Hannibal Dev., L.L.C. v. Monroe Water Sys.

2019 Ohio 3697

• Court: Ohio Court of Appeals
• Decided: September 11, 2019
• Docket: 18 MA 0023
• Status: Published

Opinion

[Cite as Hannibal Dev., L.L.C. v. Monroe Water Sys., 2019-Ohio-3697.]

IN THE COURT OF APPEALS OF OHIO SEVENTH APPELLATE DISTRICT MONROE COUNTY

HANNIBAL DEVELOPMENT, LLC,

Plaintiff-Appellant,

v.

MONROE WATER SYSTEMS, et al.,

Defendants-Appellees.

OPINION AND JUDGMENT ENTRY Case No. 18 MO 0023

Civil Appeal from the Court of Common Pleas of Monroe County, Ohio Case No. 2018-224.

BEFORE: Cheryl L. Waite, Gene Donofrio, David A. D’Apolito, Judges.

JUDGMENT: Affirmed in part. Reversed and Remanded in part.

Atty. Randolph L. Snow, Atty. James M. Wherley, Jr., Atty. Robert B. Preston III, Black, McCuskey, Souers & Arbaugh, 220 Market Ave. S., Suite 1000, Canton, Ohio 44702, for Plaintiff-Appellant Hannibal Development, LLC.

Atty. Thomas D. White, Atty. Matthew A. Kearney, The White Law Office, Co., 209 N. Washington Street, Millersburg, Ohio 44654, for Defendant-Appellee Monroe Water Systems.

Atty. James L. Peters, Monroe County Prosecutor, 101 North Main Street, Room 15, P.O. Box 430, Woodsfield, Ohio 43793-0430, for Defendants-Appellees Monroe County Auditor and Treasurer. –2–

Dated: September 11, 2019

WAITE, P.J.

{¶1} Appellant Hannibal Development, L.L.C. (“Hannibal”) appeals a September

27, 2018 Monroe County Court of Common Pleas decision to grant Appellee Monroe

Water Systems’ (“Monroe Water”) Civ.R. 12(B)(6) motion to dismiss. Hannibal argues

that the trial court improperly failed to consider its alternative causes of action before

granting the motion to dismiss the complaint in its entirety. Hannibal also argues that the

court should have granted Hannibal permission to amend the complaint in lieu of

dismissal. For the reasons provided, Hannibal’s arguments have merit in part.

Accordingly, the trial court’s dismissal of the contract claims found in counts one, two,

and three of the complaint is reversed and this case is remanded for further proceedings

on these issues. However, the court’s judgment is affirmed as to the dismissal of the Title

7 claim in count one of the complaint.

Factual and Procedural History

{¶2} In July of 2014, Hannibal purchased the former Ormet manufacturing facility

(“Ormet”) which is located in Monroe County. Ormet was not in use at the time of the

purchase nor at anytime during Hannibal’s ownership. At the time of purchase, Hannibal

informed Monroe Water that it had purchased Ormet and that any bills should be sent to

Hannibal. Apparently, Monroe Water suggested that Hannibal pay $5,000 per month until

a usage history could be determined.

{¶3} Monroe Water did not send Hannibal a bill until nearly a year later, and

Hannibal did not make any payments during that time. This bill sent on May 29, 2015 by

Case No. 18 MO 0023 –3–

Monroe Water was in the amount of $87,302.24. This bill stated that late fees of

$8,730.22 would be added if payment was not timely received. The late fee would raise

the total amount to $96,032.46. According to Hannibal, Monroe Water failed to return

phone calls regarding this bill. At some point, Hannibal was informed that the amount

was due in full and that partial payments would not be accepted. Sometime thereafter,

Hannibal discovered and repaired an underground leak that was apparently responsible

for the high usage.

{¶4} Initially, Hannibal did not pay the bill and disputed the amount. Monroe

Water transferred the balance to the county auditor, who transferred it to the county

treasurer. The treasurer placed a lien on the Ormet property in the amount of

$228,436.60. It is unclear which portion of this amount derived from usage and which is

the result of late fees. Hannibal paid the amount in full to satisfy the lien, but continued

to dispute the amount owed. Hannibal subsequently sold the Ormet property after the

lien was removed.

{¶5} On June 13, 2018, Hannibal filed a complaint against Monroe Water,

Monroe County Auditor, Monroe County Treasurer, and John Does 1-5. The first count

of the complaint raised a claim to recover funds paid. This claim is based on an argument

that Monroe Water failed to determine the actual amount of usage through reading the

meter and failed to provide a quarterly bill to Hannibal, in violation of R.C. 743.04. The

complaint also raises alternate theories of breach of implied contract to monitor usage

and issue bills in the event that Title 7 of the Revised Code does not apply. The second

count of the complaint raises unjust enrichment. The third count requests declaratory

Case No. 18 MO 0023 –4–

judgment to establish that Hannibal did not owe the amount paid. This claim, presumably

focusing on the late fees, requests that these fees be returned to Hannibal.

{¶6} On August 8, 2018, Monroe Water filed a Civ.R. 12(B)(6) motion to dismiss

the complaint in its entirety. Monroe Water argued that Hannibal’s first count is based on

Chapter 7 of the Ohio Revised Code, which does not apply to an independent political

subdivision. Because they contended the second and third counts were predicated on

the first, Monroe Water argued that they must also be dismissed.

{¶7} On September 27, 2018, the trial court granted Monroe Water’s motion.

The trial court reasoned that Chapter 7 of the Ohio Revised Code does not apply to a

political subdivision pursuant to Chapter 6119. The court decided that Hannibal’s second

and third counts could not succeed without establishing the Chapter 7 claim. The court

did not specifically address Hannibal’s implied contract claim. It is from this judgment

entry that Hannibal timely appeals.

ASSIGNMENT OF ERROR

The Trial Court erred in granting Appellee's motion to dismiss under Ohio

Civ.R. 12(B)(6).

{¶8} Hannibal contends that, even if Title 7 does not apply to Monroe Water, it

was error for the trial court to dismiss the entire complaint where alternative contract

claims were asserted within the complaint. Hannibal argues that the first count included

an alternative claim based on contract and that the second and third counts are also

grounded in contract law. Hannibal also argues that the trial court should have allowed

them to amend the complaint instead of dismissing it in its entirety.

Case No. 18 MO 0023 –5–

{¶9} Monroe Water responds by arguing that each of Hannibal’s claims are

rooted in Title 7, which does not apply to them. While conceding that the unjust

enrichment and declaratory judgement claims are not specifically rooted in Title 7, Monroe

Water argues that the underlying complaint is based on Title 7.

{¶10} “A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which

relief can be granted tests only the legal sufficiency of the complaint.” Youngstown Edn.

Assn. v. Kimble, 2016-Ohio-1481, 63 N.E.3d 649, ¶ 11 (7th Dist.), citing State ex rel.

Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 548, 605 N.E.2d 378

(1992). When reviewing a Civ.R. 12(B)(6) motion, “the court must accept the factual

allegations contained in the complaint as true and draw all reasonable inferences from

these facts in favor of the plaintiff.” Kimble, supra, at ¶ 11, citing Mitchell v. Lawson Milk

Co., 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). In order to grant a Civ.R. 12(B)(6)

motion, “it must appear beyond doubt from the complaint that the plaintiff can prove no

set of facts entitling him to recovery.” O'Brien v. Univ. Community Tenants Union, Inc.,

42 Ohio St.2d 242, 327 N.E.2d 753 (1975), syllabus. However, “[i]f there is a set of facts

consistent with the complaint that would allow for recovery, the court must not grant the

motion to dismiss.” Kimble, supra, at ¶ 11, citing York v. Ohio State Hwy. Patrol, 60 Ohio

St.3d 143, 144, 573 N.E.2d 1063 (1991).

{¶11} A Civ.R. 12(B)(6) claim is reviewed de novo. Ford v. Baska, 2017-Ohio-

4424, 93 N.E.3d 195, ¶ 6 (7th Dist.), citing Perrysburg Twp. v. Rossford, 103 Ohio St.3d

79, 2004-Ohio-4362, 814 N.E.2d 44, ¶ 5.

{¶12} Monroe Water is a regional water district that is organized pursuant to

Chapter 6119 of the Ohio Revised Code. Monroe Water contends that R.C. 6119.06

Case No. 18 MO 0023 –6–

provides that regional water districts “may adopt their own rules and regulations, levy and

collect taxes and special assessments, and set their own rates and terms of service.”

(Emphasis deleted.) (Appellee Brf., p. 9.)

{¶13} In relevant part, R.C. 6119.06 provides:

Upon the declaration of the court of common pleas organizing the regional

water and sewer district pursuant to section 6119.04 of the Revised Code

and upon the qualifying of its board of trustees and the election of a

president and a secretary, said district shall exercise in its own name all the

rights, powers, and duties vested in it by Chapter 6119. of the Revised

Code, and, subject to such reservations, limitations and qualifications as

are set forth in this chapter, such district may:

(A) Adopt bylaws for the regulation of its affairs, the conduct of its business,

and notice of its actions;

***

(W)(1) Charge, alter, and collect rentals and other charges for the use of

services of any water resource project as provided in section 6119.09 of the

Revised Code. Such district may refuse the services of any of its projects

if any of such rentals or other charges, including penalties for late payment,

are not paid by the user thereof, and, if such rentals or other charges are

not paid when due and upon certification of nonpayment to the county

auditor, such rentals or other charges constitute a lien upon the property so

Case No. 18 MO 0023 –7–

served, shall be placed by the auditor upon the real property tax list and

duplicate, and shall be collected in the same manner as other taxes.

(BB) Do all acts necessary or proper to carry out the powers granted in

Chapter 6119. of the Revised Code.

{¶14} In relevant part, R.C 6119.09 states:

A regional water and sewer district may charge, alter, and collect rentals or

other charges, including penalties for late payment, for the use or services

of any water resource project or any benefit conferred thereby and contract

in the manner provided by this section with one or more persons, one or

more political subdivisions, or any combination thereof, desiring the use or

services thereof, and fix the terms, conditions, rentals, or other charges,

including penalties for late payment, for such use or services. Such rentals

or other charges shall not be subject to supervision or regulation by any

authority, commission, board, bureau, or agency of the state or any political

subdivision[.]

{¶15} Hannibal admits that count one is, in part, rooted in Title 7 of the Revised

Code. Thus, the trial court properly dismissed that claim. However, because Hannibal

raised alternative claims grounded in contract law, dismissal of the entire complaint was

improper.

Case No. 18 MO 0023 –8–

{¶16} Although count one did raise a Title 7 claim, it also provided: “[a]lternatively,

if such water charges are not considered to be taxes or assessments under R.C. 743.04,

then Monroe Water breached an implied contract to issue bills to Hannibal within a

reasonable time period and to monitor the water usage at the Ormet Facility.” (6/13/18

Complaint, p. 6.)

{¶17} In relevant part, count two of the complaint, titled “Unjust Enrichment,”

states:

32. By making the payment referenced above, a benefit was conferred by

Hannibal with knowledge by Defendants of the payment and retention of the

payment by Defendants under circumstances where it would be unjust to

do so.

33. The payment was made due to illegal water bills issued by Monroe

Water, which were then used to place an improper lien upon the Ormet

Facility.

(6/13/18 Complaint, p. 6.)

{¶18} In relevant part, count three of the complaint, titled “Declaratory Judgment”

states: “Hannibal did not owe the fees charged by Monroe Water and only paid them,

under protest, because a lien was placed upon the Ormet Facility.” (6/13/18 Complaint,

p. 7.)

{¶19} Monroe Water insists that they are entitled to create their own billing

procedure as they are not bound by those contained in Title 7. However, the question is

not whether Monroe Water violated Title 7. The question is whether Monroe Water

Case No. 18 MO 0023 –9–

violated its own billing procedures, procedures it created and adopted by Monroe Water

presumably pursuant to R.C. 6119. Monroe Water conceded at oral argument that

because this matter was dismissed at this early stage in the proceedings, its billing

procedures were not made part of the trial court record. As such, the issue of whether

Monroe Water breached its own procedures created pursuant to R.C. 6119 cannot be

resolved by simply looking to the complaint. Instead, discovery is required to develop

Hannibal’s claim.

{¶20} As the law requires denial of a Civ.R. 12(B)(6) motion where there exists

any set of facts consistent with the complaint that may allow for recovery, the trial court

erroneously granted Monroe Water’s motion to dismiss the complaint in its entirety.

Although the trial court properly dismissed the Title 7 claim, the remaining contract claims

cannot be resolved by reviewing the complaint, alone. Accepting all facts alleged by

Hannibal as true, there are allegations within the complaint that could allow Hannibal to

recover pursuant to law.

{¶21} We note that Hannibal also argues that the trial court should have allowed

them to amend the complaint for a more definitive statement of facts in lieu of granting

the motion to dismiss the complaint in its entirety. Due to our resolution of Hannibal’s

other arguments, this issue is moot. Accordingly, Hannibal’s sole assignment of error has

merit and is sustained.

Conclusion

{¶22} Hannibal argues that the trial court erroneously failed to consider the

alternative contractual causes of action before it granted a Civ.R. 12(B)(6) motion to

dismiss the complaint in its entirety. For the reasons provided, their argument regarding

Case No. 18 MO 0023 – 10 –

the contractual claims raised in the complaint has merit. Accordingly, the trial court’s

judgment as to these claims is reversed and remanded for further proceedings concerning

these issues according to law and consistent with this Court’s Opinion. However, the trial

court’s dismissal of the direct Title 7 claim is affirmed.

Donofrio, J., concurs.

D’Apolito, J., concurs.

Case No. 18 MO 0023 [Cite as Hannibal Dev., L.L.C. v. Monroe Water Sys., 2019-Ohio-3697.]

For the reasons stated in the Opinion rendered herein, the assignment of error

is sustained in part and overruled in part. It is the final judgment and order of this Court

that the judgment of the Court of Common Pleas of Monroe County, Ohio, is affirmed

in part as to the Title 7 claim and reversed in part as to the contract claims. We hereby

remand this matter to the trial court for further proceedings according to law and

consistent with this Court’s Opinion. Costs to be taxed against the Appellees.

A certified copy of this opinion and judgment entry shall constitute the mandate

in this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that

a certified copy be sent by the clerk to the trial court to carry this judgment into

execution.

NOTICE TO COUNSEL

This document constitutes a final judgment entry.