American Federation of State v. Blue Cross of Central Ohio

414 N.E.2d 435, 64 Ohio App. 2d 262, 18 Ohio Op. 3d 227, 1979 Ohio App. LEXIS 8441
CourtOhio Court of Appeals
DecidedMay 1, 1979
Docket78AP-723
StatusPublished
Cited by8 cases

This text of 414 N.E.2d 435 (American Federation of State v. Blue Cross of Central Ohio) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Federation of State v. Blue Cross of Central Ohio, 414 N.E.2d 435, 64 Ohio App. 2d 262, 18 Ohio Op. 3d 227, 1979 Ohio App. LEXIS 8441 (Ohio Ct. App. 1979).

Opinion

Moyer, J.

This case is before us on plaintiffs-appellants’ appeal from two orders of a final judgment of the Court of Claims, dismissing defendants-appellees, Blue Cross of Central Ohio, Blue Cross of Northeast Ohio, Hospital Care Cor *263 poration, Blue Cross of Northwest Ohio, Ohio Medical Indemnity, Inc., and Medical Mutual of Cleveland, Inc., and dismissing plaintiffs’ complaint for lack of jurisdiction.

On August 15, 1978, plaintiffs filed a class action complaint in the Court of Claims, alleging that the state of Ohio, through the State Employee Compensation Board, entered into a series of contracts with defendant insurance companies to provide medical insurance for state employees. The contracts are not a part of the record. The complaint further alleged that said policies provide that the state of Ohio would pay seventy percent of the premium from state funds, that thirty percent of the premiums would be paid by the individual employees who entered an agreement for insurance coverage, and that the plans require defendant insurance companies to refund any excess premiums paid over the sum of incurred claims plus a retention charge. It is alleged that premiums are paid on the basis of estimated amounts, with final refund to be made after the expiration of the policies and a determination of all outstanding liability. The complaint further alleges that over five million dollars has been refimded, that the individual plaintiffs and members of the class are state employees who accepted the offer of the state that they be provided insurance coverage for payment of thirty percent of the total premium cost, that they have contributed thirty percent of such cost and that they are, therefore, entitled to a portion of the excess premium refunds already received by the state and to a portion of additional refunds due the state. It is alleged that plaintiffs are third-party beneficiaries of the insurance contract and that each plaintiff is entitled to distribution of his individual share in such refunds.

The prayer of the complaint seeks declaratory judgment as to plaintiffs’ rights in the refunds already made and to additional refunds, relief by injunction and mandamus against state officers in their official capacity to prevent the distribution of refund monies prior to conclusion of the suit, and to require proper deposit of the funds and safekeeping. The prayer of the complaint does not expressly request a money judgment.

Plaintiffs assert two assignments of error, as follows:

“I. The Court of Claims erred in dismissing the Complaint, where the facts pleaded show a primary claim directly *264 against the State of Ohio, arising out of a breach of contract, and a claim for recovery of funds held in trust, or both.
“II. The Court of Claims erred in dismissing the Complaint without granting plaintiffs-appellants leave to amend to specifically plead a claim for money, and a prayer for money judgment, and to cure any other technical defects.”

In rendering its final judgment, the court made the following conclusions:

“The Court further concludes that the primary relief sought is a declaration of rights in conjunction with mandamus and injunctive relief all of which is primary and not secondary to the monetary relief.
“The Court further concludes this Court has no jurisdiction in mandamus and only ancilliary [sic] equitable relief jurisdiction incidental to money judgments.
“The Court further concludes declaratory judgment relief is not an alternate jurisdiction vested in the Court of Claims. It is not against the State but an officer which jurisdiction in the general common pleas jurisdiction long antedated the establishment of the Court of Claims.”

While the jurisdiction of the Court of Claims has been the issue in several cases since its establishment in 1975, the case before us presents an opportunity to further clarify the breadth of its jurisdiction. By the adoption of R. C. Chapter 2743, the General Assembly waived the state’s immunity from liability in exchange for a complainant’s waiver of his cause of action against state officers or employees. It also provided that claims against the state would be determined in the Court of Claims, in accordance with the same rules of law applicable to suits between private parties subject to certain limitations. See R. C. 2743.02. One of the most important provisions of R. C. 2743.02 is the following:

“ * * * To the extent that the state has previously consented to be sued, this chapter has no applicability.” R. C. 2743.02(A).

The jurisdiction of the Court of Claims is provided in R. C. 2743.03(A):

“(A) There is hereby created a court of claims. 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, exclusive jurisdiction of the causes of action of *265 all parties in civil actions that are removed to the court of claims and of determinations pursuant to sections 5315.04 and 5315.05 of the Revised Code, and jurisdiction to hear appeals from the decisions of the court of claims commissioners. 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.)

Because the direction of the General Assembly is clear in giving the Court of Claims full equity powers, we have only to determine whether a declaratory judgment action would be a proper remedy in accordance with the same rules of law applicable to this suit were it brought in another trial court of this state, and whether this case is against the state or against officers or employees of the state.

R. C. 2721.02 provides, in part, as follows:

“Courts of record may declare rights, status, and other legal relations whether or not further relief is or could be claimed. * * * ”

R. C. 2721.04 provides:

“A contract may be construed by a declaratory judgment either before or after there has been a breach thereof.”

Civ. R. 18 provides for the joinder of claims and remedies in one action. The declaratory procedure does not extend the jurisdiction of a court over subject matter, but, rather, extends the power of the court to grant and declare relief within its respective jurisdiction. See State, ex rel. Foreman, v. Bellefontaine Municipal Court (1967), 12 Ohio St. 2d 26. The equitable powers of courts of record were given to the Court of Claims and can be exercised if the Court of Claims otherwise has jurisdiction over a case.

Defendants argue that plaintiffs’ complaint is an action against officers of the state rather than the state of Ohio. The cases cited by defendants are all cases in which employees or officers of the state, not the state of Ohio, were the parties.

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Bluebook (online)
414 N.E.2d 435, 64 Ohio App. 2d 262, 18 Ohio Op. 3d 227, 1979 Ohio App. LEXIS 8441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-federation-of-state-v-blue-cross-of-central-ohio-ohioctapp-1979.