Banker's Choice, L.L.C. v. Cincinnati Zoning Bd. of Appeals

2019 Ohio 4854

• Court: Ohio Court of Appeals
• Decided: November 27, 2019
• Docket: C-180578
• Status: Published

Opinion

[Cite as Banker's Choice, L.L.C. v. Cincinnati Zoning Bd. of Appeals, 2019-Ohio-4854.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

BANKER’S CHOICE, LLC, : APPEAL NO. C-180578 TRIAL NO. A-1501964 and :

STOUGH DEVELOPMENT : O P I N I O N. CORPORATION, : Plaintiffs-Appellees, : vs. : ZONING BOARD OF APPEALS OF THE CITY OF CINCINNATI, :

and :

CITY OF CINCINNATI, :

Defendants-Appellants. :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed and Cause Remanded

Date of Judgment Entry on Appeal: November 27, 2019

Barrett & Weber and C. Francis Barrett, for Plaintiffs-Appellees,

Paula Boggs Muething, City Solicitor, Marion E. Haynes, III, Assistant City Solicitor, and Kevin M. Tidd, Senior Assistant City Solicitor, for Defendants- Appellants. OHIO FIRST DISTRICT COURT OF APPEALS

Z A Y A S , Presiding Judge. {¶1} This is the second appeal by defendants-appellants Zoning Board of

Appeals for the city of Cincinnati and the city of Cincinnati (collectively, “the ZBA”).

The ZBA now argues that the trial court did not follow this court’s remand

instructions set forth in Banker’s Choice, LLC v. Zoning Bd. of Appeals of City of

Cincinnati, 2018-Ohio-3030, 106 N.E.3d 1271 (1st Dist.) (“Banker’s Choice I”). For

the following reasons, we agree.

Facts and Procedural History

{¶2} Plaintiffs-appellees Banker’s Choice, LLC, and Stough Development

Corporation (collectively, “Banker’s Choice”) are Cincinnati property developers that

own a deteriorated property known as the Davis Furniture Building located at 1119-

1123 Main Street. As discussed in Banker’s Choice I, Banker’s Choice purchased the

Davis Furniture Building at a sheriff’s sale for $125,000 “to alleviate the ‘eyesore’ * *

* the building had become and to protect the economic well-being of their property

across the street.” Banker’s Choice I at ¶ 2.

{¶3} After the purchase, Banker’s Choice sought to demolish the building.

Under the Cincinnati zoning code, Banker’s Choice was required to seek a certificate

of appropriateness for demolition from the Historic Conservation Board. See

Cincinnati Municipal Code 1435-01-C and 1435-09-01. After holding three hearings

and reviewing extensive records submitted as part of their application, the Historic

Conservation Board denied Banker’s Choice’s request for a certificate.

{¶4} Banker’s Choice appealed to the Zoning Board of Appeals for the city

of Cincinnati (“Zoning Board”), which affirmed the Historic Conservation Board’s

determination. “The Zoning Board concluded that the preponderance of the

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substantial, reliable, and probative evidence confirmed that Banker’s Choice had

failed to demonstrate that it would be deprived of ‘all economically viable use[s] of

the property * * * without approval’ of the certificate of appropriateness for

demolition.” Banker’s Choice I at ¶ 5. Banker’s Choice then appealed to the

Hamilton County Common Pleas Court, where the case was referred to a magistrate.

The parties presented additional evidence before the magistrate, who subsequently

vacated the decision of the Zoning Board and approved Banker’s Choice’s certificate

of appropriateness for demolition.

{¶5} The magistrate held that the Historic Conservation Board violated

Banker’s Choice’s due-process rights, “that the Davis Furniture Building was not a

‘historical asset’ or a ‘historic structure’ as those terms are defined in the municipal

code, and that three offers to purchase the building [from Banker’s Choice] were

‘illusory’ and ‘not bona fide offers.’ ” Banker’s Choice I at ¶ 6. The magistrate also

held the permissive standard by which the Historic Conservation Board may issue a

certificate of appropriateness for demolition “unconstitutional and contrary to Ohio

law.” Id. The magistrate found that Banker’s Choice had proven that it was not

economically viable to rehabilitate the Davis Furniture Building and ordered the

Historic Conservation Board to issue a certificate of appropriateness for its

demolition.

{¶6} The ZBA timely objected to the magistrate’s decision, and the trial

court held oral argument on those objections. Disagreeing with the magistrate’s

findings, the trial court concluded that Banker’s Choice was not prejudiced by the

administrative proceedings before the Historic Conservation Board, “that the Davis

Furniture Building was ‘part of a group of buildings that may be deemed to be of an

historically significant area and era,’ and that ‘at least one and perhaps all three’

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offers to purchase the property were made ‘in good faith.’ ” Banker’s Choice I at ¶ 7.

The trial court did “not question nor decide the constitutionality of the [city]

ordinances that find the [Davis Furniture] Building to be historic assets.”

Additionally, “the trial court treated the ‘fact that no one purchased the building’ as

‘substantial evidence that any real or perceived economic hardship * * * was not

relieved’ by the purchase offers.” Id. The trial court also denied the ZBA’s request

for an injunction under R.C. 713.13. Ultimately, the trial court overruled the ZBA’s

objections, agreed in part with the magistrate’s conclusions, and ordered the

issuance of a certificate of appropriateness for the demolition.

{¶7} The ZBA then appealed to this court, arguing that the trial court erred

in vacating the decision of the Zoning Board and ordering the issuance of a certificate

of appropriateness for demolition. The ZBA argued, in part, that the trial court failed

to apply the requisite three-factor “economic hardship” test under Cincinnati

Municipal Code 1435-09-2(b) before ordering the approval of the certificate.

{¶8} Pursuant to Cincinnati Municipal Code 1435-09-2, the Zoning Board

may approve or approve with conditions an application for a Certificate of

Appropriateness when it finds either:

(a) That the property owner has demonstrated by credible evidence

that the proposal substantially conforms to the applicable conservation

guidelines; or

(b) That the property owner has demonstrated by credible evidence

that the property owner will suffer economic hardship if the certificate

of appropriateness is not approved.

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Cincinnati Municipal Code 1435-09-2. In determining whether the property owner

has demonstrated an economic hardship, the Historic Conservation Board must

consider all of the following three factors:

(i) Will all economically viable use of the property be deprived without

approval of a Certificate of Appropriateness;

(ii) Will the reasonable investment-backed expectations of the

property owner be maintained without approval of a Certificate of

Appropriateness; and

(iii) Whether the economic hardship was created or exacerbated by the

property owner.

Id.

{¶9} Upon reviewing the trial court’s decision, this court agreed in part with

the ZBA. This court held that the trial court did not evaluate all three factors of the

three-factor economic hardship test prior to ordering the issuance of a certificate of

appropriateness for demolition. We found that the trial court improperly focused on

Banker’s Choice’s inability to sell the Davis Furniture Building, rather than “continue

on and to determine whether Banker’s Choice had been denied all economically

viable use of the Davis Furniture Building, whether it could have maintained its

reasonable investment-backed expectations, and whether it had created or

exacerbated its own economic hardship.” Banker’s Choice I at ¶ 15.

{¶10} This court determined that part of the problem stemmed from the trial

court’s rejection of factual findings that underpinned the magistrate’s decision. Id. at

¶ 17. For instance, the trial court rejected the magistrate’s finding that none of the

three offers to purchase the Davis Furniture Building from Banker’s Choice were

bona fide offers. But the magistrate’s determination on these offers-to-purchase

5 OHIO FIRST DISTRICT COURT OF APPEALS

directly affected its analysis of the first “economic hardship” factor—whether

Banker’s Choice would be deprived of all economically viable use of the property. (It

found that because none of the offers were legitimate, the Davis Furniture Building

essentially could not be sold for sufficient compensation, and thus Banker’s Choice

would be deprived of economically viable use of the property.) So, while the trial

court later adopted the magistrate’s decision, its conflicting findings made it

impossible for this court to “read together” the magistrate’s decision and the trial

court’s judgment to determine whether the trial court correctly applied the law. Id.

{¶11} On remand, the trial court was instructed to apply “the proper

standard consistent with law and this opinion.” Id. at ¶ 20. The trial court instead

undertook to rerule on the ZBA’s objections to the magistrate’s decision. In a brief

subsequent entry, the trial court overruled all of the objections to the magistrate’s

decision and simply adopted the magistrate’s decision in its entirety—including all of

the factual and legal findings, some of which were previously rejected.

{¶12} The ZBA now appeals, asserting four assignments of error.

Legal Analysis

{¶13} In its first assignment of error, the ZBA argues that the trial court

violated the law-of-the-case doctrine when it adopted the magistrate’s decision in its

entirety. The ZBA contends that the adopted decision contains irreconcilable legal

findings that ultimately contradict the remand instructions from this court in

Banker’s Choice I. Banker’s Choice maintains that the trial court did follow the

mandate of this court on remand. Based upon the record before us, we agree with

the ZBA.

{¶14} The “law of the case” doctrine “provides that the decision of a

reviewing court in a case remains the law of that case on the legal questions involved

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for all subsequent proceedings in the case at both the trial and reviewing levels.”

(Internal citations omitted.) Nolan v. Nolan, 11 Ohio St.3d 1, 3, 462 N.E.2d 410

(1984). This doctrine is a rule of practice that “functions to compel trial courts to

follow the mandates of reviewing courts.” Id. Therefore, on remand, when the trial

court is presented with the same facts and issues involved in a prior appeal, it “is

bound to adhere to the appellate court’s determination of the applicable law.” Id.

“[T]he trial court is without authority to extend or vary the mandate given.” Id.,

citing Briggs v. Pennsylvania RR. Co., 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403

(1948).

{¶15} Here, the only basis for remand was the issue of whether Banker’s

Choice demonstrated by credible evidence that it will suffer economic hardship—

under the three-factor “economic hardship” test—if the certificate of appropriateness

for demolition of the Davis Furniture Building is not approved. No other legal issues

were remanded for the trial court to decide. That portion of the trial court’s

judgment denying the ZBA’s request for an injunction was affirmed. However,

rather than heed this instruction to address a limited issue on remand, the trial court

chose to adopt the magistrate’s decision in its entirety. Effectively, the trial court

vacated its previous judgment, including all of the factual and legal findings that

differed from the magistrate’s decision which had been upheld in Banker’s Choice I.

The trial court’s judgment now holds, inter alia, that the ZBA violated Banker’s

Choice’s due-process rights and that part of the Cincinnati zoning code is

unconstitutional.

{¶16} “[A]bsent extraordinary circumstances, such as an intervening

decision by [the Ohio Supreme Court], an inferior court has no discretion to

disregard the mandate of a superior court in a prior appeal in the same case.” Nolan,

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11 Ohio St.3d at 5, 462 N.E.2d 410. There were no extraordinary circumstances

present in this case. Consequently, the trial court did not have discretion to decline

to perform the “economic hardship” analysis. Furthermore, it did not have the

discretion to extend the mandate given by this court in adopting legal holdings from

the magistrate’s decision that it had previously rejected.

{¶17} “Upon remand from an appellate court, the lower court is required to

proceed from the point at which the error occurred.” (Internal quotations omitted.)

State ex rel. Douglas v. Burlew, 106 Ohio St.3d 180, 2005-Ohio-4382, 833 N.E.2d

293, ¶ 11. Accordingly, the trial court should have started its analysis at the

application of the three-factor “economic hardship” test to the facts of this case. It

should not have proceeded to rerule on objections to the magistrate’s decision. The

trial court was not instructed to “start over” on remand. The remand simply

required the trial court to examine and apply the three-factor test.

{¶18} The trial court failed to follow the mandate of this court on remand,

and in doing so violated the law-of-the-case doctrine. This was error.

{¶19} The ZBA’s first assignment of error is sustained. Because the first

assignment of error is dispositive of this appeal, we decline to address the second,

third, and fourth assignments of error.

Conclusion

{¶20} The trial court’s judgment is reversed, and the cause is remanded for

further proceedings not inconsistent with this opinion. On remand, the trial court

must apply the three-factor “economic hardship” test under Cincinnati Municipal

Code 1435-09-2(b) to its factual findings and decide whether Banker’s Choice

demonstrated by credible evidence that it will suffer economic hardship if the

8 OHIO FIRST DISTRICT COURT OF APPEALS

certificate of appropriateness for demolition of the Davis Furniture Building is not

approved.

Judgment accordingly.

MYERS and CROUSE, JJ., concur.

Please note:

The court has recorded its own entry on the date of the release of this opinion.