Vandercar, L.L.C. v. Port of Greater Cincinnati Dev. Auth.

• Jurisdiction: Ohio,United States
• Court: Ohio Supreme Court
• Writing for the Court: FISCHER, J.
• Citation: Vandercar, L.L.C. v. Port of Greater Cincinnati Dev. Auth., 2024 Ohio 1501, 2022-1312 (Ohio Apr 23, 2024)
• Docket Number: 2022-1312
• Decision Date: 23 April 2024
• Parties: VANDERCAR, L.L.C., APPELLANT, v. PORT OF GREATER CINCINNATI DEVELOPMENT AUTHORITY, APPELLEE.
• topic: Contracts,Civil Procedure,Public Sector Law

1

2024-Ohio-1501

VANDERCAR, L.L.C., APPELLANT, v. PORT OF GREATER CINCINNATI DEVELOPMENT AUTHORITY, APPELLEE.

No. 2022-1312

Supreme Court of Ohio

April 23, 2024

Submitted September 12, 2023

Appeal from the Court of Appeals for Hamilton County, Nos. C-210643 C-210665, and C-220130, 2022-Ohio-3148.

Taft Stettinius & Hollister, L.L.P., W. Stuart Dornette Russell S. Sayre, and Beth A. Bryan, for appellant Vandercar, L.L.C.

Calfee, Halter & Griswold, L.L.P., David T. Bules, Mitchell G. Blair, Matthew A. Chiricosta, and Xin (Sage) Wen for appellee, The Port of Greater Cincinnati Development Authority.

Squire Patton Boggs (U.S.), L.L.P., Scott A. Kane, Shams H. Hirji, and Gregory R. Daniels, urging affirmance for amici curiae Columbus-Franklin County Finance Authority, Development Finance Authority of Summit County, Dayton-Montgomery County Port Authority, and Toledo-Lucas County Port Authority.

FISCHER, J.

{¶ 1} Appellant, Vandercar, L.L.C. ("Vandercar"), was granted summary judgment on its breach-of-contract claim against appellee, the Port of Greater Cincinnati Development Authority ("the Port"). The issue before this court is whether the Port may be required to pay prejudgment interest under R.C. 1343.03(A). We hold that the Port may be held liable to pay prejudgment interest because the Port, a port authority created under R.C. 4582.22(A), is not exempt from the application of R.C. 1343.03(A), which entitles a creditor to prejudgment interest when the creditor receives a judgment for the payment of money due under a contract. Therefore, we reverse the judgment of the First District Court of Appeals, and we remand the cause to the trial court to evaluate Vandercar's motion for prejudgment interest under the correct standard.

I. BACKGROUND

{¶ 2} Vandercar entered into a $36 million purchase contract with the owner of the Millennium Hotel in Cincinnati and then assigned its interest in the hotel to the Port. Under the agreement between Vandercar and the Port, the Port would pay Vandercar a $5 million "Additional Vandercar Redevelopment Fee" ("the redevelopment fee") if the Port issued bonds to redevelop the hotel within a year of its acquisition. The Port acquired the hotel and issued acquisition bonds, but it denied that the bonds were for redevelopment of the hotel, so it refused to pay the redevelopment fee.

{¶ 3} Vandercar sued the Port for breach of contract for failing to pay the redevelopment fee. The parties filed competing motions for summary judgment. Vandercar also moved for prejudgment interest under R.C. 1343.03, arguing that the redevelopment fee had become due under the agreement and it was therefore entitled to prejudgment interest.

{¶ 4} The trial court found that Vandercar was entitled to the redevelopment fee and granted Vandercar's motion for summary judgment on that issue. However, the trial court denied Vandercar's motion for prejudgment interest, concluding that prejudgment interest could not be imposed on the Port since it was "an arm/instrumentality of the state." Hamilton C.P. No. A 2000900, 2022 WL 19559389 (Mar. 15, 2022).

{¶ 5} Both parties appealed to the First District. The First District affirmed the trial court's grant of summary judgment in favor of Vandercar on its breach-of-contract claim concerning the redevelopment fee, and it affirmed the trial court's denial of Vandercar's motion for prejudgment interest.

{¶ 6} Vandercar appealed to this court, asserting two propositions of law concerning the denial of its motion for prejudgment interest: (1) "Port authorities, which have been stripped by the General Assembly of all sovereign immunity, are liable for prejudgment interest," and (2) "When a governmental entity enters into a commercial contract with a private party, the governmental entity is treated as any other party for purposes of assessment of prejudgment interest." We accepted jurisdiction over the appeal. 168 Ohio St.3d 1526, 2023-Ohio-86, 200 N.E.3d 1148.

II. ANALYSIS

A. Under the plain language of R.C. 1343.03(A) and 4582.22(A), a port authority may be held liable for prejudgment interest when a judgment has been entered against it for payment of money due under a contract

{¶ 7} This appeal concerns whether the Port, a port authority created under R.C. 4582.22(A), may be held liable under R.C. 1343.03(A) for prejudgment interest when a judgment has been entered against it for payment of money due under a contract. The answer to this question lies within the plain language of the statutes. See Caldwell v. State, 115 Ohio St. 458, 466-467, 154 N.E. 792 (1926).

{¶ 8} The General Assembly enacted R.C. Chapter 4582 to permit municipal corporations, townships, and counties to create port authorities. See R.C. 4582.02 and 4582.22. A port authority is a "body corporate and politic," R.C. 4582.21(A), that "may sue and be sued, plead and be impleaded," R.C. 4582.22(A). The powers of a port authority are dictated by R.C. Chapter 4582 and are considered "essential governmental functions of this state, but no port authority is immune from liability by reason thereof." (Emphasis added.) R.C. 4582.02 and 4582.22(A). The General Assembly has granted immunity to a port authority's director and members of its board for monetary damages that arise from actions those persons take in the performance of their official duties, with three exceptions: (1) the act or any omission is not made in good faith, (2) the act involves intentional misconduct or a knowing violation of the law, or (3) the act results in the director's gain of an improper personal benefit. R.C. 4582.031 and 4582.271. Other than the limited immunity granted to the director and the members of the board of a port authority, there are no exceptions in R.C. Chapter 4582 to a port authority's liability.

{¶ 9} Under R.C. 1343.03, parties are entitled to prejudgment interest in certain situations, including when a creditor receives a judgment for the payment of money due under a contract, R.C. 1343.03(A). In R.C. 1343.03(D), the General Assembly set forth two exceptions to application of the interest rules contained in R.C. 1343.03. The first exception is that R.C. 1343.03(B), which addresses the method of computing the amount of monetary interest in a matter that has been settled by the parties, "does not apply to a judgment, decree, or order rendered in a civil action based on tortious conduct or a contract or other transaction." R.C. 1343.03(D). And the second exception is that R.C. 1343.03(C), which addresses the method of computing the amount of monetary interest in a matter in which the parties did not make a good-faith effort to settle the action, "does not apply to a judgment, decree, or order rendered in a civil action based on tortious conduct * * * if it is rendered in an action against the state in the court of claims." (Emphasis added.) R.C. 1343.03(D). The General Assembly did not include in R.C. 1343.03(D) any exception to the application of R.C. 1343.03(A). Had it wanted to include an exception to the application of R.C. 1343.03(A) in civil cases involving a judgment for payment of money due under a contract, it knew how to do so, as demonstrated by its enactment of R.C. 1343.03(D). See State v. Droste, 83 Ohio St.3d 36, 39, 697 N.E.2d 620 (1998) ("Under the general rule of statutory construction expressio unius est exclusio alterius, the expression of one or more items of a class implies that those not identified are to be excluded").

{¶ 10} Reading R.C. 1343.03 and 4582.22 together, by their plain language, a port authority may be ordered to pay prejudgment interest under R.C. 1343.03(A). In this case, the Port, as a port authority created under R.C. 4582.22(A), may be held liable for the actions it took pursuant to the powers granted it under R.C. Chapter 4582. R.C. Chapter 4582 does not provide immunity to the Port for those actions; specifically, it does not include a statute that provides immunity against liability for prejudgment interest. Thus, for failing to pay the money due under its contract with Vandercar, the Port may be held liable for prejudgment interest under the plain language of R.C. 1343.03(A), because R.C. 1343.03(D) does not provide any exception to the application of R.C. 1343.03(A). The Port points to no statutory provision that grants it immunity from prejudgment-interest liability by altering the application of R.C. 1343.03(A).

{¶ 11} The Port contends that R.C. 4582.22 must include an express reference to the state to waive a port authority's immunity as a political subdivision of the state. The Port maintains that this point is best illustrated by the General Assembly's enactment of R.C. 2743.18(A)(1), which allows creditors to seek prejudgment interest from the state for actions brought in the Court of Claims only. The Port posits that the General Assembly's decision to allow parties to seek prejudgment interest from the state by using explicit language authorizing prejudgment-interest liability in R.C. 2743.18(A)(1) but not to allow parties to seek prejudgment interest from port authorities by choosing not to use similar language in R.C. 4582.22(A) demonstrates that the General Assembly did not intend to allow parties to seek prejudgment interest from port authorities. But this argument fails because it ignores the existence of express exceptions to a port authority's liability under R.C. 4582.271 and to application of the interest rules under R.C. 1343.03(D).

{¶ 12} We must give effect to the words used in the statutes and refrain from adding or deleting words or phrases to the language chosen by the General Assembly. See Hulsmeyer v. Hospice of Southwest Ohio, Inc., 142 Ohio St.3d 236, 2014-Ohio-5511, 29 N.E.3d 903, ¶ 26. We will not create an exception to a...