Kenko Corp. v. City of Cincinnati

917 N.E.2d 888, 183 Ohio App. 3d 583
CourtOhio Court of Appeals
DecidedAugust 21, 2009
DocketNo. C-080246
StatusPublished
Cited by10 cases

This text of 917 N.E.2d 888 (Kenko Corp. v. City of Cincinnati) 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
Kenko Corp. v. City of Cincinnati, 917 N.E.2d 888, 183 Ohio App. 3d 583 (Ohio Ct. App. 2009).

Opinions

J. Howard Sundermann, Judge.

{¶ 1} Plaintiffs-appellees, Kenko Corp. and Sonoma Hill, L.L.C. (“Sonoma”), sued defendant-appellant, the city of Cincinnati, to recover damages for costs incurred in preparing a city-owned tract of land for the construction of Sonoma Court, a public right of way in a subdivision created by Sonoma. Following discovery, the city moved for summary judgment under R.C. Chapter 2744 and on the merits. The trial court denied the city’s motion as to all claims. The city now appeals the trial court’s denial of its motion for summary judgment on the issue of its sovereign immunity.

I. The Sonoma Hills Subdivision

{¶ 2} The current dispute between the parties arises from the development of the Sonoma Hills subdivision in the Madisonville section of Cincinnati. Kenko Corporation owned a parcel of property with difficult topography in Madisonville. In early 2003, Ken Robinson, Kenko’s project manager, and Gerald Robinson, Kenko’s president, decided to develop a residential subdivision on the property if they could obtain an infrastructure subsidy from the city. At that time, the city, in an effort to encourage more residential-housing projects, was administering various programs to pay for infrastructure improvements in subdivision develop[585]*585ments that might not have otherwise attracted private investment. Kenko and Sonoma Hill, L.L.C., a single-member limited-liability company owned by Ken Robinson, ultimately formed a joint venture to develop the property.

{¶ 3} In March 2003, Ken met with Mary Foote, a senior analyst with the city’s Community Development and Planning Department (“CDP”), and Jim Smith, an engineering technical advisor with the Department of Transportation and Engineering (“DOTE”), at the property. According to Ken, Foote was pleasantly surprised by the project’s potential and told him that the project could work. Foote told Ken about the city’s procedure for infrastructure funding: everything in the right of way except for the retaining walls would be the city’s responsibility, and everything on the surrounding property would be Sonoma’s responsibility. Foote cited two nearby subdivisions, Woodcrest and Butterfield, as examples of the funding and the infrastructure improvements it covered.

{¶ 4} Shortly thereafter, Sonoma prepared a 2003 City Development Funding Application, allocating costs for everything in the right of way to the city and everything outside the right of way to Sonoma. The final version of the application allocated, at the city’s request, costs to the city for a Conspan Bridge instead of the much less expensive culvert bridge originally proposed by Sonoma. It also allocated to the city costs for the sidewalks on both sides of Sonoma Court and on one side of Strathmore Drive, the street leading to Sonoma Court, even though none of the lots in the development were situated on Strathmore. Finally, the cost of the final course of blacktop on Sonoma Court was allocated to the city.

{¶ 5} The application additionally required that Sonoma provide the city with information totally unrelated to infrastructure improvements, including the number of homes to be built, their square footage, their anticipated selling prices, and a market study of the development. In addition, Sonoma was required to produce architectural concepts, floor plans, architectural restrictions, and the name of builders with whom Sonoma had been negotiating.

{¶ 6} The estimates outlined in the application for the city’s portion of the development were prepared without any allowance for prevailing-wage costs imposed on the city by R.C. Chapter 4115. The application did not require that estimates be adjusted to account for prevailing wages and, in fact, contained no reference to them at all.

{¶ 7} By September 2003, Sonoma’s cost of preparing the site plans, engineering studies, and other documentation for the city’s use totaled $111,569.85. Prior to incurring these expenses, Ken had asked Foote for written confirmation of Sonoma’s and the city’s respective obligations in the development. Foote insisted that this was unnecessary. She assured Ken that Peg Moertl, the director of CDP, had approved the city’s obligations, that funding was readily available, and [586]*586that he should keep the project moving so that the city could start construction in the fall of 2003. Foote also indicated that putting anything in writing would trigger the application of prevailing wages to the entire project, a concern communicated to Smith as well.

{¶ 8} For the next few months, Foote continued to assure Ken that the city would pay for all items in the right of way. This was confirmed in a July 2003 memo from Smith, with a copy to Ken, which stated that “[t]he infrastructure construction will be a City contract, including all items within the R/W and all earthworks supporting it.” According to Smith, allocating infrastructure costs to the city was the “normal course of the way these projects proceeded],” and the term “earthworks” specifically included bringing the roadway up to grade.

{¶ 9} Cincinnati City Council approved the plans for dedication and accepted Sonoma Court at a council meeting on September 24, 2003. The city paid nothing to Kenko or Sonoma Hill for the property. After that meeting, Ken was unable to speak with any city representative until mid-October 2003, when Smith called him and said that the city had refused to approve any funds for the project unless Sonoma agreed to bring the earthworks in the right of way within two feet of the final grade. Smith told Ken that this would be the only infrastructure obligation transferred to Sonoma. Smith characterized this condition as “unusual” because “in none of the other projects that I worked on was there a need to break out part of the infrastructure work and put it on the responsibility of the developer.” Because Sonoma had already spent $111,569.85 on the project and had already given the right of way to the city, Ken agreed to the earthworks condition in an effort to salvage the project. Sonoma incurred expenses of approximately $87,000 in performing this work.

{¶ 10} From that point forward, the city continued to shift infrastructure items to Sonoma. The city insisted that Sonoma pay for all right-of-way utility trenching, sidewalks on Sonoma Court, and the final course of blacktop. Sonoma was also forced to pay for as-built drawings and telescoping for the stormwater system underneath Sonoma Court, because Sonoma’s homebuilder could not continue construction until that work was completed, and because the city was unable to get its roadway contractor, R.B. Jergens, to do it.

{¶ 11} The contract between R.B. Jergens and the city contained 62 pages of information regarding compliance with prevailing-wage statutes. It also contained provisions stating that the earthworks, the Sonoma sidewalks, and the final course of blacktop were Sonoma’s responsibility. However, neither Kenko nor Sonoma was a party to the city’s contract with R.B. Jergens. Ken had never seen the contract until his deposition in September 2006. While Ken attended an April 2004 meeting where the contract was allegedly discussed, this was eight months after Sonoma had incurred considerable development expenses and the city had already taken the property for Sonoma Court.

[587]*587{¶ 12} Between September and November 2003, CDP underwent a management audit performed by the internal audit division of the city’s finance department.

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Cite This Page — Counsel Stack

Bluebook (online)
917 N.E.2d 888, 183 Ohio App. 3d 583, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kenko-corp-v-city-of-cincinnati-ohioctapp-2009.