Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources

2011 Ohio 1417
CourtOhio Court of Claims
DecidedMarch 3, 2011
Docket2005-08034
StatusPublished

This text of 2011 Ohio 1417 (Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources) is published on Counsel Stack Legal Research, covering Ohio Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2011 Ohio 1417 (Ohio Super. Ct. 2011).

Opinion

[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2011-Ohio-1417.]

Court of Claims of Ohio The Ohio Judicial Center 65 South Front Street, Third Floor Columbus, OH 43215 614.387.9800 or 1.800.824.8263 www.cco.state.oh.us

CASE LEASING & RENTAL, INC.

Plaintiff

v.

OHIO DEPARTMENT OF NATURAL RESOURCES

Defendant Case No. 2005-08034

Judge Joseph T. Clark

DECISION

{¶ 1} On June 19, 2008, this court issued a liability determination in favor of plaintiff,1 an Ohio corporation and owner of an 87,500 square foot facility known as the Lake Front Racquet and Health Club (the RecPlex) in Celina, Ohio. {¶ 2} In July 2003, the RecPlex sustained extensive damage as a result of flooding that occurred after a severe storm passed through the area. The court found that defendant, the Ohio Department of Natural Resources (ODNR), was liable for such damage as a result of its negligent construction and maintenance of a spillway located near the RecPlex property. {¶ 3} On February 11, 2009, following the damages portion of the bifurcated trial, a magistrate of the court recommended judgment in the amount of $4,235,444,

1 References to “plaintiff” in this decision are to Tom Case, owner of plaintiff corporation, an entity separate from the Recplex. which consisted of $2,735,000 for diminution in value of the real property, $551,119 in personal property loss, $949,300 in interest costs on bank loans associated with restoration and repair of the property, and $25 for reimbursement of the court’s filing fee. The recommendation regarding the loss of market value was based upon a finding that plaintiff’s loss was permanent in nature inasmuch as neither the design nor the structure of the spillway were reasonably likely to change in the near future and continued intermittent flooding of the property was inevitable. {¶ 4} The parties filed timely objections to the magistrate’s recommendation. The court thereafter issued a decision, dated April 16, 2009, wherein it adopted the magistrate’s decision that the damage to plaintiff’s property was permanent, but disallowed the award of $949,300 in interest costs. The court reasoned that plaintiff’s decision to repair and reopen the RecPlex was at his own risk and expense, and that any award of interest charged upon sums borrowed to finance the repair of the RecPlex was in error. The court summarized that the loss of market value of the property was the extent of defendant’s liability and the limit of plaintiff’s recovery. Accordingly, the court entered judgment in the reduced amount of $3,286,144. {¶ 5} The parties then filed cross-appeals to the Tenth District Court of Appeals. On December 15, 2009, the appeals court affirmed this court’s decision on liability, but reversed and remanded the case for further determination on the issue of damages. The court held that the damage to plaintiff’s property should have been deemed to be temporary because, in order to prevent or minimize future flooding events, plaintiff had built an approximately six-foot-high dike around the property after the 2003 flood. The court explained that “[t]he injury to [plaintiff’s] property was temporary because it was repairable, and the owners took measures to alleviate the risk of further flooding.” Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, Franklin App. No. 09AP-498, 2009-Ohio-6573, ¶40. Therefore, the appeals court concluded that the proper measure of damages was “the reasonable cost of repair, plus reasonable compensation for the loss of the use of the property” and remanded the case “for a determination of damages for a temporary injury to the property.” Id. at ¶41. {¶ 6} Upon review of the evidence, testimony, and the arguments of counsel, the court makes the following determination. {¶ 7} Plaintiff is now claiming damages in the total amount of $5,201,911. Defendant asserts that plaintiff’s damages are minimal, if any, and puts forth essentially one argument in support of that proposition: a reassertion of its previous contention that plaintiff lacks standing to assert its damages claims. Those arguments were presented at the liability trial and were rejected in the court’s subsequent written decision.2 The determination of that issue was not assigned as error in ODNR’s appeal to the Tenth District, nor was it addressed in that court’s decision. To the contrary, the appeals court held that plaintiff was “entitled” to damages. Thus, in accordance with the law of the case doctrine, the court again rejects defendant’s arguments as to any alleged lack of standing. It is well-settled that “the decision of a reviewing court in a case remains the law of that case on the legal questions involved for all subsequent proceedings in the case at both the trial and reviewing levels.” Nolan v. Nolan (1984), 11 Ohio St.3d 1, 3. The Supreme Court of Ohio has further explained that “ the rule is necessary to ensure consistency of results in a case, to avoid endless litigation by settling the issues, and to preserve the structure of superior and inferior courts as designed by the Ohio Constitution.” Id. citing State ex rel. Potain v. Mathews (1979), 59 Ohio St.2d 29, 32. Nonetheless, the doctrine is not a substantive rule of law, but rather, is a rule of practice that should not be applied to achieve unjust results. Id. citing Gohman v. St. Bernard (1924), 111 Ohio St. 726, 730, reversed on other grounds. (Additional citations omitted.) {¶ 8} Based upon the foregoing, the court accepts as settled that plaintiff has standing to pursue his damages claims. However, the second branch of defendant’s argument is that, even if plaintiff’s standing is established, his recovery is limited to the

2 Specifically, the court held that: “[d]efendant has argued that plaintiff lacks standing to assert its claims because it did not own the property at the time of the July 2003 flood. The court finds that argument to be without merit inasmuch as plaintiff financed the purchase and received a mortgage on the property as security. Ohio law permits mortgagees to sue third parties for damage to their security interest. City of Toledo v. Brown (1936), 130 Ohio St. 513, 519. See also Trip Agency, Inc. v. R. G. Akkihal (Nov. 4, 1991), Lawrence App. No. 1790; RFC Capital Corp. v. Earthlink, Inc., Franklin App. No. 03AP-375, 2004- Ohio-7046. Moreover, at the time of the flood, the purchasers had made only one payment of $100,000 on the $3,000,000 they financed, and they had no insurance on the property. They threatened to file bankruptcy if plaintiff pursued them for the balance of the mortgage. Plaintiff never released the mortgage and the property was conveyed back to it on September 1, 2003.” Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, Ct. of Cl. No. 2005-08034, 2008-Ohio-3411, fn.2. amount that his mortgage interest was impaired. Again, that issue was not assigned as error to the Court of Appeals nor addressed in its decision. To the contrary, the appeals court specifically defined the measure of damages for temporary injury to property. Thus, the law of the case precludes further review of the issue and the court finds that application of the doctrine does not achieve an unjust result in this case. {¶ 9} Accordingly, the court turns to analysis of plaintiff’s damages claims as directed by the Court of Appeals. It is axiomatic that plaintiff bears the burden of proof on damages. Henderson v. Spring Run Allotment (1994), 99 Ohio App.3d 633, 641. In making its determination, the court’s “essential inquiry is whether the damages sought are reasonable.” Martin v. Design Const. Servs., Inc., 121 Ohio St.3d 66, 2009-Ohio-1, ¶25.

I. REPAIR AND RESTORATION {¶ 10} As discussed in this court’s liability and damages decisions, the 2003 flood devastated plaintiff’s property. Plaintiff contracted with Shinn Brothers, Inc.

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Related

Klein v. Garrison
108 N.E.2d 381 (Ohio Court of Appeals, 1951)
Reeser v. Weaver Bros., Inc.
605 N.E.2d 1271 (Ohio Court of Appeals, 1992)
Henderson v. Spring Run Allotment
651 N.E.2d 489 (Ohio Court of Appeals, 1994)
Gohman v. City of St. Bernard
146 N.E. 291 (Ohio Supreme Court, 1924)
City of Toledo v. Brown
200 N.E. 750 (Ohio Supreme Court, 1936)
State ex rel. Potain v. Mathews
391 N.E.2d 343 (Ohio Supreme Court, 1979)
Nolan v. Nolan
462 N.E.2d 410 (Ohio Supreme Court, 1984)
Martin v. Design Construction Services, Inc.
902 N.E.2d 10 (Ohio Supreme Court, 2009)

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2011 Ohio 1417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/case-leasing-rental-inc-v-ohio-dept-of-natural-res-ohioctcl-2011.