Cleveland v. Go Invest Wisely, L.L.C.

2011 Ohio 3461

Opinion

[Cite as Cleveland v. Go Invest Wisely, L.L.C., 2011-Ohio-3461.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION Nos. 95178, 95179, 95180, 95181, 95182, and 95447

CITY OF CLEVELAND

PLAINTIFF-APPELLEE

vs.

GO INVEST WISELY, LLC

DEFENDANT-APPELLANT

JUDGMENT: AFFIRMED Criminal Appeals from the Cleveland Municipal Court Case Nos. 2009 CRB 36813, 2009 CRB 41034, 2009 CRB 041015, 2009 CRB 041014, 2009 CRB 41011, and 2009 CRB 033908

BEFORE: Stewart, J., Blackmon, P.J., and Celebrezze, J.

RELEASED AND JOURNALIZED: July 14, 2011

ATTORNEY FOR APPELLANT

James J. Costello Powers Friedman Linn, PLL 23240 Chagrin Boulevard, Suite 180 Cleveland, OH 44122

ATTORNEYS FOR APPELLEE

Robert J. Triozzi Director of Law

BY: Katherine S. Zvomuya Assistant Director of Law City of Cleveland 601 Lakeside Avenue, Room 106 Cleveland, OH 44117-1077

MELODY J. STEWART, J.:

{¶ 1} Defendant-appellant, Go Invest Wisely, LLC, appeals from

misdemeanor convictions entered on no contest pleas in six consolidated housing court cases relating to its failure to remedy code violations on

properties that it owns in the city of Cleveland. The court found that Go

Invest Wisely’s violations were continuing, so it applied certain

organizational enhancements to punish each day in which the code violations

went unremedied. This resulted in fines on the six individual properties

ranging from $14,000 to $25,000, for a total of $139,000. Go Invest Wisely

challenges these fines, claiming, among other things, that the city could not

impose fines for continuing violations when the citations did not charge

continuing violations.

I

{¶ 2} Go Invest Wisely purchased homes in distressed residential

areas, made repairs to the houses, and entered into land contracts with

tenants, all with the hope of showing a profit. The business model failed.

The 2008 mortgage industry collapse resulted in thousands of home

foreclosures in the city, leading to vacant houses and depressed housing

prices. With no hope of turning a profit on the houses it owned, it appears

that Go Invest Wisely simply abandoned its houses. These houses continued

to deteriorate to the point where some of them were demolished by the city as

health and safety hazards.

{¶ 3} All of the houses involved in these consolidated cases were cited

for building code violations. The city charged Go Invest Wisely under several parts of its residential housing code relating to, among other things, sanitary

facilities, connection of fixtures, heating facilities, electrical facilities, and

general maintenance requirements. When these violations went

unremedied, the city issued new citations for failure to comply with the

earlier notice of violations. Go Invest Wisely ultimately submitted a written

no contest plea in which it acknowledged that “[t]he ordinances it has been

charged with violating are listed on the Complaints the City filed with the

Court ***.” (Emphasis sic.) It further acknowledged that the maximum

penalties for the alleged offenses were stated in various city ordinances and

that it had reviewed and understood them.

{¶ 4} The court accepted the no contest pleas and found Go Invest

Wisely guilty on all counts. When sentencing, the court noted that

organizational and continuing violation penalties were available under the

city code. For example, in 2009 CRB 36813, the court found 23 separate

continuing violations extending for 78 days, leading to a potential fine of

$4,584,000. The court did not impose the maximum fine, however, and in

the six cases imposed fines totaling $139,000.

II

{¶ 5} Go Invest Wisely first complains that the court erred by fining it

for continuing violations because the complaints did not specifically charge

that the violations were, in fact, continuing. {¶ 6} All six of the complaints were written on a Cleveland Municipal

Court Housing Division standardized form that contained the following

language:

{¶ 7} “[Y]ou did commit the following violation(s):

{¶ 8} “(1) Failure to comply with the order of the Director of Building

and Housing, a misdemeanor of the first degree, in violation of the following

section(s): ___ Building 3103.25(e), ___ Housing 367.99(a), ___ Zoning

327.99(a) as stated in the violation notice dated ___ and attached here to and

made a part hereof ***.”

{¶ 9} In each of the complaints, one or more of these blank spaces were

checked. The citation was appended to the notice of violation of building and

housing ordinances that contained a detailed recital of the nature of the

violation and the date by which Go Invest Wisely had to comply. Go Invest

Wisely maintains on appeal that the standardized form did not specifically

mention that there were continuing noncompliance violations, so it could only

be charged with a single count of noncompliance.

{¶ 10} In Cleveland v. Whitmore, 8th Dist. No. 84405, 2005-Ohio-4393,

we addressed and rejected a similar argument that a citation referring to

continuing violations was not specific enough to give notice of what had been

charged, finding that Whitmore’s failure to make this objection to the trial

court constituted a waiver of the right to argue the matter on appeal. Id. at ¶20. This holding is consistent with Crim.R. 12(C)(2), which states that any

“defenses or objections based on defects in the indictment, information or

complaint” must be raised before trial.

{¶ 11} The record does not show that Go Invest Wisely raised any

objection in the trial court to the form or substance of the citation, so it has

waived the right to argue any defect on appeal.

III

{¶ 12} Go Invest Wisely next argues that the separate continuing

violations were allied offenses of similar import so the punishments for each

individual offense should have merged for purposes of sentencing.

{¶ 13} Allied offenses are those that, despite being different offenses, are

“so allied in nature as to constitute, for all intents and purposes, the

commission of a single offense.” State v. White, 8th Dist. No. 92972,

2010-Ohio-2342, ¶20. As we earlier noted, the city’s ordinances make each

day for which a violation is not remedied a separate offense. Separate

offenses can be individually punished, so they are not allied offenses of

similar import. See Akron v. Bilder (Apr. 15, 1992), 9th Dist. No. 14988.

IV

{¶ 14} Finally, Go Invest Wisely argues that the collective sentences

imposed were excessive, disproportionate, and contrary to law. It argues

that the court failed to take into consideration the applicable statutory criteria for imposing misdemeanor sentences and further failed to consider

whether Go Invest Wisely had the ability to pay the fines.

{¶ 15} The guidelines for misdemeanor sentencing are substantially

similar to those applied in felony sentencing. The court must be guided by

the purposes of misdemeanor sentencing, which are “to protect the public

from future crime by the offender and others and to punish the offender.”

See R.C. 2929.21(A). When determining the appropriate sentence, the court

must consider the factors listed in R.C. 2929.22(B), including the nature and

circumstances of the offense or offenses and whether the circumstances

indicate that the offender has a history of persistent criminal activity and

poses a substantial risk of reoffending. See R.C. 2929.22(B)(1). The courts

have broad discretion in misdemeanor sentencing. State v. Hughley, 8th

Dist. Nos. 92588 and 93070, 2009-Ohio-5824, ¶7, citing Cleveland v. Jurco,

8th Dist. No. 88702, 2007-Ohio-4305, ¶18.

{¶ 16} Go Invest Wisely has been a defendant in a number of housing

division cases. All of these cases are related in some form or another with Go

Invest Wisely’s failure to keep the houses it owns in a habitable and safe

condition. Some violations have been so extensive that they have resulted in

the demolition of houses; in other cases, adjoining property owners have

noticed increased drug activity in the vacant houses, causing them to live in

fear. Go Invest Wisely appeared to have just walked away from its investment, leaving it to the city to deal with vacant and deteriorating

housing that blighted neighborhoods.

{¶ 17} Go Invest Wisely was a repeat offender that found it easier to

abandon certain properties than comply with the law, thus indicating that it

posed a substantial risk of reoffending. It is plain that the court intended to

send a harsh message to Go Invest Wisely, yet the fines that the court

imposed were well below the maximum allowed by law.1 For example, in

2009 CRB 36813, the court noted that it could potentially impose a fine of

$4,584,000 for 23 different violations that extended over 78 days, but only

imposed a fine of $25,000. With the fines all falling well below the applicable

statutory limits, we cannot say that the court abused its discretion by

imposing sentence as it did. Finally, Go Invest Wisely argues that the court

made no determination of its ability to pay the fines. R.C. 2929.18(A)(4)

authorizes a trial court to impose financial sanctions, including a fine, upon

an offender. Before doing so, the court must consider the offender’s present

and future ability to pay the amount of the sanction or fine. R.C.

2929.19(B)(6). There are no express factors that must be considered or

Go Invest Wisely complains in its third assignment of error that the court erred as matter of 1

law by imposing sentences for first-degree misdemeanors on counts that were actually minor misdemeanors. After the completion of briefing, we remanded the case to the court to resolve certain finality issues associated with the sentences. On remand, the court sua sponte acknowledged that “certain charges in 2009 CRB 41011 and 2009 CRB 41014 were minor misdemeanor offenses rather than first-degree misdemeanors.” It amended the sentences for those counts to reflect that specific findings that must be made, State v. Martin, 140 Ohio App.3d 326,

338, 2000-Ohio-1942, 747 N.E.2d 318, and the court “may hold a hearing if

necessary to determine whether the offender is able to pay the sanction or is

likely in the future to be able to pay it.” See R.C. 2929.18(E). If the court

chooses not to have a hearing, we look to the totality of the record to see if the

ability to pay requirement has been satisfied. See State v. Lewis, 8th Dist.

No. 90413, 2008-Ohio-4101.

{¶ 18} The issue of fines was apparently the subject of pretrial

negotiations. The city’s assistant prosecuting attorney told the court that

the city desired a total fine of $76,000 in accordance with what she had

recommended at an earlier pretrial conference. Go Invest Wisely did not

object to the fine recommended by the city, but told the court that it had only

$100,000 “in the bank at this time[,]” had no income for the previous four

months, and had debt “of somewhere around $1.8 million dollars.” Despite

its claimed financial difficulties, Go Invest Wisely did not ask the court to

waive all fines, but merely to consider mitigating the fines. The court did

mitigate the fines, imposing only a fraction of what it could have imposed

under the relevant ordinances. On the record before us, we find no

compelling justification for finding that the court had to conduct a hearing on

Go Invest Wisely’s ability to pay the fines ordered by the court.

they were minor misdemeanors, so this argument is now moot. Judgment affirmed.

It is ordered that appellee recover of appellant its costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the Cleveland

Municipal Court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the

Rules of Appellate Procedure.

MELODY J. STEWART, JUDGE

PATRICIA ANN BLACKMON, P.J., CONCURS

FRANK D. CELEBREZZE, JR., J., CONCURS WITH SEPARATE CONCURRING OPINION

FRANK D. CELEBREZZE, JR., J., CONCURRING:

{¶ 19} I concur with the majority opinion, but write separately to

address an argument raised by Go Invest Wisely in its brief and at oral

arguments. Addressing the third assignment of error, the majority correctly

points out that Go Invest Wisely may be punished for each day as individual

violations of the housing code and that these offenses are not allied offenses of similar import. However, Go Invest Wisely also argued that the individual

code violations it was cited for should merge with the condemnation

violations.

{¶ 20} Go Invest Wisely was charged with and convicted of violating

C.C.O. 369.06 (sanitary facilities), 369.07 (connection of fixtures), 369.09

(connection of heating facilities), 369.12 (electrical facilities), 369.13 (general

maintenance), 369.14 (foundations), 369.15 (maintenance of exterior walls

and roof), 369.16 (maintenance of interior walls and roof), and 369.19

(secondary appurtenant structures), along with violations of C.C.O. 369.21

(condemnation).

{¶ 21} The condemnation provision, C.C.O. 369.21(a), states that “[a]ny

dwelling * * * building or structure determined by the Commissioner of

Housing to have any of the following defects shall be condemned as unfit for

human habitation:

{¶ 22} “(1) One which is so damaged, decayed, dilapidated, unsanitary,

unsafe or vermin-infected that it creates a hazard to the health, welfare or

safety of the occupants or of the public;

{¶ 23} “(2) One which lacks illumination, ventilation or sanitary

facilities adequate to protect the health or welfare of the occupants or of the

public; or {¶ 24} “(3) One which, because of its general condition or location is

unsanitary or otherwise dangerous to the health, safety or welfare of the

occupants or of the public.”

{¶ 25} This ordinance is an exceptional provision limited to situations

where code violations threaten the “health, welfare or safety of the occupants

or public.” The other provisions under which appellant was cited do not have

similar qualifying language. For example, C.C.O. 369.07 states:

{¶ 26} “(a) All plumbing fixtures in a dwelling structure shall be

supplied with running water from the Municipal water supply system.

{¶ 27} “(b) Every dwelling unit shall have an adequate supply of running

hot water properly connected to all plumbing fixtures requiring hot water.

{¶ 28} “(c) All plumbing fixtures in a dwelling structure shall be so

designed and installed as to prevent contamination of the water supply

system.”

{¶ 29} “[A] defendant can be convicted and sentenced on more than one

offense if the evidence shows that the defendant’s conduct satisfies the

elements of two or more disparate offenses.” State v. Williams, 124 Ohio

St.3d 381, 2010-Ohio-147, 922 N.E.2d 937, ¶36 (Lanzinger, J., concurring in

part and dissenting in part). See, also, State v. Johnson, 128 Ohio St.3d 153,

2010-Ohio-6314, 942 N.E.2d 1061. {¶ 30} Here, Go Invest Wisely’s failure to maintain adequate hot water

and plumbing connections does not lead to a violation of C.C.O. 367.21 —

sanitary facilities that endanger the health and safety of the occupants or the

public. The same is true for the other housing code violations. It is the

abandonment aspect of appellant’s actions that leads to the condemnation

charges.

{¶ 31} In State v. Johnson, 128 Ohio St.3d 153, 2010-Ohio-6314, 942

N.E.2d 1061, ¶67, Justice O’Connor’s concurring opinion set forth that

“offenses are of ‘similar import’ when the underlying conduct involves similar

criminal wrongs and similar resulting harm.” Here the various individual

code violations represent harm caused to the present and future occupants,

but the condemnation provision represents harm caused to the community in

having a blighted home in the neighborhood. Therefore, the offenses are not

allied, and Go Invest Wisely’s argument that the convictions for other code

violations should merge with the condemnation convictions is not

well-founded.