Hunter v. City of Cleveland

564 N.E.2d 718, 56 Ohio App. 3d 33, 1988 Ohio App. LEXIS 4521
CourtOhio Court of Appeals
DecidedNovember 21, 1988
Docket54584
StatusPublished
Cited by1 cases

This text of 564 N.E.2d 718 (Hunter v. City of Cleveland) 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
Hunter v. City of Cleveland, 564 N.E.2d 718, 56 Ohio App. 3d 33, 1988 Ohio App. LEXIS 4521 (Ohio Ct. App. 1988).

Opinion

Nahra, J.

The city of Cleveland is appealing the judgment of the trial court awarding (1) $7,500 to William Hunter and Willa Hunter for business damages, (2) $105,000 to Steve Davis, trustee in bankruptcy for Thermcraft Homes, Inc., and (3) $15,000 to William Hunter for negligent infliction of serious emotional distress, all as a result of the city’s improper issuance of two building permits and subsequent rescission of the permits.

Thermcraft Homes, Inc. was incorporated in Ohio in April 1982, and was in the construction and real estate development business, which included erecting prefabricated modular homes. William Hunter and Willa Hunter were the sole shareholders and corporate officers of Thermcraft.

On September 17,1982, the city of Cleveland issued two building permits to Thermcraft for the erection of two homes, one at 13514 South Woodland owned by Elaine Hamlet (the “Hamlet lot”) and the other at 2946 Ludlow owned by Queen Moore (the “Moore lot”). After learning that these lots were located in the Shaker Square Historic District, the city’s Division of Building and Housing voided the building permits on October 26, 1982, for the following reason: “Issued in Error. Not approved by the Landmarks Commission.” Pursuant to Section 161.05 1 of the Codified Ordinances *34 of the City of Cleveland, the city referred Thermcraft’s building permit applications to the Landmarks Commission.

On November 23,1982, following a hearing, the Landmarks Commission concluded that the exterior renderings and style of home proposed by Therm-craft were inappropriate for the Shaker Square Historic District. Pursuant to Section 161.05(d) 2 of the Cleveland Codified Ordinances, the Landmarks Commission imposed a waiting period of six months in order to negotiate with Thermcraft to attempt to find a manner of compliance. After several meetings and review of design changes, the Landmarks Commission issued a “certificate of appropriateness” in June 1983 for site-built homes. Thermcraft did not build these homes and, on December 12, 1984, Thermcraft declared bankruptcy.

On July 23, 1984, the Hunters and Thermcraft filed suit against the city for the destruction of their business and the negligent infliction of emotional distress against Mr. Hunter, among other things. Prior to trial the court overruled the city’s motion to dismiss the claims of the individual shareholders and motion to exclude evidence from the Landmarks Commissioners, evidence of damages concerning lots other than the Hamlet and Moore lots and evidence of damages concerning lots not owned by the Hunters or Thermcraft. The jury returned a verdict in favor of Therm-craft and the Hunters and the court entered judgment accordingly. The city timely appealed.

I

The city’s first assigned error is that:

“The court erred in allowing the jury to consider [the claims of] the individual plaintiffs, William and Willa Hunter, * * * when the city, at all times, dealt exclusively with the corporate entity, Thermcraft Homes, Inc. in granting and rescinding the building permits.”

The Supreme Court of Ohio has held that “[a] plaintiff-shareholder does not have an independent cause of action where there is no showing that he has been injured .in any capacity other than in common with all other shareholders as a consequence of the wrongful actions of a third party directed towards the corporation.” Adair v. Wozniak (1986), 23 Ohio St. 3d 174, 23 OBR 339, 492 N.E. 2d 426, syllabus. Only the corporation may complain of injury to it unless the wrongful act violates a contractual or other duty owed directly to the shareholder by the wrongdoer. Id. at 176, 23 OBR at 341, 492 N.E. 2d at 428. Thus, a plaintiff-shareholder’s claim should not be dismissed “if the pleadings state injury to the plaintiff upon an individual claim as distinguished from an injury which indirectly affects the shareholders or affects them as a whole.” Id. The alleged injuries suffered by the Hunters in this case were a result of the alleged injuries suffered by Thermcraft and not based on any independent contract the Hunters had with the city or on any duty owed the Hunters individually. Since the Hunters’ rights are merely derivative, they may only be asserted through the *35 corporation. Accordingly, this assignment of error is sustained.

II

The city’s second assigned error is that:

“The court erred in allowing the jury to consider plaintiff William Hunter’s claim for negligent infliction of emotional distress where this theory was based solely upon an employee of the city negligently granting a building permit to the corporate entity of which Mr. Hunter was a shareholder and officer.”

Mr. Hunter’s claim for the negligent infliction of serious emotional distress stems from the city’s voiding of two building permits and alleged unreasonable enforcement of various building code provisions. Again, this claim arises as a result of the alleged injuries suffered by the corporation and cannot be maintained individually. Moreover, “[incidental damages such as mental anguish * * * have never been held as collectable [sic] by officers of a bankrupt corporation.” Adair v. Wozniak, supra, at 177, 23 OBR at 341, 492 N.E. 2d at 428, fn. 1.

Even if such a claim were permitted, as a matter of law Mr. Hunter’s injuries, i.e., irritability, difficulty in sleeping, and lessened self-esteem, were not “serious” or “reasonably foreseeable.” See Paugh v. Hanks (1983), 6 Ohio St. 3d 72, 6 OBR 114, 451 N.E. 2d 759.

Accordingly, this assignment of error is sustained.

Ill

The city’s third through the last assigned errors, which will, be addressed collectively, are as follows:

Assignment of Error No. 3

“The court erred in allowing plaintiffs to introduce evidence and to seek damages resulting from proceedings before the city of Cleveland Landmarks Commission (and subcommittees thereof) all occurring after the two building permits were erroneously granted and then rescinded, where plaintiff had a full and fair opportunity to argue the merits of its claims before the Landmarks Commission, where plaintiffs never appealed from the determination of the Landmarks Commission, and where there is no allegation that the Landmarks Commission was not acting lawfully in fulfilling its discretionary, quasi-judicial function pursuant to Chapter 161 of the Codified Ordinances of the city of Cleveland.”

Assignment of Error No. 4

“It was error to allow plaintiffs to introduce evidence and claim damages from the city’s failure to sell certain parcels of property to the plaintiff corporation where there was no evidence of any unlawful or actionable conduct by the city in connection with the failure to convey title to this property.”

Assignment of Error No. 5

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Related

Village of Williamsburg v. Milton
619 N.E.2d 492 (Ohio Court of Appeals, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
564 N.E.2d 718, 56 Ohio App. 3d 33, 1988 Ohio App. LEXIS 4521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hunter-v-city-of-cleveland-ohioctapp-1988.