for a covered procedure, service, or supply constitutes payment in full and may not be construed as a partial payment when the payment amount is less than the provider's submitted charge.

(B) * * * The medicaid payment amount for a covered service, procedure, or supply is the lesser of the submitted charge or the established medicaid maximum. Medicaid maximum payment amounts for many existing services, procedures, and supplies, particularly services rendered by practitioners of the healing arts, are set forth in the appendix to this rule.

{¶ 4} On December 11, 2007, Medcorp filed a complaint against appellees in the Lucas County Court of Common Pleas. The complaint alleges the Medicaid reimbursement rates set by appellees are so low as to violate state and federal statutory, regulatory, and constitutional provisions, including 42 U.S.C. 1983, 42 U.S.C. 1396a(a)-(30)(A), 42 C.F.R. 447.204, R.C. Chapter 5111, R.C. 5111.01 and 5111.02, the Due Process Clauses, the Equal Protection Clauses, and the Takings Clauses. The complaint further alleges the Medicaid reimbursement rates set by appellees constitute a breach of the provider agreement. On May 12, 2008, TLC filed a complaint against appellees in the Lucas County Court of Common Pleas alleging the same claims. Appellants' complaints seek declaratory and injunctive relief, as well as "just compensation for Medicaid reimbursement monies taken to which it is entitled." (TLC Compl. at 9; Medcorp Compl. at 10.)

{¶ 5} On appellees' motion, the Lucas County Court of Common Pleas transferred venue of the two cases to Franklin County, and the trial court in Franklin County consolidated the two cases pursuant to Civ.R. 42(A). On October 10, 2008 and January 20, 2009, appellees filed a motion to dismiss, pursuant to Civ.R. 12(B)(1), for lack of subject-matter jurisdiction. Appellees argued because appellants alleged claims for monetary relief against the state of Ohio sounding in breach of contract, the Court of Claims of Ohio had exclusive original jurisdiction of the complaints. Appellants argued even though the complaints seek monetary relief against appellees, the claims alleged in the complaints are purely equitable in nature and are, therefore, within the jurisdiction of the courts of common pleas.

{¶ 6} The trial court agreed with appellees and granted appellees' motion to dismiss on February 9, 2017. Appellants timely appealed to this court from the trial court judgment.

II. ASSIGNMENTS OF ERROR

{¶ 7} Appellants set forth the following two assignments of error:

[1.] THE FRANKLIN COUNTY COMMON PLEAS COURT ERRED IN FINDING IT DID NOT HAVE SUBJECT MATTER JURISDICTION OVER THE CLAIMS IN THE UNDERLYING ACTION.

[2.] THE FRANKLIN COUNTY COURT OF COMMON PLEAS ERRED IN EXERCISING VENUE OVER THE UNDERLYING ACTION.

III. STANDARD OF REVIEW

{¶ 8} The issue of subject-matter jurisdiction involves " ‘a court's power to hear and decide a case on the merits and does not relate to the rights of the parties.’ " Columbus Green Bldg. Forum v. State , 10th Dist. No. 12AP-66, 2012-Ohio-4244, 980 N.E.2d 1, ¶ 14, quoting Vedder v. Warrensville Hts. , 8th Dist. No. 81005, 2002-Ohio-5567, 2002 WL 31320350, ¶ 14. " ‘ Civ.R. 12(B)(1) permits dismissal where the trial court lacks jurisdiction over the subject matter of the litigation.’ " Patriot Water Treatment, LLC v. Ohio Dept. of Natural Resources , 10th Dist. No. 13AP-370, 2013-Ohio-5398, 2013 WL 6506561, ¶ 29, quoting PNC Bank, Natl. Assn. v. Botts , 10th Dist. No. 12AP-256, 2012-Ohio-5383, 2012 WL 5868891, ¶ 21. "When presented with a motion to dismiss for lack of subject matter jurisdiction pursuant to Civ.R. 12(B)(1), a trial court must determine ‘whether any cause of action cognizable by the forum has been raised in the complaint.’ " Interim HealthCare of Columbus, Inc. v. Ohio Dept. of Adm. Servs. , 10th Dist. No. 07AP-747, 2008-Ohio-2286, 2008 WL 2025153, ¶ 7, quoting PNP, Inc. v. Ohio Dept. of Job & Family Servs. , 10th Dist. No. 04AP-1294, 2006-Ohio-1159, 2006 WL 620914, ¶ 9, citing State ex rel. Bush v. Spurlock , 42 Ohio St.3d 77, 80, 537 N.E.2d 641 (1989). Appellate courts review de novo the issue of subject-matter jurisdiction without any deference to the trial court's determination. Cheap Escape Co., Inc. v. Tri–State Constr., LLC , 173 Ohio App.3d 683, 2007-Ohio-6185, 880 N.E.2d 122, ¶ 18 (10th Dist.).

IV. LEGAL ANALYSIS

A. First Assignment of Error

{¶ 9} In appellants' first assignment of error, appellants argue the trial court erred when it dismissed their complaints against appellees for lack of subject-matter jurisdiction because the claims alleged in the complaints are purely equitable in nature and, therefore, within the jurisdiction of the courts of common pleas. We disagree.

{¶ 10} R.C. 2743.03 created the Court of Claims and vested the court with jurisdiction of the following:

(A)(1) * * * The court of claims is a court of record and has exclusive, original jurisdiction of all civil actions against the state permitted by the waiver of immunity contained in section 2743.02 of the Revised Code and exclusive jurisdiction of the causes of action of all parties in civil actions that are removed to the court of claims. The court shall have full equity powers in all actions within its jurisdiction and may entertain and determine all counterclaims, cross-claims, and third-party claims.

(Emphasis added.)

{¶ 11} R.C. 2743.02(A)(1) sets out the state's waiver of sovereign immunity, in relevant part, as follows:

The state hereby waives its immunity from liability, * * * and consents to be sued, and have its liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicable to suits between private parties, except that the determination of liability is subject to the limitations set forth in this chapter * * *. To the extent that the state has previously consented to be sued, this chapter has no applicability.

{¶ 12} Pursuant to the statutory framework, the Ohio General Assembly vested the Court of Claims with exclusive, original jurisdiction of all civil actions against the state permitted by the waiver of immunity contained in R.C. 2743.02 and full equity powers in all actions within its jurisdiction. State ex rel. Moritz v. Troop , 44 Ohio St.2d 90, 92, 338 N.E.2d 526 (1975). In Cristino v. Ohio Bur. of Workers' Comp. , 10th Dist. No. 13AP-772, 2014-Ohio-1383, 2014 WL 1347158, appeal not allowed , 140 Ohio St.3d 1416, 2014-Ohio-3785, 15 N.E.3d 884, this court defined the jurisdictional limits of the Court of Claims in terms of the particular relief sought as follows:

The [Court of Claims Act] does not apply "[t]o the extent that the state ha [d] previously consented to be sued" in the courts of common pleas. R.C. 2743.02(A)(1). * * * As a result, the Court of Claims has no jurisdiction over actions that only seek declaratory judgment or injunctive relief because, before the advent of the act, parties could sue the state for declaratory and injunctive relief in the courts of common pleas. Racing Guild of Ohio, Local 304, Serv. Emps. Internatl. Union, AFL–CIO, CLC v. Ohio Racing Comm. , 28 Ohio St.3d 317, 320, 28 Ohio B. 386, 503 N.E.2d 1025 (1986). Nevertheless, when a claim for declaratory judgment, injunctive relief or other equitable relief is ancillary to a claim over which the Court of Claims has jurisdiction, the Court of Claims possesses jurisdiction to adjudicate the entire action. R.C. 2743.03(A)–(2) ; Ohio Hosp. Assn. v. Ohio Dept. of Human Servs. , 62 Ohio St.3d 97, 103, 579 N.E.2d 695 (1991). The Court

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