Wallace v. Ohio Dept. of Commerce

• Decision Date: 04 September 2002
• Docket Number: No. 2000-2178.,2000-2178.
• Citation: 96 Ohio St.3d 266,2002 Ohio 4210,773 N.E.2d 1018
• Parties: WALLACE et al., Appellants, v. OHIO DEPARTMENT OF COMMERCE, DIVISION OF STATE FIRE MARSHAL, Appellee.
• Court: Ohio Supreme Court

Page 1018

773 N.E.2d 1018

96 Ohio St.3d 266

2002 Ohio 4210

WALLACE et al., Appellants, v. OHIO DEPARTMENT OF COMMERCE, DIVISION OF STATE FIRE MARSHAL, Appellee.

No. 2000-2178.

Supreme Court of Ohio.

Submitted December 11, 2001.

Decided September 4, 2002.

Waite, Schneider, Bayless & Chesley Co., L.P.A., Stanley M. Chesley, Paul M. De Marco, Robert A. Steinberg, D. Arthur Rabourn and Jane H. Walker, Cincinnati, for appellants.

Betty D. Montgomery, Attorney General, Stephen P. Carney, Associate Solicitor, William C. Becker, Randall W. Knutti and Rebecca L. Thomas, Assistant Attorneys General, for appellee.

Vorys, Sater, Seymour & Pease, L.L.P., Duke W. Thomas, Columbus, Anthony J. O'Malley and Marcel C. Duhamel, Cleveland, urging reversal for amicus curiae OHA: The Association of Hospitals and Health Systems.

Jenks, Surdyk, Oxley, Turner & Dowd Co., L.P.A., Robert J. Surdyk, Dayton, and James Ickes, urging affirmance for amici curiae Public Entities Pool of Ohio and Ohio Township Association Risk Management Authority.

COOK, J.

{¶ 1} This case asks us to decide whether the state may raise the public-duty rule as a bar to liability in an action in the Court of Claims alleging negligent inspection by the Ohio Department of Commerce, Division of the Fire Marshal ("fire marshal"). Because the public-duty rule is inconsistent with the express language of the Court of Claims Act, we hold that the state may not.

I

{¶ 2} On July 3, 1996, Todd Hall carried a lit cigarette into the Ohio River Fireworks store in Scottown, Lawrence County, Ohio. Before store employees could intervene, Hall used the cigarette to ignite a stack of "crackling wheel" fireworks. Those fireworks ignited other fireworks in the store and caused a devastating fire, which killed nine people and injured several others.¹ Although the store was equipped with a sprinkler system, the system was disabled at the time of the blaze.

{¶ 3} On the day of the fire, Flying Dragon, Inc., held a valid fireworks wholesaler license, issued by the fire marshal, to operate the Ohio River Fireworks store. As a condition of licensure, James Saddler, a certified safety inspector employed by the fire marshal, had inspected the Ohio River Fireworks store in October 1995 as required by statute. See R.C. 3743.16. During the mandatory licensing inspection, Saddler had tested the store's sprinkler system and found it to be operational. Saddler noted no safety violations and recommended approving the store's license renewal application.

{¶ 4} In addition to the mandatory annual licensing inspection, Ohio River Fireworks was also subject to R.C. 3743.21(A), which authorizes the fire marshal to inspect a licensed wholesaler's premises at any time during the license period.² Prior to 1996, as a matter of internal policy, the chief of the fire marshal's code enforcement bureau encouraged inspectors to make seasonal inspections of fireworks establishments during the July 4th fireworks season to ensure compliance with applicable statutes and safety regulations. Under this policy, Saddler performed two such seasonal inspections of the Ohio River Fireworks facility during the spring of 1995 and found the store's sprinkler system to be functional. In May 1996, Daniel L. Lehman, then acting as chief of the fire marshal's code enforcement bureau, reiterated the policy in an interoffice memorandum:

{¶ 5} "Although the annual licensing inspection is conducted during the renewal period in the fourth quarter of each calendar year, it is important to have every licensed fireworks facility visited by an inspector between now and July 4, 1996. The minimum acceptable level of activity is one visit to each facility, and return visits should be as needed and in consultation with the respective supervisor. The licensed facilities should be appropriately monitored by these cursory inspections to check for overall compliance during this peak period."

{¶ 6} In June 1996, a commercial competitor of the Ohio River Fireworks store informed the fire marshal that Ohio River Fireworks was advertising and selling Class B fireworks to individuals who were not authorized to purchase them. See former R.C. 3743.45(B), 1995 Am.Sub.S.B. No. 2, 146 Ohio Laws, Part IV, 7647 (forbidding licensed wholesalers to sell Class B fireworks to an Ohio resident who is not a licensed wholesaler, manufacturer, or exhibitor); see, also, R.C. 3743.44(A) (setting forth similar restriction on sales to nonresident purchasers).³ After learning of this possible violation, Michael Kraft — then acting as the assistant chief of the fire marshal's code enforcement bureau — organized a "buy bust" operation during which fire marshal agents would attempt to purchase Class B fireworks without a proper license. To prevent the planned operation from being compromised, Kraft and Lehman postponed any seasonal inspection of the Ohio River Fireworks store until after they had completed the buy bust. As a result of this directive, Saddler did not perform a seasonal inspection of the Ohio River Fireworks facility prior to the fire.

{¶ 7} Five days before the fatal fire, arson investigator Donald Eifler posed as a customer at Ohio River Fireworks and successfully purchased Class B fireworks without being required to show authorization to do so. When the buy bust was complete, Kraft retrieved the money used in the operation for evidentiary purposes and ordered the store's proprietor to stop selling Class B fireworks to unauthorized purchasers. None of the three fire marshal agents who were present at the buy bust conducted a fire safety inspection at any time that day.

{¶ 8} The appellants, persons injured in the fire and administrators of the decedents' estates, filed this lawsuit in the Court of Claims, alleging negligence claims against the fire marshal. The amended complaint alleged, among other things, that the fire marshal was negligent in failing to perform an adequate fire safety inspection on the date of the buy bust and otherwise failing to comply with the internal policy of conducting seasonal inspections during the peak fireworks season. The appellants further alleged that a reasonable inspection by the fire marshal would have revealed the store's inoperable sprinkler system and a host of other fire hazards.

{¶ 9} At trial, the appellants presented testimony indicating that the store's sprinkler system was turned off at the time of the fire. The appellants also presented testimony suggesting that the shutdown of the sprinkler system was not an isolated occurrence: inspector Thomas Baker testified that he had found the sprinkler system shut down during a "walk through" he performed at the Ohio River Fireworks store in July 1994. In addition, the appellants offered testimony from two experts, who opined that the decedents would have had a good chance of surviving the fire if the sprinkler system had functioned properly. Another expert testified that any one of the fire marshal agents who were present for the buy bust could have easily determined whether the sprinkler system was operational. This expert also added that a safety inspection on the day of the buy bust would have revealed several other fire hazards throughout the store that should have been remedied.

{¶ 10} Following a four-day trial limited to the issue of liability, the Court of Claims ruled in favor of the fire marshal. In its written opinion, the court gave three distinct reasons for its decision. First, the court found that the fire marshal's failure to conduct an additional seasonal inspection at the Ohio River Fireworks facility resulted from a "high degree of discretion" exercised by Chief Lehman. The court therefore concluded that liability was precluded by the discretionary-function immunity recognized by this court in Reynolds v. State (1984), 14 Ohio St.3d 68, 14 OBR 506, 471 N.E.2d 776, paragraph one of the syllabus. Second, the court found that the public-duty rule precluded liability against the fire marshal. Invoking this court's decision in Sawicki v. Ottawa Hills (1988), 37 Ohio St.3d 222, 525 N.E.2d 468, the Court of Claims ruled that the fire marshal's inspection duties were "owed to the general public" and that the appellants had failed to establish a "special relationship" between them and the fire marshal that would preclude application of the public-duty rule. Finally, the Court of Claims decided that the proximate cause of the appellants' harm was Hall's criminal act of arson. The court concluded that this criminal act "could not have been foreseen by a reasonably prudent person" and thus broke any chain of causation that existed between any negligence by the fire marshal and the harm suffered by the appellants.

{¶ 11} The appellants appealed to the court of appeals, which found the public-duty rule to be dispositive of the action. The court of appeals held that statutes authorizing inspections by the fire marshal were designed to protect the public generally and not any particular individual. The court further agreed with the Court of Claims that there existed no special relationship between the fire marshal and the injured parties that would preclude application of the public-duty rule. The court of appeals therefore affirmed the Court of Claims' judgment based on the public-duty rule and declared the appellants' remaining assignments of error moot. The cause is now before this court pursuant to the allowance of a discretionary appeal.

II

{¶ 12} The principal focus of this appeal is the applicability of the public-duty rule to actions against the state and its agencies in the Court of Claims. The appellants argue that the public-duty rule is inconsistent with R.C. 2743.02(A)(1)'s express authorization of suits against the state in the Court of Claims. Alternatively, the appellants argue that the public-duty rule, if available as a defense to negligence actions against the state, functions as a vestige of state sovereign immunity and...